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03-03-20 Agenda PacketAG EN DA Poway C ity Co unci l Council Chamber I 13325 Civic Center Drive I Poway, CA I 92064 M a rch 3, 202 0 I 7 p .m . Thank you for participat ing in your local government and the City of Poway counci l meetings. Meetings I Regular City Council meetings are held on the first and third Tuesday of the month at 7:00 p.m . Public Meeting Access I Regular City Council meetings are broadcast live on Cox Channel 24 and Spectrum Channel 19. Council meeting videos are archived and available for viewing on the City's webs ite at www.poway.org/councilmeetings. Agenda Materials I This agenda contains a brief summary of each item the Council will consider. The Agenda and Agenda Packet is posted seven (7) days prior to regular City Counc il meetings and are available for viewing on the City's website at www.poway.org or in the City Clerk's office of City Ha ll, 13325 Civic Center Drive. Sign up at www.poway.org to receive email notifications when City Council agendas are published on l ine. Items listed on the agenda with a"#" symbol are in preparation. Speakers I Persons wishing to address the Council on matters not on t he agenda may do so under Public Comment. Those wishing to speak on items on the agenda may do so when the item is being considered. Please subm it your Comment Card to t he City Clerk prior to the meeting or the announcement of the item. You may speak up to three (3) minutes. The Mayor may reduce this time if there are a large number of speakers. American Di sabi lities Act Ti t le II I In compliance w ith the Americans with Disabilities Act of 1990, persons with a disability may request an agenda in appropriate alternative formats as required by Title II. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk's office 858.668.4530 at least 24 hours prior to the meeting. Reminder I As a courtesy to all attendees, please silence all electronic devices and engage in conversations outside the Counci l Chamber. The City Council also sits as the City of Poway Planning Commission, Poway Housing Authority, Public Financing Authority and Successor Agency to the Poway Redevelopment Agency Steve Vaus Mayor Caylin Frank Deputy Mayor Dave Grosch Councilmember Barry Leonard Councilmember John M u llin Councilmember CALL TO ORDER: ROLL CALL: PLEDGE O F A LLEGIANCE : MOMENT OF SILENCE : PRESENTATION: Poway High School Team Spyder Robotics PUBLIC COMMENT: In accordance w ith State law, an item not scheduled on the agenda may be brought forward by the genera l public for comment; however, the City Council will not be abl e to discuss or take act ion on any issue not included on the agenda. You may speak up to three (3) minutes. Speakers have one opportunity to address the Counci l under Public Comment. CONSENT CALENDAR: The Consent Calendar may be enacted in one motion by the Council with a Roll Cal l Vote w ithout discussion unless a Councilmember, a member of the public, or City Manager requests that an item be removed for discussion. WAIVER OF ORDINANCE TEXT READING: This is a motion to waive the reading of the text of al l ordinances and reso lutions at this meeting. 1. Ratification of Warrant Registers for the Periods of January 20, 2020 through January 24, 2020; and January 27, 2020 through January 31, 2020 2. Approval of the February 4, 2020 Regular City Council Meeting Minutes 3. Acceptance of City Facilities Roofing and HVAC Replacement 2018-19, Bid No. 19-012 O RDINAN CE S FOR I NTRODUCTION: None. O RDINANC ES FO R ADOPTION: None. PU BLI C H EARI N GS: 4. Public Hearing for Approval of New Rate Structures, Two-Year Water, Recycled Water, and Wastewater Rates, and Approva l of and Appropriation for One-time Salary Range Adjustments City Manager's Recommendation: It is recommended that the City Council take public input, close the pub lic hearing and adopt the Resolutions if a majority protest does not exist. STAFF REPORTS: None. WORKSHOPS: None. COUNCIL-INITIATED ITEMS: None. COUNCIL COMMITTEE REPORTS and ANNOUNCEMENTS: Pursuant to AB1234 -(G .C. 53232(d)) CITY MANAGER ITEMS: CITY ATTORNEY ITEMS: (Inc luding any public report of any action taken in closed session) ADIQURNMEN T State of California County of San Diego ) ) ss. ) AFFIDAVIT OF POSTING I, Faviola Medina, CMC, City Clerk of the City of Poway, hereby declare under penalty of perjury that this notice of a Regular Meeting as called by the City Council of the City of Poway was posted and provided on February 25, 2020 at 5:30 p.m. Said meeting to be held at 7:00 p.m., March 3, 2020, in the Poway City Council Chambers, 13325 Civic Center Drive, P, w , California. Said notice was posted on the Bulletin Board at the entrance to City Hall. March 3, 2020, Item #1 AGENDA REPORT City of Poway DATE : TO: FROM : CONTACT: March 3, 2020 Honorable Mayor and Members of the City Council Aaron Beanan, Director of Finance ~ Stacey Tang, Finance Manager 6( (858) 668-4426 or st ang@poway.org CITY COUNCIL SUBJECT: Ratification of Warrant Registers for the Periods of January 20, 2020 through January 24, 2020; and January 27, 2020 through January 31, 2020 Summary: The attached warrant register reports for the periods of January 20, 2020 through January 24, 2020; and January 27, 2020 through January 31, 2020, are submitted to the City Council for ratification/approval. Recommended Action: It is recommended that the City Council ratify/approve the attached warrant registers. Discussion : Weekly registers of audited demands are periodically submitted to the City Council by the Director of Finance for ratification/approval. Date January 20, 2020 through January 24, 2020 Amou nt $821,226.25 Warrants for amounts in excess of $100,000 for this period include: Warrant Check Number December 2019 Building Services 409128 Sewer Line Repa ir Replace 14/15 Pomerado Road Project 409170 1 of 21 Amount $ 154,702.94 $ 134,254.86 March 3, 2020, Item #1 Date January 27, 2020 through January 31 , 2020 Amount $6,732,238.57 Warrants for amounts in excess of $100,000 for this period include: Warrant Check Number Amount January 2020 Medica l Insurance 409239 $ 224,862.19 Fire/EMS Dispatch Services 409240 $ 103,397.30 Water Treatment Plant Upgrades Project 40925 7 $ 113,202.66 November 2019 Law Enforcement Serv ices 409275 $ 1,109,065.18 December 2019 Water Purchases 409276 $ 740,752.43 Payroll 01/31/20 905445 $ 522,395.15 Local Agency Investment Fund Deposit 905453 $ 3,500,000.00 Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: The total amount of warrants for the period of January 20, 2020 through January 24, 2020 is $821,226.25. The total amount of warrants for the period of January 27, 2020 through January 3 1, 2020 is $6,732,238.57 . Public Notification: None. Attachments: A. Warrant register for the period of January 20, 2020 through January 24, 2020 B. Warrant register for the period of January 27, 2020 through January 31, 2020 Reviewed/ Approved By: Assistant City Manager 2 of 21 Reviewed By: Alan Fenstermacher City Attorney Approved By: Chr~ City Manager March 3, 2020, Item #1Q The City of Poway Director of Finance Submits the Following Register of Demands Run Date: 13-Feb-20 for the period 1/20/2020 -1/24/2020 and Recommends its Ratification/Approval: w ' 0 Check Check Payee/ """ N Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount -409095 23-Jan-20 506 AO REED & CO 96277 HVAC Maintenance 415010 43020 $4,912.67 314848 City Hall: chiller repair 415010 43020 $637.00 317722 Hamburger Factory: replace thermostat 415010 43020 $170.08 Total for Check 409095: $5,719.75 409096 23-Jan-20 196 AIRGAS USA, LLC 9096852434 Pool Carbon Dioxide 203020 45200 $202.83 409097 23-Jan-20 196 AIRGAS USA, LLC 9096813191 Medical Oxygen 503050 47500 $158.47 9096912743 Medical Oxygen 503050 47500 $47.39 Total for Check 409097: $205.86 409087 23-Jan-20 999995 ALMA JOSE JR., ALEJANDRO 2014215.001 Deposit Refund Permit #22319 205020 74710 $300.00 409098 23-Jan-20 953 AMERICAN MESSAGING SERVICES, LLC L 1073904UA Pagers 501050 41050 $444.43 )> 409099 23-Jan-20 1644 AMP UNITED LLC 2190152-PP13 Buehler Reservoir Rehabilitation 80005106 P5100 $1,520.00 -t -t )> 409100 23-Jan-20 21 ARAMARK REFRESHMENT SERVICES 6294737 Coffee for Fire Station 1 and 2 500050 47600 $232.01 n ::c 6274501 Coffee for Fire Station 3 500050 47600 $99.40 3:: m z Total for Check 409100: $331.41 -t )> 409101 23-Jan-20 835 AT&T 14086705 BAN 939102657111/24/19-12/23/19 202020 33010 $21.38 409102 23-Jan-20 835 AT&T 14141127 BAN 9391026542 12/06/19 -01 /05/20 420140 22000 $21.38 409103 23-Jan-20 835 AT&T 14159858 BAN 9391031633 12/10/19-01/09/20 205020 33010 $41.11 409104 23-Jan-20 835 AT&T 14159613 BAN 9391026537 12/10/19-01/09/20 205020 33010 $60.84 409105 23-Jan-20 835 AT&T 14159618 BAN 9391026545 12/10/19-01/09/20 Library 206020 33010 $60.84 Alarm 409106 23-Jan-20 835 AT&T 14160602 BAN 9391053607 12/10/19-01/09/20 202020 33010 $61.11 409107 23-Jan-20 453 BAY CITY EQUIPMENT INDUSTRIES, INC W217450 Generator Maintenance PS #752 402060 43080 $390.00 409108 23-Jan-20 1280 BCM CUSTOMER SERVICE 89945-0120 Unit 775: Drum Repair 413010 43120 $1,192.75 409109 23-Jan-20 1489 BENETRAC 730495 Employee Benefit Mgmt. System: January 2020 F1000 87399 $726.00 409086 23-Jan-20 999998 CAIN, ZACHARY 1/20 -Cain(2) Tuition Reimbursement: Rope Rescue 121010 14040 $750.00 Technician 1/20 -Cain Tuition Reimbursement: Confined Space (2008) 121010 14040 $325.00 Total for Check 409086: $1,075.00 409110 23-Jan-20 532 CANNON PACIFIC SERVICES, INC 151121 Bus Stop Maintenance 80002434 P2430 $2,021.50 409111 23-Jan-20 889 CHEMTRADE CHEMICALS 92813928 Aluminum Sulfate, 01/15/2020, 24 tons 402060 45200 $4,951.98 CORPORATION 409112 23-Jan-20 1479 CIRO'S LANDSCAPING INC. 12578 Landscape Maintenance 204020 41600 $309.35 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 2of10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount ~ 409112 23-Jan-20 1479 CIRO'S LANDSCAPING INC. 12578 Landscape Maintenance 206020 41600 $464.08 0 12578 Landscape Maintenance 402060 41600 $356.61 ..... N ..... 12578 Landscape Maintenance 414040 41600 $1,624.20 12578 Landscape Maintenance 501050 41600 $1,417.24 12578 Landscape Maintenance 504050 41600 $309.35 Total for Check 409112 $4,480.83 409113 23-Jan-20 1244 CLA-VAL 784946 Cla-Val Parts for R-14 402060 43080 $6,222.20 784944 R-17 Cla-Val Parts 402060 43080 $8,491.06 Total for Check 409113 $14,713.26 409114 23-Jan-20 1049 COAST EQUIPMENT RENTALS 50950 Holiday Decos: bucket lift truck 411040 49360 $490.22 409115 23-Jan-20 561 COMMERCIAL & INDUSTRIAL ROOFING CO., INC. MR4058-1 Community Pool: four leaks repaired 415010 43040 $1,373.69 MR4023-1 Old Train Barn: three leaks repaired 415010 43040 $471.81 MR4021-1 Fire Station #3: two leaks repaired 415010 43040 $391.38 MR4022-1 Community Pool: one leak repaired 415010 43040 $163.78 Total for Check 409115 $2,400.66 409116 23-Jan-20 1094 COMMERCIAL AQUATIC SERVICES 120-1121 Pool Chemicals 203020 45200 $613.17 120-1112 Pool Bulk Acid 203020 45200 $481.20 Total for Check 409116 $1,094.37 409117 23-Jan-20 847 CORODATA MEDIA STORAGE INC. DS1291232 Backup Data Storage: Dec 2019 113010 41200 $163.02 409118 23-Jan-20 82 CORODATA RECORDS MANAGEMENT RS4554104 Records Storage Climate Control 100010 49040 $151.18 INC. 12/01/19-12/31 /19 RS4551403 Records Storage 12/01 /19-12/31 /19 101010 41200 $951.95 Total for Check 409118 $1,103.13 409119 23-Jan-20 1309 CORODATA SHREDDING, INC. DN1253299 Records Shredding 12/01/19-12/31/19 101010 41200 $119.24 409120 23-Jan-20 286 COSTCO WHOLESALE 7751212531 CPR/AED Training Reimbursed by JPIA 200020 49040 $80.11 7751212431 Janitorial Supplies 208020 47200 $63.32 7758198306 Winter Festival Food for Staff & Volunteers 208020 47600 $269.01 7758199306 Winter Festival Teen Volunteer Fundraiser 208020 47600 $153.77 Supplies 775742641 Winter Festival Teen Volunteer Fundraiser 208020 47600 $38.51 Supplies Total for Check 409120: $604.72 409121 23-Jan-20 285 COUNCIL OF WATER UTILITIES COWU JAN2020 Council of Water Utilities Meeting: 01/21/2020 401060 14010 $40.00 409122 23-Jan-20 329 COUNTY OF SAN DIEGO DEH DEH2002-HUPFP-Permit Renewal DEH2002-HUPFP-105397 413010 57300 $2,209.00 105397 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 3 of 10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount u, 409123 23-Jan-20 488 COUNTY OF SAN DIEGO REGIONAL 2OCTOFPOM06 Radio Maintenance 411040 43180 $607.91 0 COMMUNICATIONS SYSTEM -ti DEPARTMENT OF JUSTICE N 409124 23-Jan-20 627 145088 Fingerprinting: December 2019 121010 49340 $98.00 -409083 23-Jan-20 999993 DESIGNRIGHT BUILDERS INC. G17-0009 G17-0009 Release Erosion Ctrl Security 390030 59800 $2,000.00 409094 23-Jan-20 999997 DIER, DANIEL 48002700-29 Closing Bal Refund: Deposit #48002700-29 F5100 86620 $660.00 48002700-29 Closing Bal Refund: Deposit #48002700-29 F5100 81020 ($512.28) Total for Check 409094: $147.72 409126 23-Jan-20 112 DUDEK & ASSOCIATES INC 20198415 Professional Services: 8/30/19-10/25/19 391030 59910 $18,427.93 20199771 Professional Services: 11/30/19-12/27/19 391030 59910 $10,216.25 Total for Check 409126: $28,644.18 905436 21-Jan-20 97 EMPLOYMENT DEVELOPMENT CAL WH PE2020-02 CAL W/H EFT PE2020-02 F1000 86170 $26,833.05 DEPARTMENT 409127 23-Jan-20 740 ENNISS INC. 212060 Sand 412040 47600 $590.84 210534 Concrete and Concrete Sand 411040 29050 $46.15 210534 Concrete and Concrete Sand 411040 45900 $243.03 Total for Check 409127: $880.02 409128 23-Jan-20 101 ESGIL LLC December 2019 Building Services for Dec. 2019 303030 17050 $142,488.04 December 2019 Building Services for Dec. 2019 303030 17051 $12,214.90 Total for Check 409128: $154,702.94 409129 23-Jan-20 350 EWING IRRIGATION 8907102 Lake Poway: irrigation supplies 414040 47700 $419.00 8924260 Silverset Park: irrigation supplies 414040 47700 $32.81 Total for Check 409129: $451.81 409130 23-Jan-20 116 FERGUSON WATERWORKS 0702206 Soft Cop tube F5100 81350 $1,934.32 0702407 Copper Service Repair 402560 43080 $619.22 0702842 Coupling Adapter F5200 81350 $699.84 Total for Check 409130: $3,253.38 409131 23-Jan-20 1380 FLYERS ENERGY LLC CFS-2152941 12/13/19-12/30/19 Safety Services Fuel 413010 31020 $569.52 409133 23-Jan-20 120 GRAINGER INC 9410516372 Test Equipment Maintenance 403070 43080 $122.27 9411400865 Electrical Tape, Duct Tape F1000 81350 $357.64 Total for Check 409133: $479.91 409134 23-Jan-20 127 HAWTHORNE MACHINERY CO PS000874901 Untt775:Se~OR~g 413010 47900 $6.59 PS000875089 Unit 598: Coupling and Hose 413010 47900 $42.74 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 4 of 10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount °' 409134 23-Jan-20 127 HAWTHORNE MACHINERY CO 0 PS000875088 Unit 598: Hose and Couplings 413010 47900 $61.44 Total for Check 409134: $110.77 .... N .... 409085 23-Jan-20 999991 HMT ELECTRIC, INC. STI 18-002 Grading lnsp. Deposit Balance STl18-002 Refund 391030 59800 $8,252.00 409135 23-Jan-20 152 HOME DEPOT COMMERCIAL ACCOUNT 0350502 Work Order #236522: repair supplies 415010 47600 $24.70 9370470 Pipes F5200 81350 $149.55 4350522 Steel Couplings 414040 47900 $307.02 3340528 Staples, 14514 Kennebunk Lateral Repair 403570 43080 $4.72 4370484 Scrapers for removing old bioxide stickers 402060 45600 $12.83 4350519 R-8 Conduit Project 402060 43080 $38.69 5340519 Zip ties for clearwell filters PS-13 402060 43080 $79.78 9360187 Power Tool Cord 415010 47600 $30.64 8370475 Lumber 415010 47600 $12.96 3370488 WTP Highline, Brass 402060 43080 $57.67 Total for Check 409135: $718.56 409136 23-Jan-20 698 HORIZON 2F167069 Couplings, cement, pvc primer 414040 47700 $111.39 409137 23-Jan-20 1070 HUNTER GENERAL ENGINEERING INC. 2200111-PP3 Hydronic Piping 80006171 P6170 $23,814.60 409138 23-Jan-20 1529 INFRASTRUCTURE ENGINEERING 12206 Clearwell Distribution 80005106 P5100 $6,355.00 CORPORATION 409139 23-Jan-20 132 INTERSTATE BATTERIES OF SAN DIEGO INC. 220021913 26 Batteries 202020 47600 $26.00 220021913 26 Batteries 202020 47600 $2,716.05 Total for Check 409139: $2,742.05 409140 23-Jan-20 129 JRC PRINTING LLC 39771 Printing Youth Fishing Derby Flyers 202020 49220 $68.42 39773 Business Cards -Leslie Constable 301030 49220 $17.24 39773 Business Cards -Leslie Constable 305030 49220 $17.24 Total for Check 409140: $102.90 409141 23-Jan-20 502 KIMLEY-HORN AND ASSOCIATES, INC 14602773-1 Traffic Engineering: August 2019 307040 17150 $28,591.95 14987480-2 Traffic Engineering: September 2019 307040 17150 $18,005.88 15397653-2 Traffic Engineering: November 2019 307040 17150 $10,525.90 15113191-1 Traffic Engineering: October 2019 307040 17150 $22,436.86 Total for Check 409141: $79,560.59 409142 23-Jan-20 161 KRC ROCK INC 2250546-00 Rock for Kennebunk Lateral Repair 403570 47600 $165.94 2250508-00 Fabric for Kennebunk Lateral Repair 403570 43080 $52.91 Total for Check 409142: $218.85 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 5of10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount ..... 409143 23-Jan-20 140 LEAGUE OF CALIFORNIA CITIES 1660 SD Cnty Membership 2020 & 2 Mtg Attendees 100010 49240 $600.00 0 1660 SD Cnty Membership 2020 & 2 Mtg Attendees 100010 14010 $600.00 .... N .... Total for Check 409143: $1,200.00 409144 23-Jan-20 391 LIFE-ASSIST, INC. 966814 Medical Supplies 503050 47400 $1,081.37 409145 23-Jan-20 865 LOUNSBERY FERGUSON AL TONA & 304028410001 Professional Services Fees State Mandates 308040 17021 $2,189.00 PEAK LLP Claim 409146 23-Jan-20 900 MISSION RESOURCE CONSERVATION 408 WaterSmart Field Svs: Dec 2019 80005106 P5100 $69.50 DISTRICT 409088 23-Jan-20 999995 MURO, FIDENCIO RUBEN 2014216.001 Deposit Refund Permit 22598 205020 74710 $282.00 409147 23-Jan-20 1506 MUTUAL OF OMAHA POLICYHOLDER 001037479132 Basic Life/AD&DNol Life/LTD/STD Prem: F1000 86210 $3,820.49 SERVICES January 20 001037479132 Basic Life/AD&DNol Life/LTD/STD Prem: F1000 87330 $3,518.16 January 20 001037479132 Basic Life/AD&DNol Life/LTD/STD Prem: F1000 87350 $7,035.28 January 20 001037479132 Basic Life/AD&DNol Life/LTD/STD Prem: F1000 87351 $2,164.79 January 20 Total for Check 409147: $16,538.72 409148 23-Jan-20 2044 NATIONWIDE MEDICAL SURGICAL INC 1054547 ALS Medications 503050 47400 $3,575.98 409084 23-Jan-20 999991 NAVAK LLC FTM18-001 Mylars returned. DeposiUBond released 390030 59800 $400.00 409149 23-Jan-20 894 NTH GENERATION COMPUTING, INC. 35859H Veeam Support Renewal 04/29/2021 113010 41200 $10,935.00 35837H Veeam Backup -Office 365 Software 113010 41200 $5,292.00 Maintenance Total for Check 409149: $16,227.00 409150 23-Jan-20 84 OFFICE DEPOT BUSINESS SERVICES 426037649-001 Office Supplies: CERT 80002425 P2420 $61.31 DIVISION 425211214-001 Office Supplies 121010 47100 $14.64 428504375-001 3-mt wall calendar 301030 47100 $11.52 429203830-001 Return 3 mt wall Calendar 301030 47100 ($11.52) 428504373-001 Monthly Desk Calendar 303030 47100 $5.76 428502604-001 Office Supplies DSD 1st floor 303030 47100 $12.06 428502604-001 Office Supplies DSD 1st floor 301030 47100 $6.89 428502604-001 Office Supplies DSD 1st floor 305030 47100 $18.29 429214989-001 Return wall calendar 301030 47100 ($6.89) 429271919-001 Office Supplies DSD 1st floor 301030 47100 $58.45 424477420-001 Lake Office Supplies 202020 47100 $31.50 42727 4522-001 OPP Office Supplies 205020 47100 $72.40 429363583-001 Office Supplies 103010 47100 $24.23 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 6of10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount 00 409150 23-Jan-20 84 OFFICE DEPOT BUSINESS SERVICES 429362813-001 Office Supplies 103010 47100 $31.71 0 DIVISION """ N 429322473-001 Office Supplies 500050 47100 $7.32 -429322473-001 Office Supplies 80002425 P2420 $30.76 429640034-001 OPP Office Supplies 205020 47100 $23.16 423081821-001 Office Supplies 300030 47100 $43.09 428400198-001 Office Supplies 300030 47100 $43.09 Total for Check 409150: $477.77 409090 23-Jan-20 999988 ONE-TIME SENIOR VOLUNTEER PATROL Prast 01/03/20 Supplies for Senior Volunteer Patrol 80007795 P7790 $89.54 Prast O 1 /03/20-B Supplies for YANA gift baskets 80007795 P7790 $484.76 Prast O 1 /03/2020-C SVP 25th Anniversary Jubilee Supplies 80007795 P7790 $2,662.10 Total for Check 409090: $3,236.40 409091 23-Jan-20 999988 ONE-TIME SENIOR VOLUNTEER PATROL Allin 12-16-19 Supplies for YANA gift baskets 80007795 P7790 $101.98 409093 23-Jan-20 999988 ONE-TIME SENIOR VOLUNTEER PATROL Shope 12/14/19 Holiday trays for Senior Volunteer Patrol 80007795 P7790 $83.94 409092 23-Jan-20 999987 ONE-TIME SCHOOL SAFETY PATROL Bennett 01-07-20 Advance for Safety Patrol Pizza Party #2 504050 47600 $600.00 409151 23-Jan-20 430 ORKIN EXTERMINATING, INC. 192966746 Big Stone Lodge: January 2020 309030 41200 $103.65 409152 23-Jan-20 186 PACIFIC PIPELINE SUPPLY S100411746.001 Water Service Pulling Cable 402560 43080 $520.89 409153 23-Jan-20 367 PAULEY EQUIPMENT COMPANY W23519 Kubota Tractor 115010 61040 $25,343.66 409154 23-Jan-20 220 PETTY CASH GENERAL 1/14/20 (HR) Reimburse General Petty Cash 1 /14/20 121010 14030 $26.94 1/14/20 (HR) Reimburse General Petty Cash 1/14/20 121010 49340 $26.06 1/14/20 (CMO) Reimburse General Petty Cash 1/14/20 100010 14010 $12.79 1 /14/20 (Clerk) Reimburse General Petty Cash 1/14/20 101010 47100 $37.56 1/14/20 (DSD) Reimburse General Petty Cash 1/14/20 300030 14010 $37.48 1/14/20 (DSD) Reimburse General Petty Cash 1/14/20 305030 14010 $38.56 1/14/20 (DSD) Reimburse General Petty Cash 1/14/20 301030 31010 $21.46 1/14/20 (DSD) Reimburse General Petty Cash 1/14/20 305030 31010 $21.46 Total for Check 409154: $222.31 409125 23-Jan-20 1493 PO HOLDING LLC 0001101345-1 N Cobra & FSA Monthly: December 2019 F1000 87399 $412.50 409155 23-Jan-20 536 POLLARD WATER 0155358 Water Test Tablets 402560 43080 $133.61 409156 23-Jan-20 25 POWAY CENTER FOR THE PERFORMING 01122020 Poway on Stage Weekly Ticket Sales transfer F1000 86330 $3,701.00 ARTS FOUNDATION 409132 23-Jan-20 400 POWAY ENTERTAINMENT CO LLC SafetyPatrol Safety Patrol Bowling Party 12/19/19 504050 47600 $862.00 409157 23-Jan-20 265 POWAY FIREFIGHTERS ASSOCIATION DUES PPE 01/12/2020 Fire Association dues for PPE 01/12/20 F1000 86100 $2,646.10 409158 23-Jan-20 274 POWAY SENIOR CENTER 1052 Council-Approved Senior Services Subsidy 200020 41200 $3,211.15 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 7 of 10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount \D 409159 23-Jan-20 273 POWAY UNIFIED SCHOOL DISTRICT 23727 Crossing Guard Oct 2019 504050 41070 $1,482.06 0 -ft N 23728 Crossing Guard Nov 2019 504050 41070 $1,583.33 -Total for Check 409159: $3,065.39 409160 23-Jan-20 524 PROGRESSIVE TECHNOLOGY SECURITY 45770 Security and Fire Monitoring 114010 22000 $1,794.14 SYSTEMS INC 45770 Security and Fire Monitoring 201020 22000 $804.65 45770 Security and Fire Monitoring 202020 22000 $1,242.86 45770 Security and Fire Monitoring 203020 22000 $658.80 45770 Security and Fire Monitoring 204020 22000 $1,569.06 45770 Security and Fire Monitoring 205020 22000 $2,764.08 45770 Security and Fire Monitoring 206020 22000 $1,293.96 45770 Security and Fire Monitoring 207020 22000 $585.47 45770 Security and Fire Monitoring 400060 22000 $671.99 45770 Security and Fire Monitoring 402060 22000 $4,242.86 45770 Security and Fire Monitoring 410060 22000 $1,618.00 45770 Security and Fire Monitoring 413010 22000 $247.92 45770 Security and Fire Monitoring 414040 22000 $637.19 45770 Security and Fire Monitoring 415010 22000 $173.73 45770 Security and Fire Monitoring 501050 22000 $1,535.35 Total for Check 409160: $19,840.06 409161 23-Jan-20 1058 R & B PINTO PROPERTIES LLC LKCONC-01/06-01/12 Wkly Lk Cone 01/06/20-01/12/20 F1000 86360 $2,819.57 409162 23-Jan-20 2047 RAFTELIS FINANCIAL CONSULTANTS, 13842 Water and Sewer Rate Study 401060 17200 $4,753.93 INC. 409163 23-Jan-20 1518 RANDALL LAMB ASSOCIATES, INC. 106275 Design Services: City Hall Hydronic Piping 80006171 P6170 $990.00 409164 23-Jan-20 1669 RELIANT AQUARIUM DESIGN INC. 26660 Library Aquarium Maintenance 206020 43040 $65.00 409165 23-Jan-20 358 ROADONE A762996 Bronto move 412040 41200 $360.00 A765877 Tow for Unit 32T 412040 41200 $360.00 Total for Check 409165: $720.00 409166 23-Jan-20 638 ROCHESTER MIDLAND CORPORATION I NV00 1644 76 Bathroom Freshener 415010 41400 $733.06 409167 23-Jan-20 221 SAN DIEGO GAS & ELECTRIC 60153342241-01 /20 13104 Silver Lake-12/10/19-01/12/20 207020 21010 $116.92 32430844182-01/20 14022 1/2 Pomerado Rd 12/09/19-01/09/20 414040 21010 $11.02 86797737652-01 /20 13250 Pomerado Rd 12/09/19-01/09/20 414040 21010 $11.43 14532237960-01 /20 13094 Civic Center Dr 11/30/19-12/31/19 208020 21010 $35.38 32089688823-01 /20 13090 Civic Center Drive 12/10/19-01/12/20 208020 21010 $376.66 26480327247-01 /20 12250 1/2 Meadowbrook 12/09/19-01/09/20 201020 21010 $608.63 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 8 of 10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount ..a. 409167 23-Jan-20 221 SAN DIEGO GAS & ELECTRIC 0 32222332511-01/20 14560 Lk Poway Rd 12/10/19-01/12/20 202020 21010 $468.12 0 99580161733-01 /20 14135 Midland Rd 12/12/19-01/14/20 205020 21010 $72.10 .... N 59531914804-01/20 13053 Poway Road 12/10/19 to 01/12/20 104030 41200 $104.24 ..a. Total for Check 409167: $1,804.50 409168 23-Jan-20 837 SAN DIEGO UNION TRIBUNE 014636734000 Legal Ads 12/01/19-12/31/19 80005106 P5100 $209.42 014636734000 Legal Ads 12/01/19-12/31/19 101010 49320 $1,339.89 014636734000 Legal Ads 12/01/19-12/31/19 115010 61212 $126.76 Total for Check 409168: $1,676.07 409169 23-Jan-20 1622 SASE COMPANY, INC INV235502 Vacuum bags 411040 47600 $624.66 409170 23-Jan-20 1942 SCOTT MICHAEL, INC 2190155-PP5 Sewer Line Repair Replace 14/15 Pomerado 80005207 P5200 $134,254.86 Road 409171 23-Jan-20 282 SHARP REES-STEALY MEDICAL CENTER 339655025 Ergonomic Evaluation 122010 17999 $495.00 338113256 Resp Clearance/Pulm Function Exam 301030 49160 $121.00 Total for Check 409171: $616.00 409172 23-Jan-20 1690 SMART & FINAL 044151 Winter Festival Food for Staff & Volunteers 208020 47600 $73.29 054222 Winter Festival Teen Volunteer Fundraiser Supplies 208020 47600 $39.48 Total for Check 409172: $112.77 409173 23-Jan-20 1988 SOUTHERN CALIFORNIA FLEET ES5799 Unit 931 Red Fleet Repair 413010 43120 $692.67 SERVICES, INC 409174 23-Jan-20 1031 SPECIAL SERVICES GROUP LLC 12161 Sheriffs annual covert track service -504050 22000 $960.00 Mobile GPS 409089 23-Jan-20 999995 SPIRA, NATALIE 2014204.001 Deposit Refund Permit 22566 205020 74710 $200.00 409175 23-Jan-20 528 STATEWIDE SAFETY & SIGNS, INC 01005698 Signs and materials 411040 45300 $517.93 409176 23-Jan-20 665 STOTZ EQUIPMENT P56686 Unit 507: Wet Charge Batteries 413010 47900 $117.28 409177 23-Jan-20 854 STRYKER SALES CORPORATION 2834589M Gurney Maintenance Nov 2019 503050 43080 $1,049.29 409178 23-Jan-20 1159 SUPERIOR GATE SERVICES 11592 Water Treatment Plant: gate repair 415010 43040 $261.00 409179 23-Jan-20 312 SUPERIOR READY MIX CONCRETE, LP 96652 Country Creek Lane: concrete 411040 43240 $653.61 409180 23-Jan-20 351 SWRCB SW-0186251 Crosthwaite Materials Handling Yard 412040 57300 $1,400.00 409181 23-Jan-20 2086 TANKO STREETLIGHTING, INC 22001 00-PP3 LED Street and Safety Lighting 80002795 P2790 $33,975.56 409182 23-Jan-20 279 THOMSON REUTERS -WEST 841705160 CCR T19,T22,T25 Annual Subscription Service 502050 49240 $498.45 409183 23-Jan-20 1602 TYLER TECHNOLOGIES INC. 045-287535 Tyler software licenses, implementation 80006111 P6110 $5,295.70 409188 23-Jan-20 1566 U.S. BANK CORPORATE PAYMENT SVC -7016-01/20 Finance/HR CalCard January 2020 F1000 86020 $5,304.72 FINANCE 409184 23-Jan-20 897 U.S. BANK CORPORATE PAYMENT 0510-01/20 CSD CalCard January 2020 F1000 86020 $10,994.85 SYSTEM-CS March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 9of10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount -409187 23-Jan-20 1513 U.S. BANK CORPORATE PAYMENT 2521-01/20 CMO/City Clerk CalCard January 2020 F1000 86020 $2,893.70 -SYSTEM-LG 0 1512 U.S. BANK CORPORATE PAYMENT .... 409186 23-Jan-20 6896-01/20 PW CalCard January 2020 F1000 86020 $291.33 N SYSTEM-PW -409185 23-Jan-20 1511 U.S. BANK CORPORATE PAYMENT 9376-01/20 Fire CalCard January 2020 F1000 86020 $9,076.60 SYSTEM-SS 905435 21-Jan-20 941 U.S. DEPT. OF THE TREASURY FED WH PE2020-02 FED W/H EFT PE2020-02 F1000 86180 $21,478.30 FED WH PE2020-02 FED W/H EFT PE2020-02 F1000 86160 $73,766.87 Total for Check 905435: $95,245.17 905441 23-Jan-20 941 U.S. DEPT. OF THE TREASURY FED WH 941 QTR 4 941 QTR 4 Balance due Medicare F1000 86180 $213.62 BAL 409189 23-Jan-20 1580 UNIFIRST CORPORATION 361 0096663 Facilities: uniforms 415010 49280 $14.35 361 0096667 North Parks: uniforms 414040 49280 $26.60 361 0096671 Lake Poway dock: mats 415010 41200 $9.89 361 0096668 Public Works: mats 415010 41200 $6.45 361 0096669 Twin Peaks Gym: mats and mops 415010 41200 $11.37 361 0096508 South Parks: mats and uniforms 415010 41200 $32.78 361 0096508 South Parks: mats and uniforms 414040 49280 $21.64 361 0097328 Fire Station 2 mats/towels 501050 49280 $21.89 361 0097327 Fire Station 1 mats/towels 501050 49280 $29.88 361 0097329 Fire Station 3 mats/towels 501050 49280 $43.51 361 0097325 City Hall: mats 415010 41200 $8.41 361 0097330 Uniforms and Mats 415010 41200 $32.78 361 0097330 Uniforms and Mats 414040 49280 $21.64 361 0097467 Uniforms and Mats: Warehouse 415010 41200 $1.22 361 0097467 Uniforms and Mats: Warehouse 410060 49280 $4.14 361 0097468 Uniforms Weekly Rental Fee 405060 49280 $5.44 361 0097473 Uniforms Weekly Rental Fee 401060 49280 $24.94 361 0097469 Uniforms Weekly Rental Fee 403570 49280 $31.60 361 0097471 Uniforms Weekly Rental Fee 402560 49280 $32.45 361 0097472 Uniforms and Mats Weekly Rental Fee 415010 41200 $8.54 361 0097472 Uniforms and Mats Weekly Rental Fee 402060 49280 $21.44 Total for Check 409189: $410.96 409190 23-Jan-20 655 UNITED SITE SERVICES 114-9722797 Portable Toilets 01/08/20-02/04/20 202020 41200 $572.64 409191 23-Jan-20 1612 USAFACT, INC. 11730 Background Investigation 121010 17999 $76.91 409192 23-Jan-20 1686 USC FOUNDATION 17136 Membership Renewal 01/01/20-12/31/20 402560 49240 $687.30 March 3, 2020, Item #1Register of Demands: Warrants from 1/20/2020 -1/24/2020 Page: 10 of 10 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount ... 409193 23-Jan-20 321 VERIZON WIRELESS 9843721571 Fire Dept Cell Phones, iPads, Mi Fi/ Sheriff 500050 33011 S76.02 IV Phones 0 Fire Dept Cell Phones, iPads, MiFi/ Sheriff -1' 9843721571 501050 33011 55.12 IV Phones ... 9843721571 Fire Dept Cell Phones, iPads, MiFi/ Sheriff 502050 22000 5114.03 Phones 9843721571 Fire Dept Cell Phones, iPads, MiFi/ Sheriff 502050 33011 $2.22 Phones 9843721571 Fire Dept Cell Phones, iPads, Mi Fi/ Sheriff 503050 22000 5570.15 Phones 9843721571 Fire Dept Cell Phones, iPads, MiFi/ Sheriff 504050 22000 S38.49 Phones Total for Check 409193: S806.03 409194 23-Jan-20 321 VERIZON WIRELESS 9845799406 Fire Dept iPads, cell phones. Mi Fi / Sheriff MiFi 500050 33011 S76.02 9845799406 Fire Dept iPads. cell phones, Mi Fi/ Sheriff MiFi 501050 33011 S14.72 9845799406 Fire Dept iPads, oell phones, MiFi / Sheriff MiFi 502050 22000 S114.03 9845799406 Fire Dept iPads, cell phones. MiFi / Sheriff MiFi 502050 33011 58.25 9845799406 Fire Dept iPads, cell phones, MiFi / Sheriff MiFi 503050 22000 $570.15 9845799406 Fire Dept iPads, cell phones, MiFi / Sheriff MiFi 504050 22000 539.39 Total for Check 409194: S822.56 409195 23'Jan-20 454 WALTER ANDERSEN NURSERY INC 3-072687 City Hall Christmas Tree: Lobby 114010 47600 S203.65 409196 23-Jan-20 272 WAXIE 78810346 Sanitary supplies 415010 47200 $1,747.31 409197 23-Jan-20 1667 WESTCOAST SECURITY & 3398 Winter Festival Security 208020 41200 $1,445.26 INVESTIGATIVE AGENCY 409198 23-Jan-20 294 ZAP MANUFACTURING INC 3219 Signs and sign materials 411040 45300 $1,810.20 409199 23-Jan-20 1573 ZORO TOOLS, INC. INV7002496 2 cycle fuel 414040 47600 S283.78 Register Total: $821,226.25 Date: __ Z..:_( ffn~1;-""1Zo..L--------- March 3, 2020, Item #1E) The City of Poway Director of Finance Submits the Following Register of Demands for the period 1/27/2020 -1/31/2020 and Recommends its Ratification/Approval: ..a. w 0 Check ~ Number ..a. 409209 Check Payee/ Date Vendor# PayeeNendor Name 31-Jan-20 196 AIRGAS USA, LLC 409210 31-Jan-20 710 AK & COMPANY 409203 31-Jan-20 999997 ALEENE, RUSS 409211 31-Jan-20 705 AMERICAN ASPHALT SOUTH, INC Invoice Number 9097272083 POWAY-20-1 32202400-02 32202400-02 2200072-RET 409212 31-Jan-20 10 AMERICAN BACKFLOW SPECIAL TIES INC INV51623 INV51699 409213 31-Jan-20 721 409214 31-Jan-20 21 ~ -1 409215 31-Jan-20 463 > n :I: :s:: m z -I a:, 409216 31-Jan-20 835 409217 31-Jan-20 835 409218 31-Jan-20 835 409219 31-Jan-20 835 409220 31-Jan-20 835 409221 31-Jan-20 835 409222 31-Jan-20 835 409223 31-Jan-20 835 409224 31-Jan-20 835 409225 31-Jan-20 835 409226 31-Jan-20 835 409227 31-Jan-20 835 409228 31-Jan-20 835 409229 31-Jan-20 835 AMERICAN TECHNOLOGIES, INC. ARAMARK REFRESHMENT SERVICES ARC-SAN DIEGO AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T AT&T BC64323779-001 1637739 43341 43340 43219 43218 14226652 14159611 14226650 14226489 14226473 14226474 14159616 14159621 14159619 14159615 14159622 14226481 14159620 14226487 Description Pool Carbon Dioxide State-mandated cost reimbursement services Closing Bal Refund: Deposit #32202400-02 Closing Bal Refund: Deposit #32202400-02 Street Maintenance City Hall Backflow Silverset Backflow Fire Station #3: water mitigation Monthly lease payment: PCPA Cappuccino Machine Landscape Services Landscape Services Landscape Services Landscape Services BAN 9391031631 12/24/19-01/23/20 BAN 9391026535 12/10/19-01/19/20 BAN 9391031630 12/24/19-01/23/20 BAN 9391026570 12/24/19-01/23/20 BAN 9391026534 12/24/19-01/23/20 BAN 9391026538 12/24/19-01/23/20 BAN 9391026541 12/10/19-01 /09/20 BAN 9391026548 12/10/19-01 /09/20 BAN 9391026546 12/10/19-01/09/20 BAN 9391026540 12/10/19-01/09/20 BAN 9391026549 12/10/19-01/09/20 BAN 9391026561 12/24/19-01/23/20 BAN 9391026547 12/10/19-01/09/20 BAN 9391026568 12/24/19-01 /23/20 Run Date: 13-Feb-20 Org 203020 111010 F5100 F5100 Object 45200 Project Check Amount 411040 402560 402560 41200 86620 81020 Total for Check 409203: 43205 43080 43080 Total for Check 409212: 415010 41200 204020 49360 412040 41200 412040 41200 412040 41200 412040 41200 421040 414040 423040 414040 414040 414040 430050 414040 414040 413010 423040 208020 400060 420140 Total for Check 409215: 22000 22000 22000 22000 22000 22000 23010 22000 22000 33010 22000 33010 33010 22000 $239.65 $2,250.00 $500.00 ($325.98) $174.02 $54,220.64 $916.70 $916.70 $1,833.40 $4,279.34 $55.65 $1,000.00 $3,166.50 $1,000.00 $3,166.50 $8,333.00 $19.28 $19.72 $20.94 $20.94 $20.94 $20.94 $21.38 $21.38 $21.38 $21.38 $21.38 $40.76 $41.11 $42.32 March 3, 2020, Item #1Register of Demands: Page: 2 of 9 Warrants from 1/27/2020 -1/31/2020 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount -409230 31-Jan-20 835 AT&T 14129812 BAN 9391063084 12/03/19-01 /02/20 208020 22000 $60.84 .l=i,. 0 409231 31-Jan-20 986 BAKER'S CONCRETE CUTTING INC. 61648 Asphalt Saw Cut: Midland Rd. 402560 41200 $455.00 -II N 409232 31-Jan-20 453 BAY CITY EQUIPMENT INDUSTRIES, INC W219817 Replace Generator Fan, Alternator Belts, 402060 43080 $789.27 -Unit 75 409234 31-Jan-20 408 BOOT WORLD INC 25981 FY20 Boot Allowance: Weigel 403570 49280 $242.39 25722 FY 20 Boot Allowance: Zamora 412040 49280 $250.00 Total for Check 409234: $492.39 409204 31-Jan-20 999997 BREWER, JODI 20985712-37 Credit Bal Refund: Overpayment F5100 81020 $488.60 #20985712-37 409236 31-Jan-20 55 CALOL YMPIC SAFETY 383173 Nitrile Gloves F1000 81350 $1,050.02 383367 (50) Rain Pants F1000 81350 $1,497.73 Total for Check 409236: $2,547.75 409235 31-Jan-20 445 CAL-STATE AUTO PARTS INC 155136 Battery 413010 47900 $97.61 409237 31-Jan-20 532 CANNON PACIFIC SERVICES, INC 151120 Street Sweeping 411040 43320 $20,273.17 151164 Street Sweeping: Special Gate Drive 411040 43320 $146.80 Total for Check 409237: $20,419.97 409239 31-Jan-20 1508 CIGNA HEALTHCARE OF CALIFORNIA 2580645 Health Insurance Premiums: January 2020 F1000 87320 $214,304.59 2580645 Health Insurance Premiums: January 2020 F1000 87311 $10,557.60 Total for Check 409239: $224,862.19 409240 31-Jan-20 72 CITY OF SAN DIEGO TREASURER 1000276783 FY20 1st Quarter: Fire/EMS Dispatch Services 501050 41050 $51,698.65 1000276784 FY20 2nd Quarter: Fire/EMS Dispatch 501050 41050 $51,698.65 Services Total for Check 409240: $103,397.30 409241 31-Jan-20 286 COSTCO WHOLESALE 77582050 JPIA Refreshments: Emergency Prep & 400060 47600 $176.39 Extinguisher 409243 31-Jan-20 330 DEPARTMENT OF PESTICIDE FY20 Arrazola Qualified Applicators Certification Exam 414040 49240 $30.00 REGULATION Arrazola 409205 31-Jan-20 999997 DINERO HOMES INC. 34007700-38 Closing Bal Refund: Deposit #34007700-38 F5100 86620 $550.00 -34007700-38 Closing Bal Refund: Deposit #34007700-38 F5100 86620 ($497.09) Total for Check 409205: $52.91 409244 31-Jan-20 1067 DIVISION OF THE STATE ARCHITECT FY20 QTR1 FEES FY20 SB1186 Disability Access Fees Jul-Sept F2830 86399 $211.20 FY20 QTR2 FEES FY20 SB 1186 Disability Access Fees Oct-Dec F2830 86399 $174.80 Total for Check 409244: $386.00 409245 31-Jan-20 740 ENNISS INC. 211310 Crosthwaite Yard 402560 43080 $762.19 409246 31-Jan-20 350 EWING IRRIGATION 8918675 Potting soil, Universal P/U Shut off 414040 41600 $37.89 March 3, 2020, Item #1Register of Demands: Warrants from 1/27/2020 -1/31/2020 Page: 3 of 9 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount -409246 31-Jan-20 350 EWING IRRIGATION u, 8918674 Universal P/U Shut off 414040 41600 $30.71 0 Total for Check 409246: $68.60 """ N 409247 31-Jan-20 116 FERGUSON WATERWORKS 0703292 Distribution Truck Stock 402560 43080 $695.38 -0703582 New Service 402560 43080 $263.46 0703484 Silverset Backflow 402560 43080 $90.32 Total for Check 409247: $1,049.16 409248 31-Jan-20 979 FIRE SERVICE CORP 19M 799650 Fire Suppression 415010 41200 $185.02 19M 796584 Fire Suppression 415010 41200 $238.84 Total for Check 409248: $423.86 409249 31-Jan-20 27 FLEET PRIDE/ASSOCIATED TRUCK 43590981 Unit 527: Floor Screws 413010 47900 $101.29 PARTS 409250 31-Jan-20 1380 FLYERS ENERGY LLC CFS-2170247 Safety Services 01/03/20 -01/15/20 413010 31020 $557.59 905443 28-Jan-20 1740 GE ENERGY FINANCIAL 129988-2019-12 Electricity for PCPA Dec 2019 204020 21010 $5,775.26 409251 31-Jan-20 120 GRAINGER INC 9414778739 (10) Wye with 45 Degree Bend F5200 81350 $311.62 409252 31-Jan-20 483 HANSON AGGREGATES PACIFIC 2087733 Type Ill base 411040 45900 $198.51 SOUTHWEST, INC 2089978 1/2" Type Ill 411040 45900 $136.01 Total for Check 409252: $334.52 409206 31-Jan-20 999997 HANSUVADHA, MICHELLE B 36932800-14 Closing Bal Refund: Deposit #36932800-14 F5100 86620 $450.00 36932800-14 Closing Bal Refund: Deposit #36932800-14 F5100 81020 ($115.74) Total for Check 409206: $334.26 409253 31-Jan-20 2118 HARBOR COATING AND RESTORATION 2200129-RET Facilities Painting: Release of Retention 80006171 P6170 $3,713.65 2200129-RET Facilities Painting: Release of Retention 80006171 P6170 $550.00 Total for Check 409253: $4,263.65 409254 31-Jan-20 480 HARPER & ASSOCIATES ENGINEERING ENG-6878 Engineering Design Services 80005106 P5100 $2,800.00 INC 409255 31-Jan-20 152 HOME DEPOT COMMERCIAL ACCOUNT 6350571 Work supplies 420040 45600 $90.41 5340520 Lumber for concrete forms 411040 47600 $50.68 4370479 Expansion joint 411040 47600 $37.98 1370491 Nuts and Bolts 411040 45300 $18.51 Total for Check 409255: $197.58 409256 31-Jan-20 1529 INFRASTRUCTURE ENGINEERING 12207 Treatment Plant Engineering Design 80005106 P5100 $7,350.00 CORPORATION 905442 28-Jan-20 906 INSIGHT NORTH AMERICA LLC 364M-NT Investment Advisory Svcs Dec 2019 111010 17999 $3,332.91 409257 31-Jan-20 2061 J.R. FILANC CONSTRUCTION COMPANY 2200083-PP3 Upgrade Projects 80005106 P5100 $113,202.66 INC March 3, 2020, Item #1Register of Demands: Warrants from 1/27/2020 -1/31/2020 Page: 4 of 9 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount ..a, 409238 31-Jan-20 861 JESSEN.TERRY 201912-001 2,000 lbs. Trout Stock 202020 45110 $9,740.00 °' 0 201912-015 1,500 lbs. Trout Stock 202020 45110 $7,305.00 .... N 201912-044 1,500 lbs. Trout Stock ..a, 202020 45110 $7,305.00 202001-006 1,500 lbs. Trout Stock 202020 45110 $7,305.00 202001-020 1,500 lbs. Trout Stock 202020 45110 $7,305.00 Total for Check 409238: $38,960.00 409207 31-Jan-20 999997 JOLLY, DREW 20995691-03 Closing Bal Refund: Overpay #20995691-03 F5100 81020 $219.61 409201 31-Jan-20 999998 KNOTT, PATRICK 1/20 -Knott FY20 Boot Allowance: Knott 414040 49280 $75.41 905453 30-Jan-20 136 LA IF 013020 LAIF Laif Deposit 01/30/2020 F1000 82010 $3,500,000.00 409258 31-Jan-20 2124 L.C. PAVING & SEALING, INC 2200157-PP1 ADA Barrier Removal 80002412 P2410 $52,501.75 409287 31-Jan-20 1771 LOS ANGELES TRUCK CENTERS, LLC XA290054421 :01 Stock -Exhaust Fluid 413010 47900 $78.55 905446 31-Jan-20 616 MANUFACTURERS & TRADERS TRUST 457 PPE 01/26/2020 ICMA 457 deferred comp deductions PPE F1000 86120 $29,040.21 CO. BANK 01/26/2020 905447 31-Jan-20 616 MANUFACTURERS & TRADERS TRUST 457R PPE 01/26/2020 ROTH 457 deferred comp PPE 01/26/2020 F1000 86120 $4,031.17 CO. BANK 905448 31-Jan-20 616 MANUFACTURERS & TRADERS TRUST 401A PPE 01/26/2020 401a employer contributions PPE 01/26/2020 F1000 86130 $11,269.61 CO. BANK 401A PPE 01/26/2020 401a employer contributions PPE 01/26/2020 111010 78910 ($2,507.00) Total for Check 905448: $8,762.61 905449 31-Jan-20 616 MANUFACTURERS & TRADERS TRUST ROTH PPE 01/26/2020 ROTH IRA employee contributions PPE F1000 86220 $225.00 CO. BANK 01/26/2020 905450 31-Jan-20 616 MANUFACTURERS & TRADERS TRUST RHS PPE 01/26/2020 Retirement Health Savings Plan (Safety) F1000 87004 $1,662.86 CO. BANK PPE 01/26/20 409233 31-Jan-20 40 MEACHAM.ANGELICA 2260 Work Jackets 413010 49280 $129.26 409260 31-Jan-20 170 MIRAMAR BOBCAT INCORPORATED R20039 Loader and mower rental 412040 49360 $10,610.82 409261 31-Jan-20 860 MRO WAREHOUSE 117105 Lip Balm F1000 81350 $544.74 409262 31-Jan-20 175 NAPA AUTO PARTS/POWAY 420706 Unit 658: Battery 413010 47900 $140.10 420313 Hydraulic Filter 413010 47900 $214.51 422610 Credit: Trailer Wire 413010 47900 ($33.38) 419503 Shop: OTC Evolve Scanner with Dock 413010 61999 $3,086.97 420879 Core Deposit 413010 47900 ($19.40) 422544 Unit 5: Front Brake Pads 413010 47900 $68.41 Total for Check 409262: $3,457.21 409263 31-Jan-20 565 NEAL ELECTRIC, INC 73438 Water Treatment Plant lights 415010 41200 $5,050.00 409264 31-Jan-20 84 OFFICE DEPOT BUSINESS SERVICES DIVISION 430890260-001 Office Supplies 410060 47100 $25.85 430890258-001 Office Supplies 410060 47100 $64.75 March 3, 2020, Item #1Register of Demands: Warrants from 1/27/2020 -1/31/2020 Page: 5 of 9 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount -409264 31-Jan-20 84 OFFICE DEPOT BUSINESS SERVICES 430889789-001 Office Supplies 410060 47100 $19.38 " DIVISION 0 429271440-001 Office Supplies 301030 47100 $16.37 .... N 425439268-001 Office Supplies: 2 Date Stamps 101010 47100 $150.83 -433236456-001 Office Supplies 200020 47100 $63.78 Total for Check 409264: $340.96 409265 31-Jan-20 194 PARKHOUSE TIRE INC 3010309958 Unit 90: Tires 413010 47900 $729.92 409266 31-Jan-20 195 PARKWAY BUSINESS CENTRE 410-110-CU 01/20 Assessments 414040 57300 $103.19 410-110-CU 01/20 Assessments 410060 57300 $161.60 Total for Check 409266: $264.79 409267 31-Jan-20 1689 PETTY CASH PUBLIC WORKS PW 1/27/20 Petty Cash Reimbursement 01/27/2020 402560 49280 $34.60 DEPARTMENT PW 1/27/20 Petty Cash Reimbursement 01/27/2020 400060 31010 $21.87 PW 1/27/20 Petty Cash Reimbursement 01/27/2020 400060 14010 $18.88 PW 1/27/20 Petty Cash Reimbursement 01/27/2020 414040 47600 $26.05 PW 1/27/20 Petty Cash Reimbursement 01/27/2020 414040 31040 $33.95 PW 1/27/20 Petty Cash Reimbursement 01/27/2020 405060 47600 $15.98 PW 1/27/20 Petty Cash Reimbursement 01/27/2020 401060 31010 $34.96 PW 1/27/20 Petty Cash Reimbursement 01/27/2020 413010 43120 $140.00 Total for Check 409267: $326.29 409268 31-Jan-20 762 PINPOINT PEST CONTROL CO. INC. 449272 Bee/Wasp Control 412040 41200 $95.00 409269 31-Jan-20 1532 PLASTIC RECYCLING OF IOWA FALLS, 0118785-IN (40) Cedars 414040 43040 $2,725.00 INC. 409270 31-Jan-20 273 POWAY UNIFIED SCHOOL DISTRICT FY20 QTR1 FINES 70% Share Net PHS Parking Fines: 504050 73100 $1,905.05 Jul-Sept 2019 FY20 QTR2 FINES 70% Share Net PHS Parking Fines: 504050 73100 $1,322.65 Oct-Dec 2019 Total for Check 409270: $3,227.70 409271 31-Jan-20 653 PSOMAS, INC 159450 Design Consultant: Martincoit 80004200 P0000 $1,605.00 409272 31-Jan-20 1058 R & B PINTO PROPERTIES LLC LKCONC 01/13-01/20 Wkly Lk Cone 01/13/20-01/20/20 F1000 86360 $5,664.20 18937 Lake Motors for Boats 202020 47600 $1,357.65 Total for Check 409272: $7,021.85 409273 31-Jan-20 1669 RELIANT AQUARIUM DESIGN INC. 26742 Library Aquarium Maintenance 206020 43040 $129.64 409274 31-Jan-20 1896 RELY ENVIRONMENTAL 230338 Compliance Management Software 413010 41200 $132.00 409259 31-Jan-20 2006 REMEMA INC 20076 Unit 924: Red Fleet Repair and Refinish 413010 43120 $800.00 409200 31-Jan-20 999998 ROESLER, NICOLE 1 /20 -Roesler Mileage Reimbursement 07/19-11/19 112010 31010 $87.58 March 3, 2020, Item #1Register of Demands: Warrants from 1/27/2020 -1/31/2020 Page: 6 of 9 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount -409200 31-Jan-20 999998 ROESLER, NICOLE 1/20 -Roesler (2) Reimbursement: Cardstock red tags 112010 49220 $297.15 00 0 Total for Check 409200: $384.73 -h N 409275 31-Jan-20 213 SAN DIEGO COUNTY SHERIFF'S NOV2019 Sheriff's Law Enforcement Services Nov 2019 504050 41030 $1,111,001.19 -DEPARTMENT NOV2019 Sheriff's Law Enforcement Services Nov 2019 504050 77580 ($1,936.01) Total for Check 409275: $1,109,065.18 409276 31-Jan-20 216 SAN DIEGO COUNTY WATER AUTHORITY 1219-11 December 2019 Water Deliveries and Charges 402060 27011 $368,963.10 1219-11 December 2019 Water Deliveries and Charges 402060 27012 $48,708.00 1219-11 December 2019 Water Deliveries and Charges 402060 27013 $323,081.33 Total for Check 409276: $740,752.43 409277 31-Jan-20 221 SAN DIEGO GAS & ELECTRIC 82033128582-01 /20 13325 Civic Center Dr 12/10/19-1/12/20 114010 21010 $15,910.19 70195729909-01 /20 12150 1/2 Sage View Rd 12/09/19-01/09/20 425040 21010 $11.63 59971687019-01 /20 14114 Midland Road 12/12/19-01/14/20 205020 21010 $317.91 48262466316-01/20 12490 1/2 Old Pomerado Rd 12/11/19-1/13/20 414040 21010 $108.54 71260928749-01/20 15003 1 /2 Pomerado Rd 12/12/19-01 /14/20 414040 21010 $10.00 48731411075-01/20 12900 Twin Peaks Rd 12/12/19-01/14/20 414040 21010 $11.42 25808266178-01 /20 14445 Lake Poway Rd 12/10/19-01/12/20, 402060 21056 $5,576.55 37,613 kWh 25816724085-01 /20 13552 Highlands Ranch Rd 12/10/19-01/12/20, 403070 21048 $110.33 441kWh 84321647992-01/20 17710 1/2 Old Coach Rd 12/10/19-01/12/20, 403070 21055 $1,210.38 7,189kWh 82015538790-01 /20 13621 Gregg St 12/10/19-01/12/20, 405060 21058 $525.08 3,262 kWh 94601424467-01/20 17749 St. Andrews 12/10/19-01/12/20, 403070 21053 $535.96 2,369 kWh 48321383007-01/20 12910 Camino Del Valle 12/10/19-01/12/20, 403070 21042 $2,797.04 17,052kWh 25808256922-01 /20 14445 Lake Poway Rd., 12/10/19-01/12/20, 410060 21010 $1,547.22 4,622 kWh 23194668909-01/20 12325 Crosthwaite Circle 12/10/19-01 /12/20 410060 21010 $163.16 82058271564-01 /20 14467 Lake Poway Road 12/10/19-01/12/20 400060 21010 $1,488.65 51260467432-01 /20 13966 Rock Creek Road 12/10/19-01/12/20 423040 21010 $10.42 93224921321-01/20 14103 1/2 Stowe Drive 12/10/19-01/12/20 420140 21010 $11.64 37750258723-01/20 13725 Poway Road 12/10/19-01/12/20 430050 21020 $69.28 99522976016-01 /20 14401 Pomerado Road 12/12/19-01/14/20 414040 21010 $394.85 93749846063-01 /20 13743 1/2 Carriage Road 12/12/19-01/14/20 414040 21010 $164.08 89922224091-01 /20 14038 Midland Road 12/12/19-01/14/20 414040 21010 $140.09 March 3, 2020, Item #1Register of Demands: Warrants from 1/27/2020 -1/31/2020 Page: 7 of 9 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount .... 409277 31-Jan-20 221 SAN DIEGO GAS & ELECTRIC 83800 7961 06-01 /20 14155 1 /2 Pomerado Road 12/12/19-01 /14/20 414040 21010 $11.22 \0 0 82475997643-01 /20 133061/2 Midland Rd. 12/12/19-01/14/20 414040 21010 $38.67 ...... N 64025166945-01 /20 13544 Aubrey St. 12/12/19-01/14/20 .... 414040 21010 $1,275.02 82465424855-01 /20 14795 1/2 Silverset Street 12/12/19-01/14/20 414040 21010 $359.37 71205215723-01/20 13221 Midland Road 12/12/19-01/14/20 414040 21010 $45.81 37325763074-01 /20 12207 Old Pomerado Road 12/10/19-01 /12/20 414040 21010 $24.93 48301450768-01/20 14283 Silver Ridge Road 12/10/19-01 /12/20 414040 21010 $11.22 41639610229-01 /20 15001 Highway 67 MP 12/10/19-01/12/20 414040 21010 $10.00 11183824070-01/20 16275 Espola Road 12/10/19-01/12/20 414040 21010 $10.00 Total for Check 409277: $32,900.66 409278 31-Jan-20 829 SC COMMERCIAL, LLC 0751517-IN Fuel for Fleet Gallons 1000 Diesel 2893 413010 31020 $12,501.39 Unleaded 409279 31-Jan-20 568 SCRIPPS/POWAY FENCE BUILDERS, INC 0118202005 Installation/ Repair of Existing Handrails 414040 41200 $1,650.00 409280 31-Jan-20 1397 SD PARTY RENTALS 8650 Youth Fishing Derby Inflatable 202020 49360 $798.00 409281 31-Jan-20 1420 STERICYCLE ENVIRONMENTAL 72402697321 Household Hazardous Waste 80002504 P2500 $20,754.50 SOLUTIONS 409282 31-Jan-20 312 SUPERIOR READY MIX CONCRETE, LP 99778 Pomerado & Valencia Way concrete 411040 43240 $915.56 409242 31-Jan-20 839 THE MARIDEN CORPORATION 1306 Logowear for PCPA employees 204020 49280 $329.39 409283 31-Jan-20 1041 T-MAN TRAFFIC SUPPLY 10511 (36) Marking Paints F1000 81350 $174.56 409202 31-Jan-20 999998 TURNBULL, SUSAN 01/20 -Turnbull CERT Supplies 80001005 P1000 $21.50 905451 31-Jan-20 785 U.S. BANK N.A. PARS ARS PE2020-03 PARS ARS PE2020-03 F1000 87200 $1,691.95 905452 31-Jan-20 785 U.S. BANK N.A. PARS REP PE2020-03 PARS REP PE2020-03 F1000 87210 $35,221.47 905444 29-Jan-20 941 U.S. DEPT. OF THE TREASURY 941X 1ST QTR 2019 941X 1ST QTR 2019 ADJUSTMENT F1000 86180 $98.17 941X 1ST QTR 2019 941 X 1 ST QTR 2019 ADJUSTMENT F1000 86160 $7.52 Total for Check 905444: $105.69 409284 31-Jan-20 1580 UNIFIRST CORPORATION 361 0096670 Weekly Mat Service: PCPA 204020 49280 $9.63 361 0094983 Weekly Mat Service: PCPA 204020 49280 $9.63 361 0097464 Mats & Unifonns: Fleet 415010 41200 $8.81 361 0097464 Mats & Unifonns: Fleet 413010 49280 $46.02 361 0098264 Uniforms and Mats Weekly Rental Fee 415010 41200 $8.54 361 0098264 Uniforms and Mats Weekly Rental Fee 402060 49280 $21.44 361 0098265 Uniforms Weekly Rental Fee 401060 49280 $24.94 361 0098263 Uniforms Weekly Rental Fee 402560 49280 $32.45 361 0098261 Uniforms Weekly Rental Fee 403570 49280 $31.60 March 3, 2020, Item #1Register of Demands: Warrants from 1/27/2020 -1/31/2020 Page: 8 of 9 Check Check Payee/ Number Date Vendor# PayeeNendor Name Invoice Number Description Org Object Project Check Amount N 409284 31-Jan-20 1580 UNIFIRST CORPORATION 361 0098260 Uniforms Weekly Rental Fee 405060 49280 $5.44 0 0 361 0097935 Mats: City Hall 415010 41200 $8.41 """ N 361 0097936 Meadowbrook Gym: Mats & Mops -415010 41200 $26.31 361 0098259 Warehouse: Mats & Uniforms 415010 41200 $1.22 361 0098259 Warehouse: Mats & Uniforms 410060 49280 $4.14 361 0098256 Fleet: Mats & Uniforms 415010 41200 $8.81 361 0098256 Fleet: Mats & Uniforms 413010 49280 $46.02 361 0098257 Stormwater: Uniforms 412040 49280 $21.78 361 0098262 Facilities: Uniforms 415010 49280 $14.35 361 0098266 North Parks: Uniforms 414040 49280 $26.60 361 0098267 Public Works: Mats 415010 41200 $6.45 361 0098268 Twin Peaks Gym: Mats & Mops 415010 41200 $11.37 361 0098270 Lake Poway dock: Mats 415010 41200 $9.89 361 0098258 Streets: Uniforms 411040 49280 $74.24 361 0097466 Streets: Uniforms 411040 49280 $42.31 361 0097465 Stormwater: Uniforms 412040 49280 $21.78 361 0097470 Facilities: Unifirms 415010 49280 $14.35 361 0097474 North Parks: Uniforms 414040 49280 $26.60 361 0097478 Lake Poway Dock: Mats 415010 41200 $9.89 361 0097476 Twin Peaks Gym: Mats & Mops 415010 41200 $11.37 361 0097475 Public Works Administration: Mats 415010 41200 $6.45 361 0097940 South Parks: Mats and Uniforms 415010 41200 $32.78 361 0097940 South Parks: Mats and Uniforms 414040 49280 $80.77 Total for Check 409284: $704.39 409285 31-Jan-20 36 UNION BANK OF CALIFORNIA 1189472 Trustee Fees 10/01/19-12/31/19 111010 74010 $625.00 905445 30-Jan-20 334 UNION BANK-SAN DIEGO PPE 01/26/2020 Transfer net payroll to Union Bank PPE TREA 80030 $522,395.15 01/26/2020 PPE 01/26/2020 Transfer net payroll to Union Bank PPE F1000 80030 ($522,395.15) 01/26/2020 PPE 01/26/2020 Transfer net payroll to Union Bank PPE F1000 80030 $522,395.15 01/26/2020 Total for Check 905445: $522,395.15 409286 31-Jan-20 655 UNITED SITE SERVICES 114-9754621 Portable Restroom Services 414040 41200 $453.86 409288 31-Jan-20 321 VERIZON WIRELESS 9846239018 Lk Ranger Cell 12/13/19-01/12/20 202020 33011 $33.77 409289 31-Jan-20 817 VOLVO CONSTRUCTION EQUIPMENT P501020668 Unit 775: Circuit Board, Relay 413010 47900 $1,579.48 March 3, 2020, Item #1N ... 0 ~ N ... Register of Demands: Warrants from 1/27/2020-1/31/2020 Cheok Check Number Date 409290 31-Jan-20 409291 31-Jan-20 409208 31-Jan-20 409292 31-Jan-20 409293 31-Jan-20 Payee/ Vendor# 540 1052 999997 294 1573 PayeeNendor Name WEST COAST ARBORISTS, INC. WIMACTEL INC. WISDOM, DAVID ZAP MANUFACTURING INC ZORO TOOLS. INC. lnvoioe Number 156242 156243 000189974 37500907--00 3292 INV7034583 INV7063101 Director of Finance Approved: ___ L ___ ~_::::::::::~---------Date: ___ "'l..._/i:.._:_r~-=-+-7--=0'-,!__ ______ _ Descriplion Tree Trimming, Removal Tree Trimming, Removal City Pay Phones: Jan 2020 Closing Bal Refund: Overpay #37500907-00 Custom sign (10) Ear Plugs (5) Wye with 45 degree bend Org 421040 414040 114010 F5100 411040 F1000 F5200 Page: 9of 9 Object Project Check Amount 41200 51,343.16 41200 S7.131.57 Total for Check 409290: SB,474.73 33010 S390.00 81020 $13.86 45300 $242.44 81350 5309.13 81350 $141.48 Total for Check 409293: 5450.61 Register Total: $6,732,238.57 March 3, 2020, Item #2 AGENDA REPORT CityofPoway DATE : TO: FROM : SUBJECT: Summary: March 3, 2020 Honorable Mayor and Members of the City Council Faviola Medina, City Clerk t={V\ (858) 668-4535 or fmedina@poway.org Approval of Minutes The City Council Meeting Minutes submitted hereto for approval are: • February 4, 2020 Regular City Council Meeting Minutes C ITY COUNCIL The Poway City Council sits as the Poway Planning Commission, the Poway Housing Authority, the Public Financing Authority, and the Successor Agency to the Poway Redevelopment Agency. Re co mme nd e d Action: It is recommended that the City Council approve the Minutes as submitted. Public N otification: None. Attachments: A. February 4, 2020 Regular City Council Meeting Minutes Reviewed/ Approved By: Assistant City Manager 1 of7 Rev iewed By: Alan Fenstermacher City Attorney Approved By: City Manager March 3, 2020, Item #2 NOTE: These draft meeting minutes are not official until approved by the City Council at the next scheduled meeting. CITY OF POWAY CITY COUNCIL REGULAR MEETING MINUTES February 4, 2020 City Council Chambers 13325 Civic Center Drive, Poway, California (Per Government Code 54953) (Meeting Called to Order as City Council/City of Poway Planning Commission/Poway Housing Authority/Public Financing Authority and Successor Agency to the Poway Redevelopment Agency) CALL TO ORDER Mayor Vaus called the Regular Meeting to order at 7:00 p .m. ROLL CALL John Mullin , Barry Leonard , Dave Grosch , Caylin Frank, Steve Vaus STAFF MEMBERS PRESENT City Manager Chris Hazeltine; Assistant City Manager Wendy Kaserman ; City Attorney Alan Fenstermacher; City Clerk Faviola Medina ; Community Services Director Brenda Sylvia ; Development Services Director Bob Manis; Finance Director Aaron Beanan; Human Resources/Risk Management Director Jodene Dunphy; Director of Public Works Eric Heidemann; Fire Chief Jon Canavan ; Captain Jeff Duckworth , Sheriffs Department. (Note : Hereinafter the titles Mayor, Deputy Mayor, Councilmember, City Manager, Assistant City Manager, Ci ty Attorney, City Clerk and Director of Finance shall be used to indicate Mayor/Chair, Deputy MayorNice Chair, Councilmember!Director, City Manager/Executive Director, Assistant City Manager/Assistant Executive Director, City Attorney/Counsel, City Clerk/Secretary and Director of Finance/Finance Officer.) PLEDGE OF ALLEGIANCE Deputy Mayor Frank led the Pledge of Allegiance. MOMENT OF SILENCE Mayor Vaus led a moment of silence . PRESENTATION None. PUBLIC COMMENT Jessica Holmes invited Council to attend Avocado Day at Old Poway Park (handout on file in the Office of the City Clerk). Yuri Bohlen thanked Council for providing Proposition 218 information. 2 of7 March 3, 2020, Item #2 City of Poway -Minutes -February 4, 2020 Janet Lettang announced Poway Center for the Performing Arts 30th Anniversary Celebration (handout on file in the Office of the City Clerk). Kate Hirsch spoke regarding a survey taken of various community groups that use the Poway Center for the Performing Arts (handout on file in the Office of the City Clerk). Kathleen Lippit spoke about the importance of educating the youth on tobacco use. CONSENT CALENDAR: Motioned by Councilmember Grosch, seconded by Cou"IUmember Leonard to approve Consent Calendar Items 1 through 3. Motion carried b-bllowing roll-call vote: . /4•/~ Ayes: Mullm, Leonard, Grosc~: •• af& Vaus Noes: None , V w' Abstained: None ~~,,,. ,/ ':. Absent: None .,r,, 1/,~~% Disqualified: None , "1' ~ ,1/, 1. Ratification of Warrant Registers for the Per .. oftlJDecember 23, 201'1tt1rough December ,~ #'$ff~ • 27, 2019; and December 30, 20l9 through Janaa·~,v/ • .1/, /~~ 1/,1/~/J 2. Approval of the January 7, 2020 ,rcr-~ity Counci.eting Minutes • '8 '"\ -·~ %,00, 3. City's Investment Report as of Dece"Jer 3~~-9, '%•"1/, ~ . • ~;~~ ORDINANCES FOR 1,N.IRuJ«&J:ION: ' ,:;;,:rfl/9f'1t, ,-::,, W9 ,, ~, t4tJr 4. First Reading of ,,,~,v-~Dance ASnding Po-~Municipal Code Section 5.02.080 of Chapter ~. ~-,. 5.02 (Business Cert1fti.s) ,. ■ Cit ~:fl.Fe~~;~re art. Mr. Fenstermacher ex lained that ~~, ¥%.~,1v. 'o/-~E p :q~IA ~ p p S~•JPBill 205 ~~,d05) re(fires the eii'..o collect information from certain industrial buf.ses to confi?'~·v ar~~lled in the~ational Pollutant Discharge System (NPDES) whictff'tladministered'o/~fJtbe Rl4nal and State Water Quality Control Boards. He further ,.,~, ~ ~:t;- explaineEtl1~,;;" t a $28 ce~ficate fee(w;,0uld be charged as the SB205 requirement is an ~. . ~ unfunded s~mandate. -■~ '/ ■ In response to dl1cil inqu~f? irector of Finance Aaron Bean an explained that the proposed SB205 certificate tW·a~~lated based on Customer Services and Development Services projected staff time, "{l(ff(ld by their hourly rate of pay and adding in mid-level benefits. 'W#ff No speakers. Motioned by Councilmember Mullin, seconded by Councilmember Leonard to adopt Resolution No. 20-005 entitled "A Resolution of the City Council of the City of Poway, California, Amending the Master Fee Schedule to Establish an Administrative Fee for SB 205 Pursuant to Chapter 5.02 of the Poway Municipal Code," and introduce Ordinance No. 839 entitled "An Ordinance of the City Council of the City of Poway, California, Amending Chapter 5.02 (Business Certificates) of the Poway Municipal Code" and schedule adoption of the Ordinance for February 18, 2020. Motion carried by the following roll-call vote: 3 of7 March 3, 2020, Item #2 City of Poway -Minutes -February 4, 2020 Ayes: Noes: Abstained: Absent: Disqualified: Mullin, Leonard, Grosch, Frank, Vaus None None None None ORDINANCES FOR ADOPTION: None. PUBLIC HEARINGS: "' 5. Conduit Financing for the Poway Commons Apart.~able Housing Project Mayor opened the public hearing at 7:17 p.m. . ~ ' . . A .. _ . Senior Management Analyst Mane Sanders -R~ted the repo.jls. Sanders explained that the request is for City approval of the issu ~f tax-exempt bon•iriOm_ California Municipal . . '9'&, . lnf'. . Finance Authority (CMFA) to Chelsea lnvutments Corporation r4e Senior Affordable . . ~-•A . Housing Project to be developed as part of fr~_i~way ~_mans Dev~-t~ment Project. Ms. Sanders clarified that the debt toJe issued by irt·-M~,r.ti be the sole~1onsibility of the borrower and the City will not ha•:·-■ financial or~ ,l"''(Pligation or responffllity with regard to the repayment of the debt. ~~-!~ders furth•~X,plained that Chelsea Investments . . . "q ~~/, ~,~"' . . Corporation 1s requesting $12,00~JP · '%1-e acqu1S'(10-if' construction, improvement and equipping of the development. \, ' ,1/ ,. -~ ~~~ ' No speakers..~~--\ "~'"•--.-9 '-·' ~-l¥-Mayor closed the,,,,jic hearirriat 7:20 p.~ 11!' C ·1d· . ··~•'=otth .. tf . f th . t ou~:n. i~•,:n"nancing or. e proJec. MQ!t~1ea by C~ilme~4t Mullm, -:•~ndi'd by Counc1lmember Leonard to adopt •1•~ -1/~A, '/@'.-" .. ~ Res;IJ.tion No. 20.; ,,,k1~entit1efaA Resolutroh of the City Council of the City of Poway, Cali rmja, Approvini'?a .e ls-,ce of the California Municipal Finance Authority .-/~--. ~--~-. . . Mult1fant,j1,Housmg R ~-, ue Bo,._, m an Aggregate Prmc1pal Amount Not to Exceed $12 000 O~~ th P •-f F" •· R f" . th A . ·t· C t t· , , o,-r e urpoao maricmg or e mancmg e cqms1 10n, ons rue 10n, lmproveme~pd Equipp·,1,~ of Poway Commons and Certain Other Matters Relating Th " M ~-. d -~ . ereto. otr'lcame 1u:nammously. ··,.,,1 STAFF REPORTS: .,, 6. Pre-Development Conference 19-003; A request for review of a proposal for a commercial orchid nursery at the northwest corner of Poway Road and California State Route 67 Associate Planner Scott Nespor explained that the review of the Pre-Development Conference (PDC) 19-003 is advisory only and council would not render any decision. Mr. Nespor further explained that the property is zoned RR-A which allows horticultural uses as well as the wholesaling of agricultural products. Mr. Nespor also explained that the City's Municipal Water District does not extend to eastern Poway and the greenhouse would need to utilize ground water or imported water brought on-site by truck. 4of7 March 3, 2020, Item #2 City of Poway -Minutes -February 4, 2020 Mayor Vaus announced that the Owner of Ho Enterprises, LLC, Eric Ho and Engineer Bill Yen were available to answer any questions. Dee Fleischman spoke in opposition of the project explaining that the General Plan doesn't allow orchid cultivation. Ms. Fleischman also voiced concern regarding water usage since the project would rely on intense ground water or water being trucked in since water service is not available in that area. Lynnette Perkes spoke in opposition of the PDC due to the large amount of ground water usage and the potential for future water service requests in that area. Speaker in Support of staffs recommendation but did ~rsk: Eric Ho and Bill Yen Council discussion ensued. /Si\ d ,. In response to Council inquiry, Mr. Nespor exQjln a that ttflaway Municipal Code allows horticultural uses by right. Mr. Manis furth~ained that al&Y.1ture and horticulture can take on a number of forms and the grow~~1"~orchids falls undrfjjeenhouse use which is considered agricultural use. Mr. Manis c1a,f~ that the question bef'(~Council is if the PDC f d . d I . Wa...a b h t ·t?%6 . t t h moves orwar in a eve opment review, w~~ _ e w e -r or no 1 ,,.flpropna e o ave ~1i:~~:~~eu~:!n 6~~~i~~~ation. the strUVra --sistent with~oway General -',m ~ In response to Council inquiry, ·il,Maffi1•~plained fN~wells are regulated by the County .. ,. -~-~., . . who would have to supply a permit tm)he Ov(itt Mr. Mal'ffSjlurther explained that there 1s no • :1/%t.,,0, -~ . . guarantee that the ~~er would ha\,1suff1c1em1Jater frofflj well and will likely have to supplement water v.tif;ft~ ~;2age tank~~ hav~{op_-eliveflt to the site since municipal . . ~>;%:fff~ • ~-.,,,1:,-t>~ . , . . water service 1s 1■£l~ffjva1laB.J this prollrtYl'"Mantl.~1,rther explained that, while not a f h ~_. . ·Wfo d' •1,J,w,rl)Y'/· . ~ p Id . part o t e prop·--~~ proJect,\'2(_ten mg ~~-vserv1ce t lfeast away wou not trigger a •• -,~"-~,,&% -~. • Propos1t1on FF vote{I'~-~it_,, may P_ -pt o_ ther pra,~'ert1es to develop and request a re-zone which then would require a .,.,~-0s1. aR~)lote. a,. . -~ a,·:a ~ -·• ■~0 ~:2-~ Co_Y;.~I'~~ exr.hat t..,_;;,_tj_,ecl§ not consistent with the scenic corridor or ./,,,p G ~-I Pl ~ ·-/~~ Wl!ifltl e away enera, an ~ -f:Iiff «,, ,%·-~1/, .-.. . . Counc1tegiber Leonar~arees JIJ~9ounc1lmember Mullin in that the project does not fit "th th ~~"-f th P ,_, G ~,g.l H I . d th t h d t . . I w1 e Vl:~lj o e OvvW enera ,effr an. e exp ame a e oes no env1s1on a arge greenhous~ja fence or 4!-011 in that location and a nursery would harm the aesthetics of the property. '/, • ,~ M. Councilmember G~,atl~,· with both Councilmember Mullin and Councilmember Leonard . . ~M'@f . . in that the project we;ll~be out of character for the location. Counc1lmember Grosch expressed concern reg:fding the number of employees working at the facility that would require parking, the amount of trucks that would access the property through Poway Road and the amount of water tanks situated on the property. Deputy Mayor Frank believes that the visual, traffic and parking impacts would be more commercial than agricultural. She explained that the project is not appropriate for the site and would significantly impact the scenic roadway as it does not fit with the intent of the Poway General Plan. Sof7 March 3, 2020, Item #2 City of Poway-Minutes -February 4, 2020 Mayor Vaus explained that when he thinks of agriculture in the area, he wants to see amber waves of grain and not 16-foot greenhouses although he appreciates the interest in bringing business to Poway. Council received and filed the report. No action taken. 7. Water Customer Bill Credit Director of Finance Aaron Beanan presented the report along with a slideshow presentation. Mr. Beanan explained that the one-time fixed charge credit is equal to 1/8 of the applicable water charges because it represents the one-week period~ut of the eight-week billing cycle the precautionary boil water advisory was in effect. In ad9),1,.he explained that funds totaling $420,000 are being requested from the City's Extre~rii2.lents portion of the General Fund Reserves to cover the co~ts of the ~ill credits. H-~~'. :{, ~xplained. that pursuant to_ the General Fund Reserve Polley, staff will return to 4#c1,ng the mid-year budget with a plan to replenish the reserves and any pla~i,p~-"~, ~d will naJJJf.lude the use of water funds so rate payers will not be impacted. , ' . . :AV. . ~~,, . Yun Bohlen suggested that water bill en fl should be appfled ,~Is accordmg to the customers water usage. ' ~·• /' • • • /4~/, .. ~,.,I ... /, . Counc1lmember Mullin voiced , •.. pp.osItIon to,.~ •• 1r customer bill .d1t due to the . . . ~~ . ~ f G IF d d II precautionary water boil adv1so · . ; raa fluke 1ncI e-and the use o enera un o ars to fund an enterprise issue. ,~, ,.,,, • • • • ~1/, .. ,. "'»•. . Council d1scuss10.· n.· e~§.u~d in suppoftt the~1s1.sl■.-rn.Ge of a.ol)lt.1me fixed charge credits and . . ~~/, . -~~,~·-~-one-time variable 9,--·,>J-,tj1ts. ,, _I~ ·,• ~ • ./4 , -~ Motioned by Ml/vaus, s'2nded b~memDMullin, to direct staff to issue a one-time fixed ltljge ere~ and one~Je variable charge credits, equal to 118th of a water customer',.Jllic j,j •. ~,,!!~barges,~, those customers who experienced the •-~, .... ·1 .,t~~_,. t · .,., I t t t ed $420 000 us·1ng preca~, -d,EJ wa ~""'A -ry~~n 1n cf'41 amoun no o exce , the/, -~!«'rf?dll.~t/;.,2iExtrT#IJ;vent8"~~i:~Sr-tity reserve per City Council direction at 1#Z .,,~. -~; .,.., · th~41cember 17, -z.cou~-eeting. ·M1Q;tion carried 411, with Councilmember Mullm votiflao. ' ' WORKSHr~ \ ' ... /, • None. ' J ... "' COUNCIL-INITIATED ltaM~.-t•t -~/ None. COUNCIL COMMITTEE REPORTS and ANNOUNCEMENTS: Pursuant to AB1234 -(G.C. 53232(d)) The Mayor and Council made announcements and reported on various events taking place in the City. No action was taken. Councilmember Grosch thanked volunteers and Public Works for their participation in the Twin Peaks Clean-Up volunteer event. 6of7 March 3, 2020, Item #2 City of Poway -Minutes -February 4, 2020 Deputy Mayor Frank spoke regarding the Elevate SD 2020 MTS ballot initiative and explained that current bus routes in Poway would have extended frequency and hours. CITY MANAGER ITEMS: None. CITY ATTORNEY ITEMS: (Including any public report of any action taken in closed session) 8. Workshop Regarding New State Housing Laws City Attorney Alan Fenstermacher presented the report~•with a slideshow presentation. Mr. Fenstermacher explained that Senate Bill (SB) 3d~ known as Housing Crisis Act of 2019, wen~ into effect January 1, 2020. ~r. Fenste~.•J11&,~~,rther explained tha_t the purp~se of SB 33_0 1s to prevent any futu~e planrn_n_g tha! f'JT,re · ·~~e allowed den~,t~ of housing on any site and preclude approving spec1f1c pr9tl:,tsWhere h.jlg would be eliminated to be replaced with less housing. In addition, Mr. ~macher clarf,that the City can decrease the density of a given site if they increase;. ~where. Mr. Fens~·, acher further explained that on a project ~e~el, th~ city c~n.'t _apprf<li_housing developml'~-jec~ u~less ther~ ~s ~~c~~\~~f:. of existing units but. 1f 1t 1s. dem~~:,~~n~~-.arehouse ~ its place, 1t 1s ;.1/,, ~ ~ Mr. Fenstermacher explained t1f,IIJathe Housing.countability Act, there are only two ways that the City can deny any{lo~fo~housing f(ae.lopment project: 1) if the project doesn't comply with objective gene~,111a-1,, ner zonirtfiltan. dard or 2) if it would result in .f. d h I a.. d f t -~,4~ t thw,&9,,,, t b ;~, t d a spec1 1c a verse ~,,u,,✓,an sa e y 1m~ac a 1/,ea1·•·, :~o e mitdma e . . ~;:.;/ ~,, .'~'/ '~- No speakers. ..£P_~.1/, '2.3"'i(:, }~_;;"0 1/#, 1/,,, -~ ~J.1;:;Ji ~~-.9.·~ 1//(,_;;,f:f Council discussio;'la 9 C' . -~ JI••/.•/,). ·1/,~ 1/, 1/,. • ---~■¼~1/■■R:1/,.1/, ~ •.. I -~~, ·1 . ~--:/•1/, ~A_~f' a I . d th t th c·t ·11 b t ff t d bn r_ew,,•~JL~I 11n · -~,b.er. :n1;~,-~11 ~xp ;me _da f e1 di y ~1 e mff k a _ect~ Y,11,Jllc a e ou3g aw ~-le er . "''·~• _c>am ~~ res1 en 1a eve ~p~en I e in e Pow.toad Spec1fie~~an, antJbere will b~l:t-m1ted ability to reduce density 1f the proposed projl')1'\~comply with a''l9a.~ndaralt§l addition, Mr. Fenstermacher explained that in a specific I h~. d" /f~-dw_, . h h t h . t. . t "th th p an t :-s more 1screi,11 to e11eine w et er or no t e proJec 1s cons1sten w1 e specific pfftaut if the projljis deni.even though it is within the base density and complied with all objed{jt0 specific pllf~tandards, a lawsuit can be brought forward to force the City to th ~-t d t• II b f. d $10 000 ·t th t d . d approve e proJe".A ... an p.O.J;,,,j,a y e me , per urn a was erne . 't'/,·. Council received aYffl~f-ifgdrthe report. No action was taken. //~:t • ADJOURNMENT The meeting adjourned at 8:26 p.m. 7of7 Faviola Medina, CMC City Clerk City of Poway, California AGE NDA REPOR T CityofPoway CITY COUNCIL DATE: March 3, 2020 TO: Honorable Mayor and Members of the City Council FROM: Eric Heidemann, Director of Public Works f CONTACT: SUBJECT: Summary: Will Wiley, Assistant Director of Public Works for Maintenance Operation (858)668-4750 or wwiley@poway.org Acceptance of City Facilities Roofing and HVAC Replacement 2018-19, Bid No. 19-012 This project consisted of roof replacements at eight City facilities and 21 HVAC package unit replacements at three City facilities, and included all necessary equipment and supplies to complete the work as directed by the City. Recommended Action: It is recommended that the City Council: 1.Accept the City Facilities Roofing and HVAC Replacement 2018-19, Bid No. 19-012 as complete; 2.Authorize the City Clerk to file and record the Notice of Completion; 3.Authorize the release of the retention in the amount of $36,470.60, 45-days after the City Council's acceptance; 4.Release the U.S. Specialty Insurance Company Bond for Material and Labor in the amount of $72,299.54; and 5.Retain the U.S. Specialty Insurance Company Bond for Faithful Performance for a period of one year. Discussion: On May 21, 2019, the City awarded the Contract for City Facilities Roofing and HVAC Replacement 2018-19, in the amount of $654,608.39 to Good-Men Roofing & Construction, Inc. The award of the Contract did not initially include three bid items, which were removed as a result of a deductive alternate process. During a deductive alternate process, items listed as part of the overall project are listed in inverse priority order and deleted from the base bid to maximize the amount of work to be completed within the project's available budget. The three bid items initially removed from the awarded Contract included the following: 1) Garden Road Park Restroom Roof, Silverset Park Restroom Roof and Valle Verde Park Restroom Roof; 2) Community Park Pool Filter Building Roof; and 1 of 2 March 3, 2020, Item #3 March 3, 2020, Item #3 3) Northcrest Pump Station Roof. The awarded Contract consisted of roof replacements at t h e Public Works Operations Center/Warehouse and Fire Station 1 and included replacing 21 HVAC units at the Public Works Operations Center/Warehouse (two units), Fire Station 1 (six units) and Sheriff Station (13 units). The roof replacements involved the removal and replacement of roof material, fascia, flashing, sheathing, and proper asbestos remova l and handling as required. The notice to proceed was issued for July 5, 2019 . The project was required to be completed by October 25, 2019, per the terms and conditions of the Contract. There was one change order in the amount of $97,978.62 to complete the previously removed deductive alternate items (Ga r den Road Park Restroom Roof, Silverset Park Restroom Roof, and Valle Verde Park Restroom Roof; Community Park Pool Filter Building Roof; and Northcrest Pump Station). The Change Order also included the roof replacement of the Lake Poway Recreation Office. The City received a credit in the amount of $23,175 for Fire Station 1, which factored into the fund ing for the change order of the roof replacements. The net change to the Contract is $74,803.62 ($97,978.62 -$23,175). The final Contract amount is $729,412.01. Staff finds the project to be complete in accordance with the standards and specifications of the Contract. Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: Sufficient funds are available in the Public Facilities General Maintenance Project accounts (MNT0003, MNT0004 and MNT0015) for the release of retenti on in t he amount of $36,470.60. Funds remaining in the projects at year end will be returned to the Capital Facilities Fund to use on future projects. Public Notification: None. Attachments: None. Reviewed/ Approved By: We~ Kase r man Assistant City Manager 2 of 2 Reviewed By: Alan Fenstermacher City Attorney Approved By: City Manager March 3, 2020, Item #4 DATE : TO: FROM: CONTACT: SUBJECT: Summa ry: AGENDA REPORT CityofPoway March 3, 2020 Honorable Mayor and Members of the City Council Aaron Beanan, Director of Finance ~ Aaron Beanan, Director of Finance (858) 668-4411 or abeanan@poway.org CITY COUNC I L Public Hearing for Approval of New Rate Structures, Two-Year Water, Recycled Water, and Wastewater Rates, and Approva l of and Appropriation for One-time Sa lary Range Adjustments Two public workshops held on October 15, 2019 and November 19, 2019 presented multiple rate design options for consideration by the City Counci l and public input. The goals of these workshops were to help ensure the City has rate structures that comp ly with the law, ensure each rate payer class is paying their proportionate share of the water and wastewater costs, and ensure fi nancial sustainability of both the water and wastewater enterprise funds. After comments received from the p u blic and City Council discuss ion over the course of these two workshops, the City Council selected the rate structures associated with wa t er Option 2b and wastewater Option 2c. At the January 7, 2020 City Council meeting, staff summarized the proposed rate structure modifications, rate drivers, proposed two-year rates, and indicated one-time sa lary range adj ustments were included for certain utilities positions to help address attraction and retention challenges. At the conclusion of the January 7, 2020 meeting, the City Counc il approved setting the public hearing for March 3, 2020 to ho ld a majority-protest public hearing. The Ca lifornia Constitution, Article XI IID, Sect ion 6, states that local governments must hold a Majority- Protest Public Hearing and notify property owners at least 45 days in advance of the public hearing related to proposed water, recycled water. and wastewater rates. The notice (Attachment D) was mai led to 13,355 active accounts on January 16, 2020, at least 45 days prior to the public hearing. Under the law, if written protests against the proposed rate increases are presented by a majority of property owners (i.e. more than 6,678 ac tive accounts), the increases shall not be approved. If a majority protest does not exist, Council may elect to approve the proposed rate structure modification, proposed two-year rates, and one-time salary range adj ustements for certain utilities positions at the conclusion of the publ ic hearing. As of. February 25, 2020 a total of 109 protests were filed with the City Clerk. A summary of the protests filed w ith the city is shown in Attachment F. The actual protests are on file with the City Clerk's Office. Recommended Action: It is recommended that the City Council take public input, close the public hearing and adopt the resolutions if a majority protest does not exist. 1 of96 March 3, 2020, Item #4 Discussion: During the City Council discussion at the January 8, 2019 Water and Sewer Rate workshop, the Council expressed interest in conducting a new water and sewer rate study prior to the 2020 rate setting process, as it had been many years since a Cost of Service Study had been conducted. Some of the goals of the study were to ensure financial sustainability and compliance with the law. During the discussion the City Council also indicated the consultant and staff should evaluate different rate structures and how they impact different classes of rate payers. It was very important to Council that multiple rate designs were presented along with the associated impacts to ratepayers so that each potential option's impacts were easily understood. Since one of the goals of the workshops was to provide several different rate structures and information about how each structure impacts rate payers, multiple options were presented in the October 15, 2019 staff report. A total of nine different rate design options were presented for water along with four different rate design options for wastewater. At the October 15, 2019 workshop, after comments received from the public and City Council discussion, the City Council: 1. Selected two options each for water and wastewater for further discussion, a. Water Option 2b and 2c b. Wastewater Option 2b and 2c 2. Directed staff to adjust the proposed reserve levels from 180-days of operating expenditures to 120-days, and 3. Directed staff to provide rate payers with a bill estimator tool for the four options being considered at the second workshop. At the November 19, 2019 workshop, after comments received from the public and City Council discussion, the City Council: 1. Selected Water Option 2b, a. Three-tier structure with a fixed/variable ratio of 20 percent/BO percent 2. Selected Wastewater Option 2c, and a. Fixed plus variable structure with a fixed/variable ratio of 30 percent/70 percent 3. Directed staff to explore increasing the water fixed/variable ratio over time. As a result, Raftelis Financial Consultants, Inc. (RFC), the consultant hired to conduct the comprehensive cost of service study, prepared a Water and Wastewater Cost of Service and Rate Study Report (Attachment E) summarizing the key findings and recommendations related to the proposed rate structures, financial plans, and water and wastewater rates. Like the January 7, 2020 meeting to set the public hearing, this staff report focuses on the proposed water and wastewater rates and what is driving the recommended two-year revenue increases. A two-year rate setting process strikes a balance between flexibility and efficiency. A two-year period is short enough to allow rate changes if future projections are different than anticipated while also reducing the administrative costs of adopting new rates. Additionally, staff recommends slowly adjusting the water fixed/variable ratio during each two-year rate setting process, beginning with the rates that will be brought to Council for consideration in the Fall of 2021. 2 of96 March 3, 2020, Item #4 Proposed Water Rates Two-year revenue increases of 4.5 percent in March 2020 and 4.5 percent in January 2021 are being proposed for water to cover the increasing costs of providing safe, reliable water on demand to rate payers. The first-year revenue increases will impact rate payer classes differently as a result of the cost of service study (COSS) and proposed rate structure changes. During a COSS, costs are allocated to rate payer classes based on their current proportional use of the system. This rebalancing of customer classes' impacts on the system means there will be uneven impacts to rates the first year. Revenue increases will impact rate payer classes uniformly in subsequent years. The increases are necessary to fund the costs of imported water, capital expenses, operational expenses, and appropriate reserve levels. One of the largest factors driving the proposed revenue increases is imported water costs. San Diego County has a semi-arid climate. Before 1947, the San Diego region relied on rainfall and groundwater to meet its water needs (San Diego County Water Authority "SDCWA", Urban Water Management Plan 2010). As the economy and population grew, local water resources became insufficient to meet the region's water supply needs and required imported water from hundreds of miles away to support the growth. Much of the region's water is imported from northern California near San Francisco and Sacramento (i.e. the Bay-Delta). Importing water is very energy intensive. Over-time, the cost to transport this water increases as factors like energy prices increase. Investment by SDCWA into regional water supply and infrastructure projects to reduce reliance on imported water and mitigate the effects of natural disasters, such as earthquakes, is also expensive. For example, SDCWA's investment into the Claude "Bud" Lewis Desalination Plant cost close to $1 billion, but it gave the region a new drought-proof, locally controlled supply of water. Imported water represents 60 percent of water operating costs. When imported water costs increase, this impacts the City of Poway's water rates. SDCWA untreated water rates increased 4.8 percent in 2020. SDCWA used reserves to temper this increase to member agencies, otherwise it would have been greater. Their rate increase was driven by Metropolitan Water District's (one of SDCWA water suppliers) untreated water rate increase of 3.3 percent and the Quantification Settlement Agreement (QSA) increase of 6.4 percent. The QSA is a long-term water supply reliability project that secured a major water supply source for San Diego County through the Imperial Irrigation District water transfer. The next largest factor driving the proposed revenue increases is rate-funded capital improvement projects. Rate-funded capital is paid for via rates or reserves; no debt is currently used to fund capital projects. The City of Poway's water system includes over $100 million in infrastructure necessary to provide associated services. This infrastructure includes water assets to transport water from the San Diego County Water Authority's (SDCWA) system to the city's system, assets to treat the water to safe drinking levels, and assets to deliver safe, reliable water on demand to each rate payer's property. The following are some facts about the water system: • 294 miles of transmission and distribution pipelines • 5,044 water valves, 21 pressure reducing stations and 14 pump stations (designed to raise water to higher elevations) • 19 reservoirs (Lake Poway holds ~one billion gallons of water) • One 24 million gallon/day water treatment plant • 2,435 fire hydrants • Approximately 45,000 tests to ensure Poway water meets or exceeds the State and Federal standards for water quality 3 of96 March 3, 2020, Item #4 Rate -funded cap ital is currently proposed at approximately $12 million over the next five years. or slightly more than $2 million per year on average. While not a sign ificant rate driver, it is important to h ighlight that one-time sa lary range adjustments are built into the proposed water rate increases. These are not cost of living adjustments. Salary and benefit changes approved for both the Management/Confidential and non-safety Teamsters employees did not inc lu de cost of living adjustments. Rather, they included one-time stipends in Fiscal Years 20 19-20 and 2020 -21 as a result of the General Fund's financ ial outlook. However, one-time salary range adj ustments are being proposed due to attraction and retention cha llenges specifica lly within utilities job class ifications. In Fiscal Years 20 17-18 and 2018-19 there were 58 vaca ncies in regu lar positions across the City, of which 22 (almost ha lf) were in the Public Works Department, with 10 in utilities specifically. Further, the turnover rates during these two fiscal years for positions represented by the Teamsters bargain ing unit were the highest out of the city's barga ining gro ups at 19.40 percent. To understand this data, Human Resources conducted an analysis of the market with specific focus o n the utility positions. Based on this ana lys is, it was determined certa in pay grades for uti lity positions are well below the market. This disparity is be lieved to be the most sign ificant reason for the recruitment and retention cha llenges the City is experiencing in those pos itions. As such, salary range adjustments are needed to bring the pos itions as close to median as poss ibl e. This wi ll help improve the attraction and retention of the high ly special ized positions needed to ensure the safety and reliabi lity of the water system. The approximate annual cost to bring 24 positions close to median is $205 thousand . Given there are approximately 13,900 water cus tomers, and assuming a perfectl y even d istribution , that equates to roughly $2.50 per rate payer b i-month ly. Staff requests an appropriation of $68,000 to cover four months (March -June) of water staff's salary range adjustments. The chart below shows t he impacts of the first year's revenue i ncrease to fund the costs of imported water, ope ration, maintenance, and rep lacement of infrastructure along with maintini ng appropriate reserves across various water usage levels. SFR Impacts at Diffe rent Usage Levels-3/4" Meter -3-Tiered $1.600 $1 ,400 $1.200 $1 ,DOO $800 $600 $400 $200 so Curr em B ■Pro pose d B ripact (S) ripacr(%) 4 of96 -$95.~£ 1C un;i:s 59 5.!!E S1C152 $5.EL 5. g=:~ ■ s1.::.9_.:la 1C un ts s1.:s . .::s 51.::t.~1 ·52 .CE ·1 . ..:.~ I I II SlLD.EC $3Ll,eL 5578 .28 S846.le 3 7 un ts SE un cs 1CG un t s 150 unts $2LC.6C S3L2 ,,.:.: 5578.2B S846.2S S2 38.37 S 3L!.C .C2 StE7.S2 Sl.CLG1.3 2 ·52 .23 ·S2.L1 SB9 5.!l S1 SL.C..!'.. ·L .9~·c ·C. 7'·• 15.5 % 22.5% $1.11 E.57 2:cun ts Sl.116.5 7 $1,411.21 S29 E.25 26.5~ March 3, 2020, Item #4 Proposed Wastewater Rates Two-year revenue increases of 6.3 percent in March 2020 and 6.3 percent in January 2021 are being proposed for wastewater to cover the increasing costs of providing safe, reliable wastewater services to rate payers. Like water, the impacts in the first year will be uneven as a result of the COSS process. The increases are necessary to fund the costs of wastewater treatment, capital expenses, and operational expenses. These proposed rate increases reflect the use of reserves to temper the impacts to rate payers. Funds to cover Poway's estimated share of the San Diego Pure Water project were set aside as part of a strategic financial management decision to help mitigate the impacts to rate payers and is more fully discussed below. The most significant rate driver driving the proposed revenue increases is wastewater treatment costs. Wastewater treatment represents 44 percent of all operating expenses. When wastewater treatment costs increase, this impacts the City of Poway's wastewater rates. The largest factor increasing wastewater treatment costs is the San Diego Pure Water project. San Diego's Pure Water project is a multi-year project that is projected to supply one-third of San Diego's water supply locally by 2035. Based on projections from April 2019, Poway's estimated share of the project is over $4 million annually for the next five years. However, several years ago staff began incorporating these costs into rates as part of a long-range financial management strategy to mitigate the impacts of this project to ratepayers. Funds collected have been set aside in reserves. As such, a combination of reserve draws and rate increases will be used over the coming years to temper the impacts to ratepayers. Additionally, a wastewater treatment plant is designed to treat certain types of waste. Lastly, as people dispose of pharmaceuticals, food waste, cooking oil, industrial chemicals, etc. down the wastewater system, the treatment process gets extended which increases costs. The next largest factor driving the proposed revenue increases is rate-funded capital improvement projects. Rate-funded capital is paid for via rates or reserves; no debt is currently used to fund capital projects. The City of Poway's wastewater system includes over $100 million in infrastructure necessary to provide associated services. Rate funded capital is also being proactively invested in the rehabilitation and repair of the wastewater infrastructure to ensure Poway continues to provide safe, reliable, and affordable wastewater services. Wastewater infrastructure includes infrastructure to transport wastewater from the city to various treatment plants within the County of San Diego in a safe and reliable manner including over 186 miles of wastewater pipes, five lift stations (designed to raise wastewater material to a higher elevation}, and over 4,000 maintenance covers. Rate-funded capital is currently proposed at approximately $5 million over the next five years, or slightly more than $1 million per year on average. While not a significant rate driver, it is important to highlight that one-time salary range adjustments are built into the proposed wastewater rate increases similar to water. The approximate annual cost to bring 11 positions close to median is $145 thousand. Given there are approximately 12,100 wastewater customers, and assuming a perfectly even distribution, that equates to roughly $2 per rate payer bi-monthly. Staff requests an appropriation of $48,000 to cover four months (March -June) of wastewater staff's salary range adjustments. The chart on the following page shows the impacts of the first year's revenue increase to fund the costs of wastewater treatment, operation, maintenance, and replacement of infrastructure along with maintining appropriate reserves across various wastewater generation levels. 5 of96 March 3, 2020, Item #4 SFR Impacts at Different Generation Levels I I 5 cc' 12 cc' ■ Current 8 ■Frcpcsed B .r1p:1::t(S '1 d'1pact (%) ss:.ss ·$1.38 Commu n ity Outreach S75.12 $5.EE 1!l cc' SS9.7S s1:s_,,: ss.ss 1.,.. ... ,. ........ 0 2€ cc 37 ~CT SC ccf t:C ccf S1D7.33 S 122.38 S13?.£-3 51£.S.73 S13161 513161 S131.El $131.El S2L.28 S923 -S5.22 ·S17.12 l1.E% 7.5% .£.2% ·11.5,, As shown in t he timeline section be low, several workshops/meetings w ere held to d iscuss the proposed rate structu res and rat es . At Council's di rection, staff created a bi ll estimator too l to help residents evaluate t he va r ious proposa ls being considered and posted that to the City's website on Octobe r 22, 2019. Since the n, the t ool has been updated as the options under consideration were narrowed down. As of February 11, 2020, 277 people have downloaded this tool in its various iterations. Further, information specifically about t he major ity-protest public hearing, proposed rate structures, proposed rates, and current b ill estimator tool was posted to the homepage of the City's webs ite and the Water and Sewer Services section of the Finance Depa rtment webpage. This i nformation was also ac t ively comm unicated to the publ ic via the City's Nextdoor public agency account, its City of Poway Facebook page, its City of Poway Twitter account, and the Poway Today e-newsletter. Timeline This publ ic hearing represents the final step in a proposed two-year rate setting process. The following graphic shows the proposed time li ne for the fi rst two-year cyc le. Workshop 1: Oct. 15, 2019 Public Hearing: Mar. 3, 2020 Environme ntal Revie w: Workshop 2: Nov. 19,2019 Year 1 Rates Effective: Mar. 3, 2020 Set Public Hearing: Jan. 7, 2020 Year 2 Rates Effective: Jan . 1, 2021 Mail 218 Notice: By Jan. 17,2020 This project is exempt from the Ca lifornia Env ironmenta l Qua lity Act (CEQA) per State CEQA Guide li nes Section 15273(a): modification, structuring, restructuring, or approva l of rates, to ll s, fares, or other charges by public agencies. 6 of96 March 3, 2020, Item #4 Fisca l Impact: If approved, the proposed water and wastewater rate structure changes and water, recycled water, and wastewater increases w ill be effective March 3, 2020 and January 1, 2021, as described in th is staff report and its attachments, and will generate sufficient revenues to fund operations, investment in capita l infrastructure, and appropriate reserve levels for water and wastewater. Over the next two- year period, it is estimated approximately $2 m ill ion in additiona l water revenues will be generated w h ile approx imately $900 thousand in additiona l wastewater revenues will be generated if the proposed rates are adopted at the p u b lic hearing. St aff is requesting an appropriation of $68,000 to cover four months (March -Ju n e) of water staff's salary ra nge adjustments and $48,000 to cove r four mon ths (Ma rch -June) of wastewater staff's sa lary range adj ustments. Sufficient funds are available for this request. Amounts to cover the one-time sa lary range adjustments wil l be included in future year's budgets. Safe re liable water delivered on demand to an average res idential rate payer costs less than n ine- tenths of one penny per ga llon. Treating the average residentia l rate payer's wastewat er in a safe and rel iable fashion a lso costs less than n ine-tenths of one penny per gallon. Public Notification: The Californ ia Constitution, Artic le XIII D, Section 6, states that local governments must hold a Majority- Protest Public Hearing and notify property owners at least 45 days in advance of the public hearing related to proposed water, recycled water, and wastewa ter rates. The notice (Attachment D) was ma il ed to property owners on January 16, 2020, at least 45 days prior to the public hearing. A Notice of Public Hearing was publ ished in the Poway News Chieftain on February 20, 2020 and February 27, 2020. As of, February 25, 2020 a total of 109 protests were filed with the City Clerk. Attachments: A. Reso lu tion Estab lishing Water Service Charges and Ra t es B. Reso lu t io n Establ ishing Wastewat er Service Cha rges and Rates C. Reso lutio n Approving Management/Confidential and Non-saftey Teamsters Salary Sc hedules D. Notice of Public Hearing E. City of Poway Water and Wastewater Cost of Service and Rate Study Report F. Summary of Protests Received Reviewed/Approved By: Wendy Kaserman Ass istant City Manager 7 of96 Revie w ed By: Alan Fenstermacher City Attorney Approved By: City Manager March 3, 2020, Item #4 RESOLUTION NO. 20- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, ESTABLISHING WATER SERVICE CHARGES AND RATES PER SECTION 13.11.120 OF THE POWAY MUNICIPAL CODE WHEREAS, the City of Poway provides water services to residents of Poway; WHEREAS, the California Constitution Article XIII D §6(a)(2) requires local governments hold a majority-protest public hearing and notify rate payers not less than 45 days in advance of the public hearing before increasing water rates and charges; WHEREAS, the city is proposing water rate structure modifications and two-year water and recycled water rates and charges, effective March 3, 2020 and January 1, 2021; WHEREAS, the City Council of the City of Poway held a duly noticed public hearing on March 3, 2020, pursuant to the provisions of Article XIIID of the California Constitution and the Proposition 218 Omnibus Implementation Act; WHEREAS, the City Council received a final tabulation of all written protests received by the City Clerk at the March 3, 2020 Proposition 218 hearing; and WHEREAS, the City Council considered all written protests and heard oral arguments to the proposed rate structure changes and rates and charges at the public hearing. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: SECTION 1: That the above recitations are true and correct; SECTION 2: The City Council hereby finds that no majority protest for the water and recycled rates and charges were received; SECTION 3: The City Council hereby establishes and approves the water rate structure modifications, as set forth in the Water and Wastewater Cost of Service Study Report (Attachment E), and two-year rates and charges for water and recycled water, effective March 3, 2020 and January 1, 2021, as set forth in the Notice of Public Hearing (Attachment D), for all water used on or after March 4, 2020. Any water rates or fees associated with water service, including raw water, not addressed within the Notice of Public Hearing shall remain in full force and effect as previously adopted; 8 of96 ATTACHMENT A March 3, 2020, Item #4 Resolution No. 20- Page 2 SECTION 4. That the setting of such charges and rates is statutorily and categorically exempt from the requirements of CEQA, pursuant to Section 21080(b)(8) of the Public Resources Code, and Title 14 of the California Code of Regulations, Sections 15273(a) and 15307; SECTION 5. This Resolution shall take effect immediately. 9 of96 March 3, 2020, Item #4 Resolution No. 20- Page 3 PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California at a regular meeting this 3rd day of March, 2020 by the following vote, to wit AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Faviola Medina, CMC, City Clerk 10 of 96 March 3, 2020, Item #4 RESOLUTION NO. 20- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, ESTABLISHING SEWER SERVICE CHARGES AND RATES PER SECTION 13.03.010 OF THE POWAY MUNICIPAL CODE WHEREAS, the City of Poway provides sewer services to residents of Poway; WHEREAS, the California Constitution Article XIII D §6(a)(2) requires local governments hold a majority-protest public hearing and notify rate payers not less than 45 days in advance of the public hearing before increasing water rates and charges; WHEREAS, the city is proposing sewer rate structure modifications and two-year sewer rates and charges, effective March 3, 2020 and January 1, 2021; WHEREAS, the City Council of the City of Poway held a duly noticed public hearing on March 3, 2020, pursuant to the provisions of Article XIIID of the California Constitution and the Proposition 218 Omnibus Implementation Act; WHEREAS, the City Council received a final tabulation of all written protests received by the City Clerk at the March 3, 2020 Proposition 218 hearing; and WHEREAS, the City Council considered all written protests and heard oral arguments to the proposed rate structure changes and rates and charges at the public hearing. NOW, TH ERE FORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: That the above recitations are true and correct; Section 2: The City Council hereby finds that no majority protest for the sewer rates and charges were received; Section 3: The City Council hereby establishes and approves the sewer rate structure modifications, as set forth in the Water and Wastewater Cost of Service Study Report (Attachment E), and two-year rates and charges for sewer, effective March 3, 2020 and January 1, 2021, as set forth in the Notice of Public Hearing (Attachment D), for all wastewater generated on or after March 3, 2020. Any sewer rates or fees associated with sewer service not addressed within the Notice of Public Hearing shall remain in full force and effect as previously adopted; Section 4: Residential wastewater generation calculations take place once per year and will be based on the water use for the property. The residential wastewater 11 of 96 ATTACHMENT B March 3, 2020, Item #4 Resolution No. 20- Page 2 generation amount is determined based on November through April water usage (winter water use) to help exclude water used on landscaping in the warmer months. The lowest water consumption during this period is selected for each of the three most recent years, and then averaged. Eighty-five percent of that averaged amount is estimated as wastewater generation. For newly constructed single-family residential properties with no winter water use history, the customer will be billed for 15 units of wastewater generation (the average residential generation calculated in the December 12, 2019 Water and Wastewater Cost of Service Study Report) until winter water use is established with one full billing cycle during the winter months of November through April. After one year of winter water use is established, the customer will be billed based on the methodology above for existing residential properties. If any rate increases are proposed within 90 days of any residential wastewater generation calculations, the residential wastewater generation calculations will not occur until the new rates have been adopted; Section 5: That the setting of such charges and rates is statutorily and categorically exempt from the requirements of CEQA, pursuant to Section 21080(b)(8) of the Public Resources Code, and Title 14 of the California Code of Regulations, Sections 15273(a) and 15307; Section 6: This Resolution shall take effect immediately. 12 of 96 March 3, 2020, Item #4 Resolution No. 20- Page 3 PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California at a regular meeting this 3rd day of March, 2020 by the following vote, to wit AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Faviola Medina, CMC, City Clerk 13 of 96 March 3, 2020, Item #4 RESOLUTION NO. 20- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, APPROVING THE MANAGEMENT/CONFIDENTIAL SALARY SCHEDULE AND THE NON-SAFETY TEAMSTERS SALARY SCHEDULE WHEREAS, a Salary Schedule is established for designated Management/Confidential employees, which includes certain supervisory and professional employees; WHEREAS, a Salary Schedule is also established for Non-Safety Teamsters employees, which includes regular part-time and regular full-time employees not covered by the Management/Confidential Salary Schedule; WHEREAS, a key motivator for attracting and retaining quality employees is to have a competitive salary; WHEREAS, it has been identified that certain utilities positions in water and sewer services within the City are significantly below the market median for salaries, resulting in high turnover rates and challenging recruitments; WHEREAS, one-time special salary range adjustments have been applied to certain utility positions to bring them as close to the market median as possible within the City's classification and compensation structure; WHEREAS, the Management/Confidential Salary Schedule has been revised to reflect the above-mentioned salary range adjustments for the classifications of Utility Systems Supervisor, Water Treatment Plant Supervisor, Wastewater Utilities Supervisor and Water Utilities Distribution Supervisor; WHEREAS, the Non-Safety Teamsters Salary Schedule has been revised to reflect the above-mentioned salary range adjustments for the classifications of Cross-Connection Specialist, Customer Services Field Worker, Lead Customer Services Field Worker, Utility Systems Mechanic, Senior Utility Systems Mechanic, Utility Systems Technician, Senior Utility Systems Technician, Wastewater Utilities Crew Leader, Wastewater Utilities Worker I, Wastewater Utilities Worker 11, Water Meter Reader, Water Treatment Plant Operator I, Water Treatment Plant Operator 11, Water Utilities Crew Leader, Water Utilities Worker I and Water Utilities Worker II; and WHEREAS, new"Grade Numbers" and numerical "Steps" replace old grade numbers and letter "Steps" on the Non-Safety Teamsters Salary Schedule due to the implementation of MUNIS, the City's new financial/payroll system, and this was previously done for the Management/Confidential Salary Schedule. 14 of 96 ATTACHMENT C March 3, 2020, Item #4 Resolution No. Page 2 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: The above recitals are true and correct; Section 2: The Salary Schedule for employees designated as Management/Confidential Salary Schedule, attached hereto as Exhibit A, is hereby adopted, effective March 9, 2020; Section 3: The Salary Schedule for employees designated as Non-Safety Teamsters Salary Schedule, attached hereto as Exhibit B, is hereby adopted, effective March 9, 2020; Section 4: That an appropriation of $68,000 to applicable water divisions and $48,000 to applicable wastewater divisions to fund four months of salaries under the new Salary Schedule for employees designated as Management/Confidential and Non-Safety Teamsters is hereby approved. 15 of 96 March 3, 2020, Item #4 Resolution No. Page 3 PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California at a regular meeting this 3rd day of March, 2020 by the following vote, to wit AYES: NOES: ABSENT: DISQUALIFIED: Steve Vaus, Mayor ATTEST: Faviola Medina, CMC, City Clerk 16 of 96 March 3, 2020, Item #4 Exhibit A City of Poway Management I Confidential Salary Schedule Effective March 9, 2020 Classification Title I Grade I Approx. Monthly I Salary Range Citv Man;::ic,,:,r '::}'::}'::} 20 604 (.;rn11n 1 ExPmnt At-Will Assistant City Manager 871 13.981 -16.994 Director of Community Services 791 11.612-14.115 Director of Development Services 831 12.665 -15.393 Director of Finance 791 11.612-14.115 Director of Human Resources & Risk Management 771 11.060 -13.443 Director of Public Works 831 12.665 -15.393 Fire Chief 831 12 hhc; -1 c; ~9~ r.:rn11n 2A l=v,:,mnt At-Will Assist. Director of Public Works Operations 731 9,937 -12.080 Assist. Director of Public Works Utilities 731 9.937 -12,080 City Clerk 681 8.778 -10.670 City Engineer 751 10.436 -12.687 City Planner 731 9,937 -12.080 Community Services Manager 681 8,778 -10,670 Construction Project Manager 681 8,778 -10,670 Deputy Fire Chief 751 10.436 -12,687 Finance Manager 681 8,778 -10,670 Fire Battalion Chief (not at-will/2912 hrs/vr) 542 8.778 -10.670 Information Technology Manager 681 8.778 -10.670 Public Works nn,:,rations Man;::ic,pr 681 8 778 -1n h70 (.;rn11n 2R ExPmnt Accountant (Effective 12110119) 481 5,326 -6.475 Associate Civil Engineer 602 7.261 -8,826 Associate Planner 521 5,902-7.174 Budget Administrator 631 7.744-9.413 Community Outreach Coordinator 531 6,050 -7,354 Customer Services Supervisor 571 6,678 -8,117 Economic Development Administrator 631 7,744 -9.413 GIS Analvst 531 6,050 -7,354 Information Technology Analvst 531 6,050 -7,354 Management Analvst 531 6,050 -7,354 Network & Computer Svstems Administrator 571 6,678 -8,117 Senior Accountant 561 6.515 -7.919 Senior Civil Engineer 682 8,871 -10.782 Senior Code Compliance Officer 501 5,618 -6,829 Senior Fire Safety Inspector 541 6,201 -7,537 Senior Human Resources Analvst 571 6,678 -8,117 Senior Management Analvst 571 6,678 -8,117 Senior Planner 581 6,845 -8,320 Special Projects Engineer 571 6,678 -8,117 Water Treatment Plant Supervisor 630 7,691 -9,349 Water Utilities Distribution Suoervisor 640 7 884-9 583 Grouo 3 Non-Exemnt Assistant Engineer 531 6,050 -7,354 Assistant Planner 491 5,481 -6,662 Code Compliance Officer 461 5,090 -6,186 Construction Maintenance Supervisor 501 5,618 -6,829 Facilities Maintenance and Special Districts 501 5,618 -6,829 Fire Safety Inspector 461 5,090 -6, 186 Fleet Maintenance Supervisor 521 5,902 -7,174 Management Assistant 491 5,481 -6,662 Parks Maintenance Supervisor 521 5,902 -7,174 Recreation Supervisor 441 4,844 -5,888 Senior Accounting Technician (Effective 12110119) 460 5,054 -6,144 Senior Parks Maintenance Crew Leader 441 4,844 -5,888 Utility Svstems Supervisor 650 8,081 -9,822 Wastewater Utilities Suoervisor 620 7 504 -9 121 Grouo 4 Non-Exemot Accounting Technician II 333 3,721 -4,523 Administrative Assistant Ill 330 3,692 -4,488 Executive Assistant to the City Manager 451 4,965 -6,035 Human Resources Technician I 412 4,498 -5,468 Human Resources Technician II 451 4,965 -6,035 Senior Accounting Technician 371 4,075 -4,954 Senior Administrative Assistant 371 4075 -4954 17 of 96 Step 1 I 80.6623 66.9951 73.0694 66.9951 63.8049 73.0694 73.0694 57.3277 57.3277 50.6411 60.2097 57.3277 50.6411 50.6411 60.2097 50.6411 36.1722 50.6411 50.6411 30.7255 41.8893 34.0517 44.6789 34.9030 38.5265 44.6789 34.9030 34.9030 34.9030 38.5265 37.5868 51.1773 32.4109 35.7756 38.5265 38.5265 39.4897 38.5265 44.3740 45.4833 34.9030 31.6204 29.3627 32.4109 32.4109 29.3627 34.0517 31.6204 34.0517 27.9478 29.1623 27.9478 46.6204 43.2917 21.4659 21.3002 28.6465 25.9523 28.6465 23.5115 23.5115 Step 2 I Step 3 I Step 4 I Step 5 84.6955 88.9300 93.3767 98.0420 70.3449 73.8622 77.5553 81.4331 76.7229 80.5591 84.5869 88.8056 70.3449 73.8622 77.5553 81.4331 66.9951 70.3450 73.8622 77.5553 76.7229 80.5591 84.5869 88.8056 76.7229 80.5591 84.5869 88.8056 60.1939 63.2037 66.3639 69.6909 60.1939 63.2037 66.3639 69.6909 53.1732 55.8319 58.6235 61.5582 63.2202 66.3812 69.7002 73.1918 60.1939 63.2037 66.3639 69.6909 53.1732 55.8319 58.6235 61.5582 53.1732 55.8319 58.6235 61.5582 63.2202 66.3812 69.7002 73.1918 53.1732 55.8319 58.6235 61.5582 37.9809 39.8799 41.8739 43.9701 53.1732 55.8319 58.6235 61.5582 53.1732 55.8319 58.6235 61.5582 32.2616 33.8747 35.5684 37.3547 43.9837 46.1827 48.4920 50.9165 35.7528 37.5413 39.4178 41.3896 46.9109 49.2574 51.7195 54.3067 36.6466 38.4798 40.4032 42.4243 40.4510 42.4745 44.5975 46.8285 46.9109 49.2574 51.7195 54.3067 36.6466 38.4798 40.4032 42.4243 36.6466 38.4798 40.4032 42.4243 36.6466 38.4798 40.4032 42.4243 40.4510 42.4745 44.5975 46.8285 39.4644 41.4385 43.5098 45.6863 53.7360 56.4230 59.2440 62.2062 34.0300 35.7324 37.5184 39.3952 37.5628 39.4418 41.4133 43.4849 40.4510 42.4745 44.5975 46.8285 40.4510 42.4745 44.5975 46.8285 41.4623 43.5364 45.7124 47.9992 40.4510 42.4745 44.5975 46.8285 46.5927 48.9223 51.3684 53.9369 47.7575 50.1454 52.6527 55.2853 36.6466 38.4798 40.4032 42.4243 33.2000 34.8609 36.6033 38.4343 30.8295 32.3718 33.9898 35.6900 34.0300 35.7324 37.5184 39.3952 34.0300 35.7324 37.5184 39.3952 30.8295 32.3718 33.9898 35.6900 35.7528 37.5413 39.4178 41.3896 33.2000 34.8609 36.6033 38.4343 35.7528 37.5413 39.4178 41.3896 29.3440 30.8119 32.3520 33.9702 30.6206 32.1520 33.7587 35.4464 29.3440 30.8119 32.3520 33.9702 48.9514 51.3990 53.9690 56.6674 45.4563 47.7291 50.1156 52.6213 22.5393 23.6662 24.8498 26.0919 22.3643 23.4831 24.6570 25.8903 30.0776 31.5822 33.1608 34.8195 27.2488 28.6119 30.0420 31.5448 30.0776 31.5822 33.1608 34.8195 24.6860 25.9210 27.2166 28.5780 24.6860 25.9210 27.2166 28.5780 Grade #'s Revised for MUNIS Implementation 1/1/2019 Salaries Effective March 9, 2020 March 3, 2020, Item #4 Classification Title (In alphabetical order) Accounting Technician I Administrative Assistant I Administrative Assistant II Administrative Assistant Ill Aquatics Coordinator Box Office Coordinator Construction Maintenance Crew Leader Construction Maintenance Worker I Construction Maintenance Worker II Contract Specialist/Inspector Cross-Connection Specialist Customer Services Field Worker Customer Services Technician I Customer Services Technician II Development Services Aide Engineering Inspector Engineering Technician I Engineering Technician II Equipment Mechanic Facilities Maintenance Crew Leader Facilities Maintenance Technician I Facilities Maintenance Technician II Front of House Coordinator GIS Technician I GIS Technician II Lead Customer Services Field Worker Lead Engineering Inspector Park Ranger Parks Maintenance Crew Leader Parks Maintenance Worker I Parks Maintenance Worker 11 Records Technician Recreation Coordinator Recreation Leader I Recreation Leader 11 Senior Administrative Assistant Senior Equipment Mechanic Senior Park Ranger Senior Utility Systems Mechanic Senior Utility Systems Technician Stormwater Maint. & Const. Worker I Stormwater Maint. & Const. Worker II Technical Theater Coordinator Utility Systems Mechanic Utility Systems Technician Warehouse Associate Wastewater Utilities Crew Leader Wastewater Utilities Worker I Wastewater Utilities Worker II Water Meter Reader Water Treatment Plant Operator I Water Treatment Plant Operator II Water Treatment Plant Operator Ill Water Utilities Crew Leader Water Utilities Worker I Water Utilities Worker II 18 of 96 Exhibit B City of Poway Teamsters Salary Schedule EFFECTIVE March 9, 2020 I Grade I Step 1 I Step 2 291 19.1880 20.1477 240 16.9394 17.7863 270 18.2419 19.1540 330 21.1549 22.2129 320 20.6389 21.6711 320 20.6389 21.6711 390 24.5332 25.7601 290 19.1653 20.1237 330 21.1549 22.2129 460 29.1623 30.6206 500 32.1898 33.7993 430 27.0801 28.4343 291 19.1880 20.1477 332 21.3201 22.3861 240 16.9394 17.7863 470 29.8914 31.3861 430 27.0801 28.4343 470 29.8914 31.3861 400 25.1465 26.4041 430 27.0801 28.4343 330 21.1549 22.2129 370 23.3510 24.5188 320 20.6389 21.6711 430 27.0801 28.4343 470 29.8914 31.3861 470 29.8914 31.3861 550 36.4198 38.2411 250 17.3629 18.2310 390 24.5332 25.7601 290 19.1653 20.1237 330 21.1549 22.2129 350 22.2259 23.3374 320 20.6389 21.6711 170 14.2504 14.9631 210 15.7299 16.5164 370 23.3510 24.5188 452 28.7288 30.1652 290 19.1653 20.1237 560 37.3303 39.1968 580 39.2201 41.1811 290 19.1653 20.1237 330 21.1549 22.2129 320 20.6389 21.6711 520 33.8194 35.5106 520 33.8194 35.5106 370 23.3510 24.5188 500 32.1898 33.7993 390 24.5332 25.7601 430 27.0801 28.4343 370 23.3510 24.5188 420 26.4196 27.7406 470 29.8914 31.3861 520 33.8194 35.5106 520 33.8194 35.5106 400 25.1465 26.4041 430 27.0801 28.4343 I Step 3 I Step 41 Step 5 21.1548 22.2126 23.3231 18.6759 19.6093 20.5896 20.1119 21.1171 22.1727 23.3238 24.4893 25.7136 22.7549 23.8920 25.0864 22.7549 23.8920 25.0864 27.0484 28.4000 29.8199 21.1301 22.1861 23.2952 23.3238 24.4893 25.7136 32.1520 33.7587 35.4464 35.4892 37.2637 39.1269 29.8563 31.3483 32.9155 21.1548 22.2126 23.3231 23.5055 24.6808 25.9147 18.6759 19.6093 20.5896 32.9558 34.6027 36.3326 29.8563 31.3483 32.9155 32.9558 34.6027 36.3326 27.7246 29.1100 30.5654 29.8563 31.3483 32.9155 23.3238 24.4893 25.7136 25.7451 27.0315 28.3830 22.7549 23.8920 25.0864 29.8563 31.3483 32.9155 32.9558 34.6027 36.3326 32.9558 34.6027 36.3326 40.1535 42.1601 44.2678 19.1428 20.0995 21.1043 27.0484 28.4000 29.8199 21.1301 22.1861 23.2952 23.3238 24.4893 25.7136 24.5046 25.7290 27.0153 22.7549 23.8920 25.0864 15.7113 16.4967 17.3213 17.3424 18.2092 19.1195 25.7451 27.0315 28.3830 31.6734 33.2571 34.9200 21.1301 22.1861 23.2952 41.1567 43.2145 45.3752 43.2402 45.4022 47.6723 21.1301 22.1861 23.2952 23.3238 24.4893 25.7136 22.7549 23.8920 25.0864 37.2864 39.1499 41.1070 37.2864 39.1499 41.1070 25.7451 27.0315 28.3830 35.4892 37.2637 39.1269 27.0484 28.4000 29.8199 29.8563 31.3483 32.9155 25.7451 27.0315 28.3830 29.1276 30.5840 32.1132 32.9558 34.6027 36.3326 37.2864 39.1499 41.1070 37.2864 39.1499 41.1070 27.7246 29.1100 30.5654 29.8563 31.3483 32.9155 Grade #'s Revised for MUNIS Implementation 1/1/2019 Salaries Effective March 9, 2020 March 3, 2020, Item #4 Proposed Rate Change Protests As part of the rate setting process, on March 3, 2020, the City of Poway wi ll conduct a public hea ring on the proposed changes to wa ter and wastewater rates and will consider all oral and written protests to the proposed changes. Oral comments at the public hearing will not qualify as forma l protests unless accompanied by a written protest. Only one written protest will be counted per ident ified pa rcel. While emai l is not an offic ial rate protest mec hanism under Ca lifo rnia law, t he City Co uncil values resident input and will read all email correspondence regarding rates. Written protests mu st include: A description of t he prope rty, such as the address or assessor's parce l number; and The name and signature of the customer submitting the protest. The City Counc il will receive a fina l tabulation of all wr itten protests received by the City Clerk. Written protests must be received by the City Clerk's office no later t han 12 p.m . March 3, 2020, or can be subm itted in writing in the Council Chambers before the public hear ing is closed. If a majorit y of the affected customers do not file written protests of the proposed rate changes, the Council will then consider and may adopt the rate changes descr ibed in this notice. If a majority of affect ed customers file wri t ten protests, t he City Counci l will not adopt the proposed rate adjustments and the City will reconsider the rate structure and rates. Please send written protests to: City Clerk of t he City of Poway POBox789 Poway, CA 92074-0789 19 of96 The City is committed to providing the highest quality water and wastewater services at the lowest possible rates. To keep this commitment, each year the City evaluates its infrastructure needs and operations and maintenance costs for the next year. Based on this evaluation, rate adjustments are proposed for 2020. The rate adjustments being considered will become effective March 2020 for all bills mailed on or after May l, 2020, and January 2021 for all bills mailed on or after March 1, 2021. Why are you receiving this notice? The City of Poway is maili ng this notice to you because you are a water and/or wastewater customer responsible for payment of water and/or wastewater fees, or you are the owner of record for a property that receives water and/or wastewater service. This notice describes proposed adjustmen ts to water and wastewater rates, rate structure changes, and provides notice of the upcom ing public hearing at which these proposed changes will be considered by the Poway City Counc il. NOTICE OF PUBLIC HEARING A PROPOSED WATER AND WASTEWATER RATES J£~ On Tuesday, March 3 at 7 p.m. the Poway City Council will consider adopting proposed changes to water and wastewater charges. The rate adjustments being considered will become effective March 2020 for all bills mailed on or after May l , 2020. The City bills for water and wastewater service bimonthly (every two months) based on consumption during the two months prior to the billing date. ATTACHMENT D DATE Tuesday, March 3, 2020 at 7 p.m. LOCATION City Counci l Chambers 13325 Civic Center Dr. Poway,CA March 3, 2020, Item #4 -• I ----,-::::ir-,·- -:,-ii:~-~ - Pro posed Changes to Water and Wastewater Rates The City of Poway provides safe, reliable water on demand to its customers and purchases nearly 100 percent of its water from the San Diego County Wa ter Authority (SDCWA). Th e cost to purchase and treat imported water co ntinues to increase. The City proactively pl ans for in creases in these costs, a lon g with costs associa ted with operations, main tenance, and r e placement of infrastructure a long with maintaining appropriate r eserves. To acco mmodate these incr eases, the Ci ty i s pro posi n g a djustm ents in pota b le wa ter rates o ve r the n ext two yea rs. The City of Poway maintain s a wastewater system that provides customer s with wastewater collection and conveya nce services to the San Diego Metropolitan Wastewater System (Metro) where the wastewater is treated at the Po int Loma Wastewater Treatment Pla nt and then discharged into the ocean. The City proactively plans for increases in costs associated with operations, maintenance, and replacement of infrastructure along with maintaining appropri ate reserves. The City also pays a percentage share of the operation, maintenance, and capita l replacement costs of the Metro sys tem. To acco mmod ate these i ncreases in costs, adjustm ents in wastewater rates over th e next two yea r s a r e be ing pro µosed. A two-year rate setting process strikes a balance between flexibility and efficiency. A two-year period is short eno ugh to a ll ow rate changes if future projections are different than anticipated while also reduci ng th e admini strative costs of adopting new rates. The rate eva lu ation for both water and wastewater services has been unde rway since Jan uary 2019, with City Council workshops held in October a nd November to receive publi c input. How a re your rates calculated? To cover the costs of purchasing imported water, treating and distributing it, the city is proposing rate changes . All water rates are allo ca ted among customer classes (e .g., reside ntial , non -residential) bas ed on the ir proportionate use of th e system. There are two components: the fixed charge based on the size of th e meter and the variable charge based on the volume of water us ed . The proposed rates include increas ing the fixed/variab le rat io from 16% fixed/84% va riab le to 20%/800/o to support the financia l sustainability of the system. The proposed rates include mov ing to a three-t iered rate structure (versus the current two -ti ered structure ) for residentia l customers to more accurate ly recou p costs based on water usage. The usage charge is a flat per un it rate instea d of a tie red rate for non - res idential customers bas ed on their usage patterns. To cover the costs of collecting, conveying, and treati ng wastewater, the city is proposing rate chan ges. All wastewater rates are allocated amongst customer classes based on their prop ortionate use of the system. Th e proposed rates includ e moving to a "fixed plus variab le" rate st ructure s imilar to water. Since residential customers impact the wastewater system diffe rently than non -residential customers, rates are approac hed differently. For res id ential customers the variab le rate is tied to their winter water usage (when most water is used indoors : wastewater out generally matches water in). For non -resident ial custome rs, it is based on water usage . The proposed rates also incl ude inc reasing the fixed/variable ratio from 20% fixed /80% var iable to 30 %/700/o to support the financial sustainab ility of the syste m. To cover the costs of purchasing imported recycled water and distributing it, the city is proposing rate changes. The recycle d water rate will no longer be a percentage of non -residential water rates; rather, it will be based on th e costs associated with the recycled water serv ice. 0 For add it ion al inform atio n on how your rates have been calcu lated, please refer to the staff report on Jan uary 7, 2020 titled "Set Publi c Hearing for New Rate Structures an d Propo se d Two -Yea r Wat er, Recycl ed Water, and Wastewat er Rat es ." 20 of 96 March 3, 2020, Item #4 CURRENT AND PROPOSED WATER RATES rn,~ ,.,. r~ ,-fJ l:,,B.I?:!; ~""-~l.111',t~IJ ' ~ I -,,±.[f'fjliilDj ~ ... ' --h~i:111:ca : .. ~. ---· :~ :..&•• ~I • ::rn■a I• ..ir:•1 ••• l l'Jlp a, ..... , .... r• 1L.--.■tl,T,l":1 •.--•l.t,.-,,_.,. .•• , .... ..Ill\'•' ~''""'m .11.u•• 1r,n 5/8" 42.28 41.14 43 .00 Singl e Family Residential 3/4" and l " fire 42.28 55.62 58.13 Tier 1: 1-199 Un its 5.36 N/A N/A l" 70.47 84.58 88.39 Tier 2: 200+ Un its 7.65 N/A N/A 11/2" 140.90 156.96 164.03 Tier 1: 1-20 Units N/A 4.59 4.80 2" 225.44 243.82 254.80 Tier 2: 21-56 Units N/A 5.35 5.60 3" 422.72 518.89 542.25 Tier 3: 56+ Un its N/A 7.45 7.79 4" 704.52 924 .2 5 965.85 Multi-family Resid en t ial 5.47 4.69 4.91 6" 1,409.05 1,894.22 1,979.46 Landscape Irrigation 5.47 6.52 6.82 8" 2,254.46 3,486.72 3,643.63 Non -residential 5.47 4.99 5.22 Recycled Water 4.92 4.06 4.25 City Potable Usage 2.36 4.99 5.22 CURRENT AND PROPOSED WASTEWATER RATES l unit = 748 gallons Sing le Family Residential (Resi dential wastewater flow based on Single Family Residential 85 % of lowest winter water use averaged over the past three years.) Ti er 1: 0-5 Units 29.54 N/A N/A Flat 21.34 N/A N/A Tier 2: 6-12 Units 52.12 N/A N/A Non -residential, Multi-family, Mobile Hom e Tier 3: 13-19 Units 78 .45 N/A N/A 5/8" 28.16 N/A N/A Tier 4: 20-26 Units 85.99 N/A N/A 3/4" 28 .16 N/A N/A Tier 5: 27 -37 Units 101.04 N/A N/A l " 38 .23 N/A N/A Tier 6: 38-50 Units 116.09 N/A N/A 11/2" 63.4 4 N/A N/A Tier 7: 51+ Units 127.39 N/A N/A 2" 93 .69 N/A N/A Single Family Residentia l N/A 4.38 4.66 3" 174.35 N/A N/A Multi-family & Mobile Home 4.02 5.50 5.85 4" 265 .07 N/A N/A Non-Residential 6" 617 .97 N/A N/A Genera l Commercial 4.02 4.74 5.04 8" 819.62 N/A N/A Medium-low 4.60 5.31 5.65 Customer Class Medium-low 5.35 5.96 6.34 All Custom er Classes N/A (Except Schools) 26.63 28.31 Medium-high 6.85 6.09 6.48 High 8.15 8.39 8.92 Wastewater Rate Notes: Mtilti-fomily and mobile home customers ' wastewater flow is colculoted Light Industry 4.22 5.16 5.49 based on 75% of bimonthly water use for accounts without o landscape Industrial Special User 4.02 5.20 5.53 meter and 85% of bimonthly water use for accounts with a landscape meter. Non-resident ial customers' wastewater flow is calculated based Government & Membership 4.02 3.89 4.14 on 75%, 85% or 90% of bimonthly water use depending on customer Organizations class. Wastewater flow for schools is estimated based on the average Churches 4.02 4.74 5.04 flow per student per day using 75 % or 85 % of the water use from the March/April billing period. Elementary Schoo l (ADA) 4.02 4.80 5.11 Any water rates or fees associated with water service, including raw wa ter, Secondary & High School (ADA) 4.02 4.76 5.06 not addressed within th is notice shall remai n in full fo rce and effect as prev iously adopted by t he Poway City Council. 2 1 of 96 March 3, 2020, Item #4 PO Box 789 Pow ay, Ca liforni a 92 0 7 4-07 89 www.powa y.o r g DATED MATERIAL -DO NOT DELAY DELIVERY Important information about your WATER and WASTEWATER account! Facts about Poway's Water and Wastewater System Poway imports nearly 100% of its water through the San Diego County Water Authority (SDCWA). The City 's water system includes: , 294 miles of transmiss ion and distribution pipe l ines , 5,044 water valves, 21 pressure reduc ing stations and 14 p ump stations (des igned to raise water to higher elevations) , 19 reservo irs (Lake Poway holds ~one bi llion ga llons of water) , One 24 million gallon/day water treatment plant , 2,435 fi re hyd rants • Approx imately 45,000 tests to ensure Poway water meets or exceeds the State and Federal standards for water quality. Poway contracts with the City of San Diego (Metro) for wastewater treatment and disposal. The City 's wastewater infrastructure t ransports wastewater to various treatment plants within the County of San Diego in a safe and reliable manner. It in cludes: 186 mi les of wastewater p ipes , 5 lift stations (designed to raise wastewat er materia l to a higher elevation) More than 4,000 maintenance covers . The cost to provi de water service in Poway is about $27.7 million per year. Wastewater service costs are approximately $11.3 mi llion per yea r. Over half of the City's water and wastewater expend itures are pass-through costs (raw water, wastewater treatment), which the City cannot control. If you have questions regarding this notice, please call our Finance Department at (858) 668 -4411 . 22 of 96 March 3, 2020, Item #4 CITY OF POWAY Water and Wastewater Cost of Service and Rate Study Report Final Report / December 12 , 2019 ~ RAFTELIS 23 of96 ATTACHMENT E March 3, 2020, Item #4 ~ RAFTELIS December 12, 2019 Aaron Beanan Director of Finance City of Poway 13325 Civic Center Drive Poway, CA 92064 Subj ect: Water and W astewater Cost of Service and Rate Study Dear Mr. Beanan, Ra~elis is pleased to provide this Water and Wastewater Cost of Service and Rate Study Report (Report) for the City of Poway (City). The overall goal of the study was to develop updated water and wastewater rates for the City for the next five fiscal years (FY E 2020-FYE 2024) that are fair and equitable and in compliance with Proposition 2 I 8 requirements. The major objectives of the study include the following: I Develop five-year financial plans for the water and wastewater enterprises through FYE 2024 that sufficiently funds the City's operating costs, debt obligations, prudent reserves, and necessary capital expenditures Review and revise as necessary the current water and wastewater rate structure Perform a cost of service analysis to e quitably allocate costs across customers classes Propose equitable water rates for FYE 2020 to FYE 2024 This Report summari zes the key fmdings and recommendations related to the development of the financial plans and proposed water and wastewater rates. It has been a pleasure working with you and we thank you , Ms. Jessica Parks, and other City staff for the support provided during this study. Sincerely, Sudbir Pardiwala Executive Vice President www .rafte11, ,0111 24of96 Lauren Demine Consultant March 3, 2020, Item #4 Table of Contents 1. EXECUTIVE SUMMARY ............................................................ 1 1.1 . SYSTEM OVERVIEW ............................................................................. 1 1.2 . METHODOLOGY .................................................................................................................. 1 1.2.1 . Water Utility ................................................................................................................ 1 1.2.2. Wastewater Utility ...................................................................................................... 2 1 .3. PROPOSED FINANCIAL PLANS ........................................................... 2 1.3.1. Water Util ity Financi al P l an ....................................................................................... 2 1.3.2. Wastewater Utility Financial Plan ............................................................................. 5 1.4. PROPOSED RATES ............................................................................... 7 1 .4.1. Proposed Water Rates ............................................................................................... 7 1.4.2. Proposed wasteWater Rates ..................................................................................... 8 2 . STUDY BACKGROUND ............................................................ 9 2.1 . SYSTEM OVERVIEW ............................................................................. 9 2.2. LEGAL FRAMEWORK ........................................................................... 9 2.3. RATE-SETTING METHODOLOGY ....................................................... 10 3. KEY ASSUMPTIONS ................................................................... 12 4 . WATER RATE STUDY ............................................................. 14 4.1. WATER UTILITY FINANCIAL PLAN .................................................... 14 4 .1.1. Existing Rate Structure and Rates .......................................................................... 14 4 .1 .2. Account and Usage Projections ............................................................................. 15 4 .1 .3. Revenues .................................................................................................................. 16 4 .1.4. O&M Expenses ......................................................................................................... 17 4 .1 .5. Capi tal Improvement Plan ....................................................................................... 18 4.1.6. Recommended Reserve Policies ............................................................................ 18 4.1 . 7. Status Quo Financial Plan ....................................................................................... 19 4.1.8. Proposed Financial Plan .......................................................................................... 21 4 .2 . COST OF SERVICE ANALYSIS ........................................................... 24 I F 25 of96 March 3, 2020, Item #4 4.2.1. 4 .2.2. 4.2.3. 4.2.4. 4 .2.5. 4.2.6. 4 .2.7. 4.2.8 . 4.3. 4 .3.1 . 4.3.2. 4 .3.3. 4.3.4. 4 .4. 5. 5.1 . 5.1.1. 5.1 .2. 5.1 .3. 5.1.4. 5.1.5. 5.1.6. 5.1.7. 5.1.8. 5.2. 5.2.1 . 5.2.2. 5.2.3. 5.2.4 . 5.2.5. 5.2.6. Co st o f Service M ethodology .................................................................................. 24 Reve nue Re quirem ent. ............................................................................................. 24 Func tionali zati o n a nd Allocati o n o f Ex pe nses ...................................................... 2 5 Peaking Factors ........................................................................................................ 26 Alloc ation of Costs ................................................................................................... 2 7 Units of Service ........................................................................................................ 33 Allocation of Revenue Requirements to Cost Causation Components ............... 34 Distribution of Cost Causati on Components ......................................................... 36 WAT ER RATE DEVELO PMEN T ........................................................... 37 Derivation of Proposed Bimonthly Fi x ed Charge .................................................. 37 Revisions to Tier Definitions ................................................................................... 38 Deri v ation of Pro posed Commodity Rates ............................................................. 38 Proposed Water Rate Sc hedule .............................................................................. 40 BILL IMPACTS ..................................................................................... 40 WASTEWATER RAT E STUDY ................................................ 4 2 WASTEWATER UTI LITY FINANC IA L PLAN ....................................... 42 Existing Rate Structure and Rates .......................................................................... 42 A ccount and Usage Projections ............................................................................. 43 Revenues .................................................................................................................. 44 O&M Ex penses ......................................................................................................... 45 Capital Improve ment Plan ....................................................................................... 45 Re commended Res e rve Polic i es ............................................................................ 46 Status Quo Financ ial Plan ....................................................................................... 47 Proposed Financial Plan .......................................................................................... 48 W A STEWATER C OST OF SERVIC E A NAL YSIS ................................ 52 Cost of Service Methodology .................................................................................. 52 Revenue Requirement. ............................................................................................. 52 Mass Balance ............................................................................................................ 53 Functionalization and Alloc ation of Expenses ...................................................... 54 Allocation of Costs ................................................................................................... 55 Units of Service ........................................................................................................ 57 ' r W w f VI AN II 26 of96 March 3, 2020, Item #4 5.2.7 . Allo cation of Revenue Re quirem e nts to Cost Causatio n Co mponents ............... 57 5.2.8 . Distributio n o f Cos t Ca usatio n Compo ne nts ......................................................... 59 5.3 . WASTEWATER RATE DEVELOPMENT .............................................. 60 5.3.1. Derivation of P roposed Bimonthly Fixed Charge .................................................. 60 5.3.2 . Revisions to Commodity Rates ............................................................................... 60 5.3.3. Derivation of Proposed Commodity Rates ............................................................. 61 5.3.4. Proposed Wastewater Rate Sc hedule .................................................................... 62 5.4. BILL IMPACTS ..................................................................................... 6 3 w 'Iv T W f N Ii I 27 of96 March 3, 2020, Item #4 List of Tables Table 1 -1: FYE 2020 -2024 Proposed Water Bimo nthly Meter Servic e Charges ..................................... 7 Tab le 1-2: FYE 2020-2024 Proposed Water Commodity Rates ($/cc f) 1 ........................................................ 8 Tabl e 1-3: FYE 2020-2024 Proposed Wastewater Charges .......................................................................... 8 Table 3 -1: Water Key Infl ati onary Facto rs .................................................................... , ................................ 12 Tab le 3-2: Water Key Revenue Assu mp tions ................................................................................................ 12 Table 3-3 : W ast ewat er Key Inflationary Factors ........................................................................................... 13 Ta ble 3-4: Wast ewat er Key Reve nue Ass u mptions .......................................................................... , .......... 13 Ta b le 4-1 . f:x isting Bimonthly Wat er Met er Service Charges ...................................................................... 14 Ta ble 4-2: Existing B imonthly Water Co mmodity Rates ($/ccf) ................................................................. 14 Ta ble 4-3: Pota ble and Recycled Water Meters 1 ........................................................................................... 15 Ta b l e 4 -4: Potable and Recycled W ate 1 Use by Class (ccf) ......................................................................... 1 6 T able 4-5: Pro j ected Op erati ng Reven u es Und er Existin g Wat er Ra t es .................................................... 1 7 T abl e 4 -6 : Water Projected Oth er Revenues .......... , ...................................................................................... 17 Tabl e 4 -7 : Water Revenue S urn mary .............................................................................................................. 17 Table 4-8: Wate r O p eratin g Expenditures Su m mary .................................................................................... 1 8 Ta ble 4-9 : Water Ca p it al ltnpro vem en t Pla n .................................................................................................. 1 8 Tab l e 4 -10 Water Pr oposed Reserve Targets ............................................................................................. 19 Tab le 4 ·11 . W ater F inancial Plan under Cu r ren t Rat es ............................................................................... 20 Ta ble 4-12· W at er Proj ected Fu nd B alances Under Cu rren t Ra t es ............................................................. 20 Tabl e 4 -1 3 : W ater Prop o sed Revenue Adjustm en ts ..................................................................................... 21 Table 4-14: W at er Proposed Finan c ial Plan .................................................................................................. 21 Table 4-15: Wat er Proj ected Fund B alan ces Under Proposed Rat es ......................................................... 22 Table 4-16: Water Revenu e Req u irern ent ......................... , ............................................................................ 25 Ta ble 4-1 7 : Syst em Pea kin g Factors .............................................................................................................. 26 Table 4 -1 8 : C u stomer Cl ass Peaking Fact o rs ............................................................................................... 27 Ta ble 4-19: Fun c t ionalized O&M Cos t Distri but ions to Cost Causation Factors ...................................... 28 Table 4-20: Wat er O&M Cost Allocatio ns ............... .. ............................................................................. 29 Ta bl e 4-21: Fu n c t ionalized Ca pital Cost Distribut ion s to Cost Ca u sation Fact o rs .................................. 30 Tab l e 4-22 : Wat e r Ca pital Cost A llocati o n s ................................................................................................... 31 Table 4 -23 : Wat er Cost A llocatio n Distrib uti on Summar y ........................................................................... 32 T able 4 -24: Potabl e Water Equivale nt M et ers1 .............................................................................................. 33 Ta bl e 4-25: Recycled Wat er Equ ivalen t M eters ............................................................................................. 33 Ta ble 4-26: Deriva tion of Cost Causation Comp o n ent Units of Service .................................................... 34 Ta ble 4-2 7 : Wat e r Un it Cost Ca lculation ........................................................................................................ 35 Table 4-28 : A llocat ion of Costs t o Cu s tomer C lasses ............................................................................... 36 Table 4-29 Derivatio n of t he Bimo nthly F ixed Cha rges .............................................................................. 37 T a bl e 4-30: Rev ised S i ngle-Fa m ily Reside ntia l Tier Definitions ................................................................. 38 Table 4-31 : Peak mg Un it Cost by Class and Tier .......................................................................................... 38 Ta ble 4-32 : Recycled Wat er Commodity Rat e Ca l culation .......................................................................... 39 Ta ble 4-33 : Deriva t ion of t he Commodity Rates ($/ccf) ............................................................................... 39 Tabl e 4-34: FYE 2020-2024 Prop osed W ater Bim ont h ly Meter Service Ch arges ...................................... 40 Table 4-35 : FYE 2020 -2024 Prop osed W ater Comm odity Rat es .......................................... , ...................... 40 Ta ble 5-1 : Ex ist i n g B i mo nthly Wa st ewat er Service Ch arges ...................................................................... 42 Ta ble 5-2: E xi sti n g B imon thly Commodity Ra t es ($/ccf wastewat e r) ...................................................... 43 Tabl e 5-3: Wastewat er Accounts ....... ...... ................. ... ........... .... . ....................................................... 43 Ta ble 5-4 : A ccount s per Tier and Billed Wast ewater Flow b y C lass (ccf) .............................................. 44 Ta ble 5-5 : Pr oj ected Op er ating Revenues Under Existin g Wastewater Rat es .......................................... 4 4 WA p I\ r QA I v 28of96 March 3, 2020, Item #4 T able 5-6: ProJected Other Wastewater Rev enu es ............................................................................... 45 Table 5-7: Waste water Revenue Su,nmary ........................................................................................... 45 Table 5-8: Wastewater Operating Expenditures Summary ........................................................................ 45 Table 5-9: Wastewater Cap ital lmpro vernent Plan ...................................................................................... 46 Table 5-10 . Wastewater Proposed Reserve Targets ................................................................................. 47 Table 5-11 : Wastewater Financial Plan under Current Rates ...................................................................... 47 Table 5-12: Wastewater ProJected Fund Balances Under Current Rates ................................................. 4 8 Table 5-13: Wastewater Proposed Revenue Adjustments ........................................................................... 48 Table 5-14: Wastewater Proposed Financial Plan ........................................................................................ 49 Table 5-15: Wastewater Projected Fund Balances Under Proposed Rates ............................................... 4 9 Table 5-16: Wastewater Revenue Requirement .............................................................................. -............ 5 3 Table 5-17: Mass Balance Analysis ................................................................................................................ 54 Tabl e 5-18: Wast ewater O&M Cost A llocations ............................................................................................ 55 Tab le 5-19. Wastewater Capital Cost Allocations ......................................................................................... 56 Table 5•20 : Wastewater Cost Allocation Distribution Summary ................................................................. 56 Table 5-21 : Wastewater Customer Class Data .............................................................................................. 57 Table 5-22 : Wastewater Unit Cost Ca lculation .............................................................................................. 58 Table 5-23 . Alloc ation of Costs to Customer Classes ................................................................................. 59 Table 5-24: Derivation of the Wastewater Bimonthly Fixed C h arg e ........................................................... 60 Tab le 5-25 : Derivation of the Wastewater Commodity Rates ($/ccf) .......................................................... 61 Table 5-26 : FYE 2020 -2024 Proposed Bimonthly Wa stewater Charges ..................................................... 62 List of F igures Figure 1-1: Water Revenue Adjustments and Debt Coverage ............................................ , .......................... 3 F igure 1-2 : Water Operating Financial Plan at Proposed Rates ................................................................... 3 Figure 1-3: Proposed Water Capital Improvement Plan and Funding Sources ......................................... 4 Figure 1-4 : Water Projected Ending Balances at Proposed Rates ............................................................... 4 Figure 1-5: Wastewater Revenue Adjustments and Debt Coverage ............................................................. 5 Figure 1-6: Wastewater Operating Financial Plan .......................................................................................... 6 Figure 1-7: Wastewater Capital Replacement Plan and Funding Sourc es ................................................. 6 F igure 1-8: Wastewater ProJec ted Ending Balances ................................................................................. 7 Figure 4-1 : Water Operating Financial Plan at Proposed Rates ................................................................. 22 Figure 4-2 : Proposed Water Capital Improvement Plan and Fundmg So urce .......................................... 2 3 Figure 4 -3: Water Projected Ending Ba lances at Pr oposed Rates ............................................................. 23 Figure 4°4 . Single-Fami ly Residential Water Bill Impact Analysis .............................................................. 41 Figure 4-5: Non-Resident ial Water Bill Impact Analysis .............................................................................. 41 Fi gure 5-1 · Was tewater Operating Fi nancial Plan at Proposed Rates ....................................................... 50 Figure 5-2: Proposed Wa s tewater Capital Improvement Plan and F unding Source ................................ 50 Figure 5-3: Projec ted Ending Wastewater Reserv es at Projected Rates ................................................... 51 Figure 5-4: Single-Famil y Residential Wastewater Bill Impact Analysis ................................................... 63 F igure 5-5 : Non-Residential Wastewater Bill Impac t Analysis .................................................................... 63 A ' J;o V 29 of96 March 3, 2020, Item #4 This page intentionally left blank to facilitate two-siclecl printing. CITY OF PO\f\JA Y WATER AND WASTEWATER COST OF SERVICE AND RATE STUDY REPORT vi 30 of96 March 3, 2020, Item #4 1. Executive Summary 1.1. Systen1 Over,iew The City of Poway provides potable water, recycled water, and sewer service to a population of over 50,200. The majority of water customers receive sewer service and recycled water is provided to approximately 200 customers primarily located in the South P o way Business Park. The City currently imports all of its potable water as raw water from the San Diego County Water Authority (SDCWA) and treats the water in its own treatment p lant. The City also provides wastewater collection service and transports the wastewater to the San Diego Metropolitan Wastewater System (METRO) for treatment and disposal. Recycled water is purchased from the City of San Diego. The City cu1Tently charges potable water customers a fixed bimonthly meter charge and a volumetric rate base d on customer class. Single-family residential customers pay based on a two-tier rate structure based on units of consumption. All other customers pay a uni form volumetric rate. Recycled water customers pay based on the same rate structure, with the volumetric rates set at 90 percent of the potable water rates. Single-family residential sewer customers pay a uniform bimonthly fixed service charge and a seven-tiered volumetric charge based on the customer's winter water usage. All other customers pay a fixed bimonthly service charge based on meter s ize and a uniform flow charge. The City engaged Raftelis in 2019 to conduct a comprehensive cost of service water and wastewater rate study to establish proposed water and wastewater rates for fiscal years ending (FYE) 2020 to FYE 2024. The primary project objectives of the study include: I Develop five -year financial plans for the water and wastewater enterprises through FYE 2024 that generate sufficient revenues to fund the City's operating costs, debt obligations, prudent reserves, and necessary capital expenditures Review and revise as necessary the current water and wastewater rate structure Perform a cost of service analysis to equitably allocate costs across c ustomers classes in compliance with Proposition 2 I 8 Propose equitable water and wastewater rates for FYE 2020 to FYE 2024 A FYE is deftned as beginning on July I and ending on June 30: for example. FYE 2020 begins July 1, 20 18 and ends June 30. 2020. 1.2. Method ology 1.2.1 .WATER UTILITY The water rates presented in this report were developed using cost of service principles set forth by the American Water Works Association Ml Manual titled Principles of Water Rates, Fees and Charges (A WW A M I Manual). Cost of service principles endeavor to distri bute costs to customer classes in accordance with the way each class uses the water system. This methodology is described in detail in Sections 4.2 and 5.2. The Base-Extra Capacity Method of the A WW A MI Manual was used to distribute costs to customer classes and tiers . This method separates costs into four main components: (I) base costs, (2) extra capacity costs, (3) customer costs, and (4) fire protection costs. Base costs are costs associated with meeting average daily demand needs and include operations and maintenance costs and capital costs designed to meet average load conditions. Extra capacity costs are costs (both operating and capital coses) associated with mee ting peak demand . C u stomer costs are associated with serving customers, such as 3 1 of96 March 3, 2020, Item #4 meter reading, billing and c ustome r service, etc. Fire protection c osts are related solely to the fire protection function of a water syste m, such as fire hydrants , private fire connections, and related mains and valves. 1 .2 .2 . WASTEWATER UTI LITY The wastewa ter rates presented in this report were developed using cost of service principles set forth in th e Water Environment Federation (WEF) Manual of Practice No. 27, Financing and Charges.for Wastewater Systems, 2018. To calculate fair and equitable rates so that users pay in proportion to the cost of providing service, Raftelis allocated the total revenue requirements to wastewater flow, chemical oxygen demand (COD), and total suspended solids (TSS) consistent with the previously identified WEF/industry guidelines. Since wastewater flow or vol umes are not directly measured for each customer, wastewater flows and loadings (flow , COD, and TSS) are estimated for each customer class through a plant balance analysis, which is used to estimate and validate the wastewater loadings (flow, COD, and TSS) generated by each customer class. 1.3. Proposed Financial Plans 1 .3 .1.WATER UTILITY FINANCIAL PLAN To determine the revenue require ments needed to fund the City's ongoing expenses , Raftelis projected the O&M costs, capital improvement costs , and rese1ve requirements for the study period between FYE 2020 to FYE 2024. O&M expenses include salaries and benefits, materials, services , supplies, utilities , water purchases, and general administrative costs. The City plans to spend approximately $12.4M on capital expenditures from FYE 2020 to FYE 2024. Reserve targets are provided for prudent fiscal management and described in detail in Sections 4 .1.6 and 5 .1.6 for water and wastewater, respectively. The minimum operating reserve is 90 days of operating expenses and the target is 120 days o f operating expenses. The capital reserve target is five-year average capital expense. Figure 1-1 through Figure 1-4 display the Water Utility Financial Plan in graphical format. Figure 1-1 shows the proposed revenue adjustments (dark blue bars) of 4 .5% and 5.25% for the next five years on the left axis. The rate models are based on each revenue adjustment going into effect in March of the correspo nding fiscal year; however, the City will implement the first increase in March of 2020 and subsequent increases in January of each fiscal year. Although the graph shows anticipated revenue adjustments for the entire study period, the City will review and confirm the necessary revenue adjustments each year. The right axis of the graph shows the calculated and required coverage ratios for the City. Over the five-year planning period , the City does not anticipate issuing any debt for the water u tility. 2 32 of96 March 3, 2020, Item #4 6% "' ~ 4% E 1n :, f 3% 0) :, C: ~ 2% ~ 1% 0% Figure 1-1: Water Revenue Adjustments and Debt Coverage Revenue Adjustments 140% l70% 100', 8tfic b0% ·10% 20% FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 -Revenue Acfjustmenl~ - -Debt Coverage -Required Coveraee • Coverage Ale,t ., 01) !': 0) > 0 u .0 OJ Cl Figure 1-2 graphically illustrates the water frnancial plan, comparing existing and proposed revenues (solid and dashed black lines, respectively) with projected expenses (bars). The expenses are represented by stacked bars to indicate each expense type's share of total expenses. The net cash flow is shown in yellow. 3 v, $40 C: § $35 2 33 of 96 $30 S2S $20 $15 $10 ss so -ss Figure 1-2: Water Operating Financia l Pl an at Proposed Rates Operating Fin ancial Pl a n ------- FYE 2020 FYE 2021 FYE 2022 -Operating Expenses Net Cashfl ow -Water Pu rc h ases -Current Revenu e ------ FYE 2023 FYE 2024 Rate Funded Capita l -Proposed Revenue March 3, 2020, Item #4 Figure 1-3 shows the total amount of the water capital projects are funded by rates/reserves as shown by the dark blue bars . The total esti mated water CIP for the study pe riod of FYE 2020 to FYE 2024 is $12.4M . Figure 1-3: Proposed Water Capital Imp roveme nt P la n and Funding Sources Capital Funding Sources .,, 53.5 C $3.22 -~ S2.91 i $3,0 $2.81 $2.5 S2.07 $2.0 $1.44 $1.5 $LO $0.5 $0 .0 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Deb t Funded ■ Rates/Reserves Fun ded &Total CIP Figure 1-4 shows t he C ity's water operating and capital reserve ending balances for each fiscal year after operating and capital costs are funded. As s hown , the City will draw down its reserves in FYE 2020 and FYE 2023 to cover capital costs but wilJ meet its minimum reserve targets beginning in FYE 2021 (indicated by the dashed blue line). ,, $20 C J1 $18 ~ 34of 96 $16 $14 $12 $10 $8 $6 $4 $2 $0 Figure 1-4: Water Projected Ending Balances at Proposed Rates O perating & Capital Re serves ---- FYE 2020 FYE 2021 FYE 20 22 FYE 2023 FYE 2024 -Total Reserves -M1n1mum Reserve -Target Reserve R 4 March 3, 2020, Item #4 1.3.2. WASTEWATER UTILITY FINANCIAL PLAN To determine th e reve nu e require me nts need e d to fund the City's ongoing expenses, Raftelis projected the O&M costs, capital improveme nt costs, and re serve requirements for the study period between FYE 2020 to FYE 2024. O&M expenses include salaries and benefits, materials, services, supplies, utilities, wastewater treatm e nt, and general administrative costs. The City plans to spend approximately $5. lM o n capital expenditures from FYE 2020 to FYE 2024. Figure 1-5 through F igure 1-8 d isplay the Wastewater Utility Financial P lan in graphical fo rmat Figure 1-5 shows the proposed reven ue adjustments (dark blue bars) o f 6.3% each year for the next five years on the left axis. T he rate mo dels are based o n each revenue adjustment going into e ffect in March of the corresponding fiscal year; howeve r, the City will impleme nt the first increase in M arch of 2020 a nd subsequent increases in January of each fiscal year. Although the graph s hows anticipated revenue adjustments for the e ntire study period, the City w ill review and confirm the necessary revenue adjustments each year. Th e right axis of the graph shows the calculated and required coverage ratios for the City. Over the five-year plann ing perio d , the City d oes not anticipate issuing any debt for the wastewate r utility. 7% 6% ~ 5% C: .. E 1s 4% i, <( ~ 3% C ~ .. cc 2% 1% 0% Figure 1 -5 . Wastewater Revenue Adjustments and Debt Coverage Revenue Adjustments 140% 1 20% 1001.110 81}: I>\)' 4r,: lU 0% FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 -Revenue Adjustments - -Debt Coverage -Required Coverage • Coverage Ale rt ~ ~ ., > 0 u ..0 ., a F igure 1-6 graphically illustrates the wastewater financial plan, comparing existing and proposed revenues (solid and dashed gray lines, respectively) with projected e xpe nses (bars). T he e xpenses are represented by stacked bars to indicate each expense type 's share of total expenses. T he net cash flow is sho wn in yellow. 5 w 35 of96 March 3, 2020, Item #4 "' $14 C ~ $12 ~ $10 $8 S6 $2 $0 $2 ·S4 Figure 1-6 : Wastewater Operating Financial Plan Operat ing Financial Plan FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 -Operating Expenses -Rate Funded Capital -Debt Service Net Cashflow Current Revenue Proposed Revenue Figure 1-7 shows the total cost of the wastewater capital projects and their funding sources. The total estimated water CIP for the study period ofFYE 2020 to FYE 2024 is $SM. As shown by the dark blue bars , the City plans to fund its capital projects through rates. Figure 1-7: Wastewater Capital Replacement Plan and Funding Sources Capital Fund ing Sources "' $1.8 C: Sl.70 0 ~ $1 .6 2 $1 .4 $1.29 $1.2 $1.00 S10 $0.8 S0.61 $0 .6 $0.45 $0.4 $0.2 $0.0 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Debt fonded ■ Rates/Reserves Funded e Totaf CIP N WA T I/AT P 6 36 of96 March 3, 2020, Item #4 Figure 1-8 shows the City's wastewate r operating and capital reserve ending balances for each fiscal year after operating and capital costs are funde d. As shown, the City will draw down its reserves through the study pe riod to cover operating and capital costs but will s till e xcee d its reserve targets as indicate d by the solid green lin e. The targets are defined the same as for the water utility . .,, $14 C _Q ~ $12 $10 $8 S6 $4 $2 so Figure 1-8: Wastewater Projected Ending Balances Operating & Cap ita l Reserves FYE 2020 FYE 2021 FYE 2022 FYE 2023 -Total Reserves - -Minimum Reserve -Target Reserve 1.4. Proposed Rates 1 .4 .1 . PROPOSED WATER RATES FYE 2024 The proposed cost of service potable and non-potable rates effective, March l , 2020 are shown be low . The rates for subsequent years are increased by the revenue adjustments in Figure 1-1 to arrive at the 5-year rate schedules shown in Table 1-1 a nd Table 1-2 . Table 1-1: FYE 2020-2024 Proposed Water B imonthly Meter Serv ice Charges Meter Size Current March March March March March Charge 2020 2021 2022 2023 2024 5/8" $42.28 $41.14 $43.00 $45.26 $47.64 $50.15 3/4" $42.28 $55.62 $58.13 $61.19 $64.41 $67.80 1" $70.47 $84.58 $88.39 $93 .04 $97.93 $103.08 11/2" $140.90 $156.96 $164.03 $172.65 $181.72 $191.27 2" $225.44 $243.82 $254.80 $268.18 $282.26 $297.08 3" $422.72 $518.89 $542.25 $570.72 $600.69 $632.23 4" $704.52 $924.25 $965.85 $1,016.56 $1,069.93 $1,126.11 6" $1,409.05 $1,894.22 $1,979.46 $2,083.39 $2,192.77 $2,307.90 8" $2,254 .46 $3,486.72 $3,643.63 $3,834.93 $4,036.27 $4,248.18 T IT 37 of96 March 3, 2020, Item #4 T a ble 1.2• FYE 20 20-20 24 P roposed W ate r Commodity R ates ($/ccf) 1 Customer Class Bimonthly Current March March M a rch M arch March Tiers (ccf) Rate 2020 2021 2022 2023 2024 Single Family Residential Tier 1 20 $5.36 $4.59 $4.80 $5.06 $5.33 $5.61 Tier 2 56 $5.36 $5.35 $5.60 $5.90 $6 .21 $6.54 Tier 3 56+ $5 .36 $7.45 $7.79 $8.20 $8.64 $9.10 Multi-Family Residential $5.47 $4.69 $4.91 $5.17 $5.45 $5.74 Landscape Irrigation $5.47 $6.52 $6.82 $7.18 $7.56 $7.96 Non-Residential $5.47 $4.99 $5.22 $5.50 $5.79 $6.10 City Potable Usage $2.36 $4.99 $5.22 $5.50 $5.79 $6.10 Recycled Water $4.92 $4.06 $4.25 $4.48 $4.72 $4.97 1 The current rate structure is two-tiered with the first tier at 199 ccf bimonthly. The current rate for Tier 2 is $7. 65 I cc/ 1.4.2. PROPOSED WASTEWATER RATES T he proposed cost of service wastewater rates effective March I , 2020 are shown below. Rates for s ubseque nt years are increased by the revenue adjustments in Figure 1-5 to arrive at the 5-year rate sc hedules s hown in Table 1-3. Table 1 -3: FYE 2020 2024 Proposed Wastewater Charges Customer aass Current Charge March 2020 March 2021 March 2022 March 2023 March 2024 Bi -Monthly Fixed Charge Al l Customer Classes Varies by Meter Size $26.63 $28.31 $30.10 $32.00 $34.02 Commodity Rate pe r ccf of W astewater Re sidential Single Fa m i ly Res idence $5.79 $4.38 $4.66 $4.96 $5.28 $5.62 Multi-Family & Mobile home $4.02 $5.50 $5.85 $6.22 $6.62 $7.04 Non-Re sidential Gene ral Commercial $4.02 $4.74 $5.04 $5.36 $5.70 $6.06 Medium-Low $460 $5.31 $5.65 $6.01 $6.39 $6.80 Medium $5.35 $5.96 $6.34 $6.74 $7.17 $7.63 M edium-High $6.85 $6.09 $6.48 $6.89 $7.33 $7.80 High $8.15 $8.39 $8.92 $9.49 $10.09 $10.73 Light Industry $4.22 $5.16 $5.49 $5.84 $6.21 $6.61 Indust rial Specia l Us er $4.02 $5.20 $5.53 $5.88 $6.26 $6.66 Government & Membership Organ i zations $4.02 $3.89 $4.14 $4.41 $4.69 $4.99 Churches $4.02 $4.74 $5.04 $5.36 $5.70 $6.06 Elementary School (ADA) $4.02 $4.80 $5.11 $5.44 $5 .79 $6 .16 Secondary & High School (ADA) $4.02 $4.76 $5.06 $5.38 $5 .72 $6.09 ,NA f'A u 38 of96 March 3, 2020, Item #4 2. Study Background 2 .1. Systen1 Overview The City of Poway provides potable water, recycled water, and sewer service to a population of over 50,200. The majority of water customers receive sewer service and recycled water is provided to approximately 200 customers primarily located i.n the South Poway Business Park. The C ity currently imports all of its potable water as raw water from the San Diego County Water Authority (SDCWA) and treats the water in its own treatment plant. The City also provides wastewater collection service and transports the wastewater to the San Diego Metropoli tan Wastewater System (METRO) for treatment and disposal. Recycled water is purchased from the City of San Diego. The C ity currently charges potable water custom ers a fixed bimonthly meter charge and a volu metric rate based on customer class. Single-family residential customers pay based on a two-tier rate structure based on units of consumption. All o ther customers pay a uniform volu metric rate. Recycled water customers pay based on the same rate structure, with the volumetric rates set at 90 percent of the potable water rates. Single-family residential sewer customers pay a uniform bimonthly ftxed service charge and a seven-tiered volumetric charge based on the customer's winter water usage . All other customers pay a fixed bimonthly service charge based on meter size and a uniform flow c harge. T he City engaged Raftelis in 2019 to conduct a comprehensive cost of service water and wastewater rate study to propose water and wastewater rates for FYE 2020 to FYE 2024. The primary project objectives of the study include: I Develop five-yea r financial plans for the water and wastewater enterprises through FYE 2024 that generates sufficient revenues to fund the City's operating costs, debt obligations, prudent reserves, and necessary capital expenditures Review and revise as necessary the current water and wastewater rate structure Perform a cost of service analysis to equitably allocate costs across customers classes in compliance with Proposition 218 Propose equitable water rates for FYE 2020 to FYE 2024 2 .2. Legal Frame,vork California C onstitution -Article X ill D, Section 6 (Proposition 218) Proposition 218, reflected in the California Constitution as Article XIII D , was enacted in 1996 to ensure that rates and fees are reasonable and proportional to the cost of providing service. The principal requirements , as they relate to public water service are as follows: !J A property-related charge (such as water rates) imposed by a public agency on a parcel shall not exceed the costs required to provide the property related service. 39 of96 March 3, 2020, Item #4 Revenues derived by the charge shall not be used for any purpose other than that for which the charge was imposed. The amount of the charge imposed upon any parcel shall not exceed the proportional cost of service attributable to the parcel. -4 No charge may be imposed for a service unless that service is actually used or immediately available to the owner of property. ~ A written notice of the proposed charge shall be mai led to the record owner of each parcel at least 45 days prior to the public hearing, when the agency considers all written protests against the charge . As stated in the American Water Works Association's (A WW A) Principles of Water Rates, Fees, and Charges: Manual of Water Supply Practices MI Sixth Edition (Ml Manual), "water rates and charges should be recovered from classes of customers in proportion to the cost of serving those customers." Raftelis foUows industry standard rate setting methodologies set forth by the A WW A Ml Manual to ensure this study meets Proposition 218 requirements and establishes rates that do not exceed the proportionate cost of providing water services. The methodology in the M 1 Manual is a nationally recogni zed industry ratemaking standard which courts have recognized as consistent with Proposition 218. California Cons titution Article X, Section 2 California Constitution Article X, Section 2 mandates that water resources be put to beneficial use a nd that the waste or unreasonable use of water be prevented through conservation. Section 106 of the Water Code declares that the highest priority use of water is for domestic purposes, w ith irrigation secondary. Thus, management of water resources is part of the property-related service provided by public water suppliers to ensu re the resource is available over t ime. The City currently has inclining tiered (also known as inclining block) water rates to incentivize customers to conserve water. The inclining tier rates must be based on the proportionate costs incurred to provide water to customers to achieve compliance with Proposition 218. "Inclining" tier rate structures (wh ich are synonymous with "increasing" tier rate structures and "tiered" rates), when properly designed, allow a water utility to send conservation price signals to customers. D ue to heightened interest in water conservation and efficiency of water use, tiered water rates have gained widespread use , especially in relatively water-scarce regions like Southern California. Tiered rates meet the requirements of P roposition 218 as long as they reasonably reflect t he proportionate cost of providing service for each tier. 2 .3. Rate-Setting Methodology This rate study was conducted using industry-standard principles outlined by the A WW AM 1 Manual and the WEF Manual of Practice No. 27. The process and approach Raftelis utilized in the study to determine water and wastewater rates is informed by the City's policy objectives, the current water and wastewater system and rates, and the legal requirements in California (namely, Proposition 218). The resulting financial plans, cost of service analysis, and rate design process take all factors into consideration and follow five key steps, outlined below, to determine proposed rates that fulfill the City's objectives, meet industry standards, and comply with relevant regulations. Financial Plan : The first study step is to develop multi-year financial plans that projects the water and wastewater utilities revenues, expenses, capital project financing, annual debt service , and reserve funding. The financial plans are used to determine the revenue adjustment , which aUows the utility to recover adequate revenues to fund expenses and reserves. Revenue Requirement D e tennination: After completing the financia l plan, the rate-making process begins with the determination of the revenue requirement for the test year, also known as the rate-setting year. WA 1D 40 of96 March 3, 2020, Item #4 11 The test year for this study is FYE 2020. The revenue requirement should sufficiently fund the utilities operations and maintenance (O&M) costs, annual debt service, capital improvement plan (CIP) costs, and reserve funding as projected based on the utilities FYE 2020 budget. 1 Cost of Service Analysis: The annual cost of providing water or wastewater service, or the revenue requirement, is then distributed to customer classes commensurate with their use of and burden on the water or wastewater system. A cost of service analysis involves the following steps: a. Functionalize costs -the different components of the revenue requirement are categorized into functions such as supply, transmission and distribution (T&D), collection , treatment, customer service and billing, etc. b. Allocate to cost causation components -the functionalized costs are then allocated to cost causation components such as supply, base delivery, peaking, etc. for water and flow and strength characterized by chemical oxygen demand and total suspended solids for wastewater. c. Develop unit costs -unit costs for each cost causation component are determined using units of service, such as total usage, peaking units, equivalent meters, number of customers, total wastewater loadings, etc. for each component. d. Distribute cost components -the cost components are allocated to each customer class and tier using the unit costs in proportion to their demand and burden on the system. -J. Rate Design: After allocating the revenue requirement to each customer class, the rate design and calculation process can begin. Rates do more than simply recover costs; within the legal framework and industry standards, properly designed rates should support and optimize the City's policy objectives. Rates also act as a public information tool in communicating these policy objectives to customers. This process also includes a rate impact analysis and sample customer bill impacts. :) Administrative Record Preparation and Rate Adoption: The final step in a rate study is to develop the administrative record or report in conjunction with the rate adoption process. The administrative record documents the study results and presents the methodologies, rationale, justifications, and calculations used to determine the proposed rates. A thorough and methodological administrative record serves two important functions: maintaining defensibility in a stringent legal environment and communicating the rate adoption process to customers and important stakeholders. 41 of 96 March 3, 2020, Item #4 3. Key Assumptions The Study uses the City's FYE 2020 budget as the base year and the model projects the City's revenue requirements through FYE 2030 ; however, the proposed water and wastewater rates herein are for FYE 2020 through FYE 2024 . The City will continue to periodically review rates and take a measured approach with any potential rate adj ustments. Certain cost escalation assumptions and inputs were incorporated into the Study to adequately model expected future costs of the City expenses. These assumptions were based on discussions with and/ or direction from City staff and are presented in Table 3-1 through Table 3-4. Most of the inflationary factors are self-explanatory, the demand factor for potable and recycled water represent the change in water consumption per account. The assumption is that there is no change in the consumption per account and the only change in use will result from any growth in accounts. Table 3-1 · Water Key Inflationary Factors Inflationary Factors FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Gener al 3.0% 3.0% 3.0% 3.0% 3.0% Sala r y 5.0% 5.0% 3.0% 3.0% 3.0% Benefits 10.0% 10.0% 10.0% 10.0% 10.0% General Utilities 3.0% 3.0% 3.0% 3.0% 3.0% Power 5.0% 5.0% 5.0% 5 .0% 5.0% SDCWA Water Pu r chases 0.0% 6.0% 6.0% 6 .0% 6.0% Recyc led Water Purchases 6.0% 6.0% 6.0% 6.0% 6.0% Capital 5.0% 5.0% 5.0% 3.2% 3.2% Table 3-2 Water Key Revenue Assumptions FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Account Growth Single Fam ily Residential 0 .0% 0.5% 0.5% 0 .5% 0.5% Multi-Family Residential 0.0% 0.0% 0.0% 0.0% 0.0% Landscape Irr igation 0.0% 0.0% 0.0% 0.0% 0.0% Non-Residentia l 0.0% 0.0% 0 .0% 0.0% 0.0% Recycled 0.0% 0.0% 0.0% 0.0% 0.0% Demand Factor Potable 100.0% 100.0% 100.0% 100.0% 100.0% Recycled 100.0% 100.0% 100.0% 100.0% 100.0% Revenu e Escalation Factors Non-I nflated 0.0% 0.0% 0.0% 0.0% 0.0% Non-Rate Revenues 0.0% 0 .0% 0.0% 0.0% 0.0% Interest Income 1.0% 1.0% 1.0% 1.0% 1.0% WA 12 42 of96 March 3, 2020, Item #4 Table 3 3 · Wastewater Key Inflationary Factors Inflationary Factors FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Genera l 3.0% 3.0% 3.0% 3.0% 3.0% Sa lary 5.0% 5 .0% 3.0% 3.0% 3.0% Benefits 10.0% 10.0% 10.0% 10.0% 10.0% General Utilit ies 3.0% 3.0% 3.0% 3.0% 3.0% Power 5.0% 5.0% 5.0% 5.0% 5 .0% Cap ital 4.1% 4.1% 4.1% 4 .1% 4.1% Table 3-4: Wastewate1 Key Revenue Assumptions FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Account Growth Single Family Res i dentia l 0.0% 0.5% 0.5% 0.5% 0.5% Multi-Family Residentia l 0.0% 0.0% 0.0% 0.0% 0 .0% Non-Residentia I 0.0% 0.0% 0 .0% 0.0% 0.0% Reve nue Esca lation Factors Non-Inflated 0.0% 0.0% 0.0% 0.0% 0 .0% Non -Rate Revenues 0.0% 0.0% 0.0% 0.0% 0.0% Interest I ncome 1.0% 1.0% 1.0% 1.0% 1.0% 13 43 of96 March 3, 2020, Item #4 4. Water Rate Study 4.1. Water Utility Financial Plan This section details the development of the five-year fmancial plan for City's water utility. This includes the determination of annual revenues required from potable water and recycled water rates based on annual cash flow projections. Assumptions and inputs related to projected revenues, operating expenses, and capital expenditures are clearly outlined in the following subsections. 4.1 .1 .EXISTING RATE STRUCTURE AND RATES The City bills every two months (bimonthly), resulting in six total bills per year for each customer. The City's current rates went into effect on March 1, 20 19. The existing rate structure for potable and recycled water consists of a bimonthly fi.xed service charge based on meter size. The City's existing bimonthly service charges are shown below in Table 4-1. Table 4-1 : Existing Bimonthly Water Meter Service Charges Meter Size CY 2019 5/8" $42.28 3/4" $42.28 l" $70.47 11/2" $140.90 2" $225.44 3" $422.72 4" $704.52 6" $1,409.05 8" $2,254.46 Additionally, customers pay a commodity rate by customer class on all water consump tion. These rates are shown in Table 4-2 . Single-Family Residentia l customers pay a two-tiered rate based on consumption at each tier level. All other customers pay a un iform rate per hundred cubic feet (ccf) of water consumed. Please note that the Potable and Recycled rates for City use are for calendar year (CY) 2019 . fable 4-2: Existing Bimonthly Water Commodity Rates ($/ccf) Customer Class Tier Width (ccf) CY2019 Single Family Resid ential Tier 1 0-199 ccf $5.36 Tier 2 >200 ccf $7 .65 Multi-Family Residential Uniform $5.47 Landscap e Irrigation Uniform $5.47 Non-Resid ential Unifor m $5.47 Re cycled Water Uniform $4.92 Potable Rat e City Use Un iform $2.36 Re cycled Rat e City Use Uniform $1 .73 A N Wfl T WA! 14 44of96 March 3, 2020, Item #4 4.1 .2.ACCOUNT AND USAGE PROJECTIONS Table 4-3 shows the estimated number of water accounts by meter size for FYE 2019 through FYE 2024. T he projections are based on account data provided by t he City for FY E 2018. The number of accounts are used to forecast the amoun t of ftxed revenue the City w iU receive from the b imonth ly meter service charges. Table 4-3· Potable and Recycled Water Meters 1 Meter Size FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Potable Water Meters 5/8" 0 0 0 0 0 0 3/4" 12,120 12,120 12,182 12,244 12,306 12,368 1" 959 959 962 966 969 973 11/2" 306 306 306 306 306 307 2" 285 285 285 285 285 285 3" 19 19 19 19 19 19 4" 5 5 5 5 5 5 6" 2 2 2 2 2 2 8" 2 2 2 2 2 2 Total Potable Water Meters 13,698 13,698 13,764 13,829 13,895 13,961 Recycled Water Meters 5/8" 0 0 0 0 0 0 3/4" 3 3 3 3 3 3 1" 100 100 100 100 100 100 11/2" 57 57 57 57 57 57 2" 48 48 48 48 48 48 3" 0 0 0 0 0 0 4" 0 0 0 0 0 0 6" 0 0 0 0 0 0 8" 0 0 0 0 0 0 Total Recycled Water Meters 208 208 208 208 208 208 1 The number of accounts for the ¾"Potable Water meters includes I '1 residential fire accounts. Table 4-4 projects the potable and recycled water consumption by class for the study period based on FYE 2018 usage data. 1!i 45 of96 March 3, 2020, Item #4 Table 4 -4 · Potable and Recyc led Water Use by Class fccf) Customer Class Single Family Res id ential Block 1 Block 2 Multi-Family Residentia l Landscape I rrigation Non-Res idential Agricu lt ura l City Potable Usage Total Potable Usage Tota l Po t a bl e Usage (AF ) Recycled Water City Recycled Usage Total Recycled Usage Tota l Recycled Usage (AF) 4 .1 .3 . REVENUES FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 2,595,033 2,595,033 2,608,515 2,621,997 2,635,479 2,648,961 173,190 173,190 174,090 174,990 175,889 176,789 188,531 188,531 188,531 188,531 188,531 188,531 75,421 75,421 75,421 75,421 75,42 1 75,421 728,397 728,397 728,397 728,397 728,397 728,397 12,304 12,304 12,304 12,304 12,304 12,304 96,327 96,327 96,327 96,327 96,327 96,327 3,869,203 3,869,203 3,883,585 3,897,967 3,912,348 3,926,730 8,882 8,882 8,915 8,949 8,982 9,015 250,833 250,833 250,833 250,833 250,833 250,833 260 260 260 260 260 260 251,093 251,093 251,093 251,093 251,093 251,093 576 576 576 576 576 576 T he C ity's water revenues consist of operatin g revenues (i .e. water rate revenues), other operating revenues, a nd non-operating revenues. Projected water rate revenues under existing rates are calculated for the years FYE 2020 to FYE 2024 by multiplying c urrent rates (Table 4-1 and Table 4-2) by the corresponding units of service (Table 4-3 and Table 4-4).1 Projecting water rate revenues under existing rates is necessary to evaluate the City's projected baseline financial position in the absence of a ny proposed r ate increases . Note that for City Potable and Recycled use , operating revenues for FYE 2019 were calculated based on CY 2018 rates for 6 months and CY 2019 rates for 6 months. This is because these rates were each in effect for half of FYE 20 I 9. 2 1 Fixed char ge revenues = [number of meters assessed] x [monthly rate] x [ 6 billing periods]. Volumetric c harge revenues = [annual usage in CCF) x [v o lumetric rate per CCF). 2 The Ciry's fiscal year is from July I through June 30. For example, fiscal year 2019 spanned from July l , 2018 through June 30, 2019. WIT 1 G 46 of96 March 3, 2020, Item #4 T able 4.5 , Projected O pe r ati n g Reve nu es Un der Exi stin g W ate r R ates Operating Revenues FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Bimonthly Service Charges Po t able Water $4,040,446 $4,237,569 $4,255,005 $4,272,441 $4,289,877 $4,307,313 Recycled Water $148,893 $156,158 $156,158 $156,158 $156,158 $156,158 Commodity Rates Single Family Residential $14,750,313 $15,234,280 $15,313,427 $15,392,575 $15,471,722 $15,550,869 Multi-Fami ly Residential $997,781 $1,031,265 $1,031,265 $1,031,265 $1,031,265 $1,031,265 Landscape Irrigation $399,158 $412,553 $412,553 $412,553 $412,553 $412,553 Non-Residential $3,854,968 $3,984,332 $3,984,332 $3,984,332 $3,984,332 $3,984,332 Agricultural $53,242 $55,245 $55,245 $55,245 $55,245 $55,245 City Potable Use $224,277 $227,549 $227,549 $227,549 $227,549 $227,549 Drought Surcharge $0 $0 $0 $0 $0 $0 Recycl ed $1,194,758 $1,234,851 $1,234,851 $1,234,851 $1,234,851 $1,234,851 City Recycled Use $451 $451 $451 $451 $451 $451 Total $25,664,287 $26,574,252 $26,670,835 $26,767,418 $26,864,001 $26,960,584 Table 4-6 shows a summary of other revenues . Revenues from the sale of raw water to a golf course were projected beyond FYE 2020 assuming 174 acre-feet per year (AFY) in sales. The majority of other operating and non- o perating revenues were held constant beyond FYE 2020. Table 4-6 Water ProJected Othe r R e ven u es Other Revenue FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Fees $116,760 $118,730 $118,730 $118,730 $118,730 $118,730 Other $81,100 $0 $0 $0 $0 $0 Miscellaneous $14,790 $14,7 90 $14,790 $14,790 $14,790 $14,790 Raw Water Sales -Contract $252,679 $262,736 $278,185 $294,552 $311,891 $330,260 Total $465,329 $396,256 $411,705 $428,072 $445,411 $463,780 Table 4-7 shows a revenue summary for the study period based on revenu es shown previously in Table 4-5 and Table 4-6. O nce again , operating revenues s hown in this secti o n reflec t projected water rate revenues under existing rates in the absence of any rate increases over the study period . Revenues Operating Revenues Other Revenues Total 4.1 .4 . O&M EXPENSES Table 4-7 : Water Revenue S u m m ary FYE 2019 FYE 2020 FYE 2021 FYE 2022 $25,664,287 $26,574,252 $26,670,835 $26,767,418 $465,329 $396,256 $411,705 $428,072 $26,129,615 $26,970,508 $27,082,540 $27,195,490 FYE 2023 FYE 2024 $26,864,001 $26,960,584 $445,411 $463,780 $27,309,412 $27,424,364 The City's operations and maintenance (O&M) expenses, shown in Table 4-8 , ar e based on the FYE 2020 City budget and projected out through F YE 2024. The City's projected purchased water and recycled water expenses were calculated over the study period based on the projected water supply and anticipated supply rates from SDCW A and the City of San Diego. AU other O&M expenses were projected beyond FYE 2020 by increasing FYE 2020 budgeted expenses using the inflationary factors discussed in Table 3-1. 1 7 47 of96 March 3, 2020, Item #4 Table 4 -8 · Water Operating Expenditu r es S u m m ary Operating Expenditures FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Water Purchases SDCWA Fixed Charges $4,057,800 $4,066,842 $4,394,585 $4,658,260 $4,937,756 $5,234,021 SDCWA Supply Charges $10,170,054 $10,391,465 $10,803,586 $11,493,140 $12,226,548 $13,006,589 City of San Diego -Recycled Water $361,954 $367,686 $389,747 $413,132 $437,920 $464,195 OtherO&M Legis lative & Administrative $701,245 $672,831 $693,016 $713,806 $735,221 $757,277 Finance Services $1,366,234 $1,457,327 $1,501,047 $1,546,078 $1,592,461 $1,640,234 Human Resources $410,027 $410,396 $422,708 $435,389 $448,451 $461,904 Development Services $386,489 $429,508 $442,393 $455,665 $469,335 $483,415 Public Works $1,220,760 $1,309,158 $1,348,433 $1,388,886 $1,430,552 $1,473,469 Treatment & Storage $3,362,082 $3,518,088 $3,683,906 $3,845,130 $4,013,101 $4,190,516 Water Transm ission & Distribution $1,485,462 $1,807,544 $1,906,590 $1,998,347 $2,094,801 $2,197,788 Reclaimed Water $578,244 $435,632 $460,040 $484,239 $509,862 $537,103 Total Op er ating Expenditures $24,100,352 $24,866,477 $26,046,051 $27,432,072 $28,896,007 $30,446,512 4 .1.5. CAPITAL IMPROVEMENT PLAN The City has developed a capital improvement plan (CIP) to address o ngoing water system needs in each year throughout the study period. Detailed CIP expenditures in each year are shown at the individual project level in Table 4-9. Inflated project costs in all years throughout the study period were provided by City staff. T a ble 4-9 : Wa ter Capital Improv e m en t Plan FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Ongoing Proj ects Clearwell Upgrades Part 2 $500,000 $0 $0 $0 $0 Subtota l Ongoing Projects $500,000 $0 $0 $0 $0 Proposed Projects Clearwell Upgrades (includes floating cover replacement) $2,164,000 $0 $0 $0 so Annual Water Valve Replacement $150,000 $169,000 $176,000 $183,000 $191,000 Annual ACP Water Main Replacement $0 $0 $0 $0 $300,000 Boulder Mtn Reservoir 1 & 2 Rehabil itation ($1,100,000 previously funded) $0 $140,000 $0 $0 so Water Treatment Plant Filter Gallery Upgrades $0 $734,000 $0 $0 $0 Water Treatment Plant Sedimentation Basin Upgrades $0 $293,000 $0 $0 $0 WTP Valves and Actuators $0 $100,000 $100,000 $0 $0 Gregg Street Reclaimed Reservoir Rehabilitation $0 $0 $1,172,000 $0 $0 Boulder Mountain Reservoir 3 Rehabilitation $0 so $622,000 $0 $0 MCC Upgrades (Welton, Community, Gregg Pot, Gregg Recla i m, Woodcliff) $0 $0 $0 $715,000 $0 Water Treatment Plant Upgrade Filters 1-8 $0 $0 $0 $1,587,000 $0 WTP Washwater Recovery Basin and Pumping Station $0 $0 $0 $733,000 $0 WTP El ectrical/Instrumentation Upgrades $0 so $0 $0 $2,414,000 Subtotal Proposed Projects $2,314,000 $1,436,000 $2,070,000 $3,218,000 $2,905,000 Total CI P $2,814,000 $1,436,000 $2,070,000 $3,218,000 $2,905,000 4 .1 .6 . RECOMMENDED RESERVE POLICIES To enhance financial management transparency and financial ri sk management, Raftelis recomme nds the Water Utility to maintain the following reserves. The following sections describe o ur recommendations in detail for each reserve. w -NA I f 111 48 of96 March 3, 2020, Item #4 4 1.6 1 Operatinq Res erve The purpose of an operating reserve is to provide working capital to support the operation, maintenance, and administration of the utility. From a risk management perspective, the O&M reserve supports the City's cash flow needs during normal operations and additionally ensures that operations can continue shou ld there be significant events that impact cash flows. As it is unlikely for a utility to perfectly predict the revenues and revenue requirements for each bitting period, a reserve set aside to hedge the risk of monthly negative cash positions is prudent in financial planning. Another factor to consider w hen creating a cash flow reserve is the freq uency of billing. A utility that bills once a month would require a lower minimum reserve than a utility that bills bimonthly or twice a year. Raftelis recommends that the City revise its current operating reserve target of 20% of operating expenditures to a minimum of 90 days of operating expenses and establish a target balance of 120 days to ensure adequate working capital for operating expenses. The City bills bimonthly; thus 120 days provides sufficient working capital to account for time differential between when e xpenses occu r and when revenues are collected. Additionally, this accounts for revenues varying seasonally whi le expenses remain relatively static. 4.1 .6 .2 Capital Replacement Reserve Adequate and timely capital replacement planning is a critical task to ensure reliability and sustainability of the water system. Capital reserves are used to provide funding for capital expenditures due to the capital-intensive nature of the water system. The C ity does not currently maintain a separate capital replacement reserve. Raftelis recommends the City adopt a policy using the estimated 5-year average CIP as the target balance. In FYE 2020, this average is $2.5 million. 4 .1 .6 .3. Recommended Tota l Reserve Targets Table 4-10 summarizes the proposed reserve policies for the City. Table 4-10 : Water Proposed Reserve Targets Reserve Operating Capital Replacement Policy Minimum: 90 days Target: 120 days 5-Year Average CIP 4.1 .7 .STATUS QUO FINANCIAL PLAN Table 4-11 shows the operating cash flow detail for the City during the study period under current rates with no adjustments. As shown in Line 28, the City is unable to meet its expenses, with particularly large deficits starting in FYE 2022 through FYE 2024 due to increasing O&M costs and capital projects. 19 49of96 March 3, 2020, Item #4 Table 4-11 : Water Financial Plan under Current Rates Line Revenue FYE 2020 FYE 2021 FYE 2 022 FYE 2023 FYE 2024 1 Rat e Revenu e $26,574,252 $26,67 0,835 $26,767,418 $26,864,001 $26 ,9 60,584 2 Other Revenue 3 Fees $118,730 $118,730 $118,730 $118,730 $118,730 4 Miscellaneous $14,790 $14,790 $14,790 $14,790 $14,790 5 Raw Water Sa les -Contract $262,736 $278,185 $294,552 $311,891 $330,260 6 Total Other Revenue $396,256 $411,705 $428,072 $445,411 $463,780 7 Total Revenue $26,970,508 $27,082,540 $27,195,490 $27,309,412 $27,424,364 8 Operating Expenditures 9 Water Purchases 10 SDCWA Fixed Charges $4,066,842 $4,394,585 $4,658,260 $4,937,756 $5,234,021 11 SDCWA Supply Charges $10,391,465 $10,803,586 $11,493,140 $12,226,548 $13,006,5 89 12 City of San Diego -Recycled Water $367,686 $389,747 $413,132 $437,920 $464,195 13 Other O&M 14 Legis lative & Adm inistrative $672,831 $693,016 $713,806 $735,221 $757,277 15 Finance Se rvices $1,457,327 $1,5 01,047 $1,546,078 $1,592,461 $1,640,234 16 Human Resou r ces $410,396 $422,708 $435,389 $448,451 $461,904 17 Development Services $429,508 $442,393 $455,665 $469,335 $483,415 18 Public Works $1,309,158 $1,348,433 $1,388,886 $1,430,552 $1,473,469 19 Treatment & Storage $3 ,518,088 $3,683,906 $3,845,130 $4,013,101 $4,190,516 20 Water Transm iss ion & Distribution $1 ,807,544 $1,906,590 $1,998,347 $2,094,801 $2,197,788 21 Reclaimed Water $435,632 $460,040 $484,239 $509,862 $537,103 22 Total Operating Expenditures $24,866,477 $26,046,051 $27,432,072 $28,896,007 $30,446,512 23 Debt Service & Capital Projects 24 Rate Funded Cap ita l Projects $2,814,000 $1,436,000 $2,070,000 $3,218,000 $2,905,000 25 Ne w Proposed Debt $0 $0 $0 $0 $0 26 Total Debt Service & Capital Projects $2,814,000 $1,436,000 $2,070,000 $3,218,000 $2,905,000 27 Total Expenses $27,680,477 $27,482,051 $29,502,072 $32,114,007 $33,351,512 28 Net Ca shflow ($709,969) ($399,511) ($2,306,582) ($4,804 ,595) ($5,927,148) Table 4-12 shows the City's fund balances over study period under c urrent rates with no adjustments . The operating reserve target is equal to 120 days of operating a nd the capital reserve target is equal to the 5-ye ar average CIP. T he C ity's operating fund balance (Line 5) will not meet the reserve target (Line 6) in the planning period and, therefore, no funds are transferred the capital replace ment fund (Line 9). The City currently does not have c a pi tal reserves . Tabl e 4-12: Water Projected Fund Balances Under Current Rates Line Operating Fund (5100) FYE 2020 FYE2021 FYE 2022 FYE 2023 FYE 2024 1 Beginning Balance $8 ,556,284 $7 ,928,391 $7,606,230 $5,364,241 $589,3 28 2 Net Cashflo w ($709 ,969) ($399,511) ($2,306,582) ($4,804,595) ($5,9 2 7,148) 3 Inter est Income $82,076 $77,350 $64,593 $29,683 $63 4 T r ansfers to Cap ital Replacement $0 $0 $0 $0 $0 5 End ing Balance $7,928,391 $7,606,230 $5,364,241 $589,328 ($5,337,756) 6 Target Reserve Balance $8,288,826 $8 ,682,017 $9,144,024 $9,632,002 $10,148,837 7 Capital Replacement Fund FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 8 Beginning Balance $0 $0 $0 $0 $0 9 T ransfe r s from O perating $0 $0 $0 $0 $0 10 New Debt Proceeds $0 $0 $0 $0 $0 11 Debt Funded Capital Pr ojets $0 $0 $0 $0 $0 12 Ending Balance $0 $0 $0 $0 $0 13 Target Reserve Balance $2,488,60 0 $2,522,400 $2,441,400 $2,515,680 $2,360,360 w 50 of96 March 3, 2020, Item #4 4 .1.8. PROPOSED FINANCIAL PLAN Balancing the need for the City to meet its revenue requir ements while mitigating impacts to ratepayers, Raftelis worked with staff to determine the revenue adjustment schedule in Table 4-13. All revenue adjustments in the rate models are set for March of each calendar year; however, the City will implement the first revenue adjustment in Marc h 2020 and subsequently in January of each fiscal year. Table 4 .·13 • Water Proposed Revenue Adjustments FYE 2020 March 4.50% FYE 2021 March 4 .50% FYE 2022 March 5.25% FYE 2023 March 5.25% FYE 2024 March 5.25% Table 4-14 incorporates the proposed revenue adj ustme nts into the financial plan. As noted above, the City needs to balance its revenue needs with mitigating rate in creases for customers. While the proposed financial plan stiJJ s hows a deficit i.n funding for FYE 2020 and FYE 2023 (Line 28), the City wiU rely o n reserves to fund the balance of expenditures rather than s ign ificantly increase its ra tes in deficit years. Tab le 4 -14: Water Proposed Financia l Plan Line Revenue FYE 2020 FYE2021 FYE 2022 FYE 2023 FYE 2024 1 Rate Revenue $26,972,865 $28,289,088 $29,742,226 $31,416,644 $33,184,899 2 Other Revenue 3 Fees $118,730 $118,730 $118,730 $118,730 $118,730 4 Miscellaneous $14,790 $14,790 $14,790 $14,790 $14,790 5 Raw Water Sales -Contract $262,736 $278,185 $294,552 $311,891 $330,260 6 Total Other Revenue $396,256 $411,705 $428,072 $445,411 $463,780 7 Total Revenue $27,369,122 $28,700,793 $30,170,299 $31,862,055 $33,648,679 8 Operating Expenditures FYE 2020 FYE 2021 FYE 2022 FYE2023 FYE2024 9 Water Purchases 10 SDCWA Fixed Charges $4,066,842 $4,394,585 $4,658,260 $4,937,756 $5,234,021 11 SDCWA Supply Charges $10,391,465 $10,803,586 $11,493,140 $12,226,548 $13,006,589 12 City of San Diego -Recycled Water $367,686 $389,747 $413,132 $437,920 $464,195 13 OtherO&M 14 Legislative & Administrative $672,831 $693,016 $713,806 $735,221 $757,277 15 Finance Services $1,457,327 $1,501,047 $1,546,078 $1,592,461 $1,640,234 16 Human Resources $410,396 $422,708 $435,389 $448,451 $461,904 17 Development Services $429,508 $442,393 $455,665 $469,335 $483,415 18 Public Works $1,309,158 $1,348,433 $1,388,886 $1,430,552 $1,473,469 19 Treatment & Storage $3,518,088 $3,683,906 $3,845,130 $4,013,101 $4,190,516 20 Water Transmission & Distribution $1,807,544 $1,906,590 $1,998,347 $2,094,801 $2,197,788 21 Reclaimed Water $435,632 $460,040 $484,239 $509,862 $537,103 22 Total Operating Expenditures $24,866,477 $26,046,051 $27,432,072 $28,896,007 $30,446,512 23 Debt Service & capital Projects 24 Ra t e Funded Cap ital Projects $2,814,000 $1,436,000 $2,070,000 $3,218,000 $2,905,000 25 New Proposed Debt $0 $0 $0 $0 $0 26 Total Debt Service & Capital Projects $2,814,000 $1,436,000 $2,070,000 $3,218,000 $2,905,000 27 Total Expenses $27,680,477 $27,482,051 $29,502,072 $32,114,007 $33,351,512 28 Net Cashflow ($311,356) $1,218,742 $668,226 ($251,951) $297,167 Table 4-15 s hows the City's projected fund balances over the study period. T he operatin g reserve target is equal to 120 days of operating expenses to mitigate against any potential cash flow risks or une xpected O&M costs. The capital reserve target is equal to the 5-year average CIP. The City's combined operating and capital fund balances 21 51 of 96 March 3, 2020, Item #4 will meet the minimum reserve levels beginning in FYE 2021. The City's operating fund balance will not meet the target reserve level beginni ng in FYE 2023. Additionally, the City will not meet the capita l reserve target in the study period in order to minimize rate impacts to customers; however, the reserves will begin to increase in the following years. Table 4-1 s· Water Projected Fund Bal ances Under Proposed Rates Line Operating Fund {5100) FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 1 Beginning Balance $8,556,284 $8,328,998 $8,771,464 $9,243,801 $9,094,705 2 Net Cashflow ($311,356) $1,218,742 $668,226 ($251,951) $297,167 3 Interest Income $84,070 $89,447 $99,776 $102,856 $104,110 4 Transfers to Capit a l Replacement $0 ($865,723) ($295,667) $0 $0 5 Ending Balance $8,328,998 $8,771,464 $9,243,801 $9,094,705 $9,495,982 6 Target Reserve Ba lance $8,288,826 $8,682,017 $9,144,024 $9,632,002 $10,148,837 7 Capital Replacement Fund FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 8 Beginning Balance $0 $0 $865,723 $1,161,389 $1,161,389 9 Transf ers from Operating $0 $865,723 $295,667 $0 $0 10 New Debt Proceeds $0 $0 $0 $0 $0 11 Debt Funded Capital Projets $0 $0 $0 $0 $0 12 Ending Bal ance $0 $865,723 $1,161,389 $1,161,389 $1,161,389 13 Target Reserve Balance $2,488,600 $2,522,400 $2,441,400 $2,515,680 $2,360,360 Figure 4-l through Figure 4-3 display the Financial Plan in graphical format. Figure 4-1 illustrates the operating position of the City, where expenses, inclusive of reserve funding, are shown by stacked bars; and total revenues at both c urrent rates and proposed rates are shown by the horizontal trend lines. Figure 4-2 summarizes the projected CIP and its funding sources (100% Rates/Reserves funded. Figure 4-3 displays the ending total reserve balance for the water utility, inclusive of operating and capital funds. The horizontal trend lines indicate the minimum and target reserve balances and the bars indicate ending reserve balance . No new debt is proposed to be issued as part of the proposed five-year financial plan. "' $40 c:: :§ $35 2 $30 v,, 52of96 $25 $20 $15 $10 $5 so -$5 Figure 4-1: Water Operating Financial P lan at Proposed Rates Operating Financial Plan ---- FYE 2020 FYE 2021 FYE 2022 -Operating Expense5 -Debt Service --Proposed Revenue -Water Purchases Net Cashflow w . AN N TE -NAT --------. FYE 2023 FYE 2024 Rate Funded Capital -Current Revenue T 22 March 3, 2020, Item #4 23 Fig ure 4-2: Proposed W ater Ca pital Improvement Pla n and Funding Source "' $3.S C ~ ~ $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 .,, $14 t:: Q i $12 53 of96 $10 $8 $6 $4 $2 so Capital Funding Sources $3.22 $2.81 $2.91 $2.07 $1 .44 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Debt Funded ■ Rates/Reserves Funded ©Total CIP Figure 4-3: W ate r Projecte d Ending Bala nces at Proposed Rates Operating & Capital Reser ve s ------- FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 -Total Reserves -M inimum Reserve -Target Reserve March 3, 2020, Item #4 4.2. Cost of Service Analy ·. 4 .2 .1 .COST OF SERVICE METHODOLOGY The first step in the COS analysis process is to determine the revenue requirement, which is based on the results of the financial plan and the proposed revenue adjustments. The framework and methodology utilized to develop the COS analysis and to apportion the revenue requirement to each customer class and tier is informed by the processes outlined in th e Ml Manual. COS analyses are tailored specifically to meet the unique needs of each water system. However, there are fou r distinct steps in every analysis to recover costs from customer classes in an accurate, equitable , and defensible manner: Cost functionalization: O&M expenses and capital assets are categorized by their function in the system. F unctions include supply, treatment, storage, distribution, customer service, etc. Cost causation component allocation: the functionalized costs are then allocated to cost causation components based on their burden on the system. T he cost causation components include supply, base delivery, peaking, meter, customer, etc. The revenue requirement is allocated accordingly to the cost causation components and results in the total revenue requirement for each cost causation component. Unit cost development: the revenue requirement for each cost causation component is divided by the appropriate units of service to determine the unit cost for each cost causation component. 4 Revenue requirement dis tribution: the unit cost is utilized to distribute the revenue requirement for each cost causation component to customer classes and tiers based on their individual service units. The City's customer classes include Domestic, Agricultural, Commercial, Irrigation, Construction, and Recycled. 4.2.2.REVENUE REQUIREMENT The revenue requirement for the proposed rates will be based on FYE 2020, the designated Test Year. Table 4-16 shows the revenue requirement derivation with the total revenue required from rates. The totals shown in the "Operating" and "Capital'' columns are the total O&M and capital revenue requirements, respectively, that are to be recovered through rates. The operating costs (Line 7) flow from Table 4-8. The Debt Service category (Line 10) represents both replacement capital projects (Table 4-9) and any proposed debt. Note there is no debt issuance proposed for FYE 2020. Revenue offsets are composed of various miscellaneous, non-rate revenues, shown in Table 4-6. To arrive at the rate revenue requirement, we subtract these revenue offsets from the combined operating and debt service costs. The net cash flow from Table 4-14, Line 28, is shown on Line 19 as Adjustment fo r Cash Balance. The adjustment to annualize the rate increase (Line 20) is due to the mid-year proposed revenue adjustment occurring in March 2020. These adjustments are then combined to arrive at the total a nnual revenue requ irement from rates. This is the amount that the City's rates are designed to collect, for a full year, in the "Total" column at Line 22. pn 24 54 of96 March 3, 2020, Item #4 Table 4-16: Water Revenue Requirement Line Revenue Requirements Operating Capital Total 1 Operating Costs 2 SDCWA Fixed Charges $4,066,842 $4,066,842 3 SDCWA Supply Charges $10,391,465 $10,391,465 4 City of San Diego -Recycl e d Water $367,686 $367,686 5 Treatment & Storage $3,518,088 $3,518,088 6 Other O&M $6,522,396 $6,522,396 7 Subtotal Operating Costs $24,866,477 $0 $24,866,477 8 Debt Service 9 Rate Funded Cap ital Pr ojects $2,814,000 $2,814,000 10 New Proposed Debt $0 $0 11 Subtota l Debt Service $0 $2,814,000 $2,814,000 12 Total Revenue Requirements $24,866,477 $2,814,000 $27,680,477 13 Less : Revenue Offsets 14 Fees $118,730 $118,730 15 Miscellaneous $14,790 $14,790 16 Raw Wate r Sales -Contract $262,736 $262,736 17 Total Reven ue Offsets $396,256 $0 $396,256 18 Less: Adjustments 19 Adjustm ent for Cash Balance $311,356 $311,356 20 Adjustme nt for Mid-Year I ncrease ($797,228) ($797,228) 21 Tota l Adjustments ($485,872) $0 ($485,872) 22 Total Revenue Requirement from Rates $24,956,093 $2,814,000 $27,770,093 4.2.3. FUNCTIONALIZATION AND ALLOCATION OF EXPENSES After determining the revenue requirement, the n ext step of the COS analysis is to aUocate the O&M expenses and capital assets to the following functions: I Administration -overhead costs associated w ith the management of the utility ' Billing -all customer billing costs , C ustomer Service -represents the costs associated with meter reading, billing and customer and meter service >-I Supply -represents costs of procuring water supplies from SDCW A ' Production -the costs of buying potable water o Treatment -represents costs of water treatment , Transmission & Distribution -represents costs pertaining to the City's water distribution system Meters -represents costs relating to maintenance and capital costs of water meters as well as a po1tion of costs related to water system capacity " Recycled Water -represents costs related to the City 's recycled water system 10 Capital -infrastructure costs I I General -represents costs for general operational expenses which cannot be categorized under any of the above The functionalization of costs allows for the allocation of costs to the cost causation components , which include: 25 I Supply -costs associated with procuring water supplies from SDCW A Base Delivery -costs associated with providing water under average conditions Peaking (Max Day and Max Hour) -costs associated with providing water under peak demand conditions Recycled Water -costs associated with the City's recycled water system 'I 55 of96 March 3, 2020, Item #4 ., Treabuent -costs associated with treating water for the potable water system n Meters -costs associated with purchasing, maintaining, and servicing water meters as well as some costs related to system capacity i Customer -costs associated with customer service and billing X General -costs that do not have any direct cost causation 4.2.4 . PEAKING FACTORS Water systems are designed to handle maximum day (Max Day) and maximum hour (Max Hour) demands. Different facilities, such as distribution and storage facil ities , are designed to meet the peaking demands of customers. Therefore, peaking costs, also known as extra capacity cos ts, are associated with meeting peak customer demand. Peaking costs are therefore based on Max Day and Max Hou r demands. Table 4-I 7 shows the sys tem-wide peaking factors used to derive the cost component allocation bases for Base Delivery, Max Day, and Max Hour costs. The Base Delivery, or Base use is considered average daily demand over one year, which has been normalized to a factor of I .00 (Col umn B, Line I). The Max Day peaking factor (Line 2) indicates that the Max Day demand is two times greater than the average da i ly demand. Similarly, the Max Hour peaking factor (Line 3) shows that the Max Hour demand is three times greater than average demand. These factors were determined during the development of the City's Water Master P lan. T he percentage allocations of costs are calculated using the equations outlin ed. The Base aUocation is I / l x I 00%= 100% The Max Day allocation are calculated as follows: » Base Deli very: I / 2 x I 00% = 50% » Max Day: (2 -I) I 2 x l00% = 50% The Max Hour aJJocations are calculated as follows: » Base Delivery: 1 / 3 x 100% = 33% » Max Day: (2 -I)/ 3 x 100% = 33% » Max Hour: (3 -2) / 3 x 100% = 33% The Average Max Day / Max Hour allocation averages the Max Day and Max Hour allocations to Base, Max Day, and Max H our, respectively, and is used to allocate the cost of transmission and distribution assets which are not identified separately. fable 4-17 : System Pea king Factors System Line All ocation Factor Peaking Base MaK Day MaKHour Total Factor A B C D E F 1 Base 1.00 100% 0% 0% 100% 2 Max Day 2.00 50% 50% 0% 100% 3 Max Hou r 3.00 33% 33% 33% 100% 4 Average Max Day/Max Hour 42% 42% 17% 100% -,~ p V A ['I 26 56 of96 March 3, 2020, Item #4 Table 4-18 s h o ws the derivation of the peaking factors by c u stomer class and tier, determined by dividing the total maximum monthly u sage (Column C) by the average monthly u sage (Column D) for each c ustomer class and tier. For this analysis, we employ the classes and tiers used in the proposed rate schedule. These p ea kin g factors a re used to allocate the peaking costs to each c u stomer class and tier. See the Rate Derivation section of this report for a detaiJed discussion of tier widths and th e u se of peaking factors in determining rates. Line 1 2 3 4 5 6 7 8 Table 4-18 : Customer Class Peaking Factors Customer Class Selected Max Month Bim onthly Tiers A B C Single Family Re sident ial Tier 1 20 206,218 Tier 2 56 187,011 Ti er 3 56+ 312,864 Mult i-Fami ly Residenti al 35,087 Landscape Irrigation 20,926 Non -Res identia l 151,167 Recycled Wate r 54,881 Average Max Day Month Peaking Factor D E 192,428 1.07 133,559 1.40 135,243 2.31 31,422 1.12 10,981 1.91 121,400 1.25 41,849 1.31 The Max Hour peaking factor is for each class is derived by multiplying the Max Day factor by 1.5 which is the ratio o f the Max H o ur to Max Day system peaking factors. 4.2.5.ALLOCATION OF COSTS As detailed in Sectio n 4 .2.1, functionalizing costs allows u s to bette r distribute costs to the cost cau sation compo nents . Table 4-19 shows the fun ctio n categories used in this study in Column A. Column B identifies the ch osen rationale for distributing these functionalized costs to the cost causation components. For example, all costs a ll ocated to the Administration function (Column A, Li ne !) a re all initially allocated to the General cost causatio n components (Column K , Line I). Line 9 sh ows the distribution of Capital costs based on the City's total c urre nt asset value distributed to the re levant cost allocatio n s. 27 57 of 96 March 3, 2020, Item #4u, 00 0 .... 10 en Table 4-19· Functionalized O&M Cost Distributions to Cost Causation Factors Line Function Rationale Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total A B C D E F G H I J K L 1 Administration General 100% 100% 2 Billing Customer 60% 40% 100% 3 Customer Service Customer 100% 100% 4 Supply Supply 100% 100% 5 Production Max Day 50% 50% 0% 100% 6 Transmission & Distribution Max Hour 33% 33% 33% 100% 7 Treatment Treatment 100% 100% 8 General General 100% 100% 9 Capital Capital 0% 35% 36% 11% 14% 0% 0% 2% 1% 100% 10 Recycled Recycled 100% 100% Using Table 4-19 as a guide, all of the operating costs are then allocated based on their related function's cost allocation distribution. Table 4-20 shows first the percent distributions, then dollar allocations of each O&M cost. 28 March 3, 2020, Item #4Table 4-20· Water O&M Cost Allocations V, O&M Allocation Function Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total ID SDCWA -MWD Readiness-to-Serve Charge 50% 50% 100% 0 -SDCWA -MWD Capacity Charge 100% 100% ID SDCWA -Supply Reliability Charge 50% 50% 100% (JI SDCWA -Customer Service Charge 50% SO% 100% SDCWA -Storage Charge 50% 50% 100% SDCWA -Infrastructure Access Charge 100% 100% SDCWA Supply Charges Supply 100% 0% 0% 0% 0% 0% 0% 0% 0% 100% City of San Diego -Recycled Water Recycled 0% 0% 0% 0% 0% 0% 0% 100% 0% 100% Legislative & Administrative Administration 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% Finance Services Billing 0% 0% 0% 0% 0% 60% 40% 0% 0% 100% Human Resources Administration 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% Development Services Capital 0% 35% 36% 11% 14% 0% 0% 2% 1% 100% Public Works General 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% Treatment & Storage Treatment 0% 0% 0% 0% 100% 0% 0% 0% 0% 100% Water Transmission & Distribution Transmission & Distribution 0% 33% 33% 33% 0% 0% 0% 0% 0% 100% Reclaimed Water Recycled 0% 0% 0% 0% 0% 0% 0% 100% 0% 100% O&M Allocation Function Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total SDCWA -MWO Readiness-to-Serve Charge 0 $169,530 $0 $0 $0 $0 S169,530 so $0 so $339,060 SDCWA -MWD Capacity Charge $0 $0 $0 S174,450 so $0 $0 $0 $0 S174,450 SDCWA -Supply Reliability Charge S416,38S $0 so $0 so S416,385 so $0 $0 $832,770 SDCWA -Customer Service Charge S272,649 so $0 $0 so $0 S272,649 $0 $0 $545,298 SDCWA -Storage Charge $749,883 $0 $0 $0 $0 $749,883 $0 $0 so Sl,499,766 SDCWA -Infrastructure Access Charge so $0 $0 $0 so $675,498 $0 so $0 $675,498 SDCWA Supply Charges Supply $10,391,465 $0 so so $0 $0 $0 so $0 $10,391,465 City of San Diego -Recycled Water Recycled so $0 so so so so $0 $367,686 $0 $367,686 Legislative & Administrative Administration $0 so so so so so so $0 $672,831 $672,831 Finance Services Billing so so so $0 so $874,396 $582,931 so so $1,457,327 Human Resources Administration so so so so so so so $0 $410,396 S410,396 Development Services Capital so S150,989 S156,190 S48,111 SG0,550 $952 $0 S7,119 SS,596 $429,508 Public Works General $0 $0 $0 $0 $0 so so so St,309,158 $1,309,158 Treatment & Storage Treatment $0 $0 $0 $0 $3,518,088 so $0 $0 $0 $3,518,088 Water Transmission & Distribution Transmission & Distribution $0 $602,515 $602,515 S602,515 $0 $0 so $0 $0 Sl,807,544 Reclaimed Water Recycled $0 $0 $0 so $0 $0 so $435,632 so $435,632 Total O&M Expenses $11,999,912 $753,504 $758,705 $825,076 $3,578,638 $2,886,644 $8SS,580 $810,437 $2,397,981 $24,866,477 O&M Allocotion 48% 3% 3% 3% 14% 12% 3% 3% 10% 100% 29 March 3, 2020, Item #4en 0 0 .... ID °' Table 4-21 distributes the functionalized capital asset values to cost causation factors similar to Table 4-19 and Table 4-22 shows the resulting percent and dollar allocations of the different capital assets. Capital costs are allocated based on the system assets because capital costs are incurred to refurbish and replace system assets. Using system assets takes a longer-term view of the allocations of capita! costs and provides a consistent allocation of costs from year to year even if the capital costs associated with different types of system assets change every year. In valuing the assets, we utilized the original cost less depreciation to account for aging of the assets, thus a decrease in the value. For example, Storage costs are allocated according to Max Day rationale because storage is constructed to meet base and peak day demand. Contrastingly, other costs, such as Meter, Recycled, General and Administrative costs are allocated 100% to their relevant cost causation factor. Table 4-21: Functionalized Capital Cost Distributions to Cost Causation !='actors Line Function Rationale Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total A B C D E F G H I J K L 1 Storage Max Day 50% 50% 0% 100% 2 Pumping Max Hour 33% 33% 33% 100% 3 Pipelines Avg. Max Day/Hour 42% 42% 17% 100% 4 Fire Hydrants Fire 33% 67% 100% 5 Treatment Treatment 100% 100% 6 Administration Customer Service 100% 100% 7 Meters Meter 100% 100% 8 Equipment Avg. Max Day/Hour 42% 42% 17% 100% 9 Production Supply 100% 100% 10 General General 100% 100% 11 Recycled Recycled 100% 100% IT w 30 March 3, 2020, Item #4Table 4-22: Water Capital Cost Allocations en Capital Asset Allocation Function Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total ..... 0 .... General General 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% ID Land & Easement General 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% en 0% 33% 33% 33% 0% Pumping Pumping 0% 0% 0% 0% 100% Source Of Supply Production 100% 0% 0% 0% 0% 0% 0% 0% 0% 100% Transmission & Distribution Pipelines 0% 42% 42% 17% 0% 0% 0% 0% 0% 100% Treatment Plant Treatment 0% 0% 0% 0% 100% 0% 0% 0% 0% 100% Recycled Recycled 0% 0% 0% 0% 0% 0% 0% 100% 0% 100% Storage Storage 0% 50% 50% 0% 0% 0% 0% 0% 0% 100% Meters Meters 0% 0% 0% 0% 0% 100% 0% 0% 0% 100% Fire Fire Hydrants 0% 0% 33% 67% 0% 0% 0% 0% 0% 100% Administration Administration 0% 0% 0% 0% 0% 0% 100% 0% 0% 100% Buildings & Improvements General 0% 0% 0% 0% 0% 0% 0% 0% 100% 100% Equipment Equipment 0% 42% 42% 17% 0% 0% 0% 0% 0% 100% Capital Asset Allocation Function Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total General General $0 $0 $0 $0 $0 $0 $0 $0 $253,497 $253,497 Land & Easement General $0 $0 $0 $0 $0 $0 $0 $0 $85 $85 Pumping Pumping $0 $706,198 $706,198 $706,198 $0 $0 $0 $0 $0 $2,118,595 Source Of Supply Production $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Transmission & Distribution Pipelines $0 $2,288,608 $2,288,608 $915,443 $0 $0 $0 $0 $0 $5,492,660 Treatment Plant Treatment $0 $0 $0 $0 $2,774,694 $0 $0 $0 $0 $2,774,694 Recycled Recycled $0 $0 $0 $0 $0 $0 $0 $326,230 $0 $326,230 Storage Storage $0 $3,676,490 $3,676,490 $0 $0 $0 $0 $0 $0 $7,352,980 Meters Meters $0 $0 $0 $0 $0 $43,627 $0 $0 $0 $43,627 Fire Fire Hydrants $0 $0 $238,359 $483,942 $0 $0 $0 $0 $0 $722,301 Administration Administration $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Buildings & Improvements General $0 $0 $0 $0 $0 $0 $0 $0 $2,876 $2,876 Equipment Equipment $0 $247,758 $247,758 $99,103 $0 $0 $0 $0 $0 $594,620 Total Capital Assets $0 $6,919,055 $7,157,415 $2,204,687 $2,774,694 $43,627 $0 $326,230 $256,458 $19,682,167 Capital Asset Allocation 0% 35% 36% 11% 14% 0% 0% 2% 1% 100% The goal of allocating the costs and asset values in Table 4-20 and Table 4-22 is to allocate the total O&M costs and capital assets to the different cost causation components. This results in a percent distribution shown in the last line each of Table 4-20 and Table 4-22. Table 4-23 summarizes those cost allocations . • 11 March 3, 2020, Item #4Table 4-23: Water Cost Allocation Distribution Summary °' Function Rationale Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total N 0 O&M O&M Expenses 48% 3% 3% ... 3% 14% 12% 3% 3% 10% 100% \0 °' Capital Capital Assets 0% 35% 36% 11% 14% 0% 0% 2% 1% 100% F Ff\,/1/A 32 March 3, 2020, Item #4 4.2.6. UNITS OF SERVICE This subsection describes the next step in the COS analysis, which is to determine the appro priate units of service to be used to calculate the unit costs for each cost causation component. 4 .2 6 .1. Equivalent Meters To allocate meter-related costs appropriately, the concept of equivalent meters needs to be understood. By using equivalent meters instead of a straight meter count, the analysis accounts for the fact that larger meters impose greater demands on the system and are more expensive to install, maintain, and replace than smaller meters. Equivalent meters are used in calculating meter service costs. Equivalent meters are based on meter h ydraulic capacity. Equivalent meters represent the potential demand on the water system in terms of the base or smallest meter size. A ratio of hydraulic capacity is calculated by dividing large meter capacities by the base meter capacity. The capacity ratio is calcu lated using the meter capacity in gallons per minute (gpm) provided in the A WWA MI Manual Principles of Water Rates , Fees and Charges (7th Edition). The base meter is the smallest meter, in this case, a 3 /4-inch meter. The actual number of meters by size is multiplied by the corresponding capacity ratio to calculate equivalent meters. Table 4-24 and Table 4-25 show the equivalent meters for FYE 2020 for potable and recycled water service, respectively . Potable Meter Size 3/4" 1" 11/2" 2" 3" 4" 6" 8" Total Potable Meters Table 4-24: Potabl e Water Equivalent Meters 1 Capacity (gpm) AWWA Ratio Number of Meters 30 1.00 12,120 so 1.67 959 100 3.33 306 160 5 .33 285 350 11.67 19 630 21 .00 5 1300 43 .33 2 2400 80.00 2 13,698 1 The number of accounts for the ¾"Potable Water meters includes I" residential fire accou11ts. Recycled Meter Size 3/4" 1" 11/2" 2" 3" 4" 6" 8" Total Recycl ed Meters 33 63 of96 Table 4 25 · Recycled Water Equivalent Meters Capacity (gpm) AWWA Ratio Number of Meters 30 1.00 3 so 1.67 100 100 3.33 57 160 5.33 48 350 11.67 0 630 21.00 0 1300 43.33 0 2400 80.00 0 208 Equivalent Meters 12,120 1,598 1,020 1,520 222 105 87 160 16,832 Equivalent Meters 3 167 190 256 0 0 0 0 616 March 3, 2020, Item #4 4.2 6 .2 . Peak1119 U nits o f Service Our goal is to proportionately distribute costs to each user class. To accomplish this, we calcu late unit costs for each cost causation componen t. The fLrst step in this process is to calculate the total numbe r of service units demanded by each class for each cost cau sation component. This is shown in Table 4-26. The capacity or peaking factor for each customer class was d e rived in Table 4-18. The total equivalent meters are from Table 4 -24 and Table 4-25. T he Max Day and hour capacities are calcu lated by multiplying the average daily use by the Max Day or Max Hour peaking factor for each class and tier. This results in the total capacity, with extra capacity calculated by subtracting the average daily use from the total capacity for either Max Day or Max Hour. Table 4-26 : Deri vatio n of Cost Causation Co m po ne nt Un its of Serv ice Max Day Max Hour Bimonthly Annual Use Average Daily Total Capacity Extra Capacity Capacity Total Extra Numborof Number of Customer Class Percent Capacity Capacity Capacity Equivalent Tiers (hcf) in Tier (hd) Use (hcf/day) Factor (hcf/day) (hcf/day) Factor Customers (hd/day) (hcf/day) Meters Single Family Residential 2,768,223 13,230 12,650 Tier '.I 20 42% 1,154,921 3,164 1.07 3,386 221 1.6] 5,078 1,693 Tier 2 56 29% 801,599 2,196 1.40 3,075 878 2.10 4,612 1,537 Tier 3 56• 29% 811,703 2.224 2-31 5,137 2,913 3.47 7,706 2,569 Mutti•Family Residential 188,531 517 1.12 577 60 1.67 865 288 572 146 Landscape Irrigation 75,421 207 1.91 394 187 2.86 591 197 85 10 Non-Residential 728.397 1,996 1.25 2.485 489 1.87 3,727 1,242 2,754 824 Agricultural 12,304 34 1.91 64 31 2.86 96 32 City Potable Usage 96,327 264 1.25 329 65 l .87 493 164 191 68 Recycled Water 251,093 688 1.3 1 902 214 1.97 1,353 451 616 208 Total 4,120,296 11,288 16,348 4,845 23,169 8,174 17,447 13,906 4 .2 .7 .ALLOCATION OF REVENUE REQUIREMENTS TO COST CAUSATION COMPONENTS Table 4-27 shows the cost causation component unit cost derivations. The operating revenue re quirement shown in Column K, Lin e l is equal to the operating revenue requirement (Line 22) in Table 4-16. The operating revenue requirement is allocated to the cost causation components using the resulting O&M allocation from Table 4-23 . Similarly, the capital revenue requirement in Column K, Line 2 is equal to the capital revenue requirement (Line 22) in Table 4 -16 and is allocated to the cost causation factors per Table 4-23. General costs, shown on Line 4 , which cannot be tied to a specific function are redistributed in proportion to the resulting allocations of the other cost causation components except for Supply. Half the treatment costs are reallocated to Max Day in Line 5 since treatment facilities are d esigned for Max Day and a portion of Max Hour and Max Day costs are redistributed to the Meter component in L ine 6. The final adjustments are intended to provide revenue stabi.lity for the City by ensuring that approximately 20 percent of rate revenues are from fixed charges. The total adjusted cost of service (Line 7) is divided by the relevant units of service in Line 8 (and from Table 4-26) to calculate the unit cost (Line JO and Line 11). For example, the unit cost for the Base Delivery component is determined by dividing the total base delivery cost by total potable water use in ccf, while annual Customer costs are divided by the estimated number o f bills in each year (total number of customers in Table 4 -26 times six bills per year). These unit costs will next be used to distribute the cost causation components to the customer classes. )4 64 of96 March 3, 2020, Item #40\ Table 4-27 Water Unit Cost Calculation U'I 0 line Cost Allocation Supply Base Delivery Max Day Max Hour Treatment Meter Customer Recycled General Total ~ A B C D E F G H I J K \0 0\ 1 Operating Revenue Requirement $12,043,158 $756,219 $761,439 $828,049 $3,591,535 $2,897,047 $858,663 $813,358 $2,406,623 $24,956,093 2 Capital Revenue Requirement so $989,232 $1,023,310 $315,209 $396,704 $6,237 $0 $46,642 $36,666 $2,814,000 3 Total Cost of Service $12,043,158 $1,745,451 $1,784,750 $1,143,258 $3,988,239 $2,903,285 $858,663 $860,000 $2,443,290 $27,770,093 4 Allocation of General Cost $321,045 $328,273 $210,282 $733,565 $534,008 $157,936 $158,182 ($2,443,290) so 5 Allocation of Treatment to Max Day $2,360,902 ($2,360,902) $0 so 6 Allocation of Peak to Meter ($676,167) ($433,133) $1,109,300 $0 7 Total Adjusted Cost of Service $12,043,158 $2,066,495 $3,797,757 $920,407 $2,360,902 $4,546,592 $1,016,599 $1,018,181 $0 $27,770,093 8 Unit of Service 3,869,203 3,869,203 4,845 7,723 3,869,203 104,684 83,436 251,093 9 Unit hcf hcf hcf/day hcf/day hcf equiv. meter/yr bills/yr hcf 10 Unit Cost $3,11 $0.53 $783.83 $119.18 $0.61 $43.43 $12.18 $4.05 11 Unit hcf hcf hd/da_y_ hcf/day hcf equiv. meter/2·mo per bimonthly bill hcf 35 March 3, 2020, Item #4en en 0 ... \0 0\ 4.2.8.DISTRIBUTION OF COST CAUSATION COMPONENTS The final step in the cost of service analysis is to distribute the cost causation components to the user classes using the unit costs derived in Table 4-27, thereby arriving at the cost to serve each customer class. Table 4-28 shows the cost allocation to each class. To derive the cost to serve each class, the unit costs from Table 4-27 are multiplied by the service units shown in Table 4-26 for each customer class and tier. For example, the supply costs for Tier 1 Single Family usage is calculated by multiplying the supply unit cost by that class' annual usage in Tier I. Similarly, the Customer costs are derived by multiplying the Customer unit cost by the total number of bills by class in each year. Similar calculations yield the total cost to serve each user class, as shown in the last column of Table 4-28. We have now calculated the cost to serve each user class and can proceed to derive rates that collect the cost to serve each class. Table 4-28: Allocation of Costs to Customer Classes Customer Class Supply Base Max Day Delivery Max Hour Treatment Meter Customer Recycled Total COS Single Family Residential $3,447,513 $924,779 $19,992,891 Tier 1 $3,594,769 $616,829 $173,611 $201,751 $704,707 Tier 2 $2,495,032 $428,125 $688,564 $183,216 $489,118 Tier 3 $2,526,482 $433,521 $2,283,472 $306,118 $495,283 Multi-Family Residential $586,816 $100,692 $47,225 $34,370 $115,037 $149,144 $10,673 $1,043,957 Landscape Irrigation $234,753 $40,281 $146,684 $23,465 $46,020 $22,063 $731 $513,998 Non-Residential $2,267,185 $389,028 $383,549 $148,077 $444,452 $717,664 $60,239 $4,410,193 Agricultural $38,297 $6,571 $23,930 $3,828 $7,508 $0 $0 $80,134 City Potable Usage $299,824 $51,447 $50,723 $19,582 $58,777 $49,773 $4,971 $535,097 Recycled Water $160,436 $15,206 $1,018,181 $1,193,823 Total Cost of Service $12,043,158 $2,066,495 $3,797,757 $920,407 $2,360,902 $4,546,592 $1,016,599 $1,018,181 $27,770,093 I' 36 March 3, 2020, Item #4 4.3. Water Rate Develop1ncnt This section includes the calculation of rates and the results of th e study. Rates and charges are designed for the study period, F YE 2020 to FYE 2024. Rates and charges in the rate model are assumed to be implemented in March of each year; however, the City will implement the first revenue adjustment in March 2020 and subsequently in January of each fiscal year. 4.3 .1. DERIVATION OF PROPOSED BIMONTHLY FIXED CHARGE We propose the City retain its schedule of a bimonthly fixed charges by meter size for all customer classes. Table 4-29 shows the derivation of the bimonthly fixed charge, which represents the Meter and Custo mer cost components determined in Table 4-27 . T his charge accounts for the fact that even when a c ustomer does not use any water, the City incurs fixed costs related to maintaining the ability to serve each connection. fn FYE 2019, more than 50% of the costs incurred by the wate r utility are fixed; therefore, to increase revenue stability, the City Council decided to increase the revenue collected from fixed charges to 20% from the c urre nt 16%. M eter Component The meter component consists of costs to the City that vary based on meter size. It reflects the fact that larger meters have the potential to demand more capacity compared to smaller meters. The potential capacity demanded is proportional to the potential flow through each meter size as established by the A WW A hydraulic capacity ratios which are shown in the "Capacity Ratio" column ofTable 4-29. The ratios show the potential flow through each meter size compared to the flow through a 3/ 4-inch meter. The Meter capacity component for larger meters is scaled up using the A WW A capacity ratios shown in the "Capacity Ratio" column. Allocating capacity costs by meter size is a common way to equitably recover the fixed cost of operating the utility. Customer The customer component recovers costs associated with meter reading, customer billing and collection as well as customer service costs. These costs are the same for all meter sizes as it costs the same to provide billing and customer services to a small meter as it does a larger meter. The Meter and Customer components are combined to form the proposed charge by meter size. The difference between proposed FYE 2020 and current fixed charges are also s hown Table 4-29: Derivation of the Bimonthly Fixed Charges Meter Size Capacity Meter Customer Proposed Current Difference Ratio Charge Charge ($) 3/4" 1.00 $43.43 $12.18 $55.62 $42.28 $13.34 1" 1.67 $72.39 $12.18 $84.58 $70.47 $14.11 11/2" 3.33 $144.77 $12.18 $156.96 $140.90 $16.06 2" 5.33 $231.64 $12.18 $243.82 $225.44 $18.38 3" 11.67 $506.70 $12.18 $518.89 $422.72 $96.17 4" 21.00 $912.06 $12.18 $924.25 $704.52 $219. 73 6" 43.33 $1,882.04 $12.18 $1,894.22 $1,409.05 $485,17 8" 80.00 $3,474.53 $12.18 $3,486.72 $2,254.46 $1,232.26 :n 67 of96 March 3, 2020, Item #4 4 .3 .2. REVISIONS TO TIER DEFINITIONS The only customer class subject to a tiered volume tric rate structure is the Single-Family Residential customer class. The basis for Single-Family Residential tier definitions is shown in Table 4-30. Single-Family Residential Tier l usage is intended to provide an affordable rate for essential indoor water usage needs.3 Tier 2 usage is intended to provide for reasonable outdoor usage, a nd , therefore its upper limit is set to average summer bimonthly usage. Tier 3 usage is designed to capture inefficient and excess usage. Note that all water usage projections by customer class and tier utilized in Section 4.2.6 to develop units of service are based on the proposed tier definitio n s. Table 4 -30: Revised Single-Family Residentia l Tier Definitions Single-Family Current Bimonthly Proposed Bimonthly Residential Tiers Tier Width Tier Width Tier 1 Tier 2 Tier 3 0-199 ccf 199+ ccf 0-20 ccf 21-56 ccf 56+ ccf Proposed Ba sis for Tier Widths Tier 1 max set equal to essential indoor needs Tier 2 max set equal to average summer b imonthly usage Use greater than average summer bimonthly usage 4.3 .3 .DERIVATION OF PROPOSED COMMODITY RATE S Proposed commodity rates are comprised of unit costs for the Supply, Base Delivery, Peaking, and Treatment cost causation components. Unit costs from Table 4-27 are used to provide the basis for the calculation of volumetric rates. However, peaking unit rates must first be differentiated by customer class, as these unit costs are not applied uniformly to each customer class and tier. Additionally, because recycled water customers are a homogenous class using water for irrigation , the Recycled volumetric rate is comprised solely of the Recycled Water unit cost, while all other volumetric rates are comprised of the other cost causation component unit costs listed above. Peaking Unit Rates Peaking costs represent the cost of providing Max Day and Max Hour flow capacity to each customer class and a re assessed on total usage . Table 4-31 combines the Max Day and Max hour costs in Table 4-28 into Peaking Costs. These costs are divided by total annual use by class and tie r to arrive at the Peaking unit cost for each. Table 4-31 : Peaking Unit Cost by Cl ass and Tier Customer Class Annual Use Peaking Costs Unit Cost (ccf) Single Family Residential Tier 1 1,154,921 $375,362 $0.33 Tier 2 801,599 $871,781 $1.09 Tier 3 811,703 $2,589,590 $3.19 Multi-Family Residential 188,531 $81,595 $0 .43 Landscape Irrigation 87,725 $197,906 $2.26 Non -Residential 728,397 $531,626 $0.73 City Potable Usage 96,327 $70,305 $0.73 3 The 20 ccf Single-Family Residential Tier 1 limit is based on an assumed 60 gallons per capita per day (GPCD) for essential water use needs and an average famil y of four. r N' fl W l WA ; r 68 of96 38 March 3, 2020, Item #4 Recycle d Water U nit Ra tes Recycled water customers pay the same bimonthly meter service charges as potable water customers. Table 4-32 shows the calculation of the recycled water commodity rate. The total revenue requirement (Line 1) is divided by the total recycled water consumption (Line 2) to arrive at the proposed FYE 2020 rate in Line 3. Line No. I 2 3 Table 4-32: Recycled Water Commodity Rate Calcu lation Total Recycled Water Revenue Requ iremen t Total Recycled Water Consu mption Propo sed FYE 2020 R ec ycled W ater Commodity Rate FYE2020 $1,018,181 251,093 $4.05 Table 4-33 shows the calculation of proposed FYE 2020 volumetric rates per ccfby custom er class and tier. Supply, Base Delivery unit rates are directly from Table 4-27. Peaking unit rates were establishe d in Table 4-31. The Recycled Water volumetric rate was established in Table 4-32. The differences between proposed FYE 2020 and c ur rent volumetric rates a re also shown. Table 4 -33: Derivation of the Commodity Rates ($/ccf} Bimonthly Supply Base Proposed Current Difference Customer Class Tie rs Delivery Peaking Treatment R Rate ($) ate Single Family Residential Tie r 1 20 $3.11 $0.53 $0.33 $0.61 $4.59 $5.36 -$0.77 Tier 2 56 $3.11 $0.53 $1.09 $0.6 1 $5.35 $5.36 -$0.01 Tier 3 56+ $3.11 $0.53 $3.19 $0.61 $7.45 $5.36 $2 09 Multi-Family Residential $3.11 $0.53 $0.43 $0.61 $4.69 $5.47 -$0.78 Landscape Irrigatio n $3.11 $0.53 $2.26 $0.61 $6.52 $5.47 $1.05 Non-Residentia l $3.11 $0.53 $0.73 $0.61 $4.99 $5.47 -$0.48 City Potable Usage $3.11 $0.53 $0.73 $0.61 $4 .99 $2.36 $2.63 Recycled Water $4.05 $4 .06 $4.92 -$0.86 39 w 69 of96 March 3, 2020, Item #4 4 .3.4.PROPOSED WATER RATE SCHEDULE The proposed rates derived in Table 4-29 and Table 4-33 are increased annually by the proposed revenue adjustments shown in Table 4-12. The resulting proposed rates for the study period are provided in Table 4-34 and Table 4-35. Table 4-34 , FYE 2020-2024 Proposed Water B imonthly Meter Service Charges Current March March March March March Meter Size Charge 2020 2021 2022 2023 2024 5/8" $42.28 $41.14 $43.00 $45.26 $47.64 $50.15 3/4" $42.28 $55.62 $58.13 $61 .19 $64.41 $67.80 1" $70.47 $84.58 $88.39 $93.04 $97.93 $103.08 11/2" $140.90 $156.96 $164.03 $172.65 $181.72 $191.27 2" $225.44 $243.82 $254.80 $268.18 $282.26 $297.08 3" $422.72 $518.89 $542.25 $570.72 $600.69 $632.23 4" $704.52 $924.25 $965.85 $1,016.56 $1,069.93 $1,126.11 6" $1,409.05 $1,894.22 $1,979.46 $2,083.39 $2,192.77 $2,307.90 8" $2,254.46 $3,486.72 $3,643.63 $3,834.93 $4,036.27 $4,248.18 Table 4-35: FYE 2020-2024 Proposed Wa t er Commodity Rates Customer Class Bimonthly Current March March M a rch March March Ti ers (cd) Rate 2020 2021 2022 2023 2024 Single Fa mily Res id e ntia l Tier 1 20 $5.36 $4.59 $4.80 $5.06 $5.33 $5.61 Tier 2 56 $5.36 $5.35 $5.60 $5.90 $6.21 $6.54 Tier 3 56+ $5.36 $7.45 $7.79 $8.20 $8.64 $9.10 M u lti-Fa mily Res identia l $5.47 $4.69 $4.91 $5.17 $5.45 $5.74 La ndscape I rri gation $5.47 $6.52 $6.82 $7.18 $7.56 $7 .96 No n -Resid e nt ia l $5.47 $4.99 $5.22 $5.50 $5.79 $6.10 City Po table Usage $2.36 $4.99 $5.22 $5.50 $5.79 $6.10 Recycl e d W ater $4.92 $4.06 $4.25 $4 .48 $4.72 $4.97 4.4 . Bill ln1pacts Figure 4-4 shows the impacts of the proposed rates on a hypothetical Single-Family Residential customer with a 3 / 4 " meter at different usage levels. Figure 4-5 shows the impacts on a hypothetical Non-Residential c ustomer with a I" meter and different levels of cons umption. I> , r 40 70 of96 March 3, 2020, Item #4 $1,600 Sl,400 $1,200 $1.000 S&Jo 5600 sm $200 so ■Y1,11,t',)\lf'1tlWI 11:11 .-.., i$J 11111•.i,rtt,t ... ,~ ,Jt_l,.11 lrrJ),1'1(~1 ))11(') 41 7 1 o f96 Figure 4-4: Si n g l e-Fa m il y Residen t i a l Wa t er Bill Impact Ana lysis S?S.&< S 101.Sl •• tnun11 .-,.._AA Sl•.1l ~2 s· (,i !> i) ~ itlm,r~ ltl-:.11, )1191,l '101'.> 'l (j~ SFR Impacts at Different Usage Level s -3/4" Meter -3-Tiered S149.,18 Slo)7Al ■■ 2\h1111I•, SWIUI. :>147.•11 S10\J " '-MO M SJ38.37 I I $140.GO .37111111~ $1411Hl S.lJ&-'.I $667,82 ~18)8 SJ.ii! .4•1 Sl./10.01 I I I Sl-H .U SS131B ",t1 ~w•(I\ 1~1111~'~ <;\.li].W 'il",,IR..'JJ $~1,:1.r.•~ ;t,:-1 r;) ... ;-~;i S.!fl!,-l u,, ISS Figure 4-5: Non-Residential W at e r Bill Imp ac t Analysis Non-Residential Impacts at Different Usage Leve ls -1 " Meter SHS 16$119.31 11 Ii II :>1JI ',H Sl ;9.1,; \l)ll ,£ ;,.:111.(1 311111.\ ;u,.~, ,Hl'Jij 'iJ ,l /.S ',):-1,J .i.4 o;,,,11111•\ ).?I,, l'.t S:>1'1 IJ ')\}) Ll'i 'i"787fl: )rnur~1 ,1•.o•JS $,l,ll)J!i, SI /"t 1• , ~ SJ.040.32 (.8,11).lfl l!Alorr~h '\Mb.18 St.n.a \ s, -.:i,..:oi 11.',. $316,. lf",(hrr,i, 5x,0"' $,i-1')(& )I l l1 J,. Sl,412.82 $1,116,'i1 J.0011,., ,;1,111, t,J $1.-Hl 81 S2% •~ lG,Y,'e SS08.07 s:..1u;s1 :5,~aq;n1 ct•1!H.l':I ",JJ }rt JS March 3, 2020, Item #4 5. Wastewater Rate Study 5.1. \iVastewater lTt ility F inancial P l an This section details the development of the five-year financial plan for City's wastewater utility. T his includes the determination of annu a l revenues requiJed from wastewater rates based on annual cash flow projections. Assu mptions and in puts related to projected revenues, operating expenses, capital expenditures are clearly outlined in the following subsections. 5 .1 .1. EXISTING RATE STRUCTURE ANO RATES The City bills every two months (bimonthly), resu lting in six total bills per year for each customer. The City's c urrent rates wen t into effect on March 1, 2019. The existing rate structure for wastewater customers consists of a uniform bimont hly fixed service charge for Single-Family residential customers. All other customers pay a fixed bimonthly service charge based o n meter size . The C ity's e xisting bimonthly service charges are shown below in Table 5-1. Tab le 5 -1: Existi ng Bimo nthly Wastewater Service Charges Customer Class Singl e-Family Residential Meter Size (flat) Non-Residential, Multi-Fami ly, & Mobile Home 5/8" 3/4" 1" 11/2" 2" 3" 4" 6" 8" CV2019 $21.34 $28.16 $28.16 $38.23 $63.44 $93.69 $17 4 .35 $265.07 $617.97 $819.62 Additionally, all c ustomers pay a commodity rate by customer class. These rates are shown in Table 5-2. Single- Famil y Residential customers pay a seven-tiered volumetric charge based on the customer's average winter water usage determined by taking 85% of the lowest winter water use averaged over the last three years. All other customers pay a uniform volumetric charge per unit of wastewater flow estimated as 90% of the customers ' bimonthly water use. 4 2 72 of96 March 3, 2020, Item #4 Ta ble 5 -2: Exist ing Bi month ly Co m modit y Rates ($/ccf wastewater) Custom er Cl ass Tier Width (ccf) CY 2019 Si ngle Family Res ide nt ia l Tie r 1 Tier 2 Tier 3 Tier 4 Ti er 5 Tier 6 Tier 7 Non-Residential, Multi-Fa mily, & Mobile Home Gene ral Commercial Med i um-Low Mediu m Medium-High High Ligh t Industry M ulti-Family & Mobi le home Churches Sc hools 5.1 .2 .ACCOUNT AND USAGE PROJECTIONS 0-5 $29.54 6-12 $52 .12 13-1 9 $78.45 20-26 $85.99 27-37 $101.04 38-50 $116.09 >51 $127.39 $4 .02 $4.60 $5.35 $6.85 $8.15 $4.22 $4.02 $4.02 $4.02 Table 5-3 shows the estimated number of wastewater accounts by customer class and meter size for FYE 20 19 through FYE 2024. The projections are based on acco unt data provided by the City for FYE 2018. The number of accounts is used to forecast the amount of fixed reven ue the City will receive from the bimonthly meter service charges. Table 5-3 : W astewater Accou nts Customer Class Meter Size FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Single Family Res ide ntia l 11,420 11,420 11,479 11,539 11,598 11,657 Non -Reside ntial, Multi-Fa mily, & M obile Home 5/8" 0 0 0 0 0 0 3/4" 123 123 123 123 123 123 1" 224 224 224 224 224 224 11/2" 166 166 166 166 166 166 2" 206 206 206 206 206 206 3" 16 16 16 16 16 16 4" 5 5 5 5 5 5 6" 1 1 1 1 1 1 8" 2 2 2 2 2 2 Total Non-Reside ntial, Multi-Fa mily, & Mobile Home 743 743 743 74 3 743 743 Table 5-4 projects the number of S ingle-Family Residential accounts per tier and the billed wastewater flow by class forthe study period based on FYE 2018 data. -4 3 73 of96 March 3, 2020, Item #4 Table 5-4 : Accou nts per Tier and Billed Wastewate r F low by Class (ccf) Customer Class FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Singl e Fa mily Res ident ial {Number of Accounts per Tier) Tie r 1 1,612 1,612 1,620 1,629 1,637 1,645 Tier 2 4,271 4,271 4,293 4,315 4,338 4,360 Tier 3 3,789 3,789 3,809 3,828 3,848 3,868 Tier 4 850 850 854 859 863 868 Tier 5 491 491 494 496 499 501 Tier 6 214 214 215 216 217 218 Tier 7 193 193 194 195 196 197 Total Number of Accounts 11,420 11,420 11,479 11,539 11,598 11,657 Non-Residential, Multi-Fa mily, & Mobil e Home Genera l Commercial 202,246 202,246 202,246 202,246 202,246 202,246 Medium -Low 46,867 46,867 46,867 46,867 46,867 46,867 Medium 7,952 7,952 7,952 7,952 7,952 7,952 Medium-High 516 516 516 516 516 516 High 35,502 35,502 35,502 35,502 35,502 35,502 Light Industry 35,816 35,816 35,816 35,816 35,816 35,8 16 Multi-Fam ily & Mobile home 179,261 179,261 179,261 179,261 179,261 179,261 Chu rch es 10,748 10,748 10,748 10,748 10,748 10,748 Schools 38,050 38,050 38,050 38,050 38,050 38,050 Total Billed Wastewater Flow (ccf) 556,957 556,957 556,957 556,957 556,957 556,957 5.1 .3 .REVENUES The City's wastewater revenues consist of operating revenues (i.e. wastewater rate revenues), other operating revenues, and non-operating revenues. Projected wastewater rate revenues under existing rates are calculated for the years FYE 2020 to FYE 2024 (Table 5-5) by multiplying current rates (Table 5-1 and Table 5-2) by the corresponding units of service (Table 5-3 and Table 5-4).-1 Projecting wastewater rate revenues under existing rates is necessary to e valuate the City's projected baseline financial position in the absence of a ny proposed rate increases. T able 5-5: Projecte d Operat ing Re ve nu es Un der Ex ist ing Was t e w ater R ates Operating Revenues FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Bi-Monthly Service Charges Single-Fam ily Res idential $1,431,611 $1,462,217 $1,469,813 $1,477,410 $1,485,007 $1,492 ,604 Non-Resid ential, Multi-Fa mily, & Mobile Hom e $283,309 $289,383 $289,383 $289,383 $289,383 $289,383 Bi-Monthly Flow Charges Sing le Fam ily Residential $4,344,481 $4,437,610 $4,460,665 $4,483,720 $4,506,775 $4,529,830 Non-Residential, Multi-Family, & Mobile Home $2,391,489 $2,431,972 $2,431,972 $2,431,972 $2,431,972 $2,431,972 Total $8,450,890 $8,621,183 $8,651,834 $8,682,486 $8,713,137 $8,743,789 J Fixed c harge revenues = [number of accounts/meters assessed] x [bimonthly rate] x [ 6 billing periods]. Volumetric charge revenues = [annual fl ow in CCF] x [volumetric rate per CCF]. 44 74of96 March 3, 2020, Item #4 Table 5-6 shows a s ummary of other revenues. T he other operating and non-operating revenues were projected beyond FYE 2020 budgeted amounts by holding constant through FYE 2024 Table 5 -6 : Projected Other Wastewater Reve nues Other Revenue FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Fees $22,230 $22,720 $22,720 $22,720 $22,720 $22,720 O th er $4 8,540 $63,00 0 $63,000 $63,000 $63,000 $63,000 M isce llaneous $6 00,360 $0 $0 $0 $0 $0 Total $671,130 $85,720 $8 5,720 $85,720 $8 5,720 $85,720 Table 5-7 shows a revenue s ummary for the study period based on revenues shown previously in Table 5-5 and Table 5-6. O nce again, operating reven ues shown in th is sectio n reflect projected wastewater ra te reven ues under e xisting rates in the absence of any rate increases over t he stu dy period . Table 5-7 : Wastewater Revenu e Summary Revenu es FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Ope rating Revenues $8,450,890 $8,621,183 $8,651,834 $8,682,486 $8,713,137 $8,743,789 Ot her Revenue $671,130 $85,720 $85,720 $85,720 $85,720 $85,720 Tota l $9,122,020 $8,706,903 $8,737,554 $8,76 8,20 6 $8,7 98,8 57 $8,8 29,509 5.1.4. O&M EXPENSES The City's operations and maintenance (O&M) expenses, shown in Table 5-8, are based o n the FYE 2020 City budget and projected o ut through FYE 2024. O&M expenses were projected beyond FYE 2020 by increasing FYE 2020 budgeted ex penses using the inflationary factors discussed in Table 3-1. Table 5 -8 Wastewater Operating Expenditures Summary Operating Expenditures FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Legislative & Administrative $372,947 $369,768 $380,861 $392,287 $404,055 $416,177 Finance Services $953,593 $1,051,669 $1,083,219 $1,115,716 $1,149,187 $1,183,663 Human Resources $178,498 $186,148 $191,732 $197,484 $203,409 $209,511 Development Services $247,668 $262,3 19 $270,189 $278,294 $286,643 $295,242 Publ ic Works $1,058,254 $1,157,381 $1,192,102 $1,227,866 $1,264,701 $1,302,643 Treatmen t $3,564,910 $4,421,733 $4,578,047 $4,739,759 $5,264,229 $5,449,893 Wastewater Disposal $969,260 $859,614 $889,925 $921,311 $953,811 $987,464 Wastewater Co llection $1,180,630 $1,304,423 $1,375,961 $1,441,136 $1,510,568 $1,584,610 Tota l Operating Exp enditur es $8,525,760 $9,613,0 55 $9,962,037 $10,313,854 $11,036,603 $11,429,203 5 .1 .5 . CAPITAL IMPROVEMENT PLAN T he City has developed a capital improvement plan (CIP) to address o ngoing wastewater system needs in each year t hrougho ut the study period. Detailed CIP expenditures i n each year are shown at the individual project leve l in Table 5-9. Prqject costs in all years throughout the study period were provided by City staff. 45 75 of96 March 3, 2020, Item #4 Table S-9: Wast ewater Ca pital Improvem ent Pl an FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Ongoing Projects Marti ncoit Road Sewer Upsize (MP CAP-01) ssso,ooo so so $0 $0 Subtotal Ongoing Projects $550,000 $0 $0 $0 $0 Proposed Projects Manhol e Rehabili tation SlS0,000 S169,000 $176,000 S183 ,000 $191,000 Sewer Line Repair Replace 16/17 (Exposed Sewer east o f Martincoit) Sl,000,000 $0 so so $0 Sewer Line Repair Replace $0 $281,000 $293,000 $305,000 S318,000 Butterfield T rail Sewer Upsi ze (MP CAP-02) $0 so $0 $0 $0 Sagewood Drive Sewer Upsize-Orchard Bend to Martincoit (MP CAP-04) $0 $0 $530,000 so $0 Treatment Plant Sludge Di scharge Study $0 $0 $0 $25,000 $0 Camino Del Valle MCC Rebuild $0 $0 $0 $50,000 so Camin o Del Valle Lift Stati on Upgrades (MP CAP-11) so so so S45,000 so Old Coach Lift Station Capacity Upgrade (MP CAP-10) so $0 so $0 $660,000 Replace generator at Old Coach Lift Stati on $0 $0 $0 $0 $125,000 Subtotal Proposed Projects $1,150,000 $450,000 $999,000 $608,000 $1,294,000 Total CIP $1,700,000 $450,000 $999,000 $608,000 $1,294,000 5 .1 .6 . RECOMMENDED RESERVE POLI C IES To e nhance financial management transparency and financial risk management, Raftelis recommends the Wastewater Utility to maintain the follow ing reserves. The following sections describe our recommendations in detail for each reserve. 5 1.6 .1. Operating Reserve The purpose of an operating reserve is to provide working capital to s upport the operation, maintenance, and administration of the utility. From a risk management perspective, the O&M reserve supports the City 's cash flow needs during normal operations and additionally ensures that operations can contin ue should there be significant events that impact cash flows. As it is unlikely for a utility to perfectly predict the revenues and revenue requirements for each billing period, a reserve set aside to hedge the risk of monthly negative cash positions is prudent in financial planning. Another factor to consider when creating a cash flow reserve is the frequency of billing. A utility that bills once a month would require a lower minimum reserve than a utility that bills bimonthly or twice a year. Raftelis recomm e nds that the City revise its current o perating reserve target of 20% of operating expenditures to a minimum of 90 days of operating expenses and establish a target balance of I 20 days to ensure adequate working capital for operating expenses . T he City bills bimonthly; thu s 120 days provides sufficient working capital to account for time differential between when expenses occur and when revenues are collected. Additio nally , this accounts for revenues varying seasonally while expenses remain relatively static. 5 1.6 2 Capita l Rep lac e me nt Reserve Adequate and timely capital replacement planning is a critical task to ensure reliability and sustainability of the wastewater system. Capital reserves a re used to provide fundin g for capital expenditures due to the capital- intensive nature of the wastewater system . The City does not c urrently maintain a separate capital replacement reserve. Raftelis recommends the City adopt a policy using the estimated 5-year average CIP as the target balance. In FYE 2020, this average is about $1.0 million. 5 .1.6.3. Recom mended T ota l Rese rve Targets Table 5-10 summarizes the proposed reserve policies for the C ity . NA 76 of96 46 March 3, 2020, Item #4 Table 5-10 Wastewater Proposed Reserve Targets Reserve Operating Capital Replacement 5 .1 .7 .STATUS QUO FINAN C IAL PLAN Policy Minimum: 90 days Target: 120 days 5-Year Average CIP Table 5-11 shows the operating cash flow detail for the City during the study period under current rates with n o adjustments. As shown in Lin e 22, the City is unable to meet its e xpenses beginning in FYE 2020 due to increasing O&M costs and capital projects. Table 5-11: Wastewater Financial Plan under Current Rates Line Revenue FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 1 Rate Revenue $8,621,183 $8,651,834 $8,682,486 $8,713,137 $8,743,789 2 Other Revenue 3 Fees $22,720 $22,720 $22,720 $22,720 $22,720 4 Other $63,000 $63,000 $63,000 $63,000 $63,000 5 Total Other Revenue $85,720 $85,720 $85,720 $85,720 $85,720 6 Total Revenue $8,706,903 $8,737,554 $8,768,206 $8,798,857 $8,829,509 7 Operating Expenditures 8 Legislative & Adm inis trative $369,768 $380,861 $392,287 $404,055 $416,177 9 Finance Serv ices $1,051,669 $1,083,219 $1,115,716 $1,149,187 $1,183,663 10 Human Resources $186,148 $191,732 $197,484 $203,409 $209,511 11 Development Services $262,319 $270,189 $278,294 $286,643 $295,242 12 Pub lic Works $1,157,381 $1,192,102 $1,227,866 $1,264,701 $1,302,643 13 Treatment $4,421,733 $4,578,047 $4,739,759 $5,264,229 $5,449,893 14 Wastewater Disposal $859,614 $889,925 $921,311 $953,811 $987,464 15 Wastewater Collection $1,304,423 $1,375,961 $1,441,136 $1,510,568 $1,584,610 16 Total Operating Expenditures $9,613,055 $9,962,037 $10,313,854 $11,036,603 $11,429,203 17 Debt Service & Capital Projects 18 Rate Funded Capita l Projects $1,700,000 $450,000 $999,000 $608,000 $1,294,000 19 New Pro posed Debt $0 $0 $0 $0 $0 20 Total Debt Service $1,700,000 $450,000 $999,000 $608,000 $1,294,000 21 Total Expenses $11,313,055 $10,412,037 $11,312,854 $11,644,603 $12,723,203 22 Net Cashflow ($2,606,152) ($1,674,482) {$2,544,648) ($2,845,746) ($3,893,694) Table 5-12 shows th e City's fund balances over the study period under current rates with no adjustments. The o perating reserve target is equal to 120 days of operating and the capital reserve target is equa l to the 5-year average CIP. The City's operating fund balance will not meet the operating reserve target (Line 5) beginn ing in the FYE 2024 and will not meet the capital replacement re serve target beginnin g in FYE 2024 (Line 12). T h e C ity c urrently does not have capital res erves. -17 77 of96 March 3, 2020, Item #4 Table 5-12: W ast ewat e r Project ed Fu nd Ba la nces U nder Cur rent Rates Line Operating Fund (5200) FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 1 Beginning Balance $15,459,676 $11,984,890 $10,431,986 $7,833;921 $4,964,484 2 Net Cashflow ($2,606,152) ($1,674,482) ($2,544,648) ($2,845,746) ($3,893,694) 3 Interest Income $141,566 $121,578 $101,699 $75,764 $42,824 4 Tr ansfers from (to) Captial Replacement ($1,010,200) $0 ($155,116) ($99,454} $0 5 Ending Bal ance $11,984,890 $10,431,986 $7,833,921 $4,964,484 $1,113,614 6 Ta rget Reserve Balance $3,204,352 $3,320,679 $3,437,951 $3,678,868 $3,809,734 7 Capita l Replacement Fund FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 8 Beginning Balance $0 $1,010,200 $1,010,200 $1,165,316 $1,264,770 9 Transfers from Operating $1,010,200 $0 $155,116 $99,454 $0 10 New Debt Proceeds $0 $0 $0 $0 $0 11 Debt Funded Capital Projets $0 $0 $0 $0 $0 12 Ending Balance $1,010,200 $1,010,200 $1,165,316 $1,264,770 $1,264,770 13 Target Reserve Balance $1,010,200 $960,585 $1,165,316 $1,264,770 $1,447,133 5.1.8. PROPOSED FINANCIAL PLAN Balancing the need for the City to meet its revenue requirements while mitigating in creases to ratepayers' cost of service, Raftelis worked with staff to determine the revenue adjustment schedu le in Table 5-13. All revenue adjustments in the rate model are set for M arch of each year; however , the City wi.U implement the first revenue adjustment in March 2020 a nd subsequen tly in January of each fiscal year. Table 5-13: Wast ewater Prop osed Reve n ue Adj ust ments FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 March 6.3% March 6.3% March 6.3% March 6.3% March 6.3% Table 5-14 incorpo rates the proposed revenue adj ustments into the financial plan. As noted above, the C ity needs to balance its revenue needs with mitigating rate increases for c ustomers . While the proposed financial plan still s hows a negative net cash flow in FYE 2020 and FYE 2023 (Line 22), the City's wastewater reserves exceed the proposed target. The City will rely on reserves to fund the balance of expenditures rather than significantly increase its rates in deficit years. This was a strategic decision made by the C ity in preparation for funding the City's share of San Diego's Pure Water Project. These funds have bee n set aside to help mitigate impacts to rate payers. The reserves are being gradually drawn down to pay the City's share of the Pure Water Program. 48 78 of96 March 3, 2020, Item #4 Table 5 -1 4 W astewater Proposed Financial Plan Line Revenue FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 1 Rate Revenue $8,802,228 $9,390,035 $10,016,970 $10,685,629 $11,398,783 2 Other Revenue 3 Fees $22,720 $22,720 $22,720 $22,720 $22,720 4 Other $63,000 $63,000 $63,000 $63,000 $63,000 5 Total Other Revenue $85,720 $85,720 $85,720 $85,720 $85,720 6 Total Revenue $8,887,948 $9,475,755 $10,102,690 $10,771,349 $11,484,503 7 Operating Expenditures 8 Legislat iv e & Adm inistrative $369,768 $380,861 $392,287 $404,055 $416,177 9 Finan ce Services $1,051,669 $1,083,219 $1,115,716 $1,149,187 $1,183,663 10 Human Resources $186,148 $191,732 $197,484 $203,409 $209,511 11 Development Servi ces $262,319 $270,189 $278,294 $286,64 3 $295,242 12 Pu bl ic Works $1,157,381 $1,192,102 $1,227,866 $1,264,701 $1,302,643 13 Treatment $4,421,733 $4,578,047 $4,739,759 $5,264,229 $5,449,893 14 Wastewater Disposal $859,614 $889,925 $921,311 $953,811 $987,464 15 Wastewater Collection $1,304,423 $1,375,961 $1,441,136 $1,510,568 $1,584,610 16 Total Operating Expenditures $9,613,055 $9,962,037 $10,313,854 $11,036,603 $11,429,203 17 Debt Service & Capital Projects 18 Rate Fun ded Cap ital Projects $1,700,000 $450,000 $999,000 $608,000 $1,294,000 19 New Proposed Debt $0 $0 $0 $0 $0 20 Total Debt Service $1,700,000 $450,000 $999,000 $608,000 $1,294,000 21 Total Expenses $11,313,055 $10,412,037 $11,312,854 $11,644,603 $12,723,203 22 Net Cashflow ($2,425,107) ($936,282) ($1,210,164) ($873,254) ($1,238,701) Table 5-15 shows the City's projected fund balances over t he study period . The operating reserve target is equal to 120 days of operating expenses to mitigate against any potential cash flow risks or unexpected O&M costs . The capital reserve target is equal to the 5-year average CIP. Under the recommended plan, the City will draw down its current reserves to fund operating and capital costs but will meet the 5-year financial reserve targets. Table 5-15: Wastewater Projected Fund Bal ances Under Proposed Rates Line Operating Fund {5200) FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 1 Beginning Ba lance $15,459,676 $12,166,840 $11,357,647 $10,109,995 $9,245,673 2 Net Cashflow ($2,425,107) ($936,282) ($1 ,210,164) ($873,254) ($1,238,701) 3 Interest Income $142,471 $127,089 $117,628 $108,387 $98,911 4 Transfers from (to) Captia l Replacement ($1,010,200) $0 ($155,116) ($99,454) ($182,363) 5 Ending Balance $12,166,840 $11,357,647 $10,109,995 $9,245,673 $7,923,521 6 Target Reserve Balance $3,204,352 $3,320,679 $3,437,951 $3,678,868 $3,809,734 7 Capita l Replacement Fund FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 8 Beginning Balance $0 $1,010,200 $1,010,200 $1,165,316 $1,264,770 9 Transfers from Operating $1,010,200 $0 $155,116 $99,454 $182,363 10 New Debt Proceeds $0 $0 $0 $0 $0 11 Debt Funded Capital Projets $0 $0 $0 $0 $0 12 Ending Balance $1,010,200 $1,010,200 $1,165,316 $1,264,770 $1,447,133 13 Target Reserve Balan ce $1,010,200 $960,585 $1,165,316 $1,264,770 $1,447,133 Figure 5-1 t hro ugh Figure 5-3 display the F inancial Plan in graphical format. Figure 5-1 illustrates the operating position of t he City, where expenses, inclusive of reserve fu nding, are shown by stacked bars; and total revenues at both current rates and proposed rates are shown by the horizontal trend lines. Figure 5-2 summarizes the projected 79 of96 March 3, 2020, Item #4 CIP and its funding sources (100% Rates/Reserves funded). Figure 5-3 displays the ending total reserve balance for the wastewater utility, inclusive of operating and capital funds. The horizontal trend lines indicates the minimum and target reserve balances and the bars indicate e nding reserve balance. No new debt is proposed to be issued as part of the proposed five-year financial plan. It should be noted that reserves are being drawn down to fund capital expenses every year. The rese1ves exceed the target because the City is saving rese1ves to fund the Pure Water Program from the City of San Diego. This program is estimated to cost the City approximately $4 7M over the next ten years. VI $14 c:: § 512 :! $10 $8 $6 $4 52 so ·$2 ·S4 Figure 5-1 : Wastewater Operating Financial Plan at Proposed Rates Operating Financial Plan FYE 2020 FYE 2021 FY£2022 FYE 2023 FYE 2024 -Operating Expenses -Rate Funded Capital -Debt Service Net Cashflow Current Revenue Proposed Revenue Figure 5-2 ; Proposed Wastewater Capital Improvement Plan and Funding Source Cap ital Funding Sources .,, $1.8 c:: Sl.70 § $1.6 2 $1.4 $1.29 $1.2 $1.00 $1.0 $0.8 $0.61 $0.6 S0.45 $0.4 $0.2 $0.0 FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 Debt Funded ■ Rates/Reserves Funded e Total CIP w AJ\I !<'A 80 of96 5 0 March 3, 2020, Item #4 s1 r 81 of 96 $10 $8 $6 $4 $2 $0 Figure 5-3 : Projected Ending Wastewater Reserves at ProJected Rates Operating & Capital Reserves FYE 2020 FYE 2021 FYE 2022 FYE 2023 FYE 2024 -Total Reserves -Minimum Reserve -Target Reserve March 3, 2020, Item #4 5.2. Wastewater Cost of Service Analysis 5 .2 .1 . COST OF SERVICE METHODOLOGY The first step in the COS analysis process is to determine the revenue requirement, which is based on the results of the wastewater financial plan and the proposed revenue adjustments. The framework and methodology utilized to develop the COS analysis and to apportion the revenue requirement to each customer class and tier is informed by the processes outlined in the WEF Manual of Practice 27 .. COS analyses are tailored specifically to meet the unique needs of each wastewater system. However, there are fo ur distinct steps in every analysis to recover costs from customer classes in an accurate, equitable, and defensible manner: Cost functionalization: O&M expenses and capita l assets are categorized by their fun ction in the system. Functions include wastewater collection, disposal , treatment, administration , pumps, equipment, etc. Cost causation component allocation: the functionalized costs are then a llocated to cost causation components based on their burden on the system. The cost causation components include flow, chemical oxygen demand (COD), total suspended solids (TSS), customer, and general. The revenue requirement is allocated accordingly to the cost causation components and results in the total revenue requirement for each cost causation component. 1 Unit cost development: the revenue requirement for each cost ca usation component is divided by the appropriate units of service to determine the unit cost for each cost causation component. ➔ Revenue requirement dis tribution: the unit cost is utilized to distribute the revenue requirement for each cost causation component to customer classes and tiers based on their individual service units. The City's customer classes include Residential, Commercial based on strength, Industrial and Schools. 5 .2.2 . REVENUE REQUIREMENT T he revenue requirement for the proposed rates will be based on FYE 2020, designated the Test Year. Table 5-16 s hows the revenue requirement derivation with the total revenue required from rates. The totals shown in the "Operating" and "Capital" columns are the total O&M and capital revenue requirements, respectively, that are to be recovered through rates . The operating costs (Line 6) flow from Table 5-8. The Debt Service category (Line 10) represents both replacement capital projects (Table 5-9) and any proposed debt. Note there is no debt issuance proposed for FYE 2020. Revenue offsets are composed of various miscellaneous, non-rate revenues, shown in Table 5-6. To arrive at the rate revenue requirement, we subtract these revenue offsets from the combined operating and debt service costs . The adjustments for cash balance represent the drawdown of reserves and the adjustment to annualize the rate increase (Line 18) is due to the mid-year proposed revenue adjustment occurring in March 2020 . These are then combined to arrive at the total annual revenue requirement from rates. This is the amount that the City's rates are designed to collect, for a full year, in the "Total" column at Line 20. 5..c 82 of96 March 3, 2020, Item #4 Table 5 16. Wastewater Revenue Require!T"e11 1 Line Revenu e Requirements Operating Capital Total 1 O perating Co sts 2 Treatmen t $4,421,733 $4,421,733 3 Wastewater Disposal $859,614 $859,614 4 Wastew ater Co llection $1,304,423 $1,304,423 5 Other O&M $3,027,285 $3,027,285 6 Subtotal Operating Costs $9,613,055 $0 $9,613,055 7 Debt Service 8 Rate Fun d ed Ca pi ta l Projects $1,700,000 $1,700,000 9 New Proposed Debt $0 $0 10 Subtotal Debt Service $0 $1,700,000 $1,700,000 11 Total Revenue Require ments $9,613,055 $1,700,000 $11,313,055 12 Less : Revenue Offsets 13 Fees $22,720 $22,720 14 Other $63,000 $63,000 15 Total Revenue Offsets $85,720 $0 $85,720 16 Less : Adjustments 17 Adjustment fo r Cash Ba lance $2,425,107 $2,425,107 18 Adjustment for M id-Year Increase ($362,090) ($362,090) 19 Total Adjustments $2,063,018 $0 $2,063,018 20 Total Revenue Requireme nt from Rates $7,464,317 $1,700,000 $9,164,317 5.2.3. MASS BALANCE A cost of service analysis req uires that costs are assigned to customers in proportion to their loadings. Customers are divided into different classes as shown in Table 5-2. Since measurement of wastewate r flow is expansive and prone to errors, wastewater flow is not measured for most customers. To determine wastewater flow , a mass balance analysis is done by taking the total tlow and strength of the wastewater intluent into the METRO plant and reducing that by the wastewater loadings of the Ci ty's non - residential c ustomers and inflow and infiltration (l&l). A small quantity of wastewater is estimated to result from 1&1, which is water that enters the collection system during rain-related events , run-o ff, e tc. T&T is estimated to be under 2% of the total influent. Multi-family and mobile home customers' wastewater flow is calculated based on 75% of bimonthly water use for accounts without a landscape meter a nd 85% of bimonthly water use for accounts with a landscape meter. Non- residential customers' wastewater flow is calculated based on 75%, 85%, or 90% of bimonthly water use dep ending on customer class . Wastewater flow for schools is estimated based on the average flow per student per day using 75% or 85% of the water use from the March/ April billing period. Residential flow can be estimated after reducing the total wastewater influent by I&I a n d estimated non-residential wastewater flow. Table 5-17 s hows the total annual units of flow and strength for each customer class based on the results of the mass balance a nalysis. Non-residential loadings for COD and TSS in pounds per year (lbs/year) were calculated based on wastewater flow and sewage strength classifications provided by City staff for different user classifications (e .g. car washes, hotels, restaurants, etc .). Multi-Family and mobile home loadings for COD and TSS in pounds per year (lbs/year) were calculated based on wastewater flow and the resid ual resi dential strength of 622 and 278 mg/1 of COD and TSS, respective ly. The estimated Single-Family residential wastewater flow was derived by s u btracting the Multi-Family and mobile home flow from the Net Residential flow. The estimated Single-Family SJ 83 of96 March 3, 2020, Item #4 residential wastewater flow is 55 gallons per capita per day (GPCD) based on an average ho usehold density of approximately 3.19 people . 55 GPCD of wastewater flow is the provisional standard for domestic use in th e state of Cali fornia 5 . The residential strength o f 622 and 2 78 mg/1 of COD and TSS , respectively , is a lso reasonable based o n the residen tial wastewate r flow. Table 5-17: M ass Bala nce An a lysis Flow (mgd) COD (mg/L) TSS (mg/L) Flow (ccf) COD (lbs/year) TSS (lbs/year) Total Plant Influent 3.20 601 261 1,561,393 5,855,864 2,541,252 Less: l&I 0.06 so so 31,230 9,747 9,747 Net Plant Influent 3.14 551 211 1,530,163 5 ,846,117 2,531,504 Non-Residential General Commercial 0.359 365 144 174,949 399,167 157,563 Medium-Low 0.096 606 256 46,867 177,250 74,949 Medium 0.016 1,061 307 7,952 52,702 15,240 Medium-High 0.001 2,529 165 516 8,145 531 High 0 .073 2,096 712 35,502 464,577 157,786 Light Industry 0 .073 440 220 35,816 98,379 49,189 Industrial Special User 0 .055 440 220 26,812 73,648 36,824 Go vernment & Membership Organizations 0 .001 286 110 485 866 333 Ch urches 0.022 385 192 10,748 25,833 12,917 Elementa ry School 0 .032 286 110 15,836 28,274 10,875 Secondary & High School 0.046 288 110 22,214 39,967 15,255 Subtota l Non-Res idential Flow 0.77 580 225 377,696 1,368,808 531,461 Net Residential Flow 2.36 622 278 1,152,467 4,477,309 2,000,043 Single Family Resid en ce 1.99 973,206 3,781,039 1,689,015 Multi-Family & Mobile home 0.37 179,261 696,269 311,028 5.2.4.FUNCTIONALIZATION AND ALLOCATION OF EXPENSES After determining the revenue requirement, the next step of the COS analysis is to a ll ocate the O&M e xpe nses a nd capital assets to the fo llowing funct ions: Legislative &Administration -C ity overhead costs associated with the management of the utility Finance Services -costs associated w ith c ustom er services, finance, and support services Human Resources -City overhead costs associated with human resources Wastewater Collection -costs of collecting wastewater Public W orlcs -costs associated with operations and main tenance of the utility Wastewater Dis posal -costs o f transporting wastewater to METRO Treatment -represents costs o f waste water treatment T he functionalization of costs allows for the alloca tion of costs to the cost causatio n components, whi ch include: I Flow -costs associated with the amount of wastewater flow entering the collection system 2 COD -th e costs associated with the amo unt of o rgani c compounds in wastewater. Higher strength wastewater is more costly to treat. '\ TSS -costs associated w ith the a mount of s uspended solids in wastewater. Higher suspended solids a re a lso more costly to treat. 4 Cu stomer -costs associated with customer service a nd billing 5 General -costs that do not have any direct cost ca usation ; California Senate Bill No. 7, Chapter 4 84of96 March 3, 2020, Item #4 5.2.5 .ALLOCATION OF COSTS As detailed in Section5.2. l, functional izing costs allows us to better distribute costs to the cost causation components. Table 5-18 s hows the function categori es used in this study in Column A. Columns B through F show the cost causation components. For example, all costs allocated to the Public Works function (Colu mn A, Line 5) are initially allocated to the G e neral cost causation com ponents (Column F, Line 5).Allocation of treatment costs is based on the allocation of those costs provided by the City of San Diego. Table 5-18 shows first the percent distributions, then dollar a ll ocations of each O&M cost. Line 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Table 5-18: Wastewater O&M Cost Allocations O&M Allocation A Legislative & Administrative Fi nance Services Human Resources Development Services Public Works Treatment Wastewater Disposal Wastewater Collection O&M Allocation Legis lative & Adm inistrative Finance Services Human Resources Development Services Public Works Treatment Wastewater Disposal Wastewater Collection Total O&M Expenses O&M Allocotion Flow B 48% 100% 100% Flow $0 $0 $0 $0 $0 $2,131,275 $859,614 $1,304,423 $4,295,312 45% COD C 28% COD $0 $0 $0 $0 $0 $1,215,977 $0 $0 $1,215,977 13% TSS D 24% TSS $0 $0 $0 $0 $0 $1,074,481 $0 $0 $1,074,481 11% Customer E 50% 50% Customer $184,884 $525,835 $0 $0 $0 $0 $0 $0 $710,719 7% General F 50% 50% 100% 100% 100% Genera l $184,884 $525,835 $186,148 $262,319 $1,157,381 $0 $0 $0 $2,316,567 24% Total G 100% 100% 100% 100% 100% 100% 100% 100% Total $369,768 $1,051,669 $186,148 $262,319 $1,157,381 $4,421,733 $859,614 $1,304,423 $9,613,055 100% Table 5-I 9 distributes the functionalized capital asset valu es to cost causation factors similar to Table 5-18 and shows the r esu lting percent and dollar allocations of th e different capital assets. Capital costs are allocated based on the system assets because capital costs are incurred to refurbish and replace system assets. Using system assets takes a longer-term view of the allocations of capital costs and p rovides a consistent allocation of costs from year to year even if the capital costs associated with different types of system assets c hange every year. 55 85 of96 March 3, 2020, Item #4 Table 5 19: Wastewater Capital Cost Allocations Line Capital Asset Allocation Flow COD TSS Customer General Total A B C D E F G 1 General 100% 100% 2 Land & Easement 100% 100% 3 Pu m ps 100% 100% 4 Collection & Transm ission 100% 100% 5 Treatment 100% 100% 6 Administr ation 100% 100% 7 Bu ildings & I mprovements 100% 100% 8 Equipment 100% 100% 9 10 Capital Asset Allocation Flow COD TSS Customer General Total 11 Genera l $2,636 $0 $0 $0 $0 $2,636 12 Land & Easement $76,797 so so $0 so S76,797 13 Pumps $2,288,427 so $0 so $0 S2,288,427 14 Collection & Transm iss ion $9,497,758 so $0 $0 so $9,497,758 15 Trea t ment $0 $0 $0 $0 $0 $0 16 Adm inistration $0 so $0 $0 so $0 17 Buildings & Improvements $0 $0 $0 $0 $0 $0 18 Equip m en t $570,280 so $0 $0 $0 S570,280 19 Total Capital Assets $12,435,899 $0 $0 $0 $0 $12,435,899 20 Capital Asset Allocation 100% 0% 0% 0% 0% 100% The goal of allocating the costs a nd asset values in Table 5-18 and Table 5-19 is to allocate the total O&M costs and capital assets to the different cost causation components . This results in a percent distribution shown in the last line each of Table 5-18 and Table 5-19 . Table 5-20 summarizes those cost a llocations. Table 5-20 : Wastewater Cost Allocation Distribution Summary Function Rationa le Flow COD TSS Customer General Total O&M O&M Ex penses 45% 13% 11% 7% 24% 100% Capita l Cap ital Assets 100% 0% 0% 0% 0% 100% tl J t" 10 AN • WA tV'i/ '5 6 86 of96 March 3, 2020, Item #4 5.2.6. UNITS OF SERVICE Table 5-21 s hows the flow, strength, and accounts data for all customer classes. The Flow, COD, and TSS data are derived from the mass balance in Table 5-17 . The residential and non-residential customer units in Lines 2 t hrough 13 are from Table 5-3 . The school units in Line 15 and 16 are based on the number of students in each grade, or average daily attendance (ADA), provided by the City. Table 5-21 : Wastewater Customer C lass Data Line Customer Class Flow (cd) COD (lbs/yea r) TSS (lbs/year) Customer Units Bill s 1 Residential 2 Single Family Res idence 973,206 3,781,039 1,689,015 11,420 68,520 3 Multi-Family & Mobile home 179,261 696,269 311,028 154 924 4 Su btotal Residential 1,152,467 4,477,309 2,000,043 11,574 69,444 5 Non-Residentia l 6 General Commercial 174,949 399,167 157,563 325 1,950 7 Medium-Low 46,867 177,250 74,949 94 564 8 Medium 7,952 52,702 15,240 20 120 9 Medium-High 516 8,145 531 8 48 10 High 35,502 464,577 157,786 56 336 11 Light Ind us t ry 35,816 98,379 49,189 18 108 12 Indust ria l Special User 26,812 73,648 36,824 5 30 13 Government & Membership Organizations 485 866 333 4 24 14 Churches 10,748 25,833 12,917 35 210 15 Elementa ry School 15,836 28,274 10,875 5,408 108 16 Secondary & High School 22,214 39,967 15,255 5,224 36 17 Subtotal Non-Residential 377,696 1,368,808 531,461 11,197 3,534 18 Total 1,530,163 5,846,117 2,531,504 22,771 72,978 5.2.7.ALLOCATION OF REVENUE REQUIREMENTS TO COST CAUSATION COMPONENTS Table 5-22 shows the allocation of revenue requirements from Table 5-16 to the cos t causation components unit cost derivations. The operating revenue requirement shown in Column F, Line I of is equal to the operating revenue req uirement (Line 20) in Table 5-16. T he operating revenue require me nt is a llocated to the cost ca usation components using the resulting O&M allocation from Table 5-20. Similarly, the capital revenue requirement in Column F , Line 2 is equal to the capital revenue requirement (Line 20) in Table 5-16 and is allocated to the cost causation factors per Table 5-20. General costs, shown on Line 4 , which cannot be tied to a specific function are redistributed in proportion to the resulting allocations of the other cost causation components. The total adjusted cost of service (Line S) is divided by the relevant units of service from Table 5 -21 in Line 7 to calculate the unit cost (Line 9 a nd Line J 0). For example, the unit cost for the F low component is determined by dividing the total flow cost by total estimated wastewater flow in ccf, while annual Customer costs are divided by the estimated number of bills in each year (number of customers times six bills per year). These unit costs will next be used to distribute the cost ca usation components to the customer classes. 57 11 87 of96 March 3, 2020, Item #4 Table 5-22 Wastewater Unit Cost Calculation Line Flow coo TSS Customer General Total A B C D E F 1 Operating Cost $3,335,212 $944,178 $834,310 $551,857 $1,798,761 $7,464,317 2 Capital Cost $1,700,000 $0 $0 $0 $0 $1,700,000 3 Total Cost of Service $5,035,212 $944,178 $834,310 $551,857 $1,798,761 $9,164,317 4 Allocatio n of General Costs $1,229,662 $230,580 $203,749 $134,770 ($1,798,761) $0 s Adjusted Cost of Service $6,264,873 $1,174,758 $1,038,059 $686,627 $0 $9,164,317 6 7 Units of Service 1,530,163 5,846,117 2,531,504 72,978 8 Units cd lbs/yr lbs/yr bills/yr 9 Unit Cost $4.09 $0.20 $0,41 $9.41 10 Unit s ccf lbs/yr lbs/yr per bimonthly bill I y I\N N -; E'/'IA t C1, f .58 88 of96 March 3, 2020, Item #400 \t) 0 .... \t) O'I 5.2.8. DISTRIBUTION OF COST CAUSATION COMPONENTS The final step in the cost of service analysis is to distribute the cost causation components to the user classes using the unit costs derived in Table 5-22, thereby arriving at the cost to serve each customer class. Table 5-23 shows the cost allocation to each class. To derive the cost to serve each class, the unit costs from Table 5-22 are multiplied by the service units shown in Table 5-21 for each customer class. For example, the flow costs for General Commercial usage is calculated by multiplying the flow unit cost by that class' wastewater flow. Similarly, the Customer costs are derived by multiplying the Customer unit cost by the total number of bills by class in each year. Similar calculations yield the total cost to serve each user class, as shown in the last column of Table 5-23. We have now calculated the cost to serve each user class and can proceed to derive rates that collect the cost to serve each class. Table 5-23: Allocation of Costs to Customer Classes Customer Class Flow COD TSS Customer Total Residential Single Family Residence $3,984,551 $759,787 $692,591 $644,683 $6,081,613 Multi-Family & Mobile home $733,938 $139,913 $127,539 $8,694 $1,010,083 Non-Residential General Commercial $716,286 $80,211 $64,610 $18,347 $879,454 Medium-Low $191,884 $35,618 $30,733 $5,306 $263,541 Medium $32,555 $10,590 $6,249 $1,129 $50,524 Medium-High $2,111 $1,637 $218 $452 $4,418 High $145,355 $93,355 $64,701 $3,161 $306,573 Light Industry $146,638 $19,769 $20,170 $1,016 $187,593 Industrial Special User $109,775 $14,799 $15,100 $282 $139,956 Government & Membership Organizations $1,986 $174 $137 $226 $2,523 Churches $44,006 $5,191 $5,297 $1,976 $56,469 Elementary School $64,837 $5,682 $4,459 $1,016 $75,994 Secondary & High School $90,950 $8,031 $6,255 $339 $105,576 Subtotal Non-Residential $1,546,384 $275,058 $217,929 $33,250 $2,072,621 Total COS $6,264,873 $1,174,758 $1,038,059 $686,627 $9,164,317 59 March 3, 2020, Item #4 5 .3 . Waste,vater Rate Developrnent This section includes the calculation of wastewater rates and the results of the study. Rates and charges are designed for the study period, FYE 2020 to FYE 2024. Rates and charges in the rate model are assumed to be implemented in March of each year; however, the City w ill implement the first revenue adjustment in March 2020 and subsequently in January of each fiscal year. 5 .3 .1.DERIVATION OF PROPOSED BIMONTHLY FIXED CHARGE We recom mend that the City revises its current bimonthly fixed charges shown in Table 5-1 to a uniform bimonthly fixed c harge for a ll customer classes except for schools. Raftelis recommends recovering the elementary and secondary school customers through the commodity rate. Table 5-24 shows the derivation of the uniform bimonthly fixed charge for a ll customer classes except for schools. More than 50% of the costs of the wastewater utility are fixed; therefore, to increase revenue stability, the City Council decided to increase the revenue collected from fixed charges to 30% from the current 20%. The bimonthly fixed charge was calculated by multiplying the total cost of service for the Single-Family residential customers (Column B) by the 30% ftxed revenue percentage (Col um n C) to arrive at th e amount of revenue to be collected by the fixed charge (Column D). The fixed charge allocation was then div ided by the annual n umber of Single-Family residential bills (Colu mn E) to arrive at the bimonthly fixed charge (Column F). Table 5-24: Denvation of the Wastewater Bimonth ly Fixed Charge Customer Class A Single-Fami ly Residentia l cos B $6,081,613 Fixed Revenue Fixed Charge Percentage Allocation C 30% D $1,824,484 5 .3.2. REVISIONS TO COMMODITY RATES Bills E 68,520 Bimonthly Fixe d Ch arge F $26.63 Single-Family residential customers currently pay a seven-tiered volumetric char ge based on the 3-year average of the customer's lowest winter water usage each year. Raftelis recommends revising the vol umetric c harge for Single- Family residential customers to a uniform volumetric charge based on the customer's average winter water use. AdditionalJy , Raftelis recommends capping billed wastewater flow to 24 ccfbimonthly. This cap was determined by examining the average bimonthly winter water use of wastewater customers and comparing it to the total wastewater flow calculated to be discharged by residential customers as shown in Table 5-17. Raftelis recommends retaining the uniform commodity rate for all other customer classes. II F V' A GO 90 of96 March 3, 2020, Item #4I.O ... 0 ... I.O 0\ 5.3.3. DERIVATION OF PROPOSED COMMODITY RA TES Table 5-25 shows the derivation of the proposed bimonthly commodity rates. The commodity rate for each customer class is calculated using the cost of service by customer class from Table 5-23 and the proposed bimonthly fixed charge from Table 5-24. First, the bimonthly fixed charge (Column C) is multiplied by the number of annual bills (Column D) from Table 5-21 for each customer class to arrive at the total amount of fixed revenue generated for each customer class (Column E). Next, the amount of fixed revenue for each customer class (Column E) is subtracted from the total cost of service by customer class (Column B) to arrive at the variable charge allocation in Column F. The last step in calculating the commodity charge is to divide the variable charge allocation (Column F) by the wastewater flow for each customer class in Column G to arrive at the volumetric commodity rate shown in Column H. Table 5-25: Derivation of the Wastewater Commodity Rates ($/ccf) Bimonthly Bills Fixed Variable Charge Wastewater Commodity Rate Customer Class cos Fixed Charge Revenue Allocation Flow (per WW cd) A B C D E F G H Residential Single Family Residence $6,081,613 $26.63 68,520 $1,824,484 $4,257,129 973,206 $4.37 Multi-Family & Mobile home $1,010,083 $26.63 924 $24,603 $985,480 179,261 $5.50 Non-Residential General Commercial $879,454 $26.63 1,950 $51,923 $827,531 174,949 $4.73 Medium-Low $263,541 $26.63 564 $15,018 $248,524 46,867 $5.30 Medium $50,524 $26.63 120 $3,195 $47,329 7,952 $5.95 Medium-High $4,418 $26.63 48 $1,278 $3,139 516 $6.09 High $306,573 $26.63 336 $8,947 $297,626 35,502 $8.38 Light Industry $187,593 $26.63 108 $2,876 $184,717 35,816 $5.16 Industrial Special User $139,956 $26.63 30 $799 $139,157 26,812 $5.19 Government & Membership Organizations $2,523 $26.63 24 $639 $1,884 485 $3.88 Churches $56,469 $26.63 210 $5,592 $50,878 10,748 $4.73 Elementary School (ADA) $75,994 $0.00 0 $0 $75,994 15,836 $4.80 Secondary & High School (ADA) $105,576 $0.00 0 $0 $105,576 22,214 $4.75 61 March 3, 2020, Item #4\0 N $. \0 CJ\ 5.3.4.PROPOSED WASTEWATER RATE SCHEDULE The proposed rates derived in Table 5-24 and Table 5-25 are increased annually by the proposed revenue adjustments shown in Table 5-13. The resulting proposed rates for the study period are provided in Table 5-26. Table 5-26: FYE 2020.2024 Proposed Bimonthly Wastewater Charges Customer Class Current Charge March 2020 March 2021 March 2022 March 2023 March 2024 Bi-Monthly Fixed Charge All Customer Classes Varies by Meter Size $26.63 $28.31 $30.10 $32.00 $34.02 Commodity Rate per ccf of Wastewater Residential Single Family Residence $5.79 $4.38 $4.66 $4.96 $5.28 $5.62 Multi-Family & Mobile home $4.02 $5.50 $5.85 $6.22 $6.62 $7.04 Non-Residential General Commercial $4.02 $4.74 $5.04 $5.36 $5.70 $6.06 Medium-Low $4.60 $5.31 $5.65 $6.01 $6.39 $6.80 Medium $5.35 $5.96 $6.34 $6.74 $7.17 $7.63 Medium-High $6.85 $6.09 $6.48 $6.89 $7.33 $7.80 High $8.15 $8.39 $8.92 $9.49 $10.09 $10. 73 Light Industry $4.22 $5.16 $5.49 $5.84 $6.21 $6.61 Industrial Special User $4.02 $5.20 $5.53 $5.88 $6.26 $6.66 Government & Membership Organizations $4.02 $3.89 $4.14 $4.41 $4.69 $4.99 Churches $4.02 $4.74 $5.04 $5.36 $5.70 $6.06 Elementary School (ADA) $4.02 $4.80 $5.11 $5.44 $5.79 $6.16 Secondary & High School (ADA) $4.02 $4.76 $5.06 $5.38 $5.72 $6.09 62 March 3, 2020, Item #4 5-4 . Bill hnpacts F igure 5-4 shows the impacts of the proposed rates on a hypothetical Single-Family Reside ntial customer at differe nt usage levels . Figure 5-5 shows the impacts on a hypothe tical N on-Reside ntial c usto me r with a l " mete r and different usage le vels . Figure 5-4 : Single-Fam il y Reside ntial W astewater Bill Impac t Ana lysis SFR Impacts at Different Usage Levels SlbO $14t• '120 SIO0 $80 $W s~o II $20 $0 5 tcf Dccf 19ccf 26rcl H«f 50cd 60c,f ■ Current Bill SS0.88 S/3.46 S99.79 $ 107.33 SIU.38 5137.'13 $148.73 ■ Proposed Bill $1\8.50 $79.12 $109.74 $131.61 $131.61 S 131.61 S 13 l.61 Impact ISi -$2.38 SS.66 $9.95 s2,1.2s $9.23 ·$5.82 ·$17.17 Impact 1%) 4.7% 71% 10.0% 22.6% 1.5% •4,2•" 1 15% Figure 5-5: No n-Res id en tial W astewater Bill Im p act Ana lys is Non-Residential Impacts at Different Usage Levels -1 " Meter S2.000 S!,!!()ll ~ 1,b(JI 1 Sl,•IUU $1,J.OU St.COO ol!lJU 5600 $<100 S200 so ·-7 I ef •• I I II lG<cf ,~,cl 3r, ref II II II 119ccf Gl,d BOccf JBed 200trl 267 crf ■ Cu11er1t Bill $86.!S $1'17.83 $}09.48 5777':18 $37388 5,1<J7 18 SSS6.2.1 $9'19.28 $1,408.23 Sl,8Ci7.18 ■ Pr 01,osed Bill $69.26 $12,1.07 $178,88 $239 78 5325.0-1 s,n4.5u ,SJ 3.83 $836 60 Sl,l.44.63 SJ,GS2.66 Impact IS) Slb.92 SlJ.16 $30.60 -$38.20 $48.84 562.52 572.-10 Slll.68 S!&:l.60 $214.:,2 Impact(%) 19.6t,~ 16.1% 1~.6% 13_7°, 13.1% 12.6% 12.4% I J.9% 11.6~. l l .5% 63 I v ·w 93 of96 March 3, 2020, Item #4 Date Count Received Last Name 1 1/22/2020 Paige 2 1/27/2020 Corney 3 1/27/2020 Gordon 4 1/27/2020 Delaney 5 1/27/2020 Belasco 6 1/27/2020 Cook 7 1/27/2020 Dolloff 8 1/27/2020 Taylor 9 1/27/2020 Giafaglione 10 1/27/2020 Haupt 11 1/27/2020 Fuller 12 1/27/2020 Fetsch 13 1/27/2020 Still 14 1/27/2020 Delp 15 1/27/2020 Paras 16 1/27/2020 Nelson 17 1/27/2020 Rumrill 18 1/27/2020 Anastas 19 1/27/2020 Konold 20 1/27/2020 Parenti 21 1/27/2020 Quaglietta 22 1/27/2020 Dentel 23 1/27/2020 McGowan 24 1/27/2020 Swan 1/27/2020 Simi 25 1/27/2020 Matthies 26 1/29/2020 McCormack 27 1/29/2020 Salazar 28 1/29/2020 Wayland 29 1/29/2020 Carter 1/29/2020 Carter 30 1/29/2020 Gruber 31 1/29/2020 Armstrong 32 1/29/2020 Cesolini 33 1/30/2020 Monroe 34 1/30/2020 Koskie 35 1/30/2020 Asaravala 36 1/30/2020 Davidson 1/30/2020 Davidson 37 1/30/2020 Russ 1/30/2020 Russ 38 1/30/2020 Patounas 39 1/31/2020 Nelson 40 1/31/2020 Devault 1/31/2020 Devault 41 1/31/2020 Torres-Quinones 42 1/31/2020 Harrison 43 2/3/2020 Bandrup 44 2/3/2020 Burrows 94 of 96 WATER SEWER RATE INCREASE 2020 PROTESTS Address First Name (AVE, CT, DR, LN, PL, RD, ST, TRL, WAY) Denis 12807 Amber Hill Ln June 14764 Dash Way Linda 13640 Somerset Rd. Deena 14465 Twin Gables Ct. C. Charlotte 14445 Twin Peaks Rd. Neal 12956 Triumph Dr. Robert 13132 Poway Hills Dr. Carol 12801 Claire Dr. Salvatore 13451 Orange Blossom Ln. Robert 14219 Old Community Rd. Christopher 13474 Los Olivos Ave. Gayle 14321 Twisted Branch Rd. Constance 14227 Powers Rd. Kenric 13909 Olive Mesa Ct. Aristedes & Marien 13151 Ridgedale Dr. Catherine 14358 Ipava Dr. Dennis 14762 Poway Mesa Dr. Holly 15941 Overview Rd. Kathleen 15466 Mesquite Tree Tri. Marina 15157 Jenell St. Anthony 14747 Fairtree Terrace Georgia 13868 Midgrove Ct. Jan 13991 Crossrock Rd. Scott 14460 Twin Gables Ct. Bernadette 14460 Twin Gables Ct. Ted 13606 El Mar Ave. Kevin 15704 Riparian Dr. Ann 12802 Selma Ct. Sharon 13701 Somerset Rd. John 12663 Butterwood Ct. Dianne 12663 Butterwood Ct. Arleen 13988 Pequot Dr. Sheryl 16637 Orchard Bend Rd. Brian 12943 Solera Way Myron 14781 Oakline Rd. Heather & Kevan 14219 Tobiasson Rd. Ramakant 13228 Tining Dr. Ian 14743 Gail Park Ln. Deborah 14743 Gail Park Ln. John 16251 Windpiper Rd. Jack 16251 Windpiper Rd. Ann 14051 Hermosillo Way James 12525 Mustang Dr. Karen 14433 Range Park Rd. Christopher 14433 Range Park Rd. Marta 13610 Putney Rd. Amy 13347 Fallen LeafRd. Susan 13563 Norwalk St. Amber & Jason 14534 Saco St. ATTACHMENT F Comments 317-720-50 314-860-04 314-721-13 323-060-15 314-181-56 314-231-10 duplicate duplicate duplicate duplicate duplicate 317-121-02 275-282-09 March 3, 2020, Item #4 45 2/3/2020 Trench 46 2/3/2020 Moulton 47 2/3/2020 Neild, Zwicker 48 2/3/2020 Laureti 49 I 2/4/2020 I Schiffer so 2/5/2020 Kozlowski 51 2/5/2020 Friedman 52 2/5/2020 Ferguson Gisbert 53 2/6/2020 Kellhofer 54 2/6/2020 Powell 55 2/10/2020 Davison 56 2/10/2020 Dickey 57 2/10/2020 Dickey 58 2/10/2020 Halyk 59 2/11/2020 Vermilyea 60 2/11/2020 Eaton 61 2/11/2020 Eaton 62 2/11/2020 Jensen 2/11/2020 Jensen 63 2/11/2020 Denisac 64 2/11/2020 Reyes 65 2/11/2020 Dixon 66 2/11/2020 Chadwick 67 2/11/2020 Decosta 68 2/12/2020 Shurts 69 2/12/2020 Jalisi 70 2/12/2020 Ehrhart 71 2/12/2020 Bryan 72 2/12/2020 Graham 73 2/12/2020 Daigh 74 2/12/2020 Penick 2/12/2020 Sotelo 75 2/12/2020 Larreynaga 76 2/13/2020 Hoyt 77 2/13/2020 Kersch 78 2/13/2020 Wang 79 2/13/2020 Meitz 80 2/13/2020 Kim 81 2/14/2020 Stegman 82 2/14/2020 Pond 83 2/18/2020 Seminsky 84 2/18/2020 Phillips 85 2/18/2020 Chabot 86 2/18/2020 Sauriol 87 2/18/2020 Whitson 88 2/18/2020 Samaras 95 of 96 WATER SEWER RATE INCREASE 2020 PROTESTS David & Kimberly 14529 Saco St. Jayne 14724 Poway Mesa Dr. Peter & Wendy 12648 Butterwood Ct. Anthony 14260 Tierra Bonita Rd. I Nancy J 12484 Pintail Ct. Colleen 14239 Silver Ridge Rd. Assi 14662 Dash Way Karen 13967 Poway Valley Rd. Scott & Cheri 14141 Mazatlan Way Judith 14523 Saco St. Steven 13030 Papago Dr. Douglas 13123 Carriage Rd. Wallace 12431 Schaler Dr. Len 17746 St. Andrews Dr. Susan 14505 Saco St. Betsy 12923 Conley St. Ashley 13028 Neddick Ave. Christopher S. 13415 Tarascan Dr. Sonja M. 13415 Tarascan Dr. Tracy 13027 Vista View Dr. Neomi 13261 Lingre Ave. Rhon 12508 Pintail Ct. Ann 12937 Papago Dr. Daniel L. 16745 Avenida Florencia Cleo 14510 Saco Ct. Heather 17342 Tam 0 1 Shanter Dr. Ursula & Kirk 13524 Ring Rd. Linda 12385 Paseo Colina Charles S. 16636 Martincoit Rd. Bonnie J. 12842 Indian Trail Rd. Mara 17025 Butterfield Trail Monica 13734 McKenzie Ave. Mauricio 13734 McKenzie Ave. Michelle 14822 Midland Rd. Mandy L. 12526 Mustang Dr. Yan 13919 Midland Rd. Eric 12202 Greentree Rd. Micah & Kelsey 14157 Ezra Ln. Richard 12809 Plaisades Ct. Craig 14452 Midland Rd. Eileen & George 14922 Derringer Rd. John 13946 Northcrest Ln. Tamara D. 17566 Tam O'Shanter Dr. Tawny 15139 Sycamore Canyon Rd. John 14371 Silver Heights Rd. Anne E. 13017 Morene St. I duplicate 317-591-38 duplicate March 3, 2020, Item #4 89 2/18/2020 Buckley 2/18/2020 Buckley 90 2/18/2002 Crotz 91 2/18/2020 Gould 92 2/18/2020 Boeller 93 2/18/2020 Schneider 94 2/18/2020 Wield 95 2/18/2020 Collins 96 I 2/19/2020 I Grotz 97 2/20/2020 Wolinski 98 2/20/2020 Wolinski 99 2/20/2020 Kellhofer 100 2/20/2020 Bourget 101 2/20/2020 Santilla 2/20/2020 Brulee 102 2/24/2020 Eckert 2/24/2020 Eckert 103 2/24/2020 Tiernan 104 2/24/2020 Duddy 105 2/24/2020 Gilson 106 2/24/2020 Castelli 107 2/24/2020 Parker 108 2/24/2020 Olps 109 2/25/2020 De La Fuente 96 of 96 WATER SEWER RATE INCREASE 2020 PROTESTS Mary Ann 13720 Woodgate Place James H. 13720 Woodgate Place Victoria 13514 Los Olivos Ave. Jessica 13953 Magnolia Ave. #83 Robert 15125 Vali Hai Rd. Deborah & Neil 14021 Frame Rd. Michele 15913 Wild Holly Ln. Phyllis 16886 St. Andrews Dr. [Paul V. [ 13046 Tuscarora Dr. Patricia parcel -no address Patricia 12371 Old Pomerado Rd. Edna Mae 14449 Ortez Place MJ 14153 Peachtree Ln. Karen 12646 Hickory Ct. Linda Linda 13314 Nokoni Dr. Lawrence 13314 Nokoni Dr. Barbara 12207 Colony Dr. Thomas & Susan 12664 Butterwood Ct. Pat 13270 Twin Circle Ct. Terence 14045 Hermosillo Way Mathew & Maureen 12467 Golden Eye Ln. Christopher 14589 Scarboro St. Gina Luna 12315 Hill Country Dr. duplicate I 311-620-15 317-232-26 317-232-25 no address provided duplicate