PRESENTATION
Prepared by:
BARTLE WELLS ASSOCIATES
Victorville Water District
Water Rate Study Presentation – City Council Workshop
April 27, 2026
Overview of
the Study
• Prepare Ten-Year Financial Plan
• Fund long-term operating, maintenance and capital
needs
• Ensures sufficient reserve funding
• Evaluated funding level alternatives
• Conduct Cost of Service Analysis and Rate Design
• Change from two-tiered volumetric rate for SFR customers to uniform volumetric rate for all customers
• Maintain Rate Revenue Distribution of approx. 40% Fixed, 60% Volumetric
• Calculate Updated Rates
• Evaluate customer bill impacts
2 Financial
Drivers
3 Funding O&M Costs of $40 mil/year,
plus estimated cost inflation
Fund CIP Costs of $7 mil/year
average ($76.6 million overall)
Maintain Sufficient Reserve Funds of
approx. $23-24 million
Operating
and
Maintenance
Costs
4 Average annual cost inflation in FY 2028 through FY 2036 is approximately 3.5%.
Operating & Maintenance Cost Inflation
Cost Inflation FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 General 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% General - Travel & Meetings 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Labor 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Fuel 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Utilities - Electric/Natural Gas/Sanitation 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Utilities - Production Power 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% 7.50% R-Cubed Water 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% Admin & Bio Assessment 10.11% 10.11% 10.11% 10.11% 10.11% 10.11% 10.11% 10.11% 10.11% Groundwater Replenishment & Makeup Obligation 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% Meter Service Installation & Changeouts 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% HDPP Reimbursement 17.80% 17.84% 17.88% 17.92% 17.96% 18.00% 18.04% 18.08% 18.12% Operating & Maintenance Costs by
Organization
Summary of Operating Expenses by Organization FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 Budgeted Budgeted Projected Projected Projected Projected Projected Projected Projected Projected Projected 4100030 - WATER-ADMINISTRATION $7,173,361 $7,251,678 $7,666,901 $7,917,425 $8,176,294 $8,443,792 $8,720,214 $9,005,863 $9,301,054 $9,606,114 $9,921,378 4100030E - WATER ADMINISTRATION EDD 62,500 111,750 103,553 106,735 110,015 113,397 116,883 120,477 124,183 128,002 131,940 4100500 - WATER-SUPPLY 16,829,429 17,200,533 18,000,450 18,842,503 19,729,212 20,663,261 21,647,516 22,685,037 23,779,086 24,933,151 26,150,957 4100505 - WATER- SCADA 884,772 1,131,949 920,042 954,925 991,150 1,028,768 1,067,833 1,108,402 1,150,534 1,194,289 1,239,730 4100510 - WATER-HD POWER PLANT (116,313) (111,394) (242,620) (403,773) (600,733) (840,497) (1,131,391) (1,483,321) (1,908,072) (2,419,664) (3,034,773) 4100525 - WATER EFFICIENCY 1,094,284 941,969 975,151 1,009,527 1,045,141 1,082,039 1,120,268 1,159,876 1,200,915 1,243,437 1,287,497 4100530 - WATER-METER SVCS 2,398,700 2,163,026 2,239,891 2,319,547 2,402,097 2,487,648 2,576,313 2,668,205 2,763,447 2,862,161 2,964,477 4100535 - WATER-FIELD SVCS 3,132,738 3,433,364 3,562,899 3,697,407 3,837,082 3,982,124 4,132,743 4,289,157 4,451,593 4,620,285 4,795,479 4100540 - WATER - WID 2 136,987 90,352 93,460 96,680 100,018 103,479 107,066 110,784 114,640 118,638 122,783 4100541 - WATER - WID 1 297,762 300,991 313,146 325,800 338,975 352,692 366,974 381,845 397,329 413,451 430,240 4100543 - WATER LINE LOCATING 147,852 192,474 200,118 208,067 216,331 224,925 233,860 243,151 252,812 262,857 273,302 4100545 - WATER-CUSTOMER SVCS 3,427,747 3,137,063 3,251,396 3,370,091 3,493,317 3,621,248 3,754,066 3,891,959 4,035,125 4,183,765 4,338,094 4100710 - WATER - WW TREATMENT - - - - - - - - - - - 4101510 - WATER-INFO TECHNOLOGY 235,260 66,585 68,583 70,640 72,759 74,942 77,190 79,506 81,891 84,348 86,878 4101515 - WATER-IT GIS 192,203 243,664 252,514 261,691 271,208 281,077 291,313 301,928 312,937 324,356 336,198 4104000 - WATER - CODE ENFORCEMENT 478,937 550,486 572,506 595,406 619,222 643,991 669,751 696,541 724,402 753,378 783,513 4104500 - WATER-ENGINEERING SVCS 2,306,130 2,192,829 2,278,236 2,366,994 2,459,236 2,555,099 2,654,726 2,758,266 2,865,874 2,977,710 3,093,941 4105001 - WATER ASPHALT 229,652 230,704 239,696 249,041 258,752 268,845 279,333 290,233 301,560 313,332 325,567 4110020 - WID #2 - NON-OPERATING - - - - - - - - - - - 4110201 - WID #2 - 98 BALDY MESA COP - - - - - - - - - - - 4110202 - WID #2 - 06 BALDY MESA COP - - - - - - - - - - - 4130520 - RECLAIMED WATER 674,032 622,601 644,228 666,636 689,854 713,914 738,849 764,690 791,475 819,238 848,018 4131510 - REC - INFO TECHNOLOGY 3,099 3,192 3,288 3,386 3,488 3,593 3,700 3,811 3,926 4,044 4,165 Total Operating Expenses $39,589,132 $39,753,815 $41,143,436 $42,658,729 $44,213,419 $45,804,337 $47,427,207 $49,076,412 $50,744,709 $52,422,893 $54,099,387 Capital
Improvement
Program
• Upgrades, repairs and replacements needed to maintain safe and reliable operations
• Current year, plus next ten-years capital spending is approximately $76.6 million
7 Reserve Fund
Targets
• Operating – 90 days of Operating and Maintenance
expenses (net of Water Purchases and High Desert
Power Plant)
• Capital Rehabilitation and Replacement – 3% of
net assets
• OPEB –average costs in 2021 through 2025
8 Reserve Fund Targets FYE 2026
Operating $8.06 mil
Capital Rehabilitation & Replacement $4.89 mil
OPEB $10.00 mil
Total $22.95 mil
Proposed
Rate
Adjustments
9 Rate Revenue Increases of 4% per year
Reserve Fund
Projection
10 Rate Revenue Increases of 4% per year
Cash Flow Analysis
Revenues FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030 FYE 2031 FYE 2032 FYE 2033 FYE 2034 FYE 2035 FYE 2036 Rate Revenue
Current Rate Revenue 33,032,582 33,362,908 33,696,537 34,033,502 34,373,837 34,717,575 35,064,751 35,415,399 35,769,553 36,127,248 36,488,521 Revenue from Rate Increases 0 1,223,307 2,749,637 4,249,559 5,838,690 7,521,663 9,303,345 11,188,850 13,183,550 15,293,091 17,523,404 Total Rate Revenue 33,032,582 34,586,214 36,446,174 38,283,061 40,212,527 42,239,239 44,368,096 46,604,249 48,953,103 51,420,339 54,011,924 Non-Rate Revenue
Miscellaneous 2,867,207 2,730,308 2,674,792 2,618,675 2,306,488 2,285,049 2,263,475 2,241,762 2,219,909 2,197,911 2,175,767 Interest 2,048,091 948,360 748,884 660,450 652,227 606,005 561,208 501,417 483,444 483,982 553,108 Other Charges/Fees 3,562,400 3,944,000 5,507,740 4,816,815 4,846,231 4,875,992 4,906,102 4,936,568 4,967,394 4,998,586 5,030,149 Total Non-Rate Revenue 8,477,698 7,622,668 8,931,416 8,095,941 7,804,946 7,767,046 7,730,786 7,679,747 7,670,747 7,680,479 7,759,025 Total Revenue $41,510,279 $42,208,882 $45,377,590 $46,379,002 $48,017,474 $50,006,285 $52,098,882 $54,283,996 $56,623,850 $59,100,818 $61,770,949 Expenses
Operating & Maintenance 38,912,000 39,128,022 40,495,920 41,988,707 43,520,077 45,086,829 46,684,657 48,307,910 49,949,309 51,599,611 53,247,203 Rate Funded Capital 5,759,244 11,845,959 8,767,500 4,751,630 6,528,409 6,887,856 8,041,492 6,765,837 6,650,912 4,463,739 6,221,341 Total Expenses $44,671,244 $50,973,981 $49,263,420 $46,740,337 $50,048,486 $51,974,686 $54,726,149 $55,073,746 $56,600,221 $56,063,350 $59,468,545 Revenues Less Expenses ($3,160,965) ($8,765,098) ($3,885,831) ($361,335) ($2,031,012) ($1,968,400) ($2,627,267) ($789,750) $23,629 $3,037,468 $2,302,404 Ending Reserve Balance $41,671,504 $32,906,405 $29,020,575 $28,659,240 $26,628,228 $24,659,828 $22,032,561 $21,242,810 $21,266,439 $24,303,907 $26,606,311 Reserve Fund Target 22,952,614 23,167,263 23,373,867 23,587,645 23,990,223 24,366,072 24,782,350 25,143,217 25,557,284 25,928,530 26,438,488 Projected Demand Growth 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Rate Revenue Increases 0.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Summary of
Revenue
Requirement
12 Cost Allocation Category
FY 2026/27
Revenue
Requirement
Units of Measure Units Unit Cost
Commodity $20,377,736 HCF 8,893,551 $2.29
Capacity 9,834,228 Equivalent Meters 49,080 $16.70
Customer 3,604,162 Customers 38,711 $7.76
Recycled 545,073 HCF 293,193 $1.86
Fire 225,015 Equivalent Meters 48,362 $0.39
Total $34,586,214
Water Rate
Structure
Changes
13 • Changes to Volumetric Rate
• Eliminate Two-Tiered Volumetric Rate for Single-
Family Residential Customers
• Implement Uniform Volumetric Rate for all Domestic
Water Users (SFR, MFR, Commercial, Industrial, etc.)
• Maintain Uniform Volumetric Rate that Varies by
User Type for Wells, Reclaimed and Construction
• Changes to Fixed Meter Charges
• Update Capacity Component of Fixed Charge to be
Scaled Based on Capacity of Updated Meter Types (i.e.
ultrasonic meters for 3 inch and larger)
• Update Cost of Service Basis for Capacity and Customer Component to New Revenue Requirement
Proposed
Water Rates
14 Current
Monthly Water Rates FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 FY 2030/31 Rate Revenue Adjustment -- 4% 4% 4% 4% 4%
Periodic Availability Charge
3/4 inch $25.81 $24.46 $25.43 $26.45 $27.51 $28.61
1 inch $39.48 $35.59 $37.01 $38.49 $40.03 $41.63
1.5 inch $73.66 $63.42 $65.95 $68.59 $71.34 $74.19
2 inch $114.67 $96.81 $100.69 $104.71 $108.90 $113.26
3 inch $224.03 $286.05 $297.50 $309.40 $321.77 $334.64
4 inch $347.06 $497.56 $517.46 $538.16 $559.69 $582.07
6 inch $688.81 $786.99 $818.47 $851.20 $885.25 $920.66
8 inch $1,919.12 $1,566.21 $1,628.86 $1,694.02 $1,761.78 $1,832.25 10 inch $2,876.03 $2,512.42 $2,612.91 $2,717.43 $2,826.13 $2,939.17 12 inch $2,876.03 $3,069.01 $3,191.77 $3,319.44 $3,452.22 $3,590.31 Consumption Rates (per hcf)
Single-Family Residents (SFR):
Tier 1 (1 - 6 hcf) $0.80
Tier 2 (7+ hcf) $2.44
Uniform Rate (all hcf) $2.29 $2.38 $2.48 $2.58 $2.68
All Other Customers:
Standard Domestic Water (Non SFR) $2.42 $2.29 $2.38 $2.48 $2.58 $2.68 Construction Flow Meter/Intertie $4.01 $3.76 $3.92 $4.07 $4.23 $4.40 Reclaimed/Recycled Water $1.45 $1.86 $1.93 $2.01 $2.09 $2.17 Fire Periodic Availability Charge
1 inch $6.45 $8.40 $8.74 $9.09 $9.45 $9.83
1.5 inch $7.59 $9.05 $9.41 $9.79 $10.18 $10.59
2 inch $8.96 $9.83 $10.22 $10.63 $11.05 $11.50
3 inch $13.30 $14.22 $14.79 $15.38 $16.00 $16.64
4 inch $21.30 $19.13 $19.90 $20.69 $21.52 $22.38
6 inch $41.86 $25.85 $26.89 $27.96 $29.08 $30.24
8 inch $69.28 $43.95 $45.70 $47.53 $49.43 $51.41
10 inch $105.84 $65.92 $68.55 $71.30 $74.15 $77.12
12 inch $105.84 $78.84 $82.00 $85.28 $88.69 $92.23
Proposed
Customer Bill
Impacts
15 Customer Bill
Impacts
16 Customer Bill
Impacts
17 Customer Bill
Impacts
18 Customer Bill
Impacts
19 Regional Bill
Comparison
20 Summary
The District has historically been proactive
with consistent gradual annual rate
increases
Continued rate increases are needed to
support rising operating and maintenance
costs, and capital investment needs
Rate Structure Modifications are
Recommended to Remain In-Line with
Prop. 218
21 Next Steps 1. City Council Approval
2. Conduct Customer
Noticing
3. Public Hearing and
Written Objection
Procedures
22 BARTLE WELLS ASSOCIATES
Questions and Comments
Kim Boehler, Principal
[email protected]