City of Wasco Supplemental Agenda Materials, October 18, 2022
SUPPLEMENTAL AGENDA MATERIALS
Regular City Council Meeting
October 18, 2022
Agenda Item:
12) NEW BUSINESS:
a. Accept the latest rate analysis proposal and authorize staff to mail and print notices for Proposition 218 hearing on December 20, 2022.
Water and Sewer Rate Study
Rate Report Review
October 18, 2022
Alison Lechowicz
Project Manager
CITY OF WASCO
Background
Sewer rates were last increased in 2007
Water rates were last increased in 2017
Water and Sewer Funds are Enterprise Funds -> should be self-supported by rates
Rate study will cover a 5-year period and determine water and sewer rates First rate change January 1, 2023
July 1 of 2023, 2024, 2025, 2026
Rate adjustments are governed by Proposition 218
Rates must be based on the reasonable cost of service and proportionally recover costs based on how customers take service
Public hearing and protest voting procedures
Same process as the solid waste rate adjustment
2 Water Revenue Analysis
Water Fund financial health is strong
Estimated $11M in cash reserves at year end
Positive net revenues – rates are covering operating costs About $3.3M in operating revenues vs. $3.1M in operating expenses No existing or planned debt
State Revolving Fund grant of $25M+ for well replacement and TCP treatment Slight revenue increase recommended to keep up with inflation by FY2027 Draw on $2.3M of reserves to phase-in rate structure changes However, proposed rates maintain reserves for emergency repairs, further TCP treatment, and drought contingency
3 Current Water Rates
4 Use Category Minimum
Service Fee
Monthly
Base
Volume (ccf)
Rate per ccf
Beyond Base
Volume
Single Family Residential $28.60 25 $4.03
Multi-Family 2 Units $34.32 30 $4.03
Multi-Family 3-4 Units $51.48 45 $4.03
Multi-Family 5-8 Units $80.08 70 $4.03
Multi-Family 9-20 Units $137.27 120 $4.03
Multi-Family 21-40 Units $343.17 300 $4.03
Multi-Family 41+ Units $343.17 300 $4.03
Commercial $22.88 20 $4.03
General $34.32 30 $4.03
Industrial $137.27 120 $4.03
Institutional $137.27 120 $4.03
Irrigation $91.52 80 $4.03
Base allotment was
designed to include
75% of usage
However, currently
includes 90% of
residential water
use
ccf – hundred cubic feet; 1 ccf = 748 gallons
Water Billing
Water use is measured in cubic feet (cf) or hundred cubic feet (ccf) 1 cubic foot (cf) = 7.48 gallons
1 ccf = 100 cf = 748 gallons
Average residential monthly use is 15 ccf or 11,220 gallons 15 ccf/month is 110 gallons per person per day
25 ccf/month (current base allotment) is 183 gallons per person per day 7 ccf/month is 51.3 gallons per person per day
5 Census Data – household size
Water Rate Structure Adjustments
New $0.78/month meter fee for all customers
Drought rates for water shortage emergencies
Reduce the single family residential base water allotment from 25 ccf to 7 ccf
Consistent with indoor water use during historically low water years Statewide target is 52.5 gallons per capita per day by 2025 and 50 gallons by 2030 Civil enforcement begins in 2027 (Senate Bill (SB) 606 / Assembly Bill (AB) 1668) 7 ccf roughly equates to about 51 gallons per capita per day Reduces “non-revenue” water provided in the allotment (SB 555) Reduce the allotments of all other customers to reflect indoor/low period, efficient use
Customers have more control over their bills
6 Water Proposed Five-Year Adjustment
7 Use Category Current
PROPOSED
January 1,
2023
July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026
Single Family $28.60 $29.38 $27.55 $25.72 $23.89 $20.23 25 21 17 13 10 7
MF, 2 Units $34.32 $35.10 $33.07 $31.04 $29.01 $24.93
30 25 21 17 13 9
MF, 3-4 Units $51.48 $52.26 $50.55 $48.84 $47.13 $43.73 45 39 33 27 22 17
MF, 5-8 Units $80.08 $80.86 $79.54 $78.22 $76.90 $74.28 70 62 54 46 38 30
MF, 9-20
Units
$137.27 $138.05 $134.70 $131.35 $128.00 $121.28
120 106 92 78 64 50
MF, 20+
Units
$343.17 $343.95 $346.42 $348.89 $351.36 $356.28
300 270 240 210 180 150
Volume Rate $4.03 $1.50 $1.81 $2.12 $2.43 $2.72
Use Category Current
PROPOSED
January 1,
2023
July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026
Single Family $28.60 $29.38 $27.55 $25.72 $23.89 $20.23 25 21 17 13 10 7
Water Proposed Five-Year Adjustment
8 Use Category Current
PROPOSED
January 1,
2023
July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026
Commercial $22.88 $23.66 $22.03 $20.40 $18.77 $15.53
20 17 14 11 8 5
General $34.32 $35.10 $32.13 $29.16 $26.19 $20.23
30 25 20 15 11 7
Industrial $137.27 $138.05 $134.70 $131.35 $128.00 $121.28 120 106 92 78 64 50
Institutional $137.27 $138.05 $134.70 $131.35 $128.00 $121.28 120 106 92 78 64 50
Irrigation $91.52 $92.30 $89.64 $86.98 $84.32 $78.98
80 70 60 50 40 32
Volume Rate $4.03 $1.50 $1.81 $2.12 $2.43 $2.72
9 +45% increase
relative to current
Water Rate Survey
10 Drought Rates
If the Governor declares a drought, City Council can implement drought rates but is not obligated to
During a drought, some costs will be reduced due to lower water use such as pumping and chemicals
However, many operating costs would not be reduced and would be recovered over a smaller amount of water sales
11 Drought rates $/ccf (minimum service fees and base volumes remain the same) Drought Stage
January 1,
2023
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
20% Water Cutback $1.78 $2.14 $2.51 $2.88 $3.22
30% Water Cutback $1.97 $2.38 $2.79 $3.20 $3.58
40% Water Cutback $2.23 $2.70 $3.16 $3.62 $4.05
Normal year $1.50 $1.81 $2.12 $2.43 $2.72
Sewer Revenue Analysis
Sewer Fund financial health is strong
$3.5M estimated cash reserves June 2022
Annual O&M is about $2.1M and revenues are about $2.5M Positive net revenues – rates are covering operating costs No existing or planned debt
Recommended spending of $350,000 to $400,000 annually on sewer line replacements (1 mile per year) in Years 3 to 5
Recommended +2.5% annual revenue increases to keep up with inflation 12 Current Sewer Rates
13 Category Units Charge
Single-Family Residences Dwelling Unit $23.78
Apartment/Mobile Home Unit $23.78
Bakery Each $58.44
Ball Park Each $8.71
Barber and Beauty Shops Each $34.68
Bars (without dining) Each $75.91
Car Wash Each $92.34
Churches Each $15.29
Commercial Cleaners Each $129.96
Convenience Store Each $17.26
Doctor and Dentist Offices Each $30.35
Food Market Per 1,000 sq ft $7.88
Hospitals Per Bed $15.29
Laundromats Each $298.70
Meeting or Convention Halls Each $8.71
Current Sewer Rates Continued
14 Category Units Charge
Mortuaries
(a) with embalming facilities Each $86.67
(b) without embalming facilities Each $8.71
Motion Picture Theaters Each $58.44
Office Buildings Office Unit $8.71
Park (w/ wading pool) Each $15.29
Pool Halls Each $58.44
Printing and Publishing Each $13.17
Auto Repair Shops and Service Stations
(a) without wash racks Each $30.35
(b) with wash racks Each $69.41
Restaurants Establishment $166.61
Retail Shop Each $8.71
Schools – BILLED ANNUALLY
(a) grammar Pupil (a.d.a.) $9.02/yr
(b) high school/junior high Pupil (a.d.a.) $10.91/yr
Public Swimming Pool Each $0.83
Septage Receiving Station 1,800 gallons $91.50
Sewer Rate Adjustments
Keep current fixed rate structure; investigate volume-based rates with future billing system upgrades
Update flow and pollutant estimates for each category (last update in 2007) based on last three years of billing data and phased-in by year 5 (extensive review of 3 years of water usage records)
Range of outcomes for commercial customers
Keep one residential customer class (i.e. single family + multifamily) 15 Use Category Current
PROPOSED
January 1,
2023
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
Single-Family Residences $23.78 $24.43 $25.08 $25.73 $26.38 $27.05 Apartment/Mobile Home Park $23.78 $24.43 $25.08 $25.73 $26.38 $27.05 Sewer Rate Survey
16 Commercial Sewer Rates
17 Use Category Current
PROPOSED
January 1,
2023
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
Bakery, Theater, and Deli $58.44 $58.79 $59.14 $59.49 $59.84 $60.19 Ball Park $8.71 $9.29 $9.87 $10.45 $11.03 $11.60
Barber and Beauty Shops $34.68 $14.92 $15.30 $15.69 $16.09 $16.50 Bars (without dining) $75.91 $11.11 $11.39 $11.68 $11.98 $12.29 Car Wash $92.34 $94.20 $96.06 $97.92 $99.78 $101.64
Churches $15.29 $15.86 $16.27 $16.69 $17.12 $17.56
Commercial Cleaners $129.96 $57.98 $59.47 $60.99 $62.55 $64.15 Convenience Store $17.26 $20.68 $24.10 $27.52 $30.94 $34.36 Doctor and Dentist Offices $30.35 $34.80 $39.25 $43.70 $48.15 $52.59 Food Market per 1,000 sq ft $7.88 $8.03 $8.18 $8.33 $8.48 $8.63 Hospitals per bed $15.29 $15.86 $16.27 $16.69 $17.12 $17.56 Laundromats $298.70 $327.55 $356.40 $385.25 $414.10 $442.93 Meeting or Convention Halls $8.71 $9.29 $9.87 $10.45 $11.03 $11.60 Commercial Sewer Rates
18 Use Category Current
PROPOSED
January 1,
2023
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
Mortuaries
(a) with embalming facilities $86.67 --- --- --- --- --- (b) without embalming facilities $8.71 $9.29 $9.87 $10.45 $11.03 $11.60 Office Buildings and Retail Shops $8.71 $9.29 $9.87 $10.45 $11.03 $11.60 Park (w/ wading pool) $15.29 $15.86 $16.27 $16.69 $17.12 $17.56 Pool Halls $58.44 $11.11 $11.39 $11.68 $11.98 $12.29
Printing and Publishing $13.17 --- --- --- --- ---
Auto Repair Shops
(a) without wash racks $30.35 $8.18 $8.39 $8.61 $8.83 $9.06 (b) with wash racks $69.41 $17.25 $17.69 $18.14 $18.60 $19.08 Restaurants $166.61 $167.36 $168.11 $168.86 $169.61 $170.35 Public Swimming Pool $0.83 --- --- --- --- ---
Potato Shed $1.07 --- --- --- --- ---
Septage Receiving Station $91.50 --- --- --- --- ---
Industrial rates proposed to remain the same – customers have service agreements School Sewer Rates
19 Rates billed based on average daily attendance (ADA) ADA reported once annually and billed once annually
The schools do not have designated indoor only use. Metered water use includes outdoor irrigation.
Reviewed industry typical flow estimates for ADA. Rates based on 8 gallons per day use for elementary schools and 10 gallons per day for high school Elementary +1.1%/year; Junior/High +1.8%/year
Current
Charge
($/ADA/YR)
January 1,
2023
Proposed
Charge
($/ADA/YR)
July 1, 2023
Proposed
Charge
($/ADA/YR)
July 1, 2024
Proposed
Charge
($/ADA/YR)
July 1, 2025
Proposed
Charge
($/ADA/YR)
July 1, 2026
Proposed
Charge
($/ADA/YR)
Elementary $9.02 $9.12 $9.22 $9.32 $9.42 $9.52
High $10.91 $11.11 $11.31 $11.51 $11.71 $11.92
Rate Study Schedule
October 18 – Present report to City Council
November 4 – Mail Prop 218 notice of rate hearing to customers (latest possible mail date)
November/December – 45-day Prop 218 waiting period; conduct ratepayer outreach
December 20 – Proposition 218 hearing
January 1 – Implement new rates absent a majority protest 20 Questions?
21