HomeMy WebLinkAboutAgenda Packet - Community Advisory Commission - 12/10/2020COMMUNITY ADVISORY COMMISSION MEETING
December 10, 2020 - 6:00 PM31111 Greenspot Road, Highland, CA 92346
In an effort to prevent the spread of COVID-19 and in accordance with Governor Newsom's Executive
Order N-25-20 and N-29-20, this meeting is being conducted via teleconference. There will be no public
location for attending this meeting in person. Members of the public may listen and provide public
comment telephonically.
Anyone wishing to join the meeting may do so using the following information:
DIAL: 1-209-425-5876 and enter CONFERENCE ID: 777 222 501#
You may also join by clicking HERE to join the meeting via Microsoft Teams.
AGENDA
CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL OF COMMISSION MEMBERS
PUBLIC COMMENTS
Any person wishing to speak to the Board of Commissioners is asked to complete a Speaker Card and
submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to three (3)
minutes, unless waived by the Chairman of the Commission. Under the State of California Brown Act,
the Board of Commissioners is prohibited from discussing or taking action on any item not listed on the
posted agenda. The matter will automatically be referred to staff for an appropriate response or action
and may appear on the agenda at a future meeting.
DISCUSSION/INFORMA TIONAL ITEMS
1.Water and Wastewater Rate Update
2.Commissioner Comments
3.Staff's Comments
ADJOURN
Pursuant to Government Code Section 54954.2(a), any request for a disability-related modification or
accommodation, including auxiliary aids or services, that is sought in order to participate in the above-
agendized public meeting should be directed to the District Clerk at (909) 885-4900 at least 72 hours
prior to said meeting.
BOARD AGENDA STAFF REPORT
Agenda Item #1.
Meeting Date: December 10, 2020
To: Commission Members
From: Director of Strategic Services
Subject: Water and Wastewater Rate Update
RECOMMENDATION:
This item is for information only.
BACKGROUND / ANALYSIS:
Water district's, like other rate setting organizations in the State of California, are required to conduct a Cost of
Service Analysis at least every five years to evaluate the rates charged to customers. The results of this study
are used to develop recommendations for the Governing Board to consider for adoption at a public hearing
conducted pursuant to Article XIID of the California Constitution.
A key element of consideration identified within the Cost of Service Analysis includes the continued need for
infrastructure investments as part of a sustainable preventative maintenance program. This on-going
commitment to the water supply system is essential to avoiding added costs resulting from deferred
maintenance. The District is responsible for maintaining rates that meet the needs of providing services to the
public.
A hearing had been originally scheduled for April 8, 2020. Due to the Stay-at-Home order of the COVID-19
pandemic, the District postponed the hearing for a later date. Given the available technology and increased level
of comfort of virtual interactions as a means to encourage public engagement, the District is looking to
schedule a public hearing in early 2021. Staff will recommend that the hearing include water, wastewater
conveyance, and wastewater treatment rates.
Currently, the District contracts with the San Bernardino Municipal Water Department (City) for wastewater
treatment services. Once the Sterling Natural Resource Center is fully permitted and operational that treatment
process will be handled internally by East Valley Water District staff. This transition will also trigger the
replacement of fees transferred to the City with fees retained by the District.
Rate setting is a key process to maintaining a fiscally sound organization. This structure lays the foundation for
revenues for the next five years and addresses the capital investments and on-going operational costs. The
District embraces the transparency measures outlined in the California Constitution and will conduct outreach to
the community, should the Governing Board schedule a public hearing date. In addition to all property owners
and residents receiving a printed notification, information regarding the potential rate change will be available on
the District’s website. Given the high degree of technical analysis involved in the rate development process,
staff will be available by phone to answer questions from the community.
The District has been working with IB Financial Consultants to conduct a cost of service analysis for the
for the District rates. They will give a presentation to discuss their work and the rates they will propose to the
District Board of Directors at a Board meeting in January.
AGENCY GOALS AND OBJECTIVES:
Goal and Objectives II - Maintain a Commitment to Sustainability, Transparency, and Accountability
a) Practice Transparent and Accountable Fiscal Management
d) Provide Quality Information to Encourage Community Engagement
FISCAL IMPACT
There is no fiscal impact associated with this agenda item.
Respectfully submitted:
Kelly Malloy
Director of Strategic Services
East Valley
Water District
Sewer Rate Study
December 10, 2020
Study Goals
Develop long-term financial plan with new Treatment
Plant
Reconstruct rates to reflect District’s characteristics and
move away from San Bernardino Treatment Rates
Ensure rate are equitable and meet industry standards
while complying with Proposition 218
Support District through rate adoption and prepare
comprehensive report
Main Objectives
2
Financial Position Outlook
Current Position
3
Results from Review
New capital improvement plan includes:
Increased reinvestment in the collection system from $200k up to $500k
Set aside funding for Treatment Plant of $500k annually
SNRC Treatment Plant generates new revenue
New revenue streams include Onsite Power Offsets and Hauler Tipping Fees
Recycled water revenue and GW basin replenishment credits
Reserves are currently healthy, but will be depleted from increased
system reinvestment
Financial Plan Summary
Factors Impacting the Financial Plan
4
Current Financial Position
Sewer Enterprise
5
Financial Plan Metrics
Generate positive annual
operating net income
Comply with debt covenants
Sufficiently fund capital needs
Meet reserve targets based on
policies
Treatment Plant online:
Expenses
New Revenues
$500k for Collection R&R
$500k for Treatment Plant
•Starting in FY 2027
Proposed Financial Plan
5-Year Planning Period
6
Proposed Financial Plan
Positive annual operating net
income
Adjust revenue starting
as early as FY 2022 prior
to opening of SNRC
Fund capital needs while
maintaining prudent reserves
Meet reserve targets
Revenue
Requirements
with SNRC
Wastewater Enterprise
7
Treatment Plant -$10.2M
Collection -$3.9M
Debt -$7.1M
Revenue Offsets -$7.6M
Rate Revenue -$14.7M
8
Cost of Service
Cost Components for Rate Development
BOD TSSCollectio
n
Fixed
Treatmen
t Fixed
$3,520,169 $4,399,747
Units of Service
Accounts/Units
365,916
Units of Service
Accounts/Units
365,916
$1,617,227 $1,860,500
Units of Service
Flow / Water Usage
3,021,137
Units of Service
Flow
2,830,745
$1,669,679 $1,669,679
Units of Service
Weighted TSS
438,848
Treatme
nt Flow
Collecti
on Flow
Units of Service
Weighted BOD
453,876
9
Adjustments to Rate Design
Wastewater Rate Structure
Restructuring
Multi-Family Residential (MFR) customers should be charged per
dwelling unit and not per master account for fixed charges
Flows from SFR and MFR are similar and can be projected on a per capita basis
(just like indoor water budgets)
San Bernardino Treatment Rates include 13 different customer classes
Restructuring includes 3 Non-Residential customer classes for Treatment
Low Strength, Medium Strength, High Strength
Provides more flexibility to District to assign future users / customers based on
strength characteristics as opposed to a specific land use
Fixed Charges
Collection and Treatment
10
Collection Fixed Component - Unit Rate
Revenue Requirement $3,520,169
÷ Units 365,916
Monthly Unit Rate $9.63
Treatment Fixed Component - Unit Rate
Revenue Requirement $4,399,747
÷ Units 365,916
Monthly Unit Rate $ 12.0 3
Variable Components
11
Collection Variable
Collection Variable Com ponent - Unit Rate
Revenue Requirement $1,617,227
÷ Projected Water Usage 3,021,137
Unit Rate $0 .54
Custom er Class
Projected
Water Usage % Allocation Revenue
Requirement
Single-Fam ily 1,637,950 54.22%$876,801
Multi-Fam ily 692,177 22.91%$370,525
Patton 100,341 3.32%$53,713
Non-Res - Low Strength 394,185 13.05%$ 211,0 0 9
Non-Res - Med Strength 62,097 2.0 6%$33,241
Non-Res - High Strength 134,387 4.45%$71,938
Total 3,021,137 100%$1,617,227
Variable Components
12
Treatment Variable -Flow
Custom er Class Projected Flow % Allocation Revenue
Requirement
Single-Fam ily 1,637,950 57.86%$1,076,538
Multi-Fam ily 692,177 24.45%$454,932
Patton 100,341 3.54%$65,949
Non-Res - Low Strength 243,090 8.59%$159,770
Non-Res - Med Strength 49,678 1.75%$32,650
Non-Res - High Strength 10 7,510 3.80 %$70,660
Total 2,830,745 100%$1,860,500
Variable Components
13
Treatment -BOD and TSS
Custom er Class Weighted BOD % Allocation Revenue
Requirement
Single-Fam ily 245,054 53.99%$901,482
Multi-Fam ily 103,557 22.82%$380,955
Patton 14,468 3.19 %$53,223
Non-Res - Low Strength 20 ,9 12 4.61%$76,929
Non-Res - Med Strength 9,569 2.11%$35,202
Non-Res - High Strength 6 0 ,317 13.29%$221,889
Total 453,876 100%$1,669,679
Custom er Class Weighted TSS % Allocation Revenue
Requirement
Single-Fam ily 245,054 55.84%$932,352
Multi-Fam ily 103,557 23.60%$394,000
Patton 15,200 3.46%$57,830
Non-Res - Low Strength 20,003 4.56%$76,104
Non-Res - Med Strength 6,782 1.55%$25,803
Non-Res - High Strength 48,254 11.0 0 %$183,589
Total 438,848 100%$1,669,679
Proposed Wastewater Rates
14
Residential
SFR Current = $36.91
Difference = +$1.15
Custom er Class Annual Units Collection
(Fixed + Variable)
Treatment
(Fixed + Flow + BOD
+ TSS)
Total Proposed
Residential Charge
Residential
Single-Fam ily 230,748 $3,096,633 $5,684,869 $38.06
Multi-Fam ily 127,848 $1,600,443 $2,767,121 $34.17
Proposed Wastewater Rates
15
Non-Residential
Custom er Class
Treatment
Fixed
Collection
Fixed
Collection
Variable
Treatment
Variable
(Flow + BOD + TSS)
Non-Residential
Patton $144 $ 115 $53,713 $177,001
Non-Res - Low Strength $67,671 $54,142 $ 211,0 0 9 $312,804
Non-Res - Med Strength $10,244 $8,196 $33,241 $93,655
Non-Res - High Strength $9,956 $7,965 $71,938 $476,138
Custom er Class
Proposed
Non-Residential
Treatment Fixed
Proposed
Collection
Fixed
Proposed
Collection
Variable Rate
Proposed
Treatment
Variable
Rate
Non-Residential Monthly Monthly Per HCF Per HCF
Patton $ 12.0 3 $9.63 $0 .54 $ 1.77
Non-Res - Low Strength $ 12.0 3 $9.63 $0 .54 $0.80
Non-Res - Med Strength $ 12.0 3 $9.63 $0 .54 $ 1.51
Non-Res - High Strength $ 12.0 3 $9.63 $0 .54 $3.55
Revenue Requirement
Charges / Rates
Wastewater Cost of Service Comparison
Existing vs Proposed
16
Exiting Rate too low
compared to cost of
providing service
Custom er Class
Accounts /
Units
Water
Usage (hcf)Existing FY 2023 Difference
Residential
Single-Fam ily Residential 230,748 $8,393,030 $7,833,895 ($559,135)
Multi-Fam ily Residential 464 1,294,860 $2,725,993 $3,967,123 $ 1,24 1,130
Non-Residential
Patton 12 100,341 $235,542 $173,849 ($61,693)
Low Strength 5,628 394,185 $1,0 25,80 6 $464,843 ($560,963)
Medium Strength 852 62,097 $146,967 $113,463 ($33,505)
High Strength 828 134,387 $520,846 $497,696 ($23,150)
Wastewater Revenue Requirement Comparison
Existing vs Proposed with Revenue Adjustment
17
Exiting Rate too low
compared to cost of
providing service
Wastewater Rates -Collection
5 Year Rate Schedule
18
Custom er Class FY 2023 FY 2024 FY 2025
Single-Fam ily Residential $13.42 $ 14 .10 $14.81
Multi-Fam ily Residential $12.52 $ 13.15 $13.81
Non-Residential / Com m ercial $9.63 $ 10 .12 $10.63
Non-Residential / Com m ercial
Patton $0 .54 $0 .57 $0.60
Low Strength $0 .54 $0 .57 $0.60
Medium Strength $0 .54 $0 .57 $0.60
High Strength $0 .54 $0 .57 $0.60
Wastewater Rates -Treatment
5 Year Rate Schedule
19
Custom er Class FY 2023 FY 2024 FY 2025
Single-Fam ily Residential $24.64 $25.88 $27.18
Multi-Fam ily Residential $21.65 $22.74 $23.88
Non-Residential / Com m ercial $ 12.0 3 $12.64 $13.28
Non-Residential / Com m ercial
Patton $ 1.77 $1.86 $1.96
Low Strength $0.80 $0.84 $0.89
Medium Strength $ 1.51 $ 1.59 $1.67
High Strength $3.55 $3.73 $3.92
Wastewater Rates –Combined Fixed Charges
5 Year Rate Schedule
20
Custom er Class FY 2023 FY 2024 FY 2025
Single-Fam ily Residential $38.06 $39.98 $41.99
Multi-Fam ily Residential $34.17 $35.89 $37.69
Non-Residential / Com m ercial $21.66 $22.76 $23.91
Thank You
Andrea Boehling
IB Consulting
Principal | Managing Partner
Phone: 615-870-9371 | Email:aboehling@IBConsultingInc.com
21
Habib Isaac
IB Consulting
Principal | Managing Partner
Phone: 951-595-9354 | Email:hisaac@IBConsultingInc.com