City of RialtoWater SubcommitteePreliminary Water and Wastewater ScenariosSeptember 18, 20251
Agenda•Water Financial Plan Scenarios•Wastewater Financial Plan Scenarios2 Financial Plan Assumptions•No lease payments from RUA to the City for use of city assets are included•Revenues•No customer growth or change in demand is projected•Operating expenses •Operating expenses are projected to increase by on average 3.2% annually3 Key Financial Performance MarkersFund Balance, Trustee Coverage, and Debt CoverageRUA and Trustee Fund Balance 4The minimum fund balance for trustee reserves is 25% of operating expenses, capital charges, and debt service (see Trustee Reserve Target)Remaining funds after meeting the trustee reserve target (25%) are transferred to RUA reserves where CIP is funded. This fund balance must stay above $0 (see Alert Balance) Trustee CoverageDebt CoverageAs part of the City’s Concession Agreement, rates must be high enough to ensure that net revenues less capital charges and debt service are at least equal to 17.7% (for water) or 15% (for wastewater) of annual capital charges and debt serviceThe City has no existing debt. Any proposed debt issuance will have a debt coverage requirement typically equal to 125%. This means that net revenues divided by annual debt service payments must be at least greater than 125% Water Fund Balances•Trustee Fund•Beginning balance = $4.5M•RUA Fund•Beginning balance = $1.0M (Combined Remedy Reimbursement)•Construction Fund•Beginning balance = $3.2M•Rate Stabilization for CIP and O&M•Available money on hand = $6.6M 5 Water CIP
6* Water CIP is annually inflated by 4%, except for grant funded projects which are non-inflatedCapital Improvement Plan (CIP) (Inflated) Planned Status Funding Eligibility FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Water Main: Etiwanda (Riverside to Eucalyptus) Priority Rates / 20% DIF $0 $5,408,000 $0 $0 $0 $5,408,000Pressure Relief Valves (PRVs) Zone 2 to Zone 3 Priority 100% DIF $0 $648,960 $0 $0 $0 $648,960Well “City 3A” Groundwater Treatment System Priority Rates / Grants / 25% DIF $3,744,000 $3,893,760 $0 $0 $0 $7,637,7604” S. Oakdale & S. Marcella (E Rialto and Allen) Second Priority Rates $0 $0 $0 $4,211,491 $0 $4,211,491Security for Water and Wastewater Grant Funded Grants $0 $2,000,000 $0 $0 $0 $2,000,000Automatic Meter Infrastructure (AMI) Grant Funded Grants $4,000,000 $4,000,000 $0 $0 $0 $8,000,000Service line: South Alice, South Palm, West Vodden, Alru St. Third Priority Rates $0 $778,752 $809,902 $0 $0 $1,588,654Service line: Bonnie View (Acacia and Eucalyptus) Third Priority Rates $0 $0 $3,239,608 $0 $0 $3,239,608Cedar Reservoir 2, Overhaul, and Dome PreservationDefer with Caution Rates$0 $0 $0 $3,509,576 $0 $3,509,576Service Line, Hydrant Laterals, Etiwanda Defer with Caution Rates $0 $0 $4,724,429 $0 $0 $4,724,429Serviceline&Hydrant: Woodcrest, Yucca, etc Defer with Caution Rates $0 $0 $0 $2,807,661 $0 $2,807,661Service Line: Cedar & Larch Defer with Caution Rates $0 $0 $0 $0 $3,211,964 $3,211,964Service Line & Hydrant: Palm, Orange, Olive, Date Defer with Caution Rates $0 $0 $0 $0 $4,817,945 $4,817,945Total - Capital Projects $7,744,000 $16,729,472 $8,773,939 $10,528,727 $8,029,909 $51,806,047 Water CIP
7 Total Value of Projects: •Priority:$13,694,720•Second Priority: $4,211,491•Grant Funded: $10,000,000•Third Priority: $4,828,262•Defer with Caution: $19,071,574
Water CIP ScenarioPriority, Second Priority, and Grant Funded CIP , Funded by Rates/ Grants/ DIF/ Rate Stabilization 8CIP Funding Sources:•Trustee Rate Stabilization = $3.5 Million•DIF = $4 Million•Grants= $14.5 Million•Rates = $6 Million
Water No Revenue Adjustment ScenarioPriority, Second Priority, and Grant Funded CIP + O&M, Funded by Rates/ Grants/ DIF/ Rate Stabilization 9 In this scenario the City does not meet its trustee coverage requirements starting in FY 2027 No Revenue Adjustment Scenario FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Rate Adjustment 0% 0% 0% 0% 0%0% Water Proposed ScenarioPriority, Second Priority, and Grant Funded CIP + O&M, Funded by Rates/ Grants/ DIF/ Rate Stabilization 10 In this scenario the City will meet its trustee coverage requirements in each year Proposed Scenario FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Rate Adjustment (Proposed Scenario) 19% 9% 3% 3% 3%37%Rate Adjustment (Including Third Priority CIP) 23% 18% 17% 3% 3%64% Water Customer ImpactsProposed Scenario based on 19%/23% Revenue Adjustment in FY 2026 11Proposed Scenario FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Rate Adjustment (Proposed Scenario) 19% 9% 3% 3% 3%37%Rate Adjustment (Including Third Priority CIP) 23% 18% 17% 3% 3%64%*Based on average monthly residential customer usage of 15 ccf
Wastewater Fund Balances•Trustee Fund•Beginning balance = $7.6M•RUA Fund•Beginning balance = $10.0M•Construction Fund•Beginning balance = $11.7M•Rate Stabilization for CIP and O&M•Available money on hand = $23.3M 12 Wastewater CIP
13*Wastewater CIP is annually inflated by 4%, except for grant funded projects and the Solids Handing project which are non-inflated Capital Improvement Plan (CIP) (Inflated) Planned Status Funding Eligibility FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Solids Handling Priority Rates / 20% DIF $12,000,000 $24,720,000 $0 $0 $0 $36,720,000Upsizing Sewer: Sycamore Priority Rates / 20% DIF $5,740,800 $0 $0 $0 $0 $5,740,800Agua Mansa Sewer Lift Station Priority Rates / 20% DIF $0 $0 $3,374,592 $701,915 $0 $4,076,507Ayala Lift Station Priority Rates / 20% DIF $0 $0 $0 $3,509,576 $0 $3,509,576Upsizing Sewer: Willow Ave (Grove to Foothill) Priority Rates / 50% DIF $0 $0 $674,918 $0 $0 $674,918Secondary EQ Influent Filter Pump Priority Rates $0 $0 $0 $3,509,576 $0 $3,509,576Upsizing Sewer (Acacia:Bonnie View to South) Priority Rates / 20% DIF $0 $648,960 $0 $0 $0 $648,960Upsizing Sewer: Merrill Ave (Acacia to Sycamore) Priority Rates / 20% DIF $0 $2,595,840 $0 $0 $0 $2,595,840Plant 5 Clarifiers Priority Rates $0 $648,960 $0 $0 $0 $648,960Plant 5 Aeration BasinsPriorityRates$0 $0 $1,349,837 $0 $0 $1,349,837 Upsizing Sewer: Sycamore Ave (Huff to Randall) Priority Rates / 20% DIF $0 $0 $2,024,755 $0 $0 $2,024,755Overhaul Headworks, Plant 5 Priority Rates / 20% DIF $0 $0 $0 $1,403,830 $0 $1,403,830Spencer Aeration Blowers Priority Rates $0 $0 $0 $0 $1,094,988 $1,094,988Barscreen #1 Replacement Priority Rates $0 $0 $0 $0 $364,996 $364,996Future Sewer Main Replacement 2028 Priority Rates $0 $0 $0 $1,403,830 $0 $1,403,830Future Sewer Main Replacement 2029Priority Rates$0 $0 $0 $0 $1,459,983 $1,459,9834th Disk Filter Priority 100% DIF $0 $0 $0 $1,052,873 $0 $1,052,873Security Project - Wastewater Grant Funded Grants $2,000,000 $0 $0 $0 $0 $2,000,000Manhole 2026 Defer with Caution Rates $0 $259,584 $0 $0 $0 $259,584Demolish Plants 1 and 2 Defer with Caution Rates $0 $3,063,091 $0 $0 $0 $3,063,091Manhole 2027 Defer with Caution Rates $0 $0 $269,967 $0 $0 $269,967Manhole 2028 Defer with Caution Rates $0 $0 $0 $280,766 $0 $280,766Flare and Biogas System Modifications Defer with Caution Rates $0 $0 $0 $4,211,491 $0 $4,211,491Manhole 2029 Defer with Caution Rates $0 $0 $0 $0 $291,997 $291,997Electrical Upgrade Defer with Caution Rates / 20% DIF $3,600,480 $7,469,530 $0 $0 $0 $11,070,010Backup Power (CoGen) Defer with Caution Rates / 20% DIF $0 $9,013,333 $18,459,769 $0 $0 $27,473,101SCADA Upgrades to Lift Stations Defer with Caution Rates / 20% DIF $0 $0 $0 $0 $1,094,988 $1,094,988Total - Capital Projects $23,341,280 $48,419,298 $26,153,838 $16,073,857 $4,306,951 $118,295,224 Wastewater CIP
14 Total Value of Projects: •Priority: $68,280,229•Grant Funded : $2,000,000•Defer with Caution : $48,014,995
Wastewater CIP ScenarioPriority and Grant Funded CIP , Funded by Rates/ DIF/ Rate Stabilization/ Debt 15CIP Funding Sources:•Trustee Rate Stabilization = $21.3 Million•DIF = $15.7 Million•Grants= $2 Million•Debt = $5 Million•Rates = $26.2 Million•With no debt CIP funded by rates would be $31.2 Million ($5 Million Increase)
Wastewater No Revenue Adjustment and No Debt ScenarioPriority and Grant Funded CIP + O&M, Funded by Rates/ Grants/ DIF/ Rate Stabilization 16 In this scenario the City does not meet its trustee coverage requirements starting in FY 2027 No Revenue Adjustment Scenario FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Rate Adjustment 0% 0% 0% 0% 0%0% Wastewater Proposed ScenarioPriority and Grant Funded CIP + O&M, Funded by Rates/ Grants/ DIF/ Revenue Stabilization/ Debt 17 In this scenario the City will meet its trustee coverage requirements in each yearFor the City’s new debt issuance ($5 Million in FY 2027), the City will meet its debt coverage requirements in each year Proposed Scenario FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Rate Adjustment 5% 5% 5% 4% 4%23% Wastewater Customer ImpactsProposed Scenario based on 5% Revenue Adjustment in FY 2026 18Proposed Scenario FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Rate Adjustment 5% 5% 5% 4% 4%23%
Contact Information
Sanjay GaurFounder / [email protected] PhanPrincipal [email protected] HunzickerProject [email protected]