Attachment 1_2023 Rialto WATER and WASTEWATER Study Report 01112024.pdf — Rialto City Council, February 27, 2024 (part 1 of 2)

2023 Water and Wastewater
Rate Study Report

City of Rialto

January 2024

Prepared by:

FG SOLUTIONS
697 Grand St #118
Brooklyn, NY 11211
www.fg-solutions.com

697 Grand St #118
Brooklyn, NY 11211

2023 Water and Wastewater Rate Study Report
Prepared for
City of Rialto
150 S Palm Avenue Rialto, CA 92376
January 11, 2024

This report has been prepared for the use of the client for the specific purposes identified in the report. The conclusions, observations and recommendations contained herein attributed to FG Solutions, LLC constitute the opinions of FG Solutions, LLC. To the extent that statements, information, and opinions provided by the client or others have been used in the preparation of this report, FG Solutions, LLC has relied upon the same to be accurate, and for which no assurances are intended, and no representations or warranties are made. FG Solutions, LLC makes no certification and gives no assurances except as explicitly set forth in this report. © 2024 FG Solutions, LLC
All rights reserved.

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Table of Contents
Table of Contents
List of Tables
List of Figures
List of Abbreviations ......................................................................................................... ........................... v Executive Summary ............................................................................................................. ........................ 1

1. Background and Report Organization ............................................................................................. 1-1

1.1 Introduction ............................................................................................................................ 1-1

1.2 Current Water and Wastewater Rates .................................................................................. 1-2

1.2.1 Water ........................................................................................................................ 1-2

1.2.2 Wastewater .............................................................................................................. 1-2

1.3 RUA Financial Structure ........................................................................................................ 1-3

1.4 Overview of Trust Account Structure .................................................................................... 1-4

1.5 Rate Study Process ................................................................................................................ 1-6

2. Revenue Requirement Analysis .................................................................................................. .... 2-1

2.1 Introduction ............................................................................................................................ 2-1

2.2 Overview of Methodology and Key Assumptions ................................................................. 2-1

2.3 Water Revenue Requirement ................................................................................................ 2-2

2.3.1 Water System Revenues ......................................................................................... 2-2

2.3.2 Projected Water System Expenses ......................................................................... 2-2

2.3.3 Projected Reserves ................................................................................................. 2-5

2.3.4 Projected RUA Operating Statement ...................................................................... 2-5

2.3.5 Projected Operating Statement for Water System Trust Accounts ...................... 2-6

2.3.6 Financial Performance Criteria ............................................................................... 2-7

2.4 Wastewater Revenue Requirement ...................................................................................... 2-8

2.4.1 Wastewater System Revenues ............................................................................... 2-8

2.4.2 Projected Wastewater Expenses ............................................................................ 2-9

2.4.3 Projected Reserves ............................................................................................... 2-11

2.4.4 Projected RUA Operating Statement .................................................................... 2-12

2.4.5 Projected Operating Statement for Wastewater System Trust Accounts .......... 2-13

2.4.6 Financial Performance Criteria ............................................................................. 2-14

3. Cost of Service Analysis and Rate Design ...................................................................................... 3-1

3.1 Water Cost-of-Service Analysis .............................................................................................. 3-1

3.2 Proposed Water Rates ........................................................................................................... 3-1

3.3 Wastewater Cost-of-Service Analysis .................................................................................... 3-3

3.4 Proposed Wastewater Rates ................................................................................................. 3-1

4. Comparison With Other Utilities ...................................................................................................... 4-1 2023 Water and Wastewater Rate Study – City of Rialto Table of Contents

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4.1 Introduction ............................................................................................................................ 4-1

4.2 Comparison with Other Utilities ............................................................................................ 4-1

5. Ongoing Considerations ................................................................................................................... 5-1 Appendix A: Revenue Requirement ............................................................................................................ 1 Appendix B: Water Cost-of-Service Analysis ............................................................................................... 1 Appendix C: Water Rate Design ................................................................................................. ................. 1 Appendix D: Wastewater Cost of Service Analysis ..................................................................................... 1 Appendix E: Wastewater Rate Design ......................................................................................................... 1

List of Tables
Table ES-1 .................................................................................................................... Existing Water Rates Table ES-2 .......................................................................................................... Existing Wastewater Rates Table ES-3 ..................................................................... Projected Water Revenues Under Existing Rates Table ES-4 ........................................................... FY 23/24 - FY 27/28 Water Capital Improvement Plan Table ES-5 ............................................... Projected Uses of Funds for the Water System Trust Accounts Table ES-6 ............................................................ Projected Wastewater Revenues Under Existing Rates Table ES-7 ................................................. FY 23/24 - FY 27/28 Wastewater Capital Improvement Plan Table ES-8 ..................................... Projected Uses of Funds for the Wastewater System Trust Accounts Table ES-9 .......................................................................................... Proposed Monthly Minimum Charge Table ES-10 ........................................................................................................ Proposed Volume Charges Table ES-11 ....................................................................................... Proposed Fireline and Hydrant Rates Table ES-12 ..................................................................................................... Proposed Wastewater Rates Table ES-13 ................................................................................................ Monthly Water Bill Comparison Table ES-14 ....................................................................................... Monthly Wastewater Bill Comparison Table 1-1 ...................................................................................................................... Existing Water Rates Table 1-2 ............................................................................................................ Existing Wastewater Rates Table 2-1 ........................................................................ Projected Water Revenues Under Existing Rates Table 2-2 ......................................................................................... Projected Water Waterfall 1 Expenses Table 2-3 .................................................................................... Projected RUA Water Retained Expenses Table 2-4 ............................................................. FY 23/24 - FY 27/28 Water Capital Improvement Plan Table 2-5 ......................................................................................... Projected Water Depreciation Expense Table 2-6 ........................................................................ Projected RUA Water Fund Operating Statement Table 2-7 ............................................. Projected Sources of Funds for the Water System Trust Accounts Table 2-8 .................................................. Projected Uses of Funds for the Water System Trust Accounts Table of Contents 2023 Water and Wastew ater Rate Study – City of Rialto

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Table 2-9 ......................................................................................... Projected Water Coverage Calculation Table 2-10 ............................................................ Projected Wastewater Revenues Under Existing Rates Table 2-11 ............................................................................. Projected Wastewater Waterfall 1 Expenses Table 2-12 ........................................................................ Projected RUA Wastewater Retained Expenses Table 2-13 ................................................. FY 23/24 - FY 27/28 Wastewater Capital Improvement Plan Table 2-14 ............................................................................ Projected Wastewater Depreciation Expense Table 2-15 ............................................................ Projected RUA Wastewater Fund Operating Statement Table 2-16 ................................ Projected Sources of Funds for the Wastewater System Trust Accounts Table 2-17 ..................................... Projected Uses of Funds for the Wastewater System Trust Accounts Table 2-18 ............................................................................. Projected Wastewater Coverage Calculation Table 3-1 ............................................................. Functionalization of Water Rate Revenue Requirement Table 3-2 ......................................................................... Allocation of Water Rate Revenue Requirement Table 3-3 ................................ Relationship Between Water Service Characteristics and Rate Structure Table 3-4 ............................................................................................. Proposed Monthly Minimum Charge Table 3-5 ............................................................................................................ Proposed Volume Charges Table 3-6 ............................................................................................ Proposed Fireline and Hydrant Rates Table 3-7 .................................................... Functionalization of Wastewater Rate Revenue Requirement Table 3-8 ................................................................ Allocation of Wastewater Rate Revenue Requirement Table 3-9 ....................... Relationship Between Wastewater Service Characteristics and Rate Structure Table 3-10 ....................................................................................................... Proposed Wastewater Rates Table 4-1 ..................................................................................................... Monthly Water B ill Comparison Table 4-2 ............................................................................................ Monthly Wastewater Bill Comparison

Figure 1-1 ............................................................................................... Operating Expense Flow of Funds Figure 1-2 .................................................................................................... Capital Expense Flow of Funds

2023 Water and Wastewater Rate Study – City of Rialto Table of Contents

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List of Abbreviations
AF Acre-Foot or Acre-Feet
AWWA American Water Works
Association
AWWA M1 Manual AWWA Ratemaking
Manual
cf cubic feet
CIMIS California Irrigation
Management Information
System
CIP Capital Improvement
Program
COSA Cost-of-Service Analysis
CPI Consumer Price Index
DIF Development Impact Fees
DSCR Debt Service Coverage
Ratio
FTE full-time equivalent
FY fiscal year (July 1–June
30)
GPM Gallons per Minute
hcf hundred cubic feet
IEUA Inland Empire Utilities
Agency
kgal thousand gallon(s)
MG Million Gallons
MGD Million Gallons per Day
MIPP Municipal Industrial
Pretreatment Program
MWD Metropolitan Water District
O&M operations and
maintenance
OR&R Operating Repair &
Replacement
PUC Public Utilities Commission
RA Replenishment
Assessment
RHNC Rialto Habitat Nature
Center
RUA Rialto Utilities Authority
RWS Rialto Water Services
SBMWD San Bernardino Municipal
Water District
SWRCB State Water Resources
Control Board
T&D Transmission and
distribution
WIFIA Water Infrastructure
Finance and Innovation
Act
WVWD West Valley Water District
WWTP wastewater treatment
plant

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Executive Summary
The City of Rialto (“City”) provides water and wastewater services to residences and bu sinesses in the City limits.

The wastewater service area is approximat ely the entire City limits with additi onal service outsid e the City limits from portions of Fontana and Bloomington. The water service area is approximately the central portion of the City.

The City provides these services through the Rialto Utility Authority (“RUA”).

In 2012, the City entered into a Concession Agreement with Rialto Water Services (“RWS”), where RWS operates the water and wastewater system. Additionally, RWS is responsible for capital project delivery.

The Concession Agreement outlines the roles and responsibilities of each party. The City retains the responsibility to set water and wastewater rates. In 2012, the City adopted a five-year schedule of rates through a process compliant with Proposition 218. Water and wastewater rates were last increased on February 1, 2018.

As part of its ongoing responsibility to provide safe and reliable water and wastewater service as the owner of the water and wastewater systems, the City has determined the need to evaluate the utility’s future financial needs.

This rate study projects the ongoing fi nancial needs of the water and wastewater utilities and includes proposed water and wastewater rates through FY 27/28.

This report describes the results of the analysis that support the proposed water and wastewater rates. Specifically, this report:
• Describes current water and wastewater rates.
• Describes the financial structure of the City’s water and wastewater utilities. • Provides an overview of the trust account structure.
• Outlines the projected expenses and revenues of the water and wastewater utilities. • Shows the proposed wastewater and sewer rates.
• Compares an example residential monthly water and wastewater bills with neighboring utilities. • Describes ongoing considerations that the City should monitor with financial implications.

Throughout this report, information for the water and wastewater utilities are shown separately.

Historical and budgeted financial and operational data were provided by the City and used by FG Solutions to develop the projected revenue requirement for the five-year st udy period. The revenue re quirement analysis was an iterative process and draft versions were revised based on comments and input provided by City staff. Next, the revenue requirement was compared with the revenues generated by the existing rates, to calculate how much additional revenues are needed from rate increases. A cost-of-service analysis consist ent with industry standards was performed. This analysis is the basis for developing water and wastewater rates.

Key assumptions used in the Revenue Requirement analysis are summarized in Section 2. Section 3 summarizes the cost-of-service analysis and shows the pr oposed water and wastewater rates. There are five appendices to this report. Report appendices contain th e Revenue Requirement Analysis, the Cost-of-Service Analysis and rate calculations for both the Water and Wastewater utilit ies. The Revenue Requirement Analysis included in the Appendix covers a 10-year period thro ugh FY 32/33. The first five years of the Revenue Requirement Analysis (through FY 27/28) form the basis of the proposed water and wastewater rates described in this Rate Study report.

Table ES-1 shows existing water rates, and Table ES-2 shows existing wastewater rates.

Executive Summary 2023 Water and Wastew ater Rate Study – City of Rialto

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Table ES-1 Existing Water Rates

Line Existing
No. Water Rate Component Rate (1)
1 Monthly Minimum Charge
2 Single Family Residences, Multiple Family
Connections, Commercial, Landscape, and Industrial
Service Customers
3 1/2 " & 5/8" meter $30.42
4 3/4" meter $30.42
5 1" meter $44.01
6 1 1/2" meter $53.04
7 2" meter $152.54
8 3" meter $324.45
9 4" meter $550.59
10 6" meter $1,138.62
11 8" meter $1,636.17
12 Fire Hydrant Water $324.45
13 14 Volume Charges, $/ccf
15 All Customers Except those Noted Below
16 1 - 5 Units $1.07
17 6 - 30 Units $1.69
18 31 - 60 Units $2.70
19 61 - Over units $3.32
20 Multiple Apartments
21 Over 49 Units and Mobile Homes $2.40
22 Landscape
23 1 to 30 Units $2.70
24 31 and over units $3.32
25 26 Fireline ($/month/inch diameter)
27 Rate $27.91
28 29 Hydrant
30 Water Use, $/ccf $3.33
31 Per Day $10.81
Notes:
(1) Existing rates have been effective since 2/1/18. Rates do not include the City's Utility Users Tax. 2023 Water and Wastewater Rate Study – City of Rialto
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Table ES-2 Existing Wastewater Rates

Current water rates are shown in Table ES-1. These rates were used to project the revenues shown in Table ES-3.

Revenue estimates under current rates shown in Table ES-3 for FY 24/25 through FY 27/28 are projected to remain at FY 23/24 values, after adjusting for the projected 0.5 percent annual system growth rate. FY 23/24 revenues are calculated based on Calendar Year 2022 actual water us e, number of customers in Calendar Year 2022, and the existing rate structure.

Line Existing
No. Wastewater Rate Component Rate (1) (2)
1 Group I ($/month/residential unit)
2 Residential $62.19
3 Residential X 1.3 $80.84
4 Residential Multi. $62.19
5 6 Group II, $/ccf metered water use
7 Commercial $6.77
8 (includes - Softwater Service, Car Wash, Office Buildings, Cleaners, 9 Department/Retail Stores, Warehouse, Car lots, Equipment Rental, Storage Units, 10 Hospitals, Manufacturing, Indoor Theater, Day Care, Pre School, 11 Disabled Care, Nail/Hair Salon, Church)
12 13 Group III, $/ccf metered water use
14 Commercial $7.96
15 (includes - Hotels /Motels (no restaurant), repair and Service Station, 16 Shopping Center, Recreation Park, Nursery/Florist,
17 Manufacturing - Non-Domestic, Lumber Yard, Nightclub, Bar, Hall) 18 19 Group IV, $/ccf metered water use
20 Commercial $10.17
21 (includes - Hotels /Motels (w/restaurants), Bakeries, Dairy, 22 Supermarkets, Dairy, Meat Market, Mom & Pop, Mortuary, Restaurants, 23 Fast Food, Catering)
24 25 Group V, $/student/month
26 Schools -
27 Elementary $0.85
28 Junior High $2.03
29 High $2.03
30 Continuation $0.85
31 Adult Education $0.85
32 33 Group VI, $/ccf water use
34 Large Volume $6.77
35 Hospital $6.77
36 Commercial Building $6.77
Notes:
(1) Existing rates have been effective since 2/1/18. Rates do not include the City's Utility Users Tax. (2) Group II, III, IV, and VI extraterritorial customers are charged 1.3 times the corresponding rates shown in this table for in-city customers.

Executive Summary 2023 Water and Wastew ater Rate Study – City of Rialto

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Table ES-3. Projected Water Revenues Under Existing Rates

Table ES-4 shows the projected Capital Improvement Plan through FY 27/28. The capital improvements shown in Table ES-4 represent the highest priority capital projects, prioritized by City staff from a longer list of potential capital projects developed by RWS. The City has been successful in pursuing grant funding, which reduces the financial impact of these projects to the City’s ratepayers. The total cost of the Capital Improvement Plan is $20.9 million, of which $12 million (or 57 percent) is grant funded.

Table ES-4. FY 23/24 - FY 27/28 Water Capital Improvement Plan

Table ES-5 shows the Projected Uses of Funds for the Water System Trust Accounts. The table shows details of how funds flow through the Waterfalls, resulting in the Total Uses of Funds.

Projected
Revenue FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Rate Revenues Subject to Rate Increases (1) $13,053,423 $13,092,562 $13,131,701 $13,170,841 $13,209,980 Development Impact Fees (2) 200,000 200,000 200,000 200,000 200,000 County Contract - SBCO Water Order 332,264 349,264 366,727 385,064 404,317 Rents & Concessions 83,000 85,075 87,202 89,382 91,616
Trustee Water Reserve Interest Income (3) 60,000 60,000 60,000 60,000 60,000 Turn On/Off 50,750 50,750 50,750 50,750 50,750
Delinquent Water Service Fees (4) 00000
Grant Revenue (5) 1 6 5 , 0 2 50000
Other Charges for Current Services 00000
Miscellaneous Revenues (6) 147,592 151,282 155,064 158,940 162,914 Water Meter Damages/Lost/Replacement Fees (7) 49,300 49,300 49,300 49,300 49,300 RUA Investment Income (8) 110,640 30,275 14,485 12,003 16,908 Total $14,251,994 $14,068,508 $14,115,230 $14,176,280 $14,245,785 Notes:
(1) FY 23/24 per RUA budget. Increased in subsequent years for system growth. Refer to Section 3 for system growth projections. (2) FY 23/24 per RUA budget. Development Impact Fee revenues are deposited into the Trust Water Construction Reserve. (3) Based on approximate actual revenues during the second quarter of 2023. Excludes interest income in the Trust Water Construction Reserve.
(4) Delinquent water service fees are excluded from this analysis due to City policies that have temporarily suspended assessme nt of these fees.
(5) Grant revenues are non-recurring.
(6) FY 23/24 from RUA budget, increased in subsequent years for inflation. Primarily labor reimbursement from San Bernardino Co unty. (7) FY 23/24 per RUA budget. Projected to remain at this value in subsequent years. (8) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance.

Funding Sources
Project Grants DIF RUA Reserves Debt Total Cost
Watermain Replacement - Etiwanda $2,900,000 $3,800,000 $6,700,000 AMI Project 8,000,000 8,000,000
W-WW Security Upgrade Project 2,000,000 2,000,000
Arsenic Treatment Well 3A 2,000,000 4,200,000
Total $12,000,000 $2,900, 000 $0 $3,800,000 $20,900,000 2023 Water and Wastewater Rate Study – City of Rialto
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Table ES-5. Projected Uses of Funds for the Water System Trust Accounts

Table ES-6 is the Projected Wastewater Revenues under existing rates.

Table ES-6: Projected Wastewater Revenues Under Existing Rates

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Waterfall 1: Water Service Fee (1)
Fixed, Routine R&R, and Labor Components $6,590,955 $6,755,729 $6,924, 622 $7,127,738 $7,305,931 Chemical Component 63,096 64,673 66,290 67,947 69,646
Waterfall 1: Reimbursements (1)
Insurance Reimbursement 869,512 891,249 913,531 936,369 959,778 Independent Engineer 109,296 112,028 114,829 117,700 120,642 Maintenance 221,300 226,833 232,503 238,316 244,274
Waterfall 1: Retained RUA Expenses (2) 5,052,865 4,908,977 5,104,647 5,310,403 5,526,860 Waterfall 2: Annual Operating R&R Payment (3) 680,000 697,000 714,425 732,286 750,593 Waterfall 3: Capital Charges 2,900, 000 2,900,000 2,900,000 2,900,000 2,900,000 Waterfall 3: New Debt Service (4) 0 0 443,154 443,154 443,154 Waterfall 4: Water Reserve Account Deposits (5) 272,119 17,367 214,378 114,978 111,741 Waterfall 5: RUA Lease Payment 400,000 400,000 400,000 400,000 400,000 Transfer to RUA (6) 17,092 398,010 292,987 527,794 1,151,055 Total Uses of Funds $17,176,235 $17, 371,866 $18,321,366 $18,916,684 $19,983,675 Notes:
(1) See Table 2-2.
(2) See Table 2-3.
(3) FY 23/24 from RUA FY 23/24 budget. Projected to increase with inflation in subsequent years. (4) Based on 30-year debt at 6% interest, per City's Financial Advisor, 10/05/23. Includes approximately $240,000 for capitaliz ed bond reserve and costs of issuance.
(5) This row represents the amount of contributions from RUA to maintain the minimum required balance in the Water Reserve Acco unt held in trust.
(6) This transfer is intended to cover depreciation expense, and collection of depreciation expense through rates is being phas ed in over time. This number differs from what is shown in Table 2-6 becuase some transfers out of the waterfall are recorded on the last day of the fiscal year; they appear in RUA accounts in the subsequent fiscal year.

Projected
Revenue FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Sewer Service Fees (1) $26,080,285 $26,177,675 $26,275,064 $26,372,454 $26,469,843 Extraterritorial Sewer Service Fees (1) 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 Development Impact Fees (2) 350,000 350,000 350,000 350,000 350,000 Fines/Forfeitures/Penalties (3) 2,000 2,000 2,000 2,000 2,000 Rents and Concessions (Anaergia Lease) (4) 00000
Trustee Wastewater Reserve Interest Income (5) 100,000 100,000 100,000 100,000 100,000 Delinquent Sewer Service Fees (3) 200,000 200,000 200,000 200,000 200,000 Grants (6) 3 7 0 , 0 0 00000
Effluent Sale to IEUA (7) 144,375 144,375 144,375 144,375 144,375 RUA Investment Income (8) 3,930 322,330 329,410 233,937 241,265 Total $29,090,488 $29,136,277 $29,240,747 $29,242,663 $29,347,380 Notes:
(1) FY 23/24 per RUA budget. Increased in subsequent years for system growth. Refer to Section 5 for system growth projections. (2) FY 23/24 per RUA budget. Development Impact Fee revenues are deposited into the Trust Wastewater Construction Reserve. (3) Projected to remain at FY 23/24 budgeted values in subsequent years. (4) Revenues from the Anaergia lease are not projected to occur in this Rate Study planning period. (5) Based on approximate actual revenues during the second quarter of 2023. Excludes interest income in the Trust Water Construction Reserve.
(6) Grants are non-recurring.
(7) Source: City staff, 7/12/23. 3,500 AFY @ $275/AF in FY 23/24 dollars. $/AF adjusted with inflation, and payment starts 1/1/29.

Prepayment of 15% of total revenues starting FY 23/24.
(8) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance.

Executive Summary 2023 Water and Wastew ater Rate Study – City of Rialto

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Table ES-7 is a detailed breakdown of the funding for the Wastewater Capital Improvement Plan. Grants have been obtained for the Sewer System Security Upgrades and the Rialto Habitat Nature Center. Other projects, such as the Sycamore Sewer Upsize, Acacia Sewer Upsize, and the Rialto Biosolids Project are funded partially or entirely with Development Impact Fees. Much of the Capital Improvement Plan is being funded by debt.

Table ES-7. FY 23/24 - FY 27/28 Wastewater Capital Improvement Plan Table ES-8 shows projected uses of fu nds for the Wastewater System Trust Accounts. Each of the Waterfalls are explained in detail in Section 2. Additional details can be found in Appendix A.

Table ES-8. Projected Uses of Funds for the Wastewater System Trust Accounts

Section 3 details the Cost-of-Service Analysis for both wa ter and wastewater. Table ES-9 is the Proposed Monthly Minimum Charge for the Water system. The Monthly Minimu m Charge increases with meter size. 94 percent of Funding Sources (1)
Project Grants DIF RUA Reserves Debt Total Cost
Sewer System Security Upgrades $2,000,000 $2,000,000
Sycamore Sewer Upsize 5,000,000 5,000,000
Acacia Sewer Upsize 2,000,000 2,000,000
Digester No. 1 Activation & Digester No. 2 Rehabilitation 1,800,000 1,800,000 Rialto Biosolids Project 400,000 10,000,000 16,000,000 26,400,000 Agua Mansa Lift Station Upgrades 2,000,000 2,000,000
Plant 5 Secondary Clarifier A&B Overhaul 500,000 500,000 Ayala Lift Station Upgrade and Repair 2,000,000 2,000,000 Electrical Upgrade 8,800,000 8,800,000
Rialto Habitat Nature Center 5,250,000 3,000,000 8,250,000 Total $7,250,000 $7,400,000 $10,000,000 $34,100,000 $58,750,000 Notes:
(1) Source: City of Rialto staff report for 12/12/2023 City Council meeting, except for Rialto Habitat Nature Center per City s taff, June 20 2 Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Waterfall 1: Wastewater Service Fee (1)
Fixed, Routine R&R, and Labor Components $6,804,152 $6,974,255 $7,148,612 $7,327,327 $7,510,510 Chemical Component 729,932 748,180 766,885 786,057 805,708 Waterfall 1: Reimbursements (1)
Insurance Reimbursement 999,756 1,024,750 1,050,369 1,076,628 1,103,544 Independent Engineer 109,349 112,083 114,885 117,757 120,701 Waterfall 1: Retained RUA Expenses (2) 5,150,829 4,901,629 5,230,375 5,421,275 5,621,157 Waterfall 2: Annual Operating R&R Payment (3) 930,000 953,250 977,081 1,001,508 1,026,546 Waterfall 3: Capital Charges 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 Waterfall 3: New Debt Service (4) 0 0 0 2,676,671 2,676,671 Waterfall 4: Water Reserve Account Deposits (5) 238,082 (2,468) 143,515 779,754 114,403 Waterfall 5: RUA Lease Payment 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 Transfer to RUA (6) 649,708 1,784,735 1,794,100 1,140,995 2,426,472 Total Uses of Funds $29,893,808 $30,778,415 $31,507,822 $34,609,972 $35,687,712 Notes:
(1) See Appendix A for more detail.
(2) See Table 2-12.
(3) FY 23/24 from RUA FY 23/24 budget. Projected to increase with inflation in subsequent years. (4) Based on 30-year debt at 6% interest, per City's Financial Advisor, 10/05/23. Includes approximately $1.4 million for capit alized bond reserve and costs of issuance.
(5) This row represents the amount of contributions from RUA to maintain the minimum required balance in the Wastewater Reserve Account held in trust.
(6) This transfer is intended to cover depreciation expense, and collection of depreciation expense through rates is being phas ed in over time. The drop in the transfer from FY 25/26 to FY 26/27 is to meet cash flow requirements as the projected new debt servi ce payments are required. By FY 27/28, the transfer is sufficient to cover depreciation expense on existing assets. This number di ffers from what is shown in Table 2-15 becuase some transfers out of the waterfall are recorded on the last day of the fiscal year; they a ppear in RUA accounts in the subsequent fiscal year.
2023 Water and Wastewater Rate Study – City of Rialto
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residential customers have a ¾” or smaller water mete r and would pay, staring on 3/1/24, a Monthly Minimum Charge of $33.38 per month.

Table ES-9. Proposed Monthly Minimum Charge, Water

Table ES-10 shows the proposed volume charges for wate r. The tier structure for Residential and Commercial customers changed, reduced from four tiers to three tiers. Note 1 for Table ES-10 provides the existing rate structure for comparison. The new tier structure allows for more water in the first tier. 9 ccf is approximately the typical indoor water use per household.

Table ES-10: Proposed Volume Charges

Table ES-11 describes the proposed Fireline and Hydrant rate s. Fireline rates are for customers that have separate meters that provide fire protection. Most residential cust omers do not pay this. Hydrant rates are for meters that attach to fire hydrants, often used by construction contractors during construction projects.

Meter Proposed Monthly Minimum Charges
Size Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 5/8 x 3/4" $30.42 $33.38 $37.38 $39.63 $42.00 $44.52
1" $44.01 $51.03 $57.15 $60.58 $64.21 $68.07
1-1/2" $53.04 $95.15 $106.56 $112.96 $119.74 $126.92
2" $152.54 $148.09 $165.86 $175.81 $186.36 $197.54
3" $324.45 $289.28 $323.99 $343.43 $364.04 $385.88
4" $550.59 $448.11 $501.88 $532.00 $563.92 $597.75
6" $1,138.62 $889.31 $996.03 $1,055.79 $1,119.14 $1,186.29 8" $1,636.17 $1,418.76 $1,589.01 $1,684.35 $1,785.41 $1,892.54 Proposed Volume Charges
Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Residential and Commercial
0 - 9 ccf per month See Note 1 $1.82 $2.04 $2.16 $2.29 $2.43 10 - 30 ccf per month See Note 1 $2.06 $2.31 $2.45 $2.59 $2.75 >31 ccf per month See Note 1 $3.05 $3.42 $3.62 $3.84 $4.07 Multiple Apartments Over 49 Units and Mobile Homes
All water use $2.40 $2.56 $2.87 $3.04 $3.22 $3.42
Landscape
0 - 30 ccf per month $2.70 $2.06 $2.31 $2.45 $2.59 $2.75 >31 ccf per month $3.32 $3.05 $3.42 $3.62 $3.84 $4.07
Notes:
(1) The current tiered volume charges for Residential and Commercial customers is:
0 - 5 ccf per month: $1.07/ccf
6 - 30 ccf per month: $1/69/ccf
31 - 60 ccf/month: $2.70/ccf
> 61 ccf/month: $3.32/ccf
Executive Summary 2023 Water and Wastew ater Rate Study – City of Rialto

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Table ES-11. Proposed Fireline and Hydrant Rates

Table ES-12 shows the proposed Wastewater Rates for th e study period. The existing rate structure is retained, where residential customers pay a flat monthly fee for wastewater service. Commercial customers continue to pay a wastewater volume charge, based on metered water consum ption. Extraterritorial customers, located outside of Rialto city limits, will continue to pay 1.3 times the rate of a customer within the Rialto City limits. More information can be found in Section 3 and Appendix D and E.

Proposed Rates
Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Fireline
3" meter $83.73 $19.34 $21.66 $22.96 $24.33 $25.79
4" meter $111.64 $41.21 $46.15 $48.92 $51.86 $54.97
6" meter $167.46 $119.70 $134.07 $142.11 $150.64 $159.68 8" meter $223.28 $255.09 $285.70 $302.84 $321.01 $340.27 10" meter $279.10 $458.74 $513.79 $544.62 $577.29 $611.93 Hydrant
Rate, $/ccf $3.33 $2.26 $2.53 $2.68 $2.84 $3.01
Per Day $10.81 $3.34 $3.43 $3.51 $3.60 $3.69
2023 Water and Wastewater Rate Study – City of Rialto
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Table ES-12. Proposed Wastewater Rates

Section 4 of the report provides a comparison of the City’s existing and proposed water and wastewater rates with comparator local utilities. This comparison was completed by City Staff and included in this report. Table ES-13 is the Monthly Water Bill Comparison , Water. Existing water rates in the City are in the bottom half of the comparator list.

Proposed water rates are in the middle of the pack.

Proposed Rates
Customer Type (1) (2) Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Group I ($/month/residential unit)
Residential $62.19 $65.49 $68.19 $70.99 $73.91 $75.65
Residential X 1.3 $80.84 $85.14 $88.65 $92.29 $96.08 $98.35 Residential Multi. $62.19 $65.49 $68.19 $70.99 $73.91 $75.65 Group II, $/ccf metered water use
Commercial $6.77 $5.70 $5.80 $5.90 $6.04 $6.19
(includes - Softwater Service, Car Wash, Office Buildings, Cleaners, Department/Retail Stores, Warehouse, Car lots, Equipment Rental, Storage Units, Hospitals, Manufacturing, Indoor Theater, Day Care, Pre School, Disabled Care, Nail/Hair Salon, Church)
Group III, $/ccf metered water use
Commercial
$7.96 $8.03 $8.36 $8.70 $9.06 $9.27
(includes - Hotels /Motels (no restaurant), repair and Service Station, Shopping Center, Recreation Park, Nursery/Florist,
Manufacturing - Non-Domestic, Lumber Yard, Nightclub, Bar, Hall) Group IV, $/ccf metered water use
Commercial
$10.17 $11.67 $12.92 $14.24 $15.38 $15.75
(includes - Hotels /Motels (w/restaurants), Bakeries, Dairy, Supermarkets, Dairy, Meat Market, Mom & Pop, Mortuary, Restaurants, Fast Food, Catering)
Group V, $/student/month
Schools -
Elementary
$0.85 $1.00 $1.10 $1.20 $1.30 $1.34
Junior High $2.03 $2.20 $2.40 $2.60 $2.75 $2.86
High $2.03 $2.20 $2.40 $2.60 $2.75 $2.86
Continuation $0.85 $1.00 $1.10 $1.20 $1.30 $1.34
Adult Education $0.85 $1.00 $1.10 $1.20 $1.30 $1.34
Group VI, $/ccf water use
Large Volume $6.77 $5.70 $5.80 $5.90 $6.04 $6.19
Hospital $6.77 $5.70 $5.80 $5.90 $6.04 $6.19
Commercial Building $6.77 $5.70 $5.80 $5.90 $6.04 $6.19 Notes:
(1) Existing rates have been effective since 2/1/18. Rates do not include the City's Utility Users Tax. (2) Group II, III, IV, and VI extraterritorial customers are charged 1.3 times the corresponding rates shown in this table for in-city customers.

Executive Summary 2023 Water and Wastew ater Rate Study – City of Rialto

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Table ES-13. Monthly Water Bill Comparison

Table ES-14 is the Monthly Wastewater Bill Comparison, Wastewater. The City’s wastewater rates, both existing and proposed, are at the top of the pack. The City’s wastewat er rates for residential customers are the highest of the comparators. It should be noted that each utility in the comparator list has a capital improvement plan, debt schedules and O&M costs that differ from the City of Rialto . Additionally, none of the comparators are parties to a Concession Agreement. The Concession Agreement has spec ific reserve coverage requ irements and has unique agreements with the City for capital projects and the debt associated with those projects. Additionally, the City of Rialto recently completed a major upgrade to its wastew ater treatment plant. The City invested considerable resources into this capital project, and the debt associated with this project is reflected in both existing and proposed rates.

Table ES-14. Monthly Water Bill Comparison

There are several factors that could change over the next few years that have financial implications. The extent to which these factors change may influence the financial condition of the water and wastewater systems and the City’s ongoing reviews of water and wastewater rates. Section 5 discusses Ongoing Considerations and things the City should continue to monitor its financ ial status on an ongoing basis. Below is the list of items that should be monitored. More details are shown in Section 5.
 Water consumption. Water system revenues depend on water consumption Comparator Utility
Rates current on
1/1/2024 (1)
Fontana Water Company (Water) 105.79
Marygold Water 82.53
City of Banning 74.35
Jurupa Community Services District 69.77
City of Corona DWP 64.69
City of Rialto, PROPOSED 64.18
East Valley Water District 63.38
Cucamonga Valley Water District (CVWD) 63.38
West Valley Water District (WVWD) 57.31
Loma Linda, City of 55.95
City of Rialto, EXISTING 54.36
City of Riverside Public Utilities 52.19
City of Colton 53.10
San Bernardino Municipal Water District 48.15
City of Redlands Municipal Utilities 46.09
Comparator Utility
Rates current on
1/1/2024 (1)
City of Rialto, PROPOSED 65.49
City of Rialto, EXISTING 62.19
City of Banning 47.12
Jurupa Community Services District 46.37
City of Corona DWP 45.60
San Bernardino Municipal Water District 45.35
Loma Linda, City of 44.44
East Valley Water District 43.09
City of Riverside Public Utilities 39.59
City of Redlands Municipal Utilities 38.12
City of Colton 34.33
City of Fontana (Sewer) 33.74
Cucamonga Valley Water District (CVWD) 29.58
2023 Water and Wastewater Rate Study – City of Rialto
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 Long-Term Water Use Objectives Legislation. Recent changes to California state law may result in additional water conservation efforts and reduced water consumption.  Changing Conditions. Water and wastewater utility conditions change on an ongoing basis. o Increased wastewater chemical costs.
o Uncollectables reimbursement from the State of California. o 2024 Labor Reset. Every four years, the Labor Component of the Concession Agreement RWS Service Charge is renegotiated to account for inflation and changes in staffing.  Capital project spending and financing.
 As capital project construction bids are awarded, the City will have greater certainty regarding capital costs and schedule.
 The proposed water and wastewater rates are based on capital improvement debt with an interest rate of 6 percent.
 The proposed water and wastewater rates are based on 25 percent coverage cr iteria, as specified by the City, for planning purposes.
 Inflation rates.
 Many expenses, including the RWS Service Fees, are tied to actual changes in inflation rates.  Development activity in the Division’s service area. If system growth through FY 27/28 is higher than expected, this will result in more revenues than projec ted in this analysis, from both Development Impact Fees and utility rate revenues paid by the future cust omers. The City should monitor system growth and make any appropriate adjustments to budgeting and spending plans.

Detailed calculations for the Revenue Requirement, the Cost of Service Analysis, and Rate Calculations can be found Ihe Appendices, at the end of the report.

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Section 1
Background and Report Organization

1.1 Introduction
The City of Rialto (“City”) provides water and wastewater services to residences and bu sinesses in the City limits.

The City provides these services through the Rialto Utility Authority (“RUA”).

This rate study projects the ongoing fi nancial needs of the water and wastewater utilities and includes proposed water and wastewater rates through FY 27/28.

This report describes the results of the analysis that support the proposed water and wastewater rates. Specifically, this report:
 Describes current water and wastewater rates.
 Describes the financial structure of the City’s water and wastewater utilities.  Provides an overview of the trust account structure.
 Outlines the projected expenses and revenues of the water and wastewater utilities.  Shows the proposed water and wastewater rates.
 Compares an example residential monthly water and wastewater bills with neighboring utilities.  Describes ongoing considerations that the City should monitor with financial implications.

Throughout this report, information for the water and wastewater utilities are shown separately.

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1.2 Current Water and Wastewater Rates

1.2.1 Water
Table 1-1 shows current water rates, which were last adjusted on February 1, 2018.

Table 1-1. Existing Water Rates

Notes:
(1) Existing rates have been effective since 2/1/18. Rates do not include the City's Utility Users Tax.

1.2.2 Wastewater
Table 1-2 shows current wastewater rates, which were last adjusted on February 1, 2018.

Line Existing
No. Water Rate Component Rate (1)
1 Monthly Minimum Charge
2 Single Family Residences, Multiple Family
Connections, Commercial, Landscape, and Industrial
Service Customers
3 1/2 " & 5/8" meter $30.42
4 3/4" meter $30.42
5 1" meter $44.01
6 1 1/2" meter $53.04
7 2" meter $152.54
8 3" meter $324.45
9 4" meter $550.59
10 6" meter $1,138.62
11 8" meter $1,636.17
12 Fire Hydrant Water $324.45
13 14 Volume Charges, $/ccf
15 All Customers Except those Noted Below
16 1 - 5 Units $1.07
17 6 - 30 Units $1.69
18 31 - 60 Units $2.70
19 61 - Over units $3.32
20 Multiple Apartments
21 Over 49 Units and Mobile Homes $2.40
22 Landscape
23 1 to 30 Units $2.70
24 31 and over units $3.32
25 26 Fireline ($/month/inch diameter)
27 Rate $27.91
28 29 Hydrant
30 Water Use, $/ccf $3.33
31 Per Day $10.81
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Table 1-2. Existing Wastewater Rates

Notes:
(1) Existing rates have been effective since 2/1/18. Rates do not include the City's Utility Users Tax. (2) Group II, III, IV, and VI extraterritorial customers are charged 1.3 times the corresponding rates shown in this table for in-city customers.

1.3 RUA Financial Structure
The City maintains three funds where water and wastewater utility revenues and expenses are recorded. Fund 670 is the Water Fund, Fund 660 is the Wastewater Fund, and Fund 680 records the City’s RUA Administration expenses.

All water revenues are recorded in Fund 670, and nearly all water expenses are paid from Fund 670. Similarly, all wastewater revenues are recorded in Fund 660 and nearly all wastewater expenses are paid from Fund 660. Certain costs associated with City staff who are assigned to the water and wastewater utilities are paid from Fund 680 and the funding source for Fund 680 is transfers from the Water and Wastewater Funds.

In addition, there are two types of transfers from the Water Fund and the Wastewater Fund to the City’s General Fund:
 A transfer to cover the costs incurred by the General Fund that support the water and wastewater utilities, and
Line Existing
No. Wastewater Rate Component Rate (1) (2)
1 Group I ($/month/residential unit)
2 Residential $62.19
3 Residential X 1.3 $80.84
4 Residential Multi. $62.19
5 6 Group II, $/ccf metered water use
7 Commercial $6.77
8 (includes - Softwater Service, Car Wash, Office Buildings, Cleaners, 9 Department/Retail Stores, Warehouse, Car lots, Equipment Rental, Storage Units, 10 Hospitals, Manufacturing, Indoor Theater, Day Care, Pre School, 11 Disabled Care, Nail/Hair Salon, Church)
12 13 Group III, $/ccf metered water use
14 Commercial $7.96
15 (includes - Hotels /Motels (no restaurant), repair and Service Station, 16 Shopping Center, Recreation Park, Nursery/Florist,
17 Manufacturing - Non-Domestic, Lumber Yard, Nightclub, Bar, Hall) 18 19 Group IV, $/ccf metered water use
20 Commercial $10.17
21 (includes - Hotels /Motels (w/restaurants), Bakeries, Dairy, 22 Supermarkets, Dairy, Meat Market, Mom & Pop, Mortuary, Restaurants, 23 Fast Food, Catering)
24 25 Group V, $/student/month
26 Schools -
27 Elementary $0.85
28 Junior High $2.03
29 High $2.03
30 Continuation $0.85
31 Adult Education $0.85
32 33 Group VI, $/ccf water use
34 Large Volume $6.77
35 Hospital $6.77
36 Commercial Building $6.77
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 The RUA Lease payment, as RUA leases the assets of the water and wastewater utilities from the City.

1.4 Overview of Trust Account Structure
The Concessionaire, Rialto Wa ter Services, (RWS), is required to operat e and maintain the water and wastewater systems and deliver capital projects. The Concession Agreemen t established a series of accounts held in trust for these purposes, where water and wastewater system reve nues are deposited, and from which expenses are paid.

Water and wastewater revenues and expenses are accounted for separately within the series of trust accounts.

In an abbreviated form, Figure 1-1 shows the flow of funds to pay operating expenses. The Concession Agreement calls for all water and wastewater revenues to be deposite d with the Trustee. The revenues are deposited into a Master Revenue Account held in trust, then transfe rred to various accounts esta blished by the Concession Agreement and not shown in Figure 1-1. From these account s, expenses are paid to RWS, the contract operator (Veolia), and third parties.

Figure 1-1. Operating Expense Flow of Funds

At the end of each fiscal year, if there is more cash in the trust accounts than is necessary to meet the Concession Agreement financial performance criteria described in Section 2, the excess cash is returned to RUA.

From time to time, particularly to meet Coverage Requirements established by the Concession Agreement, additional revenue from the City is required. The City and RWS collaborate to estimate, in advance, if additional revenues from the City are expected to be required. If additional revenue is required, a “Revenue Stabilization” payment is made from RUA Water Fund reserves or RUA Wastewater Fund reserves to the Trustee. Revenue Stabilization payments refers to funds provided by the Ci ty to the Trustee, to meet the Concession Agreement Coverage Requirement. Refer to Section 2 for a discussion on Concession Agreement Coverage Requirements.

The Concession Agreement also established a priority system for classifying operating expenses paid from the trust accounts, referred to colloquially and in this report as “the Waterfall”. As noted above, separate accounts are maintained for water and wastewater expenses. There are separate Waterfalls for the Water and Wastewater utilities. Below are descriptions of each Waterfall.

Waterfall 1
Waterfall 1 includes the following items, in no particular order of relative priority:

Excess
Cash
Revenue
Stabilization
As Needed
Concession
Agreement
Trust Accounts
RUA Accounts
All Revenues Operating
Expenses
RUA Lease
Payment to City
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 RWS Wastewater Service Fee. This is the amount paid to RWS for operating and maintaining the water and wastewater systems.
 RWS Reimbursable Payments. These payments reimburse RWS for its insurance, an Independent Engineer required by the Concession Agreement, and maintenance expenses in excess of contractual limits specified in the Concession Agreement.
 Retained RUA Expenses. These are expenses including (but not limited to) electricity, natural gas, wages and benefits of City employees, biosolids disposal, and other services provided by the City.

Waterfall 2
Waterfall 2 are payments into the Op erating Repair and Replacement (“OR&R”) accounts. OR&R is a term defined in the Concession Agreement referring to a category of maintenance expenses that are more expensive than “Routine Repair & Replacement” but less expensive than a capital project.

Waterfall 3
Waterfall 3 are Capital Charges. Capital Charges are similar to a debt service payment. RWS used debt and equity funding at the initiation of the Concession Agreement for items including:
 Capital Improvements funded by RWS
 Refinancing existing City water and wastewater debt
 Project development costs
 Capitalizing a lump sum RUA Lease Payment to the City  Revenue Stabilization over the first five years of the Concession Agreement to allow water and wastewater rate increases to be phased in.

Future capital projects, whether funded by the City or by RWS that result in debt service payments, are also a Waterfall 3 expense.

Waterfall 4
Waterfall 4 are payments to meet tr ust account minimum reserve balance re quirements as established in the Concession Agreement.

Waterfall 5
Waterfall 5 is the RUA Lease Payment, payable to the City’s General Fund.

Figure 1-2 shows the flow of funds to pay capital expenses , also in an abbreviated form. Separate sets of accounts are maintained for the water and wastewater utilities. All revenues, including Development Impact Fees (DIF) revenues, are deposited into the Conc ession Agreement Trust A ccounts, from which capital expenses are paid.

Concessionaire and City financing could include loan proceeds or grants. At the City’s discretion, the City may choose to use RUA reserves to fund capital projects.

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Figure 1-2. Capital Expense Flow of Funds

1.5 Rate Study Process
The 2023 Water and Wastewater Rate Study was initiated in April 2023 and was completed in two phases. Phase 1, authorized by City Council on April 11, 2023, consisted of a Revenue Analysis. The focus of Phase 1 was to develop a revenue requirement, by preparing a 10-year water and wastewater financia l projection. The financial analysis developed projected revenue needs. The Revenue Analysis was discussed with the City Council Water Subcommittee in June, July, and August 2023. The Revenue Analysis was also presented to the Rialto Utilities Commission in August 2023 and the City Council in September 2023.

On September 12, 2023, the City Council authorized Phas e 2, which was the completion of the Rate Study and development of proposed water and wastewater rates. Water and wastewater rates were developed and presented to the Rialto Utilities Commission in December 2023.

The City has scheduled a series of public meetings in January and February for public outreach. Proposition 218 notices will be mailed in January 2024, and the Proposition 218 Public Hearing is schedu led for February 27, 2024.

The City Council is expected to consider the proposed water and wastewater rates on February 27, 2024. If adopted by City Council, the first rate increase would be effect ive March 1, 2024 and subsequent rate increases would be effective on January 1 of successive years through 2028.

Concessionaire
Financing
Concession
Agreement
Trust Accounts
RUA Accounts
DIF Revenues Capital
Expenses
City Financing RUA
Reserves
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Section 2
Revenue Requirement Analysis

2.1 Introduction
To provide for the continued operation of a utility on a so und financial basis, revenues mu st be sufficient to meet the cash requirements for operation and maintenance (O &M) expense, debt service requirements, debt service coverage requirements, reserves, and cash-funded capital expenditures not financed with debt. The sum of these cost components for a given year is referred to as a utility’s Revenue Requirement.

Historical and budgeted financial and operational data were provided by the City and used by FG Solutions to develop the projected revenue requirement for the five-year st udy period. The revenue re quirement analysis was an iterative process and draft versions were revised based on comments and input provided by City staff. Next, the revenue requirement was compared with the revenues ge nerated by the existing rates to generate additional revenues needed from rate increases. The reserve requirement, described below, is met throughout the five-year projection period. Revenue projections are a critical part of the revenue requirement analysis. The three aspects of revenue projections described in the sections below are non-rate revenues, rate revenues under the current rate schedule, and rate revenues from proposed rate increases.

Key assumptions used in the Revenue Re quirement analysis are listed below. Additional assumptions are provided in the Revenue Requirement calculations that comprise Appendix A.

2.2 Overview of Methodology and Key Assumptions
The methodology used to generate the proposed revenue requirement is based on meeting the cash needs of the water and wastewater utilities. It consists of:
 Projecting expenses over the five-year period beginning in FY 23/24 and ending in FY 27/28. The expenses include those in all five Waterfall positions described above and are described below.  Projecting water and wastewater rate revenues under the current rate structure.  Projecting water and wastewater system revenues from sources other than rates. Examples of which are Development Impact Fees (DIF), interest income, delinquent service fees, rental income, and grants.  Projecting the amount of revenue from rate increases.

The most significant assumptions include the following:
 The majority of projected revenues and expenses are ba sed on the City’s FY 23/24 Budget. The City’s FY 23/24 Budget was in turn based on factors including known contractual requirements, projected work needs, and recent historical expenses.
 Most expenses escalated for inflation at 2.5 percent per year. Exceptions include certain contractual payments (such as the RWS Capital Charges) that are not escalated for inflation, and the RUA Lease Payment.
 Electricity expenses are projected to increase at 7% per year for the entirety of the five-year study period, corresponding to the average cost increase over the last six years.  A 0.5% annual system growth rate.
 Water use will remain at levels observed in Calendar Year 2022.

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2.3 Water Revenue Requirement

2.3.1 Water System Revenues
Revenue projections are a critical pa rt of the Revenue Requirement anal ysis. The three aspects of revenue projections described in the sections below are non-rate revenues, rate revenues under the current rate schedule, and rate revenues from proposed rate increases.

2.3.1.1 Non-Rate Revenues
The key sources of water revenues other than rate revenues are predominantly Development Impact Fees (DIF), rents and concession, turn on/turn of f fees, and interest income. The City also receives revenues from San Bernardino County for water rights leases and reimbursement for costs incurred by the City.

2.3.1.2 Rate Revenues under Current Rates
Current water rates are shown in Table 1-1. These rates were used to project the revenues shown in Table 2-1.

Revenue estimates under current rates shown in Table 2-1 for FY 24/25 through FY 27/28 are projected to remain at FY 23/24 values, after adjusting for the projected 0.5 percent annual system growth rate.

FY 23/24 revenues are calculated based on Calendar Year 2022 actual water use, number of customers in Calendar Year 2022, and the existing rate structure.

Table 2-1. Projected Water Revenues Under Existing Rates

2.3.2 Projected Water System Expenses

2.3.2.1 Projected Waterfall 1 Expenses
Projected Waterfall 1 expenses are shown in Table 2-2. The largest single expense component is the Water Service Fee which is the City’s payment to RWS for the operation and maintenance services they provide. The Service Fee Projected
Revenue FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Rate Revenues Subject to Rate Increases (1) $13,053,423 $13,092,562 $13, 131,701 $13,170,841 $13,209,980 Development Impact Fees (2) 200,000 200,000 200,000 200,000 200,000 County Contract - SBCO Water Order 332,264 349,264 366,727 385,064 404,317 Rents & Concessions 83,000 85,075 87,202 89,382 91,616
Trustee Water Reserve Interest Income (3) 60,000 60,000 60,000 60,000 60,000 Turn On/Off 50,750 50,750 50,750 50,750 50,750
Delinquent Water Service Fees (4) 00000
Grant Revenue (5) 165,025 0 0 0 0
Other Charges for Current Services 00000
Miscellaneous Revenues (6) 147,592 151,282 155,064 158,940 162,914 Water Meter Damages/Lost/Replacement Fees (7) 49,300 49,300 49,300 49,300 49,300 RUA Investment Income (8) 110,640 30,275 14,485 12,003 16,908 Total $14,251,994 $14,068,508 $14,115, 230 $14,176,280 $14,245,785 Notes:
(1) FY 23/24 per RUA budget. Increased in subsequent years for system growth. Refer to Section 3 for system growth projections. (2) FY 23/24 per RUA budget. Development Impact Fee revenues are deposited into the Trust Water Construction Reserve. (3) Based on approximate actual revenues during the second quarter of 2023. Excludes interest income in the Trust Water Constru ction Reserve.
(4) Delinquent water service fees are excluded from this analysis due to City policies that have temporarily suspended assessme nt of these fees.
(5) Grant revenues are non-recurring.
(6) FY 23/24 from RUA budget, increased in subsequent years for inflation. Primarily labor reimbursement from San Bernardino Co unty. (7) FY 23/24 per RUA budget. Projected to remain at this value in subsequent years. (8) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance.
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currently has four separate components, and the Concession Agreement specifies the amounts of the Service Fee and how the fee components are escalated for inflation. The Fixed, Routine Repair and Replacement (“R&R”), and Labor Components are escalated for inflation on January 1 of each year, and the Chemical Component is not escalated for inflation.

Table 2-2. Projected Water Waterfall 1 Expenses

Notes:
(1) Most projected expenses are based on the FY 23/24 Budget and escalated for inflation. See Appendix A for more detail. (2) See Table 2-3 and Appendix A for more detail.

Table 2-3 provides more detail on Retained RUA Expenses. So me of the items in Table 2-3 with the highest cost to the City include:
 Water Purchases. The City purchases water from Sa n Bernardino Valley Municipal Water District (“Valley District”) and the West Valley Water District (“WVWD”). Purchased water costs are established primarily by the terms of agreements with Valley District and WVWD.
 Electricity. Electricity costs are for the City’s wells and booster pump stations.  City Reimbursement (680 Admin). The amounts shown in Table 2-3 pay the portion of the City’s 680 Fund expenses attributed to the water system.
 City Contract. This covers the costs incurred by the City’s General Fund related to the water system.  Perchlorate Treatment. The City contracts with Veo lia, outside the scope of se rvices provided in the Concession Agreement, to operate perchlorate trea tment systems at the City’s Chino 2 Well. Costs associated with the Combined Remedy are not included in this rate study, as they are entirely reimbursed by third parties.

Table 2-3. Projected RUA Retained Expenses

Projected (1)
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Waterfall 1: Water Service Fee
Fixed, Routine R&R, and Labor Components $6,590,955 $6,755,729 $6,924, 622 $7,127,738 $7,305,931 Chemical Component 63,096 64,673 66,290 67,947 69,646
Waterfall 1: Reimbursements
Insurance Reimbursement 869,512 891,249 913,531 936,369 959,778 Independent Engineer 109,296 112,028 114,829 117,700 120,642 Maintenance 221,300 226,833 232,503 238,316 244,274
Waterfall 1: Retained RUA Expenses (2) 5,052,865 4,908,977 5,104,647 5,310,403 5,526,860 Total, Projected Waterfall 1 Expenses $12 ,907,024 $12,959,490 $13,356, 423 $13,798,473 $13,798,473 Projected (1)
Retained Expense FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Electricity (2) $1,540,932 $1,64 8,797 $1,764,213 $1,887,708 $2,019,848 Perchlorate, Not Combined Remedy (3) 87,300 89,483 91,720 94,013 96,363 City Contract (Transfer to General Fund) (4) 479,023 490,999 503,274 515,855 528,752 Water Purchase, Baseline Feeder (5) 500,749 513,268 526,099 539,252 552,733 WVWD Purchases (5) 671,129 687,907 705,105 722,732 740,801 IT Services (5) 66,395 68,054 69,756 71,500 73,287
City Reimbursement (680 Admin) (5) 799,560 819,549 840,038 861,039 882,565 Consulting Fees: Engineering (5) 235,935 241,833 247,879 254,076 260,428 Consulting Services (6) 330,050 0 0 0 0
Miscellaneous Fees and Permits (5) 291,792 299,087 306,564 314,228 322,084 Rebates 50,000 50,000 50,000 50,000 50,000
Total 5,052,865 4,908,977 5,104,647 5,310,403 5,526,860 Section 2 2023 Water and Wastewater Rate Study – City of Rialto

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2.3.2.2 Projected Waterfall 2 Expenses
Waterfall 2 expenses are the OR&R payments. The amount of the OR&R payment is mutually agreed to by the City and RWS. It was established initially in the Concession Agreement and has been adjusted from time to time. The estimated annual OR&R is $680,000 in FY 23/24 and is adjusted for inflation in subsequent years.

2.3.2.3 Projected Waterfall 3 Expenses
Waterfall 3 expenses are the RWS Capital Charges. The amount of the Capital Charges is $2,900,000 per year.

Capital Charges are not adjusted for inflation.

The City is planning on completing additional capital improvements in the next five years. As described below in Table 2-4, the City is planning on using a combination of grants, DIFs, and debt to fund these capital improvements. Future debt service payments are also a Waterfall 3 expense.

2.3.2.4 Projected Waterfall 4 Expenses
Waterfall 4 expenses are deposits into the trust to me et required reserve account balances. The Concession Agreement established a Water Reserve Account. The funds in this account are restricted and cannot be used to pay operating or capital expenses. According to the Concession Agreement, the account must contain 25 percent of the sum of Waterfall 1 through Waterfall 3 expenses. As these expenses increase each year due to factors such as inflation or new debt service, the required balance in the Water Reserve Account must also increase. This Rate Study contains projected annual deposits into the Water Reserve Account to reach the minimum balance requirement.

2.3.2.5 Projected Waterfall 5 Expenses
Waterfall 5 expenses are the RUA Lease Payment, which for the purposes of this analysis is projected to remain at $400,000 per year through FY 27/28.

2.3.2.6 Expenses Outside of the Waterfall
No expenses outside of the Waterfall are expected during the remainder of the five-year Rate Study period.

2.3.2.7 Projected Capital Expenses
Table 2-4 shows the projected Capital Improvement Plan through FY 27/28. The capital improvements shown in Table 2-4 represent the highest priority capital projects, prioritized by City staff from a longer list of potential capital projects developed by RWS. The City has been successful in pursuing grant funding, which reduces the financial impact of these projects to the City’s ratepayers. The total cost of the Capital Improvement Plan is $20.9 million, of which $12 million (or 57 percent) is grant funded.

The City anticipates using $2.9 million of DIF revenues held in the Trust Accounts to pay for capital projects, and the remainder will be debt-financed. The specific type of loan to be used to fund the Capital Improvement Plan has not yet been identified, though the City is pursuing low-interest Water Infras tructure Finance and Innovation Act (“WIFIA”) loans. For the purposes of this Rate Study, the City has provided direction to assume a 30-year loan at an interest rate of 6%.

Notes:
(1) Most projected expenses are based on the FY 23/24 Budget and escalated for inflation. See Appendix A for more detail. (2) Increases with the rate of electricity inflation. Electricity inflation of 7 percent is the six-year 2017 - 2023 average an nual Southern California Edison commercial bill increase for a sample of Rialto's wells, rounded to the nearest 1 percent. (3) Resin replacement for perchlorate treatment not covered by the Combined Remedy. Cost increases with inflation. (4) For services provided by the City's General Fund. Projected to increase with inflation. (5) Projected to increase with inflation
(6) These consulting services are non-recurring.
2023 Water and Wastewater Rate Study – City of Rialto Section 2

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Table 2-4. FY 23/24 – FY 27/28 Water Capital Improvement Plan

2.3.3 Projected Reserves
There are three different types of reserves related to Rialto’s water utility, which are described below.

1. RUA Reserves. These are reserves held by the City, not held by the Trustee, and recorded in the City’s 670 Fund. RUA reserves are generally unrestricted but must be sufficient to cover variations in receivables and payables over the course of the year. For example, many water utility expenses (such as RWS Service Fees and Capital Charges) are the same every month, but water system revenues incr ease during the summer months when water consumption is highest. As of the second quarter of 2023, RUA held approximately $1.6 million in water reserves.

2. Trust Reserves. These reserves are also recorded in the City’s 670 Fund (in account 670-108-0000-0000) but are held by the Trustee. These reserves are rest ricted for designated uses specified in the Concession Agreement.

3. DIF Reserves. DIF revenues are deposited into a dedicated Trust Accounts (the Water Construction Reserve) as they are received. The City anticipates using a pproximately $2.9 million in DIF reserves for capital improvements.

The City recognizes that the RUA water reserves are low. Through the proposed water ra te increases, the City is implementing a policy that will increase the RUA water reserves over the long-term. The proposed water rates were developed to phase-in collection of depreciation expe nse through rates. From an accounting perspective, deprecation is considered a “non-cash” expense – meaning that there is no cash expenditure associated with the collection of depreciation expense through rates. Instead, collecting depreciation expense would rebuild RUA water reserves over time.

The water rate revenues that would cover depreciation expense would be returned to RUA from the Trust Accounts at the end of each fiscal year as “excess cash” (See Figure 1-1). Collection of depreciation expense through rates will be phased-in over time. Table 2-5 shows projected depreciation expense through FY 27/28.

Table 2-5. Projected Water Depreciation Expense

2.3.4 Projected RUA Operating Statement
Table 2-6 is a projected Operating Statement from the perspe ctive of RUA. Because revenues go directly into the trust, RUA’s sources of funds are the funds from the Trustee to cover the RU A Lease payment plus any additional Funding Sources
Project Grants DIF RUA Reserves Debt Total Cost
Watermain Replacement - Etiwanda $2,900,000 $3,800,000 $6,700,000 AMI Project 8,000,000 8,000,000
W-WW Security Upgrade Project 2,000,000 2,000,000
Arsenic Treatment Well 3A 2,000,000 4,200,000
Total $12,000,000 $2,900, 000 $0 $3,800,000 $20,900,000 Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Depreciation, Existing Assets (1) $888,100 $888,100 $888,100 $888,100 $888,100 Estimated Depreciation, Capital Expenditures (2) 0 0 222,000 222,000 222,000 Total Estimated Deprecation Expense $888,100 $888,100 $1,110,100 $1,110,100 $1,110,100 Notes:
(1) Source: FY 23/24 RUA budget.
(2) Based on proposed CIP, using a 50-year life for distribution facilities and a 25-year life for treatment facilities. Deprec iation expense is also based on the current CIP schedule and cost. After the projects are completed, City staff will assign useflul lives and calculate depreciation expense corresponding to the actual project cost and construction schedule.

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funds left over after other expenses have been paid from the trust and the trust reserve requirements are met.

Additionally, RUA earns interest income on RUA’s reserves.

Table 2-6. Projected RUA Operating Statement, Water

2.3.5 Projected Operating Statement for Water System Trust Accounts Table 2-7 shows the projected revenues for the water system trust accounts through FY 27/28. The first line of Table 2-7 is water sales under existing rates, and the second line is water sales under the proposed rate increases.

Other sources of funds are the non-rate revenues shown in Table 2-1 and Revenue Stabilization from RUA reserves required to meet the Conc ession Agreement Coverage Requirement. Pr ojected Revenue Stabilization payments shown in Table 2-7 decrease over time, and are projected to be $100,000 in FY 27/28. .

Table 2-7. Projected Sources of Funds for the Water System Trust Accounts

Table 2-8 shows the projected uses of funds. The individual lines in Table 2-8 are shown in more detail earlier in this section.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
RUA Sources of Funds
Beginning Cash Balance (1) $1,594,680 $2,018,320 $965,687 $800,202 $1,127,212 From Trustee: Funds Dropping Out of Waterfall
Funds to Cover Annual Lease Payment (2) 400,000 400,000 400,000 400,000 400,000 Transfers from Waterfall (3) 513,000 17,092 620,030 515,007 1,193,854 Other Revenues
RUA Investment Income (4) 110,640 30,275 14,485 12,003 16,908 Total Revenues $1,023,640 $447,366 $1,034,515 $927,010 $1,610,762 RUA Uses of Funds
Lease Payments (2) 400,000 400,000 400,000 400,000 400,000 Revenue Stabilization From RUA Reserves (5) 200,000 1,100,000 800,000 200,000 100,000 Total Expenses $600,000 $1,500,000 $1,200,000 $600,000 $500,000 Ending RUA Cash Balance $2,018,320 $965,687 $800,202 $1,127,212 $2,237,974 Notes:
(1) FY 23/24 Source: City staff, 5/10/23. Fund balance shown is 670 Fund Cash in Bank balance as of 5/10/23. (2) FY 23/24 per RUA FY 23/24 Budget, and projected to remain at this value through the 10-year planning period. (3) This transfer is intended to cover depreciation expense, and collection of deprecation expense through rates is being phase d in over time.
(4) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance.
(5) If needed, pre-existing reserves are used to provide supplemental revenue stabilization to meet the RWS coverage requiremen t.

Excludes pre-existing Revenue Stabilization reserves of $2.785 m illion as of July 1, 2023 which will also be used in FY 23/24.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Water Sales (Existing Rates) $13,053,42 3 $13,092,562 $13,131,701 $13,170,841 $13,209,980 Water Sales (Proposed Rate Increases) 522,000 2,451,000 3,835,000 4,867,385 5,966,539 Other Revenues Deposited into Trust Accounts 887,931 745,671 769,043 793,436 818,897 Revenue Stabilization from RWS Reserves 200,000 1,100,000 800,000 200,000 100,000 Total $14,663,354 $17,389,233 $18,535,744 $19,031,662 $20,095,416 2023 Water and Wastewater Rate Study – City of Rialto Section 2

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Table 2-8. Projected Uses of Funds for the Water System Trust Accounts

2.3.6 Financial Performance Criteria
There are three separate financial performance criteria that define water rates through FY 27/28 and influence the financial performance of the water utility.

1. Trust Wastewater Account Reserve Balance. The Concession Agreement established a Water Reserve Account in the trust. The minimum balance in this account must be 25% of the sum of Waterfall 1 through 3 expenses.

2. RUA Reserve Balance. Neither the City nor RUA have specific reserve account requirements for a minimum balance in the RUA 670 Fund. As described above, th e City is phasing in the collection of depreciation expense through rates that will result, in the long-term, in a larger RUA water reserve balance.

3. RWS Coverage Criteria. The Concession Agreement estab lishes a Coverage Criteria that is shown in Table 2-9.
a. The Coverage Criteria is based on the total water system revenues excluding DIF revenues plus Revenue Stabilization payments, less Waterfall 1 and Waterfall 2 expenses and less Capital Charges including future debt service payments. This tota l is referred to in the Concession Agreement as “Free Cash Flow”. The Concession Agreement requires that Free Cash Flow exceed 17.7 percent of the total Capital Charges including future debt service payments). b. The City is anticipating future debt service to pay for the Capital Improvement Plan, as described above in Table 2-4. Lenders are also expected to have a debt coverage requirement, but that coverage requirement is not yet known. For the purposes of this Rate Study, the City has directed FG Solutions to use a 25 percent coverage factor to calculate the proposed water rates.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Waterfall 1: Water Service Fee (1)
Fixed, Routine R&R, and Labor Components $6,590,955 $6,755,729 $6,924,622 $7,127,738 $7,305,931 Chemical Component 63,096 64,673 66,290 67,947 69,646
Waterfall 1: Reimbursements (1)
Insurance Reimbursement 869,512 891,249 913,531 936,369 959,778 Independent Engineer 109,296 112,028 114,829 117,700 120,642 Maintenance 221,300 226,833 232,503 238,316 244,274
Waterfall 1: Retained RUA Expenses (2) 5,052,865 4,908,977 5,104,647 5,310,403 5,526,860 Waterfall 2: Annual Operating R&R Payment (3) 680,000 697,000 714,425 732,286 750,593 Waterfall 3: Capital Charges 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 Waterfall 3: New Debt Service (4) 0 0 443,154 443,154 443,154 Waterfall 4: Water Reserve Account Deposits (5) 272,119 17,367 214,378 114,978 111,741 Waterfall 5: RUA Lease Payment 400,000 400,000 400,000 400,000 400,000 Transfer to RUA (6) 17,092 398,010 292,987 527,794 1,151,055 Total Uses of Funds $17,176,235 $17,371,866 $18,321,366 $18,916,684 $19,983,675 Notes:
(1) See Table 2-2.
(2) See Table 2-3.
(3) FY 23/24 from RUA FY 23/24 budget. Projected to increase with inflation in subsequent years. (4) Based on 30-year debt at 6% interest, per City's Financial Advisor, 10/05/23. Includes approximately $240,000 for capitaliz ed bond reserve and costs of issuance.
(5) This row represents the amount of contributions from RUA to maintain the minimum required balance in the Water Reserve Acco unt held in trust.
(6) This transfer is intended to cover depreciation expense, and collection of depreciation expense through rates is being phas ed in over time. This number differs from what is shown in Table 2-6 becuase some transfers out of the waterfall are recorded on the last day of the fiscal year; they appear in RUA accounts in the subsequent fiscal year.

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Table 2-9. Projected Water Coverage Calculation

2.4 Wastewater Revenue Requirement

2.4.1 Wastewater System Revenues
The three aspects of wastewater revenue projections described in the sections below are non-rate revenues, rate revenues under the current rate schedule, and rate revenues from proposed rate increases.

2.4.1.1 Non-Rate Revenues
The key sources of wastewater revenues other than rate revenues are predominately DIFs, delinquent sewer service fees, interest income, and effluent sales to the Inland Empire Utilities Agency (IEU A). Because of uncertainty associated with lease revenue from Anaergia, receipt of this lease revenue is not included in the Revenue Requirement projections.

2.4.1.2 Rate Revenues Under Current Rates
Current wastewater rates are shown in Table 1-2. Revenue estimates under current rates shown in Table 2-10 for FY 24/25 through FY 27/28 are based on FY 23/24 values adjusted for annual system growth of 0.5 percent.

FY 23/24 revenues are calculated based on Calendar Year 2022 number of customers, chargeable water use for non-residential customers in Calendar Year 2022, and the existing rate structure.

Table 2-10. Projected Wastewater Revenues Under Existing Rates

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Revenues Going into Trust Excluding DIF (1 ) $14,403,354 $16,229,233 $17, 675,744 $18,771,662 $19,935,416 Plus Revenue Stabilization 2, 985,000 1,100,000 800,000 200,000 100,000 Less Waterfall 1-2 ($13,587,024) ($13,65 6,490) ($14,070,848) ($14,530,759) ($14,977,725) Balance, Available for Capital Charge $3 ,801,330 $3,672,743 $4,404, 896 $4,440,903 $5,057,692 Balance, Available for Capital Charge $3 ,801,330 $3,672,743 $4,404, 896 $4,440,903 $5,057,692 Less Capital Charges ($2,900,000) ($2,90 0,000) ($3,343,154) ($3,343,154) ($3,343,154) Free Cash Flow Before Lease Payment $901,330 $772,743 $1,061,743 $1,097,749 $1,714,538 Ratio (Free Cash Flow Divided by Capital Charges) (2) 31.1% 26.6% 31.8% 32.8% 51.3% Notes
(1) Excludes Revenue Stabilization, interest income on RUA reserves, and interest income within the trust accounts. (2) The Concession Agreement requires coverage of at least 17.7%. With the addition of new debt, City staff (per 8/14/23 email) has provided directionto use 25% coverage for the purposes of this Rate Study.

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2.4.2 Projected Wastewater Expenses

2.4.2.1 Projected Waterfall 1 Expenses
Projected Waterfall 1 expenses are shown in Table 2-11. The largest single expense component is the Wastewater Service Fee which is the City’s payment to RWS for the operation and maintenance services they provide. The Service Fee currently has four separate components, and the Co ncession Agreement specifies the amounts of the Service Fee and how the fee components are escalated for inflation. The Fixed, Routine Repair and Replacement (“R&R”), and Labor Components are escalated for inflation on Janu ary 1 of each year, and the Chemical Component is not escalated for inflation.

Table 2-11. Projected Wastewater Waterfall 1 Expenses

Table 2-12 provides more detail on Retained RUA Expenses. Some of the items in Table 2-12 with the highest cost to the City include:
 City Reimbursement (680 Admin). The amounts shown in Table 2-2 pay the portion of the City’s 680 Fund expenses attributed to the wastewater system.
 City Contract. This covers the costs incurred by the City’s General Fund related to the wastewater system.  Electricity. This covers electricity costs at the Wast ewater Treatment Plant and sewage lift stations in the collection system.
 Biosolids. This covers the costs for disposal of biosolids generated at the Wastewater Treatment Plant.

Notes:
(1) FY 23/24 per RUA budget. Increased in subsequent years for system growth. Refer to Section 5 for system growth projections. (2) FY 23/24 per RUA budget. Development Impact Fee revenues are deposited into the Trust Wastewater Construction Reserve. (3) Projected to remain at FY 23/24 budgeted values in subsequent years. (4) Revenues from the Anaergia lease are not projected to occur in this Rate Study planning period. (5) Based on approximate actual revenues during the second quarter of 2023. Excludes interest income in the Trust Water Construction Reserve.
(6) Grants are non-recurring.
(7) Source: City staff, 7/12/23. 3,500 AFY @ $275/AF in FY 23/24 dollars. $/AF adjusted with inflation, and payment starts 1/1/29.

Projected (1)
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Waterfall 1: Wastewater Service Fee
Fixed, Routine R&R, and Labor Components $6,804,152 $6,974,255 $7, 148,612 $7,327,327 $7,510,510 Chemical Component (2) 729,932 748,180 766,885 786,057 805,708 Waterfall 1: Reimbursements
Insurance Reimbursement 999,756 1,024,750 1,050,369 1,076,628 1,103,544 Independent Engineer 109,349 112,083 114,885 117,757 120,701 Waterfall 1: Retained RUA Expenses (3) 5,150,829 4,901,629 5, 230,375 5,421,275 5,621,157 Total, Projected Waterfall 1 Expenses $13,794,018 $13,760,897 $14, 311,126 $14,729,044 $13,798,473 Notes:
(1) Most projected expenses are based on the FY 23/24 Budget and escalated for inflation. See Appendix A for more detail. (2) Excludes potential increase of up to $600,000 per year in chemical costs as reported by RWS in December 2023. Per City staf f
in December 2023, City staff are currently identifying the effect of this increase over the Rate Study planning period. To the extent the City is responsible for paying for this increase, the City will need to direct additional funds from RUA to the trust acco unts.

This would then result in lower RUA reserve balances than what is shown in this Rate Study. (3) See Table 2-12 and Appendix A for more detail.

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Table 2-12. Projected RUA Retained Expenses

2.4.2.2 Projected Waterfall 2 Expenses
Waterfall 2 expenses are the OR&R payments. The amount of the OR&R payment is mutually agreed to by the City and RWS. It was established initially in the Concession Agreement and has be en adjusted from time to time. The estimated annual OR&R is $930,000 in FY 23/24, with adjustments for inflation in subsequent years.

2.4.2.3 Projected Waterfall 3 Expenses
Waterfall 3 expenses are the RWS Capital Charges. The amount of the Capital Charges is $12,682,000 per year, and Capital Charges are not adjusted for inflation.

The City is planning on completing additional capital impr ovements in the next five years. As described below in Table 2-13, the City is planning on using a combination of grants, DIFs, RUA wastewater reserves, and debt to fund these capital improvements. Future debt service payments are also a Waterfall 3 expense.

2.4.2.4 Projected Waterfall 4 Expenses
Waterfall 4 expenses are deposits into the trust to me et required reserve account balances. The Concession Agreement established a Wastewater Reserve Account. The funds in this account are restricted and can’t be used to pay operating or capital expenses. According to the Concession Agreement, the account must contain 25 percent of the sum of Waterfall 1 through Waterfall 3 expenses. As thes e expenses increase each year due to factors such as inflation or new debt service, the required balance in the Wastewater Reserve Account must also increase. This Rate Study contains projected annual deposits into the Wastewater Reserve Account to reach the minimum balance requirement.

Projected (1)
Retained Expense FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Electricity $1,167,308 $1,249,020 $1,336,451 $1,430,002 $1,530,103 Gas 188,520 193,233 198,064 203,015 208,091
Contracted Services
City Contract (Transfer to General Fund) 685,000 702,125 719,678 737,670 756,112 Biosolids 887,285 909,467 932,204 955,509 979,397
City Reimbursement (680 Admin) 1,072,830 1,099,651 1,127,142 1,155,321 1,184,204 Consulting Services 75,000 76,875 78,797 80,767 82,786
C o n s u l t i n g S W R C B G r a n t B D P 3 7 0 , 0 0 00000 C o n s u l t i n g C E Q A f o r M i c r o G r i d 5 0 , 0 0 00000 Consulting Auditor 5,000 5,125 5,253 5,384 5,519
IT Services: Tyler and Paymentus 124,746 127,865 131,061 134,338 137,696 Other Services and Supplies
Rialto Habitat Nature Center O&M 0 0 150,000 153,750 157,594 Other Retained Services 275,930 282,828 289,899 297,146 304,575 Inland Empire Brine Line Fees (SBVMWD) 125,290 128,422 131,633 134,924 138,297 Wastewater Services (Colton) 12,000 12,300 12,608 12,923 13,246 MIPP Services (Veolia) 111,920 114,718 117,586 120,526 123,539 Total $5,150,829 $4,901,629 $5,230,375 $5,421,275 $5,621,157 Notes:
(1) Most projected expenses are based on the FY 23/24 Budget and escalated for inflation. See Appendix A for more detail. (2) Increases with the rate of electricity inflation. Electricity inflation of 7 percent is the six-year 2017 - 2023 average an nual Southern California Edison commercial bill increase for a sample of Rialto's wells, rounded to the nearest 1 percent. (3) For services provided by the City's General Fund. Projected to increase with inflation. (4) Projected to increase with inflation.
(5) These consulting services are non-recurring.
(6) Estimated by City staff, with expenses beginning FY 25/26. Projected to increase with inflation in subsequent years. Only i ncludes O&M expenses to be funded by RUA and does not include O&M expenses funded by other City departments. 2023 Water and Wastewater Rate Study – City of Rialto Section 2

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2.4.2.5 Projected Waterfall 5 Expenses
Waterfall 5 expenses are the RUA Lease Payment, which fo r the purposes of this analysis is projected to remain at $1,600,000 per year through FY 27/28

2.4.2.6 Expenses Outside the Waterfall
No expenses outside of the Waterfall are expected during the remainder of the five-year Rate Study period.

2.4.2.7 Projected Capital Expenses
Table 2-13 shows the projected Capital Improvement Plan through FY 27/28. The capital improvements shown in Table 2-13 represent the highest priority capital projects, prioritized by City staff from a longer list of potential capital projects developed by RWS. The City has been successful in pursuing grant funding, which reduces the financial impact of these projects to the City’s ratepayers. The total cost of the Capital Improvement Plan is $58.75 million, of which $7.25 million is grant funded.

The City anticipates using $7.4 million of DIF revenues held in the Trust Accounts to pay for capital projects and $10 million from RUA wastewater reserves. the remainder will be debt-financed. The specific type of loan to be used to fund the Capital Improvement Plan has not yet been iden tified, though the City is pursuing low-interest Water Infrastructure Finance and Innovation Act (“WIFIA”) loans. For the purposes of this Rate Study, the City has provided direction to assume a 30-year loan at an interest rate of 6%.

Table 2-13. FY 23/24 - FY 27/28 Wastewater Capital Improvement Plan

2.4.3 Projected Reserves
There are three different types of reserves related to Rialto’s wastewater utility, which are described below.

1. RUA Reserves. These are reserves held by the City, not held by the Trustee, and recorded in the City’s 660 Fund. RUA reserves are generally unrestricted but must be sufficient to cover variations in receivables and payables over the course of the year. As of the second quarter of 2023, RUA held approximately $21.5 million in water reserves.

2. Trust Reserves. These reserves are also recorded in the City’s 660 Fund (in account 660-108-0000-0000) but are held by the Trustee. These reserves are rest ricted for designated uses specified in the Concession Agreement.

3. DIF Reserves. DIF revenues are deposited into a dedicated Trust Accounts (the Water Construction Reserve) as they are received. The City anticipates using a pproximately $7.4 million in DIF reserves for capital improvements.

Funding Sources (1)
Project Grants DIF RUA Reserves Debt Total Cost
Sewer System Security Upgrades $2,000,000 $2,000,000
Sycamore Sewer Upsize 5,000,000 5,000,000
Acacia Sewer Upsize 2,000,000 2,000,000
Digester No. 1 Activation & Digester No. 2 Rehabilitation 1,800,000 1,800,000 Rialto Biosolids Project 400,000 10,000,000 16,000,000 26,400,000 Agua Mansa Lift Station Upgrades 2,000,000 2,000,000
Plant 5 Secondary Clarifier A&B Overhaul 500,000 500,000 Ayala Lift Station Upgrade and Repair 2,000,000 2,000,000 Electrical Upgrade 8,800,000 8,800,000
Rialto Habitat Nature Center 5,250,000 3,000,000 8,250,000 Total $7,250,000 $7,400,000 $10,000,000 $34,100,000 $58,750,000 Notes:
(1) Source: City of Rialto staff report for 12/12/2023 City Council meeting, except for Rialto Habitat Nature Center per City s taff, June 202 Section 2 2023 Water and Wastewater Rate Study – City of Rialto

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The City recognizes that the need to maintain RUA wastewater reserves a nd develop the ability to pay a greater percentage of future capital improvements on a pay- as-you-go basis from reserves. Through the proposed wastewater rate increases the City is implementing a policy that will increase the RUA wastewater reserves over the long-term. The proposed wastewater rates were developed to phase-in collection of depreciation expense through rates. From an accounting perspective, deprecation is considered a “non-cash” expense – meaning that there is no cash expenditure associated with the collection of depr eciation expense through rates. Instead, collecting depreciation expense would build RUA water reserves over time.

The wastewater rate revenues that would cover depreciation expense would be returned to RUA from the Trust Accounts at the end of each fiscal year as “excess cash” (See Figure 1-1). Collection of depreciation expense through rates will be phased-in over time. Table 2-14 shows projected depreciation expense through FY 27/28. The estimated depreciation expense associated with the wastewater capital improvements will be calculated by the City in the future after the final cost of the improvements is known.

Table 2-14. Projected Wastewater Depreciation Expense

2.4.4 Projected RUA Operating Statement
Table 2-15 is a projected Operating Statement from the pers pective of RUA. Because revenues go directly into the trust, RUA’s sources of funds are the funds from the Trustee to cover the RU A Lease payment plus any additional funds left over after other expenses have been paid from the trust and the trust reserve requirements are met.

Additionally, RUA earns interest income on RUA’s reserves.

Table 2-15. Projected RUA Wastewater Fund Operating Statement

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Depreciation, Existing Assets (1) $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 Estimated Depreciation, Capital Expenditures
Sewer Main Projects(2) 140,000 140,000 140,000
WWTP and Lift Station Projects, Except Biosolids (2) 696,000 696,000 696,000 WWTP Biosolids (2) 660,000 660,000 660,000
Total Estimated Deprecation Expense $2,306,390 $2,306,390 $3,802,390 $3,802,390 $3,802,390 Notes:
(1) Source: FY 23/24 RUA budget.
(2) Based on proposed CIP, using a 50-year life for sewer main projects, a 25-year life for treatment facilities, and a 40-year life for biosolids facilities. Depreciation expense is also based on the current CIP schedule and cost. After the projects are completed, City sta ff will assign useflul lives and calculate depreciation expense corresponding to the actual project cost and construction schedule.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
RUA Sources of Funds
Beginning Cash Balance (1) $21,484, 727 $21,488,657 $21,960,695 $15,595,797 $16,084,312 From Trustee: Funds Dropping Out of Waterfall
Funds to Cover Annual Lease Payment (2) 1,600,000 1,600,000 1, 600,000 1,600,000 1,600,000 Transfers from Waterfall (3) 1, 000,000 649,708 3,305,691 2,554,578 2,661,951 Other Revenues
RUA Investment Income (4) 3,930 322,330 329,410 233,937 241,265 Total Revenues $2,603,930 $2,572, 038 $5,235,102 $4,388,515 $4,503,216 RUA Uses of Funds
Lease Payments (2) $1,600,000 $1, 600,000 $1,600,000 $1, 600,000 $1,600,000 Use of Reserves for Capital Projects 0 0 10,000,000 0 0 Revenue Stabilization From RUA Reserves (5) 1,000,000 500, 000 0 2,300,000 1,500,000 Total Expenses $2,600,000 $2,100, 000 $11,600,000 $3, 900,000 $3,100,000 Ending RUA Cash Balance $21,488, 657 $21,960,695 $15,595,797 $16,084,312 $17,487,528 2023 Water and Wastewater Rate Study – City of Rialto Section 2

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2.4.5 Projected Operating Statement for Wastewater System Trust Accounts Table 2-16 shows the projected revenues for the wastewater system trust accounts through FY 27/28. The first line of Table 2-16 is wastewater sales under existing rates, and the second line is wastewater sales under the proposed rate increases. In Table 2-16, wastewater sales revenues includes revenues from extraterritorial customers.

Other sources of funds are the non-rate revenues shown in Table 2-10 and Revenue Stabilization from RUA reserves required to meet the Conce ssion Agreement Coverage Requirement. Proj ected Revenue Stabilization payments shown in Table 2-16 increase in FY 26/27 as the new debt service associat ed with the Capital Improvement Plan begin.

Table 2-16. Projected Sources of Funds for the Wastewater System Trust Accounts

Table 2-17 shows the projected uses of funds. The individual lines in Table 2-17 are shown in more detail earlier in this section.

Table 2-17. Projected Uses of Funds for the Wastewater System Trust Accounts

Notes:
(1) FY 23/24 Source: City staff, 5/10/23. Fund balance shown is 660 Fund Cash in Bank balance as of 5/10/23. (2) FY 23/24 per RUA FY 23/24 Budget, and projected to remain at this value through the 10-year planning period. (3) This transfer is intended to cover depreciation expense, and collection of deprecation expense through rates is being phase d in over time.

The drop in the transfer from FY 25/26 to FY 26/27 is to meet cash flow requirements as the projected new debt service payments are required. By FY 27/28, the transfer is sufficient to cover depreciation expense on existing assets. (4) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance.
(5) If needed, pre-existing reserves are used to provide supplemental revenue stabilization to meet the RWS coverage requiremen t.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Sewer Sales Fees (Existing Rates) (1) $27,920,183 $28,017,572 $28,114,962 $28,212,351 $28,309,741 Sewer Sales Fees (Proposed Rate Increases) 395,333 1,812,000 3,090,000 4,431,000 5,546,000 Other Revenues Deposited into Trust Accounts 816,375 745,671 769,043 793,436 818,897 Revenue Stabilization from RWS Reserves 1,000,000 500,000 0 2, 300,000 1,500,000 Total $30,131,891 $31,075,243 $31,974,005 $35,736,787 $36,174,638 Notes:
(1) Includes Extraterritorial Sewer Service Fees.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Waterfall 1: Wastewater Service Fee (1)
Fixed, Routine R&R, and Labor Components $6,804,152 $6,974,255 $7, 148,612 $7,327,327 $7,510,510 Chemical Component 729, 932 748,180 766,885 786,057 805,708 Waterfall 1: Reimbursements (1)
Insurance Reimbursement 999,756 1,024,750 1,050,369 1,076,628 1,103,544 Independent Engineer 109,349 112,083 114,885 117,757 120,701 Waterfall 1: Retained RUA Expenses (2) 5,150,829 4,901,629 5, 230,375 5,421,275 5,621,157 Waterfall 2: Annual Operating R&R Payment (3) 930,000 953,250 977,081 1,001,508 1,026,546 Waterfall 3: Capital Charges 12, 682,000 12,682,000 12,682, 000 12,682,000 12,682,000 Waterfall 3: New Debt Service (4) 0 0 0 2,676,671 2,676,671 Waterfall 4: Water Reserve Account Deposits (5) 238,082 (2,468) 143,515 779,754 114,403 Waterfall 5: RUA Lease Payment 1 ,600,000 1,600,000 1,600, 000 1,600,000 1,600,000 Transfer to RUA (6) 649,708 1, 784,735 1,794,100 1, 140,995 2,426,472 Total Uses of Funds $29,893,808 $30, 778,415 $31,507,822 $34, 609,972 $35,687,712 Section 2 2023 Water and Wastewater Rate Study – City of Rialto

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2.4.6 Financial Performance Criteria
There are three separate financial performance criteria that define wastewater rates through FY 27/28 and influence the financial performance of the water utility.

1. Trust Water Account Reserve Bala nce. The Concession Agreement es tablished a Wastewater Reserve Account in the trust. The minimum balance in this account must be 25% of the sum of Waterfall 1 through 3 expenses.

2. RUA Reserve Balance. Neither the City nor RUA have specific reserve account requirements for a minimum balance in the RUA 660 Fund. As described above, th e City is phasing in the collection of depreciation expense through rates that will result , in the long-term, in a larger RUA wastewater reserve balance and less reliance on debt service to fund future capital improvements.

3. RWS Coverage Criteria. The Concession Agreement establishes a Coverage Criteria that is shown in Table 2-

18. a. The Coverage Criteria is based on the total water system revenues excluding DIF revenues plus Revenue Stabilization payments, less Waterfall 1 and Waterfall 2 expenses and less Capital Charges including future debt service payments. This tota l is referred to in the Concession Agreement as “Free Cash Flow”. The Concession Agreement requires that Free Cash Flow exceed 15.0 percent of the total Capital Charges including future debt service payments). b. The City is anticipating future debt service to pay for the Capital Improvement Plan, as described above in Table 2-13. Lenders are expected to also have a debt coverage requirement, but that coverage requirement is not yet known. For the purposes of this Rate Study, the City has directed FG Solutions to use a 25 percent coverage fact or after issuance of new debt to calculate the proposed wastewater rates.

Table 2-18. Projected Wastewater Coverage Calculation

Notes:
(1) See Appendix A for more detail.
(2) See Table 2-12.
(3) FY 23/24 from RUA FY 23/24 budget. Projected to increase with inflation in subsequent years. (4) Based on 30-year debt at 6% interest, per City's Financial Advisor, 10/05/23. Includes approximately $1.4 million for capit alized bond reserve and costs of issuance.
(5) This row represents the amount of contributions from RUA to maintain the minimum required balance in the Wastewater Reserve Account held in trust.
(6) This transfer is intended to cover depreciation expense, and collection of depreciation expense through rates is being phas ed in over time. The drop in the transfer from FY 25/26 to FY 26/27 is to meet cash flow requirements as the projected new debt servi ce payments are required. By FY 27/28, the transfer is sufficient to cover depreciation expense on existing assets. This number di ffers from what is shown in Table 2-15 becuase some transfers out of the waterfall are recorded on the last day of the fiscal year; t hey appear in RUA accounts in the subsequent fiscal year.

Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Revenues Going into Trust Excluding DIF (1) $29,085,183 $30,031,572 $31,406,962 $32,845,351 $34,057,741 Plus Revenue Stabilization 1,000,000 500,000 0 2, 300,000 1,500,000 Less Waterfall 1-2 ($14,724,018) ($14,714,147) ($15,288,207) ($15,730,552) ($16,188,166) Balance, Available for Capital Charge $15,361,165 $15,817,425 $16,118,755 $19,414,799 $19,369,575 Balance, Available for Capital Charge $15,361,165 $15,817,425 $16,118,755 $19,414,799 $19,369,575 Less Capital Charges ($12,682,000) ($12,682,000) ($12,682,000) ($15,358,671) ($15,358,671) Free Cash Flow Before Lease Payment $2,679,165 $3,135,425 $3,436,755 $4,056,128 $4,010,904 Ratio (Free Cash Flow Divided by Capital Charges) (2) 21.1% 24.7% 27.1% 26.4% 26.1% Notes
(1) Excludes Revenue Stabilization, interest income on RUA reserves, and interest income within the trust accounts. (2) The Concession Agreement requires coverage of at least 15%. Wi th the addition of new debt, City staff (per 8/14/23 email) h as provided direction to use 25% coverage after the new debt is issued for the purposes of this Rate Study. 2023 Water and Wastewater Rate Study – City of Rialto Section 2

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Section 3
Cost of Service Analysis and Rate
Design
This section outlines the proposed wate r rate structure. The rate structur e is developed using a Cost-of-Service Analysis, completed in a consistent manner with industry standards. This Cost-of-Service Analysis uses methodology from the American Water Works Association’s M1 Manual, Principles of Water Rates, Fees, and Charges (7th Edition).

A Cost-of-Service Analysis (COSA) is used to equitably distribute the revenue requirements to the various customer classes served by the utility. The COSA is also used to allocate costs to the various customer classes served (i.e. residential, commercial, industrial, etc.) corresponding to the level of service provided. Many costs are incurred for the joint benefit of all customers, some costs benefit certain customers more than others, and other costs may benefit only specific customers.

3.1 Water Cost-of-Service Analysis
The first step in a COSA is functiona lization, where water system expenses are grouped according to the functions of a water system. Water functions include pumping, storage, transmission, and distribution (T&D), customer, meter, and administration. Table 3-1 shows the functionalization of the City’s Division’s O&M expenses for FY 23/24.

Additional detail is available in Appendix B. Table 3-1 functionalizes the water rate revenue requirement.  The labor component of the Water Service Fee was functionalized based on actual 2022 labor costs reported by RWS.
 The Fixed and Routine Repair & Replacement components of the Water Service Fee was functionalized based on net plant.
 Capital charges are functionalized based on a review of the items financed by RWS in 2012 at the initiation of the Concession Agreement.
 Within the Retained RUA Expenses, well electricity and purchased water expenses are carried into the Rate Tier calculations.
 Electricity was functionalized between treatment and co llection based on a review of Southern California Edison (SCE) power bills.
 Biosolids expenses were functionalized to treatment.

Many other retained expenses were functionalized as admi nistration, including the transfer to the City’s General Fund for services provided to the wate r utility; the Fund 680 Administrative expenses, consulting services, and IT services.

The second step in a COSA is allocation, where functionalized expenses are allocated to water system characteristics of average day demand, peak day demand, peak hour demand, and customer and water meter size. In addition, source of supply costs are carried through the allocation step to be used in the rate tier calculations described later in this section. Table 3-2 shows the Allocation of FY 23/24 Rate Revenue Requirement. Some of the key aspects of the allocation calculations are:
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1. Pumping, treatment, and storage costs are allocated to base (also referred to as average day), demand and maximum day demand. This is because these facilities ar e sized to meet peak day demands, and they also are in use every day on a 24/7 basis.

2. A portion of storage costs are attributed to providing fire protection, based on an assessment of the amount of reservoir storage that is needed for fire protection, as described in the City’s Water Master Plan.

3. Transmission and distribution system expenses are a llocated to base, maximum day, and maximum hour demands because sixing of pipes also considers ma ximum hour demands. A portion of transmission and distribution expenses is also allocated to fire protecti on, recognizing that pipes are sized to provide fire flow.

4. Water supply costs are carried through to the rate tier calculations. In the Volume Charge calculations described below, the charges for each rate tier are based on water supply costs.

5. Administrative expenses are allocated based on a weighted average of all other expenses.

6. Fire protection expenses and the reallocation of pub lic fire protection expenses are discussed in further detail in Appendix C of this report.

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Table 3-1 Functionalization of Water Rate Revenue Requirement

Table 3-2 Allocation of Water Rate Revenue Requirement

Functionalized Amount (1)
FY 23/24 Rate Tier Public Fire
Total Pumping Treatment Storage T&D Customer Meter Admin Calculation Protection Waterfall 1: Water Service Fee (2) 6,654, 051 918,482 54,853 1,636,526 3,215,819 740,859 0 0 63,096 24,416 Waterfall 1: Reimbursements (3) 1,200,108 184,906 12,205 309,993 619,600 1, 260 2,596 64,886 0 4,662 Waterfall 1: Retained RUA Expenses (4) 5,052,865 207,013 0 0 0 0 0 2,202,755 2,643,097 0 Waterfall 2: Annual Operating R&R Payment (3) 680,000 106,762 6,376 190,226 373,798 0 0 0 0 2,838 Waterfall 3: Capital Charges (5) 2,900,000 362,037 52,462 128,573 530,071 33,425 68,884 1,721,644 0 2,905 Waterfall 4: Water Reserve Account Deposits 272,119 0 0 0 0 0 0 272,119 0 0 Waterfall 5: RUA Lease Payment 400,000 0 0 0 0 0 0 400,000 0 0 Less Water Rights Revenue From SBCO (332,264) (41,375) (2,928) (52,680) (110,212) (18,035) (1,662) (104,563) 0 (810) Less Grant Revenue (6) (165,025) 0 0 0 0 0 0 (165,025) 0 0 Less Other Non-Rate Revenues (390,642) 0 0 0 0 0 0 0 (390,642) 0 Less Revenue Stabilization, Changes in Reserves (6) (2, 434,789) (303,191) (21,454) (386,030) (807,617) (132,160) (12,181) (766,223) 0 (5, 934) Total Rate Revenue Requirement 13,836,423 1,434,634 101, 514 1,826,608 3,821,459 625,349 57,63 7 3,625,593 2,315,551 28,077 Notes:
(1) See Appendix B for more detail. Discrepancies in total functionalized costs are due to rounding in the cost-of-service analysis. (2) Labor portions of the Water Service Fee are functionalized based on RWS organization charts and 2022 labor expenses. Chemical costs are incorporated into the rate tier calculations Other components functionalized by net plant.
(3) Primarily functionalized by net plant.
(4) Well electricity and purchased water are incorporated into the rate tier calculations. Most of the remaining costs are functionalized as administration. (5) Functionalized based on what the 2012 Concession Agreement Funding, upon which the Capital Charges are based, paid for. (6) Functionalized based on other components of the rate revenue requirement except for what was incorporated into the rate tier calculations.

Public Public &
FY 23/24 Extra Capacity Rate Tier Fire Private Fire Private Fire Projection Base Max Day Max Hour Customer Meter Calculation Protection Protection Protection Water System Function
Pumping $1,434,634 $825,217 $609,417 $0 $0 $0 $0 $0 $0 $0 Treatment 101,514 58,392 43,122 0 0 0 0 0 0 0
Storage 1,826,608 365,984 1,297,099 0 0 0 0 0 163,525 0 Transmission & Distribution 3,821 ,459 648,453 478,877 1,127,330 0 0 0 0 1,566,798 0 Customer 625,349 0 0 0 625,349 0 0 0 0 0
Meter 57,637 0 0 0 0 57,637 0 0 0 0
Administration 3,625,593 871,602 1,115, 199 517,682 287,167 26,468 0 12,893 794,582 0 Rate Tier Calculations 2,315,551 0 0 0 0 0 2,315,551 0 0 0 Fire Protection 28,077 0 0 0 0 0 0 28,077 0 0
Reallocate Public FP (2,524,905) 0 0 0 0 0 0 0 (2,524,905) 0 Reallocate Public FP 2,524,905 0 0 0 0 0 0 2,145,741 0 379,164 Total $13,836,421 $2,769,648 $3,543,714 $1,645,012 $912,516 $84,105 $2,315,551 $2,186,711 $0 $379,164

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Table 3-3 defines terms and clarifies the relationship between Water Service Characteristics and how costs are recovered in the proposed rate structure. The terms base, max-day, and max-hour demand are used in the industry standard publication, AWWA M1 Manual, Principals of Water Rates, Fees, and Charges, 7th Edition.

Customer-related costs are recovered in the Monthly Mi nimum Charge on a per-cust omer basis. All other costs incorporated into the Monthly Minimum Charge are recovered based on meter size, where the cost increases with increasing meter size.

Table 3-3: Relationship Between Water Service Characteristics and Rate Structure

3.2 Proposed Water Rates
Proposed water rates are shown below in Table 3-4. Proposed Monthly Minimum Charges increases with meter size. 94 percent of residential customers have a ¾” or smaller water meter and would pay, staring on 3/1/24, a Monthly Minimum Charge of $33.38 per month.

Table 3-4. Proposed Monthly Minimum Charge, Water

Water Service Characteristic
How Costs are Allocated
Among Customer Classes
How Costs are Recovered in Rate
Structure
Base Demand Meter Equivalents and Average
Water Use (1)
Mostly Through Monthly Minimum
Charge, Partially Through Volume
Char
ges
Max Day and Max Hour Peak Water Use Volume Charges
Customer On a Per-Customer Basis Monthly Service Charges Meter Meter Equivalents Monthly Service Charges
Rate Tier Calculations Water Use Volume Charges
Public Fire Protection Costs Meter Equivalents Monthly Service Charges Private Fire Protection Fire Protection Equivalents (2) Fireline Rates Notes:
(1) The number of meter equivalents for each water meter size is based on the capacity of the water meter.
(2) Fire protection equivalents for each size of fireline account are based on the size of the water meter, weighted according to engineering formulas described in Appendix C.

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Table 3-5: Proposed Volume Charges

Most customers will see their water bills change from a four-t ier to a three-tier water rate structure. The first tier will contain 0 –9 ccf per month. This is an approximate amount of indoor water use for most residential customers.

The second tier, from 10 to 30 ccf per month, is meant to capture most residential outdoor irrigation use. The third tier is for large water users and residential customers that use more than approximately twice the citywide average.

Multi-family customers with more than 49 units and landscape customers retain their current tier structure.

The cost of water in each tier is calculated by first calculating the cost of water from each individual source. The City has five primary production wells. The City buys water from SBMVD through the baseline feeder and baseline feeder wells. The City also buys water from the West Valley Water District that is treated at the Roemer Water Filtration Facility. The least expensive water for the City to produce is from the City’s Well 4A, Rialto 3, and Miro 3 wells. The Tier 1 cost is based on the cost of water from these wells. The most expensive wate r is from the Roemer Water Filtration Facility, the Baseline Feeder, and the Chino 2 well. The cost of water in the third tier is based on the cost from these water sources. The cost of water in the seco nd tier is from the City’s remaining sources. Full rate calculations can be found in Appendix C.

Table 3-6. Proposed Fireline and Hydrant Rates

Fireline and Hydrant Rates are applicable to cu stomers with separate fire service accounts. Table 3-6 shows the proposed Private Fire Service rates. These rates recover costs associated with transmission, distribution and storage that are related to providing fire protection services to private fire service connections.

Proposed Volume Charges
Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Residential and Commercial
0 - 9 ccf per month See Note 1 $1.82 $2.04 $2.16 $2.29 $2.43 10 - 30 ccf per month See Note 1 $2.06 $2.31 $2.45 $2.59 $2.75 >31 ccf per month See Note 1 $3.05 $3.42 $3.62 $3.84 $4.07 Multiple Apartments Over 49 Units and Mobile Homes
All water use $2.40 $2.56 $2.87 $3.04 $3.22 $3.42
Landscape
0 - 30 ccf per month $2.70 $2.06 $2.31 $2.45 $2.59 $2.75 >31 ccf per month $3.32 $3.05 $3.42 $3.62 $3.84 $4.07
Notes:
(1) The current tiered volume charges for Residential and Commercial customers is:
0 - 5 ccf per month: $1.07/ccf
6 - 30 ccf per month: $1/69/ccf
31 - 60 ccf/month: $2.70/ccf
> 61 ccf/month: $3.32/ccf
Proposed Rates
Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Fireline
3" meter $83.73 $19.34 $21.66 $22.96 $24.33 $25.79
4" meter $111.64 $41.21 $46.15 $48.92 $51.86 $54.97
6" meter $167.46 $119.70 $134.07 $142.11 $150.64 $159.68 8" meter $223.28 $255.09 $285.70 $302.84 $321.01 $340.27 10" meter $279.10 $458.74 $513.79 $544.62 $577.29 $611.93 Hydrant
Rate, $/ccf $3.33 $2.26 $2.53 $2.68 $2.84 $3.01
Per Day $10.81 $3.34 $3.43 $3.51 $3.60 $3.69
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3.3 Wastewater Cost-of-Service Analysis
Similar to the Water COSA, the first step in determining the wastewater COSA is functionalization, where wastewater system expenses are grouped according to the functi ons of a sewer system. Wast ewater functions include treatment, collection, customer, admin, Direct Assign Commercial, and Direct Assign Rialto Habitat Nature Center (RHNC).

Table 3-7 shows the Functionalization of the Wastewater Rate Revenue Requirement, for FY 23/24. Included in the rate revenue requirement are O&M expenditures, debt se rvice payments, capital impr ovements and replacement expenditures. In FY 23/24, these expenditures are partially offset by non-rate revenues and use of reserves. Refer to Appendix D for more detail on the wastewater COSA.

Table 3-7 functionalizes each Waterfall. Waterfall 1 is divided into the Wastewater Service Fee and Reimbursements.

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Table 3-7 Functionalization of Wastewater Rate Revenue Requirement

The second step in a COSA is allocation, where functionalized expenses are allocated to water system characteristics of average day demand, peak day demand, peak hour demand, and customer and water meter size. In addition, source of supply costs are carried through the allocation ste p to be used in the rate tier calculations described later in this section. Table 3-8 shows the Allocation of FY 23/24 Rate Revenue Requirement. Some of the key aspects of the allocation calculations are:

1. Treatment expenses are allocated equally to flow, BOD, and TSS.

2. Collection system expenses are allocated to flow.

3. Commercial III and IV expenses are related to the City’s pretreatment program and are carried into the rate design calculations, to be recovered from Commercial II and IV wastewater rates.

4. The negative RHNC cost represents effluent sales to IEUA, and are allocated to flow.

Functionalized Amount (1)
FY 23/24 Direct Assign Direct Assign
Total Treatment Collection Customer Admin Commercial RHNC Waterfall 1: Wastewater Service Fee (2) $7,534,084 $5,656,080 $1,569,539 $308,464 $0 $0 $0 Waterfall 1: Reimbursements (3) 1,109,105 813,132 235,777 0 60,196 0 0 Waterfall 1: Retained RUA Expenses (4) 5,150,829 2,363,196 55,207 0 2,620,506 111,920 0 Waterfall 2: Annual Operating R&R Payment (3) 930,000 0 930,000 0 0 0 0 Waterfall 3: Capital Charges (5) 12,682,000 4,981,436 719,199 0 6,981,365 0 0 Waterfall 4: Wastewater Reserve Account Deposits 238,082 0 0 0 238,082 0 0 Waterfall 5: RUA Lease Payment 1,600,000 0 0 0 1,600,000 0 0 Less Non-Rate Revenues (820,305) (370,000) 0 0 (305,930) 0 (144,375) Plus Change Reserve Balances (7) 89,387 42,278 11,037 970 35,204 352 (454) Total Rate Revenue Requirement $28,513,183 $13,486,122 $3,520,759 $309,434 $11,229,423 $112,272 ($144,829) Notes:
(1) See Appendix D for more detail. Discrepancies in total functionalized costs are due to rounding in the cost-of-service analysis. (2) Labor portions of the Wastewater Service Fee are functionalized based on RWS organization charts and 2022 labor expenses. Chemical costs are treatment-related. Other components functionalized by net plant. (3) Primarily functionalized by net plant.
(4) Electricity is assigned to treatment and collection based on a review of power bills. Biosolids and brine line fees are assigned to treatment. Most remaining costs are functionalized to administration. Pretreatment costs are assigned to high-strength commercial customers (Classes III and IV). (5) Functionalized based on what the 2012 Concession Agreement Funding, upon which the Capital Charges are based, paid for. (6) Grants assigned to treatment. Effluent sales revenues are assigned to the Rialto Nature Habitat Center. The remaining non-rate revenues are functionalized to administration.
(7) Functionalized based on other components of the rate revenue requirement except for what was incorporated into the rate tier calculations.

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5. Administrative expenses are allocated based on a weighted average of other items.

Table 3-8 Allocation of Wastewater Rate Revenue Requirement

Table 3-9 defines terms and clarifies the relationship between Wastewater Service Characteristics and rate structure. The table shows how costs are recovered in the proposed rate structure. The terms flow, BOD, TSS, and Customer are used in the industry standard publication, AWWA M1 Manual, Principals of Water Rates, Fees, and Charges, 7th Edition.

Each customer class is assigned BOD and TSS strengths consistent with published data from other Southern California utilities, the City of Rialto’s Development Impact Fees, and other industry standard publications. See Appendix D for more detail.

Residential wastewater flow is estimated using indoor water use of 50 gallons per capita per day and 3.86 people per household. The people per household value is reported by the US Census Bureau for the City of Rialto between 2018 and 2022. Commercial wastewater flow is based on water consumption data, and is recorded by the City of Rialto or the West Valley Water District, depending on customer location.

FY 23/24
Total Flow BOD TSS Customer Direct: CIII,CIV
Wastewater System Function
Treatment $13,486,122 $4,495,374 $4,495,374 $4,495,374 $0 $0 Collection 3,520,759 3,520,75 90000
Customer 309,434 0 0 0 309,434 0
Administration 11,229,423 5,164,879 2,896,417 2,896,417 199,372 72,338 Direct Assign: Commercial III and IV 112,272 0000 1 1 2 , 2 7 2 Direct Assign: RNHC (144,829) (144,829) 0000
Total Rate Revenue Requirement $28,513,181 871,602 1,115,199 517,682 287,167 26,468 2023 Water and Wastewater Rate Study – City of Rialto Section 3

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Table 3-9. Relationship Between Wastewater Service Characteristics and Rate Structure

The COSA calculates, for each customer class shown in Table 3-10, a revenue requirement based on the estimated sewer flow, BOD loading, TSS loading, and number of customers for each class.

The residential fixed charge is calculated by dividing the residential revenue requirement by the number of customers. The commercial volume charges are calculated by dividing the revenue requirement for each commercial customer class by metered water consumption.

Wastewater Service
Characteristic
How Costs are Allocated
Among Customer Classes
Flow Wastewater Flow
BOD BOD Discharge
TSS TSS Discharge
Customer On a Per-Customer Basis
Direct: CIII, CIV Directly to These Two Customer
Classes

2023 Water and Wastewater Rate Study – City of Rialto Section 3

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3.4 Proposed Wastewater Rates

Table 3-10. Proposed Wastewater Rates

Proposed Rates
Customer Type (1) (2) Existing 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Group I ($/month/residential unit)
Residential $62.19 $65.49 $68.19 $70.99 $73.91 $75.65
Residential X 1.3 $80.84 $85.14 $88.65 $92.29 $96.08 $98.35 Residential Multi. $62.19 $65.49 $68.19 $70.99 $73.91 $75.65 Group II, $/ccf metered water use
Commercial $6.77 $5.70 $5.80 $5.90 $6.04 $6.19
(includes - Softwater Service, Car Wash, Office Buildings, Cleaners, Department/Retail Stores, Warehouse, Car lots, Equipment Rental, Storage Units, Hospitals, Manufacturing, Indoor Theater, Day Care, Pre School, Disabled Care, Nail/Hair Salon, Church)
Group III, $/ccf metered water use
Commercial $7.96 $8.03 $8.36 $8.70 $9.06 $9.27
(includes - Hotels /Motels (no restaurant), repair and Service Station, Shopping Center, Recreation Park, Nursery/Florist,
Manufacturing - Non-Domestic, Lumber Yard, Nightclub, Bar, Hall) Group IV, $/ccf metered water use
Commercial $10.17 $11.67 $12.92 $14.24 $15.38 $15.75
(includes - Hotels /Motels (w/restaurants), Bakeries, Dairy, Supermarkets, Dairy, Meat Market, Mom & Pop, Mortuary, Restaurants, Fast Food, Catering)
Group V, $/student/month
Schools -
Elementary $0.85 $1.00 $1.10 $1.20 $1.30 $1.34
Junior High $2.03 $2.20 $2.40 $2.60 $2.75 $2.86
High $2.03 $2.20 $2.40 $2.60 $2.75 $2.86
Continuation $0.85 $1.00 $1.10 $1.20 $1.30 $1.34
Adult Education $0.85 $1.00 $1.10 $1.20 $1.30 $1.34
Group VI, $/ccf water use
Large Volume $6.77 $5.70 $5.80 $5.90 $6.04 $6.19
Hospital $6.77 $5.70 $5.80 $5.90 $6.04 $6.19
Commercial Building $6.77 $5.70 $5.80 $5.90 $6.04 $6.19 Notes:
(1) Existing rates have been effective since 2/1/18. Rates do not include the City's Utility Users Tax. (2) Group II, III, IV, and VI extraterritorial customers are charged 1.3 times the corresponding rates shown in this table for in-city customers.

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Section 4
Comparison With Other Utilities

4.1 Introduction
Section 4 describes a comparison of the City of Rialto’s monthly water and wastewater bills with the utilities listed below. The example monthly water and wastewater bills are shown for a typical single-family household consuming 16 hundred cubic feet (hcf) per month.

The City of Rialto’s monthly water bill includes the Monthly Minimum Charge and Volume Charges. Both the current rates and proposed rates are shown in the comparison, see Ta ble 4-1. The City of Rialto monthly wastewater bill is a flat charge that is the same for all single-family re sidences. Table 4-2 provides both current and proposed wastewater rates for Rialto, in addition to the utilities listed below.

The comparisons shown in Table 4-1 and Table 4-2 below were developed by City staff and are based on comparator rates effective as of January 1, 2024.

4.2 Comparison with Other Utilities
This section shows comparisons of existing monthly water and wastewater bills develope d by City staff for the following utilities:
 City of Rialto
 City of Banning
 City of Colton
 City of Corona
 City of Fontana (wastewater only)
 City of Loma Linda
 City of Redlands
 City of Riverside
 Cucamonga Valley Water District (“CVWD”)
 East Valley Water District
 Fontana Water Company (water only)
 Jurupa Community Services District
 Marygold Water (water only)
 San Bernardino Municipal Water Department (“SBMWD”)
 West Valley Water District (water only)
Table 4-1 is the Monthly Water Bill Comparison for the utilities named above, for residential single-family customers consuming 16 hcf a month, based on a ½” x 5/8” or a similar size meter, typical for single family dwellings. This table shows that Rialto’s current monthly water bill for the typical example customer is lower than most of the comparators. The proposed water rates for the City of Rialto 3/1/2024 monthly bill is in the middle of the table.

Section 4 2023 Water and Wastewater Rate Study – City of Rialto

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Table 4-1. Monthly Water Bill Comparison

Table 4-2 is the Monthly Wastewater Bill Comparison for the wastewater utilities named above, for residential single- family customers consuming 16 hcf of water per month. The table shows that the City of Rialto’s current wastewater rates and the proposed wastewater rates are the highest of the comparators.

Table 4-2. Monthly Wastewater Bill Comparison

It can be noted that each utility in the comparator list has a capital improvement pl an, debt schedules and O&M costs that differ from the City of Rialto. Additionally, none of the comparators are parties to Concession Agreements.

The Concession Agreement has specific reserve coverage requirements and has unique agreements with the City for capital projects and the debt associated with those projec ts. Additionally, the City of Rialto recently completed a major upgrade to its wastewater treatment plant. The City invested considerable resources into this capital project, and the debt associated with this project is reflected in both existing and proposed rates.

Comparator Utility
Rates current on
1/1/2024 (1)
Fontana Water Company (Water) 105.79
Marygold Water 82.53
City of Banning 74.35
Jurupa Community Services District 69.77
City of Corona DWP 64.69
City of Rialto, PROPOSED 64.18
East Valley Water District 63.38
Cucamonga Valley Water District (CVWD) 63.38
West Valley Water District (WVWD) 57.31
Loma Linda, City of 55.95
City of Rialto, EXISTING 54.36
City of Riverside Public Utilities 52.19
City of Colton 53.10
San Bernardino Municipal Water District 48.15
City of Redlands Municipal Utilities 46.09
Notes:
(1) Rates are based on a 1/2" x 5/8" or similar sized meter, for single family residences consuming 16 hcf per month.

Comparator Utility
Rates current on
1/1/2024 (1)
City of Rialto, PROPOSED 65.49
City of Rialto, EXISTING 62.19
City of Banning 47.12
Jurupa Community Services District 46.37
City of Corona DWP 45.60
San Bernardino Municipal Water District 45.35
Loma Linda, City of 44.44
East Valley Water District 43.09
City of Riverside Public Utilities 39.59
City of Redlands Municipal Utilities 38.12
City of Colton 34.33
City of Fontana (Sewer) 33.74
Cucamonga Valley Water District (CVWD) 29.58
Notes:
(1) Rates are based on a 1/2" x 5/8" or similar sized meter, for single family residences consuming 16 hcf per month.

Some utilities, including the City of Rialto, charge a flat rate for residential sewer services.

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Section 5
Ongoing Considerations
The 2023 Water and Wastewater Rate Study Report and the projected rate schedules shown in Section 3 cover the planning period from FY 23/24 through FY 27/28. There are several factors that could change over the next few years that have financial implications . The extent to which these factor s change may influence the financial condition of the water and wastewater systems and the City’s ongoing reviews of water and wastewater rates.

The City should continue to monitor its financial status on an ongoing basis, and shou ld continue to monitor the following:
 Water consumption. Water system revenues depend on water consumption. Water consumption in this Rate Study is based on Calendar Year 2022 actual data. Precipitation levels in 2022 were higher than average. When precipitation levels are high, customers tend to use less water. The precipitation levels in summer 2022 were also above average, affecting consumption levels in the summer when irrigation use is highest. Lower water consumption, whether resulting from additional conservation or higher precipitation levels during months where outdoor irrigation is lower, will result in less reliance on imported water, which reduces costs, but it will also result in reduced revenues.  Long-Term Water Use Objectives Legislation. Recent changes to California state law may result in additional water conservation efforts and reduced water consumption. These changes in law will be phased in over time and may impact water demands approaching 2030.
 Changing Conditions. Water and wastewater utility conditions change on an ongoing basis. There are several items that have arisen since the proposed water and wastewater rates were calculated in November 2023:
o Increased wastewater chemical costs. In December 2023, RWS informed the City that wastewater chemical costs were approximately $600,000 per year higher than budgeted in the FY 23/24 budget. RWS staff attribute this in crease to increases in the cost of chemicals, and not to an increase in chemical usage at the wastewat er treatment plant. The Concession Agreement contains cost-sharing provisions for chemical costs, and it is possible that the City may be required to pay some of these chemical cost increases to RWS. If this is the case, the projected RUA wastewater reserves will be lower than what is projected in this Rate Study. This may reduce the amount of RUA wastewater reserves the City contributes to capital projects and as a result, may increase the size of the debt issuance.
o Uncollectables reimbursement from the State of California. During the pandemic, the amount of uncollectable water and wastewater bills rose as many cities, including Rialto, suspended water shutoffs for the non-payment of water and wa stewater bills. Recently , the state provided additional funds for reimbursement of these uncol lectable bills. The State of California will be reimbursing both the water and wastewater fu nds approximately $800,000. This additional reimbursement was not factored into the Rate Study. If the City receives this reimbursement, it is a one-time reimbursement.
o 2024 Labor Reset. Every four years, the Labo r Component of the Co ncession Agreement RWS Service Charge is renegotiated to account for inflation and changes in staffing. The projected RWS Service Charge may differ from what is projected in this Rate Study, depending on the results of the 2024 Labor Reset negotiations.

Section 5 2023 Water and Wastewater Rate Study – City of Rialto

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 Capital project spending and financing.
 The proposed water and wastewater rates are based on an estimated capital project cost and schedule.

As capital project construction bids are awarded, the City will have greater certainty regarding capital costs and schedule. Deviations in costs and schedule will affect the financial projections that form the basis of this rate study.
 The proposed water and wastewater rates are based on capital improvement debt with an interest rate of 6 percent. The actual interest rate the City can obtain will affect the debt service payment the City is required to pay.
 The proposed water and wastewater rates are based on 25 percent coverage cr iteria, as specified by the City, for planning purposes. The actual coverage criteria will be established by a lender. This criteria is not yet known. Deviations from the 25 percent co verage factor will affect the financial projections and the projected Revenue Stabilization payments from RUA reserves.  Inflation rates.
 Many expenses, including the RWS Service Fees, are tied to actual changes in inflation rates. Projected expenses are based on a 2.5 percent annual inflation rate for most items. A notable exception is electricity costs, which are projected in this Rate Study to increase at 7 percent per year.  Development activity in the Division’s service area. The financial calculations incorporate a 0.5% annual system growth rate. If system grow th through FY 27/28 is hi gher than expected, this will result in more revenues than projected in this analysis, from both Development Impact Fees and utility rate revenues paid by the future customers. The City should monitor system growth and make any appropriate adjustments to budgeting and spending plans.

2023 Water and Wastewater Rate Study – City of Rialto

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Section 6

Appendix A: Revenue Requirement

Water and Wastewater Revenue Requirement Analysis
TABLE A-1Key Assumptions TABLE A-5Projected Operating Statement - Water TABLE A-2Projected Revenues Under Existing Rates TABLE A-6Projected Operating Statement - Wastewater TABLE A-3Projected RUA Expenses TABLE A-7Capital Improvement Plan TABLE A-4Projected Depreciation Expense TABLE A-8Projected Debt Service Water Cost-of-Service Analysis (COSA) and Rate Design
TABLE B-1Water COSA - Functionalization Factors TABLE B-7Water COSA - Allocation Factors TABLE B-2Water COSA - Functionalization of Water System Plant TABLE B-8Water COSA - Allocation of Rate Revenue Requirement TABLE B-3Water COSA - Functionalization of CIP by Percentage TABLE B-9Water COSA - Distribution of Revenue Requirement TABLE B-4Water COSA - Functionalization of CIP Projects by Dollar TABLE B-10Identification of Costs to be Included in Rate Tier Calculations TABLE B-5Water COSA - Functionalization of Existing Capital Charge TABLE B-11Water and Wastewater Supporting Calculations TABLE B-6Water COSA - Functionalization of Rate Revenue RequirementTABLE C-1Water Rate Design Calculations Wastewater Cost-of-Service Analysis (COSA) and Rate Design TABLE D-1Wastewater COSA - Functionalization Factors TABLE D-6Wastewater COSA - Functionalization of Rate Revenue Requirement TABLE D-2Wastewater COSA - Functionalization of Wastewater System PlantTABLE D-7Wastewater COSA - Allocation of Rate Revenue Requirement TABLE D-3Wastewater COSA - Functionalization of CIP by Percentage TABLE D-8Wastewater COSA - Distribution of Rate Revenue Requirement TABLE D-4Wastewater COSA - Functionalization of CIP by Dollar AmountTABLE E-1Wastewater Rate Design Calculations TABLE D-5Wastewater COSA - Functionalization of Capital Charge Fiscal Years FY 23/24 to FY 32/33
2024 Water and Wastewater Rate Study
City of Rialto
Model prepared by FG Solutions, LLC in January 2024
01082024 Rialto Rate Model Draft MainPage
Copyright 2024 All Rights Reserved
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Revenue Requirement Analysis: Key Assumptions
TABLE A-1
City of Rialto - 2024 Water and Wastewater Rate Study
Key Assumptions
Key Assumptions
1 FY 23/24 Draft RUA Budget used for O&M expenses.
2 RWS Core and Special Capital Improvement Plan used for the cost potential capital expenses. Source: 04/12/2023 RWS Model 3 Debt financing assumptions
4 WIFIA terms
5 Interest rate 6.00%Per Mike Bush, Urban Futures, 10/03/23 email. Given credit risk considerations 6 Term 30 year repayment period
7 Principal repayment deferral 0 years, per discussions with City staff and Urban Futures in 4Q 2023. 8 Coverage requirement 1.25years, per discussions with City staff and Urban Futures in 4Q 2023. 9 Reserve requirement 6 months of debt service payment, per 04/12/2023 RWS model 10 11 Financial Performance Criteria
12 Water Coverage 17.7%Existing Concession Agreement Requirement, in absence of future debt. 13 Wastewater Coverage 15%Existing Concession Agreement Requirement, in absence of future debt. 14 15 Customer Growth and DIF Revenues
16 Water
17 DIF Revenues $200,000Per City staff, 5/3/23 email. Less projected revenue than the City's FY 23/24 draft budget. 18 DIF, $/EDU $3,352FY 22 Rate, per City's website
19 Number of New Connections 60
20 21 Sewer Collection
22 DIF Revenues $150,000FY 23/24 Budget
23 DIF, $/EDU $900FY 22 Rate, per City's website
24 Number of New Connections 167
25 26 Sewer Treatment
27 DIF Revenues $200,000FY 23/24 Budget
28 DIF, $/EDU $2,124FY 22 Rate, per City's website
29 Number of New Connections 94
30 31 Rate Revenue Growth from New Development, Existing Rates 32 Water Wastewater
33 Number of New Connections Per Year 60 131 Water: connections predicted by DIF revenues; 34 Wastewater: average number of new collection and treatment connections predicted by FY 23/24 DIF budget. 35 Monthly Bill, 16 ccf/month $54.36 $62.19
36 Annual Increase in Rate Revenue $39,139.20$97,389.54 37 Number of Jul-Dec 2022 Connections 11,690 20,639Water: exclude fire hydrant connections 38 Annual Percent Growth 0.500% 0.500%Wastewater: adjusted down to 0.5% 39 40 General Assumptions Used in Revenue Requirement Analysis 41 Rounding (3)For Calculation of Certain Revenues and Expenses 42 Interest Income on RUA Reserves, %/ Year1.5%Does not apply to reserves held in trust 43 Electricity Inflation 7.0%Rounded to nearest 1%, the 6-year 2017 - 2023 average annual SCE commercial rate increase. See MiscCalcs worksheet.

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Revenue Requirement Analysis: Revenues
TABLE A-2
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Revenues Under Existing Rates
Water Utility
RUA Budget Projected Projected Projected Projected Projected Projected Projected Projected Projected LineAccount NumberDescription FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 1 670-400-7150-7799Miscellaneous Revenues $49,300 $49,300 $49,300 $49,300 $49,300 $49,300 $49,300 $49,300 $49,300 $49,300 1 2 670-400-7150-7672Meter Installation and Service
3 670-400-7952-7677Fire Line Installation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4 670-400-7953-7679Development Impact Fees $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 2 5 670-400-7959-7659Recycled/Reclaimed Water Sales
6 670-400-7960-7401RUA Investment Income $110,640INTEREST INCOME IS PROJECTED IN THE OPERATING STATEMENT 3 7 670-400-7960-7402Rents & Concessions $83,000 $85,075 $87,202 $89,382 $91,616 $93,907 $96,255 $98,661 $101,127 $103,656 4 8 670-400-7960-7404Trustee Interest Income
9 670-400-7960-7536Grant Funding $165,025 $0 $0 $0 0 $0 $0 $0 $0 $0 5 10 670-400-7960-7560Misc Grant Revenue
11 670-400-7960-7585County Contract - SBCO Water Order $332,264 $349,264 $366,727 $385,064 $404,317 $424,533 $445,759 $468,047 $491,450 $516,022 6 12 670-400-7960-7659Water Sales (Existing Rates) $13,053,423 $13,092,562 $13,131,701 $13,170,841 $13,209,980 $13,249,119 $13,288,258 $13,327,397 $13,366,537 $13,405,676 7 13 670-400-7960-7667Municipal Water Sales County Contract $0 14 670-400-7960-7673Turn On/Off $50,750 $50,750 $50,750 $50,750 $50,750 $50,750 $50,750 $50,750 $50,750 $50,750 8 15 670-400-7960-7689Delinquent Water Service Fees
16 670-400-7960-7699Other Charges for Current Services
17 PERCHLORATE CHARGES COMBINED REMEDY$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4, 9 18 Miscellaneous Revenues $147,592 $151,282 $155,064 $158,940 $162,914 $166,987 $171,161 $175,441 $179,827 $184,322 4 19 Emhart (Electricity Reimbursement) $370,000 $379,250 $388,731 $398,450 $408,411 $418,621 $429,087 $439,814 $450,809 $462,079 4 20 670-400-7960-7720Other Charges for Current Services
21 670-400-7960-7799Miscellaneous Revenue
22 Total, Water Revenues $14,561,994 $14,357,483 $14,429,476 $14,502,726 $14,577,288 $14,653,216 $14,730,570 $14,809,410 $14,889,799 $14,971,805 Notes, Water:
(1) Water meter damage/lost/replacement fee. Projected to remain at this value in subsequent years. (2) Per City staff via email, May 2023.
(3) Interest income is calculated each year in Table A5, Operating Statement. FY 23/24 per RUA draft FY 23/24 budget. (4) Projected to increase with inflation in FY 24/25 and subsequent years. (5) Grants are non-recurring.
(6) Through FY 24/25 per City Staff at 5/3/23 meeting. This is payment by County for use of Rialto water rights for water that is produced for Fontana Water Company. Agreement through 2025 in place.

Extension of the agreement (and revenues) requires future Regional Board decision whether, after FY 24/25, County has met its obligations. Increases after FY 24/25 at 5% per year per City staff 5/16/23. (7) FY 23/24 per draft RUA budget. Increases in subsequent years based on projected growth based on DIF fees of $200,000 per year and resulting number of new EDUs. (8) Per City staff 5/3/23, this is delinquent water service fees. Keep at this level through 10-year planning period. (9) Pass through revenues to pay for Combined Remedy O&M expenses are included in the 680 Fund and are not part of this Rate Study. 01082024 Rialto Rate Model Draft A2 Revenues FG Solutions, LLC Copyright 2024 All Rights Reserved
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Revenue Requirement Analysis: Revenues
TABLE A-2
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Revenues Under Existing Rates
Wastewater Utility
RUA Budget Projected Projected Projected Projected Projected Projected Projected Projected Projected LineAccount NumberDescription FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 23 660-400-7860-7303Fines/Forfeitures/Penalties $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 1 24 660-400-7860-7401RUA Interest Income $3,930INTEREST INCOME IS PROJECTED IN THE OPERATING STATEMENT 6 25 660-400-7860-7402Rents and Concessions (Anaergia) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2 27 660-400-7860-7405Grants $370,000 3
29 660-400-7860-7661Sewer Service Fees (Existing Rates) $26,080,285 $26,177,675 $26,275,064 $26,372,454 $26,469,843 $26,567,233 $26,664,622 $26,762,012 $26,859,401 $26,956,791 4 31 660-400-7860-7666Delinquent Sewer Service Fees $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 1 32 660-400-7860-7699Other Charges for Current Svcs (Extraterritorial)$1,839,898 $1,839,898 $1,839,898 $1,839,898 $1,839,898 $1,839,898 $1,839,898 $1,839,898 $1,839,898 $1,839,898 1 33 660-400-7860-7703Sewage Collection Fees $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 1 34 660-400-7860-7705Sewer Treatment Fees $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 1 35 660-400-7860-7729Cash Over/Short
36 660-400-7860-7799Miscellaneous Revenue $0
37 660-400-7860-9010Transfers General Fund $0
38 660-400-7959-7659Reclaimed/Recycled Water Sales $0
39 Effluent Sale to IEUA $144,375 $144,375 $144,375 $144,375 $144,375 $0 $1,024,205 $1,144,110 $1,172,713 $1,202,031 5 40 Total, Wastewater Revenues $28,846,113 $28,569,572 $28,666,962 $28,764,351 $28,861,741 $28,959,130 $29,056,520 $29,153,909 $29,251,299 $29,348,688 Notes, Wastewater:
(1) Projected to remain at FY 23/24 budgeted values in subsequent years. (2) Revenues from the Anaergia lease are not projected to occur in this Rate Study planning period. (3) Grants are non-recurring.
(4) FY 23/24 per draft RUA budget. Increases in subsequent years based on projected growth based on projected DIF fee revenues and resulting number of new EDUs. (5) Source: City staff, 7/12/23. 3,500 AFY @ $275/AF in FY 23/24 dollars. $/AF adjusted with inflation, and payment starts 1/1/29. Prepayment of 15% of total revenues starting FY 23/24. Prepayment subtracted from revenues received starting 1/1/29. Prepayment results in $0 income in FY 28/29 and approximately $92,000 credit in FY 29/30 (6) Interest income is calculated each year in Table A5, Operating Statement. FY 23/24 per RUA draft FY 23/24 budget. 01082024 Rialto Rate Model Draft A2 Revenues FG Solutions, LLC Copyright 2024 All Rights Reserved
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REVENUE REQUIREMENT ANALYSIS - PROJECTED RUA EXPENSES
TABLE A-3
City of Rialto - 2024 Water and Wastewater Rate Study
Projected RUA Expenses
RUA Water Expenses Type RUA Budget Projected
Account NumberDescription (1) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 1 670-500-7954-2021Other Services and Supplies (Perchlorate)R $87,300 $89,483 $91,720 $94,013 $96,363 $98,772 $101,241 $103,772 $106,367 $109,026 2 2 670-500-7960-2002Electricity R $1,540,932 $1,648,797 $1,764,213 $1,887,708 $2,019,848 $2,161,237 $2,312,523 $2,474,400 $2,647,608 $2,832,941 3 3 670-500-7960-2011Contract Services R
4 City Contract (Transfer to General Fund)R $479,023 $490,999 $503,274 $515,855 $528,752 $541,971 $555,520 $569,408 $583,643 $598,234 4 5 Water Production, Baseline FeederR $500,749 $513,268 $526,099 $539,252 $552,733 $566,552 $580,715 $595,233 $610,114 $625,367 4 6 Water Production, Other R $671,129 $687,907 $705,105 $722,732 $740,801 $759,321 $778,304 $797,761 $817,705 $838,148 4 7 Auditor Fees R
8 IT Services R $66,395 $68,054 $69,756 $71,500 $73,287 $75,119 $76,997 $78,922 $80,895 $82,918 4 9 Allowance for Maintenance > $250R $221,300 $226,833 $232,503 $238,316 $244,274 $250,381 $256,640 $263,056 $269,633 $276,374 4 10 Rebates R
11 City Reimbursement (680 Admin) R $799,560 $819,549 $840,038 $861,039 $882,565 $904,629 $927,244 $950,426 $974,186 $998,541 4 12 Consulting Fees R $235,935 $241,833 $247,879 $254,076 $260,428 $266,939 $273,612 $280,453 $287,464 $294,650 4 13 CONSULTING WSC BOR GRANT DCP FY 23R $330,050 5
14 CA: Independent Engineer W1 $109,296 $112,028 $114,829 $117,700 $120,642 $123,658 $126,750 $129,919 $133,167 $136,496 4 15 RWS Insurance W1 $869,512 $891,249 $913,531 $936,369 $959,778 $983,773 $1,008,367 $1,033,576 $1,059,415 $1,085,901 4 16 RWS Service Fee
17 Fixed Component W1 $2,782,235 $2,851,791 $2,923,086 $2,996,163 $3,071,067 $3,147,844 $3,226,540 $3,307,204 $3,389,884 $3,474,631 4 18 Routine R&R Component W1 $275,249 $282,131 $289,184 $296,413 $303,824 $311,419 $319,205 $327,185 $335,365 $343,749 4 19 Chemical Component W1 $63,096 $64,673 $66,290 $67,947 $69,646 $71,387 $73,172 $75,001 $76,876 $78,798 4 20 Labor Component W1 $3,533,470 $3,621,807 $3,712,352 $3,835,161 $3,931,040 $4,029,316 $4,130,049 $4,233,300 $4,339,133 $4,447,6114, 6 21 Water Operating Repair & ReplacementW2 $680,000 $697,000 $714,425 $732,286 $750,593 $769,358 $788,592 $808,306 $828,514 $849,227 4 22 670-500-7960-2021Other Services and Supplies R
23 Miscellaneous Fees and Permits R $291,792 $299,087 $306,564 $314,228 $322,084 $330,136 $338,390 $346,849 $355,521 $364,409 4 24 Rebates R $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 7 25 600-500-7960-2024Operating Lease Payments W5 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 7 26 670-500-7960-2080Allowance for Doubtful Accounts
27 670-500-7960-3001Capital Improvements
28 …7960-4001, 4010, 4050Capital Lease Payments W3 $2,900,000 $2,900,000 $2,900,000 $2,900,000 $2,900,000 $2,900,000 $2,900,000 $2,900,000 $2,900,000 $2,900,000 7 30 Total $16,887,024$16,956,490$17,370,848$17,830,759$18,277,725$18,741,811$19,223,862$19,724,772$20,245,489$20,787,019 Notes, Projected Water Expenses:
(1) "R" in this columns means the expense is an RUA Retained Expense. All entries beginning with W note the waterfall position as described in the Concession Agreement. (2) Resin replacement for perchlorate treatment not covered by the Combined Remedy. Cost increases with inflation. (3) Increases with the rate of electricity inflation. See Table A-1 for more detail on electricity inflation. (4) Increases with inflation. See Table A-1 for more detail. (5) Grants are non-recurring.
(6) Also includes $30K increase in FY 26/27 for labor reclassification following AMI implementation. Labor reclassification will cost, per Veolia staff, $5-$10/hr salary increase for 1 FTE, plus benefits, plus 18%. (7) Projected to remain constant at this amount for the 10-year Rate Study planning period. 01082024 Rialto Rate Model Draft A3 RUAExpenses FG Solutions, LLC Copyright 2024 All Rights Reservved
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REVENUE REQUIREMENT ANALYSIS - PROJECTED RUA EXPENSES
TABLE A-3
City of Rialto - 2024 Water and Wastewater Rate Study
Projected RUA Expenses
Type RUA Budget Projected
LineWastewater RUA Expenses (1) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 1 660-500-7860-2002Electricity R $1,167,308 $1,249,020 $1,336,451 $1,430,002 $1,530,103 $1,637,210 $1,751,815 $1,874,442 $2,005,652 $2,146,048 2 2 660-500-7860-2003Gas R $188,520 $193,233 $198,064 $203,015 $208,091 $213,293 $218,625 $224,091 $229,693 $235,436 3 3 660-500-7860-2011Contract Services
4 City Contract (Transfer to General Fund)R $685,000 $702,125 $719,678 $737,670 $756,112 $775,015 $794,390 $814,250 $834,606 $855,471 3 5 Biosolids R $887,285 $909,467 $932,204 $955,509 $979,397 $1,003,882 $1,028,979 $1,054,703 $1,081,071 $1,108,098 3 6 City Reimbursement (680 Admin) R $1,072,830 $1,099,651 $1,127,142 $1,155,321 $1,184,204 $1,213,809 $1,244,154 $1,275,258 $1,307,139 $1,339,818 3 7 Consulting Services R $75,000 $76,875 $78,797 $80,767 $82,786 $84,856 $86,977 $89,151 $91,380 $93,665 3 8 Consulting SWRCB Grant BDP R $370,000 4
9 Consulting CEQA for Micro Grid R $50,000 4
10 Consulting Auditor R $5,000 $5,125 $5,253 $5,384 $5,519 $5,657 $5,798 $5,943 $6,092 $6,244 3 11 IT Services: Tyler and Paymentus R $124,746 $127,865 $131,061 $134,338 $137,696 $141,139 $144,667 $148,284 $151,991 $155,791 3 12 Independent Engineer W1 $109,349 $112,083 $114,885 $117,757 $120,701 $123,718 $126,811 $129,982 $133,231 $136,562 3 13 Insurance Reimbursement W1 $999,756 $1,024,750 $1,050,369 $1,076,628 $1,103,544 $1,131,132 $1,159,410 $1,188,396 $1,218,106 $1,248,558 3 14 Maintenance > $250 W1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 15 Operating Repair and ReplacementW2 $930,000 $953,250 $977,081 $1,001,508 $1,026,546 $1,052,210 $1,078,515 $1,105,478 $1,133,115 $1,161,443 3 16 RWS Service Fees
17 Fixed Component W1 $2,680,967 $2,747,992 $2,816,691 $2,887,109 $2,959,286 $3,033,269 $3,109,100 $3,186,828 $3,266,498 $3,348,161 3 18 Routine R&R Component W1 $275,238 $282,119 $289,172 $296,401 $303,811 $311,406 $319,192 $327,171 $335,351 $343,734 3 19 Chemical Component W1 $729,932 $748,180 $766,885 $786,057 $805,708 $825,851 $846,497 $867,660 $889,351 $911,585 3, 5 20 Labor Component W1 $3,847,946 $3,944,145 $4,042,749 $4,143,817 $4,247,413 $4,353,598 $4,462,438 $4,573,999 $4,688,349 $4,805,558 3 21 660-500-7860-2021Other Services and Supplies
22 Other Retained Services R $275,930 $282,828 $289,899 $297,146 $304,575 $312,189 $319,994 $327,994 $336,194 $344,598 3 23 Inland Empire Brine Line Fees (SBVMWD)R $125,290 $128,422 $131,633 $134,924 $138,297 $141,754 $145,298 $148,930 $152,654 $156,470 3 24 Wastewater Services (Colton) R $12,000 $12,300 $12,608 $12,923 $13,246 $13,577 $13,916 $14,264 $14,621 $14,986 3 25 MIPP Services (Veolia) R $111,920 $114,718 $117,586 $120,526 $123,539 $126,627 $129,793 $133,038 $136,364 $139,773 3 26 660-500-7860-2024Operating Lease Payment R $1,600,000 $1,600,000 $1,600,000 $1,600,000 $1,600,000 $1,600,000 $1,600,000 $1,600,000 $1,600,000 $1,600,000 6 27 660-500-7860-2080Allowance for Doubtful Accounts R $0 28 No Acct. Number YetRialto Habitat Nature Center O&M R $150,000 $153,750 $157,594 $161,534 $165,572 $169,711 $173,954 $178,303 29 …7960-4001, 4010Capital Lease Payments W3 $12,682,000$12,682,000$12,682,000$12,682,000$12,682,000$12,682,000$12,682,000$12,682,000$12,682,000$12,682,000 6 30 Total $29,006,018$28,996,147$29,570,207$30,012,552$30,470,166$30,943,725$31,433,942$31,941,573$32,467,412$33,012,302 Notes, Projected Wastewater Expenses:
(1) "R" in this columns means the expense is an RUA Retained Expense. All entries beginning with W note the waterfall position as described in the Concession Agreement. (2) Increases with the rate of electricity inflation. See Table A-1 for more detail on electricity inflation. (3) Increases with inflation. See Table A-1 for more detail. (4) Grants are non-recurring.
(5) Does not include possible $600,000 chemical overage reported by RWS in December 2023, which was provided after the proposed rates were presented to Council members. (6) Projected to remain constant at this amount for the 10-year Rate Study planning period. (7) Per City staff, 7/12/2023 email.
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REVENUE REQUIREMENT ANALYSIS - PROJECTED DEPRECIATION EXPENSE TABLE A-4
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Depreciation Expense
RUA Budget Projected
LineWater FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 1 Depreciation, Existing Assets $888,100 $888,100 $888,100 $888,100 $888,100 $888,100 $888,100 $888,100 $888,100 $888,100 2 Depreciation, Capital Expenditures $222,000 $222,000 $222,000 $222,000 $222,000 $222,000 $222,000 $222,000 1 3 Total Deprecation Expense $888,100 $888,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 4 5 Phase in Collection of Depreciation Expense 0% 0% 20% 40% 100% 100% 100% 100% 100% 100% 2 6 7 Deprecation Expense Collected Through Rates $0 $222,020 $444,040 $1,110,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 $1,110,100 Notes:
(1) Based on proposed CIP, using a 50-year life for distribution facilities and a 25-year life for treatment facilities. (2) Phasing in the collection of depreciation expense through rates is a City policy decision discussed at Water Subcommittee meetings in 3Q 2023.

RUA Budget Projected
LineWastewater FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 1 Depreciation, Existing Assets $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 $2,306,390 2 Depreciation, Capital Expenditures
3 Sewer Main Projects $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 1 4 Treatment Plant and Lift Station Projects, Except Biosolids $696,000 $696,000 $696,000 $696,000 $696,000 $696,000 $696,000 $696,000 1 5 Treatment Plant Biosolids $660,000 $660,000 $660,000 $660,000 $660,000 $660,000 $660,000 $660,000 1 6 Total Deprecation Expense $2,306,390 $2,306,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 7 8 Phase in Collection of Depreciation Expense 0% 0% 40% 60% 100% 100% 100% 100% 100% 100% 2 9 10 Deprecation Expense Collected Through Rates $0 $0 $1,520,956 $2,281,434 $3,802,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 $3,802,390 Notes:
(1) Based on proposed CIP, using a 50-year life for sewer main projects, a 25-year life for treatment facilities, and a 40-year life for biosolids facilities. (2) Phasing in the collection of depreciation expense through rates is a City policy decision discussed at Water Subcommittee meetings in 3Q 2023. 01082024 Rialto Rate Model Draft A4 Depreciation FG Solutions, LLC Copyright 2024 All Rights Reservved
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REVENUE REQUIREMENT ANALYSIS - WATER OPERATING STATEMENT TABLE A-5
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Water
Projected
LineItem FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 25 TRUSTEE
26 Trustee Sources of Funds Excluding Construction Reserve 27 Beginning Year RWS Water Reserve Fund Balance$3,849,637 $4,121,756 $4,139,122 $4,353,500 $4,468,478 $4,580,220 $4,696,241 $4,816,754 $4,941,981 $5,072,161 8 28 29 Rate Revenues Subject to Rate Increases
30 Water Sales (Existing Rates) 13,053,423 13,092,562 13,131,701 13,170,841 13,209,980 13,249,119 13,288,258 13,327,397 13,366,537 13,405,676 9 31 Subtotal $13,053,423 $13,092,562 $13,131,701 $13,170,841 $13,209,980 $13,249,119 $13,288,258 $13,327,397 $13,366,537 $13,405,676 32 33 Rate Revenues from Future Rate Increases
34 Monthly Water Bill Months
35 (15 hcf/month) % Effective in
36 Effective Date FY IncreaseInitial Year
37 1/1/2024 FY 23/2412.00% 6 $783,000 $1,571,000 $1,576,000 $1,581,000 $1,585,000 $1,590,000 $1,595,000 $1,599,000 $1,604,000 $1,609,000 10 38 1/1/2025 FY 24/2512.00% 6 880,000 1,765,000 1,770,000 1,775,000 1,781,000 1,786,000 1,791,000 1,796,000 1,802,000 39 1/1/2026 FY 25/26 6.00% 6 494,000 991,000 994,000 997,000 1,000,000 1,003,000 1,006,000 1,009,000 40 1/1/2027 FY 26/27 6.00% 6 525,385 1,054,000 1,057,000 1,060,000 1,063,000 1,066,000 1,070,000 41 1/1/2028 FY 27/28 6.00% 6 558,539 1,120,000 1,124,000 1,127,000 1,130,000 1,134,000 42 1/1/2029 FY 28/29 2.50% 6 247,000 496,000 498,000 499,000 501,000 10 43 1/1/2030 FY 29/30 2.50% 6 254,000 510,000 512,000 513,000 10 44 1/1/2031 FY 30/31 2.50% 6 261,000 524,000 526,000 10 45 1/1/2032 FY 31/32 2.50% 6 268,794 539,000 10
46 1/1/2033 FY 32/33 2.50% 6 276,358 10
47 Subtotal Rate Revenue from Future Rate Increases$783,000 $2,451,000 $3,835,000 $4,867,385 $5,966,539 $6,792,000 $7,315,000 $7,852,000 $8,405,794 $8,979,358 48 One Time Adjustment 3/1/24 Rate Increase ($261,000) 10 49 50 Other Revenues Not Subject to Rate Increases 9
51 County Contract - SBCO Water Order 332,264 349,264 366,727 385,064 404,317 424,533 445,759 468,047 491,450 516,022 52 Rents & Concessions 83,000 85,075 87,202 89,382 91,616 93,907 96,255 98,661 101,127 103,656 53 Trustee Water Reserve Interest Income 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 54 Turn On/Off 50,750 50,750 50,750 50,750 50,750 50,750 50,750 50,750 50,750 50,750 55 Delinquent Water Service Fees 0 0 0 0 0 0 0 0 0 0
56 Grant Revenue 165,025 0 0 0 0 0 0 0 0 0 11
57 Other Charges for Current Services
58 Perchlorate Charges Combined Remedy 0 0 0 0 0 0 0 0 0 0 59 Miscellaneous Revenues 147,592 151,282 155,064 158,940 162,914 166,987 171,161 175,441 179,827 184,322 60 Miscellaneous Revenues 49,300 49,300 49,300 49,300 49,300 49,300 49,300 49,300 49,300 49,300 61 Revenue Stabilization from RWS Reserves 200,000 1,100,000 800,000 200,000 100,000 0 0 0 0 0 7 62 New Revenue Stabilization Not from RUA Reserves2,785,000 0 0 0 0 0 0 0 0 0 7 63 Total Revenue $17,448,354 $17,389,233 $18,535,744 $19,031,662 $20,095,416 $20,886,595 $21,476,483 $22,081,596 $22,704,784 $23,349,084 01082024 Rialto Rate Model Draft A5 OS W FG Solutions, LLC Copyright 2024 All Rights Reservved
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REVENUE REQUIREMENT ANALYSIS - WATER OPERATING STATEMENT TABLE A-5
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Water
Projected
LineItem FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 64 TRUSTEE
65 Construction Reserve
66 Beginning Balance $2,607,134 ($53,758) $145,435 $347,617 $552,831 $761,123 $972,540 $1,187,128 $1,404,935 $1,626,009 12 67 Interest Income $39,107 ($806) $2,182 $5,214 $8,292 $11,417 $14,588 $17,807 $21,074 $24,390 68 DIF Revenues $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 69 Less Use of DIF Revenues for Capital Expenditure$2,900,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 13 70 Ending Balance ($53,758) $145,435 $347,617 $552,831 $761,123 $972,540 $1,187,128 $1,404,935 $1,626,009 $1,850,399 13 71 72 Trustee Uses of Funds
73 Waterfall 1: Water Service Fee 14
74 Fixed, Routine R&R, and Labor Components $6,590,955 $6,755,729 $6,924,622 $7,127,738 $7,305,931 $7,488,579 $7,675,794 $7,867,689 $8,064,381 $8,265,990 75 Chemical Component 63,096 64,673 66,290 67,947 69,646 71,387 73,172 75,001 76,876 78,798 76 Waterfall 1: Reimbursements 14
77 Insurance Reimbursement 869,512 891,249 913,531 936,369 959,778 983,773 1,008,367 1,033,576 1,059,415 1,085,901 78 Independent Engineer 109,296 112,028 114,829 117,700 120,642 123,658 126,750 129,919 133,167 136,496 79 Maintenance 221,300 226,833 232,503 238,316 244,274 250,381 256,640 263,056 269,633 276,374 80 Waterfall 1: Retained RUA Expenses 5,052,865 4,908,977 5,104,647 5,310,403 5,526,860 5,754,675 5,994,547 6,247,225 6,513,503 6,794,233 81 Waterfall 2: Annual Operating R&R Payment 680,000 697,000 714,425 732,286 750,593 769,358 788,592 808,306 828,514 849,227 14 82 Waterfall 3: Capital Charges 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 2,900,000 14 83 Waterfall 3: New Capital Charges
84 Future Debt Service 0 0 443,154 443,154 443,154 443,154 443,154 443,154 443,154 443,154 15 87 Waterfall 4: Water Reserve Account Deposits 272,119 17,367 214,378 114,978 111,741 116,022 120,513 125,228 130,179 135,382 16 88 Waterfall 5: RUA Lease Payment 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 2 89 Transfer to RUA: Depreciation Expense 0 222,020 444,040 1,110,100 1,110,100 1,110,100 1,110,100 1,110,100 1,110,100 3 90 Total Uses of Funds $17,159,143 $16,973,856 $18,250,399 $18,832,930 $19,942,720 $20,411,086 $20,897,628 $21,403,253 $21,928,922 $22,475,655 91 92 Additional $ Out the Waterfall 17,092 398,010 70,967 83,754 40,955 359,488 458,343 553,116 645,683 738,047 4 93 94 Ending RWS Water Reserve Balance 4,121,756 4,139,122 4,353,500 4,468,478 4,580,220 4,696,241 4,816,754 4,941,981 5,072,161 5,207,543 Projected
LineItem FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 95 TRUSTEE
96 COVERAGE CALCULATION (Criterion: Free Cash Flow After Waterfall 1 -3 Paid > 17.7% of Capital Charges) 97 Revenues Going into Trust Net of DIF $14,403,354 $16,229,233 $17,675,744 $18,771,662 $19,935,416 $20,826,595 $21,416,483 $22,021,596 $22,644,784 $23,289,084 98 Plus Revenue Stabilization 2,985,000 1,100,000 800,000 200,000 100,000 0 0 0 0 0 99 Less Waterfall 1-2 ($13,587,024)($13,656,490)($14,070,848)($14,530,759)($14,977,725)($15,441,811)($15,923,862)($16,424,772)($16,945,489)($17,487,019) 100 Balance, Available for Capital Charge $3,801,330 $3,672,743 $4,404,896 $4,440,903 $5,057,692 $5,384,784 $5,492,622 $5,596,824 $5,699,295 $5,802,065 101 Less Capital Charges ($2,900,000)($2,900,000)($3,343,154)($3,343,154)($3,343,154)($3,343,154)($3,343,154)($3,343,154)($3,343,154)($3,343,154) 102 Free Cash Flow Before Lease Payment $901,330 $772,743 $1,061,743 $1,097,749 $1,714,538 $2,041,631 $2,149,468 $2,253,671 $2,356,142 $2,458,912 103 Ratio (Free Cash Flow Divided by Capital Charges) 31.1% 26.6% 31.8% 32.8% 51.3% 61.1% 64.3% 67.4% 70.5% 73.6% 17 104
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REVENUE REQUIREMENT ANALYSIS - WATER OPERATING STATEMENT TABLE A-5
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Water
105
106 REQUIRED WATER FUND RESERVE CALCULATION
107 (Criteria: 25% service fees, reimbursable pmts, facility auth expenses, ORR pmts, Capital Charges (waterfall 1 - 3)) 108 Required Water Reserve Fund Reserve Balance
109 Sum of required items $16,487,024 $16,556,490 $16,970,848 $17,430,759 $17,877,725 $18,341,811 $18,823,862 $19,324,772 $19,845,489 $20,387,019 110 25% of the sum of required items $4,121,756 $4,139,122 $4,242,712 $4,357,690 $4,469,431 $4,585,453 $4,705,965 $4,831,193 $4,961,372 $5,096,755 111
112
113 CALCULATED DAYS OF RESERVES (Criteria: Ending Year RUA Reserve Balance Divided by Waterfall 1 - 5 Expenses * 365) 114 Days of Reserves 43 21 16 22 41 61 86 112 139 166 18 115 30 Days of Waterfall 1-5 Expenses $1,410,341 $1,395,111 $1,500,033 $1,547,912 $1,639,128 $1,677,624 $1,717,613 $1,759,171 $1,802,377 $1,847,314 116
117 RUA: ADDITIONAL RETAINED EXPENSE DETAIL
118 Projected
119 Item FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 120 Electricity $1,540,932 $1,648,797 $1,764,213 $1,887,708 $2,019,848 $2,161,237 $2,312,523 $2,474,400 $2,647,608 $2,832,941 14 121 Perchlorate, Not Combined Remedy $87,300 $89,483 $91,720 $94,013 $96,363 $98,772 $101,241 $103,772 $106,367 $109,026 14 122 City Contract (Transfer to General Fund) $479,023 $490,999 $503,274 $515,855 $528,752 $541,971 $555,520 $569,408 $583,643 $598,234 14 123 Water Purchase, Baseline Feeder $500,749 $513,268 $526,099 $539,252 $552,733 $566,552 $580,715 $595,233 $610,114 $625,367 14 124 WVWD and Misc Water Purchase Fees $671,129 $687,907 $705,105 $722,732 $740,801 $759,321 $778,304 $797,761 $817,705 $838,148 14 125 IT Services $66,395 $68,054 $69,756 $71,500 $73,287 $75,119 $76,997 $78,922 $80,895 $82,918 14 126 City Reimbursement (680 Admin) $799,560 $819,549 $840,038 $861,039 $882,565 $904,629 $927,244 $950,426 $974,186 $998,541 14 127 Consulting Fees: Engineering $235,935 $241,833 $247,879 $254,076 $260,428 $266,939 $273,612 $280,453 $287,464 $294,650 14 128 Consulting Services $330,050 $0 $0 $0 $0 $0 $0 $0 $0 $0 11 129 Miscellaneous Fees and Permits $291,792 $299,087 $306,564 $314,228 $322,084 $330,136 $338,390 $346,849 $355,521 $364,409 14 130 Rebates $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 14 01082024 Rialto Rate Model Draft A5 OS W FG Solutions, LLC Copyright 2024 All Rights Reservved
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REVENUE REQUIREMENT ANALYSIS - WATER OPERATING STATEMENT TABLE A-5
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Water
Notes:
(1) FY 23/24 Source: City staff, 5/10/23. Fund balance shown is 660 Fund Cash in Bank balance as of 5/10/23. (2) FY 23/24 per RUA FY 23/24 Budget, and projected to remain at this value through the 10-year planning period. (3) The City is implementing a policy of collecting depreciation expense through rates. Collecting deprecation expense through rates will be phased in through FY 27/28. (4) If revenues exceed the amount needed to meet the RWS reserve requirement, then these revenues will "drop out" of the waterfall and be returned to RUA.

FY 23/24 amount obtained from John Maher Accountancy, 5/8/23. (5) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance. (6) For the purposes of this Rate Study, all revenues are assumed to go into the waterfall. (7) $2.785 million of the FY 23/24 Revenue Stabilization is the remaining funds left in the Trustee Water Rate Stabilization Fund as of 6/30/23, per John Maher, 5/5/23.

If needed, pre-existing reserves are used to provide supplemental revenue stabilization to meet the RWS coverage requirement. (8) Beginning FY 23/24 Balance equals actual RWS Water Construction Reserve Balance as of 3/31/23. (9) See Table A-2 for more detail.
(10) Rate increases will be effective on January 1 of each year. The FY 23/24 rate increase will become effective on 3/1/24. For the purposes of this analysis, revenue from the 3/1/24 rate increase is shown as occurring on 1/1/24 in Line 37, with an adjustment in Line 48. The sum of Lines 37 and 48 is the revenue in FY 23/24 from the 3/1/24 rate increase.

FY 28/29 - FY 32/33 revenue increases will be higher than what is shown. No additional CIP for FY 28/29 - FY 32/33 has yet been identified and no CIP spending for these years is included in this analysis. (11) Grant revenues are non-recurring. Grant revenues are used for consulting services for specific grant-funded purposes. (12) FY 23/24 balance is the actual Construction Reserve balance as of 3/31/23. (13) The projected negative balance at the end of FY 23/24 is due to use of $2.9M in DIF reserves for capital projects. The actual ending year FY 23/24 balance is likely to be positive, as FY 23/24 year to date DIF revenues are higher than the $200,00 was projected in the FY 23/24 budget. (14) See Table A-3 for more detail.
(15) See Table A-8 for more detail.
(16) This row represents the amount, if required, of contributions from RUA to maintain the minimum required balance in the Water Reserve Account held in trust. (17) The Concession Agreement requires coverage of at least 17.7%. With the addition of new debt, City staff (per 8/14/23 email) has provided direction to use 25% coverage for the purposes of this Rate Study. (18) There is no City policy for a minimum RUA reserve balance. 01082024 Rialto Rate Model Draft A5 OS W FG Solutions, LLC Copyright 2024 All Rights Reservved
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21.13% 24.72% 27.10% 26.41% 26.11% 26.07% 26.09% 26.17% 29.59% 33.06% 01082024 Rialto Rate Model Draft
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REVENUE REQUIREMENT ANALYSIS - WASTEWATER OPERATING STATEMENT TABLE A-6
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Wastewater
LineItem FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 25 TRUSTEE
26 Trustee Sources of Funds Excluding Construction Reserve 27 Beginning Year RWS Wastewater Reserve Fund Balance$6,613,422 $6,851,504 $6,849,037 $6,992,552 $7,772,306 $7,886,709 $8,005,099 $8,127,653 $8,254,561 $8,386,021 10 28 29 Rate Revenues Subject to Rate Increases
30 Sewer Service Fees (Existing Rates) $26,080,285$26,177,675$26,275,064$26,372,454$26,469,843$26,567,233$26,664,622$26,762,012$26,859,401$26,956,791 11 31 Other Charges for Current Svcs (Extraterritorial) 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 1,839,898 11 32 Total Rate Revenues, Existing Rates, (Subject to Rate Increases)$27,920,183$28,017,572$28,114,962$28,212,351$28,309,741$28,407,130$28,504,520$28,601,909$28,699,299$28,796,688 33 34 Future Increases
35 Monthly Water Bill Months
36 (15 hcf/month) % Effective in
37 Effective Date FY IncreaseInitial Year
38 1/1/2024 FY 23/24 4.25% 6 $593,000 $1,191,000 $1,195,000 $1,199,000 $1,203,000 $1,207,000 $1,211,000 $1,216,000 $1,220,000 $1,224,000 12 39 1/1/2025 FY 24/25 4.25% 6 621,000 1,246,000 1,250,000 1,254,000 1,259,000 1,263,000 1,267,000 1,272,000 1,276,000 40 1/1/2026 FY 25/26 4.25% 6 649,000 1,303,000 1,308,000 1,312,000 1,317,000 1,321,000 1,326,000 1,330,000 41 1/1/2027 FY 26/27 4.25% 6 679,000 1,363,000 1,368,000 1,373,000 1,377,000 1,382,000 1,387,000 42 1/1/2028 FY 27/28 2.50% 6 418,000 839,000 842,000 845,000 847,000 850,000 43 1/1/2029 FY 28/29 2.50% 6 430,000 863,000 866,000 869,000 872,000 12 44 1/1/2030 FY 29/30 2.50% 6 442,000 887,000 890,000 893,000 12 45 1/1/2031 FY 30/31 2.50% 6 455,000 913,000 916,000 12 46 1/1/2032 FY 31/32 2.50% 6 468,000 939,000 12
47 1/1/2033 FY 32/33 2.50% 6 481,000 12
48 Subtotal Rate Revenue from Future Rate Increases $593,000 $1,812,000 $3,090,000 $4,431,000 $5,546,000 $6,415,000 $7,311,000 $8,234,000 $9,187,000 $10,168,000 49 One Time Adjustment 3/1/24 Rate Increase ($197,667) 12 50 51 Other Revenues Not Subject to Rate Increases 13
52 Fines/Forfeitures/Penalties 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 53 Rents and Concessions (Anaergia Lease) 0 0 0 0 0 0 0 0 0 0 14 54 Trustee Interest Income 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 55 Delinquent Sewer Service Fees 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 56 Grants 370,000 0 0 0 0 0 0 0 0 0
57 Effluent Sale to IEUA 144,375 144,375 144,375 144,375 144,375 0 1,024,205 1,144,110 1,172,713 1,202,031 15 58 Subtotal, Other Revenues Not Subject to Rate Increases816,375 446,375 446,375 446,375 446,375 302,000 1,326,205 1,446,110 1,474,713 1,504,031 59 60 Revenue Stabilization from RUA Reserves 1,000,000 500,000 0 2,300,000 1,500,000 1,000,000 500,000 0 0 0 9 61 New Revenue Stabilization Not from RUA Reserves 0 0 0 0 0 0 0 0 0 0 62 63 Total Revenue $30,131,891$30,775,947$31,651,337$35,389,726$35,802,116$36,124,130$37,641,725$38,282,019$39,361,012$40,468,719 01082024 Rialto Rate Model Draft
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REVENUE REQUIREMENT ANALYSIS - WASTEWATER OPERATING STATEMENT TABLE A-6
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Wastewater
Projected
LineItem FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 64 TRUSTEE
65 Construction Reserve
66 Beginning Balance $7,495,973 $445,973 $795,973 $1,145,973 $1,495,973 $1,845,973 $2,195,973 $2,545,973 $2,895,973 $3,245,973 16 67 DIF Revenues 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 68 Less Use of DIF Revenues for Capital Expenditure(7,400,000) 0 0 0 0 0 0 0 0 0 69 Ending Balance $445,973 $795,973 $1,145,973 $1,495,973 $1,845,973 $2,195,973 $2,545,973 $2,895,973 $3,245,973 $3,595,973 70 71 Trustee Uses of Funds
72 Waterfall 1: Wastewater Service Fee 17
73 Fixed, Routine R&R, and Labor Components $6,804,152 $6,974,255 $7,148,612 $7,327,327 $7,510,510 $7,698,273 $7,890,730 $8,087,998 $8,290,198 $8,497,453 74 Chemical Component $729,932 $748,180 $766,885 $786,057 $805,708 $825,851 $846,497 $867,660 $889,351 $911,585 75 Waterfall 1: Reimbursements 17
76 Insurance Reimbursement 999,756 1,024,750 1,050,369 1,076,628 1,103,544 1,131,132 1,159,410 1,188,396 1,218,106 1,248,558 77 Independent Engineer 109,349 112,083 114,885 117,757 120,701 123,718 126,811 129,982 133,231 136,562 78 Maintenance 0 0 0 0 0 0 0 0 0 0
79 Waterfall 1: Retained RUA Expenses 5,150,829 4,901,629 5,230,375 5,421,275 5,621,157 5,830,541 6,049,979 6,280,060 6,521,411 6,774,701 80 Waterfall 2: Annual Operating R&R Payment 930,000 953,250 977,081 1,001,508 1,026,546 1,052,210 1,078,515 1,105,478 1,133,115 1,161,443 17 81 Waterfall 3: Capital Charges 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 12,682,000 17 82 Waterfall 3: New Capital Charges
83 Future Debt Service 0 0 2,676,671 2,676,671 2,676,671 2,676,671 2,676,671 2,676,671 2,676,671 18 84 Waterfall 4: Wastewater Reserve Account Deposits 238,082 (2,468) 143,515 779,754 114,403 118,390 122,554 126,908 131,460 136,222 19 85 Waterfall 5: RUA Lease Payment 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 2 86 Transfer to RUA: Depreciation Expense 1,520,956 2,281,434 3,802,390 3,802,390 3,802,390 3,802,390 3,802,390 3,802,390 3 87 Total Uses of Funds $29,244,100$28,993,680$31,234,678$35,750,411$37,063,630$37,541,175$38,035,557$38,547,541$39,077,932$39,627,585 88 89 Additional $ Out the Waterfall $649,708 $1,784,735 $273,144 ($1,140,439)($1,375,918)($1,535,435) ($516,387) ($392,429) $151,620 $704,912 20 90 91 Ending Wastewater Reserve Balance $6,851,504 $6,849,037 $6,992,552 $7,772,306 $7,886,709 $8,005,099 $8,127,653 $8,254,561 $8,386,021 $8,522,243 Projected
LineItem FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 92 TRUSTEE COVERAGE CALCULATION (Criterion: Free Cash Flow After Waterfall 1 -3 Paid > 15% of Capital Charges) 93 Revenues Going into Trust Net of DIF Revenues $29,085,183$30,031,572$31,406,962$32,845,351$34,057,741$35,024,130$36,017,520$37,037,909$38,088,299$39,166,688 94 Plus Revenue Stabilization from RUA Reserves 1,000,000 500,000 0 2,300,000 1,500,000 1,000,000 500,000 0 0 0 95 Plus Revenue Stabilization not from RUA Reserves 0 0 0 0 0 0 0 0 0 0 96 Less Waterfall 1-2 (14,724,018)(14,714,147)(15,288,207)(15,730,552)(16,188,166)(16,661,725)(17,151,942)(17,659,573)(18,185,412)(18,730,302) 97 Balance, Available for Capital Charge $15,361,165$15,817,425$16,118,755$19,414,799$19,369,575$19,362,405$19,365,577$19,378,337$19,902,887$20,436,387 98 Less Capital Charges ($12,682,000)($12,682,000)($12,682,000)($15,358,671)($15,358,671)($15,358,671)($15,358,671)($15,358,671)($15,358,671)($15,358,671) 99 Free Cash Flow Before RUA Lease Payment $2,679,165 $3,135,425 $3,436,755 $4,056,128 $4,010,904 $4,003,735 $4,006,907 $4,019,666 $4,544,216 $5,077,716 100 Ratio (Free Cash Flow Divided by Capital Charges) 21.13% 24.72% 27.10% 26.41% 26.11% 26.07% 26.09% 26.17% 29.59% 33.06% 21 101
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REVENUE REQUIREMENT ANALYSIS - WASTEWATER OPERATING STATEMENT TABLE A-6
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Wastewater
102 TRUSTEE REQUIRED WASTEWATER FUND RESERVE CALCULATION 103 (Criteria: 25% service fees, reimbursable pmts, facility auth expenses, ORR pmts, Capital Charges (waterfall 1 - 3)) 104 Required Water Reserve Fund Reserve Balance
105 Sum of above items $27,406,018$27,396,147$27,970,207$28,412,552$28,870,166$29,343,725$29,833,942$30,341,573$30,867,412$31,412,302 106 25% of the sum of above items $6,851,504 $6,849,037 $6,992,552 $7,103,138 $7,217,542 $7,335,931 $7,458,486 $7,585,393 $7,716,853 $7,853,075 107
108 CALCULATED DAYS OF RESERVES (Criteria: Ending Year RUA Reserve Balance Divided by Waterfall 1 - 5 Expenses * 365) 22 109 Days of Reserves 268 276 182 164 172 183 197 225 253 286 110 90 Days of Waterfall 1-5 Expenses $7,210,874 $7,149,126 $7,701,701 $8,815,170 $9,138,977 $9,256,728 $9,378,631 $9,504,873 $9,635,655 $9,771,185 111
112 RUA: ADDITIONAL RETAINED EXPENSE DETAIL
113 Projected
114 Item FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 Notes 115 Electricity $1,167,308 $1,249,020 $1,336,451 $1,430,002 $1,530,103 $1,637,210 $1,751,815 $1,874,442 $2,005,652 $2,146,048 17 116 Gas $188,520 $193,233 $198,064 $203,015 $208,091 $213,293 $218,625 $224,091 $229,693 $235,436 17 117 Contracted Services
118 City Contract (Transfer to General Fund) $685,000 $702,125 $719,678 $737,670 $756,112 $775,015 $794,390 $814,250 $834,606 $855,471 17 119 Biosolids $887,285 $909,467 $932,204 $955,509 $979,397 $1,003,882 $1,028,979 $1,054,703 $1,081,071 $1,108,098 17 120 City Reimbursement (680 Admin) $1,072,830 $1,099,651 $1,127,142 $1,155,321 $1,184,204 $1,213,809 $1,244,154 $1,275,258 $1,307,139 $1,339,818 17 121 Consulting Services $75,000 $76,875 $78,797 $80,767 $82,786 $84,856 $86,977 $89,151 $91,380 $93,665 17 122 Consulting SWRCB Grant BDP $370,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 17 123 Consulting CEQA for Micro Grid $50,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 17 124 Consulting Auditor $5,000 $5,125 $5,253 $5,384 $5,519 $5,657 $5,798 $5,943 $6,092 $6,244 17 125 IT Services: Tyler and Paymentus $124,746 $127,865 $131,061 $134,338 $137,696 $141,139 $144,667 $148,284 $151,991 $155,791 17 126 Other Services and Supplies
127 Rialto Habitat Nature Center O&M $0 $0 $150,000 $153,750 $157,594 $161,534 $165,572 $169,711 $173,954 $178,303 17 128 Other Retained Services $275,930 $282,828 $289,899 $297,146 $304,575 $312,189 $319,994 $327,994 $336,194 $344,598 17 129 Inland Empire Brine Line Fees (SBVMWD) $125,290 $128,422 $131,633 $134,924 $138,297 $141,754 $145,298 $148,930 $152,654 $156,470 17 130 Wastewater Services (Colton) $12,000 $12,300 $12,608 $12,923 $13,246 $13,577 $13,916 $14,264 $14,621 $14,986 17 131 MIPP Services (Veolia) $111,920 $114,718 $117,586 $120,526 $123,539 $126,627 $129,793 $133,038 $136,364 $139,773 17 132 Total $5,150,829 $4,901,629 $5,230,375 $5,421,275 $5,621,157 $5,830,541 $6,049,979 $6,280,060 $6,521,411 $6,774,701 01082024 Rialto Rate Model Draft
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REVENUE REQUIREMENT ANALYSIS - WASTEWATER OPERATING STATEMENT TABLE A-6
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Operating Statement - Wastewater
Notes:
(1) FY 23/24 Source: City staff, 5/10/23. Fund balance shown is 660 Fund Cash in Bank balance as of 5/10/23. (2) FY 23/24 per RUA FY 23/24 Budget, and projected to remain at this value through the 10-year planning period. (3) The City is implementing a policy of collecting depreciation expense through rates. Collecting deprecation expense through rates will be phased in through FY 27/28. (4) If revenues exceed the amount needed to meet the RWS reserve requirement, then these revenues will "drop out" of the waterfall and be returned to RUA.

FY 23/24 amount obtained from John Maher Accountancy, 5/8/23. (5) FY 23/24 interest income from the FY 23/24 RUA budget. In subsequent years, interest income is projected to be 1.5% of the previous fiscal year ending fund balance. (6) For the purposes of this Rate Study, all revenues are assumed to go into the waterfall. (7) The City anticipates using a portion of the RUA reserves to fund capital projects. See Table A-18. (8) Beginning in FY 28/29, the City anticipates the start-up of a well that will deliver water to IEUA. The City is responsible for the O&M expenses of this well, in conjunction with revenues from effluent sales to IEUA.

See Table B-11 for more detail.
(9) As needed, pre-existing reserves are used to provide supplemental revenue stabilization to meet the RWS coverage requirement. (10) Beginning FY 23/24 Balance equals actual RWS Wastewater Construction Reserve Balance as of 3/31/23. (11) See Table A-2 for more detail.
(12) Rate increases will be effective on January 1 of each year. The FY 23/24 rate increase will become effective on 3/1/24. For the purposes of this analysis, revenue from the 3/1/24 rate increase is shown as occurring on 1/1/24 in Line 37, with an adjustment in Line 48. The sum of Lines 37 and 48 is the revenue in FY 23/24 from the 3/1/24 rate increase.

FY 28/29 - FY 32/33 revenue increases will be higher than what is shown. No additional CIP for FY 28/29 - FY 32/33 has yet been identified and no CIP spending for these years is included in this analysis. (13) See Table A-2 for more detail.
(14) Revenues from the Anaergia lease are assumed to be $0 for the duration of the Rate Study planning period. (15) Source: City staff, 7/12/23. 3,500 AFY @ $275/AF in FY 23/24 dollars. $/AF adjusted with inflation, and payment starts 1/1/29. Prepayment of 15% of total revenues starting FY 23/24. Prepayment subtracted from revenues received starting 1/1/29. Prepayment results in $0 income in FY 28/29 and approximately $92,000 credit in FY 29/30 (16) FY 23/24 balance is the actual Construction Reserve balance as of 3/31/23. (17) See Table A-3 for more detail.
(18) See Table A-18 for more detail.
(19) This row represents the amount, if required, of contributions from RUA to maintain the minimum required balance in the Wastewater Reserve Account held in trust. (20) A negative value in this row added to the deprecation expense will be the net amount transferred to RUA. (21) The Concession Agreement requires coverage of at least 15%. With the addition of new debt, City staff (per 8/14/23 email from City staff with Bond Counsel coverage requirements) has provided direction to use 25% coverage for the purposes of this Rate Study. (22) There is no City policy for a minimum RUA reserve balance. 01082024 Rialto Rate Model Draft
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REVENUE REQUIREMENT ANALYSIS - CAPITAL IMPROVEMENT PLAN TABLE A-7
City of Rialto - 2024 Water and Wastewater Rate Study
Capital Improvement Plan
Estimated Dashboard Funded Funded Funded Total Remaining Year Remaining Cost CIP Input: Cost from Cost from Debt-FinancedFunded Cost Per RWS Line Water Capital Projects FY 23/24 $ (1) Category Funded? RUA DIFs Cost FY 23/24 $ Apr 2023 CIP 1 RWS Defined Core Water Capital Projects
2 Aged Watermain Replacement Etiwanda from Riverside to Eucalyptus (Pavement Project)$6,700,000 Highest Priority - W Yes $2,900,000 $3,800,000 $6,700,000 2024 3 Pressure Relief Valves (PRVs) Zone 2 to Zone 3 along Merrill Ave. $250,000 Other Core CIP - W No $0 2025 4 Service line replacements on South Alice, South Palm, West Godden and Alu St.$1,200,000 Other Core CIP - W No $0 2025 5 Main and service line replace; Bonnie View between Acacia and Eucalyptus $2,400,000 Other Core CIP - W No $0 2025 6 Mainline Valve Replacements $250,000 Other Core CIP - W No $0 2025 7 Cedar Reservoir 2, Overhaul, and Dome Preservation $1,000,000 Other Core CIP - W No $0 2026 8 4” South Oakdale and South Marcella between East Rialto Ave and Allen St $3,000,000 Other Core CIP - W No $0 2026 9 Mainline Valve Replacements $250,000 Other Core CIP - W No $0 2026 10 Mainline and Service Line, Hydrant Laterals, and Mainline Replacement Below Etiwanda between Lilac and Sycamore Streets: Cornell and Victoria
$2,500,000 Other Core CIP - W No $0 2027
11 Service Line Replacement, Hydrant Lateral for Woodcrest, Yucca, Miramonte, Arrowhead, and Althea
$1,300,000 Other Core CIP - W No $0 2027
12 Mainline Valve Replacements $250,000 Other Core CIP - W No $0 2027 13 Service Line Replacement between Cedar and Larch below Etiwanda on Streets Victoria, Cornell, Rosewood, Church, and Folk
$2,200,000 Other Core CIP - W No $0 2028
14 Service Line Replacement, Hydrant Laterals for Palm, Orange, Olive, Date Between Foothill to Train Tracks (Part 1)
$3,300,000 Other Core CIP - W No $0 2028
15 Mainline Valve Replacements $250,000 Other Core CIP - W No $0 2028 16 Subtotal RWS Defined Core Water Capital Projects $24,850,000 $0 $2,900,000 $3,800,000 $6,700,000 17 18 RWS Defined Special Water Capital Projects
19 AMI Project (Project Cost Excluding Grants) (2) $0 AMI No $0 2025 20 W-WW Security Upgrade Project $0 Other Special CIP - W No $0 2026 21 Install a arsenic treatment system at City Well 3A $2,200,000 Highest Priority - W Yes $2,200,000 $2,200,000 2027 22 Subtotal RWS Defined Special Water Capital Projects $2,200,000 $0 $2,200,000 $2,200,000 23 24 Total Water Capital Improvement Plan $27,050,000 $0 $2,900,000 $6,000,000 $8,900,000 01082024 Rialto Rate Model Draft
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REVENUE REQUIREMENT ANALYSIS - CAPITAL IMPROVEMENT PLAN TABLE A-7
City of Rialto - 2024 Water and Wastewater Rate Study
Capital Improvement Plan
Estimated CIP Category Dashboard Funded Funded Funded Total Remaining Year Remaining Cost Highest Priority per Input: Cost from Cost from Debt-FinancedFunded Cost Per RWS Line Wastewater Capital Projects FY 23/24 $ (1) City staff, 5/17/23 Funded?RUA Reserves DIFs Cost FY 23/24 $ Apr 2023 CIP 1 RWS Defined Core Wastewater Capital Projects
2 Sycamore Sewer Lift Station (2) Other Core CIP - WW No $0 2024 3 Sycamore Sewer Upsize 1 (3) $5,000,000 Highest Priority - WW Yes $5,000,000 2024 4 Acacia Sewer Upsize 1 $2,000,000 Highest Priority - WW Yes $2,000,000 2024 5 Digester No. 1 Activation & Digester No. 2 Rehabilitation $1,800,000 Highest Priority - WW Yes $1,800,000 2024 6 Rialto Biosolids Project $26,400,000 Highest Priority - WW Yes $26,400,000 2025 7 Agua Mansa Lift Station Upgrades $2,000,000 Highest Priority - WW Yes $2,000,000 2025 8 Spencer Blower Replacement $750,000 Other Core CIP - WW No $0 2025 9 Manhole R&R $200,000 Other Core CIP - WW No $0 2025
10 Acacia Sewer Upsize 2 $500,000 Other Core CIP - WW No $0 2025 11 Merrill Sewer Upsize $2,000,000 Other Core CIP - WW No $0 2026 12 P5 AB 1 & 2 Upgrades $600,000 Other Core CIP - WW No $0 2026 13 P5 SEC 1 & 2 Upgrades $500,000 Highest Priority - WW Yes $500,000 2026 14 Willow Sewer Upsize $500,000 Other Core CIP - WW No $0 2026 15 Sycamore Sewer Upsize 2 $1,500,000 Other Core CIP - WW No $0 2026 16 Manhole Rehabilitation $200,000 Other Core CIP - WW No $0 2027 17 Ayala Lift Station Upgrade & Repair $2,000,000 Highest Priority - WW Yes $2,000,000 2027 18 Manhole Rehabilitation $200,000 Other Core CIP - WW No $0 2027 19 Aged Sewer Main Replacement $1,200,000 Other Core CIP - WW No $0 2028 20 EQ Basin Rehabilitation $1,000,000 Other Core CIP - WW No $0 2028 21 Manhole Rehabilitation $200,000 Other Core CIP - WW No $0 2028 22 Aged Sewer Main Replacement $1,200,000 Other Core CIP - WW No $0 2028 23 Subtotal RWS Defined Core Wastewater Capital Projects $49,750,000 $39,700,000 24 25 RWS Defined Special Wastewater Capital Projects
26 Rialto Microgrid Project $20,000,000Microgrid and Related ProjectsNo $0 2024 27 Rialto WWTP P1 & P2 Demo $2,300,000Microgrid and Related ProjectsNo $0 2024 28 Rialto WWTP Electrical Upgrade for Microgrid $8,800,000 Highest Priority - WW Yes $8,800,000 2024 29 Rialto Habitat Nature Center $3,000,000Rialto Habitat Nature CenterYes $3,000,000 2024 30 Rialto Sewer LS SCADA Project $750,000 Other Special CIP - WW No $0 2024 31 Rialto WWTP Additional Disk Filter project $500,000 Other Special CIP - WW No $0 2024 32 WWTP Sewer LS Generator project $900,000 Other Special CIP - WW No $0 2025 33 AMI Project $0 Other Special CIP - WW No 2025
34 W-WW Security Upgrade Project $0 Other Special CIP - WW No 2027 35 Subtotal RWS Defined Special Wastewater Capital Projects $36,250,000 $11,800,000 36 37 Capitalized Construction Interest, Microgrid $2,721,000Microgrid and Related ProjectsNo $0 2024 38 39 Total Wastewater Capital Improvement Plan (4) $88,721,000 $10,000,000 $7,400,000 $34,100,000$51,500,000 Notes:
(1) Project cost shown excludes grant funds received by the City. (2) Funding for this project was identified prior to the time period covered by this Rate Study. (3) Project cost revised per City staff, 8/15/23, after receipt of $4.8M Engineer's Estimate. (4) Use of RUA reserves and DIF funds held in trust is not identified on a project-by-project basis for the wastewater system. 01082024 Rialto Rate Model Draft
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REVENUE REQUIREMENT ANALYSIS - PROJECTED DEBT SERVICE
TABLE A-8
City of Rialto - 2024 Water and Wastewater Rate Study
Projected Debt Service
1 WIFIA/I-Bank: Water
2 WIFIA Proceeds for Capital Projects, 2023 Dollars$6,000,000See Table A-7 3 4 WIFIA Proceeds for Capital Projects, Date of Construction$6,000,000No inflationary adjustment required if projects built within five-year period, per RWS. 5 Costs of Issuance $44,888
6 Capitalized Interest $0
7 Capitalized Bond Reserve $198,272
8 Bond Proceeds $6,243,160
9 12 Interest Rate 6.00%
13 Principal Deferral, Years 0
14 Annual Debt Service Payment $443,154
17 18 Projected Debt Service Payment
19 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 20 WIFIA/I-Bank Water Debt Service Payment $443,154 $443,154 $443,154 $443,154 $443,154 $443,154 $443,154 $443,154 21 42
43 WIFIA/I-Bank: Wastewater
44 WIFIA Proceeds for Capital Projects, 2023 Dollars$34,100,000See Table A-7 45 46 WIFIA Proceeds for Capital Projects, Date of Construction$34,100,000No inflationary adjustment required if projects built within five-year period, per RWS. 47 Costs of Issuance $255,112
48 Capitalized Interest $0
49 Capitalized Bond Reserve $1,126,848
50 Bond Proceeds $35,481,960
51 54 Interest Rate 6.00%
55 Principal Deferral, Years 0
56 Annual Debt Service Payment $2,676,671
59 60 Projected Debt Service Payment
61 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 FY 31/32 FY 32/33 62 WIFIA Water Debt Service Payment $2,676,671 $2,676,671 $2,676,671 $2,676,671 $2,676,671 $2,676,671 $2,676,671 01082024 Rialto Rate Model Draft
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2023 Water and Wastewater Rate Study – City of Rialto

A-1
01112024 RIALTO Rate Study Report DRAFT
Appendix B: Water Cost-of-Service Analysis

APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Cost-of-Service Analysis Tables: Functionalization
TABLE B-1
Water COSA - Functionalization Factors
Line Functionalization Wells & Rate Tier Public Fire Public & Priv. Math No. Factors Total Pumping Treatment Storage T&D Customer Meter Admin Calculation Protection Fire Prot. Check 1 Direct: Wells and Pumping 100.0% 95.0% 5.0% TRUE
2 Direct: Treatment 100.0% 100.0% TRUE
3 Direct: Storage w/ FP 100.0% 100.0% TRUE
4 Direct: T&D w/ FP 100.0% 100.0% TRUE
5 Direct: Customer 100.0% 100.0% TRUE
6 Direct: Meter 100.0% 100.0% TRUE
7 Direct: Admin 100.0% 100.0% TRUE
8 Direct: Rate Tier Calculation 100.0% 100.0% TRUE
9 Direct: Fire Protection 100.0% 100.0% TRUE
10 Direct: Wells, Treatment, Reservoirs 100.0% 33.3% 33.3% 33.3% TRUE 11 Direct: Water Plan 100.0% 20.0% 20.0% 20.0% 40.0% TRUE 12 Direct: T&D and Meter Equivalent 100.0% 50.0% 50.0% TRUE 13 Net Plant: % (1) 100.0% 15.7% 0.9% 28.0% 55.0% 0.0% 0.0% 0.0% 0.0% 0.4% 0.0% 100.0000% 14 2012 Capital Charge: % (2) 100.0% 12.5% 1.8% 4.4% 18.3% 1.2% 2.4% 59.4% 0.0% 0.1% 0.0% 100.0000% 15 WIFIA/I-Bank Debt Service 100.0% 0.0% 0.0% 0.0% 75.3% 0.0% 0.0% 0.0% 24.7% 0.0% 0.0% TRUE 19 Labor: % (3) 100.0% 12.4% 0.7% 22.1% 43.4% 21.0% 0.0% 0.0% 0.0% 0.3% 0.0% 100.0000% 20 Water Production (from Other Utilities), Amount $1,171,878 $1,171,878 $0 TRUE 21 Water Production (from Other Utilities), Amount 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% TRUE 22 Electricity, Percentage (4) 100.0% 13.4% 86.6% TRUE
23 Indirect: Per Rate Revenue Req Excl Tier $, as % 100.0% 12.5% 0.9% 15.9% 33.2% 5.4% 0.5% 31.5% 0.2% 0.0% 100.0000% Notes:
(1) Refer to Table B-2
(2) Refer to Table B-5
(3) Refer to Table B-13. Based on W-2 wage totals provided by City staff, 8/1/23. (4) Based on a review of SCE bills from 2022. Wells & Pumping are booster pumps. All other power costs are source production which goes into rate tier calculation.

TABLE B-2
Water COSA - Functionalization of Water System Plant
Table B-1
Line Wells & Rate Tier Public Fire Public & Priv. Line No.

No. Total Pumping Treatment Storage T&D Customer Meter Admin Calculation Protection Fire Prot. Reference 1 Source $8,591,128 8,161,572 429,556 0 0 0 0 0 0 0 0 1 2 Storage $14,590,178 0 0 14,590,178 0 0 0 0 0 0 0 3
3 Distribution $28,791,008 0 0 0 28,791,008 0 0 0 0 0 0 4 4 General/SCADA $184,611 61,537 61,537 61,537 0 0 0 0 0 0 0 10 5 Fire Hydrants $218,597 0 0 0 0 0 0 0 0 218,597 0 9
6 Total $52,375,522 $8,223,109 $491,093 $14,651,715 $28,791,008 $0 $0 $0 $0 $218,597 $0 7 As Percent 100.00% 15.70% 0.94% 27.97% 54.97% 0.00% 0.00% 0.00% 0.00% 0.42% 0.00% Source: Asset data provided by City staff, 7/17/23. Data as of 6/30/23. 01082024 Rialto Rate Model DraftB1-B6 FG Solutions, LLC Copyright 2024 All Rights Reservved
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No. Capital Project FY 27/28 $ Pumping Treatment Storage T&D Customer Meter Admin Calculation Protection Fire Prot. 1 Aged Watermain Replacement Etiwanda from Riverside to Eucalyptus (Pavement Project)$6,700,000 100.0% 2 Pressure Relief Valves (PRVs) Zone 2 to Zone 3 along Merrill Ave.$0 100.0% 3 Service line replacements on South Alice, South Palm, West Godden and Alu St.$0 100.0% 4 Main and service line replace; Bonnie View between Acacia and Eucalyptus$0 50.0% 50.0% 5 Mainline Valve Replacements $0 100.0%
6 Cedar Reservoir 2, Overhaul, and Dome Preservation $0 100.0% 7 4” South Oakdale and South Marcella between East Rialto Ave and Allen St$0 100.0% 8 Mainline Valve Replacements $0 100.0%
9 Mainline and Service Line, Hydrant Laterals, and Mainline Replacement Below Etiwanda between Lilac and Sycamore Streets: Cornell and Victoria$0 50.0% 25.0% 25.0% 10 Service Line Replacement, Hydrant Lateral for Woodcrest, Yucca, Miramonte, Arrowhead, and Althea$0 50.0% 25.0% 25.0% 11 Mainline Valve Replacements $0 100.0%
12 Service Line Replacement between Cedar and Larch below Etiwanda on Streets Victoria, Cornell, Rosewood, Church, and Folk$0 50.0% 25.0% 25.0% 13 Service Line Replacement, Hydrant Laterals for Palm, Orange, Olive, Date Between Foothill to Train Tracks (Part 1)$0 50.0% 25.0% 25.0% 14 Mainline Valve Replacements $0 100.0%
15 AMI Project (Project Cost Excluding Grants) (2) $0 50.0% 50.0% 16 W-WW Security Upgrade Project $0 75.0% 25.0%
17 Install a arsenic treatment system at City Well 3A $2,200,000 100.0% 18 Total $8,900,000
TABLE B-4
Water COSA - Functionalization of CIP Projects by Dollar Line FY 23/24 - Wells & Rate Tier Public Fire Public & Priv.

No. Capital Project FY 27/28 $ Pumping Treatment Storage T&D Customer Meter Admin Calculation Protection Fire Prot. 1 Aged Watermain Replacement Etiwanda from Riverside to Eucalyptus (Pavement Project)$6,700,000 $0 $0 $0 $6,700,000 $0 $0 $0 $0 $0 $0 2 Pressure Relief Valves (PRVs) Zone 2 to Zone 3 along Merrill Ave.$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 Service line replacements on South Alice, South Palm, West Godden and Alu St.$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4 Main and service line replace; Bonnie View between Acacia and Eucalyptus$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 Mainline Valve Replacements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6 Cedar Reservoir 2, Overhaul, and Dome Preservation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 7 4” South Oakdale and South Marcella between East Rialto Ave and Allen St$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 8 Mainline Valve Replacements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 9 Mainline and Service Line, Hydrant Laterals, and Mainline Replacement Below Etiwanda between Lilac and Sycamore Streets: Cornell and Victoria$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 10 Service Line Replacement, Hydrant Lateral for Woodcrest, Yucca, Miramonte, Arrowhead, and Althea$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 11 Mainline Valve Replacements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 12 Service Line Replacement between Cedar and Larch below Etiwanda on Streets Victoria, Cornell, Rosewood, Church, and Folk$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 13 Service Line Replacement, Hydrant Laterals for Palm, Orange, Olive, Date Between Foothill to Train Tracks (Part 1)$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 14 Mainline Valve Replacements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 15 AMI Project (Project Cost Excluding Grants) (2) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 16 W-WW Security Upgrade Project $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 17 Install a arsenic treatment system at City Well 3A$2,200,000 $0 $0 $0 $0 $0 $0 $0 $2,200,000 $0 $0 18 Total $8,900,000 $0 $0 $0 $6,700,000 $0 $0 $0 $2,200,000 $0 $0 As Percent 0.00% 0.00% 0.00% 75.28% 0.00% 0.00% 0.00% 24.72% 0.00% 0.00% 01082024 Rialto Rate Model DraftB1-B6 FG Solutions, LLC Copyright 2024 All Rights Reservved
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Cost-of-Service Analysis Tables: Functionalization
TABLE B-5
Water COSA - Functionalization of Existing Capital Charge Line
No. Component of Concession Funding
Total
Capitalized
Amount (1)
(2)
Wells &
Pumping Treatment Storage T&D Customer Meter Admin
Rate Tier
Calculation
Public Fire
Protection
Public and
Private Fire
Protection Total
1 Water Capital Projects
2 SCADA Improvements $1,820,618 33% 33% 33% 100%
3 Chino Well 1 Nitrate Blending $0 100% 100%
4 Booster 3 Improvements $0 100% 100%
5 Booster 4/5 Improvements $704,043 100% 100%
6 Seismic Improvements $137,807 100% 100%
7 City Well 1/2 Improvements $1,690,246 100% 100%
8 Water Main and Valve Replacement on W. Baseline$243,355 100% 100% 9 Meter Replacement $825,622 100% 100%
10 Service Line Replacement $25,500 100% 100%
11 Small Main Replacement $1,262,960 100% 100%
12 Dead End Line Replacement $198,300 100% 100%
13 Large Valves $203,341 100% 100%
14 Hydrant Replacement $23,500 100% 100%
15 Studies (3) $67,558 20.0% 20.0% 20.0% 40.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100% 16 Rialto Well 2 Site Rehab $61,243 100% 100%
17 CIS Software Update $413,000 100% 100%
18 Willow Booster Value Replacement $319,800 100% 100%
19 Riverside Central Water Line Improvements $2,982,691 100% 100% 20 City Well 4A and Chino Well 2 Improvements $684,305 100% 100% 21 Remaining FIP $1,307,112 30.9% 5.7% 6.9% 44.8% 3.8% 7.8% 0.0% 0.0% 0.2% 0.0% 100% 22 Rate Stabilization Fund $10,479,000 100% 100%
23 Lease Payment $5,000,000 100% 100%
24 Refinance Existing Debt $3,322,000 15.7% 0.9% 28.0% 55.0% 0.0% 0.0% 0.0% 0.0% 0.4% 0.0% 100% 25 Trustee Reserves (3) $5,678,000 100% 100%
26 Debt Service Reserves $1,340,000 12.5% 1.8% 4.4% 18.3% 1.2% 2.4% 59.4% 0.0% 0.1% 0.0% 100% 27 Due Dilligence/Transition Costs (4) $2,648,000 100% 100% 28 Costs of Issuance (5) $2,165,000 12.5% 1.8% 4.4% 18.3% 1.2% 2.4% 59.4% 0.0% 0.1% 0.0% 100% 29 Total $43,603,000 $5,443,407 $788,796 $1,933,157 $7,969,885 $502,566 $1,035,702 $25,885,815 $0 $43,673 $0 30 As Percent 12.5% 1.8% 4.4% 18.3% 1.2% 2.4% 59.4% 0.0% 0.1% 0.0% Notes:
(1) Source: Staff report to March 12, 2012 Council Meeting, Table 2, except Capital Improvements, described in Note 2. (2) Capital Project funding per City's 2023 analysis of Facility Improvement Plan actual spending. FIP spending presented at 4/11/23 Council Meeting.

FIP spending is $35,000 higher than shown in the 2012 Staff Report. (3) Consists of Working Capital, Operating R&R account capitalization, and a reserve held by the Trustee. (4) Includes Technical, Due Diligence, and Commercial Development Costs, and Transition Costs (5) Includes development and financing costs of issuance, underwriter's discount 01082024 Rialto Rate Model DraftB1-B6 FG Solutions, LLC Copyright 2024 All Rights Reservved
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Cost-of-Service Analysis Tables: Functionalization
TABLE B-6
Water COSA - Functionalization of Rate Revenue Requirement Functionalized Amount Table B-1
Line FY 23/24 Rate Tier Public Fire Public & Priv. Line No.

No. Total (1) Pumping Treatment Storage T&D Customer Meter Admin Calculation Protection Fire Prot. Reference 1 Waterfall 1: Water Service Fee
2 Fixed Component $2,782,235 $436,819 $26,087 $778,312 $1,529,405 $0 $0 $0 $0 $11,612 $0 13 3 Routine R&R Component $275,249 43,215 2,581 76,999 151,306 0 0 0 0 1,149 0 13 4 Chemical Component $63,096 0 0 0 0 0 0 0 63,096 0 0 8 5 Labor Component $3,533,470 438,448 26,185 781,215 1,535,108 740,859 0 0 0 11,655 0 19 6 Waterfall 1: Reimbursements
7 Insurance Reimbursement $869,512 136,516 8,153 243,240 477,974 0 0 0 0 3,629 0 13 8 Independent Engineer $109,296 13,645 1,977 4,846 19,977 1,260 2,596 64,886 0 109 0 14 9 Maintenance $221,300 34,745 2,075 61,907 121,649 0 0 0 0 924 0 13 10 Waterfall 1: Retained RUA Expenses
11 Electricity $1,540,932 207,013 0 0 0 0 0 0 1,333,919 0 0 22 12 Perchlorate, Not Combined Remedy $87,300 0 0 0 0 0 0 0 87,300 0 0 8 13 City Contract (Transfer to General Fund) $479,023 0 0 0 0 0 0 479,023 0 0 0 7 14 Water Purchase $1,171,878 0 0 0 0 0 0 0 1,171,878 0 0 21 16 IT Services $66,395 0 0 0 0 0 0 66,395 0 0 0 7
17 City Reimbursement (680 Admin) $799,560 0 0 0 0 0 0 799,560 0 0 0 7 18 Consulting Fees: Engineering $235,935 0 0 0 0 0 0 235,935 0 0 0 7 19 Consulting Services $330,050 0 0 0 0 0 0 330,050 0 0 0 7 20 Miscellaneous Fees and Permits $291,792 0 0 0 0 0 0 291,792 0 0 0 7 21 Rebates $50,000 0 0 0 0 0 0 0 50,000 0 0 8
22 Waterfall 2: Annual Operating R&R Payment $680,000 106,762 6,376 190,226 373,798 0 0 0 0 2,838 0 13 23 Waterfall 3: Capital Charges
24 Amount $2,900,000 362,037 52,462 128,573 530,071 33,425 68,884 1,721,644 0 2,905 0 14 26 Future Debt Service 0 0 0 0 0 0 0 0 0 0 0 14
27 SRF Loan Debt Service 0 0 0 0 0 0 0 0 0 0 0 14
28 RWS Capital Charges 0 0 0 0 0 0 0 0 0 0 0 14
29 Waterfall 4: RWS Water Reserve Account Deposits $272,119 0 0 0 0 0 0 272,119 0 0 0 7 30 Waterfall 5: RUA Lease Payment $400,000 0 0 0 0 0 0 400,000 0 0 0 7 31 RUA Spending Not Through Waterfall
32 Less Water Rights Revenue From SBCO (332,264) (41,375) (2,928) (52,680) (110,212) (18,035) (1,662) (104,563) (810) 0 23 33 Less Grant Revenue (165,025) 0 0 0 0 0 0 (165,025) 0 0 0 7 34 Less Certain Non-Rate Revenues Applied to Tiers 1 and 2 35 RUA Investment Income 0 0 0 0 0 0 0 0 0 0 0 8
36 Rents & Concessions (83,000) 0 0 0 0 0 0 0 (83,000) 0 0 8 37 Trustee Interest Income (60,000) 0 0 0 0 0 0 0 (60,000) 0 0 8 38 Turn On/Off (50,750) 0 0 0 0 0 0 0 (50,750) 0 0 8
39 Other Charges for Current Services…mostly perchlorate reimb. Should go to whatever tier SBCO is in IS THIS STILL TRUE?(147,592) 0 0 0 0 0 0 0 (147,592) 0 0 8 40 Miscellaneous Revenues (49,300) 0 0 0 0 0 0 0 (49,300) 0 0 8 41 Less Revenue Stabilization and Changes in Reserves (2,434,789) (303,191) (21,454) (386,030) (807,617) (132,160) (12,181) (766,223) (5,934) 0 23 42 Total $13,836,423 $1,434,634 $101,514 $1,826,608 $3,821,459 $625,349 $57,637 $3,625,593 $2,315,551 $28,077 $0 43 44 Math Check: Columns = Total $1
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Cost-of-Service Analysis Tables: Allocation
TABLE B-7
Water COSA - Allocation Factors
Public Public
Line Extra Capacity Customer Rate Tier Fire Private Fire No. Classification Method Base Max Day Max Hour Customer Meter CalculationProtectionProtection 1 Direct: Base 100% Direct: Base
2 Direct: Max Day 100% Direct: Max Day
3 Direct: Max Hour 100% Direct: Max Hour
4 Direct: Customer 100% Direct: Customer
5 Direct: Meters & Services 100% Direct: Meters & Services 6 Direct: Rate Tier Calculation 100% Direct: Rate Tier Calculation 7 Direct: Public Fire Protection 100% Direct: Fire Protection 8 Direct: Purchased Source (1) 50% 50% Direct: Purchased Source 9 Base and Max Day (gpm) (1) 5,483 4,049
10 Base and Max Day: % 57.52% 42.48% Base and Max Day
11 Weighted Average: % 24.04% 30.76% 14.28% 7.92% 0.73% 0.00% 0.36% 21.92% Weighted Avg ex Rate Tier 12 Base, Max Day, Max Hour (gpm) (1)5,483 4,049 9,533
13 Base, Max Day, Max Hour: % 28.76% 21.24% 50.00% Base, Max Day, Max Hour 14 Storage (2) 20.04% 71.01% 8.95% Storage
15 Transmission and Distribution (3) 16.97% 12.53% 29.50% 41.00% Transmission and Distribution Notes:
(1) Refer to Table B-11 for further details. Based on actual production data from FY 15/16 provided by RWS to FG Solutions in December 2016. (2) Refer to Table B-11 for further details
(3) 40% allocated to fire protection, remaining 60% allocated based on the Base, Max Day, and Max Hour classification factor 01082024 Rialto Rate Model Draft
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
TABLE B-8
Water COSA - Allocation of Rate Revenue Requirement
Rate Tier Public Public & T COS-6
Line FY 23/24 Extra Capacity Calculation Fire Private Fire Line No.

No. Test Year Base Max Day (2)Max Hour(2) Customer Meter (2) ProtectionProtectionReference 1 Water System Expenses (1)
1 Pumping $1,434,634 $825,217 $609,417 $0 $0 $0 $0 $0 $0 10 2 Treatment $101,514 $58,392 $43,122 $0 $0 $0 $0 $0 $0 10 3 Storage $1,826,608 $365,984$1,297,099 $0 $0 $0 $0 $0 $163,525 14 4 T&D $3,821,459 $648,453 $478,877$1,127,330 $0 $0 $0 $0 $1,566,798 15 5 Customer $625,349 $0 $0 $0 $625,349 $0 $0 $0 $0 4
6 Meter $57,637 $0 $0 $0 $0 $57,637 $0 $0 $0 5
7 Administration $3,625,593 $871,602$1,115,199 $517,682 $287,167 $26,468 $0 $12,893 $794,582 11 8 Rate Tier Calculations$2,315,551 $0 $0 $0 $0 $0 $2,315,551 $0 $0 6 9 Public Fire Protection $28,077 $0 $0 $0 $0 $0 $0 $28,077 $0 7 10 11
12 Total $13,836,422$2,769,648$3,543,714$1,645,012 $912,516 $84,105 $2,315,551 $40,970 $2,524,905 13 Percent of Total 100% 20% 26% 12% 7% 1% 17% 0% 18%
14 Check, Table B-5 $13,836,423
15 Rate Tier Public Public Private
16 Calculation Fire Fire Fire
17 Base Max Day (2)Max Hour(2) Customer Meter (2) ProtectionProtectionProtection 18 Redistribution of FP $2,145,741 $379,164
19 Total $13,836,421$2,769,648$3,543,714$1,645,012 $912,516 $84,105 $2,315,551 $40,970 $2,145,741 $379,164 Notes:
(1) Refer to Table B-5 for Functionalization totals.
(2) Peaking costs associated with Max-Day and Max-Hour extra capacity are also included in the Rate Tier Calculation in Table C1.

Extra Capacity Customer
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
TABLE B-9
Water COSA - Distribution of Revenue Requirement
Rate Tier Public Private
Line Extra Capacity Customer Calculation Fire Fire
No. Item Base (1) Max Day (2)Max Hour (2)Customer Meter (3) ProtectionProtection Total 1 Total System
2 Cost of Service $2,769,648$3,543,714$1,645,012 $912,516 $84,105 $2,315,551 $2,186,711 $379,164 $13,836,422 3 Units of Service 3,539,451 10,367 20,735 11,750 15,452 3,538,638 14,164 4 Units ccf gpm gpm customers meter equiv. ccf meter equiv. equiv. fire 5 base units of service should be based on metered consumption not production except connections 6 landscape &per year (2)
7 hydrants
8 Unit Cost of Service $0.78 $341.81 $79.34 $77.66 $5.44 $0.65 $154.38 9 10 Single Family Residential and MF < 50 Units
11 Units of service 2,238,017 6,563 13,126 10,254 10,762 2,238,017 10,762 0 12 Allocated Cost of Service $1,751,266$2,243,351$1,041,376 $796,335 $58,577 $1,464,474 $1,661,455 $0 $9,016,834 13 14 Multiple Apartments > 50 Units
15 Units of service 252,835 835 1,669 444 1,216 252,835 1,216 0 16 Allocated Cost of Service $197,845 $285,310 $132,443 $34,481 $6,619 $165,446 $187,728 $0 $1,009,872 17 18 Commercial, Industrial, and Governmental
19 Units of service 470,338 1,250 2,500 682 2,186 470,338 2,186 0 20 Allocated Cost of Service $368,043 $427,180 $198,300 $52,965 $11,900 $307,771 $337,528 $0 $1,703,688 21 2,708,355
22 Landscape
23 Units of service 540,178 1,657 3,314 370 1,288 540,178 0 0 24 Allocated Cost of Service $422,693 $566,300 $262,880 $28,735 $7,009 $353,472 $0 $0 $1,641,089 25 26 Private Fire Protection (Excludes Hydrant and Hydrant No Charge Connection) 27 Units of service 813 2 4
28 Allocated Cost of Service $636 $641 $298 $0 $0 $0 $0 $379,164 $380,739 29 30
31 Hydrant
32 Units of service 37,270 61 122 37,270
33 Allocated Cost of Service $29,164 $20,931 $9,716 $0 $0 $24,388 $0 $84,200 34 35 Total:
36 Units of service 3,539,451 10,367 20,735 11,750 15,452 3,538,638 14,164 0 37 Allocated Cost of Service $2,769,648$3,543,714$1,645,012 $912,516 $84,105 $2,315,551 $2,186,711 $379,164 $13,836,421 math check Table B-5 Above ==>$13,836,423
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
TABLE B-10
City of Rialto - 2024 Water and Wastewater Rate Study
Identification of Costs to be Included in Rate Tier Calculations Step 1. Identify Costs Included in Rate Tier Calculations Projected
FY 23/24
Cost Included in Rate Tier Calculations Amount How Considered in Rate Tier Costs 1 Chemical Component of RWS Service Fee $63,096 All of Rialto's wells using chlorine, based on production volume. 2 SCE Energy Direct Bills $1,333,919 Direct allocation to specific wells, based on review of electric bills 3 Perchlorate, Not Combined Remedy $87,300 Direct allocation to Rialto 3 and Chino 2 wells 4 5 Water Production from Other Utilities
6 Water Production, Roemer WWTP $671,129 Direct Allocation to Roemer WTP 7 Water Production, BLF Wells, $ $500,749 Direct allocation to BLF Wells 8 Rebates $50,000 Direct allocation to Tier 3
9 Less Certain Non-Rate Revenues
10 Rents & Concessions ($83,000) Direct Allocation to Tiers 1 and 2 11 Trustee Interest Income ($60,000) Direct Allocation to Tiers 1 and 2 12 Turn On/Off ($50,750) Direct Allocation to Tiers 1 and 2 13 Other Charges for Current Services…mostly perchlorate reimb. Should go to whatever tier SBCO is in IS THIS STILL TRUE?($147,592) Direct Allocation to Tiers 1 and 2 14 Miscellaneous Revenues ($49,300) Direct Allocation to Tiers 1 and 2 15 Water Rebates $0 Direct allocation to third (top) tier 16 Total $2,315,551
17 18
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
TABLE B-10
City of Rialto - 2024 Water and Wastewater Rate Study
Identification of Costs to be Included in Rate Tier Calculations 19 Step 2. Summarize Water Production Data
20 Step 2a. Show Data from Multiple Sources
21 22 Production, Acre-Feet
23 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Total 24 Source: RWS Monthly Operations Reports, in a table titled "Daily Production Totals in Acre Feet" 25 Chino 2 0.00 101.92 152.06 153.50 116.29 77.75 136.86 162.22 154.26 160.87 155.38 160.94 1,532.05 26 City 2 161.03 73.20 81.98 75.68 78.78 171.99 135.88 159.32 134.76 144.60 42.25 13.70 1,273.17 27 Rialto 3 (1) 52.68 0.00 0.00 31.52 32.94 18.64 0.00 0.00 0.00 0.00 0.00 0.00 135.78 28 Rialto 5 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 29 Miro 3 (1) 30.28 117.62 106.76 69.30 149.74 207.06 240.13 215.36 162.20 232.15 210.72 235.06 1,976.38 30 City 4A (2) (3) 128.54 133.24 122.74 144.79 213.73 250.82 258.21 243.88 235.07 0.00 0.25 2.27 1,733.54 31 Booster 6-9 115.58 116.82 90.03 117.21 238.02 163.49 200.97 171.98 105.48 90.97 98.20 108.95 1,617.70 32 Cactus (2) (5) 126.12 195.34 154.65 140.60 81.74 129.89 125.84 137.95 260.15 75.89 63.43 29.43 1,521.03 33 Roemer (4) 44.60 40.30 68.40 74.06 76.15 71.42 70.99 32.94 55.79 88.30 82.77 82.45 788.17 34 Total 530.29 645.20 653.88 661.87 773.66 840.24 910.67 879.77 872.64 792.78 652.75 630.53 8,845.28 35 Peak Day 30.13 89.38 32.46 35.07 29.79 37.66 40.79 42.13 39.76 32.25 34.38 25.69 36 Date of Peak Day1/10/22 2/17/22 3/29/22 4/9/22 5/17/22 6/22/22 7/24/22 8/23/22 9/14/22 10/15/22 11/2/22 12/28/23 37 Source: RWS Monthly Operations Reports, in the narrative preceding the table titled "Daily Production Totals in Acre Feet" 38 BLF Wells 113.16 178.92 121.94 113.02 106.03 42.56 68.60 66.05 130.56 166.86 161.38 136.11 1,405.19 39 Booster 3A-1 0.04 0.00 80.27 154.40 72.75 5.63 14.68 31.13 23.38 9.05 9.19 23.19 423.71 40 41 Step 2b. Merge Data from Multiple Sources
42 Chino 2 0.00 101.92 152.06 153.50 116.29 77.75 136.86 162.22 154.26 160.87 155.38 160.94 1,532.05 43 City 2 161.03 73.20 81.98 75.68 78.78 171.99 135.88 159.32 134.76 144.60 42.25 13.70 1,273.17 44 Rialto 3/Miro 3 82.96 117.62 106.76 100.82 182.68 225.70 240.13 215.36 162.20 232.15 210.72 235.06 2,112.16 45 Rialto 5 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 46 City 4A 128.54 133.24 122.74 144.79 213.73 250.82 258.21 243.88 235.07 0.00 0.25 2.27 1,733.54 47 BLF Wells 113.16 178.92 121.94 113.02 106.03 42.56 68.60 66.05 130.56 166.86 161.38 136.11 1,405.19 48 Roemer 44.60 40.30 68.40 74.06 76.15 71.42 70.99 32.94 55.79 88.30 82.77 82.45 788.17 49 Total 530.29 645.20 653.88 661.87 773.66 840.24 910.67 879.77 872.64 792.78 652.75 630.53 8,844.28 50 Notes:
51 (1) Rialto 3 and Miro 3 wells are at the airport. For purposes of rate tier calculations, the production and the costs for these two wells should be combined. 52 San Bernardino County owns the Miro 3 well and pays for everything except power and normal wear and tear. 53 (2) Cactus total includes City 4A. The total column at the right of the table includes Cactus, and does not include City 4A. 54 (3) Pump Station 3A-1 boosts City Well 4A water into the Baseline Feeder. The cost to produce water from City 4A includes costs from PS 3A-1, but does not include the volume 55 of water pumped from 3A-1.
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APPENDIX B: WATER COST-OF-SERVICE ANALYSIS
TABLE B-10
City of Rialto - 2024 Water and Wastewater Rate Study
Identification of Costs to be Included in Rate Tier Calculations 57 Step 3. Allocate Certain Rate Tier Costs to Specific Water Sources 58 Cactus and
59 Miro 3/ BPS 3A-1
60 Cost Chino 2 City 2 Rialto 3 Rialto 5 City 4A Encanto BLF Wells Roemer Total Note 61 RWS Chemical Component, % 23.0% 19.1% 31.8% 0.0% 26.1% 100.0% 1 62 RWS Chemical Component, $ $14,534 $12,078 $20,038 $0 $16,446 $0 $0 $0 $63,096 1 63 Perchlorate Treatment, $ $87,300 $87,300 2
64 SCE Electricity Direct Billed, $ $506,375 $236,170 $215,461 $63,432 $311,418 $0 $1,332,856 65 Water Production, BLF Wells, $ $500,749 $500,749
66 Water Production, Roemer WTP, $ $671,129 $671,129
67 Total $608,209 $248,248 $235,499 $63,432 $327,864 $0 $500,749 $671,129$2,655,130 68 math check: total from Step 1 less items that are directly added to top tier commodity charge or subtracted from bottom tier.$2,656,193 69 70 Notes:
71 (1) Allocated among all Rialto wells using chlorine, based on production volume. 72 (2) This is related to Chino 2. This is the perchlorate expense not related to the Combined Remedy. 73 74
75 Step 4. Unit Cost Calculations for Each Water Source 76 77 Miro 3/
78 Chino 2 City 2 Rialto 3 Rialto 5 City 4A Encanto BLF Wells Roemer Total 79 Cost Allocated to Each Source $608,209 $248,248 $235,499 $63,432 $327,864 $0 $500,749 $671,129$2,655,130 80 Production, acre-feet 1,532.05 1,273.17 2,112.16 0.37 1,733.54 1,319.24 788.17 8,758.70 81 Production, ccf 667,361 554,593 920,057 161 755,130 0 574,663 343,327 3,815,291 82 % Adj to Match Projected Water Sales -7.23% -7.23% -7.23% -7.23% -7.23% -7.23% -7.23% -7.23% -7.23% 83 Adjusted Production 619,112 514,497 853,538 150 700,535 0 533,115 318,505 3,539,451 84 Cost per ccf $0.98 $0.48 $0.28 $424.24 $0.47 $0.94 $2.11 $0.75 85 86 Notes regarding unit costs, per a conversation with Tom Crowley 11/9/23, asking if these unit costs are reasonable:
87 Chino 2 unit cost is higher than average. Chino is a deeper well, and it has treatment. So well pump has to overcome head loss in the treatment unit. 88 City Well 2 is not as deep.
89 Rialto 5 power expense is incurred only to collect water samples for water quality testing. The power expense is SCE's demand charge. 90 Baseline Feeder deliveries from San Bernardino Municipal Water Department from City staff, 11/09/2023. 01082024 Rialto Rate Model Draft
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APPENDIX B: WATER AND WASTEWATER SUPPORTING CALCULATIONS TABLE B-11
City of Rialto - 2024 Water and Wastewater Rate Study
Water and Wastewater Supporting Calculations
1 1. CY 2022 Labor Costs (Water and Wastewater)
2 3 W2 Labor by Categories
4 Source: Labor Reset Data provided by City staff, 8/1/23 5 CY 22 Reallocate Reallocate
6 Amount Admin. Subtotal WW AdminSubtotal Function
7 Wastewater Treatment $1,048,029 $208,818$1,256,847 $337,826$1,594,673WW Treatment 8 Wastewater Collection $352,419 $70,219 $422,638 $113,600 $536,238WW Collection 9 Water Operations $1,361,988 $271,374$1,633,362 $1,633,362W, Split by Plant 10 Customer Service $516,179 $102,848 $619,027 $619,02770% Water, to Customer; 30% Wastewater to Customer 11 WW Administration $376,425 $75,002 $451,427 ($451,427) $0 12 Administration $728,261 ($728,261) $0 $0
13 Total $4,383,301 $0 $4,383,301 $0 $4,383,301
14 15
16 2. IEUA Well O&M Costs, 4/year (Wastewater)
17 18 O&M $50,000
19 Depreciation $62,500
20 Power Cost $245,000
21 22 Source: City staff, approximately September 2023
23 24
25 3. CY 22 Average, Max Day, and Max Hour Demand
26 27 Average Day Demand (See Table B10)
28 Acre Feet per Year 8,845.28CY 22
29 Acre Feet per Day 24.23
30 Million Gallons per Day 7.90
31 Gallons per Minute 5,483
32 ccf per year 3,853,004
33 Maximum Day Demand
34 Acre Feet 42.13 44,796.00
35 Gallons per Minute 9,533
36 Maximum Day/Average Day Ratio 1.74
37 38 Note: Page 3-4, 2013 Water Master Plan "peak day of record was approximately twice the average daily water use" 39 This may show that conservation since 2013 has shaved the peak 40 01082024 Rialto Rate Model Draft
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APPENDIX B: WATER AND WASTEWATER SUPPORTING CALCULATIONS TABLE B-11
City of Rialto - 2024 Water and Wastewater Rate Study
Water and Wastewater Supporting Calculations
41 Peak Hourly Demand
42 The City of Rialto SCADA system doesn't have the ability to permit accurate calculation of the peak hourly water demand in the system. 43 Our experience with other, similar water systems is that the peak hourly demand in water systems is typically approximately 44 twice the peak daily demand (i.e. four times the average daily demand). 45 Page 3-5, 2013 Water Master Plan
46 Max Hour/Max Day Ratio 2.0
47 Max Hour Demand, Gallons Per Minute 19,066
48 49 4. Fire Protection Equivalents
50 Projected
51 Projected FY 23/24
52 FY 23/24 Private
53 Public Fire Svc Number of Equivalent Fire
54 Connection Demand ConnectionsConnections Total Protection Connections 55 Size (in) Factor (1) (2) (3) Connections Public Private Total 56 0.75 1.00 0 0 0 0 0
57 1 1.00 0 0 0 0 0
58 1.5 2.90 0 0 0 0 0
59 2 6.19 0 0 0 0 0
60 3 17.98 0 3 3 0 54 54
61 4 38.32 0 14 14 0 536 536
62 6 111.31 1,500 88 1,588 166,966 9,795 176,762
63 8 237.21 0 77 77 0 18,265 18,265
64 10 426.58 0 2 2 0 853 853
65 12 689.04 0 0 0 0 0
66 Total 1,500 184 1,684 166,966 29,504 196,470
67 % of Total 84.98% 15.02%
68 Notes:
69 (1) AWWA M1, page 152 (5th edition page 224; demand factor = diameter ^ 2.63; exponent based on 70 Hazen-Williams equation for flow through pressure conduits. 71 (2) Source: City of Rialto GIS data. Assume all hydrants on 6" service lines. 72 (3) Source: customer data from December 2022. See Table C-1. 73 (4) Hydrant connections assumed to be 6".
74 75
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APPENDIX B: WATER AND WASTEWATER SUPPORTING CALCULATIONS TABLE B-11
City of Rialto - 2024 Water and Wastewater Rate Study
Water and Wastewater Supporting Calculations
76 5. Calculation: Fire Protection Demand (1), and Fire Protection Allocation for Supply, Storage, and T&D 77 Fire Demand (gpm) = 1020*sqrt(population) / (1-0.01*sqrt(population)) 78 where population is in thousands
79 Fire Protection Allocation = Fire Demand /(Fire Demand + Maximum Daily Demand) 80 81 Population for Rialto's Water Service Area = 54,453 (2) 82 Fire Demand (gpm) = 6,971
83 Average Daily Demand (mgd) = 7.90 (3)
84 Ratio of Peak Day to Average Daily Demand = 1.7 (3) 85 Maximum Daily Demand (mgd) = 13.73
86 Maximum Daily Demand (gpm) = 9,533
87 Therefore, Fire Protection Allocation = 42%
88 89 Fire Protection Allocation for COS42%
90 Calculation notes:
91 (1) Calculation based on AWWA M1 6th edition, page 143. Calculation published by the American Insurance Association, 92 formerly National Fire Underwriters Association.
93 (2) Source: Final Draft, 2015 San Bernardino Valley Regional Urban Water Management Plan, page 14-3, for 2015 94 (3) See calculation above in this worksheet
95 96 6. Allocation of Storage to Average Day, Peak Day, and Fire Flow Components 97 Operating
98 Overflow Zones Diameter, Height, Storage, ft Operating Useable 99 Reservoir MG Elevation, ft Served feet feet in ReservoirStorage, mgStorage, mg 100Cedar 1 6.00 1565 1A, 1B, 1C 186.00 30.00 4.00 0.80 5.20 101Cedar 2 6.00 1565 1A, 1B, 1C 186.00 30.00 4.00 0.80 5.20 102Highland 5.00 1417 2 174.00 28.00 4.00 0.71 4.29
103Easton 5.00 1417 2 174.00 28.00 4.00 0.71 4.29
104Cactus 6.00 1370 3A, 3B 215.00 24.00 4.00 1.00 5.00
105Total 28.00 4.03 23.97
106
107Notes:
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APPENDIX B: WATER AND WASTEWATER SUPPORTING CALCULATIONS TABLE B-11
City of Rialto - 2024 Water and Wastewater Rate Study
Water and Wastewater Supporting Calculations
108(1) Source of MG, Overflow Elevation, Zones Served, Diameter, Height: 2013 Water Master Plan, page 2-5 109
110 Peak Day Fire Flow
111 Demand Requirement
112Zone mg mg (2)
1131A, 1B, 1C Note 1 0.63
1142 Note 1 0.63
1153A, 3B Note 1 0.54
116Total 13.73 1.80
117
118Notes:
119(1) Peak day demands are based on a peak day/average day ratio of 1.74 (see above calculations on this worksheet) 120(2) Fireflow demands per zone based on SFR criteria of 1,500 gpm for 2 hours; commercial/MFR criteria of 3,000 gpm for 3 hours; 121 and light industry criteria of 3,500 gpm for 3 hours (2012 Water Master Plan, Table 3-8) 122 Fire flow requirement for Zones 3A and 3B based on the commercial/MFR criteria. For other zones, based on the light industry criteria. 123
124Storage Cost Classification Avg Day Peak Day
125Function of Reservoir Volume (1) MG Demand Demand Fireflow Total 126Storage for Peak Day Demand 13.73 100% 100%
127Fire Flow Storage 1.80 100% 100%
128Operational Storage 4.03 100% 100%
129Remainder (2) 8.44 20.60% 70.20% 9.20% 100%
130Total 28.00 20.60% 70.20% 9.20% 100.00%
131
132Notes:
133(1) Criteria in Master Plan is that storage volume exceeds peak day demand plus fire flow storage. It is assumed that storage volume must 134 also exceed peak day plus fire flow plus operational storage. 135(2) Remainder of storage allocated indirectly based on the classification of the other storage components 136
137
1387. Average Metered Consumption per Residential Account, CY 22 139
140Total metered consumption per residential account (Customer Type = RE) 141Bill Code W00 (metered water consumption) 1,999,896Source: Billing data compiled by FG Solutions. Source: Veolia, 6/5/23 142Number of meter reads 126,610Source: Billing data compiled by FG Solutions. Source: Veolia, 6/5/23 143Metered consumption per residential account, ccf/mo15.80 01082024 Rialto Rate Model Draft
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2023 Water and Wastewater Rate Study – City of Rialto

A-1
01112024 RIALTO Rate Study Report DRAFT
Appendix C: Water Rate Design

APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
Step 1. Estimated Calendar Year 2022 Number of Customers by Customer Class and Meter Size 1 Single Family Residential and Multi-Family < 50 Units 2 July - Dec 2022 Jan - Jun 2022
3 Base ChargeBase Charge Monthly No. of Base ChargeBase Charge Monthly No. of 4 Meter Size Cycle Bill $ Total $ Rate Customers Cycle Bill $ Total $ Rate Customers 5 1/2 " & 5/8" meter 147 179 $30.42 1 WB1, RE 183 179 $30.42 1 6 3/4" meter 1,750,826 1,755,879 $30.42 9,593WB2, RE 1,750,153 1,755,879 $30.42 9,589 7 1" meter 156,258 157,222 $44.01 592 WB3, RE 141,403 157,222 $44.01 535 8 1 1/2" meter 955 955 $53.04 3 WB4, RE 955 955 $53.04 3 9 2" meter 9,829 9,981 $152.54 11 WB5, RE 9,305 9,981 $152.54 10 10 3" meter 1,947 1,947 $324.45 1 WB6, RE 1,947 1,947 $324.45 1 11 4" meter 9,360 9,360 $550.59 3 WB7, RE 9,911 9,360 $550.59 3 12 6" meter $1,138.62 0 $1,138.62 0
13 8" meter $1,636.17 0 $1,636.17 0
14 Total
15 16 Multi-Family 50 + Units
17 July - Dec 2022 Jan - Jun 2022
18 Base ChargeBase Charge Monthly No. of Base ChargeBase Charge Monthly No. of 19 Meter Size Cycle Bill $ Total $ Rate Customers Cycle Bill $ Total $ Rate Customers 20 1/2 " & 5/8" meter $30.42 0 $30.42 0
21 3/4" meter 37,380 37,380 $30.42 205 WB2, MF 37,493 37,380 $30.42 205 22 1" meter 46,725 46,747 $44.01 177 WB3, MF 46,428 46,747 $44.01 176 23 1 1/2" meter 5,410 5,458 $53.04 17 WB4, MF 5,463 5,458 $53.04 17 24 2" meter 16,190 16,718 $152.54 18 WB5, MF 16,474 16,718 $152.54 18 25 3" meter 11,680 11,680 $324.45 6 WB6, MF 11,680 11,680 $324.45 6 26 4" meter 43,497 43,497 $550.59 13 WB7, MF 42,946 43,497 $550.59 13 27 6" meter 13,663 13,663 $1,138.62 2 WB8, MF 13,663 13,663 $1,138.62 2 28 8" meter 35,450 38,941 $1,636.17 4 WB9, MF 39,268 38,941 $1,636.17 4 29 Total
30 31 Commercial
32 July - Dec 2022 Jan - Jun 2022
33 Base ChargeBase Charge Monthly No. of Base ChargeBase Charge Monthly No. of 34 Meter Size Cycle Bill $ Total $ Rate Customers Cycle Bill $ Total $ Rate Customers 35 1/2 " & 5/8" meter $30.42 0 $30.42 0
36 3/4" meter 40,142 40,320 $30.42 220 WB2, CO 40,297 40,320 $30.42 221 37 1" meter 36,860 36,968 $44.01 140 WB3, CO 37,087 36,968 $44.01 140 38 1 1/2" meter 30,975 30,991 $53.04 97 WB4, CO 30,866 30,991 $53.04 97 39 2" meter 144,384 145,615 $152.54 158 WB5, CO 142,391 145,615 $152.54 156 40 3" meter 23,360 23,360 $324.45 12 WB6, CO 39,268 23,360 $324.45 20 41 4" meter 13,214 13,214 $550.59 4 WB7, CO 13,214 13,214 $550.59 4 42 6" meter 13,663 13,663 $1,138.62 2 WB8, CO 13,663 13,663 $1,138.62 2 43 8" meter $1,636.17 0 WB9, CO $1,636.17 0
44 Total
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
46 Governmental
47 July - Dec 2022 Jan - Jun 2022
48 Base ChargeBase Charge Monthly No. of Base ChargeBase Charge Monthly No. of 49 Meter Size Cycle Bill $ Total $ Rate Customers Cycle Bill $ Total $ Rate Customers 50 1/2 " & 5/8" meter $30.42 0 $30.42 0
51 3/4" meter 1,460 1,460 $30.42 8 WB2, GO 1,643 1,460 $30.42 9 52 1" meter 1,320 1,320 $44.01 5 WB3, GO 1,320 1,320 $44.01 5 53 1 1/2" meter 1,591 1,591 $53.04 5 WB4, GO 1,591 1,591 $53.04 5 54 2" meter 9,152 9,152 $152.54 10 WB5, GO 9,152 9,152 $152.54 10 55 3" meter 29,201 29,201 $324.45 15 WB6, GO 29,201 29,201 $324.45 15 56 4" meter 9,911 9,911 $550.59 3 WB7, GO 9,911 9,911 $550.59 3 57 6" meter $1,138.62 0 WB8, GO $1,138.62 0
58 8" meter $1,636.17 0 WB9, GO $1,636.17 0
59 Total
60 61 Landscape
62 July - Dec 2022 Jan - Jun 2022
63 Base ChargeBase Charge Monthly No. of Base ChargeBase Charge Monthly No. of 64 Meter Size Cycle Bill $ Total $ Rate Customers Cycle Bill $ Total $ Rate Customers 65 1/2 " & 5/8" meter $30.42 LS1 $30.42
66 3/4" meter 8,777 8,777 $30.42 48 LS2 8,791 8,791 $30.42 48 67 1" meter 37,023 37,023 $44.01 140 LS3 36,010 36,010 $44.01 136 68 1 1/2" meter 17,358 17,358 $53.04 55 LS4 16,976 16,976 $53.04 53 69 2" meter 97,021 97,021 $152.54 106 LS5 95,993 95,993 $152.54 105 70 3" meter 21,414 21,414 $324.45 11 LS6 21,414 21,414 $324.45 11 71 4" meter 26,428 26,428 $550.59 8 LS7 26,942 26,942 $550.59 8 72 6" meter $1,138.62 LS8 $1,138.62
73 8" meter $1,636.17 LS9 $1,636.17
74 75 Source of Data: water customer data from FY 21/22, received by FG Solutions 6/5/2023 from Veolia staff. 76 Methodology: discussed with Robert Lee, Veolia, 11/1/23 remote meeting; 77 Appropriate to use cycle bill revenues instead of total bill revenues to estimate number of connections. Total bill = cycle + final charges etc. 78 79
80 Fireline (Private)
81 See Approximately Row 1300 for calculation of Fireline Connection Data from December 2022 82 83 Hydrant Service
84 Jan 2022 - June 2022 Revenues from Hydrant Meter Daily Charges and Consumption Charges$80,196.97 85 July 2022 - December 2022 Revenues from Hydrant Meter Daily Charges and Consumption Charges$96,384.72 86 Total Calendar Year 2022 Revenues from Hydrant Meter Daily Charges $176,581.69 87 88 CY 22 Revenues from Daily Charges Only 67,161
89 Daily Rate for Hydrant Meter $10.81
90 91 Hydrant Meter Rental Days 6,213
92 93
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
94 Step 2. Projected Number of Customers by Customer Class and Meter Size 95 96 Single Family Residential and Multi-Family < 50 Units 97 Jul-Dec Projected (1)
98 Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 99 1/2 " & 5/8" meter 1 1 1 1 1 1
100 3/4" meter 9,593 9,640 9,688 9,736 9,785 9,834
101 1" meter 592 595 598 601 604 607
102 1 1/2" meter 3 3 3 3 3 3
103 2" meter 11 11 11 11 11 11
104 3" meter 1 1 1 1 1 1
105 4" meter 3 3 3 3 3 3
106 6" meter 0 0 0 0 0 0
107 8" meter 0 0 0 0 0 0
108Total 10,203 10,254 10,305 10,356 10,408 10,460
109
110 Multi-Family 50 + Units
111 Jul-Dec Projected (1)
112Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 113 1/2 " & 5/8" meter 0 0 0 0 0 0
114 3/4" meter 205 206 207 208 209 210
115 1" meter 177 178 179 180 181 182
116 1 1/2" meter 17 17 17 17 17 17
117 2" meter 18 18 18 18 18 18
118 3" meter 6 6 6 6 6 6
119 4" meter 13 13 13 13 13 13
120 6" meter 2 2 2 2 2 2
121 8" meter 4 4 4 4 4 4
122Total 441 444 446 448 450 452
123
124Commercial
125 Jul-Dec Projected (1)
126Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 127 1/2 " & 5/8" meter 0 0 0 0 0 0
128 3/4" meter 220 221 222 223 224 225
129 1" meter 140 140 141 142 143 144
130 1 1/2" meter 97 98 98 98 98 98
131 2" meter 158 159 160 161 162 163
132 3" meter 12 12 12 12 12 12
133 4" meter 4 4 4 4 4 4
134 6" meter 2 2 2 2 2 2
135 8" meter 0 0 0 0 0 0
136Total 633 636 639 642 645 648
137
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
138Governmental
139 Jul-Dec Projected (1)
140Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 141 1/2 " & 5/8" meter 0 0 0 0 0 0
142 3/4" meter 8 8 8 8 8 8
143 1" meter 5 5 5 5 5 5
144 1 1/2" meter 5 5 5 5 5 5
145 2" meter 10 10 10 10 10 10
146 3" meter 15 15 15 15 15 15
147 4" meter 3 3 3 3 3 3
148 6" meter 0 0 0 0 0 0
149 8" meter 0 0 0 0 0 0
150Total 46 46 46 46 46 46
151
152Landscape
153 Jul-Dec Projected (1)
154Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 155 1/2 " & 5/8" meter 0 0 0 0 0 0
156 3/4" meter 48 48 48 48 48 48
157 1" meter 140 141 142 143 144 145
158 1 1/2" meter 55 55 55 55 55 55 177
159 2" meter 106 107 108 109 110 111
160 3" meter 11 11 11 11 11 11
161 4" meter 8 8 8 8 8 8
162 6" meter 0 0 0 0 0 0
163 8" meter 0 0 0 0 0 0
164Total 368 370 372 374 376 378
165
166Fireline (Private)
167 December Projected (1)
168Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 169 1/2 " & 5/8" meter
170 3/4" meter
171 1" meter
172 1 1/2" meter
173 2" meter
174 3" meter 3 3 3 3 3 3
175 4" meter 14 14 14 14 14 14
176 6" meter 88 88 88 88 88 88
177 8" meter 77 77 77 77 77 77
178 10" meter 2 2 2 2 2 2
179Total 184 184 184 184 184 184
180
181
182Hydrant Meter Connections
183The number of hydrant meter rental days is not projected to change through FY 27/28. 184The number of hydrant meter rental days depends on construction activity, which is projected to remain at 185current levels through FY 27/28.
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
186Total, All Customer Classes, Excluding Potable Hydrant Connections and Fireline Connections 187 Jul-Dec Projected (1)
188Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 189 1/2 " & 5/8" meter 1 1 1 1 1 1
190 3/4" meter 10,073 10,123 10,173 10,223 10,274 10,325 191 1" meter 1,053 1,059 1,065 1,071 1,077 1,083
192 1 1/2" meter 177 178 178 178 178 178
193 2" meter 302 305 307 309 311 313
194 3" meter 45 45 45 45 45 45
195 4" meter 31 31 31 31 31 31
196 6" meter 4 4 4 4 4 4
197 8" meter 4 4 4 4 4 4
198Total 11,690 11,750 11,808 11,866 11,925 11,984
199
200
201Note:
202(1) Projected water system growth is 0.5% per year, see Table A-1, Assumptions. 203
204
205Step 2. Projected Number of Meter Equivalents by Customer Class and Meter Size 206
207Single Family Residential and Multi-Family < 50 Units 208 Jul-Dec Projected (1) Capacity, Equivalent
209Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (2) 210 1/2 " & 5/8" meter 1 1 1 1 1 1 30 1.00
211 3/4" meter 9,593 9,640 9,688 9,736 9,785 9,834 30 1.00 212 1" meter 986 992 997 1,002 1,007 1,012 50 1.67
213 1 1/2" meter 10 10 10 10 10 10 100 3.33
214 2" meter 57 59 59 59 59 59 160 5.33
215 3" meter 11 11 11 11 11 11 320 10.67
216 4" meter 47 50 50 50 50 50 500 16.67
217 6" meter 0 0 0 0 0 0 1,000 33.33
218 8" meter 0 0 0 0 0 0 1,600 53.33
219Total 10,705 10,762 10,815 10,868 10,922 10,976
220
221 Multi-Family 50 + Units Meter Meter
222 Jul-Dec Projected (1) Capacity, Equivalent
223Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (2) 224 1/2 " & 5/8" meter 0 0 0 0 0 0 30 1.00
225 3/4" meter 205 206 207 208 209 210 30 1.00
226 1" meter 295 297 298 300 302 303 50 1.67
227 1 1/2" meter 57 57 57 57 57 57 100 3.33
228 2" meter 94 96 96 96 96 96 160 5.33
229 3" meter 64 64 64 64 64 64 320 10.67
230 4" meter 219 217 217 217 217 217 500 16.67
231 6" meter 67 67 67 67 67 67 1,000 33.33
232 8" meter 193 213 213 213 213 213 1,600 53.33
233Total 1,193 1,216 1,219 1,221 1,224 1,227
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
234Commercial Meter Meter
235 Jul-Dec Projected (1) Capacity, Equivalent
236Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (2) 237 1/2 " & 5/8" meter 0 0 0 0 0 0 30 1
238 3/4" meter 220 221 222 223 224 225 30 1
239 1" meter 233 234 235 237 239 240 50 1.67
240 1 1/2" meter 324 326 326 326 326 326 100 3.33
241 2" meter 841 847 853 858 863 869 160 5.33
242 3" meter 128 128 128 128 128 128 320 10.67
243 4" meter 67 67 67 67 67 67 500 16.67
244 6" meter 67 67 67 67 67 67 1,000 33.33
245 8" meter 0 0 0 0 0 0 1,600 53.33
246Total 1,879 1,890 1,898 1,906 1,914 1,922
247
248Governmental Meter Meter
249 Jul-Dec Projected (1) Capacity, Equivalent
250Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (2) 251 1/2 " & 5/8" meter 0 0 0 0 0 0 30 1.00
252 3/4" meter 8 8 8 8 8 8 30 1.00
253 1" meter 8 8 8 8 8 8 50 1.67
254 1 1/2" meter 17 17 17 17 17 17 100 3.33
255 2" meter 53 53 53 53 53 53 160 5.33
256 3" meter 160 160 160 160 160 160 320 10.67
257 4" meter 50 50 50 50 50 50 500 16.67
258 6" meter 0 0 0 0 0 0 1,000 33.33
259 8" meter 0 0 0 0 0 0 1,600 53.33
260Total 296 296 296 296 296 296
261
262Landscape Meter Meter
263 Jul-Dec Projected (1) Capacity, Equivalent
264Meter Size 2022 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (2) 265 1/2 " & 5/8" meter 0 0 0 0 0 0 30 1.00
266 3/4" meter 48 48 48 48 48 48 30 1.00
267 1" meter 234 235 237 238 240 242 50 1.67
268 1 1/2" meter 182 183 183 183 183 183 100 3.33
269 2" meter 565 571 576 581 587 592 160 5.33
270 3" meter 117 117 117 117 117 117 320 10.67
271 4" meter 133 133 133 133 133 133 500 16.67
272 6" meter 0 0 0 0 0 0 1,000 33.33
273 8" meter 0 0 0 0 0 0 1,600 53.33
274Total 1,280 1,288 1,295 1,302 1,309 1,316
275
276
277Notes:
278(1) AWWA M1 Manual, Table B-1 (Sixth Edition).
279(2) Where meters 3/4" or smaller are assigned a meter equivalent ratio of 1.0 by definition. Rounded to nearest 0.01. 01082024 Rialto Rate Model Draft
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
280Step 3. Calendar Year 2022 Water Consumption, ccf/month 281
282 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Total 283Residential & MF < 50 Units159,285 140,780 154,223 187,016 184,187 185,780 255,056 210,176 214,083 239,077 163,802 144,552 2,238,017 284MF > 50 Units 19,672 18,680 18,719 22,751 18,293 19,142 25,167 22,436 22,494 26,829 18,614 20,038 252,835 285Commercial 27,859 23,980 26,143 31,343 26,990 26,141 36,095 27,713 29,445 33,818 26,347 24,722 340,596 286Governmental 5,359 5,756 7,470 9,553 10,503 12,393 16,995 14,922 14,469 16,816 9,267 6,239 129,742 287Landscape 19,206 29,923 35,086 46,066 47,568 51,731 66,237 57,210 58,034 67,124 35,911 26,082 540,178 288Fireline 71 59 45 150 57 49 74 36 56 76 74 66 813
289Hydrant Meter 9,835 3,854 240 962 526 563 4,086 1,004 11,480 2,481 1,114 1,125 37,270 290Total 241,287 223,032 241,926 297,841 288,124 295,799 403,710 333,497 350,061 386,221 255,129 222,824 3,539,451 291
292 % of consumption from July through December 55%
293 % of consumption from January through June 45%
294
295
296Check with Bill Frequency Data Total
297 Consumption Bill Freq
298 Data Data
299W00 2,708,355 2,719,808
300WM0 252,835 252,696
301Landscape 540,178 516,067use consumption data
302
303Step 4. Estimated Peak Day and Peak Hour Units of Service 304Methodology: Peak day of FY 22/23 occurred in October 2022. Use monthly consumption during October 2022 to calculate 305 October % of % of
306 2022 hcf Peak Day Peak Hour
307Residential & MF < 50 Units239,077 62% 62%
308MF > 50 Units 26,829 7% 7%
309Commercial 33,818 9% 9%
310Governmental 16,816 4% 4%
311Landscape 67,124 17% 17%
312Fireline 76 0% 0%
313Hydrant Meter 2,481 1% 1%
314Total 386,221 100% 100%
315
316
316Step 5. Define Costs to Be Recovered by Monthly Minimum Charges and Volume Charges 317 Public Private
318 Fire Fire
319 Customer Meter Protection Base Peaking Rate Tiers Hydrant Protection Total 320Total Revenue Requirement $912,516 $84,105 $2,186,711 $2,769,648 $5,188,726 $2,315,551 $379,164 $13,836,421 321Less Costs for Hydrant Customers $0 $0 $0 ($29,164) ($30,648) $59,812 $0 322Less Costs for Fire Protection Customers $0 $0 $0 ($636) ($939) $1,575 $0 323Subtotal $912,516 $84,105 $2,186,711 $2,739,848 $5,157,139 $2,315,551 $59,812 $380,739 $13,836,421 324 As Percent 6.60% 0.61% 15.80% 19.80% 37.27% 16.74% 0.43% 2.75% 100.00% 325
326
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
327Adjustment: Revenue Collected if Rates Were In Effect for the Full FY 328Rates Effective for Six Months $912,516 $84,105 $2,186,711 $2,739,848 $5,157,139 $2,315,551 $59,812 $380,739 $13,836,421 329Adjustment $51,639 $4,759 $123,746 $155,047 $291,841 $131,037 $3,385 $21,546 $783,000 330Full-Year Implementation Rate Revenue $964,155 $88,864 $2,310,457 $2,894,895 $5,448,981 $2,446,588 $63,196 $402,285 $14,619,421 331
332
333Costs Recovered from Monthly Minimum Charge
334 % Recovered Through Monthly Minimum Charge100% 100% 100% 85% 0.00% 335 $ Recovered Through Monthly Minimum Charge$964,155 $88,864 $2,310,457 $2,460,661 $0 $5,824,137 336 Number of Billing Determinants (3) 11,750 15,452 15,452 15,452 15,452 337 Unit Cost, $/month $6.84 $0.48 $12.46 $13.27 $0.00
338 Units $/mo/cust. $/mo/ME $/mo/ME $/mo/ME $/mo/ME
339
340Costs Recovered from Volume Charge (Except Hydrant and Private Firelines) 341 % Recovered Through Volume Charge 0% 0% 0% 15% 100.00% 342 $ Recovered Through Volume Charge $0 $0 $0 $434,234 $5,448,981 $2,446,588 $8,329,803 343
344Other Costs Recovered from Hydrant and Fireline Charges $63,196 $402,285 $465,481 345Total $964,155 $88,864 $2,310,457 $2,894,895 $5,448,981 $2,446,588 $63,196 $402,285 $14,619,421 346
347Notes:
348(1) See AWWA M1, 7th edition, page 227, last paragraph on page 349(2) Private Fire Protection and Hydrant Rates Shown Below 350(3) See Table B-9, excludes hydrant and private fire protection customers 351
352Step 6. Calculate Cost-of-Service Monthly Service Charge, FY 23/24 353
354 Meter Total COS Revenue Revenue
355 Customer Equivalent Monthly Backcalc Reported Backcalc 356 Allocated Allocated Service Billing Current CY 22 COS 357Meter Size ComponentComponent Charge Current Determinants Rates Revenues Rates 358 1/2 " & 5/8" meter $6.84 $26.21 $33.05 $30.42 1 365 359 397 359 3/4" meter $6.84 $26.21 $33.05 $30.42 10,123 3,695,300 3,687,647 4,014,551 360 1" meter $6.84 $43.68 $50.52 $44.01 1,059 559,279 557,549 642,027 361 1 1/2" meter $6.84 $87.37 $94.21 $53.04 178 113,293 112,325 201,222 362 2" meter $6.84 $139.79 $146.63 $152.54 305 558,296 555,947 536,649 363 3" meter $6.84 $279.57 $286.41 $324.45 45 175,203 175,203 154,663 364 4" meter $6.84 $436.84 $443.67 $550.59 31 204,819 205,333 165,046 365 6" meter $6.84 $873.67 $880.51 $1,138.62 4 54,654 54,654 42,264 366 8" meter $6.84 $1,397.87 $1,404.71 $1,636.17 4 78,536 77,882 67,426 367 Total 5,439,746 5,426,898 5,824,245
368
369
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
399Step 7. Calculate Revenues from Monthly Service Charge by Customer Class (Cost of Service Based Rates) 400
401FY 23/24: 6 month implementationFY 23/24 FY 23/24 FY 23/24 FY 23/24 FY 24/25 FY 24/25 FY 24/25 FY 24/25 402 Commercial, Commercial,
403 Single-FamilyMulti-FamilyInstitutional, Single-FamilyMulti-FamilyInstitutional, 404Meter Size Residential > 50 UnitsGovernmentalLandscape Total Residential > 50 UnitsGovernmentalLandscape Total 405 1/2 " & 5/8" meter $383 $0 $0 $0 $425 $0 $0 $0
406 3/4" meter $3,690,110 $78,855 $87,659 $18,374 $4,113,288 $87,887 $97,652 $20,380 407 1" meter $339,281 $101,499 $82,682 $80,401 $388,138 $116,182 $94,763 $92,167 408 1 1/2" meter $2,667 $15,115 $91,580 $48,902 $3,631 $20,575 $124,658 $66,565 409 2" meter $19,842 $32,468 $304,840 $193,005 $20,721 $33,907 $320,233 $203,442 410 3" meter $3,682 $22,094 $99,424 $40,506 $3,680 $22,078 $99,349 $40,476 411 4" meter $17,977 $77,899 $41,945 $47,938 $17,100 $74,099 $39,900 $45,600 412 6" meter $0 $24,335 $24,335 $0 $0 $22,624 $22,624 $0 413 8" meter $0 $73,318 $0 $0 $0 $72,186 $0 $0
414 $4,073,942 $425,584 $732,466 $429,126 $5,661,117 $4,546,981 $449,538 $799,179 $468,629 $6,264,327 415
416Back Calculated Monthly Service Charge Revenue Total $5,661,117 417
418 FY 25/26 FY 25/26 FY 25/26 FY 25/26 FY 26/27 FY 26/27 FY 26/27 FY 26/27 419 Commercial, Commercial,
420 Single-FamilyMulti-FamilyInstitutional, Single-FamilyMulti-FamilyInstitutional, 421Meter Size Residential > 50 UnitsGovernmentalLandscape Total Residential > 50 UnitsGovernmentalLandscape Total 422 1/2 " & 5/8" meter $462 $0 $0 $0 $490 $0 $0 $0
423 3/4" meter $4,498,678 $96,110 $106,737 $22,179 $4,792,598 $102,366 $113,631 $23,510 424 1" meter $424,530 $127,147 $103,837 $101,011 $452,248 $135,525 $110,816 $107,821 425 1 1/2" meter $3,951 $22,391 $135,665 $72,443 $4,189 $23,735 $143,805 $76,789 426 2" meter $22,551 $36,901 $350,560 $223,457 $23,904 $39,115 $373,767 $239,037 427 3" meter $4,005 $24,027 $108,122 $44,050 $4,245 $25,469 $114,609 $46,693 428 4" meter $18,610 $80,643 $43,423 $49,626 $19,726 $85,481 $46,028 $52,604 429 6" meter $0 $24,622 $24,622 $0 $0 $26,099 $26,099 $0 430 8" meter $0 $78,561 $0 $0 $0 $83,274 $0 $0
431 $4,972,787 $490,402 $872,967 $512,766 $6,848,921 $5,297,400 $521,064 $928,756 $546,454 $7,293,674 432
433 FY 27/28 FY 27/28 FY 27/28 FY 27/28
434 Commercial,
435 Single-FamilyMulti-FamilyInstitutional,
436Meter Size Residential > 50 UnitsGovernmentalLandscape Total 437 1/2 " & 5/8" meter $519 $0 $0 $0
438 3/4" meter $5,080,154 $108,508 $120,449 $24,921
439 1" meter $479,383 $143,656 $117,465 $114,290
440 1 1/2" meter $4,440 $25,159 $152,434 $81,397
441 2" meter $25,338 $41,462 $396,193 $253,379
442 3" meter $4,499 $26,997 $121,486 $49,494
443 4" meter $20,910 $90,610 $48,790 $55,760
444 6" meter $0 $27,665 $27,665 $0
445 8" meter $0 $88,271 $0 $0
446 $5,615,244 $552,328 $984,482 $579,241 $7,731,295
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
447
448Step 8. Calculate Volume Charge for MF>50 Customers 449
450 Multi-Family
451 > 49 Units
452Total Revenue Requirement (Full Year Implementation) $1,067,020 453Less Revenue from Monthly Service Charge (425,584)
454Revenue Requirement from Volume Charge $641,436
455
456Calculate the Uniform Block Volume Charge
457 Revenue Requirement from Volume Charge $641,436
458 Water Consumption, ccf/year 252,835
459Volume Charge, $/ccf $2.54
460
461
462Step 9. Compile Water Use Data for Customers Paying Tiered Rates 463
464Projected Annual Water Sales in Each Tier: Summary of Data Tables in this Model Before Combining into Customer Classes 465 Commercial, Private
466 Single-Family MF>49 Institutional, Fire Hydrant
467Proposed Tier StructureResidential Units GovernmentLandscape Protection Connections Total 468 Tier 1 972,498 48,837 1,021,3350 - 9 ccf
469 Tier 2 918,325 69,276 75,227 1,062,8289 - 30
470 Tier 3 347,194 352,225 464,951 1,164,370>30
471 "Uniform Block" (No Tiers) 252,835 813 37,270 290,918 472 Total 2,238,017 252,835 470,338 540,178 813 37,270 3,539,451 473
474 Commercial, Private
475 Single-Family MF>49 Institutional, Fire Hydrant
476Existing Tier StructureResidential Units GovernmentLandscape Protection Connections Total 477 Tier 1 582,807 29,963 612,770
478 Tier 2 1,308,016 88,150 75,227 1,471,393
479 Tier 3 216,800 58,520 464,951 740,271
480 Tier 4 130,394 293,705 424,099
481 "Uniform Block" (No Tiers) 252,835 813 37,270 290,918 482Total 2,238,017 252,835 470,338 540,178 813 37,270 3,539,451 483
484
485
515
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
516Step 10. Calculate Volume Charge (Cost of Service Based Rates, Test Year FY 23/24) 517
5181. Base costs. For the portion of base costs recovered through the volume charge, a single unit cost is calcualted and is applied to all tiers. 519
520Total Base Costs from Customers Paying Volume Charges$2,894,895Line 330 above 521Less Base Costs from MF>49 Customers ($197,845)
522Total Base Costs from Customers Paying Tiered Volume Charges$2,697,050 523Percent of Base Costs Recovered from Volume Charges 15.0% 524Total Base Costs Included in the Volume Charge $404,557 525ccf/year 3,248,533Excludes Private Fire Protection and Hydrant Connections, and MF > 49 526Component of Tiered Volume Charge that is for Base Costs $0.12 527
5282. Peaking Costs. Peak Month Costs are Allocated into the Tiered Costs According to Peak Month use in Each Tier 529
530Total Peaking Costs from Customers Paying Volume Charges$5,448,981 531Less Peaking Costs from MF>50 Customers ($417,752)
532Total Peaking Costs from Customers Paying Tiered Volume Charges$5,031,228 533Percent of Peaking Costs Recovered from Volume Charges 100.00% 534Total Peaking Costs Recovered from Volume Charges 5,031,228 535ccf/year 3,248,533Excludes Private Fire Protection and Hydrant Connections, and MF > 49 536Component of Tiered Volume Charge that is for Peaking Costs$1.55 537
5493. Source Specific Costs. The least expensive sources are grouped into Tier 1; The most expensive sources are grouped into Tier 2. MF and Hydrant/Fire Protection 550water use is distributed among all sources proporionately to adjusted production from each source. 551 Ccf/year
552 for Hydrant, Rank of
553 Unit Cost Adjusted Ccf/year Private Fire Remaining ccf/Tier ccf/Tier ccf/Tier Source-Specific Costs ex Fire Prot, MF>49Sources 554 $/ccf (1) ccf/year for MF>50 Protection ccf/year (2) Tier 1 Tier 2 Tier 3 Tier 1 Tier 2 Tier 3 by Unit Cost 555Chino 2 $0.98 619,112 44,225 6,661 568,225 568,225 $558,219 5 556City 2 $0.48 514,497 36,752 5,536 472,209 472,209 $227,844 3 557Miro 3/Rialto 3 $0.28 853,538 60,971 9,184 783,383 783,383 $216,143 1 558Rialto 5 $424.24 150 11 2 137 137 $58,218 7
559Roemer $2.11 318,505 22,752 3,427 292,326 292,326 $615,967 6 560Well 4A $0.47 700,535 50,042 7,537 642,956 237,952 405,004 $111,366 $189,550 2 561Basline Feeder $0.94 533,115 38,082 5,736 489,297 185,615 303,682 $174,346 $285,245 4 562Total 3,539,451 252,835 38,083 3,248,533 1,021,335 1,062,828 1,164,370 $327,509 $591,740 $1,517,649 $2,436,897 563 Unit Costs from Source-Specific Costs $0.32 $0.56 $1.30 564
565(1) See Table B-10
566(2) This table calculates how source-specific costs are incorporated into the three-tier volume charge. To calculate this, only the consumption that 567 the tiered rate structure is applicable to should be considered. Therefore, the consumption for MF>49 and fire protection customers (which will not be a tiered rate structure) 568 is excluded.
569
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
5704. Conservation Costs. These costs are added directly to the 3rd tier 571
572Total Conservation Costs
573 Conservation Program
574 Water Rebates $50,000
575Total $50,000
576
577Third Tier Consumption, ccf/year1,164,370
578
579Unit Cost, $/ccf $0.04
580
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
5815. Apply Certain Non-Rate Revenues to Tier 1 and Tier 2 582Policy direction: City staff, 11/15/23 meeting in Rialto offices. Provides incentive to irrigate. 583
584Non-Rate Revenue Applied to Tier 1 and Tier 2
585 Rents & Concessions ($83,000)
586 Trustee Interest Income ($60,000)
587 Turn On/Off ($50,750)
588 Other Charges for Current Services…mostly perchlorate reimb. Should go to whatever tier SBCO is in IS THIS STILL TRUE?($147,592) 589 Miscellaneous Revenues ($49,300)
590Total ($390,642)
591
592Tier 1 and Tier 2 ccf/year 2,084,163
593
594Reduction in Tier 1, 2 Unit Cost, $/ccf($0.19)
595
5966. Summarize 1/1/24 Cost-of-Service Tiered Volume Charge 597
598 Everyone Except MF>50, Private Fire Protection
599 Tier 1 Tier 2 Tier 3
600Base Costs $0.12 $0.12 $0.12
601Peaking Costs $1.55 $1.55 $1.55
602Source-Specific Costs $0.32 $0.56 $1.30
603Conservation Costs $0.04
604Apply Certain Non-Rate Revenues to Tier 1($0.19) ($0.19) 605Total $1.81 $2.04 $3.02
606
607Step 10. Revenue Backcalculation for FY 23/24, COS Based Rates 608 Math Check,
609 Volume Charge Revenues Monthly Revenue
610 Jul-Dec Jul-Dec Jul-Dec Jan-Jun Jan-Jun Jan-Jun Service Requirement 611Customer Class ccf $/ccf $ ccf $/ccf $ $/year Charge $/yr Total $ (Table B-9) 612MF>50 139,398 $2.40 $334,556 113,437 2.56 $290,664 $625,220 $425,584 $1,050,804 $1,009,872 613Landscape $429,126 $2,097,952 $1,641,089
614 Tier 2 41,476 $2.70 $111,984 33,751 2.06 $69,528 $181,512 615 Tier 3 256,346 $3.32 $851,069 208,605 3.05 $636,245 $1,487,314 616Everyone Else $4,806,407$10,358,793 $10,720,522
617 Tier 1 337,845 $1.07 $361,494 $361,494
618 Tier 2 769,763 $1.69 $1,300,899 $1,300,899
619 Tier 3 151,795 $2.70 $409,847 $409,847
620 Tier 4 233,823 $3.32 $776,292 $776,292
621 Tier 1 458,232 1.82 $833,982 $833,982
622 Tier 2 443,097 2.06 $912,779 $912,779
623 Tier 3 313,801 3.05 $957,093 $957,093
624Hydrant Connections (Rate Design Below) REV REQ $84,200 $84,200 $84,200 625Private Fire Protection (Rate Design Below) REV REQ $380,739 $380,739 $380,739 626Total 1,930,445 1,570,923 $7,846,432 $6,126,056$13,972,488 $13,836,423 627 44%
628 6 month implementation math check ==> $136,065 0.98%difference. 01082024 Rialto Rate Model Draft
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
629
630Step 10. Revenue Backcalculation for FY 24/25, COS Based Rates 631
632 Volume Charge Revenues Monthly Revenue
633 Jul-Dec Jul-Dec Jul-Dec Jan-Jun Jan-Jun Jan-Jun Service Requirement 634Customer Class ccf $/ccf $ ccf $/ccf $ $/year Charge $/yr Total $ (Table A-5) 635MF>50 140,095 2.56 $358,972 114,004 2.87 $327,172 $686,144 $449,538 $1,135,682 $1,134,470 636Landscape $468,629 $2,134,678 $1,843,567
637 Tier 2 41,683 2.06 $85,867 33,920 2.31 $78,260 $164,128 638 Tier 3 257,628 3.05 $785,765 209,648 3.42 $716,157 $1,501,922 639Everyone Else $5,346,161$11,728,894 $12,043,221
640 Tier 1 565,919 1.82 $1,029,972 460,523 2.04 $938,730 $1,968,702 641 Tier 2 547,227 2.06 $1,127,287 445,312 2.31 $1,027,424 $2,154,712 642 Tier 3 387,546 3.05 $1,182,015 315,370 3.42 $1,077,304 $2,259,320 643Hydrant Connections (Rate Design Below) REV REQ $94,304 $94,588 644Private Fire Protection (Rate Design Below) REV REQ $426,427 $427,714 645Total 1,940,098 1,578,777 $15,519,986 $15,543,562 0.15%difference. 646
647 math check ==> ($23,577)
648
649
650Step 10. Revenue Backcalculation for FY 25/26, COS Based Rates 651
652 Volume Charge Revenues Monthly Revenue
653 Jul-Dec Jul-Dec Jul-Dec Jan-Jun Jan-Jun Jan-Jun Service Requirement 654Customer Class ccf $/ccf $ ccf $/ccf $ $/year Charge $/yr Total $ (Table A-5) 655MF>50 140,796 $2.87 $404,059 114,574 $3.04 $348,536 $752,595 $490,402 $1,242,997 $1,238,340 656Landscape $512,766 $2,340,168 $2,012,360
657 Tier 2 41,891 $2.31 $96,652 34,090 $2.45 $83,371 $180,023 658 Tier 3 258,916 $3.42 $884,457 210,696 $3.62 $762,922 $1,647,379 659Everyone Else $5,845,754$12,846,637 $13,145,875
660 Tier 1 568,748 $2.04 $1,159,336 462,826 $2.16 $1,000,029 $2,159,366 661 Tier 2 549,963 $2.31 $1,268,874 447,539 $2.45 $1,094,515 $2,363,390 662 Tier 3 389,484 $3.42 $1,330,476 316,947 $3.62 $1,147,652 $2,478,129 663Hydrant Connections (Rate Design Below) REV REQ $103,249 $103,249 664Private Fire Protection (Rate Design Below) REV REQ $466,875 $466,875 665Total 1,949,798 1,586,671 $16,999,926 $16,966,701 -0.20% 666
667 math check ==> $33,225
668
669
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
670Step 10. Revenue Backcalculation for FY 26/27, COS Based Rates 671
672 Volume Charge Revenues Monthly Revenue
673 Jul-Dec Jul-Dec Jul-Dec Jan-Jun Jan-Jun Jan-Jun Service Requirement 674Customer Class ccf $/ccf $ ccf $/ccf $ $/year Charge $/yr Total $ (Table A-5) 675MF>50 141,500 $3.04 $430,444 115,147 $3.22 $371,296 $801,740 $521,064 $1,322,804 $1,316,546 676Landscape $546,454 $2,493,185 $2,139,450
677 Tier 2 42,101 $2.45 $102,963 34,260 $2.59 $88,815 $191,778 678 Tier 3 260,211 $3.62 $942,212 211,750 $3.84 $812,741 $1,754,953 679Everyone Else $6,226,156$13,684,198 $13,976,097
680 Tier 1 571,592 $2.16 $1,235,041 465,140 $2.29 $1,065,331 $2,300,372 681 Tier 2 552,713 $2.45 $1,351,732 449,777 $2.59 $1,165,987 $2,517,719 682 Tier 3 391,431 $3.62 $1,417,356 318,532 $3.84 $1,222,594 $2,639,950 683Hydrant Connections (Rate Design Below) REV REQ $109,769 $109,769 684Private Fire Protection (Rate Design Below) REV REQ $496,360 $496,360 685Total 1,959,547 1,594,605 $18,106,317 $18,038,226 -0.38% 686
687 math check ==> $68,091
688
689
690Step 10. Revenue Backcalculation for FY 27/28, COS Based Rates 691
692 Volume Charge Revenues Monthly Revenue
693 Jul-Dec Jul-Dec Jul-Dec Jan-Jun Jan-Jun Jan-Jun Service Requirement 694Customer Class ccf $/ccf $ ccf $/ccf $ $/year Charge $/yr Total $ (Table A-5) 695MF>50 142,207 $3.22 $458,552 115,723 $3.42 $395,541 $854,093 $552,328 $1,406,422 $1,399,692 696Landscape $579,241 $2,653,094 $2,274,566
697 Tier 2 42,311 $2.59 $109,687 34,431 $2.75 $94,615 $204,301 698 Tier 3 261,512 $3.84 $1,003,739 212,808 $4.07 $865,813 $1,869,552 699Everyone Else $6,599,726$14,544,778 $14,858,751
700 Tier 1 574,450 $2.29 $1,315,689 467,465 $2.43 $1,134,897 $2,450,587 701 Tier 2 555,476 $2.59 $1,440,000 452,025 $2.75 $1,242,126 $2,682,126 702 Tier 3 393,388 $3.84 $1,509,910 320,124 $4.07 $1,302,429 $2,812,339 703Hydrant Connections (Rate Design Below) REV REQ $116,702 $116,702 704Private Fire Protection (Rate Design Below) REV REQ $527,708 $527,708 705Total 1,969,345 1,602,578 $19,248,702 $19,176,519 -0.38% 706
707
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
708Step 11. Fireline Rates
709
710Revenue Requirement $380,739
711Number of Equivalent Fire Service Connections 29,504 712Unit Cost Per Month Per Equivalent Fire Service Connection $1.08See AWWA M1, 7th Edition, page 228 713 Cost of
714 Cost of Service
715 Demand Service Revenue Current Number of
716 Fireline Size, Inches Factor Rates Backcheck Charge Connections 717 1 1.00 $1.08 $0.00 $27.91 0 $0
718 1.5 2.90 $3.12 $0.00 $41.87 0
719 2 6.19 $6.66 $0.00 $55.82 0
720 3 17.98 $19.34 $696.14 $83.73 3
721 4 38.32 $41.21 $6,923.00 $111.64 14
722 6 111.31 $119.70 $126,406.39 $167.46 88
723 8 237.21 $255.09 $235,703.46 $223.28 77
724 10 426.58 $458.74 $11,009.78 $279.10 2
725 $380,738.78
726
727
728Step 12. Hydrant Rates
729
730Revenue Requirement, Usage $84,200
731Usage, ccf 37,270
732$/ccf 2.26
733
734Daily Rental Rate. Estimated depreciation expense. Per Veolia staff 11/7/23, customer interaction is very limited. Per Veolia staff 11/20, there were only 10 meters returned at any time from 1/1/23 to 11/20/23. 735Number of Meters 18 Source: impage.png, received 11/20/2023 from Veolia staff 736Estimated Cost per Meter $1,500Ebay sale, 12/17/23
737Useful Life 5 Years, placeholder
738
739Deprecation Expense, Total $5,400
740Number of Rental Days 6,213
741Daily Rental Rate, Depreciation Expense Recovery $0.87 742
743Labor to read meters. 1 hour @ $75/hour
744Monthly Charge $75
745Daily Charge $2.47
746
747total Rental Rate, $/day $3.34
748
749
750
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
751Step 13. Proposed Rate Structure Through FY 2028
752
753 1.010 1.000 1.000 1.000
754 Proposed Rates
755Monthly Mininum Charge Current 3/1/24 1/1/25 1/1/26 1/1/27 1/1/28 756Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers 757 1/2 " & 5/8" meter $30.42 $33.38 $37.38 $39.63 $42.00 $44.52 758 3/4" meter $30.42 $33.38 $37.38 $39.63 $42.00 $44.52 759 1" meter $44.01 $51.03 $57.15 $60.58 $64.21 $68.07
760 1 1/2" meter $53.04 $95.15 $106.56 $112.96 $119.74 $126.92 761 2" meter $152.54 $148.09 $165.86 $175.81 $186.36 $197.54 762 3" meter $324.45 $289.28 $323.99 $343.43 $364.04 $385.88 763 4" meter $550.59 $448.11 $501.88 $532.00 $563.92 $597.75 764 6" meter $1,138.62 $889.31 $996.03 $1,055.79 $1,119.14 $1,186.29 765 8" meter $1,636.17 $1,418.76 $1,589.01 $1,684.35 $1,785.41 $1,892.54 766
767 Note: 1.01 adjustment factor for the FY 23/24 rate is to recognize the need to recover the revenue requirement for FY 23/24 and subsequent years with the 768 3/1/24 implementation date.
769
770 Proposed Rates
771Volume Charge, $/ccf Current 3/1/24 1/1/25 1/1/26 1/1/27 1/1/28 772All Customers Except those Noted Below
773 0 - 9 ccf $1.82 $2.04 $2.16 $2.29 $2.43
774 10 - 30 ccf $2.06 $2.31 $2.45 $2.59 $2.75
775 >31 ccf $3.05 $3.42 $3.62 $3.84 $4.07
776
777Multiple Apartments
778 Over 49 Units and Mobile Homes $2.40 $2.56 $2.87 $3.04 $3.22 $3.42 779
780Landscape
781 0 - 30 ccf $2.70 $2.06 $2.31 $2.45 $2.59 $2.75
782 >31 ccf $3.32 $3.05 $3.42 $3.62 $3.84 $4.07
783
784 Proposed Rates
785 Current 3/1/24 1/1/25 1/1/26 1/1/27 1/1/28
786Fireline
790 3" meter $83.73 $19.34 $21.66 $22.96 $24.33 $25.79
791 4" meter $111.64 $41.21 $46.15 $48.92 $51.86 $54.97 792 6" meter $167.46 $119.70 $134.07 $142.11 $150.64 $159.68 793 8" meter $223.28 $255.09 $285.70 $302.84 $321.01 $340.27 794 10" meter $279.10 $458.74 $513.79 $544.62 $577.29 $611.93 795
796Hydrant
797 Rate, $/ccf $3.33 $2.26 $2.53 $2.68 $2.84 $3.01
798 Per Day $10.81 $3.34 $3.43 $3.51 $3.60 $3.69
799
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
800Note 1: The existing rate structure is:
801 1 - 5 ccf/month $1.07per ccf
802 6 - 30 ccf/month $1.69per ccf
803 31 - 60 ccf/month $2.70per ccf
804 61 or more ccf/month $3.32per ccf
805
806
807 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
808Monthly Minimum Charge Current Rate $ Change Rate $ Change Rate $ Change Rate $ Change Rate $ Change 809Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers 810 1/2 " & 5/8" meter $30.42 $33.38 $2.96 $37.38 $4.01 $39.63 $2.24 $42.00 $2.38 $44.52 $2.52 811 3/4" meter $30.42 $33.38 $2.96 $37.38 $4.01 $39.63 $2.24 $42.00 $2.38 $44.52 $2.52 812 1" meter $44.01 $51.03 $7.02 $57.15 $6.12 $60.58 $3.43 $64.21 $3.63 $68.07 $3.85 813 1 1/2" meter $53.04 $95.15 $42.11 $106.56 $11.42 $112.96 $6.39 $119.74 $6.78 $126.92 $7.18 814 2" meter $152.54 $148.09 ($4.45) $165.86 $17.77 $175.81 $9.95 $186.36 $10.55 $197.54 $11.18 815 3" meter $324.45 $289.28 ($35.17) $323.99 $34.71 $343.43 $19.44 $364.04 $20.61 $385.88 $21.84 816 4" meter $550.59 $448.11 ($102.48) $501.88 $53.77 $532.00 $30.11 $563.92 $31.92 $597.75 $33.83 817 6" meter $1,138.62 $889.31 ($249.31) $996.03 $106.72 $1,055.79 $59.76 $1,119.14 $63.35 $1,186.29 $67.15 818 8" meter $1,636.17 $1,418.76 ($217.41) $1,589.01 $170.25 $1,684.35 $95.34 $1,785.41 $101.06 $1,892.54 $107.12 819
820 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
821Monthly Minimum Charge Current Rate % Change Rate % Change Rate % Change Rate % Change Rate % Change 822Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers 823 1/2 " & 5/8" meter $30.42 $33.38 9.7% $37.38 12.0% $39.63 6.0% $42.00 6.0% $44.52 6.0% 824 3/4" meter $30.42 $33.38 9.7% $37.38 12.0% $39.63 6.0% $42.00 6.0% $44.52 6.0% 825 1" meter $44.01 $51.03 15.9% $57.15 12.0% $60.58 6.0% $64.21 6.0% $68.07 6.0% 826 1 1/2" meter $53.04 $95.15 79.4% $106.56 12.0% $112.96 6.0% $119.74 6.0% $126.92 6.0% 827 2" meter $152.54 $148.09 -2.9% $165.86 12.0% $175.81 6.0% $186.36 6.0% $197.54 6.0% 828 3" meter $324.45 $289.28 -10.8% $323.99 12.0% $343.43 6.0% $364.04 6.0% $385.88 6.0% 829 4" meter $550.59 $448.11 -18.6% $501.88 12.0% $532.00 6.0% $563.92 6.0% $597.75 6.0% 830 6" meter $1,138.62 $889.31 -21.9% $996.03 12.0% $1,055.79 6.0% $1,119.14 6.0% $1,186.29 6.0% 831 8" meter $1,636.17 $1,418.76 -13.3% $1,589.01 12.0% $1,684.35 6.0% $1,785.41 6.0% $1,892.54 6.0% 832
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APPENDIX C: WATER RATE DESIGN
TABLE C-1
City of Rialto - 2024 Water and Wastewater Rate Study
Water Rate Design Calculations
833
834 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
835Volume Charge, $/ccf Current Rate $ Change Rate $ Change Rate $ Change Rate $ Change Rate $ Change 836All Customers Except those Noted Below
837 0 - 9 ccf $1.82 $2.04 $0.22 $2.16 $0.12 $2.29 $0.13 $2.43 $0.14 838 10 - 30 ccf $2.06 $2.31 $0.25 $2.45 $0.14 $2.59 $0.15 $2.75 $0.16 839 >31 ccf $3.05 $3.42 $0.37 $3.62 $0.20 $3.84 $0.22 $4.07 $0.23 840
841Multiple Apartments
842 Over 49 Units and Mobile Homes $2.40 $2.56 $0.16 $2.87 $0.31 $3.04 $0.17 $3.22 $0.18 $3.42 $0.19 843
844Landscape
845 0 - 30 ccf $2.70 $2.06 ($0.64) $2.31 $0.25 $2.45 $0.14 $2.59 $0.15 $2.75 $0.16 846 >31 ccf $3.32 $3.05 ($0.27) $3.42 $0.37 $3.62 $0.20 $3.84 $0.22 $4.07 $0.23 847
848 3/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
849Volume Charge, $/ccf Current Rate % Change Rate % Change Rate % Change Rate % Change Rate % Change 850All Customers Except those Noted Below
851 0 - 9 ccf $1.82 $2.04 12.0% $2.16 6.0% $2.29 6.0% $2.43 6.0% 852 10 - 30 ccf $2.06 $2.31 12.0% $2.45 6.0% $2.59 6.0% $2.75 6.0% 853 >31 ccf $3.05 $3.42 12.0% $3.62 6.0% $3.84 6.0% $4.07 6.0% 854
855Multiple Apartments
856 Over 49 Units and Mobile Homes $2.40 $2.56 6.8% $2.87 12.0% $3.04 6.0% $3.22 6.0% $3.42 6.0% 857
858Landscape
859 0 - 30 ccf $2.70 $2.06 -23.7% $2.31 12.0% $2.45 6.0% $2.59 6.0% $2.75 6.0% 860 >31 ccf $3.32 $3.05 -8.1% $3.42 12.0% $3.62 6.0% $3.84 6.0% $4.07 6.0% 01082024 Rialto Rate Model Draft
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2023 Water and Wastewater Rate Study – City of Rialto
1 01112024 RIALTO Rate Study Report DRAFT
Appendix D: Wastewater Cost of Service Analysis

APPENDIX D: WASTEWATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Wastewater Cost-of-Service Analysis Tables
TABLE D-1
Wastewater COSA - Functionalization Factors
System Function
Line Functionalization Direct AssignDirect Assign Math
No. Factors Total Treatment Collection Customer Admin Commerical RNHC Check Notes 1 Direct: Treatment 100.0% 100.0% TRUE Direct: Treatment 2 Direct: Collection 100.0% 100.0% TRUE Direct: Collection 3 Direct: Customer 100.0% 100.0% TRUE Direct: Customer 4 Direct: Admin 100.0% 100.0% TRUE Direct: Admin
5 Direct: Commercial 100.0% 100.0% TRUE Direct: Commercial 6 Direct: RNHC 100.0% 100.0% TRUE Direct: RNHC
7 Direct: Master Plan 100.0% 50.0% 50.0% TRUE Direct: Master Plan 8 Net Plant: % (1) 100.0% 77.0% 23.0% 0.0% 0.0% 0.0% TRUE Net Plant 9 Capital Charge: % (2) 100.0% 39.3% 5.7% 0.0% 55.0% 0.0% TRUE Capital Charge 10 WIFIA/I-Bank Debt Service 105.8% 34.2% 65.8% 0.0% 0.0% 0.0% 5.8% FALSE New Debt Service 11 W2 Wage $, Use to Define Labor Functionalization Factor$1,594,673 $536,238 $185,708 FALSE 12 Labor: % PLACEHOLDER (4) 100.0% 68.8% 23.1% 8.0% 0.0% 0.0% TRUE Labor 13 Electricity, Amount (5) $934,497 $890,301 $44,196 FALSE 14 Electricity, Percentage 100.0% 95.3% 4.7% 0.0% 0.0% 0.0% TRUE Electricity 15 Indirect: Per Rate Revenue Requirement, Percentage100.51% 47.3% 12.3% 1.1% 39.4% 0.4% -0.5% FALSE Rate Revenue Requirement Notes for Tables D-1 through D-5
(1) Refer to Table COS-2
(2) Refer to Table COS-3
(3) Refer to Table COS-3
(4) Refer to Table COS-10
(5) Based on a review of SCE power bills from CY 2022. Data provided by Veolia via City staff.

TABLE D-2
Wastewater COSA - Functionalization of Wastewater System Plant System Function
Line Direct Assign
No. Total Treatment Collection Customer Admin Commerical 1 Total $92,186,291$71,017,395$21,168,896 $0 $0 $0
2 As Percent 100.00% 77.04% 22.96% 0.00% 0.00% 0.00%
Source: City of Rialto 2022 Fixed Asset Data
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APPENDIX D: WASTEWATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Wastewater Cost-of-Service Analysis Tables
TABLE D-3
Wastewater COSA - Functionalization of CIP by Percentage System Function
Line Direct Assign Direct Assign
No. Total Treatment Collection Customer Admin Commerical RHNC 1 Sycamore Sewer Upsize 1 (3) $5,000,000 100.0%
2 Acacia Sewer Upsize 1 $2,000,000 100.0%
3 Digester No. 1 Activation & Digester No. 2 Rehabilitation$1,800,000 100.0% 4 Rialto Biosolids Project $26,400,000 100.0%
5 Agua Mansa Lift Station Upgrades $2,000,000 100.0%
6 P5 SEC 1 & 2 Upgrades $500,000 100.0%
7 Ayala Lift Station Upgrade & Repair $2,000,000 100.0% 8 Rialto WWTP Electrical Upgrade for Microgrid$8,800,000 100.0% 9 Rialto Habitat Nature Center $3,000,000 100.0% 100.0% TABLE D-4
Wastewater COSA - Functionalization of CIP by Dollar Amount System Function
Line Direct Assign Direct Assign
No. Total Treatment Collection Customer Admin Commerical RHNC 2 Sycamore Sewer Upsize 1 (3) $5,000,000 $0 $5,000,000 $0 $0 $0 $0 3 Acacia Sewer Upsize 1 $2,000,000 $2,000,000 $0 $0 $0 $0 $0 4 Digester No. 1 Activation & Digester No. 2 Rehabilitation$1,800,000 $1,800,000 $0 $0 $0 $0 $0 5 Rialto Biosolids Project $26,400,000 $0 $26,400,000 $0 $0 $0 $0 6 Agua Mansa Lift Station Upgrades $2,000,000 $2,000,000 $0 $0 $0 $0 $0 12 P5 SEC 1 & 2 Upgrades $500,000 $0 $500,000 $0 $0 $0 $0 16 Ayala Lift Station Upgrade & Repair $2,000,000 $0 $2,000,000 $0 $0 $0 $0 24 Rialto WWTP Electrical Upgrade for Microgrid$8,800,000 $8,800,000 $0 $0 $0 $0 $0 25 Rialto Habitat Nature Center $3,000,000 $3,000,000 $0 $0 $0 $0 $3,000,000 32 Total $51,500,000 $17,600,000 $33,900,000 $0 $0 $0 $3,000,000 As Percent 100% 34% 66% 0% 0% 0% 6%
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APPENDIX D: WASTEWATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Wastewater Cost-of-Service Analysis Tables
TABLE D-5
Wastewater COSA - Functionalization of Capital Charge
System Function
Line Component of Concession Funding
Total Capitalized
Amount (1) (2) Treatment Collection Customer Admin
Direct Assign
Commerical Total
1 Wastewater Capital Projects
2 S1 WWTP Improvements $26,768,554 100% 100%
3 S2 - S6 Sewer Main Replacement $31,230 100% 100%
4 S7 - WWTP FOG Modifications $0 100% 100%
5 SA - Manhole Rehabilitation $576,534 100% 100%
6 SB - Main Cleaning and Lining $0 100% 100%
7 SC - Studies $0 100% 100%
8 S1.1 - Digester 1 $384,020 100% 100%
9 S8 - Emergeny Repairs at WWTP $305,662 100% 100%
10 Rate Stabilization Fund $26,097,000 100% 100% Direct Allocation to Administration 11 Lease Payment $25,000,000 100% 100% Direct Allocation to Administration 12 Refinance Existing Debt, as net plant $24,111,000 77.0% 23.0% 0.0% 0.0% 0.0% 100% As Net Plant 13 Trustee Reserves (3) $9,481,000 100% 100% Direct Allocation to Administration 14 Debt Service Reserves $4,236,000 77.0% 23.0% 0.0% 0.0% 0.0% 100% As Net Plant 15 Due Dilligence/Transition Costs (4) $8,509,000 100% 100% Direct Allocation to Administration 16 Costs of Issuance (5) $7,933,000 39.3% 5.7% 0.0% 55.0% 0.0% 100% Weighted Average of All Other Items 17 Total $133,433,000$52,411,914$7,567,016 $0 $73,454,069 $0 18 As Percent 39.3% 5.7% 0.0% 55.0% 0.0%
Notes:
(1) Source: Staff report to March 12, 2012 Council Meeting, Table 2, except Capital Improvements, described in Note 2. (2) Capital Project funding per City's 2023 analysis of Facility Improvement Plan actual spending. FIP spending presented at 4/11/23 Council Meeting.

FIP spending is $35,000 lower than shown in the 2012 Staff Report. (3) Consists of Working Capital, Operating R&R account capitalization, and a reserve held by the Trustee. (4) Includes Technical, Due Diligence, and Commercial Development Costs, and Transition Costs (5) Includes development and financing costs of issuance, underwriter's discount 01082024 Rialto Rate Model DraftD1-D8 FG Solutions, LLC Copyright 2024 All Rights Reservved
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APPENDIX D: WASTEWATER COST-OF-SERVICE ANALYSIS
City of Rialto - 2024 Water and Wastewater Rate Study
Wastewater Cost-of-Service Analysis Tables
TABLE D-6
Wastewater COSA - Functionalization of Rate Revenue Requirement Line System Function Table B-1
No.

Test Year FY 23/24
Total Treatment Collection Customer Admin
Direct Assign
Commerical
Direct Assign
RHNC
Line No.

Reference
Functional-
ization Factor
1 Waterfall 1: Water Service Fee
2 Fixed Component $2,680,967 $2,065,332 $615,635 $0 $0 $0 $0 8 Net Plant 3 Routine R&R Component $275,238 $212,035 $63,203 $0 $0 $0 $0 8 Net Plant 4 Chemical Component $729,932 $729,932 $0 $0 $0 $0 $0 1 Direct: Treatment 5 Labor Component $3,847,946 $2,648,781 $890,701 $308,464 $0 $0 $0 12 Labor 6 Waterfall 1: Reimbursements
7 Insurance Reimbursement $999,756 $770,180 $229,576 $0 $0 $0 $0 8 Net Plant 8 Independent Engineer $109,349 $42,952 $6,201 $0 $60,196 $0 $0 9 Capital Charge 9 Maintenance $0 $0 $0 $0 $0 $0 $0 8 Net Plant
10 Waterfall 1: Retained RUA Expenses
11 Electricity $1,167,308 $1,112,101 $55,207 $0 $0 $0 $0 14 Electricity 12 Gas $188,520 $188,520 $0 $0 $0 $0 $0 1 Direct: Treatment 13 Contracted Services
14 City Contract (Transfer to General Fund)$685,000 $0 $0 $0 $685,000 $0 $0 4 Direct: Admin 15 Biosolids $887,285 $887,285 $0 $0 $0 $0 $0 1 Direct: Treatment 16 City Reimbursement (680 Admin) $1,072,830 $0 $0 $0 $1,072,830 $0 $0 4 Direct: Admin 17 Consulting Services $75,000 $0 $0 $0 $75,000 $0 $0 4 Direct: Admin 18 Consulting SWRCB Grant BDP $370,000 $0 $0 $0 $370,000 $0 $0 4 Direct: Admin 19 Consulting CEQA for Micro Grid $50,000 $50,000 $0 $0 $0 $0 $0 1 Direct: Treatment 20 Consulting Auditor $5,000 $0 $0 $0 $5,000 $0 $0 4 Direct: Admin 21 IT Services: Tyler and Paymentus $124,746 $0 $0 $0 $124,746 $0 $0 4 Direct: Admin 22 Other Services and Supplies
23 Rialto Habitat Nature Center O&M $0 $0 $0 $0 $0 $0 $0 4 Direct: Admin 24 Other Retained Services $275,930 $0 $0 $0 $275,930 $0 $0 4 Direct: Admin 25 Inland Empire Brine Line Fees (SBVMWD)$125,290 $125,290 $0 $0 $0 $0 $0 1 Direct: Treatment 26 Wastewater Services (Colton) $12,000 $0 $0 $0 $12,000 $0 $0 4 Direct: Admin 27 MIPP Services (Veolia) $111,920 $0 $0 $0 $0 $111,920 $0 5 Direct: Commercial 28 Waterfall 2: Annual Operating R&R Pmt$930,000 $0 $930,000 $0 $0 $0 $0 2 Direct: Collection 29 Waterfall 3: Capital Charges
30 Amount $12,682,000$4,981,436 $719,199 $0 $6,981,365 $0 $0 9 Capital Charge 32 New Capital Charges 0 $0 $0 $0 $0 $0 $0 10 New Debt Service 33 Waterfall 4: RWS Water Reserve Account Deposits238,082 $0 $0 $0 $238,082 $0 $0 4 Direct: Admin 34 Waterfall 5: RUA Lease Payment $1,600,000 $0 $0 $0 $1,600,000 $0 $0 4 Direct: Admin 01082024 Rialto Rate Model DraftD1-D8 FG Solutions, LLC Copyright 2024 All Rights Reservved
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Rialto City CouncilFebruary 27, 2024

Rialto City Council
February 27, 2024