CC 2019-10-29_4 AG Rate Study Final Draft Report_PP PresentationWater, Wastewater, and Storm Water Rate Study
Presentation of Results
City of Arroyo Grande, California
Presented By: Clayton Tuckfield, PE MBA
Tuckfield & Associates
October 2019
1
Presentation Topics
Background and Issues
Purpose of Study
Water Sales Volumes
Upcoming Rate Legislation
Central Coast Blue Project
Water, Wastewater, Storm Water Rates
Customer Impacts
Timeline and Next Steps
2
Background
City engaged Tuckfield & Associates in January 2019 to perform Water, Wastewater, and Storm Water Rate Study (Study)
The Study develops rates to generate revenue to provide for ….
Operation and maintenance (O&M) expenses
Capital project needs
Cash reserve requirements at or greater than target levels
Meet or exceed debt service coverage ratios
The Study develops two water rate options for City Council discussion
With and without Central Coast Blue project
The Study develops Storm Water charges for first time implementation
3
Historical Water Sales Volume
Decrease in water sales volume from FY 2013-14 to FY 2016-17
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SB 606 and AB 1668
SWRCB/DWR to adopt long-term standards for efficient water use and establish standards for per capita indoor water use
Until Jan 1, 2025 establish indoor water use as 55 gpcd
Requires an urban retail water supplier to calculate an urban water use objective no later than November 1, 2023
Submit a report to the DWR for these purposes
Other requirements related to …
Urban Water Management Plan
Water Shortage Contingency Plan
Annual water supply and demand assessment
AG indoor water use = 2.39 pph * 55 gpcd / 748 * 365 / 6 = 10 HCF
5
Central Coast Blue Project
Central Coast Blue (CCB) is a regional recycled water sustainability project that will create a new, high-quality, and reliable water supply for the cities of Arroyo Grande, Grover Beach,
and Pismo Beach
Phase 1 - treat Pismo Beach’s WWTP effluent
Phase 2 - treat SSLOCSD WWTP effluent
CCB provides a new advanced water purification facility that will create a high-quality purified water source to supplement local water supplies
Injection wells create a seawater intrusion barrier to help protect the Santa Maria groundwater basin
The CCB project will allow the three cities to have sufficient water supplies even in times of a water shortage or drought
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Central Coast Blue Project
Total Phase 1 Project Cost is estimated at $38M
Arroyo Grande’s share of project cost, O&M, debt service is 39%
Annual O&M cost is estimated at $881K in FY 24-25
Annual debt service cost is estimated at $624K in FY 24-25
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Water System
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Water Financial Plan – 2 Options
[1] Rate increases for this year is January 20th.
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Water Revenue Increases
Without CCB project, revenue increases are necessary to ….
Cure the annual deficit over time
Move toward annual cash Target Reserve levels and replace cash used to meet past annual obligations
Meet the Debt Service Coverage Ratio required under the water supply agreement
With CCB project ….
Increases necessary to raise revenue to a high enough level to meet the additional O&M and debt service in FY 24-25
And meet the same criteria without CCB
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Water Rate Structure Changes
Single-family: Winter-water use has declined from 18 HCF per customer (last study) to about 10 HCF. Tier 2 peaking factor is the same as before but Tier 3 peaking factor has declined
from 3.0 to 2.0
Propose Tier 1 - 0 to 10 HCF; Tier 2 – 11 to 20 HCF, Tier 3 – All over Tier 2
Multifamily: About 90% of consumption is less than 10 HCF per dwelling unit. No consumption above 18 HCF per unit. Most MFR customers are individually metered and will capture indoor
use. Outdoor use will be captured by Irrigation meter.
Propose a uniform volume charge
All Other: Same uniform volume charge structure as before
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Monthly Fixed Charges
Bi-monthly Variable Charges
Proposed Rates With SFR and MFR Changes
Without Central Coast Blue
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Impact to SFR Water Bills
Without Central Coast Blue with 5/8-inch meter
88% of SFR meters are 5/8-inch
Average SFR customer will see an increase of $7.62 every two months, or $3.81 per month
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Water SFR Bi-Monthly Bill Survey Without Central Coast Blue, 5/8-inch meter using 16 HCF bi-monthly
For water rates in effect July 2019
With the increase, bill remains in middle range relative to other cities
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Monthly Fixed Charges
Bi-monthly Variable Charges
Proposed Rates With Central Coast Blue
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Impact to SFR Water Bills with Central Coast Blue
With 5/8-inch meter
Average SFR customer will see an increase of $10.65 every two months over current bill, or $5.33 per month
Difference in Average Single-family Residential Bi-monthly Bill without and with Central Coast Blue Project
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Water SFR Bi-Monthly Bill Survey With Central Coast Blue, 5/8-inch meter using 16 HCF bi-monthly
For water rates in effect July 2019
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Wastewater System
18
Wastewater Financial Plan
[1] Rate increases for this year is January 20th.
Irregular increases required to maintain fund balance above zero
19
Proposed Wastewater Rates
[1] Fixed charge per month per account and to each dwelling unit.
[2] Charged on the basis of water read through the meter.
20
Impacts to SFR Bi-monthly Wastewater Bill
Average SFR customer (5/8” meter using 16 HCF) will see an increase of $2.20 every two months, or $1.10 per month
21
Wastewater SFR Bi-Monthly Bill Survey
16 HCF Bi-monthly
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Storm Water System
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Storm Water System
Storm water costs are currently supported by Local Sales Tax Fund
There is increased storm water regulation from the State and costs are becoming significant
City has a Municipal Separate Storm Sewer System (MS4) permit with the Regional Water Quality Control Board
City must comply with regulations and requirements and report annually
SB 231, storm water rates may now be implemented and increased through Proposition 218 process like water and sewer rates
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Storm Water Revenue Requirements
There are 1.25 FTE’s for storm water function in FY 19-20 at cost of $206,250 annually
Other expenses include:
Personnel Transfer - $129,584
Software - $4,862
Sampling - $4,490
Maintenance review - $1,100
Spill response - $2,300
On-going support - $1,600
Annual O&M cost of about $351,000 for FY 19-20
Annual capital spending as stated in Capital Improvement Program
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Storm Water Financial Plan
Target Reserve equal to 90 days of O&M plus $230,000 for capital reserve built up over 10 years
Expenses paid by Local Sales Tax Fund this Year
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Basis for Storm Water Cost Recovery
Storm water runoff is generally related to land area and impervious area
Several fee structures may be employed
Flat fee per account
Flat fee per acre
Flat fee per square foot of Impervious Area measurement for each parcel
Study proposes an estimate of average Impervious Area per land use type
City has list of all parcels in City boundaries with zoning classification and sq. ft.
Municipal Code has maximum lot coverage for land use zoning
Can develop the maximum allowable impervious area based on land use zoning
Information is readily available
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Maximum Lot Coverage from Muni Code
Can use max lot coverage percentage to recognize variance in land use types for potential impervious area of parcels
City has list of all parcels within City limits
Apply max lot coverage percent to parcel by land use code to estimate impervious area
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Storm Water Rates
Propose use Max Lot Coverage method and place charges on county tax rolls
SFR Charge is $69.37 annually or $5.78 per month
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Other Storm Water Concerns
Annual Parcel Database Review
Some parcels may be developed, subdivided, or have change of use during year
County usually flags these and requests City to provide charge to be applied
Parcels not charged
Open Space and Agriculture have been excluded and not charged
Customers with Storm Water Retention/Detention Basins
City Engineer to estimate number of ERUs applicable to specific parcel
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Timeline and Next Steps
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Proposed Timeline and Next Steps
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Discussion
Water, Wastewater, and Storm Water Rate Study
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Impacts to MFR Water Bills
with ¾-inch meter
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Impacts to Commercial Water Bills
with 1” meter
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Impacts to Irrigation Water Bills
with 5/8-inch meter
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Cost Comparison of Water Supply
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