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1 RiversideCA.gov1
RiversideCA.gov
SEWER SERVICEPROPOSED FIVE-YEAR RATE PLANMobility & Infrastructure CommitteeJune 12, 2025Public Works Department RiversideCA.gov2
WHAT WE DOServe 100Kcustomers & 3 community service districts Operate24/7∙365
Ensurecompliancewith Federal & State regulations
Protect public health &environment
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2 RiversideCA.gov3
POLICY AND REGULATORY OVERSIGHT2016 Sewer Fund Reserve Policy•Fiscal stability & guidance to staff on financial management of Sewer Fund •“Reserve Goal” is annual ending balance 10% above policy minimum targetRWQCP 2013 NPDES “discharge” Permit•New permit will inevitably include more stringent requirementsSewer Collection System Statewide General Requirements•Regulations require prioritized corrective actions & capital improvement planState Water Resources Control Board – Water Quality Enforcement Policy RiversideCA.gov4
HISTORY OF SEWER RATESImplemented Rate IncreaseAdopted Rate IncreaseSewer Service8.5%8.5%7/1/20148.5%8.5%7/1/20158.5%8.5%7/1/20168.5%8.5%7/1/20170%8.5%7/1/20180%-7/1/20190%-7/1/20200%-7/1/20210%-7/1/20220%-7/1/20230%-7/1/2024No Rate Increases since 2017Final increase of prior rate plan was paused due to favorable financial position at that time$580M in CIP projects remaining from 2019 Sewer Master Plan 5/30/2025
3 RiversideCA.gov5
SEWER PLANT INFLUENT FLOW
68%12%20%RWQCP Influent Contributions
City Residential
City Commercial
Community Service DistrictsCommunity Service Districts pay annually based on actual current-day costs City residential customers pay 2017 ratesCity commercial customers pay 2017 rates RiversideCA.gov6
Reserves, Settlements, & Grants for Projects•Utilized reserves and settlement funds for projects to reduce sewer rate pressures•Since 2018 executed $65M in projects 35% below estimated costs ($65M vs. $101M) Process Efficiencies, Innovation, & Chemicals•Optimized disinfection process. Received State approval to reduce chemical use•Re-bid bulk chemicals•Estimated savings up to $1.6M per yearWHATS BEEN DONE TO ADAPT
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4 RiversideCA.gov7
COSTS OUTPACING EXISTING REVENUEInflation
Higher costs•Chemicals (135%)•Biosolids disposal (56%)•Construction (57%)•Labor RegulationsSewer Fund has absorbed 29.1% in O&M increases RiversideCA.gov8
PROJECTED RESERVESFail to maintain the minimum reserve goal defined by City Council Be unable to fund any Capital Improvement ProgramIf unchanged, by 2027 the fund will:
Reserve Goal
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5 RiversideCA.gov9
RECOMMENDED RATE PLAN & COMPARISONSewer Service RateRecommended IncreaseRecommended Effective Date5.0%Jan 20265.0%July 20275.0%July 20285.0%July 20295.0%July 2030Recommended January 2026 RiversideCA.gov10
FUTURE REVENUES & EXPENDITURESNew rates will:
Maintain consistent and continuous service
Supports additional bonds to fund CIP program
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6 RiversideCA.gov11
FUTURE RESERVESAchieve and maintain Reserve Goal
$150M in CIP projects over 10-years
RiversideCA.gov12
FUTURE-PROOFING SEWERReduce liability associated with aging & deteriorating infrastructure Fund best-practice O&M activities such as digester cleaning and MBR filter replacement programPosition for growth by expanding system capacity and eliminating bottlenecks
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7 RiversideCA.gov13
DELAYED IMPLEMENTATIONSewer Service RateRate IncreaseEffective Date-Jan 2026≥ 5.5%July 2027≥ 5.5%July 2028≥ 5.5%July 2029≥ 5.5%July 2030≥ 5.5%July 2031Persistent Inflationary PressuresGeneral Economic Uncertainty Further Defer Projects While Costs IncreaseNecessitate Higher Rates in FutureContinue Reliance on Reserve Funds for O&MRisk Debt Coverage & Bond Rating18 Month delay feasible, but would:Risk to Compliance Status RiversideCA.gov14
RECOMMENDATIONThat the Mobility and Infrastructure Committee:Receive a report on the Sewer Enterprise Fundand provide direction on sewer service rateplan alternatives.