Proposed Water and Wastewater
Rate Adjustments
City of Rialto/Rialto Utility Authority
April 23, 2024 City Council Meeting
2 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
3 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
• Requested action: Consider setting a Public Hearing for June 25, 2024, regarding Water and Wastewater Utility Services Rate Adjustments.
4 Goals of This Presentation
• Present rate study results
• Show proposed rate structure changes
• Show proposed rate schedule
• Show effect on monthly bills
5 Revenue Analysis Summary
Status Quo: No Rate Increases; No CIP
• $26M in revenues needed through FY 28/29.
• Required to meet cash needs of utility
• Required to meet debt coverage requirements of the Concession Agreement
• No capital improvements
6 Proposed Rate Scenario
• High-priority CIP
• ~$60M City funded capital in addition to grant funding • 30-year debt at 6% interest rate
• Phasing-in collecting depreciation expense through rates • No external Revenue Stabilization after 2026
• 2024 and projected 2026 Interfund Loans to Water
7 High-Priority Water Capital Improvement
Total Project
Cost
Grant/ARPA
Funded
Development
Impact Fee
(DIF)1
Remaining
Cost Funded
by Water
Rates
Watermain Replacement
Project: Etiwanda from
Riverside to Eucalyptus
$6.7 million $2.9 million $3.8 million
Water System Security
Upgrades
$2 million $2 million
Automatic Meter Infrastructure
Upgrades
$8 million $8 million
City 3A Groundwater
Treatment Project
$4.2 million $2 million $2.2 million
TOTAL $20.9 million $12 million $2.9 million $6 million 57% 14% 29%
8 High-Priority Wastewater Capital Improvement
Total
Project
Cost
ARPA1
Funded
RUA
Reserves
Development
Impact Fee
(DIF)2
Remaining
Cost Funded
by Sewer Rates
Sewer System Security
Upgrades
$2 million $2 million
Upsizing Sewer Mains in
Sycamore Ave. and moving
flows to Acacia Ave. via
Baseline Road (Master Plan)
$5 million $5 million
Upsizing Sewer Mains in
Acacia Ave. - Victoria to
McKinley (Master Plan)
$2 million $2 million
Digester 1 and 2 Transition,
Cleaning, and Rehabilitation
$1.8 million $1.8 million
Solids Handling Upgrades at
the WWTP
$26.4
million
$10
million
$400,000 $16 million
Agua Mansa Sewer Lift
Station
$2 million $2 million
Plant 5 Secondary Effluent
Clarifiers A&B Overhaul
$500,000 $500,000
Ayala Lift Station Upgrade
and Repair
$2 million $2 million
Electrical Upgrade $8.8 million $8.8 million
TOTAL $50.5
million
$2
million
$10
million
$7.4 million $31.1 million
4% 20% 15% 62%
9 Existing Water Rate Schedule
Monthly Mininum Charge
Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers 1/2 " & 5/8" meter $30.42
3/4" meter $30.42
1" meter $44.01
1 1/2" meter $53.04
2" meter $152.54
3" meter $324.45
4" meter $550.59
6" meter $1,138.62
8" meter $1,636.17
Fire Hydrant Water $324.45
10 Existing Water Rate Schedule
Volume Charges, $/ccf
All Customers Except those Noted Below
1 - 5 Units $1.07
6 - 30 Units $1.69
31 - 60 Units $2.70
61 - Over units $3.32
Multiple Apartments
Over 49 Units and Mobile Homes $2.40
Landscape
1 to 30 Units $2.70
31 and over units $3.32
Fireline ($/month/inch diameter)
Rate $27.91
Hydrant
Water Use, $/ccf $3.33
11 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 12 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
Residential, Multi-family < or = 49 units, Commercial, Industrial Current Proposed
Tier 1 0 - 5 ccf/month 0 - 9 ccf/month
Tier 2 6 - 30 ccf/month 10 - 30 ccf/month
Tier 3 31 - 60 ccf/month >30 ccf/month
Tier 4 > 60 ccf/month Discontinued
Multi-Family > 49 units
Current Proposed
Uniform Block: no tiers Uniform Block: no tiers
Landscape
Current Proposed
Tier 2 0 - 30 ccf/month 0 - 30 ccf/month
Tier 3 > 30 ccf/month > 30 ccf/month
13 Proposed Rate Schedule: Monthly
Minimum Charge
Meter Proposed Monthly Minimum Charges
Size Existing 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029 5/8 x 3/4" $30.42 $34.53 $39.51 $42.46 $45.63 $49.03
1" $44.01 $53.03 $60.68 $65.21 $70.07 $75.30
1-1/2" $53.04 $99.28 $113.61 $122.08 $131.19 $140.98
2" $152.54 $154.79 $177.12 $190.33 $204.53 $219.79
3" $324.45 $302.80 $346.48 $372.33 $400.10 $429.95
4" $550.59 $469.31 $537.01 $577.07 $620.12 $666.38
6" $1,138.62 $931.84 $1,066.26 $1,145.81 $1,231.28 $1,323.14 8" $1,636.17 $1,486.88 $1,701.37 $1,828.29 $1,964.68 $2,111.24 14 Proposed Rate Schedule: Monthly
Minimum Charge
Monthly 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029
Minimum Charge Current Rate $ Change Rate $ Change Rate $ Change Rate $ Change Rate $ Change Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers 1/2 " & 5/8" meter $30.42 $34.53 $4.11 $39.51 $4.98 $42.46 $2.95 $45.63 $3.17 $49.03 $3.40 3/4" meter $30.42 $34.53 $4.11 $39.51 $4.98 $42.46 $2.95 $45.63 $3.17 $49.03 $3.40 1" meter $44.01 $53.03 $9.02 $60.68 $7.65 $65.21 $4.53 $70.07 $4.86 $75.30 $5.23 1 1/2" meter $53.04 $99.28 $46.24 $113.61 $14.32 $122.08 $8.48 $131.19 $9.11 $140.98 $9.79 2" meter $152.54 $154.79 $2.25 $177.12 $22.33 $190.33 $13.21 $204.53 $14.20 $219.79 $15.26 3" meter $324.45 $302.80 ($21.65) $346.48 $43.68 $372.33 $25.85 $400.10 $27.78 $429.95 $29.85 4" meter $550.59 $469.31 ($81.28) $537.01 $67.70 $577.07 $40.06 $620.12 $43.05 $666.38 $46.26 6" meter $1,138.62 $931.84 ($206.78) $1,066.26 $134.42 $1,145.81 $79.54 $1,231.28 $85.48 $1,323.14 $91.85 8" meter $1,636.17 $1,486.88 ($149.29) $1,701.37 $214.48 $1,828.29 $126.92 $1,964.68 $136.39 $2,111.24 $146.57 15 Proposed Rate Schedule: Monthly
Minimum Charge
Monthly 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029
Minimum Charge Current Rate % Change Rate % Change Rate % Change Rate % Change Rate % Change Single Family Residences, Multiple Family Connections, Commercial, Landscape, and Industrial Service Customers 1/2 " & 5/8" meter $30.42 $34.53 13.5% $39.51 14.4% $42.46 7.5% $45.63 7.5% $49.03 7.5% 3/4" meter $30.42 $34.53 13.5% $39.51 14.4% $42.46 7.5% $45.63 7.5% $49.03 7.5% 1" meter $44.01 $53.03 20.5% $60.68 14.4% $65.21 7.5% $70.07 7.5% $75.30 7.5% 1 1/2" meter $53.04 $99.28 87.2% $113.61 14.4% $122.08 7.5% $131.19 7.5% $140.98 7.5% 2" meter $152.54 $154.79 1.5% $177.12 14.4% $190.33 7.5% $204.53 7.5% $219.79 7.5% 3" meter $324.45 $302.80 -6.7% $346.48 14.4% $372.33 7.5% $400.10 7.5% $429.95 7.5% 4" meter $550.59 $469.31 -14.8% $537.01 14.4% $577.07 7.5% $620.12 7.5% $666.38 7.5% 6" meter $1,138.62 $931.84 -18.2% $1,066.26 14.4% $1,145.81 7.5% $1,231.28 7.5% $1,323.14 7.5% 8" meter $1,636.17 $1,486.88 -9.1% $1,701.37 14.4% $1,828.29 7.5% $1,964.68 7.5% $2,111.24 7.5% 16 Proposed Rate Schedule: Volume Charge
Note 1. Current tiers are:
• 0 – 5: $1.07/ccf
• 6 – 30: $1.69/ccf
• 31 – 60: $2.70/ccf
• > 61: $3.32/ccf
Proposed Volume Charges
Existing 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029
Residential and Commercial
0 - 9 ccf per month See Note 1 $1.95 $2.20 $2.36 $2.54 $2.73 10 - 30 ccf per month See Note 1 $2.19 $2.47 $2.66 $2.85 $3.07 >31 ccf per month See Note 1 $3.19 $3.62 $3.89 $4.18 $4.49 Multiple Apartments Over 49 Units and Mobile Homes
All water use $2.40 $2.35 $2.66 $2.86 $3.07 $3.30
Landscape
0 - 30 ccf per month $2.70 $2.19 $2.47 $2.66 $2.85 $3.07 >31 ccf per month $3.32 $3.19 $3.62 $3.89 $4.18 $4.49
17 Proposed Rate Schedule: Volume Charge
Note 1. Current tiers are:
• 0 – 5: $1.07/ccf
• 6 – 30: $1.69/ccf
• 31 – 60: $2.70/ccf
• > 61: $3.32/ccf
1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029
Volume Charge, $/ccf Current Rate $ Change Rate $ Change Rate $ Change Rate $ Change Rate $ Change All Customers Except those Noted Below
0 - 9 ccf $1.95 $2.20 $0.25 $2.36 $0.16 $2.54 $0.18 $2.73 $0.19 10 - 30 ccf $2.19 $2.47 $0.28 $2.66 $0.18 $2.85 $0.20 $3.07 $0.21 >31 ccf $3.19 $3.62 $0.42 $3.89 $0.27 $4.18 $0.29 $4.49 $0.31 Multiple Apartments
Over 49 Units and Mo $2.40 $2.35 ($0.05) $2.66 $0.30 $2.86 $0.20 $3.07 $0.21 $3.30 $0.23 Landscape
0 - 30 ccf $2.70 $2.19 ($0.51) $2.47 $0.28 $2.66 $0.18 $2.85 $0.20 $3.07 $0.21 >31 ccf $3.32 $3.19 ($0.13) $3.62 $0.42 $3.89 $0.27 $4.18 $0.29 $4.49 $0.31 18 Proposed Rate Schedule: Volume Charge
Note 1. Current tiers are:
• 0 – 5: $1.07/ccf
• 6 – 30: $1.69/ccf
• 31 – 60: $2.70/ccf
• > 61: $3.32/ccf
1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2028
Volume Charge, $/ccf Current Rate % Change Rate % Change Rate % Change Rate % Change Rate % Change All Customers Except those Noted Below
0 - 9 ccf $1.95 $2.20 12.6% $2.36 7.5% $2.54 7.5% $2.73 7.5% 10 - 30 ccf $2.19 $2.47 12.8% $2.66 7.5% $2.85 7.5% $3.07 7.5% >31 ccf $3.19 $3.62 13.3% $3.89 7.5% $4.18 7.5% $4.49 7.5% Multiple Apartments
Over 49 Units and Mo $2.40 $2.35 -1.9% $2.66 12.9% $2.86 7.5% $3.07 7.5% $3.30 7.5% Landscape
0 - 30 ccf $2.70 $2.19 -18.8% $2.47 12.8% $2.66 7.5% $2.85 7.5% $3.07 7.5% >31 ccf $3.32 $3.19 -3.8% $3.62 13.3% $3.89 7.5% $4.18 7.5% $4.49 7.5% 19 Existing Wastewater Rate Schedule
Current
Customer Type CY 2023
Group I ($/month/residential unit)
Residential $62.19
Residential X 1.3 $80.84
Residential Multi. $62.19
Group II, $/ccf metered water use
Commercial $6.77
(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
(includes - Hotels /Motels (no restaurant), repair and Service Station, Shopping Center, Recreation Park, Nursery/Florist,
Manufacturing - Non-Domestic, Lumber Yard, Nightclub, Bar, Hall) 20 Existing Wastewater Rate Schedule
Current
Customer Type CY 2023
Group IV, $/ccf metered water use
Commercial $10.17
(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
Junior High $2.03
High $2.03
Continuation $0.85
Adult Education $0.85
Group VI, $/ccf water use
Large Volume $6.77
Hospital $6.77
Commercial Building $6.77
21 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 22 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
23 Proposed Wastewater Rates
Proposed Rates
Customer Type Existing 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029 Group V, $/student/month
Schools -
Elementary $0.85 $1.00 $1.15 $1.25 $1.35 $1.48
Junior High $2.03 $2.30 $2.60 $2.80 $2.99 $3.16
High $2.03 $2.30 $2.60 $2.80 $2.99 $3.16
Continuation $0.85 $1.00 $1.15 $1.25 $1.35 $1.48
Adult Education $0.85 $1.00 $1.15 $1.25 $1.35 $1.48
Group VI, $/ccf water use
Large Volume $6.77 $5.80 $6.10 $6.40 $6.70 $6.85
Hospital $6.77 $5.80 $6.10 $6.40 $6.70 $6.85
Commercial Building $6.77 $5.80 $6.10 $6.40 $6.70 $6.85 24 Proposed Wastewater Rates
Proposed Rates
Customer Type Existing 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029 Group I ($/month/residential unit)
Residential $62.19 $67.14 $71.07 $75.23 $79.64 $84.31
Residential X 1.3 $80.84 $87.28 $92.39 $97.80 $103.53 $109.60 Residential Multi. $62.19 $67.14 $71.07 $75.23 $79.64 $84.31 Group II, $/ccf metered water use
Commercial $6.77 $5.80 $6.10 $6.40 $6.70 $6.85
(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 $8.32 $8.80 $9.32 $9.87 $10.44
(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 $12.06 $13.00 $14.08 $15.33 $17.59
(includes - Hotels /Motels (w/restaurants), Bakeries, Dairy, Supermarkets, Dairy, Meat Market, Mom & Pop, Mortuary, Restaurants, Fast Food, Catering)
25 Monthly Rate Comparison: WATER Monthly Rate Comparison: WASTEWATER 2025 Monthly Rate 2025 Monthly Rate
Water
(based on 5/8" or 1/2" meter
size using 16 hcf monthly)
Wastewater
(based on single-family
residential)
Fontana Water Company
(Water) 105.79 City of Rialto 67.14
City of Banning 82.98 City of Banning 49.01
Marygold Water 82.53 San Bernardino Municipal
Water District 48.98
Jurupa Community Services
District
69.77 Loma Linda, City of 46.46
City of Rialto 67.41 Jurupa Community Services
District 46.37
Cucamonga Valley Water
District (CVWD) 65.47 City of Corona DWP 45.60
City of Corona DWP 64.69 East Valley Water District 43.09 East Valley Water District 63.38 City of Redlands Municipal Utilities 40.15
West Valley Water District
(WVWD) 57.31 City of Riverside Public Utilities 39.59
Loma Linda, City of 55.95 Fontana Water Company: City
of Fontana (Sewer) 35.14
City of Colton 53.10 City of Colton 34.33
City of Riverside Public
Utilities 52.19 Cucamonga Valley Water
District (CVWD) 32.02
San Bernardino Municipal
Water District 49.69
City of Redlands Municipal
Utilities 49.36
Comparator
Rates
26 Recommendation
Staff recommends that the City Council and Rialto Utility Authority Board Adopt Resolutions to set a Public Hearing for June 25, 2024, as Required Under Proposition 218 to
Consider the Proposed Water and Wastewater Utility
Services Rate Adjustments as supported by the FG
Solutions, LLC Financial Rate Analysis.