SAN2501.SR.MG
CITY OF SIMI VALLEY
MEMORANDUM
F
ebruary 24, 2025
T
O: City Council
F
ROM: Department of Public Works
S
UBJECT: APPROVAL OF PROPOSED SANITATION SERVICE RATES,
AUTHORIZATION TO PROCEED WITH THE PROPOSITION 218
PROCESS, AND RECOMMENDATION TO SET A PUBLIC HEARING TO
CONSIDER ADOPTION OF NEW SANITATION SERVICE RATES
STAFF RECOMMENDATION
It i
s recommended that the City Council:
1. A
pprove the proposed Sanitation Service Rates (fees and charges) and authorize staff to initiate a Proposition 218 process by mailing a notice of proposed Sanitation Service Rates and instructions on protesting the proposal; and
2. S
et a public hearing for May 5, 2025, to hear and tally protest ballots and consider adopting new Sanitation Service Rates.
BACKGROUND AND OVERVIEW
Sanitation Services for the City is funded by user fees that provide for the daily operation and maintenance of the Water Quality Control Plant (WQCP) and the sewer collection system. Maintenance projects typically include major facility component replacements within the WQCP or sewer system and are budgeted under capital projects for the Sanitation Fund. Sanitation fees primarily include ongoing service fees charged to all customers and connection fees, which are non-recurring, charged only to new customers when establishing service. The current single- family residential customer service fee is $55.85 per month and is in most cases collected via the homeowner's property tax bill.
Non-residential customers are mailed a bimonthly bill.
Sanitation fees are viewed as property-related fees for a utility service and are subject to specific requirements of the California Constitution Article XIII D § 6(a), commonly referred to as Proposition (Prop) 218. The requirements include:
• The fees must only cover expenses to provide service to the customer assessed. • A
n increase in the fee(s) must be approved by the customers under a protest -ballot procedure, where all affected property owners are notified and given the opportunity to protest the increase in writing or at a public hearing, and a majority protest prohibits the increase.
AGENDA ITEM NO.
12B
SAN2501.SR.MG
• A multi-year schedule of fee increases is allowed for up to five years.
The current Sanitation Fee Schedule for FY 2020-21 through FY 2024-25 was approved on January 16, 2020, following a Proposition 218 protest-ballot notification process, public hearing, and action by the City Council. S taff is recommending that the City Council approve the proposed Sanitation Service Rates (Exhibit 1, page 8) for the next five-year period and initiate a Proposition 218 notification process.
FINDINGS AND ALTERNATIVES
Sanitation Services is an Enterprise Fund funded by user fees. It provides for the daily operation and maintenance of the WQCP and the sanitation collection systems and funds infrastructure improvement needs for maintaining and upgrading them.
The City’s sanitation rates are currently in the middle range compared to other regional agencies in Ventura County. The Sanitation Rate Study (Draft) (Exhibit 1) recommends a series of 3.5% annual rate increase to fund the City’s long- term cost of providing sanitation services to customers. With these proposed increase, the City’s sanitation bills are projected to remain in the middle range compared to surrounding agencies.
The current FY 2024-25 Sanitation Fund (700) budget projects revenues of approximately $32.6 million and expenditures to be $28.8 million, resulting in a balance of $3.8 million.
Sanitation expenditures consist of costs required to operat e and maint ain the sewer collection system , WQCP and capital projects that are typically major replacement or rehabilitation projects that are performed within the WQCP or sewer system.
Operating and maintenance costs can be covered with current rates; however, additional revenue would be required to implement all of the recommended capital improvement projects over the next five years, and maintain a prudent fund balance. In recent years, several infrastructure projects have been deferred , and only priority maintenance/replacement projects were scheduled, which has created a backlog of projects that need to be constructed. T o maintain the reliability of the WQCP and collection system, aging equipment needs to be replaced and structures and piping need to be rehabilitated.
A utility fee increase requires that the agency prepare a report that clearly shows the proposed fees to cover costs. The Sanitation Rate Study (Draft) has been prepared by Bartle and Wells Associates in consultation with City staff to recommend sanitation fees (Service Rates) for the next five fiscal years.
The Study recommends rate increases to:
• Meet budgeted and projected operating expenses to maintain current service levels.
Operations and maintenance costs related to Sanitation’s Environmental Compliance Program, Collection System Maintenance, Plant Operations and Maintenance, as well as staff administration is projected to increase an average of 3.5% per year, from $19.9 million in FY 2024-25 to $23.0 million in FY 2029-30.
2 SAN2501.SR.MG
• Meet planned capital expenses that are estimated to average $14.1 million for the next five years.
• Maintain a 180-day operating reserve plus one-year capital reserve.
On July 29, 2019, the City Council approved the creation of a six-month (180- day) operating expense cash reserve and a Capital Repair and Replacement Reserve funded for unexpected capital costs with a one- year average of Capital Improvement Program (CIP) expenses for the Sanitation Fund. The reserve target provide s stable funding for operating expenses, capital improvement expenses, and/or emergency repairs. An adequate reserve makes positive cash flow, allows construction contracts to be awarded quickly, provides rate stabilization during periods of revenue shortages, and is set aside for capital replacements, perhaps on an emergency basis, in case of asset failure.
Bartle and Wells Associates affirmed Black & Veatch ’s, the consultant who provided the previous five-year rate study, recommendation of a six-month operating expense cash reserve of $10 million (FY25) and a Capital Repair and Replacement Reserve of the five- year average $17 million (FY25-FY29). Based on the current fiscal year budget and the reserve policy established by the City Council, a total Reserve of $27 million is recommended to sustain the long-term fiscal health of the WQCP and collection system.
In addition, the consultant has recommended maintaining an adequate fund balance to address any natural disasters in the future. To cover operations, maintenance, reserve funds, and future capital projects, an annual average rate increase of 3.5% is recommended.
The actual amount of the reserve will fluctuate from year to year depending on expenses and capital projects. It is not known at this time what impact maintaining the reserve will have on future sanitation rates. The rates being proposed are for a five-year period. Prior to the end of the five-year rate program, a new rate analysis will be conducted which will address the amount needed to maintain the recommended reserve level as well as other Sanitation rates. At that time, the City Council will revisit the appropriate reserve level and a revised rate structure.
The Sanitation Rate Study prepared by Bartle and Wells Associates recommends a revised rate structure to provide an updated fee schedule to maintain fair and equitable fees for each customer category. The analysis found that single family, senior, and mobile home residential customers should pay slightly less for services and the monthly lift station fees were reduced.
3 SAN2501.SR.MG
Recommended Sanitation Rates
Current
FY 2024/25 FY 2025/26 FY 2026/ 27 FY 2027/28 FY 2028/29 FY 2029/30 Monthly Residential ($/month)
Single Family $55.85 $56.73 $58.72 $60.78 $62.91 $65.11 Multi Family 39.62 42.54 44.03 45.57 47.16 48.81 Senior Housing 30.96 31.20 32.29 33.42 34.59 35.80 Mobile Home1 39.62 34.04 35.23 36.46 37.74 39.06 Monthly Non-Residential ($/month)2,3
Office with LM (SCD) 54.03 56.54 58. 52 60.57 62.69 64.88 Office without LM (SDL) 43.20 45.23 46.81 48.45 50.15 51.91 Commercial with LM (SCR) 65.68 68.44 70.84 73.32 75.89 78.55 Commercial without LM (SRL) 52.53 54.76 56.68 58.66 60.71 62.83 Restaurant with LM (SRR) 77.33 80.35 83.16 86.07 89.08 92.20 Restaurant without LM (RRL) 61.88 64.28 66.53 68.86 71.27 73.76 Café with LM (SRD) 77.33 80.35 83.16 86.07 89.08 92.20 Café without LM (RDL) 61.88 64.28 66.53 68.86 71.27 73.76 Commercial Units (SCU) 1 32.79 63.01 65.22 67.50 69.86 72.31 Park Landscape with Restroom (SPL) 1 35.22 63.01 65.22 67.50 69.86 72.31 Special SAP Conversion (SRS) 1 121.28 63.01 65.22 67.50 69.86 72.31 Other Non-Residential ($/Unit/month)
High Schools ($/Student) 2.34 2.44 2.53 2.62 2.71 2.80 Other Schools ($/Student) 1.56 1.63 1.69 1.75 1.81 1.87 Septage Hauling ($/750 Gal Load) 47.85 49.07 50.79 52.57 54.41 56.31 Monthly Lift Station Charge (In Addition to Normal Rates)4 Wood Ranch/Big Sky SFR Lift Fee 11.33 10.45 10. 82 11.20 11.59 12.00 Duplex Unit Lift Fee 8.34 7.84 8.11 8.39 8.68 8.98 Non-Residential Usage Rates ($/hundred cubic feet)5
Office with LM (SCD) 6.66 8.08 8. 36 8.65 8.95 9.26 Office without LM (SDL) 5.32 6.46 6.69 6.92 7.16 7.41 Commercial with LM (SCR) 8.64 9.78 10.12 10.47 10.84 11.22 Commercial without LM (SRL) 6.92 7.82 8.09 8.37 8.66 8.96 Restaurant with LM (SRR) 10.63 11.48 11.88 12.30 12.73 13.18 Restaurant without LM (RRL) 8.50 9.18 9.50 9.83 10.17 10.53 Café with LM (SRD) 10.63 11.48 11.88 12.30 12.73 13.18 Café without LM (RDL) 8.50 9.18 9.50 9.83 10.17 10.53 Commercial Units (SCU) 9.38 9.00 9.32 9.65 9.99 10.34 2 Billing is completed on a bi-monthly basis.
3 Non-residential fixed monthly rate includes a billed sewage allowance of 7 hundred cubic feet (hcf). 4 For customers that benefit from the City's lift stations.
Proposed
5 The City has two type of non-residential customers: 1) with a landscape meter and 2) without a landscape meter. With landscape meter represents customers that have separate irrigation meter and therefore billable sewage flow is assumed 100
% of water consumption. Without landscape meter represents customers that don’t have a separate irrigation meter and therefore billable sewage flow is assumed to be 80% of water consumption. 1 The notable change in rates for these users reflect a revaluation of usage and a realignment of the cost of service for each customer class.
4 SAN2501.SR.MG
Proposition 218 Process
Utility service fees, such as sanitation fees, are service-related charges that may only be used to confer a direct benefit, such as sanitation services, directly to the payer. In accordance with court rulings, it has been concluded that Proposition 218 (California Constitution Article XIII D § 6(a)) governs utility fees. The Proposition 218 process entails a protest-ballot whereby property owners are notified of a proposed fee or fee increase and have a 45- day period to protest the fee increase, either in writing or at a public hearing.
For the proposed Sanitation Service rates, the City Council would ultimately determine whether to increase the fees after a public hearing is conducted and all protest ballots are tallied. If a majority of property owners protest, then the fee cannot be adopted or increased. However, if the protest ballots do not constitute a majority of the parcel ownership, the Council may decide to either increase the fee or not. Based on the number of parcels with Sanitation services (approximately 40,000), a majorit y protest would require approximately 20,001 protests to be received. The City Council then must also decide whether to continue to collect residential service fees via the tax roll, as has been done historically.
$26.36
$35.28 $36.00
$46.57 $48.77
$55.85
$67.42
$72.46 $74.30
$103.36
$112.25 $113.57
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
Monthly Single Family Residential Sanitation Bills, 13 CCF Winter Use Conducted September 2024
Fixed Charge Variable Charge
5 SAN2501.SR.MG
If the City Council wishes to adopt the Sanitation Service Rates and collect those fees on the tax roll, the City Council must pass an ordinance adopted by a four -fifths majority pursuant to Section 5470 et seq. of the California Health and Safety Code.
It should be noted that the Prop 218 notices will provide information on the maximum rate increase the City Council will be allowed to consider. After the public hearing, the City Council may choose to adopt the proposed rate increase or a lesser rate. S taff recommends the City Council approve the draft Proposition 218 Notice for Sanitation Rates, FY 2025-26 to FY 2029-30 and set May 5, 2025, at 6:30 p.m. as the date and time for the public hearing to consider the adoption of the new Sanitation Service Rates.
The recommended proposed rates are only being tentatively approved by the City Council. Approving the proposed rates this evening allows for the rate adjustment process to proceed. At the May 5, 2025 public hearing, the City Council will adopt a final rate schedule that cannot exceed the rates proposed this evening. At th e May 5, 2025 hearing, the City Council has the option to adopt final rates that are less than those proposed in this report.
Public Outreach
Following the approval of the proposed Sanitation Service Rates, staff will conduct public outreach to better inform the public on the need to increase rates. Outreach will include the following:
• Posting a notice to the City's website
• Providing a notice on Simi Valley Television (SVTV)
• Presentations at Neighborhood Councils
• Presentation at the Chamber of Commerce
• Conducting a special public meeting to provide an opportunity to discuss and ask questions about proposed Sanitation Service Rates.
• Information on the City’s social media channels
• Information in the City’s community newsletter, City Focus
The following alternatives are available to the City Council:
1. Approve the proposed Sanitation Service Rates and authorize staff to initiate a Proposition 218 process by mailing a notice of proposed Sanitation Service Rates and instructions on protesting the proposal;
2. Set a public hearing for May 5, 2025, to consider adopting new Sanitation Service Rates;
3. Provide staff with other direction.
Staff recommends Alternative Nos. 1 and 2.
6 SAN2501.SR.MG
SUGGESTED CITY COUNCIL MOTION
I move to a pprove the proposed Sanitation Service Rates , authorize staff to initiate a Proposition 218 process by mailing a notice of proposed Sanitation Service Rates and instructions on protesting the proposal , and set a public hearing for May 5, to consider adopting new Sanitation Service Rates.
SUMMARY
Sanitation Services is an Enterprise Fund that is funded by user fees that provide for the daily operation and maintenance of the WQCP and the sanitation collection systems, as well as funding infrastructure improvement needs for maintaining and upgrading the plant and collection system. Current sanitation fees were adopted on January 16, 2020. Staff recommends the City Council approve the proposed Sanitation Service Rates for the next five fiscal years, authorize staff to initiate a Proposition 218 process , and set a public hearing date of May 5, 2025 to consider adoption of the new rates. .
Ronald K. Fuchiwaki
Public Works Director
Prepared by: Chris Oberender, Acting Assistant Public Works Director John Hamilton, Principal Engineer (Sanitation)
Index Page
Exhibit 1 - Sanitation Rate Study (Draft) ............................... 8 Exhibit 2 - Draft Proposition 218 Notice .............................. 51
7 City Of Simi Valley
FY 2026 -2030 DRAFT
Sanitation Rate Study and
Capacity Fee Update
February 13, 2025
EXHIBIT 1
8 Bartle Wells Associates
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel: 510.653.3399
www.bartlewells.com
FY 2026-2030 Sanitation Rate Study and
Capacity Fee Update
February 2025
City of Simi Valley
Prepared by:
9 February 13, 2025
City of Simi Valley
2929 Tapo Canyon Road
Simi Valley, CA 93063
Attn: John Hamilton, Principal Engineer
Re: FY 2026-2030 Draft Sanitation Rate Study and Capacity Fee Update
Bartle Wells Associates (BWA) is pleased to submit the attached FY 2026-2030 Draft Sanitation Rate Study and Capacity Fee Update to the City of Simi Valley (City) . The study develops long-term financial projections for the City’s sanitation utility and recommends rates and fees designed to fund the City’s projected costs of providing sanitation service.
The City Council has historically been proactive in raising rates to keep revenues in line with the costs of providing sanitation service, which has allowed the City to address its operating and capital funding needs while maintaining the financial health of its sanitation enterprise. The report recommends a series of overall 3.5% annual sanitation rate increases in each of the next five years to provide adequate funding for capital improvement needs and keep up with operating cost inflation . The proposed rates also include some minor adjustments to the sanitation rate structure designed to keep the City’s rates aligned with the costs of providing service.
The proposed rates are phased in as gradually as possible to minimize the annual impact on ratepayers.
Due to the multi -year phase-in of rate increases, the City’s balance sheet with the proposed rates is estimated to show annual deficits from fiscal year (FY) 2026 to FY 2030 until rates are phased in to reach adequate levels to support balanced budgets beginning FY 2031.
The City’s sanitation rates are currently in the middle range compared to other regional agencies in Ventura County and are projected to remain in the middle range with implementation of the proposed rate increases.
We enjoyed working with the City on this assignment and appreciate the ongoing collaboration, input and assistance received from City staff. Please contact us anytime if you have questions about this report or other issues related to utility rates and finance.
BARTLE WELLS ASSOCIATES
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com
10 TABLE OF CONTENTS
1 Background, Objectives and Proposed Rates ................................ ................................ .......... 1
1.1 Background… ........................................................................................................................ ..1
1.2 Sanitation System Overview .................................................................................................. 1
1.3 Capital Improvement Funding Needs..................................................................................... 1
1.4 Policy Goals & Objectives ....................................................................................................... 2
1.5 Proposed Sanitation Rates ..................................................................................................... 2 2 Legal Requirements and Rate Methodology ................................ ................................ ........... 4
2.1 Constitutional Rate Requirements ......................................................................................... 4
2.1.1 Article 13D, Section 6 ............................................................................................................. 4
2.2 Rate-Setting Methodology ..................................................................................................... 5
2.3 Current and Historical Sanitation Rates ................................................................................. 5
2.4 Regional Sanitation Rate Survey ............................................................................................ 8
2.5 Sanitation Accounts and Use .................................................................................................. 8
2.6 Revenue Under Existing Rates .............................................................................................. 10
2.7 Financial Challenges / Key Drivers of Rate Increases ........................................................... 11
2.7.1 Capital Improvements and Replacement of Aging Infrastructure ....................................... 11
2.7.2 Ongoing Operating Cost Inflation ......................................................................................... 13
2.8 Outstanding Debt Service ..................................................................................................... 13
2.9 Sanitation Enterprise Financial Projections ......................................................................... 13
2.10 Sanitation Rate Projections .................................................................................................. 17 3 Cost of Service Analysis ................................ ................................ ................................ ........ 18
3.1 Functional Cost Components ............................................................................................... 19
3.1.1 Allocation of Capital Costs .................................................................................................... 19
3.1.2 Allocation of Operating Expenses ........................................................................................ 20
3.2 Units of Service ..................................................................................................................... 21
3.3 Cost of Service Allocations ................................................................................................... 23
3.3.1 Cost per Unit.. ....................................................................................................................... 23
3.3.2 Distribution of Costs to Customer Classes ........................................................................... 24 4 Rate Derivation ................................ ................................ ................................ .................... 26
4.1 Rate Design… ........................................................................................................................ 26
4.2 Proposed Rates ..................................................................................................................... 29
4.2.1 Lift Station Surcharge ........................................................................................................... 30
4.3 Bill Impacts…......................................................................................................................... 31
4.4 Rate Survey… ........................................................................................................................ 32 5 Capacity Fee Update ................................ ................................ ................................ ............ 33
5.1 Background and Objectives .................................................................................................. 33
5.2 Government Code ................................................................................................................ 33
5.3 Capacity Fee Derivation ........................................................................................................ 33
5.4 Fee Survey….. ....................................................................................................................... 35
5.5 Recommended Annual Adjustments.................................................................................... 36 6 Annexation Fee Update ................................ ................................ ................................ ........ 37 11 6.1 Background… ........................................................................................................................ 37
6.2 Proposed Annexation Fee .................................................................................................... 37 7 Conclusion and Recommendations ................................ ................................ ....................... 38
7.1 Conclusion….. ....................................................................................................................... 38
7.2 Recommendations ............................................................................................................... 38
LIST OF TABLES
Table 1 – Proposed Sanitation Rates ..................................................................................................... 3 Table 2 – Historical and Current Sanitation Rates ................................................................................. 7 Table 3 – Sanitation Accounts with Existing and Projected Use ............................................................ 9 Table 4 – Revenue Estimate ................................................................................................................. 10 Table 5 – 10-Year Capital Improvement Program ............................................................................... 12 Table 6 – Outstanding Debt Service ..................................................................................................... 13 Table 7 - 10-Year Cash Flow Projections .............................................................................................. 15 Table 8 – Projected Rate Increases ...................................................................................................... 17 Table 9 – Operations and Maintenance and Capital Cost of Service Allocation ................................. 18 Table 10 – Allocation of Capital Costs .................................................................................................. 20 Table 11 – Allocation of Operations and Maintenance Expenses ....................................................... 21 Table 12 – Units of Service ................................................................................................................... 22 Table 13 – Unit Rate Derivation ........................................................................................................... 23 Table 14 – Customer Class Cost Distribution ....................................................................................... 24 Table 15 – Reallocated FY 2024/25 Rates ............................................................................................ 27 Table 16 – Reallocated Revenue Allocation by Customer Class .......................................................... 28 Table 17 – Proposed Sanitation Rates ................................................................................................. 29 Table 18 – Replacement Cost Calculation of Life Station Assets ......................................................... 30 Table 19 – Proposed Monthly Lift Station Charges ............................................................................. 30 Table 20 – Single Family Monthly Bill Impacts ..................................................................................... 31 Table 21 – Proposed Sanitation Capacity (Connection) Fees for New Customers .............................. 35 Table 22 – Proposed Annexation Fee for New Customers .................................................................. 37
LIST OF FIGURES
Figure 1 – Single Family Residential Sanitation Rate Survey ................................................................. 8 Figure 2 – Sanitation Utility Projected Revenues & Expenses ............................................................. 16 Figure 3 – Single Family Monthly Sanitation Rate Survey ................................................................... 32 Figure 4 – Single Family Capacity (Connection) Fee Survey for New Customers ................................ 36
12 BARTLE WELLS ASSOCIATES 1
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 1 BACKGROUND, OBJECTIVES AND PROPOSED RATES
1.1 Background
The City of Simi Valley (City) is located in Ventura County, approximately 37 miles northwest of downtown Los Angeles. The City encompasses roughly 42 square miles and has an estimated population of 125,113.
The City was incorporated in 1969 and is a General Law City. The City provides sanitation service to residential, commercial, and institutional accounts in and adjacent to the City. The City’s sanitation utility is self-supporting enterprise that relies predominantly on revenues from sanitation rates to fund the costs of providing service.
The City has provided good financial stewardship via adoption of gradual annual sanitation rate increases.
These increases have put the sanitation enterprise on a strong financial footing, helped keep rates aligned with the costs of providing service and supported a balanced increase in funding for necessary rehabilitation and replacement of aging sanitation system infrastructure.
The City last conducted a sanitation rate study in 2019 leading to an adoption of 5 years of 7.85% average annual sanitation rate increases effective July 1, 2020, through June 30, 2025.
The City’s sanitation rates are currently in the middle range compared to other regional agencies in Ventura County. With the proposed 3.5% rate increases, the City’s sanitation bills are projected to remain in the middle range compared to surrounding agencies.
1.2 Sanitation System Overview
The City provides wastewater collection and treatment services to nearly 40,000 customer connections in both Ventura Waterworks District No. 8 and the Golden State Water Company . The City’s sanitation facilities include over 380 miles of sewer pipelines, three lift stations, and the City’s Water Quality Control Plant (WQCP). The recently upgraded treatment plant is an activated sludge plant that uses the latest methods for biological nutrient removal. After meeting stringent State permit requirements, treated wastewater effluent is discharged to the Arroyo Simi. A portion of wastewater effluent from the WQCP is treated to higher standards and applied as recycled water for dust control at the Simi Valley Landfill.
1.3 Capital Improvement Funding Needs
While the City has completed a significant amount of capital improvements over the past decade, in recent years some projects were temporarily delayed due to the recent COVID crisis and other factors including turnover of experienced engineering staff. These deferred costs helped enable the City to mitigate recent construction cost increases, as well as maintain a strong financial footing . However, the City has been proceeding with its capital program during this period and has a number of large projects currently in design which will soon require funding.
13 BARTLE WELLS ASSOCIATES 2
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Many of the City’s wastewater pipelines and facilities are aging and will need to be rehabilitated or replaced when they reach the end of their useful lives. The sanitation enterprise is facing substan tial capital improvement funding needs in upcoming years. The City currently anticipates funding roughly $71.7 million of sanitation system capital improvements over the next 5 years. The improvements are needed to address existing deficiencies, rehabilitate and/or replace aging infrastructure that has reached the end of its useful life, and support safe and reliable service.
Wastewater capital improvements primarily consist of rehabilitation and replacement of aging sanitation pipelines but also inc lude pump station improvements and ongoing capital improvements to the Water Quality Control Plant.
In 2019, the City issued debt to fund approximately $30.6 million in wastewater treatment plant upgrades.
Funding this project with debt temporarily reduced the City’s cash outlays for capital needs and enabled the City to build up sanitation fund reserves, some of which are projected to be drawn down in upcoming years as the City proceeds with its capital program.
1.4 Policy Goals & Objectives
Key policy goals and objectives of the sanitation rate study include:
1. Develop sanitation rates that:
a. recover the City’s costs of providing sanitation service b. are fair and equitable to all customers
c. are easy to understand and implement
d. comply with the legal requirements of Proposition 218 and other California law e. provide adequate funding for capital improvement needs including near-term funding priorities and long-term rehabilitation and replacement of aging infrastructure
2. Recommend rates that maintain long-term financial sustainability of the sanitation utility and put the sanitation enterprises on course for balanced budgets.
3. Aim for steady, gradual annual rate increases to help minimize the annual impact on customers and mitigate the potential for larger, periodic rate spikes.
4. Maintain a prudent level of fund reserves.
1.5 Proposed Sanitation Rates
Table 1 on the following page shows the schedule of proposed sanitation rates. Proposed rates account for both overall rate increases as well as some relatively minor rate structure adjustments to keep rates aligned with the cost of providing service. As proposed, sanitation rate increases will continue to become effective on July 1st at the beginning of each of the next five fiscal years, starting July 1, 2025. 14 BARTLE WELLS ASSOCIATES 3
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 1 – Proposed Sanitation Rates
Current
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Monthly Residential ($/month)
Single Family $55.85 $56.73 $58.72 $60.78 $62.91 $65.11 Multi Family 39.62 42.54 44.03 45.57 47.16 48.81 Senior Housing 30.96 31.20 32.29 33.42 34.59 35.80 Mobile Home 1 39.62 34.04 35.23 36.46 37.74 39.06 Monthly Non-Residential ($/month)2,3
Office with LM (SCD) 54.03 56.54 58.52 60.57 62.69 64.88 Office without LM (SDL) 43.20 45.23 46.81 48.45 50.15 51.91 Commercial with LM (SCR) 65.68 68.44 70.84 73.32 75.89 78.55 Commercial without LM (SRL) 52.53 54.76 56.68 58.66 60.71 62.83 Restaurant with LM (SRR) 77.33 80.35 83.16 86.07 89.08 92.20 Restaurant without LM (RRL) 61.88 64.28 66.53 68.86 71.27 73.76 Café with LM (SRD) 77.33 80.35 83.16 86.07 89.08 92.20 Café without LM (RDL) 61.88 64.28 66.53 68.86 71.27 73.76 Commercial Units (SCU) 1 32.79 63.01 65.22 67.50 69.86 72.31 Park Landscape with Restroom (SPL) 1 35.22 63.01 65.22 67.50 69.86 72.31 Special SAP Conversion (SRS) 1 121.28 63.01 65.22 67.50 69.86 72.31 Other Non-Residential ($/Unit/month)
High Schools ($/Student) 2.34 2.44 2.53 2.62 2.71 2.80 Other Schools ($/Student) 1.56 1.63 1.69 1.75 1.81 1.87 Septage Hauling ($/750 Gal Load) 47.85 49.07 50.79 52.57 54.41 56.31 Monthly Lift Station Charge (In Addition to Normal Rates) 4 Wood Ranch/Big Sky SFR Lift Fee 11.33 10.45 10.82 11.20 11.59 12.00 Duplex Unit Lift Fee 8.34 7.84 8.11 8.39 8.68 8.98 Non-Residential Usage Rates ($/hundred cubic feet)5
Office with LM (SCD) 6.66 8.08 8.36 8.65 8.95 9.26 Office without LM (SDL) 5.32 6.46 6.69 6.92 7.16 7.41 Commercial with LM (SCR) 8.64 9.78 10.12 10.47 10.84 11.22 Commercial without LM (SRL) 6.92 7.82 8.09 8.37 8.66 8.96 Restaurant with LM (SRR) 10.63 11.48 11.88 12.30 12.73 13.18 Restaurant without LM (RRL) 8.50 9.18 9.50 9.83 10.17 10.53 Café with LM (SRD) 10.63 11.48 11.88 12.30 12.73 13.18 Café without LM (RDL) 8.50 9.18 9.50 9.83 10.17 10.53 Commercial Units (SCU) 9.38 9.00 9.32 9.65 9.99 10.34 2 Billing is completed on a bi-monthly basis.
3 Non-residential fixed monthly rate includes a billed sewage allowance of 7 hundred cubic feet (hcf). 4 For customers that benefit from the City's lift stations.
Proposed
5 The City has two type of non-residential customers: 1) with a landscape meter and 2) without a landscape meter. With landscape meter represents customers that have separate irrigation meter and therefore billable sewage flow is assumed 100% of water consumption. Without landscape meter represents customers that don’t have a separate irrigation meter and therefore billable sewage flow is assumed to be 80% of water consumption. 1 The notable change in rates for these users reflect a revaluation of usage and a realignment of the cost of service for each customer class.
15 BARTLE WELLS ASSOCIATES 4
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 2 LEGAL REQUIREMENTS AND RATE METHODOLOGY
2.1 Constitutional Rate Requirements
The California Constitution includes two key articles that directly govern or impact the City’s sanitation rates: Article 10 and Article 13D. The rates developed in this study were designed to comply with both of these constitutional mandates as well as various provisions of the California law that support and add further guidance for implementing these constitutional requirements. In accordance with the constitutional provisions, the proposed rates are designed to a) recover the City’s cost of providing sewer service, b) equitably recover revenues in proportion to the cost for serving each customer, and c) promote conservation and discourage waste.
2.1.1 Article 13D, Section 6
Proposition 218 was adopted by California voters in 1996 and added Articles 13C and 13D to the California Constitution. Article 13D, Section 6 governs property-related charges, which the California Supreme Court subsequently ruled includes ongoing utility service charges such as water, sewer, and garbage rates.
Article 13D, Section 6 establishes a) procedural requirements for imposing or increasing property-related charges, and b) substantive requirements for those charges. Article 13D also requires voter approval for new or increased property -related charges but exempts rate increases for water, sewer, and garbage services from requiring voter approval as these rates support essential services.
The substantive requirements of Article 13D, Section 6 require the City’s sewer rates to meet the following conditions:
1) Revenues derived from the fee or charge shall not exceed the funds required to provide the property-related service.
2) Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed.
3) The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel. 4) No fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. 5) No fee or charge may be imposed for general governmental services, such as police or fire services, where the service is available to the public at large in substantially the same manner as it is to property owners.
A number of court decisions over the past 20 years have added some legal clarification regarding these substantive rate requirements. The sanitation rates derived in this report are based on cost -of-service methodologies that are designed to equitably recover costs from sanitation customers and comply with all legal requirements.
16 BARTLE WELLS ASSOCIATES 5
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
2.2 Rate-Setting Methodology
The rates developed in this report use a cost -of-service methodology to establish an equitable system of fixed and variable service charges designed to recover the costs of providing service that is consistent with approach identified in the Water Environment Federation Manual of Practice No. 27 , Financing and Charges for Wastewater Systems.
2.3 Current and Historical Sanitation Rates
The City has provided good financial stewardship by gradually raising sanitation rates to keep rates in line with escalating costs of providing sanitation service. Table 2 shows a recent history of the City’s sanitation rates.
Residential properties are billed for sewer service charges via the Ventura County Property Tax Roll s.
However, residential properties receiving a Certificate of Occupancy after June may be too late to be billed via the property tax rolls the first year — in which case they would be temporarily billed directly by the City until the subsequent year . Commercial properties and businesses within the Ventura County Waterworks District No. 8 service area are billed for sewer service bimonthly via a combined water and sewer utility bill. Commercial properties and businesses within the Golden State Water Company service area are billed bimonthly for sewer service by the City.
The City last conducted a sanitation rate study in 2019 leading to the adoption of 5 years of rate increases that averaged 7.85% per year from July 1, 2020, through the final increase that became effective on July 1, 2024. Future rates from this study will reflect 3.5% annual rate increases effective July 1 of each year from July 1, 2025, through June 30, 2029.
The City’s sanitation rates include two components:
A fixed Monthly Service Charge that varies based on customer class. These fixed charges are levied independent of usage and recover a portion of the City’s fixed costs for providing service. The City bills non-residential customers primarily on sewage flow but imposes a monthly minimum service charge which includes a billed sewage allowance of 7 hundred cubic feet (hcf) to ensure all customers contribute towards the City’s f ixed costs of service that are incurred regardless of wastewater discharge. The City incurs a substantial amount of costs ensuring that sanitation system capacity is available at all times to meet customer needs on demand. The City’s Water Quality Control Plant has a design capacity of 12.5 million gallons per day (mgd) of average dry weather flow. The treatment plant was designed with excess capacity to ensure the availability of sanitation system capacity for all customer needs and provide capacity for growth. The City’s wastewater flows are currently about 8.0 mgd, approximately 64% of plant capacity. The City anticipates the need to start planning for expansion of the treatment plant when the wastewater flow reaches approximately 80% of plant capacity, or 17 BARTLE WELLS ASSOCIATES 6
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update roughly 10 mgd. While a future treatment plant expansion could be needed at some point in the future, the City currently anticipates that an expansion would not be needed for at least 10-15 years or more. The City can re-evaluate the potential for expansion in future years. Volumetric Sanitation Usage Rates are billed based on metered water use. Commercial customers are billed based on water used each billing period. Sanitation Usage Rates are billed per hcf with 1 hcf equal to approximately 748 gallons of water.
The City has two types of non-residential customers including those: 1) with landscape meters and 2) without landscape meters. Customers with landscape meters have separate irrigation meters that account for outdoor use that is not discharged into the sewer system; therefore, billable sewage flow is assumed to be 100% of water consumption from the meter serving the building. Customers without landscape meter s have water meters that include both indoor and outdoor irrigation use; therefore, billable sewage flow is assumed to be 80 % of water consumption to account for an estimated 20% of outdoor irrigation that does not get returned to the sewer system.
o The approach of charging customers without l andscape meters 80% of their water usage for sanitation service reflects an effort to more accurately capture the water that ends up in the sanitation system. For these customers, it is assumed that some water goes toward outdoor uses like landscaping, which does not flow into the sewer. By billing only a portion (estimated to be 80%) of total water usage, the City estimates the amount of water likely returned to the sewer, ensuring a more equitable charge. On the other hand, customers with separate irri gation meters track outdoor water use independently, so all water on their primary meter is assumed to be for indoor purposes and therefore returned to the sewer system. As a result, those customers are charged 100% of the primary meter’s usage for sanitation service, accurately reflecting their contribution to the sewer system. This system balances billing equity between customers with and without landscape meters, as it differentiates between water use that contributes to sewer demand and water that does not.
18 BARTLE WELLS ASSOCIATES 7
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 2 – Historical and Current Sanitation Rates
Current
FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25
Monthly Fixed Rates
Residential
Single Family $41.24 $44.48 $47.97 $51.76 $55.85
Multi Family 29.25 31.55 34.03 36.72 39.62 Senior Housing 22.86 24.65 26.59 28.69 30.96 Mobile Home 29.25 31.55 34.03 36.72 39.62 Non-Residential 1,2
Office with LM (SCD) 39.89 43.02 46.40 50.07 54.03 Office without LM (SDL) 31.91 34.41 37.11 40.04 43.20 Commercial with LM (SCR) 48.49 52.30 56.41 60.87 65.68 Commercial without LM (SRL) 38.79 41.84 45.12 48.68 52.53 Restaurant with LM (SRR) 57.11 61.59 66.42 71.67 77.33 Restaurant without LM (RRL) 45.69 49.28 53.15 57.35 61.88 Café with LM (SRD) 57.11 61.59 66.42 71.67 77.33 Café without LM (RDL) 45.69 49.28 53.15 57.35 61.88 Commercial Units (SCU) 24.26 26.15 28.19 30.39 32.79 Park Landscape with Restroom (SPL) 26.08 28.11 30.31 32.67 35.22 Special SAP Conversion (SPS) 121.28 121.28 121.28 121.28 121.28 Usage Rates
Non-Residential ($/hcf) 3
Office with LM (SCD) $4.91 $5.30 $5.72 $6.17 $6.66
Office without LM (SDL) 3.93 4.24 4.57 4.93 5.32 Commercial with LM (SCR) 6.38 6.88 7.42 8.01 8.64 Commercial without LM (SRL) 5.11 5.51 5.94 6.41 6.92 Restaurant with LM (SRR) 7.85 8.47 9.13 9.85 10.63 Restaurant without LM (RRL) 6.28 6.77 7.30 7.88 8.50 Café with LM (SRD) 7.85 8.47 9.13 9.85 10.63 Café without LM (RDL) 6.28 6.77 7.30 7.88 8.50 Commercial Units (SCU) 6.94 7.48 8.06 8.69 9.38 Other ($/unit)
High Schools ($/student) 1.72 1.86 2.01 2.17 2.34 Other Schools ($/student) 1.15 1.24 1.34 1.45 1.56 Septage Hauling ($/750 gal Load) 35.34 38.11 41.10 44.35 47.85 Monthly Lift Station Charge (In Addition to Normal Rates) Wood Ranch/Big Sky SFR Lift Fee $8.37 $9.03 $9.74 $10.50 $11.33 Duplex Unit Lift Fee 6.16 6.64 7.16 7.73 8.34 1 Billing is completed on a bi-monthly basis.
2 Non-residential fixed monthly rate includes a billed sewage allowance of 7 hundred cubic feet (hcf). 3 The City has two type of non-residential customers: 1) with a landscape meter and 2) without a landscape meter. With landscape meter represents customers that have separate irrigation meter and therefore billable sewage flow is assumed 100% of water consumption. Without landscape meter represents customers that don’t have a separate irrigation meter and therefore billable sewage flow is assumed to be 80% of water consumption. 19 BARTLE WELLS ASSOCIATES 8
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
2.4 Regional Sanitation Rate Survey
The chart below compares the City’s current sanitation service charges to those of other regional agencies for a typical single family home with 13 hundred cubic feet of monthly winter water use . Roughly three quarters of the agencies (including Simi Valley) have 100% fixed residential wastewater charges that do not vary based on volume of wastewater discharge , and a quarter have rates that include a volumetric component based on metered water use during the wet winter months, a period of minimal outdoor irrigation. The City’s sanitation rates for a typical home are currently in the middle range compared to other regional agencies.
Figure 1 – Single Family Residential Sanitation Rate Survey
2.5 Sanitation Accounts and Use
Table 3 shows current and projected customer counts and sanitation use by customer class . The City’s 2020 Urban Water Management Plan (UWMP) projected population growth of 0.5% per year based on the Southern California Association of Governments (SCAG) projections. The annual projected customer growth rate in this study is based on the City’s 2021-2029 Housing Element Study projected growth rate of 0.6% adopted on February 27, 2023. This study assumes approximately half of the Housing Study's annual projected growth rate (0.3%) to be slightly conservative for financial planning purposes. $26.36
$35.28 $36.00
$46.57 $48.77
$55.85
$67.42
$72.46 $74.30
$103.36
$112.25 $113.57
$0
$20
$40
$60
$80
$100
$120
Las Virgenes
Municipal
Water
District
(Calabasas)
City of
Thousand
Oaks
City of Port
Hueneme
Ventura
County
Waterworks
Dist 1
(Moorpark)
Camrosa
Water
District
City of Simi
Valley
(Existing)
City of
Oxnard
City of
Ventura
City of
Camarillo
City of
Fillmore
Triunfo
Water and
Sanitation
District
(Westlake)
City of Santa
Paula
Monthly Single Family Residential Sanitation Bills, 13 CCF Winter Use Fixed Charge Variable Charge
20 BARTLE WELLS ASSOCIATES 9
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 3 – Sanitation Accounts with Existing and Projected Use
Annual Projected Growth Rate 1 0.30% 0.30% 0.30% 0.30% 0.30% FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Fixed (Number of Customers)
Residential2
Single Family 32,538 32,538 32,636 32,734 32,832 32,930 33,029 Multi Family 4,041 4,041 4,053 4,065 4,077 4,090 4,102 Senior Housing 99 99 99 100 100 100 100 Mobile Home 818 818 820 823 825 828 830 Single Family Lift Stations 382 382 383 384 385 387 388 Multi Family Lift Stations 91 91 91 92 92 92 92 Non-Residential 3
Office with LM (SCD) 494 494 495 497 498 500 501 Office without LM (SDL) 146 146 146 147 147 148 148 Commercial with LM (SCR) 202 202 203 203 204 204 205 Commercial without LM (SRL) 18 18 18 18 18 18 18 Restaurant with LM (SRR) 39 39 39 39 39 39 40 Restaurant without LM (RRL) 7 7 7 7 7 7 7 Café with LM (SRD) 67 67 67 67 68 68 68 Café without LM (RDL) 25 25 25 25 25 25 25 Commercial Units (SCU) 14 14 14 14 14 14 14 Park Landscape with Restroom (SPL) 5 5 5 5 5 5 5 Special SAP Conversion (SRS) 1 1 1 1 1 1 1 FY 2023/244 FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Variable (Number of Units)
Non-Residential (total HCF)
Office with LM (SCD) 171,955 171,955 172,471 172,988 173,507 174,028 174,550 Office without LM (SDL) 54,996 54,996 55,161 55,326 55,492 55,659 55,826 Commercial with LM (SCR) 102,828 102,828 103,136 103,446 103,756 104,067 104,380 Commercial without LM (SRL) 24,790 24,790 24,864 24,939 25,014 25,089 25,164 Restaurant with LM (SRR) 31,801 31,801 31,896 31,992 32,088 32,184 32,281 Restaurant without LM (RRL) 7,841 7,841 7,865 7,888 7,912 7,936 7,959 Café with LM (SRD) 44,914 44,914 45,049 45,184 45,319 45,455 45,592 Café without LM (RDL) 21,821 21,821 21,886 21,952 22,018 22,084 22,150 Commercial Units (SCU) 7,969 7,969 7,993 8,017 8,041 8,065 8,089 Other (total units)
High Schools (# students) 5 5,009 5,009 5,024 5,039 5,054 5,069 5,084 Other Schools (# students) 5 12,066 12,066 12,102 12,139 12,175 12,211 12,248 Septage Hauling (# of 750 gal loads) 6 559 559 560 562 564 565 567 2 Source: "3d San Billing Data UPDATED 2024-25_DATA_ DSIMSANI_SEWER_18540102" received on 10/17/24. 3 Source: "Active Non Residential Sewer Services 9-30-24." 4 Source: "Sewer Billing Summary FY24."
5 Source: "Sanitation Student Count Worksheet."
6 Source: "Pumping Truck Daily Log" 2023 & 2024.
1 Annual projected growth rate is based on the City's 2021-2029 Housing Element Study adopted on February 27, 2023. This study assumes half of the Housing Study's annual projected growth rate for conservative measures. 21 BARTLE WELLS ASSOCIATES 10
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
2.6 Revenue Under Existing Rates
The following table calculates the annual revenue under existing rates for the prior and current fiscal years. This table was developed to check and validate the revenue assumptions used in the rate study.
Table 4 – Revenue Estimate
FY 2023/24
Revenue
Estimated FY
2024/25 Revenue
Fixed
Residential
Single Family $20,210,003 $21,806,968
Multi Family 1,780,626 1,921,253
Senior Housing 34,084 36,780
Mobile Home 360,444 388,910
Lift Station Customers 338,425 360,348 Non-Residential
Office with LM (SCD) 296,815 320,290 Office without LM (SDL) 70,150 75,686 Commercial with LM (SCR) 147,549 159,208 Commercial without LM (SRL) 10,515 11,346 Restaurant with LM (SRR) 33,542 36,190 Restaurant without LM (RRL) 4,817 5,198 Café with LM (SRD) 57,623 62,173 Café without LM (RDL) 17,205 18,564 Commercial Units (SCU) 5,106 5,509 Park Landscape with Restroom (SPL) 1,960 2,113 Special SAP Conversion (SRS) 1,455 1,455 Total Fixed Revenue: 23,370,318 25,211,993 FY 2023/24
Revenue
Estimated FY
2024/25 Revenue
Variable
Non-Residential ($/hcf)
Office with LM (SCD) $1,060,962 $1,145,220
Office without LM (SDL) 271,130 292,579 Commercial with LM (SCR) 823,652 888,434 Commercial without LM (SRL) 158,904 171,547 Restaurant with LM (SRR) 313,240 338,045 Restaurant without LM (RRL) 61,787 66,649 Café with LM (SRD) 442,403 477,436 Café without LM (RDL) 171,949 185,479 Commercial Units (SCU) 69,282 74,749 Other ($/unit)
High Schools ($/Student) 130,421 140,639 Other Schools ($/Student) 209,948 225,876 Septage Hauling ($/750 gal Load) 24,776 26,732 Total Variable Revenue: 3,738,456 4,033,382 Total Revenue: $27,108,774 $29,245,376
22 BARTLE WELLS ASSOCIATES 11
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
2.7 Financial Challenges / Key Drivers of Rate Increases Going forward, the City’s sanitation enterprise is facing a number of continuing financial challenges that will require the City to raise rates over the next five years. Key challenges and drivers of future rate increases are summarized as follows.
2.7.1 Capital Improvements and Replacement of Aging Infrastructure Many of the City’s sanitation collection system pipelines and pump station s are aging and approaching the end of their useful lives. Some pipelines have significantly exceeded their estimated useful lives and are in need of replacement in upcoming years. To address high-priority sanitation system infrastructure needs, the City anticipates funding approximately $71.7 million of capital improvement projects over the next five years to address current deficiencies and support safe and reliable service as shown on the following table.
23 BARTLE WELLS ASSOCIATES 12
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 5 – 10-Year Capital Improvement Program
Project Description FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 FY 2033/34 FY 2034/35 Arroyo Lift Station Rehabilitation $100,000 $100,000
Building Roof Rehabilitation 450,000 450,000 Chlorine Contact Basin Rehab 1,600,000 1,500,000 3,100,000 Digester 3&4 Mixer & HE Install 3,680,000 -
East BNR Gates 320,000 320,000
East BNR Tank Repairs 1,200,000 1,200,000
Electrical Conveyance Replacement 2,000,000 2,000,000 Emergency Backup Effluent Discharge 320,000 1,267,881 1,587,881 FEB and Primary Sludge Pump Replacement 2,000,000 2,000,000 FEB Basin Repairs 1,100,000 1,100,000
Filter Equipment Replacement 250,000 3,000,000 3,250,000 Manhole Rehabilitation 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 2,500,000 MCC Replacement - Disinfection & Filters 420,000 4,200,000 4,620,000 Performance Management Program 50,000 50,000 100,000 Plant Water System Pump Replacement (3-Water) 3,600,000 3,600,000 Public Works Warehouse 150,000 1,250,000 1,400,000 Safety Improvements 280,000 280,000
SCADA Alarm Management Program 200,000 200,000 SCADA PlantPAX Migration 2,300,000 2,300,000
Secondary Clarifier 1&2 Installation 2,650,000 -
Secondary Effluent Diversion Structure Repair 150,000 500,000 650,000 SLR-East Los Angeles Ave Phase A 2,000,000 2,000,000 SLR-Sinaloa-Royal-LongCyn -
SLR-Tapo Cyn-Rebecca 500,000 500,000
WAS Pump Station Overhaul 190,182 633,940 824,123 West Blower Actuators 35,000 35,000
SLR >12" Project 1 1,850,000 1,850,000
SLR >12" Project 2 3,150,000 3,150,000
SLR >12" Project 3 2,100,000 2,100,000
SLR >12" Project 4 250,000 250,000
SLR LA Ave Phase B 2,100,000 2,100,000
SLR LA Ave Phase C 2,700,000 2,700,000
SLR 8-12" ACP CIPP Projects 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 40,000,000 Spot Repair of Sewers 1,000,000 1,000,000 2,000,000 Wood Ranch Pump Station Pump&Controls Replacement 150,000 181,483 331,483 Big Sky Pump Station - Pump Replacement 54,898 54,898 Digester Tank 1 & 2 Demolition and Removal 2,000,000 2,000,000 Plant Performance Assessment & Optimization 300,000 300,000 Tertiary Filter Rehabilitation 4,200,000 4,200,000 Lagoon Repair 200,000 1,500,000 2,000,000 1,500,000 5,200,000 Primary Clarifier Rehabilitation 380,000 1,700,000 1,700,000 3,780,000 DAFT Process Overhaul 1,882,215 1,882,215
Gravel Sump (Stormwatger Pump Station) Expansion 66,919 124,278 191,196 Sodium Bisulfite Station Improvements 107,035 198,778 305,813 Sodium Hypochlorite Station Improvements 86,444 160,539 246,983 Lift Station SCADA Integration 393,043 393,043 Infrastructure Survey and Assessment 316,970 316,970 Process Control Updates - SCADA Upgrade 1,000,000 1,000,000 Total 6,580,000 18,035,000 10,450,000 10,870,000 12,280,000 12,370,000 8,377,894 7,876,564 7,644,338 11,933,595 8,632,215 108,469,606 CIP (Inflated Dollars) 6,580,000 18,756,400 11,302,720 12,227,272 14,365,863 15,049,996 10,600,709 10,365,020 10,461,804 16,985,227 12,777,787 132,892,798 Total (Inflated Dollars) 6,580,000 18,756,400 11,302,720 12,227,272 14,365,863 15,049,996 10,600,709 10,365,020 10,461,804 16,985,227 12,777,787 132,892,798 5-Year Total: 71,702,251
Cost Escalation 1.000 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 5-Year Projection Extended Projection
10-Year Total
24 BARTLE WELLS ASSOCIATES 13
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
2.7.2 Ongoing Operating Cost Inflation
The City faces annual cost inflation due to annual increases in a range of expenses including sewage collection, sewage treatment, engineering, and administration, etc. On top of rate increases needed for capital improvements, annual rate increases are needed to keep revenues aligned with cost inflation and prevent rates from falling behind the cost of providing service. Wastewater cost inflation has historically been higher than the Consumer Price Index (CPI) for consumer goods and services. In recent years, inflation has reached forty-year highs with the CPI and Engineering News Record Construction Cost Index (ENR CCI) exceeding 7% in 2022. However, since hitting a peak in 2022, inflation has trended downwards back toward historical norms. For financial plan ning purposes, the rate study accounts for 3.5% annual cost escalation for operating and maintenance expenses and 4.0% annual capital cost escalation, in line with the average annual CIP and ENR Construction Cost Index increases over the past 15 years.
2.8 Outstanding Debt Service
Table 6 shows a schedule of outstanding sanitation enterprise debt by fiscal year . The sanitation enterprise has only one outstanding debt obligation, a 2019 Lease Agreement obtained for a contract with Energy Services Company (ESCO) for wastewater treatment plant improvements. The 2019 Lease Agreement was issued with a 20-year repayment term and an annual interest rate of 2.309%.
Table 6 – Outstanding Debt Service
2.9 Sanitation Enterprise Financial Projections
Bartle Wells Associates developed 10-year sanitation enterprise cash flow projections to identify future funding needs and evaluate sanitation rate increases. Table 7 on the following page shows the 10-year Fiscal Year Interest Principal Total Payment
2024/25 $684,969 $1,634,431 $2,319,400
2025/26 647,020 1,672,380 2,319,400 2026/27 608,190 1,711,209 2,319,399 2027/28 568,459 1,750,940 2,319,399 2028/29 527,805 1,791,594 2,319,399 2029/30 486,208 1,833,192 2,319,399 2030/31 443,644 1,875,755 2,319,399 2031/32 400,092 1,919,307 2,319,399 2032/33 355,529 1,963,870 2,319,399 2033/34 309,932 2,009,468 2,319,399 2034/35 263,276 2,056,124 2,319,399 2035/36 215,536 2,103,863 2,319,399 2036/37 166,688 2,152,711 2,319,399 2037/38 116,706 2,202,694 2,319,399 2038/39 65,563 2,253,836 2,319,399 2039/40 13,233 1,146,467 1,159,700 Source: "SEE REVISED-2019 Lease Agmt Debt Service Schedule." 25 BARTLE WELLS ASSOCIATES 14
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update sanitation enterprise cash flow projections. The projections incorporate the latest information available as well as several reasonable and slightly conservative assumptions. Key assumptions include:
Operating and maintenance costs are based on the 2024/25 budget and escalate at the annual rate of
3.5% to account for future cost inflation, in line with historical cost escalation. Growth from new development and/or redevelopment is conservatively projected at 0.30% for financial planning purposes.
Billed sanitation use is projected to remain constant at the same level as the prior fiscal year FY 2023/24 for FY 2024/25 and is projected to increase by 0.30% annually in future years, in line with projected growth.
Capital improvement costs are based on the City’s latest 5-Year Capital Improvement Program with projected capital costs in subsequent years ranging from $10 million to $18 million a year with 4.0% annual cost escalation.
In recent years, the sanitation enterprise has accrued a healthy level of fund reserves that include s some reserves that are available for capital projects that were deferred in recent years. Fund reserves increased in recent years as the City issued debt to fund approximately $34 million improvements to the wastewater treatment plant in lieu of drawing down its fund reserves. The City anticipate s drawing down over $16.6 million of fund reserves over the next 5 years to help fund a temporarily elevated level of capital improvements while rate increases are gradually phased in. The financial projections include approximately $2.3 million in annual debt service for the City’s contract with ESCO for recent and ongoing wastewater treatment plant improvements. For financial planning purposes, the financial projections assume a minimum fund reserve target equal to 50% of annual operating and maintenance costs, the average of the 5 -year capital improvement plan, and $17.75 million of plant asset costs for a Natural Disaster Emergency Fund. The basis for the Natural Disaster Emergency Fund is 20% of the City’s plant assets, which was derived upon applying Ventura County’s 2022 Hazard Mitigation estimates of asset and structural damage in the event of natural disasters. This reserve target is consistent with industry standards. Maintaining a prudent minimal level of fund reserves provides a financial cushion for dealing with unanticipated expenses, revenue shortfalls, as well as non-catastrophic and catastrophic emergency capital repairs. The fund reserve target will escalate over time as the City’s expenses and infrastructure gradually increase. The table also calculates annual debt service coverage on the City’s wastewater debt. Debt service coverage is calculated based on a) total revenues less operating and maintenance expenses, divided by b) annual debt service.
The financial projections estimate the City will incur budget deficits in the next five fiscal years while rate increases are gradually phased in. The projections show the City will begin to experience positive net revenues and balanced budgets starting FY 2030/31.
26 BARTLE WELLS ASSOCIATES 15
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 7 - 10-Year Cash Flow Projections
Current
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 FY 2031/32 FY 2032/33 FY 2033/34 FY 2034/35 Beginning Unrestricted Fund Balance $67,687,339 $71,515,447 $63,027,847 $62,235,188 $60,971,061 $58,029,906 $54,845,375 $56,566,807 $59,126,179 $62,235,857 $59,507,847 % Rate Revenue Increase 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Growth - % 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30%
REVENUES
Rate Revenue
Sewer Service Charges $29,184,316 $30,296,385 $31,450,829 $32,649,262 $33,893,363 $35,184,869 $36,525,589 $37,917,396 $39,362,239 $40,862,137 $42,419,188 Lift Station Surcharge 61,059 61,242 61,426 61,610 61,795 61,981 62,167 62,353 62,540 62,728 62,916 Total Rate Revenues 29,245,376 30,357,627 31,512,255 32,710,873 33,955,158 35,246,850 36,587,755 37,979,749 39,424,779 40,924,864 42,482,104 Non Rate Revenue
Interest on Investments (est 2.5%) 1,200,000 1,787,886 1,575,696 1,555,880 1,524,277 1,450,748 1,371,134 1,414,170 1,478,154 1,555,896 1,487,696 Environmental Compliance Program 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 325,000 Federal Assistance 1,686,981 - - - - - - - - - - Other Revenues 151,300 151,300 151,300 151,300 151,300 151,300 151,300 151,300 151,300 151,300 151,300 Total Non Rate Revenues 3,363,281 2,264,186 2,051,996 2,032,180 2,000,577 1,927,048 1,847,434 1,890,470 1,954,454 2,032,196 1,963,996 Total Revenues 32,608,657 32,621,813 33,564,251 34,743,053 35,955,734 37,173,897 38,435,190 39,870,219 41,379,233 42,957,061 44,446,101
EXPENSES
Operating Expenses
Salaries & Benefits $9,558,462 $9,893,008 $10,239,263 $10,597,638 $10,968,555 $11,352,454 $11,749,790 $12,161,033 $12,586,669 $13,027,203 $13,483,155 Maintenance 737,000 762,795 789,493 817,125 845,724 875,325 905,961 937,670 970,488 1,004,455 1,039,611 Utilities 1,108,000 1,146,780 1,186,917 1,228,459 1,271,455 1,315,956 1,362,015 1,409,685 1,459,024 1,510,090 1,562,943 Supplies & Services 4,010,296 4,150,656 4,295,929 4,446,287 4,601,907 4,762,974 4,929,678 5,102,216 5,280,794 5,465,622 5,656,919 Transfers & Reimbursements 3,667,391 3,795,750 3,928,601 4,066,102 4,208,416 4,355,710 4,508,160 4,665,946 4,829,254 4,998,277 5,173,217 Vehicle Replacement 800,000 284,625 294,587 304,897 315,569 326,614 338,045 349,877 362,122 374,797 387,915 Total Operating Expenses 19,881,149 20,033,614 20,734,791 21,460,508 22,211,626 22,989,033 23,793,649 24,626,427 25,488,352 26,380,444 27,303,760 Capital Expenses
Debt Service 2,319,400 2,319,400 2,319,399 2,319,399 2,319,399 2,319,399 2,319,399 2,319,399 2,319,399 2,319,399 2,319,399 CIP 6,580,000 18,756,400 11,302,720 12,227,272 14,365,863 15,049,996 10,600,709 10,365,020 10,461,804 16,985,227 12,777,787 Total Capital Expenses 8,899,400 21,075,800 13,622,119 14,546,671 16,685,263 17,369,396 12,920,108 12,684,420 12,781,204 19,304,626 15,097,186 Total Expenses 28,780,549 41,109,414 34,356,910 36,007,180 38,896,889 40,358,429 36,713,758 37,310,847 38,269,556 45,685,071 42,400,946 Revenues Less Expenses 3,828,108 (8,487,600) (792,659) (1,264,127) (2,941,154) (3,184,531) 1,721,432 2,559,373 3,109,678 (2,728,010) 2,045,154 Fund Reserve: 50% O&M + Average of 5-Year CIP +
Natural Disaster Emergency Fund 42,038,487 42,114,719 42,465,308 42,828,167 43,203,725 43,592,429 43,994,737 44,411,126 44,842,088 45,288,134 45,749,792 Ending Fund Balance (Revenues Less Expenditures) 29,476,960 20,913,128 19,769,880 18,142,894 14,826,181 11,252,946 12,572,070 14,715,054 17,393,769 14,219,713 15,803,210 5-Year Projection Extended Projection
27 BARTLE WELLS ASSOCIATES 16
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update The following chart shows a 5-year projection of sanitation enterprise revenues and expenses. The proposed rate increases are designed to put the City on a long -term path toward supporting balanced budgets while providing adequate funding for operations, maintenance, and ongoing rehabilitation and replacement of aging sanitation system infrastructure to support safe and reliable service.
Figure 2 – Sanitation Utility Projected Revenues & Expenses
$0
$10
$20
$30
$40
$50
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Sanitation Utility Projected Revenues & Expenses ($ millions) Operating Expenses Debt Service CIP Revenues
28 BARTLE WELLS ASSOCIATES 17
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
2.10 Sanitation Rate Projections
The cash flow projections indicate the need to raise sanitation rates by 3.5% each year for the next 5 years to support the sanitation utility’s projected operating and capital funding needs.
Table 8 – Projected Rate Increases
The 3.5% sanitation rate increases represent the overall level of annual rate increases proposed. The actual proposed rates also reflect some minor modifications to the rate structure designed to keep sanitation rates for all customer classes aligned with the cost of providing service. Due to these rate structure adjustments, t he impacts to customers’ monthly sanitation bills may vary a little based on customer class and billed usage.
FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30
3.50% 3.50% 3.50% 3.50% 3.50%
Projected Sanitation Rate Increases
29 BARTLE WELLS ASSOCIATES 18
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 3 COST OF SERVICE ANALYSIS
BWA derived updated sanitation rates that account for both a) the overall rate increases identified in the financial projections, and b) proposed rate structure modifications. The proposed rates are designed to equitably apportion and recover costs from the City’s customer base based on a cost -of-service methodology consistent with the Water Environment Federation ’s Manual of Practice 27, Financing and Charges for Wastewater Systems.
To assess the cost -of-service allocation to the City’s customer base, BWA f irst distinguished the costs associated with operating expenses and capital costs, using FY 2024/25 as the sample year for operating expenses and a 5-year average for capital costs. The table below summarizes the total costs -of-service that need to be recovered between operating expenses for FY 2024/25 and average annual capital costs.
Table 9 – Operations and Maintenance and Capital Cost of Service Allocation
Operating Expense Capital Cost Total Cost
($) ($) ($)
Revenue Requirements
O&M Expense $15,413,758 - $15,413,758 Transfers 3,667,391 - 3,667,391 Vehicles 800,000 - 800,000 Debt Service Requirements - 2,319,400 2,319,400 CIP (5-Year Average) - 12,801,000 12,801,000 Subtotal 19,881,149 15,120,400 35,001,549 Less Revenue Requirements Met from Other Sources
Lift Station Customers 299,289 61,059 360,348 Interest Earnings 1,200,000 - 1,200,000 Environmental Compliance Program 325,000 - 325,000 Federal Assistance 1,686,981 - 1,686,981 Other Revenues 151,300 - 151,300 Subtotal 3,662,570 61,059 3,723,629 Adjustments
Adjustment for Annual Cash Balance 2,392,892 - 2,392,892 Adjustment to Annualize Rate Increase - - - Subtotal 2,392,892 - 2,392,892 Cost of Service to be Recovered from Rates 13,825,687 15,059,340 28,885,027 30 BARTLE WELLS ASSOCIATES 19
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
3.1 Functional Cost Components
The next step in the cost-of-service analysis is to assign sanitation system costs in each allocation category for revenue recovery via the functional cost components of flow, BOD (biochemical oxygen demand), and TSS (total suspended solids). While there is no single correct approach for cost allocation, BWA believes that costs should be allocated within a reasonable range that reflects both a) underlying cost causation, to the extent such causation can reasonably be determined or estimated, and b) the policy preferences of the agency in cases where a range of reasonable app roaches can be justified. This process is intended to proportionately allocate costs to each functional component to determine the revenue requirement for each component.
Flow reflects costs associated with the volume of wastewater collected and treated. BOD reflects costs associated with treating BOD.
TSS reflects costs associated with treating TSS.
3.1.1 Allocation of Capital Costs
The allocation of capital costs is based on the breakdown of the City’s existing sanitation system fixed assets. BWA applied the weighted average of each functional cost component (Flow, BOD and SS) from the existing fixed assets to the current capital improvement program to derive the capital costs associated with each component. Table 10 illustrates the process that was followed.
31 BARTLE WELLS ASSOCIATES 20
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 10 – Allocation of Capital Costs
3.1.2 Allocation of Operating Expenses
The allocation of operating expenses applies the same percentage allocation found in the capital allocation to most operating expenses. The percentage allocation to Transfers and Reimbursements uses the average percentage allocation of all other operating expenses.
Volume BOD TSS Total Cost Volume BOD TSS
($) ($) ($) ($)
Plant Assets
Collection & Interceptor Sanitations 100% $48,737,522 $48,737,522 - - Lift & Pumping Stations 100% 364,948 364,948 - - Structures & Improvements 70% 15% 15% 11,726,129 8,208,290 1,758,919 1,758,919 Grit Removal 100% 1,269,958 1,269,958 - - Primary Settling Basin 80% 20% 34,093 27,274 - 6,819 Aeration Basins 70% 15% 15% 21,411,853 14,988,297 3,211,778 3,211,778 Secondary Settling Basin 80% 20% - - - - Disinfection 100% 15,884 15,884 - - Sludge Handling 50% 50% 1,434,353 - 717,176 717,176 Laboratory 100% 11,881 11,881 - - Other Treatment Equipment 70% 15% 15% 102,408 71,685 15,361 15,361 Outfall 100% 1,797,235 1,797,235 - - Vehicles 86% 7% 7% 315,617 271,431 22,093 22,093 General Plant 86% 7% 7% 1,565,430 1,346,269 109,580 109,580 Total Plant Assets 88,787,311 77,110,676 5,834,908 5,841,727 % Allocation 86.8% 6.6% 6.6%
Capital Projects
CIP 15,120,400 13,131,879 993,680 994,841 Total Capital Projects 15,120,400 13,131,879 993,680 994,841 Less Other Revenue
Lift Station Surcharges 61,059 53,029 4,013 4,017 Other Adjustments - - - - Subtotal 61,059 53,029 4,013 4,017 Net Capital Costs 15,059,340 13,078,850 989,667 990,823 Common to All Customers
32 BARTLE WELLS ASSOCIATES 21
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 11 – Allocation of Operations and Maintenance Expenses
3.2 Units of Service
The following table estimates the flows and loadings of each customer class based on analysis of FY 2023/24 water consumption data and wastewater strength assignments for each customer class. Residential flow of 155 gallons per day (gpd) and wastewater strength concentrations are based on estimates established in the previous Black & Veatch 2019 Sanitation Rate Study. Multi family, senior housing, and mobile home customers use the equivalent dwelling unit (EDU) assumptions found in the City’s most recent flow study1.
Commercial wastewater flows are estimated based on projected water use and the estimated flow returning to the sewer system. Wastewater strength assignments for commercial customer classes are also based on estimates established i n the previous Black & Veatch 2019 Sanitation Rate Study.
The resulting flow and strength projections for each class are shown on the following table and provide the basis for allocating costs and deriving equitable wastewater rates for each customer class.
1 2024 Sanitation Discharge Factors and Waterworks Demand Factors Study, page 26.
Volume BOD TSS Total Cost Volume BOD TSS
($) ($) ($) ($)
Operations & Maintenance1
Salaries & Benefits 76% 12% 12% $9,558,462 $7,233,099 $1,162,681 $1,162,681 Maintenance 87% 7% 7% 737,000 640,075 48,434 48,491 Utilities 87% 7% 7% 1,108,000 962,284 72,815 72,900 Supplies & Services 87% 7% 7% 4,010,296 3,482,892 263,548 263,856 Transfers & Reimbursements 2 80% 10% 10% 3,667,391 2,943,443 361,916 362,032 Vehicles 87% 7% 7% 800,000 694,790 52,574 52,636 Total O&M Expenses 19,881,149 15,956,584 1,961,969 1,962,596 Average All Other O&M 80.3% 9.9% 9.9%
Less Other Revenue
Miscellaneous Revenues 2 80% 10% 10% 3,662,570 2,939,574 361,440 361,556 Other Adjustments* 80% 10% 10% 2,392,892 1,920,532 236,142 236,218 Subtotal 6,055,462 4,860,106 597,583 597,773 Net Operating Expenses 13,825,687 11,096,479 1,364,386 1,364,822 1 Allocation of expenses abides by the Water Environment Federation (WEF) Manual. 2 Allocated as All Other O&M.
3 The BOD and TSS are surrogate parameters for wastewater strength that includes cost of removal of Total Kjeldahl Nitrogen (TKN).
Common to All Customers
33 BARTLE WELLS ASSOCIATES 22
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 12 – Units of Service
Units Contributed
Units Total
Volume Factor Loading Factor Loading
(varies) (hcf) (mg/L) (lbs) (mg/L) (lbs)
Residential
Single Family units 32,538 2,460,684 266 4,086,869 331 5,085,540 Multi Family units 4,041 229,200 266 380,671 331 473,692 Senior Housing units 99 4,118 266 6,839 331 8,510 Mobile Home units 818 37,117 266 61,646 331 76,710 Non-Residential
Office with LM (SCD) accounts 494 213,451 130 173,259 80 106,621 Office without LM (SDL) accounts 146 53,808 130 43,676 80 26,878 Commercial with LM (SCR) accounts 202 119,796 565 422,614 340 254,317 Commercial without LM (SRL) accounts 18 21,042 565 74,230 340 44,669 Restaurant with LM (SRR) accounts 39 35,077 1,000 219,016 600 131,410 Restaurant without LM (RRL) accounts 7 6,743 1,000 42,104 600 25,262 Café with LM (SRD) accounts 67 50,542 1,000 315,577 600 189,346 Café without LM (RDL) accounts 25 19,137 1,000 119,488 600 71,693 Commercial Units (SCU) accounts 14 9,145 266 15,189 331 18,900 Park Landscape with Restroom (SPL) accounts 5 420 266 698 331 868 Special SAP Conversion (SRS) accounts 1 84 266 140 331 174 Non-Residential (Other)
High Schools students 5,009 18,076 130 14,673 100 11,287 Other Schools students 12,066 29,032 130 23,565 100 18,127 Septage Hauler trucks 559 560 5,400 18,881 12,000 41,959 Total 3,308,031 6,019,134 6,585,961 BOD Loadings TSS Loadings
34 BARTLE WELLS ASSOCIATES 23
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
3.3 Cost of Service Allocations
3.3.1 Cost per Unit
The cost per unit for each functional allocation component was determined by dividing the total cost of service to each functional allocation component by the total units of service under each component.
Table 13 – Unit Rate Derivation
Total Cost Volume BOD TSS
Net Operating Expense $13,825,687 $11,096,479 $1,364,386 $1,364,822 Capital Costs 15,059,340 13,078,850 989,667 990,823 Total Cost of Service 28,885,027 24,175,328 2,354,053 2,355,646 Units of Service 3,308,031 6,019,134 6,585,961 Cost per Unit $7.31 $0.39 $0.36
% Allocations 83.7% 8.1% 8.2%
Common to All Customers
35 BARTLE WELLS ASSOCIATES 24
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
3.3.2 Distribution of Costs to Customer Classes
Revenue requirements for each customer class are calculated by multiplying the unit rates for flow, BOD and TSS from the volume of wastewater flow and loadings associated with each class.
Table 14 – Customer Class Cost Distribution
Total Cost Volume BOD TSS
Cost per Unit $7.31 $0.39 $0.36
per hcf per lbs per lbs
Single Family
Units 2,460,684 4,086,869 5,085,540
Allocation of Cost of Service $21,400,184 $17,982,851 $1,598,361 $1,818,972 Multi Family
Units 229,200 380,671 473,692
Allocation of Cost of Service $1,993,319 $1,675,012 $148,879 $169,428 Senior Housing
Units 4,118 6,839 8,510
Allocation of Cost of Service $35,812 $30,093 $2,675 $3,044 Mobile Home
Units 37,117 61,646 76,710
Allocation of Cost of Service $322,798 $271,252 $24,110 $27,437 Office with LM (SCD)
Units 213,451 173,259 106,621
Allocation of Cost of Service $1,665,812 $1,559,915 $67,761 $38,136 Office without LM (SDL)
Units 53,808 43,676 26,878
Allocation of Cost of Service $419,928 $393,233 $17,082 $9,613 Commercial with LM (SCR)
Units 119,796 422,614 254,317
Allocation of Cost of Service $1,131,723 $875,478 $165,283 $90,963 Commercial without LM (SRL)
Units 21,042 74,230 44,669
Allocation of Cost of Service $198,782 $153,774 $29,031 $15,977 Common to All Customers
36 BARTLE WELLS ASSOCIATES 25
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Total Cost Volume BOD TSS
Cost per Unit $7.31 $0.39 $0.36
per hcf per lbs per lbs
Restaurant with LM (SRR)
Units 35,077 219,016 131,410
Allocation of Cost of Service 389,004 256,345 85,656 47,002 Restaurant without LM (RRL)
Units 6,743 42,104 25,262
Allocation of Cost of Service $74,782 $49,280 $16,467 $9,036 Café with LM (SRD)
Units 50,542 315,577 189,346
Allocation of Cost of Service $560,510 $369,365 $123,421 $67,725 Café without LM (RDL)
Units 19,137 119,488 71,693
Allocation of Cost of Service $212,227 $139,853 $46,731 $25,643 Commercial Units (SCU)
Units 9,145 15,189 18,900
Allocation of Cost of Service $79,533 $66,832 $5,940 $6,760 Park Landscape with Restroom (SPL)
Units 420 698 868
Allocation of Cost of Service $3,653 $3,069 $273 $310
Special SAP Conversion (SRS)
Units 84 140 174 Allocation of Cost of Service $731 $614 $55 $62
High Schools
Units 18,076 14,673 11,287
Allocation of Cost of Service $141,879 $132,104 $5,738 $4,037 Other Schools
Units 29,032 23,565 18,127
Allocation of Cost of Service $227,867 $212,168 $9,216 $6,484 Septage Hauler
Units 560 18,881 41,959
Allocation of Cost of Service 26,485 4,093 7,384 15,008 Total Cost of Service $28,885,027 $24,175,328 $2,354,063 $2,355,636 Common to All Customers
37 BARTLE WELLS ASSOCIATES 26
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 4 RATE DERIVATION
4.1 Rate Design
The monthly rates were determined as follows:
Residential Monthly Fixed Rate: Total revenue requirement of the customer class / Total number of EDUs in said customer class / 12.
Commercial Usage Rate: Total revenue requirement of the customer class / Total flow of the customer class.
Commercial Monthly Fixed Rate: Usage rate * 7
Schools: Total revenue requirement/Total number of students / 12 Septage Hauling: Total revenue requirement / Total number of trucks
The following table displays the reallocated FY 2024/25 rates.
38 BARTLE WELLS ASSOCIATES 27
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 15 – Reallocated FY 2024/25 Rates
Current
2024/25 Rates
Reallocated
2024/25 Rates Difference
Monthly Residential ($/month)
Single Family $55.85 $54.81 ($1.04)
Multi Family 39.62 41.11 1.49 Senior Housing 30.96 30.14 (0.82) Mobile Home 1 39.62 32.88 (6.74) Monthly Non-Residential ($/month)
Office with LM (SCD) 54.03 54.63 0.60 Office without LM (SDL) 43.20 43.70 0.50 Commercial with LM (SCR) 65.68 66.13 0.45 Commercial without LM (SRL) 52.53 52.90 0.37 Restaurant with LM (SRR) 77.33 77.63 0.30 Restaurant without LM (RRL) 61.88 62.10 0.22 Café with LM (SRD) 77.33 77.63 0.30 Café without LM (RDL) 61.88 62.10 0.22 Commercial Units (SCU) 1 32.79 60.88 28.09 Park Landscape with Restroom (SPL) 1 35.22 60.88 25.66 Special SAP Conversion (SRS) 1 121.28 60.88 (60.40) Non-Residential Usage Rates ($/hcf)
Office with LM (SCD) 6.66 7.80 1.14 Office without LM (SDL) 5.32 6.24 0.92 Commercial with LM (SCR) 8.64 9.45 0.81 Commercial without LM (SRL) 6.92 7.56 0.64 Restaurant with LM (SRR) 10.63 11.09 0.46 Restaurant without LM (RRL) 8.50 8.87 0.37 Café with LM (SRD) 10.63 11.09 0.46 Café without LM (RDL) 8.50 8.87 0.37 Commercial Units (SCU) 9.38 8.70 (0.68) Other Non-Residential ($/Unit)
High Schools ($/student) 2.34 2.36 0.02 Other Schools ($/student) 1.56 1.57 0.01 Septage Hauling ($/750 gal Load) 47.85 47.41 (0.44) 1 The notable change in rates for these users reflect a revaluation of usage and a realignment of the cost of service for each customer class. 39 BARTLE WELLS ASSOCIATES 28
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update The following table shows the difference in collected revenue between the existing and reallocated revenues to be recovered from each customer class.
Table 16 – Reallocated Revenue Allocation by Customer Class
The reallocation resulted in rates and revenues captured by each customer class that vary from what is currently in place. This is because BWA reevaluated the sanitation usage and realigned the cost of service to serve each customer class.
Total Current
2024/25 Revenue
Total Reallocated
2024/25 Revenue % Difference
Fixed
Residential
Single Family $21,806,968 $21,400,184 -1.87%
Multi Family 1,921,253 1,993,319 3.75% Senior Housing 36,780 35,812 -2.63% Mobile Home 1 388,910 322,798 -17.00% Lift Station Customers
Non-Residential
Office with LM (SCD) 1,465,510 1,665,812 13.67% Office without LM (SDL) 368,265 419,928 14.03% Commercial with LM (SCR) 1,047,642 1,131,723 8.03% Commercial without LM (SRL) 182,893 198,782 8.69% Restaurant with LM (SRR) 374,235 389,004 3.95% Restaurant without LM (RRL) 71,846 74,782 4.09% Café with LM (SRD) 539,609 560,510 3.87% Café without LM (RDL) 204,043 212,227 4.01% Commercial Units (SCU) 1 80,258 79,533 -0.90% Park Landscape with Restroom (SPL) 1 2,113 3,653 72.85% Special SAP Conversion (SRS) 1
1,455 731 -49.80% High Schools ($/student) 140,639 141,879 0.88% Other Schools ($/student) 225,876 227,867 0.88% Septage Hauling ($/750 gal Load) 26,732 26,485 -0.92% Total Revenue: 28,885,027 28,885,027
1 The notable change in collected revenue for these users reflect a revaluation of usage and a realignment of the cost of service for each customer class. 40 BARTLE WELLS ASSOCIATES 29
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
4.2 Proposed Rates
Table 17 shows a 5-year schedule of proposed sanitation rates. Rate increases are scheduled to become effective on July 1 at the beginning of each fiscal year starting July 1, 2025. The rates reflect 3.5% overall annual rate increases as well as first year rate structure modifications designed to align rates with the cost of providing service. The rates are phased in over 5 years as gradually as possible to minimize the impact on ratepayers and are designed to ultimately support balanced budgets with full implementation.
Table 17 – Proposed Sanitation Rates
Current
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Monthly Residential ($/month)
Single Family $55.85 $56.73 $58.72 $60.78 $62.91 $65.11 Multi Family 39.62 42.54 44.03 45.57 47.16 48.81 Senior Housing 30.96 31.20 32.29 33.42 34.59 35.80 Mobile Home 1 39.62 34.04 35.23 36.46 37.74 39.06 Monthly Non-Residential ($/month)2,3
Office with LM (SCD) 54.03 56.54 58.52 60.57 62.69 64.88 Office without LM (SDL) 43.20 45.23 46.81 48.45 50.15 51.91 Commercial with LM (SCR) 65.68 68.44 70.84 73.32 75.89 78.55 Commercial without LM (SRL) 52.53 54.76 56.68 58.66 60.71 62.83 Restaurant with LM (SRR) 77.33 80.35 83.16 86.07 89.08 92.20 Restaurant without LM (RRL) 61.88 64.28 66.53 68.86 71.27 73.76 Café with LM (SRD) 77.33 80.35 83.16 86.07 89.08 92.20 Café without LM (RDL) 61.88 64.28 66.53 68.86 71.27 73.76 Commercial Units (SCU) 1 32.79 63.01 65.22 67.50 69.86 72.31 Park Landscape with Restroom (SPL) 1 35.22 63.01 65.22 67.50 69.86 72.31 Special SAP Conversion (SRS) 1 121.28 63.01 65.22 67.50 69.86 72.31 Other Non-Residential ($/Unit/month)
High Schools ($/Student) 2.34 2.44 2.53 2.62 2.71 2.80 Other Schools ($/Student) 1.56 1.63 1.69 1.75 1.81 1.87 Septage Hauling ($/750 Gal Load) 47.85 49.07 50.79 52.57 54.41 56.31 Non-Residential Usage Rates ($/hundred cubic feet)4
Office with LM (SCD) 6.66 8.08 8.36 8.65 8.95 9.26 Office without LM (SDL) 5.32 6.46 6.69 6.92 7.16 7.41 Commercial with LM (SCR) 8.64 9.78 10.12 10.47 10.84 11.22 Commercial without LM (SRL) 6.92 7.82 8.09 8.37 8.66 8.96 Restaurant with LM (SRR) 10.63 11.48 11.88 12.30 12.73 13.18 Restaurant without LM (RRL) 8.50 9.18 9.50 9.83 10.17 10.53 Café with LM (SRD) 10.63 11.48 11.88 12.30 12.73 13.18 Café without LM (RDL) 8.50 9.18 9.50 9.83 10.17 10.53 Commercial Units (SCU) 9.38 9.00 9.32 9.65 9.99 10.34 2 Billing is completed on a bi-monthly basis.
3 Non-residential fixed monthly rate includes a billed sewage allowance of 7 hundred cubic feet (hcf).
Proposed
1 The notable change in rates for these users reflect a revaluation of usage and a realignment of the cost of service for each customer class.
4 The City has two type of non-residential customers: 1) with a landscape meter and 2) without a landscape meter. With landscape meter represents customers that have separate irrigation meter and therefore billable sewage flow is assumed 100% of water consumption. Without landscape meter represents customers that don’t have a separate irrigation meter and therefore billable sewage flow is assumed to be 80% of water consumption. 41 BARTLE WELLS ASSOCIATES 30
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
4.2.1 Lift Station Surcharge
The City owns and maintains three sanitation lift stations, with appurtenant pumps and generators, which aid in the collection of sewage in the Wood Ranch and Big Sky developments.
Using the ENR CCI for the Los Angeles region , the study escalates the City’s existing lift station assets to November 2024 dollars. The surcharge was then derived by dividing the replacement cost of each asset by its useful life by the total number of EDUs the lift stations serve. Table 18 illustrates the process used to determine the surcharges.
Table 18 – Replacement Cost Calculation of Life Station Assets
The table below displays the proposed surcharges for the next five years. The duplex rate was determined using the assumption that multi family EDUs are 0.75 that of a single family customer.
Table 19 – Proposed Monthly Lift Station Charges
BWA reevaluated the cost basis of the lift station charges and determined such charges should be lowered.
Asset Type Useful Life (Yrs) Completed Year Original Cost ENR CCI Inflation1 Replacement Costs Big Sky Lift Station 40 2006 $425,356 180% $766,975 Pumps 15 2015 40,000 141% 56,268 Wood Ranch Lift Station 40 1986 70,000 286% 200,029 Generator & Electrical 40 2011 368,000 155% 570,092 Pumps & Controls 15 2011 120,000 155% 185,900 Total Cost of Service: 1,023,356 1,779,264 Asset Type Replacement Costs Useful Life (Yrs) EDUs Proposed Fee Big Sky Lift Station $766,975 40 450 $42.59 Pumps 56,268 15 450 8.33 Wood Ranch Lift Station 200,029 40 450 11.11 Generator & Electrical 570,092 40 450 31.65 Pumps & Controls 185,900 15 450 27.53 Annual Reallocated FY 2024/25 Rate: $121.20
1 Adjusted by ENR-CCI for the Los Angeles region for November 2024.
Community & Dwelling Type
Current
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Big Sky Lift Station
Single Family Residential $11.33 $10.45 $10.82 $11.20 $11.59 $12.00 Wood Ranch
Single Family Residential $11.33 $10.45 $10.82 $11.20 $11.59 $12.00 Multi Family Residential $8.34 $7.84 $8.11 $8.39 $8.68 $8.98 42 BARTLE WELLS ASSOCIATES 31
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
4.3 Bill Impacts
Table 20 presents the monthly bill impacts for residential customers under existing rates and the proposed rates.
Table 20 – Single Family Monthly Bill Impacts
Current
FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Monthly Residential ($/month)
Single Family $55.85 $56.73 $58.72 $60.78 $62.91 $65.11 $ Increase 0.88 1.99 2.06 2.13 2.20 % Increase 1.58% 3.51% 3.51% 3.50% 3.50%
Multi Family $39.62 $42.54 $44.03 $45.57 $47.16 $48.81
$ Increase 2.92 1.49 1.54 1.59 1.65 % Increase 7.37% 3.50% 3.50% 3.49% 3.50%
Senior Housing $30.96 $31.20 $32.29 $33.42 $34.59 $35.80 $ Increase 0.24 1.09 1.13 1.17 1.21 % Increase 0.78% 3.49% 3.50% 3.50% 3.50%
Mobile Home $39.62 $34.04 $35.23 $36.46 $37.74 $39.06
$ Increase (5.58) 1.19 1.23 1.28 1.32 % Increase -14.08% 3.50% 3.49% 3.51% 3.50%
Proposed
43 BARTLE WELLS ASSOCIATES 32
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update
4.4 Rate Survey
Figure 3 shows a regional survey of monthly sanitation service charges for a typical single family home .
The table shows both the City’s current rate as well the proposed sanitation rate effective July 1, 2025.
With the proposed rate increases, the City rates are projected to remain in the middle range compared to other regional agencies. Note that other regional agencies are also anticipating rate increases in upcoming years.
Figure 3 – Single Family Monthly Sanitation Rate Survey
$36.00 $39.17
$45.76 $46.57
$54.14 $55.85 $56.73
$67.42
$74.30 $76.84
$103.36
$112.25 $113.57
$0
$20
$40
$60
$80
$100
$120
City of Port
Hueneme
City of
Thousand
Oaks
LVMWD
(Calabasas)
Ventura
County
Waterworks
Dist 1
(Moorpark)
Camrosa
Water
District
City of Simi
Valley
(Existing)
City of Simi
Valley
(Proposed)
City of
Oxnard
City of
Camarillo
City of
Ventura
City of
Fillmore
TWSD
(Westlake)
City of Santa
Paula
Monthly Single Family Residential Sanitation Bills, 13 CCF Winter Use Fixed Charge Variable Charge
Current
Proposed
July 1, 2025
44 BARTLE WELLS ASSOCIATES 33
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 5 CAPACITY FEE UPDATE
5.1 Background and Objectives
The City currently levies sanitation capacity fees (also referred to as “Connection Fee”) on new connections within the City’s service area. These capacity fees are designed to recover the proportionate share of the costs for capacity in sanitation system infrastructure. This report updates the existing capacity fee based on the City’s adopted Ordinance Number 926, which establishes a method for adjusting the fee. In addition, BWA recommends applying the fee to accessory dwelling units (ADUs) in compliance with Government Code Section 65852.2, 65852.22 and Health & Safety Code Section 17980.122, which were recently amended on January 1, 2020.
Key objectives of the study include:
Update the existing sanitation capacity charge to:
o Recover the costs of infrastructure in current dollars; o Be consistent with industry-standard practices and methodologies; o Comply with applicable law.
This report presents capacity fee recommendations for City consideration.
5.2 Government Code
Capacity fees are governed by California Government Code (“Code”) section 66013. Capacity fees, which are imposed on new or upsized connections, are governed by different rules and regulations than development impact fees. Section 66013 also identifies various accounting requirements for capacity fee revenues, notably that such revenues cannot be co-mingled with other revenues and must be used solely for the purpose for which the fee was imposed. Section 66016 of the Code identifies the procedural requirements for adopting or increasing a water or sewer capacity charge.
5.3 Capacity Fee Derivation
This section details the calculation of the updated capacity fees under the City’s adopted annual adjustment tied to the Engineering News-Record Construction Cost Index (Los Angeles region).
Previous ordinances, including Number 926, adopted an annual adjustment to the City’s sanitation connection fee of:
Adjusted Fee = Connection Fee x ENR (Current)
ENR (Previous)
45 BARTLE WELLS ASSOCIATES 34
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Where: ENR (Current) = The Engineering News Record Construction Cost Index for Los Angeles for the year of adjustment and ENR (Previous) = The Engineering News Record Construction Cost Index for Los Angeles which is tied to the Connection Fee being adjusted.
As part of the City’s practice, the current capacity charges from 2016 will be adjusted by this formula using the Los Angeles ENR CCI from January 2016 as the previous year, and November 2024 as the current year. The resulting proposed capacity charges are in Table 21 below.
The newly proposed ADU fee is proposed to be charged based on square footage of floor area, in compliance with Government Code 65852.2, which mandates that sanitation capacity fees be proportionate to the burden of the proposed accessory dwelling unit, based upon either its square feet or the number of its drainage fixture unit (DFU) values, as defined in the Uniform Plumbing Code.
46 BARTLE WELLS ASSOCIATES 35
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Table 21 – Proposed Sanitation Capacity (Connection) Fees for New Customers
5.4 Fee Survey
Figure 4 shows a regional survey of sanitation capacity fees for a typical single family home. The table shows both the City’s current charge as well as the proposed sanitation fee.
Current1 Proposed1
Service Charges
Residential
Single Family Detached/Attached $4,374 $6,131
Single Family Detached/Attached (converting to City sewer system) 2,659 3,727 Multi Family (per unit) 3,281 4,599 Mobile Home & Sr. Citizen Housing (for 35+ dwelling units) 2,624 3,678 Accessory Dwelling Unit ($/sq. ft of floor area) 2,3 - 2.79 Office Buildings (per 1,000 sq ft)
Medical Office 2,625 3,679
Medical Office Using Digital X-Ray 1,444 2,024 All Other Office Buildings 1,444 2,024 Retail Buildings
Retail Shops & Stores up to 10,000 sq ft (cost per 1,000 sq ft) 1,444 2,024 Retail Shops & Stores over to 10,000 sq ft (cost per additional 1,000 sq ft) 963 1,350 Pet Grooming (per shampoo bowl) 875 1,226 Beauty/Barber Shop (per shampoo bowl) 875 1,226 Self Service Laundry (per machine) 1,750 2,453 Restaurants
Restaurants, 42 seats or less 11,373 15,941 Restaurants, per additional seat over 42 274 384 Restaurants, Bars, Cocktail Lounges (per seat) 263 369 Food Establishments, 50 seats or less & not considered full service restaurants (per seat) 114 160 Hotels/Motels
Hotel/Motel without kitchen (per unit) 1,444 2,024 Hotel/Motel with kitchen (per unit) 2,406 3,372 Automobile Service Station
Auto Service & Repair (per 1,000 sq ft) 1,444 2,024 Per Restroom 1,444 2,024
Parks
Per Water Closet or Urinal 1,444 2,024 Schools/Hospitals
School - Elementary/Nursery/etc, 60 students or less 4,374 6,131 Each Additional Student (cost after 60 students) 74 104 School - Junior High School, 50 students or less 4,374 6,131 Each Additional Student (cost after 50 students) 88 123 School - High School, 30 students or less 4,374 6,131 Each Additional Student (cost after 30 students) 145 203 Hospitals - Includes Admin Office Support (per bed) 2,625 3,679 Churches/Theaters/Auditoriums
Churches/Theaters/Auditoriums of 110 seats 4,374 6,131 Each Additional Seat over 110 seats 40 56 2 Based on 2,200 square foot of the typical single family home. 3 As per Section 65852.2 of the Government Code, an accessory dwelling unit (ADU) including more than 150 square feet of expansion beyond the same physical dimensions as the existing accessory structure, or is considered to be a detached unit, is susceptible to being charged a distinctive ADU capacity fee.
1 The proposed charges were escalated using the ENR CCI for the Los Angeles region to November 2024. The current year was escalated based on the former January 2016 capacity fee implementation date and not escalated as part of the 2019 rate study. 47 BARTLE WELLS ASSOCIATES 36
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update Figure 4 – Single Family Capacity (Connection) Fee Survey for New Customers
5.5 Recommended Annual Adjustments
The proposed capacity fee is recommended to continue to include an annual adjustment tied to the Engineering News-Record Construction Cost Index (Los Angeles region). The Engineering News-Record Construction Cost Index (Los Angeles region) provides a measure of changes in the prices for labor and construction materials. Annual capacity fee increases tied to the index are intended to retain the purchasing power of capacity fee revenue.
$4,374 $4,641 $4,675
$5,256
$5,951 $6,032 $6,131
$11,135
$15,336
$17,650
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
City of Simi
Valley
(Existing)
City of
Camarillo
Camrosa
Water
District
City of
Oxnard
Ventura
County
Waterworks
Dist 1
(Moorpark)
City of
Ventura
City of Simi
Valley
(Proposed)
City of
Thousand
Oaks
Las Virgenes
Municipal
Water
District
Triunfo
Water and
Sanitation
District
(Westlake)
Residential Sanitation Capacity Fee Survey
Conducted October 2024
Current
Proposed
48 BARTLE WELLS ASSOCIATES 37
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 6 ANNEXATION FEE UPDATE
6.1 Background
The City currently levies an annexation fee. Ordinance No. SD-50 states “The owner of land annexed to the District shall pay an annexation fee equal to the prorate share of the District facilities on an acreage basis. Said value shall be established by the District Engineer based on the value of the District’s fixed assets for the year preceding annexation or in the last published year-end figures, whichever is more current and available.” The annexation fee is computed in accordance with the following formula:
6.2 Proposed Annexation Fee
The table below follows the adopted formula to calculate the resulting proposed annexation fee.
Table 22 – Proposed Annexation Fee for New Customers
This proposed fee is based on the latest available data as of December 23, 2024. The annexation fee is subject to being updated once more data becomes available.
Annexation Fee = District Net Fixed Assets * 0.4
(per acre) Total District Area in Acres
Annexation Fee Calculation
Net Investment in Capital Assets 1 $68,059,610
Sanitation District Acreage (in acres) 2 11,277
Proposed Annexation Fee (per acre): 3 $2,414
1 Source: FY23 ACFR, pg 70.
2 Source: "Water and Wastewater Demand Factors Study_FINAL_July24,' pg 34. 3 Based on the adopted annexation fee formula noted in Ordinance No. SD- 50, where the computed annexation fee per acre = (District Net Fixed Assets *
0.4) / Total District Area in Acres.
49 BARTLE WELLS ASSOCIATES 38
City of Simi Valley FY 2026-2030 Sanitation Rate Study and Capacity Fee Update 7 CONCLUSION AND RECOMMENDATIONS
7.1 Conclusion
This sanitation rate study report presents a comprehensive review of the City’s sanitation revenue requirements, rates, capacity fees and annexation fee . Financial projections indicate the need for relatively small, gradual annual sanitation rate increases to keep up with cost inflation and support funding for the City’s capital improvement program while maintaining prudent levels of fund reserves. While the sanitation enterprise is projected to experience temporary budget deficits while rate increases are being phased in, the proposed rates are designed to ultimately support balanced budgets and adequate ongoing funding stream to enable the City to address future fundings needs of aging infrastructure.
7.2 Recommendations
BWA recommends that the City adopt the rates and fees shown in this report to fund its operati ng and capital needs . BWA also recommends that the City review and update its sanitation rate study and capacity fee study every five years and/or concurrent with Master Plan Updates or other major changes to operating and/or capital expenses.
50 PROPOSED SANITATION RATES:
The following table shows proposed residential and non -residential service charges, as well as usage charges for non-residential customer classes, for implementation beginning July 1, 2020 and each subsequent year commencing on July 1 st. The rate analysis began with a cost of service analysis to ensure equitable cost allocations among customer classes as required by Proposition 218 and California Government Code Section 54999.
PROPOSED FIVE-YEAR SANITATION RATES
MONTHLY FIXED RATES
NOTICE OF PUBLIC HEARING
The City of Simi Valley will hold a public hearing on Monday, October 28, 2019 , to decide whether to proceed with the sanitation rate increase described in this notice. The purpose of this notice is to give the owner or resident residing within the City of Simi Valley’s Sanitation service area information about the proposed rate changes . If the City Council adopts these proposed rates, then rates for all customers will change beginning on July 1, 2020.
October 28, 2019, at 6:30 p.m.
CITY OF SIMI VALLEY - CITY HALL
COUNCIL CHAMBER
2929 Tapo Canyon Road
Simi Valley, CA 93063
Please open and review for more detailed information
Una versión en español de este aviso está disponible llamando al Departamento de Obras Públicas al 805-583-6786.
PROPOSED FIVE-YEAR SANITATION RATES
VARIABLE RATES – PER USAGE
ABBREVIATIONS:
FY Fiscal Year
LM Landscape Meter
MO Month
HCF Hundred Cubic Feet
PUBLIC WORKS DEPARTMENT
SANITATION SERVICES DIVISION
2929 Tapo Canyon Road
Simi Valley, CA 93063
PROPOSED SANITATION RATE INCREASE
CURRENT FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
RESIDENTIAL: ($/MO.)
Single Family $38.58 $41.24 $44.48 $47.97 $51.76 $55.85 Multi-Family $26.88 $29.25 $31.55 $34.03 $36.72 $39.62
Senior Housing $20.79 $22.86 $24.65 $26.59 $28.69 $30.96 Mobile Home $26.88 $29.25 $31.55 $34.03 $36.72 $39.62
NON-RESIDENTIAL: ($/MO.)
Office with LM* (SCD) $33.55 $39.89 $43.02 $46.40 $50.07 $54.03 Office without LM* (SDL) $26.85 $31.91 $34.41 $37.11 $40.04 $43.20 Commercial with LM* (SCR) $40.92 $48.49 $52.30 $56.41 $60.87 $65.68 Commercial without LM* (SRL) $32.74 $38.79 $41.84 $45.12 $48.68 $52.53 Restaurant with LM* (SRR) $48.29 $57.11 $61.59 $66.42 $71.67 $77.33 Restaurant without LM* (RRL) $38.64 $45.69 $49.28 $53.15 $57.35 $61.88 Café with LM* (SRD) $48.29 $57.11 $61.59 $66.42 $71.67 $77.33 Café without LM* (RDL) $38.64 $45.69 $49.28 $53.15 $57.35 $61.88
CURRENT FY
2020-21
FY
2021-22
FY
2022-23
FY
2023-24
FY
2024-25
NON-RESIDENTIAL USAGE RATE: ($/HCF OF WATER USE)
Office with LM* (SCD) $4.84 $4.91 $5.30 $5.72 $6.17 $6.66 Office without LM* (SDL) $3.85 $3.93 $4.24 $4.57 $4.93 $5.32 Commercial with LM* (SCR) $5.86 $6.38 $6.88 $7.42 $8.01 $8.64 Commercial without LM* (SRL) $4.71 $5.11 $5.51 $5.94 $6.41 $6.92 Restaurant with LM* (SRR) $6.92 $7.85 $8.47 $9.13 $9.85 $10.63 Restaurant without LM* (RRL) $5.53 $6.28 $6.77 $7.30 $7.88 $8.50 Café with LM* (SRD) $6.92 $7.85 $8.47 $9.13 $9.85 $10.63 Café without LM* (RDL) $5.53 $6.28 $6.77 $7.30 $7.88 $8.50 OTHER VARIABLE RATES ($/UNIT)
High Schools ($/STUDENT) $1.28 $1.72 $1.86 $2.01 $2.17 $2.34 Other Schools ($/STUDENT) $0.85 $1.15 $1.24 $1.34 $1.45 $1.56 Septage Hauling ($/750 GAL LOAD) $30.08 $35.34 $38.11 $41.10 $44.35 $47.85 Wood Ranch/Big Sky SFR Lift Fee $107.47 $100.43 $108.32 $116.82 $126.05 $136.00 Duplex Unit Lift Fee $74.90 $73.90 $79.70 $85.95 $92.75 $100.07 51 EXHIBIT 2
MONTHLY SINGLE-FAMILY RESIDENTIAL SEWER SERVICE RATE
COMPARISON TO NEIGHBORING COMMUNITIES
CITY/
DISTRICT Moorpark Thousand
Oaks
Port
Hueneme
SIMI
VALLEY
(Current)
SIMI
VALLEY
(Proposed)
Santa
Barbara Camarillo Oxnard Ojai Ventura Fillmore Santa
Paula
MONTHLY
SEWER
RATE
$27.00 $29.37 $36.00 $38.58 $41.34 $53.53 $54.73 $54.89 $55.36 $55.48 $103.36 $118.56 TOTAL: $28,385,100
PROPOSED SANITATION RATE INCREASE:
The Simi Valley City Council will be holding a public hearing to decide whether to proceed with the proposed sanitation rate increase. The meeting will be at 6:30 p.m. on Monday, October 28, 2019. At the hearing, if less than a majority of property owners protest the rate increase, the City Council will consider increasing Sanitation Rates for the following five fiscal years, e ffective initially on July 1, 202 0. A City fiscal year is July 1 through June 30. The five fiscal years to be considered will be Fiscal Year 202 0-21 through Fiscal Year 202 4-25. This notice contains information about the proposed increase and provides instructions on your opportunity to protest the increase.
WHY IS THE CITY CONSIDERING A RATE INCREASE?
The City Council will be considering the need to fund capital projects to sustain the infrastructure, meet increas ing operational expenses, and bolster reserve accounts.
INFRASTRUCTURE AND REVENUE NEEDS:
The City is deliberate when determining infrastructure maintenance , including repair and replacement priorities. A comprehensive review of infrastructure needs were co mpleted to determine what projects are justified and necessary before undertaking major repair and replacement projects. The 2019 Sewer System Reliability Assessment and Financial Plan Update reviewed and assessed the condition of the assets within the Wa ter Quality Control Plant (WQCP) and the public sewer system serving over 125,000 residents in a 47 square mile service area and included repair priority and estimated costs. The 2019 Sewer Rate Study identified the cost to provide the utility service to residential and non-residential customers within the Simi Valley Sanitation service area and the fees to cover costs.
The increase in rates is justified by the need to fund the increased cost for operation and maintenance, capital expenses, and reserve funding.
PROJECTED SANITATION EXPENDITURES (FY 2020-21)
HOW CAN I PROTEST THIS RATE INCREASE?
California Constitution Article XIII D Section 6 (Proposition 218) prohibits the City from increasing fees if a majority of affected property owners protest the increase before the conclusion of a required public hearing. Only one written protest per affected property may be counted. Written p rotests must be received by the City Clerk’s Office prior to the public hearing scheduled to commence at 6:30 p.m. on Monday, October 28, 2019.
A protest must identify the affected property (by street address or assessor’ s parcel number) and include the signature of the property owner or utility customer. Telephone, e-mail, and fax protests will not be accepted.
YOU MAY USE THIS FORM TO PROTEST THE PROPOSED RATE INCREASE I protest this proposed increase to Sanitation fees.
Property Address or Assessor’s Parcel Number (APN):
Signature:
You may mail your completed form in a stamped envelope to:
CITY OF SIMI VALLEY, CITY CLERK’S OFFICE
2929 Tapo Canyon Road, Simi Valley, CA 93063
or : drop-off the form to the City Clerk before the
Public Hearing on Monday, October 28, 2019
OPERATION AND
MAINTENANCE
$14,368,500
DEBT SERVICES
$2,392,200
OTHER OPERATING
EXPENSES
$1,881,000
CAPITAL PROJECTS
$9,743,400
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
Moorpark Thousand
Oaks
Port
Hueneme
Simi Valley
(Current)
Simi Valley
(Proposed)
Santa
Barbara
Camarillo Oxnard Ojai Ventura Fillmore Santa
Paula
52