Wednesday, March 8, 2023
City of Rialto
Rialto City Hall, Council Chambers, 150 S. Palm Ave. Rialto CA 92376 Water Subcommittee
Regular Meeting - Final
1 March 8, 2023Water Subcommittee Regular Meeting - Final
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS
APPROVAL OF MINUTES
WS-23-234 Minutes from the January 25, 2023 Meeting
Meeting Minutes 1-25-23.pdfAttachments:
DISCUSSION ITEMS
WS-23-249 Update and presentation on the Lake Rialto Habitat Management Community Open Space Project (Lake Rialto).
WS-23-256 Capital Program Financing
WSC Funding Discussion 3-8-2023_TSS_TJC.pptxAttachments:
WS-23-240 Provide Direction on the City of Rialto ’s Proposed Water Rate Analysis to be completed by June 2023.
UPDATES
WS-23-235 Utility Manager Updates.
UPCOMING MEETINGS
ADJOURNMENT
2 City of Rialto
Legislation Text
File #: WS-23-234, Version: 1, Agenda #:
For Water Subcommittee Meeting [March 8, 2023]
TO: Water Subcommittee Members
FROM: Thomas J. Crowley, P.E., Utilities Manager
Minutes from the January 25, 2023 Meeting
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Water Subcommittee Meeting Minutes
January 25, 2023
Via Zoom
Meeting to order: 10:22 am
Subcommittee Members / City Staff:
Mayor Deborah Robertson
Council Member Ed Scott
Arron Brown, Acting City Manager
Robert Messinger, Assistant City Attorney
Tom Crowley, Utility Manager
Toyasha Sebbag, Assistant to the CM
Angela Perry, Mayor & City Manager’s Executive Assistant
Other Attendees
Steve Dopudja, Consultant
June Hayes, Commissioner
Peter Lucetti, Table Rock
Megan Matson, Table Rock
Evan Kominsky, Ullico
Public Comments: None
Minutes: November 9, 2022 – Accepted for the Record
Quick commercial video shown for Lake Rialto.
DISCUSSION ITEMS
1. WS-23-109 Present the up dated list of Capital Impr ovement Projects for the WIFIA and SRF Applications.
Presented by Tom
Committee Comments/Recommendations
Mayor – Areas that need to overlay for the future, we need to look at things now.
Mayor – Accelerate and revisit some of the items on the list.
Peter/Megan gave a presentation via paper copy.
Mayor – Arron, make sure David Turch knows about how we are already using this.
Q. CM Scott and Mayor – is there was enough money to fund.
CM Scott – this presentation is a little premature, until after rate increase discussion. He said he will have a hard time with a rate in crease. At the beginni ng of the Concession 4 2
agreement, they were told that surrounding cities would catch up, however now we need to know is why surrounding cities still havi ng rates from 10 years ago, why would we increase. He wants to know why the other cities have not increased, but we have.
3. WS-23-110 Provide Direction on the City of Rialto’s Proposed Water Rate Study to be completed by April 2023.
Presented by Tom/Toyasha
Committee Comments/Recommendations
CM Scott – he will not vote on increase in se wer, without sewer included in the study.
Mayor – asked legal, about something’s must fall on even year, such as CPI.
CM Scott – believes in the study – he want s to know why use the company, instead of going out to bid. Steve will work on getting comps.
Mayor – wants comparison with the cities listed in the staff report.
CM Scott – recommending study on both and bring back.
**Peter and Tom will work on dates for a Team meeting.**
2. WS-23-107 Provide Direct ion on the City of Rialto’s Proposed Strategic Water and Wastewater Value of Water Marketing Campaign.
Presented by Toyasha/Tom
Committee Comments/Recommendations
Mayor – feels that this should be a collaboration with WVW and Fontana.
CM Scott asked if they will be contributing too. Toyasha - Veolia is a partner on this campaign.
CM Scott – is it that our re sponsibility or the concessionaire. Toyasha – put together a draft plan and asked Peter to revi ew prior to bringing to Subcommittee. Mayor said lets work on a line item to add to the agreement. There is concern that RWS/Veolia’s information should have their information on the card.
4. WS-23-111 First Amendment to the Fi nal Construction Work Authorization for the additional costs for the Sycamore Sewer Lift Station Project.
Presented by Tom
Committee Comments/Recommendations
Mayor – we should know what AQMD is going to require.
Subcommittee said move with it.
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5. WS-23-087 Cooperative Agreement Be tween the City of Rialto and San Bernardino County for Bohnert/Banyon Rialto Area Sewer Project.
Presented by Tom
Committee Comments/Recommendations
CM Scott - asked why the county is encouraging residents to hookup. He said it is falling short without incentives. Mayor – talk to the County about these older and disadvantaged communities.
CM Scott – said that County has funds. Mayor – need to have a meeting with County Supervisor.
Mayor – we need to go back and look at the LAFCO agreement when taking the pockets.
Mayor and CM Scott said no we won’t agree to the agreement.
6. WS-23-108 Extraterrito rial Wastewater Service Agreement with Bloomington Hills, LLC, for the property located at northeast corner of Cedar Avenue and San Bernardino Avenue, Bloomington, CA, Assessor’s Parcel Nu mber 0250-101-76- 0000.
Presented by Tom
Committee Comments/Recommendations
Mayor – wants to see the improvements.
CM Scott – talked about a joint Ordinance that we need to be activated. Robert will send to Arron/Mayor – CM Scott already has seen it.
Subcommittee wants it brought to EDC.
Upcoming Meetings/Other Discussion Items
Next meeting will be March 8th
Adjournment: 12:33 pm.
6 City of Rialto
Legislation Text
File #: WS-23-249, Version: 1, Agenda #:
For Water Subcommittee Meeting [March 8, 2023]
TO: Honorable Water Subcommittee Members
APPROVAL: Thomas J. Crowley, P.E., Utilities Manager
Update and presentation on the Lake Rialto Habitat Management Community Open Space Project (Lake Rialto).
BACKGROUND:
At the direction of the Water Subcommittee, on January 4, 2023, staff, and Dopudja & Wells Consulting (DWC) hosted a Lake Rialto Kickoff Meeting with representatives from city departments and RWS/Veolia to provide a detailed presentation of Lake Rialto and to answer general questions from departments and RWS/Veolia. Subsequently, one-on-one department meetings were scheduled to determine department short and long-term operating needs and cross-departmental support:
ü RWS/Veolia - January 18th
ü Community Development/Planning - February 6th
ü Maintenance and Facilities Department - February 7th
ü Parks and Recreation Department - February 8th
ü Engineering Department - February 9th
ü Emergency Services - February 15th
o Risk Management Department
o Police Department
o Fire Department
Overall, the departments found the Lake Rialto Project to be exciting and are supportive and provided comments and recommendations. Some of the recommendations surrounded around department staffing support, project operations and maintenance, security, safety, etc. The next steps are to consider the comments and incorporate them into the design of the lake and the long-term operating costs. Staff is in the process of quantifying the costs for construction and long-term operations. These operational elements will be presented at the next month’sWater Subcommittee Meeting.
ANALYSIS/DISCUSSION
Based upon the comments received for the different departments, some design changes are being considered. Steve Dopudja with Dopudja Wells consulting will go over and update some of the design changes being considered.
RECOMMEDATION
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7 File #: WS-23-249, Version: 1, Agenda #:
Water subcommittee receive a presentation and provide direction on the design issues.
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8 City of Rialto
Legislation Text
File #: WS-23-256, Version: 1, Agenda #:
For Water Subcommittee Meeting [March 8, 2023]
TO: Honorable Water Subcommittee Members
APPROVAL: Thomas J. Crowley, P.E., Utilities Manager
Peter Luchetti, Rialto Water Services
Capital Program Financing
BACKGROUND:
RUA and RWS are continuing to advance water and wastewater capital projects as the City works through a policy discussion aimed at addressing utility budgetary and capital needs for the utilities.
RWS and the City have active capital raising processes underway with the Water Infrastructure Finance Innovation Act (WIFIA) and the State Revolving Fund (SRF) programs and numerous grant programs. We are anticipating a 12-18-month timeline to complete permanent financing with both programs.
In the meantime, in order to address urgent capital investment projects, and the preservation of time sensitive grants and ITC benefits there is a need to consider temporary bridge financing.
Attached is a PowerPoint presentation from Rialto Water Services presenting a bridge funding option.
RECOMMENDATION
Water Subcommittee receive the presentation and provide direction.
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9 Water & Wastewater
Capital Program
Financing Discussion
M A RC H 8 , 2 0 2 3
10 Background
• City Council approved WIFIA Loan
letter of interest.
• City Council authorized staff to
proceed with a portion of the
Microgrid project.
• By 03/31/2023 the city must apply
for a WIFIA Loan, which will cover
49% of project costs.
• In conjunction with WIFIA, will
coordinate with WIFIA to fund the
remainder of 51% through loans
and grants.
11 Objectives
• Provide advancement of Water and
Wastewater capital projects.
• Provide resolution to the 18-month gap
between federal and state loan financing.
• Provide Revenue Stability to “bridge” and
leverage financial opportunities
• Water Infrastructure Finance Innovation Act (WIFIA).
• State Revolving Fund (SRF) Loan.
• Approved Grant Funding and ITC tax benefits totaling
$27 MM.
12 Financing
Options
• Borrow from Water and/or
Wastewater Unfunded Reserves.
• Water, FY 23 projected balance = ~$4 MM.
• Wastewater, FY 23 projected balance = ~$10
MM.
• Bridge Financing – short-term loan
used until permanent financing is
received.
• RWS qualified through Barclays Bank using
the Microgrid & Solids Handling Projects.
• Enterprise Funds Coverage Requirements
unchanged by current requirements:
• Water is 1.17
• Wastewater is 1.15
13 $92.6 MM Immediate
Capital Priorities
Aimed at Reducing
Operating Risk and
Perfecting Grant, ITC,
and Loan Benefits
RWS and City teams
are focused on
meeting deadlines for
over $27 MM of
benefits immediately
available to the city
Draft 2024-2029 CIP Plan 2023-2028 Capital Program Grant/ITC Value Wastewater 46,850,000 $27,047,010
Water 24,850,000
Subtotal 71,700,000
Special Projects 58,170,000
Total $129,870,000
Less Est. Grants,Tax & Loan Program Benefits 40,000,000 $89,870,000
Bridge Financing Cash Needs 2023-2024 Capital Program Grant/ITC Value Water Projects
Etiwanda Line Replacement 6,700,000
Well 3A Groundwater Treatment System Project 4,200,000 2,000,000 AMI Project 8,000,000 2,000,000
Wastewater Proejcts
Microgrid 20,616,711 7,215,849
Plant 1 & 2 Demo + Electrical 10,993,205 3,297,962
Solids Handling 24,444,000 7,333,200
Sycamore/Acacia Sewer Upsizing 7,500,000
Digester #1, Sycamore LS (plug for Change/Design Revs) 2,000,000 Lake Rialto Habitat Management Project 8,200,000 5,200,000 Subtotal $73,753,916 $27,047,010
Total $92,653,916
14 Bridge Loan Strategy & Approach
• $92.6 MM for water, wastewater, and special projects. • The immediate bridge need (2023) is in the range of $40 to $60 MM.
• Will require Rate Analysis & recommended Rate adjustments in 2023,which enables expanding the bridge (as necessary up to $92.6 MM) to financial close with WIFIA and SRF later in 2024.
Note, it is anticipated that permanent financing with WIFIA and SRF will close before $92,6 MM in capital is deployed.
15 Bridge Loan Strategy & Approach (cont.)
• The water need is $18.9 MM. Current water coverage will not support immediate bridge financing.
• Wastewater has some excess coverage capacity (~$10 MM debt capacity) which meets a portion of what’s needed.
• Delay the annual $2.0 MM lease payment plus excess over lease payment ($.85, for a total of $2.85 MM) from the concession, sufficient cash would be freed up to meet the coverage need for a ~$40- $60 MM bridge loan for water and wastewater projects.
The lease payment would be repaid once permanent financing is in place.
16 Bridge Loan Strategy & Approach (cont.)
Once the rate increase process is complete the bridge loan can be expanded, if necessary, through the financial close of the WIFIA and SRF loans.
Using the lease payment to get through to permanent financing protects an estimated $40 MM in grants, ITC, loan forgiveness, and reduced interest expense offered by WFIA and SRF.
17 Proposed Bridge
Funding Solution
Water ,
Wastewater and
Other Special
Projects
• GMP approval for all projects is dependent on securing sufficient funding to proceed with construction.
• Bridge financing is available as long as the utility can show it is meeting coverage.
• Barclays is prepared to provide a firm, approved credit commitment (contingent on coverage and agreeable loan
documentation) in time for the formal GMP review and
approval of:
Microgrid GMP in April
Critical long lead time equipment order for solids
handling equipment in June/July time frame
Solids Handling GMP in October
Lake Rialto grant matching funds
AMI grant matching funds
Water treatment grant matching funds
• Coverage needs in 2023 were met by delaying payment to the city and in 2024 by approved rate increases.
• In addition to Barclays, RWS has been in discussions with Ullico and River City Bank regarding bridge funding.
18 City of Rialto
Legislation Text
File #: WS-23-240, Version: 1, Agenda #:
For Water Subcommittee Meeting [March 8, 2023]
TO: Honorable Water Subcommittee Members
APPROVAL: Thomas J. Crowley, P.E., Utilities Manager
Toyasha Sebbag, Assistant to the City Manager
Provide Direction on the City of Rialto’sProposed Water Rate Analysis to be completed by June 2023.
BACKGROUND:
The City of Rialto (City) provides water and wastewater services to residences and businesses within City limits. The City provides these services through the Rialto Utility Authority (RUA). The approximate wastewater service area is comprised of the entire City limits with additional services outside the City limit from portions of Fontana and Bloomington. The water service area is generally the central portion of the City and currently has 12,500 connections.
In 2012, the City Council/Rialto Utility Authority adopted resolutions approving a Concession Agreement with Rialto Water Services (RWS). The Concession Agreement outsourced the operations and maintenance of the City’sWater and Wastewater enterprise to a private contractor for a term of thirty years.
Per the Concession Agreement, the City maintains ownership of all assets and the authority and responsibility for setting utility rates subject to contractual obligations and financial performance standards.
In 2012, the City adopted a five-year rate schedule through the Proposition 218 process. The water and wastewater rates were last adjusted on January 1, 2018. The multi-year rate adjustments approved in 2012 allowed for the financing and implementation of $41 million in improvements and repairs that improved system reliability and efficiencies for both the water and wastewater systems.
Of the $41 million in the financing, $13 million was approved for water infrastructure and $28 million was approved for wastewater infrastructure investments.
ANALYSIS/DISCUSSION
On November 12, 2019, staff presented for the City Council’sconsideration a request to conduct a Public Hearing and Approve Resolution No.7575 and RUA Resolution No.09-19 Approving the Proposed Consumer Price Index Rate Adjustments for Water and Wastewater Utility Services as supported by the FG Solutions Financial Planning Analysis Report. The Resolutions would have provided for an increase in water and wastewater rates on January 1, 2021, 2022, 2023, and 2024.
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19 File #: WS-23-240, Version: 1, Agenda #:
After the comprehensive calculation of January 1, 2021, adjustments, future water, and wastewater adjustments were to be calculated equating to the smaller of:
· Previous Rate multiplied by Most Recent September Riverside CPI-U Value divided by the Previous September Riverside CPI-U Value, or
· Previous Rate multiplied by 1.015.
The City Council moved to not approve staff recommendation for a water and wastewater rate multi- year adjustment.
On April 2, 2020, Governor Newsom signed Executive Order N-42-20 authorizing a moratorium on water disconnections/penalties to assist residents and businesses who lost income due to the COVID -19 pandemic. This resulted in Rialto’snormal arrearages of $500,000 monthly growing to slightly over $2 million in January 2023. On February 1, 2023, Rialto’s water moratorium ended, which should allow for arrearages to be brought down within the normal monthly operating amount of $500,000 over the next year. However, looking closely at the arrearages, the July 2022 consumer price index (CPI) for Riverside-San Bernardino-Ontario is at 9.2%, and the last CPI adjustments were on February 1, 2018, for 0.589% for water and 1.503% for wastewater services. (The Bureau of Labor Statistics (“BLS”)introduced new geographic area samples in January 2018 which split the Los Angeles-Riverside-Orange County CPI into two regions called Los Angeles-Long Beach-Anaheim (which includes Los Angeles and Orange Counties) and Riverside-San Bernardino-Ontario (which includes Riverside and San Bernardino Counties). It is the Riverside-San Bernardino-Ontario CPI index that was recommended to be used for all future rate analyses by FG Solutions, LLC as a better representative of the City of Rialto’s year-over-year economic condition. 2023 Water and Wastewater Rate Analysis Fee Proposal
Staff solicited a water rate analysis proposal from FG Solutions, LLC because, in 2018, the consultant completed a comprehensive water and wastewater multi-year rate analysis for the City of Rialto and for their background in the Concession Agreement Financial Obligations. The proposal to conduct a Water Rate Study was presented to the Water Subcommittee Meeting on January 25, 2023. Staff was then asked to return to the Water Subcommittee with a proposal to complete a Water and Wastewater Rate Analysis as well as “industry comps”, a comparison of similar business proposals to quantify FG Solutions, LLC’sperformance value as a Sole Source Contract. The fee proposal for Phase 1 of the Water and Wastewater Rate Study is $88,881 and falls within the City Manager’s signature authority.
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20 File #: WS-23-240, Version: 1, Agenda #:
Should the results of the Water and Wastewater rate analysis determine the necessity for the Water Subcommittee to recommend that the City Council move forward with a rate adjustment within Prop 218 guidelines then staff would recommend moving forward with Phase 2 of the rate study for $49,416, which would bring the total cost of the contract to $138,297 requiring City Council authorization.
The following are industry comps completed within the last few years to complete a comparable utility rate study:
TOTAL WATER/WASTEWATER SERVICES 33,966
2023, City of Rialto, $138,297, cost per account is $4.07 TOTAL WATER/WASTEWATER SERVICES 79,000
2022, City of San Bernardino, $88,062, cost per account is $1.11 TOTAL WATER/WASTEWATER SERVICES 20,100
2021, City of Ontario, $100,000, cost per account is $4.98 TOTAL WATER/RECYCLED SERVICES 43,000
2014-2017, City of Corona, $164,245 (rates not adopted) & 2018/19 update, $79,368 Total Cost, $243,613, cost per account is $5.62
The urgency for moving forward with a water and wastewater rate analysis is that the City’srate structure will be assessed to apply for and receive a State Revolving Fund (SRF) Loan and may be evaluated by the US EPA for the Water Infrastructure Finance and Innovation Act (WIFIA) loan. The timing for the SRF and WIFIA loans are outlined to be completed by January 2024 with some project costs made before the issuing of the loan reimbursable. 2023 Water and Wastewater Rate Analysis & Adjustment Timeline Should there be a new water and/or wastewater rate schedule proposed, below is a suggested/tentative timeline that can be adjusted to meet community involvement, feedback, and Prop 218 Notification requirements to implement a new rate structure by January 2024:
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21 File #: WS-23-240, Version: 1, Agenda #:
2023 Water and Wastewater Rate Analysis
1. Kick-off Meeting with staff - On or before March 22, 2023.
2. Water Subcommittee meeting - June 2023.
Should the Water Subcommittee recommend moving forward with a Rate Adjustment
3. Utilities Commission meeting - July 2023.
4. City Council meeting - August 2023.
5. Proposition 218 mailing - August 2023.
6. Proposition 218 Public Hearing - October 2023.
RECOMMENDATION:
Staff recommends that the Water Subcommittee provide direction on the City of Rialto’sproposed Water and Wastewater Rate Analysis to be completed by June 2023.
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22 City of Rialto
Legislation Text
File #: WS-23-235, Version: 1, Agenda #:
For Water Subcommittee Meeting [March 8, 2023]
TO: Honorable Water Subcommittee Members
APPROVAL: Thomas J. Crowley, P.E., Utilities Manager
Utility Manager Updates.
BACKGROUND:
Discussion items
· Mid Basin Operable Unit (MBOU):
City of Rialto staff along with staff from the City of Colton and West Valley Water District participated in a conference call on March 2, 2023 with the EPA and Raytheon on the status of the MBOU. Raytheon is finalizing a Remedial Design work plan with the EPA. This work Plan will be availble later this month.
As part of the Work Plan, Raytheon will be conducting a final pump test at the toe of the plume to characterize the flow and direction. This information will be used in the locating and design of the extraction well. The water produced for this well will be conveyed to the West Valley treatment facilities located adjacent to the Rialto High School.
Below are some of the most recent key milestones:
1. Feasibility Study for Operable Unit 2 (MBOU) was issued in April 2021.
2. City of Colton and Rialto provide comments and objections to the Feasibility Study.
3. After many discussions with Colton, Rialto, West Valley Water District and the EPA, an Alternate Remedy Treatment Solution was agreed upon and submitted to the EPA in August 2022. The Alternate Remedy Treatment Solution is to treat the toe of the plume well at the West Valley’s treatment facilities located next to Rialto High School.
4. A Record of Decission (ROD) was issued in September 2022 considering the alternate solution.
5. The next step is the release of the Remedial Design Work Plan that will implement the final studies, design, and construction of the proposed remedy. The Remedial Design Work Plan is currently being reviewed by the EPA and will be released this month., City of Rialto Printed on 3/3/2023Page 1 of 2
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23 File #: WS-23-235, Version: 1, Agenda #:
March 2023. Raytheon (RTX) is the Potential Responsible Party (PRP) that is charged with the responsibility to implement and MBOU Remediation. · Terrace Water Company Consolidation:
The state’s direction is to move forward with focusing efforts on Terrace Water Company’s feasibility of consolidating with the City of Colton.
· Utility User Tax Exemption:
A question came up on how many residents have applied for the Utility User Tax (UUT) Exemption offered to our residents:
1. UUT Senior Discount
To date, there are 2,766 approved senior applicants receiving the UUT discount. Once a resident is approved for the senior discount there is no additional reassessment to maintain the discount, as it is a lifetime approval.
2. UUT Low-Income Discount
For the current fiscal year, there are 1,014 approved residents receiving the UUT discount due to Low-Income and a total of 11 applicants have been denied. Unlike the senior discounts, which are lifetime approval, the low-income applicants must be reassessed annually to re-determine eligibility.
· Future Agenda Items
o Triennial Review for Water and Wastewater and Customer Service o State of the City’s Water Supplies
o Stormwater and Recharge opportunities
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