SAFER reserves the right to supplement this comment throughout the administrative process. Galante Vineyards v. Monterey Peninsula Water Management Dist., 60 Cal. App. 4th 1109, 1121 (1997).
Sincerely,
Richard Drury
Lozeau Drury LLP
August 4, 2026
TO: City Council
REQUESTED
BY:
Kimberly Ganimian, Finance Director
APPROVED
BY:
Travis Randel, Interim City Manager
SUBJECT: Use of ARPA Funds CY 26 Q2
RECOMMENDATION:
Staff recommends that the City Council RECEIVE and FILE the report of the ARPA funds.
DISCUSSION:
The American Rescue Plan Act (ARPA) was signed into law by the President on March 11, 2021. The Fiscal Recovery Funds are intended to provide support to State, local, and Tribal governments in responding to the impact of COVID-19 and in the efforts to contain COVID-19 in communities, residents, and businesses. One of the most notable amendments that the Secretary of the Treasury has adopted as the final rule (published May 17, 2021) enables recipients to claim a standard allowance for revenue loss of up to $10 million dollars. The provisions in this final rule are effective April 1, 2022.
On July 13, 2021, the City received its first of two installments of the $11,773,274 in ARPA funds allocated to the City. The second installment was received on July 21, 2022.
On August 17, 2021, the City Council approved an initial project list for the use of ARPA funds. The initial projects were designed to meet specific categories in the final rule to maximize community benefit while prioritizing community desires (as documented by Measure V Community Survey results).
On January 16, 2024, the City Council approved the final project list, which ultimately consisted of 15 projects. The ARPA funding has been spent down on all but one remaining project, the Bath Well Treatment Plant. The construction contract for the Bath Well Treatment Plant was awarded in January 2024. Construction began in April 2024 and has been completed. It is in the final testing phase as of March 31, 2026.
During the reporting period of April 1, 2026, through June 31, 2026, ARPA expenditures totaled $58,099.87. Total ARPA expenditures increased from 99.16% in the previous reporting period to 99.65% in the current period. This increase is primarily due to payments made for construction management services and treatment plant construction.
ARPA funds have been fully obligated by the December 31, 2024, deadline. The final remaining project is on course to have all ARPA funds expended by the December 31, 2026, deadline.
FISCAL IMPACT:
There is no fiscal impact related to reporting the use of ARPA funds.
Attachments
ARPA Summary Report - 06-30-26
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026 Prior Current Total
Item # Description Estimate Expenditures Expenditures Expenditures Remaining Category D - Investments to Infrastructure
20-004 New Grand Well 1,787,064.6 1,787,064.6 0 - 0 1,787,064.6 - 0 22-005 Bath Well Treatment Plant 7,838,088.7 7,738,877.4 6 58,099.8 3 7,796,977.3 7 41,111.4 0 6 Category C - Revenue Loss
ARPA-A Lead Service Line Replacement Program 13,774.0 13,774.0 0 - 0 13,774.0 - 0 CP-003 A Cottonwood Lift Station 65,834.3 65,834.3 8 - 8 65,834.3 - 8 CP-003 B Sewer Main Line Replacement (Tahquitz) 500,000.0 500,000.0 0 - 0 500,000.0 - 0 ARPA-B Mobile Bypass Pump 60,000.0 60,000.0 0 - 0 60,000.0 - 0 ARPA-C Community Development Software Upgrade 273,080.6 273,080.6 2 - 2 273,080.6 - 2 ARPA-D City Hall Queue Management System 8,436.59 8,436.59 - 8,436.59 - 18-007 Soofa Sign 18,000.0 18,000.0 0 - 0 18,000.0 - 0
22-014 City Hall Front Lobby/Office Remodel 80,000.0 80,000.0 0 - 0 80,000.0 - 022-015 Community Center Remodel 73,903.6 73,903.6 7 - 7 73,903.6 - 722-009 Fitness Court at Mistletoe Park 186,000.0 186,000.0 0 - 0 186,000.0 - 022-017 Small Business Grants 52,500.0 52,500.0 0 - 0 52,500.0 - 0 ARPA-G City Net - Year 2 costs with "Rapid Rehousing" 425,295.6 425,295.6 2 - 2 425,295.6 - 2 23-002 Artesia Main Line Replacement 391,295.7 391,295.7 6 - 6 391,295.7 - 6 11,674,062.6 11,773,274.00 58,099.8 7 11,732,162.5 7 41,111.4 4 6
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026 Prior Current Total City
Item # Description Estimate Expenditures Expenditures Expenditures Contribution Remaining Category D - Investments to Infrastructure
20-004 New Grand Well 1,787,064.60 1,787,064.60 - 1,787,064.60 - 22-010 New Grand Well Treatment Plant - - - - -
22-005 Bath Well Treatment Plant 7,838,088.76 7,738,877.43 58,099.87 7,796,977.30 41,111.46 Category C - Revenue Loss
ARPA-A Lead Service Line Replacement Program 13,774.00 13,774.00 - 13,774.00 - 22-011 SCADA Replacement - - - - -
CP -003 A Cottonwood Lift Station 65,834.38 65,834.38 - 65,834.38 - CP-003 B Sewer Main Line Replacement (Tahquitz) 500,000.00 500,000.00 - 500,000.00 - ARPA-B Mobile Bypass Pump 60,000.00 85,178.22 - 85,178.22 (25,178.22) - 22-013 Civic Center/Main Street/Broadband - - - - -
ARPA-C Community Development Software Upgrade 273,080.62 273,080.62 - 273,080.62 - ARPA-D City Hall Queue Management System 8,436.59 8,436.59 - 8,436.59 - 18-007 Soofa Sign 18,000.00 18,000.00 - 18,000.00 -
22-014 City Hall Front Lobby/Office Remodel 80,000.00 81,804.04 - 81,804.04 (1,804.04) - 22-015 Community Center Remodel 73,903.67 73,903.67 - 73,903.67 - 22-009 Fitness Court at Mistletoe Park 186,000.00 205,637.33 - 205,637.33 (19,637.33) - 22-016 Splashpad at Sallee Park - - - - -
22-017 Small Business Grants 52,500.00 52,500.00 - 52,500.00 -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026 Prior Current Total City
Item # Description Estimate Expenditures Expenditures Expenditures Contribution Remaining 22-018 Early Childhood Development Site Grants - - - - - ARPA-G City Net - Year 2 costs with "Rapid Rehousing" 425,295.62 425,295.62 - 425,295.62 - 22-019 Local Business Development Incentives - - - - -
ARPA-F Community Foundation - - - - -
23-002 Artesia Main Line Replacement 391,295.76 391,295.76 - 391,295.76 - Unallocated -
11,720,682.26 11,773,274.00 58,099.87 11,778,782.13 (46,619.59) 41,111.46 11,732,162.54
ARPA Project 11,732,162.54 Variance -
CITY OF SAN JACINTO
ARPA ALLOCATION SCHEDULE
Final Item
# Description
Estimate at
06/30/2024
Category D - Investments to Infrastructure
20-004 New Grand Well 1,787,064.60
22-005 Bath Well Treatment Plant 7,838,088.76
Category C - Revenue Loss
ARPA-A Lead Service Line Replacement Program 13,774.00
CP -003 A Cottonwood Lift Station 65,834.38
CP -003 B Sewer Main Line 500,000.00
ARPA-B Mobile Bypass Pump 60,000.00
ARPA-C Community Development Software Upgrade 273,080.62 ARPA-D City Hall Queue Management System 8,436.59
18-007 Soofa Sign 18,000.00
22-009 Fitness Court at Mistletoe Park 186,000.00
22-014 City Hall Front Lobby/Office Remodel 80,000.00
22-015 City Hall Front Lobby/Office Remodel 73,903.67
22-017 Small Business Grants 52,500.00
ARPA-G City Net - Year 2 costs with "Rapid Rehousing" 425,295.62 23-002 Artesia Main Line Replacement 391,295.76
Unallocated
11,773,274.00
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026New Grand Well - Design/Engineering/ConstructionCIP #20-004 - ARPA Subcategory 5.13Obligation: $1,787,064.60
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 1,787,064.60Total 1,787,064.60Estimate 1,787,064.60Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026New Grand Well Treatment Plant - Design/Engineering/ConstructionCIP #22-010 - ARPA Subcategory 5.10Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Bath Well Treatment Plant - Design/Engineering/ConstructionCIP #22-005 - ARPA Subcategory 5.10Obligation: $7,838,088.76
TRANS DATE VENDOR DESCRIPTION AMOUNT
5/31/2026 PACIFIC HYDROTECH WORK COMPLETED 12,529.674/30/2026 PACIFIC HYDROTECH WORK COMPLETED 31,262.284/21/2026 CIVILTEC ENGINEERING PROF SVCS THROUGH 3/31/26 7,284.502/26/2026 RAIN FOR RENT LLC RENTAL 2/19-2/25/26 7,023.42 Current expenditures 58,099.87Prior expenditures 7,738,877.43Total 7,804,000.72Estimate 7,838,088.76Remaining 34,088.04
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Lead Service Line Replacement - Initial inspectionProject "ARPA-A" - ARPA Subcategory 6.1Obligation: $13,774.00
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 13,774.00Total 13,774.00Estimate 13,774.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026SCADA ReplacementCIP #22-011 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Cottonwood Lift StationCIP #CP-003A - ARPA Subcategory 6.1Obligation: $65,834.38
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 65,834.38Total 65,834.38Estimate 65,834.38Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Sewer Main Line Replacement (Tahquitz)CIP #CP-003B - ARPA Subcategory 6.1Obligation: $500,000
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 500,000.00Total 500,000.00Estimate 500,000.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Parkside Village Stormwater Basin - Design/Engineering/ConstructionCIP #22-003 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Sanderson Stormwater Culverts - Design/Engineering/ConstructionCIP #22-012 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate at 06/30/2022 -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Mobile Bypass PumpProject "ARPA-B" - ARPA Subcategory 6.1Obligation: $60,000
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 85,178.22City Contribution (25,178.22)Total 60,000.00Estimate 60,000.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Civic Center/Main Street Broadband - Design/EngineeringCIP #22-013 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Community Development Software UpgradeProject "ARPA-C" - ARPA Subcategory 6.1Obligation: $273,080.62
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expendituresPrior expenditures 273,080.62Total 273,080.62Estimate 273,080.62Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026City Hall Queue Management SystemProject "ARPA-D" - ARPA Subcategory 6.1Obligation: $8,436.59
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 8,436.59Total 8,436.59Estimate 8,436.59Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Soofa SignCIP #18-007 - ARPA Subcategory 6.1Obligation: $18,000.00
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 18,000.00Total 18,000.00Estimate 18,000.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026City Hall Front Lobby/Office RemodelCIP #22-014 - ARPA Subcategory 6.1Obligation: $80,000
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 81,804.04City Contribution (1,804.04)Total 80,000.00Estimate 80,000.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Community Center RemodelCIP #22-015 - ARPA Subcategory 6.1Obligation: $73,903.67
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 73,903.67Total 73,903.67Estimate at 12/31/22 -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Fitness Court at Mistletoe ParkCIP #22-009 - ARPA Subcategory 6.1Obligation: $186,000
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 205,637.33City Contribution (19,637.33)Total 186,000.00Estimate 186,000.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Splashpad at Sallee ParkCIP #22-016 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Small Business GrantsCIP #22-017 - ARPA Subcategory 6.1Obligation: $52,500
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures 52,500.00Total 52,500.00Estimate 52,500.00Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Early Childhood Development GrantsCIP #22-018 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026City Net Year 2 Costs with "Rapid Rehousing"Project "ARPA-G" - ARPA Subcategory 6.1Obligation: $425,295.62
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expendituresPrior expenditures 425,295.62
Total 425,295.62Estimate 425,295.62Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Local Business Development IncentivesCIP #22-019 - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Community FoundationProject "ARPA-F" - ARPA Subcategory 6.1Obligation: $0
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expenditures -Prior expenditures -Total -Estimate -Remaining -
CITY OF SAN JACINTO
ARPA REPORTING SCHEDULEREPORTING PERIOD: 4/1/2026-6/30/2026Artesia Main Line Emergency ReplacementCIP #23-002 - ARPA Subcategory 6.1Obligation: $391,295.76
TRANS DATE VENDOR DESCRIPTION AMOUNT
Current expendituresPrior expenditures 391,295.76Total 391,295.76Estimate 391,295.76Remaining - August 4, 2026
TO: City Council
REQUESTED
BY:
Kimberly Ganimian, Finance Director
APPROVED
BY:
Travis Randel, Interim City Manager
SUBJECT:
Resolution Adopting a Schedule of Water Rate Adjustments Effective January 1, 2027 through and including January 1, 2031
RECOMMENDATION:
Staff recommends that the City Council:
1. ADOPT Resolution No. 4144 Adopting Findings and Determinations Regarding Exhaustion of Administrative Remedies and to Proceed with Public Hearing;
2. CONDUCT a Public Hearing; and
3. ADOPT Resolution No. 4145 Adopting a Schedule of Water Rate Adjustments Effective January 1, 2027 through and including January 1, 2031 and Making CEQA Findings.
BACKGROUND:
The City operates and maintains a water utility system that provides water service to residential, commercial, industrial, institutional, and other customers throughout the City’s water service area. The City owns and operates a water distribution system serving a portion of the City of San Jacinto within approximately four square miles in the southwesterly portion of Riverside County. The City’s service area is located near the base of the San Jacinto Mountains. The San Jacinto Basin covers approximately 60 square miles and serves as a natural groundwater storage reservoir and filtration system supplying water to the region. The basin is recharged through rainfall, surface runoff from surrounding mountains and hills, return flows, and groundwater replenishment activities utilizing imported water supplies.
The City’s water distribution system supports both domestic water demands and emergency fire flow protection and must be maintained to ensure adequate system reliability, operational flexibility, water quality, and water pressure throughout varying demand conditions. The City currently provides water service to approximately 4,666 customers within its service area and is projected to continue growing over the long-term planning horizon. Water rates are the primary source of revenue used to fund the operation, maintenance, repair, rehabilitation, replacement, and improvement of the City’s water utility infrastructure and facilities. Water rate revenues support routine system operations, emergency repairs, water quality monitoring and testing, regulatory compliance activities, administration, reserve funding, and capital improvement projects necessary to maintain reliable water service for current and future customers.
The City has caused to be prepared a comprehensive water rate study to evaluate the current and projected financial condition of the water utility, assess the costs necessary to provide reliable water service, and determine the funding needed to support operations, maintenance, capital improvements, and other utility obligations over the next five years. The study recommends a financial plan designed to ensure the utility can meet its projected financial obligations, maintain safe and efficient operations, and preserve adequate reserves for cash flow management, emergencies, and unforeseen system needs. Periodically updating water rates to reflect the actual cost of providing reliable, high-quality water service is essential to maintaining the long-term financial stability and sustainability of the utility. The water rates were designed so that revenues from proposed rates do not exceed the amount required to provide the service, nor will rate revenue be used for purposes other than those for which they are imposed.
DISCUSSION:
The City has evaluated the financial needs of the water utility based on the results of the water rate study and financial planning process. The purpose of the study is to evaluate the current and projected costs of providing water service and determine the level of revenue necessary to support ongoing operations, infrastructure maintenance, capital improvements, regulatory compliance, and financial stability over the planning period.
The revenue sufficiency analysis in this study uses the City’s adopted FY 2025/26 Budget as a primary data source to determine the gross revenue requirements for water services over the planning period. The budget was evaluated on a line‑item basis to identify operating and maintenance (O&M) expenses, non‑operating costs, and recurring versus one‑time expenditures. Only recurring costs were carried forward through the Projection Period, with appropriate escalation factors applied based on historical trends and discussion with City staff.
O&M costs include the day‑to‑day labor, materials, chemicals, electricity, supplies, and services needed to operate the utility systems at expected service levels. Non‑operating expenses include capital outlay and other transfers. Revenues from non‑rate sources, such as interest earnings and miscellaneous service charges, were incorporated into the analysis to reduce the amount that must be recovered through user rates, resulting in the net revenue requirement.
The City also provided its Capital Improvement Plan (CIP), identifying required capital projects throughout the planning period. These projects address system reliability, regulatory compliance, rehabilitation of aging infrastructure, and future capacity needs. Project costs and schedules were integrated into the revenue requirement analysis along with O&M and non‑operating expenditures.
The City has experienced increases in costs associated with operating and maintaining the water utility system. In addition, the water system infrastructure require ongoing rehabilitation, replacement, and reinvestment to maintain reliable service and reduce the risk of service interruptions or system failures.
The proposed rate adjustments are intended to provide sufficient revenues to support the continued operation and maintenance of the water utility system, fund necessary capital improvements, fund debt service obligations, maintain prudent reserve levels, and ensure the financial stability of the utility. The proposed rates are based on a cost-of-service methodology intended to allocate costs proportionally among customer classes based on the demand and usage characteristics associated with providing service.
The amount of the proposed rates imposed on any parcel or person as an incident of property ownership will not exceed the proportional cost of the service attributable to that parcel, and no charge will be imposed for service unless the service is actually used by, or immediately available to, the property owner or customer.
ENVIRONMENTAL IMPACT:
In accordance with the California Environmental Quality Act (CEQA) and the CEQA Guidelines, the City Council has determined that the increases in the Service Charges are exempt from CEQA pursuant to Section 15378 and Section 15273 of the CEQA Guidelines and Public Resources Code section 21080(b)(8) because: (i) the increased charges are for the purpose of meeting operational and maintenance expenses of the aforementioned services; and (ii) the charges constitute the creation of a funding mechanism/other governmental fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
FISCAL IMPACT:
The anticipated increases in water rates will provide required funding for the ongoing operations and maintenance of the utility systems, maintain appropriate reserve levels, support continued reinvestment in aging infrastructure, and provide funding for planned capital improvement projects. Without the proposed water rate increases the general fund will be required to provide funding for the water utilities.
Attachments
Final Rate Study Report
Prop 218 Water Rate Notice_Final
Resolution_No_4144_-_Adopting_Findings_re_AB_2257_and_Water_Services_Rates_2026.pdf Resolution_4145_-_Adopting_Increases_to_Water_Services_Rates_2026.pdf Water and Sewer
Rate Study
City of San Jacinto, CA
i Water & Sewer Rate Study
TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................................................... i Section 1 – Executive Summary.......................................................................................................1
1.1 Introduction............................................................................................................................................... 1
1.1.1 Water System Background...................................................................................................... 1
1.1.2 Sewer System Background...................................................................................................... 2
1.1.3 Rate Study Background............................................................................................................. 2
1.2 Overview of the Rate Study Process................................................................................................. 3
1.3 Summary of Proposed Rates............................................................................................................... 4 Section 2 –Revenue Sufficiency Analysis .....................................................................................8
2.1 Financial Planning Principles.............................................................................................................. 8
2.2 Existing Rates............................................................................................................................................ 8
2.3 Revenue Sufficiency Process............................................................................................................. 10
2.3.1 Budget ........................................................................................................................................... 10
2.3.2 Capital Improvement Plan...................................................................................................... 11
2.3.3 Debt Service................................................................................................................................. 12
2.3.4 Gross and Net Revenue Requirement................................................................................ 12
2.4 Customers & Billable Flows................................................................................................................ 13
2.4.1 Customer Billing Analysis........................................................................................................ 14
2.5 Financial Projections Under Existing Rates ................................................................................. 14 Section 3 –Cost-of-Service (COS) Analysis..................................................................................18
3.1 General ...................................................................................................................................................... 18
3.2 Water Cost-of-Service .......................................................................................................................... 18
3.2.1 Peaking Factors .......................................................................................................................... 18
3.2.2 Functional Unbundling of Revenue Requirements ...................................................... 20
3.2.3 Classification of Water System Costs .................................................................................. 21
3.2.4 Allocation to Customer Classes and Unit Cost Development.................................... 23
3.2.5 Rate Design by Unit Cost ........................................................................................................ 25
3.2.6 Cost-of-Service and Revenue Check................................................................................... 29
3.3 Sewer Cost-of-Service .......................................................................................................................... 31 ii Water & Sewer Rate Study
3.3.1 Functional Unbundling of Revenue Requirements ...................................................... 31
3.3.2 Classification of Revenue Requirements........................................................................... 32
3.3.3 Allocation to Customer Classes and Unit Cost Development.................................... 33
3.3.4 Cost-of-Service and Revenue Check................................................................................... 37 Section 4 –Proposed Test Year Rates ..........................................................................................39
4.1 General ...................................................................................................................................................... 39
4.2 Typical Monthly Bill Comparison...................................................................................................... 42
4.3 Rate Comparison with Other Utilities ............................................................................................ 43 Section 5 –Projected Operating Results .....................................................................................46
5.1 General ...................................................................................................................................................... 46
5.2 Projected User Rate Revenues ......................................................................................................... 46
5.3 Debt Service Coverage ........................................................................................................................ 50
5.4 Summary of Projected Operating Results.................................................................................... 51 Section 6 – Conclusions and Recommendations......................................................................53
6.1 Disclaimers............................................................................................................................................... 53
6.1.1 General Disclaimer .................................................................................................................... 53
6.1.2 Municipal Advisory Disclaimer .............................................................................................. 53
6.2 Conclusions.............................................................................................................................................. 54
6.3 Recommendations ............................................................................................................................... 55 1 | P a g e
Section 1 – Executive Summary
1.1 Introduction
Willdan Financial Services (Willdan) is pleased to present this Water and Sewer Rate Study Report (Report) to the City of San Jacinto (City). This Report summarizes the analyses, findings, conclusions, and recommendations developed as part of a comprehensive review of the City's water and sewer utility rates.
The study was undertaken to evaluate the financial condition of the utilities, assess the adequacy of existing revenues to meet projected operating, debt and capital needs, and develop equitable, cost-based rates that support the long-term financial sustainability of the water and sewer utilities.
The Report presents the revenue sufficiency, cost-of-service, rate design, and financial planning analyses used to develop the proposed rates and charges.
1.1.1 Water System Background
The City of San Jacinto owns, operates, and maintains a water system that provides water service to residential, commercial, industrial, institutional, and other customers within approximately four square miles of southwestern Riverside County. The City’s service area is located near the base of the San Jacinto Mountains and is generally bounded by the City of Beaumont to the north, the City of Hemet to the south, and the City of Moreno Valley to the west. Water supplies are obtained primarily from local groundwater resources within the San Jacinto Groundwater Basin, which covers approximately 60 square miles and serves as the City's principal source of supply.
The San Jacinto Groundwater Basin serves as a natural groundwater storage reservoir and filtration system for the region. The basin is recharged through rainfall, surface runoff from the surrounding mountains and foothills, return flows, and groundwater replenishment activities utilizing imported water supplies. These groundwater resources provide a reliable local source of water and play a critical role in meeting the existing and future water demands of the City's customers.
Because the City relies primarily on groundwater supplies, the long-term sustainability of the San Jacinto Groundwater Basin is essential to maintaining a reliable water supply. The City participates in the Hemet-San Jacinto Groundwater Management Area and supports groundwater basin management activities administered by the Hemet-San Jacinto Watermaster. As part of the groundwater management program, supplemental imported water is purchased and recharged into the basin to help mitigate historical overdraft conditions, protect groundwater resources, and ensure the long-term reliability of water supplies for customers throughout the region.
The City’s water system includes groundwater production facilities, storage reservoirs, transmission facilities, and a distribution network that delivers water to customers throughout the service area. The City operates four groundwater wells, maintains water storage facilities and distribution infrastructure, and may supplement local groundwater supplies with imported water from Eastern Municipal Water District (EMWD) during emergency conditions or other periods when additional supplies are needed. The City is responsible for operating, maintaining, repairing, and replacing these facilities to provide reliable water service, maintaining adequate fire protection, protecting public health, and complying with applicable state and federal drinking water quality regulations.
2 | P a g e
1.1.2 Sewer System Background
The City of San Jacinto provides sewer collection service to residential, commercial, industrial, institutional, and other customers throughout most of its municipal boundaries and currently serves approximately 4,300 customer connections. The City's sewer utility owns, operates, and maintains an extensive wastewater collection system consisting of approximately 117 miles of sewer mains, more than 2,500 manholes, three lift stations, and related facilities that collect and convey wastewater generated within the service area.
The City is responsible for the operations, maintenance, repair, rehabilitation, and replacement of its sewer collection infrastructure to ensure the reliable conveyance of wastewater, protect public health and the environment, and support continued service to existing and future customers. The City implements ongoing maintenance, rehabilitation, and capital improvement programs to preserve the integrity of its sewer collection infrastructure, maintain regulatory compliance, and support reliable service to its customers.
The City does not own or operate any wastewater treatment facilities. Wastewater collected within the City's service area is conveyed through interconnections with facilities owned and operated by Eastern Municipal Water District (EMWD). Pursuant to an agreement between the agencies, EMWD provides regional wastewater conveyance, treatment and disposal services, and wastewater generated within the City is ultimately treated at the San Jacinto Valley Regional Water Reclamation Facility.
1.1.3 Rate Study Background
The City is committed to maintaining reliable water and sewer utility services and ensuring that sufficient financial resources are available to support ongoing operations and maintenance, capital improvements, regulatory compliance, reserve funding, debt service obligations, and the continued maintenance, rehabilitation, and replacement of utility infrastructure. To support these objectives, the City periodically evaluates the financial condition of its utility systems and updates its rates to ensure sufficient revenues are available to meet current and future service needs.
As part of this effort, the City retained Willdan to conduct a comprehensive water and sewer rate study. The study evaluated the current financial condition of the utilities, developed a 5-year financial plan, analyzed projected revenues and expenditures, and assessed the adequacy of the existing rate structures. Based on the results of the analysis, recommendations were developed to ensure that the utilities remain financially sustainable while continuing to provide safe and reliable service to customers.
The primary objectives of the rate study include:
• Full recovery of costs associated with utility operations (i.e., operating and maintenance costs, capital projects, debt repayment and coverage requirements, and other expenditures);
• Development of cost-based rates that reasonably reflect the cost of providing service to customers;
• Consistency with generally accepted utility ratemaking principles and industry guidelines set forth by the American Water Works Association (AWWA) and the Water Environment Federation (WEF);
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• Equity among customer classes through the allocation of costs in proportion to the demands placed on the utility systems;
• Compliance with the substantive and procedural requirements of Proposition 218; • Maximizing administrative efficiency (i.e., easy to understand and implement); and • Development of a 5-year financial plan to support the long-term sustainability of the water and sewer utilities.
1.2 Overview of the Rate Study Process
This study includes the development and presentation of a proforma water and sewer financial plan for a 5-year planning period, as well as the development of cost-based rates through cost-ofservice and rate design analyses. Utility rates must be set at a level such that operating, maintenance, debt, and capital expenses are funded with the revenues received from customers.
In addition, the revenues generated from utility rates must only be used for this purpose and for each system separately. This is a significant point, as failure to achieve the revenues needed can lead to unacceptable service levels, inadequately maintained facilities, degradation of system components and potential failures. Therefore, a rate study typically consists of the following three interrelated analyses:
1. Financial Planning/Revenue Requirement Analysis: Creates a 5-year financial plan and identifies the required revenue amounts to support an orderly, efficient program of funding for on-going maintenance and operating costs, capital improvement and routine system component replacement activities, debt financing, and retirement of outstanding debt. In addition, the plan should fund and maintain appropriate cash reserve balances based on industry standards, as well as the City’s fiscal policies and specific needs.
2. Cost-of-Service Analysis: Identifies and apportions annual revenue requirements (i.e., expenditures) to operational and functional cost components based on the relative demand placed on the utility systems by various groups or classes of customers. The purpose of this analysis is to develop customer rates that generate revenues proportionate to their share of each utility’s costs. This objective is consistent with industry standards as well as the requirements of Proposition 218 (Prop 218).
3. Rate Design: Develops an equitable and proportionate schedule of rates for the City’s customer base consistent with the cost-of-service analysis. The policy objectives are coordinated with Prop 218 requirements and cost-of-service objectives to achieve a balance between customer equity and financial stability goals. The balance of fixed and variable charges considers the need for a stable revenue source (the fixed charge) and accounts for customers placing higher costs on the system (through higher water and sewer use) by incurring a higher bill reflective of their impact on the system (the variable component).
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This rate study utilizes generally accepted ratemaking principles and standards established by industry experts, such as the AWWA in its “M1 - Principles of Water Rates Fees and Charges” manual and WEF in its “Financing and Charges for Sewer Systems, Manual of Practice No. 27.” The principles established by these entities are used as guidelines in the development of the proposed water and sewer rates and are relied upon only insofar as they are consistent with Prop 218. The following Subsection 1.3 of this Report presents a discussion of some of the key principles of ratemaking.
1.3 Summary of Proposed Rates
The rate study methodology applied in the development of updated water and sewer rates, outlined in this Report, consisted of reviewing the historical operating results of the water and sewer utility systems, analyzing budgets and other financial data and policy objectives to identify the net revenue requirements to be recovered from user rate revenues, performing general costof-service allocations based on the rate components and functional cost categories, and revising the rates based on the applicable costs and expenditures to be recovered from user rates. In addition, an analysis of the City’s customers and usage characteristics was performed to identify the rate determinants since they drive the recommended rates, which are the primary source for generating revenues. The allocated revenue requirements were utilized in conjunction with the rate determinants and rate structure to develop the proposed water and sewer rates.
The findings and conclusions of the rate analysis, as well as the resulting rate recommendations, were utilized to develop a projection of future operating results for a 5-year planning period from Fiscal Year (FY) 2026 (beginning July 1, 2025) through FY 2030 (ending June 30, 2030), herein referred to as the “Projection Period.” The purpose for developing the 5-year projections is to demonstrate the financial capability of the water and sewer revenues to support system operations and maintenance, and fund planned capital improvements. The analyses, findings, and accompanying recommendations are presented in the subsequent sections of the Report.
The water and sewer rate analyses described in the Report are performed based on the general guidelines of the defined objectives, as well as common industry standards and best practices for Rate Design Analysis
Considers both the level and structure of the rate design to collect the appropiate and targeted level of revenues.
Cost-of-Service Analysis
Allocates the revenue requirements to the fixed/variable cost components based on cost-of-service.
Revenue Requirement Analysis
Compares the revenues to the expenses of the utility
to determine the overall rate adjustment required.
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setting utility rates. In addition to focusing on these major objectives in designing the structure of rates for various customer categories, the rate analyses performed herein are based on the costof-service and rate design methodologies described in this Report. The recommended revenue levels and rates are developed to recover the projected revenue requirements of the water and sewer utility systems in a manner that is proportionate to the cost of providing service.
The proposed water and sewer rates for the Test Year are provided in Tables 1 and 2. The rates are based on an assumed implementation date of January 1, 2026 (or such later date as may be determined by the City), with FY 2025/26 (FY 2026) designated as the Test Year for purposes of this analysis. The Test Year of the rate study represents the foundational, or baseline, year upon which the revenue requirements, cost-of-service analysis, and initial rate design are based. It is intended to reflect the most representative and stabilized projection of utility operations, incorporating current conditions as well as known and measurable changes expected to occur within the first year of the rate implementation period. Any projected changes or escalations in costs included in the projection period are determined relative to the Test Year. [The rest of this page is intentionally left blank]
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Table 1 – Proposed Monthly Water Rates
Monthly Fixed Charge:
All Customers
5/8 Inch $ 51.84
3/4 Inch $ 51.84
1.0 Inch $ 86.19
1.5 Inch $ 172.06
2.0 Inch $ 275.11
3.0 Inch $ 515.56
4.0 Inch $ 859.05
6.0 Inch $ 1,717.79
8.0 Inch $ 2,748.28
Fire Service
5/8 Inch $ 2.98
3/4 Inch $ 2.98
1.0 Inch $ 4.76
1.5 Inch $ 9.21
2.0 Inch $ 14.54
3.0 Inch $ 26.98
4.0 Inch $ 44.76
6.0 Inch $ 89.20
8.0 Inch $ 142.54
10.0 Inch $ 204.76
12.0 Inch $ 382.53
Construction Meter
Construction Meter $ 515.56
Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.70
Tier 2 (11+ Units) $ 4.49
All Non-Residential Customers
All Flow $ 4.26
Water Adjudication Fee
All Flow $ 1.10
Description
Proposed
Rates
FY 2026
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Table 2 – Proposed Monthly Sewer Rates
Proposed
Rates
FY 2026
$ 10.48
$ 0.95
$ 10.48
$ 40.31
[1]
[2]
[3]
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
Eastern Municipal Water District (EMWD) provides sewer
treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Sewer (per Sewage Unit)
See Footnote
Notes:
Sewer (per EDU)
Monthly Fixed Charge: [1]
All Customers (Per EDU)
Description
Volumetric Rates Per 100 Cubic Feet: [2]
EMWD Related Charges: [3]
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Section 2 – Revenue Sufficiency Analysis
2.1 Financial Planning Principles
While the individual rates for the utility systems vary based on a variety of factors, rates should be consistent with common ratemaking principles within the utility industry. The guiding principle is that rates designed for any utility should provide a reasonable balance between several key factors. In general, the utility rates should:
• Generate a stable revenue stream that, when combined with other sources of funds, is sufficient to meet the expenditure requirements and goals of the system; • Be based upon the proportionate cost of providing the service and not exceed the cost of providing the service in compliance with Proposition 218; • Be equitable; that is, they should generate revenue from each customer class in a manner which is reasonably in proportion to the cost of providing the service to that customer class; • Be easy to understand by customers; and
• Be easy to administer by the utility.
Striking the appropriate balance between the principles of ratemaking is essential. It requires a detailed process to evaluate revenue requirements and cost-of-service that must then be translated into rate design alternatives which meet legal requirements and the specific objectives of the utility under the circumstances in which it operates.
2.2 Existing Rates
The City has established user rates for water and sewer services that are applied to customers of the system. The rates charged for water and sewer services are approved by the City Council and are not subject to administrative review or approval by any other local or state agency. The City has historically adjusted rates, as necessary, to provide for recovery of financial obligations including operating expenses, debt service, capital expenditures, and any other expenses and transfers.
The existing water rates consist of 1) a monthly fixed charge that designates the minimum amount a customer will pay regardless of their water usage, and 2) volumetric charges based on the amount of water consumed. The monthly fixed charge varies based on the meter size for all customer classes. Residential customers are charged based on a two-tier volumetric rate structure in which the rate per 100 cubic feet (CCF) increases once usage exceeds 11 CCF. The tiered rate structure is based on a cost-of-service analysis that demonstrates the increased costs associated with providing water at increased quantities and structuring operations and facilities to serve peak demand. All other customer classes are charged a uniform volumetric rate such that the rate per CCF remains the same for each respective customer type regardless of the amount of water usage.
The existing rates for water service are provided in Table 3. 9 | P a g e
Table 3 – Existing Monthly Water Rates
The existing sewer collection rates consist of a monthly fixed charge per Equivalent Dwelling unit (EDU) for most sewer service customers, except as further described below. All residential and most non-residential customers are charged the monthly fixed charge. Certain non-residential customers are assessed only a volumetric wastewater charge based on metered water consumption. These customers include commercial/industrial, all restaurant, certain churches, and certain school accounts where wastewater flows are more directly related to water usage.
Since the City only provides sewer collection services, the City’s sewer rates only reflect the costs of providing sewer collection services. Wastewater treatment services are provided by Eastern Municipal Water District (EMWD). Accordingly, City customers also pay wastewater treatment Monthly Fixed Charge:
All Customers
5/8 Inch $ 24.89
3/4 Inch $ 24.89
1.0 Inch $ 34.82
1.5 Inch $ 59.68
2.0 Inch $ 89.51
3.0 Inch $ 183.96
4.0 Inch $ 323.13
6.0 Inch $ 656.17
8.0 Inch $ 1,202.94
Fire Service
5/8 Inch $ 24.89
3/4 Inch $ 24.89
1.0 Inch N/A
1.5 Inch N/A
2.0 Inch N/A
3.0 Inch N/A
4.0 Inch $ 41.18
6.0 Inch $ 119.60
8.0 Inch $ 254.80
10.0 Inch $ 458.23
12.0 Inch $ 740.17
Construction Meter
Construction Meter $ 183.96
Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.15
Tier 2 (11+ Units) $ 3.90
All Non-Residential Customers
All Flow $ 3.73
Water Adjudication Fee
All Flow $ 1.77
Description Existing
Rates
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charges established by EMWD in addition to the City's applicable wastewater collection rates. The City's sewer rates recover only the costs associated with collection services, while EMWD's rates recover the costs associated with wastewater conveyance, treatment, and disposal services. The existing rates for sewer service are provided in Table 4.
Table 4 – Existing Monthly Sewer Rates
2.3 Revenue Sufficiency Process
In evaluating whether the existing rates will generate sufficient revenue to meet the expenditure requirements of the water and sewer systems, the annual expenditures required for each utility (herein referred to as the “Revenue Requirements”) must be developed. The revenue sufficiency analysis compares the forecasted revenues for each utility system under existing rates to the projected revenue requirements.
2.3.1 Budget
The revenue sufficiency analysis performed as part of this study and summarized in this Report utilizes the City’s Adopted Budget for FY 2025/26 (the “Budget” for FY ending June 30, 2026) as one source of data and information to determine the gross revenue requirements to be recovered from user rates over the Projection Period. Existing
Rates
$ 8.22
$ 0.75
$ 8.22
$ 40.31
[1]
[2]
[3]
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
EMWD Related Charges: [3]
Sewer (per EDU)
Sewer (per Sewage Unit)
Notes:
Description
Monthly Fixed Charge: [1]
All Customers (Per EDU)
Volumetric Rates Per 100 Cubic Feet: [2]
See Footnote
Eastern Municipal Water District (EMWD) provides sewer
treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
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The budget, as prepared by the City, was provided to Willdan on a line-item basis, and is used for projecting the budgeted financial needs for the Test Year and the remainder of the Projection Period. In developing the rate analysis, certain adjustments are made such that the expenditures are categorized into either operating and maintenance (O&M) expenses or non-operating expenses. In addition, only recurring costs included in the current budget were included as part of the revenue sufficiency analysis for the entirety of the Projection Period. One-time costs were identified and evaluated in discussions with City Staff and removed from future projections if appropriate. Recurring annual costs were escalated using suitable cost indexes or escalation factors, again in discussion with City Staff and based on analysis of historical expense trends experienced by the City.
The O&M expenses are primarily those ongoing costs for labor, materials, chemicals, electricity, supplies, services, etc., required to manage and operate the utility systems on a day-to-day basis while maintaining a dependable level of service. The O&M requirements are generally a function of a budgetary process and are directly related to the level of service provided to customers of the utility systems. The non-operating expenses include such items as capital outlay and any other expenses and transfers.
The budget also identifies estimated revenues derived from sources other than water and sewer user rates. These other revenue sources may include interest earnings on investments and various other miscellaneous service charges. The revenues generated from the other sources are applied to the gross revenue requirements to reduce the amount of revenue required from user rates. The result is the net revenue requirement.
2.3.2 Capital Improvement Plan
The City provided a Capital Improvement Plan (CIP) identifying the capital projects to be undertaken during the Projection Period. These projects are necessary to maintain uninterrupted service to customers, rehabilitate and replace aging infrastructure, accommodate future system needs, and ensure continued compliance with applicable regulatory requirements. The CIP includes investments in system improvements, facility upgrades, and the replacement of infrastructure components as they reach the end of their useful lives.
The City also provided cost estimates and anticipated implementation schedules for the identified capital projects. The CIP also includes projects necessary to maintain compliance with State mandated standards for water quality. These projected capital expenditures, together with operating and maintenance expenses (O&M) and other non-operating expenditures, were incorporated into the development of the gross revenue requirements for the water and sewer systems. The capital projects included in the CIP (represented in $1,000s), along with the assumed funding sources by fiscal year for the Projection Period, are provided in Tables 5 and 6. 12 | P a g e
Table 5 – Water Anticipated Capital Spending ($1,000s)
Table 6 – Sewer Anticipated Capital Spending ($1,000s)
2.3.3 Debt Service
The City currently has two outstanding debt obligations associated with the water utility system, with final payments due in FY 2035/36 and FY 2044/45, respectively. The annual debt payments projected over the Projection Period are provided in Table 7. Based on discussions with City staff, no additional debt issuances are anticipated during the Projection Period. Accordingly, the analysis includes debt service payments associated with the City’s existing debt obligations but does not include any future debt service associated with new debt issuances or debt coverage requirements.
Table 7 – Annual Debt Service Payments
2.3.4 Gross and Net Revenue Requirement
The proposed water and sewer rates developed in the Report are designed for assumed implementation in FY 2025/26 (the Test Year as previously defined). The projected Test Year gross and net revenue requirements are estimated by utilizing the budget, capital project cost estimates and assumed funding sources for capital projects as provided by the City, along with anticipated transfers to reserves for funding capital projects. 2026 2027 2028 2029 2030 Water System
EMWD Emergency Inter-Tie Cash $ 550 $ - $ - $ - $ -
Reservoir Rehabilitation x 3 Cash 200 315 386 463 547
New Potable Water Production Well Cash 300 630 992 1,158 1,337 Storage and Booster Pump Site Cash 250 525 827 868 912
6th St Water Main Cash 400 840 1,103 1,736 -
5th St. Water Main Cash 300 630 992 1,389 1,580
Main St Water Main Cash - 1,313 1,378 1,447 1,519
Total Water System Improvements $ 2,000 $ 4,253 $ 5,678 $ 7,062 $ 5,895 Description Funding
Source
Projected For Fiscal Year Ending June 30 ($1,000s)
2026 2027 2028 2029 2030
Sewer System
Jessica Way Sewer Main Cash $ 50 $ 105 $ 165 $ 260 $ 304 Main Line Repairs Cash 150 184 221 260 -
Manhole Rehabilitation Cash 50 105 165 174 182
Vacuum Truck Cash 400 525 - - -
Camera Van Cash 150 158 193 - -
Generators for Lift Stations Cash 262 - - - -
Total Sewer System Improvements $ 1,062 $ 1,076 $ 744 $ 695 $ 486 Description Funding
Source
Projected For Fiscal Year Ending June 30 ($1,000s)
2026 2027 2028 2029 2030
Annual Debt Service
2015 Installment Sale Agreement $ 251,585 $ 264,660 $ 278,462 $ 293,031 $ 308,410 2025 Installment Purchase Agreement 678,128 677,715 678,429 677,561 678,109 Total Annual Debt Service $ 929,713 $942,375 $ 956,891 $970,592 $ 986,519 Description Projected For Fiscal Year Ending June 30
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Transfers from operating reserves to capital reserves are used to fund the $3 million CIP in FY 2025/26. This approach reflects a pay-as-you-go funding strategy, where accumulated operating reserves are reallocated to support capital investment, once the target balance in the operating reserve is met, reducing reliance on external debt and ensuring that adequate funding is available for infrastructure improvements. The Test Year revenue requirements that are used for developing the user rates proposed herein are detailed in Appendix A at the end of this Report and summarized in Table 8.
Table 8 – Test Year Revenue Requirements – FY 2026
The revenue requirements developed for the Test Year serve as the foundation and baseline for the analysis and results shown for the Projection Period, with future year requirements projected based on anticipated changes in operating costs, capital funding needs, debt service obligations, and reserve targets. The revenue requirements for years beyond the Test Year are met through annual rate adjustments, as needed, throughout the Projection Period. The projected revenue requirements for the water and sewer utilities over the entire Projection Period are provided in Tables 9 and 10.
Table 9 – Water Revenue Requirements for the Projection Period Table 10 – Sewer Revenue Requirements for the Projection Period
2.4 Customers & Billable Flows
The rate study is described herein is heavily reliant upon a detailed analysis of system customers and their usage and demand characteristics. An analysis of the City’s historical customer and Description Water Sewer Total Total O&M $ 7,546,416 $ 1,711,302 $ 9,257,718
Debt Service 929,713 - 929,713
Other Expenditures & Transfers 1,208,055 626,968 1,835,023 Gross Revenue Requirement $ 9,684,184 $ 2,338,270 $12,022,454 Less Other Revenues (230,000) (1,580,967) (1,810,967)
Net Revenue Requirement $ 9,454,184 $ 757,303 $ 10,211,487 2026 2027 2028 2029 2030
Total O&M $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 Existing Debt Service 929,713 942,375 956,891 970,592 986,519 Other Expenditures & Transfers 1,208,055 3,446,369 6,173,218 7,137,360 7,286,693 Gross Revenue Requirement $ 9,684,184 $ 11,814,621 $14,970,837 $ 16,393,493 $17,036,088 Less Other Revenues (230,000) (230,000) (230,000) (230,000) (230,000) Net Revenue Requirement $ 9,454,184 $ 11,584,621 $14,740,837 $ 16,163,493 $16,806,088 Description Projected for Fiscal Year Ending June 30
2026 2027 2028 2029 2030
Total O&M $ 1,711,302 $ 1,779,913 $ 1,851,557 $ 1,926,384 $ 2,004,555 Other Expenditures & Transfers 626,968 429,428 671,184 798,025 764,030 Gross Revenue Requirement $ 2,338,270 $ 2,209,341 $ 2,522,741 $ 2,724,409 $ 2,768,585 Less Other Revenues (1,580,967) (1,319,560) (1,321,671) (1,323,935) (1,326,199) Net Revenue Requirement $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 Description Projected for Fiscal Year Ending June 30
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billing data for the existing utility customer base and metered/billable flows provide the determinants utilized in the cost-of-service analysis, and ultimately in calculating the monthly user rates and charges, which become the foundation for projecting future revenues generated by the water and sewer systems.
It is important to note that the customer and flow analysis focuses primarily on the customer classifications that will be subject to and impacted by the user rates and charges to be developed in the Report. This consists of the general service (retail) customers who currently pay for utility services pursuant to the existing user rates and charges as previously detailed. For the purposes of the rate study, it is these customers that will generate revenues based upon the proposed user rates and charges.
2.4.1 Customer Billing Analysis
For the rate study, detailed billing information was provided by City staff for each customer. This data offered a breakdown of water and sewer customers by class, usage characteristics, and billed charges. An analysis of the billing data was conducted to obtain an understanding of the existing customers, customer classes, and demand and usage characteristics for each customer class. In accordance with the data, and based on discussions with City staff, the utility systems provide service to various retail customer classes consisting of residential and non-residential, which includes commercial, institutional and industrial customers.
Each of these customer classes embodies certain common characteristics in their utility use and service demand profiles that provide the basis for establishing an equitable allocation of system costs. The billing data was utilized to identify the number of customer accounts and units within each class, the applicable equivalent dwelling units (EDUs), and the metered/billable usage profiles.
2.5 Financial Projections Under Existing Rates
The projected customers and accompanying billable flows were applied to the existing rates to develop a projection of user revenues that would be generated under existing rates. The revenues are then compared to the projected revenue requirements and expenditures to determine if revenue adjustments would be needed to meet the calculated revenue requirements shown in Tables 9 and 10.
Based on this comparison, it is projected that under the existing rates, the water and sewer systems would meet their collective projected operating and maintenance (O&M) costs, debt service payments and coverage requirements (water enterprise only), and costs of capital projects in Year 1 of the Projection period. However, the City would not be able to meet its financial obligations in the remaining years of the Projection Period. Therefore, revenue adjustments are recommended to generate additional cash to fund projected costs of operations, debt service, capital projects, and to maintain adequate cash reserves.
Although the City has not formally adopted reserve policies for its water and sewer utilities, the financial plan developed as part of this study includes reserve funding targets intended to support the financial stability of the utilities. For planning purposes, the analysis assumes operating reserves equivalent to at least 120 days of operating expenditures to provide sufficient working capital, address temporary revenue fluctuations, maintain cash flow stability, and fund unanticipated operational needs. The financial plan also includes capital reserve funding to support the repair, rehabilitation, and replacement of utility infrastructure and to help fund future 15 | P a g e
capital improvement needs. The cash-flow statements outlining the projected operating results under existing rates are summarized in Tables 11 and 12 for the water and sewer systems, respectively. The proposed rates and projected financial results are addressed in the subsequent sections of this Report.
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Table 11 – Water System Projected Operating Results Under Existing Rates ($1,000s) 2027 2028 2029 2030
Revenues:
Water Sales $ 7,563 $ 7,567 $ 7,567 $ 7,567 $ 7,567
Other Revenues 230 230 230 230 230
Total Revenues $ 7,793 $ 7,797 $ 7,797 $ 7,797 $ 7,797
Less O&M Expenses (7,546) (7,426) (7,841) (8,286) (8,763) Income Available for Debt Service $ 247 $ 371 $ (44) $ (489) $ (966) Debt Service:
Existing $ 930 $ 942 $ 957 $ 971 $ 987
Total Indebtedness $ 930 $ 942 $ 957 $ 971 $ 987
Net Results $ (683) $ (572) $ (1,001) $ (1,459) $ (1,953) Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 3,448 $ 590 $ (2,962) $ (9,641) $ (18,162) Deposit/(Withdrawal) from Operations (683) (572) (1,001) (1,459) (1,953) Transfer from/(to) Capital Reserve Fund (234) (2,931) (5,628) (7,012) (5,845) Transfer to Capital Fund (50) (50) (50) (50) (50)
Total Operating Fund Balance $ 2,481 $ (2,962) $ (9,641) $ (18,162) $ (26,010) Operating Days Cash on Hand 120 (146) (449) (800) (1,083) Capital Fund
Beginning Balance $ 1,097 $ 1,272 $ - $ - $ -
Transfer from/(to) Operating Fund 234 2,931 5,628 7,012 5,845 Water Capital Improvement Revenue 50 50 50 50 50
Cash Funded Capital Projects (2,000) (4,253) (5,678) (7,062) (5,895) Total Capital Fund Balance $ (619) $ - $ - $ - $ -
Water Enterprise Reserves
Beginning Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Revenues Toward Debt Service Payment $ 930 $ 942 $ 957 $ 971 $ 987 Annual Debt Service Payment (930) (942) (957) (971) (987) Ending Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Total Fund Balance - Water $ 3,012 $ (1,812) $ (8,491) $ (17,012) $ (24,860) Debt Coverage 0.27 0.39 0.00 0.00 0.00
Description Existing
Rates
Projected for Fiscal Year Ending June 30
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Table 12 – Sewer System Projected Operating Results Under Existing Rates ($1,000s) 2027 2028 2029 2030
Revenues:
Wastewater Sales $ 594 $ 594 $ 594 $ 594 $ 594
Other Revenues 1,053 1,055 1,057 1,059 1,060
Total Revenues $ 1,647 $ 1,649 $ 1,651 $ 1,653 $ 1,654
Less O&M Expenses (1,711) (1,780) (1,852) (1,926) (2,005) Income Available for Debt Service $ (64) $ (131) $ (201) $ (274) $ (350) Net Results $ (64) $ (131) $ (201) $ (274) $ (350)
Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 1,933 $ 563 $ (244) $ (1,189) $ (2,158) Deposit/(Withdrawal) from Operations (64) (131) (201) (274) (350) Transfer from/(to) Capital Reserve Fund (1,276) (646) (714) (665) (456) Transfer to Capital Fund (30) (30) (30) (30) (30)
Total Operating Fund Balance $ 563 $ (244) $ (1,189) $ (2,158) $ (2,994) Days Cash on Hand 120 (50) (234) (409) (545)
Capital Fund
Beginning Balance $ 156 $ 400 $ - $ - $ -
Transfer from/(to) Operating Fund 1,276 646 714 665 456 Sewer Connection Fee Revenue 30 30 30 30 30
Cash Funded Capital Projects (1,062) (1,076) (744) (695) (486) Total Capital Fund Balance $ 400 $ - $ - $ - $ -
Total Fund Balance - Sewer $ 963 $ (244) $ (1,189) $ (2,158) $ (2,994) Debt Coverage N/A N/A N/A N/A N/A
Description Existing
Rates
Projected for Fiscal Year Ending June 30
18 | P a g e
Section 3 – Cost-of-Service (COS) Analysis
3.1 General
The costs incurred by a utility system are generally driven by specific service requirements imposed on the system by its customers. For water systems, the primary service requirements that drive costs include annual flow volumes, peak flow volumes (i.e., peak day and peak hour), the number of customers, and the types of customers served. For sewer systems, the primary service requirements that drive costs typically include annual sewer volumes, sewer treatment strength, such as Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS), and the number and types of customers served. Treatment related costs are not considered in this analysis since wastewater from City customers is conveyed to EMWD for treatment.
There are several different options that can be used to perform a cost-of-service (COS) analysis, and the allocation methodology depends upon the operating profile of the utility, data availability, and the basis applied. The water COS analysis performed for this rate study utilizes a common industry approach known as the base-extra capacity method. The sewer COS analysis involves an examination of the types of customers served in accordance with the California State Water Resources Control Board (SWRCB) Revenue Program Guidelines for Wastewater Agencies and data provided by City staff.
3.2 Water Cost-of-Service
The COS analysis utilizes the revenue requirements for the Test Year as a cost basis. The Test Year revenue requirements are functionally unbundled, classified and allocated to customer classes to determine the cost of service by class. As stated in Section 3.1, the water COS analysis involves an examination of annual flow volumes, peak flow volumes (i.e., peak day and peak hour), and the number and type of customers served. More detail related to the water COS approach can be found in Appendix B.
3.2.1 Peaking Factors
System-wide peaking factors were developed based on City-specific operating and customer data as described below, to allocate costs between Base Delivery and Max Day demand components.
These components reflect capital, operational and infrastructure needs necessary to meet increased levels of demand under peak conditions. Base Delivery represents the average daily water demand placed on the system and reflects the capacity required to meet normal day-today customer demands. Max Day demand represents the additional capacity required to meet peak water demand experienced during periods of maximum system use.
Based on information provided by City staff, the average daily water demand during the most recent full year was approximately 2.9 million gallons per day (MGD), while the maximum day demand was approximately 4.4 MGD. As a result, the system-wide Max Day peaking factor is 1.52, indicating that maximum day demands are approximately 52 percent greater than average daily demands. The system-wide peaking factors are summarized in Table 13.
The comparison of average daily and maximum day demands indicates that approximately 66 percent of system capacity is attributable to Base Delivery demands and 34 percent is attributable to Max Day demands. These allocation factors are used to distribute Base Delivery and Max Day costs within the cost-of-service analysis.
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Table 13 – Peaking Factors System-Wide
Max Day peaking factors for each customer class were then developed using customer billing data. Since daily usage data by customer class was not available, the ratio of maximum monthly usage to average monthly usage was used as a proxy for estimating class-specific Max Day peaking factors. The resulting peaking factors by customer class are presented in Table 14.
Table 14 – Peaking Factors by Customer Class
Once peaking factors were established, the Max Day demand for each customer class was calculated. Total annual water usage for each customer class was converted to an average daily demand by dividing annual consumption by 365 days. The average daily demand was then multiplied by the applicable customer class peaking factor to determine the total Max Day demand for each customer class. The additional capacity required to meet Max Day demands was calculated as the difference between the maximum day demand and average daily demand. The resulting allocation of average daily demand, Max Day demand, and additional capacity requirements by customer class is presented in Table 15.
Table 15 – Usage and Extra Capacity
Consistent with the City's existing rate structure, in addition to their base charges, residential customers continue to be assessed a two-tier volumetric rate, while non-residential customers Description Demand
(MGD)
Factor Base Max Day Total
Avg Day 2.90 1.00 100.00% 0.00% 100.00%
Max Day 4.40 1.52 65.91% 34.09% 100.00%
Description Max Day
Peaking Factor
Residential
Tier 1 (0-11 Units) 1.86
Tier 2 (11+ Units) 2.39
Non-Residential
All Flow 2.24
Total Annual
Flow (CCF)
Average Daily
Flow (CCF)
Peaking
Factor
Total
Capacity
Extra
Capacity
Residential
Tier 1 (0-11 Units) 378,803 1,038 1.86 1,935 897
Tier 2 (11+ Units) 166,119 455 2.39 1,090 635
Non-Residential
All Flow 550,963 1,509 2.24 3,386 1,877
Total 1,095,885 3,002 6,411 3,409
Description
Flow Max Day
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continue to be assessed a uniform volumetric rate. The differing rate structures reflect the distinct usage characteristics of the respective customer classes while recovering each class's allocated proportional cost of service. Residential customers are billed for their service under a two-tier volumetric rate structure due to the inherent discretionary characteristics of their water use, including outdoor irrigation, which can vary significantly among customers during periods of peak demand, based upon their individualized needs. The tier thresholds were established based on analysis of historical residential usage patterns and the calculation of specific peak demand factors in this study, to ensure proportionate recovery of the utility's revenue requirements during periods of peak demand. In contrast, non-residential customers are charged a uniform volumetric rate because water use for commercial, industrial, institutional, and similar customers is generally driven by, and widely varies, based on the operational needs of the business. Unlike residential customers, businesses and other non-residential customers’ ability to conserve water through discretionary usage is minimal.
3.2.2 Functional Unbundling of Revenue Requirements
The water system costs are unbundled into major cost components associated with providing water service. For the purposes of this analysis, costs were categorized into the following functional components: Supply/Treatment, Transmission, Distribution, Customer, and Administration. These functions represent the primary services provided by the water utility system.
A brief description of each functional component is provided below:
• Supply/Treatment – Costs associated with water supply, groundwater production, treatment, and other activities necessary to produce potable water. • Transmission – Costs associated with major pumping facilities, transmission mains, and other infrastructure used to convey water throughout the system. • Distribution – Costs associated with distribution mains and related facilities that deliver water to individual customer service connections.
• Customer – Costs associated with customer service functions, including meter reading, billing, account administration, collections, and other customer-related services. • Administration – General and administrative costs, including management, finance, insurance, and other utility support functions that are not directly attributable to a specific operational component.
The allocation of the functionally unbundled revenue requirements for the Test Year is summarized in Table 16.
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Table 16 – Functionally Unbundled Cost Allocations
3.2.3 Classification of Water System Costs
As previously addressed, the functionally unbundled water system revenue requirements are then classified using the base-extra capacity cost allocation method. Under this approach, costs are classified into the following categories:
• Base Costs – Capital and operating costs associated with providing service under average demand conditions. These costs include the routine operation and maintenance of the City's water system, including groundwater production, treatment facilities, storage reservoirs, pumping, and the distribution system required to meet normal day-to-day water demands. Base costs generally vary with the total volume of water used. • Maximum Day (Extra Capacity) Costs – Capital and certain operating costs associated with providing sufficient system capacity to meet peak demand conditions.
These costs reflect the additional infrastructure required to deliver water during periods of maximum demand, including larger transmission and distribution mains, storage reservoirs, pumping facilities, and other system components sized to accommodate peak water demands beyond average usage levels, as well as increased treatment and pumping costs during peak demand periods.
Test Year
2026
$ 7,546,416
929,713
-
1,208,055
$ 9,684,184
(230,000)
$ 9,454,184
$ 1,275,630
502,100
20,250
4,203,436
345,000
1,200,000
929,713
2,000,000
(230,000)
Fund Balance [1] (791,945)
$ 9,454,184
[1]
Water Adjudication
Total
Notes:
Functional Unbundled Revenue Requirement
Gross Revenue Requirement
Less Other Revenues
Net Revenue Requirement
Source of Supply
Description
Total O&M
Existing Debt Service
Future Debt Service
Other Expenditures & Transfers
Transmission & Distribution
Pumping
Customer Service
Administration
Represents a transfer from reserves to provide funding for capital outlay and CIP costs.
Existing Bond DS
CIP
Non-Rate Revenue
22 | P a g e
• Meter and Services Costs – Costs associated with customer meters, service connections, meter maintenance, testing, replacement, and other meter- and servicerelated activities necessary to provide water service. • Billing and Collection Costs – Costs associated with customer service functions, including billing, collections, accounting, and recordkeeping, and other activities that are generally independent of the amount of water consumption and meter size, and are not subject to peak demand factors.
• Fire Protection Costs – Costs associated with providing fire flow capacity and maintaining facilities necessary to support fire protection requirements throughout the service area.
• Water Adjudication Costs – Costs associated with the City's participation in the Hemet-San Jacinto Groundwater Management Area, including Watermaster assessments, groundwater basin management activities, and the purchase of supplemental water supplies required to support groundwater replenishment and long-term basin sustainability. These costs are incurred to help maintain a reliable groundwater supply and are allocated based on total water usage.
Under the base-extra capacity methodology, costs are separated between those attributable to average demand requirements (base capacity) and those attributable to peak demand requirements (extra capacity). Components, such as Treatment, Transmission, and Distribution are allocated based on flows and applicable peaking factors. Meters and Services costs are allocated based on meter size, Billing and Collection costs are allocated on a per-account basis, Fire Protection costs are allocated to customer classes based on their share of fire protection demand, and Water Adjudication costs are allocated based on total water usage, reflecting the relationship between groundwater management activities and the quantity of water supplied to customers.
The cost allocation factors developed for the Test Year are based on the most recent customer and system data available at the time of the analysis (i.e., the most recent fiscal year). While the City’s customer base is not expected to change materially during the Projection Period, future changes in customer usage patterns, weather conditions, economic activity, or other factors may affect the allocation of costs among customer classes. The system-wide cost classifications by service characteristics are summarized in Table 17.
Table 17 - Classification of Unbundled Revenue Requirements Component Base
Extra
Capacity
Max Day
Meters &
Services
Billing &
Collection
Fire
Protection
Water
Adjudication Total
Transmission & Distribution $ 570,884 $ 704,746 $ - $ - $ - $ - $ 1,275,630 Pumping 224,705 277,395 - - - - 502,100
Customer Service - - - 19,955 295 - 20,250
Administration - - 4,142,177 - 61,259 - 4,203,436
Source of Supply 345,000 - - - - - 345,000
Water Adjudication - - - - - 1,200,000 1,200,000
Existing Bond DS 929,713 - - - - - 929,713
New Bond DS - - - - - - -
CIP 895,062 1,104,938 - - - - 2,000,000
Non-Rate Revenue & Fund Balance (326,692) (229,932) (456,341) (2,198) (6,781) - (1,021,945) Total $ 2,638,672 $ 1,857,147 $ 3,685,836 $ 17,756 $ 54,773 $ 1,200,000 $ 9,454,184 23 | P a g e
3.2.4 Allocation to Customer Classes and Unit Cost
Development
The functionalized and classified revenue requirements are allocated to customer classes using allocation factors designed to reflect the manner in which costs are incurred and the demands placed on the water system by each customer class. The allocation basis for each cost component is summarized below:
• Base Costs – Allocated based on each customer class’s proportionate share of the base annual water usage.
• Extra Capacity (Max Day) System Costs – Allocated based on each customer class’s proportionate share of maximum day demand requirements. • Meters and Services Costs – Allocated based on the relative percentage of Equivalent Dwelling Units (EDUs) represented by each customer class. EDUs reflect the relative service capacity associated with different meter sizes and serve as a measure of the potential demand that customers may place on the water system.
• Billing and Collection Costs – Allocated based on each customer class’s proportionate share of customer bills.
• Fire Protection Costs – Allocated based on each customer class’s proportionate share of fire protection demand requirements.
• Water Adjudication Costs – Allocated based on each customer class’s proportionate share of total water usage.
The units of service used to allocate costs among customer classes are summarized in Table 18.
Depending on the cost component being allocated, the units of service include annual water usage measured in one hundred cubic feet (CCF), maximum day demand expressed in CCF per day, the number of accounts and EDUs, customer bills, and fire protection demand units.
Annual water usage is used to allocate Base and Water Adjudication costs, reflecting the relationship between these costs and the quantity of water supplied to customers. Extra Capacity (Max Day) costs are allocated based on maximum day demand requirements expressed in CCF per day. Meters and Services costs are allocated using EDUs, which reflect the relative service capacity associated with different meter sizes. Billing and Collection costs are allocated based on the number of customer bills, while Fire Protection costs are allocated based on fire protection demand units. The resulting units of service are presented in Table 18. 24 | P a g e
Table 18 – Units of Service
The allocated revenue requirement for each cost component is then divided by the corresponding unit of service to calculate a unit cost. These costs represent the cost of providing each component of water service on a per unit basis and are subsequently used to allocate costs among customer classes and develop cost-based rates. The unit costs for each cost component are summarized in Table 19.
Table 19 – Cost Per Unit
The cost-of-service allocation for each customer class is determined by applying the unit costs developed in Table 19 to the applicable units of service identified in Table 18. This process allocates the revenue requirement for each cost component to customer classes based on the relative demands they place on the water system and the way in which costs are incurred.
For the account-based and EDU-based cost components, the monthly units of service are converted to annual units by multiplying them by twelve (12) to reflect a full year of service before applying the applicable unit costs. Usage-based and demand-based cost components are allocated using the corresponding annual water usage and maximum day demand units. The resulting allocation of the revenue requirement by customer class and cost component is summarized in Table 20.
Description EDUs
Accounts/
Units
Base
(CCF)
Max Day
(CCF/Day)
Residential 4,037 3,922 544,922 1,532
Tier 1 (0-11 Units) 378,803 897
Tier 2 (11+ Units) 166,119 635
Non-Residential 1,924 676 550,963 1,877
All Flow 550,963 1,877
Fire Service 1,712 68 0 0
All Flow 0 0
Total 7,673 4,666 1,095,885 3,409
Description Base
Extra
Capacity
Max Day
Meters &
Services
Billing &
Collection
Fire
Protection
Water
Adjudication Total
Total Revenue Requirement $ 2,638,672 $ 1,857,147 $ 3,685,836 $ 17,756 $ 54,773 $ 1,200,000 $ 9,454,184 Units of Service 1,095,885 3,409 71,536 55,992 20,540 1,095,885 CCF CCF/Day EDUs/Monthly Bills/Monthly EDUs/Year CCF
Cost Per Unit $ 2.41 $ 544.84 $ 51.52 $ 0.32 $ 2.67 $ 1.10 25 | P a g e
Table 20 – Cost of Service by Customer Class and Cost Component
3.2.5 Rate Design by Unit Cost
The unit costs developed in the previous section are used to develop the proposed water rates for the Test Year. The proposed rate structure consists of both fixed and volumetric rate components designed to recover the costs of providing water service in proportion to the way those costs are incurred. The fixed rate component is based on accounts, EDUs, and the allocated customerrelated costs which are recovered through monthly fixed charges that vary based on meter size.
The volumetric rate component is assessed based on annual customer water consumption and extra capacity requirements (Max Day).
The City currently assesses a Water Adjudication Fee to recover costs associated with groundwater basin management and replenishment activities required under the Hemet-San Jacinto Groundwater Management Program. Because these costs are directly related to maintaining the long-term availability and sustainability of the groundwater resources used to supply customers, the associated revenue requirement is recovered through a volumetric surcharge based on water consumption. This approach allocates the costs in proportion to customer water usage.
The first component of the fixed meter charge is calculated on an EDU basis. It is common practice in the water utility industry to establish a rate structure that includes an incremental service availability charge that reflects the potential demand a customer may place on the water system.
Customers with larger meters will have the ability to place greater demands on the system and therefore pay proportionately higher fixed charges.
The methodology for increasing fixed charges by meter size is based on standardized meter capacity criteria established by the American Water Works Association (AWWA). Under this approach, a standard 3/4-inch water meter (i.e., the typical standard meter size for a single-family residential customer in the City of San Jacinto) is assigned a factor of 1.0 EDU, and larger meter sizes are assigned EDU factors based on their relative hydraulic capacity. These factors provide a consistent and equitable method for allocating fixed costs among customers based on the potential demand associated with their meter size. The applicable EDU factors used in this analysis are summarized in Table 21.
Description EDUs
Accounts/
Units Base (CCF)
Max Day
(CCF/Day)
Water
Adjudication Total
Residential $ 2,496,245 $ 14,925 $ 1,312,063 $ 834,705 $ 596,693 $ 5,254,631 Tier 1 (0-11 Units) $ 912,082 $ 488,978 $ 414,791
Tier 2 (11+ Units) $ 399,981 $ 345,728 $ 181,901
Non-Residential $ 1,189,591 $ 2,573 $ 1,326,609 $ 1,022,442 $ 603,307 $ 4,144,521 All Flow $ 1,326,609 $ 1,022,442 $ 603,307
Fire Service $ 54,773 $ 259 $ - $ - $ - $ 55,031
All Flow $ - $ - $ -
Total $ 3,740,609 $ 17,756 $ 2,638,672 $ 1,857,147 $ 1,200,000 $ 9,454,184 26 | P a g e
Table 21 - AWWA Meter Equivalency Factors
Table 22 provides an illustration of how the AWWA meter-size equivalency factors are applied to the total customer accounts by meter-size to determine the total EDUs that the water system serves.
Table 22 – Total Monthly Accounts & EDUs
The second component of the fixed charge is the customer charge. Unlike meter-related costs, customer costs do not vary based on meter size and are incurred equally for each customer AWWA Factors [1]
Meter Size
5/8 Inch 1.00
3/4 Inch 1.00
1.0 Inch 1.67
1.5 Inch 3.33
2.0 Inch 5.33
3.0 Inch 10.00
4.0 Inch 16.67
6.0 Inch 33.33
8.0 Inch 53.33
10.0 Inch 76.67
Notes:
[1] Meter-size equivalency factors established by
the AWWA and identified in AWWA Standards
C700, M1 and M22.
Description [A] [B] [C]=[A]*[B]
AWWA
Factors
Total
Accounts by
Meter Size
Total EDUS
Meter Size
5/8 Inch 1.00 133 133
3/4 Inch 1.00 3,998 3,998
1.0 Inch 1.67 284 473
1.5 Inch 3.33 44 147
2.0 Inch 5.33 126 672
3.0 Inch 10.00 7 70
4.0 Inch 16.67 39 650
6.0 Inch 33.33 18 600
8.0 Inch 53.33 16 853
10.0 Inch 76.67 1 77
All Customer total 4,666 7,673
Description
27 | P a g e
account. Accordingly, the customer unit cost is applied uniformly to all customer accounts regardless of meter size. Therefore, the customer unit cost of $0.32 is applied equally to each customer account. The two fixed charge components are added together to develop the total proposed fixed charge for each respective meter size. The proposed fixed charges for the Test Year are shown in Table 23.
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Table 23 – Monthly Fixed Charge Calculation
In addition to the fixed charges, volumetric rates were developed to recover costs through charges based on water consumption. Consistent with the City's existing rate structure, residential customers, including both single-family and multi-family residential accounts, are assessed a twotier volumetric rate designed to promote efficient water use while recovering the cost of providing service. Non-residential customers are assessed a uniform volumetric rate under which the rate per unit of water remains constant regardless of the volume consumed.
The volumetric rate consists of two primary cost components: 1) a component for base usage that recovers costs associated with average water usage and 2) a component for peak usage that recovers costs associated with meeting peak demand requirements. The Max Day demand costs from Table 20 are divided by the total annual water usage to calculate the peaking unit costs shown in Table 24.
Capacity
Ratio
Meter
Charge
Customer
Charge
Proposed
Fixed
Charge
1.00 $ 51.52 $ 0.32 $ 51.84
1.00 $ 51.52 $ 0.32 $ 51.84
1.67 $ 85.87 $ 0.32 $ 86.19
3.33 $ 171.75 $ 0.32 $ 172.06
5.33 $ 274.80 $ 0.32 $ 275.11
10.00 $ 515.24 $ 0.32 $ 515.56
16.67 $ 858.74 $ 0.32 $ 859.05
33.33 $ 1,717.47 $ 0.32 $ 1,717.79
53.33 $ 2,747.96 $ 0.32 $ 2,748.28
1.00 $ 2.67 $ 0.32 $ 2.98
1.00 $ 2.67 $ 0.32 $ 2.98
1.67 $ 4.44 $ 0.32 $ 4.76
3.33 $ 8.89 $ 0.32 $ 9.21
5.33 $ 14.22 $ 0.32 $ 14.54
10.00 $ 26.67 $ 0.32 $ 26.98
16.67 $ 44.44 $ 0.32 $ 44.76
33.33 $ 88.89 $ 0.32 $ 89.20
53.33 $ 142.22 $ 0.32 $ 142.54
76.67 $ 204.44 $ 0.32 $ 204.76
143.33 $ 382.22 $ 0.32 $ 382.53
Fire Service
5/8 Inch
3/4 Inch
1.0 Inch
1.5 Inch
2.0 Inch
3.0 Inch
4.0 Inch
6.0 Inch
8.0 Inch
10.0 Inch
12.0 Inch
5/8 Inch
Meter Size
Monthly Fixed Charge:
All Customers
8.0 Inch
3/4 Inch
1.0 Inch
1.5 Inch
2.0 Inch
3.0 Inch
4.0 Inch
6.0 Inch
29 | P a g e
Table 24 – Peaking Unit Cost Calculation
The total system peaking unit cost is then added to the base unit cost to develop the proposed volumetric rate per 100 cubic feet (CCF). Water Adjudication costs are recovered through a separate volumetric surcharge based on water consumption to fund groundwater basin management and replenishment activities. The resulting volumetric charges, including the Water Adjudication Fee, are summarized in Table 25.
Table 25 – Volumetric Rate Calculation
3.2.6 Cost-of-Service and Revenue Check
Following the development of the proposed rates, a cost-of-service revenue check was performed to verify that the rates recover the allocated revenue requirement from each customer class in a manner that is proportional to the cost of providing service. The proposed rates were applied to the customer service units identified in Table 18 to estimate the revenues generated from each customer class.
The resulting revenues were then compared to the allocated cost of service for each customer class to confirm that the proposed rate structure equitably recovers utility costs and is consistent with the cost allocation methodology developed in this analysis. The allocated costs and projected revenues by customer class are summarized in Table 26.
[A] [B] [C]=[A]/[B]
Peaking
Costs
Annual Use
(CCF)
Peaking
Unit Cost
Residential
Tier 1 (0-11 Units) $ 488,978 378,803 $ 1.29
Tier 2 (11+ Units) $ 345,728 166,119 $ 2.08
Non-Residential
All Flow $ 1,022,442 550,963 $ 1.86
Total $ 1,857,147 1,095,885
Customer Class
[A] [B] [C]=[A]+[B]
Base Rate Peaking
Rate
Proposed Rate
($/CCF)
Residential
Tier 1 (0-11 Units) $ 2.41 $ 1.29 $ 3.70
Tier 2 (11+ Units) $ 2.41 $ 2.08 $ 4.49
Non-Residential
All Flow $ 2.41 $ 1.86 $ 4.26
Water Adjudication Fee
All Flow $ 1.10 $ - $ 1.10
Customer Class
30 | P a g e
Table 26 – Proposed Rate Revenues vs. COS
[A] [B] [C]=[A]*[B] [D] [E]=[D]-[C]
Units Proposed
Rates Total Revenue Total COS Revenues
Difference
Calc vs COS
Residential
5/8 Inch 109 $ 51.84 $ 67,808 $ 67,808 $ -
3/4 Inch 3,689 $ 51.84 $ 2,294,912 $ 2,294,912 $ -
1.0 Inch 114 $ 86.19 $ 117,909 $ 117,909 $ -
1.5 Inch 2 $ 172.06 $ 4,130 $ 4,130 $ -
2.0 Inch 8 $ 275.11 $ 26,411 $ 26,411 $ -
Tier 1 (0-11 Units) 378,803 $ 3.70 $ 1,401,059 $ 1,401,059 $ - Tier 2 (11+ Units) 166,119 $ 4.49 $ 745,709 $ 745,709 $ - Non-Residential
5/8 Inch 24 $ 51.84 $ 14,930 $ 14,930 $ -
3/4 Inch 294 $ 51.84 $ 182,896 $ 182,896 $ -
1.0 Inch 170 $ 86.19 $ 175,829 $ 175,829 $ -
1.5 Inch 42 $ 172.06 $ 86,721 $ 86,721 $ -
2.0 Inch 118 $ 275.11 $ 389,560 $ 389,560 $ -
3.0 Inch 7 $ 515.56 $ 43,307 $ 43,307 $ -
4.0 Inch 13 $ 859.05 $ 134,012 $ 134,012 $ -
6.0 Inch 8 $ 1,717.79 $ 164,908 $ 164,908 $ -
All Flow 550,963 $ 4.26 $ 2,349,050 $ 2,349,050 $ -
Fire Service
3/4 Inch 15 $ 2.98 $ 537 $ 537 $ -
4.0 Inch 26 $ 44.76 $ 13,965 $ 13,965 $ -
6.0 Inch 10 $ 89.20 $ 10,705 $ 10,705 $ -
8.0 Inch 16 $ 142.54 $ 27,367 $ 27,367 $ -
10.0 Inch 1 $ 204.76 $ 2,457 $ 2,457 $ -
Water Adjudication Fee 1,095,885 $ 1.10 $ 1,200,000 $ 1,200,000 $ - Total Water System $ 9,454,184 $ 9,454,184 $ -
Customer Class
31 | P a g e
3.3 Sewer Cost-of-Service
As with the water system, the sewer cost-of-service (COS) analysis utilizes the Test Year revenue requirement as the basis for allocating costs to customer classes. The analysis evaluates the costs incurred to provide wastewater collection services and allocates those costs among customer classes based on the demands they place on the sewer collection system. The resulting cost allocations provide the basis for developing rates that equitably recover the cost of service from customers.
The sewer COS analysis was performed through a functionalization, classification, and allocation process, consistent with generally accepted utility ratemaking principles, to determine the cost of service by customer class. Additional information regarding the sewer COS methodology is provided in Appendix C.
3.3.1 Functional Unbundling of Revenue Requirements
The sewer system costs are functionally unbundled into the major cost components associated with providing sewer collection services: Collection, Customer, and Administration.
A brief description of each component is as follows:
• Collection – Costs associated with operating, maintaining, repairing, and replacing the wastewater collection system, including sewer mains, manholes, lift stations, and related infrastructure used to convey wastewater to regional treatment facilities. • Customer – Costs associated with customer service functions, including billing, account administration, collections, recordkeeping, and other customer-related services. • Administration – General and administrative costs, including management, finance, insurance, and other utility support functions that are not directly attributable to a specific operational component.
The allocation of the functionally unbundled revenue requirement for the Test Year is summarized in Table 27.
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32 | P a g e
Table 27 - Functional Unbundled Cost Allocations
3.3.2 Classification of Revenue Requirements
The functionally unbundled revenue requirement for the sewer system is classified according to how costs are incurred and the factors that drive those costs. For purposes of this analysis, costs were classified into Collection, Customer, and Administration cost components. Collection costs are associated with the operation, maintenance, repair, rehabilitation, and replacement of the sewer collection system. Customer costs include billing, account administration, collections, and other customer-related activities that are generally independent of wastewater flow.
Administration costs include management, finance, insurance, and other utility support functions necessary for the operation of the sewer utility.
Because the City's sewer rates are based on Equivalent Dwelling Units (EDUs), the classified costs are allocated to customer classes based on their proportionate share of total system EDUs. For most customers, EDUs are assigned based on the type of customer and established equivalency factors related to their sewer discharge characteristics, which are directly related to the costs incurred to treat and dispose of that discharge. However, for a limited group of non-residential customers that are billed based on monthly sewer flow, the applicable EDUs are calculated using actual water consumption. Annual water usage is divided by 11 CCF and then by twelve (12) months to determine the equivalent monthly EDUs. This approach converts actual wastewater demand into equivalent residential units, allowing these customers to remain within the City's EDU-based cost allocation methodology while more accurately reflecting their proportional use of the sewer system. The resulting system-wide cost classifications for the Test Year are summarized in Table 28.
Test Year
2026
$ 1,711,302
626,968
$ 2,338,270
(1,580,967)
$ 757,303
$ 738,800
$ 963,952
$ 7,800
$ 750
$ 1,061,812
$ (1,580,967)
$ (434,844)
$ 757,303
[1]
Notes:
Description
Fund Balance [1]
Gross Revenue Requirement
Less Other Revenues
Net Revenue Requirement
Represents a transfer from reserves to provide funding for capital outlay and CIP costs.
Non-Rate Revenue
Total
Other Expenditures & Transfers
Functional Unbundled Revenue Requirement
Total O&M
Pumping
Customer Service
CIP
Collection
Administration
33 | P a g e
Table 28 - Classification of Unbundled Revenue Requirements
3.3.3 Allocation to Customer Classes and Unit Cost
Development
The functionalized and classified revenue requirement is allocated to customer classes based on each customer class's proportionate share of total system Equivalent Dwelling Units (EDUs). EDUs provide a standardized measure of relative wastewater demand and are used to allocate costs among customer classes in proportion to the demands they place on the sewer collection system.
Most customer classes are assigned fixed Equivalent Dwelling Units (EDUs) based on the City's established customer classifications. However, a limited group of non-residential customers, including churches, restaurants, commercial/industrial customers, and schools, are billed based on monthly sewer flow. For these customers, actual water consumption is used to determine the equivalent number of EDUs, allowing sewer charges to more accurately reflect each customer's proportional use of the sewer system.
The units of service used to allocate costs among customer classes are summarized in Table 29.
The units of service consist of customer accounts and associated customer units based on the City's billing records. The resulting allocation factors and unit costs provide the basis for developing cost-based sewer rates.
Component Total
Collection $ 738,800
Administration 963,952
Pumping 7,800
Customer Service 750
CIP 1,061,812
Non-Rate Revenue & Fund Balance (2,015,811)
Total $ 757,303
34 | P a g e
Table 29 – Units of Service
Single Residential
Single Residential 3,747 3,775 488,334 3,700
Single Apartment 1 1 284 2
Sub-Total Single Residential 3,748 3,776 488,618 3,702
Multiple Residential
Apt/Condos per Unit 46 538 68,756 521
Multiple Residential Units 13 21 2,961 22
Multiple Units 217 558 55,644 422
Sub-Total Multiple Residential 276 1,117 127,361 965
Mobile Home Park
12 Units X 8.22 1 12 396 3
76 Units X 8.22 1 76 5,937 45
Mh/Rv Parks Per Unit 11 475 41,610 315
Sub-Total Mobile Home Park 13 563 47,943 363
Commercial
Commercial - 1 Unit 63 63 17,517 133
Commercial per Unit 21 41 13,663 104
Commercial/Industrial [3]
106 152 20,123 152
Sub-Total Commercial 190 256 51,302 389
Church
Church per Unit 2 2 287 2
Church - per water use [3]
18 35 4,571 35
Sub-Total Church 20 37 4,857 37
Hotel/Motel
Hotel/Motel - 1 Unit 1 1 1,131 9
Hotel/Motel per Unit 6 54 6,376 48
Sub-Total Hotel/Motel 7 55 7,507 57
Restaurant
Restaurant - per water use [3]
7 15 2,012 15
Sub-Total Restaurant 7 15 2,012 15
School
Park Hill Elementary 1 1 - 1
School - per water use [3]
15 200 26,399 200
Sub-Total School 16 201 26,399 201
Sewer System Total 4,277 6,020 755,999 5,728
[1]
[2]
[3]
Notes:
Description Total
Customers
For all customers, EDUs are based on the number of dwelling units with the exception of those nonresidential customers billed based on monthly water usage. Please refer to footnote [3] below regarding how the EDUs are calculate for these customer classifications.
Assumed annual residential sewer flows were calculated by taking the average winter consumption for the lowest three months of the most recent full fiscal year of water customer data provided, then determining the factor of the winter average usage to the total annual average monthly water usage for the most recent full fiscal year of water customer data provided. This factor was then applied to the projected monthly average "Test Year" water flows to determine the "Test Year" annual sewer flows.
These non-residential customers are billed based on monthly sewer flow. Therefore, total EDUs are calculated by dividing the annual water usage by 11 CCF and then by 12 months to determine the monthly EDUs. Based on historical monthly usage per residential customer, one (1) Equivalent Dwelling Unit (EDU) equals 11 CCF.
Total EDUs [1] CCF Flows [2] Calculated
EDUs
35 | P a g e
To allocate the sewer system revenue requirement among customer classes, a unit cost is developed based on the total number of system EDUs. The allocated revenue requirement is divided by the corresponding units of service to develop a cost per EDU. The resulting unit cost represents the average cost of providing sewer collection service and forms the basis for allocating costs among customer classes. The calculated unit cost is summarized in Table 30.
Table 30 – Cost Per Unit
The allocation of the revenue requirement to each customer class is based on the cost per unit for each component multiplied by the units of service for each customer class. The study maintains the City's existing customer classifications and billing methodology for individual accounts.
Existing fixed EDU assignments for non-residential accounts reflect the City's historical customer classifications and were not re-evaluated as part of this study. The total costs to be recovered from each customer class by rate component are shown in Table 31. [The rest of this page is intentionally left blank]
Description Sewer Total
Total Revenue Requirement $ 757,303 $ 757,303
Units of Service 6,020
EDUs/Monthly
Cost Per Unit $ 10.48
36 | P a g e
Table 31 – Cost-of-Service by Customer Class and Cost Component Description Sewer Total
Single Residential
Single Residential $ 474,863 $ 474,863
Single Apartment 126 126
Sub-Total Single Residential $ 474,989 $ 474,989
Multiple Residential
Apt/Condos per Unit $ 67,676 $ 67,676
Multiple Residential Units 2,642 2,642
Multiple Units 70,192 70,192
Sub-Total Multiple Residential $ 140,509 $ 140,509
Mobile Home Park
12 units x 8.22 $ 1,509 $ 1,509
76 units x 8.22 9,560 9,560
MH/RV Parks per Unit 59,751 59,751
Sub-Total Mobile Home Park $ 70,821 $ 70,821
Commercial
Commercial - 1 Unit $ 7,925 $ 7,925
Commercial per Unit 5,157 5,157
Commercial/Industrial 19,177 19,177
Sub-Total Commercial $ 32,259 $ 32,259
Church
Church per Unit $ 252 $ 252
Church - Per Water Use 4,356 4,356
Sub-Total Church $ 4,607 $ 4,607
Hotel/Motel
Hotel/Motel - 1 Unit $ 126 $ 126
Hotel/Motel per Unit 6,793 6,793
Sub-Total Hotel/Motel $ 6,919 $ 6,919
Restaurant
Restaurant - Per Water Use $ 1,917 $ 1,917
Sub-Total Restaurant $ 1,917 $ 1,917
School
Park Hill Elementary $ 126 $ 126
School - Per Water Use 25,157 25,157
Sub-Total School $ 25,283 $ 25,283
Total $ 757,303 $ 757,303
37 | P a g e
3.3.4 Cost-of-Service and Revenue Check
Following the development of the proposed sewer rates, a cost-of-service revenue check is performed to verify that the rates recover the allocated revenue requirement from each customer class in a manner that is proportional to the cost of providing service. The proposed rates were applied to the customer service units identified in the analysis to estimate the revenues generated from each customer class.
The proposed sewer rate structure consists primarily of a fixed charge based on EDUs. In addition, certain non-residential customers are assessed a volumetric sewer charge based on metered water consumption. The combination of fixed and volumetric charges for various customer classes is designed to recover the allocated cost of service from each customer class in a fair and equitable manner.
The resulting revenues were then compared to the allocated cost of service for each customer class to confirm that the proposed rate structure is consistent with the cost allocation methodology developed in this analysis. The allocated costs and projected revenues by customer class are summarized in Table 32.
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Table 32 – Proposed Rate Revenues vs. COS
[A] [B] [C]=[A]*[B]*12 [D] [E] [F]=[D]*[E] [G]=[C]+[F] [H] [I]=[H]-[G] Monthly
Dwelling
Units
Proposed
Monthly
Fixed Fee
Total Fixed
Fee Revenue
Billable
Annual
Volume
(CCF)
Proposed
Volumetri
c Rate
Total
Volumetri
c Rate
Revenues
Total
Calculated
Revenues
Total COS
Revenues
Difference
Calc vs
COS
Single Residential
Single Residential 3,775 $ 10.48 $ 474,863 N/A N/A N/A $ 474,863 $ 474,863 $ - Single Apartment 1 $ 10.48 126 N/A N/A N/A 126 126 -
Multiple Residential
Apt/Condos per Unit 538 $ 10.48 $ 67,676 N/A N/A N/A $ 67,676 $ 67,676 $ - Multiple Residential Units 21 $ 10.48 2,642 N/A N/A N/A 2,642 2,642 - Multiple Units 558 $ 10.48 70,192 N/A N/A N/A 70,192 70,192 - Mobile Home Park
12 units x 8.22 12 $ 10.48 $ 1,509 N/A N/A N/A $ 1,509 $ 1,509 $ - 76 units x 8.22 76 $ 10.48 9,560 N/A N/A N/A 9,560 9,560 - MH/RV Parks per Unit 475 $ 10.48 59,751 N/A N/A N/A 59,751 59,751 - Commercial
Commercial - 1 Unit 63 $ 10.48 $ 7,925 N/A N/A N/A $ 7,925 $ 7,925 $ - Commercial per Unit 41 $ 10.48 5,157 N/A N/A N/A 5,157 5,157 - Commercial/Industrial 152 N/A N/A 20,123 $ 0.95 $ 19,177 19,177 19,177 - Church
Church per Unit 2 $ 10.48 $ 252 N/A N/A N/A $ 252 $ 252 $ - Church - per water use 35 N/A N/A 4,571 $ 0.95 $ 4,356 4,356 4,356 - Hotel/Motel
Hotel/Motel - 1 Unit 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - Hotel/Motel per Unit 54 $ 10.48 6,793 N/A N/A N/A 6,793 6,793 - Restaurant
Restaurant - per water use 15 N/A N/A 2,012 $ 0.95 $ 1,917 $ 1,917 $ 1,917 $ - School
Park Hill Elementary 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - School - per water use 200 N/A N/A 26,399 $ 0.95 $ 25,157 25,157 25,157 - Total 6,020 $ 706,697 53,104 $ 50,606 $ 757,303 $ 757,303 $ - Description
39 | P a g e
Section 4 – Proposed Test Year Rates
4.1 General
The methodology used to calculate the recommended water and sewer rates proposed herein involves applying the projected customer units of service to the user rates developed in the preceding COS and rate design analyses to calculate the estimated revenues that would be generated. Then, these projected revenues are compared to the estimated Test Year revenue requirements, and the water and sewer rates are adjusted on a percentage basis as necessary until the revenues generated are sufficient to meet the revenue needs of the water and sewer systems.
The COS analyses determined that revenue adjustments are necessary to provide sufficient funding for ongoing operations, capital improvements, reserve funding, debt service obligations, and other utility-related expenditures. Consistent with the findings of the cost-of-service analyses, the proposed rates maintain the City's existing rate structures while adjusting the rates as necessary to recover the projected revenue requirements of each utility system.
The proposed water and sewer rates for the Test Year are summarized in Tables 33 and 34, respectively.
[The rest of this page is intentionally left blank]
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Table 33 – Proposed Monthly Water Rates
Monthly Fixed Charge:
All Customers
5/8 Inch $ 51.84
3/4 Inch $ 51.84
1.0 Inch $ 86.19
1.5 Inch $ 172.06
2.0 Inch $ 275.11
3.0 Inch $ 515.56
4.0 Inch $ 859.05
6.0 Inch $ 1,717.79
8.0 Inch $ 2,748.28
Fire Service
5/8 Inch $ 2.98
3/4 Inch $ 2.98
1.0 Inch $ 4.76
1.5 Inch $ 9.21
2.0 Inch $ 14.54
3.0 Inch $ 26.98
4.0 Inch $ 44.76
6.0 Inch $ 89.20
8.0 Inch $ 142.54
10.0 Inch $ 204.76
12.0 Inch $ 382.53
Construction Meter
Construction Meter $ 515.56
Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.70
Tier 2 (11+ Units) $ 4.49
All Non-Residential Customers
All Flow $ 4.26
Water Adjudication Fee
All Flow $ 1.10
Description
Proposed
Rates
FY 2026
41 | P a g e
Table 34 – Proposed Monthly Sewer Rates
Proposed
Rates
FY 2026
$ 10.48
$ 0.95
$ 10.48
$ 40.31
[1]
[2]
[3]
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
Eastern Municipal Water District (EMWD) provides sewer
treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Sewer (per Sewage Unit)
See Footnote
Notes:
Sewer (per EDU)
Monthly Fixed Charge: [1]
All Customers (Per EDU)
Description
Volumetric Rates Per 100 Cubic Feet: [2]
EMWD Related Charges: [3]
42 | P a g e
4.2 Typical Monthly Bill Comparison
In addition to evaluating the
adequacy of the revenues
generated by the proposed
rates, it is important to
understand the impact that
the proposed rate adjustments
will have on utility customers.
Tables 35, 36, and 37 compare
monthly water, sewer, and
combined utility bills under
the existing and proposed
rates at various levels of water
consumption. All sewer bill
comparisons include both the
City's sewer collection charges and Eastern Municipal Water District's (EMWD) wastewater treatment charges.
Figure 1 provides a graphical comparison of existing and proposed combined utility bills for a typical single-family residential customer receiving both water and sewer service. Based on a historical billing analysis, the average single-family residential customer uses approximately 1,100 cubic feet of water per month. Under the proposed rates, the monthly combined utility bill for a typical single-family residential customer is projected to increase by approximately $27.88, from $127.54 to $155.42 per month.
Table 35 – Single-Family Residential Water Bill Impact
Existing Proposed
Residential
3/4 Inch 0 $ 24.89 $ 51.84 $ 26.95
3/4 Inch 100 $ 29.81 $ 56.64 $ 26.83
3/4 Inch 200 $ 34.73 $ 61.44 $ 26.71
3/4 Inch 300 $ 39.65 $ 66.24 $ 26.59
3/4 Inch 400 $ 44.57 $ 71.04 $ 26.47
3/4 Inch 500 $ 49.49 $ 75.83 $ 26.34
3/4 Inch 600 $ 54.41 $ 80.63 $ 26.22
3/4 Inch 700 $ 59.33 $ 85.43 $ 26.10
3/4 Inch 800 $ 64.25 $ 90.23 $ 25.98
3/4 Inch 1,100 $ 79.01 $ 104.63 $ 25.62
3/4 Inch 1,200 $ 84.68 $ 110.22 $ 25.54
3/4 Inch 1,400 $ 96.02 $ 121.39 $ 25.37
3/4 Inch 1,600 $ 107.36 $ 132.57 $ 25.21
3/4 Inch 2,000 $ 130.04 $ 154.93 $ 24.89
3/4 Inch 2,400 $ 152.72 $ 177.28 $ 24.56
Monthly Flow
(CF)
Monthly Charges $ Amount
Difference Description
43 | P a g e
Table 36 – Single-Family Residential Sewer Bill Impact
Table 37 – Single-Family Residential Combined Bill Impact
4.3 Rate Comparison with Other Utilities
To provide additional context regarding the proposed rate levels, the analysis includes a comparison of the City's existing and proposed user rates relative to those of neighboring water and sewer utility systems located within the same region. The comparison is intended to provide Existing Proposed
Residential
3/4 Inch 0 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 100 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 200 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 300 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 400 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 500 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 600 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 700 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 800 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,100 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,200 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,400 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,600 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 2,000 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 2,400 $ 48.53 $ 50.79 $ 2.26
Description Monthly Flow
(CF)
Monthly Charges $ Amount
Difference Existing Proposed
Residential
3/4 Inch 0 $ 73.42 $ 102.63 $ 29.21
3/4 Inch 100 $ 78.34 $ 107.43 $ 29.09
3/4 Inch 200 $ 83.26 $ 112.23 $ 28.97
3/4 Inch 300 $ 88.18 $ 117.03 $ 28.85
3/4 Inch 400 $ 93.10 $ 121.83 $ 28.73
3/4 Inch 500 $ 98.02 $ 126.62 $ 28.60
3/4 Inch 600 $ 102.94 $ 131.42 $ 28.48
3/4 Inch 700 $ 107.86 $ 136.22 $ 28.36
3/4 Inch 800 $ 112.78 $ 141.02 $ 28.24
3/4 Inch 1,100 $ 127.54 $ 155.42 $ 27.88
3/4 Inch 1,200 $ 133.21 $ 161.01 $ 27.80
3/4 Inch 1,400 $ 144.55 $ 172.18 $ 27.63
3/4 Inch 1,600 $ 155.89 $ 183.36 $ 27.47
3/4 Inch 2,000 $ 178.57 $ 205.72 $ 27.15
3/4 Inch 2,400 $ 201.25 $ 228.07 $ 26.82
Description Monthly Flow
(CF)
Monthly Charges $ Amount
Difference
44 | P a g e
a general indication of how the City's rates compare to those of other service providers, and does not evaluate differences in system characteristics, service levels, infrastructure needs, regulatory requirements, or rate structures.
The analysis compares the monthly water and sewer bills for a typical single-family residential customer under the City's existing and proposed rates with those of neighboring utilities. The rates used for the comparison utilities were in effect or adopted as of July 2025 and exclude local taxes, franchise fees, regulatory fees, outside service surcharges, and other utility-specific charges or adjustments.
A comparison of monthly utility bills for a typical single-family residential customer using 1,100 cubic feet of water per month is illustrated in Figure 2.
It should be noted that direct comparisons of water and sewer rates among utilities should be made with the knowledge that numerous factors can influence the level of rates and charges.
Such factors may include, but are not limited to:
• Terms of wholesale water and sewer service agreements; • Timing of recent rate adjustments for comparison providers; • Level of treatment required to produce potable water; • Wastewater treatment requirements and effluent disposal or discharge methods; • Planned capital improvement programs and associated financing methods; 45 | P a g e
• System size, facility age, available treatment capacity, and historical funding from grants, connection fees, or developer contributions;
• General Fund transfers, administrative overhead allocations, or other interfund charges which may account for differences in the level of rates charged; and • Debt obligations, bond covenants, and reserve funding requirements.
No analysis has been performed to evaluate the effect of these factors on the rates charged by the comparison utilities included in Figure 2. Accordingly, the rate comparison is intended to provide general context regarding regional rate levels and should not be interpreted as a direct comparison of utility operating efficiency or financial condition. 46 | P a g e
Section 5 – Projected Operating Results
5.1 General
As a final step in the analysis, pro forma operating statements are developed for the water and sewer utilities to evaluate the projected financial performance of each system over the 5-year Projection Period. The pro forma statements summarize the anticipated revenues, operating expenses, capital expenditures, debt service obligations, reserve funding, and other financial requirements of each utility.
The projected operating results are presented on a cash-flow basis and cover the period through the end of the Projection Period. The pro forma analyses incorporate the proposed rate adjustments developed in the revenue sufficiency and cost-of-service analyses and are intended to demonstrate the ability of the proposed rates to provide sufficient revenues to meet the projected financial needs of each utility while maintaining adequate reserve levels.
The following sections describe the major assumptions and financial components incorporated into the projected operating results for the water and sewer utilities.
5.2 Projected User Rate Revenues
Projected user rate revenues are estimated by applying the existing and proposed rates to the projected customer units of service for both the water and sewer utilities. The resulting revenues were evaluated against the projected financial requirements of each utility, including operating and maintenance expenses, capital expenditures, debt service obligations, reserve funding, and other utility-related costs.
The proposed rates were developed to generate sufficient revenues to meet the projected financial needs of each utility throughout the Projection Period while maintaining the financial stability of the water and sewer utilities. The projected water, sewer, and combined user rate revenues for the Projection Period are summarized in Table 38. [The rest of this page is intentionally left blank]
47 | P a g e
Table 38 – Projected User Rate Revenues
The projected revenues include the annual water and sewer rate adjustments anticipated for the remaining years of Projection Period beyond the Test Year. The proposed user rates for which the projected operating results are developed for the entire 5-fiscal year Projection Period are provided in Tables 39 and 40. The rates identified in the following tables reflect the cost of providing service to individual customer classes based on the number and types of customers being served, peak demand factors, and volume of flow.
The proposed rates reflect the results of the revenue sufficiency, cost-of-service, and rate design analyses presented in Sections 2, 3, and 4 of this Report and are designed to recover the projected cost of providing service to each customer class in a fair and equitable manner. [The rest of this page is intentionally left blank]
2026 2027 2028 2029 2030
Water
Residential $ 3,011,967 $ 3,764,960 $ 5,665,637 $ 7,209,236 $ 7,905,011 $ 8,219,284 Non-Residential 2,438,555 3,048,193.0 4,215,525.0 5,364,041.0 5,881,733.0 6,115,569.0 Discount 18,778 23,475.0 36,879.0 46,921.0 51,443.0 53,486.0 Fire Service 86,101 107,625.0 67,414.0 85,781.0 94,060.0 97,798.0 Construction Meter 68,229 85,286.0 122,462.0 155,827.0 170,865.0 177,658.0 H20 Adjudication Surcharge 1,939,717 2,424,645.0 1,476,704.0 1,879,031.0 2,060,381.0 2,142,293.0 Total $7,563,347 $ 9,454,184 $ 11,584,621 $ 14,740,837 $ 16,163,493 $16,806,088 Sewer
Single Residential $ 372,465 $ 474,870 $ 558,077 $ 753,313 $ 878,374 $ 904,655 Multiple Residential 110,180 140,474 165,088 222,842 259,837 267,611 Mobile Home Park 55,535 70,803 83,209 112,319 130,965 134,884 Commercial 25,350 32,322 37,903 51,168 59,666 61,455
Church 3,625 4,623 5,414 7,308 8,522 8,778
Hotel/Motel 5,426 6,917 8,129 10,973 12,794 13,177
Restaurant 1,509 1,924 2,253 3,041 3,546 3,653
School 19,898 25,370 29,708 40,106 46,770 48,173
Total $ 593,988 $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 Total Combined Revenue $ 8,157,335 $ 10,211,487 $12,474,402 $ 15,941,907 $ 17,563,967 $18,248,474 Description Existing
Rates
Projected for Fiscal Year Ending June 30
48 | P a g e
Table 39 – Proposed Monthly Water Rates
2026 2027 2028 2029 2030
Monthly Fixed Charge:
All Customers
5/8 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49 3/4 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49
1.0 Inch $ 34.82 $ 86.19 $ 124.98 $ 143.72 $ 150.91 $ 155.44
1.5 Inch $ 59.68 $ 172.06 $ 249.50 $ 286.92 $ 301.27 $ 310.31
2.0 Inch $ 89.51 $ 275.11 $ 398.91 $ 458.75 $ 481.69 $ 496.14
3.0 Inch $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.68 $ 929.76
4.0 Inch $ 323.13 $ 859.05 $ 1,245.63 $ 1,432.47 $ 1,504.09 $ 1,549.22
6.0 Inch $ 656.17 $ 1,717.79 $ 2,490.79 $ 2,864.41 $ 3,007.63 $ 3,097.86
8.0 Inch $ 1,202.94 $ 2,748.28 $ 3,985.00 $ 4,582.75 $ 4,811.89 $ 4,956.24 Fire Service
5/8 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
3/4 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
1.0 Inch N/A $ 4.76 $ 6.90 $ 7.94 $ 8.34 $ 8.59
1.5 Inch N/A $ 9.21 $ 13.35 $ 15.35 $ 16.12 $ 16.60
2.0 Inch N/A $ 14.54 $ 21.08 $ 24.24 $ 25.46 $ 26.22
3.0 Inch N/A $ 26.98 $ 39.13 $ 44.99 $ 47.24 $ 48.66
4.0 Inch $ 41.18 $ 44.76 $ 64.90 $ 74.64 $ 78.37 $ 80.72
6.0 Inch $ 119.60 $ 89.20 $ 129.35 $ 148.75 $ 156.19 $ 160.87
8.0 Inch $ 254.80 $ 142.54 $ 206.68 $ 237.68 $ 249.56 $ 257.05
10.0 Inch $ 458.23 $ 204.76 $ 296.90 $ 341.44 $ 358.51 $ 369.26
12.0 Inch $ 740.17 $ 382.53 $ 554.67 $ 637.88 $ 669.77 $ 689.86 Construction Meter
Construction Meter $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.67 $ 929.75 Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.15 $ 3.70 $ 5.36 $ 6.17 $ 6.48 $ 6.67 Tier 2 (11+ Units) $ 3.90 $ 4.49 $ 6.51 $ 7.49 $ 7.86 $ 8.10 All Customers
All Flow $ 3.73 $ 4.26 $ 6.18 $ 7.11 $ 7.46 $ 7.69
Water Adjudication Fee
All Flow $ 1.77 $ 1.10 $ 1.60 $ 1.83 $ 1.93 $ 1.98
Description Existing
Rates
Projected for Fiscal Year Ending June 30
49 | P a g e
Table 40 – Proposed Monthly Sewer Rates
The projected user rates presented for periods beyond the Test Year are intended for long-term financial planning purposes and are provided to illustrate the estimated rate adjustments that may be necessary to meet the projected financial needs of the water and sewer utilities. The projected rates are based on the customer, usage, expenditure, and revenue assumptions incorporated into this rate study.
Because the projected operating results are dependent upon numerous assumptions, actual results may differ from those presented herein. To the extent that actual customer growth, water usage, operating costs, capital expenditures, or other financial conditions differ from the assumptions used in this analysis, future rate adjustments may be required.
For informational purposes, the projected monthly bill for a typical single-family residential customer is presented for each year of the Projection Period. An illustration of the projected bill path is provided in Figure 3.
2026 2027 2028 2029 2030
$ 8.22 $ 10.48 $ 14.15 $ 19.10 $ 19.67 $ 20.26
$ 0.75 $ 0.95 $ 1.29 $ 1.74 $ 1.79 $ 1.84
$ 8.22 $ 10.48
$ 40.31 $ 40.31
[1] Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below. [2]
[3]
Subject to EMWD Updated Rates
Subject to EMWD Updated Rates
See Footnote
Description
Eastern Municipal Water District (EMWD) provides sewer treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Existing
Rates
Projected for Fiscal Year Ending June 30
Monthly Fixed Charge: [1]
Volumetric Rates Per 100 Cubic Feet: [2]
EMWD Related Charges: [3]
All Customers (Per EDU)
Sewer (per EDU)
Sewer (per Sewage Unit)
Notes:
50 | P a g e
5.3 Debt Service Coverage
The water utility operating statement also includes a calculation of annual debt service coverage.
Because the sewer utility does not have any debt service obligations during the Projection Period, a debt service coverage calculation is not applicable and has not been included. Debt service coverage is a commonly used financial metric that measures the utility's ability to generate sufficient revenues to meet its annual debt service obligations and is often considered an indicator of financial strength.
For purposes of this analysis, debt service coverage is calculated by dividing net revenues by the annual debt service requirement. Net revenues consist of total operating revenues, including user rate revenues and other revenues, less operating and maintenance expenses.
The debt service coverage results are provided for planning and informational purposes only and are not intended to represent a legally binding calculation for bond covenant compliance or representation to existing or prospective bondholders. The projected debt service coverage for the water utility is summarized in Table 41.
Table 41 – Projected Water Debt Service Coverage Ratio
Fiscal Year Projected
2026 2.30
2027 4.66
2028 7.45
2029 8.35
2030 8.39
51 | P a g e
5.4 Summary of Projected Operating Results
The projected operating results for the water and sewer utilities are summarized in Tables 42 and 43, respectively. Based on the assumptions incorporated into this analysis, the proposed rates and charges, together with other utility revenues, are projected to generate sufficient revenues to meet the anticipated operating, capital, debt service, reserve funding, and other financial requirements of each utility throughout the Projection Period.
The projected operating results demonstrate that the proposed rates provide a financially sustainable funding plan for the water and sewer utilities while maintaining the City's existing rate structures and supporting the continued operation, maintenance, repair, and replacement of utility infrastructure. The complete cash-flow statements for the water and sewer utilities are provided in Appendix D.
Table 42 – Water System Projected Operating Results
2026 2027 2028 2029 2030
Revenues:
Water Sales $ 7,563 $ 9,454 $ 11,585 $ 14,741 $ 16,163 $ 16,806 Other Revenues 230 230 230 230 230 230
Total Revenues $ 7,793 $ 9,684 $ 11,815 $ 14,971 $ 16,393 $ 17,036 Less O&M Expenses (7,546) (7,546) (7,426) (7,841) (8,286) (8,763) Income Available for Debt Service $ 247 $ 2,138 $ 4,389 $ 7,130 $ 8,108 $ 8,273 Debt Service:
Existing $ 930 $ 930 $ 942 $ 957 $ 971 $ 987
Total Indebtedness $ 930 $ 930 $ 942 $ 957 $ 971 $ 987
Net Results $ (683) $ 1,208 $ 3,446 $ 6,173 $ 7,137 $ 7,287 Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 3,448 $ 3,448 $ 2,481 $ 2,441 $ 2,578 $ 2,724 Deposit/(Withdrawal) from Operations (683) 1,208 3,446 6,173 7,137 7,287 Transfer from/(to) Capital Reserve Fund (234) (2,125) (3,436) (5,987) (6,941) (7,080) Transfer to Capital Fund (50) (50) (50) (50) (50) (50)
Total Operating Fund Balance $ 2,481 $ 2,481 $ 2,441 $ 2,578 $ 2,724 $ 2,881 Operating Days Cash on Hand 120 120 120 120 120 120
Capital Fund
Beginning Balance $ 1,097 $ 1,097 $ 1,272 $ 505 $ 864 $ 794 Transfer from/(to) Operating Fund 234 2,125 3,436 5,987 6,941 7,080 Water Capital Improvement Revenue 50 50 50 50 50 50
Cash Funded Capital Projects (2,000) (2,000) (4,253) (5,678) (7,062) (5,895) Total Capital Fund Balance $ (619) $ 1,272 $ 505 $ 864 $ 794 $ 2,029 Water Enterprise Reserves
Beginning Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Revenues Toward Debt Service Payment $ 930 $ 930 $ 942 $ 957 $ 971 $ 987 Annual Debt Service Payment (930) (930) (942) (957) (971) (987) Ending Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Total Fund Balance - Water $ 3,012 $ 4,903 $ 4,096 $ 4,592 $ 4,668 $ 6,059 Debt Coverage 0.27 2.30 4.66 7.45 8.35 8.39
Description Existing
Rates
Projected for Fiscal Year Ending June 30 ($1,000s)
52 | P a g e
Table 43 – Sewer System Projected Operating Results
2026 2027 2028 2029 2030
Revenues:
Wastewater Sales $ 594 $ 757 $ 890 $ 1,201 $ 1,400 $ 1,442 Other Revenues 1,053 1,581 1,320 1,322 1,324 1,326
Total Revenues $ 1,647 $ 2,338 $ 2,209 $ 2,523 $ 2,724 $ 2,769 Less O&M Expenses (1,711) (1,711) (1,780) (1,852) (1,926) (2,005) Income Available for Debt Service $ (64) $ 627 $ 429 $ 671 $ 798 $ 764 Net Results $ (64) $ 627 $ 429 $ 671 $ 798 $ 764
Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 1,933 $ 1,933 $ 563 $ 585 $ 609 $ 633 Deposit/(Withdrawal) from Operations (64) 627 429 671 798 764 Transfer from/(to) Capital Reserve Fund (1,276) (1,967) (377) (618) (743) (708) Transfer to Capital Fund (30) (30) (30) (30) (30) (30)
Total Operating Fund Balance $ 563 $ 563 $ 585 $ 609 $ 633 $ 659 Days Cash on Hand 120 120 120 120 120 120
Capital Fund
Beginning Balance $ 156 $ 156 $ 1,091 $ 422 $ 325 $ 404 Transfer from/(to) Operating Fund 1,276 1,967 377 618 743 708 Sewer Connection Fee Revenue 30 30 30 30 30 30
Cash Funded Capital Projects (1,062) (1,062) (1,076) (744) (695) (486) Total Capital Fund Balance $ 400 $ 1,091 $ 422 $ 325 $ 404 $ 656 Total Fund Balance - Sewer $ 963 $ 1,654 $ 1,007 $ 934 $ 1,037 $ 1,315 Debt Coverage N/A N/A N/A N/A N/A N/A
Description Existing
Rates
Projected for Fiscal Year Ending June 30 ($1,000s)
53 | P a g e
Section 6 – Conclusions and Recommendations
6.1 Disclaimers
6.1.1 General Disclaimer
In the development of the proposed user rates and charges, certain historical reviews and analyses have been performed, together with the application of assumptions based on prudent financial, operational, and ratemaking relationships. The cost criteria and customer usage characteristics associated with general ratemaking procedures are representative of averages and are not intended as indicators of any individual customer.
In the preparation of the rate study, certain assumptions have been made with respect to conditions that may occur in the future. While it is believed that these assumptions are reasonable for the purpose of this rate study, they are dependent upon future events and actual conditions may differ from those assumed. In addition, the study has used and relied upon certain information that was provided by other parties not associated with Willdan. Such information includes, among other things, the City’s audited financial statements, annual operating budgets, periodic reports, and other information and data provided by the City, its independent auditors, and other sources. While the sources are believed to be reliable, there has been no independent verification of the information, and no assurances are offered with respect thereto. To the extent that future conditions differ from those assumed herein or provided by others, the actual results may vary from those projected.
6.1.2 Municipal Advisory Disclaimer
Unless the City of San Jacinto, California (the “City”) has a written engagement from Willdan Financial Services (“Willdan”) for municipal advisory services, Willdan is not advising or recommending any action be taken by the recipient of this information with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues). The City shall discuss any such information and material contained in Willdan’s work product with all internal and/or external advisors and experts, including its own municipal advisor, that it deems appropriate before acting on the information and material.
For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cash-flow analyses, feasibility studies and/or other analyses Willdan may provide the City with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the City, (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the City, in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any revisions or amendments thereto. 54 | P a g e
6.2 Conclusions
As previously addressed, the purpose of this study is to provide a review of the City’s existing utility rates to determine if rate adjustments are necessary to meet the budgeted and/or projected financial needs in future years. This Report is the result of the collaborative efforts of representatives from both the City and Willdan. City staff were diligent and cooperative in their efforts to ensure the availability and quality of source data on financial and operating matters.
Based on the reviews, analyses and assumptions discussed herein, it is concluded that:
1. The proposed user rates and charges are anticipated to generate sufficient revenues to meet the revenue requirements of each respective system based upon the projected expenditures, capital project timing and costs, transfers, and billable customer units estimated for the Test Year. The proposed rates were developed based on an assumed implementation date of January 1, 2026. To the extent that the actual implementation date varies from the assumed implementation date, additional rate adjustments and/or appropriations from existing reserves may be necessary.
2. The estimated revenues and resulting rate adjustments for the remaining years of the Projection Period beyond the Test Year are generated from the historical analyses and discussions with City staff.
3. The projection of billable water and sewer units is based on historical customer usage patterns and average units per account by customer class. For purposes of the Projection Period, average usage is assumed to remain generally consistent with recent historical levels unless otherwise adjusted based on discussions with staff. Actual billable demands may vary due to weather conditions, rainfall, and other factors that influence customer usage.
4. Future capital improvement projects are assumed to occur as reported by the City in its Capital Improvement Plan. To the extent that the timing of such projects may change from that estimated herein, the cost of such projects and resulting impact on future rates and charges may vary from those indicated.
5. The proposed rates and rate structure are consistent with industry standards for ratesetting practices, comply with Proposition 218, and conform to the City’s financial policies with respect to:
a. Equitably recovering costs;
b. Being based upon the proportionate cost of providing services; and c. Generating sufficient revenue to recover system revenue requirements, meet debt service coverage requirements, fund capital needs, and meet reserve requirements. 55 | P a g e
6.3 Recommendations
Based on the reviews, analyses, and assumptions addressed herein, as well as the resulting conclusions provided above, it is respectfully recommended that the City:
1. Adopt the proposed water and sewer rates.
2. Enact the proposed rates to become effective as of January 1, 2027 (or other such date as determined by the City). Based on the timing of the project and the required public hearing procedures and noticing requirements, it is expected that the proposed water and sewer rates will become effective on the recommended date.
3. Readdress the COS analysis portion of this study every three to five years to ensure costs are recovered consistently with COS principles and customer characteristics.
We appreciate the opportunity to be of service to the City in this engagement. In addition, we would like to thank City staff for the valuable assistance provided during the completion of the rate study.
Respectfully Yours,
WILLDAN FINANCIAL SERVICES
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendices
A Revenue Requirement for User Rates
B Water Cost-of-Service Analysis
C Sewer Cost-of-Service Analysis
D 10-Year Financial Projections
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix A
Revenue Requirement for User
Rates
APPENDIX - A
CITY OF SAN JACINTO, CA
DEVELOPMENT OF RATE REVENUE REQUIREMENTS
[A] [B] [C]=[A]*[B] [D] [E]=[A]*[D]
FY 2026 % to Water Water % to Sewer Sewer
1 Total Operating Revenues $ 12,022,454 $ 9,684,184 $ 2,338,270 Less:
Other Operating Revenues
2 Interest $ 106,000 100% $ 106,000 0% $ -
3 Miscellaneous Revenue 2,500 100% 2,500 0% -
4 Interest 34,000 100% 34,000 0% -
5 Water Capital Improvement 50,000 100% 50,000 0% -
6 Interest 37,500 100% 37,500 0% -
7 Interest 60,000 0% - 100% 60,000
8 Interest 3,750 0% - 100% 3,750
9 Sewer Connect Fee 30,000 0% - 100% 30,000
10 EMWD Sewer Maintenance Fees 1,487,217 0% - 100% 1,487,217 11 Total Other Operating Revenues $ 1,810,967 $ 230,000 $ 1,580,967 12 Total Rate Revenue Requirement $ 10,211,487 93% $ 9,454,184 7% $ 757,303 Line Test Year for Rate Revenue Requirement
No:
Description
A - 1
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix B Water Cost-of-Service Analysis
APPENDIX - B
CITY OF SAN JACINTO, CA
ALLOCATION OF TEST YEAR COSTS TO WATER FUNCTION
Line No: Expense Group FY 2026
1 Transmission & Distribution $ 1,275,630
2 Pumping 502,100
3 Customer Service 20,250
4 Administration 4,203,436
5 Source of Supply 345,000
6 Water Adjudication 1,200,000
7 Existing Bond DS 929,713
8 New Bond DS -
9 CIP 2,000,000
10 Capital Outlay -
11 Total $ 10,476,129
Test Year Revenue Requirement
B - 1
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER MAX DAY/HOUR ALLOCATION FACTORS - TEST YEAR FY 2026 [A] [B] [C] [D] [E] [F]
Flow
Peak Month
(CCF)
Average
Month
(CCF)
Max Day/Avg
Day Factor
Max Day Total
Capacity
(CCF/Day)
Max Day Extra
Capacity
(CCF/Day)
Operating Statistics: MGD Factor
1 Avg Day Flow (MGD) 2.90 1.00
2 Max Day Flow (MGD) 4.40 1.52
Cost Allocation Factors: Base Max Day Max Hour
3 Base/Max Day 65.91% 34.09% 0.00%
Peaking Factors: [B] / [C]
Residential
4 Tier 1 (0-11 Units) 60,711 32,557 1.86
5 Tier 2 (11+ Units) 35,698 14,910 2.39
Non-Residential
6 All Flow 105,515 47,038 2.24
[D] x [B] [E] - [B]
Estimated Max Day/Hur Flows: Total Annual
Flow (CCF)
Average
Daily Flow
(CCF)
Peaking
Factor
Total Capacity Extra Capacity
Residential
7 Tier 1 (0-11 Units) 378,803 1,038 1.86 1,935 897
8 Tier 2 (11+ Units) 166,119 455 2.39 1,090 635
Non-Residential
9 All Flow 550,963 1,509 2.24 3,386 1,877
10 Total 1,095,885 3,002 6,411 3,409
Maximum Day
Line
No:
Description
B - 2
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER CUSTOMER AND EQUIVALENT RESIDENTIAL UNIT CALCULATION - TEST YEAR FY 2026 [A - 1] [B - 1] [C - 1] [D - 1] [E - 1] [F - 1] [G - 1] [H - 1] Class -->
Inside
Residential
Inside NonResidential Inside DiscountOutside
Residential
Outside NonResidentialOutside
Discount Fire Service
Construction
Meter
Billing Basis--> Units Units Units Units Units Units Units Units 1 0.625 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
3 1.00 1.67 1.67 1.67 1.67 1.67 1.67 1.67 1.67
4 1.50 3.33 3.33 3.33 3.33 3.33 3.33 3.33 3.33
6 3.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
7 4.00 16.67 16.67 16.67 16.67 16.67 16.67 16.67 16.67
8 6.00 33.33 33.33 33.33 33.33 33.33 33.33 33.33 33.33
9 8.00 53.33 53.33 53.33 53.33 53.33 53.33 53.33 53.33
10 10.00 76.67 76.67 76.67 76.67 76.67 76.67 76.67 76.67 [A - 2] [B - 2] [C - 2] [D - 2] [E - 2] [F - 2] [G - 2] [H - 2] Class -->
Inside
Residential
Inside NonResidential Inside DiscountOutside
Residential
Outside NonResidentialOutside
Discount Fire Service
Construction
Meter
Billing Basis--> Units Units Units Units Units Units Units Units 11 0.625 105 24 2 2 0 0 0 0 133
12 0.75 3,634 293 26 29 1 0 15 0 3,998
13 1.00 102 164 1 11 6 0 0 0 284
14 1.50 2 38 0 0 4 0 0 0 44
15 2.00 5 117 0 3 1 0 0 0 126
16 3.00 0 1 0 0 0 0 0 6 7
17 4.00 0 12 0 0 1 0 26 0 39
18 6.00 0 8 0 0 0 0 10 0 18
19 8.00 0 0 0 0 0 0 16 0 16
20 10.00 0 0 0 0 0 0 1 0 1
21 Total Monthly Customers 3,848 657 29 45 13 0 68 6 4,666 [A - 1] * [A - 2] [B - 1] * [B - 2] [C - 1] * [C - 2] [D - 1] * [D - 2] [E - 1] * [E - 2] [F - 1] * [F - 2] [G - 1] * [G - 2] [H - 1] * [H - 2] Class -->
Inside
Residential
Inside NonResidential Inside Discount Outside
Residential
Outside NonResidentialOutside
Discount Fire Service
Construction
Meter
Billing Basis--> Units Units Units Units Units Units Units Units 22 0.625 105 24 2 2 0 0 0 0 133
23 0.75 3,634 293 26 29 1 0 15 0 3,998
24 1.00 170 273 2 18 10 0 0 0 473
25 1.50 7 127 0 0 13 0 0 0 147
26 2.00 27 624 0 16 5 0 0 0 672
27 3.00 0 10 0 0 0 0 0 60 70
28 4.00 0 200 0 0 17 0 433 0 650
29 6.00 0 267 0 0 0 0 333 0 600
30 8.00 0 0 0 0 0 0 853 0 853
31 10.00 0 0 0 0 0 0 77 0 77
32 Total Monthly Customers 3,942 1,818 30 65 46 0 1,712 60 7,673 Meter Equivalencies
Total
Total
Meter Size
Meter Size
Meter Size
Customer Accounts
Total Equivalent Dwelling Units
Line
No:
Line
No:
Line
No:
B - 3
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER UNITS OF SERVICE BY COST COMPONENT - TEST YEAR FY 2026 [A] [B] [C] [D]
EDUs
Accounts/
Units Base (CCF)
Max Day
(CCF/Day)
Residential 4,037 3,922 544,922 1,532
1 Tier 1 (0-11 Units) 378,803 897
2 Tier 2 (11+ Units) 166,119 635
Non-Residential 1,924 676 550,963 1,877
3 All Flow 550,963 1,877
Fire Service 1,712 68 0 0
4 All Flow 0 0
5 Total 7,673 4,666 1,095,885 3,409
Line No: Description
B - 4
APPENDIX - B
CITY OF SAN JACINTO, CA
ALLOCATION OF WATER COSTS - TEST YEAR FY 2026
Line
No:
Description Water Costs Base
Extra Capacity
Max Day
Meters & Services
Billing &
Collection
Fire Protection
Water
Adjudication
Total (Check)
Allocation Factors:
1 Transmission & Distribution 44.75% 55.25% 0.00% 0.00% 0.00% 0.00% 100.00% 2 Pumping 44.75% 55.25% 0.00% 0.00% 0.00% 0.00% 100.00% 3 Customer Service 0.00% 0.00% 0.00% 98.54% 1.46% 0.00% 100.00% 4 Administration 0.00% 0.00% 98.54% 0.00% 1.46% 0.00% 100.00% 5 Source of Supply 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 6 Water Adjudication 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% 7 Existing Bond DS 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 8 New Bond DS 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 100.00% 9 CIP 44.75% 55.25% 0.00% 0.00% 0.00% 0.00% 100.00%
10 Capital Outlay 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 100.00% Allocation of Costs:
11 Transmission & Distribution $ 1,275,630 $ 570,884 $ 704,746 $ - $ - $ - $ - $ 1,275,630 12 Pumping 502,100 224,705 277,395 - - - - 502,100
13 Customer Service 20,250 - - - 19,955 295 - 20,250
14 Administration 4,203,436 - - 4,142,177 - 61,259 - 4,203,436 15 Source of Supply 345,000 345,000 - - - - - 345,000
16 Water Adjudication 1,200,000 - - - - - 1,200,000 1,200,000 17 Existing Bond DS 929,713 929,713 - - - - - 929,713
18 New Bond DS - - - - - - - -
19 CIP 2,000,000 895,062 1,104,938 - - - - 2,000,000
20 Capital Outlay - - - - - - - -
21 Non-Rate Rev & Fund Balance (1,021,945) (326,692) (229,932) (456,341) (2,198) (6,781) - (1,021,945) 22 Total $ 9,454,184 $ 2,638,672 $ 1,857,147 $ 3,685,836 $ 17,756 $ 54,773 $ 1,200,000 $ 9,454,184 Total Units of Service 1,095,885 3,409 71,536 55,992 20,540 1,095,885 Units CCF CCF/Day EDUs/Monthly Bills/Monthly EDUs/Year CCF Cost Per Unit $ 2.4078 $ 544.8447 $ 51.5242 $ 0.3171 $ 2.6666 $ 1.0950 Units CCF CCF/Day EDUs/Monthly Bills/Monthly EDUs/Year CCF B - 5
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER COST OF SERVICE BY COST COMPONENT AND CUSTOMER CLASS - TEST YEAR FY 2026 [A] [B] [C] [D] [E] [F]
EDUs
Accounts/
Units
Base (CCF)
Max Day
(CCF/Day)
Water
Adjudication
Total
Residential $ 2,496,245 $ 14,925 $ 1,312,063 $ 834,705 $ 596,693 $ 5,254,631 1 Tier 1 (0-11 Units) $ 912,082 $ 488,978 $ 414,791
2 Tier 2 (11+ Units) $ 399,981 $ 345,728 $ 181,901
Non-Residential $ 1,189,591 $ 2,573 $ 1,326,609 $ 1,022,442 $ 603,307 $ 4,144,521 3 All Flow $ 1,326,609 $ 1,022,442 $ 603,307
Fire Service $ 54,773 $ 259 $ - $ - $ - $ 55,031
4 All Flow $ - $ - $ -
5 Total $ 3,740,609 $ 17,756 $ 2,638,672 $ 1,857,147 $ 1,200,000 $ 9,454,184 Line No: Description
B - 6
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER RATE CALCULATION - TEST YEAR FY 2026
[A] [B] [C] [D] [E] [F]
Capacity
Ratio
Meter
Charge
Customer
Charge
Proposed
Fixed
Charge
Existing
Fixed
Charge
Difference
Monthly Fixed Charge:
Residential
1 5/8 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95
2 3/4 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95
3 1.0 Inch 1.67 $ 85.87 $ 0.32 $ 86.19 $ 34.82 $ 51.37
4 1.5 Inch 3.33 $ 171.75 $ 0.32 $ 172.06 $ 59.68 $ 112.38 5 2.0 Inch 5.33 $ 274.80 $ 0.32 $ 275.11 $ 89.51 $ 185.60 6 3.0 Inch 10.00 $ 515.24 $ 0.32 $ 515.56 $ 183.96 $ 331.60 7 4.0 Inch 16.67 $ 858.74 $ 0.32 $ 859.05 $ 323.13 $ 535.92 8 6.0 Inch 33.33 $ 1,717.47 $ 0.32 $ 1,717.79 $ 656.17 $ 1,061.62 9 8.0 Inch 53.33 $ 2,747.96 $ 0.32 $ 2,748.28 $ 1,202.94 $ 1,545.34 Non-Residential
10 5/8 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95 11 3/4 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95 12 1.0 Inch 1.67 $ 85.87 $ 0.32 $ 86.19 $ 34.82 $ 51.37 13 1.5 Inch 3.33 $ 171.75 $ 0.32 $ 172.06 $ 59.68 $ 112.38 14 2.0 Inch 5.33 $ 274.80 $ 0.32 $ 275.11 $ 89.51 $ 185.60 15 3.0 Inch 10.00 $ 515.24 $ 0.32 $ 515.56 $ 183.96 $ 331.60 16 4.0 Inch 16.67 $ 858.74 $ 0.32 $ 859.05 $ 323.13 $ 535.92 17 6.0 Inch 33.33 $ 1,717.47 $ 0.32 $ 1,717.79 $ 656.17 $ 1,061.62 18 8.0 Inch 53.33 $ 2,747.96 $ 0.32 $ 2,748.28 $ 1,202.94 $ 1,545.34 Line
No:
Description
B - 7
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER RATE CALCULATION - TEST YEAR FY 2026
[A] [B] [C] [D] [E] [F]
Capacity
Ratio
Meter
Charge
Customer
Charge
Proposed
Fixed
Charge
Existing
Fixed
Charge
Difference
Monthly Fixed Charge (Cont.):
Fire Service
19 5/8 Inch 1.00 $ 2.67 $ 0.32 $ 2.98 $ 24.89 $ (21.91) 20 3/4 Inch 1.00 $ 2.67 $ 0.32 $ 2.98 $ 24.89 $ (21.91) 21 1.0 Inch 1.67 $ 4.44 $ 0.32 $ 4.76 N/A N/A
22 1.5 Inch 3.33 $ 8.89 $ 0.32 $ 9.21 N/A N/A
23 2.0 Inch 5.33 $ 14.22 $ 0.32 $ 14.54 N/A N/A
24 3.0 Inch 10.00 $ 26.67 $ 0.32 $ 26.98 N/A N/A
25 4.0 Inch 16.67 $ 44.44 $ 0.32 $ 44.76 $ 41.18 $ 3.58 26 6.0 Inch 33.33 $ 88.89 $ 0.32 $ 89.20 $ 119.60 $ (30.40) 27 8.0 Inch 53.33 $ 142.22 $ 0.32 $ 142.54 $ 254.80 $ (112.26) 28 10.0 Inch 76.67 $ 204.44 $ 0.32 $ 204.76 $ 458.23 $ (253.47) 29 12.0 Inch 143.33 $ 382.22 $ 0.32 $ 382.53 $ 740.17 $ (357.64) Line
No:
Description Base Rate
Peaking
Rate
Proposed
Rate ($/CCF)
Existing
Rate ($/CCF) Difference Tier Differential
Volumetric Rates Per 100 Cubic Feet:
Residential
30 Tier 1 (0-11 Units) $ 2.41 $ 1.29 $ 3.70 $ 3.15 $ 0.55 1.0000 31 Tier 2 (11+ Units) $ 2.41 $ 2.08 $ 4.49 $ 3.90 $ 0.59 1.2137 Non-Residential
32 All Flow $ 2.41 $ 1.86 $ 4.26 $ 3.73 $ 0.53 1.0000
Water Adjudication Fee
33 All Flow $ 1.10 $ - $ 1.10 $ 1.77 $ (0.67) 1.0000
Line
No:
Description
B - 8
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER RATE CALCULATION - TEST YEAR FY 2026
Line
No:
Customer Class
Annual Use
(CCF)
Peaking
Costs
Peaking
Unit Cost
Residential
1 Tier 1 (0-11 Units) 378,803 $ 488,978 $ 1.2908
2 Tier 2 (11+ Units) 166,119 $ 345,728 $ 2.0812
Non-Residential
3 All Flow 550,963 $ 1,022,442 $ 1.8557
4 Total 1,095,885 $ 1,857,147
B - 9
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix C Sewer Cost-of-Service Analysis
APPENDIX - C
CITY OF SAN JACINTO, CA
ALLOCATION OF TEST YEAR COSTS TO SEWER FUNCTION
Line No: Expense Group FY 2026
1 Collection $ 738,800
2 Administration 963,952
3 Pumping 7,800
4 Customer Service 750
5 Existing Bond DS -
6 New Bond DS -
7 CIP 1,061,812
8 Capital Outlay -
9 Total $ 2,773,114
Test Year Revenue Requirement
C - 1
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER CUSTOMER ACCOUNT & STENGTH CHARACTERISTICS BY CUSTOMER CLASS - TEST YEAR FY 2026 Single Residential
Single Residential 3,747 3,775 488,334 3,700
Single Apartment 1 1 284 2
Sub-Total Single Residential 3,748 3,776 488,618 3,702
Multiple Residential
Apt/Condos per Unit 46 538 68,756 521
Multiple Residential Units 13 21 2,961 22
Multiple Units 217 558 55,644 422
Sub-Total Multiple Residential 276 1,117 127,361 965
Mobile Home Park
12 units x 8.22 1 12 396 3
76 units x 8.22 1 76 5,937 45
MH/RV Parks per Unit 11 475 41,610 315
Sub-Total Mobile Home Park 13 563 47,943 363
Commercial
Commercial - 1 Unit 63 63 17,517 133
Commercial per Unit 21 41 13,663 104
Commercial/Industrial [3]
106 152 20,123 152
Sub-Total Commercial 190 256 51,302 389
Church
Church per Unit 2 2 287 2
Church - per water use [3]
18 35 4,571 35
Sub-Total Church 20 37 4,857 37
Line No: Description
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
Total
Customers
Total EDUs [1] CCF Flows [2] Calculated
EDUs
C - 2
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER CUSTOMER ACCOUNT & STENGTH CHARACTERISTICS BY CUSTOMER CLASS - TEST YEAR FY 2026 Line No: Description Total
Customers
Total EDUs [1] CCF Flows [2] Calculated
EDUs
Hotel/Motel
Hotel/Motel - 1 Unit 1 1 1,131 9
Hotel/Motel per Unit 6 54 6,376 48
Sub-Total Hotel/Motel 7 55 7,507 57
Restaurant
Restaurant - per water use [3]
7 15 2,012 15
Sub-Total Restaurant 7 15 2,012 15
School
Park Hill Elementary 1 1 - 1
School - per water use [3]
15 200 26,399 200
Sub-Total School 16 201 26,399 201
Sewer System Total 4,277 6,020 755,999 5,728
Notes:
[1]
[2]
[3] These non-residential customers are billed based on monthly sewer flow. Therefore, total EDUs are calculated by dividing the annual water usage by 11 CCF and then by 12 months to determine the monthly EDUs. Based on historical monthly usage per residential customer, one (1) Equivalent Dwelling Unit (EDU) equals 11 CCF. 19 20
21 22
Assumed annual residential sewer flows were calculated by taking the average winter consumption for the lowest three months of the most recent full fiscal year of water customer data provided, then determining the factor of the winter average usage to the total annual average monthly water usage for the most recent full fiscal year of water customer data provided. This factor was then applied to the projected monthly average "Test Year" water flows to determine the "Test Year" annual sewer flows. 23 24
25 26
27 For all customers, EDUs are based on the number of dwelling units with the exception of those non-residential customers billed based on monthly water usage. Please refer to footnote [3] below regarding how the EDUs are calculate for these customer classifications.
C - 3
APPENDIX - C
CITY OF SAN JACINTO, CA
ALLOCATION OF SEWER COSTS - TEST YEAR FY 2026
Line No: Description Sewer Costs Sewer Total
Allocation Factors:
1 Collection 100.00% 100.00%
2 Administration 100.00% 100.00%
3 Pumping 100.00% 100.00%
4 Customer Service 100.00% 100.00%
5 CIP 100.00% 100.00%
6 Capital Outlay 100.00% 100.00%
7 Existing Bond DS 100.00% 100.00%
8 New Bond DS 100.00% 100.00%
Allocation of Costs:
9 Collection $ 738,800 $ 738,800 $ 738,800
10 Administration 963,952 963,952 963,952
11 Pumping 7,800 7,800 7,800
12 Customer Service 750 750 750
13 CIP 1,061,812 1,061,812 1,061,812
14 Capital Outlay - - -
15 Existing Bond DS - - -
16 New Bond DS - - -
17 Non-Rate Rev & Fund Balance (2,015,811) (2,015,811) (2,015,811) 18 Total $ 757,303 $ 757,303 $ 757,303
Total Units of Service 6,020
Units EDUs/Monthly
Cost Per Unit $ 10.48
Units EDUs/Monthly
C - 4
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER COST OF SERVICE BY COST COMPONENT AND CUSTOMER CLASS - TEST YEAR FY 2026 [A] [B]
Sewer Total
Single Residential
1 Single Residential $ 474,863 $ 474,863
2 Single Apartment 126 126
3 Sub-Total Single Residential $ 474,989 $ 474,989
Multiple Residential
4 Apt/Condos per Unit $ 67,676 $ 67,676
5 Multiple Residential Units 2,642 2,642
6 Multiple Units 70,192 70,192
7 Sub-Total Multiple Residential $ 140,509 $ 140,509
Mobile Home Park
8 12 units x 8.22 $ 1,509 $ 1,509
9 76 units x 8.22 9,560 9,560
10 MH/RV Parks per Unit 59,751 59,751
11 Sub-Total Mobile Home Park $ 70,821 $ 70,821
Commercial
12 Commercial - 1 Unit $ 7,925 $ 7,925
13 Commercial per Unit 5,157 5,157
14 Commercial/Industrial 19,177 19,177
15 Sub-Total Commercial $ 32,259 $ 32,259
Church
16 Church per Unit $ 252 $ 252
17 Church - Per Water Use 4,356 4,356
18 Sub-Total Church $ 4,607 $ 4,607
Hotel/Motel
19 Hotel/Motel - 1 Unit $ 126 $ 126
20 Hotel/Motel per Unit 6,793 6,793
21 Sub-Total Hotel/Motel $ 6,919 $ 6,919
Line No: Description
C - 5
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER COST OF SERVICE BY COST COMPONENT AND CUSTOMER CLASS - TEST YEAR FY 2026 [A] [B]
Sewer Total
Line No: Description
Restaurant
22 Restaurant - Per Water Use $ 1,917 $ 1,917
23 Sub-Total Restaurant $ 1,917 $ 1,917
School
24 Park Hill Elementary $ 126 $ 126
25 School - Per Water Use 25,157 25,157
26 Sub-Total School $ 25,283 $ 25,283
27 Total $ 757,303 $ 757,303
C - 6
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER RATE CALCULATION - TEST YEAR FY 2026
[A] [B] [C] [D] [E] [F] [G] [H] [I] [J]
Fixed Rate
Costs
Monthly
Dwelling
Units
Proposed
Monthly
Fixed Fee
Existing
Monthly
Fixed Fee
Monthly
Fixed Fee
Difference
Volumetric
Rate Costs
Billable
Annual
Volume
(CCF)
Proposed
Volumetric
Rate
Existing
Volumetric
Rate
Volumetric
Rate
Difference
Single Residential
1 Single Residential $ 474,863 3,775 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 2 Single Apartment 126 1 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Multiple Residential
3 Apt/Condos per Unit $ 67,676 538 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 4 Multiple Residential Units 2,642 21 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 5 Multiple Units 70,192 558 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Mobile Home Park
6 12 units x 8.22 $ 1,509 12 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 7 76 units x 8.22 9,560 76 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 8 MH/RV Parks per Unit 59,751 475 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Commercial
9 Commercial - 1 Unit $ 7,925 63 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 10 Commercial per Unit 5,157 41 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 11 Commercial/Industrial N/A N/A N/A N/A N/A 19,177 20,123 $ 0.95 $ 0.75 $ 0.20 Church
12 Church per Unit $ 252 2 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 13 Church - Per Water Use N/A N/A N/A N/A N/A 4,356 4,571 $ 0.95 $ 0.75 $ 0.20 Hotel/Motel
14 Hotel/Motel - 1 Unit $ 126 1 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 15 Hotel/Motel per Unit 6,793 54 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Restaurant
16 Restaurant - Per Water Use N/A N/A N/A N/A N/A 1,917 2,012 $ 0.95 $ 0.75 $ 0.20 School
17 Park Hill Elementary $ 126 1 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 18 School - Per Water Use N/A N/A N/A N/A N/A 25,157 26,399 $ 0.95 $ 0.75 $ 0.20 19 Total $ 706,697 5,618 $ 50,606 53,104
Line No: Customer Class
Non-Residential Classes
Residential Classes
C - 7
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER REVENUE VS COST OF SERVICE BY CUSTOMER CLASS CHECK - TEST YEAR FY 2026 [A] [B] [C]=[A]*[B]*12 [D] [E] [F]=[D]*[E] [G]=[C]+[F] [H] [I]=[H]-[G] Monthly
Dwelling
Units
Proposed
Monthly
Fixed Fee
Total Fixed
Fee Revenue
Billable
Annual
Volume (CCF)
Proposed
Volumetric
Rate
Total
Volumetric
Rate
Revenues
Total
Calculated
Revenues
Total COS
Revenues
Difference
Calc vs COS
Single Residential
1 Single Residential 3,775 $ 10.48 $ 474,863 N/A N/A N/A $ 474,863 $ 474,863 $ - 2 Single Apartment 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - Multiple Residential
3 Apt/Condos per Unit 538 $ 10.48 $ 67,676 N/A N/A N/A $ 67,676 $ 67,676 $ - 4 Multiple Residential Units 21 $ 10.48 $ 2,642 N/A N/A N/A $ 2,642 $ 2,642 $ - 5 Multiple Units 558 $ 10.48 $ 70,192 N/A N/A N/A $ 70,192 $ 70,192 $ - Mobile Home Park
6 12 units x 8.22 12 $ 10.48 $ 1,509 N/A N/A N/A $ 1,509 $ 1,509 $ - 7 76 units x 8.22 76 $ 10.48 $ 9,560 N/A N/A N/A $ 9,560 $ 9,560 $ - 8 MH/RV Parks per Unit 475 $ 10.48 $ 59,751 N/A N/A N/A $ 59,751 $ 59,751 $ - Commercial
9 Commercial - 1 Unit 63 $ 10.48 $ 7,925 N/A N/A N/A $ 7,925 $ 7,925 $ - 10 Commercial per Unit 41 $ 10.48 $ 5,157 N/A N/A N/A $ 5,157 $ 5,157 $ - 11 Commercial/Industrial 152 N/A N/A 20,123 $ 0.95 $ 19,177 $ 19,177 $ 19,177 $ - Church
12 Church per Unit 2 $ 10.48 $ 252 N/A N/A N/A $ 252 $ 252 $ - 13 Church - per water use 35 N/A N/A 4,571 $ 0.95 $ 4,356 $ 4,356 $ 4,356 $ - Hotel/Motel
14 Hotel/Motel - 1 Unit 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - 15 Hotel/Motel per Unit 54 $ 10.48 $ 6,793 N/A N/A N/A $ 6,793 $ 6,793 $ - Restaurant
16 Restaurant - per water use 15 N/A N/A 2,012 $ 0.95 $ 1,917 $ 1,917 $ 1,917 $ - School
17 Park Hill Elementary 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - 18 School - per water use 200 N/A N/A 26,399 $ 0.95 $ 25,157 $ 25,157 $ 25,157 $ - 19 Total 6,020 $ 706,697 53,104 $ 50,606 $ 757,303 $ 757,303 $ - Line
No:
Customer Class
C - 8
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix D 10-Year Financial Projections
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - WATER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
REVENUES
Operating Revenues
1 Water Service Charges $ 9,454,184 $ 11,584,621 $ 14,740,837 $ 16,163,493 $ 16,806,088 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 Other Operating Revenues
2 Water Connection Fees $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 3 Sewer Connection Fees - - - - - - - - - -
4 Miscellaneous Revenues 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Non-Operating Revenues
5 Interest 177,500 177,500 177,500 177,500 177,500 177,500 177,500 177,500 177,500 177,500 6 Total Revenues $ 9,684,184 $ 11,814,621 $ 14,970,837 $ 16,393,493 $ 17,036,088 $ 17,284,456 $ 17,284,456 $ 17,284,456 $ 17,284,456 $ 17,284,456 Current Expenses
7 Water Fund $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 $ 9,275,543 $ 9,826,606 $ 10,419,415 $ 11,057,641 $ 11,745,297 8 Sewer Fund - - - - - - - - - -
9 Total Current Expenses $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 $ 9,275,543 $ 9,826,606 $ 10,419,415 $ 11,057,641 $ 11,745,297 10 Income Available for Debt Service $ 2,137,768 $ 4,388,744 $ 7,130,109 $ 8,107,952 $ 8,273,212 $ 8,008,913 $ 7,457,850 $ 6,865,041 $ 6,226,815 $ 5,539,159
DEBT SERVICE
Parity Indebtedness
11 2015 Installment Sale Agreement $ 251,585 $ 264,660 $ 278,462 $ 293,031 $ 308,410 $ 324,643 $ 341,776 $ 359,859 $ 378,946 $ 399,092 12 2025 Installment Purchase Agreement 678,128 677,715 678,429 677,561 678,109 677,988 678,197 677,758 677,584 677,676 Total Parity Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 13 Total Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 14 Net Results of Operations $ 1,208,055 $ 3,446,369 $ 6,173,218 $ 7,137,360 $ 7,286,693 $ 7,006,282 $ 6,437,877 $ 5,827,424 $ 5,170,285 $ 4,462,391
DEBT SERVICE COVERAGE
Debt Service Coverage - Total Indebtedness
Excluding RSF
15 Calculated 2.30 4.66 7.45 8.35 8.39 7.99 7.31 6.62 5.89 5.14 16 Targeted 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 17 Required 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 D - 1
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - WATER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 18 Capital Outlay $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 19 Transfers Out - - - - - - - - - -
20 Transfers In - - - - - - - - - -
21 Net Results $ 1,208,055 $ 3,446,369 $ 6,173,218 $ 7,137,360 $ 7,286,693 $ 7,006,282 $ 6,437,877 $ 5,827,424 $ 5,170,285 $ 4,462,391
RESERVE FUND BALANCE ACTIVITY
Operating Fund - Water
22 Beginning Fund Balance $ 3,447,802 $ 2,481,013 $ 2,441,384 $ 2,577,774 $ 2,724,013 $ 2,880,946 $ 3,049,494 $ 3,230,665 $ 3,425,561 $ 3,635,389 23 Deposit/(Withdrawal) from Operations 1,208,055 3,446,369 6,173,218 7,137,360 7,286,693 7,006,282 6,437,877 5,827,424 5,170,285 4,462,391 24 Transfer from/(to) Capital Reserve Fund (2,124,844) (3,435,998) (5,986,829) (6,941,120) (7,079,761) (6,787,734) (6,206,706) (5,582,528) (4,910,457) (4,186,312) 25 Transfer to Capital Fund - Water Capital Imp. (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) 26 Ending Fund Balance $ 2,481,013 $ 2,441,384 $ 2,577,774 $ 2,724,013 $ 2,880,946 $ 3,049,494 $ 3,230,665 $ 3,425,561 $ 3,635,389 $ 3,861,468 27 Targeted Fund Balance $ 2,481,013 $ 2,441,384 $ 2,577,774 $ 2,724,013 $ 2,880,946 $ 3,049,494 $ 3,230,665 $ 3,425,561 $ 3,635,389 $ 3,861,468 28 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
29 Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 30 Targeted Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 Capital Fund - Water
31 Beginning Fund Balance $ 1,097,113 $ 1,271,957 $ 505,455 $ 864,408 $ 794,016 $ 2,028,571 $ 5,675,600 $ 8,247,042 $ 11,346,789 $ 14,238,808 32 Transfer from/(to) Operating Fund 2,124,844 3,435,998 5,986,829 6,941,120 7,079,761 6,787,734 6,206,706 5,582,528 4,910,457 4,186,312 33 Water Capital Improvement Revenue 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 34 Cash Funded Capital Projects (2,000,000) (4,252,500) (5,677,875) (7,061,513) (5,895,206) (3,190,704) (3,685,264) (2,532,781) (2,068,438) (2,326,992) 35 Ending Fund Balance $ 1,271,957 $ 505,455 $ 864,408 $ 794,016 $ 2,028,571 $ 5,675,600 $ 8,247,042 $ 11,346,789 $ 14,238,808 $ 16,148,129 Water Enterprise Reserves
36 Beginning Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 37 Revenues Toward Debt Service Payment 929,713 942,375 956,891 970,592 986,519 1,002,631 1,019,973 1,037,617 1,056,530 1,076,768 38 Annual Debt Service Payment (929,713) (942,375) (956,891) (970,592) (986,519) (1,002,631) (1,019,973) (1,037,617) (1,056,530) (1,076,768) 39 Ending Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 40 Total Fund Balance - Water $ 4,902,589 $ 4,096,458 $ 4,591,801 $ 4,667,648 $ 6,059,135 $ 9,874,713 $ 12,627,326 $ 15,921,969 $ 19,023,816 $ 21,159,215 D - 2
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - SEWER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
REVENUES
Operating Revenues
1 Sewer Maintenance Fees $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 $ 1,485,726 $ 1,530,503 $ 1,576,719 $ 1,624,037 $ 1,672,461 2 EMWD Sewer Maintenance Fees $ 1,487,217 $ 1,225,810 $ 1,227,921 $ 1,230,185 $ 1,232,449 $ 1,234,712 $ 1,236,976 $ 1,239,240 $ 1,241,504 $ 1,243,767 Other Operating Revenues
3 Water Connection Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 4 Sewer Connection Fees 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 5 Miscellaneous Revenues - - - - - - - - - -
Other Non-Operating Revenues
6 Interest 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 7 Total Revenues $ 2,338,270 $ 2,209,341 $ 2,522,741 $ 2,724,409 $ 2,768,585 $ 2,814,188 $ 2,861,229 $ 2,909,709 $ 2,959,291 $ 3,009,978 Current Expenses
8 Water Fund $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
9 Sewer Fund 1,711,302 1,779,913 1,851,557 1,926,384 2,004,555 2,086,230 2,171,587 2,260,811 2,354,097 2,451,654 10 Total Current Expenses $ 1,711,302 $ 1,779,913 $ 1,851,557 $ 1,926,384 $ 2,004,555 $ 2,086,230 $ 2,171,587 $ 2,260,811 $ 2,354,097 $ 2,451,654 11 Income Available for Debt Service $ 626,968 $ 429,428 $ 671,184 $ 798,025 $ 764,030 $ 727,958 $ 689,642 $ 648,898 $ 605,194 $ 558,324 12 Net Results of Operations $ 626,968 $ 429,428 $ 671,184 $ 798,025 $ 764,030 $ 727,958 $ 689,642 $ 648,898 $ 605,194 $ 558,324
DEBT SERVICE COVERAGE
Debt Service Coverage - Total Indebtedness
13 Calculated N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
14 Targeted 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 15 Required 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 16 Capital Outlay $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 17 Transfers Out - - - - - - - - - -
18 Transfers In - - - - - - - - - -
19 Net Results $ 626,968 $ 429,428 $ 671,184 $ 798,025 $ 764,030 $ 727,958 $ 689,642 $ 648,898 $ 605,194 $ 558,324 Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 D - 3
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - SEWER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30
RESERVE FUND BALANCE ACTIVITY
Operating Fund - Sewer
20 Beginning Fund Balance $ 1,932,985 $ 562,620 $ 585,177 $ 608,731 $ 633,332 $ 659,032 $ 685,884 $ 713,946 $ 743,280 $ 773,950 21 Deposit/(Withdrawal) from Operations 626,968 429,428 671,184 798,025 764,030 727,958 689,642 648,898 605,194 558,324 22 Transfer from/(to) Capital Reserve Fund (1,967,333) (376,871) (617,630) (743,424) (708,330) (671,106) (631,579) (589,564) (544,525) (496,250) 23 Transfer to Capital Fund - Sewer Connection Fee (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) 24 Ending Fund Balance $ 562,620 $ 585,177 $ 608,731 $ 633,332 $ 659,032 $ 685,884 $ 713,946 $ 743,280 $ 773,950 $ 806,023 25 Targeted Fund Balance $ 562,620 $ 585,177 $ 608,731 $ 633,332 $ 659,032 $ 685,884 $ 713,946 $ 743,280 $ 773,950 $ 806,023 26 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
27 Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 28 Targeted Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 Capital Fund - Sewer
29 Beginning Fund Balance $ 155,538 $ 1,091,059 $ 421,680 $ 325,121 $ 403,970 $ 656,097 $ 1,165,761 $ 1,559,321 $ 1,897,465 $ 2,176,499 30 Transfer from/(to) Operating Fund 1,967,333 376,871 617,630 743,424 708,330 671,106 631,579 589,564 544,525 496,250 31 Sewer Connection Fee Revenue 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 32 Cash Funded Capital Projects (1,061,812) (1,076,250) (744,188) (694,576) (486,203) (191,442) (268,019) (281,420) (295,491) (325,779) 33 Ending Fund Balance $ 1,091,059 $ 421,680 $ 325,121 $ 403,970 $ 656,097 $ 1,165,761 $ 1,559,321 $ 1,897,465 $ 2,176,499 $ 2,376,970 34 Total Fund Balance - Sewer $ 1,653,678 $ 1,006,856 $ 933,852 $ 1,037,301 $ 1,315,128 $ 1,851,644 $ 2,273,267 $ 2,640,745 $ 2,950,448 $ 3,182,993 D - 4
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - COMBINED SYSTEM
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
REVENUES
Operating Revenues
1 Water Service Charges $ 9,454,184 $ 11,584,621 $ 14,740,837 $ 16,163,493 $ 16,806,088 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 2 Sewer Maintenance Fees $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 $ 1,485,726 $ 1,530,503 $ 1,576,719 $ 1,624,037 $ 1,672,461 3 EMWD Sewer Maintenance Fees $ 1,487,217 $ 1,225,810 $ 1,227,921 $ 1,230,185 $ 1,232,449 $ 1,234,712 $ 1,236,976 $ 1,239,240 $ 1,241,504 $ 1,243,767 Other Operating Revenues
4 Water Connection Fees $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 5 Sewer Connection Fees 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 6 Miscellaneous Revenues 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Non-Operating Revenues
7 Interest $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 8 Total Revenues $ 12,022,454 $ 14,023,962 $ 17,493,578 $ 19,117,902 $ 19,804,673 $ 20,098,644 $ 20,145,685 $ 20,194,165 $ 20,243,747 $ 20,294,434 Current Expenses
9 Water Fund $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 $ 9,275,543 $ 9,826,606 $ 10,419,415 $ 11,057,641 $ 11,745,297 10 Sewer Fund 1,711,302 1,779,913 1,851,557 1,926,384 2,004,555 2,086,230 2,171,587 2,260,811 2,354,097 2,451,654 11 Total Current Expenses $ 9,257,718 $ 9,205,790 $ 9,692,285 $ 10,211,925 $ 10,767,431 $ 11,361,773 $ 11,998,193 $ 12,680,226 $ 13,411,738 $ 14,196,951 12 Income Available for Debt Service $ 2,764,736 $ 4,818,172 $ 7,801,293 $ 8,905,977 $ 9,037,242 $ 8,736,871 $ 8,147,492 $ 7,513,939 $ 6,832,009 $ 6,097,483
DEBT SERVICE
Parity Indebtedness
13 2015 Installment Sale Agreement $ 251,585 $ 264,660 $ 278,462 $ 293,031 $ 308,410 $ 324,643 $ 341,776 $ 359,859 $ 378,946 $ 399,092 14 2025 Installment Purchase Agreement 678,128 677,715 678,429 677,561 678,109 677,988 678,197 677,758 677,584 677,676 Total Parity Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 15 Total Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 16 Net Results of Operations $ 1,835,023 $ 3,875,797 $ 6,844,402 $ 7,935,385 $ 8,050,723 $ 7,734,240 $ 7,127,519 $ 6,476,322 $ 5,775,479 $ 5,020,715
DEBT SERVICE COVERAGE
Debt Service Coverage - Total Indebtedness
17 Calculated 2.97 5.11 8.15 9.18 9.16 8.71 7.99 7.24 6.47 5.66 18 Targeted 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 19 Required 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 D - 5
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - COMBINED SYSTEM
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 20 Capital Outlay $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 21 Transfers Out - - - - - - - - - -
22 Transfers In - - - - - - - - - -
23 Net Results $ 1,835,023 $ 3,875,797 $ 6,844,402 $ 7,935,385 $ 8,050,723 $ 7,734,240 $ 7,127,519 $ 6,476,322 $ 5,775,479 $ 5,020,715
RESERVE FUND BALANCE ACTIVITY
Operating Fund - Combined System
24 Beginning Fund Balance $ 5,380,787 $ 3,043,633 $ 3,026,561 $ 3,186,505 $ 3,357,345 $ 3,539,977 $ 3,735,377 $ 3,944,611 $ 4,168,841 $ 4,409,339 25 Deposit/(Withdrawal) from Operations 1,835,023 3,875,797 6,844,402 7,935,385 8,050,723 7,734,240 7,127,519 6,476,322 5,775,479 5,020,715 26 Transfer from/(to) Capital Reserve Fund (4,092,177) (3,812,869) (6,604,458) (7,684,544) (7,788,091) (7,458,840) (6,838,285) (6,172,092) (5,454,982) (4,682,563) 27 Transfer to Capital Fund - Water Capital Imp. (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) 28 Ending Fund Balance $ 3,043,633 $ 3,026,561 $ 3,186,505 $ 3,357,345 $ 3,539,977 $ 3,735,377 $ 3,944,611 $ 4,168,841 $ 4,409,339 $ 4,667,491 29 Targeted Fund Balance $ 3,043,633 $ 3,026,561 $ 3,186,505 $ 3,357,345 $ 3,539,977 $ 3,735,377 $ 3,944,611 $ 4,168,841 $ 4,409,339 $ 4,667,491 30 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
31 Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 32 Targeted Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 Capital Fund - Combined System
33 Beginning Fund Balance $ 1,252,650 $ 2,363,015 $ 927,134 $ 1,189,530 $ 1,197,985 $ 2,684,667 $ 6,841,361 $ 9,806,363 $ 13,244,254 $ 16,415,307 34 Transfer from/(to) Operating Fund 4,092,177 3,812,869 6,604,458 7,684,544 7,788,091 7,458,840 6,838,285 6,172,092 5,454,982 4,682,563 35 Water Capital Improvement Revenue 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 36 Sewer Connection Fee Revenue 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 37 Cash Funded Capital Projects (3,061,812) (5,328,750) (6,422,063) (7,756,089) (6,381,409) (3,382,146) (3,953,283) (2,814,201) (2,363,929) (2,652,771) 38 Ending Fund Balance $ 2,363,015 $ 927,134 $ 1,189,530 $ 1,197,985 $ 2,684,667 $ 6,841,361 $ 9,806,363 $ 13,244,254 $ 16,415,307 $ 18,525,099 39 Variance $ 916,081 $ (554,526) $ (327,690) $ (355,648) $ 1,093,747 $ 5,212,258 $ 8,138,162 $ 11,536,016 $ 14,666,071 $ 16,733,881 Water Enterprise Reserves
40 Beginning Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 41 Revenues Toward Debt Service Payment 929,713 942,375 956,891 970,592 986,519 1,002,631 1,019,973 1,037,617 1,056,530 1,076,768 42 Annual Debt Service Payment (929,713) (942,375) (956,891) (970,592) (986,519) (1,002,631) (1,019,973) (1,037,617) (1,056,530) (1,076,768) 43 Ending Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 44 Total Fund Balance - Combined System $ 6,556,267 $ 5,103,314 $ 5,525,653 $ 5,704,949 $ 7,374,263 $ 11,726,357 $ 14,900,593 $ 18,562,714 $ 21,974,264 $ 24,342,208 D - 6
27368 Via Industria, Suite 200
Temecula, CA 92590
800.755.6864 | Fax: 888.326.6864
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NOTICE OF PUBLIC HEARING REGARDING
PROPOSED CHANGES TO WATER RATES
Hearing Date & Time: August 4, 2026, 6:30 PM
Hearing Location: San Jacinto Community Center
625 S. Pico Avenue, San Jacinto, CA 92583
Why are you receiving this notice?
The City of San Jacinto (City) is mailing this notice to you because you are a water customer, or record owner of property, that receives water service from the City. This notice is being provided pursuant to Article XIII D of the California Constitution (commonly referred to as “Proposition 218”), which requires the City to notify property owners and customers of proposed changes to property-related fees, including water service charges. This notice describes proposed changes to the City’s water rates and provides information regarding the Public Hearing at which the City Council will consider the adoption of the proposed rates. The Public Hearing will be held on August 4, 2026, at 6:30 PM, or as soon thereafter as the matter may be heard, at the San Jacinto Community Center, 625 S. Pico Avenue, San Jacinto, California 92583. If adopted, the proposed rates for water service will be in effect for service provided on and after January 1, 2027.
What do water rates fund?
The City of San Jacinto operates and maintains a water utility system that provides water service to residential, commercial, industrial, institutional, and other customers throughout the City’s water service area. The City owns and operates a water distribution system serving a portion of the City of San Jacinto within approximately four square miles in the southwesterly portion of Riverside County. The City’s service area is located near the base of the San Jacinto Mountains and is generally bounded by the City of Beaumont to the north, the City of Hemet to the south, and the City of Moreno Valley to the west.
The San Jacinto Basin covers approximately 60 square miles and serves as a natural groundwater storage reservoir and filtration system supplying water to the region. The basin is recharged through rainfall, surface runoff from surrounding mountains and hills, return flows, and groundwater replenishment activities utilizing imported water supplies.
The City’s water distribution system supports both domestic water demands and emergency fire flow protection and must be maintained to ensure adequate system reliability, operational flexibility, water quality, and water pressure throughout varying demand conditions. The City currently provides water service to approximately 4,666 customers within its service area and is projected to continue growing over the long-term planning horizon. Water rates are the primary source of revenue used to fund the operation, maintenance, repair, rehabilitation, replacement, and improvement of the City’s water utility infrastructure and facilities. Water rate revenues support routine system operations, emergency repairs, water quality monitoring and testing, regulatory compliance activities, administration, reserve funding, and capital improvement projects necessary to maintain reliable water service for current and future customers.
The City has caused to be prepared a comprehensive water rate study to evaluate the current and projected financial condition of the water utility, assess the costs necessary to provide reliable water service, and determine the funding needed to support operations, maintenance, capital improvements, and other utility obligations over the next five years. The study results in a recommended financial plan designed to ensure the utility can meet its projected financial obligations, maintain safe and efficient operations, and preserve adequate reserves for cash flow management, emergencies, and unforeseen system needs. Periodically updating water rates to reflect the actual cost of providing reliable, high-quality water service is essential to maintaining the long-term financial stability and sustainability of the utility. The water rates were designed so that revenues from proposed rates do not exceed the amount required to provide the service, nor will rate revenue be used for purposes other than those for which they are imposed.
Why are water rate changes needed?
The City has evaluated the financial needs of the water utility based on the results of the water rate study and financial planning process completed by an independent consultant. The purpose of the study is to evaluate the current and projected costs of providing water service and determine the level of revenue necessary to support ongoing operations, infrastructure maintenance, capital improvements, regulatory compliance, and financial stability over the planning period.
The City has experienced significant increases in costs associated with operating and maintaining the water utility system, including increases in labor, materials, equipment, chemicals, energy, construction, and contracted services.
In addition, portions of the water system infrastructure require ongoing rehabilitation, replacement, and reinvestment to maintain reliable service and reduce the risk of service interruptions or system failures.
The proposed rate adjustments are intended to provide sufficient revenues to support the continued operation and maintenance of the water utility system, fund necessary capital improvements, fund debt service obligations, maintain prudent reserve levels, and ensure the financial stability of the utility. The proposed rates are based on a cost-of-service methodology intended to allocate costs proportionally among customer classes based on the demand and usage characteristics associated with providing service.
The amount of the proposed rates imposed on any parcel or person as an incident of property ownership will not exceed the proportional cost of the service attributable to that parcel, and no charge will be imposed for service unless the service is actually used by, or immediately available to, the property owner or customer.
How are water rates determined and how do they work?
To develop rates that generate sufficient revenues to meet the fiscal and operational needs of the water utility, the City evaluated projected revenues and expenditures over a multi-year planning period. Revenue requirements include costs associated with operations, maintenance, repair and replacement of aging infrastructure, capital improvements, debt service obligations, administrative support necessary to provide reliable water service, and funding of designated reserves.
Maintaining appropriate reserves is critical to the ability of the City to serve its customers, manage cash flow fluctuations, and respond to unforeseen and unpredictable costs. The reserves may only be used to fund costs associated with the water system.
The proposed water rates are designed to recover the cost of providing service in a fair and equitable manner consistent with industry standards and applicable legal requirements. The rates are structured to ensure that customers pay an amount proportional to the cost of serving them based on factors such as meter size, system demand, and water usage characteristics.
The City is proposing to implement the proposed water rates as a series of annual adjustments beginning January 1, 2027, and then each January 1 thereafter through and including January 1, 2031. The following sections summarize the proposed rates, which will go into effect and remain in effect unless modified by future City Council action.
Proposed Monthly Water Rates – January 1, 2027 through January 1, 2031 The City is not proposing changes to the existing rate structure but instead is proposing increases to the underlying rates and charges. Proposed water rates consist of 1) a monthly fixed charge based on meter size; 2) a volumetric charge based on metered water consumption per 100 cubic feet (100 cubic feet = 1 unit of water = 748 gallons) for all customers; 3) a fire service monthly fixed charge imposed on customers with dedicated fire service meters; and 4) a Water Adjudication Fee which is an additional volumetric charge imposed on all customers based on metered water consumption per 100 cubic feet of water.
The monthly fixed charge recovers costs associated with maintaining water system infrastructure and ensuring water service is available to customers regardless of usage. The monthly fixed charge also recovers the fixed costs that do not vary based on water service such as customer billing and collection activities. Customers with dedicated fire service meters are also charged a monthly fixed charge for fire service. The fire service monthly fixed charge is in addition to the regular monthly fixed charge and is used to fund the costs associated with providing fire flow capacity and maintaining facilities necessary to support fire protection requirements and demands on the water system. The volumetric charge recovers costs associated with producing, treating, pumping, and distributing water based on actual consumption. Consistent with the City's existing rate structure, all residential customers are charged based on a two-tier volumetric rate structure which varies based on the volume of water consumed per billing cycle. All non-residential customers are charged a uniform volumetric rate where the rate per unit of water remains constant regardless of the volume consumed.
Additionally, all water service customers are charged a Water Adjudication Fee to recover costs associated with groundwater basin management and replenishment activities required under the Hemet-San Jacinto Groundwater Management Program.
The Water Adjudication Fee is charged as a uniform volumetric rate based on water consumption and is charged in addition to the monthly fixed charge and volumetric charges described above. The rate structures were designed so that each customer will be charged an amount that represents their proportional share of the City’s cost of serving them, based on their demand and usage characteristics.
What is the Impact on your water bill?
Per the proposed rates effective January 1, 2027, the water bill for a typical single-family home using 1,100 cubic feet of water per monthly billing period would increase from $59.54 currently, to $92.53 per monthly billing period.
How do you file a protest or participate in the public hearing? The City will consider the new water rates at a Public Hearing on Tuesday, August 4, 2026, at 6:30 PM, or as soon thereafter as the matter may be heard, at the San Jacinto Community Center, 625 S. Pico Avenue, San Jacinto, California 92583. At the Public Hearing, the City Council will consider all oral comments and written protests regarding the proposed rates. Any owner or customer of record of a parcel subject to the proposed rates may submit a written protest against the proposed rate revisions. If written protests are filed by a majority of the affected parcels, the proposed rates will not be adopted. If you do not object to the proposed rate revisions, you do not need to take any action. 2027 2028 2029 2030 2031
Monthly Fixed Charge:
All Customers
5/8 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49 3/4 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49
1.0 Inch $ 34.82 $ 86.19 $ 124.98 $ 143.72 $ 150.91 $ 155.44
1.5 Inch $ 59.68 $ 172.06 $ 249.50 $ 286.92 $ 301.27 $ 310.31
2.0 Inch $ 89.51 $ 275.11 $ 398.91 $ 458.75 $ 481.69 $ 496.14
3.0 Inch $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.68 $ 929.76
4.0 Inch $ 323.13 $ 859.05 $ 1,245.63 $ 1,432.47 $ 1,504.09 $ 1,549.22
6.0 Inch $ 656.17 $ 1,717.79 $ 2,490.79 $ 2,864.41 $ 3,007.63 $ 3,097.86
8.0 Inch $ 1,202.94 $ 2,748.28 $ 3,985.00 $ 4,582.75 $ 4,811.89 $ 4,956.24 Fire Service
5/8 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
3/4 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
1.0 Inch N/A $ 4.76 $ 6.90 $ 7.94 $ 8.34 $ 8.59
1.5 Inch N/A $ 9.21 $ 13.35 $ 15.35 $ 16.12 $ 16.60
2.0 Inch N/A $ 14.54 $ 21.08 $ 24.24 $ 25.46 $ 26.22
3.0 Inch N/A $ 26.98 $ 39.13 $ 44.99 $ 47.24 $ 48.66
4.0 Inch $ 41.18 $ 44.76 $ 64.90 $ 74.64 $ 78.37 $ 80.72
6.0 Inch $ 119.60 $ 89.20 $ 129.35 $ 148.75 $ 156.19 $ 160.87
8.0 Inch $ 254.80 $ 142.54 $ 206.68 $ 237.68 $ 249.56 $ 257.05
10.0 Inch $ 458.23 $ 204.76 $ 296.90 $ 341.44 $ 358.51 $ 369.26
12.0 Inch $ 740.17 $ 382.53 $ 554.67 $ 637.88 $ 669.77 $ 689.86 Construction Meter
Construction Meter $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.67 $ 929.75 Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.15 $ 3.70 $ 5.36 $ 6.17 $ 6.48 $ 6.67 Tier 2 (11+ Units) $ 3.90 $ 4.49 $ 6.51 $ 7.49 $ 7.86 $ 8.10 All Non-Residential Customers
All Flow $ 3.73 $ 4.26 $ 6.18 $ 7.11 $ 7.46 $ 7.69
Water Adjudication Fee
All Flow $ 1.77 $ 1.10 $ 1.60 $ 1.83 $ 1.93 $ 1.98
Existing
Rates Description Projected For Fiscal Year Beginning January 1 Written protests must include the following: 1) a statement indicating that the identified property owner or customer of record is in opposition to the proposed water rate changes; 2) the street address or Assessor's Parcel Number (APN) for the parcel(s) with respect to which the protest is made; and 3) the name and signature of the owner or customer.
Written protests must be mailed, or hand delivered, to the City Clerk at 595 S. San Jacinto Avenue, San Jacinto, California 92583, and received prior to the start of the public hearing on August 4, 2026, or hand delivered to the City Clerk at the Public Hearing on August 4, 2026, before the conclusion of the public comment portion of the Public Hearing. Protests submitted via e-mail or other electronic means will not be accepted. For any written protest, whether mailed or submitted in person to the City Clerk, please identify on the front of the envelope that the enclosed protest is for the Public Hearing on the Proposed Rate Changes – Water Rates.
The City Council will consider all written and oral protests related to the proposed rate changes at the Public Hearing. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest. Upon the conclusion of the Public Hearing, there will be no more written protests accepted, and no more testimony taken, and the City Council will consider adoption of the proposed rates described in this notice. If written protests, as outlined above, are not presented by a majority of property owners or customers of record, the City Council will be authorized to adopt the proposed rates. While both property owners and customers of record may submit written protests, only one protest will be counted for each parcel. If adopted, the rates for water service will be in effect beginning January 1, 2027 and increase each January 1, through and including January 1, 2031 as provided above.
Exhaustion of Administrative Remedies – Written Legal Objection Procedures Pursuant to California Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding alleging that the proposed water rates do not comply with Proposition 218 unless that person or entity has submitted a written legal objection to the proposed rates. This is known as an Exhaustion of Administrative Remedies requirement and is separate from the Proposition 218 majority Protest process described above.
Any person or entity that wishes to challenge the proposed water rates must first file a written legal objection that specifies the grounds for alleging the City’s noncompliance with the law as described below. Written legal objections must be received by the City no later than 5:00 p.m., Monday, August 3, 2026.
Information related to the written basis for the proposed water rate adjustments can be found on the City’s website at www.sanjacintoca.gov. You have the right to request that the City mail the written basis for the proposed water rate adjustments directly to you. To request that the written basis be mailed, please call Water Billing at 951-487-7330, Option 1.
Legal objections will only be considered valid if they meet the following procedural and substantive requirements:
• Legal objections must be in writing.
• The City Clerk must receive your written legal objections no later than 5:00 p.m., Monday, August 3, 2026. • Written legal objections must be mailed or hand delivered to the City Clerk’s office at 595 S. San Jacinto Avenue, California 92583.
• Legal objections must include the following information:
o Objectors name, parcel number and/or service address, including a return mailing or email address for City responses to your written objection, and signature.
o A statement that your communication constitutes a legal objection. o A description of the grounds for alleging the City’s noncompliance with the law, with sufficient specificity to allow the City to determine whether any changes to the proposed water rates are required. A statement that the proposed water rates are too high, or that the proposed water rates violate Proposition 218, without an explanation as to the basis of your claim, will be insufficient to constitute a legal objection.
A written protest will not constitute a valid legal objection unless it meets the requirements set forth above. Failure to submit a written legal objection prior to 5:00 p.m. on August 3, 2026, or to meet the requirements set forth above, will bar any right to challenge the proposed water rates through a legal proceeding.
In accordance with Government Code section 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fee or charge, commencing from the later of the effective date of the new rates or of the date of the final passage, adoption, or approval of the resolution adopting the new rates. 24438.00403\45253801.1
Resolution No. 4144
STATE OF CALIFORNIA ) RESOLUTION NO. 4144
COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
JACINTO, CALIFORNIA, ADOPTING FINDINGS AND
DETERMINATIONS RELATED TO THE PRESENTMENT OF
OBJECTIONS TO THE CITY’S PROPOSED WATER SERVICE FEES IN
COMPLIANCE WITH EXHAUSTION OF ADMINISTRATIVE REMEDIES
PROCEDURES PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTIONS 53759.1 AND 53759.2, AND TAKING OTHER ACTIONS
RELATED THERETO
WHEREAS, Section 6 of Article XIII D of the California Constitution (“Proposition 218”) and the Proposition 218 Omnibus Implementation Act (Government Code § 53750, et seq.) require that, prior to imposing any increase to the water service fees, the City of San Jacinto (the “City”) shall provide written notice by mail of: (1) the proposed increases to such water service fees to the record owner of each parcel upon which the water service fees are proposed for imposition (record owners); (2) the amount of the water service fees proposed to be imposed on each parcel; (3) the basis upon which the water service fees were calculated; (4) the reason for the water service fees; and (5) the date, time, and location of a public hearing (“Hearing”) on the proposed water service fees; and WHEREAS, pursuant to Proposition 218, such written notice is required to be provided to the record owners not less than forty-five days (45) prior to the Hearing on the proposed water service fees; and
WHEREAS, the City provided written notice (“Notice”) to record owners and to customers of record who are not the property owner (e.g., a tenant) in compliance and consistent with Proposition 218; and
WHEREAS, the Notice included a prominently displayed statement that contained the information that all written objections to the proposed water service fees must be submitted within the written objection period and that a failure to timely object in writing bars any right to challenge the proposed water service fees through a legal proceeding and that contained all substantive and procedural requirements for submitting an objection to the proposed water service fees; and
WHEREAS, the City established a written objection period with a deadline of 5:00 P.M. on August 3, 2026, to submit an objection; and
WHEREAS, the City made available to the public the proposed water service fees no less than 45 days prior to the deadline to submit an objection; and WHEREAS, the City posted on its internet website a written basis for the proposed water service fees and included a link to the internet website in the Notice; and 24438.00403\45253801.1
Resolution No. 4144
WHEREAS, the City mailed the written basis to any property owner upon request or, if no such requests were made, would have mailed the written basis to any property owner upon request; and
WHEREAS, the City provided at least 45 days for a property owner or customer of record (e.g., a tenant), to review the proposed water service fees and to timely submit a written objection to the proposed water service fees that specifies the grounds for alleging noncompliance; and
WHEREAS, the City considered and responded in writing, including the grounds for which a challenge is not resulting in amendments to the proposed water service fees, to any timely submitted written objections prior to the close of the Hearing; and WHEREAS, timely submitted written objections and agency responses were presented to the City Council for consideration prior to or during the Hearing; and WHEREAS, the City Council now desires to make findings and determinations related to the proposed water service fees.
NOW THEREFORE, BE IT RESOLVED, determined, and ordered by the City Council of the City of San Jacinto, California, as follows:
SECTION 1. The foregoing recitals are true and correct and are incorporated herein by this reference.
SECTION 2. The City Council has found and has determined that the written objections and the City’s responses do not warrant clarification to any proposed water service fee; no reduction in any proposed water service fee is warranted; no further review is needed before making a determination on whether clarification or reduction of the proposed water service fees is needed; and to proceed with the Hearing.
SECTION 3. The City Clerk shall certify to the adoption of this Resolution.
SECTION 4. This Resolution shall become effective immediately upon its adoption.
PASSED, APPROVED, and ADOPTED at a Regular Meeting of the City Council on the 4
th day of August, 2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
24438.00403\45253801.1
Resolution No. 4144
CITY OF SAN JACINTO:
_____________________________
Crystal Ruiz, Mayor
ATTEST:
_____________________________________
Julia Espinoza, City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
_____________________________________
Craig Hayes, City Attorney
24438.00403\45253801.1
Resolution No. 4144
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
CERTIFICATION
I, Julia Espinoza, duly appointed City Clerk of the City of San Jacinto, do hereby certify that the foregoing Resolution No. 4144 was duly passed, approved, and adopted at a Regular Meeting of the City Council of the City of San Jacinto on the 4 th day of August,
2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
WITNESS MY HAND AND OFFICIAL SEAL this 4
th day of August, 2026.
_________________________
Julia Espinoza, City Clerk
City of San Jacinto
24438.00403\45253800.1
Resolution No. 4145
STATE OF CALIFORNIA ) RESOLUTION NO. 4145
COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
JACINTO, CALIFORNIA, ADOPTING WATER SERVICE CHARGES,
FINDING THIS ACTION IS EXEMPT FROM CEQA PURSUANT TO
PUBLIC RESOURCES CODE SECTION 21080(b)(8), AND TAKING
CERTAIN ACTIONS RELATING THERETO
WHEREAS, the City of San Jacinto (the “City”) owns and operates a water utility system to provide water service to City customers; and
WHEREAS, the City has engaged an independent rate consultant to prepare the City of San Jacinto Water Rate Study, dated June 2026 (the “Rate Study”), which has been made publicly available on the City’s website and is on file in the City Clerk’s Office and incorporated herein by this reference, to analyze the costs of providing water service to City customers; and
WHEREAS, the Rate Study determined the City must increase its water service charges (“Water Charges”) in order to keep pace with the costs of providing water service; and
WHEREAS, the Water Charges include: 1) a monthly fixed charge based on the size of the meter serving the property; 2) a volumetric charge based on metered water consumption per 100 cubic feet (100 cubic feet = 748 gallons or 1 unit of water); 3) a fire service monthly fixed charge for customers with dedicated fire service meters; and 4) a water adjudication fee which is an additional uniform volumetric charge imposed on all customer classes based on metered consumption per 100 cubic feet of water; and WHEREAS, the monthly fixed charge recovers costs associated with maintaining water system infrastructure and ensuring water service is available to customers regardless of usage, as well as fixed costs that do not vary based on water service such as customer billing and collection activities; and
WHEREAS, the volumetric charge recovers costs associated with producing, treating, pumping, and distributing water based on actual consumption; the fire service monthly fixed charge is in addition to the regular monthly fixed charge and is used to fund the costs associated with providing fire flow capacity and maintaining facilities necessary to support fire protection requirements and demands on the water system; and
WHEREAS, the volumetric charge is imposed on residential customers based on a two-tier volumetric rate structure which varies based on the volume of water consumed per billing cycle; and
24438.00403\45253800.1
Resolution No. 4145
WHEREAS, for non-residential customers, the volumetric charge is uniform where the rate per unit of water remains constant regardless of the volume consumed; and
WHEREAS, the water adjudication fee recovers costs associated with groundwater basin management and replenishment activities required under the HemetSan Jacinto Groundwater Management Program; and WHEREAS, the rates for the Water Charges described above are included in Exhibit “A” attached hereto and were designed so that each customer will be charged an amount that represents their proportional share of the City’s cost of serving them, based on their demand and usage characteristics; and
WHEREAS, the City Council determined to hold a public hearing to consider the adoption of the increased Water Charges, and notices of the public hearing were mailed to the record owner of any parcel upon which the Water Charges are proposed for imposition, and any tenant who is directly liable for the payment of the Water Charges (i.e., a customer of record who is not a property owner); and WHEREAS, the notices were mailed not less than 45 days prior to the August 3, 2026 deadline for submitting valid legal objections to the proposed Water Charges; and WHEREAS, the City Council held a public hearing on August 4, 2026, to consider the proposed Water Charges, and at the public hearing the City Council considered the Rate Study, heard all oral testimony and considered all written materials and written protests concerning the adoption and imposition of, and the proposed adjustments and increases to the Water Charges; and
WHEREAS, at the close of the public hearing, the City did not receive written protests against the establishment and imposition of the proposed Water Charges from a majority of the parcels subject to the proposed Water Charges; and WHEREAS, the City Council is authorized and has determined to approve the proposed Water Charges and act accordingly on the matter.
NOW, THEREFORE, BE IT RESOLVED, determined, and ordered by the City Council of the City of San Jacinto, California, as follows:
SECTION 1. The foregoing recitals are true and correct and are incorporated herein by this reference.
SECTION 2. The City Council has evaluated and hereby approves the maximum rates for the Water Charges, and adopts such rates in accordance with the authority of Health and Safety Code section 5471 et seq. and all other applicable law. The City may impose the Water Charges up to the maximum amounts, and on the effective dates, set forth in Exhibit “A” attached hereto.
24438.00403\45253800.1
Resolution No. 4145
SECTION 3. In accordance with the California Environmental Quality Act (“CEQA”) and the CEQA Guidelines, the City Council has determined that the increases in the Water Charges are exempt from CEQA pursuant to Section 15378 and Section 15273 of the CEQA Guidelines and Public Resources Code section 21080(b)(8) because: (i) the increased charges are for the purpose of meeting operational and maintenance expenses of the aforementioned services; and (ii) the charges constitute the creation of a funding mechanism/other governmental fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The documents and materials that constitute the record of proceedings on which these findings have been based are located in the Office of the City Clerk, located at 595 S. San Jacinto Ave., San Jacinto, CA 92583. The custodian for these records is the City Clerk.
SECTION 4. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be unconstitutional or otherwise invalid by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution. The City Council hereby declares that it would have adopted the remainder of this Resolution, including each section, subsection, sentence, clause, phrase, or portion irrespective of the invalidity of any other article, section, subsection, sentence, clause, phrase, or portion.
SECTION 5. This Resolution shall take effect immediately, and that all resolutions, ordinances, or administrative actions by the City Council, or parts thereof that are inconsistent or in conflict with any provision of this Resolution are hereby superseded only to the extent of such inconsistency or conflict.
SECTION 6. The City Manager, or designee thereof, is authorized to take all actions necessary or convenient to effectuate the purposes of this Resolution.
PASSED, APPROVED, and ADOPTED at a Regular Meeting of the City Council on the 4
th day of August, 2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
24438.00403\45253800.1
Resolution No. 4145
CITY OF SAN JACINTO:
_____________________________
Crystal Ruiz, Mayor
ATTEST:
_____________________________________
Julia Espinoza, City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
_____________________________________
Craig Hayes, City Attorney
24438.00403\45253800.1
Resolution No. 4145
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
CERTIFICATION
I, Julia Espinoza, duly appointed City Clerk of the City of San Jacinto, do hereby certify that the foregoing Resolution No. 4145 was duly passed, approved, and adopted at a Regular Meeting of the City Council of the City of San Jacinto on the 4th day of August, 2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
WITNESS MY HAND AND OFFICIAL SEAL this 4th day of August, 2026. _________________________
Julia Espinoza, City Clerk
City of San Jacinto
24438.00403\45253800.1
Resolution No. 4145
EXHIBIT “A”
WATER CHARGES
2027 2028 2029 2030 2031
Monthly Fixed Charge:
All Customers
5/8 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49 3/4 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49
1.0 Inch $ 34.82 $ 86.19 $ 124.98 $ 143.72 $ 150.91 $ 155.44
1.5 Inch $ 59.68 $ 172.06 $ 249.50 $ 286.92 $ 301.27 $ 310.31
2.0 Inch $ 89.51 $ 275.11 $ 398.91 $ 458.75 $ 481.69 $ 496.14
3.0 Inch $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.68 $ 929.76
4.0 Inch $ 323.13 $ 859.05 $ 1,245.63 $ 1,432.47 $ 1,504.09 $ 1,549.22
6.0 Inch $ 656.17 $ 1,717.79 $ 2,490.79 $ 2,864.41 $ 3,007.63 $ 3,097.86
8.0 Inch $ 1,202.94 $ 2,748.28 $ 3,985.00 $ 4,582.75 $ 4,811.89 $ 4,956.24 Fire Service
5/8 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
3/4 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
1.0 Inch N/A $ 4.76 $ 6.90 $ 7.94 $ 8.34 $ 8.59
1.5 Inch N/A $ 9.21 $ 13.35 $ 15.35 $ 16.12 $ 16.60
2.0 Inch N/A $ 14.54 $ 21.08 $ 24.24 $ 25.46 $ 26.22
3.0 Inch N/A $ 26.98 $ 39.13 $ 44.99 $ 47.24 $ 48.66
4.0 Inch $ 41.18 $ 44.76 $ 64.90 $ 74.64 $ 78.37 $ 80.72
6.0 Inch $ 119.60 $ 89.20 $ 129.35 $ 148.75 $ 156.19 $ 160.87
8.0 Inch $ 254.80 $ 142.54 $ 206.68 $ 237.68 $ 249.56 $ 257.05
10.0 Inch $ 458.23 $ 204.76 $ 296.90 $ 341.44 $ 358.51 $ 369.26
12.0 Inch $ 740.17 $ 382.53 $ 554.67 $ 637.88 $ 669.77 $ 689.86 Construction Meter
Construction Meter $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.67 $ 929.75 Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.15 $ 3.70 $ 5.36 $ 6.17 $ 6.48 $ 6.67 Tier 2 (11+ Units) $ 3.90 $ 4.49 $ 6.51 $ 7.49 $ 7.86 $ 8.10 All Non-Residential Customers
All Flow $ 3.73 $ 4.26 $ 6.18 $ 7.11 $ 7.46 $ 7.69
Water Adjudication Fee
All Flow $ 1.77 $ 1.10 $ 1.60 $ 1.83 $ 1.93 $ 1.98
Existing
Rates
Description Projected For Fiscal Year Beginning January 1 August 4, 2026
TO: City Council
REQUESTED
BY:
Kimberly Ganimian, Finance Director
APPROVED
BY:
Travis Randel, Interim City Manager
SUBJECT:
Resolution Adopting a Schedule of Sewer Rate Adjustments Effective January 1, 2027 through and including January 1, 2031
RECOMMENDATION:
Staff Recommends that the City Council:
1. ADOPT Resolution No. 4146 Adopting Findings and Determinations Regarding Exhaustion of Administrative Remedies and to Proceed with Public Hearing;
2. CONDUCT a Public Hearing; and
3. ADOPT Resolution No. 4147 Adopting a Schedule of Sewer Rate Adjustments Effective January 1, 2027 through and including January 1, 2031 and Making CEQA Findings.
BACKGROUND:
The City of San Jacinto owns, operates, and maintains a wastewater collection system that provides sewer service to residential, commercial, industrial, institutional, and other customers throughout the City’s sewer service area. The wastewater utility system is critical infrastructure that protects public health, preserves environmental quality, and supports the continued operation and development of the community. The City operates its own wastewater collection system, which consists of approximately 178 miles of sewer mains ranging in size from 6 to 18 inches in diameter, together with manholes, service laterals, and related collection and conveyance facilities necessary to collect and transport wastewater generated by homes, businesses, schools, parks, and public facilities throughout the community. The wastewater collection system must be continuously maintained and operated to ensure reliable service, minimize the risk of sewer overflows and system failures, and comply with applicable environmental and regulatory requirements.
Wastewater collected within the City’s collection system is conveyed to the Eastern Municipal Water District (EMWD) regional wastewater system for treatment and disposal. The City relies exclusively on EMWD to convey and treat the City’s wastewater at the San Jacinto Valley Regional Water Reclamation Facility through a series of interconnections between the City’s collection facilities and EMWD’s regional system. Sewer rates fund the City’s share of costs associated with wastewater collection, conveyance, treatment, disposal, operations, maintenance, repair, rehabilitation, replacement, regulatory compliance, administration, and long-term capital improvements necessary to maintain reliable wastewater service.
Similar to the water system, the City has caused to be prepared a comprehensive sewer rate study to evaluate the current and projected financial condition of the sewer utility, assess the costs necessary to provide reliable sewer service, and determine the funding needed to support operations, maintenance, capital improvements, and other utility obligations over the next five years. Sewer rates are the primary source of revenue used to support the ongoing operation, maintenance, repair, rehabilitation, replacement, and improvement of the City’s wastewater utility infrastructure and facilities. Sewer rate revenues also support reserve funding, emergency response needs, and capital improvement projects necessary to maintain reliable wastewater service and protect public health and the environment. The sewer rates were designed so that revenues from proposed rates do not exceed the amount required to provide the service, nor will rate revenue be used for purposes other than those for which they are imposed.
DISCUSSION:
The City has evaluated the financial needs of the sewer utility based on the results of the sewer rate study and financial planning process completed by an independent consultant. The purpose of the study is to evaluate the current and projected costs of providing wastewater service and determine the funding necessary to support ongoing operations, maintenance, capital improvements, regulatory compliance, and financial stability over the planning period.
The City has experienced increasing costs associated with operating and maintaining the wastewater utility system, including increases in labor, materials, construction, treatment, disposal, energy, and regulatory compliance costs. In addition, portions of the wastewater collection system require ongoing rehabilitation, repair, and replacement to maintain reliable service and reduce the risk of system failures and emergency repairs.
The proposed rate adjustments are intended to provide sufficient revenues to support the continued operation and maintenance of the wastewater utility system, fund necessary capital improvements, maintain prudent reserve levels, and ensure the longterm financial stability of the utility. The proposed rates are based on a cost-of-service methodology intended to allocate costs proportionally among customer classes based on the demand and usage characteristics associated with providing sewer service.
The amount of the proposed rates imposed on any parcel or person as an incident of property ownership will not exceed the proportional cost of the service attributable to that parcel, and no charge will be imposed for service unless the service is actually used by, or immediately available to, the property owner or customer.
ENVIRONMENTAL IMPACT:
In accordance with the California Environmental Quality Act (CEQA) and the CEQA Guidelines, the City Council has determined that the increases in the Service Charges are exempt from CEQA pursuant to Section 15378 and Section 15273 of the CEQA Guidelines and Public Resources Code section 21080(b)(8) because: (i) the increased charges are for the purpose of meeting operational and maintenance expenses of the aforementioned services; and (ii) the charges constitute the creation of a funding mechanism/other governmental fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
FISCAL IMPACT:
The anticipated increases in sewer rates will provide required funding for the ongoing operations and maintenance of the utility systems, maintain appropriate reserve levels, support continued reinvestment in aging infrastructure, and provide funding for planned capital improvement projects. Without the proposed sewer rate increases the general fund will be required to provide funding for the sewer utilities.
Attachments
Final Rate Study Report
Prop 218 Sewer Rate Notice_Final
Resolution_No_4146_-_Adopting_Findings_re_AB_2257_Sewer_Services_Rates_2026.pdf Resolution_No_4147_-_Adopting_Increases_to_Sewer_Services_Rates_2026.pdf Water and Sewer
Rate Study
City of San Jacinto, CA
i Water & Sewer Rate Study
TABLE OF CONTENTS
TABLE OF CONTENTS ......................................................................................................................... i Section 1 – Executive Summary.......................................................................................................1
1.1 Introduction............................................................................................................................................... 1
1.1.1 Water System Background...................................................................................................... 1
1.1.2 Sewer System Background...................................................................................................... 2
1.1.3 Rate Study Background............................................................................................................. 2
1.2 Overview of the Rate Study Process................................................................................................. 3
1.3 Summary of Proposed Rates............................................................................................................... 4 Section 2 –Revenue Sufficiency Analysis .....................................................................................8
2.1 Financial Planning Principles.............................................................................................................. 8
2.2 Existing Rates............................................................................................................................................ 8
2.3 Revenue Sufficiency Process............................................................................................................. 10
2.3.1 Budget ........................................................................................................................................... 10
2.3.2 Capital Improvement Plan...................................................................................................... 11
2.3.3 Debt Service................................................................................................................................. 12
2.3.4 Gross and Net Revenue Requirement................................................................................ 12
2.4 Customers & Billable Flows................................................................................................................ 13
2.4.1 Customer Billing Analysis........................................................................................................ 14
2.5 Financial Projections Under Existing Rates ................................................................................. 14 Section 3 –Cost-of-Service (COS) Analysis..................................................................................18
3.1 General ...................................................................................................................................................... 18
3.2 Water Cost-of-Service .......................................................................................................................... 18
3.2.1 Peaking Factors .......................................................................................................................... 18
3.2.2 Functional Unbundling of Revenue Requirements ...................................................... 20
3.2.3 Classification of Water System Costs .................................................................................. 21
3.2.4 Allocation to Customer Classes and Unit Cost Development.................................... 23
3.2.5 Rate Design by Unit Cost ........................................................................................................ 25
3.2.6 Cost-of-Service and Revenue Check................................................................................... 29
3.3 Sewer Cost-of-Service .......................................................................................................................... 31 ii Water & Sewer Rate Study
3.3.1 Functional Unbundling of Revenue Requirements ...................................................... 31
3.3.2 Classification of Revenue Requirements........................................................................... 32
3.3.3 Allocation to Customer Classes and Unit Cost Development.................................... 33
3.3.4 Cost-of-Service and Revenue Check................................................................................... 37 Section 4 –Proposed Test Year Rates ..........................................................................................39
4.1 General ...................................................................................................................................................... 39
4.2 Typical Monthly Bill Comparison...................................................................................................... 42
4.3 Rate Comparison with Other Utilities ............................................................................................ 43 Section 5 –Projected Operating Results .....................................................................................46
5.1 General ...................................................................................................................................................... 46
5.2 Projected User Rate Revenues ......................................................................................................... 46
5.3 Debt Service Coverage ........................................................................................................................ 50
5.4 Summary of Projected Operating Results.................................................................................... 51 Section 6 – Conclusions and Recommendations......................................................................53
6.1 Disclaimers............................................................................................................................................... 53
6.1.1 General Disclaimer .................................................................................................................... 53
6.1.2 Municipal Advisory Disclaimer .............................................................................................. 53
6.2 Conclusions.............................................................................................................................................. 54
6.3 Recommendations ............................................................................................................................... 55 1 | P a g e
Section 1 – Executive Summary
1.1 Introduction
Willdan Financial Services (Willdan) is pleased to present this Water and Sewer Rate Study Report (Report) to the City of San Jacinto (City). This Report summarizes the analyses, findings, conclusions, and recommendations developed as part of a comprehensive review of the City's water and sewer utility rates.
The study was undertaken to evaluate the financial condition of the utilities, assess the adequacy of existing revenues to meet projected operating, debt and capital needs, and develop equitable, cost-based rates that support the long-term financial sustainability of the water and sewer utilities.
The Report presents the revenue sufficiency, cost-of-service, rate design, and financial planning analyses used to develop the proposed rates and charges.
1.1.1 Water System Background
The City of San Jacinto owns, operates, and maintains a water system that provides water service to residential, commercial, industrial, institutional, and other customers within approximately four square miles of southwestern Riverside County. The City’s service area is located near the base of the San Jacinto Mountains and is generally bounded by the City of Beaumont to the north, the City of Hemet to the south, and the City of Moreno Valley to the west. Water supplies are obtained primarily from local groundwater resources within the San Jacinto Groundwater Basin, which covers approximately 60 square miles and serves as the City's principal source of supply.
The San Jacinto Groundwater Basin serves as a natural groundwater storage reservoir and filtration system for the region. The basin is recharged through rainfall, surface runoff from the surrounding mountains and foothills, return flows, and groundwater replenishment activities utilizing imported water supplies. These groundwater resources provide a reliable local source of water and play a critical role in meeting the existing and future water demands of the City's customers.
Because the City relies primarily on groundwater supplies, the long-term sustainability of the San Jacinto Groundwater Basin is essential to maintaining a reliable water supply. The City participates in the Hemet-San Jacinto Groundwater Management Area and supports groundwater basin management activities administered by the Hemet-San Jacinto Watermaster. As part of the groundwater management program, supplemental imported water is purchased and recharged into the basin to help mitigate historical overdraft conditions, protect groundwater resources, and ensure the long-term reliability of water supplies for customers throughout the region.
The City’s water system includes groundwater production facilities, storage reservoirs, transmission facilities, and a distribution network that delivers water to customers throughout the service area. The City operates four groundwater wells, maintains water storage facilities and distribution infrastructure, and may supplement local groundwater supplies with imported water from Eastern Municipal Water District (EMWD) during emergency conditions or other periods when additional supplies are needed. The City is responsible for operating, maintaining, repairing, and replacing these facilities to provide reliable water service, maintaining adequate fire protection, protecting public health, and complying with applicable state and federal drinking water quality regulations.
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1.1.2 Sewer System Background
The City of San Jacinto provides sewer collection service to residential, commercial, industrial, institutional, and other customers throughout most of its municipal boundaries and currently serves approximately 4,300 customer connections. The City's sewer utility owns, operates, and maintains an extensive wastewater collection system consisting of approximately 117 miles of sewer mains, more than 2,500 manholes, three lift stations, and related facilities that collect and convey wastewater generated within the service area.
The City is responsible for the operations, maintenance, repair, rehabilitation, and replacement of its sewer collection infrastructure to ensure the reliable conveyance of wastewater, protect public health and the environment, and support continued service to existing and future customers. The City implements ongoing maintenance, rehabilitation, and capital improvement programs to preserve the integrity of its sewer collection infrastructure, maintain regulatory compliance, and support reliable service to its customers.
The City does not own or operate any wastewater treatment facilities. Wastewater collected within the City's service area is conveyed through interconnections with facilities owned and operated by Eastern Municipal Water District (EMWD). Pursuant to an agreement between the agencies, EMWD provides regional wastewater conveyance, treatment and disposal services, and wastewater generated within the City is ultimately treated at the San Jacinto Valley Regional Water Reclamation Facility.
1.1.3 Rate Study Background
The City is committed to maintaining reliable water and sewer utility services and ensuring that sufficient financial resources are available to support ongoing operations and maintenance, capital improvements, regulatory compliance, reserve funding, debt service obligations, and the continued maintenance, rehabilitation, and replacement of utility infrastructure. To support these objectives, the City periodically evaluates the financial condition of its utility systems and updates its rates to ensure sufficient revenues are available to meet current and future service needs.
As part of this effort, the City retained Willdan to conduct a comprehensive water and sewer rate study. The study evaluated the current financial condition of the utilities, developed a 5-year financial plan, analyzed projected revenues and expenditures, and assessed the adequacy of the existing rate structures. Based on the results of the analysis, recommendations were developed to ensure that the utilities remain financially sustainable while continuing to provide safe and reliable service to customers.
The primary objectives of the rate study include:
• Full recovery of costs associated with utility operations (i.e., operating and maintenance costs, capital projects, debt repayment and coverage requirements, and other expenditures);
• Development of cost-based rates that reasonably reflect the cost of providing service to customers;
• Consistency with generally accepted utility ratemaking principles and industry guidelines set forth by the American Water Works Association (AWWA) and the Water Environment Federation (WEF);
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• Equity among customer classes through the allocation of costs in proportion to the demands placed on the utility systems;
• Compliance with the substantive and procedural requirements of Proposition 218; • Maximizing administrative efficiency (i.e., easy to understand and implement); and • Development of a 5-year financial plan to support the long-term sustainability of the water and sewer utilities.
1.2 Overview of the Rate Study Process
This study includes the development and presentation of a proforma water and sewer financial plan for a 5-year planning period, as well as the development of cost-based rates through cost-ofservice and rate design analyses. Utility rates must be set at a level such that operating, maintenance, debt, and capital expenses are funded with the revenues received from customers.
In addition, the revenues generated from utility rates must only be used for this purpose and for each system separately. This is a significant point, as failure to achieve the revenues needed can lead to unacceptable service levels, inadequately maintained facilities, degradation of system components and potential failures. Therefore, a rate study typically consists of the following three interrelated analyses:
1. Financial Planning/Revenue Requirement Analysis: Creates a 5-year financial plan and identifies the required revenue amounts to support an orderly, efficient program of funding for on-going maintenance and operating costs, capital improvement and routine system component replacement activities, debt financing, and retirement of outstanding debt. In addition, the plan should fund and maintain appropriate cash reserve balances based on industry standards, as well as the City’s fiscal policies and specific needs.
2. Cost-of-Service Analysis: Identifies and apportions annual revenue requirements (i.e., expenditures) to operational and functional cost components based on the relative demand placed on the utility systems by various groups or classes of customers. The purpose of this analysis is to develop customer rates that generate revenues proportionate to their share of each utility’s costs. This objective is consistent with industry standards as well as the requirements of Proposition 218 (Prop 218).
3. Rate Design: Develops an equitable and proportionate schedule of rates for the City’s customer base consistent with the cost-of-service analysis. The policy objectives are coordinated with Prop 218 requirements and cost-of-service objectives to achieve a balance between customer equity and financial stability goals. The balance of fixed and variable charges considers the need for a stable revenue source (the fixed charge) and accounts for customers placing higher costs on the system (through higher water and sewer use) by incurring a higher bill reflective of their impact on the system (the variable component).
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This rate study utilizes generally accepted ratemaking principles and standards established by industry experts, such as the AWWA in its “M1 - Principles of Water Rates Fees and Charges” manual and WEF in its “Financing and Charges for Sewer Systems, Manual of Practice No. 27.” The principles established by these entities are used as guidelines in the development of the proposed water and sewer rates and are relied upon only insofar as they are consistent with Prop 218. The following Subsection 1.3 of this Report presents a discussion of some of the key principles of ratemaking.
1.3 Summary of Proposed Rates
The rate study methodology applied in the development of updated water and sewer rates, outlined in this Report, consisted of reviewing the historical operating results of the water and sewer utility systems, analyzing budgets and other financial data and policy objectives to identify the net revenue requirements to be recovered from user rate revenues, performing general costof-service allocations based on the rate components and functional cost categories, and revising the rates based on the applicable costs and expenditures to be recovered from user rates. In addition, an analysis of the City’s customers and usage characteristics was performed to identify the rate determinants since they drive the recommended rates, which are the primary source for generating revenues. The allocated revenue requirements were utilized in conjunction with the rate determinants and rate structure to develop the proposed water and sewer rates.
The findings and conclusions of the rate analysis, as well as the resulting rate recommendations, were utilized to develop a projection of future operating results for a 5-year planning period from Fiscal Year (FY) 2026 (beginning July 1, 2025) through FY 2030 (ending June 30, 2030), herein referred to as the “Projection Period.” The purpose for developing the 5-year projections is to demonstrate the financial capability of the water and sewer revenues to support system operations and maintenance, and fund planned capital improvements. The analyses, findings, and accompanying recommendations are presented in the subsequent sections of the Report.
The water and sewer rate analyses described in the Report are performed based on the general guidelines of the defined objectives, as well as common industry standards and best practices for Rate Design Analysis
Considers both the level and structure of the rate design to collect the appropiate and targeted level of revenues.
Cost-of-Service Analysis
Allocates the revenue requirements to the fixed/variable cost components based on cost-of-service.
Revenue Requirement Analysis
Compares the revenues to the expenses of the utility
to determine the overall rate adjustment required.
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setting utility rates. In addition to focusing on these major objectives in designing the structure of rates for various customer categories, the rate analyses performed herein are based on the costof-service and rate design methodologies described in this Report. The recommended revenue levels and rates are developed to recover the projected revenue requirements of the water and sewer utility systems in a manner that is proportionate to the cost of providing service.
The proposed water and sewer rates for the Test Year are provided in Tables 1 and 2. The rates are based on an assumed implementation date of January 1, 2026 (or such later date as may be determined by the City), with FY 2025/26 (FY 2026) designated as the Test Year for purposes of this analysis. The Test Year of the rate study represents the foundational, or baseline, year upon which the revenue requirements, cost-of-service analysis, and initial rate design are based. It is intended to reflect the most representative and stabilized projection of utility operations, incorporating current conditions as well as known and measurable changes expected to occur within the first year of the rate implementation period. Any projected changes or escalations in costs included in the projection period are determined relative to the Test Year. [The rest of this page is intentionally left blank]
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Table 1 – Proposed Monthly Water Rates
Monthly Fixed Charge:
All Customers
5/8 Inch $ 51.84
3/4 Inch $ 51.84
1.0 Inch $ 86.19
1.5 Inch $ 172.06
2.0 Inch $ 275.11
3.0 Inch $ 515.56
4.0 Inch $ 859.05
6.0 Inch $ 1,717.79
8.0 Inch $ 2,748.28
Fire Service
5/8 Inch $ 2.98
3/4 Inch $ 2.98
1.0 Inch $ 4.76
1.5 Inch $ 9.21
2.0 Inch $ 14.54
3.0 Inch $ 26.98
4.0 Inch $ 44.76
6.0 Inch $ 89.20
8.0 Inch $ 142.54
10.0 Inch $ 204.76
12.0 Inch $ 382.53
Construction Meter
Construction Meter $ 515.56
Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.70
Tier 2 (11+ Units) $ 4.49
All Non-Residential Customers
All Flow $ 4.26
Water Adjudication Fee
All Flow $ 1.10
Description
Proposed
Rates
FY 2026
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Table 2 – Proposed Monthly Sewer Rates
Proposed
Rates
FY 2026
$ 10.48
$ 0.95
$ 10.48
$ 40.31
[1]
[2]
[3]
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
Eastern Municipal Water District (EMWD) provides sewer
treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Sewer (per Sewage Unit)
See Footnote
Notes:
Sewer (per EDU)
Monthly Fixed Charge: [1]
All Customers (Per EDU)
Description
Volumetric Rates Per 100 Cubic Feet: [2]
EMWD Related Charges: [3]
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Section 2 – Revenue Sufficiency Analysis
2.1 Financial Planning Principles
While the individual rates for the utility systems vary based on a variety of factors, rates should be consistent with common ratemaking principles within the utility industry. The guiding principle is that rates designed for any utility should provide a reasonable balance between several key factors. In general, the utility rates should:
• Generate a stable revenue stream that, when combined with other sources of funds, is sufficient to meet the expenditure requirements and goals of the system; • Be based upon the proportionate cost of providing the service and not exceed the cost of providing the service in compliance with Proposition 218; • Be equitable; that is, they should generate revenue from each customer class in a manner which is reasonably in proportion to the cost of providing the service to that customer class; • Be easy to understand by customers; and
• Be easy to administer by the utility.
Striking the appropriate balance between the principles of ratemaking is essential. It requires a detailed process to evaluate revenue requirements and cost-of-service that must then be translated into rate design alternatives which meet legal requirements and the specific objectives of the utility under the circumstances in which it operates.
2.2 Existing Rates
The City has established user rates for water and sewer services that are applied to customers of the system. The rates charged for water and sewer services are approved by the City Council and are not subject to administrative review or approval by any other local or state agency. The City has historically adjusted rates, as necessary, to provide for recovery of financial obligations including operating expenses, debt service, capital expenditures, and any other expenses and transfers.
The existing water rates consist of 1) a monthly fixed charge that designates the minimum amount a customer will pay regardless of their water usage, and 2) volumetric charges based on the amount of water consumed. The monthly fixed charge varies based on the meter size for all customer classes. Residential customers are charged based on a two-tier volumetric rate structure in which the rate per 100 cubic feet (CCF) increases once usage exceeds 11 CCF. The tiered rate structure is based on a cost-of-service analysis that demonstrates the increased costs associated with providing water at increased quantities and structuring operations and facilities to serve peak demand. All other customer classes are charged a uniform volumetric rate such that the rate per CCF remains the same for each respective customer type regardless of the amount of water usage.
The existing rates for water service are provided in Table 3. 9 | P a g e
Table 3 – Existing Monthly Water Rates
The existing sewer collection rates consist of a monthly fixed charge per Equivalent Dwelling unit (EDU) for most sewer service customers, except as further described below. All residential and most non-residential customers are charged the monthly fixed charge. Certain non-residential customers are assessed only a volumetric wastewater charge based on metered water consumption. These customers include commercial/industrial, all restaurant, certain churches, and certain school accounts where wastewater flows are more directly related to water usage.
Since the City only provides sewer collection services, the City’s sewer rates only reflect the costs of providing sewer collection services. Wastewater treatment services are provided by Eastern Municipal Water District (EMWD). Accordingly, City customers also pay wastewater treatment Monthly Fixed Charge:
All Customers
5/8 Inch $ 24.89
3/4 Inch $ 24.89
1.0 Inch $ 34.82
1.5 Inch $ 59.68
2.0 Inch $ 89.51
3.0 Inch $ 183.96
4.0 Inch $ 323.13
6.0 Inch $ 656.17
8.0 Inch $ 1,202.94
Fire Service
5/8 Inch $ 24.89
3/4 Inch $ 24.89
1.0 Inch N/A
1.5 Inch N/A
2.0 Inch N/A
3.0 Inch N/A
4.0 Inch $ 41.18
6.0 Inch $ 119.60
8.0 Inch $ 254.80
10.0 Inch $ 458.23
12.0 Inch $ 740.17
Construction Meter
Construction Meter $ 183.96
Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.15
Tier 2 (11+ Units) $ 3.90
All Non-Residential Customers
All Flow $ 3.73
Water Adjudication Fee
All Flow $ 1.77
Description Existing
Rates
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charges established by EMWD in addition to the City's applicable wastewater collection rates. The City's sewer rates recover only the costs associated with collection services, while EMWD's rates recover the costs associated with wastewater conveyance, treatment, and disposal services. The existing rates for sewer service are provided in Table 4.
Table 4 – Existing Monthly Sewer Rates
2.3 Revenue Sufficiency Process
In evaluating whether the existing rates will generate sufficient revenue to meet the expenditure requirements of the water and sewer systems, the annual expenditures required for each utility (herein referred to as the “Revenue Requirements”) must be developed. The revenue sufficiency analysis compares the forecasted revenues for each utility system under existing rates to the projected revenue requirements.
2.3.1 Budget
The revenue sufficiency analysis performed as part of this study and summarized in this Report utilizes the City’s Adopted Budget for FY 2025/26 (the “Budget” for FY ending June 30, 2026) as one source of data and information to determine the gross revenue requirements to be recovered from user rates over the Projection Period. Existing
Rates
$ 8.22
$ 0.75
$ 8.22
$ 40.31
[1]
[2]
[3]
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
EMWD Related Charges: [3]
Sewer (per EDU)
Sewer (per Sewage Unit)
Notes:
Description
Monthly Fixed Charge: [1]
All Customers (Per EDU)
Volumetric Rates Per 100 Cubic Feet: [2]
See Footnote
Eastern Municipal Water District (EMWD) provides sewer
treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
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The budget, as prepared by the City, was provided to Willdan on a line-item basis, and is used for projecting the budgeted financial needs for the Test Year and the remainder of the Projection Period. In developing the rate analysis, certain adjustments are made such that the expenditures are categorized into either operating and maintenance (O&M) expenses or non-operating expenses. In addition, only recurring costs included in the current budget were included as part of the revenue sufficiency analysis for the entirety of the Projection Period. One-time costs were identified and evaluated in discussions with City Staff and removed from future projections if appropriate. Recurring annual costs were escalated using suitable cost indexes or escalation factors, again in discussion with City Staff and based on analysis of historical expense trends experienced by the City.
The O&M expenses are primarily those ongoing costs for labor, materials, chemicals, electricity, supplies, services, etc., required to manage and operate the utility systems on a day-to-day basis while maintaining a dependable level of service. The O&M requirements are generally a function of a budgetary process and are directly related to the level of service provided to customers of the utility systems. The non-operating expenses include such items as capital outlay and any other expenses and transfers.
The budget also identifies estimated revenues derived from sources other than water and sewer user rates. These other revenue sources may include interest earnings on investments and various other miscellaneous service charges. The revenues generated from the other sources are applied to the gross revenue requirements to reduce the amount of revenue required from user rates. The result is the net revenue requirement.
2.3.2 Capital Improvement Plan
The City provided a Capital Improvement Plan (CIP) identifying the capital projects to be undertaken during the Projection Period. These projects are necessary to maintain uninterrupted service to customers, rehabilitate and replace aging infrastructure, accommodate future system needs, and ensure continued compliance with applicable regulatory requirements. The CIP includes investments in system improvements, facility upgrades, and the replacement of infrastructure components as they reach the end of their useful lives.
The City also provided cost estimates and anticipated implementation schedules for the identified capital projects. The CIP also includes projects necessary to maintain compliance with State mandated standards for water quality. These projected capital expenditures, together with operating and maintenance expenses (O&M) and other non-operating expenditures, were incorporated into the development of the gross revenue requirements for the water and sewer systems. The capital projects included in the CIP (represented in $1,000s), along with the assumed funding sources by fiscal year for the Projection Period, are provided in Tables 5 and 6. 12 | P a g e
Table 5 – Water Anticipated Capital Spending ($1,000s)
Table 6 – Sewer Anticipated Capital Spending ($1,000s)
2.3.3 Debt Service
The City currently has two outstanding debt obligations associated with the water utility system, with final payments due in FY 2035/36 and FY 2044/45, respectively. The annual debt payments projected over the Projection Period are provided in Table 7. Based on discussions with City staff, no additional debt issuances are anticipated during the Projection Period. Accordingly, the analysis includes debt service payments associated with the City’s existing debt obligations but does not include any future debt service associated with new debt issuances or debt coverage requirements.
Table 7 – Annual Debt Service Payments
2.3.4 Gross and Net Revenue Requirement
The proposed water and sewer rates developed in the Report are designed for assumed implementation in FY 2025/26 (the Test Year as previously defined). The projected Test Year gross and net revenue requirements are estimated by utilizing the budget, capital project cost estimates and assumed funding sources for capital projects as provided by the City, along with anticipated transfers to reserves for funding capital projects. 2026 2027 2028 2029 2030 Water System
EMWD Emergency Inter-Tie Cash $ 550 $ - $ - $ - $ -
Reservoir Rehabilitation x 3 Cash 200 315 386 463 547
New Potable Water Production Well Cash 300 630 992 1,158 1,337 Storage and Booster Pump Site Cash 250 525 827 868 912
6th St Water Main Cash 400 840 1,103 1,736 -
5th St. Water Main Cash 300 630 992 1,389 1,580
Main St Water Main Cash - 1,313 1,378 1,447 1,519
Total Water System Improvements $ 2,000 $ 4,253 $ 5,678 $ 7,062 $ 5,895 Description Funding
Source
Projected For Fiscal Year Ending June 30 ($1,000s)
2026 2027 2028 2029 2030
Sewer System
Jessica Way Sewer Main Cash $ 50 $ 105 $ 165 $ 260 $ 304 Main Line Repairs Cash 150 184 221 260 -
Manhole Rehabilitation Cash 50 105 165 174 182
Vacuum Truck Cash 400 525 - - -
Camera Van Cash 150 158 193 - -
Generators for Lift Stations Cash 262 - - - -
Total Sewer System Improvements $ 1,062 $ 1,076 $ 744 $ 695 $ 486 Description Funding
Source
Projected For Fiscal Year Ending June 30 ($1,000s)
2026 2027 2028 2029 2030
Annual Debt Service
2015 Installment Sale Agreement $ 251,585 $ 264,660 $ 278,462 $ 293,031 $ 308,410 2025 Installment Purchase Agreement 678,128 677,715 678,429 677,561 678,109 Total Annual Debt Service $ 929,713 $942,375 $ 956,891 $970,592 $ 986,519 Description Projected For Fiscal Year Ending June 30
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Transfers from operating reserves to capital reserves are used to fund the $3 million CIP in FY 2025/26. This approach reflects a pay-as-you-go funding strategy, where accumulated operating reserves are reallocated to support capital investment, once the target balance in the operating reserve is met, reducing reliance on external debt and ensuring that adequate funding is available for infrastructure improvements. The Test Year revenue requirements that are used for developing the user rates proposed herein are detailed in Appendix A at the end of this Report and summarized in Table 8.
Table 8 – Test Year Revenue Requirements – FY 2026
The revenue requirements developed for the Test Year serve as the foundation and baseline for the analysis and results shown for the Projection Period, with future year requirements projected based on anticipated changes in operating costs, capital funding needs, debt service obligations, and reserve targets. The revenue requirements for years beyond the Test Year are met through annual rate adjustments, as needed, throughout the Projection Period. The projected revenue requirements for the water and sewer utilities over the entire Projection Period are provided in Tables 9 and 10.
Table 9 – Water Revenue Requirements for the Projection Period Table 10 – Sewer Revenue Requirements for the Projection Period
2.4 Customers & Billable Flows
The rate study is described herein is heavily reliant upon a detailed analysis of system customers and their usage and demand characteristics. An analysis of the City’s historical customer and Description Water Sewer Total Total O&M $ 7,546,416 $ 1,711,302 $ 9,257,718
Debt Service 929,713 - 929,713
Other Expenditures & Transfers 1,208,055 626,968 1,835,023 Gross Revenue Requirement $ 9,684,184 $ 2,338,270 $12,022,454 Less Other Revenues (230,000) (1,580,967) (1,810,967)
Net Revenue Requirement $ 9,454,184 $ 757,303 $ 10,211,487 2026 2027 2028 2029 2030
Total O&M $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 Existing Debt Service 929,713 942,375 956,891 970,592 986,519 Other Expenditures & Transfers 1,208,055 3,446,369 6,173,218 7,137,360 7,286,693 Gross Revenue Requirement $ 9,684,184 $ 11,814,621 $14,970,837 $ 16,393,493 $17,036,088 Less Other Revenues (230,000) (230,000) (230,000) (230,000) (230,000) Net Revenue Requirement $ 9,454,184 $ 11,584,621 $14,740,837 $ 16,163,493 $16,806,088 Description Projected for Fiscal Year Ending June 30
2026 2027 2028 2029 2030
Total O&M $ 1,711,302 $ 1,779,913 $ 1,851,557 $ 1,926,384 $ 2,004,555 Other Expenditures & Transfers 626,968 429,428 671,184 798,025 764,030 Gross Revenue Requirement $ 2,338,270 $ 2,209,341 $ 2,522,741 $ 2,724,409 $ 2,768,585 Less Other Revenues (1,580,967) (1,319,560) (1,321,671) (1,323,935) (1,326,199) Net Revenue Requirement $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 Description Projected for Fiscal Year Ending June 30
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billing data for the existing utility customer base and metered/billable flows provide the determinants utilized in the cost-of-service analysis, and ultimately in calculating the monthly user rates and charges, which become the foundation for projecting future revenues generated by the water and sewer systems.
It is important to note that the customer and flow analysis focuses primarily on the customer classifications that will be subject to and impacted by the user rates and charges to be developed in the Report. This consists of the general service (retail) customers who currently pay for utility services pursuant to the existing user rates and charges as previously detailed. For the purposes of the rate study, it is these customers that will generate revenues based upon the proposed user rates and charges.
2.4.1 Customer Billing Analysis
For the rate study, detailed billing information was provided by City staff for each customer. This data offered a breakdown of water and sewer customers by class, usage characteristics, and billed charges. An analysis of the billing data was conducted to obtain an understanding of the existing customers, customer classes, and demand and usage characteristics for each customer class. In accordance with the data, and based on discussions with City staff, the utility systems provide service to various retail customer classes consisting of residential and non-residential, which includes commercial, institutional and industrial customers.
Each of these customer classes embodies certain common characteristics in their utility use and service demand profiles that provide the basis for establishing an equitable allocation of system costs. The billing data was utilized to identify the number of customer accounts and units within each class, the applicable equivalent dwelling units (EDUs), and the metered/billable usage profiles.
2.5 Financial Projections Under Existing Rates
The projected customers and accompanying billable flows were applied to the existing rates to develop a projection of user revenues that would be generated under existing rates. The revenues are then compared to the projected revenue requirements and expenditures to determine if revenue adjustments would be needed to meet the calculated revenue requirements shown in Tables 9 and 10.
Based on this comparison, it is projected that under the existing rates, the water and sewer systems would meet their collective projected operating and maintenance (O&M) costs, debt service payments and coverage requirements (water enterprise only), and costs of capital projects in Year 1 of the Projection period. However, the City would not be able to meet its financial obligations in the remaining years of the Projection Period. Therefore, revenue adjustments are recommended to generate additional cash to fund projected costs of operations, debt service, capital projects, and to maintain adequate cash reserves.
Although the City has not formally adopted reserve policies for its water and sewer utilities, the financial plan developed as part of this study includes reserve funding targets intended to support the financial stability of the utilities. For planning purposes, the analysis assumes operating reserves equivalent to at least 120 days of operating expenditures to provide sufficient working capital, address temporary revenue fluctuations, maintain cash flow stability, and fund unanticipated operational needs. The financial plan also includes capital reserve funding to support the repair, rehabilitation, and replacement of utility infrastructure and to help fund future 15 | P a g e
capital improvement needs. The cash-flow statements outlining the projected operating results under existing rates are summarized in Tables 11 and 12 for the water and sewer systems, respectively. The proposed rates and projected financial results are addressed in the subsequent sections of this Report.
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Table 11 – Water System Projected Operating Results Under Existing Rates ($1,000s) 2027 2028 2029 2030
Revenues:
Water Sales $ 7,563 $ 7,567 $ 7,567 $ 7,567 $ 7,567
Other Revenues 230 230 230 230 230
Total Revenues $ 7,793 $ 7,797 $ 7,797 $ 7,797 $ 7,797
Less O&M Expenses (7,546) (7,426) (7,841) (8,286) (8,763) Income Available for Debt Service $ 247 $ 371 $ (44) $ (489) $ (966) Debt Service:
Existing $ 930 $ 942 $ 957 $ 971 $ 987
Total Indebtedness $ 930 $ 942 $ 957 $ 971 $ 987
Net Results $ (683) $ (572) $ (1,001) $ (1,459) $ (1,953) Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 3,448 $ 590 $ (2,962) $ (9,641) $ (18,162) Deposit/(Withdrawal) from Operations (683) (572) (1,001) (1,459) (1,953) Transfer from/(to) Capital Reserve Fund (234) (2,931) (5,628) (7,012) (5,845) Transfer to Capital Fund (50) (50) (50) (50) (50)
Total Operating Fund Balance $ 2,481 $ (2,962) $ (9,641) $ (18,162) $ (26,010) Operating Days Cash on Hand 120 (146) (449) (800) (1,083) Capital Fund
Beginning Balance $ 1,097 $ 1,272 $ - $ - $ -
Transfer from/(to) Operating Fund 234 2,931 5,628 7,012 5,845 Water Capital Improvement Revenue 50 50 50 50 50
Cash Funded Capital Projects (2,000) (4,253) (5,678) (7,062) (5,895) Total Capital Fund Balance $ (619) $ - $ - $ - $ -
Water Enterprise Reserves
Beginning Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Revenues Toward Debt Service Payment $ 930 $ 942 $ 957 $ 971 $ 987 Annual Debt Service Payment (930) (942) (957) (971) (987) Ending Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Total Fund Balance - Water $ 3,012 $ (1,812) $ (8,491) $ (17,012) $ (24,860) Debt Coverage 0.27 0.39 0.00 0.00 0.00
Description Existing
Rates
Projected for Fiscal Year Ending June 30
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Table 12 – Sewer System Projected Operating Results Under Existing Rates ($1,000s) 2027 2028 2029 2030
Revenues:
Wastewater Sales $ 594 $ 594 $ 594 $ 594 $ 594
Other Revenues 1,053 1,055 1,057 1,059 1,060
Total Revenues $ 1,647 $ 1,649 $ 1,651 $ 1,653 $ 1,654
Less O&M Expenses (1,711) (1,780) (1,852) (1,926) (2,005) Income Available for Debt Service $ (64) $ (131) $ (201) $ (274) $ (350) Net Results $ (64) $ (131) $ (201) $ (274) $ (350)
Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 1,933 $ 563 $ (244) $ (1,189) $ (2,158) Deposit/(Withdrawal) from Operations (64) (131) (201) (274) (350) Transfer from/(to) Capital Reserve Fund (1,276) (646) (714) (665) (456) Transfer to Capital Fund (30) (30) (30) (30) (30)
Total Operating Fund Balance $ 563 $ (244) $ (1,189) $ (2,158) $ (2,994) Days Cash on Hand 120 (50) (234) (409) (545)
Capital Fund
Beginning Balance $ 156 $ 400 $ - $ - $ -
Transfer from/(to) Operating Fund 1,276 646 714 665 456 Sewer Connection Fee Revenue 30 30 30 30 30
Cash Funded Capital Projects (1,062) (1,076) (744) (695) (486) Total Capital Fund Balance $ 400 $ - $ - $ - $ -
Total Fund Balance - Sewer $ 963 $ (244) $ (1,189) $ (2,158) $ (2,994) Debt Coverage N/A N/A N/A N/A N/A
Description Existing
Rates
Projected for Fiscal Year Ending June 30
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Section 3 – Cost-of-Service (COS) Analysis
3.1 General
The costs incurred by a utility system are generally driven by specific service requirements imposed on the system by its customers. For water systems, the primary service requirements that drive costs include annual flow volumes, peak flow volumes (i.e., peak day and peak hour), the number of customers, and the types of customers served. For sewer systems, the primary service requirements that drive costs typically include annual sewer volumes, sewer treatment strength, such as Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS), and the number and types of customers served. Treatment related costs are not considered in this analysis since wastewater from City customers is conveyed to EMWD for treatment.
There are several different options that can be used to perform a cost-of-service (COS) analysis, and the allocation methodology depends upon the operating profile of the utility, data availability, and the basis applied. The water COS analysis performed for this rate study utilizes a common industry approach known as the base-extra capacity method. The sewer COS analysis involves an examination of the types of customers served in accordance with the California State Water Resources Control Board (SWRCB) Revenue Program Guidelines for Wastewater Agencies and data provided by City staff.
3.2 Water Cost-of-Service
The COS analysis utilizes the revenue requirements for the Test Year as a cost basis. The Test Year revenue requirements are functionally unbundled, classified and allocated to customer classes to determine the cost of service by class. As stated in Section 3.1, the water COS analysis involves an examination of annual flow volumes, peak flow volumes (i.e., peak day and peak hour), and the number and type of customers served. More detail related to the water COS approach can be found in Appendix B.
3.2.1 Peaking Factors
System-wide peaking factors were developed based on City-specific operating and customer data as described below, to allocate costs between Base Delivery and Max Day demand components.
These components reflect capital, operational and infrastructure needs necessary to meet increased levels of demand under peak conditions. Base Delivery represents the average daily water demand placed on the system and reflects the capacity required to meet normal day-today customer demands. Max Day demand represents the additional capacity required to meet peak water demand experienced during periods of maximum system use.
Based on information provided by City staff, the average daily water demand during the most recent full year was approximately 2.9 million gallons per day (MGD), while the maximum day demand was approximately 4.4 MGD. As a result, the system-wide Max Day peaking factor is 1.52, indicating that maximum day demands are approximately 52 percent greater than average daily demands. The system-wide peaking factors are summarized in Table 13.
The comparison of average daily and maximum day demands indicates that approximately 66 percent of system capacity is attributable to Base Delivery demands and 34 percent is attributable to Max Day demands. These allocation factors are used to distribute Base Delivery and Max Day costs within the cost-of-service analysis.
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Table 13 – Peaking Factors System-Wide
Max Day peaking factors for each customer class were then developed using customer billing data. Since daily usage data by customer class was not available, the ratio of maximum monthly usage to average monthly usage was used as a proxy for estimating class-specific Max Day peaking factors. The resulting peaking factors by customer class are presented in Table 14.
Table 14 – Peaking Factors by Customer Class
Once peaking factors were established, the Max Day demand for each customer class was calculated. Total annual water usage for each customer class was converted to an average daily demand by dividing annual consumption by 365 days. The average daily demand was then multiplied by the applicable customer class peaking factor to determine the total Max Day demand for each customer class. The additional capacity required to meet Max Day demands was calculated as the difference between the maximum day demand and average daily demand. The resulting allocation of average daily demand, Max Day demand, and additional capacity requirements by customer class is presented in Table 15.
Table 15 – Usage and Extra Capacity
Consistent with the City's existing rate structure, in addition to their base charges, residential customers continue to be assessed a two-tier volumetric rate, while non-residential customers Description Demand
(MGD)
Factor Base Max Day Total
Avg Day 2.90 1.00 100.00% 0.00% 100.00%
Max Day 4.40 1.52 65.91% 34.09% 100.00%
Description Max Day
Peaking Factor
Residential
Tier 1 (0-11 Units) 1.86
Tier 2 (11+ Units) 2.39
Non-Residential
All Flow 2.24
Total Annual
Flow (CCF)
Average Daily
Flow (CCF)
Peaking
Factor
Total
Capacity
Extra
Capacity
Residential
Tier 1 (0-11 Units) 378,803 1,038 1.86 1,935 897
Tier 2 (11+ Units) 166,119 455 2.39 1,090 635
Non-Residential
All Flow 550,963 1,509 2.24 3,386 1,877
Total 1,095,885 3,002 6,411 3,409
Description
Flow Max Day
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continue to be assessed a uniform volumetric rate. The differing rate structures reflect the distinct usage characteristics of the respective customer classes while recovering each class's allocated proportional cost of service. Residential customers are billed for their service under a two-tier volumetric rate structure due to the inherent discretionary characteristics of their water use, including outdoor irrigation, which can vary significantly among customers during periods of peak demand, based upon their individualized needs. The tier thresholds were established based on analysis of historical residential usage patterns and the calculation of specific peak demand factors in this study, to ensure proportionate recovery of the utility's revenue requirements during periods of peak demand. In contrast, non-residential customers are charged a uniform volumetric rate because water use for commercial, industrial, institutional, and similar customers is generally driven by, and widely varies, based on the operational needs of the business. Unlike residential customers, businesses and other non-residential customers’ ability to conserve water through discretionary usage is minimal.
3.2.2 Functional Unbundling of Revenue Requirements
The water system costs are unbundled into major cost components associated with providing water service. For the purposes of this analysis, costs were categorized into the following functional components: Supply/Treatment, Transmission, Distribution, Customer, and Administration. These functions represent the primary services provided by the water utility system.
A brief description of each functional component is provided below:
• Supply/Treatment – Costs associated with water supply, groundwater production, treatment, and other activities necessary to produce potable water. • Transmission – Costs associated with major pumping facilities, transmission mains, and other infrastructure used to convey water throughout the system. • Distribution – Costs associated with distribution mains and related facilities that deliver water to individual customer service connections.
• Customer – Costs associated with customer service functions, including meter reading, billing, account administration, collections, and other customer-related services. • Administration – General and administrative costs, including management, finance, insurance, and other utility support functions that are not directly attributable to a specific operational component.
The allocation of the functionally unbundled revenue requirements for the Test Year is summarized in Table 16.
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Table 16 – Functionally Unbundled Cost Allocations
3.2.3 Classification of Water System Costs
As previously addressed, the functionally unbundled water system revenue requirements are then classified using the base-extra capacity cost allocation method. Under this approach, costs are classified into the following categories:
• Base Costs – Capital and operating costs associated with providing service under average demand conditions. These costs include the routine operation and maintenance of the City's water system, including groundwater production, treatment facilities, storage reservoirs, pumping, and the distribution system required to meet normal day-to-day water demands. Base costs generally vary with the total volume of water used. • Maximum Day (Extra Capacity) Costs – Capital and certain operating costs associated with providing sufficient system capacity to meet peak demand conditions.
These costs reflect the additional infrastructure required to deliver water during periods of maximum demand, including larger transmission and distribution mains, storage reservoirs, pumping facilities, and other system components sized to accommodate peak water demands beyond average usage levels, as well as increased treatment and pumping costs during peak demand periods.
Test Year
2026
$ 7,546,416
929,713
-
1,208,055
$ 9,684,184
(230,000)
$ 9,454,184
$ 1,275,630
502,100
20,250
4,203,436
345,000
1,200,000
929,713
2,000,000
(230,000)
Fund Balance [1] (791,945)
$ 9,454,184
[1]
Water Adjudication
Total
Notes:
Functional Unbundled Revenue Requirement
Gross Revenue Requirement
Less Other Revenues
Net Revenue Requirement
Source of Supply
Description
Total O&M
Existing Debt Service
Future Debt Service
Other Expenditures & Transfers
Transmission & Distribution
Pumping
Customer Service
Administration
Represents a transfer from reserves to provide funding for capital outlay and CIP costs.
Existing Bond DS
CIP
Non-Rate Revenue
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• Meter and Services Costs – Costs associated with customer meters, service connections, meter maintenance, testing, replacement, and other meter- and servicerelated activities necessary to provide water service. • Billing and Collection Costs – Costs associated with customer service functions, including billing, collections, accounting, and recordkeeping, and other activities that are generally independent of the amount of water consumption and meter size, and are not subject to peak demand factors.
• Fire Protection Costs – Costs associated with providing fire flow capacity and maintaining facilities necessary to support fire protection requirements throughout the service area.
• Water Adjudication Costs – Costs associated with the City's participation in the Hemet-San Jacinto Groundwater Management Area, including Watermaster assessments, groundwater basin management activities, and the purchase of supplemental water supplies required to support groundwater replenishment and long-term basin sustainability. These costs are incurred to help maintain a reliable groundwater supply and are allocated based on total water usage.
Under the base-extra capacity methodology, costs are separated between those attributable to average demand requirements (base capacity) and those attributable to peak demand requirements (extra capacity). Components, such as Treatment, Transmission, and Distribution are allocated based on flows and applicable peaking factors. Meters and Services costs are allocated based on meter size, Billing and Collection costs are allocated on a per-account basis, Fire Protection costs are allocated to customer classes based on their share of fire protection demand, and Water Adjudication costs are allocated based on total water usage, reflecting the relationship between groundwater management activities and the quantity of water supplied to customers.
The cost allocation factors developed for the Test Year are based on the most recent customer and system data available at the time of the analysis (i.e., the most recent fiscal year). While the City’s customer base is not expected to change materially during the Projection Period, future changes in customer usage patterns, weather conditions, economic activity, or other factors may affect the allocation of costs among customer classes. The system-wide cost classifications by service characteristics are summarized in Table 17.
Table 17 - Classification of Unbundled Revenue Requirements Component Base
Extra
Capacity
Max Day
Meters &
Services
Billing &
Collection
Fire
Protection
Water
Adjudication Total
Transmission & Distribution $ 570,884 $ 704,746 $ - $ - $ - $ - $ 1,275,630 Pumping 224,705 277,395 - - - - 502,100
Customer Service - - - 19,955 295 - 20,250
Administration - - 4,142,177 - 61,259 - 4,203,436
Source of Supply 345,000 - - - - - 345,000
Water Adjudication - - - - - 1,200,000 1,200,000
Existing Bond DS 929,713 - - - - - 929,713
New Bond DS - - - - - - -
CIP 895,062 1,104,938 - - - - 2,000,000
Non-Rate Revenue & Fund Balance (326,692) (229,932) (456,341) (2,198) (6,781) - (1,021,945) Total $ 2,638,672 $ 1,857,147 $ 3,685,836 $ 17,756 $ 54,773 $ 1,200,000 $ 9,454,184 23 | P a g e
3.2.4 Allocation to Customer Classes and Unit Cost
Development
The functionalized and classified revenue requirements are allocated to customer classes using allocation factors designed to reflect the manner in which costs are incurred and the demands placed on the water system by each customer class. The allocation basis for each cost component is summarized below:
• Base Costs – Allocated based on each customer class’s proportionate share of the base annual water usage.
• Extra Capacity (Max Day) System Costs – Allocated based on each customer class’s proportionate share of maximum day demand requirements. • Meters and Services Costs – Allocated based on the relative percentage of Equivalent Dwelling Units (EDUs) represented by each customer class. EDUs reflect the relative service capacity associated with different meter sizes and serve as a measure of the potential demand that customers may place on the water system.
• Billing and Collection Costs – Allocated based on each customer class’s proportionate share of customer bills.
• Fire Protection Costs – Allocated based on each customer class’s proportionate share of fire protection demand requirements.
• Water Adjudication Costs – Allocated based on each customer class’s proportionate share of total water usage.
The units of service used to allocate costs among customer classes are summarized in Table 18.
Depending on the cost component being allocated, the units of service include annual water usage measured in one hundred cubic feet (CCF), maximum day demand expressed in CCF per day, the number of accounts and EDUs, customer bills, and fire protection demand units.
Annual water usage is used to allocate Base and Water Adjudication costs, reflecting the relationship between these costs and the quantity of water supplied to customers. Extra Capacity (Max Day) costs are allocated based on maximum day demand requirements expressed in CCF per day. Meters and Services costs are allocated using EDUs, which reflect the relative service capacity associated with different meter sizes. Billing and Collection costs are allocated based on the number of customer bills, while Fire Protection costs are allocated based on fire protection demand units. The resulting units of service are presented in Table 18. 24 | P a g e
Table 18 – Units of Service
The allocated revenue requirement for each cost component is then divided by the corresponding unit of service to calculate a unit cost. These costs represent the cost of providing each component of water service on a per unit basis and are subsequently used to allocate costs among customer classes and develop cost-based rates. The unit costs for each cost component are summarized in Table 19.
Table 19 – Cost Per Unit
The cost-of-service allocation for each customer class is determined by applying the unit costs developed in Table 19 to the applicable units of service identified in Table 18. This process allocates the revenue requirement for each cost component to customer classes based on the relative demands they place on the water system and the way in which costs are incurred.
For the account-based and EDU-based cost components, the monthly units of service are converted to annual units by multiplying them by twelve (12) to reflect a full year of service before applying the applicable unit costs. Usage-based and demand-based cost components are allocated using the corresponding annual water usage and maximum day demand units. The resulting allocation of the revenue requirement by customer class and cost component is summarized in Table 20.
Description EDUs
Accounts/
Units
Base
(CCF)
Max Day
(CCF/Day)
Residential 4,037 3,922 544,922 1,532
Tier 1 (0-11 Units) 378,803 897
Tier 2 (11+ Units) 166,119 635
Non-Residential 1,924 676 550,963 1,877
All Flow 550,963 1,877
Fire Service 1,712 68 0 0
All Flow 0 0
Total 7,673 4,666 1,095,885 3,409
Description Base
Extra
Capacity
Max Day
Meters &
Services
Billing &
Collection
Fire
Protection
Water
Adjudication Total
Total Revenue Requirement $ 2,638,672 $ 1,857,147 $ 3,685,836 $ 17,756 $ 54,773 $ 1,200,000 $ 9,454,184 Units of Service 1,095,885 3,409 71,536 55,992 20,540 1,095,885 CCF CCF/Day EDUs/Monthly Bills/Monthly EDUs/Year CCF
Cost Per Unit $ 2.41 $ 544.84 $ 51.52 $ 0.32 $ 2.67 $ 1.10 25 | P a g e
Table 20 – Cost of Service by Customer Class and Cost Component
3.2.5 Rate Design by Unit Cost
The unit costs developed in the previous section are used to develop the proposed water rates for the Test Year. The proposed rate structure consists of both fixed and volumetric rate components designed to recover the costs of providing water service in proportion to the way those costs are incurred. The fixed rate component is based on accounts, EDUs, and the allocated customerrelated costs which are recovered through monthly fixed charges that vary based on meter size.
The volumetric rate component is assessed based on annual customer water consumption and extra capacity requirements (Max Day).
The City currently assesses a Water Adjudication Fee to recover costs associated with groundwater basin management and replenishment activities required under the Hemet-San Jacinto Groundwater Management Program. Because these costs are directly related to maintaining the long-term availability and sustainability of the groundwater resources used to supply customers, the associated revenue requirement is recovered through a volumetric surcharge based on water consumption. This approach allocates the costs in proportion to customer water usage.
The first component of the fixed meter charge is calculated on an EDU basis. It is common practice in the water utility industry to establish a rate structure that includes an incremental service availability charge that reflects the potential demand a customer may place on the water system.
Customers with larger meters will have the ability to place greater demands on the system and therefore pay proportionately higher fixed charges.
The methodology for increasing fixed charges by meter size is based on standardized meter capacity criteria established by the American Water Works Association (AWWA). Under this approach, a standard 3/4-inch water meter (i.e., the typical standard meter size for a single-family residential customer in the City of San Jacinto) is assigned a factor of 1.0 EDU, and larger meter sizes are assigned EDU factors based on their relative hydraulic capacity. These factors provide a consistent and equitable method for allocating fixed costs among customers based on the potential demand associated with their meter size. The applicable EDU factors used in this analysis are summarized in Table 21.
Description EDUs
Accounts/
Units Base (CCF)
Max Day
(CCF/Day)
Water
Adjudication Total
Residential $ 2,496,245 $ 14,925 $ 1,312,063 $ 834,705 $ 596,693 $ 5,254,631 Tier 1 (0-11 Units) $ 912,082 $ 488,978 $ 414,791
Tier 2 (11+ Units) $ 399,981 $ 345,728 $ 181,901
Non-Residential $ 1,189,591 $ 2,573 $ 1,326,609 $ 1,022,442 $ 603,307 $ 4,144,521 All Flow $ 1,326,609 $ 1,022,442 $ 603,307
Fire Service $ 54,773 $ 259 $ - $ - $ - $ 55,031
All Flow $ - $ - $ -
Total $ 3,740,609 $ 17,756 $ 2,638,672 $ 1,857,147 $ 1,200,000 $ 9,454,184 26 | P a g e
Table 21 - AWWA Meter Equivalency Factors
Table 22 provides an illustration of how the AWWA meter-size equivalency factors are applied to the total customer accounts by meter-size to determine the total EDUs that the water system serves.
Table 22 – Total Monthly Accounts & EDUs
The second component of the fixed charge is the customer charge. Unlike meter-related costs, customer costs do not vary based on meter size and are incurred equally for each customer AWWA Factors [1]
Meter Size
5/8 Inch 1.00
3/4 Inch 1.00
1.0 Inch 1.67
1.5 Inch 3.33
2.0 Inch 5.33
3.0 Inch 10.00
4.0 Inch 16.67
6.0 Inch 33.33
8.0 Inch 53.33
10.0 Inch 76.67
Notes:
[1] Meter-size equivalency factors established by
the AWWA and identified in AWWA Standards
C700, M1 and M22.
Description [A] [B] [C]=[A]*[B]
AWWA
Factors
Total
Accounts by
Meter Size
Total EDUS
Meter Size
5/8 Inch 1.00 133 133
3/4 Inch 1.00 3,998 3,998
1.0 Inch 1.67 284 473
1.5 Inch 3.33 44 147
2.0 Inch 5.33 126 672
3.0 Inch 10.00 7 70
4.0 Inch 16.67 39 650
6.0 Inch 33.33 18 600
8.0 Inch 53.33 16 853
10.0 Inch 76.67 1 77
All Customer total 4,666 7,673
Description
27 | P a g e
account. Accordingly, the customer unit cost is applied uniformly to all customer accounts regardless of meter size. Therefore, the customer unit cost of $0.32 is applied equally to each customer account. The two fixed charge components are added together to develop the total proposed fixed charge for each respective meter size. The proposed fixed charges for the Test Year are shown in Table 23.
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Table 23 – Monthly Fixed Charge Calculation
In addition to the fixed charges, volumetric rates were developed to recover costs through charges based on water consumption. Consistent with the City's existing rate structure, residential customers, including both single-family and multi-family residential accounts, are assessed a twotier volumetric rate designed to promote efficient water use while recovering the cost of providing service. Non-residential customers are assessed a uniform volumetric rate under which the rate per unit of water remains constant regardless of the volume consumed.
The volumetric rate consists of two primary cost components: 1) a component for base usage that recovers costs associated with average water usage and 2) a component for peak usage that recovers costs associated with meeting peak demand requirements. The Max Day demand costs from Table 20 are divided by the total annual water usage to calculate the peaking unit costs shown in Table 24.
Capacity
Ratio
Meter
Charge
Customer
Charge
Proposed
Fixed
Charge
1.00 $ 51.52 $ 0.32 $ 51.84
1.00 $ 51.52 $ 0.32 $ 51.84
1.67 $ 85.87 $ 0.32 $ 86.19
3.33 $ 171.75 $ 0.32 $ 172.06
5.33 $ 274.80 $ 0.32 $ 275.11
10.00 $ 515.24 $ 0.32 $ 515.56
16.67 $ 858.74 $ 0.32 $ 859.05
33.33 $ 1,717.47 $ 0.32 $ 1,717.79
53.33 $ 2,747.96 $ 0.32 $ 2,748.28
1.00 $ 2.67 $ 0.32 $ 2.98
1.00 $ 2.67 $ 0.32 $ 2.98
1.67 $ 4.44 $ 0.32 $ 4.76
3.33 $ 8.89 $ 0.32 $ 9.21
5.33 $ 14.22 $ 0.32 $ 14.54
10.00 $ 26.67 $ 0.32 $ 26.98
16.67 $ 44.44 $ 0.32 $ 44.76
33.33 $ 88.89 $ 0.32 $ 89.20
53.33 $ 142.22 $ 0.32 $ 142.54
76.67 $ 204.44 $ 0.32 $ 204.76
143.33 $ 382.22 $ 0.32 $ 382.53
Fire Service
5/8 Inch
3/4 Inch
1.0 Inch
1.5 Inch
2.0 Inch
3.0 Inch
4.0 Inch
6.0 Inch
8.0 Inch
10.0 Inch
12.0 Inch
5/8 Inch
Meter Size
Monthly Fixed Charge:
All Customers
8.0 Inch
3/4 Inch
1.0 Inch
1.5 Inch
2.0 Inch
3.0 Inch
4.0 Inch
6.0 Inch
29 | P a g e
Table 24 – Peaking Unit Cost Calculation
The total system peaking unit cost is then added to the base unit cost to develop the proposed volumetric rate per 100 cubic feet (CCF). Water Adjudication costs are recovered through a separate volumetric surcharge based on water consumption to fund groundwater basin management and replenishment activities. The resulting volumetric charges, including the Water Adjudication Fee, are summarized in Table 25.
Table 25 – Volumetric Rate Calculation
3.2.6 Cost-of-Service and Revenue Check
Following the development of the proposed rates, a cost-of-service revenue check was performed to verify that the rates recover the allocated revenue requirement from each customer class in a manner that is proportional to the cost of providing service. The proposed rates were applied to the customer service units identified in Table 18 to estimate the revenues generated from each customer class.
The resulting revenues were then compared to the allocated cost of service for each customer class to confirm that the proposed rate structure equitably recovers utility costs and is consistent with the cost allocation methodology developed in this analysis. The allocated costs and projected revenues by customer class are summarized in Table 26.
[A] [B] [C]=[A]/[B]
Peaking
Costs
Annual Use
(CCF)
Peaking
Unit Cost
Residential
Tier 1 (0-11 Units) $ 488,978 378,803 $ 1.29
Tier 2 (11+ Units) $ 345,728 166,119 $ 2.08
Non-Residential
All Flow $ 1,022,442 550,963 $ 1.86
Total $ 1,857,147 1,095,885
Customer Class
[A] [B] [C]=[A]+[B]
Base Rate Peaking
Rate
Proposed Rate
($/CCF)
Residential
Tier 1 (0-11 Units) $ 2.41 $ 1.29 $ 3.70
Tier 2 (11+ Units) $ 2.41 $ 2.08 $ 4.49
Non-Residential
All Flow $ 2.41 $ 1.86 $ 4.26
Water Adjudication Fee
All Flow $ 1.10 $ - $ 1.10
Customer Class
30 | P a g e
Table 26 – Proposed Rate Revenues vs. COS
[A] [B] [C]=[A]*[B] [D] [E]=[D]-[C]
Units Proposed
Rates Total Revenue Total COS Revenues
Difference
Calc vs COS
Residential
5/8 Inch 109 $ 51.84 $ 67,808 $ 67,808 $ -
3/4 Inch 3,689 $ 51.84 $ 2,294,912 $ 2,294,912 $ -
1.0 Inch 114 $ 86.19 $ 117,909 $ 117,909 $ -
1.5 Inch 2 $ 172.06 $ 4,130 $ 4,130 $ -
2.0 Inch 8 $ 275.11 $ 26,411 $ 26,411 $ -
Tier 1 (0-11 Units) 378,803 $ 3.70 $ 1,401,059 $ 1,401,059 $ - Tier 2 (11+ Units) 166,119 $ 4.49 $ 745,709 $ 745,709 $ - Non-Residential
5/8 Inch 24 $ 51.84 $ 14,930 $ 14,930 $ -
3/4 Inch 294 $ 51.84 $ 182,896 $ 182,896 $ -
1.0 Inch 170 $ 86.19 $ 175,829 $ 175,829 $ -
1.5 Inch 42 $ 172.06 $ 86,721 $ 86,721 $ -
2.0 Inch 118 $ 275.11 $ 389,560 $ 389,560 $ -
3.0 Inch 7 $ 515.56 $ 43,307 $ 43,307 $ -
4.0 Inch 13 $ 859.05 $ 134,012 $ 134,012 $ -
6.0 Inch 8 $ 1,717.79 $ 164,908 $ 164,908 $ -
All Flow 550,963 $ 4.26 $ 2,349,050 $ 2,349,050 $ -
Fire Service
3/4 Inch 15 $ 2.98 $ 537 $ 537 $ -
4.0 Inch 26 $ 44.76 $ 13,965 $ 13,965 $ -
6.0 Inch 10 $ 89.20 $ 10,705 $ 10,705 $ -
8.0 Inch 16 $ 142.54 $ 27,367 $ 27,367 $ -
10.0 Inch 1 $ 204.76 $ 2,457 $ 2,457 $ -
Water Adjudication Fee 1,095,885 $ 1.10 $ 1,200,000 $ 1,200,000 $ - Total Water System $ 9,454,184 $ 9,454,184 $ -
Customer Class
31 | P a g e
3.3 Sewer Cost-of-Service
As with the water system, the sewer cost-of-service (COS) analysis utilizes the Test Year revenue requirement as the basis for allocating costs to customer classes. The analysis evaluates the costs incurred to provide wastewater collection services and allocates those costs among customer classes based on the demands they place on the sewer collection system. The resulting cost allocations provide the basis for developing rates that equitably recover the cost of service from customers.
The sewer COS analysis was performed through a functionalization, classification, and allocation process, consistent with generally accepted utility ratemaking principles, to determine the cost of service by customer class. Additional information regarding the sewer COS methodology is provided in Appendix C.
3.3.1 Functional Unbundling of Revenue Requirements
The sewer system costs are functionally unbundled into the major cost components associated with providing sewer collection services: Collection, Customer, and Administration.
A brief description of each component is as follows:
• Collection – Costs associated with operating, maintaining, repairing, and replacing the wastewater collection system, including sewer mains, manholes, lift stations, and related infrastructure used to convey wastewater to regional treatment facilities. • Customer – Costs associated with customer service functions, including billing, account administration, collections, recordkeeping, and other customer-related services. • Administration – General and administrative costs, including management, finance, insurance, and other utility support functions that are not directly attributable to a specific operational component.
The allocation of the functionally unbundled revenue requirement for the Test Year is summarized in Table 27.
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Table 27 - Functional Unbundled Cost Allocations
3.3.2 Classification of Revenue Requirements
The functionally unbundled revenue requirement for the sewer system is classified according to how costs are incurred and the factors that drive those costs. For purposes of this analysis, costs were classified into Collection, Customer, and Administration cost components. Collection costs are associated with the operation, maintenance, repair, rehabilitation, and replacement of the sewer collection system. Customer costs include billing, account administration, collections, and other customer-related activities that are generally independent of wastewater flow.
Administration costs include management, finance, insurance, and other utility support functions necessary for the operation of the sewer utility.
Because the City's sewer rates are based on Equivalent Dwelling Units (EDUs), the classified costs are allocated to customer classes based on their proportionate share of total system EDUs. For most customers, EDUs are assigned based on the type of customer and established equivalency factors related to their sewer discharge characteristics, which are directly related to the costs incurred to treat and dispose of that discharge. However, for a limited group of non-residential customers that are billed based on monthly sewer flow, the applicable EDUs are calculated using actual water consumption. Annual water usage is divided by 11 CCF and then by twelve (12) months to determine the equivalent monthly EDUs. This approach converts actual wastewater demand into equivalent residential units, allowing these customers to remain within the City's EDU-based cost allocation methodology while more accurately reflecting their proportional use of the sewer system. The resulting system-wide cost classifications for the Test Year are summarized in Table 28.
Test Year
2026
$ 1,711,302
626,968
$ 2,338,270
(1,580,967)
$ 757,303
$ 738,800
$ 963,952
$ 7,800
$ 750
$ 1,061,812
$ (1,580,967)
$ (434,844)
$ 757,303
[1]
Notes:
Description
Fund Balance [1]
Gross Revenue Requirement
Less Other Revenues
Net Revenue Requirement
Represents a transfer from reserves to provide funding for capital outlay and CIP costs.
Non-Rate Revenue
Total
Other Expenditures & Transfers
Functional Unbundled Revenue Requirement
Total O&M
Pumping
Customer Service
CIP
Collection
Administration
33 | P a g e
Table 28 - Classification of Unbundled Revenue Requirements
3.3.3 Allocation to Customer Classes and Unit Cost
Development
The functionalized and classified revenue requirement is allocated to customer classes based on each customer class's proportionate share of total system Equivalent Dwelling Units (EDUs). EDUs provide a standardized measure of relative wastewater demand and are used to allocate costs among customer classes in proportion to the demands they place on the sewer collection system.
Most customer classes are assigned fixed Equivalent Dwelling Units (EDUs) based on the City's established customer classifications. However, a limited group of non-residential customers, including churches, restaurants, commercial/industrial customers, and schools, are billed based on monthly sewer flow. For these customers, actual water consumption is used to determine the equivalent number of EDUs, allowing sewer charges to more accurately reflect each customer's proportional use of the sewer system.
The units of service used to allocate costs among customer classes are summarized in Table 29.
The units of service consist of customer accounts and associated customer units based on the City's billing records. The resulting allocation factors and unit costs provide the basis for developing cost-based sewer rates.
Component Total
Collection $ 738,800
Administration 963,952
Pumping 7,800
Customer Service 750
CIP 1,061,812
Non-Rate Revenue & Fund Balance (2,015,811)
Total $ 757,303
34 | P a g e
Table 29 – Units of Service
Single Residential
Single Residential 3,747 3,775 488,334 3,700
Single Apartment 1 1 284 2
Sub-Total Single Residential 3,748 3,776 488,618 3,702
Multiple Residential
Apt/Condos per Unit 46 538 68,756 521
Multiple Residential Units 13 21 2,961 22
Multiple Units 217 558 55,644 422
Sub-Total Multiple Residential 276 1,117 127,361 965
Mobile Home Park
12 Units X 8.22 1 12 396 3
76 Units X 8.22 1 76 5,937 45
Mh/Rv Parks Per Unit 11 475 41,610 315
Sub-Total Mobile Home Park 13 563 47,943 363
Commercial
Commercial - 1 Unit 63 63 17,517 133
Commercial per Unit 21 41 13,663 104
Commercial/Industrial [3]
106 152 20,123 152
Sub-Total Commercial 190 256 51,302 389
Church
Church per Unit 2 2 287 2
Church - per water use [3]
18 35 4,571 35
Sub-Total Church 20 37 4,857 37
Hotel/Motel
Hotel/Motel - 1 Unit 1 1 1,131 9
Hotel/Motel per Unit 6 54 6,376 48
Sub-Total Hotel/Motel 7 55 7,507 57
Restaurant
Restaurant - per water use [3]
7 15 2,012 15
Sub-Total Restaurant 7 15 2,012 15
School
Park Hill Elementary 1 1 - 1
School - per water use [3]
15 200 26,399 200
Sub-Total School 16 201 26,399 201
Sewer System Total 4,277 6,020 755,999 5,728
[1]
[2]
[3]
Notes:
Description Total
Customers
For all customers, EDUs are based on the number of dwelling units with the exception of those nonresidential customers billed based on monthly water usage. Please refer to footnote [3] below regarding how the EDUs are calculate for these customer classifications.
Assumed annual residential sewer flows were calculated by taking the average winter consumption for the lowest three months of the most recent full fiscal year of water customer data provided, then determining the factor of the winter average usage to the total annual average monthly water usage for the most recent full fiscal year of water customer data provided. This factor was then applied to the projected monthly average "Test Year" water flows to determine the "Test Year" annual sewer flows.
These non-residential customers are billed based on monthly sewer flow. Therefore, total EDUs are calculated by dividing the annual water usage by 11 CCF and then by 12 months to determine the monthly EDUs. Based on historical monthly usage per residential customer, one (1) Equivalent Dwelling Unit (EDU) equals 11 CCF.
Total EDUs [1] CCF Flows [2] Calculated
EDUs
35 | P a g e
To allocate the sewer system revenue requirement among customer classes, a unit cost is developed based on the total number of system EDUs. The allocated revenue requirement is divided by the corresponding units of service to develop a cost per EDU. The resulting unit cost represents the average cost of providing sewer collection service and forms the basis for allocating costs among customer classes. The calculated unit cost is summarized in Table 30.
Table 30 – Cost Per Unit
The allocation of the revenue requirement to each customer class is based on the cost per unit for each component multiplied by the units of service for each customer class. The study maintains the City's existing customer classifications and billing methodology for individual accounts.
Existing fixed EDU assignments for non-residential accounts reflect the City's historical customer classifications and were not re-evaluated as part of this study. The total costs to be recovered from each customer class by rate component are shown in Table 31. [The rest of this page is intentionally left blank]
Description Sewer Total
Total Revenue Requirement $ 757,303 $ 757,303
Units of Service 6,020
EDUs/Monthly
Cost Per Unit $ 10.48
36 | P a g e
Table 31 – Cost-of-Service by Customer Class and Cost Component Description Sewer Total
Single Residential
Single Residential $ 474,863 $ 474,863
Single Apartment 126 126
Sub-Total Single Residential $ 474,989 $ 474,989
Multiple Residential
Apt/Condos per Unit $ 67,676 $ 67,676
Multiple Residential Units 2,642 2,642
Multiple Units 70,192 70,192
Sub-Total Multiple Residential $ 140,509 $ 140,509
Mobile Home Park
12 units x 8.22 $ 1,509 $ 1,509
76 units x 8.22 9,560 9,560
MH/RV Parks per Unit 59,751 59,751
Sub-Total Mobile Home Park $ 70,821 $ 70,821
Commercial
Commercial - 1 Unit $ 7,925 $ 7,925
Commercial per Unit 5,157 5,157
Commercial/Industrial 19,177 19,177
Sub-Total Commercial $ 32,259 $ 32,259
Church
Church per Unit $ 252 $ 252
Church - Per Water Use 4,356 4,356
Sub-Total Church $ 4,607 $ 4,607
Hotel/Motel
Hotel/Motel - 1 Unit $ 126 $ 126
Hotel/Motel per Unit 6,793 6,793
Sub-Total Hotel/Motel $ 6,919 $ 6,919
Restaurant
Restaurant - Per Water Use $ 1,917 $ 1,917
Sub-Total Restaurant $ 1,917 $ 1,917
School
Park Hill Elementary $ 126 $ 126
School - Per Water Use 25,157 25,157
Sub-Total School $ 25,283 $ 25,283
Total $ 757,303 $ 757,303
37 | P a g e
3.3.4 Cost-of-Service and Revenue Check
Following the development of the proposed sewer rates, a cost-of-service revenue check is performed to verify that the rates recover the allocated revenue requirement from each customer class in a manner that is proportional to the cost of providing service. The proposed rates were applied to the customer service units identified in the analysis to estimate the revenues generated from each customer class.
The proposed sewer rate structure consists primarily of a fixed charge based on EDUs. In addition, certain non-residential customers are assessed a volumetric sewer charge based on metered water consumption. The combination of fixed and volumetric charges for various customer classes is designed to recover the allocated cost of service from each customer class in a fair and equitable manner.
The resulting revenues were then compared to the allocated cost of service for each customer class to confirm that the proposed rate structure is consistent with the cost allocation methodology developed in this analysis. The allocated costs and projected revenues by customer class are summarized in Table 32.
[The rest of this page is intentionally left blank]
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Table 32 – Proposed Rate Revenues vs. COS
[A] [B] [C]=[A]*[B]*12 [D] [E] [F]=[D]*[E] [G]=[C]+[F] [H] [I]=[H]-[G] Monthly
Dwelling
Units
Proposed
Monthly
Fixed Fee
Total Fixed
Fee Revenue
Billable
Annual
Volume
(CCF)
Proposed
Volumetri
c Rate
Total
Volumetri
c Rate
Revenues
Total
Calculated
Revenues
Total COS
Revenues
Difference
Calc vs
COS
Single Residential
Single Residential 3,775 $ 10.48 $ 474,863 N/A N/A N/A $ 474,863 $ 474,863 $ - Single Apartment 1 $ 10.48 126 N/A N/A N/A 126 126 -
Multiple Residential
Apt/Condos per Unit 538 $ 10.48 $ 67,676 N/A N/A N/A $ 67,676 $ 67,676 $ - Multiple Residential Units 21 $ 10.48 2,642 N/A N/A N/A 2,642 2,642 - Multiple Units 558 $ 10.48 70,192 N/A N/A N/A 70,192 70,192 - Mobile Home Park
12 units x 8.22 12 $ 10.48 $ 1,509 N/A N/A N/A $ 1,509 $ 1,509 $ - 76 units x 8.22 76 $ 10.48 9,560 N/A N/A N/A 9,560 9,560 - MH/RV Parks per Unit 475 $ 10.48 59,751 N/A N/A N/A 59,751 59,751 - Commercial
Commercial - 1 Unit 63 $ 10.48 $ 7,925 N/A N/A N/A $ 7,925 $ 7,925 $ - Commercial per Unit 41 $ 10.48 5,157 N/A N/A N/A 5,157 5,157 - Commercial/Industrial 152 N/A N/A 20,123 $ 0.95 $ 19,177 19,177 19,177 - Church
Church per Unit 2 $ 10.48 $ 252 N/A N/A N/A $ 252 $ 252 $ - Church - per water use 35 N/A N/A 4,571 $ 0.95 $ 4,356 4,356 4,356 - Hotel/Motel
Hotel/Motel - 1 Unit 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - Hotel/Motel per Unit 54 $ 10.48 6,793 N/A N/A N/A 6,793 6,793 - Restaurant
Restaurant - per water use 15 N/A N/A 2,012 $ 0.95 $ 1,917 $ 1,917 $ 1,917 $ - School
Park Hill Elementary 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - School - per water use 200 N/A N/A 26,399 $ 0.95 $ 25,157 25,157 25,157 - Total 6,020 $ 706,697 53,104 $ 50,606 $ 757,303 $ 757,303 $ - Description
39 | P a g e
Section 4 – Proposed Test Year Rates
4.1 General
The methodology used to calculate the recommended water and sewer rates proposed herein involves applying the projected customer units of service to the user rates developed in the preceding COS and rate design analyses to calculate the estimated revenues that would be generated. Then, these projected revenues are compared to the estimated Test Year revenue requirements, and the water and sewer rates are adjusted on a percentage basis as necessary until the revenues generated are sufficient to meet the revenue needs of the water and sewer systems.
The COS analyses determined that revenue adjustments are necessary to provide sufficient funding for ongoing operations, capital improvements, reserve funding, debt service obligations, and other utility-related expenditures. Consistent with the findings of the cost-of-service analyses, the proposed rates maintain the City's existing rate structures while adjusting the rates as necessary to recover the projected revenue requirements of each utility system.
The proposed water and sewer rates for the Test Year are summarized in Tables 33 and 34, respectively.
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Table 33 – Proposed Monthly Water Rates
Monthly Fixed Charge:
All Customers
5/8 Inch $ 51.84
3/4 Inch $ 51.84
1.0 Inch $ 86.19
1.5 Inch $ 172.06
2.0 Inch $ 275.11
3.0 Inch $ 515.56
4.0 Inch $ 859.05
6.0 Inch $ 1,717.79
8.0 Inch $ 2,748.28
Fire Service
5/8 Inch $ 2.98
3/4 Inch $ 2.98
1.0 Inch $ 4.76
1.5 Inch $ 9.21
2.0 Inch $ 14.54
3.0 Inch $ 26.98
4.0 Inch $ 44.76
6.0 Inch $ 89.20
8.0 Inch $ 142.54
10.0 Inch $ 204.76
12.0 Inch $ 382.53
Construction Meter
Construction Meter $ 515.56
Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.70
Tier 2 (11+ Units) $ 4.49
All Non-Residential Customers
All Flow $ 4.26
Water Adjudication Fee
All Flow $ 1.10
Description
Proposed
Rates
FY 2026
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Table 34 – Proposed Monthly Sewer Rates
Proposed
Rates
FY 2026
$ 10.48
$ 0.95
$ 10.48
$ 40.31
[1]
[2]
[3]
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
Eastern Municipal Water District (EMWD) provides sewer
treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Sewer (per Sewage Unit)
See Footnote
Notes:
Sewer (per EDU)
Monthly Fixed Charge: [1]
All Customers (Per EDU)
Description
Volumetric Rates Per 100 Cubic Feet: [2]
EMWD Related Charges: [3]
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4.2 Typical Monthly Bill Comparison
In addition to evaluating the
adequacy of the revenues
generated by the proposed
rates, it is important to
understand the impact that
the proposed rate adjustments
will have on utility customers.
Tables 35, 36, and 37 compare
monthly water, sewer, and
combined utility bills under
the existing and proposed
rates at various levels of water
consumption. All sewer bill
comparisons include both the
City's sewer collection charges and Eastern Municipal Water District's (EMWD) wastewater treatment charges.
Figure 1 provides a graphical comparison of existing and proposed combined utility bills for a typical single-family residential customer receiving both water and sewer service. Based on a historical billing analysis, the average single-family residential customer uses approximately 1,100 cubic feet of water per month. Under the proposed rates, the monthly combined utility bill for a typical single-family residential customer is projected to increase by approximately $27.88, from $127.54 to $155.42 per month.
Table 35 – Single-Family Residential Water Bill Impact
Existing Proposed
Residential
3/4 Inch 0 $ 24.89 $ 51.84 $ 26.95
3/4 Inch 100 $ 29.81 $ 56.64 $ 26.83
3/4 Inch 200 $ 34.73 $ 61.44 $ 26.71
3/4 Inch 300 $ 39.65 $ 66.24 $ 26.59
3/4 Inch 400 $ 44.57 $ 71.04 $ 26.47
3/4 Inch 500 $ 49.49 $ 75.83 $ 26.34
3/4 Inch 600 $ 54.41 $ 80.63 $ 26.22
3/4 Inch 700 $ 59.33 $ 85.43 $ 26.10
3/4 Inch 800 $ 64.25 $ 90.23 $ 25.98
3/4 Inch 1,100 $ 79.01 $ 104.63 $ 25.62
3/4 Inch 1,200 $ 84.68 $ 110.22 $ 25.54
3/4 Inch 1,400 $ 96.02 $ 121.39 $ 25.37
3/4 Inch 1,600 $ 107.36 $ 132.57 $ 25.21
3/4 Inch 2,000 $ 130.04 $ 154.93 $ 24.89
3/4 Inch 2,400 $ 152.72 $ 177.28 $ 24.56
Monthly Flow
(CF)
Monthly Charges $ Amount
Difference Description
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Table 36 – Single-Family Residential Sewer Bill Impact
Table 37 – Single-Family Residential Combined Bill Impact
4.3 Rate Comparison with Other Utilities
To provide additional context regarding the proposed rate levels, the analysis includes a comparison of the City's existing and proposed user rates relative to those of neighboring water and sewer utility systems located within the same region. The comparison is intended to provide Existing Proposed
Residential
3/4 Inch 0 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 100 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 200 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 300 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 400 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 500 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 600 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 700 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 800 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,100 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,200 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,400 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 1,600 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 2,000 $ 48.53 $ 50.79 $ 2.26
3/4 Inch 2,400 $ 48.53 $ 50.79 $ 2.26
Description Monthly Flow
(CF)
Monthly Charges $ Amount
Difference Existing Proposed
Residential
3/4 Inch 0 $ 73.42 $ 102.63 $ 29.21
3/4 Inch 100 $ 78.34 $ 107.43 $ 29.09
3/4 Inch 200 $ 83.26 $ 112.23 $ 28.97
3/4 Inch 300 $ 88.18 $ 117.03 $ 28.85
3/4 Inch 400 $ 93.10 $ 121.83 $ 28.73
3/4 Inch 500 $ 98.02 $ 126.62 $ 28.60
3/4 Inch 600 $ 102.94 $ 131.42 $ 28.48
3/4 Inch 700 $ 107.86 $ 136.22 $ 28.36
3/4 Inch 800 $ 112.78 $ 141.02 $ 28.24
3/4 Inch 1,100 $ 127.54 $ 155.42 $ 27.88
3/4 Inch 1,200 $ 133.21 $ 161.01 $ 27.80
3/4 Inch 1,400 $ 144.55 $ 172.18 $ 27.63
3/4 Inch 1,600 $ 155.89 $ 183.36 $ 27.47
3/4 Inch 2,000 $ 178.57 $ 205.72 $ 27.15
3/4 Inch 2,400 $ 201.25 $ 228.07 $ 26.82
Description Monthly Flow
(CF)
Monthly Charges $ Amount
Difference
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a general indication of how the City's rates compare to those of other service providers, and does not evaluate differences in system characteristics, service levels, infrastructure needs, regulatory requirements, or rate structures.
The analysis compares the monthly water and sewer bills for a typical single-family residential customer under the City's existing and proposed rates with those of neighboring utilities. The rates used for the comparison utilities were in effect or adopted as of July 2025 and exclude local taxes, franchise fees, regulatory fees, outside service surcharges, and other utility-specific charges or adjustments.
A comparison of monthly utility bills for a typical single-family residential customer using 1,100 cubic feet of water per month is illustrated in Figure 2.
It should be noted that direct comparisons of water and sewer rates among utilities should be made with the knowledge that numerous factors can influence the level of rates and charges.
Such factors may include, but are not limited to:
• Terms of wholesale water and sewer service agreements; • Timing of recent rate adjustments for comparison providers; • Level of treatment required to produce potable water; • Wastewater treatment requirements and effluent disposal or discharge methods; • Planned capital improvement programs and associated financing methods; 45 | P a g e
• System size, facility age, available treatment capacity, and historical funding from grants, connection fees, or developer contributions;
• General Fund transfers, administrative overhead allocations, or other interfund charges which may account for differences in the level of rates charged; and • Debt obligations, bond covenants, and reserve funding requirements.
No analysis has been performed to evaluate the effect of these factors on the rates charged by the comparison utilities included in Figure 2. Accordingly, the rate comparison is intended to provide general context regarding regional rate levels and should not be interpreted as a direct comparison of utility operating efficiency or financial condition. 46 | P a g e
Section 5 – Projected Operating Results
5.1 General
As a final step in the analysis, pro forma operating statements are developed for the water and sewer utilities to evaluate the projected financial performance of each system over the 5-year Projection Period. The pro forma statements summarize the anticipated revenues, operating expenses, capital expenditures, debt service obligations, reserve funding, and other financial requirements of each utility.
The projected operating results are presented on a cash-flow basis and cover the period through the end of the Projection Period. The pro forma analyses incorporate the proposed rate adjustments developed in the revenue sufficiency and cost-of-service analyses and are intended to demonstrate the ability of the proposed rates to provide sufficient revenues to meet the projected financial needs of each utility while maintaining adequate reserve levels.
The following sections describe the major assumptions and financial components incorporated into the projected operating results for the water and sewer utilities.
5.2 Projected User Rate Revenues
Projected user rate revenues are estimated by applying the existing and proposed rates to the projected customer units of service for both the water and sewer utilities. The resulting revenues were evaluated against the projected financial requirements of each utility, including operating and maintenance expenses, capital expenditures, debt service obligations, reserve funding, and other utility-related costs.
The proposed rates were developed to generate sufficient revenues to meet the projected financial needs of each utility throughout the Projection Period while maintaining the financial stability of the water and sewer utilities. The projected water, sewer, and combined user rate revenues for the Projection Period are summarized in Table 38. [The rest of this page is intentionally left blank]
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Table 38 – Projected User Rate Revenues
The projected revenues include the annual water and sewer rate adjustments anticipated for the remaining years of Projection Period beyond the Test Year. The proposed user rates for which the projected operating results are developed for the entire 5-fiscal year Projection Period are provided in Tables 39 and 40. The rates identified in the following tables reflect the cost of providing service to individual customer classes based on the number and types of customers being served, peak demand factors, and volume of flow.
The proposed rates reflect the results of the revenue sufficiency, cost-of-service, and rate design analyses presented in Sections 2, 3, and 4 of this Report and are designed to recover the projected cost of providing service to each customer class in a fair and equitable manner. [The rest of this page is intentionally left blank]
2026 2027 2028 2029 2030
Water
Residential $ 3,011,967 $ 3,764,960 $ 5,665,637 $ 7,209,236 $ 7,905,011 $ 8,219,284 Non-Residential 2,438,555 3,048,193.0 4,215,525.0 5,364,041.0 5,881,733.0 6,115,569.0 Discount 18,778 23,475.0 36,879.0 46,921.0 51,443.0 53,486.0 Fire Service 86,101 107,625.0 67,414.0 85,781.0 94,060.0 97,798.0 Construction Meter 68,229 85,286.0 122,462.0 155,827.0 170,865.0 177,658.0 H20 Adjudication Surcharge 1,939,717 2,424,645.0 1,476,704.0 1,879,031.0 2,060,381.0 2,142,293.0 Total $7,563,347 $ 9,454,184 $ 11,584,621 $ 14,740,837 $ 16,163,493 $16,806,088 Sewer
Single Residential $ 372,465 $ 474,870 $ 558,077 $ 753,313 $ 878,374 $ 904,655 Multiple Residential 110,180 140,474 165,088 222,842 259,837 267,611 Mobile Home Park 55,535 70,803 83,209 112,319 130,965 134,884 Commercial 25,350 32,322 37,903 51,168 59,666 61,455
Church 3,625 4,623 5,414 7,308 8,522 8,778
Hotel/Motel 5,426 6,917 8,129 10,973 12,794 13,177
Restaurant 1,509 1,924 2,253 3,041 3,546 3,653
School 19,898 25,370 29,708 40,106 46,770 48,173
Total $ 593,988 $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 Total Combined Revenue $ 8,157,335 $ 10,211,487 $12,474,402 $ 15,941,907 $ 17,563,967 $18,248,474 Description Existing
Rates
Projected for Fiscal Year Ending June 30
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Table 39 – Proposed Monthly Water Rates
2026 2027 2028 2029 2030
Monthly Fixed Charge:
All Customers
5/8 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49 3/4 Inch $ 24.89 $ 51.84 $ 75.17 $ 86.45 $ 90.77 $ 93.49
1.0 Inch $ 34.82 $ 86.19 $ 124.98 $ 143.72 $ 150.91 $ 155.44
1.5 Inch $ 59.68 $ 172.06 $ 249.50 $ 286.92 $ 301.27 $ 310.31
2.0 Inch $ 89.51 $ 275.11 $ 398.91 $ 458.75 $ 481.69 $ 496.14
3.0 Inch $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.68 $ 929.76
4.0 Inch $ 323.13 $ 859.05 $ 1,245.63 $ 1,432.47 $ 1,504.09 $ 1,549.22
6.0 Inch $ 656.17 $ 1,717.79 $ 2,490.79 $ 2,864.41 $ 3,007.63 $ 3,097.86
8.0 Inch $ 1,202.94 $ 2,748.28 $ 3,985.00 $ 4,582.75 $ 4,811.89 $ 4,956.24 Fire Service
5/8 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
3/4 Inch $ 24.89 $ 2.98 $ 4.33 $ 4.98 $ 5.22 $ 5.38
1.0 Inch N/A $ 4.76 $ 6.90 $ 7.94 $ 8.34 $ 8.59
1.5 Inch N/A $ 9.21 $ 13.35 $ 15.35 $ 16.12 $ 16.60
2.0 Inch N/A $ 14.54 $ 21.08 $ 24.24 $ 25.46 $ 26.22
3.0 Inch N/A $ 26.98 $ 39.13 $ 44.99 $ 47.24 $ 48.66
4.0 Inch $ 41.18 $ 44.76 $ 64.90 $ 74.64 $ 78.37 $ 80.72
6.0 Inch $ 119.60 $ 89.20 $ 129.35 $ 148.75 $ 156.19 $ 160.87
8.0 Inch $ 254.80 $ 142.54 $ 206.68 $ 237.68 $ 249.56 $ 257.05
10.0 Inch $ 458.23 $ 204.76 $ 296.90 $ 341.44 $ 358.51 $ 369.26
12.0 Inch $ 740.17 $ 382.53 $ 554.67 $ 637.88 $ 669.77 $ 689.86 Construction Meter
Construction Meter $ 183.96 $ 515.56 $ 747.56 $ 859.69 $ 902.67 $ 929.75 Volumetric Rates Per 100 Cubic Feet:
Residential
Tier 1 (0-11 Units) $ 3.15 $ 3.70 $ 5.36 $ 6.17 $ 6.48 $ 6.67 Tier 2 (11+ Units) $ 3.90 $ 4.49 $ 6.51 $ 7.49 $ 7.86 $ 8.10 All Customers
All Flow $ 3.73 $ 4.26 $ 6.18 $ 7.11 $ 7.46 $ 7.69
Water Adjudication Fee
All Flow $ 1.77 $ 1.10 $ 1.60 $ 1.83 $ 1.93 $ 1.98
Description Existing
Rates
Projected for Fiscal Year Ending June 30
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Table 40 – Proposed Monthly Sewer Rates
The projected user rates presented for periods beyond the Test Year are intended for long-term financial planning purposes and are provided to illustrate the estimated rate adjustments that may be necessary to meet the projected financial needs of the water and sewer utilities. The projected rates are based on the customer, usage, expenditure, and revenue assumptions incorporated into this rate study.
Because the projected operating results are dependent upon numerous assumptions, actual results may differ from those presented herein. To the extent that actual customer growth, water usage, operating costs, capital expenditures, or other financial conditions differ from the assumptions used in this analysis, future rate adjustments may be required.
For informational purposes, the projected monthly bill for a typical single-family residential customer is presented for each year of the Projection Period. An illustration of the projected bill path is provided in Figure 3.
2026 2027 2028 2029 2030
$ 8.22 $ 10.48 $ 14.15 $ 19.10 $ 19.67 $ 20.26
$ 0.75 $ 0.95 $ 1.29 $ 1.74 $ 1.79 $ 1.84
$ 8.22 $ 10.48
$ 40.31 $ 40.31
[1] Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below. [2]
[3]
Subject to EMWD Updated Rates
Subject to EMWD Updated Rates
See Footnote
Description
Eastern Municipal Water District (EMWD) provides sewer treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates. The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Existing
Rates
Projected for Fiscal Year Ending June 30
Monthly Fixed Charge: [1]
Volumetric Rates Per 100 Cubic Feet: [2]
EMWD Related Charges: [3]
All Customers (Per EDU)
Sewer (per EDU)
Sewer (per Sewage Unit)
Notes:
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5.3 Debt Service Coverage
The water utility operating statement also includes a calculation of annual debt service coverage.
Because the sewer utility does not have any debt service obligations during the Projection Period, a debt service coverage calculation is not applicable and has not been included. Debt service coverage is a commonly used financial metric that measures the utility's ability to generate sufficient revenues to meet its annual debt service obligations and is often considered an indicator of financial strength.
For purposes of this analysis, debt service coverage is calculated by dividing net revenues by the annual debt service requirement. Net revenues consist of total operating revenues, including user rate revenues and other revenues, less operating and maintenance expenses.
The debt service coverage results are provided for planning and informational purposes only and are not intended to represent a legally binding calculation for bond covenant compliance or representation to existing or prospective bondholders. The projected debt service coverage for the water utility is summarized in Table 41.
Table 41 – Projected Water Debt Service Coverage Ratio
Fiscal Year Projected
2026 2.30
2027 4.66
2028 7.45
2029 8.35
2030 8.39
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5.4 Summary of Projected Operating Results
The projected operating results for the water and sewer utilities are summarized in Tables 42 and 43, respectively. Based on the assumptions incorporated into this analysis, the proposed rates and charges, together with other utility revenues, are projected to generate sufficient revenues to meet the anticipated operating, capital, debt service, reserve funding, and other financial requirements of each utility throughout the Projection Period.
The projected operating results demonstrate that the proposed rates provide a financially sustainable funding plan for the water and sewer utilities while maintaining the City's existing rate structures and supporting the continued operation, maintenance, repair, and replacement of utility infrastructure. The complete cash-flow statements for the water and sewer utilities are provided in Appendix D.
Table 42 – Water System Projected Operating Results
2026 2027 2028 2029 2030
Revenues:
Water Sales $ 7,563 $ 9,454 $ 11,585 $ 14,741 $ 16,163 $ 16,806 Other Revenues 230 230 230 230 230 230
Total Revenues $ 7,793 $ 9,684 $ 11,815 $ 14,971 $ 16,393 $ 17,036 Less O&M Expenses (7,546) (7,546) (7,426) (7,841) (8,286) (8,763) Income Available for Debt Service $ 247 $ 2,138 $ 4,389 $ 7,130 $ 8,108 $ 8,273 Debt Service:
Existing $ 930 $ 930 $ 942 $ 957 $ 971 $ 987
Total Indebtedness $ 930 $ 930 $ 942 $ 957 $ 971 $ 987
Net Results $ (683) $ 1,208 $ 3,446 $ 6,173 $ 7,137 $ 7,287 Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 3,448 $ 3,448 $ 2,481 $ 2,441 $ 2,578 $ 2,724 Deposit/(Withdrawal) from Operations (683) 1,208 3,446 6,173 7,137 7,287 Transfer from/(to) Capital Reserve Fund (234) (2,125) (3,436) (5,987) (6,941) (7,080) Transfer to Capital Fund (50) (50) (50) (50) (50) (50)
Total Operating Fund Balance $ 2,481 $ 2,481 $ 2,441 $ 2,578 $ 2,724 $ 2,881 Operating Days Cash on Hand 120 120 120 120 120 120
Capital Fund
Beginning Balance $ 1,097 $ 1,097 $ 1,272 $ 505 $ 864 $ 794 Transfer from/(to) Operating Fund 234 2,125 3,436 5,987 6,941 7,080 Water Capital Improvement Revenue 50 50 50 50 50 50
Cash Funded Capital Projects (2,000) (2,000) (4,253) (5,678) (7,062) (5,895) Total Capital Fund Balance $ (619) $ 1,272 $ 505 $ 864 $ 794 $ 2,029 Water Enterprise Reserves
Beginning Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Revenues Toward Debt Service Payment $ 930 $ 930 $ 942 $ 957 $ 971 $ 987 Annual Debt Service Payment (930) (930) (942) (957) (971) (987) Ending Fund Balance $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 $ 1,150 Total Fund Balance - Water $ 3,012 $ 4,903 $ 4,096 $ 4,592 $ 4,668 $ 6,059 Debt Coverage 0.27 2.30 4.66 7.45 8.35 8.39
Description Existing
Rates
Projected for Fiscal Year Ending June 30 ($1,000s)
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Table 43 – Sewer System Projected Operating Results
2026 2027 2028 2029 2030
Revenues:
Wastewater Sales $ 594 $ 757 $ 890 $ 1,201 $ 1,400 $ 1,442 Other Revenues 1,053 1,581 1,320 1,322 1,324 1,326
Total Revenues $ 1,647 $ 2,338 $ 2,209 $ 2,523 $ 2,724 $ 2,769 Less O&M Expenses (1,711) (1,711) (1,780) (1,852) (1,926) (2,005) Income Available for Debt Service $ (64) $ 627 $ 429 $ 671 $ 798 $ 764 Net Results $ (64) $ 627 $ 429 $ 671 $ 798 $ 764
Reserve Fund Balance Activity:
Operating Fund
Beginning Balance $ 1,933 $ 1,933 $ 563 $ 585 $ 609 $ 633 Deposit/(Withdrawal) from Operations (64) 627 429 671 798 764 Transfer from/(to) Capital Reserve Fund (1,276) (1,967) (377) (618) (743) (708) Transfer to Capital Fund (30) (30) (30) (30) (30) (30)
Total Operating Fund Balance $ 563 $ 563 $ 585 $ 609 $ 633 $ 659 Days Cash on Hand 120 120 120 120 120 120
Capital Fund
Beginning Balance $ 156 $ 156 $ 1,091 $ 422 $ 325 $ 404 Transfer from/(to) Operating Fund 1,276 1,967 377 618 743 708 Sewer Connection Fee Revenue 30 30 30 30 30 30
Cash Funded Capital Projects (1,062) (1,062) (1,076) (744) (695) (486) Total Capital Fund Balance $ 400 $ 1,091 $ 422 $ 325 $ 404 $ 656 Total Fund Balance - Sewer $ 963 $ 1,654 $ 1,007 $ 934 $ 1,037 $ 1,315 Debt Coverage N/A N/A N/A N/A N/A N/A
Description Existing
Rates
Projected for Fiscal Year Ending June 30 ($1,000s)
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Section 6 – Conclusions and Recommendations
6.1 Disclaimers
6.1.1 General Disclaimer
In the development of the proposed user rates and charges, certain historical reviews and analyses have been performed, together with the application of assumptions based on prudent financial, operational, and ratemaking relationships. The cost criteria and customer usage characteristics associated with general ratemaking procedures are representative of averages and are not intended as indicators of any individual customer.
In the preparation of the rate study, certain assumptions have been made with respect to conditions that may occur in the future. While it is believed that these assumptions are reasonable for the purpose of this rate study, they are dependent upon future events and actual conditions may differ from those assumed. In addition, the study has used and relied upon certain information that was provided by other parties not associated with Willdan. Such information includes, among other things, the City’s audited financial statements, annual operating budgets, periodic reports, and other information and data provided by the City, its independent auditors, and other sources. While the sources are believed to be reliable, there has been no independent verification of the information, and no assurances are offered with respect thereto. To the extent that future conditions differ from those assumed herein or provided by others, the actual results may vary from those projected.
6.1.2 Municipal Advisory Disclaimer
Unless the City of San Jacinto, California (the “City”) has a written engagement from Willdan Financial Services (“Willdan”) for municipal advisory services, Willdan is not advising or recommending any action be taken by the recipient of this information with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues). The City shall discuss any such information and material contained in Willdan’s work product with all internal and/or external advisors and experts, including its own municipal advisor, that it deems appropriate before acting on the information and material.
For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cash-flow analyses, feasibility studies and/or other analyses Willdan may provide the City with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the City, (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the City, in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any revisions or amendments thereto. 54 | P a g e
6.2 Conclusions
As previously addressed, the purpose of this study is to provide a review of the City’s existing utility rates to determine if rate adjustments are necessary to meet the budgeted and/or projected financial needs in future years. This Report is the result of the collaborative efforts of representatives from both the City and Willdan. City staff were diligent and cooperative in their efforts to ensure the availability and quality of source data on financial and operating matters.
Based on the reviews, analyses and assumptions discussed herein, it is concluded that:
1. The proposed user rates and charges are anticipated to generate sufficient revenues to meet the revenue requirements of each respective system based upon the projected expenditures, capital project timing and costs, transfers, and billable customer units estimated for the Test Year. The proposed rates were developed based on an assumed implementation date of January 1, 2026. To the extent that the actual implementation date varies from the assumed implementation date, additional rate adjustments and/or appropriations from existing reserves may be necessary.
2. The estimated revenues and resulting rate adjustments for the remaining years of the Projection Period beyond the Test Year are generated from the historical analyses and discussions with City staff.
3. The projection of billable water and sewer units is based on historical customer usage patterns and average units per account by customer class. For purposes of the Projection Period, average usage is assumed to remain generally consistent with recent historical levels unless otherwise adjusted based on discussions with staff. Actual billable demands may vary due to weather conditions, rainfall, and other factors that influence customer usage.
4. Future capital improvement projects are assumed to occur as reported by the City in its Capital Improvement Plan. To the extent that the timing of such projects may change from that estimated herein, the cost of such projects and resulting impact on future rates and charges may vary from those indicated.
5. The proposed rates and rate structure are consistent with industry standards for ratesetting practices, comply with Proposition 218, and conform to the City’s financial policies with respect to:
a. Equitably recovering costs;
b. Being based upon the proportionate cost of providing services; and c. Generating sufficient revenue to recover system revenue requirements, meet debt service coverage requirements, fund capital needs, and meet reserve requirements. 55 | P a g e
6.3 Recommendations
Based on the reviews, analyses, and assumptions addressed herein, as well as the resulting conclusions provided above, it is respectfully recommended that the City:
1. Adopt the proposed water and sewer rates.
2. Enact the proposed rates to become effective as of January 1, 2027 (or other such date as determined by the City). Based on the timing of the project and the required public hearing procedures and noticing requirements, it is expected that the proposed water and sewer rates will become effective on the recommended date.
3. Readdress the COS analysis portion of this study every three to five years to ensure costs are recovered consistently with COS principles and customer characteristics.
We appreciate the opportunity to be of service to the City in this engagement. In addition, we would like to thank City staff for the valuable assistance provided during the completion of the rate study.
Respectfully Yours,
WILLDAN FINANCIAL SERVICES
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendices
A Revenue Requirement for User Rates
B Water Cost-of-Service Analysis
C Sewer Cost-of-Service Analysis
D 10-Year Financial Projections
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix A
Revenue Requirement for User
Rates
APPENDIX - A
CITY OF SAN JACINTO, CA
DEVELOPMENT OF RATE REVENUE REQUIREMENTS
[A] [B] [C]=[A]*[B] [D] [E]=[A]*[D]
FY 2026 % to Water Water % to Sewer Sewer
1 Total Operating Revenues $ 12,022,454 $ 9,684,184 $ 2,338,270 Less:
Other Operating Revenues
2 Interest $ 106,000 100% $ 106,000 0% $ -
3 Miscellaneous Revenue 2,500 100% 2,500 0% -
4 Interest 34,000 100% 34,000 0% -
5 Water Capital Improvement 50,000 100% 50,000 0% -
6 Interest 37,500 100% 37,500 0% -
7 Interest 60,000 0% - 100% 60,000
8 Interest 3,750 0% - 100% 3,750
9 Sewer Connect Fee 30,000 0% - 100% 30,000
10 EMWD Sewer Maintenance Fees 1,487,217 0% - 100% 1,487,217 11 Total Other Operating Revenues $ 1,810,967 $ 230,000 $ 1,580,967 12 Total Rate Revenue Requirement $ 10,211,487 93% $ 9,454,184 7% $ 757,303 Line Test Year for Rate Revenue Requirement
No:
Description
A - 1
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix B Water Cost-of-Service Analysis
APPENDIX - B
CITY OF SAN JACINTO, CA
ALLOCATION OF TEST YEAR COSTS TO WATER FUNCTION
Line No: Expense Group FY 2026
1 Transmission & Distribution $ 1,275,630
2 Pumping 502,100
3 Customer Service 20,250
4 Administration 4,203,436
5 Source of Supply 345,000
6 Water Adjudication 1,200,000
7 Existing Bond DS 929,713
8 New Bond DS -
9 CIP 2,000,000
10 Capital Outlay -
11 Total $ 10,476,129
Test Year Revenue Requirement
B - 1
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER MAX DAY/HOUR ALLOCATION FACTORS - TEST YEAR FY 2026 [A] [B] [C] [D] [E] [F]
Flow
Peak Month
(CCF)
Average
Month
(CCF)
Max Day/Avg
Day Factor
Max Day Total
Capacity
(CCF/Day)
Max Day Extra
Capacity
(CCF/Day)
Operating Statistics: MGD Factor
1 Avg Day Flow (MGD) 2.90 1.00
2 Max Day Flow (MGD) 4.40 1.52
Cost Allocation Factors: Base Max Day Max Hour
3 Base/Max Day 65.91% 34.09% 0.00%
Peaking Factors: [B] / [C]
Residential
4 Tier 1 (0-11 Units) 60,711 32,557 1.86
5 Tier 2 (11+ Units) 35,698 14,910 2.39
Non-Residential
6 All Flow 105,515 47,038 2.24
[D] x [B] [E] - [B]
Estimated Max Day/Hur Flows: Total Annual
Flow (CCF)
Average
Daily Flow
(CCF)
Peaking
Factor
Total Capacity Extra Capacity
Residential
7 Tier 1 (0-11 Units) 378,803 1,038 1.86 1,935 897
8 Tier 2 (11+ Units) 166,119 455 2.39 1,090 635
Non-Residential
9 All Flow 550,963 1,509 2.24 3,386 1,877
10 Total 1,095,885 3,002 6,411 3,409
Maximum Day
Line
No:
Description
B - 2
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER CUSTOMER AND EQUIVALENT RESIDENTIAL UNIT CALCULATION - TEST YEAR FY 2026 [A - 1] [B - 1] [C - 1] [D - 1] [E - 1] [F - 1] [G - 1] [H - 1] Class -->
Inside
Residential
Inside NonResidential Inside DiscountOutside
Residential
Outside NonResidentialOutside
Discount Fire Service
Construction
Meter
Billing Basis--> Units Units Units Units Units Units Units Units 1 0.625 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2 0.75 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
3 1.00 1.67 1.67 1.67 1.67 1.67 1.67 1.67 1.67
4 1.50 3.33 3.33 3.33 3.33 3.33 3.33 3.33 3.33
6 3.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00
7 4.00 16.67 16.67 16.67 16.67 16.67 16.67 16.67 16.67
8 6.00 33.33 33.33 33.33 33.33 33.33 33.33 33.33 33.33
9 8.00 53.33 53.33 53.33 53.33 53.33 53.33 53.33 53.33
10 10.00 76.67 76.67 76.67 76.67 76.67 76.67 76.67 76.67 [A - 2] [B - 2] [C - 2] [D - 2] [E - 2] [F - 2] [G - 2] [H - 2] Class -->
Inside
Residential
Inside NonResidential Inside DiscountOutside
Residential
Outside NonResidentialOutside
Discount Fire Service
Construction
Meter
Billing Basis--> Units Units Units Units Units Units Units Units 11 0.625 105 24 2 2 0 0 0 0 133
12 0.75 3,634 293 26 29 1 0 15 0 3,998
13 1.00 102 164 1 11 6 0 0 0 284
14 1.50 2 38 0 0 4 0 0 0 44
15 2.00 5 117 0 3 1 0 0 0 126
16 3.00 0 1 0 0 0 0 0 6 7
17 4.00 0 12 0 0 1 0 26 0 39
18 6.00 0 8 0 0 0 0 10 0 18
19 8.00 0 0 0 0 0 0 16 0 16
20 10.00 0 0 0 0 0 0 1 0 1
21 Total Monthly Customers 3,848 657 29 45 13 0 68 6 4,666 [A - 1] * [A - 2] [B - 1] * [B - 2] [C - 1] * [C - 2] [D - 1] * [D - 2] [E - 1] * [E - 2] [F - 1] * [F - 2] [G - 1] * [G - 2] [H - 1] * [H - 2] Class -->
Inside
Residential
Inside NonResidential Inside Discount Outside
Residential
Outside NonResidentialOutside
Discount Fire Service
Construction
Meter
Billing Basis--> Units Units Units Units Units Units Units Units 22 0.625 105 24 2 2 0 0 0 0 133
23 0.75 3,634 293 26 29 1 0 15 0 3,998
24 1.00 170 273 2 18 10 0 0 0 473
25 1.50 7 127 0 0 13 0 0 0 147
26 2.00 27 624 0 16 5 0 0 0 672
27 3.00 0 10 0 0 0 0 0 60 70
28 4.00 0 200 0 0 17 0 433 0 650
29 6.00 0 267 0 0 0 0 333 0 600
30 8.00 0 0 0 0 0 0 853 0 853
31 10.00 0 0 0 0 0 0 77 0 77
32 Total Monthly Customers 3,942 1,818 30 65 46 0 1,712 60 7,673 Meter Equivalencies
Total
Total
Meter Size
Meter Size
Meter Size
Customer Accounts
Total Equivalent Dwelling Units
Line
No:
Line
No:
Line
No:
B - 3
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER UNITS OF SERVICE BY COST COMPONENT - TEST YEAR FY 2026 [A] [B] [C] [D]
EDUs
Accounts/
Units Base (CCF)
Max Day
(CCF/Day)
Residential 4,037 3,922 544,922 1,532
1 Tier 1 (0-11 Units) 378,803 897
2 Tier 2 (11+ Units) 166,119 635
Non-Residential 1,924 676 550,963 1,877
3 All Flow 550,963 1,877
Fire Service 1,712 68 0 0
4 All Flow 0 0
5 Total 7,673 4,666 1,095,885 3,409
Line No: Description
B - 4
APPENDIX - B
CITY OF SAN JACINTO, CA
ALLOCATION OF WATER COSTS - TEST YEAR FY 2026
Line
No:
Description Water Costs Base
Extra Capacity
Max Day
Meters & Services
Billing &
Collection
Fire Protection
Water
Adjudication
Total (Check)
Allocation Factors:
1 Transmission & Distribution 44.75% 55.25% 0.00% 0.00% 0.00% 0.00% 100.00% 2 Pumping 44.75% 55.25% 0.00% 0.00% 0.00% 0.00% 100.00% 3 Customer Service 0.00% 0.00% 0.00% 98.54% 1.46% 0.00% 100.00% 4 Administration 0.00% 0.00% 98.54% 0.00% 1.46% 0.00% 100.00% 5 Source of Supply 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 6 Water Adjudication 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% 7 Existing Bond DS 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 8 New Bond DS 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 100.00% 9 CIP 44.75% 55.25% 0.00% 0.00% 0.00% 0.00% 100.00%
10 Capital Outlay 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 100.00% Allocation of Costs:
11 Transmission & Distribution $ 1,275,630 $ 570,884 $ 704,746 $ - $ - $ - $ - $ 1,275,630 12 Pumping 502,100 224,705 277,395 - - - - 502,100
13 Customer Service 20,250 - - - 19,955 295 - 20,250
14 Administration 4,203,436 - - 4,142,177 - 61,259 - 4,203,436 15 Source of Supply 345,000 345,000 - - - - - 345,000
16 Water Adjudication 1,200,000 - - - - - 1,200,000 1,200,000 17 Existing Bond DS 929,713 929,713 - - - - - 929,713
18 New Bond DS - - - - - - - -
19 CIP 2,000,000 895,062 1,104,938 - - - - 2,000,000
20 Capital Outlay - - - - - - - -
21 Non-Rate Rev & Fund Balance (1,021,945) (326,692) (229,932) (456,341) (2,198) (6,781) - (1,021,945) 22 Total $ 9,454,184 $ 2,638,672 $ 1,857,147 $ 3,685,836 $ 17,756 $ 54,773 $ 1,200,000 $ 9,454,184 Total Units of Service 1,095,885 3,409 71,536 55,992 20,540 1,095,885 Units CCF CCF/Day EDUs/Monthly Bills/Monthly EDUs/Year CCF Cost Per Unit $ 2.4078 $ 544.8447 $ 51.5242 $ 0.3171 $ 2.6666 $ 1.0950 Units CCF CCF/Day EDUs/Monthly Bills/Monthly EDUs/Year CCF B - 5
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER COST OF SERVICE BY COST COMPONENT AND CUSTOMER CLASS - TEST YEAR FY 2026 [A] [B] [C] [D] [E] [F]
EDUs
Accounts/
Units
Base (CCF)
Max Day
(CCF/Day)
Water
Adjudication
Total
Residential $ 2,496,245 $ 14,925 $ 1,312,063 $ 834,705 $ 596,693 $ 5,254,631 1 Tier 1 (0-11 Units) $ 912,082 $ 488,978 $ 414,791
2 Tier 2 (11+ Units) $ 399,981 $ 345,728 $ 181,901
Non-Residential $ 1,189,591 $ 2,573 $ 1,326,609 $ 1,022,442 $ 603,307 $ 4,144,521 3 All Flow $ 1,326,609 $ 1,022,442 $ 603,307
Fire Service $ 54,773 $ 259 $ - $ - $ - $ 55,031
4 All Flow $ - $ - $ -
5 Total $ 3,740,609 $ 17,756 $ 2,638,672 $ 1,857,147 $ 1,200,000 $ 9,454,184 Line No: Description
B - 6
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER RATE CALCULATION - TEST YEAR FY 2026
[A] [B] [C] [D] [E] [F]
Capacity
Ratio
Meter
Charge
Customer
Charge
Proposed
Fixed
Charge
Existing
Fixed
Charge
Difference
Monthly Fixed Charge:
Residential
1 5/8 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95
2 3/4 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95
3 1.0 Inch 1.67 $ 85.87 $ 0.32 $ 86.19 $ 34.82 $ 51.37
4 1.5 Inch 3.33 $ 171.75 $ 0.32 $ 172.06 $ 59.68 $ 112.38 5 2.0 Inch 5.33 $ 274.80 $ 0.32 $ 275.11 $ 89.51 $ 185.60 6 3.0 Inch 10.00 $ 515.24 $ 0.32 $ 515.56 $ 183.96 $ 331.60 7 4.0 Inch 16.67 $ 858.74 $ 0.32 $ 859.05 $ 323.13 $ 535.92 8 6.0 Inch 33.33 $ 1,717.47 $ 0.32 $ 1,717.79 $ 656.17 $ 1,061.62 9 8.0 Inch 53.33 $ 2,747.96 $ 0.32 $ 2,748.28 $ 1,202.94 $ 1,545.34 Non-Residential
10 5/8 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95 11 3/4 Inch 1.00 $ 51.52 $ 0.32 $ 51.84 $ 24.89 $ 26.95 12 1.0 Inch 1.67 $ 85.87 $ 0.32 $ 86.19 $ 34.82 $ 51.37 13 1.5 Inch 3.33 $ 171.75 $ 0.32 $ 172.06 $ 59.68 $ 112.38 14 2.0 Inch 5.33 $ 274.80 $ 0.32 $ 275.11 $ 89.51 $ 185.60 15 3.0 Inch 10.00 $ 515.24 $ 0.32 $ 515.56 $ 183.96 $ 331.60 16 4.0 Inch 16.67 $ 858.74 $ 0.32 $ 859.05 $ 323.13 $ 535.92 17 6.0 Inch 33.33 $ 1,717.47 $ 0.32 $ 1,717.79 $ 656.17 $ 1,061.62 18 8.0 Inch 53.33 $ 2,747.96 $ 0.32 $ 2,748.28 $ 1,202.94 $ 1,545.34 Line
No:
Description
B - 7
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER RATE CALCULATION - TEST YEAR FY 2026
[A] [B] [C] [D] [E] [F]
Capacity
Ratio
Meter
Charge
Customer
Charge
Proposed
Fixed
Charge
Existing
Fixed
Charge
Difference
Monthly Fixed Charge (Cont.):
Fire Service
19 5/8 Inch 1.00 $ 2.67 $ 0.32 $ 2.98 $ 24.89 $ (21.91) 20 3/4 Inch 1.00 $ 2.67 $ 0.32 $ 2.98 $ 24.89 $ (21.91) 21 1.0 Inch 1.67 $ 4.44 $ 0.32 $ 4.76 N/A N/A
22 1.5 Inch 3.33 $ 8.89 $ 0.32 $ 9.21 N/A N/A
23 2.0 Inch 5.33 $ 14.22 $ 0.32 $ 14.54 N/A N/A
24 3.0 Inch 10.00 $ 26.67 $ 0.32 $ 26.98 N/A N/A
25 4.0 Inch 16.67 $ 44.44 $ 0.32 $ 44.76 $ 41.18 $ 3.58 26 6.0 Inch 33.33 $ 88.89 $ 0.32 $ 89.20 $ 119.60 $ (30.40) 27 8.0 Inch 53.33 $ 142.22 $ 0.32 $ 142.54 $ 254.80 $ (112.26) 28 10.0 Inch 76.67 $ 204.44 $ 0.32 $ 204.76 $ 458.23 $ (253.47) 29 12.0 Inch 143.33 $ 382.22 $ 0.32 $ 382.53 $ 740.17 $ (357.64) Line
No:
Description Base Rate
Peaking
Rate
Proposed
Rate ($/CCF)
Existing
Rate ($/CCF) Difference Tier Differential
Volumetric Rates Per 100 Cubic Feet:
Residential
30 Tier 1 (0-11 Units) $ 2.41 $ 1.29 $ 3.70 $ 3.15 $ 0.55 1.0000 31 Tier 2 (11+ Units) $ 2.41 $ 2.08 $ 4.49 $ 3.90 $ 0.59 1.2137 Non-Residential
32 All Flow $ 2.41 $ 1.86 $ 4.26 $ 3.73 $ 0.53 1.0000
Water Adjudication Fee
33 All Flow $ 1.10 $ - $ 1.10 $ 1.77 $ (0.67) 1.0000
Line
No:
Description
B - 8
APPENDIX - B
CITY OF SAN JACINTO, CA
WATER RATE CALCULATION - TEST YEAR FY 2026
Line
No:
Customer Class
Annual Use
(CCF)
Peaking
Costs
Peaking
Unit Cost
Residential
1 Tier 1 (0-11 Units) 378,803 $ 488,978 $ 1.2908
2 Tier 2 (11+ Units) 166,119 $ 345,728 $ 2.0812
Non-Residential
3 All Flow 550,963 $ 1,022,442 $ 1.8557
4 Total 1,095,885 $ 1,857,147
B - 9
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix C Sewer Cost-of-Service Analysis
APPENDIX - C
CITY OF SAN JACINTO, CA
ALLOCATION OF TEST YEAR COSTS TO SEWER FUNCTION
Line No: Expense Group FY 2026
1 Collection $ 738,800
2 Administration 963,952
3 Pumping 7,800
4 Customer Service 750
5 Existing Bond DS -
6 New Bond DS -
7 CIP 1,061,812
8 Capital Outlay -
9 Total $ 2,773,114
Test Year Revenue Requirement
C - 1
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER CUSTOMER ACCOUNT & STENGTH CHARACTERISTICS BY CUSTOMER CLASS - TEST YEAR FY 2026 Single Residential
Single Residential 3,747 3,775 488,334 3,700
Single Apartment 1 1 284 2
Sub-Total Single Residential 3,748 3,776 488,618 3,702
Multiple Residential
Apt/Condos per Unit 46 538 68,756 521
Multiple Residential Units 13 21 2,961 22
Multiple Units 217 558 55,644 422
Sub-Total Multiple Residential 276 1,117 127,361 965
Mobile Home Park
12 units x 8.22 1 12 396 3
76 units x 8.22 1 76 5,937 45
MH/RV Parks per Unit 11 475 41,610 315
Sub-Total Mobile Home Park 13 563 47,943 363
Commercial
Commercial - 1 Unit 63 63 17,517 133
Commercial per Unit 21 41 13,663 104
Commercial/Industrial [3]
106 152 20,123 152
Sub-Total Commercial 190 256 51,302 389
Church
Church per Unit 2 2 287 2
Church - per water use [3]
18 35 4,571 35
Sub-Total Church 20 37 4,857 37
Line No: Description
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
Total
Customers
Total EDUs [1] CCF Flows [2] Calculated
EDUs
C - 2
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER CUSTOMER ACCOUNT & STENGTH CHARACTERISTICS BY CUSTOMER CLASS - TEST YEAR FY 2026 Line No: Description Total
Customers
Total EDUs [1] CCF Flows [2] Calculated
EDUs
Hotel/Motel
Hotel/Motel - 1 Unit 1 1 1,131 9
Hotel/Motel per Unit 6 54 6,376 48
Sub-Total Hotel/Motel 7 55 7,507 57
Restaurant
Restaurant - per water use [3]
7 15 2,012 15
Sub-Total Restaurant 7 15 2,012 15
School
Park Hill Elementary 1 1 - 1
School - per water use [3]
15 200 26,399 200
Sub-Total School 16 201 26,399 201
Sewer System Total 4,277 6,020 755,999 5,728
Notes:
[1]
[2]
[3] These non-residential customers are billed based on monthly sewer flow. Therefore, total EDUs are calculated by dividing the annual water usage by 11 CCF and then by 12 months to determine the monthly EDUs. Based on historical monthly usage per residential customer, one (1) Equivalent Dwelling Unit (EDU) equals 11 CCF. 19 20
21 22
Assumed annual residential sewer flows were calculated by taking the average winter consumption for the lowest three months of the most recent full fiscal year of water customer data provided, then determining the factor of the winter average usage to the total annual average monthly water usage for the most recent full fiscal year of water customer data provided. This factor was then applied to the projected monthly average "Test Year" water flows to determine the "Test Year" annual sewer flows. 23 24
25 26
27 For all customers, EDUs are based on the number of dwelling units with the exception of those non-residential customers billed based on monthly water usage. Please refer to footnote [3] below regarding how the EDUs are calculate for these customer classifications.
C - 3
APPENDIX - C
CITY OF SAN JACINTO, CA
ALLOCATION OF SEWER COSTS - TEST YEAR FY 2026
Line No: Description Sewer Costs Sewer Total
Allocation Factors:
1 Collection 100.00% 100.00%
2 Administration 100.00% 100.00%
3 Pumping 100.00% 100.00%
4 Customer Service 100.00% 100.00%
5 CIP 100.00% 100.00%
6 Capital Outlay 100.00% 100.00%
7 Existing Bond DS 100.00% 100.00%
8 New Bond DS 100.00% 100.00%
Allocation of Costs:
9 Collection $ 738,800 $ 738,800 $ 738,800
10 Administration 963,952 963,952 963,952
11 Pumping 7,800 7,800 7,800
12 Customer Service 750 750 750
13 CIP 1,061,812 1,061,812 1,061,812
14 Capital Outlay - - -
15 Existing Bond DS - - -
16 New Bond DS - - -
17 Non-Rate Rev & Fund Balance (2,015,811) (2,015,811) (2,015,811) 18 Total $ 757,303 $ 757,303 $ 757,303
Total Units of Service 6,020
Units EDUs/Monthly
Cost Per Unit $ 10.48
Units EDUs/Monthly
C - 4
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER COST OF SERVICE BY COST COMPONENT AND CUSTOMER CLASS - TEST YEAR FY 2026 [A] [B]
Sewer Total
Single Residential
1 Single Residential $ 474,863 $ 474,863
2 Single Apartment 126 126
3 Sub-Total Single Residential $ 474,989 $ 474,989
Multiple Residential
4 Apt/Condos per Unit $ 67,676 $ 67,676
5 Multiple Residential Units 2,642 2,642
6 Multiple Units 70,192 70,192
7 Sub-Total Multiple Residential $ 140,509 $ 140,509
Mobile Home Park
8 12 units x 8.22 $ 1,509 $ 1,509
9 76 units x 8.22 9,560 9,560
10 MH/RV Parks per Unit 59,751 59,751
11 Sub-Total Mobile Home Park $ 70,821 $ 70,821
Commercial
12 Commercial - 1 Unit $ 7,925 $ 7,925
13 Commercial per Unit 5,157 5,157
14 Commercial/Industrial 19,177 19,177
15 Sub-Total Commercial $ 32,259 $ 32,259
Church
16 Church per Unit $ 252 $ 252
17 Church - Per Water Use 4,356 4,356
18 Sub-Total Church $ 4,607 $ 4,607
Hotel/Motel
19 Hotel/Motel - 1 Unit $ 126 $ 126
20 Hotel/Motel per Unit 6,793 6,793
21 Sub-Total Hotel/Motel $ 6,919 $ 6,919
Line No: Description
C - 5
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER COST OF SERVICE BY COST COMPONENT AND CUSTOMER CLASS - TEST YEAR FY 2026 [A] [B]
Sewer Total
Line No: Description
Restaurant
22 Restaurant - Per Water Use $ 1,917 $ 1,917
23 Sub-Total Restaurant $ 1,917 $ 1,917
School
24 Park Hill Elementary $ 126 $ 126
25 School - Per Water Use 25,157 25,157
26 Sub-Total School $ 25,283 $ 25,283
27 Total $ 757,303 $ 757,303
C - 6
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER RATE CALCULATION - TEST YEAR FY 2026
[A] [B] [C] [D] [E] [F] [G] [H] [I] [J]
Fixed Rate
Costs
Monthly
Dwelling
Units
Proposed
Monthly
Fixed Fee
Existing
Monthly
Fixed Fee
Monthly
Fixed Fee
Difference
Volumetric
Rate Costs
Billable
Annual
Volume
(CCF)
Proposed
Volumetric
Rate
Existing
Volumetric
Rate
Volumetric
Rate
Difference
Single Residential
1 Single Residential $ 474,863 3,775 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 2 Single Apartment 126 1 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Multiple Residential
3 Apt/Condos per Unit $ 67,676 538 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 4 Multiple Residential Units 2,642 21 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 5 Multiple Units 70,192 558 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Mobile Home Park
6 12 units x 8.22 $ 1,509 12 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 7 76 units x 8.22 9,560 76 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 8 MH/RV Parks per Unit 59,751 475 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Commercial
9 Commercial - 1 Unit $ 7,925 63 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 10 Commercial per Unit 5,157 41 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 11 Commercial/Industrial N/A N/A N/A N/A N/A 19,177 20,123 $ 0.95 $ 0.75 $ 0.20 Church
12 Church per Unit $ 252 2 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 13 Church - Per Water Use N/A N/A N/A N/A N/A 4,356 4,571 $ 0.95 $ 0.75 $ 0.20 Hotel/Motel
14 Hotel/Motel - 1 Unit $ 126 1 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 15 Hotel/Motel per Unit 6,793 54 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A Restaurant
16 Restaurant - Per Water Use N/A N/A N/A N/A N/A 1,917 2,012 $ 0.95 $ 0.75 $ 0.20 School
17 Park Hill Elementary $ 126 1 $ 10.48 $ 8.22 $ 2.26 N/A N/A N/A N/A N/A 18 School - Per Water Use N/A N/A N/A N/A N/A 25,157 26,399 $ 0.95 $ 0.75 $ 0.20 19 Total $ 706,697 5,618 $ 50,606 53,104
Line No: Customer Class
Non-Residential Classes
Residential Classes
C - 7
APPENDIX - C
CITY OF SAN JACINTO, CA
SEWER REVENUE VS COST OF SERVICE BY CUSTOMER CLASS CHECK - TEST YEAR FY 2026 [A] [B] [C]=[A]*[B]*12 [D] [E] [F]=[D]*[E] [G]=[C]+[F] [H] [I]=[H]-[G] Monthly
Dwelling
Units
Proposed
Monthly
Fixed Fee
Total Fixed
Fee Revenue
Billable
Annual
Volume (CCF)
Proposed
Volumetric
Rate
Total
Volumetric
Rate
Revenues
Total
Calculated
Revenues
Total COS
Revenues
Difference
Calc vs COS
Single Residential
1 Single Residential 3,775 $ 10.48 $ 474,863 N/A N/A N/A $ 474,863 $ 474,863 $ - 2 Single Apartment 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - Multiple Residential
3 Apt/Condos per Unit 538 $ 10.48 $ 67,676 N/A N/A N/A $ 67,676 $ 67,676 $ - 4 Multiple Residential Units 21 $ 10.48 $ 2,642 N/A N/A N/A $ 2,642 $ 2,642 $ - 5 Multiple Units 558 $ 10.48 $ 70,192 N/A N/A N/A $ 70,192 $ 70,192 $ - Mobile Home Park
6 12 units x 8.22 12 $ 10.48 $ 1,509 N/A N/A N/A $ 1,509 $ 1,509 $ - 7 76 units x 8.22 76 $ 10.48 $ 9,560 N/A N/A N/A $ 9,560 $ 9,560 $ - 8 MH/RV Parks per Unit 475 $ 10.48 $ 59,751 N/A N/A N/A $ 59,751 $ 59,751 $ - Commercial
9 Commercial - 1 Unit 63 $ 10.48 $ 7,925 N/A N/A N/A $ 7,925 $ 7,925 $ - 10 Commercial per Unit 41 $ 10.48 $ 5,157 N/A N/A N/A $ 5,157 $ 5,157 $ - 11 Commercial/Industrial 152 N/A N/A 20,123 $ 0.95 $ 19,177 $ 19,177 $ 19,177 $ - Church
12 Church per Unit 2 $ 10.48 $ 252 N/A N/A N/A $ 252 $ 252 $ - 13 Church - per water use 35 N/A N/A 4,571 $ 0.95 $ 4,356 $ 4,356 $ 4,356 $ - Hotel/Motel
14 Hotel/Motel - 1 Unit 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - 15 Hotel/Motel per Unit 54 $ 10.48 $ 6,793 N/A N/A N/A $ 6,793 $ 6,793 $ - Restaurant
16 Restaurant - per water use 15 N/A N/A 2,012 $ 0.95 $ 1,917 $ 1,917 $ 1,917 $ - School
17 Park Hill Elementary 1 $ 10.48 $ 126 N/A N/A N/A $ 126 $ 126 $ - 18 School - per water use 200 N/A N/A 26,399 $ 0.95 $ 25,157 $ 25,157 $ 25,157 $ - 19 Total 6,020 $ 706,697 53,104 $ 50,606 $ 757,303 $ 757,303 $ - Line
No:
Customer Class
C - 8
City of San Jacinto, CA
Comprehensive Water & Sewer Rate Study
Appendix D 10-Year Financial Projections
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - WATER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
REVENUES
Operating Revenues
1 Water Service Charges $ 9,454,184 $ 11,584,621 $ 14,740,837 $ 16,163,493 $ 16,806,088 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 Other Operating Revenues
2 Water Connection Fees $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 3 Sewer Connection Fees - - - - - - - - - -
4 Miscellaneous Revenues 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Non-Operating Revenues
5 Interest 177,500 177,500 177,500 177,500 177,500 177,500 177,500 177,500 177,500 177,500 6 Total Revenues $ 9,684,184 $ 11,814,621 $ 14,970,837 $ 16,393,493 $ 17,036,088 $ 17,284,456 $ 17,284,456 $ 17,284,456 $ 17,284,456 $ 17,284,456 Current Expenses
7 Water Fund $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 $ 9,275,543 $ 9,826,606 $ 10,419,415 $ 11,057,641 $ 11,745,297 8 Sewer Fund - - - - - - - - - -
9 Total Current Expenses $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 $ 9,275,543 $ 9,826,606 $ 10,419,415 $ 11,057,641 $ 11,745,297 10 Income Available for Debt Service $ 2,137,768 $ 4,388,744 $ 7,130,109 $ 8,107,952 $ 8,273,212 $ 8,008,913 $ 7,457,850 $ 6,865,041 $ 6,226,815 $ 5,539,159
DEBT SERVICE
Parity Indebtedness
11 2015 Installment Sale Agreement $ 251,585 $ 264,660 $ 278,462 $ 293,031 $ 308,410 $ 324,643 $ 341,776 $ 359,859 $ 378,946 $ 399,092 12 2025 Installment Purchase Agreement 678,128 677,715 678,429 677,561 678,109 677,988 678,197 677,758 677,584 677,676 Total Parity Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 13 Total Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 14 Net Results of Operations $ 1,208,055 $ 3,446,369 $ 6,173,218 $ 7,137,360 $ 7,286,693 $ 7,006,282 $ 6,437,877 $ 5,827,424 $ 5,170,285 $ 4,462,391
DEBT SERVICE COVERAGE
Debt Service Coverage - Total Indebtedness
Excluding RSF
15 Calculated 2.30 4.66 7.45 8.35 8.39 7.99 7.31 6.62 5.89 5.14 16 Targeted 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 17 Required 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 D - 1
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - WATER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 18 Capital Outlay $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 19 Transfers Out - - - - - - - - - -
20 Transfers In - - - - - - - - - -
21 Net Results $ 1,208,055 $ 3,446,369 $ 6,173,218 $ 7,137,360 $ 7,286,693 $ 7,006,282 $ 6,437,877 $ 5,827,424 $ 5,170,285 $ 4,462,391
RESERVE FUND BALANCE ACTIVITY
Operating Fund - Water
22 Beginning Fund Balance $ 3,447,802 $ 2,481,013 $ 2,441,384 $ 2,577,774 $ 2,724,013 $ 2,880,946 $ 3,049,494 $ 3,230,665 $ 3,425,561 $ 3,635,389 23 Deposit/(Withdrawal) from Operations 1,208,055 3,446,369 6,173,218 7,137,360 7,286,693 7,006,282 6,437,877 5,827,424 5,170,285 4,462,391 24 Transfer from/(to) Capital Reserve Fund (2,124,844) (3,435,998) (5,986,829) (6,941,120) (7,079,761) (6,787,734) (6,206,706) (5,582,528) (4,910,457) (4,186,312) 25 Transfer to Capital Fund - Water Capital Imp. (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) 26 Ending Fund Balance $ 2,481,013 $ 2,441,384 $ 2,577,774 $ 2,724,013 $ 2,880,946 $ 3,049,494 $ 3,230,665 $ 3,425,561 $ 3,635,389 $ 3,861,468 27 Targeted Fund Balance $ 2,481,013 $ 2,441,384 $ 2,577,774 $ 2,724,013 $ 2,880,946 $ 3,049,494 $ 3,230,665 $ 3,425,561 $ 3,635,389 $ 3,861,468 28 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
29 Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 30 Targeted Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 Capital Fund - Water
31 Beginning Fund Balance $ 1,097,113 $ 1,271,957 $ 505,455 $ 864,408 $ 794,016 $ 2,028,571 $ 5,675,600 $ 8,247,042 $ 11,346,789 $ 14,238,808 32 Transfer from/(to) Operating Fund 2,124,844 3,435,998 5,986,829 6,941,120 7,079,761 6,787,734 6,206,706 5,582,528 4,910,457 4,186,312 33 Water Capital Improvement Revenue 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 34 Cash Funded Capital Projects (2,000,000) (4,252,500) (5,677,875) (7,061,513) (5,895,206) (3,190,704) (3,685,264) (2,532,781) (2,068,438) (2,326,992) 35 Ending Fund Balance $ 1,271,957 $ 505,455 $ 864,408 $ 794,016 $ 2,028,571 $ 5,675,600 $ 8,247,042 $ 11,346,789 $ 14,238,808 $ 16,148,129 Water Enterprise Reserves
36 Beginning Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 37 Revenues Toward Debt Service Payment 929,713 942,375 956,891 970,592 986,519 1,002,631 1,019,973 1,037,617 1,056,530 1,076,768 38 Annual Debt Service Payment (929,713) (942,375) (956,891) (970,592) (986,519) (1,002,631) (1,019,973) (1,037,617) (1,056,530) (1,076,768) 39 Ending Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 40 Total Fund Balance - Water $ 4,902,589 $ 4,096,458 $ 4,591,801 $ 4,667,648 $ 6,059,135 $ 9,874,713 $ 12,627,326 $ 15,921,969 $ 19,023,816 $ 21,159,215 D - 2
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - SEWER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
REVENUES
Operating Revenues
1 Sewer Maintenance Fees $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 $ 1,485,726 $ 1,530,503 $ 1,576,719 $ 1,624,037 $ 1,672,461 2 EMWD Sewer Maintenance Fees $ 1,487,217 $ 1,225,810 $ 1,227,921 $ 1,230,185 $ 1,232,449 $ 1,234,712 $ 1,236,976 $ 1,239,240 $ 1,241,504 $ 1,243,767 Other Operating Revenues
3 Water Connection Fees $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 4 Sewer Connection Fees 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 5 Miscellaneous Revenues - - - - - - - - - -
Other Non-Operating Revenues
6 Interest 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 7 Total Revenues $ 2,338,270 $ 2,209,341 $ 2,522,741 $ 2,724,409 $ 2,768,585 $ 2,814,188 $ 2,861,229 $ 2,909,709 $ 2,959,291 $ 3,009,978 Current Expenses
8 Water Fund $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
9 Sewer Fund 1,711,302 1,779,913 1,851,557 1,926,384 2,004,555 2,086,230 2,171,587 2,260,811 2,354,097 2,451,654 10 Total Current Expenses $ 1,711,302 $ 1,779,913 $ 1,851,557 $ 1,926,384 $ 2,004,555 $ 2,086,230 $ 2,171,587 $ 2,260,811 $ 2,354,097 $ 2,451,654 11 Income Available for Debt Service $ 626,968 $ 429,428 $ 671,184 $ 798,025 $ 764,030 $ 727,958 $ 689,642 $ 648,898 $ 605,194 $ 558,324 12 Net Results of Operations $ 626,968 $ 429,428 $ 671,184 $ 798,025 $ 764,030 $ 727,958 $ 689,642 $ 648,898 $ 605,194 $ 558,324
DEBT SERVICE COVERAGE
Debt Service Coverage - Total Indebtedness
13 Calculated N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
14 Targeted 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 15 Required 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 16 Capital Outlay $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 17 Transfers Out - - - - - - - - - -
18 Transfers In - - - - - - - - - -
19 Net Results $ 626,968 $ 429,428 $ 671,184 $ 798,025 $ 764,030 $ 727,958 $ 689,642 $ 648,898 $ 605,194 $ 558,324 Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 D - 3
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - SEWER
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30
RESERVE FUND BALANCE ACTIVITY
Operating Fund - Sewer
20 Beginning Fund Balance $ 1,932,985 $ 562,620 $ 585,177 $ 608,731 $ 633,332 $ 659,032 $ 685,884 $ 713,946 $ 743,280 $ 773,950 21 Deposit/(Withdrawal) from Operations 626,968 429,428 671,184 798,025 764,030 727,958 689,642 648,898 605,194 558,324 22 Transfer from/(to) Capital Reserve Fund (1,967,333) (376,871) (617,630) (743,424) (708,330) (671,106) (631,579) (589,564) (544,525) (496,250) 23 Transfer to Capital Fund - Sewer Connection Fee (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) 24 Ending Fund Balance $ 562,620 $ 585,177 $ 608,731 $ 633,332 $ 659,032 $ 685,884 $ 713,946 $ 743,280 $ 773,950 $ 806,023 25 Targeted Fund Balance $ 562,620 $ 585,177 $ 608,731 $ 633,332 $ 659,032 $ 685,884 $ 713,946 $ 743,280 $ 773,950 $ 806,023 26 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
27 Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 28 Targeted Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 Capital Fund - Sewer
29 Beginning Fund Balance $ 155,538 $ 1,091,059 $ 421,680 $ 325,121 $ 403,970 $ 656,097 $ 1,165,761 $ 1,559,321 $ 1,897,465 $ 2,176,499 30 Transfer from/(to) Operating Fund 1,967,333 376,871 617,630 743,424 708,330 671,106 631,579 589,564 544,525 496,250 31 Sewer Connection Fee Revenue 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 32 Cash Funded Capital Projects (1,061,812) (1,076,250) (744,188) (694,576) (486,203) (191,442) (268,019) (281,420) (295,491) (325,779) 33 Ending Fund Balance $ 1,091,059 $ 421,680 $ 325,121 $ 403,970 $ 656,097 $ 1,165,761 $ 1,559,321 $ 1,897,465 $ 2,176,499 $ 2,376,970 34 Total Fund Balance - Sewer $ 1,653,678 $ 1,006,856 $ 933,852 $ 1,037,301 $ 1,315,128 $ 1,851,644 $ 2,273,267 $ 2,640,745 $ 2,950,448 $ 3,182,993 D - 4
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - COMBINED SYSTEM
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
REVENUES
Operating Revenues
1 Water Service Charges $ 9,454,184 $ 11,584,621 $ 14,740,837 $ 16,163,493 $ 16,806,088 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 $ 17,054,456 2 Sewer Maintenance Fees $ 757,303 $ 889,781 $ 1,201,070 $ 1,400,474 $ 1,442,386 $ 1,485,726 $ 1,530,503 $ 1,576,719 $ 1,624,037 $ 1,672,461 3 EMWD Sewer Maintenance Fees $ 1,487,217 $ 1,225,810 $ 1,227,921 $ 1,230,185 $ 1,232,449 $ 1,234,712 $ 1,236,976 $ 1,239,240 $ 1,241,504 $ 1,243,767 Other Operating Revenues
4 Water Connection Fees $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 5 Sewer Connection Fees 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 6 Miscellaneous Revenues 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Non-Operating Revenues
7 Interest $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 $ 241,250 8 Total Revenues $ 12,022,454 $ 14,023,962 $ 17,493,578 $ 19,117,902 $ 19,804,673 $ 20,098,644 $ 20,145,685 $ 20,194,165 $ 20,243,747 $ 20,294,434 Current Expenses
9 Water Fund $ 7,546,416 $ 7,425,877 $ 7,840,728 $ 8,285,541 $ 8,762,876 $ 9,275,543 $ 9,826,606 $ 10,419,415 $ 11,057,641 $ 11,745,297 10 Sewer Fund 1,711,302 1,779,913 1,851,557 1,926,384 2,004,555 2,086,230 2,171,587 2,260,811 2,354,097 2,451,654 11 Total Current Expenses $ 9,257,718 $ 9,205,790 $ 9,692,285 $ 10,211,925 $ 10,767,431 $ 11,361,773 $ 11,998,193 $ 12,680,226 $ 13,411,738 $ 14,196,951 12 Income Available for Debt Service $ 2,764,736 $ 4,818,172 $ 7,801,293 $ 8,905,977 $ 9,037,242 $ 8,736,871 $ 8,147,492 $ 7,513,939 $ 6,832,009 $ 6,097,483
DEBT SERVICE
Parity Indebtedness
13 2015 Installment Sale Agreement $ 251,585 $ 264,660 $ 278,462 $ 293,031 $ 308,410 $ 324,643 $ 341,776 $ 359,859 $ 378,946 $ 399,092 14 2025 Installment Purchase Agreement 678,128 677,715 678,429 677,561 678,109 677,988 678,197 677,758 677,584 677,676 Total Parity Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 15 Total Indebtedness $ 929,713 $ 942,375 $ 956,891 $ 970,592 $ 986,519 $ 1,002,631 $ 1,019,973 $ 1,037,617 $ 1,056,530 $ 1,076,768 16 Net Results of Operations $ 1,835,023 $ 3,875,797 $ 6,844,402 $ 7,935,385 $ 8,050,723 $ 7,734,240 $ 7,127,519 $ 6,476,322 $ 5,775,479 $ 5,020,715
DEBT SERVICE COVERAGE
Debt Service Coverage - Total Indebtedness
17 Calculated 2.97 5.11 8.15 9.18 9.16 8.71 7.99 7.24 6.47 5.66 18 Targeted 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 19 Required 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 D - 5
APPENDIX - D
CITY OF SAN JACINTO, CA
WATER & SEWER SYSTEM
PROJECTED OPERATING RESULTS - COMBINED SYSTEM
Proposed
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Line Description Fiscal Year Ending June 30 Fiscal Year Ending June 30 20 Capital Outlay $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 21 Transfers Out - - - - - - - - - -
22 Transfers In - - - - - - - - - -
23 Net Results $ 1,835,023 $ 3,875,797 $ 6,844,402 $ 7,935,385 $ 8,050,723 $ 7,734,240 $ 7,127,519 $ 6,476,322 $ 5,775,479 $ 5,020,715
RESERVE FUND BALANCE ACTIVITY
Operating Fund - Combined System
24 Beginning Fund Balance $ 5,380,787 $ 3,043,633 $ 3,026,561 $ 3,186,505 $ 3,357,345 $ 3,539,977 $ 3,735,377 $ 3,944,611 $ 4,168,841 $ 4,409,339 25 Deposit/(Withdrawal) from Operations 1,835,023 3,875,797 6,844,402 7,935,385 8,050,723 7,734,240 7,127,519 6,476,322 5,775,479 5,020,715 26 Transfer from/(to) Capital Reserve Fund (4,092,177) (3,812,869) (6,604,458) (7,684,544) (7,788,091) (7,458,840) (6,838,285) (6,172,092) (5,454,982) (4,682,563) 27 Transfer to Capital Fund - Water Capital Imp. (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) (80,000) 28 Ending Fund Balance $ 3,043,633 $ 3,026,561 $ 3,186,505 $ 3,357,345 $ 3,539,977 $ 3,735,377 $ 3,944,611 $ 4,168,841 $ 4,409,339 $ 4,667,491 29 Targeted Fund Balance $ 3,043,633 $ 3,026,561 $ 3,186,505 $ 3,357,345 $ 3,539,977 $ 3,735,377 $ 3,944,611 $ 4,168,841 $ 4,409,339 $ 4,667,491 30 Variance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
31 Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 32 Targeted Days Cash on Hand 120 120 120 120 120 120 120 120 120 120 Capital Fund - Combined System
33 Beginning Fund Balance $ 1,252,650 $ 2,363,015 $ 927,134 $ 1,189,530 $ 1,197,985 $ 2,684,667 $ 6,841,361 $ 9,806,363 $ 13,244,254 $ 16,415,307 34 Transfer from/(to) Operating Fund 4,092,177 3,812,869 6,604,458 7,684,544 7,788,091 7,458,840 6,838,285 6,172,092 5,454,982 4,682,563 35 Water Capital Improvement Revenue 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 36 Sewer Connection Fee Revenue 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 37 Cash Funded Capital Projects (3,061,812) (5,328,750) (6,422,063) (7,756,089) (6,381,409) (3,382,146) (3,953,283) (2,814,201) (2,363,929) (2,652,771) 38 Ending Fund Balance $ 2,363,015 $ 927,134 $ 1,189,530 $ 1,197,985 $ 2,684,667 $ 6,841,361 $ 9,806,363 $ 13,244,254 $ 16,415,307 $ 18,525,099 39 Variance $ 916,081 $ (554,526) $ (327,690) $ (355,648) $ 1,093,747 $ 5,212,258 $ 8,138,162 $ 11,536,016 $ 14,666,071 $ 16,733,881 Water Enterprise Reserves
40 Beginning Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 41 Revenues Toward Debt Service Payment 929,713 942,375 956,891 970,592 986,519 1,002,631 1,019,973 1,037,617 1,056,530 1,076,768 42 Annual Debt Service Payment (929,713) (942,375) (956,891) (970,592) (986,519) (1,002,631) (1,019,973) (1,037,617) (1,056,530) (1,076,768) 43 Ending Fund Balance $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 $ 1,149,619 44 Total Fund Balance - Combined System $ 6,556,267 $ 5,103,314 $ 5,525,653 $ 5,704,949 $ 7,374,263 $ 11,726,357 $ 14,900,593 $ 18,562,714 $ 21,974,264 $ 24,342,208 D - 6
27368 Via Industria, Suite 200
Temecula, CA 92590
800.755.6864 | Fax: 888.326.6864
951.587.3500 | Fax: 951.587.3510
www.willdan.com
NOTICE OF PUBLIC HEARING REGARDING
PROPOSED CHANGES TO SEWER RATES
Hearing Date & Time: August 4, 2026, 6:30 PM
Hearing Location: San Jacinto Community Center
625 S. Pico Avenue, San Jacinto, CA 92583
Why are you receiving this notice?
The City of San Jacinto (City) is mailing this notice to you because you are a sewer (wastewater) customer, or record owner of property, that receives sewer service from the City. This notice is being provided pursuant to Article XIII D of the California Constitution (commonly referred to as “Proposition 218”), which requires the City to notify property owners and customers of proposed changes to property-related fees, including sewer service charges. This notice describes proposed changes to the City’s sewer rates and provides information regarding the Public Hearing at which the City Council will consider the adoption of the proposed rates. The Public Hearing will be held on August 4, 2026, at 6:30 PM, or as soon thereafter as the matter may be heard, at the San Jacinto Community Center, 625 S. Pico Avenue, San Jacinto, California 92583. If adopted, the proposed rates for sewer service will be in effect for service provided on and after January 1, 2027.
What do sewer rates fund?
The City of San Jacinto owns, operates, and maintains a wastewater collection system that provides sewer service to residential, commercial, industrial, institutional, and other customers throughout the City’s sewer service area. The wastewater utility system is critical infrastructure that protects public health, preserves environmental quality, and supports the continued operation and development of the community. The City operates its own wastewater collection system, which consists of approximately 178 miles of sewer mains ranging in size from 6 to 18 inches in diameter, together with manholes, service laterals, and related collection and conveyance facilities necessary to collect and transport wastewater generated by homes, businesses, schools, parks, and public facilities throughout the community. The wastewater collection system must be continuously maintained and operated to ensure reliable service, minimize the risk of sewer overflows and system failures, and comply with applicable environmental and regulatory requirements.
Wastewater collected within the City’s collection system is conveyed to the Eastern Municipal Water District (EMWD) regional wastewater system for treatment and disposal. The City relies exclusively on EMWD to convey and treat the City’s wastewater at the San Jacinto Valley Regional Water Reclamation Facility through a series of interconnections between the City’s collection facilities and EMWD’s regional system. Sewer rates fund the City’s share of costs associated with wastewater collection, conveyance, treatment, disposal, operations, maintenance, repair, rehabilitation, replacement, regulatory compliance, administration, and long-term capital improvements necessary to maintain reliable wastewater service.
The City has caused to be prepared a comprehensive sewer rate study to evaluate the current and projected financial condition of the sewer utility, assess the costs necessary to provide reliable sewerservice, and determine the funding needed to support operations, maintenance, capital improvements, and other utility obligations over the next five years. Sewer rates are the primary source of revenue used to support the ongoing operation, maintenance, repair, rehabilitation, replacement, and improvement of the City’s wastewater utility infrastructure and facilities. Sewer rate revenues also support reserve funding, emergency response needs, and capital improvement projects necessary to maintain reliable wastewater service and protect public health and the environment. The sewer rates were designed so that revenues from proposed rates do not exceed the amount required to provide the service, nor will rate revenue be used for purposes other than those for which they are imposed.
Why are sewer rate changes needed?
The City has evaluated the financial needs of the sewer utility based on the results of the sewer rate study and financial planning process completed by an independent consultant. The purpose of the study is to evaluate the current and projected costs of providing wastewater service and determine the funding necessary to support ongoing operations, maintenance, capital improvements, regulatory compliance, and financial stability over the planning period.
The City has experienced increasing costs associated with operating and maintaining the wastewater utility system, including increases in labor, materials, construction, treatment, disposal, energy, and regulatory compliance costs. In addition, portions of the wastewater collection system require ongoing rehabilitation, repair, and replacement to maintain reliable service and reduce the risk of system failures and emergency repairs.
The proposed rate adjustments are intended to provide sufficient revenues to support the continued operation and maintenance of the wastewater utility system, fund necessary capital improvements, maintain prudent reserve levels, and ensure the long-term financial stability of the utility. The proposed rates are based on a cost-of-service methodology intended to allocate costs proportionally among customer classes based on the demand and usage characteristics associated with providing sewer service.
The amount of the proposed rates imposed on any parcel or person as an incident of property ownership will not exceed the proportional cost of the service attributable to that parcel, and no charge will be imposed for service unless the service is actually used by, or immediately available to, the property owner or customer.
How are sewer rates determined and how do they work?
To develop rates that generate sufficient revenues to meet the fiscal and operational needs of the wastewater utility, the City evaluated projected revenues and expenditures over a multi-year planning period. Revenue requirements include costs associated with operations, maintenance, repair and replacement of infrastructure, wastewater treatment and disposal, capital improvements, reserve funding, and administrative support necessary to provide reliable wastewater service.
The proposed sewer rates are designed to recover the cost of providing wastewater service in a fair and equitable manner consistent with industry standards and applicable legal requirements. The rates are structured to ensure that customers pay an amount proportional to the cost of serving them based on factors such as wastewater flow characteristics, customer type, and system demand.
The City is proposing to implement the proposed sewer rates as a series of annual adjustments beginning January 1, 2027, and then each January 1 thereafter through and including January 1, 2031. The following sections summarize the proposed rates, which will go into effect and remain in effect unless modified by future City Council action.
Proposed Monthly Sewer Rates – January 1, 2027 through January 1, 2031 Proposed sewer rates consist of one of two rate methodologies being either 1) a monthly fixed charge for all residential customers and certain non-residential customers (e.g., commercial single and multi-unit, certain churches, hotels, and Park Hill Elementary School) charged per Equivalent Dwelling Unit (EDU) regardless of usage or 2) a volumetric charge per 100 cubic feet (100 cubic feet = 1 unit of water = 748 gallons) for certain non-residential customers (e.g., certain churches, all restaurants, commercial/industrial, and all schools except Park Hill Elementary School). Customers are subject to only the monthly fixed charge or the volumetric charge but not both based on property class as noted above. The rate structure was designed so that each customer will be charged an amount that represents their proportional share of the City’s cost of serving them, based on their demand and usage characteristics.
In addition to the City’s sewer rates for collection, and as shown in the following table, EMWD imposes charges for treatment and disposal of customer wastewater. EMWD provides the City’s wastewater treatment and disposal through EMWD’s regional facilities. For customers that receive water service from the City, the EMWD charges are included in your City of San Jacinto utility bill. For customers that do not receive water service from the City, EMWD will bill those properties directly and include the City’s sewer service charges for collection in the EMWD utility bill. Therefore, each sewer service customer is responsible for the City’s collection and distribution sewer rates plus the EMWD treatment and disposal charges. The City does not control EMWD’s charges for sewer treatment and disposal, and it is possible the EMWD charges will increase by varying amounts in future years.
What is the Impact on your sewer bill?
Based on the proposed monthly rates shown in the previous table, effective January 1, 2027, the monthly sewer charge for a single-family residential customer would increase from $8.22 currently to $10.48 per monthly billing period.
The monthly impact of these changes on a single-family residential customer is shown below:
How do you file a protest or participate in the public hearing? The City will consider the new sewer rates at a Public Hearing on Tuesday, August 4, 2026, at 6:30 PM, or as soon thereafter as the matter may be heard, at the San Jacinto Community Center, 625 S. Pico Avenue, San Jacinto, California 92583. At the Public Hearing, the City Council will consider all oral comments and written protests regarding the proposed rates. Any owner or customer of record of a parcel subject to the proposed rates may submit a written protest against the proposed rate revisions. If written protests are filed by a majority of the affected parcels, the proposed rates will not be adopted. If you do not object to the proposed rate revisions, you do not need to take any action.
Written protests must include the following: 1) a statement indicating that the identified property owner or customer of record is in opposition to the proposed sewer rate changes; 2) the street address or Assessor's Parcel Number (APN) for the parcel(s) with respect to which the protest is made; and 3) the name and signature of the owner or customer.
Written protests must be mailed, or hand delivered, to the City Clerk at 595 S. San Jacinto Avenue, San Jacinto, California 92583, and received prior to the start of the public hearing on August 4, 2026, or hand delivered to the City Clerk at the Public Hearing on August 4, 2026, before the conclusion of the public comment portion of the Public Hearing. Protests submitted via e-mail or other electronic means will not be accepted. For any written protest, whether mailed or submitted in person to the City Clerk, please identify on the front of the envelope that the enclosed protest is for the Public Hearing on the Proposed Rate Changes – Sewer Rates.
The City Council will consider all written and oral protests related to the proposed rate changes at the Public Hearing. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest. Upon the conclusion of the Public Hearing, there will be no more written protests accepted, and no more testimony taken, and the City 2027 2028 2029 2030 2031
Monthly Fixed Charge: [1]
All Customers (Per EDU) $ 8.22 $ 10.48 $ 14.15 $ 19.10 $ 19.67 $ 20.26 Volumetric Rates Per 100 Cubic Feet: [2]
See Footnote $ 0.75 $ 0.95 $ 1.29 $ 1.74 $ 1.79 $ 1.84
EMWD Related Charges: [3]
Sewer (per EDU) $ 8.22 $ 10.48
Sewer (per Sewage Unit) $ 40.31 $ 40.31
[1]
[2]
[3]
Subject to EMWD Updated Rates
Eastern Municipal Water District (EMWD) provides sewer treatment services to the City of San Jacinto. These charges are independent of the City's sewer collection rates and will be charged in addition to the City's rates.
The City of San Jacinto has no control over EMWD's rates. The EMWD rates provided in this table are subject to change. No analysis of EMWD's rates was conducted, they are provided for informational purposes only.
Projected For Fiscal Year Beginning January 1
Notes:
Existing
Rates Description
Volumetric sewer charges only apply to the following customer classes: 1) Commercial/Industrial, 2) Church - Per Water Use (excludes Church per Unit), 3) All Restaurants, and 4) All Schools except Park Hill Elementary.
Fixed sewer charges apply to all customer classes except those listed in Footnote 2 below.
Subject to EMWD Updated Rates
Current Sewer
Charge
Proposed Sewer
Charge
Monthly
Increase ($)
$ 8.22 $ 10.48 $ 2.26
Council will consider adoption of the proposed rates described in this notice. If written protests, as outlined above, are not presented by a majority of property owners or customers of record, the City Council will be authorized to adopt the proposed rates. While both property owners and customers of record may submit written protests, only one protest will be counted for each parcel. If adopted, the rates for sewer service will be in effect beginning January 1, 2027 and increase each January 1, through and including January 1, 2031 as provided above.
Exhaustion of Administrative Remedies – Written Legal Objection Procedures Pursuant to California Government Code sections 53759.1 and 53759.2, a person or entity will be prohibited from bringing a judicial action or proceeding alleging that the proposed sewer rates do not comply with Proposition 218 unless that person or entity has submitted a written legal objection to the proposed rates. This is known as an Exhaustion of Administrative Remedies requirement and is separate from the Proposition 218 majority Protest process described above.
Any person or entity that wishes to challenge the proposed sewer rates must first file a written legal objection that specifies the grounds for alleging the City’s noncompliance with the law as described below. Written legal objections must be received by the City no later than 5:00 p.m., Monday, August 3, 2026.
Information related to the written basis for the proposed sewer rate adjustments can be found on the City’s website at www.sanjacintoca.gov. You have the right to request that the City mail the written basis for the proposed sewer rate adjustments directly to you. To request that the written basis be mailed, please call Water Billing at (951) 487-7330, Option
1. Legal objections will only be considered valid if they meet the following procedural and substantive requirements:
• Legal objections must be in writing.
• The City Clerk must receive your written legal objections no later than 5:00 p.m., Monday, August 3, 2026. • Written legal objections must be mailed or hand delivered to the City Clerk’s office at 595 S. San Jacinto Avenue, California 92583.
• Legal objections must include the following information:
o Objectors name, parcel number and/or service address, including a return mailing or email address for City responses to your written objection, and signature.
o A statement that your communication constitutes a legal objection. o A description of the grounds for alleging the City’s noncompliance with the law, with sufficient specificity to allow the City to determine whether any changes to the proposed sewer rates are required. A statement that the proposed sewer rates are too high, or that the proposed sewer rates violate Proposition 218, without an explanation as to the basis of your claim, will be insufficient to constitute a legal objection.
A written protest will not constitute a valid legal objection unless it meets the requirements set forth above. Failure to submit a written legal objection prior to 5:00 p.m. on August 3, 2026, or to meet the requirements set forth above, will bar any right to challenge the proposed sewer service rates through a legal proceeding.
In accordance with Government Code section 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fee or charge, commencing from the later of the effective date of the new rates or of the date of the final passage, adoption, or approval of the resolution adopting the new rates. 24438.00403\45253806.1
Resolution No. 4146