Clean. Reliable. Essential. Every day.
sonomawater.org
FY 2023-2024
Proposed Budget and Rates
Water Transmission System
Lynne Rosselli
ADMINISTRATIVE SERVICES
DIVISION MANAGER
[email protected]
Jake Spaulding
FINANCE MANAGER
[email protected]
1 2
Transparent and collaborative process to bring
rates to Board of Directors by end of April
Sonoma
Water Board
of Directors
(April)
Water
Advisory
Committee
(April)
Water
Contractor
Boards &
Councils
(March)
Technical
Advisory
Committee
(Jan-March)
sonomawater.org
4 Budget includes multiple water transmission
system activities and funds
• Operations and Maintenance
• Four Subfunds
• Five Capital Funds
• Debt Service Funds
sonomawater.org
5 Challenges
• Aging Infrastructure
• Maintenance Needs
• Increased Repairs
• Natural Hazard Vulnerabilities
6 Bennett Valley Fault Crossing
Ely Booster Pump Station Flood Mitigation
RDS Pump and Motor Control Center Replacement
Seismic Retrofit of Storage Tanks
Wilfred Booster Station
$6.34 million budgeted for hazard mitigation
projects to reduce risks
7 $5.94 million budgeted for other capital projects
to increase resiliency
Kawana-Ralphine SBS Pipeline Acquisition
(SE Greenway)
Mirabel/Wohler Storage Building
Occidental Road and Sebastopol Road Wells
Ralphine Tanks Flow Thru Conversion
Warm Springs Dam Hydroturbine Retrofit
Wohler Bridge Fiber Optic Cable
Total FY23-24 Capital Budget
including Hazard Mitigation Projects:
$12.28M
8 $40.4 million budgeted for operations and maintenance to protect, improve and maintain system reliability
Projects
Aqueduct Cathodic Protection
Collector Well, Pump, Pipeline, Valve Rehabilitations/Replacements Emergency Inventory Procurement
Tank Recoats & Tank Maintenance Program
Studies
DeMuth Property Hydrogeologic Investigation
Groundwater Banking Feasibility Study
Regional Water Supply Resiliency Study
Transmission System Modeling & Condition Assessments Programs 9 $9.78 million for Biological Opinion, Water
Supply Planning and Water Conservation
Expenditures compared to FY 22-23
10 FY22-23 FY23-24
Budget
(in Millions)
Budget
(in Millions)
Change
(in Millions)
Operations and Maintenance $38.68 $40.41 $1.73
Capital Projects $13.25 $12.28 ($0.97)
BO Compliance, Water Supply
Planning, Water Conservation $13.89 $9.78 ($4.11)
Debt Service $6.01 $5.83 ($0.18)
Totals $71.83 $68.30 ($3.53)
Grants, Use of Fund Balance,
and Bond Proceeds $15.31 $18.15 $2.84
11 Operations and
Maintenance
$40.41 Million,
59%
Capital Projects
$12.28 Million,
18%
BO
Compliance,
Water Supply
Planning,
Water
Conservation
$9.78 Million,
14%
Debt Service
$5.83 Million,
9%
FY 23-24 Budgeted Expenditures Grants, Bond
Proceeds, and Use of
Fund Balance
$18.15 Million
Example of how rates are
calculated
Cost of Operations
and Maintenance
Water Sold =
Cost of Water
(Dollars per acre-foot)
Water Sold = Lesser of:
Average of last 3
years annual
water deliveries
Last 12 months
of actual water
deliveries
or
41,847 AF
41,847 AF
$49,090,000 $1,173/ Acre
Foot
45,128 AF
12 sonomawater.org
13 Result:
Rate increase
dropped from
over 20% to
10.56%
Total cost per
gallon is
$0.004
Steps taken to reduce budget and rate
Deferred non-
routine
maintenance
projects = $2.44
million
Use of grants, bond
proceeds,
and fund balance =
$18.15 million
Water contractors
further reduced rates
by cutting
discretionary
aqueduct capital
charges
sonomawater.org
Proposed Rates for FY 23-24
14 Charge / Aqueduct Santa Rosa Petaluma Sonoma
Deliveries (Acre-Feet) 41,847
O&M $903.30 $903.30 $903.30
Water Management Planning $0.00 $0.00 $0.00
Watershed Planning & Restoration $35.96 $35.96 $35.96
Recycled Water and Local Supply $0.00 $0.00 $0.00
Water Conservation $54.08 $54.08 $54.08
Total O&M $993.34 $993.34 $993.34
Storage & Common Bond/Loan Charges $168.75 $168.75 $168.75 Sonoma Aqueduct Bond/Loan Charge $151.68
Prime Contractors $1,162.09 $1,162.09 $1,313.77
Discretionary Charges
Capital Charges - to build fund balance
for future projects $11.00 $0.00 $34.90
Prime Contractors $11.00 $0.00 $34.90
Total Prime Contractors $1,173.09 $1,162.09 $1,348.67
Total Overall Increase: 10.56% 9.42% 10.56%
2023 wholesale water rates per Acre-Foot
15 $-
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
$1,600
$1,700
$1,800
$1,900
$2,000
$2,100
$2,200
Sonoma County
Water Agency
Santa Clara Valley
Water District
Zone 7 Water
Agency
(Pleasanton,
Livermore)
San Francisco
Public Utilities
Commission
Contra Costa
Water District
16 Long Range Financial Plan
Estimated $272.5 Million in Projects to 2030
Capital Projects on Santa Rosa Aqueduct Estimated Costs (in Millions)
Santa Rosa Creek Crossing Seismic Hazard Mitigation $11.5 Water Contractors Pay a Share of these
Estimated Costs
Estimated Costs
(in Millions)
Hazard Mitigation Projects $64.4
Resiliency Projects $70.8
Maintenance Projects $124.0
Biological Opinion Dry Creek Habitat Enhancement $1.8
17 Long Range Financial Plan
Example Santa Rosa Aqueduct Rate Scenario
2024 2025 2026 2027 2028 2029 2030
Estimated Rate per Acre-Foot 1,173 1,306 1,409 1,498 1,557 1,620 1,685 Estimated Rate Increase 10.6% 11.3% 7.9% 6.3% 4.0% 4.0% 4.0% 0 600
1,200
1,800
Rate per Acre-Foot
Fiscal Year
• Assumes Water Demand Growth of 1.5% based on 2020 Deliveries to 56,000 AF in 2035. Higher Deliveries would reduce rates.
• Assumes no Grant Funding. Grant Funding would reduce rates. • Rates affected by Inflation, $7 Million more in project costs annually compared to last fiscal year, and 3 years of Drought.
Santa Rosa Water Budget Impacts
• 10.56% increase = $2.5m increase
– $750k unplanned increase
– Projected 5% increase in volume purchased
• 11.3% increase (projected) = $3.2m increase
– $1.8m unplanned increase
– Additional 5% increase in volume purchased
• Current long range financial plan
incorporates 6% increase
• Covered by fund balance
18 Customer Impacts
• No impact next two years
– Coverage for additional expenditure from fund
balance
– Rates are set for next two years
• Adjustment to future rate cycle
– Increase in water rates estimated at 5%
– Local expenditures will be additional
19 sonomawater.org
• Presentations upon Request to City and
Town Councils, and Water District Boards
in March
• Water Advisory Committee Vote – April 3
• Adoption by Sonoma Water’s Board – April
18 Next steps
20 sonomawater.org
Lynne Rosselli
Administrative Services Division Manager
[email protected]
Jake Spaulding
Finance Manager
[email protected]
21