Public Hearing forProposed Water and Wastewater Rate Adjustments City of Rialto/Rialto Utility Authority
February 27, 2024
Agenda
Goals of This Presentation
Revenue Analysis Summary: Status Quo
No Rate Increase, No CIP
Proposed Rate Scenario
High Priority CIP Projects
Water then Sewer
Agenda (cont.)
Results (Water First, Then Wastewater)
Review Existing Rate Schedule
Cost-of-Service Analysis Methodology Overview
Proposed Changes to Rate Structure
Proposed Rate Structure
Monthly Bill Comparison
Comparator Rates
Water & Wastewater Public Hearing Schedule
Goals of This Presentation
Present rate study results
Show proposed rate structure changes
Show proposed rate schedule
Show effect on monthly bills
Revenue Analysis SummaryStatus Quo: No Rate Increases; No CIP $13.2M in unfunded water revenue stabilization in next five years Monthly bill if rate increases are applied across the board to Monthly Service Charges and Commodity Charges.
Actual rate structure alternatives considered by the City may result in different monthly bill totals.
Proposed Rate Scenario
High-priority CIP
~$60M City funded capital in addition to grant funding
30-year debt at 6% interest rate
By FY 27/28, collect depreciation expense through rates No external Revenue Stabilization
High-Priority Water Capital Improvement
High-Priority Wastewater Capital Improvement
Existing Water Rate Schedule
Existing Water Rate Schedule
Water Cost-of-Service Analysis Methodology Overview
Three steps in a Cost-of-Service Analysis
Functionalization: divide costs into system functions (source, distribution, customer, meters, administration, public fire protection, public and private fire protection) Allocation: divide functionalized costs according to service characteristics (average day use, peak use, customer accounts, meter equivalents, public fire protection, public and private fire protection; isolate costs to be included in tiered rate calculations) Distribution: define revenue requirement for each customer class
Proposed Changes to Rate Structure
Redefine water tiers
Tier 1 aligns with ~indoor water use for single-family residential customers Simplify rate structure
Maintain existing customer classes
Maintain a policy of not offering Tier 1 to landscape customers Use non-rate revenues to lower the Tier 1 and Tier 2 rates
Proposed Rate Schedule: Monthly Minimum Charge
Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers $1,785.35
Proposed Rate Schedule: Monthly Minimum Charge
Policy tradeoff: increase the Monthly Minimum Charge by $1/month, decrease the volume charge by $0.05/ccf.
Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers $1,785.35
Proposed Rate Schedule: Monthly Minimum Charge
Policy tradeoff: increase the Monthly Minimum Charge by $1/month, decrease the volume charge by $0.05/ccf.
Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers $1,785.35
Proposed Rate Schedule: Volume Charge
Current rates for each tier
0 – 5: $1.07/ccf
6 – 30: $1.69/ccf
31 – 60: $2.70/ccf
> 61: $3.32/ccf
Rialto residential monthly average water use of 16 ccf per month will change from a monthly bill of $54.36 to $64.18 per month.
Proposed Rate Schedule: Volume Charge
Current rates for each tier
0 – 5: $1.07/ccf
6 – 30: $1.69/ccf
31 – 60: $2.70/ccf
> 61: $3.32/ccf
Proposed Rate Schedule: Volume Charge
Current rates for each tier
0 – 5: $1.07/ccf
6 – 30: $1.69/ccf
31 – 60: $2.70/ccf
> 61: $3.32/ccf
Existing Wastewater Rate Schedule
Existing Wastewater Rate Schedule
Wastewater Cost-of-Service Analysis Methodology Overview Three steps in a Cost-of-Service Analysis
Functionalization: divide costs into system functions (treatment, collection, customer, and administration) Allocation: divide functionalized costs according to service characteristics (flow, biochemical oxygen demand, total suspended solids, customer) Distribution: define revenue requirement for each customer class
Wastewater Rate Structure Notes
Extraterritorial customers continue to pay 1.3X rate charged to in-City customers More gradual Commercial IV rate increases
Revenue neutral, by adjusting Commercial II rates
Proposed Wastewater Rates
Proposed Wastewater Rates
Comparator Rates
Water & Wastewater Prop. 218 Notification Process
The City/RUA is committed to a transparent public rate-setting process. Proposition 218 requires all property owners to be notified by mail at least 45 days before the public hearing date. The City/RUA went above the minimum requirement by:
Mailing Prop. 218 notices to property owners as well as to the utility customer of record in English and Spanish.
Making available the Final Draft Water and Wastewater Report for public review on the City’s website.
Establishing a dedicated email address of [email protected]
Water & Wastewater Prop. 218 Notification Process
Hosting 4 Public Engagement Workshops with a presentation in Spanish to answer questions and receive feedback on the rate-setting process. Workshops were advertised in the Prop. 218 Notification, city social media platforms of Nextdoor, Facebook, Instagram, and “X”.
Attending the Rialto Farmers Market in January and February to answer questions and receive feedback on the rate-setting process.
Dedicating a section of the city website’s homepage to link to information about the Rate Study, Prop. 218 Protest Process, and Prop. 218 Mailed Notification in English and Spanish.
Survey Results
To date, with a presence at the weekly Farmers Market, Public Engagement Workshops, and Rialto Community Leader Engagement, staff has reached 109 residents about the proposed rate adjustments. 63% of Residents Surveyed are Very/Somewhat Satisfied with their Water Service 82% of Residents Surveyed are Very/Somewhat Satisfied with their Sewer Service 54% of Residents Surveyed say their Water bill is Very/Somewhat Affordable 69% of Residents Surveyed say their Sewer bill is Very/Somewhat Affordable
Recommendation
Staff recommends that the City Council and Rialto Utility Authority Board conduct a Public Hearing, as Required Under Proposition 218, to Consider and Approve Resolutions Approving the Proposed Adjustments for Water and Wastewater Services as supported by the FG Solutions Financial Planning Analysis Report.