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Agenda Report - January 16, 2019 C-11 PH
TM CITY OF LODI COUNCIL COMMUNICATION AGENDA TITLE: MEETING DATE: PREPARED BY: AGENDA ITEM Set Public Hearing for March 20, 2019 to Consider Adopting Resolution Setting Future Water, Wastewater, and Solid Waste Rate Schedules Pursuant to Proposition 218 for Residential, Commercial, and Industrial Customers January 16, 2019 Public Works Director RECOMMENDED ACTION: Set public hearing for March 20, 2019 to consider adopting resolution setting future water, wastewater, and solid waste rate schedules pursuant to Proposition 218 for residential, commercial, and industrial customers. BACKGROUND INFORMATION: In 2014, the City Council approved a five-year rate program for the water and wastewater utilities, and the solid waste franchise. The Council action complied with the Proposition 218 requirements pertaining to such actions. The action also established a water meter charge schedule that identifies the property owner's cost to purchase a water meter ranging in size from 3/ -inch to eight -inch. The meter pricing is to remain unchanged until the end of the water meter program and includes installation by City forces. The last pre -approved rate adjustment under the current program for the water utility reflected a 3.0 percent increase, effective January 1, 2017, with a 2021 rate rollback upon the projected completion of the Water Meter Program; and a 2.5 percent increase for the wastewater utility, effective July 1, 2016, which was below the three percent Engineering News Record (ENR) index increase, also approved in 2014. A summary of the programmed rate adjustments and the implemented rate adjustments for the past five years is provided in the table in Exhibit A. The purpose of this table is to demonstrate past rate increases have frequently been below the approved adjustments. In preparation of the new five-year program, Staff engaged the services of The Reed Group, Inc. 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 B. Staff is recommending a new five-year rate adjustment program for water, wastewater, and solid waste that will 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 C and D, 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 ENR 20 -Cities Average Index. 3. The financial model includes the planned rate rollback to 2016 rates in accordance with Resolution 2017-23. The rate rollback will include the proposed rate increases in 2019 and 2020 and will reduce water rates by over eight percent when it takes effect on January 1, 2021. APPROVED: _ City s anager K:\WP\UTILITY RATES \W WW\2019 WWW Rate Increase \CCSetPH Rates.doc 1/8/2019 Set Public Hearing for March 20, 2019 to Consider Adopting Resolution Setting Future Water, Wastewater, and Solid Waste Rate Schedules Pursuant to Proposition 218 for Residential, Commercial, and Industrial Customers January 16, 2019 Page 2 4. 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. 5. Debt service payments for Surface Water Treatment Facility (SWTF) remain at approximately $2.3 million per year. 6. New development revenues are planned to fund the Southwest Gateway Water Tank in Fiscal Year 2022/23, at a cost of $2.7 million. 7. Maintenance is scheduled for multiple wells in the system, amounting to approximately $1.2 million. 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 ENR 20 -Cities Average Index. 3. Wastewater main rehabilitation continues at an investment rate of approximately $2.0 million every other year. 4. The 2003 Certificates of Participation debt service is paid off in the first year, amounting to approximately $3.2 million. 5. Debt service payments for the improvements at White Slough Water Pollution Control Facility (WSWPCF) have been reduced to approximately $3.0 million per year, due to a refinancing of the 2007 Certificates of Participation. 6. New development revenue toward payment of WSWPCF debt service is assumed modest ($400,000 per year) to retain the utility's high bond rating. 7. Capital expenditures are planned, amounting to approximately $17.5 million, to expand the recycled storage ponds and to reconstruct an existing electrical building and install coarse screening facilities at WSWPCF. 8. Net available capital at the end of Fiscal Year 2022/23 falls below the 50 percent reserve target, but remains above a reserve of 25 percent. Nearly all new development revenues are planned to be used to fund debt service. Rate schedules and rates analysis information were supplied to the City Council at the January 15, 2019 Shirtsleeve Meeting. Proposition 218 protest hearing notices and explanation letters, both English and Spanish translations (Exhibit E), will be mailed 45 days prior to the proposed public hearing to consider adopting the various rate schedules for the period from March 21, 2019 through December 31, 2023. The rate schedules set maximum limits on the various water, wastewater, and solid waste 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 on March 20, 2019, the City Council will be asked to receive public comment and adopt resolutions setting future adjustments to water, wastewater, and solid waste rates with limits for the period between March 21, 2019 through December 31, 2023. The proposed rate program includes a temporary water shortage rate surcharge for the water utility to offset the financial impacts of mandatory water use restrictions resulting from drought conditions. If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would be implemented when the City Council declares a water shortage emergency, necessitating mandatory water use reductions exceeding 10 percent. Water shortage rate surcharges have been designed such that customers meeting water use reduction goals will have lower water bills than their normal water bills with normal water usage. Temporary water shortage surcharges would be applied to the water usage rates (but not to monthly service charges or flat water rates) and the amount of the surcharge would vary with the magnitude of required water use reductions. Solid Waste Rates The existing franchise agreement (Agreement) with Central Valley Waste Services for Solid Waste Collection, Recycling and Green Waste Collection, and Processing Services in the City of K:\WP\UTILITY RATES \W WW\2019 W WW Rate Increase\CCSetPH Rates.doc 1/8/2019 Set Public Hearing for March 20, 2019 to Consider Adopting Resolution Setting Future Water, Wastewater, and Solid Waste Rate Schedules Pursuant to Proposition 218 for Residential, Commercial, and Industrial Customers January 16, 2019 Page 3 Lodi was adopted in 2008 and extends until December 31, 2023. An amendment to the Agreement was approved in 2010 that gives the Contractor the unilateral option to extend the Agreement until December 31, 2030. The Agreement states in Section 7b that rates for solid waste collection are to be adjusted annually on April 1, of each anniversary of the Agreement. Section 7c of the Agreement was amended by Proposition 218, which was passed and authorized by City Council at the May 7, 2014 Public Hearing, and now allows Central Valley Waste Services the option to either: (a) adjust the rates in a percentage amount equal to 80 percent of the annual change in the Consumer Price Index (CPI) for all Urban Consumers for San Francisco -Oakland -San Jose, California Area, All Items (1982-84=100) plus an adjustment for extraordinary increases in landfill fees, fuel and energy costs, and changes in law up to 100 percent of the change in the CPI, or, (b) 100 percent of the annual change in the CPI without the other adjustments but with a certification that costs had increased by more than 100 percent of the change in the CPI. Staff recommends Council approve annual rate adjustments in accordance with the current Agreement through December 31, 2023. Any increase greater than 100 percent of the CPI would require a separate Proposition 218 procedure and is subject to City Council approval. A new category of solid waste rates to comply with Assembly Bill (AB) 1826 is added and titled, "Commercial Organic Collection and Processing Services." These rates will apply to businesses that have four or more yards of solid waste services. This rate schedule is provided in Exhibit F. AB 1826 was passed in September 2014 to aid in meeting the statewide goal of diverting 75 percent of waste from the landfill by 2020. The law requires businesses, including state and local agencies with businesses that generate certain amounts of organic waste per week, to have organic waste recycling programs on or after April 1, 2016. Organic waste includes food waste, green waste, landscape and pruning waste, nonhazardous wood waste, and food -soiled paper. AB 1826 has phased thresholds to which agencies must have a program in place to comply with the law. The City of Lodi did not have any qualifying businesses until January 1, 2019, when the threshold was reduced to where agencies must have an organic waste recycling program in place to accommodate businesses generating four or more cubic yards of solid waste per week. Currently, there are 457 commercial customers that meet the mandatory organics recycling threshold on January 1, 2019. To prepare for implementing AB 1826 requirements, Central Valley Waste Services has purchased an organics recycling truck and the carts and bins needed for initiating service. They also provided educational materials to impacted businesses in October 2018, shared the draft organics recycling program with Cal Recycle, and is currently preparing an education program for businesses pending City approval of the rates and the program. FISCAL IMPACT: Increased revenues are required to properly fund capital maintenance to keep up with cost of service increases and new state mandated costs. FUNDING AVAILABLE: Not applicable. CO Q" Charles E. Swimley Jr. Public Works Director CES/tdb Attachments K:\WP\UTILITY RATES\W WW\2019 W WW Rate Increase\CCSetPH Rates doc 1/8/2019 Exhibit A Programmed and Implemented Rate Adjustments Water Year Programmed Implemented 2014 3.30 (1) 2.5 (2) 2015 2.00 (1) 2.00 (2) 2016 1.975 (1) 1.975 (2) 2017 3.36 (1) 3.00 (2) 2018 3.98 (1) 0 (1) Engineering News Record Index Change (2) Recommended by Staff Programmed and Implemented Rate Adjustments Wastewater Year Programmed Implemented 2014 2.6 (1) 2.50 (2) 2015 2.80 (1) 2.50 (2) 2016 2.70 (1) 2.50 (2) 2017 3.00 0 2018 3.00 0 (1) Engineering News Record Index Change (2) Recommended by Staff CITY OF LODI Water and Wastewater Rate Study Draft Report January 3, 2019 THE REED GROUP, INC. CITY OF LODI WATER AND WASTEWATER RATE STUDY Table of Contents SECTION I. EXECUTIVE SUMMARY 1 Introduction and Background 1 Financial Plans and Revenue Needs 2 Proposed Water and Wastewater Rates 3 Comparison of Proposed Rates with Neighboring Communities 6 Water Shortage Financial Analysis and Water Shortage Surcharges 7 Adopting Proposed Water and Wastewater Rates 9 SECTION II. WATER AND WASTEWATER FINANCIAL PLANS 10 Fund Structure and Cash Flows 10 Financial Plan Assumptions 12 Financial Plan Findings and Conclusions 18 Financial Plan Revenue Requirement Recommendations 22 Water Shortage Financial Analysis 26 SECTION III. WATER RATES 32 Current Water Rates 32 Continuing Transition to Metered Water Rates 33 Proposed Multi -Year Water Rate Schedules 34 Water Shortage Rate Surcharges 36 SECTION IV. WASTEWATER RATES 40 Current Wastewater Rates 40 Continuing Transition to Metered Wastewater Rates 41 Proposed Multi -Year Water Rate Schedules 42 THE REED GROUP, INC. CITY OF LODI WATER AND WASTEWATER RATE STUDY SECTION I. EXECUTIVE SUMMARY INTRODUCTION AND BACKGROUND The City of Lodi retained The Reed Group, Inc. to prepare new ten-year water and wastewater system financial plans and to update the water and wastewater rates for the City's two utilities. The purpose of the study was to ensure that water and wastewater rates are sufficient to meet each utility's financial and service obligations for ongoing operation and maintenance, debt service, and capital improvements while maintaining prudent reserves. The last adjustment to the water rates occurred in 2017, and wastewater rates were last adjusted in 2016. The scope of services for the water and wastewater rate study included the following: • Review financial goals and policy objectives related to the water and wastewater utilities • Review the current budgets, existing debt obligations, and capital improvement plans • Prepare ten-year financial plans and determine annual water and wastewater rate revenue requirements for the utilities • Review the current water and wastewater rate structures, as well as the continuing transition from flat rates to metered rates • Verify that water and wastewater rate recommendations meet the legal requirements for cost of service, and prepare multi-year rate plans to meet the anticipated revenue needs of each utility for up to five years • Evaluate the potential financial implications of water shortages, develop a water shortage strategy to mitigate financial deficits created by shortage conditions, and propose temporary water shortage rate surcharges as part of the strategy • Present draft study findings and recommendations to the City Council during a shirtsleeve meeting • Prepare a water and wastewater rate study report (this report) to document the analyses performed during the study • Present study recommendations to the City Council during a regular meeting, and assist the City in preparing a notice of public hearing regarding the proposed water and wastewater rates • Present final water and wastewater rate recommendations during a public hearing to adopt new rates. The purpose of this report is to describe the analyses performed, present the financial plans for the utilities, provide the basis and rationale for rate adjustments, and summarize findings and recommendations regarding the water and wastewater rates. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 1 CITY OF LODI WATER AND WASTEWATER RATE STUDY FINANCIAL PLANS AND REVENUE NEEDS Since 2012, the City has worked diligently to limit annual water and wastewater rate adjustments to be less than or equal to the rate of annual inflation. In addition, in anticipation of the completion of the water meter retrofit program, in 2017 the City Council approved a reduction of water rates in January 2021 to the levels that existing in 2016. While the meter retrofit program will continue until about 2023, the rate rollback is still planned. Maintaining the very limited increases in water and wastewater rates has been challenging for the City for multiple reasons. First, the conversion of customers from flat water rates to metered rates has resulted in a greater reduction in water demand than had been previously anticipated. Second, the statewide drought from a few years ago also contributed to reduced water sales and a decline in anticipated revenues. In addition, water demand has not rebounded to pre -drought levels thereby continuing to limit revenues. Third, growth in operating costs and capital program needs continue to apply financial pressure on the utilities. And fourth, the transition to metered billing is creating additional revenue volatility for both the water and wastewater utilities thereby increasing the need for maintaining prudent financial reserves. Constant pressure to keep water and wastewater rates low can result in a chronic underfunding of infrastructure rehabilitation and upgrade needs and create unnecessary financial risk. This water and wastewater rate study has focused on working to maintain limited increases to the City's water and wastewater rates while also limiting financial risk. Input from the City's Public Works staff has been instrumental in achieving these results. At present, the City's water utility generates sufficient revenue to meet ongoing operation and maintenance costs and debt service obligations, as well as most capital improvement needs. However, in years with high capital program expenditures the water utility can experience significant reductions in the level of financial reserves. While previous financial planning and rate studies have recommended a 25 percent Operating Reserve for the water utility, the continuing transition to metered billing and the significant variability of the annual capital program expenditures suggests the need to increase the target for the Operating Reserve. At present the City's wastewater utility also generates sufficient revenue to meet ongoing operation and maintenance costs and debt service obligations, as well as most capital improvement needs. And, like the water utility, in years with high capital program expenditures the wastewater utility experiences significant reductions in the level of financial reserves. While previous financial planning and rate studies recommended a 25 percent Operating Reserve for the wastewater utility, the continue transition to metered billing and the significant variability annual capital program expenditures suggests the need to increase the target for the Operating Reserve. In addition to meeting the financial needs of the utilities with respect to operating and maintenance costs, debt service obligations, and capital program needs, it is recommended that the City increase the target for a prudent financial Operating Reserve from 25 percent of annual operating and maintenance costs, including debt service, to 50 percent of these annual costs. This change is indicated due to the increased revenue volatility associated with metered rates and billing, as well as the variable costs associated with water and wastewater THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 2 CITY OF LODI WATER AND WASTEWATER RATE STUDY capital improvement programs. Reaching and maintaining the higher reserve levels cannot be achieved immediately but can be met by the end of the 10 -year planning period. In light of the current and estimated future financial needs of the water and wastewater utilities, it is recommended that the City continue to annually adjust its water and wastewater rates to: (1) ensure continued financial support for ongoing operation and maintenance costs, including debt repayment, (2) provide adequate funding for the water and wastewater capital improvement programs, and (3) by the end of the planning period establish and then maintain increased Operating Reserves of at least 50 percent of annual operating and maintenance costs, including debt service. In addition to adjusting the overall level of water and wastewater rates to meet current and estimated future revenue needs, it is recommended that the City adopt temporary water shortage surcharges, which would be implemented in the event of a future drought or other water supply shortage. These surcharges would only be implemented when water use restrictions are necessary and mandated by the City Council. The temporary surcharges, as presented herein, will also help to reduce financial risk for the benefit of both the City's water utility and customers. The water and wastewater financial plan models reflect information, assumptions, and estimates that are believed reasonable at the present time. However, conditions change. It is recommended that the City review the financial condition of the water and wastewater utilities annually as part of the budget process and perform a more comprehensive financial plan and rate update study every 3 to 5 years, unless otherwise needed sooner. The financial analyses presented in this report indicate that the revenues generated by the current and proposed water and wastewater rates would not exceed the cost of providing service, including maintaining prudent reserves for specified purposes. Details of financial plan analyses, determination of the annual water and wastewater rate revenue requirements, and analysis supporting drought -related temporary water shortage surcharges are presented in Section II of this report. PROPOSED WATER AND WASTEWATER RATES Exhibits I-1 and I-2 present the proposed water and wastewater rate schedules, respectively, each spanning a five-year period. It is recommended that the initial water rate adjustments be implemented effective in April 2019, with subsequent adjustments implemented each January, from 2020 through 2023. It is recommended that the initial wastewater rate adjustments be implemented effective in July 2019, with subsequent adjustments implemented each July, from 2020 through 2023. No changes to the water or wastewater rate structures are proposed at the present time. A cursory review of both structures indicates that they continue to generally function as intended and reflect a proportionate allocation of costs to each customer consistent with legal requirements. In addition, the City Council's decision to roll back water rates to the schedule that existed in 2016 would be complicated by any rate structure change at the present time. Also, the City is still in the midst of its transition from flat rates to metered rates. It is recommended that once all water meters are installed the City then undertake a comprehensive cost of service study and consider rate structure refinements at that point in time. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 3 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit 1-1 City of Lodi Current and Proposed Maximum Water Rate Schedules Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 $ 33.79 $ 34.80 $ 31.88 $ 32.84 $ 33.83 2 bedroom $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 3 bedroom $ 47.27 $ 48.64 $ 50.10 $ 45.89 $ 47.27 $ 48.69 4 bedroom $ 56.79 $ 58.44 $ 60.19 $ 55.14 $ 56.79 $ 58.49 5 bedroom $ 68.11 $ 70.09 $ 72.19 $ 66.13 $ 68.11 $ 70.15 Multi -Family Units 1 bedroom $ 28.19 $ 29.01 $ 29.88 $ 27.37 $ 28.19 $ 29.04 2 bedroom $ 33.81 $ 34.79 $ 35.83 $ 32.82 $ 33.80 $ 34.81 3 bedroom $ 40.58 $ 41.76 $ 43.01 $ 39.40 $ 40.58 $ 41.80 4 bedroom $ 48.68 $ 50.09 $ 51.59 $ 47.26 $ 48.68 $ 50.14 Non -Residential Per ESFU $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 Monthly Service Charges (Metered) Up to 3/4" meter $ 21.87 $ 22.50 $ 23.18 $ 21.23 $ 21.87 $ 22.53 1" meter $ 34.34 $ 35.34 $ 36.40 $ 33.34 $ 34.34 $ 35.37 1 1/2" meter $ 65.25 $ 67.14 $ 69.15 $ 63.34 $ 65.24 $ 67.20 2" meter $ 102.52 $ 105.49 $ 108.65 $ 99.53 $ 102.52 $ 105.60 3" meter $ 189.50 $ 195.00 $ 200.85 $ 183.98 $ 189.50 $ 195.19 4" meter $ 313.73 $ 322.83 $ 332.51 $ 304.59 $ 313.73 $ 323.14 6" meter $ 624.03 $ 642.13 $ 661.39 $ 605.85 $ 624.03 $ 642.75 8" meter $ 996.55 $ 1,025.45 $ 1,056.21 $ 967.52 $ 996.55 $ 1,026.45 10" meter $ 1,431.26 $ 1,472.77 $ 1,516.95 $ 1,389.57 $ 1,431.26 $ 1,474.20 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) $ 0.97 $ 1.00 $ 1.03 $ 0.94 $ 0.97 $ 1.00 Tier 2 (11-50 CCF) $ 1.29 $ 1.33 $ 1.37 $ 1.25 $ 1.29 $ 1.33 Tier 3 (> 50 CCF) $ 1.60 $ 1.65 $ 1.70 $ 1.56 $ 1.61 $ 1.66 Multi -Family $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Non -Residential $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23, which includes a rate rollback in January 2021 to the water rates that were in effect in 2016. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap. Proposed water rates continue to include flat rates for unmetered customers and fixed monthly service charges based on the size of the water meter, a three-tier water usage rate structure for single family residential customers, and a uniform water usage rate for multi- family, non-residential accounts with water meters. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 4 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit 1-2 City of Lodi Current and Proposed Maximum Wastewater Rate Schedules Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% 3.0% 3.0% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 1 bedroom $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 2 bedroom $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 3 bedroom $ 46.49 $ 47.84 $ 49.28 $ 50.76 $ 52.28 $ 53.85 4 bedroom $ 55.79 $ 57.41 $ 59.13 $ 60.90 $ 62.73 $ 64.61 5 bedroom $ 65.09 $ 66.98 $ 68.99 $ 71.06 $ 73.19 $ 75.39 Mobile Homes Any Size $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Schools Per SSU (18 students = 1 SSU) $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Non -Residential Per SFU $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 Monthly Service Charges (Metered) Up to 3/4" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter $ 25.40 $ 40.92 $ 79.06 $ 124.33 $ 232.29 $ 385.52 $ 768.28 $ 1,227.76 26.14 $ 26.92 $ 27.73 $ 28.56 $ 29.42 42.11 $ 43.37 $ 44.67 $ 46.01 $ 47.39 81.35 $ 83.79 $ 86.30 $ 88.89 $ 91.56 127.94 $ 131.78 $ 135.73 $ 139.80 $ 143.99 239.03 $ 246.20 $ 253.59 $ 261.20 $ 269.04 396.70 $ 408.60 $ 420.86 $ 433.49 $ 446.49 790.56 $ 814.28 $ 838.71 $ 863.87 $ 889.79 1,263.37 $ 1,301.27 $ 1,340.31 $ 1,380.52 $ 1,421.94 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 $ 2.97 $ 3.06 $ 3.15 $ 3.24 $ 3.34 High Strength Users Flow (per MG annually) $ 3,730.00 $ 3,838.17 $ 3,953.32 $ 4,071.92 $ 4,194.08 $ 4,319.90 BOD (per 1,000 lbs annually) $ 616.00 $ 633.86 $ 652.88 $ 672.47 $ 692.64 $ 713.42 SS (per 1,000 lbs annually) $ 385.00 $ 396.17 $ 408.06 $ 420.30 $ 432.91 $ 445.90 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap. Proposed wastewater rates continue to include flat rates for unmetered customers and fixed monthly service charges based on the size of the water meter and a uniform wastewater usage rate for single family, multi -family, and non-residential accounts with water meters. High strength accounts will continue to be subject to sewer service charges based on wastewater flow as well as loading characteristics of their wastewater. Additional information on the current water and wastewater rate structures and proposed schedules for the next five years are presented in Section III of this report. The combined effect of proposed water and wastewater rate changes for 2019 is an estimated increase in the typical metered monthly single family water and wastewater bill THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 5 CITY OF LODI WATER AND WASTEWATER RATE STUDY from $89.43 to $92.02, for an increase of $2.59 or 2.9 percent. Because both water and wastewater rates are proposed to increase by 2.9 percent and no rate structure changes are proposed, all combined water and wastewater bills will increase by 2.9 percent, all other factors remaining equal. COMPARISON OF PROPOSED RATES WITH NEIGHBORING COMMUNITIES A typical monthly water and wastewater bill for single family residential customers with metered rates in Lodi is currently and will continue to be lower than bills for comparable customers in most neighboring communities. Typical bills for a metered single family customer in Lodi is compared with water and wastewater bills, based on current rates in neighboring communities in Exhibit I-3. Exhibit 1-3 City of Lodi Comparison of Typical Monthly Water/Wastewater Bills with Neighboring Communities (1) Wastewater Total Water Bill Bill Bill City of Tracy City of Manteca City of Lodi - CURRENT City of Lodi - PROPOSED City of Lodi - 2021 (2) City of Galt City of Stockton City of Lathrop 32.80 32.60 38.02 39.15 36.88 33.70 68.75 90.93 34.00 43.30 51.41 52.87 56.08 63.15 44.16 75.00 66.80 75.90 89.43 92.02 92.96 96.85 112.91 165.93 $180 $160 $140 $120 $100 $80 $60 $40 $20 $- • Water Bill Wastewater Bill t City of Tracy City of City of Lodi - City of Lodi - City of Lodi - City of Galt City of City of Manteca CURRENT PROPOSED 2021 (2) Stockton Lathrop Notes: (1) Based on metered water rates with 15 CCF of average monthly water usage and 9 CCF of monthly winter water usage (for wastewater bill calculations), and a 3/4" residential meter. (2) Includes rollback of water rates to 2016 schedule previously approved by the City Council. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 6 CITY OF LODI WATER AND WASTEWATER RATE STUDY WATER SHORTAGE FINANCIAL ANALYSIS AND WATER SHORTAGE SURCHARGES The water and wastewater rate study also included an analysis of the financial impacts associated with drought and reduced water sales. As drought conditions worsened in 2015, the Governor declared a statewide water emergency and ordered urban water agencies to reduce water use by 25 percent. In implementing the Governor's Executive Order, the SWRCB required the City of Lodi to reduce water use by 20 percent relative to 2013 water use. The City, like other communities in the state, responded by requiring customers to reduce water usage and implementing restrictions on water use. The City, the region, and the State recently emerged from the multi-year drought. However, the City is concerned about potential financial vulnerability in the event of a future drought, especially a multi-year drought. The financial analyses in this report support the development of temporary water shortage rate surcharges that would be implemented during periods of mandatory water use reductions, as declared by the City Council. Water shortage conditions can result in (1) reduced water sales, (2) reduced water supply purchase and pumping costs, (3) increased groundwater production costsl, and (4) increased water conservation education and assistance costs. The net effect of these impacts can create a financial deficit during periods of water shortage (i.e., revenue will decline more than the decline in expenses). To counter the financial impact of water shortage, a multi -prong strategy is proposed that includes (1) utilizing a portion of available operating reserves to offset the financial deficit created by reduced water sales, and (2) adopting and implementing temporary water shortage rate surcharges to generate supplemental revenue when mandatory use restrictions are necessary, and (3) in the most severe conditions defer capital program expenditures to preserve cash. This strategy, including the temporary water shortage rate surcharges, should be incorporated into the City's water shortage contingency plans. Proposed temporary water shortage rate surcharges would be implemented whenever the City Council declares a water shortage emergency requiring mandatory water use reductions. The temporary water shortage rate surcharges would be applied to water usage rates (but not to monthly service charges or flat water rates). The temporary surcharges would mean that both the water utility's water system reserves and customers would bear a proportionate share of the financial burden created by water shortage. The water shortage rate surcharges have been designed such that customers meeting water use reduction goals will have lower water bills than their normal water bills. Customers that do not meet water use reduction goals may have higher water bills, as illustrated in Exhibit III - 5 in Section III of this report. Exhibit I-4 presents the proposed temporary water shortage rate surcharges, expressed as a percentage increase to the normal water usage rates. The amount of increase depends on the level of water use reduction goals. It is expressed as a percentage so that it can be applied to any future water usage rate schedule. The specific rates shown in Exhibit I-4 are an application of the temporary water shortage surcharge percentages to the water rates 1 The City has the ability to shift its water supply mix to increase reliance on groundwater during periods of shortage. This helps the City meet water supply needs. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 7 CITY OF LODI WATER AND WASTEWATER RATE STUDY proposed for April 2019. As an example, with a water use reduction goal of up to 20 percent (Minor Shortage), a 5 percent water shortage rate surcharge would temporarily increase the Tier 1 residential water usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Monthly service charges and flat rates for unmetered customers would be unaffected by the imposition of the temporary water shortage surcharges. Details of the water shortage financial analysis are presented in Section II of this report and proposed temporary water shortage surcharges are presented in Section III of this report. That section also includes information on how customers' bills would be affected by the proposed surcharges, both for customers meeting water use reduction goals, as well as those that do not. Exhibit 1-4 City of Lodi Proposed Temporary Water Shortage Rate Surcharges Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage Conditions (Voluntary) (Mandatory) (Mandatory) (Mandatory) (Mandatory) Use Reduction Goal --> None 5% to 10% 10% to 20% 20% to 30% 30% to 50% > 50% Temp. Water Shortage Surcharge (2) None None 5% 10% 15% 20% Monthly Service Charges Up to 3/4" meter $ 22.50 1" meter $ 35.34 1 1/2" meter $ 67.14 2" meter $ 105.49 3" meter $ 195.00 No Changes to Service Charges 4" meter $ 322.83 6" meter $ 642.13 8" meter $ 1,025.45 10" meter $ 1,472.77 Water Usage Rates ($/CCF) (3) Single Family Residential Tier 1(0-10 CCF) $ 1.00 $ 1.00 $ 1.05 $ 1.10 $ 1.15 $ 1.20 Tier 2 (11-50 CCF) $ 1.33 $ 1.33 $ 1.40 $ 1.46 $ 1.53 $ 1.60 Tier 3 (> 50 CCF) $ 1.65 $ 1.65 $ 1.73 $ 1.82 $ 1.90 $ 1.98 Multi -Family $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Non -Residential $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Notes: (1) The temporary water shortage rate surcharge percentages are shown applied to the proposed water usage rates for April 2019 for illustrative purposes. The percentages would be applied to any then -current water usage rates when implemented by declaration of a water shortage by the City Council. (2) The temporary water shortage rate surcharge woud be an incremental (percentage) increase in the water usage rates, but woul not be applied to monthly service charges or to any flat water rates for unmetered customers. (3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate surcharges. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 8 CITY OF LODI WATER AND WASTEWATER RATE STUDY ADOPTING PROPOSED WATER AND WASTEWATER RATES In order to adopt the proposed multi-year water and wastewater rate plans, as well as the proposed water shortage rate surcharges the City will need to follow the requirements contained in Article XIII D of the California Constitution (Proposition 218). This includes a Notice of Public Hearing to be mailed to all affected property owners and customers at least 45 days prior to a public hearing. It is recommended that the City combine the adoption of the water and wastewater multi-year rate plans and the temporary water shortage rate surcharges into a single public notice and rate hearing process. This will save the City both time and expenses. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 9 CITY OF LODI WATER AND WASTEWATER RATE STUDY SECTION II. WATER AND WASTEWATER FINANCIAL PLANS This section of the report describes the financial plans and related recommendations for the City's water and wastewater utilities. The ten-year financial plans are used to determine annual water and wastewater rate revenue requirements. The annual rate revenue requirement is the amount of revenue needed from water or wastewater rates to cover planned operating, maintenance, debt service, and capital program costs with consideration of other revenues and financial reserves. FUND STRUCTURE AND CASH FLOWS The financial plans are annual cash flow models and represent updated versions of the financial plan models that the City has successfully utilized for the past ten years. As a cash flow model, it differs from standard accounting income statements, and balance sheets. The financial plans model sources and uses of funds into, out of, and between the various funds and reserves of both the water and wastewater utilities. The financial plan models are based on the fund structures currently used by the City and incorporate proposed reserve policies for specified purposes. This structure was discussed with staff, with concurrence that it provides a helpful framework for evaluating the financial needs of each utility and for clearly demonstrating how operating and maintenance costs, debt service obligations, and capital program needs are addressed. The proposed reserve structure includes an Operating Reserve within each of the Operating Funds (Funds 560 and 530), as well as Capital Funds (Fund 561 and 531) for the purpose of meeting water and wastewater system capital improvement needs of the capital program and Impact Mitigation Fee Funds (Fund 562 and 533/535) that account for revenue associated with new development and capital projects needed to provide capacity for that development. Exhibit II -1 includes schematic diagrams of the funds/reserves and major cash flows associated with the two financial plan models. An understanding of the fund/reserve structure is helpful in understanding the financial plan worksheets that model estimated annual cash flows through the water and wastewater utility from one year to the next. The fund/reserve structure is comprised of: • Water and Wastewater Operating Funds (560 and 530) - The Operating Fund is the primary fund within each utility. Most of the water/wastewater system's revenues, including user rate revenues, flow into the Operating Fund and all operating and maintenance costs, including debt service payments, are paid out of this fund. Funds are also transferred from the Operating Fund to the Capital Fund to pay for capital projects of the capital improvement program on a pay-as- you-go basis. o Operating Reserves - Previous financial plans included a 25 percent Operating Reserve. It is recommended that the City establish and maintain Water and Wastewater Operating Reserves equal to 50 percent of annual operating and maintenance costs, including debt service, for both of the utilities. The purpose of the Operating Reserve is to provide working capital and funds for unplanned operating and maintenance expenditures or unplanned reductions in revenue. The balance in the THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 10 CITY OF LODI WATER AND WASTEWATER RATE STUDY Water Operating Fund at the end of FY 17-18 was about $3,749,000, or about $1,265,000 below the recommended 50 percent target Operating Reserve. The balance in the Wastewater Operating Fund at the end of FY 17-18 was about $15,310,000, or about $9,317,000 above the 50 percent target Operating Reserve. Exhibit II -1 City of Lodi Water and Wastewater Financial Plans -- Schematic Diagram of Cash Flows User Rate Revenues Other O pe r. Revenue Interest Earnings Impact Mitigation --> Fees OPERATING FUND Operating Reserve CAPITAL FUND O&M Expenses > Debt Service IMPACT MITIGATIO N FUND Replacement, Rehabilitation, and Upgrade Rate Stabilization Fund (534) (WW only) Projects Expansion Projects o Available Balance - The balance in the Operating Fund in excess of the 50 percent target amount for the Operating Reserve is shown in the financial plan as Available Balance. After all other obligations are met the Available Balance is used to offset rate increases. The financial plan models generally seek to reduce any Available Balance over time. A negative value for the Available Fund Balance indicates shortfalls in maintaining the recommended minimum 50 percent Operating Reserve. The high Available Balance in the Wastewater Operating Fund is not excessive, but necessary to meet future capital program needs of the utility. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 11 CITY OF LODI WATER AND WASTEWATER RATE STUDY • Water and Wastewater Capital Funds (561 and 531) - The Capital Fund is used to account for revenues and funds available for capital project expenditures related to replacement, rehabilitation, and upgrade projects. Transfers from the Operating Fund provide funds intended for these capital project purposes. The financial plan models generally seek to maintain a zero or positive balance in the Capital Funds while also covering the costs of planned capital improvement projects. This is achieved through annual transfers of funds from the Operating Fund to the Capital Fund of each utility. • Water and Wastewater Impact Mitigation Fee Funds (562 and 533/535) - The Impact Mitigation Fee Funds are used to account for revenues and funds available for capital project expenditures that provide new capacity to the water and wastewater systems. Impact mitigation fees, paid by new development, are available to improve system capacity and help meets the capacity needs of new development. The wastewater utility maintains separate Impact Mitigation Funds for wastewater and stormwater project purposes. A portion of wastewater impact mitigation fee revenues is transferred from the Wastewater Impact Mitigation Fee Fund to the Wastewater Operating Fund to help pay debt service. This is consistent with the wastewater impact mitigation fee methodology and the intended use of fee revenue. • Wastewater Rate Stabilization Fund (534) - The wastewater utility also maintains a Rate Stabilization Fund consistent with debt covenants. The Rate Stabilization Fund currently maintains a balance of $500,000. It is available to assist with meeting debt service coverage requirements, if necessary. Since its inception, this fund has never been utilized. FINANCIAL PLAN ASSUMPTIONS The water and wastewater financial plans reflect the city's FY 18-19 budget and financial conditions as of the beginning of the fiscal year. The financial plans also reflect the City's debt service obligations and capital improvement programs, as identified by City staff, during the planning period that extends through FY 29-30. The financial plans are based on the best available information and reasonable assumptions; future estimates have been reviewed with staff and are believed to be reasonable. • Inflation Rates - The financial plan analyses include general inflation at 3.0 percent per year. The general inflation rate applies to all operating and maintenance costs except water purchases from the Woodbridge Irrigation District, which increases at 2.0 percent per year. Capital project costs are escalated at 3.0 percent per year to the year of construction. These inflation assumptions have been reviewed with City staff and are reasonable for financial planning purposes. • Interest Rates - Interest earned on fund/reserve balances is estimated to be 3.0 percent per year, which is consistent with the current interest earnings of money invested with the Local Agency Investment Fund (LAIF). Interest calculations are based on beginning -of -year balances. The City also pays interest on outstanding long-term debt obligations. The interest payments on outstanding debt are those contained in existing contracts and repayment schedules. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 12 CITY OF LODI WATER AND WASTEWATER RATE STUDY • Growth Projections - The financial plans assume the annual pace of new development equivalent to approximately 1.0 percent of the single family customer base. The estimate is believed to be reasonable and has been reviewed with City staff. • Water and Wastewater Impact Mitigation Fees - Water and wastewater impact mitigation fees for FY 19-20 are based on fee amounts contained in a new fee study. In future years, they are adjusted at the rate of construction inflation. Estimated annual impact mitigation fee revenues are based on the applicable fees and the amount of new development activity. Impact mitigation fee revenue accrues to each Impact Mitigation Fee Fund and is used to help fund planned expansion capital improvement projects. Consistent with the City's impact mitigation fee methodology, a portion of impact mitigation fee revenue may be transferred each year to the Operating Fund help pay a portion of growth -related debt service obligations (including unmet past obligations). • Customer Demand - The City was under state -mandated water use restrictions during the recent drought. A slight rebound in water demand is expected in FY 18-19 after which the average customer water demands are assumed to remain constant. A full rebound to pre -drought water usage is not included due to hardening of usage (i.e., permanent conservation measures implemented during the drought) and anticipated new water conservation requirements from the State. The assumptions used are believed reasonable and have been reviewed with City staff. Changes in water demand also affect annual wastewater flows used in wastewater revenue analysis, though to a lesser degree. Because wastewater bills are determined based on prior year winter water usage (wastewater average), the impact of the rebound in water demand is delayed in wastewater billing. Also, winter water use (reflecting indoor water use) is expected to rebound by a smaller amount, as most water conservation was achieved through reductions in outdoor irrigation. • Operation and Maintenance Costs - The financial plan model is based on current operating and maintenance costs as reflected in the adopted FY 18-19 operating budget, with future estimates based on the inflation and growth assumptions described above. Assumptions were reviewed with and approved by City staff. • Long -Term Debt Obligations - The City's water and wastewater utilities are fortunate to have a limited amount of long-term debt. The only water system debt obligation is related to a 2010 water bond. That bond issue included Build America Bonds (BABs), which provided a significant interest rate subsidy from the federal government. The net annual debt service for the water utility is currently slightly less than $3.0 million, not considering the BABs subsidy that is currently about $662,000 annually. The wastewater system's debt obligations include certificates of participation (COPs) issued in 2004, 2010, and 2016. The 2016 COPs were a refunding of the eligible portion of the 2007 COPs and took advantage of lower interest rates. The total annual debt service for the wastewater utility is also currently about $3.0 million. The water and wastewater debt service obligations reflected in the financial plans are presented in Exhibits II -2 and II -3, respectively. No new long-term debt is included in the financial plan analyses. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 13 CITY OF LODI WATER AND WASTEWATER RATE STUDY 0 M N >- C O N 'a O C a+ 0 O • > E W V en 0 1 N f6 2010 Water Bond Series A o L(1 0 .--I 0 00 oa �- v m .--I N ../1- 0 /? O 00 O O 01 00 O1 0 m 00 N N VT 01 oo o o o 00 O O1 00 00 M 00 N N 14 in. O N 0 00 O 00 01 H 00 N N 101 c -I 01 V O N O o O 00 V1 0 M 00 N 0.0 V V1 o 01 0 10 0 N O Nr. 01 H VT 01 0 0 0 N 0 Lr1 o O 01 N. N to 0 00 0 LO 1n 00 m ti m .--I V ../1- 0 /1 0 LO O u1 O v1 L(.1. -I IN 01 0 CO N N V, 14 0 0 0 00 0 0 0 1..(1 0 00 0 ' 00 0 1D 00 .-I 01 V M 00 O O 0O N .--I LTs. 01 VT 111 i/T LID 0 0 0 O 00 0 N N O 00 O o o O .ti 00 l0 00 . 01 O O O 00 I.D. VT 01 t 01 V1 0 0 0 O Lr1 0 00 00 O 101 O0 0 O W O O n O ut Ol 0 0o N ✓1 to 014 VT 001 til LD 0 O 0 O 10 O H O I 00 O p D O 01 01 c-1 0 O CO .ti m .ti ill N VT V1 ✓1 V1 CO 1 0 oo O 00 O au; LO 1 00 00 VT Cr O O 01 O 00 u1 O 00 IN 00 01 UT N 0 0 OO o O cc O N oo N N ti VT 0} N 0 00 0 u1 0 us - 1.(1 0 CO LO N. ry VT N N O Lel 0 O V Lri. 00 OJ 00 00 N N1 O1 0 v 0 N O N O 0 N 01 01 N ul to 0 0 N O 10 O Oi N ti O m N N N t/1 0 LOni N 0 01 N ry ti LC) O o 0 o O D 1 00 n 01 u> N 00 an. v1 L0 0 10 O N 0 1 o o O 0 oo N u(1 O u O .--1co O 01 10 .--1 01 0 ti 10 0 10 O .tio oo c tn. UT LO 10 O u O .--I O O1 1 m 01 VT N 10 00 $ (662,045) $ (662,045) $ (662,045) $ (662,045) $ (662,045) $ (643,179) $ (622,832) $ (601,040) $ (577,658) $ (550,050) $ (521,325) $ (491,370) $ T 0 0 0 0J c a m $ 2,305,611 $ 2,307,111 $ 2,307,711 $ 2,305,911 $ 2,304,511 $ 2,309,477 $ 2,306,688 $ 2,306,219 $ 2,307,794 $ 2,306,522 $ 2,308,175 $ 2,307,544 $ 2,304,630 Net Annual Debt Service THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 14 CITY OF LODI WATER AND WASTEWATER RATE STUDY • O - ▪ O L Y W u Wastewater System Debt Obligations O 00 O1 N >- >- LL } 00 N N >- 00 N V1 N } LL N 4 N } N O } orn 000 o ti 0 0; r-- 0 O N N N O rnN 00 01 O m m 00 N 00 00 N N N ref 00 01 00 N 00 0 in N LO m 0 01 in in. 00 M 00 01 M N 00 N N 00 N O N 0 00 O o0 • N 00 tn. V) 0 N • 0 00 O O O VF an 00 0 N 0 00 06 0 01 N Vr Lf ID 0 M O 00 0 N 04 N N O N 0 M 00 O Q1 O 00 V1 V) 0 N 0 06 0 • NN LF an ID 0 N 00 OO 00 0 O NO 00 iA 0 V1 O N 0 ti V1 n 00 a CO ▪ 0 04 O 1A 0 P0'� 0011 M 4 - N 00 to 0 0 0 0 0 1A N 0 • N n N 0 O O N IID N 0/0 1A O O 0 0 o a o 1D CO ✓ ? N O O 0 00 00 La V in 00 O O O M V e4 an. 1A 1.11 N m 00 a) V 0 N 0 0l • 00 01 00 / F iA 0 O O 0 A O Tr 0• 00 01 0 N M Vr iA 0 0 N O m a Tti LA - 00 0 0 0 0 a LA V1 Obi 0 N N ✓ f 00 O O 0 0 01 N a m e -I m LF in - 0 A 0 O M 0 • O m o N O ✓ ) iA 0 0 0 V1 0 01 O e00 N ri 0/f N 0 10/1 0 1A O N N 01 N V 01.00 0 0 0 0 0 00 IID 00 0 1A 0 0 0 1n 0 V1 tri a N 01 N ID N an. 1A 0 0 0 V1 0 0 O 00 N 01 0 N N N 04 0 0 0 00 tri 00 01 Tr m N 00 0 0 0 LA 0 0 N n a N N CO i/) VT O O 0 0 a m m an. 1A 0 0 0 V1 0 0 N M N 00 i/? 0 10/1 0 V) 00 • 00 0/0 1A 0 0 0 N 0 01 O 00 V? N o 0 10A 0 O 00 00 in 00 0 N 0 00 N 4 0 0 1.11 O LA 0 tD V IDLO VI 0/0 N 10/1 0 V1 0 • V1 V1 00 N to e• -j N O . 0 0 0 0 00 0 0 CO ti 10) in 04 0 0 V1 0 V1 0 01- O V) N CO CO N Tr- an- VF iA O O V1 O O O 00 V1 00 a m O ri 0/0 N O O m O 00 11 N N n Oi ✓ T N 0 0 V1 0 0 O rl N V1 O1 00 0 O 0 0 n 00 ▪ ti O O V1 0 0 .03 vi rn 01 00 Vr Lf 10A 00 1.0 0 m m 01 an. N 0 0 1A 0 01 0 V1 • N 01 al. Vf O O N 0600 1A co m o 0 O LA 00 0 01 V1 CO CM aN O ✓ / iA O 00 00 ID N V0 VF N ID V0 N VF O O 0q. 100 .-i N O N VI 01 tD 00 N y} O I/O O 00 tD 00 N N b O1 n 00 00 N O O 00 N 0 V1 tD n 00 0 M VF n m" O 00 an. tD n iD Le O m N 1D an iD 0 m N tD n ID cn 00 N VF Total Annual Debt Service THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 15 CITY OF LODI WATER AND WASTEWATER RATE STUDY • Capital Improvement Program - The water utility's capital improvement plan, as developed by staff, includes multiple projects totaling about $30.1 million (in current dollars) through FY 29-30 to be funded by the water utility. Planned annual water system CIP expenditures range from about $750,000 to about $7.50 million and average about $2.5 million. Exhibit II -4 graphically summarizes the water CIP into broad categories of projects, which include meters and mains, surface water treatment facilities, groundwater wells, the DBCP program, vehicles and equipment, and other facilities. A detailed table listing the timing and estimated cost for each water capital improvement project is presented in Exhibit II -5. The wastewater utility's capital improvement plan, as developed by staff, includes multiple projects totaling about $72.2 million (in current dollars) during this period to be funded by the wastewater utility. Planned annual wastewater system CIP expenditures range from about $2.90 million to about $12.45 million and average about $6.0 million. Exhibit II -6 graphically summarizes the wastewater CIP into broad categories of projects, which include the sewer collection system, the wastewater treatment facility, the stormwater system, and vehicles and equipment. A detailed table listing the timing and estimated cost for each wastewater capital improvement project is presented in Exhibit II -7. Exhibit 11-4 City of Lodi Water System Capital Improvement Program (Current Dollars) $8,000,000 Meters and Mains Surface Water Treat. Facil. $7,000,000 Groundwater Wells DBCP Program • Vehicles/Equipment Other Facilities $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 ... 1 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 16 CITY OF LODI WATER AND WASTEWATER RATE STUDY N O OJ rV.. E A 0D 0 J CE o xT �% Vo O n E o. is E N T N 01 f0 0 M u 00 u 00 ri N LL 6 6 Y N 4 Y M N LL N N a N N LL N N LL N N } N LL coo 0 coo 0 000 0 ui o 0 0 N o vl o N ill rl M N N N coo 0 coo 0 coo 0 Le' o O O 00000 0 N ill rl M N N N coo 0 coo 0 coo 0 L o O O N o vl o N vl rl M N N N O 0 o o 0 0 0 0 0 0 0 0 0 Cr Cr 01 0 N N N 0 0 0 0 0 0 0 0 v1 0 N N N 0000000000000000000000000000 N O O O O N ON N N N N N V1 N VN N N N N N N N N N N N 0 0 0 ul O O O N O v O N vl N M N N N CC 010 NN O O O 0 0 0 0 0 0 0 0 0 0 0 O O O O O 0 0 0 0 0 0 0 0 0 N O coo N 00 N N N N 00 0 N N N N N N N N N N N N N N 00 N 00 ul o ul O o O o N u N O O 0 u1 N N N M 0 N N N N r- 1 N N O O O 0 0 0 0 0 0 0 0 0 0 0 O O O O O 0 0 0 0 0 0 0 0 0 N O coo N 0 O0 0 O.0N N OoN V1 N VN N N N N N N N N N 0 N N 00 0 0 o v1 N N N UOl N O 0 0 tn.tn.N N N M O v1 N rj N N O O O O 0 0 0 0 0 0 0 0 0 0 O O O O O 0 0 0 0 0 0 0 0 0 N O coo N 0 0 ON N N N N V) V1 V1 N N N N N N N N N 0 N V) ,o 00 N uo N 0 0 0 N N N M 0 01 N O O O 0 0 0 0 0 0 0 0 0 0 O O O O O O 0 0 0 0 0 0 0 0 0 O O O O N OO .0 N N N N V) N V1 VN N N N N N N N 00 N V) V) N 00 o uS o 00 o 0 0 O N co N O O co O N .co N M N N •-I N N 0000000000000000000000000000 0 0 0 0 N 00 N N N N N V) V1 V1 N N N 00 N 00 N N N N N V) Vf 000 0 «4 00 00 M O el co •-I N N N N O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O N 0 0 0 N O.0N ON N V) V1 V1 VN 0 N N 00 N 00 .0 N N V) V) Vf 00 N. v01 o o vol N o V N N M M O N N N N N N N O O O 0 0 0 0 0 0 0 0 0 0 0 O O O O O 0 0 0 0 0 0 0 0 0 coo O N N 00 N N N N N N N N O O O N N N coo N I/O N V) Vf 00 co n vvN 0_0_ 1 O 01 O 6 CO Ol N N CO N N N 0l N N N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N 0 0 N N N 0 I/O I/O I/O I/O 0 0 0 0 N N N N N N 0 I/O I/O I/O I/O I/O 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 vi vi N 0 0 O O «//0 «//0 rn N N N! 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O `w u a c e .°7°.2 v vvvvvaaaa ',IA A U' E E E E m m m 2 E:6:, m> ............... l''' m E _• g° E c E E>>>>>> M .O O W CI c a+ c p o— to E E -- d Ya 2~ E uE 13N m m b .2 Abb `-�'«« • i 0 E i +' y w n« 03 T- a w w w w w w m 5 > .i V., • E U g 01 z W g" z z w w w w w w W L7.1 w a✓ m Ln= w, 0 u> i J '• � A E E m 10 10 m 10 m m i'a E 5 • �i v Ell 00 y« c • a `co_ °1 E E CO fll z z z 6 s s s s 01 01 6£ o— z y s v +� a m a 1 a a a a a a a a a = a a Y t_ O > > = a E> E 0- u u E E E E E E E E °- a E '9 — a w a w a w o y i a. 0 0 a a a' a a a a' a' >> a w N m 2(2 m E 2 lr/l 3 a w v N CO N v N .+ N a a v m at+ at+ U ate+ u 0 « L VI N N N N N rl 'i rl 10 N 01 ...°34120 CC 3 a s a, 0 3 3 'u^ w w w w w w w 01 or w w w m 01 m 1E o Il • 3 3 3 01 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3> 3 g 0 0 0 0 N tR 0 0 N to 0 0 N 0 0 • V1 0 0 ▪ 01- 0 o 0 0 N 41- 80 668 001 n 0 N N 0 ▪ N 0 ▪ N N 0 N 0 N 0 00 0 vNf O O O O O O O O O 0 0 N 0 0 a 00 0 0 0 41. 0 COIrr 0 00 a 00 0 0 M 411. Total Water CIP THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 17 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit 11-6 City of Lodi Wastewater System Capital Improvement Program (Current Dollars) $12,000,000 $10,000,000 ■ Sewer Collection System Wastewater Treatment Facility • Vehicles/Equipment $8,000,000 $6,000,000 $4,000,000 $2,000,000 II 1 $- FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FINANCIAL PLAN FINDINGS AND CONCLUSIONS Exhibit II -8 provides the details of the water system financial plan model. Current water rate and other operating revenues are adequate to cover current operating and maintenance costs, as well as debt service payments. However, revenues are insufficient to support peak years in the capital improvement program without depleting the Operating Reserve. The primary challenge for the water utility is to provide sufficient funding for the capital improvement program while also covering operating and maintenance costs and maintaining an adequate Operating Reserve. Exhibit II -9 graphically summarizes the annual revenues, expenses, and year-end balances of the Water Operating Fund (560) through the planning period. Both Exhibits II - 8 and II -9 reflect the proposed water rate adjustments for FY 18-19 through FY 22-23, as well as estimates for future rate adjustments through FY 29-30. It is recommended that the City seek to maintain an Operating Reserve equal to 50 percent of annual operating and maintenance expenses including debt service. However, by limiting annual rate adjustments to the rate of inflation, this target reserve level will not be reached sustainably until the end of the planning period. Also, in FY 19-20 because of Phase 8 of the meter retrofit program, the Operating Reserve will dip below 25 percent. This is a lean financial picture for the foreseeable future. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 18 TS R 0 L �C E N 0 C n W J a o 0 X o E w u E R 0. V E M H 0/ 3 O1 3 O LL LL N N LL Y N LL N LL Y LL 00 n Y CITY OF LODI WATER AND WASTEWATER RATE STUDY O O O O 88 N .4. $2,000,000 $1,000,000 $1,000,000 $2,000,000 $2,000,000 O 0 0 0 0 O 00_0 O 8 O N N ei N N N M O N N 0 0 0 0p 0 O O 0 0 0 O a O o .O , O O O m^ M N N O O O O O O O O O O n O I� N N 0 .0 8 88 m n 4,4m N N O O O O O O O O O 0 O n N ti N 00 0 0 O O O O O 0 00 0 N.a P N a O O O O O ma O m O NN 0 N N N O O O O ad MM. 00 0 00 88 8 88 M 8 O m m �.N O o 00 N N O N 0 O 000 0 0 0 0 000 o 0 0 v1 O O O a O 01(50 O , m N N N W N N N N 000000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 666666666 O N N .�/! .NR m O N O8 - o N N N N N N 0 0l /1 N 001 m . N C N 1- r M N N N N N 0 N MM 0 Mon 06.4' N mm 80 O O O .. n 4.r.; N N 00 0 88 8 88 m r4,-4 N N 88 o O O .M. N 00 • M ▪ N O 0 0 88 1:7P NN 88 8 O 6a om M M mm 80 0 O m N .m §§ 8 O O 0 m8 m m. N .00 N 88 00 N▪ M M 0 O 0 8.8 88 M N N O O0 888 un O OOO 01 0 N 1 0 M . N y N V aN N Q 0 VO l°10 0-0 °o O girl 88On 8 MN N N 0000 N 0 0 0 0 0 0 0 0 0 0 0 0 0 ORO 6 6666 O O n N N N N N O a 0 N NN N N N N 0 0 0 0 0 0 0 O 000 0 8 6 666 666 M .11 M O 0 N N N N O v00 00 N N N 0000. 0 0 00000 0 0 0 00000 O m 00 N N N 0 0.00 8 8888 m mm00 N O 0 0 0 0 0 0 0 0 0 0 0 0 m 666666N NN O O 000 O O O 666 ▪ ;NN N N 00000 O 0000 0 0 0 O m 66666 0 O O 888 O O O O O 0 0 0 O 0 O O O 01 ':04;,;(a m 0 O N N O N .. N N Vl N N N 00000 8 00888 0 08000 0 N N O 0 O O O 0 O O O O .00 O O O O m m m 0 n N .... N N M N N N NM O 0 0 0 0 0 0 O O 666666 O 00(50000 N N N N 0 0 O 0 0 .011 a 0 O m N NN NN NM M MN MN N N O N N 0400 000 mm0 N 0N N N 00 00 0 8 0 N 8 O m p 00 00 N N pO t0 O .00 N N N 880. ON .0/i N .0/T 8 0. 0 88 8 N ti a N N 0. 0 ON N N N 0 0 o 28 e n 8 NN O O N N 0 0 O O 0 0 NN o n OO 00 (5(50- o O 00 N N 0 0 0 0 $8,310,000 $12,450,000 00 • 8NNNN 0 8 O .0111 N V N 0 0 0 0 0 0 8 O O N N N N 0 N m8 N N N 0 0 N N N N O o O i0 O O1 N O N Y1 NN O O 00 N N O O O O o O u1 mm a n n N N MO NN NN MO m fan ao M N N • N a c t t N N N N N O am a ,,,j,„ N 0 a d 901 ° o 6 a a m° r M ' N s m L 1 t a t W .. C '= C C C C W C - - N M v- s w a z a « s °a > o. M. 4 ,z- .L... -5.1,...2E“ 5 v Q v _ E - c n E A E i E63=z E a 0_ dam 0 - 3R o SS c z„ o « ca a n g E Z E« a �- - c a d E° 3 .v. « „„2,,v, v ._ 2. g a m w c E a m ,. c ._ " u8i .Mi1 O° a E n° w ti E o= 5«« v° 3« 3 E s E " C> c E' E 5 _° c `w = `m a ~ w v a E. .Mn E .a E v E v 2 3" m o a ul E E a E a . q s o v o y; z c a w „ .a_ c E n N f6 s E E E m m v$ «`o, ;. ti v N° c E 3 2i 0 3 o w m S a 3 a u -° c _ u a w V ^ „ v Y u n w', m f L N z ul a `w, '^ E °' 3 ° u° E y o a c c w z �`a,, v 3 Y y oE'N vii c � Jo o.� oN�N o c��3 'a' �° �00 oauzu.`a'=� c vu c c m� Y� wZ� « r -o � 3 A ._ m i 3 s y v °' ° v .. n m m-« =_ `-° LL 2. i m m 'y o f m vl 2 i= a w i m n s a o w m �e u N - C 3 E o y w s= E 3 y« E y a c 'o £ t' u a E d w E o m a ,, c E o a a 3 « 3 3 y> .n = J 0 2 o w 3 J o w o `o a E° m m °- '" o .- u W o 6 - 3 c c E- .�'> iu�3z�n '>' x.nx01aum>uv, c m�BLL.i�o_�.,wivaz u�a �md.°n'oLL3O 2Eg THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 19 Total Wastewater CIP LL LL N LL LL LL LL N N LL LL LL CITY OF LODI WATER AND WASTEWATER RATE STUDY 0= = IV g ee N O � N C IV g ,44 m o � m4 gO 7 W . V 0C C ni g Rate Adjustments --> O 0 $5,990,200 $6,359,000 $6,178,100 $4,865,700 0 E O E O N O M O VO 01 N b m O 0 ^ a m N ....... O O O O O • 0 0 e M 000 r r N N VT 011 011 N N O O O O O 571555 in m 0 .7 5 ti r, r` 88888 n ion n 0101 O vt M N N VT N H N N N OOOOO O O O O O O O r• M O 01 0 r n a n l0 N M rl t0 Y1 Vf N N N Vl N N $$$858, 505555V O O M r` Oi Vf V) N Vl Vf VT N e 000000 0 0 0 0 0 0 O O O O M <0 O n a 1Nc n m • N m W 1D M VT vi a E HEM m • 2 1n(1 001 100 M v* v? e VT VT VT N VT LT VI E O O E O E M O O O O O E E N ` V n a • 1+i vi v w 01 Lo‘ N N VT N N N M 0000010 E n ,L 10 0a0 N M N M b M ' v E E ry R an o 515g0 0 2 O o 0 0 0 0 0 0 0 0 0 0� o O 0 0 0 0 0 0 0 0 0 0 0 O 0 r• N r• N a 10 1D a O 10 Wy O tp M 000 m N w O V N 0 0 O1 1D e. e. m N Vi UT V! VT VT UT V! VT VT UT N Vi 0 0 0 0 0 0 0 0 0 0 o a o ry 00 10 1 10 M 01 ry m ry 0 m E m o '^ ry vi $ .�. m o ro n ............. O O O O O O O O O O O O O a a V O m m r• 011 N 0 N 011 0 .�+ 00 o N m v m N °.1 0p 0o m N N N N N ............. O 0 0 0 O 0 0 8 0 0 00 of N r v of v oc v .i vi vi 1c vi N m O m M M O N N W t0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 ill O a V1 0 a0 a M r• N O V O 5 L o a w m N1 m .01. m 00 0000 1O1n 0 0 0 0 0 0 0 0 0 0 0 0 0 001 M M O^ ON M O M O OE, 1011 N O 0001' 0 .ti O 00 M M O .00. n 0 001 W m m N VT VT N VT VT VT N . H VT N . O O O O O O O O O O O O O 01 000 001 00 01 000 5 0 01 01 01 01 O ry an m m m m m N m W 0 .. .�: �m m 00 N Vl N N N N N N Vf N N V} N 558558588555$ v n ry- 0 v m M r- m N N 1r0• ri0ll1i o N E0 0 0 0 0 0 0 0 0 0 0 0 0 O O O o 0 0 0 0 0 0 0 0 in O m o a w m 10 v r• m in o m No5vL061c ^a 1iDc 1^cPR,g /1 IM ei ri R . -i N O N Total Operating Revenues 0 0 0 0 0 0 0 0 0 0 0 10 O M a E M 10 H, E a k n m E 1000 N W a 1D 1010 .0. w r1 001 N N VT VT N N H VT N VT N VT N VT 0 0 0 0 0 0 0 0 0 0 0 10 O M M 10 N FI W V 4 100 On 100 n E v w a n M o 1w0 .. g w m n N to N til N N N M N N M N N O .y O O O O O O O O O N pOj rvamo�m0uO1i0�vai 10 o a m N voi n vo1 N 1r0 e N N V�j 10 a w voi oo m w .1D -i in u1 � u1 .. n 10 m m aR m C V 00 5 m O N .0i m^ 001 00 VT LAI 1.11 0 a VT O a a 1p 1/1 1/1 VT M n 001 V W v n 0, a eo ti M • Oat N N EV; n M. M N C 4- N w iL ~A aN E ; ▪ �E ctH OF — n a> c a 3 a 3 s z 0 m a z Y ( D t W t d W N N — L 11 N 0 3 0 3 w 3 w 3 0 0 o a g VT tn. VT 0 O a rti 0 0 e e a a• ri UT vi Zig O O O O m E O VT EE L,45 N V m .. o m VT O O � 0 a0 w N E O O ti 1/1 0 a m NO 41. Vl m ro 8 8 rti 01. vi rti rn O 10 ro ry VT 8 m 8 ro .a. 88 m a N 10 a vi ':4L,1 VT M. O 01001 aid M � O O O 0 N H V (00 O N 0'0 E 1mi1 E. E. ui o N V N O 0000 0101 N N N m 1/1 00 a n m VT t�0 O VT v N Vi N N H N V) N N N THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 20 ✓ T VT N O VT m Total Water IMF Expend. 10 01 v ro 0m pN rn ti N rO1i rit Foo $ 11,931,679 $ 13,468,050 CITY OF LODI WATER AND WASTEWATER RATE STUDY cr? 1475 = O }, J 43 0 = >. I.1.1 V ci ui N i/? 0 , Oper. & Maint. Costs Debt Service Costs Capital Prog. Transfer — — Proposed Revenues Current Revenues Ending Balance — — Target Oper. Reserve ---_ Min. Oper. Reserve J ii_ ► o o 0 0 0 o o 0 o 0 o o 5 0 o o o o 0 o LA 5 in N ,I ,I i4 i.11 i/1. i? IN IN 4 M 4 M i 1 g tA 4 1 g M ri l 1 i THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 21 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit II -10 (on two pages) provides the details of the wastewater system financial plan model. The wastewater utility differs from the water utility in that it currently has an Operating Fund balance that greatly exceeds the target Operating Reserve. However, the surplus will be needed to fund peak years of the wastewater capital improvement program. By limiting annual rate adjustments to the rate of inflation the wastewater Operating Reserve will dip near or below the minimum 25 percent level at two points in time over the planning period before recovering to the target 50 percent level. Exhibit II -11 graphically summarizes the annual revenues, expenses, and year-end balances of the Wastewater Operating Fund (530) through the planning period. Both Exhibits II -10 and II -11 reflect the proposed wastewater rate adjustments for FY 19-20 through FY 23-24, as well as estimates for future rate adjustments through FY 29-30. This lean financial situation should be monitored closely particularly as the City reaches the peak capital program expenditure years about five years from now. FINANCIAL PLAN REVENUE REQUIREMENT RECOMMENDATIONS The water and wastewater financial plan models were developed in close consultation with Public Works staff in an effort to limit annual rate adjustments to the rate of inflation as determined by changes in the ENR 20 -cities construction cost index. Such rate adjustments have been the practice of the City for the past five years. The water system financial plan also incorporates the rate rollback, as previously approved by the City Council for January 2021. At that time, the water rates will be reduced to the levels that existed in 2016. While the rate rollback was intended to coincide with the completion of the meter retrofit program, metering of multi -family apartment complexes and some commercial accounts will still remain at that time. In summary, the five-year water and wastewater rate recommendations are to continue to adjust water and wastewater rates annually based on changes in the ENR CCI. Because of the timing of this study, the initial water rate adjustments are proposed for April 2019 followed by adjustments each January from 2020 through 2023. Wastewater rate adjustments would all occur in July of each year from 2019 through 2023. Initial adjustments should be 2.9 percent for both water and wastewater, based on the change in the ENR CCI in 2018. Subsequent adjustments would be based on the annual change in the ENR CCI subject to a 3.0 percent annual cap. Every rate adjustment is needed in order to meet the longer-term revenue needs of the utilities. That is, implementing a smaller increase than proposed in any given year could contribute to a future need for rate adjustments that exceed the rate of inflation. This is particularly true with the variability exhibited in the capital improvement programs for both the water and wastewater utilities. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 22 Exhibit 11-10 CITY OF LODI WATER AND WASTEWATER RATE STUDY 01 N N LL CO N LL N tD N LL N N LL u. u. a .41 N N N LL N N LL N a- u. LL N LL 00 0 O j Irl ^ g 11'1 a - c! O M $5,865,300 $7,507,900 0 0 00 m N 0 O m N 0 0 V t0 000 0 0 ' 0 0 m 1 N 1 0 a O^ .-1 N O 0 N N N a 00 O c-1 rI N an VT VT VT VT N an 00 0 0 0 00 ' .1 1- 01 1 0 1 0 0 ,1 N ..1 a O O Vr NrI N VT UT -Ln. VT VT 00 0 0 0 00 ' m a m 1 M O O o .ti 00O N 01 N a O 01 N VT VT VT VT VT VT an 0 N m 1 00 t0 ^ 1 0 6" O .1 Oi O W a N N a O1 01 V1 N VT VT VT 1n N N 00 0 0 0 0 0 00-040 1 M 0 cri en a 1111 oS en e1 0 0 N N m N N a .ti 01 00 N VT N VT UT tn. N VT 0000 0 0 a M 0 m 1 0 1 0 0N0.1 N a a t0 ut N . a N 00 00 VT in VT an 0 0 0 0 O O a 6 O m 1 m 1 0 u1 M tD .ti O O M m� N N a N 06 00 N N ,s VT VI N VT VT 00 0 0 0 0 0 N n m m 1 N 1 0 00Le.1 0 0 VD 1- ut N M Cr N 1- ,...:- .4 VT VT VT N In 1n N VT 0 0 0 0 0 0 t0 6 a m 1 n 1 O .m16 m1 LO t^0 .ey .4 m-1 0 t0 a N N a a N 1- r N VT VT VT UT in VT In O 0 8080110 0 O j a 6W M .1 00 0 M^ .-I 0 CO O N M a en M 6 6 N V1 VT in VT VT N VT VT O M LOLO 0Ul011a100 0 0 T0VM-N0 DN 01 . M M 0 N M a IV ^ �y M 6 tD u1 N VT N VT VT N VT N Rate Adjustments --> co m m m m o 0 0 01 n M t0 0 0 0 t0 m m 00 ut N M N .-1 n .-1 .-1 N 011 M t0 u1 M 1n N VT N VT UT VT N UT 00 0LO 01 t0O 0 y0 CO a . .1 N 1- N .-1 0 0 0 LT O N N N a N N1 0 00 u1 u1 O re v. VT N VT VT VT N V1 N N 0 z 7 0 eti u1 1Nn 0 n 0 00000000 000 m .1 0 0 0 0 10 to 1 M t0 0 M 0^ re M m 0 .-1 0 rn m e01 .01 .1 00 0 0 .1L.0 N 1 . N VT .0. 14 1n N UT VT N VT VT VT 0 0 0 0 0 0 0 0 0 0 0 01000000000-04 u1 t0 0 n 6 e00 6.-1 � tto n .N-1 001 VN1 LAD CO a m 00 0 m LO 0 .ti ,4 u1 .ti .ti 6 VT 14 N VT N VT V> LT VT VT Ur VI - 0 T 0 0 0 0 0 0 0 0 0 0 0 0 us N O 1- m 0 LA a 0 1 0 00 0 M N .a1 W 00 M V ' 0 01 N m 00 a n N O m 0 to N.4 .ti 6 .4 .ti a VT VT VT VT VT VT VT in V1 in VT V1 VT 0 a 00 0--1 N N 0 n N O VF 0 t0 O VT 0 0 0 0 0 0 0 0 0 0 0 t00 00o t00 a O� 0 0 t00 1 M t00 0 1- N 0 6 00 N 0 a M 0 M1 n l^.1 te10 n 0 m .-1 m to 000 a .1 .-i tli N 0 V• VT N N N N N N V• N VT N 0 0 0 0 0 0 0 0 0 0 0 a CO N .-1 CO N .-1 M 1 00 .1 O 10 M enusa n al .a-1 00 00 N 1- M a N m 00 CO m .ti .1 u1 N V N UT N UT N N UT In N VT VT N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LC, 0 a a N N N 0 1 M1 0 0 t00 001 00 N a CO .a-1 W N 000 LO N N N m OO M a .ti .-i 6 M M VT VT VT N VT VT VT VT VT VT VT VT 0 00000000 000 n u1 M en N N 1- m 0 1 00 1n O 0- 00 t0 6 O 0 10 4 M Vi N t -i M .1 ul .a1 m .1 a .10 0 u1 N t0 N t0 m CO O LO 6 .1 4 6 M .1 .1 N VT VT N N V• in. N N VT VT VT to, 0 a 0 00 VT 0 n en 00 0 a N VT 0 0N n N 0 06 n 06 VT 0 0 0 0 0 0 0 0 0 0 0 n n N CO 0 .1 nr a 1.1 0 a N 0 10 m -0-0.0.4,70- T Nm .1 1 ^ . 00 M0 0 N .0 0 1 1 m 0 CO CO 0 m a M 01 N VT an 1n VT N UT VT N VT VT VT 0 0 0 0 0 0 0 0 0 o O .-1 N .-1 00 0 N LO .-1 1 O m O N O00 tD a ul 00 m .1 00 O t0 ut N 0 t0 co 1- 0 0 .ti ,4 V M 6 VT ,4 an In an N In N VT VT N VT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Tf000O- 011 00 1 N N 0 00 a n4 6 0 ena N .1 N 0 N at 0 CO n O N e 1 a M N VF VT N VT VT VT VT N VT an VT {n 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N m CO N N 0 ul 1 us n O 0 t0 N 0 4 N 00 N t0 O N 00 .01-1LO Le, tto 0010 n .-I n 00 O .1 .1 v M ne N VT N N N N N Nin N VT N CA a1 00000000 0 0 000 00 0 0 0 O0 01 I� 00 to O N 0O N CO N 00 001 CMO N Irn 0 01 N ..1 0- 0 0 M O a to n n 0 ^' ti .1 o nig . 1n VT an. UT N N of 1n N VT 1n ut O O N O 00 00 O 00 O 0 a N N N 0 ul N N m m N 01 m .-1 N 00 0 a .-1 m N 1s N N N N O 00 N o0 0 m ut N 01 N t0 6 1\ N 0 N N CO 0 M a 0 a LO M .1 CO 0 CO Ill .1 CO M LA N. , 1 .-1 M N ,-1 NT VT VT i/T VT VT VT VT i/T VT i/T N VT Transfer to Capital Fund (Fund 531) 0 000 O N 0 m VT 0 M 00 N O co N 0 a 0 01 N 0 n n Vr 0 M i/T 0 O M tip N 0 O rri a O 0) 00 O 00 0 n a. a N VT 0 n Total Oper. Expenses and Transfers 0 00 0 01 VT O O1 n VT O M b u0i N 00 N N O N 001 n N O M n t0 N 0 O N 00 N 0 t0 T 01 VT 0 N M M 0 N 0 coa N m 0 CO I/ N O 00 co (00 N u 0 O m c 0 0 n 0 O1 N t0 N N m us l0 N N 0 0 a O R n s VT VT O O co O N M o 0 r 0 1n 0 0 OOO O N vi m m 01 M ri VT VT 0 0 0 O CO .. O m m N lD N VT VT 0 0 0 0 01 O N N aO 0 t0 M VT N 00 0 ONO 0 N rj o N V 00 6 6 V VT 0 0 N 0 O LO O .i N m 00 1.10. VT VT 00 0 CIa O 00 N 0 m N U3. VT VT 0 m 1n 0 M f1i N el 0 0- 0 01 VT VT 0 0 O0i M N VT N 0 O 0 t0 V VT VT 0 O m V In N O O a O N VT V VT 0 V M VT VT 0 O 0 VT VT 0 O N 01 0 O VT VT N O O ' O a VT V 0 CO .a1 0 N N 0 O N VT 0 0 nr es 00 00 (6 0 .01 a N O u1 0 .-i VT VT Debt Service Coverage (min. 1.25) WASTEWATER CAPITAL FUND (FUND 531) 00 n a .-I VT N 0 O m t0 VT O O 0 t0 UT 00 0 0 m 0 N 0 V N V N 0 0 0 0 6 Lei .m1 Omo V .-1 VT N 00 0 0 O O 0 N O N m a m to n co 00 N .1 VT N 0 0 00 M O M to to a to 000 VT O O m V VT 0 V VT Ni N: VT VT 0 0 0 0 0000 .01 M 4 UT VT 00 O O t0 0 n n VT 00 0 00 0 0 0 .-i V 14 ul 01 Le LO us O M o V1 VT VT 0 0 0 0 0 0 1M11 Oat 4111 m m m m oo VT 0 ul 0 t0 UT VT N 0 0 0 0 t0 O 0 a M1 (4 VT N 0 0 00 N V 00 N 0 .1 rn VT N 0 0 00 0 m 0 n N Na m VT en .a1 0 VT VT VT 0 0 6o m N M e VI VT n 0 0 M ONO M VT Total Revenues and Transfers In VT N 0 0 m t0 VT 0 O 0 l0 I/T 0 O to a VT 0 M a O VT O O m V UT 0 m V M VT 0 0 .-i 0 VI 0 0 Lis VT 0 Ln" 0 l0 I/T 0 VT 0 0 O a VT 0 0 a UT 0 O 0 VT Total Capital Prog. Expend. N h VT N N V! VT N h VT N N to 10 N V! THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 23 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit II -10 -Continued M N LL 141 N LL N LL N a N N LL 0 0 0 01 N a VT VT o 0 0 N N n N 00 O N a VT VT o o a 000 n m N m VT VT O o o O o o n n O O 00 ai Ot n N m O O O O O O V to CO t0-1 T l00 m m o 0 0 o n n N O O N .-1 1n m m N UT VT 0 0 0 0 N0 O N N N r 0 m N i/0 VT O 0 0 0 0 00 R N v 00 N a m 00 0 00 N V1 0 t0 r N 0 0 0 0 0 0 00 91 N r1 01 t0 N 0 0 0 0 a m N Rr N N m n N 0 0 0 m V 0 1010 009 m VT VT 0 n N O 1n VT VT 0 ru a N 0 N Tr" O O a OO M 00 m UT O O m n UT 0 '0 m0 N O M a M VT O O 06M VT 0 RN VT 0 N 'b VT 0 N 0 m n O N O O 0 0 a VT in. tn. 0 0 O a VT VT VT 0 O 0 a VT N N O O O O O a N VT uT O O 0 0 a VT VT N 0 0 O O a VT VT N oO 0 a VT VT N O o 00 in N N 0 O O 00 0• N in O O 0 O a N N O O 0 0 a VT VT in 0 0 ' 0 0 0 VT N VT N VT UT O 0 0 a VT 0 00 a VT 0 00 a VT OO O O a VT O O 0 0 a VT 0 O O O a VT O 0 0 a VT O 0 a N 0 0 0 O O 0 0 a VT O 0 0 a VT O0 O 0 O VT VT Total Wastewater IMF Expend. O m m N a 0 O M N m N N O 8 0l n N N O O 0 N VT t0 N m N 08 N M N 8 8 N O ri b a N O 04 M N N O n N m VT O m N n a M N eti Ending Balance uT v V vn Prs a of 1D O co CO tD tq 0 rs w vn m a N Owed Fund 530 for Debt Se VT VT VT 0 0 0 a 0 0 00 N .Mi VT N 0 0 0 0 O N O cri V1 n N N u V 00 $ (1,140,400) $ (1,058,900) O O co 00 .-I O N VT 00 0 0 0 0 V N M N VT VT 0 0 00 n t0 M Ln'ti V - rl VT i/} VT 0 0 0 00 N 'T m a 0 ,tirn .. VT VT in 0 0 0 CO 0 CO 01 10 N .at M o .. .-1 N VT in 1/1. 0 0 0 n Ti- at Lei 6 TF V N 0 91 VT N o 071.3 m m m 0 u en m .1 VT N i/T cnLn r 0 m VT 0 eN. VT O O VT O O t0 0 V} O N 000 u} N 0 rl m VT 000 V1 N. N 0 N 0 00 m. N 0 coO .m. N 0 rn 00 .N. 0 m VT 0 r VT Total Revenues and Transfers In VT VT VT VT VT UT VT VT VT VT VT N 0 0 0 ' 0 N m N N N N in VT VT N N N in in N Total Stormwater IMF Expend. N N 8 N N 8 00 m N H O 0 N N 0 ao1 O N N a vi N m 00 amt N Ending Balance 0 0 o 0 N ' N M 00 N N Cr, TO ID 0 0 0 0 001 t00 ' 0 0 ei N 0 0 N 0 .-1 ~ b in. VT in N 0 8 N 0 ' 0Ln M .M. .M. N 1.0 0 0 0 0 0 001 ' 10n N V1 00 00 M .. M 0 to in tn. VT tn. VT 0 0 0 p0p 9 00 ' 00 O N r r N N ~ t0 UT VT VT VT VT o N.0 0 00 P4 0t r r r n .1 .. at V1 N u VT VT in VT 00 8' 0 000 0 0i 10 000 t.-1 .iO. n V1 N 0 0 0 0 a a ' a m .4- .�. 0-1 000 N N o 0 0 0 0 N at ' O1 a O N N tp m .. .. a N N N VT in N H 0 0 0 0 O 01 ' N N N N 111 O N N N M N N N V 00 N VT 0 O 0 0 0 0 O ' O o 0 .N. .-. N 01 N N in in in N 0 O 00p 0 0 0 N M UT in in. N 0 08 F., o O O 0 2 Total Revs. and Transfers In/(Out) Ending Balance THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 24 CITY OF LODI WATER AND WASTEWATER RATE STUDY THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 25 CITY OF LODI WATER AND WASTEWATER RATE STUDY As proposed, the City should anticipate adjusting water and wastewater rates by the following amounts: Water Utility April 2019 January 2020 January 2021 January 2022 January 2023 Wastewater Utility July 2019 July 2020 July 2021 July 2022 July 2023 2.9% 3.0% -8.4% (rollback to 2016 rates) 3.0% 3.0% 2.9% 3.0% 3.0% 3.0% 3.0% The water and wastewater system financial plan models reflect assumptions and estimates that are believed reasonable at the present time. However, conditions change. It is recommended that the City review the financial conditions of the utilities annually as part of the budget process and perform a more comprehensive financial plan and rate update study every 3 to 5 years, unless otherwise needed sooner. WATER SHORTAGE FINANCIAL ANALYSIS This study also included an analysis of the financial impacts associated with drought and reduced water sales. The City (and the entire State) recently emerged from an extended drought, which included State -mandated water use restrictions. Reduced water sales in recent years have had a financial impact of the water utility as the reduction in water sales revenue exceeded the reduction in water system costs. The financial strain placed on the City's water utility was similar to the strain confronted by many other utilities. With this recent experience, the City is concerned about potential financial impact of a future drought and reduced water usage on the water utility. As a result, a financial analysis of the potential impact of drought was performed as part of this study with the intent of identifying and developing tools for countering the potential financial impacts associated with water shortage conditions. The City's water utility can be affected in several ways by drought conditions. Changes in operating and maintenance costs and revenues can include: • Reduced water sales and water sales revenue • Reduced water purchases and water purchase costs • Reduced or increased groundwater production and production costs2 • Increased water conservation and education/assistance program costs. 2 An increase in groundwater production costs could result from a shift in water supply mix away from WID water purchases and towards groundwater production. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 26 CITY OF LODI WATER AND WASTEWATER RATE STUDY While the reduction in water sales revenue would be partially offset by the reduction in water purchase and production costs, revenue typically declines more than costs creating a financial deficit. Increased water conservation program costs, including education and assistance programs, add to the financial deficit created by water shortage. In response to water shortage, and the financial deficit created, the City has the ability to take several actions. The analysis presented herein focused on three potential courses of action, including: • Using available financial reserves, including portions of the water Operating Reserve • Supplementing water rate revenues through imposition of temporary water shortage surcharges • In more severe conditions deferring capital program expenditures to reduce costs and preserve cash. The City could also reduce operating and maintenance costs, where possible, or seek outside funding sources, such as grants, to help bridge a financial deficit. In its 2015 Urban Water Management Plan, the City has established a Water Shortage Contingency Plan (WSCP). Beyond normal water supply conditions, the WSCP defines five stages of use supply reductions, as indicated below. • Normal Supply - Under normal conditions the City has adequate water supplies to meet all customer water demands. Both water supply and demand could fluctuate by up to 5 percent without creating concern for the utility. • Potential Shortage (Stage 1) - A potential shortage exists when water supplies are reduced from 5 to 10 percent from normal conditions. In this situation, the City would impose voluntary water use restrictions and encourage customers to reduce water demand commensurate with the limited water supply. • Minor Shortage (Stage 2) - A minor shortage exists when water supplies are reduced from 10 to 20 percent from normal conditions. In this situation, the City would impose mandatory water use restrictions and encourage customers to reduce water demand commensurate with the limited water supply. • Moderate Shortage (Stage 3) - A moderate shortage exists when water supplies are reduced from 20 to 30 percent from normal conditions. In this situation, the City would impose additional mandatory water use restrictions and require customers to reduce water demand commensurate with the limited water supply. • Severe Shortage (Stage 4) - A severe shortage exists when water supplies are reduced from 30 to 50 percent from normal conditions. In this situation, the City would impose stricter mandatory water use restrictions and require customers to reduce water demand commensurate with the limited water supply. • Critical Shortage (Stage 5) - A critical shortage exists when water supplies are reduced by more than 50 percent from normal conditions. In this situation, the City would impose the most stringent water use restrictions and require customers to reduce water demand commensurate with the limited water supply. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 27 CITY OF LODI WATER AND WASTEWATER RATE STUDY The California Legislature and the State Water Resources Control Board are in the process of developing new laws and regulations for implementing the Governor's order for expanding water conservation requirements as well as planning and preparing for future water shortages3. The new laws and regulations are evolving and the City may need to modify its WSCP once State regulations have been finalized. Using the financial plan model, an analysis of the potential financial impacts of water shortages was performed. The analysis includes estimating the magnitude of reduced revenue, reduced costs, and increased costs that may be associated with various stages of water shortage. The analysis was performed using financial plan estimates for CY 2025, which is when all customers are expected to be on metered water rates. Exhibit II -12 summarizes estimated CY 2025 operating revenues and water system costs under normalized water supply conditions and under various water shortage conditions. The shortage analysis starts with normal conditions whereby revenues and expenses are effectively in balance4. Under water shortage conditions, a financial deficit is likely to emerge and increases with increasing severity of drought conditions. Exhibit II -13 graphically illustrates the financial deficit created by reduced water sales resulting from water shortage conditions as defined by the City's WSCP. Exhibit II -14 graphically illustrates how the financial deficit created by reduced water sales could be bridged through a combination of actions. Under potential shortage conditions and voluntary use restrictions, the City would rely on its Operating Reserve to bridge the deficit gap. Under more significant conditions with mandatory use restrictions, the City would implement the proposed temporary water shortage rate surcharges to provide supplemental water rate revenue, thereby reducing the impact on reserves. Financial analysis indicates that it would not be necessary to reduce capital improvement program expenditures during minor and moderate shortage periods. However, in severe and critical conditions modest CIP deferrals may be necessary. By invoking the temporary water shortage surcharge during periods of mandatory use restrictions the City would provide customers with a financial incentive for meeting use reduction goals, and also preserve its water system reserves as protection against extended droughts or other risks. In addition, once reserves are drawn down, the City would be faced with having to replenish them, which may necessitate a subsequent rate increase (likely in excess of inflation rates) to re-establish financial stability. 3 See www.waterboards.ca.gov/water_issues/programs/conservation_portal/california_statutes.html for the most recent developments. 4 For the "Normal Supply" condition this analysis shows water operating revenue to be in balance with total costs, even though the costs may include contributions into or from financial reserves, as well as capital program funding. This balanced perspective is necessary to evaluate the impact shortage conditions with reduced water sales. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 28 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit 11-12 lEs O J O T M 0 Strategy to Mitigate the Financial Impact of Water Shortage CY 2025 Financial Analysis (No Flat Rate Revenue) u w 0l w o Si d a1 z c O v , c ar W w O u Supply Reduction C OJ bD W C L f6 Oq ue = O 'ater Shortage L 0 0 O M NN N Z Z o o 0 o 0 o 0 n o N Ln VT VT VT VT VT O O O O 00 00 0 N. O1 N M '71- M l0 m N vT VT VT VT VT vT 0 0 0 0 0 00 00 0 00 0 Ln Ot0 Lkr)0 N m a Lt.)N m VT VT VT 14 VT VT 00000 CO 0 c m 1� Ln ,4 1- 00 V m r- � N m c- N N VT VT 0 0 0 0 0 0 OO O O O O c1 Ln m V N l0 N m to.- 01 l0 N m n Ln O 00 Om !1 cri- W N N c -I c -I c -I c -I VT VT VT 0r VT VT 0 0 0 0 0 0 0 0 0 0 0 0 M M M M M M LnLn Ln Ln Ln Ln t0 t0 t0 t0 L0 t0 ma) 00 00 00 00 1; N - N c-1 c-1 c-1 c -I ,-I ci VT .(1). 111. VT VT VT 000000 00 N l0 ,--I m M Ln OM O I N O N 0 CO L/1 ,-I m N N T -I" ,-1 T -I‘ VT VT VT VT VT VT 0 0 0 0 0 0 0 0 0 0 0 0 ,-I N•71- O m m ci m 00N V Ni N In m M c -I V 0H 00 c N c -I c-1 ,--I ,—I ci -LCI. V} VT VT V} VT 0 0 0 0 0 0 O N N M Ln LD 0 0 0 0 0 O In .--I NI M Ill Normal Supply Potential Shortage Minor Shortage Moderate Shortage 01 00 O 00 to 01 t„01 01 Critical Shortage THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 29 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit 11-13 City of Lodi Financial Impact of Water Shortage $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- ■ Revenues • Expenses Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage (Stage 1) (Stage 2) (Stage 3) (Stage 4) (Stage 5) Exhibit 11-14 City of Lodi Example of Mitigation Measures for Bridging Financial Deficit During Periods of Water Shortage $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- _ Reserve Contribution • Temp. Surcharge Revenue CIP Deferrals 1 7 Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage (Stage 1) (Stage 2) (Stage 3) (Stage 4) (Stage 5) THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 30 CITY OF LODI WATER AND WASTEWATER RATE STUDY Considering that droughts may extend over several years (as the most recent drought did) generating revenue through the shortage surcharge would help preserve the Operating Reserve and lessen the longer-term impact created by extended water shortage conditions. In effect, the temporary water shortage surcharges provide the City with an additional tool for managing the financial risk associated with water shortage conditions. Adopting the water shortage rate surcharges (presented in Section III of this report) is an important step in providing a comprehensive strategy to protect the water utility's financial condition against the uncertainty associated with potential future drought conditions. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 31 CITY OF LODI WATER AND WASTEWATER RATE STUDY SECTION III. WATER RATES This section of the report presents water rate recommendations and schedules for the next five years. The water system financial plan, presented in the previous section, was used to determine the annual water rate revenue requirements and to develop the strategy for meeting current and future financial obligations. As described in this section, no changes to the water rate structures are proposed at this time. This section also presents recommendations for adopting a new temporary water shortage rate surcharge, which could be implemented in the event of a future drought or water shortage that necessitates mandatory water use restrictions and reductions in usage. CURRENT WATER RATES The current water rate schedule is summarized in Exhibit III -1. The City last adjusted its water rates in 2017. The last comprehensive water rate study occurred in 2013. The City is continuing to transition customers from flat (unmetered) water rates to usage -based (metered) water rates as the meter retrofit program continues. The City's goal is to have all customers on metered water rates by 2025. Flat water rates include a fixed monthly charge for single family homes and multi -family dwelling units based on the number of bedrooms. A small number of non-residential accounts also pay flat water rates based on the number of equivalent dwelling units. The metered water rates include a fixed monthly service charge based on the size of the water meter. Single family accounts are subject to a 3 -tier usage rate structure and multi- family and non-residential accounts pay a uniform water usage rate. The tiered water usage rates for single family homes was originally developed in 2009. The tier structure reflects differences in water supply costs (groundwater and WID water) and provides a proportionate method of allocating costs that also helps to achieve the City's water conservation objectives. The uniform water usage rate applicable to multi -family and non- residential accounts is equal to the weighted average of the single family tier rates to ensure proportionality between customer classes. Tier rates were determined to not be suitable for multi -family and non-residential accounts due to the diversity of water use characteristics and the more complex and costly administrative requirements. Minor refinements to the metered water rate structure were made as part of the 2013 update study. The rate structure was also reviewed in 2015 following the Appellate Court decision in City of San Juan Capistrano v. Capistrano Taxpayers Association. At present, about 46 percent of metered water rate revenue is generated from water usage charges and about 54 percent from fixed service charges. Both flat and metered rates are generally performing as intended and each element of the water rate structures continues to reflect a proportionate allocation of costs to each customer based on estimated (unmetered) or actual (metered) usage as well as capacity and service requirements. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 32 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit 111-1 City of Lodi Current Water Rates (1) Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 2 bedroom $ 39.44 3 bedroom $ 47.27 4 bedroom $ 56.79 5 bedroom $ 68.11 Multi -Family Units 1 bedroom $ 28.19 2 bedroom $ 33.81 3 bedroom $ 40.58 4 bedroom $ 48.68 Non -Residential Per ESFU $ 39.44 Monthly Service Charges (Metered) Up to 3/4" meter $ 21.87 1" meter $ 34.34 1 1/2" meter $ 65.25 2" meter $ 102.52 3" meter $ 189.50 4" meter $ 313.73 6" meter $ 624.03 8" meter $ 996.55 10" meter $ 1,431.26 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) $ 0.97 Tier 2 (11-50 CCF) $ 1.29 Tier 3 (> 50 CCF) $ 1.60 Multi -Family $ 1.15 Non -Residential $ 1.15 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23. CONTINUING TRANSITION TO METERED WATER RATES The City continues to install water meters on all unmetered water service connections. In FY 17-18, the City completed Phase 7 of the meter retrofit program. Phase 8 will commence in FY 19-20, followed by Stage 9 to install meters on apartment complexes and a small number of remaining non-residential accounts. The City provides customers with water usage information and flat vs. metered water bill information prior to converting them to the metered water rates. Because of this lag between meter installation and metered billing, the final conversion to metered billing may not occur until January 2025. As described in the next section, customers are also converted THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 33 CITY OF LODI WATER AND WASTEWATER RATE STUDY to metered wastewater usage rates. That wastewater billing conversion generally happens 18 months after the water billing conversion. In general, most customers benefit from the transition to metered water and wastewater rates. This is because for most customers actual usage is somewhat less than the average usage on which flat rates have been based. The transition to metered billing for multi -family apartment complexes will have a more significant impact on water rate revenue. Under the current flat rates, each dwelling unit is billed separately for water service. However, for a variety of reasons it is generally impractical and infeasible to install separate water meters on each apartment unit. Therefore, apartment complexes will generally have a single (or in some cases a few) master meters that serve the entire complex. Under the metered rate structure, in which service charges are based on meter sizes for each connection and usage charges based on actual usage and the uniform usage rate, water rate revenue from apartment complexes will likely be less than the aggregate flat rate revenue from billing individual units. While the financial plan analyses contained in this study incorporate estimates for this impact as the transition occurs, the actual impact will depend on the specific number and sizes of master meters installed as part of the meter retrofit program for multi -family customers. PROPOSED MULTI-YEAR WATER RATE SCHEDULES Exhibit III -2 summarizes proposed maximum flat and metered water rate schedules for rates to be effective in April 2019, as well as for each January from 2020 through 2023. The later years of this multi-year rate plan reflect the annual revenue requirements through FY 23-24, as well as the previously approved water rate rollback scheduled for January 2021, based on the water system financial plan presented in Section II of this report. Continuing with recent practice, the City should adjust water rates annually based on changes in the ENR CCI, subject to a 3.0 percent annual cap. The rate schedules shown in Exhibit III -2 include 3.0 percent adjustments in future years (excluding the January 2021 rate rollback). Therefore, for the five-year Proposition 218 rate period, the schedules reflect the maximum amount of the water rates with each adjustment. If actual inflation is less than 3.0 percent, then the implemented schedules would be correspondingly lower. As previously described, no rate structure changes are proposed at this time. However, it is recommended that the next rate study include a comprehensive cost of service update as all water meters will likely be installed by that time and the City will have more complete knowledge and understanding of water usage for all customers and customer classes, as well as more accurate information on the number and sizes of multi -family master meters. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 34 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit III -2 City of Lodi Current and Proposed Maximum Water Rate Schedules Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 $ 33.79 $ 34.80 $ 31.88 $ 32.84 $ 33.83 2 bedroom $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 3 bedroom $ 47.27 $ 48.64 $ 50.10 $ 45.89 $ 47.27 $ 48.69 4 bedroom $ 56.79 $ 58.44 $ 60.19 $ 55.14 $ 56.79 $ 58.49 5 bedroom $ 68.11 $ 70.09 $ 72.19 $ 66.13 $ 68.11 $ 70.15 Multi -Family Units 1 bedroom $ 28.19 $ 29.01 $ 29.88 $ 27.37 $ 28.19 $ 29.04 2 bedroom $ 33.81 $ 34.79 $ 35.83 $ 32.82 $ 33.80 $ 34.81 3 bedroom $ 40.58 $ 41.76 $ 43.01 $ 39.40 $ 40.58 $ 41.80 4 bedroom $ 48.68 $ 50.09 $ 51.59 $ 47.26 $ 48.68 $ 50.14 Non -Residential Per ESFU $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 Monthly Service Charges (Metered) Up to 3/4" meter $ 21.87 $ 22.50 $ 23.18 $ 21.23 $ 21.87 $ 22.53 1" meter $ 34.34 $ 35.34 $ 36.40 $ 33.34 $ 34.34 $ 35.37 1 1/2" meter $ 65.25 $ 67.14 $ 69.15 $ 63.34 $ 65.24 $ 67.20 2" meter $ 102.52 $ 105.49 $ 108.65 $ 99.53 $ 102.52 $ 105.60 3" meter $ 189.50 $ 195.00 $ 200.85 $ 183.98 $ 189.50 $ 195.19 4" meter $ 313.73 $ 322.83 $ 332.51 $ 304.59 $ 313.73 $ 323.14 6" meter $ 624.03 $ 642.13 $ 661.39 $ 605.85 $ 624.03 $ 642.75 8" meter $ 996.55 $ 1,025.45 $ 1,056.21 $ 967.52 $ 996.55 $ 1,026.45 10" meter $ 1,431.26 $ 1,472.77 $ 1,516.95 $ 1,389.57 $ 1,431.26 $ 1,474.20 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) $ 0.97 $ 1.00 $ 1.03 $ 0.94 $ 0.97 $ 1.00 Tier 2 (11-50 CCF) $ 1.29 $ 1.33 $ 1.37 $ 1.25 $ 1.29 $ 1.33 Tier 3 (> 50 CCF) $ 1.60 $ 1.65 $ 1.70 $ 1.56 $ 1.61 $ 1.66 Multi -Family $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Non -Residential $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23, which includes a rate rollback in January 2021 to the water rates that were in effect in 2016. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 35 CITY OF LODI WATER AND WASTEWATER RATE STUDY WATER SHORTAGE RATE SURCHARGES To help encourage water conservation and to help bridge the financial deficit created by a water shortage, it is recommended that the City adopt temporary water shortage surcharges that would be implemented under specified water shortage conditions. The temporary water shortage rate surcharges would be incremental increases in the water usage rates. Even though the water shortage surcharges represent an increase in the water rates, total water rate revenue could still decline with reduced water sales as water shortage conditions worsen. That is, the supplemental revenue generated through the water shortage rate surcharges would only partially bridge the deficit gap created by drought and reduced water sales. As described in Section II of this report, a multi -pronged approach to addressing financial strain caused by water supply shortages and reduced water is suggested. While the utility can use a portion of Operating Reserves in a potential shortage condition, with voluntary use restrictions, temporary water shortage rate surcharges are recommended for conditions that warrant mandatory water use restrictions (i.e., minor, moderate, severe, and critical conditions, as defined). Under these conditions, the estimated financial deficit created by water shortage conditions is largely recovered through a temporary water shortage surcharge from customers in proportion to each customer's water usage. In short, the calculation ensures that each customer bears a proportionate share of the costs associated with water shortage conditions. The temporary water shortage rate surcharges have been specifically designed such that customers that meet water use reduction goals will have lower water bills with the water shortage rate surcharges than they would with normal water usage and normal water rates. Customers that do not meet water use reduction goals may pay more for water service because of the water shortage rate surcharges. Exhibit III -3 presents the proposed April 2019 water usage rate schedule supplemented with the temporary water shortage rate surcharges. As an example, Tier 1 of residential water usage rates would increase from $1.00 per CCF to $1.05 per CCF under Minor Shortage conditions (i.e., a 5 percent surcharge when water use reductions of 10 to 20 percent are necessary). Because the water shortage rate surcharge would only apply to the water usage rates (and not the fixed monthly service charges or flat rates) the impact on the total water bill is substantially mitigated. In addition, the temporary water shortage surcharges would only be required during periods of mandatory use restrictions, but not in normal or potential shortage conditions with a use reduction of up to 10 percent. The temporary water shortage rate surcharge is not intended to be a penalty for excessive use; rather it represents each customer's fair share of the cost of partially bridging the financial deficit created by reduced water sales during periods of water shortage. Customers would participate in bearing this cost in proportion to their water use. During this time, the portion of the Operating Reserve would also be used to help close the financial deficit gap cause by reduced water sales. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 36 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit III -3 City of Lodi Proposed Temporary Water Shortage Rate Surcharges Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage Conditions (Voluntary) (Mandatory) (Mandatory) (Mandatory) (Mandatory) Use Reduction Goal --> None 5% to 10% 10% to 20% 20% to 30% 30% to 50% > 50% Temp. Water Shortage Surcharge (2) None None 5% 10% 15% 20% Monthly Service Charges Up to 3/4" meter $ 22.50 1" meter $ 35.34 1 1/2" meter $ 67.14 2" meter $ 105.49 3" meter $ 195.00 No Changes to Service Charges 4" meter $ 322.83 6" meter $ 642.13 8" meter $ 1,025.45 10" meter $ 1,472.77 Water Usage Rates ($/CCF) (3) Single Family Residential Tier 1 (0-10 CCF) $ 1.00 $ 1.00 $ 1.05 $ 1.10 $ 1.15 $ 1.20 Tier 2 (11-50 CCF) $ 1.33 $ 1.33 $ 1.40 $ 1.46 $ 1.53 $ 1.60 Tier 3 (> 50 CCF) $ 1.65 $ 1.65 $ 1.73 $ 1.82 $ 1.90 $ 1.98 Multi -Family $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Non -Residential $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Notes: (1) The temporary water shoratge rate surcharge percentages are shown applied to the proposed water usage rates for April 2019 for illustrative purposes. The percentages would be applied to any then -current water usage rates when implemented by declaration of a water shortage by the City Council. (2) The termporary water shortage rate surcharge woud be an incremental (percentage) increase in the water usage rates, but wou not be applied to monthly service charges or to any flat water rates for unmetered customers. (3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate surcharges. Water shortage rate surcharges would provide moderate supplemental revenue for addressing water supply shortages and the resulting reduced water demand. As illustrated graphically in Exhibit III4, the water shortage rate surcharge revenue only partially replaces lost revenue due to reduced water sales. As a result, even with the water shortage rate surcharges, the proposed water rates for water shortage conditions are less than the total cost of providing water service. The information in Exhibit II1-4 reflects revenue estimates based on the application of water shortage rate surcharges in 2025, which is the point in time when all customers are expected to be on metered water rates. If adopted, the temporary water shortage rate surcharges would be implemented when water shortage conditions necessitate water use reductions exceeding 10 percent, and would depend on the specific stage of shortage, as declared by the City Council. The temporary surcharges would continue only as long as the shortage conditions exist. When the shortage is declared over, then the water shortage rate surcharges would be discontinued. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 37 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit III -4 City of Lodi Water Rate Revenue During Periods of Water Shortage $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- ■ Service Charge Revenue Usage Charge Revenue Temp. Surcharge Revenue Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage (Stage 1) (Stage 2) (Stage 3) (Stage 4) (Stage 5) Bill Impacts of Water Shortage Rate Surcharges Water shortage rate surcharges have been specifically designed such that customers achieving required water use reduction goals will have lower water bills than they would with normal water rates and normal water usage. Customers that do not meet water use reduction goals may have higher water bills. Because the temporary water shortage rate surcharges apply to all water usage, all metered rate customers will participate in bridging the financial gap created by water shortage. Of course, those customers that use the least amount of water or conserve the most will pay less through the water shortage rate surcharges. Exhibit III -5 illustrates how a typical single family customer would be affected by the water shortage rate surcharges across various shortage conditions. Monthly water bills are shown for customers that, under normal conditions, use 15 CCF monthly. Water bills are calculated for customers meeting requested water use reduction goals, and customers that do not conserve at all. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 38 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit III -5 City of Lodi Bill Impacts of Temporary Water Shortage Rate Surcharges Water Use Monthly Monthly Water Water Total % Change Reduction Water Use Service Usage Shortage Water from Water Shortage Stage Goal (CCF) Charge Charge Surcharge Bill Normal Bill Average Single Family Customer Meeting Reduction Goals Normal Supply None 15 $ 22.50 $ 16.65 $ $ 39.15 Potential Shortage 5% to 10% 14 $ 22.50 $ 15.32 $ - $ 37.82 -3.4% Minor Shortage 10% to 20% 13 $ 22.50 $ 13.99 $ 0.70 $ 37.19 -5.0% Moderate Shortage 20% to 30% 12 $ 22.50 $ 12.66 $ 1.27 $ 36.43 -7.0% Severe Shortage 30% to 50% 10 $ 22.50 $ 10.00 $ 1.50 $ 34.00 -13.2% Critical Shortage > 50% 7 $ 22.50 $ 7.00 $ 1.40 $ 30.90 -21.1% Average Single Family Customer NOT Meeting Reduction Goals Normal Supply None 15 $ 22.50 $ 16.65 $ $ 39.15 Potential Shortage 5% to 10% 15 $ 22.50 $ 16.65 $ - $ 39.15 0.0% Minor Shortage 10% to 20% 15 $ 22.50 $ 16.65 $ 0.83 $ 39.98 2.1% Moderate Shortage 20% to 30% 15 $ 22.50 $ 16.65 $ 1.67 $ 40.82 4.3% Severe Shortage 30% to 50% 15 $ 22.50 $ 16.65 $ 2.50 $ 41.65 6.4% Critical Shortage > 50% 15 $ 22.50 $ 16.65 $ 3.33 $ 42.48 8.5% THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 39 CITY OF LODI WATER AND WASTEWATER RATE STUDY SECTION IV. WASTEWATER RATES This section of the report presents wastewater rate recommendations and schedules for the next five years. The wastewater system financial plan, presented in Section II of this report, was used to determine the annual wastewater rate revenue requirements and to develop the strategy for meeting current and future financial obligations. As described in this section, no changes to the wastewater rate structures are proposed at this time. CURRENT WASTEWATER RATES The current wastewater rate schedule is summarized in Exhibit IV -1. The City last adjusted its wastewater rates in July 2016. The last comprehensive wastewater rate study occurred in 2013. The City is continuing to transition customers from flat (unmetered) wastewater rates to usage -based (metered) wastewater rates as the meter retrofit program continues. The City's goal is to have all customers on metered wastewater rates by July 2026. Flat wastewater rates include a fixed monthly charge for single family homes and multi- family dwelling units based on the number of bedrooms. Most non-residential accounts also pay flat wastewater rates 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. The metered wastewater rates include a fixed monthly service charged based on the size of the water meter and a usage rate based on winter water usage. Winter water usage is used for sewer flow estimation since irrigation usage is minimized during this time period and winter usage reasonably reflects the amount of ongoing water usage that ends up in the sewer system. The City uses the average monthly water usage from December through February for determining the average winter water usage, and hence the estimated monthly sewer flow. In July of each year, a monthly charge is calculated for each customer that includes both the fixed service charge and a usage charge based on the averaged winter water usage and the uniform wastewater usage rate. That charge is then billed monthly for the ensuring 12 -month period. 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 discharging into the City's domestic sewer collection system are included in Exhibit IV -1. Separate (lower) rates apply to the few industrial users that discharge into the industrial line, which requires less treatment. At present, tenants of unmetered multi -family apartments are individually billed for water and wastewater services. As water meters are installed the billing for these services will be transferred from tenants to property owners. As described in the previous section, it is impractical and infeasible to install water meters on each dwelling unit and one or a few master meters will be needed for each apartment complex. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 40 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit IV -1 City of Lodi Current Wastewater Rates (1) Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 1 bedroom $ 27.90 2 bedroom $ 37.20 3 bedroom $ 46.49 4 bedroom $ 55.79 5 bedroom $ 65.09 Mobile Homes Any Size $ 27.90 Schools Per SSU (18 students = 1 SSU) $ 36.18 Non -Residential Per SFU $ 37.20 Monthly Service Charges (Metered) Up to 3/4" meter $ 25.40 1" meter $ 40.92 1 1/2" meter $ 79.06 2" meter $ 124.33 3" meter $ 232.29 4" meter $ 385.52 6" meter $ 768.28 8" meter $ 1,227.76 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 High Strength Users Flow (per MG annually) $ 3,730.00 BOD (per 1,000 lbs annually) $ 616.00 SS (per 1,000 lbs annually) $ 385.00 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. CONTINUING TRANSITION TO METERED WASTEWATER RATES The City continues to install water meters on all unmetered water service connections. In FY 17-18, the City completed Phase 7 of the meter retrofit program. Phase 8 will commence in FY 19-20, followed by Stage 9 to install meters on apartment complexes and a small number of remaining non-residential accounts. The conversion to metered wastewater billing lags the conversion for water billing by 18 months. This gives customers plenty of time to become familiar with their own water usage and modify practices, if needed, to limit bill amounts. Because of this lag between meter THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 41 CITY OF LODI WATER AND WASTEWATER RATE STUDY installation and metered billing, the final conversion to metered wastewater billing may not occur until July 2026. In general, most customers benefit from the transition to metered water and wastewater rates. This is because for most customers actual usage is somewhat less than the average usage on which flat rates have been based. As with water billing, the transition to wastewater metered billing for multi -family apartment complexes will have a more significant impact on wastewater rate revenue. Under the current flat rates, each dwelling unit is billed separately for wastewater service. However, for a variety of reasons it is generally impractical and infeasible to install separate water meters on each apartment unit. Therefore, apartment complexes will generally have a single (or in some cases a few) master meters that serve the entire complex. Under the metered rate structure, in which service charges are based on meter sizes for each connection and usage charges based on actual usage and the uniform usage rate, wastewater rate revenue from apartment complexes will likely be less than the aggregate flat rate revenue from billing individual units. While the financial plan analyses contained in this study incorporate estimates for this impact as the transition occurs, the actual impact will depend on the specific number and sizes of master meters installed as part of the meter retrofit program for multi -family customers. PROPOSED MULTI-YEAR WATER RATE SCHEDULES Exhibit IV -2 summarizes proposed maximum flat and metered wastewater rate schedules for rates to be effective in July 2019, as well as for each July from 2020 through 2023. The later years of this multi-year rate plan reflect the annual revenue requirements through FY 23-24 based on the wastewater system financial plan presented in Section II of this report. Continuing with recent practice, the City should adjust wastewater rates annually based on changes in the ENR CCI, subject to a 3.0 percent annual cap. The rate schedules shown in Exhibit IV -2 include 3.0 percent adjustments in future years. Therefore, for the five-year Proposition 218 rate period, the schedules reflect the maximum amount of the wastewater rates with each adjustment. If actual inflation is less than 3.0 percent, then the implemented schedules would be correspondingly lower. As previously described, no rate structure changes are proposed at this time. However, it is recommended that the next rate study include a comprehensive cost of service update as all water meters will likely be installed by that time and the City will have more complete knowledge and understanding of water usage for all customers and customer classes, as well as more accurate information on the number and sizes of multi -family master meters. This would also be an appropriate time to examine the wastewater rates applicable to all non- residential accounts. Beyond the special rates for high strength industrial customers (e.g., food processors), many utilities have non-residential wastewater rates based on strength characteristics (e.g., low, medium, and high categories) for the variety of business categories that exist within their jurisdiction. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 42 CITY OF LODI WATER AND WASTEWATER RATE STUDY Exhibit IV -2 City of Lodi Current and Proposed Maximum Wastewater Rate Schedules Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% 3.0% 3.0% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 1 bedroom $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 2 bedroom $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 3 bedroom $ 46.49 $ 47.84 $ 49.28 $ 50.76 $ 52.28 $ 53.85 4 bedroom $ 55.79 $ 57.41 $ 59.13 $ 60.90 $ 62.73 $ 64.61 5 bedroom $ 65.09 $ 66.98 $ 68.99 $ 71.06 $ 73.19 $ 75.39 Mobile Homes Any Size $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Schools Per SSU (18 students = 1 SSU) $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Non -Residential Per SFU $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 Monthly Service Charges (Metered) Up to 3/4" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter $ 25.40 $ 40.92 $ 79.06 $ 124.33 $ 232.29 $ 385.52 $ 768.28 $ 1,227.76 26.14 $ 26.92 $ 27.73 $ 28.56 $ 29.42 42.11 $ 43.37 $ 44.67 $ 46.01 $ 47.39 81.35 $ 83.79 $ 86.30 $ 88.89 $ 91.56 127.94 $ 131.78 $ 135.73 $ 139.80 $ 143.99 239.03 $ 246.20 $ 253.59 $ 261.20 $ 269.04 396.70 $ 408.60 $ 420.86 $ 433.49 $ 446.49 790.56 $ 814.28 $ 838.71 $ 863.87 $ 889.79 1,263.37 $ 1,301.27 $ 1,340.31 $ 1,380.52 $ 1,421.94 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 $ 2.97 $ 3.06 $ 3.15 $ 3.24 $ 3.34 High Strength Users Flow (per MG annually) $ 3,730.00 $ 3,838.17 $ 3,953.32 $ 4,071.92 $ 4,194.08 $ 4,319.90 BOD (per 1,000 lbs annually) $ 616.00 $ 633.86 $ 652.88 $ 672.47 $ 692.64 $ 713.42 SS (per 1,000 lbs annually) $ 385.00 $ 396.17 $ 408.06 $ 420.30 $ 432.91 $ 445.90 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap. THE REED GROUP, INC. DRAFT 1/3/2019 PAGE 43 Exhibit 11-8 City of Lodi Water System Financial Plan FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Rate Adjustments --> 2.9% April 3.0% -8.4% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% January January January January January January January January January January January WATER OPERATING FUND (FUND 560) Beginning Balance $ 3,597,764 $ 3,226,236 $5,299,000 $2,300,200 $3,218,900 $3,661,100 $4,368,900 $6,178,100 $4,865,700 $4,999,700 $5,990,200 $6,359,000 $6,747,800 Operating Revenues Flat Rate Revenue $ 3,574,000 $ 3,600,000 $ 3,498,000 $ 2,955,000 $ 2,630,000 $ 2,304,000 $ 1,464,000 $ 495,000 $ - $ - $ - $ - $ - Service Charge Revenue $ 5,009,000 $ 5,079,000 $ 5,446,000 $ 5,570,000 $ 5,575,000 $ 6,000,000 $ 6,511,000 $ 6,900,000 $ 7,195,000 $ 7,392,000 $ 7,595,000 $ 7,803,000 $ 7,987,000 Usage Charge Revenue $ 4,422,023 $ 4,345,000 $ 4,773,000 $ 4,905,000 $ 4,845,000 $ 5,150,000 $ 5,722,000 $ 6,414,000 $ 6,903,000 $ 7,070,000 $ 7,249,000 $ 7,445,000 $ 7,626,000 BABs Subsidy $ 609,966 $ 662,040 $ 662,000 $ 662,000 $ 662,000 $ 643,200 $ 622,800 $ 601,000 $ 577,700 $ 550,100 $ 521,300 $ 491,400 $ 460,200 Miscellaneous Revenue $ 384,741 $ 384,700 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 Interest Earnings $ 47,005 $ 158,000 $ 159,000 $ 69,000 $ 96,600 $ 109,800 $ 131,100 $ 185,300 $ 146,000 $ 150,000 $ 179,700 $ 190,800 $ 202,400 Total Operating Revenues $ 14,046,734 $ 14,228,740 $ 14,915,300 $ 14,538,300 $ 14,185,900 $ 14,584,300 $ 14,828,200 $ 14,972,600 $ 15,199,000 $ 15,539,400 $ 15,922,300 $ 16,307,500 $ 16,652,900 Operating Expenses and Transfers Water Administration $ 1,412,525 $ 1,667,230 $ 1,717,300 $ 1,768,500 $ 1,821,300 $ 1,875,500 $ 1,931,500 $ 1,988,900 $ 2,048,400 $ 2,109,400 $ 2,172,400 $ 2,237,200 $ 2,303,700 WID Water Purchases $ 1,429,421 $ 1,448,451 $ 1,487,900 $ 1,528,400 $ 1,570,000 $ 1,612,800 $ 1,656,800 $ 1,703,500 $ 1,751,500 $ 1,802,200 $ 1,854,400 $ 1,908,000 $ 1,963,200 Operating Transfer Out $ 820,560 $ 821,900 $ 846,600 $ 872,000 $ 898,200 $ 925,100 $ 952,900 $ 981,500 $ 1,010,900 $ 1,041,200 $ 1,072,400 $ 1,104,600 $ 1,137,700 Damage to Property $ - $ 4,080 $ 4,200 $ 4,300 $ 4,400 $ 4,500 $ 4,600 $ 4,700 $ 4,800 $ 4,900 $ 5,000 $ 5,100 $ 5,200 Water Production $ 553,542 $ 694,100 $ 715,100 $ 736,600 $ 758,600 $ 781,300 $ 804,700 $ 828,700 $ 853,400 $ 879,200 $ 905,500 $ 932,600 $ 960,400 Electricity $ 312,188 $ 292,920 $ 303,800 $ 315,100 $ 326,900 $ 339,100 $ 351,800 $ 365,300 $ 379,300 $ 394,100 $ 409,500 $ 425,500 $ 442,100 Water Distribution $ 950,750 $ 1,050,000 $ 1,081,400 $ 1,113,800 $ 1,147,100 $ 1,181,400 $ 1,216,700 $ 1,253,000 $ 1,290,200 $ 1,328,900 $ 1,368,700 $ 1,409,600 $ 1,451,600 Surface Water Treatment Facility $ 1,253,687 $ 1,617,590 $ 1,666,100 $ 1,715,700 $ 1,766,600 $ 1,819,100 $ 1,873,000 $ 1,928,500 $ 1,985,700 $ 2,044,700 $ 2,105,500 $ 2,168,200 $ 2,232,600 Electricity $ 165,393 $ 150,000 $ 155,600 $ 161,400 $ 167,400 $ 173,600 $ 180,100 $ 187,000 $ 194,200 $ 201,800 $ 209,700 $ 217,900 $ 226,400 Water Conservation $ 83,884 $ 147,440 $ 151,700 $ 156,100 $ 160,700 $ 165,300 $ 170,100 $ 175,100 $ 180,100 $ 185,300 $ 190,700 $ 196,200 $ 202,000 DBCP $ 77,416 $ 67,540 $ 69,600 $ 71,700 $ 73,900 $ 76,100 $ 78,300 $ 80,500 $ 83,000 $ 85,600 $ 88,200 $ 90,900 $ 93,600 Debt Service $ 2,967,656 $ 2,969,156 $ 2,969,756 $ 2,967,956 $ 2,966,556 $ 2,952,656 $ 2,929,520 $ 2,907,259 $ 2,885,452 $ 2,856,572 $ 2,829,500 $ 2,798,914 $ 2,764,815 Transfer to Capital Fund (Fund 561) $ 3,868,331 $1,225,590 $ 6,745,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000 Total Oper. Expenses and Transfers $ 13,895,353 $ 12,155,997 $ 17,914,056 $ 13,619,556 $ 13,743,656 $ 13,876,456 $ 13,019,020 $ 16,284,959 $ 15,064,952 $ 14,548,872 $ 15,553,500 $ 15,918,714 $ 16,572,315 Ending Balance Operating Reserve (50%) Available Funds Debt Service Coverage (min. 1.25) $ 3,749,145 $ 5,298,979 $ 2,300,244 $ 3,218,944 $ 3,661,144 $ 4,368,944 $ 6,178,081 $ 4,865,742 $ 4,999,748 $ 5,990,228 $ 6,359,001 $ 6,747,786 $ 6,828,385 $ 5,014,000 $ 5,465,000 $ 5,585,000 $ 5,706,000 $ 5,831,000 $ 5,953,000 $ 6,075,000 $ 6,202,000 $ 6,333,000 $ 6,467,000 $ 6,606,000 $ 6,747,000 $ 6,892,000 $ (1,264,855) $ (166,021) $ (3,284,756) $ (2,487,056) $ (2,169,856) $ (1,584,056) $ 103,081 $ (1,336,259) $ (1,333,252) $ (476,772) $ (247,000) $ 786 $ (63,615) $ 2.48 $ 2.27 $ 2.46 $ 2.25 $ 2.06 $ 2.13 $ 2.13 $ 2.11 $ 2.12 $ 2.18 $ 2.24 $ 2.31 $ 2.37 The Reed Group, Inc. DRAFT- 1/8/2019 WATER CAPITAL FUND (FUND 561) Beginning Balance Revenues and Transfers In Interest Earnings Transfer from Operating Fund Transfer from Water IMF Fund Total Revenues and Transfers In Capital Program Expenditures Capital Projects Total Capital Prog. Expend. Ending Balance WATER IMF FUND (FUND 562) Beginning Balance Revenues and Transfers In Interest Earnings Water IMF Revenue Total Revenues and Transfers In Water IMF Expend. & Transfers Water IMF Projects Transfer to Cap. Fund for Projects Total Water IMF Expend. Ending Balance Owed Fund 560 for Debt Service Oper. & Maint. Costs Debt Service Costs Capital Prog. Transfer Proposed Revenues Ending Balance Target Oper. Reserve Min. Oper. Reserve Current Revenues The Reed Group, Inc. $ 95,079 $ 144,410 $ $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,868,331 $ 1,225,590 $ 6,745,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000 $ - $ - $ 950,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,868,331 $ 1,225,590 $ 7,695,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000 $ 3,819,000 $ 1,370,000 $ 7,695,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000 $ 3,819,000 $ 1,370,000 $ 7,695,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000 $ 144,410 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ $ 702,815 $ 1,079,382 $ 1,555,700 $ 1,181,200 $ 1,766,700 $ 2,392,100 $ 20,400 $ 640,500 $ 1,304,200 $ 2,013,800 $ 2,771,700 $ 3,580,600 $ 4,442,900 $ - $ - $ 46,700 $ 35,400 $ 53,000 $ 71,800 $ 600 $ 19,200 $ 39,100 $ 60,400 $ 83,200 $ 107,400 $ 133,300 $ 362,481 $ 476,310 $ 528,800 $ 550,100 $ 572,400 $ 595,500 $ 619,500 $ 644,500 $ 670,500 $ 697,500 $ 725,700 $ 754,900 $ 785,400 $ 362,481 $ 476,310 $ 575,500 $ 585,500 $ 625,400 $ 667,300 $ 620,100 $ 663,700 $ 709,600 $ 757,900 $ 808,900 $ 862,300 $ 918,700 - $ - $ - $ 950,000 $ - $ - $ $ 3,039,000 $ $ - $ - $ - $ 950,000 $ - $ $ 3,039,000 $ - $ - $ - $ - $ - $ - $ $ 1,065,296 $ 1,555,692 $ 1,181,200 $ 1,766,700 $ 2,392,100 $ 20,400 $ 640,500 $ 1,304,200 $ 2,013,800 $ 2,771,700 $ 3,580,600 $ 4,442,900 $ 5,361,600 $ 8,267,794 $ 9,805,871 $ 10,394,375 $ 11,931,679 $ 13,468,050 $ 15,007,687 $ 16,545,500 $ 18,083,006 $ 19,621,507 $ 21,159,155 $ 22,697,955 $ 24,236,297 $ 25,772,707 FY 17-18 $ 7,059,366 $ 2,967,656 $ 3,868,331 $ 14,046,734 $ 3,749,145 $ 5,014,000 $ 2,507,000 $ 14,047,712 FY 18-19 $ 7,961,251 $ 2,969,156 $ 1,225,590 $ 14,228,740 $ 5,298,979 $ 5,465,000 $ 2,732,500 $ 14,132,740 FY 19-20 $ 8,199,300 $ 2,969,756 $ 6,745,000 $ 14,915,300 $ 2,300,244 $ 5,585,000 $ 2,792,500 $ 14,342,300 FY 20-21 $ 8,443,600 $ 2,967,956 $ 2,208,000 $ 14,538,300 $ 3,218,944 $ 5,706,000 $ 2,853,000 $ 14,111,300 FY 21-22 $ 8,695,100 $ 2,966,556 $ 2,082,000 $ 14,185,900 $ 3,661,144 $ 5,831,000 $ 2,915,500 $ 14,006,900 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 $ 8,953,800 $ 9,220,500 $ 9,496,700 $ 9,781,500 $ 10,077,300 $ 10,382,000 $ 10,695,800 $ 11,018,500 $ 2,952,656 $ 2,929,520 $ 2,907,259 $ 2,885,452 $ 2,856,572 $ 2,829,500 $ 2,798,914 $ 2,764,815 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000 $ 14,584,300 $ 14,828,200 $ 14,972,600 $ 15,199,000 $ 15,539,400 $ 15,922,300 $ 16,307,500 $ 16,652,900 $ 4,368,944 $ 6,178,081 $ 4,865,742 $ 4,999,748 $ 5,990,228 $ 6,359,001 $ 6,747,786 $ 6,828,385 $ 5,953,000 $ 6,075,000 $ 6,202,000 $ 6,333,000 $ 6,467,000 $ 6,606,000 $ 6,747,000 $ 6,892,000 $ 2,976,500 $ 14,014,300 $ 13,930,200 $ 13,821,600 $ 13,781,000 $ 13,838,400 $ 13,919,300 $ 13,982,500 $ 14,007,900 DRAFT - 1/8/2019 Exhibit 11-10 City of Lodi Wastewater System Financial Plan FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Rate Adjustments --> 2.9% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% July July July July July July July July July July July WASTEWATER OPERATING FUND (FUND 530) Beginning Balance $ 12,967,860 $ 15,365,382 $11,780,300 $11,403,800 $13,990,100 $13,322,200 $9,695,600 $4,200,200 $6,743,500 $7,990,200 $3,278,100 $5,865,300 $7,507,900 Operating Revenues Flat Rate Revenue $ 4,071,900 $ 3,297,900 $ 3,393,600 $ 3,015,600 $ 2,619,600 $ 2,698,200 $ 2,335,400 $ 2,405,400 $ 1,239,000 $ - $ - $ - $ - Service Charge Revenue $ 5,576,600 $ 6,113,300 $ 6,343,600 $ 6,889,000 $ 7,458,500 $ 7,740,700 $ 8,313,500 $ 8,626,300 $ 9,245,700 $ 9,896,600 $ 10,264,900 $ 10,647,100 $ 11,044,000 Usage Charge Revenue $ 5,215,043 $ 5,796,900 $ 6,032,500 $ 6,637,100 $ 7,267,400 $ 7,554,900 $ 8,186,000 $ 8,507,000 $ 8,958,200 $ 9,430,200 $ 9,798,400 $ 10,180,700 $ 10,270,000 Miscellaneous Revenue $ 204,007 $ 180,000 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 $ 211,900 Grant Revenue $ 400,282 $ 3,150,000 $ $ $ $ $ $ $ - $ - $ - $ $ Interest Earnings $ 205,140 $ 220,000 $ 353,400 $ 342,100 $ 419,700 $ 399,700 $ 290,900 $ 126,000 $ 202,300 $ 239,700 $ 98,300 $ 176,000 $ 225,200 Trans. From/(To) WW Rate Stab. $ $ $ $ $ $ $ $ $ - $ - $ - $ $ Trans. From WW IMF Fund for DS $ $ - $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 Total Operating Revenues $ 15,672,971 $ 18,758,100 $ 16,735,000 $ 17,495,700 $ 18,377,100 $ 19,005,400 $ 19,737,700 $ 20,276,600 $ 20,257,100 $ 20,178,400 $ 20,773,500 $ 21,615,700 $ 22,151,100 Operating Expenses and Transfers Wastewater Administration $ 1,324,120 $ 1,397,140 $ 1,439,000 $ 1,481,700 $ 1,526,100 $ 1,571,700 $ 1,618,500 $ 1,666,600 $ 1,716,400 $ 1,767,600 $ 1,820,200 $ 1,874,500 $ 1,930,300 Operating Transfer Out $ 1,108,270 $ 1,083,710 $ 1,116,200 $ 1,149,700 $ 1,184,200 $ 1,219,700 $ 1,256,300 $ 1,294,000 $ 1,332,800 $ 1,372,800 $ 1,414,000 $ 1,456,400 $ 1,500,100 Damage to Property $ 2,861 $ 5,800 $ 5,900 $ 6,000 $ 6,100 $ 6,200 $ 6,300 $ 6,400 $ 6,500 $ 6,600 $ 6,700 $ 6,800 $ 7,000 White Slough WPCF $ 3,828,052 $ 4,434,580 $ 4,567,800 $ 4,704,900 $ 4,845,800 $ 4,990,800 $ 5,140,200 $ 5,294,400 $ 5,453,100 $ 5,616,400 $ 5,784,900 $ 5,958,400 $ 6,137,000 Electricity $ 629,470 $ 603,060 $ 621,200 $ 639,800 $ 659,000 $ 678,800 $ 699,200 $ 720,200 $ 741,800 $ 764,100 $ 787,000 $ 810,600 $ 834,900 Sanitary System Maintenance $ 889,128 $ 791,730 $ 815,700 $ 840,100 $ 865,200 $ 891,100 $ 917,700 $ 945,200 $ 973,500 $ 1,002,600 $ 1,032,500 $ 1,063,400 $ 1,095,000 Storm Drainage Maintenance $ 565,918 $ 725,890 $ 748,000 $ 770,500 $ 793,600 $ 817,400 $ 841,900 $ 867,200 $ 893,100 $ 919,900 $ 947,400 $ 975,700 $ 1,004,600 Industrial System Maintenance $ 5,590 $ 12,200 $ 12,500 $ 12,800 $ 13,100 $ 13,400 $ 13,700 $ 14,000 $ 14,300 $ 14,600 $ 14,900 $ 15,200 $ 15,500 Water/Wastewater Personnel $ 139,712 $ $ $ $ $ $ $ $ $ $ $ $ Watershed Education $ 42,290 $ 74,310 $ 76,500 $ 78,700 $ 81,000 $ 83,400 $ 85,800 $ 88,300 $ 90,800 $ 93,300 $ 95,900 $ 98,500 $ 101,300 Debt Service $ 2,896,776 $ 3,006,576 $ 3,006,700 $ 3,003,200 $ 3,005,900 $ 3,006,500 $ 3,002,500 $ 3,374,000 $ 2,868,100 $ 2,869,600 $ 1,650,800 $ 1,652,600 $ 1,656,600 Transfer to Capital Fund (Fund 531) $ 1,345,754 $10,208,149 $ 4,702,000 $ 2,222,000 $ 6,065,000 $ 9,353,000 $ 11,651,000 $ 3,463,000 $ 4,920,000 $ 10,463,000 $ 4,632,000 $ 6,061,000 $ 6,298,000 Total Oper. Expenses and Transfers $ 12,777,941 $ 22,343,145 $ 17,111,500 $ 14,909,400 $ 19,045,000 $ 22,632,000 $ 25,233,100 $ 17,733,300 $ 19,010,400 $ 24,890,500 $ 18,186,300 $ 19,973,100 $ 20,580,300 Ending Balance Operating Reserve (50%) Available Funds Debt Service Coverage (min. 1.25) $ 15,862,890 $ 11,780,337 $ 11,403,800 $ 13,990,100 $ 13,322,200 $ 9,695,600 $ 4,200,200 $ 6,743,500 $ 7,990,200 $ 3,278,100 $ 5,865,300 $ 7,507,900 $ 9,078,700 $ 5,716,000 $ 6,067,000 $ 6,205,000 $ 6,344,000 $ 6,490,000 $ 6,640,000 $ 6,791,000 $ 7,135,000 $ 7,045,000 $ 7,214,000 $ 6,777,000 $ 6,956,000 $ 7,141,000 $ 10,146,890 $ 5,713,337 $ 5,198,800 $ 7,646,100 $ 6,832,200 $ 3,055,600 $ (2,590,800) $ (391,500) $ 945,200 $ (3,935,900) $ (911,700) $ 551,900 $ 1,937,700 2.64 3.51 2.45 2.62 2.82 2.94 3.09 2.80 3.18 3.04 5.45 5.75 5.86 WASTEWATER CAPITAL FUND (FUND 531) Beginning Balance $ 1,067,097 $ 246,851 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Revenues and Transfers In Interest Earnings $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Transfer from Operating Fund $ 1,345,754 $ 10,208,149 $ 4,702,000 $ 2,222,000 $ 6,065,000 $ 9,353,000 $ 11,651,000 $ 3,463,000 $ 4,920,000 $ 10,463,000 $ 4,632,000 $ 6,061,000 $ 6,298,000 Transfer from WW IMF Fund $ - $ 1,000,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Revenues and Transfers In $ 1,345,754 $ 11,208,149 $ 4,702,000 $ 2,222,000 $ 6,065,000 $ 9,353,000 $ 11,651,000 $ 3,463,000 $ 4,920,000 $ 10,463,000 $ 4,632,000 $ 6,061,000 $ 6,298,000 Capital Program Expenditures Wastewater Capital Outlay Wastewater Plant $ 820,000 $ 3,955,000 $ 3,193,000 $ 1,034,000 $ 3,661,000 $ 394,000 $ 3,594,000 $ 1,761,000 $ 3,813,000 $ 2,660,000 $ 2,740,000 $ 4,166,000 $ 4,291,000 $ 1,346,000 $ 7,500,000 $ 1,509,000 $ 1,188,000 $ 2,404,000 $ 8,959,000 $ 8,057,000 $ 1,702,000 $ 1,107,000 $ 7,803,000 $ 1,892,000 $ 1,895,000 $ 2,007,000 Total Capital Prog. Expend. $ 2,166,000 $ 11,455,000 $ 4,702,000 $ 2,222,000 $ 6,065,000 $ 9,353,000 $ 11,651,000 $ 3,463,000 $ 4,920,000 $ 10,463,000 $ 4,632,000 $ 6,061,000 $ 6,298,000 Ending Balance $ 246,851 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ The Reed Group, Inc. DRAFT - 1/8/2019 Exhibit II -10 -- Continued City of Lodi Wastewater System Financial Plan FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 WASTEWATER IMF FUND (FUND 533) Beginning Balance $ 759,967 $ 809,400 $ 712,500 $ 621,700 $ 539,900 $ 467,600 $ 405,700 $ 355,000 $ 316,400 $ 290,700 $ 279,000 $ 282,200 $ 301,400 Revenues and Transfers In Interest Earnings $ - $ - $ 21,400 $ 18,700 $ 16,200 $ 14,000 $ 12,200 $ 10,700 $ 9,500 $ 8,700 $ 8,400 $ 8,500 $ 9,000 Wastewater IMF Revenue $ 503,776 $ 903,130 $ 287,800 $ 299,500 $ 311,500 $ 324,100 $ 337,100 $ 350,700 $ 364,800 $ 379,600 $ 394,800 $ 410,700 $ 427,200 Total Revenues and Transfers In $ 503,776 $ 903,130 $ 309,200 $ 318,200 $ 327,700 $ 338,100 $ 349,300 $ 361,400 $ 374,300 $ 388,300 $ 403,200 $ 419,200 $ 436,200 Wastewater IMF Expend. & Transfers Wastewater IMF Projects $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Transfer to Oper. for Debt Service $ - $ - $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 Transfer to Cap. for Projects $ - $ 1,000,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Wastewater IMF Expend. $ - $ 1,000,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ 400,000 Ending Balance $ 1,263,743 $ 712,530 $ 621,700 $ 539,900 $ 467,600 $ 405,700 $ 355,000 $ 316,400 $ 290,700 $ 279,000 $ 282,200 $ 301,400 $ 337,600 Owed Fund 530 for Debt Service $ 5,546,549 $ 5,899,508 $ 6,852,523 $ 7,803,963 $ 8,756,618 $ 9,709,543 $ 10,660,668 $ 11,778,968 $ 12,669,613 $ 13,560,933 $ 13,903,793 $ 14,247,463 $ 14,592,933 STORMWATER IMF FUND (FUND 535) Beginning Balance Revenues and Transfers In Interest Earnings Stormwater IMF Revenue $ 925,574 $ 930,384 $ 945,700 $ 1,069,000 $ 1,199,800 $ 1,338,600 $ 1,485,700 $ (1,140,400) $ (1,058,900) $ (970,300) $ (874,200) $ (770,100) $ (657,600) - $ 7,759 $ 15,330 28,400 94,900 32,100 98,700 36,000 102,800 40,200 106,900 44,600 111,300 (34,200) $ (31,800) $ (29,100) $ (26,200) $ (23,100) $ (19,700) 115,700 $ 120,400 $ 125,200 $ 130,300 $ 135,600 $ 141,000 Total Revenues and Transfers In $ 7,759 $ 15,330 $ 123,300 $ 130,800 $ 138,800 $ 147,100 $ 155,900 $ 81,500 $ 88,600 $ 96,100 $ 104,100 $ 112,500 $ 121,300 Stormwater IMF Expend. & Transfers Stormwater IMF Projects $ - $ - $ - $ - $ - $ - $ 2,782,000 $ - $ - $ - $ - $ - $ Transfer to Cap. for Projects $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Total Stormwater IMF Expend. - $ - $ - $ - $ - $ - $ 2,782,000 $ - $ - $ - $ - $ - $ Ending Balance $ 933,333 $ 945,714 $ 1,069,000 $ 1,199,800 $ 1,338,600 $ 1,485,700 $ (1,140,400) $ (1,058,900) $ (970,300) $ (874,200) $ (770,100) $ (657,600) $ (536,300) WASTEWATER RATE STABILIZATION FUND (FUND 534) Beginning Balance $ 500,000 $ 500,000 $ 500,000 $ 515,000 $ 530,500 $ 546,400 $ 562,800 $ 579,700 $ 597,100 $ 615,000 $ 633,500 $ 652,500 $ 672,100 Revenues and Transfers In Interest Earnings $ - $ - $ 15,000 $ 15,500 $ 15,900 $ 16,400 $ 16,900 $ 17,400 $ 17,900 $ 18,500 $ 19,000 $ 19,600 $ 20,200 Transfers From/(To) Oper. Fund $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Total Revs. and Transfers In/(Out) - $ - $ 15,000 $ 15,500 $ 15,900 $ 16,400 $ 16,900 $ 17,400 $ 17,900 $ 18,500 $ 19,000 $ 19,600 $ 20,200 Ending Balance $ 500,000 $ 500,000 $ 515,000 $ 530,500 $ 546,400 $ 562,800 $ 579,700 $ 597,100 $ 615,000 $ 633,500 $ 652,500 $ 672,100 $ 692,300 Oper. & Maint. Costs Debt Service Costs Capital Prog. Transfer Proposed Revenues Ending Balance Target Oper. Reserve Min. Oper. Reserve Current Revenues FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 $ 8,535,411 $ 9,128,420 $ 9,402,800 $ 9,684,200 $ 9,974,100 $ 10,272,500 $ 10,579,600 $ 10,896,300 $ 11,222,300 $ 11,557,900 $ 11,903,500 $ 12,259,500 $ 12,625,700 $ 2,896,776 $ 3,006,576 $ 3,006,700 $ 3,003,200 $ 3,005,900 $ 3,006,500 $ 3,002,500 $ 3,374,000 $ 2,868,100 $ 2,869,600 $ 1,650,800 $ 1,652,600 $ 1,656,600 $ 1,345,754 $ 10,208,149 $ 4,702,000 $ 2,222,000 $ 6,065,000 $ 9,353,000 $ 11,651,000 $ 3,463,000 $ 4,920,000 $ 10,463,000 $ 4,632,000 $ 6,061,000 $ 6,298,000 $ 15,672,971 $ 18,758,100 $ 16,735,000 $ 17,495,700 $ 18,377,100 $ 19,005,400 $ 19,737,700 $ 20,276,600 $ 20,257,100 $ 20,178,400 $ 20,773,500 $ 21,615,700 $ 22,151,100 $ 15,862,890 $ 11,780,337 $ 11,403,800 $ 13,990,100 $ 13,322,200 $ 9,695,600 $ 4,200,200 $ 6,743,500 $ 7,990,200 $ 3,278,100 $ 5,865,300 $ 7,507,900 $ 9,078,700 $ 5,716,000 $ 6,067,000 $ 6,205,000 $ 6,344,000 $ 6,490,000 $ 6,640,000 $ 6,791,000 $ 7,135,000 $ 7,045,000 $ 7,214,000 $ 6,777,000 $ 6,956,000 $ 7,141,000 $ 3,320,000 $ 3,395,500 $ 3,567,500 $ 3,522,500 $ 3,607,000 $ 3,388,500 $ 15,468,922 $ 18,578,100 $ 15,672,200 $ 15,943,200 $ 16,301,900 $ 16,395,900 $ 16,546,500 $ 16,498,400 $ 16,019,400 $ 15,503,300 $ 15,482,800 $ 15,682,100 $ 15,854,200 The Reed Group, Inc. DRAFT - 1/8/2019 Proposition 218 Notification and Protest Hearing Process For Proposed Increases to Water and Wastewater Rates Summary The Lodi City Council will consider proposed future water and wastewater rate increases at a public hearing at 7:00 p.m., Wednesday, March 20, 2019, at the Carnegie Forum, 305 West Pine Street, Lodi. A majority protest would stop the proposed future increases. If you wish to protest the proposed increases written protests may be made in person at the hearing or delivered to: City of Lodi Attention: City Clerk 221 West Pine Street Post Office Box 3006 Lodi, California 95241-1910 Explanation of Protest Process Proposition 218 requires that the City provide a notice of the proposed future rate schedule to all property owners forty-five (45) days prior to holding a public hearing. If a majority of the property owners or renters who pay the utility bill file oppositions to the increase, the increase will not take effect. A protest must contain a description of the property owned sufficient to identify the property. The address or assessor's parcel number is shown on this mailing. If the name on the written protest is not shown on the last equalized assessment roll of San Joaquin County as the owner of the property or on the utility account, the signer of the protest must also submit written evidence of ownership or rentership and utility bill responsibility. At the public hearing, Council shall hear all protests and tabulate the ballots. One written protest per parcel, filed by the owner or tenant (paying the utility bill) of the parcel shall be counted in calculating a majority protest to a proposed new fee or charge subject to the requirements of Section 6 of Article XIII D of the California Constitution. If the votes conflict, the City will count the no vote. Explanation of Proposed Future Increases City Staff is requesting that the City Council authorize continuation of the existing practice of inflationary based adjustments to water and wastewater rates in an amount up to the lesser of three percent (3%) or the actual amount of annual inflation for the next five years to pay for anticipated operating and maintenance costs, debt service obligations, and capital program needs as well as the maintenance of prudent financial reserves for both the water and wastewater utilities. The initial increase in water rates would be effective in April 2019, followed by inflationary adjustments each January 1 from 2020 through 2023. Wastewater rate adjustments would occur each July 1 from 2019 through 2023. For rate setting purposes, the City of Lodi determines inflation as the annual percentage increase in the Engineering News Record's 20 -Cities Construction Cost Index ("ENR"). The change in the ENR for 2018 was 2.9 percent. Therefore, City staff proposes that the initial increases for both water and wastewater rates be 2.9 percent. Water rates would initially be adjusted effective April 1, 2019 and wastewater rates would initially be adjusted effective July 1, 2019. Thereafter water rates would be adjusted each January 1 from 2020 through 2023 based on the annual change in the ENR as of September 30, subject to a 3% annual cap. An exception will occur in January 2021. At that time, water rates will be reduced to the rates that existed in 2016, as previously approved by the City Council in Resolution 2017-23. After the initial wastewater rate increase in July 2019, wastewater rates would be adjusted each July 1 from 2020 through 2023 based on the annual change in the ENR as of March 31, subject to a 3% annual cap. The proposed initial adjustment to water and wastewater rates, as well as the maximum potential future rates based on this proposal are presented in the schedules at the end of this notice. They include both flat rates and metered (usage -based) rates for both water and wastewater utilities. No changes to the water or wastewater rate structures are proposed at this time. Explanation of Proposed Temporary Water Shortage Rate Surcharges With metered water rates, water usage restrictions during an extended drought can have a financial impact on the water utility because the reduction in water sales revenue can exceed the reduction in water system costs. The proposed temporary water shortage rate surcharges were calculated by assigning a portion of the estimated financial deficit created by water shortage conditions to customers in proportion to each customer's metered water usage. This approach ensures that each customer bears a proportionate share of the costs associated with water shortage conditions. If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would be implemented when the City Council declares a water shortage emergency necessitating mandatory water use reductions exceeding 10 percent. Temporary water shortage surcharges would be applied to the water usage rates (but not to monthly service charges or flat water rates), and the amount of the surcharge would vary with the magnitude of required water use reductions. Water shortage rate surcharges have been designed such that customers meeting water use reduction goals will have lower water bills than their normal water bills with normal water usage. The proposed temporary water shortage rate surcharges are expressed as a percentage of the normal water usage rates. The amount of the surcharge would depend on the water use reduction goal established by the City Council. The specific rates shown in this notice are an example, based on proposed (April 2019) water rates. As an example, with Minor Shortage conditions a 5 percent water shortage rate surcharge would temporarily increase the Tier 1 residential water usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Other water usage rates would be similarly affected as shown in surcharge schedule. Monthly service charges and the flat rates for unmetered customers would be unaffected. The temporary surcharge would be rescinded when the City Council declares an end to mandatory water use restrictions. The City Council currently has no plans to implement the proposed temporary water shortage rate surcharges, but they would be available to help address financial needs during a future drought. Adopting the surcharges at this time would enable timely implementation during a future water shortage condition. Basis of Proposed Rate Calculation The proposed annual water and wastewater rate adjustments are justified based on estimated future costs associated with ongoing operation and maintenance, existing debt service obligations, and capital program needs as well as the need to maintain prudent financial reserves. The water and wastewater rate revenue requirements were determined based on financial plans developed as part of a water and wastewater rate study. The Water and Wastewater Rate Study, prepared by The Reed Group, Inc. is available at www.lodi.gov or at the Public Works counter in City Hall. The rationale and calculations of the temporary water shortage rate surcharges are also described in the same report. Conclusion If you have any questions about this notice, please call the Public Works Department at (209) 333-6706 between 7:30 a.m. and 5:30 p.m., Monday through Thursday, and between 8:00 a.m. and 5:00 p.m. on Friday. City Hall is closed every other Friday. JENNIFER M. FERRAIOLO, City Clerk City of Lodi City of Lodi Current and Proposed Maximum Water Rate Schedules Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 $ 33.79 $ 34.80 $ 31.88 2 bedroom $ 39.44 $ 40.58 $ 41.80 $ 38.29 3 bedroom $ 47.27 $ 48.64 $ 50.10 $ 45.89 4 bedroom $ 56.79 $ 58.44 $ 60.19 $ 55.14 5 bedroom $ 68.11 $ 70.09 $ 72.19 $ 66.13 Multi -Family Units 1 bedroom $ 28.19 $ 2 bedroom $ 33.81 $ 3 bedroom $ 40.58 $ 4 bedroom $ 48.68 $ Non -Residential Per ESFU $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 29.01 34.79 41.76 50.09 29.88 35.83 43.01 51.59 27.37 32.82 39.40 47.26 Monthly Service Charges (Metered) Up to 3/4" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter 10" meter $ 21.87 $ 34.34 $ 65.25 $ 102.52 $ 189.50 $ 313.73 $ 624.03 $ 996.55 $ 1,431.26 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) Tier 2 (11-50 CCF) Tier 3 (> 50 CCF) Multi -Family Non -Residential 0.97 1.29 1.60 1.15 1.15 $ 22.50 $ 35.34 $ 67.14 $ 105.49 $ 195.00 $ 322.83 $ 642.13 $ 1,025.45 $ 1,472.77 $ 23.18 $ 36.40 $ 69.15 $ 108.65 $ 200.85 $ 332.51 $ 661.39 $ 1,056.21 $ 1,516.95 $ 21.23 $ 33.34 $ 63.34 $ 99.53 $ 183.98 $ 304.59 $ 605.85 $ 967.52 $ 1,389.57 3.0% 3.0% 32.84 39.44 47.27 56.79 68.11 28.19 33.80 40.58 48.68 33.83 40.62 48.69 58.49 70.15 29.04 34.81 41.80 50.14 39.44 $ 40.62 $ 21.87 $ 34.34 $ 65.24 $ 102.52 $ 189.50 $ 313.73 $ 624.03 $ 996.55 $ 1,431.26 $ 22.53 $ 35.37 $ 67.20 $ 105.60 $ 195.19 $ 323.14 $ 642.75 $ 1,026.45 $ 1,474.20 $ 1.00 $ 1.03 $ 0.94 $ 0.97 $ 1.00 $ 1.33 $ 1.37 $ 1.25 $ 1.29 $ 1.33 $ 1.65 $ 1.70 $ 1.56 $ 1.61 $ 1.66 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23, which includes a rate rollback in January 2021 to the water rates that were in effect in 2016. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap. City of Lodi Current and Proposed Maximum Wastewater Rate Schedules Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 1 bedroom $ 2 bedroom $ 3 bedroom $ 4 bedroom $ 5 bedroom $ Mobile Homes Any Size $ Schools Per SSU (18 students = 1 SSU) $ Non -Residential Per SFU $ Monthly Service Charges (Metered) Up to 3/4" meter $ 1" meter $ 1 1/2" meter $ 2" meter $ 3" meter $ 4" meter $ 6" meter $ 8" meter $ 27.90 $ 28.71 37.20 $ 38.28 46.49 $ 47.84 55.79 $ 57.41 65.09 $ 66.98 27.90 $ 28.71 27.90 $ 28.71 37.20 $ 38.28 25.40 $ 26.14 40.92 $ 42.11 79.06 $ 81.35 124.33 $ 127.94 232.29 $ 239.03 385.52 $ 396.70 768.28 $ 790.56 1,227.76 $ 1,263.37 3.0% 3.0% 29.57 $ 30.46 39.43 $ 40.61 49.28 $ 50.76 59.13 $ 60.90 68.99 $ 71.06 3.0% 3.0% 31.37 $ 32.31 41.83 $ 43.08 52.28 $ 53.85 62.73 $ 64.61 73.19 $ 75.39 29.57 $ 30.46 $ 31.37 $ 32.31 29.57 $ 30.46 $ 31.37 $ 32.31 39.43 $ 40.61 $ 41.83 $ 43.08 26.92 $ 27.73 43.37 $ 44.67 83.79 $ 86.30 131.78 $ 135.73 246.20 $ 253.59 408.60 $ 420.86 814.28 $ 838.71 1,301.27 $ 1,340.31 28.56 $ 29.42 46.01 $ 47.39 88.89 $ 91.56 139.80 $ 143.99 261.20 $ 269.04 433.49 $ 446.49 863.87 $ 889.79 1,380.52 $ 1,421.94 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 $ 2.97 $ 3.06 $ 3.15 $ 3.24 $ 3.34 High Strength Users Flow (per MG annually) $ 3,730.00 $ 3,838.17 $ 3,953.32 $ 4,071.92 $ 4,194.08 $ 4,319.90 BOD (per 1,000 lbs annually) $ 616.00 $ 633.86 $ 652.88 $ 672.47 $ 692.64 $ 713.42 SS (per 1,000 lbs annually) $ 385.00 $ 396.17 $ 408.06 $ 420.30 $ 432.91 $ 445.90 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap. City of Lodi Proposed Temporary Water Shortage Rate Surcharges Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage Conditions (Voluntary) (Mandatory) (Mandatory) (Mandatory) (Mandatory) Use Reduction Goal --> None 5% to 10% 10% to 20% 20% to 30% 30% to 50% > 50% Temp. Water Shortage Surcharge (2) None None 5% 10% 15% 20% Monthly Service Charges Up to 3/4" meter $ 22.50 1" meter $ 35.34 1 1/2" meter $ 67.14 2" meter $ 105.49 3" meter $ 195.00 No Changes to Service Charges 4" meter $ 322.83 6" meter $ 642.13 8" meter $ 1,025.45 10" meter $ 1,472.77 Water Usage Rates ($/CCF) (3) Single Family Residential Tier 1 (0-10 CCF) $ 1.00 $ 1.00 $ 1.05 $ 1.10 $ 1.15 $ 1.20 Tier 2 (11-50 CCF) $ 1.33 $ 1.33 $ 1.40 $ 1.46 $ 1.53 $ 1.60 Tier 3 (> 50 CCF) $ 1.65 $ 1.65 $ 1.73 $ 1.82 $ 1.90 $ 1.98 Multi -Family $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Non -Residential $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Notes: (1) The temporary water shoratge rate surcharge percentages are shown applied to the proposed water usage rates for April 2019 for illustrative purposes. The percentages would be applied to any then -current water usage rates when implemented by declaration of a water shortage by the City Council. (2) The termporary water shortage rate surcharge woud be an incremental (percentage) increase in the water usage rates, but wou not be applied to monthly service charges or to any flat water rates for unmetered customers. (3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate surcharges. Proposicion 218 Aviso y Proceso de Audiencia para Protestar La Propuesta para Incrementar las Tarifas para el Agua y las Aguas Residuales Resumen El Consejo Municipal de la Ciudad considerara futuros aumentos de tarifas para el agua y las aguas residuales, durante una audiencia publica que se efectuara el Miercoles 20 de Marzo de 2019 a las 7:OOp.m en el Carnegie F�rum, 305 West Pine Street, Lodi. Una protesta mayoritaria impedira los aumentos futuros propuestos. Si desea oponerse a los aumentos propuestos, protestas por escrito podran hacerse en persona durante la audiencia o pueden ser entregadas a: City of Lodi Attention: City Clerk 221 West Pine Street Post Office Box 3006 Lodi, California 95241-1910 Explicacion del Proceso para Protestar La Proposicion 218, requiere que la Ciudad le proporcione aviso a todos los duenos de propiedad sobre la propuesta de estructura de tarifas futuras, cuarenta y cinco (45) dias antes de que se lleve a cabo la audiencia pitblica. Si la mayoria de los propietarios o inquilinos que pagan las facturas de utilidades entablan oposiciones al aumento, el incremento no entrara en vigor. La protesta debe contener una descripcion de la propiedad, suficiente para identificar el predio. El domicilio o numero de parcela debera demostrarse en esta correspondencia. Si el nombre en la protesta escrita no aparece en la Ultima lista de tasaciones ecualizadas del Condado de San Joaquin, como duefio de la propiedad o en la cuenta de utilidades, la persona que firme la protesta debera someter evidencia por escrito de ser el arrendatario o propietario y que tiene la responsabilidad de pagar la factura de utilidad. Durante la audiencia pitblica el Consejo debera escuchar todas las protestas y tabular los votos. Una protesta escrita por parcela, sometida por el propietario o el inquilino (pagando la factura de utilidad) de la parcela debera contarse en el calculo de protesta mayoritaria para la propuesta de tarifa nueva o cobro sujeto a los requisitos de la Seccion 6 del Articulo XIII D de la Constitucion de California. Si los votos entran en conflicto, la Ciudad no contara el voto. Explicacion de los Futuros Aumentos Propuestos El personal municipal esta solicitando que el Consejo Municipal autorice la continuacion de la practica actual de ajustes de tarifas debido a la inflacion para el agua y las aguas residuales, en una cantidad minima de hasta menos de tres por ciento (3%), o la cantidad real de la inflacion anual por los proximos cinco anos, para pagar gastos de mantenimiento y de operacion, obligaciones de servicios de deudas, y las necesidades de programas capitales, asi como el sustento de reservas financieras prudentes para ambos servicios; del agua y de las aguas residuales. El aumento inicial en la tasa del agua entrara en vigor en Abril de 2019, seguido por los ajustes inflacionarios cada lro. De Enero, iniciando el alio 2020 hasta el alio 2023. Los ajustes de tarifa para el agua residual se llevaran a cabo cada lro. De Julio, a partir del alio 2019 hasta el alio 2023. Con el proposito de fijar tarifas, la Ciudad de Lodi determina la inflacion como el incremento del porcentaje anual en el Engineering News Record's 20 -Cities Construction Cost Index ("ENR") (Indice de Costes de Construccion 20-Ciudades). El cambio en el ENR para el alio 2018 fue el 2.9 por ciento. Por lo tanto, el personal del municipio propuso que el aumento inicial para ambas tarifas; la del agua y la de las aguas residuales sean de 2.9 por ciento. Las tarifas del agua serail inicialmente ajustadas a partir del lro. De Abril de 2019 y las tarifas para las aguas residuales serail inicialmente ajustadas a partir del lro. De Julio de 2019. Despues de eso, las tarifas serail ajustadas cada lro. De Enero desde el alio 2020 hasta el ano 2023 basado en el cambio anual en el ENR, a partir del 30 de Septiembre, sujeto a un limite anual de 3%. Una excepcion sucedera en Enero de 2021. En esa fecha, las tarifas del agua serail reducidas a las tarifas que existieron en el ano 2016, como fue previamente aprobado por el Consejo Municipal en la Resolucion 2017-23. Despues del aumento de tarifa para el agua residual en Julio de 2019, las tasas para el agua residual serail ajustadas cada lro. De Julio iniciando el ano 2020 hasta el ano 2023, basado en el cambio anual en el ENR a partir del 31 de Marzo, sujeto a un limite anual de 3%. Los ajustes iniciales planteados para las tarifas del agua y para las aguas residuales, asi como las futuras tarifas maximas posibles basadas en esta propuesta se presentan en el cronograma al final de este aviso. Se incluyen ambas tarifas, precios fijos y precios medidos (basados segun el uso) para ambas utilidades; de aguas residuales y el agua. Por ahora no hay cambios propuestos para las listas de tarifas para el agua y las aguas residuales. Explicacion sobre la Propuesta Temporal de la Tarifa de Recargo debido a la Escasez de Agua Con tarifas de agua medida, restricciones sobre el consumo de agua durante una sequia prolongada puede tener un impacto economico en la ganancia del agua, porque una reduccion de ingresos de la yenta de agua, puede exceder la disminucion en los gastos del sistema del agua. La propuesta temporal de la tarifa de recargos debido a la escasez de agua, fue calculada atribuyendole al cliente una porcion del deficit economico calculado, el cual fue causado por las condiciones de escasez de agua, en proporcion por el consumo de agua medida para cada cliente. Este metodo asegura que cada cliente tenga una participacion pareja en los gastos asociados con las condiciones de la escasez del agua. Si se adopta, la propuesta temporal de tarifa de recargo debido a la escasez de agua, como se establece en el presente, sera implementada cuando el Consejo Municipal exprese la emergencia de escasez de agua, necesitando obligatoriamente la reduccion del uso de agua excediendo el 10 por ciento. Recargos temporales por la escasez de agua se aplicarian a las tarifas del uso de agua (pero no al cargo de servicio mensual o a las tarifas fijas de agua), y la cantidad de recargo variaria de acuerdo a la magnitud de las reducciones del consumo de agua requeridas. Las tarifas de recargos debido a la escasez de agua se han disenado de esta manera para que los clientes que cumplan con las metas del consumo reducido de agua puedan tener facturas de agua mas rebajadas que las facturas de agua de consumo de agua normal. Las tarifas de recargos temporales debido a la escasez de agua propuestas son expresadas como un porcentaje de las tarifas de consumo normal de agua. La cantidad del sobrecargo dependera de la meta del consumo reducido de agua que establezca el Consejo Municipal. Las tarifas especificas que se demuestran en este aviso son un ejemplo, basado en las tarifas propuestas para el agua (Abril 2019). Como un ejemplo, con condiciones de Escasez Leve, un 5 por Ciento de tarifa de recargo debido a la escasez de agua, temporalmente aumentara la tarifa de consumo de agua residencial del Nivel 1 de $1.00 por CCF (Centum Cubic Feet) a $1.05 por CCF (un recargo de $0.05 por CCF). Otras tarifas de consumo de agua serail similarmente afectadas segun se indica en la lista de sobrecargos. Cargos de servicio mensual y tarifas fijas para los clientes sin medidores de agua serail inafectados. El recargo temporal sera rescindido cuando el Municipio declare la cesacion del consumo de agua restringido. El Consejo Municipal actualmente no tiene planes de implementar la propuesta de tarifa temporal de recargos debido a la escasez de agua, pero estaran disponibles para ayudar a resolver necesidades economicas durante una futura sequia. Adoptando los recargos en este momento permitira la implementacion a tiempo durante una situacion de futura escasez de agua. Bases para el Calculo de la Tarifa Propuesta Los ajustes anuales de tarifas propuestos para el agua y las aguas residuales se justifican en base a gastos estimados en el futuro que estan asociados con el mantenimiento y operacion continua, obligaciones de servicios de deuda, y necesidades de programa de capital, asi como el sustento de reserva financiera prudente. Los requisitos de las tarifas de ingresos para el agua y aguas residuales fueron determinados de acuerdo a planes financiales desarrollados como parte de un estudio de tazas para el agua y aguas residuales. El Water and Wastewater Rate Study (Estudio de Tarifas para el Agua y Aguas Residuales), preparado por The Reed Group, Inc. esta disponible en el sitio web www.lodi.gov o en el mostrador del Departamento de Obras Publicas en el Ayuntamiento. La razon fundamental y el calculo de la tarifa temporal de recargos debido a la escasez de agua, tambien se describen en el mismo informe. Conclusion Si tiene preguntas sobre este aviso, por favor llame al Departamento de Obras Publicas al (209)333-6706 entre las 7:30 a.m. y 5:30 p.m., de Lunes a Jueves, y de 8:00 a.m. a 5:00 p.m. los Viernes. El Ayuntamiento esta cerrado cada otro viernes. JENNIFER M. FERRAIOLO, Actuaria Municipal Ciudad de Lodi Ciudad de Lodi Lista de Tarifas Actuales y Propuestas Maximas para el Agua Actual (1) Abril 2019 (2) Enero 2020(3) Enero 2021 (1) Enero 2022(3) Enero 2023(3) Ajuste de Tarifa 2.9% 3.0% -8.4% 3.0% 3.0% Tarifas Fijas para el Agua Mensuales (Sin Medir) Residencias Unifamiliares 1 Recamara $32.84 $33.79 $34.80 $31.88 $32.84 $33.83 2 Recamaras $39.44 $40.58 $41.80 $38.29 $39.44 $40.62 3 Recamaras $47.27 $48.64 $50.10 $45.89 $47.27 $48.69 4 Recamaras $56.79 $58.44 $60.19 $55.14 $56.79 $58.49 5 Recamaras $68.11 $70.09 $72.19 $66.13 $68.11 $70.15 Viviendas Multifamiliares 1 Recamara $28.19 $29.01 $29.88 $27.37 $28.19 $29.04 2 Recamaras $33.81 $34.79 $35.83 $32.82 $33.80 $34.81 3 Recamaras $40.58 $41.76 $43.01 $39.40 $40.58 $41.80 4 Recamaras $48.68 $50.09 $51.59 $47.26 $48.68 $50.14 No-Residenciales De acuerdo a ESFU $39.44 $40.58 $41.80 $38.29 $39.44 $40.62 Costos de Servicio Mensuales (Con Medidor) Hasta 3/4" metro $21.87 $22.50 $23.18 $21.23 $21.87 $22.53 1" metro $34.34 $35.34 $36.40 $33.34 $34.34 $35.37 1 '/" metro $65.25 $67.14 $69.15 $63.34 $65.24 $67.20 2" metro $102.52 $105.49 $108.65 $99.53 $102.52 $105.60 3" metro $189.50 $195.00 $200.85 $183.98 $189.50 $195.19 4" metro $313.73 $322.83 $332.51 $304.53 $313.73 $323.14 6" metro $624.03 $642.13 $661.39 $605.85 $624.03 $642.75 8" metro $996.55 $1025.45 $1056.21 $967.52 $996.55 $1026.45 10" metro $1431.26 $1472.77 $1516.95 $1389.57 $1431.26 $1474.20 Tarifas de Consumo de Agua (Con Medidor) --$/CCF Residencias Unifamiliares Nivel 1(0-1OCCF) $0.97 $1.00 $1.03 $0.94 $0.97 $1.00 Nivel 2( 1 1 -50CCF) $1.29 $1.33 $1.37 $1.25 $1.29 $1.33 Nivel 3 (>50CCF) $1.60 $1.65 $1.70 $1.56 $1.61 $1.66 Multifamiliares $1.15 $1.18 $1.22 $1.12 $1.15 $1.18 No-Residenciales $1.15 $1.18 $1.22 $1.12 $1.15 $1.18 Notas: (1) Las tarifas del agua fueron ajustadas en el 2017 basado en la Resoluci6n 2017-23, cual incluye una tasa de reducci6n en Enero 2021 para las tarifas de agua que entraron en vigor en el 2016 (2) El Cambio anual en el ENR 20 -Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018) (3) Los ajustes calculados basados en el cambio anual en el indice ENR cada 30 de Septiembre, es sujeto a un limite de 3.0% Ciudad de Lodi Lista de Tarifas Actuales y Propuestas Maximas para las Aguas Residuales Actual (1) Julio 2019 (2) Julio 2020(3) Julio 2021 (3) Julio 2022(3) Julio 2023(3) Ajuste de Tarifa- 2.9% 3.0% 3.0% 3.0% 3.0% Tarifas fijas para el Agua Mensuales (Sin Medir) Residencias Unifamiliares y Viviendas Residenciales Multifamiliares 1 Recamara $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 2 Recamaras $37.20 $38.28 $39.43 $40.61 $41.83 $43.08 3 Recamaras $46.49 $47.84 $49.28 $50.76 $52.28 $53.85 4 Recamaras $55.79 $57.41 $59.13 $60.90 $62.73 $64.61 5 Recamaras $65.09 $66.98 $68.99 $71.06 $73.19 $75.39 Casas Rodantes Cualquier Tamano $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 Escuelas De acuerdo a SSU (18 estudiantes=1SSU $27.90 $28.71 $29.57 $30.46 I $31.37 $32.31 No-Residenciales De acuerdo a ESFU $37.20 $38.28 $39.43 $40.61 $41.83 $43.08 Costos de Servicio Mensuales (Con Medidor) Hasta 3/4" metro $25.40 $26.14 $26.92 $27.73 $28.56 $29.42 1" metro $40.92 $42.11 $43.37 $44.67 $46.01 $47.39 1 '/2" metro $79.06 $81.35 $83.79 $86.30 $88.89 $91.56 2" metro $124.33 $127.94 $131.78 $135.73 $139.80 $143.99 3" metro $232.29 $239.03 $246.20 $253.59 $261.20 $269.04 4" metro $385.52 $396.70 $408.60 $420.86 $433.49 $446.49 6" metro $768.28 $790.56 $814.28 $838.71 $863.87 $889.79 8" metro $1227.76 $1263.37 $1301.27 $1340.31 $1380.52 $1421.94 Tarifas de Utilizacion Todos los Clientes, Salvo Tarifa de Uso($/CCF de Aguas Residuales (Con Medidor) de Alta Potencia Del use de aqua) $2.89 $2.97 $3.06 $3.15 $3.24 $3.34 Consumidores de Alta Potencia Caudal(anualmente por MG) $3730.00 $3838.17 $3953.32 $4071.92 $4194.08 $4319.90 BOD (anualmente por 1,000 lbs.) $616.00 $633.86 $652.88 $672.47 $692.64 $713.42 SS(anualmente por 1,000lbs.) $385.00 $396.17 $408.06 $420.30 $432.91 $445.90 Notas: (1) Las tarifas de las Aguas Residuales la Ultima vez que fueron ajustadas fue en el 2016 basado en la Resolucion 2016-109. (2) El Cambio anual en el ENR 20 -Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018) (3) Los ajustes calculados basados en el cambio anual en el indice ENR cada 30 de Abril, es sujeto a un limite de 3.0% Ciudad de Lodi Lista de las Tarifas Temporales Propuestas debido a la Escasez de Agua Condiciones de Abastecimiento Normales Posible Escasez (voluntariamente) Escasez Leve (Obligatorio) Escasez Moderada (Obligatorio) Escasez Severa (Obligatorio) Escasez Critica (Obligatorio) Meta de Consumo Reducido Nada 5% al 10% 10% al 20% 20% al 30% 30% al 50% >50% Recargo Temporal debido a la escasez de Agua (2) Nada Nada 5% 10% 15% 20% Costos de Servicio Mensuales Hasta'/4" metro $22.50 1" metro $35.34 No hay cambios a los cobros por los servicios 1 ''h" metro $67.14 2" metro $105.49 3" metro $195.00 4" metro $322.83 6" metro $642.13 8" metro $1025.45 10" metro $1472.77 Tarifas de Consumo de Agua ($/CCF)(3) Residencias Unifamiliares Nivel 1(0-IOCCF) $1.00 $1.00 $1.05 $1.10 $1.15 $1.20 Nivel2(11-50CCF) $1.33 $1.33 $1.40 $1.46 $1.53 $1.60 Nivel3(>50CCF) $1.65 $1.65 $1.73 $1.82 $1.90 $1.98 Multifamiliares $1.18 $1.18 $1.24 $1.30 $1.36 $1.42 No-Residenciales $1.18 $1.18 $1.24 $1.30 $1.36 $1.42 Notas: (1) Los porcentajes de las tarifas de recargos debido a la escasez de agua que se demuestran aplicadas a la propuesta de tarifas para el consumo del agua para Abril 2019, son para propositos ilustrativos. Los porcentajes se aplicaran a cualquier tarifa de consumo de agua que este vigente en esa fecha, cuando el Consejo Municipal declare la implementacion de escasez de agua. (2) La tarifa de recargo temporal debido a la escasez de agua sera un aumento incremental (porcentaje) en las tarifas del consumo de agua, pero no serail aplicadas a los cobros de servicio mensuales o a ninguna tarifa fija para los clientes sin medidor. (3) La tarifa para el consumo de agua que se demuestran para las situaciones de escasez de Nivel Leve a Nivel Critico incorporan las tarifas de recargo debido a la escasez de agua. CITY COUNCIL MARK CHANDLER, Mayor DOUG KUEHNE, Mayor Pro Tempore BOB JOHNSON JOANNE MOUNCE ALAN NAKANISHI CITY OF LODI 2015 "Wine Region of the Year" CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 (209) 333-6706 / FAX (209) 333-6710 EMAIL: pwdept@lodi.gov www.lodi.gov STEPHEN SCHWABAUER City Manager JENNIFER M. FERRAIOLO City Clerk JANICE D. MAGDICH City Attorney CHARLES E. SWIMLEY, JR. Public Works Director January , 2019 SUBJECT: Proposed Schedule of Water and Wastewater Rate Increases This letter to our utility customers addresses some commonly questioned aspects of the Proposition 218 process relative to forecasted utility rate increases. First, the City's Proposition 218 notices will not result in any increase in utility rates. The Proposition 218 notice is a notice of a public hearing for the City Council to consider proposed rate schedules and does not constitute a utility rate increase. In the case of water and wastewater rates, if the City Council approves the proposal it would set an annual maximum limit of 3% for future water and wastewater rate increases, even if the inflationary index exceeds 3%. Second, the City has acted transparently by regularly presenting at public meetings the financial models for the water and wastewater utilities that contain specific information on the forecasted increases in costs for personnel, utilities, materials, supplies, and debt service and lists specific system improvement projects. As recently as January 15, 2019, this information was presented at the Shirtsleeve meeting and is available online at the City's website (www.lodi.gov) under Council Agendas and Minutes. Third, the financial models present the best information available that support the notion of continued modest increases in rates. Again, the City Council will not be voting on March 20 to increase rates by 3% for each of the next five years. Each year, actual numbers from the prior year and budget projections for the next year provide the facts to the City Council so a decision can be made as to whether there should be no rate increase or a modest increase limited to no more than 3%. Fourth, the objective of the proposed rate schedules is to make it possible to (1) offset inflationary increases in water and wastewater operating costs should that become necessary, (2) meet mandatory debt service obligations, and (3) help replace and rehabilitate aging infrastructure. In the past, maximum permitted rate increases have not been implemented and, in fact, since 2012 the average annual water rate increase has been 2.0% and the average annual wastewater rate increase has been 1.9%. Fifth, the recent drought and reduced water sales created some financial strain on the City's water utility. To help reduce financial risk and the potential for unplanned rate increases, the City Council will be considering adopting temporary water shortage rate surcharges. These temporary surcharges would only be implemented during a future drought at a time when the City Council declares shortage conditions requiring mandatory water use reductions. The temporary surcharges would be rescinded when shortage conditions end. Sixth, the proposed rate schedules will not be used to pay for infrastructure required to serve the demands presented by new development. The development impact fee program requires new development to reimburse the City for past and future investments in water, wastewater, streets, police, fire and other infrastructure. In fact, if new development fee revenues exceed that forecasted in the financial models, this could partially offset recommended inflationary increases. Lastly, significant system improvements are being implemented that will, in the long term, significantly reduce expensive maintenance costs and evenly spread utility costs (rates) amongst our customers. These system improvements include the water and wastewater main replacement/rehabilitation program, water meter installation program, old water meter retrofit program, and system -wide well maintenance. And there are administration costs to run the utilities with much of those costs related to meeting State requirements for the operation of the wastewater treatment plant and the water treatment plant. Sincerely, Charles E. Swimley, Jr. Public Works Director CONSEJO MUNICIPAL MARK CHANDLER, Alcalde DOUG KUEHNE, Alcalde Pro Tempore BOB JOHNSON JOANNE MOUNCE ALAN NAKANISHI CITY OF LODI DEPARTAMENTO DE OBRAS POBLICAS CITY HALL, 221 WEST PINE STREET / P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 TELEFONO (209) 333-6706 / FAX (209) 333-6710 EMAIL pwdept@lodi.gov http://www.lodi.gov De Enero de 2019 STEPHEN SCHWABAUER Administrador Municipal JENNIFER M. FERRAIOLO Actuario Municipal JANICE D. MAGDICH Fiscal Municipal CHARLES E. SWIMLEY Director de Obras Publicas TEMA: Programa Propuesto para Incrementar las Tarifas para el agua y las Aguas Residuales Esta carta a nuestros clientes de servicios publicos aborda algunas preguntas que comunmente cuestionan los aspectos del proceso sobre la Proposicion 218 concerniente a los aumentos de servicios publicos pronosticados. Primero, los avisos relacionados con la Proposicion 218 del Municipio no resultaran en ningun aumento en las tarifas de los servicios publicos o utilidades. El aviso sobre la Proposicion 218, es un comunicado sobre una Audiencia Publica para que el Consejo Municipal preste consideracion a una propuesta de un programa para aumentar las tarifas, y no constituye un aumento en los servicios publicos o utilidades. En el caso de las tarifas para el agua y las aguas residuales, si el Consejo Municipal aprueba la proposicion, se fijara un limite maximo anual de 3% para incrementar las tasas para el agua y para las aguas residuales en el futuro, aunque el Indica inflacionario supere el 3%. Segundo, la Ciudad ha obrado transparentemente, presentando regularmente, durante sus juntas publicas los modelos financieros para los servicios publicos del agua y las aguas residuales, los cuales contienen informacion especifica sobre los aumentos pronosticados con respecto al personal, materiales, utilidades, aprovisionamiento de materiales y servicios de deudas y listados de proyectos para la mejora de sistemas. Recientemente, durante la reunion informal del 15 de Enero de 2019 esta informacion fue presentada, y esta disponible por linea en el sitio web de la Ciudad (www.lodi.gov) bajo el titular Council Agendas y Minutes (Agendas del Consejo y Actas) Tercero, los modelos financieros presentan la major informacion disponible para apoyar la nocion para un modesto aumento continuo de las tasas. Una vez mas, el Consejo Municipal no votara el 20 de Marzo para incrementar las tarifas un 3% por cada uno de los proximos cinco anos. Cada ano, cifras reales del ano previo y proyecciones presupuestarias para el ano venidero, le proporcionan informacion al Consejo Municipal para que se pueda hacer una decision pertinente a, si se debe efectuar un aumento modesto limitado a no exceder el 3% o si no se debe efectuar. Cuarto, el objetivo de la propuesta para el plan de incrementacion de tarifa, es para que sea posible (1) compensar los aumentos de inflacion del costo operativo de agua residual y de agua, si Ilegaran a ser necesarios, (2) cumplir con las obligaciones de servicios de deudas y (3) para asistir a reemplazar y a rehabilitar la infraestructura anticuada. En el pasado, el aumento de precios maximo permitido no se ha implementado y, de hecho, desde el 2012 el promedio anual de aumento de tarifas del agua ha sido 2.0% y el promedio anual de incrementacion de tarifa del agua residual ha sido 1.9%. Quinto, la sequia reciente y la yenta de agua reducida ocasiono algunas tensiones financieras con el use de agua de la Ciudad. Para ayudar a reducir el riesgo economico y la posibilidad de aumentos de precios imprevistos, el Consejo Municipal tomara en consideracion la adopcion temporal de cobros de recargos debido a la escasez de agua. Estos recargos temporales seran unicamente implementados durante una futura sequia, en el momento en que el Consejo Municipal presente situaciones de escasez requiriendo la reduccion obligatoria del use de agua. Los sobrecargos temporales seran rescindidos cuando la situacion de escasez cese. Sexto, la estructura de tarifas propuesta, no se utilizara para pagar por la infraestructura necesaria para atender las exigencias que sean presentadas por un desarrollo nuevo. El programa de cuotas de impacto de urbanizacion, le requiere al desarrollo nuevo que le reembolse a la Ciudad por las inversiones que se hayan hecho en el pasado y en el futuro en agua, aguas residuales, calles, policia, bomberos y otra infraestructura. De hecho, si las ganancias de las cuotas de urbanizacion exceden lo que se ha pronosticado en los modelos financieros, esto podria parcialmente compensar los aumentos inflacionarios sugeridos. Por ultimo, se estan implementando mejoras importantes en el sistema, los cuales a largo plazo, reduciran significativamente costos caros de mantenimiento y distribuira los costos (tarifas) de utilidades equitativamente entre nuestros clientes. Estas mejoras del sistema incluyen, la sustitucion de las caner as de las aguas residuales y conductos del agua/programa de rehabilitacion, programa de instalacion de medidores de agua, programa de reequipamiento de los medidores de agua antiguos, y el mantenimiento de todo el sistema de norias. Y hay gastos de gerencia para administrar las utilidades, gran parte de esos costos estan relacionados con el cumpiimiento de los requisitos que tiene el Estado para la operacion de la planta de tratamiento de aguas residuales y la planta potabilizadora. Sinceramente, Charles E. Swimley, Jr. Director de Obras Publicas Proposed Rates - Commercial Organics Collection and Processing Services Can Size 35g 1x per week per cart 35g 2x per week per cart 64g ix per week per cart 64g 2x per week per cart Frequency available for customers with 4+ carts available for customers with 4+ carts Monthly Rate $46.60 $93.19 $70.11 $140.22 Contamination $100 per occurrence $100 per occurrence $100 per occurrence $100 per occurrence If there are any questions, please do not hesitate to call me at (209) 333-5630 (direct office line), or (831) 331-0764 (cell). Sincerely, Joe adelaga Public Sector Services Manager Central Valley Waste Services CC: Alex Oseguera, Vice President and General Manager WM Sam Jager, District Manager WM city of Lodi Public Works Engineering Water and Wastewater Rate Study January 16, 2019 The Reed Group, Inc. 1 Agenda • Study purpose and approach • Rate history and current situation y Water and wastewater financial models • Key assumptions and primary drivers • CIP needs and prudent reserves • Financial plan results • Proposed water and wastewater rate plans • Bill comparison with neighboring communities • Proposed water shortage financial strategy and temporary water shortage surcharges Next steps 2 Study Purpose and Approach Prepare new 10 -year financial plan models for water and wastewater utilities Develop financial strategies for meeting O&M costs, debt obligations, and capital program needs Review current rate structures and develop 5 -year rate plan recommendations > Assist with rate adoption process 3 Recent Rate Resolutions Water Rate Resolution 2017-23 Annual rate adjustments based on changes in ENR inflation index, with 3.0% limit, subject to City Council review . 3.0% adjustment in 2017, no adjustment in 2018 Scheduled rate rollback in January 2021 to return rates to those in effect in 2016 Wastewater Rate Resolution 2016-109 Adjusted rates by 2.5% in July 2016 Annual rate adjustments based on changes in ENR inflation index, with 3.0% limit, subject to City Council review . No adjustments in July 2017 or July 2018 4 Recent Rate History Change from Prior Year 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2012 2013 —Water 2014 2015 2016 2017 2018 —Wastewater •ENR Index 5 Current Water Situation • Completed Phase 7 of meter retrofit program in FY 17-18 . Program to be completed in FY 22-23 . Metered billing transition to be completed in 2025 • FY 18-19 beginning fund/reserve balance is below prudent target level • Fund/reserve balance impacted by recent drought and continue low water usage • Debt service obligations easily being met 6 Impact of Drought on Water Rate Revenue $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 —Water - Fin Plan —Water - Actual 7 Current Wastewater Situation FY 18-19 beginning fund/reserve balance is above target level . Surplus is needed for planned near-term capital improvements Fund/reserve balance somewhat impacted by recent drought and continue low water usage Debt service obligations easily being met 8 Impact of Drought on Wastewater Rate Revenue $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000, 000 $8,000,000 $6,000,000 $4,000, 000 $2,000,000 $- FY 12-13 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 —WW - Fin Plan WW - Actual 9 Financial Plan Assumptions y FY 17-18 actuals and FY 18-19 budget . FY 18-19 beginning fund/reserve balances y "Modified" capital improvement plans Existing debt service obligations Residential growth at 1% per year . Equivalent to about 150 homes per year y Inflation at 3% per year y WID water price inflation at 2% per year y Interest earnings at 3% per year Stable water demand per account 10 Primary Financial Plan Drivers Ensure positive net operating income each fiscal year � Adequately fund capital improvement plans . "Modified" capital improvement plans developed to limit magnitude of rate adjustments Model reserve policies with goal of meeting minimum (25%) target in near-term and recommended prudent (50%) target in long-term Seek measured and uniform rate adjustments . Leverage reserves to smooth rate adjustments . Incorporate previously adopted water rate rollback in January 2021 11 Modified Water CIP $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- ■ Meters and Mains Surface Water Treat. Facil. Groundwater Wells DBCP Program ■ Vehicles/Equipment Other Facilities 1 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 12 A Modified Wastewater CIP $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- ■ Sewer Collection System Wastewater Treatment Facility ■ Vehicles/Equipment FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 13 Financial Reserve Policies r Recommended prudent target operating reserve . Equal to 50% of annual O&M expenses, included debt service . Target is increasingly important because of (1) transition to usage -based rates, and (2) high variability in annual CIP expenditures Minimum reserve objective . Equal to 25% of annual O&M expenses, included debt service y Wastewater rate stabilization reserve maintained at $500,000 14 ENR Index and Rate Adjustments The City adjusts water and wastewater rates by the annual change in the Engineering New Record's 20-Cities Construction Cost Index, subject to a 3% cap . The annual change for 2018 is 2.9% Financial plans include rate adjustments for water (April 2019) and wastewater (July 2019) of 2.9% With the exception of the water rate rollback in January 2021, financial plan models reflect future increases of 3% per year for 5 years 15 r 1 Al Proposed Water Financial Plan $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 Oper. & Maint. Costs Debt Service Costs Capital Prog. Transfer Proposed Revenues Current Revenues Ending Balance — — TargetOper. Reserve ---- Min. Oper. Reserve so - r I FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Rate Adjustments --> 2.9% 3.0% -8.4% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 16 • Proposed WW Financial Plan $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Oper. & Ma int. Costs Proposed Revenues — — Target Oper. Reserve Debt Service Costs Current Revenues ---- Min. Oper. Reserve Capital Prog. Transfer Ending Balance FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Rate Adjustments --> 2.9% I 3.0% 3.0% I 3.0% I 3.0% I 3.0% I 3.0% 3.0% I 3.0% I 3.0% I 3.0% 17 3.0% Proposed Maximum Water and Wastewater Rate Increases April 2019 January 2020 January 2021 Water 2.9% 3.0% -8.4%* January 2022 3.0% January 2023 July 2019 July 2020 July 2021 Wastewater 2.9% 3.0% 3.0% July 2022 3.0% July 2023 3.0% * Rate rollback to 2016 rate schedule, per Resolution 2017-23. 18 No Rate Structure Changes No rate structure changes are proposed at this time • Current rate structures supported by previous cost of service analyses • Water rate rollback planned for January 2021 will reset rate schedule to that in effect in 2016 • Transition to metered billing still underway • Recommend a full cost of service and rate design study at the conclusion of the meter retrofit program 19 Proposed Maximum Flat Water Rates Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 $ 33.79 $ 34.80 $ 31.88 $ 32.84 $ 33.83 2 bedroom $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 3 bedroom $ 47.27 $ 48.64 $ 50.10 $ 45.89 $ 47.27 $ 48.69 4 bedroom $ 56.79 $ 58.44 $ 60.19 $ 55.14 $ 56.79 $ 58.49 5 bedroom $ 68.11 $ 70.09 $ 72.19 $ 66.13 $ 68.11 $ 70.15 Multi -Family Units 1 bedroom $ 28.19 $ 29.01 $ 29.88 $ 27.37 $ 28.19 $ 29.04 2 bedroom $ 33.81 $ 34.79 $ 35.83 $ 32.82 $ 33.80 $ 34.81 3 bedroom $ 40.58 $ 41.76 $ 43.01 $ 39.40 $ 40.58 $ 41.80 4 bedroom $ 48.68 $ 50.09 $ 51.59 $ 47.26 $ 48.68 $ 50.14 Non -Residential Per ESFU $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23, which includes a rate rollback in January 2021 to the water rates that were in effect in 2016. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap. 20 Proposed Maximum Metered Water Rates Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% 3.0% 3.0% Monthly Service Charges (Metered) Up to 3/4" meter $ 1" meter $ 1 1/2" meter $ 2" meter $ 3" meter $ 4" meter $ 6" meter $ 8" meter $ 10" meter $ 21.87 $ 22.50 34.34 $ 35.34 65.25 $ 67.14 102.52 $ 105.49 189.50 $ 195.00 313.73 $ 322.83 624.03 $ 642.13 996.55 $ 1,025.45 1,431.26 $ 1,472.77 23.18 $ 21.23 36.40 $ 33.34 69.15 $ 63.34 108.65 $ 99.53 200.85 $ 183.98 332.51 $ 304.59 661.39 $ 605.85 1,056.21 $ 967.52 1,516.95 $ 1,389.57 21.87 $ 22.53 34.34 $ 35.37 65.24 $ 67.20 102.52 $ 105.60 189.50 $ 195.19 313.73 $ 323.14 624.03 $ 642.75 996.55 $ 1,026.45 1,431.26 $ 1,474.20 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) $ 0.97 $ 1.00 $ 1.03 $ 0.94 $ 0.97 $ 1.00 Tier 2 (11-50 CCF) $ 1.29 $ 1.33 $ 1.37 $ 1.25 $ 1.29 $ 1.33 Tier 3 (> 50 CCF) $ 1.60 $ 1.65 $ 1.70 $ 1.56 $ 1.61 $ 1.66 Multi -Family $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Non -Residential $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 21 Proposed Maximum Flat Wastewater Rates Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 3.0% 3.0% 3.0% 3.0% 1 bedroom $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 2 bedroom $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 3 bedroom $ 46.49 $ 47.84 $ 49.28 $ 50.76 $ 52.28 $ 53.85 4 bedroom $ 55.79 $ 57.41 $ 59.13 $ 60.90 $ 62.73 $ 64.61 5 bedroom $ 65.09 $ 66.98 $ 68.99 $ 71.06 $ 73.19 $ 75.39 Mobile Homes Any Size $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Schools Per SSU (18 students = 1 SSU) $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Non -Residential Per SFU $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap. 22 Proposed Maximum Metered Wastewater Rates Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% Monthly Service Charges (Metered) Up to 3/411 meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter 3.0% 3.0% 3.0% 3.0% $ 25.40 $ 26.14 $ 26.92 $ 27.73 $ 28.56 $ 29.42 $ 40.92 $ 42.11 $ 43.37 $ 44.67 $ 46.01 $ 47.39 $ 79.06 $ 81.35 $ 83.79 $ 86.30 $ 88.89 $ 91.56 $ 124.33 $ 127.94 $ 131.78 $ 135.73 $ 139.80 $ 143.99 $ 232.29 $ 239.03 $ 246.20 $ 253.59 $ 261.20 $ 269.04 $ 385.52 $ 396.70 $ 408.60 $ 420.86 $ 433.49 $ 446.49 $ 768.28 $ 790.56 $ 814.28 $ 838.71 $ 863.87 $ 889.79 $ 1,227.76 $ 1,263.37 $ 1,301.27 $ 1,340.31 $ 1,380.52 $ 1,421.94 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 $ 2.97 $ 3.06 $ 3.15 $ 3.24 $ 3.34 High Strength Users Flow (per MG annually) $ 3,730.00 $ 3,838.17 $ 3,953.32 $ 4,071.92 $ 4,194.08 $ 4,319.90 BOD (per 1,000 Ibs annually) $ 616.00 $ 633.86 $ 652.88 $ 672.47 $ 692.64 $ 713.42 SS (per 1,000 Ibs annually) $ 385.00 $ 396.17 $ 408.06 $ 420.30 $ 432.91 $ 445.90 23 Comparison of Single Family Water/WW Bills with Neighboring Communities $180 $160 $140 $120 $100 $80 $60 $40 $20 $- ■ Water Bill Wastewater Bill City of Tracy City of City of Lodi - City of Lodi - City of Lodi - City of Galt City of City of Manteca CURRENT PROPOSED 2021 Stockton Lathrop Assumes 3/4" meter, 15 CCF water use, and 9 CCF of winter water use. ) 24 Financial Impact of Water Shortages Drought conditions can create financial instability as reduced water sales results in a financial deficit Recommend a multi -prong strategy for offsetting the impact of drought • Use a portion of available operating reserve . Adopt temporary water shortage rate surcharges . Reduce CIP expenditures in severe conditions 25 Water Shortage Contingency Plan —Stages of Shortage Normal Supply Stage 1 - Potential Shortage Stage 2 - Minor Shortage Stage 3 - Moderate Shortage Stage 4 - Severe Shortage Stage 5 - Critical Shortage Reduction in Water Supplies None 5% to 10% 10% to 20% 20% to 30% 30% to 50% Over 50% 26 Water Shortage Financial Deficits $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- ■ ■ Revenues r Expenses Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage 27 Water Shortage Financial Strategy $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Reserve Contribution • Temp. Surcharge Revenue CIP Deferrals IF 11 nu Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage 28 Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage Conditions (Voluntary) (Ma ndatory) (Mandatory) (Mandatory) (Mandatory) Use Reduction Goal --> None 5% to 10% 10% to 20% 20% to 30% 30% to 50% > 50% Temp. Water Shortage Surcharge (2) None None 5% 10% 15% 20% Monthly Service Charges Up to 3/4" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter 10" meter Water Usage Rates ($/CCF) (3) Single Family Residential Tier 1 (0-10 CCF) $ 1.00 $ 1.00 $ 1.05 $ 1.10 $ 1.15 $ 1.20 Tier 2 (11-50 CCF) $ 1.33 $ 1.33 $ 1.40 $ 1.46 $ 1.53 $ 1.60 Tier 3 (> 50 CCF) $ 1.65 $ 1.65 $ 1.73 $ 1.82 $ 1.90 $ 1.98 Multi -Family $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Non -Residential $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 22.50 35.34 67.14 105.49 195.00 322.83 642.13 1,025.45 1,472.77 No Changes to Service Charges Notes: (1) The temporary water shortage rate surcharge percentages are shown applied to the proposed water usage rates for April 2019 for illustrative purposes. The percentages would be applied to any then -current water usage rates when implemented by declaration of a water shortage by the City Council. (2) The temporary water shortage rate surcharge woud be an incremental (percentage) increase in the water usage rates, but would not be applied to monthly service charges or to any flat water rates for unmetered customers. (3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate surcharges. Water Shortage Rate Revenue $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 1 ■ Service Charge Revenue ■ Usage Charge Revenue ■ Temp. Surcharge Revenue • Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage 30 Bill Impacts of Shortage Strategy Water Use Monthly Monthly Water Water Total % Change Reduction Water Use Service Usage Shortage Water from Water Shortage Stage Goal (CCF) Charge Charge Surcharge Bill Normal Bill Average Single Family Customer Meeting Reduction Goals Normal Supply None Potential Shortage 5% to 10% Minor Shortage 10% to 20% Moderate Shortage 20% to 30% Severe Shortage 30% to 50% Critical Shortage > 50% 15 $ 22.50 $ 16.65 $ - $ 39.15 14 $ 22.50 $ 15.32 $ - $ 37.82 -3.4% 13 $ 22.50 $ 13.99 $ 0.70 $ 37.19 -5.0% 12 $ 22.50 $ 12.66 $ 1.27 $ 36.43 -7.0% 10 $ 22.50 $ 10.00 $ 1.50 $ 34.00 -13.2% 7 $ 22.50 $ 7.00 $ 1.40 $ 30.90 -21.1% Average Single Family Customer NOT Meeting Reduction Goals Normal Supply None 15 $ 22.50 $ 16.65 $ - $ 39.15 Potential Shortage 5% to 10% 15 $ 22.50 $ 16.65 $ - $ 39.15 0.0% Minor Shortage 10% to 20% 15 $ 22.50 $ 16.65 $ 0.83 $ 39.98 2.1% Moderate Shortage 20% to 30% 15 $ 22.50 $ 16.65 $ 1.67 $ 40.82 4.3% Severe Shortage 30% to 50% 15 $ 22.50 $ 16.65 $ 2.50 $ 41.65 6.4% Critical Shortage > 50% 15 $ 22.50 $ 16.65 $ 3.33 $ 42.48 8.5% 31 Summary Water and wastewater rate adjustments are needed to meet service and financial obligations . City should continue with annual inflationary adjustments, subject to a 3% annual cap . Water rate rollback scheduled for January 2021 (based on Resolution 2017-23) Multi-year rate plan intended to ease impacts while working to meet financial needs y Current rate structures reflect proportionality requirements for cost of service y Water shortage strategy and temporary surcharges provide tools to mitigate financial ,I risk in future shortages 32 Next Steps • Draft report and recommendations to be presented at City Council meeting on January 16 ➢ Mail Proposition 218 notices of rate increases to customers by February 2 . Final report available during 45 -day notice period prior to public hearing • Public hearing to adopt new water and wastewater rates on March 20 • New water rates implemented in April . New wastewater rates implemented in July 33 Questions? 34 AB 1826 Organics Collection and Recycling Program Proposal City of Lodi Alex Oseguera January 16, 2019 THINK GREEN° WASTE MANAGEMENT AB 1826 Manaatory Commercial Organics Recycling What is it? State law mandating commercial businesses subscribe to an organics/ food waste recycling program Who does it impact and when? January 1, 2019: Businesses that generate 4 cubic yards or more of commercial solid waste per week shall arrange for organic waste recycling services • Municipalities are required to have a program in place to meet the state requirement. • There are currently 457 commercial customers that will meet the mandatory organics recycling threshold January 1 2019 What is CVWS doing to prepare? • WM has purchased an organics recycling truck and inventory (carts/bins) to prepare for 2019 service initiation • Sent an educational mailer to all impacted businesses, October 2018 • Submitted a program and rate proposal to the City • Shared draft program with Cal Recycle • Outreach and Education - preparing a an education program for businesses pending approval of rates and program WASTE MANAGEMENT January 8 2019 ©2019 Waste Management Page 2 THINK GREEN Educational Outreach Duat Organics and Recycling Mailer Sent to Impacted Customers October 2018 % CALIFORNIA MANDATORY tis7 Commercial Recycling Laws AB1826 1 ORGANICS RECYCLING GOThe Law California law requires certain commercial businesses and multifamily properties to have recycling collection services. Those services include mandatory collection of organic materials such as food scraps, food -soiled paper and landscaping trimmings. What's New? Starting January 1, 2019 Businesses that generate 4 cubic yards or more of solid waste per week must have organic waste recycling services. Organics include food, yard trimmings, nonhazardous wood, and food soiled paper. See reverse side for a composting guide. Current Regulations Since January 2017, businesses that generate 4 cubic yards or more of organics waste a week must subscribe to organics collection. 1111111111 4 CUBIC YARDS IS THE EQUIVALENT OF 8.5 96 -GALLON CARTS W 1333 East Turner Road Lodi, CA 95240 Need Help? Waste Management can help your business meet these state regulations. We offer free on-site visits that can help your business meet the state's mandatory recycling requirements. Contact Waste Management to schedule an assessment. email: cssacramento@wm.com phone: 209-369-8274 WASTE MANAGEMENT <NAME> <STREET> <CITY>, <ST>, <ZIP> AB341 0 RECYCLING The commercial sector generates nearly three fourths of the solid waste in California. Much of the commercial sector waste disposed in landfills Is readily recyclable. AB 341 requires all businesses that generate 4 cubic yards or more of trash per week to arrange for recycling services. See reverse side for a recycling guide. January 8, 2019 ORGANICS RECYCLING AB1826 Yard Waste Grass, small branches, leaves, wood chips, cut flowers, garden trimmings Food Waste Discarded vegetables, fruits, meats, bones Only cart service offered for organics recycling. RECYCLING AB341 Mixed Paper Telephone books, office paper, magazines & newspapers Plastic Bottles & Containers All CRV, bottles/jugs of any color and number (lids removed), tubs and containers, buckets, pails, crates, toys, clamshell trays and deli containers, plant pots (no ceramic), and laundry baskets ©2019 Waste Management r Glass Bottles, Jugs & Jars Empty bottles and jars of any color *Please look for recycling sticker on bin before disposing of recyclables Aar _ Cardboard & Paperboard Egg cartons, paper packaging Metal Aluminum cans, tin and steel cans, _ _. , clean aluminum pans and foil, empty aerosol cans Page 3 THINK GREEN Proposed Program • Organic collection and processing services for commercial customers • Customer education, outreach, and training • Weekly service, with additional frequency available for customers with four or more carts • 35g and 64g collection carts available • Contamination charge if material in cart is contaminated with non -conforming material WASTE MANAGEMENT January 8, 2019 ©2019 Waste Management Page 4 THINK GREEN: Proposed Rates (Monthly) • 35g. lx per week per cart = $46.60 • 35g. *2x per week per cart = $93.19 • 64g. lx per week per cart = $70.11 • 64g. *2x per week per cart = 140.22 Each service subject to a $100 contamination charge per occurrence • Available for customers with 4+ carts WASTE MANAGEMENT January 8, 2019 ©2019 Waste Management Page 5 THINK GREEN 56 1383 Draft Regulations - An Update WASTE MANAGEMENT January 8, 2019 ©2019 Waste Management Page 6 THINK GREEN: Please immediately confirm receipt of this fax by calling 333-6702 CITY OF LODI P. O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVERTISING INSTRUCTIONS SUBJECT: PROPOSITION 218 NOTIFICATION AND PROTEST HEARING PROCESS PUBLISH DATE: SATURDAY, MARCH 2, MARCH 9, AND MARCH 16, 2019 CANCEL PREVIOUS REQUEST FOR FEBRUARY 2, 2019 LEGAL AD TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: LNS ACCT. #0510052 DATED: ORDERED BY: JENNIFER M. FERRAIOLO, CITY CLERK City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 WEDNESDAY, JANUARY 30, 2019 JENNIFER M. FERRAIOLO CITY CLERK PAMELA M. FARRIS DEPUTY CITY CLERK SYLVIA DOMINGUEZ ADMINISTRATIVE CLERK Verify Appearance of this Legal in the Newspaper — Copy to File LNS Emailed to the Sentinel at classified1@lodinews.com at (time) on (date) ES PNIF (initials) Phoned to confirm receipt of all pages at (time) (pages) forms\advins.doc Please immediately confirm receipt of this fax by calling 333-6702 CITY OF LODI P. O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVERTISING INSTRUCTIONS SUBJECT: PROPOSITION 218 NOTIFICATION AND PROTEST HEARING PROCESS PUBLISH DATE: SATURDAY, FEBRUARY 2, 2019 LEGAL AD TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: LNS ACCT. #0510052 DATED: ORDERED BY: JENNIFER M. FERRAIOLO, CITY CLERK City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 TUESDAY, JANUARY 29, 2019 JENNIFER M. FERRAIOLO CITY CLERK PAMELA M. FARRIS DEPUTY CITY CLERK SYLVIA DOMINGUEZ ADMINISTRATIVE CLERK Verify Appearance of this Legal in the Newspaper - Copy to File Emailed to the Sentinel at classified)@lodinews.com at e) on i • e) (pages) LNS Phoned to confirm receipt of all pages at (time) _EB Pre (inftials) forms\advins.doc DECLARATION OF POSTING PROPOSITION 218 NOTIFICATION AND PROTEST HEARING PROCESS (ENGLISH AND SPANISH) On Tuesday, January 29, 2019, in the City of Lodi, San Joaquin County, California, a Proposition 218 notification and protest hearing process (attached and marked as Exhibit A) was posted at the following locations: Lodi City Clerk's Office Lodi City Hall Lobby Lodi Carnegie Forum WorkNet Office I declare under penalty of perjury that the foregoing is true and correct. Executed on January 29, 2019, at Lodi, California. PAMELA M. FARRIS DEPUTY CITY CLERK ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK SYLVIA DOMINGUEZ ADMINISTRATIVE CLERK N:\Administration\CLERK\Public Hearings \AFFADAVITS\DECPOSTPW I.DOC EXHIBIT Proposition 218 Notification and Protest Hearing Process Summary The Lodi City Council will consider proposed future water, wastewater, and contracted solid waste rate increases at a public hearing at 7:00 p.m., Wednesday. March 20, 2019, at the Carnegie Forum, 305 West Pine Street, Lodi, CA. A majority protest would stop the proposed future rate increases. If you wish to protest the proposed increases written protests may be made in person at the public hearing or delivered prior to the hearing to: City of Lodi Attention: City Clerk 221 West Pine Street Post Office Box 3006 Lodi, California 95241-1910 Written protests must be received by the end of the public hearing, including those mailed to the City. No postmarks will be accepted; therefore, any protest not physically received by the close of the public hearing, whether or not mailed prior to the hearing, shall not be counted. Explanation of Protest Process Proposition 218 requires that the City provide a notice of the proposed future rate schedule to all property owners forty-five (45) days prior to holding a public hearing. If a majority of the property owners, or renters who pay the utility bill, file oppositions to the increase, the increase will not take effect. A protest must contain a description of the property owned sufficient to identify the property. The address or assessor's parcel number is shown on this mailing. If the name on the written protest is not shown on the last equalized assessment roll of San Joaquin County as the owner of the property or on the utility account, the signer of the protest must also submit written evidence of ownership or rentership and financial responsibility for the utility account. At the public hearing, Council shall hear all protests and tabulate written protests. One written protest per parcel, filed by the owner or tenant (paying the utility bill) of the parcel shall be counted in calculating a majority protest to a proposed new fee or charge subject to the requirements of Section 6 of Article XIII D of the California Constitution. If the votes conflict, the City will count the no vote. Explanation of Proposed Future Increases City Staff is requesting that the City Council authorize continuation of the existing practice of inflationary based adjustments to water and wastewater rates in an amount up to the lesser of three percent (3%), or the actual amount of annual inflation, for the next five years, to pay for anticipated operating and maintenance costs, debt service obligations, and capital program needs as well as the maintenance of prudent financial reserves for both the water and wastewater utilities. The initial increase in water rates would be effective on April 1, 2019, followed by inflationary adjustments each January 1st from 2020 through 2023. Wastewater rate adjustments would occur each July 1st from 2019 through 2023. In accordance with the City's existing solid waste franchise agreement with Central Valley Waste Services (Waste Management), solid waste rate adjustments would occur each April 1st from 2019 through 2023. For water and wastewater rate setting purposes, the City of Lodi determines inflation as the annual percentage increase in the Engineering News Record's 20 -Cities Construction Cost Index ("ENR"). The change in the ENR for 2018 was 2.9 percent. Therefore, City staff proposes that the initial increases for both water and wastewater rates be 2.9 percent. Water rates would initially be adjusted effective April 1, 2019 and wastewater rates would initially be adjusted effective July 1, 2019. Thereafter, water rates would be adjusted each January 1st from 2020 through 2023 based on the annual change in the ENR as of September 30th, subject to a three percent (3%) annual cap. An exception will occur in January 2021. At that time, water rates will be reduced to the rates that existed in 2016, as previously approved by the City Council in Resolution No. 2017-23. After the initial wastewater rate increase in July 2019, wastewater rates would be adjusted each July 1st from 2020 through 2023 based on the annual change in the ENR as of March 31st subject to a three percent (3%) annual cap. In accordance with the City's existing solid waste franchise agreement with Waste Management, the City of Lodi proposes to continue increasing contracted solid waste charges by the amount equal to 80 percent of the annual change in the Consumer Price Index (CPI) for all Urban Consumers for San Francisco -Oakland -San Jose, California Area, All Items (1982-84=100) plus an adjustment for extraordinary increases in landfill fees, fuel and energy costs, and changes in law up to 100 percent of the change in the CPI; or 100 percent of the annual change in the CPI without the other adjustments but with a certification that costs had increased by more than 100 percent of the change in the CPI. To comply with new State law, a new category of solid waste rates is proposed to be added and titled, "Commercial Organic Collection and Processing Services." These new proposed organic collection rates will not affect single family residential customers at this time. The proposed initial adjustment to water and wastewater rates, as well as the maximum potential future water, wastewater, and contracted solid waste rates based on this proposal are presented in the schedules at the end of this notice. The schedules include both flat rates and metered (usage - based) rates for both water and wastewater utilities. No changes to the water or wastewater rate structures are proposed at this time. Explanation of Proposed Temporary Water Shortage Rate Surcharges With metered water rates, water usage restrictions during an extended drought can have a financial impact on the water utility because the reduction in water sales revenue can exceed the reduction in water system costs. The proposed temporary water shortage rate surcharges were calculated by assigning a portion of the estimated financial deficit created by water shortage conditions to customers in proportion to each customer's metered water usage. This approach ensures that each customer bears a proportionate share of the costs associated with water shortage conditions. If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would only be implemented when the City Council declares a water shortage emergency necessitating mandatory water use reductions exceeding 10 percent. Temporary water shortage surcharges would be applied to the water usage rates (but not to monthly service charges or flat water rates), and the amount of the surcharge would vary with the magnitude of required water use reductions. Water shortage rate surcharges have been designed such that customers meeting water use reduction goals will have lower water bills than their normal water bills with normal water usage. The proposed temporary water shortage rate surcharges are expressed as a percentage of the normal water usage rates. The amount of the surcharge would depend on the water use reduction goal established by the City Council. The specific rates shown in this notice are an example, based on proposed (April 2019) water rates. As an example, with Minor Shortage conditions a five percent (5%) water shortage rate surcharge would temporarily increase the Tier 1 residential water usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Other water usage rates would be similarly affected as shown in surcharge schedule. Monthly service charges and the flat rates for unmetered customers would be unaffected. The temporary surcharge would be rescinded when the City Council declares an end to mandatory water use restrictions. The City Council currently has no plans to implement the proposed temporary water shortage rate surcharges, but they would be available to help address financial needs during a future drought. Adopting the surcharges at this time would enable timely implementation during a future water shortage condition. Explanation of Proposed Commercial Organic Collection and Processing Services Rates Assembly Bill 1826 was passed in September 2014 to aid in meeting the statewide goal of diverting 75 percent of waste from landfills by 2020. The law requires businesses, including state and local agencies with businesses that generate certain amounts of organic waste per week, to have organic waste recycling programs on or after April 1, 2016. Organic waste includes food waste, green waste, landscape and pruning waste, nonhazardous wood waste and food -soiled paper. AB 1826 has phased thresholds triggering when agencies must have a program in place to comply with the law. The City of Lodi has not had any qualifying businesses until January 1, 2019 when the threshold was reduced to require agencies to have a program in place to accommodate businesses generating 4 or more cubic yards of solid waste per week. Residential customers will not be affected by these new rates. Basis of Proposed Rate Calculation The proposed annual water and wastewater rate adjustments are justified based on estimated future costs associated with ongoing operation and maintenance, existing debt service obligations, and capital program needs as well as the need to maintain prudent financial reserves. The water and wastewater rate revenue requirements were determined based on financial plans developed as part of a water and wastewater rate study. The Water and Wastewater Rate Study, prepared for the City of Lodi by The Reed Group, Inc., is available at www.lodi.Rov or at the Public Works counter in City Hall during regular business hours. The rationale and calculations of the temporary water shortage rate surcharges are also described in the Rate Study. The proposed annual contracted solid waste rate adjustments are based on the City of Lodi's existing franchise agreement with Waste Management for Solid Waste Collection. Conclusion If you have any questions regarding this notice, please call the Public Works Department at (209) 333-6706 between 7:30 a.m. and 5:30 p.m., Monday through Thursday, and between 8:00 a.m. and 5:00 p.m. on Friday. City Hall is closed every other Friday. JENNIFER M. FERRAIOLO, City Clerk City of Lodi City of Lodi Current and Proposed Maximum Water Rate Schedules Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 $ 33.79 $ 34.80 $ 31.88 $ 32.84 $ 33.83 2 bedroom $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 3 bedroom $ 47.27 $ 48.64 $ 50.10 $ 45.89 $ 47.27 $ 48.69 4 bedroom $ 56.79 $ 58.44 $ 60.19 $ 55.14 $ 56.79 $ 58.49 5 bedroom $ 68.11 $ 70.09 $ 72.19 $ 66.13 $ 68.11 $ 70.15 Multi -Family Units 1 bedroom $ 28.19 $ 29.01 $ 29.88 $ 27.37 $ 28.19 $ 29.04 2 bedroom $ 33.81 $ 34.79 $ 35.83 $ 32.82 $ 33.80 $ 34.81 3 bedroom $ 40.58 $ 41.76 $ 43.01 $ 39.40 $ 40.58 $ 41.80 4 bedroom $ 48.68 $ 50.09 $ 51.59 $ 47.26 $ 48.68 $ 50.14 Non -Residential Per ESFU $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 Monthly Service Charges (Metered) Up to 3/4" meter $ 1" meter $ 1 1/2" meter $ 2" meter $ 3" meter $ 4" meter $ 6" meter $ 8" meter $ 10" meter $ 21.87 $ 22.50 $ 23.18 $ 21.23 $ 21.87 $ 22.53 34.34 $ 35.34 $ 36.40 $ 33.34 $ 34.34 $ 35.37 65.25 $ 67.14 $ 69.15 $ 63.34 $ 65.24 $ 67.20 102.52 $ 105.49 $ 108.65 $ 99.53 $ 102.52 $ 105.60 189.50 $ 195.00 $ 200.85 $ 183.98 $ 189.50 $ 195.19 313.73 $ 322.83 $ 332.51 $ 304.59 $ 313.73 $ 323.14 624.03 $ 642.13 $ 661.39 $ 605.85 $ 624.03 $ 642.75 996.55 $ 1,025.45 $ 1,056.21 $ 967.52 $ 996.55 $ 1,026.45 1,431.26 $ 1,472.77 $ 1,516.95 $ 1,389.57 $ 1,431.26 $ 1,474.20 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) $ 0.97 $ 1.00 $ 1.03 $ 0.94 $ 0.97 $ 1.00 Tier 2 (11-50 CCF) $ 1.29 $ 1.33 $ 1.37 $ 1.25 $ 1.29 $ 1.33 Tier 3 (> 50 CCF) $ 1.60 $ 1.65 $ 1.70 $ 1.56 $ 1.61 $ 1.66 Multi -Family $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Non -Residential $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23, which includes a rate rollback in January 2021 to the water rates that were in effect in 2016. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap. City of Lodi Current and Proposed Maximum Wastewater Rate Schedules Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% 3.0% 3.0% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 46.49 $ 47.84 $ 49.28 $ 50.76 $ 52.28 $ 53.85 55.79 $ 57.41 $ 59.13 $ 60.90 $ 62.73 $ 64.61 65.09 $ 66.98 $ 68.99 $ 71.06 $ 73.19 $ 75.39 1 bedroom $ 2 bedroom $ 3 bedroom $ 4 bedroom $ 5 bedroom $ Mobile Homes Any Size $ Schools Per SSU (18 students = 1 SSU) $ Non -Residential Per SFU $ Monthly Service Charges (Metered) Up to 3/4" meter $ 1" meter $ 1 1/2" meter $ 2" meter $ 3" meter $ 4" meter $ 6" meter $ 8" meter $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 25.40 $ 26.14 $ 26.92 $ 27.73 $ 28.56 $ 29.42 40.92 $ 42.11 $ 43.37 $ 44.67 $ 46.01 $ 47.39 79.06 $ 81.35 $ 83.79 $ 86.30 $ 88.89 $ 91.56 124.33 $ 127.94 $ 131.78 $ 135.73 $ 139.80 $ 143.99 232.29 $ 239.03 $ 246.20 $ 253.59 $ 261.20 $ 269.04 385.52 $ 396.70 $ 408.60 $ 420.86 $ 433.49 $ 446.49 768.28 $ 790.56 $ 814.28 $ 838.71 $ 863.87 $ 889.79 1,227.76 $ 1,263.37 $ 1,301.27 $ 1,340.31 $ 1,380.52 $ 1,421.94 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 $ 2.97 $ 3.06 $ 3.15 $ 3.24 $ 3.34 High Strength Users Flow (per MG annually) $ 3,730.00 $ 3,838.17 $ 3,953.32 $ 4,071.92 $ 4,194.08 $ 4,319.90 BOD (per 1,000 lbs annually) $ 616.00 $ 633.86 $ 652.88 $ 672.47 $ 692.64 $ 713.42 SS (per 1,000 lbs annually) $ 385.00 $ 396.17 $ 408.06 $ 420.30 $ 432.91 $ 445.90 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap. City of Lodi Proposed Temporary Water Shortage Rate Surcharges Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage Conditions (Voluntary) (Mandatory) (Mandatory) (Mandatory) (Mandatory) Use Reduction Goal --> None 5% to 10% 10% to 20% 20% to 30% 30% to 50% > 50% Temp. Water Shortage Surcharge (2) None None 5% 10% 15% 20% Monthly Service Charges Up to 3/4" meter $ 22.50 1" meter $ 35.34 1 1/2" meter $ 67.14 2" meter $ 105.49 3" meter $ 195.00 No Changes to Service Charges 4" meter $ 322.83 6" meter $ 642.13 8" meter $ 1,025.45 10" meter $ 1,472.77 Water Usage Rates ($/CCF) (3) Single Family Residential Tier 1 (0-10 CCF) $ 1.00 $ 1.00 $ 1.05 $ 1.10 $ 1.15 $ 1.20 Tier 2 (11-50 CCF) $ 1.33 $ 1.33 $ 1.40 $ 1.46 $ 1.53 $ 1.60 Tier 3 (> 50 CCF) $ 1.65 $ 1.65 $ 1.73 $ 1.82 $ 1.90 $ 1.98 Multi -Family $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Non -Residential $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Notes: (1) The temporary water shoratge rate surcharge percentages are shown applied to the proposed water usage rates for April 2019 for illustrative purposes. The percentages would be applied to any then -current water usage rates when implemented by declaration of a water shortage by the City Council. (2) The termporary water shortage rate surcharge woud be an incremental (percentage) increase in the water usage rates, but wou not be applied to monthly service charges or to any flat water rates for unmetered customers. (3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate surcharges. Proposed Rates - Commerical Organics Collection and Processing Services Ca_ n Size Frequency Monthly Rate 35g 1x per Week per Cart $46.60 35g `2x per Week per Cart Available for Customers with 4+ Carts $93.19, 64g :1x per Week per Cart $70.11 64g 2x per Week per Cart _ Av iilable for Customers with 4+ Carts $140.22 Contamination $100 per Occurrence $100 per Occurrence $100 per Occurrence $100 per Occurrence Notification pertinente a la Proposicion 218 y Aviso para el Proceso de Audiencia para Protestar Resumen El Consejo Municipal de la Ciudad considerara futuros aumentos de tarifas para el agua, las aguas residuales y las tarifas acordadas de desechos solidos, durante una audiencia publica que se efectuara el Miercoles 20 de Marzo de 2019 a las 7:OOp.m en el Carnegie F�rum, 305 West Pine Street, Lodi, CA. Una protesta mayoritaria impedira los aumentos futuros de tarifas propuestas. Si desea oponerse a los aumentos propuestos, protestas por escrito podran hacerse en persona durante la audiencia publica o pueden ser entregadas antes se dicha audiencia en: City of Lodi Attention: City Clerk 221 West Pine Street Post Office Box 3006 Lodi, California 95241-1910 Las protestas por escrito deberan ser recibidas al final de la audiencia publica, incluyendo las que fueron enviadas por correo a la Ciudad. No se aceptaran cartas con fecha matasellada; por lo tanto, cualquier protesta que no se haya recibido fisicamente a la conclusion de la audiencia publica, ya sea o no enviada antes de la audiencia, no contara. Explication del Proceso para Protestar La Proposicion 218, requiere que la Ciudad le proporcione aviso a todos los duenos de propiedad sobre la propuesta de estructura de tarifas futuras, cuarenta y cinco (45) dias antes de que se lleve a cabo la audiencia publica. Si la mayoria de los propietarios o inquilinos que pagan las facturas de utilidades entablan oposiciones al aumento, el incremento no entrara en vigor. La protesta debe contener una description de la propiedad, suficiente para identificar el predio. El domicilio o numero de parcela debera demostrarse en esta correspondencia. Si el nombre en la protesta escrita no aparece en la Ultima lista de tasaciones ecualizadas del Condado de San Joaquin, como dueno de la propiedad o en la cuenta de utilidades, la persona que firme la protesta debera someter evidencia por escrito de ser el arrendatario o propietario y que tiene la responsabilidad financiera sobre la cuenta de las utilidades. Durante la audiencia publica el Consejo debera escuchar todas las protestas y tabular las protestas por escritos. Una protesta escrita por parcela, sometida por el propietario o el inquilino (pagando la factura de utilidad) de la parcela debera contarse en el calculo de protesta mayoritaria para la propuesta de tarifa nueva o cobro sujeto a los requisitos de la Seccion 6 del Articulo XIII D de la Constitution de California. Si los votos entran en conflicto, la Ciudad no contara el voto. Explication de los Futuros Aumentos Propuestos El personal municipal esta solicitando que el Consejo Municipal autorice la continuation de la practica actual de ajustes de tarifas debido a la inflation para el agua y las aguas residuales, en una cantidad minima de hasta menos de tres por ciento (3%), o la cantidad real de la inflacion anual por los proximos cinco anos, para pagar gastos de mantenimiento y de operacion, obligaciones de servicios de deudas, y las necesidades de programas capitales, asi como el sustento de reservas financieras prudentes para ambos servicios; del agua y de las aguas residuales. El aumento inicial en la tasa del agua entrara en vigor el lro. de Abril de 2019, seguido por los ajustes inflacionarios cada lro. De Enero, iniciando el alio 2020 hasta el alio 2023. Los ajustes de tarifas para el agua residual se llevaran a cabo cada lro. De Julio, a partir del alio 2019 hasta el alio 2023. En conformidad con el contrato de franquicia pertinente a los desechos solidos que existe entra el Municipio y Central Valley Waste Services (Waste Management). Los ajustes de tarifas para los desechos solidos deberan llevarse a cabo cada lro. de Abril iniciando el alio 2019 hasta el alio 2023. Con el proposito de fijar tarifas para el agua y las aguas residuales, la Ciudad de Lodi determina la inflacion como el incremento del porcentaj a anual en el Engineering News Record's 20 -Cities Construction Cost Index ("ENR") (Indice de Costes de Construccion 20-Ciudades). El cambio en el ENR para el alio 2018 fue el 2.9 por ciento. Por lo tanto, el personal del municipio propuso que el aumento inicial para ambas tarifas; la del agua y la de las aguas residuales sean de 2.9 por ciento. Las tarifas del agua seran inicialmente ajustadas a partir del lro. De Abril de 2019 y las tarifas para las aguas residuales seran inicialmente ajustadas a partir del lro. De Julio de 2019. Despues de eso, las tarifas seran ajustadas cada lro. De Enero a partir del alio 2020 hasta el afio 2023 basado en el cambio anual en el ENR, a partir del 30 de Septiembre, sujeto a un limite anual de tres por ciento (3%) Una excepcion sucedera en Enero de 2021. En esa fecha, las tarifas del agua seran reducidas a las tarifas que existieron en el alio 2016, como fue previamente aprobado por el Consejo Municipal en la Resolucion No. 2017-23. Despues del aumento de tarifa para el agua residual en Julio de 2019, las tasas para el agua residual seran ajustadas cada lro. De Julio iniciando el afio 2020 hasta el alio 2023, basado en el cambio anual en el ENR a partir del 31 de Marzo, sujeto a un limite anual de tres por ciento (3%). En conformidad con el contrato de franquicia pertinente a los desechos solidos que existe entre la Ciudad y Waste Management, La Ciudad de Lodi propone seguir incrementando los cobros acordados de los desechos solidos, por una cantidad equitativa de 80 por ciento de la variacion anual en el Indice de Precios de Consumo (CPI siglas en Ingles), para todos los Consumidores Urbanos en las areas de San Francisco -Oakland -San Jose, California. Todos los Articulos, (1982- 84=100) mas un ajuste debido a los aumentos extraordinarios de tasas para los vertederos o basureros, los costos de combustible y energia, y cambios en la ley hasta el 100 por ciento del cambio en el Indice de Precios de Consumo (CPI); o 100 por ciento del cambio anual del Indice de Precios de Consumo (CIP) sin los otros ajustes, pero con la certificacion de que los costos han aumentado en mas del 100 por ciento en el cambio del Indice de Precios de Consumo (CPI). Para cumplir con la nueva Ley Estatal se propone que una categoria nueva para las tarifas de residuos solidos sea anadida y titulada, "Recoleccion Organica Comercial y Servicios de Procesamiento". Esta propuesta nueva de tarifas para la recoleccion organica no afectara a clientes de vivienda unifamiliar en este momento. Los ajustes iniciales planteados para las tarifas del agua y para las aguas residuales, asi como las futuras tarifas maximas posibles para el agua, las residuales y las tarifas acordadas para desechos solidos, basadas en esta propuesta se presentan en el cronograma al final de este aviso. La tabla de tasas incluye ambas tarifas, precios fijos y precios medidos (basados segun el uso) para ambas utilidades; de aguas residuales y el agua. Por ahora no hay cambios propuestos para las listas de tarifas para el agua y las aguas residuales. Explicacion sobre la Propuesta Temporal de la Tarifa de Recargo debido a la Escasez de Agua Con tarifas de agua medida, restricciones sobre el consumo de agua durante una sequia prolongada puede tener un impacto economico en la ganancia del agua, porque una reduccion de ingresos de la yenta de agua, puede exceder la disminucion en los gastos del sistema del agua. La propuesta temporal de la tarifa de recargos debido a la escasez de agua, fue calculada atribuyendole al cliente una porcion del deficit economico calculado, el cual fue causado por las condiciones de escasez de agua, en proporcion por el consumo de agua medida para cada cliente. Este metodo asegura que cada cliente tenga una participacion pareja en los gastos asociados con las condiciones de la escasez del agua. Si se adopta, la propuesta temporal de tarifa de recargo debido a la escasez de agua, como se establece en el presente, sera unicamente implementada cuando el Consejo Municipal exprese la emergencia de escasez de agua, necesitando obligatoriamente la reduccion del uso de agua excediendo el 10 por ciento. Recargos temporales por la escasez de agua se aplicarian a las tarifas del uso de agua (pero no al cargo de servicio mensual o a las tarifas fijas de agua), y la cantidad de recargo variaria de acuerdo a la magnitud de las reducciones del consumo de agua requeridas. Las tarifas de recargos debido a la escasez de agua se han disenado de esta manera para que los clientes que cumplan con las metas del consumo reducido de agua puedan tener facturas de agua mas rebajadas que las facturas de agua de consumo de agua normal. Las tarifas de recargos temporales debido a la escasez de agua propuestas son expresadas como un porcentaje de las tarifas de consumo normal de agua. La cantidad del sobrecargo dependera de la meta del consumo reducido de agua que establezca el Consejo Municipal. Las tarifas especificas que se demuestran en este aviso son un ejemplo, basado en las tarifas propuestas para el agua (Abril 2019). Como un ejemplo, con condiciones de Escasez Leve, un cinco por ciento (5%) de tarifa de recargo debido a la escasez de agua, temporalmente aumentara la tarifa de consumo de agua residencial del Nivel 1 de $1.00 por CCF (Centum Cubic Feet) a $1.05 por CCF (un recargo de $0.05 por CCF). Otras tarifas de consumo de agua serail similarmente afectadas segun se indica en la lista de sobrecargos. Cargos de servicio mensual y tarifas fijas para los clientes sin medidores de agua seran inafectados. El recargo temporal sera rescindido cuando el Municipio declare la cesacion del consumo de agua restringido. El Consejo Municipal actualmente no tiene planes de implementar la propuesta de tarifa temporal de recargos debido a la escasez de agua, pero estaran disponibles para ayudar a resolver necesidades economicas durante una futura sequia. Adoptando los recargos en este momento permitira la implementacion a tiempo durante una situacion de futura escasez de agua. Explicacion para la Propuesta de tarifas para la Recoleccion Organica Comercial y los Servicios de Procesamiento El Proyecto de Ley 1826 fue aprobado en Septiembre de 2014 para ayudar a cumplir la meta a nivel estatal de desviar el 75 por ciento de desechos de los basureros o vertederos para el ano 2020. La Ley exige a empresas, incluyendo agencias locales y estatales con comercios que generan cierta cantidad de desechos organicos por semana, que tengan programas de reciclaje de residuos organicos a partir o a no mas tardar del lro. De Abril de 2016. Los desechos organicos incluyen desechos alimenticios, residuos verdes, residuos de jardineria y de podar, residuos de Lena que no sea peligrosa y papel que este ensuciado por comida. La Propuesta de Ley 1826 ha puesto etapas para que las agencias tengan el programa empleado para poder cumplir con la ley. La Ciudad de Lodi no ha tenido ninguna empresa que califique hasta el lro. de Enero de 2019 cuando el limite fue reducido para que las agencias tengan un programa situado para acoplar a las empresas que generen 4 o mas yardas cubicas de desperdicios solidos por semana. Los clientes residenciales no seran afectados por estas nuevas tarifas. Bases para el Calculo de la Tarifa Propuesta Los ajustes anuales de tarifas propuestos para el agua y las aguas residuales se justifican en base a gastos estimados en el futuro que estan asociados con el mantenimiento y operacion continua, obligaciones de servicios de deuda, y necesidades de programa de capital, asi como el sustento de reserva financiera prudente. Los requisitos de las tarifas de ingresos para el agua y aguas residuales fueron determinados de acuerdo a planes financiales desarrollados como parte de un estudio de tazas para el agua y aguas residuales. El Water and Wastewater Rate Study (Estudio de Tarifas para el Agua y Aguas Residuales), preparado por The Reed Group, Inc. esta disponible en el sitio web www.lodi.gov o en el mostrador del Departamento de Obras Publicas en el Ayuntamiento durante las horas normales de trabajo. La razon fundamental y el Calculo de la tarifa temporal de recargos debido a la escasez de agua, tambien se describen en el Estudio de Tasas. La propuesta de ajustes anuales de tarifas acordadas para los desechos solidos estan basadas en el contrato de franquicia que existe entre La Ciudad de Lodi y Waste Management para la recoleccion de Residuos Solidos. Conclusion Si tiene preguntas sobre este aviso, por favor llame al Departamento de Obras Publicas al (209)333-6706 entre las 7:30 a.m. y 5:30 p.m., de Lunes a Jueves, y de 8:00 a.m. a 5:00 p.m. los Viernes. El Ayuntamiento esta cerrado cada otro viernes. JENNIFER M. FERRAIOLO, Actuaria Municipal Ciudad de Lodi Ciudad de Lodi Lista de Tarifas Actuales y Propuestas Maximas para el Agua Actual (1) Abril 2019 (2) Enero 2020(3) Enero 2021 (1) Enero 2022(3) Enero 2023(3) Ajuste de Tarifa 2.9% 3.0% -8.4% 3.0% 3.0% Tarifas Fijas para el Agua Mensuales (Sin Medir) Residencias Unifamiliares 1 Recamara $32.84 $33.79 $34.80 $31.88 $32.84 $33.83 2 Recamaras $39.44 $40.58 $41.80 $38.29 $39.44 $40.62 3 Recamaras $47.27 $48.64 $50.10 $45.89 $47.27 $48.69 4 Recamaras $56.79 $58.44 $60.19 $55.14 $56.79 $58.49 5 Recamaras $68.11 $70.09 $72.19 $66.13 $68.11 $70.15 Viviendas Multifamiliares 1 Recamara $28.19 $29.01 $29.88 $27.37 $28.19 $29.04 2 Recamaras $33.81 $34.79 $35.83 $32.82 $33.80 $34.81 3 Recamaras $40.58 $41.76 $43.01 $39.40 $40.58 $41.80 4 Recamaras $48.68 $50.09 $51.59 $47.26 $48.68 $50.14 No-Residenciales De acuerdo a ESFU $39.44 $40.58 $41.80 $38.20 $39.44 $40.62 Costos de Servicio Mensuales (Con Medidor) Hasta'/4" metro $21.87 $22.50 $23.18 $21.23 $21.87 $22.53 1" metro $34.34 $35.34 $36.40 $33.34 $34.34 $35.37 1 `/2" metro $65.25 $67.14 $69.15 $63.34 $65.24 $67.20 2" metro $102.52 $105.49 $108.65 $99.53 $102.52 $105.60 3" metro $189.50 $195.00 $200.85 $183.98 $189.50 $195.19 4" metro $313.73 $322.83 $332.51 $304.53 $313.73 $323.14 6" metro $624.03 $642.13 $661.39 $605.85 $624.03 $642.75 8" metro $996.55 $1025.45 $1056.21 $967.52 $996.55 $1026.45 10" metro $1431.26 $1472.77 $1516.95 $1389.57 $1431.26 $1474.20 Tarifas de Consumo de Agua (Con Medidor) --$/CCF Residencias Unifamiliares Nivel 1(0-10CCF) $0.97 $1.00 $1.03 _ $0.94 $0.97 $1.00 Nivel2(11-50CCF) $1.29 $1.33 $1.37 $1.25 $1.29 $1.33 Nivel3(>50CCF) $1.60 $1.65 $1.70 $1.56 $1.61 $1.66 Multifamiliares $1.15 $1.18 $1.22 $1.12 $1.15 $1.18 No-Residenciales $1.15 $1.18 $1.22 $1.12 $1.15 $1.18 Notas: (1) Las tarifas del agua fueron ajustadas en el 2017 basado en la Resolucibn 2017-23, cual incluye una tasa de reduccion en Enero 2021 para las tarifas de agua que entraron en vigor en el 2016 (2) El Cambio anual en el ENR 20 -Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018) (3) Los ajustes calculados basados en el cambio anual en el indice ENR cada 30 de Septiembre, es sujeto a un limite de 3.0% Ciudad de Lodi Lista de Tarifas Actuales y Propuestas Maximas para las Aguas Residuales Actual (1) Julio 2019 (2) Julio 2020(3) Julio 2021 (3) Julio 2022(3) Julio 2023(3) Ajuste de Tarifa- 2.9% 3.0% 3.0% 3.0% 3.0% Tarifas fijas para el Agua Mensuales (Sin Medir) Residencias Unifamiliares y Viviendas Residenciales Multifamiliares 1 Recamara $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 2 Recamaras $37.20 $38.28 $39.43 $40.61 $41.83 $43.08 3 Recamaras $46.49 $47.84 $49.28 $50.76 $52.28 $53.85 4 Recamaras $55.79 $57.41 $59.13 $60.90 $62.73 $64.61 5 Recamaras $65.09 $66.98 $68.99 $71.06 $73.19 $75.39 Casas Rodantes Cualquier Tamatio $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 Escuelas De acuerdo a SSU (18 estudiantes=lSSU $27.90 $28.71 $29.57 1 $30.46 $31.37 $32.31 No-Residenciales De acuerdo a ESFU $37.20 $38.28 , $39.43 I $40.61 $4183 $43.08 Costos de Servicio Mensuales (Con Medidor) Hasta 3/4" metro $25.40 $26.14 $26.92 $27.73 $28.56 $29.42 1" metro $40.92 $42.11 $43.37 $44.67 $46.01 $47.39 1 '/z" metro $79.06 $81.35 $83.79 $86.30 $88.89 $91.56 2" metro $124.33 $127.94 $131.78 $135.73 $139.80 $143.99 3" metro $232.29 $239.03 $246.20 $253.59 $261.20 $269.04 4" metro $385.52 $396.70 $408.60 $420.86 $433.49 $446.49 6" metro $768.28 $790.56 $814.28 $838.71 $863.87 $889.79 8" metro $1227.76 $1263.37 $1301.27 $1340.31 $1380.52 $1421.94 Tarifas de Utilizacion Todos los Clientes, Salvo Tarifa de Uso($/CCF de Aguas Residuales (Con Medidor) de Alta Potencia Del use de agua) $2.89 1 $2.97 $3.06 $3.15 $3.24 $3.34 Consumidores de Alta Potencia Caudal(anualmente por MG) $3730.00 $3838.17 $3953.32 $4071.92 $4194.08 $4319.90 BOD (anualmente por 1,000 lbs.) $616.00 $633.86 $652.88 $672.47 $692.64 $713.42 SS(anualmente por 1,000 lbs.) $385.00 $396.17 $408.06 $420.30 $432.91 $445.90 Notas: (1) Las tarifas de las Aguas Residuales la Ultima vez que fueron ajustadas fue en el 2016 basado en la Resolucion 2016-109. (2) El Cambio anual en el ENR 20-Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018) (3) Los ajustes calculados basados en el cambio anual en el indice ENR cada 30 de Abril, es sujeto a un limite de 3.0% Ciudad de Lodi Lista de las Tarifas Temporales Propuestas debido a la Escasez de Agua Condiciones de Abastecimiento Normales Posible Escasez (voluntaria mente) Escasez Leve (Obligatorio) Escasez Moderada (Obligatorio) Escasez Severa (0 b liga tor i o) Escasez Critica (Obligatorio) Meta de Consumo Reducido Nada 5% al 10% 10% al 20% 20% al 30% 30% al 50% >50% Recargo Temporal debido a la escasez de Agua (2) Nada Nada 5%10% 15% 20% Costos de Servicio Mensuales Rasta %" metro $22.50 1" metro $35.34 No hay cambios a los cobros por los servicios 1 '''A" metro $67.14 2" metro $105.49 3" metro $195.00 4" metro $322.83 6" metro $642.13 8" metro $1025.45 10" metro $1472.77 Tarifas de Consumo de Agua ($/CCF)(3) Residencias Unifamiliares Nivell(0-10CCF) $1.00 $1.00 $1.05 $1.10 $1.15 $1.20 Nivel2(11-50CCF) $1.33 $1.33 $1.40 $1.46 $1.53 $1.60 Nivel3(>50CCF) $1.65 $1.65 $1.73 $1.82 $1.90 $1.98 Multifamiliares $1.18 $1.18 $1.24 $1.30 $1.36 $1.42 No-Residenciales $1.18 $1.18 $1.24 $1.30 $1.36 $1.42 Notas: (1) Los porcentajes de las tarifas de recargos debido a la escasez de agua que se demuestran aplicadas a la propuesta de tarifas para el consumo del agua para Abril 2019, son para propdsitos ilustrativos. Los porcentajes se aplicaran a cualquier tarifa de consumo de agua que este vigente en esa fecha, cuando el Consejo Municipal declare la implementacibn de escasez de agua. (2) La tarifa de recargo temporal debido a la escasez de agua sera un aumento incremental (porcentaje) en las tarifas del consumo de agua, pero no serail aplicadas a los cobros de servicio mensuales o a ninguna tarifa fija para los clientes sin medidor. (3) La tarifa para el consumo de agua que se demuestran para las situaciones de escasez de Nivel Leve a Nivel Critico incorporan las tarifas de recargo debido a la escasez de agua. CERTIFICATE OF MAILING NOTICE OF RATE SETTING, PROPOSED RATE INCREASE & PUBLIC HEARING DATE I, Tiffani Butorovich, Administrative Secretary of the Public Works Department of the City of Lodi, under penalty of perjury, certify as follows: That for and on behalf of the City Clerk of the City of Lodi, and on February 1, 2019, I caused to be mailed a Notice of Rate Setting, Proposed Rate Increase & Public Hearing Date to all water, wastewater and solid waste customers of the City of Lodi and all persons owning real property on which these rates and charges are imposed and as are shown on the last equalized assessment roll of San Joaquin County (mailing list on file in the office of the Public Works Department), a copy of which Notice is hereto attached and marked "Exhibit A". Executed on February 6, 2019, TIFF 1 BUTOROVICH Exhibit A Proposition 218 Notification and Protest Hearing Process Summary The Lodi City Council will consider proposed future water, wastewater, and contracted solid waste rate increases at a public hearing at 7:00 p.m., Wednesday, March 20, 2019, at the Carnegie Forum, 305 West Pine Street, Lodi, CA. A majority protest would stop the proposed future rate increases. If you wish to protest the proposed increases written protests may be made in person at the public hearing or delivered prior to the hearing to: City of Lodi Attention: City Clerk 221 West Pine Street Post Office Box 3006 Lodi, California 95241-1910 Written protests must be received by the end of the public hearing, including those mailed to the City. No postmarks will be accepted; therefore, any protest not physically received by the close of the public hearing, whether or not mailed prior to the hearing, shall not be counted. Explanation of Protest Process Proposition 218 requires that the City provide a notice of the proposed future rate schedule to all property owners forty-five (45) days prior to holding a public hearing. If a majority of the property owners, or renters who pay the utility bill, file oppositions to the increase, the increase will not take effect. A protest must contain a description of the property owned sufficient to identify the property. The address or assessor's parcel number is shown on this mailing. If the name on the written protest is not shown on the last equalized assessment roll of San Joaquin County as the owner of the property or on the utility account, the signer of the protest must also submit written evidence of ownership or rentership and financial responsibility for the utility account. At the public hearing, Council shall hear all protests and tabulate written protests. One written protest per parcel, filed by the owner or tenant (paying the utility bill) of the parcel shall be counted in calculating a majority protest to a proposed new fee or charge subject to the requirements of Section 6 of Article XIII D of the California Constitution. If the votes conflict, the City will count the no vote. Explanation of Proposed Future Increases City Staff is requesting that the City Council authorize continuation of the existing practice of inflationary based adjustments to water and wastewater rates in an amount up to the lesser of three percent (3%), or the actual amount of annual inflation, for the next five years, to pay for anticipated operating and maintenance costs, debt service obligations, and capital program needs as well as the maintenance of prudent financial reserves for both the water and wastewater utilities. The initial increase in water rates would be effective on April 1, 2019, followed by inflationary adjustments each January 1st from 2020 through 2023. Wastewater rate adjustments would occur each July 1st from 2019 through 2023. In accordance with the City's existing solid waste franchise agreement with Central Valley Waste Services (Waste Management), solid waste rate adjustments would occur each April 1st from 2019 through 2023. For water and wastewater rate setting purposes, the City of Lodi determines inflation as the annual percentage increase in the Engineering News Record's 20 -Cities Construction Cost Index ("ENR"). The change in the ENR for 2018 was 2.9 percent. Therefore, City staff proposes that the initial increases for both water and wastewater rates be 2.9 percent. Water rates would initially be adjusted effective April 1, 2019 and wastewater rates would initially be adjusted effective July 1, 2019. Thereafter, water rates would be adjusted each January 1st from 2020 through 2023 based on the annual change in the ENR as of September 30th, subject to a three percent (3%) annual cap. An exception will occur in January 2021. At that time, water rates will be reduced to the rates that existed in 2016, as previously approved by the City Council in Resolution No. 2017-23. After the initial wastewater rate increase in July 2019, wastewater rates would be adjusted each July 1st from 2020 through 2023 based on the annual change in the ENR as of March 31st subject to a three percent (3%) annual cap. In accordance with the City's existing solid waste franchise agreement with Waste Management, the City of Lodi proposes to continue increasing contracted solid waste charges by the amount equal to 80 percent of the annual change in the Consumer Price Index (CPI) for all Urban Consumers for San Francisco -Oakland -San Jose, California Area, All Items (1982-84=100) plus an adjustment for extraordinary increases in landfill fees, fuel and energy costs, and changes in law up to 100 percent of the change in the CPI; or 100 percent of the annual change in the CPI without the other adjustments but with a certification that costs had increased by more than 100 percent of the change in the CPI. To comply with new State law, a new category of solid waste rates is proposed to be added and titled, "Commercial Organic Collection and Processing Services." These new proposed organic collection rates will not affect single family residential customers at this time. The proposed initial adjustment to water and wastewater rates, as well as the maximum potential future water, wastewater, and contracted solid waste rates based on this proposal are presented in the schedules at the end of this notice. The schedules include both flat rates and metered (usage - based) rates for both water and wastewater utilities. No changes to the water or wastewater rate structures are proposed at this time. Explanation of Proposed Temporary Water Shortage Rate Surcharges With metered water rates, water usage restrictions during an extended drought can have a financial impact on the water utility because the reduction in water sales revenue can exceed the reduction in water system costs. The proposed temporary water shortage rate surcharges were calculated by assigning a portion of the estimated financial deficit created by water shortage conditions to customers in proportion to each customer's metered water usage. This approach ensures that each customer bears a proportionate share of the costs associated with water shortage conditions. If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would only be implemented when the City Council declares a water shortage emergency necessitating mandatory water use reductions exceeding 10 percent. Temporary water shortage surcharges would be applied to the water usage rates (but not to monthly service charges or flat water rates), and the amount of the surcharge would vary with the magnitude of required water use reductions. Water shortage rate surcharges have been designed such that customers meeting water use reduction goals will have lower water bills than their normal water bills with normal water usage. The proposed temporary water shortage rate surcharges are expressed as a percentage of the normal water usage rates. The amount of the surcharge would depend on the water use reduction goal established by the City Council. The specific rates shown in this notice are an example, based on proposed (April 2019) water rates. As an example, with Minor Shortage conditions a five percent (5%) water shortage rate surcharge would temporarily increase the Tier 1 residential water usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Other water usage rates would be similarly affected as shown in surcharge schedule. Monthly service charges and the flat rates for unmetered customers would be unaffected. The temporary surcharge would be rescinded when the City Council declares an end to mandatory water use restrictions. The City Council currently has no plans to implement the proposed temporary water shortage rate surcharges, but they would be available to help address financial needs during a future drought. Adopting the surcharges at this time would enable timely implementation during a future water shortage condition. Explanation of Proposed Commercial Organic Collection and Processing Services Rates Assembly Bill 1826 was passed in September 2014 to aid in meeting the statewide goal of diverting 75 percent of waste from landfills by 2020. The law requires businesses, including state and local agencies with businesses that generate certain amounts of organic waste per week, to have organic waste recycling programs on or after April 1, 2016. Organic waste includes food waste, green waste, landscape and pruning waste, nonhazardous wood waste and food -soiled paper. AB 1826 has phased thresholds triggering when agencies must have a program in place to comply with the law. The City of Lodi has not had any qualifying businesses until January 1, 2019 when the threshold was reduced to require agencies to have a program in place to .accommodate businesses generating 4 or more cubic yards of solid waste per week. Residential customers will not be affected by these new rates. Basis of Proposed Rate Calculation The proposed annual water and wastewater rate adjustments are justified based on estimated future costs associated with ongoing operation and maintenance, existing debt service obligations, and capital program needs as well as the need to maintain prudent financial reserves. The water and wastewater rate revenue requirements were determined based on financial plans developed as part of a water and wastewater rate study. The Water and Wastewater Rate Study, prepared for the City of Lodi by The Reed Group, Inc., is available at www.lodi.gov or at the Public Works counter in City Hall during regular business hours. The rationale and calculations of the temporary water shortage rate surcharges are also described in the Rate Study. The proposed annual contracted solid waste rate adjustments are based on the City of Lodi's existing franchise agreement with Waste Management for Solid Waste Collection. Conclusion If you have any questions regarding this notice, please call the Public Works Department at (209) 333-6706 between 7:30 a.m. and 5:30 p.m., Monday through Thursday, and between 8:00 a.m. and 5:00 p.m. on Friday. City Hall is closed every other Friday. JENNIFER M. FERRAIOLO, City Clerk City of Lodi City of Lodi Current and Proposed Maximum Water Rate Schedules Current (1) Apr. 2019 (2) Jan. 2020 (3) Jan. 2021 (1) Jan. 2022 (3) Jan. 2023 (3) Rate Adjustment --> 2.9% 3.0% -8.4% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family Residential 1 bedroom $ 32.84 $ 33.79 $ 34.80 $ 31.88 $ 32.84 $ 33.83 2 bedroom $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 3 bedroom $ 47.27 $ 48.64 $ 50.10 $ 45.89 $ 47.27 $ 48.69 4 bedroom $ 56.79 $ 58.44 $ 60.19 $ 55.14 $ 56.79 $ 58.49 5 bedroom $ 68.11 $ 70.09 $ 72.19 $ 66.13 $ 68.11 $ 70.15 Multi -Family Units 1 bedroom $ 28.19 $ 29.01 $ 29.88 $ 27.37 $ 28.19 $ 29.04 2 bedroom $ 33.81 $ 34.79 $ 35.83 $ 32.82 $ 33.80 $ 34.81 3 bedroom $ 40.58 $ 41.76 $ 43.01 $ 39.40 $ 40.58 $ 41.80 4 bedroom $ 48.68 $ 50.09 $ 51.59 $ 47.26 $ 48.68 $ 50.14 Non -Residential Per ESFU $ 39.44 $ 40.58 $ 41.80 $ 38.29 $ 39.44 $ 40.62 Monthly Service Charges (Metered) Up to 3/4" meter $ 21.87 $ 22.50 $ 23.18 $ 21.23 $ 21.87 $ 22.53 1" meter $ 34.34 $ 35.34 $ 36.40 $ 33.34 $ 34.34 $ 35.37 1 1/2" meter $ 65.25 $ 67.14 $ 69.15 $ 63.34 $ 65.24 $ 67.20 2" meter $ 102.52 $ 105.49 $ 108.65 $ 99.53 $ 102.52 $ 105.60 3" meter $ 189.50 $ 195.00 $ 200.85 $ 183.98 $ 189.50 $ 195.19 4" meter $ 313.73 $ 322.83 $ 332.51 $ 304.59 $ 313.73 $ 323.14 6" meter $ 624.03 $ 642.13 $ 661.39 $ 605.85 $ 624.03 $ 642.75 8" meter $ 996.55 $ 1,025.45 $ 1,056.21 $ 967.52 $ 996.55 $ 1,026.45 10" meter $ 1,431.26 $ 1,472.77 $ 1,516.95 $ 1,389.57 $ 1,431.26 $ 1,474.20 Water Usage Rates (Metered) -- $/CCF Single Family Residential Tier 1 (0-10 CCF) $ 0.97 $ 1.00 $ 1.03 $ 0.94 $ 0.97 $ 1.00 Tier 2 (11-50 CCF) $ 1.29 $ 1.33 $ 1.37 $ 1.25 $ 1.29 $ 1.33 Tier 3 (> 50 CCF) $ 1.60 $ 1.65 $ 1.70 $ 1.56 $ 1.61 $ 1.66 Multi Family $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Non Residential $ 1.15 $ 1.18 $ 1.22 $ 1.12 $ 1.15 $ 1.18 Notes: (1) Water rates were last adjusted in 2017 based on Resolution 2017-23, which includes a rate rollback in January 2021 to the water rates that were in effect in 2016. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap. City of Lodi Current and Proposed Maximum Wastewater Rate Schedules Current (1) Jul. 2019 (2) Jul. 2020 (3) Jul. 2021 (3) Jul. 2022 (3) Jul. 2023 (3) Rate Adjustments --> 2.9% 3.0% 3.0% 3.0% 3.0% Monthly Flat Water Rates (Unmetered) Single Family and Multi -Family Residential Dwelling Units 1 bedroom $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 2 bedroom $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 3 bedroom $ 46.49 $ 47.84 $ 49.28 $ 50.76 $ 52.28 $ 53.85 4 bedroom $ 55.79 $ 57.41 $ 59.13 $ 60.90 $ 62.73 $ 64.61 5 bedroom $ 65.09 $ 66.98 $ 68.99 $ 71.06 $ 73.19 $ 75.39 Mobile Homes Any Size $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Schools Per SSU (18 students = 1 SSU) $ 27.90 $ 28.71 $ 29.57 $ 30.46 $ 31.37 $ 32.31 Non -Residential Per SFU $ 37.20 $ 38.28 $ 39.43 $ 40.61 $ 41.83 $ 43.08 Monthly Service Charges (Metered) Up to 3/4" meter 1" meter 1 1/2" meter 2" meter 3" meter 4" meter 6" meter 8" meter $ 25.40 $ 26.14 $ 26.92 $ 27.73 $ 28.56 $ 29.42 $ 40.92 $ 42.11 $ 43.37 $ 44.67 $ 46.01 $ 47.39 $ 79.06 $ 81.35 $ 83.79 $ 86.30 $ 88.89 $ 91.56 $ 124.33 $ 127.94 $ 131.78 $ 135.73 $ 139.80 $ 143.99 $ 232.29 $ 239.03 $ 246.20 $ 253.59 $ 261.20 $ 269.04 $ 385.52 $ 396.70 $ 408.60 $ 420.86 $ 433.49 $ 446.49 $ 768.28 $ 790.56 $ 814.28 $ 838.71 $ 863.87 $ 889.79 $ 1,227.76 $ 1,263.37 $ 1,301.27 $ 1,340.31 $ 1,380.52 $ 1,421.94 Wastewater Usage Rates (Metered) All Customers, Except High Strength Usage Rate ($/CCF of water use) $ 2.89 $ 2.97 $ 3.06 $ 3.15 $ 3.24 $ 3.34 High Strength Users Flow (per MG annually) $ 3,730.00 $ 3,838.17 $ 3,953.32 $ 4,071.92 $ 4,194.08 $ 4,319.90 BOD (per 1,000 lbs annually) $ 616.00 $ 633.86 $ 652.88 $ 672.47 $ 692.64 $ 713.42 5S (per 1,000 Ibs annually) $ 385.00 $ 396.17 $ 408.06 $ 420.30 $ 432.91 $ 445.90 Notes: (1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109. (2) Annual change in ENR 20 -Cities Construction Cost Index for 2018 (based on Dec. 2017 to Dec. 2018). (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap. City of Lodi Proposed Temporary Water Shortage Rate Surcharges Normal Potential Minor Moderate Severe Critical Supply Shortage Shortage Shortage Shortage Shortage Conditions (Voluntary) (Mandatory) (Mandatory) (Mandatory) (Mandatary) Use Reduction Goal --> None 5% to 10% 10% to 20% 20% to 30% 30% to 50% > 50% Temp. Water Shortage Surcharge (2) None None 5% 10% 15% 20% Monthly Service Charges Up to 3/4" meter $ 22.50 1" meter $ 35.34 11/2" meter $ 67.14 2" meter $ 105.49 3" meter $ 195.00 No Changes to Service Charges 4" meter $ 322.83 6" meter $ 642.13 8" meter $ 1,025.45 10" meter $ 1,472.77 Water Usage Rates ($/CCF) (3) Single Family Residential Tier 1 (0-10 CCF) $ 1.00 $ 1.00 $ 1.05 $ 1.10 $ 1.15 $ 1.20 Tier 2 (11-50 CCF) $ 1.33 $ 1.33 $ 1.40 $ 1.46 $ 1.53 $ 1.60 Tier 3 (> 50 CCF) $ 1.65 $ 1.65 $ 1.73 $ 1.82 $ 1.90 $ 1.98 Multi -Family $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Non -Residential $ 1.18 $ 1.18 $ 1.24 $ 1.30 $ 1.36 $ 1.42 Notes: (1) The temporary water shoratge rate surcharge percentages are shown applied to the proposed water usage rates for April 2019 for illustrative purposes. The percentages would be applied to any then -current water usage rates when implemented by declaration of a water shortage by the City Council. (2) The termporary water shortage rate surcharge woud be an incremental (percentage) increase in the water usage rates, but wou not be applied to monthly service charges or to any flat water rates for unmetered customers. (3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate surcharges. Proposed Rates - Commerical Organics Collection and Processing Services Can Size Frequency Monthly Rate Contamination 35g 1x per Week per Cart $46.60 $100 per Occurrence 35g 2x per Week per Cart ' Available for Customers with 4+ Carts $93.19 $100 per Occurrence :64g 1x per Week per Cart $70.11 $100 per Occurrence 64g :2x per Week per Cart _ Available for Customers with 4+ Carts 5140.22 5100 per Occurrence Notificacion pertinente a la Proposicion 218 y Aviso para el Proceso de Audiencia para Protestar Resumen El Consejo Municipal de la Ciudad considerara futuros aumentos de tarifas para el agua, las aguas residuales y las tarifas acordadas de desechos solidos, durante una audiencia publica que se efectuara el Miercoles 20 de. Marzo de 2019 a las 7:OOp.m en el Carnegie F�rum, 305 West Pine Street, Lodi, CA. Una protesta mayoritaria impedira los aumentos futuros de tarifas propuestas. Si desea oponerse a los aumentos propuestos, protestas por escrito podran hacerse en persona durante la audiencia publica o pueden ser entregadas antes se dicha audiencia en: City of Lodi Attention: City Clerk 221 West Pine Street Post Office Box 3006 Lodi, California 95241-1910 Las protestas por escrito deberan ser recibidas al final de la audiencia publica, incluyendo las que fueron enviadas por correo a la Ciudad. No se aceptaran cartas con fecha matasellada; por lo tanto, cualquier protesta que no se haya recibido fisicamente a la conclusion de la audiencia publica, ya sea o no enviada antes de la audiencia, no contara. Explicacion del Proceso para Protestar La Proposicion 218, requiere que la Ciudad le proporcione aviso a todos los duefios de propiedad sobre la propuesta de estructura de tarifas futuras, cuarenta y cinco (45) dias antes de que se lleve a cabo la audiencia publica. Si la mayoria de los propietarios o inquilinos que pagan las facturas de utilidades entablan oposiciones al aumento, el incremento no entrara en vigor. La protesta debe contener una descripcion de la propiedad, suficiente para identificar el predio. El domicilio o numero de parcela debera demostrarse en esta correspondencia. Si el nombre en la protesta escrita no aparece en la Ultima lista de tasaciones ecualizadas del Condado de San Joaquin, como duel de la propiedad o en la cuenta de utilidades, la persona que firme la protesta debera someter evidencia por escrito de ser el arrendatario o propietario y que tiene la responsabilidad financiera sobre la cuenta de las utilidades. Durante la audiencia publica el Consejo debera escuchar todas las protestas y tabular las protestas por escritos. Una protesta escrita por parcela, sometida por el propietario o el inquilino (pagando la factura de utilidad) de la parcela debera contarse en el calculo de protesta mayoritaria para la propuesta de tarifa nueva o cobro sujeto a los requisitos de la Seccion 6 del Articulo XIII D de la Constitucion de California. Si los votos entran en conflicto, la Ciudad no contara el voto. Explicacion de los Futuros Aumentos Propuestos El personal municipal esta solicitando que el Consejo Municipal autorice la continuacion de la practica actual de ajustes de tarifas debido a la inflacion para el agua y las aguas residuales, en una cantidad minima de hasta menos de tres por ciento (3%), o la cantidad real de la inflacion anual por los proximos cinco anos, para pagar gastos de mantenimiento y de operacion, obligaciones de servicios de deudas, y las necesidades de programas capitales, asi como el sustento de reservas financieras prudentes para ambos servicios; del agua y de las aguas residuales. El aumento inicial en la tasa del agua entrara en vigor el lro. de Abril de 2019, seguido por los ajustes inflacionarios cada lro. De Enero, iniciando el ano 2020 hasta el ano 2023. Los ajustes de tarifas para el agua residual se llevaran a cabo cada lro. De Julio, a partir del ano 2019 hasta el aflo 2023. En conformidad con el contrato de franquicia pertinente a los desechos solidos que existe entra el Municipio y Central Valley Waste Services (Waste Management). Los ajustes de tarifas para los desechos solidos deberan llevarse a cabo cada lro. de Abril iniciando el ano 2019 hasta el ano 2023. Con el proposito de fijar tarifas para el agua y las aguas residuales, la Ciudad de Lodi determina la inflacion como el incremento del porcentaje anual en el Engineering News Record's 20 -Cities Construction Cost Index ("ENR") (Indice de Costes de Construccion 20-Ciudades). El cambio en el ENR para el ano 2018 fue el 2.9 por ciento. Por lo tanto, el personal del municipio propuso que el aumento inicial para ambas tarifas; la del agua y la de las aguas residuales sean de 2.9 por ciento. Las tarifas del agua seran inicialmente ajustadas a partir del lro. De Abril de 2019 y las tarifas para las aguas residuales seran inicialmente ajustadas a partir del lro. De Julio de 2019. Despues de eso, las tarifas seran ajustadas cada lro. De Enero a partir del ano 2020 hasta el ano 2023 basado en el cambio anual en el ENR, a partir del 30 de Septiembre, sujeto a un limite anual de tres por ciento (3%) Una excepcion sucedera en Enero de 2021. En esa fecha, las tarifas del agua seran reducidas a las tarifas que existieron en el ano 2016, como fue previamente aprobado por el Consejo Municipal en la Resolucion No. 2017-23. Despues del aumento de tarifa para el agua residual en Julio de 2019, las tasas para el agua residual seran ajustadas cada lro. De Julio iniciando el ano 2020 hasta el ano 2023, basado en el cambio anual en el ENR a partir del 31 de Marzo, sujeto a un limite anual de tres por ciento (3%). En conformidad con el contrato de franquicia pertinente a los desechos solidos que existe entre la Ciudad y Waste Management, La Ciudad de Lodi propone seguir incrementando los cobros acordados de los desechos solidos, por una cantidad equitativa de 80 por ciento de la variacion anual en el Indice de Precios de Consumo (CPI siglas en Ingles), para todos los Consumidores Urbanos en las areas de San Francisco -Oakland -San Jose, California. Todos los Articulos, (1982- 84=100) mas un ajuste debido a los aumentos extraordinarios de tasas para los vertederos o basureros, los costos de combustible y energia, y cambios en la ley hasta el 100 por ciento del cambio en el Indice de Precios de Consumo (CPI); o 100 por ciento del cambio anual del Indice de Precios de Consumo (CIP) sin los otros ajustes, pero con la certificacion de que los costos han aumentado en mas del 100 por ciento en el cambio del Indice de Precios de Consumo (CPI). Para cumplir con la nueva Ley Estatal se propone que una categoria nueva para las tarifas de residuos solidos sea anadida y titulada, "Recoleccion Organica Comercial y Servicios de Procesamiento". Esta propuesta nueva de tarifas para la recoleccion organica no afectara a clientes de vivienda unifamiliar en este momento. Los ajustes iniciales planteados para las tarifas del agua y para las aguas residuales, asi como las futuras tarifas maximas posibles para el agua, las residuales y las tarifas acordadas para desechos solidos, basadas en esta propuesta se presentan en el cronograma al final de este aviso. La tabla de tasas incluye ambas tarifas, precios fijos y precios medidos (basados segun el uso) para ambas utilidades; de aguas residuales y el agua. Por ahora no hay cambios propuestos para las listas de tarifas para el agua y las aguas residuales. Explicacion sobre la Propuesta Temporal de la Tarifa de Recargo debido a la Escasez de Agua Con tarifas de agua medida, restricciones sobre el consumo de agua durante una sequia prolongada puede tener un impacto economico en la ganancia del agua, porque una reduccion de ingresos de la yenta de agua, puede exceder la disminucion en los gastos del sistema del agua. La propuesta temporal de la tarifa de recargos debido a la escasez de agua, fue calculada atribuyendole al cliente una porcion del deficit economico calculado, el cual fue causado por las condiciones de escasez de agua, en proporcion por el consumo de agua medida para cada cliente. Este metodo asegura que cada cliente tenga una participacion pareja en los gastos asociados con las condiciones de la escasez del agua. Si se adopta, la propuesta temporal de tarifa de recargo debido a la escasez de agua, como se establece en el presente, sera unicamente implementada cuando el Consejo Municipal exprese la emergencia de escasez de agua, necesitando obligatoriamente la reduccion del uso de agua excediendo el 10 por ciento. Recargos temporales por la escasez de agua se aplicarfan a las tarifas del uso de agua (pero no al cargo de servicio mensual o a las tarifas fijas de agua), y la cantidad de recargo variaria de acuerdo a la magnitud de las reducciones del consumo de agua requeridas. Las tarifas de recargos debido a la escasez de agua se han disenado de esta manera para que los clientes que cumplan con las metas del consumo reducido de agua puedan tener facturas de agua mas rebajadas que las facturas de agua de consumo de agua normal. Las tarifas de recargos temporales debido a la escasez de agua propuestas son expresadas como un porcentaje de las tarifas de consumo normal de agua. La cantidad del sobrecargo dependera de la meta del consumo reducido de agua que establezca el Consejo Municipal. Las tarifas especificas que se demuestran en este aviso son un ejemplo, basado en las tarifas propuestas para el agua (Abril 2019). Como un ejemplo, con condiciones de Escasez Leve, un cinco por ciento (5%) de tarifa de recargo debido a la escasez de agua, temporalmente aumentara la tarifa de consumo de agua residencial del Nivel 1 de $1.00 por CCF (Centum Cubic Feet) a $1.05 por CCF (un recargo de $0.05 por CCF). Otras tarifas de consumo de agua serail similarmente afectadas segun se indica en la lista de sobrecargos. Cargos de servicio mensual y tarifas fijas para los clientes sin medidores de agua serail inafectados. El recargo temporal sera rescindido • cuando el Municipio declare la cesacion del consumo de agua restringido. El Consejo Municipal actualmente no tiene planes de implementar la propuesta de tarifa temporal de recargos debido a la escasez de agua, pero estaran disponibles para ayudar a resolver necesidades economicas durante una futura sequia. Adoptando los recargos en este momento permitira la implementacion a tiempo durante una situacion de futura escasez de agua. Explicacion para la Propuesta de tarifas para la Recoleccion Organica Comercial y los Servicios de Procesamiento El Proyecto de Ley 1826 fue aprobado en Septiembre de 2014 para ayudar a cumplir la meta a nivel estatal de desviar el 75 por ciento de desechos de los basureros o vertederos para el ano 2020. La Ley exige a empresas, incluyendo agencias locales y estatales con comercios que generan cierta cantidad de desechos organicos por semana, que tengan programas de reciclaje de residuos organicos a partir o a no mas tardar del lro. De Abril de 2016. Los desechos organicos incluyen desechos alimenticios, residuos verdes, residuos de jardineria y de podar, residuos de lefia que no sea peligrosa y papel que este ensuciado por comida. La Propuesta de Ley 1826 ha puesto etapas para que las agencias tengan el programa empleado para poder cumplir con la ley. La Ciudad de Lodi no ha tenido ninguna empresa que califique hasta el lro. de Enero de 2019 cuando el limite fue reducido para que las agencias tengan un programa situado para acoplar a las empresas que generen 4 o mas yardas cubicas de desperdicios solidos por semana. Los clientes residenciales no serail afectados por estas nuevas tarifas. Bases para el Calculo de la Tarifa Propuesta Los ajustes anuales de tarifas propuestos para el agua y las aguas residuales se justifican en base a gastos estimados en el futuro que estan asociados con el mantenimiento y operacion continua, obligaciones de servicios de deuda, y necesidades de programa de capital, asi como el sustento de reserva financiera prudente. Los requisitos de las tarifas de ingresos para el agua y aguas residuales fueron determinados de acuerdo a planes fmanciales desarrollados como parte de un estudio de tazas para el agua y aguas residuales. El Water and Wastewater Rate Study (Estudio de Tarifas para el Agua y Aguas Residuales), preparado por The Reed Group, Inc. esta disponible en el sitio web www.lodi.gov o en el mostrador del Departamento de Obras Publicas en el Ayuntamiento durante las horas normales de trabajo. La razon fundamental y el Calculo de la tarifa temporal de recargos debido a la escasez de agua, tambien se describen en el Estudio de Tasas. La propuesta de ajustes anuales de tarifas acordadas para los desechos solidos estan basadas en el contrato de franquicia que existe entre La Ciudad de Lodi y Waste Management para la recoleccion de Residuos Solidos. Conclusion Si tiene preguntas sobre este aviso, por favor llame al Departamento de Obras Publicas al (209)333-6706 entre las 7:30 a.m. y 5:30 p.m., de Lunes a Jueves, y de 8:00 a.m. a 5:00 p.m. los Viernes. El Ayuntamiento esta cerrado cada otro viernes. JENNIFER M. FERRAIOLO, Actuaria Municipal Ciudad de Lodi Ciudad de Lodi Lista de Tarifas Actuales y Propuestas Maximas para el Agua Actual (1) Abril 2019 (2) Enero 2020(3) Enero 2021 (1) Enero 2022(3) Enero 2023(3) Ajuste de Tarifa 2.9% 3.0% -8.4% 3.0% 3.0% Tarifas Fijas para el Agua Mensuales (Sin Medir) Residencias Unifamiliares 1 Recamara $32.84 $33.79 $34.80 $31.88 $32.84 $33.83 _ 2 Recamaras $39.44 $40.58 $41.80 $38.29 $39.44 $40.62 3 Recamaras $47.27 $48.64 $50.10 $45.89 $47.27 $48.69 4 Recamaras $56.79 $58.44 $60.19 $55.14 $56.79 $58.49 5 Recamaras $68.11 $70.09 $72.19 $66.13 $68.11 $70.15 Viviendas Multifamiliares _ 1 Recamara $28.19 $29.01 r $29.88 $27.37 $28.19 $29.04 2 Recamaras $33.81 $34.79 $35.83 $32.82_ $33.80 $34.81 3 Recamaras $40.58 $41.76 $43.01 $39.40 $40.58 $41.80 4 Recamaras $48.68 $50.09 $51.59 $47.26 $48.68 $50.14 No-Residenciales De acuerdo a ESFU $39.44 $40.58 $41.80 $38.29 $39.44 $40.62 Costos de Servicio Mensuales (Con Medidor) Hasta'/4" metro $21.87 $22.50 $23.18 $21.23 $21.87 $22.53 1" metro $34.34 $35.34 $36.40 $33.34 $34.34 $35.37 1 'A" metro $65.25 $67.14 $69.15 $63.34 $65.24 $67.20 2" metro $102.52 $105.49 $108.65 $99.53 $102.52 $105.60 3" metro $189.50 $195.00 $200.85 $183.98 $189.50 $195.19 4" metro $313.73 $322.83 $332.51 $304.53 $313.73 $323.14 6" metro $624.03 $642.13 $661.39 $605.85 $624.03 $642.75 8" metro $996.55 $1025.45 $1056.21 $967.52 $996.55 $1026.45 10" metro $1431.26 $1472.77 $1516.95 $1389.57 $1431.26 $1474.20 Tarifas de Consumo de Agua (Con Medidor) --$/CCF Residencias Unifamiliares Nivel 1(0-10CCF) $0.97 $1.00 $1.03 $0.94 $0.97 $1.00 Nivel2(11-50CCF) $1.29 $1.33 $1.37 $1.25 $1.29 $1.33 Nive13(>50CCF) $1.60 $1.65 $1.70 $1.56 $1.61 $1.66 Multifamiliares $1.15 $1.18 $1.22 $1.12 $1.15- $1.18 No-Residenciales $1.15 $1.18 $1.22 $1.12 $1.15 $1.18 Notal: (1) Las tarifas del agua fueron ajustadas en el 2017 basado en la Resoluci6n 2017-23, cual incluye una tasa de reducci6n en Enero 2021 para las tarifas de agua que entraron en vigor en el 2016 (2) El Cambio anual en el ENR 20-Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018) (3) Los ajustes calculados basados en el cambio anual en el indice ENR cada 30 de Septiembre, es sujeto a un limite de 3.0% Ciudad de Lodi Lista de Tarifas Actuales y Propuestas Maximas para las Aguas Residuales Actual (1) Julio 2019 (2) Julio 2020(3) Julio 2021 (3) Julio 2022(3) Julio 2023(3) Ajuste de Tarifa- 2.9% 3.0% 3.0% 3.0% 3.0% Tarifas fijas para el Agua Mensuales (Sin Medir) Residencias Unifamiliares y Viviendas Residenciales Multi fain Mares 1 Recamara $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 2 Recamaras $37.20 $38.28 $39.43 $40.61 $41.83 $43.08 3 Recamaras $46.49 $47.84 $49.28 $50.76 $52.28 $53.85 4 Recamaras _ $55.79 $57.41 $59.13 $60.90 $62.73 $64.61 5 Recamaras $65.09 $66.98 $68.99 $71.06 $73.19 $75.39 Casas Rodantes Cualquier Tamafto $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 Escuelas De acuerdo a SSU (18 estudiantes=lSSU $27.90 $28.71 $29.57 $30.46 $31.37 $32.31 No-Residenciales De acuerdo a ESFU $37.20 $38.28 $39.43 $40.61 $41.83 $43.08 Costos de Servicio Mensuales (Con Medidor) Rasta 34" metro $25.40 $26.14 $26.92 $27.73 $28.56 $29.42 1" metro $40.92 $42.11 $43.37 $44.67 $46.01 $47.39 1 '/2" metro $79.06 $81.35 $83.79 $86.30 $88.89 $91.56 2" metro $124.33 $127.94 $131.78 $135.73 $139.80 $143.99 3" metro $232.29 $239.03 $246.20 $253.59 $261.20 $269.04 4" metro $385.52 $396.70 $408.60 $420.86 $433.49 $446.49 6" metro $768.28 $790.56 $814.28 $838.71 $863.87 $889.79 8" metro $1227.76 $1263.37 $1301.27 $1340.31 $1380.52 $1421.94 Tarifas de Utilizacion Todos los Clientes, Salvo Tarifa de Uso($/CCF de Aguas Residuales (Con Medidor) de Alta Potencia Del use de agua) $2,89 $2,97 f $3.06 $3.15 ` $3.24 $3.34 Consumidores de Alta Potencia Caudal(anualmente por MG) $3730.00 $3838.17 $3953.32 $4071.92 $4194.08 $4319.90 BOD (anualmente por 1,000 lbs.) $616.00 $633.86 $652.88 $672.47 $692.64 $713.42 _ SS(anualmente por 1,000 lbs.) $385.00 _ $396.17 $408.06 $420.30 $432.91 $445.90 Notas: (1) Las tarifas de las Aguas Residuales la Ultima vez que fueron ajustadas fue en el 2016 basado en la Resolucion 2016-109. (2) El Cambio anual en el ENR 20-Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018) (3) Los aiustes calculados basados en el cambio anual en el indice ENR cada 30 de Abril, es sujeto a un lfmite de 3.0% Ciudad de Lodi Lista de las Tarifas Temporales Propuestas debido a la Escasez de Agua Condieiones de Abnstecimiento Normales Posible Escasez (voluutariamentc) Escasez Leve (Ohligatorio) Escasez Moderada (Obligatorio) Escasez Severa (Obligatorio) Escasez Critica (Obligatorio) Meta de Consumo Reducido Nada 5% al 10% 10% al 20% 20% al 30% 30% al 50% >50% Recargo Temporal debido a la escasez de Agua (2) Nada Nada 5% 10% 15% 20% Costos de Servicio Mensuales Hasta'/4" metro $22.50 1" metro $35.34 No hay cambios a los cobros por los servicios 1 '/z" metro $67.14 2" metro $105.49 3" metro $195.00 4" metro $322.83 6" metro $642.13 8" metro $1025.45 10" metro $1472.77 Tarifas de Consumo de Agua ($/CCF)(3) Residencias Unifamiliares Nivel 1(0-10CCF) $1.00 $1.00 $1.05 $1.10 $1.15 $1.20 Nivel 2(11-50CCF) $1.33 $1.33 $1.40 $1.46 $1.53 $1.60 Nivel 3(>50CCF) $1.65 $1.65 $1.73 $1.82 $1.90 $1.98 Multifamiliares $1.18 $1.18 $1.24 $1.30 $1.36 $1.42 No-Residenciales $1.18 $1.18 $1.24 $1.30 $1.36 $1.42 Notas: (1) Los porcentajes de las tarifas de recargos debido a la escasez de agua que se demuestran aplicadas a la propuesta de tarifas para el consumo del agua para Abril 2019, son para prop6sitos ilustrativos. Los porcentajes se aplicaran a cualquier tarifa de consumo de agua que este vigente en esa fecha, cuando el Consejo Municipal declare la implementacion de escasez de agua. (2) La tarifa de recargo temporal debido a la escasez de agua sera un aumento incremental (porcentaje) en las tarifas del consumo de agua, pero no serail aplicadas a los cobros de servicio mensuales o a ninguna tarifa fija para los clientes sin medidor. (3) La tarifa para el consumo de agua que se demuestran para las situaciones de escasez de Nivel Leve a Nivel Critico incorporan las tarifas de recargo debido a la escasez de agua. TamarHo de recipiente 35g. 35g 64g 64g Tarifas Propuestas—Recolecci5n Orgdnica Comercial y Serviclos de Procesamiento Frecuencia lx Semana por recipiente 2x Semana por recipiente 1x Semana por recipiente 2x Semana por recipiente -Disponible para clientes con 4+botes -Disponible para clientes con 4+botes Tarifa Mensual $46.60 $93.19 $70.11 $140.22 Contaminacl6n $100 por cada hecho $100 por cada hecho $100 por cada hecho $100 por cada hecho ,pa---' ' UNITED STATES TES POSTAL SERVICE Dashboard n Display Mailing Group ID: Preparer: Description: Restricted Information Mailing Group Summary Information 233308498 Mailer's Job #: --PRESORT CENTER OF FRESNO, LLC (PCF) PO of Mailing Finance No: Stockton Lodi 012919 Submission Type: HOME I HELP 1 CUSTOMER CARE I SIGN OUT Today's Date: 02/01/2019 00008815 Open Date: 052886 Close Date: Mail.dat 02-01-2019 PS # 330923270, UPD Cancel 1 Confirmation Page 1 Register 1 Piece -Weight Information PS Form 3602-R - USPS Marketing Mail - Permit Imprint Postage Summary Account Floltlar - Account Number: Permit: Statement FS Fee Waiver %. Post Office Of Mailing: Post Office of Permit: Mailer Declared Weight of Single Piece: USPS Determined Weight of Single Piece: Segue ndrig Date. No of Containers: PRESORT CENTER OF FRESNO. LLC (PCF) Mailing 496 S URUAPAN WAY Agent: DINUBA, CA 93618 -2719 Contact: RANJIV PUREWAL (559) 999 - 8500 ran(ivpurewaI©att.net 40640 Permit imprint 398 CRID: 18983146 98.87% FRESNO CA 93706-9998 FRESNO CA 93706-9998 0.1116 lbs ' 0.1116 lbs. 102/01/2019 PRESORT CENTER OF FRESNO. LLC (PCF) Mail Owner 496 5 URUAPAN WAY ©INUBA, CA 93618-2719 Planned CITY OF LODI PO BOX 3006 LOD1, CA 95241 -1910 ProcessingLetters Category: CR(O: 18983148 CRID: 4025087 Mailers 02/01 /2019 Mailing Date: Mailer Declared 30,996 pcs. _ 7olel Pieces: .USPS Determined 30,996 pcs. Total Pieces: Address Matching pate 'Automation: 01/29/2019 ' 1' MM Trays • 2' MM Trays 2' EMM Trays .Flat Trays 237 Customer Reference ID.: City of Lodi Move Update Method: . NCOALink Political Mall: NO. Mailpiece is a product eempru: NO ... r lncuntiveIDlscauni Claimed: NO :AS Testing Claimed: NO Mall Arrival Dale aril Container Grouping ID: Copal Mailing Type: SSF TIP Number: Part A: Automation Letters Line Number Entry Discount Al A2 A3 AB A9 Al 0 NONE NONE NONE DSCF Part B: Nonautomation Letters Line Number Entry Discount B1 NONE Title 5 -Digit MDC Mixed AADC AADC DISPLAY ONLY Letters - Number of Pieces that Comply Sacks ;NSA: _ NO Official Election Mall: NO Mailpieces contain a Oi/DIC0 or other 01 Type of Fee NIA r Payment Dale and Time: N/A Description Letters 3.5 oz (0.2188 lbs) or less Letters 3.5 oz (0.2188 lbs) or less Letters 3.5 oz (0.2188 lbs) or less Letters 3.5 oz (0.2188 lbs) or less Full Service Intelligent Mail Option Title Description Machinable Letters 3.5 oz (0.2188 lbs) or less AADC Price Quantity 0.256 2071 pcs. 0.281 1530pcs. 0.291 442pcs. 0.253 17pcs. 0.003 4060pcs. Price Quantity 0.292 321 pcs. Mahar Dadared 3,459.1536 lbs. Total Weighs: USPS Dalermined Total Weight. Tela) . .. ... Postage: Address Matd'iing .01/29/2019 Dale - Carrier. Routs:. _I. 3,459.1536 lbs. $ 6,205.37 !Pallets :Other J.. J ..J Subtotal FS Discount Discount Fee Total Postage Postage Total' $ 530.1760 $ 6.2130 $ -6.2130 $ 0.0000 $ 523.9630 $ 429.9300 $ 4.5900 $ -4.5900 $ 0.0000 $ 425.3400 $ 128.6220 $ 1.3260 $ -1.3260 $ 0.0000 $ 127.2960 $ 4.3010 $ 0.0510 $ -0.0510 $ 0.0000 $ 4.2500 Part A Total (Add lines Al -A8) $ 1,080.8490 Subtotal FS Discount Discount Fee Total Postage Postage Total $ 93.7320 $ 0.0000 $ 0.0000 $ 0.0000 $ 93.7320 B2 NONE Mixed AADC B28 Part C: Carrier Route Letters Line Number Entry Discount C1 C2 C3 C4 C46 C47 NONE NONE NONE NONE Title Saturation High Density Plus High Density Basic DISPLAY ONLY Letters - Number of Pieces that Comply For Extra Services and Other Fees Machinable Letters 3.5 oz (0.2188 lbs) or less Description (Automation) Letters 3.5 oz. (0.2188 lbs.) or less (Automation) Letters 3.5 oz. (0.2188 lbs.) or less (Automation) Letters 3.5 oz. (0.2188 lbs.) or less (Automation) Letters 3.5 oz. (0.2188 lbs.) or less Full Service Intelligent Mail Option 0.302 28pcs. $ 8.4560 $ 0.0000 $ 0.0000 $ 0.0000 $ 8.4560 Part B Total (Add lines B1 -B27) $ 102.1680 Price 0.190 0.200 0.209 0.294 Quantity 23652pcs. 2117pcs. 655pcs. 163pcs. 0.003 26587pcs. Subtotal FS Discount Postage Discount Total' Fee Total Postage $ 4,493.8800 $ 70.9560 $ -70.9560 $ 0.0000 $ 4,422.9240 $ 423.4000 $ 6.3510 $ -6.3510 $ 0.0000 $ 417.0490 $ 136.8950 $ 1.9650 $ -1.9650 $ 0.0000 $ 134.9300 $ 47.9220 $ 0.4890 $ -0.4890 $ 0.0000 $ 47.4330 Part C Total (Add lines C1 -C45) $ 5,022.3360 Total Full Service Discount From All Parts $ -91.9410 Total Postage From All Parts Total From Attached Form 3540-S Total Postage Total Incentive/Discount Claimed $ - 91.9410 " May contain both Full Service Intelligent Mail and other discount- see Instructions page for additional information. $ 6,205.3730 N/A $ 6,205.37 USPS Use Only Perform Verification: Verification data not available at this time, One Pass/Two Pass Verification Received: Error Percentage: ' Additional Postage: $ 0.00 AIR/C: Cost Avoidance: Verifying Employee's Name: Total Additional Postage: $ 0.00 Number of Reworked Pieces: LEGAL Privacy Policy > Terms of Use > FOIA No FEAR Act EEO Data > ON USPS.COM Government Services ) Buy Stamps & Shop > Print a Label with Postage > Customer Service ) Site Index > Copyright© 2019 USPS. 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