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Water, Sewer and Recycled Water Rate Study Report
Draft Final Report
May 2025
TABLE OF CONTENTS
1. Introduction ..................................................................................................................... 1
1.1 Purpose................................................................................................................... 1
1.2 Overview of the Study ............................................................................................ 1
2. Water Rate Study ............................................................................................................. 6
2.1 Key Water Rate Study Issues................................................................................... 6
2.2 Financial Plan / Water Utility Revenue Requirements............................................ 6
2.3 Capital Improvement Program and Financing....................................................... 10
2.4 Cost-of-Service Analysis........................................................................................ 10
2.4.1 Costs Allocated to Customer Classes.......................................................................... 14
2.5 Current vs. Proposed Water Rate Structures........................................................ 18
2.6 Drought Rate Analysis........................................................................................... 22
3. Sewer Rate Study ........................................................................................................... 24
3.1 Key Sewer Rate Study Considerations................................................................... 24
3.2 Financial Plan / Sewer Utility Revenue Requirements .......................................... 25
3.3 Characteristics of Sewer Customers by Class........................................................ 28
3.4 Rate Design Analysis............................................................................................. 30
3.4.1 Fixed Charges.............................................................................................................. 30
3.4.2 Variable Charges......................................................................................................... 31
3.5 Current and Proposed Wastewater Rates............................................................. 31
4. Recommendations and Next Steps ................................................................................. 33
4.1 Consultant Recommendations.............................................................................. 33
4.2 Next steps............................................................................................................. 33
4.3 NBS’ Principal Assumptions and Considerations................................................... 33 Technical Appendices ............................................................................................................ 34 Appendix A. Water Rate Study Tables and Figures................................................................. 35 Appendix B. Sewer Rate Study Tables and Figures................................................................. 36
TABLE OF FIGURES
Figure 1. Primary Components of a Rate Study.................................................................................................. 2 Figure 2. Summary of Water Revenue Requirements........................................................................................ 9 Figure 3. Summary of Water Reserve Funds...................................................................................................... 9 Figure 4. Allocation Percentages of Revenue Requirements........................................................................... 12 Figure 5. Single Family Meter Size Characteristics........................................................................................... 13 Figure 6. Water Consumption by Customer Class............................................................................................ 13 Figure 7. Capacity Factors by Customer Class.................................................................................................. 14 Figure 8. Number of Meters by Customer Class............................................................................................... 14 Figure 9. Cost Allocation Methodology ............................................................................................................ 15 Figure 10. Capacity Related Costs (fixed share), Customer & Fire Protection Costs Allocation ...................... 16 Figure 11. Meter Equivalency Factors.............................................................................................................. 17 Figure 12. Volumetric Related Costs Allocation ............................................................................................... 17 Figure 13. Summary of Proposed Tier Breakpoints.......................................................................................... 18 Figure 14. Calculation of FY 2025/26 Standard Fixed Meter Charges for SFR Customers ............................... 20 Figure 15. Calculation of FY 2025/26 Standard Fixed Meter Charges for non-SFR Customers........................ 20 Figure 16. Calculation of FY 2025/26 Private Fire Protection Meter Fixed Charges........................................ 20 Figure 17. Calculated Variable Charges for FY 2025/26 ................................................................................... 21 Figure 18. Current and Proposed Water Rates ................................................................................................ 22 Figure 19. FY 2025/26 Calculation of Commodity Costs at Various Levels of Conservation............................ 23 Figure 20. Proposed Drought Rates.................................................................................................................. 23 Figure 21. Summary of Revenue Requirements............................................................................................... 26 Figure 22. Summary of Sewer Reserve Funds.................................................................................................. 28 Figure 23. Development of the Volume Allocation Factor and Discharge Factors .......................................... 29 Figure 24. Development of the Strength Allocation Factor ............................................................................. 29 Figure 25. Development of the Customer Allocation Factor............................................................................ 30 Figure 26. Development of Fixed and Variable Charges .................................................................................. 31 Figure 27. Proposed Wastewater Rates – Fixed Charges................................................................................. 32 Figure 28. Proposed Wastewater Rates – Volumetric Charges........................................................................ 32 Figure 29. Proposed Recycled Water Rates – Volumetric Charges.................................................................. 32 Water and Sewer Rate Study – City of Santa Monica
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1. Introduction
1.1 Purpose
The City of Santa Monica (City) retained NBS to conduct a comprehensive water and sewer rate study (Study) for its water and sewer enterprise funds. The City had several objectives and goals in mind for this study including meeting revenue requirements to maintain reliable water and sewer services, reviewing the rising costs of providing water and sewer services to the community, funding capital improvements to maintain a reliable and resilient infrastructure and changes in costs, and complying with certain legal requirements (e.g., California Constitution Article XIII D, Section 6, which is commonly referred to as Proposition 218 [Prop 218]). The City’s broader objectives in this study include ensuring adequate funding for operating and capital costs, maintaining reasonable reserves, and ensuring revenue stability in utility rates. The rates resulting from this study were developed in a manner that is consistent with industry standard cost-of-service principles. In addition to documenting the rate study methodology, this report is provided with the intent to assist the City in its continuing effort to maintain transparent communications with the residents and community it serves.
Throughout the course of the rate study, NBS worked cooperatively with City staff in developing rate alternatives. Based on input from City Staff, NBS has recommended the water and sewer rates proposed in this study. The purpose of this report is to summarize NBS’ findings resulting from the water, sewer and recycled water rate study. Appendices are included for the purpose of further documenting the analysis and results, and includes the Financial Plan, Cost-of-Service Analysis and Rate Design Tables for the water and sewer utilities, respectively.
1.2 Overview of the Study
Comprehensive rate studies, such as this one, typically include three components: (1) preparation of a financial plan that identifies the net revenue requirements for the utility; (2) analysis of the cost to serve each customer class, and (3) the rate structure design. These steps are shown in Figure 1 and are intended to follow industry standards and reflect the fundamental principles of cost-of-service rate making embodied in the American Water Works Association’s (AWWA) Principles of Water Rates, Fees, and Charges, 1 also
referred to as Manual M1, and the Water Environment Federation’s Financing and Charges for Wastewater Systems (Manual of Practice No. 27).2
Rate studies also address requirements under Prop 218 that rates not exceed the cost of providing the service and be proportionate to the cost of providing service for all customers. In terms of the chronology of the study, the three steps shown in Figure 1 represent the order in which they were performed. 1 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, Manual M1, American Water Works Association (AWWA), 7
th Edition, 2017.
2 Financing and Charges for Wastewater Systems, Manual of Practice No. 27, Water Environment Federation, Fourth Edition, 2018.
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Figure 1. Primary Components of a Rate Study
1 FINANCIAL
PLAN 2
COST-OFSERVICE
ANALYSIS
3 RATE DESIGN
ANALYSIS
Compares current sources and
uses of funds and determines the
revenue needed from rates and
projects rate adjustments.
Proportionally allocates revenue
requirements to the customer
classes in compliance with industry
standards and State Law.
Considers the rate structure that
best meets the City’s need to collect
rate revenue from various types of
customers.
As a part of this rate study, NBS projected revenues, expenditures, and net revenue requirements, performed cost-of-service rate analyses, and recommended new utility rates. Rate increases -- or more accurately, increases in the total revenue collected from rates -- are recommended for both the water and sewer utilities. The following sections in this report present an overview of the methodologies, assumptions, and data used along with the financial plan and rates developed during this study. Detailed tables and figures documenting the development of the proposed rates are provided in the Appendices.
The City provided NBS with the data necessary to conduct the study, including historical, current, and projected revenues and expenditures, number of customer accounts, and water consumption data along with other operational and capital cost information.
FINANCIAL PLAN
As a part of the rate study, NBS projected revenues and expenditures on a cash-flow basis for the next five (5) years. The amount of rate revenue required, that will allow reserves to be maintained at the recommended levels, is known as the net revenue requirement. As current rate revenue falls short of the net revenue requirement, rate adjustments – or more accurately, adjustments in the total revenue collected from rates – are recommended. This report presents an overview of the methodologies, assumptions, and data used along with the financial plan and proposed rates developed in this study.3
COST-OF-SERVICE ANALYSIS
The basic purpose of the cost-of-service analysis (COSA) is to fairly and equitably allocate costs to customer classes. The cost-of-service analysis consists of two major components: (1) the classification of expenses, and (2) the allocation of costs to customer classes. For example, a key task is the “classification” of the water revenue requirements into the following categories:
• Commodity related costs
• Groundwater related costs
• Purchased water related costs
3 The complete financial plans are available in the Appendix A and Appendix B.
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• Conservation related costs
• Capacity related costs
• Customer-service related costs
• Fire protection related costs
For the sewer utility, the normal classification of sewer revenue requirements uses the following categories:
• Flow-related costs
• Strength related costs
• Customer-service related costs
Further details are discussed below and documented in Appendix A and Appendix B.
RATE DESIGN ANALYSIS
During the rate design phase of the study, NBS and City staff worked together to develop rate alternatives that will meet the City’s objectives. It is important for the City to send proper price signals to its customers about the actual cost of providing service. This objective is typically addressed through both the magnitude of the rate adjustments and the rate structure design. In other words, both the amount of revenue collected and the way in which the revenue is collected from customers are important.
Several criteria are typically considered in setting rates and developing sound rate structures. The fundamentals of this process have been well documented in several rate-setting manuals, such as AWWA’s Manual M1. The foundation for evaluating rate structures is generally credited to James C. Bonbright in Principles of Public Utility Rates,
4 which outlines pricing policies, theories, and economic concepts along with various rate designs. The following is a simplified list of the attributes of a sound rate structure:
• Rates should be easy to understand from the customer’s perspective. • Rates should be easy to administer from the utility’s perspective. • Rates should be equitable and non-discriminating (i.e., cost-based). • Rates should promote the efficient allocation of the resource. • There should be continuity in the rate making philosophy over time. • Rates should address other utility policies (e.g., conservation and economic development). • Rates should provide month-to-month and year-to-year revenue stability.
RATE STRUCTURE TERMINOLOGY
This section covers basic rate design criteria that NBS and City staff considered as a part of their review of the rate structure alternatives. One of the most fundamental points in considering rate structures is the relationship between fixed and variable costs. Fixed costs, such as debt service and personnel costs, typically do not vary with the amount of water consumed. In contrast, variable costs, such as the cost of purchased water, chemicals, and electricity, tend to change with the quantity of water sold. Most rate structures contain a fixed, or minimum, charge in combination with a volumetric charge. 4 James C. Bonbright, Albert L. Danielsen, and David R. Kamerschen, Principles of Public Utility Rates, Arlington, VA: Public Utilities Report, Inc., Second Edition, 1988, pp. 383-384.
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Fixed Charges – Fixed charges can be called base charges, minimum monthly charges, customer charges, fixed meter charges, etc. Fixed charges for water utilities are typically based on meter size. For example, a customer with a 2" meter may have a fixed meter charge that is four to five times greater than a 3/4” meter charge based on the meter’s safe operating capacity5. Because a large portion of water utilities’ costs are typically related to meeting capacity requirements, reflecting individual demands for capacity is an important factor in establishing rates for customers.
Volumetric (Consumption-Based) Charges – In contrast, variable costs such as the cost of electricity used in pumping water and chemicals for treatment tend to change with the quantity of water produced or the purchase of imported water. For a water utility, variable charges are generally based on metered consumption and charged on a dollar-per-unit cost (e.g., per 100 cubic feet, or hcf).
Uniform (Single-Tier) Water Rates – There are significant variations in the basic philosophy of variable charge rate structure alternatives. Under a uniform (single tier) rate structure, the cost per unit does not change with consumption, and provides a simple and straightforward approach from the perspective of customer understanding and rate administration/billing.
Tiered Water Charges – The 2015 San Juan Capistrano court decision held that water agencies may only charge tiered rates if they can show that the tiered rates are proportionate to the agency’s higher costs to serve those customers, meaning that caution must be used to ensure that customers are appropriately allocated costs that meet legal requirements.
KEY FINANCIAL ASSUMPTIONS
The NBS rate study was undertaken to address the unique challenges currently facing the water and sewer utilities (e.g., climate change, market volatility, and rising inflation). It is appropriate to conduct an in-depth review of the current rates and rate structure design for both the water and the sewer utility to ensure that the new proposed rates collect sufficient revenues to meet all financial obligations during the five-year rate period.
The following are the key financial assumptions used in the water rate analyses:
Funding of Water Utility Capital Projects – The City will fund planned capital costs using a combination of cash in reserves, additional revenue from the proposed rate increases and new debt issuances. The capital projects listed in the financial plan are from the City’s capital improvement program aimed to maintain a modern water and sewer infrastructure to serve the community.
Reserve Targets – Reserves for operations and capital needs are set at target levels that are consistent with industry standards for utility fund management. Reserve targets used in the analysis are as follows:
• Operating & Maintenance Reserve – target 90 days of operating and maintenance expenses and maintain a minimum of 60 days of operating and maintenance expenses. • Capital Rehabilitation and Replacement Reserve – approximately 3% of net assets. • Rate Stabilization Reserve – target reserve of $1 million and is to remain unchanged from current City policy.
Inflation and Growth Projections:
5 American Water Works Association, “Principles of Water Rates, Fees and Charges” – M1 Manual, p. 202.
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Revenue and expenses for FY 2023/24 through FY 2028/29 were based on the City of Santa Monica’s water fund forecast as provided during FY 2023/2024. For subsequent years following FY 2028/29, the following inflation and growth projections were provided by the City of Santa Monica for use in the rate study:
• Customer growth is estimated at 0.42% annually.
• General cost inflation is estimated at 2.40% annually. • Salary inflation is estimated at 3.00% annually.
• Workers’ compensation insurance is estimated at 8.00% annually. • Medical inflation for miscellaneous employees is estimated between 5.90% to 9.00% annually. • General medical inflation costs are estimated at 1.50% annually. • Dental inflation is estimated at 3.00% annually.
• Employee health contribution is estimated to be between 6.86% to 7.00% annually. • Retirement costs are estimated to increase between 24.17% to 29.84% annually. • General insurance costs are estimated to increase 5.00% annually. • Property insurance costs are estimated to increase 10.00% annually. • Energy costs are estimated to increase by 2.40% annually. • Fuel costs are estimated to increase by 3.00% annually.
The following are the key assumptions used in the sewer rate analyses:
Funding of Sewer Utility Capital Projects – The City will fund planned capital costs using a combination of cash in reserves and additional revenue from the proposed rate increases. The capital projects listed in the financial plan are from the City’s capital improvement program.
Reserve Targets – Reserves for operations and capital needs are set at NBS recommended levels, which are consistent with industry standards for utility fund management. Reserve targets used in the analysis are as follows:
• Operating & Maintenance Reserve – 90 days of operating and maintenance expenses. • Capital Rehabilitation and Replacement Reserve – approximately 3% of net assets. • Rate Stabilization Reserve – target reserve of $1 million and is to remain unchanged from current City policy.
Inflation and Growth Projections:
Revenue and expenses for FY 2023/24 through FY 2028/29 were based on the City of Santa Monica’s water fund forecast as provided during FY 2023/24. For subsequent years following FY 2028/29, the following inflation and growth projections were provided by the City of Santa Monica for use in the rate study:
• Customer growth is estimated at 0.42% annually.
• General cost inflation is estimated at 2.00% annually. • Salary inflation is estimated at 4.00% annually.
• General benefits inflation is estimated at 6.00% annually. • Energy costs are estimated to increase by 5.00% annually. • Chemical costs are estimated to increase by 3.00% annually. • Fuel costs are estimated to increase by 3.00% annually.
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2. Water Rate Study
2.1 Key Water Rate Study Issues
The City’s water rate analysis was undertaken with a few specific objectives, including:
• Generating sufficient revenue to meet anticipated operating and maintenance costs and fund necessary capital improvement projects for the next five years. • Continuing to encourage water conservation with a tiered rate structure. • Provide greater revenue stability for the utility, due to level of capital investment planned over the next five years.
• Verifying the cost-of-service linkage between the current rate structure and the proposed water rates.
• Maintaining adequate reserve levels to ensure continuity in operations. • Complying with the legal requirements of Prop 218 to ensure the cost of providing service is properly allocated amongst user classifications. This was the basis for eliminating tiered water rates.
NBS developed various water rate alternatives as requested by City staff over the course of this study. All rate structure alternatives relied on industry standards, cost-of-service principles, and the requirements of Prop 218. The new rates that will be implemented are ultimately the decision of the City Council.
The following are the basic components included in this analysis:
Developing Cost Allocations – The water revenue requirements were “functionalized” into categories; and then these functionalized costs were then used to develop unit costs based on various factors, such as water consumption, peaking factors, and number of accounts by meter size.
Determining Revenue Requirements by Customer Class – The total revenue that needs to be collected from each customer class was determined using the functional costs and allocation factors. For example, customer costs are allocated based on the number of meters, while volume-related costs are allocated based on the water consumption of each customer class. Once the costs are allocated and the net revenue requirement for each customer class is determined, collecting the revenue requirements from each customer class is addressed within the rate design.
Evaluating Rate Design (Fixed vs. Variable Charges) – The revenue requirements for each customer class are collected from both fixed monthly service charges and variable commodity charges. The City decided to recommend adjusting the existing rate structure that collects 15% fixed/85% variable rate revenue to one with 20% fixed/80% variable rate revenue collection in order to increase revenue stability while also maintaining the City’s commitment to water conservation and sustainability.
2.2 Financial Plan / Water Utility Revenue Requirements It is important for municipal utilities to not only collect sufficient revenues every year, but to also maintain reasonable reserves to handle emergencies, fund working capital, maintain a good credit rating, and generally follow sound financial management practices. Rate adjustments are governed by the need to Water and Sewer Rate Study – City of Santa Monica
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meet operating and capital costs as well as maintain reasonable reserve levels. The current state of the City’s water utility, regarding these objectives, is as follows:
Meeting Net Revenue Requirements6: For FY 2025/26 through FY 2029/30, the projected net revenue requirement (i.e., total annual expenses plus debt service and rate-funded capital costs, less non-rate revenues) increases from approximately $50.2 million to $71.3 million. If no rate adjustments are implemented, the water utility is projected to run an estimated $25.4 million deficit by FY 2029/30. Rate increases of 20% in FY 2025/26, 16% in FY 2026/27, 9% in FY 2027/28 and FY 2028/29, and 6% in FY 2029/30 are recommended in order to fund operating expenses, planned capital projects and meet debt service obligations. These recommended rate increases ensure that the water utility will meet the minimum debt coverage target of 1.25, for both the existing debt service as well as the projected new debt issuance.
Maintaining Reserve Funds: Reserve funds provide a basis for a utility to cope with fiscal emergencies, such as revenue shortfalls, asset failure, and natural disasters, among other events. Reserve policies provide guidelines for sound financial management, with an overall long-range perspective to maintain financial solvency and mitigate financial risks associated with revenue instability, volatile capital costs, and unexpected emergencies.
Building and Maintaining Reserve Funds: The City should maintain sufficient reserves for the Water Utility.
NBS recommends that the City adopt and maintain the following target reserve fund balances:
• Operating Reserve should normally be 90 days of the Utility’s budgeted annual operating expenses, which is equal to a three-month (or 25%) cash reserve for normal operations. The City’s minimum operating reserve target is set equal to 60 days of reserves. An Operating Reserve is intended to promote financial viability in the event of any short-term fluctuation in revenues and/or expenditures, such as those caused by weather patterns, the natural inflow and outflow of cash during billing cycles, natural variability in demand-based revenue streams (e.g., volumetric charges), and – particularly in periods of economic distress – changes or trends in age of receivables. • Capital System Replacement Reserve should typically equal at least 3% of net depreciable capital assets, which equates to a 33-year replacement cycle for capital assets. This target serves as a starting point for addressing long-term capital system replacement needs. • Rate Stabilization Reserve has a target reserve of $1 million and is to remain unchanged from current City policy. This reserve is intended to provide additional financial security to the Utility should any unforeseen revenue shortages or capital emergency occur.
Funding Capital Improvement Projects: The City must also be able to fund necessary capital improvements for the Utility in order to maintain current service levels. City staff has identified a total of roughly $249 million in capital improvements for the City’s water system for the five years. The preferred rate adjustments will be able to fund 100% of the identified capital improvement project needs, with these project costs planned to be funded with a combination of rate revenue, reserve cash on hand, and secure outside financing support (e.g., issuing bonds or apply for federal low interest loan programs aimed to support water and wastewater infrastructure projects) for large, non-routine capital projects such as rehabilitating the City’s water storage reservoirs and replacing the water operations center. Without the 6 A more detailed breakdown of the revenue requirements is provided in Tables 1 and 2 of the Technical Appendix.
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rate increases recommended in this study, the City will not be able to sufficiently fund the identified necessary capital improvements.
Inflation and Growth Projections: Cost inflation and growth assumptions are necessary to project future revenues and expenses for the study period. Customer growth is estimated to be 0.42% annually. This factor was used in the analysis for rate revenues while inflation factors, including the Consumer Price Index,7 were used in projecting expenses. Inflation and growth projections are based on the City’s budgeting fund forecast for the water utility.
Pollution Remediation Liability: During FY2022-2023 Year End Budget Process, the Water Resources Division loaned $15 million from the unrestricted Gillette/Boeing Settlement Funds to the City's General Fund to pay a portion of the $122.5 million settlement agreement against sexual abuse claims against a former City employee and volunteer approved by City Council on April 24, 2023. The General Fund would repay the $15 million loan starting in FY2029-2030. The $15 million loan is from future year remediation costs that will be repaid by the General Fund starting in FY2029-30. The repayment schedule is as follows:
$1.25 million each fiscal year from FY2029-30 through FY2034-35, $1.5 million in FY2035-36, and minimum transfers of $600,000 each year from FY 2036-37 through FY 2046-47. For additional details, please refer to the October 24, 2023 Staff Report for the FY2022-2023 Year-End Budget Review.
Maintaining Adequate Bond Coverage: The City is required by its bond covenant to maintain a debt service coverage ratio of at least 1.25 for the outstanding Water Revenue Bonds. The analysis assumes that the same will be required for the new Revenue Bonds planned to be issued during the projected five-year rate implementation period. The benefit of maintaining at least the minimum coverage ratio is that it strengthens the City’s credit rating, which can help lower the interest rates for debt-funded capital projects, and in turn reduces annual debt service payments. It is projected that, with the proposed rate increases, the City’s revenues will be sufficient to meet the 1.25 debt coverage ratio for existing and planned new debt.
Figure 2 summarizes the sources and uses of funds, net revenue requirements, and the annual percent adjustments in total rate revenue recommended for the next five years. 7 Consumer Price Index for all urban consumers in the Los Angeles area. Source: Website: https://www.bls.gov/cpi/.
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Figure 2. Summary of Water Revenue Requirements
Figure 3 summarizes the projected reserve fund balances and reserve targets.8 A summary of the utility’s proposed 10-year financial plan is included in Table 1 of Appendix A. This Appendix tables include revenue requirements, reserve funds, revenue sources, proposed rate increases, operating revenue and expenses, the City’s capital improvement program, and debt obligations.
Figure 3. Summary of Water Reserve Funds
8 A more detailed breakdown of the reserve funds is provided in the Technical Appendices.
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Sources of Water Funds
Water Rate Revenue
Water Sales Revenue Under Current Rates $ 41,567,286 $ 41,567,286 $ 41,741,869 $ 41,917,184 $ 42,093,237 $ 42,270,028 Revenue from Rate Increases 1
- 8,313,457 16,362,812 21,682,921 27,522,040 31,832,092 Subtotal: Rate Revenue After Rate Increases $ 41,567,286 $ 49,880,743 $ 58,104,681 $ 63,600,106 $ 69,615,276 $ 74,102,120 Non-Rate Revenue
Reimbursement from other funds $ 450,000 $ 463,500 $ 477,405 $ 491,727 $ 507,986 $ 520,177 Water Neutrality Fee Revenue 1,328,296 1,354,862 1,381,959 1,409,598 1,437,790 1,472,297 Charges for Service (other than Rate Revenue) 767,000 767,000 767,000 767,000 767,001 767,001 Investment Income 750,000 221,468 177,395 147,340 173,573 173,573 Other Revenues 555,000 530,000 530,000 530,000 530,002 470,000 Subtotal: Non-Rate Revenue $ 3,850,296 $ 3,336,830 $ 3,333,759 $ 3,345,666 $ 3,416,352 $ 3,403,048 Total Sources of Funds $ 45,417,582 $ 53,217,573 $ 61,438,440 $ 66,945,772 $ 73,031,628 $ 77,505,169 Uses of Water Funds
Operating Expenses
Salaries and Benefits $ 9,457,601 $ 11,873,093 $ 12,362,633 $ 12,777,742 $ 13,359,453 $ 14,558,417 Water Purchases2 5,207,080 5,727,788 6,300,567 6,930,623 7,623,686 7,806,654 Supplies and Expenses 16,503,494 16,733,036 17,082,869 17,374,298 17,747,400 18,052,432 Retirement and OPEB 49,169 51,627 54,209 56,919 59,766 215,663 Interfund Transfers 1,411,672 1,456,843 1,503,367 1,551,285 1,605,655 1,655,982 Subtotal: Operating Expenses $ 32,629,016 $ 35,842,387 $ 37,303,644 $ 38,690,868 $ 40,395,959 $ 42,289,148 Other Expenditures
Debt Service (Interfund Loan Repayment) $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 Debt Service (Water Revenue Bond) 3,553,187 3,554,587 3,553,587 3,551,863 3,550,175 3,550,362 New Debt Service - - - - 8,361,556 8,361,556
Rate-Funded Capital Expenses 13,337,857 13,438,671 18,676,718 21,436,970 19,042,343 19,803,897 Subtotal: Other Expenditures $ 17,597,411 $ 17,699,625 $ 22,936,672 $ 25,695,199 $ 31,660,440 $ 32,422,182 Total Uses of Water Funds $ 50,226,427 $ 53,542,012 $ 60,240,316 $ 64,386,067 $ 72,056,400 $ 74,711,330 Annual Surplus/(Deficit) $ (4,808,845) $ (324,439) $ 1,198,124 $ 2,559,704 $ 975,229 $ 2,793,838 $ 46,376,131 $ 50,205,182 $ 56,906,557 $ 61,040,401 $ 68,640,048 $ 71,308,282 Projected Annual Rate Revenue Adjustment 0.00% 20.00% 16.00% 9.00% 9.00% 6.00%
0.00% 20.00% 39.20% 51.73% 65.38% 75.31%
Debt Coverage After Rate Increase 18.10 24.60 34.17 40.00 3.60 3.88
1. Revenue from rate increases assumes an implementation date of July 1, 2025 and then July 1 each year thereafter.
2. Net of water purchases and Arcadia AOP/UV System that is funded with the Gillette-Boeing Settlement Funds (shown in restricted reserves section of Table 2).
RATE REVENUE REQUIREMENTS SUMMARY Budget
Net Revenue Req't. (Total Uses less Non-Rate
Cumulative Increase from Annual Revenue Increases
Projected
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Operating Reserve
Ending Balance $ 7,951,659 $ 7,627,220 $ 8,825,344 $ 9,672,717 $ 10,098,990 $ 10,572,287 Recommended Minimum Target (90-days O&M) 8,157,254 8,960,597 9,325,911 9,672,717 10,098,990 10,572,287 Capital Rehabilitation & Replacement Reserve
Ending Balance $ 1,339,000 $ 1,339,000 $ 1,339,000 $ 3,051,332 $ 3,600,287 $ 5,920,828 Recommended Minimum Target (3% Net Assets) 1,339,000 1,943,200 2,735,100 3,613,200 4,376,200 4,430,400 Rate Stabilization Reserve
Ending Balance $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 Recommended Minimum Target 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Total Ending Balance $ 10,290,659 $ 9,966,220 $ 11,164,344 $ 13,724,049 $ 14,699,277 $ 17,493,116 Total Recommended Minimum Target $ 10,496,254 $ 11,903,797 $ 13,061,011 $ 14,285,917 $ 15,475,190 $ 16,002,687 Surplus/(Deficit) $ (205,595) $ (1,937,577) $ (1,896,667) $ (561,868) $ (775,913) $ 1,490,428 Beginning Reserve Fund Balances and
Recommended Reserve Targets
Projected
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2.3 Capital Improvement Program and Financing
City staff has identified a total of approximately $249 million in capital improvements for the City’s water system for the five-year implementation period. The preferred rate adjustments will be able to fund 100% of the identified capital improvement project needs, with these project costs planned to be funded with a combination of rate revenue, reserve cash on hand, and outside financing (e.g., revenue bonds or federal low interest loans). Without the rate increases recommended in this study, the City will not be able to sufficiently fund the identified necessary capital improvements Tables 11 through 15 in Appendix A provides a complete list of capital projects that were factored into the financial plan and the cost of each project.
Project costs are listed in current and future values; future values reflect the estimated cost of each project in the year the project is planned, including estimated cost inflation of 3% per year, per the Engineering News Record Construction Cost Inflation Index.
9 The City is planning to secure loan funding in the amount of $139 million to help fund the planned capital improvement program costs during the rate implementation period. The $139 million program includes rehabilitating the City’s four potable water storage reservoirs and replacing the aging water operation center and water quality laboratory. This analysis assumes a conservative debt financing approach for the anticipated State Revolving Fund (SRF) or United States Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act (WIFIA) loan that uses an interest rate of 4.00%, issuance costs of
2.00% of the net proceeds and a debt coverage requirement equal to the annual debt-service payment plus a 25% cushion (i.e., a “1.25 coverage ratio”), which is consistent with the outstanding water revenue bonds coverage requirement. The City also intends to explore the potential of issuing a revenue bond instead of pursuing low interest loans from the State or Federal government to support the $139 million program.
2.4 Cost-of-Service Analysis
Once the net revenue requirements are determined, the cost-of-service analysis (COSA) proportionately distributes the revenue requirements to each of the customer classes. The COSA consists of two major components: (1) the classification of expenses, and (2) the allocation of costs to each customer class. Costs are classified according to the function they serve. All costs in the City’s budget are allocated to each component of the rate structure in proportion to the level of service required by customers.
The level of service is related to the volume and strength of the water treated, infrastructure capacity, and customer service. These costs are based on allocation factors, such as water consumption, number of meters, and customer class. Ultimately, a COSA is intended to result in rates that are proportional to the cost of providing service to each customer class.
FUNCTIONALIZATION AND CLASSIFICATION OF COSTS
Most costs are not typically allocated 100% to fixed or variable categories and, therefore, are allocated to multiple functions of water service. The classification (i.e., functionalization) of costs provides the basis for allocating the classified costs to the following cost causation components:
9 See Table 10 and 11 in Appendix A for the detailed capital projects costs which include projected cost inflation and Table 14 for the cost inflation factors applied to the project costs.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 11
• Base Commodity related costs are those that change as the volume of water produced and delivered changes. These commonly include the costs of water quality testing, energy related to pumping for transmission and distribution, and source of supply. • Groundwater-related costs are allocated to the lower tiered commodity costs that are incurred for managing the City’s groundwater supply.
• Purchased Water related costs are the costs incurred from purchasing water from Metropolitan Water District (MWD) and are allocated to the highest tiered commodity costs only.
• Conservation related costs are the costs associated with efforts made by the City to permanently reduce water usage.
• Capacity related costs are associated with sizing facilities to meet the maximum, or peak demand. This includes both operating costs and capital infrastructure costs incurred to accommodate peak system capacity events.
• Customer related costs are associated with having a customer on the water system, such as meter reading, postage, billing and other administrative duties. • Fire Protection related costs are associated with providing sufficient capacity in the system for fire meters and other operations and maintenance costs of providing water to properties for private fire service protection.
Once costs have been organized in the City’s budget categories, they are allocated to these cost causation components that are used as the basis for establishing new water rates and translate to fixed and variable charges. Tables in the Technical Appendices show how the City’s expenses were classified and allocated to these cost causation components.
FIXED AND VARIABLE COSTS
Fixed costs generally consist of costs that a utility incurs to serve customers irrespective of the amount of water they use.
10 These include (1) the infrastructure (capacity-related facilities) required to provide service to customers, (2) costs associated with the peaking requirements, or maximum demand which affects the maximum size and operations and maintenance costs of water supply, treatment and delivery system, and (3) administrative and billing costs associated with meter reading, postage and billing.
Variable costs are those that change as the volume of water produced and delivered changes. These commonly include the costs of chemicals used in the treatment process, energy related to pumping for transmission and distribution, and source of supply.
Ideally, utilities should recover all of their fixed costs from fixed charges and all of their variable costs from volumetric charges; when this is the case, fluctuations in water sales revenues would be directly offset by reductions or increases in variable expenses. Because of this, this rate design provides greater revenue stability. However, other factors are often considered when designing water rates such as community values, water conservation goals, ease of understanding, and ease of administration.11 10 American Water Works Association, “Principles of Water Rates, Fees and Charges” – M1 Manual, p. 137-139. 11 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, M1, American Water Works Association, Sixth Edition, see pp. 5 and 96.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 12
NBS evaluated the functionalization of costs into categories that can be more generally grouped into the fixed and variable costs discussed above. This analysis resulted in a cost distribution that is approximately 50% fixed and 50% variable (volumetric).
12 Given the City’s water self-sufficiency goals, the City has historically collected a majority of the water rate revenue from their volumetric charges. The City’s current rate structure collects 85% percent of rate revenue from variable charges, except for the fixed fire meter rates. The City Council has decided that revenue stability is an important factor in this rate setting process and has selected a rate structure that will collect 20 percent (20%) of revenue from fixed charges and 80 percent (80%) from variable rates. This adjustment moves the City closer to the cost-of-service analysis results and will provide more financial stability for the City, while maintaining a tiered rate structure that will encourage conservation. However, a share of the City’s capacity costs, will need to be collected from the variable rates in order to achieve this.
Thus, most capacity-related costs (which are normally considered fixed) will be collected from both fixed and variable rates.
Figure 4 summarizes how the net revenue requirements are allocated to each classification component and used to establish new water rates.
Figure 4. Allocation Percentages of Revenue Requirements
COSTS ALLOCATED TO CUSTOMER CLASSES
Customer classes are typically determined by grouping customers with similar demand characteristics into categories that reflect the cost differentials to serve each type of customer. This process is limited by the desire to not overcomplicate the City’s rate structure.
For the City, the customer classes are split between single-family residential, multi-family residential, commercial, municipal, irrigation and fire protection. Single-family residential customers are separated from other customers for the purpose of the rate calculation because non-single-family customers:
1. Are using more water on average per account.
12 This analysis is presented in more detail in Appendix A.
Variable Costs
Base Commodity $ 13,510,220 27.1%
Groundwater 1,910,679 3.8%
MWD Purchased Water 7,261,431 14.6%
Conservation 2,320,563 4.7%
Fixed Costs
Capacity $ 22,581,241 45.3%
Customer 1,779,399 3.6%
Fire Protection 517,211 1.0%
Net Revenue Requirement $ 49,880,743 100%
Cost of Service Net Revenue
Requirements (FY 25/26)
Proposed Rates
Customer Classes
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 13
2. Water usage varies greatly among these customers based on the specific type of customer and meter size.
As shown in Figure 5, consumption by single-family customers of meter size from ¾ inch to 1 inch are sufficiently similar to consider those meters a single class for the sake of the rate calculation (they will all pay the same fee). 1.5-inch and 2-inch meters will have a slightly higher fixed charge for single-family customers with larger meters. The similarities are apparent in the capacity factors shown in this figure.
Figure 5. Single Family Meter Size Characteristics
The amount of consumption, the capacity factors and the number of meters by size are used in the cost-ofservice analysis to allocate costs to customer classes and determine the appropriate rate structures for each. The City’s most recent consumption is summarized in Figure 6, capacity factors in Figure 7 and number of customers by customer class is shown in Figure 8.
Commodity related costs are costs associated with the total annual consumption of water by customer class, as shown in Figure 6. This figure shows the actual consumption in FY 2023/24 and the projected consumption for FY 2025/26.
Figure 6. Water Consumption by Customer Class
Capacity factors for each customer class are shown in Figure 7. A “capacity factor” is the relationship of each customer class’s average use to peak (generally summer) use. A capacity factor is indicative of a customers’ maximum water demand and the impact each customer class places on the City’s water system.
Average
Bi-Monthly
Con./Acct (hcf)
Peak
Bi-Monthly
Con./Acct (hcf)
FY 2023/24 FY 2023/24
3/4 inch 3,105 17.2 20 1.15
1 inch 3,285 27.8 34 1.22
1.5 inch 1,117 45.7 57 1.25
2 inch 73 67.4 101 1.50
Total 7,580 26.5 32 1.21
1. Consumption and Meters from source file: Customer Data 23 24 Meter Size
Number of
Meters
Peaking
Factor
Customer Class
Consumption,
Actual
(hcf)
FY2023/24
Consumption,
Projected
(hcf)
FY2025/26
FY 2023/24
Percent of
Total Volume,
Actual
FY 2025/26
Percent of
Total Volume,
Projected
Single Family 1,205,301 1,145,036 26.1% 26.1%
Multi Family 1,867,992 1,774,592 40.4% 40.4%
Commercial 1,356,790 1,288,951 29.4% 29.4%
Municipal 128,057 121,654 2.8% 2.8%
Irrigation 64,322 61,106 1.4% 1.4%
Total 4,622,086 4,390,523 100.0% 100.0%
Recycled Water 5,285 5,285 0.1% 0.1%
1. Consumption and Meters from source file: Customer Data 23 24 Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 14
Figure 7. Capacity Factors by Customer Class
The number of customers for each customer class (also known as customer allocation factors) are shown in Figure 8.
Figure 8. Number of Meters by Customer Class
2.4.1 Costs Allocated to Customer Classes
Costs are allocated to each customer class based on the customer characteristics of each class in order to reflect the cost differentials to serve each type of customer. Figure 9 summarizes how the costs for each cost causation component from Figure 4 are allocated to each customer class.
Customer Class
Peak Bi-Monthly
Use FY2023/24
(hcf)
Average BiMonthly Use
FY2023/24
(hcf)
Bi-Monthly
Peaking
Factor
FY 2023/24
Bi-Monthly Max
Capacity Factor
Single Family 243,441 201,383 1.21 27.0%
Multi Family 333,610 312,168 1.07 37.0%
Commercial 259,773 226,775 1.15 28.8%
Municipal 31,368 21,782 1.44 3.5%
Irrigation 32,844 12,322 2.67 3.6%
Total 901,230 774,370 1.16 100.0%
Recycled Water 7,950 1,458 5.45 82.4%
1. Based on bi-monthly billing data (peak day data not available).
Customer Class Number of Meters Percent of
Total
Single Family 7,580 41.2%
Multi Family 6,507 35.4%
Commercial 2,160 11.7%
Municipal 191 1.0%
Irrigation 662 3.6%
Fire 1,297 7.1%
Total 18,397 100.0%
Recycled Water 29 0.2%
1. Consumption and Meters from source file: Customer Data 23 24 Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 15
Figure 9. Cost Allocation Methodology
The costs allocated to each causation component are assigned to each customer class using the cost allocation methodology described in Figure 9. This process is shown in the following sections.
Capacity Related Costs (fixed share) and Fire Protection The capacity-related costs (fixed share) allocation is summarized in Figure 10. Capacity related costs are those costs associated with constructing and operating the water system to ensure there is sufficient capacity in the system to meet the demand of each meter connected. Per CA Govt Code § 53750.5 (2024), hydrants and the water distributed through them are included as part of the property-related water service provided to all property owners served by a water service provider. Through hydrants, water is immediately available to those properties to aid in extinguishing a fire that directly threatens them. The cost associated with this aspect of water service is proportionately allocable among properties that may receive a reasonably similar level of service from the immediate availability of water to aid in extinguishing fires that directly or indirectly threaten those properties.
These capacity-related costs are first allocated to customer classes based on bi-monthly peak capacity factors and then by hydraulic capacity. It should be noted that all meter sizes for single-family residential customers are combined. For non-single-family residential customers, costs are allocated by meter size. Larger meters have the potential to use more of the system’s capacity, compared to smaller meters. The potential capacity demanded is proportional to the maximum safe meter capacity each meter size as established by the AWWA13. The meter capacity factors used in this study are shown in Figure 11. 13 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, M1, AWWA, seventh edition, 2017, p. 338. •Allocated based on peak water consumption by customer class •Then, allocated based on the hydraulic capacity of each meter size Capacity Related Costs
(fixed share)
•Allocated based on the total number of accounts Customer Related Costs
•Allocated based on the hydraulic capacity of fire meters Fire Protection Related Costs
•Allocated based on water consumption by customer class Commodity Related Costs
•Allocated to Tier 1 and Tier 2 water rates as the number one source of supply Ground Water Related Costs
•Allocated to Tier 3 water rates as the additional source of supply from MWD Purchased Water Costs
•Recovered from Tier 2 and Tier 3 water rates to encourage conservation Conservation Related Costs
•Allocated to Tier 3 water rates Water Self-Sufficiency Related Costs
•Allocated based on peak consumption by customer class Capacity Related Costs (volumetric share)
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Prepared by NBS – May 2025 16
A “hydraulic capacity factor” is calculated by dividing the maximum capacity or flow of large meters by the capacity of the base meter size, which is typically the most common residential meter size (in this case a 1- inch meter). For example, Figure 11 shows the hydraulic capacity of a two-inch meter is 3.20 times that of a 1-inch meter and therefore, the capacity component of the fixed meter charge is 3.20 times that of the 1-inch meter.
The actual number of meters by size is multiplied by the corresponding capacity ratios to calculate the total number of equivalent meters. The number of equivalent meters is used as a proxy for the potential demand that each customer can place on the water system and the percentage of capacity related costs (fixed share) distributed to each meter size by the percent of total hydraulic capacity.
The fire protection cost allocation is also summarized in Figure 10. Only Fire Protection meters are allocated this cost component. A direct allocation is made in the functionalization and classification step in the cost-ofservice analysis to represent their share of system capacity and other related operations and maintenance costs and then allocate to Fire Protection meters through hydraulic capacity. Unlike the potable users, cost recovery for fire protection is 100% collected through fixed charges.
Customer Related Costs
The customer-related cost allocation is also summarized in Figure 10. Customer related costs are comprised of those costs related to reading and maintaining meters, customer billing and collection, and other customer service-related costs. The customer service costs do not differ among the various meter sizes; therefore, these costs are spread equally among all meters. Each customer class is allocated customer related costs based upon the percentage of total meters that are in that class.
Figure 10. Capacity Related Costs (fixed share), Customer & Fire Protection Costs Allocation Single Family $ 6,099,653 $ 733,154 $ -
Multi Family $ 8,358,944 $ 629,372 -
Commercial $ 6,508,877 $ 208,920 -
Municipal $ 785,954 $ 18,474 -
Irrigation $ 822,929 $ 64,030 -
Fire $ 4,883 $ 125,449 517,211
Total Net Revenue Requirement $ 22,581,241 $ 1,779,399 $ 517,211 Customer Classes
Fire Protection
Classification Components (Fixed Costs)
Capacity Customer
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Prepared by NBS – May 2025 17
Figure 11. Meter Equivalency Factors
Commodity Related Costs
Commodity related costs are those costs related to the amount of water sold and commonly include the costs of chemicals used in the treatment process, energy related to pumping for transmission and distribution, and source of supply. Each customer class is allocated commodity related costs based upon the percentage of total consumption by that class. The commodity-related costs (volumetric share) allocation is summarized in Figure 12.
Figure 12. Volumetric Related Costs Allocation
NBS recommends that the current tiered rate structure be maintained. Tier breakpoints were established based on the City’s current available water supply, and expected consumption in each tier was determined based on customer class. The justification when setting the tier breakpoints includes:
3/4 inch 30 1.00 30 1.00
1 inch 50 1.00 50 1.00
1.5 inch 100 2.00 100 2.00
2 inch 160 3.20 160 3.20
3 inch 320 6.40 350 7.00
4 inch 500 10.00 700 14.00
6 inch 1,000 20.00 1,600 32.00
8 inch 2,800 56.00 2,800 56.00
10 inch 4,200 84.00 4,200 84.00
1. Meter flow rates are from AWWA M-1 (Seventh Edition) Table B-2.
2. Fire Service meter flow rates are from AWWA M-6 Table 5-3.
Meter Size Meter
Capacity (gpm)
Equivalency
to 1-inch
Meter Capacity
(gpm)
Equivalency to 1-
inch
Standard Meters Fire Service Meters
Displacement Meters Displacement Meters
Compound Class I Meters Fire Service Type I & II
Turbine Class II Meters Turbine Class I Meters
Single Family $ 3,523,059 $ 498,248 $ 1,893,563 $ 605,133 Multi Family $ 5,460,085 $ 772,191 $ 2,934,669 $ 937,844 Commercial $ 3,965,858 $ 560,870 $ 2,131,557 $ 681,190
Municipal $ 374,306 $ 52,936 $ 201,181 $ 64,292
Irrigation $ 188,012 $ 26,590 $ 101,052 $ 32,294
Fire $ (1,101) $ (156) $ (592) $ (189)
Total Net Revenue Requirement $ 13,510,220 $ 1,910,679 $ 7,261,431 $ 2,320,563 Customer Classes Base
Commodity Groundwater
MWD Purchased
Water
Conservation
Classification Components (Variable Costs)
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 18
1. Tier 1 breakpoint is updated to assumed indoor water use based on 47 gallons per capita per day (GPCD), per the indoor residential water use standard outlined in State of California’s “Making Water Conservation a California Way of Life, Implementing Executive Order B-37-16”, from 2025-2029 Single family residential water use is based on 2.56 persons per home and multi-family residential water use is based on 1.78 persons per home. This is per City staff in the Water Resources Division’s water conservation team that estimates of residential occupancy rates and used for Water Neutrality calculations. The planning department provided these estimates to the Water Resources Division for this study. Tier breakpoints for non-residential start at the SFR equivalent and are scaled based on meter size.
2. Tier 2 breakpoint is set to the total volume of Santa Monica groundwater minus the Tier 1 usage for each customer class.
3. Tier 3 water is set to include all purchased water from MWD, as this is the highest current cost for water.
Figure 13 summarizes the new proposed tier breakpoints by customer class and meter size.
Figure 13. Summary of Proposed Tier Breakpoints
2.5 Current vs. Proposed Water Rate Structures
The process of evaluating the water rate structure provides the opportunity to incorporate a number of rate-design objectives and policies, including revenue stability, equity among customer classes, and compliance with Prop 218. NBS discussed several water rate alternatives and methodologies with City Staff over the course of this study, such as the percentage of revenue collected from fixed vs. variable charges and differentiating rates by customer class. Based on input provided by all stakeholders, the proposed rates were developed. The following sections describe this process.
NBS recommends that the City make the following modifications to the water rate structure:
1. Increase the fixed revenue recovery modestly from 15% to 20%.
Customer Class and Meter Size Equivalency
to 1-inch # of Meters
# of 1-inch
Equivalent
Meters
% of
Equivalent
Meters
Tier 1 Breakpoint 1 Tier 2 Breakpoint 2 Tier 3 Breakpoint 3 Single Family
All Customers 1.00 3,105 3,105 11% 0 - 10 hcf 11 - 18 hcf 19+ hcf Subtotal: Single Family 7,580 8,858 31%
Multi Family
All Customers 1.00 1,699 1,699 6% 0 - 7 hcf 8 - 13 hcf 14+ hcf Subtotal: Multi Family 6,507 10,944 38%
Non-Residential
3/4 inch 1.00 2,094 2,094 7% 0 - 10 hcf 11 - 18 hcf 19+ hcf 1 inch 1.00 716 716 3% 0 - 10 hcf 11 - 18 hcf 19+ hcf
1.5 inch 2.00 718 1,436 5% 0 - 20 hcf 21 - 36 hcf 37+ hcf 2 inch 3.20 513 1,642 6% 0 - 32 hcf 33 - 58 hcf 59+ hcf 3 inch 6.40 161 1,030 4% 0 - 64 hcf 65 - 115 hcf 116+ hcf 4 inch 10.00 77 770 3% 0 - 100 hcf 101 - 180 hcf 181+ hcf 6 inch 20.00 26 520 2% 0 - 200 hcf 201 - 360 hcf 361+ hcf 8 inch 84.00 5 420 1% 0 - 560 hcf 561 - 1,008 hcf 1,009+ hcf Subtotal: Non-Residential 4,310 8,628 30%
Total 18,397 28,429 100%
1. Tier 1 breakpoint set to assumed indoor consumption for a typical SFR customer using 47 gallons per capita per day (GPCD) with 2.56 people per SFR,
1.78 people per MFR and allocated to non-residential based on 47 GPCD and equivalent meters. Tier breakpoints for non-residential start at the SFR equivalent and are scaled based on meter size.
2. Tier 2 breakpoint set to volume of Santa Monica groundwater source minus the Tier 1 usage for each customer class.
3. Tier 3 water is set to include all purchased water from MWD.
Per Unit
Per Unit
Per Meter
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 19
2. Update the volumetric rates for all customers as follows to establish new tier breakpoints based on recent consumption statistics, state requirements, and cost of service analysis.
The following sections describe how the proposed water rates were developed.
FIXED MONTHLY SERVICE CHARGES
Meter sizes have different fixed charges based on the capacity requirements of each size meter connected to the system. This is because larger meters have the potential to use more of the system’s capacity, or said differently, they have higher peaking factors compared to smaller meters. The potential capacity demanded (peaking) is proportional to the maximum hydraulic flow through each meter size as established by the AWWA hydraulic capacity ratios14. As an example, a 2-inch meter has a greater capacity, or potential peak demand than a 3/4-inch meter; therefore, the fixed charge for a 2-inch meter is larger than a 3/4-inch meter based on their proportionate capacity requirements15. A “hydraulic capacity factor” is calculated by dividing the maximum capacity or flow of large meters by the capacity of the base meter size, which is typically the most common residential meter size (in this case a 3/4-inch meter).
The actual number of meters by size is multiplied by the corresponding capacity ratios to calculate equivalent meters. The number of equivalent meters is used as a proxy for the potential demand that each customer can place on the water system. A significant portion of a water system’s peak capacity, and in turn, the utility’s fixed operating and capital costs, are related to meeting system capacity requirements.
The City’s existing rates have different fixed charges for commercial fire meters than for standard water service customers, and the new rates will maintain this same structure. Fire service customers differ from other water service customers because their service is more of a standby nature, where a readiness-toserve charge is appropriate. Except in the event of a fire, these users are not intended to use water on a regular basis. However, the City still needs to provide sufficient capacity for fire meters and recover other operations and maintenance costs of providing water to such properties for private fire service protection.
Based on the cost-of-service analysis and the standby nature of fire meters, the overall cost to serve these users is less than that of a standard service; therefore, the fixed charges are less.
Figure 14 and Figure 15 shows how fixed bi-monthly service charges were calculated for standard water meters and Figure 16 shows the same for private fire meters. The customer component of the rate does not vary by meter size because it represents costs to the utility for having connections to the water system.
Capacity costs vary by meter size and are based on their hydraulic capacity. 14 See: American Water Works Association, Principles of Water Rates, Fees and Charges: Manual of Water Supply Practices M1, 326, (6th ed. 2012) and American Water Works Association, Water Meters – Selection, Installation, Testing and Maintenance M6, 65 (5th ed. 2012).
15 This is reflected in the fixed charge calculations by using the AWWA hydraulic capacity factors to represent the maximum volume each meter size is capable of delivering.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 20
Figure 14. Calculation of FY 2025/26 Standard Fixed Meter Charges for SFR Customers Figure 15. Calculation of FY 2025/26 Standard Fixed Meter Charges for non-SFR Customers Figure 16. Calculation of FY 2025/26 Private Fire Protection Meter Fixed Charges
VOLUMETRIC RATES
Based on input from City of Santa Monica staff, the proposed volumetric rate structure is designed to implement the new tier breakpoints for each customer class based on the updated cost-of-service analysis while maintaining the existing three-tiered volumetric rate structure.
Figure 17 shows the calculation per unit volumetric charge for each consumption tier. It should be noted that these costs are spread evenly across all customer classes, but each customer class has independent tier breakpoints, as shown in Figure 13.
Number of Meters by
Class and Size
3/4 inch 1 inch 1.5 inch 2 inch
Single Family 3,105 3,285 1,117 73
Total Meters/Accounts 3,105 3,285 1,117 73
Hydraulic Capacity Factor 1.00 1.00 2.00 3.20
Total Equivalent Meters 3,105 3,285 2,234 234
Bi-Monthly Fixed Service Charges
Customer Costs ($/Acct/bi-month) $16.12 $16.12 $16.12 $16.12 Capacity Costs ($/Acct/bi-month) $33.94 $33.94 $67.88 $108.62 Total Bi-Monthly Meter Charge $50.06 $50.06 $84.00 $124.74 Number of Meters by
Class and Size
3/4 inch 1 inch 1.5 inch 2 inch 3 inch 4 inch 6 inch 8 inch Multi Family 1,699 1,825 2,380 496 61 31 13 2
Commercial 580 492 542 349 117 54 22 4
Municipal 30 9 28 69 36 15 4 -
Irrigation 214 200 148 87 8 4 1 -
Total Meters/Accounts 2,523 2,526 3,098 1,001 222 104 40 6 Hydraulic Capacity Factor 1.00 1.00 2.00 3.20 6.40 10.00 20.00 56.00 Total Equivalent Meters 2,523 2,526 6,196 3,203 1,421 1,040 800 336 Bi-Monthly Fixed Service Charges
Customer Costs ($/Acct/bi-month) $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 Capacity Costs ($/Acct/bi-month) $54.46 $54.46 $108.93 $174.29 $348.57 $544.64 $1,089.29 $3,050.01 Total Bi-Monthly Meter Charge $70.58 $70.58 $125.05 $190.41 $364.69 $560.76 $1,105.41 $3,066.13 Number of Meters by
Class and Size
1.5 Inch 2 Inch 3 Inch 4 Inch 6 Inch 8 Inch 10 Inch
Fire 1,270 15 8 4 - - -
Total Meters/Accounts 1,270 15 8 4 - - -
Hydraulic Capacity Factor 2.00 3.20 7.00 14.00 32.00 56.00 84.00 Total Equivalent Meters 2,540 48 56 56 - - -
Bi-Monthly Fixed Service Charges
Customer Costs ($/Acct/bi-month) $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 Capacity Costs ($/Acct/bi-month) $64.20 $102.73 $224.72 $449.43 $1,027.27 $1,797.73 $2,696.59 Total Bi-Monthly Meter Charge $80.32 $118.85 $240.84 $465.55 $1,043.39 $1,813.85 $2,712.71 Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 21
Figure 17. Calculated Variable Charges for FY 2025/26
CURRENT AND PROPOSED WATER RATES
Figure 18 provides a comparison of the current and proposed rate structure for FY 2025/26 through 2029/30. Projected rates for FY 2025/26
16 reflect adjustments based on the cost-of-service analysis; rates after FY 2025/26 assume an across-the-board rate increase to these rates based on the recommended percent increases in rate revenue each year, as shown previously in Figure 2. Increasing rates by the percentage change in rate revenue as described in this study will allow the Utility to continue meeting its annual revenue requirements and fund the priority planned capital improvements over the next five years.
More detailed tables on the development of the proposed water rates are documented in Appendix A. 16 Rate adjustments are scheduled to be effective July 1st of each fiscal year.
Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 1,207,618 1,712,622 1,471,099 4,391,340 % of Total Consumption 28% 39% 34% 100%
% of Groundwater 41% 59% -- 100%
% of Tier 2 and 3 Water -- 54% 46% 100%
Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity
$ 3,715,310 $ 5,268,986 $ 4,525,924 $ 13,510,220
Ground Water 477,670 1,433,009 - 1,910,679
Purchased Water - - 7,261,431 7,261,431
Conservation - 1,160,282 1,160,282 2,320,563
Water Self-Sufficiency Projects - - 373,033 373,033
Capacity (Allocated to Variable Rate) 3,988,770 5,656,800 4,859,047 $ 14,504,617 Total $ 8,181,750 $ 13,519,077 $ 18,179,716 $ 39,880,543 21% 34% 46% 100%
$6.78 $7.89 $12.36
% of Variable Revenue
Cost Per Unit of Water
Calculation of Cost Per Tier Total
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 22
Figure 18. Current and Proposed Water Rates
2.6 Drought Rate Analysis
Should conservation increase beyond currently expected levels, the City is still obligated to meet its annual net revenue requirements to keep the utility operating and functional. At the request of the City, drought rates have been developed so that if total consumption should decrease further due to an increase in conservation required by the state, another regulatory agency, or if the City Council declares that it is in more severe drought stages, the City’s Water Utility would still be kept whole, financially. In the event that consumption decreases beyond projected baseline consumption levels, some costs will also decrease, and the proposed drought rates have taken this reduced revenue need into consideration. Drought rates will offset the loss of variable revenue, if needed and implemented by the City in different stages of drought severity.
Figure 19 shows the calculation of the updated commodity costs for each percentage of conservation the City is looking to achieve with the drought rates for FY 2025/26. From here, the updated commodity cost is used in the variable rate calculation shown for the water rates in Figure 18. This calculation is performed for all levels of conservation and summarized in Figure 20 for the next five fiscal years. For a more detailed look at how drought rates are calculated, please refer to the Appendix.
FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Bi-Monthly Fixed Service Charges
Single Family Residential
3/4 inch $19.40 $50.06 $58.07 $63.30 $69.00 $73.14
1 inch $19.40 $50.06 $58.07 $63.30 $69.00 $73.14
1.5 inch $27.35 $84.00 $97.45 $106.22 $115.78 $122.72
2 inch $36.89 $124.74 $144.69 $157.72 $171.91 $182.22
All Other Customers
3/4 inch $23.46 $70.58 $81.88 $89.25 $97.28 $103.12
1 inch $23.46 $70.58 $81.88 $89.25 $97.28 $103.12
1.5 inch $35.48 $125.05 $145.06 $158.11 $172.34 $182.68 2 inch $49.89 $190.41 $220.87 $240.75 $262.42 $278.16
3 inch $88.33 $364.69 $423.04 $461.12 $502.62 $532.78
4 inch $131.58 $560.76 $650.49 $709.03 $772.84 $819.21
6 inch $251.71 $1,105.41 $1,282.27 $1,397.68 $1,523.47 $1,614.88 8 inch $684.18 $3,066.13 $3,556.71 $3,876.81 $4,225.73 $4,479.27 Fire Service Charges
1.5 inch $74.49 $80.32 $93.18 $101.56 $110.70 $117.35
2 inch $112.32 $118.85 $137.86 $150.27 $163.80 $173.62
3 inch $232.10 $240.84 $279.37 $304.51 $331.92 $351.83
4 inch $452.75 $465.55 $540.04 $588.64 $641.62 $680.12
6 inch $1,020.13 $1,043.39 $1,210.33 $1,319.27 $1,438.00 $1,524.28 8 inch $1,776.63 $1,813.85 $2,104.06 $2,293.43 $2,499.84 $2,649.83 10 inch $2,659.22 $2,712.71 $3,146.74 $3,429.95 $3,738.64 $3,962.96 Commodity Charges
All Customers ($/hcf)
Tier 1 $6.61 $6.78 $7.86 $8.57 $9.34 $9.90
Tier 2 $7.67 $7.89 $9.15 $9.98 $10.87 $11.53
Tier 3 $10.93 $12.36 $14.34 $15.63 $17.03 $18.06
Water Rate Schedule Current Rates Proposed Rates
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 23
Figure 19. FY 2025/26 Calculation of Commodity Costs at Various Levels of Conservation Figure 20. Proposed Drought Rates
Percentage of Conservation
Total
Consumption
(hcf)
Base
Commodity
Cost
Impacted
Commodity
Cost
Savings
Updated
Commodity
Cost
a b c d = (-a) * c e = b + c
0% 4,391,340 $ 39,880,543 $ 968,597 $ - $ 39,880,543
10% 3,952,206 $ 39,880,543 $ 968,597 $ (96,860) $ 39,783,683 20% 3,513,072 $ 39,880,543 $ 968,597 $ (193,719) $ 39,686,824 30% 3,073,938 $ 39,880,543 $ 968,597 $ (290,579) $ 39,589,964 40% 2,634,804 $ 39,880,543 $ 968,597 $ (387,439) $ 39,493,104 50% 2,195,670 $ 39,880,543 $ 968,597 $ (484,298) $ 39,396,245 60% 1,756,536 $ 39,880,543 $ 968,597 $ (581,158) $ 39,299,385 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Commodity Charges ($/hcf)
10% Tier 1 $6.81 $7.90 $8.62 $9.39 $9.96
Tier 2 $9.17 $10.64 $11.59 $12.64 $13.40
Tier 3 $13.78 $15.98 $17.42 $18.99 $20.13
20% Tier 1 $7.65 $8.87 $9.67 $10.54 $11.17
Tier 2 $10.29 $11.94 $13.01 $14.18 $15.03
Tier 3 $15.46 $17.94 $19.55 $21.31 $22.59
30% Tier 1 $8.72 $10.11 $11.02 $12.02 $12.74
Tier 2 $11.73 $13.61 $14.83 $16.17 $17.14
Tier 3 $17.63 $20.45 $22.29 $24.30 $25.75
40% Tier 1 $10.15 $11.77 $12.83 $13.98 $14.82
Tier 2 $13.65 $15.84 $17.26 $18.82 $19.95
Tier 3 $20.52 $23.80 $25.94 $28.28 $29.97
50% Tier 1 $12.15 $14.09 $15.36 $16.74 $17.74
Tier 2 $16.35 $18.96 $20.67 $22.53 $23.88
Tier 3 $24.56 $28.49 $31.05 $33.85 $35.88
60% Tier 1 $15.15 $17.57 $19.15 $20.87 $22.13
Tier 2 $20.38 $23.64 $25.77 $28.09 $29.78
Tier 3 $30.62 $35.52 $38.72 $42.21 $44.74
Proposed Drought Rates
Mandated Level of
Conservation
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 24
3. Sewer Rate Study
3.1 Key Sewer Rate Study Considerations
The majority of the wastewater generated in the City is conveyed to the City of Los Angeles’ Hyperion Treatment Plant for treatment and final disposal. A small portion, up to 1,500,000 gallons per day, of wastewater is diverted to the City’s Sustainable Water Infrastructure Project (SWIP) to produce purified water used for non-potable uses (e.g., irrigation) and groundwater recharge. The sewer rate analysis was undertaken with several specific objectives, including:
• Generating sufficient revenue to meet anticipated operating and maintenance costs. • Maintain adequate reserve levels to ensure continuity in operations. • Ensure adequate funding for the utility’s capital projects, due to the level of capital investment planned over the next five years, particularly the planned Water Reclamation Facility. • Comply with Prop 218 requirements to ensure costs are properly allocated between user classifications.
In this study, NBS developed several sewer rate alternatives for consideration by City staff. The rates presented in this report were developed using industry standards and cost-of-service principles. The rate alternative ultimately selected by the City staff maintains the existing rate structure design while increasing the fixed cost recovery component from 15% to 20%.
This rate structure consists of a fixed charge based on the number of dwelling units for residential customers and a fixed charge per account for non-residential customers. There is also a volumetric charge for both residential and non-residential customers based on average winter water consumption. The updated rates were calculated based on the net revenue requirements, number of customer accounts, water consumption (estimated for residential customers because actual consumption for each residential customer is not available), and the amount and strength of the effluent received at the wastewater treatment plant. The following are the basic components included in this analysis:
CUSTOMER CLASSES
Customer classes are determined by grouping customers with similar flow and strength characteristics into different categories in order to reflect the cost differentials to service each type of customer. The City’s existing customer classes have been maintained in the rates developed in this study and proposed in this report.
For the City, the customer classes are split between single family residential, multi-family residential (MFR) (dependent on number of units), commercial (low, medium and high strength), institutional, church/school, industrial and wastewater only customers (these customers are contracted with the City of Los Angeles for water service, and are all single-family residential accounts).
COST ALLOCATION FACTORS
For the purpose of allocating costs to customer classes, the sewer revenue requirements were “functionalized” into four categories: (1) Collection related costs; (2) strength costs related to biochemical Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 25
oxygen demand (BOD); (3) strength costs related to total suspended solids (TSS); and (4) customer servicerelated costs. The effluent strength factors were derived from the Amalgamated System Sewerage Facilities Charge (ASSFC) report for March-April 2018-19 to City of Los Angeles Bureau of Sanitation (LASAN). Each of these cost allocation factors have different implications for the costs of serving customers. For example, effluent from customers that contains higher levels of BOD and TSS is more costly to treat at the wastewater treatment plant and, therefore, those customers should be allocated a greater proportion of treatment costs compared to customers with lower-strength effluent. Detailed tables that document these cost allocations are shown in Appendix B.
DETERMINING REVENUE REQUIREMENTS BY CUSTOMER CLASS
The cost allocation factors were used to determine the percentage of the revenue requirements allocated to each customer class. For example, customer costs are allocated based on number of accounts and billable units, flow-related costs are allocated based on the estimated effluent generated by each class, and strength-related costs are allocated based on estimated strength of wastewater discharged by each customer class. Once the costs are allocated and the revenue requirement for each customer class is determined, collecting these revenue requirements from each customer class is addressed in the rate design task. Appendix B shows the amount of revenue that should be collected from each customer class within each functional cost category.
RATE DESIGN
The process of evaluating the sewer rate structure provides the opportunity to incorporate a number of rate-design objectives and policies, including revenue stability, equity among customer classes, and water conservation. NBS discussed several sewer rate alternatives and methodologies with City Staff over the course of this study, such as the percentage of revenue collected from fixed vs. variable charges and differentiating rates by customer class. Based on input provided by all stakeholders, the proposed rates were developed. The following sections describe this process.
NBS recommends that the City make the following modifications to the sewer rate structure:
1. Increase the fixed revenue recovery modestly from 15% to 20%. The increase is to help the City recover its fixed cost, roughly 70% of the total expenditures is fixed, in its operations.
2. Update the volumetric rates for all customers based on recent consumption statistics, state requirements, and cost of service analysis.
The following sections describe how the proposed sewer rates were developed.
3.2 Financial Plan / Sewer Utility Revenue Requirements Like the water utility, the revenue requirements, and recommended rate increases, are governed by the need to meet operating and capital costs, maintain adequate debt coverage, and build reserve funds.
Figure 21 summarizes the sources and uses of funds for the next five years.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 26
Figure 21. Summary of Revenue Requirements
The current state of the sewer utility, with regard to its broader objectives, is as follows:
Meeting Revenue Requirements: For Fiscal Years 2025/26 through 2029/30, the net revenue requirement (total annual expenses plus debt service and rate-funded capital costs, less non-rate revenues) is estimated to average $25.9 million. Increases to rate revenue over the next five years will be needed in order to meet the utility’s revenue requirements.
Meeting Capital Improvement Costs: City staff has identified a total of roughly $59.8 million (current year value) in capital improvements for the City’s sewer system for the five years, including required investments for the Moss Avenue Pump Station and the Santa Monica Urban Runoff Recycling Facility. The preferred rate adjustments will be able to fund the identified capital improvement project needs over the five-year rate implementation period. Appendix B provides a complete list of capital projects that were factored into the financial plan and the cost of each project. Project costs are listed in current and future values; future values reflect the estimated cost of each project in the year the project is planned, including estimated cost inflation of 3% per year, per the Engineering News Record Construction Cost Inflation Index. Delaying the rate increases recommended in this study would result in more significant increases in later years.
Budget
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Sources of Wastewater Funds
Wastewater Fund, 51 $ 45,852,598
Rate Revenue:
Revenue Under Current Rates $ 20,700,000 $ 20,786,940 $ 20,874,245 $ 20,961,917 $ 21,049,957 $ 21,138,367 Revenue from Rate Increases 2
- 1,455,086 3,024,678 4,717,333 6,284,372 7,957,714
Subtotal: Rate Revenue After Rate Increases $ 20,700,000 $ 22,242,026 $ 23,898,923 $ 25,679,250 $ 27,334,329 $ 29,096,081 Non-Rate Revenue:
Charges for Services $ 975,448 $ 965,946 $ 956,365 $ 958,118 $ 959,907 $ 961,731 Fines and Forfeitures - - - - - -
Interest Income 860,000 704,928 509,720 457,276 476,331 449,151 Other Revenue 220,000 400,000 398,813 406,789 414,925 423,223 Subtotal: Non-Rate Revenue $ 2,055,448 $ 2,070,874 $ 1,864,898 $ 1,822,183 $ 1,851,162 $ 1,834,105 Total Sources of Funds $ 22,755,448 $ 24,312,899 $ 25,763,821 $ 27,501,433 $ 29,185,491 $ 30,930,186 Uses of Wastewater Funds
Wastewater Fund, 51
Operating Expenses 3
Salaries and Benefits $ 3,484,644 $ 4,288,826 $ 4,578,278 $ 4,748,523 $ 4,914,736 $ 5,144,873 Supplies and Expenses 16,922,501 17,963,599 18,413,185 18,870,710 19,331,984 19,806,515 Retirement and OPEB 17,978 18,877 19,821 20,812 21,852 22,945 Interfund Transactions (3,557,049) (2,544,547) (2,580,637) (2,617,467) (2,655,055) (2,690,034) Subtotal: Operating Expenses: $ 16,868,074 $ 19,726,755 $ 20,430,647 $ 21,022,577 $ 21,613,517 $ 22,284,299 Other Expenditures
Existing Debt Service $ 2,948,946 $ 2,948,946 $ 2,948,946 $ 2,948,946 $ 2,948,946 $ 2,948,946 New Debt Service - - - - - -
Rate-Funded Capital Expenses 5,221,192 14,113,500 - - 848,603 4,147,519 Subtotal: Other Expenditures $ 8,170,138 $ 17,062,445 $ 2,948,946 $ 2,948,946 $ 3,797,549 $ 7,096,464 Total Uses of Funds $ 25,038,212 $ 36,789,201 $ 23,379,593 $ 23,971,522 $ 25,411,065 $ 29,380,763 Annual Surplus/(Deficit) $ (2,282,764) $ (12,476,301) $ 2,384,228 $ 3,529,910 $ 3,774,426 $ 1,549,423 Net Revenue Req't. (Total Uses less Non-Rate Revenue) $ 22,982,764 $ 34,718,327 $ 21,514,695 $ 22,149,340 $ 23,559,903 $ 27,546,658 Projected Annual Rate Revenue Adjustment 0.00% 7.00% 7.00% 7.00% 6.00% 6.00% Cumulative Increase from Annual Revenue Increases 0.00% 7.00% 14.49% 22.50% 29.85% 37.65% Debt Coverage After Rate Increase (minimum 1.2 ratio) 2.00 1.56 1.81 2.20 2.57 2.93
1. Revenue and expenses for are from PW_51FundForecast-Wastewater Budget values are detailed in Exhibit 1 (O&M).
2. Revenue from rate increases assumes an implementation date of July 1, 2025 and then July 1 each year thereafter.
3. The operating expenses are from the fund forecast. Inflationary factors are applied to these expenses to project costs in FY 2028/29 and beyond.
4. Stormwater fund 52 contributes to the SWIP project.
RATE REVENUE REQUIREMENTS SUMMARY 1 Projected
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 27
Building and Maintaining Reserve Funds: It is important for municipal utilities to maintain reasonable reserves in order to handle emergencies, fund working capital, maintain a good credit rating, and generally follow sound financial management practices. NBS recommends that the City maintain reserves in order to meet the following targets:
• An Operating Reserve equal to 90 days of the Utility’s budgeted annual operating expenses, which is equal to a three-month (or 25%) cash reserve for normal operations. The City’s minimum operating reserve target is set equal to 60 days of reserves. An Operating Reserve is intended to promote financial viability in the event of any short-term fluctuation in revenues and/or expenditures. Fluctuations might be caused by weather patterns, the natural inflow and outflow of cash during billing cycles, natural variability in demand-based revenue streams (e.g., variable charges), and – particularly in periods of economic distress – changes or trends in age of receivables.
• A Capital Rehabilitation and Replacement Reserve equal to 3% of net capital assets of the utility for capital repair and replacement needs, which serves simply as a starting point for addressing long-term needs. If ratepayers can generate revenues at this level and pace, they will have reserved a partial cash resource that can be applied toward the future replacement and rehabilitation needs of the utility.
• A Rate Stabilization Reserve has a target reserve of $1 million and is to remain unchanged from current City policy. This reserve is intended to provide additional financial security to the Utility should any unforeseen revenue shortages or capital emergency occur. • Maintaining Adequate Bond Coverage: The City is required by its bond covenant to maintain a debt service coverage ratio of at least 1.25 for the outstanding revenue bonds. This analysis assumes the City will be required to maintain the same debt coverage requirement for any existing or anticipated debt (e.g., Clean Water State Revolving Fund Loan for the SWIP). However, maintaining a higher coverage ratio strengthens the City’s credit rating, which can help lower the interest rates for debtfunded capital projects in the future and reduce annual debt service payments. It is projected that the City will meet the 1.25 debt coverage ratio for all existing and anticipated debt for the five-year planning period and beyond.
Figure 22 summarizes the projected reserve fund balances and reserve targets. A summary of the proposed sewer utility 10-year financial plan, including revenue requirements, reserve funds, revenue sources, proposed rate increases, and the Utility’s capital improvement program, is included in Appendix B - Sewer Rate Study Summary Tables.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 28
Figure 22. Summary of Sewer Reserve Funds
A more detailed version of the utility’s proposed five-year financial plan is included in Appendix B. The Appendix tables include revenue requirements, reserve funds, revenue sources, proposed rate increases, and the City’s capital improvement program.
3.3 Characteristics of Sewer Customers by Class
The key factors used in allocating costs as a part of the sewer cost-of-service analysis include the estimated effluent (flow) going to the wastewater treatment plant from each customer class as well as the effluent strengths (i.e., biochemical oxygen demand and total suspended solids). The most recent water consumption data, which is FY 2023/24, was used to estimate flow to the wastewater treatment plant because it is correlated to the amount of flow that goes to the treatment plant.
For the City, the customer classes are split between single family residential, multi-family residential (MFR) (dependent on number of units), commercial (low, medium and high strength), institutional, church/school, industrial and wastewater only customers (these customers are contracted with the City of Los Angeles for water service, and are all single-family residential accounts).
As shown in Figure 23, the development of the collection (or volume) allocation factor was calculated by taking the lowest consecutive 4-month water usage from FY 2023/24 and annualizing the usage per customer class. From here, the annual usage was adjusted to meet the flow data from the wastewater treatment plant. It should be noted that this is where the discharge factor was also analyzed and calculated to reflect the current cost of service. The discharge factor was calculated by taking the estimated FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Operating Reserve
Ending Balance $ 4,931,689 $ 5,107,662 $ 5,255,644 $ 5,403,379 $ 5,571,075 Recommended Minimum Target 4,931,689 5,107,662 5,255,644 5,403,379 5,571,075 Capital Rehabilitation & Replacement Reserve
Ending Balance $ 17,557,700 $ 13,948,287 $ 14,636,063 $ 9,929,391 $ 7,840,127 Recommended Minimum Target 5,921,300 6,033,400 6,141,500 6,302,700 6,458,400 Rate Stabilization Reserve
Ending Balance $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 Recommended Minimum Target 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Total Ending Balance (Unrestricted) $ 23,489,389 $ 20,055,948 $ 20,891,707 $ 16,332,770 $ 14,411,202 Total Recommended Minimum Target $ 11,852,989 $ 12,141,062 $ 12,397,144 $ 12,706,079 $ 13,029,475 Beginning Reserve Fund Balances and
Recommended Reserve Targets
Projected
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 29
wastewater flow and dividing it by the annual metered water use volume per customer class. This discharge factor is the multiplier specific to each customer class that estimates the amount of sewage discharged to the City’s wastewater system.
Figure 23. Development of the Volume Allocation Factor and Discharge Factors
DETERMINING CUSTOMER CLASSES EFFLUENT STRENGTHS
Figure 24 shows the development of the strength allocation factors by customer class. The typical strength factors for biochemical oxygen demand (BOD) and total suspended solids (TSS) are derived from the Amalgamated System Sewerage Facilities Charge (ASSFC) report for March-April 2018-19 to Los Angeles Sanitation District (LASAN) and calculated for commercial customers based on weighted averages for each class.
Figure 24. Development of the Strength Allocation Factor Customer Class
Number
of Accounts 1
Number
of EDUs 1
Annual
Volume
(hcf)1
Lowest
4-Months
Water Use
(hcf)1,2
Estimated
Wastewater
Flow
Discharge
Factors
Adjusted
Annual
Volume (hcf) 3
Percentage
of Adjusted
Volume
Calculation Components
Single Family 7,541 7,541 1,205,541 341,641 1,024,922 85% 785,090 24.6% MFR: Duplex + Triplex 1,112 2,674 144,680 43,631 130,894 90% 100,264 3.1% MFR: Fourplex + Larger 3,850 40,480 1,666,254 539,142 1,617,427 97% 1,238,949 38.9% MFR : Individually metered 1,572 1,601 79,047 25,957 77,870 99% 59,649 1.9% MFR : Mixed Use 34 989 58,693 18,664 55,991 95% 42,889 1.3% Commercial - Low 1,665 5,122 696,163 216,951 650,854 93% 498,554 15.6% Commercial - Medium 33 204 27,700 8,697 26,092 94% 19,987 0.6% Commercial - High 301 3,431 466,294 148,321 444,963 95% 340,841 10.7% Institutional 77 457 62,049 17,027 51,082 82% 39,129 1.2% Church/Schools 151 627 85,252 23,156 69,468 81% 53,212 1.7% Misc Industrial 11 78 10,565 3,108 9,323 88% 7,141 0.2% Wastewater Only 34 - - - - 85% - 0.0%
Total 16,381 63,203 4,502,239 1,386,295 4,158,885 92% 3,185,706 100.0% 3,185,706 Flow (hcf/yr.)
0.77 Flow Adj. Factor
1. Consumption, accounts and EDUs from FY 23-24.
2. The four consecutive month period of lowest water usage during Fiscal Year 23/24, for each customer class.
3. NBS adjusted the average winter consumption to the outgoing wastewater flows pumped from the City's Moss Avenue Pump Station to the City of Los Angeles' Hyperion Water Reclamation Plant for treatment and disposal.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 30
Figure 25 summarizes the development of the customer allocation factor.
Figure 25. Development of the Customer Allocation Factor
3.4 Rate Design Analysis
The process of evaluating the sewer rate structure provides the opportunity to incorporate a number of ratedesign objectives and policies, including revenue stability, equity among customer classes, and water conservation. NBS discussed several sewerrate alternatives and methodologies with City Staff over the course of this study, such as the percentage of revenue collected from fixed vs. variable charges and differentiating rates by customer class. Based on input provided by City staff, the proposed rates were developed. The following sections describe this process.
NBS recommends that the City make the following modifications to the sewer rate structure:
Customer Class
Adjusted
Annual Flow
(hcf)
Average
Strength
Factor (mg/l)
Calculated
BOD
(lbs./yr.)
Adjusted
BOD
(lbs./yr.)
Percent of
Total
Average
Strength
Factor (mg/l)
Calculated TSS
(lbs./yr.)
Adjusted TSS
(lbs./yr.) Percent of Total
Single Family 785,090 225 1,101,969 1,149,915 18.7% 225 1,101,969 848,382 18.7% MFR: Duplex + Triplex 100,264 225 140,733 146,857 2.4% 225 140,733 108,348 2.4% MFR: Fourplex + Larger 1,238,949 225 1,739,016 1,814,680 29.5% 225 1,739,016 1,338,830 29.5% MFR : Individually metered 59,649 225 83,724 87,367 1.4% 225 83,724 64,457 1.4% MFR : Mixed Use 42,889 225 60,200 62,820 1.0% 225 60,200 46,347 1.0% Commercial - Low 498,554 150 466,521 486,819 7.9% 150 466,521 359,164 7.9% Commercial - Medium 19,987 600 74,810 78,064 1.3% 600 74,810 57,594 1.3% Commercial - High 340,841 1000 2,126,278 2,218,790 36.1% 1000 2,126,278 1,636,974 36.1% Institutional 39,129 140 34,174 35,660 0.6% 125 30,512 23,491 0.5% Church/Schools 53,212 140 46,474 48,496 0.8% 125 41,495 31,946 0.7% Misc Industrial 7,141 290 12,919 13,481 0.2% 550 24,502 18,864 0.4% Wastewater Only - 225 0 - 0.0% 225 0 - 0.0%
Total 3,185,706 5,886,818 6,142,950 100% 5,889,760 4,534,395 100% Target, from WWTP Data 6,142,950 BOD (lbs./yr.) 4,534,395 TSS (lbs./yr.)
1.04 BOD Adj. Factor 0.77 TSS Adj. Factor
1. Consumption, accounts and EDUs from FY 23-24.
2. Typical strength factors for BOD and TSS are derived from the ASSFC Report for March-April 2018-19 and calculated for Commercial customers with weighted averages.
Source files: ASSFC_Report_March-April_2018-19_to_LASAN.xlsx Biochemical Oxygen Demand (BOD) Total Suspended Solids (TSS) Customer Class
Number
of Accounts 1
Percentage
of Accounts
Single Family 7,541 46.0%
MFR: Duplex + Triplex 1,112 6.8%
MFR: Fourplex + Larger 3,850 23.5%
MFR : Individually metered 1,572 9.6%
MFR : Mixed Use 34 0.2%
Commercial - Low 1,665 10.2%
Commercial - Medium 33 0.2%
Commercial - High 301 1.8%
Institutional 77 0.5%
Church/Schools 151 0.9%
Misc Industrial 11 0.1%
Wastewater Only 34 0.2%
Total 16,381 100%
1. Consumption, accounts and EDUs from FY 23-24.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 31
1. Increase the fixed revenue recovery modestly from 15% to 20%
2. Update the discharge factor to reflect current consumption patterns.
3. Update the volumetric charges that will be calculated based on each unit of water consumed and multiplied by the discharge factor.
3.4.1 Fixed Charges
The fixed charge recognizes that the sewer utility incurs fixed costs regardless of whether customers send any wastewater into the City’s collection system. There are three factors used to develop the fixed charge:
the number of dwelling units for Residential customers and number of accounts for non-residential customers, and the annual revenue requirement. The bi-monthly fixed charge is calculated by taking the twenty percent fixed multiplied by the annual revenue requirement, then divided by the number of dwelling units (for residential customers) and accounts (for non-residential customers) and billing periods per year.
The fixed charges for each customer class are shown in Figure 27.
3.4.2 Variable Charges
The variable charges, on the other hand, are calculated by taking the additional eighty percent portion of the revenue requirement divided by the estimated sewage volume produced. This sewage volume is the water consumption multiplied by the updated discharge factors calculated in Figure 23. The volumetric charges for each customer class are summarized in the rate design table shown in Figure 28.
As part of the rate study, the City also updated the commodity rates for recycled water to reflect the cost-ofservice analysis. The commodity charges for recycled water customers are shown below in Figure 29. Further details on the development of the commodity charges for recycled water customers are found in Tables 55 through 57 in Appendix A.
Figure 26. Development of Fixed and Variable Charges
Customer Class
No. of
Accounts 1
No. of
Dwelling
Units 1
Estimated
Sewage
Volume2
Revenue
from Fixed
Charges
Revenue
from
Volumetric
Charges
Discharge
Factor
Bi-Monthly
Fixed Charge 3
Volumetric
Charge Per
hcf4
Residential Per DU
Single Family 7,541 7,541 785,090 $ 1,004,543 $ 5,606,900 85% $22.20 $4.92 MFR: Duplex + Triplex 1,112 2,674 100,264 $ 142,529 $ 763,624 90% $8.88 $4.92 MFR: Fourplex + Larger 3,850 40,480 1,238,949 $ 1,631,737 $ 5,461,228 97% $6.72 $4.92 MFR : Individually metered 1,572 1,601 59,649 $ 105,954 $ 810,923 99% $11.03 $4.92 Subtotal 14,075 52,296 2,183,952 $ 2,884,762 $12,642,675 Non-Residential Per Account
MFR : Mixed Use 34 989 42,889 $ 44,277 $ 160,069 95% $217.04 $4.92 Commercial - Low 1,665 5,122 498,554 $ 620,751 $ 2,065,089 93% $62.14 $4.43 Commercial - Medium 33 204 19,987 $ 27,598 $ 118,124 94% $139.39 $6.27 Commercial - High 301 3,431 340,841 $ 650,324 $ 2,515,194 95% $360.09 $7.73 Institutional 77 457 39,129 $ 46,408 $ 138,153 82% $100.45 $4.29 Church/Schools 151 627 53,212 $ 57,822 $ 212,374 81% $63.82 $4.90 Misc Industrial 11 78 7,141 $ 8,532 $ 35,766 88% $129.27 $5.68 Wastewater Only 34 - - $ 14,108 $ - 85% $135.91 N/A
Subtotal 2,306 10,907 1,001,753 $ 1,469,820 $ 5,244,769 -- -- Total 16,381 63,203 3,185,706 $ 4,354,582 $17,887,444 -- --
1. Consumption, accounts and EDUs from Source File: Customer Data 23_24.
2. Estimated sewage volume is annual water consumption multiplied by the discharge factor.
3. Fixed charges are designed to collect 20% of the total revenue requirement. For residential customers, the charges are per dwelling unit.
For non-residential customers, the charges are per account.
4. Volumetric charges are designed to collect 80% of the total revenue requirement.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 32
3.5 Current and Proposed Wastewater Rates
Figure 27 and Figure 28 collectively provide the current and proposed current and proposed sewer rates for FY 2025/26 through FY 2029/30 for each customer class. More detailed tables on the development of the proposed sewer rates are documented in Appendix B.
Figure 27. Proposed Wastewater Rates – Fixed Charges
Figure 28. Proposed Wastewater Rates – Volumetric Charges Figure 29. Proposed Recycled Water Rates – Volumetric Charges FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Residential ($/Dwelling Unit)
Single Family $19.27 $22.20 $23.76 $25.42 $26.94 $28.56 MFR: Duplex + Triplex $7.76 $8.88 $9.51 $10.17 $10.78 $11.43 MFR: Fourplex + Larger $5.85 $6.72 $7.19 $7.69 $8.15 $8.64 MFR : Individually metered $9.41 $11.03 $11.80 $12.63 $13.39 $14.19 Non-Residential ($/Account)
MFR : Mixed Use $188.39 $217.04 $232.24 $248.49 $263.40 $279.21 Commercial - Low $55.06 $62.14 $66.49 $71.14 $75.41 $79.93 Commercial - Medium $117.07 $139.39 $149.14 $159.58 $169.16 $179.31 Commercial - High $294.27 $360.09 $385.30 $412.27 $437.00 $463.22 Institutional $88.78 $100.45 $107.48 $115.00 $121.90 $129.22 Church/Schools $56.62 $63.82 $68.29 $73.07 $77.45 $82.10 Misc Industrial $108.46 $129.27 $138.32 $148.00 $156.88 $166.29 Wastewater Only $128.54 $135.91 $145.43 $155.61 $164.94 $174.84 Fixed Charges ($/bi-monthly)
Wastewater Rate Schedule Current
Rates
Proposed Wastewater Rates
FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Residential
Single Family $4.65 85% $4.92 $5.27 $5.63 $5.97 $6.33
MFR: Duplex + Triplex $4.65 90% $4.92 $5.27 $5.63 $5.97 $6.33 MFR: Fourplex + Larger $4.65 97% $4.92 $5.27 $5.63 $5.97 $6.33 MFR : Individually metered $4.65 99% $4.92 $5.27 $5.63 $5.97 $6.33 Non-Residential
MFR : Mixed Use $4.32 95% $4.92 $5.27 $5.63 $5.97 $6.33 Commercial - Low $4.54 93% $4.43 $4.74 $5.07 $5.38 $5.70 Commercial - Medium $4.76 94% $6.27 $6.71 $7.18 $7.61 $8.07 Commercial - High $6.31 95% $7.73 $8.27 $8.85 $9.38 $9.95 Institutional $4.63 82% $4.29 $4.59 $4.91 $5.20 $5.52
Church/Schools $4.46 81% $4.90 $5.24 $5.61 $5.94 $6.30
Misc Industrial $4.39 88% $5.68 $6.07 $6.50 $6.89 $7.30 Wastewater Only -- 85% -- -- -- -- --
Volumetric Charges ($/hcf) of average winter water consumption) Discharge
Factor
Wastewater Rate Schedule Current
Rates
Proposed Wastewater Rates
FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Commodity Charges
All Customers ($/hcf)
Uniform Rate $3.49 $5.21 $6.04 $6.59 $7.18 $7.61
Recycled Water Rate Schedule Current Rates Proposed Rates Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 33
4. Recommendations and Next Steps
4.1 Consultant Recommendations
NBS recommends the City take the following actions:
• Approve and Accept This Study: NBS recommends the City Council formally approve and adopt this study and its recommendations and then proceed with the next steps outlined below to implement the recommended rate structure. This will provide documentation of the rate study analyses and the basis for analyzing potential changes to future rates. • Implement Recommended Levels of Rate Increases and Proposed Rates: Based on successfully meeting the Proposition 218 procedural requirements, the City Council should proceed with implementing the five-years of recommended rates and rate increases previously shown in Figure 18 (water) and Figure 27 and Figure 28 (sewer). This will help ensure the continued financial health of the City’s water and sewer utilities.
• Adopt Reserve Fund Targets: NBS recommends the City Council adopt the consultant-proposed reserve fund targets described in this study. The City should periodically evaluate reserve fund levels and attempt to maintain the recommended levels for the Operating, Capital Rehabilitation and Replacement, and Debt Reserves.
4.2 Next steps
Annually Review Rates and Revenue – Any time an agency adopts new utility rates or rate structures, those new rates should be closely monitored over the next several years to ensure the revenue generated is sufficient to meet the annual revenue requirements. Changing economic and water consumption patterns underscore the need for this review, as well as potential and unseen changing revenue requirements — particularly those related to environmental regulations that can significantly affect capital improvements and repair and replacement costs.
Note: The attached Technical Appendices provide more detailed information on the analysis of the financial plan, revenue requirements, cost-of-service, and the rate design analyses summarized in this report.
4.3 NBS’ Principal Assumptions and Considerations
In preparing this report and the opinions and recommendations included herein, NBS has relied on several principal assumptions and considerations regarding financial matters, conditions, and events that may occur in the future. This information and these assumptions, including the City’s budgets, capital improvement costs, customer accounts and consumption, and information from City staff were provided by sources we believe to be reliable, although NBS has not independently verified this data.
While we believe NBS’ use of such information and assumptions is reasonable for the purpose of this report and its recommendations, some assumptions will invariably not materialize as stated herein and may vary significantly due to unanticipated events and circumstances. Therefore, the actual results can be expected Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 34
to vary from those projected to the extent that actual future conditions differ from those assumed by us or provided to us by others.
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 35
Technical Appendices
These Appendices contain:
• Appendix A: Water Rate Study Tables and Figures
• Appendix B: Sewer Rate Study Tables and Figures
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 36
Appendix A. Water Rate Study Tables and Figures
CITY OF SANTA MONICA Financial Plan & Reserve Summary
WATER RATE STUDYFinancial Plan and Reserve Projections
3 Alternative 31 Alternative 1 0.00% 8.00% 7.00% 7.00% 7.00% 7.00% 2 Alternative 2 0.00% 11.00% 9.00% 7.00% 6.00% 6.00%3 Alternative 3 0.00% 20.00% 16.00% 9.00% 9.00% 6.00%4 Alternative 4 0.00% 70.00% 40.00% 3.00% 3.00% 3.00% TABLE 1 : FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Sources of Water Funds
Water Rate Revenue
Water Sales Revenue Under Current Rates $ 41,567,286 41,567,286 $ 41,741,869 $ 41,917,184 $ 42,093,237 $ 42,270,028 $ Revenue from Rate Increases 1 8,313,457 - 16,362,812 21,682,921 27,522,040 31,832,092 Subtotal: Rate Revenue After Rate Increases 41,567,286 $ 49,880,743 $ 58,104,681 $ 63,600,106 $ 69,615,276 $ 74,102,120 $ Non-Rate Revenue
Reimbursement from other funds $ 463,500 450,000 $ 477,405 $ 491,727 $ 507,986 $ 520,177 $ Water Neutrality Fee Revenue 1,354,862 1,328,296 1,381,959 1,409,598 1,437,790 1,472,297 Charges for Service (other than Rate Revenue) 767,000 767,000 767,000 767,000 767,001 767,001 Investment Income 221,468 750,000 177,395 147,340 173,573 173,573 Other Revenues 530,000 555,000 530,000 530,000 530,002 470,000 Subtotal: Non-Rate Revenue 3,850,296 $ 3,336,830 $ 3,333,759 $ 3,345,666 $ 3,416,352 $ 3,403,048 $ Total Sources of Funds 45,417,582 $ 53,217,573 $ 61,438,440 $ 66,945,772 $ 73,031,628 $ 77,505,169 $ Uses of Water Funds
Operating Expenses
Salaries and Benefits $ 11,873,093 9,457,601 $ 12,362,633 $ 12,777,742 $ 13,359,453 $ 14,558,417 $ Water Purchases2 5,727,788 5,207,080 6,300,567 6,930,623 7,623,686 7,806,654 Supplies and Expenses 16,733,036 16,503,494 17,082,869 17,374,298 17,747,400 18,052,432 Retirement and OPEB 51,627 49,169 54,209 56,919 59,766 215,663 Interfund Transfers 1,456,843 1,411,672 1,503,367 1,551,285 1,605,655 1,655,982 Subtotal: Operating Expenses $ 35,842,387 32,629,016 $ 37,303,644 $ 38,690,868 $ 40,395,959 $ 42,289,148 $ Other Expenditures
Debt Service (Interfund Loan Repayment) $ 706,367 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ Debt Service (Water Revenue Bond) 3,554,587 3,553,187 3,553,587 3,551,863 3,550,175 3,550,362 New Debt Service - - - - 8,361,556 8,361,556
Rate-Funded Capital Expenses 13,438,671 13,337,857 18,676,718 21,436,970 19,042,343 19,803,897 Subtotal: Other Expenditures 17,597,411 $ 17,699,625 $ 22,936,672 $ 25,695,199 $ 31,660,440 $ 32,422,182 $ Total Uses of Water Funds 50,226,427 $ 53,542,012 $ 60,240,316 $ 64,386,067 $ 72,056,400 $ 74,711,330 $ Annual Surplus/(Deficit) (4,808,845) $ (324,439) $ 1,198,124 $ 2,559,704 $ 975,229 $ 2,793,838 $ $ 50,205,182 46,376,131 $ 56,906,557 $ 61,040,401 $ 68,640,048 $ 71,308,282 $ Projected Annual Rate Revenue Adjustment 0.00% 20.00% 16.00% 9.00% 9.00% 6.00%
0.00% 20.00% 39.20% 51.73% 65.38% 75.31%
Debt Coverage After Rate Increase 24.60 18.10 34.17 40.00 3.60 3.88
1. Revenue from rate increases assumes an implementation date of July 1, 2025 and then July 1 each year thereafter.2. Net of water purchases and Arcadia AOP/UV System that is funded with the Gillette-Boeing Settlement Funds (shown in restricted reserves section of Table 2).
RATE REVENUE REQUIREMENTS SUMMARY BudgetNet Revenue Req't. (Total Uses less Non-Rate Cumulative Increase from Annual Revenue Increases Projected
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Financial Plan, 1 of 52
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CITY OF SANTA MONICA Financial Plan & Reserve Summary
WATER RATE STUDYFinancial Plan and Reserve ProjectionsTABLE 2 : RESERVE FUND SUMMARY Budget
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Total Beginning Cash 1 $ 10,290,659 15,376,561 $ 9,966,220 $ 11,164,344 $ 13,724,049 $ 14,699,277 $ Operating ReserveBeginning Reserve Balance $ 12,760,504 $ 7,627,220 7,951,659 $ 8,825,344 $ 9,672,717 $ 10,098,990 $ Plus: Net Cash Flow (After Rate Increases) (4,808,845) (324,439) 1,198,124 2,559,704 975,229 2,793,838 Plus: Transfer in of Settlement Funds to reach targets - - - - - - Transfer Out/In to Capital R&R Reserve - - - (1,712,332) (548,956) (2,320,541) Ending Operating Reserve Balance $ 7,627,22 7,951,659 $ 8,825,344 0 $ 9,672,717 $ 10,098,99 $ 10,572,287 0 $ Target Ending Balance (90-days of O&M) 2 $ 8,960,597 8,157,254 $ 9,325,911 $ 9,672,717 $ 10,098,990 $ 10,572,287 $ Capital Rehabilitation & Replacement Reserve Beginning Reserve Balance $ 1,616,057 $ 1,339,000 1,339,000 $ 1,339,000 $ 3,051,332 $ 3,600,287 $ Plus: Transfer of Operating Reserve Surplus - - - 1,712,332 548,956 2,320,541 Less: Use of Reserves for Capital Projects (277,057) - - - - - Ending Capital Rehab & Replacement Reserve Balance $ 1,339,00 1,339,000 $ 1,339,00 0 $ 3,051,332 0 $ 3,600,287 $ 5,920,82 $ 8 Capital R&R Reserve (3.0% of Net Assets) 1,339,000 $ 1,943,200 $ 2,735,100 $ 3,613,200 $ 4,376,200 $ 4,430,400 $ Rate Stabilization Reserve Beginning Reserve Balance $ 1,000,000 $ 1,000,000 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ Less: Use of Reserves for Operating Expenses - - - - - - Ending Rate Stabilization Reserve Balance $ 1,000,00 1,000,000 $ 1,000,00 0 $ 1,000,00 0 $ 1,000,00 0 $ 1,000,00 0 $ 0 Rate Stabilization Reserve ($1 million) 1 $ 1,000,000 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ Ending Balance $ 9,966,220 10,290,659 $ 11,164,344 $ 13,724,049 $ 14,699,277 $ 17,493,116 $ Minimum Target Ending Balance $ 11,903,797 10,496,254 $ 13,061,011 $ 14,285,917 $ 15,475,190 $ 16,002,687 $ Ending Surplus/(Deficit) Compared to Targets (205,595) $ (1,937,577) $ (1,896,667) $ (561,868) $ (775,913) $ 1,490,42 $ 8 Days Cash On Hand 113 10 107 0 127 10 124 8
SUMMARY OF CASH ACTIVITYUN-RESTRICTED RESERVES
Projected
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Financial Plan, 2 of 52
5/28/2025
CITY OF SANTA MONICA Financial Plan & Reserve Summary
WATER RATE STUDYFinancial Plan and Reserve ProjectionsTABLE 3 : RESERVE FUND SUMMARY, CONTINUED Restricted ReservesConnection Fee ReserveBeginning Reserve Balance 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,001 $ Plus: Reserve Funding from New Connection Fees 1,500,000 1,500,000 1,500,000 1,500,000 1,500,001 1,500,001 Plus: Interest Income - - - - - -
Less: Use of Connection Fees for CIP (1,500,000) (1,500,000) (1,500,000) (1,500,000) (1,500,000) (1,500,001) Ending Debt Reserve Balance 1,500,00 $ 1,500,00 0 $ 1,500,00 0 $ 1,500,00 0 $ 1,500,001 0 $ 1,500,001 $ Target Ending Balance - $ - $ - $ - $ - $ - $
Reserved for Olympic Sub-basin RemediationBeginning Reserve Balance 3 $ 193,365 $ 3,025,447 1,851,359 $ 4,648,073 $ 4,516,528 $ 4,323,811 $ Plus: Funding from Gillette/Boeing Settlement 4 - - -
Plus: Transfer in from General Fund 4 1,200,000 1,600,000 1,700,000 - - - Plus: Interest Income - - - - - -
Less: Use of Settlement Funds for CIP 4 (1,666,162) (1,564,616) (1,735,616) (1,808,141) (1,916,111) - Less: Borrow Settlement Funds for CIP (interest free) - - - - - - 740,610 740,610 740,610 740,610 740,610 -
Less: Use of Settlement Funds for O&M 4 899,640 882,000 917,633 935,985 982,785 - Less: Transfer to O&M to reach Reserve Targets - - - - - - Plus: Loan RepaymentEnding Olympic Sub-Basin Remediation Fund 1,851,359 $ 3,025,447 $ 4,648,073 $ 4,516,52 $ 4,323,811 8 $ 4,323,811 $ Annual Interest Earnings Rate 5 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Plus: Borrow Settlement Funds for City Yard Master
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Financial Plan, 3 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDY Rate Adjustment Charts and Report TablesCHART 1 $.0 Mil
$10.0 Mil$20.0 Mil$30.0 Mil$40.0 Mil$50.0 Mil$60.0 Mil$70.0 Mil$80.0 Mil$90.0 Mil 2025 2026 2027 2028 2029 2030
Annual Obligations
Fiscal Year Ending June 30
Water Revenue Requirements vs.
Revenue Under Existing and Increased Rates
Cash Funded Capital ExpensesDebt ServiceO&M ExpensesRevenues under Existing RatesRevenues under Adjusted Rates Prepared by NBSwww.nbsgov.com | 800.676.7516
Charts and Tables, 4 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDY Rate Adjustment Charts and Report TablesCHART 2 $.0 Mil
$2.0 Mil$4.0 Mil$6.0 Mil$8.0 Mil
$10.0 Mil$12.0 Mil$14.0 Mil$16.0 Mil$18.0 Mil$20.0 Mil
2025 2026 2027 2028 2029 2030
Fiscal Year Ending June 30
Un-Restricted Cash Balances vs.
Recommended Reserve Targets
Ending Cash Balance (Un-Restricted)Minimum Target Reserve Balance (60 day O&M)Recommended Target Reserve Balance (90 day O&M) Prepared by NBSwww.nbsgov.com | 800.676.7516
Charts and Tables, 5 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDY Rate Adjustment Charts and Report TablesCHART 3
20.00%
16.00%
9.00% 9.00%
6.00%
0%5%
10%15%20%25%
2026 2027 2028 2029 2030
Fiscal Year Ending June 30
Projected Adjustments to Rate Revenue
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Charts and Tables, 6 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and ExpensesTABLE 4 : OPERATING REVENUE FORECAST Budget 1 Budget 1 DESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Water Fund, 50
Charges for Service
Water - Commercial Sales 1 41,666,985 $ $ 41,567,286 $ 41,741,869 41,567,286 $ 41,917,184 $ 42,093,237 $ 42,270,028 $ Water - Meter Services/Install 15 750,000 750,000 750,000 750,000 750,000 750,000 750,000 Reimbursement from other funds 2 450,000 450,000 463,500 477,405 491,727 507,986 520,177 Damage Repair Work 15 17,000 17,000 17,000 17,000 17,000 17,001 17,001 Water Capital Facilities Fee 15 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Water Demand Mitigation Fee 15 - - - - - 1 1
Admin Fee Water Neutrality 2 208,000 214,864 219,161 223,545 228,015 232,576 238,158 In Lieu Fee Water Neutrality 2 780,000 1,000,000 1,020,000 1,040,400 1,061,208 1,082,432 1,108,411 Plan Check Fee Water Neutrality 2 104,000 107,432 109,581 111,772 114,008 116,288 119,079 Inspection Fee Water Neutrality 2 3,099 6,000 6,120 6,242 6,367 6,495 6,650 Subtotal: Charges for Service 45,479,084 $ 45,612,582 $ 45,652,648 $ 45,868,233 $ 46,085,510 $ 46,306,015 $ 46,529,505 $ Interest Income
Internal Dep./Investment 15 750,000 750,000 221,468 177,395 147,340 173,573 173,573 Unrealized Gain (Loss) 15 - - - - - - -
Accrued Investment Income 15 - - - - - - -
Subtotal: Interest Income 750,000 $ 750,000 $ 221,468 $ 177,395 $ 147,340 $ 173,573 $ 173,573 $ Other Revenues
MWD SoCal Water smart Rebate 15 - - - - - 1 320,000
Other Revenues - Misc 15 15,000 15,000 15,000 15,000 15,000 15,000 - Alt Fuel Tax Credit 15 - - - - - 1 150,000
Water - Misc Non-Operating 15 365,000 365,000 365,000 365,000 365,000 365,000 - Baysaver Fees 15 175,000 175,000 150,000 150,000 150,000 150,000 - Subtotal: Other Revenues 555,000 $ 555,000 $ 530,000 $ 530,000 $ 530,000 $ 530,002 $ 470,000 $ TOTAL: REVENUE 1 $ 46,917,582 46,784,084 $ 46,404,116 $ 46,575,628 $ 46,762,850 $ 47,009,589 $ 47,173,078 $ (Draft 5-year Forecast) 2
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Exhibit 1 (O&M), 7 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and ExpensesTABLE 5 : REVENUE SUMMARY DESCRIPTION FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Water Fund, 50
Rate Revenue 41,666,985 $ 41,567,286 $ 41,567,286 $ 41,741,869 $ 41,917,184 $ 42,093,237 $ 42,270,028 $ Connection Fee Revenue 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,001 1,500,001 Reimbursement from other funds 450,000 450,000 463,500 477,405 491,727 507,986 520,177 Water Neutrality Fee Revenue 1,095,099 1,328,296 1,354,862 1,381,959 1,409,598 1,437,790 1,472,297 Charges for Service (other than Rate Revenue) 767,000 767,000 767,000 767,000 767,000 767,001 767,001 Investment Income 750,000 750,000 221,468 177,395 147,340 173,573 173,573 Other Revenues 555,000 555,000 530,000 530,000 530,000 530,002 470,000 TOTAL: WATER OPERATING REVENUE 1 $ 46,917,582 46,784,084 $ 46,404,116 $ 46,575,628 $ 46,762,850 $ 47,009,589 $ 47,173,078 $
1. Revenue and expenses from PW_50FundForecast-Water-24-25.2. Source file for Budget: PW_50FundForecast-Water_24-25.
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Exhibit 1 (O&M), 8 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and ExpensesTABLE 6 : OPERATING EXPENSE FORECAST DESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Water Fund, 50
Permanent Employees 3 5,911,102 $ 6,125,331 $ 6,247,838 $ 6,372,794 $ 6,500,250 $ 6,630,255 $ $ 6,829,163 Vacation Lump Sum Pays 15 - - - - - - -
Council/Board Allowance 15 2,572 2,623 2,623 2,623 2,623 2,623 2,623Standby Pay 3 27,562 28,113 28,676 29,249 29,834 30,431 31,344Overtime 3 164,663 167,956 171,315 174,741 178,236 181,801 187,255Temporary Employees 15 - - - - - - - Medicare Employer Contribution 5 83,234 85,747 86,990 88,252 89,531 90,830 99,004Workers' Comp Insurance 4 193,248 200,405 207,561 214,718 229,033 244,303 263,847Medical - Misc. Employee 5 1,009,623 1,080,297 1,188,327 1,307,159 1,437,875 1,581,663 1,724,012 Medical Trust - Misc. Employee 3 114,533 116,812 119,148 121,531 123,962 126,441 130,234 Dental 7 60,868 61,956 63,071 64,206 65,362 66,539 68,535Vision 6 7,436 7,488 7,563 7,639 7,715 7,792 7,909Employee Health Contribution 8 (80,784) (86,437) (95,066) (104,573) (115,030) (126,533) (135,390)Retirement - Misc. Employee 9 1,472,660 1,588,838 1,993,060 2,103,022 2,184,084 2,400,152 3,102,869 Retirement - As Needed 15 - - - - - - -
Unemployment 15 27,244 28,089 28,651 29,224 29,808 30,404 30,404EAP 15 1,007 1,007 1,017 1,027 1,038 1,048 1,048DCAP 15 1,855 1,855 1,855 1,855 1,855 1,855 1,855Life Insurance and AD&D 10 8,897 9,165 9,348 9,535 9,726 9,920 10,417Disability Insurance 6 37,206 38,356 39,507 40,692 41,913 43,170 43,818 EBB Budget Request: Add 1 FTE Water Quality Sup 3- 232,344 239,314 246,494 253,889 248,473 EBB Budget Request: Add 1 FTE AMI Supervisor 3- 211,798 218,152 224,696 231,437 235,092 EBB Budget Request: Add 1 FTE Water Conservatio 3- 208,085 214,328 220,757 227,380 245,443 EBB Budget Request: Add 1 FTE SCADA Supervisor (50/50 Split with WW Fund) 114,059 110,737 117,481 121,005 124,635 Equity Adjustment for ALL POSITIONS (10%) 3- 1,008,645 1,113,084 1,150,498 1,203,047 1,305,827 Salaries and Benefits - SUBTOTAL 9,042,926 $ 9,457,601 $ 11,873,093 $ 12,362,633 $ 12,777,742 $ 13,359,453 $ 14,558,417 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 9 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and ExpensesTABLE 7 : OPERATING EXPENSE FORECAST, CONTINUED DESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Supplies and Expenses
50500001.521000 - ADVERTISING 12 - $ - $ - $ - $ - $ - $ $ - 50500001.521810 - VEHICLES - FUELS / LUBRICATIO 12 25,009 27,510 28,170 28,846 29,539 30,248 30,974 50500001.521820 - CNG/LNG FUEL 12 62,915 94,373 96,638 98,957 101,332 103,764 106,255 50500001.523330 - UTILITIES BILLING SERVICES 15 333,820 345,013 351,913 358,952 366,131 373,453 373,45350500001.523340 - PROPERTY TAXES 2 95,000 96,900 98,838 100,815 102,831 104,888 107,40550500001.523370 - METERED POSTAGE 2 25,859 26,376 26,904 27,442 27,990 28,550 29,23550500001.523420 - INDIRECT COST ALLOCATION 12 2,044,223 2,107,594 2,181,360 2,257,707 2,336,727 2,418,513 2,476,557 50500001.524000 - MEMBERSHIPS AND DUES 2 13,578 13,850 14,127 14,410 14,698 14,992 15,35150500001.524700 - RENT 2- - - - - - - 50500001.524702 - OTHER OPERATING RENTS 2 231,087 235,709 240,423 245,232 250,136 255,139 261,262 50500001.524710 - REIMBURSE ENGINEERING OFF 2- - - - - - - 50500001.525000 - OFFICE SUPPLIES AND EXPENSE 2 16,189 16,513 16,843 17,180 17,524 17,874 18,303 50500001.525001 - DISCOUNTS AVAILABLE 2- - - - - - -
50500001.525002 - DISCOUNTS LOST 2- - - - - - -
50500001.525080 - SPECIAL DEPARTMENT SUPPLIE 2 1,334,125 1,360,808 1,388,024 1,415,785 1,444,100 1,472,982 1,508,334 50500001.525190 - RIDESHARE AND PARKING PRO 2 9,400 9,588 9,588 9,588 9,588 9,588 9,81850500001.525200 - UNIFORM / PROTECTIVE CLOTH 2 42,824 43,680 44,554 45,445 46,354 47,281 48,415 50500001.525320 - UNIFORM RENTAL 2- - - - - - -
50500001.528000 - UTIL - LIGHT / POWER 2 921,174 1,050,138 1,071,141 1,092,564 1,114,415 1,136,703 1,163,984 50500001.528010 - UTILITIES - NATURAL GAS 2 2,120 3,180 3,244 3,308 3,375 3,442 3,52550500001.528020 - UTILITIES - WATER 2 5,160 5,882 6,000 6,120 6,242 6,367 6,52050500001.528030 - WATER PURCHASES 2 4,124,588 5,727,788 5,207,080 6,300,567 6,930,623 7,623,686 7,806,65450500001.528040 - UTILITIES - TELEPHONE 2 99,226 101,211 103,235 105,300 107,406 109,554 112,183 50500001.529040 - VEHICLE MGMT FUND-MAINTE 2 290,401 307,572 314,954 322,513 330,253 338,179 346,295 50500001.529230 - COMPUTER EQUIP/SOFTWARE 2 180,642 159,805 163,001 166,261 169,586 172,978 177,13050500001.529540 - CSB WATER PRODUCTION-O&M 2 100,000 102,000 104,040 106,121 108,243 110,408 113,05850500001.531010 - CONFERENCES/MEETINGS/TRA 2 14,893 15,191 15,495 15,805 16,121 16,443 16,838 50500001.531011 - FOOD PURCHASES 2 2,160 2,203 2,247 2,292 2,338 2,385 2,44250500001.531020 - TRAINING COSTS 2- - - - - - - 50500001.531030 - TRAINING 2 25,566 26,077 26,599 27,131 27,673 28,227 28,90450500001.534000 - BANK FEES 2 5,348 5,455 5,564 5,675 5,789 5,905 6,04650500001.534550 - GENERAL LIABILITY / AUTO 2 342,301 388,755 444,844 483,526 502,867 522,982 535,533 50500001.534570 - PROPERTY INSURANCE 2 476,193 554,384 639,674 710,749 746,286 783,600 802,40750500001.535000 - INTEREST EXPENSE 2- - - - - - - 50500001.535010 - INTEREST EXPENDITURE - BON 2 2,246,130 2,291,053 2,059,579 1,998,588 1,926,863 1,926,864 1,973,108 50500001.536030 - WASTE DISPOSAL (BRINING) 2 700,000 714,000 728,280 742,846 757,703 772,857 791,405 50500001.536050 - REGULATORY AGENCY FEES 2 116,819 119,155 121,538 123,969 126,448 128,977 132,073 50500001.536550 - LEGAL EXPENSE 2- - - - - - -
50500001.536551 - LEGAL EXPENSE CONFIDENTIAL 2 57,000 - - - - - - 50500001.537000 - SCADA O & M 2 60,964 62,183 63,427 64,695 65,989 67,309 68,92450500001.537030 - TRANSFER STATION FEE 2 1,095 1,117 1,139 1,162 1,185 1,209 1,238 Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 10 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and Expenses
50500001.550010 - CONTRACTUAL SERVICES 2 1,211,073 927,543 946,094 965,016 984,316 1,004,002 1,028,098 50500001.550200 - EMPLOYEE MEDICAL EXAMS 2 7,886 8,044 8,205 8,369 8,536 8,707 8,91650500001.552010 - PROFESSIONAL SERVICES 2 605,874 617,178 629,522 642,112 654,954 668,053 684,08750500001.552015 - PROF SVCS - WATER CONSERVA 2 90,000 91,800 93,636 95,509 97,419 99,367 101,752 50500001.553150 - EOC - SUPPLIES AND EXPENSES 2- - - - - - - 50500001.555750 - WATER CONSERVATION REBAT 2- - - - - 1 1 50500001.555751 - LAUNDROMAT REBATES 2- - - - - - -
50500001.555752 - LANDSCAPE REBATES 2 220,000 224,400 250,000 250,000 250,000 250,000 256,00050500001.555753 - LANDSCAPE CONSULTANT 2- - - 50500001.555754 - DIRECT INSTALL PROGRAM 2- - - - - - - 50500001.555755 - MWD WTR CONSERV REBATES 2 37,434 38,183 38,947 39,726 40,520 41,331 42,32250500001.555756 - SMMUSD PROGRAM 2- - - - - - - 50500001.555780 - WATER DEMAND MITIGATION 2- - - - - - - 50500001.555790 - BAYSAVER - INDOOR PLUMBIN 2- - - - - 1 1 50500001.555800 - UNRESERVED-PRIVATE OUTDO 2- - - - - - - 50500001.575020 - FURNITURE & FURNISHINGS 2- - - - - - - 50500001.575030 - COMPUTER EQUIPMENT 2- - - - - 1 150500001.575090 - MISCELLANEOUS EQUIPMENT 2- - - - - - - x25671.566380 - DEBRIS REMOVAL 2- - - - - - -
Supplies and Expenses - SUBTOTAL 16,178,076 $ 17,401,503 $ 18,065,572 $ 18,900,278 $ 19,732,100 $ 20,706,809 $ 21,194,809 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 11 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and ExpensesTABLE 8 : OPERATING EXPENSE FORECAST, CONTINUED DESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Supplies and Expenses, cont.
50500002.525080 - SPECIAL DEPARTMENT SUPPLIE 15 50,000 51,000 52,020 53,060 54,122 55,204 55,204 50500002.525081 - CHEMICALS (Charnock) 15 85,000 86,700 88,434 90,203 92,007 93,847 93,847 50500002.525084 - FILTER MEDIA REPLACEMENT 15 100,000 569,732 581,127 592,749 604,604 616,696 616,69650500002.527501 - FIELD EQUIP & TOOLS 15 - - - - - - - 50500002.527502 - ANALYTICAL INSTR CONSUMAB 15 - - - - - - - 50500002.528000 - UTIL - LIGHT / POWER 15 1,111,497 1,267,107 1,292,449 1,318,298 1,344,664 1,371,557 1,371,557 50500002.536030 - WASTE DISPOSAL (BRINING) 15 66,808 68,144 69,507 70,897 72,315 73,761 73,761 50500002.536050 - REGULATORY AGENCY FEES 15 10,953 11,172 11,395 11,623 11,856 12,093 12,093 50500002.550010 - CONTRACTUAL SERVICES 15 1,100,000 866,286 883,612 901,284 919,310 937,696 937,696 50500002.552010 - PROFESSIONAL SERVICES 15 - - - - - - - Supplies and Expenses - SUBTOTAL 2,524,258 $ 2,920,141 $ 2,978,544 $ 3,038,115 $ 3,098,877 $ 3,160,855 $ 3,160,855 $ Supplies and Expenses
50500003.525080 - SPECIAL DEPARTMENT SUPPLIE 15 32,086 $ 32,728 $ 33,383 $ 34,050 $ 34,731 $ 35,426 $ 35,426 50500003.525081 - CHEMICALS (Arcadia WTP) 15 449,126 458,109 467,271 476,617 486,149 495,872 495,872 50500003.525082 - MEMBRANE REPLACEMENT 15 - - - - - - - 50500003.525083 - CARTRIDGE FILTER REPLACEME 15 - - - - - - - 50500003.525084 - FILTER MEDIA REPLACEMENT 15 - - - - - - - 50500003.528000 - UTIL - LIGHT / POWER 15 498,544 568,340 579,707 591,301 603,127 615,189 615,18950500003.536030 - WASTE DISPOSAL (BRINING) 15 77,292 78,838 80,415 82,023 83,664 85,337 85,337 50500003.550010 - CONTRACTUAL SERVICES 15 245,995 250,915 255,933 261,052 266,273 271,598 271,598 50500003.552010 - PROFESSIONAL SERVICES 15 - - - - - - - Supplies and Expenses - SUBTOTAL 3 $ 1,388,930 1,303,043 $ 1,416,709 $ 1,445,043 $ 1,473,944 $ 1,503,422 $ 1,503,422 $ All Other Transactions
50800004.51100C - MOU CONTINGENCY 2- - - - - - 168,802
50800004.513003 - RETIREMENT - MISC. EMPL 15 - - - - - - -50800004.513008 - PERS PAYDOWN SAVINGS - - - - - 1 -50800004.514001 - OPEB PAYMENT ARC 10 85,496 89,771 94,260 98,973 103,921 109,117 85,53150800004.514002 - REIMBURSEMENT FROM OPEB 10 (38,669) (40,602) (42,632) (44,764) (47,002) (49,352) (38,669) Retirement and OPEB - SUBTOTAL 3 $ 49,169 46,827 $ 51,627 $ 54,209 $ 56,919 $ 59,766 $ 215,663 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 12 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WATER RATE STUDYOperating Revenue and ExpensesTABLE 9 : OPERATING EXPENSE FORECAST, CONTINUED DESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Environmental Reimbursement 2 900,874 $ 940,385 $ 968,597 $ 997,654 $ 1,027,584 $ 1,061,560 $ $ 1,087,038 MWD Recycled Water Rebate 2 9,696 9,929 10,167 10,411 10,661 10,917 11,179Reimbursement General Fund SCADA 2 91,119 94,518 97,354 100,274 103,282 106,697 109,258Transfer Out - Engineering Reimb. 2 256,525 266,905 274,912 283,160 291,654 301,298 308,529Transfer Out - Water/Wastewater Reimbursment 2 302,051 313,541 322,947 332,636 342,615 353,943 362,438Transfer Out - GIS Analyst for PW 3 43,527 28,528 29,384 30,265 31,173 32,204 33,170Transfer Out - Admin Analysis Reimb 3 3,466 3,590 3,698 3,809 3,923 4,053 4,174Transfer Out - WTR Res Prot Spec Xfer 3 73,877 76,970 79,279 81,657 84,107 86,888 89,495Transfer Out - ADA Coord Reimb 3 73,877 76,970 79,279 81,657 84,107 86,888 89,495Transfer-In Water/Wastewater Transfer 15 (287,109) (303,664) (312,774) (322,157) (331,822) (342,793) (342,793) Transfer-In from General Fund - Low Income Disc. 15 (96,000) (96,000) (96,000) (96,000) (96,000) (96,000) (96,000) Interfund Transactions - SUBTOTAL 3 $ 1,411,672 1,371,903 $ 1,456,843 $ 1,503,367 $ 1,551,285 $ 1,605,655 $ 1,655,982 $ TOTAL : WATER OPERATING EXPENSES 1, 2, 3 $ 32,629,016 30,467,033 $ 35,842,387 $ 37,303,644 $ 38,690,868 $ 40,395,959 $ 42,289,148 $ TABLE 10 : FORECASTING ASSUMPTIONSINFLATION FACTORS 4 Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Customer Growth 5 1 -- -- 0.00% 0.42% 0.42% 0.42% 0.42% General Cost Inflation 2 -- -- 2.40% 2.40% 2.40% 2.40% 2.40%Salary Inflation 3 -- -- 3.00% 3.00% 3.00% 3.00% 3.00%Workers' Comp Insurance 4 -- 0.00% 8.00% 8.00% 8.00% 8.00%Medical, Misc. Employees 5 -- 5.90% 7.95% 9.00% 9.00% 9.00%Medical Inflation 6 -- 1.50% 1.50% 1.50% 1.50% 1.50%Dental Inflation 7 -- 3.00% 3.00% 3.00% 3.00% 3.00%Employee Heath Contribution 8 -- 6.86% 7.00% 7.00% 7.00% 7.00%Retirement 9 -- 24.17% 25.97% 27.17% 28.59% 29.28%Insurance 10 -- -- 5.00% 5.00% 5.00% 5.00% 5.00%Property Insurance 11 -- 10.00% 10.00% 10.00% 10.00% 10.00%Energy 12 -- -- 2.40% 2.40% 2.40% 2.40% 2.40%Chemicals 13 -- -- 2.40% 2.40% 2.40% 2.40% 2.40%Fuel 14 -- -- 3.00% 3.00% 3.00% 3.00% 3.00%No Escalation 15 -- -- 0.00% 0.00% 0.00% 0.00% 0.00%
1. Revenue and expenses from PW_50FundForecast-Water-24-25.2. Source file for Budget: PW_50FundForecast-Water_24-25.3. Not Used.4. Inflation factors estimated by City.5. Customer growth estimated in 2015 Urban Water Master Plan. Source file: Item 22-UWMP_Final_2015.pdf, Page 13 of pdf.
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 13 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 11 : CAPITAL FUNDING SUMMARY CAPITAL FUNDING FORECAST Budget
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Grants $ - - $ - $ - $ - $ - $ Use of SRF/WIFIA Loan Proceeds - 19,965,408 18,974,012 58,248,855 7,486,151 37,078,807Use of New Revenue Loan Proceeds - - - - - -Use of Settlement Funds 2 1,666,162 1,564,616 1,735,616 1,808,141 1,916,111 - Use of Capital Rehabilitation and Replacement Reserve 277,057 - - - - -Use of Connection Fee Reserve 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,001Rate Revenue 13,337,857 13,438,671 18,676,718 21,436,970 19,042,343 19,803,897Total Sources of Capital Funds 16,679,530 $ 36,570,242 $ 40,886,347 $ 82,993,966 $ 29,944,605 $ 58,382,705 $ Uses of Capital Funds
Total Project Costs $ 36,570,242 16,679,530 $ 40,886,347 $ 82,993,966 $ 29,944,605 $ 58,382,705 $ Capital Funding Surplus (Deficiency) - $ - $ - $ - $ - $ - $ New SRF/WIFIA Loan Proceeds $ 19,965,408 - $ 18,974,012 $ 58,248,855 $ 7,486,151 $ 37,078,807 $ Future Revenue Bond Proceeds Settlement Funds 2 $ 1,564,616 $ 1,666,162 $ 1,735,616 $ 1,808,141 $ 1,916,111 $ - Policy Choice 2025 2026 2027 2028 2029 2030
1 No Loan Funding $ - $ - $ - $ - $ - $ - 2 $105 million Loan Funding 14,430,464 - 11,669,900 50,000,485 - 29,977,507 3 $139 million Loan Funding 18,974,012 19,965,408 58,248,855 7,486,151 37,078,807 3 CAPITAL IMPROVEMENT PROGRAM FUNDING OPTIONSPolicy Choice 2025 2026 2027 2028 2029 2030 1 100% CIP Funding $ 16,679,530 $ 36,570,242 $ 40,886,347 $ 82,993,966 $ 29,944,605 $ 58,382,705 2 75% CIP Funding 12,509,648 31,035,297 33,582,235 74,745,596 22,458,454 51,281,406 3 50% CIP Funding 8,339,765 25,500,353 26,278,123 66,497,226 14,972,303 44,180,106 4 25% CIP Funding 4,169,883 19,965,408 18,974,012 58,248,855 7,486,151 37,078,807 1 $ 1
Capital Improvement Program Funding Choice 2025 2026 2027 2028 2029 2030Effective Annual Funding Amount $ 36,570,242 16,679,530 $ 40,886,347 $ 82,993,966 $ 29,944,605 $ 58,382,705 $ Funding Sources
Plan CIP Alternative
Projected
Plan Loan Funding Alternative
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 14 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan ExpendituresCAPITAL IMPROVEMENT PROGRAMTABLE 12 : CAPITAL IMPROVEMENT PROGRAM COSTS (IN CURRENT-YEAR DOLLARS) Project Description 1 2025 2026 2027 2028 2029 2030
C259075.589000 (No Tyler Account) - BOOSTER PUMP STATION FOR 500-FC5004600.689000 - ANNUAL STREET/PARK PARKING LOT 250,000 250,000 250,000 250,000 250,000 C5004840.689000 - VALVE STUDY/REPLACEMENT 150,000 150,000 150,000 150,000 150,000 C5004840.689000 - WATER MAIN REPLACEMENT 7,500,000 2,500,000 8,800,000 9,000,000 9,550,000 C5004850.689000 - CITY FORCES-WATER MAIN REPL PR 322,841 307,468 338,983 355,933 373,729 C5004870.689000 - NON-POTABLE WATER MAIN EXPANSI 1,500,000 1,306,298 1,500,000 2,500,000 3,000,000 C5004870.689520 - NON-POTABLE WATER MAIN EXPANSIC5004870.689740 - NON-POTABLE WATER MAIN EXPANSIC5005010.689000 - WATERRESOURCESTENANTIMPROVEC5005030.689000 - HANSEN8SOFTWAREUPGRADEC5005050.689000 - SCADASYSTEMSUPGRADEC5005070.689000 - CALIFINCLINECONSTRUCTIONC5005170.689000 - AUTOMETERREADINGPILOTPROJC5005250.689000 - WATERSYSTEMIMPROVEMENTC5005320.689000 - SANVICBOOSTERSTEMERGENC5005330.689000 - UTILITYBILLINGSOFTWARE 422,607C5005350.689000 - CHARNOCKWELLFIELDRESTORATIONC5005350.689000 - GMPC5005410.689000 - CITY YARDS PROJECTC5005650.689000 - COLORADOAVEESP-WATERMAINC5005710.689000 - EXPOWATERBETTERMENTSC5005840.689000 - WATERSYSTEMSDATAINTEGRATIONC5005850.689000 - BOOSTERPUMPCHARNOCKH2OFACC5005870.689000 - WATERMAINREPLACE-OLYLOOPC5005880.689410 - OLYMPIC SUB-BASIN REMEDIATION 700,000 664,976 700,000 700,000 700,000 C5006050.689410 - OLYMPIC SUB-BASIN WELL HYDROLOC5006120.689000 - CLIMATEACTIONPLANC5006130.689000 - SUSTAINABLEURBANWATERMASTERC5006140.689000 - GROUNDWATERMANAGEMENTPLAN 265,022 C5006390.689000 - IRRIGATIONCONTROLLERREPLAMNTC5006400.689000 - TURFANDIRRIGATIONIMPROVEMNTC5006840.689000 - EPAWATERMAINREPLACEMENTC5006940.689000 - ARCADIA WATER PLANT MEMBRANE R 1,500,000 1,500,000 C5007180.689000 - COASTAL SUBBASIN BORINGSC5007260.689000 - Redrill Santa Monica Well #3 223,280 C5007260.689410 - REDRILL SANTA MONICA WELL #3-GC5007330.689000 - SUSTAINABLE WATER INFRASTRUCTUC5007330.689740 - SUSTAINABLE WATER INFRASTRUCTU Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 15 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan Expenditures
C5007350.689000 - WATER FACILITY CONTROLLER ANDC5007370.689000 - ARCADIA REVERSE OSMOSIS (RO) RC5007410.689000 - ARCADIA VAPOR PHASE GRANULAR AC5007460.689410 - CITY/USGS MONITORING WELL & NUC5007620.689000 - RESERVOIR IMPROVEMENTS 2,731,382 5,600,000 2,000,000 1,000,000 C5007630.689000 - CITY/USGS NUMERICAL FLOW MODEL 1,200,000 400,000 800,000 C5007650.689000 - ARCADIA ENHANCED RO RECOVERYC5007660.689000 - DINSAR STUDYC5007740.689000 - ARCADIA CAPACITY EXPANSION ANDC5007740.689740 - ARCADIA CAPACITY EXPANSION ANDC5007750.689000 - OLYMPIC WELLFIELD RESTORATIONC5007750.689410 - OLYMPIC WELLFIELD RESTORATIONC5007750.689740 - OLYMPIC WELLFIELD RESTORATIONC5007760.689000 - GROUNDWATER RESILIENCY WELLC5007760.689740 - GROUNDWATER RESILIENCY WELLC5007940.689000 - ROOFTOP FALL PROTECTION AND ACC5008010.689520 - CITYWIDE MUNICIPAL DRINKING WAC5008040.689000 - CONSTRUCTION MGMT SOFTWARE 10,000 10,000 10,000 10,000 15,000 C5008050.689000 - GREEN SAND MEDIA REPLACEMENT 500,000C5008060.689000 - OLYMPIC WELLS EQUIPPINGC5008060.689520 - WATER DEMAND MITIGATION FEEC5008060.689740 - OLYMPIC WELLS EQUIPPINGC5008080.689000 - SM GROUNDWATER BASIN SUSTAINABC5008200.689740 - AMI SMART WATER METERSC5008530.689000 - ARCADIA PLANT FENCING 606,000 1,000,000 C5008540.689000 - ELECTRICAL-ARCADIA & CHARNOCK 1,000,000 1,000,000C5008550.689000 - GREEN SAND FILTER SCAFFOLDING 1,000,000 1,000,000C5008560.689000 - GROUNDWATER WELL SM11I (100% Funded by Grant)C5008570.689000 - GROUNDWATER WELL SM12I 5,600,000 1,332,787C5008580.689000 - GROUNDWATER PLAN SUST IMPL. 150,000 150,000 150,000 150,000 200,000C5008590.689000 - INFRASTRUCTURE CONDITION/ASSETC5008600.689000 - WATER & WASTEWATER MASTER PLAN 1,000,000 C5008780.689000 - Roof and HVAC AWTP 700,000 C5009790.689000 - Water TI City Yards 300,000 750,000 I5000010.689000 - FLEETVEHICLEREPLACEMENTPROG 652,700 632,400 655,050 665,750 699,038I5000020.689000 - TELECOMMUNICATIONSSERVICES 61,282 59,501 63,116 65,005 68,255 I5000030.689000 - COMPUTEREQUIPMENTREPLACPROG 80,474 68,169 86,169 92,316 96,932 NEW CIP - Airport Wells 2 & 3, Civil Work & Pipeline to ArcadiaNew CIP - Olympic Wellfield Management (Professional Services)NEW CIP - Retrofit Vault (Booster Pump Arcadia)NEW CIP - SWIP $11M shortage (shifted all to Wastewater) New CIP - AMI Smart Water Meters (split 50/50 with wastewater fund) Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 16 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan Expenditures
C5009050.689000 - GROUNDWATER WELL IMPROVEMENTS 700,000 3,500,000 1,000,000 5,500,000 New CIP - Charnock 18 ReplacementNew CIP - Reservoir Improvements (Mt. Olivette, San Vincente, and Riviera)New CIP - Bond Funded Projects (refer to Revenue Bond Tab) (.689740) - BALANCE unbudgeted so farC5009040.689000 - ARCADIA OPS BUILDING REPLACEME 800,000 1,000,000 9,000,000 9,000,000New CIP - Nonpotable Water Main Expansion C5009020.689000 - ONE WATER PLANSalt Nutrient Management Plan /CIPIDEA0001259 50,000 100,000Network Upgrades /CIPIDEA0001261C5009070.689410 - OLYMPIC AWTF REMEDIATION 917,633 899,640 935,985 954,705 1,002,440 Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 17 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 13 : CAPITAL IMPROVEMENT PROGRAM COSTS (IN CURRENT-YEAR DOLLARS) Project Description 1 2025 2026 2027 2028 2029
Future CIP Costs 24,502,573CIPS Funded through Pay-Go or WIFIA Loan (note the amounts in in addition to the green highlighted items from the CIP list above) C5007620.689000 - RESERVOIR IMPROVEMENTS
Riviera 12,010,159
Mt Olivette 20,999,443
San Vincente 25,858,861
Arcadia WTP Improvements
Arcadia WTP - New Lab (in addition to C5009040.689000 - Arcadia OPS Building Replaceme 5,000,000 5,000,000 Arcadia Reservoir Replacement 9,758,084
Direct Potable Reuse (Pipeline, Pump Station, 3 mgd Ozone) 6,000,000 2,000,000 10,000,000 Total: CIP Program Costs (Current-Year Dollars) $ 21,494,930 16,679,530 $ 27,539,303 $ 30,193,709 $ 26,605,394 $ 24,502,573 $ Total: CIP Loan Funded Program Costs (Current-Year Dollars) $ 14,010,159 - $ 11,000,000 $ 45,757,527 $ - $ 25,858,861 $ Total: CIP All Program Costs (Current-Year Dollars) $ 35,505,089 16,679,530 $ 38,539,303 $ 75,951,236 $ 26,605,394 $ 55,861,434 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 18 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 14 : CAPITAL IMPROVEMENT PROGRAM COSTS (IN FUTURE-YEAR DOLLARS) Project Description 1 2025 2026 2027 2028 2029 2030
C259075.589000 (No Tyler Account) - BOOSTER PUMP STATIO $ - - $ - $ - $ - $ - $ C5004600.689000 - ANNUAL STREET/PARK PARKING LOT 250,000 $ 257,500 $ 265,225 $ 273,182 $ 281,377 $ - $ C5004840.689000 - VALVE STUDY/REPLACEMENT 150,000 $ 154,500 $ 159,135 $ 163,909 $ 168,826 $ - $ C5004840.689000 - WATER MAIN REPLACEMENT 2,500,000 $ 7,725,000 $ 9,335,920 $ 9,834,543 $ 10,748,609 $ - $ C5004850.689000 - CITY FORCES-WATER MAIN REPL PR 307,468 $ 332,526 $ 359,627 $ 388,938 $ 420,635 $ - $ C5004870.689000 - NON-POTABLE WATER MAIN EXPANSI 1,306,298 $ 1,545,000 $ 1,591,350 $ 2,731,818 $ 3,376,526 $ - $ C5004870.689520 - NON-POTABLE WATER MAIN EXPANSI - $ - $ - $ - $ - $ - $ C5004870.689740 - NON-POTABLE WATER MAIN EXPANSI - $ - $ - $ - $ - $ - $ C5005010.689000 - WATERRESOURCESTENANTIMPROVE - $ - $ - $ - $ - $ - $ C5005030.689000 - HANSEN8SOFTWAREUPGRADE - $ - $ - $ - $ - $ - $ C5005050.689000 - SCADASYSTEMSUPGRADE - $ - $ - $ - $ - $ - $ C5005070.689000 - CALIFINCLINECONSTRUCTION - $ - $ - $ - $ - $ - $ C5005170.689000 - AUTOMETERREADINGPILOTPROJ - $ - $ - $ - $ - $ - $ C5005250.689000 - WATERSYSTEMIMPROVEMENT - $ - $ - $ - $ - $ - $ C5005320.689000 - SANVICBOOSTERSTEMERGEN 422,607 $ - $ - $ - $ - $ - $ C5005330.689000 - UTILITYBILLINGSOFTWARE - $ - $ - $ - $ - $ - $ C5005350.689000 - CHARNOCKWELLFIELDRESTORATION - $ - $ - $ - $ - $ - $ C5005350.689000 - GMP - $ - $ - $ - $ - $ - $ C5005410.689000 - CITY YARDS PROJECT - $ - $ - $ - $ - $ - $ C5005650.689000 - COLORADOAVEESP-WATERMAIN - $ - $ - $ - $ - $ - $ C5005710.689000 - EXPOWATERBETTERMENTS - $ - $ - $ - $ - $ - $ C5005840.689000 - WATERSYSTEMSDATAINTEGRATION - $ - $ - $ - $ - $ - $ C5005850.689000 - BOOSTERPUMPCHARNOCKH2OFAC - $ - $ - $ - $ - $ - $ C5005870.689000 - WATERMAINREPLACE-OLYLOOP - $ - $ - $ - $ - $ - $ C5005880.689410 - OLYMPIC SUB-BASIN REMEDIATION 664,976 $ 721,000 $ 742,630 $ 764,909 $ 787,856 $ - $ C5006050.689410 - OLYMPIC SUB-BASIN WELL HYDROLO - $ - $ - $ - $ - $ - $ C5006120.689000 - CLIMATEACTIONPLAN - $ - $ - $ - $ - $ - $ C5006130.689000 - SUSTAINABLEURBANWATERMASTER - $ - $ - $ - $ - $ - $ C5006140.689000 - GROUNDWATERMANAGEMENTPLAN 265,022 $ - $ - $ - $ - $ - $ C5006390.689000 - IRRIGATIONCONTROLLERREPLAMNT - $ - $ - $ - $ - $ - $ C5006400.689000 - TURFANDIRRIGATIONIMPROVEMNT - $ - $ - $ - $ - $ - $ C5006840.689000 - EPAWATERMAINREPLACEMENT - $ - $ - $ - $ - $ - $ C5006940.689000 - ARCADIA WATER PLANT MEMBRANE R - $ 1,545,000 $ - $ - $ 1,688,263 $ - $ C5007180.689000 - COASTAL SUBBASIN BORINGS - $ - $ - $ - $ - $ - $ C5007260.689000 - Redrill Santa Monica Well #3 $ - 223,280 $ - $ - $ - $ - $ C5007260.689410 - REDRILL SANTA MONICA WELL #3-G - $ - $ - $ - $ - $ - $ C5007330.689000 - SUSTAINABLE WATER INFRASTRUCTU - $ - $ - $ - $ - $ - $ C5007330.689740 - SUSTAINABLE WATER INFRASTRUCTU - $ - $ - $ - $ - $ - $ C5007350.689000 - WATER FACILITY CONTROLLER AND - $ - $ - $ - $ - $ - $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 19 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan Expenditures
C5007370.689000 - ARCADIA REVERSE OSMOSIS (RO) R - $ - $ - $ - $ - $ - $ C5007410.689000 - ARCADIA VAPOR PHASE GRANULAR A - $ - $ - $ - $ - $ - $ C5007460.689410 - CITY/USGS MONITORING WELL & NU - $ - $ - $ - $ - $ - $ C5007620.689000 - RESERVOIR IMPROVEMENTS 2,731,382 $ 2,060,000 $ 5,941,040 $ 1,092,727 $ - $ - $ C5007630.689000 - CITY/USGS NUMERICAL FLOW MODEL - $ 412,000 $ 1,273,080 $ 874,182 $ - $ - $ C5007650.689000 - ARCADIA ENHANCED RO RECOVERY - $ - $ - $ - $ - $ - $ C5007660.689000 - DINSAR STUDY - $ - $ - $ - $ - $ - $ C5007740.689000 - ARCADIA CAPACITY EXPANSION AND - $ - $ - $ - $ - $ - $ C5007740.689740 - ARCADIA CAPACITY EXPANSION AND - $ - $ - $ - $ - $ - $ C5007750.689000 - OLYMPIC WELLFIELD RESTORATION - $ - $ - $ - $ - $ - $ C5007750.689410 - OLYMPIC WELLFIELD RESTORATION - $ - $ - $ - $ - $ - $ C5007750.689740 - OLYMPIC WELLFIELD RESTORATION - $ - $ - $ - $ - $ - $ C5007760.689000 - GROUNDWATER RESILIENCY WELL - $ - $ - $ - $ - $ - $ C5007760.689740 - GROUNDWATER RESILIENCY WELL - $ - $ - $ - $ - $ - $ C5007940.689000 - ROOFTOP FALL PROTECTION AND AC - $ - $ - $ - $ - $ - $ C5008010.689520 - CITYWIDE MUNICIPAL DRINKING WA - $ - $ - $ - $ - $ - $ C5008040.689000 - CONSTRUCTION MGMT SOFTWARE 10,000 $ 10,300 $ 10,609 $ 10,927 $ 16,883 $ - $ C5008050.689000 - GREEN SAND MEDIA REPLACEMENT - $ - $ 530,450 $ - $ - $ - $ C5008060.689000 - OLYMPIC WELLS EQUIPPING - $ - $ - $ - $ - $ - $ C5008060.689520 - WATER DEMAND MITIGATION FEE - $ - $ - $ - $ - $ - $ C5008060.689740 - OLYMPIC WELLS EQUIPPING - $ - $ - $ - $ - $ - $ C5008080.689000 - SM GROUNDWATER BASIN SUSTAINAB - $ - $ - $ - $ - $ - $ C5008200.689740 - AMI SMART WATER METERS - $ - $ - $ - $ - $ - $ C5008530.689000 - ARCADIA PLANT FENCING 606,000 $ 1,030,000 $ - $ - $ - $ - $ C5008540.689000 - ELECTRICAL-ARCADIA & CHARNOCK 1,000,000 $ 1,030,000 $ - $ - $ - $ - $ C5008550.689000 - GREEN SAND FILTER SCAFFOLDING 1,000,000 $ 1,030,000 $ - $ - $ - $ - $ C5008560.689000 - GROUNDWATER WELL SM11I (100% Fund $ - - $ - $ - $ - $ - $ C5008570.689000 - GROUNDWATER WELL SM12I 1,332,787 $ - $ 5,941,040 $ - $ - $ - $ C5008580.689000 - GROUNDWATER PLAN SUST IMPL. 150,000 $ 154,500 $ 159,135 $ 163,909 $ 225,102 $ - $ C5008590.689000 - INFRASTRUCTURE CONDITION/ASSET - $ - $ - $ - $ - $ - $ C5008600.689000 - WATER & WASTEWATER MASTER PLAN - $ - $ - $ 1,092,727 $ - $ - $ C5008780.689000 - Roof and HVAC AWTP 700,000 $ - $ - $ - $ - $ - $ C5009790.689000 - Water TI City Yards 300,000 $ 772,500 $ - $ - $ - $ - $ I5000010.689000 - FLEETVEHICLEREPLACEMENTPROG 632,400 $ 672,281 $ 694,943 $ 727,483 $ 786,773 $ - $ I5000020.689000 - TELECOMMUNICATIONSSERVICES 59,501 $ 63,120 $ 66,960 $ 71,033 $ 76,822 $ - $ I5000030.689000 - COMPUTEREQUIPMENTREPLACPROG 68,169 $ 82,888 $ 91,417 $ 100,876 $ 109,098 $ - $ NEW CIP - Airport Wells 2 & 3, Civil Work & Pipeline to Arcadia $ - - $ - $ - $ - $ - $ New CIP - Olympic Wellfield Management (Professional Service$ - - $ - $ - $ - $ - $ NEW CIP - Retrofit Vault (Booster Pump Arcadia) - $ - $ - $ - $ - $ - $ NEW CIP - SWIP $11M shortage (shifted all to Wastewater) - $ - $ - $ - $ - $ - $ New CIP - AMI Smart Water Meters (split 50/50 with wastewat $ - - $ - $ - $ - $ - $ C5009050.689000 - GROUNDWATER WELL IMPROVEMENTS - $ 721,000 $ 1,060,900 $ 3,824,545 $ - $ 6,376,007 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 20 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan Expenditures
New CIP - Charnock 18 Replacement - $ - $ - $ - $ - $ - $ New CIP - Reservoir Improvements (Mt. Olivette, San Vincente $ - - $ - $ - $ - $ - $ New CIP - Bond Funded Projects (refer to Revenue Bond Tab) ( $ - - $ - $ - $ - $ - $ C5009040.689000 - ARCADIA OPS BUILDING REPLACEME 1,000,000 $ 824,000 $ - $ 9,834,543 $ 10,129,579 $ - $ New CIP - Nonpotable Water Main Expansion - $ - $ - $ - $ - $ - $ C5009020.689000 - ONE WATER PLAN - $ - $ - $ - $ - $ - $ Salt Nutrient Management Plan /CIPIDEA0001259 100,000 $ 51,500 $ - $ - $ - $ - $ Network Upgrades /CIPIDEA0001261 - $ - $ - $ - $ - $ - $ C5009070.689410 - OLYMPIC AWTF REMEDIATION 899,640 $ 945,162 $ 992,986 $ 1,043,232 $ 1,128,255 $ - $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 21 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 15 : CAPITAL IMPROVEMENT PROGRAM COSTS (IN FUTURE-YEAR DOLLARS) Project Description 1 2025 2026 2027 2028 2029 2030
Future CIP Costs - - - - - 28,405,198 0 - - - - - - CIPS Funded through Pay-Go or WIFIA Loan (note the amounts - - - - - - 0 - - - - - - C5007620.689000 - RESERVOIR IMPROVEMENTS - - - - - - 0 - 12,370,464 - - - - 0 - - - 22,946,658 - -
0 - - - - - 29,977,507 0 - - - - - - Arcadia WTP Improvements - - - - - - 0 - - 5,304,500 5,463,635 - - 0 - - - 10,662,922 - -
- 2,060,000 6,365,400 10,927,270 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0 - - - - - - 0 - - - - - -
- - - - - -
0 - - - - - - 0 - - - - - - 0 - - - - - - 0 - - - - - - 0 - - - - - - 0 - - - - - - 0 - - - - - - Future CIP Costs 2 - - - - - - Reduction in CIP - - - - - -
Total: CIP Program Costs (Current-Year Dollars) $ 22,139,778 16,679,530 $ 29,216,447 $ 32,993,481 $ 29,944,605 $ 28,405,198 $ Total: CIP Loan Funded Program Costs (Current-Year Dollars) $ 14,430,464 - $ 11,669,900 $ 50,000,485 $ - $ 29,977,507 $ Total: CIP All Program Costs (Current-Year Dollars) $ 36,570,242 16,679,530 $ 40,886,347 $ 82,993,966 $ 29,944,605 $ 64,758,712 $ 00000000
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 22 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 16 : FORECASTING ASSUMPTIONS Economic Variables 2 2025 2026 2027 2028 2029 2030
0.00% 3.00% 3.00% 3.00% 3.00% 3.00%
Cumulative Construction Cost Multiplier from 2025 1.03 1.00 1.06 1.09 1.13 1.16
1. FY 2018/19 - 2028/29 given from City and assumed for future years. Source file: Item 17-FYE2019_CIP_Budget.pdf, Pages 147-148 in Water Fund 50 and 50(25)Fund Forecast - Water (May 2019) - Final-5-15-19.xlsx, "Capital (CIP)" tab. Updates made to CIP on 04.30.2019 per source file: Santa Monica Water Rate Model (20190430).xlsx
2. Construction inflator is based on the most current 10 year average of the Engineering News-Record Construction Cost Index. Source: www.enr.com/economics Annual Construction Cost Inflation, Per Engineering News Record Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 23 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 3
WATER RATE STUDYDebt ServiceTABLE 17 : INTERFUND LOAN DEBT OBLIGATIONS Budget
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Interfund Loan (City Yards Master Plan, Injection Well & Non-potable Water Main Expansion)1 Principal Payment $ 706,367 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ Subtotal: Annual Debt Service 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ Coverage Requirement ($-Amnt above annual payment) 100% 100% 100% 100% 100% 100%Reserve Requirement (total fund balance) $ 706,367 706,367 $ 706,367 $ 706,367 $ 706,367 $ 706,367 $ Water Revenue Bonds (Series 2021) Principal Payment $ 1,495,000 1,435,000 $ 1,555,000 $ 1,625,000 $ 1,685,000 $ 1,750,000 $ Interest Payment 2,059,587 2,118,187 1,998,587 1,926,863 1,865,175 1,800,362 Subtotal: Annual Debt Service 3,553,187 $ 3,554,587 $ 3,553,587 $ 3,551,863 $ 3,550,175 $ 3,550,362 $ Coverage Requirement ($-Amnt above annual payment) 100% 100% 100% 100% 100% 100%Reserve Requirement (total fund balance) $ 3,554,587 3,554,587 $ 3,553,587 $ 3,551,863 $ 3,550,175 $ - $ TABLE 18 : SUMMARY OF INTERFUND LOAN DEBT OBLIGATIONSExisting Annual Debt Service $ 4,260,954 4,259,554 $ 4,259,954 $ 4,258,229 $ 4,256,542 $ 4,256,729 $ Existing Annual Coverage Requirement 100% 100% 100% 100% 100% 100% Existing Debt Reserve Target $ 4,260,954 4,260,954 $ 4,259,954 $ 4,258,229 $ 4,256,542 $ 706,367 $ Annual Repayment Schedules Projected
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 3 (Debt), 24 of 52
5/28/2025
CITY OF SANTA MONICA EXHIBIT 3
WATER RATE STUDYDebt ServiceFUTURE DEBT FINANCING ASSUMPTIONS Long-Term Debt Terms Private Debt SRF/WIFIA Loan
Issuance Cost 2.00% 2.00%Annual Interest Cost (%) 5.00% 4.00% *Project operational before repayment starts Term 30 30 Start Year 3 of the Rate PeriodDebt Reserve Funded? No NoCoverage Requirement (% above annual pmt) 125% 120% FUTURE DEBT OBLIGATIONSAnnual Repayment Schedules 2025 2026 2027 2028 2029 2030SRF/WIFIA Loan Repayment Schedule Principal Payment $ - - $ - $ - $ 2,578,024 $ 2,681,145 $ Interest Payment - - - - 5,783,532 5,680,411
Subtotal: Annual Debt Service $ - - $ - $ - $ 8,361,556 $ 8,361,556 $ Principal Payment 2 $ - - $ - $ - $ - $ - $
Interest Payment 2 - - - - - -
Subtotal: Annual Debt Service $ - - $ - $ - $ - $ - $
Grand Total: Future Annual Debt Service $ - - $ - $ - $ 8,361,556 $ 8,361,556 $ Grand Total: New Annual Coverage Requirement $ - - $ - $ - $ 10,033,867 $ 10,033,867 $ Grand Total: Future Debt Reserve Target $ - - $ - $ - $ - $ - $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 3 (Debt), 25 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYCurrent Rate ScheduleTABLE 19 : CURRENT WATER RATE SCHEDULECurrent Water Rate Schedule FY 2019/20
Overall Increase in Rate Revenue 20.00%
Bi-Monthly Fixed Service ChargesSingle Family Residential 3/4 inch $11.101 inch $11.101.5 inch $15.642 inch $21.10 All Other Customers
3/4 inch $13.42
1 inch $13.421.5 inch $20.292 inch $28.543 inch $50.534 inch $75.276 inch $143.988 inch $391.36 Fire Service Charges
1.5 inch $42.612 inch $64.253 inch $132.764 inch $258.986 inch $583.528 inch $1,016.2510 inch $1,521.10 Commodity Charges
All Customers ($/hcf)
Tier 1 $3.78Tier 2 $4.39Tier 3 $6.25
Water Rate Schedule
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 4 (Current Rates), 26 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service AnalysisTABLE 20 : CLASSIFICATION OF EXPENSES FY 2025/26 COM GW PW CONSV CAP CA FP COM GW PW CONSV CAP CA FP Water Fund, 50Salaries and Benefits
Permanent Employees $ 1,187,089 6,247,838 $ 312,392 $ 312,392 $ 937,176 $ 3,123,919 $ 312,392 $ 62,478 $ 19.0% 5.0% 5.0% 15.0% 50.0% 5.0% 1.0% Vacation Lump Sum Pays $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Council/Board Allowance $ 525 2,623 $ 105 $ 131 $ 393 $ 1,312 $ 131 $ 26 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Standby Pay $ 5,735 28,676 $ 1,147 $ 1,434 $ 4,301 $ 14,338 $ 1,434 $ 287 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Overtime $ 34,263 171,315 $ 6,853 $ 8,566 $ 25,697 $ 85,658 $ 8,566 $ 1,713 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Temporary Employees $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Medicare Employer Contribution $ 17,398 86,990 $ 3,480 $ 4,350 $ 13,049 $ 43,495 $ 4,350 $ 870 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Workers' Comp Insurance $ 41,512 207,561 $ 8,302 $ 10,378 $ 31,134 $ 103,781 $ 10,378 $ 2,076 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Medical - Misc. Employee $ 237,665 1,188,327 $ 47,533 $ 59,416 $ 178,249 $ 594,163 $ 59,416 $ 11,883 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Medical Trust - Misc. Employee $ 23,830 119,148 $ 4,766 $ 5,957 $ 17,872 $ 59,574 $ 5,957 $ 1,191 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%Dental $ 12,614 63,071 $ 2,523 $ 3,154 $ 9,461 $ 31,536 $ 3,154 $ 631 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%Vision $ 1,513 7,563 $ 303 $ 378 $ 1,134 $ 3,781 $ 378 $ 76 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%Employee Health Contribution $ (19,013) (95,066) $ (3,803) $ (4,753) $ (14,260) $ (47,533) $ (4,753) $ (951) $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Retirement - Misc. Employee $ 398,612 1,993,060 $ 79,722 $ 99,653 $ 298,959 $ 996,530 $ 99,653 $ 19,931 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%Retirement - As Needed $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%Uniform/Tool Allowance $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Unemployment $ 5,730 28,651 $ 1,146 $ 1,433 $ 4,298 $ 14,325 $ 1,433 $ 287 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% EAP $ 203 1,017 $ 41 $ 51 $ 153 $ 509 $ 51 $ 10 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%DCAP $ 371 1,855 $ 74 $ 93 $ 278 $ 928 $ 93 $ 19 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Life Insurance and AD&D $ 1,870 9,348 $ 374 $ 467 $ 1,402 $ 4,674 $ 467 $ 93 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Disability Insurance $ 7,901 39,507 $ 1,580 $ 1,975 $ 5,926 $ 19,753 $ 1,975 $ 395 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% EBB Budget Request: Add 1 FTE Water Quality Superviso $ 46,469 232,344 $ 9,294 $ 11,617 $ 34,852 $ 116,172 $ 11,617 $ 2,323 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% EBB Budget Request: Add 1 FTE AMI Supervisor $ 42,360 211,798 $ 8,472 $ 10,590 $ 31,770 $ 105,899 $ 10,590 $ 2,118 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% EBB Budget Request: Add 1 FTE Water Conservation Coo $ 41,617 208,085 $ 8,323 $ 10,404 $ 31,213 $ 104,043 $ 10,404 $ 2,081 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% EBB Budget Request: Add 1 FTE SCADA Supervisor (50/5 $ 22,147 110,737 $ 4,429 $ 5,537 $ 16,611 $ 55,369 $ 5,537 $ 1,107 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Equity Adjustment for ALL POSITIONS (10%) $ 201,729 1,008,645 $ 40,346 $ 50,432 $ 151,297 $ 504,323 $ 50,432 $ 10,086 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% Salaries and Benefits - SUBTOTAL $ 2,312,140 11,873,093 $ 537,402 $ 593,655 $ 1,780,964 $ 5,936,546 $ 593,655 $ 118,731 $ 19.5% 4.5% 5.0% 15.0% 50.0% 5.0% 1.0% Fire Protection Basis of Classification Budget Categories Total Revenue Reqt. Base Commodity Groundwater Capacity Customer Purchased Water Conservation Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 27 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service AnalysisTABLE 21 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 COM GW PW CONSV CAP CA FP COM GW PW CONSV CAP CA FP Water Fund, 50Supplies and Expenses
50500001.521000 - ADVERTISING $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.521810 - VEHICLES - FUELS / LUBRICATION $ 5,634 28,170 $ 1,127 $ 1,409 $ 4,226 $ 14,085 $ 1,409 $ 282 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.521820 - CNG/LNG FUEL $ 19,328 96,638 $ 3,866 $ 4,832 $ 14,496 $ 48,319 $ 4,832 $ 966 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.523330 - UTILITIES BILLING SERVICES $ - 351,913 $ - $ - $ - $ - $ 351,913 $ - $ 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0%50500001.523340 - PROPERTY TAXES $ 19,768 98,838 $ 3,954 $ 4,942 $ 14,826 $ 49,419 $ 4,942 $ 988 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.523370 - METERED POSTAGE $ 5,381 26,904 $ 1,076 $ 1,345 $ 4,036 $ 13,452 $ 1,345 $ 269 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.523420 - INDIRECT COST ALLOCATION $ 436,272 2,181,360 $ 87,254 $ 109,068 $ 327,204 $ 1,090,680 $ 109,068 $ 21,814 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.524000 - MEMBERSHIPS AND DUES $ 2,825 14,127 $ 565 $ 706 $ 2,119 $ 7,064 $ 706 $ 141 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.524700 - RENT $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.524702 - OTHER OPERATING RENTS $ 48,085 240,423 $ 9,617 $ 12,021 $ 36,063 $ 120,212 $ 12,021 $ 2,404 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.524710 - REIMBURSE ENGINEERING OFFICE $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.525000 - OFFICE SUPPLIES AND EXPENSES $ 3,369 16,843 $ 674 $ 842 $ 2,526 $ 8,422 $ 842 $ 168 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.525001 - DISCOUNTS AVAILABLE $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.525002 - DISCOUNTS LOST $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.525080 - SPECIAL DEPARTMENT SUPPLIES $ 277,605 1,388,024 $ 55,521 $ 69,401 $ 208,204 $ 694,012 $ 69,401 $ 13,880 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.525190 - RIDESHARE AND PARKING PROGRAM $ 1,918 9,588 $ 384 $ 479 $ 1,438 $ 4,794 $ 479 $ 96 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.525200 - UNIFORM / PROTECTIVE CLOTHING $ 8,911 44,554 $ 1,782 $ 2,228 $ 6,683 $ 22,277 $ 2,228 $ 446 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.525320 - UNIFORM RENTAL $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.528000 - UTIL - LIGHT / POWER $ 214,228 1,071,141 $ 42,846 $ 53,557 $ 160,671 $ 535,570 $ 53,557 $ 10,711 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.528010 - UTILITIES - NATURAL GAS $ 649 3,244 $ 130 $ 162 $ 487 $ 1,622 $ 162 $ 32 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.528020 - UTILITIES - WATER $ 1,200 6,000 $ 240 $ 300 $ 900 $ 3,000 $ 300 $ 60 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.528030 - WATER PURCHASES $ - 5,727,788 $ - $ 5,727,788 $ - $ - $ - $ - $ 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 0.0%50500001.528040 - UTILITIES - TELEPHONE $ 20,647 103,235 $ 4,129 $ 5,162 $ 15,485 $ 51,618 $ 5,162 $ 1,032 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.529040 - VEHICLE MGMT FUND-MAINTENANC $ 62,991 314,954 $ 12,598 $ 15,748 $ 47,243 $ 157,477 $ 15,748 $ 3,150 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.529230 - COMPUTER EQUIP/SOFTWARE MAIN $ 32,600 163,001 $ 6,520 $ 8,150 $ 24,450 $ 81,501 $ 8,150 $ 1,630 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.529540 - CSB WATER PRODUCTION-O&M $ (20,808) 104,040 $ 104,040 $ 5,202 $ 15,606 $ - $ - $ - $ -20.0% 100.0% 5.0% 15.0% 0.0% 0.0% 0.0%50500001.531010 - CONFERENCES/MEETINGS/TRAVEL $ 3,099 15,495 $ 620 $ 775 $ 2,324 $ 7,747 $ 775 $ 155 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.531011 - FOOD PURCHASES $ 449 2,247 $ 90 $ 112 $ 337 $ 1,124 $ 112 $ 22 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.531020 - TRAINING COSTS $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.531030 - TRAINING $ 5,320 26,599 $ 1,064 $ 1,330 $ 3,990 $ 13,299 $ 1,330 $ 266 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.534000 - BANK FEES $ 1,113 5,564 $ 223 $ 278 $ 835 $ 2,782 $ 278 $ 56 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0%50500001.534550 - GENERAL LIABILITY / AUTO $ 88,969 444,844 $ 17,794 $ 22,242 $ 66,727 $ 222,422 $ 22,242 $ 4,448 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.534570 - PROPERTY INSURANCE $ 127,935 639,674 $ 25,587 $ 31,984 $ 95,951 $ 319,837 $ 31,984 $ 6,397 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.535000 - INTEREST EXPENSE $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0%50500001.535010 - INTEREST EXPENDITURE - BONDS $ 411,916 2,059,579 $ 82,383 $ - $ 411,916 $ 1,029,789 $ 102,979 $ 20,596 $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0%50500001.536030 - WASTE DISPOSAL (BRINING) $ 174,787 728,280 $ 182,070 $ - $ 145,656 $ 182,070 $ 36,414 $ 7,283 $ 24.0% 25.0% 0.0% 20.0% 25.0% 5.0% 1.0%50500001.536050 - REGULATORY AGENCY FEES $ 24,308 121,538 $ 4,862 $ 6,077 $ 18,231 $ 60,769 $ 6,077 $ 1,215 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.536550 - LEGAL EXPENSE $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.536551 - LEGAL EXPENSE CONFIDENTIAL $ - - $ - $ - $ - $ - $ - $ - $ 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 0.0%50500001.537000 - SCADA O & M $ 12,685 63,427 $ 2,537 $ 3,171 $ 9,514 $ 31,713 $ 3,171 $ 634 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.537030 - TRANSFER STATION FEE $ 228 1,139 $ 46 $ 57 $ 171 $ 570 $ 57 $ 11 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.550010 - CONTRACTUAL SERVICES $ 189,219 946,094 $ 37,844 $ 47,305 $ 141,914 $ 473,047 $ 47,305 $ 9,461 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.550200 - EMPLOYEE MEDICAL EXAMS $ 1,641 8,205 $ 328 $ 410 $ 1,231 $ 4,102 $ 410 $ 82 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.552010 - PROFESSIONAL SERVICES $ 125,904 629,522 $ 25,181 $ 31,476 $ 94,428 $ 314,761 $ 31,476 $ 6,295 $ 20.0% 4.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500001.552015 - PROF SVCS - WATER CONSERVATION $ - 93,636 $ - $ - $ 93,636 $ - $ - $ - $ 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%50500001.553150 - EOC - SUPPLIES AND EXPENSES $ - - $ - $ - $ - $ - $ - $ - $ 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 0.0% 50500001.555750 - WATER CONSERVATION REBATES $ - - $ - $ - $ - $ - $ - $ - $ 25.0% 4.0% 0.0% 15.0% 50.0% 5.0% 1.0% 50500001.555751 - LAUNDROMAT REBATES $ - - $ - $ - $ - $ - $ - $ - $ 25.0% 4.0% 0.0% 15.0% 50.0% 5.0% 1.0% 50500001.555752 - LANDSCAPE REBATES $ 62,500 250,000 $ 10,000 $ - $ 37,500 $ 125,000 $ 12,500 $ 2,500 $ 25.0% 4.0% 0.0% 15.0% 50.0% 5.0% 1.0% Conservation Fire Protection Basis of Classification Customer Budget Categories Total Revenue Reqt. Base Commodity Groundwater Capacity MWD Purchased Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 28 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service Analysis
50500001.555753 - LANDSCAPE CONSULTANT $ - - $ - $ - $ - $ - $ - $ - $ 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0%50500001.555754 - DIRECT INSTALL PROGRAM $ - - $ - $ - $ - $ - $ - $ - $ 25.0% 4.0% 0.0% 15.0% 50.0% 5.0% 1.0%50500001.555755 - MWD WTR CONSERV REBATES $ - 38,947 $ - $ - $ 38,947 $ - $ - $ - $ 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%50500001.555756 - SMMUSD PROGRAM $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0%50500001.555780 - WATER DEMAND MITIGATION REBAT $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% 50500001.555790 - BAYSAVER - INDOOR PLUMBING $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% 50500001.555800 - UNRESERVED-PRIVATE OUTDOOR PL $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% 50500001.575020 - FURNITURE & FURNISHINGS $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% 50500001.575030 - COMPUTER EQUIPMENT $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% 50500001.575090 - MISCELLANEOUS EQUIPMENT $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% x25671.566380 - DEBRIS REMOVAL $ - - $ - $ - $ - $ - $ - $ - $ 20.0% 4.0% 0.0% 20.0% 50.0% 5.0% 1.0% Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 29 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service AnalysisTABLE 22 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 COM GW PW CONSV CAP CA FP COM GW PW CONSV CAP CA FP Water Fund, 50Supplies and Expenses, cont.
50500002.525080 - SPECIAL DEPARTMENT SUPPLIES $ 9,884 52,020 $ 2,601 $ - $ 10,404 $ 26,010 $ 2,601 $ 520 $ 19.0% 5.0% 0.0% 20.0% 50.0% 5.0% 1.0%50500002.525081 - CHEMICALS (Charnock) $ 43,333 88,434 $ 44,217 $ - $ - $ - $ - $ 884 $ 49.0% 50.0% 0.0% 0.0% 0.0% 0.0% 1.0%50500002.525084 - FILTER MEDIA REPLACEMENT $ 168,527 581,127 $ 29,056 $ - $ - $ 348,676 $ 29,056 $ 5,811 $ 29.0% 5.0% 0.0% 0.0% 60.0% 5.0% 1.0%50500002.527501 - FIELD EQUIP & TOOLS $ - - $ - $ - $ - $ - $ - $ - $ 29.0% 5.0% 0.0% 0.0% 60.0% 5.0% 1.0%50500002.527502 - ANALYTICAL INSTR CONSUMABLES $ - - $ - $ - $ - $ - $ - $ - $ 0.0% 100.0% 0.0% 0.0% 0.0% 0.0% 0.0%50500002.528000 - UTIL - LIGHT / POWER $ 439,433 1,292,449 $ 129,245 $ - $ - $ 646,225 $ 64,622 $ 12,924 $ 34.0% 10.0% 0.0% 0.0% 50.0% 5.0% 1.0%50500002.536030 - WASTE DISPOSAL (BRINING) $ 30,583 69,507 $ 34,753 $ - $ - $ - $ 3,475 $ 695 $ 44.0% 50.0% 0.0% 0.0% 0.0% 5.0% 1.0%50500002.536050 - REGULATORY AGENCY FEES $ - 11,395 $ - $ - $ - $ 11,395 $ - $ - $ 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%50500002.550010 - CONTRACTUAL SERVICES $ 44,181 883,612 $ - $ - $ - $ 830,595 $ - $ 8,836 $ 5.0% 0.0% 0.0% 0.0% 94.0% 0.0% 1.0%50500002.552010 - PROFESSIONAL SERVICES $ - - $ - $ - $ - $ - $ - $ - $ 5.0% 0.0% 0.0% 0.0% 94.0% 0.0% 1.0% 50500003.525080 - SPECIAL DEPARTMENT SUPPLIES $ - 33,383 $ - $ - $ 33,383 $ - $ - $ - $ 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% 50500003.525081 - CHEMICALS (Arcadia WTP) $ 228,963 467,271 $ 233,636 $ - $ - $ - $ - $ 4,673 $ 49.0% 50.0% 0.0% 0.0% 0.0% 0.0% 1.0%50500003.525082 - MEMBRANE REPLACEMENT $ - - $ - $ - $ - $ - $ - $ - $ 49.0% 25.0% 0.0% 25.0% 0.0% 0.0% 1.0%50500003.525083 - CARTRIDGE FILTER REPLACEMENT $ - - $ - $ - $ - $ - $ - $ - $ 49.0% 50.0% 0.0% 0.0% 0.0% 0.0% 1.0%50500003.525084 - FILTER MEDIA REPLACEMENT $ - - $ - $ - $ - $ - $ - $ - $ 29.0% 5.0% 0.0% 0.0% 60.0% 5.0% 1.0% 50500003.528000 - UTIL - LIGHT / POWER $ 110,144 579,707 $ 28,985 $ 28,985 $ 86,956 $ 289,853 $ 28,985 $ 5,797 $ 19.0% 5.0% 5.0% 15.0% 50.0% 5.0% 1.0% 50500003.536030 - WASTE DISPOSAL (BRINING) $ 19,300 80,415 $ 20,104 $ - $ 16,083 $ 20,104 $ 4,021 $ 804 $ 24.0% 25.0% 0.0% 20.0% 25.0% 5.0% 1.0%50500003.550010 - CONTRACTUAL SERVICES $ - 255,933 $ - $ - $ - $ 240,577 $ 12,797 $ 2,559 $ 0.0% 0.0% 0.0% 0.0% 94.0% 5.0% 1.0% 50500003.552010 - PROFESSIONAL SERVICES $ - - $ - $ - $ - $ - $ - $ - $ 5.0% 0.0% 0.0% 0.0% 94.0% 0.0% 1.0% Supplies and Expenses - SUBTOTAL $ 3,465,019 22,460,824 $ 1,249,546 $ 6,197,545 $ 2,196,794 $ 8,105,989 $ 1,084,934 $ 160,997 $ 15.4% 5.6% 27.6% 9.8% 36.1% 4.8% 0.7% Groundwater Conservation Fire Protection Basis of Classification MWD Budget Categories Purchased Total Revenue Requirements Base Commodity Capacity Customer Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 30 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service AnalysisTABLE 23 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 COM GW PW CONSV CAP CA FP COM GW PW CONSV CAP CA FP Water Fund, 50Retirement and OPEB
50800004.51100C - MOU CONTINGENCY - - - - - - - - 0.0% 0.0% 0.0% 0.0% 94.0% 5.0% 1.0%50800004.513003 - RETIREMENT - MISC. EMPL - - - - - - - - 0.0% 0.0% 0.0% 0.0% 94.0% 5.0% 1.0%50800004.514001 - OPEB PAYMENT ARC - 94,260 - - - 88,604 4,713 943 0.0% 0.0% 0.0% 0.0% 94.0% 5.0% 1.0%50800004.514002 - REIMBURSEMENT FROM OPEB TRUST - (42,632) - - - (40,074) (2,132) (426) 0.0% 0.0% 0.0% 0.0% 94.0% 5.0% 1.0% Retirement and OPEB - SUBTOTAL $ - 51,627 $ - $ - $ - $ 48,530 $ 2,581 $ 516 $ 0.0% 0.0% 0.0% 0.0% 94.0% 5.0% 1.0% Conservation MWD Purchased Fire Protection Basis of Classification Total Revenue Requirements Base Commodity Capacity Customer Budget Categories Groundwater Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 31 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service AnalysisTABLE 24 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 COM GW PW CONSV CAP CA FP COM GW PW CONSV CAP CA FP Water Fund, 50Environmental Reimbursement $ - 968,597 $ - $ - $ - $ 968,597 $ - $ - $ 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% MWD Recycled Water Rebate $ - 10,167 $ - $ - $ 10,167 $ - $ - $ - $ 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%Reimbursement General Fund SCADA $ - 97,354 $ - $ - $ - $ 96,380 $ - $ 974 $ 0.0% 0.0% 0.0% 0.0% 99.0% 0.0% 1.0% Transfer Out - Engineering Reimb. $ 137,456 274,912 $ - $ - $ - $ 137,456 $ - $ - $ 50.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0% Transfer Out - Water/Wastewater Reimbursment $ 161,474 322,947 $ - $ - $ - $ 161,474 $ - $ - $ 50.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0%Transfer Out - GIS Analyst for PW $ - 29,384 $ - $ - $ - $ 29,090 $ - $ 294 $ 0.0% 0.0% 0.0% 0.0% 99.0% 0.0% 1.0% Transfer Out - Admin Analysis Reimb $ 1,849 3,698 $ - $ - $ - $ 1,849 $ - $ - $ 50.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0% Transfer Out - WTR Res Prot Spec Xfer $ 39,640 79,279 $ - $ - $ - $ 39,640 $ - $ - $ 50.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0%Transfer Out - ADA Coord Reimb $ - 79,279 $ - $ - $ - $ 77,694 $ - $ 1,586 $ 0.0% 0.0% 0.0% 0.0% 98.0% 0.0% 2.0% Transfer-In Water/Wastewater Transfer $ - (312,774) $ - $ - $ (312,774) $ - $ - $ - $ 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% Transfer-In from General Fund - Low Income Disc. $ - (96,000) $ - $ - $ - $ (95,040) $ - $ (960) $ 0.0% 0.0% 0.0% 0.0% 99.0% 0.0% 1.0% Interfund Transactions - SUBTOTAL $ 340,418 1,456,843 $ - $ - $ (302,607) $ 1,417,138 $ - $ 1,893 $ 23.4% 0.0% 0.0% -20.8% 97.3% 0.0% 0.1% Total Operating Expenses $ 6,117,577 35,842,387 $ 1,786,948 $ 6,791,199 $ 3,675,152 $ 15,508,204 $ 1,681,170 $ 282,137 $ 17.1% 5.0% 18.9% 10.3% 43.3% 4.7% 0.8% Groundwater Conservation MWD Purchased Fire Protection Basis of Classification Budget Categories Total Revenue Requirements Base Commodity Capacity Customer Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 32 of 52
5/28/2025
CITY OF SANTA MONICA Function and Classification
WATER RATE STUDYCost of Service AnalysisTABLE 25 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 COM GW PW CONSV CAP CA FP COM GW PW CONSV CAP CA FP Debt Service PaymentsDebt Service (Interfund Loan Repayment) $ - 706,367 $ - $ - $ - $ 706,367 $ - $ - $ 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% New Debt Service - - - - - - - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Total Debt Service Payments $ - 706,367 $ - $ - $ - $ 706,367 $ - $ - $ 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% Capital ExpendituresRate Funded Capital Expenses $ 6,517,756 13,438,671 $ - $ - $ - $ 6,719,336 $ - $ 201,580 $ 48.5% 0.0% 0.0% 0.0% 50.0% 0.0% 1.5%TOTAL REVENUE REQUIREMENTS $ 12,635,333 49,987,425 $ 1,786,948 $ 6,791,199 $ 3,675,152 $ 22,933,906 $ 1,681,170 $ 483,717 $ 25.3% 3.6% 13.6% 7.4% 45.9% 3.4% 1.0%Less: Non-Rate Revenues Water Fund, 50
Water - Commercial SalesWater - Meter Services/Install $ - (750,000) $ - $ - $ - $ (750,000) $ - $ - $ 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Reimbursement from other funds - (463,500) - - - (463,500) - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Damage Repair Work - (17,000) - - - - (17,000) - 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% Water Capital Facilities FeeWater Demand Mitigation FeeAdmin Fee Water Neutrality - (219,161) - - (219,161) - - - 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% In Lieu Fee Water Neutrality - (1,020,000) - - (1,020,000) - - - 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% Plan Check Fee Water Neutrality - (109,581) - - (109,581) - - - 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%Inspection Fee Water Neutrality - (6,120) - - (6,120) - - - 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%Internal Dep./Investment - (221,468) - - - (221,468) - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Unrealized Gain (Loss) - - - - - - - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Accrued Investment Income - - - - - - - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%MWD SoCal Water smart Rebate - - - - - - - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Other Revenues - Misc - (15,000) - - - (15,000) - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% Alt Fuel Tax Credit - - - - - - - - 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% Water - Misc Non-Operating - (365,000) - - - (365,000) - - 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%Baysaver Fees - (150,000) - - (150,000) - - - 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%NET REVENUE REQUIREMENTS $ 12,635,333 46,650,595 $ 1,786,948 $ 6,791,199 $ 2,170,290 $ 21,118,938 $ 1,664,170 $ 483,717 $ Allocation of Revenue Requirements 100.0% 27.1% 3.8% 14.6% 4.7% 45.3% 3.6% 1.0% TABLE 26 : ADJUSTMENTS TO CLASSIFICATION OF EXPENSES
Adjustment for Current Rate Level Total COM GW PW CONSV CAP CA FPFY 2025/26 Target Rate Rev. After Rate Increases 49,880,743 $ Projected Rate Revenue at Current Rates 41,567,286 $ FY 2025/26 Projected Rate Increases 20%Adjusted Net Revenue Req'ts 49,880,743 $ 13,510,220 $ 1,910,679 $ 7,261,431 $ 2,320,563 $ 22,581,241 $ 1,779,399 $ 517,211 $ Percent of Revenue 100.0% 27.1% 3.8% 14.6% 4.7% 45.3% 3.6% 1.0% Groundwater Conservation MWD Purchased Fire Protection Basis of Classification Budget Categories Total Revenue Requirements Base Commodity Capacity Customer Prepared by NBSwww.nbsgov.com | 800.676.7516
Funct. & Classification, 33 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service AnalysisTABLE 27 : SINGLE FAMILY RESIDENTIAL METER CHARACTERISTICS Average
Bi-Monthly
Con./Acct (hcf)
Peak
Bi-Monthly
Con./Acct (hcf)
FY 2023/24 FY 2023/24
3/4 inch 3,105 17.2 20 1.151 inch 3,285 27.8 34 1.221.5 inch 1,117 45.7 57 1.252 inch 73 67.4 101 1.50Total 7,580 26.5 32 1.21
1. Consumption and Meters from source file: Customer Data 23 24 TABLE 28 : MULTI-FAMILY RESIDENTIAL METER CHARACTERISTICS Average
Bi-Monthly
Con./Acct (hcf)
Peak
Bi-Monthly
Con./Acct (hcf)
Average
Bi-Monthly
Con./Unit (hcf)
Peak
Bi-Monthly
Con./Unit (hcf)
FY 2023/24 FY 2023/24 FY 2023/24 FY 2023/24
3/4 inch 1,699 3,216 13 14 6.9 7.4 1.07
1 inch 1,825 5,706 22 23 6.9 7.2 1.05
1.5 inch 2,380 18,462 56 61 7.2 7.9 1.09
2 inch 496 9,070 133 148 7.3 8.1 1.113 inch 61 2,753 311 334 6.9 7.4 1.07 4 inch 31 2,791 487 594 5.4 6.6 1.22
6 inch 13 2,716 1,026 1,245 4.9 6.0 1.21
8 inch 2 422 1,376 1,668 6.5 7.9 1.21
Total 6,507 45,136 48 44 6.9 7.6 1.10
1. Consumption and Meters from source file: Customer Data 23 24 Peaking
Factor
Number of Units
Meter Size Number of Meters Peaking
Factor
Meter Size Number of Meters
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Allocation Factors, 34 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service AnalysisTABLE 29 : WATER USAGE BY CUSTOMER CLASS Customer Class
Consumption, Actual
(hcf)
FY2023/24
Consumption,
Projected
(hcf)
FY2025/26
FY 2023/24
Percent of
Total Volume,
Actual
FY 2025/26
Percent of
Total Volume,
Projected Conservation
Factor
Single Family 1,205,301 1,145,036 26.1% 26.1% 27% 0.95Multi Family 1,867,992 1,774,592 40.4% 40.4% 37%Commercial 1,356,790 1,288,951 29.4% 29.4% 29%Municipal 128,057 121,654 2.8% 2.8% 3%Irrigation 64,322 61,106 1.4% 1.4% 4%Total 4,622,086 4,390,523 100.0% 100.0%Recycled Water 5,285 5,285 0.1% 0.1%
1. Consumption and Meters from source file: Customer Data 23 24 TABLE 30 : PEAK BI-MONTHLY WATER USAGE
Customer Class
Peak Bi-Monthly
Use FY2023/24
(hcf)
Average BiMonthly Use
FY2023/24
(hcf)
Bi-Monthly
Peaking
Factor
FY 2023/24
Bi-Monthly Max
Capacity Factor
Single Family 243,441 201,383 1.21 27.0%Multi Family 333,610 312,168 1.07 37.0%Commercial 259,773 226,775 1.15 28.8%Municipal 31,368 21,782 1.44 3.5%Irrigation 32,844 12,322 2.67 3.6%Total 901,230 774,370 1.16 100.0%Recycled Water 7,950 1,458 5.45 82.4%
1. Based on bi-monthly billing data (peak day data not available).
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Allocation Factors, 35 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service AnalysisTABLE 31 : NUMBER OF METERS BY CUSTOMER CLASS Customer Class Number of Meters Percent of Total
Single Family 7,580 41.2%Multi Family 6,507 35.4%Commercial 2,160 11.7%Municipal 191 1.0% Irrigation 662 3.6%
Fire 1,297 7.1%
Total 18,397 100.0%Recycled Water 29 0.2%
1. Consumption and Meters from source file: Customer Data 23 24 Prepared by NBSwww.nbsgov.com | 800.676.7516
Allocation Factors, 36 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service Analysis/Rate DesignTABLE 32 : METER EQUIVALENCY FACTORS 3/4 inch 30 1.00 30 1.00
1 inch 50 1.00 50 1.00
1.5 inch 100 2.00 100 2.00
2 inch 160 3.20 160 3.203 inch 320 6.40 350 7.004 inch 500 10.00 700 14.006 inch 1,000 20.00 1,600 32.008 inch 2,800 56.00 2,800 56.00 10 inch 4,200 84.00 4,200 84.00
1. Meter flow rates are from AWWA M-1 (Seventh Edition) Table B-2.2. Fire Service meter flow rates are from AWWA M-6 Table 5-3.
Displacement Meters Displacement Meters
Compound Class I Meters Fire Service Type I & II
Turbine Class II Meters Turbine Class I Meters
Meter Size Meter
Capacity (gpm)
Equivalency
to 1-inch
Meter Capacity
(gpm)
Equivalency to 1-
inch
Standard Meters Fire Service Meters
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Proposed Fixed Charges, 37 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service Analysis/Rate DesignTABLE 33 : ALLOCATION OF WATER REVENUE REQUIREMENTS Variable Costs
Base Commodity $ 13,510,220 27.1%Groundwater 1,910,679 3.8% MWD Purchased Water 7,261,431 14.6%
Conservation 2,320,563 4.7%
Fixed Costs
Capacity 22,581,241 $ 45.3%
Customer 1,779,399 3.6%
Fire Protection 517,211 1.0%
Net Revenue Requirement 49,880,743 $ 100%
TABLE 34 : ALLOCATION OF NET REVENUE REQUIREMENTS
Single Family 6,099,653 $ 733,154 $ - $ 3,523,059 $ 498,248 $ 1,893,563 $ 605,133 $ 13,352,810 $ 26.8% Multi Family 8,358,944 $ 629,372 $ - 5,460,085 $ 772,191 $ 2,934,669 $ 937,844 $ 19,093,104 $ 38.3% Commercial 6,508,877 $ 208,920 $ - 3,965,858 $ 560,870 $ 2,131,557 $ 681,190 $ 14,057,273 $ 28.2% Municipal 785,954 $ 18,474 $ - 374,306 $ 52,936 $ 201,181 $ 64,292 $ 1,497,144 $ 3.0%Irrigation 822,929 $ 64,030 $ - 188,012 $ 26,590 $ 101,052 $ 32,294 $ 1,234,907 $ 2.5%Fire 4,883 $ 125,449 $ 517,211 (1,101) $ (156) $ (592) $ (189) $ 645,505 $ 1.3%Total Net Revenue Requirement 22,581,241 $ 1,779,399 $ 517,211 $ 13,510,220 $ 1,910,679 $ 7,261,431 $ 2,320,563 $ 49,880,743 $ 100% Groundwater MWD Purchased
Water
% of COS Net
Revenue
Req'ts Conservation
Classification Components (Variable Costs)
Cost of Service
Net Rev. Req'ts Customer Classes
Customer Classes
Base
Commodity Fire Protection
Classification Components (Fixed Costs)
Capacity Customer
Cost of Service Net Revenue
Requirements (FY 25/26)
Proposed Rates
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Proposed Fixed Charges, 38 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service Analysis/Rate DesignTABLE 35 : SUMMARY OF FIXED REVENUE REQUIREMENTS C.O.S.
Rev. Req't
% of C.O.S.
Rev. Req't.
% Fixed
Revenue
% Variable
Revenue
Revenue from
Volumetric
Charges
Revenue from
Hydraulic Capacity
Charges
Revenue from
Customer Costs
Single Family 13,352,810 $ 26.8% 19% 81% $ 1,803,879 10,815,776 $ 733,154 $ Multi Family $ 38.3% 19,093,104 19% 81% $ 2,998,318 15,465,414 $ 629,372 $ Commercial $ 28.2% 14,057,273 19% 81% $ 2,461,962 11,386,391 $ 208,920 $ Municipal $ 3.0% 1,497,144 19% 81% $ 265,983 1,212,687 $ 18,474 $ Irrigation $ 2.5% 1,234,907 19% 81% $ 170,602 1,000,275 $ 64,030 $ Fire $ 1.3% 645,505 100% 0% $ 520,056 - $ 125,449 $
Total 49,880,743 $ 100% 20.0% 80.0% 39,880,543 $ 8,220,802 $ 1,779,399 $ TABLE 36 : CALCULATION OF SINGLE FAMILY BI-MONTHLY FIXED METER SERVICE CHARGESProposed Fixed Charges Number of Meters by
Class and Size 3/4 inch 1 inch 1.5 inch 2 inch Total
Single Family 3,105 3,285 1,117 73 7,710
Total Meters/Accounts 3,105 3,285 1,117 73 7,580Hydraulic Capacity Factor 1.00 1.00 2.00 3.20 Total Equivalent Meters 3,105 3,285 2,234 234 8,858
Bi-Monthly Fixed Service Charges
Customer Costs ($/Acct/bi-month) $16.12 $16.12 $16.12 $16.12Capacity Costs ($/Acct/bi-month) $33.94 $33.94 $67.88 $108.62 Total Bi-Monthly Meter Charge $50.06 $50.06 $84.00 $124.74Annual Fixed Costs Allocated to Bi-Monthly Meter Charges Customer Costs $ 733,154 Capacity Costs 1,803,879
Total Fixed Meter Costs $ 2,537,034
Annual Revenue from Bi-Monthly Meter Charges
Customer Charges $ 317,733 300,323 $ 108,039 $ 7,061 $ $ 733,154 Capacity Charges 669,001 632,343 454,961 47,573 1,803,879 Total Revenue 932,666 $ 986,734 $ 563,000 $ 54,634 $ 2,537,034 $ Customer Class
Proposed Rates
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Proposed Fixed Charges, 39 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service Analysis/Rate DesignTABLE 37 : CALCULATION OF BI-MONTHLY FIXED METER SERVICE CHARGESProposed Fixed Charges Number of Meters by
Class and Size 3/4 inch 1 inch 1.5 inch 2 inch 3 inch 4 inch 6 inch 8 inch Total Multi Family 1,699 1,825 2,380 496 61 31 13 2 6,507
Commercial 580 492 542 349 117 54 22 4 2,160
Municipal 30 9 28 69 36 15 4 - 191
Irrigation 214 200 148 87 8 4 1 - 662
Total Meters/Accounts 2,523 2,526 3,098 1,001 222 104 40 6 9,520 Hydraulic Capacity Factor 1.00 1.00 2.00 3.20 6.40 10.00 20.00 56.00 Total Equivalent Meters 2,523 2,526 6,196 3,203 1,421 1,040 800 336 18,045 Bi-Monthly Fixed Service Charges
Customer Costs ($/Acct/bi-month) $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 $16.12Capacity Costs ($/Acct/bi-month) $54.46 $54.46 $108.93 $174.29 $348.57 $544.64 $1,089.29 $3,050.01 Total Bi-Monthly Meter Charge $70.58 $70.58 $125.05 $190.41 $364.69 $560.76 $1,105.41 $3,066.13Annual Fixed Costs Allocated to Bi-Monthly Meter Charges Customer Costs $ 920,796 Capacity Costs 5,896,866
Total Fixed Meter Costs $ 6,817,661
Annual Revenue from Bi-Monthly Meter Charges
Customer Charges $ 244,320 244,030 $ 299,645 $ 96,819 $ 21,472 $ 10,059 $ 3,869 $ 580 $ $ 920,796 Capacity Charges 825,463 824,483 2,024,770 1,046,763 464,299 339,858 261,429 109,800 5,896,866 Total Revenue 1,068,513 $ 1,069,784 $ 2,324,416 $ 1,143,582 $ 485,771 $ 349,917 $ 265,298 $ 110,381 $ 6,817,661 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Proposed Fixed Charges, 40 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Cost of Service Analysis/Rate DesignTABLE 38 : CALCULATION OF BI-MONTHLY FIRE METER SERVICE CHARGESProposed Fixed Charges Number of Meters by
Class and Size 1.5 Inch 2 Inch 3 Inch 4 Inch 6 Inch 8 Inch 10 Inch Total Fire 1,270 15 8 4 - - - 1,297
Total Meters/Accounts 1,270 15 8 4 - - - 1,297
Hydraulic Capacity Factor 2.00 3.20 7.00 14.00 32.00 56.00 84.00 Total Equivalent Meters 2,540 48 56 56 - - - 2,700
Bi-Monthly Fixed Service Charges
Customer Costs ($/Acct/bi-month) $16.12 $16.12 $16.12 $16.12 $16.12 $16.12 $16.12Capacity Costs ($/Acct/bi-month) $64.20 $102.73 $224.72 $449.43 $1,027.27 $1,797.73 $2,696.59 Total Bi-Monthly Meter Charge $80.32 $118.85 $240.84 $465.55 $1,043.39 $1,813.85 $2,712.71Annual Fixed Costs Allocated to Bi-Monthly Meter Charges Customer Costs $ 125,449 Capacity & Fire Protection Costs 520,056 Total Fixed Meter Costs $ 645,505
Annual Revenue from Bi-Monthly Meter Charges
Customer Charges $ 1,451 122,837 $ 774 $ 387 $ - $ - $ - $ $ 125,449 Capacity Charges 9,245 489,238 10,786 10,786 - - - 520,056 Total Revenue 612,075 $ 10,696 $ 11,560 $ 11,173 $ - $ - $ - $ 645,505 $
1. Consumption and Meters from source file: Customer Data 23 242. Meter flow rates & hydraulic capacity ratio are from AWWA M-1 (Seventh Edition) Table B-2.
3. Customer costs are allocated to each customer by dividing the total customer costs by the total number of customers.4. Capacity costs are allocated by meter size and the hydraulic capacity of the meter.
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Proposed Fixed Charges, 41 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYCustomer DataWater Supply DataTABLE 39 : SUMMARY OF WATER SUPPLY RECORDS Fiscal Year SM Water (MG)
MWD
Purchased
Water (MG)
% MWD
Purchased
SM Water
(hcf) MWD Purchased Water (hcf) Total Supply (hcf) SM Supply Purchased Water FY 2021/22 1,711 1,731 49.7% 2,313,609 2,287,408 4,601,017 50% 50%FY 2022/23 2,948 446 86.9% 596,215 3,940,234 4,536,449 13% 87% FY 2023/24 2,758 751 78.6% 1,003,406 3,686,909 4,690,316 21% 79% TABLE 40 : SUMMARY OF WATER SUPPLY COSTS
Total Cost
Treated /
Delivered
Local Resource Credit Readiness To Serve Charge Capacity Charge Conservation Debit / Credit Misc. Debit / Credit FY 2021/22 2,848 8,743 $ 3,709,521 $ (5,820) 2,618,428 $ 953,981 $ 249,700 $ (106,767) $ - $ 30% 70% FY 2022/23 3,651 11,209 $ 4,517,630 $ (12,075) 3,438,014 $ 816,955 $ 214,515 $ 60,222 $ (0) $ 24% 76%FY 2023/24 4,155 12,755 $ 4,889,873 $ (14,670) 4,041,328 $ 705,657 $ 156,920 $ 637 $ (0) $ 18% 82% FY 2024-25* 1,599 4,907 $ 1,625,431 $ (3,975) 1,410,343 $ 341,407 $ 66,120 $ 15,300 $ - $ 26% 87% Source file: Well and Demand Report.
* Data is for July 2024 - December 2024 only.
Fiscal Year % Fixed % Variable Total Volume (HCF)
Total Volume
Treated /
Delivered
(AF)
Total Invoice
Cost
Variable Fixed
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Proposed Volume Charges-3 Tiers
CITY OF SANTA MONICA
WATER RATE STUDYCustomer DataWater Supply DataTABLE 41 : TOTAL CAPACITY BY CUSTOMER CLASS Customer Class and Meter Size Equivalency to 1-inch # of Meters # of 1-inch Equivalent Meters
% of
Equivalent
Meters
Tier 1 Breakpoint 1 Tier 2 Breakpoint 2 Tier 3 Breakpoint 3 Single Family
All Customers 1.00 3,105 3,105 11% 0 - 10 hcf 11 - 18 hcf 19+ hcf Subtotal: Single Family 7,580 8,858 31%
Multi Family
All Customers 1.00 1,699 1,699 6% 0 - 7 hcf 8 - 13 hcf 14+ hcf Subtotal: Multi Family 6,507 10,944 38%
Non-Residential
3/4 inch 1.00 2,094 2,094 7% 0 - 10 hcf 11 - 18 hcf 19+ hcf 1 inch 1.00 716 716 3% 0 - 10 hcf 11 - 18 hcf 19+ hcf1.5 inch 2.00 718 1,436 5% 0 - 20 hcf 21 - 36 hcf 37+ hcf2 inch 3.20 513 1,642 6% 0 - 32 hcf 33 - 58 hcf 59+ hcf3 inch 6.40 161 1,030 4% 0 - 64 hcf 65 - 115 hcf 116+ hcf4 inch 10.00 77 770 3% 0 - 100 hcf 101 - 180 hcf 181+ hcf6 inch 20.00 26 520 2% 0 - 200 hcf 201 - 360 hcf 361+ hcf8 inch 84.00 5 420 1% 0 - 560 hcf 561 - 1,008 hcf 1,513+ hcf Subtotal: Non-Residential 4,310 8,628 30%
Total 28,429 18,397 100%
1. Tier 1 breakpoint set to assumed indoor consumption for a typical SFR customer using 47 gallons per capita per day (GPCD) with 2.56 people per SFR,
1.78 people per MFR and allocated to non-residential based on 47 GPCD and equivalent meters. Tier breakpoints for non-residential start at the SFR equivalent and are scaled based on meter size.
2. Tier 2 breakpoint set to volume of Santa Monica groundwater source minus the Tier 1 usage for each customer class.3. Tier 3 water is set to include all purchased water from MWD.
Per Unit
Per Meter
Per Unit
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Proposed Volume Charges-3 Tiers
CITY OF SANTA MONICA
WATER RATE STUDYCustomer DataWater Supply DataTABLE 42 : SUMMARY OF WATER CONSUMPTION BY TIER (NEW BREAKPOINTS) Tier 1 Tier 2 Tier 3 Total Tier 1 Tier 2 Tier 3
Residential:
Single Family 446,564 314,885 383,587 1,145,036 0 - 10 11 - 18 19 + Multi Family 692,091 488,013 594,488 1,774,592 0 - 7 / unit 8 - 13 /unit 14 + / unit Non-Residential: 573,967 404,721 493,023 1,471,711 Varies Varies Varies Total 1,712,622 1,207,618 1,471,099 4,391,340% of Total 28% 39% 34% 100%
1. Tier 1 breakpoint set to assumed indoor consumption for a typical SFR customer using 47 gallons per capita per day (GPCD) with 2.56 people per SFR,
1.78 people per MFR and allocated to non-residential based on 47 GPCD and equivalent meters. Tier breakpoints for non-residential start at the SFR equivalent and are scaled based on meter size.
2. Tier 2 breakpoint set to volume of Santa Monica groundwater source minus the Tier 1 usage for each customer class.3. Tier 3 water is set to include all purchased water from MWD.
Customer Class and Meter Size
Estimated Water Consumption by Tier Proposed Tier Breakpoints Prepared by NBSwww.nbsgov.com | 800.676.7516
Proposed Volume Charges-3 Tiers
CITY OF SANTA MONICA
WATER RATE STUDYCustomer DataWater Supply DataTABLE 43 : DEVELOPMENT OF TIERED VOLUMETRIC RATES Proposed Fixed Charges
Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 1,712,622 1,207,618 1,471,099 4,391,340 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 5,268,986 3,715,310 $ 4,525,924 $ 13,510,220 $ Ground Water 1,433,009 477,670 - 1,910,679 Groundwater l local supply costs allocated to Tier 1 and 2 costs Purchased Water - - 7,261,431 7,261,431 Purchased Water allocated to Tier 3 only Conservation 1,160,282 - 1,160,282 2,320,563 Recovered from Tier 2 and Tier 3 Water Self-Sufficiency Projects - - 373,033 373,033 Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 3,988,770 5,656,800 4,859,047 14,504,617 $ Split between all Tiers based on % of Total Consumption Total $ 13,519,077 8,181,750 $ 18,179,716 $ 39,880,543 $ % of Variable Revenue 21% 34% 46% 100%
Cost Per Unit of Water $6.78 $7.89 $12.36
Base commodity costs should be collected for each unit of water sold based on % of Total Consumption Calculation of Cost Per Tier Total Basis for Allocation Prepared by NBSwww.nbsgov.com | 800.676.7516
Proposed Volume Charges-3 Tiers
CITY OF SANTA MONICA
WATER RATE STUDY
Water Cost of Service Analysis/Rate DesignTABLE 44 : PROPOSED RATES FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Bi-Monthly Fixed Service ChargesSingle Family Residential 3/4 inch $19.40 $50.06 $58.07 $63.30 $69.00 $73.141 inch $19.40 $50.06 $58.07 $63.30 $69.00 $73.141.5 inch $27.35 $84.00 $97.45 $106.22 $115.78 $122.722 inch $36.89 $124.74 $144.69 $157.72 $171.91 $182.22 All Other Customers
3/4 inch $23.46 $70.58 $81.88 $89.25 $97.28 $103.12
1 inch $23.46 $70.58 $81.88 $89.25 $97.28 $103.121.5 inch $35.48 $125.05 $145.06 $158.11 $172.34 $182.682 inch $49.89 $190.41 $220.87 $240.75 $262.42 $278.163 inch $88.33 $364.69 $423.04 $461.12 $502.62 $532.784 inch $131.58 $560.76 $650.49 $709.03 $772.84 $819.216 inch $251.71 $1,105.41 $1,282.27 $1,397.68 $1,523.47 $1,614.888 inch $684.18 $3,066.13 $3,556.71 $3,876.81 $4,225.73 $4,479.27 Fire Service Charges
1.5 inch $74.49 $80.32 $93.18 $101.56 $110.70 $117.35
2 inch $112.32 $118.85 $137.86 $150.27 $163.80 $173.623 inch $232.10 $240.84 $279.37 $304.51 $331.92 $351.834 inch $452.75 $465.55 $540.04 $588.64 $641.62 $680.126 inch $1,020.13 $1,043.39 $1,210.33 $1,319.27 $1,438.00 $1,524.288 inch $1,776.63 $1,813.85 $2,104.06 $2,293.43 $2,499.84 $2,649.8310 inch $2,659.22 $2,712.71 $3,146.74 $3,429.95 $3,738.64 $3,962.96 Commodity Charges
All Customers ($/hcf)
Tier 1 $6.61 $6.78 $7.86 $8.57 $9.34 $9.90Tier 2 $7.67 $7.89 $9.15 $9.98 $10.87 $11.53Tier 3 $10.93 $12.36 $14.34 $15.63 $17.03 $18.06* Tier Breakpoints shown in Table 41 Water Rate Schedule Current Rates Proposed Rates
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Proposed Rates-3 Tiers, 46 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Drought RatesTABLE 45 : EXPENSES DIRECTLY IMPACTED BY FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
AOP/UV Pollution Remediation Systems - O&M $ - $ - $ - $ - $ - Chemicals $ - $ - $ - $ - $ -
Contra-Charnock Pollution Expense $ - $ - $ - $ - $ -
Direct Install Program $ - $ - $ - $ - $ -
Environmental Reimbursement $ 968,597 $ 997,654 $ 1,027,584 $ 1,061,560 $ 1,087,038 SMMUSD Program $ - $ - $ - $ - $ - Utilities - Electricity $ - $ - $ - $ - $ - Waste Disposal (Brining) $ - $ - $ - $ - $ - Water Purchases $ - $ - $ - $ - $ - Adjusted Commodity Assigned Costs $ 997,654 968,597 $ 1,027,584 $ 1,061,560 $ 1,087,038 $
1. Costs change due to expected inflation.
TABLE 46 : YEAR 1 POTABLE NET REVENUE REQUIREMENTS BY FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Percentage of Conservation
Total
Consumption
(hcf)
Base Commodity
Cost
Impacted
Commodity Cost Savings Updated Commodity Cost
a b c d = (-a) * c e = b + c
0% 4,391,340 39,880,543 $ 968,597 $ - $ 39,880,543 $
10% 3,952,206 39,880,543 $ 968,597 $ (96,860) $ 39,783,683 $ 20% 3,513,072 39,880,543 $ 968,597 $ (193,719) $ 39,686,824 $ 30% 3,073,938 39,880,543 $ 968,597 $ (290,579) $ 39,589,964 $ 40% 2,634,804 39,880,543 $ 968,597 $ (387,439) $ 39,493,104 $ 50% 2,195,670 39,880,543 $ 968,597 $ (484,298) $ 39,396,245 $ ` 60% 1,756,536 39,880,543 $ 968,597 $ (581,158) $ 39,299,385 $ TABLE 47 : YEAR 1 POTABLE NET REVENUE REQUIREMENTS BY FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Drought Level Level of Conservation Tier 1 Rate Tier 2 Rate Tier 3 Rate No Level Baseline 1 $6.78 $7.89 $12.36
Level 1 10% $6.81 $9.17 $13.78Level 2 20% $7.65 $10.29 $15.46Level 3 30% $8.72 $11.73 $17.63Level 4 40% $10.15 $13.65 $20.52Level 5 50% $12.15 $16.35 $24.56Level 6 60% $15.15 $20.38 $30.62
1. Baseline level of consumption assumes 2023 consumption.
Expense Description Commodity Costs 1
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Drought Rates, 47 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Drought RatesTABLE 48 : LEVEL 1 - 10% FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 1,541,360 1,086,857 1,323,989 3,952,206 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 763,473 538,346 $ 655,803 $ 1,957,622 $ Ground Water 4,122,468 1,374,156 - 5,496,624 $ Groundwater allocated to Tier 1 and Tier 2 % of GroundwaterPurchased Water - - 6,891,119 6,891,119 $ Purchased Water allocated to Tier 3 only Conservation 1,457,209 - 1,457,209 2,914,417 $ Recovered from Tiers 2-3 base on % of Consumption Water Self-Sufficiency Projects - - 2,546,237 2,546,237 $ Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 7,257,858 5,117,721 6,234,314 18,609,893 $ Split between all Tiers based on % of Total Consumption Customer (Allocated to Variable Rate) 533,431 376,137 458,203 1,367,771 $ Split between all Tiers based on % of Total Consumption Total $ 14,134,438 7,406,360 $ 18,242,885 $ 39,783,683 $ % of Variable Revenue 19% 36% 46% 100%
Cost Per Unit of Water $6.814 $9.170 $13.779
91% 105% 100%
TABLE 49 : LEVEL 2 - 20% FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 1,370,098 966,095 1,176,879 3,513,072 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 761,614 537,035 $ 654,207 $ 1,952,856 $ Ground Water 4,112,431 1,370,810 - 5,483,242 $ Groundwater allocated to Tier 1 and Tier 2 % of GroundwaterPurchased Water - - 6,874,342 6,874,342 $ Purchased Water allocated to Tier 3 only Conservation 1,453,661 - 1,453,661 2,907,322 $ Recovered from Tiers 2-3 base on % of Consumption Water Self-Sufficiency Projects - - 2,540,037 2,540,037 $ Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 7,240,188 5,105,261 6,219,136 18,564,584 $ Split between all Tiers based on % of Total Consumption Customer (Allocated to Variable Rate) 532,132 375,221 457,088 1,364,441 $ Split between all Tiers based on % of Total Consumption Total $ 14,100,026 7,388,328 $ 18,198,470 $ 39,686,824 $ % of Variable Revenue 19% 36% 46% 100%
Cost Per Unit of Water $7.648 $10.291 $15.463
90% 104% 100%
Calculation of Cost Per Tier Total Basis for Allocation Base commodity costs should be collected for each unit of water sold based on Calculation of Cost Per Tier Total Basis for Allocation Base commodity costs should be collected for each unit of water sold based on Prepared by NBSwww.nbsgov.com | 800.676.7516
Drought Rates, 48 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Drought RatesTABLE 50 : LEVEL 3 - 30% FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 1,198,836 845,333 1,029,769 3,073,938 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 759,755 535,725 $ 652,610 $ 1,948,090 $ Ground Water 4,102,395 1,367,465 - 5,469,859 $ Groundwater allocated to Tier 1 and Tier 2 % of GroundwaterPurchased Water - - 6,857,564 6,857,564 $ Purchased Water allocated to Tier 3 only Conservation 1,450,113 - 1,450,113 2,900,226 $ Recovered from Tiers 2-3 base on % of Consumption Water Self-Sufficiency Projects - - 2,533,838 2,533,838 $ Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 7,222,517 5,092,801 6,203,957 18,519,276 $ Split between all Tiers based on % of Total Consumption Customer (Allocated to Variable Rate) 530,833 374,306 455,972 1,361,111 $ Split between all Tiers based on % of Total Consumption Total $ 14,065,613 7,370,296 $ 18,154,055 $ 39,589,964 $ % of Variable Revenue 19% 36% 46% 100%
Cost Per Unit of Water $8.719 $11.733 $17.629
90% 104% 100%
TABLE 51 : LEVEL 4 - 40% FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 1,027,573 724,571 882,659 2,634,804 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 757,896 534,414 $ 651,013 $ 1,943,323 $ Ground Water 4,092,358 1,364,119 - 5,456,477 $ Groundwater allocated to Tier 1 and Tier 2 % of GroundwaterPurchased Water - - 6,840,787 6,840,787 $ Purchased Water allocated to Tier 3 only Conservation 1,446,565 - 1,446,565 2,893,130 $ Recovered from Tiers 2-3 base on % of Consumption Water Self-Sufficiency Projects - - 2,527,639 2,527,639 $ Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 7,204,847 5,080,341 6,188,779 18,473,967 $ Split between all Tiers based on % of Total Consumption Customer (Allocated to Variable Rate) 529,535 373,390 454,857 1,357,781 $ Split between all Tiers based on % of Total Consumption Total $ 14,031,201 7,352,264 $ 18,109,640 $ 39,493,104 $ % of Variable Revenue 19% 36% 46% 100%
Cost Per Unit of Water $10.147 $13.655 $20.517
90% 104% 100%
Calculation of Cost Per Tier Total Basis for Allocation Base commodity costs should be collected for each unit of water sold based on Calculation of Cost Per Tier Total Basis for Allocation Base commodity costs should be collected for each unit of water sold based on Prepared by NBSwww.nbsgov.com | 800.676.7516
Drought Rates, 49 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Drought RatesTABLE 52 : LEVEL 5 - 50% FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 856,311 603,809 735,549 2,195,670 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 756,037 533,103 $ 649,417 $ 1,938,557 $ Ground Water 4,082,321 1,360,774 - 5,443,095 $ Groundwater allocated to Tier 1 and Tier 2 % of GroundwaterPurchased Water - - 6,824,009 6,824,009 $ Purchased Water allocated to Tier 3 only Conservation 1,443,017 - 1,443,017 2,886,035 $ Recovered from Tiers 2-3 base on % of Consumption Water Self-Sufficiency Projects - - 2,521,440 2,521,440 $ Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 7,187,177 5,067,881 6,173,600 18,428,658 $ Split between all Tiers based on % of Total Consumption Customer (Allocated to Variable Rate) 528,236 372,474 453,741 1,354,451 $ Split between all Tiers based on % of Total Consumption Total $ 13,996,788 7,334,232 $ 18,065,224 $ 39,396,245 $ % of Variable Revenue 19% 36% 46% 100%
Cost Per Unit of Water $12.147 $16.345 $24.560
90% 104% 99%
TABLE 53 : LEVEL 6 - 60% FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL Tier 1 Tier 2 Tier 3
GW - Basic
Water Use
Ground Water Purchased
Water
Sources of Supply (hcf) 685,049 483,047 588,440 1,756,536 % of Total Consumption 28% 39% 34% 100%% of Groundwater 41% 59% -- 100%% of Tier 2 and 3 Water -- 54% 46% 100%Costs Allocated to Volumetric Charges:
Tier 1 Tier 2 Tier 3 Total
Base Commodity $ 754,179 531,793 $ 647,820 $ 1,933,791 $ Ground Water 4,072,284 1,357,428 - 5,429,712 $ Groundwater allocated to Tier 1 and Tier 2 % of GroundwaterPurchased Water - - 6,807,232 6,807,232 $ Purchased Water allocated to Tier 3 only Conservation 1,439,470 - 1,439,470 2,878,939 $ Recovered from Tiers 2-3 base on % of Consumption Water Self-Sufficiency Projects - - 2,515,240 2,515,240 $ Water self sufficiency projects allocated based on Tier 3 Only Capacity (Allocated to Variable Rate) 7,169,506 5,055,421 6,158,422 18,383,349 $ Split between all Tiers based on % of Total Consumption Customer (Allocated to Variable Rate) 526,937 371,558 452,625 1,351,121 $ Split between all Tiers based on % of Total Consumption Total $ 13,962,376 7,316,200 $ 18,020,809 $ 39,299,385 $ % of Variable Revenue 19% 36% 46% 100%
Cost Per Unit of Water $15.146 $20.382 $30.625
89% 103% 99%
Calculation of Cost Per Tier Total Basis for Allocation Base commodity costs should be collected for each unit of water sold based on Calculation of Cost Per Tier Total Basis for Allocation Base commodity costs should be collected for each unit of water sold based on Prepared by NBSwww.nbsgov.com | 800.676.7516
Drought Rates, 50 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYWater Drought RatesTABLE 54 : PROPOSED DROUGHT RATES FOR FUTURE MANDATED WATER USE REDUCTION, IF DIRECTED BY COUNCIL FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
Commodity Charges ($/hcf)
10% Tier 1 $6.81 $7.90 $8.62 $9.39 $9.96
Tier 2 $9.17 $10.64 $11.59 $12.64 $13.40Tier 3 $13.78 $15.98 $17.42 $18.99 $20.13 20% Tier 1 $7.65 $8.87 $9.67 $10.54 $11.17
Tier 2 $10.29 $11.94 $13.01 $14.18 $15.03Tier 3 $15.46 $17.94 $19.55 $21.31 $22.59 30% Tier 1 $8.72 $10.11 $11.02 $12.02 $12.74
Tier 2 $11.73 $13.61 $14.83 $16.17 $17.14Tier 3 $17.63 $20.45 $22.29 $24.30 $25.75 40% Tier 1 $10.15 $11.77 $12.83 $13.98 $14.82
Tier 2 $13.65 $15.84 $17.26 $18.82 $19.95Tier 3 $20.52 $23.80 $25.94 $28.28 $29.97 50% Tier 1 $12.15 $14.09 $15.36 $16.74 $17.74
Tier 2 $16.35 $18.96 $20.67 $22.53 $23.88Tier 3 $24.56 $28.49 $31.05 $33.85 $35.88 60% Tier 1 $15.15 $17.57 $19.15 $20.87 $22.13
Tier 2 $20.38 $23.64 $25.77 $28.09 $29.78Tier 3 $30.62 $35.52 $38.72 $42.21 $44.74 Proposed Drought Rates
Mandated Level of
Conservation
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Proposed Drought Rates, 51 of 52
5/28/2025
CITY OF SANTA MONICA
WATER RATE STUDYRecycled Water Cost of Service Analysis/Rate DesignPreliminary Draft Subject to Material Revision, Do Not Cite or Distribute TABLE 55 - RECYCLED WATER SUMMARY ALLOCATION OF NET REVENUE REQUIREMENTS Recycled Water 120,834 $ 2,801 $ 30,060 $ 153,695 $ 0.3% Total Net Revenue Requirement 120,834 $ 2,801 $ 30,060 $ 153,695 $ 0.3% TABLE 56 : RECYCLED WATER TARGET REVENUE FOR 2025/26
Customer Class Meter Size
Number of
Accounts
(FY 2023/24)
Fixed
Revenue
(FY 2025/26)
FY 2023/24
Consumption (HCF)
Target Variable
Rate Revenue
(FY 2025/26)
Uniform
Commodity Rate
($/hcf)
Percent of
Potable Rate
1 1 inch 5 3,751 $ 1051.5 1.5 inch 4 4,570 2972 2 inch 13 28,446 1,2033 3 inch 3 10,094 7374 4 inch 5 33,162 3,428Total 30 80,023 $ 5,770 TABLE 56 : PROPOSED RECYCLED WATER RATES
FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
20.00% 16.00% 9.00% 9.00% 6.00%
Commodity Charges
All Customers ($/hcf)
Uniform Rate $3.49 $5.21 $6.04 $6.59 $7.18 $7.61
Cost of Service Net Rev. Req'ts
Recycled Water Rate Schedule Current Rates Proposed Rates Customer Classes
Classification Components
Capacity Customer Variable Costs
Overall Increase in Rate Revenue
$ 30,060 $5.21 77%
Cost of Service
Net Rev.
Requirements
% of COS Net
Revenue
Req'ts
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Recycled Water Rates, 52 of 52
Water and Sewer Rate Study – City of Santa Monica
Prepared by NBS – May 2025 37
Appendix B. Sewer Rate Study Tables and Figures
CITY OF SANTA MONICA Financial Plan & Reserve Summary
WASTEWATER RATE STUDYFinancial Plan and Reserve Projections 2 Alternative 2
1 Alternative 1 0.00% 4.00% 4.00% 4.00% 4.00% 4.00%
2 Alternative 2 0.00% 7.00% 7.00% 7.00% 6.00% 6.00%3 Alternative 3 0.00% 5.00% 5.00% 5.00% 5.00% 5.00% TABLE 1 : FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS Budget
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Sources of Wastewater Funds
Wastewater Fund, 51 $ 45,852,598
Rate Revenue:
Revenue Under Current Rates $ 20,786,940 20,700,000 $ 20,874,245 $ 20,961,917 $ 21,049,957 $ 21,138,367 $ Revenue from Rate Increases 2 1,455,086 - 3,024,678 4,717,333 6,284,372 7,957,714 Subtotal: Rate Revenue After Rate Increases 20,700,000 $ 22,242,026 $ 23,898,923 $ 25,679,250 $ 27,334,329 $ 29,096,081 $ Non-Rate Revenue:
Charges for Services $ 965,946 975,448 $ 956,365 $ 958,118 $ 959,907 $ 961,731 $ Fines and Forfeitures - - - - - -
Interest Income 704,928 860,000 509,720 457,276 476,331 449,151 Other Revenue 400,000 220,000 398,813 406,789 414,925 423,223 Subtotal: Non-Rate Revenue 2,055,448 $ 2,070,874 $ 1,864,898 $ 1,822,183 $ 1,851,162 $ 1,834,105 $ Total Sources of Funds $ 24,312,899 22,755,448 $ 25,763,821 $ 27,501,433 $ 29,185,491 $ 30,930,186 $ Uses of Wastewater Funds
Wastewater Fund, 51
Operating Expenses 3
Salaries and Benefits $ 4,288,826 3,484,644 $ 4,578,278 $ 4,748,523 $ 4,914,736 $ 5,144,873 $ Supplies and Expenses 17,963,599 16,922,501 18,413,185 18,870,710 19,331,984 19,806,515 Retirement and OPEB 18,877 17,978 19,821 20,812 21,852 22,945 Interfund Transactions (3,557,049) (2,544,547) (2,580,637) (2,617,467) (2,655,055) (2,690,034) Subtotal: Operating Expenses: $ 19,726,755 16,868,074 $ 20,430,647 $ 21,022,577 $ 21,613,517 $ 22,284,299 $ Other Expenditures
Existing Debt Service $ 2,948,946 2,948,946 $ 2,948,946 $ 2,948,946 $ 2,948,946 $ 2,948,946 $ New Debt Service - - - - - -
Rate-Funded Capital Expenses 14,113,500 5,221,192 - - 848,603 4,147,519 Subtotal: Other Expenditures 8,170,138 $ 17,062,445 $ 2,948,946 $ 2,948,946 $ 3,797,549 $ 7,096,464 $ Total Uses of Funds $ 36,789,201 25,038,212 $ 23,379,593 $ 23,971,522 $ 25,411,065 $ 29,380,763 $ Annual Surplus/(Deficit) (2,282,764) $ (12,476,301) $ 2,384,228 $ 3,529,910 $ 3,774,426 $ 1,549,423 $ Net Revenue Req't. (Total Uses less Non-Rate Revenue) $ 34,718,327 22,982,764 $ 21,514,695 $ 22,149,340 $ 23,559,903 $ 27,546,658 $ Projected Annual Rate Revenue Adjustment 0.00% 7.00% 7.00% 7.00% 6.00% 6.00%Cumulative Increase from Annual Revenue Increases 0.00% 7.00% 14.49% 22.50% 29.85% 37.65%Debt Coverage After Rate Increase (minimum 1.2 ratio) 1.56 2.00 1.81 2.20 2.57 2.93
1. Revenue and expenses for are from PW_51FundForecast-Wastewater Budget values are detailed in Exhibit 1 (O&M).
2. Revenue from rate increases assumes an implementation date of July 1, 2025 and then July 1 each year thereafter.3. The operating expenses are from the fund forecast. Inflationary factors are applied to these expenses to project costs in FY 2028/29 and beyond.4. Stormwater fund 52 contributes to the SWIP project.
RATE REVENUE REQUIREMENTS SUMMARY 1 Projected
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Financial Plan - Wastewater, 1 of 30
5/28/2025
CITY OF SANTA MONICA Financial Plan & Reserve Summary
WASTEWATER RATE STUDYFinancial Plan and Reserve ProjectionsTABLE 2 : RESERVE FUND SUMMARY Budget
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Total Beginning Cash 1 $ 45,852,598
Operating ReserveBeginning Reserve Balance $ 31,644,854 $ 4,931,689 29,362,090 $ 5,107,662 $ 5,255,644 $ 5,403,379 $ Plus: Net Cash Flow (After Rate Increases) (2,282,764) (12,476,301) 2,384,228 3,529,910 3,774,426 1,549,423 Plus: Transfer of Debt Reserve Surplus - - - - - -
Less: Transfer Out to Capital Replacement Reserve - (11,954,100) (2,208,255) (3,381,928) (3,626,691) (1,381,727) Ending Operating Reserve Balance $ 4,931,689 29,362,090 $ 5,107,662 $ 5,255,644 $ 5,403,379 $ 5,571,075 $ Target Ending Balance (90-days of O&M) 4,217,018 $ 4,931,689 $ 5,107,662 $ 5,255,644 $ 5,403,379 $ 5,571,075 $ Capital Rehabilitation & Replacement Reserve Beginning Reserve Balance $ 13,207,744 $ 17,557,700 5,603,600 $ 13,948,287 $ 14,636,063 $ 9,929,391 $ Plus: Transfer of Operating Reserve Surplus - 11,954,100 2,208,255 3,381,928 3,626,691 1,381,727 Less: Use of Reserves for Capital Projects (7,604,144) - (5,817,669) (2,694,151) (8,333,363) (3,470,991) Ending Capital Rehab & Replacement Reserve Balance $ 17,557,70 5,603,600 $ 13,948,287 0 $ 14,636,063 $ 9,929,391 $ 7,840,127 $ Target Capital R&R Balance (3% of Net Assets) 5,603,600 $ 5,921,300 $ 6,033,400 $ 6,141,500 $ 6,302,700 $ 6,458,400 $ Rate Stabilization FundBeginning Reserve Balance $ 1,000,000 $ 1,000,000 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ Less: Use of Reserves for Capital Projects - - - - - -
Ending Rate Stabilization Reserve Balance $ 1,000,00 1,000,000 $ 1,000,00 0 $ 1,000,00 0 $ 1,000,00 0 $ 1,000,00 0 $ 0 Target Rate Stabilization Balance ($1million) 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ Ending Balance $ 23,489,389 35,965,690 $ 20,055,948 $ 20,891,707 $ 16,332,770 $ 14,411,202 $ Minimum Target Ending Balance $ 11,852,989 10,820,618 $ 12,141,062 $ 12,397,144 $ 12,706,079 $ 13,029,475 $ Ending Surplus/(Deficit) Compared to Reserve Targets 25,145,072 $ 11,636,40 $ 7,914,887 0 $ 8,494,563 $ 3,626,691 $ 1,381,727 $
SUMMARY OF CASH ACTIVITYUN-RESTRICTED RESERVES
Projected
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Financial Plan - Wastewater, 2 of 30
5/28/2025
CITY OF SANTA MONICA Financial Plan & Reserve Summary
WASTEWATER RATE STUDYFinancial Plan and Reserve ProjectionsTABLE 3 : RESERVE FUND SUMMARY (continued) Restricted Reserves: FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Clean Water SRF ReserveBeginning Reserve Balance $ - - $ $ - - $ - $ - $ Plus: SRF Loan Funding Proceeds - - - - - -
Plus: Revenue Bond Proceeds - - - - - -
Less: Use of Bond & Loan Funds for CIP - - - - - -
Ending Bond Project Fund Balance $ - - $ - $ - $ - $ - $ Target Ending Balance $ - - $ - $ - $ - $ - $
Debt ReserveBeginning Reserve Balance $ - - $ $ - - $ - $ - $ Plus: Reserve Funding from New Debt Obligations - - - - - - Less: Transfer of Surplus to Operating Reserve - - - - - - Ending Debt Reserve Balance - $ - $ - $ - $ - $ - $
Target Ending Balance - $ - $ - $ - $ - $ - $
Connection and Capital Facility Fee ReserveBeginning Reserve Balance $ - $ - - $ - $ - $ - $ Plus: Connection and Capital Facility Fee Revenue 608,093 1,008,360 1,008,527 1,008,698 1,008,872 1,009,049 Interest Earnings - - - - - -
Less: Use of Reserves for Capital Projects (1,008,360) (608,093) (1,008,527) (1,008,698) (1,008,872) (1,009,049) Ending Connection Fee Fund Balance - $ - $ - $ - $ - $ - $ Annual Interest Earnings Rate 2 2.00% 1.96% 2.17% 2.28% 2.28% 2.75%
1. Total beginning cash and Reserve Targets for the Wastewater Fund as found in PW_51FundForecast-Wastewater2. City estimated interest earnings rate per LAIF Prepared by NBSwww.nbsgov.com | 800.676.7516
Financial Plan - Wastewater, 3 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYRate Adjustment Charts and Report TablesCHART 1 $0
$10,000,000$20,000,000$30,000,000$40,000,000
2026 2027 2028 2029 2030
Annual Obligations
Fiscal Year Ending June 30
Sewer Revenue Requirements vs.
Revenue Under Existing and Increased Rates
Cash Funded Capital ExpensesDebt ServiceO&M ExpensesRevenues under Existing RatesRevenues under Adjusted Rates Prepared by NBSwww.nbsgov.com | 800.676.7516
Charts and Tables, 4 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYRate Adjustment Charts and Report TablesCHART 2 $-
$5,000,000
$10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 2026 2027 2028 2029 2030
Fiscal Year Ending June 30
Un-Restricted Cash Balances vs. Recommended Reserve Targets Unrestricted Cash Balance60-Day Target Reserve Balance90-Day Target Reserve Balance Prepared by NBSwww.nbsgov.com | 800.676.7516
Charts and Tables, 5 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYRate Adjustment Charts and Report TablesCHART 3
7.0% 7.0% 7.0%
6.0% 6.0% 6.0% 6.0%
5%6%7%8%
2026 2027 2028 2029 2030 2031 2032
Fiscal Year Ending June 30
Projected Adjustments to Rate Revenue
Prepared by NBSwww.nbsgov.com | 800.676.7516
Charts and Tables, 6 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WASTEWATER RATE STUDYOperating Revenue and ExpensesTABLE 4 : OPERATING REVENUE FORECAST ActualDESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Wastewater Fund, 51
City of LA - Wastewater Repair 1 280,000 $ 280,000 $ 280,000 $ 280,000 $ 280,000 $ 280,000 $ Connection / Capacity Permit Fees 1 8,093 8,360 8,527 8,698 8,872 9,049 Wastewater Services Charges 1 20,700,000 20,874,245 20,786,940 20,961,917 21,049,957 21,138,367 Wastewater Capital Facility Fees 1 600,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Saddle Fees 1 83,200 85,946 87,665 89,418 91,207 93,031 Industrial Waste Fees 1 612,248 600,000 588,700 588,700 588,700 588,700 Charges for Services - SUBTOTAL - $ 22,283,541 $ 22,761,246 $ 22,839,137 $ 22,928,733 $ 23,018,735 $ 23,109,147 $ Admin Fines / Penalties 8- - - - - - -
Fines and Forfeitures - SUBTOTAL - $ - $ - $ - $ - $ - $ - $ Int. Dep. / Investment See FP 860,000 860,000 333,000 333,000 356,000 356,000 Unrealized Gain (Loss) 8- - - - - -
Accrued Investment Income 8- - - - - -
Int. Inc. - Loan 34 Fund (Stormwater) 8- - - - - -
Investment Income - SUBTOTAL - $ 860,000 $ 860,000 $ 333,000 $ 333,000 $ 356,000 $ 356,000 $ ASSFC Pass-Thru 8 220,000 400,000 398,813 406,789 414,925 423,223 Wastewater Misc. Non-Operating 8- - - - - -
Int. Wastewater Bond Proceeds 8- - - - - -
Alt. Fuel Tax Credit 8- - - - - -
Other - SUBTOTAL - $ 220,000 $ 400,000 $ 398,813 $ 406,789 $ 414,925 $ 423,223 $ TOTAL : Wastewater Fund, 51 - $ 23,363,541 $ 24,021,246 $ 23,570,950 $ 23,668,522 $ 23,789,660 $ 23,888,370 $ TABLE 5 : OPERATING REVENUE SUMMARYDESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Wastewater Fund, 51
Wastewater Rate Revenue - $ 20,700,000 $ 20,786,940 $ 20,874,245 $ 20,961,917 $ 21,049,957 $ 21,138,367 $ Charges for Services - 975,448 965,946 956,365 958,118 959,907 961,731 Connection and Capacity Fees - 608,093 1,008,360 1,008,527 1,008,698 1,008,872 1,009,049 Fines and Forfeitures - - - - - - -
Interest Income - 860,000 860,000 333,000 333,000 356,000 356,000 Other Revenue - 220,000 400,000 398,813 406,789 414,925 423,223 TOTAL : OPERATING REVENUE 1 $ 23,363,541 - $ 24,021,246 $ 23,570,950 $ 23,668,522 $ 23,789,660 $ 23,888,370 $
1. Revenue and expenses for are from PW_51FundForecast-Wastewater Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 7 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WASTEWATER RATE STUDYOperating Revenue and ExpensesTABLE 6 : OPERATING EXPENSE FORECASTDESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30Wastewater Fund, 51Salaries and Benefits Permanent Employees 3 2,256,311 $ 2,310,633 $ 2,356,846 $ 2,403,983 $ 2,452,062 $ 2,501,103 $ Year-End Cash Outs 4- - - - - -
Vacation Lump Sum Pays 4- - - - - -
Standby Pay 3 22,607 23,059 23,520 23,991 24,470 24,960 Overtime 3 44,430 45,319 46,225 47,150 48,093 49,055
Temporary Employees 3- - - - - -
Medicare - Misc. Employees 4 31,488 32,116 32,582 33,054 33,533 34,020 Workers' Comp Insurance 4 18,837 19,534 20,232 20,929 22,324 23,813 Medical - Misc. Employees 4 484,608 518,530 570,383 627,421 690,163 759,180 Med. Trust - Misc. Employees 4 47,542 48,488 49,458 50,447 51,456 52,485 Dental 4 27,104 27,588 28,085 28,590 29,105 29,629
Vision 4 3,146 3,168 3,200 3,232 3,264 3,297
Employee Health Contribution 4 (38,776) (41,489) (45,631) (50,194) (55,213) (60,734) Retirement - Misc. Employees 4 558,129 595,956 751,834 793,314 823,893 905,399 Retirement - As Needed 4- - - - - -
Unemployment 4 10,350 10,561 10,772 10,988 11,207 11,432 EAP 4 418 418 422 426 431 435
DCAP 4 770 770 770 770 770 770
Life Insurance and AD&D 4 3,541 3,649 3,722 3,796 3,872 3,950 Disability Insurance 4 14,139 14,419 14,852 15,297 15,756 16,229 EBB Budget Request: Add 1 FTE Water Chem 3 191,110 185,544 196,844 202,749 208,831 EBB Budget Request: Add 1 FTE SCADA Supervisor (50/50 Split with WW Fund) 114,059 110,737 117,481 121,005 124,635 Equity Adjustment for ALL POSITIONS (10%) 4 405,838 379,826 421,004 435,794 456,385 Placeholder 4- - - - - -
Salaries and Benefits - SUBTOTAL - $ 3,484,644 $ 4,288,826 $ 4,578,278 $ 4,748,523 $ 4,914,736 $ 5,144,873 $ Supplies and Expenses
Vehicles - Fuels / Lubrication 7 2,109 $ 2,320 $ 2,376 $ 2,433 $ 2,491 $ 2,551 $ CNG Fuel 7 28,311 42,467 43,486 44,530 45,599 46,693
Reimburse Water Fund 2 395,557 409,983 422,282 434,951 447,999 462,812 Utilities Billing Services 2 333,820 345,013 351,913 358,952 366,131 373,453 Metered Postage 2 10,000 10,200 10,404 10,612 10,824 11,041 Indirect Cost Allocation 2 750,324 773,584 800,659 828,683 857,686 887,705 Memberships and Dues 2 6,417 6,545 6,676 6,809 6,946 7,085 Rent 2- - - - - -
Other Operating Rent 2 231,087 235,709 240,423 245,232 250,136 255,139 Reimburse Engineering Office 2- - - - - -
Office Supplies / Expense 2 15,000 15,300 15,606 15,918 16,236 16,561 SPEC Department Supplies 2 157,194 160,338 163,545 166,816 170,152 173,555 CHEMICALS-SWIP 2 41,820 42,656 43,936 45,254 46,611 48,010 Rideshare and Parking Programs 2 2,611 2,663 2,716 2,771 2,826 2,883 Uniform / Protective Clothing 2 21,000 21,420 21,848 22,285 22,731 23,186 Utilities - Electricity 5 2,562 2,921 2,979 3,039 3,100 3,162 Utilities - Water 5 1,667 1,900 1,938 1,977 2,016 2,057 Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 8 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WASTEWATER RATE STUDYOperating Revenue and ExpensesTABLE 7 : OPERATING EXPENSE FORECASTDESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30Wastewater Fund, 51Supplies and Expenses, cont.
Utilities - Light/Power - SWIP 5 1,191,627 1,358,455 1,399,209 1,441,185 1,484,420 1,528,953 Utilities - Water - SWIP 5 1,368 1,560 1,607 1,655 1,705 1,756 Utilities - Telephone 5 19,845 20,242 20,647 21,060 21,481 21,911 Vehicle Management Fund - Maint. 2 191,151 201,962 206,809 211,773 216,855 222,060 Computer Eqt. / Software Maint. 2 80,000 78,613 80,500 82,432 84,410 86,436 Sewage Pump Plant Maint. 2 522,240 532,685 543,339 554,205 565,290 576,595 Storm Drain Maintenance 2 196,218 165,132 168,435 171,803 175,239 178,744 SMURRF Plant Maintenance 2 337,986 344,746 351,641 358,674 365,847 373,164 AWTF, Civic Lot O&M 2 437,154 445,897 454,815 463,911 473,189 482,653 Conferences / Meetings / Travel 2 16,044 16,365 16,692 17,026 17,367 17,714 Food Purchases 2 1,095 1,117 1,139 1,162 1,185 1,209
Training Costs 2- - - - - -
Training 2 20,000 20,400 20,808 21,224 21,649 22,082
Bank Fees 2 10,427 10,636 10,849 11,066 11,287 11,513
General Liability - Auto 2 696,434 1,333,331 1,294,496 1,373,331 1,414,531 1,456,967 Property Insurance 2 100,035 116,460 134,377 149,308 156,773 164,612 LA Sewage Disposal 2 7,011,430 7,151,659 7,294,692 7,440,586 7,589,398 7,741,186 ASSFC Pass-Thru 2 383,326 390,993 398,813 406,789 414,925 423,223 SCADA O&M 2 60,291 61,497 62,727 63,981 65,261 66,566
Transfer Station Fee 2 9,465 9,654 9,847 10,044 10,245 10,450 Fiscal Agent Fees 2 2,190 2,234 2,279 2,324 2,371 2,418 Contractual Services 2 310,000 275,400 280,908 286,526 292,257 298,102 Cont SVCS-SWIP 2 2,477,389 2,526,937 2,602,745 2,680,827 2,761,252 2,844,090 SWIP City 2 537,234 547,979 564,418 581,351 598,791 616,755 Employee Medical Exams 2 5,585 5,697 5,811 5,927 6,046 6,167 Professional Services 2 304,488 309,764 315,959 322,278 328,724 335,299 Supplies and Expenses - SUBTOTAL - $ 16,922,501 $ 17,963,599 $ 18,413,185 $ 18,870,710 $ 19,331,984 $ 19,806,515 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 9 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 1
WASTEWATER RATE STUDYOperating Revenue and ExpensesTABLE 8 : OPERATING EXPENSE FORECASTDESCRIPTION Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30Retirement and OPEB Retirement - Misc. Employees 4- - - - - -
OPEB Payment ARC 4 32,722 34,358 36,076 37,880 39,774 41,762 Reimbursement from OPEB Trust 4 (14,744) (15,481) (16,255) (17,068) (17,921) (18,817) OPEB Expense 4- - - - - -
Retirement and OPEB - SUBTOTAL 2 $ 17,978 - $ 18,877 $ 19,821 $ 20,812 $ 21,852 $ 22,945 $ Interfund Transactions
Environmental Reimbursement 8 450,437 470,193 484,299 498,828 513,793 530,781 Water/Wastewater Transfer 8 287,109 303,664 312,774 322,157 331,822 342,793 SCADA Reimbursement 8 91,119 94,518 97,354 100,274 103,282 106,697 Clean Beaches Transfer 8- - - - - -
Water/Wastewater Reimb 8 176,249 183,108 188,601 194,259 200,087 206,703 Transfer (Budget Only) 8- - - - - -
GIS Analyst for PW 8 43,527 28,528 29,384 30,265 31,173 32,204 Admin Analyst Reimb 8 1,271 1,316 1,355 1,396 1,438 1,486 ADA Coord Reimb 8 5,175 5,392 5,554 5,720 5,892 6,087
Debt Service City Yards Master Plan 8- - - - - -
ProRata Share Fleet Software 8- - - - - -
Transfer Out WW Fund for Potable Water Pu 8 500,000 - - - - - Trans WTR Low Income Disc 8 (41,000) (41,000) (41,000) (41,000) (41,000) (41,000) SMURRF O&M Costs 8 (288,778) (294,554) (300,445) (306,454) (312,583) (318,835) Stormwater/Wastewater Reimb 8 (1,344,851) (1,413,116) (1,441,378) (1,470,206) (1,499,610) (1,529,602) Com Equip Reimb 8- - - - - -
SWIP Operations 8 (1,043,000) (1,074,290) (1,106,519) (1,139,714) (1,173,906) (1,209,123) CLN BCH - WW SWIP LOAN REPAY 8 (1,950,000) (950,000) (731,336) (731,336) (731,336) (731,336) CLN BCH - WW SWIP LOAN REPAY MEMO 8 (370,430) 218,664 - - - - WTR RES PROT SPEC XFER 8 (73,877) (76,970) (79,279) (81,657) (84,107) (86,888) Interfund Transactions - SUBTOTAL 2 $ (3,557,049) - $ (2,544,547) $ (2,580,637) $ (2,617,467) $ (2,655,055) $ (2,690,034) $ $ 16,868,074 - $ 19,726,755 $ 20,430,647 $ 21,022,577 $ 21,613,517 $ 22,284,299 $ TABLE 9 : FORECASTING ASSUMPTIONSINFLATION FACTORS 3 Basis FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Customer Growth 4 1 -- -- 0.42% 0.42% 0.42% 0.42% 0.42% General Cost Inflation 2 -- -- 2.00% 2.00% 2.00% 2.00% 2.00%Salary Inflation 3 -- -- 4.00% 4.00% 4.00% 4.00% 4.00%Benefits Inflation 4 -- -- 6.00% 6.00% 6.00% 6.00% 6.00%Energy 5 -- -- 5.00% 5.00% 5.00% 5.00% 5.00%Chemicals 6 -- -- 3.00% 3.00% 3.00% 3.00% 3.00%Fuel 7 -- -- 3.00% 3.00% 3.00% 3.00% 3.00%No Escalation 8 -- -- 0.00% 0.00% 0.00% 0.00% 0.00%
1. Revenue and expenses for are from PW_51FundForecast-Wastewater2. Some revenues and expenditures found in source file: 3. Inflation factors based on industry standards.4. Customer growth is estimated at 0.42% per year per 2018 Sustainable Water Master Plan.
TOTAL : Wastewater Fund, 51
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 1 (O&M), 10 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WASTEWATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 10 : CAPITAL FUNDING SUMMARYCAPITAL FUNDING FORECAST Budget FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Grants $ - - $ - $ - $ - $ - $ City of LA Reimbursement 1,522,242 4,588,000 1,500,000Use of Capacity Fee Reserves 608,093 1,008,360 1,008,527 1,008,698 1,008,872 1,009,049 Use of New SRF Loan 1 - - - - - -
Use of New Revenue Bond Proceeds - - - - - -
Use of Stormwater Fund Reserves 2 1,473,716 1,439,176 1,509,085 1,545,303 1,582,391 1,620,368 Use of Capital R&R Reserve 7,604,144 - 5,817,669 2,694,151 8,333,363 3,470,991 Rate Revenue 5,221,192 14,113,500 - - 848,603 4,147,519 Total Sources of Capital Funds 14,872,605 $ 16,595,576 $ 9,857,523 $ 9,836,152 $ 11,773,229 $ 11,747,927 $ Uses of Capital Funds:
Total Project Costs $ 16,595,576 14,872,605 $ 9,857,523 $ 9,836,152 $ 11,773,229 $ 11,747,927 $ Capital Funding Surplus (Deficiency) - $ - $ - $ - $ - $ - $ Clean Water SRF Loan 1 $ - - $ - $ - $
New Revenue Bond Proceeds $ - - $ - $ - $ - $ - $ Stormwater Fund Transfers for projects 2 $ 1,473,716 1,439,176 $ 1,509,085 $ 1,545,303 $ 1,582,391 $ 1,620,368 $
1. Balance sheet transfer in from Clean Water State Revolving Fund. 2. Stormwater fund 52 contributes to the SWIP project.
Projected
Funding Sources
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 11 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WASTEWATER RATE STUDYCapital Improvement Plan ExpendituresCAPITAL IMPROVEMENT PROGRAMTABLE 11 : Capital Improvement Program Costs (in Current-Year Dollars)Project Description 1 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 C5104570.689000 - HYPERION CAPITAL PAYMENT $ 3,582,157 3,477,800 $ 3,689,622 $ 3,914,320 $ 3,914,320 $ 4,110,036 C5104600.689000 - ANNUAL STREET/PARK PARKING LOT 250,000 250,000 250,000 250,000 250,000 250,000 C5104860.689000 - WASTEWATER MAIN REPLACEMENT 6,082,157 3,477,800 4,689,622 3,914,320 3,914,320 4,110,036 C5104870.689000 - NON-POTABLE WATER MAIN EXPANS - - - - - C5104880.689000 - MOSS AVE PUMP STATION IMPROVEM 3,960,000 1,272,242 1,500,000 C5105010.689000 - WASTEWATERTENANTIMPROVEMENTC5105030.689000 - HANSEN8SOFTWAREUPGRADE - - - - C5105050.689000 - SCADASYSTEMSUPGRADES 82,000C5105330.689000 - UTILITYBILLINGSOFTWARE 412,707 C5105410.689000 - CITY YARDS PROJECTC5105650.689000 - COLORADOAVEESP-SEWERS/MANHOLC5105840.689000 - WASTEWATERSYSTEMSDATAINTEGRC5105860.689000 - WASTEWATERMODELINGSOFTWARE 79,749C5106120.689000 - CLIMATE ACTION PLANC5106950.689000 - SUSTAINABLE WATER INFRASTRUCTU 907,619 C5106950.689310 - SWIP PROJECT-LOAN 166,320
C5106950.689510 - SWIP PROJECT-CITY FUNDS 2,356,326
C5106950.689540 - 500 BROADWAY/RECYCLED WATER INC5107330.689000 - SUSTAINABLE WATER INFRASTRUCTUC5107510.689000 - INFOMASTER IMPLEMENTATION 278,500 C5107760.689000 - GROUNDWATER RESILIENCY WELL 100,000
C5108590.689000 - INFRASTRUCTURE CONDITION/ASSETC5108600.689000 - WATER & WASTEWATER MASTER PLA 500,000 C5108610.689000 - RECYCLED WATER MASTER PLANC5108620.689000 - SMURRF UPGRADES 500,000 1,256,000I5100010.689000 - FLEETVEHICLEREPLACEMENTPROG 383,000 406,200 383,000 406,205 407,046 427,398 I5100020.689000 - TELECOMMUNICATIONSSERVICES 19,325 20,499 19,903 21,113 21,745 22,832 I5100030.689000 - COMPUTEREQUIPREPLACEPROG 11,685 14,468 12,359 15,559 16,741 17,578 M5197040.689000 - WATER EFFICIENCY COMP GRANTSFleet Software Update/TelematicsProRata share for Fleet Software update/telematics - PlaceholderNew CIP - AMI Smart Water Meters (split 50/50 with water fund)C5108790.689000 - City Yards Improvements 800,000 347,532New CIP - SWIP Maintenance 750,000 500,000 750,000 1,500,000 New CIP - New Pump for MAPS 250,000 250,000Future Projects 3 Total: CIP Program Costs (Current-Year Dollars) 1 $ 16,595,576 14,872,605 $ 9,570,411 $ 9,271,517 $ 10,774,172 $ 10,437,881 $ Rate Funded Projects 12,825,33 $ 14,113,500 6 $ 5,817,669 $ 2,694,151 $ 9,181,96 $ 7,618,509 6 $ Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 12 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WASTEWATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 12 : Capital Improvement Program Costs (in Future-Year Dollars)Project Description 1 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 C5104570.689000 - HYPERION CAPITAL PAYMENT $ 3,582,157 3,477,800 $ 3,800,311 $ 4,152,702 $ 4,277,283 $ 4,625,882 $ C5104600.689000 - ANNUAL STREET/PARK PARKING LOT $ 250,000 250,000 $ 257,500 $ 265,225 $ 273,182 $ 281,377 $ C5104860.689000 - WASTEWATER MAIN REPLACEMENT $ 6,082,157 3,477,800 $ 4,830,311 $ 4,152,702 $ 4,277,283 $ 4,625,882 $ C5104870.689000 - NON-POTABLE WATER MAIN EXPANS $ - - $ - $ - $ - $ - $ C5104880.689000 - MOSS AVE PUMP STATION IMPROVEM$ 3,960,000 1,272,242 $ - $ - $ 1,639,091 $ - $ C5105010.689000 - WASTEWATERTENANTIMPROVEMENT $ - - $ - $ - $ - $ - $ C5105030.689000 - HANSEN8SOFTWAREUPGRADE $ - - $ - $ - $ - $ - $ C5105050.689000 - SCADASYSTEMSUPGRADES $ - 82,000 $ - $ - $ - $ - $ C5105330.689000 - UTILITYBILLINGSOFTWARE $ - 412,707 $ - $ - $ - $ - $ C5105410.689000 - CITY YARDS PROJECT $ - - $ - $ - $ - $ - $ C5105650.689000 - COLORADOAVEESP-SEWERS/MANHO $ - - $ - $ - $ - $ - $ C5105840.689000 - WASTEWATERSYSTEMSDATAINTEGR $ - - $ - $ - $ - $ - $ C5105860.689000 - WASTEWATERMODELINGSOFTWARE $ - 79,749 $ - $ - $ - $ - $ C5106120.689000 - CLIMATE ACTION PLAN $ - - $ - $ - $ - $ - $ C5106950.689000 - SUSTAINABLE WATER INFRASTRUCTU $ - 907,619 $ - $ - $ - $ - $ C5106950.689310 - SWIP PROJECT-LOAN $ - 166,320 $ - $ - $ - $ - $ C5106950.689510 - SWIP PROJECT-CITY FUNDS $ - 2,356,326 $ - $ - $ - $ - $ C5106950.689540 - 500 BROADWAY/RECYCLED WATER IN $ - - $ - $ - $ - $ - $ C5107330.689000 - SUSTAINABLE WATER INFRASTRUCTU $ - - $ - $ - $ - $ - $ C5107510.689000 - INFOMASTER IMPLEMENTATION $ - 278,500 $ - $ - $ - $ - $ C5107760.689000 - GROUNDWATER RESILIENCY WELL $ - 100,000 $ - $ - $ - $ - $ C5108590.689000 - INFRASTRUCTURE CONDITION/ASSET $ - - $ - $ - $ - $ - $ C5108600.689000 - WATER & WASTEWATER MASTER PLA $ - 500,000 $ - $ - $ - $ - $ C5108610.689000 - RECYCLED WATER MASTER PLAN $ - - $ - $ - $ - $ - $ C5108620.689000 - SMURRF UPGRADES $ 1,256,000 500,000 $ - $ - $ - $ - $ I5100010.689000 - FLEETVEHICLEREPLACEMENTPROG $ 383,000 383,000 $ 418,386 $ 430,943 $ 444,790 $ 481,041 $ I5100020.689000 - TELECOMMUNICATIONSSERVICES $ 19,903 19,325 $ 21,114 $ 22,399 $ 23,761 $ 25,698 $ I5100030.689000 - COMPUTEREQUIPREPLACEPROG $ 12,359 11,685 $ 14,902 $ 16,507 $ 18,293 $ 19,784 $ M5197040.689000 - WATER EFFICIENCY COMP GRANTS $ - - $ - $ - $ - $ - $ Fleet Software Update/Telematics $ - - $ - $ - $ - $ - $ ProRata share for Fleet Software update/telematics - Place$ - - $ - $ - $ - $ - $ New CIP - AMI Smart Water Meters (split 50/50 with wate $ - - $ - $ - $ - $ - $ C5108790.689000 - City Yards Improvements $ 800,000 347,532 $ - $ - $ - $ - $ New CIP - SWIP Maintenance $ - - $ 515,000 $ 795,675 $ 819,545 $ 1,688,263 $ New CIP - New Pump for MAPS $ 250,000 250,000 $ - $ - $ - $ - $ Future Projects 3 $ - - $ - $ - $ - $ - $
Total: CIP Program Costs (Future-Year Dollars) $ 16,595,576 14,872,605 $ 9,857,523 $ 9,836,152 $ 11,773,229 $ 11,747,927 $ TABLE 13 : FORECASTING ASSUMPTIONSEconomic Variables 2 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
0.00% 0.00% 3.00% 3.00% 3.00% 3.00%
Cumulative Construction Cost Multiplier from FY 2024/2 1.00 1.00 1.03 1.0 1.09 6 1.13
1. FY 2017/18 - 2028/29 given from City and assumed for future years. Source file: Item 17-FYE2019_CIP_Budget.pdf, Pages 148 in Wastewater Fund 51 and 51(31)Fund Forecast - Wastewater (May 2019)-final.xlsx, 'Capital (CIP)' tab.
Updates made to CIP per City request on 07.12.2019. Source file: SM Sewer CIP Comparison_JT.xlsx
2. Construction inflator is based on the most current 10 year average of the Engineering News-Record Construction Cost Index. Source: www.enr.com/economics
3. NBS assumed future CIP costs to be the average of CIP costs for years 2019-2023.
Annual Construction Cost Inflation, Per Engineering News Record Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 13 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 2
WASTEWATER RATE STUDYCapital Improvement Plan ExpendituresTABLE 14 : ALLOCATION OF TOTAL CIP COSTS Flow Strength Customer
(VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA)
C5104570.689000 - HYPERION CAPITAL PAYMENT 22,688,255 $ 22,688,255 $ - $ - $ - $ 100% 0% 0% 0% C5104600.689000 - ANNUAL STREET/PARK PARKING LOT 1,500,000 $ 1,500,000 $ - $ - $ - $ 100% 0% 0% 0% C5104860.689000 - WASTEWATER MAIN REPLACEMENT 26,188,255 $ 26,188,255 $ - $ - $ - $ 100% 0% 0% 0% C5104870.689000 - NON-POTABLE WATER MAIN EXPANS - $ - $ - $ - $ - $ 100% 0% 0% 0% C5104880.689000 - MOSS AVE PUMP STATION IMPROVEM$ 6,732,242 6,732,242 $ - $ - $ - $ 100% 0% 0% 0% C5105010.689000 - WASTEWATERTENANTIMPROVEMENT $ - - $ - $ - $ - $ 100% 0% 0% 0% C5105030.689000 - HANSEN8SOFTWAREUPGRADE - $ - $ - $ - $ - $ 100% 0% 0% 0% C5105050.689000 - SCADASYSTEMSUPGRADES 82,000 $ 82,000 $ - $ - $ - $ 100% 0% 0% 0% C5105330.689000 - UTILITYBILLINGSOFTWARE 412,707 $ 412,707 $ - $ - $ - $ 100% 0% 0% 0% C5105410.689000 - CITY YARDS PROJECT - $ - $ - $ - $ - $ 100% 0% 0% 0% C5105650.689000 - COLORADOAVEESP-SEWERS/MANHO - $ - $ - $ - $ - $ 100% 0% 0% 0% C5105840.689000 - WASTEWATERSYSTEMSDATAINTEGR - $ - $ - $ - $ - $ 100% 0% 0% 0% C5105860.689000 - WASTEWATERMODELINGSOFTWARE 79,749 $ 79,749 $ - $ - $ - $ 100% 0% 0% 0% C5106120.689000 - CLIMATE ACTION PLAN - $ - $ - $ - $ - $ 100% 0% 0% 0% C5106950.689000 - SUSTAINABLE WATER INFRASTRUCTU 907,619 $ 907,619 $ - $ - $ - $ 100% 0% 0% 0% C5106950.689310 - SWIP PROJECT-LOAN 166,320 $ 166,320 $ - $ - $ - $ 100% 0% 0% 0% C5106950.689510 - SWIP PROJECT-CITY FUNDS 2,356,326 $ 2,356,326 $ - $ - $ - $ 100% 0% 0% 0% C5106950.689540 - 500 BROADWAY/RECYCLED WATER IN $ - - $ - $ - $ - $ 100% 0% 0% 0% C5107330.689000 - SUSTAINABLE WATER INFRASTRUCTU - $ - $ - $ - $ - $ 100% 0% 0% 0% C5107510.689000 - INFOMASTER IMPLEMENTATION 278,500 $ 278,500 $ - $ - $ - $ 100% 0% 0% 0% C5107760.689000 - GROUNDWATER RESILIENCY WELL 100,000 $ 100,000 $ - $ - $ - $ 100% 0% 0% 0% C5108590.689000 - INFRASTRUCTURE CONDITION/ASSET - $ - $ - $ - $ - $ 100% 0% 0% 0% C5108600.689000 - WATER & WASTEWATER MASTER PLA $ 500,000 500,000 $ - $ - $ - $ 100% 0% 0% 0% C5108610.689000 - RECYCLED WATER MASTER PLAN - $ - $ - $ - $ - $ 100% 0% 0% 0% C5108620.689000 - SMURRF UPGRADES 1,756,000 $ 1,756,000 $ - $ - $ - $ 100% 0% 0% 0% I5100010.689000 - FLEETVEHICLEREPLACEMENTPROG 2,412,849 $ 2,412,849 $ - $ - $ - $ 100% 0% 0% 0% I5100020.689000 - TELECOMMUNICATIONSSERVICES 125,417 $ 125,417 $ - $ - $ - $ 100% 0% 0% 0% I5100030.689000 - COMPUTEREQUIPREPLACEPROG 88,390 $ 88,390 $ - $ - $ - $ 100% 0% 0% 0% M5197040.689000 - WATER EFFICIENCY COMP GRANTS - $ - $ - $ - $ - $ 100% 0% 0% 0% Fleet Software Update/Telematics - $ - $ - $ - $ - $ 100% 0% 0% 0% ProRata share for Fleet Software update/telematics - Place$ - - $ - $ - $ - $ 100% 0% 0% 0% New CIP - AMI Smart Water Meters (split 50/50 with wate $ - - $ - $ - $ - $ 100% 0% 0% 0%C5108790.689000 - City Yards Improvements 1,147,532 $ 1,147,532 $ - $ - $ - $ 100% 0% 0% 0% New CIP - SWIP Maintenance 3,500,000 $ 3,500,000 $ - $ - $ - $ 100% 0% 0% 0% New CIP - New Pump for MAPS 500,000 $ 500,000 $ - $ - $ - $ 100% 0% 0% 0% Future Projects 3 ########### ########### - $ - $ - $ 100% 0% 0% 0% Total Costs ########### ########### - $ - $ - $ 100% 0% 0% 0% Description Total Cost Basis of Classification
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 2 (CIP), 14 of 30
5/28/2025
CITY OF SANTA MONICA EXHIBIT 3
WASTEWATER RATE STUDYDebt ServicePreliminary Draft Subject to Material Revision, Do Not Cite or DistributeTABLE 15 : EXISTING AND PLANNED DEBT OBLIGATIONSCURRENT CITY DEBT OBLIGATIONSAnnual Repayment Schedules: FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30Wastewater 2012A Series Bond Principal Payment 1 $ - - $ - $ - $ - $ - $
Interest Payment - - - - - -
Subtotal: Annual Debt Service - $ - $ - $ - $ - $ - $
Coverage Req't (% of debt service) 1 120% 120% 120% 120% 120% 120% Reserve Requirement (total fund balance) 1 $ - - $ - $ - $ - $ - $ Repayment of $13M modification to Loan
Principal Payment $ 650,000 650,000 $ 650,000 $ 650,000 $ 650,000 $ 650,000 $ Interest Payment - - - - - -
Subtotal: Annual Debt Service 650,00 $ 650,00 0 $ 650,00 0 $ 650,00 0 $ 650,00 0 $ 650,00 0 $ 0 Coverage Req't ($-Amnt. above annual payment) 120% 120% 120% 120% 120% 120%Reserve Requirement (total fund balance) $ - - $ - $ - $ - $ - $ California Clean Water SRF Payment Schedule
Principal Payment 2 $ 1,471,751 1,445,728 $ 1,498,242 $ 1,525,211 $ 1,552,664 $ 1,580,612 $ Interest Payment 2 853,218 827,195 800,703 773,735 746,281 718,333 Subtotal: Annual Debt Service 2,298,946 $ 2,298,946 $ 2,298,946 $ 2,298,946 $ 2,298,946 $ 2,298,946 $ Coverage Req't ($-Amnt. above annual payment) 0% 0% 0% 0% 0% 0%Reserve Requirement (total fund balance) $ - - $ - $ - $ - $ - $ State Water Resources Control Board Clean Water SRF (SMURRF) Principal Payment 3 - - - - - -
Interest Payment 3 - - - - - -
Subtotal: Annual Debt Service - $ - $ - $ - $ - $ - $
Coverage Req't ($-Amnt. above annual payment) 0% 0% 0% 0% 0% 0%Reserve Requirement (total fund balance) $ - - $ - $ - $ - $ - $
1. Principal payments found in Source file: Item 7-Wastewater2012ASeriesBondRedeenSchedule_2019-2022.pdf.
Per the official statement, there is a 120% coverage requirement of the operating fund and no reserve fund requirement. Source: Item 7-Wastewater2012ASeriesO
2. Principal and Interest payments found in Source file: Item 7-WastewaterandCleanBeachesFund_SWIP_CWSRFLoanRepayment_8211-110.pdf.
3. Per official statement, no coverage or reserve requirement. Principal and Interest payments found in Source file: Item 7-Wastewater_SMURRF_CWSRFLoan.pdf.
TABLE 16 : EXISTING ANNUAL DEBT OBLIGATIONS TO BE SATISFIED BY WATER RATESExisting Annual Debt Service $ 2,948,94 2,948,946 $ 2,948,94 6 $ 2,948,94 6 $ 2,948,94 6 $ 2,948,94 6 $ 6 Existing Annual Coverage Requirement 120% 120% 120% 120% 120% 120% Existing Debt Reserve Target $ - - $ - $ - $ - $ - $
Budget Projected
NBS - Local Government SolutionsWeb: www.nbsgov.com Toll-Free:800.676.7516 Exhibit 3 (Debt), 15 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYProjected Water Rates Under Existing Rate ScheduleTABLE 17 : CURRENT WASTEWATER RATE SCHEDULE FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24
% Increase in Annual Rate
Revenue: 10.00% 10.00% 10.00% 10.00% 3.00%
Residential ($/Dwelling Unit)
Single Family $0.00 $14.06 $15.46 $17.01 $18.71 $19.27
MFR: Duplex + Triplex $0.00 $5.66 $6.23 $6.85 $7.53 $7.76MFR: Fourplex + Larger $0.00 $4.27 $4.69 $5.16 $5.68 $5.85MFR : Individually metered $0.00 $6.87 $7.55 $8.31 $9.14 $9.41 Non-Residential ($/Account)
MFR : Mixed Use $0.00 $137.42 $151.16 $166.27 $182.90 $188.39Commercial - Low $0.00 $40.17 $44.18 $48.60 $53.46 $55.06 Commercial - Medium $85.39 $93.93 $103.33 $113.66 $117.07Commercial - High $0.00 $214.65 $236.12 $259.73 $285.70 $294.27Institutional $0.00 $64.76 $71.23 $78.36 $86.19 $88.78Church/Schools $0.00 $41.30 $45.43 $49.97 $54.97 $56.62Misc Industrial $0.00 $79.11 $87.02 $95.72 $105.30 $108.46Wastewater Only $0.00 $93.76 $103.14 $113.45 $124.80 $128.54 TABLE 18 : CURRENT WASTEWATER RATE SCHEDULE
Alternative 2 : % Fixed, % Volumetric, continued
FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24
% Increase in Annual Rate
Revenue: 10.00% 10.00% 10.00% 10.00% 3.00%
Residential
Single Family $4.65 85% $3.40 $3.73 $4.11 $4.52 $4.65
MFR: Duplex + Triplex $4.65 90% $3.40 $3.73 $4.11 $4.52 $4.65MFR: Fourplex + Larger $4.65 97% $3.40 $3.73 $4.11 $4.52 $4.65MFR : Individually metered $4.65 99% $3.40 $3.73 $4.11 $4.52 $4.65 Non-Residential
MFR : Mixed Use $4.65 95% $3.15 $3.47 $3.81 $4.19 $4.32 Commercial - Low $4.24 93% $3.31 $3.65 $4.01 $4.41 $4.54 Commercial - Medium $5.55 94% $3.47 $3.82 $4.20 $4.62 $4.76 Commercial - High $6.50 95% $4.60 $5.06 $5.57 $6.13 $6.31 Institutional $4.19 82% $3.38 $3.71 $4.08 $4.49 $4.63
Church/Schools $4.19 81% $3.25 $3.58 $3.94 $4.33 $4.46Misc Industrial $5.16 88% $3.20 $3.52 $3.87 $4.26 $4.39Wastewater Only -- 85% -- -- -- -- -- Wastewater Rate Schedule
Current
Rates
Proposed Wastewater Rates
Volumetric Charges ($/hcf of average winter water consumption) Fixed Charges ($/bi-monthly)
Wastewater Rate Schedule
Current
Rates
Updated
Discharge
Factor
Proposed Wastewater Rates
Prepared by NBSwww.nbsgov.com | 800.676.7516
Exhibit 4 (Current Rates), 16 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisPreliminary Draft Subject to Material Revision, Do Not Cite or DistributeTABLE 19 : CLASSIFICATION OF EXPENSES Fixed % Variable % Fixed $ Variable $
FY 2025/26 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Wastewater Fund, 51Salaries and Benefits
Permanent Employees $ 2,195,101 2,310,633 $ - $ - $ 115,532 $ 95% 0% 0% 5% 100% 0% $ - 2,310,633 $ Year-End Cash Outs - - - - - 95% 0% 0% 5% 100% 0% $ - - $ Vacation Lump Sum Pays - - - - - 95% 0% 0% 5% 100% 0% $ - - $ Standby Pay 21,906 23,059 - - 1,153 95% 0% 0% 5% 100% 0% $ - 23,059 $ Overtime 43,053 45,319 - - 2,266 95% 0% 0% 5% 100% 0% $ - 45,319 $ Temporary Employees - - - - - 95% 0% 0% 5% 100% 0% $ - - $ Medicare - Misc. Employees 30,510 32,116 - - 1,606 95% 0% 0% 5% 100% 0% $ - 32,116 $ Workers' Comp Insurance 18,557 19,534 - - 977 95% 0% 0% 5% 100% 0% $ - 19,534 $ Medical - Misc. Employees 492,604 518,530 - - 25,927 95% 0% 0% 5% 100% 0% $ - 518,530 $ Med. Trust - Misc. Employees 46,064 48,488 - - 2,424 95% 0% 0% 5% 100% 0% $ - 48,488 $ Dental 26,209 27,588 - - 1,379 95% 0% 0% 5% 100% 0% $ - 27,588 $ Vision 3,010 3,168 - - 158 95% 0% 0% 5% 100% 0% $ - 3,168 $ Employee Health Contribution (39,415) (41,489) - - (2,074) 95% 0% 0% 5% 100% 0% $ - (41,489) $ Retirement - Misc. Employees 566,158 595,956 - - 29,798 95% 0% 0% 5% 100% 0% $ - 595,956 $ Retirement - As Needed - - - - - 95% 0% 0% 5% 100% 0% $ - - $ Unemployment 10,033 10,561 - - 528 95% 0% 0% 5% 100% 0% $ - 10,561 $ EAP 397 418 - - 21 95% 0% 0% 5% 100% 0% $ - 418 $ DCAP 732 770 - - 39 95% 0% 0% 5% 100% 0% $ - 770 $ Life Insurance and AD&D 3,467 3,649 - - 182 95% 0% 0% 5% 100% 0% $ - 3,649 $ Disability Insurance 14,419 13,698 - - 721 95% 0% 0% 5% 100% 0% $ - 14,419 $ EBB Budget Request: Add 1 FTE Water Chemist 176,267 185,544 - - 9,277 95% 0% 0% 5% 100% 0% $ - 185,544 $ EBB Budget Request: Add 1 FTE SCADA Superv 105,200 110,737 - - 5,537 95% 0% 0% 5% 100% 0% $ - 110,737 $ Equity Adjustment for ALL POSITIONS (10%) 379,826 360,835 - - 18,991 95% 0% 0% 5% 100% 0% $ - 379,826 $ Placeholder - - - - - 95% 0% 0% 5% 100% 0% $ - - $ Salaries and Benefits - SUBTOTAL $ 4,074,385 4,288,826 $ - $ - $ 214,441 $ 95% 0% 0% 5% Strength Customer Basis of Classification Budget Categories Total Revenue Collection Prepared by NBS for the City of VictorvilleWastewater Rate Study Funct. & Classification, 17 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisPreliminary Draft Subject to Material Revision, Do Not Cite or DistributeTABLE 20 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Fixed % Variable % Fixed $ Variable $ Wastewater Fund, 51Supplies and Expenses
Vehicles - Fuels / Lubrication $ 2,320 2,320 $ - $ - $ - $ 100% 0% 0% 0% 100% 0% $ - 2,320 $ CNG Fuel 42,467 42,467 - - - 100% 0% 0% 0% 100% 0% $ - 42,467 $ Reimburse Water Fund 409,983 409,983 - - - 100% 0% 0% 0% 100% 0% $ - 409,983 $ Utilities Billing Services - 345,013 - - 345,013 0% 0% 0% 100% 100% 0% $ - 345,013 $ Metered Postage - 10,200 - - 10,200 0% 0% 0% 100% 100% 0% $ - 10,200 $ Indirect Cost Allocation - 773,584 - - 773,584 0% 0% 0% 100% 100% 0% $ - 773,584 $ Memberships and Dues - 6,545 - - 6,545 0% 0% 0% 100% 100% 0% $ - 6,545 $ Rent - - - - - 0% 0% 0% 100% 100% 0% $ - - $ Other Operating Rent - 235,709 - - 235,709 0% 0% 0% 100% 100% 0% $ - 235,709 $ Reimburse Engineering Office - - - - - 0% 0% 0% 100% 100% 0% $ - - $ Office Supplies / Expense - 15,300 - - 15,300 0% 0% 0% 100% 100% 0% $ - 15,300 $ Discounts Available - - - - - 0% 0% 0% 100% 100% 0% $ - - $ Discounts Lost - - - - - 0% 0% 0% 100% 100% 0% $ - - $ SPEC Department Supplies 160,338 160,338 - - - 100% 0% 0% 0% 100% 0% $ - 160,338 $ CHEMICALS-SWIP 42,656 42,656 - - - 100% 0% 0% 0% 100% 0% $ - 42,656 $ Rideshare and Parking Programs 2,663 2,663 - - - 100% 0% 0% 0% 100% 0% $ - 2,663 $ Uniform / Protective Clothing 20,349 21,420 - - 1,071 95% 0% 0% 5% 100% 0% $ - 21,420 $ Utilities - Electricity 2,775 2,921 - - 146 95% 0% 0% 5% 100% 0% $ - 2,921 $ Utilities - Water - 1,900 - - 1,900 0% 0% 0% 100% 100% 0% $ - 1,900 $ Strength Customer Basis of Classification Budget Categories Total Revenue Flow Prepared by NBS for the City of VictorvilleWastewater Rate Study Funct. & Classification, 18 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisPreliminary Draft Subject to Material Revision, Do Not Cite or DistributeTABLE 21 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Fixed % Variable % Fixed $ Variable $ Wastewater Fund, 51
Utilities - Light/Power - SWIP 1,358,455 1,358,455 - - - 100% 0% 0% 0% 100% 0% $ - 1,358,455 $ Utilities - Water - SWIP - 1,560 - - 1,560 0% 0% 0% 100% 100% 0% $ - 1,560 $ Utilities - Telephone 20,242 20,242 - - - 100% 0% 0% 0% 100% 0% $ - 20,242 $ Vehicle Management Fund - Maint. 201,962 201,962 - - - 100% 0% 0% 0% 100% 0% $ - 201,962 $ Computer Eqt. / Software Maint. 78,613 78,613 - - - 100% 0% 0% 0% 100% 0% $ - 78,613 $ Sewage Pump Plant Maint. 319,611 532,685 106,537 106,537 - 60% 20% 20% 0% 0% 100% $ 532,685 - $ Storm Drain Maintenance 99,079 165,132 33,026 33,026 - 60% 20% 20% 0% 100% 0% $ - 165,132 $ SMURRF Plant Maintenance 344,746 344,746 - - - 100% 0% 0% 0% 100% 0% $ - 344,746 $ AWTF, Civic Lot O&M 445,897 445,897 - - - 100% 0% 0% 0% 100% 0% $ - 445,897 $ Conferences / Meetings / Travel - 16,365 - - 16,365 0% 0% 0% 100% 100% 0% $ - 16,365 $ Food Purchases 1,117 1,117 - - - 100% 0% 0% 0% 100% 0% $ - 1,117 $ Training Costs - - - - - 100% 0% 0% 0% 100% 0% $ - - $ Training 10,200 20,400 4,080 4,080 2,040 50% 20% 20% 10% 100% 0% $ - 20,400 $ Bank Fees - 10,636 - - 10,636 0% 0% 0% 100% 100% 0% $ - 10,636 $ General Liability - Auto - 1,294,496 - - 1,294,496 0% 0% 0% 100% 100% 0% $ - 1,294,496 $ Property Insurance - 116,460 - - 116,460 0% 0% 0% 100% 100% 0% $ - 116,460 $ Interest Expense - Bonds - - - - - 0% 0% 0% 100% 100% 0% $ - - $ LA Sewage Disposal - 7,151,659 1,430,332 1,430,332 4,290,995 0% 20% 20% 60% 100% 0% $ - 7,151,659 $ ASSFC Pass-Thru - 390,993 - - 390,993 0% 0% 0% 100% 100% 0% $ - 390,993 $ SCADA O&M - 61,497 - - 61,497 0% 0% 0% 100% 100% 0% $ - 61,497 $ Transfer Station Fee - 9,654 - - 9,654 0% 0% 0% 100% 100% 0% $ - 9,654 $ Fiscal Agent Fees - 2,234 - - 2,234 0% 0% 0% 100% 100% 0% $ - 2,234 $ Contractual Services - 275,400 - - 275,400 0% 0% 0% 100% 100% 0% $ - 275,400 $ Cont SVCS-SWIP 2,526,937 2,526,937 - - - 100% 0% 0% 0% 100% 0% $ - 2,526,937 $ SWIP City 328,787 547,979 109,596 109,596 - 60% 20% 20% 0% 100% 0% $ - 547,979 $ Employee Medical Exams 5,697 5,697 - - - 100% 0% 0% 0% 100% 0% $ - 5,697 $ Professional Services 309,764 309,764 - - - 100% 0% 0% 0% 100% 0% $ - 309,764 $ Supplies and Expenses - SUBTOTAL $ 6,734,659 17,963,599 $ 1,683,571 $ 1,683,571 $ 7,861,798 $ 37% 9% 9% 44% Strength Customer Basis of Classification Budget Categories Total Revenue Flow Prepared by NBS for the City of VictorvilleWastewater Rate Study Funct. & Classification, 19 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisPreliminary Draft Subject to Material Revision, Do Not Cite or DistributeTABLE 22 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Wastewater Fund, 51 Fixed % Variable % Fixed $ Variable $ Retirement and OPEB
Retirement - Misc. Employees - - - - - 100% 0% 0% 0% 100% 0% $ - - $ Retirement - GASB 68 - - - - - 100% 0% 0% 0% 100% 0% $ - - $ PERS Paydown Savings - - - - - 100% 0% 0% 0% 100% 0% $ - - $ OPEB Payment ARC 34,358 34,358 - - - 100% 0% 0% 0% 100% 0% $ - 34,358 $ Reimbursement from OPEB Trust (15,481) (15,481) - - - 100% 0% 0% 0% 100% 0% $ - (15,481) $ OPEB Expense - - - - - 100% 0% 0% 0% 100% 0% $ - - $ Retirement and OPEB - SUBTOTAL $ 18,877 18,877 $ - $ - $ - $ 100% 0% 0% 0% Environmental Reimbursement 470,193 470,193 - - - 100% 0% 0% 0% 100% 0% $ - 470,193 $ Water/Wastewater Transfer 303,664 303,664 - - - 100% 0% 0% 0% 100% 0% $ - 303,664 $ SCADA Reimbursement 94,518 94,518 - - - 100% 0% 0% 0% 100% 0% $ - 94,518 $ Clean Beaches Transfer - - - - - 100% 0% 0% 0% 100% 0% $ - - $ Water/Wastewater Reimb 183,108 183,108 - - - 100% 0% 0% 0% 100% 0% $ - 183,108 $ Transfer (Budget Only) - - - - - 100% 0% 0% 0% 100% 0% $ - - $ GIS Analyst for PW 28,528 28,528 - - - 100% 0% 0% 0% 100% 0% $ - 28,528 $ Admin Analyst Reimb 1,316 1,316 - - - 100% 0% 0% 0% 100% 0% $ - 1,316 $ ADA Coord Reimb 5,392 5,392 - - - 100% 0% 0% 0% 100% 0% $ - 5,392 $ Debt Service City Yards Master Plan - - - - - 100% 0% 0% 0% 100% 0% $ - - $ ProRata Share Fleet Software - - - - - 100% 0% 0% 0% 100% 0% $ - - $ Transfer Out WW Fund for Potable Water Purc - - - - - 100% 0% 0% 0% 100% 0% $ - - $ Trans WTR Low Income Disc (41,000) (41,000) - - - 100% 0% 0% 0% 100% 0% $ - (41,000) $ SMURRF O&M Costs (294,554) (294,554) - - - 100% 0% 0% 0% 100% 0% $ - (294,554) $ Stormwater/Wastewater Reimb (1,413,116) (1,413,116) - - - 100% 0% 0% 0% 100% 0% $ - (1,413,116) $ Com Equip Reimb - - - - - 100% 0% 0% 0% 100% 0% $ - - $ SWIP Operations (1,074,290) (1,074,290) - - - 100% 0% 0% 0% 100% 0% $ - (1,074,290) $ CLN BCH - WW SWIP LOAN REPAY (950,000) (950,000) - - - 100% 0% 0% 0% 100% 0% $ - (950,000) $ CLN BCH - WW SWIP LOAN REPAY MEMO 218,664 218,664 - - - 100% 0% 0% 0% 100% 0% $ - 218,664 $ WTR RES PROT SPEC XFER (76,970) (76,970) - - - 100% 0% 0% 0% 100% 0% $ - (76,970) $ Interfund Transactions - SUBTOTAL $ (2,544,547) (2,544,547) $ - $ - $ - $ 100% 0% 0% 0% $ 8,283,374 19,726,755 $ 1,683,571 $ 1,683,571 $ 8,076,240 $ 42% 9% 9% 41% Strength Customer Basis of Classification
Sub-Total: Wastewater (51) Expenses
Budget Categories
Total
Revenue
Flow
Prepared by NBS for the City of VictorvilleWastewater Rate Study Funct. & Classification, 20 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisPreliminary Draft Subject to Material Revision, Do Not Cite or DistributeTABLE 23 : CLASSIFICATION OF EXPENSES, CONTINUED FY 2025/26 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA) Debt and Capital Expenditures Fixed % Variable % Fixed $ Variable $ Existing Debt Service:
Wastewater 2012A Series Bond - - - - - 60% 20% 20% 0% 100% 0% $ - - $ $13M addition to SRF 390,000 650,000 97,500 97,500 65,000 60% 15% 15% 10% 100% 0% $ - 650,000 $ California Clean Water SRF 1,149,473 2,298,946 459,789 459,789 229,895 50% 20% 20% 10% 100% 0% $ - 2,298,946 $ SWRCB Clean Water SRF (SMURRF) - - - - - 60% 20% 20% 0% 100% 0% $ - - $ New Debt Service - - - - - 50% 20% 20% 10% 100% 0% $ - - $ Rate-Funded Capital Expenses 6,068,805 14,113,500 2,540,430 2,540,430 2,963,835 43% 18% 18% 21% 100% 0% $ - 14,113,500 $ TOTAL REVENUE REQUIREMENTS $ 15,891,651 36,789,201 $ 4,781,290 $ 4,781,290 $ 11,334,969 $ 43% 13% 13% 31% $ 532,685 36,256,516 $ Less: Non-Rate Revenues 98.6% 1.4%City of LA - Wastewater Repair (42,000) (280,000) (70,000) (70,000) (98,000) 15% 25% 25% 35% TRUEConnection / Capacity Permit FeesWastewater Services ChargesWastewater Capital Facility FeesSaddle Fees (12,892) (85,946) (21,487) (21,487) (30,081) 15% 25% 25% 35% Industrial Waste Fees (90,000) (600,000) (150,000) (150,000) (210,000) 15% 25% 25% 35% Admin Fines / Penalties - - - - - 15% 25% 25% 35%
Unrealized Gain (Loss) - - - - - 15% 25% 25% 35%
ASSFC Pass-Thru (60,000) (400,000) (100,000) (100,000) (140,000) 15% 25% 25% 35% Wastewater Misc. Non-Operating - - - - - 15% 25% 25% 35% Int. Wastewater Bond Proceeds - - - - - 15% 25% 25% 35% Alt. Fuel Tax Credit - - - - - 15% 25% 25% 35%
Interest Income (105,739) (704,928) (176,232) (176,232) (246,725) 15% 25% 25% 35% NET REVENUE REQUIREMENTS $ 15,581,020 34,718,327 $ 4,263,572 $ 4,263,572 $ 10,610,164 $ Allocation of Revenue Requirements 100.0% 44.9% 12.3% 12.3% 30.6% TABLE 24 : ADJUSTMENTS TO CLASSIFICATIONS OF EXPENSESAdjustment to Current Rate Level: Total (VOL) (BOD) (TSS) (CA)Target Rate Rev. After Rate Increases $22,242,026 Projected Rate Revenue at Current Rates $20,786,940
Projected Rate Increase 7%
Adjusted Net Revenue Req'ts $22,242,026 9,981,859 $ 2,731,424 $ 2,731,424 $ 6,797,319 $ Percent of Revenue 100.0% 44.9% 12.3% 12.3% 30.6%
Strength Customer Basis of Classification
Total Cost Distribution
to Fixed/ Variable
Budget Categories
Total
Revenue
Flow
Prepared by NBS for the City of VictorvilleWastewater Rate Study Funct. & Classification, 21 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisTABLE 26 : DEVELOPMENT OF THE VOLUME ALLOCATION FACTOR Customer Class
Number
of Accounts 1
Number
of EDUs 1
Annual
Volume
(hcf)1
Lowest
4-Months
Water Use
(hcf)1,2
Estimated
Wastewater
Flow
Discharge
Factors
Adjusted
Annual
Volume (hcf) 3
Percentage
of Adjusted
Volume
Calculation Components
Single Family 7,541 7,541 1,205,541 341,641 85% 1,024,922 785,090 24.6% MFR: Duplex + Triplex 2,674 1,112 144,680 43,631 90% 130,894 100,264 3.1% MFR: Fourplex + Larger 40,480 3,850 1,666,254 539,142 97% 1,617,427 1,238,949 38.9% MFR : Individually metered 1,601 1,572 79,047 25,957 99% 77,870 59,649 1.9% MFR : Mixed Use 989 34 58,693 18,664 95% 55,991 42,889 1.3% Commercial - Low 5,122 1,665 696,163 216,951 93% 650,854 498,554 15.6% Commercial - Medium 204 33 27,700 8,697 94% 26,092 19,987 0.6% Commercial - High 3,431 301 466,294 148,321 95% 444,963 340,841 10.7% Institutional 457 77 62,049 17,027 82% 51,082 39,129 1.2% Church/Schools 627 151 85,252 23,156 81% 69,468 53,212 1.7% Misc Industrial 78 11 10,565 3,108 88% 9,323 7,141 0.2% Wastewater Only - 34 - - 85% - - 0.0%
Total 16,381 63,203 4,502,239 1,386,295 4,158,885 92% 3,185,706 100.0% 3,185,706 Flow (hcf/yr.)
0.77 Flow Adj. Factor
1. Consumption, accounts and EDUs from FY 23-24.2. The four consecutive month period of lowest water usage during Fiscal Year 23/24, for each customer class.3. NBS adjusted the average winter consumption to the outgoing wastewater flows pumped from the City's Moss Avenue Pump Station to the City of Los Angeles' Hyperion Water Reclamation Plant for treatment and disposal.
Prepared by NBSwww.nbsgov.com | 800.676.7516
Sewer Allocation Factors, 22 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisTABLE 27 : DEVELOPMENT OF THE STRENGTH ALLOCATION FACTOR Customer Class
Adjusted
Annual Flow
(hcf)
Average
Strength
Factor
(mg/l)
Calculated
BOD
(lbs./yr.)
Adjusted
BOD
(lbs./yr.)
Percent of
Total
Average
Strength
Factor
(mg/l)
Calculated
TSS
(lbs./yr.)
Adjusted TSS
(lbs./yr.) Percent of Total
Single Family 785,090 225 1,101,969 1,149,915 18.7% 225 1,101,969 848,382 18.7% MFR: Duplex + Triplex 100,264 225 140,733 146,857 2.4% 225 140,733 108,348 2.4%MFR: Fourplex + Larger 1,238,949 225 1,739,016 1,814,680 29.5% 225 1,739,016 1,338,830 29.5% MFR : Individually metered 59,649 225 83,724 87,367 1.4% 225 83,724 64,457 1.4% MFR : Mixed Use 42,889 225 60,200 62,820 1.0% 225 60,200 46,347 1.0%Commercial - Low 498,554 150 466,521 486,819 7.9% 150 466,521 359,164 7.9% Commercial - Medium 19,987 600 74,810 78,064 1.3% 600 74,810 57,594 1.3% Commercial - High 340,841 1000 2,126,278 2,218,790 36.1% 1000 2,126,278 1,636,974 36.1% Institutional 39,129 140 34,174 35,660 0.6% 125 30,512 23,491 0.5% Church/Schools 53,212 140 46,474 48,496 0.8% 125 41,495 31,946 0.7%Misc Industrial 7,141 290 12,919 13,481 0.2% 550 24,502 18,864 0.4%Wastewater Only - 225 0- 0.0% 225 0 - 0.0% Total 3,185,706 5,886,818 6,142,950 100% 5,889,760 4,534,395 100% Target, from WWTP Data 6,142,950 BOD (lbs./yr.) 4,534,395 TSS (lbs./yr.) BOD Adj. Factor 0.77 1.04 TSS Adj. Factor
1. Consumption, accounts and EDUs from FY 23-24.2. Typical strength factors for BOD and TSS are derived from the ASSFC Report for March-April 2018-19 and calculated for Commercial customers with weighted averages.
Source files: ASSFC_Report_March-April_2018-19_to_LASAN.xlsx Biochemical Oxygen Demand (BOD) Total Suspended Solids (TSS) Prepared by NBSwww.nbsgov.com | 800.676.7516
Sewer Allocation Factors, 23 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYCost of Service AnalysisTABLE 28 : DEVELOPMENT OF THE CUSTOMER ALLOCATION FACTOR Customer Class
Number
of Accounts 1
Percentage
of Accounts
Single Family 7,541 46.04%
MFR: Duplex + Triplex 1,112 6.79%MFR: Fourplex + Larger 3,850 23.50%MFR : Individually metered 1,572 9.60%MFR : Mixed Use 34 0.21% Commercial - Low 1,665 10.16%Commercial - Medium 33 0.20% Commercial - High 301 1.84%Institutional 77 0.47%
Church/Schools 151 0.92%Misc Industrial 11 0.07%Wastewater Only 34 0.21% Total 16,381 100%
1. Consumption, accounts and EDUs from FY 23-24.
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Sewer Allocation Factors, 24 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYWastewater Cost of Service AnalysisPreliminary Draft - Do Not Cite or DistributeTABLE 30 : ALLOCATION OF REVENUE REQUIREMENTS BY CUSTOMER CLASS
BOD TSS
Net Revenue Requirements 1 $ 2,731,424 9,981,859 $ 2,731,424 $ 6,797,319 $ 22,242,026 $ --
44.9% 12.3% 12.3% 30.6% 100.0%
Single Family $ 511,302.66 2,459,944 $ 511,047 $ 3,129,148 $ $ 6,611,442 29.7% MFR: Duplex + Triplex 65,299 314,161 65,266 461,426 906,152 4.1% MFR: Fourplex + Larger 806,886 3,882,033 806,483 1,597,563 7,092,965 31.9% MFR : Individually metered 38,847 186,899 38,828 652,304 916,878 4.1% MFR : Mixed Use 27,932 134,387 27,918 14,108 204,346 0.9% Commercial - Low 216,461 1,562,132 216,353 690,894 2,685,840 12.1% Commercial - Medium 34,711 62,624 34,694 13,693 145,722 0.7% Commercial - High 986,571 1,067,968 986,078 124,900 3,165,518 14.2% Institutional 15,856 122,603 14,150 31,951 184,560 0.8% Church/Schools 21,563 166,732 19,243 62,658 270,197 1.2% Misc Industrial 5,994 22,376 11,363 4,564 44,298 0.2%
Wastewater Only - - - 14,108 14,108 0.1%
$ 2,731,424 9,981,859 $ 2,731,424 $ 6,797,319 $ 22,242,026 $ 100%
1. Revenue requirement for each customer class is determined by multiplying the revenue requirement from each cost classification by the allocation factors for each customer class. Multi-Family Residential = MFR Customer Class
Cost Classification Components Cost-ofService Net
Revenue
% of COS Net
Revenue
Req'ts. Volume Treatment Customer Related
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CITY OF SANTA MONICA
WASTEWATER RATE STUDYWastewater Cost of Service AnalysisPreliminary Draft - Do Not Cite or DistributeTABLE 31 : RATE DESIGN - SUMMARY OF REVENUE REQUIREMENTS COS
Rev. Req't
% of COS
Rev. Req't.
% Fixed
Revenue
% Variable
Revenue
Revenue from
Fixed Charges
Revenue from
Volumetric
Charges
Single Family $ 29.7% 6,611,442 15% 85% 1,004,543 $ 5,606,900 $ $ 6,611,442 MFR: Duplex + Triplex $ 4.1% 906,152 16% 84% 142,529 $ 763,624 $ $ 906,152 MFR: Fourplex + Larger $ 31.9% 7,092,965 23% 77% 1,631,737 $ 5,461,228 $ $ 7,092,965 MFR : Individually metered $ 4.1% 916,878 12% 88% 105,954 $ 810,923 $ $ 916,878MFR : Mixed Use $ 0.9% 204,346 22% 78% 44,277 $ 160,069 $ $ 204,346Commercial - Low $ 12.1% 2,685,840 23% 77% 620,751 $ 2,065,089 $ $ 2,685,840 Commercial - Medium $ 0.7% 145,722 19% 81% 27,598 $ 118,124 $ $ 145,722Commercial - High $ 14.2% 3,165,518 21% 79% 650,324 $ 2,515,194 $ $ 3,165,518 Institutional $ 0.8% 184,560 25% 75% 46,408 $ 138,153 $ $ 184,560Church/Schools $ 1.2% 270,197 21% 79% 57,822 $ 212,374 $ $ 270,197 Misc Industrial $ 0.2% 44,298 19% 81% 8,532 $ 35,766 $ $ 44,298 Wastewater Only $ 0.1% 14,108 100% 0% 14,108 $ - $ $ 14,108 Total 22,242,026 $ 100.0% 4,354,582 $ 17,887,444 $ $ 22,242,026 Percent of Total Revenue Collected 20% 80% - $ Check
Customer Class
Cost-of-Service Net Revenue
Requirements Net Revenue Allocation
NBS - Local Government SolutionsWeb: www.nbsgov.com Toll-Free:800.676.7516 COSA - Sewer Rates, 26 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYWastewater Cost of Service AnalysisPreliminary Draft - Do Not Cite or DistributeTABLE 32 : PROPOSED WASTEWATER RATES Customer Class
No. of
Accounts 1
No. of
Dwelling
Units 1
Estimated
Sewage
Volume2
Revenue
from Fixed
Charges
Revenue from
Volumetric
Charges
Discharge
Factor
Bi-Monthly
Fixed Charge 3
Volumetric
Charge Per
hcf4
Residential Per DU
Single Family 7,541 7,541 785,090 1,004,543 $ 5,606,900 $ 85% $22.20 $4.92MFR: Duplex + Triplex 1,112 2,674 100,264 142,529 $ 763,624 $ 90% $8.88 $4.92MFR: Fourplex + Larger 3,850 40,480 1,238,949 1,631,737 $ 5,461,228 $ 97% $6.72 $4.92MFR : Individually metered 1,572 1,601 59,649 105,954 $ 810,923 $ 99% $11.03 $4.92 Subtotal 14,075 52,296 2,183,952 2,884,762 $ 12,642,675 $ Non-Residential Per Account
MFR : Mixed Use 989 34 42,889 44,277 $ 160,069 $ 95% $217.04 $4.92 Commercial - Low 5,122 1,665 498,554 620,751 $ 2,065,089 $ 93% $62.14 $4.43Commercial - Medium 204 33 19,987 27,598 $ 118,124 $ 94% $139.39 $6.27 Commercial - High 3,431 301 340,841 650,324 $ 2,515,194 $ 95% $360.09 $7.73 Institutional 457 77 39,129 46,408 $ 138,153 $ 82% $100.45 $4.29 Church/Schools 627 151 53,212 57,822 $ 212,374 $ 81% $63.82 $4.90 Misc Industrial 78 11 7,141 8,532 $ 35,766 $ 88% $129.27 $5.68Wastewater Only - 34 - 14,108 $ - $ 85% $135.91 N/A Subtotal 2,306 10,907 1,001,753 1,469,820 $ 5,244,769 $ -- -- Total 16,381 63,203 3,185,706 4,354,582 $ 17,887,444 $ -- --
1. Consumption, accounts and EDUs from Source File: Customer Data 23_24.2. Estimated sewage volume is annual water consumption multiplied by the discharge factor.3. Fixed charges are designed to collect 20% of the total revenue requirement. For residential customers, the charges are per dwelling unit. For non-residential customers, the charges are per account.4. Volumetric charges are designed to collect 80% of the total revenue requirement.
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CITY OF SANTA MONICA
WASTEWATER RATE STUDYWastewater Cost of Service AnalysisPreliminary Draft - Do Not Cite or Distribute NBS - Local Government SolutionsWeb: www.nbsgov.com Toll-Free:800.676.7516 COSA - Sewer Rates, 28 of 30
CITY OF SANTA MONICA
WASTEWATER RATE STUDYWastewater Rate DevelopmentTABLE 33 : CURRENT VS. PROPOSED WASTEWATER RATES (BI-MONTHLY) FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
% Increase in Annual Rate Revenue: 7.00% 7.00% 7.00% 6.00% 6.00% Residential ($/Dwelling Unit)
Single Family $19.27 $22.20 $23.76 $25.42 $26.94 $28.56MFR: Duplex + Triplex $7.76 $8.88 $9.51 $10.17 $10.78 $11.43MFR: Fourplex + Larger $5.85 $6.72 $7.19 $7.69 $8.15 $8.64MFR : Individually metered $9.41 $11.03 $11.80 $12.63 $13.39 $14.19 Non-Residential ($/Account)
MFR : Mixed Use $188.39 $217.04 $232.24 $248.49 $263.40 $279.21Commercial - Low $55.06 $62.14 $66.49 $71.14 $75.41 $79.93Commercial - Medium $117.07 $139.39 $149.14 $159.58 $169.16 $179.31Commercial - High $294.27 $360.09 $385.30 $412.27 $437.00 $463.22Institutional $88.78 $100.45 $107.48 $115.00 $121.90 $129.22Church/Schools $56.62 $63.82 $68.29 $73.07 $77.45 $82.10Misc Industrial $108.46 $129.27 $138.32 $148.00 $156.88 $166.29Wastewater Only $128.54 $135.91 $145.43 $155.61 $164.94 $174.84 Fixed Charges ($/bi-monthly)
Wastewater Rate Schedule Current
Rates
Proposed Wastewater Rates
Prepared by NBSwww.nbsgov.com | 800.676.7516
Sewer Current & Proposed Rates, 29 of 30
5/28/2025
CITY OF SANTA MONICA
WASTEWATER RATE STUDYWastewater Rate DevelopmentTABLE 34 : CURRENT VS. PROPOSED WASTEWATER RATES (BI-MONTHLY) FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30
% Increase in Annual Rate Revenue: 7.00% 7.00% 7.00% 6.00% 6.00% Residential
Single Family $4.65 85% $4.92 $5.27 $5.63 $5.97 $6.33MFR: Duplex + Triplex $4.65 90% $4.92 $5.27 $5.63 $5.97 $6.33MFR: Fourplex + Larger $4.65 97% $4.92 $5.27 $5.63 $5.97 $6.33MFR : Individually metered $4.65 99% $4.92 $5.27 $5.63 $5.97 $6.33 Non-Residential
MFR : Mixed Use $4.65 95% $4.92 $5.27 $5.63 $5.97 $6.33Commercial - Low $4.24 93% $4.43 $4.74 $5.07 $5.38 $5.70Commercial - Medium $5.55 94% $6.27 $6.71 $7.18 $7.61 $8.07Commercial - High $6.50 95% $7.73 $8.27 $8.85 $9.38 $9.95Institutional $4.19 82% $4.29 $4.59 $4.91 $5.20 $5.52Church/Schools $4.19 81% $4.90 $5.24 $5.61 $5.94 $6.30Misc Industrial $5.16 88% $5.68 $6.07 $6.50 $6.89 $7.30Wastewater Only -- 85% -- -- -- -- -- Volumetric Charges ($/hcf of average winter water consumption) Discharge
Factor
Wastewater Rate Schedule Current
Rates
Proposed Wastewater Rates
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Sewer Current & Proposed Rates, 30 of 30
5/28/2025