BPU
Budget
Subcommittee
Fiscal Year 2023/24 Preliminary Review
February 23, 2023
1 Kimberly Zunino
Deputy Director Administration
Nick Harvey
Budget and Financial Analysis Manager
Fund Overview
• Water
• Wastewater
• Regional
• Storm Water
Water Enterprise Funding
Water Enterprise Fiscal Year 2021-22
• Funded by
• Rates – $44.3m
• Approximately 54,000 water accounts
• Water usage and fixed rates
• Varied tiers
• Fees – $5.9m
• Demand fees
• Miscellaneous fees
3 Wastewater Enterprise Funding
Wastewater Enterprise Fiscal Year 2021-22
• Funded by
• Rates – $69.5m
• Approximately 50,000 sewer accounts
• Sewer usage and fixed rates
• Single tier rate – varies by strength of discharge
• Fees – $6.6m
• Demand fees
• South Park Sanitation maintenance
• Miscellaneous fees
4 Regional Water Reuse Funding
Regional Enterprise
• Funded by five partner agencies
• Operating costs distributed based on flow
• Debt service payments are calculated based on when debt was incurred and type of project
• CIP costs distributed per the Partner Agreement
• Santa Rosa’s share is paid by the Wastewater Fund
5 Storm Water Funding
Storm Water Enterprise
• In 1996, City Council added Title 16 to the City Code creating a storm water enterprise
• To comply with the MS4 National Pollutant Discharge Elimination System (NPDES) permit requirements
• To reduce flooding, property damage, erosion, and storm water degradation in the City
• Annual parcel assessment for creek restoration, water quality improvement, and drainage improvements
• Supplemental funding provided by City’s General Fund (increasingly limited) • Capital Improvement Program (CIP) supplemental funding from Capital Facilities Fees, Gas Tax, and Grants
6 Storm Water Assessment
• Funding used for regulatory compliance
• Funding is insufficient for infrastructure improvements • Funding split is Storm Water 47%, Creeks 53%
• Annual escalator based on Consumer Price Index (CPI)
• FY 2022/23 - $37.83 per equivalent residential unit billed with property taxes by Sonoma County Assessor
7 Regulatory Requirements
• Water and sewer rate payer funding governed by Proposition 218 • May not intermingle funds
• May not subsidize customers
• Must charge for cost for services
• Rates approved through public hearing process
• Regional funding
• Santa Rosa pays from sewer rate payer funds
• Governed by the Subregional Agreement
• Storm Water funding
• Allowed for both Storm Water and Creeks
• Vote required to increase other than approved CPI
Annual Budget - Water Enterprises
• 2022/23
• $154 M
• $90M Operations &
Maintenance (O&M)
• $36M Capital Improvement
Projects (CIP)
• $28M Debt Service
• Majority of debt service in the
Regional Fund
9 Annual Budget - Storm Water Enterprise
• 2022/23
• $4.7M
• $3.3M Operations & Maintenance
(O&M)
• $1.4M Capital Improvement Projects
(CIP)
• $550k enterprise fund
• $850k other funding sources
10 11
Water 2022/23 O&M Budget Distribution by
Expenses
Total O&M
Water, Wastewater,
Regional
$90M
Storm Water $3.3M
Budget
Overview
12 Expected/Known Increases
Staff Assumptions
Purchase of Water
Projected Revenues
Reserves
Preliminary CIP Funding
Budget Schedule
Expenditure Increases
• Salary Increases
• 2.5% increase July 2023
• Costs of Chemicals
• Electricity
• City Overhead
• Vehicle Costs
• Staffing Changes
• New Utility Systems Supervisor - Water
• New Wastewater Operations Supervisor -Regional
• New Quality Control Associate – Storm Water
13 Staff Assumptions
• Water projected to increase 5%
• Based on historical drought bounce back
• Wastewater use will remain flat
• Development will stay stable
• Rates will increase per current schedule
14 July 2021 July 2022 July 2023 July 2024
Water Usage 2% 3% 3% 4%
Water Fixed 2% 3% 3% 4%
Sewer Usage 2% 2% 2% 2%
Sewer Fixed 2% 2% 2% 2%
Purchase
of Water
15 • Based on historical use after drought
Volume of water increasing by 5%
• Tentatively 10.5%
Sonoma Water rate increase
Revenue
16 Water Revenue Increasing
• Increasing volume 5% – use is variable
• Rate increase 3%
• Demand fee increase – additional development
Sewer Revenue Increasing
• Rate increase 2%
• More stable than water due to sewer caps
• Demand fee increase (deferred payment $5m)
Regional Revenues
• High strength tipping increasing
• Geysers and dairy loan payments expire
Reserves
as of June 30,2022
17 • Operating
• $1,785,606
• Catastrophic
• $6,800,000
• Undesignated
• $17,076,249
• Rate Stabilization
• $1,000,000
• Operating
• $5,407,401
• Catastrophic
• $1,700,000
• Refund Reserve
• $2,612,586
• Geysers
• $1,250,000
• Operating
• $5,001,284
• Catastrophic
• $5,750,000
• Undesignated
• $21,293,185
Water Wastewater Regional
CIP Funding
• Planned Funding
• Water - $14,629,811
• Wastewater - $13,505,257
• Regional - $10,000,000
18 Budget Schedule
• BPU – March 16th
• Sonoma Water Rate Increase
• City Council – March 28th
• Sonoma Water Rate Increase
• Regional Partners – February 9th, March 9th & April 9th • BPU Budget Subcommittee – March TBD
• BPU – April 6th
• O&M, CIP and Regional Study Session
• BPU – April 20th
• Budget Recommendation to City Council
• City Council – April 25th
• Preliminary approval of Regional Budget
• City Council – May 8th & 9th
• Budget Study Sessions
• City Council – June 20th
• Budget Adoption
DISCUSSION /
QUESTIONS?
20 CONNECT WITH US!
CALL: 707.543.4200
EMAIL: SRWATER@SRCITY .ORG
VISIT: SRCITY .ORG/WATER
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