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75A - PH - WATER AND SEWER RATES
REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE:CLERK OF COUNCIL USE ONLY: NOVEMBER 19, 2019 APPROVED TITLE: As Recommended PUBLIC HEARING –RESOLUTION As Amended ADJUSTING CITY WATER AND SEWER st Ordinance on 1Reading nd RATES(NON-GENERAL FUND) Ordinance on 2Reading Implementing Resolution {STRATEGIC PLAN NO. 6,1H} Set Public Hearing For__________ CONTINUED TO /s/ Kristine Ridge FILE NUMBER CITY MANAGER RECOMMENDED ACTION Hold a public hearing and adopt a resolution adjusting the City water and sewer rates effective January 1, 2020; July 1, 2020; July 1, 2021; July 1, 2022; and July 1, 2023. DISCUSSION The City owns and operates a water distribution system and a sewer collection system that provides servicesto a community of nearly 350,000 residents and 5,000 businesses. The City water system consists of approximately 4 miles of mains, 10 reservoirs, 7 pumping stations, and 20 active wells. The City sewer system consists of 398 miles of main, 8,000 manholes, and 2 lift stations. On February 5, 2018, the City Council directed staff to perform a comprehensive rate study for both the water and sanitary sewer enterprises. A prior such study had beenperformed in 2014. On July 3, 2018, upon completion of a competitive bid process, the City awarded a contract to Stantec to develop a financial plan, cost of service, and rate structure analyses for water, recycled water, and sewer rates. The objectives of the study were to ensure the financial stability of both water and sewer enterprises,while ensuring that the rates are in compliance with applicablelaw (namely California’s Proposition 218 requirements). On October1, 2019, Council received the report (Exhibit 2) andauthorized staff to notify property owners of the proposed rate adjustments considered here. Capital Improvement Program The City’s Water Resources Divisionhas identified that both the water and sewer utilities need significant investment in the repair and rehabilitation of its aging infrastructure. The Water Enterprise has completed a Water Master Plan which identifies critical projects that will average nearly $15 million in annual capital spending for the next 20 years. Over the past 4 years the City has spent an average of almost$4 million annuallyon water-related CIP projects. The water and sewer systems are already showing signsof distress. In the past year alone the systems PUBLIC HEARING –Resolution Adjusting City Water and Sewer Rates November 19, 2019 Page 2 experienced 21 water main breaks, 173 water service leaks, 132 sewer laterals repaired, and 2 pump stations and 6 groundwater wells downed due to mechanical and/or electrical failures. While the Public WorksAgency has excelled in making cost-effective repairs and rehabilitations, continued deferral of capital project investment will eventually result in the complete failure and loss of critical assets. The proposed projects predominately focus on groundwater well improvements, pipe replacement, and a major Advanced Metering Infrastructure (AMI) Project. With this increase in capital spending, the Water Enterprise will require a higher level of staffing to manage the projects (as many as an additional 8 full-time positions). Planned capital spending for the Sewer Enterprise includes pipe replacement atarate of 4 miles of aging pipe per year,and the construction of a new $7 million pump station (which will be paid for with developer fees). This signifies an increase in average annual capital spending from under $1 million to over $6 million for the next 20 years. With this increase in capital spending, the Sewer Enterprise will require a higher level of staffing to manage the projects (as many as an additional 3 full-time positions). Financial Plan The rate study proposes to primarily cash finance the above re-investments in critical water and sewer infrastructure, with the exception of the AMI project. Cash financing is more appropriate to pay for average/typical capital spending levels. Cash financing avoids the cost of interest and ensures that a utility is not creating undue burdenon future ratepayers through the accumulation of debt. For the AMI Project, some grant funding has already been secured and additional debt financing is being sought. Debt financing is appropriate for one-time, large capital projects(such as the AMI Project) that are anomalies compared to normal capital spending levels. Debt financing in those cases allows the utility to avoid unnecessary “rate shock” and helps spread the cost of large projects over a longer period. It also ensures that future ratepayers who benefit from the project will also pay for the project. As part of the analysis, existing reserve levels were examined. Recommended reserves include an Operating & Maintenance Reserve target equal to 90days (3 months) of annual operating expenses;an Emergency Reserve set at$4 million (for both the Water and Sewer Enterprises); and a Repair, Renewal, and Replacement Capital Reserve equal to 50% of average annual projected capital spending. Rate Design Over the past decade the legal requirements surrounding utility rate setting in California have evolved. Namely the courts have made rulings with respect to California Constitution Article XIII C and D (commonly known as Proposition 218) that have created a higher “cost of service” standard for rate setting than has historically been practiced by public utilities. Simply put, the burden of proof is on utilities to demonstrate that all aspects of water and sewer rates are directly proportionate to the cost of providing service. This means aligning fixed revenue (fixed charges) with fixed costs, and variable revenue (usage rates) with variable costs. In addition, Stantec looked at opportunities to strengthen revenue stability for both utilities, which were found to rely too heavily on usage rates, making the utilities susceptible to revenue volatility. Currently, the City’s water PUBLIC HEARING –Resolution Adjusting City Water and Sewer Rates November 19, 2019 Page 3 utility recovers approximately 17% of revenues through the fixed base charge while the sewer utility collects approximately 13% through fixed charges. These rates were found to not be aligned with the utilities’ actual fixed costs, which were closer to 40% for the water utility and nearly 100% for the sewer utility. The proposed water rates are structured to directly align the water utility’s variable costs (i.e., water purchases and electricity) with the water usage rates (“Water Usage Charge”). By extension, the water utility’s fixed costs (i.e., salaries, capital spending, maintenance, and overhead) will be aligned with the fixed water charges (“Water Utility Charge”). Sewer rates (“Sewer Utility Charge”) are proposed to be fixed for all customers based on the size of their meter and the type of customer, since some customers (e.g., commercial accounts) return a larger percentage of their water to the sewer than others (e.g., single-family residences) which have higher irrigation needs. The Fats Oils andGrease (FOG) Charge for food service accounts will increase by 68% in order to better reflect the cost of the FOG Control Program. Establishment of ReserveTargets As the study identifies, the policy target for reserves is an important component when developing a multi-year financial plan,as utilities rely on the reserves for financial stability. Additionally, credit rating agencies evaluate utilities in part on their adherence to formally adopted reserve targets. The study expands on current reserve targets in place since 2014 and recommends the following reserve policies: 1)Operating and Maintenance Reserve with a target minimum balance equal to 90-days of annual operating expenses, 2)Emergency Reserve of $4 million for both water and sewer enterprises, 3)Repair, Renewal and Replacement (3R) Capital Reserve equal to 50% of the average annual capital spending over each enterprise’s 10-year capital spending projections. Typical Bill Impact The financial impact of the proposed revenue adjustments and rate structure changes on the typical customerwascarefullyevaluated. The overall increase in the combined typical bill of a single- family residential customer will be $4.92per month(based on the average 1,257 cubic feet of water used per monthby typical single-family residences). When compared to neighboring cities, the typical Santa Anacustomer will continue to pay a similar amount, on average, for water and sewer servicesas compared to itsneighboring cities such as Garden Grove, Brea, Fullerton and Orange. Public Hearing Notification As required by the provisions of Proposition 218, notices of a public hearing for adjusting water and sewer rates were mailed to all property owners within the City of Santa Ana water service area on or before October 5, 2019(Exhibits 3 and4). PUBLIC HEARING –Resolution Adjusting City Water and Sewer Rates November 19, 2019 Page 4 STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6–Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy H (complete water/waste water rate study to ensure adequate resources to capture critical long-term capital needs). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT The proposed rates are designed to meet the cost of service requirements of Proposition 218 and support the recommended Capital Improvement Project (CIP) plans and allow both water and sewer enterprises to meet their respective financial goals. Anet increase in water and sewer rate revenue as outlined in the table below is proposed: FY FY FY FY FY FY 2019/202020/212021/222022/232023/242024/25 Implementation January 1, July 1, July 1, July 1, July 1, July 1, Date 202020202021202220232024 Water Enterprise 7.0%7.0%6.5%2.0%2.0%2.0% Sewer Enterprise 3.0%5.0%9.0%9.0%9.0%9.0% The proposed ratesare estimatedto produce additional rate revenue as follows: FY FY FY FY FY FY 2019/202020/212021/222022/232023/242024/25 Implementation January 1, July 1, July 1, July 1, July 1, July 1, Date 202020202021202220232024 Water $1,956,660$4,275,948$4,290,710$1,420,291$1,463,102$1,507,491 Enterprise Sewer $103,842$362,069$691,153$760,890$837,664$922,184 Enterprise PUBLIC HEARING –Resolution Adjusting City Water and Sewer Rates November 19, 2019 Page 5 Water services revenues are received in the Public Works Water Revenue Fund (Accounting Unit 06017002-53712, 06017002-53714, 06017002-53735, and 06017002-54736) and sewer services revenues are received in the Sanitary Sewer Service Fund (Accounting Unit 05617002-53902). As projects are identified in future budgets and CIP plans, funds will be transferred to and expended from the respective enterprise capital improvement accounts (Nos. 06617647-66301 and 05417647-66220). APPROVED AS TO FUNDS AND ACCOUNTS: Fuad Sweiss, PE, PLSKathryn Downs, CPA Executive DirectorExecutive Director Public Works AgencyFinance and ManagementServices Agency FSS/NS/RR Exhibits:1.Resolution 2.Water and Sewer Rate Study 3.Proposition 218 Compliant Notice of Public Hearing 4.Notice of Rate Adjustment Proof of Mailing jmf 11/5/19 RESOLUTION NO. 2019-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ADJUSTING RATES FOR WATER AND SEWER SERVICES PROVIDED BY THE CITY OF SANTA ANA WHEREAS, Chapter 39 of the Santa Ana Municipal Code, Article ll, Sections 39- 19 and 39-36, authorize the City to set and charge fees for the provision of water and recycled water to customers within the City of Santa Ana and to establish those fees by resolution; and WHEREAS, Chapter 39 of the Santa Ana Municipal Code, Article III, Sections 39-55.1, 39-55.2, and 39-55.4, authorize the City to set and charge fees for the provision of sewer services to customers; and WHEREAS, this Resolution adjusting water, recycled water, and sewer service rates shall apply only to Chapter 39 of the Santa Ana Municipal Code, Water and Sewers; and WHEREAS, the City previously retained Stantec and Hildebrand Consulting, independent financial consultants, to review the City's water, recycled water, and sewer utilities to determine whether rates for service charges are sufficient to meet increased costs of service, and to prepare a cost of service analysis and rate study (the "Study'); and WHEREAS, based on the results of the Study (a copy of which is available for inspection at the City and was also posted on the City's website), increases to the rates for water, recycled water, and sewer service fees and charges are necessary; and WHEREAS, the proposed water rate structure includes a variable water usage charge and a fixed monthly water utility charge, both billed on a bimonthly basis. The proposed water usage charge is based on the amount of water consumed, measured in dollars per hundred cubic feet ("CCF") of water delivered to the property. The fixed monthly water utility charge is independent of the amount of water used and is determined based on the size of the meter serving the property, as measured in inches; and WHEREAS, the proposed water rate structure also includes a pass -through adjustment mechanism providing for increases to the water usage charge based on increases in the cost of purchasing potable and/or recycled wholesale water needed to supply the City's water system that may be imposed on the City by the Orange County Water District or the Metropolitan Water District; and WHEREAS, the proposed sewer utility charge is a fixed, monthly charge billed on a bimonthly basis, based on the size of the meter serving the property, as measured in inches; and Resolution No. 2019-XXX Page 1 of 5 EXHIBIT 1 jmf 11/5119 WHEREAS, the proposed rate structures are for a period of four and one-half years, and are proposed to take effect January 1, 2020, and to increase each July 1 thereafter commencing July 1, 2020, through and including July 1, 2023; and WHEREAS, the proposed potable water, recycled water, and sewer service fees (collectively, the "Fees") are property -related fees within the meaning of article XIII D of the California Constitution; and WHEREAS, the revenues derived from the Fees will not exceed the funds required to provide the services for which the Fees are imposed, and will be used exclusively for the operation and maintenance of the City's potable water, recycled water, and sewer systems; and WHEREAS, the Fees are equitable to all customer classes; and WHEREAS, the amount of the Fees will not exceed the proportional cost of the service attributable to each parcel upon which they are proposed for imposition; and WHEREAS, the Fees will not be imposed on a parcel unless the service for which such Fees are imposed, is actually used by, or immediately available to, the owner of the parcel; and WHEREAS, the Fees will not be imposed for general governmental purposes, but only for the costs of operation and maintenance of the City's potable water, recycled water, and sewer systems; and WHEREAS, article XIII D, section 6 of the California Constitution ("Article XIII D") requires that prior to imposing any increase to the Fees, the City shall provide written notice (the "Notice") by mail of the new or increased Fees to the record owner of each parcel upon which the Fees are proposed for imposition and any tenant directly liable for payment of the Fees, the amount of the Fees proposed to be imposed on each parcel, the basis upon which the Fees were calculated, the reason for the Fees, and the date time and location of a public hearing (the "Hearing") on the proposed Fees; and WHEREAS, on October 4, 2019, the City distributed notices as required by Article XIII D regarding the City Council's consideration of the proposed rate adjustments to the Fees at the November 19, 2019, public hearing to all owners of record and utility customers in accordance with Article XIII D, Section 6(a)(1) of the California Constitution and Government Code Section 53755; and WHEREAS, on November 19, 2019, the City Council held a duly noticed public hearing on the proposed Fees contained in this Resolution, and at that time invited oral and written comments from the public; and Resolution No. 2019-XXX Page 2 of 5 jmf 11/5/19 WHEREAS, upon close of said public hearing, the City did receive written protests to the proposed Fees and therefore there has been no majority protest; and WHEREAS, the City Council now desires to establish rates for the Fees, effective January 1, 2020, at the rates and subject to increases on the dates set forth in the schedules included as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Ana as follows: Section 1. The adoption of this Resolution falls within a statutory exemption from environmental review pursuant to sections 15273, 15060(c)(2) of the State Guidelines for Implementation of the California Environmental Quality Act (CEQA), which pertain to the establishment, modification, structuring, restructuring, or approval of rates and charges by public agencies which the public agency finds are for the purpose of meeting operating expenses, and pertain to activities that will not result in a direct or reasonably foreseeable indirect change to the environment and that are not defined as a project under CEQA Regulations. Section 2. After considering the material presented in the Study, the City Council hereby finds as follows: (a) Revenues derived from the Fees do not exceed the funds required to provide the property related service; (b) Revenues derived from the Fees shall not be used for any purpose other than for which the Fees or charges is imposed; (c) The amount of the Fees imposed upon any parcel or person does not exceed the proportional cost of service attributable to the parcel; (d) The Fees are imposed for services that are actually used by, or immediately available to, the owner of the property upon which the Fees are imposed; and (e) The Fees will not be imposed for general governmental purposes, but only for the costs of operation and maintenance of the City's potable water, recycled water, and sewer systems. Section 3. After receiving public comment and testimony on the new fee structure for water, sewer and recycled water services provided, and absent a majority protest to the proposed fee increases, the new fee schedule for water, sewer and recycled water fees and charges is hereby approved as set forth in Exhibit A attached hereto and incorporated herein by this reference. Section 4. The new fee schedule for water, sewer and recycled water services shall be implemented beginning January 1, 2020, and shall be increased on July 1, 2020 and annually thereafter, up to the maximum rates set forth in Exhibit A. The scheduled adjustments authorized by this Section may be made by the City Manager or Resolution No. 2019-XXX Page 3 of 5 jmf 11/5/19 designee, without conducting another public hearing or any action on the part of the City Council. Section 5. Pursuant to the City's pass -through policy, for Fiscal Years 2020- 2021 through 2023-2024, the water usage charge component of the water service rates may be further adjusted by the City in an amount equal to any increase in the cost of purchasing potable and/or recycled wholesale water needed to supply the City's water system that may be imposed on the City by the Orange County Water District or the Metropolitan Water District. The increase in rates may not exceed the cost of providing water service. The adjustments authorized by this Section may be made by the City Manager or designee, without conducting another public hearing or any action on the part of the City Council. However, the City shall provide written notice to all affected owners and customers of record not less than thirty (30) days prior to the effective date of the rate increase, pursuant to California Government Code Section 53756. Section 6. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. To the extent any other resolution of the City conflicts with the provisions set forth herein, it is the explicit intent of the City Council that the provisions of this Resolution shall supersede. ADOPTED this day of 2019. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: V AL A^- %11/. ohn M.Funk Assistant City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers Resolution No. 2019-XXX Page 4 of 5 jmf 11/5/19 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Daisy Gomez, Clerk of the Council, do hereby certify the attached Resolution No. 2019 - to be the original resolution adopted by the City Council of the City of Santa Ana on 2019. Date: Clerk of the Council City of Santa Ana Resolution No. 2019-XXX Page 5 of 5 EXHIBIT A Water Service Rates Water Usage Charge (dollars per hundred cubic feet Tier 1* $2.03 $2.17 $2.31 $2.36 $2.41 Tier 2** $4.79 $5.13 $5.46 $5.57 $5.68 Recycled Water $2.15 $2.30 $2.45 $2.50 $2.55 * See Tier 1 Water Allocation table below ** Tier 2 is any amount of water used over the amount allocated in Ter 1 Tier 1 Monthly Water Allocations (CCF) 5/8" X 3/4" 3/4" 1" 11/2" 10.50 16.00 26.00 52.50 31.00 46.50 77.50 155.00 8.5 per Dwelling Unit 2" 84.00 248.00 3" 184.00 542.50 4" 331.00 976.50 6" 682.50 2,015.00 8" 1,260.00 3,720.00 Water Utilitv Charge (bv meter 5/8" X 3/4" $20.51 $21.94 $23.37 $23.84 $24.31 3/4" $30.76 $32.91 $35.05 $35.75 $36.47 1" $51.27 $54.85 $58.42 $59.59 $60.78 1 1/2" $102.53 $109.70 $116.83 $119.17 $121.55 2" $164.04 $175.52 $186.93 $190.67 $194.48 3" $358.84 $383.96 $408.92 $417.10 $425.44 4" $645.91 $691.12 $736.04 $750.76 $765.78 6" $1,332.83 $1,426.12 $1,518.82 $1,549.20 $1,580.18 8" $2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 Monthly Sewer Utility Charge (by meter size) Residential 5/8" X 3/4" $5.60 $5.88 $6.41 $6.99 $7.62 3/4" $7.93 $8.33 $9.08 $9.90 $10.79 1" $12.59 $13.22 $14.41 $15.71 $17.12 1 1/2" $24.23 $25.44 $27.73 $30.23 $32.95 2" $38.20 $40.11 $43.72 $47.65 $51.94 3" $82.43 $86.55 $94.34 $102.83 $112.08 4" $147.62 $155.00 $168.95 $184.16 $200.73 6" $303.61 $318.79 $347.48 $378.75 $412.84 8" $559.71 $587.70 $640.59 $698.24 $761.08 10" $885.66 $929.94 $1,013.63 $1,104.86 $1,204.30 Multi -family Residential Effective Jan. Effective July Effective July Effective July Effective July Meter Size 1,2020 1,2020 5/8" X 3/4" $8.40 $8.82 $9.61 $10.47 $11.41 3/4" $12.12 $12.73 $13.88 $15.13 $16.49 1" $19.57 $20.55 $22.40 $24.42 $26.62 1 1/2" $38.20 $40.11 $43.72 $47.65 $51.94 2" $60.55 $63.58 $69.30 $75.54 $82.34 3" $131.32 $137.89 $150.30 $163.83 $178.57 4" $235.63 $247.41 $269.68 $293.95 $320.41 6" $485.21 $509.47 $555.32 $605.30 $659.78 8" $894.97 $939.72 $1,024.29 $1,116.48 $1,216.96 10" $1,416.49 $1,487.31 $1,621.17 $1,767.08 $1,926.12 Non -Residential 1,2021 1,2022 5/8" X 3/4" $9.33 $9.80 $10.68 $11.64 $12.69 3/4" $13.52 $14.20 $15.48 $16.87 $18.39 1" $21.90 $23.00 $25.07 $27.33 $29.79 1 1/2" $42.85 $44.99 $49.04 $53.45 $58.26 2" $68.00 $71.40 $77.83 $84.83 $92.46 3" $147.62 $155.00 $168.95 $184.16 $200.73 4" $264.96 $278.21 $303.25 $330.54 $360.29 6" $545.74 $573.03 $624.60 $680.81 $742.08 8" $1,006.73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 10" $1,593.43 $1,673.10 $1,823.68 $1,987.81 $2,166.71 FOG Customers $40.92 $42.97 $46.84 $51.06 $55.66 �i Stantec HIILSULTI ANC HL B City of Santa Ana, CA 2019 Water, Recycled Water, & Sewer Rate Study Report FINAL October 24, 2019 Stantec October 24, 2019 Mr. Nabil Saba Water Resource Manager City of Santa Ana Public Works Agency 220 S. Daisy Avenue, Santa Ana, CA 92703 Subject: 2019 Water, Recycled Water, and Sewer Rate Study HILDEBRAND CONS LT I NG Dear Mr. Saba, Stantec Consulting and Hildebrand Consulting are pleased to provide you with this final report of the findings for the 2019 Water, Recycled Water, and Sewer Rate Study (Study) that we completed for the City of Santa Ana (City). We appreciate the fine assistance provided by you and all of the members of the City staff who participated and contributed to the Study. If you or others at the City have any questions, please do not hesitate to call either point of contact, listed below: Mark Hildebrand Project Manager mhildebrand@hildco.com (510)316-0621 Matthew Freiberg Project Consultant matthew.freiberg@stantec.com (925) 286-7401 We appreciate the opportunity to be of service to the City of Santa Ana and look forward to the possibility of doing so again in the near future. Sincerely, IL AF1i7:ACi7.7i-1. 'iT:l Project Manager Enclosure Matthew Freiberg Project Consultant 2019 Water, Recycled Water, and Sewer Rate Study Executive Summary EXECUTIVE SUMMARY This Executive Summary presents an overview of the results of the 2019 Water, Recycled Water and Sewer Rate Study (Study) that was conducted for the City of Santa Ana ("City") by Stantec Consulting and Hildebrand Consulting. The primary objectives of this Study are to: i. Develop a multi -year financial management plan that provides for the City's Water and Sewer Enterprise capital funding needs, ii. Identify future rate adjustments to water, recycled water (included as part of the water enterprise fund), and sewer rates that will ensure adequate revenues to meet the respective enterprises' ongoing financial requirements, iii. Determine the cost of providing water, recycled water, and sewer service to customers using industry accepted methodologies, and iv. Recommend specific rate structures that equitably recover the cost of service while minimizing the financial impact to ratepayers and comporting with industry practices and legal requirements. The following describes the drivers that initiated the need for this Study, and a general description of the solutions that were used to address those challenges. Driver: The rate schedules adopted based upon the past 2014 rate study had a planning period that ended during this current fiscal year (2018/2019). Solution: Update the Water & Sewer Enterprise Fund financial plans and rates to meet the revenue needs over the next five years. Driver: The City has recently updated its Water and Sewer Master Plans which provide guidance for capital spending over the next planning period. Solution: Adopt a capital spending plan from the respective Master Plans that provides the enterprises with the needed level of service and maintains the utilities' assets in good working condition, and benefit rate payers by making timely re -investments in critical infrastructure. Driver: The legal environment in California over the past 5 years (namely Proposition 218) has significantly increased the burden of proof required of public utilities to demonstrate that the rates being charged for utility service are proportionate to the cost of providing the utility services. Solution: Conduct a full cost -of -service allocation analysis and make rate structure modification to ensure inter- and intra-class equity in rates charged to water, recycled water, and sewer customers. City of Santa Ana Stantec I ES-1 2019 Water, Recycled Water, and Sewer Rate Study Executive Summary This Study used methodologies that are aligned with industry standard practices for rate setting as promulgated by the American Water Works Association (AWWA), the Water Environment Federation (WEF), and all applicable law, including California Constitution Article XIII D, Section 6(b) (for water, recycled water, and sewer rates) commonly known as Proposition 218. This Study consisted of the following phases: 1. Revenue SufficiencyAnalysis (RSA) —The Study developed multi -year financial forecasting models for the City's Water and Sewer Enterprises to determine the level of annual rate revenue required to satisfy projected annual operating costs, debt service expenses, and capital cost requirements while maintaining adequate financial reserves. In the RSA, the Stantec team evaluated the financial requirements of each Enterprise over a 10-year projection period and made recommendations for rate revenue adjustments over a 5-year period. Input data and key assumptions were reviewed with City staff, and several alternative capital spending scenarios were evaluated by staff during the RSA. This process generated a recommended financial plan and corresponding annual rate increases. While our analysis provides 10-year rate revenue increases, it is recommended that they City conduct an updated analysis in the next 2 — 5 years, as many of the assumptions used in this analysis may change in this time period, which may result in over or under collection of revenues from customers. Like many utilities around the state and country, the City's water and sewer utilities are currently facing challenges of aging infrastructure. According to City Staff, the City's infrastructure is generally in good working condition, however, about 20% of the City's water distribution system has already exceeded the theoretical useful life (some of which date back to before the 1930s). This number is expected to jump to 70% by 2040 if no pipe replacements are made. In addition, many of the Water Enterprise's wells, pump stations, and reservoirs have reached the end of their useful service life. The City has completed Water and Sewer Master plans which both recommend a material increase in capital spending to address critical infrastructure repairs. As part of the RSA, multiple capital spending scenarios were considered to balance the need for infrastructure re -investment while limiting the financial impact to utility rate payers. The Study also made recommendation for targeted cash reserves, which is an important component of an enterprise's financial stability and maintaining a strong credit rating. Recommended reserves include an Operating & Maintenance Reserve target equal to 90-days (3 months) of annual operating expenses, an Emergency Reserve set a $4 million (for both the Water and Sewer Enterprises), and a Repair, Renewal, and Replacement (3R) Capital Reserve equal to 50% of average annual projected capital spending. The target levels of the above policies are consistent with 1) the Stantec team's industry experience for similar systems, 2) the findings of reserve studies conducted by the AWWA, and 3) a healthy level of reserves for a municipal utility system per the evaluation criteria published by the municipal utility rating agencies (e.g. Fitch, Moody's, and Standard & Poor's). Due to the different financial needs for the Water and Sewer Enterprises, respectively, this Study is recommending different rate increase schedules for each enterprise. As presented in Table ES-1, rate City of Santa Ana Stantec I ES-2 2019 Water, Recycled Water, and Sewer Rate Study Executive Summary increases are being recommended for the next five fiscal years for both enterprises, with the fiscal year (FY) 2019/20 increase scheduled for January 1, 2020, and all subsequent increases at the beginning of each respective fiscal year on July 1. Rate increases for recycled water will be tied to the proposed rate increases for the water enterprise. It is important to note that, while in Year 1 rate revenues across all customer classes will increase on average by 7.0% for the water utility and 3.0% for the sewer utility. However, the proposed rate structure adjustments (discussed further below) will result in single-family residential accounts with average water usage, experiencing an increase of $4.46 per month (or just under ten percent) in their water bill and a decrease of $1.51 per month (or just over twenty one percent) in their sewer bill. Results will vary among different customers due to the proposed rate structure adjustments. To be clear, due to the rate structure adjustments, some customers' bills will increase by more than the average rate revenue adjustment for Year 1, while other customers' bills will increase by less. Starting in Year 2 (FY 2020/21) and continuing thereafter, all customers will experience the same uniform percentage change to their bill. Table ES-1 Proposed Water & Sewer Enterprise Rate Revenue Increases 2. Cost -of -Service Analysis (COSA) — Using the revenue requirements from the RSA for FY 2019/20, the Stantec team performed a detailed COSA based upon principles outlined by the AWWA, WEF, and other generally accepted industry practices, in order to determine the proper distribution of costs and corresponding revenue requirements. The purpose of a COSA is to determine the cost of providing water and sewer service so that the revenue requirements of the utility may be equitably collected through rates. The Study employed methods promulgated in AWWA's Manual M1: Principles of Water Rates, Fees, and Charges (M1) for the water and recycled water rates and WEF's Financing and Charges for Wastewater Systems, Manual of Practice No. 27 for the sewer rates. The COSA included the following steps: ➢ Step 1: Allocate costs to the appropriate activities/functions ➢ Step 2: Allocate the costs assigned to each function to specific system parameters ➢ Step 3: Credit non -rate revenue as a reduction of assigned costs ➢ Step 4: Distribute resulting costs to customer classes City of Santa Ana Stantec I ES-3 2019 Water, Recycled Water, and Sewer Rate Study Executive Summary 3. Rate Structure Analysis —The Study developed specific rate schedules to recover the identified level of required rate revenue as identified by the COSA analysis from the appropriate customers. The recommended rate schedules were designed to: ➢ Fairly and equitably recover costs through rates, ➢ Conform to accepted industry practice and legal requirements, and ➢ Provide fiscal stability and recovery of fixed costs of the system. The existing water rates have a two-part structure comprised of a fixed service charge that is assessed based on meter size and a consumption -based rate (as measured in hundred cubic feet or "CCF") that is assessed based on the total amount of water that is used during the billing period. Additional details that describe the current rate structure are included in the full report. This Study recommends implementing the following changes to the existing water rate structure: 1. Update the meter equivalency schedule, 2. Establish four Customer Classes: Single Family, Multi -Family, Non -Residential, and Recycled Water, 3. Enhance the connection between water rates and the cost to provide water service by primarily recovering water supply costs through the Water Usage Charge as well as calculating the tiered rates based on the cost of the Water Utility's two sources of water supply, 4. Update the Tier 1 water allocation for each customer class to enhance the connection of water use in each tier to reflect the Water Enterprise's utilization of each source of supply, and 5. Update the Pass -Through Adjustment Policy, which updates Water Usage Charges based on actual changes to water supply costs. This Study recommends implementing the following changes to the existing sewer rate structure: 1. Create three customer classes: Single Family, Multi -Family, and Non -Residential based on their respective "Return -to -Sewer Factors", and 2. Establish a single fixed Sewer Utility Charge to replace the existing rate structure. Tables ES-2 through ES-5 indicate the proposed rates for FY 2019/20 through FY 2023/24. Note that the Pass -Through Adjustment Policy would adjust rates in addition to the proposed rate revenue increases shown in Table ES-1 City of Santa Ana Stantec I ES-4 2019 Water, Recycled Water, and Sewer Rate Study Executive Summary Table ES-2 Proposed Water Usage Charges ($/CCF) ier 1 $2.03 $2.17 $2.31 $2.36 $2.41 ier 2 $4.79 $5.13 $5.46 $5.57 $5.68 ecycled Water $2.15 $2.30 $2.45 $2.50 $2.55 Table ES-3 Proposed Monthly Water Utility Charges 5/8" X 3/4" $20.51 $21.94 $23.37 $23.84 $24.31 3/4" $30.76 $32.91 $35.05 $35.75 $36.47 1" $51.27 $54.85 $58.42 $59.59 $60.78 11/2" $102.53 $109.70 $116.83 $119.17 $121.55 2" $164.04 $175.52 $186.93 $190.67 $194.48 3" $358.84 $383.96 $408.92 $417.10 $425.44 4" $645.91 $691.12 $736.04 $750.76 $765.78 6" $1,332.83 $1,426.12 $1,518.82 $1,549.20 $1,580.18 8" $2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 Table ES-4 Proposed Monthly Sewer Utility Charges SINGLE FAMILY RESIDENTIAL 5/8" X 3/4" $5.60 $5.88 $6.41 $6.99 $7.62 3/4" $7.93 $8.33 $9.08 $9.90 $10.79 V. $12.59 $13.22 $14.41 $15.71 $17.12 11/2" $24.23 $25.44 $27.73 $30.23 $32.95 2" $38.20 $40.11 $43.72 $47.65 $51.94 3" $82.43 $86.55 $94.34 $102.83 $112.08 4" $147.62 $155.00 $168.95 $184.16 $200.73 6" $303.61 $318.79 $347.48 $378.75 $412.84 8" $559.71 $587.70 $640.59 $698.24 $761.08 10" $885.66 $929.94 $1.013.63 $1.104.86 $1.204.30 City of Santa Ana Stantec I ES-5 2019 Water, Recycled Water, and Sewer Rate Study Executive Summary MULTI -FAMILY RESIDENTIAL 5/8" X 3/4" $8.40 $8.82 $9.61 $10.47 $11.41 3/4" $12.12 $12.73 $13.88 $15.13 $16.49 V. $19.57 $20.55 $22.40 $24.42 $26.62 11/2" $38.20 $40.11 $43.72 $47.65 $51.94 2" $60.55 $63.58 $69.30 $75.54 $82.34 3" $131.32 $137.89 $150.30 $163.83 $178.57 4" $235.63 $247.41 $269.68 $293.95 $320.41 6" $485.21 $509.47 $555.32 $605.30 $659.78 8" $894.97 $939.72 $1,024.29 $1,116.48 $1,216.96 @101000*1Ul=10Ill 0l_1q 5/8" X 3/4" $9.33 $9.80 $10.68 $11.64 $12.69 3/4" $13.52 $14.20 $15.48 $16.87 $18.39 V. $21.90 $23.00 $25.07 $27.33 $29.79 11/2" $42.85 $44.99 $49.04 $53.45 $58.26 2" $68.00 $71.40 $77.83 $84.83 $92.46 3" $147.62 $155.00 $168.95 $184.16 $200.73 4" $264.96 $278.21 $303.25 $330.54 $360.29 6" $545.74 $573.03 $624.60 $680.81 $742.08 8" $1,006.73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 City of Santa Ana Stantec I ES-6 2019 Water, Recycled Water, and Sewer Rate Study Table of Contents TABLE OF CONTENTS ExecutiveSummary......................................................................................................1 1. Introduction...........................................................................................................4 1.1 Utility Background.......................................................................................................................4 1.2 Objectives................................................................................................................................... 4 1.3 Study Drivers...............................................................................................................................5 1.4 Study Methodology.....................................................................................................................5 2. Financial Plan........................................................................................................7 2.1 Description..................................................................................................................................7 2.2 Data and Assumptions................................................................................................................7 2.2.1 Beginning Fund Balances....................................................................................................7 2.2.2 Customer Growth & Volume Forecast.................................................................................7 2.2.3 Rate Revenues....................................................................................................................8 2.2.4 Non -Rate Revenues............................................................................................................9 2.2.5 Operation, Maintenance and Existing Debt Service Expenditures......................................9 2.2.6 Cost Escalation..................................................................................................................10 2.2.7 Capital Improvement Plan.................................................................................................11 2.2.8 Interest Earnings on Invested Funds.................................................................................13 2.2.9 Proposed Debt Strategy....................................................................................................13 2.2.10 Reserve Targets................................................................................................................14 2.3 Proposed Rate Revenue Increases..........................................................................................15 3. Cost -of -Service Analysis...................................................................................17 3.1 Process.....................................................................................................................................17 3.1.1 Step 1: Allocate Costs to System Functions......................................................................19 3.1.2 Step 2: Assign Functionalized Costs to Cost Groups........................................................20 3.1.3 Step 3: Credit Non -Rate Revenue to Cost Groups............................................................22 3.1.4 Step 4: Distribute Costs to Customer Classes.................................................................. 23 4. Rate Structure.....................................................................................................26 4.1 Current Rates............................................................................................................................ 26 4.2 Proposed Rate Structure Changes...........................................................................................28 4.3 Rate Structure Cost Categories................................................................................................28 4.4 Calculation of Fixed Utility Charges..........................................................................................30 4.4.1 Water Utility Costs.............................................................................................................30 4.4.2 Sewer Account Costs........................................................................................................ 31 City of Santa Ana Stantec 11 2019 Water, Recycled Water, and Sewer Rate Study Table of Contents 4.4.3 Sewer Utility Costs.............................................................................................................31 4.5 Calculation of Variable Water Usage Charge...........................................................................32 4.5.1 Purchased Water Costs..................................................................................................... 32 4.5.2 Water Usage Charges.......................................................................................................32 4.6 Pass -Through Adjustment Policy..............................................................................................34 4.7 FOG Charge..............................................................................................................................35 5. Summary of Proposed Rates............................................................................. 36 Appendix A Water Financial Plan Schedules Appendix B Sewer Financial Plan Schedules Appendix C Water Cost of Service Schedules Appendix D Sewer Cost of Service Schedules Appendix E Water and Recycled Water Rate Schedules Appendix F Sewer Rate Schedules City of Santa Ana Stantec 12 2019 Water, Recycled Water, and Sewer Rate Study List of Acronyms List of Acronyms AMI Advanced Metering Infrastructure AWWA American Water Works Association CCF hundred cubic feet CIP capital improvement plan COSA cost of service analysis CPI construction price index DCR debt service coverage ratio EM equivalent meter FAMS-XL Financial Analysis and Management System model FOG Fats, Oils and Grease (program) FTE full-time equivalent (employee) FY fiscal year (which ends on June 30 for the City) G&A general and administrative MWD Metropolitan Water District of Southern California O&M operations and maintenance OCSD Orange County Sanitation District OCWD Orange County Water District RSA revenue sufficiency analysis WEF Water Environment Federation City of Santa Ana Stantec 13 2019 Water, Recycled Water, and Sewer Rate Study 1. Introduction 1. INTRODUCTION Stantec Consulting and Hildebrand Consulting have been retained by the City of Santa Ana (City) to conduct a Water, Recycled Water, and Sewer Rate Study (Study). This report describes the detailed assumptions, procedures, and results of the Study, including our conclusions and recommendations. 1.1 UTILITY BACKGROUND The City of Santa Ana is located in Orange County, with a population of approximately 343,000. The City owns and maintains an extensive water and recycled water system that are managed by the Water Enterprise, and a sewer collection system that is managed by the Sewer Enterprise. The infrastructure of the Water Utility includes water production and distribution facilities that deliver potable water to retail customers within the City. The Water Utility consists of 20 active groundwater wells, 8 reservoirs, 7 water connections to Metropolitan Water District (MWD), 16 interconnections witl- neighboring water utilities, and 478 miles of water mains. The Water Utility currently depends on two sources of supply — pumped groundwater managed by the Orange County Water District (OCWD) and purchased surface water from the Metropolitan Water District (MWD). The Water Utility limits its groundwater use to meet no more than 75% of its retail water demands, in conformance with OCWD regulations. The Water Utility also provides recycled water to customers where available. The Water Enterprise acts in a retail capacity and obtains all recycled water supplies from OCWD. The transmission and distribution infrastructure for recycled water is owned and maintained by the OCWD, however, any expansion of the existing distribution pipeline network must be funded by the City's Water Enterprise. The Sewer Enterprise owns and maintains an extensive system of sanitary sewer infrastructure that includes approximately 390 miles of sanitary sewer, 9,000 manholes, 48,500 sewer laterals, and 2 sewer lift stations. All sewage is conveyed to the Orange County Sanitation District (OCSD) for treatment. 1.2 OBJECTIVES The primary objectives of this Study are to: i. Develop a multi -year financial management plan that provides for the Water and Sewer Enterprise operational and capital funding needs, ii. Identify future rate adjustments to water, recycled water, and sewer rates that will ensure adequate rate revenue to meet the Water and Sewer Enterprise's ongoing financial requirements, iii. Determine the cost of providing water, recycled water, and sewer service to customers using industry accepted methodologies, and City of Santa Ana Stantec 14 2019 Water, Recycled Water, and Sewer Rate Study 1. Introduction iv. Recommend specific rate structures that equitably recover the cost of service from each customer class, while minimizing the financial impact to ratepayers and comporting with industry practices and legal requirements. This report has been organized into the revenue sufficiency analysis (financial plan), cost of service/rate design, and rate recommendations. 1.3 STUDY DRIVERS The following describes the drivers that initiated the need for this Study, and a general description of the recommended solutions that were used to address those challenges. Driver: The rate schedules adopted by the 2014 rate study had a planning period that ended during this current fiscal year (2018/2019). Solution: Update the Water & Sewer Enterprise financial plans and rates to meet the revenue needs for the next five years. Driver: The City has recently updated its Water and Sewer Master Plans which provide guidance for capital spending over the next planning period. Solution: Adopt a capital spending plan from the respective Master Plans that provides the enterprises with the needed level of service and maintains the utilities' assets in good working condition, and benefit rate payers by making timely re -investments in critical infrastructure. Driver: The legal environment in California over the past 5 years (namely Proposition 218) has significantly increased the burden of proof required of public utilities to demonstrate that the rates being charged for utility service are proportionate to the cost of providing the utility services. Solution: Conduct a full cost -of -service allocation analysis and make rate structure modification to ensure inter- and intra-class equity in rates charged to water, recycled water, and sewer customers. 1.4 STUDY METHODOLOGY This Study applied methodologies that are aligned with industry standard practices for rate setting as promulgated by the American Water Works Association (AWWA), Water Environment Federation (WEF), and all applicable law, including California Constitution Article XIII D, Section 6(b), commonly known as Proposition 218. The Study began with development of a multi -year financial management plan that determined the level of annual rate revenue required to cover projected annual operating expenses, debt service (including coverage targets), and capital cost requirements, while maintaining adequate reserves. This portion of the Study was conducted using the revenue sufficiency and financial planning module of Stantec's City of Santa Ana Stantec 15 2019 Water, Recycled Water, and Sewer Rate Study 1. Introduction proprietary Financial Analysis and Management System (FAMS-XL) modeling system. The model was customized to reflect the Water and Sewer Enterprises' financial dynamics and latest available data for the water, recycled water, and sewer utility's operations in order to develop a long-term financial management plan, inclusive of projected annual revenue requirements and corresponding annual rate adjustments. Revenue requirements calculated during the revenue sufficiency analysis (RSA) for fiscal year ending June 30, 2020 (FY 2019/20) were then used to perform a detailed cost -of -service allocation (COSA) analysis. The COSA analysis and rate structure design were conducted based upon principles outlined by the AWWA, WEF, legal requirements (Proposition 218) and other generally accepted industry practices to develop rates that reflect the cost of providing service. City of Santa Ana Stantec 16 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan 2. FINANCIAL PLAN 2.1 DESCRIPTION This section presents the financial management plan and corresponding plan of water, recycled water, and sewer rate revenue adjustments developed in the RSA, including a description of the source data, assumptions, and policies reflected in the RSA. Appendix A and B include detailed schedules supporting the Water Enterprise and Sewer Enterprise financial plans, respectively, discussed herein. During the RSA, the Stantec team reviewed alternative multi -year financial management plans through several interactive work sessions with City staff. As a result of this process, the Study has produced proposed financial plans that will allow the Water and Sewer Enterprises to meet their respective revenue requirements and financial performance objectives throughout the projection period while striving to minimize rate increases. 2.2 DATA AND ASSUMPTIONS The City provided historical and budgeted financial information associated with operation of the water, recycled water, and sewer systems, including a multi -year capital improvement plan (CIP), and outstanding debt service obligations and covenants. City staff also assisted in providing other data, assumptions and policies, such as water demands and customer growth, debt service coverage requirements, operating and capital reserve targets, earnings on invested funds, and escalation rates for operating costs (all of which are described in the following subsections). The following sections present the key source data relied upon in conducting the RSA. 2.2.1 Beginning Fund Balances The ending cash balances for FY 2017/18 were used to establish the FY 2018/19 beginning balances, as outlined in Schedule 1 of Appendix A for the Water Enterprise and Schedule 6 of Appendix B for the Sewer Enterprise. 2.2.2 Customer Growth & Volume Forecast Forecasting the future usage of water is a perennial challenge for water utilities. Figure 1 below presents a three-year history of the City's water usage, as tracked from pumping records and water purchases. Water production from the two sources of supply is illustrated by the black (groundwater) and orange (surface water purchased from MWD) shading. This figure shows water usage over the last three years has held fairly constant, with a slight uptick in usage in FY 2017/18. This data is consistent with the general water industry assumption there will be little "rebound" in water usage after the decline in usage during the recent California drought. As such, this Study assumes that the growth in water usage will City of Santa Ana Stantec 17 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan track with general population growth, which was assumed to be about 1 % per year according to City Staff, and as evidenced by recent growth patterns. 40,000 35.000 30,000 v 25.000 ILL a 20,000 15,000 10.000 5,000 0 WMi - afw "Iu17,691111E[OZOPNT1�1 Figure 1: Historical Water Production from MWD and OCWD Water Purchases Regarding recycled water usage, the City expects to add five new accounts over the next ten years. Given the relatively small size of the recycled water utility and the relatively large size of each account, those five accounts represent an annual growth rate of about 2%. 2.2.3 Rate Revenues Rate revenue is the revenue generated from customers for water and sewer service. The City receives rate revenue in the form of fixed bi-monthly charges (hereafter referred to as the Sewer Utility Charge and Water Utility Charge, respectively) and consumption -based charges (hereafter referred to as the Water Usage Charge for water and recycled water and "Commodity Charge" for sewer). The water rate revenue in the financial plan is based on FY 2017/18 actual revenue, adjusted for FY 2018/19 by the percent rate increase in that year, and then adjusted annually to reflect assumed customer growth and any applicable rate revenue adjustments that are proposed by this Study. Recycled water rate revenue is a new item in the City's Budget, and as such, is based off of FY 2018/19 budgeted amounts and adjusted thereafter to reflect the assumed customer growth and rate revenue adjustments proposed by this Study. Details of the budgeted and projected revenues are listed in detail in Schedule 2 of Appendix A for the Water Enterprise and Schedule 7 of Appendix B for the Sewer Enterprise. City of Santa Ana Stantec 18 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan 2.2.4 Non -Rate Revenues In addition to rate revenue, the Water and Sewer Enterprises receive a limited amount of non -rate revenue. The Water Enterprise collects revenues related to miscellaneous service fees, fire line service, cell tower rental revenues, rental of property, and interest revenue on investments. The Sewer Enterprise collects a very small amount of revenue from penalties and service charges and other miscellaneous recoveries. Projections of all non -rate revenues were based on FY 2018/19 budgeted revenues, with the exception of interest income which was calculated annually based upon projected average fund balances and assumed interest rates (see Section 2.2.8). Budgeted and projected non -rate revenues are listed in detail in Schedule 2 of Appendix A for the Water Enterprise and Schedule 7 of Appendix B for the Sewer Enterprise. 2.2.5 Operation, Maintenance and Existing Debt Service Expenditures The Water & Sewer Enterprises' operating expenses include all salaries, benefits, maintenance, internal transfers, utility costs and other miscellaneous costs. The Water Enterprise also incurs water purchases costs and debt service expenses on an existing, outstanding loan (see Section 2.2.9). For both the Water and Sewer Enterprises the financial plan started with actual expenditures from FY 2017-18 (as opposed to budget values) and escalated those costs for future years (see Section 2.2.6). Current and projected operating and debt expenses are provided in detail in Schedule 3 of Appendix A for the Water Enterprise and Schedule 8 of Appendix B for the Sewer Enterprise. Actual expense categories for FY 2017/18 are depicted in Figure 2-1 and Figure 2-2. Debt Service 2% Clean Water Compliance 2% Other Variable O&M 1% Fixed Operations & Maintenanoe Costs 17% Figure 2-1: FY 2017/18 Water Expense Categories City of Santa Ana Stantec 19 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan Capital Expenditures 3.8% Fixed Ot 10.: Minor Capital Outlay 3.6% Figure 2-2: FY 2017/18 Sewer Expense Categories 2.2.6 Cost Escalation Future operating expenses were in large part projected based upon the actual expenditures from FY 2017/18, with a few exceptions for expenses that are new in the FY 2018/19 budget, and any additional staff that has been recommended from the financial planning process to deliver upcoming capital projects. All expenses starting in FY 2019/20 were adjusted for inflation. Annual cost escalation factors for the various types of expenses were developed based upon a review of historical inflation trends, published inflation forecasts, industry experience, and detailed discussions with City staff. Table 2-1 summarizes the cost escalation factors used to project assumed increases across all expense categories for both the Water and Sewer Enterprises. This Study assumes that the City will adopt a dynamic Pass -Through Adjustment Policy, which will annually adjust the Water Usage Charge in accordance with actual changes in water supply costs (see Section 4.6). City of Santa Ana Stantec 110 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan Table 2-1: Cost Escalation Factors for Water Analysis Salaries 0% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Benefits 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Pension 13.7% 13.7% 13.7% 13.7% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% Fuel 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Electricity 0% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% Consumer 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% Price Index MWD Water Purchases' -0.4% 4.7% 4.7% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% OCWD Pumping 10.2% 8.00% 5.4% 8.6% 7.3% 7.3% 7.3% 7.3% 7.3% 7.3% Charges' Green Acres Recycled Water 3.7% 0.0% 3.6% 0.0% 3.5% 0.0% 0.0% 0.0% 0.0% 0.0% Purchases Capital 0% 0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Imorovement The decrease in MWD Water Purchase costs in FY 2018/19 is due to an anticipated decrease in water purchase from MWD in that year. The decrease in MWD water is offset by an increase in OCWD Pumped water. 2.2.7 Capital Improvement Plan Like many utilities around the state and country, the City's water and sewer utilities are currently facing challenges of aging infrastructure. In 2016 and 2017, the City completed updated Master Plans for the Sewer and Water utilities respectively. Each Master Plan provided 30-year Capital Improvement Plans (CIP) for the utilities which laid out a plan for re -investing in each utilities' aging infrastructure. As part of this Study, the project team and City staff have evaluated multiple capital spending scenarios and identified the CIP that allows the Water and Sewer Enterprises to maintain its infrastructure in good working order, while limiting the impacts to rate payers. Below we discuss the recommended capital spending strategy over the planning period. Water Enterprise The City's Water enterprise serves all of Santa Ana's residents and businesses over its 27.2 square mile service area. The City's existing infrastructure includes 21 ground water wells, 7 import water connections, 7 pump stations, 10 reservoirs, and -480 miles of transmission and distribution mains. The City's infrastructure is generally in good working condition, however, about 20% of the City's distribution City of Santa Ana Stantec 111 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan system has already exceeded the theoretical useful life (some of which date back to before the 1930s). This number is expected to jump to 70% by 2040 if no pipe replacements are made. The City's CIP has prioritized building resilience in the City's water supply by building new wells in places where infrastructure has been damaged, adding on demand generators to critical wells to maintain water supply even during power outages, and the systematic rehabilitation of the City's wells, reservoirs, pump stations, and water distribution system to keep the City's infrastructure in good working order. The City is also installing new Advanced Metering Infrastructure (AM 1), which will allow the City personnel and customers access to real-time water consumption data. As part of this Study, the project team and City staff reviewed the recommended and limited CIP options from the 2017 Master Plan, updated the project scheduling for the 10-year planning period, based upon which projects have already been completed, and what is currently scheduled. The final CIP totaled approximately $154.9M (in current dollars) over the period of FY 2018/19 through FY 2029/30, averaging $12.9M per year. This capital plan reflects a material increase from the historic capital spending for the Water Enterprise, which has averaged $3.4M per year over the past four years. In conjunction with this increase in capital spending, the Water O&M budget assumes that the Water Enterprise will require 8 additional full-time equivalent (FTEs) staff. A detailed list of repair and replacement projects and associated costs for the Water Enterprise is provided in Schedule 4 of Appendix A. It should be noted that capital spending forecasts beyond a 5-year planning horizon have less certainty than near -term planning. As a result, this Study is primarily concerned with the capital spending forecasts within the next five years. Since capital spending estimates are provided in current dollars, the water RSA includes an annual cost escalation factor for capital costs (see Section 2.2.6). Sewer Enterprise The City's Sewer enterprise serves all of the City of Santa Ana, portions of Garden Grove, Orange, and Tustin that discharge wastewater into the City's sewer system. The City's sewer collection system, consists of approximately 450 miles of sewer mains, including 60 miles of trunk sewers that are currently owned by OCSD. The collection system operates largely by gravity and discharges into gravity trunk sewers that convey wastewater to the OCSD Treatment Plant Number 1. The majority of the City's sewers were built in the 1950s and 1960s, and are now over 60 years old, but portions of the system date back to the 1920s. OCSD recently transferred ownership of 8.7 miles of trunk sewer to the City, along with $23 million to pay for the future repairs and rehabilitation of the trunk sewer. Similar to the Water Enterprise, this Study proposes a financial plan for materially increasing the annual level of capital reinvestment in the sewer utility. Historically the Sewer Enterprise has made efforts to replace and repair the older portions of the sewer main network that has capacity issues. However, due to financial shortfalls, the City's pipe replacement schedule has been limited to about 0.5 miles of pipe per year. Capital spending plan assumed for this Study established a miles -of -pipe replacement approach with the goal of ramping up from 0.5 miles of pipe per year to 3.5 miles of pipe per year by FY City of Santa Ana Stantec 112 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan 2022/23, with a couple years of enhanced replacements to address the most critical infrastructure needs in FY 2020/21 and 2021/22. In addition to pipe replacement, the City also has one pump station rebuild scheduled for FY 2019/20. The final CIP totaled approximately $73.6M (in current dollars) over the period of FY 2018/19 through FY 2029/30. In conjunction with this increase in capital spending, the Sewer O&M budget assumes that the Sewer Enterprise will require 3 additional FTEs by FY 2021-22. A detailed list of repair and replacement projects and associated costs for the Sewer Enterprise is provided in Schedule 9 of Appendix B. It should be noted that capital forecasts beyond a 5-year planning horizon have less certainty than near -term planning. As a result, this Study is primarily concerned with the capital spending forecasts within the next five years. Since capital spending estimates are provided in current dollars, the sewer RSA includes an annual cost escalation factor for capital costs (see Section 2.2.6). 2.2.8 Interest Earnings on Invested Funds An interest earning rate of 1.36% and 2.34% for invested funds have been used for the Water and Sewer Enterprises respectively. The percentages are based on prior interest earnings from each Enterprise's actual revenue statements and have been approved by City Staff as representative of what they expect for interest earnings moving forward. The Study assumes that all interest earnings will be retained within their respective funds. 2.2.9 Proposed Debt Strategy Existing Outstanding Debt The Water Enterprise's outstanding debt includes a 2014 Series Revenue Bond that will be fully repaid in FY 2031/32. The corresponding annual debt service for the 2014 Series Revenue Bond is provided in Schedule 5 of Appendix A. The City's Sewer Enterprise does not carry any existing debt. Future Borrowing Assumptions This Report proposes that the enterprises cash finance all of their ongoing capital replacements, with exception of the Water Enterprise's AM project, which has already been approved for debt financing. The assumed financing terms for the AMI project, were as follows: • 30-year term • 2.0 percent cost of issuance • Fixed interest rate of 5.0 percent • A 1-year debt service reserve requirement The existing 2014 Water Revenue Bond has a debt service coverage ratio (DCR) requirement of 1.20. Based on recently published guidance from Fitch Ratings, utility systems with mid -range financial profiles City of Santa Ana Stantec 113 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan should maintain a DCR greater than 1.50 times annual debt service. As such, the Stantec team ensured that a DCR of at least 1.50 was maintained throughout the projection period to enable the City to access favorable terms from the debt market, should the need arise. The forecasted debt service for the AMI project is provided in Row 18 of Schedule 5 (Appendix A). 2.2.10 Reserve Targets Targeted cash reserves for utilities are balances retained for specific cash flow needs. The policy target for reserves is an important component when developing a multi -year financial plan as utilities rely on the reserves for financial stability. Credit rating agencies evaluate utilities in part on their adherence to formally adopted reserve targets, and lending agencies require utilities to maintain specific debt reserves for outstanding loans. While the City has not adopted a formal reserves policy for either enterprise, the City's Finance Department, in practice, has been following the reserve targets established by the 2014 Comprehensive Water Rate Study Update. The current Study expands upon the same recommendations, and recommends the following reserve policies: • An Operating & Maintenance Reserve sets a target minimum balance equal to 90-days (3 months) of annual operating expenses. This reserve ensures continuity of service regardless of short-term changes in cash flow or sudden increases in operating costs. Because this reserve target is set relative to the City's operating budget, the target will change as the expenses change. The Water Enterprise FY 2018/19 budget for O&M expenses totals $50.4 million, resulting in an Operating Reserve balance of about $12.4 million. The Sewer Enterprise FY 2018/19 budget for O&M expenses totals $5.0 million, resulting in an Operating Reserve balance of about $1.2 million. • An Emergency Reserve establishes a reserve for the urgent repair of a piece of infrastructure that fails unexpectedly. The previous rate study recommended a $1 million reserve be set aside for each enterprise. This report recommends increasing these reserves based on the value of a critical piece of infrastructure. A reserve of $4 million is recommended for both the Water and Sewer Enterprises, which is approximately the cost of replacing a production well or a pump station. It is recommended that the Emergency Reserve be adjusted annually to track with the Construction Price Index (CPI). • Repair, Renewal, and Replacement (3R) Capital Reserve is currently set at one year of annual depreciation of capital assets. Given that the purpose of the 3R capital reserve is to smooth out volatility in capital spending, this Study recommends modifying the 3R Capital Reserve to be equal to 50% of the average capital spending over the respective Enterprise's 10-year capital spending projections. This updated approach would establish a Water 3R Capital Reserve of $6.6 million in FY 2019/20 and a Sewer 3R Capital Reserve of $3.1 million in FY 2019/20. While this report has made projections of how the 3R Capital Reserve may increase over time (tracking with City of Santa Ana Stantec 114 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan CPI), in reality any adjustments to the 3R Capital Reserves should be based on changes to capital spending projections. The target levels of the above policies are consistent with 1) the Stantec team's industry experience for similar systems, 2) the findings of reserve studies conducted by the AWWA, and 3) a healthy level of reserves for a municipal utility system per the evaluation criteria published by the municipal utility rating agencies (e.g. Fitch, Moody's, and Standard & Poor's). This Study recommends that the Operating and Maintenance Reserve as well as the Emergency Capital reserve targets be adopted by the City as formal minimum fund balance policies, with the addition of the 3R Capital Reserve as a target reserve policy. Once the reserve targets are established, they should be reviewed annually during the budgeting process to monitor current levels and assure conformance with stated policies and practices. Decisions can be made to maintain, increase, or spend down reserve balances, as appropriate, depending upon the impact of such decisions to the upcoming budget period. The total reserve targets by year are shown in Schedule 5 (Row 28) of Appendix A for the Water Enterprise and Schedule 10 (Row 26) of Appendix B for the Sewer Enterprise. 2.3 PROPOSED RATE REVENUE INCREASES All of the above information, including the significant increase in capital spending as described in Section 2.2.7, was entered into Stantec's FAMS-XL interactive modeling system. This module of FAMS-XL produced a ten-year projection of financial requirements for each enterprise, which formed the basis for a financial strategy of needed rate adjustments over the next 5 years for both the Water and Sewer Enterprises. It is important to note that the above rate increases for the Water Enterprise do not include the Pass -Through Adjustment Policy, as described in Section 4.6. On the surface, rate increases may seem un-necessary for the Sewer Enterprise given the recent receipt of $23 million from OCSD (see Section 2.2.7), however this Study is recommending a "spike" in capital spending in FY 2020/21 and FY 2019/20 to draw down on those reserves and address the Sewer Enterprise's most critical infrastructure needs. Once those reserves are spent down to target levels, the Sewer Enterprise will transition to a more sustainable level of capital spending. Both rate revenue adjustment schedules have been detailed in Table 2-2. City of Santa Ana Stantec 115 2019 Water, Recycled Water, and Sewer Rate Study 2. Financial Plan Table 2-2: Recommended Water and Sewer Rate Revenue Increases Rate Adjustment Water Rate Revenue Sewer Rate Revenue Date Adjustment Adjustment January 1, 2019 7.0% 3.0% July 1, 2020 7.0% 5.0% July 1, 2021 6.5% 9.0% July 1, 2022 2.0% 9.0% July 1, 2023 2.0% 9.0% The revenues, expenses, recommended rate revenue increases, and resulting fund balances with relation to the recommended minimum and target fund balances and resulting DCR are summarized in Schedule 5 (Appendix A) for the Water Enterprise and Schedule 10 (Appendix B) for the Sewer Enterprise. These schedules show that the minimum reserve target is maintained over the duration of the planning period and each enterprise meets the target reserve by the end of the planning period. City of Santa Ana Stantec 116 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis 3. COST -OF -SERVICE ANALYSIS The Cost -of -Service Allocation (COSA) analysis is intended to evaluate the cost of providing water, sewer and recycled water service, and to allocate those costs to respective customer classes and rate structure components to ensure the proposed rate structure is aligned with costs to provide such service. This is done in order to be equitable among the City's ratepayers and to comply with Proposition 218, which requires water rates to be proportionate to the cost of providing water service. This Study employed well - established industry practices as recognized by the AWWA, WEF, and other accepted industry standards. The following section presents a detailed description of the COSA methodology and corresponding results. The water and recycled water rate study employed a method that is consistent with the "commodity - demand" COSA methodology promulgated in AWWA's Manual M1: Principles of Water Rates, Fees, and Charges (M1). With this approach, costs are functionalized to system activities, allocated to two functional categories: Source of Supply Costs and Utility Costs, and then distributed to different customer classes based on their usage behavior. Unit costs are then used to distribute system costs to the various components of the rate structure (see Section 4). Similarly, the sewer rate study followed principles promulgated in WEF's Financing and Charges for Wastewater Systems, Manual of Practice No. 27 and allocated to two functional categories: Account Costs and Utility Costs. 3.1 PROCESS Both the water and sewer COSAs were conducted based upon the City's FY 2019/20 annualized expenditure and revenue requirements per the RSA. The water COSA included the steps illustrated in Figure 3-1. Likewise, the sewer COSA included the steps illustrated in Figure 3-2. City of Santa Ana Stantec 117 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Summary Test Year Costs (FY 2019/20) Operating Expenses Debt Costs Cash Funded Capital Step 1 Allocate Costs to System Functions Step 2 Assign Functionalized Costs to Cost Groups Source of Supply Utility Account Step 3 F Step 4 Credit Non -Rate Distrbute Costs to Revenue to Unit Customer Costs Classes Interest Income Other Operating Revenue Private Fire Protection Figure 3-1: Summary of the Water Cost -of -Service Analysis Methodology Step 1 Step 2 Summary Test Allocate Assign Year Costs Costs to nized LFuctlonal (FY 2019/20) System Costs to Cost Functions Groups Operating Expenses Collection IMIKOM- V Utility General & Cash Funded Adminstrative Capital 1 Customer Service Account Step 3 Credit Non -Rate Revenue to Unit Costs E Other Operating Revenue FOG Revenue Single Family Multi -Family Non Residential Recycled Water Step 4 Distrbute Costs to Customer Classes Figure 3-2: Summary of the Sewer Cost -of -Service Analysis Methodology Single Family Multi -Family Non Residential The following sub -sections give a detailed description of the COSA methodology and summary results, while Appendix C and D (for water and sewer, respectively) include detailed schedules of cost allocations that support those results. City of Santa Ana Stantec 118 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis 3.1.1 Step 1: Allocate Costs to System Functions The operating expenses, debt service, and cash -funded capital requirements were distributed to specific functional components within each respective enterprise. While many costs can be allocated directly to a functional component (e.g. Water Purchase costs are allocated to the Water Purchase function), some costs are divided among multiple functional components. For example, costs that are best allocated based on the proportionate value of the system's assets, such as capital costs and debt service, were allocated based on the book value of existing assets ("Fixed Assets"). A summary of cost functionalization (for water and sewer, respectively) are presented in Table 3-1 and Table 3-3. Subsequently, each line item in the budget is assigned one of the cost categories shown in Table 3-1 (for water) and Table 3-3 (for sewer). These assignments are detailed in Appendix C (Schedule 11) for water and Appendix D (Schedule 12) for sewer. The summary results from those assignments (by budget category) are provided in Table 3-2 and Table 3-4. Table 3-1: Allocation of Water System Costs to Functional Components vvawi rUIUIIax iwio - - - - - - - - - Production and Supply - 1uu% - - - - - - - - Pumping Electricity - - 100% - - - - - - - Tr.afm.nf_ nc.mi,a lc _ _ _ 1nnO Treatment - - 100% - - - - - Transmission & Distribution - - - - - 100% - - - - Storage - - - - - - - 100% - - General & Administrative - - - - - - - - 100% - Recycled Water - - - - - - - - - 100% Fixed Assets 5.0% 0.3% 0.0% 0.1% 0.2% 67.3% 3.8% 18.4% 4.7% 0.2% Table 3-2: Summary of Water Cost Functional ization by Budget Category City of Santa Ana Stantec 119 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Table 3-3: Allocation of Sewer System to Functional Components Functional Component System Function Utility Account . i - Customer 100.0% Indirect 90.6% 9.4% Staff FTE Allocation 90.0% 10.0% 100.0% Table 3-4: Summary of Sewer Cost Functional ization by Budget Category O&M Expenses $4,849,392 $504,244 Capital $3,090,000 $0 Interfund Transfers $281,805 $0 Change in Fund Balance-$786,244 $0 TOTAL: $7,434,954 $504,244 3.1.2 Step 2: Assign Functionalized Costs to Cost Groups Next the costs associated with each functional component were designated to specific Cost Groups in order to create the foundation for developing rates that are directly aligned with the cost to provide service (as required by Proposition 218). Step 2 - Water For the Water Enterprise, the Functionalized expenses are allocated to two cost components: Commodity Costs (which is further designated as either Potable Water or Recycled Water) and Utility Costs (see Table 3-5 for the percent allocations and Table 3-6 for the dollar results). The Potable Water Commodity Costs include all variable operation expenses such as purchased water expenses, water pumping electricity, treatment expenses and some general and administrative (G&A) expenses (see below). The Recycled Water Commodity Cost is strictly the purchase costs of Green Acre recycled water from OCWD. The Utility Costs are all remaining Water Enterprise expenses, which are predominately fixed costs such as salaries, benefits and capital expenses. G&A costs are allocated between the Potable Water Commodity Costs and Utility Costs using the indirect method based on operating expenses. City of Santa Ana Stantec 120 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Table 3-5: Water Functionalization to Cost Group Allocation Factors Water Purchase 100.0% Production and Supply 100.0% Pumping Electricity 100.0% Treatment - Chemicals 100.0% Treatment 100.0% Transmission & Distribution 100.0% Meters & Services 100.0% Storage 100.0% General & Administrative 67.9% 32.1 % Recycled Water 100.0% Table 3-6: Water Cost Group Allocation Water Purchase $24,571,080 $0 $0 $24,571,080 Production and Supply $0 $0 $4,403,257 $4,403,257 Pumping Electricity $1,687,746 $0 $0 $1687746 Treatment -Chemicals $1,423 $0 $0 $1423 Treatment $0 $0 $2,761,878 $2,761,878 Transmission & Distribution $0 $0 $7,015,412 $7 015 412 Meters & Services $0 $0 $104,503 $104 503 Storage $0 $0 $499,391 $499 391 General & Administrative $14,484,413 $0 $6,839,691 $21,324,105 Recycled Water $0 $278,614 $0 $278,614 TOTAL $40,744,662 $278,614 $21,624,132 $62,647,408 Step 2 - Sewer For the Sewer Enterprise, the functionalized expenses already coincide with the two Cost Groups: Account Costs and Utility Costs (see Table 3-7 and Table 3-8). As such, no further allocations are necessary. City of Santa Ana Stantec 121 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Table 3-7: Sewer System Cost Allocation Factors Utility Costs Account Costs 100.0% Table 3-8: Sewer Cost Group Allocation 100% Utility $7,434,954 $0 Account $0 $504,244 TOTAL: $7,434,954 $504,244 3.1.3 Step 3: Credit Non -Rate Revenue to Cost Groups The next step of the COSA is to calculate the rate revenue requirement for each Cost Group by crediting other sources of revenue. Non -rate revenue is used to offset costs that would otherwise need to be recovered through rates. Non -rate revenue includes interest income, other operating revenue (such as miscellaneous fees), fats, oils, and grease (FOG) program revenue for the Sewer Enterprise, and private fire protection revenue for the Water Enterprise (see Schedule 2 for Water and Schedule 7 for Sewer). For the Water Enterprise non -rate revenue is allocated equitability among the Cost Groups in proportion to their relative value, while non -rate revenue is credited to the Utility Costs for the Sewer Enterprise. These credits are shown below in Table 3-9 and Table 3-10, which show the total rate revenue requirement for water and sewer respectively. Table 3-9: Water Rate Revenue Requirement Calculation Total Costs $40,744,662 $278,614 $21,624,132 $62,647,408 Non -Rate Revenue ($1,415,204) ($9,677) ($751,081) ($2,175,962) Revenue Requirement $39,329,459 $268,937 $20,873,051 $60,471,446 City of Santa Ana Stantec 122 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Table 3-10: Total Sewer Rate Revenue Requirement Calculation Summary Total Costs $7,434,954 $504,244 $7,939,197 Non -Rate Revenue ($1,443,194) ($1,443,194) Revenue Requirement $5,991,759 $504,244 $6,496,003 3.1.4 Step 4: Distribute Costs to Customer Classes Finally, rate revenue requirements are then distributed to customer classes based on the customer class units of service characteristics with regard to each Cost Group. The units of service are measured in terms of number of accounts, water usage (for water only), and equivalent meters (which are explained below). A meter equivalency schedule is an industry -standard factor used to represent the relative capacity associated with different types and sizes of meters. A meter equivalency schedule allows for indexing of each meter size in terms of multiples of the lowest common denominator (in this case a 5/8" x 3/4" meter). The existing meter equivalency schedule, that is inferred from the Water Enterprise's current Basic Water Service Charge, is not recognized by the Stantec team as a published or calculated equivalency schedule. This Study recommends that it be replaced with a standard meter equivalency table from AWWA's M22 manual as shown in Table 3-11. Table 3-11: Proposed Meter Equivalency Schedule 3/4" Turbine Class 1 30 1.50 1" Turbine Class 1 50 2.50 1 1/2" Turbine Class 1 100 5.00 2" Turbine Class 1 160 8.00 3" Turbine Class 1 350 17.50 4" Turbine Class 1 630 31.50 6" Turbine Class 1 1,300 65.00 8" Turbine Class 2 2,400 120.00 10" Turbine Class 2 3,800 190.00 (a) Source: Table 6-1 AW WA meter Standards, AWWA M22 Manual, 2nd Ed Therefore, a single 5/8" x 3/4" meter is equal to one equivalent meter (EM), while an 8" meters is equal to 120 EMS. City of Santa Ana Stantec 123 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Step 4 - Water For the Water Enterprise, the Potable Water Commodity Costs are distributed across customer classes based on each customer classes' total use of water use of potable water, Recycled Water Commodity Costs are allocated 100% to the recycled water customers, and Utility Costs are allocated to each respective customer class based on their respective number of equivalent meters (see Table 3-12 and Table 3-13). For example, in Step 3 we calculated the revenue requirement for Potable Water Commodity Costs to be $39,339,769 (see Table 3-9). Single Family customers account for 37.34% of the total annual potable water use (see Table 3-12) and therefore are charged for that percentage of the potable water revenue requirement, totaling $14,692,083 (see Table 3-13). Table 3-12: Water Customer Class Units of Service Multi -Family Residential 4,257,723 29.4% 3,713 8.2% 44,254 12,542 14.8% Non -Residential 4,812,323 33.2% 5,672 12.5% 5,672 29,810 35.1% Recycled Water 124,997 NA— 25 0.1% 25 489 0.6% 'Values are based off of FY 2018 water use data '-` Recycled water use is not considered in the allocation of retail water use among retail customers. Table 3-13: Water revenue requirement allocation to each customer class Single Family Residential $14,688,232 $10,330,420 $25,018,652 Multi -Family Residential $11,567,253 $3,086,399 $14,653,652 Non -Residential $13,073,974 $7,335,955 $20,409,929 Recycled Water $268,937 $120,276 $389,213 TOTAL: $39.329.459 $268.937 $20.873.051 $60.471.446 Step 4 - Sewer For the Sewer Enterprise, the Account Costs are distributed across customer classes by the proportional number of accounts served by the Sewer Enterprise and Utility Costs are allocated by the percent of the overall adjusted (as explained below) EMS in each customer class (Table 3-14 and Table 3-15). While an EM is a good proxy for the capacity demand of an account on a water utility, the size of the meter is only an indirect measure for sewer use since not all water use returns to the sewer in the same proportion for different types of sewer customers. To account for this difference in sewer usage, a "return - to -sewer" factor is applied to the EM calculation for each customer class (provided by City staff based on their understanding of their customer's water usage). This adjusted EM calculation allows for costs to be allocated to each customer class, respective to their relative demand they may put on the sewer collection system. City of Santa Ana Stantec 124 2019 Water, Recycled Water, and Sewer Rate Study 3. Cost -of -Service Analysis Table 3-14: Sewer Customer Class units of service Single Family 35,915 80.8% 41,886 50.0% 20,943 39.1% Multi -Family 3,712 8.3% 12,537 80.0% 10,030 18.7% Non -Residential 4,848 10.9% 25,159 90.0% 22,643 42.2% 44,475 54,423 53,616 Table 3-15: Sewer revenue requirement allocation to each customer class Single Family $2,340,428 $407,194 $2,747,622 Multi -Family $1,120,879 $42,090 $1,162,969 Non -Residential $2,530,452 $54,960 $2,585,412 Total: $5,991,759 $504,244 $6,496,003 The manner in which the Cost Groups are used in the rate design will be described in Section 4 City of Santa Ana Stantec 125 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure 4. RATE STRUCTURE Upon completion of the COSA, rate structure analyses were performed to evaluate rate structure modifications and calculate specific water, recycled water, and sewer rate schedules for implementation in FY 2019/20. The rate structures proposed by this Report are designed to: • Fairly and equitably recover costs through rates, • Conform to accepted industry practice and legal requirements, and • Provide fiscal stability and recovery of system fixed costs. Revenue requirements allocated to the Cost Groups discussed in Section 3.1.4 were allocated to the customer classes and rate components based on the units of service. The following sub -sections describe the basis for the recommended rate structure and a specific 5-year rate schedule for implementation on January 1, 2020 (for FY 2019/20) and adjusted every July 1st thereafter. The recommended rate schedules are designed to ensure each customer pays its proportionate share of the cost to provide service. 4.1 CURRENT RATES The current water, recycled water, and sewer rates follow a common industry practice with a two-part structure that are comprised of a fixed service charge and a consumption -based rate. Water Rates The fixed portion of the current water rates (currently referred to by the City as the "Basic Water Service Charge") is based on the meter size for all customer classes, except for Multi -Family customers which are charged on a per dwelling unit basis (see Table 4-1). The fixed charges currently recover approximately 16% of rate revenues. City of Santa Ana Stantec 126 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure Table 4-1: Current Fixed Charges 5/8" x 3/4" $6.95 3/4" $15.10 V $28.65 11/2" $44.93 2" $82.90 W $137.15 4" $272.78 V $435.53 Multi -Family Residential The current consumption -based rate (currently referred to by the City as the "Metered Water Rate") is a tiered rate assessed based on actual water usage. All retail customers pay the same tiered rate while recycled water customers are charged a lower uniform rate (Table 4-2). All water customers received an allocation of 22 CCF of Tier 1 water per month, with exception of Multi -Family accounts which received an allocation of 22 CCF for each dwelling unit. Table 4-2: Current Consumption -Based Rate 1 $3.02 22 CCF $2.42 2 $3.59 (not applicable) (not applica The consumption -based rates posted here have been shaped over time by "pass -through adjustments" based on increases (or theoretical decreases) in the cost of water supply obtained from OCWD and MWD. Sewer Rates The sewer rates have a two-part fixed charge (currently referred to as the "Sewer Service Charge") which is the same for all customers, a Capital Recovery Charge and a Lateral Repair Program Charge. An additional (fixed) FOG Program Charge is applied to restaurants and other food service accounts. The current fixed charges currently recover approximately 13% of sewer rate revenues. Table 4-3: Current Fixed Sewer Charges Capital Recovery $1.40 Charge Lateral Repair $1.96 Program A sewer "Commodity Charge" of $0.426 per CCF is assessed based on actual water usage. A single uniform rate is used for all retail customers. City of Santa Ana Stantec 127 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure 4,2 PROPOSED RATE STRUCTURE CHANGES This Study recommends implementing the following changes to the water rate structure. Refer to the fixed water charge as the Water Utility Charge (replacing "Basic Water Service Charge"), 2. Refer to the consumption -based rate as the Water Usage Charge (replacing "Metered Water Rate"), 3. Establish three distinct retail customer classes: a. Single Family Residential b. Multi -Family Residential c. Non -Residential 4. Identify specific costs that are designated to be recovered through fixed Water Utility Charge revenue vs. variable Water Usage charge revenue (see Section 4.3), 5. Scale the Water Utility Charges based on an updated meter equivalency schedule (see Section 3.1.4), 6. Reflect the cost of the Water Enterprise's water supply costs through the tiered Water Usage Charges (see Section 4.5), and 7. Update the formula used to calculate the annual pass -through cost adjustments (see Section 4.7). This Study recommends implementing the following changes to the City's sewer rate structure. 1. Establish three distinct retail customer classes: a. Single Family Residential b. Multi -Family Residential G1•►GTi1l:Zmr:m, in 2. Shift all cost recovery to a fixed Sewer Utility Charge (thereby eliminating the sewer Commodity Charge), 3. Scale the Sewer Utility Charges based on an updated meter equivalency schedule, 4.3 RATE STRUCTURE COST CATEGORIES Water Rates As will be explained in detail in the following sections, the proposed water rate structure is divided into components based on two cost categories: the utility's Commodity Costs and Utility Costs. The Commodity Costs will be recovered through the Water Usage Charge (based on water usage) and the City of Santa Ana Stantec 128 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure Utility Costs will be recovered through the Water Utility Charge. The details of this rate structure are presented in Figure 4-1. Commodity Costs Driven by the volume of water sold • Water Purchases • Pumping Electricity 1 Water Usage Charge (variable) 1p Utility Costs Driven by the size of the utility infrastructure Figure 4-1: Water Rate Structure Cost Categories Sewer Rates • Operations • Maintenance • Capital 1 Water Utility Charge (fixed) The proposed sewer rate structure is a single fixed Sewer Utility Charge, which is comprised of an Account Cost component and a Utility Cost component. This recommendation is being made to reflect the fact that nearly 100% of the Sewer Enterprise expenses are fixed. The details of this rate structure are presented in Figure 4-2. Account Costs (7%) Driven by the cost of managing accounts Billing Customer Service 0 Meter Costs Driven by the size of the collection system infrastructure J* Sewer Utility Charge Figure 4-2: Sewer Rate Structure Cost Categories • Operations • Maintenance • Capital City of Santa Ana Stantec 129 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure 4A CALCULATION OF FIXED UTILITY CHARGES Water Rates As summarized in Section 3.1.2, the COSA allocated costs to the Cost Groups of Potable Water Commodity Costs, Recycled Water Commodity Costs, and Utility Costs. Of those groups, the Utility Costs are fixed, therefore, those costs are proposed to be collected through the fixed Water Utility Charge. The total Utility Costs from all customer classes make up for 34% of the revenue requirement, yielding a significant increase from the current percentage of fixed revenue (approximately 16%). The remaining 66% of costs are variable and are proposed to be collected through the Water Usage Charge. 4.4.1 Water Utility Costs As discussed in Section 3, the Utility Costs are made up of expenses such as capital spending, salaries, maintenance, and other fixed operating costs. These costs are driven by the size (i.e. capacity) of the utility. As such, these costs are allocated to customers based on the demands that they place on the system, which is measured based on the size of the customer's meter. As summarized in Section 3.1.4, the revenue requirement designated as Utility Costs, after non -rate revenue was discounted, totaled $10,330,420 for Single Family Residential. Given the meter equivalency schedule described in Section 3.1.1, there are 41,979 equivalent meters in the system which yields a charge of $20.511 per equivalent meter per month for each customer class. Since the Utility costs were allocated to customer classes on an Equivalent Meter basis, the Utility Cost is the same for all customer classes. Table 4-4 provides the scaled Utility Cost by meter size which makes up the fixed Water Utility Charge. The proposed schedules of Water Utility Charges for the planning horizon are presented in Schedule 13 through Schedule 17 of Appendix E. Table 4-4: Monthly Water Utility Charge (FY 2019/20) 5/8" x 3/4" 1.00 $20.51 3/4" 1.50 $30.76 V 2.50 $51.27 11/2" 5.00 $102.53 2" 8.00 $164.04 W 17.50 $358.84 4" 31.50 $645.91 V 65.00 $1,332.83 8" 120.00 $2,460.60 1 Minor variations may exist due to rounding City of Santa Ana Stantec 130 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure Sewer Rates As summarized in Section 3.1.3, the COSA allocated costs to the Cost Groups of "Account" and "Utility," both of which are fixed costs and will be collected through a fixed Utility Charge. The sum of these two groups accounts for 100% of the revenue requirement, yielding a significant increase from the current percentage of fixed revenue (approximately 17%). 4.4.2 Sewer Account Costs Account Costs include costs such as billing, customer service, and account management. These costs are proportionate to the number of accounts in the system regardless of the size of the account. As such, the $407,194 allocated to Single Family accounts are divided by the utility's 35,915 accounts (and divided by 12 months) to give a per account charge of $0.94 per month. Similar to the Water Utility costs, Sewer Account Costs were allocated to customer classes on an Account basis, as such the Account Cost is the same for all customer classes. 4.4.3 Sewer Utility Costs As discussed in Section 3, the Utility Costs are made up of expenses such as capital spending, salaries, maintenance, and other fixed operating costs. These costs are driven by the size (i.e. capacity) of the utility. As such, this Study recommends that these costs be allocated to customers based on the demands that they place on the system, which is measured based on the size of the customer's meter. As summarized in Section, the revenue requirement designated as Utility Costs, after non -rate revenue was discounted, totaled $2,340,428 for Single Family Residential Customers. Given the meter equivalency schedule described in Section 3.1.1, there are 41,886 equivalent meters in the system for Single Family Residential Customers. Dividing the revenue requirement by the equivalent meters and again by 12 yields a monthly base charge of $4.66 per equivalent meter for Single Family customers. The difference in the fixed charges for each customer class is due to the return -to -sewer factors assigned to each customer class (see Table 3-14). Table 4-5 provides the scaled Utility Cost by meter size which, combined with the account charge makes up the fixed Sewer Utility Charge. The full schedules of Sewer Utility Charges for the planning horizon are presented in Schedule 18 through Schedule 22. City of Santa Ana Stantec 131 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure Table 4-5: Monthly Sewer Utility Charge (FY 2019/20) 5/8" x 3/4" $5.60 $8.40 $9.33 3/4" $7.93 $12.12 $13.52 V $12.59 $19.57 $21.90 11/2" $24.23 $38.20 $42.85 2" $38.20 $60.55 $68.00 W $82.43 $131.32 $147.62 4" $147.62 $235.63 $264.96 6" $303.61 $485.21 $545.74 8" $559.71 $894.97 $1,006.73 10" $885.66 $1,416.49 $1,593.43 4.5 CALCULATION OF VARIABLE WATER USAGE CHARGE The following section explains how the proposed Water Usage Charges were developed based on the cost of water supply. 4.5.1 Purchased Water Costs The $39,329,459 in Potable Water revenue requirements (see Section 3.1.3) is largely made up of water purchase costs, and to a lesser extent water production electricity and treatment. The City has two potable water sources: 1. Groundwater Supply: The City pays OCWD for the right to pump groundwater, which makes up approximately 75% of the City's water supply. Between the payments to OCWD and pumping energy costs, this groundwater composes approximately 56% of the City's water supply costs. 2. Imported Water: Water purchased from MWD makes up the remaining 25% of the City's water supply and accounts for 44% of the City's water supply costs. A final element of the City's water portfolio is the revenue requirement for Recycled Water ($268,937 per Section 3.1.3) which the City purchases from OCWD and provides to its 25 recycled water customers. 4.5.2 Water Usage Charges The potable water rates that are proposed in Year 1 (FY 2019/20) for single family residential, multi -family residential, and non-residential accounts are designed to be recovered through two tiers by assigning the proportionate share of supply volume and supply costs to each tiered allocation and rate, respectively. The Tier 1 rate is designed to recover the cost of OCWD rates for groundwater extraction, the electrical costs of water production, the electrical costs of distributing that volume of water, a portion of the CIP, and a portion of the G&A costs. The Tier 2 rate is designed to recover the costs of purchasing imported City of Santa Ana Stantec 132 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure water from MWD, the electrical costs for distributing that volume of water, a portion of the CIP, and a portion of the G&A costs. The allocation of water in each tier is based on the amount of water supply that is available from each respective source. As previously stated in Section 1.1, 75% of the Water Enterprise's water supply comes from groundwater. Tier Width Allocations For single family residential accounts, 75% of the water usage by that customer class occurs below the water consumption level of 10.7 CCF per EM per month. As such the recommended Tier 1 threshold for single family residential customers is set at 10.7 CCF per EM per month. However, due to limitations in the City's billing software, the City currently bills in whole CCF on a bi-monthly basis. To account for this, the tier thresholds is rounded to the nearest CCF. Tier 1 will drop down from 10.7 CCF to 10.5 CCF per month. The remaining water consumption (above 10.5 CCF per month) is designated as MWD purchased water costs. The same approach was utilized for non-residential customers yielding 31.1 CCF per month (rounded down to 31 CCF). Tier width allocation for the multi -family customer class used the same methodology as was used for single family and non-residential customer classes, however, the allocation was based off of the number of dwelling units rather than meter equivalence. 75% of the water usage by that customer class occurs below 8.4 CCF (rounded up to 8.5 CCF) per dwelling unit per month. As such, this level of consumption became the Tier 1 allocation threshold for this customer class, with the remaining consumption above 8.5 CCF per unit per month charged at Tier 2 rates. Recycled water customers only have one source of supply, as such all of the consumption will be charged in one tier. Unit Cost of Water ($/AF) Volume (AF) Tier 1 Tier Recycled Water Figure 4-3: Tiered Rate Cost and Flow Allocations Water Usage Charge Calculation City of Santa Ana Stantec 133 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure The cost recovery target for each customer class shown in Table 3-13, was allocated between tiers 1 and 2 for potable water use based on the percentage of the source of supply costs for each tier. OCWD and pumped water costs total 55.9% of the source of supply cost, with MWD costs making up the remaining 44.1 %. The unit cost per CCF was calculated by dividing the revenue requirement by the volume of water consumed in each tier for each customer class. Table 4-6 shows how these steps and the resulting unit rate for each tier for each customer class. Table 4-6: Tier Unit Rate Calculation (FY 2020/21) �AbLllllel Class and me I ell le Recovery Percent Allocation V1 d1el Allocation Percent Allocation Calculated — Unit Rate* Tier Single Requirement $14,688,232 (CCF) 5,406,506 Family Tier 1 $8,210,722 55.9% 4,053,677 75.0% $2.03 Tier $6,477,510 44.1% 1,352,829 25.0% $4.79 Multi- $11,567,253 4,257,723 Family Tier 1 $6,466,094 55.9% 3,190,058 75.0% $2.03 Tier $5,101,159 44.1% 1,067,665 25.0% $4.79 Non- $13,073,974 4,812,323 Residential Tier 1 $7,308,351 55.9% 3,608,602 75.0% $2.03 Tier $5,765,622 44.1% 1,203,721 25.0% $4.79 Recycled $268,937 100% 124,997 100% $2.15 Water * The calculated unit rate is developed using the non -rounded recommended tier allocations discussed above The Water Usage Charges for the planning horizon are presented in Appendix E (Schedule 13 through Schedule 17). 4.6 PASS -THROUGH ADJUSTMENT POLICY In addition to the recommended increases in revenues shown in Section 2.3, this Study proposes to modify the existing Pass -Through Adjustment Policy in order to offset any changes in water supply costs through changes to the Water Usage Charges. The pass -through calculation does not apply to FY 2019/20 because revenue requirements and cost recovery were calculated based on the projected FY 2019/20 water supply costs. As illustrated in Figure 4-4, tiered rates are adjusted based on the unit price increase corresponding to the water source allocated to each tier. Tier 1 rates are increased (or decreased perhaps) by the change in the unit cost of the groundwater supply cost. This is calculated by adding the OCWD water purchase costs and dividing that cost by the volume of groundwater (in CCF) used by the Water Enterprise. Tier 2 rates are increased (or decreased) by the change in the unit cost charged by MWD (see OCWD example above). City of Santa Ana Stantec 134 2019 Water, Recycled Water, and Sewer Rate Study 4. Rate Structure Tiered Rates Tier 1 Rate Adjustment \ccF/ = Change in OCWD Unit CostsG—CITl ) Tier 2 Rate Adjustment (cIF/ = Change in MWD Unit Costs(ccF/ Recycled Water Rates Tier 2 Rate Adjustment (ccF) = Change in OCWD Green Acres Unit Costs (ccF) Figure 4-4: Pass -Through Adjustment Formulas Rate Adjustment Notification and Publication - This report advises the City that, pursuant to Government Code 53756, the City must give notice to ratepayers of any pass -through adjustment to water rates at least 30 days prior to the effective date of the adjustment. This can be done on the ratepayer's invoice (for example in the "notes" section of the invoice). It is also important to note that, due to the Pass - Through Adjustment Policy, the Water Usage Charges that are charged by the City in FY 2020/21 through FY 2023/24 are likely to be different from rates shown in Schedule 13 through Schedule 17 (for those same years). Each year, the actual rate schedule will be a function of the pass -through adjustments effectuated in the prior years. As such, the Study recommends that the City continue with its existing practice of posting rate schedules at the time that they are effective (as adjusted per the Pass - Through Adjustment Policy), while meeting the 30-day notification requirements stated above. This recommendation is preferred to posting Schedules 13 through Schedule 17 as they are shown in this report, due to the dynamic nature of the annual pass -through adjustments (which may create confusion for rate payers). 4.7 FOG CHARGE The Sewer Enterprise has a Fats, Oils & Grease (FOG) Program in order to manage the sewer accounts whose discharges are the most problematic for sewer collection system clogging (which are predominantly food preparation establishments). The calculation of this charge is simply based on the cost of the program divided evenly amount the FOG accounts. This study has found that the annual consulting costs are $400,000 and Sewer Enterprise staff time (2 FTEs of Water Quality Inspectors) is approximately $273,000. There currently are 1,372 FOG accounts, which results in a charge of $40.92 per month ($673,000 divided by 1,372 divided by 12 months). The FOG Charge will increase at the same percent rate increases as the sewer service rates (see Appendix F). City of Santa Ana Stantec 135 2019 Water, Recycled Water, and Sewer Rate Study 5. Summary of Proposed Rates 5. SUMMARY OF PROPOSED RATES This Report used methodologies that are aligned with industry standard practices for rate setting as promulgated by AWWA, WEF, and all applicable laws, including California's Proposition 218. The proposed annual adjustments to the rates will allow the City to continue to provide reliable service to customers while addressing critical infrastructure deficiencies. The modifications to the rate structure will provide revenue stability, improve the defensibility of the water rates, and continue to equitably and proportionately recover costs from the customers. The complete schedules of rates over the planning period are summarized in Appendix E (Schedule 13 through Schedule 17) for the Water Enterprise and Appendix F (Schedule 18 through Schedule 22) for the Sewer Enterprise. It is important to note that, while in Year 1 rate revenues across all customer classes will increase on average by 7.0% and 3.0% for water and sewer respectively, the proposed rate structure adjustments (discussed further below) will result in single-family residential accounts with average water usage experiencing an increase of $4.46 per month (or just under ten percent) in their water bill and a decrease of $1.51 per month (or twenty one percent) in their sewer bill. Results will vary among different customers due to the proposed rate structure adjustments. To be clear, some customers' bills will increase by more than the average rate revenue adjustment for Year 1, while other customers' bills will increase by less. Starting in Year 2 (FY 2020/21) and thereafter, all customers will experience the same uniform percentage change to their bill. City of Santa Ana Stantec 136 2019 Water, Recycled Water, and Sewer Rate Study Disclaimer Disclaimer This document was produced by Stantec Consulting Services Inc. ("Stantec) for the City of Santa Ana and is based on a specific scope agreed upon by both parties. In preparing this report, Stantec utilized information and data obtained from the City of Santa Ana or public and/or industry sources. Stantec has relied on the information and data without independent verification, except only to the extent such verification is expressly described in this document. Any projections of future conditions presented in the document are not intended as predictions, as there may be differences between forecasted and actual results, and those differences may be material. Additionally, the purpose of this document is to summarize Stantec's analysis and findings related to this project, and it is not intended to address all aspects that may surround the subject area. Therefore, this document may have limitations, assumptions, or reliance on data that are not readily apparent on the face of it. Moreover, the reader should understand that Stantec was called on to provide judgments on a variety of critical factors which are incapable of precise measurement. As such, the use of this document and its findings by the City of Santa Ana should only occur after consultation with Stantec, and any use of this document and findings by any other person is done so entirely at their own risk. City of Santa Ma Stantec 137 2019 Water, Recycled Water, and Sewer Rate Study Appendix A: Water Financial Plan Schedules Appendix A: Water Financial Plan Schedules Schedule 1 Beginning Balances Schedule 2 Capital Improvement Plan Schedule 3 Projection of Cash Inflows Schedule 4 Projection of Cash Outflows Schedule 5 Forecast of Net Revenues and Debt Service Coverage for Water Enterprise Fund City of Santa Ana Stantec l A-1 2019 Water, Recycled Water, and Sewer Rate Study Appendix A: Water Financial Plan Schedules Final Report Water Enterprise FY 2019 Beginning Balances Schedule 1 FUND BALANCES: Total Cash Assets Restricted Reserves FUND 60 - Water O&M Cash and Cash Equivalents $33,440,786 Misc. $16,039 Account Receivable -Utility Sys Only $4,414,761 Water Customer Deposits $823,935 FUND 66 - Water Capital Cash and Cash Equivalents $6,288,983 Bond Proceeds $95,169 TOTAL ASSETS $44,255,737 $823,935 FUND 60 - Water O&M Accounts and Contracts Payable-$345,408 Accrued Compensated Absences-$195,615 FUND 66 - Water Capital Accounts and Contracts Payable-$142,601 Prior Year Carry Forward-$2,293,949 TOTAL LIABILIITIES-$2,977,573 $0 REVENUE FUND BALANCE $41,278,164 $823,935 City of Santa Ana Stantec IA-2 }}\} \ \\\\ \ \ ( \ ] (( § \\\\ { }}\\ \ { ] (oIlo ( \ ( NONI \ ] (( § \\\\ \ \\\\ \ \ \ }\\\ \ \ ] (( 0-1 0O \ \\\\ / \\\} \ $ ] (( \ \ \ ] / \ y�� w \\�\ \ }}\} } ( ] (( \ OINI \ / }, ] \_ , ] 00 ° } }/\\ \ \ ] (( ) 01 INN III IN, N \ ] / ) 3��\ ��\�\ \ k] IN � \;\\ \ ! 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Sewer Financial Plan Schedules Schedule 6 Beginning Balances Schedule 7 Capital Improvement Plan Schedule 8 Projection of Cash Inflows Schedule 9 Projection of Cash Outflows Schedule 10 Forecast of Net Revenues and Debt Service Coverage for Water Enterprise Fund City of Santa Ana Stantec l B-1 2019 Water, Recycled Water, and Sewer Rate Study Final Report Appendix B: Sewer Financial Plan Schedules Sewer Enterprise FY 2019 Beginning Balances Schedule 6 FUND BALANCES: Unrestricted Cash Assets Sewer Connection Fees FUND 54 - Sewer Capital Recover Cash and Cash Equivalents $1,526,620 Account Receivable -Utility Sys Only $346,448 FUND 55 - Sewer Connection Fee Cash and Cash Equivalents $9,848,639 FUND 56- Sanitary Sewer Service Cash and Cash Equivalents $6,701,561 Misc. $1,700 Account Receivable -Utility Sys Only $222,632 Restricted Cash and Cash Equivalents $8,798,961 $9,848,639 FUND 56- Sanitary Sewer Service Accounts and Contracts Payable-$22,958 Prior Year Carry Over $0 Accrued Compensated Absences-$71,801 TOTAL LIABILIMES-$94,759 $0 ;T�9q�U1�1U�I�1:L11_V L�Tq $8,704,202 $9,848,639 City of Santa Ana Stantec I B-2 0 (h 0 P P M s N L 'Q N O O O �O 4 N N N �„fl P U O � U t?t?N fR fR TN t?N N N y d "'mn oo � n M co m 0 U N O E E 00 O `� P O O h YI Q C N O, O, O YI YI N � u LL fR fRN fR fR tqN t?N N N n N O 4 Q P Q P L O N P N m N O O O P 4 N Q � fR fRN fR fR fRN t?N N N O N O P O h O� 4 I� VJ Q h O 00 O N N O M �Nf1 0 Q P N N O, O, O YI N YI N t?t?N fR t?fRN TN N M OO NO N Q O h P N O' Q O N 00 O, O, O O N h O N P `� N � d C� M O_ N_ N_ fR fRN fR fR tqN t?N N O n 00 O n n P N N N 00 0 u O P fR fRN fR fR fRN t?N N P O O N N C� M Q 4 O QO O O p d„ N Q N O N O O O, O, O O 4 N N N h O P —, 0 0 O t?t?N fR t?fRN TN N 10, O h YI N m NON CZ P O N h'Z s r 4 Q N O O O N `Q N M YI O u O P O_ fR fRN fR fR tqN t?N N O d O O^ O N O O O, O, O O � P 11 M C V h YI M u O P fR fRN fR fR fRN t?N N N O O 4 Q N N N Q 0 p P N N O M M ON N O O O 1 0 p h „ u O fR fRN fR fR tqN TN N N O l O P N d N N p N N O O O n 0 O N M -Q N 0 �Ofl O O C fR fRN fR fR TN t?N N O O m m m m � L d P � YI 00 N N O o � N � � m C O O E O WWN WtRWN tRN N w O L O OJ J O E C O O C N C O O W U O C O U C N« E > ry J N N J O O O N N N J N J C J C O O r J C ¢ C w C C O C 0 O_ ry O U 'c > U `� > d Y v r r v N > v rc O r v N O -6 J O N 0 N N O N C O Q m N a� 00 �z0 �U ° O m° (�(� m°> ° O C O— 4 I IN I m m = Ro O U N � �co L LL LL C U W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W � N a — m N O O N N LL LL C LL w w w w w w w w w w w w w w w w w w w w w w w w w w w w w w w N — N � N O O co N N Ii] LL LL N X C O — d F 0 Q N O `o N N I I NI I N h N h 2 LL LL N d F N P N N yLL�LL N O O U N N N (Y h M M P N h LL LL N O N o N LL LL o � N N m LL n � N _ ryLL N O OU N N LL LL F N N N P� LL pLL N O N N N N P, LL LL w w w w w w w w w w w w w w w w w w w w w w w w w w w w w w w T � O p v N E N1 m 0 m 0 wwwwwwwwwwwwwwwww wwwwwwwwww w o ) z Q U � oI @ m m - O U - m m = `m -° `m o °[ O `m o o s � m m o°t moo Umm W `° °`o Q o E o o-0 2i OI o `° I o -o O mo a m z m` o o a o o -`° E E@ m N 1 m m-o p m m m -0 d m` o m m o 4) o@ O 0 z0 m m E o p m m 1 `@' o E —, O T O E p m p` d°� � UII `m a I@ z m n m s o o f° o a `m I o m m - W¢ U O U m m U o U o o o Y m °� xm ° o o o U m' `m `m w ommmmm�mmO€m°�E �'UpO�m�o o�°moc o m¢ UI E °°°° i I I° D I Q i- E o 0 0 0 1� U° U m 3 2 2i 2i 2i m O C N I IN N N NN N Nan in mI m O� T - O o E �E N p N 66 S d L UEd N Q E N d m�iOE U O a3EE E OE 0 N O > £ > >N a 20 O E m o U = N N F o 22 Tas U 4 mEm <E N N O N UmQ _ m — m O C-cvmvmm�m N LL 2019 Water, Recycled Water, and Sewer Rate Study Appendix C: Water Cost of Service Schedules Appendix C: Water Cost of Service Schedules Schedule 11 Water System Revenue Requirements City of Santa Ana Stantec I C-1 O . . . . . . . . . . . . . . . . . . . . . . 0 N ' O V N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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O Y uu E ° o > �w 0 0x aw w Ewa E � .� w m E E m°Ucj Occc a0Uc wa ow.rw wEQ w w w wcv w EEm u ry °Oiw. w ``a E`cm cm E E 'c" '_Nwow owa w= 02w wm mmwO w 0 w nwm oUN 0 K u N N N Q K 2 O F U N E M U m N 1V O 0 N y N 0 V y Wy C V O O V N D M O 0 t7 V U1 rn� 0 0' V N N 0 N N V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N E h N 0 V m N N N (D N 0 O m o of 0 h 0 t7 N N N h O h N t7 t7 h N N N m O O O O h O N 0 t7 t7 Fli 2019 Water, Recycled Water, and Sewer Rate Study Appendix D: Sewer Cost of Service Schedules Annendix D: Sewer Cost of Service Schedules Schedule 12 Sewer System Revenue Requirements City of Santa Ana Stantec I D-1 2019 Water, Recycled Water, and Sewer Rate Study Appendix D: Sewer Cost of Service Schedules DRAFT Report Sewer System Cost Allocation to Functional Components Schedule 12 Salaries Regular $1,124,633 $1,012,170 $112,463 Salaries Part -Time $22,443 $20,199 $2,244 Salaries Overtime $91,318 $82,186 $9,132 Accrual Compensated Absences -$58,842 -$52,958 -$5,884 Retirement -Employer Normal Cost $351,450 $316,305 $35,145 Medicare Insurance $18,814 $16,932 $1,881 Health Insurance $249,659 $224,693 $24,966 Worker Compensation Insurance $131,108 $117,997 $13,111 Communications $2,198 $1,978 $220 Training, Transportation, Meeting $23,277 $20,950 $2,328 Membership, Subscription & Dues $19,292 $17,363 $1,929 Contract Services -Professional $1,832,066 $1,648,859 $183,207 Maintenance & Repair Machinery & Equipment $1,000 $900 $100 Miscellaneous Operating Expenses $324,111 $291,700 $32,411 Gas & Diesel $29,052 $26,147 $2,905 Rental City Equipment $154,939 $154,939 $0 Equipment Replacement Charges $110,828 $110,828 $0 Accident Repair & Replacement $2,855 $2,855 $0 Public Works Administrative Charges $437,446 $396,238 $41,207 Indirect Costs $104,919 $95,036 $9,883 Machinery & Equipment $191,734 $173,672 $18,061 Additional Staff $189,336 $170,402 $18,934 TOTAL O&M EXPENDITURES $5,353,636 $4,849,392 $504,244 Allocation 90.6% 9.4% CAPITAL COST ALLOCATIONS Capital Costs Cash Funded Capital Transfers Change in Fund Balance $3,090,000 $281,805 -$786,244 $3,090,000 $281,805 -$786,244 $0 $0 $0 TOTAL CAPITAL COSTS $2,585,562 $2,585,562 $0 Allocation 100.0•0 0.0% TOTAL ALLOCATION $7,939,197 $7,434,954 $504,244 Allocation 93.6% 6.4% City of Santa Ana Stantec I D-2 2019 Water, Recycled Water, and Sewer Rate Study Appendix E: Water Rate Design Schedules Aaaendix E: Water Rate Design Schedules Schedule 13 Schedule 14 Schedule 15 Schedule 16 Schedule 17 Proposed Rates Effective January 1, 2019 Proposed Rates Effective July 1, 2020 Proposed Rates Effective July 1, 2021 Proposed Rates Effective July 1, 2022 Proposed Rates Effective July 1, 2023 City of Santa Ana Stantec l E-1 m06 E N � a t' o U Cu U 0o U a Q m 0 0 0 0 0 0oo LLiU) U) 0.00 (0 I- In 6 N (0 N0. M 'IT I�Ul) 'IT 'IT O r N In O N (6 O o 0 0 0 M M M O O U)o o U)o O (O (O N V 00 m co M N N In 00 A] V M N %< M N M V (0 00 00 LO 0 r� M V V M O In r N In 0 00 M 00 M O O � N V 00 In N O � M• 6% M 0 M V (» (» V M - N %< M N M V (0 00 00 LO o � `n N V N 6% 6% (A N N N 0) H H U r.. ommqqqqqq In 00 N (OLO 0 N M V r LO 'IT 'ITr� O r N In O N M In O O In O O O InO _ O O (O N In o0 00 M o0 M M (O V M N %< M N M V (O o0 00 LO O) O) 00 r- In O) N 00 N V M In M (O N EA EA EA EA N (» 69 V M N %< M N M V (O CO 00 LO L r- m O (» (» (» U N O N r.. ommqqqqqq In 00 N (p 04 In O M V r LO V V I- O r N In O) N 0') In O O In O O O In O (O (O N V 00 M M N N In 00 V M - (V %< M N M V (O 00 00 LO I- In N M M N V N I- m O V 00 m m O 00 m 6 In 6 6 6 00 6 6 6 � � � 00 � � In W EA EA EA EA 7 N (» (» V M - N %< M N M V (O 00 00 LO A] U %0 7 13 4) t u VN N O N r.. T a) U) cu 0 cc (6LL + O U Q Q Q U ' U o.MmggqMLij In 00 N 0 M V r LO 'IT 'ITr� O N In d) N In O O In O O O In O (0 N In 00 00 M 00 M (0 c M - (V x M N M V (0 00 00 LO V In d) r- r O (0 O In 00 I- LO (O r N O (`') In d) d) O r r V O d) O W EA EA EAV vi , N (» 69 V M - N %< M N M V (0 CO 00 LO m LO LO C� ui C� N N 0) 0) cu H H U � 0) U T OI � f�6 t U w rn f6 N W w U 13 4) s u VN 000990099 r_ In OD N (O In 04 O � 'IT 'IT I- O r N In O N M In O O In O O O In O (O (O N V 00 M M N N In W V M - N N M V (O OD 00 LO I� 00 In 00 V 00 00 In M V r� In V V r� N V 6 O � V In In O r � � � V � LO O (» (» V M - N %< M N M V (O OD 00 0 A] LO c (00o LO � � 69 U 2019 Water, Recycled Water, and Sewer Rate Study Appendix F: Sewer Rate Design Schedules Appendix F: Sewer Rate Design Schedules Schedule 18 Schedule 19 Schedule 20 Schedule 21 Schedule 22 Proposed Rates Effective January 1, 2019 Proposed Rates Effective July 1, 2020 Proposed Rates Effective July 1, 2021 Proposed Rates Effective July 1, 2022 Proposed Rates Effective July 1, 2023 City of Santa Ana Stantec l F-1 O O N r- v U N O LO O N (O V (M (M LO 0') 00 CD(O � r� r� V (M , N 00 V Lo (o (M N V (.0 V (.0V O 0) ER ER ER ER N Lf) O Lr N r� O LO N (M , r� LO N LO CO 0 N m N m 00 CD Lo Lo V! " (M o m m 00 m, CO M CO O CO N , , (O M LO N N V 0 0 r� M I� N V 00 N I� co, M, L(i ER N (M 00 V O LO M ER ER ER ER M LO M ER ER ER ER N _ MN CO V (O co N m 0 v i O N O N r- v U O O O 0 0 CO 1� O N O O V O N O O V co V I W) OO (M r� C ) N V r� LO � � Lo 1� Eft Eft ER ER N O (O ER ER ER ER ER M LO , M M::V �r , r� LO , LO CO V I� m N CD CD r� O O r- ER ER ER ER N LO O V ER ER ER ER ER CO N V, LO O O O V (M N V , LO O r� r� O cf? N V M LO , M N ER ER ER ER M LO O ER ER ER ER N _ MN CO V (O co m LL U N (6 U) i 0 N N 7 N t U h r N 0 N r- v U 00r�19TMLOLOo00 V O O 00 0') N (O N (O W) W) 0) � 00 c) V N c) N V I� (.0 O N Lo N (f3 (f3 &Di &Di , M um a0 693 ER ER (f3 (f3 00 O N O O 00 N 0 I� 00 V � (M (M (.0C ) N (M N c) 0) CD0-)Lo V N V (.0 LO (.0Lo N N (f3 (f3 (f3 &Di , N O (O �&D���� �69� 00 , (M N V LO 00 0') (M O V r� r� m m V LO M 6 V I� (-i V 00 I� O P')' ER , N v M 0 T V ER ER ER ER , M 0 O 69� 69� 69� 69 N _ MN M gT (O 00 N R U 0 O LL _a E r O a U U) i N N O N r- v U r� (M LO (M (O V (O LO M M OO l(') OO M N CM O O � N l(') OO OO M ER ER ER ER � M (O N O ER ER ER (f3 (f3 M N LO V m LO O OO m V (O LO OO O M V O (» (» (» (» N � N (O I� �69� O M LO M (O l(i V (O O N M M, [�- N M O L6 O N V aO aO V ER , (M V O M r� O O ER ER (f3 , , M 0 69� 69� 69� 69� 69 N _ MN cM V (O aO M O LO N R L U 0 O LL _a E r O a U U) i N N N 7 N t U h M N O N r- 7 N V 4) LU v U rnrnmmMrnOov� 00 O LO N O O N 00 0 N In 0 N M V M, ER ER ER ER N 6- 6- M c ER ER ER 7 N (f3 (f3 O N V V r� � aO (O N V (O 0') (M LO V I� O (O (O 1 N 00 O O M M N LO M r� N LO, N (f3 (f3 ER ER , M 0 N O (f3 (f3 O N LO V 00 (M V 00 O I� 0 0 0 r� 00 O M O I� N, N O N, V (f3 (f3 (f3 (f3 , N V I�- N (f3 (f3 (f3 (f3 (f3 N MN cM V (O 00 M M LO LO (f3 N R L U 0 O LL _A E r O a U U) i NOTICEOF PUBLIC - Concerning proposed changes to the City of Santa Ana water and sewer rate structure and adjustments to water service, sewer service and consumption charges. The Santa Ana City Council will hold a public hearing at the time, date, and location specified above to consider a proposed five-year schedule of increases to the City's water rates and sewer charges. If adopted, proposed rate increases and charges will become effective on January 1, 2020; July 1, 2020; July 1, 2021; July 1, 2022; July 1, 2023, respectively. The public hearing will be conducted per California Constitution Article XIII D, Section 6 (also known as "Proposition 218"). This notice is being sent to all owners and customers of record whose parcels receive water and/or sewer service from the City of Santa Ana, who would be subject to the proposed rates and charges. All members of the public are invited to attend the public hearing. Additionally, under California State Law, owners and customers of record may submit a written protest to the proposed rate changes. Only one protest per parcel is permitted. Please refer to the "How Can I Participate?" section of this document for instructions on submitting a formal written protest against the proposed action. You may also appear at the public hearing at the date and time specified above. More information, including a rate estimator, is available online at: www.santaanautilityrates.com. The City of Santa Ana is proposing changes to its water and sewer rate structures and charges. The City of Santa Ana is required to provide water and sewer service to its customers at rates that do not exceed the cost of service, while maintaining essential water and sewer infrastructure. To demonstrate that the proposed rates comply with this rule, the City hired an independent, third -party consultant to determine that cost of service. A cost of service study is available for public review at the City and on the City's website (see next page). Customers who would be impacted by these changes are receiving this notice. r, EXPIRING RATE SCHEDULE $ $ $ The City's existing 5-year rate schedule was established in O 2014. A new schedule of rates is needed to ensure the City is recovering the costs of providing service, using industry best practices and meeting legal requirements. AGING SYSTEM The City of Santa Ana maintains a complex system of Opipelines and facilities to provide water and sewer service to customers. As the system ages, additional resources are needed to keep these assets in good working condition and benefit rate payers by making timely re -investments in infrastructure. FINANCIAL REQUIREMENTS The City of Santa Ana's Public Works Agency must ensure adequate revenue to meet its financial requirements, including bond repayments and maintaining cash reserves for a strong credit rating. The City of Santa Ana welcomes your participation and input throughout the process as the City Council considers the rate adjustments explained in this Notice. If you have questions or comments about the proposed rates, you can: GALL OR VISIT. The cost -of -service study and other information on the proposed adjustments and increases are available for review at the City's Public Works Department and on our website: www.Santa-Ana. org/pw/Water-and-Sewer. WRITE. Written protests maybe mailed to The City of Santa Ana, Attention: City Clerk, P.O. Box 1988, M30, Santa Ana, CA92701, or delivered in -person to City Hall, 20 Civic Center Plaza, Santa Ana. Written protests shall include the name, property address and signature of the person submitting the protest. Oral protests and protests submitted by email or other electronic means do not count as formal written protests. ATTEND THE PUBLIC HEARING: Written protests may also be submitted at the Public Hearing on November 19, 2019 at 5:45 p.m. in the City Council Chambers at 20 Civic Center Plaza, Santa Ana, CA 92701. All members of the public will have an opportunity to speak and give testimony regarding the proposed water, recycled water and sewer rate adjustments at the Public Hearing; however, only written protests will count toward a majority protest. Written protests must be received before the conclusion of the Public Hearing. DESCRIPTION OF PROPOSE The proposed rate structure for water service has four customer classes: single-family residential, multi -family residential, non-residential, and recycled water users. The proposed sewer rate structure also has four customer classes: single-family residential, multi -family residential, non-residential, and FOG customers. WHAT WOULD CHANGE? WATER RATE STRUCTURE The proposed water rate structure is comprised of two components: a fixed monthly service charge (the "Water Utility Charge"), and the variable water consumption charge (the "Water Usage Charge"). Four customer classes would be established — Single Family, Multi -Family, Non -Residential and Recycled Water users. Commodity costs would be distributed among them based on each customer classes' total water use. Commodity costs for recycled water would be allocated 100 percent to those customers. Utility costs would be allocated to each respective customer class based on meter size. Water usage charges would have two tiers based on the source of the water and its availability. The Tier 1 rate would recover the cost of groundwater extraction, the electricity for producing and distributing that water, and some other costs. Tier 2 would recover the costs of purchasing imported water and the electrical costs for distributing that volume of water. The allocation of water in each tier would be based on the amount of water supply that is available from each respective source. SEWER RATE STRUCTURE The variable Sewer Commodity Charge and fixed Service Charge would be replaced by a single fixed Sewer Utility Charge, based on the size of the water meter and customer class. FIXED CHARGES are independent of the amount of water used. They cover non -fluctuating costs such as capital projects, transmission, distribution, meters and service. VARIABLE CHARGES are calculated based on the amount of water moving through a customer's meter. These charges cover expenses such as purchased water, electricity and treatment chemicals. iED RATE STRUCTURES If the proposed rate changes are approved by the City Council, all water and sewer services will be billed at the rates set forth in the tables on the following pages: s 1 Current Effective L Rate January 1, Effective Effective Effective Effective (Per CCF*) 2020 July 1, 2020 July 1, 2021 July 1, 2022 July 1, 2023 TIER 1** $3.02 $2.03 $2.17 $2.31 $2.36 $2.41 TIER 2*** $3.59 $4.79 $5.13 $5.46 $5.57 $5.68 RECYCLED $242 $215 $2.30 $2.45 $2.50 $2.55 WATER *1 CCF=748 Gallons **See tier allocation table. *** Tier 2 is any amount of water used over the amount allocated in Tier 1 Meter Current Size Allocation 5/8" x 3/4" 3/4" 1,r 1 1/2" 2" 3" 4" 6" 8„ 0-22 CCF O-22 CCF 0-22 CCF O-22 CCF O-22 CCF 0-22 CCF O-22 CCF O-22 CCF 0 - 22 CCF Proposed Single Family Residential Allocation 0 - 10.50 CCF 0-16 CCF 0 - 26 CCF 0-52.5 CCF 0-84 CCF 0 - 184 CCF 0 - 331 CCF 0 - 682.5 CCF 0 - 1,260 CCF Proposed Non -Residential Customer Allocation 0-31 CCF 0 - 46.5 CCF O - 775 CCF 0-155 CCF O - 248 CCF O - 542.5 CCF O - 976.5 CCF O - 2,015 CCF 0 - 3,720 CCF Proposed Multi -Family Customer Allocation 0 - 8.5 CCF per Dwelling Unit Meter Size 5/8" x 3/4" 3/4" I 1„ 1 1/2" 2„ 3" 4" 61, 8" Current Effective Janu20 ary 1, Effective Effective Effective Effective Charges 20 July 1, 2020 July 1, 202 - y 1, 2022 July 1, 2023 $6.95 $20.51 $21.94 $23.37 $23.84 $24.31 $15.10 $30.76 $32.91 $35.05 $35.75 $36.47 1 $28.65 1 $51.27 $54.85 $58.42 $59.59 $60.78 $44.93 $102.53 $109.70 $116.83 $119.17 $121.55 $82.90 $164.04 $175.52 $186.93 $190.67 $194.48 $137.15 $358.84 $383.96 $408.92 $417.10 $425.44 $272.78 $645.91 $691.12 $736.04 $750.76 $765.78 $435.53 $1,332.83 $1,426.12 $1,518.82 $1,549.20 $1,580.18 $435.53 1 $2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 Current Multi -Family Residential Charge Per Unit: $4.75 SINGLE FAMILY RESIDENTIAL Current Effective Meter Size Charges January 1, 2020 5/8" x 3/4" 3/4" 1" 1 1/2" 3" 4" 6" $1.68 + (Number of CCF x 0.426) (1 CCF = 748 gallons) $5.60 $7.93 $12.59 $24.23 $38.20 $82.43 $147.62 $303.61 Effective Effective Effective Effective July 1, 2020 July 1, 2021 July 1, 2022 July 1, 2023 $5.88 $6.41 $6.99 $7.62 $8.33 $9.08 $9.90 $10.79 $13.22 $14.41 $15.71 $17.12 . (\'/J•J $25.44 $27.73 $30.23 $32.95 $40.11 $43.72 $47.65 $51.94 , $86.55 $94.34 $102.83 $112.08 A $155.00 $168.95 $184.16 $200.73 _I $318.79 $347.48 $378.75 $412.84 - MULTI -FAMILY RESIDENTIAL Meter Size Current Effective January 1, Effective Effective Effective Effective Gherges 2020 July 1, 2020 July 1, 2021 July 1, 2022 July 1, 2023 5/8" x 3/4" $8.40 $8.82 $9.61 $10.47 $11.41 3/4" $12.12 $12.73 $13.88 $15.13 $16.49 1" $19.57 $20.55 1 $22.40 1 $24.42 $26.62 $1.68 + 11/2" (Number $38.20 $40.11 $43.72 $47.65 $51.94 of CCF x 2" 0.426) $60.55 $63.58 $69.30 $75.54 $82.34 3" $131.32 $137.89 $150.30 $163.83 $178.57 (1 CCF 4" = 748 $235.63 $247.41 $269.68 $293.95 $320.41 gallons) 6" $485.21 $509.47 $555.32 $605.30 $659.78 8" $894.97 $939.72 $1,024.29 $1,116.48 $1,216.96 10" $1,416.49 $1,487.31 $1,621.17 $1,767.08 $1,926.12 Meter Size a urrenc January 1, tffecuve tffecuve tffecuve tffecuve Charges 202o July 1, 2020 July i, 2021 July 1, 2022 July 1, 2023 t- 5/8" x 3/4" $9.33 $9.80 $10.68 $11.64 $12.69 3/4" $13.52 $14.20 $15.48 $16.87 $18.39 1" $21.90 $23.00 $25.07 $27.33 $29.79 $1.68 + 11/2" (Number $42.85 $44.99 $49.04 $53.45 $58.26 of CCF x 2„ 0.426) $68.00 $71.40 $77.83 $84.83 $92.46 d - 3" $147.62 $155.00 $168.95 $184.16 $200.73 (1 CCF 4" = 748 $264.96 $278.21 $303.25 $330.54 $360.29 gallons) 61, $545.74 $573.03 $624.60 $680.81 $742.08 8" $1,006.73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 10" $1,593.43 $1,673.10 $1,823.68 $1,987.81 $2,166.71 $266 + FOG (Num.0ber $40 92 $42 97 $46.84 $51.06 $55.66 Customers of CCF x 0.426) rl ANA w 0 Respecto de los cambios propuestos a la estructura de tarifas de agua y alcantarillado, y ajustes a los cargos de consumo, servicio de agua y servicio de alcantarillado de la Ciudad de Santa Ana. El Consejo de la Ciudad de Santa Ana Ilevara a cabo una audiencia publica a la hora, an la fecha y an el lugar especificados anteriormente pare considerar un cronograma propuesto de cinco anos pare aumentar las tarifas de ague y los cargos de alcantarillado de la Ciudad. Si se adopta, los aumentos de tarifas y los cargos propuestos entraran an vigencia el 1 de enero de 2020; el 1 de julio de 2020; el 1 de julio de 2021; el 1 de julio de 2022; el 1 de julio de 2023, respectivamente. La audiencia publica se Ilevara a cabo segun el Articulo XIII D de la Constituci6n de California, Secci6n 6 (tambien conocido como "Proposici6n 218"). Este aviso se envia a todos los propietarios y clientes del registro cuyas parcelas reciben servicios de ague o de alcantarillado de la Ciudad de Santa Ana qua estarian sujetos a las tarifas y cargos propuestos. Todos los miembros del publico estan invitados a asistir a la audiencia publica. Ademas, de acuerdo con la ley estatal de California, los propietarios y los clientes del registro de la ciudad pueden presentar una protesta por escrito contra los cambios de tarifa propuestos. Solo se permite una protesta por parcela. Consulte la Secci6n ";Como puedo participar?" de este documento Para conocer las instrucciones pare presenter una protesta por escrito formal an contra de la acci6n propuesta. Tambien puede comparecer an la audiencia publica an la fecha y hora antes especificadas. Encontrara mas informaci6n, incluida una calculadora de tarifa, en Ifnea en: www.santaanautilityrates.com. La Ciudad de Santa Ana propone cambios en sus tarifas y estructuras de tarifas de agua y alcantarillado. La Ciudad de Santa Ana debe proporcionar un servicio de agua y de alcantarillado para sus clientes a tarifas que no excedan el costo del servicio, a la vez que mantengan la infraestructura esencial de agua y alcantarillado. Para demostrar que las tarifas propuestas cumplen con esta regla, la ciudad contrato a un consultor externo a independiente para determinar el costo del servicio. Un estudio de costo del servicio esta disponible Para la revision del publico en la alcaldia y en el sitio web de la ciudad (consulte la pagina siguiente). Los clientes que podrian verse afectados por estos cambios reciben pste aviso. VENCIMIENTO DEL CRONOGRAMA DE TARIFAS $ $ El cronograma actual de tarifas de 5 anos de la Ciudad se establecio en 2014. Se necesita un nuevo cronograma de Otarifas para garantizar que la Ciudad recupere los costos de proporcionar servicios, utilizando las mejores practicas de la industria y cumpliendo los requisitos legales. SISTEMA ENVEJECIDO La ciudad de Santa Ana mantiene un complejo sistema Ode tuberias a instalaciones para proporcionar servicios de agua y alcantarillado a los clientes. A medida que el sistema envejece, se necesitan recursos adicionales para mantener estos activos en buenas condiciones de trabajo y beneficiar a los pagadores de tasas al realizar reinversiones oportunas en infraestructura. REQUISITOS FINANCIEROS La Agencia de Obras Publicas de la Ciudad de Santa Ana debe garantizar ingresos suficientes para cumplir con sus requisitos financieros, incluidos los reembolsos de bonos y el mantenimiento de reservas en efectivo para una calificacion crediticia solida. La Ciudad de Santa Ana agradece su participacidn y aporte durante todo el proceso mientras el Concejo de la Ciudad considera los ajustes de tarifas explicados en este Aviso. Si tiene alguna pregunta o comentario sobre las tarifas propuestas, puede: LLAMA R O CONSU LTAR EN LI N EA. EI estudio del costo del servicioyotra informacion sobre los ajustes y aumentos propuestos estan disponibles Para su revision an el Departamento de Obras Publicas de la Ciudad y �© en nuestro sitio web: www.Santa-Ana.org/pw/Water-and-Sewer. ESCRIBIR. Las protestas escritas pueden enviarse por correo a la Ciudad a de Santa Ana. Atencion: Secretaria de la Ciudad, P.O. Box 1988, M30, Santa Ana, CA 92701, o entregarse en persona al Ayuntamiento, 20 Civic Center Plaza, Santa Ana. Las protestas por escrito deben incluir el nombre, la direccion de la propiedad y la firma de la persona qua envia la protesta. Las protestas orales y las protestas enviadas por correo electronico u otros medics electronicos no cuentan como protestas escritas formales. 4n ASISTIR A LA AUDIENCIA PUBLICA: Las protestas escritas tambien pueden entregarse an la audiencia publica el 19 de noviembre de 2019 a las 5:45 p. m. an las Salas del Concejo de la Ciudad an 20 Civic Center Plaza, Santa Ana, CA 92701. Todos los miembros del publico tendran la oportunidad de hablar y dar testimonio con respecto a los ajustes propuestos Para las tarifas de agua, de agua reciclada y de alcantarillado an la audiencia publica; sin embargo, solo las protestas por escrito se consideran an una protesta mayoritaria. Las protestas por escrito deben recibirse antes del final de la audiencia publica. DESCRIPCION DE LAS ESTRUCTU La estructura tarifaria propuesta para el servicio de agua tiene cuatro clases de clientes: usuarios residenciales unifamiliares, residenciales multifamiliares, no residenciales y de agua reciclada. La estructura de tarifas de alcantarillado propuesta tambien tiene cuatro clases de clientes: clientes residenciales unifamiliares, residenciales multifamiliares, no residenciales y FOG. , LA ESTRUCTURA DE LA TARIFA DE AGUA La estructura de la tarifa de agua propuesta consta de dos componentes: un cargo fijo mensual por servicio (el "Cargo de servicios publicos de agua") y el cargo variable por consumo de agua (el "Cargo por use de agua"). Se establecerran cuatro clases de clientes: usuarios unifamiliares, multifamiliares, no residenciales y de agua reciclada. Los costos del producto se distribuirran entre ellos en funcion del use total de agua de cada clase de cliente. Los costos del producto basico para el agua reciclada se asignarran al 100 por ciento a esos clientes. Los costos de servicios publicos se asignarran a cada clase de cliente respectiva en funcion del tamano del medidor. Los cargos por use de agua tendrian dos niveles basados en la fuente del agua y su disponibilidad. La tarifa de Nivel 1 recuperarra el costo de la extraction de agua subterranea, la electricidad para produciry distribuir esa agua, y algunos otros costos. El Nivel 2 recuperarra los costos de comprar agua importada y los costos electricos para distribuir ese volumen de agua. La asignacion de agua en cada nivel se basarra en la cantidad de suministro de agua disponible de cada fuente respectiva. LA ESTRUCTURA DE LA TARIFA DE ALCANTARILLADO El cargo variable por producto basico de alcantarillado y el cargo fijo por servicio se reemplazarran por un unico cargo por servicios publicos de alcantarillado, basado en el tamano del medidor de agua y la clase de cliente. LOS CARGOS FIJOS son independientes de la cantidad de agua utilizada. Cubren costos no fluctuantes como proyectos de capital, transmision, distribution, medidores y servicio. LOS CARGOS VARIABLES se calculan en funcion de la cantidad de agua clue pasa a traves del medidor de un cliente. Estos cargos cubren gastos tales como agua comprada, electricidad y productos quimicos de tratamiento. URAS DE TARIFAS PROPUESTAS Si los cambios de tarifas propuestos son aprobados por el Concejo de la Ciudad, todos los servicios de aqua y alcantarillado se facturaran segun las tarifas establecidas en las tablas en las siguientes paginas: s +, Tarifa A partir del A partir del A partir del A partir del A partir del Actual 1 de enero 1 de julio de 1 de julio de 1 de julio de 1 de julio de (Per CCF*) de 2020 2020 2021 2022 2023 J NIVEL 1** $3.02 $2.03 $2.17 $2.31 $2.36 $2.41 NIVEL 2*** $3.59 $4.79 $5.13 $5.46 $5.57 $5.68 RECICLADA $242 $215 $2.30 $2.45 $2.50 $2.55 AGUA *1 CCF=748 Galones **Consultar tabla de asignacion de niveles. "** El Nivel 2 es cualquier cantidad de agua utilizada por encima de la cantidad asignada en el Nivel 1 i r Asignacion Asignacion - Tama no del Asignacion propuesta pare propuesta ' Actual cliente residencial pare cliente no medidor unifamiliar residencial 5/8" x 3/4" 0 - 22 CCF 0 - 10.50 CCF 0 - 31 CCF 3/4" 0 - 22 CCF 0 - 16 CCF 0 - 46.5 CCF 1" 0-22 CCF 0-26 CCF 0-77.5 CCF 1 1/2" 0 - 22 CCF 0 - 52.5 CCF 0 - 155 CCF 2" 0 - 22 CCF 0 - 84 CCF O - 248 CCF 3" 0 - 22 CCF 0 - 184 CCF 0 - 542.5 CCF 4" 0 - 22 CCF 0 - 331 CCF 0 - 976.5 CCF 6" 0 - 22 CCF 0 - 682.5 CCF 0 - 2,015 CCF 8" 0 - 22 CCF 0 - 1,260 CCF 0 - 3,720 CCF Asignacion propuesta pare cliente residencial multifamiliar 0 - 8.5 CCF por unidad de vivienda Tamano del Cargos A partir del A partir del A partir del A partir del A partir del medidor Actuales 1 de enero 1 de Julio 1 de Julio 1 de Julio 1 de Julio de 2020 de 2020 de 2021 de 2022 de 2023 5/8" x 3/4" $6.95 $20.51 $21.94 $23.37 $23.84 $24.31 3/4" $15.10 $30.76 $32.91 $35.05 $35.75 $36.47 1" $28.65 $51.27 $54.85 $58.42 $59.59 $60.78 11/2" $44.93 $102.53 $109.70 $116.83 $119.17 $121.55 2" $82.90 $164.04 $175.52 $186.93 $190.67 $194.48 3" $137.15 $358.84 $383.96 $408.92 $417.10 $425.44 4" $272.78 $645.91 $691.12 $736.04 $750.76 $765.78 6" $435.53 $1,332.83 $1,426.12 $1,518.82 $1,549.20 $1,580.18 8" $435.53 $2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 Cargo residencial multifamiliar actual por unidad: $4.75 RESIDENCIAL UNIFAMILIAR Tamano del } r medidor - 5/8" x 3/4" 3/4" 1" 11/2" 3" 4" 6" 8" 10" Cargos A partir del A partir del A partir del A partir del A partir del Actuales 1 de enero 1 de Julio 1 de Julio 1 de Julio 1 de Julio de t de 2020 de 2020 de 2021 de 2022 2023 $5.60 $5.88 $6.41 $6.99 $7.62 $7.93 $8.33 $9.08 $9.90 $10.79 r ] $12.59 $13.22 $14.41 $15.71 $17.12 $1.68 + (Cantidad $24.23 $25.44 $27.73 $30.23 $32.95 (1 de CCF x 0.426) $38.20 $40.11 $43.72 $47.65 $51.94 r $82.43 $86.55 $94.34 $102.83 $112.08 (1 CCF = 748 $147.62 $155.00 $168.95 $184.16 $200.73 galones) $303.61 $318.79 $347.48 $378.75 $412.84 $559.71 $587.70 $640.59 $698.24 $761.08 $885.66 $929.94 $1,013.63 $1,104.86 $1,204.30 J RESIDENCIAL MULTIFAMILIAR Tamano del medidor 5/8" x 3/4" 3/4" 1'• 1 1/2" 2" 3" 4„ 8" 10" Tamano del medidor 5/8" x 3/4" 3/4" 1" 1 1/2" 2" 3" 4" 6" 8„ 10" Cargos A partir del A partir del A partir del A partir del A partir del Actuales 1 de enero 1 de Julio de 1 de Julio 1 de Julio 1 de Julio de 2020 2020 de 2021 de 2022 de 2023 $8.40 $8.82 $9.61 $10.47 $11.41 $12.12 $12.73 $13.88 $15.13 $16.49 $19.57 $20.55 1 $22.40 1 $24.42 $26.62 $1.68 + (Cantidad $38.20 $40.11 $43.72 $47.65 $51.94 de CCF x 0.426) $60.55 $63.58 $69.30 $75.54 $82.34 $131.32 $137.89 $150.30 $163.83 $178.57 (1 CCF = 748 $235.63 $247.41 $269.68 I $293.95 $320.41 galones) $485.21 $509.47 $555.32 $605.30 $659.78 ^ $894.97 $939.72 $1,024.29 $1,116.48 $1,216.96 $1,416.49 $1,487.31 $1,621.17 $1,767.08 $1,926.12 / Cargos Act uales $1.68 + (Cantidad de CCF x 0.426) (1 CCF = 748 galones) $26.06 + Clientes (Cantidad FOG de CCF x 0.426) A partir del A partir del A partir del A partir del A partir del 1 de enero 1 de Julio de 1 de Julio 1 de Julio 1 de Julio de 2020 2020 de 2021 de 2022 de 2023 $9.33 $9.80 $10.68 $11.64 $12.69 A $13.52 $14.20 $15.48 $16.87 $18.39 $21.90 1 $23.00 $25.07 $27.33 $29.79 . $42.85 $44.99 $49.04 $53.45 $58.26 $68.00 $71.40 $77.83 $84.83 $92.46 $147.62 $155.00 $168.95 $184.16 $200.73 $264.96 $278.21 $303.25 $330.54 1 $360.29 $545.74 $573.03 $624.60 $680.81 $742.08 $1,006.73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 $1,593.43 $1,673.10 $1,823.68 $1,987.81 $2,166.71 $40.92 $42.97 $46.84 $51.06 $55.66 Id A sir dung va ntxbc thoat cua Thanh pho Santa Ana va chinh ve dich vu cap ntxbc, dich vu thoat ntxbc va le ii do"i v&i ca cau mOc gia ntxbc nhirng dieu phi tieu thu. Hoi d6ng thanh pho Santa Ana se to chirc mot buoi dieu tran cling chung vao ngay gib, dia diem n@u tr@n de duyet qua lich trinh de nghi tang muc gia nuybc sir dung va nrvbc thoat cua Thanh pho trong nam nam. Neu duac thong qua, mixc gia va le phi gia tang s6 co hieu luc vao ngay 1 thong 1 nam 2020, 1 thong 7, 2020, 1 thong 7, 2021, 1 thong 7, 2022, 1 thong 7, 2023, theo thin try. Buoi di@u tran cong chung drvac thuc hien theo Di@u XI I I D, Muc 6 (con goi la "Ludt 218") cua Hien phap California. Thong bao nay drvac gixi den tat ca cac so hixu chu va khach hang hien co trong h6 so six dung dich vu va co nhixng 16 dat dang nhan dich vu nrvbc six dung va/hoac dich vu thoat nrvbc qua Thanh pho Santa Ana va Ia nhixng nguFai s6 bi anh hrvbng bbi sup thay doi mixc gia nrvbc va Ie phi de nghi nay. Moi thanh phan cong chung drvac mai tham dLF buoi di@u tran cong chung nay. Ngoai ra, theo Luat Tieu bang California, so hixu chu dat dai va khach hang hien co trong h6 so six dung dich vu co quyen g6ri thin viet tr@n giay chong doi nhixng thay doi ve mixc gia drvac de nghi. Moi mot 16 dat chi drvac mot thin chong doi. Vui long xem phan "Toi tham dLP bang cach nao?" trong tai lieu nay de drvac hrvbng dan ve cach viet thin chinh thixc tr@n giay chong doi nhixng thay doi da de nghi. Quy vi cung co the truc tiep tham dui buoi dieu tran cong chung nay vao ngay gib n@u tr@n. Thong tin chi tiet, gom ca cong cu rvbc tinh mixc gia, drvac trinh bay tr@n trang mang: www.santaanautilityrates.com. Thanh pho Santa Ana dang du a ra nhCrng de- nghi s0a d-i ke-t cau mOc gib va le phi dich vu nu'bc sO dung va dich vu thoat nu,bc. Thanh pho Santa Ana bat buoc phai cung cap dich vu nu'bc sO dung va thoat nu'bc cho khach hang v&i mOc gib khong vu'at qua chi phi dich vu nhu ng cung luc van duy tri ca s& ha tang nu'(rc va cong ranh. Be- chOng t6 rang cac mOc gib de- nghi tuan dung quy Binh nay, Thanh pho da tuye-n mot co van de tam Man doc lap de xac dinh chi phi dich vu nay. Ket qua cong cuoc xac dinh chi phi dich vu duac cong bo tai T6a thi chinh va tren trang mang cua Thanh pho (xin xem trang kb). Khach hang nao c6 the bi anh hu'ang bai nhOng thay do' i nay nhan du�ac thong bao nay. LICH TRINH MIYC GIA SAP HET HAN $ $ $ Lich trinh mOc gib nam nam hien tai cua Thanh pho da du'ac O du,a ra tU nam 2014. Do do Thanh pho can mot lich trinh gib m&i de bao dam la Thanh pho, qua su'sO dung cac thong le tot nhat trong nganh va dap Ong moi d61 h6i phap ly, thu lai du'ac chi phi cung cap dich vu. HE THONG CO KY Thanh pho Santa Ana hien c6 mot he thong du'ang ong va ca O✓ s& phOc tap d- cung cap dich vu nu'bc sO dung va dich vu thoat nu'bc cho khach hang. Vi he thong tang ngay tang cu va vi muon tie-p tuc hoat dong mot cach hoan hao va mang lai ich den cho khach hang, Thanh pho can nguon tai chanh de dau tu, lai kip thai vao ca s& ha tang. DOI HOI VE TAI CHANH Sb Cong chinh cua Thanh pho Santa Ana phai c6 du doanh thu de dap Ong cac nhu cau tai chanh cua ca quan, gom ca thanh town na trai phie-u va du'trCr tie-n mat de du'ac xep hang tin dung cao. Thanh ph6 Santa Ana han hanh chao don su' tham gia va d6ng g6p y kie-n cua quy vi trong suot tie-n trinh nay trong luc Hoi dung thanh pho cOu xet nhirng !hay doi du'ac giai thich trong Th6ng bao nay. Neu quy vi c6 dieu gi that mac hoac c6 nhan xet gi ve mOc gia de- nghi, quy vi c6 the: GOI DIEN THOAI HOAC TRU'C TIEP DEN VAN PHONG. Quy vi c6 the xem thong tin ve cbng trinh nghi@n cipu ve chi phi dich vu va nhixng thong tin khac ve cac dieu chinh va tang le phi de nghi tai Sb Cbng chinh Thanh pho va tr@n trang mang cua chung tbi: www.Santa-Ana.org/pw/Water- and-Sewer. GUI THU. Quy vi c6 the giai thu chong doi ve The City of Santa Ana, Attention: City Clerk, P.O. Box 1988, M30, Santa Ana, CA 92701, hoac tan tay mang den t6a thi trupbng City Hall, 20 Civic Center Plaza, Santa Ana. Thry chong doi viet tr@n giay phai c6 ten, dia chi cua dat dai/nha cixa va chix ky cua ngupbi giai thu chong doi. Chong doi bang mieng va cac thu chong doi giai qua email hoac cac phrvong tien dien tip khac khbng drvoc xem la thu chong doi chinh thipc viet tr@n giay. THAM DU BUOI DIEU TRAN CONG CHUNG: Thry chong do viet tr@n giay cung c6 the drvoc n6p trong Buoi dieu tran cbng chung, ngay 19 thong 11 nam 2019, luc 5 gibs 45 chieu tai Nghi trupbng Hoi d6ng thanh pho tai 20 Civic Center Plaza, Santa Ana, CA 92701. Tat ca moi ngupbi trong cling d6ng s6 c6 ca h6i phat bieu va trinh bay li@n quan Mn de nghi dieu chinh mipc gia nrvbc, nrvbc tai six dung va nrvbc thoat trong Buoi dieu tran cbng chung, tuy nhi@n, chi c6 thu chong doi viet tr@n giay chinh thipc mbi drvoc tinh vao trupbng hop da so chong doi. Thry chong doi viet tr@n giay phai drvoc nhan trubc khi Buoi dieu tran cbng chung ket thuc. JFMO TA CO' CAU MUC GIA 7� Ca cau m be gib de- nghi cho nu'ac sir dung gom co hai thanh phan: 16 phi dich vu co dinh hang thbng (" Le phi tien ich nurac") va le phi tieu thy nu'ac thay doi (' Le phi sir dung nurac"). Bon hang khach hang du'ac thanh lap - Ngu'ai dung nu'ac thuoc mot gia Binh rieng, nhieu gia Binh, cc sa khong phai nha a va nu'ac tbi sir dung. Chi phi tien nghi se du'ac phan phoi trong nhirng hang nay can cir tren tong so lu'ang nu'ac m6i hang khach hang sir dung. Chi phi tien ich cho nu'ac tbi sir dung se du'ac phan phoi 100% cho khach hang trong hang nay. Chi phi tien ich se du'ac phan phoi cho moi hang khach hang theo ca cua long ho. D • CO' CAU MCPC GIA NU'O'C SLP DUNG Ca cau mixc gia de nghi cho nrvoc sie dung gom c6 hai thanh phan: le phi dich vu cc dinh hang thang ("L(§. phi tien ich nubc") va le phi ti@u thy nu6c thay doi ("L(§ phi sie dung nrvbc"). Bon hang khach hang ducc thanh lap - Ngubi dung nu6c thu6c mot gia Binh ri@ng, nhieu gia Binh, cc sb khong phai nha a va nu6c tai sie dung. Chi phi tien nghi s6 ducc phan phoi trong nhixng hang nay can cup tr@n tong so luang nu6c moi hang khach hang sie dung. Chi phi tien ich cho nu6c tai sie dung s6 ducc phan phoi 100% cho khach hang trong hang nay. Chi phi tien ich s6 ducc phan phoi cho moi hang khach hang theo c5 cua d6ng h6. Gia le phi s v dung nu6c s@ co hai bac t y theo ngu6n nu6c va luang n vac san co. MOPc gia Cap 1 ap dung de thy lai chi phi khai thac nu6c ngam, chi phi dien de san xuat va phan phoi nu6c do va mot so chi phi khac. MOPc gia Cap 2 ap dung de thy lai chi phi mua nu6c nhap vao t0P ben ngoai. chi phi dien cho viec phan phoi khoi luang nu6c do. Viec phan phoi nu6c cho moi cap s6 can cuptr@n muc cung cap nu6c co san t0P moi ngu6n twang Ong. CO' CAU MCPC GIA NU'O'C THOAT Gia le phi tien ich cho nu6c thoat thay doi va gia le phi dich vu co dinh s6 ducc thay the voi chi mot gia le phi tien ich nrvoc thoat co dinh, can cup theo c5 cua d6ng h6 nrvoc va hang khach hang. GIA LE PHI CO DINH doc lap vai so luang nudc sir dung. Nhivng le phi nay dung de thanh town cac chi phi cc dinh, khong thay doi nhu cac dui an von, tai nudc, phan phoi, long ho nudc va dich vu. GIA LE PHI THAY D6I duac tinh theo so luang nudc di ngang qua long ho cua khach hang. Nhivng chi phi nay dung d- thanh town cho nhivng chi phi nhu tie-n mua nudc, dien va h6a chat loc nudc. NGHI Neu de nghi thay doi mirc gia disc Hoi dong thanh pho chap thuan, tat ca cac dich vu nir&c va nu&c thoat se duo'c lap hda dan theo mire gia neu trong cac bang & nhUng trang sau. 4 d k;wMUC gia Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay hien tai 1 gieng 1, 1 *hang 7, 1 *hang 7, 1 *hang 7, 1 *hang 7, (Moi CCF*) 2020 2020 2021 2022 2023 CAP 1** $3.02 $2.03 $2.17 $2.31 $2.36 $2.41 CAP 2*** $3.59 $4.79 $5.13 $5.46 $5.57 $5.68 NU'O'C TAI $2 42 $2.15 $2.30 $2.45 $2.50 $2.55 SLY DUNG *1 CCF=748 ga-long (khoang 4 lit) * Xem bang Iuang nuac phan phoi cua moi cap. *** Cap 216 Iuang nuac sir dung mot qua Iuang nuac duac phan phoi & Cap 1 Luang oust Luang nuac phan Luang nuac phan Luang nuac phan Ca - phan phoi phoi de nghi cho phoi de nghi cho phoi de nghi cho v'l � ong d"ho hien tai nha to nhan mot co,sa khong phai khu nha a gia dinh nha to nhan nhi6u gia din X 0 - 22 CCF 0 - 10.50 CCF 0 - 31 CCF 3/4 3/4" 3/4" 0 - 22 CCF 0 - 16 CCF 0 - 46.5 CCF V. 0 - 22 CCF 0 - 26 CCF 0 - 775 CCF 1 1 /2" 0 - 22 CCF 0 - 52.5 CCF 0 - 155 CCF 0 - 8.5 CCF 2" 0 - 22 CCF 0 - 84 CCF 0 - 248 CCF moi dan vi a 3" 0 - 22 CCF 0 - 184 CCF 0 - 542.5 CCF 4" 0 - 22 CCF 0 - 331 CCF 0 - 976.5 CCF 6" 0 - 22 CCF 0 - 682.5 CCF 0 - 2,015 CCF 8" 0 - 22 CCF 0 - 1,260 CCF 0 - 3,720 CCF DE NGHI kich th0'o'c • HANG • THANG Le phi Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay met hies tai 1 gieng 1, 1 thong 7, 1 thong 7, 1 thong 7, 1 thong 7, 2020 2020 2021 2022 2023 5/8" x 3/4.. $6.95 $20.51 $21.94 $23.37 $23.84 $24.31 3/4" $15.10 $30.76 $32.91 $35.05 $35.75 $36.47 1 V. 1 $28.65 1 $51.27 1 $54.85 $58.42 $59.59 $60.78 1 1/2" $44.93 $102.53 $109.70 $116.83 $119.17 $121.55 2" $82.90 $164.04 $175.52 $186.93 $190.67 $194.48 3" $137.15 $358.84 $383.96 $408.92 $417.10 $425.44 4" 1 $272.78 1 $645.91 $691.12 $736.04 $750.76 $765.78 6" $435.53 $1,332.83 $1,426.12 $1,518.82 $1,549.20 $1,580.18 8" $435.53 $2,460.60 $2,632.84 $2,803.97 $2,860.05 $2,917.25 Gia le phi hien tai cua moi don vi cua khu nha 6, nhieu gia dinh: $4.75 NHA TU NHAN MOT GIA DINH kich thvdc Le phi met hien tai 5/8" x 3/4" 3/4" V. 11/2" 2" 3" 4" 6" 8" 10" $1.68 + (SS of CCFx 0.426) (1 CCF = 748 ga-long) Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay 1 gieng 1, 1 thong 7, 1 thong 7, 1 thong 7, 1 thong 7, 2020 2020 2021 2022 2023 $5.60 $5.88 $6.41 $6.99 $7.62 $7.93 $8.33 $9.08 $9.90 $10.79 $12.59 $13.22 $14.41 1 $15.71 1 $17.12 $24.23 $25.44 $27.73 $30.23 $32.95 $38.20 $40.11 $43.72 $47.65 $51.94 $82.43 $86.55 $94.34 $102.83 $112.08 ^r L-AMIW: $147.62 $155.00 $168.95 $184.16 $200.73 $303.61 $318.79 $347.48 $378.75 $412.84 $559.71 $587.70 $640.59 1 $698.24 1 $761.08 $885.66 $929.94 $1,013.63 $1,104.86 $1,204.30 KHU NHA d NHIEU GIA DINH kich th U'o'c Le phi Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay met hien tai 1 gieng 1, 1 thong 7, 1 thong 7, 1 thong 7, 1 thong 7, 2020 2020 2021 2022 2023 5/8" x 3/4" $8.40 $8.82 $9.61 $10.47 $11.41 3/4" $12.12 $12.73 $13.88 $15.13 $16.49 V. $19.57 $20.55 $22.40 $24.42 $26.62 11/2" $1.68+ $38.20 $40.11 $43.72 $47.65 $51.94 (So of CCF 2^ x 0.426) $60.55 $63.58 $69.30 $75.54 $82.34 3" (1 CCF $131.32 $137.89 $150.30 $163.83 $178.57 = 748 4 ga-16ng) $235.63 1 $247.41 $269.68 $293.95 1 $320.41 $485.21 $509.47 $555.32 $605.30 $659.78 8" $894.97 $939.72 $1,024.29 $1,116.48 $1,216.96 10" $1,416.49 $1,487.31 $1,621.17 $1,767.08 $1,926.12 CO' SO' K$IONG PH(kI NHA CY fr kich th U'o'c Le phi Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay Hieu luc ngay met hien tai 1 gieng 1, 1 thong 7, 1 thong 7, 1 thong 7, 1 thong 7, 2020 2020 2021 2022 2023 5/8" x 3/4" $9.33 $9.80 $10.68 $11.64 $12.69 3/4" $13.52 $14.20 $15.48 $16.87 $18.39 V. $21.90 $23.00 $25.07 $27.33 $29.79 $1.68 + 1 1/2" (SS of $42.85 $44.99 $49.04 $53.45 $58.26 CCFx 2 0.426) $68.00 $71.40 $77.83 $84.83 $92.46 3" $147.62 $155.00 $168.95 $184.16 $200.73 (1 CCF 4" = 748 $264.96 $278.21 $303.25 $330.54 $360.29 ga-long) 6" $545.74 $573.03 $624.60 $680.81 $742.08 8" $1,006.73 $1,057.07 $1,152.21 $1,255.91 $1,368.94 101, $1,593.43 $1,673.10 $1,823.68 $1,987.81 $2,166.71 Khach hang $26.06+ I (So CCF x $40.92 $42.97 $46.84 $51.06 $55.66 FOG USPS PostalOne! Page 1 of 1 Company Detai Company Name INFOSEND INC Address 4240 E LA PALMAAVE ANAHEIM, CA 92807-1816 Contact Name MATT SCHMIDT Phone Number (714)993-2690 Profit Indicator P PS Form 3607R - Mailing Transaction Receipt Account Holder Account Number 9000012400 Account Holder Permit Number 146 Account Holder Permit Type PI Account Holder CRID 8536585 Post Office of Permit ANAHEIM CA92899-9301 Post Office of Mailing ANAHEIM CA92899-9301 Post Office of Permit Cost Center 050222-0218 Post Office of Mailing Cost Center 050222-0218 Mailing Agent Name INFOSEND Mailing Agent CRID 20292842 Mail Owner Name INFOSEND Mail Owner CRID 20292842 JOB ID _ 89506 Customer Reference ID 89506 CAPS Transaction Number N/A Class of Mail USPS Marketing Mail Processing Category Letters Postage Statement ID 355606163 Mailing Group ID 251279781 Mailer's Mailing Date 10/042019 Mailer Declared Total Pieces 45,852 pcs. Mailer Declared Total Weight 4,919.9196 lbs. Mailer Declared Weight of a single -piece 0.1073 lbs. USPS Determined Total Pieces 45,852 pcs. USPS Determined Total Weight 4,919.9196 lbs. USPS Determined Weight of a single -piece 0.1073 lbs. Total Number of Containers 227 Total Adjusted Postage Payment Date and Time Payment Transaction Number Adjustment Transaction Number Mailer Figures Adjusted? Person authorizing adjustment Name Phone Number Acceptance Site Mailer ID Clerk Initials Mail Arrival Date and Time $ 8,515.27 10/042019 14:57 201927716574648M1 No AHG 10/042019 14:14 EXHIBIT 4 https://www.uspspostalone.com/PostageProcessingWeb/receipt.do?popup=yes&pstg_stmt ... 10/07/19