HomeMy WebLinkAboutMinutes - October 15, 2013 SSLODI CITY COUNCIL
SHIRTSLEEVE SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, OCTOBER 15, 2013
A. Roll Call by City Clerk
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held
Tuesday, October 15, 2013, commencing at 7:00 a.m.
Present: Council Member Hansen, Council Member Johnson, Mayor Pro Tempore Katzakian,
and Mayor Nakanishi
Absent: Council Member Mounce
Also Present: City Manager Bartlam, City Attorney Schwabauer, and City Clerk Johl-Olson
B. Topic(s)
B-1 Receive Policy and Rate Information Regarding Water. Wastewater, and Solid Waste Rate
Schedules Subject to Proposition 218 Public Hearing to be Held December 18. 2013 (PW)
City Manager Bartlam briefly introduced the subject matter of water, wastewater, and solid
waste policy and rate information subject to Proposition 218 processes.
Public Works Director Wally Sandelin and Consultant Bob Reed provided a PowerPoint
presentation regarding water, wastewater, and solid waste policy and rate information. Specific
topics of discussion included the meter charge schedule, vacant residential rates, rate update,
models, Engineering News Record (ENR) Index and rate adjustments, previous rate adjustments,
rate structure changes, flat rates, Proposition 218, rate structure changes, usage based rates,
rate comparison, sample residential and non-residential bills, solid waste rates, and the adoption
process.
In response to Council Member Johnson, Mr. Sandelin stated Santa Clara was included in the
comparison because it was one of the few cities with a published meter schedule.
In response to Council Member Hansen, Mr. Sandelin stated that, while there was a rate cap on
the wastewater side, there was no cap on the water side and the rate was whatever was
published for ENR.
In response to Council Member Johnson, City Attorney Schwabauer stated rate increases not
included in the original Proposition 218 notice would require a new Proposition 218 process.
In response to Council Member Hansen, Mr. Sandelin stated infrastructure replacement will be
completed in 2017-2018 on the water side but not sure about the wastewater side, which includes
sewer lining.
In response to Mayor Nakanishi, Mr. Sandelin stated other agencies are just now beginning to
make the infrastructure related decisions that the Lodi City Council made in 2004.
In response to Council Member Johnson, Mr. Sandelin stated the bond issue proposed for debt
retirement was $30 million.
In response to Council Member Hansen, Mr. Sandelin stated the $11.4 figure in the model
includes upgrades for the conveyance facilities and storage ponds and new development is also
considered in the model.
In response to Council Member Johnson, Mr. Sandelin stated the City is expecting that the
Regional Board is going to require improvements to the conveyance facilities at a cost of
$1.4 million and $10 million will be used for storage pond construction so that the City no longer
needs to discharge to the Delta thereby resulting in a cost savings.
In response to Mayor Nakanishi, Mr. Sandelin stated the previous rate increase included
infrastructure upgrades and new debt service for improvements at the White Slough facility.
In response to Council Member Hansen, Mr. Sandelin stated that, while the old financial model
was complex and contained errors which required ongoing consultant work, the current model is
simplified and tested quarterly by City staff. Mr. Sandelin stated he is confident that the needs of
the City are in line with the charges.
In response to Council Member Hansen, Mr. Sandelin confirmed adjustments include factors
such as inflation, material costs, and unfunded mandates. A brief discussion ensued between
Mr. Sandelin and Mr. Hansen regarding how other communities compare in infrastructure
replacement efforts and rates. Mr. Schwabauer confirmed that the rate structure does not include
additional revenue generation but rather a redesign of how payment is made from different rate
payers in light of water meter usage.
In response to Council Member Johnson, Mr. Sandelin confirmed that staff will be speaking with
the City's larger users regarding proposed rates prior to implementation.
In response to Mayor Pro Tempore Katzakian, Mr. Schwabauer stated fuel would be included in
100% of the Consumer Price Index (CPI) for solid waste purposes but is not necessarily included
in 80% of CPI and tipping fees could be considered separately if necessary.
In response to Mayor Nakanishi, Mr. Sandelin stated there will be a mobile home park rate
discussion at a Shirtsleeve Session in December.
In response to Mayor Pro Tempore Katzakian, Mr. Bartlam confirmed that the rate structure
adjustment will shift costs now mostly born by single -family residential equally amongst all
ratepayers. Mr. Schwabauer confirmed a new rate adjustment would be needed for larger
unforeseeable circumstances in the future similar to the state mandated White Slough facility
improvements. A brief discussion ensued between Mayor Pro Tempore Katzakian and
Mr. Schwabauer regarding ongoing PCE/TCE remediation and monitoring efforts.
Larry Haverty spoke in regard to his concerns about the City paying for water for the farmers near
the White Slough facility at a detriment to Lodi residents at large. Mr. Sandelin and
Mr. Schwabauer explained that farming near White Slough is not a revenue generator per se but
rather a necessary part of the treatment process to reduce nitrates to allow current discharge into
the Delta. They also confirmed that the farming operations currently being conducted are done
at a cost savings because it would cost the City significantly more money to farm land.
Shirley Plath spoke in regard to her concerns about billing for water services at a mobile
home park based on a bedroom system and the costs associated with water usage by an
individual resident at the mobile home park versus a larger group of residents such as a family.
Thomas Sanchez, representing Waste Management, spoke in support of the proposal to base
solid waste rates off of 100% of the CPI thereby eliminating individual charges for fuel and
tipping, which are currently charged separately in addition to 80% of CPI. Mr. Sanchez stated
there may be some decisions made by the County in the next month that may affect his thoughts
on the proposal but he is generally in support of the concept.
John Slaughterback spoke in regard to his concerns about facility improvements and upgrades
being completed as a result of new development impacts on the system and developers paying
their share of the same. Mr. Slaughterback also spoke in support of the City having various
programs to help the less fortunate pay for services in difficult times.
C. Comments by Public on Non -Agenda Items
None.
D. Adjournment
No action was taken by the City Council. The meeting was adjourned at 8:30 a.m.
ATTEST:
Randi Johl-Olson
City Clerk
AGENDA ITEM k
tQ CITY OF LODI
COUNCIL COMMUNICATION
• TM
AGENDA TITLE: Receive Policy and Rate Information Regarding Water, Wastewater, and Solid
Waste Rate Schedules Subject to Proposition 218 Public Hearing to be Held
December 18, 2013
MEETING DATE: October 15, 2013 (Shirtsleeve Session)
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Receive policy and rate information regarding water, wastewater
and solid waste rate schedules subject to Proposition 218 public
hearing to be held December 18, 2013.
BACKGROUND INFORMATION: Rate schedules and rates analysis information is being supplied to
the City Council prior to mailing Proposition 218 protest hearing
notices preliminary to a public hearing to consider adopting
the various rate schedules for the period from January 1, 2014 through December 31, 2018. The various
rate schedules set maximum limits on the various rates for the next five years, and each year the City
Council will be requested to approve the actual rates to be implemented. At the public hearing scheduled
for December 18, 2013, the City Council will be asked to receive public comment, adopt a resolution
adjusting water and wastewater rates with limits for the period January 1, 2014 through
December 31, 2018, adopt a resolution approving property owner meter charge schedule, and adopt a
resolution approving vacant residential unit water and wastewater rates.
Property Owner Meter Charge Schedule At the March 26, 2012 City Council meeting, various
alternative property owner meter charge schedules were presented to the City Council. Prior
policy direction from the City Council set the charge for a single-family residential %-inch water
meter at $300. As the Water Meter Program moves into the multi -family and non-residential
properties, larger meters will be required and a meter charge schedule based upon meter size
needs to be established. Presented in Exhibit A is the recommended meter charge schedule,
along with previously -presented alternatives. The recommended charge schedule is based upon
the actual purchase price for the meter assembly (meter, register, and radio transmitted) plus
55 percent, which is identical to the 3/4 -inch residential meter charge basis. The 55 percent covers
a portion of the cost of the meter box, miscellaneous piping, and installation. The capacity -based
charge schedule sets the meter cost according to the hydraulic capacity of the meter. The
installed cost is based upon contractor bid prices from construction for phases 1 through 3. The
Lodi charge schedule is taken from the City's published Fee and Service Charge Schedule.
Comparative charges from the City of Santa Clara are listed, and they are fairly consistent with
the recommended schedule, particularly considering most of the meters remaining to be installed
are 3/ to 1 inch in size. An additional column showing "no charge" is provided upon the request of
the mobile home park owners. All options presented in Exhibit A will be included in the
Proposition 218 notice and the City Council will be asked to select and approve a single option at
the December 18, 2013 public hearing.;;
radt Bartlam, City Manager
K:\WP\UTILITY RATES\W WW\Shirtsleeve Oct 15 2103.doc 10/9/2013
Receive Policy and Rate Information Regarding Water, Wastewater, and Solid Waste Rate Schedules
Subject to Proposition 218 Public Hearing to be Held December 18, 2013
October 22, 2013 (Shirtsleeve Session)
Page 2
2. Vacant Residential Unit Water and Wastewater Rate Staff recommends the vacant residential
unit water and wastewater utility charge for customers without a metered service be equal to the
monthly base charge for metered customers having the same size of meter in their future service.
There would not be a specific vacant unit charge for the following customer classes as explained.
• Vacant single family detached with meter — customers would pay the monthly base rate
and presumably there would be no usage and, therefore, no usage charge.
• Vacant single family attached (duplex, triplex, fourplex — master meter) — property owners
would pay the monthly base rate and usage charges for the occupied units.
• Vacant single family attached (duplex, triplex, fourplex — individual meter) — customers
would pay the monthly base rate and presumably there would be no usage and, therefore,
no usage charge.
• Vacant apartment/condominium (master meter) — property owners would pay the monthly
base rate and usage charges for the occupied units.
• Vacant apartment/condominium (individual meter) — property owners would pay the
monthly base rate and presumably there would be no usage and, therefore, no usage
charge.
• Vacant mobile home (master meter) — property owners would pay the monthly base rate
and usage charges for the occupied units.
3. Water and Wastewater Rate Update In 2009, the City Council approved a five-year rate program
for the wastewater utility and in 2010 for the water utility. Each separate action by the Council
complied with the Proposition 218 requirements pertaining to such actions. The last pre -approved
rate adjustment under that program will be for the water utility, and a 2.5 percent increase
effective January 2014, equal to the ENR index increase, is recommended by staff. A summary
of the programmed rate adjustments and the implemented rate adjustments for the past five years
is provided in the table in Exhibit B. The purpose of this table is to demonstrate past rate
increases have frequently been below the approved programmed adjustment.
In preparation of the new five-year program, staff engaged the services of The Reed Group to
analyze the financial models and current rate structure within both utilities. The final report, Water
and Wastewater Rate Update Study, is provided in Exhibit C.
Staff is recommending a new five-year rate program for the water and wastewater utilities that will
also be subject.to the Proposition 218 process. As in the past, rate adjustment forecasts are
based upon the financial models for each utility. The water and wastewater financial models are
provided in Exhibits D and E, respectively. For both the water and wastewater utilities, the
programmed adjustments are capped at three percent per year. Important elements of the
financial models are presented below.
Water Financial Model
1. Financial assumptions presented on the final page were checked and reconfirmed against
actual numbers.
2. Annual adjustments are capped at three percent and are indexed by the Engineering
News Record 20 -Cities Average Index.
3. Capital expenditures continue for the next four years of the Water Meter Program and
include installation of meters at multi -family and non-residential customer locations.
4. Debt service payments for the water treatment facilities are approximately $2.3 million per
year.
K UMUTILITY RATES\W_WMShirtsleeve Oct 15 2103.doc 10/10/2013
Receive Policy and Rate Information Regarding Water, Wastewater, and Solid Waste Rate Schedules
Subject to Proposition 218 Public Hearing to be Held December 18, 2013
October 22, 2013 (Shirtsleeve Session)
Page 3
5. New development revenue toward payment of the water plant debt service is assumed
minimal to retain the utility's high bond rating.
6. Maintenance is scheduled for all wells in the system amounting to approximately
$1.2 million.
7. Residual bond proceeds from the water treatment facilities financing amounting to
approximately $2.6 million are not shown in the financial model and will most likely be
used to pay debt service in a future year.
8. Net available capital at the end of Fiscal Year 2018/19 could be used to pay off a portion
of the water treatment facilities debt at a considerable interest savings to our customers.
Wastewater Financial Model
1. Financial assumptions presented on the final page were checked and reconfirmed against
actual numbers.
2. Annual adjustments are capped at three percent and are indexed by the Engineering
News Record 20 -Cities Average Index.
3. Wastewater main rehabilitation continues at an investment rate of approximately
$2.2 million every other year.
4. The 2003 Certificates of Participation debt service is paid off in the first year amounting to
approximately $2.3 million.
5. Debt service payments for the improvements at White Slough are approximately
$3.5 million per year.
6. New development revenue toward payment of the water plant debt service is assumed
minimal to retain the utility's high bond rating.
7. Capital expenditures are planned amounting to approximately $1.4 million to improve the
irrigation conveyance and pumping facilities and to expand the secondary/industrial
storage at White Slough in the latter two years of the model.
8. Net available capital at the end of Fiscal Year 2018/19 is relatively low.
At the January 6, 2010 City Council meeting to consider setting usage -based rates for water and
wastewater, the following information was provided. "The City has an existing usage -based rate
structure for non-residential customers, and it is recommended that rate structure be maintained
for those non-residential accounts for the time being. This structure includes a monthly base
charge referenced to the meter size and a commodity charge of $0.537 per CCF as presented in
Exhibit C. It needs to be noted that the non-residential commodity charge is approximately one-
half of the weighted average residential commodity charge ($.537 versus $1.11 per CCF) and that
future work will need to be done to amend the non-residential rate structure to make it more
comparable to the residential commodity charge rate. Both the base charge and commodity
charge are likely to be increased."
The recommendations within the rate study provided in Exhibit C present a transition plan to
implement the abovementioned structural changes to the rates. In addition, the rate study
addresses the following issues concerning the City's water and wastewater utilities and user
rates.
A. Estimated annual water and wastewater rate revenue requirements for the next five years
B. Current flat and usage -based water and wastewater rate structures
C. Water and wastewater customer account, water usage, and wastewater flow
characteristics and influence on rate setting
D. Cost of service and rate design issues related to development of new usage -based water
and wastewater rate structures
KAMNUTILITY RATESM WIMShirtsleeve Oct 15 2103.doc 10/10/2013
Receive Policy and Rate Information Regarding Water, Wastewater, and Solid Waste Rate Schedules
Subject to Proposition 218 Public Hearing to be Held December 18, 2013
October 22, 2013 (Shirtsleeve Session)
Page 4
E. Recommendations for new water and wastewater rate schedules over the next five years
F. Affects of the proposed new water and wastewater rates on various residential and
non-residential customers
G. Transition plans to usage -based water and wastewater rates for each customer
classification
A summary of each of the above issues is provided in Section I of the rate study. More detailed
information and analysis is provided in Sections II and 111. A summary of the programmed rates
with the three percent adjustment are presented in Exhibit F and will be included in the
Proposition 218 notice.
4. Solid Waste Rates The existing agreement with Waste Management for Solid Waste Collection,
Recycling and Green Waste Collection and Processing Services (Agreement) in the City of Lodi
was adopted in 2008 and extends until December 31, 2023. An amendment to the Agreement
was approved in 2010 that give the Contractor the unilateral option to extend the Agreement until
December 31, 2030. Section 7 Rates, paragraphs b. and c. of the Agreement establish
provisions for annual adjustment to the rates that are repeated below.
b. On April 1, 2009, and on each anniversary thereof during the term of this Agreement, the rates
shall be adjusted in a percentage amount equal to eighty percent (809/6) of the annual change in
the Consumer Price Index for all Urban Consumers for San Francisco -Oakland -San Jose,
California area, All Items (1982 — 84 = 100) published by the Bureau of Labor Statistics (the
Index) for the twelve (12) month period ending December 31 of the preceding calendar year.
c. In January of each year, Contractor shall send to City a revised rate schedule reflecting the
new rates, as adjusted by the Index as provided in Section 7.b. City Council will act on rate
adjustments to be effective on April 1 of that year.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
'�I/j , J',�"Ab L
F. Wally Sadd6lin
Public Works Director
FWS/pmf
Attachments
KAWMUTILITY RATES\W_W1MShirts1eeve Oct 15 2103.doc 10/10/2013
Exhibit A
Meter Charge Alternatives
Meter
Size
Purchase
Price
Recommended
Price
Based
Cost x 1.55
Capacity
Factor
Capacity
Based
Installed
Cost
(Contract
Prices
Lodi Fee
Schedule
Santa Clara
Fee
Schedule
No
Charge
3/4
$194
$300
1
$300
$940
$400
$370
$0
1
$226
$350
1.67
$500
$1,420
$480
$365
$0
1 'h
$506
$780
3.33
$1,000
$3,810
$745
$1,565
$0
2
$624
$970
5.33
$1,600
$5,720
$930
$1,730
$0
3
$1,279
$1,980
10
$3,000
$5,950
N/A
$2,065
$0
4
$2,304
$3,570
16.67
$5,000
N/A
N/A
$4,130
$0
6
$4,362
$6,760
33.33
$10,000
N/A
N/A
$6,750
$0
8
$7,432
$11,520
53.33
$16,000
N/A
N/A
$10,670
$0
KAWRUTILITY RATES\W WW\CShirtsleeve101513 ExA.doc
Exhibit B
Programmed and Implemented Rate Adjustments
Water
Year
Programmed
Implemented
2009
0
0
2010
0
0
2011
2
2
2012
2.53
2.2
2013
2.5
2.5
2014
3.3
2.5
Water rate adjustments were not capped, therefore, programmed
adjustments equal the approved adjustments.
Wastewater
2009
25
25
2010
20
12
2011
10
5
2012
5
3
2013
2.8
2.5
Wastewater rate adjustments were capped.
K:\WP\UTILITY RATES\W_WW\2013 W—WW Rate Increase\Exhibit A, C, D Shirtsleeve 10-15-13.xlsx
CITY OF LODI
Water and Wastewater Rate Update Study
Final Report
October 9, 2013
THE REED GROUP, INC.
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Table of Contents
SECTIONI. SUMMARY.............................................................................................1
Introduction................................................................................................................................1
Revenue Needs of the Water and Wastewater Utilities.......................................................1
ProposedWater Rates................................................................................................................2
ProposedWastewater Rates.....................................................................................................4
Annual Adjustments to Water and Wastewater Rates.........................................................5
Affect of Proposed Rates on Customer Bills..........................................................................8
SECTION II. WATER RATES....................................................................................11
CurrentWater Rates................................................................................................................11
Customer Base and Water Usage Data.................................................................................12
Annual Water Rate Revenue Requirement..........................................................................13
Cost of Service Analysis and Rate Design............................................................................14
Proposed Water Rate Schedules............................................................................................18
Meter Installation and Transition to Usage -Based Billing.................................................19
SECTION III: WASTEWATER RATES.....................................................................21
Current Wastewater Rates......................................................................................................21
Customer Base and Wastewater Flow Estimates................................................................22
Annual Wastewater Rate Revenue Requirement................................................................23
Cost of Service Analysis and Rate Design............................................................................24
Proposed Wastewater Rate Schedules..................................................................................28
Meter Installation and Transition to Usage -Based Billing.................................................29
THE REED GROUP, INC.
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
SECTION I. SUMMARY
INTRODUCTION
The City of Lodi continues to install water meters on unmetered service connections of
single family, multi -family, and non-residential customers. The City expects to complete
the meter retrofit program in 2018. At the beginning of each year, the City transitions
batches of customers to usage -based water rates using data collected from water meters,
and the City is also beginning to transition customers to usage -based wastewater rates as
well.
In 2008, the City retained The Reed Group, Inc. to assist in developing financial plans
and utility rates for the City's water and wastewater utilities. Various analyses have been
performed since that time to help guide the City in dealing with a variety of water and
wastewater rate and financial issues, including the transition to usage -based billing. The
purpose of this report is to recommend water and wastewater rates that will meet each
utility's financial needs and continue the transition towards usage -based billing for all
customers.
This report addresses the following issues concerning the City's water and wastewater
utilities and user rates:
❖ Estimated annual water and wastewater rate revenue requirements for the next five
years
❖ Current flat and usage -based water and wastewater rate structures, and the need to
continue to develop new usage -based rate structures
❖ Water and wastewater customer account, water usage, and wastewater flow
characteristics and influence on rate setting
❖ Cost of service and rate design issues related to development of new usage -based
water and wastewater rate structures
❖ Recommendations for new water and wastewater rate schedules, as well as
adjustments in the level of the rates during the next five years
❖ Affect of the proposed new water and wastewater rates on various residential and
non-residential customers
❖ Summary of plans to continue the transition to usage -based water and wastewater
rates for each customer classification
❖ Plans and requirements for adopting new water and wastewater rates.
REVENUE NEEDS OF THE WATER AND WASTEWATER UTILITIES
Several years ago, The Reed Group, Inc. assisted the City by developing multi-year
financial plan models for the water and wastewater utilities. These models enabled the
City to evaluate the financial implications of the meter retrofit program, the construction
and financing of the new surface water treatment plant, and other capital improvements of
both utilities, as well as ongoing operation and maintenance costs, debt service obligations,
THE REED GROUP, INC. PAGE 1
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
and other factors affecting the financial condition and needs of the utilities. Since that
time, City staff has annually updated the financial plan models. The financial plan models
have enabled the City to make near-term financial and rate decisions with a long-term
planning horizon in mind, and this has led to the moderation and stabilization of annual
rate increases for both utilities.
In recent years, annual water rate increases have been less than 3 percent, and
wastewater rate increases have declined from double-digit levels down to 2.5 percent.
Current financial plan models estimate annual water and wastewater rate increases can be
limited to 3 percent per year through FY 19-20.
Proposed water and wastewater rate schedules presented in this report reflect an
overall 2.5 percent increase in the level of water rate revenue in the upcoming year
(effective in January 2014) and no more than 3 percent in the level of the wastewater rate
revenue (effective in July 2014). Beyond that, it is recommended that the City re -adopt
provisions to annually adjust water and wastewater rate increases by changes in the
Engineering News Record's 20 -Cities Construction Cost Index (ENR) for up to five years,
subject to a 3 percent cap. These annual rate adjustments would also be subject to annual
review by staff to confirm need and concurrence by the City Council.
PROPOSED WATER RATES
Proposed flat (unmetered) water rates are presented in Exhibit I-1, and proposed
usage -based (metered) water rates are presented in Exhibit I-2. Both of these rate
schedules reflect a 2.5 percent overall rate increase in January 2014 (based on previously
approved indexing using the ENR), and 3.0 percent increases each January from 2015
through 2019 (reflecting the maximum allowed under the proposed indexing criteria). As
the City will be phasing out the flat water rates as the meter retrofit program winds down,
no changes to the structure of the flat rates are proposed.
Proposed usage -based water rates include a gradual, three-year transition in the
structure. At present, the volumetric water rate for multi -family and non-residential
accounts is equal to the first tier rate for single family customers. Under the proposed rates
the uniform multi -family and non-residential rate will equal the weighted average across
the single family tier structure, thereby bringing better balance across the various customer
classes. In addition, monthly service charges should be adjusted to better reflect the
capacity relationship across meter sizes, and thereby improve equity between large and
small customers. Both of these changes are intended to better align the water rates with
cost of service principles, as required by Proposition 218.
Exhibit I-2 includes the three years of phased rate structure changes in the rate
schedules for 2014, 2015, and 2-16. The 2014 schedule reflects the 2.5 percent overall
annual rate revenue increase relative to current rates (with some rate components
increasing and others decreasing each year), and the 2015 and 2016 schedules reflect the
maximum indexing of 3.0 percent in each of those years. These transitional rate structures
would be subject to downward adjustments in both 2015 and 2016 if the City Council
determines that smaller increases are needed in those years.
Details of water rate recommendations are presented in Section II of this report.
THE REED GROUP, INC. PAGE 2
H
0
r
0
d
Exhibit 1-1
City of Lodi
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
tourrent ana rro
osea riaz water nates
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Jan.2013)
(Jan.2014)
(Jan.2015)
(Jan.2016)
(Jan.2017)
(Jan.2018)
(Jan.2019
Rate Increase -->
2.5%
3.0%
3.0%
3.0%
3.0%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
29.90
$
30.65
$
31.57
$
32.52
$
33.50
$
34.51
$
35.55
2 Bedroom
$
35.91
$
36.81
$
37.91
$
39.05
$
40.22
$
41.43
$
42.67
3 Bedroom
$
43.04
$
44.12
$
45.44
$
46.80
$
48.20
$
49.65
$
51.14
4 Bedroom
$
51.72
$
53.01
$
54.60
$
56.24
$
57.93
$
59.67
$
61.46
5 Bedroom
$
62.03
$
63.58
$
65.49
$
67.45
$
69.47
$
71.55
$
73.70
6 Bedroom
$
74.44
$
76.30
$
78.59
$
80.95
$
83.38
$
85.88
$
88.46
Multi -Family (1)
1 Bedroom
$
25.67
$
26.31
$
27.10
$
27.91
$
28.75
$
29.61
$
30.50
2 Bedroom
$
30.79
$
31.56
$
32.51
$
33.49
$
34.49
$
35.52
$
36.59
3 Bedroom
$
36.94
$
37.86
$
39.00
$
40.17
$
41.38
$
42.62
$
43.90
4 Bedroom
$
44.32
$
45.43
$
46.79
$
48.19
$
49.64
$
51.13
$
52.66
Non -Residential
Existing unmetered
Varies
+2.5%
+3.0%
+3.0%
+3.0%
+3.0%
+3.0%
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
Exhibit 1-2
City of Lodi
Current and Proposed Usage -Based Water Rates
Notes
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) This schedule includes the proposed indexing of 2.5 percent, with no rate structure changes.
(3) This rate schedule is revenue neutral relative to the proposed newly indexed January 2014 water rates, but includes the beginning of the
proposed 3 -year phased changes to the rate structure.
(4) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate
adjustment due to ENR indexing.
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Jan. 2013
Jan. 2014
Jan. 2014)
(Jan.2015)
(Jan. 2016
Jan. 2017
Jan. 2018
Jan. 2019
Rate Increase -->
2.5%(2)
3
3.0%(4)
3.0%(4)
3.0%
3.0%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family
3/4" meter
$
23.78
$
24.37
$
23.26
$
22.80
$
21.65
$
22.30
$
22.97
$
23.66
1" meter
$
38.60
$
39.57
$
37.38
$
36.26
$
34.01
$
35.03
$
36.08
$
37.16
1 1/2" meter
$
75.42
$
77.31
$
72.45
$
69.63
$
64.62
$
66.56
$
68.56
$
70.62
2" meter
$
119.79
$
122.78
$
114.71
$
109.84
$
101.52
$
104.57
$
107.71
$
110.94
Multi -Family and Non -Residential
(1)
3/4" meter
$
23.78
$
24.37
$
23.26
$
22.80
$
21.65
$
22.30
$
22.97
$
23.66
1" meter
$
38.60
$
39.57
$
37.38
$
36.26
$
34.01
$
35.03
$
36.08
$
37.16
1 1/2" meter
$
60.24
$
61.75
$
62.08
$
64.28
$
64.62
$
66.56
$
68.56
$
70.62
2" meter
$
75.27
$
77.15
$
84.29
$
94.17
$
101.52
$
104.57
$
107.71
$
110.94
3" meter
$
105.38
$
108.01
$
132.74
$
162.18
$
187.65
$
193.28
$
199.08
$
205.05
4" meter
$
135.51
$
138.90
$
193.14
$
254.80
$
310.67
$
319.99
$
329.59
$
339.48
6" meter
$
195.68
$
200.57
$
333.69
$
480.82
$
617.94
$
636.48
$
655.57
$
675.24
8" meter
$
255.91
$
262.31
$
494.23
$
747.94
$
986.82
$
1,016.42
$
1,046.91
$
1,078.32
10" meter
$
316.01
$
323.91
$
674.61
$
1,056.08
$
1,417.30
$
1,459.82
$
1,503.61
$
1,548.72
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF)
$
0.92
$
0.94
$
0.94
$
0.97
$
0.96
$
0.99
$
1.02
$
1.05
Tier (11-50 CCF)
$
1.38
$
1.41
$
1.35
$
1.33
$
1.27
$
1.31
$
1.35
$
1.39
Tier 3 (>50 CCF)
$
1.82
$
1.87
$
1.76
$
1.70
$
1.59
$
1.64
$
1.69
$
1.74
Multi -Family and Non -Residential
(1)
All water usage
$
0.92
$
0.94
$
1.00
$
1.09
$
1.14
$
1.17
$
1.21
$
1.25
Notes
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) This schedule includes the proposed indexing of 2.5 percent, with no rate structure changes.
(3) This rate schedule is revenue neutral relative to the proposed newly indexed January 2014 water rates, but includes the beginning of the
proposed 3 -year phased changes to the rate structure.
(4) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate
adjustment due to ENR indexing.
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
PROPOSED WASTEWATER RATES
Proposed flat (unmetered) wastewater rates are presented in Exhibit I-3, and proposed
usage -based (metered) wastewater rates are presented in Exhibit I-4. Both of these rate
schedules reflect 3.0 percent increases each July from 2014 through 2018 (reflecting the
maximum allowed under the proposed indexing criteria). Similar to flat water rates, no
changes to the structure of flat wastewater rates are proposed, as they will be phased out in
upcoming years.
In 2010, the City developed usage -based wastewater rates for single family customers.
In July 2012, the City transitioned about 2,940 single family customers to the usage -based
wastewater rates, expects to transition an additional 3,700 in July 2014, and will continue
each year with more. However, usage -based wastewater rates for other customer classes
are not currently available. The usage -based wastewater rates proposed herein include
fixed monthly service charges and volumetric rates for all customer classes. While the rate
schedule includes usage -based rates for non-residential uses, the City plans to focus on
transitioning single family and multi -family residential customer to usage -based rates, and
then transition non-residential customers. Rate structure transition issues are discussed in
greater in Section III of this report. Additional refinements to the rate structure will be
required as the City gains data and experience with the usage -based rates, as well as
categorizes non-residential customers into appropriate strength classifications.
Details of wastewater rate recommendations are presented in Section III of this report.
ANNUAL ADJUSTMENTS TO WATER AND WASTEWATER RATES
Government Code Section 53756 authorizes the City to adopt a mechanism for
adjusting water and wastewater rates to offset the affects of inflation for up to five years.
Consistent with past practices, it is recommended that, in approving the proposed rates,
the City also approve annual adjustments to water rates beginning in January 2015 and to
wastewater rates beginning in July 2014 by the annual change in the Engineering News
Record's 20 -Cities Construction Cost Index (ENR), subject to a 3 percent annual cap. These
annual rate adjustments would also be subject to annual review by staff to confirm need
and concurrence by the City Council. In accordance with Section 53756, customers should
be informed of the changes in the rate schedules at least 30 days prior to their
implementation. This can be achieved through a bill insert, or other means.
Water and wastewater rate schedules presented in Exhibits I-1 through I-4 reflect the
maximum 3.0 percent potential adjustment to the rates each year (January 2015 through
January 2019 for water rates and July 2014 through July 2018 for wastewater). These
schedules, therefore, reflect the "ceiling' for the rates at any time during this five-year
period. Actual annual rate adjustments would be based on the actual change in the ENR
index (subject to a 3.0 percent cap), financial need, and concurrence by the City Council.
As the City continues to transition customers from flat water and wastewater rates to
usage -based rates there is some uncertainty as to the affect it may have on revenues.
Therefore, it is important for the City to continue to monitor water usage characteristics
and rate revenues for both utilities on an annual basis.
THE REED GROUP, INC. PAGE 5
Exhibit 1-3
City of Lodi
Current and Proposed Flat Wastewater Rates
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Jul. 2013
Jul.
2014
Jul. 2015
Jul.
2016
Jul. 2017
Jul. 2018
Rate Increase -->
3.0%
3.0%
3.0%
3.0%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
25.83
$
26.60
$
27.40
$
28.22
$
29.07
$
29.94
2 Bedroom
$
34.44
$
35.47
$
36.53
$
37.63
$
38.76
$
39.92
3 Bedroom
$
43.05
$
44.34
$
45.67
$
47.04
$
48.45
$
49.90
4 Bedroom
$
51.66
$
53.21
$
54.81
$
56.45
$
58.14
$
59.88
5 Bedroom
$
60.27
$
62.08
$
63.94
$
65.86
$
67.84
$
69.88
6 Bedroom
$
68.88
$
70.95
$
73.08
$
75.27
$
77.53
$
79.86
7 Bedroom
$
77.49
$
79.81
$
82.20
$
84.67
$
87.21
$
89.83
Duplexes, Triplexes, Fourplexes, Apartments, and
Condominiums
1 Bedroom
$
25.83
$
26.60
$
27.40
$
28.22
$
29.07
$
29.94
2 Bedroom
$
34.44
$
35.47
$
36.53
$
37.63
$
38.76
$
39.92
3 Bedroom
$
43.05
$
44.34
$
45.67
$
47.04
$
48.45
$
49.90
4 Bedroom
$
51.66
$
53.21
$
54.81
$
56.45
$
58.14
$
59.88
Mobile Homes
Any Size
$
25.83
$
26.60
$
27.40
$
28.22
$
29.07
$
29.94
Non -Residential
Per SSU
$
34.44
$
35.47
$
36.53
$
37.63
$
38.76
$
39.92
Exhibit 1-4
City of Lodi
Current and Proposed Usa a -Based Wastewater Rates
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) Usage charge based on winter water use determined as the average from the prior December -February period.
Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Jul. 2013
Jul. 2014
Jul.
2015
Jul.
2016
Jul.
2017
Jul.
2018
Rate Increase -->
3.0%
3.0%
3.0%
3.0%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family (per DU)
$ 23.52
$
24.23
$
24.96
$
25.71
$
26.48
$
27.27
Multi -Family and Non -Residential
(1)
3/4" meter
$
24.23
$
24.96
$
25.71
$
26.48
$
27.27
1" meter
$
38.83
$
39.99
$
41.19
$
42.43
$
43.70
1 1/2" meter
$
75.03
$
77.28
$
79.60
$
81.99
$
84.45
2" meter
$
118.63
$
122.19
$
125.86
$
129.64
$
133.53
3" meter
$
220.45
$
227.06
$
233.87
$
240.89
$
248.12
4" meter
$
365.88
$
376.86
$
388.17
$
399.82
$
411.81
6" meter
$
729.12
$
750.99
$
773.52
$
796.73
$
820.63
8" meter
$
1,165.18
$
1,200.14
$
1,236.14
$
1,273.22
$
1,311.42
Usage Rates ($ICCF)
Single Family (2)
$ 2.68
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Multi -Family (2)
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Non -Residential (2) (3)
Low Strength
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Medium Strength
$
3.45
$
3.55
$
3.66
$
3.77
$
3.88
High Strength
$
4.49
$
4.62
$
4.76
$
4.90
$
5.05
Industrial (4)
Flow (per MG annually)
$ 3,487.41
$
3,592.03
$
3,699.79
$
3,810.78
$
3,925.10
$
4,042.85
BOD (per 1,000 lbs annually)
$ 575.51
$
592.78
$
610.56
$
628.88
$
647.75
$
667.18
SS (per 1,000 lbs annually)
$ 359.85
$
370.65
$
381.77
$
393.22
$
405.02
$
417.17
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) Usage charge based on winter water use determined as the average from the prior December -February period.
Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
AFFECT OF PROPOSED RATES ON CUSTOMER BILLS
Flat water rates are proposed to increase by 2.5 percent in January 2014 and flat
wastewater rates are proposed be adjusted by no more than 3 percent in July 2014 to meet
anticipated revenue needs of the utilities. No structural changes are proposed for flat rates.
Customers subject to flat rates will therefore see a 2.5 percent change in their monthly
water bills, and no more than a 3 percent change in their monthly wastewater bills.
Rate structure changes are proposed for usage -based water rates, which will result in
smaller or larger changes in bill amounts for affected customers. In general, single family
residential customers will benefit from the change, and non-residential customers will, in
most but not all cases, see bill increases in excess of 2.5 percent. The proposed rate
structure changes, as described in Section II of this report, are intended to improve the
equity between the customer classes in the charges for water service.
Multi -family customers, including mobile homes parks, will soon begin to be
transitioned to usage -based rates. While usage -based billing may result in the City shifting
billing from tenants to property owners, the total charges for water service within most
apartment complexes and mobile home parks, as well as duplexes, triplexes, and
fourplexes, are likely to be significantly lower if billed to property owners with usage -
based rates compared with cumulative flat rate billing to the tenants.
With the exception of the transitioning single family residential customers from flat
wastewater rates to usage -based wastewater rates, other wastewater customers will
continue to be billed on flat rates until at least July 2015. Usage -based wastewater rates are
based on winter water usage for each account, and non-residential customers will be
assigned to low, medium, or high strength categories, depending on the type of business.
When the transition does occur, multi -family residential customers will likely benefit from
usage -based rates. Additional analysis is required to assess the potential implications of
usage -based rates for non-residential customers, and further refinements to wastewater
rates will be required in the years ahead as more data and analyses become available.
Exhibit I-5 summarizes the affect of proposed water rates (effective January 2014) and
proposed wastewater rates (effective July 2014) on monthly bills for a sampling of
residential customers. Both flat rates and usage -based rate examples are presented, as well
as changes in combined water and wastewater bills.
Exhibit I-6 summarizes the affect of proposed water rates (effective January 2014) and
proposed wastewater rates (effective July 2014) on average monthly bills for a sampling of
non-residential customers. In all cases, non-residential customers shown are subject to
usage -based water rates and flat wastewater rates during this period.
Bill water amounts under proposed rates in Exhibits I-5 and I-6 reflect both the 2.5
percent overall rate increase, as well as the first step in the rate restructuring for usage
based water rates. Additional details on the water and wastewater rates and related
analyses are presented in Sections 1I and III, respectively, of this report.
THE REED GROUP, INC. PAGE 8
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit I-5
City of Lodi
Water Bills for Sample of Residential Customers
Wastewater Bills for Sample of Residential Customers
Monthly Wastewater Bill
Monthly Water Bill
Change
Change
Winter
Water
Current
Current
Proposed
Proposed
Wtr. Use
Use
Rates
Rates
Rates
Rates
Single Family Residential
(CCF)
CCF)
(Jan.2013)
2014)
(Jan. 2014
$s
$s
%
Single Family Residential
72.28
$
1.93
2.7%
Flat Rate - 3 Bdrm Home
$
86.09
Flat Rate - 2 Bdrm Home
Flat Rate - 2 Bdrm Home
n/a
$
35.91
$
36.81
$
0.90
2.5%
Flat Rate - 3 Bdrm Home
n/a
$
43.04
$
44.12
$
1.08
2.5%
Mtr'd Rate - Low Usage
9
$
32.06
$
31.72
$
(0.34)
-1.1%
Mtr'd Rate - Median Usage
16
$
41.26
$
40.76
$
(0.50)
-1.2%
Mtr'd Rate - High Usage
32
$
63.34
$
62.36
$
(0.98)
-1.5%
Muti-Family Residential (1)
130.46
$
127.65
$
(2.81)
-2.2%
Fourplex w/ 1" Wtr. Mtr.
Flat Rate - 2 Bdrm Apartment
Flat Rate - 2 Bdrm Apartment
n/a
$
30.79
$
31.56
$
0.77
2.5%
Duplex w/ 3/4" Mtr.
36
$
61.58
$
59.26
$
(2.32)
-3.8%
Fourplex w/ 1" Wtr. Mtr.
60
$
123.16
$
97.38
$
(25.78)
-20.9%
12 Unit Apartment w/ 1 1/2" Mtr.
150
$
369.48
$
212.08
$
(157.40)
-42.6%
80 Unit Apartment w/ 4" Mtr.
720
$
2,463.20
$
913.14
$ (1,550.06)
-38.6%
-62.9%
40 Unit MH Park w/ 2" Mtr.
250
$
1,231.60
$
334.29
$
(897.31)
-72.9%
Wastewater Bills for Sample of Residential Customers
Combined Water and Wastewater Bills for Sample of Residential Customers
Monthly Wastewater Bill
Change
Winter
Current
Current
Proposed
Proposed
Wtr. Use
Rates
Rates
o/a
Single Family Residential
(CCF)
(Jul. 2013)
(Jul.
2014)
$s
$
Single Family Residential
$
72.28
$
1.93
2.7%
Flat Rate - 3 Bdrm Home
$
86.09
Flat Rate - 2 Bdrm Home
n/a
$
34.44
$
35.47
$
1.03
3.0%
Flat Rate - 3 Bdrm Home
n/a
$
43.05
$
44.34
$
1.29
3.0%
Mtr'd Rate - Low Usage
6
$
39.60
$
40.79
$
1.19
3.0%
Mtr'd Rate - Median Usage
9
$
47.64
$
49.07
$
1.43
3.0%
Mtr'd Rate - High Usage
12
$
55.68
$
57.35
$
1.67
3.0%
Muff -Family Residential (1)
$
130.46
$
127.65
$
(2.81)
-2.2%
Fourplex w/ 1" Wtr. Mtr.
Flat Rate - 2 Bdrm Apartment
n/a
$
34.44
$
35.47
$
1.03
3.0%
Duplex w/ 3/4" Mtr.
16
$
68.88
$
68.39
$
(0.49)
-0.7%
Fourplex w/ 1" Wtr. Mtr.
28
$
137.76
$
116.11
$
(21.65)
-15.7%
12 Unit Apartment w/ 1 1/2" Mtr.
72
$
413.28
$
273.75
$
(139.53)
-33.8%
80 Unit Apartment w/ 4" Mtr.
480
$
2,755.20
$
1,690.68
$ (1,064.52)
-38.6%
40 Unit MH Park w/ 2" Mtr.
180
$
1,033.20
$
615.43
$
(417.77)
-40.4%
Combined Water and Wastewater Bills for Sample of Residential Customers
Notes:
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
THE REED GROUP, INC. PAGE 9
Monthly Wtr/WW Bill
Change
Current
Proposed
Rates
Rates
$s
o/a
Single Family Residential
Flat Rate - 2 Bdrm Home
$
70.35
$
72.28
$
1.93
2.7%
Flat Rate - 3 Bdrm Home
$
86.09
$
88.46
$
2.37
2.8%
Mtr'd Rate - Low Usage
$
71.66
$
72.51
$
0.85
1.2%
Mtr'd Rate - Median Usage
$
88.90
$
89.83
$
0.93
1.0%
Mtr'd Rate - High Usage
$
119.02
$
119.71
$
0.69
0.6%
Muti-Family Residential (1)
Flat Rate - 2 Bdrm Apartment
$
65.23
$
67.03
$
1.80
2.8%
Duplex w/ 3/4" Mtr.
$
130.46
$
127.65
$
(2.81)
-2.2%
Fourplex w/ 1" Wtr. Mtr.
$
260.92
$
213.49
$
(47.43)
-18.2%
12 Unit Apartment w/ 1 1/2" Mtr.
$
782.76
$
485.83
$
(296.93)
-37.9%
80 Unit Apartment w/ 4" Mtr.
$
5,218.40
$
2,603.82
$ (2,614.58)
-50.1%
40 Unit MH Park w/ 2" Mtr.
$
2,264.80
$
949.72
$ (1,315.08)
-58.1%
Notes:
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
THE REED GROUP, INC. PAGE 9
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit I-6
City of Lodi
Water Bills for Sample of Non -Residential Customers
Wastewater Bills for Sample of Non -Residential Customers
Monthly Wtr/WW Bill
Monthly Water Bill
Change
Change
Water
Current
Proposed
Rates
Use
Rates
Rates
$s
Rates
Retail Store
$
190.21
$
(CCF)
(Jan. 2013)
(Jan. 2014)
(Jul. 2014)
$s
$s
Retail Store (w/ 1" mtr.)
48
$
82.76
$
85.38
$
2.62
3.2%
Small Motel (w/ 1" mtr.)
120
$
149.00
$
157.38
$
8.38
5.6%
Restaurant (w/ 1 1/2" mtr.)
160
$
207.59
$
222.25
$
14.65
7.1%
Small Manufacturer (w/ 2" mtr.)
169
$
230.75
$
253.29
$
22.54
9.8%
Grocery Store (w/ 2 mtrs.)
518
$
611.76
$
664.04
$
52.27
8.5%
Big Box Retail (w/ 2 mtrs.)
541
$
633.48
$
687.64
$
54.16
8.5%
Large Retail Store (w/ 2" mtr.)
739
$
815.16
$
931.89
$
116.73
14.3%
Large Office Bldg. (w/ 4" mtr.)
704
$
783.11
$
897.06
$
113.94
14.6%
High School (w/ 3 mtrs.)
2,268
$
2,441.57
$
2,818.13
$
376.56
15.4%
Hospital (w/ 6 mtrs.)
2,963
$
3,505.27
$
4,067.37
$
562.10
16.0%
Indus. Food Processor (w/ 4 mtrs.)
6,025
$
5,973.20
$
6,659.34
$
686.14
11.5%
Indus. Food Processor (w/ 6 mtrs.)
8,565
$
8,376.22
$
9,156.93
$
780.71
9.3%
Wastewater Bills for Sample of Non -Residential Customers
Combined Water and Wastewater Bills for Sample of Non -Residential Customers
Monthly Wtr/WW Bill
Monthly Wastewater Bill
Change
Change
WW
Current
Proposed
Rates
Use
Rates
Rates
$s
Rates
Retail Store
$
190.21
$
(SSUs(Jul.
$
2013)
(Jul. 2014)
Small Motel
$s
%
Retail Store
3.12
$
107.45
$
110.67
$
3.21
3.0%
Small Motel
4.00
$
137.76
$
141.88
$
4.12
3.0%
Restaurant
14.00
$
482.16
$
496.58
$
14.42
3.0%
Small Manufacturer
22.85
$
786.95
$
810.49
$
23.54
3.0%
Grocery Store
25.00
$
861.00
$
886.75
$
25.75
3.0%
Big Box Retail
36.08
$
1,242.60
$
1,279.76
$
37.16
3.0%
Large Retail Store
13.98
$
481.47
$
495.87
$
14.40
3.0%
Large Office Building
92.63
$
3,190.18
$
3,285.59
$
95.41
3.0%
High School
133.93
$
4,612.55
$
4,750.50
$
137.95
3.0%
Hospital
48.56
$
1,672.41
$
1,722.42
$
50.02
3.0%
Industrial Food Processor
639.67
$
22,030.23
$
22,689.09
$
658.86
3.0%
Industrial Food Processor
1,258.06
$
43,327.59
$
44,623.39
$
1,295.80
3.0%
Combined Water and Wastewater Bills for Sample of Non -Residential Customers
THE REED GROUP, INC. PAGE 10
Monthly Wtr/WW Bill
Change
Current
Proposed
Rates
Rates
$s
Retail Store
$
190.21
$
196.05
$
5.83
3.1%
Small Motel
$
286.76
$
299.26
$
12.50
4.4%
Restaurant
$
689.75
$
718.83
$
29.07
4.2%
Small Manufacturer
$
1,017.70
$
1,063.78
$
46.08
4.5%
Grocery Store
$
1,472.76
$
1,550.79
$
78.02
5.3%
Big Box Retail
$
1,876.07
$
1,967.39
$
91.32
4.9%
Large Retail Store
$
1,296.63
$
1,427.76
$
131.13
10.1%
Large Office Building
$
3,973.29
$
4,182.64
$
209.35
5.3%
High School
$
7,054.12
$
7,568.63
$
514.51
7.3%
Hospital
$
5,177.68
$
5,789.79
$
612.11
11.8%
Industrial Food Processor
$
28,003.44
$
29,348.44
$
1,345.00
4.8%
Industrial Food Processor
$
51,703.80
$
53,780.32
$
2,076.52
4.0%
THE REED GROUP, INC. PAGE 10
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
SECTION II. WATER RATES
This section of the report describes water rate recommendations for the City's water
utility. The City's multi-year financial plan was used to determine annual water rate
revenue requirements, and to develop the strategy for meeting current and future financial
obligations. The annual rate revenue requirement is the amount of revenue needed from
water rates to cover estimated operating, maintenance, debt service, and capital program
costs with consideration of other revenues and financial reserves.
Water rate recommendations are also intended to assist the City in the transition to a
fully metered water system and universal usage -based water rates. Rate structure changes
are intended to improve equity across customer classes by better reflecting the cost of
providing service.
CURRENT WATER RATES
The City's current water rates are summarized in Exhibit II -1. Water rates were last
adjusted in January 2013 with a 2.5 percent across-the-board increase based on changes in
he Engineering New Record's 20 -Cities Construction Cost Index (ENR). This index is used
by the City to annually adjust the level of water and wastewater rates.
Exhibit 1-1
City of Lodi
Current Monthly Water Rates
FLAT RATES
USAGE -BASED RATES
Single Family Residential
Single Family Residential
1 Bedroom
$
29.90
Monthly Service Charges
Usage Rates ($/CCF)
2 Bedroom
$
35.91
3/4" meter $ 23.78
Tier 1 (0-10 CCF)
$ 0.92
3 Bedroom
$
43.04
1" meter $ 38.60
Tier 2 (11-50 CCF)
$ 1.38
4 Bedroom
$
51.72
1 1/2" meter $ 75.42
Tier 3 (>50 CCF)
$ 1.82
5 Bedroom
$
62.03
2" meter $ 119.79
6 Bedroom
$
74.44
7 Bedroom
$
89.31
Multi -Family and Non -Residential
(1)
Multi -Family (1)
Monthly Service Charges
Usage Rates ($/CCF)
1 Bedroom
$
25.67
3/4" meter $ 23.78
All water usage
$ 0.92
2 Bedroom
$
30.79
1" meter $ 38.60
3 Bedroom
$
36.94
1 1/2" meter $ 60.24
4 Bedroom
$
44.32
2" meter $ 75.27
Non -Residential
3" meter $ 105.38
Exist. unmetered
Varies
4" meter $ 135.51
6" meter $ 195.68
8" meter $ 255.91
10" meter $ 316.01
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
THE REED GROUP, INC. PAGE 11
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Residential flat rates are based on the number of bedrooms in each dwelling, and were
based on water usage estimates made prior to the availability of water usage data. All flat
rates will be phased out as the installation of water meters is completed. Water usage rates
include a fixed monthly service charge, based on size of the water meter, and volumetric
charges based on a customer's actual water usage. Single family customers are subject to a
three-tier rate structure, which includes a lower initial rate intended for non -discretionary
uses of water and higher rates for discretionary uses intended to provide an incentive to
conserve water. Multi -family and non-residential customers are subject to a uniform water
usage rate.
At present, tenants of multi -family apartments and mobile home parks are billed for
water and wastewater services. As water meters are installed for apartment complexes
and mobile home parks the billing for these services may be transferred from tenants to
property owners.
CUSTOMER BASE AND WATER USAGE DATA
The water utility's customer base is predominately comprised of single family and
multi -family residential customers, along with commercial, industrial, and municipal
customers. Some non-residential customers, including food-processing facilities, use very
large quantities of water. Because the City is not entirely metered total water usage must
be estimated. Exhibit II -2 summarizes customer account and water usage estimates
derived from the City's utility billing system for 2012. With residential accounts
expressed as the number of dwelling units, the water utility customer base is nearly 23,600
accounts and estimated annual water usage is about 16,233 acre-feet (AF). Single family
accounts represent 70 percent of the customers and 58 percent of the water usage. Multi-
family accounts represent 24 percent of the customers and 14 percent of the water usage.
Non-residential accounts comprise about 6 percent of the customer base, and also
represent about 27 percent of annual water usage. The City's largest water users include
several industrial customers (primarily food-processing), as well as the City of Lodi, and
the Lodi Unified School District.
By January 2014, more than one-half of the City's single family residential customers
will be on usage -based water rates, with two- to three -thousand single family customers
transitioning to usage -based rates each year. All single family customers are expected to
be transitioned to usage -based water rates by 2019. The installation of water meters for all
customers is expected to be completed by 2018. About 75 percent of non-residential
customers are metered and have been on usage -based water rates. The City plans to
transition mobile home parks to usage -based rate in 2014, the remaining non-residential
accounts by 2017, and multi -family accounts by 2020.
THE REED GROUP, INC. PAGE 12
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit II -2
City of Lodi
Summary of Water Utility Customer Accounts and Annual Water Usage (1)
Customer Accounts (2)
■ Single Family
■ Multi -Family
1,434 . Non -Residential
Est. Annual Water Usage (AF) (3)
■ Single Family
4,455 • Multi -Family
m Non -Residential
Notes:
(1) Derived from the City's utility billing system from data for 2012.
(2) Total customer accounts equals 23,596. Residential accounts expressed in dwelling units.
(3) Total estimated annual water usage equals 16,233 acre-feet (AF).
ANNUAL WATER REVENUE RATE REQUIREMENT
The City has updated its multi-year financial model with actual revenues and expenses
(pre -audit) for FY 12-13 and the approved budget for FY 13-14. Based on that model, the
City estimates an annual water rate increase of 2.5 percent in January 2014 followed by
annual water rate increases of no more than 3 percent per year thereafter. These rate
increases are believed to be sufficient to meet the utility's operating and maintenance costs,
debt service obligations, and capital program needs through FY 19-20.
The City adjusts its water rates in January of each year based on the annual change in
the ENR, subject to a 3.0 percent cap and concurrence by the City Council. Based on the
current ENR and staff's analysis of financial need, the rate analyses presented herein are
based on a 2.5 percent increase effective in January 2014. This is consistent with the City's
updated financial plan model.
The City anticipates approximately 2,350 additional single family residential customers
will be converted to usage -based rates in January 2014. With that shift, and an overall 2.5
percent rate increase, water rate revenues from flat and usage based customers is estimated
to be $12,931,000, as summarized below
Flat rate revenue $5,781,000
Usage -based rate revenue $7,150,000
Total 2014 water rate revenue $12,931,000
No changes are proposed to the City's flat water rate structure. Therefore, a 2.5 percent
rate increase will mean a 2.5 percent increase to all flat water rates. With a transition of
approximately 2,350 additional single family customers to water meters in January 2014
THE REED GROUP, INC. PAGE 13
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
the water utility will be billing nearly 8,400 customer accounts through usage -based water
rates. The annual water rate revenue requirement for the City's usage -based water rates
will be $7,150,000 for 2014, with this increased portion of the customer base on usage -based
rates. This is the revenue requirement used for the calculation of usage -based water rates.
COST OF SERVICE ANALYSIS AND RATE DESIGN
The annual water rate revenue requirement of $12,931,000 for 2014 has been split
between flat and usage -based rates based on the number of accounts and water use
characteristics of the customer base within each group. The cost of service analysis for
each group is separately presented below.
Flat Rate Cost of Service Analysis
As the City will be phasing out the system of flat water rates in the next few years, no
changes to the rate structure are proposed. The City's flat rates are based on the number of
bedrooms in each single family and multi -family dwelling unit. Non-residential flat rate
accounts have each been assigned a unique single family equivalency factor, based on
estimated usage characteristics, relative to single family homes.
Exhibit II -3 summarizes the distribution of the 2014 revenue requirement for flat rate
accounts of various customer types, and shows the calculation of the monthly flat water
rates. Monthly flat water rates are proposed to increase by 2.5 percent in January 2014.
Usage -Based Rate Cost of Service Analysis
A more detailed cost of service analysis was prepared for the City's usage -based water
rates. The analysis was based on the number and type of customers that will be subject to
these rates in 2014.
Once the 2014 usage -based revenue requirement of $7,150,000 was determined, the
next step in the rate setting process is to evaluate the cost of providing service. Water rate
calculations contained herein are intended to generate the level of revenue commensurate
with the revenue requirement for usage -based customers. The manner in which each
customer is responsible for the water utility's costs is the subject of the cost of service
analysis.
The water utility incurs certain types of costs associated with making water service
available to customers. Other costs are incurred as a direct result of customer water usage.
The cost of service analysis is intended to allocate the costs of providing water service to
customers in proportion to customers' water demands and service requirements. There are
many approaches to cost of service analysis; some are more complex than others. The
approach used herein is commensurate with the data available, the distinctions currently
made between various types of customers, and the requirement to fairly and to reasonably
reflect the differences in service provisions to different customers.
THE REED GROUP, INC. PAGE 14
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit II -3
City of Loda
2014 Flat Water Rate Cost of Service Analvsis and Rate Calculation
No. of Accts.
Customer Group or DUs (1)
Equivalency
Factor (2)
Single Family
Equivalents
(3)
% of
Total
Alloc. of
Revenue
R mt.
Monthly Flat
Water Rate
Single Family Residential
1 Bedroom
549
0.83
458
3.5%
$
201,900
$
30.65
2 Bedroom
3,908
1.00
3,908
29.9%
$
1,726,500
$
36.81
3 Bedroom
2,787
1.20
3,344
25.5%
$
1,476,000
$
44.12
4 Bedroom
288
1.44
415
3.2%
$
183,200
$
53.01
5 Bedroom
23
1.73
40
0.3%
$
17,500
$
63.58
6 Bedroom
1
2.07
2
0.0%
$
900
$
76.30
Multi -Family Residential
1 Bedroom
2,177
0.71
1,556
11.9%
$
687,300
$
26.31
2 Bedroom
3,311
0.86
2,839
21.7%
$
1,253,900
$
31.56
3 Bedroom
129
1.03
133
1.0%
$
58,600
$
37.86
4 Bedroom
2
1.23
2
0.0%
$
1,100
$
45.43
Non -Residential
Various
271
Varies
394
3.0%
$
174,100
Varies (4)
Totals
13,446
13,091
$
5,781,000
Notes:
(1) Estimate based on transition of about 2,350 additional single family accounts to usage -based billing.
(2) From existing flat water rate structure.
(3) Based on one single family equivalent equal to a 2 -bedroom home.
(4) All non-residential flat rates increase by 2.5 percent.
The cost allocation methodology used herein begins by assigning all costs to one of
three categories. The cost allocation process considers the level of detail available in the
City's financial structure, as well as professional judgment and experience. The three
categories include:
• Customer costs, such as meter reading, billing, and customer service, are fixed
costs that tend to vary as a function of the number of customer being served.
Customer costs are allocated to customers based on the number of accounts.
That is, every customer will pay an equal share of customer -related costs.
• Capacity costs are also fixed costs, however, these tend to vary in relation to the
capacity of the water system. Customers that place (or can place) a greater or
lesser burden on the capacity of the water system should bear greater or lesser
shares of these costs. The sizing of the water system is based on the potential
demand that each customer could place on the water system. Capacity costs are
allocated to customers based on the size (hydraulic capacity) of the water meter.
The hydraulic capacity reflects the potential demand that a customer could
place on the water system at any given time. A customer with a large meter
will be assigned a larger share of fixed capacity -related costs than one with a
small meter. Capacity costs include costs associated with the water system's
capacity including contributions to the capital program, debt service,
maintenance costs, etc.
THE REED GROUP, INC. PAGE 15
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
• Commodity costs are variable costs that vary with the amount of actual water
use. Water purchases, energy costs, and chemical costs are primary examples.
However, because certain fixed costs are reasonably assigned to customers on
the basis of usage (e.g., water treatment staff -related costs), some fixed costs are
frequently included in the commodity component. Recovering a portion of
fixed costs on the basis of actual water usage has the added benefit for
increasing the water conservation incentive reflected in the water rates.
The water conservation best management practice for water rates (BMP 1.4), as
promulgated by the California Urban Water Conservation Council (CUWCC) specifies that
at least 70 percent of water rate revenue be generated through water usage charges. While
the City is not subject to the CUWCC's requirements, such an approach also provides
customers with added ability to affect the amount of their water bill by managing water
usage. The allocation of costs, as well as the resulting rate calculations, reflects a balanced
approach to considering different rate -setting objectives. Based on a review of water
system financial information, the cost allocation resulted in a distribution of the costs to
customer, capacity, and commodity components of 5 percent, 40 percent, and 55 percent,
respectively.
Exhibit II4 shows how the usage -based revenue requirement is allocated to cost
components, as well as the resulting determination of water rates. Usage -based water rates
include a fixed monthly service charge, to recover customer and capacity costs, and water
usage rates, to recover commodity costs.
The monthly service charges are calculated by allocating customer costs equally across
all customer accounts and by allocating capacity related costs in proportion to meter
capacity. As a result, monthly service charges increase with increasing meter sizes. While
the current monthly service charges also vary with meter size the variation across meter
sizes does not fully reflect the capacity relationship across meter sizes. With the correct
capacity factors applied monthly service charges for the smaller meter sizes decrease while
the charges for larger meters increase. The increase is greatest for the largest meter sizes
but is, nevertheless, consistent with cost of service principles and the capacity relationship.
The City's water rate structure includes a uniform water usage rate for multi -family
and non-residential customers. The uniform water rate is calculated simply by dividing
the commodity costs by the total water sales volume.
In 2009, the City implemented a three-tier water rate structure for single family
customers. The tier structure provides a lower cost for initial water usage, estimated to
reflect indoor water needs that tend to be non -discretionary, and higher costs for more
discretionary uses of water. It also serves as a water conservation incentive. The City
obtains its water supply from both groundwater and surface water purchased from the
Woodbridge Irrigation District. The first tier rate generally reflects the cost of groundwater
production (as well as other commodity costs recovered through the usage rates), and the
third tier rate generally reflects the cost of purchasing and treating surface water (as well as
other commodity costs recovered through the usage rates).
THE REED GROUP, INC. PAGE 16
Exhibit II -4
City of Lode
2014 Usaae-Based Water Rate Cost of Service Analvsis and Rate Calculation
a
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Meter Size
3/4"
V
1 1/2"
2"
3"
4"
6"
8"
10"
Total
No. of Accounts
Single Family
8,392
1
2
8,395
Multi -Family
14
14
Comm./Industrial
450
133
143
274
51
43
14
1
1,109
Municipal
2
7
7
17
6
10
1
50
Outside City
1
1
2
4
Total
8,858
141
152
292
57
54
15
2
1
9,572
Hydr. Cap. Factor
1.00
1.67
3.33
5.33
10.00
16.67
33.33
53.33
76.67
No. of 3/4" Equiv. Meters
8,858
235
506
1,556
570
900
500
107
77
13,310
Monthly Service Charges
Customer Cost
$ 3.11
$ 3.11
$
3.11
$ 3.11 $
3.11
$
3.11
$ 3.11
$ 3.11
$
3.11
Capacity Cost
$ 17.91
$ 29.90
$
59.63
$ 95.44 $
179.07
$
298.51
$ 596.83
$ 954.97
$
1,372.91
Monthly Service Chrg.
$ 21.02
$ 33.02
$
62.74
$ 98.56 $
182.18
$
301.62
$ 599.94
$ 958.08
$
1,376.02
Ann. Rev. ($1,OOOs)
$ 2,234,301
$ 55,864
$
114,441
$ 345,338 $
124,611
$
195,449
$ 107,990
$ 22,994
$
16,512
$
3,217,500
Water Usage Rates
Usage CF
Rate
Ann. Rev.
2014 Revenue Requirement
Single Family
$/CF
Customer Cost
$ 357,500
5.0%
Tier 1
0-1000 CF
45.4%
89,474,939
$
0.0093
$
828,551
Capacity Cost
$ 2,860,000
40.0%
Tier 2
1001-5000
CF
50.0%
98,680,437
$
0.0123
$
1,215,348
Commodity Cost
$ 3,932,500
55.0%
Tier 3
> 5000 CF
4.6%
9,062,070
$
0.0154
$
139,510
Total Rev. Reqmt.
$ 7,150,000
Multi -Family
615,451
$
0.0111
$
6,814
Comm./Ind.
139,380,294
$
0.0111
$
1,543,090
2.5%
Municipal
16,268,150
$
0.0111
$
180,106
Outside City
1,723,570
$
0.0111
$
19,082
355,204,911
$
3,932,500
a
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CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
At present, the uniform rate for multi -family and non-residential accounts is equal to
the first tier rate for single family customers. Equity is improved between the single
family, multi -family, and non-residential usage rates with the proposed rates because the
weighted average rate across the three single family tiers equals the uniform rate
applicable to multi -family and non-residential accounts.
PROPOSED WATER RATE SCHEDULES
Current and proposed water rate schedules for both flat rates and usage -based rates are
presented in Exhibits II -5 and II -6, respectively. All rates reflect an overall 2.5 percent
revenue increase relative to the current water rates. However, due to the changes in the
usage -based rate structure the change in customer water bills will vary, and will be a
function of customer class, meter size, and monthly water usage, as previously presented
in the section Usage -Based Rate Cost of Service Analysis (above). Illustrative examples of
customer bill impacts are included in Exhibits I-5 and I-6, earlier in the report.
Exhibit II -5
City of Lodi
Current and Proaosed Flat Water Rates
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments,
condominiums, and mobile home parks.
THE REED GROUP, INC. PAGE 18
Current
Jan.2013
Proposed
Jan.2014
Rate Increase -->
2.5%
FLAT RATES
Single Family Residential
1 Bedroom
$
29.90
$
30.65
2 Bedroom
$
35.91
$
36.81
3 Bedroom
$
43.04
$
44.12
4 Bedroom
$
51.72
$
53.01
5 Bedroom
$
62.03
$
63.58
6 Bedroom
$
74.44
$
76.30
Multi -Family (1)
1 Bedroom
$
25.67
$
26.31
2 Bedroom
$
30.79
$
31.56
3 Bedroom
$
36.94
$
37.86
4 Bedroom
$
44.32
$
45.43
Non -Residential
Existing unmetered
Varies
+2.5%
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments,
condominiums, and mobile home parks.
THE REED GROUP, INC. PAGE 18
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit II -6
City of Lodi
Current and Proposed Usaae-Based Water Rates
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and
mobile home parks.
(2) These rate schedules are revenue neutral relative to 2014, and would be subject to
annual inflationary adjustments based on changes in the ENR.
Three -Year Transition for Usage -Based Rates
The proposed modifications to the usage -based water rate structure include changes
that may impact some non-residential customers (those with large meters and/or high
water usage) more dramatically than other customers. This is due to both the increased
monthly service charges for larger meter sizes, as well as the necessary increase in the
uniform water rate to bring it up from the single family first tier rate to the weighted
average across all tiers. (At present, nearly all multi -family accounts still pay for water
service under flat rates; therefore they will not directly be affected by the changes in the
usage -based rate structure.)
To ease the potential affects of the proposed new water rate structure, it is
recommended that the usage -based rate structure be phased in over a three-year period.
The rate schedule presented in Exhibit II -6 illustrates the transition. The rate schedules for
THE REED GROUP, INC. PAGE 19
Current
Jan.2013)
(Jan.2014)
Proposed
Proposed
(Jan.2015)
(Jan.2016
Proposed
Rate Increase -->
2.5%
2
2
USAGE -BASED RATES
Monthly Service Charge
Single Family
3/4" meter
$
23.78
$
23.26
$
22.14
$
21.02
1" meter
$
38.60
$
37.38
$
35.20
$
33.02
1 1/2" meter
$
75.42
$
72.45
$
67.60
$
62.74
2" meter
$
119.79
$
114.71
$
106.64
$
98.56
Multi -Family and Non -Residential (1)
3/4" meter
$
23.78
$
23.26
$
22.14
$
21.02
1" meter
$
38.60
$
37.38
$
35.20
$
33.02
1 1/2" meter
$
60.24
$
62.08
$
62.41
$
62.74
2" meter
$
75.27
$
84.29
$
91.43
$
98.56
3" meter
$
105.38
$
132.74
$
157.46
$
182.18
4" meter
$
135.51
$
193.14
$
247.38
$
301.62
6" meter
$
195.68
$
333.69
$
466.82
$
599.94
8" meter
$
255.91
$
494.23
$
726.16
$
958.08
10" meter
$
316.01
$
674.61
$
1,025.32
$
1,376.02
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF)
$
0.92
$
0.94
$
0.94
$
0.93
Tier (11-50 CCF)
$
1.38
$
1.35
$
1.29
$
1.23
Tier 3 (>50 CCF)
$
1.82
$
1.76
$
1.65
$
1.54
Multi -Family and Non -Residential (1)
All water usage
$
0.92
$
1.00
$
1.06
$
1.11
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and
mobile home parks.
(2) These rate schedules are revenue neutral relative to 2014, and would be subject to
annual inflationary adjustments based on changes in the ENR.
Three -Year Transition for Usage -Based Rates
The proposed modifications to the usage -based water rate structure include changes
that may impact some non-residential customers (those with large meters and/or high
water usage) more dramatically than other customers. This is due to both the increased
monthly service charges for larger meter sizes, as well as the necessary increase in the
uniform water rate to bring it up from the single family first tier rate to the weighted
average across all tiers. (At present, nearly all multi -family accounts still pay for water
service under flat rates; therefore they will not directly be affected by the changes in the
usage -based rate structure.)
To ease the potential affects of the proposed new water rate structure, it is
recommended that the usage -based rate structure be phased in over a three-year period.
The rate schedule presented in Exhibit II -6 illustrates the transition. The rate schedules for
THE REED GROUP, INC. PAGE 19
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
all three years are revenue neutral to each other (and reflect an overall 2.5 percent revenue
increase over the current rates). Therefore, in both 2015 and 2016 the rate schedules will
need to be adjusted to incorporate the inflationary adjustments to the rates, based on
changes in the ENR.
The usage -based water rate schedule presented in Exhibit I-2 reflect the proposed rate
structure phased implementation, as well as reflecting the maximum potential rate
adjustment of 3.0 percent per year, based on ENR indexing criteria.
METER INSTALLATION AND TRANSITION TO USAGE -BASED BILLING
The City continues to install water meters on all unmetered water service connections.
Below is a summary of the status of the metering program and plans to transition
customers from flat water rates to usage -based water rates. Each January an additional
batch of customers is transitioned to usage -based rates.
• Single Family - More than 50 percent of single family homes now have water
meters with two- to three -thousand additional meters installed each year. The
transition to usage -based rates is expected to be completed by January 2019.
• Mobile Home Parks - All mobile home parks have now been provided with
master water meters on the connections serving each park. The City plans to
convert all mobile home parks to usage -based rates in January 2014. With that
transition, billing for water service will also shift from tenant to the park owner.
Multi -Family - The City is currently installing water meters for apartment and
condominium complexes, and plans to complete these installations by 2018. All
multi -family accounts (including duplexes, triplexes, and fourplexes) are
expected to transition to usage -based water rates in January 2020. Similar to
mobile home parks, at that time, billing may also shift from tenant to property
owner.
Non -Residential - At present, about 75 percent of non-residential accounts have
water meters and are subject to usage -based water rates. Remaining unmetered
accounts will be metered in the next few years, and the City expects to
implement usage -based rates on these accounts by January 2017. Non-
residential accounts include commercial, industrial, institutional, and dedicated
irrigation account types.
The transition from flat rates to usage -based rates may affect the total amount of
customers' water bills. Monthly bills may be higher in the summer during the irrigation
season, and lower in winter months when water demand is lower. For single family
customers many will have a decrease in their annual water cost with the transition to
usage -based rates, while others will have an overall increase. Multi -family customers will
generally benefit from the transition to usage -based water rates. As noted previously non-
residential customers may have larger water bills with the proposed rates.
THE REED GROUP, INC. PAGE 20
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
SECTION III: WASTEWATER RATES
This section of the report describes wastewater rate recommendations for the City's
wastewater utility. The City's multi-year financial plan was used to determine annual
wastewater rate revenue requirements, and to develop the strategy for meeting current
and future financial obligations. The annual rate revenue requirement is the amount of
revenue needed from wastewater rates to cover estimated operating, maintenance, debt
service, and capital program costs with consideration of other revenues and financial
reserves.
Wastewater rate recommendations are also intended to assist the City in the transition
to a fully metered water system and usage -based wastewater rates. Rate structure changes
are intended to improve equity across customer classes by better reflecting the cost of
providing service.
CURRENT WASTEWATER RATES
The City's current wastewater rates are summarized in Exhibit III -1. Wastewater rates
were last adjusted in July 2013 with a 2.5 percent across-the-board increase based on
changes in he Engineering New Record's 20 -Cities Construction Cost Index (ENR). This
index is used by the City to annually adjust the level of water and wastewater rates.
Residential flat rates are based on the number of bedrooms in each dwelling, and were
based on estimated sewer flows made prior to the availability of water usage data. Non-
residential wastewater rates are based on the number of sanitary sewer units (SSUs) for
each account, as determined by City staff. One SSU is equivalent to a two-bedroom single
family home. All flat wastewater rates will be phased out as the installation of water
meters is completed. Wastewater usage -based rates are currently available for single
family customers. They include a fixed monthly service charge for each dwelling unit, and
a usage charge based on a customer's winter water usage. Winter water usage is used for
sewer flow estimation since irrigation usage is minimized during this time period. The
City uses the average monthly water usage from December through February for
determining the average winter water use, and hence estimated monthly sewer flow.
The City has a small number of large industrial customers (primarily food processing).
Each of these customers pays for wastewater service based on actual wastewater flows and
loading characteristics. Industrial rates for users discharging into the City's domestic
sewer collection system are included in Exhibit III -1. Separate (lower) rates apply to the
few industrial users that discharge into the industrial line, which requires less treatment.
Those rates are outside of the scope of this study.
At present, tenants of multi -family apartments and mobile home parks are individually
billed for water and wastewater services. As water meters are installed for apartment
complexes and mobile home parks the billing for these services may be transferred from
tenants to property owners.
THE REED GROUP, INC. PAGE 21
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit III -1
City of Lodi
Current Monthly Wastewater Rates
FLAT RATES
USAGE -BASED RATES
Single Family Residential
Single Family Residential
1 Bedroom
$ 25.83
Monthly Service Charge
$ 23.52
2 Bedroom
$ 34.44
Usage Rate ($/CCF) (3)
$ 2.68
3 Bedroom
$ 43.05
4 Bedroom
$ 51.66
Multi -Family Residential
5 Bedroom
$ 60.27
Not Available
6 Bedroom
$ 68.88
7 Bedroom
$ 77.49
Non -Residential
Multi -Family Residential (1)
Not Available
1 Bedroom
$ 25.83
2 Bedroom
$ 34.44
Industrial (4)
3 Bedroom
$ 43.05
Flow (per MG)
$ 3,487.41
4 Bedroom
$ 51.66
BOD (per 1,000 lbs)
$ 575.51
Mobile Homes
SS (per 1,000 lbs)
$ 359.85
Any Size
$ 25.83
Non -Residential
Per SSU (2)
$ 34.44
Notes:
(1) Includes duplexes, triplexes, fourplexes, apartments, and condominiums.
(2) The number of sanitary sewer units (SSUs) is determined for each customer
based on usage characterstics and factors adopted by the City.
(3) Usage charge based on winter water use determined as the average from
the prior December -February period. Adjusted each July for each account.
(4) Annual charges apply to industrial users discharging into the domestic sanitary
sewer system. Separate charges apply to discharges to the industrial line.
CUSTOMER BASE AND WASTEWATER FLOW ESTIMATES
Like the water utility, the wastewater utility's customer base is predominately
comprised of single family and multi -family residential customers, along with commercial,
industrial, and municipal customers. Some non-residential customers, including food-
processing facilities, generate very large quantities of wastewater. Because the City is not
entirely metered water usage and sewer flows must be estimated. It is fairly common to
use winter water usage data to estimate wastewater flows. During the winter irrigation
water use (which does not enter the wastewater system) is minimized.
Exhibit III -2 summarizes customer account and wastewater flow estimates derived
from the City's utility billing system for 2012. With residential accounts expressed as the
number of dwelling units, the wastewater utility customer base is about 23,600 accounts
and estimated annual wastewater flow is about 1,184 million gallons (MG). Single family
accounts represent 70 percent of the customers and 62 percent of the wastewater flow.
Multi -family accounts represent 22 percent of the customers and 12 percent of the
wastewater flow. Non-residential accounts, including commercial, industrial, and
THE REED GROUP, INC. PAGE 22
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
institutional, comprise about 8 percent of the customer base, and also represent about 23
percent of annual wastewater. There are eight large industrial customers (discharging to
the domestic system), and they generate about 3 percent of the annual wastewater flow.
The City's largest wastewater users include several of the industrial customers (primarily
food-processing), as well as the City of Lodi, and the Lodi Unified School District.
Exhibit III -2
City of Lodi
Summary of Wastewater Utility Customer Accounts and Annual Wastewater Flow (1)
Customer Accounts
■ Single Family
■ Multi -Family
Non -Residential
Est. Annual Wastewater Flow (MG)
■ Single Family
■ Multi -Family
w Non -Residential
58 ■ Industrial
Notes:
(1) Derived from the City's utility billing system from data for 2012.
(2) Total customer accounts equals 23,614. Residential accounts expressed in dwelling units.
(3) Total estimated annual wastewater flow equals 1,908 million gallons (MG).
In July 2012 the City moved an initial batch of single family residential customers
(about 2,940) to usage -based wastewater rates, as a pilot test of those wastewater rates.
Additional single family customers will be transitioned beginning in July 2014, with an
additional batch each July until all have been transitioned. By July 2020, all of the City's
single family residential customers will be on usage -based wastewater rates. The
transition of multi -family and non-residential wastewater customers to usage -based
wastewater rates will lag the transition to usage -based water rates. In the near term, the
focus will be on mobile home parks and school accounts. Non-residential customers will
need to be categorized into strength classifications (as described later in this section) before
the transition can be made.
ANNUAL WASTEWATER REVENUE RATE REQUIREMENT
The City updated its multi-year financial model with actual revenues and expenses
(pre -audit) for FY 12-13 and the approved budget for FY 13-14. Based on that model, the
City estimates annual wastewater rate increases of up to 3 percent per year may be
required. These increases are believed to be sufficient to meet the utility's operating and
maintenance costs, debt service obligations, and capital program needs through FY 19-20.
THE REED GROUP, INC. PAGE 23
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
The City adjusts its wastewater rates in July of each year, and the rate analyses
presented herein are based on a 3 percent increase effective in July 2014. This is consistent
with the City's financial plan model. The actual rate increase will be based on the change
in the ENR, but will be no more than 3 percent.
The City anticipates an additional 3,700 single family residential customers will be
converted to usage -based rates in July 2014. With that shift, and an overall 3 percent rate
increase, water rate revenues from flat and usage based customers is estimated to be
$14,570,000, as summarized below
Flat rate revenue $9,751,000
Usage -based rate revenue $4,461,000
Industrial line rate revenue $358,000
Total 2014 water rate revenue $14,570,000
No changes are proposed to the City's flat wastewater rate structure. Therefore, a 3
percent rate increase will mean a 3 percent increase to all flat wastewater rates. With a
transition of approximately 3,700 additional single family customers to usage -based rates
in July 2014 the wastewater utility will be billing nearly 6,650 customer accounts through
usage -based rates. The annual wastewater rate revenue requirement for the City's usage -
based wastewater rates will be $4,461,000 for FY 14-15, with this growing portion of the
single family residential customer base on usage -based rates. This $4,461,000 includes
$937,000 related to industrial users that discharge into the domestic collection system.
Industrial users on the industrial line are subject to a separate treatment process, and
different rates (outside of the scope of this study), and represent about $358,000 of the total
FY 14-15 wastewater rate revenue requirement.
COST OF SERVICE ANALYSIS AND RATE DESIGN
The annual wastewater rate revenue requirement of $14,570,000 for FY 14-15 has been
split between flat rates, usage -based rates, and industrial charges based on the number of
accounts and wastewater use characteristics of the customer base within each group. The
cost of service analysis for each group is separately presented below.
Flat Rate Cost of Service Analysis
As the City will be phasing out the system of flat wastewater rates in the next several
years, no changes to the rate structure are proposed. The City's flat rates are based on the
number of bedrooms in each single family and multi -family dwelling unit. Non-
residential flat rate accounts have each been assigned a unique sanitary sewer unit (SSU)
factor, based on estimated usage characteristics, relative to a 2 -bedroom single family
home.
Exhibit III -3 summarizes the distribution of the FY 14-15 revenue requirement for flat
rate accounts of various customer types, and shows the calculation of the monthly flat
wastewater rates with a 3 percent increase. Monthly flat water rates are proposed to
increase by no more than 3 percent in July 2014, with the actual adjustment dependent on
the annual change in the ENR, with a 3 percent cap.
THE REED GROUP, INC. PAGE 24
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit III -3
City of Loda
FY 14-15 Flat Wastewater Rate Cost of Service Analvsis and Rate Calculation
Customer Group
No. of
Accts. or
DUs (1)
SSU
Equivalency
Factor (2)
Sanitary
Sewer Units
(SSUs) (3)
% of
Total
Alloc. of
Revenue
R mt.
Monthly
Flat WW
Rate
Single Family Residential
1 Bedroom
378
0.75
284
1.2%
$
120,700
$
26.60
2 Bedroom
3,073
1.00
3,073
13.4%
$
1,308,000
$
35.47
3 Bedroom
5,531
1.25
6,914
30.2%
$
2,943,000
$
44.34
4 Bedroom
738
1.50
1,107
4.8%
$
471,200
$
53.21
5 Bedroom
89
1.75
156
0.7%
$
66,300
$
62.08
6 Bedroom
2
2.00
4
0.0%
$
1,700
$
70.95
7 Bedroom
1
2.25
2
0.0%
$
1,000
$
79.81
Duplexes, Triplexes, Fourplexes,
Apartments, and Condominiums
1 Bedroom
1,359
0.75
1,019
4.4%
$
433,800
$
26.60
2 Bedroom
3,517
1.00
3,517
15.4%
$
1,496,800
$
35.47
3 Bedroom
164
1.25
205
0.9%
$
87,300
$
44.34
4 Bedroom
3
1.50
5
0.0%
$
1,900
$
53.21
Mobile Homes
Any Size
492
0.75
369
1.6%
$
157,000
$
26.60
Non -Residential
Per SSU
1,853
Varies
6,255
27.3%
$
2,662,300
$
35.47
Totals
17,200
22,908
$
9,751,000
Notes:
(1) Estimate based on transition of about 3,700 additional single family accounts to usage -based billing.
(2) From existing flat wastewater rate structure.
(3) Based on one sanitary sewer unit (SSU) equivalent to a 2 -bedroom home.
Usage -Based Rate Cost of Service Analysis
A more detailed cost of service analysis is warranted for the City's usage -based
wastewater rates. However, the City does not yet have sufficient information for the
complete development of wastewater rates that consider wastewater flow as well as
different strength categories for various types of non-residential customers. The following
steps will need to be taken in order for fully develop these wastewater rates:
• All non-residential customers should be assigned to a low, medium, or high
strength category based on type of business. City staff and consultant plan to
work on this jointly in 2014 using industry guidelines for assigning different
types of businesses. It is estimated that about 80 percent of non-residential
users will fall into a low strength category, 15 percent into medium strength,
and 5 percent into high strength.
• The size of water meters should be identified (or estimated) for all multi -family
and non-residential accounts. At present, about 75 percent of non-residential
accounts are metered. The City will begin metering multi -family accounts and
the remaining non-residential accounts in a few years. Estimates of future
meter sizes would be adequate to move forward with rate analyses.
THE REED GROUP, INC. PAGE 25
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
• Estimate wastewater flow from each customer class based on winter water
usage data. Data is now becoming available for single family customers, and is
available for most non-residential accounts (those with water meters), but not
for multi -family customers or about one-quarter of non-residential customers.
Once a significant portion of multi -family customers have been metered it may
be possible to develop reasonable estimates for this customer class. It may also
be possible to extrapolate water usage data from existing metered non-
residential accounts to those that are unmetered, though some uncertainty
would remain because of the non-homogenous nature of non-residential water
use.
• Assign standard biochemical oxygen demand (BOD) and suspended solids (SS)
loading factors to residential and low, medium, and high strength non-
residential customer categories. This would be accomplished using available
industry guidelines, as well as through calculations that seek to balance
calculated wastewater flow and loading data from wastewater customers with
the actual inflow data at the City's White Slough wastewater treatment plant.
Under current usage -based wastewater rates, all single family customers are subject to
the same fixed monthly service charge, even if meters vary in size. This is due to the fact
that variation in meter sizes for single family homes is due to either landscape irrigation
requirements or fire flow capacity requirements within the home. It is not related to
wastewater capacity needs. The independence from meter size does not extend to other
customer classes, however, because demand characteristics (for both water and
wastewater) are much more varied for each customer connection.
The proposed usage -based wastewater rates for FY 14-15 extend the current usage -
based rates applicable for single family customers to include fixed monthly service charges
based on meter size that should be applied to multi -family and non-residential accounts.
The wastewater usage rate for multi -family customers would be the same as that for single
family customers. Placeholder estimates are also provided for non-residential low,
medium, and high strength categories. Proposed industrial rates reflect a 3.0 percent
overall increase in each rate component.
The development of fixed monthly wastewater service charges for multi -family and
non-residential accounts follows the same basic cost allocation methodology as for water
rates. In this case, a review of wastewater costs resulted in a recommended allocation of
the wastewater rate revenue requirement to customer, capacity, and commodity
components. The allocation of costs, as well as the resulting rate calculations, reflects a
balanced approach to considering different rate -setting objectives. Based on a review of
wastewater system financial information, the cost allocation resulted in a distribution of
the costs to customer, capacity, and commodity components of 5 percent, 45 percent, and
50 percent, respectively. Like the water rates, the monthly service charge will recover
customer and capacity costs, and usage rates will recover commodity costs.
Exhibit III4 summarizes the calculation of fixed monthly wastewater service charges
based on size of the water meter. The monthly service charges are calculated by allocating
customer costs equally across all customer accounts and by allocating capacity related costs
in proportion to meter capacity.
THE REED GROUP, INC. PAGE 26
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit III -4
City of Loda
FY 14-15 Monthly Wastewater Service Charae Calculation
Customer Group
Customer
Costs (1)
Capacity
Costs (2)
Hydraulic
Capacity
Factor (3)
Monthly
Service
Char a (4)
Single Family Residential
All Connections
$
2.42
$
21.80
1.00
$
24.23
Multi -Family and Non -Residential
3/4" meter
$
2.42
$
21.80
1.00
$
24.23
1" meter
$
2.42
$
36.41
1.67
$
38.83
1 1/2" meter
$
2.42
$
72.60
3.33
$
75.03
2" meter
$
2.42
$
116.21
5.33
$
118.63
3" meter
$
2.42
$
218.03
10.00
$
220.45
4" meter
$
2.42
$
363.46
16.67
$
365.88
6" meter
$
2.42
$
726.70
33.33
$
729.12
8" meter
$
2.42
$
1,162.76
53.33
$
1,165.18
Notes:
(1) Based on 5 percent of revenue requirement allocated equally to each customer.
(2) Based on 45 percent of revenue requirement allocated to each customer in
in proportion to meter capacity.
(3) Meter capacity in relation to capacity of a 3/4" water meter.
(4) Sum of customer and capacity costs for each meter size.
The City's wastewater rate structure currently includes a uniform wastewater usage
rate for single family customers. For FY 14-15, that rate will be increased by up to 3.0
percent. The same rate would also apply to multi -family customers, as the strength
characteristics (BOD and SS) for single family and multi -family customers are the same.
Wastewater flows for single family customers are estimated based on the average
monthly water use from December through February of each year. This average winter
water use is a reasonable estimate of wastewater flow throughout the year, because it
generally reflect water usage in the absence of irrigation demands. Each July, the City
determines a wastewater usage charge based on the winter water use and the applicable
wastewater usage rate. The monthly service charge is then added to the usage charge to
arrive at the total wastewater bill. This bill amount then remains fixed until the following
July, when the process is repeated with the then most recent winter water use data and
current wastewater rates.
Winter water use can be used to determine wastewater usage charges for multi -family
and non-residential customers as well. One potential problem, however, could occur with
businesses that have a seasonal component where winter water usage did not necessarily
provide a reasonable estimate for wastewater flow throughout the year. It is
recommended that the Director of Public Works be extended authority to adjust the
wastewater flow volume (usage) for individual customers where this is a concern.
THE REED GROUP, INC. PAGE 27
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Wastewater utilities generally identify different strength -based usage charges for non-
residential customers due to the variation in waste discharges. A fairly simple approach to
strength -based rates, and one recommended for the City, is to establish low, medium, and
high strength categories. All non-residential customers (with the exception of industrial
customers) would be assigned to one of these categories, based on the type of business. A
higher usage rate would be established for the higher strength categories, commensurate
with the costs of removing BOD and SS for wastewater.
Until non-residential customers can be assigned to a strength category, and additional
meter size and water use data obtained, it is recommended that the City use "placeholder "
estimates for strength -based wastewater rates for non-residential customers. These would
give City staff, as well as customers, a sense for what future rates may be like under this
rate approach.
PROPOSED WASTEWATER RATE SCHEDULES
Current and proposed wastewater rate schedules for both flat rates and usage -based
rates are presented in Exhibits III -5 and III -6, respectively. All rates reflect an overall 3.0
percent revenue increase relative to the current wastewater rates.
Exhibit III -5
City of Lodi
Current and Proposed Flat Wastewater Rates
Notes:
(1) Actual rate adjustment will depend on the annual change in the ENR, and
will be no more than 3 percent.
THE REED GROUP, INC. PAGE 28
Current
Jul. 2013
Proposed
Jul. 2014
Rate Increase 1 -->
3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
25.83
$
26.60
2 Bedroom
$
34.44
$
35.47
3 Bedroom
$
43.05
$
44.34
4 Bedroom
$
51.66
$
53.21
5 Bedroom
$
60.27
$
62.08
6 Bedroom
$
68.88
$
70.95
7 Bedroom
$
77.49
$
79.81
Duplexes, Triplexes, Fourplexes, Apartments, and Condominiums
1 Bedroom
$
25.83
$
26.60
2 Bedroom
$
34.44
$
35.47
3 Bedroom
$
43.05
$
44.34
4 Bedroom
$
51.66
$
53.21
Mobile Homes
Any Size
$
25.83
$
26.60
Non -Residential
Per SSU
$
34.44
$
35.47
Notes:
(1) Actual rate adjustment will depend on the annual change in the ENR, and
will be no more than 3 percent.
THE REED GROUP, INC. PAGE 28
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
Exhibit III -6
City of Lodi
Current and Pr000sed Usaae-Based Wastewater Rates
Notes:
(1) Actual rate adjustment will depend on the annual change in the ENR, and
will be no more than 3 percent.
(2) Usage charge based on winter water use determined as the average from
the prior December -February period. Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
Wastewater Rates for Schools
During this study, a separate analysis was performed to examine the water use
characteristics and estimate wastewater flows for schools in the Lodi Unified School
District (LUSD). At present, schools are charged for wastewater service based on student
population. High schools are assessed based on 15 students per SSU, and elementary and
middle schools are assessed based on 20 students per SSU. An examination of winter
water use data (excluding December due to the winter break), as well as consideration of
THE REED GROUP, INC. PAGE 29
Current
Jul. 2013
Proposed
Jul. 2014
Rate Increase (l)-->
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family (per DU)
$
23.52
$
24.23
Multi -Family and Non -Residential
3/4" meter
$
24.23
1" meter
$
38.83
1 1/2" meter
$
75.03
2" meter
$
118.63
3" meter
$
220.45
4" meter
$
365.88
6" meter
$
729.12
8" meter
$
1,165.18
Usage Rates ($/CCF)
Single Family (2)
$
2.68
$
2.76
Multi -Family (2)
$
2.76
Non -Residential (2) (3)
Low Strength
$
2.76
Medium Strength
$
3.45
High Strength
$
4.49
Industrial (4)
Flow (per MG annually)
$
3,487.41
$
3,592.03
BOD (per 1,000 lbs annually)
$
575.51
$
592.78
SS (per 1,000 lbs annually)
$
359.85
$
370.65
Notes:
(1) Actual rate adjustment will depend on the annual change in the ENR, and
will be no more than 3 percent.
(2) Usage charge based on winter water use determined as the average from
the prior December -February period. Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
Wastewater Rates for Schools
During this study, a separate analysis was performed to examine the water use
characteristics and estimate wastewater flows for schools in the Lodi Unified School
District (LUSD). At present, schools are charged for wastewater service based on student
population. High schools are assessed based on 15 students per SSU, and elementary and
middle schools are assessed based on 20 students per SSU. An examination of winter
water use data (excluding December due to the winter break), as well as consideration of
THE REED GROUP, INC. PAGE 29
CITY OF LODI WATER AND WASTEWATER RATE UPDATE STUDY
the overall level of activity at schools throughout the year (including reduced activity in
summer months) resulted in a determination that all schools of the LUSD should be
charged for wastewater service based on 18 students per SSU. While this change will affect
the wastewater bills of all schools, it will have only a minor affect on the aggregate for all
schools.
METER INSTALLATION AND TRANSITION TO USAGE -BASED BILLING
The City continues to install water meters on all unmetered water service connections.
Below is a summary of the status of the metering program and plans to transition
customers from flat wastewater rates to usage -based wastewater rates. Each July an
additional batch of customers is transitioned to usage -based wastewater rates.
• Single Family - More than 50 percent of single family homes now have water
meters with two- to three -thousand additional meters installed each year. The
transition to usage -based wastewater rates is lagging the transition to usage -
based water rates by about 18 months. In July 2014, a second batch of single
family customers will transition to usage -based water rates (about 3,700
accounts). The transition to usage -based wastewater rates for single family
customers is expected to be completed by about July 2020.
• Mobile Home Parks - All mobile home parks have now been provided with
master water meters on the connections serving each park. The City plans to
convert all mobile home parks to usage -based wastewater rates in July 2015.
With that transition billing for wastewater service will also shift from tenant to
the park owner.
• Multi -Family - The City will begin installing water meters for apartment and
condominium complexes, and plans to complete these installations by 2018. All
multi -family accounts (including duplexes, triplexes, and fourplexes) are
expected to transition to usage -based wastewater rates in July 2020. Similar to
mobile home parks, at that time billing may shift from tenant to property
owner.
• Non -Residential - At present, about 75 percent of non-residential accounts have
water meters and are subject to usage -based water rates. With the exception of
industrial users, all non-residential customers currently pay flat wastewater
rates. Further analysis will be needed to fully develop a strength and usage -
based wastewater rate structure for non-residential accounts. It may be several
years before these customers are fully transitioned to usage -based rates.
The transition from flat rates to usage -based rates may affect the total amount of
customers' wastewater bills. For single family customers many will have a decrease in
their monthly wastewater bill with that transition, while others may have an increase.
Multi -family customers will generally benefit from the transition to usage -based
wastewater rates. It is too early to tell how individual non-residential customers may be
affected by the transition.
THE REED GROUP, INC. PAGE 30
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Exhibit D
City of Lodi -- Water Utility
Financial Plan Summary
2
3
4
5
FY 12-13
FY 13-14
FY 14-15
FY 15-16
FY 16-17
FY 17-18
FY 18-19
6
OPERATING FUND :0
Beginning Balance
Revenues
Water Sales
Interest Earnings
Other Revenues
Transfer from Fund 182 for Debt Service
Total Revenues
Expenditures
Transfer Out to General Fund (Cost of Services)
Transfer Out to Capital Fund 181 for projects
To Capital Fund 181 (Depreciation)
Personnel Services
Utilities
Supplies, Mat'ls., Services & Other
Debt Service
1991 CSDW Loan Payments
Net 2010 Rev. Bond Payments
Total Expenditures
Ending Balance
Operating Reserve (25%)
Available Balance
Debt Service Coverage (min. 1.25)
2.5%
Jan. 2013
10,289,917
12,441,040
51,400
855,303
-
13,347,743
1,060,000
6,300,000
-
2,172,000
670,000
2,592,000
-
2,306561
15,100,561
8,537,099
1,624,000
6,913,099
2.98
2.5%
]an. 2014
8,537,099
12,745,000
77,000
77,000
-
12,899,000
780,000
5,500,000
-
2,093,000
755,000
2,963,000
-
2355 886
14,446,886
6 989 213
1,648,000
5,341,213
3.13
3.0%
Jan. 2015
6,989,213
13,080,000
61,000
80,000
109,000
13,330,000
780,000
6,000,000
-
2,165,000
788,000
3,054,000
-
2,307,811
15,094,811
5,224,402
1,697,000
3,527,402
2.85
3.0%
]an. 2016
5,224,402
13,492,000
110,000
83,000
109,000
13,794,000
780,000
6,000,000
-
2,239,000
822,000
3,149,000
-
2306 561
15,296,561
3 721 841
1,748,000
1,973,841
2.98
3.0%
Jan. 2017
3,721,841
13,921,000
123,000
86,000
109,000
14,239,000
780,000
5,000,000
-
2,315,000
857,000
3,247,000
-
2,308,061
14,507,061
3,453,780
1,800,000
1,653,780
3.08
3.0%
Jan. 2018
3,453,780
14,425,000
119,000
89,000
109,000
14,742,000
780,000
5,000,000
-
2,395,000
895,000
3,347,000
-
2305 611
14,722,611
3 473 169
1,854,000
1,619,169
3.22
3.0%
]an. 2019
3,473,169
14,887,000
194,000
92,000
109,000
15,282,000
780,000
1,000,000
-
2,475,000
934,000
3,449,000
-
2,307,111
10,945,111
7,810058
1,910,000
5,900,058
3.38
7
9WATER
10
11
12
13
14
15
16
17
18
19
20
22
23
24
26
27
28
29
30
31
32
33
34
35
36
mwov i =mwii•
Beginning Balance
Revenues
Operating Transfers In
Interest Earnings
Retrofit Meter Install. Charge
Debt Proceeds
Total Revenues
Expenditures
Water Meter/Main Install. Project
Water Taps
Miscellaneous Water Mains
Commercial Meter Replacements
Valve Exercising Program
Utility Frame & Cover Replacement
Surface WTP Design
Surface WTP Construction
Financial System Replacement
UWMP Update
Meter Fixed Network
MSC/Kofu Parking Lot
Well 2 -Replace Motor
Well 6R -Pump Rehab/Re I
3,509,150
6,300,000
16,222
-
5,340,088
11,656,310
6,511,000
66,000
-
-
-
110,000
-
5,340,000
-
-
-
75,000
-
543,000
2,390,460
5,549,755
22,000
926,000
-
6,497,755
5,831,000
77,000
52,000
5,000
21,000
-
-
-
258,000
-
-
-
21,000
93,000
2,140,215
6,000,000
22,000
-
-
6,022,000
5,027,000
80,000
53,000
5,000
21,000
-
-
-
265,000
-
-
-
-
-
2,194,215
6,000,000
58,000
-
-
6,058,000
5,177,000
82,000
55,000
5,000
22,000
-
-
-
-
55,000
-
-
-
-
2,511,215
5,000,000
74,000
-
-
5,074,000
5,333,000
84,000
56,000
6,000
23,000
-
-
-
-
-
-
-
-
51,000
1,813,215
5,000,000
108,000
-
-
5,108,000
2,197,000
87,000
58,000
6,000
23,000
-
-
-
-
-
-
-
-
-
4,454,215
1,000,000
151,000
-
-
1,151,000
1,067,000
90,000
60,000
6,000
24,000
-
-
-
-
-
-
-
-
-
37
38
39
40
41
42
43
44
47
48
49
50
51
52
53
56
57
58
60
61
62
63
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Exhibit D
City of Lodi -- Water Utility
Financial Plan Summary
2
3
4
5
FY 12-13
FY 13-14
FY 14-15
FY 15-16
FY 16-17
FY 17-18
FY 18-19
65
Well 5 -Pump Rehab/Rept
Well 7 -Pump Rehab/Rept
Well 8 -Repairs/Pump Repl
Well 12 -Pump Rehab/Rept
Well 13 -Pump Rehab/Rept & Replace Emerg Gen
Well 14 -Pump Rehab/Rept
Well 15 -Pump Rehab/Rept
Well 16 -Pump Rehab/Electrical Upgrade
Well 17 -Pump Rehab/Electrical Upgrade
Well 18 -Pumpb Rehab/Electrical Upgrade
Well 19 -Pump Replacement
Well 20 -Pump Rehab/Electrical Upgrade
Well 21 -Pump Rehab/Electrical Upgrade
Well 22 -Replace Motor
Well 23 -Replace Motor
Well 25 -Add Emergency Generator
Well 28 -Add Emergency Generator
Well Electrical Panel Upgrades/Rept
Well Site Improvements
MSC Paving
MSC Shop Decommission
Vehicles/Equipment
Total Expenditures
Ending Balance
-
-
-
-
-
-
-
-
-
-
94,000
-
-
-
-
-
-
-
-
-
-
36,000
12,775,000
2,390,460
46,000
-
62,000
-
98,000
-
-
-
-
-
4,000
-
-
15,000
15,000
-
-
31,000
26,000
-
-
93,000
6,748,000
2 140 215
-
-
-
48,000
-
48,000
48,000
-
-
-
-
-
-
-
-
133,000
133,000
-
27,000
-
-
80,000
5,968,000
2,194,215
-
49,000
-
-
-
-
-
55,000
55,000
55,000
-
-
-
-
-
-
-
-
27,000
-
-
104,000
5,741,000
2 511 215
-
-
-
-
-
-
-
-
-
-
-
56,000
56,000
-
-
-
-
-
28,000
-
-
79,000
5,772,000
1,813,215
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29,000
-
-
67,000
2,467,000
4 454 215
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48,000
1,295,000
4L310 215
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
87
90
91
92
93
IMF WATER FACILITIES (182)
Beginning Balance
Revenues
Water Impact Mitigation Fees
Transfer in from Capital Fund 181 (plant design)
Transfer in from Capital Fund 181 (Well #27)
Interest Earnings
Total Revenues
Expenditures
Previous projects
Surface Water -Design
GPS Control Grid
Well #27 - Pump, Motor & Site Impr.
Well #28
IMF Update
Transfer out to 1218 for General Plan
Transfer to Fund 181 for past projects
Transfer to Fund 181 for Well 27
Transfer to Operations Fund 180 for Debt Service
Total Expenditures
Ending Balance
Owed Fund 180 for Debt Service
(9,454)
2,529
-
-
323
2,853
-
-
-
245
-
-
-
-
-
-
245
(6,846)
3,774,000
(6,846)
109,000
-
-
-
109,000
-
-
-
-
-
-
-
-
49,755
-
49,755
52,399
5,345,000
52,399
109,000
-
-
1,000
110,000
-
-
-
-
-
-
-
-
-
109,000
109,000
53,399
6,775,000
53,399
109,000
-
-
1,000
110,000
-
-
-
-
-
-
-
-
-
109,000
109,000
54,399
8,204,000
54,399
109,000
-
-
2,000
111,000
-
-
-
-
-
-
-
-
-
109,000
109,000
56,399
9,634,000
56,399
109,000
-
-
2,000
111,000
-
-
-
-
-
-
-
-
-
109,000
109,000
58,399
11,062,000
58,399
109,000
-
-
2,000
111,000
-
-
-
-
-
-
-
-
-
109,000
109,000
60,399
12,491,000
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
114
115
116
117
165
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Exhibit D
City of Lodi -- Water Utility
Financial Plan Summary
2
3
4
5
FY 12-13 FY 13-14 FY 14-15
FY 15-16
FY 16-17
FY 17-18
FY 18-19
166
167
Aggregate End -of -Year Balance *
Operating Reserve (25%)
Restricted DS Reserve
2010 COP Proceeds
Rate Stabilization Fund
Net Available for Capital Projects
13,277,000 11,538,000 9,828,000
1,624,000 1,648,000 1,697,000
2,356,000 2,356,000 2,356,000
- - -
- - -
9,297,000 7,534,000 5,775,000
8,643,000
1,748,000
2,356,000
-
-
4,539,000
7,679,000
1,800,000
2,356,000
-
-
3,523,000
10,342,000
1,854,000
2,356,000
-
-
6,132,000
14,537,000
1,910,000
2,356,000
-
-
10,271,000
168
169
170
171
172
173
City of Lodi -- Water Utility
Financial Plan Assumptions
178
179
180
181
Financial Assumptions
General Inflation
Labor Inflation
Material/Energy Inflation
Construction Inflation
Interest Earnings
Customer Account Assumptions
No. of DUs/Accounts
No. of 3/4" Eq. Mtrs.
No. of New Connections
Customer Growth Rate
Water Mitigation Impact Fee
3.0% 3.0%
3.4% 3.4%
4.5% 4.5%
2.5% 3.0%
1.0% 1.0%
23,456 23,506
25,504 25,554
50 50
0.20% 0.20%
$ 1,290 $ 1,330 $
3.0%
3.4%
4.5%
3.0%
1.0%
23,556
25,604
50
0.20%
1,370
3.0%
3.4%
4.5%
3.0%
2.5%
23,606
25,654
50
0.19%
$ 1,410 $
3.0%
3.4%
4.5%
3.0%
3.5%
23,656
25,704
50
0.19%
1,450
3.0%
3.4%
4.5%
3.0%
3.5%
23,706
25,754
50
0.19%
$ 1,490
3.0%
3.4%
4.5%
3.0%
3.5%
23,756
25,804
50
0.19%
$ 1,530
182
183
184
185
186
187
188
189
190
191
192
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WASTEWATER OPERATING
Beginning Balance
Revenues
Wastewater Sales
Interest Earnings
Other Revenues
Transfer In for Debt Service (172)
Transfer In for Debt Service (173)
Transfer From/(To) Rate Stabilization Fund (174)
Total Revenues
Expenditures
Operating Transfers Out (to GF)
Transfer Out to Gen'I Fund (Cost of Services)
Transfer Out to WW Capital Outlay (171)
Transfer Out To WW Cap. Rsrv. (172)
Administration & Other
Plant Maintenance
Sanitary System Maintenance
Storm Drainage Maintenance
Industrial System Maintenance
2003 Wastewater COP Debt Service
2004 Wastewater COP Debt Service
2007 Wastewater COP Debt Service
2012 Wastewater Refinancing
Total Expenditures
Ending Balance
Operating Reserve (25%)
Available Balance
Debt Service Coverage (min. = 1.20)
without COST
WASTEWATER CAPITAL OUTLAY
Beginning Balance
Revenues
Transfer In (from 170)
Transfer In (from 170-Deprec.)
Other Revenue
Investment Earnings
Exhibit E
City of Lodi -- Wastewater Utility
Financial Plan Summar
FY 12-13 FY 13-14 FY 14-15
3% 3% 3%
2,892,538 6,302,078 6,256,598
13,747,216 14,187,000 14,641,000
20,625 68,000 68,000
227,531 234,400 241,200
31,000 31,000 31,000
700,000 16,000 149,000
- - -
14,726,372 14,536,400 15,130,200
67,500 - -
1,451,478 1,068,000 1,068,000
- 500,000 3,200,000
- - -
1,103,921 1,124,330 1,166,800
3,377,841 3,948,650 4,104,000
492,917 611,260 633,000
393,225 415,710 433,000
4,450 23,930 25,000
381,000 3,266,000 -
2,138,000 98,000 98,000
1,599,000 1,604,000 1,603,000
375,000 1,922,000 1970000
11,316,832 14,581,880 14,300,800
6,302,078 6 256 598 7,08S,998
2,735,000 3,040,000 2,283,000
3,567,078 3,216,598 4,802,998
1.61 1.09 2.10
1.93 2.36 2.39
7,394,480 5,925,257 4,706,686
- - 2,700,000
- 500,000 500,000
96,429 96,429 96,429
1,772 - -
FY 15-16
3%
7,085,998
15,110,000
266,000
248,000
110,000
150,000
-
15,884,000
-
1,068,000
3,250,000
-
1,209,400
4,265,000
656,000
451,000
26,000
-
98,000
1,607,000
1,961,000
14,591,400
8 378 598
2,345,000
6,033,598
2.24
2.53
421,115
2,750,000
500,000
96,429
-
FY 16-17
3%
8,378,598
15,594,000
311,000
255,900
110,000
154,000
-
16,424,900
-
1,068,000
2,975,000
-
1,254,000
4,432,000
679,000
470,000
27,000
-
98,000
1,606,000
1947000
14,556,000
10,247,498
2,409,000
7,838,498
2.33
2.62
692,543
2,475,000
500,000
96,429
-
FY 17-18
3%
10,247,498
16,093,000
376,000
263,800
110,000
154,000
-
16,996,800
-
1,451,478
7,900,000
-
1,300,700
4,606,000
703,000
489,000
28,000
-
98,000
1,614,000
1,949,000
20,139,178
7,105,120
2,573,000
4,532,120
2.30
2.70
716,972
7,400,000
500,000
96,429
-
FY 18-19
3%
7,105,120
16,608,000
266,000
271,800
110,000
154,000
-
17,409,800
-
1,451,478
7,870,000
-
1,349,400
4,787,000
729,000
509,000
29,000
-
98,000
1,617,000
1949 000
20,388,878
4 126 042
2,642,000
1,484,042
2.33
2.73
694,400
7,370,000
500,000
96,429
I
2
3
4
5
6
7
8
9
10
12
13
14
15
16
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
35
36
37
38
39
40
41
42
43
44
45
46
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The Reed Group, Inc. DRAFT -- 10/10/2013
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Total Revenues
Expenditures
Interfund Loan to Parks (Grape Bowl)
Financial System Replacement
Financial Planning
Elm to Pine Alley Sewer/Laurel Storm Project
Misc. System Relocations
Misc. Wastewater Taps
Collect. System Capac. Enhanc. Projects
Wastewater Main Replac./Lining Proj.
Storm Drain Trash Handling System
Lift Sta. Remote Term. Unit Replac.
Utility Frame & Cover Replacement
Hutchins Street Reconstruction
MSC/Kofu Parking Lot
Replace 04-95 Vacuum Truck
Decommission Fleet Service Shop
Munic. Service Center PBX Replac.
Munic. Service Center Parking Reconstr.
Lift Station Generator Replacements
Vehicles /Equipment
White Slough Compliance Studies & Rpts
Plant Maint. & Land Applic. Area Improv.
Influent Screening Replacement
UV Disinfection Upgrade
Aeration Diffuser Replacement
Cloth Filter Media Replacement
Digested Sludge Line to Presses
Electrical Upgrades
Admin/Ops Building Improvements
Rotary Press Maintenance Crane & air compressor
Pond Gates
Shop Rollup Door
Emergency Generator Maintenance
Road to Outfall Repair
Secondary Scum Trough Drives
Misc Paving
SCADA Upgrades/PLC Replacement
Primary Chain & Flights
Boiler Retube
Chain Hoist
Gas compressor (WSWPCF)
Design Effluent Irrigation Improvements
Irrigation Conveyance & Pumping Construction
Exhibit E
City of Lodi -- Wastewater Utility
Financial Plan Summar
FY 12-13 FY 13-14 FY 14-15
98,200 596,429 3,296,429
675,000
- 250,000 260,000
- - -
55,000 -
- 35,000 36,000
8,000 40,000 42,000
- - 21,000
589,000 - 2,080,000
10,000 400,000 312,000
- - -
116,225 - -
81,198
- 75,000 -
- - -
- - -
- - -
- - -
- - 260,000
36,000 75,000 62,000
20,000 - -
32,000 - -
- 2,080,000
- 312,000
- -
30,000 -
30,000 -
- 52,000
- 780,000
30,000 -
35,000 -
8,000 -
20,000 -
10,000 -
12,000 -
10,000 -
- 78,000
- 80,000 42,000
- - 21,000
- - -
- - -
- - -
- - -
FY 15-16
3,346,429
-
-
-
38,000
43,000
216,000
108,000
1,622,000
-
-
-
-
-
-
-
-
70,000
-
-
-
-
-
32,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
811,000
-
FY 16-17
3,071,429
-
-
-
39,000
45,000
22,000
2,250,000
-
-
-
-
-
-
-
-
-
79,000
-
-
-
-
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
FY 17-18
7,996,429
-
-
-
41,000
47,000
234,000
117,000
-
-
-
-
-
-
-
-
-
877,000
-
-
-
-
-
35,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,872,000
FY 18-19
7,966,429
-
-
-
43,000
49,000
24,000
2,433,000
-
-
-
-
-
-
-
-
-
182,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
3
4
5
48
49
51
52
53
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
The Reed Group, Inc. DRAFT -- 10/10/2013
The Reed Group, Inc. DRAFT -- 10/10/2013
A
F
G I
H
I
J
K
L
1
Effluent Storage Reservoir Construction
Effluent Storage Reservoir Construction
Micro Turbine
Dissolved Air Floatation Tank Rebuild
Tailwater Pump (WSWPCF)
UV Bypass System Improvements
Fence Repairs/Upgrades
Anaerobic Digester Painting
Digester Cleaning & Gas Scrubber Relining
Pond Lining Project
WSWPCF Building/Restroom Expansion
Plant Security Enhancements
Miscellaneous Future Projects
Total Expenditures
Ending Balance
WASTEWATER CAPITAL RESERVE (172)
Beginning Balance
Revenues
Transfer In from 170
Interest Earnings
Total Revenues
Expenditures
White Slough Solids Handling Facility
White Slough Sludge Thickening
Transfer Out to 170 (for Debt Service)
Total Expenditures
Ending Balance
Restricted Debt Service Reserve
2007 COP Proceeds (w/ fiscal agent)
Cash Deficit (amt. owed for past DS)
IMF WASTEWATER FACILITIES (173)
Beginning Balance
Revenues
Wastewater IMF
Interest Earnings
Exhibit E
City of Lodi -- Wastewater Utility
Financial Plan Summar
FY 12-13 FY 13-14 1 FY 14-15
- - -
- - -
- - 1,040,000
- - -
- - -
- - -
- - -
- 90,000 -
- - -
- - -
- 300,000 -
- 130,000 -
- 100,000 104,000
1,567,423 1,815,000 7,582,000
5 925 257 4,706,686 421 115
3,135,539 3,135,539 3,135,539
- - -
31,000 31,000 31,000
31,000 31,000 31,000
- - -
- - -
31,000 31,000 31,000
31,000 31,000 31,000
3 135 539 3,135,539 3 135 539
2,379,536 2,379,536 2,379,536
756,003 756,003 756,003
- - -
678,302 15,775 148,775
25,681 149,000 149,000
11,792 - 1,000
FY 15-16
-
-
-
-
-
-
27,000
-
-
-
-
-
108,000
3,075,000
692,543
3,135,539
-
110,000
110,000
-
-
110,000
110,000
3 135 539
2,379,536
756,003
-
149,775
149,000
5,000
FY 16-17
-
-
-
-
-
-
-
-
-
-
-
-
112,000
3,047,000
716,972
3,135,539
-
110,000
110,000
-
-
110,000
110,000
3 135 539
2,379,536
756,003
-
153,775
149,000
5,000
FY 17-18
4,679,000
-
-
-
-
-
-
-
-
-
-
-
117,000
8,019,000
694,400
3,135,539
-
110,000
110,000
-
-
110,000
110,000
3,135,539
2,379,536
756,003
-
153,775
149,000
5,000
FY 18-19
-
4,867,000
-
-
-
-
30,000
-
-
-
-
-
122,000
7,750,000
910,829
3,135,539
-
110,000
110,000
-
-
110,000
110,000
3 135 539
2,379,536
756,003
-
153,775
149,000
5 000
2
3
4
5
101
102
103
104
105
106
107
108
109
110
111
112
113
115
117
118
119
120
121
122
124
125
126
127
129
130
131
133
135
136
137
138
139
140
141
142
143
144
146
The Reed Group, Inc. DRAFT -- 10/10/2013
The Reed Group, Inc. DRAFT -- 10/10/2013
A
F
G I
H
I
J
K
L
1
Total Revenues
Expenditures
Transfer Out (to 170 for Debt Service)
Transfer Out (refund PCE/TCE)
City -Wide IMF Program Update
Total Expenditures
Ending Balance
Owed to Fund 170 for Debt Service
WW Rate Stabilization Fund (174)
Beginning Balance
Revenues
Transfer In from 170
Total Revenues
Expenditures
Transfer Out to 170
Total Expenditures
Ending Balance
Exhibit E
City of Lodi -- Wastewater Utility
Financial Plan Summar
FY 12-13 FY 13-14 FY 14-15
37,473 149,000 150,000
700,000 16,000 149,000
- - -
- - -
700,000 16,000 149,000
15 775 148,775 149,775
849,000 2,643,000 3,454,000
500,000 500,000 500,000
- - -
- - -
- - -
- - -
500,000 500,000 500,000
FY 15-16
154,000
150,000
-
-
150,000
1S3,775
4,267,000
500,000
-
-
-
-
500,000
FY 16-17
154,000
154,000
-
-
154,000
1S3,775
5,075,000
500,000
-
-
-
-
500,000
FY 17-18
154,000
154,000
-
-
154,000
153,775
5,888,000
500,000
-
-
-
-
500,000
FY 18-19
154,000
154,000
-
-
154,000
153 775
6,703,000
500,000
-
-
-
-
500,000
2
3
4
5
147
148
149
151
154
156
158
159
160
161
162
163
164
166
167
168
170
172
173
174
Aggregate End -of -Year Balance
Operating Reserve (25%)
Restricted DS Reserve
2007 COP Proceeds
Rate Stabilization Fund
Net Available for Capital Projects
15,879,000
2,735,000
2,379,536
756,003
500,000
9,508,461
14,748,000
3,040,000
2,379,536
756,003
500,000
8,072,461
11,292,000
2,283,000
2,379,536
756,003
500,000
5,373,461
12,860,000
2,345,000
2,379,536
756,003
500,000
6,879,461
14,754,000
2,409,000
2,379,536
756,003
500,000
8,709,461
11,589,000
2,573,000
2,379,536
756,003
500,000
5,380,461
8,826,000
2,642,000
2,379,536
756,003
500,000
2,548,461
175
176
177
178
179
180
181
182
183
194
City of Lodi -- Wastewater Utility
Financial Plan Assumptions
1951
196
FY 12-13
FY 13-14
FY 14-15
FY 15-16
FY 16-17
FY 17-18
FY 18-19
197
Financial Assumptions
General Inflation
Labor Inflation
Material/Energy Inflation
Construction Inflation
Interest Earnings
Cust. Growth SSUs
3.0%
3.4%
4.5%
4.0%
2.0%
-
3.0%
3.4%
4.5%
4.0%
2.5%
50
3.0%
3.4%
4.5%
4.0%
3.0%
51
3.0%
3.4%
4.5%
4.0%
3.5%
52
3.0%
3.4%
4.5%
4.0%
3.5%
53
3.0%
3.4%
4.5%
4.0%
3.5%
54
3.0%
3.4%
4.5%
4.0%
3.5%
55
198
199
200
201
202
203
204
The Reed Group, Inc. DRAFT -- 10/10/2013
The Reed Group, Inc. DRAFT -- 10/10/2013
A F G I H I J K L
1
Exhibit E
City of Lodi -- Wastewater Utility
Financial Plan Summar
FY 12-13 1 FY 13-14 1 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19
Wastewater Mitigation Impact Fee $ 6,390 $ 6,650 $ 6,920 $ 7,200 $ 7,490 $ 7,790 $ 8,100
2
3
4
5
205
206
The Reed Group, Inc. DRAFT -- 10/10/2013
Cell: A13
Comment: Septic Dumping Charges, Tap Fees.
Cell: A14
Comment: Transfer amount based on estimated interest earning in Fund 172.
Cell: A15
Comment: Future growth's share of debt service.
Cell: A23
Comment: Transfer for past debt service.
Cell: A43
Comment: Transfer in from Operation Fund 170 for capital projects.
Cell: A44
Comment: Transfer in from Operations Fund 170 for depreciation of assests.
Cell: D45
Comment: $300K received from NCPA for the purchase of a vacuum truck.
Cell: A124
Comment: Transfer in from Operations Fund 170 for past debt service.
Cell: A145
Comment: Capacity fees for the PCE/TCE and Water Treatment Plant projects.
Cell: A151
Comment: Refund anticipates approval from the State Health Department for potable use of the groundwater.
Cell: C205
Comment: Bob Reed:
From City's "Fee and Service Charge Schedule" as of 7/16/09.
The Reed Group, Inc. DRAFT -- 10/10/2013
City of Lodi
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
The Reed Group, Inc. 10/9/13
current ana vro
osea riaz water nates
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
(Jan.2013)
(Jan.2014)
(Jan.2015)
(Jan. 2016)
(Jan.2017)
(Jan.2018)
(Jan.2019)
Rate Increase -->
2.5%
3.0%
3.0%
3.0%
3.0%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
29.90
$
30.65
$
31.57
$
32.52
$
33.50
$
34.51
$
35.55
2 Bedroom
$
35.91
$
36.81
$
37.91
$
39.05
$
40.22
$
41.43
$
42.67
3 Bedroom
$
43.04
$
44.12
$
45.44
$
46.80
$
48.20
$
49.65
$
51.14
4 Bedroom
$
51.72
$
53.01
$
54.60
$
56.24
$
57.93
$
59.67
$
61.46
5 Bedroom
$
62.03
$
63.58
$
65.49
$
67.45
$
69.47
$
71.55
$
73.70
6 Bedroom
$
74.44
$
76.30
$
78.59
$
80.95
$
83.38
$
85.88
$
88.46
Multi -Family (1)
1 Bedroom
$
25.67
$
26.31
$
27.10
$
27.91
$
28.75
$
29.61
$
30.50
2 Bedroom
$
30.79
$
31.56
$
32.51
$
33.49
$
34.49
$
35.52
$
36.59
3 Bedroom
$
36.94
$
37.86
$
39.00
$
40.17
$
41.38
$
42.62
$
43.90
4 Bedroom
$
44.32
$
45.43
$
46.79
$
48.19
$
49.64
$
51.13
$
52.66
Non -Residential
Existing unmetered
Varies
+2.5%
+3.0%
+3.0%
+3.0%
+3.0%
+3.0%
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
The Reed Group, Inc. 10/9/13
City of Lodi
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) This schedule includes the proposed indexing of 2.5 percent, with no rate structure changes.
(3) This rate schedule is revenue neutral relative to the proposed newly indexed January 2014 water rates, but includes the beginning of the
proposed 3 -year phased changes to the rate structure.
(4) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate adjustment
due to ENR indexing.
The Reed Group, Inc. 10/9/13
current ana vroposea usa
e-tsasea water nates
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Jan.2013)
(Jan.2014)
(Jan.2014)
(Jan.2016)
(Jan.2017)
(Jan.2018)
(Jan.2019
Rate Increase -->
2.5%(2)
3
3.0%(4)
3.0%(4)
3.0%
3.0%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family
3/4" meter
$
23.78
$
24.37
$
23.26
$
22.80
$
21.65
$
22.30
$
22.97
$
23.66
1" meter
$
38.60
$
39.57
$
37.38
$
36.26
$
34.01
$
35.03
$
36.08
$
37.16
1 1/2" meter
$
75.42
$
77.31
$
72.45
$
69.63
$
64.62
$
66.56
$
68.56
$
70.62
2" meter
$
119.79
$
122.78
$
114.71
$
109.84
$
101.52
$
104.57
$
107.71
$
110.94
Multi -Family and Non -Residential (1)
3/4" meter
$
23.78
$
24.37
$
23.26
$
22.80
$
21.65
$
22.30
$
22.97
$
23.66
1" meter
$
38.60
$
39.57
$
37.38
$
36.26
$
34.01
$
35.03
$
36.08
$
37.16
1 1/2" meter
$
60.24
$
61.75
$
62.08
$
64.28
$
64.62
$
66.56
$
68.56
$
70.62
2" meter
$
75.27
$
77.15
$
84.29
$
94.17
$
101.52
$
104.57
$
107.71
$
110.94
3" meter
$
105.38
$
108.01
$
132.74
$
162.18
$
187.65
$
193.28
$
199.08
$
205.05
4" meter
$
135.51
$
138.90
$
193.14
$
254.80
$
310.67
$
319.99
$
329.59
$
339.48
6" meter
$
195.68
$
200.57
$
333.69
$
480.82
$
617.94
$
636.48
$
655.57
$
675.24
8" meter
$
255.91
$
262.31
$
494.23
$
747.94
$
986.82
$
1,016.42
$
1,046.91
$
1,078.32
10" meter
$
316.01
$
323.91
$
674.61
$
1,056.08
$
1,417.30
$
1,459.82
$
1,503.61
$
1,548.72
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF)
$
0.92
$
0.94
$
0.94
$
0.97
$
0.96
$
0.99
$
1.02
$
1.05
Tier 2 (11-50 CCF)
$
1.38
$
1.41
$
1.35
$
1.33
$
1.27
$
1.31
$
1.35
$
1.39
Tier 3 (>50 CCF)
$
1.82
$
1.87
$
1.76
$
1.70
$
1.59
$
1.64
$
1.69
$
1.74
Multi -Family and Non -Residential (1)
All water usage
$
0.92
$
0.94
$
1.00
$
1.09
$
1.14
$
1.17
$
1.21
$
1.25
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) This schedule includes the proposed indexing of 2.5 percent, with no rate structure changes.
(3) This rate schedule is revenue neutral relative to the proposed newly indexed January 2014 water rates, but includes the beginning of the
proposed 3 -year phased changes to the rate structure.
(4) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate adjustment
due to ENR indexing.
The Reed Group, Inc. 10/9/13
City of Lodi
Current and Proposed Flat Wastewater Rates
Future Rate Ceiling
Current Proposed Proposed Proposed Proposed Proposed
Jul. 2013 Jul. 2014 Jul. 2015 Jul. 2016 Jul. 2017 Jul. 2018
Rate Increase --> 3.0% 3.0% 3.0% 3.0% 3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
25.83
$
26.60
$
27.40
$
28.22
$
29.07
$
29.94
2 Bedroom
$
34.44
$
35.47
$
36.53
$
37.63
$
38.76
$
39.92
3 Bedroom
$
43.05
$
44.34
$
45.67
$
47.04
$
48.45
$
49.90
4 Bedroom
$
51.66
$
53.21
$
54.81
$
56.45
$
58.14
$
59.88
5 Bedroom
$
60.27
$
62.08
$
63.94
$
65.86
$
67.84
$
69.88
6 Bedroom
$
68.88
$
70.95
$
73.08
$
75.27
$
77.53
$
79.86
7 Bedroom
$
77.49
$
79.81
$
82.20
$
84.67
$
87.21
$
89.83
Duplexes, Triplexes, Fourplexes, Apartments, and Condominiums
1 Bedroom
$
25.83
$
26.60
$
27.40
$
28.22
$
29.07
$
29.94
2 Bedroom
$
34.44
$
35.47
$
36.53
$
37.63
$
38.76
$
39.92
3 Bedroom
$
43.05
$
44.34
$
45.67
$
47.04
$
48.45
$
49.90
4 Bedroom
$
51.66
$
53.21
$
54.81
$
56.45
$
58.14
$
59.88
Mobile Homes
Any Size
$
25.83
$
26.60
$
27.40
$
28.22
$
29.07
$
29.94
Non -Residential
Per SSU
$
34.44
$
35.47
$
36.53
$
37.63
$
38.76
$
39.92
The Reed Group, Inc. 10/9/13
City of Lodi
Current and Proposed Usage -Based Wastewater Rates
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) Usage charge based on winter water use determined as the average from the prior December -February period.
Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
The Reed Group, Inc. 10/9/13
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Jul. 2013
Jul. 2014
Jul. 2015
Jul. 2016
Jul. 2017
Jul. 2018
Rate Increase -->
3.0%
3.0%
3.0%
3.0%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family (per DU)
$ 23.52
$
24.23
$
24.96
$
25.71
$
26.48
$
27.27
Multi -Family and Non -Residential (1)
3/4" meter
$
24.23
$
24.96
$
25.71
$
26.48
$
27.27
1" meter
$
38.83
$
39.99
$
41.19
$
42.43
$
43.70
1 1/2" meter
$
75.03
$
77.28
$
79.60
$
81.99
$
84.45
2" meter
$
118.63
$
122.19
$
125.86
$
129.64
$
133.53
3" meter
$
220.45
$
227.06
$
233.87
$
240.89
$
248.12
4" meter
$
365.88
$
376.86
$
388.17
$
399.82
$
411.81
6" meter
$
729.12
$
750.99
$
773.52
$
796.73
$
820.63
8" meter
$
1,165.18
$
1,200.14
$
1,236.14
$
1,273.22
$
1,311.42
Usage Rates ($/CCF)
Single Family (2)
$ 2.68
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Multi -Family (2)
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Non -Residential (2) (3)
Low Strength
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Medium Strength
$
3.45
$
3.55
$
3.66
$
3.77
$
3.88
High Strength
$
4.49
$
4.62
$
4.76
$
4.90
$
5.05
Industrial (4)
Flow (per MG annually)
$ 3,487.41
$
3,592.03
$
3,699.79
$
3,810.78
$
3,925.10
$
4,042.85
BOD (per 1,000 lbs annually)
$ 575.51
$
592.78
$
610.56
$
628.88
$
647.75
$
667.18
SS (per 1,000 lbs annually)
$ 359.85
$
370.65
$
381.77
$
393.22
$
405.02
$
417.17
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) Usage charge based on winter water use determined as the average from the prior December -February period.
Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
The Reed Group, Inc. 10/9/13
Engineering
fi�
Water and Wastewater Rates
Shirtsleeve Meeting
October 15, 2013
➢ Meter charge schedule
➢ Vacant residential water and
wastewater rate
➢ Water and wastewater financial models
➢ Water and wastewater rate update
➢ Solid waste rates
➢ Proposition 218 process
0
3/
$194
$300
1
$300
$940
$400
$370
$0
1
$226
$350
1.67
$500
$1,420
$480
$365
$0
1 '/2
$506
$780
3.33
$1,000
$3,810
$745
$1,565
$0
2
$624
$970
5.33
$1,600
$5,720
$930
$1,730
$0
3
$1,279
$1,980
10
$3,000
$5,950
N/A
$2,065
$0
4
$2,304
$3,570
16.67
$5,000
N/A
N/A
$4,130
$0
6
$4,362
$6,760
33.33
$10,000
N/A
N/A
$6,750
$0
8
$7,432
$11,520
53.33
$16,000
N/A
N/A
$10,670
$0
Vacant Residential Rates
➢ Flat rate residential customers — monthly
service charge fora 3/4 inch meter
➢Metered residential customers — no vacant
utility rate
➢Master metered multi -family — no vacant utility
rate
➢Metered multi -family unit — no vacant utility
rate
➢Monthly service charge will reduce with
conservation pricing
Water & Wastewater Rate Update
• Continue the migration from flat water and
wastewater rates to usage -based rates for all
customer classes
• Update financial models to determine revenue
needs through FY 18/19
• Refine usage -based rate structures to better meet
cost of service requirement using water use data
becoming available with new water meters
• Continue annual rate adjustments based on
changes in the ENR, subject to a 3% annual cap
Water & Wastewater Models
•Water and wastewater financial models have
been updated to reflect actual (pre -audit)
numbers for FY 12/13, the FY 13/14 budget, and
5 -year capital improvement plans
•Financial models assume annual rate increases
of no more than 3% per year
•Revenues appear sufficient for both utilities
through FY 18/19
Water Financial Model
1. Financial assumptions reconfirmed
2. Capital expenditures include meter program,
infrastructure replacement and comprehensive
well maintenance
3. New development assumed minimal
4. $2.3 million annual debt service for water plant
5. $10 million net available capital at end of
FY 18/19 could be used for debt retirement
($ millions in interest savings)
Wastewater Financial Model
1.
$3.2
million
to pay off 2003 COPs
2.
$2.2
million
infrastructure replacement every 2
years
3. $11.4 million for White Slough irrigation
conveyance and pond storage improvements
4. New development assumed minimal
5. $3.5 million annual debt service for White
Slough
6. $2.5 million net available capital at end of
FY 18/19 is relatively low
ENR Index and Rate Adjustments
•In recent years, the City has adjusted water and wastewater
rates by the annual change in the Engineering News
Record's 20 -Cities Construction Cost Index (ENR), subject
to a 3% cap. The ENR is tracking at a 3.3% annual change
(Oct. 2012 - Oct. 2013).
•Water rates for January 2014 are proposed to increase by
2.5% (ENR = 3.3%)
•Wastewater rates for July 2014 have been assumed to
increase by 3.0%, but the actual adjustment will depend on
the change in the ENR at that time, and may be less than
3.0%.
2009
0
0
2010
0
0
2011
2
2
2012
2.53
2.2
2013
2.5
2.5
2014
3.3
2.5
2009
25
25
2010
20
12
2011
10
5
2012
5
3
2013
2.8
2.5
Rate Structure Changes
• Water Rates
✓Flat rates — No rate structure changes
proposed
✓Usage -based rates — Rate structure changes
proposed
• Wastewater Rates
✓Flat rates — No rate structure changes
proposed
✓Usage -based rates — Rate structure changes
proposed
w
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
Future Rate Coiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Jan.2013
Jan. 2014
Jan. 2015
Jan. 2016
Jan. 2017
Jan. 2018
Jan. 2019
Rate Increase
2.5%
3.0%
3.0%
3.0%
3.0%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
29.90
$
30.65
$
31.57
$
32.52
$
33.50
$
34.51
$
35.55
2 Bedroom
$
35.91
$
36.81
$
37.91
$
39.05
$
40.22
$
41.43
$
42.67
3 Bedroom
$
43.04
$
44.12
$
45.44
$
46.80
$
48.20
$
49.65
$
51.14
4 Bedroom
$
51.72
$
53.01
$
54.60
$
56.24
$
57.93
$
59.67
$
61.46
5 Bedroom
$
62.03
$
63.58
$
65.49
$
67.45
$
69.47
$
71.55
$
73.70
6 Bedroom
$
74.44
$
76.30
$
78.59
$
80.95
$
83.38
$
85.88
$
88.46
Multi -Family (1)
1 Bedroom
$
25.67
$
26.31
$
27.10
$
27.91
$
28.75
$
29.61
$
30.50
2 Bedroom
$
30.79
$
31.56
$
32.51
$
33.49
$
34.49
$
35.52
$
36.59
3 Bedroom
$
36.94
$
37.86
$
39.00
$
40.17
$
41.38
$
42.62
$
43.90
4 Bedroom
$
44.32
$
45.43
$
46.79
$
48.19
$
49.64
$
51.13
$
52.66
Mobile Homes
Any Size
$
25.67
$
26.31
$
27.10
$
27.91
$
28.75
$
29.61
$
30.50
Non -Residential
Existing unmetered
Varies
+2.5%
+3.0%
+3.0%
+3.0%
+3.0%
+3.0%
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
h.. 1--71 4- 1 n i,-. 4-.... , r. 4-.. w io
Future Rate Ceiling
Current Proposed Proposed Proposed Proposed Proposed
Jul. 2013 Jul. 2014 Jul. 2015 Jul. 2016 Jul. 2017 Jul.2018
Ir- Rate increase --� 3.0% 3.0% 3.0% 3.0% 3.0%
FLAT RATES
$
29.07
$
29.94
37.63
$
Single Family Residential
$
39.92
47.04
$
48.45
1 Bedroom
$
25.83
$
26.60
$
27.40 $
2 Bedroom
$
34.44
$
35.47
$
36.53 $
3 Bedroom
$
43.05
$
44.34
$
45.67 $
4 Bedroom
$
51.66
$
53.21
$
54.81 $
5 Bedroom
$
60.27
$
62.08
$
63.94 $
6 Bedroom
$
68.88
$
70.95
$
73.08 $
7 Bedroom
$
77.49
$
79.81
$
82.20 $
Duplexes, Triplexes, Fourplexes, Apartments, and Condominiums
1 Bedroom
$
25.83
$
26.60
$
27.40 $
2 Bedroom
$
34.44
$
35.47
$
36.53 $
3 Bedroom
$
43.05
$
44.34
$
45.67 $
4 Bedroom
$
51.66
$
53.21
$
54.81 $
Mobile Homes
Any Size
$
25.83
$
26.60
$
27.40 $
Non -Residential
Per SSU
$
34.44
$
35.47
$
36.53 $
28.22
$
29.07
$
29.94
37.63
$
38.76
$
39.92
47.04
$
48.45
$
49.90
56.45
$
58.14
$
59.88
65.86
$
67.84
$
69.88
75.27
$
77.53
$
79.86
84.67
$
87.21
$
89.83
28.22
$
29.07
$
29.94
37.63
$
38.76
$
39.92
47.04
$
48.45
$
49.90
56.45
$
58.14
$
59.88
28.22 $ 29.07 $ 29.94
37.63 $ 38.76 $ 39.92
Calif. Constitution (Prop. 218)
Article XIIID, Section 6(b)(3) —The amount of a fee or
charge imposed upon any parcel or person as an incident
of property ownership shall not exceed the proportional
cost of the service attributable to the parcel.
Water Rate Structure Changes
• Gradually adjust both the single family tiered
rates and the uniform usage rate applicable to
multi -family and non-residential accounts
consistent with proportionality standards.
•Gradually adjust the monthly service charges to
better reflect the capacity relationship across
meter sizes
• Recommend both of these changes be phased -
in over athree-year period.
Future Rate Ceiling
Current
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Proposed
Jan. 2013
Jan. 2014
Jan. 2014)
(Jan.2015
Jan.201G
Jan. 2017
Jan. 2018
Jan. 2019
Rate Increase -->
2.5%(2)
3
3.0%(4)
3.0%(4)
3.0%
3.0%
3.0%
USA GE-BA SED RATES
Monthly Service Charge
Single Family
3/4" meter $ 23.78
$
24.37
$
23.26
$
22.80
$
21.65
$
22.30
$
22.97
$
23.66
1" meter $ 38.60
$
39.57
$
37.38
$
36.26
$
34.01
$
35.03
$
36.08
$
37.16
1 1/2" meter $ 75.42
$
77.31
$
72.45
$
69.63
$
64.62
$
66.56
$
68.56
$
70.62
2" meter $ 119.79
$
122.78
$
114.71
$
109.84
$
101.52
$
104.57
$
107.71
$
110.94
Multi-Family and Non-Residential (1)
3/4" meter $ 23.78
$
24.37
$
23.26
$
22.80
$
21.65
$
22.30
$
22.97
$
23.66
1" meter $ 38.60
$
39.57
$
37.38
$
36.26
$
34.01
$
35.03
$
36.08
$
37.16
1 1/2" meter $ 60.24
$
61.75
$
62.08
$
64.28
$
64.62
$
66.56
$
68.56
$
70.62
2" meter $ 75.27
$
77.15
$
84.29
$
94.17
$
101.52
$
104.57
$
107.71
$
110.94
3" meter $ 105.38
$
108.01
$
132.74
$
162.18
$
187.65
$
193.28
$
199.08
$
205.05
4" meter $ 135.51
$
138.90
$
193.14
$
254.80
$
310.67
$
319.99
$
329.59
$
339.48
6" meter $ 195.68
$
200.57
$
333.69
$
480.82
$
617.94
$
636.48
$
655.57
$
675.24
8" meter $ 255.91
$
262.31
$
494.23
$
747.94
$
986.82
$
1,016.42
$
1,046.91
$
1,078.32
10" meter $ 316.01
$
323.91
$
674.61
$
1,056.08
$
1,417.30
$
1,459.82
$
1,503.61
$
1,548.72
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF) $ 0.92
$
0.94
$
0.94
$
0.97
$
0.96
$
0.99
$
1.02
$
1.05
Tier (11-50 CCF) $ 1.38
$
1.41
$
1.35
$
1.33
$
1.27
$
1.31
$
1.35
$
1.39
Tier 3 (>50 CCF) $ 1.82
$
1.87
$
1.76
$
1.70
$
1.59
$
1.64
$
1.69
$
1.74
Multi-Family and Non-Residential (1)
All water usage $ 0.92
$
0.94
$
1.00
$
1.09
$
1.14
$
1.17
$
1.21
$
1.25
Notes:
(1) Multifamily includes duplexes, triplexes,
fourplexes, apartments,
condominiums,
and
mobile home parks.
(2) This schedule includes the proposed indexing of 2.5 percent, with no rate structure changes.
(3) This rate schedule is revenue neutral relative to the proposed newly indexed January
2014 water
rates, but includes the beginning
of the
proposed 3-year phased changes to the
rate structure.
(4) These rate schedules reflect the second and third year of
the 3-year rate
structure
phasing, as well as the maximum
potential rate
adjustment due to ENR indexing.
Rate COMDarisc
City of Galt
2.89
1.19
24.31
City of Tracy
11.70
1.00
29.70
City of Sacramento
22.18
0.91
38.48
City of Modesto
15.03
1.40
40.23
City of Manteca
18.90
1.43
44.64
City of Lodi
24.37
0.94
45.05
City of Stockton
21.15
1.60
49.95
City of Brentwood
19.08
2.99
61.32
City of Lathrop
16.50
2.63
65.56
City of Oakland
17.17
2.66
65.05
City of San Mateo
10.50
4.26
99.60
City of Burlingame
35.97
7.26
121.04
Wastewater Rate Structure Changes
• Establish monthly service charges, based on
meter size, for multi -family and non-residential
accounts, similar to water rate structure
• Adopt wastewater usage -based rates for multi-
family and non-residential accounts for future
transition to usage -based wastewater rates
� Hseqap.-H
W
Future Rate Ceiling
Current Proposed Proposed Proposed Proposed Proposed
Jul. 2013 Jul. 2014 Jul. 2015 Jul. 2016 Jul. 2017 Jul. 2018
Rate Increase --> 3.0% 3.0% 3.0% 3.0% 3.0% 0
USAGE -BASED RATES
Monthly Service Charge
Single Family (per DU)
$ 23.52
$
24.23
$
24.96
$
25.71
$
26.48
$
27.27
Multi -Family and Non -Residential
(1)
3/4" meter
$
24.23
$
24.96
$
25.71
$
26.48
$
27.27
1" meter
$
38.83
$
39.99
$
41.19
$
42.43
$
43.70
1 1/2" meter
$
75.03
$
77.28
$
79.60
$
81.99
$
84.45
2" meter
$
118.63
$
122.19
$
125.86
$
129.64
$
133.53
3" meter
$
220.45
$
227.06
$
233.87
$
240.89
$
248.12
4" meter
$
365.88
$
376.86
$
388.17
$
399.82
$
411.81
6" meter
$
729.12
$
750.99
$
773.52
$
796.73
$
820.63
8" meter
$
1,165.18
$
1,200.14
$
1,236.14
$
1,273.22
$
1,311.42
Usage Rates ($/CCF)
Single Family (2)
$ 2.68
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Multi -Family (2)
$
2.76
$
2.84
$
2.93
$
3.02
$
3.11
Non -Residential (2) (3)
Low Strength
$
2.76
$
2.84
$
2.93
$
3.02
$
3.19
Medium Strength
$
3.45
$
3.55
$
3.66
$
3.77
$
3.88
High Strength
$
4.49
$
4.62
$
4.76
$
4.90
$
5.05
Industrial (4)
Flow (per MG annually)
$ 3,487.41
$
3,592.03
$
3,699.79
$
3,810.78
$
3,925.10
$
4,042.85
BOD (per 1,000 lbs annually)
$ 575.51
$
592.78
$
610.56
$
628.88
$
647.75
$
667.18
SS (per 1,000 lbs annually)
$ 359.85
$
370.65
$
381.77
$
393.22
$
405.02
$
417.17
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) Usage charge based on winter water use determined as the average from the prior December -February period.
Adjusted each July for each account.
(3) Placeholder. These rates not yet in use.
(4) Applies to industrial users discharging into the domestic sewer system.
date COMDeqrisc
City of Sacramento
39.68
0.8049
46.92
38.89
City of Modesto
n/a
n/a
30.40
City of Tracy
n/a
n/a
31.00
City of Stockton
n/a
n/a
37.31
City of San Mateo
n/a
6.81
40.86
City of Lodi
23.52
2.68
47.64
43.05
City of Galt
n/a
n/a
45.75
City of Brentwood
15.48
4.80
47.79
City of Manteca
n/a
n/a
51.25
City of Lathrop
n/a
n/a
59.40
City of Oakland
13.38
7.35
79.53
City of Burlingame
n/a
12.25
82.47
�.`f:Ti iTi7 [-7 lmt[i me iEl RUTFi man
Single Family Residential
Flat Rate - 2 Bdrm Home
Flat Rate - 3 Bdrm Home
Mtr'd Rate - Low Usage
Mtr'd Rate - Median Usage
Mtr'd Rate - High Usage
Muti-Family Residential (1)
Flat Rate - 2 Bdrm Apartment
Duplex w/ 3/4" Mtr.
Fourplex w/ 1" Wtr. Mtr.
12 Unit Apartment w/ 1 1/2" Mtr.
80 Unit Apartment w/ 4" Mtr.
40 Unit MH Park w/ 2" Mtr.
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
Monthly
Water Bill
Change
Water
Current
Proposed
Use
Rates
Rates
CCF
(Jan. 2013)
Jan.2O14
s
n/a
$
35.91
$
36.81
$
0.90
2.5%
n/a
$
43.04
$
44.12
$
1.08
2.5%
9
$
32.06
$
31.72
$
(0.34)
-1.1%
16
$
41.26
$
40.76
$
(0.50)
-1.2%
32
$
63.34
$
62.36
$
(0.98)
-1.5%
n/a
$
30.79
$
31.56
$
0.77
2.5%
36
$
61.58
$
59.26
$
(2.32)
-3.8%
60
$
123.16
$
97.38
$
(25.78)
-20.9%
150
$
369.48
$
212.08
$
(157.40)
-42.6%
720
$
2,463.20
$
913.14
$ (1,550.06)
-62.9%
250
$
1,026.80
$
334.29
$
(692.51)
-67.4%
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
Notes:
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
Monthly Wastewater Bill
Change
Winter
Current
Proposed
Wtr. Use
Rates
Rates
CCF
Jul. 2013
Jull.2014
$s
%
Single Family Residential
Flat Rate - 2 Bdrm Home
n/a
$
34.44
$
35.47
$
1.03
3.0%
Flat Rate - 3 Bdrm Home
n/a
$
43.05
$
44.34
$
1.29
3.0%
Mtr'd Rate - Low Usage
6
$
39.60
$
40.79
$
1.19
3.0%
Mtr'd Rate - Median Usage
9
$
47.64
$
49.07
$
1.43
3.0%
Mtr'd Rate - High Usage
12
$
55.68
$
57.35
$
1.67
3.0%
Muti-Family Residential (1)
Flat Rate - 2 Bdrm Apartment
n/a
$
34.44
$
35.47
$
1.03
3.0%
Duplex w/ 3/4" Mtr.
16
$
68.88
$
68.39
$
(0.49)
-0.7%
Fourplex w/ 1" Wtr. Mtr.
28
$
137.76
$
116.11
$
(21.65)
-15.7%
12 Unit Apartment w/ 1 1/2" Mtr.
72
$
413.28
$
273.75
$
(139.53)
-33.8%
80 Unit Apartment w/ 4" Mtr.
480
$
2,755.20
$
1,690.68
$ (1,064.52)
-38.6%
40 Unit MH Park w/ 2" Mtr.
180
$
1,033.20
$
615.43
$
(417.77)
-40.4%
Notes:
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
•
Single Family Residential
Flat Rate - 2 Bdrm Home
Flat Rate - 3 Bdrm Home
Mtr'd Rate - Low Usage
Mtr'd Rate - Median Usage
Mtr'd Rate - High Usage
Muti-Family Residential (1)
Flat Rate - 2 Bdrm Apartment
Duplex w/ 3/4" Mtr.
Fourplex w/ 1" Wtr. Mtr.
12 Unit Apartment w/ 1 1/2" Mtr.
80 Unit Apartment w/ 4" Mtr.
40 Unit MH Park w/ 2" Mtr.
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Monthly Wtr/WW Bill Change
Current Proposed
Rates Rates $s %
$ 70.35
$
72.28
$
1.93
2.7%
$ 86.09
$
88.46
$
2.37
2.8%
$ 71.66
$
72.51
$
0.85
1.2%
$ 88.90
$
89.83
$
0.93
1.0%
$ 119.02
$
119.71
$
0.69
0.6%
$ 65.23
$
67.03
$
1.80
2.8%
$ 130.46
$
127.65
$
(2.81)
-2.2%
$ 260.92
$
213.49
$
(47.43)
-18.2%
$ 782.76
$
485.83
$
(296.93)
-37.9%
$ 5,218.40
$
2,603.82
$ (2,614.58)
-50.1%
$ 2,060.00
$
949.72
$ (1,110.28)
-53.9%
Notes:
(1) Current bill amounts for multi -family examples are all based on flat rates, and assume
two bedroom dwelling units. Proposed bill amounts are based on metered rates, except
where noted.
UP 9 IV M f re
Monthly Water Bill
Change
Water
Current
Proposed
Use
Rates
Rates
CCF
Jan.2O13
Jan.2O14
$s
Retail Store (w/ 1" mtr.)
48
$
82.76
$
85.38
$
2.62
3.2%
Small Motel (w/ 1" mtr.)
120
$
149.00
$
157.38
$
8.38
5.6%
Restaurant (w/ 1 1/2" mtr.)
160
$
207.59
$
222.25
$
14.65
7.1%
Small Manufacturer (w/ 2" mtr.)
169
$
230.75
$
253.29
$
22.54
9.8%
Grocery Store (w/ 2 mtrs.)
518
$
611.76
$
664.04
$
52.27
8.5%
Big Box Retail (w/ 2 mtrs.)
541
$
633.48
$
687.64
$
54.16
8.5%
Large Retail Store (w/ 2" mtr.)
739
$
815.16
$
931.89
$
116.73
14.3%
Large Office Bldg. (w/ 4" mtr.)
704
$
783.11
$
897.06
$
113.94
14.6%
High School (w/ 3 mtrs.)
2,268
$
2,441.57
$
2,818.13
$
376.56
15.4%
Hospital (w/ 6 mtrs.)
2,963
$
3,505.27
$
4,067.37
$
562.10
16.0%
Indus. Food Processor (w/ 4 mtrs.)
6,025
$
5,973.20
$
6,659.34
$
686.14
11.5%
Indus. Food Processor (w/ 6 mtrs.)
8,565
$
8,376.22
$
9,156.93
$
780.71
9.3%
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0
16
Monthly Wastewater Bill
Change
WW
Current
Proposed
Use
Rates
Rates
SSUs
Jul. 2013
Jul. 2014
$s
010
Retail Store
3.12
$
107.45
$
110.67
$
3.21
3.0%
Small Motel
4.00
$
137.76
$
141.88
$
4.12
3.0%
Restaurant
14.00
$
482.16
$
496.58
$
14.42
3.0%
Small Manufacturer
22.85
$
786.95
$
810.49
$
23.54
3.0%
Grocery Store
25.00
$
861.00
$
886.75
$
25.75
3.00/0
Big Box Retail
36.08
$
1,242.60
$
1,279.76
$
37.16
3.00/0
Large Retail Store
13.98
$
481.47
$
495.87
$
14.40
3.011/a
Large Office Building
92.63
$
3,190.18
$
3,285.59
$
95.41
3.00/bi
High School
133.93
$
4,612.55
$
4,750.50
$
137.95
3.00/bi
Hospital
48.56
$
1,672.41
$
1,722.42
$
50.02
3.0%
Industrial Food Processor
639.67
$
22,030.23
$
22,689.09
$
658.86
3.0%
Industrial Food Processor
1,258.06
$
43,327.59
$
44,623.39
$
1,295.80
3.0%
Retail Store
Small Motel
Restaurant
Small Manufacturer
Grocery Store
Big Box Retail
Large Retail Store
Large Office Building
High School
Hospital
Industrial Food Processor
Industrial Food Processor
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Monthly Wtr/WW Bill
Change
Current
Proposed
Rates
Rates
s
%
$ 190.21
$
196.05
$
5.83
3.1%
$ 286.76
$
299.26
$
12.50
4.4%
$ 689.75
$
718.83
$
29.07
4.2%
$ 1,017.70
$
1,063.78
$
46.08
4.5%
$ 1,472.76
$
1,550.79
$
78.02
5.3%
$ 1,876.07
$
1,967.39
$
91.32
4.9%
$ 1,296.63
$
1,427.76
$
131.13
10.1%
$ 3,973.29
$
4,182.64
$
209.35
5.3%
$ 7,054.12
$
7,568.63
$
514.51
7.3%
$ 5,177.68
$
5,789.79
$
612.11
11.8%
$ 28,003.44
$
29,348.44
$
1,345.00
4.8%
$ 51,703.80
$
53,780.32
$
2,076.52
4.0%
Summary of Key Points
• Rates must meet Prop. 218 cost of service requirements
• Rate structure changes should be adopted prior to
further migration from flat to usage -based rates
• New rate structures will improve equity for all customers
• Three-year phasing of usage -based water rates will
ease the transition for larger customers
• Further refinement in non-residential wastewater rates
will be required as more data are available
Solid Waste Rates
b. On April 1, 2009, and on each anniversary thereof during the term of
this Agreement, the rates shall be adjusted in a percentage amount equal
to eighty percent (80%) of the annual change in the Consumer Price
Index for all Urban Consumers for San Francisco -Oakland -San Jose,
California area, All Items (1982 — 84 = 100) published by the Bureau of
Labor Statistics (the Index) for the twelve (12) month period ending
December 31 of the preceding calendar year.
c. In January of each year, Contractor shall send to City a revised rate
schedule reflecting the new rates, as adjusted by the Index as provided in
Section 7.b. City Council will act on rate adjustments to be effective on
April 1 of that year.
Solid Waste Rates
The city authorized a five year price index bases adjustments for solid
waste in 2009 pursuant to a standalone proposition 218 notice. At that time
the notice allowed increases based on eighty percent of the CPI as well
possible increases for fuel costs and tipping fees. Although the five years
on that approval has not yet run, the City and Waste Management would
like to get water, wastewater, and solid waste increases on the same
schedule to make adjustments more cost efficient. Staff recommends that
Council authorize up to 100 percent CPI adjustment for solid waste in place
of the prior 80% plus tipping and fuel price.
Rate Adoption Process
• Approve 2.5% ENR adjustment to water rates effective
January 2014 under previous authorized indexing
• Follow required Proposition 218 process for other rate
updates:
• Mail Notice of Public Hearing to all customers/property owners
at least 45 days prior to public hearing on rates
• Conduct water and wastewater rate hearing on December 18
• Adopt new water rate schedules to be effective January 2014
• Adopt new wastewater rate schedules to be effective July 2014
• Re -adopt ENR indexing mechanism for next five years
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