BPU
Budget
Subcommittee
Fiscal Year 2024/25 Preliminary Review
February 27, 2024
1 Nick Harvey
Acting Deputy Director Administration
Fund Overview
• Water
• Wastewater
• Regional
• Storm Water
Water Enterprise Funding
Water Enterprise Fiscal Year 2022-23
• Funded by
• Rates – $43.6m
• Approximately 54,000 water accounts
• Water usage and fixed rates
• Varied tiers
• Fees – $5.2m
• Demand fees
• Miscellaneous fees
3 Wastewater Enterprise Funding
Wastewater Enterprise Fiscal Year 2022-23
• Funded by
• Rates – $70.2m
• Approximately 50,000 sewer accounts
• Sewer usage and fixed rates
• Single tier rate – varies by strength of discharge
• Fees – $7.2m
• 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
• Capital Improvement Program (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 2023/24 - $39.98 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
• 2023/24
• $169 M
• $103M Operations &
Maintenance (O&M)
• $38M Capital Improvement
Projects (CIP)
• $28M Debt Service
• Majority of debt service in the
Regional Fund
9 Annual Budget - Storm Water Enterprise
• 2023/24
• $5.5M
• $3.3M Operations & Maintenance
(O&M)
• $2.2M Capital Improvement
Projects (CIP)
• $480K Storm Water funded
• $1.72M outside funding sources
10 11
Water 2023/24 O&M Budget Distribution by
Expenses
Total O&M
Water, Wastewater,
Regional
$102.7M
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
• No COLAs per Finance
• Insurance
• Electricity
• Water Purchase
• Software as a Service (SaaS)
• Staffing Changes
• New Waste Water Treatment Supervisor (Reclamation Supervisor) - Regional • New Trucked Waste Coordinator - Regional
13 Staff Assumptions
• Water and Wastewater use projected to increase 1%
• 1% growth assumption, flat demand
• 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 • Growth only, no demand increase
Volume of water increasing by 1%
• Tentatively 14.57%
Sonoma Water rate increase
Revenue
16 Water Revenue Increasing
• Increasing volume 1%
• Rate increase 4%
Sewer Revenue Increasing
• Rate increase 2%
• More stable than water due to sewer caps
Regional Revenues
• Trucked waste tipping revenues increasing
• Downward adjustments made to Interest and
Miscellaneous Revenues
Reserves
as of June 30,2023
17 • Operating
• $1,846,792
• Catastrophic
• $6,800,000
• Undesignated
• $13,684,695
• ($3.4 Million)
• Rate Stabilization
• $1,000,000
• Operating
• $6,053,551
• Catastrophic
• $1,700,000
• Refund Reserve
• $2,853,197
• +$240,612
• Geysers
• $1,250,000
• Operating
• $5,223,341
• Catastrophic
• $5,750,000
• Undesignated
• $14,892,243
• ($6.4 Million)
Water Wastewater Regional CIP Funding
• Planned Funding
• Water - $15,068,705
• Wastewater - $13,910,415
• Regional - $11,000,000
18 Budget Schedule
• BPU – March 21st
• Sonoma Water Rate Increase
• City Council – March 26th
• Sonoma Water Rate Increase
• Regional Partners – February 9th, March 14th & 3rd meeting (TBD) if needed • BPU Budget Subcommittee – March 19th
• BPU – March 21st
• O&M, CIP and Regional Study Session
• BPU – April 4th
• Budget Recommendation to City Council
• City Council – April 16th
• Preliminary approval of Regional Budget
• City Council – May 7th & 8th
• Budget Study Sessions
• City Council – June 18th
• Budget Adoption Hearings
DISCUSSION /
QUESTIONS?
20 CONNECT WITH US!
CALL: 707.543.4200
EMAIL: SRWATER@SRCITY .ORG
VISIT: SRCITY .ORG/WATER
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