Yuba City City Council
March 17, 2026

NOES:

ABSENT:

Marc Boomgaarden, Mayor
ATTEST:

Ciara Wakefield, City Clerk

APPROVED AS TO FORM
COUNSEL FOR YUBA CITY:

Shannon Chaffin, City Attorney
Aleshire & Wynder, LLP
Exhibit:

A. G3 Engineering, Inc. Quote CD1405
B. UGSI Chemical Feed, Inc. Representation Letter

EXHIBIT 1A

G3 Engineering, Inc.

P.O. Box 2148
Granite Bay, CA 95746 Date: 1/26/2026
Phone: (209) 225-5095 Quotation #: CD1405
Email: [email protected] Revision: 2
Attention: Jesus Celestino, City of Yuba City
Reference:

Subject: UGSI Polyblend Quote
Item Qty Description Unit Price Net Price
1 2 Polyblend® MM1200-P6AB Polymer Activation System, including:
-Patented UGSI Mixing Chamber with Brass Impeller
-Constant Speed: 1/2 HP, 3450 RPM, 115/230 V, 1 PH, 60 Hz (WashDown) -36.40" x 26.00" x 47.35" Stainless Steel Frame
$49,840.00 $99,680.00
Dilution Water Inlet, including:
-1" PVC Piping for 600 - 1200 GPH of Flow
-Solenoid Valve: 1"
-Diaphragm Check Valve: ¾” PVC
-Globe Valve: ¾” SS
-Paddlewheel Flowmeters
-Primary and Secondary Dilution
Polymer Pump, including:
-6.0 GPH, SEEPEX Progressive Cavity Pump w/Mechanical Seal, 316SS Rotor, & Viton Stator
-½” PVC Piping for 6.0 GPH Progressive Cavity Polymer
Pump
Calibration Column
Solution Outlet, including 1-1/2" Static Mixer
Power Assembly, including: 120V/60Hz/1ph Power Supply
Skid-Mounted Electrical Control Panel, including: [B CONTROLS] -Programmable Microcontroller
-“On-Off-Remote” circuit
-“Run” indicator light
-“Loss of Water Flow” indicator light
-“Primary Water Flow” display
-“Secondary Water Flow” display
-“Polymer Flow” display
-“Mixing Chamber Solution Concentration” display
-“Post-Dilution Discharge Concentration” display
-Remote Start contact
-Polymer Pump Speed output signal
-“Run” output contact
-“General Alarm” output contact
Freight Included, FOB Factory
Lead Time:
4-6 Weeks for Submittals (if required)
10-12 Weeks for Shipment After Submittal Approval
2 1 Freight, FOB Factory $1,500.00 $1,500.00
3 1 Sales Tax @ 7.25% $7,226.80 $7,226.80
Subtotal: $108,406.80
Notes:
1) Pricing does not include sales tax.
2) Quote is valid for 60 days.
3) Payment terms:
20% Upon Approved Submittals, Net 30
20% Upon Release for Manufacturing, Net 30
60% Upon Shipment, Net 30
4) Purchase order shall be made out to G3 Engineering, Inc. 5) Items not specifically listed on this quote are not included in the scope and are to be supplied by others. Quote is furnish only, installation is not included.

Sale is subject to G3 Engineering, Inc. standard terms and conditions. 6) Installation not included.
7) Chemical supply not included.
8) Anchorage calculations and anchor bolts not included.

Quotation

I
H
G
F
E
D
C
B
A
D
Vineland NJ, USA - Tel. (856) 896-2160
Web - www.ugsichemicalfeed.com
E-Mail - [email protected]
C

THIS DOCUMENT AND ALL INFORMATION CONTAINED HEREIN ARE THE PROPERTY OF UGSI CHEMICAL FEED, INC. AND/OR ITS AFFILIATES. THE DESIGN

CONCEPTS AND INFORMATION CONTAINED HEREIN ARE PROPRIETARY TO UGSI CHEMICAL FEED, INC. AND ARE SUBMITTED IN CONFIDENCE. THEY ARE

NOT TRANSFERABLE AND MUST BE USED ONLY FOR THE PURPOSE FOR WHICH THE DOCUMENT IS EXPRESSLY LOANED. THEY MUST NOT BE DISCLOSED,

REPRODUCED, LOANED OR USED IN ANY OTHER MANNER WITHOUT THE EXPRESS WRITTEN CONSENT OF UGSI CHEMICAL FEED, INC. IN NO EVENT

SHALL THEY BE USED IN ANY MANNER DETRIMENTAL TO THE INTEREST OF UGSI CHEMICAL FEED, INC. ALL PATENT RIGHTS ARE RESERVED. UPON THE DEMAND OF UGSI CHEMICAL FEED, INC. THIS DOCUMENT, ALONG WITH ALL

COPIES AND EXTRACTS, AND ALL RELATED NOTES AND ANALYSES, MUST BE RETURNED TO UGSI CHEMICAL FEED, INC. OR DESTROYED, AS INSTRUCTED BY UGSI CHEMICAL FEED, INC. ACCEPTANCE OF THE DELIVERY OF THIS DOCUMENT CONSTITUTES AGREEMENT TO THESE TERMS AND CONDITIONS.

COMPANY CONFIDENTIAL

SURFACE FINISH

UNLESS OTHERWISE SPECIFIED

DIMENSIONS EXCEPT

MACHINED HOLE DEPTH
REV.

ALL WELD SYMBOL
DIMENSIONS ARE MINUMUM.

A A
11 13
12 10
2 3
1 5
4 30.82

17.36 6
9 1.5" NPT

SOLUTION DISCHARGE

6.72 7.62
1" NPT

WATER INLET

33.75 40.13

47.35 1.45

4.71 1/2" BARB

POLYMER INLET

24.00 SECTION A-A
SCALE 1 : 8
7 8
ITEM NO. PART NUMBER DESCRIPTION QTY.
1 H6053 M240-2400 MAGNUM CHAMBER BASE FRAME
ASSEMBLY 1
2 2345413 MAGNUM MIX CHAMBER W/DIRECT DRIVE, M240-
2400 1
3 5860304 STATIC MIXER ASSY, M601-2400, 1.5" 1
4 4480010 GAUGE, PRESS, 0-160 PSI, .250 NPT 1
5 5902205 MOTOR, CUSTOM, 3450RPM W.MANOVRL 1
6 H6028 POWER CORD ASSEMBLY, 120V, 14GA., SEAL 1
7 6720006 PLUG, PVC, SCH 80 1" MPT 1
8 9570201 VALVE, BALL, .250 FPT X .250 MPT 1
9 K2342014 500 ML CALIBRATION CYLINDER KIT 1
10 H6006 PIPING ASSY, M601, 1" PVC, B-CTRL 1
11 5551283 LABEL, POLYBLEND B CONTROL OPERATING
INSTRUCTIONS 1
12 H6015 PC PUMP, SEEPEX, 2-6 GPH, PRV,CHECK VALVE
ASSEMBLY 1
13 H6046
ELECTRICAL ASSEMBLY, M240-1200 W/P-PUMP, BCONTROL, 115V 1 24MAR17
1 1:8
MSM
EM
KP
KP
MM1200
MM1200-P6AB ASSEMBLY

JIHGFEDCBA 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 . REV. DATE: SCALE: DRAWING NUMBER: CH'K: CHANGE No. ENG: DR'N: RELEASED: Q.A.: . D THIRD ANGLE PROJECTION MODEL: M-SERIES TITLE: MATERIAL: . DWG: SA1-0001-0101 UGSI Chemical Feed, Inc. Vineland NJ, USA - Tel. (856) 896-2160 www.ugsichemicalfeed.com NONE MSM. .. 1 18JUN14 C 2014 WEIGHT: . SHEET: 1 OF 1 TOLERANCES TO F937.400 SA1-0001 M1200-P6AB P&ID FLOW SCHEMATIC DESIGN CENTER: USA THIS DOCUMENT AND ALL INFORMATION CONTAINED HEREIN ARE THE PROPERTY OF UGSI CHEMICAL FEED, INC. AND/OR ITS AFFILIATES. THE DESIGN CONCEPTS AND INFORMATION CONTAINED HEREIN ARE PROPRIETARY TO UGSI CHEMICAL FEED, INC. AND ARE SUBMITTED IN CONFIDENCE. THEY ARE NOT TRANSFERABLE AND MUST BE USED ONLY FOR THE PURPOSE FOR WHICH THE DOCUMENT IS EXPRESSLY LOANED. THEY MUST NOT BE DISCLOSED, REPRODUCED, LOANED OR USED IN ANY OTHER MANNER WITHOUT THE EXPRESS WRITTEN CONSENT OF UGSI CHEMICAL FEED, INC. IN NO EVENT SHALL THEY BE USED IN ANY MANNER DETRIMENTAL TO THE INTEREST OF UGSI CHEMICAL FEED, INC. ALL PATENT RIGHTS ARE RESERVED. UPON THE DEMAND OF UGSI CHEMICAL FEED, INC. THIS DOCUMENT, ALONG WITH ALL COPIES AND EXTRACTS, AND ALL RELATED NOTES AND ANALYSES, MUST BE RETURNED TO UGSI CHEMICAL FEED, INC. OR DESTROYED, AS INSTRUCTED BY UGSI CHEMICAL FEED, INC. ACCEPTANCE OF THE DELIVERY OF THIS DOCUMENT CONSTITUTES AGREEMENT TO THESE TERMS AND CONDITIONS. COMPANY CONFIDENTIAL

PolyBlend® Polymer Feed System
Magnum M Series
The PolyBlend® Magnum M Series liquid polymer
feed system is the best product available to handle
your liquid/solid separation needs. The Magnum M
Series combines proven motorized mixing technology with precise controls to provide superior polymer preparation. In addition, the Magnum M Series can be
configured with a variety of pump offerings, and automatic dosage control with constant solution strength to meet a wide range of polymer feed application
requirements. The Magnum M Series units are also
available for classified area environments including
Class 1, Division 1 and Class 1, Division 2 areas.

The Magnum M Series is engineered for quick easy
service and is built to last. The open frame design
permits quick and easy maintenance and the Magnum M Series is engineered to handle the harshest environments.

The Magnum M Series is designed to handle new
polymer developments, ultra-high molecular weights,
different charge densities, and even totally new chemistries. Optional advanced controls provide precise and consistent solution strength. Whether you adjust
the Magnum M Series output remotely via 4-20 mA
signal or right at the unit, water flow and polymer feed increase or decrease together. Primary and secondary dilution water are also kept at the same ratio as the output is adjusted.

A variety of models are available covering output
ranges from 12 to 2400 USGPH. Choose between
diaphragm, gear, or progressive cavity polymer
pumps for your application.

Key Benefits
■ Improved polymer efficiency providing
maximum polymer activation
■ Open-frame design for easy access
■ Reliable and consistent direct drive
mixing
■ Optional advanced controls to meet
your application needs
Specifications
Power 115-230 VAC / 60 Hz / 1 Phase
230-460 VAC / 60 Hz / 3 Phase
Dimensions
(W x H x D) 36.40” x 47.35” x 27.80” (Approx.)
Polymer pump Diaphragm, Gear, or Progressive
Cavity
Material 304 SS Frame / PVC
Controls PolyBlend® A, B,B+ or C

Technical Data

46.67 (REF)

36.40 39.88
8 7
17 6
1 1
5 4
15 16 10
2 3

30.82 17.36

27.80 14
18 12
13 6.78

6.79 9
OPTIONAL 19
11 LEFT SIDE FRONT RIGHT SIDE

APPROXIMATE MEASUREMENTS
General Layout
Magnum M Series Model Numbering Guide
The model numbers for the Magnum M-Series can be generated as follows:

EXAMPLE: MM 2400 - P - 10 AB - V
Water Flow Rate in GPH Options
240 N - Nickel Plated
601 V - Variable Speed Mixer
1200 R - Mix Chamber Pressure Relief
1800 G - 4.5” Gauge with Isolator
2400 L - Loss of Polymer Flow
Controls
Pump Type and Output GPH A - On-Off Remote
Diaphragm Gear Progressive Cavity B - Micro Controller
D0.4 G36 P2 P - PLC / HMI Controls (B+)
D1 G60 P6 C - Flow Proportional
D2.5 G200 P10
D4 G660 P30 Voltage
D10 P50 A - 115 VAC / 60 Hz / 1 ph
B - 460 VAC / 60 Hz / 3 ph
* Model number is “601” C - 230 VAC / 60 Hz / 1 ph
D - 230 VAC / 60 Hz / 3 ph
E - 575 VAC / 60 Hz / 3 ph
Key Description
1 Base Assembly
2 Solenoid Valve
3 Static Mixer
4 Primary Dilution Control Valve
5 Secondary Dilution Control Valve
6 Mix Chamber
7 Motor Control Panel
8 Micro-Controller
9 Pump, Progressive Cavity
10 Pump, Priming Port
11 Water Inlet
12 Solution Discharge
13 Polymer Inlet
14 Pressure Gauge (Mix Chamber)
15 Primary Dilution Water Sensor
16 Secondary Dilution Water Sensor
17 Operators Instructions
18 Calibration Column
19 Loss of Polymer Flow (Optional)
www.ugsichemicalfeed.com
© 2014 UGSI Chemical Feed, Inc.

Subject to change without prior notice.

Literature No. CF.480.310.MMA.IE.PS.0217
Polyblend® is a trademark of UGSI Chemical Feed, Inc.

The information provided in this literature contains merely general descriptions or characteristics of performance which in actual case of use do not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of a written contract.

UGSI Chemical Feed, Inc.
1901 West Garden Road
Vineland, NJ 08360
Toll Free: 855-669-3845
Local: 856-896-2160
Fax: 856-457-5920
Email: [email protected]
Website: www.ugsichemicalfeed.com

PolyBlend® Polymer Feed System
Control Selection
“A” Controls Specifi cations:

Unit shall be powered through an on-off -remote circuit controlled by a three-position switch. In the remote
switch position, the unit shall accept a remote run
signal. Unit is powered in the ON position.

Unit shall accept a 4-20 mA analog signal to pace the
polymer metering pump. This signal shall be
processed
by a pump controller that may be mounted remotely.

The controller shall have LCD readout of pumping
strokes per minute (or hour), a stroke frequency push
pad for local pump control and an internal off external circuit for pacing signal selection.

Unit shall have a dilution water loss of fl ow sensor
which, sensing that water fl ow has been interrupted
for any reason, will place the polymer pump on
standby and will restart it automatically when fl ow
is restored. An integral timer shall monitor loss of
fl ow and energize contacts indicating alarm after 15
seconds of continuous loss.

Inputs:
■ 4-20 mA signal
■ Remote start contact
Outputs:
■ Run Contact
■ Loss of water
■ Contact Switch in Remote Position
Applications:

A. Standard control package which will
accommodate most of your control requirement
PolyBlend® Polymer Feed System “A” Controls

“B” Controls Specifi cations:

Unit shall be operated with a programmable micro controller.

Controller shall have polycarbonate touchpad membrane with four-digit LED readout. Enclosure shall be non-metallic and of waterproof design.

Micro controller shall pace polymer metering pump based on operator programmed data or based on a 420 mA analog input signal. Operator shall be able to determine mode of operation at touchpad, internal or external.

Internal mode shall allow for automatic polymer pump pacing based on programmed set point. Operator shall be able
to enter a makeup concentration set point. Controller will compute a ratio of polymer to water from primary dilution water fl ow rate signal generated by fl ow element. Controller will generate signal to pace pump accordingly. As primary dilution water fl ow changes the set point concentration will be automatically maintained by controller.

External mode shall allow for automatic polymer pump pacing based on a 4-20 mA analog input signal.

Unit shall be powered through an on off remote circuit. In the remote mode, the unit shall accept a remote run signal. Unit is manually powered in the ON mode. Controller shall indicate mode of operation with LED.

Unit shall have a dilution water loss of fl ow sensor which, sensing that water fl ow has been interrupted for any reason, will place the polymer pump on standby and will start it automatically when fl ow is restored. An integral timer shall monitor loss of fl ow and energize contacts indicating alarm after 15 seconds of continuous loss. Controller shall indicate loss of water alarm with LED.

Controller LED display shall indicate:
■ Low fl ow set point
■ Primary water fl ow
■ Secondary water fl ow
■ Polymer fl ow
■ Loss of water
■ Make up solution concentration in mixing chamber
■ Discharge solution concentration including post dilution Controller shall have preprogrammed auto fl ush cycle, which will disable polymer pump yet allow dilution water to fl ow through system for a preset time at each shutdown.

Inputs:
■ 420 mA signal
■ Remote start control
■ One confi gurable alarm contact
Outputs:
■ Run contact
■ Loss of water fl ow
Applications:

A. Where more indications of fl ow percent dilution and other functions need to be displayed.

B. Especially eff ective when system is being used as
a make-down unit, to assure consistent solution
concentrations are required in the holding tank. Local
control only.
"B+" Controls Specifi cations:

Unit shall be operated with a PLC and high resolution HMI for greater functionality and future customization. PLC shall include Ethernet communications. An Ethernet Switch shall be supplied inside enclosure. Enclosure door mounted NEMA 4X HMI with 4” high resolution color touch-screen and four membrane Function Keys. A door mounted Power On/Off
switch, Power On light and Emergency Stop pushbutton shall be supplied on the enclosure door with quick-release latches.

PLC shall pace polymer metering pump based on operator
programmed data or based on a 4-20 mA analog input signal.

Operator shall be able to determine mode of operation at HMI, internal or external.

Internal mode shall allow for automatic polymer pump pacing based on programmed set point. Operator shall be able to enter a make-up concentration set point. PLC will compute a ratio of polymer to water from primary dilution water fl ow rate signal generated by fl ow element. PLC will generate signal to pace pump accordingly. As primary dilution water fl ow changes the set point concentration will be automatically maintained by PLC.

External mode shall allow for automatic polymer pump pacing based on a 4-20 mA analog input signal.

HMI Functionality:
■ Setup Screens for entry of sensor and system data
■ Control, Confi guration and Calibration screens for manual operation of motors and Dilution water valve, adjusting analog outputs, calibrating polymer pump capacity and
confi guring water fl ow sensors.
■ Entry of Polymer Concentration, Loss of Water Set Point and Flush Time.

PolyBlend® Polymer Feed System “B” Controls

■ Status screens to show the following:
- ON-OFF-REMOTE status
- System mode – Maintenance, calibration, run modes
- System Running Indicator
- Loss of Water Indicator
- Alarm status Indicator
- Make-Up Concentration Readout in %
- Feed Concentration Readout in %
- Polymer fl ow Readout in selected units (calculated)
- Primary Water Flow Readout
- Secondary Water Flow Readout
- System Flush Indicator
- Pump Capacity Exceeded Indicator
■ Help screens to assist setup
■ Alarm screen with history
■ A No-Action Clean Screen allowing HMI wipe-down while powered.
■ On-screen Touch and membrane Function Key navigation
buttons allow surfi ng between screens.
■ Main Menu
■ System Mode
■ System Status
■ Pump Control
■ Pump Calibrate
■ Mixer Control
■ Water valve control
■ System Run Times
■ System Set-up Screens
■ Help Screen?
■ Set Time, Date and LCD Intensity
■ Flush Cycle
DIGITAL INPUTS:
■ Loss of power input
■ E-Stop pushbutton
■ Motor overloads (for mixer motor and polymer pump)
■ Neat polymer pump protection (thermal fl ow switch)
■ Remote alarm
■ Remote start
■ Loss of Polymer fl ow switch
■ Neat polymer supply tank low level switch
■ Primary fl ow sensor
■ Secondary fl ow sensor
■ Seven available inputs for future customization
(All inputs are wired as 24 V DC Sinking)
ANALOG INPUTS:
■ REMOTE 4-20mA Signal to control the speed of the
Polymer pump.
■ 4-20mA Input can be used for connection to a Polymer fl ow meter for displaying actual Polymer Flow.
■ Room for an optional analog I/O module is provided to connect 4-20mA water fl ow meters, scales or other devices.

DIGITAL OUTPUTS:
■ System running relay
■ Loss of Water Flow relay (Set Point is confi gurable) ■ System in “Remote” verifi cation relay
■ Dilution water valve open/close control relay
■ Polymer Pump Run control relay
■ Mixer Motor Run control relay
■ Alarm output relay
■ Pulse Output (adjustable 0 – 360 pulses/minute for solenoid actuated pumps)
■ Four available digital outputs (For future customization) ANALOG OUTPUTS:
■ 4-20 mA polymer pump pacing signal
■ 4-20 mA customer pump pacing feedback signal
■ Room for an optional analog I/O module is provided to control devices or provide primary and secondary water fl ow feedback
■ System running
ALARMS:
■ E-Stop Pushbutton alarm
■ Remote Alarm Input
■ Mixer Motor OL
■ Polymer Pump Motor OL
■ Polymer Pump Protection Switch
■ Loss of Polymer Switch
■ Booster Pump Motor OL
■ Static Water Pressure Switch
■ Booster Tank Low Level
■ Bulk Polymer Tank Low Level
■ PLC Battery Low
■ Low Water Flow Timeout
■ Loss of Analog Input Channel 1
■ Loss of Analog Input Channel 2

www.ugsichemicalfeed.com
© 2014 UGSI Chemical Feed, Inc.

Subject to change without prior notice.

Literature No. CF.480.350.PCP.IE.PS.0117
Polyblend® is a trademark of UGSI Chemical Feed, Inc.

The information provided in this literature contains merely general descriptions or characteristics of performance which in actual case of use do not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of a written contract.

UGSI Chemical Feed, Inc.
1901 West Garden Road
Vineland, NJ 08360
Toll Free: 855-669-3845
Local: 856-896-2160
Fax: 856-457-5920
Email: [email protected]
Website: www.ugsichemicalfeed.com
"C "Control Specifi cations:

With the introduction of the Polymer Dosage Controller, the “C” Control system has been upgraded and is now capable of local and remote fl ow pacing modes to maintain a constant polymer solution concentration. Components shall include a modulating fl ow control valve with orifi ce size based on fl ow setpoint determined by the controller. Feedback control shall be supplied by monitoring dilution water fl ow with electronic fl owmeters for automatic valve adjustment. This control function shall ensure consistent dosage fl ow rates and concentration by automatically compensating for changes in incoming water fl ow rate or pressure by changing the valves variable orifi ce.

Controller shall be capable of three modes of operation including:

Polymer fl ow rate setpoint The system shall maintain a desired polymer fl ow rate either by manual entry setpoint or via a 4-20 mA input signal. The dilution water valve will adjust automatically to maintain the polymer solution concentration setpoint.

Water fl ow setpoint:

The system shall maintain a desired water fl ow rate either by manual entry setpoint or via a 4-20 mA input signal. The polymer pump will adjust automatically to maintain the polymer solution concentration setpoint.

Polymer solution concentration setpoint:

The system shall maintain a desired polymer solution
concentration either by manual entry setpoint or via a 4-20 mA input signal. The controller shall sense changes in incoming make-up water fl ow. The system shall automatically maintain a constant concentration via a modulating water fl ow control valve. This control function shall ensure consistent dosage fl ow rates and concentration by automatically compensating for changes in incoming water fl ow rate or pressure by changing the valves variable orifi ce.

Remote control mode includes:
■ Remote polymer fl ow rate control via 4-20 mA analog
input.
■ Remote polymer solution concentration control via 4-20 mA analog input.
■ Remote water fl ow rate control via 4-20 mA analog input. ■ Electronic static water pressure switches, diff erential pressure switches, or similar electric devices shall not be acceptable for monitoring water fl ow.
■ Controller shall shut off polymer pump if water fl ow falls below an adjustable pre-set fl ow rate. Unit will automatically restart when the proper fl ow rate is resumed.

This will prevent feeding neat polymer in the absence of make-up water fl ow. Unit shall shut down and alarm after pre-set time.
■ Controller shall have pre-set adjustable auto-fl ush cycle which will disable polymer pump yet allow dilution water to fl ow through system for a pre-set time at each shutdown. ■ In the event the system water supply fl uctuates.

PolyBlend® Polymer Feed System "C" Controls

EXHIBIT 1B

1901 West Garden Road
Vineland, NJ 08360
856 896 2160
cleanwater1.com
[email protected]
February 13, 2026
Re: UGSI Chemical Feed, Inc. Representation
To Whom It May Concern:

This is to confirm that G3 Engineering is the exclusive manufacturer’s representative of UGSI Chemical Feed, Inc. (UGSI) for products offered and sold in Northern California for use in the municipal market. Accordingly, G3 Engineering is also authorized to offer and sell equipment and spare parts for Polyblend®, and Dynablend™ products. Polyblend®/Dynablend™ dry and liquid emulsion polymer activation systems are registered trademarks of UGSI, and no other third-party manufacturers are permitted by UGSI to fabricate or market a Polyblend® or Dynablend™ polymer system in Northern California.

If you have any questions or desire additional information, please contact our Regional Sales Manager, Ethan Brooke, at 917-501-7358, or visit our website at www.cleanwater1.com. Thank you for your interest in our products.

Sincerely,
Guy Chadwell
Guy Chadwell, Vice President
cc: Ethan Brooke

Agenda Item 9

CITY OF YUBA CITY

STAFF REPORT
Date: March 17, 2026
To: Honorable Mayor & Members of the City Council;
From: Administration Department
Presentation By: Ciara Wakefield, City Clerk
Summary
Subject: Annual Report from the Downtown Yuba City Business Improvement District and Proposed Levy of Annual Assessment for 2026
Recommendation: A. Adopt a Resolution Accepting and Approving the 2025-2026 Annual Report of the Downtown Yuba City Business Improvement District
B. Adopt a Resolution of Intention to Levy and Collect 2026 Annual Assessments and set a Public Hearing for April 7, 2026
Fiscal Impact: None related to levy and collection of annual assessments Purpose:

To provide notice and opportunity for comment regarding the 2026 Assessment Levy for the Downtown Yuba City Business Improvement District.

Background:

Pursuant to Chapter 9, Title 3 of the Yuba City Municipal Code, the Downtown Yuba City Business Association (DBA) has submitted its Annual Report. The report highlights accomplishments for the past year and identifies activities and improvements to be funded for the coming year. The boundaries of the District and the assessments to be collected are consistent with previous years.

Annually, renewal of the DBA’s Business Improvement District (BID) is accomplished in a two-part process. First, the adoption of a Resolution declaring the City’s intent to levy an assessment and ordering a Public Hearing. At a subsequent meeting, a Public Hearing is held in consideration of a Resolution confirming the Annual Report and levying the assessments for 2026.

Revenue from the assessments levied in the BID is used to fund improvements and activities to promote the District. The types of activities to be funded include: promotion of public events, promotion of tourism, and activities that benefit businesses located and operating in the BID.

The DBA is charged with carrying out the activities of the BID and their key focus continues to be establishing a strong leadership structure, marketing Downtown and creating new and improved events on Plumas Street. Economic success of the downtown is a priority achieved through the combined efforts of all the businesses in the district.

Analysis:

The attached Downtown Business Association Annual Report outlines the accomplishments during the 2025 calendar year, as well as the budget for 2026. In the coming calendar year, on behalf of the DBA, the City anticipates collecting approximately $35,210 in assessments from both members and associate members. The BID is crucial to the economic success of the downtown merchants, especially as the economy has weathered increased inflation. The assessment district’s funds will market the downtown whereas some individual merchants would not be able to market on their own. The DBA is currently managing the marketing efforts for downtown and will continue to do so for the district and the future of the downtown. It is the expressed desire of the DBA that the BID assessments continue.

Fiscal Impact:

While there is no direct fiscal impact to the City related to the levy and collection of annual assessments, the funds generated through the BID are used to promote the downtown merchants, which provide sales tax revenue to the City.

Alternatives:

1. Do not levy assessments.

2. Identify alternate funding source for Downtown improvements and activities.

Recommendation:

A. Adopt a Resolution Accepting and Approving the 2025-2026 Annual Report of the Downtown Yuba City Business Improvement District.

B. Adopt a Resolution of Intention to Levy and Collect 2026 Annual Assessments and set a Public Hearing for April 7, 2026.

Attachments:

1. Resolution - DBA Annual Report-2025-26

2. Yuba City Downtown Annual Report 2025

3. Resolution - Intention to Levy 2025-26
Prepared By: Submitted By:

Ciara Wakefield
City Clerk
Robert Bendorf
City Manager

ATTACHMENT 1

RESOLUTION NO. ____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY ACCEPTING AND APPROVING THE 2025-2026 ANNUAL REPORT OF THE

DOWNTOWN YUBA CITY BUSINESS IMPROVEMENT DISTRICT
WHEREAS, pursuant to the Parking & Business Improvement Area Law of 1989, California Streets & Highway Code Section 36500 et seq. (the “Act”), the City Council adopted Ordinance No. 06-98 which became effective on January 1, 1999, and WHEREAS, pursuant to the Act and Section 3.9.020 of the Yuba City Municipal Code added by Ordinance No. 06-98, the City Council established a certain described parking and business improvement area named the Downtown Yuba City Business Improvement District (“District”); and
WHEREAS, pursuant to Section 3.9.030 of the Yuba City Municipal Code added by Ordinance No. 06-98, the City appointed the elected officers of the Yuba City Downtown Business Association to serve as an advisory board to the City Council (the “Advisory Board”) and authorized the City to enter into an agreement with the Advisory Board to carry out the purposes of the Act and Chapter 9 of the Yuba City Municipal Code; and WHEREAS, the Advisory Board has filed the 2025-2026 Annual Report with the City Clerk for consideration by the City Council.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUBA CITY DOES HEREBY RESOLVE, DETERMINE, AND FIND AS FOLLOWS:

1. The recitals set forth herein are true and correct.

2. Revenue from the assessments levied in the District shall be used to fund improvements and activities to promote the District. The types of activities to be funded include promotion of public events in the District, promotion of tourism within the District, and activities that benefit businesses located and operating in the District.

3. The 2025-2026 Annual Report contains a full and detailed description of the improvements and activities to be provided, the boundaries of the District and boundaries of each separate benefit zone within the District, and the proposed assessments to be levied upon the businesses within the area. A true and correct copy of the Annual Report is on file with the City Clerk of the City of Yuba City, which is approved by the City Council.

4. This Resolution is effective on its adoption.

I HEREBY CERTIFY that the foregoing resolution was introduced and read at a Regular Meeting of the City Council of the City of Yuba City on the 17th day of March, 2026, and was duly adopted at said meeting by the following vote:

AYES:

NOES:

ABSENT:

_______________________
Marc Boomgaarden, Mayor
ATTEST:
______________________________
Ciara Wakefield, City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
________________________________
Shannon Chaffin, City Attorney
Aleshire & Wynder, LLP
Attachment(s):

1. Exhibits A-I – Annual Report 2025-2026

ATTACHMENT 2
EXHIBITS A – I

Annual Report
2025-2026

To: Honorable Mayor and Members of the City Council
Cc: Robert Bendorf, City Manager
From: Board of Directors - Yuba City Downtown Business Association RE: 2025-2026 Annual Report
Date: February 26, 2026

1. NAME: Yuba City Downtown Business Association

2. FISCAL YEAR: January 1, 2026 to December 31, 2026

3. BOUNDARY/ZONE CHANGES: There are no proposed changes in the boundaries of the District. (See existing boundaries on Exhibit A)

4. ACCOMPLISHMENTS OF YUBA CITY DOWNTOWN BUSINESS
ASSOCIATION DURING 2025: (See Exhibit B)

5. LIST OF 2025-26 YCDBA DIRECTORS AND COMMITTEE MEMBERS (See Exhibit C)

6. LIST OF ASSOCIATE MEMBERS (See Exhibit D)

7. PROPOSED IMPROVEMENTS AND ACTIVITIES (FY2025-26) (See Exhibit E)

8. ESTIMATED 2025 EXPENSES (See Exhibit F)

9. ESTIMATED BUDGET (FY2026) (See Exhibit G)

10. AGING ACCOUNTS RECEIVABLE-COLLECTIONS (See Exhibit H)

11. BASIS OF ASSESSMENT (FY2026) (See Exhibit I)

EXHIBIT A
There are no proposed changes in the boundaries of the District.

EXHIBIT B
Yuba City Downtown Business Association
Mission of the Organization:

To preserve, promote and encourage aspiring businesses and provide a safe, clean center of culture and community life for residents and visitors alike.

Accomplishments for 2024/2025
Marketing Committee:

Tower Park officially opened in partnership with the City of Yuba City, creating a revitalized community gathering space in the downtown corridor.

Successfully resolved long-standing billing issues and implemented a formal lien process to improve accountability and strengthen financial operations.

Celebrated and promoted the activation of the Center Street lighting project, enhancing the visual appeal and nighttime experience of downtown.

Secured additional outside volunteers to support downtown initiatives, strengthening community involvement and operational capacity.

Continued collaboration with the City of Yuba City to maintain and build upon infrastructure improvements that support long-term downtown revitalization.

Events Committee:

Built on the momentum of established annual events while maintaining strong community participation.

Continued growth and refinement of downtown programming to increase consistency and community engagement.

Strengthened volunteer involvement to support event execution and logistics.

Leveraged improved downtown infrastructure, including Center Street lighting and Tower Park, to enhance event atmosphere and attendance experience.

Maintained compliance with the City’s Special Event Ordinance through organized planning and structured event coordination.

Expanded collaboration efforts with local partners and community stakeholders to position downtown as a premier destination for events and gatherings.

EXHIBIT C
List of 2026 Directors and Committee Members
Yuba City Downtown Business Association

EXHIBIT C
YCDBA Officers
President – Marni Sanders, Blue Zones
Vice President – Jake Livingood, Electronic Playground, LLC (Marketing Chair) Treasurer – Chris Drown, The Happy Viking
Secretary - Natalie Syverson, Natalie Syverson Photography Past President – Ryan Henshaw, State Farm Insurance
YCDBA Board of Directors
Sandee Drown, The Happy Viking (Events Chair
Jake Livingood, Electronic Playground, LLC (Marketing Chair) Tiffani Heyford, Creative Interiors
Alfredo Padilla, A & E Kings Boutique
Ryan Henshaw, State Farm Insurance
Natalie Syverson, Natalie Syverson Photography
Scott Sargent, Sutter Buttes Brewing
Marni Sanders, Blue Zones
Chris Drown, The Happy Viking
Brett Miles, Visual Impact Signs

EXHIBIT C
Associate Members
• The DBA has 6 Associate Member businesses. These are businesses that are not located downtown; however, they want to be a part of and show their support for the downtown district. The following are DBA Associate Members:
• City of Yuba City
• Harkey House Bed & Breakfast
• Holycross
• Recology Yuba-Sutter
• Visual Impact Signs
• Yuba Sutter Chamber of Commerce

Proposed Improvements and Activities
● Refined volunteer coordination system with designated event leads to reduce staff time on-site.
● Encourage merchant-led micro events that require minimal DBA oversight. ● Encourage business-sponsored beautification elements (planters, lighting accents). ● Seek Additional Funding for immersive experiences, lighting, marketing, and beautification.

Estimated 2025 Expenses

Estimated Budget FY 2026

Aging Accounts Receivable – Collections

District Assessment Formula
The Business Improvement District (BID) is a self-initiated business district funded by an annual assessment based on a formula developed by the Downtown Yuba City Business Improvement District Formation Committee. The assessments will be used to fund improvements and activities in the BID designed for economic stimulation and business enhancement for the businesses in the BID. The assessment formula is based on type, size and location of businesses in order to offer a fair and equitable charge for each business in the BID.

Retail, Restaurant and Service Businesses: Includes businesses that buy and resell goods such as clothing stores, shoe stores, office supplies, businesses that sell prepared foods and drinks, general office, news and advertising media, printers, photographers, personal care facilities and outlets, contractors, builders, service stations, repairing and servicing businesses, renting and leasing businesses, utilities, vending machine businesses, household finance companies, theaters and entertainment-oriented businesses, and other similar businesses not otherwise defined in the other categories.

Professional Business: Includes attorneys, architects, accountants, engineers, surveyors, physicians, dentists, optometrists, chiropractors and others in a medical/health service field, consultants, real estate brokers, financial advisors, laboratories (including dental and optical), hearing aid services, artists and designers, and similar businesses.

Lodging Businesses: Includes inns, hotels, motels, RV parks, and other similar businesses.

Financial Institutions: Includes banks, savings & loans, credit unions, and similar businesses.

Associate Members: Businesses outside the BID boundaries that would like to participate will be charged.

Note: Retail and restaurant businesses will be assessed on size which will be determined by number of employees, either full-time or the equivalent made up of multiples of part-time employees.

Business Type
Business Size Annual Assessment Zone
(Number of Employees) A B
Retail, Restaurant and
Service
Small (1-4) $385 $180
Medium (5-9) $560 $285
Large (10+) $735 $380
Professional Business $350 $180
Lodging Business $560 $285
Financial Business $875 $725

ATTACHMENT 3

RESOLUTION NO. ____

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY

DECLARING ITS INTENTION TO LEVY AND COLLECT AN ANNUAL ASSESSMENT FOR CALENDAR YEAR 2026 IN THE DOWNTOWN YUBA CITY BUSINESS IMPROVEMENT DISTRICT AND SETTING A PUBLIC HEARING FOR APRIL 7, 2026 WHEREAS, pursuant to the Parking & Business Improvement Area Law of 1989, California Streets & Highway Code Section 36500 et seq. (the “Act”), the City Council adopted Ordinance No. 06-98 which became effective on January 1, 1999, and WHEREAS, pursuant to the Act and Section 3.9.020 of the Yuba City Municipal Code added by Ordinance No. 06-98, the City Council established a certain described parking and business improvement area named the Downtown Yuba City Business Improvement District (“District”); and
WHEREAS, pursuant to Section 3.9.030 of the Yuba City Municipal Code added by Ordinance No. 06-98, the City appointed the elected officers of the Yuba City Downtown Business Association to serve as an advisory board to the City Council (the “Advisory Board”) and authorized the City to enter into an agreement with the Advisory Board to carry out the purposes of the Act and Chapter 9 of the Yuba City Municipal Code; and WHEREAS, the Advisory Board has filed the Annual Report for calendar year 2025-2026 with the City Clerk.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUBA CITY DOES HEREBY RESOLVE, DETERMINE, AND FIND AS FOLLOWS:

1. The recitals set forth herein are true and correct.

2. The City Council does, at the request of the Advisory Board, and pursuant to the Act, declare its intention to levy and collect assessments within the District for calendar year 2026. The District is generally located in the downtown area of Yuba City, as more specifically depicted in Attachment 2.

3. Revenue from the assessments levied in the District shall be used to fund improvements and activities to promote the District. The types of activities to be funded include promotion of public events in the District, promotion of tourism within the District, and activities that benefit businesses located and operating in the District.

4. The 2025-2026 Annual Report contains a full and detailed description of the improvements and activities to be provided for in calendar year 2026, the boundaries of the District and boundaries of each separate benefit zone within the District, and the proposed assessments to be levied upon the businesses within the area. A true and correct copy of the Annual Report is on file with the City Clerk of the City of Yuba City, which has been approved by the City Council.

5. A public hearing to levy the annual assessment is hereby set for Tuesday, April 7, 2026, at 6:00 p.m., or as soon thereafter as may be heard, before the City Council of the City of Yuba City at the Council Chambers located at 1201 Civic Center Boulevard, Yuba City, California.

6. At the public hearing the testimony of all interested persons, for or against the levying of the proposed assessment will be heard. A protest against the levying of the proposed assessment may be made orally or in writing. An oral protest shall be made at the public hearing. The form and manner of protests must comply with Sections 36524 and 36525 of the Act.

7. If at the conclusion of the public hearing, there are of record, valid written protests by the owners of the businesses within the District that will pay fifty percent (50 percent) or more of the total assessments of the entire District, no further proceedings, to levy the proposed assessment shall be taken for a period of at least one (1) year from the date of the finding of the majority written protest by the City Council.

8. Further information regarding the Downtown Yuba City Business Improvement District may be obtained from the City Clerk of the City of Yuba City at 1201 Civic Center Boulevard, Yuba City, California, or from the President of the Yuba City Downtown Business Association, Ryan Henshaw, State Farm Insurance, 799 Plumas Street, Yuba City, California.

9. The City Clerk is instructed to provide notice of the public hearing by publishing this Resolution of Intention in a newspaper of general circulation in the City of Yuba City no less than seven (7) days before the hearing.

10. This Resolution is effective on its adoption.

I HEREBY CERTIFY that the foregoing resolution was introduced and read at a Regular Meeting of the City Council of the City of Yuba City on the 17th day of March, 2026, and was duly adopted at said meeting by the following vote:

AYES:

NOES:

ABSENT:
_______________________
Marc Boomgaarden, Mayor
ATTEST:
______________________________
Ciara Wakefield, City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
________________________________
Shannon Chaffin, City Attorney
Aleshire & Wynder, LLP

Agenda Item 10

CITY OF YUBA CITY

STAFF REPORT
Date: March 17, 2026
To: Honorable Mayor & Members of the City Council;
From: Administration Department
Presentation By: Ciara Wakefield, City Clerk
Summary
Subject: Community Sponsorship Request - Playzeum
Recommendation: Consider the sponsorship request from Playzeum, and if approved:

Adopt a Resolution approving the sponsorship request from Playzeum Fiscal Impact: Monetary sponsorship up to $2,000.00 (Account 4220-66015) Estimated costs associated with staff time for the event: $1,787.45

Purpose:

City sponsorships reflect support of specific programs or events by an organization. The intent is that the public will receive some intrinsic cultural, economic, educational, or entertainment value from the program or event.

Background:

On January 18, 2022, the City Council adopted an Amended Community Sponsorship Policy outlining factors for approval, including resources available, alignment with Council goals, community benefit, risk, and insurance requirements.

On October 1, 2024, Council directed staff to update the policy. Amendments adopted January 21, 2025, added a one-year eligibility restriction, clarified quarterly review deadlines, and aligned applications with the City’s fiscal schedule.

In March 2026, a sponsorship request was received from:

Playzeum
Playzeum's mission is to provide our local community with programs, services and hands-on play exhibits where all children, families and community members of diverse backgrounds and abilities can explore, discover, create and learn together. Their annual Touch-a-Truck event provides an opportunity for more than 3,500 residents to get up close with a variety of vehicles including a helicopter, garbage truck, concrete mixer, and tow truck just to name a few.

As part of the Touch-a-Truck event scheduled for April 18, 2026, Playzeum has requested a monetary sponsorship up to $2,000.00 and in-kind services, including the participation of any available City

service vehicles including but not limited to a Fire Engine and Public Works/Parks/Police vehicles. The City has been a participant and a sponsor of this event in previous years.

Analysis:

The Amended Community Sponsorship Policy states, "The budget for the Community Sponsorship Program shall be established by City Council each year during the annual budget process," and "applications will be presented to Council quarterly on a first-come, first-served basis." For FY 25-26, City Council budgeted $10,000 for Community Contributions and $10,000 for Community Events.

Budgeted funds are to be considered and allocated on a quarterly basis, which provides $2,500 quarterly for Community Contributions and $2,500 quarterly for Community events.

The proposed sponsorship provides benefits to the community by providing events that foster community engagement and a safe space for community members to gather and celebrate together.

Fiscal Impact:

Monetary sponsorship up to $2,000.00 (Account 4220-66015) Estimated costs associated with staff time for the event: $1,787.45 Alternatives:

1. Authorize a monetary sponsorship in a different amount and approve the in-kind contribution of equipment and staffing.

2. Do not authorize a monetary sponsorship and approve the in-kind contribution of equipment and staffing only.

3. Do not approve monetary or in-kind sponsorship requests.

Recommendation:

Consider the sponsorship request from Playzeum, and if approved:

Adopt a Resolution approving the sponsorship request from Playzeum.

Attachments:

1. RESOLUTION - Community Sponsorship Request (Playzeum) 03.17.26

2. Touch A Truck Flyer & Application 2026
Prepared By: Submitted By:

Ciara Wakefield
City Clerk
Robert Bendorf
City Manager

ATTACHMENT 1

RESOLUTION NO._______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY

APPROVING COMMUNITY SPONSORSHIP REQUEST FOR PLAYZEUM
(TOUCH A TRUCK EVENT)
WHEREAS, Playzeum Yuba-Sutter provides the local community with programs, services and hands-on play exhibits where children, families and community members of diverse backgrounds and abilities can explore, discover, create and learn together; and WHEREAS, Playzeum Yuba-Sutter, a 501(c)(3) non-profit organization, is requesting a monetary sponsorship and in-kind participation at their upcoming Touch A Truck event ; and NOW, THEREFORE, the City Council of the City of Yuba City (“City Council”) does hereby resolve as follows:

Section 1. The City Council finds the above recitals true and correct; and

Section 2. The City Council finds that this event fosters community engagement and a safe space for community members to gather and celebrate together; and Section 3. The City Council finds that the Playzeum Yuba-Sutter request meets the criteria for consideration of such request because the applicant is a nonprofit with financial hardships that services an important public purpose, and according approves the monetary sponsorship request in the amount of $2,000.00 for the Touch A Truck event.

Section 4. The City Council approves in-kind services including staff participation at the Touch A Truck event with available City service vehicles.

Section 5. This Resolution shall take effect immediately and that the City Clerk shall certify the adoption of this Resolution.

The foregoing Resolution of the City Council of the City of Yuba City is duly introduced, PASSED AND ADOPTED at a regular meeting thereof held on this 17th day of March, 2026 by the following vote:

AYES:

NOES:

ABSENT:
____________________________
Marc Boomgaarden, Mayor
ATTEST:
_____________________________
Ciara Wakefield, City Clerk

APPROVED AS TO FORM

COUNSEL FOR YUBA CITY
___________________________
Shannon L. Chaffin, City Attorney
Aleshire & Wynder, LLP

ATTACHMENT 2

11 AM TO 3 PM
$5.00 PER PERSON
1980 SOUTH WALTON AVE YUBA CITY

TT UUCCHH
TRUCK
A
HANDS
ON FUN!
SATURDAY APRIL 18, 2026
giving chi ldren the chance to get behind the wheel
of their favorite vehicles, meet community heroes,
help fami l ies create fun memories,
and raise awareness and funds for playzeum.

A sensory friendly hour from 10am to 11am for
families to enjoy a less-crowded, reduced sound from
select exhibi ts and a quiet ,
respi te space wi th sensory materials available.
purchase tickets
onl inE and void the l ine

CITY OF YUBA CITY | Rev. 1.18.22

COMMUNITY SPONSORSHIP APPLICATION FORM
Name of Organization Non-Profit ID/ 501 C#
Address City/State/Zip
Contact Person Phone Email
Organization Purpose/Mission
Type of Organization:
 Non-Profit (located or primarily serves residents within the City of Yuba City  Educational Institution
 Local business (located within City of Yuba City city limits) Type of Event:
 Local Celebration Athletic Cultural Educational
 Fundraiser Entertainment Other
Program or Event Name
Event Location
Event Date/Time
Expected Number of Participants
Open to the Public?  Yes  No
Please explain how your program or event meets one or more of the sponsorship criteria below:
• Boosts the local Yuba City economy:
• Provides an opportunity to help build community, foster a sense of pride within our community, and engage our community:
• Contributes positively to the recognition and image of the City of Yuba City:

CITY OF YUBA CITY | Rev. 1.18.22
Type of Sponsorship Requested:
 In-kind services – Amount requested: _______________
Provide a description of the in-kind services requested:
 Facility Waiver – Amount requested: _______________
 Monetary Funding – Amount requested:
 Fundraiser Gift Basket – Amount requested:_____________ Other Considerations:
 I understand that if the City agrees to sponsor the event, I will acknowledge the sponsorship on all printed information or advertising related to the event using a message approved by the City and provide any written marketing material to the City before distribution of event materials.
 If the City agrees to sponsor the event, I understand that appropriate ADA accessibility and other permit requirements will be provided.  I understand that sponsorship is optional, and the City can deny this sponsorship application.

Signature of Applicant Date
Print Name of Applicant

Agenda Item 11

CITY OF YUBA CITY

STAFF REPORT
Date: March 17, 2026
To: Honorable Mayor & Members of the City Council;
From: Development Services Department
Presentation By: Doug Libby, Development Services Director Summary
Subject: ZC 26-01 Mobile, Open Air, and Sidewalk Vending Ordinance Update Recommendation: A. Conduct a Public Hearing; and
B. Introduce by title only and waive the first reading of an Ordinance of the City Council of the City of Yuba City amending Article 53 of Chapter 5 of Title 8 of the Municipal Code regarding mobile, open air, and sidewalk vending operations, including a finding that Zoning Code Amendment ZC 26-01 is not subject to environmental review pursuant to CEQA Guidelines Section 15061(b)(3) Fiscal Impact: No direct fiscal impact will result from amending the Municipal Code to revise the standards discussed.

Purpose:

To update the Municipal Code standards regulating vending operations within the city limits (including seizure of equipment of illegal vendors serving food), implementation of new requirements from the State involving sidewalk vending, and to clarify limitations on regulations to promote young entrepreneurs.

Council’s Strategic Goal:

This item is consistent with the Council’s Public Safety Strategic Goal to enhance public safety in the community.

This item is also consistent with the Council’s Business Friendly Strategic Goal. Establishing enhanced penalties for illegal vendors protects permitted vendors and restaurants who have complied with food facility regulations and obtained the required permits to operate. Additionally, clarifying special exceptions for young entrepreneurs promotes the development of business acumen for the next generation.

Background:

The Planning Commission considered this matter at a notice public hearing on February 25, 2026.

There was no opposition expressed and the Planning Commission unanimously recommended approval of the proposed ordinance to the City Council.

Staff periodically brings forward recommended code revisions to incorporate statutory and miscellaneous changes for consideration to keep the Zoning Code contemporary for the City’s needs and consistent with State law.

The City’s regulation of mobile vendors was last modified over a decade and a half ago. Since that time, there have been substantial changes both in business practices and in comprehensive changes in State law, local vending practices, etc. that necessitate an ordinance update.

Analysis:

The draft ordinance proposes to address these issues, as well as other updates including codifying largely existing practices for youth lemonade stands, removing outdated language, synching up requirements for mobile and other vendors, etc. The Planning Commission unanimously recommended approval of the proposed ordinance to the City Council. Staff have also proposed some refinements to allow mobile vendors for certain catering and party events limited to a specific residential property.

Mobile Vendors
Mobile Vendors include food trucks, mobile caterers and can include ice cream trucks and push carts and bicycle carts. Below is a summary of changes proposed for mobile vendors. • Update definitions for compliance with State law and practice. • Require a permit to operate to be prominently displayed at point of sale. • Clarify that permit renewals are to ensure data on file with the City is current. • Extend allowed hours of operation from 8pm to 9pm.
• Establish options for food trucks to operate, if approved by a school, in loading/unloading areas for up to 2.5 hours daily.
• Limit sales from private commercial property to 2 hours before needing to move locations.

Create an exception if the City issues a temporary use permit or other approval. • Provide for a single food truck to serve a party at a private residence up to six times per year. • Provide an option for limited tables and chairs if allowed by the City under a temporary use permit or specified in another City approval.

Open Air Vending (“Pop Up” Vendors)
Recently there has been a significant spike in illegal vending operations, especially with illegal food vendors temporarily setting up on private and public property and selling food at various locations throughout the city where otherwise prohibited. These operations can be quite extensive, including tents, generators, lights, food service areas, tables, chairs, music, etc. Among others, these “pop up” vendors are often trespassing, do not comply with State food facility regulations overseen by Sutter County, violate safety and ADA requirements, are in incompatible locations with existing uses, and are placing lawfully operating vendors (including traditional brick and mortar restaurants and licensed food truck vendors) at a significant competitive disadvantage.

City Code Enforcement conducts periodic evening and weekend education and enforcement activities.

Despite this, these illegal operators continue to “pop up” throughout the City. Code Enforcement has even had to close down illegal vendors multiple times in a single evening operation. Additionally, many of the operators claim to not have any identification, making any administrative citations or fines difficult to enforce.

Staff have prepared a draft ordinance for Council consideration. Among others, the draft ordinance

would allow Code Enforcement including:
• Seize and dispose of perishable materials, including unsafe food. • Seize equipment associated with the operation. The equipment would be stored by the City for 30 days and then can be disposed of if not claimed by the owner. • The owner can come to the City to reclaim the property upon providing suitable evidence of ownership, etc.
• Any costs incurred in the salvage, disposal, or storage of impounded property may be assessed against any responsible person, including the owner.
• An appeal process.

The proposed ordinance establishes a new “temporary use permit” that can be approved by the Director of Development Services for short-term activities on publicly owned property for three or fewer consecutive days within a 90-day period and sponsored by educational, fraternal, religious or service organizations or tax-exempt organizations. Other temporary uses may be considered by the Director if they are similar in nature and the required findings can be made, otherwise the Director shall forward the matter to the Planning Commission for consideration.

These requirements are in addition to the existing food vendor requirements having the appropriate Sutter County Environmental Health permit(s), City business license, a vending permit, insurance, etc.

Sidewalk Vendors
The State continues to pass legislation imposing additional limitations on the ability of cities to regulate local affairs. This includes the adoption of SB 946 and successor legislation which limits the ability of local governments to regulate sidewalk vendors, except as authorized under the law. In essence, the City is prohibited from regulating sidewalk vendors unless it adopts a program, such as through an ordinance, in limited circumstances and when the restriction is directly related to objective health, safety, or welfare concerns.

The draft initial ordinance establishes a program requiring, among others, limitations of sidewalk vending in residential zones, in parks with concessions, and on hours of operation; compliance with the ADA and local permit requirements; compliance with applicable Sutter County Environmental Health regulations; distance requirements from special events, etc. Under State law, violations of a city’s sidewalk vending regulations by a sidewalk vendor are punishable only by administrative fine.

Young Entrepreneurs
Many youth have had their first business opportunities from a simple stand in their front yards occasionally selling lemonade, baked goods, crafts, and similar items. Others have worked with local businesses to allow occasional sales to entering/exiting customers.

Currently this is illegal in many cities, who would require health permits, business licenses, insurance, and even entitlement such as a use permit. However, it has been the Council’s policy to encourage youth entrepreneurship and promote community engagement, and it has been the City’s practice to provide flexibility to these budding entrepreneurs. In furtherance of this, the draft ordinance proposes to formally codify exceptions for minors under the age of 18 from limited, low-impact sales activities without a business license.

To qualify, sales must be located on a residential property owned or lawfully occupied by the youth entrepreneur, or on a commercial or similar property where the owner or authorized agent has granted

permission for the activity. Sales may not include alcoholic beverages, obstruct public rights-of-way or sidewalks, or create traffic or safety hazards (such as having an open flame). Sales shall not exceed a cumulative total of 25 days within a rolling 12-month period. Temporary use of portable tables, chairs, shade structures, or other site furniture, and signs is permitted.

Finally, the draft ordinance (Section 8-5.5380 (d)) states that violations shall constitute a misdemeanor and not an infraction. Due to restrictions of State law, this provision does not apply to sidewalk vendors.

Environmental Considerations:

After reviewing the California Environmental Quality Act (CEQA) and the Guidelines, staff believes this item is covered by the general rule specified at CEQA Guidelines Section 15061(b)(3) and has determined with certainty that there is no possibility the proposed update to the Municipal Code would cause a significant, adverse, effect on the environment. This is because the proposed revisions merely provide for refinements to existing allowed uses and for additional clarity regarding the standards for Mobile, Open Air, and Sidewalk Vending operations in the City of Yuba City.

Fiscal Impact:

No direct fiscal impact will result from amending the Municipal Code to establish the proposed revisions. Existing budgeted monies will be used for this effort.

Alternatives:

The City Council may determine not to introduce the ordinance proposed or may desire to make revisions to the proposal. Depending on the nature of desired revisions, it may necessitate a continuance of the matter.

Recommendations:

A. Conduct a Public Hearing; and
B. Introduce by title only and waive the first reading of an Ordinance of the City Council of the City of Yuba City amending Article 53 of Chapter 5 of Title 8 of the Municipal Code regarding mobile, open air, and sidewalk vending operations, including a finding that Zoning Code Amendment ZC 26-01 is not subject to environmental review pursuant to CEQA Guidelines Section 15061(b)(3).

Attachments:

1. City Council Ordinance (with track changes)
Prepared By: Submitted By:

Doug Libby
Development Services Director
Robert Bendorf
City Manager

ATTACHMENT 1

01248.0005 2078819.9 1
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF YUBA
CITY AMENDING ARTICLE 53 OF CHAPTER 5 OF TITLE 8 OF THE

MUNICIPAL CODE REGARDING MOBILE, OPEN AIR, AND

SIDEWALK VENDING OPERATIONS
WHEREAS, there has been a significant spike in illegal vending operations, especially with illegal food vendors temporarily setting up on private and public property and selling food at various locations throughout the city where otherwise prohibited. These operations can be quite extensive, including tents, generators, lights, food service areas, tables, chairs, music, etc. Among others, these “pop up” vendors are often trespassing, do not comply with State food facility regulations overseen by Sutter County, violate safety and ADA requirements, are in incompatible locations with existing uses, and are placing lawfully operating vendors (including traditional brick and mortar restaurants and licensed food truck vendors) at a significant competitive disadvantage; cause queuing of vehicles in the street or unsafe ingress/egress of traffic onto sites not suitable for said traffic, blocking of pedestrian passage, trespassing, or setting up semi-permanent operations contrary to the City’s zoning ordinance and which are not compatible with surrounding lawful uses, sanitation (including the lack of hand washing stations, trash receptacles, and appropriate storage to prevent insect intrusions, etc.); and
WHEREAS, the various challenges the City has encountered include difficulty in citing vendors who do not carry personal identification and enforcing said citations, receiving resources from sister agencies in citing food vendors operating unsafely and in violation of State and county law, and encountering “repeat offenders” who continue to vend in violation of Article 53 of Chapter 5 of Title 8 despite having received multiple warning or administrative citations; and WHEREAS, the City Council now desires to amend and supplement Article 53 of Chapter 5 of Title 8 pursuant to its police power to permit the City to impound equipment, food, goods, merchandise, and other vending items from vendors operating in violation of the Municipal Code and/or Sutter County Health Department regulations to thereby promote the public health, safety and welfare of the City’s residents and visitors; and
WHEREAS, the California State Legislature has also passed various legislation limiting local regulation of sidewalk vending; and
WHEREAS, local agencies still retain the authority to pass ordinances regulating certain aspects of sidewalk vending, such as time, place, and manner of vending in sensitive areas, but local agencies are prohibited from banning sidewalk vending altogether; and WHEREAS, additional requirements as to the manner of sidewalk vending are warranted, and are directly related to objective health, safety, and welfare concerns; and WHEREAS, it has been the Council’s policy to encourage youth entrepreneurship and promote community engagement, and it has been the City’s practice to provide flexibility to these budding entrepreneurs for certain vending. In furtherance of this, the Council desires to formally

01248.0005 2078819.9 2
codify exceptions for minors under the age of 18 from limited, low-impact sales activities without a business license; and
WHEREAS, the City Council considered this ordinance pursuant to a noticed public hearing at its meeting on ________________, 2026, and now desires to adopt the same.

NOW THEREFORE, the City Council of the City of Yuba City does ordain as follows:

SECTION 1. Recitals. The above recitals are incorporated by reference.

SECTION 2. Findings. The City Council finds that the updates to the ordinance are necessary for, and promote, the public health, safety, and welfare. The City Council further finds i) the limitations on hours of sidewalk vending are not unduly restrictive, and are not more restrictive than any limitations on hours of operation imposed by other vending uses; ii) the requirements maintain sanitary conditions; iii) the requirements are necessary to ensure compliance with disability access standards, including the Americans with Disabilities Act of 1990; iii) the City has met the requirements for requiring vendors to obtain a permit for vending from the City; iv) requiring a vendor to possess a valid California Department of Tax and Fee Administration seller’s permit promotes accountability, safety, and payment of taxes; v) requiring additional licenses, such as a Sutter County Environmental Health permit for the sales of food, promotes public health, safety, and welfare and is required by law; and vi) requiring compliance with other generally applicable laws is not only consistent with said laws, but allows for more effective enforcement of the same.

The City council also makes additional findings regarding sidewalk vending updates related to objective health, safety, and welfare concerns including as follows:
(a) The presence or accumulation of sidewalk vendors in areas that are necessary or reserved for vehicular or pedestrian ingress or egress, including driveways, building entrances and transit stops, or on sidewalks or pedestrian walkways such that adequate space is not reserved for ingress or egress, can cause trip and fall and traffic accidents, create other hazards such as fire hazards relating to the flow of traffic into or out of a building or facility, and inhibit accessibility by individuals with disabilities and others. (b) The use of stands or additional tables, crates or other equipment or items by sidewalk vendors can further impede the flow of vehicular or pedestrian traffic and cause or contribute to traffic accidents, and can also cause bodily injury to pedestrians resulting from obstructed visibility.
(c) Imposing City business license and permit requirements on sidewalk vendors is necessary to ensure that sidewalk vendors in the City operate in a manner that is safe, legal, and conducive to the public health and welfare.
(d) The operation of stationary sidewalk vendors in residential areas, and the operation of roaming sidewalk vendors at night in residential areas, can increase the incidence of crime in such areas and cause a public nuisance to the residents of such areas.

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(e) The operation of stationary sidewalk vendors in areas of City parks that are within 50 feet of residential dwellings can cause a public nuisance to the residents of such dwellings. (f) The operation of sidewalk vendors in non-residential areas at night, or at any time when the other businesses or uses in such areas are closed, can increase the incidence of crime in such areas.
(g) The transaction of business between sidewalk vendors and persons in motor vehicles can contribute to or facilitate concealment of criminal activities, including but not limited to solicitation and illegal distribution of controlled substances. (h) The creation of loud and unnecessary noises by sidewalk vendors, including the projection or amplification of sounds by sirens, megaphones or other devices, whether for the purposes of attracting attention to their operations or otherwise, can cause a public nuisance.
(i) The presence of sidewalk vendors in streets or on medians increases the risk of vehicularpedestrian and vehicular-vehicular traffic accidents and the adverse effects caused by transaction of business between sidewalk vendors and persons in motor vehicles. (j) The presence of sidewalk vendors near fire hydrants can impede the ability of firefighters to access the hydrants in the most efficient possible manner and thereby threaten public health and safety by slowing the response time in the event of a fire. (k) The operation of sidewalk vendors who sell food or beverages generates trash and refuse and can result in littering, particularly if appropriate receptacles are not provided. (l) The presence of unattended stands or other equipment or items of sidewalk vendors at any time, and the parking or storage of such stands or items in public areas when not in operation, can attract criminal activities including theft, and can increase the likelihood of trip and fall accidents and bodily injury to pedestrians who do not see or expect the presence of such items in their path.
(m) The operation of sidewalk vendors in public parks, where the park operator has an exclusive concessionaire agreement with a concessionaire operating in the park, can unreasonably interfere with the business operations of the concessionaire and the agreement between the park operator and the concessionaire. (n) The operation of sidewalk vendors in the immediate vicinity of areas designated for temporary use permit, or other permit or approval issued by the City can unreasonably interfere with the operations of the special event or other activity authorized by the permit. (o) The operation of sidewalk vendors in the immediate vicinity of certified farmer’s markets or permitted swap meets can unreasonably interfere with the operations of the farmer’s market or swap meet.
(p) The procurement of a permit from the Sutter County Environmental Health Department is required by state law for all sidewalk vendors who sell food.

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(q) All of the regulations imposed on sidewalk vendors by this ordinance are time, place and manner requirements pertaining to the operation of sidewalk vendors and are directly related to objective public health, safety or welfare concerns as set forth in this ordinance.

SECTION 3. CEQA. The City Council finds and determines that the adoption of an ordinance regulating and restricting mobile, pen air, and sidewalk vending operations not a “project” for the purposes of the California Environmental Quality Act (CEQA) as the it establishes administrative activities, or otherwise clarifies uses associated with existing regulations including State regulations, that will not result in direct or indirect physical changes to the environment as contemplated by CEQA Guidelines section 15378. Further, this ordinance is exempt under section 15061(b)(3) of the CEQA Guidelines, which provides that CEQA only applies to projects that have the potential for causing a significant effect on the environment. Here it can be seen with certainty that there is no possibility that the activity in question would have a significant adverse effect on the environment. As such, this activity is not subject to CEQA.

SECTION 4. Article 53 (Special Provisions for Mobile and Open Air Vending Operations) of Chapter 5 (Zoning) of Title 8 (Planning and Zoning) of the Yuba City Municipal Code is amended to read in its entirety as follows:

Article 53. - Special Provisions for Mobile, and Open Air, and Sidewalk Vending Operations
Sec. 8-5.5305. Declaration of purpose.

The City Council of Yuba City expressly finds that the vending of produce and prepared or prepackaged foods, goods, wares, and/or services on public streets, sidewalks, or alleys and on private property could potentially pose unsafe conditions and special dangers to the public health, safety, and welfare of the residents of the City of Yuba City. It is the purpose and intent of the City Council, in enacting this article, to provide those persons who engage in those types of vending operations with clear and concise regulations to prevent safety, traffic, and health hazards, as well as to preserve the peace, safety, and welfare of the community.

Sec. 8-5.5310. Definitions.

The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
(a) "Business owner" shall mean any person, firm, or corporation, which owns or controls any interest in any business engaged in vending as defined in subsection (u) of this section.
(b) "Building complex" shall mean a grouping of any number of buildings that was comprehensively planned as a single or multi-phased project. Building complexes are characterized by shared ingress/egress and parking improvements and master planned utility infrastructure. Building complexes can be located on the same or separate parcel(s) of land.

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(c) "Commissary" shall mean a food establishment in which food, containers, equipment, or supplies are stored or handled for use in motorized food wagons or conveyance. (d) "Conveyance," as used in this chapter, shall mean any vehicle (except motorized food wagons, as defined below), trailer, cart, wagon, or stand, with or without wheels, which may be moved from one place to another under its own power or by other means. (e) "Fixed place of business" shall mean a commercial activity operating from an immoveable building or enclosed structure at a permanent location which complies with applicable City, State and Federal regulations.
(f) "Itinerant merchant," for purposes of this chapter, shall mean any person who engages in a temporary business of selling and delivering goods, wares, or merchandise within the City, and who, in furtherance of such purpose, hires, leases, uses, or occupies any building structure, motor vehicle, tent, public rooms in hotels, lodging houses, apartments, shops, or any street alley, or other place within the City, for the exhibition and sale of such goods, wares, or merchandise, either privately or at public auction; provided that any person so engaged shall not be relieved from complying with the provisions of this chapter merely by reason of associating temporarily with any local dealer, trader, merchant, or auctioneer, or by conducting such transient business in connection with, as a part of, or in the name of any local dealer, trader, merchant, or auctioneer.
(g) "Mobile food vendor" shall mean any person that sells, or causes or allows another, whether as an employee or as an independent contractor leasing or renting equipment, to sell any food or drinks by means of a motorized food wagon or nonmotorized vehicle, such as catering truck, motorized cart, food truck, or other itinerant method. It includes a nonmotorized vehicle which is not self-propelled or which cannot be moved by a person pushing or pulling such nonmotorized vehicle. Where one person employs another person to sell food or drinks or where one person leases or rents equipment or a vehicle to another person to allow them to sell food or drinks, both individuals shall be considered mobile food vendors. Mobile food vendor shall not mean a sidewalk vendor as defined by this article.
(h) "Mobile vendor" shall mean a person conducting commercial activity from either a motorized or nonmotorized vehicle, or in conjunction with the same, offering goods for sale on a temporary, intermittent or seasonal basis in which customers approach the vehicle to make a purchase. This term includes mobile caterers, mobile food vendors, lunch wagons, eating cars, ice cream trucks, pushcarts, bicycle carts, motorized food wagon or conveyance. Notwithstanding, a mobile vendor does not include a sidewalk vendor.
(ih) "Mobile unit" shall mean any vehicle, truck, trailer, cart, pushcart, wagon, bicycle, dray, conveyance or structure on wheels, not firmly fixed to a permanent foundation, which is not required to have a license to operate issued by the California Department of Motor Vehicles.
(ji) "Motor vehicle" shall mean any automobile, truck, trailer or other conveyance requiring a license issued by the California Department of Motor Vehicles.

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(kj) "Motorized food wagon" shall mean any vehicle as defined in the California Vehicle Code, which is equipped and used for retail sales of prepared, prepackaged, or unprepared, unpackaged food or foodstuffs of any kind on any public street, alley, highway, or private street, alley, or property within the City of Yuba City. For the purposes of this chapter, a motorized food wagon shall also include any trailer or wagon pulled by a vehicle.
(lk) "Open air vendor" shall mean a person conducting commercial activity from either a motorized or nonmotorized vehicle at a fixed location on private property, offering goods for sale on a temporary, intermittent or seasonal basis in which customers approach the vending operation to make a purchase. Open air vendor operations are not mobile enough to comply with the time requirements identified for mobile vendors and are therefore constrained to setting up operations at an approved fixed location. Open air vending includes commercial activity from a stall or booth, including food sales, and may include associated canopies, tables, chairs, serving tables, temporary signage, or displays affiliated with the same. Notwithstanding, an open air vendor does not include a sidewalk vendor.
(ml) "Operator's permit" shall mean either a mobile vendor permit, or an open air vendor permit, or sidewalk vendor permit as provided for in this article. (m) "Peddler," for purposes of this chapter, shall mean any person traveling by ft., motor vehicle, mobile unit or any other type of conveyance from place to place conveying or transporting goods, wares, merchandise, foods, farm products, or provisions, or personal property of any nature whatsoever, and hawking or offering and exposing the same for sale, soliciting or taking or attempting to take orders for the same or for services to be furnished or performed in the future, or making sales and delivering articles to purchasers, or who, without traveling from place to place, shall sell or offer or solicit or taking or attempting to take orders for the same for sale from a motor vehicle or mobile unit.
(n) "Peddle" and "peddling" shall mean traveling by ft., motorized vehicle, nonmotorized vehicle or any other type of conveyance from place-to-place, house-to-house, or from street-to-street, carrying, conveying or transporting goods, wares, merchandise, or food and concurrently offering or exposing the same for sale. (o) "Peddling" shall mean the act of being a peddler.
(np) "Permittee" shall mean the person issued a permit to operate either a mobile or open air vending operation by the City of Yuba Citycity. (oq) "Persons" shall mean any person, business owner, firm, partnership, association, or corporation, and includes, but is not limited to, owners, operators, drivers, lessors, and lessees of motorized food wagons and conveyances.
(pr)"Public sidewalk or street" shall mean all of those areas dedicated as public thoroughfares, including, but not limited to, roadways, parkways, medians, alleys, sidewalks and public ways or dedicated easements for public rights-of-way.

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(qs) “Sidewalk vendor” shall mean a person who sells food or merchandise from a pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other nonmotorized conveyance, or from one’s person, upon a public sidewalk or other pedestrian path. A sidewalk vendor also includes a “roaming sidewalk vendor” who moves from place to place and stops only to complete a transaction, as well as a “stationary sidewalk vendor” who vends from a fixed location.
"Solicitor," "drummer," or "canvasser" shall mean any person who goes from house to house or from place to place taking, or attempting to take, orders for the sales of goods, wares, and merchandise of any nature whatsoever for future delivery or for services to be furnished or performed in the future, whether or not such individual has a sample, or whether or not he or she is collecting advance payments. "Canvasser" shall also include any person who goes from house to house or place to place for the purpose of leaving samples and/or advertisements for any goods, wares, or merchandise or for services to be rendered. (t) "Traveling merchant" shall mean any person who engages in buying, selling, trading or exhibition for purchase, sale or trade of any goods, wares, merchandise or services doorto-door, street-to-street or on a temporary or intermittent basis from a location which is not a fixed place of business. Traveling merchant includes, but is not limited to mobile street vendors and persons commonly referred to as solicitors, peddlers, hawkers, itinerant merchants, door-to-door salesman and transient vendors(ru) "Vend" or "vending" shall mean the sale of any goods, wares, merchandise, prepared, prepackaged, or unprepared, unpackaged food or foodstuffs of any kind from private or public property.
(sv) "Vendor"/"operator" shall mean any person who sells and makes immediate delivery, or offers for sale and immediate delivery, any goods, wares, or merchandise, or drives, operates, vends, and/or prepares food on or from a motorized food wagon or conveyance.

Sec. 8-5.5315. Regulation of sales.

It is unlawful for any person to vend, or attempt to engage in vending, or to conduct business for the purpose of vending, or operate any vehicle or conduct any business for the purpose of vending, from any motor vehicle, motorized food wagon, mobile unit, or conveyance, that is parked, stopped, or standing upon any public street, alley, highway, or property, or private street, alley, or property within the City of Yuba City except in accordance with all applicable provisions of this Codechapter.

Sec. 8-5.5320. Permit to operate—Mobile vendors.

A person desiring to engage in a mobile vendor operation, as defined by this article, shall submit a written application for a zoning clearance permit with all supporting information required by the City of Yuba City. Such application shall be accompanied by a nonrefundable, non-transferable application fee in an amount as may be established by resolution of the City Council. A zoning clearance ny such permit shall be required to be renewed annually so that all information on file is current and a separate nonrefundable, nontransferable application fee shall annually be paid annually for such renewal application. Vendors must have the permit in their

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possession when vending. Additionally, the permittee shall display a City issued permit sticker upon each of their mobile units, motor vehicles, or motorized food wagons, as defined herein to demonstrate compliance with the requirements of this article. For mobile vending not directly occurring from a mobile unit, motor vehicle, or motorized food wagon, such as may be the case for certain mobile food vendors, the permit must be prominently displayed at the point of sale in a location readily visible to the public and available for inspection. (a) As part of the permit to operate application, the vendor or business owner shall provide the following:
(1) Name, mailing address, and telephone number of applicant; (2) Presentation of a California driver's license, if any, or other photographic identification issued by a State or United States Federal agency establishing the applicant's age as 18 or older;
(3) Proof of current vehicle registration and a copy of an applicable vehicle insurance policy for any vehicles used in the vending activity;
(4) Four photographs (showing different exterior views) of each motorized food wagon or conveyance;
(5) A copy of a current Sutter County Environmental Health permit for any food service vending operation;
(6) A copy of the vendor or business owner's current business license certificatebusiness tax certification and applicable Board of Equalization Seller's Permit; (7) Business owners must show proof of payment to a commissary for the prior 12 months for all cases involving the reissuance of a permit; and proof of current payment for new vendors;
(8) Satisfactory proof of insurance as required by Section 8-5.5355; (9) A description of the goods, wares, merchandise, products, or any other thing or representation of value on consignment which will be the subject of the applicant's peddling or itinerant merchant business or activity.
(b) A permit to operate shall be granted unless:
(1) The vendor or business owneroperator fails to submit a complete application; (2) The vendor or business owner operator makes any omission, untrue statement or material misrepresentation in the application or provides fraudulent documentation with the application;
(3) The vendor or business owneroperator has violated this article within the last 12 months;
(4) Any vehicle proposed to be operated lacks the required equipment, is improperly licensed or is unsafe;
(5) The vendor or business owneroperator has not otherwise complied with this article.

Sec. 8-5.5325. Conditions to operate—Mobile vendors.

A person who has obtained a zoning clearance permit to operate a mobile vending operation shall comply with all of the required conditions below or be subject to revocation of the permit as described in Section 8-5.5360.

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(a) No permittee shall engage in business activity between the hours of 9:008:00 p.m. and 8:00 a.m., except upon invitation of the occupant or business owner. (b) No permittee shall solicit or attempt to solicit on any premises on which a notice or sign is clearly posted prohibiting solicitations or indicating the owner or occupant desire not to be solicited.
(c) The peddling of goods, merchandise, wares, or foods within a public or private parking lot is prohibited, unless the permittee can provide written permission from the property owner of the subject property to be located at said location. (d) The permit shall be exhibited by the permittee whenever requested by a law enforcement officer or at the request of any citizen the permittee is engaged in selling or soliciting. (e) The permittee shall maintain a valid City of Yuba City Business Licensebusiness license certificate at all times.
(f) No permittee shall peddle goods from any motorized vehicle that is not properly licensed and insured as required by the State of California.
(g) Any permittee engaged in the sale of tangible personal property that would normally be subject to sales tax if sold at retail shall maintain and have available for review, their California Sellers Permit issued by the California Department of Tax and Fee AdministrationState Franchise Tax Board.
(h) No permittee shall intentionally or deliberately obstruct the free movement of any member of the public on any sidewalk, street or public place. (i) No permittee shall peddle items or solicit to a captive audience, including persons in lines or seated in public places.
(j) No permittee shall peddle any prepackaged food unless the items have all State and Federally required food labels and a Sutter County Environmental Health permit, to sell such items.
(k) Except as otherwise provided, no permittee shall peddle any goods, merchandise, wares or foods by sitting, standing or walking on a public street, or upon a median or parkway within a public street or right-of-way.
(l) No permittee shall peddle or attempt to peddle to the occupant(s) of a vehicle in a public street or highway.
(m) The permittee may not park, store, or maintain a vehicle on a residentially zoned parcel in the City or a public street in a residential area.
(n) The permittee shall comply with all California State Vehicle Code Requirements. (o) The peddling of goods, merchandise, wares or foods from a nonmotorized vehicle with the exception of bicycle carts shall be limited to the public or private sidewalk. Except for bicycle carts, peddling is prohibited from or within a public street or highway.

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(p) The use of amplified music and horns must comply with the City's noise regulations as specified in Title 4, Chapter 17.

Sec. 8-5.5330. Parking and stopping restrictions—Mobile vendors. (a) A mobile vendor may locate and operate in the public right-of-way subject to the following conditions:
(1) A vendor shall not operate within 100 feet. of any street intersection. (2) No mobile vendor shall stop to conduct his or her business or activity from a motor vehicle or mobile unit within 200 feetft. of another mobile vendor who has already stopped to conduct business.
(3) A mobile vendor not on private property (such as in the public right of way) shall move not less than 600 feetft. at least every 30 minutes and may not return to a previous location or within 600 feetft. of a previous location on the same calendar day.
(i) An exception to the above requirements include The lone sole exception to the above requirement is at an industrial/office building or office buildingcomplex where there are multiple shift changes over during the course of a 24-hour day.

For those occurrences, a mobile vendor can return to the same location a maximum of two times during a calendar day.

An additional exception shall include school zones, as allowed by the school district in writing, where mobile vendors do not interfere with school functions and may operate in designated drop-off and pick-up zones for up to 2.5 hours daily to provide food service on the sidewalk side of the vehicle only.

For those occurrences, a mobile vendor can return to the same location a maximum of two times during a calendar day.
(b) A mobile vendor operating lawfully on private property (e.g., not in the public right of way or on a street) shall move not less than 600 feet at least every 2 hours and may not return to a previous location or within 600 feet of a previous location on the same calendar day.
(1) An exception to the above requirements are those uses that are specifically authorized for the private property with an approved use permit, temporary use permit, or other permit or approval issued by the City.
(c) Notwithstanding the foregoing subsections, a mobile food vendor hired by a homeowner or lawful resident to exclusively serve at the private residence for a party or similar event may operate and park under the following conditions:
(1) Service is limited to only the residential property. (2) Only a single mobile vendor may be present at any one time.

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(3) A mobile food vendor may park either in the driveway or along the street in front of the residence for the duration of the event. No parking is authorized overnight. If the residence is located within 100 of a local (residential) intersection, then any mobile vending parking on the roadway must be at least 25 feet from the intersection. If the residence is located within 100 feet of any other type of roadway (such as a collector or arterial) intersection, then the mobile vending parking must be located at least 50 feet from the intersection if it is not reasonably feasible to park at least 100 feet away or to use the driveway.
(4) No use permit, temporary use permit, or other permit is required for use of the residential property in such a manner. However, the mobile food vendor is still required to comply with section 8-5.5335, including a permit to operate. (5) This exception shall not be used more than six times in a rolling twelve- month period.
(6) This exception does not apply to apartment complexes.

Sec. 8-5.5335. Condition/appearance of site and motorized food wagon and conveyance— Mobile vendors.
(a) Any permitted mobile vendor who stops at a site shall maintain the property as follows:
(1) The site shall be maintained in a safe and clean manner at all times. (2) No tables, chairs, fences, shade structures, or other site furniture, (permanent or otherwise), or any freestanding signs shall be permitted for the customers of the business.
(i) An exception to this requirement is a mobile food vendor legally operating at an approved event allowing said uses or site furniture or signs consistent with an approved use permit, temporary use permit, or other permit or approval issued by the City that specifically allows for the use.
(i) An exception to this requirement is for a mobile food vendor hired by a homeowner or lawful resident to exclusively serve at the residence for a period not to exceed one day during normal operation hours, for a total period not to exceed six times in a rolling twelve-month period. For such authorized uses, site furniture may be used on the residential property itself, but not in the street. (3) Exterior storage or display of surplus refuse, equipment, materials, goods, wares, or merchandise associated with the vendor is prohibited.
(b) Any permitted mobile vendor shall comply with the following standards for the condition/appearance of their motorized food wagon and conveyance:
(1) The vendor shall display, in plain view and at all times, current permits and licenses in or on their vehicle.

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(2) Any motorized food wagon or conveyance used in the course of vending shall be entirely self-sufficient in regards to gas, water, and telecommunications. (3) Should any utility hook-ups or connections to on-site utilities be required, the vendor shall be required to apply for appropriate permits to ensure building and public safety and consistency with applicable building and zoning regulations. (4) The vendor shall not discharge items from any motorized food wagon or conveyance vehicle onto the sidewalk, gutter, storm inlets, or streets. (c) Any permitted mobile vendor shall comply with the following sanitation standards. (1) All motorized food wagons or conveyances shall operate out of a commissary pursuant to the requirements of the California Health and Safety Code. (2) All motorized food wagons or conveyances shall be equipped with refuse containers large enough to contain all refuse generated by the operation of such a vehicle, and the vendor of the motorized food wagon or conveyance shall pick up all refuse generated by such operation within a 25 footft. radius of the vehicle before such vehicle is moved. No vendor shall dispose of any trash or refuse in any such public or private trash receptacle other than a trash receptacle owned, operated, or otherwise provided by and under the control of such vendor.
(3) A motorized food wagon or conveyance shall comply with California Health and Safety Code regarding the availability of adequate toilet facilities for use by food service personnel.

Sec. 8-5.5340. Permit to operate—Open air vendors.

A person desiring to engage in an open air vendor operation, as defined by this article, shall submit a written application for a use permit with all supporting information required by the City of Yuba City. Such application shall be accompanied by a nonrefundable, nontransferable application fee in an amount as may be established by resolution of the City Council. Any such permit shall be required to be renewed annually and a separate nonrefundable, nontransferable application fee shall be paid annually for such renewal application. Vendors must have the permit in their possession when vending. There must be at least one vendor with a valid permit present whenever vending is taking place.
(a) As part of the permit to operate application, the vendor or business owner shall provide the same information as specified in Section 8-5.5320(a). In addition, the applicant must also provide the following:
(1) An affidavit in a form approved by the City from the property owner (if other than self) permitting the vendor to locate on the site;
(2) A site plan, drawn to scale and with dimensions, indicating the location of all existing buildings, structures, driveways, parking spaces, traffic controls, and improvements, and the location or areas where the proposed vending activity, structures, and improvements related to the vending activity will be located upon the site;

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(3) If the open air vendor is located within 400 feet. of a business selling similar goods and products, then the vendor shall obtain written approval from said business and submit such written approval as part of the application. (b) The open air vending application for a use permit shall be forwarded to the Planning Commission for review unless:
(1) The operator business owner or vendor fails to submit a complete application; (2) The business owner or vendor operator makes any omission, untrue statement or material misrepresentation in the application or provides fraudulent documentation with the application;
(3) The business owner or vendor operator has violated this article within the last 12 months;
(4) Any vehicle proposed to be operated lacks the required equipment, is improperly licensed or is unsafe;
(5) The business owner or vendoroperator has not otherwise complied with this article. (c) Any use permit request for an open air vending operation shall be processed in accordance with Section 8-5.7003.
(d) Notwithstanding subsections (b) and (c), and to the extent the proposed use is not otherwise subject to Section 8-5.5103, the Director of Development Services may instead issue a temporary use permit for a variety of short-term activities. (1) Temporary open-air vending. Short-term activities include the following types of temporary uses:
(i) Publicly owned property. Events that are to be conducted on publicly owned property for three or less consecutive days within a 90 day period and are sponsored by educational, fraternal, religious, or service organizations directly engaged in civic or charitable efforts, or to tax exempt organizations in compliance with 501(c) of the Federal Revenue and Taxation Code. (ii) Any other temporary use the Director of Development Services may determine is similar in nature. If the use does not qualify, then the open air vending application for a use permit shall be forwarded to the Planning Commission for review in accordance with Section 8-5.7003.
(2) Required findings. The Director may approve a temporary use permit application, with or without conditions, only if all of the following findings are made:
(i) The operation of the requested temporary use at the location proposed and within the time period specified would not jeopardize, endanger, or otherwise constitute a menace to the public convenience, health, safety, or general welfare; (ii) The proposed location is adequate in size and shape to accommodate the temporary use without material detriment to the use and enjoyment of other properties located adjacent to and in the vicinity of the parcel;

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(iii) The proposed parcel is adequately served by streets or highways having sufficient width and improvements to accommodate the kind and quantity of traffic that the temporary use would or could reasonably be expected to generate; and (iv) Adequate temporary parking to accommodate vehicular traffic to be generated by the use would be available either on site or at alternate locations acceptable to the Director.
(3) Appeals. Any applicant or person claiming to be directly and adversely affected by any action of the Director may file an appeal in accordance with Section 8-5.7104.

Sec. 8-5.5345. Conditions to operate an Oopen Aair Vvending Ooperation. (a) Open air vending operations are allowed under the following conditions or be subject to revocation of the permit as described in Section 8-5.5360.:
(1) Vendors may only locate on private property except as authorized by a temporary use permit issued under Section 8-5.5340. No open air vending operations shall be allowed on public property, including the public right-of-way, except as authorized by a temporary use permit, event permit, or similar permit issued by the City. (2) Open air vending operations are allowed in areas where there is a large unmet need for service to be offered by the open air vendor; in general, open air vending operations shall only be allowed in the following areas of the City:
(i) Industrial building/complex greater than 65,000 square feet. (ii) Office building/complex greater than 50,000 square feet. (iii) Retail building/complex greater than 100,000 square feet.

The Planning Commission may issue use permits for open air vending operations in areas of less square footage than shown above when the findings for issuance of a use permit, as provided in section 8-5.7003(d), and in particular, finding number (d)(5), can be made, based on information in the record. The obligation to present evidence of an unmet need in areas of less square footage than shown above is the responsibility of the applicant.
(3) Open air vending operations shall comply with the following development standards:
(i) An open air vendor shall be incidental to a primary use of the subject property on which it isit's located, with the primary use having a valid City business license certificateof Yuba City Business License.
(ii) An open air vendor shall not be permitted as an accessory use to a stand-alone parking lot.
(iii) If the open air vendor is located within 400 feet. of a business selling similar goods and products, then the vendor shall obtain written approval from said business before being issued permit to operate.
(iv) An open air vendor cannot utilize, or be located on, parking spaces required for the primary use at that property.
(v) An open air vendor cannot be located on a vacant, undeveloped parcel or lot.

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(vi) An open air vendor must be located on a paved concrete or asphalt parking surface.
(vii) An open air vendor cannot interfere with access, parking, aisles, circulation, driveways, or fire lanes and hydrants.
(viii) An open air vendor cannot interfere with pedestrian movement or create a pedestrian hazard.
(ix) An open air vendor shall not peddle any food unless the items have all State and fFederally required food labels and a Sutter County Environmental Health permit, to sell such items.
(x) An open air vendor engaged in the sale of tangible personal property that would normally be subject to sales tax if sold at retail shall maintain and have available for review, their California Seller's Permit issued by the California Department of Tax and Fee AdministrationState Franchise Tax Board.

Sec. 8-5.5350. Condition/appearance of site—Open air vendors. (a) Any permitted open air vendor who is located at an approved fixed location shall maintain the property as follows:
(1) The site shall be maintained in a safe and clean manner at all times. (2) No tables, chairs, fences, shade structures, or other site furniture, (permanent or otherwise), or any freestanding signs shall be permitted for the customers of the business.
(3) Exterior storage or display of surplus refuse, equipment, materials, goods, wares, or merchandise associated with the vendor is prohibited.
(b) Any permitted open air vendor shall comply with the following standards for the condition and /appearance of their motorized food wagon and conveyance. (1) The vendor shall display, in plain view and at all times, current permits and licenses in or on their vehicle.
(2) Any motorized food wagon or conveyance used in the course of vending shall be entirely self-sufficient in regards to gas, water, and telecommunications. (3) Should any utility hook-ups or connections to on-site utilities be required, the vendor shall be required to apply for appropriate permits to ensure building and public safety and consistency with applicable building and zoning regulations. (4) The vendor shall not discharge items from any motorized food wagon or conveyance vehicle onto the sidewalk, gutter, storm inlets, or streets.

Sec. 8-5.5353. Permit to operate - Sidewalk Vending.

A person desiring to engage in a sidewalk vendor operation, as defined by this article, shall submit a written application for a zoning clearance permit with all supporting information

01248.0005 2078819.9 16
required by the City. Such application shall be accompanied by a nonrefundable, nontransferable application fee in an amount as may be established by resolution of the Council. Any such zoning clearance permit shall be required to be renewed annually and a separate nonrefundable, nontransferable application fee shall be paid annually for such renewal application.
(a) As part of the permit to operate application, the vendor or business owner shall provide the following to the City:
(1) Identification in the form of a California driver’s license or identification number, an individual taxpayer identification number, or a municipal identification number in lieu of a social security number if the City otherwise requires a social security number for the issuance of a permit or business license.
(2) A copy of the vendor or business owner's current business license certificate and applicable Board of Equalization Seller's Permit.
(3) Any additional licenses from other state or local agencies to the extent required by law, such as a Sutter County Environmental Health permit for the sales of food. (4) Any other information to ensure compliance with other generally applicable laws. (5) Information on operations, including, but not limited to, any of the following:
(i) The name and current mailing address of the sidewalk vendor. (ii) A description of the merchandise offered for sale or exchange. (iii) A certification by the vendor that to their knowledge and belief, the information contained on the application is true.
(iv) The California seller’s permit number (California Department of Tax and Fee Administration sales tax number) of the sidewalk vendor. (v) If the sidewalk vendor is an agent of an individual, company, partnership, or corporation, the name and business address of the principal. (b) A permit to operate shall be granted unless:
(1) The vendor or business owner fails to submit a complete application; (2) The vendor or business owner makes any omission, untrue statement or material misrepresentation in the application or provides fraudulent documentation with the application;
(3) The vendor or business owner has violated this article within the last 12 months; or (4) The vendor or business owner has not otherwise complied with this article.

Sec. 8-5.5344. Conditions to operate – Sidewalk Vendors.

A person conducting a sidewalk vending operation shall comply with all of the required conditions below or be subject to revocation of the permit as described in Section 8-5.5360. (a) No sidewalk vendor shall operate without first obtaining and maintaining a valid City business license certificate and a sidewalk vendor’s permit. (b) Each sidewalk vendor shall display the required sidewalk vendor’s permit in a conspicuous location on the sidewalk vendor’s person or stand at all times while the sidewalk vendor is operating.

01248.0005 2078819.9 17
(c) Operating Restrictions. It shall be unlawful and a violation of this chapter for any sidewalk vendor to:
(1) Operate outside the hours authorized in the required sidewalk vendor’s permit, which hours shall not exceed 8:00 a.m. to 9:00 p.m.;
(2) Operate as a stationary sidewalk vendor at any time in any residential zone; (3) Leave unattended any stand at any time while operating, or store, park or leave unattended any stand at any time outside of operating hours on any public sidewalk, pedestrian walkway, or other public place;
(4) Sell food without first obtaining and thereafter maintaining the required permit issued by the Sutter County Environmental Health permit or any other permit or license required pursuant to Part 7 (commencing with Section 113700) of Division 104 of the Health and Safety Code;
(5) Sell food for immediate consumption unless there is a litter receptacle available for patrons’ use;
(6) Leave any location without first disposing of all trash or refuse generated by operating in such location;
(7) Allow any items used in connection with the operation to be placed or stored anywhere other than in, on, or under the stand, or on the person of the sidewalk vendor;
(8) Operate from a stand other than the stand authorized pursuant to the sidewalk vendor’s permit;
(9) Set up, maintain, or permit the use of any additional table, crate, carton, rack, or any other device to increase the selling or displaying capacity of a stand without having obtained express authorization to do so pursuant to the required sidewalk vendor’s permit;
(10) Solicit or conduct business with any person in a motorized vehicle; (11) Sell anything other than the specific food, beverages or merchandise authorized to be sold as part of the operation pursuant to the required sidewalk vendor’s permit; (12) Create any unnecessary noise in violation of this Code, including but not limited, except that such conduct, when engaged in by a sidewalk vendor while operating, shall be punishable only by the administrative fines established pursuant to this chapter;
(13) Operate within: (a) 50 feet of any fire hydrant; (b) 25 feet of any transit stop; (c) 25 feet of any building entrance; (d) 15 feet of the outer edge of any driveway or vehicular entrance to public or private property; (e) within 5 feet of any other sidewalk vendor on any public sidewalk, pedestrian path or walkway or other area intended for ingress or egress;

01248.0005 2078819.9 18
(14) Operate on any public sidewalk or pedestrian path or walkway in a manner that does not maintain 4 feet in width of clear space on the sidewalk, path or walkway, or which otherwise is not in compliance with the Americans with Disabilities Act of 1990;
(15) Operate on a public sidewalk, pedestrian path or walkway in, or within 1,000 feet of any entrance of, a place of public assemblage during or within two hours before or after any event held at the place of public assemblage with the capacity to host 500 or more persons. For purposes of this paragraph: (i) “event” excludes any private gathering that is open neither to the ticketed public nor to the public generally and that does not exceed 500 persons; and (ii) “entrance” means and includes any building entrance or exit and any entrance or exit to or from exterior premises, such as through outer fences or gates or into outer parking lots or driveways on the property or site of the place of public assemblage.
(16) Operate within 100 feet of any street intersection adjacent to a school site, or within 200 feet of another sidewalk vendor who has already stopped to conduct business at a school site, and shall move not less than 600 feet at least every two hours and may not return to a previous location or within 600 feet of a previous location on the same calendar day.
(17) Operate in any public street (i.e., in the street itself and not on the sidewalk), or on any median;
(18) Operate as a stationary sidewalk vendor in any park owned or operated by the City, where the City or other park operator has an agreement in place with a concessionaire that exclusively permits the sale of food or merchandise by the concessionaire, during the hours the concessionaire is open in the park;
(19) Operate as a stationary sidewalk vendor within any area of a City park that is within 50 feet of an abutting residential dwelling;
(20) Operate within a parking lot, except as expressly authorized pursuant to the required sidewalk vendor’s permit based on a finding that such operation will not obstruct vehicular ingress, egress, or parking, or adversely affect public health or safety; (21) Operate within 500 feet of a certified farmers’ market or a permitted swap meet during the operating hours of that certified farmers’ market or swap meet; (22) Operate within 500 feet of an area designated for a temporary use permit issued by the City during the duration of the permit; provided, that any notice, business interruption mitigation, or other rights provided to affected businesses or property owners under the temporary use permit are also provided to the sidewalk vendor, if such vendor is specifically permitted to operate in the area pursuant to a sidewalk vendor’s permit;
(23) Operate in any area or manner that would obstruct or interfere with disability access standards or accessibility to any facility or area that is provided pursuant to

01248.0005 2078819.9 19
requirements of or in compliance with the Americans with Disabilities Act of 1990; or
(24) Operate in violation of any applicable law or regulation.

Sec. 8-5.5355. Insurance requirements.

To obtain an operator's permit from the City, the operator must demonstrate that it maintains, at its sole expense, liability insurance as established by the Director of Development Services from time to time.meeting the following requirements:
(a) General liability coverage of $1,000,000 per occurrence for bodily injury personal injury and property damage.
(b) Separate commercial automobile liability insurance for each motor vehicle proposed to be operated within the City pursuant to the operators permit, with at least the following limits of liability: $1,000,000 per accident for bodily injury and property damage. (c) Evidence that the operator has procured workers compensation insurance covering all employees of the operator.
(d) Required insurance must be issued by companies admitted to do business in California, with a current A.M. Best rating of no less than A:VI. Exception may be made for the State Compensation Insurance Fund when not specifically rated. (e) Each insurance policy required by this Section 8-5.5355 shall provide a minimum scope of insurance at least as broad as:
(1) Insurance Services Office Commercial General Liability coverage (occurrence Form CG 00 01).
(2) Insurance Services Office Form Number CA 00 01 covering Automobile Liability, Code 1 (any auto).
(f) The general liability and automobile liability policies are to contain the following provisions:
(1) The City, its officers, agents, officials, employees and volunteers must be named as additional insureds under the policies. General liability coverage shall be provided in the form of an additional insured endorsement (CG 20 10 11 85 or equivalent) to the operator's insurance policy, or as a separate owner's policy.
(2) For any claims related to the operator's permit or vehicle, the operator's insurance coverage shall be primary insurance as respects the City, its officers, agents, officials, employees and volunteers.
(3) Each insurance policy required by this Section 8-5.5355 shall be endorsed to state that coverage shall not be canceled by either party, except after 30 days' prior written notice has been provided to the City.

01248.0005 2078819.9 20
(4) Any deductible or self-insured retentions must be declared to and approved by the City. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees, and volunteers, or the operator shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

Sec. 8-5.5360. Revocation of permits.

Any permit issued by the City under this article may be revoked by the issuing party City department or body for any of the following reasons, including but not limited to the following, and no new permit shall be issued after revocation for 12 months:
(a) The existence of any fact which, at the time of application, would have caused the City to deny the application, whether such fact existed at the time of the application or occurred thereafter;
(b) Any violation of laws relating to the requirements for operation of a mobile or open air vending operation;
(c) Failure to maintain insurance as required by this article; (d) Failure to maintain a mobile or open air vending operation in a safe and sanitary condition such that the vehicle could pass, at any time throughout the permit period, the inspection required for the issuance of a permit;
(e) Fraud, misrepresentation, or a false statement made in the course of applying for a permit or carrying on the business of a vendor;
(f) The conviction of any crime or misdemeanor involving moral turpitude; (g) Conducting the business in an unlawful manner or in such a manner as to constitute a breach of the peace, trespass, or to constitute a menace to the health, safety, or general welfare of the public; or
(h) Any violation of this article.

Sec. 8-5.5365. Appeal of revocation or denial.

An operator or applicant for an operator's permit shall be entitled to appeal the City's decision to revoke or deny a permit by filing a written notice of appeal with the City Clerk within ten days from the date the notice of revocation or denial is mailed. The appeal shall set forth the reasons why such action is not proper. Failure to set forth specific reasons why the action is improper or to timely file such appeal shall constitute a waiver of the right to appeal, and the proposed adverse action shall become final. The appeal shall be conducted pursuant to the provisions of Article 70 of the Zoning Code.

Sec. 8-5.5370. Exceptions.

The provisions of this article shall not apply to:

01248.0005 2078819.9 21
(a) Any person engaged in vending conducted in connection with the operations of a Statecertified open-air market or an authorized street fair or event under a special event permit, lease, real property license, agreement (including a concession, or a preexisting businesses identified by the Council in former Section 8-8.5375 that became effective June 17, 2010, for which a separate agreement with the City is required to be in effect with said preexisting business), or other entitlements or approvals issued by the City of Yuba City.
(b) Any person delivering any goods by vehicle where such goods have been ordered in advance for such delivery from any business located at a permanent location and which goods are being delivered from such location to the customer by vehicle, regardless of the point of sale.
(c) Persons invited to call upon private residences or businesses that operate from a fixed place of business located in or outside the City limits. (d) Persons selling or soliciting sales of daily or weekly newspaper as defined by the California Government Code.
(e) Persons soliciting or canvassing on behalf of or against any candidate for public office or any ballot initiative.
(f) Persons engaged in selling or soliciting sales as a fundraiser for a local school, civic or nonprofit corporation. For the purposes of this section, local shall mean within a sevenmile radius of the City limits. (g) Persons engaged in religious solicitation or other protected religious activities. (h) Young entrepreneurs. It is the Council’s policy to encourage youth entrepreneurship and community engagement by exempting minors under the age of 18 from this chapter when conducting limited, low-impact sales activities. Notwithstanding any other provision of this Code, this exemption is allows occasional vending for lemonade stands, baked goods, crafts, and similar small-scale activities as authorized by the Development Services Director or designee without the burden of full commercial permitting or regulatory requirements including a business license certificate. To qualify, sales must be located on a residential property owned or lawfully occupied by the youth entrepreneur, or on a commercial or similar property where the owner or authorized agent has granted permission for the activity. Sales may not include alcoholic beverages, obstruct public rights of way or sidewalks, or create traffic or safety hazards (such as having an open flame). Sales shall not exceed a cumulative total of 25 days within a rolling 12 month period. Temporary use of portable tables, chairs, shade structures, or other site furniture, and signs is permitted.

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Sec. 8-5.5375. Applicability of regulations to existing vending operations[Reserved].The provisions of this article shall be applicable to all persons and businesses described herein whether the herein described activities were established before or after the effective date of the ordinance enacting this article into law except for those three preexisting businesses identified by the City Council which shall be required to enter into a separate agreement with the City to allow for the continued operation of those businesses (which include: Fat Daddy's Hot Dogs; Fotine's Greek Café; and Rosie's Snobiz). Said agreement, among other things, shall specify that the operators of those three pre-existing, nonconforming businesses can continue to operate at their current locations, selling those items currently sold. The right to operate these businesses shall not be transferable and no expansion of the site or business shall be allowed. These businesses must obtain the insurance required by this article, comply with all applicable Sutter County Health Department regulations and possess a valid City of Yuba City Business License at all times of operation.

Sec. 8-5.5380. Penalties.

Any person violating any provisions or failing to comply with any of the mandatory requirements of this article is subject to the following penalties:
(a) Violations are subject to enforcement by any means authorized in this Code, including but not limited to the administrative enforcement provisions established in Section 1-

6.010 of the Municipal Code. Notwithstanding, said enforcement shall be limited for sidewalk vendors as follows:
(1) A violation of sidewalk vending requirements, other than failure to possess a valid sidewalk vending permit, is only punishable by the following:
(i) An administrative fine of one hundred dollars ($100.00) for a first violation. (ii) An administrative fine of two hundred dollars ($200.00) for a second violation within one year of the first violation.
(iii) An administrative fine of five hundred dollars ($500.00) for each additional violation within one year of the first violation.
(iv) Rescission/revocation of a sidewalk vending permit for the term of that permit upon the fourth violation or subsequent violations.
(2) Vending without a sidewalk vending permit issued by the City is only punishable by the following:
(i) An administrative fine of two hundred fifty dollars ($250.00) for a first violation. (ii) An administrative fine of five hundred dollars ($500.00) for a second violation within one year of the first violation.
(iii) An administrative fine of one thousand dollars ($1,000.00) for each additional violation within one year of the first violation.

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(iv) Upon proof of a valid sidewalk vending permit issued by the City, any administrative fines imposed under this subsection for vending without possessing a copy of the permit shall be reduced to the administrative fines set forth in subsection (a)(1).
(3) All fines imposed pursuant as to sidewalk vendors shall be subject to an ability-to-pay determination as described in California Government Code Section 51039(f).

Concurrently with issuing a citation for such fines to a person, the City shall provide the person with notice of the right to request an ability-to-pay determination and shall make available instructions or other materials for requesting an ability-to-pay determination.
(b) Revocation of permit to operate/conditional permit to operate as defined herein in Section 8-5.5360.
(c) Impoundment.
(1) Any City enforcement officers, including any peace officer or Code enforcement officer, is authorized to impound equipment, carts, food, goods, or merchandise of any mobile vendor or open air vendor whose operations constitute an immediate threat, hazard, or danger to persons or property. For food vendors, failure to have a Sutter County Environmental Health permit, or to comply with food safety requirements established by the same, is presumptive evidence of an immediate threat, hazard, or danger to persons. Written notice of the seizure and removal of personal property shall be provided to the person believed to be the owner or otherwise lawfully entitled to possession of the property. (2) The City shall store impounded vending equipment, carts, goods, or merchandise for a minimum of thirty (30) days. If the property is not claimed within that time period, the property will be considered legally abandoned and the City may dispose of the property.
(3) The City may immediately dispose of impounded materials that are perishable or cannot be safely stored.
(4) Any costs incurred in the salvage, disposal, or storage of impounded property may be assessed against any responsible person.
(5) Any owner of impounded vending equipment, carts, food, goods, or merchandise may appeal the impoundment in writing, along with the payment of any appeal fee as set by City resolution, per Section 4-8.601, except that the City Manager may instead choose to designate the City’s Director of Development Services as a hearing officer.

The appeal shall be filed with the city clerk within fifteen days following the date of the impoundment.
(6) Prior to the expiration of the thirty (30) day holding period or before any appeal related to impoundment becomes final, any person claiming ownership of vending equipment, carts, goods, or merchandise that has been impounded may reclaim such materials upon payment in full of all applicable impound fees incurred and proper

01248.0005 2078819.9 24
proof of ownership. Any unclaimed items will be considered abandoned and forfeited to the City after thirty (30) days following impoundment, and may, in the City’s Director of Development Services’ discretion, be disposed of as appropriate under applicable state law.
(d) Misdemeanor. Violation of the provisions of this article shall constitute a misdemeanor and not an infraction. Notwithstanding, this subsection shall not apply to sidewalk vendors.

Sec. 8-5.5385. Enforcement.

The provisions of this article may be enforced by any peace officer, Code enforcement officer, or the Director of Community Development Services or his/her designee.

SECTION 5. Severability. If any provision(s) of this Ordinance or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect any other provision or application, and to this end the provisions of this ordinance are declared to be severable. The City Council hereby declares that they would have adopted this ordinance and each section, subsection, sentence, clause, phrase, part or portion thereof, irrespective of the fact that any one or more sections, subsections, clauses, phrases, parts or portions thereof be declared invalid or unconstitutional.

SECTION 6. Effective Date. This Ordinance shall be effective on the thirty-first day after its adoption.

This Ordinance was introduced on ____________, 2026, and duly adopted by the City Council of the City of Yuba City at its duly noticed regular meeting _________, 2026, by the following electronic vote:

AYES: Council Member(s):

NOES: Council Member(s):

ABSENT: Council Member(s):
______________________________
Mark Boomgaarden, Mayor
City of Yuba City
Attest:
___________________________
Ciara Wakefield, City Clerk
City of Yuba City

Agenda Item 12

CITY OF YUBA CITY

STAFF REPORT
Date: March 17, 2026
To: Honorable Mayor & Members of the City Council;
From: Utilities Department
Presentation By: Phil Marler, Utilities Director
Summary
Subject: Adoption of the Utilities Rate Studies and Initiation of Proposition 218 Process Recommendation: Adopt a Resolution:

A. Accepting the results of and adopting the 2026 Water and Wastewater Rate Studies
B. Initiating a Proposition 218 process and approving the form of the Notice for Proposition 218 Protest Hearing
C. Setting the Protest Hearing for May 19, 2026 at 6:00 pm at the Council Chambers
Fiscal Impact: If a Proposition 218 process is successful, the water and wastewater revenue changes proposed in the rate studies would adequately fund projected operations, maintenance, and capital improvement for the study period.

Purpose:

To adopt the results of the water and wastewater rate studies, which recommend changes to the utilities service rates and fees, and initiate the Proposition 218 process required for implementation.

Council’s Strategic Goals:

This item addresses Council’s strategic goals of Fiscal Responsibility and Infrastructure by providing the necessary cost recovery to support the services, operations, maintenance, labor, and capital improvement of the City’s water and wastewater systems.

Background:

The City’s utilities service rates and fees are intended to fully recuperate costs to deliver water and wastewater services and the operations and infrastructure of their associated systems via self-funded enterprise funds. In order to develop and propose rate maximums for a five-year projection, local agencies are required to provide a documentary record as evidence of the fiscal requirements per California statute. A rate study which evaluates the operational and infrastructural needs of water and wastewater systems and the share of rates and fees by customer classes fulfills this need for the Proposition 218 rate approval process.

The City Council awarded a contract for both water and wastewater rate studies to Black & Veatch Management Company, LLC of Los Angeles, CA (Black & Veatch) on February 7, 2023. Black & Veatch has completed the rate studies, including a financial plan, which recommend rate adjustments for the five-year projected period to fund critical capital infrastructure improvements and operating costs. Staff presented City Council with the initial findings on March 3, 2026, following which Council directed staff to move forward with finalizing the rate studies and affirmed the need to subsequently initiate the Proposition 218 process.

Once adopted, the study will serve to set a maximum limit on the amount that can be charged; the City Council retains the authority to adopt reduced rates as appropriate to match actual costs and revenues received.

Analysis:

Utilities Rate Studies
Black & Veatch, in collaboration with key staff in the Utilities and Public Works Departments, has projected the operating, debt service, cash reserve, and capital improvement funding needs for the next five years and prepared recommended rate schedules to ensure the necessary revenue stream for each utility. The results of these rate models were then evaluated by both staff and a third-party consultant to confirm accuracy and feasibility. The water and wastewater rate studies are now ready for adoption and are included as Exhibit 1A and Exhibit 1B to the Resolution.

The recommended water service rates for the next five years for a typical single-family household are included below in Figure A. The full recommended rate schedule for all customer classes is included in the financial plan, which is calculated by the appropriate cost share for each customer class based on their meter size and impacts on the water system (Exhibit 1A).

Figure A
Current Rate Year 1
Nov. 1, 2026
Year 2
Nov. 1, 2027
Year 3
Nov. 1, 2028
Year 4
Nov. 1, 2029
Year 5
Nov. 1, 2030
Water
1" Meter $42.59 $50.67 $57.76 $60.65 $63.68 $65.59
Change $8.08 $7.09 $2.89 $3.03 $1.91
The recommended wastewater service rates for the next five years for a typical single-family household are included below in Figure B. The full recommended rate schedule for all customer classes is included in the financial plan, which is calculated by the appropriate cost share for each customer class based on their wastewater volume and strength contribution to the system (Exhibit 1B).

Figure B
Current Rate Year 1
Nov. 1, 2026
Year 2
Nov. 1, 2027
Year 3
Nov. 1, 2028
Year 4
Nov. 1, 2029
Year 5
Nov. 1, 2030
Wastewater
Single
Family
$65.23 $67.56 $78.03 $83.49 $89.34 $93.36
Change $2.33 $10.47 $5.46 $5.85 $4.02
Black & Veatch projected the revenue requirements and developed the proposed rate schedules to address the following factors:
• The City’s water and wastewater utilities are “enterprise fund” utilities. In California, enterprisefund utilities must be self-supporting. In other words, the cost of providing service must be funded by those receiving services (via rates) and costs cannot be shifted to other users who do not receive the services.
• The City’s current water and wastewater rate revenue does not cover the costs of operating and maintaining each utility. Underfunded maintenance and capital projects could lead to system failures, service disruptions, and large fines for violating state water quality, treatment, and disposal regulations.
• Water and wastewater utility rates were last projected via rate study and adjusted in 2016. Since that time:
o Inflation has increased approximately 45% (based upon changes in Western Region CPI).
o State and federal water quality regulations and permit requirements have become stricter and compliance more costly.
o Costs for equipment, treatment chemicals, and labor and construction (for critical projects) have all increased significantly.
o City water and wastewater infrastructure is aging, and in some cases failing, and must be repaired or replaced.
• Since customer costs for water and wastewater service do not cover the City’s cost of providing those services, the City has had to defer routine maintenance, required facility repairs, and necessary capital projects.
• If continued, underfunding of the utilities could lead to system failures, service disruptions, and large financial penalties from state regulators for violating water quality regulations and NPDES permit requirements.

Proposition 218 Process
California Proposition 218, adopted in 1996, requires the City to provide a 45-day period for affected utilities property owners to submit written protests in the event of proposed changes to the mandatory water and wastewater service charges and hold a public hearing. Guidelines for the Proposition 218 submission and tabulation of written protests have been prepared by the City Attorney’s office and are included as Exhibit 1C.

The Proposition 218 protest hearing is scheduled for May 19, 2026 at 6:00 pm in the Council Chambers. Staff and the City’s consultant have prepared a Notice of Proposition 218 Protest Hearing to inform utilities property owners and customers about the findings and recommendations of the rate studies and the written protest process, which will be mailed not less than 45 days prior to the hearing (Exhibit 1D).

Written protests may be mailed or delivered to the City Clerk or be submitted at the protest hearing. If more than 50% of the total affected property owners or customers protest in writing before the close of the public hearing for water and/or wastewater, the proposed rate changes for that utility will fail. If there is no majority protest, staff will make the appropriate changes to the water and/or wastewater ordinances for formal adoption by the Council.

Fiscal Impact:

The water and wastewater revenue changes proposed in the rate studies would adequately fund projected operations, maintenance, and capital improvement for the study period. A successful Proposition 218 process would provide Council with the ability to set appropriate rate schedules to secure the necessary cashflow recommended in the rate studies. If successful, Council would establish the rate schedules via Resolution, with implementation beginning November 1, 2026.

Alternatives:

1. Direct staff to modify one or both of the draft rate studies with different direction for rate changes and/or planned capital improvements prior to adoption.

2. Direct staff to delay adoption and the subsequent Proposition 218 process and keep water and wastewater service rates at the current levels.

Recommendation:

Adopt a Resolution:

A. Accepting the results of and adopting the 2026 Water and Wastewater Rate Studies.

B. Initiating a Proposition 218 process and approving the form of the Notice for Proposition 218 Protest Hearing.

C. Setting the Protest Hearing for May 19, 2026 at 6:00 pm at the Council Chambers.

Attachments:

1. Attachment 1 Resolution - Adoption of the Utilities Rate Studies and Initiation of Prop 218

2. Exhibit 1A - Water Rate Study 2026

3. Exhibit 1B - Wastewater Rate Study 2026

4. Exhibit 1C - Proposition 218 Guidelines

5. Exhibit 1D - Draft Prop 218 Notice
Prepared By: Submitted By:

Scarlett O. Harris
Utilities Administrative Manager
Robert Bendorf
City Manager

ATTACHMENT 1

RESOLUTION NO. _________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUBA CITY ACCEPTING THE FINDINGS OF THE 2026 UTILITIES RATE STUDIES, DIRECTING STAFF TO

MAIL OUT NOTICES OF THE PROPOSED WATER AND WASTEWATER RATE

INCREASES FOR A MAJORITY PROTEST PROCESS IN ACCORDANCE WITH PROPOSITION 218, SETTING A HEARING THEREFORE ON MAY 19, 2026, AND

ADOPTING THE GUIDELINES FOR THE SUBMISSION AND TABULATION OF

PROTESTS
WHEREAS, the City of Yuba City collects water and wastewater utilities fees by billing its customers, which fees pay for the cost of water and wastewater services, including water supply and treatment, water distribution, wastewater collection, wastewater treatment and disposal, environmental compliance, water quality laboratory testing, and administrative and fiscal management; and
WHEREAS, the utilities service fees were last projected and adjusted following water and wastewater rate studies and a successful Proposition 218 process in 2016. Since the 2016 studies, rising costs for critical energy, chemicals, and other materials for daily operation and the need to maintain and replace aging infrastructure have increased the cost of providing reliable water and wastewater services beyond the current water and wastewater revenues; and
WHEREAS, the Utilities Department worked with Black & Veatch Management Consulting, LLC of Los Angeles, CA to develop water and wastewater rate studies for 2026, which include financial plans, cost-of-service-analysis, and rate structure recommendations for both utilities systems in order to provide a minimum level of funding for projected expenditures for the next five (5) years and thus ensure safe and reliable operations while remaining affordable for the residents and businesses of Yuba City; and
WHEREAS, water and wastewater rates qualify as “property-related fees” and, therefore, water and wastewater rate adjustments such as those presented in the proposed rate structure, are subject to the substantive and procedural requirements of Proposition 218 (Cal. Const. Art. XIIID); and
WHEREAS, Section 6 of Article XIIID of the California Constitution sets forth notice, hearing, and protest requirements applicable to increases of water and wastewater rates; and
WHEREAS, the City desires to establish a uniform set of procedures applicable to the submission and tabulation of protests submitted against proposed water and wastewater rate increases.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Yuba City as follows:

Section 1. The foregoing recitals, and all information presented in the staff presentation, 2026 Water Rate Study (Exhibit 1A – including the five-year rate structure described therein), and 2026 Wastewater Rate Study (Exhibit 1B –

including the five-year rate structure described therein), are hereby found to be true and correct and incorporated herein by this reference.

Section 2. The City Council hereby finds that the proposed five-year rate structure meets the substantive requirements of Proposition 218 (Cal. Const. Art.

XIIID) as follows:
a. Fee for Service Provided Only: Revenues derived from the fee may not be used for any purpose other than that for which the fee was imposed.

Except for the reasonable and normal administrative costs, the fees collected for water service are used to provide water services to the City’s residential and commercial customers. Likewise, the fees collected for wastewater service are used to provide wastewater services to the City’s residential and commercial customers.
b. Fee not to Exceed Cost of Service: Revenues derived from the fee may not exceed the funds required to provide water and wastewater service.

The City’s water and wastewater cost-of-service rates analyses concluded that the proposed rates do not exceed the City’s cost of providing the respective water and wastewater services. c. Fee not to Exceed Proportional Cost: The amount of the fee may not exceed the proportional cost of the service attributable to the parcel. The City’s water and wastewater rates analyses concluded that the City’s proposed water and wastewater rates are reasonably proportional and cost-based and meet the general requirements of fairness and equity under Proposition 218.

Section 3. The City Council hereby finds that the proposed rate structure offers the best rate structure to allow the City to meet minimum operating requirements and provide a minimum level of funding for the projected expenditures over the next five years, while remaining affordable to the residents and businesses of Yuba City. Therefore, the City Council resolves:
a. To direct staff and City Counsel to prepare and mail public notices proposing implementation of the proposed water and wastewater rate structure (Exhibit 1D). Said notice shall be issued in compliance with Proposition 218 (Cal. Const. Art. XIIID) for the initiation of the 45-day public review period before a majority protest hearing. b. To set a majority protest hearing on the proposed water and wastewater rates, as noticed, for the date of May 19, 2026 at 6:00 pm at the Council Chambers.

Section 4. The City adopts the guidelines attached to this Resolution as Exhibit 1C, which are incorporated herein by reference to govern the acceptance and tabulation of protests against proposed water and wastewater rate increases. A copy or summary of such guidelines may be included in the notice described in Section 3.

Section 5. This Resolution shall be effective as of the date of its adoption.

The foregoing resolution was duly and regularly introduced, passed, and adopted by the City Council of the City of Yuba City at a regular meeting thereof held on the 17th day of March 2026.

AYES:

NOES:

ABSENT:

Marc Boomgaarden, Mayor
ATTEST:

Ciara Wakefield, City Clerk

APPROVED AS TO FORM
COUNCIL FOR YUBA CITY:

Shannon Chaffin, City Attorney
Aleshire & Wynder, LLP
Exhibits:

A. Water Rate Study 2026
B. Wastewater Rate Study 2026
C. Proposition 218 Guidelines for the Submission and Tabulations of Protests D. Notice of Proposition 218 Protest Hearing

EXHIBIT 1A

DRAFT FINAL

WATER RATE STUDY
BLACK & VEATCH PROJECT NO. 415056

PREPARED FOR

City of Yuba City, CA
11 MARCH 2026

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Table of Contents i
Table of Contents
Legal Notice............................................................................................................................................ 1

1.0 Executive Summary .................................................................................................................1-1

1.1 Financial Plan ........................................................................................................................1-1

1.2 Cost-of-Service Analysis .......................................................................................................1-2

1.3 Rate Design............................................................................................................................1-2

1.4 Proposed Water Rates ..........................................................................................................1-3

1.5 Customer Impact...................................................................................................................1-3

1.6 Summary................................................................................................................................1-4

2.0 Introduction.............................................................................................................................2-1

2.1 Purpose ..................................................................................................................................2-1

2.2 Water System.........................................................................................................................2-1

2.3 Methodology..........................................................................................................................2-1

2.3.1 Financial Plan ........................................................................................................2-1

2.3.2 Cost-of-Service Analysis.......................................................................................2-1

2.3.3 Rate Design ...........................................................................................................2-2

2.3.4 Rate Adoption........................................................................................................2-2

3.0 Revenue and Revenue Requirements.......................................................................................3-1

3.1 Customer Data.......................................................................................................................3-1

3.1.1 Number of Customers ..........................................................................................3-1

3.1.2 Billed Water Consumption....................................................................................3-1

3.2 Revenue under Existing Rates ..............................................................................................3-2

3.3 Other Revenue .......................................................................................................................3-3

3.4 Operating and Maintenance Expenses ................................................................................3-3

3.5 Capital Improvement Program .............................................................................................3-4

3.6 Transfers within the Fund .....................................................................................................3-4

3.7 Reserves.................................................................................................................................3-5

3.8 Projected Operating Results .................................................................................................3-5

4.0 Cost-of-Service Analysis .........................................................................................................4-1

4.1 Cost of Service.......................................................................................................................4-1

4.2 Functional Cost Components ...............................................................................................4-2

4.3 Allocation to Cost Components ...........................................................................................4-2

4.3.1 System Base, Max Day, and Max Hour Allocations ............................................4-2

4.3.2 Allocation of Operating and Maintenance Expenses..........................................4-3

4.3.3 Allocation of Capital Investments........................................................................4-4

4.4 Units of Service......................................................................................................................4-8

4.5 Cost-of-Service Allocations ..................................................................................................4-8

4.5.1 Units Costs of Service...........................................................................................4-8

4.5.2 Distribution of Costs of Service to Customer Types...........................................4-8

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Table of Contents ii

5.0 Rate Design .............................................................................................................................5-1

5.1 Existing Rates ........................................................................................................................5-1

5.2 Proposed Rates .....................................................................................................................5-1

5.2.1 Monthly Fixed Service Charge..............................................................................5-1

5.2.2 Consumption Charge ............................................................................................5-3

5.3 Typical Monthly Costs under Proposed Charges ................................................................5-3

5.4 Benchmarking........................................................................................................................5-4

5.5 Summary of Rate Study ........................................................................................................5-4

LIST OF TABLES
Table 1-1 Proposed Water Rate Schedule............................................................................................1-3 Table 1-2 Typical Residential Customer Monthly Bill Impacts............................................................1-3 Table 3-1 Number of Water Customers................................................................................................3-1 Table 3-2 Billed Water Consumption ....................................................................................................3-2 Table 3-3 Existing Water Rates .............................................................................................................3-2 Table 3-4 Projected Water Revenue under Existing Rates ..................................................................3-3 Table 3-5 O&M Escalation Factors........................................................................................................3-3 Table 3-6 O&M Expenses.......................................................................................................................3-4 Table 3-7 Capital Improvement Projects..............................................................................................3-4 Table 3-8 Financial Plan ........................................................................................................................3-7 Table 4-1 Cost of Service Revenue from Rates....................................................................................4-1 Table 4-2 Allocation Basis for O&M Expenditures ...............................................................................4-5 Table 4-3 Allocation of O&M Expenditures...........................................................................................4-6 Table 4-4 Allocation Basis for Capital Costs........................................................................................4-7 Table 4-5 Allocation of Capital Costs ...................................................................................................4-7 Table 4-6 Units of Service....................................................................................................................4-10 Table 4-7 Units Cost of Service...........................................................................................................4-10 Table 4-8 Distribution of Costs to Customer Types...........................................................................4-11 Table 5-1 Monthly Fixed Charge Cost Breakdown...............................................................................5-2 Table 5-2 Proposed Monthly Fixed Charge ..........................................................................................5-3 Table 5-3 Water Consumption Charge .................................................................................................5-3 Table 5-4 Proposed Consumption Charges .........................................................................................5-3 Table 5-5 Typical Monthly Bill ...............................................................................................................5-4

LIST OF FIGURES
Figure 1-1 Financial Plan ........................................................................................................................1-2 Figure 3-1 Status Quo Financial Plan.....................................................................................................3-5 Figure 3-2 Financial Plan ........................................................................................................................3-8 Figure 3-3 Fund Ending Balances...........................................................................................................3-8

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Table of Contents iii
Figure 5-1 Comparison of Neighboring Utilities ....................................................................................5-4

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Legal Notice LN-1
Legal Notice
Black & Veatch Corporation (Black & Veatch) has prepared this report for the City of Yuba City (City), and it is based on information not within the control of Black & Veatch. The City has not requested Black & Veatch to make an independent analysis, verify the information provided to us, or render an independent judgment of the validity of the information provided by others. Because of this, Black & Veatch cannot, and does not, guarantee the accuracy thereof to the extent that such information, data, or opinions were based on information provided by others.

In conducting these analyses and in forming an opinion of the projection of future financial operations summarized in this report, Black & Veatch made certain assumptions on the conditions, events, and circumstances that may occur in the future. The methodology utilized in performing the analyses follows generally accepted practices for such projections. Such assumptions and methodologies are reasonable and appropriate for the purpose for which they are used. While we believe the assumptions are reasonable and the projection methodology valid, actual results may differ materially from those projected, as influenced by the conditions, events, and circumstances that occur. Such factors may include the City’s ability to execute the capital improvement program as scheduled and within budget, regional climate and weather conditions affecting water demand, and adverse legislative, regulatory, or legal decisions (including environmental laws and regulations) affecting the City’s ability to manage the system and meet water quality requirements.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Executive Summary 1-1

1.0 Executive Summary
The City of Yuba City (City) commissioned Black & Veatch Corporation (Black & Veatch) to perform a Water Rate Study (Study) for its Water Utility. The Study included the development of a five-year financial plan, a cost-of-service analysis, and the design of rates. The specific objectives of the Study were to:
• Evaluate the adequacy of projected revenues under existing rates to meet projected revenue requirements.
• Develop a sound financial plan for the Water Utility covering five years for ongoing operations and planned capital improvements.
• Allocate the projected revenue requirements to the various customer classes in accordance with their respective service requirements.
• Develop a suitable rate schedule that produces revenues adequate to meet financial needs while recognizing customer costs of service and regulatory considerations such as Proposition 218 and other applicable judicial decisions.

1.1 Financial Plan
The City operates the Water Utility as a self-supporting enterprise. The Water Utility is a combination of funds. The funds include:
• Fund 507: Surface Water Operation
• Fund 509: Water Connection Fees
• Fund 517: Water Cash CIP
• Fund 533: Water Hillcrest Water System (HWS) Region 1 • Fund 534: Water Hillcrest Water System Region 2/3
As such, the Water Utility’s financial plan encompasses all the funds revenues, operation and maintenance (O&M) expenses, water supply costs, debt service requirements, capital improvement program (CIP), and other expenditures. The revenues incorporate projections of customer accounts and water consumption based on the City’s historical data and estimates of growth. In addition, the Water Utility’s forecast incorporates conservation goals established in the 2020 Urban Water Management Plan and Water Shortage Contingency Plan.

Black & Veatch worked with the City to develop a proposed financial plan over a five-year planning period beginning fiscal year (FY) July 1, 2026, and ending June 30, 2031 (study period), that will support the Water Utility’s ongoing operating and capital costs, while minimizing impacts on customers. The financial plan supports the following activities:
• Operation and Maintenance Expenses: The Water Utility anticipates O&M expenses to increase from $14.9M in FY 2027 to $17.0M in FY 2031. Water costs include water production, water treatment, and administration.
• Debt Service Payments: The Water Utility has existing debt service related to Series 2013 and 2017 Revenue Bonds plus debt service on several State Revolving Fund (SRF) loans. It is projected that the Water Utility will require two additional SRF loans. In FY 2028 for the

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Executive Summary 1-2
Rowe/Sam Brannan Tanks and in FY 2029 for the Water Treatment Basin Improvements. Total debt service payments increase from $3.5M in FY 2027 to $4.3M in FY 2031. • Capital Improvement Projects: The Water Utility plans to execute $45.2M in capital projects over the study period.
• Reserves: The Water Utility plans to continue funding the operating fund reserve, maintain an adequate balance in its Water Cash CIP fund, and maintain adequate debt service coverage.

1. The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.

2. The City targets to maintain enough funds to cover a portion of upcoming annual capital expenditures, smooth out the amount of capital infusion needed each year, and help mitigate unexpected capital costs. The scheduled target is 25% annual depreciation. The City should aim at increasing it to 100% annual depreciation.

The Water Utility is proposing revenue adjustments to allow the enterprise to meet operating and capital needs and reserve targets, as shown in Figure 1-1.

Figure 1-1 Financial Plan

1.2 Cost-of-Service Analysis
The water cost-of-service allocation methodology used in this Study uses the Base-Extra Capacity Method endorsed by the American Water Works Association (AWWA) Principles of Water Rates, Fees, and Charges, M1 manual. Under cost-of-service principles, costs are allocated to the different customer types in proportion to their water system use. As recommended by AWWA, Black & Veatch distributed functional costs to the base (average load conditions), extra capacity (peaking), and customer-related parameters. This allocation methodology produces unit costs for allocation to individual customer classes based on the projected customer service requirements.

1.3 Rate Design
The Right to Vote on Taxes Act, also known as Proposition 218, was passed by California voters in 1996 and added Article XIIIC and Article XIIID to the California Constitution. These articles and subsequent legal cases provide the regulatory framework that guides and informs the rate-setting process. The costPage 374 of 449 City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Executive Summary 1-3
of-service analyses provide the cost nexus for the proposed rate structures. The regulatory framework helps ensure cost recovery is proportionate to the cost of providing the service.1 To minimize impacts, retain simplicity, and ensure the reasonable stability of revenue, Black & Veatch recommends the following rate structure.
• Monthly Fixed Charge: The Water Utility should retain the monthly fixed charge based on meter sizes for all customer types. The monthly fixed charge will retain the consumption allowance by meter size.
• Consumption Charge: The Water Utility should retain the uniform consumption charge for all customer types.

1.4 Proposed Water Rates
Table 1-1 shows the Water Utility’s recommended five-year rate schedules for water services. Proposed rates are effective July 1st for all fiscal years over the study period. Any rates adopted for an effective date later July 1st will impact rates.

Table 1-1 Proposed Water Rate Schedule

1.5 Customer Impact
If approved, the water rate adjustments will affect a typical single-family residential customer with a 1” metered connection consuming less than 15 hundred cubic feet (HCF) per month as shown in Table 1-2.

Table 1-2 Typical Residential Customer Monthly Bill Impacts 1 Black & Veatch is not a legal firm and interpretations of the legal requirements under Proposition 218 should be reviewed by legal counsel.

Fiscal Year Ending June 30,
Description FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Current
Monthly Fixed Charge ($/Month)
1" & less 42.59 50.67 57.76 60.65 63.68 65.59
1-1/2" 85.18 93.56 106.65 111.99 117.59 121.11
2" 170.39 179.34 204.45 214.67 225.41 232.17
3" 681.53 694.06 791.23 830.79 872.33 898.50
4" 1,363.08 1,380.34 1,573.59 1,652.27 1,734.89 1,786.93 6" 2,555.74 2,581.34 2,942.72 3,089.86 3,244.35 3,341.68 8" 5,963.42 6,012.76 6,854.54 7,197.27 7,557.14 7,783.85 Commodity Charges ($/HCF)
All Customers 2.14 2.36 2.68 2.82 2.96 3.05
Fiscal Year Ending June 30,
Description FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Current
Monthly Charge ($/Month)
Water Bill 42.59 50.67 57.76 60.65 63.68 65.59
$ Increase 8.08 7.09 2.89 3.03 1.91

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Executive Summary 1-4

1.6 Summary
The financial plan described herein reflects a balanced approach by the City to operate the Water Utility in a sustainable manner, while providing high quality services and minimizing customer bill impacts. Black & Veatch used industry standard principles for equitable cost-of-service allocations to calculate the proposed rates. Detailed explanations for these calculations are provided in the remainder of this report.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Introduction 2-1

2.0 Introduction

2.1 Purpose
The purpose of this report is (1) to project the future revenues of the Water Utility under existing rates and charges, project operating expenses and capital financing revenue requirements, and to examine the adequacy of projected revenues to meet these revenue requirements through FY 2031; (2) to allocate these revenue requirements, or costs of service, for a representative test year to the various customer types in accordance with the respective service requirements that each class places on the systems; and (3) to develop a suitable schedule of water rates that will produce revenues adequate to meet the financial needs of the utility on the basis that recognizes customer costs of service and practical bill impact considerations.

2.2 Water System
The Water Utility provides water services to over 19,300 residential and non-residential customers. The City obtains surface water from the Feather River which is conveyed to the Yuba City Water Treatment Plant. The Plant has capacity for 36 million gallons per day. The water system infrastructure consists of 281 miles of transmission and distribution mains, two wells, six storage reservoirs with a capacity of 17 million gallons, three clear wells with a capacity of 8 million gallons and six pump stations. The City surface water sources include two appropriative water rights regulated by the State Water Resources Control Board and two surface water contracts.

2.3 Methodology
The rate-setting methodology employed by Black & Veatch is consistent with industry guidelines established by AWWA’s Principles of Water Rates, Fees, and Charges, M1 manual (M1 Manual). The manual is nationally recognized and provides recommendations and generally accepted practices in the water industry. The M1 Manual is used by rate practitioners as guidance on rate-making practices that can be used to address the unique circumstances of the communities served. An overview of the methodology is outlined below.

2.3.1 Financial Plan
Financial planning compares the
projected revenues of the utility under
existing conditions to its projected
operating expenses and capital
expenditure. This step tests the
adequacy of the current rates to recover
the utility's forecasted costs. If
shortfalls occur, revenue increases are
recommended until the utility is
financially stable.

2.3.2 Cost-of-Service Analysis
The cost-of-service analysis builds a link
between the utility's cost of service and
the proposed rates for each customer type. This process takes individual budget cost items and allocates them based on their function. Organizing the budget in terms of end function allows the creation of a nexus between the budget cost item and the rate.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Introduction 2-2

2.3.3 Rate Design
Rate design involves developing a rate
structure that equitably and
proportionately recovers costs from the
customers. The rate structure should
reflect a customer group's demand
profile and be resilient and flexible
enough to handle changing costs (i.e.,
operating and/or capital) and demand
scenarios (i.e., customers change their
demand on the system by contributing
less or more flow). Rate equity is
inherently built upon each customer's
relative use of the system. By designing
different rate components, the utility can balance affordability and equity.

2.3.4 Rate Adoption
In California, public utilities must meet procedural requirements for adopting new or increased rates for property-related fees under Proposition 218. Proposition 218 states that the utility must hold a public hearing to consider the proposed rates and provide written notice to all customers at least 45 days before the hearing. Any property owner or tenant directly liable to the public agency for payment of the propertyrelated fees may submit a written protest to the new or increased rates until the close of the public hearing. The City Council may not adopt the proposed new or increased rates if property owners or tenants directly liable for payment submit written protests on behalf of more than 50% of the properties upon which the proposed rates may be imposed.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-1

3.0 Revenue and Revenue Requirements
To meet the costs associated with providing water services to its customers, the Water Utility derives revenue from a variety of sources, including water user charges (rates), penalties, backflow prevention fees, main extension charges, connection fees, interest earned from the investment of available funds, and other miscellaneous revenues. The Water Utility is constantly looking for other sources of revenue, such as grants and loans, to fund infrastructure investments. Black & Veatch has projected the future revenue generated in the Study by analyzing historical and future system growth in terms of the number of accounts and billed water consumption. This section also projects the expenses, or revenue requirements, necessary to operate and maintain the system, invest in capital improvements, make debt service payments, and cover other water systems expenses.

3.1 Customer Data

3.1.1 Number of Customers
The City provides water services to over 19,300 residential and non-residential customers. All customers connected to the water system do so through metered connections. The City bills customers based on the size of the metered connection and their consumption. Since the City bills customers based on the metered connection, the analysis included a review of historical bills for customers and anticipated growth within the City. The analysis herein projects the total number of accounts to grow about 1.0% per year for the entire study period.

Table 3-1 shows the projected number of bills for the Water Utility.

Table 3-1 Number of Water Customers

3.1.2 Billed Water Consumption
Table 3-2 shows the projected billed water consumption for the study period. In determining the projected water consumption, Black & Veatch analyzed historical water consumption patterns in conjunction with the 2020 Urban Water Management Plan and the City’s Water Shortage Contingency Plan. In 2016, after years of drought conditions, the State of California mandated cutbacks to all water purveyors to reduce water usage by 25%. This action led to a significant decline in water consumption. In 2017, the State of California formally lifted the water restrictions as it declared the drought over. Yet the mandatory cutback had a lasting effect on water conservation habits, leading to a continued decrease in overall water consumption.

In 2020, California again entered a drought. In 2022, to conserve water, the State of California adopted emergency regulations to increase water conservation and required urban water suppliers to implement Level 2 of their Water Shortage Contingency Plans. In 2023, after record rainfall and snowpack levels, the State of California eased the drought restriction. In April 2023, the City reduced from Level 3 to Level 1, providing relief to the community while promoting the wise use of water. The levels in the Water Shortage Contingency Plan represent the shortage levels, water conservation targets, and response strategies and actions needed to achieve the conservation targets.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
(Bills) (Bills) (Bills) (Bills) (Bills) (Bills)
Number of Bills
1 All Customers 231,746 234,017 236,310 238,627 240,966 243,328 2 Total 231,746 234,017 236,310 238,627 240,966 243,328 3 Estimated Accounts 19,312 19,501 19,693 19,886 20,081 20,277 Line No. Description

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-2
Many factors contribute to the City’s annual consumption. The City’s primary goal is to provide its residents with safe and reliable drinking water, while encouraging water conservation. Overall, customers have done well to increase efficiency in the use of water resources.

Recognizing the various factors contributing to water demand patterns and understanding the state requirements, the billed water consumption is projected to grow at 0.8% per year during the study period.

The City currently bills water consumption in hundred cubic feet (HCF). One HCF represents about 748 gallons of water.

Table 3-2 Billed Water Consumption

3.2 Revenue under Existing Rates
Water user rates serve as the Water Utility's primary revenue source. Therefore, the level of future rate revenue is important in developing a long-range financial plan. Future water rate revenues are calculated using the system growth for the number of accounts and billed water consumption multiplied by the applicable existing rates.

Table 3-3 presents the rates in effect for FY 2026 (effective March 1, 2025), which were approved by City Council on June 21, 2016, as part of the City’s 2016 Rate Study. The rates are composed of monthly fixed and consumption charges. The monthly fixed service charge includes baseline consumption increasing by meter size. The consumption charge is applied to excess usage above the baseline on $/HCF basis.

Table 3-3 Existing Water Rates

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
(HCF) (HCF) (HCF) (HCF) (HCF) (HCF)
Billed Water Sold
1 All Customers 5,302,673 5,345,459 5,388,674 5,432,317 5,476,400 5,520,923 2 Total Usage (HCF) 5,302,673 5,345,459 5,388,674 5,432,317 5,476,400 5,520,923 3 Total Usage (Acre-Feet) 12,173 12,271 12,371 12,471 12,572 12,674 Line No. Description
Baseline Fiscal Year
Consumption 2026
(HCF)
Monthly Meter Charge ($/month)
1" & less 15 42.59
1-1/2" 30 85.18
2" 60 170.39
3" 240 681.53
4" 480 1,363.08
6" 900 2,555.74
8" 2,100 5,963.42
Commodity Charges ($/HCF)
Flow Rate per Excess HCF 2.14
Description

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-3
Table 3-4 shows projected water rate revenue under existing rates. The projected Water Utility revenues under existing rates increase from $17.5M in FY 2027 to $18.1M in FY 2031.

Table 3-4 Projected Water Revenue under Existing Rates

3.3 Other Revenue
Other sources of operating revenue include service charges, surcharges, connection charges, interest earned from the investment of available funds, and other miscellaneous revenues. Other operating revenues represent on average 7.3% of the Water Utility’s total revenue excluding debt financing. The City anticipates these revenues will remain relatively constant for the study period.

3.4 Operating and Maintenance Expenses
Table 3-6 shows the Water Utility’s projected O&M expense for the study period. These expenses include salaries and benefits, maintenance and operations, internal service charges, and capital expenditures.

The City anticipates that all O&M expenditure will escalate based on the factors identified in Table 3-5.

Table 3-5 O&M Escalation Factors

The following are O&M categories in Table 3-6.:
• Salaries and Benefits: These costs represent salaries and benefits for water staff assigned to operating and maintaining the water infrastructure system. • Materials, Supplies & Services: These costs represent contract services, water supply, supplies and materials, maintenance and repairs, travel & training, and general expenses. • Power and Utilities: These costs represent heat, power, and telephone. • Contribution to Other Funds: These costs represent internal costs to the Water Utility from other City departments for indirect costs such as customer service and billing, capital project engineering and administration, vehicle replacement, IT charges, and insurance. • Acquisitions: These costs represent small capital expenditure on physical movable equipment such as tools, equipment, generators, and computers.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
($) ($) ($) ($) ($) ($)
Revenue
1 Fixed Service Charges 12,058,000 12,169,500 12,282,100 12,395,700 12,510,600 12,626,300 2 Commodity Charges 5,296,000 5,330,300 5,364,800 5,399,700 5,435,000 5,470,400 3 Total $ 17,354,000 $ 17,499,800 $ 17,646,900 $ 17,795,400 $ 17,945,600 $ 18,096,700 Line No. Description
Fiscal Year Ending June 30,
FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
1 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% City Negotiation 2 Fringe Benefits 3.00% 3.00% 3.00% 3.00% 3.00% City Negotiation 3 Materials & Supplies 3.20% 3.20% 3.20% 3.20% 3.20% All items CPI 4 Contractual Services 3.10% 3.10% 3.10% 3.10% 3.10% Services CPI 5 Utilities 5.00% 5.00% 5.00% 5.00% 5.00% Electricity CPI 6 Equipment & Structures 3.90% 3.90% 3.90% 3.90% 3.90% ENR CCI 7 Chemicals 4.20% 4.20% 4.20% 4.20% 4.20% Chemicals PPI 8 Water Purchases 3.00% 3.00% 3.00% 3.00% 3.00% Estimated 9 General Admin 3.20% 3.20% 3.20% 3.20% 3.20% All items CPI 10 Capital Expenditures 3.90% 3.90% 3.90% 3.90% 3.90% ENR CCI Line No. Description Sources

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-4
Table 3-6 O&M Expenses

As shown in Table 3-6, the Water Utility’s O&M expenses are projected to increase from $14.4M in FY 2026 to $17.0M in FY 2031.

3.5 Capital Improvement Program
The Water Utility annually develops its five-year Capital Improvement Plan to identify water system needs, including assessments, inspections, maintenance, and rehabilitation and replacement requirements. In 2019, the City completed its 20-year Water Master Plan, which identified $105.4M in capital projects to address existing system deficiencies and $369.3M for future growth. All costs were in 2017 dollars.

Understanding that capital expenditure is constrained by available funds, staff developed a feasible CIP for the study period.

Table 3-7 shows the CIP for the study period. The Water Utility is composed of many functions, of which treatment, transmission, and distribution pipelines are significant elements. Therefore, of the total $45.2M, treatment accounts for $14.6M and transmission and distribution accounts for $13.5M of the total projects. The City examines the water infrastructure system on an ongoing basis; therefore, CIP might change based on the current need.

Table 3-7 Capital Improvement Projects

3.6 Transfers within the Fund
Since the Water Utility is composed of multiple funds, there will be transfers of money between the Surface Water Operations (Fund 507), Water Connection Fees (Fund 509), Water Cash CIP (Fund 517), Water HWS Region 1 (Fund 533), and Water HWS Region 2/3 (Fund 534) over the study period.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
($) ($) ($) ($) ($) ($)
Operation & Maintenance
1 Salaries & Benefits 4,341,700 4,471,900 4,606,100 4,744,200 4,886,400 5,033,100 2 Materials, Supplies & Services 5,134,500 5,311,300 5,494,200 5,683,600 5,879,800 6,082,700 3 Power and Utilities 1,667,000 1,750,300 1,837,900 1,929,800 2,026,200 2,127,600 4 Contributions to Other Funds 3,198,800 3,301,200 3,406,900 3,516,000 3,628,600 3,744,800 5 Acquisitions 34,700 36,100 37,500 39,000 40,500 42,100 6 Total $ 14,376,700 $ 14,870,800 $ 15,382,600 $ 15,912,600 $ 16,461,500 $ 17,030,300 Line No. Description
Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
($) ($) ($) ($) ($) ($)
Capital Improvement Program
1 Water Supply 207,800 215,800 224,200 232,900 362,900 251,300 2 Pumping 0 0 0 0 0 0
3 Storage 1,350,500 809,400 6,165,700 0 0 0
4 Treatment 519,400 1,726,600 1,233,100 9,039,300 1,330,700 1,256,700 5 Transmission & Distribution 2,077,600 2,266,200 2,466,300 2,678,500 2,903,400 3,141,800 6 Meters & Services 519,400 539,600 560,500 582,300 604,900 628,400 7 Hydrants 0 0 0 0 0 0
8 Stormwater 26,000 27,000 28,000 29,100 30,200 31,400
9 General Plant 955,700 1,106,100 1,037,000 1,193,700 1,482,000 974,000 10 Total $ 5,656,400 $ 6,690,700 $ 11,714,800 $ 13,755,800 $ 6,714,100 $ 6,283,600 Line No. Description

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-5

3.7 Reserves
A utility typically establishes reserves for several reasons, such as covering shortfalls in operating revenues, maintaining strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated with large rate increases. The Water Utility will maintain two reserves:
• Operating Reserve represents working capital to cover day-to-day expenses and accounts receivables, periods of lower-than-expected water sales, or unforeseen cost increases such as in chemicals and power. The reserve will maintain a minimum balance of 90 days of operating expenses once fully funded.
• Capital Reserve represents funds maintained to cover a portion of upcoming annual capital expenditures, smooth out the amount of capital infusion needed each year, and help mitigate unexpected capital costs. This reserve will maintain a minimum balance of 25% annual depreciation. It is recommended that the City increases the minimum balance to 100% annual depreciation in the future.

Appropriate reserve levels help the Water Utility with liquidity, provide operational flexibility, and demonstrate fiscal responsibility to the rating agencies, which allows the City to access lower-cost funds.

3.8 Projected Operating Results
The revenue requirements of the Water Utility consist of O&M expenses, debt payments, capital expenditure, and reserve requirements. To fully understand the current condition of the Water Utility, it is important to examine the cash flow projections under the status quo scenario. As shown in Figure 3-1, the status quo conditions would project that the Water Utility would operate from an annual deficit position, thus requiring the use of reserves to keep operating. In this scenario, the Water Utility would not impose any revenue increases over the study period and continue to incur O&M expenses, make debt service payments, pay for the execution of the planned CIP, and transfer to reserves. It is important to note that without revenue adjustments, the City will not have the capacity to issue new debt.

Figure 3-1 Status Quo Financial Plan
The analyses performed for the Study indicate that the City should implement the proposed revenue increases shown in Table 3-8 if it wishes for the user rates to cover expenses and to keep the Water Utility in a balanced financial condition. The revenue increases represent the total revenue adjustment needed

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-6
to meet revenue requirements. The revenue adjustment does not represent adjustments to the individual rates but reflects the overall level of revenue needed to meet the Water Utility’s obligations.

The suggested revenue increases help the Water Utility meet the following goals:
• Meet budgeted operating obligations in the five FYs.
• Meet planned capital investments in the five FYs.
• Maintain the reserve within their targets.
• Meet current and future debt service obligations.

Table 3-8 shows the proposed Water Utility for the study period. The financial plan consists of 1) Revenue and 2) Revenue Requirements.

Revenues
• Line 1 is the revenue under existing rates.
• Lines 2 through 6 are the additional revenues generated from the required annual increases. The additional revenue generated directly reflects the number of months the increase is effective for; therefore, the amount might be calculated at less than that stated amount. • Line 8 is the total revenue generated from user charges. • Lines 11 and 12 represent a surcharge applied to HWS Region 1 and 2/3 customers. The surcharge recoups the costs associated with upgrades to the system when it was acquired from Hillcrest Water Company.
• Line 14 represents other operating revenues.
• Line 17 represents proposed debt financing.
• Line 18 represents the total revenues for the Water Utility.

Revenue Requirements
• Line 21 represents O&M expenses. The O&M expenses include water supply costs. • Line 24 represents debt service requirements.
• Line 27 represents routine capital outlay and capital project expenditures. • Line 28 represents the total revenue requirements for the Water Utility.

Line 31 represents the net cumulative cash balance within the Water Utility. The net cumulative cash balance intends to match, to the extent possible, Line 32. The cash balance reserve is required to ensure the Water Utility can continue in the event of supplier interruption, market price fluctuations of critical equipment or supplies, or an abrupt drop in account receivables. The reserve target minimum is 90 days of O&M expenses.

Line 33 represents the debt service coverage. Currently, the debt service coverage requirement is 1.20x.

The debt service coverage requirement is set forth by financial institutions that lent the Water Utility money in the form of Revenue Bonds. Any proposed debt financing identified in the financial plan are SRF loans, which will not change the debt service coverage requirement.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-7
Table 3-8 Financial Plan
Figure 3-2 presents the proposed Water Utility Financial Plan.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Revenue
Operating Revenue
1 Revenue from Existing Rates 17,354,000 17,499,800 17,646,900 17,795,400 17,945,600 18,096,700 Year
Months
Effective Rate Adj
2 2027 12 14.00% 2,450,000 2,470,600 2,491,400 2,512,400 2,533,500 3 2028 12 14.00% 2,816,500 2,840,200 2,864,100 2,888,200 4 2029 12 5.00% 1,156,400 1,166,100 1,175,900
5 2030 12 5.00% 1,224,400 1,234,700
6 2031 12 3.00% 777,900
7 Increased Revenue Due to Adj 2,450,000 5,287,100 6,488,000 7,767,000 8,610,200 8 Subtotal Rate Revenue $ 17,354,000 $ 19,949,800 $ 22,934,000 $ 24,283,400 $ 25,712,600 $ 26,706,900 Other Operating Revenue
9 Service Charges and Fees 337,500 337,500 337,500 337,500 337,500 337,500 10 Connection Fees 555,000 555,000 555,000 555,000 555,000 555,000 11 HWS Region 1 Surcharges 142,800 142,800 142,800 142,800 142,800 142,800 12 HWS Region 2/3 Surcharges 515,200 515,200 515,200 515,200 515,200 515,200 13 Interest Income 447,100 297,500 152,300 181,800 250,800 272,200 14 Subtotal Operating Revenue $ 1,997,600 $ 1,848,000 $ 1,702,800 $ 1,732,300 $ 1,801,300 $ 1,822,700 Debt Financing
15 Revenue Bonds 0 0 0 0 0 0
16 SRF Loans 0 0 6,165,700 7,758,300 0 0
17 Subtotal Other Operating Revenue $ 0 $ 0 $ 6,165,700 $ 7,758,300 $ 0 $ 0 18 Total Revenue $ 19,351,600 $ 21,797,800 $ 30,802,500 $ 33,774,000 $ 27,513,900 $ 28,529,600 Revenue Requirements
Operating & Maintenance
19 O&M Expenses 14,342,000 14,834,700 15,345,100 15,873,600 16,421,000 16,988,200 20 O&M Expenses - HWS Region 1,2/3 0 0 0 0 0 0
21 Subtotal O&M $ 14,342,000 $ 14,834,700 $ 15,345,100 $ 15,873,600 $ 16,421,000 $ 16,988,200 Debt Service
22 Existing Rev Bonds/SRF Loans/Other 3,512,600 3,523,700 3,539,000 3,552,300 3,569,000 3,584,400 23 Proposed Rev Bonds/SRF Loans/Other 0 0 0 294,600 665,300 665,300 24 Total Debt Service $ 3,512,600 $ 3,523,700 $ 3,539,000 $ 3,846,900 $ 4,234,300 $ 4,249,700 Capital
25 Capital Acquisitions 34,700 36,100 37,500 39,000 40,500 42,100 26 Capital Improvements Projects 5,656,400 6,690,700 11,714,900 13,755,800 6,714,200 6,283,600 27 Total Capital $ 5,691,100 $ 6,726,800 $ 11,752,400 $ 13,794,800 $ 6,754,700 $ 6,325,700 28 Total Revenue Requirements $ 23,545,700 $ 25,085,200 $ 30,636,500 $ 33,515,300 $ 27,410,000 $ 27,563,600 29 Net Annual Cash Balance (4,194,100) (3,287,400) 166,000 258,700 103,900 966,000 30 Beginning Fund Balance 11,211,600 7,017,500 3,730,100 3,896,100 4,154,800 4,258,700 31 Net Cumulative Fund Balance $ 7,017,500 $ 3,730,100 $ 3,896,100 $ 4,154,800 $ 4,258,700 $ 5,224,700 32 Minimum Operating Reserves (90 Days of O&M 3,536,400 3,657,900 3,783,700 3,914,000 4,049,000 4,188,900 33 Sr. Debt Service Coverage (Min 1.2x) 3.21 4.46 5.93 6.46 7.04 7.30 Line No. Description

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BLACK & VEATCH | Revenue and Revenue Requirements 3-8
Figure 3-2 Financial Plan
Figure 3-3 shows the fund balances for all accounts after the recommended rate increases.

Figure 3-3 Fund Ending Balances

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-1

4.0 Cost-of-Service Analysis

4.1 Cost of Service
The cost-of-service analysis requires recovery of the City’s needed revenues from water service rates, allocated to customer types according to the service rendered. An equitable rate structure allocates the capture of revenue requirements to customer types based on the quantity of water consumed, peak flows, the number of customer connections, and other relevant factors.

In analyzing the Water Utility’s cost of service for allocation to its customer classes, Black & Veatch selected the annual revenue requirements for FY 2027 as the test year requirements to demonstrate the development of cost-of-service water rates. Table 4-1 shows the total costs of service that need to be recovered from water user rates for FY 2027.

Table 4-1 Cost of Service Revenue from Rates

The total revenue requirement is shown in Line 6 matches Table 3-8, Line 28. Line 12 represents revenues from other sources that will be deducted to derive the net revenue requirement recovered through rates.

Line 15 represents the net annual cash balance during the FY. This number is positive if the Water Utility is drawing down funds available on hand. The number will be negative if the Water Utility replaces funds.

In this case, the $3.3M figure indicates that the forecast is projecting a negative annual cash balance for the fiscal year. The City expects to implement the revenue adjustment starting at the beginning of the fiscal year, the final service recovery costs from rates does not require an adjustment as shown on Line

16. Line 18 is the costs to be recovered from rates.

Operating Capital Total
Expense Cost Cost
($) ($) ($)
Revenue Requirements
1 O&M Expenses 14,834,700 0 14,834,700
2 O&M Expenses - HWS Region 1,2/3 0 0 0
3 Debt Service 0 3,523,700 3,523,700
4 Capital Acquisitions 0 36,100 36,100
5 Capital Improvements Projects 0 6,690,700 6,690,700
6 Subtotal $ 14,834,700 $ 10,250,500 $ 25,085,200
Less Revenue Requirements Met from Other Sources
7 Service Charges and Fees 337,500 0 337,500
8 Connection Fees 0 555,000 555,000
9 HWS Region 1 Surcharges 0 142,800 142,800
10 HWS Region 2/3 Surcharges 0 515,200 515,200
11 Interest Income 297,500 0 297,500
12 Subtotal $ 635,000 $ 1,213,000 $ 1,848,000
Adjustments
15 Adj for Annual Cash Balance 2,008,900 1,278,500 3,287,400 16 Adj to Annualize Rate Increase 0 0 0
17 Subtotal $ 2,008,900 $ 1,278,500 $ 3,287,400
18 COS to be Recovered from Rates $ 12,190,800 $ 7,759,000 $ 19,949,800 Line No. Description

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-2

4.2 Functional Cost Components
The first step in conducting a cost-of-service analysis involves analyzing the cost of providing water service by system function to allocate the costs to the various customer types properly and, subsequently, design rates. As a basis for allocating costs of service among customer types, the study separates costs into the following five basic functional cost components: (1) Base, (2) Extra Capacity, (3) Customer, (4) Water Supply, and (5) Direct Assignment, described as follows:

1. Base costs represent operating and capital costs of the system associated with service to customers to the extent required under constant or average annual load conditions without the elements necessary to meet water consumption variations or peak demands.

2. Extra Capacity costs represent operating, and capital costs incurred to meet peaking demands.

Peaking demands represent water consumption more than the average rate of use.

3. Customer costs are those expenditures that tend to vary in proportion to the number of customers connected to the system. These include meter reading, billing, collecting, accounting, maintenance, and capital costs associated with meters and services.

4. Water Supply costs are associated with paying the North Yuba Water District (NYWD) and California Department of Resources (State Water Project) for surface water obtained from both agencies.

5. Directly assigned costs are specifically identified as those incurred to serve specific customers. These costs include fire protection.

4.3 Allocation to Cost Components
The next step of the cost-of-service process involves allocating each cost element to functional cost components based on the parameter or parameters having the most significant influence on the magnitude of that cost element. O&M expenses are allocated directly to appropriate cost components. A detailed allocation of related capital investment is used as a proxy for allocating capital and replacement costs. The separation of costs into functional components provides a means for distributing such costs to the various types of customers based on their respective responsibilities.

4.3.1 System Base, Max Day, and Max Hour Allocations
The water system consists of various facilities designed and operated to fulfill a given function. For the system to provide adequate service to its customers, it must be capable of meeting the annual volume requirements and the maximum demand rates placed on it. Because not all customers and types of customers exert maximum demand simultaneously, the capacities of the various facilities must meet the maximum coincidental demand of all customers. Each water service facility within the system has an underlying average demand exerted by the customers to whom the base cost component applies. For those facilities designed solely to meet average day demand, 100% of the costs go to the base cost component. Extra capacity requirements associated with coincidental demands more than average use consist of maximum daily and maximum hourly demand subcomponents.

The first step in determining the allocation percentages for volume-related cost allocations is to assign system peaking factors. The base element equals the average daily demand (ADD) and is assigned a value of 1.0. Based on the City’s 2019 Water Master Plan, the Water Utility’s maximum day (max day) demand is 1.60 times the ADD. The maximum hourly (max hour) demand is 2.31 times the ADD.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-3

4.3.1.1 Max Day Allocations
The costs associated with facilities required to meet maximum day demand are allocable to base and maximum day extra capacity, as shown below.
• Base = (1.0/1.6) x 100 = 62.4%
• Max Day = (1.6 – 1.0)/1.6 x 100 = 37.6%
These calculations indicate that the average or base use requires 62.4% of the capacity of facilities designed and generated to meet max day demand, and the remaining 37.2% meets max day extra capacity requirements.

4.3.1.2 Max Hour Allocations
The costs associated with facilities required to meet max hour demand are allocable to base, max day extra capacity, and max hour extra capacity as follows:
• Base = (1.0/2.31) x 100 = 43.3%
• Max Day = (1.6 – 1.0)/2.31 x 100 = 26.1%
• Max Hour = (2.31 – 1.6)/2.31 x 100 = 30.6%
The following is for illustration purposes only and it is to demonstrate peak flows in relation to average day flow.

4.3.2 Allocation of Operating and Maintenance Expenses
When allocating O&M expenses, the M1 Manual refers to functional cost components. Simply put, these costs correspond to the activities that the Water Utility undertakes to provide its customers with water:
identify the water supply source, pump it, treat it, distribute it to customers, bill for services, and collect revenues. Where possible, the O&M expenses for FY 2027 are directly allocated to the cost components to the extent possible. For those costs that are not directly allocated to one cost center, Black & Veatch

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BLACK & VEATCH | Cost-of-Service Analysis 4-4
identified cost elements specific to certain functions and assigned them based on the factors noted in Section 4.1 to allocate the operating expenses to the cost components. Consider, for example, a storage tank. Its purpose is to provide water during peak times. That is, when demand is greater than average, such as on a very hot summer day. The design of the storage tank is based on meeting maximum day needs. Therefore, the O&M costs for this tank are spread out between the base and max day elements.

The elements general to all operations were allocated based on the average of all other costs. The direct assignment represents water supply and fire protection.

Table 4-2 shows the allocation basis for operating costs, and Table 4-3 shows the total allocation of operating costs serving water customers.

4.3.3 Allocation of Capital Investments
In allocating capital investment for FY 2027, the proposed five-year CIP are allocated directly to cost components to the extent possible. The allocation of costs in this manner provides a basis for annual investment in water system facilities. Using the CIP, the capital costs can be allocated using the total net system investment distribution across the functional cost components.

Table 4-4 shows the allocation basis for capital expenditures, and Table 4-5 shows the allocation of existing system investment serving water customers. The total proposed system investment of $45.2M shown on Line 10 for the Water Utility represents the five-year proposed CIP. Line 11 represents the test year’s CIP costs and Line 14 represents the net capital investment for the test year once other revenue sources are deducted.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-5
Table 4-2 Allocation Basis for O&M Expenditures

Common to All Customers
Base Extra Capacity Customer Water Fire Allocation
Base Max. Day Max. Hour Meters Cust/Bill. Supply Protection Basis (%) (%) (%) (%) (%) (%) (%)
Water Operations
Water Distribution Operating Expenses
1 Salaries & Wages 42.6% 26.2% 30.2% 0.0% 0.0% 0.0% 1.0% Average O&M (T&D) 2 Fringe Benefits 42.6% 26.2% 30.2% 0.0% 0.0% 0.0% 1.0% Average O&M (T&D) 3 Materials & Supplies 42.3% 26.1% 30.6% 0.0% 0.0% 0.0% 1.0% Distribution 4 Contractual Services 42.3% 26.1% 30.6% 0.0% 0.0% 0.0% 1.0% Distribution 5 Utilities 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Pumping 6 Equipment & Structures 42.3% 26.1% 30.6% 0.0% 0.0% 0.0% 1.0% Distribution 7 Chemicals 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 8 Water Purchases 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% Purchased Water 9 Debt Service 75.0% 0.0% 0.0% 25.0% 0.0% 0.0% 0.0% Debt Service 10 Interfund Service Payments 75.0% 0.0% 0.0% 25.0% 0.0% 0.0% 0.0% Debt Service 11 Interfund Transfers 40.0% 0.0% 0.0% 17.0% 43.0% 0.0% 0.0% Interfund Transfers 12 General Admin 48.6% 22.0% 9.7% 5.4% 13.6% 0.0% 0.6% Average O&M Water Treatment Operating Expenses
13 Salaries & Wages 51.5% 20.0% 0.0% 7.9% 20.1% 0.0% 0.4% Average O&M (Treatment) 14 Fringe Benefits 51.5% 20.0% 0.0% 7.9% 20.1% 0.0% 0.4% Average O&M (Treatment) 15 Materials & Supplies 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 16 Contractual Services 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 17 Utilities 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 18 Equipment & Structures 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 19 Chemicals 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 20 Water Purchases 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% Purchased Water 21 Debt Service 75.0% 0.0% 0.0% 25.0% 0.0% 0.0% 0.0% Debt Service 22 Interfund Service Payments 75.0% 0.0% 0.0% 25.0% 0.0% 0.0% 0.0% Debt Service 23 Interfund Transfers 40.0% 0.0% 0.0% 17.0% 43.0% 0.0% 0.0% Interfund Transfers 24 General Admin 48.6% 22.0% 9.7% 5.4% 13.6% 0.0% 0.6% Average O&M Line No. Description

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-6
Table 4-3 Allocation of O&M Expenditures
Common to All Customers
Base Extra Capacity Customer Water Fire
Base Max. Day Max. Hour Meters Cust/Bill. Supply Protection ($) ($) ($) ($) ($) ($) ($) ($)
Water Operations
Water Distribution Operating Expenses
1 Salaries & Wages 971,600 413,700 254,800 293,300 0 0 0 9,800 2 Fringe Benefits 472,000 200,900 123,800 142,500 0 0 0 4,800 3 Materials & Supplies 27,100 11,400 7,100 8,300 0 0 0 300 4 Contractual Services 47,700 20,200 12,400 14,600 0 0 0 500 5 Utilities 7,800 4,800 2,900 0 0 0 0 100
6 Equipment & Structures 490,200 207,500 127,800 150,000 0 0 0 4,900 7 Chemicals 0 0 0 0 0 0 0 0
8 Water Purchases 2,000 0 0 0 0 0 2,000 0
9 Debt Service 0 0 0 0 0 0 0 0
10 Interfund Service Payments 0 0 0 0 0 0 0 0
11 Interfund Transfers 0 0 0 0 0 0 0 0
12 General Admin 288,700 140,500 63,600 28,100 15,500 39,200 0 1,800 13 Subtotal $ 2,307,100 $ 999,000 $ 592,400 $ 636,800 $ 15,500 $ 39,200 $ 2,000 $ 22,200 Water Treatment Operating Expenses
14 Salaries & Wages 2,065,700 1,064,700 413,900 0 163,800 414,300 0 9,000 15 Fringe Benefits 962,600 496,100 192,900 0 76,300 193,100 0 4,200 16 Materials & Supplies 43,600 26,800 16,400 0 0 0 0 400 17 Contractual Services 445,700 273,800 167,400 0 0 0 0 4,500 18 Utilities 1,742,500 1,070,800 654,300 0 0 0 0 17,400 19 Equipment & Structures 699,900 430,100 262,800 0 0 0 0 7,000 20 Chemicals 844,700 519,100 317,200 0 0 0 0 8,400
21 Water Purchases 1,592,300 0 0 0 0 0 1,592,300 0
22 Debt Service 0 0 0 0 0 0 0 0
23 Interfund Service Payments 0 0 0 0 0 0 0 0
24 Interfund Transfers 3,301,200 1,320,500 0 0 561,200 1,419,500 0 0 25 General Admin 829,400 403,400 182,800 80,800 44,500 112,700 0 5,200 26 Subtotal $ 12,527,600 $ 5,605,300 $ 2,207,700 $ 80,800 $ 845,800 $ 2,139,600 $ 1,592,300 $ 56,100 27 Total O&M Expenses $ 14,834,700 $ 6,604,300 $ 2,800,100 $ 717,600 $ 861,300 $ 2,178,800 $ 1,594,300 $ 78,300 Less Other Revenue
28 Miscellaneous Revenues 635,000 309,000 139,900 61,900 34,100 86,200 0 3,900 29 Other Adjustments 2,008,900 977,100 442,700 195,800 107,900 272,900 0 12,500 30 Net Operating Expenses $ 12,190,800 $ 5,318,200 $ 2,217,500 $ 459,900 $ 719,300 $ 1,819,700 $ 1,594,300 $ 61,900 Line No. Description Total Costs

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-7
Table 4-4 Allocation Basis for Capital Costs

Table 4-5 Allocation of Capital Costs

Common to All Customers
Base Extra Capacity Customer Water Fire
Base Max. Day Max. Hour Meters Cust/Bill. Supply Protection (%) (%) (%) (%) (%) (%) (%)
Plant Assets
1 Land 49.0% 26.9% 15.8% 7.4% 0.0% 0.0% 0.9% Average Net Plant 2 Water Supply 62.2% 0.0% 0.0% 0.0% 0.0% 36.8% 1.0% Water Supply 3 Pumping 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Pumping
4 Storage 10.0% 0.0% 89.0% 0.0% 0.0% 0.0% 1.0% Storage
5 Treatment 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Treatment 6 Transmission 61.4% 37.6% 0.0% 0.0% 0.0% 0.0% 1.0% Transmission 7 Meters & Services 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% Meters & Services 8 Hydrants 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% Hydrants 9 General Plant 49.0% 26.9% 15.8% 7.4% 0.0% 0.0% 0.9% Average Net Plant Line No. Description Allocation Basis
Common to All Customers
Base Extra Capacity Customer Water Fire
Base Max. Day Max. Hour Meters Cust/Bill. Supply Protection ($) ($) ($) ($) ($) ($) ($) ($)
Plant Assets
1 Land 0 0 0 0 0 0 0 0
2 Water Supply 1,287,100 800,700 0 0 0 0 473,500 12,900 3 Pumping 0 0 0 0 0 0 0 0
4 Storage 6,975,100 697,500 0 6,207,800 0 0 0 69,800
5 Treatment 14,586,400 8,963,200 5,477,300 0 0 0 0 145,900 6 Transmission 13,601,900 8,358,200 5,107,700 0 0 0 0 136,000 7 Meters & Services 2,915,700 0 0 0 2,915,700 0 0 0
8 Hydrants 0 0 0 0 0 0 0 0
9 General Plant 5,792,800 2,839,000 1,557,600 913,500 429,000 0 0 53,700 10 Total Plant Assets $ 45,159,000 $ 21,658,600 $ 12,142,600 $ 7,121,300 $ 3,344,700 $ 0 $ 473,500 $ 418,300 11 Capital Expenses $ 10,250,500 $ 4,900,400 $ 2,756,200 $ 1,616,400 $ 759,200 $ 0 $ 123,300 $ 94,900 Less Other Revenue
12 Miscellaneous Revenues 1,213,000 594,500 326,200 191,300 89,800 0 0 11,200 13 Other Adjustments 1,278,500 626,600 343,800 201,600 94,700 0 0 11,800 14 Net Capital Expenses $ 7,759,000 $ 3,679,300 $ 2,086,200 $ 1,223,500 $ 574,700 $ 0 $ 123,300 $ 71,900 Line No. Description Total Costs

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-8

4.4 Units of Service
To properly recognize the cost of service, each customer class receives its share of base, maximum day, peak hour, customer costs, water supply, and fire protection. Following the allocation of costs, the total cost responsibility for each customer class is developed using unit costs of service for each cost function and subsequently assigning those costs to the customer types based on the respective service requirements of each. The number of units of service required by each customer class provides a means for the proportionate distribution of costs previously allocated to respective cost categories. • Base costs vary with the volume of water consumed and distributed to the customers on that basis. • Extra Capacity costs are those associated with meeting peak demand rates of water use and distributed to the customers based on the respective class capacity requirements more than average rates of use. The analysis followed the capacity factor methodology outlined in Appendix A of the AWWA M1 Manual to derive peak consumption information from the monthly consumption records in the City’s billing system, which helps estimate the maximum day and peak hour ratios. • Customer costs are those associated with operating and maintaining the water meters and generating and distributing customer bills. Meter & service costs are distributed based on the estimated number of equivalent meters for each customer, which relies on the total number of meters serving respective types and the hydraulic capacity ratio of the meters to the 1” inch meter.

The equivalent meter ratios adopted in this analysis are consistent with City meter types and the AWWA M1 Manual. Customer bills are distributed on the number of bills for each customer. • Water Supply costs vary with the volume of water consumed and distributed to the customers on that basis.
• Fire Protection cost allocations use equivalent meters like meter & service costs.

Table 4-6 shows the estimated FY 2027 units of service for the various customers.

4.5 Cost-of-Service Allocations
The Study applies the unit costs of service to each customer class’s respective service requirements to determine the cost of service for each customer class. The total unit costs of service applied to the respective requirements for each customer class results in the total cost of service for each customer class.

4.5.1 Units Costs of Service
The FY 2027 unit cost of service for each functional cost component is simply the total cost divided by the applicable units of service, as shown in Table 4-7. On Line 3, the total costs represent the cost that rates need to recover, as demonstrated in Table 4-1, Line 18. The net O&M cost includes O&M (including water purchase), less revenue from other sources and adjustments. Line 5 represents the unit costs for the entire water system regardless of customer class. After that, the unit costs are used to allocate the costs to the specific customer classes.

4.5.2 Distribution of Costs of Service to Customer Types Applying the unit costs to the units for each customer class produces the customer class costs. This process is illustrated in Table 4-8, in which unit costs are applied to the customer class units of service for FY 2027. The costs attributable to each customer type reflect the functional cost components

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-9
described in Section 4.1. Each customer class places a burden on the system in different ways; thus, the allocation of the units is representative of this burden.

An example of the application of unit costs is shown below.

Base Component
Unit Cost (Table 4-7, Line 5) $ 1.33 per HCF
All Customer Consumption (Table 4-8, Line 1) 6,780,221 HCF Total Allocated Cost $ 8,997,600
Please note that the numbers within the tables are rounded, yet the calculations are done based on non-rounded values; therefore, results might vary.

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-10
Table 4-6 Units of Service
Table 4-7 Units Cost of Service
Consumption Maximum Day Maximum Day Fire
Annual Avg. Day Factor Total Extra Factor Total Extra Meters Cust/Bills Protection Column Reference (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Units of Measure (HCF) (HCF/day) (HCF/day) (HCF/day) (HCF/day) (HCF/day) (EMs) (bills) (EMs) 1 All Customers 6,780,221 18,576 252% 46,755 28,179 362% 67,336 20,581 23,890 234,017 2 Subtotal 6,780,221 18,576 46,755 28,179 67,336 20,581 23,890 234,017 3 Public Fire 2,005 2,005 9,626 7,620 0 0 2,767
4 Subtotal 0 0 2,005 2,005 9,626 7,620 0 0 2,767
5 Total Water System 6,780,221 18,576 48,760 30,185 76,961 28,201 23,890 234,017 2,767 Line No. Description
Common to All Customers
Base Extra Capacity Customer Fire
Base Max. Day Max. Hour Meters Cust/Bill. Water Supply Protection ($) ($) ($) ($) ($) ($) ($) ($)
Water Utility
1 Net Operating Expense 12,190,800 5,318,200 2,217,500 459,900 719,300 1,819,700 1,594,300 61,900 2 Net Capital Costs 7,759,000 3,679,400 2,086,200 1,223,500 574,700 0 123,300 71,900 3 Total Cost of Service $ 19,949,800 $ 8,997,600 $ 4,303,700 $ 1,683,400 $ 1,294,000 $ 1,819,700 $ 1,717,600 $ 133,800 4 Units of Service (Total) 6,780,221 30,185 28,201 23,890 234,017 6,780,221 2,767 HCF HCF/Day HCF/Day Eq. Meters Bills HCF Eq. Meters
5 Cost per Unit $ 1.33 $ 142.58 $ 59.69 $ 54.16 $ 7.78 $ 0.25 $ 48.36 per HCF per HCF/Day per HCF/Day per Eq. Meter per Bill per HCF per Eq. Meter Line No. Description Total Costs

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-11
Table 4-8 Distribution of Costs to Customer Types
Common to All Customers
Base Extra Capacity Customer Fire
Base Max. Day Max. Hour Meters Cust/Bill. Water Supply Protection ($) ($) ($) ($) ($) ($) ($) ($)
All Customers
1 Units 6,780,221 28,179 20,581 23,890 234,017 6,780,221 2 Allocation of costs of service 19,075,200 8,997,600 4,017,800 1,228,500 1,294,000 1,819,700 1,717,600 Public Fire
3 Units 2,005 7,620 2,767
4 Allocation of costs of service 874,600 285,900 454,900 133,800 5 Total Cost of Service $ 19,949,800 $ 8,997,600 $ 4,303,700 $ 1,683,400 $ 1,294,000 $ 1,819,700 $ 1,717,600 $ 133,800 Line No. Description Total Costs

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Rate Design 5-1

5.0 Rate Design
The initial consideration in the derivation of rate schedules for water service is to establish equitable charges for the customers commensurate with the cost of providing that service. While the cost-ofservice allocations to customer types should not be construed as literal or exact, they offer a guide to the necessity and extent of rate adjustments. Practical considerations sometimes modify rate adjustments by considering additional factors such as the extent of bill impacts, existing contracts, and historical local policies and practices.

5.1 Existing Rates
The existing rates of the Water Utility consist of a fixed component in the form of a monthly fixed service charge and a variable component in the form of a consumption charge. Table 3-3, presented earlier in this report, summarizes the existing water rates.

5.2 Proposed Rates
The cost-of-service analysis described in the preceding sections of this report provides a basis for the design of water rates.

5.2.1 Monthly Fixed Service Charge
The Water Utility provides water service to approximately 19,300 water service accounts. These customers have dedicated water line connections to the water systems. Therefore, water charges include water supply, public fire service costs, meter maintenance, and the cost of issuing bills. The following is a derivation of the different cost components that comprise the total charge.

5.2.1.1 Water Monthly Fixed Charge Components
• Meter & Services Cost: The water system incurs direct operating and maintenance costs associated with meter servicing and maintenance of the entire water system. The total meter & service costs are allocated based on equivalent meters. The equivalent meters are based on meter ratios determined using maximum operating capacities, as shown in AWWA M1, Table B-1. Using meter ratios, we recognize that as meter size increases, so do the meter and services costs. • Customer Billing Cost: The water system incurs direct operating costs associated with customer billing, such as meter reading, customer bills, customer service, etc. To customer billing costs are allocated based on the number of bills generated.

Line No. Description Equivalent Months Total Notes
Meters Costs
a b c d
1 Meter & Services Costs 1,294,000 Table 4-7, Row 3, Col 7 2 Equivalent Meters 23,890 Table 4-7, Row 4, Col 7
3 No. of Months/Year 12
4 Unit Cost (per EM) $4.51 [c4]=[c1]/[a2]/[b3]

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Rate Design 5-2

• Fire Protection Costs: The water system incurs annual direct operating and maintenance costs associated with fire protection for items such as servicing fire laterals and fire hydrants and for capacity associated with fire demands. Therefore, total fire protection costs are allocated based on meter sizes. Using meter ratios, we recognize that as meter size increases, so do the maintenance and capacity costs.

Table 5-1 demonstrate the cost elements incorporated into the monthly service charge for FY 2027. Table 5-2 shows the five-year fixed service charge rate schedule. FYs 2028 to 2031 are derived by applying the revenue adjustment in Table 3-8, Lines 2 to 6 to the previous year’s rate.

Table 5-1 Monthly Fixed Charge Cost Breakdown
Line No. Description Total Total Notes
Bills Costs
a b c
1 Customer Bill Costs 1,819,700 Table 4-7, Row 3, Col 8 2 Bills 234,017 Table 4-7, Row 5, Col 8
3 Unit Cost (per Bill) $7.78 [b3]=[b1]/[a2]
Line No. Description Equivalent Months Total Notes
Meters Costs
a b c d
1 Fire Protection Costs
2 Fire Protection 133,800 Table 4-7, Row 3, Col 10
3 Extra Capacity 740,800 Table 4-8, Row 4, Col 5+6
4 Equivalent Meters 2,767 Table 4-7, Row 4, Col 9
5 No. of Months/Year 12
6 Unit Cost (per EM) $26.34 [c6]=([c2]+[c3])/[a4]/[b5]
Meter Services & Public Fire Service Billing
Meter Meter Fire Service Meter Adjusted Adjusted Total Service Size Unit Cost Unit Cost Ratio Unit Cost Unit Cost Bill Ratio Unit Cost Charge per EM per EM $ per Bill $ $/Month
1" & less 4.51 3.05 1.00 7.56 7.78 1.00 7.78 15.34
1-1/2" 4.51 3.05 2.00 15.13 7.78 1.00 7.78 22.90
2" 4.51 3.05 4.00 30.26 7.78 1.00 7.78 38.03
3" 4.51 3.05 16.00 121.03 7.78 1.00 7.78 128.81
4" 4.51 3.05 32.00 242.06 7.78 1.00 7.78 249.84
6" 4.51 3.05 60.00 453.87 7.78 1.00 7.78 461.64
8" 4.51 3.05 140.00 1,059.02 7.78 1.00 7.78 1,066.80
Updated
Meter Total Service Water Consumption Total Service
Size Charge Allowance Charge Charge
$/Month HCF $/Month $/Month
1" & less 15.34 15 35.33 50.67
1-1/2" 22.90 30 70.66 93.56
2" 38.03 60 141.31 179.34
3" 128.81 240 565.25 694.06
4" 249.84 480 1,130.50 1,380.34
6" 461.64 900 2,119.70 2,581.34
8" 1,066.80 2,100 4,945.96 6,012.76

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Rate Design 5-3
Table 5-2 Proposed Monthly Fixed Charge

5.2.2 Consumption Charge
This consumption charge is designed to recover costs associated with water supply, base, and extra capacity demands. These include fixed and variable costs incurred by the water system while providing the average annual usage and peak demands. While most costs are fixed, such as personnel and direct and indirect charges, variable costs represent most of the costs through water production and purchase.

Table 5-3 Water Consumption Charge
Table 5-4 shows the five-year consumption rate schedule for water. FYs 2028 to 2031 are derived by applying the revenue adjustment in Table 3-8, Lines 2 to 6 to the previous year’s rate.

Table 5-4 Proposed Consumption Charges

5.3 Typical Monthly Costs under Proposed Charges
Table 5-5 compares typical monthly bills under the existing FY 2026 rates and the proposed schedule of water rates for FY 2027 derived in this Study. The typical single-family residential uses between 10 to 15 HCF of water per month.

Fiscal Year Ending June 30,
Description FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Current
Monthly Fixed Charge ($/Month)
1" & less 42.59 50.67 57.76 60.65 63.68 65.59
1-1/2" 85.18 93.56 106.65 111.99 117.59 121.11
2" 170.39 179.34 204.45 214.67 225.41 232.17
3" 681.53 694.06 791.23 830.79 872.33 898.50
4" 1,363.08 1,380.34 1,573.59 1,652.27 1,734.89 1,786.93 6" 2,555.74 2,581.34 2,942.72 3,089.86 3,244.35 3,341.68 8" 5,963.42 6,012.76 6,854.54 7,197.27 7,557.14 7,783.85 Line No. Description Consumption Total Notes
Costs
a b c
1 Base Costs 8,997,600 Table 4-7, Row 3, Col 4
2 Extra Capacity Costs 5,987,100 Table 4-7, Row 3, Col 5+6 3 Extra Capacity Costs
(in Fire Protection) (740,800)
4 Water Supply Costs 1,717,600 Table 4-7, Row 3, Col 9
5 Consumption (HCF) 6,780,221 Table 4-7, Row 4, Col 4
6 Unit Cost (per EM)* $2.35 [b6]=([b1]+[b2]+[b3]+[b4])/[a2] * Difference to Table 5-4 is due to rounding.

Fiscal Year Ending June 30,
Description FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Commodity Charges ($/HCF)
All Customers 2.14 2.36 2.68 2.82 2.96 3.05

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Rate Design 5-4
Table 5-5 Typical Monthly Bill

5.4 Benchmarking
Figure 5-1 is the proposed rates compared to rates of neighboring utilities, for a single-family residential customer. Based on the comparison, the City is currently a low-cost water provider in the area. With the proposed rate increases, the City remains one of the low-cost water providers of the surveyed utilities. All utility rates surveyed are as of January 2026.

Figure 5-1 Comparison of Neighboring Utilities

5.5 Summary of Rate Study
This rate study proposes adjustments to the City’s water rates. A summary of actions and projections are as follows:
• Maintain the fixed service charge to reflect the nature of fixed costs associated with providing 24/7 water service and investments in infrastructure through the capital improvement program.

FY 2027 FY 2027
Monthly Existing Proposed
Usage Rates Rates Difference
(HCF) ($) ($) ($)
Typical Bill by Consumption
less or equal
to 15 $42.59 $50.67 $8.08
20 $53.28 $62.44 $9.17
30 $74.65 $86.00 $11.35
40 $96.02 $109.55 $13.53
50 $117.39 $133.10 $15.72

City of Yuba City, CA | Water Rate Study
BLACK & VEATCH | Rate Design 5-5
• Maintain the consumption charge to reflect the variable costs associated with operating costs, such as water supply from contract wholesalers.
• Project water sales to in accordance with historical water demands and compliance with state water conservation targets.
• Strive to meet an operating reserve target of 90 days of operating costs. • Strive to meet a capital reserve target minimum level of 25% annual depreciation but examine the possibility of increasing it to 100% annual depreciation. • Seek State Revolving Funds for investment in capital improvements associated with Water Storage Rehabilitation and Water Treatment Plant Basin Improvements. • Maintain the low-cost of delivering drinking water amongst neighboring water providers.

EXHIBIT 1B

DRAFT

WASTEWATER RATE STUDY
BLACK & VEATCH PROJECT NO. 415056

PREPARED FOR

City of Yuba City, CA
12 MARCH 2026

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Table of Contents i
Table of Contents
Legal Notice ............................................................................................................................................ 1

1.0 Executive Summary .................................................................................................................1-1

1.1 Financial Plan ........................................................................................................................1-1

1.2 Cost of Service Analysis .......................................................................................................1-2

1.3 Rate Design............................................................................................................................1-2

1.4 Proposed Wastewater Rates ................................................................................................1-3

1.5 Customer Impact...................................................................................................................1-4

1.6 Summary................................................................................................................................1-4

2.0 Introduction .............................................................................................................................2-1

2.1 Purpose ..................................................................................................................................2-1

2.2 Wastewater System ..............................................................................................................2-1

2.3 Methodology..........................................................................................................................2-1

2.3.1 Financial Plan ........................................................................................................2-1

2.3.2 Cost-of-Service Analysis.......................................................................................2-1

2.3.3 Rate Design ...........................................................................................................2-2

2.3.4 Rate Adoption........................................................................................................2-2

3.0 Revenue and Revenue Requirements.......................................................................................3-1

3.1 Customer Data.......................................................................................................................3-1

3.1.1 Type of Customers................................................................................................3-1

3.1.2 Residential, Commercial and School Customers................................................3-1

3.1.3 Contributed Wastewater Flow..............................................................................3-2

3.1.4 Industrial Contributions ........................................................................................3-2

3.2 Revenue under Existing Rates ..............................................................................................3-3

3.3 Other Revenue .......................................................................................................................3-4

3.4 Operating and Maintenance Expenses ................................................................................3-4

3.5 Capital Improvement Program .............................................................................................3-5

3.5.1 Capital Improvement Financing Plan...................................................................3-6

3.6 Transfers within the Fund .....................................................................................................3-6

3.7 Reserves.................................................................................................................................3-6

3.8 Projected Operating Results .................................................................................................3-7

4.0 Cost-of-Service Analysis .........................................................................................................4-1

4.1 Functional Cost Components ...............................................................................................4-1

4.2 Allocation to Cost Components ...........................................................................................4-2

4.2.1 Volume and Strength Allocations ........................................................................4-2

4.2.2 Allocation of Operating and Maintenance Expenses..........................................4-2

4.2.3 Allocation of Capital Investments........................................................................4-5

4.3 Units of Service......................................................................................................................4-6

4.4 Cost of Service Allocations...................................................................................................4-6

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Table of Contents ii

4.4.1 Units Costs of Service...........................................................................................4-7

4.4.2 Distribution of Costs of Service to Customer types............................................4-7

5.0 Rate Design .............................................................................................................................5-1

5.1 Existing Rates ........................................................................................................................5-1

5.2 Proposed Rates .....................................................................................................................5-1

5.2.1 Monthly Fixed Charge ...........................................................................................5-1

5.2.2 Consumption Charge ............................................................................................5-2

5.2.3 Industrial Charges .................................................................................................5-3

5.2.4 Typical Monthly Costs under Proposed Charges................................................5-3

5.3 Benchmarking........................................................................................................................5-4

5.4 Summary of Rate Study ........................................................................................................5-5

LIST OF TABLES
Table 1-1 Proposed Wastewater Rate Schedules................................................................................1-3 Table 1-2 Typical Residential Customer Monthly Bill Impacts............................................................1-4 Table 3-1 Number of Wastewater Customers......................................................................................3-2 Table 3-2 Contributed Wastewater Flow ..............................................................................................3-2 Table 3-3 Contributed Wastewater Flow and Loadings.......................................................................3-3 Table 3-4 Existing Wastewater Rates ...................................................................................................3-3 Table 3-5 Projected Wastewater Revenue under Existing Rates ........................................................3-4 Table 3-6 O&M Escalation Factors........................................................................................................3-4 Table 3-7 O&M Expenses.......................................................................................................................3-5 Table 3-8 Capital Improvement Projects ..............................................................................................3-6 Table 3-9 Financial Plan ........................................................................................................................3-9 Table 4-1 Cost of Service Revenue from Rates....................................................................................4-1 Table 4-2 Allocation Basis for O&M Expenditures ...............................................................................4-3 Table 4-3 Allocation of O&M Expenditures...........................................................................................4-4 Table 4-4 Allocation Basis for Capital Costs........................................................................................4-5 Table 4-5 Allocation of Capital Costs ...................................................................................................4-6 Table 4-6 Units of Service......................................................................................................................4-7 Table 4-7 Units Cost of Service.............................................................................................................4-7 Table 4-8 Distribution of Costs to Customer Types.............................................................................4-8 Table 5-1 Proposed Monthly Fixed Charge ..........................................................................................5-2 Table 5-2 Proposed Consumption Charges .........................................................................................5-2 Table 5-3 Proposed Industrial Charges ................................................................................................5-3 Table 5-4 Typical Monthly Bill ...............................................................................................................5-4

LIST OF FIGURES
Figure 1-1 Financial Plan ........................................................................................................................1-2

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Table of Contents iii
Figure 3-1 Status Quo Financial Plan.....................................................................................................3-7 Figure 3-2 Financial Plan ......................................................................................................................3-10 Figure 3-3 Fund Ending Balances.........................................................................................................3-10 Figure 5-1 Comparison of Neighboring Utilities ....................................................................................5-4

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Legal Notice LN-1
Legal Notice
Black & Veatch Corporation (Black & Veatch) has prepared this report for the City of Yuba City (City), and it is based on information not within the control of Black & Veatch. The City has not requested Black & Veatch to make an independent analysis, verify the information provided to us, or render an independent judgment of the validity of the information provided by others. Because of this, Black & Veatch cannot, and does not, guarantee the accuracy thereof to the extent that such information, data, or opinions were based on information provided by others.

In conducting these analyses and in forming an opinion of the projection of future financial operations summarized in this report, Black & Veatch made certain assumptions on the conditions, events, and circumstances that may occur in the future. The methodology utilized in performing the analyses follows generally accepted practices for such projections. Such assumptions and methodologies are reasonable and appropriate for the purpose for which they are used. While we believe the assumptions are reasonable and the projection methodology valid, actual results may differ materially from those projected, as influenced by the conditions, events, and circumstances that occur. Such factors may include the City’s ability to execute the capital improvement program as scheduled and within budget, regional climate and weather conditions affecting discharge of wastewater flow, and adverse legislative, regulatory, or legal decisions (including environmental laws and regulations) affecting the City’s ability to manage the system and meet wastewater quality requirements.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Executive Summary 1-1

1.0 Executive Summary
The City of Yuba City (City) commissioned Black & Veatch Corporation (Black & Veatch) to perform a Wastewater Rate Study (Study) for its Wastewater Utility. The Study included the development of a fiveyear financial plan, a cost-of-service analysis, and the design of rates. The specific objectives of the Study were to:
◼ Evaluate the adequacy of projected revenues under existing rates to meet projected revenue requirements.
◼ Develop a sound financial plan for the Wastewater Utility covering five years for ongoing operations and planned capital improvements.
◼ Allocate the projected revenue requirements to the various customer types in accordance with their respective service requirements.
◼ Develop a suitable rate schedule that produces revenues adequate to meet financial needs while recognizing customer costs of service and regulatory considerations such as Proposition 218 and other applicable judicial decisions.

1.1 Financial Plan
The City operates the Wastewater Utility as a self-supporting enterprise. The Wastewater Utility is a combination of funds. The funds include:
• Fund 518: Wastewater Operations
• Fund 527: Wastewater Connection Fees
• Fund 528: Cash CIP
As such, the Wastewater Utility’s financial plan encompasses all the funds revenues, operation and maintenance (O&M) expenses, debt service requirements, capital improvement program (CIP), and other expenditures. The revenues incorporate projections of customer accounts, wastewater flow, strengths loadings, and average daily attendance (ADA) of students based on the City’s historical data and estimates of growth.

Black & Veatch worked with the City to develop a proposed financial plan over a five-year planning period beginning fiscal year (FY) July 1, 2026, and ending June 30, 2031 (study period), that will support the Wastewater Utility’s ongoing operating and capital costs, while minimizing impacts on customers. The financial plan supports the following activities:
◼ Operation and Maintenance Expenses: The Wastewater Utility anticipates O&M expenses to increase from $16.6M in FY 2027 to $19.0M in FY 2031. Wastewater costs include collection, treatment of wastewater flow, regulatory compliance, administration, and laboratory functions. ◼ Debt Service Payments: The Wastewater Utility has existing debt service related to Series 2017 and 2018 Revenue Bonds, 2017 Certificates of Participation Bonds plus debt on several State Revolving Loan (SRF) loans, as well as other minor commercial bank debt. It is projected that the Wastewater Utility will require both a Revenue Bond and SRF Loan in FY 2028. Total debt service payments increase from $3.4M in FY 2027 to $6.9M in 2031.
◼ Capital Improvement Projects: The Wastewater Utility plans to execute $93.0M in capital projects over the study period.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Executive Summary 1-2
◼ Reserves: The Wastewater Utility plans to continue funding the operating fund reserve, maintain an adequate balance in its Wastewater Cash CIP fund, and maintain adequate debt service coverage. ● The operating fund reserve is to help cover fluctuations in day-to-day expenses. The scheduled target is 90 days of O&M expenses.
● The capital fund reserve is to help maintain enough funds to cover a portion of upcoming annual capital expenditures, smooth out the amount of capital infusion needed each year, and help mitigate unexpected capital costs. The scheduled target is 25% annual depreciation.

The City should aim at increasing it to 100% annual depreciation.

The Wastewater Utility is proposing revenue adjustments to allow the enterprise to meet operating and capital needs and reserve targets, as shown in Figure 1-1.

Figure 1-1 Financial Plan

1.2 Cost of Service Analysis
The wastewater cost-of-service allocation methodology used in this Study follows the Functional Cost Allocation Method endorsed by the Water Environment Federation (WEF) Financing and Charges for Wastewater Systems, Manual of Practice 27 (MoP27) manual. Like the methodology used for water systems, the wastewater cost-of-service analysis allocates costs to the different customer types in proportion to their use of the wastewater system. As recommended by WEF, Black & Veatch distributed functional costs to volume, strength, and customer-related parameters. This allocation methodology produces unit costs for allocation to individual customer types based on the projected customer service requirements.

1.3 Rate Design
The Right to Vote on Taxes Act, also known as Proposition 218, was passed by California voters in 1996 and added Article XIIIC and Article XIIID to the California Constitution. These articles and subsequent legal cases provide the regulatory framework that guides and informs the rate-setting process. The costPage 410 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Executive Summary 1-3
of-service analyses provide the cost nexus for the proposed rate structures. The regulatory framework helps ensure cost recovery is proportionate to the cost of providing the service.1 To minimize impacts, retain simplicity, and ensure the reasonable stability of revenue, Black & Veatch recommends the following rate structure.
◼ Monthly Fixed Charge: The Wastewater Utility should retain the monthly fixed charge for all residential, commercial, and school customer classes. The monthly fixed charge for residential is based on equivalent dwelling units, for commercial is based on accounts, and for schools it is based on the ADA of students.
◼ Consumption Charge: The Wastewater Utility should amend its uniform consumption charges for commercial customer classes to be based on the type of commercial. The City has three commercial types labeled C1, C2, and C3 which differ based on the strength characteristics in the wastewater flow.
◼ Industrial Charge: The Wastewater Utility should retain its industrial charges based on flow in millions of gallons (MG), Biochemical Oxygen Demand (BOD), and Total Suspended Solids (TSS) loadings.

1.4 Proposed Wastewater Rates
Table 1-1 shows the Wastewater Utility’s recommended five-year rate schedules for wastewater services.

Proposed rates are effective July 1
st for all fiscal years over the study period. Any rates adopted for an effective date later than July 1st will impact revenues.

Table 1-1 Proposed Wastewater Rate Schedules
1 Black & Veatch is not a legal firm and interpretations of the legal requirements under Proposition 218 should be reviewed by legal counsel.

Fiscal Year Ending June 30,
Customer Class FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Current
Monthly Fixed Charge ($/month)
Single Family* 65.23 67.28 77.37 82.78 88.58 92.56
Multi Family 52.20 53.82 61.89 66.23 70.86 74.05
Commercial - C1 65.23 67.28 77.37 82.78 88.58 92.56
Commercial - C2 73.40 67.28 77.37 82.78 88.58 92.56
Commercial - C3 88.89 67.28 77.37 82.78 88.58 92.56
School ($/ADA) 29.96 31.31 36.00 38.52 41.22 43.07
*Includes Stonegate customers
Consumption Charges ($/HCF)
Commercial (C1,C2,C3) 2.57
Commercial - C1 3.89 4.47 4.78 5.12 5.35
Commercial - C2 4.41 5.07 5.42 5.80 6.07
Commercial - C3 7.04 8.09 8.66 9.26 9.68
Industrial Charges
Volume ($/MG) 3,763.63 7,761.06 8,925.22 9,549.98 10,218.48 10,678.31 TSS ($/lbs) 0.290 0.418 0.480 0.514 0.550 0.574
BOD ($/lbs) 0.385 0.428 0.492 0.527 0.564 0.589 Page 411 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Executive Summary 1-4

1.5 Customer Impact
If approved, the wastewater rate adjustments will affect a typical single-family residential customer as shown in Table 1-2.

Table 1-2 Typical Residential Customer Monthly Bill Impacts

1.6 Summary
The financial plan described herein reflects a balanced approach by the City to operate the Wastewater Utility in a sustainable manner, while providing high quality services and minimizing customer bill impacts. Black & Veatch used industry standard principles for equitable cost-of-service allocations to calculate the proposed rates. Detailed explanations for these calculations are provided in the remainder of this report.

Fiscal Year Ending June 30,
Customer Class FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 Current
Monthly Fixed Charge ($/month)
Single Family 65.23 67.28 77.37 82.78 88.58 92.56
$ Increase 2.05 10.09 5.42 5.79 3.99 Page 412 of 449
City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Introduction 2-1

2.0 Introduction

2.1 Purpose
The purpose of this report is (1) to project the future revenues of the Wastewater Utility under existing rates and charges, project operating expenses and capital financing revenue requirements, and to examine the adequacy of projected revenues to meet these revenue requirements through FY 2031; (2) to allocate these revenue requirements, or costs of service, for a representative test year to the various customer types in accordance with the respective service requirements that each category places on the system; and (3) to develop a suitable schedule of wastewater rates that will produce revenues adequate to meet the financial needs of the utility on the basis that recognizes customer costs of service and practical bill impact considerations.

2.2 Wastewater System
The Wastewater Utility provides wastewater collection and treatment services to over 15,160 residential and non-residential customers. Services include constructing and maintaining the wastewater system while minimizing overflows. Wastewater flows in the City are collected and transported through 173 miles of gravity pipeline, including 17 lift stations, to the Yuba City Wastewater Treatment Facility and ultimately disposed into the Feather River and/or detention ponds. This facility was built in 1972 and expanded in 2003 to its current capacity to treat an average of 10.5 million gallons per day (MGD). The City’s current average daily flow is about 6.5 MGD.

2.3 Methodology
The rate-setting methodology employed by Black & Veatch is consistent with industry guidelines established by WEF's Financing and Charges for Wastewater Systems, Manual of Practice 27 manual. The manual is nationally recognized and provides recommendations and generally accepted practices in the wastewater industry. The intent of the manuals is to provide rate-making practices that can be used to address the unique circumstances of the communities served. An overview of the methodology is outlined below.

2.3.1 Financial Plan
Financial planning compares the
projected revenues of the utility under
existing conditions to its projected
operating expenses and capital
expenditure. This step tests the
adequacy of the current rates to recover
the utility's forecasted costs. If
shortfalls occur, revenue increases are
recommended until the utility is
financially stable.

2.3.2 Cost-of-Service Analysis
The cost-of-service analysis builds a link
between the utility's cost of service and
the proposed rates for each customer type. This process takes individual budget cost items and allocates them based on their function. Organizing the budget in terms of end function allows the creation of a nexus between the budget cost item and the rate.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Introduction 2-2

2.3.3 Rate Design
Rate design involves developing a rate
structure that equitably and
proportionately recovers costs from the
customers. The rate structure should
reflect a customer group's demand
profile and be resilient and flexible
enough to handle changing costs (i.e.,
operating and/or capital) and demand
scenarios (i.e., customers change their
demand on the system by contributing
less or more flow). Rate equity is
inherently built upon each customer's
relative use of the system. By designing
different rate components, the utility can balance affordability and equity.

2.3.4 Rate Adoption
In California, public utilities must meet procedural requirements for adopting new or increased rates for property-related fees under Proposition 218. Proposition 218 states that the utility must hold a public hearing to consider the proposed rates and provide written notice to all customers at least 45 days before the hearing. Any property owner or tenant directly liable to the public agency for payment of the propertyrelated fees may submit a written protest to the new or increased rates until the close of the public hearing. The City Council may not adopt the proposed new or increased rates if property owners or tenants directly liable for payment submit written protests on behalf of more than 50% of the properties upon which the proposed rates may be imposed.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-1

3.0 Revenue and Revenue Requirements
To meet the costs associated with providing wastewater services to its customers, the Wastewater Utility derives revenue from various sources, including wastewater user charges (rates), lab testing fees, septage haulers, main extension fees, connection fees, interest earned from the investment of available funds, and other miscellaneous revenues. The Wastewater Utility is constantly looking for other sources of revenue, such as grants, to help mitigate ratepayer impacts. The level of future revenues is estimated via an analysis of historical and future system growth in terms of the number connections, units, students, and contributed wastewater flow and loadings. This section also projects the expenses, or revenue requirements, necessary to operate and maintain the system, invest in capital improvements, make debt service payments, and cover other wastewater system expenses.

3.1 Customer Data

3.1.1 Type of Customers
The City provides wastewater collection services to over 15,160 residential and non-residential customers. The City bills customers based on the customer class. • Residential is composed of single-family and multi-family and are billed by equivalent dwelling units (EDU).
• Commercial is composed of three types C1, C2, and C3 and are billed by connection. The C classifications in the commercial classes are divided by the strengths. C1 is low strength, C2 is medium strength, and C3 is high strength. The actual customer types are identified in the City of Yuba City Municipal Code, Section 6-5.507 Summary of Charges. • Schools are billed by the average daily attendance (ADA) of students. • Significant Industrial Users are billed by flow and strength as described in Section 3.1.3.

The flow by customer will vary by year while the strengths associated with these customers are identified in Section 4.3.

3.1.2 Residential, Commercial and School Customers
Since the City bills residential customers based on EDUs, commercial based on connections, and schools based on ADA of students, the analysis included a review of historical data and anticipated growth. The City has seen a slight growth in population between 2020 and 2025 2 and historical billing data. The
analysis herein projects the total number of EDUs and connections will grow at 1.0% per year, and ADA of student to remain flat during the study period which is consistent with historical data. 2 State of California Department of Finance, E-5 Population and Housing Estimates.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-2
Table 3-1 shows the projected number of customers for the Wastewater Utility.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-3
Table 3-1 Number of Wastewater Customers

3.1.3 Contributed Wastewater Flow
Table 3-2 shows the projected contributed wastewater flow in hundred cubic feet (HCF) for the study period. It is important to note that only commercial customers are billed by contributed wastewater flow.

In determining the projected contributed wastewater flow, Black & Veatch analyzed historical wastewater flow patterns in conjunction with the water projections for the Water Utility. Contributed wastewater flows is highly dependent on water consumption; therefore, it is important to understand water consumption patterns.

In examining water consumption patterns, it was noted that water consumption depends on California's weather conditions. Water consumption has stabilized over the past few years due to water conservation incentives and messaging. Recognizing that water consumption has largely stabilized for these customer classes, the projected contributed wastewater flow is expected to increase 0.5% per year for the study period.

Table 3-2 Contributed Wastewater Flow

3.1.4 Industrial Contributions
Within the City, there are Significant Industrial Users (SIU) that contribute 25,000 gallons per day or more of process wastewater to the City’s Wastewater Treatment Facility. The City monitors the flow and strength loading contributions of the six SIUs.

Table 3-3 shows the projected contributed wastewater flow in MG and associated BOD and TSS loadings in pounds (lbs) for the study period. In determining the projected contributed wastewater flow and loadings, Black & Veatch analyzed historical data. Based on the historical data, the number of industrial customers will remain constant at six, but the flow will increase 1.0% per year and the strength loadings will increase at 0.5% per year over the study period.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Residential
1 Single Family (EDU) 13,310 13,443 13,578 13,713 13,850 13,989 2 Multi Family (EDU) 7,674 7,751 7,829 7,907 7,986 8,066 3 Total Residential 20,985 21,194 21,406 21,620 21,836 22,055 Commercial
4 Commercial - C1 (accts) 836 844 853 861 870 879
5 Commercial - C2 (accts) 58 58 59 59 60 60
6 Commercial - C3 (accts) 169 171 172 174 176 177
7 Total Commercial 1,062 1,073 1,084 1,095 1,106 1,117
Schools
8 Schools (accts) 15 15 15 15 15 15
9 Schools (ADA) 1,547 1,547 1,547 1,547 1,547 1,547
10 Total Schools 1,547 1,547 1,547 1,547 1,547 1,547
Line No. Description Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Contributed Flow (HCF)
1 Commercial - C1 235,567 236,745 237,929 239,119 240,315 241,517 2 Commercial - C2 18,529 18,622 18,715 18,809 18,903 18,998 3 Commercial - C3 154,852 155,626 156,404 157,186 157,972 158,762 4 Total Contributed Flow (HCF) 408,948 410,993 413,048 415,114 417,190 419,277 Line No. Description

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-4
Table 3-3 Contributed Wastewater Flow and Loadings

3.2 Revenue under Existing Rates
Wastewater user rates serve as the Wastewater Utility’s primary revenue source. Therefore, the level of future rate revenue is important in developing a long-range financial plan. Future wastewater rate revenues are calculated using the number of EDUs, accounts, ADA of students, billed wastewater flows, industrial flows and strength loadings multiplied by the applicable existing rates.

Table 3-4 presents the rates in effect for FY 2026 (effective March 1, 2025), which were approved by City Council on June 21, 2016, as part of the City’s 2016 Rate Study. The rates are composed of monthly fixed charges, consumption charge, ADA charge, and industrial charges. The consumption charge is only applied to commercial (C1, C2, and C3) customers based on contributed wastewater flow.

Table 3-4 Existing Wastewater Rates
Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Industrial
1 Accounts 6 6 6 6 6 6
2 Volume (MG) 255.2 257.8 260.4 263.0 265.6 268.3
3 TSS Loadings (lbs) 316,036 317,616 319,204 320,800 322,404 324,016 4 BOD Loadings (lbs) 1,729,937 1,738,586 1,747,279 1,756,015 1,764,795 1,773,619 Line No. Description
Fiscal Year Fiscal Year
FY 2026 FY 2026
Monthly Fixed Charge ($/month) Average Daily Attendance Charge ($/ADA) Single Family 65.23 Schools 29.96
Multi Family 52.20
Commercial - C1 65.23 Industrial
Commercial - C2 73.40 Volume ($/MG) 3,763.63
Commercial - C3 88.89 TSS ($/lbs) 0.290
Stonegate 65.23 BOD ($/lbs) 0.385
Consumption Charge ($/HCF)
Commercial (C1,C2,C3) 2.57
Description Description

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-5
Table 3-5 shows projected wastewater rate revenue under existing rates. The projected Wastewater Utility revenues under existing rates increase from $18.9M in FY 2027 to $19.6M in FY 2031.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-6
Table 3-5 Projected Wastewater Revenue under Existing Rates

3.3 Other Revenue
Other sources of operating revenue include lab testing fees, main extension fees, connection fees, interest earned from the investment of available funds, and other miscellaneous revenues. Other operating revenues represent on average 5.0% of the Wastewater Utility’s total revenue. The City anticipates these revenues will remain relatively constant for the study period.

3.4 Operating and Maintenance Expenses
Table 3-7 shows the Wastewater Utility’s projected O&M expenses for the study period. These expenses include salaries and benefits, maintenance and operations, internal service charges, and capital expenditures. The O&M expenditure will escalate based on the factors identified in Table 3-6.

Table 3-6 O&M Escalation Factors
The following are O&M categories in Table 3-7:

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
($) ($) ($) ($) ($) ($)
Monthly Fixed Charge
1 Single Family 10,315,400 10,418,500 10,522,800 10,628,000 10,734,300 10,841,600 2 Multi Family 4,759,700 4,807,300 4,855,300 4,903,900 4,952,900 5,002,400 3 Commericial - C1 647,800 654,400 660,900 667,600 674,400 681,100 4 Commericial - C2 50,100 50,700 51,200 51,700 52,200 52,700 5 Commericial - C3 178,300 180,100 181,800 183,700 185,500 187,400 6 Total Monthly Fixed Charge $ 15,951,300 $ 16,111,000 $ 16,272,000 $ 16,434,900 $ 16,599,300 $ 16,765,200 Consumption Charge
7 Commericial - C1 599,400 602,400 605,400 608,500 611,500 614,600 8 Commericial - C2 47,100 47,400 47,600 47,900 48,100 48,300 9 Commericial - C3 394,000 396,000 398,000 400,000 402,000 404,000 10 Total Consumption Charge $ 1,040,500 $ 1,045,800 $ 1,051,000 $ 1,056,400 $ 1,061,600 $ 1,066,900 ADA Charge
11 Schools 45,900 45,900 45,900 45,900 45,900 45,900
12 Total ADA Charge $ 45,900 $ 45,900 $ 45,900 $ 45,900 $ 45,900 $ 45,900 Industrial Fees
13 Volume 950,800 960,300 969,900 979,500 989,400 999,200 14 TSS 90,700 91,200 91,600 92,100 92,600 93,000
15 BOD 659,300 662,600 665,900 669,200 672,700 676,000
16 Total Industrial Fees $ 1,700,800 $ 1,714,100 $ 1,727,400 $ 1,740,800 $ 1,754,700 $ 1,768,200 17 Total $ 18,738,500 $ 18,916,800 $ 19,096,300 $ 19,278,000 $ 19,461,500 $ 19,646,200 Line No. Description Fiscal Year Ending June 30,
FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
1 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% City Negotiation 2 Fringe Benefits 3.00% 3.00% 3.00% 3.00% 3.00% City Negotiation 3 Materials & Supplies 3.20% 3.20% 3.20% 3.20% 3.20% All items CPI, City Staff 4 Contractual Services 3.10% 3.10% 3.10% 3.10% 3.10% Services, CPI, City Staff 5 Utilities 5.00% 5.00% 5.00% 5.00% 5.00% Electricity CPI, City Staff 6 Equipment & Structures 3.90% 3.90% 3.90% 3.90% 3.90% ENR CCI 7 Chemicals 4.20% 4.20% 4.20% 4.20% 4.20% Commodities PPI, City Staff 8 Water Purchases 3.00% 3.00% 3.00% 3.00% 3.00% Estimated 9 General Admin 3.20% 3.20% 3.20% 3.20% 3.20% All items CPI, City Staff 10 FOG Program 0.00% 0.00% 0.00% 0.00% 0.00% Estimated
11 Capital Expenditures 3.90% 3.90% 3.90% 3.90% 3.90% ENR CCI CPI - Consumer Price Index, PPI - Producer Price Index, ENR CCI - Engeering New Record Construction Cost Index Line No. Description Sources

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-7
◼ Salaries and Benefits: These costs represent salaries and benefits for wastewater staff assigned to operating and maintaining the wastewater infrastructure system. ◼ Materials, Supplies & Services: These costs represent contract services, water supply, supplies and materials, maintenance and repairs, travel & training, and general expenses. ◼ Power and Utilities: These costs represent heat, power, and telephone. ◼ Contribution to Other Funds: These costs represent internal costs to the Wastewater Utility from other City departments for indirect costs such as customer service and billing, capital project admin, vehicle replacement, IT charges, and insurance.
◼ Acquisitions: These costs represent small capital expenditure for physical movable equipment such as tools, equipment, generators, and computers.

Table 3-7 O&M Expenses
As shown in Table 3-7, the Wastewater Utility’s O&M expenses are projected to increase from $16.6M in FY 2027 to $19.0M in FY 2031.

3.5 Capital Improvement Program
The Wastewater Utility annually develops its five-year Capital Improvement Plan to identify wastewater system needs, including assessments, inspections, maintenance, and rehabilitation and replacement requirements. In 2020, the City completed its 20-year Wastewater Master Plan, which identified $183.5M in capital projects to address existing system deficiencies and $208.7M for future growth. All costs were in 2019 dollars. Understanding that capital expenditure is constrained by available funds, staff developed feasible CIP for the study period.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
($) ($) ($) ($) ($) ($)
Operation and Maintenance
1 Salaries & Benefits 5,665,500 5,835,400 6,010,600 6,191,000 6,376,700 6,567,900 2 Materials, Supplies & Services 6,987,000 7,243,000 7,508,500 7,783,600 8,069,400 8,365,900 3 Power and Utilities 709,600 745,100 782,500 821,700 862,800 906,000 4 Contributions to Other Funds 2,644,100 2,728,700 2,816,000 2,906,100 2,999,100 3,095,100 5 Acquisitions 52,000 54,000 56,100 58,300 60,600 63,000 6 Total $ 16,058,200 $ 16,606,200 $ 17,173,700 $ 17,760,700 $ 18,368,600 $ 18,997,900 Line No. Description

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-8
Table 3-8 shows the CIP for the study period. The Wastewater Utility is composed of many functions, of which collection, treatment, and outfall are significant elements. Therefore, of the total $93.0M, collection accounts for $11.4M, treatment accounts for $11.4M, and outfall accounts for $63.2M of the total projects. The City examines the wastewater infrastructure system annually; therefore, CIP might change based on the current need.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-9
Table 3-8 Capital Improvement Projects
The outfall projects identified consist of modifications to the existing treatment facility effluent pumps, a new bifurcation station and flow meter, approximately 2 miles of new outfall pipeline, a levee crossing system, new diffuser structure in the Feather River bed, an access ramp over the levee to access the new outfall, new power connections, and acquisition of easements including temporary construction easements.

3.5.1 Capital Improvement Financing Plan
The Wastewater Utility funds capital improvement projects from a combination of revenue derived from rates, debt funding, connection fees, interest earnings, grants, and available funds. In the study period, the Wastewater Utility is projected to issue new debt financing in the form of a Revenue Bond and SRF Loan.

The bond and loan are to be used for the Wastewater Treatment Facility Outfall and Diffuser project. The City actively seeks grants to offset the cost of capital projects.

3.6 Transfers within the Fund
Since the Wastewater Utility is composed of funds, there will be transfers of money between the Wastewater Operations (Fund 518), Wastewater Connection Fees (Fund 527), and Cash CIP (Fund 528) over the study period.

3.7 Reserves
A utility typically establishes reserves for several reasons, such as covering shortfalls in operating revenues, maintaining strong bond ratings, covering day-to-day operating costs, and easing the burden on ratepayers associated with large rate increases. The Wastewater Utility will maintain two reserves:
◼ Operating Reserve represents the working capital the Enterprise Fund maintains to cover day-to-day expenses and maintains enough funds to cover accounts receivable if there are supplier issues, periods of lower-than-expected wastewater sales, or unforeseen cost increases. The reserve will maintain a minimum balance of 90 days of operating expenses once fully funded. ◼ Capital Reserve represents funds to cover a portion of upcoming annual capital expenditures, smooth out the amount of capital infusion needed each year, and help mitigate unexpected capital costs. This reserve will maintain a minimum balance of 25% annual depreciation. It is recommended that the City increases the minimum balance to 100% annual depreciation in the future.

Appropriate reserve levels help the Wastewater Utility with liquidity, provide operational flexibility, and demonstrate fiscal responsibility to the rating agencies, which allows the City to access lower-cost funds.

Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
($) ($) ($) ($) ($) ($)
Capital Improvement Program
1 Land 0 0 0 0 0 0
2 Collection 519,400 539,600 2,354,200 2,562,000 2,782,500 3,141,800 3 Lift Station 519,400 269,800 560,500 582,300 604,900 628,400 4 Treatment 2,493,200 2,482,000 840,800 1,455,700 3,084,900 3,581,700 5 Laboratory 155,800 27,000 0 0 0 0
6 Outfall 519,400 5,895,000 27,118,300 27,090,000 3,125,000 0 7 Stormwater 26,000 27,000 28,000 29,100 30,200 31,400
8 General Plant 254,500 48,600 252,200 320,300 1,482,000 1,979,300 9 Total $ 4,487,700 $ 9,289,000 $ 31,154,000 $ 32,039,400 $ 11,109,500 $ 9,362,600 Line No. Description

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-10

3.8 Projected Operating Results
The revenue requirements of the Wastewater Utility consist of O&M expenses, debt payments, capital expenditure, and reserve requirements. To fully understand the current condition of the Wastewater Utility, it is important to examine the cash flow projections under the status quo scenario. As shown in Figure 3-1, the status quo conditions indicate that the Wastewater Utility would operate from an annual deficit position, requiring the drawdown of reserves to keep operating. In this scenario, the Wastewater Utility would not impose any revenue increases over the study Period and continue to incur O&M expenses, make debt service payments, pay for the execution of the planned CIP, and transfer to reserves. Another important note is that without revenue increases, the Wastewater Utility will not have the capacity to issue new debt that is needed to execute the outfall and diffuser project as required as part of the National Pollutant Discharge Elimination System (NPDES) permit.

Figure 3-1 Status Quo Financial Plan
The analysis conducted for the Study indicates that the City should implement the proposed revenue increases shown in Table 3-9 if it wishes for the user rates to cover expenses and to keep the Wastewater Utility in a balanced financial condition. The revenue increases represent the total revenue adjustment needed to meet revenue requirements. The revenue adjustment does not represent adjustments to the individual rates but reflects the overall level of revenue needed to meet the Wastewater Utility’s obligations.

The recommended revenue increases help the Wastewater Utility meet the following goals:
◼ Meet budgeted operating obligations in the five FYs.
◼ Meet planned capital investments in the five FYs.
◼ Maintain the reserve within their targets.

Table 3-9 shows the proposed Wastewater Utility for the study Period. The financial plan consists of 1) Revenue and 2) Revenue Requirements.

Revenue
◼ Line 1 is the revenue under existing rates.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-11
◼ Lines 2 through 6 are the additional revenues generated from the required annual increases. The additional revenue generated directly reflects the number of months the increase is effective for; therefore, the amount might be calculated at less than that stated amount. ◼ Line 8 is the total revenue generated from user charges. ◼ Line 12 represents other operating revenues.
◼ Line 15 represents proposed debt financing.
◼ Line 16 represents the total revenues for the Wastewater Utility.

Revenue Requirements
◼ Line 18 represents O&M expenses.
◼ Line 21 represents debt service requirements.
◼ Line 24 represents routine capital outlay and capital project expenditures. ◼ Line 25 represents the total revenue requirements for the Wastewater Utility.

Line 28 represents the net cumulative cash balance within the Wastewater Utility. The net cumulative cash balance intends to match, to the extent possible, Line 29. The cash balance reserve is required to ensure the Wastewater Utility can continue in the event of supplier interruption, market price fluctuations of critical equipment or supplies, or an abrupt drop in account receivables. The reserve target minimum is 90 days of O&M expenses.

Line 30 represents the debt service coverage. Currently, the debt service coverage requirement is 1.20x.

The debt service coverage requirement is set forth by financial institutions that lent the Wastewater Utility money in the form of Revenue Bonds. Any proposed debt financing identified in the financial plan is SRF loans which will not change the debt service coverage requirement.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-12
Table 3-9 Financial Plan
Fiscal Year Ending June 30,
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Revenue
Rate Revenue
1 Revenue from Existing Rates 19,034,900 19,213,200 19,392,700 19,574,400 19,757,900 19,942,600 Year
Months
Effective Rate Adj
2 2027 12 15.00% 2,882,000 2,908,900 2,936,200 2,963,700 2,991,400 3 2028 12 15.00% 3,345,200 3,376,600 3,408,200 3,440,100 4 2029 12 7.00% 1,812,100 1,829,100 1,846,200
5 2030 12 7.00% 1,957,100 1,975,400
6 2031 12 4.50% 1,358,800
7 Increased Revenue Due to Adj 0 2,882,000 6,254,100 8,124,900 10,158,100 11,611,900 8 Subtotal Rate Revenue $ 19,034,900 $ 22,095,200 $ 25,646,800 $ 27,699,300 $ 29,916,000 $ 31,554,500 Other Operating Revenue
9 Service Charges and Fees 1,079,900 1,030,300 1,030,300 1,030,300 1,030,300 1,030,300 10 Connection Fees 405,000 405,000 405,000 405,000 405,000 405,000 11 Interest Income 505,400 336,600 294,400 448,400 559,100 548,500 12 Subtotal Other Operating Rev $ 1,990,300 $ 1,771,900 $ 1,729,700 $ 1,883,700 $ 1,994,400 $ 1,983,800 Capital Financing
13 Revenue Bonds 0 0 13,228,300 0 0 0
14 SRF Loans 0 0 15,726,667 29,170,000 5,103,334 0
15 Subtotal Capital Financing $ 0 $ 0 $ 28,954,967 $ 29,170,000 $ 5,103,334 $ 0 16 Total Revenue $ 21,025,200 $ 23,867,100 $ 56,331,467 $ 58,753,000 $ 37,013,734 $ 33,538,300 Revenue Requirements
Operating & Maintenance
17 O&M Expenses 16,006,200 16,552,200 17,117,600 17,702,400 18,308,000 18,934,900 18 Subtotal O&M $ 16,006,200 $ 16,552,200 $ 17,117,600 $ 17,702,400 $ 18,308,000 $ 18,934,900 Debt Service
19 Existing Rev Bonds/SRF Loans/Other 3,445,200 3,453,100 3,459,700 3,465,000 3,443,800 3,480,500 20 Proposed Rev Bonds/SRF Loans/Other 0 0 1,166,800 1,166,800 2,875,700 3,445,300 21 Total Debt Service $ 3,445,200 $ 3,453,100 $ 4,626,500 $ 4,631,800 $ 6,319,500 $ 6,925,800 Capital
22 Capital Acquisitions 52,000 54,000 56,100 58,300 60,600 63,000 23 Capital Improvements Projects 4,487,700 9,288,900 31,154,000 32,039,400 11,109,500 9,362,600 24 Total Capital $ 4,539,700 $ 9,342,900 $ 31,210,100 $ 32,097,700 $ 11,170,100 $ 9,425,600 25 Total Revenue Requirements $ 23,991,100 $ 29,348,200 $ 52,954,200 $ 54,431,900 $ 35,797,600 $ 35,286,300 26 Net Annual Cash Balance (2,965,900) (5,481,100) 3,377,267 4,321,100 1,216,134 (1,748,000) 27 Beginning Fund Balance 9,775,608 6,809,708 1,328,608 4,705,875 9,026,975 10,243,109 28 Net Cumulative Fund Balance $ 6,809,708 $ 1,328,608 $ 4,705,875 $ 9,026,975 $ 10,243,109 $ 8,495,109 29 Min Operating Reserves (90 Days) $ 3,816,600 $ 3,946,700 $ 4,081,400 $ 4,220,800 $ 4,365,000 $ 4,514,300 30 Debt Service Coverage (1.2x) 1.99 1.87 2.73 2.66 3.08 3.52 Line No. Description

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Revenue and Revenue Requirements 3-13
Figure 3-2 presents the proposed Wastewater Utility financial plan.

Figure 3-2 Financial Plan
Figure 3-3 Presents the fund balances for funds after the recommended rate increases.

Figure 3-3 Fund Ending Balances

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-1

4.0 Cost-of-Service Analysis
The cost-of-service analysis requires recovery of the City’s needed revenues from wastewater service rates, allocated to customer types according to the service rendered. An equitable rate structure allocates the capture of revenue requirements to customer types based on EDUs, accounts, ADA of students, and contributed wastewater flow.

In analyzing the Wastewater Utility’s cost of service for allocation to its customer classes, Black & Veatch selected the annual revenue requirements for FY 2027 as the test year requirements to demonstrate the development of cost-of-service wastewater rates. Table 4-1 shows the total costs of service that need to be recovered from wastewater user rates for FY 2027.

Table 4-1 Cost of Service Revenue from Rates
The total revenue requirement is shown in Line 5 matches Table 3-9, Line 25. As shown in Line 10, we deduct revenues from other sources to derive the net revenue requirement recovered through rates. Line 11 represents the net annual cash balance during the FY. This number is positive if the Wastewater Utility is drawing down funds available on hand. The number will be negative if the Wastewater Utility replaces funds. In this case, the $5.5M figure indicates that the forecast shows a negative annual cash balance for the year. The City expects to implement a revenue adjustment starting at the beginning of the fiscal year, the final service recovery costs from rates does not require an adjustment as shown on Line 12. Line 14 is the costs to be recovered from rates.

4.1 Functional Cost Components
The first step in conducting a cost-of-service analysis involves analyzing the cost of providing wastewater service by system function to allocate the costs to the various customer types properly and, subsequently, design rates. As a basis for allocating costs of service among customer types, costs are Operating Capital Total
Expense Cost Cost
($) ($) ($)
Revenue Requirements
1 O&M Expense 16,552,200 0 16,552,200
2 Debt Service Requirements 0 3,453,100 3,453,100
3 Capital Acquisitions 0 54,000 54,000
4 Capital Projects 0 9,288,900 9,288,900
5 Subtotal $ 16,552,200 $ 12,796,000 $ 29,348,200
Less Revenue Requirements Met from Other Sources
6 Service Charges and Fees 1,030,300 0 1,030,300
7 Connection Fees 0 405,000 405,000
8 Interest Income 336,600 0 336,600
9 Debt Financing 0 0 0
10 Subtotal $ 1,366,900 $ 405,000 $ 1,771,900
Adjustments
11 Adj for Annual Cash Balance 3,018,200 2,462,900 5,481,100 12 Adj to Annualize Rate Increase 0 0 0
13 Subtotal $ 3,018,200 $ 2,462,900 $ 5,481,100
14 COS to be Recovered from Rates $ 12,167,100 $ 9,928,100 $ 22,095,200 Line No. Description

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-2
separated into the following two basic functional cost components: (1) Volume and (2) Strength, described as follows:

1. Volume costs represent operating and capital costs of the system associated with collection.

The collection costs vary directly with the quantity of sewage flow.

2. Strength costs represent those operating and capital costs associated with treatment. The treatment costs are specifically related to strength parameters such as Biological Oxygen Demand, and Total Suspended Solids.

4.2 Allocation to Cost Components
The next step of the cost-of-service process involves allocating each cost element to functional cost components based on the parameter or parameters having the most significant influence on the magnitude of that cost element. O&M expenses are allocated directly to appropriate cost components. A detailed allocation of related capital investment is used as a proxy for allocating capital and replacement costs. The separation of costs into functional components provides a means for distributing such costs to the various types of customers based on their respective responsibilities.

4.2.1 Volume and Strength Allocations
The wastewater system consists of various facilities designed and operated to fulfill a given function. For the system to provide adequate service to its customers, it must be capable of meeting not only the annual volume requirements but also the strength loading demands placed on the system. Because not all customers and types of customers exert volume and strength loading demands similarly, the capacities of the various facilities must be designed to accommodate the demands of all classes of customers.

Each wastewater service facility within the system has an underlying volume demand exerted by all customers for whom the base cost component applies. For those facilities designed solely to meet volume demand, 100% of the costs go to the base cost component. For facilities designed to meet strength loading demands, the percentage of the costs is allocated to the different strength cost components based on their specific function.

4.2.2 Allocation of Operating and Maintenance Expenses
When allocating O&M expenses, the MoP27 Manual refers to functional cost components. Simply put, these costs correspond to the activities that the Wastewater Utility undertakes to provide its customers with wastewater service: identify the wastewater flow, collect it, pump it, treat it, discharge it to river, bill for services, and collect revenues. Where possible, the O&M expenses for FY 2027 are directly allocated to the cost components to the extent possible. For those costs that are not directly allocated to one cost center, Black & Veatch identified cost elements specific to certain functions and assigned them based on the factors noted in Section 4.1 to allocate the operating expenses to the cost components. Consider, for example, a treatment facility. Its purpose is to treat constituents in the wastewater flow. Therefore, the design of the treatment facility is based on meeting flow and strength characteristics.

Table 4-2 shows allocation percentages to the cost components and Table 4-3 shows the allocation of operating costs into the cost components less other revenue offsets.

City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-3
Table 4-2 Allocation Basis for O&M Expenditures
Line Common to All Customers Allocation
No. Description Volume BOD TSS Basis
(%) (%) (%)
Collection Operating Expenses
1 Salaries & Wages 100.0% 0.0% 0.0% Average O&M - Collection 2 Fringe Benefits 100.0% 0.0% 0.0% Average O&M - Collection 3 Materials & Supplies 100.0% 0.0% 0.0% Average O&M - Collection 4 Contractual Services 100.0% 0.0% 0.0% Average O&M - Collection 5 Utilities 100.0% 0.0% 0.0% Volume (C)
6 Equipment & Structures 100.0% 0.0% 0.0% Collection
7 Chemicals 100.0% 0.0% 0.0% Volume (C)
8 Water Purchases 100.0% 0.0% 0.0% Volume (C)
9 General Admin 100.0% 0.0% 0.0% Average O&M - Collection 10 FOG Program 34.0% 44.0% 22.0% Treatment
Treatment Operating Expenses
11 Salaries & Wages 71.4% 19.1% 9.5% Average O&M - Treatment 12 Fringe Benefits 71.4% 19.1% 9.5% Average O&M - Treatment 13 Materials & Supplies 71.4% 19.1% 9.5% Average O&M - Treatment 14 Contractual Services 71.4% 19.1% 9.5% Average O&M - Treatment 15 Utilities 34.0% 44.0% 22.0% Treatment
16 Equipment & Structures 34.0% 44.0% 22.0% Treatment
17 Chemicals 100.0% 0.0% 0.0% Volume (T)
18 Water Purchases 100.0% 0.0% 0.0% Volume (T)
19 General Admin 71.4% 19.1% 9.5% Average O&M - Treatment 20 FOG Program 34.0% 44.0% 22.0% Treatment
Laboratory Operating Expenses
21 Salaries & Wages 34.0% 44.0% 22.0% Average O&M - Lab 22 Fringe Benefits 34.0% 44.0% 22.0% Average O&M - Lab
23 Materials & Supplies 34.0% 44.0% 22.0% Average O&M - Lab 24 Contractual Services 34.0% 44.0% 22.0% Average O&M - Lab 25 Utilities 34.0% 44.0% 22.0% Laboratory
26 Equipment & Structures 34.0% 44.0% 22.0% Laboratory
27 Chemicals 100.0% 0.0% 0.0% Volume (T)
28 Water Purchases 100.0% 0.0% 0.0% Volume (T)
29 General Admin 34.0% 44.0% 22.0% Average O&M - Lab
30 FOG Program 34.0% 44.0% 22.0% Treatment
Environmental Compliance Operating Expenses
31 Salaries & Wages 34.0% 44.0% 22.1% Average O&M - Env 32 Fringe Benefits 34.0% 44.0% 22.1% Average O&M - Env
33 Materials & Supplies 34.0% 44.0% 22.1% Average O&M - Env 34 Contractual Services 34.0% 44.0% 22.1% Average O&M - Env 35 Utilities 34.0% 44.0% 22.0% Treatment
36 Equipment & Structures 34.0% 44.0% 22.0% Treatment
37 Chemicals 100.0% 0.0% 0.0% Volume (T)
38 Water Purchases 100.0% 0.0% 0.0% Volume (T)
39 General Admin 34.0% 44.0% 22.1% Average O&M - Env
40 FOG Program 34.0% 44.0% 22.0% Treatment Page 430 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-4
Table 4-3 Allocation of O&M Expenditures
Line Total Common to All Customers
No. Description Cost Volume BOD TSS
($) ($) ($) ($)
Collection Operating Expenses
1 Salaries & Wages 611,100 611,100 0 0
2 Fringe Benefits 299,400 299,400 0 0
3 Materials & Supplies 25,000 25,000 0 0
4 Contractual Services 26,700 26,700 0 0
5 Utilities 7,000 7,000 0 0
6 Equipment & Structures 302,600 302,600 0 0
7 Chemicals 81,500 81,500 0 0
8 Water Purchases 3,600 3,600 0 0
9 General Admin 176,800 176,800 0 0
10 FOG Program 0 0 0 0
11 Total O&M Expenses $ 1,533,700 $ 1,533,700 $ 0 $ 0
Treatment Operating Expenses
12 Salaries & Wages 2,469,300 1,762,500 471,200 235,600 13 Fringe Benefits 1,181,800 843,500 225,500 112,800
14 Materials & Supplies 60,100 42,900 11,500 5,700
15 Contractual Services 1,301,000 928,600 248,200 124,200 16 Utilities 735,000 249,900 323,400 161,700
17 Equipment & Structures 1,091,700 371,200 480,300 240,200 18 Chemicals 2,388,200 2,388,200 0 0
19 Water Purchases 13,500 13,500 0 0
20 General Admin 3,720,900 2,655,800 710,000 355,100
21 FOG Program 12,500 4,200 5,500 2,800
22 Total O&M Expenses $ 12,974,000 $ 9,260,300 $ 2,475,600 $ 1,238,100 Laboratory Operating Expenses
23 Salaries & Wages 541,300 184,200 238,000 119,100
24 Fringe Benefits 237,200 80,700 104,300 52,200
25 Materials & Supplies 23,100 7,800 10,200 5,100
26 Contractual Services 109,900 37,400 48,300 24,200
27 Utilities 1,700 600 700 400
28 Equipment & Structures 245,100 83,400 107,800 53,900 29 Chemicals 0 0 0 0
30 Water Purchases 0 0 0 0
31 General Admin 199,000 67,700 87,500 43,800
32 FOG Program 0 0 0 0
33 Total O&M Expenses $ 1,357,300 $ 461,800 $ 596,800 $ 298,700Page 431 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-5

4.2.3 Allocation of Capital Investments
In allocating capital investment for FY 2027, the proposed five-year CIP is allocated directly to cost components to the extent possible. The allocation of costs in this manner provides a basis for annual investment in wastewater system facilities. Using the CIP, the capital costs can be allocated using the total net system investment distribution across the functional cost components.

Table 4-4 shows the allocation basis for capital expenditures, and Table 4-5 shows the allocation of existing system investment serving wastewater customers. The total proposed system investment of $29.7M shown on Line 6 for the Wastewater Utility represents the five-year proposed CIP. Line 7 represents the test year’s CIP costs and Line 10 represents the net capital investment for the test year once other revenue sources are deducted.

Table 4-4 Allocation Basis for Capital Costs
Line Total Common to All Customers
No. Description Cost Volume BOD TSS
($) ($) ($) ($)
Environmental Compliance Operating Expenses
34 Salaries & Wages 346,200 117,600 152,200 76,400
35 Fringe Benefits 149,100 50,700 65,500 32,900
36 Materials & Supplies 3,100 1,000 1,400 700
37 Contractual Services 36,000 12,300 15,800 7,900
38 Utilities 1,400 500 600 300
39 Equipment & Structures 35,700 12,100 15,700 7,900
40 Chemicals 0 0 0 0
41 Water Purchases 0 0 0 0
42 General Admin 95,700 32,500 42,100 21,100
43 FOG Program 20,000 6,800 8,800 4,400
44 Total O&M Expenses $ 687,200 $ 233,500 $ 302,100 $ 151,600 Less Other Revenue
45 Miscellaneous Revenues 1,366,900 948,900 278,600 139,400 46 Other Adjustments 3,018,200 2,095,200 615,100 307,900 47 Net Operating Expenses $ 12,167,100 $ 8,445,200 $ 2,480,800 $ 1,241,100 Line Common to All Customers Allocation
No. Description Volume BOD TSS Basis
(%) (%) (%)
Capital Improvement Plan
1 Land 34.0% 44.0% 22.0% Treatment
2 Collection 100.0% 0.0% 0.0% Collection
3 Pumping 100.0% 0.0% 0.0% Pumping
4 Treatment 34.0% 44.0% 22.0% Treatment
5 General Plant 91.5% 5.7% 2.8% Average Net Plant Page 432 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-6
Table 4-5 Allocation of Capital Costs

4.3 Units of Service
To properly recognize the cost of service, each customer type receives its share of volume and strength costs. Following the allocation of costs, the total cost responsibility for each customer class is developed using unit costs of service for each cost function and subsequently assigning those costs to the customer types based on the respective service requirements of each. The number of units of service required by each customer class provides a means for the proportionate distribution of costs previously allocated to respective cost categories.
◼ Volume costs vary with the contributed wastewater flow and distribute to the customers on that basis.
◼ Strength costs are those associated with pollutant characteristics, and the Study allocated these costs to customer classes based on loadings. The pollutant loading for each customer class comes from recommendations of the State Water Resources Control Board, Revenue Program Guidelines, Appendix G and MoP27. Since the City does not do sampling, the analysis relied on industry standards used by the State of California. The strengths used in the analysis consist of:
● Single Family and Multi-Family Residential: BOD 335 mg/L, TSS 197 mg/L ● Commercial C1: BOD 175 mg/L, TSS 150 mg/L
● Commercial C2: BOD 225 mg/L, TSS 200 mg/L
● Commercial C3: BOD 450 mg/L, TSS 350 mg/L
● Schools: BOD 130 mg/L, TSS 100 mg/L
Table 4-6 shows the FY 2027 units of service for the various customer types.

4.4 Cost of Service Allocations
The Study applies the unit costs of service to each customer class’s respective service requirements to determine the cost of service for each customer class. The total unit costs of service applied to the respective requirements for each customer class results in the total cost of service for each customer class.

Line Total Common to All Customers
No. Description Cost Volume BOD TSS
($) ($) ($) ($)
Capital Improvement Plan
1 Land 0 0 0 0
2 Collection 11,525,800 11,525,800 0 0
3 Pumping 2,645,900 2,645,900 0 0
4 Treatment 11,445,100 3,891,400 5,035,800 2,517,900
5 General Plant 4,082,400 3,734,600 231,900 115,900
6 Total Capital Improvement Plan $ 29,699,200 $ 21,797,700 $ 5,267,700 $ 2,633,800 7 Capital Costs $ 12,796,000 $ 11,705,800 $ 726,800 $ 363,400 Less Other Revenue
8 Miscellaneous Revenues 405,000 370,500 23,000 11,500
9 Other Adjustments 2,462,900 2,253,100 139,900 69,900
10 Net Capital Costs $ 9,928,100 $ 9,082,200 $ 563,900 $ 282,000Page 433 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-7

4.4.1 Units Costs of Service
The FY 2027 unit cost of service for each functional cost component is simply the total cost divided by the applicable units of service, as shown in Table 4-7. On Line 3, the total costs represent the cost that rates need to recover, as demonstrated in Table 4-1, Line 14. The net O&M cost includes O&M less revenue from other sources and adjustments. Line 5 represents the unit costs for the entire wastewater system regardless of customer class.

4.4.2 Distribution of Costs of Service to Customer types Applying the unit costs to the units for each customer class produces the customer class costs. This process is illustrated in Table 4-8, in which unit costs are applied to the customer class units of service for FY 2027. The costs attributable to each customer type reflect the functional cost components described in Section 4.1. Each customer class places a burden on the system in different ways; thus, the allocation of the units is representative of this burden.

An example of the application of unit costs is shown below for illustrative purposes.

Table 4-6 Units of Service
Table 4-7 Units Cost of Service
Vol Component
Unit Cost (Table 4-7, Line 5) $ 5.81 per HCF
Consumption (Table 4-8, Line 2) 1,504,397 HCF
Total Allocated Cost [1] x [2] $ 8,734,200
Please note that the numbers within the tables are rounded, yet the calculations are done based on non-rounded values; therefore, results might vary.

Line Total Loadings
No. Description Volume BOD TSS EDUs Bills ADA
Units of Measure (HCF) (lbs) (lbs) (EDUs) (bills) (ADA) 1 Single Family 1,504,397 3,144,156 1,848,951 161,318
2 Multi Family 693,934 1,450,306 852,866 74,411
3 Commercial - C1 245,442 267,968 229,686 10,132
4 Commercial - C2 18,622 26,140 23,236 697
5 Commercial - C3 155,626 436,909 339,818 2,046
6 Schools 56,298 45,660 35,123 11,538
7 Industrial 344,629 1,738,586 317,616
8 Total System 3,018,948 7,109,725 3,647,296 235,729 12,875 11,538 Note: C1 customer HCF is greater than Table 3-2 as a few fixed only customers will be converted to flow and strength.

Line Total Common to All Customers
No. Description Cost Volume BOD TSS
1 Net Operating Expense 12,167,100 8,445,200 2,480,800 1,241,100 2 Capital Costs 9,928,100 9,082,200 563,900 282,000
3 Total Cost of Service $ 22,095,200 $ 17,527,400 $ 3,044,700 $ 1,523,100 4 Units of Service 3,018,948 7,109,725 3,647,296
HCF lbs lbs
5 Cost per Unit $ 5.81 $ 0.43 $ 0.42
per HCF per lbs per lbs Page 434 of 449
City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Cost-of-Service Analysis 4-8
Table 4-8 Distribution of Costs to Customer Types
Line Total Common to All Customers
No. Description Cost Volume BOD TSS
1 Cost per Unit $ 5.81 $ 0.43 $ 0.42
per HCF per lbs per lbs
Single Family
2 Units 1,504,397 3,144,156 1,848,951
3 Allocation of costs of service 10,852,900 8,734,300 1,346,500 772,100 Multi Family
4 Units 693,934 1,450,306 852,866
5 Allocation of costs of service 5,006,000 4,028,800 621,000 356,200 Commercial - C1
6 Units 245,442 267,968 229,686
7 Allocation of costs of service 1,635,700 1,425,000 114,800 95,900 Commercial - C2
8 Units 18,622 26,140 23,236
9 Allocation of costs of service 129,000 108,100 11,200 9,700 Commercial - C3
10 Units 155,626 436,909 339,818
11 Allocation of costs of service 1,232,500 903,500 187,100 141,900 Schools
12 Units 56,298 45,660 35,123
13 Allocation of costs of service 361,200 326,900 19,600 14,700 Industrial
14 Units 344,629 1,738,586 317,616
15 Allocation of costs of service 2,877,900 2,000,800 744,500 132,600 16 TOTAL COSTS OF SERVICE $ 22,095,200 $ 17,527,400 $ 3,044,700 $ 1,523,100Page 435 of 449 City of Yuba City, CA | Wastewater Rate Study
BLACK & VEATCH | Rate Design 5-1

5.0 Rate Design
The initial consideration in the derivation of rate schedules for wastewater service is to establish equitable charges to the customers commensurate with the cost of providing that service. While the costof-service allocations to customer classes should not be construed as literal or exact, they offer a guide to the necessity for, and the extent of, rate adjustments. Practical considerations sometimes modify rate adjustments by considering additional factors such as the extent of bill impacts, existing contracts, and historical local policies and practices.

5.1 Existing Rates
The existing rates of the Wastewater Utility consist of a fixed component in the form of a monthly service charge and a variable component. Table 3-4, presented earlier in this report, summarizes the current wastewater rates.

5.2 Proposed Rates
The costs-of-service analysis described in the preceding sections of this report provides a basis for the design of wastewater rates.

5.2.1 Monthly Fixed Charge
The Wastewater Utility provides wastewater service to over 15,160 wastewater service accounts. These customers have dedicated wastewater line connections to the wastewater systems. Therefore, wastewater charges include collection, treatment, and the cost of issuing bills. The following is a derivation of the different cost components that comprise the total charge. ◼ The residential wastewater rate consists of a fixed charge based on equivalent dwelling units. An equivalent dwelling represents one single-family residential unit. The residential class is composed of single-family and multi-family customers. To account for the fact that multi-family residential is composed of smaller dwelling units, one multi-family dwelling unit represents 0.8 of a single-family residential unit.
◼ The commercial wastewater rates are composed of a fixed charge plus a consumption charge. The fixed charge is imposed based on connection to the wastewater system. The fixed charge will be adjusted to be same fee for all commercial customers and will equal a minimum of one EDU. The strength differential will be accounted for in the consumption charge. The consumption charge is described in Section 5.2.2.
◼ The school wastewater rate consists of a fixed charge per average daily attendance of students as report by the individual schools.

Table 5-1 shows the five-year fixed charge rate schedule. FYs 2028 to 2031 are derived by applying the revenue adjustment in Table 3-9, Lines 2 to 6 to the previous year’s rate.