1 RCAC 2024 Water Rate Study—City of Trinidad
City of Trinidad
Drinking Water Rate Study
Rural Community
Assistance Corporation
This document was prepared in May
2024 through funds provided by
United States Department of
Agriculture
2 RCAC 2024 Water Rate Study—City of Trinidad
Submittal page
July 1, 2024
Luis Andrade
Water and Environmental Programs Director
Imperial Office
2407 Marshall St, Suite E
Imperial, CA 92251
Subject: City of Trinidad Water Rate Study
Dear Luis:
Enclosed please find the printed final report for the City of Trinidad water rate study.
The initial water rate study was presented to the City Council on May 28, 2024. Comments from the Council and the Public were taken into account and new rate options were presented to the Council on June 11, 2024. The Council selected rate option #x and began the Prop. 218 process. The Prop. 218 hearing is planned for August 13, 2024, with the intention of implementing the new rates on September 1, 2024.
If you have any additional questions, feel free to contact Samantha Ryan at (707) 572-7465 or Lori Blau at (509) 867-6696.
Sincerely,
Lori Blau
Lori Blau
RCAC, Regional Field Manager
Community & Environmental Services
Enclosure: - City of Trinidad Water Rate Study
CC: City of Trinidad
3 RCAC 2024 Water Rate Study—City of Trinidad
Contents
1 Executive summary ......................................................................................................................................4 2 Introduction..................................................................................................................................................7 3 Water system basic statistics.......................................................................................................................9 4 Current financial condition and analysis....................................................................................................12 5 Rate setting process...................................................................................................................................15 6 Rate options...............................................................................................................................................20 7 Recommendations......................................................................................................................................27 8 Appendices.................................................................................................................................................27 4 RCAC 2024 Water Rate Study—City of Trinidad
1 Executive summary
RCAC conducted this water rate study on behalf of the City of Trinidad to evaluate the City’s financial ability to operate and maintain their water system for the next five years and collect the necessary reserves for emergencies and capital improvements. RCAC analyzed actual data for fiscal year ending in 2023 (FYE 2023) and budgeted data for FYE 2024 to set rates for FYE 2025-2029.
The industry standard is to conduct a water rate study every five years to ensure revenues are covering expenses and costs are being applied to customer classes in a manner consistent with current Proposition 218 case law. The City’s current water rates were established in January 2012, through the adoption of Resolution 2012-01. The resolution set annual rate increases through FYE 2017. The resolution included a 2.5% rate increase per year, that the City Council chose not to implement in certain years between 2012 and 2017.
Since the last water rate increase in 2017, inflation has increased approximately 25 percent. The water fund’s operating revenue has been struggling to cover operating expenses since FYE 2019. Significant challenges were seen in FYE 2023, when the City hired an outside engineering firm to operate its T3/D1 system. A water rate increase is being recommended to ensure revenues cover current expenses and to get the City closer to collecting the true cost of providing safe drinking water.
Typically, RCAC suggests that a water system collect revenue from its customers annually to cover the following:
• Annual Operating & Administrative Expenses – the cost to operate the water system on a yearto-year basis. • Operations & Maintenance Reserves – a certain amount per year until three times the expenses during a billing cycle is on hand.
• Emergency Reserves – a certain amount per year until the cost to replace the most critical equipment, typically a well pump, is on hand.
• Debt Reserves (if necessary) – a specific amount required by certain funders when receiving a loan.
• Capital Reserves – the average annual rehabilitation and rehab budget.
For the City of Trinidad to collect the suggested reserves above, it would require more than a 100% increase in both the current base rates and usage rates (even when assuming a robust grant program).
RCAC and City staff considered revenue requirements of the water system and the affordability to the City’s water customers and are presenting three rate options for consideration that keep base rate increases for ¾” meters and usage rate increases to below 75% in FYE2025. These rate options are to ensure annual operating and administrative costs are recovered through customer rates and to ensure that by the end of FYE 2029, the water system has approximately $240,000 in reserves. It is important for a public water system to have reserves so it can fund capital replacements and improvements as needed, and as state and federal funding is available.
RCAC worked with City staff to allocate costs and determine three rate options to present to the City Council, for Council to then decide which rate option best fits the City’s policies and preferences. The rate structure recommended by RCAC allocates costs by:
5 RCAC 2024 Water Rate Study—City of Trinidad
1. Establishing a variable base rate by meter size- calculated using meter equivalency ratio charges (flow capacity, meter cost, fire demand) and flat rate customer charges as described in AWWA’s M1 Principles of Water Rates, Fees, and Charges.
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
The other rate options presented today allocate costs by:
1. Continuing a variable base rate by location - inside city limits or outside city limits
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
The rates recommended by RCAC are:
RCAC Recommended Water Rates - Rate Option 3
Standard Rates (Inside & Outside Customers)
Meter Size 2025 2026 2027 2028 2029
3/4 $63.44 $69.72 $76.72 $84.46 $93.02
1 $85.03 $92.26 $101.00 $110.91 $122.04
1 ½ $120.33 $131.73 $144.71 $159.16 $175.21
4 $602.40 $667.14 $735.45 $809.73 $891.01
Rate per 100 CF $5.54 $5.93 $6.35 $6.99 $7.71
With these rates, the average inside residential customer will see an increase of $23.81 per month in FYE 2025 while the average outside residential customer will see an increase of $6.90 per month.
Customers with larger meters will see a larger increase in the first year due to incorporating meter equivalent ratios in the base rate calculations, as described in AWWA’s M1 Principles of Water Rates, Fees, and Charges. FYE 2026 through FYE 2029 will vary from 7-11% for all meter sizes and water usage charges. This can be seen visually in the following percent change tables.
Rate Option 3 - Percent Change
Inside Customer Percent Increases
Meter Size 2025 2026 2027 2028 2029
3/4 40% 10% 10% 10% 10%
1 88% 9% 9% 10% 10%
1 ½ 166% 9% 10% 10% 10%
4 1232% 11% 10% 10% 10%
Rate/HCF 25% 7% 7% 10% 10%
Outside Customer Percent Increases
Meter Size 2025 2026 2027 2028 2029
3/4 12% 10% 10% 10% 10%
1 50% 9% 9% 10% 10%
1 ½ 113% 9% 10% 10% 10%
4 965% 11% 10% 10% 10%
Rate/HCF 0% 7% 7% 10% 10%
6 RCAC 2024 Water Rate Study—City of Trinidad
The affordability of water service to residential customers is an important metric to monitor. It is calculated as a percent of median household income (%MHI). The calculation assumes 600 cubic feet of monthly water usage per residential connection and $76,705 as the MHI for City customers (Source:
2020 US Census for Trinidad). The % MHI for the water rates are as follows:
2025 2026 2027 2028 2029
Inside 1.51% 1.65% 1.80% 1.98% 2.18%
Outside 1.51% 1.65% 1.80% 1.98% 2.18%
Affordability criteria
The State Water Resources Control Board drinking water needs assessment recognizes two thresholds when it comes to affordability. A %MHI between 1.5% - 2.49% is a medium-risk, while a %MHI above 2.5% is a high-risk scenario. The Environmental Protection Agency recognizes that water begins to become unaffordable at 2.5% MHI.
Items to consider when managing a water utility fund include :
• Successful utilities are those that strive to be transparent. In day-to-day operations, a water system should strive to promote its services (highlights and the low points), and continuously educate residents on why it is necessary to raise and adjust rates. • Collecting for the true cost of water includes annual operating and administrative expenses as well as the funding of reserve accounts so that a water system can provide reliable, safe drinking water.
• Every year revenues versus expenditures should be reviewed to ensure that the rates cover all costs to the system. If they do not, a rate study should be considered. • Maintaining reserve policies aids in transparency, ensures the true cost of water is collected through water rates, and guides the annual review of revenues versus expenditures. • If possible, CIP reserves should be moved to and maintained in the highest interest-bearing accounts available to offset inflation unless the cost of doing so is more than the interest earned on the account.
• Conducting rate studies every five years helps to stabilize water rates for customers in the longterm. 7 RCAC 2024 Water Rate Study—City of Trinidad
2 Introduction
About RCAC
Founded in 1978, RCAC provides training, technical, and financial resources, and advocacy so rural communities can achieve their goals. Since 1978, our dedicated staff and active board, coupled with our key values: leadership, collaboration, commitment, quality, and integrity, have helped effect positive change in rural communities across the West.
RCAC’s work includes environmental infrastructure (water, wastewater, and solid waste facilities); affordable housing development; economic and leadership development; and community development finance. These services are available to communities with populations of fewer than 50,000, other nonprofit groups, tribal organizations, farmworkers, colonias and other specific populations.
Headquartered in West Sacramento, California, RCAC’s employees serve rural communities in 13 western states and the Pacific islands.
Purpose of financial capacity analysis
RCAC conducted this water rate study on behalf of the City of Trinidad to ensure that rates are covering annual operating and administrative expenses. Additionally, this rate study looked at reserves needed for long-term sustainability of the water system and the affordability or water rates for customers.
A water rate study also helps to ensure that the amount collected by the City does not exceed the costof-service and remains in compliance with Proposition 218. While there is no single approach to rate design and setting, RCAC believes costs should be allocated to customers as can reasonably be determined or estimated while respecting the policy preference of the water agency as long as there is a reasonable cost basis. RCAC worked with City staff to allocate costs and determine several rate options for City Council to determine which best fits the City’s policies and preferences. The rate structure recommended RCAC allocates costs by:
1. Establishing a variable base rate by meter size- calculated using meter equivalency ratio charges (flow capacity, meter cost, fire demand) and flat rate customer charges as described in AWWA’s M1 Principles of Water Rates, Fees, and Charges.
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
The other rate options presented today allocate costs by:
1. Continuing a variable base rate by location - inside city limits or outside city limits
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
City council responsibilities
All findings and conclusion of this rate study are RCAC’s professional assessment and are not a directive for action to the community. Whereas RCAC strongly recommends its finding to the community, the City Council must act in accordance with city ordinance code and applicable state laws to enact RCAC recommendations in whole or in part.
Guiding principles in a rate study
Rates should be:
• Sustainable – Rates should cover the costs to the system to provide safe drinking water into the foreseeable future. This includes operations, repairs, interest, loan principal, capital replacement and all other costs related to providing safe drinking water. 8 RCAC 2024 Water Rate Study—City of Trinidad
• Fair – Rates should be fair to all rate payers. While the costs should not exceed the costs of providing the service, they do need to capture the true costs of the service. Low rates for current customers will require high rates for future customers. • Justifiable – Rates must be based on actual needs of the water enterprise system. The water enterprise system expenses and revenue should be tracked separately from other funds.
Therefore, the proposed rates are based on the best available information provided by the system.
Disclaimer
The findings, recommendations, and conclusions contained in this financial analysis are based on financial information provided to RCAC by the City. Although reasonable care was made to ensure the reliability of this information, no warranty is expressed or implied as to the correctness, accuracy or completeness of the information contained herein. Any action taken based on such findings, recommendations, or conclusions is undertaken at the discretion of the City Council. In no event will RCAC or its partners, employees, or agents, be liable for any decision made or action taken in reliance on the information contained in this analysis.
9 RCAC 2024 Water Rate Study—City of Trinidad
3 Water system basic statistics
Community
The City of Trinidad is in Humboldt County on the Northern Coast of California about 20 miles north of the City of Eureka. The City has a population of about 332 and its water service boundary serves approximately 1,072 people through 326 service connections.
The incorporated city is overseen by a five-member city council, where council members are elected to four-year terms. The City is managed by a city manager that oversees several departments, including the water department.
The water department maintains a public water system for residents, businesses, and public users within the City limits and for many customers adjacent to the City. The water treatment facility runs continually to provide water that meets state and federal standards at a reasonable cost to its customers. The water distribution system is older in many areas, but the staff works cooperatively to assure that any leaks are detected and repaired as quickly as possible. This includes periodic meter testing for residents as needed.
The system also includes two water tanks that help to control pressure, provide a back-up supply in periods of high demand, and meet the fire flow requirements when emergencies arise. 10 RCAC 2024 Water Rate Study—City of Trinidad
There is a limited demand for new water connections due to the small amount of urban growth that is experienced in the City on an annual basis. The City has a policy to allow limited new connections outside City limits.
Water rates are set in a manner to meet the ongoing operational costs, retire any debts that the system experiences, and to provide an ongoing reasonable reserve fund for emergencies and system improvements.
Coleman Engineering is currently providing licensed water treatment services to The City of Trinidad through an interim contract with Coleman Engineering.
System description
The City pulls water from Luffenholtz Creek, about two miles south of the City. The City is authorized to extract 251 gallons per minute (gpm) out of the creek but must reduce the usage when the creek’s flow is less than 385 gpm. The City also holds water rights to extract 40.4 gpm out of Mill Creek, north of the City, but this would require construction of intake and related infrastructure.
The City completed a water system upgrade in 2014, which included the installation of new water pumps, a settling filtrations system, and other minor improvements. After being treated and chlorinated, water is stored in two 150,000-gallon redwood tanks before being distributed to customers through over 6 miles of pipeline. The distribution system is aging, and the City is dealing with water losses of 24-31 percent due to leaks.
Customer water use statistics
The City serves water to approximately 1,072 people through 326 connections. This rate study looked at account information and water usage for FYE 2022.
While residential customers make up 79.8% of the total number of accounts, they only account for
31.3% of the total water usage.
Account Type Average Number of
Active Accounts
Percent of
Total Accounts
Annual Usage
(cubic feet)
Percent of
Total Usage
Residential 260 79.8% 689,642 31.3%
Non-Residential 66 20.2% 1,508,931 68.6%
Total 326 100.00% 2,198,573 100.0%
Some non-residential customers have larger water meters that allow for higher usage. Larger meters in the City use more water than the average ¾” meter, which can be seen when the percent of total accounts for each meter size is compared to the percent of total usage for the corresponding customer class.
Account Type Average Number of
Active Accounts
Percent of
Total Accounts
Annual Usage
(cubic feet)
Percent of
Total Usage
¾” Meter 317 97.2% 1,874,112 85.2%
1” Meter 7 2.2% 224,531 10.2%
1.5” Meter 1 0.3% 14,210 0.7%
4” Meter 1 0.3% 85,720 3.9%
Total 326 100.00% 2,198,573 100.0%
11 RCAC 2024 Water Rate Study—City of Trinidad
When the water usage of inside city limit customers versus outside city limit customers is compared, the percent of total accounts in a customer class is similar to the percent of total usage in that customer class.
Account Type Average Number of
Active Accounts
Percent of
Total Accounts
Annual Usage
(cubic feet)
Percent of
Total Usage
Inside City 225 69.0% 1,594,274 72.5%
Outside City 101 31.0% 604,299 27.5%
Total 326 100.00% 2,198,573 100.0%
Current water rate structure
The City’s current water rates were established in January 2012, through the adoption of Resolution 2012-01. The resolution set annual rate increases through FYE 2017. The resolution included a 2.5% rate increase per year, that the City Council chose not to implement in certain years between 2012 and 2017.
The City has a variable base rate based on location (inside vs outside city limits) and a variable usage rate based on location. The current rates are:
Current Monthly Charges
Standard Rates
Monthly Base Rate* Usage Rate (per HCF)
Inside City Limits $ 45.23 $ 4.42
Outside City Limits $ 56.54 $ 5.54
Future population and usage projections
Any change in population numbers or water usage can significantly affect the revenue from water sales.
The City is not anticipated to grow and water usage is expected to remain similar for the timeframe of this five-year rate study. Based on data in the Municipal Service Review, a growth factor of 0.2% was applied each year to capture the expected growth in the City. In addition, a conservation factor was applied to customer water usage. This conservation factor is designed to capture the reduction in usage that typically occurs after a rate increase. It is assumed that total water usage will reduce 5% in the first year as customers feel the effect of the new rates and slowly return to normal usage (1% per year) after customers have adjusted to the new rates.
The Trinidad Rancheria (a large, outside city limit customer) is conducting a study to see if water could be provided by another public water system in the area; Humboldt Bay Municipal Water District (HBMWD). If this mainline extension is feasible and the Trinidad Rancheria transfers to HBMWD water service, the City of Trinidad’s revenue could be reduced 1.6% - 3.2% or $6,000-$12,000 annually. City revenue may be reduced further if additional outside customers choose to transfer to HBMWD service as well. This possibility was not investigated as part of this rate study since planning and construction of the project is expected to extend beyond the timeframe of this rate study. The City should re-evaluate their water rates if this extension occurs prior to FYE2029. 12 RCAC 2024 Water Rate Study—City of Trinidad
4 Current financial condition and analysis
Current budget
The City has a water fund that is tracked in more detail through the water operating fund, the water capital improvement reserve fund, and by capital projects.
The net position of the Water Fund has decreased in the past several years but due to expenses exceeding revenue. A large reason for this was the City hired an engineering firm to serve as the contract operator while working to replace staff. The City is expected to have a certified water treatment and distribution operator on staff again and the annual expenses for the water department are expected to drop approximately 40 percent. However, since the last water rate increase in 2017, inflation has gone up approximately 25 percent and there were years prior that the City Council voted to not increase rates
2.5% annually to keep revenues in-line with the consumer price index and inflation.
Additionally, a large component of collecting the true cost of drinking water through water rates is collecting the necessary funds for capital replacement and improvement. The distribution system is aging along with other assets, and it is estimated that the City should be collecting a minimum of $152,264 annually from water rates to be able to replace assets as they reach the end of their expected useful life.
Current financial indicators
There are several financial indicators that can provide insight into the financial health of a water system.
A financial indicator analysis was conducted on the water operating fund for the most recent available audited financial statements, FYE 2022. The results of the analysis are:
• Quick ratio - measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately. A number greater than one is considered good.
𝑄𝑢𝑖𝑐𝑘 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑎𝑠ℎ + 𝐶𝑎𝑠ℎ 𝐸𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
The water operating fund’s quick ratio is -3.0.
• Debt ratio - indicates the percentage of a company's assets that are provided via debt. A number above 0.4 may hinder the ability of the system to get a loan. Too low of a number may mean that the system isn’t utilizing the potential benefits that come from debt-financing such as the completion of larger projects while providing ratepayers with rate stabilization benefits.
𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡𝑠
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
The water operating fund’s debt ratio is 0.
• Days of cash on hand - measures whether a firm has enough resources to meet its short-term obligations. In 2022, total disbursements totaled $630,939 which equates to daily expenses of $1,729. The water operating fund has 0 days of cash on hand in the water operating fund. • Current ratio - measures whether a firm has enough resources to meet its short-term obligations.
A number between 1.5 and two is considered good. A number below 1.5 may be okay if the water system is about to bill as the assets will soon increase and the ratio will increase.
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑒𝑠
13 RCAC 2024 Water Rate Study—City of Trinidad
The City’s current ratio is -3.0.
• %MHI - The State Water Resources Control Board has for some time used a 1.5% MHI threshold in funding to determine whether a severely disadvantaged community will receive a loan or grant funding. A %MHI above 1.5% in a SDAC indicates that the water system may have customer charges that are unaffordable.
The %MHI for inside city limits customers is 1.12% using the 2020 Census.
The %MHI for outside city limits customers is 1.40% using the 2020 Census. the analysis was done on FYE 2022 audited financials, it does not necessarily depict the City’s current situation. The current situation will be better depicted in the FYE 2023 audit report.
Current dedicated reserves
According to the FYE 2022 audit, the City water fund currently has $1,170,000 of restricted funds that are reserved to be spent on capital replacement and capital improvement. However, over half of the Water Capital Improvement Reserves were used to cover Operating Fund deficits at the end of FYE 2022 and continues to cover any deficits.
The City should consider the following reservesto ensure there are funds available for operating shortfalls, emergencies, loans, and capital replacement. Typical reserve limits are as follows:
• Operations & maintenance reserves – three times the expenses during a billing cycle. • Emergency reserves – cost to replace most critical equipment, typically a well pump. • Debt reserves – specific amount required by certain funders when receiving a loan. • Capital reserves – average annual rehabilitation and rehab budget.
Current financial policies
The City accounts for the water system as a proprietary fund. This means that the water system must be a self-supporting activity which renders a service on a user-charge basis to residents and businesses.
Budget controls
In preparing its annual budgets, the City attempts to estimate revenues using realistic and conservative methods and budgets its expenditure activities in a prudent manner. The City Council adopts an annual budget and budget adjustments during the fiscal year to reflect any changed priorities and availability of additional revenues.
The City Council, working with City staff, continues to evaluate revenues and expenses closely as well as future economic trends and capital improvement needs. For many years, the City has been challenged to allocate limited resources to the needs of the community. One strategy the City continues to implement is to actively seek grant funding for projects to maximize the availability of ongoing revenues to meet ongoing expenses.
Financial reports prepared for governing board
Mercello & Company Certified Public Accountants issued a report on Dec. 8, 2022, on the City’s internal controls over financial reporting. The auditorsfound the financial statements present fairly, in all, material respects the different fund information and respective changes in financial position. It was noted that a 14 RCAC 2024 Water Rate Study—City of Trinidad
management discussion and analysis was omitted, but this did not affect the company’s opinion on the financial statements.
Current financial condition conclusion
Given the current rate structure, budget, financial indicators, and financial policies, the City should consider revising its water rate structure and increasing rates to keep up with increasing costs to inflation and to build reserves that can be used for O&M shortfalls, emergencies, loans (when applicable), and capital replacement.
15 RCAC 2024 Water Rate Study—City of Trinidad
5 Rate setting process
The rate study process contains many considerations that are unique to each water system. Examples of these considerations include:
• What are the system’s revenue sources?
• What is the system’s revenue requirement?
• What is the cost-of-service for different customer classes? • What special considerations could change the outlook for the next five years, such as:
o What is the age of the system?
o What system components need to be replaced and when?
o Is the system experiencing issues that need to be addressed? o Is additional capacity necessary to accommodate growth? o Are there new regulations that the system needs to accommodate? o Is there an expected change in customer base?
A water rate study consists of three main analyses: the revenue requirement, cost-of-service, and rate design. The purpose is to establish rates by designing a rate structure that fully recovers the revenue requirement while charging customer classes the appropriate amount as determined by the cost-ofservice.
Revenue requirement
The revenue requirement costs include expenses for operations and maintenance of the system; customer service and billing; capital replacement and upgrades to the system; and additional money for operational and emergency reserves.
Projected five-year budget
The City’s budget was looked at in two separate portions: the Water Operating Fund and the Capital Improvement Fund.
Water Fund
The rate study budget was based on the City’s FYE 2022 actuals, FYE 2023 budget and current actuals, and the FYE 2024 budget. To develop the budget for FYE2025-FYE2029, an annual inflation rate of 4% was assumed for each budget line item, unless City staff and RCAC staff determined that would not be an accurate calculation for a particular line.
Table 2 on the following page summarizes the Water Fund’s revenue vs. expenses by year. Table 3 shows where expenses are coming from by expense type in the year 2023 versus year 2025. 16 RCAC 2024 Water Rate Study—City of Trinidad
Figure 1 - Water fund's revenue vs. expenses by year
Figure 2- Water fund's estimated and projected expenses by expense type $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
2022 2023 2024 2025 2026 2027 2028 2029
Expenses Revenue
The City of Trinidad had budgeted for
Contracted Services with Coleman
Engineering to end in FYE 2024.
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
2023 Estimated
Expenses
2025 Projected
Expenses
17 RCAC 2024 Water Rate Study—City of Trinidad
Capital Improvement Fund
The City has a water capital improvement reserve fund that reserves the money to be spent on capital reserves or capital improvements. Coleman engineering prepared a 7-year capital improvement plan for the water treatment facility and City staff regularly work with engineers to apply for grant projects to replace water infrastructure. Two recent projects that were grant funded include the Small Community Drought Relief Program Tank & Pipelines and the Multi-Benefit Drought Relief Program Intertie.
There are four main options when it comes to funding large projects:
• The water capital improvement reserve fund
• Grants
• Loans and debt servicing
• A mix of the three options above
The project planning that occurs in CIP development allows the City to better leverage grants and loans to lower the burden on the reserve fund and keep rates affordable for customers.
Suggested replacement plan
RCAC used data provided by the City to develop a capital replacement plan that calculated the annual reserve required to replace system assets as they reached the end of their estimated remaining life. All current assets were assigned replacement costs via preliminary engineering reports or The Southwest Environmental Finance Center Valuation Table 2.0. These costs were plugged into a capital replacement model that typically assumes a water system will be able to obtain 75% grant funding for all capital replacement projects over $100,000, while providing 25% match from itsreserve funds. It was determined that these assumptions would be unaffordable for Trinidad customers. City staff and RCAC decided to use the below funding assumptions based on affordability and the City’s success in obtaining grants.
Replacement Value From Cash Grant Loan
$0 - $20,000* 100% 0% 0%
$20,001- $100,000 100% 0% 0%
$100,001 - $500,000 25% 75% 0%
$500,001 - $9,999,999 5% 85% 10%
$10,000,000 5% 85% 10%
*Assets below $5,000 are assumed to be budgeted for in the annual budget With these assumptions, the City should be collecting $152,264 annually from its customer to replace assets as they reach the end of their useful life. This averages out to approximately $38.62 per customer per month.
Suggested reserve funding
The City should aim to fund reserve accounts to the following goals, keeping in mind the need to keep rates affordable to its customers:
• Operations & maintenance reserves – three times the expenses during a billing cycle. $119,536 in O&M reserves is recommended.
• Emergency reserves – cost to replace most critical equipment, typically a well pump. $10,000 in emergency reserves is recommended.
18 RCAC 2024 Water Rate Study—City of Trinidad
• Debt reserves – specific amount required by certain funders when receiving a loan. No amount for debt reserves is currently recommended.
• Capital reserves – maintain a minimum of an average annual rehabilitation and replacement budget and up to 10% of the total asset value of approximately $12.925 million. It is recommended, at a minimum, that $152,264 be in capital reserves. The capital reserves could be funded up to $1,292,510.
This recommended funding means that the City should have at least $281,800 and up to $1,422,046 in investments for reserves, not including the debt reserves that are kept in a separate account. As of FYE 2022, the amount in reserves is $1,170,000.
Cost-of-service
Customers pay for annual O&M costs, annual administrative costs and reserve costs through a base rate and usage charge. The base rate is designed to cover fixed costs while the usage charges are designed to cover variable costs. Cost-of-service varies by customer classes based on water usage patterns, the potential demand each has on the water system, and the cost of infrastructure needed to serve each class.
Currently, the City has two customer classes: Inside city limits and outside city limits. The customers are charged a variable base rate based on location (inside vs outside city limits) and a variable usage rate based on location. The City collects approximately 65% of its revenue through the base rates and 35% of its revenue from the usage. RCAC estimated that 69% of the City’s expenses come from fixed costs, while 31% comes from variable costs.
While there is no single approach to rate design and setting, RCAC believes costs should be allocated to customers as can reasonably be determined or estimated while respecting the policy preference of the water agency as long as there is a reasonable cost basis.
Due to water use statistics and industry trends the rate structure recommended by RCAC allocates costs by:
1. Establishing a variable base rate by meter size- calculated using meter equivalency ratio charges (flow capacity, meter cost, fire demand) and flat rate customer charges as described in AWWA’s M1 Principles of Water Rates, Fees, and Charges.
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
Based on current City policy and preference, two rate options being presenting allocate costs by:
1. Continuing a variable base rate by location - inside city limits or outside city limits
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
Current trends are for usage charges to be a flat dollar amount per volume, as the cost to produce water is assumed to be the same regardless of volume unless there is ample data and recordkeeping to prove otherwise. As such, it is recommended that a variable usage rate by location not be used, see California case law regarding Proposition 218 for additional information on this matter.
Rate design
19 RCAC 2024 Water Rate Study—City of Trinidad
The revenue requirement and cost-of-service are used to help design the rates. Rates must be designed to fully cover the revenue requirement. Costs can generally be segmented into two categories: a) fixed costs, which are incurred whether customers use the water or not, and b) variable costs that are dependent on usage. There are numerous ways to design rates to collect the revenue requirement. Water systems usually charge a base rate, which is often intended to collect fixed costs, and a consumption rate, which is often intended to collect variable costs.
RCAC estimates that 69% of the City’s expenses come from fixed costs, while 31% comes from variable costs. The three rate options presented generate 64-67% of the revenue base rates and 33-35% of the revenue from usage charges.
There are other considerations that may factor into how water systems design their rates specific to their systems, including affordability criteria. While there is no single approach to rate design and setting, RCAC believes costs should be allocated to customers as can reasonably be determined or estimated while respecting the policy preference of the water agency as long as there is a reasonable cost basis. The City should consider if the following rate structure changes would align with their policy preferences:
1. Establishing a variable base rate by meter size- calculated using meter equivalency ratio charges (flow capacity, meter cost, fire demand) and flat rate customer charges as described in AWWA’s M1 Principles of Water Rates, Fees, and Charges.
2. Charging a uniform usage charge – where the same dollar amount is charged per volume of water used.
These recommendations were incorporated into the model for Rate Option # 3. 20 RCAC 2024 Water Rate Study—City of Trinidad
6 Rate options
Rate options overview
The following three rate options are being presented to the City Council for consideration. The options differ in rate structure and assumptions made regarding funding from the City’s General Fund. Rate Option #1 is considered unaffordable based on the %MHI.
While keeping rates affordable can be a goal of any city council or water system board, a responsibility of all city councils and water system boards is to collect rates that cover the true cost of providing water, including capital reserves. Not collecting the true cost of water puts the water system’s infrastructure and future in jeopardy.
A summary of the rate options are:
• Rate Option #1 (RO1) – It is the most expensive option for customers because it does not incorporate a $300,000 gift from the general fund and a $300,000 loan from the general fund. It maintains the City’s current base rate structure and after a 40%-75% increase in charges in FYE 2025, has an 8% increase in years FYE 2026-FYE 2029. • Rate Option #2 (RO2) – It maintains the City’s current base rate structure and includes a $300,000 gift from the general fund and a $300,000 loan from the general fund to keep rates more affordable than RO1. After a 6%-32% increase in charges in FYE2025, this option has a 10% increase in years FYE 2026-FYE 2029.
• Rate Option #3 (RO3) – Is similar in cost to the average inside city limit residential customer as RO2, and more affordable for the average outside city limit residential customer. This is due to the base rate being based on meter size instead of location, which pushes costs from outside city limit customers to large meter customers. It includes a $300,000 gift from the general fund and a $300,000 loan from the general fund to keep rates more affordable. In FYE 2025, charges increase 0% - 40%, with increases averaging 10% for FYE 2026-FYE 2029.
Figure 3 - Average customer bill in comparison to other local water agencies 21 RCAC 2024 Water Rate Study—City of Trinidad
Rate Option #1
Rate Option #1 is the most expensive option for customers because it does not incorporate a $300,000 gift from the general fund and a $300,000 loan from the general fund. It maintains the City’s current base rate structure and after a 40%-75% increase in charges in FYE2025, has an 8% increase in years FYE2026- FYE2029.
Rate Option #1
Standard Rates
2025 2026 2027 2028 2029
Inside City Limits 75.47 81.51 88.03 95.07 102.68
Outside City Limits 94.34 101.88 110.04 118.84 128.35
Rate per 100 CF 7.75 8.37 9.04 9.76 10.64
Impact of Rate Option #1
Percent increases for Rate Option #1
Percent Increases - Rate Option #1
Standard Rates
2025 2026 2027 2028 2029
Inside City Limits 67% 8% 8% 8% 8%
Outside City Limits 67% 8% 8% 8% 8%
Rate per 100 CF 40-75% 8% 8% 8% 8%
Customer bills and affordability for Rate Option #1
The monthly bill for the average ¾” inside residential customer would be $121.97, while the average ¾” outside residential customer would have a bill of $140.84. The %MHI is below, the SWRCB first threshold of 1.5% is exceeded, with the second threshold of 2.5% MHI being exceeded in FYE2029 for inside customers and FYE2027 for outside customers.
FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Inside City
Limits 1.91% 2.06% 2.23% 2.40% 2.61%
Outside City
Limits 2.20% 2.38% 2.57% 2.78% 3.01%
22 RCAC 2024 Water Rate Study—City of Trinidad
Rate Option #1 Budget
Expenses 2025 2026 2027 2027 2029
Salaries & Benefits $ 254,564 $ 264,747 $ 275,337 $ 286,350 $ 297,804 O&M $ 101,244 $ 105,294 $ 109,506 $ 113,886 $ 118,441
Contracted Services $ 62,400 $ 64,896 $ 67,492 $ 70,192 $ 72,999 Special Services $ 28,600 $ 29,744 $ 30,934 $ 32,171 $ 33,458 Insurance $ 14,801 $ 15,393 $ 16,009 $ 16,649 $ 17,315
Other Departments $ 9,360 $ 9,734 $ 10,124 $ 10,529 $ 10,950 Miscellaneous $ 7,176 $ 7,463 $ 7,762 $ 8,072 $ 8,395
Sub-Total Annual Expenses $ 478,146 $ 497,272 $ 517,162 $ 537,849 $ 559,363 Capital Reserves $ 152,264 $ 137,185 $ 131,326 $ 128,420 $ 127,359 O&M Reserve $ 5,977 $ 5,977 $ 5,977 $ 5,977 $ 5,977
Emergency Reserve $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Debt Reserve $ - $ - $ - $ - $ -
Debt Service Charge $ - $ - $ - $ - $ -
Sub-Total Reserve Funding $ 159,241 $ 144,162 $ 138,303 $ 135,397 $ 134,335 Total Expenses $ 637,387 $ 641,434 $ 655,465 $ 673,246 $ 693,698 Revenue 2025 2026 2027 2027 2029
Sales Revenue $ 480,232 $ 520,490 $ 564,117 $ 611,393 $ 662,622 Uncollectable Receivables $ (960) $ (1,041) $ (1,128) $ (1,223) $ (1,325) Water Penalties $ - $ - $ - $ - $ -
New Water Hook-ups $ - $ - $ - $ - $ -
General Fund Contract Operator Payment $ - $ - $ - $ - $ - General Fund Loan $ - $ - $ - $ - $ -
Total Revenue $ 479,271 $ 519,449 $ 562,989 $ 610,170 $ 661,297 Net Loss or Gain (Short/Over to Reserves) $ (158,116) $ (121,984) $ (92,477) $ (63,076) $ (32,401) Net Cashflow (Contribution to Reserves) $ 1,125 $ 22,178 $ 45,826 $ 72,321 $ 101,934 Net Loss or Gain (Short/Over to Reserves) Over 5 Year Period Net Cashflow (Contribution to Reserves)
$ (468,053)
$ 243,384
23 RCAC 2024 Water Rate Study—City of Trinidad
Rate Option #2
Rate Option #2 maintains the City’s current base rate structure and includes a $300,000 gift from the general fund and a $300,000 loan from the general fund to keep rates more affordable than RO1. After a 6%-32% increase in charges in FYE2025, has a 10% increase in years FYE2026-FYE2029.
Rate Option #2
Standard Rates
2025 2026 2027 2028 2029
Inside City Limits 59.11 65.02 71.52 78.68 86.54
Outside City Limits 73.89 81.28 89.40 98.34 108.18
Rate per 100 CF 5.85 6.44 7.08 7.79 8.56
Impacts of Rate Option #2
Percent increases for Rate Option #2
Percent Increases - Rate Option #2
Standard Rates
2025 2026 2027 2028 2029
Inside City Limits 31% 10% 10% 10% 10%
Outside City Limits 31% 10% 10% 10% 10%
Rate per 100 CF 6-32% 10% 10% 10% 10%
Customer bills and affordability for Rate Option #2
The monthly bill for the average ¾” inside residential customer would be $94.21, while the average ¾” outside residential customer would have a bill of $108.99. The %MHI is below, the SWRCB first threshold of 1.5% is exceeded by both inside and outside customers by FYE2026, with the second threshold of
2.5% MHI being exceeded in FYE2029 for outside customers.
FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Inside City
Limits 1.47% 1.62% 1.78% 1.96% 2.16%
Outside City
Limits 1.71% 1.88% 2.06% 2.27% 2.50%
24 RCAC 2024 Water Rate Study—City of Trinidad
Rate Option #2 Budget
Expenses 2025 2026 2027 2027 2029
Salaries & Benefits $ 254,564 $ 264,747 $ 275,337 $ 286,350 $ 297,804 O&M $ 101,244 $ 105,294 $ 109,506 $ 113,886 $ 118,441
Contracted Services $ 62,400 $ 64,896 $ 67,492 $ 70,192 $ 72,999 Special Services $ 28,600 $ 29,744 $ 30,934 $ 32,171 $ 33,458 Insurance $ 14,801 $ 15,393 $ 16,009 $ 16,649 $ 17,315
Other Departments $ 9,360 $ 9,734 $ 10,124 $ 10,529 $ 10,950 Miscellaneous $ 7,176 $ 7,463 $ 7,762 $ 8,072 $ 8,395
Sub-Total Annual Expenses $ 478,146 $ 497,272 $ 517,162 $ 537,849 $ 559,363 Capital Reserves $ 152,264 $ 137,185 $ 131,326 $ 128,420 $ 127,359 O&M Reserve $ 5,977 $ 5,977 $ 5,977 $ 5,977 $ 5,977
Emergency Reserve $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Debt Reserve $ - $ - $ - $ - $ -
Debt Service Charge $ - $ - $ - $ - $ -
Sub-Total Reserve Funding $ 159,241 $ 144,162 $ 138,303 $ 135,397 $ 134,335 Total Expenses $ 637,387 $ 641,434 $ 655,465 $ 673,246 $ 693,698 Revenue 2025 2026 2027 2027 2029
Sales Revenue $ 371,527 $ 410,095 $ 452,661 $ 499,638 $ 551,485 Uncollectable Receivables $ (743) $ (820) $ (905) $ (999) $ (1,103) Water Penalties $ - $ - $ - $ - $ -
New Water Hook-ups $ - $ - $ - $ - $ -
General Fund Contract Operator Payment $ 300,000 $ - $ - $ - $ - General Fund Loan $ - $ 100,000 $ 75,000 $ 50,000 $ 25,000 Total Revenue $ 670,784 $ 509,275 $ 526,755 $ 548,639 $ 575,382 Net Loss or Gain (Short/Over to Reserves) $ 33,398 $ (132,159) $ (128,710) $ (124,607) $ (118,316) Net Cashflow (Contribution to Reserves) $ 192,638 $ 12,003 $ 9,593 $ 10,790 $ 16,019 Net Loss or Gain (Short/Over to Reserves) Over 5 Year Period Net Cashflow (Contribution to Reserves)
$ (470,394)
$ 241,044
25 RCAC 2024 Water Rate Study—City of Trinidad
Rate Option #3
Rate Option #3 is RCAC’s recommendation. It is similar in cost to the average inside city limit residential customer as RO2, and more affordable for the average outside city limit residential customer. This is due to the base rate being based on meter size instead of location. It includes a $300,000 gift from the general fund and a $300,000 loan from the general fund to keep rates more affordable. In FYE2025, charges increase 0% - 40%, with increases averaging 10% for FYE2026-FYE2029.
Rate Option #3
Standard Rates
Meter Size 2025 2026 2027 2028 2029
3/4 63.44 69.72 76.72 84.46 93.02
1 85.03 92.26 101.00 110.91 122.04
1 ½ 120.33 131.73 144.71 159.16 175.21
4 602.40 667.14 735.45 809.73 891.01
Rate per 100 CF 5.54 5.93 6.35 6.99 7.71
Impacts of Rate Option #3
Percent increases for Rate Option #3
Percent Increases - Rate Option #3
Standard Rates
Meter Size 2025 2026 2027 2028 2029
3/4 12-40% 10% 10% 10% 10%
1 50-88% 9% 9% 10% 10%
1 ½ 113-166% 9% 10% 10% 10%
4 184-255% 11% 10% 10% 10%
Rate per 100 CF 0-25% 7% 7% 10% 10%
Customer bills and affordability for Rate Option #3
The monthly bill for the average ¾” inside residential customer would be $96.68, while the average ¾” outside residential customer would have a bill of $96.68. The %MHI is below, the SWRCB first threshold of 1.5% is exceeded by both inside and outside customers in FYE2025, with the second threshold of 2.5% MHI being not being exceeded through FYE2029.
FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Inside City
Limits 1.51% 1.65% 1.80% 1.98% 2.18%
Outside City
Limits 1.51% 1.65% 1.80% 1.98% 2.18%
26 RCAC 2024 Water Rate Study—City of Trinidad
Rate Option #3 Budget
Expenses 2025 2026 2027 2027 2029
Salaries & Benefits $ 254,564 $ 264,747 $ 275,337 $ 286,350 $ 297,804 O&M $ 101,244 $ 105,294 $ 109,506 $ 113,886 $ 118,441
Contracted Services $ 62,400 $ 64,896 $ 67,492 $ 70,192 $ 72,999 Special Services $ 28,600 $ 29,744 $ 30,934 $ 32,171 $ 33,458 Insurance $ 14,801 $ 15,393 $ 16,009 $ 16,649 $ 17,315
Other Departments $ 9,360 $ 9,734 $ 10,124 $ 10,529 $ 10,950 Miscellaneous $ 7,176 $ 7,463 $ 7,762 $ 8,072 $ 8,395
Sub-Total Annual Expenses $ 478,146 $ 497,272 $ 517,162 $ 537,849 $ 559,363 Capital Reserves $ 152,264 $ 137,185 $ 131,326 $ 128,420 $ 127,359 O&M Reserve $ 5,977 $ 5,977 $ 5,977 $ 5,977 $ 5,977
Emergency Reserve $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Debt Reserve $ - $ - $ - $ - $ -
Debt Service Charge $ - $ - $ - $ - $ -
Sub-Total Reserve Funding $ 159,241 $ 144,162 $ 138,303 $ 135,397 $ 134,335 Total Expenses $ 637,387 $ 641,434 $ 655,465 $ 673,246 $ 693,698 Revenue 2025 2026 2027 2027 2029
Sales Revenue $ 378,251 $ 412,187 $ 449,706 $ 495,037 $ 545,442 Uncollectable Receivables $ - $ - $ - $ - $ -
Water Penalties $ - $ - $ - $ - $ -
New Water Hook-ups $ - $ - $ - $ - $ -
General Fund Contract Operator Payment $ 300,000 $ - $ - $ - $ - General Fund Loan $ - $ 100,000 $ 75,000 $ 50,000 $ 25,000 Total Revenue $ 678,251 $ 512,187 $ 524,706 $ 545,037 $ 570,442 Net Loss or Gain (Short/Over to Reserves) $ 40,864 $ (129,247) $ (130,759) $ (128,208) $ (123,256) Net Cashflow (Contribution to Reserves) $ 200,105 $ 14,915 $ 7,544 $ 7,188 $ 11,079 $ (470,606)
$ 240,832
Net Loss or Gain (Short/Over to Reserves) Over 5 Year Period Net Cashflow (Contribution to Reserves)
27 RCAC 2024 Water Rate Study—City of Trinidad
7 Recommendations
Rates, reserve funding, other recommendations
The City’s water fund net position in FYE 2022 had a net decrease. If the rates are not adjusted the system would be risking the ability to provide safe and affordable drinking water into the foreseeable future.
RCAC recommends adopting Rate Option #3 due to its cost allocation and affordability.
Proposition 218
When the City Council selects a rate option, this triggers the Proposition 218 process. Proposition 218 is a voter-approved initiative in California that restricts the authority of government agencies to charge certain taxes or fees. This proposition regulates property-related fees and charges that are imposed on a parcel. Following a California Supreme Court decision, water and sewer rates are now also subject to Proposition 218. Therefore, the City needs to follow Proposition 218 guidelines and related activities to legally pass new rates, which includes sending out a public notice and holding a public hearing.
To be in compliance with Proposition 218, the public notice needs to contain certain information. This information includes how and why the rate increase was proposed, the consequences of not raising rates, how charges are allocated among different types of users, and the date, time, and location of the public hearing. Proposition 218 requires that a public hearing be held at least 45 days after the public notice has been sent out. After the public hearing, the City Council can adopt the new rates through a resolution if there is no majority protest (50% plus one) from the property owners/rate payers. All protests are required to be in writing with the protester’s name and affected parcel number. Proposition 218 does not apply to connection charges, capacity charges, wholesale rates, groundwater pumping fees and conservation penalties.
General implementation advice and key points
Key points to remember with this rate adjustment are:
• Successful utilities are those that strive to be transparent. In day-to-day operations, a water system should strive to promote its services (highlights and the low points), and continuously educate residents on why it is necessary to raise and adjust rates. • Collecting for the true cost of water includes annual operating and administrative expenses as well as the funding of reserve accounts so that a water system can provide reliable, safe drinking water
• Every year revenues versus expenditures should be reviewed to ensure that the rates cover all costs to the system. If they do not, a rate study should be considered. • Maintaining reserve policies aids in transparency, ensures the true cost of water is collected through water rates, and guides the annual review of revenues versus expenditures. • If possible, CIP reserves should be moved to and maintained in the highest interest-bearing accounts available to offset inflation unless the cost of doing so is more than the interest earned on the account.
• Conducting rate studies every five years helps to stabilize water rates for customers in the longterm. 28 RCAC 2024 Water Rate Study—City of Trinidad
8 Appendices
8.1 Projected five-year budget (FYE2025 – FYE 2029)
8.2 City of Trinidad’s capital improvement plan
8.3 Water treatment facility replacement plan
8.1 - Projected five-year budget (FYE2025 – FYE 2029)
29 RCAC 2024 Water Rate Study—City of Trinidad
Budget Date: 05/22/24 Exhibit 2
City of Trinidad Inflation Factor (%): 4.00
Loan Interest Rate (%) 3.00
System Number: CA1210018
Expense Type Account Name 2022 2023 2024
% Belonging
to Water 2025 2026 2027 2028 2029
Salaries & Benefits Employee Wages $ 125,741.86 $ 227,210 $ 207,967 100% $ 216,286 $ 224,937 $ 233,935 $ 243,292 $ 253,024 Salaries & Benefits Fringe Benefits $ 713.16 $ 4,954 $ 1,584 100% $ 1,647 $ 1,713 $ 1,782 $ 1,853 $ 1,927 Salaries & Benefits Deferred Retirement $ 10,939.15 $ 13,195 $ 16,757 100% $ 17,427 $ 18,124 $ 18,849 $ 19,603 $ 20,387 Salaries & Benefits Medical Insurance & Expense $ 14,009.56 $ 22,398 $ 31,005 100% $ 32,246 $ 33,535 $ 34,877 $ 36,272 $ 37,723 Salaries & Benefits Health Insurance Deductible Benefit $ 1,045.20 $ 209 $ 1,356 100% $ 1,410 $ 1,467 $ 1,525 $ 1,586 $ 1,650 Salaries & Benefits Worker's Compensation $ 2,828.20 $ 9,925 $ 6,913 100% $ 7,189 $ 7,477 $ 7,776 $ 8,087 $ 8,411 Salaries & Benefits Employee Mileage Reimbursement $ 193 $ - 100% $ - $ - $ - $ - $ - Salaries & Benefits Payroll Tax $ 10,610.37 $ 18,281 $ 17,191 100% $ 17,879 $ 18,594 $ 19,338 $ 20,111 $ 20,916 Salaries & Benefits Grant Payroll Alllocation $ (8,417.44) $ (33,286) $ (38,000) 100% $ (39,520) $ (41,101) $ (42,745) $ (44,455) $ (46,233) Insurance Crime, Cyber, & Pollution Insurance $ 303.80 $ 319 $ 600 100% $ 624 $ 649 $ 675 $ 702 $ 730 Insurance General Liability Insurance $ 7,848.75 $ 9,756 $ 10,632 100% $ 11,057 $ 11,500 $ 11,960 $ 12,438 $ 12,935 Insurance Propery & Casualty Insurance $ 2,739.43 $ 2,470 $ 3,000 100% $ 3,120 $ 3,245 $ 3,375 $ 3,510 $ 3,650 Other Departments City Attorney - Admin Tasks $ - $ 140 $ 500 100% $ 520 $ 541 $ 562 $ 585 $ 608 Other Departments City Engineer - Admin Tasks $ 24,556.14 $ 4,086 $ 3,500 100% $ 3,640 $ 3,786 $ 3,937 $ 4,095 $ 4,258 Special Services Engineer Special Projects $ 39,795.75 $ 2,132 $ 5,000 100% $ 5,200 $ 5,408 $ 5,624 $ 5,849 $ 6,083 Other Departments City Planner - Admin Tasks $ 4,505.61 $ 1,396 $ 5,000 100% $ 5,200 $ 5,408 $ 5,624 $ 5,849 $ 6,083 Special Services Accountant $ 8,939.07 $ 10,006 $ 10,000 100% $ 10,400 $ 10,816 $ 11,249 $ 11,699 $ 12,167 Special Services Auditor $ 7,516.25 $ 9,660 $ 10,000 100% $ 10,400 $ 10,816 $ 11,249 $ 11,699 $ 12,167 Miscellaneous Bad Debts $ - $ - $ 100 100% $ 104 $ 108 $ 112 $ 117 $ 122 Special Services Tech Support/Financial Advisor $ 506.25 $ 1,755 $ 2,500 100% $ 2,600 $ 2,704 $ 2,812 $ 2,925 $ 3,042 O&M Utilities $ 16,703.77 $ 22,274 $ 23,000 100% $ 23,920 $ 24,877 $ 25,872 $ 26,907 $ 27,983 Miscellaneous Dues & Memberships $ 845.00 $ 872 $ 950 100% $ 988 $ 1,028 $ 1,069 $ 1,111 $ 1,156 Miscellaneous Municipal Expense $ 3,428.90 $ 240 $ 250 100% $ 260 $ 270 $ 281 $ 292 $ 304 Miscellaneous Office Supplies & Expense $ 3,208.41 $ 3,345 $ 5,000 100% $ 5,200 $ 5,408 $ 5,624 $ 5,849 $ 6,083 Miscellaneous Bank Charges $ 40.00 $ 212 $ 100 100% $ 104 $ 108 $ 112 $ 117 $ 122 Miscellaneous Training/Education $ 237.53 $ 1,083 $ 500 100% $ 520 $ 541 $ 562 $ 585 $ 608 Contracted Services Contracted Services $ 302,088.42 $ 389,465 $ 60,000 100% $ 62,400 $ 64,896 $ 67,492 $ 70,192 $ 72,999 Miscellaneous Misc Expenses $ 643.10 $ 315 $ - 100% $ - $ - $ - $ - $ - O&M Telephone $ 896.01 $ 7,886 $ 1,800 100% $ 1,872 $ 1,947 $ 2,025 $ 2,106 $ 2,190 O&M Cable & Internet Services $ 741.40 $ 743 $ 750 100% $ 780 $ 811 $ 844 $ 877 $ 912 O&M Licenses & Fees $ 3,639.00 $ 4,517 $ 5,000 100% $ 5,200 $ 5,408 $ 5,624 $ 5,849 $ 6,083 O&M Vehicle Fuel and Oil $ 1,410.58 $ 2,671 $ 5,800 100% $ 6,032 $ 6,273 $ 6,524 $ 6,785 $ 7,057 O&M Vehicle Repairs $ 499.01 $ 2,007 $ 2,500 100% $ 2,600 $ 2,704 $ 2,812 $ 2,925 $ 3,042 O&M Building Repairs and Maintenance $ - $ 65 $ 2,500 100% $ 2,600 $ 2,704 $ 2,812 $ 2,925 $ 3,042 O&M Security System $ 352.00 $ 351 $ 500 100% $ 520 $ 541 $ 562 $ 585 $ 608 O&M Materials, Supplies, and Equipment $ 2,226.07 $ 3,159 $ 3,500 100% $ 3,640 $ 3,786 $ 3,937 $ 4,095 $ 4,258 O&M Equipment Repairs & Maintenance $ 18,823.47 $ 15,553 $ 7,500 100% $ 7,800 $ 8,112 $ 8,436 $ 8,774 $ 9,125 O&M Water Lab Fees $ 5,300.00 $ 7,170 $ 7,500 100% $ 7,800 $ 8,112 $ 8,436 $ 8,774 $ 9,125 O&M Water Plant Chemical $ 20,156.76 $ 8,975 $ 9,000 100% $ 9,360 $ 9,734 $ 10,124 $ 10,529 $ 10,950 O&M Water Line Hook-Ups $ 5,840.82 $ - $ - 100% $ - $ - $ - $ - $ - O&M Water Line Repair $ 10,674.30 $ 15,256 $ 25,000 100% $ 26,000 $ 27,040 $ 28,122 $ 29,246 $ 30,416 O&M Water Plant Repair $ - $ - $ 3,000 100% $ 3,120 $ 3,245 $ 3,375 $ 3,510 $ 3,650 O&M Reserve Capital Reserves $ - $ - 100% $ - $ - $ - $ - $ - Miscellaneous Street Light $ 24 100%
Miscellaneous Match Expense $ 13 100%
$ 651,973 $ 790,956 $ 459,756 $ 45 $ 478,146 $ 497,272 $ 517,162 $ 537,849 $ 559,363 Emergency Reserve Operating Reserve Funding $ - $ - $ - 100% $ 5,977 $ 5,977 $ 5,977 $ 5,977 $ 5,977 Debt Reserve Emergency Reserve Funding $ - $ - $ - 100% $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 Capital Reserves Debt Reserve Funding $ - $ - $ - 100% $ - $ - $ - $ - $ - Capital Reserves Replacement of Existing Capital Assets $ - $ - $ - 100% $ 152,264 $ 137,185 $ 131,326 $ 128,420 $ 127,359 Capital Reserves Replacement of Funded Project Assets $ - $ - $ - 100% $ - $ - $ - $ - $ - Debt Service Charge Reserves for Additional Capital Assets $ - $ - $ - 100% $ (0) $ - $ - $ - $ - Debt Service $ - $ - $ - 100% $ - $ - $ - $ - $ -
$ - $ - $ - $ 7 $ 159,241 $ 144,162 $ 138,303 $ 135,397 $ 134,335 $ 651,973 $ 790,956 $ 459,756 $ 52 $ 637,387 $ 641,434 $ 655,465 $ 673,246 $ 693,698 Sub-Total Annual Expenses
Expenses
Sub-Total Reserve Funding
Total Expenses
8.2 – City of Trinidad’s capital improvement plan
30 RCAC 2024 Water Rate Study—City of Trinidad
Capital Replacement Program AWWA Cash-Needs Approach Exhibit 1 City of Trinidad Date: 5/20/24
System Number: CA1210018
Service Connections: 326
Quantity Asset
Year
Acquired
Unit Cost
(Historic,
Current or
Future)
Cost
Type
(H, C,
F)
%
Belonging
to Water
Estimated Historic
Cost (Water only)
Normal
Estimated
Life
Current
Age
Estimated
Current Cost
Planned
Remaining
Life
Estimated
Remaining
Life
Estimated
Future Cost
Fund
with
Cash
Fund
with
Grant
Fund
with
Loan
Existing
Reserves
Annual
Reserve
Required
Replacement of Existing Capital Assets
1 Luffenholtz Creek Infiltration Gallery 1980 $730,000 C 100% $152,239 45 44 730,000 1 5 888,157 5% 85% 10% 0 8,793 30 *3 perforated pipes buried ten feet below surface 1980 $168 C 100% $1,051 45 44 5,040 1 5 6,132 100% 0% 0% 0 1,214 - Wet Well Pump (approx 175 gpm each) 2014 $7,000 C 100% $0 35 10 0 25 25 0 100% 0% 0% 0 Not Cap. 1 Creek Flow meter 2017 $8,000
C 100%
$6,234 15 7 8,000 8 8 10,949
100% 0% 0% 0 1,345
1 Source Meter 1980 $8,000
C 100%
$1,668 15 44 8,000 -29 5 9,733
100% 0% 0% 0 1,927
- Westhaven Treatment Plant (60-120gpm) 2016 $2,136,000 H 100% $0 60 8 0 52 25 0 100% 0% 0% 0 Not Cap. 1 Sediment Reduction 2015 $1,670,720 H 100% $1,670,720 60 9 2,277,020 51 25 6,070,162 5% 85% 10% 0 11,428 - *Flocculator 2016 $0 C 100% $0 15 8 0 7 7 0 100% 0% 0% 0 Not Cap. -
*Polymer Feed 2016 $0
C 100%
$0 15 8 0 7 7 0
100% 0% 0% 0 Not Cap.
- *Mixed Media filters 2016 $0 C 100% $0 15 8 0 7 7 0 100% 0% 0% 0 Not Cap. - *Chlorine Feed 2016 $0 C 100% $0 15 8 0 7 7 0 100% 0% 0% 0 Not Cap. - *Chlorine contact Pipe 2016 $0 C 100% $0 60 8 0 52 52 0 100% 0% 0% 0 Not Cap. - *Backwash tank (20,000 gallons) 2016 $0 C 100% $0 60 8 0 52 52 0 100% 0% 0% 0 Not Cap. - Turbidity Monitoring 2013 $120,155 H 100% $0 15 11 0 4 5 0 100% 0% 0% 0 Not Cap. - 2013 Water Plant Upgrade 2013 $231,720 H 100% $0 60 11 0 49 50 0 100% 0% 0% 0 Not Cap. 1 Raw Water Turbidimeter 1980 $3,430
c 100%
$715 15 44 3,430 -29 1 3,567
100% 0% 0% 0 Not Cap.
1 Finished Water Turbidimeter 2023 $3,430 c 100% $3,310 15 1 3,430 14 15 6,177 100% 0% 0% 0 398 1 Filter #1 Turbidmeter 2013 $3,430 c 100% $2,318 15 11 3,430 4 1 3,567 100% 0% 0% 0 Not Cap.
1 Filter #2 Turbidmeter 2013 $3,430
c 100%
$2,318 15 11 3,430 4 1 3,567
100% 0% 0% 0 Not Cap.
1 Filter #3 Turbidmeter 2013 $3,430
c 100%
$2,318 15 11 3,430 4 1 3,567
100% 0% 0% 0 Not Cap.
1 SCM 2013 $13,000
c 100%
$8,785 15 11 13,000 4 2 14,061
100% 0% 0% 0 7,013
1 CL17 - Cl2 residual 2013 $3,325 c 100% $2,247 15 11 3,325 4 15 5,988 100% 0% 0% 0 385 - Flow Meter 2013 $0 c 100% $0 15 11 0 4 0 0 100% 0% 0% 0 0 1 Mid Turbidmeter 2013 $3,430
c 100%
$2,318 15 11 3,430 4 1 3,567
100% 0% 0% 0 Not Cap.
1 Rinse to Waste 2013 $5,000
c 100%
$3,379 15 11 5,000 4 1 5,200
100% 0% 0% 0 5,200
1 Poly Pump #1 2013 $1,000 c 100% $676 15 11 1,000 4 2 1,082 100% 0% 0% 0 Not Cap. 1 Poly Pump #2 2013 $1,000 c 100% $676 15 11 1,000 4 2 1,082 100% 0% 0% 0 Not Cap. 1 CL2 Pump 2013 $1,000 c 100% $676 15 11 1,000 4 2 1,082 100% 0% 0% 0 Not Cap. 1 Wet Well Pump #1 2013 $5,000 c 100% $3,379 15 11 5,000 4 3 5,624 100% 0% 0% 0 1,865 1 Wet Well Pump #2 2013 $5,000 c 100% $3,379 15 11 5,000 4 3 5,624 100% 0% 0% 0 1,865 1 Flash Mixer #1 2013 $3,500 c 100% $2,365 15 11 3,500 4 5 4,258 100% 0% 0% 0 Not Cap. 1 Flash Mixer #2 2013 $3,500 c 100% $2,365 15 11 3,500 4 5 4,258 100% 0% 0% 0 Not Cap. 1 Backwash Pump 2013 $5,000 c 100% $3,379 15 11 5,000 4 4 5,849 100% 0% 0% 0 1,451 1 Intermediate Pump #1 - Booster Pump 2013 $3,500 c 100% $2,365 15 11 3,500 4 5 4,258 100% 0% 0% 0 Not Cap. 1 Intermediate Pump #2 2013 $3,500 c 100% $2,365 15 11 3,500 4 5 4,258 100% 0% 0% 0 Not Cap. 1 Soda Ash Pump 2013 $1,000 c 100% $676 15 11 1,000 4 3 1,125 100% 0% 0% 0 Not Cap. 1 Recycle Pump 2013 $5,000 c 100% $3,379 15 11 5,000 4 1 5,200 100% 0% 0% 0 5,200 1 CL2 Residual 2013 $3,500 c 100% $2,365 15 11 3,500 4 5 4,258 100% 0% 0% 0 Not Cap. 1 Sludge Removal 2013 $5,000 c 100% $3,379 15 11 5,000 4 5 6,083 100% 0% 0% 0 1,205 1 Level Transducers 2013 $9,500 c 100% $6,420 15 11 9,500 4 6 12,021 100% 0% 0% 0 1,979 1 Tank Floats - Kill Switch 2013 $750 c 100% $507 15 11 750 4 6 949 100% 0% 0% 0 Not Cap. 1 SC-100 - Controller 2013 $3,505 c 100% $2,369 15 11 3,505 4 1 3,645 100% 0% 0% 0 Not Cap. 1 SC-200 (2) - Controller 2013 $7,010 c 100% $4,737 15 11 7,010 4 1 7,290 100% 0% 0% 0 7,290 - Remaining Turbidity Equipment 2013 $103,005 c 100% $0 15 11 0 4 4 0 100% 0% 0% 0 Not Cap. - Remaining Treatment Plant Equipment 2013 $109,700 c 100% $0 60 11 0 49 49 0 100% 0% 0% 0 Not Cap. 250,000 Westhaven Tank 1 (150,000 gallons, will replace with 250,000 gallon tank) 1980 $2 C 100% $127,213 60 44 610,000 16 16 1,142,519 5% 85% 10% 0 3,438 - Westhaven Tank 2 (150,000 gallons, being replaced
now by grant below) 1980 $2 C 100% $0 60 44 0 16 16 0 100% 0% 0% 0 Not Cap. 191 2" Pipe (half) 1980 $75 C 100% $2,987 50 44 14,325 6 5 17,429 100% 0% 0% 0 3,451 691 3" Pipe (half) 1980 $75 C 100% $10,800 50 44 51,788 6 5 63,007 100% 0% 0% 0 12,476 4,232 4" Pipe (half) 1980 $250 C 100% $220,616 40 44 1,057,875 -4 5 1,287,067 5% 85% 10% 0 12,743 6,474 6" Pipe (half) 1980 $250 C 100% $337,506 40 44 1,618,375 -4 10 2,395,590 5% 85% 10% 0 11,711 3,615 8" Pipe ((10979 ft - 3750 ft for SCDRP Project)/2) 1980 $300 C 100% $226,137 40 44 1,084,350 -4 15 1,952,853 5% 85% 10% 0 6,285 1,408 10" Pipe ((6566 ft - 3750 ft for SCDRP Project)/2). 1980 $300 C 100% $88,090 40 44 422,400 -4 15 760,719 5% 85% 10% 0 2,448 191 2" Pipe (half) 1980 $75 C 100% $2,987 40 44 14,325 -4 20 31,388 100% 0% 0% 0 1,496 691 3" Pipe (half) 1980 $75 C 100% $10,800 40 44 51,788 -4 20 113,473 25% 75% 0% 0 1,352 4,232 4" Pipe (half) 1980 $250 C 100% $220,616 40 44 1,057,875 -4 20 2,317,934 5% 85% 10% 0 5,524 6,474 6" Pipe (half) 1980 $250 C 100% $337,506 40 44 1,618,375 -4 25 4,314,323 5% 85% 10% 0 8,122 3,615 8" Pipe ((10979 ft - 3750 ft for SCDRP Project)/2) 1980 $300 C 100% $226,137 40 44 1,084,350 -4 25 2,890,700 5% 85% 10% 0 5,442 1,408 10" Pipe ((6566 ft - 3750 ft for SCDRP Project)/2) 1980 $300 C 100% $88,090 40 44 422,400 -4 25 1,126,049 5% 85% 10% 0 2,120 1 2" Valves (half) 1980 $3,000 C 100% $626 40 44 3,000 -4 5 3,650 5% 85% 10% 0 Not Cap. 2 3" Valves (half) 1980 $3,000 C 100% $938 40 44 4,500 -4 5 5,475 5% 85% 10% 0 54 6 4" Valves (half) 1980 $4,000 C 100% $5,005 40 44 24,000 -4 5 29,200 5% 85% 10% 0 289 13 6" Valves (half) 1980 $4,000 C 100% $10,844 40 44 52,000 -4 10 76,973 5% 85% 10% 0 376 10 8" Valves (half) 1980 $6,200 C 100% $12,283 40 44 58,900 -4 15 106,076 5% 85% 10% 0 341 4 10" Valves (half) 1980 $6,200 C 100% $4,525 40 44 21,700 -4 15 39,080 5% 85% 10% 0 126 1 2" Valves (half) 1980 $3,000 C 100% $626 40 44 3,000 -4 20 6,573 5% 85% 10% 0 16 2 3" Valves (half) 1980 $3,000 C 100% $938 40 44 4,500 -4 20 9,860 5% 85% 10% 0 23 6 4" Valves (half) 1980 $4,000 C 100% $5,005 40 44 24,000 -4 20 52,587 5% 85% 10% 0 125 13 6" Valves (half) 1980 $4,000 C 100% $10,844 40 44 52,000 -4 25 138,623 5% 85% 10% 0 261 10 8" Valves (half) 1980 $6,200 C 100% $12,283 40 44 58,900 -4 25 157,018 5% 85% 10% 0 296 4 10" Valves (half) 1980 $6,200 C 100% $4,525 40 44 21,700 -4 25 57,849 5% 85% 10% 0 109 27 Hydrants 1980 $7,035 C 100% $39,612 60 44 189,945 16 16 355,763 25% 75% 0% 0 5,353 222 Inside Meters 1980 $500 C 100% $23,149 15 44 111,000 -29 5 135,048 25% 75% 0% 0 6,685 101 Outside Meters 1980 $500 C 100% $10,532 15 44 50,500 -29 5 61,441 25% 75% 0% 0 3,041 100% 0% 0% 100% 0 0
Subtotal Replacement of Existing Capital Assets $3,946,297 12,925,100 26,760,609 6% 84% 10% 0 152,264 Quantity Asset
Year
Acquired
Unit Cost
(Current or
Future)
Cost
Type
(C, F)
%
Belonging
to Water
Normal
Estimated
Life
Time to
Complete
Estimated
Current Cost
Planned
Remaining
Life
Estimated
Remaining
Life
Estimated
Future Cost
Fund
with
Cash
Fund
with
Grant
Fund
with
Loan
Existing
Reserves
Annual
Reserve
Required
Replacement of Funded Project Assets
1 SCDRP Tank & Pipelines 2024 5,079,090 C 100% 50 0 5,079,090 50 50 36,095,484 0% 100% 0% 0 0 100% 0% 0% 0% 0 0
Subtotal Replacement of Funded Project Assets 5,079,090 36,095,484 0% 100% 0% 0 Enter Existing Reserves for Replacement of Funded Project Assets Quantity Asset
Year to
be
Purchase
d
Unit Cost
(Current or
Future)
Cost
Type
(C, F)
%
Belonging
to Water
Normal
Estimated
Life
Years to
save
Estimated
Current Cost
Estimated
Future Cost
Fund
with
Cash
Fund
with
Grant
Fund
with
Loan
Existing
Reserves
Annual
Reserve
Required
Reserves for Additional Capital Assets
1 MBDRP Intertie 2025 2,000,000 H 100% 50 1 0 0% 100% 0% 0 1 Booster Pump 2025 607,000 C 100% 40 1 607,000 631,280 100% 0% 0% 631,280 0 100% 0% 0% 0% 0
Subtotal Reserves for Additional Capital Assets 607,000 631,280 100% 0% 0% 631,280 0 Enter Existing Reserves for Additional Capital Assets
Total Capital Reserves 18,611,190 63,487,373 4% 92% 4% 631,280 152,264
8.3 Coleman Engineering water treatment facility replacement plan 31 RCAC 2024 Water Rate Study—City of Trinidad
City of Trinidad - Water Treatment Facility
Fiscal Year 2023 Suggested Repair and Replacement Budget Prepared September 2023 by Coleman Engineering
Asset Tag #
Field Notes and
Observations Condition Rating Functional Description
Risk Criticality Comments 2023 2024 2025 2026 2027 2028 2029 2030 Raw Water Turbidimeter AT1001A No longer in
production
Fair Influent NTU High 1 Out of date $ 3,430
Finished Water Turbidimeter AT100B NEW NEW Finished NTU High 1 Replaced 7/2023 $3,430 Filter #1 Turbidmeter AT1002A Outdated Fair #1 NTU High 1 Out of date $3,430 Filter #2 AT1002B Outdated Fair #2 NTU High 1 Out of date $3,430 Filter #3 AT1003 Outdated Fair #3 NTU High 1 Out of date $3,430 SCM AT1006 Outdated Fair Raw Water High 1 Out of date $13,000 CL17 AT1007 NEW NEW CL2 Residual High 1 NEW $3,325
Flow Meter FT1014 Unknown Fair GPM Monitor High 2 Unknown Mid Turbidmeter AT1004 Outdated Fair Between Filters High 1 Out of date $33,430 Rinse to Waste CV1015 Out of Use Unknown Filter Rinse Low 3 Out of Use $5,000 Poly Pump #1 XA1009 Unknown Unknown Poly Dose High 1 Unknown $1,000 Poly Pump #2 XA1011 Unknown Unknown Poly Dose Low 3 Unknown $1,000 CL2 Pump XA1013 Unknown Unknown CL2 Dose High 1 Unknown $1,000 Wet Well Pump #1 EQ-100 Unknown Unknown Influent Pump High 1 Unknown $5,000 Wet Well Pump #2 EQ-110 Unknown Unknown Influent Pump High 1 Unknown $5,000 Flash Mixer #1 EQ-200-1 2015 Fair Poly Mixer Medium 2 Unknown 3,500 Flash Mixer #2 EQ-200-2 2015 Fair Poly Mixer Medium 2 Unknown 3,500 Backwash Pump EQ-200-3 Unknown Unknown Backwash Pump High 1 Unknown 5,000 Intermediate Pump #1 EQ-400 2015 Fair Booster Pump High 1 Unknown 3,500 Intermediate Pump #2 EQ-410 2015 Fair Booster Pump High 1 Unknown 3,500 Soda Ash Pump EQ-450 Unknown Fair Soda Pump Medium 2 Unknown $1,000 Recycle Pump P-900 Out of Use Unknown Recycle Low 3 Unknown $5,000 CL2 Residual EQ-650 Unknown Good CL2 Residual High 1 Unknown 3,500 Sludge Removal EQ-150 Unknown Good Sludge Removal Low 3 Unknown 5,000 Level Transducers Unknown Unknown Water Levels High 1 Total of 5 9,500 Tank Floats Unknown Unknown Kill Switch High 1 Total of 5 750 SC-100 Out dated poor controller High 1 No parts $3,505 SC-200 (2) Out dated fair controller High 1 No parts $7,010 Totals $10,260 $20,290 $43,870 $16,000 $11,000 $5,000 $22,500 $10,250