Rico E. Medina, Mayor
Tom Hamilton, Vice Mayor
Sandy Alvarez, Councilmember,
District 1
Marty Medina, Councilmember,
District 4
Michael Salazar, Councilmember
“The City With a Heart”
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
February 14, 2023
5: 30 p.m. AMENDED 02-13-23
Item 4a. added
Consistent with Government Code Section 54953(e), this meeting will be held both in person and virtually.
City Councilmembers and members of the public may attend in person at the San Bruno Senior Center, or by teleconference, via Zoom or telephone. The meeting will be livestreamed at youtube.com/CityofSanBruno and available on CityNet Services local Channel 1 SD | local Channel 10 HD.
IN PERSON*
MEETING LOCATION
San Bruno Senior Center
1555 Crystal Springs Road
San Bruno, CA 94066
REMOTE VIA ZOOM or TELEPHONE
Zoom Link: https://sanbrunocagov.zoom.us/j/83616435325? pwd=L2cvK1R6Wks5V2ltZCtOOFVQbDJOQT09
Phone Line: 16465588656
Webinar ID: 836 1643 5325
Webinar Password: 853269
*Please turn off all electronic
devices before the start of the
meeting to prevent disruptions*
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Virtual attendees can comment by using the “Raise Hand” feature in Zoom to request to speak. For dialin comments press *9 to “Raise Hand” and *6 to unmute.
Public comment may also be emailed to [email protected]. Comments received via email will not be read aloud during the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected].
1. CALL TO ORDER
2. RO
LL CALL
3. PUBLIC COMMENTS FOR ITEMS NOT ON THE AGENDA
Individuals allowed three minutes. It is the Council’s policy to refer matters raised in this forum to staff for investigation and/or action where appropriate. The Brown Act prohibits the Council from discussing or acting upon any matter not agendized pursuant to State Law.
4. CONDUCT OF BUSINESS
Public comment will be requested after each topic in this section a. Appoint an Ad Hoc Committee of the City Council to Interview Executive Recruiters or Direct Staff to Select.
5. STUDY SESSION
Public comment will be requested after each topic in this section a. Receive a Presentation on Preliminary Water and Sewer Rate Study Findings.
6. ADJOURNMENT – The next Regular City Council Meeting will be held on February 14, 2023 at 7:00 p.m.
City Council Agenda Item
Staff Report
CITY OF SAN BRUNO
DATE: February 14, 2023
TO: Honorable Mayor and Members of the City Council
FROM: Jovan D. Grogan, City Manager
PREPARED BY: Matthew Lee, Public Works Director
SUBJECT: Receive a Presentation on Preliminary Water and Sewer Rate Study Findings
BACKGROUND:
The Water and Sewer Enterprise Funds are used for all operational and capital expenditures needed to operate, maintain and improve the utility systems. The Funds operate without tax support as each is funded solely by ratepayers. The City Council last adopted a multiyear rate plan water and wastewater rates on May 23, 2017, setting rates for a five-year period through June 30, 2021. The 2017-21 rates for both the Water And Sewer Enterprise Funds were based on a 10-year financial plan and adjusted the same amounts each year. The annual rate increases for both Water and Sewer were 5%.
The City Council cancelled the final year of the 5-year water and sewer rate increase schedule at the February 9, 2021 City Council Meeting.
The City awarded a contract in March 2022 to Bartle Wells Associates of Berkeley, California, to update the City’s water and sewer rate model to ensure revenues continue covering operational costs and necessary infrastructure improvements. Work on the study has been ongoing since that time and, as such, staff did not propose rate increases for the current FY 2022-23 fiscal year.
The combination of the cancellation of the 2021 rate increase and the fact that staff did not propose to increase rates in FY 2022-23, has resulted in water and sewer rates remaining unchanged since 2020.
DISCUSSION:
After reviewing the fixed, operational, and capital improvement priorities, City staff and a financial consultant (Bartle Wells Associates) have developed a financial plan to adequately fund these costs over the next 5 years. Below is the proposed rate schedule for water and wastewater utility rate payers.
Honorable Mayor and Members of the City Council
February 14, 2023
Projected Sewer Rate Increases
July 1
2023
July 1
2024
July 1
2025
July 1
2026
July 1
2027
5% 5% 5% 5% 5%
Projected Water Rate Increases
January 1
2024
January 1
2025
January 1
2026
January 1
2027
January 1
2028
6% 6% 6% 6% 6%
The proposed rates provide necessary revenue to cover the projected operational and maintenance costs for the City’s water and Sewer utilities. The proposed rates also continue the Capital Improvement Program to provide for the necessary investment in improving and replacing the City’s aging and deteriorating water and wastewater infrastructure.
The proposed water rates reflect decreases in water consumption due to increased conservation, projected increases in the cost of purchased water from the San Francisco Public Utilities Commission, and continuation of the City’s policy goal for replacing the City’s water mains and other infrastructure. Sewer system rates reflect decreases in water consumption, on- going treatment costs for the shared South San Francisco-San Bruno Water Quality Control Plant, costs for complying with the Regional Westside Basin Groundwater Storage and Recovery Project (GSR), and continuation of the City’s policy objective for replacing sewer mains and other infrastructure.
The rate model also reflects the pace of CIP project implementation over the past few years due to the pandemic, reduced City staffing levels, and its effects as well as anticipated future implementation.
The attached presentation provides an overview of the 5-year Rate Study cost assumptions, a survey of neighboring water districts rates, and various rate schedule scenarios (Attachment 1).
Why Increase Rates?
Reliable and safe water service and wastewater collection and treatment are among the most fundamental and important services delivered to our community. These services are funded solely from water and sewer rates.
The drought and State conservation requirements have impacted customer water use and utility revenues. Total customer water consumption in 2022 was down 8% from 2021 and has decreased 22% since the 2014 drought. As water use decreases, revenues decrease proportionately, while the fixed costs to maintain system infrastructure increase with inflation, including maintenance, repair, and construction costs.
Operational costs, such as personnel costs and maintenance supplies as well as repair equipment are increasing at a rate higher than the regional cost of living index. Separately, the cost of purchased water from the San Francisco Public Utilities Commission (SFPUC) is Honorable Mayor and Members of the City Council
February 14, 2023
projected to increase by 21% over the next 5 years. When the Westside Basin aquifer is too low, underground extraction is limited and the City receives in lieu water supplies from SFPUC until the basin is replenished. For example, in 2020, the City obtained 97% of its water supply from SFPUC. In 2021, the Westside Basin aquifer had been sufficiently recharged and agencies returned to operating their Westside Basin wells. At the end of 2022, the City obtained 69% of water supplies from groundwater, 30% from SFPUC, and 1% from the North Coast County Water District.
The proposed rates address the City Council’s commitment to rehabilitate and replace aging and deficient infrastructure. Additional work to repair and rehabilitate the infrastructure where needed is planned. The overall system condition and improvement needs have been carefully evaluated through the City’s preparation of water and wastewater infrastructure master plans.
Improvements are prioritized through this analysis and the City’s work program is built around the identified priorities.
Below is a Water and Sewer CIP expenditure summary over the last five years. The higher level of Sewer expenditures reflects the City’s priorities to meet infrastructure improvements required by the 2011 Baykeeper Consent Decree (CD) and Regional Water Board’s Cease and Desist Order (CDO). The City’s compliance obligations ended in 2021. The pandemic and staffing shortages limited capital project construction during FY2021-22.
Fiscal Year Water CIP Sewer CIP
2017-18 $ 2,291,412 $ 5,086,120
2018-19 1,433,693 6,677,943 2019-20 3,698,745 7,585,130 2020-21 3,210,857 3,633,794 2021-22 468,511 1,181,922 TOTAL $ 11,103,218 $ 24,164,909
Sewer Capital Projects
Over the last five years, prioritization was given to sewer projects to ensure compliance with the 2011 Baykeeper Consent Decree (CD) and Regional Water Board’s Cease and Desist Order (CDO). Of the projects identified in the 2017 Rate Study, 80% were completed. For those projects not yet completed, 100% was due to delays caused by an outside entity.
Water Capital Projects
The prioritization of sewer capital projects and staffing levels resulted in delays to the water capital projects. Approximately 40% of the water capital projects were prioritized and completed over the last five years. For those projects not yet completed, 78% was due to staffing challenges and 22% was due to delays caused by an outside entity (see Chart 1 below).
Water & Sewer Main Replacement Projects:
In 2014, a workplan was developed to jointly complete water and sewer main replacements in the same location at the same time for efficiency in administrative costs and to minimize neighborhood disruptions. Over the last five years, approximately 45% of these coordinated main replacement capital projects were prioritized and completed. For those projects not yet Honorable Mayor and Members of the City Council
February 14, 2023
Staffing
78%
Outside
Entity
22%
Staffing Outside Entity
completed, 79% was due to staffing challenges, 14% was due to the project being reprioritized, and 7% was due to delays caused by an outside entity (see Chart 2 below).
Chart 1: Water CIP - Causes for Delay
Chart 2: Water Main Replacement Projects - Causes for Delay
Capital Projects - Next Steps:
To directly address the backlog of projects, the City’s Public Works Department has brought on 5 new staff since Fall 2022. The department also increased contracting capacity with on-call design consultants and project managers throughout the year.
Additionally, during the prior Water and Sewer Rate Study, the full project amounts were allocated in the year that the project was set to begin. Given that certain CIP projects can span multiple fiscal years, it did not reflect the actual cashflow needed during the various phases of Repriorized
14%
Staffing
79%
Outside Entity
7%
Repriorized Staffing Outside Entity
Honorable Mayor and Members of the City Council
February 14, 2023
the multi-year project. In future years, the City will explore planning and appropriated project funds over multiple years to reflect the actual cashflow need of a project.
A five-year period allows for certainty for planning capital projects and reduces the significant administrative costs of more frequent rate setting.
Rate Study Highlights
Below are highlights of the Rate Study, including the current rate structure, funding needs, financial and rate projections, potential for collecting sewer rates on property tax rolls, and an upcoming schedule for further rate discussions and approval consideration:
Water & Sewer Rates
The City’s water and sewer utilities are self-supporting enterprises that rely predominantly on revenues from water and sewer rates to fund the costs of providing service.
The City has provided good financial stewardship via adoption of gradual annual water and sewer rate increases most years for the past 15 years. These increases have put the water and sewer enterprises on a much stronger financial footing, helped keep rates aligned with the costs of providing service and supported a significant increase in funding for capital improvement needs.
The City last conducted water and sewer rate studies in 2017 leading to adoption of 5 years of 5% annual water and sewer rate increases effective July 1, 2017 through 2021.
However, the City cancelled the final 5% water and sewer rate increases that had been scheduled to become effective July 1, 2021 and has subsequently been able to defer raising rates. Current rates have been in effect since July 1, 2020.
San Bruno’s water and sewer rates are both currently in the middle range compared to other regional agencies in San Mateo County. The City’s combined water and sewer charges for a typical single-family home were the median, with half of other agencies either higher or lower than San Bruno, based on a survey of 19 regional agencies.
The City bills customers via a combined bi-monthly bill that includes water rates, sewer rates, and garbage rates. This results in a single large bill that customers pay once every two months. Additionally, residents that subscribe to the City’s cable, telephone and internet service (CityNet) receive a separate monthly bill from the City.
The City has received some customer complaints that its utility bills seem high compared to other agencies, but this may largely be due to the City’s billing practices compared to a number of other regional agencies that only bill for some utility services (e.g., only water or sewer service which is not combined with cable), bill customers every month, and/or collect sewer charges on the property tax rolls.
Honorable Mayor and Members of the City Council
February 14, 2023
Capital & Operating Funding Needs
While the City has completed a significant amount of capital improvements over the past 5 years, some projects were temporarily delayed due to staffing limitations and other factors. These deferred costs helped enable the City to cancel its water and sewer rate increases that were scheduled to go into effect in 2021 and pass along the savings to customers via no rate increases for the past 2 years. However, the City has been proceeding with its capital program and has a number of large projects in design which will soon require funding.
Both water and sewer enterprises are facing substantial capital improvement funding needs in upcoming years. The City currently anticipates funding roughly $85 million of water system capital improvements and roughly $54 million of wastewater system capital improvements over the next 5 years including a share of costs for improvements to the Water Quality Control Plant (WQCP). The improvements are needed to address existing deficiencies, rehab and/or replace aging infrastructure that has reached the end of its useful life, and to support safe and reliable service. In addition, the WQCP anticipates a future debt issuance to support a major upgrade to its biosolids handling process. San Bruno’s share of debt service is estimated at approximately $800,000 per year starting fiscal year 2026/27.
Water capital improvements planned for the next 5 years include the replacement of three older water tanks as well as replacement of aging water pipelines and various other improvements to wells, pressure regulating stations, and pump stations.
Wastewater capital improvements primarily consist of rehabilitation and replacement of aging sewer pipelines but also include pump station improvements and the City’s share of capital improvements projects at the Water Quality Control Plant.
Current rates do not support the projected capital funding needs over the next 5 years or projections of longer-term annual funding needs for rehabilitation and replacement of aging infrastructure.
The water and sewer enterprises have both accrued healthy levels of fund reserves that include excess reserves available for capital funding. A substantial amount of these fund reserves are projected to be drawn down in upcoming years to help fund the City’s larger water and sewer capital improvement needs while rate increases are gradually phased in, such as water tanks.
The City is also facing ongoing increases to its water and sewer operating expenses:
o Due to overcollection of revenues in prior years, the SFPUC accumulated fund reserves in a “balancing account” on behalf of its wholesale customers and was able to draw down reserves in order to defer wholesale water rate increases for 5 years.
However, the balancing account was mostly depleted and SFPUC increased wholesale water rates by 16% effective July 1, 2022.
o Additional wholesale water rate increases are projected in upcoming years.
Honorable Mayor and Members of the City Council
February 14, 2023
o The City is contractually responsible for paying its share of operating, maintenance and debt service expenses for the South San Francisco - San Bruno Water Quality Control Plant and effluent disposal system. Costs for wastewater treatment operations have increased in recent years, with no corresponding increases to the City’s sewer rates, and are projected to continue to gradually increase in future years.
o In addition, the City faces ongoing cost inflation for its own operating and maintenance expenses. The City avoided some expenses in recent years due to unfilled staff positions and participation in the Groundwater Storage and Recovery Agreement with SFPUC. In addition to rate increases for capital needs and other purposes, small annual rate increases are needed over the next 5 years to support the City’s own operating expenses and keep up with cost inflation.
The City’s prior rate increases put the water and sewer enterprises on a stronger financial footing but are not adequate to meet projected future operating and capital funding needs. Temporary deferral of some expenses enabled the City to pass along the savings to its customers by cancelling and deferring rate increases since July 2021.
However, the City now needs to resume raising rates to support its water and sewer enterprise funding needs.
Financial & Rate Projections
Bartle Wells Associates (BWA) developed 10-year financial projections to evaluate rate increases needed to support projected water and sewer enterprise funding needs in upcoming years. Rate increases are designed to be gradually phased in over 5 years in order to minimize the annual impact on ratepayers, with the goal of supporting balanced budgets and adequate funding for ongoing rehabilitation and replacement of aging pipelines and other water and sewer system infrastructure.
The tables below summarize the overall level of projected water and sewer rate increases for the next 5 years. Due to minor adjustments to the City’s water and sewer rate structures designed to realign rates with the cost of service, actual billing impacts to customers may vary a little depending on customer class, meter size, and water use.
Projected Sewer Rate Increases
July 1
2023
July 1
2024
July 1
2025
July 1
2026
July 1
2027
5% 5% 5% 5% 5%
Projected Water Rate Increases
January 1
2024
January 1
2025
January 1
2026
January 1
2027
January 1
2028
6% 6% 6% 6% 6%
Honorable Mayor and Members of the City Council
February 14, 2023
As shown on the tables above, water rate increases are proposed to become effective on January 1 of year, when water use is low, starting January 1, 2024. Sewer rate increases are proposed to become effective on July 1 at the beginning of each fiscal year starting July 1, 2023.
Accounting for the cancellation and deferral of rate increases over the past 2 years, water and sewer rates with the proposed increases will remain below levels previously projected. For example, if the City had continued with gradual 5% rate increases each year, current rates would already be a little over 10% higher than they current are and would remain higher than projected rates in future years.
BWA also evaluated the potential use of future debt financing to help fund the City’s elevated level of water system capital needs over the next 5 years as the City’s aging water tanks are replaced while enabling the City to phase in modest gradual rate increases. Water enterprise financial projections assume the City would first spend down a portion of its fund reserves prior to issuing debt in 2025 to fund $20 million of capital improvements, which are elevated over the first 5 years. The actual timing and amount of any future debt issuance would vary based on actual future funding needs.
Potential for Collection of Sewer Rates on Property Tax Roles
The City can consider the potential for collecting sewer service charges on the San Mateo County property tax rolls. Potential benefits include: a) removing sewer charges from the City’s combined bi-monthly utility bills, b) San Mateo County is on the Teeter Plan under which the City would typically receive 100% of it sewer billings regardless of property tax payment delinquencies. Some potential considerations would include: c) sewer charges currently paid by some tenants would transition to being collected via tax bills paid by property owners, d) the County charges a small administrative fee for collecting charges on the property tax rolls. Agencies can opt to use the property tax rolls to collect charges for a subset of customers such as: a) residential customers only, or b) to collect utility bill payments from delinquent accounts.
Many other regional agencies collect sewer rates via the property tax rolls including South San Francisco, Pacifica, San Mateo, Colma, San Carlos, Hillsborough, East Palo Alto Sanitary District, West Bay Sanitary District (Menlo Park), Redwood City, Montara Water & Sanitary District, and others. Other regional agencies are also currently considering collecting sewer charges on the County property tax rolls.
The collection of sewer charges on the property tax rolls is authorized by California Health and Safety Code 5473. Pursuant to the Code, agencies must annually prepare and adopt by resolution listing the charges that would be levied on each parcel prior to submission to the County for collection on the property tax rolls. Prior to authorizing collection via the property tax rolls for the first time, the City must send notice to affected property owners of the proposed change in billing method at least 45 days prior to holding a public hearing on the matter. Similar to the process for adopting water and sewer rate increases, adoption of resolution authorizing billing via the property tax rolls is not subject to a public vote but is instead subject to “majority protest” under which the City would not be able to consider adoption of the resolution if “written protests” were Honorable Mayor and Members of the City Council
February 14, 2023
submitted by property owners representing more than 50% of affected parcels, with one written protest counted per parcel.
Next Steps
The following section presents a draft schedule for moving forward with proposed water and sewer rates increases for upcoming years.
February 14, 2023 City Council Meeting: Present findings and preliminary water and sewer rate recommendations and obtain initial input from Council and participating members of the public.
March 2023 City Council Meeting: Present revised water and sewer rate recommendations and seek Council direction to move forward with the Proposition 218 rate increase process.
(Date to be determined.)
March 2023 Mail Proposition 218 Notices of proposed rate increases to property owners and customers. Notices must be deposited in the mail at least 45 days prior to the date of the Public Hearing at which the proposed rates would be considered for adoption. (Date to be determined.)
May 2023 City Council Meeting: Hold the required Public Hearing and consider adoption of proposed water and sewer rates. Water and Sewer rate increases are not subject to a public vote but are subject to “majority protest” under which the City would not be able to consider adoption of the resolution if “written protests” were submitted by property owners representing more than 50% of affected parcels, with one written protest counted per parcel. (Date to be determined.)
July 1, 2023 New Sewer rates become effective.
January 1, 2024 New Water rates become effective.
FISCAL IMPACT:
The FY2021-22 Operating Budget approved June 22, 2021 included funding for the Rate Study. There is no immediate fiscal impact to receiving and commenting on the preliminary results of the Water and Sewer Rate Study as funds have already been appropriated and contracts executed for the work. If directed to proceed, staff anticipate presenting final customer rate recommendations and any fiscal impact to the City Council in early 2023.
Honorable Mayor and Members of the City Council
February 14, 2023
ENVIRONMENTAL IMPACT:.
The action is not a project subject to CEQA. City Council’s action is not considered a “Project” per CEQA Guidelines and therefore no further environmental analysis is required.
RECOMMENDATION:
Receive a presentation on preliminary Water and Sewer Rate Study findings.
ALTERNATIVES:
Receive presentation and provide questions or comments.
ATTACHMENTS:
1. Rate Study Slide Presentation
2. Rate Study Background and Preliminary Findings
City of San Bruno
Water & Sewer Rate StudyBackground & Preliminary FindingsFebruary 14, 2023
2 Presentation Overview■Utility Finances & Rates■Regional Rate Surveys■Water & Sewer Systems■Rate Study Overview■Financial Challenges■Draft Rate Projections■Next Steps Purpose: Discuss findings & draft recommendations & receive input 3 ■Water & sewer utilities are financially self-supporting enterprisesRates are main source of funding & need to be adequate to fund costs of providing service including replacing aging infrastructure100% of rate revenues go to fund water & sewer system expenses■City has provided strong financial management via adoption of gradual annual rate increases most yearsLast adopted a 5-years of 5% water and sewer rate increases effective July 1, 2017 - 2021City cancelled the last rate increase scheduled for July 1, 2021 to provide rate relief during Covid No rate increases in 2022 based on staff recommendation No rate increases for past 2 years in a row Utility Finances
4 ■Recommend City resume its historical practice of gradual annual rate increases ■Prior 2017 Rate Study projected ongoing 5% annual water and sewer rate increasesWith no rate increases for past 2 years, projected rates will remain roughly 10% lower than estimated in the prior rate study Draft Recommendations
July 1 July 1 January 1 January 1 January 1 January 1 January 12021 2022 2024 2025 2026 2027 20285% 0% 0% 6% 6% 6% 6% 6%Projected Water Rate IncreasesJuly 1 July 1 July 1 July 1 July 1 July 1 July 12021 2022 2023 2024 2025 2026 20275% 0% 0% 5% 5% 5% 5% 5%Projected Sewer Rate Increases 5 ■Long-term financial planning■Maintain prudent levels of fund reservesFinancial cushion for revenue shortfalls, unanticipated expenses, and emergencies; can accrue funds for major capital needs■Adequate funding for replacement of aging infrastructure■Fund ongoing capital costs on a pay-as-you-go basisUse debt for spikes in capital costs to spread costs over time■Gradual annual rate increases based on long-term needsKeeps rates in line with the costs of providing service■Don’t defer smaller annual rate increasesAvoid need for larger, unpopular rate spikes Best Financial Management Practices
6 ■City’s water & sewer rates are in the middle range compared to other regional agencies in San Mateo County■City bills customers via a bi-monthly bill that includes water rates, sewer rates and garbage ratesSingle large bill paid once every 2 monthsMany other agencies bill for water or sewer only, or collect some charges on the property tax rolls Rates & Billing
7 July 1 July 1 July 1 July 1 July 1 July 1 2016 2017 2018 2019 2020 2021 Rate Increase % 5% 5% 5% 5% 5% MONTHLY SERVICE CHARGESCurrently CancelledFixed monthly charge based on meter size.in effectMeter Size3/4-inch $21.13 $22.10 $23.20 $24.36 $25.58 $26.861-inch 35.22 36.83 38.67 40.60 42.63 44.761-1/2 inch 70.43 73.67 77.33 81.20 85.27 89.532-inch 112.69 117.87 123.73 129.92 136.43 143.253-inch 211.30 221.00 232.00 243.60 255.80 268.594-inch 352.17 368.33 386.67 406.00 426.33 447.656-inch 704.33 736.67 773.33 812.00 852.67 895.308-inch 1,126.93 1,178.67 1,237.33 1,299.20 1,364.27 1,432.4710-inch 1,619.97 1,694.33 1,778.67 1,867.60 1,961.13 2,059.18QUANTITY CHARGESBilled based on metered water consumption per hundred cubic feet (hcf); 1 hcf = approximately 748 gallonsa) Single-Family ResidentialBi-Monthly Use Tier 1 0 - 10 hcf $7.36 $7.78 $8.17 $8.58 $9.01 $9.46 Tier 2 11 - 20 hcf 8.83 9.31 9.78 10.27 10.78 11.32 Tier 3 > 20 hcf 11.78 12.38 13.00 13.65 14.33 15.05b) All Other Accounts (All Use) 8.32 8.73 9.17 9.63 10.11 10.62 Historical Water Rates
8 2017 2018 2019 2020 2021 Rate Increase %5%5%5%5% 5% MONTHLY SERVICE CHARGESCurrently CancelledFixed monthly charge per accountin effectSingle Family Residential$27.88$29.27$30.73$32.27$33.88All Other Customers (Charge Based on Water Meter Size)Meter Size3/4-inch $27.88 $29.27 $30.73 $32.27 $33.881-inch 46.47 48.78 51.22 53.78 56.471-1/2 inch 92.93 97.57 102.43 107.57 112.932-inch 148.69 156.11 163.89 172.11 180.693-inch 278.80 292.70 307.30 322.70 338.804" & Larger 464.67 487.83 512.17 537.83 564.67QUANTITY CHARGESBilled per hundred cubic feet (hcf); 1 hcf = approximately 748 gallonsResidential (winter use) $10.69 $11.22 $11.78 $12.37 $12.99CommercialC-1 Light Commercial9.93 10.43 10.95 11.50 12.08C-2 Medium Commercial 10.69 11.22 11.78 12.37 12.99C-3 Heavy Commercial 15.21 15.97 16.77 17.61 18.49C-4 Special Commercial 19.74 20.73 21.77 22.86 24.00Governmental 10.69 11.22 11.78 12.37 12.99IndustrialI-1 Light Industrial 10.69 11.22 11.78 12.37 12.99 Historical Sewer RatesWastewater Rates Effective July 1 9 10
11 Note: Survey assumes same level of water use for all agencies for comparative purposes. Agencies in northern San Mateo County and on the Pacific Coast tend to have lower water use per home than agencies in central and southern San Mateo County.
12 13
■Water SupplyGroundwater via 5 wells (roughly 2/3rds of supply)SFPUC wholesale water (roughly 1/3 of supply)■Water Distribution SystemRoughly 120 miles of water main pipelinesMost are original metal pipes with life expectancy of 50 yearsMany are 70–100 years old & subject to frequent leaks & breaksIn past 5 years, City averages about 100 main breaks per year8 water storage tanks & pump stationsAging infrastructure requires significant rehabilitation, seismic retrofits, and replacement Water System
14 15
16 17
■Sewer Collection SystemRoughly 90 miles of sewer pipelines (2,415 pipe segments)6 sewer pump stationsAging infrastructure in need of rehab & replacement■Wastewater Treatment PlantSewage conveyed to jointly-owned South San Francisco –San Bruno Water Quality Control Plant (WQCP) for treatmentTreated effluent disposal to San Francisco BaySan Bruno funds roughly 25% of WQCP capital improvements Sewer System
18 ■City has substantially increased funding for pipeline replacements and other capital needs over past decade■In recent years, some projects were temporarily deferred due to staffing limitations and other factorsResulted in temporary buildup of fund reserves■City in process of designing and initiating some major capital improvements e.g. rebuild and upgrade old water tanks■Fund reserves expected to be partially drawn down in upcoming years as capital projects are funded Capital Improvement Funding
19 ■10-Year Water & Sewer Financial PlansDevelop 10-year financial projections to identify future operating, capital, and debt service funding needs of the City’s water enterprisePhase in rate increases as gradually as possible to minimize the annual impact on customers■Rate Structure EvaluationReview water & sewer rate structures & recommend rates that:a. Recover the City’s costs of providing serviceb. Are fair and equitable to all customers, and c. Comply with the legal requirements of Proposition 218■Water & sewer enterprises in good financial shape but face financial challenges that will require rate increases Rate Study Overview
20 ■Capital Improvement Needs of Aging InfrastructureImprovements needed to address existing deficiencies, rehab and/or replace aging infrastructure, and support safe and reliable service5-Year Water CIP = $85 millionto rebuild 3 water storage tanks, fund rehab & replacement of pipelines, wells, pump stations & other facilities5-Year Sewer CIP = $68 million to fund rehab & replacement of pipelines, pump stations, & City’s share of Water Quality Control Plant improvements■Historical Council priority to proactively replace aging infrastructure to support safe & reliable service Financial Challenges
21 Water Capital Improvement Program2022/23 2023/24 2024/25 2025/26 2026/27 5-Yr TotalMain Imprvt & Replacement Program 7,630,000 6,300,000 2,800,000 9,000,000 25,730,000Pump Station Imprvt & Repl Program 5,900,000 950,000 950,000 7,800,000Water Tank Imprvt & Replacement Program 0 Commodore Tank Installation 2,250,000 17,750,000 20,000,000 Cunningham Drive Tank Replacements 542,000 9,000,000 9,542,000 Princeton Tank Replacement 1,200,000 2,000,000 3,200,000 Sweeney Ridge Tank Replacement 890,000 9,500,000 10,390,000Advanced Water Meter 504,000 504,000Acappella Well Project 4,032,000 4,032,000Pressure Reg Station Impvt & Repl Program 1,211,000 450,000 450,000 2,111,000Well Rehabilitation 529,000 200,000 200,000 200,000 200,000 1,329,000Wtr Qual Well Syst & Sweeny Rdg Tk Upgrds 600,000 600,000 Total Capital Funding 25,288,000 1,600,000 26,400,000 20,750,000 11,200,000 85,238,000Average annual funding requirement = $17 million per yearAfter 5 years, Water CIP projected at $7.5 million per year + 3% cost escalationHigher levels of funding needs over next 5 years will likely require use of debtFinancial projections assume $24 million of debt issued in 2025 22 Sewer Capital Improvement Program
Average annual funding = $10.8 million per year (excluding WQCP Biosolids)Assumes San Bruno’s $14 million share of WQCP Biosolids is financed by debtAfter 5 years, City Sewer CIP projected at $7.5 million per year + 3% escalationAfter 5 years, share of WQCP projects est at $2.5 million per year + 3% escalation 2022/23 2023/24 2024/25 2025/26 2026/27 5-Yr TotalSEWER COLLECTION SYSTEMMain Improvement & Replacement Program 10,166,000 7,500,000 11,200,000 3,750,000 6,000,000 38,616,000Pump Station Imprvt & Replacement Program5,303,000 5,303,000 Subtotal Sewer Collection System 15,469,000 7,500,000 11,200,000 3,750,000 6,000,000 43,919,000WATER POLLUTION CONTROL PLANTWater Quality Control Plant Annual Imprvts 2,500,000 2,000,000 2,000,000 2,000,000 2,000,000 10,500,000WQCP Biosolids Handling Imprvts (est) [1] 14,000,000 14,000,000 Subtotal WQCP Improvements 2,500,000 2,000,000 2,000,000 2,000,000 16,000,000 24,500,000 Total Capital Funding 17,969,000 9,500,000 13,200,000 5,750,000 22,000,000 68,419,0001 South San Francisco anticipates financing with long-term debt. 23 ■SFPUC Wholesale Water Rate IncreasesSFPUC wholesale rates increased 16% on July 1, 2022Additional wholesale water rate increases projected in future years■Keep Up with Cost InflationCity’s utilities face ongoing inflationary cost increasesAnnual rate increases needed to keep up with cost inflation Financial Challenges continued
24 25Actual billing impacts may vary a little due to update of rate structuresWater rate increases on January 1 (when water use is low) starting 2024Sewer rate increases on July 1 starting this yearAccounting for cancellation & deferral of rate increases over past 2 years, rates will remain roughly 10% below previously projected levels Projected Rate Increases
July 1 July 1 January 1 January 1 January 1 January 1 January 12021 2022 2024 2025 2026 2027 20285% 0% 0% 6% 6% 6% 6% 6%Projected Water Rate IncreasesJuly 1 July 1 July 1 July 1 July 1 July 1 July 12021 2022 2023 2024 2025 2026 20275% 0% 0% 5% 5% 5% 5% 5%Projected Sewer Rate Increases 26 27
28 29
30 ■Many other regional agencies are increasing ratesBurlingame in 2ndof 3 years of 9% sewer rate increasesMillbrae in 1stof 5 years of 6% sewer rate increases andin 2ndof 4 years of approx. 5% water rate increasesSouth San Fran in 1stof 5 yrs of 3% sewer rate increasesBelmont planning 5 years of 5.5% sewer rate increasesPacifica in 1stof 5 years of 3.5% sewer rate increasesCoastside CWD planning 6% water rate increaseSan Carlos conducting sewer rate studyMontara WSD conducting water & sewer rate studySan Mateo conducting sewer rate study■San Bruno’s Water & Sewer charges projected to remain in the middle range compared to other regional agencies Other Agencies Also Raising Rates
31 ■Multi-Year Rate Increases (Recommended / Best Practice)City has historically adopted 5-year rate increasesAvoids need to go through the rate increase process every yearWidely used industry standard practice (used by many regional agencies)Recognized as a good financial management practice by rating agenciesRates adopted by Prop 218 process are maximum authorized ratesCity always maintains flexibility to implement lower rates if warranted■Annual Rate Increases (Not Recommended)Would require City to go through the full Prop 218 rate increase process every yearNeed to send Notices of Rate Increases to all customers every yearBig effort & additional costs every yearRequires Council to vote on rate increases every year Rate Increase Options
32 ■Option for City ConsiderationRemoves sewer charges from combined bi-monthly utility billsCounty on Teeter Plan, provides City with 100% of billings■California Health & Safety Code 5473 Must adopt a list of charges for all parcels for County tax rolls each yearFirst year must mail notice to property owners & holding a public hearing■Many other local agencies collect sewer charges on tax rollsSouth San Francisco, Pacifica, San Mateo, Colma, San Carlos, Hillsborough, East Palo Alto Sanitary District, Montara Water & San Dist. West Bay Sanitary District (Menlo Park), Redwood City, Belmont Sewer Bills on Property Tax Rolls?
33 DRAFT SCHEDULEFEBPresent draft findings & receive inputMARPresent revised rate recommendations & seek direction to move forward with Prop 218 processMARMail Prop 218 Notices 45+ days before Public HearingMAYHold Public Hearing & consider rate increasesJULNew sewer rates become effective July 1, 2023JANNew water rates become effective January 1, 2024 Next Steps
34 Questions & Discussion
2023 Water & Sewer Rate StudiesBackground & Preliminary Findings City of San Bruno
BARTLE WELLS ASSOCIATES 1
San Bruno 2023 Water & Sewer Rate Studies
City of San Bruno
Water & Sewer Rate Studies
Background & Preliminary Findings
Water & Sewer Rates
The City’s water and sewer utilities are self-supporting enterprises that rely predominantly on revenues from water and sewer rates to fund the costs of providing service. The City has provided good financial stewardship via adoption of gradual annual water and sewer rate increases most years for the past 15 years. These increases have put the water and sewer enterprises on a much stronger financial footing, helped keep rates aligned with the costs of providing service and supported a significant increase in funding for capital improvement needs. The City last conducted water and sewer rate studies in 2017 leading to adoption of 5 years of 5% annual water and sewer rate increases effective July 1, 2017 through 2021. However, the City cancelled the final 5% water and sewer rate increases that had been scheduled to become effective July 1, 2021 and has subsequently been able to defer raising rates. Current rates have been in effect since July 1, 2020. San Bruno’s water and sewer rates are both currently in the middle range compared to other regional agencies in San Mateo County. The City’s combined water and sewer charges for a typical single family home were the median, with half of other agencies either higher or lower than San Bruno, based on a survey of 19 regional agencies.
The City bill’s customers via a combined bi-monthly bill that includes water rates, sewer rates, and garbage rates. This results in a single large bill that customers pay once every two months. The City has received some customer complaints that its utility bills seem high compared to other agencies, but this may largely be due to the City’s billing practices compared to a number of other regional agencies that only bill for some utility services (e.g. only water or sewer service), bill customers every month, and/or collect sewer charges on the property tax rolls.
Capital & Operating Funding Needs
While the City has completed a significant amount of capital improvements over the past 5 years, some projects were temporarily delayed due to staffing limitations and other factors including time needed for planning, design and permitting. These deferred costs helped enable the City to cancel its water and sewer rate increases that were scheduled to go into effect in 2021 and pass along the savings to customers via no rate increases for the past 2 years. However, the City has been proceeding with its capital program and has a number of large projects in design which will soon require funding. Both water and sewer enterprises are facing substantial capital improvement funding needs in upcoming years. The City currently anticipates funding roughly $85 million of water system capital improvements and roughly $68 million of wastewater system capital improvements over the next 5 years including a share of costs for improvements to the Water Quality Control Plant (WQCP). The improvements are needed to address existing deficiencies, rehab and/or replace aging infrastructure that has reached the end of its useful life, and support safe and reliable service. The wastewater projects include an estimated $14 million for San Bruno’s share of an anticipated major upgrade to the WQCP biosolids handling process. The WQCP anticipates financing this project with debt; San Bruno’s share of annual debt service is estimated at approximately $800,000 per year starting fiscal year 2026/27.
BARTLE WELLS ASSOCIATES 2
San Bruno 2023 Water & Sewer Rate Studies
Water capital improvements planned for the next 5 years include the replacement of 3 older water tanks as well as replacement of aging water pipelines and various other improvements to wells, pressure regulating stations, and pump stations. Wastewater capital improvements primarily consist of rehabilitation and replacement of aging sewer pipelines but also include pump station improvements and the City’s share of capital improvements projects at the Water Quality Control Plant. Current rates do not support the projected capital funding needs over the next 5 years or projections of longer-term annual funding needs for rehabilitation and replacement of aging infrastructure. The water and sewer enterprises have both accrued healthy levels of fund reserves that include some excess reserves available for capital funding. A substantial amount of these fund reserves are projected to be drawn down in upcoming years to help fund the City’s water and sewer capital improvement needs while rate increases are gradually phased in.
The City is also facing ongoing increases to its water and sewer operating expenses:
o Due to overcollection of revenues in prior years, the SFPUC accumulated fund reserves in a “balancing account” on behalf of its wholesale customers and was able to draw down reserves in order to defer wholesale water rate increases for 5 years. However, the balancing account was mostly depleted and SFPUC increased wholesale water rates by 16% effective July 1, 2022.
Additional wholesale water rate increases are projected in upcoming years. o The City is contractually responsible for paying its share of operating, maintenance and debt service expenses for the South San Francisco – San Bruno Water Quality Control Plant and effluent disposal system. Costs for wastewater treatment operations have increased in recent years, with no corresponding increases to the City’s sewer rates, and are projected to continue to gradually increase in future years.
o In addition, the City faces ongoing cost inflation for its own operating and maintenance expenses.
The City avoided some expenses in recent years due to unfilled staff positions and participation in the Groundwater Storage and Recovery Agreement with SFPUC. In addition to rate increases for capital needs and other purposes, small annual rate increases are needed over the next 5 years to support the City’s own operating expenses and keep up with cost inflation. The City’s prior rate increases put the water and sewer enterprises on a stronger financial footing but are not adequate to meet projected future operating and capital funding needs. Temporary deferral of some expenses enabled the City to pass along the savings to its customers by cancelling and deferring rate increases for the past 2+ years. However, the City now needs to resume raising rates to support its water and sewer enterprise funding needs.
BARTLE WELLS ASSOCIATES 3
San Bruno 2023 Water & Sewer Rate Studies
Financial & Rate Projections
BWA developed 10-year financial projections to evaluate rate increases needed to support projected water and sewer enterprise funding needs in upcoming years. Rate increases are designed to be gradually phased in over 5 years in order to minimize the annual impact on ratepayers, with the goal of supporting balanced budgets and adequate funding for ongoing rehabilitation and replacement of aging pipelines and other water and sewer system infrastructure. The tables below summarize the overall level of projected water and sewer rate increases for the next 5 years which follow 2 years of no rate increases. Due to minor adjustments to the City’s water and sewer rate structures designed to realign rates with the cost of service, actual billing impacts to customers may vary a little depending on customer class, meter size, and water use.
As shown on the tables above, water rate increases are proposed to become effective on January 1 of each year, when water use is low, starting January 1, 2024. Sewer rate increases are proposed to become effective on July 1 at the beginning of each fiscal year starting July 1, 2023. Accounting for the cancellation and deferral of rate increases over the past 2 years, water and sewer rates with the proposed increases will remain below levels previously projected. For example, if the City had continued with gradual 5% rate increases each year, current rates would already be a little over 10% higher than they current are and would remain higher than projected rates in future years. BWA also evaluated the potential use of future debt financing to help fund the City’s elevated level of water system capital needs over the next 5 years as the City’s aging water tanks are replaced while enabling the City to phase in modest gradual rate increases. Water enterprise financial projections assume the City would first spend down a portion of its fund reserves prior to issuing debt in 2025 to fund $20 million of capital improvements, which are elevated over the first 5 years. The actual timing and amount of any future debt issuance would vary based on actual future funding needs.
July 1 July 1 January 1 January 1 January 1 January 1 January 12021 2022 2024 2025 2026 2027 20285% 0% 0% 6% 6% 6% 6% 6%Projected Water Rate IncreasesJuly 1 July 1 July 1 July 1 July 1 July 1 July 12021 2022 2023 2024 2025 2026 20275% 0% 0% 5% 5% 5% 5% 5%Projected Sewer Rate Increases BARTLE WELLS ASSOCIATES 4
San Bruno 2023 Water & Sewer Rate Studies
Potential for Collection of Sewer Rates on the Property Tax Rolls The City can consider the potential for collecting sewer service charges on the San Mateo County property tax rolls. Potential benefits include: a) removing sewer charges from the City’s combined bi-monthly utility bills, b) San Mateo County is on the Teeter Plan under which the City would typically receive 100% of it sewer billings regardless of property tax payment delinquencies. Some potential considerations would include: c) sewer charges currently paid by some tenants would transition to being collected via tax bills paid by property owners, d) most revenues would be received 2 times per year, and e) the County charges a small administrative fee for collecting charges on the property tax rolls. Agencies can opt to use the property tax rolls to collect charges for a subset of customers such as a) residential customers only, or b) to collect utility bill payments from delinquent accounts. Many other regional agencies collect sewer rates via the property tax rolls including South San Francisco, Pacifica, San Mateo, Colma, San Carlos, Hillsborough, East Palo Alto Sanitary District, West Bay Sanitary District (Menlo Park), Redwood City, Montara Water & Sanitary District, and others. Other regional agencies are also currently considering collecting sewer charges on the County property tax rolls. The collection of sewer charges on the property tax rolls is authorized by California Health and Safety Code 5473. Pursuant to the Code, agencies must annually prepare and adopt by resolution listing the charges that would be levied on each parcel prior to submission to the County for collection on the property tax rolls. Prior to authorizing collection via the property tax rolls for the first time, the City must send notice to affected property owners of the proposed change in billing method at least 45 days prior to holding a public hearing on the matter. Similar to the process for adopting water and sewer rate increases, adoption of resolution authorizing billing via the property tax rolls is not subject to a public vote, but is instead subject to “majority protest” under which the City would not be able to consider adoption of the resolution if “written protests” were submitted by property owners representing more than 50% of affected parcels, with one written protest counted per parcel.
Next Steps
The following section presents a draft schedule for moving forward with proposed water and sewer rates increases for upcoming years.
Feb-14, 2023 City Council Meeting: Present findings and preliminary water and sewer rate recommendations and obtain initial input from Council and participating members of the public.
March 2023 City Council Meeting: Present revised water and sewer rate recommendations and seek Council direction to move forward with the Proposition 218 rate increase process.
March 2023 Mail Proposition 218 Notices of proposed rate increases to property owners and customers. Notices must be deposited in the mail at least 45 days prior to the date of the Public Hearing at which the proposed rates would be considered for adoption.
May 2023 City Council Meeting: Hold the required Public Hearing and consider adoption of proposed water and sewer rates. Water and sewer rate increases are not subject to a public vote, but are subject to “majority protest” under which the City would not be able to consider adoption of the resolution if “written protests” were submitted by property owners representing more than 50% of affected parcels, with one written protest counted per parcel.
Jul-1, 2023 New sewer rates become effective.
Jan-1, 2024 New water rates become effective.
BARTLE WELLS ASSOCIATES 5
San Bruno 2023 Water & Sewer Rate Studies
July 1 July 1 July 1 July 1 July 1 July 1 2016 2017 2018 2019 2020 2021 Rate Increase %5% 5% 5% 5% 5% MONTHLY SERVICE CHARGESCurrently CancelledFixed monthly charge based on meter size.in effectMeter Size3/4-inch $21.13 $22.10 $23.20 $24.36 $25.58 $26.861-inch 35.22 36.83 38.67 40.60 42.63 44.761-1/2 inch 70.43 73.67 77.33 81.20 85.27 89.532-inch 112.69 117.87 123.73 129.92 136.43 143.253-inch 211.30 221.00 232.00 243.60 255.80 268.594-inch 352.17 368.33 386.67 406.00 426.33 447.656-inch 704.33 736.67 773.33 812.00 852.67 895.308-inch 1,126.93 1,178.67 1,237.33 1,299.20 1,364.27 1,432.4710-inch 1,619.97 1,694.33 1,778.67 1,867.60 1,961.13 2,059.18QUANTITY CHARGESBilled based on metered water consumption ($ per hundred cubic feet or hcf)a) Single-Family ResidentialBi-Monthly Use Tier 1 0 - 10 hcf $7.36 $7.78 $8.17 $8.58 $9.01 $9.46 Tier 2 11 - 20 hcf 8.83 9.31 9.78 10.27 10.78 11.32 Tier 3 > 20 hcf 11.78 12.38 13.00 13.65 14.33 15.05b) All Other Accounts (All Water Use)8.32 8.73 9.17 9.63 10.11 10.62QUANTITY CHARGE (PER 100 GALLONS)a) Single-Family ResidentialBi-Monthly Use Tier 1 0 - 10 hcf $0.98 $1.04 $1.09 $1.15 $1.20 $1.26 Tier 2 11 - 20 hcf 1.18 1.24 1.31 1.37 1.44 1.51 Tier 3 > 20 hcf 1.57 1.66 1.74 1.82 1.92 2.01b) All Other Accounts (All Water Use)1.11 1.17 1.23 1.29 1.35 1.42Accounts served by water procured from NCCWD are also charged a Differential Cost of Supply Chargereflecting the higher cost of water procured from this source.For Informational Purposes Only Historical Water Rates
BARTLE WELLS ASSOCIATES 6
San Bruno 2023 Water & Sewer Rate Studies
2017 2018 2019 2020 2021 Rate Increase %5%5%5%5% 5% MONTHLY SERVICE CHARGESCurrently CancelledFixed monthly charge per accountin effectSingle Family Residential$27.88 $29.27 $30.73 $32.27 $33.88All Other Customers (Charge Based on Water Meter Size)Meter Size3/4-inch $27.88 $29.27 $30.73 $32.27 $33.881-inch 46.47 48.78 51.22 53.78 56.471-1/2 inch 92.93 97.57 102.43 107.57 112.932-inch 148.69 156.11 163.89 172.11 180.693-inch 278.80 292.70 307.30 322.70 338.804" & Larger 464.67 487.83 512.17 537.83 564.67QUANTITY CHARGESBilled per hundred cubic feet (hcf)Residential$10.69 $11.22 $11.78 $12.37 $12.99CommercialC-1 Light Commercial 9.93 10.43 10.95 11.50 12.08C-2 Medium Commercial 10.69 11.22 11.78 12.37 12.99C-3 Heavy Commercial 15.21 15.97 16.77 17.61 18.49C-4 Special Commercial 19.74 20.73 21.77 22.86 24.00Governmental10.69 11.22 11.78 12.37 12.99IndustrialI-1 Light Industrial 10.69 11.22 11.78 12.37 12.99I-2 Industrial Flow 7.68 8.06 8.46 8.88 9.32COD per lb 0.59 0.62 0.65 0.68 0.71SS per lb 1.22 1.28 1.34 1.41 1.48Note: 1 hcf = 100 cubic feet or approximately 748 gallons.
Historical Sewer RatesWastewater Rates Effective July 1 Residential Quantity Charges are billed based on average metered water use from two bi-monthly billing periods during wet weather months between either Nov-Mar or Dec-Apr.Non-Residential Quantity Charges are billed based on metered water use during each billing period.
BARTLE WELLS ASSOCIATES 7
San Bruno 2023 Water & Sewer Rate Studies
San Bruno’s combined water and sewer charges for a typical single family home are the median of 19 regional agencies surveyed, with half of other agencies having charges that are above or below the City’s charges.)
With the proposed 6% annual water rate increases and 5% annual sewer rate increases, San Bruno’s rates are projected to remain in the middle range compared to other agencies in San Mateo County. A number of other regional agencies are in the middle of multi-year rate increases or are anticipating adopting rate increases in upcoming years.
Survey assumes same level of water use for all agencies for comparative purposes. Agencies in northern San Mateo County and on the Pacific Coast tend to have lower water use per home than agencies in central and southern San Mateo County.
BARTLE WELLS ASSOCIATES 8
San Bruno 2023 Water & Sewer Rate Studies
BARTLE WELLS ASSOCIATES 9
San Bruno 2023 Water & Sewer Rate Studies
BARTLE WELLS ASSOCIATES 10
San Bruno 2023 Water & Sewer Rate Studies
BARTLE WELLS ASSOCIATES 11
San Bruno 2023 Water & Sewer Rate Studies
City of San Bruno
Water Rate Study Tables
24.85 26.05 22.04 29.52 31.50 28.96 28.00 32.16 25.58 27.54 42.02 26.70 31.87 70.74 75.36
37.44 36.60 43.24 39.22 38.78 42.00 50.38 48.54 55.83 54.75 47.63 67.20 70.22 36.96 58.59 62.29 62.65 65.28 68.74 70.28 70.96 78.38 80.70 81.41 82.29 89.65 93.90 102.09 107.70 133.95 $0$25$50$75$100$125$150 Fixed Monthly Charges Water Usage ChargesSingle Family Residential Monthly Water BillsBase meter size with 6 hcf of monthly water useAverage: $83.35Median: $80.70 Note: Survey assumes same level of water use for all agencies for comparative purposes. Agencies in northern San Mateo County and on the Pacific Coast tend to have lower water use per home than agencies in central and southern San Mateo County.
Table 1
San Bruno Water Rate Study
Water Rates
July 1 July 1 July 1 July 1 July 1 July 1
2016 2017 2018 2019 2020 2021
Rate Increase % 5% 5% 5% 5% 5%
MONTHLY SERVICE CHARGES Currently Cancelled
Fixed monthly charge based on meter size. in effect
Meter Size
3/4-inch $21.13 $22.10 $23.20 $24.36 $25.58 $26.86
1-inch 35.22 36.83 38.67 40.60 42.63 44.76 1-1/2 inch 70.43 73.67 77.33 81.20 85.27 89.53 2-inch 112.69 117.87 123.73 129.92 136.43 143.25 3-inch 211.30 221.00 232.00 243.60 255.80 268.59 4-inch 352.17 368.33 386.67 406.00 426.33 447.65 6-inch 704.33 736.67 773.33 812.00 852.67 895.30 8-inch 1,126.93 1,178.67 1,237.33 1,299.20 1,364.27 1,432.47 10-inch 1,619.97 1,694.33 1,778.67 1,867.60 1,961.13 2,059.18
QUANTITY CHARGES
Billed based on metered water consumption ($ per hundred cubic feet or hcf) a) Single-Family Residential
Bi-Monthly Use
Tier 1 0 - 10 hcf $7.36 $7.78 $8.17 $8.58 $9.01 $9.46
Tier 2 11 - 20 hcf 8.83 9.31 9.78 10.27 10.78 11.32 Tier 3 > 20 hcf 11.78 12.38 13.00 13.65 14.33 15.05 b) All Other Accounts (All Water Use) 8.32 8.73 9.17 9.63 10.11 10.62 QUANTITY CHARGE (PER 100 GALLONS)
a) Single-Family Residential
Bi-Monthly Use
Tier 1 0 - 10 hcf $0.98 $1.04 $1.09 $1.15 $1.20 $1.26
Tier 2 11 - 20 hcf 1.18 1.24 1.31 1.37 1.44 1.51 Tier 3 > 20 hcf 1.57 1.66 1.74 1.82 1.92 2.01 b) All Other Accounts (All Water Use) 1.11 1.17 1.23 1.29 1.35 1.42 Accounts served by water procured from NCCWD are also charged a Differential Cost of Supply Charge reflecting the higher cost of water procured from this source.
For Informational Purposes Only
Historical Water Rates
Table 2
San Bruno Water Rate Study Need audited #s for 6/30/22 when available Water Fund Reserves
Account Title 2017 2018 2019 2020 2021 2022
Preliminary
Cash Reserves & Receivables
Cash & Investments $14,119,178 $18,781,556 $28,532,888 $35,196,887 $41,826,760 $47,838,565 Accounts Receivable - Other 1,738,086 1,914,455 2,301,814 2,308,053 2,787,126 2,675,352____________________________________________________________ Subtotal 15,857,264 20,696,011 30,834,702 37,504,940 44,613,886 50,513,917 Accounts Payable
Accounts Payable & Accrued Liabilities (634,495) (1,012,375) (1,732,132) (2,672,987) (868,080) (1,004,160) Compensated Absences Current (16,629) (18,990) (18,963) (20,855) (21,293) (19,803) Compensated Absences Noncurrent (116,686) (86,192) (96,049) (121,559) (121,271) (104,790)____________________________________________________________ Subtotal (767,810) (1,117,557) (1,847,144) (2,815,401) (1,010,644) (1,128,753) Net Reserves Available for O&M + Capital15,089,454 19,578,454 28,987,558 34,689,539 43,603,242 49,385,164 2017 Water Revenue Bond Funds 0 12,991,404 9,979,309 6,938,947 1,094,662 456,425 Total Funds Available 15,089,454 32,569,858 38,966,867 41,628,486 44,697,904 49,841,589 Source: City of San Bruno Comprehensive Annual Financial Reports Note: City built up fund reserves in recent years due to termporary deferral of some major capital improvement projects due to staffing limitations and lead time for design and permitting. City is moving forward with its capital program and anticipated drawing down fund reserves as projects are funded in upcoming years.
As of June 30
Table 3
San Bruno Water Rate Study
Outstanding Debt Service
Fiscal Year 2017 Water
Ending Revenue Bonds
2021 $681,650
2022 682,850
2023 683,650
2024 684,050
2025 681,550
2026 683,550
2027 684,800
2028 685,300
2029 685,050
2030 684,050
2031 682,300
2032 684,800
2033 681,300
2034 682,050
2035 684,900
2036 682,300
2037 684,400
2038 681,600
2039 683,200
2040 684,000
2041 684,000
2042 683,200
2043 681,600
2044 684,200
2045 685,800
2046 681,400
2047 681,200
Rate Covenant: 1.25x debt service coverage requirement Optional Redemption starting July 1, 2027
Table 4
San Bruno Water Rate Study
Water Capital Improvement Program
2023/24 2024/25 2025/26 2026/27 5-Yr Total
Prior Approp Est. Carryover New Funding Total
Funding Sources
Water Fund 28,181,000 14,619,000 10,354,000 24,973,000 1,600,000 26,400,000 20,750,000 11,200,000 84,923,000 SFPUC 315,000 315,000 315,000 315,000
Total Funding Sources 28,496,000 14,934,000 10,354,000 25,288,000 1,600,000 26,400,000 20,750,000 11,200,000 85,238,000 Water Capital Improvement Program Budget Appropriations [1] Main Improvement & Replacement Program 10,650,000 6,730,000 900,000 7,630,000 6,300,000 2,800,000 9,000,000 25,730,000 Pump Station Improvement & Replacement 2,273,000 1,350,000 4,550,000 5,900,000 950,000 950,000 7,800,000 Water Tank Improvement & Replacement
Commodore Tank Installation 1,500,000 1,500,000 750,000 2,250,000 17,750,000 20,000,000 Cunningham Drive Tank Replacements 1,437,000 542,000 542,000 9,000,000 9,542,000 Princeton Tank Replacement 500,000 500,000 700,000 1,200,000 2,000,000 3,200,000 Sweeney Ridge Tank Replacement 1,094,000 890,000 890,000 9,500,000 10,390,000 Advanced Water Meter 6,017,000 504,000 504,000 504,000
Acappella Well Project 2,348,000 1,032,000 3,000,000 4,032,000 4,032,000 Pressure Reg Station Impvt & Replacement 1,600,000 1,557,000 (346,000) 1,211,000 450,000 450,000 2,111,000 Well Rehabilitation 1,077,000 329,000 200,000 529,000 200,000 200,000 200,000 200,000 1,329,000 Wtr Qual Well Syst Upgrades & Sweeny Rdg Tank Chlorine0 600,000 600,000 600,000 Total Capital Funding 28,496,000 14,934,000 10,354,000 25,288,000 1,600,000 26,400,000 20,750,000 11,200,000 85,238,000 Estimated Annual Water Capital Improvement Expenditures [2] Average Annual Expenditures 17,048,000 17,048,000 17,048,000 17,048,000 17,048,000 85,240,000 1 Source: City of San Bruno Revised 5-Year Water Capital Program (Updated 11.4.22 & 1.23.23); budget appropriation required for project contract awards. 2 Source: Assumes average annual expenditures over the 5-year period. 2022/23
Table 5 Working Draft
2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 Effective Date of Rate Increases Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Jan-1 Overall Rate Adjustment 0.0% 6% 6% 6% 6% 6% 6% 5% 5% 4% Growth (3/4" Meter Equivalents) 20 20 20 20 20 20 20 20 20 20 Annual % Change in Water Sales -2.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total Water Sales (hcf) 1,281,000 1,281,000 1,281,000 1,281,000 1,281,000 1,281,000 1,281,000 1,281,000 1,281,000 1,281,000 Plus 10% Unaccounted Water 1,409,000 1,409,000 1,409,000 1,409,000 1,409,000 1,409,000 1,409,000 1,409,000 1,409,000 1,409,000 Groundwater Production (hcf) 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 SFPUC Water Supply (hcf) 509,000 509,000 509,000 509,000 509,000 509,000 509,000 509,000 509,000 509,000 GSR Yearly Designation ??? Recovery/Take - - - - - - - - - GSR Credit hcf (3,915 AF, 1,705,000 hcf) (509,000) - - - - - - - - - SFPUC Rate per hcf $4.75 $5.20 $5.30 $5.40 $5.50 $5.60 $5.70 $5.80 $5.90 $6.00 Interest Earnings Rate 1.5% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% City Cost Escalation 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Beginning Fund Balances $49,842,000 $40,814,000 $29,372,000 $18,280,000 $18,587,000 $19,105,000 $17,778,000 $16,989,000 $16,692,000 $16,824,000
REVENUES
Subtotal Rate Revenues 15,948,000 16,406,000 17,386,000 18,425,000 19,526,000 20,694,000 21,933,000 23,139,000 24,295,000 25,392,000 Investment Income 748,000 816,000 587,000 366,000 372,000 382,000 356,000 340,000 334,000 336,000 Connection/Mtr Inst/Capacity Fees 100,000 160,000 160,000 160,000 160,000 160,000 160,000 160,000 160,000 160,000 Other/Miscellaneous 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Revenues 16,816,000 17,402,000 18,153,000 18,971,000 20,078,000 21,256,000 22,469,000 23,659,000 24,809,000 25,908,000 Projected Debt Proceeds 12,000,000 12,000,000
EXPENSES
Operating & Maintenance
Salaries & Benefits 3,050,000 3,172,000 3,299,000 3,431,000 3,568,000 3,711,000 3,859,000 4,013,000 4,174,000 4,341,000 Less Capitalized Project Staffing (500,000) (500,000) (500,000) (500,000) (500,000) (375,000) (386,000) (398,000) (410,000) (422,000) Supplies & Materials 1,914,000 1,991,000 2,071,000 2,154,000 2,240,000 2,330,000 2,423,000 2,520,000 2,621,000 2,726,000 Utilities 570,000 593,000 617,000 642,000 668,000 695,000 723,000 752,000 782,000 813,000 SFPUC/NCCWD Wholesale Water 2,418,000 2,647,000 2,698,000 2,749,000 2,800,000 2,850,000 2,901,000 2,952,000 3,003,000 3,054,000 SFPUC GSR Credits (3,915 AF) (2,418,000) 0 0 0 0 0 0 0 0 0 SFPUC Meter Charges 153,000 159,000 165,000 172,000 179,000 186,000 193,000 201,000 209,000 217,000 BAWSCA Bond Surcharge 165,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 180,000 Internal/Intergovt Charges 2,760,000 2,870,000 2,985,000 3,104,000 3,228,000 3,357,000 3,491,000 3,631,000 3,776,000 3,927,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Subtotal 8,112,000 11,112,000 11,515,000 11,932,000 12,363,000 12,934,000 13,384,000 13,851,000 14,335,000 14,836,000 Debt Service
2017 Water Revenue Bonds 684,000 684,000 682,000 684,000 685,000 685,000 685,000 684,000 682,000 685,000 Projected 2025 Bonds (4.5% 30-Yr) 0 0 0 1,000,000 1,464,000 1,464,000 1,464,000 1,464,000 1,464,000 1,464,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Subtotal 684,000 684,000 682,000 1,684,000 2,149,000 2,149,000 2,149,000 2,148,000 2,146,000 2,149,000 Assumes total 5-year capital expenditures are spread evenly over the first 5 years Future capital expenditures are projected at $7.5 million per year with 3% cost escalation Capital Improvements 17,048,000 17,048,000 17,048,000 17,048,000 17,048,000 7,500,000 7,725,000 7,957,000 8,196,000 8,442,000 Total Expenses 25,844,000 28,844,000 29,245,000 30,664,000 31,560,000 22,583,000 23,258,000 23,956,000 24,677,000 25,427,000 Revenues Less Expenses (9,028,000) (11,442,000) (11,092,000) 307,000 518,000 (1,327,000) (789,000) (297,000) 132,000 481,000 Ending Fund Balances 40,814,000 29,372,000 18,280,000 18,587,000 19,105,000 17,778,000 16,989,000 16,692,000 16,824,000 17,305,000 Min Rsrv Target: 50% O&M&D + $5M CIP 9,400,000 10,900,000 11,100,000 11,810,000 12,260,000 12,540,000 12,770,000 13,000,000 13,240,000 13,490,000 Debt Service Coverage 12.73 9.20 9.73 4.18 3.59 3.87 4.23 4.57 4.88 5.15 Note: The projections assume 2022/23 is a Recovery/Take Year under the Groundwater Storage & Recovery (GSR) Agreement, but do not assume any GSR designations for future years.
Pay-Go Funding Generated for CIP 8,020,000 5,606,000 5,956,000 5,355,000 5,566,000 6,173,000 6,936,000 7,660,000 8,328,000 8,923,000 San Bruno Water Cash Flow Projections
Projected 2025 Bonds (tbd)
Table 6
City of San Bruno
Water Use by Month
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Total (hcf) Ttl (AF) % of Ttl 2017/18 Water Use (hcf)
Residential 98,929 84,385 105,093 82,391 98,284 74,142 88,842 71,291 85,285 68,624 85,930 76,210 1,019,406 2,340 75.0% Commercial 27,776 30,657 30,668 26,609 24,779 17,467 16,300 17,972 17,100 16,051 20,681 25,619 271,679 624 20.0% City 9,395 9,857 10,193 8,627 5,787 1,989 1,462 1,958 1,861 2,278 5,082 9,033 67,522 155 5.0%________________________________________________________________________________________________ ________________ ________ Total 136,100 124,899 145,954 117,627 128,850 93,598 106,604 91,221 104,246 86,953 111,693 110,862 1,358,607 3,119 100.0% 2018/19 Water Use (hcf)
Residential 99,235 83,302 108,893 81,401 107,093 74,114 96,641 69,252 82,283 65,068 90,124 75,180 1,032,586 2,370 75.1% Commercial 26,792 27,975 29,575 26,397 22,340 19,005 15,114 16,228 16,541 18,965 23,859 27,192 269,983 620 19.6% City 10,455 12,030 9,621 8,496 6,467 2,753 1,300 2,206 4,901 1,830 5,690 6,433 72,182 166 5.3%________________________________________________________________________________________________ ________________ ________ Total 136,482 123,307 148,089 116,294 135,900 95,872 113,055 87,686 103,725 85,863 119,673 108,805 1,374,751 3,156 100.0% 2019/20 Water Use (hcf)
Residential 104,044 82,122 105,703 82,444 99,083 74,819 86,683 69,158 86,527 72,266 99,115 79,921 1,041,885 2,392 74.5% Commercial 25,820 29,117 31,174 27,895 27,219 20,221 16,385 18,247 8,851 26,180 16,201 19,345 266,655 612 19.1% City 9,721 11,705 11,645 10,375 9,644 5,438 3,168 3,703 4,331 5,831 5,300 9,451 90,312 207 6.5%________________________________________________________________________________________________ ________________ ________ Total 139,585 122,944 148,522 120,714 135,946 100,478 106,236 91,108 99,709 104,277 120,616 108,717 1,398,852 3,211 100.0% 2020/21 Water Use (hcf)
Residential 108,328 88,279 113,474 85,834 106,905 76,531 93,931 70,930 88,345 69,007 97,563 77,828 1,076,955 2,472 77.2% Commercial 23,179 25,626 22,382 21,042 21,441 16,602 13,273 12,950 14,605 19,118 21,564 23,818 235,600 541 16.9% City 12,279 13,084 9,574 7,521 7,544 3,835 3,021 3,193 2,539 5,093 7,324 7,907 82,914 190 5.9%________________________________________________________________________________________________ ________________ ________ Total 143,786 126,989 145,430 114,397 135,890 96,968 110,225 87,073 105,489 93,218 126,451 109,553 1,395,469 3,204 100.0% 2021/22 Water Use (hcf)
Residential 99,080 77,895 97,460 76,264 90,525 66,937 84,523 67,597 84,441 66,277 88,813 71,236 971,048 2,229 74.3% Commercial 26,237 27,172 26,813 26,114 16,330 17,680 16,246 19,162 19,766 20,740 20,296 23,226 259,782 596 19.9% City 9,587 8,452 9,797 8,310 3,327 3,362 2,616 4,340 5,693 6,429 6,808 8,162 76,883 176 5.9%________________________________________________________________________________________________ ________________ ________ Total 134,904 113,519 134,070 110,688 110,182 87,979 103,385 91,099 109,900 93,446 115,917 102,624 1,307,713 3,002 100.0% 2022/23 Water Use (hcf)
Residential 94,289 74,070 97,618 70,837 88,780 68,015 493,609 1,133 73.7% Commercial 24,753 25,427 26,369 23,052 21,271 16,979 137,851 316 20.6% City 7,795 8,335 8,707 5,842 4,371 3,031 38,081 87 5.7%________________________________________________________________________________________________ ________________ ________ Total 126,837 107,832 132,694 99,731 114,422 88,025 - - - - - - 669,541 1,537 100.0% Source: Based on monthly water use data provided by the City of San Bruno.
Table 7
City of San Bruno
Water Sources of Supply by Month
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Total (hcf) Ttl (AF) % of Ttl 2017/18 Water Supply (hcf)
Wells 12,930 13,080 13,036 13,253 11,747 13,486 8,840 14,262 13,061 14,323 13,494 13,829 155,341 357 10.4% SFPUC 113,342 135,352 130,261 109,369 97,616 105,668 91,871 87,626 93,886 92,934 122,593 129,285 1,309,803 3,007 88.0% NCCWD 2,043 2,044 2,029 2,028 1,977 1,976 1,860 1,859 1,836 1,836 1,961 1,962 23,411 54 1.6%________________________________________________________________________________________________ ________________ ________ Total 128,315 150,476 145,326 124,650 111,340 121,130 102,571 103,747 108,783 109,093 138,048 145,076 1,488,555 3,417 100.0% 2018/19 Water Supply (hcf)
Wells 12,768 4,124 14,166 6,508 13,484 14,709 6,853 13,580 14,364 15,582 13,649 9,825 139,612 321 9.6% SFPUC 119,235 136,866 119,224 97,586 104,661 99,365 94,911 86,332 94,926 102,297 113,596 129,565 1,298,564 2,981 89.1% NCCWD 2,057 2,056 3,888 1,638 1,638 1,071 1,071 975 975 946 946 1,234 18,495 42 1.3%________________________________________________________________________________________________ ________________ ________ Total 134,060 143,046 137,278 105,732 119,783 115,145 102,835 100,887 110,265 118,825 128,191 140,624 1,456,671 3,344 100.0% 2019/20 Water Supply (hcf)
Wells 1,227 14,456 11,484 7,453 10,864 - 13,174 13,809 14,703 1,282 12,824 9,030 110,306 253 7.2% SFPUC 131,267 137,064 122,585 115,869 108,311 120,738 83,960 105,336 107,464 106,008 125,419 136,511 1,400,532 3,215 91.9% NCCWD 1,234 1,502 1,503 873 874 885 885 946 947 1,163 1,164 1,172 13,148 30 0.9%________________________________________________________________________________________________ ________________ ________ Total 133,728 153,022 135,572 124,195 120,049 121,623 98,019 120,091 123,114 108,453 139,407 146,713 1,523,986 3,499 100.0% 2020/21 Water Supply (hcf)
Wells 14,349 12,423 14,479 14,520 14,105 13,412 14,091 17,765 15,635 5,342 10,500 18,783 165,404 380 11.0% SFPUC 128,986 135,657 110,866 109,817 109,187 99,794 82,640 94,325 105,412 118,954 122,494 110,268 1,328,400 3,050 88.2% NCCWD 1,172 1,172 1,172 1,176 1,175 841 841 1,043 1,044 1,043 1,044 1,050 12,773 29 0.8%________________________________________________________________________________________________ ________________ ________ Total 144,507 149,252 126,517 125,513 124,467 114,047 97,572 113,133 122,091 125,339 134,038 130,101 1,506,577 3,459 100.0% 2021/22 Water Supply (hcf)
Wells 69,697 78,147 73,858 65,865 76,177 82,308 79,135 80,041 96,250 76,332 93,581 90,099 961,490 2,207 64.9% SFPUC 68,454 60,969 62,029 53,223 35,552 29,115 27,064 26,805 33,345 27,250 41,465 41,949 507,220 1,164 34.3% NCCWD 1,051 957 957 978 978 1,043 1,044 972 972 975 976 1,137 12,040 28 0.8%________________________________________________________________________________________________ ________________ ________ Total 139,202 140,073 136,844 120,066 112,707 112,466 107,243 107,818 130,567 104,557 136,022 133,185 1,480,750 3,399 100.0% 2022/23 Water Supply (hcf)
Wells 90,682 81,262 88,581 90,282 72,254 69,615 492,676 1,131 66.4% SFPUC 46,952 53,782 35,958 33,412 35,594 38,392 244,090 560 32.9% NCCWD 1,137 1,110 1,109 1,136 1,135 5,627 13 0.8%________________________________________________________________________________________________ ________________ ________ Total 138,771 136,154 125,648 124,830 108,983 108,007 - - - - - - 742,393 1,704 100.0% Source: Based on monthly water use data provided by the City of San Bruno.
Table 8
San Bruno Water Rate Study
Meter Equivalents
Meter Meter Number AWWA Meter 3/4" Meter
Code Size of Accts* Capacity Ratio Equivalents
WT01 3/4" 10,710 1.00 10,710 WT02 1" 390 1.67 650 WT03 1-1/2" 213 3.33 710 WT04 2" 310 5.33 1,653 WT05 3" 14 10.00 140 WT06 4" 2 16.67 33 WT07 6" 1 33.33 33 WT08 8" 2 53.33 107 WT09 10" - 76.67 - _______ _______ Total 11,640 13,930 _______________ Source: Average monthly billed accounts from March - July 2022.
Table 9
San Bruno Water Rate Study
Historical Water Use by Rate Class
Bi-Monthly Period Jul/Aug Sep/Oct Nov/Dec Jan/Feb Mar/Apr May/Jun Total % of Ttl 2019/20 Water Use (hcf)
Single Family Residential
Tier 1 80,782 81,262 79,325 75,940 76,832 80,759 474,900 36.0% Tier 2 30,324 32,382 27,636 21,331 21,942 30,689 164,304 12.4% Tier 3 9,180 11,504 8,196 5,297 4,766 8,456 47,399 3.6% Subtotal 120,286 125,148 115,157 102,568 103,540 119,904 686,603 52.0% Multi-Family Res 65,628 62,797 58,349 55,421 54,608 58,394 355,197 26.9% Commercial/Other 58,010 61,998 50,725 36,629 35,400 36,258 279,020 21.1% Total 243,924 249,943 224,231 194,618 193,548 214,556 1,320,820 100.0% 2020/21 Water Use (hcf)
Single Family Residential
Tier 1 83,196 83,489 81,204 77,104 75,823 79,654 480,470 36.2% Tier 2 37,264 37,332 30,916 23,923 21,240 28,208 178,883 13.5% Tier 3 13,807 14,422 10,120 6,905 6,055 8,168 59,477 4.5% Subtotal 134,267 135,243 122,240 107,932 103,118 116,030 718,830 54.1% Multi-Family Res 64,705 64,345 61,194 57,009 54,279 58,768 360,300 27.1% Commercial/Other 51,918 46,202 41,217 26,886 35,674 47,202 249,099 18.8% Total 250,890 245,790 224,651 191,827 193,071 222,000 1,328,229 100.0% 2021/22 Water Use (hcf)
Single Family Residential
Tier 1 80,047 79,364 75,757 73,990 74,239 75,992 459,389 37.1% Tier 2 29,550 28,295 21,455 19,480 19,191 22,227 140,198 11.3% Tier 3 10,066 9,947 6,043 6,347 5,782 6,953 45,138 3.6% Subtotal 119,663 117,606 103,255 99,817 99,212 105,172 644,725 52.0% Multi-Family Res 57,095 55,823 54,100 52,405 51,446 54,348 325,217 26.2% Commercial/Other 53,048 55,493 34,684 35,853 43,466 46,806 269,350 21.7% Total 229,806 228,922 192,039 188,075 194,124 206,326 1,239,292 100.0% 80,78281,26279,32575,94076,83280,75930,32432,38227,63621,33121,94230,6899,18011,5048,1965,2974,7668,456120,286125,148115,157102,568103,540119,904020,00040,00060,00080,000100,000120,000140,000160,000Jul/Aug Sep/Oct Nov/Dec Jan/Feb Mar/Apr May/JunTier 1Tier 2Tier 32019/20 Single Family Residential Water Use by Tier (hcf)Base SFR Use(Avg Use from Jan-Apr) 83,19683,48981,20477,10475,82379,65437,26437,33230,91623,92321,24028,20813,80714,42210,1206,9056,0558,168134,267135,243122,240107,932103,118116,030020,00040,00060,00080,000100,000120,000140,000160,000Jul/Aug Sep/Oct Nov/Dec Jan/Feb Mar/Apr May/JunTier 1Tier 2Tier 32020/21 Single Family Residential Water Use by Tier (hcf)Base SFR Use (Avg Use from Jan-Apr) 80,78281,26279,32575,94076,83280,75930,32432,38227,63621,33121,94230,6899,18011,5048,1965,2974,7668,456120,286125,148115,157102,568103,540119,904020,00040,00060,00080,000100,000120,000140,000160,000Jul/Aug Sep/Oct Nov/Dec Jan/Feb Mar/Apr May/JunTier 1Tier 2Tier 32021/22 Single Family Residential Water Use by Tier (hcf)Base SFR Use(Avg Use from Jan-Apr) City of San Bruno
Sewer Rate Study Tables
10.428.3450.0013.5834.4464.00 84.5888.00 89.2832.2751.9077.8953.59106.67116.7787.33127.06 109.16142.92145.58157.67319.33
28.8836.7637.2122.7361.8543.4019.4752.5533.1027.29
39.29 45.10 50.00 50.79 57.17 64.00 84.58 88.00 89.28 94.12 95.30 97.36 106.14 106.67 116.77 120.43 127.06 136.45 142.92 145.58 157.67 $0$25$50$75$100$125$150$175$200 Sewer Usage Charges Fixed or Minimum ChargesSingle Family Residential Monthly Sewer RatesBased on flat rate or 5 hcf of monthly winter water useAverage: $106.09Median: $96.33 Note: Some agencies receive property tax revenues that reduce the funding needs from sewer rates. 2017 2018 2019 2020 2021
Rate Increase % 5% 5% 5% 5% 5%
MONTHLY SERVICE CHARGES Currently Cancelled
Fixed monthly charge per account in effect
Single Family Residential $27.88 $29.27 $30.73 $32.27 $33.88 All Other Customers (Charge Based on Water Meter Size)
Meter Size
3/4-inch $27.88 $29.27 $30.73 $32.27 $33.88
1-inch 46.47 48.78 51.22 53.78 56.47 1-1/2 inch 92.93 97.57 102.43 107.57 112.93 2-inch 148.69 156.11 163.89 172.11 180.69 3-inch 278.80 292.70 307.30 322.70 338.80 4" & Larger 464.67 487.83 512.17 537.83 564.67
QUANTITY CHARGES
Billed per hundred cubic feet (hcf)
Residential $10.69 $11.22 $11.78 $12.37 $12.99
Commercial
C-1 Light Commercial 9.93 10.43 10.95 11.50 12.08 C-2 Medium Commercial 10.69 11.22 11.78 12.37 12.99 C-3 Heavy Commercial 15.21 15.97 16.77 17.61 18.49 C-4 Special Commercial 19.74 20.73 21.77 22.86 24.00 Governmental 10.69 11.22 11.78 12.37 12.99 Industrial
I-1 Light Industrial 10.69 11.22 11.78 12.37 12.99 I-2 Industrial Flow 7.68 8.06 8.46 8.88 9.32 COD per lb 0.59 0.62 0.65 0.68 0.71 SS per lb 1.22 1.28 1.34 1.41 1.48 Note: 1 hcf = 100 cubic feet or approximately 748 gallons.
Wastewater Rates Effective July 1
Residential Quantity Charges are billed based on average metered water use from two bi-monthly billing periods during wet weather months between either Nov-Mar or Dec-Apr.
Non-Residential Quantity Charges are billed based on metered water use during each billing period.
Table 2
San Bruno Wastewater Rate Study
Wastewater Fund Reserves
Account Title 2017 2018 2019 2020 2021 2022
Preliminary
Cash Reserves & Receivables
Cash & Investments $14,816,937 $15,016,784 $26,969,823 $32,678,555 $40,790,260 $46,255,182 Accounts Receivable - Other 1,818,515 2,069,484 2,203,592 2,300,808 2,279,792 2,123,204____________________________________________________________ Subtotal 16,635,452 17,086,268 29,173,415 34,979,363 43,070,052 48,378,386 Accounts Payable
Accounts Payable & Accrued Liabilities (1,254,772) (1,443,262) (3,092,063) (1,601,524) (1,251,023) (118,137) Compensated Absences Current (15,180) (17,494) (11,777) (15,918) (18,969) (12,763) Compensated Absences Noncurrent (78,687) (79,346) (64,829) (81,510) (100,089) (95,451)____________________________________________________________ Subtotal (1,348,639) (1,540,102) (3,168,669) (1,698,952) (1,370,081) (226,351) Net Funds Available for O&M + Capital 15,286,813 15,546,166 26,004,746 33,280,411 41,699,971 48,152,035 Cash & Investments with Fiscal Agent473,629 27,988,168 17,713,717 8,781,443 3,028,537 1,402,925 Includes 2017 Wastewater Rev Bond Funds
Total Funds Available for O&M + Capital 15,760,442 43,534,334 43,718,463 42,061,854 44,728,508 49,554,960 Source: City of San Bruno Comprehensive Annual Financial Reports Note: City built up fund reserves in recent years due to termporary deferral of some major capital improvement projects due to staffing limitations and lead time for design and permitting. City is moving forward with its capital program and anticipated drawing down fund reserves as projects are funded in upcoming years.
As of June 30
Table 3
San Bruno Wastewater Rate Study
Outstanding Debt Service
Fiscal Year 2013 WW 2017 WW
Ending Rev Bonds Rev Bonds Total
2021 $542,600 $1,442,850 $1,985,450
2022 546,800 1,439,050 1,985,850
2023 541,725 1,439,650 1,981,375 2024 544,475 1,439,450 1,983,925 2025 541,225 1,438,200 1,979,425 2026 547,225 1,440,700 1,987,925 2027 546,975 1,441,700 1,988,675 2028 544,975 1,441,200 1,986,175 2029 546,825 1,439,200 1,986,025 2030 547,275 1,440,700 1,987,975 2031 540,675 1,440,450 1,981,125 2032 543,400 1,438,450 1,981,850 2033 - 1,439,700 1,439,700
2034 - 1,438,950 1,438,950
2035 - 1,438,300 1,438,300
2036 - 1,441,900 1,441,900
2037 - 1,439,600 1,439,600
2038 - 1,442,200 1,442,200
2039 - 1,438,200 1,438,200
2040 - 1,437,800 1,437,800
2041 - 1,440,800 1,440,800
2042 - 1,442,000 1,442,000
2043 - 1,441,400 1,441,400
2044 - 1,439,000 1,439,000
2045 1,439,800 1,439,800
2046 1,438,600 1,438,600
2047 1,440,400 1,440,400
Rate Covenant: 1.25x debt service coverage requirement Optional Redemption starting July 1, 2027
Table 4
San Bruno Wastewater Rate Study
San Bruno Share of Outstanding WQCP Debt
Fiscal 1999 2007 2018
Year SRF Loan SRF Loan SRF Loan Total
Ending C-06-4614-111 C-06-4728-110
30-Jun 18.01% 32.70% 26.92%
2021 $589,551 $458,471 - $1,048,022
2022 589,551 458,471 - 1,048,022
2023 589,551 458,471 - 1,048,022
2024 - 458,471 796,976 1,255,447
2025 - 458,471 796,976 1,255,447
2026 - 458,471 796,976 1,255,447
2027 - 458,471 796,976 1,255,447
2028 - - 796,976 796,976
2029 - - 796,976 796,976
2030 - - 796,976 796,976
2031 - - 796,976 796,976
2032 - - 796,976 796,976
2033 - - 796,976 796,976
2034 - - 796,976 796,976
2035 - - 796,976 796,976
2036 - - 796,976 796,976
2037 - - 796,976 796,976
2038 - - 796,976 796,976
2039 - - 796,976 796,976
2040 - - 796,976 796,976
2041 - - 796,976 796,976
2042 - - 796,976 796,976
2043 - - 796,976 796,976
2044 - - - 0
Note: These loans are secured by an agreement with South San Francisco and are not secured by the net revenues of San Bruno's sewer enterprise.
Table 5
San Bruno Wastewater Rate Study
Wastewater Capital Improvement Program
2023/24 2024/25 2025/26 2026/27 5-Yr Total
Prior Approp Est. Carryover New Funding Total
Funding Sources
Wastewater Fund 36,796,000 20,168,000 5,300,000 25,468,000 14,700,000 14,750,000 11,500,000 10,500,000 76,918,000 Wastewater Capital Improvement Projects
Main Improvement & Replacement Program 13,360,000 8,466,000 1,700,000 10,166,000 7,500,000 11,200,000 3,750,000 6,000,000 38,616,000 Pump Station Improvement & Replacement 10,760,000 5,203,000 100,000 5,303,000 5,303,000 Subtotal Sewer Collection System 24,120,000 13,669,000 1,800,000 15,469,000 7,500,000 11,200,000 3,750,000 6,000,000 43,919,000 Water Quality Control Plant Ongoing Upgrades 12,676,000 1,500,000 500,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 10,000,000 WQCP Biosolids Handling Improvements (est) [1] 14,000,000 14,000,000 Total Capital Funding 36,796,000 15,169,000 2,300,000 17,469,000 9,500,000 13,200,000 5,750,000 22,000,000 67,919,000 Estimated Annual Wastewater Capital Expenditures (Excludes Debt-Financing WQCP Biosolids Improvements) Sewer Collection System Upgrades [2] 8,784,000 8,784,000 8,784,000 8,784,000 8,784,000 43,920,000 Water Quality Control Plant Upgrades 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 10,000,000 Average Annual Expenditures 10,784,000 10,784,000 10,784,000 10,784,000 10,784,000 53,920,000 Source: City of San Bruno Revised 5-Year Wastewater Capital Program (Updated 11.4.22); budget appropriation required for project contract awards. 1 South San Francisco anticipates financing a biosolids handling improvement project with long-term debt, with a portion allocated to San Bruno 2 Source: Assumes average annual expenditures over the 5-year period for City sewer collection system upgrades. 2022/23
Table 6 Working Draft
2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 Effective Date of Rate Increases July 1 July 1 July 1 July 1 July 1 July 1 July 1 July 1 July 1 Overall Rate Adjustment 0.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 4.0% Growth (3/4" Meter Equivalents) 20 20 20 20 20 20 20 20 20 Annual % Change in Billed Sewer Use 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Interest Earnings Rate 1.5% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% WQCP Cost Escalation 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% City Cost Escalation 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Beginning Unrestricted Fund Rsrvs$47,280,000 $43,137,000 $39,411,000 $36,165,000 $33,429,000 $30,457,000 $29,323,000 $28,557,000 $28,196,000 $28,290,000
REVENUES
Sewer Rate Revenues 19,100,000 20,055,000 21,058,000 22,111,000 23,217,000 24,378,000 25,597,000 26,877,000 28,221,000 29,350,000 Connection & Capacity Fees 100,000 132,000 132,000 132,000 132,000 132,000 132,000 132,000 132,000 132,000 Investment Income 600,000 863,000 788,000 723,000 669,000 609,000 586,000 571,000 564,000 566,000 Other/Miscellaneous 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Total Revenues 19,820,000 21,070,000 21,998,000 22,986,000 24,038,000 25,139,000 26,335,000 27,600,000 28,937,000 30,068,000
EXPENSES
Operating & Maintenance
Salaries & Benefits 2,586,000 2,689,000 2,797,000 2,909,000 3,025,000 3,146,000 3,272,000 3,403,000 3,539,000 3,681,000 Less Capitalized Project Staffing (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) Supplies & Services 1,295,000 1,347,000 1,401,000 1,457,000 1,515,000 1,576,000 1,639,000 1,705,000 1,773,000 1,844,000 Wastewater Treatment SSF 3,957,000 4,115,000 4,280,000 4,451,000 4,629,000 4,814,000 5,007,000 5,207,000 5,415,000 5,632,000 Internal Charges 2,811,000 2,923,000 3,040,000 3,162,000 3,288,000 3,420,000 3,557,000 3,699,000 3,847,000 4,001,000 Vehicle & Equip Replacement 0 200,000 208,000 216,000 225,000 234,000 243,000 253,000 263,000 274,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Subtotal 10,149,000 10,774,000 11,226,000 11,695,000 12,182,000 12,690,000 13,218,000 13,767,000 14,337,000 14,932,000 Debt Service
2013 Wastewater Bonds 542,000 544,000 541,000 547,000 547,000 545,000 547,000 547,000 541,000 543,000 2017 Wastewater Bonds 1,440,000 1,439,000 1,438,000 1,441,000 1,442,000 1,441,000 1,439,000 1,441,000 1,440,000 1,438,000 Share of WQCP Debt, Subordinate 1,048,000 1,255,000 1,255,000 1,255,000 1,255,000 797,000 797,000 797,000 797,000 797,000 Share of New WQCP Debt, Projected 0 0 0 0 800,000 800,000 800,000 800,000 800,000 800,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Subtotal All Debt 3,030,000 3,238,000 3,234,000 3,243,000 4,044,000 3,583,000 3,583,000 3,585,000 3,578,000 3,578,000 Other Non-Operating Assumes total 5-year capital expenditures are spread evenly over the first 5 years Future capital expenditures are projected at $10 million per year with 3% cost escalation City Sewer System Capital Projects 8,784,000 8,784,000 8,784,000 8,784,000 8,784,000 7,500,000 7,725,000 7,957,000 8,196,000 8,442,000 City Share of WPCP Capital Projects 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,500,000 2,575,000 2,652,000 2,732,000 2,814,000___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ ___________ Subtotal 10,784,000 10,784,000 10,784,000 10,784,000 10,784,000 10,000,000 10,300,000 10,609,000 10,928,000 11,256,000 Total Expenses 23,963,000 24,796,000 25,244,000 25,722,000 27,010,000 26,273,000 27,101,000 27,961,000 28,843,000 29,766,000 Revenues Less Expenses (4,143,000) (3,726,000) (3,246,000) (2,736,000) (2,972,000) (1,134,000) (766,000) (361,000) 94,000 302,000 Ending Unrestricted Fund Balances43,137,000 39,411,000 36,165,000 33,429,000 30,457,000 29,323,000 28,557,000 28,196,000 28,290,000 28,592,000 Min Rsrv Target: 50% O&M&D + $5M 11,590,000 12,010,000 12,230,000 12,470,000 13,110,000 13,140,000 13,400,000 13,680,000 13,960,000 14,260,000 Debt Service Coverage
On Parity Debt (Min>1.25) 4.88 5.19 5.44 5.68 5.96 6.27 6.60 6.96 7.37 7.64 On Total Debt Incl Subord SSF Debt Pymts 3.19 3.18 3.33 3.48 2.93 3.47 3.66 3.86 4.08 4.23 Pay-Go Funding Generated for CIP 6,641,000 7,058,000 7,538,000 8,048,000 7,812,000 8,866,000 9,534,000 10,248,000 11,022,000 11,558,000 San Bruno Wastewater Cash Flow Projections
Table 7
San Bruno Wastewater Rate Study
Historical Sewer Use by Rate Class
Bi-Monthly Period Jul/Aug Sep/Oct Nov/Dec Jan/Feb Mar/Apr May/Jun Total % of Ttl 2019/20 Sewer Use (hcf)
RESIDENTIAL
Based on prior year winter water use
SEWR1 151,990 151,670 153,270 151,514 151,980 151,424 911,848 77.7% SEWR1L 4,928 5,516 5,640 5,800 5,708 5,844 33,436 2.8%
Subtotal 156,918 157,186 158,910 157,314 157,688 157,268 945,284 80.6%
COMMERCIAL/OTHER
C-1 Light Comm 2,269 2,689 2,418 2,175 2,087 1,789 13,427 1.1% C-2 Medium Comm 18,253 20,759 17,189 14,164 11,496 9,905 91,766 7.8% C-3 Heavy Comm 13,785 14,098 13,481 12,580 8,024 5,976 67,944 5.8% C-4 Special Comm 16 16 15 14 15 14 90 0.0%
Governmental 11,533 13,627 11,648 3,658 4,463 7,816 52,745 4.5% Industrial Light 217 171 251 547 252 610 2,048 0.2%
Subtotal 46,073 51,360 45,002 33,138 26,337 26,110 228,020 19.4% Total 202,991 208,546 203,912 190,452 184,025 183,378 1,173,304 100.0% 2020/21 Sewer Use (hcf)
RESIDENTIAL
Based on prior year winter water use
SEWR1 157,130 156,214 155,940 156,076 156,598 156,450 938,408 80.0% SEWR1L 5,596 6,132 6,330 6,410 6,538 6,618 37,624 3.2%
Subtotal 162,726 162,346 162,270 162,486 163,136 163,068 976,032 83.2%
COMMERCIAL/OTHER
C-1 Light Comm 1,700 1,901 2,005 1,974 2,076 2,341 11,997 1.0% C-2 Medium Comm 12,596 11,722 11,881 10,306 13,431 14,497 74,433 6.3% C-3 Heavy Comm 8,761 8,693 9,051 7,388 8,893 10,244 53,030 4.5% C-4 Special Comm 25 21 16 18 20 19 119 0.0%
Governmental 12,014 9,621 5,235 2,967 4,235 7,019 41,091 3.5% Industrial Light 343 333 333 346 400 321 2,076 0.2%
Subtotal 35,439 32,291 28,521 22,999 29,055 34,441 182,746 15.6% Total 198,165 194,637 190,791 185,485 192,191 197,509 1,158,778 98.8% 2021/22 Sewer Use (hcf)
RESIDENTIAL
Based on prior year winter water use
SEWR1 158,022 158,924 158,792 158,632 158,212 158,032 950,614 81.0% SEWR1L 6,710 5,648 5,838 5,780 5,936 5,960 35,872 3.1%
Subtotal 164,732 164,572 164,630 164,412 164,148 163,992 986,486 84.1%
COMMERCIAL/OTHER
C-1 Light Comm 2,215 2,104 2,111 2,313 2,264 2,020 13,027 1.1% C-2 Medium Comm 15,623 15,249 11,798 12,466 11,638 12,761 79,535 6.8% C-3 Heavy Comm 10,967 11,961 10,464 10,554 10,894 11,101 65,941 5.6% C-4 Special Comm 18 18 13 16 17 18 100 0.0%
Governmental 7,062 6,147 2,895 3,229 4,392 5,214 28,939 2.5% Industrial Light 332 359 376 354 356 393 2,170 0.2%
Subtotal 36,217 35,838 27,657 28,932 29,561 31,507 189,712 16.2% Total 200,949 200,410 192,287 193,344 193,709 195,499 1,176,198 100.2% Source: Based on detailed utility billing data files.