HomeMy WebLinkAboutCC AG PKT 2010-02-08 #M AGENDA STAFF REPORT
DATE: February 8, 2010
TO: Honorable Mayor and City Council
THRU: David Carmany, City Manager
FROM: Terry Belanger, Interim Director of Public Works
SUBJECT: 2010 WATER RATE ADJUSTMENT
SUMMARY OF REQUEST:
The City Council is asked to conduct a public hearing on the City's proposed
water rates and upon closing of the public hearing, adopt Resolution No. 5967 if
the City Council does not receive written protests against the proposed rates
from a majority of property owners of the parcels upon which the rates are to be
imposed.
BACKGROUND:
The last water rate study and water fees and charges were adopted on August
11, 2003. That study provided for annual water rate increases through FY 08 -09.
Since that time, much has changed in the water industry. Currently, Southern
California is -in.a "drought. This affects the amount of water available from the
aquifer for the City to pump and increases the amount of water to be purchased
through Municipal Water District of Orange County (MWDOC). Court decisions
affect the amount of water available for import from the Bay Delta. These factors
have significantly increased the cost of imported water to the City.
Subsequent to adoption of the 2003 rate schedule, courts ruled that portions of
Proposition 218 apply to water rates. While it is not required to have a mail ballot
vote for rate increases, the City must hold a protest hearing not less than 45 days
after mail notification of the proposed rates. If the majority of property owners of
the parcels upon which the proposed rates are to be imposed protest such rates,
they may not be adopted.
The proposed rates impose fees and charges in an equitable manner across
customer classes. The study methodology is based on recommendations from
the American Water Works Association, the professional organization for Water
Works Professionals.
Agenda Item M
Page 2
The average residential consumer in Seal Beach uses about 20 ccf (hundred
cubic feet) bi- monthly. Such average residential consumer is currently paying
the following rates:
Meter
5/8" and 3/4 ": $35.12
Commodity
Block 1 rates (per hcf: (1 to 26 hcf bi -): $2.02
Bi Monthly: $75.52
Effective July 1, 2010, such customer will pay:
Meter
5/8" and 3/4 ": $32.68.
Commodity
Block 1 rates (per hcf: (1 to 26 hcf bi -): $1.92
Bi Monthly: $71.14
Such reduction represents a 6% savings. In future years, the amount will
increase. Please refer to the resolution to see all of the proposed rates.
FINANCIAL IMPACT:
Adoption of the proposed rate structure will allow the City water utility to operate
efficiently with the lowest rates possible to water customers. Water rates do not -
impact the General Fund.
RECOMMENDATION:
It is recommended the City Council conduct a public hearing on the proposed
water rates and upon closing of the public hearing, adopt Resolution No. 5967 if
the majority of property owners of the parcels upon which the rates are to be
imposed do not protest.
SUBMITTED BY: NOTED AND APPROVED:
1 1 / 1,644 . 4,4Jc( :
Terry Belanger David Carman
Interim Director of Public orks City Manager
Attachments:
A. Resolution No. 5967
B. 2009 Water Rate Study
RESOLUTION NUMBER 5967
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
ADJUSTING WATER RATES
WHEREAS, The City of Seal Beach ( "City ") maintains a municipal water system
for the furnishing of water to water users in the City and has
previously adopted water rates per Resolution 5159 dated August
11, 2003 for the sale and distribution of water;
WHEREAS, It has always been the policy of the City Council that the City's
water utility be self- supporting from charges made by the City for
water furnished to customers and all services rendered in
connection therewith;
WHEREAS, The cost of operating and maintaining the City's municipal water
system has steadily increased in recent years;
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WHEREAS, The Municipal Water District of Orange County and the Orange
County Water District, having the, sole authority to set rates for
water purchases, replenishment assessments, , .and associated fees
for the importation of water and pumping of groundwater
respectively, delivers water to the City and passes through
increases in the cost of providing such water to the City;
WHEREAS, Seal Beach Municipal Code §9.35.020 provides for the
establishment of water rates by City Council resolution;
WHEREAS, On December 21, 2009, the City mailed notice of the proposed rate
adjustment to each water user, explaining the total amount of the
proposed rate adjustment, the amount each water user would pay,
the duration of the payments, the reason for the adjustment in
rates, and the basis upon which the rate adjustment was
calculated. The notice also provided information regarding the
public hearing on the proposed rate adjustment as well as
instructions for providing written protests regarding the proposed,
rate adjustment; and
WHEREAS, The City Council held a public hearing regarding the proposed
water rate adjustment on February 8, 2010, at which time the City
Council received public testimony and considered all objections and
protests to the proposed charges. Having received no written
protests from a majority of owners of the parcels upon which the
charges are proposed for imposition, the City Council therefore
declares its intent to adopt the proposed rate adjustment.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH
DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS
FOLLOWS:
That the following water rates are hereby established and fixed as specified in
the following schedule and in accordance with provisions below:
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Residential Bi- monthly Increasing Block Consumption Rate Calculation
FY FY FY FY
Description 2010/11 2011/12 2012/13 2013/14
Block 1 Rates (per hcf): (1 to 26 hef bi- monthly) $ 1.92 $ 2.02 $ 2.12 $ 2.23
Block 2 Rates (per hef): (27 hef and above bi- monthly) $ 2.57 $ 2.66 $ 2.77 $ 2.87
Commercial Bi- monthly Increasing Block Consumption Rate Calculation
FY FY FY FY
Description 2010/11 2011/12 2012/13 2013/14
Block 1 Rates (per hcf): See Table Below $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rates (per hcf): See Table Below $ 2.50 $ 2.59 $ 2.70 $ 2.81
Commercial Bi- monthly Increasing Block Consumption Rate Summary
' FY FY FY FY
Description 2010/11 2011/12 2012/13 2013/14
5/8" - 3/4" Meters
Block 1 Rate per ccf (0-26 ccf) $ 1.94 $ 203 $ 2.14 $ 2.24
Block 2 Rate per ccf (27+ ccf) $ 2.50 $ 2.59 $ 2.70 $ 2.81
1" Meters
Block 1 Rate per ccf (0-43 ccf) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (44+ cd) $ 2.50 $ 2.59 $ 2.70 $ 2.81
11/z• Meters
Block 1 Rate per ccf (0.88 ccf) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (89+ cd) $ 2.50 $ 2.59 $ 2.70 $ 2.81
2" Meters
' Block 1 Rate per cd (0-205 ccf) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (206+ ccf) $ 2.50 $ 2.59 $ 2.70 $ 2.81
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3" Meters'
Block 1 Rate per ccf (0-420 ccf) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (421+ ccf) $ 2.50 $ 2.59 $ 2.70 $ 2.81
4" Meters
Block 1 Rate per ccf (0 -686 cd) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (687+ ccf) $ 2.50 $ 2.59 $ 2.70 $ 2.81
6" Meters
Block 1 Rate per ccf (0 -1941 ccf) $ 1.94 $ 203 $ 2.14 $ 2.24
Block 2 Rate per ccf (1942+ cd) $ 2.50 $ 2.59 $ 2.70 $ 2.81
8" Meters
Block 1 Rate per ccf (0-4951 ccf) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per cd (4952+ ccf) $ 2.50 $ 2.59 $ 270 $ 2.81
10" Meters'
Block 1 Rate per cd (0 -7117 ccf) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (7118+ ccf) $ 2.50 $ 2.59 $ 2.70 $ 2.81
12" Meters
Block 1 Rate per cd (0 -40500 ccf per month) $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (40501+ cd per month) $ 2.50 $ 2.59 $ 2.70 $ 2.81
Consu Rate - City and All Other Classes
FY FY FY FY
Description 2010/11 2011/12 2012/13 2013/14
Rate (per hcf) $ 2.12 $ 221 $ - 231 $ 242
Meter Charge Calculation (All Customer Classes except Fire Service) ,
FY 2010 -11 FY 2011 -12 FY 2012 -13 FY 2013 -14
BI- MONTHLY METER CHARGE
Meter Size Equivalent Meter Factor
5/8" 83/4" 1.00 32.68 34.26 36.03 37.86
1" 1.67
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41.33 43.34 45.58 47.89
1.5" 3.33 62.98 66.04 69.45 72.97
2" 5.33 88.96 93.28 98.10 103.06
3" 10.67 158.23 165.92 174.49 183.32
4" 16.67 236.16 247.64 260.43 273.60
6" 33.33 452.63 474.64 _ 499.14 524.39
8" 53.33 712.40 747.04 785.60 825.34
10" 76.67 ' 1,015.46 1,064.83 1,119.81 1,176.45
12" 103.33 1,361.82 1,428.03 1,501.76 1,577.72
Fire Service Standby Fees Calculation
FY 2010 -11 FY 2011 -12 FY 2012 -13 FY 2013 -14
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Meter Size Demand Factor ' Standby Fees - Minimum Monthly Charge
' 1" 1.00 1.58 1.58 1.58 1.58
2 " 4.00 6.30 6.30 6.30 6.30
4" 16.00 25.20 25.20 25.20 25.20
• 6" 36.00 56.71 56.71 56.71 56.71
8" 64.00 100.81 100.81 100.81 100.81
10" 100.00 157.52 157.52 157.52 157.52
12" 144.00 226.83 226.83 226.83 226.83
All provisions of Resolution No. 5967 shall remain in effect except as modified -
herein.
BE IT FURTHER RESOLVED that the respective water rates set forth above
shall become effective on July 1st of each respective fiscal year.
PASSED, APPROVED and ADOPTED by the City Council of the City of Seal
Beach at a regular meeting held on the 8th day of February , 2010
by the following vote: -
AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
Mayor
ATTEST:
City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
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I, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 5967 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council at
a regular meeting held on the 8th day of February , 2010.
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City Clerk
S7296.0001.PW - Res #5967 - Water Rate Adjustment 2010 (item M) 3
CITY OF SEAL BEACH
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WATER KATE STUDY ANALYSIS
FINAL REPORT
DECEMBER 2, 2009
PREPARED FOR:
CITY OF SEAL BEACH
..SEAL ' ,
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PREPARED BY:
gj W ILLDA N
Financial Services
Oakland Office Corporate Office Other Regional Offices
1700 Broadway 27368 Via Industria - Lancaster, CA
6 Floor Suite 110 Memphis, TN
Oakland, CA 94612 Temecula, CA 92590 Orlando, FL
Tel: (510) 832 -0899 Tel: (800) 755 -MUNI (6864) Phoenix, AZ
Fax: (510) 832 -0898 Fax: (909) 587 -3510 Sacramento, CA
Seattle, WA
www.willdan.com
Table of Contents
Table of Contents i
Executive Summary 1
1. Revenue Requirements Analysis 2
Historical and Budgeted Revenues and Expenses 2
Financial Planning Analysis 4
Water Cost Analysis 4
Capital Improvement Costs 5
Revenue Analysis 7
Operating Expense Projections 7
Capital Improvement Costs 7
Debt Service 7
Reserve Funds 7
Water Revenue Requirements 7
2. Cost of Service Analysis 11
Fire Service Costs 14
Rate Design 14
Conclusion 21
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Executive
Included in this study are the findings of the water enterprise water cost analysis; estimated
revenue requirement analysis, functional costs of service analysis, water rate calculations, along
with a brief description of the assumptions used in the calculations. The study examines the City
financials for fiscal years 2008/09 through 2017/18 (the study period). The estimated annual
system revenues to be generated from proposed rate increases are derived from a comparison of .
total system revenues and costs, both operating and capital, during this 10 -year projection period.
City activities included in our analysis were gathered from the City's operating adopted budget
(FY 2009/2010) and audited financial statements from FY 2005/06, FY 2006/07 & FY 2007/08.
Base year income and expense data for both systems were obtained for fiscal year 2009/10 using
the annual budget document. •
It is our hope that this financial plan will be utilized by the City to project likely future financial
conditions for the City and provide guidance in annual budgetary decision making processes. For
the purposes of this study, we have included in our analysis fiscal years 2009/10 through
2013/14. We chose to highlight the first five fiscal years only because the nature of water costs in
today's environment is highly volatile and difficult to predict in the out years. We believe a
five -year analysis for the study is more reasonable.
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WI LLDAN
... F r anclal Services I City of Seal Beach Water Rate Analysis 1
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1. Revenue Requirements Analys
The next few sections of this study describe our Revenue Requirements Analysis.
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Historical and Budgeted Revenues and Expenses
Base year income and expense data for the water enterprise fund were obtained for fiscal year
2008/2009 using the water enterprise adopted budget for that year and audited financial
statements from fiscal years 2006 through 2008. The historic financial results and projected
budgets of the water enterprise are shown in Table 1.
Table 1. Historical Revenues and Expenditures - Fund 017
• Historical Trial Balance
Account FY FY FY
Number Description • 2005/06 2006/07 2007/08
Operating Revenues
017 - 000 -34000 Water Revenue w/o rate increase $ 2,740,284 $ 2,508,409 $ 2,866,812
017 - 000 - 35000. Residential Water w/o rate increase 1,294,350 1,430,450 1,329,530
017 - 000 -35010 Multi Residential Water w/o rate increase - - -
017 - 000 -35020 Commercial Water w/o rate increase 62,566 63,998 62,655
017- 000 -30960 Miscellaneous Revenue 300 600 505
017 - 000 -35500 Water Turn On Fee 6,826 7,080 5,418
017 - 000 -35510 Late Charge 19,432 37,419 33,183
017 - 000 -35520 Door Tag Fee 50 690 450
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017 - 000 -35530 Water Meters 3,995 4,216 2,822
017- 000 -35540 New Customer Fee -
017 - 000 -35590 Fire Service 33,024 39.756 49,898
Total Operating Revenues $ 4,160,828 $ 4,092,618 $ 4,351,274
Non- Operating Revenues
017 - 000 -30420 Interest on Investments - Operations $ . 69,574 $ 170,425 $ 211,812
017- 000 -30940 Sale of Surplus Property - Operations - - -
017- 000 -30423 Unrealized Gain /Loss on Invest - Operations - 19,660 11,370
017- 000 -36000 Gain /Loss on sale of asset - Operations - - -
Total Non - Operating Revenues $ 69,574 $ 190,085 $ 223,182 ,
Total Operating Revenues $ 4,230,402 $ 4,282,703 $ 4,574,456
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Sources: Seal Beach General Ledger Summary Trial Balance for Water Operations dated 10/15/2008; Wilidan Financial Services
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F,nan=,al services City of Seal Beach Water Rate Analysis 2
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Table 1. Historical Revenues and Expenditures - Fund 017 Continued
• Historical Trial Balance
Account FY FY FY
Number . Description 2005/06 2006/07 2007/08
Operating Expenditures
017- 900 -40001 Full -time Salaries $ 588,475 $ 639,839 $ 662,939
017 - 900 -40002 Temporary Special Pay - -
017 - 900 -40003 Overtime 20,143 44,201 51,898
017 - 900 -40004 Part-time 27,327 27,787 31,752
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017 - 900 -40008 Auto Allowance Engineering • - - - -
017- 900 -40009 Cell Phone Allowance - • -
017- 900 -40010 Deferred Comp - Cafeteria - - 3,391
017- 900 -40011 Deferred Compensation 8,687 11,489 11,635
017- 900 -40012 Pers Retirement 76,909 87,131 91,073
017- 900 -40013 Pars Retirement 362 360 429
017 - 900 -40014 Medical lnsurance 69,840 83,464 . 93,014
017- 900 -40015 Dental lnsurance 4,614 - 37 '
017 - 900 -40017 Medicare 6,225 7,795. 8,588
017 - 900 -40018 Life and Disability 7,928 . - 9,219
017 - 900 -40020 Uniform Pay - - -.
017 - 900 -40022 Flexible Spending - Cafeteria - 9,054 19 .
017- 900 -40025 Pars Admin Expense 301 309 359
017 - 900 -40030 Unemployment 760 - -
017- 900 -40100 Office Supplies 27,027 27,161. 25,545
017-900-40300 Membership and Dues 602 633 704
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017- 900 -40400 Training and Meetings 4,534 3,926 4,629
017 - 900 -40500 Bldg /grounds Materials - -
017- 900 -40700 Equipment/materials 87,874 97,450 100,178
017- 900 -40800 Special Departmental 34,798 33,956 38,194
017- 900 -40900 • Depreciation 150,934 88,475 61,155
017 - 900 -41000 Telephone 7,124 7,296_ • 7,764
017- 900 -41010 Gas 102,726 ' 86,732 103,904
017 - 900 -41020 Electricity 99,899 131,648 107,283
017- 900 -42000 Rent/lease Equip - - -
017- 900 -43000 Auto Allowance 536 • 540 - -
017- 900 -44000 Contract Prof. Svcs 95,787 181,629 • 168,815
017- 900 - 44050 Water Overhead 318,148 ' 324,500 . 324,500
017- 900 -45000 Intergovernmental Water Purchases 1,280,730 • 1,326,424 1,388,641
• 017- 900 -47888 Debt Service - -
017- 900 -47999 Interest Payments 9,156 7,576 • 7,145
017- 900 -48000 Building Imp. - - -
• 017 - 900 -48050 Machinery And Equip -
• 017 - 900 -48075 Vehicles 737 - 250
017- 900 -49710 Legal Services - Water - • - -
Total Operating Expenditures $ 3,032,183 $ 3,229,376 $ 3,303,059
Net Income (Loss) $ 1,198,219 $ 1,053,327 $ 1,271,396
Sources: Seal Beach General Ledger Summary Trial Balance for Water Operations dated 10/15/2008; Willdan Financial Services
'' WI LLDAN C ity of Seal Beach Water Rate Analysis 3
FinwIcial Services
Financial Planning Analysis
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The financial model addresses both operating and non- operating revenues and costs over the
next five fiscal years beginning in FY 2009/10. The fiscal year 2009/10 budget figures were used
as the base year and inflated based on appropriate measures as determined by the City's
experience and our industry research and experience. Table 2 presents the assumed escalation
factors and other assumptions utilized to project water system revenues and expenses over the
study planning period. These assumptions will be centrally located within the final rate model to
allow City staff the ability to easily update the model in the future as conditions and assumptions
change. Please note that we assume no customer growth over the study period. Because the
City is fairly developed, and will likely result in a 0.00% increase in annual account growth and
resulting rate revenues.
Table 2. Water Rate Analysis Assumptions
FY FY FY FY FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
Projected Growth Rate 0.000% 0.000% 0.000% 0.000% 0.000%
Water Sales (af) 4,200 4,200 4,200 4,200 4,200
BPP % 1 62% 62% 62% 62% 62%
Annual MWDOC Water Cost/AF 2 $ 709.00 $ 878.00 $ 921.00 $ 966.00 $ 1,013.00
Annual OCWD Replenishment Assessment/AF 3 $ 249.00 $ 261.45 $ 274.52 $ 288.25 $ 302.66
MWDOC Retail Meter Connection Fee $ 31,719 $ 33,305 $ 34,970 $ 36,719 $ 38,555
Number of Meters 4 5,116 5,116 5,116 5,116 5,116
Cost/Meter 5 $ 6.20 $ 6.51 $ 6.84 $ 7.18 $ 7.54
MWDOC Capacity Charge $ 35,536 $ 37,313 $ 39,178 $ 41,137 $ 43,194
MWDOC RTS 6 $ 22,833 $ 23,974 $ 25,173 $ 26,432 $ 27,753 •
Expenditure Growth Rate 5.00% 5.00% 5.00% 5.00% 5.00%
CCI 7 4.46% 4.46% 4.46% 4.46% 4.46%
1. Source for BPP% is OCWD e-mail to City on 2/27/09.
2. Each fiscal year projection of average of respective calendar years 2009 and 2010. These rates reflect MWD staff Option 2
rates (allocation scenario).
3. Per OCWD e-mails on 2/27/09 and 3/3/09, FY 09/10 RA is $249/af and to project annual increases of 5 %.
4. Source for number of meters: City Staff.
5. Source for Cost per Meter and Cost per CFS: MWDOC; Increase both by 5 %.
6. Seal Beach share of Total MWDOC Sales.
7. Source is ENR Cost Indexes in LOS ANGELES (1978 - 2009).
Sources: City of Seal Beach; FY 2008/09 Annual Budget; MWDOC; OCWD; Engineering News Record; Wilidan Financial Services.
Water Cost Analysis
Table 3 illustrates the analysis used to project the City's water cost over the next five years.
Table 3 shows the water cost projections using MWDOC rates that reflect MWD staff Option 2
(allocation scenario) provided by the City. In today's environment, water purchased from the
wholesale market requires significantly increasing costs. Therefore, we believe a large projected
WI LLDAN
Pinancial Service City City of Seal Beach Water Rate Analysis 4
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annual increase in water costs is a conservative means to. plan the future rate schedule for the
City. The assessment for untreated replenishment water per acre foot via OCWD was projected
• using a rate of five percent (5 %).
Table 3. Projected Water Cost Calculation
•
FY FY FY FY FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
• Total Import Water (MWDOC) in acre feet • 1,596 1,596 1,596 1,596 1,596
Average MWDOC Treated Full Service Water Rate ($ /AF) 709.00 878.00 921.00 966.00 1,013.00
• Subtotal Import Water Cost $ 1,131,564 $ 1,401,288 $ 1,469,916 $ 1,541,736 $ 1,616,748
MWDOC Retail Meter Connection Fee / ��'" $ 31,719 $ 33,305 $ 34,970 $ 36,719 $ 38,555
MWDOC Capacity Charge 35,536 37,313 39,178 ' 41,137 43,194
MWDOC RTS" 22,833 23,974 25,173 26,432 - 27,753
Subtotal Import Meter, Capacity S RTS Cost $ ' 90,088 $ 94,592 $ 99,322 $ 104,288 $ • 109,502
Total Import Water Cost $ 1,221,652 $ 1,495,880 $ 1,569,238 $ 1,646,024' $ 1,726,250
Total Groundwater in acre feet 2 - 2,604 2,604 2,604 2,604 2,604
OCWD Replenishment Rate (RA) ($ /AF) 3 249.00 261.45 274.52 288.25 302.66
Total Groundwater Replenishment Cost $ 648,396 $ 680,816 $ 714,857 $ 750,599- $ 788,129 '
.Total Groundwater and Import Water Costs $ 1,870,048 $ 2,176,696 $ 2,284,094 $ 2,396,623 $ 2,514,380
. 1. Each fiscal year projection of average of respective calendar years 2009 and 2010. These rates reflect MWD staff Option 2 rates (allocation scenario).
2. Reflects 62% BPP. - 3. Increased annually at five percent (5 %). .
Sources: City of Seal Beach; MWDOC; OCWD.
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Capital Improvement Costs
The City maintains an inventory of Water System Capital Improvement Projects (CIP) for the
funding of annual water - related capital projects. The values used in this analysis are based on
cost estimates provided by City staff.
Table 4 presents the water - related CIP over the five -year planning period (note that it is assumed •
that all CIP costs are not driven by growth demands and will be funded on a "pay -as- you -go
basis ".
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41/I t_LDAN City of Seal Beach Water Rate Analysis 5
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Revenue Analysis
Our evaluation of future revenue required to meet the Water Fund's expenses include the four
areas of: operating expenses, capital improvement costs, requirements for debt service, and the
maintenance of reserve fund balances. The following sections discuss the impact of these four
factors on the water enterprise required revenue.
•
Operating Expense Projections
For the purpose of determining annual revenue needed to set future water rates, we used a
projection period of five years. During this period (FY 2009/2010 through FY 2013/2014 ),, costs
are assumed to increase and customer accounts are assumed to stay level. Therefore, the study
assumes a customer growth' rate of zero percent (0.00 %). In reviewing the historical expenditure
data, we have found that costs have not increased in a readily identifiable manner, therefore we
recommend using an expenditure and personnel growth rate of five percent (5 %) to project the
future costs of the system.
Capital Improvement Costs
As discussed above, Table 4 presents the CIP over the five -year planning period.
Debt Service
The water enterprise currently is making payments on a Economic Development Administration
Loan in the amount of $288,000. The water enterprise is making payments in the amount of
$17,074 annually. When an Agency is considering incurring additional debt, debt service
coverage ratios are established and must be met through adequate revenue streams. The range
of typical ratios is one hundred fifteen percent (115 %) to one hundred thirty -five percent (135 %),
depending on the credit quality of the issuer.
Reserve Funds
According to the Audited Financial Statements as of June 30, 2008, the Water Enterprise Fund
#017 had a reserve fund balance of $5,657,066. We recommend that the City adopt a policy of . .
maintaining a designated balance in the operating fund of three months (90 days) of operating
expenses in order to satisfy expense obligations as cash flow fluctuates during the year.
Water Revenue Requirements
Table 5 depicts the annual revenue requirements of the water enterprise for each year of the
study period. Fiscal Year 2009/2010 is used as the base year for the study. The study assumes a
customer growth rate of zero percent (0.00 %) and an expenditure and personnel growth rate of
five percent (5 %) to project the future costs of the system. The Desired Operating Reserve Fund
Balance is set at ninety (90) days or twenty -five percent (25 %) of O &M expenses. The beginning
operating fund balance for fiscal year 2009/2010 is estimated at $5,657,066 (line 118).
WI LLDAN
s£r:■cos 'City of Seal Beach Water Rate Analysis 7 _ _
Table 5 includes annual revenues projected to decreased by thirty -five percent (35 %) for the
remaining five months of fiscal year 2009/2010; followed by an increase of twenty -six and a
quarter percent (26.25 %) in fiscal year 2010/2011; followed by a projected revenue increase of
four and eight tenths percent (4.80 %) in fiscal year 2011/2012; followed by a revenue increase of
five and one tenth percent (5.10 %) in fiscal year 2012/2013; finally in fiscal year 2013/2014
system revenues will be increased by five percent (5 %). These projected decrease and increase
will allow the City to meet projected department expenditures, the projected operating and non-
operating expenses, and fund balances based on the revenues generated from rate and fee
adjustments.
Row 11 of this table shows the revenue generated using current rates and fees; a zero percent
(0.0 %) population growth rate was used in the projection of these rates and fees. These rates and
fees produce enough revenue to maintain a healthy operating fund balance. The section below
the current revenues (rows 6 through 13) incorporates the revenue generated by the proposed
revenue decrease and increases. As the table illustrates, water service charge revenue is
sufficient to maintain a positive cumulative fund balance throughout the study period.
Total Operating Expenses are shown in row 64. Net Income is found in row 95 with the Operating
Fund Balance detailed near the bottom of the table in row 103.
A line for Desired Operating Fund Balance (row 101) is also included in the table. This shows the
minimum amount of funds the City would like to maintain in its operating fund, to address annual
cash flow requirements that may arise for the department.
•
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WWI LLDAN
• Financial Services. City of Seal Beach Water Rate Analysis 8
Table 5. City of Seal Beach Water Revenue Requirements Analysis - Operations
FY FY FY FY FY .
Description . ,. • 2009/10 2010/11 2011/12 2012/13 2013/14
1 Operating Revenue
2 Water Revenue w/o rate increase $ 2,866,812 $ 2,866,812 $ 2,866,812 $ 2,866,812 $ 2,866,812
3 Residential Water w/o rate increase 1,329,530 1,329,530 1,329,530 1,329,530 1,329,530
4 Multi Residential Water w/o rate increase - - -
5 Commercial Water w/o rate increase 62,655 62,655 62,655 62,655 62,655
6 Total Operating Revenue $ 4,258,997 $ 4,258,997 $ 4,258,997 $ 4,258,997 $ 4,258,997
•
• 7 Capital Revenue
8 Water Capital Charge w/o rate increase 1,381,833 1,381,833 • 1,381,833 1,381,833 1,381,833
9 Fire Service Charge - - - -
10 Total Capital Revenue $ 1,381,833 $ 1,381,833 $ 1,381,833 $ 1,381,833 $ 1,381,833
•
11 Total Revenue $ 5,640,830 $ 5,640,830 $ 5,640,830 $ 5,640,830 $ 5,640,830
12 Additional Revenue Required
Revenue
13 Year Increase Months Effective
14 2008/09 0.00% 0 - - - - -
• 15 2009/10' - 35.00% / 5 (822,621) (1,974,290) (1,974,290) (1,974,290) (1,974290)
16 2010/11 26.25% 12 - 962,467 962,467 962,467 962,467
17 2011/12 4.80% 12 - - 222,192 222,192 222,192
18 2012/13 5.10% 12 . . - - - 247,411 247,411
19 2013/14 • 5.0O% • 12 - - - • - 254,930
20 2014/15 5.25% 12 - - - -
21 2015/16 6.00% 12 - - - - -
22 2016/17 4.75% 12 - - - - -
23 2017/18 • 4.85% 12 - - - - -
24 Total Additional Operating Revenue (822,621) (1,011,824) (789,632) (542,220) (287,290)
25 Total Required Revenue $ 4,818,209 $ 4,629,006 $ 4,851,198' $ 5,098,609 $ 5,353,540 •
26 Operating Expenses
27 Full -time Salaries $ 730,890 $. 767,435 $ 805,806 $ 846,097 $ 888,402
28 Temporary Special Pay • • - - - - -
29 Overtime 57,217 , 60,078 63,082 66,236 69,548
30 Part-time • 35,006 36,757 38,595 40,524 42,551
31 Auto Allowance Engineering - - - - -
32 Cell Phone Allowance - - - - - .
' • 33 • Deferred Comp - Cafeteria 3,739 3,926 4,122 4,328 4,545
1 .
34 Deferred Compensation • 12,827 13,468 14,142 • 14,849 15,591
35 Pers Retirement 100,408 105,428 110,700 116,235 122,047
36 Pars Retirement 473 497 522 548 575
37 Medical lnsurance 102,548 107,675 • 113,059_ 118,712 124,648 .
38 Dentallnsurance 1,628 1,710 1,795 1,885 1,979
39 Medicare - 9,468 9,941 10,438 10,960 11,508 •
• 40 Life and Disability 10,164 ' 10,672 11,206 11,766 12,354
41 Uniform Pay - ' - - - -
42 Flexible Spending - Cafeteria 3,176 3,334 ' 3,501 3,676 3,860
43 Pars Admin Expense 395 415 436 '.458 481
44 Unemployment I • 266 279 293 308 ' 323 •
45 Office Supplies • 27,907 29,302 30,767 32,305 33,921 •
46 Membership and Dues 776 815 855 898 943
47 Training and Meetings 4,581 4,810 5,051 5,303 5,568 •
48 Bldg /grounds Materials . - - - . - •
. 49 Equipment/materials 110,446 115,968 121,767 . 127,855 - 134,248
50 Special Departmental - 42,109 44,214 46,425 48,746. 51,184
51 Depreciation • 105,197 110,457 115,980 121,779 127,868 -
. 52 Telephone 8,560 8,988 9,438 9,909 10,405
53 Gas . 114,554 120,281 126,295 132,610 139,241 •
54 Electricity 118,279 124,193 130,403 136,923 143,769
55 Rent/lease Equip - - - - -
• 56 Auto Allowance 377 395 415 436 458
57 Contract Prof. Svcs 156,181 163,990 172,189 180,798 189,838
58 Water Overhead 357,761 375,649 394,432 414,153 434,861
• 59 Intergovernmental Water Purchases • 1,870,048 2,176,696 2,284,094 2,396,623 2,514,380
60 Building Imp. - - - - -
61 Machinery And Equip - - - - -
62 Vehicles 345 363 381 400 420
. 63 Legal Services - Water • - - - - - -
64 Total Operating Expenses $ 3,985,326 $ 4,397,739 $ 4,616,189 $ 4,845,323 $ 5,085,514
W ILLDAN -
Rnancial Services I City of Seal Beach Water Rate Analysis 9 _
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Table 5. City of Seal Beach Water Revenue Requirements Analysis - Operations
FY FY FY FY FY .
Description 2009/10 2010/11 2011/12 2012/13 2013/14
65 Capital Expenses '
66 Contract Professional Services $ 120,620 $ 120,620 $ 120,620 $ 120,620 $ 120,620
67 Depreciation 357,703 357,703 357,703 357,703 ' 357,703
68 Total. Capital Expenses $ 478,322 $ 478,322 $ 478,322 $ 478,322 $ 478,322
69 Net Operating Income (Loss) $ 354,560 $ (247,055) $ (243,313) $ (225,036) $ (210,296)
70 Debt Service
71 Debt Service $ 17,074 $ 17,074 $ 17,074 $ 17,074 $ 17,074
72 Total Debt Service 17,074 17,074 17,074 17,074 17,074
73 Debt Coverage Ratio 39.61 1.58 1.69 1.77 1.65
74 Non -Rate Revenue
75 Miscellaneous Revenue 505 • 505 • 505 505 505
76 WaterTum On Fee 5,418 5,418 5,418 5,418 5,418
77 Late Charge 33,183 33,183 33,183 1 33,183 33,183
78 Door Tag Fee 450 450 450 450 450
79 Water Meters 2,822 2,822 2,822 2,822 2,822
80 New Customer Fee - _
81 Fire Service . 49,898 49,898 49,898 49,898 49,898
82 Total Non -Rate Revenue 92,277 92,277 92,277 92,277 92,277
83 Non - Operating Revenue - Operations .
84 Interest on Investments - Operations $ 37,190 $ 47,868 $ 48,835 $ 49,850 $ . 44,254
85 Unrealized Gain/Loss on Invest - Operations 10,343 10,343 10,343 10,343 10,343
86 Sale of Surplus Property - Operations _ - _ - -
87 Gain/Loss on sale of asset - Operations - - - _ -
88 Total Non- Operating Revenue - Ops $ 47,533 $ 58,212 $ 59,179 $ 60,193 $ 54,598
89 Non - Operating Revenue - Capital
90 Interest on Investments - Capital $ 176,102 $ 107,102 $ 93,452 $ 64,802 $ 42,903
91 Interest on Investments - Repair & Replacement 16,097 26,828 37,559 48,290 59,021 '
92 Unrealized Gain /Loss on Invest - Capital 11,050 11,050 11,050 11,050 11,050
93 . Sale of Surplus Property - Capital _ - -
94 Total Non - Operating Revenue - Cap $ 203,248 $ 144,980 $ 142,061 $ 124,142 $ 112,973
• 95 Net Income (Loss) $ 680,545 $ 31,339 $ 33,129 $ ' 34,502 $ 32,477 .
96 O &M Fund Information
97 Beginning Operating Fund Balance $ 899,401 $ 1,579,945 $ 1,611,284 $ 1,644,413 $ 1,678,915
98 Deposit(Withdrawals) 680,545 31,339 33,129 34,502 32,477
99 Sub Total O &M Fund $ 1,579,945 $ 1,611,284 $ 1,644,413 $ 1,678,915 $ 1,711,392
100 Reserve Balance Percent of O &M 25% 25% 25% 25% 25%
101 Desired Operating Reserve Balance $ 996,332 $ 1,099,435 $ 1,154,047 $ 1,211,331 $ 1,271,379
102 Excess (Deficit) O &M / Excess to CIP Fund - - - - 440,014
103 Ending O &M Fund Balance $ 1,579,945 $ 1,611,284 $ 1,644,413 $ 1,678,915 ' $ 1,271,379
104 Capital Improvement Projects • .
105 Capital Projects Fund Balance $ 7,920,079 $ 3,820,079 $ 3,320,079 $ 2,910,079 $ 1,850,093
106 CIP Costs (4,100,000)
(500,000) (410,000) (1,500,000) • (400,000)
107 Total Capital Improvement Projects funded by R &R fund $ - $ - $ - $ • $ -
108 Repair & Replacement Reserve Fund
109 Beginning R &R Fund Balance $ 357,703 $ 715,406 $ 1,073,108 $ 1,430,811 $ 1,788,514 •
110 (Withdrawals for CIP Projects)
-
111 Deposit (Depreciation) 357,703 357,703 357,703 357,703 357,703
112 Ending Repair & Replacement Reserve Fund $ 715,406 $ 1,073,108 $ 1,430,811 $ 1,788,514 $ 2,146,217
113 Capital Projects Fund
114 Beginning CIP Fund Balance $ 7,920,079 $ 3,820,079 $ 3,320,079 $ 2,910,079 $ 1,410,079
115 (Withdrawals for CIP Projects) (4,100,000) (500,000) (410,000) (1,500,000), (400,000)
116 Deposits excess O &M Funds - - - - 440,014
117 Ending Capital Projects Fund $ 3,820,079 $ 3,320,079 $ 2,910,079 $ 1,410,079 $ 1,450,093 '
Sources: City of Seal Beach; Willdan Financial Services
WILLDAN
Financial Se res I City of Seal Beach Water Rate Analysis
r 10
.v Cost of Service'Analysis
A cost of service analysis converts enterprise - related costs incurred by user classes for which rates
can be developed. The cost of service study for City of Seal Beach is performed in three basic
steps.
The first step is called functionalization. Functionalization categorizes cost data in terms of
functions performed by a water utility system. The functions identified in this study include operating
expenses, debt service, and capital projects.
• The second step classifies operating and non - operating expenses of the water facilities to the cost
components of volume (base use), extra - capacity, customer billing /administration, and meters &
services. This approach is referred to as the base -extra capacity method and is recommended by
the American Water Works Association as an appropriate means of equitably allocating costs to
}
customer classes. The cost components are defined as follows:
• Volume, or Base Costs: Volume or base costs vary with the consumption
of water by users over a specified period of time and relates to the average
annual rates of water demand by system users.
• Extra - Capacity Costs: Capacity costs vary with the demand, or the rate of
flow, of water used by user classes of service in excess of average
demand, otherwise known as peak demand.
• Customer Costs: Customer costs vary with the number of customers, or •
the addition of customers, served by a water system. These costs are
• typically fixed utility expenses, regardless of customer consumption.
• Meters & Services: Costs that are related to the water meters such as
maintenance, repair, installation and meter reading.
Table 6 presents the peaking factors for each of these customer classes. The final step in the •
functionalization process involves classifying each expense by a certain factor such as base costs,
average day /maximum day demand peaking factors and fixed customer costs. Table 7 presents the -
allocation of each expense component (operations, debt service and capital projects) based on its ,
• functional category of base, extra - capacity, customer, or meter & services costs.
Table 6. Customer Peaking Factors •
Customer Class Mean Usage Max Usage Peak Factor
Residential 554,226 755,622 1.36 • •
Commercial 1,063,652 1,505,771 1.42 •
• City 112,603 139,104 1.24
•
1. Customer class peaking factors were determined by taking the ratio of each customer
class' average month consumption to the customer's peak month consumption.
WI LLDAN
Financial Services I City of Seal Beach Water Rate Analysis 11 _
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Table 7. Classification of Water Costs by Function
Commodity Costs Customer Costs
10 Yr Avg Rev. Meters &
Description Req. Base Max Day Customer Billing Services Basis of Classification
OPERATING EXPENSES •
Full -time Salaries $ 875,529 $ 291,843 $ - . $ 291,843 $ 291,843 33% Base/Billing/Meters
• Temporary Special Pay - - . - - 33% Base /Billing /Meters
Overtime 68,540 22,847 - 22,847 22,847 33% Base/Billing /Meters
Part -time 41,934 13,978 - 13,978 13,978 33% Base/Billing /Meters
Auto Allowance Engineering - - - - - 33% Base/Billing /Meters
Cell Phone Allowance - - - - 33% Base /Billing /Meters
Deferred Comp - Cafeteria 4,479 1,493 - 1,493 1,493 33% Base /Billing /Meters
Deferred Compensation 15,366 5,122 - 5,122 5,122 33% Base/Billing/Meters
Pers Retirement 120,278 40,093 - 40,093 40,093 33% Base/Billing/Meters
Pars Retirement 567 189 - 189 189 33% Base/Billing /Meters
Medical Insurance 122.842 40,947 - 40,947 40,947 33% Base/Billing/Meters
Dental Insurance 1,950 650 - 650 650 33% Base/Billing/Meters
Medicare - 11,342 3,781 - 3,781 - 3,781 33% Base/Billing/Meters
Life and Disability 12,175 4,058 - 4,058 4,058 33% Base /Billing /Meters
Uniform Pay - - - - 33% Base/Billing /Meters
Flexible Spending - Cafeteria 3,804 1,268 - 1,268 1,268 33% Base/Billing /Meters
Pars Admin Expense 474 • 158 - 158 158 33% Base /Billing /Meters
Unemployment 319 106 - 106 / 106 33% Base/Billing/Meters
Office Supplies 33,429 - - • 33,429 - 100% Customer Billing
Membership and Dues 929 310 - 310 310 33% Base/Billing /Meters
Training and Meetings 5,488 1,829 • - 1,829 1,829 33% Base/Billing/Meters
Bldg /grounds Materials - - - - 33% Base /Billing /Meters
Equipment/matenals 132,302 44,101 - 44,101 44,101 33% Base/Billing/Meters
Special Departmental 50,442 16,814 = 16,814 16,814 33% Base/Billing /Meters
Depreciation 126,015 31,504 31,504 31,504 31,504 25% across
Telephone • 10,254 . - 10,254 - 100% Customer Billing
Gas 137,223 72,220 65,004 - - Avg /Max Day
Electricity 141,686 74,569 67,118 - - Avg /Max Day
Rent/lease Equip - - - - - 33% Base /Billing/Meters
Auto Allowance 451 150 - 150 150 33 %Base /Billing /Meters
Contract Prof. Svcs 187,088 62,363 - 62,363 62,363 33% Base/Billing/Meters
Water Overhead 428,560 142,853 - 142,853 142,853 33% Base/Billing /Meters
Intergovernmental Water Purchases 2,418,415 2,418,415 - - - 100% Base
Building Imp. - - - - - 33% Base/Billing/Meters
Machinery And Equip - - - - - - Avg /Max Day
Vehicles • 414 138 - 138 138 33% Base /Billing /Meters
Legal Services - Water - - - 33% Base/Billing /Meters
Total Operation Expenses $ 4,952,296 $ 3,291,798 $ 163,625 $ 770,278 $ 726,595
CAPITAL EXPENSES
Contract Professional Services $ 120,620 $ 40,207. $ - $ 40,207 $ 40,207 33% Base /Billing /Meters •
Depreciation 357,703 89,426 89426 89426 89.426 25% across
Total Capital Expenses $ 478,322 $ 129,632 $ 89,426 $ 129,632 $ 129,632
DEBT SERVICE
Debt Service $ 17,074 8,986 8,088 - - Avg /Max Day
Total Debt Service $ 17,074 $ 8,986 $ 8,088 $ - $ • -
CAPITAL IMPROVEMENT COSTS
CIP Costs $ 1.357.529 714,459 643,070 - • Avg /Max Day
Total CIP Costs $ 1,357,529 $ 714,459 $ 643,070 $ • • $
■
TOTAL COST ALLOCATION $ 6,805,222 $ 4,144,876 $ 904,209 $ 899,910 $ 856,227
ALLOCATION PERCENTAGES 100.0% 60.9% 13.3% 131% 12.6%
LESS: NONRATE REVENUES
Miscellaneous Revenue $ 505 $ 308 $ 67 $ 67 $ 64 As % of Total Cost Allocation
Water Tum On Fee 5,418 3,300 720 717 682 As % of Total Cost Allocation
Late Charge 33,183 20,211 4,409 4,388 4,175 As % of Total Cost Allocation
Door Tag Fee 450 274 60 60 57 As % of Total Cost Allocation
Water Meters 2,822 1,719 375 373 355 As % of Total Cast Allocation
New Customer Fee - - . - - As % of Total Cost Allocation •
Fire Service 49,898 ' 30,392 6,630 6,598 6,278 As % of Total Cost Allocation •
Interest on Investments - Operations 77,595 47,261 10,310 10,261 9,763 As % of Total Cost Allocation
Unrealized Gain/Loss on Invest - Operatior 10,343 6,300 1,374 1,368 1,301 As % of Total Cost Allocation
Sale of Surplus Property - Operations - - - - - As % of Total Cost Allocation
Gain /Loss on sale of asset - Operations - - - - - As % of Total Cost Allocation
Interest on Investments - Capital_ 100,764 61,372 13,388 13,325 _ 12,678 As % of Total Cost Allocation
Unrealized Gain/Loss on Invest - Capital 11,050 6,730 1,468 1,461 1,390 As % of Total Cost Allocation
• Sale of Surplus Property- Capital - - - ' - - As % of Total Cost Allocation
Total Non Rate Revenues $ 292,028 $ 177,866 $ 38,802 $ 38,617 $ 36,743
TOTAL AVERAGE REVENUE REOUIREMEN" $ 6,513,193 $ 3,967,009 $ 865,407 $ 861,293 $ 819,484
FUNCTIONALIZATION FACTOR 100.0% 60.9% 13.3% 13.2% 116%
Sources: City of Seal Beach, WFS
Using the water demand factor and functionalization analyses, we allocated the system revenue
requirements to each proposed customer class by base, extra capacity, customer and meter
categories. Table 8 presents this data and the results. Each customer class' share of water system
needs are appropriately identified and become the basis for the final step of rate design. We utilize
WILLDAN
Financial Services City of Seal Beach Water Rate Analysis 12
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the factors to allocate costs between the Residential and All Other Classes, particularly for the
. consumption- related costs: Table 9 presents breakdown of the Block 2 penalty water costs that are .
allocated to each customer class. Due to the recent water shortages in Southern California,
Metropolitan Water District (MWD) has determined the amount of water to be allocated to each
agency. If an agency exceeds its allocation from MWD, it will charge a penalty of $1,889 per acre
foot for the amount over the Agency's allocation. •
Table 8. Allocation of Water Costs to Customer Classes
•
Total
Max Customer Meters & Revenue
Customer Class Base Day Billing Services Requirement
• Residential 1,290,013 276,859 577,364 549,337 2,693,572
City • 105,530 20,522 5,323 5,065 - 136,439
Commercial 1,503,166 334,975 46,663 44,398 1,929,203
Total $ 2,898,708 $ 632,356 $ 629,350 $ 598,800 $ 4,759,214
•
Percentage Totals
Residential 27.11% 5.82% '12.13% 11.54% 56.60%
City 2.22% 0.43% 0.11% 0.11% 2.87%
Commercial 31.58% 7.04% • 0.98% • 0.93% 40.54%
Total 60.91% 13.29% 13.22% 12.58% 100.00%
Sources: City of Seal Beach, WFS.
•
Table 9. Penalty Water Cost Calculation
FY FY FY FY FY
2009/10 2010/11 2011/12 2012/13 2013/14
Acre feet of Allocation 4,200 4,200 4,200 4,200 4,200
Exceed Allcoation by five percent 5.00% 5.00% 5.00% 5.00% 5.00%
Total Acre Feet Over Allocation 210 210 - 210. • 210 210
Penalty Cost per Acre Foot $ 1,889 $ 1,889 $ 1,889 $ 1,889 $ 1,889
Total Penalty Water Cost $ 396,690 $ 396,690 $ 396,690 $ 396,690 $ 396,690
FY FY FY • FY FY
Customer Class 2009/10 2010/11 2011/12 2012/13 2013/14
Residential $ 173,329 $ 173,329 $ 173,329 $ 173,329 $ 173,329
Commercial 207,523 207,523 207,523 207,523 207,523
City 15,838 15,838 15,838 15,838 15,838
Total Penalty Water Costs $ 396,690 $ 396,690 $ 396,690 $ 396,690 $ 396,690
Sources: City of Seal Beach, WFS.
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WI LLDAN
t Financial Services I City of Seal Beach Water Rate Analysis 13 _
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Fire Service Costs •
Due to the absence of actual fire service costs, various assumptions were made to arrive at
annual fire service costs. It is our recommendation that the City begin tracking costs associated
to fire service. We recommend reevaluating the Monthly Fire Service Standby Fees once the
City has tracked these costs for a specified period of time. To determine annual fire service
costs, we used the current number of meters by size of connection and multiplied by the current
monthly fire service standby fees. Table 10 presents calculation of the Projected Annual Fire
Service Costs.
Table 10. Projected Fire Service Cost Calculation
Projected
Number in Current Monthly Annual Fire Charge per
Size of connection, in. Service Charge Service Costs equivalent
1 1 $
2 1 - •
4 18 47.50 10,260.00
6 14 71.25 11,970.00
8 16 95.00 18,240.00
10 13 118.75 18,525.00
12 0 142.50 0
Totals $ 58,995.00 $ 18.90
Sources: City of Seal Beach, Willdan Financial Services.
Rate Design
Rate design is the final step in the Cost of Service analysis. Following the functionalization of water
utility expenditures to the classification factors, these expenditures are further distributed to
customer classes by the appropriate allocation factors. The result is a meter charge calculation and
customer charge to distribute the proportionate fixed costs of running the City's water system to
each meter size category as well as commodity or consumption -based rate for each customer class
(Residential and All Other Classes). Based on the allocated customer - related costs and the number .
of meter equivalents within the City, a meter charge was identified for each customer's meter size
on their property. We used AWWA meter equivalency factors to calculate the meter charge for each
size of meter (these were utilized in the last rate analysis). Table 11 presents the number of
projected equivalent meters for the City. The lack of growth in the number of equivalent meters is
based on the zero percent (0.00 %) customer growth rate. The meter count is based upon the
average number of equivalent meters per billing period during FY 2008. Table 12 presents the
number of projected equivalent fire service connections by size of connection for the City. Table 13
presents the projected annual water consumption by customer class for the water utility. The
projected annual water consumption remains level throughout the study period due to a zero
percent (0.00 %) customer growth rate. Table 14 presents the proposed bi- monthly meter charges
by meter size per account for the City. Table 15 presents the proposed monthly fire service standby
fees by size of connection.
WILLDAN
Financial Services I City of Seal Beach Water Rate Analysis 14
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Tables 16, 17, 18, and 19 present the commodity or consumption -based rate design by customer
class. This analysis factors the base and extra capacity costs of water service to each customer
class and divides the data into the water consumption figures for each class. The result is a
variable rate per unit of water consumed by each customer. Table 17 presents estimated residential
bi- monthly water bills in comparison to current bi- monthly water bills.
Table 11. Meters and Equivalent Meters by Customer Class
Number of Meters by Size
Description 518" & 314" 1" 1.5" 2" 3" 4" 6" 8" 10" 12" Total
Flow per Meter Size (gpm) ' 30 50 100 160 320 500 1000 1600 , 2300 3100
Equivalent Meter Factor 1.00 1.67 3.33 5.33 10.67 16.67 33.33 53.33 76.67 103.33
Active Meters _ 4,117 660 111 189 15 16 6 1 - 1 5,116
Equivalent Meters 4,117 1,100 370 1,008 160 267 200 53 - 103 7,378
Sources: City of Seal Beach - -
Table 12. Fire Service Equivalent Connections
Size of
connection, Number in Demand Eqivalent
•
' in. Service Factor 1 Connections
1 1 1.00 1
2 1 4.00 4
4 18 16.00 -288
6 14 36.00 504
8 16 64.00 1,024
10 13 100.00 1,300
12 0 144.00 0
Totals 63 3,121
1 Demand factors based on nominal size of connection raised to the 2.00
power. The demand factors are based on AWWA standards for allocating
service costs to public and private fire accounts.
Sources: City of Seal Beach, American Water Works Association (AWWA)
W W1
Fir.sncol s�_rvices City of Seal Beach Water Rate Analysis 15
Table 13. Total Water System Consumption by Customer Class
Projected Water Consumption (hcf)
•
Base Year
Description (2008) FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14
Residential 782,299 782,299 782,299 782,299 , 782,299 782,299
City 63,996 63,996 63,996 63,996 63,996 63,996
Commercial . . 911,561
•
911,561 911,561 911,561 911,561 911,561
Total Water Consumption 1,757,856 1,757,856 1,757,856 1,757,856 1,757,856 1,757,856
Percent of Total Water Consumption
Residential 44.5% 44.5% 44.5% 44.5% 44.5% 44.5%
City 3.6% 3.6% 3.6% 3.6% 3.6% 3.6 %'
Commercial 51.9% 51.9% 51.9% 51.9% 51.9% 51.9%
Total 100% 100% 100% 100% 100% 100%
Sources: City of Seal Beach. .
Table 14. Meter Charge Calculation (All Customer Classes except Fire Service)
FY 2009 -10 FY 2010 -11 FY 2011 -12 FY 2012 -13 FY 2013 -14
Total Meters & Services Costs $ 598,800 $ 574,995 $ 602,951 $ 634,080 $ 666,155
Number of Equivalent Meters 7,378 7,378 7,378 7,378 7,378
Bi- Monthly Cost per 5/8" & 3/4" Meter $ 13.53 $ 12.99 $ 13.62 $ 14.32 $ 15.05
Total Customer Billing Costs $ 629,350 $ 604,330 $ 633,712 $ 666,430 $ 700,141
Number of Accounts 5,116 5,116 5,116 5,116 5,116
Bi- Monthly Cost per 5/8" & 3/4" Meter $ 20.50 $ 19.69 $ 20.64 $ 21.71 $ 22.81
BI- MONTHLY METER CHARGE
Meter Size Equivalent Meter Factor
5/8" & 3/4" 1.00 34.03 32.68 34.26 36.03 37.86
1" 1.67 43.05 41.33 43.34 45.58 47.89
1.5" 3.33 65.59 62.98 66.04 69.45 72.97
2" 5.33 92.64 88.96 93.28 98.10 103.06
3" 10.67 164.78 158.23 165.92 174.49 183.32
4" 16.67 245.94 236.16 247.64 260.43 273.60
6" 33.33 471.37 452.63. 474.64 499.14 524.39
8" 53.33 741.89 712.40 747.04 785.60 825.34
10" 76.67 1,057.50 1,015.46 1,064.83 1,119.81 1,176.45
12" 103.33 1,418.20 1,361.82 1,428.03 1,501.76 1,577.72
Sources: City of Seal Beach, Willdan Financial Service
•
WWILIDAN
F s„ncla! snrvicta City of Seal Beach Water Rate Analysis 16
•
•
J
Table 15. Fire Service Standby Fees Calculation
FY 2009 -10 FY 2010 -11 FY 2011 -12 FY 2012 -13 FY 2013 -14
Total Annual Fire Service Costs $ 58,995.00 $ 58,995.00 $ 58,995.00 $ 58,995.00 $ 58,995.00
Number of Equivalent Connections 3,121 3,121 3,121 3,121 3,121
• Charge per equivalent $ 18.90 $ 18.90 $ 18.90 $ 18.90 $ • 18.90
•
Meter Size Demand Factor � Standby Fees - Minimum Monthly Charge
1" 1.00 1.58 1.58 1.58 1.58 1.58
2" 4.00 6.30 6.30 6.30 6.30 6.30
4" 16.00 25.20 25.20 25.20 25.20 25.20
•
6" 36.00 • 56.71 56.71 56.71 ' 56.71 . 56.71
8" 64.00 100.81 100.81 100.81 100.81 • 100.81
10" 100.00 - 157.52 157.52 157.52 •157.52 157.52
12" 144.00 • 226.83 226.83 226.83 226.83 226.83
1 Demand factors based on nominal size of connection raised to the 2.00 power. The demand factors are based
on AWWA standards for allocating service costs to public and private fire accounts.
Sources: City of Seal Beach, Willdan Financial Services
•
•
Table 16. Residential Bi- monthly Increasing Block Consumption Rate Calculation
•
FY FY FY • FY FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
Residential Water Costs $ 1,566,872 $ 1,504,581 $ 1,577,733. $ 1,659,188 $ 1,743,118
rtesiaermai Lonsumpnon vim) 782,299 782,299 782,299 782,299 782,299
Residential Base Rate ($ /hcf) $ 2.00 $ 1.92 $ 2.02 $ 2.12 $ 2.23
Residential Share of Penalty Water Costs $ 176,539 $ 176,539 $ 176,539 $ 176,539 $ 176,539:
Residential Consumption Above Avg Usage (hcf) 273,805 273,805 273,805 273,805 273,805
- -• - Additional Amount per hcf for Conservation $ 0.64 ' $ 0.64 $ 0.64 $ 0.64 $ 0.64
•
Block 1 Rates (per hcf): (1 to 26 hcf bi-monthly) $ 2.00 $ 1.92 $ 2.02 $ 2.12 $ 2.23
Block 2 Rates (per hcf): (27 hcf and above bi- monthly) $ 2.65 $ 2.57 $ 2.66 $ 2.77 $ . 2.87
•
Source: City of Seal Beach; Willdan Financial Services
•
Table 17. Commercial Bi- monthly Increasing Block Consumption Rate Calculation
FY FY FY FY . FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
Commercial Water Costs $ 1,838,141 $ 1,765,066 $ 1,850,883 $ 1,946,440 $ 2,044,901
Commercial Consumption (hcf)
•
911,561 911,561 911,561 911,561 • 911,561
Commecial Base Rate ($/hcf) / $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Commercial Share of Penalty Water Costs $ . 205,709 $ 205,709 ' $ 205,709 $ 205,709 $ 205,709
Commercial Consumption Above Avg Usage (hcf) 364,624 364,624 364,624 ' 364,624 364,624
Additional Amount per hcf for Conservation $ 0.56 $ 0.56 $ 0.56 $ 0.56 -$ 0.56
Block 1 Rates (per hcf): See Table Below $ 2.02 $ 1.94 $ 2.03 $ 2.14 $, ' 2.24
Block 2 Rates (per hcf): See Table Below $ 2.58 $ , 2.50. $ 2.59 $ 2.70 $ 2.81
•
Source: City of Seal Beach; Willdan Financial Services -
•
Wl LLDAf
Financa r Services I - City of Seal Beach Water Rate Analysis. - 17
•
•
,
Table 18. Commercial Bi- monthly Increasing Block Consumption Rate Summary
FY FY FY FY FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
5/8" - 3/4" Meters •
Block 1 Rate per ccf (0 -26 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (27+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
1" Meters
Block 1 Rate per ccf (0-43 ccf) $ 2.02 $ 1.94 $ 2.03 $ ' 2.14 $ 2.24
Block 2 Rate per ccf (44+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
1 1/2" Meters
Block 1 Rate per ccf (0 -88 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (89+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
2" Meters
Block 1 Rate per ccf (0 -205 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (206+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $. 2.81
•
3" Meters 1
' Block 1 Rate per ccf (0 -420 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (421+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
•
4" Meters
Block 1 Rate per ccf (0 -686 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (687+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
6" Meters
Block 1 Rate per ccf (0 -1941 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (1942+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
8" Meters
Block 1 Rate per ccf (0 -4951 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (4952+ ccf) $ • 2.58 $ 2.50 $ 2.59 $ • 2.70 $ 2.81
10" Meters'
Block 1 Rate per ccf (0 -7117 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ ' 2.24
Block 2 Rate per ccf (7118+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
12" Meters
Block 1 Rate per ccf (0 -40500 ccf per month) $ 2.02 $ .1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (40501+ ccf per month) $ 2.58 $ 2.50 $ " 2.59 $ 2.70 $ 2.81
1. Allotment based on AWWA Flow Ratios.
Source: City of Seal Beach; Wilidan Financial Services
1
Table 19. Consumption Rate - City and All Other Classes
•
FY FY FY FY ! FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
City Water Costs including Penalty Water Costs . $ ' 140,493 $ 135,482 $ 141,367 $ 147,919 $ 154,671
• City Consumption (hcf) 63,996 63,996 63,996 63,996 63,996
Base Rate ($ /hcf) $' 2.20 $ 2.12 $ 2.21 $ 2.31 $ 2.42
Rate (per hcf) $ 2.20 $ 2.12 $ 2.21 $ 2.31 $ 2.42
Source: City of Seal Beach; Wilidan Financial Services .
•
WWILLDANi
Finor,6a1 Services City of Seal Beach Water Rate Analysis 18
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Conclusion
The proposed water fee schedule is based on the City projected revenue requirements over the
next five fiscal years. The City contracted with Willdan . Financial Services, a Professional
Consulting /Engineering firm to prepare a Water Rate Analysis which included the development of
a Proposition 218 compliant utility rate structure and model.
The existing fee structure while financially viable no longer matches the utility's cost of service
and it does not match the Prop. 218 compliant rates proposed in the study and thus are less
defensible. The Proposed Rate structure is a result of allocating the Water Utility Budget costs
based on standards approved by the American Water Works Association (AWWA). These
standards are founded in cost of service based principles. The proposed rates are fair and
equitable to all customer classes. The proposed rates are not projected to increase rate revenues
for the City, but are simply a reallocation of the existing rate revenue. Through the Cost of Service
Analysis, residential is now placing a greater burden on the Water Utility than in previous years.
As a result, in the proposed rate structure the residential customers will provide a greater
percentage of the total rate revenues than in years past. Willdan recommends that the City adopt
the proposed rate structures to ensure that the water system maintains a stable cash flow stream
in order to provide for ongoing costs and allow for funding of reserves for unscheduled expenses,
while being more in line - with Proposition 218.
WILLDAN
Firaacial Services City of Seal Beach Water Rate Analysis - 21
Notice of Public
Hearing
Resolution No. 5955
• Setting Public
Hearing
NOTICE OF PUBLIC HEARING
MONDAY, February 8, 2010 at 7:00 PM ' -
Proposed Water Service Charges
Dear Water Customer,
NOTICE IS HEREBY GIVEN that on February 8, 2010, at 7:00 P.M., a Public Hearing will be held at the Council Chambers,
City Hall, 211 8th St., Seal Beach; California, concerning the following proposed new monthly water rates:
Residential Bi- monthly Increasing Block Consumption Rate Calculation
FY FY FY FY FY
Description 2009/10 ' 2010/11 2011/12 2012/13 2013/14
Block 1 Rates (per hcf): (1 to 26 hcf bi- monthly) $ 2.00 $ 1.92 $ 2.02 $ 2.12 $ 2.23
Block 2 Rates (per hcf): (27 hcf and above bi- monthly) $ 2.65 $ 2.57 $ 2.66 $ 2.77 $ 2.87
•
Commercial Bi- monthly Increasing Block Consumption Rate Calculation
FY FY FY FY FY
Description 2009/10 2010/11 . 2011/12 2012/13 2013/14
Block 1 Rates (per hcf): See Table Below $ 2.02 $ 1.94 _ $ 2.03 $ 2.14 $ 2.24
Block 2 Rates (per hcf): See Table Below $ 2.58 $ 2.50" $ 2.59. $ 2.70 $ 2.81.
Commercial Bi- monthly Increasing Block Consumption Rate Summary
FY FY FY FY FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
5/8" - 3/4" Meters
Block 1 Rate per ccf (0 -26 ccf) $ 2.02 $ . 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (27+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ ' 2.81
1" Meters
Block 1 Rate per ccf (0 -43 ccf) , $ 2.02 $" ' 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (44+ ccf) ' . $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ • 2.81
1 1/2" Meters
Block 1 Rate per ccf (0 -88 ccf) $ 2.02 $ 1.94 $ - 2.03 $ : - ' 2.14 $„ • ' 2.24
Block 2 Rate per ccf (89+ ccf) $ 2.58 $ 2.50 $. 2.59 $ 2.70 $ 2.81 ,
2" Meters
Block 1 Rate per ccf (0 -205 ccf) $ 2.02 $ 1.94 $ 2.03 $ ' . 2.14 $ 2.24
Block 2 Rate per ccf (206+ ccf) $ . 2.58 $ 2.50 _ $ 2.59 $ 2.70 $ 2.81
3" Meters' •
Block 1 Rate per ccf (0 -420 ccf) $ 2.02 $ 1.94 $ " 2.03 $ 2.14 $ 2.24
' Block 2 Rate per ccf (421+ ccf) $ 2.5 $ 2.50 $ 2.59 $ 2.70 $ 2.81
4" Meters .
Block 1 'Rate per ccf (0 -686 ccf) • $ 2.02 $ 1.94 $ 2.03 $ ' 2.14 $ 2.24
Block 2 Rate per ccf (687+ ccf) $ 2.58 $ 2.50 $ 2.59 $ 2.70 $ 2.81
6" Meters
Block 1 Rate per ccf (0-1941 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ 2.24
Block 2 Rate per ccf (1942+ ccf) $ 2.58 $ 2:50 $ 2.59 $ 2:70 $ • 2.81 '
8" Meters '
Block 1 Rate,per ccf (0 -4951. ccf) $ 2.02 $ ' 1.94 $ 2.03: $ 2.14 $ 2.24 S
Block 2 Rate per ccf (4952+ ccf) $ 2.58 $ . 2.50 $ 2.59 $ 2.70 $ 2.81
10" Meters
Block 1 Rate per ccf (0 -7117 ccf) $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ ° 2.24
Block 2 Rate per ccf (7118+ ccf) $ 2.58 $ 2.50 $ 2:59 $ 2.70 $ 2.81 -
12" Meters
Block 1 Rate per ccf (0 -40500 ccf per month) . ' $ 2.02 $ 1.94 $ 2.03 $ 2.14 $ - 2.24 .
Block 2 Rate per ccf (40501+ ccf per month) $ 2.58 $ 2.50 $ 2.59 $ ' 2.70 $ 2.81'
Consumption Rate - City and All Other Classes
FY FY FY FY FY
Description 2009/10 2010/11 2011/12 2012/13 2013/14
Rate (per hcf) $ 2.20 $ 2.12 $ 2.21 $ 2.31 $ 2.42
•
Meter Charge Calculation (All Customer Classes except Fire Service)
FY 2009 -10 FY 2010 -11 FY 2011 -12 FY 2012 -13 FY 2013 -14
BI- MONTHLY METER CHARGE
Meter Size Equivalent Meter Factor
5/8" & 3/4" 1.00 34.03 32.68 34.26 36.03 37.86
1" 1.67 43.05 41.33 43.34 45.58 47.89
1.5" 3.33 65.59. 62.98 66.04 69.45 72.97
2" 5.33 92.64 88.96 93.28 98.10 103.06
3" 10.67 1 , 158.23 165.92 174.49 183.32
4" , 16.67 245.94 236.16 247.64 260.43 273.60
6" 33.33 471.37 452.63 474.64 499.14 524.39
8" 53.33 741.89 712.40 747.04 785.60 825.34
10" 76.67 1,057.50 1,015.46 1,064.83 1,119.81 1,176.45
12" 103.33 1,418.20 1,361.82 1,428.03 1,501:76 , 1,577.72
Fire Service Standby Fees Calculation
FY 2009 -10 FY 2010 -11 FY 2011 -12 FY 2012 -13 . FY 2013 -14
Meter Size Demand Factor 1 Standby Fees - Minimum Monthly Charge
1" 1.00 1.58 1.58 1.58 1.58 1.58
2" 4.00 6.30 6.30 6.30 6.30 6.30
4" 16.00 25.20 25.20 25.20 25.20 25.20
6" 36.00 56.71 56.71 56.71 56.71 56.71
8' 64.00 100.81 100.81 100.81 100.81 100.81
10" 100.00 157.52 157.52 157.52 157.52 157.52
12" 144.00 226.83 226.83 226.83 226.83 226.83
The rates will fund increased costs of operations, maintenance, debt service, and rehabilitation of the water system, as well as
improved facilities to treat and deliver water to customers, to improve water supply quality and reliability, and to'protect the City's
groundwater resources. Pursuant to authority granted by California Government Code Section 53756, the City may provide for
inflationary adjustments. The rate schedule may also provide for automatic adjustments that pass through to its customers any
increases or decreases in the cost of purchasing wholesale water from the Orange County Water District (OCWD) and the
Municipal Water District of Orange County (MWDOC).
The rates were calculated by determining groundwater and imported water costs and estimating the cost of future needs. Such
costs were then apportioned among water users based oncost of service and usage. The commodity rates and meter charges
are charged only to those using the City- provided water and are proportionate to usage. A detailed report explaining the
methodology for determining the rates may be inspected at the City Clerk's office. As required by Government Code Section
66016, the report also provides data indicating the amount of cost, or estimated cost, to provide water service and the revenue
sources anticipated to provide the service. A copy of the report will be available at City Hall on or about December 14, 2009.
The report will be available at the City of Seal Beach web site http : / /www.ci.seal - beach.ca.us /.
You are not required to respond to this notice. This notice is being sent to you to notify you of the public hearing that has been
scheduled. At the public hearing, the City Council will hear and consider all objections or protests to the proposed charges.
Written protests regarding the proposed charges must be filed with the City Clerk prior to the conclusion of the public hearing.
Written protests may be mailed or delivered to "Attn: City.Clerk, City of Seal Beach, 211 8th Street, Seal Beach, CA 90740."
Protests which are mailed or delivered to City Hall must arrive at City Hall by 7:00 p.m. on February 8, 2010 to be counted. If
written protests against the proposed charges are presented by a majority of owners of the parcels upon which the charges are
proposed for imposition, the City shall not impose the charges. I
Commonly asked questions about this program and the answers to those questions are enclosed. If you have additional
i questions or want more information, please call the Public Works Department at (562) 431 -2527 ext 1317 during normal
business hours.
City of Seal Beach
211 8th Street
Seal Beach, CA 90740
NOTICE OF PUBLIC HEARING
Questions and Answers
When was the last time the water rates were changed?
The last water rate study was performed in June 2003.
Why are water rates being changed?
There are several factors impacting water rates in the City of Seal Beach. The Municipal Water
District of Orange County (MWDOC) has increased the price of water to the City by 20 %.
MWDOC currently supplies the City with about 38% of the water provided to Seal Beach
consumers. The Orange County Water District (OCWD) also has increased the cost the City
pays for replenishment water in connection with City - pumped groundwater. A rate study has
not been conducted since 2003. The costs of inflation, energy, maintenance, water purchases
and regulations have all increased in recent years. As such, revenues need to be adjusted to
provide funding necessary to cover the City's operating and maintenance requirements while
meeting the requirements of Proposition 218.
In 2006, the California Supreme Court concluded in Bighorn -Desert View Water Agency v.
Vergil, 39 Cal. 4th 20 (2006), that water rates are "property- related fees or charges" subject to
the requirements of Proposition 218. Proposition 218 provides that the amount of the property -
related fee (the water rate) "shall not exceed the proportional cost of the service attributable to
the parcel" and that revenues from the fee "shall not exceed the funds required to provide the
service." Cal. Const. art. XIIID, § 6. Following this decision, the City has reviewed its water rate
structure to determine that it complies with Proposition 218's substantive requirements.
In addition, the new rate structure is consistent with the recommendations of the_American
Water Works Association.
Do I have to pay if 1 own property but do not have a water service?
No. If your property does not have a connected water meter, you would not have to pay any
water charges. Only water users must pay.
Why is the City proposing a 5 -year schedule?
Rates are being proposed on a 5 -year schedule because of the savings associated with lower
administrative costs (including yearly publishing and mailing costs). Further, such schedule
complies with Government Code Section 53756, which requires that a city authorizing automatic
adjustments that pass through the increased costs of purchasing wholesale water from another
public agency must adopt a schedule of fees or charges not to exceed 5 years.
Am I required to respond to this notice?
No. This notice is being sent to you to notify you of the public hearing that has been scheduled.
•
How will the new rate affect me?
The average residential consumer in Seal Beach uses about 20 ccf (hundred cubic feet) bi-
monthly. The table below shows the effect on consumers:
FY FY FY FY FY FY
Meter 08/09 09/10 10/11 11/12 12/13 13/14
5/8" & 3/4" $ 35.12 $ 34.03 $ 32.68 $ 34.26 $ 36.03 $ 37.86
Commodity
Block 1 Rates (per hcf): (1 to 26 hcf bi- monthly) $ 2.02 $ 2.00 $ 1.92 $ 2.02 $ 2.12 $ 2.23
Bi Monthly Consumption 20 $ 75.52 $ 74.09 $ 71.14 $ 74.60 $ 78.45 $ 82.42
Change from Previous Year -2% -4% 5% 5% 5% -
RESOLUTION, NUMBER 5955
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL
BEACH, CALIFORNIA SETTING A PUBLIC HEARING RELATING
TO WATER RATES FOR FEBRUARY 8, 2010 AT 7:00 P.M.
THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY
RESOLVE:.
Section 1. The City Council hereby sets a Public Hearing relating to proposed
changes to water rates for February 8, 2010 at 7:00p.m.
Section 2. The Council hereby authorizes the City Manager to notify the public as
required by law. .
PASSED! APPROVED AND ADOPTED by the City Council of the City of Seal
Beach, at a regular meeting held on the 14th day of December , 2009 by
the following vote:
AYES: Council Members , %LI /.>' /rL% 4 ' �I„ '
NOES: Council Members /
ABSENT: Council Members
ABSTAIN: Council Members !� c
Mayor 1
ATTEST:
.a,i. . _..Lim
ity Jerk o:
STATE OF CALIFORNIA } ,
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
1, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the
foregoing resolution is the original copy of Resolution Number 5955 on file
in the office of the City Clerk, passed, approved, and adopted by the City Council
at a regular meeting held on the 14th day of December , 2009.
�.LJ/I,
it Clerk