CITY COUNCIL MEETING AGENDA April 18, 2023
CITY COUNCIL MEETING AGENDA
City Council Chambers
4488 Red Bluff Street
Shasta Lake. CA 96019
Tuesday, April 18, at 6:00 PM
Mayor: Greg Watkins
Vice Mayor: Janice Powell
Council Members: Tena Eisenbeisz, Justin Jones, Pamelyn Morgan
OTHER WAYS TO PARTICIPATE IN THE MEETING
• Watch a livestream of the meeting online or view the recording any time after the meeting concludes at the following: cityofshastalake.org/meetings
• Submit public comment by mail or email addressed to City Clerk, City of Shasta Lake, PO Box 777, Shasta Lake, CA 96019 or [email protected]. Mailed and emailed comments must be received one day prior to the meeting to be included.
5:40 PM CLOSED SESSION CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION.
Significant exposure to litigation pursuant to subdivision (b) of California Government Code Section 54956.9. One potential case.
6:00 PM CALL TO ORDER – REGULAR MEETING:
Call to order (please place electronic devices on silent)
OATH OF OFFICE AND SEATING OF NEWLY ELECTED COUNCIL MEMBER, TENA EISENBEISZ Statement for the record of Council Members present or absent Pledge of Allegiance
Invocation
The Brown Act prohibits the Council from taking action on any item not placed on the Agenda in most cases. The Brown Act requires any non-confidential documents or writings distributed to a majority of the City Council less than 72 hours before a regular meeting to be made available to members of the public at the same time they are distributed.
Should supplemental materials to be evaluated in the decision-making process be made available to the members of the legislative body at the meeting, seven (7) copies must be provided to the City Clerk who will distribute them.
Councilmembers are encouraged to contact the City Manager prior to the meeting with questions or concerns regarding any item on the Agenda so that their questions and concerns can be adequately addressed at the meeting.
Agenda packets are available for public review at City Hall, 4477 Main Street, Shasta Lake, CA during normal business hours of 7:00 a.m. to 4:00 p.m. weekdays, excluding holidays.
In Compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call (530) 275-7407. Notification 48 hours prior to the meeting is requested to enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II).
CITY COUNCIL MEETING AGENDA April 18, 2023
AWARDS & RECOGNITIONS:
PRESENTATIONS:
COMMISSION, COMMITTEE, AND OUTSIDE AGENCY REPORTS:
PUBLIC COMMENT:
This time is set aside for citizens to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the regular agenda, please address the Council when that item is open for public comment. Each speaker is allocated three (3) minutes to speak. Speakers may not cede their time. Comments should be limited to matters within the jurisdiction of the City. Council discussion or action cannot be taken on items not listed on the agenda other than to receive comments. Speaker forms are available from the City Clerk, 4477 Main Street, Shasta Lake, on the City’s website, or at the back of the meeting hall. If you have documents to present to members of Council, please provide a minimum of seven copies.
CONSENT AGENDA:
The items listed under the Consent Agenda are considered routine business and will be voted on together by one motion unless a Council Member requests a specific item to be removed and discussed separately.
1. Acceptance of the Minutes of the April 4, 2023 regular meeting. (page1)
2. Resolution accepting the Toyon Water Plant Demolition Project and authorizing the filing of a Notice of Completion. (page 3)
3. Resolution adopting a list of projects for fiscal year 2023-2024 funded by SB 1: The Road Repair and Accountability Act of 2017.(page 5)
4. Resolution authorizing the City Manager to execute and submit grant and loan applications and related documents through the State Water Resources Control Board Clean Water State Revolving fund. (Page 33)
5. Annual Resolutions for Deer Creek Manor Subdivision Assessment Districts:
a) Resolution Initiating Proceedings for the Levy and Collection of Assessments Commencing in fiscal Year 2023-24 of the Deer Creek Manor Landscaping and Lighting District and ordering the preparation of an Engineer’s Report in connection herewith.
CITY COUNCIL MEETING AGENDA April 18, 2023
b) Resolution Preliminarily Approving the Engineer’s Report Regarding Deer Creek Manor Landscaping and Lighting District and the Levy and Collection of Assessments Commencing with fiscal year 2023-24.
c) Resolution Declaring the City’s Intention to Order the Levy and Collection of Assessments Commencing in fiscal year 2023-24 of the Deer Creek Manor Landscaping and Lighting District and Appointing a Time and Place for the Public Hearing Protests. d) Resolution Initiating Proceedings for the Levy and Collection of Assessments Commencing in fiscal year 2023-24 of the Deer Creek Manor Drainage Maintenance District and ordering the preparation of an Engineer’s Report in connection herewith. e) Resolution Preliminarily Approving the Engineer’s Report Regarding the Deer Creek Manor Drainage Maintenance District and the Levy and Collection of Assessments Commencing with Fiscal Year 2023-24.
f) Resolution Declaring its Intention to Order the Levy and Collection of Assessments Commencing in Fiscal Year 2023-24 of the Deer Creek Manor Drainage Maintenance District and Appointing a Time and Place for the Public Hearing Protests.
PUBLIC HEARINGS:
REGULAR AGENDA:
6. Discussion and possible action to appoint a new Planning Commissioner for a vacant seat with a term expiration February 2026. (page 89)
7. Discussion and possible action on a Resolution accepting the results of the Water Utility Rate Study Update completed by Pace Engineering, Inc., direct staff to prepare public notification of the proposed rates in accordance with Proposition 218, and to set a public hearing for consideration of adoption of the proposed rates on June 20, 2023. (page 100)
8. Discussion and possible action on a Resolution authorizing the City Manager to execute a contract with the McConnell Foundation to purchase up to 350 acre feet of water for $53.25 per acre foot for the 2023 water year. (page 199)
9. STAFF COMMENTS:
10. CITY COUNCIL COMMENTS AND REPORTS:
This is the time set aside for Council Members, who may so desire, to give brief comments or reports concerning City matters. The City Council may not enter into discussion on matters reported.
Statements made by individual Council Members should not be interpreted as a statement of the City Council. The City Council only takes action by majority vote.
CITY COUNCIL MEETING AGENDA April 18, 2023
• Brief reports by members of the Council regarding correspondence, events and/or meetings attended, and upcoming meetings/events.
• Suggestions/motions for future agenda items.
• In compliance with Assembly Bill 1234, Council will report on attendance at conferences/meetings/events where expenses are reimbursed by the City.
ADJOURNMENT:
Meetings are broadcast on the Wednesday following the meeting at 6:00 PM and the following Friday at 2:00 PM on Charter Channel 181. Videos of meetings are also available through the City website: www.cityofshastalake.org
MEETING OF THE CITY OF SHASTA LAKE CITY COUNCIL
MINUTES OF THE REGULAR MEETING
HELD TUESDAY, APRIL 4, 2023 AT THE
CITY COUNCIL CHAMBERS, 4488 RED BLUFF ST, SHASTA LAKE, CALIFORNIA
66:00 PM CALL TO ORDER - Regular Session
Mayor Watkins convened the regular meeting at 6:05 PM
Council Members present: Jones, Morgan, Powell, Watkins Council Members absent: none
Pledge & invocation
AWARDS AND RECOGNITIONS
Proclamation for Fair Housing Month, April 2023 was presented to Katie Sears from Hill Country, who gave an update on Housing projects and programs operated by Hill Country.
Proclamation for Child Abuse Awareness Month, April 2023.
Proclamation for Week of the Young Child.
PRESENTATIONS:
COMMISSION, COMMITTEE, AND OUTSIDE AGENCY REPORTS
Ann Morningstar reported on the Mosquito and Vector Control District and spoke about the recent Shasta Dam Blvd clean-up event.
Public Comment:
Jim Mark spoke regarding body-cameras and term-limits.
CONSENT AGENDA
1. Acceptance of the Minutes of the March 21, 2023 regular meeting.
2. Resolution CC-2023-14 accepting the Certified Final Results of Votes Cast from the Shasta County Clerk/Registrar of Voters for the March 7, 2023, Special Election.
3. Resolution CC-2023-15 accepting the annual review of the Development Agreement between the City of Shasta Lake and Mountain Properties, Inc. (Developer) and finding that developer has complied in good faith with the terms and conditions of the Development Agreement.
4. Information item:
Checks, E-payments, and wires:
03/02/2023 $919,668.45
03/09/2023 $2,804,808.87
Payrolls:
3/24/2023 $181,683.02
1 Minutes – April 4, 2023
Motion/Vote:
By motion made/seconded (Morgan/Powell), and carried, the consent agenda was approved.
PUBLIC HEARINGS None
REGULAR AGENDA
5. Discussion and possible action on a Resolution approving a Disposition, Development, and Loan Agreement with Shasta Lake Downtown Housing, LP, a California Limited Partnership, for the Affordable Housing and Sustainable Communities Program for the project “Shasta Lake Downtown Revitalization Project” and authorizing the City Manager to execute all documents related to this agreement on behalf of the City.
Public Comment: Charles Fleming asked who at the City is responsible for monitoring the project. Ann Morningstar expressed concerns over parking.
Motion/Vote:
By motion made/seconded (Morgan/Jones), and carried, Resolution CC-2023-16 was approved.
COMMUNICATIONS
Staff Comments
City Council Comments
ADJOURNMENT
With no further business, Mayor Watkins adjourned the meeting at 8:25 pm.
_____________________________
TONI M. COATES, CMC, City Clerk
2 Report and Recommendations 2 Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Will Bond, City Engineer/Public Works Director
DATE: April 18, 2023
SUBJECT: Authorization to file a Notice of Completion
Toyon Water Plant Demolition - Bid No. 2023-06
FILE NO.: AG-825
RECOMMENDATION:
Staff requests that the City Council consider accepting the project as complete and authorize the filing of a Notice of Completion for the Toyon Water Plant Demolition project - 2023-06.
BACKGROUND:
On December 20, 2022, the City Council approved resolution CC-2022-113 authorizing the City Manager to enter into a contract with Leckey Land Clearing for the purposes of performing the above project.
Staff has determined that the work specified in the contract has been completed and is in substantial conformance with the Plans and Specifications. Therefore, staff recommends that the Council accept the Project and authorize the filing of a Notice of Completion at the Shasta County Recorder’s Office.
FISCAL IMPACTS:
Awarded construction contract: $ 139,680.00
Approved expenditure not to exceed: $ 160,000.00
Total project construction cost: $ 139,680.00
This project was funded through budgeted water utility funds (510-340).
ATTACHMENTS:
Resolution
DISTRIBUTION:
City Council
3 RESOLUTION CC 2023-xx
________________________________________________________________________________
A RESOLUTION OF THE CITY OF SHASTA LAKE CITY COUNCIL TO ACCEPT THE
TOYON WATER PLANT DEMOLITION PROJECT AND AUTHORIZE THE FILING OF A
NOTICE OF COMPLETION
________________________________________________________________________________ WHEREAS, the City entered into a contract with Leckey Land Clearing for the performance of the Toyon Water Plant Demolition project; and
WHEREAS, Leckey Land Clearing has completed the project to the satisfaction of City staff.
NOW, THEREFORE BE IT RESOLVED THAT the City of Shasta Lake City Council hereby accepts the Toyon Water Plant Demolition project (2023-06) as complete and authorizes staff to file a Notice of Completion with the Shasta County Recorder’s Office.
PASSED, APPROVED, AND ADOPTED this 18th day of April 2023, by the following vote:
AYES:
NOES:
ABSENT:
GREG WATKINS, MAYOR
ATTEST:
TONI M. COATES, CMC
City Clerk
4 Report and Recommendations 3 Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Will Bond, City Engineer / Public Works Director
DATE: April 18, 2023
SUBJECT: 2023-2024 SB1 Project List Adoption
FILE NO.: New
RECOMMENDATION:
Staff requests that the City Council adopt the SB1 2023-2024 project list.
BACKGROUND:
On April 28, 2017, Governor Brown signed Senate Bill (SB) 1, which is known as the Road Repair and Accountability Act of 2017. This bill was intended to address basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system, SB 1: increased per gallon fuel excise taxes; increased diesel fuel sales taxes and vehicle registration fees; and provided for inflationary adjustments to tax rates in future years. Beginning November 1, 2017, the State Controller (Controller) began depositing various portions of this new funding into the newly created Road Maintenance and Rehabilitation Account (RMRA). A percentage of this new RMRA funding was apportioned by formula to eligible cities and counties for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system.
For the 2023-2024 FY, the City is scheduled to receive approximately $255,508.00 in SB1 RMRA funding. In order to comply with RMRA funding requirements, staff has prepared the attached 2023- 2024 project list.
The project list includes the following projects:
Westside Area Street Improvements 2023 – This project was identified in the 2022-2023 FY RMRA list. Project generally consists of grinding and patching, pavement fabric or mat and HMA placement, utility box and manhole adjustment to grade, and thermoplastic striping and marking on various streets in the area immediately west of the railroad tracks in Shasta Lake, including but not limited to Shasta Park neighborhood, Pancake Hill area north and south of SR-151. Staff has advertised and 5 is expecting the project to be constructed in Summer 2023. This project will have a useful life of at least 10 years.
Moody Creek Bridge Replacement Project – This project was identified in the 2022-2023 FY RMRA list. Project generally consists of completing the civil and structural engineering, environmental, rightof-way, and PSE work related to the rehabilitation and/or replacement of the Moody Creek Bridge on Cascade Boulevard. This project entered the design phase in 2018. Construction of this project will likely be completed after 2023. This project will have a useful life of at least 50 years.
FISCAL IMPACTS:
In addition to RMRA funds, this project is funded by currently budgeted transportation funds.
ATTACHMENTS:
Resolution, 2023 Street Improvements exhibit
DISTRIBUTION:
City Council
6 RESOLUTION CC-2023-XX
___________________________________________________________________________
A RESOLUTION OF THE CITY OF SHASTA LAKE CITY COUNCIL ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2023-2024 FUNDED BY SB1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017
_________________________________________________________________________________________ WHEREAS, The City of Shasta Lake (City) wishes to comply with all State requirements to receive Road Maintenance and Rehabilitation Account (RMRA) funding; and WHEREAS, Senate Bill 1 (SB1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and signed into law by the Governor in April 2017 to address significant multi-modal transportation funding shortfalls statewide; and WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and
WHEREAS, the City must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and
WHEREAS, the City will receive an estimated $255,508.00 in RMRA funding in Fiscal Year 2023-24 from SB 1; and
WHEREAS, this is the seventh year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and
WHEREAS, the City intends to use SB1 revenues in combination with funding from other sources to complete road maintenance projects as established by the City’s Street Paving Policy; and WHEREAS, the funding from SB1 will help the City maintain and rehabilitate a variety of streets and bridges throughout the City.
NOW, THEREFORE, BE IT RESOLVED THAT the City of Shasta Lake City Council finds as follows:
1. The foregoing recitals are true and correct.
2. The following previously proposed and adopted projects may also utilize FY 2023-24 RMRA revenues. With the relisting of these projects in the adopted fiscal year resolution Shasta Lake City is reaffirming to the public and the State of out intent to fund these projects with RMRA:
Westside Area Street Improvements 2023 – Project generally consists of grinding and patching, pavement fabric or mat and HMA placement, utility box and manhole adjustment to grade, and thermoplastic striping and marking on various streets in the area immediately west of the railroad tracks in Shasta Lake, including but not limited to Shasta Park neighborhood, Pancake Hill area north and south of SR-151. Staff has advertised and is expecting the project to be constructed in Summer 2023.. This project will have a useful life of at least 10 years. 7 Moody Creek Bridge Replacement Project – Project generally consists of completing the civil and structural engineering, environmental, right-of-way, and PSE work related to the rehabilitation and/or replacement of the Moody Creek Bridge on Cascade Boulevard. This project entered the design phase in 2018. Construction of this project will likely be completed after 2023. This project will have a useful life of at least 50 years.
PASSED, APPROVED, AND ADOPTED this 18th day of April 2023, by the following vote:
AYES:
NOES:
ABSENT:
GREG WATKINS, MAYOR
ATTEST:
TONI M. COATES, CMC
City Clerk
8 ROUGE RD
SHASTA DAM BLVD
OLIVER ST
FOREST ST
CENTRAL AVE
PICKARD ST
WILLOWS ST
ALTUS ST
SHASTA PARK DR
PANCAKE HILL DR
PARK ST
PROVO AVE
CONCHAS ST RED AVE
HAZEL ST
GIVAN ST
SHASTA PARK DR
PINE FLAT ST
THOMAS ST
CEDAR ST
HOLLY ST
RED BLUFF ST
OLIVE ST
LINDA LN
POPLAR ST
CYPRESS AVE
ROUGE RD
PENSACOLA ST CENTRAL AVE
NORTH BLVD
I
Map Produced: April 10, 2023
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Feet
Street Improvements 2023
City of Shasta Lake
Street Paving
Street segments included in project
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Scope of Work Exhibit
This is not a survey product.
9 Report and Recommendations 4 Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Will Bond, City Engineer/Public Works Director
DATE: April 18, 2023
SUBJECT: Authorizing Resolution: Inflow & Infiltration Reduction Project FILE NO.: New
SUMMARY:
Staff requests that the City Council consider authorizing the City Manager to execute and submit grant and loan applications and related documents to the State Water Resources Control Board Clean Water State Revolving Fund (CWSRF) for a planning grant for the Inflow & Infiltration (I&I) Reduction Project.
BACKGROUND:
Public Works staff is interested in pursuing planning grant related to I&I reduction in our City’s wastewater collection system.
The City’s wastewater collection system serves approximately 3,800 residential, commercial, industrial, and institutional wastewater connections over about 7,000 acres. The collection system consists of approximately 54.3 miles of gravity sewers, 4.1 miles of force main, and 6 lift stations.
The lift stations convey raw wastewater to the wastewater treatment facility where it is treated and either released for Title 22 reuse purposes or discharged to Churn Creek. A vast majority of the City’s gravity collection system consists of vitrified clay pipe (VCP) originally installed in the mid1970s. Nearly all pipe installed since then consists of polyvinyl chloride (PVC) pipe. Sizes range from 6” to 21”.
During the wet weather season, the City’s nearly 50-year old collection system experiences groundwater infiltration through various defects in the system, including leaking pipe joints, cracks in the pipes, or deteriorating manholes. Inflow occurs when surface water enters the collection system from storm drain cross connections and open connections (such as manhole covers situated below grade or in flooded creek channels). The current I&I peaking factor is approximately 7.38 (i.e. normal system flows can go up by a maximum sustained factor of about
7.38 during storm events). Increased flows place extreme demands on the City’s wastewater lift stations and treatment plant.
10 In 2020 staff advertised a request for proposals from qualified engineering consultants to evaluate the City’s wastewater collection system to understand where I&I in the collection system was being produced. In November of 2020, Council authorized staff to enter into a contract with PACE Engineering via CC-20-80 for engineering services to evaluate the system over a two year period, place flow monitoring devices and make recommendations to reduce the amount of I&I entering the wastewater collection system. Based on the study (attached), PACE identified six sub-basins that produce as much as 52% of our I&I. If the City is awarded a CWSRF grant, staff will prepare a request for proposals from qualified consultants for design services.
Funding is available through CWSRF for planning, design and construction activities and staff is seeking council approval to authorize the City Manager to submit a CWSRF planning grant application for this project.
FISCAL IMPACTS:
If the grant application is successful the planning, surveying, design & environmental portion will be paid for by the CWSRF grant.
ATTACHMENTS:
Resolution
Final I&I Monitoring Project Report – PACE (August 2022) DISTRIBUTION:
City Council
11 AUTHORIZING RESOLUTION CC-2023-
RESOLUTION NO:________________
________________________________________________________________________________
A RESOLUTION OF THE CITY OF SHASTA LAKE CITY COUNCIL
AUTHORIZING THE CITY MANAGER EXECUTE AND SUBMIT GRANT AND LOAN
APPLICATIONS AND RELATED DOCUMENTS THROUGH THE STATE WATER RESOURCES
CONTROL BOARD CLEAN WATER STATE REVOLVING FUND
________________________________________________________________________________ WHEREAS; it has been determined there is a need to seek financial assistance from the State of California Clean Water State Revolving Fund to reduce excessive inflow and infiltration in the collection system.
RESOLVED BY the City Council of the City of Shasta Lake (the “Entity”), AS FOLLOWS:
The City Manager, Jessaca Lugo (the “Authorized Representative”) or designee is hereby authorized and directed to sign and file, for and on behalf of the Entity, a Financial Assistance Application for a financing agreement from the State Water Resources Control Board for the planning, design, and construction of the Inflow and Infiltration Reduction Project (the “Project”).
This Authorized Representative, or his/her designee, is designated to provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance agreement from the State Water Resources Control Board and any amendments or changes thereto.
The Authorized Representative, or his/her designee, is designated to represent the Entity in carrying out the Entity’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the Entity and compliance with applicable state and federal laws.
CERTIFICATION
I do hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the City of Shasta Lake City Council held on _______ __, 2023. (Name, Signature, and Seal of the Clerk or Authorized Record Keeper of the Governing Board of the Agency) 12 CITY OF SHASTA LAKE
INFILTRATION AND INFLOW
MONITORING PROJECT REPORT
AUGUST 2022
JOB NO. 110.97
8/25/22
13 i
TABLE OF CONTENTS
SECTION PAGE
I. BACKGROUND................................................................................................................. 1 INFILTRATION AND INFLOW ........................................................................................ 1 ADDRESSING INFILTRATION AND INFLOW ................................................................ 2 II. INFILTRATION AND INFLOW MONITORING EFFORTS AND ANALYSIS..................... 3 III. RESULTS AND RECOMMENDATIONS.......................................................................... 5 BASINS........................................................................................................................... 5 INFILTRATION AND INFLOW REDUCTION PROGRAM ............................................... 7 LATERALS AND HOUSE CONNECTION INFILTRATION AND INFLOW....................... 8 TABLES – AT END OF TEXT
Table 1 – I&I Monitoring Results
Table 2 – Recommended Improvements Preliminary Cost Estimate FIGURES – AT END OF TEXT
Figure 1 – I&I Monitoring Results
Figure 2 – Recommended Improvements – East
Figure 3 – Recommended Improvements – West
14 ii
ABBREVIATIONS
The following abbreviations are used in this report:
AC Acres
ADWF Average Dry Weather Flow
CCTV Closed Circuit Television
CIPP Cured-in-Place Pipe
City City of Shasta Lake
CVRWQCB Central Valley Regional Water Quality Control Board Gal Gallons
GPD Gallons per Day
I-5 Interstate 5
I&I Infiltration and Inflow
LF Linear Feet
LS Lift Station
MGD Million Gallons per Day
PACE PACE Engineering, Inc.
PVC Polyvinyl Chloride
PWWF Peak Wet Weather Flow
EPA Environmental Protection Agency
VCP Vitrified Clay Pipe
WWMP Wastewater Master Plan
WWTP Wastewater Treatment Plant
15 City of Shasta Lake 1
Infiltration and Inflow Monitoring Project Report
CITY OF SHASTA LAKE
INFILTRATION AND INFLOW MONITORING
PROJECT REPORT
AUGUST 2022
I. BACKGROUND
The City of Shasta Lake (City) owns, operates, and maintains a wastewater collection, treatment, and disposal system serving roughly 10,500 residents through approximately 3,425 connections.
Based on the 2016 Wastewater Master Plans (WWMPs), the wastewater system experiences an average dry weather flow (ADWF) of 0.65 million gallons per day (MGD) during the summer and a peak wet weather flow (PWWF) in excess of 4.80 MGD. The difference between these two flows is commonly referred to as infiltration and inflow (I&I).
INFILTRATION AND INFLOW
Infiltration refers to groundwater that leaks into cracks and breaks in the sewer pipes and manholes. Inflow refers to stormwater that enters the sewer system directly from such sources as illicit roof drain connections, cross connections to storm drains, surface drainage that directly enters a broken sewer, cleanouts without lids, or leaky manhole covers, etc. Infiltration tends to be prolonged leakage until the groundwater table subsides. Inflow tends to be more noticeable during a storm event when surface water is present. Since the two are very hard to separate, it is common practice to simply refer to the entire leakage problem as I&I. There are also two types of I&I that are significant to the costs of a sewer system.
I&I has a significant impact on sizing of sewers in a collection system and can increase costs significantly. The total I&I rate that occurs at the worst condition is referred to as peak I&I, and although this may last for only a short time, such as minutes in a small system or an hour or so in larger systems, wastewater facilities must be sized to handle peak I&I. Thus, the size of wastewater collection and interceptor facilities are governed mainly by the combination of peak I&I and peak wastewater flow components, with I&I often being the largest component. The second type of I&I that affects the cost of a wastewater system is simply the total amount of I&I, usually referred to as annual I&I. This affects the annual operating costs, which include pumping, treating, and disposal of I&I.
16 City of Shasta Lake 2
Infiltration and Inflow Monitoring Project Report
It should be noted that sewers that leak in could also leak out. Although leaks that are flowing out tend to become plugged, significant outflow leakage can occur in leaky sewer systems, and this partially defeats the purpose of a sewer system, which is to collect and convey the wastewater in a manner that is not harmful to humans or the environment.
Although leakage out of the sewers is a potential health and pollution problem, leakage into the sewers is the most noticeable problem. Overflowing sewers and the periodic violations of the effluent discharge requirements could cause the Central Valley Regional Water Quality Control Board (CVRWQCB) to issue a Cease and Desist Order to the City. Further violations or failure to proceed with needed improvements could result in fines and a ban on new connections.
ADDRESSING INFILTRATION AND INFLOW
Addressing I&I will result in long-term savings to the City by reducing the volume of wastewater pumped to and treated at the Wastewater Treatment Plant (WWTP) and delaying or possibly eliminating the need for parallel or replacement sewers as well as lift station (LS) and WWTP capacity expansions. Expanding capacity of wastewater facilities are large expenditures that are often sized based on existing and future I&I flow rates; therefore, reducing I&I should be a priority investment for the City. Furthermore, industry experience has shown that installing relief sewers without correcting major sources of I&I relieves existing bottlenecks but will eventually result in even higher PWWF downstream. Sewer systems in poor condition continue to deteriorate, and, if not corrected, the volume of I&I only increases with time.
The City’s wastewater system currently experiences a PWWF that is over seven times the estimated ADWF, with roughly 86% of PWWF constituting I&I. These numbers confirm the system is plagued by a significant amount of I&I; therefore, identifying and addressing I&I sources is imperative. The first step of addressing I&I is to locate and quantify I&I sources, followed by the development and implementation of a prioritized list of capital improvements.
These improvements would include grouting of sewers and lateral joints; lining, pipe bursting, or replacing main line sewers and manholes; and addressing laterals by installing cleanouts as needed so specific laterals can be evaluated and repaired if necessary.
The vast majority of the City’s 54.3 miles of gravity sewers consist of vitrified clay pipe (VCP) installed in the 1970s. A VCP is a short‐length pipe resulting in numerous joints and is prone to excessive I&I. With such a large system to investigate, narrowing in on problem areas is step one. Using flow monitoring to collect and analyze I&I flow data at strategic locations in the collection system can quantify and identify the primary areas contributing the bulk of the I&I flows. 17 City of Shasta Lake 3
Infiltration and Inflow Monitoring Project Report
II. INFILTRATION AND INFLOW MONITORING EFFORTS AND ANALYSIS The City contracted with PACE Engineering, Inc. (PACE) to perform a systematic flow monitoring program starting in December 2020. The flow monitoring measured instantaneous wastewater flows at strategic manholes disbursed throughout the City’s collection system in order to estimate I&I flow rates. These monitoring manholes were selected based on upstream service areas, historical observed flows, flow isolation, and sewer size.
The flow monitoring effort consisted of installing twelve area-velocity flow meters in the collection system. These area-velocity flow meters recorded depth, velocity, and flow at five-minute intervals. In some cases, the measured flow would include the flow(s) measured in upstream monitoring stations; the upstream flows were subtracted from the flows of the downstream monitoring station to calculate the I&I in between the meters.
Flow monitoring started on December 10, 2020, and continued until March 16, 2021. Monitoring efforts were continued when wet weather conditions returned on October 19, 2021, and ended on May 30, 2022. During the monitoring effort, flow meter data was downloaded and analyzed by PACE staff after each wet weather event. This analysis provided the information needed for PACE staff to move the area-velocity flow meters into basins that showed high levels of I&I. By moving the flow meters into high I&I basins, flow data can be collected to narrow in on the highest I&I contributing areas. This process was repeated numerous times to focus in on the worst I&I regions.
The analysis of the flow meter data involved taking the peak 24-hour flow and subtracting the lowest 24-hour flow. This produced what was labelled “storm I&I.” This storm I&I value was assumed to be solely I&I that the collection system experienced during a rain event. This calculation, however, eliminated base infiltration, which is groundwater that seeps into the collection system outside of wet weather conditions. To calculate this value, the average flow recorded from 3:00 a.m. to 5:00 a.m. on the three lowest flow, dry-weather days was taken and then extrapolated for a 24-hour period. By taking the average flow recorded from 3:00 a.m. to 5:00 a.m., it is assumed that little to no domestic wastewater is present in the flow and all flow is infiltration. This base infiltration value was then added to the storm I&I to calculate the I&I for each basin.
18 City of Shasta Lake 4
Infiltration and Inflow Monitoring Project Report
The highest recorded rainfall during the flow monitoring program was approximately 2.61 inches of rainfall recorded on December 14, 2021, at the City’s Corporation Yard. This amount is well below a 1-year rain event and significantly less than a peak wet weather event (i.e., a 25-year rain event). In comparison, the National Oceanic and Atmospheric Administration’s National Weather Service has compiled historical rainfall data for the City of Shasta Lake area, and they have estimated that a 25-year rain event would have produced a 24-hour rainfall amount of
7.75 inches. Since the flow measurements that were taken in this study were not taken during peak wet weather conditions, the peak I&I flows that the collection system experiences cannot be quantified. However, there is sufficient data to determine the fraction of I&I that each monitored basin contributes. These fractions were used in analyzing the wastewater collection system as well as outlining an I&I reduction program.
The primary indication of the severity of the I&I conditions is the magnitude of the flows measured at the WWTP. During the flow monitoring, the WWTP flows peaked at approximately
2.86 MGD on December 16, 2021. This flow was significantly less than the PWWF of 4.8 MGD per the WWMP and the historical peak instantaneous flow of 5.0 MGD recorded on December 12, 2014. This is further proof that the monitoring did not measure peak flows that the collection system experiences during PWWFs. It is recommended that the City perform additional flow monitoring of the system in the future during peak wet weather conditions to collect data points that reflect the peak flows the collection system will handle. This additional monitoring should also include monitoring smaller-sized basins within the identified high I&I regions to determine the reaches that are the highest contributors to I&I. Determining the high I&I reaches will allow the City to investigate and mitigate potential cross-connections with storm drain infrastructure and target capital improvement projects to effectively eliminate major sources of I&I.
19 City of Shasta Lake 5
Infiltration and Inflow Monitoring Project Report
III. RESULTS AND RECOMMENDATIONS
It must be emphasized that the flow measurements that were taken during this period were not taken during peak wet weather conditions (i.e., a 25-year rain event). The City’s PWWF rate was determined to be 4.8 MGD in the WWMP; therefore, the flow rates were indexed to a PWWF of 4.8 MGD. This scaling may not be completely indicative of what actually occurs in the sewer system. However, the estimated I&I flow values shown in Table 1 are based on the best information available and were used in analyzing the wastewater collection system as well as developing I&I reduction projects.
Table 1 provides a complete summary of I&I for each basin, listing the amount of I&I in each basin, both measured and scaled to PWWF; a breakdown of I&I per acre as well as per linear foot of sewer main in the basin; and the percentage of the City’s I&I from each basin. It is recommended that the City perform additional wet weather monitoring of the system to verify these estimated rates and to better analyze the basins with high I&I flows. Additionally, it is recommended that that City perform closed circuit television (CCTV) inspection and smoke testing to identify specific I&I sources.
Based on the I&I observed, it has been determined that I&I below 10 gallons per linear feet of pipe per day (Gal/LF/Day) is an acceptable amount of I&I, 10 to 15 Gal/LF/Day is a moderate amount of I&I, 15 to 25 Gal/LF/Day is a high amount of I&I, and greater than 25 Gal/LF/Day is a severe amount of I&I. See Figure 1 for a map identifying each basin including relevant I&I information.
Table 1 and Figure 1 are color coded to distinguish the categories. The basins of most concern that should be the focus of future investigation and I&I reduction projects are the Salt Creek Basin, the Twin View Boulevard Basin, the Lower Deer Creek Manor Basin, the Oregon Avenue Basin, the Ashby Road Basin, the Los Flores Avenue Basin, and the Shasta Gateway Basin.
BASINS
Salt Creek Basin
The Salt Creek Basin, immediately upstream of LS 5, is the worst I&I basin in the City’s collection system. This basin alone contributes an estimated 0.77 MGD of I&I, which constitutes 19% of the City’s total I&I. The flow monitoring data indicates there is a significant infiltration component, as flows are slow to subside after rain events. This area of the collection system is split by Salt Creek, with sewer mains running under and adjacent to the creek. The main 20 City of Shasta Lake 6
Infiltration and Inflow Monitoring Project Report
interceptor line running through this basin is polyvinyl chloride (PVC) and was installed in 2008 with the remaining mains consisting of VCP. The sewer mains in this area should be CCTV inspected with attention given to the VCP in the vicinity of Salt Creek. These VCP mains in this basin are likely needing to be replaced or cured-in-place pipe (CIPP) lined to eliminate infiltration.
Twin View Boulevard Basin
The Twin View Boulevard Basin, comprising of the collection system on the eastside of Interstate 5 (I-5), is the second worst I&I basin and contributes 12% of the City’s total I&I. The data indicates there is a sizeable inflow source in the basin, as the flows quickly subside after rain events. The main trunk line in this basin is a VCP main that runs adjacent and crosses Salt Creek with many manholes in the flood zone. The main trunk main and immediate collection mains could be major sources of I&I.
It is recommended that investigative efforts such as smoke testing, CCTV, and flow monitoring should be conducted to identify sources of inflow and allow for more targeted I&I improvements.
Similar to the Salt Creek Basin, the VCP mains in the vicinity of Salt Creek should be prioritized for CCTV inspection with eventual replacement or CIPP lining to eliminate infiltration.
Lower Deer Creek Manor Basin
The Deer Creek Manor Basin, comprising of the collection system between LS 5 and I-5, is the third highest I&I contributing basin. Similar to the Twin View Boulevard Basin, the data suggests a sizeable inflow component in this basin. Additionally, the main trunk line in this basin is also a VCP main that runs adjacent and crosses Salt Creek with many manholes in the flood zone. The main trunk main and immediate collections could be major sources of I&I. It is recommended that the small amount of VCP mains in this basin should be smoke tested and CCTV inspected and replaced or CIPP lined.
Oregon Avenue Basin
The Oregon Avenue Basin, comprising of the collection system between Grand Coulee Boulevard and Nell Orr Street contributes approximately 6% of the City’s I&I. This basin has a large infiltration component and is bisected by a small drainage that is likely a source for groundwater. Therefore, it is recommended that further investigative efforts such as smoke testing, CCTV, and potentially additional flow monitoring be conducted to narrow in on the I&I sources and allow for more targeted I&I improvements.
21 City of Shasta Lake 7
Infiltration and Inflow Monitoring Project Report
Ashby Road and Los Flores Avenue Basins
The Ashby Road and Los Flores Avenue Basins, both comprising the collection system along Ashby Road between Pine Grove Avenue and Flower Street, are the fifth and sixth worst I&I basins, respectively. The data suggests that these basins experience a sizeable infiltration component. The main trunk line in these basins is a VCP main running in low-lying areas along a major drainage that could be sources of infiltration. It is recommended that the VCP mains in these basins be CCTV inspected to identify sources of I&I and be replaced or CIPP lined to eliminate infiltration.
Shasta Gateway Basin
There was a surprising amount of I&I in the Shasta Gateway Industrial Park, much more than was anticipated given the age and material of the collection system. With flows increasing from 14,000 gallons per day (GPD) on Monday, January 25, 2021, to over 51,000 GPD on Thursday, January 28. Looking at the data, the flow surge during the rainstorm quickly subsides and returns to just slightly higher than pre-storm flows the following week. The data indicates this is primarily inflow, so an area drain or gutter system could be tied into the sewer system. This definitely warrants further investigation, either visual inspection of the flows during a rainstorm or smoke testing.
INFILTRATION AND INFLOW REDUCTION PROGRAM
Figure 1 shows areas that contribute the highest I&I into the collection system. In particular, the Salt Creek Basin, the Twin View Boulevard Basin, the Lower Deer Creek Manor Basin, the Oregon Avenue Basin, the Ashby Road Basin, and the Los Flores Avenue Basin are all major contributors of I&I. It is on these initial I&I target areas that the City should focus its I&I reduction efforts, both in the laterals and the main sewers, over the next 20 years.
As with most I&I reduction programs, the initial I&I reduction tasks will be relatively easy to identify (e.g., broken sewer mains and leaking manholes) and relatively cost effective to correct.
Successive I&I reduction efforts tend to be much more difficult and expensive in terms of dollars per gallon of I&I removed. Although, CCTV inspection results will help the City identify which pipelines are deficient.
Table 1 does include preliminary cost estimates for projects targeting the high and moderate I&I basins. All costs include 30% for planning and engineering and 20% for contingency.
Estimated quantities within this table should be considered as an order of magnitude estimate for planning purposes. Costs are based upon the initial I&I monitoring previously described 22 City of Shasta Lake 8
Infiltration and Inflow Monitoring Project Report
herein. It is suggested subsequent I&I monitoring as well as CCTV inspection of mains and laterals be completed to verify the need for replacement in these I&I basins.
Table 2 is a preliminary cost estimate for a large I&I reduction project targeting all of the severe I&I basins. These severe I&I basins constitute approximately 13% of the City’s sewer collection system but contribute over 50% of the City’s total I&I. The proposed I&I reduction project improvements are shown on Figures 2 and 3.
Finally, any I&I reduction program that is performed should be verified by subsequent flow monitoring. Using the flow monitoring data generated for this report as a basis, subsequent flow monitoring data in those areas that have been rehabilitated will need to be gathered and compared to verify reductions in I&I. It is recommended the City perform such flow monitoring of the existing system at least every five years during PWWF events.
LATERALS AND HOUSE CONNECTION INFILTRATION AND INFLOW
The sewer connection from a residence to the City sewer main is separated into two parts.
Typically, the sewer pipe from the house to the property line and/or cleanout is called the “house connection,” and the sewer pipe from the property line and/or cleanout to the sewer main is called the sewer “lateral.” Currently, Section 13 of the City Municipal Code stipulates the property owner is responsible for the sewer connecting the house to the City’s sanitary sewer main. Presently, in order for the property owner to repair the sewer lateral within the public right-of-way, the property owner would be required to obtain an encroachment permit from the City.
For any I&I reduction program to be effective, improvements to leaky laterals and house connections are necessary in addition to improvements to collection sewer mains. There have been several studies that point to sewer laterals and house connections as contributors of up to half of all I&I entering a collection system.
In a study for the U.S. Environmental Protection Agency (EPA), Conklin (1981) noted that many sewer rehabilitation programs that did not address sewer laterals had a maximum I&I removal rate of about 30%. Furthermore, the EPA study also concluded that building connections and private sewer laterals contribute 50% of total I&I into the system. Therefore, without a committed effort by the City to correct I&I from laterals and house connections, the best that can be hoped for in any I&I reduction program with complete sewer main rehabilitation only is about a 30% reduction.
23 City of Shasta Lake 9
Infiltration and Inflow Monitoring Project Report
For the City to address I&I originating from laterals and house connections, it is recommended that the City incorporate lateral leakage testing into the Municipal Code. All lateral sewers should be tested by means approved by the City Engineer in the presence of the Director of Public Works or his deputy or those employed under him. All lines showing excessive leakage shall be repaired or replaced at the expense of the person doing the work and shall be done at the direction and to the satisfaction of the City Engineer.
It is recommended that a scheduled event should result in lateral testing and cleaning, such as the sale of property, a remodel building permit, or a reported blockage. Establishing a specific maximum rate of leakage from a house connection could be enforced at the time of property sale and be tested as part of a property resale inspection program. If the sewer lateral does not meet the leakage rate standard, the sale of the house could be contingent upon repair of the lateral. As a minimum, the City should consider having the private lateral CCTV inspected to determine any gross defects in the pipe that need to be corrected prior to sale. This program would be created through the adoption of a city ordinance.
Currently, cleanouts are required to be installed at the property line for all new laterals; however, it should be noted that much of the existing laterals lack cleanouts. A cleanout must be installed at the property line prior to an existing lateral being cleaned and tested. A critical part of any I&I reduction program is lateral cleanouts installed at the right-of-way or easement limit. A lateral cleanout serves as a point of access for servicing the sewer and as a “port” for visually inspecting, testing, or CCTV inspecting the sewer lateral in a more cost-effective manner. It is recommended that the City include lateral replacement within the right-of-way and cleanout installation in all sewer main replacement projects.
24 TABLES
25 Basin
I&I Flow
Rate
(Gal/Day)
Scaled I&I
Flow Rate
Sewer
Area
(AC)
Scaled I&I
Flow Rate
(Gal/Ac/Day)
Sewer
Length (LF)
Scaled I&I
Flow Rate
(Gal/LF/Day)
% of
City's
I&I
Cumulative
% of City's
I&I
Replacement
Cost
Cumulative
Replacement
Cost
Approximate
Cost/Gal of
I&I Removed
Salt Creek 474,529 772,470 42 18,533 8,249 93.6 18.6% 18.6% $3,463,300 $3,463,300 $4.48 Twin View 294,912 480,078 40 12,129 7,087 67.7 11.6% 30.2% $3,024,400 $6,487,700 $6.30Lower Deer Creek Manor 133,269 216,944 25 8,742 4,900 44.3 5.2% 35.4% $6,048,350 $12,536,050 $27.88Oregon Avenue 153,088 249,207 33 7,474 7,188 34.7 6.0% 41.4% $7,202,700 $19,738,750 $28.90Ashby Rd 126,333 205,654 41 5,027 7,258 28.3 5.0% 46.4% $6,039,800 $25,778,550 $29.37Los Flores 151,186 246,111 39 6,237 9,286 26.5 5.9% 52.3% $9,417,700 $35,196,250 $38.27Lassen Ave 62,406 101,589 19 5,399 4,079 24.9 2.4% 54.7% $3,700,000 $38,896,250 $36.42Blue Canyon Park 88,968 144,828 25 5,777 5,877 24.6 3.5% 58.2% $5,500,000 $44,396,250 $37.98LS No. 1 142,106 231,329 71 3,247 9,743 23.7 5.6% 63.8% $7,800,000 $52,196,250 $33.72Cascade Blvd 70,665 115,034 23 4,991 6,537 17.6 2.8% 66.6% $4,800,000 $56,996,250 $41.73Front St 91,009 148,151 44 3,374 9,313 15.9 3.6% 70.2% $8,600,000 $65,596,250 $58.05Akrich 71,724 116,757 49 2,396 8,351 14.0 2.8% 73.0% $7,600,000 $73,196,250 $65.09Craftsman 27,784 45,229 26 1,749 3,400 13.3 1.1% 74.1% $3,700,000 $76,896,250 $81.81Shasta Way 88,148 143,494 63 2,273 11,327 12.7 3.5% 77.5% $10,700,000 $87,596,250 $74.57Girvan St Basin 52,916 86,140 43 1,997 8,212 10.5 2.1% 79.6% $8,200,000 $95,796,250 $95.19N. Cascade Blvd 60,293 98,149 59 1,651 10,081 9.7 2.4% 82.0%Rouge Rd 63,082 102,689 55 1,860 10,940 9.4 2.5% 84.4%Shasta Gateway 49,754 80,992 90 897 9,071 8.9 2.0% 86.4%Coeur D'Alene 26,249 42,730 33 1,279 6,340 6.7 1.0% 87.4%Vallecito 122,842 199,970 199 1,005 32,125 6.2 4.8% 92.2%Upper Deer Creek Manor 15,934 25,939 39 664 5,841 4.4 0.6% 92.9%N. Washington 79,158 128,859 223 577 31,337 4.1 3.1% 96.0%Sierra Pacific 14,717 23,957 47 507 6,304 3.8 0.6% 96.5%Ostling 9,272 15,094 32 473 4,085 3.7 0.4% 96.9%S. Washington 32,054 52,179 121 430 23,531 2.2 1.3% 98.2%Windsor Estates 46,949 76,427 243 314 37,657 2.0 1.8% 100.0% Totals 2,549,348 4,150,000 1,726 288,118 100% $95,796,250 Table 1
I&I Monitoring Results
1. All costs in July 2022 dollars at an ENR index of 13,168.2. Replacement costs for severe I&I basins are detailed in Table 2.3. Replacement costs for high/medium I&I basins include basin‐wide replacement of all sewer mains and manholes, as well as an average of 40 linear feet of lateral for each parcel. All costs include 20% Construction Contingency and 30% for Planning, Engineering, and Other Indirect Costs. Costs do not account for previously installed PVC mains that are assumed to be a lower source of I&I.
Severe High Medium Low
I&I Monitoring Project
26 No. Item Quantity Unit Unit Cost1 Total Cost
1 Salt Creek Basin I&I Reduction
2 12" SS w/Class A1 Backfill 760 LF $430 $326,800
3 8" SS w/Class A3 Backfill 100 LF $250 $25,000
4 8" SS w/Class A1 Backfill 1000 LF $240 $240,000
5 6" SS w/Class A3 Backfill 1525 LF $236 $359,900
6 6" SS w/Class A1 Backfill 450 LF $225 $101,250
7 Manholes 12 EA $15,000 $180,000
8 Rod Holes 4 EA $4,000 $16,000
9 Replace Lateral w/Cleanout at Property Line 40 EA $13,000 $520,000 10 Connections to Existing System 5 EA $3,000 $15,000
11 Traffic Control 1 LS $28,000 $28,000
12 Bypass Pumping 1 LS $66,000 $66,000
13 Trench Sheeting & Shoring 1 LS $55,000 $55,000
14 $1,932,950
15 Lower Deer Creek Manor Basin I&I Reduction
16 12" SS w/Class A1 Backfill 1400 LF $430 $602,000
17 8" SS w/Class A5 Backfill 100 LF $275 $27,500
18 8" SS w/Class A3 Backfill 750 LF $250 $187,500
19 8" SS w/Class A1 Backfill 1650 LF $240 $396,000
20 Manholes 12 EA $15,000 $180,000
21 Rod Holes 2 EA $4,000 $8,000
22 Replace Lateral w/Cleanout at Property Line 12 EA $13,000 $156,000 23 Connections to Existing System 4 EA $3,000 $12,000
24 Traffic Control 1 LS $22,000 $22,000
25 Bypass Pumping 1 LS $53,000 $53,000
26 Trench Sheeting & Shoring 1 LS $44,000 $44,000
27 $1,688,000
28 Twin View Basin I&I Reduction
29 12" SS w/Class A3 Backfill 125 LF $460 $57,500
30 12" SS w/Class A1 Backfill 2500 LF $430 $1,075,000
31 8" SS w/Class A3 Backfill 1100 LF $250 $275,000
32 8" SS w/Class A1 Backfill 1600 LF $240 $384,000
33 6" SS w/Class A3 Backfill 1500 LF $235 $352,500
34 6" SS w/Class A1 Backfill 150 LF $225 $33,750
35 Manholes 16 EA $15,000 $240,000
36 Rod Holes 8 EA $4,000 $32,000
37 Replace Lateral w/Cleanout at Property Line 50 EA $13,000 $650,000 38 Connections to Existing System 2 EA $3,000 $6,000
39 Traffic Control 1 LS $72,000 $72,000
40 Bypass Pumping 1 LS $108,000 $108,000
41 Trench Sheeting & Shoring 1 LS $90,000 $90,000
42 $3,375,750
43 Oregon Avenue Basin I&I Reduction
44 8" SS w/Class A5 Backfill 800 LF $275 $220,000
45 8" SS w/Class A3 Backfill 2500 LF $250 $625,000
46 8" SS w/Class A1 Backfill 2000 LF $240 $480,000
47 6" SS w/Class A5 Backfill 50 LF $260 $13,000
48 6" SS w/Class A3 Backfill 1100 LF $235 $258,500
49 6" SS w/Class A1 Backfill 900 LF $225 $202,500
50 Manholes 17 EA $15,000 $255,000
51 Rod Holes 12 EA $4,000 $48,000
52 Replace Lateral w/Cleanout at Property Line 115 EA $13,000 $1,495,000 53 Connections to Existing System 1 EA $3,000 $3,000
54 Traffic Control 1 LS $180,000 $180,000
55 Bypass Pumping 1 LS $120,000 $120,000
56 Trench Sheeting & Shoring 1 LS $120,000 $120,000
57 $4,020,000
58 Ashby Road Basin I&I Reduction
59 12" SS w/Class A5 Backfill 4150 LF $480 $1,992,000
60 12" SS w/Class A1 Backfill 225 LF $430 $96,750
61 8" SS w/Class A3 Backfill 100 LF $250 $25,000
62 8" SS w/Class A1 Backfill 775 LF $240 $186,000
63 6" SS w/Class A3 Backfill 400 LF $235 $94,000
64 6" SS w/Class A1 Backfill 410 LF $225 $92,250
65 Manholes 20 EA $15,000 $300,000
66 Rod Holes 2 EA $4,000 $8,000
Subtotal Salt Creek Basin I&I Reduction Construction Cost Subtotal Lower Deer Creek Manor Basin I&I Reduction Construction Cost Subtotal Twin View Basin I&I Reduction Construction Cost Subtotal Oregon Avenue Basin I&I Reduction Construction Cost
RECOMMENDED IMPROVEMENTS
TABLE 2
I&I MONITORING PROJECT
PRELIMINARY COST ESTIMATE
Construction Costs
M:\Jobs\0110 City of Shasta Lake\0110.97 I&I Monitoring & Modeling Project\Phase 400 ‐ Data Analysis and Report\Tables\Table 2 ‐ Preliminary Cost Estimate.xlsx 27 No. Item Quantity Unit Unit Cost1 Total Cost
67 Replace Lateral w/Cleanout at Property Line 25 EA $13,000 $325,000 68 Connections to Existing System 6 EA $3,000 $18,000
69 Traffic Control 1 LS $57,000 $57,000
70 Bypass Pumping 1 LS $106,000 $106,000
71 Trench Sheeting & Shoring 1 LS $71,000 $71,000
72 $3,371,000
73 Los Flores Basin I&I Reduction
74 12" SS w/Class A5 Backfill 100 LF $480 $48,000
75 12" SS w/Class A1 Backfill 900 LF $430 $387,000
76 8" SS w/Class A5 Backfill 50 LF $275 $13,750
77 8" SS w/Class A3 Backfill 2000 LF $250 $500,000
78 8" SS w/Class A1 Backfill 1900 LF $240 $456,000
79 6" SS w/Class A5 Backfill 200 LF $260 $52,000
80 6" SS w/Class A3 Backfill 3800 LF $235 $893,000
81 6" SS w/Class A1 Backfill 700 LF $225 $157,500
82 Manholes 35 EA $15,000 $525,000
83 Rod Holes 12 EA $4,000 $48,000
84 Replace Lateral w/Cleanout at Property Line 130 EA $13,000 $1,690,000 85 Connections to Existing System 3 EA $3,000 $9,000
86 Traffic Control 1 LS $179,000 $179,000
87 Bypass Pumping 1 LS $149,000 $149,000
88 Trench Sheeting & Shoring 1 LS $149,000 $149,000
89 $5,256,300
90 $19,644,000
91 $5,102,000
92 $24,746,000
93 $25,000
94 $10,000
95 $100,000
96 $20,000
97 $50,000
98 $248,000
99 $1,980,000
100 $25,000
101 $2,458,000
102 $10,000
103 $10,000
104 $10,000
105 $40,000
106 $116,000
107 $747,000
108 $1,739,000
109 $78,000
110 $30,000
111 $80,000
112 $60,000
113 $13,000
114 $239,000
115 $3,172,000
116 $5,630,000
117 $28,157,000
118 $7,039,250
$35,196,250
Project Contingencies @ 20% of Construction Costs
TOTAL PROJECT COST
1. All costs in July 2022 dollars at an ENR index of 13,168.
CWSRF Planning Funding Coordination
11-Month Warranty Inspection
Environmental Services During Construction
Construction Survey Staking
Permits
Subtotal Ashby Road Basin I&I Reduction Construction Cost Subtotal Los Flores Basin I&I Reduction Construction Cost Design
Bidding, Contract Award & Execution Services
Inflation for Indirect Construction Costs to FY 2024/2025 @ 4% Per Year
SUBTOTAL INDIRECT CONSTRUCTION COSTS
TOTAL INDIRECT COSTS
Subtotal Project Cost
Post Construction Services
As-Built (Record) Drawings
Construction Administration/Engineering Services
Two (2) Resident Project Representative @ Full-time for 104 Weeks Labor Code Compliance
Construction Funding Application
SUBTOTAL INDIRECT PLANNING AND DESIGN COSTS
Indirect Construction Costs
CWSRF Construction Funding Coordination
Administration and Legal
Construction Funding Administration
Subtotal Construction Costs
Inflation Adder for Construction in 2025 @ 8% Per Year
TOTAL CONSTRUCTION COSTS
Planning and Design Costs
CWSRF Planning Grant Funding Application
Environmental Documentation
Engineering Report
Survey & Mapping
M:\Jobs\0110 City of Shasta Lake\0110.97 I&I Monitoring & Modeling Project\Phase 400 ‐ Data Analysis and Report\Tables\Table 2 ‐ Preliminary Cost Estimate.xlsx TABLE 2 continued
28 FIGURES
29 FRONT ST
PINE GROVE AVE
ASHBY RD
ASHBY RD
SHASTA DAM BLVD WASHINGTON AVE
VALLECITO ST MONTANA AVE CABELLO ST
GRAND COULEE BLVD
CASCADE BLVD
CASCADE BLVD
INTERSTATE 5
SHASTA DAM BLVD
LES MESA AVE CENTRAL VALLEY HIGH
SCHOOL SIERRA
PACIFIC
INDUSTRIES
KNAUF
FIBERGLASS
SHASTA
LAKE
SCHOOL
CASCADE BLVD OREGON AVE
BLACK CANYON RD
ROUGE RD
SHASTA PARK DR HARDENBROKE AVE MONTANA AVE
RED BLUFF ST
MAIN ST PANCAKE HILL DR NORTH BLVD
MEADE ST
TRINITY ST
AKRICH ST SMITH AVE
COUR D'ALENE AVE
GRAND OAKS ELEMENTARY
SCHOOL GRAND AVE
SHASTA WAY
CRAFTSMAN AVE
PARK ST AVINGTON AVE SIOUX DR VIRGINIA AVE
TWIN VIEW BLVD
INTERSTATE 5
AUTUMN HARVEST DR
WASHINGTON AVE MUSSEL SHOALS AVE
CHICO ST CITY HALL SMITH AVE
LOCH PL PINE GROVE AVE
N. WASHINGTON AVE
128,859 GAL/DAY
577 GAL/AC/DAY
4.1 GAL/LF/DAY
TWIN VIEW BASIN
480,078 GAL/DAY
12,129 GAL/AC/DAY
67.7 GAL/LF/DAY
CASCADE BLVD BASIN
115,034 GAL/DAY
4,991 GAL/AC/DAY
17.6 GAL/LF/DAY
SHASTA WAY BASIN
143,494 GAL/DAY
2,273 GAL/AC/DAY
12.7 GAL/LF/DAY
S. WASHINGTON BASIN
52,179 GAL/DAY
430 GAL/AC/DAY
2.2 GAL/LF/DAY
VALLECITO BASIN
199,970 GAL/DAY
1,005 GAL/AC/DAY
6.2 GAL/LF/DAY
SHASTA GATEWAY BASIN
80,992 GAL/DAY
897 GAL/AC/DAY
8.9 GAL/LF/DAY
ASHBY RD BASIN
205,654 GAL/DAY
5,027 GAL/AC/DAY
28.3 GAL/LF/DAY
WINDSOR ESTATES BASIN
76,427 GAL/DAY
314 GAL/AC/DAY
2.0 GAL/LF/DAY
FRONT ST BASIN
148,151 GAL/DAY
3,374 GAL/AC/DAY
15.9 GAL/LF/DAY
LS NO. 1 BASIN
231,329 GAL/DAY
3,247 GAL/AC/DAY
23.7 GAL/LF/DAY
SALT CREEK BASIN
772,470 GAL/DAY
18,533 GAL/AC/DAY
OSTLING BASIN 93.6 GAL/LF/DAY
15,094 GAL/DAY
473 GAL/AC/DAY
3.7GAL/LF/DAY
UPPER DEER CREEK
MANOR BASIN
25,939 GAL/DAY
664 GAL/AC/DAY
4.4 GAL/LF/DAY
AKRICH BASIN
116,757 GAL/DAY
2,396 GAL/AC/DAY
14.0 GAL/LF/DAY
N. CASCADE BLVD BASIN
97,539 GAL/DAY
1,641 GAL/AC/DAY
9.7 GAL/LF/DAY
OREGON AVE BASIN
249,207 GAL/DAY
7,474 GAL/AC/DAY
34.7 GAL/LF/DAY
BLUE CANYON PARK BASIN
144,828 GAL/DAY
5,777 GAL/AC/DAY
24.6 GAL/LF/DAY
GIRVAN ST BASIN
86,140 GAL/DAY
1,997 GAL/AC/DAY
10.5 GAL/LF/DAY
SIERRA PACIFIC BASIN
23,957 GAL/DAY
507 GAL/AC/DAY
3.8 GAL/LF/DAY
CRAFTSMAN BASIN
45,229 GAL/DAY
1,749 GAL/AC/DAY
13.3 GAL/LF/DAY
COEUR D'ALENE BASIN
42,730 GAL/DAY
1,279 GAL/AC/DAY
6.7 GAL/LF/DAY
ROUGE RD BASIN
102,689 GAL/DAY
1,860 GAL/AC/DAY
9.4 GAL/LF/DAY
LOS FLORES BASIN
246,111 GAL/DAY
6,237 GAL/AC/DAY
26.5 GAL/LF/DAY
LASSEN AVE BASIN
101,589 GAL/DAY
5,399 GAL/AC/DAY
24.9 GAL/LF/DAY
LS 4
LS 5
LS 3
LS 6
LS 2
CITY BOUNDARY
WWTP
LS 1
DRAINAGE, TYP
LOWER DEER CREEK
MANOR BASIN
216,944 GAL/DAY
8,742 GAL/AC/DAY
44.3 GAL/LF/DAY
FIGURE 1
DATE: 8/22
JOB #110.97
CITY OF SHASTA LAKE
I&I MONITORING PROJECT
I&I MONITORING RESULTS 1"=1,500'
HIGH I&I CONTRIBUTING BASINS
SEVERE I&I CONTRIBUTING BASINS
LEGEND
LOW I&I CONTRIBUTING BASINS
MEDIUM I&I CONTRIBUTING BASINS
30 SHASTA DAM BLVD
INTERSTATE 5
FORT PECK ST
WILLIAMETTE ST
VALLECITO ST
CHICO ST
MAIN ST
CABELLO ST
DEER CREEK RD
MONTANA AVE
HARDENBROOK AVE
MUSSEL SHOALS AVE
SMITH AVE
TRINITY ST
AUTUMN HARVEST WY
FRONT ST AKRICH ST VIRGINIA AVE LEONA AVE ALPINE ST CASCADE BLVD CASCADE BLVD PINE GROVE AVE
AVINGTON WY
OREGON ST
TWIN VIEW BLVD 12" 8"
8"
8"
12"
12" 8" 6"
6" 8"
6" 8"
6"
6" 8" 8" 8"
8" 6" 8" 8"
8"
8" 6" 6" 6" 6" 6"
6" 6"6" 8"
8"
6"8" 8"
6" 6" 8"
6"
6"
12" 12"8" 8" FIGURE 2 DATE: 8/22 JOB #110.97 CITY OF SHASTA LAKE I&I MONITORING PROJECT RECOMMENDED IMPROVEMENTS - EAST 1"=800' PROPOSED SEWER REPLACEMENTS, TYP
31 SHASTA DAM BLVD
FORT PECK ST
WILLIAMETTE ST
WILLOWS ST
PANCAKE HILL DR ALTUS ST
PROVO AVE
NORTH AVE
HOLLY ST
LASSEN AVE
MONTANA AVE
HARDENBROOK AVE
FRONT ST
ASHBY RD
WALTON AVE
CRAFTSMAN AVE
PINE GROVE AVE 8" 6"
6" 8" 12"
12"
12"
12"
12" 6"
12"
8" 6" 6" 6" 6" 6"
8"
8" 8"
6"
8"
6" 8"
12" FIGURE 3 DATE: 8/22 JOB #110.97 CITY OF SHASTA LAKE I&I MONITORING PROJECT RECOMMENDED IMPROVEMENTS - WEST 1"=600' PROPOSED SEWER REPLACEMENTS, TYP
32 Report and Recommendations 5 Reviewed and Approved
City Manager
AGENDA ITEM
City Council Meeting
TO: Jessaca Lugo, City Manager
FROM: Wendy Howard, Finance Director
DATE: April 12, 2023
SUBJECT: Deer Creek Manor Subdivision Assessment Districts Public Hearing FILE NO: A-150-700-134
RECOMMENDATION:
Staff recommends approval of the following Resolutions:
a) Resolution Initiating Proceedings for the Levy and Collection of Assessments Commencing in fiscal Year 2023-24 of the Deer Creek Manor Landscaping and Lighting District and ordering the preparation of an Engineer’s Report in connection herewith.
b) Resolution Preliminarily Approving the Engineer’s Report Regarding Deer Creek Manor Landscaping and Lighting District and the Levy and Collection of Assessments Commencing with fiscal year 2023-24.
c) Resolution Declaring the City’s Intention to Order the Levy and Collection of Assessments Commencing in fiscal year 2023-24 of the Deer Creek Manor Landscaping and Lighting District and Appointing a Time and Place for the Public Hearing Protests.
d) Resolution Initiating Proceedings for the Levy and Collection of Assessments Commencing in fiscal year 2023-24 of the Deer Creek Manor Drainage Maintenance District and ordering the preparation of an Engineer’s Report in connection herewith.
e) Resolution Preliminarily Approving the Engineer’s Report Regarding the Deer Creek Manor Drainage Maintenance District and the Levy and Collection of Assessments Commencing with Fiscal Year 2023-24.
33 f) Resolution Declaring its Intention to Order the Levy and Collection of Assessments Commencing in Fiscal Year 2023-24 of the Deer Creek Manor Drainage Maintenance District and Appointing a Time and Place for the Public Hearing Protests.
Adoption of the Resolutions is an annual requirement pursuant to state law.
The proposed time and place for the public hearing is Tuesday, May 2, 2023, 6:00 PM at the City Council Chambers.
Property owners will be mailed a notice of the proposed levy and the public hearing date and time.
BACKGROUND:
On June 19, 2007, Council adopted Resolutions related to the establishment of a Landscaping and Lighting District and Benefit Assessment District to provide a funding source for the maintenance of improvements within Phases 1-4 of the Deer Creek Manor Subdivision. As a condition of approval of the Deer Creek Manor Subdivision (Phases I, II, III and IV), designated open space, neighborhood parks, and retention/detention facilities must be maintained by a homeowner’s association or other funding/maintenance mechanism acceptable to the City. The Developers formed a Landscaping and Lighting District and Benefit Assessment District (Drainage Maintenance District) to provide for long-term maintenance.
ENGINEER’S REPORT
The Resolutions approving the Engineer’s reports are clear that Council is preliminarily approving the Reports. As allowed by state code, the Engineer’s Report may be amended at any time prior to the public hearing.
Landscaping and Lighting District
The District was formed pursuant to the provisions of the Landscaping and Lighting Act of 1972 (Section 22500 et seq. of the California Streets and Highways Code). The attached Engineer’s Report describes the District, the improvements, and the maximum amount for assessments to be levied against the properties commencing in fiscal year 2023-24 and the proposed applied rate for the fiscal year 2023-24.
The District provides for the continued operation and maintenance of street lighting, medians, parkways, slopes, open spaces and drainage basins. The attached Engineer’s Report provides items that may be included.
The maximum amount of the per-parcel assessment for this District is $548.98.
However, the applied rate for fiscal year 2023-24 is $255.00, unchanged from the prior fiscal year.
Commencing in each fiscal year thereafter, the maximum assessment rate established in the previous year will be adjusted by the greater of:
34 1. The percentage change in the Consumer Price Index reported by the local Consumer Price Index (CPI) of all Urban Consumers, San Francisco-Oakland-San Jose Area; or
2. Three percent (3%).
Drainage Maintenance District
This District was formed pursuant to the provisions of the Benefit Assessment Act of 1982 (Section 54703 et seq. of the California Government Code). The attached Engineer’s Report describes the District, the improvements, and the maximum amount for the assessments to be levied against properties commencing in fiscal year 2023-24.
The District provides for the continued operation and maintenance of drainage and flood control facilities. The attached Engineer’s Report provides items that may be included in this District.
The maximum amount of the per-parcel assessment for this District is $522.04 for the parcels.
However, the applied rate for fiscal year 2023-24 is $36.14, unchanged from the prior fiscal year.
Commencing in each fiscal year thereafter, the maximum assessment rate established in the previous year will be adjusted by the greater of:
1. The percentage change in the Consumer Price Index reported by the local Consumer Price Index (CPI) of all Urban Consumers, San FranciscoOakland-San Jose Area; or
2. Three percent (3%).
FISCAL IMPACTS:
None.
ATTACHMENTS:
• Resolution Initiating Proceedings for the Levy and Collection of Assessments for both the Landscaping and Lighting and the Drainage Maintenance Districts • Resolutions Declaring the City’s Intention to Order the Levy and Collection of Assessments and Appointing a Time and Place for the Public Hearing for both the Landscaping and Lighting and the Drainage Maintenance Districts • Resolutions Preliminarily Approving the Engineer’s Report for both the Landscaping and Lighting and the Drainage Maintenance Districts
• Engineer’s Report on the Landscaping and Lighting District • Engineer’s Report on the Drainage Maintenance District DISTRIBUTION:
City of Shasta Lake City Council
35 RESOLUTION NO. CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE,
COUNTY OF SHASTA, STATE OF CALIFORNIA INITIATING PROCEEDINGS FOR
THE ANNUAL LEVY AND COLLECTION OF ASSESSMENTS FOR DEER CREEK MANOR LANDSCAPING AND LIGHTING DISTRICT FOR FISCAL YEAR 2023-24 PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972, PART 2 OF DIVISION 15 OF THE STREETS AND HIGHWAYS CODE AND AS PROVIDED BY ARTICLE XIII D OF THE CALIFORNIA CONSTITUTION; AND ORDERING THE PREPARATION OF AN ENGINEER’S REPORT IN CONNECTION THEREWITH
THE CITY COUNCIL OF THE CITY OF SHASTA LAKE FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. The City Council hereby proposes to levy and collect annual assessments for the Deer Creek Manor Landscaping and Lighting District (hereinafter referred to as the “District”), and to levy and collect assessments against the lots and parcels of land within such District to pay for the costs and expenses of the improvements described in Section 3 hereof for the fiscal year commencing July 1, 2023 and ending June 30, 2024, pursuant to the Landscaping and Lighting Act of 1972, being Part 2 of Division 15 of the Streets and Highways Code (the "Act") and as provided by Article XIII D of the California Constitution.
Section 2. The general location and boundaries of the proposed District including the amendment to the boundaries is shown on maps on file in the office of the City Clerk, and is incorporated herein by reference, and open to public inspection. The designation of the existing District is as follows: “Deer Creek Manor Landscaping and Lighting District”.
Section 3. The proposed improvements may be briefly described as follows: the ongoing maintenance, operation and servicing of local landscaping and street lighting improvements established or installed in connection with development of properties within the District. The improvements may consist of all or a portion of the public landscaped areas, street lighting and appurtenant facilities within and adjacent to the District. These improvements generally include, but are not limited to the materials, equipment, utilities, labor, contract services and incidental expenses necessary for the ongoing maintenance and operation of the landscaping and lighting improvements, amenities and appurtenant facilities within public properties, rights-of-way or easements including street lighting and various landscaped parkways, medians, slopes, open space areas, detention basins and related amenities including, but not limited to plantings, trees, monuments or other ornamental features, fencing, sidewalks and other facilities or hardscapes constructed and installed as part of the development plans and agreements approved for the development of the lots and parcels within the District.
Section 4. The City Council hereby designates Willdan Financial Services as the Engineer for the purposes of these proceedings and orders the Engineer to prepare and file with the City Clerk a written report in accordance with Article XIII D, Section 4 of the California Constitution and Article 4 (commencing with Section 22565) of Chapter 1 of the Act for that portion of the fiscal year 2023-24 commencing July 1, 2023 and ending June 30, 2024. Such Report shall refer to the District by its distinctive designations. 36 Section 5. Lots or parcels within the District that are owned or used by any county, city, city and county, special district or any other local or regional governmental entity, the State of California or the United States shall be assessed unless the City demonstrates by clear and convincing evidence that such lots or parcels receive no special benefit from the proposed improvements.
PASSED, APPROVED, AND ADOPTED this 18th Day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
_____________________________________
GREG WATKINS, MAYOR
ATTEST: ____________ __
__ TONI M. COATES, City Clerk
I, Toni M. Coates, City Clerk of the City of Shasta Lake, do hereby certify that the foregoing Resolution No. CC-2023-xx was duly passed at a regular meeting of the City of Shasta Lake City Council on April 18, 2023.
Toni M. Coates, City Clerk
City of Shasta Lake
37 RESOLUTION NO. CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE,
COUNTY OF SHASTA, STATE OF CALIFORNIA PRELIMINARILY APPROVING
THE REPORT OF THE ENGINEER IN CONNECTION WITH THE ANNUAL LEVY
OF AND COLLECTION OF ASSESSMENTS OF THE DEER CREEK MANOR LANDSCAPING AND LIGHTING DISTRICT FOR FISCAL YEAR 2022/2023, PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972, PART 2 OF DIVISION 15 OF THE STREETS AND HIGHWAYS CODE AND AS PROVIDED BY
ARTICLE XIII D OF THE CALIFORNIA CONSTITUTION
THE CITY COUNCIL OF THE CITY OF SHASTA LAKE FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. The City Council, pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code (the "Act") and as provided by Article XIII D of the California Constitution, by its previous Resolution No. CC-2023-xx initiated proceedings for the annual levy and collection of assessments and consideration of an amendment to the boundaries of Deer Creek Manor Landscaping and Lighting District (hereinafter referred to as the “District”) as described on maps of the District on file in the office of the City Clerk and incorporated herein by reference, and the levy and collection of assessments against the assessable lots and parcels of land within such District for the fiscal year commencing July 1, 2023 and ending June 30, 2024 and ordered the Engineer, Willdan Financial Services, to prepare and file a written report in accordance with Article XIII D, Section 4 of the California Constitution and Article 4 of Chapter 1 of the Act.
Section 2. The Engineer has prepared and filed with the City Clerk of the City of Shasta Lake and the City Clerk has presented to the City Council such report entitled "City of Shasta Lake Engineer’s Report, Deer Creek Manor Landscaping and Lighting District, Engineer’s Annual Levy Report” (hereinafter referred to as the "Report") which pertains to the annual levy of assessments and the amendment to the boundaries of the District.
Section 3. The City Council has carefully examined and reviewed the Report, and the Report is hereby approved as filed.
PASSED, APPROVED, AND ADOPTED this 2nd Day of May 2023 by the following vote:
AYES:
NOES:
ABSENT:
_____________________________________
GREG WATKINS, MAYOR
ATTEST: _______________________
TONI M. COATES, City Clerk
38 I, Toni M. Coates, City Clerk of the City of Shasta Lake, do hereby certify that the foregoing Resolution No.CC-2023-xx was duly passed at a regular meeting of the City of Shasta Lake City Council on May 2nd, 2023.
_______________________________
Toni M. Coates, City Clerk
City of Shasta Lake
39 Toni M. Coates, City Clerk
City of Shasta Lake
40 RESOLUTION NO. CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE,
COUNTY OF SHASTA, STATE OF CALIFORNIA DECLARING ITS INTENTION TO
ORDER THE ANNUAL LEVY AND COLLECTION OF ASSESSMENTS OF DEER
CREEK MANOR LANDSCAPING AND LIGHTING DISTRICT FOR FISCAL YEAR 2023/2024 PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972, PART 2 OF DIVISION 15 OF THE STREETS AND HIGHWAYS CODE AND AS PROVIDED
BY ARTICLE XIII D OF THE CALIFORNIA CONSTITUTION, AND APPOINTING A
TIME AND PLACE FOR HEARING PROTESTS
THE CITY COUNCIL OF THE CITY OF SHASTA LAKE FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. By its previous Resolution No. 2023-xx, the City Council initiated proceedings pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code, commencing with Section 22500 (hereinafter referred to as the "Act") and as provided by Article XIII D of the California Constitution, for the levy and collection of annual assessments against the assessable lots and parcels of land within the Deer Creek Manor Landscaping and Lighting District (hereinafter referred to as the “District”) described on maps on file in the office of the City Clerk and incorporated herein by reference, for fiscal year 2023/2024 and ordered the Engineer, Willdan Financial Services, to prepare and file a written report in accordance with Article XIII D, Section 4 of the California Constitution and Article 4 of Chapter 1 of the Act. The Engineer has prepared and filed a written report (the “Report”) with the City Clerk, which pertains to the annual levy and collection of assessments and amendment to the boundaries of the District; and by previous resolution, the City Council approved the Engineer's Report.
Section 2. The City Council hereby (1) finds that the public interest and convenience requires; (2) declares its intention to order the annual levy and collection of assessments and to levy and collect assessments against the assessable lots and parcels of land within such District for that portion of the fiscal year commencing July 1, 2023 and ending June 30, 2024 to pay the costs and expenses of the improvements described in Section 3. The assessments proposed by this resolution were approved by the property owners pursuant to a mailed ballot election conducted in accordance with Article XIII D of the California Constitution. The City Council in subsequent fiscal years may thereafter impose the assessment at any rate or amount that is less than or equal to the maximum assessment amount authorized for previous Fiscal Year, increased each year by the greater of 3% or the percentage increase of the Consumer Price Index, All Urban Consumers, for the San Francisco, Oakland, San Jose Area (“CPI”), as determined by the United States Department of Labor, or its successor without conducting another mailed ballot election.
Section 3. The proposed improvements may be briefly described as follows: the operation, maintenance and servicing of turf, ground cover, shrubs, trees, irrigation, lighting systems, entry monuments, walls, drainage systems, park facilities, and associated appurtenances, located in public places within the boundaries of the District. These improvements include all necessary service, operations, administration, and maintenance 41 required to keep the above-mentioned improvements in a healthy, vigorous, and satisfactory condition.
Section 4. The general location and boundaries of the proposed District including the amendment to the boundaries is shown on maps on file in the office of the City Clerk, and is incorporated herein by reference, and open to public inspection. The designation of the existing District is as follows: “Deer Creek Manor Landscaping and Lighting District”.
Section 5. Reference is hereby made to the Engineer's Annual Levy Report, on file in the office of the City Clerk and open to public inspection, for a full and detailed description of the improvements, the amended boundaries of the District and the proposed assessments upon assessable lots and parcels of land within the District.
Section 6. Notice is hereby given that on the 5th day of May, 2023 at 6:00pm, a public hearing will be held in the City Council Chambers at 4488 Red Bluff Street, Shasta Lake, regarding the Deer Creek Manor Landscape and Lighting District. The public hearing will afford interested persons the opportunity to hear and be heard
Section 7. The City Clerk is hereby authorized and directed to give notice of the public hearing by publishing this resolution not less than one time and not less than ten days prior to the above hearing date as set forth in Section 6 and in accordance with law.
Section 9. Lots or parcels within the District that are owned or used by any county, city, city and county, special district or any other local or regional governmental agency, the State of California or the United States shall be assessed unless the City demonstrates by clear and convincing evidence that such lots or parcels receive no special benefit from the proposed improvements.
******
*********
PASSED, APPROVED, AND ADOPTED this 18th Day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
_____________________________________
GREG WATKINS, MAYOR
ATTEST: ____________ __
__ TONI M. COATES, City Clerk
I, Toni M. Coates, City Clerk of the City of Shasta Lake, do hereby certify that the foregoing Resolution No.CC-2023-xx was duly passed at a regular meeting of the City of Shasta Lake City Council on April 18, 2023.
Toni M. Coates, City Clerk
City of Shasta Lake
42 RESOLUTION NO. CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE, STATE
OF CALIFORNIA INITIATING PROCEEDINGS FOR THE ANNUAL LEVY AND
COLLECTION OF ASSESSMENTS FOR THE DEER CREEK MANOR DRAINAGE MAINTENANCE DISTRICT FOR FISCAL YEAR 2023/2024 PURSUANT TO THE BENEFIT ASSESSMENT ACT OF 1982; AND ORDERING THE PREPARATION OF AN ENGINEER’S REPORT IN CONNECTION THEREWITH
THE CITY COUNCIL OF THE CITY OF SHASTA LAKE FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. The City Council through previous resolutions has established and levied annual assessments and charges for the Deer Creek Manor Drainage Maintenance District (hereinafter referred to as the “District”). The Deer Creek Manor Drainage Maintenance District was formed and is levied pursuant to the provisions of the Benefit Assessment Act 1982, being chapter 6.4 of the California Government Code, commencing with Section 54703 (hereinafter referred to as the “1982 Act”). The 1982 Act provides for the collection of assessments and charges by the County of Shasta on behalf of the City of Shasta Lake to pay for the costs and expenses required to service and maintain the drainage (storm drain) improvements, and related thereto, and Section 2. The general location and boundaries of the proposed District including the amendment to the boundaries is shown on maps on file in the office of the City Clerk, and is incorporated herein by reference, and open to public inspection. The designation of the existing District is as follows: “Deer Creek Manor Drainage Maintenance District”.
Section 3. Improvements. The proposed improvements include the operation, maintenance and servicing of the street and drainage improvements and appurtenant facilities that are necessary and essential requirements for the orderly development of properties within the District to their full potential, consistent with the conditions for development of the properties, and protection of downstream properties which could be negatively affected by increased storm runoff from the development of these properties. These improvements generally include, but are not limited to the repair of potholes, cracks or other common failures in the asphalt surface; repair or replacement of curbs, gutters, driveway approaches and sidewalks as required in connection with the maintenance of the streets; repair or installation of street signs, barricades, fencing or other delineation; mechanized sweeping and cleaning of the streets and gutters; slurry sealing, overlays and re-striping of the street surfaces. The improvements also generally include, but are not limited to the grading of access perimeter roads; repair of erosion to access roads; debris clearance; dust control through the application of soil stabilization agents; weed abatement; mosquito and vector control; water treatment and monitoring; maintenance, cleaning and minor repairs to storm drain inlets, outlets, pumps, filters, pipes and other drainage related equipment. Detailed maps and descriptions of the location and extent of the specific improvements to be maintained by the District are on file in the Office of Public Works of the City of Shasta Lake and by reference these plans and specifications are made part of this Resolution.
Section 4. The City Council hereby designates Willdan Financial Services as the Engineer for the purposes of these proceedings and orders the Engineer to prepare and file with the City Clerk a written report in accordance for that portion of the fiscal year 2023/2024 commencing July 1, 2023 and ending June 30, 2024. Such Report shall refer to 43 the District by its distinctive designations. Accordance with Chapter 6.4 of the California Government Code as required by Section 54703 of the 1982 Act. Said Engineer’s Report shall contain a description of the improvements and services, an estimate of the costs financed by the levy, the properties benefiting from the improvements, the method of apportioning the assessments and calculating the charges, and any substantial changes to the existing improvements.
Section 5. Lots or parcels within the District that are owned or used by any county, city, city and county, special district or any other local or regional governmental entity, the State of California or the United States shall be assessed unless the City demonstrates by clear and convincing evidence that such lots or parcels receive no special benefit from the proposed improvements.
*********
PASSED, APPROVED, AND ADOPTED this 18th Day of April, 2023 by the following vote:
AYES:
NOES:
ABSENT:
_____________________________________
GREG WATKINS, MAYOR
ATTEST: ____________ __
__ TONI M. COATES, City Clerk
I, Toni M. Coates, City Clerk of the City of Shasta Lake, do hereby certify that the foregoing Resolution No.CC-2023-xx was duly passed at a regular meeting of the City of Shasta Lake City Council on April 18, 2023.
Toni M. Coates, City Clerk
City of Shasta Lake
44 RESOLUTION NO. CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE,
COUNTY OF SHASTA, STATE OF CALIFORNIA PRELIMINARILY APPROVING
THE REPORT OF THE ENGINEER IN CONNECTION WITH THE ANNUAL LEVY
OF AND COLLECTION OF ASSESSMENTS OF THE DEER CREEK MANOR DRAINAGE MAINTENANCE DISTRICT FOR FISCAL YEAR 2023/2024, PURSUANT TO THE BENEFIT ASSESSMENT ACT OF 1982
THE CITY COUNCIL OF THE CITY OF SHASTA LAKE FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. The City Council pursuant to provisions of the Benefit Assessment Act of 1982, being Chapter 6.4 of the California Government Code, commencing with Section 54703 (hereinafter referred to as the “1982 Act”) did by previous Resolution, order the preparation of the Fiscal Year 2023/2024 Engineer’s Report for the Deer Creek Manor Drainage Maintenance District (hereinafter referred to as the “District”), by its previous Resolution No. 2023-xx initiated proceedings for the annual levy and collection of assessments and consideration of an amendment to the boundaries of Deer Creek Manor Drainage Maintenance District (hereinafter referred to as the “District”) as described on maps of the District on file in the office of the City Clerk and incorporated herein by reference, and the levy and collection of assessments against the assessable lots and parcels of land within such District for the fiscal year commencing July 1, 2023 and ending June 30, 2024 and ordered the Engineer, Willdan Financial Services, to prepare and file a written report in accordance , with Section 54703 of the 1982 Act has prepared and filed with the City Clerk an Engineer’s Report for fiscal year 2023/2024 and said report has been presented to the City Council and is incorporated herein by reference, and Section 2. The Engineer has prepared and filed with the City Clerk of the City of Shasta Lake and the City Clerk has presented to the City Council such report entitled "City of Shasta Lake Engineer’s Report, Deer Creek Manor Drainage Maintenance, Engineer’s Annual Levy Report” (hereinafter referred to as the "Report") which pertains to the annual levy of assessments and the amendment to the boundaries of the District.
Section 3. The City Council has carefully examined and reviewed the Report, and the Report is hereby approved as filed.
PASSED, APPROVED, AND ADOPTED this 18th Day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
_____________________________________
GREG WATKINS, MAYOR
ATTEST: ____________ __
__ TONI M. COATES, City Clerk
I, Toni M. Coates, City Clerk of the City of Shasta Lake, do hereby certify that the foregoing Resolution No.CC-2023-xx was duly passed at a regular meeting of the City of Shasta Lake City Council on May 2nd, 2023.
Toni M. Coates, City Clerk, City of Shasta Lake
45 RESOLUTION NO. CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE,
COUNTY OF SHASTA, STATE OF CALIFORNIA DECLARING ITS INTENTION TO
ORDER THE ANNUAL LEVY AND COLLECTION OF ASSESSMENTS OF DEER CREEK MANOR DRAINAGE MAINTENANCE DISTRICT FISCAL YEAR 2022/2023 PURSUANT TO THE BENEFIT ASSESSMENT ACT OF 1982, AND APPOINTING A
TIME AND PLACE FOR PUBLIC HEARING PROTESTS
THE CITY COUNCIL OF THE CITY OF SHASTA LAKE FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. By its previous Resolution No. CC - 2023-, the City Council initiated proceedings pursuant to the Benefit Assessment Act of 1982, being chapter 6.4, the California Government Code, commencing with Section 54703 (hereinafter referred to as the “1982 Act”), for the levy and collection of annual assessments against the assessable lots and parcels of land within the Deer Creek Manor Drainage Maintenance District (hereinafter referred to as the “District”) described on maps on file in the office of the City Clerk and incorporated herein by reference, for fiscal year 2023/2024 and ordered the Engineer, Willdan Financial Services, to prepare and file a written report in accordance with the 1982 Act. The Engineer has prepared and filed a written report (the “Report”) with the City Clerk, which pertains to the annual levy and collection of assessments and amendment to the boundaries of the District; and by previous resolution, the City Council approved the Engineer's Report.
Section 2. The City Council hereby (1) finds that the public interest and convenience requires; (2) declares its intention to order the annual levy and collection of assessments and to levy and collect assessments against the assessable lots and parcels of land within such District for that portion of the fiscal year commencing July 1, 2023 and ending June 30, 2024 to pay the costs and expenses of the improvements described in Section 3. The assessments proposed by this resolution were approved by the property owners pursuant to a mailed ballot election conducted in accordance with the Act. The City Council in subsequent fiscal years may thereafter impose the assessment at any rate or amount that is less than or equal to the maximum assessment amount authorized for previous Fiscal Year, increased each year by the greater of 3% or the percentage increase of the Consumer Price Index, All Urban Consumers, for the San Francisco, Oakland, San Jose Area (“CPI”), as determined by the United States Department of Labor, or its successor without conducting another mailed ballot election.
Section 3. The proposed improvements may be briefly described as follows: the operation, maintenance and servicing of the street and drainage improvements and appurtenant facilities that are necessary and essential requirements for the orderly development of properties within the District to their full potential, consistent with the conditions for development of the properties, and protection of downstream properties which could be negatively affected by increased storm runoff from the development of these properties. These improvements generally include, but are not limited to the repair of potholes, cracks or other common failures in the asphalt surface; repair or replacement of curbs, gutters, driveway approaches and sidewalks as required in connection with the maintenance of the streets; repair or installation of street signs, barricades, fencing or other delineation; mechanized sweeping and cleaning of the streets and 46 gutters; slurry sealing, overlays and re-striping of the street surfaces. The improvements also generally include, but are not limited to the grading of access perimeter roads; repair of erosion to access roads; debris clearance; dust control through the application of soil stabilization agents; weed abatement; mosquito and vector control; water treatment and monitoring; maintenance, cleaning and minor repairs to storm drain inlets, outlets, pumps, filters, pipes and other drainage related equipment. Detailed maps and descriptions of the location and extent of the specific improvements to be maintained by the District are on file in the Office of Public Works of the City of Shasta Lake and by reference these plans and specifications are made part of this Resolution.
Section 4. The general location and boundaries of the proposed District including the amendment to the boundaries is shown on maps on file in the office of the City Clerk, and is incorporated herein by reference, and open to public inspection. The designation of the existing District is as follows: “Deer Creek Manor Drainage Maintenance District”.
Section 5. Reference is hereby made to the Engineer's Annual Levy Report, on file in the office of the City Clerk and open to public inspection, for a full and detailed description of the improvements, the amended boundaries of the District and the proposed assessments upon assessable lots and parcels of land within the District.
Section 6. Notice is hereby given that on the 2nd day of May , 2023 at 6:00pm, a public hearing will be held in the City Council Chambers located at 4488 Red Bluff Street, Shasta Lake, regarding the Deer Creek Manor Drainage Maintenance District. The public hearing will afford interested persons the opportunity to hear and be heard.
Section 7. The City Clerk is hereby authorized and directed to give notice of the public hearing by publishing this resolution not less than one time and not less than ten days prior to the above hearing date as set forth in Section 6 and in accordance with law.
Section 9. Lots or parcels within the District that are owned or used by any county, city, city and county, special district or any other local or regional governmental agency, the State of California or the United States shall be assessed unless the City demonstrates by clear and convincing evidence that such lots or parcels receive no special benefit from the proposed improvements.
PASSED, APPROVED, AND ADOPTED this 18th Day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
_____________________________________
GREG WATKINS, MAYOR
ATTEST: _________________________
TONI M. COATES, City Clerk
I, Toni M. Coates, City Clerk of the City of Shasta Lake, do hereby certify that the foregoing Resolution No.CC-2023- was duly passed at a regular meeting of the City of Shasta Lake City Council on April 18, 2023.
Toni M. Coates, City Clerk
City of Shasta Lake
47 27368 Via Industria
Suite 200
Temecula, Ca 92590
T 951.587.3500 | 800.755.6864
F 951.587.3510
www.willdan.com/financial
City of Shasta Lake
Deer Creek Manor
Landscaping and Lighting District
2023/2024 ENGINEER’S ANNUAL LEVY REPORT
Intent Meeting: April 18, 2023
Public Hearing: May 2, 2023
48 ENGINEER'S REPORT AFFIDAVIT
AFFIDAVIT FOR THE ENGINEER’S REPORT
Deer Creek Manor Landscaping and Lighting District
Establishment of Annual Assessments for the:
City of Shasta Lake
County of Shasta, State of California
This Report describes the District including the improvements, budgets, parcels and assessments to be levied for Fiscal Year 2023/2024 as they existed at the time of the passage of the Resolution of Intention. Reference is hereby made to the Shasta County Assessor’s maps for a detailed description of the lines and dimensions of parcels within the District. The undersigned respectfully submits the enclosed Report as directed by the City Council.
Dated this ____________ day of ______________, 2023.
Willdan Financial Services
Assessment Engineer
On Behalf of the City of Shasta Lake
By: ________________________________
Chonney Gano, Project Manager
District Administration Services
By: ________________________________
Tyrone Peter
PE # C 81888
49 TABLE OF CONTENTS
INTRODUCTION.................................................................................................. 1 I. PLANS AND SPECIFICATIONS..................................................................... 4 A. BENEFITING PROPERTIES WITHIN THE DISTRICT .......................... 4 B. IMPROVEMENTS AUTHORIZED BY THE 1972 ACT........................... 4 C. DESCRIPTION OF IMPROVEMENTS................................................... 5 General Description of the Improvements ................................................................ 5 Landscape Improvements........................................................................................... 6 Public Lighting Improvements.................................................................................... 7 II. METHOD OF APPORTIONMENT.................................................................. 8 A. BENEFIT ANALYSIS ............................................................................. 8 B. ASSESSMENT METHODOLOGY.......................................................... 9 Equivalent Benefit Units.............................................................................................. 9 Assessment Calculations.......................................................................................... 10 C. ASSESSMENT RANGE FORMULA..................................................... 11 III. DISTRICT BUDGET .................................................................................... 12 IV. DISTRICT DIAGRAM.................................................................................. 14 V. ASSESSMENT ROLL................................................................................. 16 50 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 1 of 16
INTRODUCTION
Pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2 of Division 15 of the California Streets and Highways Code (hereafter referred to as the “1972 Act”), and in compliance with the substantive and procedural requirements of the California State Constitution Article XIIID (hereafter referred to as the “California Constitution”), the City Council of the City of Shasta Lake, County of Shasta, State of California (hereafter referred to as “City”), formed and levied special benefit assessments for the district designated as:
City of Shasta Lake
Deer Creek Manor Landscaping and Lighting District
(hereafter referred to as the “District”), which includes all lots and parcels of land within the residential subdivisions known as Deer Creek Manor that have been determined to receive special benefits from the improvements and facilities installed and constructed in conjunction with the development of such residential properties within the City limits of Shasta Lake. This Engineer’s Report (hereafter referred to as the “Report”) has been prepared as required pursuant to Chapter 1 Article 4, commencing with Section 22565 of the 1972 Act.
The City Council formed the District to levy and collect annual assessments on the Shasta County (the “County”) tax rolls to provide ongoing funding for the costs and expenses required to service and maintain the landscaping and lighting improvements and appurtenant facilities that are associated with the orderly development of the properties within the District to their full potential, consistent with the development plans and applicable portions of the City General Plan. The improvements provided by the District and the assessments described herein, are made pursuant to the 1972 Act and the substantive and procedural provisions of the California Constitution.
This Report describes the District, the improvements, and the assessments levied against properties in connection with the special benefits that the properties will receive from the maintenance and servicing of the District improvements and facilities commencing in fiscal year 2023/2024. The assessments described herein will provide a funding source (annual assessments) for the continued operation and maintenance of the landscaping and lighting improvements and appurtenant facilities that are directly associated with the development and use of properties within the District including, but not limited to street lighting, medians, parkways, slopes, open spaces and detention basin.
While the cost of constructing these improvements are not part of the assessments, the budget described herein, represent an estimate of the direct expenditures, incidental expenses, and fund balances that will be necessary to ensure proper maintenance, servicing and long term funding needs to support the improvements that provides special benefits to properties within the District. The structure of the District (organization), the improvements, the method of apportionment, and assessments described herein are based on current property development plans for the Deer Creek Manor residential subdivision and specifications associated with that planned development; and by reference these plans and specifications are made part of this Report. 51 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 2 of 16
The word “parcel”, for the purposes of this Report, refers to an individual property assigned its own Assessor’s Parcel Number (APN) by the County Assessor’s Office. The County Auditor-Controller uses Assessor’s Parcel Numbers and specific Fund Numbers to identify properties assessed on the tax roll for the special benefit assessments.
Each subsequent fiscal year, a Report shall be prepared and presented to the City Council describing any changes to the improvements, the services, the annual budget and assessments for that fiscal year, and the City Council shall hold a noticed public hearing regarding these matters prior to approving and ordering the levy of assessments for that fiscal year. If the annual budget for the District requires an assessment that exceeds the maximum assessment described herein (as approved by the property owners at the time of the District formation), the new or increased assessment must be confirmed through another property owner protest ballot proceeding before such an assessment may be imposed.
This Report consists of five (5) parts:
Part I
Plans and Specifications: A general description of the District, the improvements, and authorized services for parcels within the District will be assessed is provided in this section of the Report. The specific landscaping and lighting plans and associated facility specifications prepared in connection with the development of properties within the Deer Creek Manor subdivision (also known as the “Landscape Plans”) are on file in the offices of the City of Shasta Lake, and by reference these plans and specifications are made part of this Report. Based on these improvement plans and approved subdivision plans, it has been determined that the District will establish a single benefit zone encompassing all benefiting properties within the territory identified within the Boundary Map of the Deer Creek Manor Landscaping and Lighting District, attached and incorporated herein under Part IV of this Report. It should be noted that four (4) parcels within the Deer Creek Manor subdivision are not included within the District because they are accessed from Buckingham Drive and have no direct access or special benefit from the landscaping and lighting improvements provided by this District.
Part II
Method of Apportionment: A discussion of benefits the improvements and services provide to properties within the District and the method of calculating each property’s proportional special benefit and annual assessment. This section also identifies and outlines an Assessment Range Formula (Annual Inflation Adjustment) that provides for an annual adjustment to the maximum assessment rate that establishes limits on future assessments, but also provides for reasonable cost adjustments due to inflation without the added expense of additional property owner protest ballot proceedings.
Part III
District Budget: An annual cost to operate, maintain and service the landscaping and lighting improvements and amenities installed and constructed in connection with properties within the District. This budget includes direct maintenance costs and incidental expenses including, but not limited to, administration expenses and the collection of appropriate fund balances to establish the initial Maximum Assessment 52 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 3 of 16
Rates approved by the property owners of record. The special benefit assessments are based on an estimate of the overall operation, maintenance and servicing costs minus any costs that are not assessed as special benefit. The assessments for each subsequent year shall be based on the estimated net annual cost for the City to operate, maintain and service the improvements for that fiscal year including the collection of funds in installments for periodic or long-term maintenance activities. The Maximum Assessment Rates (Rates per Equivalent Benefit Unit) identified in the budget of this Report establishes the initial Maximum Assessment Rates for the District in fiscal year 2023/2024 and shall be adjusted annually by the Assessment Range Formula described in the method of apportionment.
Part IV
District Diagram: A Diagram showing the exterior boundaries of the District is provided in this section of the Report and includes all parcels that will receive special benefits from the District improvements. Parcel identification, the lines and dimensions of each lot, parcel and subdivision of land within the District, are inclusive of all parcels as shown on the Shasta County Assessor's Parcel Maps as they existed at the time of the passage of the Resolution of Intention, and shall include all subsequent subdivisions, lot line adjustments or parcel changes therein. Said parcels of land are consistent with and identified by the following Shasta County Assessor's Parcel Maps: Book 075, Page 150, Parcel 046; Book 075, Page 570, Parcels 003 through 074; Book 075, Page 610, Parcels 001 through 026; and Book 075, Page 620, Parcels 001 through 028. Reference is hereby made to the Shasta County Assessor’s maps for a detailed description of the lines and dimensions of each lot and parcel of land within the District.
Part V
Assessment Roll: The assessment amount for each parcel is based on the parcel’s proportional special benefit as outlined in the method of apportionment and the initial Maximum Assessment Rates established in this Report. The Assessment Roll also provides the assessment amount for each parcel for the fiscal year 2023/2024 based on the method of apportionment and estimated expenses (budget) for fiscal year 2023/2024. 53 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 4 of 16
I. PLANS AND SPECIFICATIONS
A. BENEFITING PROPERTIES WITHIN THE DISTRICT
The territory within the District totaling approximately thirty-six acres (36 acres), consists of all lots, parcels and subdivisions of land within the Deer Creek Manor subdivision that directly benefit from the improvements and services provided by the District. The district is comprised of 84 of the 87 single-family residential properties within the Deer Creek Manor subdivision and various other properties that collectively represent the easements and public areas within the District.
The District is situated in the southern portion of the City of Shasta Lake generally located:
• North of Trinity Street;
• South of Pine Grove Avenue; and
• West of Cascade Boulevard and Interstate 5
The parcels within the District at the time this District was formed were identified on the Shasta County Assessor’s Secured Roll (as of July 18, 2007) and the Assessor’s Parcel Maps as follows:
Book 075, Page 150, Parcel 046;
Book 075, Page 560, Parcels 005 through 042; and
Book 075, Page 570, Parcels 001 through 051.
B. IMPROVEMENTS AUTHORIZED BY THE 1972 ACT
As generally defined by the Landscaping and Lighting Act of 1972 and applicable to this District, the improvements and associated assessments may include one or more of the following:
• The installation or planting of landscaping;
• The installation or construction of statuary, fountains, and other ornamental structures and facilities;
• The installation or construction of public lighting facilities including, but not limited to street lights and traffic signals;
• The installation or construction of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the maintenance or servicing thereof;
• The installation of park/recreational improvements, including, but not limited to the following:
a. Land preparation, such as grading, leveling, cutting and filling, sod, landscaping, irrigation systems, sidewalks, and drainage. b. Lights, playground equipment, play courts, and public restrooms. c. The acquisition of land for park, recreational, or open-space purposes or any existing improvement otherwise authorized pursuant to this section. 54 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 5 of 16
• The maintenance or servicing, of any of the foregoing including the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement including but not limited to:
a. Repair, removal, or replacement of all or any part of any improvements; b. Grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks, or paving, or water, irrigation, drainage, or electrical facilities;
c. Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury;
d. The removal of trimmings, rubbish, debris, and other solid waste; e. The cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti;
f. Electric current or energy, gas, or other illuminating agent for any public lighting facilities or for the lighting or operation of any other improvements; g. Water for the irrigation of any landscaping, the operation of any fountains, or the maintenance of any other improvements.
• Incidental expenses associated with the improvements including, but not limited to:
a. The cost of preparation of the report, including plans, specifications, estimates, diagram, and assessment;
b. The costs of printing, advertising, and the publishing, posting and mailing of notices;
c. Compensation payable to the County for collection of assessments; d. Compensation of any engineer or attorney employed to render services; • Any other expenses incidental to the construction, installation, or maintenance and servicing of the improvements;
• Costs associated with any elections held for the approval of a new or increased assessment.
C. DESCRIPTION OF IMPROVEMENTS
General Description of the Improvements
The purpose of this District is to ensure the ongoing maintenance, operation and servicing of local landscaping and street lighting improvements established or installed in connection with development of properties within the District. The improvements may consist of all or a portion of the public landscaped areas, street lighting and appurtenant facilities within and adjacent to the District. These improvements generally include, but are not limited to the materials, equipment, utilities, labor, contract services and incidental expenses necessary for the ongoing maintenance and operation of the landscaping and lighting improvements, amenities and appurtenant facilities within public properties, rights-of-way or easements including street lighting and various landscaped parkways, 55 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 6 of 16
medians, slopes, open space areas, detention basins and related amenities including, but not limited to plantings, trees, monuments or other ornamental features, fencing, sidewalks and other facilities or landscapes constructed and installed as part of the development plans and agreements approved for the development of the lots and parcels within the District. The improvements maintained and funded entirely or partially through the District assessments are generally described as:
• Streetscape landscaping including street trees located on the perimeter of the development and interior streets that are within the public rights-of-way or easements and dedicated to the City for maintenance;
• Open space areas, slopes and landscaped drainage facilities established and/or constructed as part of developing properties within the District; • Public lighting facilities including internal and perimeter street lighting; safety lighting and/or ornamental lighting within landscaped improvement areas; • All appurtenant facilities, equipment, materials and utilities related to the aforementioned improvements; and
• Specifically not included as District improvements are those improvements located on private property, improvements and facilities that may be provided or maintained by an agency other than the City; improvements and facilities that may be provide by another assessment or tax levied by the City or any improvement provided and maintained by a Homeowner’s Association or similar entity.
Landscape Improvements
The landscape improvements for the District may include, but are not limited to turf, ground cover, shrubs and plants, trees, irrigation and drainage systems, ornamental lighting, masonry walls or other fencing, landscape improvements, monuments or other ornamental features and associated appurtenant facilities located within the landscape easements or public rights-of-way. Specifically the landscape improvement areas for this District are identified as:
• Landscape frontage on the south side of Pine Grove Avenue along the length of the District;
• Landscape areas of the entryway median and round-about on Jurak Way; • Landscape areas and decorative cobblestone concrete in 8 pop-out planters within the District;
• Isolated open space areas adjacent to lots 20, 21, 84 and 85; and • All appurtenant facilities, equipment, materials and utilities related to weed abatement, graffiti abatement, the trimming of trees and shrubs, and the aforementioned improvements.
56 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 7 of 16
Public Lighting Improvements
The lighting improvements may include but are not limited to the cost of providing electrical energy and servicing of lighting fixtures, poles, meters, conduits, electrical cable and associated appurtenant facilities associated with:
• Public streetlights located on all public streets within and adjacent to the District including Pine Grove Avenue, Rissa Way, Jurak Way and Smith Avenue. (Estimated to be approximately 11 perimeter street lights and 12 internal street lights); and • Lighting facilities located within the landscaped areas that may include safety/security lights, and ornamental lights installed as part of the District’s landscape improvements and features.
Detailed maps and descriptions of the location and extent of the specific improvements maintained by the District are on file at the City of Shasta Lake and by reference are made part of this Report. These plans and specifications may be amended or modified from time to time to reflect future changes within the District or servicing of the improvements currently planned for this District. Those portions of the improvements that may be funded in whole or in part by other revenue sources as part of the approved development agreements, will not be included as part of the District assessments. The net annual cost to provide and maintain the improvements determined to be of special benefit shall be allocated to each property in proportion to the special benefits received from those various improvements.
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II. METHOD OF APPORTIONMENT
The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements, which include the construction, maintenance, and servicing of public lights, landscaping and appurtenant facilities. The 1972 Act further requires that the cost of these improvements be levied according to benefit rather than assessed value:
“The net amount assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits received by each such lot or parcel from the improvements.” The method of apportionment described in this Report for allocation of special benefit assessments utilizes commonly accepted engineering practices and have been established pursuant to the 1972 Act and the provisions of the California Constitution.
The formulas used for calculating assessments reflects the composition of parcels within the District and the improvements and services provided, to fairly apportion the costs based on the special benefits to each parcel.
A. BENEFIT ANALYSIS
Each of the improvements, the associated costs and assessments have been carefully reviewed, identified and allocated based on special benefit pursuant to the provisions of the California Constitution and 1972 Act. The landscaping and lighting improvements associated with this District and for which properties will be assessed have been identified as necessary, required and/or desired for the orderly development of the properties within the District to their full potential, consistent with the development plans and applicable portions of the City General Plan. As such, the ongoing operation, servicing and maintenance of these improvements would be necessary and required of individual property owners for the development of such properties and the ongoing operation, servicing and maintenance of these improvements would be the financial obligation of those properties. Therefore, the improvements and the annual costs of ensuring the maintenance and operation of the improvements are considered a distinct and special benefit to the properties developed within the District.
The construction and installation of these improvements are only necessary for development of the properties within the District. As such, these improvements were not required nor necessarily desired by any properties or developments outside the District boundary and any benefit derived by properties outside the District boundaries is considered incidental. Therefore, it has been determined that the ongoing maintenance, servicing and operation of the District improvements provide no measurable general benefit to properties outside the District or to the public at large, but clearly provide distinct and special benefits to properties within the District.
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B. ASSESSMENT METHODOLOGY
The method of apportionment established for this District and described herein, reflects the proportional special benefit each property receives from the improvements and services based on the actual or land use of that parcel as compared to other properties within the District. The special benefit received by each lot or parcel is equated to the overall land use of parcels within the District based on the parcel’s actual land use or proposed development.
All special benefit costs associated with the improvements shall be fairly distributed among the parcels based upon the benefit received by each parcel. Additionally, in compliance with the California Constitution Article XIIID Section 4, each parcel’s assessment may not exceed the reasonable cost of the proportional special benefit conferred to that parcel. To identify and determine the special benefit received by each parcel and their proportionate share of the improvement costs it is necessary to consider the entire scope of the planned improvements as well as individual property development within the District. Upon review of the improvements it has been determined that each of the properties within the District receives special benefits from all the improvements funded by annual assessments and based on the overall planned development within the District a single zone of benefit is appropriate for the allocation of the assessments and proportional benefit.
The benefit formula used within the District reflects the composition of the parcels and the improvements and services provided, to fairly apportion the costs based on the special benefits to each assessable parcel. It has been previously determined that dedicated public easements, open space areas, public rights-of-ways, public greenbelts and parkways, utility rights-of-way, common areas, sliver parcels and bifurcated lots or any other property that cannot be developed, receive no special benefit from the improvements and are not assessed.
Equivalent Benefit Units
The method of apportionment established for most districts formed under the 1972 Act utilizes a weighted method of apportionment known as an Equivalent Benefit Unit (EBU) methodology (sometimes referred to as Equivalent Dwelling Units) that uses the singlefamily home site as the basic unit of assessment. A single-family home site equals one Equivalent Benefit Unit (EBU) and all other land uses are assigned a weighted EBU based on an assessment formula that equates various property characteristics to that of the single-family home site. This proportional weighting may be based on several factors that may include, but are not limited to: the type and status of development (land use), size of the property, location of the property, development plans or restrictions, vehicular trip generation, street frontage, population densities or other property related factors. For most districts the calculation of each parcel’s proportional special benefit can be reasonably determined by applying one or more of these factors.
While the Equivalent Benefit Unit method of apportioning special benefit is commonly used and applied to districts that have or may have a wide range of land use classifications (both residential and non-residential use) or have significant variations in the phasing of improvements and/or property development, this particular District involves 59 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 10 of 16
only the development of single-family residential properties that will receive proportionately the same benefit from all the planned improvements. Therefore, each assessed parcel’s special benefits from the improvements are considered equal and each residential unit/parcel has been assigned one (1) EBU.
The following provides an overview of various land uses and their proportional special benefit as it applies or may apply to this District:
Single-Family Residential Units — This land use is defined as a fully subdivided residential home site with or without a structure. This land use classification shall be assessed at 1.0 EBU per lot or parcel.
Planned Residential Subdivision — This land use is defined as any property not fully subdivided, but has a specific number of residential lots or units approved for the parcel based on an approved tentative or final tract map or an approved development plan. This land use classification shall be assessed at 1.0 EBU per planned single-family residential unit.
Exempt Parcels — This land use classification identifies parcels that receive little or no benefit from the improvements and are assigned 0.00 EBU. This land use classification may include, but is not limited to lots or parcels identified as:
• Public streets and other roadways (typically not assigned an APN by the County); • Public Easements including greenbelts, parkways, parks, dedicated open space areas or utility rights-of-ways or other public lands that are considered part of the District improvements or have similar characteristics; and
• Properties with restricted development potential such as common areas, sliver parcels and bifurcated lots.
Assessment Calculations
The benefit formula and assessment calculation applied to parcels within the District is based on the parcel’s special benefit received as compared to all other parcels benefiting from the improvements. The net annual cost of the maintenance, servicing and operation of the improvements and facilities is proportionately and equitably spread to all parcels that benefit from the District improvements utilizing the proportional special benefit allocation outlined previously.
The following formulas are used to calculate each parcel’s proportional benefit and assessment.
Balance to Levy = Levy Amount per Benefit Unit
Number of Benefit Units (EBU) (Assessment Rate)
Assessment Rate x Parcel’s Calculated EBU = Parcel’s Assessment Amount 60 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 11 of 16
C. ASSESSMENT RANGE FORMULA
All budget items may be impacted by inflation in subsequent years. In an effort to minimize this impact on the District and ensure the long life of the improvements, an assessment range formula for inflation is included as part of the maximum assessment rate presented to the property owners within the District for approval. The formula, as described herein, provides for annual inflationary adjustment to the maximum assessment rate that may be imposed each year without requiring the extensive procedure and cost of balloting for normal operational cost increases. The purpose of establishing an assessment range formula is to provide for reasonable increases and inflationary adjustments to the assessment amounts without requiring costly noticing, mailing, and ballot procedures, which would further increase the assessments. The annual inflationary formula (assessment range formula) described herein is part of the assessment approved by the property owners and should provide for modest increases to the assessment revenues to meet anticipated cost increases in labor and materials that result from normal inflationary factors.
Commencing each fiscal year thereafter, the maximum assessment rate established in the previous fiscal year shall be adjusted by the greater of:
(1) Three percent (3.0%); or
(2) The percentage increase of the Local Consumer Price Index (CPI).
The Consumer Price Index used for the inflationary adjustment shall be for the San Francisco-Oakland-San Jose, since renamed to San Francisco-Oakland-Hayward Area for All Urban Consumers, as established by the U.S. Bureau of Labor Statistics.
Each fiscal year the City shall identify the annual percentage change in the CPI, using the difference over a 12-month period between the current year and of the previous year. This annual percentage change in the CPI is generally reflected by the percentage change for the preceding calendar year (January to December), but a similar time period may be used if more current data is available. This percentage difference shall then establish the range of increase to the maximum assessment rates allowed based on CPI. If the percentage change in the CPI is less than three percent (3%), the maximum assessment rates shall be increased by three percent. Should the Bureau of Labor Statistics revise such index or discontinue the preparation of such index, the City shall use the revised index or comparable system as approved by the City Council for determining fluctuations in the cost of living.
The adjusted maximum assessments are calculated each fiscal year independent of the annual budget and annual assessments. Although the adjusted maximum assessments will increase each year, the budget and annual assessment rates adopted for a fiscal year may not change from the previous fiscal year. If the budget and the corresponding District assessments for that fiscal year do not require an increase or the increase is less than the allowable adjusted maximum assessment rates, then the assessments required to meet the expenditures shall be applied. If the budget and the corresponding assessments for a given fiscal year require an increase greater than the adjusted maximum assessment rates, then the assessments are considered increased assessments and mailed notices and approval of the property owners through a property owner ballot proceeding would be required before the assessment increases may be imposed.
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III. DISTRICT BUDGET
The following provides the budget establishing the maximum annual assessment rates for the District for fiscal year 2023/2024. The budget includes an estimate of anticipated expenditures and revenues associated with the maintenance and operation of the improvements. The budget and assessment for fiscal year 2023/2024 reflect the anticipated costs and expenses to provide the improvements for all twelve (12) months of the fiscal year.
Starting Fiscal Year 2015/2016, the City began maintenance, operation and servicing of the local landscaping and street lighting improvements. The City has decided to Levy the parcels within the District at $255.00 for Fiscal Year 2023/2024. This will be the eighth levy since the creation of the District in 2007/2008.
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City of Shasta Lake
Fiscal Year 2023/2024 Budget
DEER CREEK MANOR LANDSCAPING AND LIGHTING DISTRICT
ANNUAL MAINTENANCE (DIRECT COSTS) District Totals
Landscape and Lighting Maintenance Expenses
Turf, Landscape and Facility Maintenance $8,000
Median Maintenance 400
Open Space Maintenance 400
Tree Maintenance 500
Landscape Utilities (Water/Electricity) 6,500
Streetlight Maintenance and Energy 875
Miscellaneous Materials and Equipment 380
Total Landscaping and Lighting Maintenance $17,055
REPLACEMENT/REHABILITATION (CIP)
Collection for Future Rehabilitation/Replacements
Turf, Landscape and Facility Rehabilitation/Replacement $500 Median Rehabilitation/Replacement 100
Open Space Rehabilitation/Replacement 100
Tree Rehabilitation/Replacement 1,500
Total Collection for Capital Improvement/Rehabilitation Fund $2,200
ADMINISTRATION
Professional Fees for Admin $500
City Annual Admin 250
County Administration Fee 58
Miscellaneous Administrative Expenses 150
Total Annual Administration Costs $958
Total Costs and Expenses $20,213
Levy Adjustments
Reserve Fund / CIP Collection $952
Rounding 0
BALANCE TO LEVY $21,165
DISTRICT STATISTICS
Total Parcels in District 88
Parcels Levied 83
Total EBU 83.00
Prior Year Levy per EBU $255.00
Proposed Assessment per EBU $255.00
Annual Inflator (greater of CPI or 3%) 4.88%
Maximum Assessment Rate per EBU $548.9788
FUND BALANCE INFORMATION
Beginning Fund Balance (Reserves and CIP) $39,828
Reserve Fund/CIP Collection 952
Estimated Ending Fund Balance (Reserves and CIP) $40,780 Note: Totals may not foot due to rounding.
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IV. DISTRICT DIAGRAM
The parcels within this District consist of lots, parcels and subdivisions of land located in the planned residential development known as Deer Creek Manor. The District covers approximately thirty-six acres (36 acres) in the City of Shasta Lake.
The following District Diagram is based on the Shasta County Assessor’s Maps and the Shasta County Assessor’s information and identifies all the parcels of land within the District, as the same existed at the time this Report was prepared. The combination of this map and the Assessment Roll contained in this Report constitute the District Assessment Diagram.
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65 FY 2023/2024 Deer Creek Manor Landscape and Lighting District Page 16 of 16
V. ASSESSMENT ROLL
Parcel identification for each lot or parcel within the District is based on the Assessment Diagram presented herein and is based on available parcel maps and property data from the Shasta County Assessor’s Office at the time the Engineer’s Report was prepared. A listing of the lots and parcels assessed within this District along with the assessment amounts is provided herein.
Non-assessable lots or parcels may include, but are not limited to, public streets and other roadways (typically not assigned an APN by the County); dedicated public easements, open space areas, rights-of-way, common areas; bifurcated lots, and any other property that cannot be developed or has little or no value. These types of parcels are considered to receive little or no benefit from the improvements and are therefore exempted from assessment.
If any parcel submitted for collection is identified by the County Auditor-Controller to be an invalid parcel number for the fiscal year, a corrected parcel number and/or new parcel numbers will be identified and resubmitted to the County Auditor-Controller. The assessment amount levied and collected for the resubmitted parcel or parcels shall be based on the method of apportionment and assessment rate described in this Report as approved by the City Council. Therefore, if a single parcel is subdivided to multiple parcels, the assessment amount applied to each of the new parcels shall be recalculated and applied according to the approved method of apportionment and assessment rate rather than a proportionate share of the original assessment.
The District is going to assess assessable parcels during the Fiscal Year 2023/2024. The following is a list of parcels, the assessment and the maximum assessment amounts as determined by the assessment rates and method of apportionment described herein. 66 Assessor's Parcel Number Land Use Zone Benefit Units Lot Max Tax Charge 075-150-046-000 GOV A 0.00 1 $0.00 $0.00
075-570-003-000 SFR A 1.00 2 548.98 255.00
075-570-004-000 SFR A 1.00 3 548.98 255.00
075-570-005-000 SFR A 1.00 4 548.98 255.00
075-570-006-000 SFR A 1.00 5 548.98 255.00
075-570-007-000 SFR A 1.00 6 548.98 255.00
075-570-008-000 SFR A 1.00 7 548.98 255.00
075-570-009-000 SFR A 1.00 8 548.98 255.00
075-570-010-000 SFR B 1.00 9 548.98 255.00
075-570-011-000 SFV B 1.00 10 548.98 255.00
075-570-012-000 SFR B 1.00 11 548.98 255.00
075-570-013-000 SFR B 1.00 12 548.98 255.00
075-570-016-000 SFR A 1.00 13 548.98 255.00
075-570-019-000 SFR A 1.00 14 548.98 255.00
075-570-020-000 SFR A 1.00 15 548.98 255.00
075-570-021-000 SFR A 1.00 16 548.98 255.00
075-570-022-000 SFR A 1.00 17 548.98 255.00
075-570-023-000 SFR A 1.00 18 548.98 255.00
075-570-024-000 SFR A 1.00 19 548.98 255.00
075-570-025-000 SFR A 1.00 20 548.98 255.00
075-570-026-000 SFR A 1.00 21 548.98 255.00
075-570-027-000 SFR A 1.00 22 548.98 255.00
075-570-028-000 SFR A 1.00 23 548.98 255.00
075-570-029-000 SFR A 1.00 24 548.98 255.00
075-570-030-000 SFR A 1.00 25 548.98 255.00
075-570-031-000 SFR A 1.00 26 548.98 255.00
075-570-032-000 SFR A 1.00 27 548.98 255.00
075-570-033-000 SFR A 1.00 28 548.98 255.00
075-570-034-000 SFR A 1.00 29 548.98 255.00
075-570-035-000 SFR A 1.00 30 548.98 255.00
075-570-036-000 SFR A 1.00 31 548.98 255.00
075-570-037-000 SFR A 1.00 32 548.98 255.00
075-570-038-000 SFR A 1.00 33 548.98 255.00
075-570-039-000 SFR A 1.00 34 548.98 255.00
075-570-040-000 SFR A 1.00 35 548.98 255.00
075-570-041-000 SFR A 1.00 36 548.98 255.00
075-570-042-000 SFR A 1.00 37 548.98 255.00
075-570-047-000 GOV A 0.0 38 0.00 0.00
075-570-048-000 GOV A 0.0 39 0.00 0.00
075-570-049-000 GOV A 0.0 40 0.00 0.00
075-570-050-000 GOV A 0.0 41 0.00 0.00
075-570-052-000 SFR A 1.00 42 548.98 255.00
075-570-054-000 SFR A 1.00 43 548.98 255.00
075-570-057-000 SFR A 1.00 44 548.98 255.00
075-570-063-000 SFR A 1.00 45 548.98 255.00
075-570-064-000 SFR A 1.00 46 548.98 255.00
075-570-065-000 SFR A 1.00 47 548.98 255.00
075-570-070-000 SFR A 1.00 48 548.98 255.00
075-570-072-000 SFR A 1.00 49 548.98 255.00
075-570-073-000 SFR A 1.00 50 548.98 255.00
075-570-074-000 SFR A 1.00 51 548.98 255.00
075-610-001-000 SFR A 1.00 52 548.98 255.00
075-610-002-000 SFR A 1.00 53 548.98 255.00
075-610-003-000 SFR A 1.00 54 548.98 255.00
075-610-004-000 SFR A 1.00 55 548.98 255.00
075-610-005-000 SFR A 1.00 56 548.98 255.00
075-610-006-000 SFR A 1.00 57 548.98 255.00
075-610-007-000 SFR A 1.00 58 548.98 255.00
075-610-008-000 SFR A 1.00 59 548.98 255.00
075-610-009-000 SFR A 1.00 60 548.98 255.00
075-610-010-000 SFR A 1.00 61 548.98 255.00
075-610-011-000 SFR A 1.00 62 548.98 255.00
075-610-012-000 SFR A 1.00 63 548.98 255.00
075-610-013-000 SFR A 1.00 64 548.98 255.00
075-610-014-000 SFR A 1.00 65 548.98 255.00
075-610-015-000 SFR A 1.00 66 548.98 255.00
075-610-016-000 SFR A 1.00 67 548.98 255.00
075-610-017-000 SFV A 1.00 68 548.98 255.00
075-610-026-000 SFV A 1.00 69 548.98 255.00
075-620-001-000 SFR A 1.00 70 548.98 255.00
075-620-002-000 SFR A 1.00 71 548.98 255.00
075-620-003-000 SFR A 1.00 72 548.98 255.00
075-620-004-000 SFR A 1.00 73 548.98 255.00
075-620-005-000 SFV A 1.00 74 548.98 255.00
075-620-006-000 SFR A 1.00 75 548.98 255.00
075-620-007-000 SFR A 1.00 76 548.98 255.00
075-620-008-000 SFR A 1.00 77 548.98 255.00
075-620-009-000 SFR A 1.00 78 548.98 255.00
075-620-010-000 SFR A 1.00 79 548.98 255.00
075-620-011-000 SFR A 1.00 80 548.98 255.00
075-620-012-000 SFR A 1.00 81 548.98 255.00
075-620-013-000 SFR A 1.00 82 548.98 255.00
075-620-014-000 SFV A 1.00 83 548.98 255.00
075-620-015-000 SFR A 1.00 84 548.98 255.00
075-620-016-000 SFR A 1.00 85 548.98 255.00
City of Shasta Lake
Deer Creek Landscaping and Lighting District
Preliminary Assessment Roll
Fiscal Year 2023/2024
Deer Creek Manor DMD Fiscal Year 2023/2024 Preliminary Assessment Page 1 of 2 67 Assessor's Parcel Number Land Use Zone Benefit Units Lot Max Tax Charge City of Shasta Lake
Deer Creek Landscaping and Lighting District
Preliminary Assessment Roll
Fiscal Year 2023/2024
075-620-017-000 SFR A 1.00 86 548.98 255.00
075-620-026-000 SFR A 1.00 87 548.98 255.00
075-620-028-000 SFR A 1.00 88 548.98 255.00
Total: 83.00 $45,565.24 $21,165.00
Parcel Count: 88
Deer Creek Manor DMD Fiscal Year 2023/2024 Preliminary Assessment Page 2 of 2 68 27368 Via Industria
Suite 200
Temecula, CA 92590
T 951.587.3500 | 800.755.6864
F 951.587.3510
www.willdan.com/financial
City of Shasta Lake
Deer Creek Manor
Drainage Maintenance District
2023/2024
ENGINEER’S ANNUAL LEVY REPORT
Intent Meeting: April 18, 2023
Public Hearing: May 2, 2023
69 AFFIDAVIT FOR THE ENGINEER’S REPORT
DEER CREEK MANOR DRAINAGE MAINTENANCE DISTRICT
Establishment of Annual Assessments for the:
City of Shasta Lake
County of Shasta, State of California
This Final Engineer’s Report (the “Report”) and the enclosed District Diagram showing the exterior boundaries of the territory formed as the Deer Creek Manor Drainage Maintenance District (hereinafter referred to as “District”); and each lot, parcel, and subdivision of land within said territory as the same existed at the time of the passage of the Resolution of Intention. Reference is hereby made to the Shasta County Assessor’s maps for a detailed description of the lines and dimensions of each lot, parcel, and subdivision of land within said territory and said District. The enclosed Report that includes a description of the plans and specifications, method of apportionment, budgets and special benefit assessments associated therewith. The undersigned respectfully submits the enclosed Report as directed by the City Council.
Dated this ____________ day of ______________, 2023.
Willdan Financial
Assessment Engineer
On Behalf of the City of Shasta Lake
By: ________________________________
Chonney Gano, Project Manager
District Administration Services
By: ________________________________
Tyron Peters
PE # C 81888
70 TABLE OF CONTENTS
INTRODUCTION.....................................................................................................1 I. PLANS AND SPECIFICATIONS .......................................................................4 A. BENEFITING PROPERTIES WITHIN THE DISTRICT .............................4 B. FUNDING AUTHORIZED BY THE 1982 ACT...........................................4 C. DESCRIPTION OF IMPROVEMENTS......................................................5 Drainage Maintenance .................................................................................................... 5 II. METHOD OF APPORTIONMENT ...................................................................7 A. BENEFIT ANALYSIS ................................................................................7 B. ASSESSMENT METHODOLOGY............................................................8 Equivalent Benefit Units................................................................................................. 8 Assessment Calculations............................................................................................... 9 C. ASSESSMENT RANGE FORMULA........................................................10 III. DISTRICT BUDGET .......................................................................................11 IV. DISTRICT DIAGRAM.....................................................................................13 V. ASSESSMENT ROLL....................................................................................15 71 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 1 of 15
INTRODUCTION
Pursuant to the provisions of the Benefit Assessment Act of 1982, being Chapter 6.4 of the California Government Code, commencing with Section 54703 (hereafter referred to as the “1982 Act”), and in compliance with the substantive and procedural requirements of the California State Constitution Article XIIID (hereafter referred to as the “California Constitution”), the City Council of the City of Shasta Lake, County of Shasta, State of California (hereafter referred to as the “City”), formed and levied special benefit assessments for the district designated as:
City of Shasta Lake
Deer Creek Manor Drainage Maintenance District
(hereafter referred to as the “District”), which includes all lots and parcels of land within the residential subdivisions known as Deer Creek Manor that have been determined to receive special benefits from the improvements and facilities installed and constructed in conjunction with the development of such residential properties within the City limits of Shasta Lake. This Engineer’s Report (hereafter referred to as the “Report”) has been prepared as required pursuant to Article 4, Section 54716 of the 1982 Act.
The City Council formed the District to levy and collect annual assessments for Shasta County (the “County”) tax rolls to provide ongoing funding for the costs and expenses required to service and maintain the drainage (storm drain) improvements and related infrastructure that have been constructed in association with the development of properties within the District. The improvements, maintenance and services provided by the District, and the assessments described herein, are made pursuant to the 1982 Act and the substantive and procedural provisions of the California Constitution.
This Report describes the District, the improvements, and the assessments levied against properties in connection with the special benefits that the properties will receive from the maintenance and servicing of the District improvements and facilities commencing in Fiscal Year 2023/2024. The assessments described herein will provide a funding source (annual assessments) for the continued operation, maintenance and servicing of the drainage improvements, and related infrastructure (facilities).
The word “parcel,” for the purposes of this Report, refers to an individual property assigned its own Assessor’s Parcel Number (APN) by the County Assessor’s Office. The County Auditor-Controller uses Assessor’s Parcel Numbers and specific Fund Numbers to identify properties assessed on the tax roll for special benefit assessments.
Each subsequent fiscal year, a Report shall be prepared and presented to the City Council describing any changes to the services, the annual budget and assessments for that fiscal year, and the City Council shall hold a noticed public hearing regarding these matters prior to approving and ordering the levy of assessments. If the annual budget for the District requires an assessment that exceeds the maximum assessment described herein (as approved by the property owners at the time of the District formation), the new or increased assessment must be confirmed through another property owner protest ballot proceeding before such an assessment may be imposed.
72 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 2 of 15
This Report consists of five (5) parts:
Part I
Plans and Specifications: A general description of the District, the improvements, and authorized services for parcels within the District will be assessed is provided in this section of the Report. The specific drainage plans and associated facility specifications prepared in connection with the development of properties within the Deer Creek Manor subdivision (also known as the “Drainage Plans”) are on file in the offices of the City of Shasta Lake, and by reference these plans and specifications are made part of this Report. Based on these improvement and subdivision plans, it has been determined that the District will establish two (2) benefit zones. Four (4) parcels within the Deer Creek Manor subdivision shall not be a part of the District. These four parcels are accessed from Buckingham Drive and it has been determined that the development of these properties do not require the construction of the improvements associated with this District and therefore receive no special benefit from the drainage facilities provided and maintained by the District.
Part II
Method of Apportionment: A discussion of benefits the improvements and services provide to properties within the District and the method of calculating each property’s proportional special benefit and assessment. This section also identifies and outlines an Assessment Range Formula (Annual Inflation Adjustment) that provides for an annual adjustment to the maximum assessment rate that establishes limits on future assessments, but also provides for reasonable cost adjustments due to inflation without the added expense of additional property owner protest ballot proceedings.
Part III
District Budget: The annual costs to operate, maintain and service the drainage improvements installed and constructed to support the development of properties within the District. This budget includes direct maintenance costs and incidental expenses including, but not limited to, administration expenses and the collection of appropriate fund balances to establish the initial Maximum Assessment Rates approved by the property owners of record. The special benefit assessments are based on an estimate of the overall operation, maintenance and servicing costs minus any costs that are not assessed as special benefit. The assessments for each subsequent year shall be based on the estimated net annual cost for the City to operate, maintain and service the improvements for that fiscal year including the collection of funds in installments for periodic or long-term maintenance activities. The Maximum Assessment Rates (Rates per Equivalent Benefit Unit) identified in the budgets of this Report establish the Maximum Assessment Rates for the District in Fiscal Year 2023/2024 and shall be adjusted annually by the Assessment Range Formula described in the method of apportionment.
Part IV
District Diagram: A Diagram showing the exterior boundaries of the District is provided in this section of the Report and includes all parcels that will receive special benefits from the District improvements. Parcel identification, the lines and dimensions of each lot, parcel and subdivision of land within the District are inclusive of all parcels as shown on 73 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 3 of 15
the Shasta County Assessor's Parcel Maps as they existed at the time this Report was prepared and shall include all subsequent subdivisions, lot line adjustments or parcel changes therein. Said parcels of land are consistent with and identified by the following Shasta County Assessor's Parcel Maps: Book 075, Page 150, Parcel 046; Book 075,
Book 075, Page 620, Parcels 001 through 028 and reference is hereby made to the Shasta County Assessor’s maps for a detailed description of the lines and dimensions of each lot and parcel of land within the District.
Part V
Assessment Roll: The assessment amount for each parcel is based on the parcel’s proportional special benefit as outlined in the method of apportionment and the initial Maximum Assessment Rates established in this report. The Assessment Roll also provides the assessment amount for each parcel for the Fiscal Year 2023/2024 based on the method of apportionment and estimated expenses (budget) for Fiscal Year 2023/2024.
74 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 4 of 15
I. PLANS AND SPECIFICATIONS
A. BENEFITING PROPERTIES WITHIN THE DISTRICT
The territory within the District, totaling approximately thirty-six acres (36 acres), consists of all lots, parcels and subdivisions of land within the Deer Creek Manor subdivision that directly benefit from the improvements and services provided by the District. The District is comprised of 83 of the 88 single-family residential properties within the Deer Creek Manor subdivision and various other properties that collectively represent the easements and public areas within the District.
The District is situated in the southern portion of the City of Shasta Lake generally located:
• North of Trinity Street;
• South of Pine Grove Avenue; and
• West of Cascade Boulevard and Interstate 5
The parcels within the District at the time this District was formed were identified on the Shasta County Assessor’s Secured Roll (as of July 18, 2007) and the Assessor’s Parcel Maps as follows:
Book 075, Page 150, Parcel 046,
Book 075, Page 560, Parcels 005 through 042; and
Book 075, Page 570, Parcels 001 through 051,
B. FUNDING AUTHORIZED BY THE 1982 ACT
As generally defined by the Benefit Assessment Act of 1982 and applicable to this District, the City imposed a special benefit assessment to finance the maintenance and operation costs of the following services:
1) Drainage and Flood Control
In addition to imposing a benefit assessment for the annual maintenance and operation of the District improvements, the City may authorize an assessment or utilize existing assessment revenues to finance the installation, construction or replacement of drainage and flood control facilities. While such activities are permitted under the 1982 Act and may be applicable to this District, the funds necessary to perform such services or activities are generally greater than can be reasonably collected in a single year’s levy of assessments. Therefore, many of the services and activities associated with this District will be collected in installments over several years and held in a reserve fund until such time the services or activities are deemed necessary by the City. However, it should be noted that some of the funds collected in annual installments may not be fully utilized or may be insufficient to cover the full cost of such projects, but should be sufficient to cover the cost of normal repairs that can reasonably be anticipated as a result of typical weather, use, water flow and erosion over a twenty to thirty year period.
While the assessments for the District have been established to fund normal and anticipated maintenance needs for the improvements, major rehabilitation projects or reconstruction of the improvements resulting from unforeseen damages, caused by 75 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 5 of 15
natural disasters such as earthquakes or floods, are not included in the assessments.
The extent and cost of such activities are not easily predicted and it would not be reasonable or appropriate to collect and hold such significant fund in reserves for such projects.
C. DESCRIPTION OF IMPROVEMENTS
The purpose of this District is to fund the activities necessary to operate, maintain and service the drainage improvements constructed in connection with the development of properties within the residential subdivision known as Deer Creek Manor. The maintenance, operation and servicing of these improvements may include, but are not limited to, all materials, equipment, labor, and incidental expenses deemed necessary to keep the drainage improvements in satisfactory condition. The maintenance of the improvements and related activities shall be funded entirely through the District assessments. The District services are generally described as:
Drainage Maintenance
Drainage maintenance may include, but is not limited to: grading of access perimeter roads associated with the drainage facilities; repair of erosion to such roads; debris clearance; dust control through the application of soil stabilization agents; weed abatement; mosquito and vector control; water treatment and monitoring; maintenance, cleaning and minor repairs to storm drain inlets, outlets, pumps, filters, pipes and other drainage related equipment. The annual assessments for this District are intended to support the drainage facilities and the maintenance program that will adequately regulate and control storm water runoff resulting from and associated with the development of properties within the District. This maintenance program may include but is not limited to:
inspection and documentation of the system; cleaning, servicing or repair of the facilities and equipment; and the partial removal, replacement or rehabilitation of equipment and facilities. Generally, the drainage improvements for this District include, but are not limited to:
• Approximately 37,370 square feet of natural vegetation drainage basin area within the District;
• Approximately 5,675 square feet of landscaped drainage basin area within the District; • Approximately 17,215 square feet of landscaped channel ways within the District; • Approximately thirty (30) inlets, outlets and manholes located within the District; • Approximately 2,010 square feet of block retaining walls located within the District; • Approximately 4,592 square feet of storm drain fencing within the District; • Approximately 1,200 square feet of asphalt access/service roads within the District; • Approximately 3,215 linear feet of storm drain pipe ranging from 18 inches to 42 inches in diameter;
• Approximately 835 linear feet of flood control pipes associated with the French drain / Drainage System within the District;
76 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 6 of 15
The Public Works Department shall authorize and schedule all operational activities and maintenance of the drainage and storm water pollution treatment infrastructure, facilities and services that may include, but are not limited to:
• Cleaning of storm drain inlets, catch basins, manholes and pipes as needed; • Stencil maintenance and documentation of facilities as required by Federal, State and County regulations;
• Cleaning and landscape maintenance of the drainage basin, bio-filter areas and channel ways as needed;
• Debris removal and pest control in and around the drainage facilities as needed; • Minor repairs and maintenance of the storm drain inlets, catch basins and outlets as needed;
• Street sweeping services necessary to control debris and water flow for the drainage system; and,
• All operational costs related to the National Pollutant Discharge Elimination System (“NPDES”) compliance requirements.
A portion of the services described above might not be performed on an annual basis but rather as periodic maintenance or due to extraordinary events. The funds necessary for these activities shall be collected as part of the annual assessments and accumulated in a special fund of the District (Reserve Fund). The monies accumulated for these activities shall be spent as needed to perform the services deemed necessary by the City. This process of collecting assessment revenues for the Reserve Fund shall continue until such time the District is dissolved, or the City determines that such additional funding procedures require modification.
While all parcels within the District equally benefit from the maintenance and services associated with the drainage improvements as detailed in the preceding sections, the Regional Water Quality Control Board has required the monitoring and treatment of the water run-off emanating from four (4) parcels within the District, identified as lot numbers 49 through 52 of the Deer Creek Manor subdivision, and further identified as the County Assessor Parcel Numbers 075-570-010, 075-570-011, 075-570-012 and 075-570-013 (hereafter referred to as “Lots 49 through 52”). While the need for this water treatment and monitoring system (known as the “Drainage System”) is required to develop these four lots, this water issue directly affects the overall drainage system within the District and is clearly necessary for the overall development of properties within the District.
Without the installation, implementation and ongoing servicing, maintenance and monitoring of this specialized water treatment system, these four residential lots directly affected would not otherwise be developed and the remaining properties would still be required to address the issue and would therefore be negatively impacted.
Pursuant to an agreement between the developer and the City, the developer shall be responsible for all costs and expenses associated with the maintenance and servicing of the Drainage System for the first two fiscal years, commencing with the year in which said improvements are installed and officially accepted by the City, and by reference, said agreement is incorporated herein and made part of this Report. 77 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 7 of 15
II. METHOD OF APPORTIONMENT
The 1982 Act permits the establishment of assessment districts by agencies for the purpose of providing for the maintenance, operation and servicing of drainage and flood control improvements and appurtenant facilities. The 1982 Act further requires that the cost of these improvements be levied according to benefit rather than assessed value:
“The amount of the assessment imposed on any parcel of property shall be related to the benefit to the parcel which will be derived from the provision of the service.”
Furthermore:
“The annual aggregate amount of the assessment shall not exceed the estimated annual cost of providing the service, except that the legislative body may, by resolution, determine that the estimated cost of work authorized is greater than can be conveniently raised from a single annual assessment and order that the estimated cost shall be raised by an assessment levied and collected in installments. The revenue derived from the assessment shall not be used to pay the cost of any service other than the service for which the assessment was levied.”
The method of apportionment described in this Report for allocation of special benefit assessments utilizes commonly accepted engineering practices and is in compliance with the provisions of the 1982 Act and the California Constitution. The formulas used for calculating assessments reflects the composition of parcels within the District and the improvements and services provided, to fairly apportion the costs based on the special benefits to each parcel.
A. BENEFIT ANALYSIS
Each of the services, and the associated costs and assessments have been carefully reviewed, identified and allocated based on special benefit pursuant to the provisions of the 1982 Act and the California Constitution. The drainage improvements associated with this District are necessary and essential requirements for the orderly development of properties within the District to their full potential, consistent with the conditions for development of the properties, and protection of downstream properties which could be negatively affected by increased storm runoff from the development of these properties. As such, the ongoing operation, servicing and maintenance of these improvements are considered the direct financial obligation of the property owners within the District. Since the parcels assessed are directly served by the drainage improvements, each parcel has a direct investment in the proper maintenance of the various improvements that is over and above any general benefits that may be conferred by such improvements and services.
The construction and installation of these improvements are only necessary for development of the properties within the District. As such, these improvements were not required nor necessarily desired by any properties or developments outside the District boundary and any benefit derived by properties outside the District boundaries is considered incidental. Therefore, it has been determined that the ongoing maintenance, servicing and operation of the District improvements provide no measurable general benefit to properties 78 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 8 of 15
outside the District or to the public at large, but clearly provide distinct and special benefits to properties within the District.
B. ASSESSMENT METHODOLOGY
All costs and expenses associated with the District’s improvements and services shall be fairly distributed among the parcels based upon the special benefit received by each parcel.
With the exception of the Drainage System, all other costs associated with the District improvements shall be fairly distributed among the parcels based upon the special benefit received by each parcel. Additionally, in compliance with the California Constitution Article XIIID Section 4, each parcel’s assessment may not exceed the reasonable cost of the proportional special benefit conferred to that parcel.
The benefit formula used to determine the assessment obligation is therefore based upon both the improvements that benefit the parcels within the District as well as their respective total Zone budget as compared to other parcels that benefit from those services. Zone A includes all of the parcels within the District except Lots 49 through 52, and said parcels proportionately share in the overall District improvements, including half of the costs associated with the Drainage System. Zone B includes Lots 49 through 52. These lots proportionately share in the overall District improvements and costs, as well as half of the costs associated with the Drainage System.
Equivalent Benefit Units
In order to assess benefits equitably it is necessary to relate each property’s proportional special benefits to the special benefits of all other properties within the District. The method of apportionment established for this District utilizes a weighted method of apportionment known as an Equivalent Benefit Unit (EBU) methodology (sometimes referred to as Equivalent Dwelling Units) that uses the single-family home site as the basic unit of assessment. A single-family home site equals one Equivalent Benefit Unit (EBU) and all other land uses are assigned a weighted EBU based on an assessment formula that equates various property characteristics to that of the single-family home site. This proportional weighting may be based on several factors that may include, but are not limited to: the type and status of development (land use), size of the property, location of the property, development plans or restrictions, vehicular trip generation, street frontage, population densities or other property related factors. Generally, for most districts the calculation of each parcel’s proportional special benefit can be reasonably determined by applying one or more of these factors.
While the Equivalent Benefit Unit method of apportioning special benefit is commonly used and applied to districts that have or may have a wide range of land use classifications (both residential and non-residential use) or have significant variations in the phasing of improvements and/or property development, this particular District involves only the development of single-family residential properties that will receive proportionately the same benefit from all the planned improvements, Therefore, each assessed parcel’s special benefits from the improvements are considered equal and each residential unit/parcel has been assigned one (1) EBU.
79 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 9 of 15
The following provides an overview of various land uses and their proportional special benefit as it applies or may apply to this District:
Single-Family Residential Units — This land use is defined as a fully subdivided residential home site with or without a structure. This land use classification shall be assessed at 1.0 EBU per lot or parcel.
Planned Residential Subdivision — This land use is defined as any property not fully subdivided, but has a specific number of residential lots or units approved for the parcel based on an approved tentative or final tract map or an approved development plan. This land use classification shall be assessed at 1.0 EBU per planned single-family residential unit.
Exempt Parcels — This land use classification identifies parcels that receive little or no benefit from the improvements and are assigned 0.00 EBU. This land use classification may include, but is not limited to lots or parcels identified as:
• Public streets and other roadways (typically not assigned an APN by the County); • Public Easements including greenbelts, parkways, parks, dedicated open space areas or utility rights-of-ways or other public lands that are considered part of the District improvements or have similar characteristics; and
• Properties with restricted development potential such as common areas, sliver parcels and bifurcated lots.
Assessment Calculations
The benefit formula and assessment calculation applied to parcels within the District is based on the parcel’s special benefit received as compared to all other parcels benefiting from the improvements. The net annual cost of the maintenance, servicing and operation of the improvements and facilities is proportionately and equitably spread to all parcels that benefit from the District improvements utilizing the proportional special benefit allocation outlined previously.
The following formulas are used to calculate each parcel’s proportional benefit and assessment.
Balance to Levy (For the
Zone) = Levy Amount per Benefit Unit
Number of Benefit Units (Assessment Rate)
(EBU)
Assessment Rate x Parcel’s Calculated EBU = Parcel’s Assessment Amount 80 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 10 of 15
C. ASSESSMENT RANGE FORMULA
All budget items may be impacted by inflation in subsequent years. In an effort to minimize this impact on the District and ensure the long life of the improvements, an assessment range formula for inflation is included as part of the maximum assessment rate presented to the property owners within the District for approval. The formula, as described herein, provides for annual inflationary adjustment to the maximum assessment rate that may be imposed each year without requiring the extensive procedure and cost of balloting for normal operational cost increases. The purpose of establishing an assessment range formula is to provide for reasonable increases and inflationary adjustments to the assessment amounts without requiring costly noticing, mailing, and ballot procedures, which would further increase the assessments. The annual inflationary formula (assessment range formula) described herein is part of the assessment approved by the property owners and should provide for modest increases to the assessment revenues to meet anticipated cost increases in labor and materials that result from normal inflationary factors.
Commencing each fiscal year thereafter, the maximum assessment rate established in the previous fiscal year shall be adjusted by the greater of:
(1) Three percent (3.0%); or,
(2) The percentage increase of the Local Consumer Price Index (CPI).
The Consumer Price Index used for the inflationary adjustment shall be for the San Francisco-Oakland-San Jose Area for All Urban Consumers, since renamed to San Francisco-Oakland-Hayward, as established by the U.S. Bureau of Labor Statistics.
Each fiscal year the City shall identify the annual percentage change in the CPI, using the difference over a 12-month period between the current year and of the previous year. This annual percentage change in the CPI is generally reflected by the percentage change for the preceding calendar year (January to December), but a similar time period may be used if more current data is available. This percentage difference shall then establish the range of increase to the maximum assessment rates allowed based on CPI. If the percentage change in the CPI is less than three percent (3%), the maximum assessment rates shall be increased by three percent. Should the Bureau of Labor Statistics revise such index or discontinue the preparation of such index, the City shall use the revised index or comparable system as approved by the City Council for determining fluctuations in the cost of living.
The adjusted maximum assessments are calculated each fiscal year independent of the annual budget and annual assessments. Although the adjusted maximum assessments will increase each year, the budget and annual assessment rates adopted for a fiscal year may not change from the previous fiscal year. If the budget and the corresponding District assessments for that fiscal year do not require an increase or the increase is less than the allowable adjusted maximum assessment rates, then the assessments required to meet the expenditures shall be applied. If the budget and the corresponding assessments for a given fiscal year require an increase greater than the adjusted maximum assessment rates, then the assessments are considered increased assessments and mailed notices and approval of the property owners through a property owner ballot proceeding would be required before the assessment increases may be imposed.
81 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 11 of 15
III. DISTRICT BUDGET
The following provides the budget establishing the maximum annual assessment rates for the District for Fiscal Year 2023/2024 The budget includes an estimate of anticipated expenditures and revenues associated with the maintenance and operation of the improvements. The budget and assessments for Fiscal Year 2023/2024 reflect the anticipated costs and expenses to provide the improvements for all twelve (12) months of the fiscal year.
The City took over ongoing maintenance, operation and servicing of the local drainage maintenance authorized by the District beginning in Fiscal Year 2015/2016. The City has decided to levy the parcels within the District at a rate of $36.14 per EBU for Fiscal Year 2023/2024. This will be the eighth levy since the creation of the District in 2007/2008. 82 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 12 of 15
City of Shasta Lake
Fiscal Year 2023/2024 Budget
DEER CREEK MANOR DRAINAGE MAINTENANCE DISTRICT
ANNUAL MAINTENANCE (DIRECT COSTS) District Totals
Drainage Improvements
Annual Inspection & Maintenance: Drainage Basin $250
Annual Inspection & Maintenance: Storm Drain Fencing and/or Access Roads 100 Annual Inspection & Maintenance: Drainage Infrastructure 250 Annual Maintenance Expenses: Drainage $600
REPLACEMENT/REHABILITATION (CIP)
Collection for Future Rehabilitation/Replacements
Periodic Debris Removal, Rehabilitation & Repairs: Drainage Basin $500 Periodic Repairs & Rehabilitation: Storm Drain Fencing and/or Access Roads 600 Periodic Repairs & Rehabilitation: Storm Drain Infrastructure 300 Periodic Maintenance & Projects: Drainage $1,400
ADMINISTRATION
Professional Fees & Services $500
City Annual Administrative and Overhead 250
County Admin Fee 58
Miscellaneous Administration Expenses 192
Total Annual Administrative Costs $1,000
Total Costs and Expenses $3,000
LEVY ADJUSTMENTS
Reserve Fund / CIP Collection $0
Rounding $0
BALANCE TO LEVY $3,000
DISTRICT STATISTICS
Total Parcels in District 88.00
Parcels Levied 83.00
Total EBU 83.00
Prior Year Levy per EBU $36.14
Proposed Assessment per EBU $36.14
Annual Inflator (greater of CPI or 3%) 4.88%
Maximum Assessment Rate per EBU $522.0351
FUND BALANCE INFORMATION
Estimated Beginning Reserve Balance $19,720
Reserve Fund / CIP Collection 0
Estimated Ending Fund Balance (Reserves & CIP) $19,720
Note: Totals may not foot due to rounding
83 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 13 of 15
IV. DISTRICT DIAGRAM
The parcels within this District consist of lots, parcels and subdivisions of land located in the planned residential development known as Deer Creek Manor. The District covers approximately thirty-six acres (36 acres) in the City of Shasta Lake.
The following District Diagram is based on the Shasta County Assessor’s Maps and the Shasta County Assessor’s information and identifies all the parcels of land within the District, as the same existed at the time this Report was prepared. The combination of this map and the Assessment Roll contained in this Report constitute the District Assessment Diagram. The Maximum Assessment Rate, assessment range formula and the assessment amount for each of the existing parcels within the District as described herein, shall be presented to the property owners of record for approval or protest in accordance with the provisions of the California Constitution.
84 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 14 of 15 85 FY 2023/2024 Deer Creek Manor Drainage Maintenance District Page 15 of 15
V. ASSESSMENT ROLL
Parcel identification for each lot or parcel within the District is based on the Assessment Diagram presented herein and is based on available parcel maps and property data from the Shasta County Assessor’s Office at the time the Engineer’s Report was prepared. A listing of the lots and parcels assessed within this District along with the assessment amounts is provided herein.
Non-assessable lots or parcels may include, but are not limited to, public streets and other roadways (typically not assigned an APN by the County), dedicated public easements, open space areas, rights-of-way, common areas, bifurcated lots, and any other property that cannot be developed or has little or no value. These types of parcels are considered to receive little or no benefit from the improvements and are therefore exempted from assessment.
If any parcel submitted for collection is identified by the County Auditor-Controller to be an invalid parcel number for the fiscal year, a corrected parcel number and/or new parcel numbers will be identified and resubmitted to the County Auditor-Controller. The assessment amount levied and collected for the resubmitted parcel or parcels shall be based on the method of apportionment and assessment rate described in this Report as approved by the City Council. Therefore, if a single parcel is subdivided to multiple parcels, the assessment amount applied to each of the new parcels shall be recalculated and applied according to the approved method of apportionment and assessment rate rather than a proportionate share of the original assessment.
The District will assess parcels during Fiscal Year 2023/2024 at the rate $36.14 per parcel.
The following is a list of the parcels, the charge and the maximum assessment amounts for each of the parcels within the District as determined by the assessment rates and method of apportionment described herein:
86 Assessor's Parcel Number Land Use Zone Benefit Units Lot Max Tax Charge 075-150-046-000 GOV A 0.00 1 $0.00 $0.00
075-570-003-000 SFR A 1.00 2 522.04 36.14
075-570-004-000 SFR A 1.00 3 522.04 36.14
075-570-005-000 SFR A 1.00 4 522.04 36.14
075-570-006-000 SFR A 1.00 5 522.04 36.14
075-570-007-000 SFR A 1.00 6 522.04 36.14
075-570-008-000 SFR A 1.00 7 522.04 36.14
075-570-009-000 SFR A 1.00 8 522.04 36.14
075-570-010-000 SFR B 1.00 9 522.04 36.14
075-570-011-000 SFV B 1.00 10 522.04 36.14
075-570-012-000 SFR B 1.00 11 522.04 36.14
075-570-013-000 SFR B 1.00 12 522.04 36.14
075-570-016-000 SFR A 1.00 13 522.04 36.14
075-570-019-000 SFR A 1.00 14 522.04 36.14
075-570-020-000 SFR A 1.00 15 522.04 36.14
075-570-021-000 SFR A 1.00 16 522.04 36.14
075-570-022-000 SFR A 1.00 17 522.04 36.14
075-570-023-000 SFR A 1.00 18 522.04 36.14
075-570-024-000 SFR A 1.00 19 522.04 36.14
075-570-025-000 SFR A 1.00 20 522.04 36.14
075-570-026-000 SFR A 1.00 21 522.04 36.14
075-570-027-000 SFR A 1.00 22 522.04 36.14
075-570-028-000 SFR A 1.00 23 522.04 36.14
075-570-029-000 SFR A 1.00 24 522.04 36.14
075-570-030-000 SFR A 1.00 25 522.04 36.14
075-570-031-000 SFR A 1.00 26 522.04 36.14
075-570-032-000 SFR A 1.00 27 522.04 36.14
075-570-033-000 SFR A 1.00 28 522.04 36.14
075-570-034-000 SFR A 1.00 29 522.04 36.14
075-570-035-000 SFR A 1.00 30 522.04 36.14
075-570-036-000 SFR A 1.00 31 522.04 36.14
075-570-037-000 SFR A 1.00 32 522.04 36.14
075-570-038-000 SFR A 1.00 33 522.04 36.14
075-570-039-000 SFR A 1.00 34 522.04 36.14
075-570-040-000 SFR A 1.00 35 522.04 36.14
075-570-041-000 SFR A 1.00 36 522.04 36.14
075-570-042-000 SFR A 1.00 37 522.04 36.14
075-570-047-000 GOV A 0.0 38 0.00 0.00
075-570-048-000 GOV A 0.0 39 0.00 0.00
075-570-049-000 GOV A 0.0 40 0.00 0.00
075-570-050-000 GOV A 0.0 41 0.00 0.00
075-570-052-000 SFR A 1.00 42 522.04 36.14
075-570-054-000 SFR A 1.00 43 522.04 36.14
075-570-057-000 SFR A 1.00 44 522.04 36.14
075-570-063-000 SFR A 1.00 45 522.04 36.14
075-570-064-000 SFR A 1.00 46 522.04 36.14
075-570-065-000 SFR A 1.00 47 522.04 36.14
075-570-070-000 SFR A 1.00 48 522.04 36.14
075-570-072-000 SFR A 1.00 49 522.04 36.14
075-570-073-000 SFR A 1.00 50 522.04 36.14
075-570-074-000 SFR A 1.00 51 522.04 36.14
075-610-001-000 SFR A 1.00 52 522.04 36.14
075-610-002-000 SFR A 1.00 53 522.04 36.14
075-610-003-000 SFR A 1.00 54 522.04 36.14
075-610-004-000 SFR A 1.00 55 522.04 36.14
075-610-005-000 SFR A 1.00 56 522.04 36.14
075-610-006-000 SFR A 1.00 57 522.04 36.14
075-610-007-000 SFR A 1.00 58 522.04 36.14
075-610-008-000 SFR A 1.00 59 522.04 36.14
075-610-009-000 SFR A 1.00 60 522.04 36.14
075-610-010-000 SFR A 1.00 61 522.04 36.14
075-610-011-000 SFR A 1.00 62 522.04 36.14
075-610-012-000 SFR A 1.00 63 522.04 36.14
075-610-013-000 SFR A 1.00 64 522.04 36.14
075-610-014-000 SFR A 1.00 65 522.04 36.14
075-610-015-000 SFR A 1.00 66 522.04 36.14
075-610-016-000 SFR A 1.00 67 522.04 36.14
075-610-017-000 SFV A 1.00 68 522.04 36.14
075-610-026-000 SFV A 1.00 69 522.04 36.14
075-620-001-000 SFR A 1.00 70 522.04 36.14
075-620-002-000 SFR A 1.00 71 522.04 36.14
075-620-003-000 SFR A 1.00 72 522.04 36.14
075-620-004-000 SFR A 1.00 73 522.04 36.14
075-620-005-000 SFV A 1.00 74 522.04 36.14
075-620-006-000 SFR A 1.00 75 522.04 36.14
075-620-007-000 SFR A 1.00 76 522.04 36.14
075-620-008-000 SFR A 1.00 77 522.04 36.14
075-620-009-000 SFR A 1.00 78 522.04 36.14
075-620-010-000 SFR A 1.00 79 522.04 36.14
075-620-011-000 SFR A 1.00 80 522.04 36.14
075-620-012-000 SFR A 1.00 81 522.04 36.14
075-620-013-000 SFR A 1.00 82 522.04 36.14
075-620-014-000 SFV A 1.00 83 522.04 36.14
075-620-015-000 SFR A 1.00 84 522.04 36.14
075-620-016-000 SFR A 1.00 85 522.04 36.14
City of Shasta Lake
Deer Creek Manor Drainage Maintenance District
Preliminary Assessment Roll
Fiscal Year 2023/2024
Deer Creek Manor DMD Fiscal Year 2023/2024 Preliminary Assessment Page 1 of 2 87 Assessor's Parcel Number Land Use Zone Benefit Units Lot Max Tax Charge City of Shasta Lake
Deer Creek Manor Drainage Maintenance District
Preliminary Assessment Roll
Fiscal Year 2023/2024
075-620-017-000 SFR A 1.00 86 522.04 36.14
075-620-026-000 SFR A 1.00 87 522.04 36.14
075-620-028-000 SFR A 1.00 88 522.04 36.14
Total: 83.00 $43,328.91 $3,000.00
Parcel Count: 88
Deer Creek Manor DMD Fiscal Year 2023/2024 Preliminary Assessment Page 2 of 2 88 Report & Recommendation 6 Reviewed and Approved
City Manager
AGENDA ITEM
City Council Meeting
TO: Jessaca Lugo, City Manager
City Council
FROM: Toni Coates, City Clerk
DATE: January 9, 2023
SUBJECT: Planning Commission
FILE NO: C-080-634-080
RECOMMENDATION:
Staff recommends that City Council review and consider applicants for an appointment to the Planning Commission to fill one vacant seat.
BACKGROUND:
Planning Commissioner Tena Eisenbeisz was recently elected to the City Council which created a vacancy on the Planning Commission with a term expiration of February 2026. A vacancy notice was posted locally, as per the adopted policy, and published in the Record Searchlight to advertise the vacancy. The City Clerk has received letters of interest/resumes from Charles Fleming, Kristie Mathews, Julia Screechfield, and Trey Sherrell.
FISCAL IMPACTS:
None
ATTACHMENTS:
Letters/Resumes for four applicants
89 RESOLUTION CC-2023-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE APPOINTING ___________________ TO THE SHASTA LAKE PLANNING COMMISSION FOR A TERM EXPIRING IN DECEMBER 2026
WHEREAS, the City Council of the City of Shasta Lake authorized the creation of a City Planning Commission, consisting of five members appointed by the City Council, pursuant to Municipal Code Chapter 2.16; and
WHEREAS, there is one vacancy on the Commission; and
WHEREAS, the vacancy has been posted per the current policy; and WHEREAS, the City Council has received letters & resumes from four applicants seeking appointment.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Shasta Lake that ______________________ is hereby appointed to the Shasta Lake Planning Commission for a a term that expires in February 2026.
PASSED, APPROVED, AND ADOPTED this 18th day of April, 2023 the following vote:
AYES:
NOES:
ABSENT:
________________________________
GREG WATKINS, Mayor
ATTEST:
_______________________________
TONI M. COATES, CMC, City Clerk
90 91
92 93
94 95
96 97
98 99
Report and Recommendations 7
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: April 18, 2023
SUBJECT: Consideration of Utility Rate Study Update Results for the Water Enterprise Fund, and Authorization to proceed with the Public Notification and Setting a Public Hearing for the Adoption of New Water Utility Rates.
FILE NO.: W-100-755-667
RECOMMENDATION:
Staff recommends that City Council adopt a resolution accepting the results of the Water Utility Rate Study Update report completed by PACE Engineering, Inc., direct staff to prepare notification of the proposed rates in accordance with Proposition 218, and to set a public hearing for consideration of adoption of the proposed rates for July 18, 2023.
BACKGROUND
The City of Shasta Lake operates an independent and self-supporting water utility enterprise.
Revenue collected through user rates are exclusively used within the fund to cover operations, maintenance, and capital improvements (with project guidance provided by the 2016-2026 Water Master Plan).
The City, and the Shasta Dam Area Public Utilities District before it, has metered water usage in our service area for many years. In the 1980’s, the SDAPUD implemented tiered water rates to encourage water conservation. The effect was a series of year-over-year usage decreases - in 1988, SDAPUD used approximately 2189 acre-feet of water; in 1990, usage was reduced to 1889 AF, a reduction of 13.8% for a population of approximately 8833 people. For comparison, the City’s last unconstrained water year was 2019, where we used approximately 2054 AF for a population of approximately 10374 people.
Industry standards recommend that water utilities review their rate structure approximately every five years. After incorporation in 1993, the City continued the SDAPUD’s policy of using tiered 100
water rates to encourage conservation. Over time, the tier breakpoints have been adjusted, as shown below:
Rate Study Year Tiers
1986 (2): 1-2000, 2001cf +
1990 (2): 1-2000, 2001+
1994 (2): 1-2000, 2001+
1997 (3): 1-1000 LL, 1-1000, 1001+
2004 (4): 1-1000 LL, 1-1000, 1001-5000, 5000+
2009 (4): 1-1000 LL, 1-1000, 1001-5000, 5000+
2014 (4): 1-1000 LL, 1-1000, 1001-5000, 5000+
2016 (6): 1-1000 LL, 1001-2000 LL, 2001+ LL
1-1000, 1001-2000, 2001+
Notes: LL denotes Lifeline rates.
All tier usage numbers are in cubic feet.
The 2016 rate study was undertaken only two years after the 2014 rate study was adopted. This was because the City had experienced a nearly 30% decline in water sales revenue between 2014 and 2016 due to the ongoing severe drought, the cost of obtaining additional water from outside sources, and additional state mandated conservation measures, and the City needed to adjust its long-term rate structure to continue to maintain effective operations and complete necessary capital improvements.
The 2016 water rate study was completed by Raftelis Financial Consultants, Inc. (RFC) and was the most extensive rate study that the City had ever completed for its public water utility. Following the guidelines presented in the American Water Works Association Manual M1, “Principals of Water Rates, Fees, and Charges”, RFC used the ‘Base-Extra Capacity Method’ for distributing costs across four components: Base Costs, Extra Capacity Costs, Customer Costs, and Direct Fire Protection Costs. These components, broken down into various cost of service subcategories within a legal framework, allowed RFC to prepare proposed updated water rates for the next five years that were fully compliant with California law. The RFC rate study is available for review online at: https://www.cityofshastalake.org/finalratestudy In 2021, the City contracted with PACE Engineering, Inc. (PEI) to perform an update to the 2016 approved water rates. At staff direction, PEI has built upon the extensive and City Councilapproved RFC study to produce the attached 2023 Water Rate Study Update. This Update provides proposed rate adjustments for the next five years (FY 2023-2024 though FY 2027-2028) for both water meter and consumption costs. It is important to note that staff has elected to eliminate rate increases associated with drought stages and to build potential cost increases of wholesale water acquisition for this Study period into the 2023 Water Rate Study Update; as a result, the Drought Rates (rate increases imposed during a State-declared drought) and the PassThrough Rates (rate increases caused by wholesale water cost increases) that were both contained in the RFC study will be eliminated from the rate tables.
The Council has the following alternatives to consider:
1. Provide staff with direction to implement the Proposition 218 noticing process for holding a public hearing on June 20, 2023 on recommended changes to the Water utility rates; or
2. Provide alternate direction to staff.
101
FISCAL IMPACT
Dependent on Council Direction
ATTACHMENTS
2023 Water Rate Study Update (PACE Engineering, Inc.)
Water Utility Rate Study Update Public Hearing Adoption Resolution Raftelis Water Utility Rate Study dated June 15, 2016
Staff report and Ordinance adopting rates August 2016.
DISTRIBUTION
City of Shasta Lake City Council
102
RESOLUTION CC-2023-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE ACCEPTING
THE RESULTS OF THE WATER UTILITY RATE STUDY UPDATE COMPLETED BY PACE ENGINEERING, INC., DIRECT STAFF TO PREPARE PUBLIC NOTIFICATION OF THE PROPOSED RATES IN ACCORDANCE WITH PROPOSITION 218, AND TO SET A PUBLIC
HEARING FOR CONSIDERATION OF ADOPTION OF THE PROPOSED RATES ON JULY 18, 2023
WHEREAS, PACE Engineering, Inc. were engaged by the City for the completion of the 2023 Water Rate Study Update; and
WHEREAS, PACE Engineering, Inc. has completed the 2023 Water Rate Study Update; and WHEREAS, the City Council accepts the results of the 2023 Water Rate Study Update; and WHEREAS, prior to implementing the water rates, the City must prepare public notification of the proposed rates in accordance with Proposition 218 and set a public hearing for consideration of the adoption of the proposed rates.
NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Shasta Lake hereby accepts the results of the 2023 Water Rate Study Update completed by PACE Engineering, Inc., directs staff to prepare public notification of the proposed rates in accordance with Proposition 218, and sets a public hearing for consideration of the adoption of the proposed rates on July 18, 2023.
PASSED, APPROVED, AND ADOPTED this 18th day of April 2023 by the following vote:
AYES:
NOES:
ABSENT:
GREG WATKINS, Mayor
ATTEST:
TONI M. COATES, CMC
City Clerk
103
5155 VENTURE PARKWAY • REDDING, CA 96002 • (530) 244-0202 March 6, 2023
110.100
SENT BY EMAIL ONLY
[email protected]
Tony Thomasy
Water Utility Specialist
City of Shasta Lake
Dear Tony,
Subject: 2023 Water Rate Study Update
The City of Shasta Lake (City) completed its last Water Rate Study in late 2016 and adopted five-year financial plans and rate schedules that established water rates for Fiscal Year (FY) 2016 through FY 2020. The 2016 Water Rate Study was completed by Raftelis Financial Consultants (2016 RFC Study).
In late 2021, the City retained PACE Engineering, Inc. to perform an update to the 2016 RFC Study. After preliminary financial reviews and a workshop with City staff, it was decided to postpone completion of the study for the following reasons:
• The City’s Water Enterprise Fund was in sound shape financially. • Upcoming water purchase needs and associated costs were unknown in light of the Shasta Lake level and precipitation uncertainty.
• Funding for several pending capital improvement projects had yet to be finalized.
For these reasons, it was decided to hold the FY20-21 water rates for one more year and resume the Rate Study Update in late 2022.
REVIEW OF THE 2016 RFC STUDY
The 2016 RFC Study was conducted in accordance with principles set forth in American Water Works Association Manual M1 titled, Principals of Water Rates, Fees and Charges (AWWA Manual M1). In 1949, AWWA appointed a committee on water rates. As time passed, the utility industry recognized the need for a manual of standard practice. Through the work of this committee, the first AWWA Manual M1 was published in 1954. It has been updated several times since, with the current Version 7 being published in 2017. AWWA Manual M1 is considered the “go to” reference for establishing water rates for agencies all over the United States.
For the City, the “Base-Extra Capacity Method” of AWWA Manual M1 was used for distributing costs, which separates costs into four components.
1. Base Costs: Costs associated with meeting average daily demand needs.
2. Extra Capacity Costs: Costs associated with meeting peak demands. 104
City of Shasta Lake March 6, 2023
3. Customer Costs: Costs associated with serving customers, such as meter reading, billing, customer service, etc.
4. Direct Fire Protection Costs: Costs related solely to the fire protection function of a water system, such as fire hydrants and related branch mains and valves.
Chapter 4 of the 2016 RFC Study provides details on the legal framework and rate setting methodology used in that study. This Water Rate Study Update utilizes the methodologies used in the 2016 RFC Study pertaining to cost functionalization, user classification, cost-of-service analysis, and rate derivation practices to prepare updated water rates for the next five years.
Essentially, updated Water Fund revenue requirements and scheduled capital project expenditures are incorporated into the methodologies presented in the 2016 RFC Study.
1. Water Revenue Requirement
This section describes the assumptions used in projecting operating and capital expenses as well as reserve coverage requirements. These assumptions determine the overall revenue adjustments, and therefore the total amount of revenue required from rates. The revenue covers operating and capital expenses as well as reserve funding. Revenue adjustments represent the average rate increase for the City as a whole.
1.1 Inflationary Assumptions
The 2016 RFC Study established forecast inflation percentages for the various major expense categories in the Water Fund. Collectively, the inflation was forecast to be about 4.5% per year. Actual overall Water Fund inflation was about 7.5% per year between FY16-17 and FY20-21.
The approved budget for FY21-22 was about 8.4% higher overall than actual expenditures in FY20-21. Approximately 2.0% of this overall increase was due to the increase in Water Purchase costs associated with the lingering drought. For comparison, the Municipal Cost Index (MCI) tracks inflationary costs for providing municipal services and was developed in 1978 by American City & County. In year 2021, the MCI increased by 10.2%, while the Consumer Price Index (CPI) increased by 7.1%.
Municipal service expenditures are heavily influenced by the cost of energy and labor, while CPI is influenced by consumer goods.
Moving forward and given the uncertainty surrounding needed precipitation to refill Shasta Lake, it is prudent for the City to assume future Water Purchase costs will remain high. Water Purchase costs for FY22-23 are budgeted to be about $600,000, which is about $326K higher than FY20-21 only two years prior.
Water Purchase costs have the largest impact on forecasting the City’s revenue needs.
The City’s FY23-24 budget forecasts overall Water Fund expenditures to be about 2.0% higher than FY22-23, assuming a high Water Purchase cost requirement moving 105
City of Shasta Lake March 6, 2023
forward. Therefore, the following inflationary percentages on major Water Fund expenditures are assumed for FY24-25 through FY27-28, see Table 1.1.
Table 1.1 – Projected Inflation (FY23-24 to FY27-28)
FY23-24
(Budget) FY24-25 FY25-26 FY26-27 FY27-28
General 2.0% 3.0% 3.0% 3.0% 3.0%
Salaries/Benefits 2.0% 5.0% 5.0% 5.0% 5.0%
All Water
Wholesalers¹
2.0% 0.0% 0.0% 0.0% 0.0%
Power 2.0% 3.0% 3.0% 3.0% 3.0%
Chemical 2.0% 3.0% 3.0% 3.0% 3.0%
Capital 5.0% 5.0% 5.0% 5.0% 5.0%
1. Future inflation on Water Purchases assumes the high cost budgeted for FY22-23 will remain moving forward.
1.2 Total Operating Budget
The City’s projected operating budget is shown by fiscal year in Table 1.2. FY23-24 is the year in which rates are calculated and is referred to as the “Test Year.” FY21-22 and FY22-23 are shown for comparison. The Financial Plan study period is from FY23-24 to FY27-28. The operating budget incorporated the inflationary factors discussed hereinbefore.
Table 1.2 – Operating Expenses
Function Actual
FY21-22
Budgeted
FY22-23
Budgeted
FY23-24
Water Administration $920,065 $958,658 $1,116,763
Water Distribution $1,026,869 $1,062,160 $1,067,876
Water Treatment Plant $742,558 $1,022,972 $1,047,505
Water Purchases $205,150 $600,000 $620,000
Total Operating Expenses: $2,894,642 $3,643,790 $3,852,144
1.3 Capital Improvement Plan (CIP)
The City’s 2016 Water Master Plan (WMP) recommended $96.2M worth of improvements to the water system, categorized as follows:
Capacity-Related Improvements: $49.2M
Rehabilitation-Related Improvements: $12.5M
Developer Specific: $34.5M
TOTAL CAPITAL PROJECTS: $96.2M
The majority of the $49.2M capacity-related improvements are required to (1) replace old steel water mains and (2) improve fire flows throughout the City. In addition, there are recommended improvements to the City’s pumping, storage, and water treatment plant infrastructure.
106
City of Shasta Lake March 6, 2023
The City has done well in recent years to secure sizable grants to make improvements to its water infrastructure. It continues to seek any and all potential grant opportunities to ease the financial burden on rate payers. Working with City engineering and operations staff, the capital improvements shown in Table 1.3 are planned over the next five years.
Table 1.3 – Capital Improvement Plan
Function Budgeted
FY22-23
Budgeted
FY23-24
Projected
FY24-25
Projected
FY25-26
Projected
FY26-27
Projected
FY27-28
Toyon Water Plan Demo $250,000 $0 $0 $0 $0 $0
Storage Tank Maintenance
Contract $275,000 $275,000 $275,000 $275,000 $275,000 $275,000 Centimudi Tank (100% Grant) $500,000 $4,800,000 $0 $0 $0 $0 Pressure Reducing Valve
Replacement/Rehab $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 Misc. Budgeted CIP’s $425,000 $0 $0 $0 $0 $0
Ranchera Water
Improvements $1,400,000 $1,400,000 $0 $0 $0 $0
WTP Centrifuge Skid Unit $0 $350,000 $0 $0 $0 $0
WTP Filter, Meter, UCMR5
Testing, Clarifier Beads $75,000 $115,000 $0 $0 $0 $0
WTP Filter-to-Waste
Improvements $0 $0 $0 $500,000 $0 $0
Lake Blvd. Water Transmission
Main Design (100% Grant) $0 $0 $1,000,000 $0 $0 $0
Water Master Plan (WMP)
Update $0 $0 $0 $200,000 $0 $0
Water Meter ERT Replacement $0 $0 $250,000 $250,000 $250,000 $0 BOR Raw Water PS
SCADA/Com Upgrade $0 $0 $0 $100,000 $0 $0
2027 Water Improvements $0 $0 $0 $0 $650,000 $0
2028 Water Improvements $0 $0 $0 $0 $0 $750,000
Total CIP: $3,025,000 $7,040,000 $1,625,000 $1,425,000 $1,275,000 $1,125,000 Grant Funding: $500,000 $4,800,000 $1,000,000 $0 $0 $0
Net CIP Funded w/Rates: $2,525,000 $2,240,000 $625,000 $1,425,000 $1,275,000 $1,125,000
1.4 Existing and Proposed Debt Service
The City has two debt obligations associated with the Water Fund. There are no plans to incur additional debt within the five-year planning period. Table 1.4 shows a summary of the City’s debt obligations over the next five years. Note, the CalPERS loan will be paid off during FY23-24.
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Table 1.4 – Existing and Proposed Debt Service
Function Projected
FY23-24
Projected
FY24-25
Projected
FY25-26
Projected
FY26-27
Projected
FY27-28
I-Bank Water Loan (Principal
and Interest)
$264,613 $271,938 $271,272 $270,586 $269,878
CalPERS Loan (Principal and
Interest)
$12,929 $0 $0 $0 $0
Total Debt Service: $277,542 $271,938 $271,272 $270,586 $269,878
1.5 Reserve Targets
Historically, the City maintained two reserves: (1) an Operating Reserve and (2) a Capital Projects Reserve. City staff has recommended the Water Fund manage one combined single reserve and that a minimum balance of $1.6M be maintained at all times. At the end of this current fiscal year (FY22-23), it is anticipated the City will have about $3.72M in combined reserve.
Operating Reserve: The Operating Reserve is used primarily to meet ongoing cash flow requirements resulting from the disparity in water use and corresponding revenue stream throughout the year. The City’s Operating Reserve target is currently at 25% (three months) of budgeted Operating Expenses and will remain the same.
Capital Projects Reserve: The Capital Projects Reserve is used to fund scheduled capital improvement projects as identified in the City’s 2016 WMP. In addition, it covers any unexpected and unplanned infrastructure repairs and replacements. To fund planned capital improvements, the City will need to generate about $1.34M per year over the next five years.
To meet established reserve balance goals, the amounts shown in Table 1.5 should be accounted for in the Water Fund revenue requirements. Note, the $511,079 is not enough to fund $1.34M/year in planned capital improvements. The deficit will come from current reserve funds and the balance managed to not go below $1.6M in any given year.
Table 1.5 – Reserve Fund Allocations
Reserve Name FY23-24 Reserve
Allocation
Operating Reserve $852,150
Capital Projects Reserve $511,079
Total Reserve FY23-24 Allocation: $1,363,229
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1.6 Proposed Financial Plan and Revenue Adjustments
The proposed revenue adjustments help ensure adequate revenue to fund operating expenses and capital expenditures. Financial plan modelling assumes the first revenue adjustment will occur on July 1, 2023, and subsequent adjustments on July 1 of subsequent years. The proposed revenue adjustments would enable the City to execute the CIP shown in Table 1.3.
Table 1.6 shows the proposed revenue adjustments for the course of the study period.
Table 1.6 – Proposed Revenue Adjustments
Effective Date Proposed Water
Revenue Adjustments
July 1, 2023 6.0%
July 1, 2024 6.0%
July 1, 2025 6.0%
July 1, 2026 6.0%
July 1, 2027 6.0%
Table 1.7 shows the cash flow detail over the next five years assuming the selected Financial Plan.
Table 1.7 – Five-Year Water Operating Cash Flow
Budgeted
FY22-23
Projected
FY23-24
(Test Year)
Projected
FY24-25
Projected
FY25-26
Projected
FY26-27
Projected
FY27-28
Revenue from Current Rates $4,053,512 $4,053,512 $4,053,512 $4,053,512 $4,053,512 $4,053,512 Revenue Adjustments:
FY23-24 – 6.0% $243,211 $243,211 $243,211 $243,211 $243,211 FY24-25 – 6.0% $257,803 $257,803 $257,803 $257,803
FY25-26 – 6.0% $273,272 $273,272 $273,272
FY26-27 – 6.0% $289,668 $289,668
FY27-28 – 6.0% $307,048
Total Additional Rate Revenue: $0 $243,211 $501,014 $774,286 $1,063,954 $1,371,001 Total Rate Revenue: $4,053,512 $4,296,723 $4,554,526 $4,827,798 $5,117,466 $5,424,513 Other Revenue:
Service Connection Fees $32,500 $32,500 $32,500 $32,500 $32,500 $32,500 Interest on Investments $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Misc. Revenue $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 TOTAL REVENUE: $4,120,012 $4,363,223 $4,621,026 $4,894,298 $5,183,966 $5,491,013 109
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Table 1.7 – Five-Year Water Operating Cash Flow - Continued Budgeted
FY22-23
Projected
FY23-24
(Test Year)
Projected
FY24-25
Projected
FY25-26
Projected
FY26-27
Projected
FY27-28
Operating Expenses (Incl. Debt):
Water Administration $958,658 $1,116,763 $1,149,428 $1,174,861 $1,201,048 $1,228,039 Water Distribution $1,062,160 $1,067,876 $1,118,980 $1,172,570 $1,228,769 $1,287,705 Water Treatment Plant $1,022,972 $1,047,505 $1,093,878 $1,142,385 $1,193,129 $1,246,214 Water Purchases $600,000 $620,000 $400,000 $400,000 $400,000 $400,000 Total Operating Expenses: $3,643,790 $3,852,144 $3,762,285 $3,889,816 $4,022,946 $4,161,958 Rate-Funded Capital Projects $2,525,000 $2,240,000 $625,000 $1,425,000 $1,275,000 $1,125,000 TOTAL EXPENSES: $6,168,790 $6,092,144 $4,387,285 $5,314,816 $5,297,946 $5,286,958 Net Cash Flow ($2,048,778) ($1,728,921) $233,741 ($420,519) ($133,980) ($204,055)
2. Cost-of-Service Analysis
A cost-of-service analysis requires two primary components:
1. Functionalize expenses.
2. Allocation of functionalized expenses to cost causation components.
The 2016 RFC Study functionalized Water Fund expenses into the following categories:
• Administrative
• Distribution
• Water Treatment Plant
• Water Purchases
The next task is to functionalize these expense categories to cost components. The 2016 RFC Study allocated the functionalized Water Fund expenses into the following cost components:
• Water Supply
• Delivery
• Maximum Day
• Maximum Hour
• Fire Protection
• Meter
• Customer
• General
• Lifeline
• Conservation
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The cost components consider the cost impacts for delivering water during various usage patterns such as at average (uniform) rates or maximum day or hour conditions. To determine the percentage allocation of the functionalized expenses, shown above, water system peak usage factors are used. These peak factors were established based on actual water use patterns determined during preparation of the City’s 2016 WMP. Refer to Table 2.1.
Table 2.1 – System-Wide Peaking Factors and Allocation to Cost Components Line
Peaking
Factors Base Max Day
Max
Hour
Fire
Protection
A B C D E
1 Base 1.00 100% 0% 0% 0%
2 Max Day 2.18 41% 49% 0% 10%
3 Max Hour 3.63 23% 28% 35% 14%
4 Peak Usage Average
(Max Day + Max Hour / 2)
32% 39% 17% 12%
Base = (1 – Fire Protection) x (Base / Max Day)
Max Day = (1 – Fire Protection) x ((Max Day – Base) / Max Day) Max Hour = (1 – Fire Protection) x ((Max Hour – Max Day) / Max Hour) Where,
Max Day Fire Protection = 10%
Max Hour Fire Protection = 14%
The percentages shown in Table 2.1 are determined by the formulas shown on page 24 of the 2016 RFC Study. The formulas consider the proportional relationship between the varying water delivery costs based on actual water usage peaking factors experienced in the City’s water system. As indicated, “Base” cost components will be allocated 100% toward the base charge.
During a “Max Day” water demand period, which occurs frequently during the summer months, the overall water usage for that day is 2.18 times that of an average day. However, a portion of costs during the “Max Day” delivery period are allocated to “Base” costs. In this case, the costs are split 41% to “Base” and 49% to “Max Day,” respectively. Similarly, water conveyed during peak hour usage is allocated 23%, 28%, and 35% toward “Base,” “Max Day,” and “Max Hour” costs, respectively.
The “Base-Extra Capacity Method” assumes the “Base” costs are those incurred while supplying water at a perfect load factor (i.e., at a continuous, uniform rate) without costs incurred for providing extra infrastructure capacity to account for the increase in use beyond the uniform rate. Extra capacity costs for maximum day and maximum hour service are incurred in providing facilities to furnish water at varying rates above the average. 111
City of Shasta Lake March 6, 2023
Peaking costs are further divided into maximum day demand (MDD) and maximum hour demand (MHD). The MDD is the maximum amount of water used in a single day in a year. The MHD is the maximum usage in an hour on the maximum usage day. Different infrastructure, such as distribution and storage facilities, and the operating costs associated with these facilities are designed to meet the peaking demands of customers. Therefore, extra capacity costs include the operating and capital costs associated with meeting peak customer demand.
This method is consistent with AWWA Manual M1 and is widely used in the water industry to perform a cost-of-service analysis.
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Table 2.2 – Adjusted Cost of Service
Line O&M Functions
Supply Delivery Max Day Max Hour Fire Meter Customer General Lifeline Conservation Total
A B C D E F G H I J K
1 Operating Expenses -
Percent Allocation1 10% 21% 26% 11% 8% 1% 6% 16% - 1% 100% 2 Operating Expenses -
FY23-24 Test Year $386,214 $811,050 $1,004,157 $424,836 $308,972 $38,621 $231,729 $617,943 ($10,000) $38,621 $3,852,144 3 Capital Expenses -
Percent Allocation1 5% 37% 24% 18% 9% 0% 0% 7% - 0% 100% 4 Capital Expenses -
FY23-24 Test Year2 $25,554 $189,099 $122,659 $91,994 $45,997 $0 $0 $35,776 - $0 $511,079 5 Total Cost of Service $411,768 $1,000,149 $1,126,816 $516,830 $354,969 $38,621 $231,729 $653,719 ($10,000) $38,621 $4,363,223 6 Allocation of General
Costs3 $73,129 $177,625 $200,121 $91,788 $63,042 $6,859 $41,155 ($653,719) 7 Allocation of Peaking
Cost to Meter4
($768,489) ($352,478) $1,120,967
8 Total Adjusted Cost of
Service $484,898 $1,177,774 $558,448 $256,140 $418,010 $1,166,447 $272,883 $0 ($10,000) $38,621 $4,363,223
1. Operating and Capital Expenditure allocation percentages are based on the 2016 RFC Study.
2. Annual Capital Expenditure based on five-year average of planned rate-funded capital expenditures, less grant allocations.
3. General Costs are allocated to the cost components, shown, in proportion to the dollar value of the Total Cost of Service, shown in Line 5.
4. It is desirable to shift a portion of the peaking costs (Max Day and Max Hour) to "Meter" cost to minimize revenue volatility and transfer a portion of the peaking costs into the meter rate. 113
City of Shasta Lake March 6, 2023
Table 2.2 shows the adjusted cost of service calculation, using the operating expense allocation percentages derived in the 2016 RFC Study and updated Water Fund financial data collected as part of this study. Note the allocation of General and Peaking Costs at the bottom of the table, as completed in the 2016 RFC Study.
In general, the base water meter, consumption, and private fire meter rates are established using the cost causation considerations established in the 2016 RFC Study, see Table 2.3.
Table 2.3 – Water Rate Cost Causation Distribution
Water Rate
Component Cost Causation Component
Base Water Meter
Rates
Meter Costs
Customer
General Costs (in proportion to other base meter-related costs) Fire Protection (public portion only)
Peaking (70% of Max Day and Max Hour)
Consumption Water
Rates
Water Supply
Delivery
General Costs (in proportion to other consumption water-related costs) Peaking (30% of Max Day and Max Hour)
Conservation (excluding Single-Family Resident Tier 1 and 2) Private Fire Meter
Rates Fire Protection (private portion only)
Note that about 70% of the peaking costs are allocated in the base water meter rates. The rationale is all users contribute to the peak demands on the water system especially during the typical peak diurnal periods, i.e., early morning and early evening. This shift in costs to the base water meter rates also creates more stable and predictable revenue streams into the Water Fund and dampens the impacts caused by the typical variation in water use throughout the year.
3. Financial Plan
Utilizing the five-year water operating cash flow in Table 1.7, we prepared a five-year Financial Plan. The Financial Plan considers beginning and ending cash reserve balances. Revenue increases were established to allow coverage for (1) expected expenditures in the Water Fund, (2) proposed rate-funded capital projects, and (3) maintenance of at least $1M in combined unrestricted reserve balance at the end of each fiscal year.
Table 3.1 shows the resulting five-year Financial Plan based on revenue needs shown in Table 1.6. 114
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Table 3.1 – Five-Year Financial Plan
Budgeted
FY22-23
Budgeted
FY23-24
Projected
FY24-25
Projected
FY25-26
Projected
FY26-27
Projected
FY27-28
REVENUE ADJUSTMENTS
Annual Revenue Increase 0.0% 6.0% 6.0% 6.0% 6.0% 6.0%
BEGINNING FUNDS AVAILABLE BALANCE $5,766,440 $3,717,662 $1,988,741 $2,222,482 $1,801,963 $1,687,983
OPERATING REVENUES
01-702 Sales-Utility Services $4,053,512 $4,296,723 $4,554,526 $4,827,798 $5,117,466 $5,424,513 01-720 Service Connection Fees $32,500 $32,500 $32,500 $32,500 $32,500 $32,500 01-851 Interest on Investment $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 - Revenue from Grants $500,000 $4,800,000 $1,000,000 $0 $0 $0 01-910 Miscellaneous Revenue $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 Total Revenue: $4,620,012 $9,163,223 $5,621,026 $4,894,298 $5,183,966 $5,491,013 EXPENSES (Less Depreciation and Debt Service)
Water Administration $693,962 $852,150 $877,490 $903,589 $930,472 $958,161 Water Distribution $1,062,160 $1,067,876 $1,118,980 $1,172,570 $1,228,769 $1,287,705 Water Treatment Plant $1,622,972 $1,667,505 $1,493,878 $1,542,385 $1,593,129 $1,646,214 Total Expenses: $3,379,094 $3,587,531 $3,490,347 $3,618,544 $3,752,370 $3,892,080
DEBT SERVICE
5720 Interest Expense $83,267 $77,687 $79,348 $72,847 $66,149 $59,246 5730 Debt Repayment - Principal $181,429 $186,926 $192,590 $198,425 $204,427 $210,632 Total Debt Service: $264,696 $264,613 $271,938 $271,272 $270,576 $269,878 CAPITAL OUTLAY (Total, Including Grant Allocations) $3,025,000 $7,040,000 $1,625,000 $1,425,000 $1,275,000 $1,125,000 ENDING FUNDS AVAILABLE BALANCES $3,717,662 $1,988,741 $2,222,482 $1,801,963 $1,687,983 $1,892,038
FINANCIAL PLAN PARAMETERS
Debt-Coverage Ratio (Desire 1.25 Min.) 2.8 2.93 4.16 4.70 5.29 5.92 115
City of Shasta Lake March 6, 2023
As indicated in Table 3.1, the City will be able to fully fund the Operating Reserve over the five-year Financial Plan. However, the Capital Projects Reserve will be utilized, in part, to fund the planned capital projects. The total reserve balance will reach a low balance of about $1.69M at the end of FY26-27
4. Proposed Water Rates
The required water rate adjustments necessary to fulfill the five-year Financial Plan, shown in Table 3.1, are shown in Tables 4.1, 4.2, and 4.3.
Table 4.1 – Proposed Base Water Meter Rate Adjustments
Proposed Rate Adjustments
Revenue Adjustment 6% 6% 6% 6% 6%
Month Effective July July July July July
Meter Size Current FY23-24 FY24-25 FY25-26 FY26-27 FY27-28 ⅝" $31.08 $32.94 $34.92 $37.02 $39.24 $41.59
1" $70.45 $74.68 $79.16 $83.91 $88.94 $94.28
1½" $136.06 $144.22 $152.88 $162.05 $171.77 $182.08
2" $214.79 $227.68 $241.34 $255.82 $271.17 $287.44
3" $398.52 $422.43 $447,78 $474.64 $503.12 $533.31
4" $660.97 $700.63 $742.67 $787.23 $834.46 $884.53
6” $1,317.12 $1,396.15 $1,479.92 $1,568.71 $1,662.83 $1,762.60 8” $2,104.51 $2,230.78 $2,364.63 $2,506.51 $2,656.90 $2,816.31 10” $3,810.49 $4,039.12 $4,281.47 $4,538.35 $4,810.66 $5,099.30 12” $5,647.71 $5,986.57 $6,345.77 $6,726.51 $7,130.10 $7,557.91 Table 4.2 – Proposed Water Consumption Rate Adjustments Proposed Rate Adjustments
Revenue Adjustment 6% 6% 6% 6% 6%
Month Effective July July July July July
Customer Classes Current FY23-24 FY24-25 FY25-26 FY26-27 FY27-28 Lifeline Tier 1 $1.94 $2.06 $2.18 $2.31 $2.45 $2.60
Lifeline Tier 2 $2.79 $2.96 $3.13 $3.32 $3.52 $3.73
Lifeline Tier 3 $3.50 $3.71 $3.93 $4.17 $4.42 $4.68
Residential Tier 1 $2.44 $2.59 $2.74 $2.91 $3.08 $3.27
Residential Tier 2 $2.79 $2.96 $3.13 $3.32 $3.52 $3.73
Residential Tier 3 $3.50 $3.71 $3.93 $4.17 $4.42 $4.68
Multi-Family Residential and
Mobile $2.58 $2.73 $2.90 $3.07 $3.26 $3.45
Commercial and Industrial $2.63 $2.79 $2.96 $3.13 $3.32 $3.52 Commercial Irrigation and
Government $2.86 $3.03 $3.21 $3.41 $3.61 $3.83
School $3.07 $3.25 $3.45 $3.66 $3.88 $4.11
*
*
*
*
*
*
*
*
*
* (per HCF) Hundred Cubic Feet
*
City of Shasta Lake March 6, 2023
Table 4.3 – Proposed Private Fire Meter Rate Adjustments Proposed Rate Adjustments
Revenue Adjustment 6% 6% 6% 6% 6%
Month Effective July July July July July
Meter Size Current FY23-24 FY24-25 FY25-26 FY26-27 FY27-28 2" $6.99 $7.41 $7.85 $8.33 $8.82 $9.35
3" $30.32 $32.14 $34.07 $36.11 $38.28 $40.57
4" $43.29 $45.89 $48.64 $51.56 $54.65 $57.93
6” $125.76 $133.31 $141.30 $149.78 $158.77 $168.30
8” $268.00 $284.08 $301.12 $319.19 $338.34 $358.64
10” $481.96 $510.88 $541.53 $574.02 $608.46 $644.97
12” $778.50 $825.21 $874.72 $927.21 $982.84 $1,041.81
5. Water Bill Comparison
Figure 1 shows a graph comparing water rates for various public agencies in northern California based on consuming the City’s average daily water use. The City’s current water rate and proposed FY23-24 rates are shown in the graph.
Please contact me with any questions.
Sincerely,
Paul J. Reuter, P.E.
Managing Engineer/President
Enclosure
M:\Jobs\0110 City of Shasta Lake\0110.100 Water Rate Study Update\05 Letter Report\2023 Water Rate Study Update-REV-3.docx 117
CITY OF SHASTA LAKE
MONTHLY WATER BILL COMPARISON
(Based on 1,516 Cubic Feet per Month Average Water Use) M:\Jobs\0110 City of Shasta Lake\0110.100 Water Rate Study Update\05 Letter Report\Water Rate Comparison-REV-2.xlsx FIGURE 1 $21.50
$42.65
$49.02 $49.72 $50.65
$52.72
$54.96
$58.50 $60.46
$70.58 $72.39 $72.76
$74.85 $76.11 $77.00 $77.16
$86.07
$95.19
$0
$10$20$30$40$50$60$70$80$90
$100
FY22-23 FY22-23 FY22-23 FY22-23 FY22-23 FY23-24 FY22-23 FY22-23 FY22-23 FY22-23 FY22-23 FY22-23 FY23-24 FY21-22 2022 FY23-24 FY22-23 FY22-23 City of
Anderson
Bella Vista
WD (M&I)
City of
Redding
Centerville
CSD
City of
Weed
City of
Weed
Mountain
Gate CSD
McCloud
CSD
City of Yreka City of
Shasta Lake
Clear Creek
CSD
City of
Dunsmuir
City of
Shasta Lake
City of
Oroville
2022 CA
Ave. (1)
City of
Dunsmuir
City of
Ashland
Shasta CSD
(1) Per World Population Review.
118
119
120
121
122
123
124
Water Rate Study
Final Report / July 15, 2016
CITY OF
SHASTA LAKE
125
August 29, 2016
Subject: Water Rate Study Report
City of Shasta Lake, CA
1650 Stanton Dr.
Shasta Lake, CA 96019
Dear Tony Thomasy,
Raftelis Financial Consultants, Inc. (RFC) is pleased to present this water rate study (Study) to the City of Shasta Lake. The Study involved a comprehensive review of the City’s Financial Plan, user classifications and rate structures. We are confident that the results, based on cost of service principles, result in fair and equitable water rates for the City’s customers and meet the requirements of Proposition 218.
The report includes a brief Executive Summary followed by study assumptions and a detailed rate derivation in subsequent sections. Drought rates are presented in the final Section 8.
It was a pleasure working with you and we wish to express our thanks for your and other staff member support during the study. If you have any questions, please call me at (213) 327-4405.
Sincerely,
RAFTELIS FINANCIAL CONSULTANTS, INC.
Sanjay Gaur Steve Gagnon, PE Victor Smith
Executive Vice President Senior Consultant Consultant
126
Contents
1 EXECUTIVE SUMMARY ...................................................................... 1
1.1 BACKGROUND .......................................................................................................... 1
1.2 PROCESS ................................................................................................................... 1
1.3 METHODOLOGY ........................................................................................................ 1
1.4 RESULTS AND RECOMMENDATIONS ..................................................................... 2 Factors Affecting Revenue Adjustments .................................................................................. 2 Proposed Water Rates ................................................................................................................ 2 2 WATER SYSTEM ................................................................................. 4
2.1 WATER SOURCES AND SYSTEM FACILITIES ......................................................... 4
2.2 NUMBER OF ACCOUNTS .......................................................................................... 4
2.3 ACCOUNT AND WATER USE GROWTH ASSUMPTIONS ........................................ 5
2.4 WATER USE ............................................................................................................... 6 3 FINANCIAL PLAN .....................ERROR! BOOKMARK NOT DEFINED.
3.1 INFLATIONARY AND OTHER ASSUMPTIONS ......................................................... 7
3.2 FINANCIAL PLAN .............................................ERROR! BOOKMARK NOT DEFINED.
3.3 CURRENT RATE REVENUE ...................................................................................... 7
3.3.1 FIXED CHARGE REVENUE ...................................................................................... 8
3.3.2 COMMODITY CHARGE REVENUE.......................................................................... 9
3.4 UTILITY EXPENSES ..................................................................................................11 O&M Expenses ..........................................................................................................................11 Pass-through Costs ..................................................................................................................12
3.4.1 TOTAL O&M BUDGET ............................................................................................13
3.5 CAPITAL IMPROVEMENT PLAN ..............................................................................14
3.6 EXISTING AND PROPOSED DEBT SERVICE ..........................................................14
3.7 PROPOSED FINANCIAL PLAN AND REVENUE ADJUSTMENTS ...........................15 4 LEGAL FRAMEWORK AND RATE SETTING METHODOLOGY ......19
4.1 LEGAL FRAMEWORK ...............................................................................................19 California Constitution - Article XIII D, Section 6 (Proposition 218) ....................................19 California Constitution - Article X, Section 2 ..........................................................................19
4.2 COST-BASED RATE-SETTING METHODOLOGY ....................................................20 1) Calculate Revenue Requirement .....................................................................................20 2) Cost Of Service Analysis (COS) ......................................................................................20 127
4 | City of Shasta Lake
3) Rate Design and Calculations ..........................................................................................21 4) Rate Adoption ....................................................................................................................21 5 COST OF SERVICE ANALYSIS .........................................................22
5.1 FUNCTIONALIZATION OF O&M EXPENSES ...........................................................22
5.2 ALLOCATION OF FUNCTIONALIZED EXPENSES TO COST COMPONENTS........23
5.3 REVENUE REQUIREMENT DETERMINATION .........................................................27
5.4 REVENUE OFFSET, GENERAL EXPENES, AND PEAK ALLOCATION ..................28 6 RATE DERIVATION ...........................................................................31
6.1 PROPOSED RATE STRUCTURE AND RATES.........................................................31
6.2 PROPOSED FIRE RATES .........................................................................................31
6.3 PROPOSED READINESS-TO-SERVE (RTS) CHARGE ............................................32
6.4 COMMODITY RATES ................................................................................................34 SFR Tier Definitions ..................................................................................................................34 Non-SFR Commodity Rates .....................................................................................................35 Unit Cost Definitions .................................................................................................................35 Unit Cost Derivation ..................................................................................................................35 Delivery Unit Cost ......................................................................................................................38 Peaking Unit Cost ......................................................................................................................39 Conservation Unit Cost.............................................................................................................40 Lifeline Discount ........................................................................................................................41 Pass-Through Component .......................................................................................................41 Final Rate Derivation .................................................................................................................41 7 BILL IMPACTS ...................................................................................44
7.1 CUSTOMER BILL IMPACTS......................................................................................44 Single Family Bill Impacts ........................................................................................................44 Lifeline Bill Impacts ...................................................................................................................45 Class by Class Bill Impacts ......................................................................................................45 8 DROUGHT RATES .............................................................................49
8.1 DROUGHT RATE BACKGROUND ............................................................................49 Usage During Drought Stages ................................................................................................. 49
8.2 DROUGHT CALCULATION .......................................................................................51 9 APPENDIX A: WATER CONSUMPTION DETAIL ..............................56 10 APPENDIX B: FY 2015 USAGE BY TIER AND CLASS .....................58 128
11 APPENDIX C: FY 2015 USAGE ANALYSIS TIER AND CLASS ........59 12 APPENDIX D: REVENUE PROOF OF VARIABLE RATES ...............60
LIST OF TABLES
Table 1-1: Proposed Water Revenue Adjustments ........................................................................................................ 2 Table 1-2: Current and Proposed Monthly Readiness-to-Serve Charges ....................................................................... 3 Table 1-3: Current and Proposed SFR and Lifeline Tier Widths and Rationale .............................................................. 3 Table 1-4: Current and Proposed Commodity Rates ($/HCF) ......................................................................................... 3 Table 2-1: Potable Water Accounts by Meter Size (Actual - FY 2015) ........................................................................... 5 Table 2-2: Account Growth and Water Use Assumptions .............................................................................................. 5 Table 3-1: Inflationary Assumptions .............................................................................................................................. 7 Table 3-2: FY 2016 through FY 2020 Monthly Service Charges by Meter Size ............................................................... 8 Table 3-3: Meters through FY 2020 by Meter Size ......................................................................................................... 8 Table 3-4: Monthly Fire Meter Charges through FY 2020 .............................................................................................. 9 Table 3-5: Fire Meters through FY 2020 ........................................................................................................................ 9 Table 3-6: Fixed Revenue through FY 2020 .................................................................................................................... 9 Table 3-7: Consumption Rate Structure .......................................................................................................................10 Table 3-8: Commodity Rates Across Study period, in $/HCF ........................................................................................10 Table 3-9: Consumption by Tier across Study period ...................................................................................................10 Table 3-10: Consumption Revenues by Tier across Study period .................................................................................11 Table 3-11: Projected Water Purchases across Study period in Acre Feet ...................................................................11 Table 3-12: Projected Water Purchase Rates in $/Acre Feet .......................................................................................12 Table 3-13: Projected Water Purchases Costs .............................................................................................................12 Table 3-14: WY 2017 Water Purchase Rates in $/Acre Feet, used for Pass-Through Analysis ....................................13 Table 3-15: Water Supply Costs using WY 2017 Rates ................................................................................................13 Table 3-16: Projected Water O&M Expenses ...............................................................................................................13 Table 3-17: Detailed Inflated Capital Improvement Plan ............................................................................................14 Table 3-18: Existing and Proposed Debt Service ..........................................................................................................14 Table 3-19: Proposed Rate Adjustments ......................................................................................................................15 Table 3-20: Five-Year Water Operating Cash Flow ......................................................................................................16 Table 5-1: Functionalization of O&M Expenses ...........................................................................................................23 Table 5-2: System-Wide Peaking Factors and Allocation to Cost Components ...........................................................23 Table 5-3: Allocation of Functionalized O&M and Capital Expenses to Cost Causation Components .........................26 Table 5-4: Revenue Requirement Determination ........................................................................................................28 Table 5-5: Allocation of Offsets....................................................................................................................................29 Table 5-6: Total Adjusted Cost of Service Calculation ..................................................................................................29 Table 6-1: Current and Proposed SFR and Lifeline Tier Widths and Rationale ............................................................31 Table 6-2: Total Adjusted Cost of Service.....................................................................................................................31 Table 6-3: Fire Charge Calculation ...............................................................................................................................32 Table 6-4: Equivalent Meter Unit Calculation ..............................................................................................................33 Table 6-5: Monthly Meter Charge Calculation ............................................................................................................33 Table 6-6: Monthly Customer Service Charge Calculation ...........................................................................................34 129
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Table 6-7: Derivation of the RTS Charge ...................................................................................................................... 34 Table 6-8: Projected Usage in Revised Tiers (FY 2017) ................................................................................................36 Table 6-9: Projected SFR and Lifeline Combined Usage in Revised Tiers (FY 2017) .....................................................36 Table 6-10: Projected Usage in CF (FY 2017) ...............................................................................................................36 Table 6-11: Supply Rate Calculation ............................................................................................................................37 Table 6-12: Differentiated Supply Rate Calculation .....................................................................................................37 Table 6-13: Differentiated Supply Water Allocation ....................................................................................................38 Table 6-14: Differentiated Supply Tier Rate Calculation ..............................................................................................38 Table 6-15: Delivery Unit Cost Calculation ...................................................................................................................39 Table 6-16: Total Peaking Component Calculation ......................................................................................................39 Table 6-17: Peaking Rate Derivation ...........................................................................................................................40 Table 6-18: Peaking Rate Derivation ...........................................................................................................................40 Table 6-19: Derivation of Conservation Unit Costs ......................................................................................................41 Table 6-20: Derivation of Lifeline Discount ..................................................................................................................41 Table 6-21: Derivation of Pass-Through Component ...................................................................................................41 Table 6-22: Derivation of Rates by Tier and Class........................................................................................................42 Table 6-23: Commodity Charges through FY 2021 ......................................................................................................42 Table 6-24: Fixed Charges through FY 2021 ................................................................................................................43 Table 6-25: Fire Meter Charges through FY 2021 ........................................................................................................43 Table 8-1: Drought Use Cutback Goals by Drought Level ............................................................................................50 Table 8-2: Sources of Supply by Drought Level ............................................................................................................50 Table 8-3: Calculation of Revenue Requirement ..........................................................................................................51 Table 8-4: Calculation of Stage 1 Drought Rates .........................................................................................................51 Table 8-5: Calculation of Stage 2 Drought Rates .........................................................................................................52 Table 8-6: Calculation of Stage 3 Drought Rates .........................................................................................................52 Table 8-7: Stage 4 Rate Calculation .............................................................................................................................54 Table 8-8: Stage 5 Rate Calculation .............................................................................................................................54 Table 8-9: Drought Rates and Surcharge Totals ..........................................................................................................55
LIST OF FIGURES
Figure 2-1: Water Use by Customer Class - FY 2015 ...................................................................................................... 6 Figure 3-1: Proposed Revenue Adjustments ................................................................................................................17 Figure 3-2: Proposed Operating Financial Plan ...........................................................................................................17 Figure 3-3: Projected CIP and Funding Sources............................................................................................................18 Figure 3-4: Projected Operating Fund Ending Balances...............................................................................................18 Figure 7-1: Single Family Customer bill Impacts ..........................................................................................................44 Figure 7-2: Multi-family Customer Bill Impacts (5/8” Meter)......................................................................................45 Figure 7-3: SFR Class Impacts ......................................................................................................................................46 Figure 7-4: Lifeline Class Impacts ................................................................................................................................. 46 Figure 7-5: MFR Class Impacts .....................................................................................................................................47 Figure 7-6: Commercial and Industrial Class Impacts ..................................................................................................47 Figure 7-7: Commercial Irrigation and Government Class Impacts .............................................................................48 Figure 7-8: School Class Impacts ..................................................................................................................................48 130
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1 EXECUTIVE SUMMARY
1.1 BACKGROUND
In late 2015, the City of Shasta Lake (City) contracted with Raftelis Financial Consultants (RFC) to conduct a Water Rate Study (Study) to include a five-year Financial Plan. This report presents the Financial Plan and the resulting rates for implementation on October 1, 2016.
This Executive Summary displays the water rates and contains a description of the rate study process, methodology, results and recommendations for the City’s water rates. The City’s last rate adjustment was effective on October 1, 2014. The City wishes to establish fair and equitable rates that:
» Meet the City’s fiscal needs in terms of operational expenses, reserve goals and capital investment to maintain the system;
» Revise rates to reflect a new normal level of water use; » Proportionately allocate the costs of providing service in accordance with California Constitution article XIII D, section 6 (commonly referred to as Proposition 218).
1.2 PROCESS
RFC first developed a Financial Plan for the City, which set forth the total revenue adjustments, capital investment, and debt proposed during the five-year Study period. After developing the Financial Plan, RFC performed a cost of service analysis to determine the rates based on the selected Financial Plan.
RFC met with City staff to discuss study goals. Upon completion of the Financial Plan, RFC met with City staff to review the resulting rates. RFC also presented the resulting rates to the four largest City water users before presenting the Financial Plan and rates to the City Council.
The proposed rate alternative consists of a 3-tier rate structure for the residential commodity rate and a uniform rate for all other customers, as well as a monthly service charge that collects a portion of capacity related costs through the fixed monthly service charge.
1.3 METHODOLOGY
The water rates were developed using cost of service principles set forth by the American Water Works Association M1 Manual titled Principles of Water Rates, Fees and Charges (AWWA M1 Manual). Cost of service principles endeavor to distribute costs to customer classes in accordance with the way each class uses the water system. This methodology is described in detail in Sections 4 and 5 of this report. For this Study, the Base-Extra Capacity Method of the AWWA M1 Manual was used for distributing costs. This method separates costs into four components: “(1) base costs, (2) extra capacity costs, (3) customer costs, and (4) direct fire protection costs.” Base costs are costs that are associated with meeting average daily demand needs and include operations and maintenance costs and capital costs designed to meet average load conditions. Extra capacity costs are costs associated with meeting peak demand. Customer costs are costs associated with serving customers, such as meter reading, billing, customer service, etc. Direct fire 133
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protection costs are related solely to the fire protection function of a water system, such as fire hydrants and related branch mains and valves.
1.4 RESULTS AND RECOMMENDATIONS
Table 1-1 shows the yearly revenue adjustments selected by the City Council. The percentages shown in Table 1-1 are the yearly increases in rate revenue required to maintain a financially viable water utility.
Table 1-1: Proposed Water Revenue Adjustments
Effective Date Proposed Water Revenue Adjustments
FY 2017 30 percent
FY 2018 15 percent
FY 2019 10 percent
Factors Affecting Revenue Adjustments
The following items affect the City’s revenue requirement (i.e. costs) and thus its water rates. The City’s expenses include Operation and Maintenance (O&M) expenses and capital expenses. » O&M expenses: Overall, the City’s O&M expenses are expected to increase just under 7% from FY 2016 to FY 2017 and continue to grow between 4% and 5% throughout the Study period.
However, between FY 2015 and FY 2016 the City’s O&M expenses increased 21%. This high level of O&M growth is being largely driven by increases in water treatment costs, which are expected to increase by an average of 7% throughout the Study period. » Water System Capital Investment: The City anticipates spending an average of $700,000 on capital improvement annually throughout the Study period. » Reserve Funding: The City plans to use reserves through FY 2018 in addition to rate increases in order to meet capital improvement needs. However, depleted reserves should be returned to target levels in the long term. Section 3 shows the reserve balances with the proposed Financial Plan.
» Reduced Water Sales: State and local public outreach efforts to conserve water are affecting City water use and revenues. The City has seen a 39% decrease in water use in FY 2016 relative to FY 2014 and projects that usage will remain between 21% and 13% lower than FY 2014’s use through FY 2021. This results in increased water rates as the City’s (mostly fixed) costs are spread over fewer units of water sold.
Proposed Water Rates
The City’s water service fees are comprised of two components: (1) a monthly service charge, and (2) a consumption charge. The monthly service charge is a fixed charge based on the size of the meter serving a property, and is calculated to recover a portion of the City’s fixed costs, such as the costs of billing and collections, customer service, meter reading, meter maintenance all of which do not vary with water use.
The monthly service charge also collects a portion of capacity related costs. The consumption rate recovers all remaining costs associated with meeting base and extra capacity costs.
Table 1-2 shows the current and proposed charges for the monthly service charge by meter size. 134
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Table 1-2: Current and Proposed Monthly Readiness-to-Serve Charges Meter Size FY 2017 Monthly Charge Proposed Monthly Charge 5/8" $20.69 $24.56
1" $51.72 $55.68
1.5" $103.44 $107.55
2" $165.50 $169.79
3" $310.31 $315.03
4" $517.18 $522.50
6" $1,034.36 $1,041.20
8" $1,654.97 $1,663.64
10" $2,999.62 $3,012.24
12" $4,447.72 $4,464.59
Table 1-3 shows the current and proposed tier widths for the single family residential (SFR) and lifeline classes.
Table 1-3: Current and Proposed SFR and Lifeline Tier Widths and Rationale Tier Current Range
(cubic feet)
Proposed Range
(cubic feet )
Rationale
Tier 1 0-1,000 0-800 minimum average winter use
Tier 2 1001-5,000 801-2,000 average summer use
Tier 3 (Excess
Consumption Rate) 5,001+ 2,001+
Table 1-4 shows the proposed consumption rates. RFC recommends implementing a uniform consumption rate for all non-single family-residential customers. Cost of service principles justify higher rates for classes with higher peaking characteristics as shown in Table 1-4. The rates are fully derived in Sections 5 and 6 of this report.
Table 1-4: Current and Proposed Commodity Rates ($/HCF
Customer Classes Total Rate ($/ HCF*)
FY 2017 Current Rate
($ / HCF)
Lifeline Tier 1 $1.53 $1.07
Lifeline Tier 2 $2.20 $1.54
Lifeline Tier 3 $2.76 $1.87
Single Family Residential Tier 1 $1.92 $1.34
Single Family Residential Tier 2 $2.20 $1.54
Single Family Residential Tier 3 $2.76 $1.87
MFR & Mobile $2.03 Same as SFR Tiers 1 & 2
Commercial and Industrial $2.07 Same as SFR Tiers 1 & 2 Commercial Irrigation and Govt. $2.26 Same as SFR Tiers 1 & 2 School $2.42 Same as SFR Tiers 1 & 2
*HCF = hundred cubic feet
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Together, the two components of the City’s proposed water service fees are structured to recover the proportionate costs of providing water service to each customer class and to deter waste, encourage water use efficiency, and manage the City’s water resources. 2 WATER SYSTEM
This section briefly describes the water system and the City provided customer account and water use data for FY 2014.
2.1 WATER SOURCES AND SYSTEM FACILITIES
The City provides water service to 3,800 accounts and has roughly 60 miles of pipeline, and 9 treated water storage tanks. The City's water treatment plant is capable of distributing roughly 9.72 million gallons of treated water per day (MGD).
Water is procured from six potential sources: (1) the Central Valley Project (CVP); (2) The McConnell Foundation; (3) Shasta County Water District; (4) Anderson Cottonwood Irrigation District; (5) MCM Properties, and; (6) Centerville Community Services District. However, in line with historical purchases, we assumed water is procured from sources 1 and 3 during normal times and source 2 during times of drought.
On January 17, 2014, Governor Jerry Brown issued a drought state of emergency declaration in response to record-low water levels in California’s rivers and reservoirs as well as an abnormally low snowpack. On April 1, 2015, Governor Brown issued an Executive Order calling for statewide mandatory water reductions of up to 25%. Additionally, on May 5, 2015, the State Water Resources Control Board approved regulations, based on Governor Brown’s Executive Order, mandating the City to reduce its water consumption by 28% percent for June 2015 through February 2016, as compared to the same months in 2013. The drought impacted the availability of water from the CVP. In fiscal years 2015 and 2016, the City’s available CVP water decreased by 70% and 50% respectively. Compared to FY 2014 usage, the City is estimated to use 39% less water in FY 2016.
2.2 NUMBER OF ACCOUNTS
Table 2-1 shows the estimated number of potable water accounts by meter size and customer class for FY 2016. RFC estimated the number of accounts by tabulating FY 2015 (actual) account data provided by the City and escalating the number of accounts using the growth factors described in Section 2.3. The number of accounts are used to forecast the amount of fixed revenue the City will receive from the monthly service charge.
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Table 2-1: Potable Water Accounts by Meter Size (Actual - FY 2015) Meter
Size Lifeline SFR1 MFR2
Mobile
Homes CSF3 Comm.
4 Ind5
Comm
Irr6 School Gov7 Total
5/8" 392 3,001 47 26 12 88 0 14 2 3 3,585
3/4" 0 0 0 0 0 0 0 0 0 0 0
1" 0 15 39 4 3 13 3 9 1 5 92
1.5" 0 0 2 0 0 8 0 4 0 0 14
2" 0 0 13 1 2 8 5 7 6 1 43
3" 0 0 0 0 0 0 0 1 0 0 1
4" 0 0 0 0 0 0 0 0 2 1 3
6" 0 0 0 0 0 0 1 0 0 0 1
8" 0 0 0 0 0 0 0 0 0 0 0
10" 0 0 0 1 0 0 1 0 0 0 2
12" 0 0 0 0 0 0 0 0 0 0 0
Total 392 3,016 101 32 17 117 10 35 11 10 3,741
2.3 ACCOUNT AND WATER USE GROWTH ASSUMPTIONS
The revenue calculated for each fiscal year in the Financial Plan is a function of the number of accounts, account growth, water use, and existing rates. The City has realized very low account growth for the past few years, therefore RFC assumed no account growth throughout the Study period as shown in Table 2-2.
Like most water purveyors, the City has realized reduced water use due to conservation. RFC and City Staff expect conservation to continue and that the drought will have a long-term effect on water sales which many call a “new normal” water use. Table 2-2 shows the recent and assumed water sales in acre-feet.
The “Year to Year Change” line shows that fiscal year’s consumption in relation to the previous fiscal year.
For example, FY 2015 shows -28% which was a 28% reduction compared to FY 2014 usage.
Table 2-2: Account Growth and Water Use Assumptions
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Account Growth (All Classes) 0% 0% 0% 0% 0%
Water Sold (Acre Feet) 2,297 1,645 1,402 1,810 1,859 1,908 1,958 Percentage Change from FY 2015 -15% 10% 13% 16% 19%
Year to Year Change -28% -15% 29% 3% 3% 3%
1 Single Family Residential
2 Multi-family Residential
3 Communal, Social and Fraternal organizations
4 Commercial
5 Industrial
6 Commercial Irrigation
7 Government
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2.4 WATER USE
Figure 2-1 shows the FY 2016 water use by customer class. This pie chart shows the percentage of total projected water use by customer class for FY 2016. Total projected water sales were 61,090,084 cubic feet (CF) or 1,402 acre feet (AF).
Figure 2-1: Water Use by Customer Class - FY 2016
10% 63%
7%
16%
3%
1%
SFR
MFR & Mobile Home
Lifeline
Commercial & Industrial
Commercial, Irrigation, & School
Government
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3 FINANCIAL PLAN
This section describes the assumptions used in projecting operating and capital expenses as well as reserve coverage requirements. These assumptions determine the overall revenue adjustments and therefore the total amount of revenue required from rates. The revenue covers O&M and capital expenses as well as reserve funding. Revenue adjustments represent the average rate increase for the City as a whole; rate changes for individual classes will depend on the cost of service analysis.
3.1 INFLATIONARY AND OTHER ASSUMPTIONS
To ensure that future costs are reasonably projected, RFC makes informed assumptions regarding inflationary factors including general and salary inflation and water cost inflation as shown in Table 3-1.
Note that the City has decided to pass-through water wholesaler cost increases. Therefore, the water wholesaler inflation shown in Table 3-1 is for modeling purposes; actual wholesaler water purchase costs will be passed-through to customers after the wholesalers (Bureau of Reclamation, McConnell Foundation, Shasta County Water Agency etc.) publish their rates. Salaries and Benefits cost inflation were provided by City Staff and take into account upcoming salary increases.
Table 3-1: Inflationary Assumptions
INFLATION FACTORS FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 General 3.0% 3.0% 3.0% 3.0% 3.0%
Salaries/Benefits 3.0% 11.0% 6.0% 4.0% 4.0%
All Water Wholesalers 5.0% 5.0% 5.0% 5.0% 5.0%
Power 4.0% 3.2% 3.2% 3.2% 3.2%
Chemical 3.0% 3.0% 3.0% 3.0% 3.0%
Capital 3.1% 3.1% 3.1% 3.1% 3.1%
Miscellaneous Revenue 1.0% 1.0% 1.0% 1.0% 1.0%
3.2 FINANCIAL PLAN
The assumptions shown in Table 3-1 were incorporated into the five-year Financial Plan. To develop the Financial Plan, RFC projected annual expenses and revenues, modeled reserve balances and transfers between funds, capital expenditures and calculated debt service coverage ratios to estimate the amount of additional rate revenue needed per year. This section of the report provides a discussion of O&M expenses, the Capital Improvement Plan (CIP), reserve funding, projected revenue under existing rates and the revenue adjustments needed to ensure fiscal sustainability.
3.3 CURRENT RATE REVENUE
The City’s rate structure consists of two different types of charges: fixed charges, known as a monthly service charge and variable charges, which are dependent on water use, known as the consumption rate. 139
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3.3.1 FIXED CHARGE REVENUE
The City collects a fixed monthly service charge from its customers based on meter size. For this Study, the FY 2017 rates were used to project future revenues since the City had previously adopted these rates and these rates would be implemented in the absence of this Study. The proposed monthly service charges are shown in Table 3-2 below.
Table 3-2: FY 2016 through FY 2020 Monthly Service Charges by Meter Size Meter Size FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
5/8" $20.18 $20.69 $20.69 $20.69 $20.69
1" $30.27 $31.03 $31.03 $31.03 $31.03
1.5" $50.46 $51.72 $51.72 $51.72 $51.72
2" $100.91 $103.44 $103.44 $103.44 $103.44
3" $161.46 $165.50 $165.50 $165.50 $165.50
4" $302.74 $310.31 $310.31 $310.31 $310.31
6" $504.56 $517.18 $517.18 $517.18 $517.18
8" $1,009.13 $1,034.36 $1,034.36 $1,034.36 $1,034.36
10" $1,614.60 $1,654.97 $1,654.97 $1,654.97 $1,654.97
12" $2,926.46 $2,999.62 $2,999.62 $2,999.62 $2,999.62
In order to determine annual revenues from the monthly service charges, RFC multiplied the monthly service charges by the number of accounts in each meter size in each year and multiplied by twelve. As mentioned in Section 2.2, the number of accounts is not projected to grow through the course of the Study period. The number of accounts for the Study period is shown in Table 3-3.
Table 3-3: Meters through FY 2020 by Meter Size
Meter Size FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
5/8" 3,585 3,585 3,585 3,585 3,585
1" 92 92 92 92 92
1.5" 14 14 14 14 14
2" 43 43 43 43 43
3" 1 1 1 1 1
4" 3 3 3 3 3
6" 1 1 1 1 1
8" 0 0 0 0 0
10" 2 2 2 2 2
Total 3,741 3,741 3,741 3,741 3,741
In addition to the monthly service charge assessed on water meters shown in Table 3-2, the City also assesses a Fixed Debt Charge on every account of $.80 per account per month, regardless of meter size.
The last source of fixed revenue that the City collects is Private Fire Meter Charge revenue. This is a monthly fixed charge assessed on fire meters by meter size. A summary of monthly Fire Meter Charges is shown in Table 3-4 below.
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Table 3-4: Monthly Fire Meter Charges through FY 2020
Meter Size FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
4" $15.00 $15.00 $15.00 $15.00 $15.00
6" $20.00 $20.00 $20.00 $20.00 $20.00
8" $25.00 $25.00 $25.00 $25.00 $25.00
10" $30.00 $30.00 $30.00 $30.00 $30.00
The number of fire meters by meter size through the Study period is shown in Table 3-5 below.
Table 3-5: Fire Meters through FY 2020
Meter Size FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
4" 5 5 5 5 5
6" 8 8 8 8 8
8" 4 4 4 4 4
10" 2 2 2 2 2
Total 19 19 19 19 19
Referring to the monthly fixed rates and account totals in Table 3-2 and Table 3-3 respectively, the monthly fixed charge revenue from all single family homes with a 5/8" meter for FY 2017 is calculated as follows:
𝑓𝑖𝑥𝑒𝑑 𝑐ℎ𝑎𝑟𝑔𝑒 𝑟𝑎𝑡𝑒 𝑓𝑜𝑟 5/8" 𝑚𝑒𝑡𝑒𝑟 × 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑎𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑤𝑖𝑡ℎ 5/8" 𝑚𝑒𝑡𝑒𝑟 × 12 𝑚𝑜𝑛𝑡ℎ𝑠 $20.69 × 3,585 × 12 = $890𝐾
The same calculation is repeated for all meter sizes and then added together to determine the total monthly fixed charge revenue for all customers (including Fire Line meters). The result of this calculation and the sum of all fixed revenue through FY 2020 is shown in Table 3-6.
Table 3-6: Fixed Revenue through FY 2020
Meter Size FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Fixed Revenue
Monthly Service Charge Revenue $1,128,259 $1,156,704 $1,156,704 $1,156,704 $1,156,704 Private Fire Meter Charge Revenue $4,740 $4,740 $4,740 $4,740 $4,740 Fixed Debt Charge $35,914 $35,914 $35,914 $35,914 $35,914 Total Fixed Revenue $1,168,913 $1,197,357 $1,197,357 $1,197,357 $1,197,357
3.3.2 COMMODITY CHARGE REVENUE
In addition to fixed charge revenue from the monthly service charge, the City also collects revenue based on water use. The City has a tiered consumption rate structure for all customers. Lifeline and SFR have a three tiered rate while all other classes have a two tiered rate except for 5/8 inch meters which all have a three tiered rate. The third tier rate is called the “Excess Consumption” rate. The tier width for Lifeline, SFR, CSF and other customers with 5/8” meters is shown below in Table 3-8. All other customers have a first tier of up to 10 hundred cubic feet (HCF) and then pay the tier 2 rate for consumption beyond Tier 1. 141
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Table 3-7: Consumption Rate Structure
Tier Current SFR, CSF, Lifeline and 5/8”
Meter Tier width (CF)
Tier Width for All Other Customers
(CF)
Tier 1 0-1,000 0-1,000
Tier 2 1,001-5,000 1,001+
Tier 3/ Excess Consumption 5,001+ N/A
Lifeline customers pay a separate Tier 1 rate, while all other customers pay the same rate for Tier 1 and Tier 2. The “Excess Consumption” rate applies only to 5/8 inch meters and Residential 1” meters. The current consumption rates are shown below in Table 3-8.
Table 3-8: Commodity Rates Across Study period, in $/HCF FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Lifeline $1.04 $1.07 $1.07 $1.07 $1.07
Tier 1 $1.30 $1.34 $1.34 $1.34 $1.34
Tier 2 $1.50 $1.54 $1.54 $1.54 $1.54
Tier 3/Excess Consumption Rate $1.82 $1.87 $1.87 $1.87 $1.87 RFC calculated tiered usage based on FY 2015 consumption data and projected it across the Study period.
This process resulted in the following consumption data, presented in cubic feet in Table 3-9. A breakdown of usage by customer class is available in the appendix.
Table 3-9: Consumption by Tier across Study period
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Expressed in CF
Lifeline 2,633,993 3,208,022 3,295,514 3,383,005 3,470,497 Tier 1 24,268,662 29,712,446 30,522,786 31,333,125 32,143,465 Tier 2 32,753,573 43,537,254 44,724,634 45,912,014 47,099,393 Tier 3/Excess Consumption 1,433,856 2,368,192 2,432,779 2,497,366 2,561,953 Total 61,090,084 78,825,915 80,975,713 83,125,510 85,275,308 Expressed in HCF
Lifeline 26,340 32,080 32,955 33,830 34,705
Tier 1 242,687 297,124 305,228 313,331 321,435
Tier 2 327,536 435,373 447,246 459,120 470,994
Tier 3/Excess Consumption 14,339 23,682 24,328 24,974 25,620 Total 610,901 788,259 809,757 831,255 852,753
The consumption revenues shown for FY 2016 through FY 2020, shown in Table 3-10, are calculated by multiplying the projected consumption found Table 3-9 by the rates found in Table 3-8. For example, the commodity charge revenue from Tier 1 usage for FY 2016 can be calculated as follows:
𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑 𝑇𝑖𝑒𝑟 1 𝑈𝑠𝑎𝑔𝑒 𝑓𝑜𝑟 𝐹𝑌 2016 × 𝑇𝑖𝑒𝑟 1 𝑅𝑎𝑡𝑒
242,687 × $1.30 = $315𝐾
The same calculation is repeated for all tiers and the other customer classes (including Fire Line) to determine the total consumption revenue for each year.
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Table 3-10: Consumption Revenues by Tier across Study period FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Lifeline $27,394 $34,198 $35,130 $36,063 $36,995
Tier 1 $315,493 $398,147 $409,005 $419,864 $430,722
Tier 2 $491,304 $669,385 $687,641 $705,897 $724,153
Tier 3/Excess Consumption Rate $26,096 $44,179 $45,383 $46,588 $47,793 Total $860,286 $1,145,908 $1,177,160 $1,208,412 $1,239,664
3.4 UTILITY EXPENSES
The City’s expenses include O&M expenses, capital expenses, and debt service payments. Section 3.4 through 3.6 discuss the details of each of these expenses.
O&M Expenses
In order to project the City’s O&M expenses, RFC first calculated the costs of purchasing water. The City has six potential sources of water, but is projected to only purchase from two (during normal times) throughout the Study period (although the City did purchase from a third source, McConnell Foundation, in FY 2016 due to the drought). Note that the information below is presented in Water Years (WY), which begins on March 1, and ends on February 28. These purchase amounts are in AF, one AF is approximately 435,600 hundred cubic feet, or 325,851 gallons.
Table 3-11: Projected Water Purchases across Study period in Acre Feet Water Wholesaler WY
8 2017 WY 2018 WY 2019 WY 2020
Central Valley Project 1,896 1,949 2,002 2,055
McConnell Foundation - - - -
Anderson Cottonwood Irrigation District - - - -
MCM Properties - - - -
Shasta County Water Agency 50 50 50 50
Centerville Community Services District - - - -
Total Potable Supply (AF) 1,946 1,999 2,052 2,105
The City provided RFC with the WY 2016 rates for each water wholesaler, and RFC escalated these prices according to the percentages shown in Table 3-1. Table 3-12 shows projected costs by wholesaler throughout the Study period.
8 WY = Water Year
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Table 3-12: Projected Water Purchase Rates in $/Acre Feet Water Wholesaler WY 2017 WY 2018 WY 2019 WY 2020
Central Valley Project $120.88 $126.92 $133.27 $139.93
McConnell Foundation $262.50 $275.63 $289.41 $303.88
Anderson Cottonwood Irrigation District $238.61 $250.54 $263.07 $276.22 MCM Properties $224.78 $236.02 $247.82 $260.22
Shasta County Water Agency $131.44 $138.01 $144.91 $152.16 Centerville Community Services District $236.25 $248.06 $260.47 $273.49 RFC then calculated the total water purchase cost for each FY by multiplying the purchased water projections by the purchased water costs. Note that Table 3-13 shows the costs for the FY and not for the WY. The water purchase cost takes into account the fact that the fiscal year occurs over two WYs - nine months of the first WY and three months in the next WY. Therefore, for each fiscal year ¾ of water purchase costs are in the first WY, and that the remaining ¼ of water purchase costs are in the second WY. Water purchase costs were estimated at for this Study, however the City is implementing a passthrough of its water purchase costs (costs the City incurs to buy water from its wholesalers). When the City knows its wholesale water purchase costs it will pass-through these costs to City customers as discussed in the Pass-through section below.
Table 3-13: Projected Water Purchases Costs
Water Wholesaler FY 2017 FY 2018 FY 2019 FY 2020
Central Valley Project $233,710 $252,215 $271,987 $293,105 McConnell Foundation $0 $0 $0 $0
Anderson Cottonwood Irrigation District $0 $0 $0 $0
MCM Properties $0 $0 $0 $0
Shasta County Water Agency $6,654 $6,987 $7,336 $7,703
Centerville Community Services District $0 $0 $0 $0
Water Supply Cost $240,364 $259,202 $279,323 $300,807
Pass-through Costs
The City has elected to pass-through its wholesale water purchase costs. RFC has estimated the passthrough costs of water supply cost increases based on the inflationary factors discussed in Table 3-1. The City will calculate actual pass-through rates once wholesaler water rates are known. RFC estimated the pass-through cost using the following steps:
1. Freeze the wholesaler rates from WY 2017 (Table 3-14) and applied them to all water purchases throughout the Study period.
2. The total water purchases costs calculated from the increasing wholesale rates (Table 3-12) are subtracted from the water purchase costs from the frozen rates (Table 3-14Table 3-12)
3. Divide the difference (shown in Line 9 in Table 3-15) by the total HCF sold in that FY.
Table 3-14 shows the WY 2017 Water Purchase Rates.
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Table 3-14: WY 2017 Water Purchase Rates in $/Acre Feet, used for Pass-Through Analysis Water Wholesaler WY 2017 WY 2018 WY 2019 WY 2020
Table 3-12
Central Valley Project $120.88 $120.88 $120.88 $120.88
McConnell Foundation $262.50 $262.50 $262.50 $262.50
Anderson Cottonwood Irrigation District $238.61 $238.61 $238.61 $238.61 MCM Properties $224.78 $224.78 $224.78 $224.78
Shasta County Water Agency $131.44 $131.44 $131.44 $131.44 Centerville Community Services District $236.25 $236.25 $236.25 $236.25 Using the same calculation methodology as described for the water purchase cost in Table 3-13, RFC calculated the water purchase costs using WY 2017 rates for all years. This cost was then subtracted from the water supply cost from Table 3-13 to get the projected pass-through. By dividing the projected passedthrough cost by the total HCF sold (from Table 3-9), RFC arrived at the pass-through cost per HCF shown in line 11.
Table 3-15: Water Supply Costs using WY 2017 Rates
Line Source FY 2017 FY 2018 FY 2019 FY 2020
1 Central Valley Project $229,162 $235,576 $241,991 $248,406 2 McConnell Foundation $0 $0 $0 $0
3 Anderson Cottonwood Irrigation District $0 $0 $0 $0
4 MCM Properties $0 $0 $0 $0
5 Shasta County Water Agency $6,572 $6,572 $6,572 $6,572 6 Centerville Community Services District $0 $0 $0 $0
7 Water Supply Cost using WY 2017 Rates $235,734 $242,148 $248,563 $254,978 8 Water Supply Cost from Table 3-13 Table 3-13 $240,364 $259,202 $279,323 $300,807 9 Projected Passed-Through Cost Line 8 – Line 7 $4,631 $17,054 $30,760 $45,830 10 Total HCF Sold Table 3-9 788,259 809,757 831,255 852,753 11 Cumulative Pass-Through Cost per HCF Line 9 ÷ Line 10 $0.01 $0.02 $0.04 $0.05 12 Incremental Pass-Through Cost per HCF
Line 11-
Previous Year $0.01 $0.01 $0.02 $0.01
3.4.1 TOTAL O&M BUDGET
The City’s projected O&M budget is shown by fiscal year in Table 3-16. FY 2017 is the year with which rates were calculated (this is known as the test year) and FY 2016 is shown for comparison. The Financial Plan Study period is from FY 2016 to 2020. The O&M budget incorporates the inflationary factors discussed in Section 3.1, and purchased water costs from Table 3-13.
Table 3-16: Projected Water O&M Expenses
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
General and Administrative $542,905 $563,080 $580,457 $598,371 $616,837 Distribution $709,954 $736,635 $759,406 $782,881 $807,080 Water Treatment Plant $677,872 $795,928 $849,272 $889,054 $930,660 Water Purchases $247,570 $240,364 $259,202 $279,323 $300,807 TOTAL O&M EXPENSES $2,178,301 $2,336,007 $2,448,337 $2,549,628 $2,655,384 145
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3.5 CAPITAL IMPROVEMENT PLAN
Table 3-17 shows the City’s detailed five-year Note that the values shown in Table 3-17 are inflated according to the assumed Capital inflation figure found in Table 3-1.
Table 3-17: Detailed Inflated Capital Improvement Plan
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Chlorine Analyzer $0 $0 $0 $0 $0 $0
City Hall Transfer $450,000 $0 $0 $0 $0 $0
Raw Water Pump - Filter Plant (BOR) $0 $309,300 $0 $0 $0 $0 Refurbish Tank II $0 $0 $0 $0 $0 $0
2013\2014\2015 Water Improvements $14,982 $0 $0 $0 $0 $0 Water Master Plan Update $150,000 $0 $0 $0 $0 $0
Sludge Dewatering (Net of Grant expense) $50,000 $51,550 $0 $0 $0 $0 Pensacola Transmission Main Replacement $0 $0 $0 $0 $0 $0 Water Maintenance $0 $0 $0 $0 $0 $0
Software and server $0 $0 $0 $0 $0 $0
Water Feasibility Study $0 $0 $0 $0 $0 $0
Filter No 2 Media Replacement $100,000 $0 $0 $0 $0 $0
Storage Tank Replacement $0 $257,750 $265,740 $273,978 $282,472 $291,228 Westside Water Project (3 phase) $0 $0 $318,888 $328,774 $338,966 $349,474 Chlorine Gas Detector Monitor $0 $0 $0 $0 $0 $0
Toyon Water Plan Demolition $0 $51,550 $0 $0 $0 $0
Retaining Wall $0 $128,875 $0 $0 $0 $0
Reserve Allocation $0 $0 $0 $0 $0 $0
Filter No 1 Rehab $0 $0 $106,296 $109,591 $0 $0
TOTAL CIP - INFLATED $764,982 $799,025 $690,925 $712,343 $621,437 $640,702
3.6 EXISTING AND PROPOSED DEBT SERVICE
Table 3-18 shows the City’s existing debt service payments. The City does not anticipate issuing more debt in the Study period.
Table 3-18: Existing and Proposed Debt Service
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Safe Drinking Water Loan
Principal $49,597 $51,673 $53,837 $56,098 $0
Interest $8,244 $6,167 $4,004 $1,750 $0
Total Debt Service $57,841 $57,840 $57,841 $57,848 $0
iBank Water Loan
Principal $147,217 $151,678 $156,274 $161,009 $165,888
Interest $117,996 $113,468 $108,803 $103,996 $99,043
Total Debt Service $265,213 $265,146 $265,077 $265,005 $264,931 Cal PERS Loan from the Electric Fund
Principal $11,034 $11,255 $11,480 $11,709 $11,944
Interest $1,894 $1,673 $1,448 $1,218 $984
Total Debt Service $12,928 $12,928 $12,928 $12,927 $12,928 TOTAL EXISTING DEBT SERVICE $335,982 $335,914 $335,846 $335,780 $277,859 146
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3.7 RESERVE TARGETS
Currently, the City maintains three reserves: an operating reserve, a capital reserve, and a debt service reserve.
Operating Reserve – The Operating Reserve is used primarily to meet ongoing cash flow requirements.
The City’s Operating Reserve target is currently at 25% (three months) of budgeted Operating Expenses and will remain the same.
Capital Reserve – The Capital Reserve is used to cover any unexpected and unplanned infrastructure repairs and replacements not included in the budget. It is recommended that the City maintain a Capital Reserve equivalent to one year’s CIP spending based on the study period’s average CIP expenditure, roughly $700,000. RFC used this recommended reserve target to develop the rate adjustments shown in this financial plan.
Debt Service Reserve – The City holds the final principal payment of its retiring debt service in reserve.
3.8 PROPOSED FINANCIAL PLAN AND REVENUE ADJUSTMENTS
The proposed revenue adjustments help ensure adequate revenue to fund operating expenses, capital expenditures and compliance with bond covenants. Financial Plan modelling assumes the first revenue adjustment occurs on October 1, 2016 with the subsequent ones in March of 2018 and 2019. The proposed revenue adjustments would enable the City to execute the CIP shown in Table 3-17, while exceeding its debt service coverage requirement of 110% over the five-year Study period.
Table 3-19 shows the proposed revenue adjustments for the course of the Study period.
Table 3-19: Proposed Rate Adjustments
Effective Date Proposed Water Revenue Adjustments
October 2016 30 percent
March 2018 15 percent
March 2019 10 percent
Table 3-20 shows the cash flow detail over the next five years assuming the selected Financial Plan. Line 7 shows the additional revenue from the revenue adjustments. Line 26 shows the City meets debt service coverage requirements during the Study period.
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Table 3-20: Five-Year Water Operating Cash Flow
Line FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
1 Revenue from Current Rates $2,029,199 $2,343,266 $2,374,518 $2,405,770 $2,437,022 Fiscal Year Revenue
Adjustments
Month
Effective
2 2016 0.0% July $0 $0 $0 $0 $0
3 2017 30.0% October $527,235 $712,355 $721,731 $731,107 4 2018 15.0% March $154,344 $469,125 $475,219
5 2019 10.0% March $119,888 $364,335
6 2020 0.0% March $0
Additional Rate Revenue $0 $527,235 $866,699 $1,310,744 $1,570,661 7 Total Rate Revenue $2,029,199 $2,870,500 $3,241,217 $3,716,513 $4,007,682 8 Other Revenue
9 Interest Revenue $17,709 $13,537 $9,609 $18,738 $25,596 10 Transfer from General Fund $0 $11,000 $11,000 $11,000 $11,000 11 Pass-through Revenue $0 $4,631 $17,054 $30,760 $45,830 12 Drought Rate Revenue (Penalty Rates) $495,000 $0 $0 $0 $0 13 TOTAL REVENUE $2,541,908 $2,899,668 $3,278,880 $3,777,011 $4,090,108 O&M Expenses
14 General and Administrative $542,905 $563,080 $580,457 $598,371 $616,837 15 Distribution $709,954 $736,635 $759,406 $782,881 $807,080 16 Water Treatment Plant $677,872 $795,928 $849,272 $889,054 $930,660 17 Water Purchases $247,570 $240,364 $259,202 $279,323 $300,807 18 Total O&M Expenses $2,178,301 $2,336,007 $2,448,337 $2,549,628 $2,655,384 19 Existing Debt Service $335,982 $335,914 $335,846 $335,780 $277,859 20 Proposed Debt Service $0 $0 $0 $0 $0
21 Rate Funded Capital Projects $764,982 $799,025 $690,925 $712,343 $621,437 22 General Admin Transfer $0 $11,000 $11,000 $11,000 $11,000 23 TOTAL EXPENSES $3,279,265 $3,481,946 $3,486,108 $3,608,752 $3,565,681 24 Net Cash Flow ($737,357) ($582,278) ($207,228) $168,259 $524,428 26 Calculated Debt Coverage 108% 168% 247% 366% 516%
26 Required Debt Coverage 125% 125% 125% 125% 125%
Figures 3-1 through 3-5 display the FY 2016 through FY 2020 Financial Plan in graphical format. Figure 3- 1 shows the modeled revenue adjustments (blue bars) for the next four years. RFC notes that the City is setting rates and adjusting revenues through FY 2019. Revenue adjustments beyond FY 2019 will be evaluated on an as-needed basis in the future. Figure 3-1 also graphs the calculated and minimum debt coverage requirements as shown by the green and red Lines respectively. 148
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Figure 3-1: Proposed Revenue Adjustments
Figure 3-2 graphically illustrates the operating Financial Plan – it compares existing and proposed revenues with projected expenses. The expenses include O&M, purchased water, debt service, and reserve funding and are shown by the stacked bars; and total revenues at existing and proposed rates are shown by the horizontal orange and blue Lines, respectively. Current revenue from existing rates, in orange, does not meet future total expenses and shows the need for revenue adjustments.
Figure 3-2: Proposed Operating Financial Plan
Figure 3-3 summarizes the projected CIP and its funding sources – debt or rate/reserve funded. As shown, the City plans to pay for all its CIP via rate revenue-; the City will not issue debt to pay for future CIP. 149
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Figure 3-3: Projected CIP and Funding Sources
Figure 3-4 displays the total of all funds (operating and capital) yearly ending balance (green bars). The red line is the total fund target balance, which is the combination of 3 months of O&M expenses based on currently adopted City policy and the average of a year’s worth of CIP spending over the course of the Study period. As shown, the operating fund is anticipated to dip below the target in FY 2017 through FY 2019 – this is due to anticipated water sales and capital project expenditures. As shown in Figure 3-4, the operating fund recovers by the end of the Study period.
Figure 3-4: Projected Operating Fund Ending Balances
$0.8 $0.8
$0.7 $0.7
$0.6
$0.0
$0.1
$0.2
$0.3
$0.4
$0.5
$0.6
$0.7
$0.8
$0.9
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Millions
Capital Financing Plan
Bond Funded CIP Rate Funded CIP
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4 LEGAL FRAMEWORK AND RATE SETTING
METHODOLOGY
4.1 LEGAL FRAMEWORK
This section of the report describes the legal framework that was considered to ensure that the calculated cost of service rates provide a fair and equitable allocation of costs to customer classes.
California Constitution - Article XIII D, Section 6 (Proposition 218) Proposition 218, reflected in the California Constitution as Article XIII D, was enacted in 1996 to ensure that rates and fees are reasonable and proportional to the cost of providing service. The principal requirements for fairness of the fees, as they relate to public water service are as follows:
1. A property-related charge (such as water rates) imposed by a public agency on a parcel shall not exceed the costs required to provide the property related service.
2. Revenues derived by the charge shall not be used for any other purpose other than that for which the charge was imposed.
3. The amount of the charge imposed upon any parcel shall not exceed the proportional cost of service attributable to the parcel.
4. No charge may be imposed for a service unless that service is actually used or immediately available to the owner of property.
5. No fee or charge may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.
6. A written notice of the proposed charge shall be mailed to the record owner of each parcel at least 45 days prior to the public hearing, when the agency considers all written protests against the charge.
As stated in AWWA’s M1 Manual, “water rates and charges should be recovered from classes of customers in proportion to the cost of serving those customers.” Prop 218 requires that water rates cannot be “arbitrary and capricious,” meaning that the rate-setting methodology must be sound and that there must be a nexus between costs and the rates charged. RFC followed industry standard rate setting methodologies set forth by the AWWA M1 Manual to ensure this study meets Proposition 218 requirements and creates rates that do not exceed the proportionate cost of providing water services.
California Constitution - Article X, Section 2
Article X, Section 2 of the California Constitution (established in 1976) states the following:
- “It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare.”
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As stated above Article X, section 2 of the State Constitution institutes the need to preserve the State’s water supplies and to discourage the wasteful or unreasonable use of water by encouraging conservation.
As such, public agencies are constitutionally mandated to maximize the beneficial use of water, prevent waste, and encourage conservation.
In addition, Section 106 of the Water Code declares that the highest priority use of water is for domestic purposes, with irrigation secondary. To meet the objectives of Article X, section 2, Water Code Section 375 et seq., a water purveyor may utilize its water rate design to incentivize the efficient use of water.
The City established single family tiered rates to incentivize customers to conserve water. The tiered rates (as well as rates for the remaining classes) need to be based on the proportionate costs incurred to provide water to customer classes to achieve compliance with Proposition 218.
Tiered Rates – “Inclining” block rate structures (which are synonymous with “increasing” block rate structures and tiered rates) when properly designed and differentiated by customer class, allow a water utility to send consistent conservation price incentives to customers. Due to heightened interest in water conservation, tiered rates have gained widespread use, especially in relatively water-scarce regions, such as Southern California. Tiered rates meet the requirements of Proposition 218 as long as the tiered rates reflect the proportionate cost of providing service.
4.2 COST-BASED RATE-SETTING METHODOLOGY
As stated in the AWWA M1 Manual, “the costs of water rates and charges should be recovered from classes of customers in proportion to the cost of serving those customers.” To develop utility rates that comply with Proposition 218 and industry standards while meeting other emerging goals and objectives of the utility, there are four major steps discussed below. 1) Calculate Revenue Requirement
The rate-making process starts by determining the test year revenue requirement - which for this study is FY 2016. The revenue requirement should sufficiently fund the utility’s O&M, debt service, and capital expenses, and reserve funding.
2) Cost Of Service Analysis (COS)
The annual cost of providing water service is distributed among customer classes commensurate with their service requirements. A COS analysis involves the following:
1. Functionalizing costs. Examples of functions are supply, treatment, transmission, distribution, storage, meter servicing and customer billing and collection.
2. Allocating functionalized costs to cost components. Cost components include base, maximum day, maximum hour9
, meter service, customer servicing and conservation costs.
3. Distributing the cost components. Distribute cost components, using unit costs, to customer classes in proportion to their demands on the water system. This is described in the M1 Manual published by AWWA.
9 Collectively maximum day and maximum hour costs are known as peaking costs or capacity costs. 152
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A COS analysis considers both the average quantity of water consumed (base costs) and the peak rate at which it is consumed (peaking or capacity costs as identified by maximum day and maximum hour demands).10 Peaking costs are costs that are incurred during peak times of consumption. There are additional costs associated with designing, constructing, and operating and maintaining facilities to meet peak demands. These peak demand costs need to be allocated to those imposing such costs on the utility.
In other words, not all customer classes share the same responsibility for peaking related costs. 3) Rate Design and Calculations
Rates do more than simply recover costs. Within the legal framework and industry standards, properly designed rates should support and optimize a blend of various utility objectives, such as conservation, affordability for essential needs and revenue stability among other objectives. Rates may also act as a public information tool in communicating these objectives to customers. 4) Rate Adoption
Rate adoption is the last step of the rate-making process to comply with Proposition 218. RFC documented the rate study results in this Study Report to help educate the public about the proposed changes, the rationale and justifications behind the changes and their anticipated financial impacts in lay terms.
10 System capacity is the system’s ability to supply water to all delivery points at the time when demanded.
Coincident peaking factors are calculated for each customer class at the time of greatest system demand. The time of greatest demand is known as peak demand. Both the operating costs and capital asset related costs incurred to accommodate the peak flows are generally allocated to each customer class based upon the class’s contribution to the peak month, day and hour event.
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5 COST OF SERVICE ANALYSIS
The principles and methodology of a cost of service analysis were described in Section 4.2. A cost of service analysis distributes a utility’s revenue requirements (costs) to each customer class. After determining a utility’s revenue requirement, the next step in a cost of service analysis is to functionalize its O&M costs to the following functions:
1. General and Administrative Costs
2. Distribution Costs
3. Water Treatment Plant (Treatment) Costs
4. Water Supply
5. Customer Service
6. Meter Service
The functionalization of costs allows us to better allocate the functionalized costs to the cost causation components. The cost causation components include:
1. Supply costs
2. Base Delivery (Base) costs11
3. Peaking costs (maximum day and maximum hour)
4. Fire Protection (Fire) costs12
5. Meter Service (Meter) costs
6. Customer Service (Customer) costs
7. General and Administrative (General) costs
8. Conservation costs
9. Lifeline costs
Peaking costs are further divided into maximum day and maximum hour demand. The maximum day demand is the maximum amount of water used in a single day in a year. The maximum hour demand is the maximum usage in an hour on the maximum usage day. Different facilities, such as distribution and storage facilities, and the O&M costs associated with those facilities, are designed to meet the peaking demands of customers. Therefore, extra capacity13 costs include the O&M and capital costs associated with meeting peak customer demand. This method is consistent with the AWWA M1 Manual, and is widely used in the water industry to perform cost of service analyses.
5.1 FUNCTIONALIZATION OF O&M EXPENSES
Table 5-1 shows the functionalization of the City’s O&M expenses. Functionalizing O&M expenses allows RFC to follow the principles of rate setting theory in which the end goal is to allocate the City’s O&M expenses to cost causation components. This is further explained in Section 5.2. We note that the
11 Base Delivery costs are the average costs of supply
12 Fire Protection Costs will be used interchangeably with Fire Costs 13 The terms extra capacity, peaking, and capacity costs are used interchangeably. 154
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functionalized expenses shown in Table 5-1 match with the O&M FY 2017 O&M expenses shown in Table 3-16.
Table 5-1: Functionalization of O&M Expenses
Function Budgeted FY 2017
General and Administrative $563,080
Distribution $736,635
Water Treatment Plant $795,928
Water Purchases $240,364
TOTAL O&M EXPENSES $2,336,007
5.2 ALLOCATION OF FUNCTIONALIZED EXPENSES TO COST COMPONENTS After functionalizing expenses, the next step is to allocate the functionalized expenses to cost causation components. To do so we must identify system wide peaking factors which are shown in Column A, Table 5-2. The system-wide peaking factors are used to derive the cost component allocation basis (i.e., percentages) shown in Columns B through D of Table 5-2. Functionalized expenses are then allocated to the cost components using these allocation bases. To understand the interpretation of the percentages shown in Columns B through Column D we must first establish the base use as the average daily demand during the year.
Examples of how the percentages shown in Table 5-2 were derived are shown below the table. As shown in the example calculations, we first remove fire protection from the total percentage before the remaining calculations are performed.
As an example, the functionalized expenses that are allocated to the cost components using the maximum day basis (Line 2) attribute 41% of the demand (and therefore costs) to base (average daily demand) use and the remaining 49% to maximum day (peaking) use. Expenses allocated using the maximum hour basis assume 23% of costs are due to base demands with the remaining proportion (100%-23%) of costs allocated to the maximum day cost component. Collectively the maximum day and hour cost components are known as peaking costs. These allocation bases are used to assign the functionalized costs in Table 5- 3 to the cost components. A summary of the calculations made to generate Table 5-2 are shown on the following page.
Table 5-2: System-Wide Peaking Factors and Allocation to Cost Components Line Peaking
Factors Base Max Day Max Hour
A B C D
1 Base 1.00 100% 0% 0%
2 Max Day 2.18 41% 49% 0%
3 Max Hour 3.63 23% 28% 35%
4 Average 32% 39% 17%
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𝐵𝑎𝑠𝑒 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝐵𝑎𝑠𝑒
𝑀𝑎𝑥 𝐷𝑎𝑦
𝑀𝑎𝑥 𝐷𝑎𝑦 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝑀𝑎𝑥 𝐷𝑎𝑦 − 𝐵𝑎𝑠𝑒
𝑀𝑎𝑥 𝐷𝑎𝑦
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 − 𝑀𝑎𝑥 𝐷𝑎𝑦
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟
These peaking characteristics result in the following Cost Components allocations for Max Day:
𝐵𝑎𝑠𝑒 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝐵𝑎𝑠𝑒
𝑀𝑎𝑥 𝐷𝑎𝑦 = (1 − .10) ×
1 2.18 ≈ 41%
𝑀𝑎𝑥 𝐷𝑎𝑦 = (1 − .10) ×
2.18 − 1
2.18 ≈ 49%
For the Max Hour Component, the calculations are shown below.
𝐵𝑎𝑠𝑒 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝐵𝑎𝑠𝑒
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 = (1 − .14) ×
1 3.63 ≈ 23%
𝑀𝑎𝑥 𝐷𝑎𝑦 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝑀𝑎𝑥 𝐷𝑎𝑦 − 𝐵𝑎𝑠𝑒
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 = (1 − .14) ×
1.18 3.63 ≈ 28%
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 = (1 − 𝐹𝑖𝑟𝑒 𝑃𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛) ×
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 − 𝑀𝑎𝑥 𝐷𝑎𝑦
𝑀𝑎𝑥 𝐻𝑜𝑢𝑟 = (1 − .14) ×
1.45 3.63 ≈ 35%
Table 5-3 allocates the functionalized O&M expenses shown in Column K, Lines 5 through 8, (and also shown earlier in Table 5-1) to each cost component using the basis shown in the upper portion of Table 5-3 (Lines 1-4) – some of which are the same as those shown in Table 5-2. There are several exceptions however: the General and Administrative expenses are mostly allocated to General costs, with the exception of costs that were 1. Related to Meters; 2. Related to Customer Service, or; 3. Related to conservation programs.14 Water purchase costs were allocated solely to the Supply cost causation component.
The functions (Lines 5 through 8) are allocated according to industry standards that are defined based on the nature of the water treatment function. For example: water purchases are associated with getting and treating water – therefore those costs are allocated (100%) to the supply cost component using line 4 of Table 5-3. Treatment costs are mostly associated with meeting base demands, however treatment costs are likely higher during the summertime (the months of June through September when demand is
14 These breakdowns were provided by Staff.
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at its highest) and therefore a portion of treatment costs are allocated to maximum day demands as shown in Line 7. A similar basis is used for the distribution system, which is operated to meet maximum hour and day (peaking) demand and is allocated as such in Line 6 of Table 5-3.
Line 10 of Table 5-3 shows the total resulting cost component allocation for O&M expenses. This resulting allocation is used to allocate the City’s operating revenue requirement (discussed in Section 5.3) to the cost components.
Table 5-3 also shows the total resulting allocation for the City’s assets. The resulting total asset allocation is derived in a similar manner as the O&M allocation - first, RFC functionalized the City’s assets and then allocated them to the cost causation components using the same percentages shown in Lines 1 through 4 of Table 5-3, resulting in the asset total allocation shown in Line 11. Part of the City’s revenue requirement includes rate/reserve funded capital. This capital portion of the revenue requirement is allocated to the cost components using the resulting asset allocation in Line 13. 157
26 | City of Shasta Lake
Table 5-3: Allocation of Functionalized O&M and Capital Expenses to Cost Causation Components O&M Functions
Allocation
Basis Supply Base Max Day
Max
Hour Fire Meter Customer General Conservation TOTAL
Line A B C D E F G H I J K
1 General and Administrative 5% 24% 68% 3% 100%
2 Distribution Max Hour 23% 28% 35% 14% 0% 100%
3 Water Treatment Plant Max Day 41% 49% 0% 10% 0% 100%
4 Water Purchases Supply 100% 100%
O&M Allocation
5 General and Administrative $0 $0 $0 $0 $0 $25,929 $134,932 $383,637 $18,582 $563,080 6 Distribution $0 $168,010 $205,351 $257,682 $105,592 $0 $0 $0 $0 $736,635 7 Water Treatment Plant $0 $324,680 $391,656 $0 $79,593 $0 $0 $0 $0 $795,928 8 Water Purchases $240,364 $0 $0 $0 $0 $0 $0 $0 $0 $240,364 9 TOTAL O&M EXPENSES $240,364 $492,689 $597,007 $257,682 $185,185 $25,929 $134,932 $383,637 $18,582 $2,336,007 10 % Allocation 10% 21% 26% 11% 8% 1% 6% 16% 1% 100%
Capital Allocation Supply Base Max Day
Max
Hour Fire Meter Customer General Conservation TOTAL
11 Functionalized Asset Percentages 4% 37% 24% 18% 9% 0% 0% 7% 0% 100 12 Rate Funded Capital Projects $33,458 $297,759 $194,717 $143,924 $75,239 $603 $0 $53,325 $0 $799,025 13 Allocated by Funct. Assets $33,458 $297,759 $194,717 $143,924 $75,239 $603 $0 $53,325 $0 $799,025 Total Allocation Supply Base Max Day
Max
Hour Fire Meter Customer General Conservation TOTAL
14 O&M Allocated Expenses $240,364 $492,689 $597,007 $257,682 $185,185 $25,929 $134,932 $383,637 $18,582 $2,336,007 15 Capital Allocated Expenses $33,458 $297,759 $194,717 $143,924 $75,239 $603 $0 $53,325 $0 $799,025 158
Water Rate Study Report | 27
5.3 REVENUE REQUIREMENT DETERMINATION
Table 5-4 shows the revenue requirement derivation with the total revenue required from rates shown in C15. The totals shown in Columns C are the total O&M and capital revenue requirements that are allocated to the cost components using the allocation percentages shown in Lines 10 and 13 of Table 5-3.
RFC calculated the revenue requirement using Fiscal Year 2017 expenses, which include water purchases, O&M expenses, capital expenses and existing and proposed debt service15. O&M expenses include costs directly related to the supply, treatment, and distribution of water as well as routine maintenance of system facilities. To arrive at the rate revenue requirement, we subtract revenue offsets (line 8) from other revenues and make adjustments for annual cash balances (line 12) and for the fact that the impending rate adjustment will take place four months into the fiscal year and we must therefore annualize the rate increase (Line 13). The adjustments, shown as negative values are subtracted (therefore added as a result of subtracting a negative number) to arrive at the total revenue required from rates in C15. This is the amount that fixed and consumption rates are designed to collect.
The pass-through revenue in Line 11 is subtracted from the revenue requirement as an adjustment because the revenues from the pass-through are calculated separately and in this way they are not incorporated into the COS.
The transfer from General Fund in Line 7 is the same value as the Lifeline Adjustment in Line 10. The transfer to the General Fund covers services rendered by the General Fund to the water Utility. The General Fund transfers a similar amount to the water enterprise to offset (lower) the Tier 1 rate for Lifeline (lower income and fixed income) customers.
15 There is no proposed debt service for FY 2017 or at any time throughout the Study period. 159
28 | City of Shasta Lake
Table 5-4: Revenue Requirement Determination
Line FY 2017
A B C
Operating Capital Total
Revenue Requirements
1 O&M Expenses $2,336,007 $2,336,007
2 Existing Debt Service $335,914 $335,914
3 Proposed Debt Service $0 $0
4 Rate Funded Capital Projects $799,025 $799,025
5 Total Revenue Requirements Line 1+2+3+4 $2,336,007 $1,134,939 $3,470,946 Less: Revenue Offsets
6 Interest Revenue $13,537 $13,537
7 Transfer from General Fund $11,000 $11,000
8 Total Revenue Offsets Line 6+7 $24,537 $0 $24,537
Less: Adjustments
10 Lifeline Adjustment ($11,000) ($11,000)
11 Pass Through Revenue $4,631 $4,631
12 Adjustment for Cash Balance $582,278 $582,278
13 Adjustment for Midyear Increase ($175,745) ($175,745) 14 Total Adjustments Line 10+11+12+13 ($182,114) $582,278 $400,163 15 Revenue Requirement from Rates Line 5 – Line 8 – Line 14 $2,493,584 $552,661 $3,046,245
5.4 REVENUE OFFSET, GENERAL EXPENES, AND PEAK ALLOCATION Table 5-4 shows several revenue offsets that reduce the total revenues to be recovered from rates. In order to calculate the final rates these offsets have to be allocated as they were in Table 5-3. Table 5-5, shows this allocation to each cost component. Note that Column K in Table 5-5 is a new Column, not found in previous tables. Interest revenue was allocated using the same percentages as the functionalized asset percentages found in Line 11 of Table 5-3. The Transfer from the General Fund is allocated to the new Lifeline cost component so that it can be applied to Lifeline Tier 1 usage. 160
Water Rate Study Report | 29
Table 5-5: Allocation of Offsets
Revenue Offset
Allocation
Basis Supply Delivery Max Day Max Hour Fire Meter Customer General Conservat
ion Lifeline TOTAL
A B C D E F G H I J K L
Interest Revenue Capital 4% 37% 24% 18% 9% 0% 0% 7% $13,537 Transfer from General Fund 100% $11,000
Total Revenue Offsets $567 $5,045 $3,299 $2,438 $1,275 $10 $0 $903 $0 $11,000 $24,537 We then apply the offsets (line 2 in Table 5-6) calculated in Table 5-5 to the Operating Expenses (Table 5-6, Line 1) and then add the capital expenses (line 3, Table 5-6) to yield the total Cost of Service shown in line 4. Note that the total cost of service (line 4) is the same as the revenue requirement shown in C15 of Table 5-4.
These Operating Expenses are allocated according to the allocation found in Table 5-3, Line 10. The Capital Expenses are the total Capital Revenue Requirement from Rates (Table 5-4, B15) allocated according to the percentages found in Table 5-3, Line 11.
Lines 1 through 3 are totaled to equal Line 4 -the Total Cost of Service. We then allocate General Costs and peaking costs (max day and max hour) to the meter cost component in lines 5 and 6. We allocated General Costs in H4 in proportion to the amounts of the other cost components in Line 4 Column A through F. Lifeline and Conservation were left out of this allocation in order to keep Lifeline costs separate, and to maintain the direct correlation between Conservation program costs and the Conservation component. Finally, 64% of peak costs (max day and max hour) were allocated to the Meter cost component in order to achieve the City’s desired level of fixed revenue since Meter and Customer costs are collected through the fixed monthly service charge. The remaining cost components are collected through the consumption rate.
Table 5-6: Total Adjusted Cost of Service Calculation
Supply Delivery Max Day Max Hour Fire Meter Customer General Lifeline Conservation TOTAL Line A B C D E F G H I J K
1 Operating Expenses $259,103 $531,099 $643,550 $277,770 $199,622 $27,950 $145,451 $413,546 $0 $20,030 $2,518,122 2 Revenue Offset ($567) ($5,045) ($3,299) ($2,438) ($1,275) ($10) $0 ($903) ($11,000) $0 ($24,537) 3 Capital Expenses $23,142 $205,951 $134,679 $99,548 $52,040 $417 $0 $36,884 $0 $0 $552,661 4 Total Cost of Service $281,678 $732,006 $774,930 $374,880 $250,388 $28,357 $145,451 $449,526 ($11,000) $20,030 $3,046,245 5 Allocation of General Cost ($) $48,932 $127,162 $134,619 $65,123 $43,497 $4,926 $25,267 ($449,526) $0 6 Allocation of Peaking Cost to Meter ($582,111) ($281,602) $863,713 7 Total Adjusted Cost of Service $330,610 $859,167 $327,438 $158,401 $293,884 $896,997 $170,718 $0 ($11,000) $20,030 $3,046,245 161
30 | City of Shasta Lake
The final Total Adjusted Cost of Service (on Line 7 of Table 5-6) is total to be recovered from the fixed monthly service charge and the consumption rate.. 162
Water Rate Study Report | 31
6 RATE DERIVATION
6.1 PROPOSED RATE STRUCTURE AND RATES
The City’s water service fees are comprised of two components: (1) a Monthly Service Charge, and (2) a Consumption Charge. The Monthly Service Charge is a fixed charge based on the size of meter serving a property, and is calculated to recover a portion of the City’s fixed costs, such as the costs of billing and collection, customer service, meter reading, and meter maintenance. The commodity rate recovers the balance of remaining costs associated with meeting base and extra capacity costs.
Table 6-1 shows the current and proposed commodity rates by user class. RFC recommends a simplification of the current tiered rate structure, and implementing a uniform commodity rate for all non-single family-residential (SFR) customers. Moreover, RFC recommends adjusting SFR tier widths, as shown in Table 6-1.
Table 6-1: Current and Proposed SFR and Lifeline Tier Widths and Rationale Tier Current Range (cubic
feet)
Proposed Range
(cubic feet)
Rationale
Tier 1 0-1,000 0-800 minimum average winter use
Tier 2 1001-5,000 801-2,000 average summer use
Tier 3 5,001+ 2,001+
For all other customer classes, the commodity rate is a distinct uniform rate per HCF of water usage. Cost of service principles justify higher rates for classes with higher peaking ratios.
This section will explain the rate derivation process for Fire Service Charges, Monthly Service Charges, and Commodity Charges, in that order.
The Rate Derivation will recover the costs shown in row 7 of Table 5-6, which is repeated below in Table 6-2, less the Lifeline costs.
Table 6-2: Total Adjusted Cost of Service
Total Adjusted COS Supply Delivery Max Day Max Hour Fire Meter Customer Lifeline Conservat ion.
A B C D E F G H I
$3,046,245 $330,610 $859,167 $327,438 $158,401 $293,884 $896,997 $170,718 ($11,000) $20,030
6.2 PROPOSED PRIVATE FIRE CHARGES
Total Fire Protection costs include public and private fire costs. The monthly service charge includes public fire protection costs, therefore we first determine public fire protection costs which are incorporated into the monthly service charge. The remaining Private Fire Protection costs are incorporated into the Private Fire Charges. Table 6-3 shows this process in two steps. 163
32 | City of Shasta Lake
RFC first calculated Public and Private Fire costs as shown in column D of Table 6-3 . Column A shows the Fire Demand Factor for each Fire Meter. The fire demand factor is calculated using the Hazen Williams equation for flow – which assumes that the flow is equal to the diameter of the pipe raised to the 2.63 power. The Public 4” hydrants each have two 2.5” connections as well, so the potential demand for the public hydrants is higher than the 4” private line. The City provided RFC with the number of hydrants, and the number of private fire connections shown in column B of Table 3-5. The Total Fire Demand Units in Column C are found by multiplying the numbers in Column A by Column B. Column D shows the total percent allocation. Public fire accounts for 89.5% of the City’s fire demand and therefore is allocated
89.5% of the City’s fire cost. The total found in E1 is taken by multiplying D1 by the total in F7 of Table 5-6.
Private Fire Charges collect the remaining 10.5% of the fire revenue requirement. RFC calculated the private fire charges by taking the Private Fire subtotal (E9) and dividing by the annualized Private Fire Demand Units. The annualized Private Fire Demand Units number is equal to the Private Fire Demand Unit Subtotal (C9) divided by 12, since this charge is collected on a monthly basis. This process gives the Monthly Cost per Demand Unit (D10). RFC found the final Rate for each Meter by multiplying the Monthly Cost per Demand Unit by the Meter’s Fire Demand Factor (Column A). The revenue check in Column E confirms that the revenues from the proposed charges are sufficient to cover private fire costs.
Table 6-3: Fire Charge Calculation
Connection Size
Fire
Demand
Factor
No. of
Hydrants
Total Fire
Demand
Units
Percent
Allocation
Fire
Protection
Costs
Monthly
Charge
Line A B C = A × B D = C ÷ C9 E = D × E10 F
Public Hydrants
1 4" 61 405 24,536 89.5% $262,974
Private Fire Lines
2 2" 6 0 0 0.0% $0 $5.53
3 3" 18 0 0 0.0% $0 $16.06
4 4" 38 5 192 0.7% $2,053 $34.22
5 6" 111 8 890 3.2% $9,544 $99.42
6 8" 237 4 949 3.5% $10,169 $211.86
7 10" 427 2 853 3.1% $9,144 $381.00
8 12" 689 0 0 0.0% $0 $615.41
9 Subtotal 19 2,884 10.5% $30,911
10 Monthly Cost per Demand Unit $0.89
11 Total 27,421 100% $293,884
6.3 PROPOSED MONTHLY SERVICE CHARGE
The Proposed Monthly Service Charges are designed to recover three different cost components: The Meter Costs, Customer Costs, and Public Fire Costs. In order to calculate the Monthly Service charges RFC first had to determine the proper denominator to allocate these costs, which was done in an Equivalent Meter Units (EMU) Analysis. The Metering Costs have the public fire costs included in them, and is allocated based on meter Operating Capacity, and the Customer Service Component is allocated equally to all accounts.
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Table 6-4 shows the EMU calculation process. Column A shows the number of meters for each meter size, this information is taken from Table 3-3. Column B shows each meter’s Operating Capacity as provided by the AWWA M1 Manual in Table B-1.16 Column C shows the ratio of each meter’s operating capacity relative to the base meter, in this case the 5/8” meter. Column D calculates the total number of EMUs by multiplying the values in Column C by the values in Column A. The total EMUs is shown in D11.
Table 6-4: Equivalent Meter Unit Calculation
Meter Size Meter Count
AWWA Operating
Capacity
AWWA Capacity
Ratio
Equivalent Meter
Units
A B C D
Line Source Table 3-3 AWWA M1 Manual Column B ÷ B1 A × C 1 5/8" 3,585 20 1.0 3,585
2 1" 92 50 2.5 230
3 1.5" 14 100 5.0 70
4 2" 43 160 8.0 344
5 3" 1 300 15.0 15
6 4" 3 500 25.0 75
7 6" 1 1,000 50.0 50
8 8" 0 1,600 80.0 0
9 10" 2 2,900 145.0 290
10 12" 0 4,300 215.0 0
11 Total 3,741 4,659
Table 6-5 shows the Monthly Service Charge calculation. This charge was calculated by dividing the sum of the Meter Cost and Public Fire Cost by the number of EMUs per year. Note that EMUs per year is the total number of EMUs multiplied by 12.
Table 6-5: Monthly Meter Charge Calculation
Line Source Total
1 Meter Cost Table 6-2 $896,997
2 Public Fire Cost Table 6-3 $262,974
3 Total of Fire and Meter Cost Line 1 + Line 2 $1,159,970 4 Total EMUs Table 6-4 4,659
5 EMUs per Year Line 4 × 12 55,908
6 Monthly Meter Charge Line 3 ÷ Line 5 $20.75
The Customer Service Costs are allocated evenly to all customers based on the assumption that it costs the City the same amount to bill customers regardless of their meter size. The total Customer Service Costs are spread evenly across all customers, therefore the Monthly Service Charge is calculated by dividing the total Customer Service Costs by the number of Bills per Year (which is the number of meters multiplied by 12). The calculation is shown in Table 6-6.
16 American Water Works Association, Principles of Water Rates, Fees, and Charges 2012 Edition, Table B-1, p. 326 165
34 | City of Shasta Lake
Table 6-6: Monthly Customer Service Charge Calculation
Line Source Total
1 Customer Service Cost Table 6-2 $170,718
2 Total Meters Table 6-4 3,741
3 Bills per year Line 2 × 12 44,892
4 Monthly Customer Service Charge Line 1 ÷ Line 3 $3.80 The Monthly Service Charge is calculated by adding the Monthly Meter Charge to the Monthly Customer Service Charge. However, since the Meter Charge is calculated based on the number of EMUs, the Meter Charge for each meter must be multiplied by the number of EMUs for each meter size (column B in Table 6-7). This calculation is shown in Table 6-7 below.
Column A shows the Monthly Meter Service Charge as derived in Table 6-5 for one equivalent meter.
Column C shows the total Meter Component for each meter size, which is obtained by multiplying the Base Monthly Meter Charge in Column A by the AWWA Capacity Ratios shown in Column B. Column D, shows the Monthly Customer Service Charges from Table 6-6. The Proposed Charges in Column E are calculated by adding Column C to Column D. Note that the charges in Column E, the total proposed Monthly Meter Service Charge, are rounded so some may be one cent higher than one might expect.
Table 6-7: Derivation of the Monthly Meter Service Charge Meter Size Base Charge
AWWA Capacity
Ratio
Meter
Component
Customer
Service
Proposed
Charge
A B C D E
Line Source Table 3-3 Table 6-4 Table 6-5 Table 6-6 C+D 1 5/8" $20.75 1.00 $20.75 $3.80 $24.56
2 1" $20.75 2.50 $51.87 $3.80 $55.68
3 1.5" $20.75 5.00 $103.74 $3.80 $107.55
4 2" $20.75 8.00 $165.98 $3.80 $169.79
5 3" $20.75 15.00 $311.22 $3.80 $315.03
6 4" $20.75 25.00 $518.70 $3.80 $522.50
7 6" $20.75 50.00 $1,037.39 $3.80 $1,041.20
8 8" $20.75 80.00 $1,659.83 $3.80 $1,663.64
9 10" $20.75 145.00 $3,008.44 $3.80 $3,012.24
10 12" $20.75 215.00 $4,460.79 $3.80 $4,464.59
6.4 COMMODITY RATES
SFR Tier Definitions
With direction from the City, RFC redefined the City’s current tier structure.
The proposed breakpoint for the first tier is set at 800 cubic feet (CF) or 8 hundred cubic feet (HCF), which is the minimum average monthly usage in the winter of FY 2015. This amount was chosen as it reflects indoor usage, as it is assumed that outdoor usage is minimized in winter months. The second tier is set at the average summer monthly use – this tier includes outdoor use as it is the summer average use when outdoor water consumption is highest. This tier break point is at 2,000 CF or 20 HCF. The third tier includes any use beyond the second tier.
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Non-SFR Commodity Rates
RFC recommends changing the City’s current tiered system for all customers, and implementing a uniform rate structure for all customers other than Lifeline and SFR customers. However, RFC also recommends separating the other customers by peaking characteristics into the following usage classes:
1. Multi-Family Residential and Mobile
2. Commercial and Industrial
3. Commercial Irrigation and Government
4. School
Unit Cost Definitions
The commodity rates for each class and tier are derived by summing of the unit rates ($ / HCF) for each cost component:
5. Supply
6. Delivery
7. Peaking
8. Conservation
Water Supply costs are the costs associated with obtaining and treating water to make it ready for transmission and distribution. The City has six possible sources of water, shown in Table 3-11 with only three expected to be used in FY 2016 due to drought conditions.
Delivery costs are the operating and capital costs associated with delivering water to all customers at a constant average rate of use – also known as serving customers under average daily demand conditions.
Therefore, delivery costs are spread over all units of water irrespective of customer class or tiers.
Peaking costs, or extra-capacity costs, represent costs incurred to meet customer peak demands in excess of a base use (or average daily demand). Total extra capacity costs are comprised of maximum day and maximum hour demands. The peaking costs are distributed to each tier and class using peaking factors derived from customer use data.
Conservation costs are costs, which cover water conservation and efficiency programs and efforts. These programs are targeted to high volume water users. Therefore, conservation costs were allocated to Tier 3 where water consumption is considered discretionary and for which conservation programs are designed to promote water efficiency. Allocation of conservation costs to upper tiers helps provide a strong price signal for conservation, consistent with Article X Section 2 of the State of California Constitution, and proportionately allocates such costs to those customers whose greater demand create the need for conservation and efficiency programs and efforts.
Unit Cost Derivation for each Cost Component
RFC estimated FY 2017 consumption by escalating FY 2015 consumption by the factors shown in Table 2-2. Actual sales in FY 2015 were 1645 AF, whereas projected sales in FY 2017 are 1810 AF, a difference 167
36 | City of Shasta Lake
of 10%. In order to project FY 2017 sales, RFC increased FY 2015 consumption by 10% for all accounts in all months across the board. A summary of the projected water use is shown in Appendix C. Table 6-8 shows the estimated consumption in each tier in CF and HCF for FY 2017.
Table 6-8: Projected Usage in Revised Tiers (FY 2017)
Line SFR Use by Tier Cubic Feet (CF) HCF
1 Tier 1 23,204,573 232,046
2 Tier 2 14,313,908 143,139
3 Tier 3 10,361,855 103,619
4 Total 47,880,336 478,803
5 Lifeline Use by Tier Cubic Feet (CF) HCF
6 Tier 1 2,817,766 28,178
7 Tier 2 1,458,180 14,582
8 Tier 3 941,279 9,413
9 Total 5,217,225 52,172
10 Total SFR and Lifeline 53,097,561 530,976
Table 6-9 shows the sum from each tier of SFR and Lifeline usage from Table 6-8. RFC combined these two customer classes for the purposes of analyzing SFR usage. In essence, Lifeline usage is treated as part of SFR usage for all purposes except that it has a discounted first tier rate.
Table 6-9: Projected SFR and Lifeline Combined Usage in Revised Tiers (FY 2017) Line Residential Tier (Lifeline and SFR) FY 2017 Annual Usage (cf) HCF 1 Tier 1 26,022,339 260,223
2 Tier 2 15,772,088 157,721
3 Tier 3 11,303,134 113,031
4 Total 53,097,561 530,976
Total projected usage for all classes in FY 2017 is shown in Table 6-10.
Table 6-10: Projected Usage in CF (FY 2017)
Line Residential Tier (Lifeline and SFR) FY 2017 Annual Usage (cf) HCF
1 Lifeline Customers 5,217,225 52,172
2 SFR & CSF 47,880,336 478,803
3 4 Lifeline and SFR 53,097,561 530,976
5 MFR & Mobile 7,545,483 75,455
6 Commercial and Industrial 12,601,080 126,011
7 Commercial Irrigation and Government 3,372,674 33,727 8 School 2,209,118 22,091
9 Total 78,825,915 788,259
The first step in calculating commodity rates is to allocate supply costs. Supply costs were allocated in proportion to use as shown in Table 6-11, columns B and C. Column A shows usage by customer class, Column B shows the percentage of usage of each customer class, Column C shows the allocated supply 168
Water Rate Study Report | 37
costs that are equal to Column B multiplied by the total Supply Cost from Table 6-2. Column D shows the unit rate per HCF calculated by dividing Column C by Column A.
Table 6-11: Supply Rate Calculation
Line Customer Class FY 2017 Annual
Usage (HCF)
Percent of
Usage
Allocated
Supply Costs
Unit Rate
($ /HCF)
Table 6-10
Table 6-2,
Col A
A B = A ÷ A9 C D = C ÷ A
1 Lifeline Customers 52,172
2 SFR & CSF 478,803
3 4 Lifeline and SFR 530,976 67% $222,701 Differentiated 5 MFR & Mobile 75,455 10% $31,647 $0.42
6 Commercial and Industrial 126,011 16% $52,851 $0.42
7 Commercial Irr. and Govt. 33,727 4% $14,146 $0.42
8 School 22,091 3% $9,265 $0.42
9 Total 788,259 100% $330,610
The Supply allocation for Lifeline and SFR customers was then allocated to tiers by price, with the cheapest source going to low tiers.
Table 6-12 shows the supply cost by source. Column A shows the total AF purchased from each source in FY 2017 from Table 3-11, while Column B shows the percentage of total water supply from each source Column C shows the total amount of SFR and Lifeline water supplied by each source, which was calculated by multiplying Column B by the total SFR and CF consumption. Column D shows the cost per AF from each source of supply from Table 3-12, while Column E shows the purchase cost, obtained by multiplying Column A by Column D. Column F shows the percentage of total purchase cost for each source of supply, obtained by dividing the cost for each source in Column E by the total. Column G shows allocated supply cost, obtained by multiplying the SFR and Lifeline allocation from Table 6-11 by the percentages in Column F. The cost per HCF in Column H is obtained by dividing the costs in Column G by the HCF usage in Column C.
Table 6-12: Supply Rate Derivation by Source
Line Source of Supply
Total
Supply
(AF)
% of Total
Supply
SFR HCF
Supplied by
Source
Cost Per
AF
Purchase
Cost
% of
Purchase
Cost
Allocated
Supply
Cost
Cost per
HCF
Table
3-11 Table 6-10 Table 3-12
Table
6-11
A B = A ÷ A7 C D E = A × D F = E ÷ E7 G H = G ÷ C
1 Central Valley Project 1,896 97.4% 517,331 $120.88 $229,162 97.21% $216,492 $0.42 2 McConnell Foundation 0 0.0% 0 $262.50 $0 0.00% $0 $0.00 3 Anderson Cottonwood ID 0 0.0% 0 $238.61 $0 0.00% $0 $0.00 4 MCM Properties 0 0.0% 0 $224.78 $0 0.00% $0 $0.00
5 Shasta County Water Agency 50 2.6% 13,644 $131.44 $6,572 2.79% $6,209 $0.46 6 Centerville CSD 0 0.0% 0 $236.25 $0 0.00% $0 $0.00
7 Total Potable Supply (AF) 1,946 100.0% 530,976 $235,734 100.00% $222,701 169
38 | City of Shasta Lake
The next step for determining the rate for each tier is to allocate water to each tier. To do this, RFC allocated the most economical water first. Table 6-13 shows the allocation of water from each source to the tiers. Since Central Valley Project water is most economical, RFC allocated it first to the lower tiers until it is exhausted, at which point water from Shasta County Water Agency is used in Tier 3. Column E shows the rates derived from Table 6-12.
Table 6-13: Differentiated Supply Water Allocation
Line Source of supply Total Supply Tier 1 Tier 2 Tier 3 Rate ($ /HCF)
Source Table 6-12 Table 6-8 Table 6-8 Table 6-8 Table 6-1
A B C D E
1 Central Valley Project 517,331 260,223 157,721 99,387 $0.42 2 Shasta County Water Agency 13,644 0 0 13,644 $0.46
3 Total 530,976 260,223 157,721 113,031
We then determine the rate for each tier based on the above allocation and the cost by source derived in column H of Table 6-12. Columns 1 and 2 show the relative proportion of each source of water used in each tier, calculated from Table 6-13. The rate for each tier is percentage of from each source multiplied by the cost of each source. Since Tiers 1 and 2 receive all their water from the CVP, their rate is equal to the CVP rate derived in column H. The Tier 3 rate is slightly higher since Tier 3 receives a small amount of water from the Shasta County Water Agency. The resulting rates for each tier as shown in line 4 of Table 6-14 (they are very similar since majority of water comes from the CVP, and as such we have shown fractional cents).
Table 6-14: Differentiated Supply Tier Rate Calculation Line Source of supply Total Supply Tier 1 Tier 2 Tier 3 Source Table 6-12 Table 6-13 Table 6-13 Table 6-13
A B C D
1 Central Valley Project 517,331 100% 100% 88%
2 Shasta County Water Agency 13,644 0% 0% 12%
3 Total 530,976 260,223 157,721 113,031
4 Rate ($ / HCF) $0.418 $0.418 $0.423
Delivery Unit Cost
RFC derived the Delivery unit cost in much the same way as the Supply cost for all non-residential classes, delivery costs are spread in proportion to water use in each class. Table 6-15 shows the delivery Unit Cost Calculation. Column A shows usage by customer class, Column B shows the percentage of usage of each customer class, Column C shows the allocated delivery costs which is equal to Column B multiplied by the total delivery Cost from Table 6-2. Column D shows the unit rate per HCF which is calculated by dividing Column C by Column A.
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Table 6-15: Delivery Unit Cost Calculation
Line Customer Class FY 2017 Annual
Usage (HCF)
Percent of
Usage
Allocated
Delivery
Costs
Unit Rate
($ /HCF)
Table 6-8 Table 6-2
A B = A ÷ A9 C D = C ÷ A
1 Lifeline and SFR 530,976 67% $578,740 $1.09
2 MFR & Mobile 75,455 10% $82,242 $1.09
3 Commercial and Industrial 126,011 16% $137,346 $1.09
4 Commercial Irr. and Govt. 33,727 4% $36,761 $1.09
5 School 22,091 3% $24,078 $1.09
6 Total 788,259 100% $859,167
Peaking Unit Cost
The next step in calculating Commodity rates is the allocation of Peaking costs. The costs in Table 6-2 that are associated with Peaking are the Max Day and Max Hour costs. RFC determined the total Peaking cost component by adding these two costs together. Table 6-16, column C, shows this cost by adding the Max Day cost in Column A to the Max Hour cost in Column B.
Table 6-16: Total Peaking Component Calculation
Max Day Max Hour Peaking
Table 6-2 Table 6-2
A B C
$327,438 $158,401 $485,839
Table 6-17 shows the derivation of the Peaking Rate in column H by each customer class. Column A shows the projected FY 2017 usage from Table 6-10. Columns B and C show average monthly usage and peak monthly usage from RFC’s analysis of the City’s usage patterns, found in the appendix. Column D shows the peaking factor for each customer class, which is obtained by dividing the peak monthly usage in Column C by the average monthly usage in Column B. RFC used the coincidental peak month, which is defined as the month with the most usage across all classes. Column E shows the weighted peaking factor, which is a unitless column, but provides an estimate of how much each class contributes to peaking demands on the system by calculating the percentage of peak value in column F - found by determining each class’s percentage of the weighted peaking factor. The peaking rates in Column G were allocated by multiplying the total peaking cost in Table 6-16 by the percentages in Column F. SFR and Lifeline peaking rates are further derived in Table 6-18.
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Table 6-17: Peaking Rate Derivation
Line Customer Classes FY 2017
Usage
Average
Month Use
Peak
Month Use
Peaking
Factor
Weighted
Peak Usage % of Peak Allocated Peak Costs
Peaking
Unit Rate
($ / HCF)
Source Table 6-10 Table 6-16
A B = A ÷ 12 C D E = C × D F = E ÷ E6 G H = G ÷ C
1 Lifeline and SFR 530,976 44,248 80,197 1.81 962,366 70% $339,119 Tiered 2 MFR & Mobile 75,455 6,288 8,720 1.39 104,642 8% $36,874 $0.49 3 Commercial and Industrial 126,011 10,501 15,768 1.50 189,216 14% $66,676 $0.53 4 Commercial Irr. and Govt. 33,727 2,811 5,659 2.01 67,911 5% $23,931 $0.71 5 School 22,091 1,841 4,550 2.47 54,598 4% $19,239 $0.87 6 Total) 788,259 1,378,734 100% $485,839
Table 6-18 shows the derivation of the unit peaking costs for single family and lifeline tiers. Column A shows the annual usage that occurs in each tier, while Column B shows the peaking factor for each tier.
The peaking factors for each tier were calculated in a separate analysis and are available in the Appendix.
The weighted peaking factor in Column C is determined by multiplying the usage in Column A by the peaking factor in Column B. Column C shows the weighted peaking factor, which is a unitless number. The percentage of peak value in Column D is found by determining each tier’s percentage of the weighted peaking factor. The costs that were allocated to tiers in Table 6-17 (in G1) are then allocated to each tier using the percentages in Column D. The unit rate in Column F is derived by dividing the allocated peak costs in Column E by the usage in Column A.
Table 6-18: Peaking Rate Derivation
Line Residential Tier
(Lifeline & SFR)
FY 2017
Usage
Peaking
Factor
Weighted
Peak Usage % of Peak Allocated Peak Costs
Unit Rate
($ / HCF)
Source Table 6-10 Table 6-16
(A) (B) C = A × B D = C ÷ C5 (E) F = E ÷ C
1 Total SFR and Lifeline 530,976 1.81 962,366 100% $339,119 2 Tier 1 260,223 1.15 298,297 31% $105,114 $0.40
3 Tier 2 157,721 1.93 304,642 32% $107,350 $0.68
4 Tier 3 113,031 3.18 359,428 37% $126,655 $1.12
5 Total 530,976 962,366 100% $339,119
Conservation Unit Cost
Table 6-19 shows the derivation of the conservation unit costs. The conservation costs for the single family class is calculated by taking the conservation costs derived in the cost of service analysis, shown in Column I of Table 6-2, and allocating these costs to each tier and class in proportion to use in column B. This results in that amount shown in C5 for SFR and Lifeline. The amount in C5 is then allocated to the tiers using the allocation factors, shown in Column D, to allocate the total conservation costs to Tier 3. Tier 3 containing the highest volume users, has a 100% allocation factor, signifying that all conservation costs go to Tier 3, to recognize the fact that conservation and efficiency programs are targeted at these users who create the need, and therefore generate the costs, for these programs. The conservation rate is derived by dividing the conservation costs in Column E by the use in Column A and is shown in Column F.
The conservation rate for the remaining user classes is calculated by dividing their allocated conservation costs (column C) by the use (column A ) to yield the conservation rate in Column F. We note that the total conservation costs shown in Column C matches with that derived in Column I of Table 6-2. 172
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Table 6-19: Derivation of Conservation Unit Costs
Line Customer Class FY 2017
Annual Usage (HCF)
Percent of
Usage
Allocated Cons.
Costs
%
Responsibility
Reallocated
Cons. Cost
Unit Rate
($ /HCF)
Table 6-9 & Table 6-10 Table 6-2
(A) B = A ÷ A11 (C) (D) E = C × D F = D ÷ A
1 SFR and Lifeline
2 Tier 1 260,223 33% $6,612 0% $0 $0.00
3 Tier 2 157,721 20% $4,008 0% $0 $0.00
4 Tier 3 113,031 14% $2,872 100% $13,492 $0.12
5 530,976 $13,492 100% $13,492
6 7 MFR & Mobile 75,455 10% $1,917 $1,917 $0.03
8 Commercial and Industrial 126,011 16% $3,202 $3,202 $0.03 9 Commercial Irr. & Govt. 33,727 4% $857 $857 $0.03
10 School 22,091 3% $561 $561 $0.03
11 Total 788,259 100% $20,030 $20,030
Lifeline Discount
The City has historically offered a discounted first tier rate for low income customers called a Lifeline rate.
This discount is available due to a transfer from the General Fund, which is shown in Column H of Table 6-2. The City has decided to allocate all of this transfer to the first tier of Lifeline usage only. As a result, the discount in Column F is calculated by dividing the general fund transfer in its entirety by the Tier 1 Lifeline usage.
Table 6-20: Derivation of Lifeline Discount
Line Lifeline
Reduction
FY 2017
Annual Usage
(HCF)
Allocate General
Fund Transfer
Discounted
Usage
Percentage of
Lifeline
Total
Allocation
Discount
($ / HCF)
Source Table 6-8 Table 6-2
A B C D E F = E ÷ C
1 Lifeline Tier 1 28,178 Yes 28,178 100% ($11,000) ($0.39) 2 Lifeline Tier 2 14,582 No 0 0% $0 $0.00
3 Lifeline Tier 3 9,413 No 0 0% $0 $0.00
4 Total 52,172 28,178 ($11,000)
Pass-Through Component
The final rate component is the pass-through component. Its calculation is discussed in Section 3.4 and therefore will not be discussed here, but Table 6-21 shows a quick recap of the calculation.
Table 6-21: Derivation of Pass-Through Component
Line Pass-Through
Total
Total Water
Usage (HCF)
Passed-through
$ / HCF
Pass-Through
Total
1 Total Pass-through $4,631 788,259 $0.01 $4,631
Final Rate Derivation
RFC calculated the unit rates for supply, delivery, peaking, conservation, Lifeline discounts, and the passthrough component for single family tiers and for each class in Table 6-11 through Table 6-21. Table 6-22 173
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shows the final Commodity rate derivation by summing each unit cost to derive the total rate for each tier and class, as shown in Column G.
Table 6-22: Derivation of Rates by Tier and Class
Line Customer Classes Supply ($ /
hcf)
Delivery
Component
Peaking
Component
Lifeline
Component
Pass-through
Component
Conservation
Component
Total Rate
($/ HCF)
Table 6-12 &
Table 6-14 Table 6-15 Table 6-16Table 6-18 Table 6-20 Table 6-21 Table 6-19 A B C D E F G = A+B+C+D+E+F
1 Lifeline Tier 1 $0.42 $1.09 $0.40 ($0.39) $0.01 $0.00 $1.53 2 Lifeline Tier 2 $0.42 $1.09 $0.68 $0.00 $0.01 $0.00 $2.20 3 Lifeline Tier 3 $0.42 $1.09 $1.12 $0.00 $0.01 $0.12 $2.76 4 Residential Tier 1 $0.42 $1.09 $0.40 $0.01 $0.00 $1.92 5 Residential Tier 2 $0.42 $1.09 $0.68 $0.01 $0.00 $2.20 6 Residential Tier 3 $0.42 $1.09 $1.12 $0.01 $0.12 $2.76 7 MFR & Mobile $0.42 $1.09 $0.49 $0.01 $0.03 $2.03
8 Comm. & Industrial $0.42 $1.09 $0.53 $0.01 $0.03 $2.07 9 Comm. Irr. & Govt. $0.42 $1.09 $0.71 $0.01 $0.03 $2.26 10 School $0.42 $1.09 $0.87 $0.01 $0.03 $2.42
The next three tables show the proposed commodity rates, fixed charges, and fire charges through FY 2021, escalated according to the proposed Financial Plan in Table 1-1. The values shown in the FY 2017 column of Table 6-23 are from column G of Table 6-22.
Table 6-23: Commodity Charges through FY 2021
Revenue Adjustment 30% 15% 10% 0% 0%
Month Effective October March March March March
Customer Classes FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Lifeline Tier 1 $1.53 $1.76 $1.94 $1.94 $1.94
Lifeline Tier 2 $2.20 $2.53 $2.79 $2.79 $2.79
Lifeline Tier 3 $2.76 $3.18 $3.50 $3.50 $3.50
Residential Tier 1 $1.92 $2.21 $2.44 $2.44 $2.44
Residential Tier 2 $2.20 $2.53 $2.79 $2.79 $2.79
Residential Tier 3 $2.76 $3.18 $3.50 $3.50 $3.50
MFR & Mobile $2.03 $2.34 $2.58 $2.58 $2.58
Commercial and Industrial $2.07 $2.39 $2.63 $2.63 $2.63 Commercial Irr. and Govt. $2.26 $2.60 $2.86 $2.86 $2.86 School $2.42 $2.79 $3.07 $3.07 $3.07
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Table 6-24: Fixed Charges through FY 2021
Meter Size FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Table 6-7
5/8" $24.56 $28.25 $31.08 $31.08 $31.08
1" $55.68 $64.04 $70.45 $70.45 $70.45
1.5" $107.55 $123.69 $136.06 $136.06 $136.06
2" $169.79 $195.26 $214.79 $214.79 $214.79
3" $315.03 $362.29 $398.52 $398.52 $398.52
4" $522.50 $600.88 $660.97 $660.97 $660.97
6" $1,041.20 $1,197.38 $1,317.12 $1,317.12 $1,317.12
8" $1,663.64 $1,913.19 $2,104.51 $2,104.51 $2,104.51
10" $3,012.24 $3,464.08 $3,810.49 $3,810.49 $3,810.49
12" $4,464.59 $5,134.28 $5,647.71 $5,647.71 $5,647.71
Table 6-25: Fire Meter Charges through FY 2021
Meter Size FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
2" $5.53 $6.36 $6.99 $6.99 $6.99
3" $16.06 $18.47 $20.32 $20.32 $20.32
4" $34.22 $39.36 $43.29 $43.29 $43.29
6" $99.42 $114.33 $125.76 $125.76 $125.76
8" $211.86 $243.64 $268.00 $268.00 $268.00
10" $381.00 $438.14 $481.96 $481.96 $481.96
12" $615.41 $707.72 $778.50 $778.50 $778.50
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7 BILL IMPACTS
7.1 CUSTOMER BILL IMPACTS
Single Family Bill Impacts
Figure 7-1 shows the single family bill impacts for various use points. The graph shows two sets of bars at different usage points. The blue bars represent the bill assuming the existing rate structure is unchanged yet rates are increased by the current adopted adjustments. The purple bars show the proposed rates that result with the proposed Financial Plan and proposed rate structure. This color scheme remains unchanged for the graphs in this section.
Figure 7-1: Single Family Customer Bill Impacts
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Lifeline Bill Impacts
Figure 7-2 shows Lifeline bill impacts. This class has a discounted tier 1commodity rate relative to SFR customers, but pays the same rate for all usage above tier 1.
Figure 7-2: Multi-family Customer Bill Impacts (5/8” Meter) Class by Class Bill Impacts
Figures 7-3 through 7-8 show the percentage of accounts that will realize the bill impact shown at the bottom of the figure. For example, Figure 7-3 shows that 40% of SFR customers will see a 5$ to $10 increase in their bill. The left axis shows number of bills for each dollar impact bin along with the percentage of customers on top of the blue bar.
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Figure 7-3: SFR Class Impacts
Figure 7-4: Lifeline Class Impacts
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Figure 7-5: MFR Class Impacts
Figure 7-6: Commercial and Industrial Class Impacts
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Figure 7-7: Commercial Irrigation and Government Class Impacts Figure 7-8: School Class Impacts
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8 DROUGHT RATES
8.1 DROUGHT RATE BACKGROUND
As of late June, 2016, the City was experiencing a level 3 drought, defined as a 30% reduction in water use17. City Staff informed RFC that during drought conditions, the City often has to purchase water from additional sources compared to the plan outlined in Table 3-11. RFC’s worked with City Staff to develop Drought Rates and to determine how a drought would likely affect water supply availability and purchase costs during different stages of drought. The drought rates below are based on the increased costs to the City in the event of necessary water purchases from additional sources of supply – which would likely be the McConnell Foundation
The City’s “new normal” level of water use is expected to be around 1,810 AF for FY 2017 which is equal to the current Stage 3 drought.
Water Use in each Drought Stage
There are several different stages of drought. RFC estimated the water use cutback needed in Residential (SFR and Lifeline) Tiers 2 and 3 in order to yield the reduction desired in a stage 4 and 5 drought. These percentages are shown in Column B and C. For example, a 21% reduction in Residential Tiers 2 and 3 and no reduction in Tier 1, along with a 12% in non-SFR classes would yield the desired 12% reduction in use during a stage 4 drought as is shown in Column C. Column C also shows the cutbacks relative to drought stage 3. Column D shows the estimated demand in these stages, which is the result of multiplying the percentages in Column C by the “New Normal”18 value of 1810 AF. The values in Column E show the supply amount needed in order to account for 7.5% water loss.
17 As of July 5, the City is in a Stage 1 drought, which calls for a 10% reduction in use. 18 Provided by City Staff.
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Table 8-1: Drought Use Cutback Goals by Drought Level
Drought
Stage
Drought
Stage
Reduction Needed
in SFR Tiers 2, 3
% Reduction Relative to Stage
3 for Non-SFR (1815 AF)
Total Customer
Demand (Sales -
AF)
Total Supply Needed
(Inc. Water Loss)
[AF]
(A) (B) (C) (D) (E)
1 10% 0% No Reduction 2,324 2,499
2 20% 0% No Reduction 2,066 2,221
3 30% 0% No Reduction 1,810 1,946
4 40% 21.% 12%% 1,602 1,723
5 50% 30.% 18%% 1,488 1,600
The drought charges are designed to recover the cost of McConnell Foundation water purchases. The price of McConnell Foundation water is projected to be $400 per AF, which is notably higher than the rate of other supply sources. The drought rates for stages 1 through 3 are designed to recover the additional cost of purchasing McConnell water should CVP reduce the amount of water available.
RFC worked with City Staff to estimate supply sources at different drought levels. These are shown in Table 8-2. Note that the column lettering in this table continues from Table 8-1 into Table 8-2.
Table 8-2: Sources of Supply by Drought Level
Drought
Stage
Total Supply Needed
(Inc. Water Loss) [AF]
McConnell Purchases
(AF)
Shasta County Water
Agency Supply (AF) ACID Supply (AF) CVP Supply (AF)
(E) (F) (G) (H) I = E - F - G- H
1 2,499 138 50 - 2,310
2 2,221 277 40 - 1,905
3 1,946 415 30 - 1,501
4 1,723 553 12 140 1,018
5 1,600 430 12 140 1,018
Table 8-3 shows the calculation of the drought revenue requirement at different stages of drought. The revenue requirement from the first three stages is simply the additional revenue required to meet the cost of McConnell Foundation water purchases. The revenue requirement for the next two drought stages is in Table 8-7 and 8-8. The rates for stages 4 and 5 also recover the loss of revenue due to reduced sales as well. Column J shows McConnell Foundation water purchase costs per AF, Column K shows CVP costs per AF. During stage 1 through 3 droughts, we assumed that the Bureau of Reclamation would limit CVP water and the City would therefore purchase McConnell Foundation water to meet demand. Column L shows the difference between the costs of these two water sources (Column J and K). Column M shows the drought revenue requirement for recovering McConnell water purchase costs, obtained by multiplying Column L of Table 8-3 by the value in Column F of Table 8-2. Finally, the revenue requirement as a percentage of proposed variable revenue is calculated by dividing the values found in Column M by the total projected variable revenue of the proposed rates, found in Appendix D. 182
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Table 8-3: Calculation of Revenue Requirement
Drought
Stage
McConnell Cost
($/AF)
CVP Cost
($/AF) Difference Drought Rate Revenue Requirement
Revenue Requirement as %
of Variable Revenue
(J) (K) L = J-K M = F x L (N)
1 $400.00 $120.88 $279.12 $38,589 2.3%
2 $400.00 $120.88 $279.12 $77,177 4.6%
3 $400.00 $120.88 $279.12 $115,766 6.8%
4 $400.00 $120.88 $279.12 $154,354
5 $400.00 $120.88 $279.12 $120,022
8.2 DROUGHT CALCULATION
The rates for the first three stages of drought are calculated by multiplying the non-drought proposed rates (Column A) by the values found in Column N of Table 8-3. These three next tables all share the same basic structure. Table 8-4 Column A shows the proposed rates derived in Section 6. Column B shows projected usage in FY 2017. Column C shows projected commodity revenue in FY 2017. Column D shows the rate for the relative stage of drought, which is found by increasing the non-drought rates (column A) by in the percentages shown in Column N of Table 8-3 Column E shows the revenue recovered by those rates. Table 8-5 and Table 8-6 follow the same format.
Table 8-4: Calculation of Stage 1 Drought Rates
Class
Non-Drought
Proposed Rate
($/ hcf)
No Reduction
Use (cf)
Non Drought
Revenue
Stage 1 Rates
($ / hcf)
Stage 1
Recovery
(A) (B) (C) (D) (E)
Tier 1 (Lifeline) $1.53 2,817,766 $43,112 $1.56 $44,095 Tier 1 (SFR) $1.92 23,204,573 $445,528 $1.96 $455,693
Tier 2 $2.20 15,772,088 $346,986 $2.25 $354,903
Tier 3 $2.76 11,303,134 $311,966 $2.82 $319,084
MFR & Mobile $2.03 7,545,483 $153,173 $2.08 $156,668
Commercial and Industrial $2.07 12,601,080 $260,842 $2.12 $266,794 Commercial Irr. & Govt. $2.26 3,372,674 $76,222 $2.31 $77,962 School $2.42 2,209,118 $53,461 $2.48 $54,680
Total $1,691,291 $1,729,879
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Table 8-5: Calculation of Stage 2 Drought Rates
Class
Non-Drought
Proposed Rate
($/ hcf)
No Reduction
Use (cf)
Non Drought
Revenue
Stage 2 Rates ($
/ hcf)
Stage 2
Recovery
(A) (B) (C) (D) (E)
Tier 1 (Lifeline) $1.53 2,817,766 $43,112 $1.60 $45,079 Tier 1 (SFR) $1.92 23,204,573 $445,528 $2.01 $465,858
Tier 2 $2.20 15,772,088 $346,986 $2.30 $362,820
Tier 3 $2.76 11,303,134 $311,966 $2.89 $326,202
MFR & Mobile $2.03 7,545,483 $153,173 $2.12 $160,163
Commercial and Industrial $2.07 12,601,080 $260,842 $2.16 $272,745 Commercial Irr. & Govt. $2.26 3,372,674 $76,222 $2.36 $79,701 School $2.42 2,209,118 $53,461 $2.53 $55,900
Total $1,691,291 $1,768,468
Table 8-6: Calculation of Stage 3 Drought Rates
Class
Non-Drought
Proposed Rate
($/ hcf)
Non Drought
Use (cf)
Non Drought
Revenue
Stage 3 Rates ($
/ hcf)
Stage 3
Recovery
(A) (B) (C) (D) (E)
Tier 1 (Lifeline) $1.53 2,817,766 $43,112 $1.63 $46,063 Tier 1 (SFR) $1.92 23,204,573 $445,528 $2.05 $476,023
Tier 2 $2.20 15,772,088 $346,986 $2.35 $370,736
Tier 3 $2.76 11,303,134 $311,966 $2.95 $333,320
MFR & Mobile $2.03 7,545,483 $153,173 $2.17 $163,658
Commercial and Industrial $2.07 12,601,080 $260,842 $2.21 $278,697 Commercial Irr. & Govt. $2.26 3,372,674 $76,222 $2.41 $81,440 School $2.42 2,209,118 $53,461 $2.59 $57,120
Total $1,691,291 $1,807,056
The drought rates for drought stages 4 and 5 include the recovery of lost revenue due to reduced sales.
Therefore we must estimate the cutback in use from each user class. RFC modelled the cutback in use by using City customer use data for FY 2015 and establishing a minimum use level to provide for basic health and sanitation needs. This minimum use level represents essential indoor water use. The remaining use is considered discretionary and is the target of the cutback goals in Table 8-1 Column B.
Table 8-7 shows the Stage 4 drought rate calculation. Tier 1 usages are left unchanged. RFC assumed that Tier 2 and tier 3 usage was reduced by the percentage shown in Stage 4 in Table 8-1 - column B. We assumed the remaining customer classes reduced their usage by the percentage shown in Table 8-1 Column C. Column B in Table 8-7 shows the revenues with the assumed usage reductions and the 184
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proposed FY 2017 non-drought rates. The total in cell B10 shows the result of summing these revenues.
The Lost Revenue Line shows the reduction in revenue expected from the cutbacks shown in Line 10 (compared to the totals in Table 8-4, Table 8-5, and Table 8-6 Column C). We also need to recover the increased cost of McConnell Foundation water, found in Table 8-3 Column M. Adding these costs to the lost revenue, yields the total additional revenue to be recovered – shown in B12. The necessary percentage drought rate increase, in B14, is found by dividing the total in B12 by the total projected revenue in B10. The non-drought rates are then escalated by this percentage, resulting in the drought rates in Column C. Column D shows the expected amount of revenue to be recovered during a stage 4 drought. The drought rates for Stage 5 are derived in the exact same manner. 185
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Table 8-7: Stage 4 Rate Calculation
Class Drought Stage 4
Reduction in CF
Revenues With
Reduction
Drought Rates
($ / hcf)
Drought Rate
Recovery
Line (A) (B) (C) (D)
1 Tier 1 (Lifeline) 2,817,766 $43,112 $1.90 $53,644
2 Tier 1 (SFR) 23,204,573 $445,528 $2.39 $554,366
3 Tier 2 14,175,210 $311,855 $2.74 $388,037
4 Tier 3 7,295,440 $201,354 $3.43 $250,543
5 MFR & Mobile 6,681,502 $135,634 $2.53 $168,769
6 Commercial and Industrial 11,158,218 $230,975 $2.58 $287,400 7 Commercial Irrigation and Govt. 2,986,492 $67,495 $2.81 $83,983 8 School 1,956,167 $47,339 $3.01 $58,904
9 10 Total 70,275,369 $1,483,292 $1,845,645
11 Lost Revenue $207,999
12 Plus Increased McConnell Costs $362,353
13 14 Percentage Increase 24%
Table 8-8 shows the calculations for Stage 5 drought. These follow the same methodology as Table 8-7.
Table 8-8: Stage 5 Rate Calculation
Class Drought Stage 5
Reduction in CF
Revenues With
Reduction
Drought Rates
($ / hcf)
Drought Rate
Recovery
Line (A) (B) (C) (D)
1 Tier 1 (Lifeline) 2,817,766 $43,112 $2.00 $56,380
2 Tier 1 (SFR) 23,204,573 $445,528 $2.51 $582,645
3 Tier 2 13,304,928 $292,708 $2.88 $382,793
4 Tier 3 5,674,802 $156,625 $3.61 $204,828
5 MFR & Mobile 6,204,529 $125,952 $2.65 $164,715
6 Commercial and Industrial 10,361,665 $214,486 $2.71 $280,497 7 Commercial Irrigation and Govt. 2,773,295 $62,676 $2.96 $81,966 8 School 1,816,522 $43,960 $3.16 $57,489
9 10 Total 58,666,756 $1,385,047 $1,811,313
11 Lost Revenue $306,243
12 Plus Increased McConnell Costs $426,266
13 14 Percentage Increase 31%
Table 8-9 shows a summary of the drought rates at different levels of drought, and the surcharge for each HCF of water at that level, which is the difference between the drought rate and the base COS rate. 186
Water Rate Study Report | 55
Table 8-9: Drought Rates and Surcharge Totals
Line Drought Rate Summary No Drought Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 1 Tier 1 (Lifeline) $1.53 $1.56 $1.60 $1.63 $1.90 $2.00 2 Tier 1 (SFR) $1.92 $1.96 $2.01 $2.05 $2.39 $2.51
3 Tier 2 $2.20 $2.25 $2.30 $2.35 $2.74 $2.88
4 Tier 3 $2.76 $2.82 $2.89 $2.95 $3.43 $3.61
5 MFR & Mobile $2.03 $2.08 $2.12 $2.17 $2.53 $2.65
6 Comm. & Industrial $2.07 $2.12 $2.16 $2.21 $2.58 $2.71 7 Commercial Irr. and Govt. $2.26 $2.31 $2.36 $2.41 $2.81 $2.96 8 School $2.42 $2.48 $2.53 $2.59 $3.01 $3.16
9 10 Surcharge
11 Tier 1 (Lifeline) $0.03 $0.07 $0.10 $0.37 $0.47
12 Tier 1 (SFR) $0.04 $0.09 $0.13 $0.47 $0.59
13 Tier 2 $0.05 $0.10 $0.15 $0.54 $0.68
14 Tier 3 $0.06 $0.13 $0.19 $0.67 $0.85
15 MFR & Mobile $0.05 $0.09 $0.14 $0.50 $0.62
16 Comm. and Industrial $0.05 $0.09 $0.14 $0.51 $0.64
187
56 | City of Shasta Lake
9 APPENDIX A: WATER CONSUMPTION DETAIL
Usage Data by Tier (CF) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Lifeline
Tier 1 0 - 1,000 1000 2,633,993 3,208,022 3,295,514 3,383,005 3,470,497 Tier 2 1001 - 5000 5000 1,349,979 1,867,235 1,918,160 1,969,084 2,020,009 Tier 3 > 5,000 59,377 141,967 145,839 149,711 153,583
Subtotal Lifeline 4,043,349 5,217,225 5,359,512 5,501,800 5,644,088
SFR & CSF
Tier 1 0 - 1,000 1000 22,014,762 26,804,188 27,535,212 28,266,235 28,997,258 Tier 2 1001 - 5000 5000 13,931,599 19,125,509 19,647,114 20,168,719 20,690,324 Tier 3 1,160,900 1,950,639 2,003,838 2,057,037 2,110,237 Subtotal SFR & CSF 37,107,261 47,880,336 49,186,164 50,491,991 51,797,818 MFR & Mobile
Tier 1 0 - 1,000 1000 1,175,154 1,516,328 1,557,682 1,599,037 1,640,391 Tier 2 1001 - 5000 5000 4,608,303 5,946,197 6,108,366 6,270,535 6,432,704 Tier 3 64,292 82,958 85,220 87,483 89,745
Subtotal MFR & Mobile 5,847,749 7,545,483 7,751,269 7,957,055 8,162,841 (5/8" Meters get charged an excessive consumption rate) Commercial & Industrial
Tier 1 0 - 1,000 1000 802,771 1,035,834 1,064,084 1,092,334 1,120,584 Tier 2 1001 - 5000 5000 8,845,568 11,413,636 11,724,917 12,036,198 12,347,479 Tier 3 117,498 151,610 155,745 159,879 164,014
Subtotal Commercial & Industrial 9,765,837 12,601,080 12,944,746 13,288,411 13,632,077 Commercial Irrigation
Tier 1 0 - 1,000 1000 159,008 205,172 210,768 216,363 221,959 Tier 2 1001 - 5000 5000 1,722,289 2,222,308 2,282,916 2,343,525 2,404,133 Tier 3 27,814 35,889 36,867 37,846 38,825
Subtotal Commercial Irrigation 1,909,111 2,463,369 2,530,551 2,597,734 2,664,917 School
Tier 1 0 - 1,000 1000 73,757 95,171 97,766 100,362 102,958 Tier 2 1001 - 5000 5000 1,634,333 2,108,817 2,166,330 2,223,843 2,281,356 Tier 3 3,976 5,130 5,270 5,410 5,550
Tier 4 1,712,066 2,209,118 2,269,367 2,329,615 2,389,864 Government
Tier 1 0 - 1,000 1000 43,209 55,754 57,274 58,795 60,315 Tier 2 1001 - 5000 5000 661,502 853,552 876,830 900,109 923,388 Tier 3 0 0 0 0 0
Subtotal Government 704,711 909,305 934,104 958,904 983,703 188
Water Rate Study Report | 57
Private Fire Line
Tier 1 0 - 1,000 0 0 0 0 0
Tier 2 1001 - 5000 0 0 0 0 0
Tier 3 0 0 0 0 0 0
Subtotal Private Fire Line 0 0 0 0 0
TOTAL USAGE (CF) 61,090,084 78,825,915 80,975,713 83,125,510 85,275,308 TOTAL USAGE (HCF) 610,901 788,259 809,757 831,255 852,753 TOTAL USAGE (AF) 1,402 1,810 1,859 1,908 1,958
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58 | City of Shasta Lake
10 APPENDIX B: PROJECTED FY 2017 USAGE BY TIER AND CLASS SFR Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Tier 1 1,664,156 1,748,839 1,752,701 1,843,189 1,985,235 2,091,707 2,196,620 2,192,762 2,185,604 2,020,081 1,807,412 1,716,266 Tier 2 454,287 534,000 594,489 814,535 1,177,844 1,651,867 2,273,271 2,189,857 2,059,637 1,368,656 676,952 518,512 Tier 3 139,657 170,516 166,350 252,301 477,474 1,237,880 2,738,193 2,179,647 1,868,938 742,999 197,646 190,255 Total 2,258,101 2,453,355 2,513,540 2,910,026 3,640,553 4,981,454 7,208,084 6,562,266 6,114,179 4,131,736 2,682,010 2,425,033 Lifeline Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Tier 1 196,931 204,754 204,073 213,513 229,476 248,077 289,184 289,666 283,363 248,497 213,296 196,935 Tier 2 48,838 55,412 55,592 66,085 95,450 150,345 265,411 254,518 218,542 129,672 66,906 51,408 Tier 3 13,527 39,806 22,225 11,445 21,356 91,510 257,041 201,497 176,650 51,151 21,876 33,195 Total 259,296 299,972 281,891 291,043 346,282 489,932 811,636 745,681 678,555 429,320 302,078 281,538 Class Groupings Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Commercial and Industrial 752,871 795,726 746,771 998,411 986,930 1,291,180 1,576,797 1,612,986 1,311,967 993,508 564,182 969,751 Commercial Irrigation and
Government 176,994 78,774 149,890 111,604 394,855 465,413 565,928 431,674 514,028 293,891 95,976 93,645 School 18,069 33,774 38,220 53,567 161,313 206,655 454,983 456,862 385,583 302,526 72,592 24,974 190
Water Rate Study Report | 59
11 APPENDIX C: FY 2017 PROJECTED USAGE ANALYSIS TIER AND CLASS
SFR Total
Absolute
Max
Coincidental
Max Average Peak Calc
Tier 1 23,204,573 2,196,620 2,196,620 1,933,714 1.14
Tier 2 14,313,908 2,273,271 2,273,271 1,192,826 1.91
Tier 3 10,361,855 2,738,193 2,738,193 863,488 3.17
Total 47,880,336 7,208,084 7,208,084 3,990,028 1.81
Lifeline Total
Absolute
Max
Coincidental
Max Average Peak Calc
Tier 1 2,817,766 289,666 289,184 234,814 1.23
Tier 2 1,458,180 265,411 265,411 121,515 2.18
Tier 3 941,279 257,041 257,041 78,440 3.28
Total 5,217,225 811,636 811,636 434,769 1.87
Class Groupings Total
Absolute
Max
Coincidental
Max Average Peak Calc
Commercial and Industrial 12,601,080 1,612,986 1,576,797 1,050,090 1.54 Commercial Irrigation and
Government 3,372,674 565,928 565,928 281,056 2.01
School 2,209,118 456,862 454,983 184,093 2.48
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60 | City of Shasta Lake
12 APPENDIX D: REVENUE PROOF OF VARIABLE RATES
Customer Class
Proposed
Rate
($/ hcf) Usage (cf) Usage (hcf)
Revenue
From
Proposed
Rates
Lifeline Tier 1 $1.53 2,817,766 28,178 $43,112
Lifeline Tier 2 $2.20 1,458,180 14,582 $32,080
Lifeline Tier 3 $2.76 941,279 9,413 $25,979
Residential Tier 1 $1.92 23,204,573 232,046 $445,528
Residential Tier 2 $2.20 14,313,908 143,139 $314,906
Residential Tier 3 $2.76 10,361,855 103,619 $285,987
MFR & Mobile $2.03 7,545,483 75,455 $153,173
Commercial and Industrial $2.07 12,601,080 126,011 $260,842 Commercial Irrigation and Gov $2.26 3,372,674 33,727 $76,222 School $2.42 2,209,118 22,091 $53,461
Total 78,825,915 $1,691,291
COS Amount $1,684,647
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Letter to the residents of the City of Shasta Lake regarding the current Water Rate Study A personal opinion by Mayor Greg Watkins
Dear Resident, City Staff is currently completing a water rate study in which the only option proposed is to charge for water in three tiers. I have been opposed to tiered rates for a number of yearssince I voted for the tiers back in 2016. I wasincorrectly led to believe this currentstudy would include an option to set a uniform water use rate and to eliminate the tiered system.
Proposition 218, passed by California voters 26 years ago, mandates the cost of water not be more than it actually costs to provide the water! The 2016 Raftelis Water Study created a cost of service analysis to justify tiered water rates. I believe their results were flawed, especially in wet or normal water supply years.
An open letter lets me share critical information and not be in violation of the Brown Act. The Brown Act prohibits me from discussing my attached analysis of Why tiered water rates are not right for the City of Shasta Lake with other Council members prior to the Council Meeting on April 4th, 2023.
If you want to grow a vegetable garden this year, have a large household, use a swamp cooler, a pool, or maintain landscaping which must be watered in the summer, come to the Council Meeting on Tuesday, April 4th at 6pm and voice your opinion.
Regardless of how the Council votes, life line water subsidies for qualifying customers will continue. This past July, 45% of life line users paid for water in the 2nd or 3rd tier. If a flat rate is adopted, customers using the least water will see a slight cost increase in winter months.
Look at your water bill from last summer and determine how tiered rates impact your cost of water. If you are tired of being penalized for using water from Shasta Lake, so that Southern California homes can have green lawns, come and let your voice be heard when the Council sets your new water rates.
Redding and Anderson charge a flat rate for water. If we adopt a flat water rate, I still propose during droughts, our City create a drought surcharge so the biggest users pay for the actual increased cost of water.
Below is a link to my 3‐page detailed analysis of tiered rates and why they are not in your best interest.
Sincerely,
Greg Watkins, Mayor
Go to my web page gregwatkins.blogspot.com and read the supporting document.
Questions: email [email protected] or text 530‐339‐5036 Commented [JL3]: The City of Shasta Lake's watersupply
issues are completely different from Redding (senior water rights, groundwater) and Anderson (enormous aquifer).
Commented [JL2]: Clarification. This is a snapshot of only one month. Further attention and analysis should be given to the full water year.
Commented [JL1]: See memo from CityAttorney John
Kenny.
193
Why Tiered Water Rates are not right for City of Shasta Lake The personal opinion of Mayor Greg Watkins
In 2022, the City of Shasta Lake (CSL) contracted with PACE Engineering to update the last water study which was done in 2016 by a firm called Raftelis Financial Consultants. As you may be aware, the City currently has a three tiered water rate system which charges a higher price for water used above set thresholds. Unfortunately, the contract with PACE did not specify that new study evaluate a single rate water system. Rather, PACE was only asked to update the previous study with current costs, but not evaluate tiered water rates versus a single water rate.
Six years ago, when Raftelis was hired to conduct a Water Rate Study, their study was reported to be based on a cost of service principle. This study separated the various costs of providing domestic water into: treatment, transmission, distribution, storage, metering service, and supply. It referenced the American Water Works Association M1 Manual (AWWA M1 Manual). In summary the report stated: Tiered Water rates can be used to incentivize customers to conserve water…. Provided the tiered rates reflect the proportionate cost of providing the service.
RAFTELIS MISTAKE: The Raftelis study ignored the fact that a cubic foot of water, delivered on hot summer days, costs no more to deliver than on a winter day when water use is at its lowest. Raftelis simply stated that tiered water rates have gained wide spread use, especially in water-scarce regions such as Southern California.
Raftelis correctly states, “the cost of water rates and charges should be recovered from classes of customers in proportion to the cost of serving those customers.” Their study made an assumption when they wrote:
“…treatment costs are likely higher during summertime when demand is at its highest.” This statement is not true of the City of Shasta Lake’s water treatment system. The Raftelis study, using this unsubstantiated assumption, went on to conclude that the largest water users should be charged higher tiered rates.
HYPOTHETICAL EXAMPLE: Consider a hypothetical water system to demonstrate how tiered water rates would justify charging more for water on a high use day. This hypothetical domestic water system has two sources for water. The main source of water flows by gravity into the water system. It supplies 100% of the winter water needs, but only 75% of the needed water for summer use. The additional 25% of water on high use days is pumped from a deep underground aquafer. The cost of water from the two sources differs.
The main source, providing 75% of the water flow, is purchased at $100 per acre foot (AF). The cost for the remaining 25% of the water is $400 per AF due to pumping. The justification to charge those who use more water a higher rate is based on the increased cost of pumping. This rate would be set so that the 25% of the customers, using the greatest quantities, are charged the higher rate. The higher rate can only be charged during the months when water must be pumped from the aquafer.
CITY OF SHASTA LAKE DOMESTIC WATER SYSTEM: In unconstrained (i.e. wet) years, justification for a tiered cost of water cannot be made in the CSL. In wet years all water is purchased at approximately $100 per AF or less. The Bureau of Reclamation pumps the water to the City Treatment Plant using big electric pumps at the base of Shasta Dam. The cost of pumping water up to the City treatment plant is included in the price the City pays for the water. On low water use days, one large sand filter filtrates the water. On high demand days 3 sand filters are used. The cost per gallon to filtrate on low use days is “x” dollars per gallon. On high use days the cost is 3x dollars for 3 times the amount of water. Thus, the cost per gallon delivered on high use days remains the same as on low use days.
194
The same principal is true for the amount of chlorine used to disinfect the water. The amount of chlorine is primarily a function of the purity of the water delivered from Shasta Lake. The cost per gallon to chlorinate remains a fixed cost per gallon regardless of use.
In summary, the cost to deliver a gallon of water in the CSL domestic water system remains the same year round.
HIGH DEMAND USERS: The current water study correctly assigned higher costs to those customers requiring the city to install larger distribution piping by charging higher monthly charges based on the size of their meter necessary to provide for their demand. For example, a customer with a 5/8” meter in the CSL currently pays $31/month while a customer with a 4” meter pays $661/month and a 12” meter customer pays $5648/month.
Monthly meter fees are the way the City assigns higher demand cost equitably to various water customers.
Proposition 218 requires that the cost of the water delivered to any customer must be charged at the rate it actually costs to deliver the water to the customer. The City of Shasta Lake violates this requirement by using tiered rates in normal water years.
COST COMPONENTS IN THE STUDY: The various cost components of the water utility consist of: supply, treatment, transmission, distribution, storage, metering service, and customer billing.
SUPPLY In un-constrained years, the cost of supply, or purchasing the water historically remains at approximately $100/AF. Bureau water this year is estimated to cost $61/AF, ACID water has various fixed costs whether we take the water or not and if ACID can sell the water we don’t use to other water agencies. We also get minor amounts from Redding. The current PACE study properly uses $100 dollar/AF as the basis for calculating the current water rates.
TREATMENT As previously outlined, the cost per cubic foot of treating water remains constant whether or not the daily demand requires one or three big filters.
TRANSMISSION Larger pipes are needed to deliver water to customers using water at higher demand through larger diameter meters. Customers pay higher cost based on the size of their meters.
STORAGE The city water tanks are properly sized for the city. New housing developments will pay for additional needed storage. One big new storage tank planned near Centimudi is funded by a grant and thus is not a cost consideration in this water rate study.
DISTRIBUTION Some of the city’s distribution piping is old and undersized for current needs, including fire demand. Replacing old pipes and creating backup delivery piping to the Montana Ave.storage tanks are needed improvements for safety and reliability and are not a function of use.
METER SERVICE The city has self reporting water meters, and there is a fixed cost in replacing the batteries and updating the software to record the readings. This charge is applied on a per meter basis.
BILLING Billing remains a monthly set charge per customer.
DROUGHT YEAR WATER PURCHASES. In drought years the CSL historically purchases additional water at elevated rates and needs a method to cover the increased cost of water purchased. Per Proposition 218 requirements, the equitable method is to pay for the increased cost for supply with an automatic pass through charge. When the cost to purchase water is more than the $100/AF average the CSL will use the actual cost from sources such as McConnell and ACID to create a drought tier rate for those customers using increased amounts of water. This second tiered rate would be applied to those customers using larger amounts of water.
For example, if 20% of the yearly purchased water costs $400/AF, that incremental cost would be applied to the 195
20% of the customers using the most water. And it would only be applied during the portion of the year when the high cost water was purchased. In normal, or unconstrained water years there would be no drought tier.
BENEFICIAL USES MANDATED: The State of California sets other requirements with which the City must comply. For example, it is a requirement that water resources be put to beneficial uses …. and that conservation be exercised to the reasonable and beneficial use of the people.
To comply with these principles, the City has ordinances in drought years prohibiting wasteful uses of water, such as over watering to the point of runoff, washing vehicles with a hose with no shut off and washing off driveways with water pressure.
Watering a garden or fruit trees is considered to be a beneficial use, but could be restricted by an ordinance requiring drip systems or hand watering.
Customers with pools often consider their pool essential for their health and fitness. Drought year ordinances can prohibit emptying and refilling pools when water is in short supply and the City could mandate pool covers to reduce evaporation.
WATER LEAKS Customers experiencing an unfortunate water leak can soon find they are charged for water in the higher tiers. A flat rate would be better in those situations.
ANNUAL COST INCREASES: The City Council should take a hard look at the automatic increases the current water study recommends. These inflation factors are applied to both the monthly meter charges and to the cost of water per hundred cubic feet. The study started out recommending an 8% annual increase each year for the next five years but has reduced that recommended percentage to 6% annually. Thus, the current $31 per month meter charge will increase to about $41.50 per month after 5 years. If a 4% annual increase were applied it would result in a monthly charge of 37.75 after 5 years. The council has the authority to set the percentage increase at any percentage equal to or less than the 6% rate recommended in the study.
LIFE LINE RATES: The study recommends that our 290 life line users pay the same monthly service rates but pay less for their consumption as long as they do not go over the base amount of 1000 cubic feet. If a flat rate were used, their winter bill would increase about one dollar/month. The 30% paying rates in tier 2 would see no change while the bills for the 15% in tier 3 could be reduced by $25/month during the 4 hottest months.
I suggest the water life line amount of $5/month be applied to the monthly service fee and all consumption be paid at a flat rate
ALL WATER CUSTOMERS In August 2022 the City had 3284 water customers and 61% were in tier 2 while 34% of the customers were paying rates in tier 3.
2021 WATER RATES per Cubic Foot of 7.49 gallons. (Not including a drought surcharge of $0.09 to 0.013) Tier 1 = $0.0244 Tier 2 = $0.0279 and tier 3 = $0.0350 If a flat rate were to be used, all water would be charged at about $0.0275 per CF.
SCHOOLS AND PARKS The high school pays a flat rate of $0.0307/CF and the City charges itself $0.0286/CF to water the fields in Margaret Polf Park. Both of these rates exceed the actual cost of $0.0275 which violates the cost principle in Proposition 218.
196
KENNY & NORINE
ATTORNEYS
JOHN SULLIVAN KENNY
jONZ NORINE
A LAW CORPORATION
1 92 3 COURT STREET
REDDING, CA 96001
T: 530-244-7777
F: 530-246-2836
LEGAL ASSIST ANTS
TAMARA F. WARREN
MARAH S. WOODWARD
BARBARA A. MARCH
LINDA R. SCHAAP
MARGARET "PEGGY" A. BURTON*
*Also admitted in Nevada
TO:
FROM:
DATE:
RE:
www.lawnorcal.com
MEMORANDUM
Jessaca Lugo, City Manager, City of Shasta Lake
JohnS. Kenny, City Attorney 71:3 ~ March 30, 2023
Water Rates
A draft of the letter the Mayor plans to distribute addressing the water rate study has been reviewed. The letter contains a statement that the City has, for six years, charged rates that violate the provisions in Prop. 218 requiring the rates charged customers reflect the cost of service to the customer. The letter seems to conclude that only flat rates should be allowed and that tiered rates are improper. This conclusion is incorrect.
Tiered rates are permitted. The notion that tiered rates are improper comes from a Court decision (Capistrano Tax Payers Association v. City of Capistrano (2015) 235 CA4th 1493). In that case the tiered rates adopted by the City of Capistrano were not based on the cost of service.
In Shasta Lake the situation is different. In determining the cost of service, the City may . include the cost of purchasing, capturing, storing and delivering water as well as administrative and related costs. The City of Shasta Lake's rate study concluded that the high-end users were requiring a more expensive system than the low-end users needed.
Stated another way, without the tiered rate system, the low-end users would be paying for more of a water system than they require. The tiered system adjusts for that equity. With the tiers, the high-end customers pay the cost required by the larger system.
The water rates presently charged to customers and the proposed water rates include tiers that are based on the cost of delivering water to the customers of each tier. This is consistent with Prop. 218 and in conformity with court decisions considering tiered rates. 2497
4869-6488-4826, V. 1
197
Letter to the residents of the City of Shasta Lake regarding the current Water Rate Study A personal opinion by Councilwoman Pamelyn Morgan
Pace Engineering was hired by the City to update the 2016 Study done by Raftelis, rather than do a full tiered rate vs. single rate study. That type of study would have cost the city much more time and money to produce. Raftelis followed the City’s already established tiered rate system in 2016. So, updating the 2016 study made sense.
Back in 1980, when tiered rates were established by the City and other utility providers to address growing concerns of drought and issues with water supply, we all had experienced the great drought of 1976-1977.
Then the great rains of 1979-1980 came. That is why conservation was being considered. We never know what Mother Nature will throw at us. This is why the City decided to encourage conservation by continuing to use the tiered rate system. People who conserve water get creative so that they want water to water gardens and lawns.
Mr. Watkins says that our tiered rates violate Proposition 218 guidelines. Our staff report and our City Attorney’s letter show that he is incorrect. The City of Shasta Lake rates were established through a comprehensive study, analyzing Base-Extra Capacity Method, pursuant to Prop. 218 requirements. Our staff report states:
“The “Base-Extra Capacity Method” assumes the “Base” costs are those incurred while supplying water at a perfect load factor (i.e., at a continuous uniform rate) without costs incurred for providing extra infrastructure capacity to account for the increase in use beyond the uniform rate. Extra capacity costs for maximum day and maximum hour service are incurred in providing facilities to furnish water at varying rates above the average.”
“Peaking costs are further divided into maximum day demand (MDD) and maximum hour demand (MHD). The MDD is the maximum amount of water used in a single day in a year. The MHD is the maximum usage in an hour on the maximum usage day. Different infrastructure, such as distribution and storage facilities and the operating costs associated with these facilities are designed to meet the peaking demands of customers. Therefore, extra capacity costs include the operating and capital costs associated with meeting peak customer demand. This method is consistent with AWWA Manual M1 and is widely used in the water industry to perform a cost-of-service analysis.”
Mr. Watkins wants a flat rate of $2.75 per 100cf. This would mean that the Tier 1 users would pay $.31 more per 100cf, Tier 2 users would pay $.04 less per 100cf over 1000cf and Tier 3 users would pay $.75 less per 100cf over 2000cf. So, people who conserve will be paying more for using less.
As to the rate increase of 6%. The original increase brought to the Ad Hoc Committee was 8% per year. The inflation rate was budgeted in 2016 to be 4.5% from 2016-2021, but inflation was actually 7.5% per year for 2016-2021. If we only raise rates 4% vs 6%, we are below that inflation rate. It would also be difficult to budget completely for our capital improvements, maintenance and other infrastructure needs. But after discussion and presentation of FACTS by staff and Pace, the Ad Hoc Committee, Mr. Watkins and me, AGREED, that the city would be able to budget appropriately with a 6% increase in rates per year.
Regardless of how the Council votes, lifeline water subsidies for qualifying customers will continue.
This letter is written to express my opinion. Thank you for reading all sides to this issue. 198
Report and Recommendations 8
Reviewed and Approved
City Manager
AGENDA ITEM
City Council
TO: Mayor and City Council Members
FROM: Jessaca Lugo, City Manager
DATE: April 18, 2023
SUBJECT: Proposed Water Purchase – McConnell Foundation FILE NO.: W-100-095-050
RECOMMENDATION:
The City Manager recommends that the City Council:
Approve a resolution authorizing the City Manager to execute a contract between the City of Shasta Lake and the McConnell Foundation for the purchase of up to 350-acre feet of water at the cost of $53.25 per acre foot for the 2023 water year.
BACKGROUND:
The City of Shasta Lake received an update on March 28, 2023 that the Bureau of Reclamation (Bureau) will increase the Central Valley Project (CVP) 2023 water supply allocations.
Continued atmospheric river systems have since boosted hydrological conditions and storage volumes, allowing for a more robust water supply. These events have allowed the Bureau to increase their initial allocation from 75% to 100%. This is good news for all! With the recent 100% announcement, the City has two water allocation options for the 2023 water year:
• United States Bureau of Reclamation (current rate of $59.32 per acre-foot) • Anderson Cottonwood Irrigation District (ACID) (take or pay contract, rate of $168.00 per acre-foot, can only be used April through October)
Optional
• McConnell Foundation (current USBR rate/10% reduction) Estimated 2023 water year water demand = 2,100 acre feet Water purchase costs fluctuate year by year as water conditions improve or worsen. Reductions in water allocations in the 2022 water year produced water costs more than any time in history for our City. This water year will be significantly less. It is important to understand the City analyzes our water needs year by year, and in times of severe drought, the McConnell Foundation has provided a water resource that we would not have otherwise. 199
In the past, the City purchased water from the McConnell Foundation at 10% below USBR water rates. Because we are in a take or pay contract with ACID, the water would only be used during the months of November through February, therefore the City only anticipates needing 350 acrefeet of McConnell water.
The Council has the following alternatives to consider:
1. Authorize the purchase of 350/AF @ $53.25; or
2. Deny the purchase of 350/AF; or
3. Provide alternate direction to staff.
FISCAL IMPACTS:
The Water provided to CITY pursuant to this Agreement shall be billed at a wholesale rate of FiftyThree dollars and twenty-five cents ($53.25) per acre-foot, for a total payment of Eighteen Thousand Six Hundred Thirty-Seven Dollars and Fifty Cents ($18,673.50) The funds are budgeted for water purchase, no supplemental appropriation is required.
ATTACHMENTS:
Resolution CC-2023-XX
Purchase and Sale of Water Agreement
DISTRIBUTION:
City Council
City Attorney
Water Utility Specialist
200
RESOLUTION CC-2023-XX
________________________________________________________________________________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHASTA LAKE AUTHORIZING THE
CITY MANAGER TO EXECUTE A CONTRACT WITH THE MCCONNELL FOUNDATION TO PURCHASE UP TO 350 ACRE FEET OF WATER FOR $53.25 PER ACRE FOOT FOR THE 2023 WATER YEAR
WHEREAS, the City of Shasta Lake purchases water for delivery to its customers, and; WHEREAS, the McConnell Foundation has made water available to the City of Shasta Lake, and; WHEREAS, the City has sufficient water resources for the 2023 water year; and WHEREAS, the City offered the McConnell Foundation a price 10% below the 2023 USBR water rate; and
WHEREAS, the McConnell Foundation accepts the offered price and water schedule; and WHEREAS, it is requested that the City Council authorize the City Manager to execute a contract to purchase up to 350-acre feet of water for $53.25 per acre foot from The McConnell Foundation, and;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SHASTA LAKE, CALIFORNIA, THAT:
1. The City Council of the City of Shasta Lake hereby authorizes the City Manager to execute a contract with The McConnell Foundation to purchase up to 350-acre feet of water for $53.25 per acre foot for supplemental water supply.
2. This resolution shall be in force and effect from and after its final passage, and it is so resolved.
PASSED, APPROVED, AND ADOPTED this 18th day of April 2023, by the following vote:
AYES:
NOES:
ABSENT:
GREG WATKINS, Mayor
ATTEST:
TONI M. COATES, CMC
City Clerk
201
1 PURCHASE AND SALE OF WATER AGREEMENT
BETWEEN
THE CITY OF SHASTA LAKE
AND
THE MCCONNELL FOUNDATION
THIS AGREEMENT is made at Redding, California, by and between THE CITY OF SHASTA LAKE, a Municipal Corporation (“CITY”), whose address is 4477 Main Street, Shasta Lake, CA 96019 and THE MCCONNELL FOUNDATION (“FOUNDATION”), a California nonprofit corporation, whose address is 800 Shasta View Drive, Redding, CA 96003, for a Water Purchase and Sale Agreement (“Agreement”).
RECITALS
A. The FOUNDATION pursuant to its Contract No. 00-WC-20-1707 with the United States for Exchange of Water has the right, entitlement, and authorization to divert up to 5,100 acre-feet hereafter referred to as “Substitute Water” at existing Central Valley Project (“CVP”) facilities or other points of delivery approved by the Bureau of Reclamation (“RECLAMATION”);
B. Under the terms of the Contract, McConnell may designate the place of delivery of Substitute Water to any area that is within the permitted place of use for CVP water and temporarily assign its rights to receive Substitute Water to another party without such designation being deemed an assignment or transfer requiring approval by RECLAMATION;
C. The Contract provides that the Substitute Water shall be made available to the McConnell or its designee, without charge, at approved points of diversion; and D. McConnell desires to sell to the CITY and the CITY desires to purchase, the right to receive Three Hundred Fifty (350) acre-feet of Substitute Water, pursuant to the terms and conditions set forth below.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Term of Agreement: This Agreement shall be effective as of the date signed by the last party and its term shall continue thereafter through February 2024.
2. Delivery Point: The delivery point for the Water that is the subject of this Agreement shall be at existing CVP facilities located in Shasta County that serve the CITY. FOUNDATION does not warrant the condition or suitability of diversion works for CITY’s purposes, and it is not responsible for any repairs or the operation and maintenance of the diversion works. 202
2 3. Service Area. The Substitute Water purchased by CITY under this Agreement is intended to be used on lands located within the CITY. The CITY’s diversion and use of the Substitute Water is subject to the terms and conditions of Contract No. 00-WC-20-1707
4. Purchase and Sale of Water: FOUNDATION hereby agrees to sell to CITY and CITY hereby agrees to buy from FOUNDATION Three Hundred Fifty (350) acre-feet of water between May 1, 2023 and February 29, 2024, inclusive.
5. Payment for Water: The Water provided to CITY pursuant to this Agreement shall be billed at a wholesale rate of Fifty-Three dollars and twenty-five cents ($53.25) per acre-foot, for a total payment of Eighteen Thousand Six Hundred Thirty-Seven Dollars and Fifty Cents ($18,673.50). The FOUNDATION shall invoice the CITY the sum of Eighteen Thousand Six Hundred Thirty-Seven Dollars and Fifty Cents ($18,673.50). Payment from CITY to FOUNDATION will be made within thirty (30) days of receipt of invoice from FOUNDATION.
6. Scheduling and Delivery of Water: FOUNDATION shall notify RECLAMATION that the Substitute Water purchased by CITY shall be delivered to CITY at the CITY’s diversion point on the Shasta Lake, COSL Intake-001, pursuant to the Schedule attached hereto as Exhibit A. Any quantity of water not diverted City during the month in which it is scheduled shall be available to City during any subsequent month of the Water Year only upon rescheduling through a revised Water Delivery Schedule and subject to Reclamation’s approval at least seven (7) days prior to the end of the originally scheduled month. CITY accepts all risks and costs associated with any failure or delay in delivery, provided that FOUNDATION has notified RECLAMATION as provided herein.
7. Indemnification: Each party to this Agreement agrees to indemnify and hold the other party harmless, and to defend the other party for and against any and all third party losses, claims, damages, or liability arising out of, or relating to the subject of, this Agreement, to the extent caused, in whole or in part, by the willful misconduct, negligence, or other wrongdoing of the indemnifying party or any person employed by the indemnifying party for whom it is legally responsible.
8. Disputes: If any action is commenced to enforce any of the terms or conditions herein, or to enforce collection of monies due pursuant to this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees and costs.
9. Date of Agreement: The date of this agreement shall be the date it is signed by the second party to sign.
10. Interruption by RECLAMATION: CITY understands that the water made available under this Agreement is being delivered by RECLAMATION pursuant to the terms of FOUNDATION’s Contract. FOUNDATION shall not be liable to CITY for any interruption or reduction of water deliveries under this Agreement caused by 203
3 RECLAMATION not delivering water under FOUNDATION’s Contract. In the event RECLAMATION does not deliver water to CITY under this agreement for reasons unrelated to CITY’s actions or inactions, CITY shall not be required to pay for the undelivered quantity.
11. Notices: Any notices given under this Agreement shall be in writing and shall be served either personally or delivered by first class or express United States mail with postage prepaid, return receipt requested pursuant to registered or certified mail, or by a nationally recognized overnight commercial courier service with charges prepaid. Notices may also effectively be given by transmittal over electronic transmitting devices if the party to whom the notice is being sent has a receiving device in its office, and provided a complete copy of the notice shall also be served either personally or in the same manner as required for a mailed notice. Notices shall be deemed received at the earlier of actual receipt or three (3) days following deposit in the United States mail with postage prepaid or with a nationally recognized overnight commercial courier service with charges prepaid. Notices shall be directed to the following addresses:
To: FOUNDATION,
John Mancasola
The McConnell Foundation
800 Shasta View Drive
Redding, CA 96003-8208
With a copy to:
Jeffery J. Swanson
Swanson Law Office
2515 Park Marina Drive, Suite 102
Redding, CA 96001
To: CITY,
Jessaca Lugo, City Manager
City of Shasta Lake
4477 Main Street
Shasta Lake, CA 96019
Any party may change its address for notice purposes by giving notice to the others in accordance with this paragraph, provided that the address change shall not be effective until three (3) days after notice of the change.
12. Force Majeure: Neither party shall be liable for any loss, damage or penalty resulting from delays or failures in performance resulting from acts of God or other causes beyond its 204
4 control. Each party agrees to notify the other party promptly of any circumstance delaying its performance and to resume performance as soon thereafter as is reasonably practicable.
If there is such a delay or failure due to events as set forth in this paragraph, such delay or failure will result in all scheduled deadlines and time limitations being extended by an amount of time equal to such delay or failure.
13. Severability: The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render the other provisions unenforceable, invalid or illegal.
14. Attorneys' Fees: In any dispute between the parties, whether or not resulting in litigation, the prevailing party shall be entitled to recover from the other party all reasonable costs, including, without limitation, reasonable attorneys' fees.
15. No Party Deemed Drafter: In the event of a dispute between any of the parties hereto over the meaning of this Agreement, no party shall be deemed to have been the drafter hereof, and the principle of law that contracts are construed against the drafter does not and shall not apply.
16. Entire Agreement: This embodies the entire agreement between the parties. Any prior or contemporary agreements, understandings, promises, or representations pertaining to the subject of this Agreement not expressly set forth herein are of no force and effect. No waiver, modification, or alteration of the terms of this Agreement shall be binding unless made in a writing signed by the parties.
17. Counterpart Copies: This Agreement may be executed in counterparts, each of which will constitute an original, but all of which together will constitute one and the same instrument.
The Parties agree that a signed copy of this Agreement transmitted by one Party to the other Party by facsimile, by electronic transmission, or by an electronic signature platform (such as DocuSign) will be binding upon the sending Party to the same extent as if such Party had delivered a signed original of this Agreement.
(Remainder of page intentionally left blank.)
205
5 IN WITNESS WHEREOF, the City of Redding and The McConnell Foundation have executed the Agreement on the days and year set forth below:
Date: City of Shasta Lake
By:__________________________
Jessaca Lugo, City Manager
Date: The McConnell Foundation
By:__________________________
John A. Mancasola,
President
206
6 EXHIBIT A
WATER SCHEDULE
THE MCCONNELL FOUNDATION AND CITY OF SHASTA LAKE
WATER YEAR 2023-2024
Month Quantity
(af)
Point of Diversion Place of Use
November 90 COSL Intake - 001 City of Shasta Lake
December 90 COSL Intake - 001 City of Shasta Lake
January 85 COSL Intake - 001 City of Shasta Lake
February 85 COSL Intake - 001 City of Shasta Lake
Total 350
207