Clean. Reliable. Essential. Every day.
sonomawater.org
FY 2024-2025
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
• Fully Volumetric Rate
• Low Water Deliveries
• Aging Infrastructure
• Maintenance Needs
• Increased Repairs
• Natural Hazard Vulnerabilities
6 Bennett Valley Fault Crossing
Ely Booster Pump Station Flood Mitigation
Collector 3 and 5 Liquefaction Mitigation
RDS Pump and Motor Control Center Replacement
Seismic Retrofit of Storage Tanks
Wilfred Booster Station
$8.46 million budgeted for hazard mitigation
projects to reduce risks
7 $7.20 million budgeted for other capital projects
to increase resiliency
Kawana-Ralphine SBS Pipeline
Mirabel/Wohler Storage Building
Mirabel Fiber Resiliency
Occidental Road and Sebastopol Road Wells
Ralphine Tanks Flow Thru Conversion
Warm Springs Dam Hydroturbine Retrofit
Water System Treatment Upgrades
Wohler Bridge Fiber Optic Cable
Total FY24-25 Capital Budget
including Hazard Mitigation Projects:
$15.66M
8 $45.41 million budgeted for operations and maintenance to protect, improve and maintain system reliability
Projects
Aqueduct Cathodic Protection
Collector Well, Vault, Pump, Pipeline, Valve Rehabilitations/Replacements Emergency Inventory Procurement
SCADA Improvements
Tank Recoats & Tank Maintenance Program
Studies
Arc Flash Studies
DeMuth Property Hydrogeologic Investigation
Groundwater Banking Feasibility Study
Regional Water Supply Resiliency Study
Transmission System Master Plan, Modeling & Condition Assessments Programs
9 $7.53 million for Biological Opinion, Water
Supply Planning and Water Conservation
Expenditures compared to FY 23-24
10 FY23-24 FY24-25
Budget
(in Millions)
Budget
(in Millions)
Change
(in Millions)
Operations and Maintenance $40.41 $45.41 $5.00
Capital Projects $12.28 $15.66 $3.39
BO Compliance, Water Supply
Planning, Water Conservation $9.78 $7.53 ($2.25)
Debt Service $5.83 $5.83 $0.00
Totals $68.30 $74.43 $6.14
Grants, Use of Fund Balance,
and Bond Proceeds $18.15 $18.13 ($0.02)
11 Operations
and
Maintenance
$45.41 Million,
61%
Capital
Projects
$15.66 Million,
21%
BO Compliance,
Water Supply
Planning, Water
Conservation
$7.53 Million, 10%
Debt Service
$5.83 Million,
8%
FY 24-25 Budgeted Expenditures
Grants, Bond Proceeds,
and Use of Fund Balance
$18.13 Million
Example of how rates are
calculated
Cost of Operations
and Maintenance
Water Sold =
Cost of Water
(Dollars per acre-foot)
Water Sold: Restructured Agreement requires use of the Lesser amount. Due to the drought, Sonoma Water recommended and WAC approved using 3-year annual average for FY24/25.
Average of last 3
years annual
water deliveries
Last 12 months
of actual water
deliveries
or
40,844 AF
42,826 AF
$55,204,000 $1,289/ Acre
Foot
42,826 AF
12 sonomawater.org
13 Deliveries and Rates
Due to the prescribed fully volumetric rate, budgeted
deliveries have a significant impact on rate increases.
Scenario Deliveries AF
Difference
Rate
Increase
(SR AQ)
12-Month Actuals 40,844 -1,982 14.58%
3-Year Annual Ave
(FY24/25 Budget) 42,826 0 9.88%
44,500 AF 44,500 1,674 5.92%
sonomawater.org
14 Result:
Rate increase
dropped from
over 14.57% to
9.88%
Total cost per
gallon is
$0.004
Steps taken to reduce budget and rate
Deferred non-
routine
maintenance
projects = $8.9
million
Use of grants, bond
proceeds,
and fund balance =
$18.13 million
Budgeted off the
3-year annual
average rather
than the 12-month
actuals
sonomawater.org
Proposed Rates for FY 24-25
15 Charge / Aqueduct Santa Rosa Petaluma Sonoma
Deliveries (Acre-Feet) 42,826
O&M $1,015.39 $1,015.39 $1,015.39
Water Management Planning $0.35 $0.35 $0.35
Watershed Planning & Restoration $40.04 $40.04 $40.04
Recycled Water and Local Supply $0.00 $0.00 $0.00
Water Conservation $59.55 $59.55 $59.55
Total O&M $1,115.33 $1,115.33 $1,115.33
Storage & Common Bond/Loan Charges $162.69 $162.69 $162.69 Sonoma Aqueduct Bond/Loan Charge $145.49
Prime Contractors $1,278.02 $1,278.02 $1,423,51
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 $1,289.02 $1,278.02 $1,458.41
Total Overall Increase: 9.88% 9.98% 8.14%
16 Long Range Financial Plan
Example Santa Rosa Aqueduct Rate Scenario
• Assumes Water Demand Growth of 2% based on FY 2024 Budgeted Deliveries of 41,847 AF. Santa Rosa AQ Deliveries: 16,600 AF to 17,970 AF. Higher Deliveries would reduce rates.
• Estimated 9% growth in O&M Expenses and 4% growth in capital project costs. $55M more in Common Facilities Project Costs compared to FY 2023. • Rates affected by Inflation and 3 Years of Drought resulting in Lower Deliveries. 2026 2027 2028 2029 2030
Estimated Rate per Acre-Foot 1,431 1,588 1,763 1,957 2,172 Estimated Rate Increase 11.7% 11.7% 11.2% 11.3% 11.0%
1,000
1,400
1,800
2,200
2,600
Rate per Acre-Foot
Fiscal Year
2024 wholesale water rates per Acre-Foot
17 $-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Sonoma County
Water Agency
Zone 7 Water
Agency
(Pleasanton,
Livermore)
Santa Clara Valley
Water District
Contra Costa
Water District
San Francisco
Public Utilities
Commission
Santa Rosa Water Budget Impacts
• 9.88% increase = $1.8m increase
– $513k unplanned increase
– Projected 1% growth
• 14.57% increase (initial proposal) = $2.8m
increase
– $1.5m unplanned increase
– Projected 1% growth
• Current rate schedule incorporates 6%
increase
• Lower CIP appropriations to balance budget
18 Customer Impacts
• No additional impacts next fiscal year
– Rates already set for FY 2024/25
– Initiating rate study for next multi-year rate
schedule
• Impact to next rate cycle
– Rate impact estimated to be 4.7% due to last
fiscal year’s and next fiscal year’s Sonoma Water
rate increase
– Increasing O&M costs and deferred maintenance
will be additional increase
– Need to increase CIP investment will be
additional increase
19 sonomawater.org
• Presentations upon Request to City and
Town Councils, and Water District Boards
in March
• Water Advisory Committee Vote – April 8
• Adoption by Sonoma Water’s Board – April
16 Next steps
20 sonomawater.org
Value of water: A brief video on the value of our water supply We are Sonoma Water: Where your water comes from
Water storage tank maintenance: A brief video on how we are working to keep our water storage facilities upgraded, reliable for today and future generations Maintaining the Sonoma booster station: Keeping the drinking water flowing to Sonoma, Valley of the Moon Water District one booster station at a time! Aqueduct corrosion protection program: A brief video on work to combat corrosion in our aqueduct
Russian River Aqueduct Crossing: Ensuring safe delivery of drinking water Dry Creek habitat restoration: Protecting our natural pipeline, habitat Sonoma Water Videos
Investing in our infrastructure
Avaiable in English and Spanish at
www.youtube.com/@sonomawater/videos
21 sonomawater.org
Lynne Rosselli
Administrative Services Division Manager
[email protected]
Jake Spaulding
Finance Manager
[email protected]
22