DISCUSSION:
The City’s budget for sanitation services includes sewer service charges and other revenues and expenses for the administration, maintenance, debt service and capital costs of the City’s Sanitation District (District) and the costs of the San Elijo JPA (SEJPA) including wastewater treatment, laboratory services, ocean outfall, pump stations, capital projects and debt service.
In 2020, the City, with assistance from Raftelis Financial Consultants, conducted a 5- year sewer rate and revenue study. The sewer rate increase history for the last ten fiscal years between FY 2016 to FY 2025 is illustrated in the following table:
FY per EDU % increase
2016 618.14 2.5%
2017 633.59 2.5%
2018 649.43 2.5%
2019 665.67 2.5%
2020 682.30 2.5%
2021 682.30 0.0%
2022 682.30 0.0%
2023 682.30 0.0%
2024 682.30 0.0%
2025 682.30 0.0%
Sewer Service Charge History
Per the direction of the City Council, there were no rate increases for FY 2021 through FY 2025. This direction was based on the results of the previous study for projected revenues, expenditures and reserve balances, and as a relief measure that could be provided to residents and businesses as related to the impacts of COVID-19. During these years, revenues and expenditures stayed fairly consistent, with a slight reduction to reserves. During this same period, the City maintained all bond obligations, while continuing to maintain a reserve balance well in excess of the target set by the Sanitation Reserve Policy.
The 2024 Sewer Rate Study with Raftelis uses financial data provided by the City and SEJPA, Raftelis then projected the City’s sanitation revenues, expenses, and capital improvement project (CIP) costs for the next five-year period through FY 2030.
In preparing the five-year projection, consistent escalation factors, depending on the category of expense, were used to project operating expenses. These categories include salaries and fringe benefits, materials, supplies, and services, and internal service charges. These assumptions have been discussed with SEJPA for general concurrence based on preliminary budget information. The CIP costs used in this study were also provided by SEJPA based on the most current capital project planning March 12, 2025
Annual Sewer Service Charge for FY 2026
available and debt service payments for the City’s bond obligations were based on principal and interest payments listed in the bond’s amortization tables.
The following growth factors were used to project the future increased Operating and Maintenance Cost for City Operations as determined by City Staff and verified by Raftelis:
Category % increase
General 3.0%
Salaries & Benefits 7.0%
Utilites 6.3%
Capital 5.3%
Depreciation 3.5%
Actual known amounts were used for debt service payments, receivables for interest and principal payments due to the Sanitation Fund for the Stevens Loan, and available bond funds for CIP projects. For FY 2025, the amount due to be repaid to the Sanitation Fund from the General Fund will be approximately $445,600. This loan will be repaid in full in FY 2026.
Miscellaneous income remains flat in the analysis. Interest income from Chandler Investments is calculated on the FY 2025 budget with an inflation factor of 2%.
The Council consideration of the sewer fees can be focused on two areas: use of reserves and the SEJPA operating and capital expenses as overseen through the City’s role on the SEJPA Board. The following section will go into more background and detail for these areas of consideration.
Fee Proposals for Consideration:
The City has prepared several scenarios for the Council to review when considerating possible rate adjustments for the next five years. This includes a variable expenditure by the City provided by SEJPA for the projected capital improvements needed based on preliminary capital planning currently underway by the District. The analysis includes a forecasting of the Sanitation Fund’s operating reserves for a five-year period from FY 2026 to FY 2030 resulting in three rate increase scenarios with two capital expense assumptions and three reserve fund usage assumptions. For all of these scenarios the annual rate increase is assumed to be the same across all five fiscal years. The following is a summary of the assumptions, the rate increase in percentage across all five years, and the year 1 (FY26) EDU cost (and differential as compared to the existing FY25 cost) for each scenario.
1) Assumptions: Variable (reduced in FY26 & FY 27) SEJPA CIP contribution and maximum draw down of reserves – 6.5% rate increase year over year for five years; FY26 EDU rate increases to $726.66 (increase of $44.36 over existing);
March 12, 2025
Annual Sewer Service Charge for FY 2026
2) Assumptions: Variable (reduced FY26 & FY 27) SEJPA CIP contribution and moderate draw down of reserves – 8% rate increase year over year for five years; FY26 EDU rate increases to $736.88 (increase of $54.58 over existing).
3) Assumptions: Variable (reduced in FY26 & FY 27) SEJPA CIP contribution and no draw down of reserves – 11% rate increase year over year for five years; FY26 EDU rate increases to $757.36 (increase of $75.06 over existing);
4) Assumption: Full (projected) SEJPA CIP contribution and maximum draw down of reserves – 6.5% rate increase year over year for five years; EDU rate increases to $726.66 (increase of $44.36 over existing); 5) Assumption: Full (projected) SEJPA CIP contribution and moderate draw down of reserves – 8% rate increase year over year for five years; EDU rate increases to $736.88 (increase of $54.58 over existing); 6) Assumption: Full (projected) SEJPA CIP contribution and limited draw down of reserves over first three years – 11% rate increase year over year for five years; FY26 EDU rate increases to $757.36 (increase of $75.06 over existing).
The following tables illustrate the six scenarios: % rate increase, FY26 rate, $ rate increase, FY26 SEJPA CIP, $ and % increase over FY 25, FY25 Ending Fund Balance, FY30 Ending Fund Balance, and net change between FY25 and FY30 in $ and %:
$ % $ %
1 6.5% 726. $ 66 $ 44.36 $ 319,422 50.66% 12,581,267 $ $ 8,184,831 $ (4,396,436) -34.9% 2 8.0% 736.88 $ $ 54.58 $ 319,422 50.66% 12,581,267 $ $ 9,736,487 $ (2,844,780) -22.6% 3 11.0% 757.36 $ $ 75.06 $ 319,422 50.66% 12,581,267 $ $ 13,025,717 $ 444,450 3.5% 4 6.5% 726.66 $ $ 44.36 $ 772,856 122.56% 12,581,267 $ $ 7,434,093 $ (5,147,174) -40.9% 5 8.0% 736.88 $ $ 54.58 $ 772,856 122.56% 12,581,267 $ $ 8,985,749 $ (3,595,518) -28.6% 6 11.0% 757.36 $ $ 75.06 $ 772,856 122.56% 12,581,267 $ $ 12,274,979 $ (306,288) -2.4% FY 2026
Rate
Scenarios % rate Change
increase
$ Rate
increase
FY 2025
Ending FB
FY 2030
Ending FB
EDU Rate Operating Fund Balance
Increase over FY25
SEJPA CIP
Fee Benchmarking:
The cost per EDU existing and projected based on the scenarios can be compared against neighboring jurisdictions in the San Diego region for benchmarking. Raftelis conducted a survey of current sewer rates showing a range of $467.88 to $2,067.36.
These survey results have been compared against the three rate increase scenarios described above.
March 12, 2025
Annual Sewer Service Charge for FY 2026
Below are the survey results compared to a 6.5% rate increase.
Below are the survey results compared to an 8% rate increase.
Lastly, below are the survey results compared to an 11% rate increase. $2,500
$2,000
$1,500
$1,000
$500
$0
$2,500
$2,000
$1,500
$1,000
$500
$0
$2,500
$2,000
$1,500
$1,000
$500
$0
$2,181
$2,181
$2,181
RESIDENTIAL - 3/4",
Assumes 9 hcf/month water use with 85% return to sewer= 8 hcf monthly sewer discharge
$834 $727 $725 $723 $708 $682 $663
RESIDENTIAL - 3/4",
Assumes 9 hcf/month water use with 85% return to sewer= 8 hd monthly sewer discharge
$725 $723 $708 $682 $663 $646 $635
$517
RESIDENTIAL - 3/4",
Assumes 9 hcf/month water use with 85% return to sewer= 8 hcf monthly sewer discharge
S723 $708 $682 $663 $646 $635
$517
March 12, 2025
Annual Sewer Service Charge for FY 2026
Sanitation Fund Reserves:
With respect to reserves, the City Sanitation Reserve Policy provides reserve minimums, reserve targets, and acceptable uses for Operating Capital Reserve, Debt Service Reserve, Emergency Capital & Equipment Reserve, and Asset Replacement Reserve.
• Operating Capital Reserve
o Minimum reserve - 30% of annual operating expenditures o Target reserve – 65% of annual operating expenditures • Debt Service Reserve
o Minimum reserve – 50% of annual debt service payments o Target reserve – 100% of annual debt service payments • Emergency Capital & Equipment Reserve
o Minimum reserve – 10% of total depreciable assets
o Target reserve – 15% of total depreciable assets
• Asset Replacement Reserve
o Minimum reserve – 105% of annual asset depreciation
o Target reserve – 115% of annual asset depreciation
City has obligations for maintenance of the reserves at the limits above. Presently, the reserves are projected at $12,581,267 for FY 2025, $5,351,102 above the total target of $7,230,165.
The chart below illustrates the FY 2030 Total Target Reserve compared to the FY 2030 Ending Fund Balance and the $ and % above(below) the Target:
$ %
1 $ 8,316,720 $ 8,184,831 $ (131,889) -1.6%
2 $ 8,316,720 $ 9,736,487 $ 1,419,767 17.1%
3 $ 8,316,720 $ 13,025,717 $ 4,708,997 56.6%
4 $ 8,316,720 $ 7,434,093 $ (882,627) -10.6%
5 $ 8,316,720 $ 8,985,749 $ 669,029 8.0%
6 $ 8,316,720 $ 12,274,979 $ 3,958,259 47.6%
Scenarios
Operating Fund Balance Target
FY 2030
Target
FY 2030 Fund
Balance
Above(below) Target
SEJPA Operations and Capital Projections:
With respect to the City’s role on SEJPA, the City has two seats of the four-person SEJPA Board. The SEJPA annual budget preparation and approval is a separate process guided by SEJPA staff for the Board. This annual process is underway with preliminary projections available as provided by SEJPA staff. Additionally, a capital planning effort – facilities master plan – is underway to review the current condition of assets and programming for a five-year capital plan that will go before the SEJPA Board March 12, 2025
Annual Sewer Service Charge for FY 2026
in late 2025 – early 2026. The following section describes the coordination with SEJPA on the operational and capital programming and expenses projected for this study.
SEJPA Operational Expenses (OpEx)
Operational expenses include personnel, supplies, maintenance and services for wastewater treatment, laboratory services, ocean outfall, Solana Beach pump station, Solana Beach urban and stormwater services, and Solana Beach generator maintenance services.
While there is room for consideration by the SEJPA Board on these projections through the budget process, increases in costs are typically related to inflation to those operational costs rather than expansion of operations. The assumptions used in the study for OpEx were provided by SEJPA, as illustrated in the following table:
FY Amount % increase
2025 2,301,815 $
2026 2,474,451 $ 7.5%
2027 2,647,663 $ 7.0%
2028 2,819,761 $ 6.5%
2029 2,988,946 $ 6.0%
2030 3,153,338 $ 5.5%
SEJPA O&M Cost
To help calibrate the high variability we have seen in actual costs over the last couple of years since COVID, City Staff recommends completion of a new Sewer Rate Study be completed in FY 2028, which also aligns with the City of Encinitas’ Sewer Rate Study and can provide a more collaborative approach to these SEJPA expenditures.
SEJPA Capital Expenses (CapEx)
SEJPA’s Capital Improvement Program (CIP) prioritizes environmental protection, fiscal responsibility, and community benefits including the safety of their staff and the public when developing and ranking agency infrastructure needs. The District strives to replace aging assets prior to failure or significant decline in service performance and invest in energy efficiency and sustainable practices. Over the last five years, significant capital projects included:
• Upgrading pretreatment systems to improve performance during intense storms, increase operational efficiency, and allow the capture and reuse of stormwater; • Expanding our recycled water system to decrease reliance on imported water and improve local sustainability;
• Replacing the land portion of the ocean outfall system to ensure treated flows safely reach the ocean;
March 12, 2025
Annual Sewer Service Charge for FY 2026
• Modernizing the Water Campus to meet the needs of our agency, improve public access, and provide beneficial amenities to the communities we serve; • Upgrades to SEJPA’s Supervisory, Control, and Data Acquisition (SCADA) system and operator control space; and
• Building 600 kW photovoltaic solar energy system to meet up to 25% of the water campus power needs with renewable energy.
The Capital Program is funded through a combination of sources with costs allocated to programs based on infrastructure benefits and in accordance with the capacity share owned/leased by contributions agencies. Funding sources include:
• Annual capital contributions from customer agencies for shared facilities (i.e., Wastewater Program, Ocean Outfall Program, Laboratory Program); • Annual capital contributions by specific customer agencies for special projects undertaken by SEJPA (i.e., Pump Station upgrades);
• Recycled Water Revenues (recycled water sales and incentive programs) that fund the recycled water reserve, a portion of which is designated for recycled water capital improvements;
• Financing including bond measures and private loans; and • Grants from State of California and the United States Federal Government The SEJPA is revising its facilities master plan and related costs. This master plan would identify the CIP needs for the treatment plant starting in FY 2026 through FY 2036. It is expected that the SEJPA’s master plan will be completed during the 2025 fiscal year which would address the treatment plant’s infrastructure needs including the aging recycled water and ocean outfall systems.
In the absence of the new master plan, and while there may be additional projects that may be identified in the facilities master plan, SEJPA staff provided a project needs list for Fiscal Year 2026-2028, illustrated below with the total estimated cost:
Project Need by Plant Area FY 26-28 Est. Cost
Headworks: Safety improvements on concrete channels; grit and screening building improvements; replace two grit classifiers $ 555,000
Primary Sedimentation & Flow Equalization: Primary Sedimentation basin concrete tank and equipment refurbishment $ 1,010,000
Aeration Basin and Effluent Pump Station: Effluent pump station rehabilitation; Replacement of RAS pumps; Blower building rehabilitation $ 3,160,000
Secondary Sedimentation: Clarifier launder replacement; electrical system replacement $ 1,260,000 Sludge Digestion: Replacement of heating system; Digester No. 2 concrete and floating cover rehabilitation $ 2,780,000
Odor Control Facilities: ORF 1 recirculation pump replacement $ 60,000 Campus Wide: SCADA 3.0 (Total project est’d $1.6 million; wastewater cost allocation of 50%) $ 805,000 TOTAL $ 9,630,000
Annual CIP Pay-Go Contribution FY 26-28 $ 3,210,000
March 12, 2025
Annual Sewer Service Charge for FY 2026
In correlation with the anticipated project needs for FY26-28, SEJPA Staff provided two scenarios for increased contribution for the SEJPA CIP. SEJPA provided a flat projection (year over year, with annual CPI adjustment) for work that may be expected under the five-year capital program currently under review. Upon request from the City, SEJPA also provided a variable, or graduated, schedule for the next five years for projected capital expenses based on preliminary information available at the time of the City’s study.
Scenario A includes the full SEJPA CIP contribution request, which matches Encinitas’ Cost of Service study report.
Scenario B is a more gradual funding escalation with a lower overall request that provides alignment with Encinitas in FY 2028. This strategy contributes enough to accomplish the baseline of required work.
FY Amount % increase
2025 630,578 $
2026 1,403,434 $ 122.6%
2027 1,497,304 $ 6.7%
2028 1,516,103 $ 1.3%
2029 1,576,747 $ 4.0%
2030 1,639,817 $ 4.0%
SEJPA CIP Cost
Scenario A
FY Amount % increase
2025 630,578 $
2026 950,000 $ 50.7%
2027 1,200,000 $ 26.3%
2028 1,516,103 $ 26.3%
2029 1,576,747 $ 4.0%
2030 1,639,817 $ 4.0%
SEJPA CIP Cost
Scenario B
City Operations and Capital Projections:
The City provides administration, capital improvements, maintenance, and inspection of the City’s sanitary sewer system; in addition to the SEJPA expenditures.
City Operational Expenses (OpEx)
City operational expenses include personnel, materials, supplies, maintenance, professional services, and internal service charges. Included in the City OpEx, pursuant to the Agreement for the Lease of Transmission Capacity between the City of Encinitas – Cardiff Sanitary Division and the City of Solana Beach, an annual flat-rate capacity charge of $47,246.59 is paid, as well as a variable O&M component, estimated based on the City’s percentage of flows through the Olivenhain Sewer Pump Station/Trunk sewer. This amount is approximately $65,000 per fiscal year.
City of Solana Beach Capital Improvement Program (CIP): , The City has its own Capital Improvement Program for City related projects, outside of the SEJPA CIP. The City completed the recommended repair/replacement projects from the 2011 comprehensive condition assessment of the sanitary distribution system.
March 12, 2025
Annual Sewer Service Charge for FY 2026
Annually, the City completes drain and pipeline video assessments for a fifth of the City’s sanitary distribution system. This information is evaluated by City Staff to create a list of repair/replacement projects. The City budgeted $500,000 annually for FY 2020 – 2025 for Sanitary Sewer Pipeline Rehabilitation. To adequately address replacement of the remaining aging infrastructure, it is recommended that the City’s Sanitation District budget $350,000 per year to work towards maintaining the current level of service.
Debt Service Payments: The District has two bond issues that have debt service requirement covenants. The total annual debt service is approximately $1,173,294 per fiscal year.
The 2017 Wastewater Revenue Refunding Bonds were issued in the amount of $6,865,000.
FY Principal Interest Total
2025 330,000 $ $ 174,006 $ 504,006
2026 340,000 $ $ 164,106 $ 504,106
2027 350,000 $ $ 153,906 $ 503,906
2028 370,000 $ $ 136,406 $ 506,406
2029 380,000 $ $ 121,606 $ 501,606
2030 400,000 $ $ 102,606 $ 502,606
2017 WW Revenue Bonds
The SEJPA’s 2017 Revenue Bond was issued in the amount of $22,115,000. These annual debt payments are split between the City of Solana Beach and City of Encinitas.
The City of Solana Beach’s portion of these debt payments are shown in the table below:
FY Principal Interest Total
2025 255,000 $ $ 414,288 $ 669,288
2026 267,500 $ $ 401,538 $ 669,038
2027 280,000 $ $ 388,163 $ 668,163
2028 295,000 $ $ 374,163 $ 669,163
2029 310,000 $ $ 359,413 $ 669,413
2030 325,000 $ $ 343,913 $ 668,913
2017 SEJPA Revenue Bonds
Rate Increase Duration:
While the City typically completes the sewer fee study for a period of five years. Due to a high uncertainty of future costs (labor, materials, energy, etc.), and the pending 5- Year Capital Planning effort presently underway by SEJPA, the City Manager is recommending to the Council that an update to this study be completed at the conclusion of year 2 (FY27) of this fee cycle, allowing for review of assumptions and consideration of the fee structure before the end of year 3 (FY28) (adopted for start in year 4 – FY29). Furthermore, this will allow for the City of Solana Beach to adjust the March 12, 2025
Annual Sewer Service Charge for FY 2026
fee cycle to be more closely aligned with City of Encinitas, with whom the City shares SEJPA Board authority and oversight of the District.
Next Steps
Staff is requesting Council review the scenarios in Attachments 1 through 6 and decide 1) what the rate increase should be; and the term of the rate increase (3 or 5 fiscal years; and set a public hearing date of May 7, 2025, for the introduction and first reading of the proposed ordinance that would approve the rate increase(s). If the Council decides to increase the annual service charge, the City will prepare and coordinate the mailing of the Notice of Public Hearing pursuant to Proposition 218. This is a necessary step under state law and is required prior to submittal to the County of San Diego for inclusion into property tax documents for FY 26 by the deadline date of August 10th.
CEQA COMPLIANCE STATEMENT:
Not a project as defined by CEQA.
FISCAL IMPACT:
An increase to the annual Sewer service charge will provide the necessary funding for the administration, maintenance, debt service and capital costs of the City’s Sanitation District, and the costs of the San Elijo JPA operations, including the wastewater treatment, laboratory services, ocean outfall, pump stations, capital projects and debt service.
WORK PLAN: N/A
OPTIONS:
• Direct Staff on the annual sewer service charge and term of charge. • Direct Staff to set a public hearing date on May 7, 2025 pursuant to Proposition 218 to consider an increase in the annual sewer charge.
CITY STAFF RECOMMENDATION:
Staff recommends that the City Council:
1. Provide direction to Staff for setting the annual sewer service charge rate and the duration of the rate; and set a public hearing date on May 7, 2025 pursuant to Proposition 218 to consider an increase in the annual sewer charge.
March 12, 2025
Annual Sewer Service Charge for FY 2026
_________________________
Alyssa Muto, City Manager
Attachments
1. Scenario 1 – 6.5% rate increase; variable SEJPA CIP, FY 2026-2030
2. Scenario 2 – 8% rate increase; variable SEJPA CIP, FY 2026-2030
3. Scenario 3 – 11% rate increase; variable SEJPA CIP, FY 2026-2030
4. Scenario 4 – 6.5% rate increase; full SEJPA CIP, FY 2026-2030
5. Scenario 5 – 8% rate increase; full SEJPA CIP, FY 2026-2030
6. Scenario 6 – 11% rate increase; full SEJPA CIP, FY 2026-2030 Scenario 1
• Rate increase 6.5%
o $726.66 per EDU, increase of $44.36
• Gradual, lower SEJPA CIP Contributions
o
• Net Cash Flow impacts
o
• Ending Fund Balance with Minimums & Targets
o
FY Amount % increase
2025 630,578 $
2026 950,000 $ 50.7%
2027 1,200,000 $ 26.3%
2028 1,516,103 $ 26.3%
2029 1,576,747 $ 4.0%
2030 1,639,817 $ 4.0%
SEJPA CIP Cost
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue $ 6,387,494 $ 6,812,001 $ 7,266,189 $ 7,752,141 $ 8,272,087 City O&M $ (2,271,267) $ (2,391,796) $ (2,519,605) $ (2,655,170) $ (2,798,998) SEJPA O&M $ (2,442,081) $ (2,613,026) $ (2,782,873) $ (2,949,845) $ (3,112,087) City CIP $ (368,585) $ (388,156) $ (408,767) $ (430,473) $ (453,330) SEJPA CIP $ (950,000) $ (1,200,000) $ (1,516,103) $ (1,576,747) $ (1,639,817) City Debt Service $ (504,106) $ (503,906) $ (506,406) $ (501,606) $ (502,606) SEJPA Debt Service $ (669,038) $ (668,163) $ (669,163) $ (669,413) $ (668,913) Net Cash Flow $ (817,583) $ (953,046) $ (1,136,728) $ (1,031,113) $ (903,664)
ENDING FUND BALANCE
(/) $15
C:
.2
i $10
$5
$0
FY 2025 FY 2026
- Ending Balance - Operating Target
- - Total Minimum - - Operating Min
- Total Target
FY 2027 FY 2028 FY 2029 FY 2030
Scenario 2
• Rate increase 8%
o $736.88 per EDU, increase of $54.58
• Gradual, lower SEJPA CIP Contributions
o
• Net Cash Flow impacts
o
• Ending Fund Balance with Minimums & Targets
o
FY Amount % increase
2025 630,578 $
2026 950,000 $ 50.7%
2027 1,200,000 $ 26.3%
2028 1,516,103 $ 26.3%
2029 1,576,747 $ 4.0%
2030 1,639,817 $ 4.0%
SEJPA CIP Cost
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue $ 6,471,824 $ 6,993,794 $ 7,560,115 $ 8,174,570 $ 8,841,266 City O&M $ (2,271,267) $ (2,391,796) $ (2,519,605) $ (2,655,170) $ (2,798,998) SEJPA O&M $ (2,442,081) $ (2,613,026) $ (2,782,873) $ (2,949,845) $ (3,112,087) City CIP $ (368,585) $ (388,156) $ (408,767) $ (430,473) $ (453,330) SEJPA CIP $ (950,000) $ (1,200,000) $ (1,516,103) $ (1,576,747) $ (1,639,817) City Debt Service $ (504,106) $ (503,906) $ (506,406) $ (501,606) $ (502,606) SEJPA Debt Service $ (669,038) $ (668,163) $ (669,163) $ (669,413) $ (668,913) Net Cash Flow $ (733,253) $ (771,253) $ (842,802) $ (608,684) $ (334,485)
ENDING FUND BALANCE
VI $15
C:
.Q
~ $10
$5
$0
FY 2025 FY 2026
- Ending Balance - Operating Target
- - Total Minimum - - Operating Min
- Total Target
FY 2027 FY 2028 FY 2029 FY 2030
Scenario 3
• Rate increase 11%
o $757.36 per EDU, increase of $75.06
• Gradual, lower SEJPA CIP Contributions
o
• Net Cash Flow impacts
o
• Ending Fund Balance with Minimums & Targets
o
FY Amount % increase
2025 630,578 $
2026 950,000 $ 50.7%
2027 1,200,000 $ 26.3%
2028 1,516,103 $ 26.3%
2029 1,576,747 $ 4.0%
2030 1,639,817 $ 4.0%
SEJPA CIP Cost
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue $ 6,640,484 $ 7,365,006 $ 8,172,918 $ 9,073,849 $ 10,078,540 City O&M $ (2,271,267) $ (2,391,796) $ (2,519,605) $ (2,655,170) $ (2,798,998) SEJPA O&M $ (2,442,081) $ (2,613,026) $ (2,782,873) $ (2,949,845) $ (3,112,087) City CIP $ (368,585) $ (388,156) $ (408,767) $ (430,473) $ (453,330) SEJPA CIP $ (950,000) $ (1,200,000) $ (1,516,103) $ (1,576,747) $ (1,639,817) City Debt Service $ (504,106) $ (503,906) $ (506,406) $ (501,606) $ (502,606) SEJPA Debt Service $ (669,038) $ (668,163) $ (669,163) $ (669,413) $ (668,913) Net Cash Flow $ (564,593) $ (400,041) $ (229,999) $ 290,595 $ 902,789
ENDING FUND BALANCE
Ill $15
C:
.Q
:E $10
$5
$0
FY 2025 FY 2026
- Ending Balance - Operating Target
- Total Minimum - - Operating Min
Total Target
FY 2027 FY 2028 FY 2029 FY 2030
Scenario 4
• Rate increase 6.5%
o $726.66 per EDU, increase of $44.36
• SEJPA CIP Contributions, full request to match Encinitas o
• Net Cash Flow impacts
o
• Ending Fund Balance with Minimums & Targets
o
o
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue $ 6,387,494 $ 6,812,001 $ 7,266,189 $ 7,752,141 $ 8,272,087 City O&M $ (2,271,267) $ (2,391,796) $ (2,519,605) $ (2,655,170) $ (2,798,998) SEJPA O&M $ (2,442,081) $ (2,613,026) $ (2,782,873) $ (2,949,845) $ (3,112,087) City CIP $ (368,585) $ (388,156) $ (408,767) $ (430,473) $ (453,330) SEJPA CIP $ (1,403,434) $ (1,497,304) $ (1,516,103) $ (1,576,747) $ (1,639,817) City Debt Service $ (504,106) $ (503,906) $ (506,406) $ (501,606) $ (502,606) SEJPA Debt Service $ (669,038) $ (668,163) $ (669,163) $ (669,413) $ (668,913) Net Cash Flow $ (1,271,017) $ (1,250,350) $ (1,136,728) $ (1,031,113) $ (903,664) SEJPACIPCost
FY Amo unt % in crease
2025 $ 630,578
2026 $1,403,434 122.6%
2027 $1,497,304 6.7%
2028 $1,516,103 1.3%
2029 $1,576,747 4.0%
2030 $1,639,817 4.0%
ENDING FUND BALANCE - End ing Balance - Operating Target - - Total Minimum - - Operating Min
,.,, $15
r::
.Q
:iE $10
$5
$0
FY 2025
- Total Target
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Scenario 5
• Rate increase 8%
o $736.88 per EDU, increase of $54.58
• SEJPA CIP Contributions, full request to match Encinitas o
• Net Cash Flow impacts
o
• Ending Fund Balance with Minimums & Targets
o
FY Amount % increase
2025 630,578 $
2026 1,403,434 $ 122.6%
2027 1,497,304 $ 6.7%
2028 1,516,103 $ 1.3%
2029 1,576,747 $ 4.0%
2030 1,639,817 $ 4.0%
SEJPA CIP Cost
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue $ 6,471,824 $ 6,993,794 $ 7,560,115 $ 8,174,570 $ 8,841,266 City O&M $ (2,271,267) $ (2,391,796) $ (2,519,605) $ (2,655,170) $ (2,798,998) SEJPA O&M $ (2,442,081) $ (2,613,026) $ (2,782,873) $ (2,949,845) $ (3,112,087) City CIP $ (368,585) $ (388,156) $ (408,767) $ (430,473) $ (453,330) SEJPA CIP $ (1,403,434) $ (1,497,304) $ (1,516,103) $ (1,576,747) $ (1,639,817) City Debt Service $ (504,106) $ (503,906) $ (506,406) $ (501,606) $ (502,606) SEJPA Debt Service $ (669,038) $ (668,163) $ (669,163) $ (669,413) $ (668,913) Net Cash Flow $ (1,186,687) $ (1,068,557) $ (842,802) $ (608,684) $ (334,485)
ENDING FUND BALANCE
1/) $15
C:
.2
:E $10
$5
$0
FY 2025 FY 2026
- Ending Balance --Operating Target
- - Total Minimum - - Operating Min
--Total Target
FY 2027 FY 2028 FY 2029 FY 2030
Scenario 6
• Rate increase 11%
o $757.36 per EDU, increase of $75.06
• SEJPA CIP Contributions, full request to match Encinitas o
• Net Cash Flow impacts
o
• Ending Fund Balance with Minimums & Targets
o
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue $ 6,640,484 $ 7,365,006 $ 8,172,918 $ 9,073,849 $ 10,078,540 City O&M $ (2,271,267) $ (2,391,796) $ (2,519,605) $ (2,655,170) $ (2,798,998) SEJPA O&M $ (2,442,081) $ (2,613,026) $ (2,782,873) $ (2,949,845) $ (3,112,087) City CIP $ (368,585) $ (388,156) $ (408,767) $ (430,473) $ (453,330) SEJPA CIP $ (1,403,434) $ (1,497,304) $ (1,516,103) $ (1,576,747) $ (1,639,817) City Debt Service $ (504,106) $ (503,906) $ (506,406) $ (501,606) $ (502,606) SEJPA Debt Service $ (669,038) $ (668,163) $ (669,163) $ (669,413) $ (668,913) Net Cash Flow $ (1,018,027) $ (697,345) $ (229,999) $ 290,595 $ 902,789 SEJPACIPCost
FY Amount % in crease
2025 $ 630,578
2026 $1,403,434 122.6%
2027 $1,497,304 6.7%
2028 $1,516,103 1.3%
2029 $1,576,747 4.0%
2030 $1,639,817 4.0%
ENDING FUND BALANCE - End ing Balance - Operating Target - - Total Minimum - - Operating Min
,.,, $15
r::
.Q
:iE $10
$5
$0
FY 2025
- Total Target
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # C.2.
STAFF REPORT
CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Alyssa Muto, City Manager
MEETING DATE: March 12, 2025
ORIGINATING DEPT: Public Works/Engineering Department – Dan Goldberg, Acting Public Works Director/City Engineer
SUBJECT: Approving the Project Lists and Authorizing the City Engineer to Advertise for Construction Bids for the FY
2024/25 and the FY 2025/26 Street Maintenance and
Repairs Projects
BACKGROUND:
Solana Beach has approximately 46 miles of roadways to maintain. The most efficient and cost-effective pavement maintenance and rehabilitation strategy is to use a pavement management program. This type of program inventories and classifies pavement conditions to determine the most effective way to budget, repair, replace and preserve roadway surfaces. In addition, certain federal and state funding sources require the use of a pavement management program. Solana Beach performed a citywide pavement management program update in 2021, covering the five-year period from 2021 to 2026.
This item is before the City Council for consideration of Resolution 2025-015 (Attachment 1) to approve the list of streets for the Fiscal Year (FY) 2024/25 and the FY 2025/26 Street Maintenance and Repairs Projects and authorize the City Engineer to advertise the projects for construction bids.
DISCUSSION:
The main components of the proposed pavement maintenance programs for FY 2024/25 and FY 2025/26 would include full-width pavement overlays and localized replacements of failed pavement (potholes). Listed below are two separate projects that cover roadways within all four Council districts of the City. One project is pavement repairs and modified striping on Lomas Santa Fe Drive (LSF). The project would overlay and restripe LSF from the eastern edge of North County Transit District railroad right of way to east of Solana Hills Drive, where the Caltrans right of way begins, and overlay Solana Hills Drive from March 12, 2025
FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects
LSF to the driveway near the Carl’s Jr. restaurant (106 Solana Hills Drive). The reason for including the portion of Solana Hills Drive with the LSF project is that due to traffic volumes, Staff is recommending the LSF overlay to be done at night with work starting around 7:00 pm. Since the section of Solana Hills Drive proposed to be included with the LSF work also has heavy daytime volumes, doing this work at night could help alleviate congestion at this intersection. The other project is a street repair project on various roads throughout the City. This is similar to the street repair project that is performed every year.
Project 1 – Lomas Santa Fe Pavement Repairs Project
Overlays
Street From To
Lomas Santa Fe Drive North County Transit
District right of way
Interstate 5
Solana Hills Drive Lomas Santa Fe Drive 106 Solana Hills Drive In addition to pavement resurfacing, the LSF Pavement Repairs project includes the following:
Localized Street Repairs
Dig-outs and replacement of failed pavement (potholes) within the project limits will be performed.
Traffic Striping
Since the striping on LSF would be completely removed by the overlay, Staff will take the opportunity to provide enhanced bicycle lanes, where possible. The vehicle travel lanes will be reduced in width as necessary to provide buffers for the bike lanes.
Maps showing the proposed limits of the Lomas Santa Fe Pavement Repairs are included in this report as Attachment 2.
As it relates to this stretch of Lomas Santa Fe, staff is exploring alternate signalization on Lomas Santa Fe at Cedros Street. This pilot project would seek to address north-bound turn (left turn) queuing on Lomas Santa Fe eastbound during high peak hours by providing for a yielded left-turn when a driver determines it is appropriate. If determined to be feasible by the City Engineer, the design and implementation would be done under a separate project and contract for signalization services and would take into account multimodal improvements associated with this project.
March 12, 2025
FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects
Project 2 – Citywide Pavement Repairs Project
Overlays
Street From To
Cerro Verde Drive Cerro Largo Drive End
El Pedregal Court Via Mil Cumbres End
Highland Drive (E) 1129 Highland Drive End
Highland Drive (E) Via La Senda Uno Verde Court
Highland Drive (W) Ida Avenue Highland Court
La Sobrina Court San Andres Drive End
Loma Corta Drive Via Mil Cumbres End
North Sierra Avenue Estrella Street West Cliff Street
Ramona Place Highland Drive End
Santa Madera Court Santa Rufina Drive End
San Rodolfo Drive Stevens Avenue 106 Solana Hills Drive Santa Rufina Court Santa Victoria End
In addition to pavement resurfacing, Project 2 includes the following specific work:
Localized Street Repairs
Dig-outs and replacement of failed pavement (potholes) throughout the City will be performed.
Traffic Striping
Pavement striping and markings damaged or covered by the project would be replaced and additional striping would be performed in other areas in the City, as needed.
Sidewalk Repairs
Damaged and tree lifted sidewalks and curbs will be repaired.
A map of proposed street repairs to be included with the Citywide Pavement Repairs Project is included in this report as Attachment 3.
Staff has also included a map of the recently completed 2024 Street Maintenance and Repairs Project (Attachment 4).
The authorization to go out to bid for both Project 1 and Project 2 concurrently as one project would enable Staff to obtain bids and potentially award a contract(s) for both projects so that the work will be completed during FY 2025/26. This could also result in some cost savings for mobilization, demobilization and other economies of scale if the award for both projects were to be issued to a single contractor.
March 12, 2025
FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects
CEQA COMPLIANCE STATEMENT:
The Project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301(c) of the State CEQA Guidelines.
FISCAL IMPACT:
Project funding for the FY 2024/25 Street Maintenance and Repairs Project will be from the FY 2024/25 Annual Pavement Management Program as adopted in the Capital Improvement Program section of the Adopted Budget. The funding includes $200,000 in Gas Tax Funds, account 2026510.66610, $210,000 in TransNet Funds, account 2286510.66610, $300,000 in Road Repair and Accountability Act (SB1) Funds, account 2476510.66610, $500,000 in City CIP Funds (transferred from Measure S Surplus in FY24), account 4596510.66610, and $390,000 in General Funds – Measure S, account 1106510.66610. It is anticipated that funding for the FY 2025/26 Street Maintenance and Repairs Project will be $1,100,000. Actual funding amounts for the FY 2025/26 project will be identified when the FY 2025/26 and FY 2026/27 two-year budget is adopted later this year. The funding available for the FY 2024/25 project is $1,600,000 and the FY 2025/26 project is expected to be $1,100,000.
The engineer’s estimates for these proposed projects are based on construction costs from last year’s pavement rehabilitation project. If the bid amounts for the proposed projects are higher than the available funding, Staff will seek authorization from Council for the appropriation of additional funding.
WORK PLAN:
The FY 2024/25 Street Maintenance and Repairs Project is listed in the FY 2024/25 Work Plan under the Circulation and Parking section of Ongoing Priorities and Monitoring.
OPTIONS:
• Approve the list of streets scheduled for maintenance and repairs as part of the FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects and authorize the City Engineer to advertise for construction bids.
• Revise the list of streets scheduled for maintenance and repairs as part of the FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects and authorize the City Engineer to advertise for construction bids.
• Provide further direction, as needed.
March 12, 2025
FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects
CITY STAFF RECOMMENDATION:
Staff recommends that the City Council adopt Resolution 2025-015:
1. Approving Project 1 – Lomas Santa Fe Pavement Repairs Project for construction.
2. Approving the list of streets scheduled for maintenance and repairs as part of Project 2 – Citywide Pavement Repairs Project for construction.
3. Authorizing the City Engineer to advertise both projects for construction bids as funding becomes available for each project.
_________________________
Alyssa Muto, City Manager
Attachments:
1. Resolution 2025-015
2. Area map of Lomas Santa Fe Pavement Repairs Project (Project 1)
3. Area map of Citywide Pavement Repairs Project (Project 2)
4. Area map of completed 2024 Citywide Pavement Repairs Project RESOLUTION 2025-015
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SOLANA BEACH, CALIFORNIA, APPROVING THE LIST OF
STREETS FOR THE FY 2024/25 AND THE FY 2025/26
STREET MAINTENANCE AND REPAIRS PROJECTS AND
AUTHORIZING THE CITY ENGINEER TO ADVERTISE FOR
CONSTRUCTION BIDS
WHEREAS, the Engineering Department utilizes a pavement condition assessment program, field reviews and a review of previous street rehabilitation projects to identify the list of streets to be repaired as part of this project; and WHEREAS, project funding for the FY 2024/25 Street Maintenance and Repairs Project will be from the FY 2024/25 Annual Pavement Management Program as adopted in the Capital Improvement Program section of the Adopted Budget; and WHEREAS, it is anticipated that funding for the FY 2025/26 Street Maintenance and Repairs Project will be the same as the current fiscal year. Actual funding amounts for the FY 2025/26 project will be identified when the FY 2025/26 and FY 2026/27 two-year budget is adopted later this year; and
WHEREAS, the main components of the proposed pavement maintenance programs for FY 2024/25 and FY 2025/26, if approved, would include full-width pavement overlays and localized replacements of failed pavement (potholes); and WHEREAS, there are two separate projects being considered. One project is pavement repairs and modified striping on Lomas Santa Fe Drive (LSF). The LSF project would overlay and restripe LSF from the eastern edge of North County Transit District railroad right of way to east of Solana Hills Drive where the Caltrans right of way begins and overlay Solana Hills Drive from LSF to the driveway near the Carl’s Jr. restaurant. The other project is a street repair project on various roads throughout the City. This is similar to the street repair project that is performed every year; and WHEREAS, the authorization to bid for both projects concurrently would allow for the work for both project to be completed during FY 2025/26.
NOW, THEREFORE, the City Council of the City of Solana Beach, California, does resolve as follows:
1. That the above recitations are true and correct.
2. That the City Council approves Project 1 – Lomas Santa Fe Pavement Repairs Project for construction.
Resolution 2025-015
FY 2024/25 and FY 2025/26 Street Maintenance and Repairs Projects
3. That the City Council approves the list of streets scheduled for maintenance and repairs as part of Project 2 – Citywide Pavement Repairs Project for construction.
4. That the City Council authorizes the City Engineer to advertise both projects for construction bids as funding becomes available for each project.
PASSED AND ADOPTED this 12th day of March 2025, at a regular meeting of the City Council of the City of Solana Beach, California by the following vote:
AYES: Councilmembers –
NOES: Councilmembers –
ABSTAIN: Councilmembers –
ABSENT: Councilmembers –
______________________________
LESA HEEBNER, Mayor
APPROVED AS TO FORM: ATTEST:
_____________________________ _______________________________ JOHANNA N. CANLAS, City Attorney ANGELA IVEY, City Clerk
OVERLAY
STREET MAINTENANCE PROJECT 1
CITY OF SAN DIEGO
SAN DIEGO
OF
COUNTY
ENCINITAS
DEL MAR VICINITY MAP
SAN RODOLFO DR
NOT TO SCALE
3/4/2025
LOMAS SANTA FE
CEDROS AVE
RIOS AVE
OVERLAY
STREET MAINTENANCE PROJECT 2
*
DIG-OUT LOCATIONS DIG-OUTS IN OVERLAY & SLURRY SEAL AREAS NOT SHOWN. ADDITIONAL DIG-OUTS NOT SHOWN ARE ANTICIPATED.
CITY OF SAN DIEGO
SAN DIEGO
OF
COUNTY
ENCINITAS
DEL MAR VICINITY MAP
HIGHLAND DR
RAMONA PLACE
LA SOBRINA CT
SAN RODOLFO DR
HIGHLAND DR LOMA CORTA DR
CERRO VERDE DR
EL PEDREGAL CT
SANTA RUFINA CT
SANTA MADERA CT
SIERRA AVE
HIGHLAND DR
** * SANTA HELENA
SAN ANDRES DR
NOT TO SCALE
3/4/2025
THERESA
SANTA
CHICA
VIA
OVERLAY
SLURRY SEAL
2024 STREET MAINTENANCE
CUMBRES
VIA MIL
*
DIG-OUT LOCATIONS DIG-OUTS IN OVERLAY & SLURRY SEAL AREAS NOT SHOWN. ADDITIONAL DIG-OUTS NOT SHOWN ARE ANTICIPATED.
CITY OF SAN DIEGO
SAN DIEGO
OF
COUNTY
ENCINITAS
DEL MAR VICINITY MAP
OO
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