UTILITY SERVICE RATE PLAN UPDATE
- 2 -
APPROVED BY THE CITY ATTORNEY
Not Applicable
ATTACHMENTS
1. City of Shafter Utility Service Rate Plan Update
CITY OF SHAFTER
UTILITY SERVICE RATE PLAN UPDATE
1 Prepared by:
Public Works Department
Administrative Services Department
Raftelis Financial Consultants
March 18, 2025
Background
2 • Water
• Wells/Tanks
• Pipelines/valves/hydrants
• Wastewater
• Treatment plant
• Pipelines/manholes/lift stations
City owns and operates two utilities funded by
monthly service rates
Solid Waste fully franchised
Last rate adjustment: July, 2021
Raftelis Financial Consultants awarded rate study:
October, 2023
Preliminary Council update: June, 2024
Challenges
3 • Labor
• Regulatory
• PG&E
Revenues are not keeping up with
costs
• Replacing aging infrastructure
• Wells
• Tanks
• Meters
• Fire hydrants
Vital capital improvements have
insufficient funds
Strategies
4 Meet obligations and objectives while
minimizing economic impact
Recovery plan -8 to 10 years
-Stretch revenues and costs
-Loans
Prepare a five-year rate plan to kick
start the recovery plan
Proposed Water Revenue Adjustment
FYE 2026
(July 1, 2025)
FYE 2027
(July 1, 2026)
FYE 2028
(July 1, 2027)
FYE 2029
(July 1, 2028
FYE 2030
(July 1, 2029
Revenue Adjustment 9% 9% 9% 4% 4%
5 $2.9
$1.6
$0.8
$3.3
$1.1
$2.0
$3.2
$4.7
$6.7
$8.2
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
Millions
Ending Fund Balance
Ending Balance 25% Annual O&M O&M + Capital Reserve
($2)
$0
$2
$4
$6
$8
$10
$12
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
Millions
Financial Plan
O&M Expenses Debt Service Rate Funded CIP
Net Cash Current Revenues Proposed Revenues
Proposed Sewer Revenue Adjustment
FYE 2026
(July 1, 2025)
FYE 2027
(July 1, 2026)
FYE 2028
(July 1, 2027)
FYE 2029
(July 1, 2028)
FYE 2030
(July 1, 2029)
Revenue Adjustment 15% 15% 15% 7% 7%
6 $11.3 $12.6 $14.3
$16.9
$20.1
$37.3
$34.2
$23.4
$17.9
$2.5
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
Millions
Ending Fund Balance
Ending Balance 25% Annual O&M O&M + Capital Reserve
($1)
$0
$1
$2
$3
$4
$5
$6
$7
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
Millions
Financial Plan
Operating Expenses Debt Service Rate & Grant Funded CIP Net Cash Current Revenues Proposed Revenue
Water Bill Impacts (3/4” meter or smaller)
7 Description Usage (gallons) Current Bill Proposed Bill Difference - $ Low Usage 7,000 $50.41 $55.70 $5.29
Average Usage 15,000 $57.77 $63.70 $5.93
High Usage 25,000 $66.97 $73.70 $6.73
$50.41
$57.77
$66.97
$55.70
$63.70
$73.70
$0
$10
$20
$30
$40
$50
$60
$70
$80
Low Usage Average Usage High Usage
Current Bill Proposed Bill
Sewer Bill Impacts
8 Customer Class Current Bill Proposed Bill Difference - $ Single Family Residential $29.92 $34.48 $4.56
Fast Food $52.89 $60.95 $8.06
Medical Office (6 rooms) $79.50 $91.62 $12.12
Restaurant (62 seats) $123.60 $142.20 $18.60
Car Wash (4 stalls) $191.80 $221.04 $29.24
$29.92
$52.89
$79.50
$127.72
$191.80
$34.48
$60.95
$91.62
$146.94
$221.04
$0
$50
$100
$150
$200
$250
Single Family Residential Fast Food Medical Office (6 rooms) Restaurants (62 seats) Car Wash (4 stalls) Current Bill Proposed Bill
$78.93
$84.89
$86.88
$90.86
$95.18
$111.50
$120.40
$146.81
$147.26
$177.53
$196.97
$0 $50 $100 $150 $200 $250
Taft
Shafter (Existing)
McFarland
Lamont
Shafter (Proposed)
Wasco
Arvin
Tehachapi
California City
Rosamond
Golden Hills
Water Sewer
Peer utility residential typical total bill survey
3/4” tap, 12,000 gallons water usage; 5,000 gallons of flow 9
Proposed
Schedule
10 March 2025
Initiate Prop 218 process
Notice hearings and
workshops
May 2025 Public workshop
June 2025 Protest hearing
July 2025 Five-year rate plan goes
into effect
11 Questions?