HomeMy WebLinkAbout11.a. WASTEWATER COST OF SERVICE STUDY dated May 21, 2015, prepared by Raftelis Financial Consultants, Inc.■CENTRAL CONTRA COSTA
SANITARY DISTRICT
Wastewater Cost of Service
Study
Report / May 21, 2015
Cent MI Ccnira Costa Sanitary ®istr t
f*
RAFTELIS RM
FINANCVAL CONSULTANTS, INC;
May 21, 2015
Mr. Roger Bailey
General Manager
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
201 S. Lake Avenue Phone 626.583.1894 www.raftelis.com
Suite 301 Fax 626.583.1411
Pasadena, CA 91101
Subject: Wastewater Cost of Service Rate Study Report
Dear Mr. Bailey:
Raftelis Financial Consultants, Inc. (RFC) is pleased to provide this Wastewater Cost of Service Rate Study
Report (Report) for the Central Contra Costa Sanitary District (District) to establish wastewater rates that
are equitable and address Proposition 218 requirements.
The major objectives of the study include the following:
1. Review current wastewater rate structure
2. Review the current customer classification
3. Develop a cost of service analysis for wastewater
4. Develop fair and equitable wastewater rates
5. Demonstrate the impacts of the proposed wastewater rates on typical customer bills
6. Develop a user - friendly rate model that may be used for future planning
The study involved a comprehensive review of the District's wastewater rates based on cost of service
principles. The District has developed a long range financial plan to determine the revenue needs of the
wastewater utility in the next ten years. However, wastewater rates, based on that financial plan, are
only calculated for the next two fiscal years beginning July 2015. All assumptions, including all increases
in operating and capital costs, were based on the District's long -range financial plan and were factored
into the rates. The proposed rates were revised to enhance equity among customer classes and
encourage efficient use of services for greater environmental sustainability. The Report summarizes the
key findings and recommendations related to the development of the wastewater rates.
It has been a pleasure working with you, and we thank you and the District staff for the support
provided during the course of this study.
Sincerely,
RAFTELIS FINANC /AL CONSUL TANTS, INC.
Sudhir Pardiwala Hannah Phan
Executive Vice President Senior Consultant
This page intentionally left blank to facilitate two -sided printing.
rk Wastewater Cost uf Service Study Report 1 1
l' EXECUTIVE SUMMARY ................................................................................................................
5
11 INTRODUCTION .............................................................................................................................
5
1.2 FINANCIAL PLAN ............................................................................................................................
S
13 COST OF SERVICE PROCESS AND METHODOLOGY .......................................................................
6
1.4 COST OF SERVICE ANALYSIS ..........................................................................................................
6
1.41 Cost nf Service Results ..........................................................................................................
6
1.5 PROPOSED WASTEWATER RATES .................................................................................................
7
1.5.1 Customer Impacts .................................................................................................................
9
2' OVERVIEW ...............................................................................................................................
1D
2.1 INTRODUCTION ...........................................................................................................................
1O
2.2 ORGANIZATION OF THE REPORT --------------------------------1U
2.3 ACKNOWLEDGEMENTS ...............................................................................................................
11
3' FINANCIAL PLAN .......................................................................................................................
12
3.1 WASTEWATER SYSTEM INFRASTRUCTURE .................................................................................
12
3] EXISTING WASTEWATER RATES ..................................................................................................
1J
3.3 WASTEWATER ACCOUNTS AND USAGE CHARACTERISTICS ------------------.14
3.4 WASTEWATER SYSTEM REVENUES-------------------------------16
3.5 WASTEWATER SYSTEM EXPENDITURES ......................................................................................
17
3.51 Operation and Maintenance Expenses ...............................................................................
17
3.5.2 Capital Improvement Program ------------------------------.18
2.5.3 Revenue Adjustments .........................................................................................................
19
3.5.4 Debt Service Requirements --------------------------------19
3.5.5 Debt Service Coverage ........................................................................................................
Z0
3.5.6 Operating Financial Plan .....................................................................................................
Z1
2.5.7 Reserves------------------------------------------22
4` COST OF SERVICE ANALYSIS ......................................................................................................
26
4.1 PROPOSED CUSTOMER CLASSIFICATIONS ..................................................................................
Z6
42 PLANT BALANCE ..........................................................................................................................
Z8
4.2 ALLOCATION OF REVENUE REQUIREMENTS BY FUNCTION ........................................................
]U
4.4 ALLOCATION OF FUNCTIONAL COSTS TO COST COMPONENTS .................................................
31
4.5 ALLOCATION OF REVENUE RE[}U|REK4ENTS--------------------------.
34
4.6 DEVELOPMENT OF UNIT COSTS OF SERVICE ..............................................................................
36
4.7 ALLOCATION C]F COSTS TO CUSTOMER CLASS ...........................................................................
37
rk Wastewater Cost uf Service Study Report 1 1
5.1 RATE DESIGN .................................................................................................. .............................39
5.2 PROPOSED RESIDENTIAL CHARGES ................................................................ .............................39
5.3 PROPOSED NON - RESIDENTIAL RATES ............................................................ .............................40
5.4 CUSTOMER IMPACTS ..................................................................................... .............................42
6. APPENDIX .................................................................................................... .............................43
2 1 Central Contra Costa Sanitary District
LIST OF FIGURES AND TABLES
Table 1 -1: Revenue Adjustments Schedule ................................................................... ..............................6
Table 1 -2: Current and Proposed Wastewater Rates .................................................... ..............................8
Table 1 -3: Residential Annual Wastewater Bill Impacts ................................................ ..............................9
Table 1 -4: Typical Non - Residential Annual Wastewater Bill Impacts ............................ ..............................9
Table 3 -1: Existing Wastewater Rate Structure ............................................................ .............................13
Table 3 -2: Mixed Use Classification .............................................................................. .............................14
Table 3 -3: Projected Customer Accounts ...................................................................... .............................15
Table 3 -4: Annual Projected Water Usage ( HCF) .......................................................... .............................16
Table 3 -5: Revenue Summary under Existing Rates ..................................................... .............................17
Table 3 -6: Projected O &M Expenses by Function ......................................................... .............................18
Table 3 -7: Projected O &M Expenses by Category ........................................................ .............................18
Table 3 -8: Capital Improvement Plan ........................................................................... .............................19
Table 3 -9: Revenue Adjustments Schedule .................................................................. .............................19
Table 3 -10: Existing Debt Schedule ............................................................................... .............................19
Table 3 -11: Debt Coverage Calculation ......................................................................... .............................20
Table 3 -12: Operating Financial Plan ............................................................................ .............................21
Figure 3 -1: Ending Balance — Running Expense and Sewer Construction Funds ........ ...............................
22
Figure3 -2: Ending Fund Balances ................................................................................. .............................23
Table3 -13: Fund Balances ............................................................................................ .............................24
Table 4 -1: Current and Proposed Wastewater Strength .............................................. .............................27
Table 4 -2: Current and Proposed Wastewater Flow for Schools .................................. .............................27
Table 4 -3: FY 2014 Plant Balance .................................................................................. .............................29
Table 4 -4: Allocation of Wastewater O &M Expenses by Function ............................... .............................30
Table 4 -5: Allocation of Wastewater Assets by Function ............................................. .............................31
Table 4 -6: Allocation to Cost Components — O& M ..................................................... ...............................
32
Table 4 -7: Allocation of O &M Expenses to Cost Components ...................................... .............................32
Table 4 -8: Allocation to Cost Components —Treatment Plant ..................................... .............................33
Table 4 -9: Allocation to Cost Components — Capital .................................................... .............................34
Table 4 -10: Allocation of Wastewater Assets to Cost Components ............................. .............................34
Table 4 -11: Allocation of Revenue Requirements ........................................................ .............................35
Table 4 -12: Customer Class Service Units ..................................................................... .............................36
Table 4 -13: Development of Unit Costs ........................................................................ .............................37
Table 4 -14: Allocation of Costs to Customer Class ....................................................... .............................38
Table 5 -1: Calculated Residential Wastewater Charges — FY 2016 ............................... .............................39
Wastewater Cost of Service Study Report 13
Table 5 -2: Proposed FY 2016 and FY 2017 Residential Wastewater Charges ............... .............................40
Table 5 -3: Proposed FY 2016 and FY 2017 Non - Residential Wastewater Rates ........... .............................41
Table 5 -4: Residential Annual Wastewater Bill Impacts ............................................... .............................42
Table 5 -5: Typical Non - Residential Annual Wastewater Bill Impacts ........................... .............................42
4 1 Central Contra Costa Sanitary District
1. EXECUTIVE SUMMARY
1.1 INTRODUCTION
In June of 2014, the Central Contra Costa Sanitary District (District) engaged Raftelis Financial
Consultants, Inc. (RFC) to conduct a comprehensive Cost of Service (COS) study to independently assess
and evaluate the District's existing wastewater rates to provide a fair and reasonable rate structure that
enhances the equity of rates to ensure that there is a proportionate recovery of costs from the various
customer classes. This report documents the study resultant findings, analyses, and proposed changes.
1.2 FINANCIAL PLAN
In order to determine wastewater rates, RFC used the revenue requirements, including operations and
maintenance (O &M), capital improvement expenses, debt service costs and reserve requirements for a
five -year study period from Fiscal Year (FY) 2016 to 2020 provided in the District's financial plan. O &M
expenses include the cost of treatment, pumping, and collection facilities, as well as the costs of
providing technical services such as laboratory services and other administrative costs of the
wastewater system such as customer service and billing. The O &M projections are based on the
District's long -range financial plan, which include two additional annual payments of $2.5 million per
year to the Unfunded Actuarial Accrued Liability (UAAL) for FY 2016 and 2017. The projections were
based on anticipated revenues and expenses as of March 2015 in order to prepare rates for publication
in the Proposition 218 notices which were mailed in April.
In addition to the operating expenses, the District is planning significant capital investment over the next
five years to replace portions of its complex infrastructure that has reached the end of its useful life and
to remain in compliance with stringent environmental regulations. The District does not intend to bond
finance these improvements, but rather intends to fund the entire five -year Capital Improvement
Program (CIP) of $181.7 million from FY 2016 to 2020 primarily through rate revenues, capacity fees and
ad valorem tax revenue. Annual payments on existing debt service are$3.8 million.
The number of wastewater accounts and water usage are projected to increase at 0.1 percent per year
in FY 2016 and FY 2017 and 0.6 percent per year thereafter. The model and subsequent rates published
in the Proposition 218 notice were developed prior to the Governor's Executive Order on April 1, 2015
mandating a statewide 25 percent reduction in urban water use. The Sewer Service Charge revenue for
non - residential customers is billed based on the prior year's water consumption. Therefore, the District
will need to monitor water consumption by non - residential customers, who make up approximately
twenty percent of Sewer Service Charge revenue, to determine financial impacts of water conservation
for Fiscal Year 2017.
The District's financial plan indicates that revenue adjustments of 7.24 percent are required for FY 2016,
7.30 percent in FY 2017, 5.57 percent in FY 2018,535 percent in FY 2019 and 4.97 percent in FY 2020, as
shown in Table 1 -1. The adjustments are needed to meet the operating and capital expenses as well as
meet reserves targets. The District currently has one bond reserve account and four separate funds:
Running Expense Fund, Sewer Construction Fund, Self- Insurance /Emergency Fund, and a Debt Service
Fund. The current reserve policy is 32 percent of the next year's O &M expenses, 30 percent of the next
year's CIP expenses, and 100 percent of the next year's debt service payment. As a result of a review of
rk Wastewater Cost of Service Study Report 15
the reserves, the District intends to revise its reserve policy to have at least five months, or 41.7 percent
of the next year's O &M expenses, 50 percent of the next year's CIP expenses, 100 percent of the next
year's debt service payment, $1.5 million for self- insurance, and $5 million for emergencies. The goal of
the financial plan is to achieve the new reserves targets by FY 2020.
Table 1 -1:
Revenue Adjustments Schedule
Fiscal Year
2016
2017
Revenue Adjustments
7.24%
7.30%
2018
5.57%
2019
5.35%
2020
4.97%
1.3 COST OF SERVICE PROCESS AND METHODOLOGY
In this study, RFC followed the guidelines for allocating costs detailed in the Water Environment
Federation (WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems, 2004. The
wastewater COS analysis consists of seven major steps, as outlined below:
1. Review customer class and strength characteristics and loadings of the non - residential class.
2. Conduct plant balance to estimate the flows and strength of the residential class.
3. Functionalize O &M expenses and capital costs into functional categories such as Collection,
Treatment, and Billing and Customer Service.
4. Allocate each functional category into cost components such as Flow, Biochemical Oxygen
Demand (BOD) and Total Suspended Solids (TSS), and Billing and Customer Service.
5. Develop total customer class characteristics by cost component.
6. Calculate the cost component unit rates by dividing the total cost in each cost component in
Step 4 by the total customer class characteristics in Step 5.
7. Calculate the cost by customer class by multiplying the unit cost in Step 6 by the individual
customer class characteristics in Step 5.
1.4 COST OF SERVICE ANALYSIS
The steps described above provide the basis for allocating costs equitably amongst the different
customer classes in proportion to the service received. Once costs to serve different customer classes
are determined, rates are then designed to recover the costs equitably to address Proposition 218
requirements.
1.4.1 Cost of Service Results
The significant outcomes of the wastewater COS analysis are as follows:
1. The wastewater flow from residential customers is proportional to the number of residents per
household. Single Family Residential (SFR) and Multi- family Residential (MFR) customers are
separated into two classes with separate charges to account for the difference in residential
6 1 Central Contra Costa Sanitary District fft
density between the two customer classes. This results in more equitable charges to MFR
customers.
2. The review of the customer class characteristics results in changes to the loadings of
supermarkets and schools to be more consistent with industry standards and the creation of
two additional commercial categories: Hotels /Motels and Automotive facilities that typically
have higher strengths (BOD /TSS) than the customers in the Standard Commercial category.
In addition to the proposed changes, RFC suggested that the District conduct a comprehensive review of
the mixed use and food service categories to ensure that they are categorized and charged correctly and
equitably. The District should also consider conducting flow and strength measurements to confirm non-
residential customer class characteristics. Such a review could then be used to evaluate and simplify the
District's food service and multi -use rate categories.
1.5 PROPOSED WASTEWATER RATES
Through our review, RFC recommends that the District retain some elements of its current wastewater
rate structure, which includes fixed charges for residential customers and a flow charge per hundred
cubic feet (HCF) for all most other non - residential customers. Industrial customers are charged based
on a unit rate for flow, BOD, and TSS. Schools are charged a rate per average daily student attendance.
Since a large majority of the costs of operating and maintaining the wastewater system are fixed, all
non - residential customers are subject to a minimum annual charge equal to the MFR annual charge plus
the District's historic $17 pollution prevention surcharge.
Table 1 -2 shows the current and proposed wastewater rates in FY 2016 and FY 2017.
rk Wastewater Cost of Service Study Report 17
Table 1 -2:
Current and Proposed Wastewater Rates
Residential Annual Charges
(per Residential Unit Equivalent)
Single Family Dwellings
$439.00
$471.00
$503.00
Condominium, Multi - Family,
Mobile Homes
$439.00
$463.00
$487.00
Commercial /Non - Industrial
(per hcf)
Bakeries
$11.22
$12.33
$13.22
Supermarkets
$4.07
$8.71
$9.34
Mortuaries
$7.99
$10.70
$11.47
Restaurants
$8.32
$8.71
$9.34
Hotels/Motels
$4.07
$8.06
$8.64
Automotive
$4.07
$5.34
$5.73
Standard Commercial
$4.07
$4.64
$4.98
Industrial
Wastewater Flow
(per hcf)
$1.68
$3.42
$3.67
BOD
(per 1,000lbs)
$934
$1,134
$1,216
TSS
(per 1,000lbs)
$667
$529
$567
Mixed Use
(per hcf)
Rate Group XA
$4.46
$4.96
$5.32
Rate Group XB
$4.85
$5.38
$5.77
Rate Group XC
$5.25
$5.81
$6.23
Rate Group XD
$5.64
$6.22
$6.67
Rate Group XE
$6.03
$6.64
$7.12
Rate Group XF
$6.42
$7.05
$7.56
Rate Group XG
$6.81
$7.47
$8.01
Rate Group XH
$7.21
$7.88
$8.45
Rate Group XI
$7.60
$8.31
$8.91
Rate Group XJ
$8.72
$9.97
$10.69
Rate Group XK
$9.08
$9.62
$10.32
Rate Group XL
$9.79
$10.18
$10.92
Rate Group XM
$10.15
$10.50
$11.26
Rate Group XN
$10.51
$10.76
$11.54
Rate Group XO
$10.74
$10.90
$11.69
Institutional
(per hcf)
Churches
$4.07
$4.64
$4.98
Schools (Daycare, Preschool, University)
$4.07
$4.33
$4.65
Schools (Elementary)
(per student)
$5.62
$5.77
$6.19
Schools (Intermediate)
(per student)
$5.94
$11.34
$12.16
Schools (High School)
(per student)
$6.27
$16.93
$18.15
Minimum Annual Charge
$456
$480
$504
8 1 Central Contra Costa Sanitary District
1.5.1 Customer Impacts
Table 1 -3 compares the residential bill impacts for FY 2016 and FY 2017 to current rates. SFR customers
would experience $32 annual increases over the next two years and MFR customers would experience
$24 annual increases.
Table 1 -3:
Residential Annual Wastewater Bill Impacts
SFR $439 $471 $503 $32 $32
MFR $439 $463 $487 $24 $24
Table 1 -4 shows the typical non - residential bill impacts for FY 2016 and FY 2017 by comparing the
average bill based on the proposed rates to the average bill based on the current rates. The amounts
are calculated based on the average annual water usage for each customer class.
Table 1 -4:
Typical Non - Residential Annual Wastewater Bill Impacts
Hotels /Motels
5,959
$24,252
$48,027
$51,483
$23,775
$3,456
98.0%
7.2%
Supermarkets
2,932
$11,931
$25,534
$27,381
$13,602
$1,847
114.0%
7.2%
Standard Commercial
722
$2,937
$3,348
$3,593
$411
$245
14.0%
7.3%
Restaurants
799
$6,647
$6,958
$7,462
$312
$503
4.7%
7.2%
Automotive
294
$1,197
$1,571
$1,686
$374
$115
31.2%
7.3%
Wastewater Cost of Service Study Report 19
2. OVERVIEW
2.1 INTRODUCTION
In June 2014, Central Contra Costa Sanitary District (District) engaged Raftelis Financial Consultants, Inc.
(RFC) to conduct a cost of service study for the wastewater utility that could be utilized to evaluate and
enhance the equity of wastewater rates for the District's wastewater services to ensure that there is a
proportionate recovery of costs from the various customer classes. This Report documents the resultant
findings, analyses, and proposed changes.
The major objectives of the study include the following:
1. Review current wastewater rate structure
2. Review the current customer classification
3. Develop a cost of service analysis for wastewater
4. Develop fair and equitable wastewater rates
5. Demonstrate the impacts of the proposed wastewater rates on typical customer bills
6. Develop a user - friendly rate model that may be used for future planning
This Report provides an overview of the Study and includes findings and recommendations for
wastewater rates.
2.2 ORGANIZATION OF THE REPORT
This Report includes four sections in addition to the Executive Summary and this Overview. A brief
description of the remaining sections follows.
• Section 3 — Financial Plan describes the long -range financial plan for the wastewater utility
developed by District staff.
• Section 4 — Cost of Service Analysis describes findings and results of the wastewater rate study.
It includes a description of the policy issues, the wastewater cost of service methodology, the
customer classifications, the determination of annual revenues required from rates, and a
detailed discussion on the Cost of Service, which includes allocation of costs to wastewater
parameters and the determination of unit costs.
• Section 5 — Proposed Wastewater Rates includes a detailed discussion of the proposed
wastewater rates and the customer impacts resulting from the proposed rates.
• Section 6 — Appendix provides larger, easier to read tables found in the body of the report and
show the data and the various calculations conducted to derive the unit costs and rates. The
original table number is kept for easy reference.
10 1 Central Contra Costa Sanitary District
2.3 ACKNOWLEDGEMENTS
This Report was a team effort among the District's Project Team and the RFC Team. RFC would like to
thank the individuals listed below who contributed their time, expertise, and support to make this
project a success. Throughout the project the input and direction provided by the District's Project
Team was critical to addressing the numerous issues and topics enumerated in this Report.
• Roger Bailey — General Manager
• David Heath — Director of Administration
• Danea Gemmell — Environmental Services Division Manager
• Thea Vassallo — Finance Manager
• Todd Smithey— Finance Administrator
• Thomas Brightbill — Senior Engineer
Wastewater Cost of Service Study Report 1 11
3. FINANCIAL PLAN
This section of the Report provides a summary of the projected revenues, operating and maintenance
(O &M) and capital expenditures, capital improvement financing plan, debt service requirements, and
the revenue adjustments required to ensure the financial stability of the wastewater enterprise as
presented in the District's financial plan.
.1 WASTEWATER SYSTEM INFRASTRUCTURE
The District was established in 1946 as a special enterprise district and serves approximately 471,000
residents and 5,000 businesses in 13 cities and towns covering a 144 square mile area. Approximately
35 million gallons per day (MGD) of wastewater is treated on average at the District's Wastewater
Treatment Plant, which also produces nearly 580 million gallons of recycled water each year for plant
operations, industrial uses, and landscape irrigation. The wastewater utility is also responsible for the
operation and maintenance of 19 wastewater pumping stations and 1,500 miles of sewer mains. The
District also operates a Household Hazardous Waste facility.
3.2 EXISTING WASTEWATER RATES
The current wastewater rate structure consists of fixed charges for residential customers and a flow
charge per hundred cubic feet (HCF) for most all other non - residential customers. Schools are charged a
rate per average daily student attendance. Industrial customers are charged based on unit rates for
flow, biochemical oxygen demand (BOD), and total suspended solids (TSS). All customers are subject to
a minimum annual charge. The current rate structure, shown in Table 3 -1, generates approximately 82
percent of the total rate revenue from residential fixed charges, with the remaining 18 percent
generated by non - residential flow charges.
12 1 Central Contra Costa Sanitary District
Table 3 -1:
Existing Wastewater Rate Structure
Residential Annual Charges (per Residential Unit Equivalent)
Single Family Dwellings $439.00
Condominium, Multi - Family, Mobile Homes $439.00
Commercial /Non - Industrial
(per hcf)
Bakeries
$11.22
Supermarkets
$4.07
Mortuaries
$7.99
Restaurants
$8.32
Hotels /Motels
$4.07
Automotive
$4.07
Standard Commercial
$4.07
Industrial
Wastewater Flow
(per hcf)
$1.68
BOD
(per 1,000 Ibs)
$934
TSS
(per 1,OOOlbs)
$667
Mixed Use
(per hcf)
Rate Group XA
$4.46
Rate Group XB
$4.85
Rate Group XC
$5.25
Rate Group XD
$5.64
Rate Group XE
$6.03
Rate Group XF
$6.42
Rate Group XG
$6.81
Rate Group XH
$7.21
Rate Group XI
$7.60
Rate Group XJ
$8.72
Rate Group XK
$9.08
Rate Group XL
$9.79
Rate Group XM
$10.15
Rate Group XN
$10.51
Rate Group XO
$10.74
Institutional
(per hcf)
Churches
$4.07
Schools (Daycare, Preschool, University)
$4.07
Schools (Elementary)
(per student)
$5.62
Schools (Intermediate)
(per student)
$5.94
Schools (High School)
(per student)
$6.27
Minimum Annual Charge
$456
rk Wastewater Cost of Service Study Report 1 13
Table 3 -2 lists the definition of the mixed use rate codes shown in the current rate structure table.
Table 3 -2:
Mixed Use Classification
343 WASTEWATER ACCOUNTS AND USAGE CHARACTERISTICS
Customer accounts and usage information in fiscal year (FY) 2014 are used as the basis for projecting
wastewater revenues during the study period, from FY 2016 to FY 2020. The projections are based on
the District's long -range financial plan. The number of wastewater accounts and water usage are
projected to increase at approximately 0.1 percent per year in FY 2016 through FY 2017 and
approximately 0.6 percent per year thereafter. The model and subsequent rates published in the
Proposition 218 notice were developed prior to the Governor's Executive Order on April 1, 2015
mandating a statewide 25 percent reduction in urban water.
Table 3 -3 shows the estimated total customer accounts by customer class for FY 2015 to FY 2020.
14 1 Central Contra Costa Sanitary District fft
..
7XA
Standard Commercial +
Standard Commercial +
XI
1 to 10 % Restaurant
81 to 90 % Restaurant
Standard Commercial +
Standard Commercial +
XB
XJ
11 to 20 % Restaurant
65 to 69 % Bakery
Standard Commercial +
Standard Commercial +
XC
XK
21 to 30 % Restaurant
70 to 79 % Bakery
Standard Commercial +
Standard Commercial +
XD
XL
31 to 40 % Restaurant
80 to 84 % Bakery
Standard Commercial +
Standard Commercial +
XE
XM
41 to 50 % Restaurant
85 to 89 % Bakery
Standard Commercial +
Standard Commercial +
XF
XN
51 to 60 % Restaurant
90 to 95 % Bakery
Standard Commercial +
10 to 15% Restaurant +
XG
X�
61 to 70 % Restaurant
85 to 90 % Bakery
Standard Commercial +
XH
71 to 80 % Restaurant
343 WASTEWATER ACCOUNTS AND USAGE CHARACTERISTICS
Customer accounts and usage information in fiscal year (FY) 2014 are used as the basis for projecting
wastewater revenues during the study period, from FY 2016 to FY 2020. The projections are based on
the District's long -range financial plan. The number of wastewater accounts and water usage are
projected to increase at approximately 0.1 percent per year in FY 2016 through FY 2017 and
approximately 0.6 percent per year thereafter. The model and subsequent rates published in the
Proposition 218 notice were developed prior to the Governor's Executive Order on April 1, 2015
mandating a statewide 25 percent reduction in urban water.
Table 3 -3 shows the estimated total customer accounts by customer class for FY 2015 to FY 2020.
14 1 Central Contra Costa Sanitary District fft
Residential
Single Family Residences
Multi- family Residences
Commercial /Non - Industrial
Bakeries
Supermarkets
Mortuaries
Restaurants
Standard Commercial
Minimum Annual Charge
Industrial
Mixed Use
Rate Group XA
Rate Group XB
Rate Group XC
Rate Group XD
Rate Group XE
Rate Group XF
Rate Group XG
Rate Group XH
Rate Group XI
Rate Group XJ
Rate Group XK
Rate Group XL
Rate Group XM
Rate Group XN
Rate Group XO
Institutional
Churches
Schools (Daycare, Preschool, University)
Fraternal & Service Organizations
Local & State Institutions
Other Tax Exempt (Except Federal)
Federal Institutions
Utilities with Special Tax Status
Independent Living Facilities, Rest Homes
Subtotal Excluding Schools
Schools (billed per- capita)
Elementary
Intermediate
High School
Subtotal Schools
TOTAL
Table 3 -3:
Projected Customer Accounts
attar 5
Ft Z1 1b
Ff Z1117
af Z116 _afiaru_
t ZIZI
91,779
91,871
91,972
92,533
93,107
93,693
44, 008
44 ,052
44,100
44,369
44,645
44,926
4
4
4
4
4
4
31
31
31
31
31
32
8
8
8
8
8
8
216
216
217
218
219
221
1,926
1,928
1,930
1,942
1,954
1,966
477
478
478
481
484
487
17
17
17
17
17
17
8
8
8
8
8
8
4
4
4
4
4
4
17
17
17
17
17
17
15
15
15
15
15
15
20
20
20
20
20
20
25
25
25
25
25
26
23
23
23
23
23
24
27
27
27
27
27
28
30
30
30
30
30
31
1
1
1
1
1
1
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0
0
0
0
0
0
113
113
113
114
115
115
14
14
14
14
14
14
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
138,768
138,907
139,059
139,906
140,773
141,662
51
51
51
51
52
52
18
18
18
18
18
18
19
19
19
19
19
19
138,870
13 9, 009
139,161
140,008
140,876
141,765
277,638
277,916
278,220
279,914
281,649
283,427
Table 3 -4 shows the projected water usage by customer class for FY 2015 to FY 2020 and wastewater
flow and strength from Industrial customers.
00
Wastewater Cost of Service Study Report 1 15
Table 3 -4:
Annual Projected Water Usage (HCF) and Student Enrollment
Commercial /Non - Industrial
Bakeries
295
296
296
298
300
301
Supermarkets
90,960
91,051
91,151
91,707
92,276
92,857
Mortuaries
4,382
4,386
4,391
4,418
4,445
4,473
Restaurants
172,713
172,886
173,076
174,132
175,212
176,315
Standard Commercial
1,766,065
1,767,831
1,769,776
1,780,571
1,791,611
1,802,898
Industrial
Wastewater Flow 92,696 92,789 92,891 93,458 94,037 94,630
Mixed Use
Rate Group XA
30,516
30,547
30,581
30,767
30,958
31,153
Rate Group XB
10,024
10,034
10,045
10,106
10,169
10,233
Rate Group XC
32,678
32,711
32,747
32,947
33,151
33,360
Rate Group XD
30,611
30,641
30,675
30,862
31,053
31,249
Rate Group XE
32,806
32,839
32,875
33,076
33,281
33,491
Rate Group XF
38,700
38,738
38,781
39,018
39,260
39,507
Rate Group XG
32,564
32,597
32,633
32,832
33,035
33,243
Rate Group XH
42,079
42,121
42,167
42,424
42,688
42,956
Rate Group XI
37,321
37,358
37,399
37,627
37,860
38,099
Rate Group XJ
576
576
577
580
584
588
Rate Group XK
2,638
2,641
2,644
2,660
2,677
2,693
Rate Group XL
522
523
524
527
530
533
Rate Group XM
565
565
566
569
573
576
Rate Group XN
2,208
2,210
2,213
2,226
2,240
2,254
Rate Group XO
0
0
0
0
0
0
Institutional
Churches
62,233
62,295
62,364
62,744
63,133
63,531
Schools (Daycare, Preschool, University)
8,908
8,917
8,927
8,981
9,037
9,094
Fraternal & Service Organizations
0
0
0
0
0
0
Local & State Institutions
0
0
0
0
0
0
OtherTax Exempt (Except Federal)
0
0
0
0
0
0
Federal Institutions
0
0
0
0
0
0
Utilities with Special Tax Status
0
0
0
0
0
0
Independent Living Facilities, Rest Homes
0
0
0
0
0
0
Total Projected Water Usage (Excluding Schools)
2,492,061
2,494,553
2,497,297
2,512,530
2,528,108
2,544,035
Schools (students)
Elementary
28,109
28,137
28,168
28,340
28,516
28,696
Intermediate
14,832
14,847
14,864
14,954
15,047
15,142
High School
19,957
19,977
19,999
20,121
20,246
20,373
Total Projected School Enrollment
62,899
62,961
63,031
63,415
63,808
64,210
3A WASTEWATER SYSTEM REVENUES
The District's wastewater enterprise derives its required annual operating and capital revenues from a
number of sources. The principal source of operating revenues is the wastewater service charges from
the District's wastewater customers. Other revenue sources include miscellaneous operating revenues
such as permit and inspection fees, lease rental income, stormwater and pollution prevention fees, and
interest earnings. Capital revenue sources include property tax revenue, capacity fee revenue, bond
proceeds, and grants and loans. Wholesale service charges to the City of Concord provide another
significant source of operating and capital revenues.
16 1 Central Contra Costa Sanitary District
Table 3 -5 presents the details of the operating and capital related revenues. The District separates its
revenue streams into a Running Expense Fund, which includes all operating related revenues, and a
Sewer Construction Fund, which includes capital related expenses. A portion of the Sewer Service
Charge revenue is transferred to the Sewer Construction Fund in order to fund capital expenses.
Table 3 -5:
Revenue Summary under Current Rate Structure
Sewer Service Charge
$69,447,000
$68,235,881
$68,310,851
$68,727,563
$69,153,753
$69,589,570
ServiceCharges - Concord
$13,500,000
$13,926,682
$14,337,387
$14,311,392
$14,836,224
$15,380,349
Permit /Inspection /Right -of -Way Fees
$1,244,600
$1,281,938
$1,320,396
$1,360,008
$1,400,808
$1,442,833
Lease Rental Income
$566,000
$582,980
$600,469
$618,483
$637,038
$656,149
Household Hazardous Waste Reimbursement
$895,000
$921,850
$949,506
$977,991
$1,007,330
$1,037,550
Stormwater/ Pollution Prevention /Pretreatment
$271,000
$279,130
$287,504
$296,129
$305,013
$314,163
Interest Income'
$90,000
$196,001
$207,710
$322,273
$427,843
$555,082
Recycled Water
$103,000
$106,090
$109,273
$112,551
$115,927
$119,405
All Other
$115,000
$118,450
$122,004
$125,664
$129,434
$133,317
TOTAL REVENUES
$86,231,600
$85,649,002
$86,245,099
$86,852,054
$88,013,371
$89,228,417
Sewer Service Charge
$3,750,000
$3,787,675
$3,791,930
$3,815,045
$3,838,620
$3,862,655
Property Tax Revenue
$8,160,000
$10,064,708
$10,212,767
$10,406,401
$10,908,644
$11,284,728
Capacity Fee Revenue
$5,890,000
$6,184,425
$6,484,415
$6,788,320
$7,095,960
$7,407,155
Pump Zone Revenue
$528,000
$554,736
$581,717
$609,000
$497,318
$186,862
Concord Capital Revenue
$3,305,000
$3,602,491
$5,487,737
$7,647,624
$6,884,640
$4,917,324
Interest Income'
$280,000
$62,774
$52,512
$68,292
$95,703
$167,906
Permit and Inspection Fees
$107,000
$109,140
$111,323
$113,549
$115,820
$118,137
Recycled Water
$260,000
$267,800
$275,834
$284,109
$292,632
$301,411
All Other
$1,000
$1,030
$1,061
$1,093
$1,126
$1,159
TOTAL REVENUES
$22,281,000
$24,634,778
$26,999,295
$29,733,433
$29,730,463
$28,247,336
1. Based on budgeted and projected revenues as of March 2015.
2. Current Rate Structure (i.e. does not include proposed rate increase.) Increasing revenues due to projected growth.
3. Interest shift in funds in FY 2016 due to proposed reserve policy allocations.
3.5 WASTEWATER SYSTEM EXPENDITURES
For sound financial operation of the District's wastewater system, the revenues generated must be
sufficient to meet the revenue requirements or cash obligations of the system. Revenue requirements
include O &M expenses, capital improvement program (CIP) expenditures, principal and interest
payments on existing debt, and other obligations.
3.5.1 Operation and Maintenance Expenses
O &M expenditures include the cost of treatment, pumping, and collection facilities. O &M expenses also
include the costs of providing technical services such as laboratory services, engineering, and other
administrative costs of the wastewater system such as customer service and billing. These costs are a
normal obligation of the system, and are met from operating revenues as they are incurred. The
comprehensive forecasted annual O &M expenditures for the study are based upon the District's long -
range financial plan, using inflationary factors ranging from two to eight percent per year to project
Wastewater Cost of Service Study Report 1 17
O &M expenditures. In addition to the O &M expenditures, the District is making two additional $2.5
million annual payments to the Unfunded Actuarial Accrued Liability (UAAL) in FY 2016 and FY 2017.
Projected O &M expenditures are summarized by function and by category in Tables 3 -6 and 3 -7,
respectively. The additional UAAL payments are included in the Allocated Benefits category.
Table 3 -6:
Projected O &M Expenses' by Function
Administration
$24,476,326
$24,605,598
$25,372,937
$24,805,582
$25,675,372
$25,785,443
Engineering
$12,229,549
$11,662,173
$11,925,299
$11,470,088
$11,851,909
$12,236,341
Collection System Operations
$15,617,120
$14,752,239
$15,114,151
$14,845,264
$15,308,591
$15,797,147
Plant Operations Department
$32,523,037
$31,584,881
$32,513,761
$32,351,627
$33,504,849
$34,699,324
Pumping Stations
$3,352,863
$3,566,604
$3,676,142
$3,668,317
$3,805,223
$3,935,565
TOTAL EXPENSES
$88,198,895
$86,171,496
$88,602,290
$87,140,879
$90,145,944
$92,453,820
1. Based on anticipated expenses as of March 2015
Table 3 -7:
Projected O &M Expenses' by Category
Salary & Wages
$28,618,169
$30,133,152
$31,338,478
$32,284,087
$33,402,716
$34,537,213
Capitalized Admin Overhead
($3,806,958)
($4,355,446)
($4,486,109)
($4,620,692)
($4,759,313)
($4,902,093)
Directors Fees & Expenses
$199,800
$207,792
$216,104
$224,748
$233,738
$243,087
Chemicals
$1,605,000
$1,685,250
$1,769,513
$1,857,988
$1,950,888
$2,048,432
Utilities
$4,861,350
$5,101,680
$5,353,943
$5,618,736
$5,896,681
$6,188,433
Repairs & Maintenance
$4,911,762
$5,059,115
$5,210,888
$5,367,215
$5,528,231
$5,694,078
Hauling &Disposal
$1,040,200
$1,080,226
$1,121,894
$1,165,275
$1,210,443
$1,257,477
Professional & Legal Services
$539,400
$555,582
$572,249
$589,417
$607,099
$625,312
Outside Services
$3,303,021
$3,402,112
$3,504,175
$3,609,300
$3,717,579
$3,829,107
Self- Insurance Expense
$650,000
$1,300,000
$1,300,000
$1,350,000
$1,350,000
$1,350,000
Materials & Supplies
$2,024,315
$2,085,044
$2,147,596
$2,212,024
$2,278,384
$2,346,736
Other Expenses
$2,419,448
$2,105,781
$2,555,205
$2,245,611
$2,699,229
$2,393,956
Allocated Benefits
$41,833,388
$37,811,208
$37,998,354
$35,237,171
$36,030,268
$36,842,080
TOTAL O &M EXPENSES
$88,198,895
$86,171,496
$88,602,290
$87,140,879
$90,145,944
$92,453,820
1. Based on anticipated expenses as of March 2015
3.5.2 Capital Improvement Program
The District has developed a comprehensive wastewater Capital Improvement Program (CIP) to address
current wastewater system needs. As Table 3 -8 indicates, the total estimated wastewater CIP for FY
2016 to FY 2020 is $181.7 million. The District applied an inflation rate of three percent per year,
starting in FY 2017. This is a conservative estimate and ensures that the District has adequate resources
reserved to complete the necessary projects. The financial plan calls for the District to fund capital costs
through rate revenues. Funding the capital costs through rates is especially prudent for the District
because the District's capital costs are fairly uniform over the planning period, except for a spike in FY
2018, and rates will provide the necessary cash to fund those projects and save on interest costs.
However, issuing debt would spread the costs over a longer term and minimize the revenue adjustments
needed in the short term. The proposed rate adjustments for FY 2016 and FY 2017 are primarily used to
fund capital in FY 2016 and FY 2017. Future capital expenses have minimal impact on the proposed
adjustments.
18 1 Central Contra Costa Sanitary District fft
Table 3 -8:
Capital Improvement Plan'
Treatment Plant
$9,045,000
$10,410,000
$12,820,000
$21,785,000
$19,429,000
$13,303,400
Collection System
$12,217,000
$15,950,000
$18,125,000
$16,840,000
$17,611,500
$15,690,000
General Improvements
$3,265,000
$3,980,000
$4,605,000
$4,203,000
$1,955,000
$2,725,000
Recycled Water
$552,000
$450,000
$500,000
$500,000
$509,500
$350,000
TOTAL CIP
$25,079,000
$30,790,000
$36,050,000
$43,328,000
$39,505,000
$32,068,400
1. Based on anticipated revenues and expenses as of March 2015
3.5.3 Revenue Adjustments
The District's financial plan projects the following revenue adjustments for the next five years, as shown
in Table 3 -9. The adjustments are necessary to meet projected expenditures and to maintain sufficient
reserve balances.
Table 3 -9:
Revenue Adjustments Schedule
3.5.4 Debt Service Requirements
Debt service requirements consist of principal and interest payments on existing debt. The District
currently has debt service obligations associated with the outstanding Recycled Water Loan and the
2009 Bonds. Existing debt service payments are approximately $3.8 million annually. Table 3 -10 shows
the existing debt service of the wastewater utility.
Table 3 -10:
Existing Debt Schedule
2020 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY
Recycled Water Loan $187,000 $187,000 $187,000 $187,000 $0 $0
2009 Bonds (Series A & B less Fed Rebate) $5,359,218 $3,604,785 $3,595,051 $3,622,926 $3,603,238 $3,600,701
TOTAL EXISTING DEBT SERVICE $5,546,218 $3,791,785 $3,782,051 $3,809,926 $3,603,238 $3,601,701
Wastewater Cost of Service Study Report 1 19
.a
2016
7.24%
2017
7.30% _
2018
5.57%
2019
5.35%
2020
4.97%
3.5.4 Debt Service Requirements
Debt service requirements consist of principal and interest payments on existing debt. The District
currently has debt service obligations associated with the outstanding Recycled Water Loan and the
2009 Bonds. Existing debt service payments are approximately $3.8 million annually. Table 3 -10 shows
the existing debt service of the wastewater utility.
Table 3 -10:
Existing Debt Schedule
2020 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY
Recycled Water Loan $187,000 $187,000 $187,000 $187,000 $0 $0
2009 Bonds (Series A & B less Fed Rebate) $5,359,218 $3,604,785 $3,595,051 $3,622,926 $3,603,238 $3,600,701
TOTAL EXISTING DEBT SERVICE $5,546,218 $3,791,785 $3,782,051 $3,809,926 $3,603,238 $3,601,701
Wastewater Cost of Service Study Report 1 19
3.5.5 Debt Service Coverage
The District must meet debt service coverage requirements on its outstanding bond issues. Coverage
requirements typically vary between 100 percent and 160 percent or higher. The District's target debt
coverage is 200 percent, which means that the District's Adjusted Net System Revenues shall amount to
at least 200 percent of the Annual Debt Service. The system revenues include funds derived from the
ownership and operation of the system including wastewater service charges from the District's
customers, miscellaneous service charges, revenues received from contracts, and interest income.
Annual Debt Service includes annual principal and interest payments on outstanding debt. Adjusted net
revenues equal the net revenues less connection fees revenue and the capital charges from City of
Concord. As shown in Table 3 -11, the District exceeds the coverage requirement during each year of
the study's planning period, which is one of several critical financial tests of the utility. The other
financial tests include cash flow and reserve levels.
Operating Revenues
Sewer Service Charges (O &M)'
Sewer charges - City of Concord
Permit and Inspection Fees
Interest Income
Other Service Charges
Total Operating Revenues
0 &M Costs
Total Operating Income (Loss)
Non - Operating Revenue
Sewer Service Charges (capital)'
Capital Charges - City of Concord
Interest Earnings (capital reserve)
Connection fees
Other Income
Total Non - Operating Revenue
Tax Revenues
Debt Service (net of credits)
Debt Coverage Calculations
Net Revenue +Tax Revenues
Debt Coverage
Adjusted Net Revenue' +Tax Revenues
Debt Coverage - Parity
Required Coverage Ratio
Table 3 -11:
Debt Coverage Calculation
$70,126,719
$74,410,069
$79,840,336
$84,287,520
$88,796,277
$93,207,121
$13,500,000
$13,926,682
$14,337,387
$14,311,392
$14,836,224
$15,380,349
$1,244,600
$1,281,938
$1,320,396
$1,360,008
$1,400,808
$1,442,833
$90,000
$196,001
$207,710
$322,273
$427,843
$555,082
$1,950,000
$2,008,500
$2,068,755
$2,130,818
$2,194,742
$2,260,584
$86,911,319
$91,823,190
$97,774,584
$102,412,011
$107,655,895
$112,845,969
$88,198,895
$86,171,496
$88,602,290
$87,140,879
$90,145,944
$92,453,820
($1,287,576)
$5,651,694
$9,172,294
$15,271,132
$17,509,952
$20,392,149
$3,750,000
$4,089,931
$4,388,512
$4,632,937
$4,880,659
$5,122,892
$3,305,000
$3,602,491
$5,487,737
$7,647,624
$6,884,640
$4,917,324
$280,000
$62,774
$52,512
$76,558
$164,224
$299,578
$6,418,000
$6,739,161
$7,066,132
$7,397,320
$7,593,278
$7,594,017
$368,000
$377,970
$388,218
$398,751
$409,578
$420,707
$14,121,000
$14,872,326
$17,383,111
$20,153,190
$19,932,379
$18,354,519
$13,695,647
$13,832,603
$13,970,930
$14,180,493
$14,464,103
$14,825,706
$5,546,218
$3,791,785
$3,782,051
$3,809,926
$3,603,238
$3,600,701
$26,529,071
$34,356,624
$40,526,335
$49,604,815
$51,906,434
$53,572,373
4.78
9.06
10.72
13.02
14.41
14.88
$16,806,071
$24,014,972
$27,972,466
$34,559,871
$37,428,516
$41,061,032
3.03
6.33
7.40
9.07
10.39
11.40
2.00
2.00
2.00
2.00
2.00
2.00
Table is based on anticipated revenues and expenses as of March 2015.
1. Includes proposed rate increase
2. Adjusted Net Revenue = Net Revenue less CCCSD Connection Fees and City of Concord Capital Charges
20 1 Central Contra Costa Sanitary District
3.5.6 Operating Financial Plan
Table 3 -12 shows the operating financial plan for FY 2015 through FY 2020 based on the revenue and
expenses information presented above. The plan includes the revenue adjustments shown in Table 3 -9.
Table 3 -12:
ine Financial Plan'
Revenue from Existing Rates - O &M
$69,447,000
$68,235,881
$68,310,851
$68,727,563
$69,153,753
$69,589,570
Revenue from Existing Rates - Capital
$3,750,000
$3,787,675
$3,791,930
$3,815,045
$3,838,620
$3,862,655
Additional Revenue from Rates
$0
$5,747,480
$11,343,905
$15,552,119
$19,814,665
$23,964,681
Subtotal Rate Revenue
$73,197,000
$77,771,035
$83,446,686
$88,094,727
$92,807,037
$97,416,905
Calibration (model to actua if
$0
$728,965
$782,163
$825,730
$869,900
$913,109
Calibrated Rate Revenue
$73,197,000
$78,500,000 4
$84,228,849
$88,920,457
$93,676,937
$98,330,013
Service Charges - Concord
$13,500,000
$13,926,682
$14,337,387
$14,311,392
$14,836,224
$15,380,349
Permit /Inspection /Right -of -Way Fees
$1,244,600
$1,281,938
$1,320,396
$1,360,008
$1,400,808
$1,442,833
Lease Rental Income
$566,000
$582,980
$600,469
$618,483
$637,038
$656,149
Household Hazardous Waste Reimbursement
$895,000
$921,850
$949,506
$977,991
$1,007,330
$1,037,550
Stormwater/ Pollution Prevention /Pretreatment
$271,000
$279,130
$287,504
$296,129
$305,013
$314,163
Interest Income'
$90,000
$196,001
$207,710
$322,273
$427,843
$555,082
Recycled Water
$103,000
$106,090
$109,273
$112,551
$115,927
$119,405
All Other
$115,000
$118,450
$122,004
$125,664
$129,434
$133,317
TOTAL REVENUES
$89,981,600
$95,913,121
$102,163,096
$107,044,947
$112,536,555
$117,968,861
O &M Expenses
Administration
$24,476,326
$24,605,598
$25,372,937
$24,805,582
$25,675,372
$25,785,443
Engineering
$12,229,549
$11,662,173
$11,925,299
$11,470,088
$11,851,909
$12,236,341
Collection System Operations
$15,617,120
$14,752,239
$15,114,151
$14,845,264
$15,308,591
$15,797,147
Plant Operations Department
$32,523,037
$31,584,881
$32,513,761
$32,351,627
$33,504,849
$34,699,324
Pumping Stations
$3,352,863
$3,566,604
$3,676,142
$3,668,317
$3,805,223
$3,935,565
TOTAL EXPENSES
$88,198,895
$86,171,496
$88,602,290
$87,140,879
$90,145,944
$92,453,820
Less: Construction Fund SSC Revenue
($3,750,000)
($4,089,931)
($4,388,512)
($4,632,937)
($4,880,659)
($5,122,892)
NET OPERATING INCOME
($1,967,295)
$5,651,694
$9,172,294
$15,271,132
$17,509,952
$20,392,149
1. Based on anticipated revenues and expenses as of March 2015.
2. Accounts for complexity of CCCSD billing system (e.g. winter quarter adjustments, manual overrides, etc.)
3. Interest shift in funds in FY 2016 due to proposed reserve policy reallocations.
4. Corresponds with proposed FY 2105 -16 O &M and Capital Budgets
Wastewater Cost of Service Study Report 121
3.5.7 Reserves
The District currently has five separate funds /reserves: Running Expense Fund, Sewer Construction
Fund, Self- Insurance /Emergency Fund, a Debt Service Fund, and a bond reserve account. The debt
service fund is used to pay the annual debt service payments with property tax revenue. This fund does
not carry a balance from year to year. The bond reserve account includes funds required to be kept in a
restricted reserve by the bondholders. The current reserve policy is set at 32 percent of next year's
O &M expenses, 30 percent of next year's CIP expenses, and 100 percent of next year's debt service
payment. The bond reserve account is maintained according to the covenants of the outstanding debt
and currently includes $4.8 million. This level of reserves is on the low side to that of comparable
agencies, including Dublin San Ramon Services District, Union Sanitary District and Contra Costa Water
District. Through a review of the District's operations, RFC proposed and the District Board agreed to
amend its reserve policy to include at least five months, or 41.7 percent, of next year's O &M expenses,
50 percent of next year's CIP expenses, 100 percent of next year's debt service payment, $1.5 million for
self- insurance, and $5 million for emergencies. The self- insurance reserve is set at $1.5 million to cover
three incidents. The emergency reserve is set at $5 million to cover the liability insurance deductible for
losses resulting from damages to wastewater assets during disasters. The estimated FY 2015 total
ending balance for the Running Expense Fund and Sewer Construction Fund is approximately $46.7
million, as shown in Figure 3 -1. These reserves also account for the cash flow needs associated with the
District's receipt of Sewer Service Charge revenue in two lump -sum payments in December and April of
each year.
The reserve balance' and the current and proposed targets for the running expense fund and sewer
construction fund are shown in Figure 3 -1. The reserve level is projected to meet the proposed target
by FY 2020.
Figure 3 -1:
Projected Reserves— Running Expense and Sewer Construction Funds
N $90
c
-° $80
$ 70 -------------- _ -... _-......-._...._-..-... ..._......_- ..- ..-- ......... .... -. - ._......_.... -. -......-._..........__......_-..- ...- ........._ .... .... ..._.......................................... .
$60 - -- -
$50 -----
--
$40 --- - -.....
$30 - ---------- - - -- -- - ---------- - - - - -- - ------ - - -- -- -- - - - - --
$ 20 - ............ .. ............... ...... ................ -- - -
$10 - - --- -- - -. - - - - --
$0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Ending Balance Current Target — –Proposed Target
1 Excludes $6.5 million for self- insurance and emergency reserve.
22 1 Central Contra Costa Sanitary District
Figure 3 -2 shows the total fund balance by the different funds maintained by the District, including the
Running Expense, Sewer Construction Fund, and the Self- Insurance Fund, which includes the Emergency
Fund.
Figure 3 -2:
Projected Reserves
Ic $90
0
$80
$70
$60
$50
$40
$30
$20
$10
$0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
■ Running Expense Fund ■ Sewer Construction Fund Self- Insurance Fund
Table 3 -13 shows the total fund balances for the different funds within the District, as well as the
current and proposed reserve targets.
Wastewater Cost of Service Study Report 123
Table 3 -13:
Projected Reserves'
RUNNING EXPENSE FUND
$11,875,000
$9,538,813
$10,869,552
$15,228,631
$23,070,280
$3,750,000
Beginning Balance
$36,750,000
$34,782,705
$36,917,621
$36,308,699
$37,560,810
$38,522,425
Net Income
($1,967,295)
$5,651,694
$9,172,294
$15,271,132
$17,509,952
$20,392,149
Ending Balance before Transfers
$34 ,782,705
$40,434,400
$46,089,915
$51,579,831
$55,070,762
$58,914,574
Transfer to Sewer Construction Fund'
$0
($3,516,779)
($9,781,215)
($14,019,021)
($16,548,337)
($19,144,312)
Transfer to Debt Service Fund
$0
$0
$0
$0
$0
$0
Ending Balance
$34,782,705
$36,917,621
$36,308,699
$37,560,810
$38,522,425
$39,770,262
Under (Over) Target
$1,122,084
$284,109
$292,632
$301,411
$1,000
$1,030
Proposed O&M Target 42%
$35,904,790
$36,917,621
$36,308,699
$37,560,810
$38,522,425
$39,770,262
SEWER CONSTRUCTION FUND
Beginning Balance
Revenue
Sewer Service Charge
Property Tax Revenue
Capacity Fee Revenue
Pump Zone Revenue
Concord Capital Revenue
Interest Income
Permit and Inspection Fees
Recycled Water
All Other
New Bond Proceeds
New SRF Proceeds
Transferfrom Running Expense Fund'
Total Revenue
Expenses
Capital Projects
Total Expenses
Ending Balance
Under (Over) Target
$14,673,000
$11,875,000
$9,538,813
$10,869,552
$15,228,631
$23,070,280
$3,750,000
$4,089,931
$4,388,512
$4,632,937
$4,880,659
$5,122,892
$8,160,000
$10,064,708
$10,212,767
$10,406,401
$10,908,644
$11,284,728
$5,890,000
$6,184,425
$6,484,415
$6,788,320
$7,095,960
$7,407,155
$528,000
$554,736
$581,717
$609,000
$497,318
$186,862
$3,305,000
$3,602,491
$5,487,737
$7,647,624
$6,884,640
$4,917,324
$280,000
$62,774
$56,157
$82,025
$171,513
$308,690
$107,000
$109,140
$111,323
$113,549
$115,820
$118,137
$260,000
$267,800
$275,834
$284,109
$292,632
$301,411
$1,000
$1,030
$1,061
$1,093
$1,126
$1,159
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$3,516,779
$9,781,215
$14,019,021
$16,548,337
$19,144,312
$22,281,000
$28,453,813
$37, 380, 739
$44 ,584,079
$47,396,649
$48,792,670
$25,079,000
$30,790,000
$36,050,000
$40,225,000
$39,555,000
$33,118,400
$25,079,000
$30,790,000
$36,050,000
$40,225,000
$39,555,000
$33,118,400
$11,875,000
$9,538,813
$10,869,552
$15,228,631
$23,070,280
$38,744,550
$3,520,000
$8,486,187
$9,242,948
$4,548,869
($6,511,080)
($18,212,908)
Proposed Capital Target 501% $15,395,000 $18,025,000 $20,112,500 $19,777,500 $16,559,200 $20,531,642
Table is based on anticipated revenues and expenses as of March 2015.
1. Beginning in FY 2016through 2020 amount Under (Over) Target reserve is shown as a transferto /from Sewer Construction Fund.
24 1 Central Contra Costa Sanitary District
Table 3 -13:
Projected Reserves'
(cont'd)
SELF - INSURANCE FUND
Beginning Balance
$6,500,000
$6,417,442
$6,908,217
$7,323,131
$7,746,665
$8,116,751
Revenue
SIF Allocation from O &M Fund
$650,000
$1,300,000
$1,300,000
$1,350,000
$1,350,000
$1,350,000
All Other
$106,942
$72,975
$76,624
$80,455
$84,478
$86,590
Total Revenue
$756,942
$1,372,975
$1,376,624
$1,430,455
$1,434,478
$1,436,590
Expenses
Insurance Premiums
$437,500
$480,200
$504,210
$529,421
$555,892
$583,686
Loss Payments
$250,000
$250,000
$300,000
$300,000
$300,000
$300,000
All Other
$152,000
$152,000
$157,500
$177,500
$208,500
$202,500
Total Expenses
$839,500
$882,200
$961,710
$1,006,921
$1,064,392
$1,086,186
Ending Balance
$6,417,442
$6,908,217
$7,323,131
$7,746,665
$8,116,751
$8,467,155
Proposed SIF Target
$1,500,000
$1,500,000
$1,500,000
$1,500,000
$1,500,000
$1,500,000
Proposed Emergency Target
$5,000,000
$5,000,000
$5,000,000
$5,000,000
$5,000,000
$5,000,000
Under(Over)Target
$82,558
$408,217
$823,131
$1,246,665
$1,616,751
$1,967,155
DEBT SERVICE FUND
Beginning Balance
$0
$0
$0
$0
$0
$0
Revenue
Sewer Service Charge
$0
$0
$0
$0
$0
$0
Tax Revenue
$4,949,468
$3,767,895
$3,758,162
$3,774,093
$3,555,459
$3,540,978
Transferto Debt Service Fund
$556,050
$0
$0
$0
$0
$0
Bond Reserve Account Interest
$40,700
$23,889
$23,889
$35,834
$47,779
$59,723
Total Revenue
$5,546,218
$3,791,785
$3,782,051
$3,809,926
$3,603,238
$3,600,701
Debt Service
Existing Debt Service
$5,546,218
$3,791,785
$3,782,051
$3,809,926
$3,603,238
$3,600,701
Proposed Debt Service
$0
$0
$0
$0
$0
$0
Total Debt Service
$5,546,218
$3,791,785
$3,782,051
$3,809,926
$3,603,238
$3,600,701
Ending Balance
$0
$0
$0
$0
$0
$0
BOND RESERVE ACCOUNT
Beginning Balance
$5,333,900
$4,777,850
$4,777,850
$4,777,850
$4,777,850
$4,777,850
Proposed Bond Reserves
$0
$0
$0
$0
$0
$0
Transferto Debt Service Fund
($556,050)
$0
$0
$0
$0
$0
Ending Balance
$4,777,850
$4,777,850
$4,777,850
$4,777,850
$4,777,850
$4,777,850
TOTAL ALL FUNDS $57,852,997 $58,142,501 $59,279,232 $65,313,956 $74,487,306 $91,759,817
Table is based on anticipated revenues and expenses as of March 2015.
1. Beginning in FY 2016through 2020amount Under (Over) Target reserve is shown as a transferto /from Sewer Construction Fund.
Wastewater Cost of Service Study Report 125
4. COST OF SERVICE ANALYSIS
This section of the Report discusses the allocation of O &M expenses and capital costs to the appropriate
parameters consistent with industry standards, the determination of unit costs, and calculation of costs
by customer class.
To allocate the cost of service among the different customer classes, costs first need to be allocated to
the appropriate wastewater parameters. The following sections describe the allocation of the operating
and capital costs of service to the appropriate parameters of the wastewater system.
The total cost of wastewater service is analyzed by system function in order to equitably distribute costs
of service to the various classes of customers. For this analysis, wastewater utility costs of service are
developed consistent with the guidelines for allocating costs detailed in the Water Environment
Federation (WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems, 2004.
The wastewater COS analysis consists of seven major steps, as outlined below:
1. Determine non - residential customer flow and strength loadings based on water usage.
2. Conduct plant balance to estimate the flow and strength of the residential customer class taking
into consideration infiltration and inflow (1 &1).
3. Functionalize O &M and capital costs into functional categories such as Collection, Treatment,
and Billing and Customer Service, etc.
4. Allocate each functional category into cost components such as Flow, Strength, and Billing and
Customer Service, etc.
5. Develop customer class characteristics by cost component.
6. Calculate the cost component rates by dividing the total cost in each cost component in Step 4
by the customer class characteristics in Step 5.
7. Calculate the cost by customer class by multiplying the unit cost in Step 6 by the customer class
characteristics in Step 5.
4.1 PROPOSED CUSTOMER CLASSIFICATIONS
As part of the Study, RFC reviewed the current customer classifications and found that a significant
portion of the non - residential customers is included in the Standard Commercial class. The Standard
Commercial class accounts for approximately 71 percent of the total non - residential water usage (refer
to Table 3 -4). RFC proposed to separate the following customer classes from the Standard Commercial
class because industry standards have these classes at higher strength concentration:
• Automotive — gas stations, repair and maintenance facilities, auto dealerships, body and
painting facilities, similar facilities for aircraft and boats
• Hotels/ Motels — with food service
• Supermarkets — with one or more of: meat cutting, delicatessens, bakeries and other activities
resulting in the discharge of high- strength wastewater
Table 4 -1 compares the current defined strength concentrations, which consist of BOD and TSS, with the
proposed strength concentrations.
26 1 Central Contra Costa Sanitary District rk
Table 4 -1:
Current and Proposed Wastewater Strength
Standard Commercial
150
165
150
165
Hotels /Motels
150
165
310
120
Automotive
150
165
180
280
Supermarkets
150
165
700
360
A review of the estimated wastewater flow for schools showed that the current estimates for
intermediate and high schools are significantly lower than industry standards. Thus, to increase equity,
RFC proposed that the estimated flow for schools be revised to the current standards. The estimated
flows used in the Cost of Service calculations are based on 180 school days per calendar year. Table 4 -2
compares the current wastewater flow per student per day for the various school types with the
proposed wastewater flow per student per day. The higher flows for high schools represent the
additional wastewater generated from additional instructional activities as well as extra - curricular
activities such as athletics which generate wastewater flows from both student participants and
spectators. The actual water consumption for intermediate school and high school flows were
reviewed. It is recommended that any school with actual water consumption less than the per- student
estimate be billed based on the actual water use.
Table 4 -2:
Current and Proposed Wastewater Flow for Schools
PROPOSED
SCHOOLS ..
Elementary Schools 5 gallons per student 5 gallons per student
perschoolday perschoolday
Intermediate Schools 5.3 gallons per student 10 gallons per student
perschoolday perschoolday
High Schools 5.6 gallons per student 15 gallons per student
perschoolday perschoolday
Residential customers currently include both single family residential (SFR) and multi - family residential
(MFR) customers. RFC explored whether it is more equitable to differentiate these two residential
classes. Based on the 2010 U.S. Census data, the estimated average housing density for SFR within the
District's service area is 2.61 people per household, and for MFR is 2.21 people per household. The
estimated wastewater flow is proportional to the number of people per household, therefore MFR flow
is estimated at approximately 85 percent (2.21/2.61) of the SFR flow, as shown in Table 4 -3. This data
provides a basis for categorizing SFR and MFR classes separately.
rk Wastewater Cost of Service Study Report 127
In addition to the proposed changes, RFC suggested that the District conduct an comprehensive review
of the mixed use and food service categories to ensure that they are categorized and charged correctly
and equitably. The District should also consider conducting flow and strength measurements to confirm
non - residential customer class characteristics. Such a review could then be used to evaluate and
simplify the District's food service and multi -use rate categories.
The plant balance analysis is used to estimate and validate the wastewater loadings (flow and strength)
generated by each customer class. While wastewater discharged into sewers for most customers is not
metered when it enters the wastewater system, the total amount of flow and strength entering the
treatment plant and treated every day is a known quantity. Additionally, non - residential customer flows
and strengths can be estimated based on their water usage; non - residential customer strength
concentrations are estimated according to industry accepted standards. Flow from the cities of Concord
and Clayton is measured and the strength is assumed to be equal to the District's strength
concentration. The remaining loadings, net of the total less infiltration and inflow (I &I), contract
agencies, and non - residential and industrial, are assigned to residential customers. Based on this plant
balance, the estimated residential flow is determined to be 55 gallons per capita per day, which is a
reasonable estimate of the amount of indoor water usage per person. The estimated residential
strength concentration is 200 and 275 milligrams per liter (mg /1) of BOD and TSS, respectively, which is
also a reasonable estimate of residential strength concentration.
The estimated loadings by customer class are shown in Table 4 -3 including the assumed BOD and TSS
loadings.
28 1 Central Contra Costa Sanitary District fft
rk Wastewater Cost of Service Study Report 129
Table 4 -3:
FY 2014 Plant Balance
Influent Data
Flow (hcf)
BOD (Ibs /yr)
TSS (Ibs /yr)
Total Plant
17,184,225
21,958,201
29,156,029
Less: 1&1
343,684
13,098
905,786
Net Wastewater
16,840,540
21,945,104
28,250,243
Concord and Clayton
5,407,167
6,716,946
9,282,212
Non - Residential
Bakeries
266
1,657
994
Supermarkets
81,790
357,395
183,803
Mortuaries
3,940
19,677
19,677
Restaurants
155,302
678,617
349,003
Industrial
83,352
254,930
280,535
Church
55,959
52,398
57,638
Schools (Daycare, Preschool, University)
8,010
6,500
5,000
Schools (Elementary)
33,791
27,422
21,094
Schools (Intermediate)
35,661
28,939
22,261
Schools (High School)
71,972
58,406
44,928
Rate Group XA
27,440
35,115
31,860
Rate Group XB
9,014
14,629
11,647
Rate Group XC
29,384
57,779
41,821
Rate Group XD
27,525
63,573
42,783
Rate Group XE
29,499
78,262
49,719
Rate Group XF
34,799
104,268
63,212
Rate Group XG
29,282
97,790
57,029
Rate Group XH
37,837
139,353
78,652
Rate Group XI
33,558
135,117
74,157
Rate Group XJ
518
2,647
1,668
Rate Group XK
2,372
11,662
7,275
Rate Group XL
470
2,484
1,530
Rate Group XM
508
2,818
1,722
Rate Group XN
1,985
11,603
7,027
Rate Group XO
0
0
0
Standard Commercial
1,427,531
1,336,674
1,470,342
Hotels /Motels
112,406
350,841
421,009
Automotive
48,092
54,038
84,059
Subtotal Non - Residential
2,382,262
3,984,595
3,430,445
Residential
S F R
6,117, 684
7,599,571
10, 501, 919
MFR
2,933,427
3,643,992
5,035,667
Subtotal Residential
9,051,111
11,243,562
15,537,586
NET WASTEWATER
16,840,540
21,945,104
28,250,243
rk Wastewater Cost of Service Study Report 129
4.3 ALLOCATION OF REVENUE REQUIREMENTS BY FUNCTION
The wastewater utility is comprised of various facilities each designed and operated to fulfill a given
function. In order to provide adequate service to its customers at all times, the utility must be capable
of not only collecting the total amount of wastewater generated, but also treating and removing various
nutrients from the flow. The separation of costs by function allows allocation of such costs to the
functional cost components. Table 4 -4 shows the FY 2016 O &M expenses by the different functional
categories, as classified by District staff. Administration and Engineering expenses are reclassified into
Collection and Treatment portions in proportion to the Flow and Treatment costs.
Table 4 -4:
Allocation of Wastewater O &M Expenses by Function
Administration - Flow portion
Administration - Treatment portion
Engineering- Flow portion
Engineering - Treatment portion
Collection System Operations
Plant Operations Department
Pumping Stations
TOTAL O &M EXPENSES
$7,321,360
$12,623,302
$5,991,947
$10,331,162
$14,752,239
$31,584,881
$3,566,604
$86,171,496
Engineering allocations shown include allocation of a
portion of Administration expenses.
Table 4 -5 shows the replacement value of the total wastewater assets by the different assets classes, as
taken from a 2014 analysis provided by the District Asset Management group.
30 1 Central Contra Costa Sanitary District fft
Table 4 -5:
Allocation of Wastewater Assets by Function
Collection System
Sewer Main
CS Structures
Force Main
Pumping Station
Equip & Vehicles
Total Collection System
Treatment Plant
$2,492,383,782
$191,436,451
$46,361,275
$63,3S4,161
$1,250,000
$2,794,785,669
Structures $270,126,328
Equipment $236,903,194
Piping $178,000,000
Total Treatment Plant $685,029,522
General Improvements
General Improvements $28,618,237
Pool Vehicles $600,000
IT $10,000,000
Total General Improvements $39,218,237
Recycled Water
Treatment Facilities $58,077,551
Distribution Mains $19,531,484
Total Recycled Water $77,609,035
TOTAL ASSETS $3,596,642,463
4.4 ALLOCATION OF FUNCTIONAL COSTS TO COST COMPONENTS
In order to allocate costs of service to the different customer classes, unit costs of service are
developed. O &M expenses and capital costs are functionalized as collection, treatment, billing,
administrative, etc. These total costs are then allocated to the flow, BOD, TSS, and customer
parameters based on the design of each facility. Collection system and pump station costs are allocated
to flow and customer parameters to recognize that a portion of the collection system cost is fixed and
does not vary with the amount of wastewater flow. These allocations were initially determined based
on District's staff estimate of the fixed costs of the collection system, which were determined by RFC to
be reasonable. Treatment plant costs are allocated to flow, BOD, and TSS since the treatment plant is
designed to treat those three components. The treatment allocations were developed by District staff
during a comprehensive review of the treatment plant functions in 2008. The District believes that the
treatment cost structure has not changed significantly since then.
Wastewater Cost of Service Study Report 131
Operating costs are allocated based on the design criteria of each facility. Collection system costs are
allocated entirely to flow since the collection system is designed to handle wastewater flow. However,
since these costs are almost entirely fixed, a portion of the flow related operating costs is allocated to
customers recognizing that irrespective of the quantity of flow, costs associated with cleaning and
maintaining the collection system are incurred and therefore all customers need to share in this cost
irrespective of their flow. Since treatment plants are designed to treat flow, BOD and TSS, treatment
costs are allocated to those three parameters: based on the design of each component of the treatment
system. For example, the equipment in the primary clarifiers is designed to remove suspended solids.
Along with suspended solids there is also some removal of BOD; therefore the equipment is allocated to
TSS and BOD based on the removal of those two parameters. Additionally, the primary tank structure is
designed for flow; therefore the structure is allocated to flow. Similarly other components of the
treatment plant are analyzed to determine the appropriate allocation to flow, BOD and TSS.
Capital costs include capital improvements financed from annual revenues, debt service and other
sources. Capital costs related to specific facilities will vary significantly from year to year. Allocating
these costs based on the functions of these specific facilities could cause the rates to the different
customer classes to change from year to year. A reasonable method of assigning capital costs to
functional components, widely practiced in the industry, is to allocate such costs on the basis of plant
investment recognizing that over a period of time these allocations will provide costs to be passed on to
customers equitably.
Table 4 -6 shows the different allocations to the Flow, BOD, TSS, and Customer O &M functional cost
categories. The allocations are calculated based on the functions of each category, provided by the
District.
Table 4 -6:
Allocation to Cost Components — O &M
Administration - Collection portion
60%
40%
100%
Administration - Treatment portion
40%
38% 22%
100%
Engineering - Collection portion
40%
60%
100%
Engineering - Treatment portion
40%
38% 22%
100%
Collection System Operations
60%
40%
100%
Plant Operations Department
40%
38% 22%
100%
Pumping Stations
60%
40%
100%
Table 4 -7 shows the allocation of O &M expenses (shown in Table 4 -4) to the different cost components
based on the allocation percentages shown in Table 4 -6.
Table 4 -7:
Allocation of O &M Expenses to Cost Components
Administration - Flow portion
$4,392,816
$0
$0
$2,928,544
$0
$7,321,360
Administration - Treatment portion
$5,049,321
$4,796,855
$2,777,126
$0
$0
$12,623,302
Engineering- Flow portion
$2,396,779
$0
$0
$3,595,168
$0
$5,991,947
Engineering - Treatment portion
$4,132,465
$3,925,842
$2,272,856
$0
$0
$10,331,162
Collection System Operations
$8,851,344
$0
$0
$5,900,896
$0
$14,752,239
Plant Operations Department
$12,633,952
$12,002,255
$6,948,674
$0
$0
$31,584,881
Pumping Stations
$2,139,962
$0
$0
$1,426,642
$0
$3,566,604
TOTAL O&M EXPENSES
$39,596,639
$20,724,951
$11,998,656
$13,851,250
$0
$86,171,496
Allocation %
46%
24%
14%
16%
0%
32 1 Central Contra Costa Sanitary District rk
Table 4 -8 shows the different allocations, provided by the District, to the cost components such as Flow,
BOD, TSS, etc. of the treatment plant assets.
Wet Weather Facilities
Holding Basins
Bypass Facilities
Primary Treatment
Headworks
Pre - Aeration
Primary Sedimentation
Odor Control
Secondary Treatment
Primary Effluent
Aeration /Nitrification
Secondary Clarifiers
Odor Control
Disinfection
Uv
Hypochlorite
Chlorine /Dechlorine
Gi-I Fffh t
Table 4 -8:
Allocation of Treatment Plant Assets to Cost Components
$152,500
100%
0%
0%
$6,803,307
100%
0%
0%
$9,954,350
100%
0%
0%
$6,472,000
45%
10%
45%
$47,747,805
45%
10%
45%
$5,607,500
45%
10%
45%
$2,963,900
100%
0%
0%
$77,580,885
25%
65%
10%
$40,736,800
25%
65%
10%
$10,000
25%
65%
10%
$42,439,793
100%
0%
0%
$1,635,558
100%
0%
0%
$2,993,400
100%
0%
0%
FE Channel
$91,100
100%
0%
0%
FE Pumping
$2,984,750
100%
0%
0%
Outfall
$70,770,040
100%
0%
0%
Solids Handling
SCB Building
$31,217,600
0%
60%
40%
Sludge Blending Process
$3,613,500
0%
60%
40%
Dewatering
$21,759,734
0%
60%
40%
Incineration
$82,790,608
0%
60%
40%
Odor Control
$1,944,750
0%
60%
40%
Utilities
Steam Generation
$5,246,292
25%
65%
10%
Power Distribution
$30,765,500
100%
Power Generation
$12,377,450
10%
20%
40%
30%
Control Systems
$4,191,600
100%
Communication Systems
$600
100%
Fuel System
$6,734,698
10%
20%
40%
30%
Service Air
$1,871,300
100%
Water Systems
$120,271,682
0%
0%
0%
100%
Support System
Safety
$357,400
100%
Shops
$14,746,025
100%
Misc Facilities
$14,210,784
100%
Site Work
$13,986,311
100%
TOTAL
$685,029,522
$200,515,694
$174,923,961
$103,455,021
$0 $206,134,846
Allocation
29%
26%
15%
0% 30%
Table 4 -9 shows the different allocations to the cost components such as Flow, BOD, TSS, etc. of each
capital asset class.
Wastewater Cost of Service Study Report 133
Collection System
Treatment Plant
General Improvements
Recycled Water
Table 4 -9:
Allocation of Capital to Cost Components
100%
29% 26%
100%
15% 0% 30%
100%
100%
100%
100%
100%
Table 4 -10 shows the allocation of the replacement value of the wastewater assets (shown in Table 4 -5)
to the different cost components based on the allocation percentages shown in Table 4 -9.
Table 4 -10:
Allocation of Wastewater Assets to Cost Components
Collection System
$2,794,785,669
$0
$0
$0
$0
$2,794,785,669
Treatment Plant
$200,515,694
$174,923,961
$103,455,021
$0
$206,134,846
$685,029,522
General Improvements
$0
$0
$0
$0
$39,218,237
$39,218,237
Recycled Water
$77,609,035
$0
$0
$0
$0
$77,609,035
TOTAL ASSETS
$3,072,910,398
$174,923,961
$103,455,021
$0
$245,353,083
$3,596,642,463
Allocation %
85%
5%
3%
0%
7%
4.5 ALLOCATION OF REVENUE REQUIREMENTS
The total revenue requirements net of revenue credits from miscellaneous sources, is by definition, the
net revenue requirements or net cost of providing service as shown in Table 4 -11. This cost is then used
as the basis to develop unit costs for the wastewater parameters and to allocate costs to the various
customer classes in proportion to the services rendered. The concept of proportionate allocation to
customer classes requires that allocations should take into consideration not only the volume of
wastewater discharge used but also strength loadings associated with the wastewater flow. In this
study, wastewater rates were calculated for FY 2016, and accordingly FY 2016 is defined as the Test
Year. Test Year revenue requirements are used in the cost allocation process.
The annual revenue requirement or cost of service to be recovered from wastewater charges includes
operation and maintenance and capital expenses. O &M expenses include costs directly related to the
collection, treatment, and disposal of wastewater and maintenance of system facilities.
The total FY 2016 cost of service to be recovered from the District's wastewater customers, shown in
Table 4 -11, is estimated at approximately $78 million, of which approximately $69.9 million is operating
costs and the remaining $7.9 million is capital costs, which consists of capital expenditures and existing
debt service. The cost of service analysis is based upon the premise that the utility must generate
annual revenues adequate to meet the estimated annual revenue requirements. As part of the cost of
service analysis, revenues from sources other than wastewater rates and charges (e.g. revenues from
miscellaneous services) are deducted from the appropriate cost elements. Additional deductions are
made to reflect interest income and other non - operating income during FY 2016. Adjustments are also
made to account for cash balances to ensure adequate collection of revenue and to determine annual
revenues needed from rates.
34 1 Central Contra Costa Sanitary District
Table 4 -11 shows the allocation of revenue requirements to operating and capital components to
determine the revenue required from rates.
Table 4 -11:
Allocation of Revenue Requirements'
Less: Adjustments
Adjustment for Annual Cash Balance ($1,851,050) $2,052,322 $201,272
Subtotal Adjustments ($1,851,050) $2,052,322 $201,272
Revenue to be Recovered from Rates
$69,880,459 $7,890,575 $77,771,035
1. Existing debt service is paid by property tax revenue. The property tax revenue shown
in this table is net of the debt service expenses.
00
Wastewater Cost of Service Study Report 135
Operating
Capital
Total
Revenue Requirements
Administration
$24,605,598
$24,605,598
Engineering
$11,662,173
$11,662,173
Collection System Operations
$14,752,239
$14,752,239
Plant Operations Department
$31,584,881
$31,584,881
Pumping Stations
$3,566,604
$3,566,604
Capital Projects
$30,790,000
$30,790,000
Subtotal Revenue Requirements
$86,171,496
$30,790,000
$116,961,496
Less: Revenues from Other Sources
Service Charges - Concord
$13,926,682
$13,926,682
Permit /Inspection /Right -of -Way Fees
$1,281,938
$1,281,938
Lease Rental Income
$582,980
$582,980
Household Hazardous Waste Reimbursement
$921,850
$921,850
Stormwater/ Pollution Prevention /Pretreatment
$279,130
$279,130
Interest Income
$196,001
$196,001
Recycled Water
$106,090
$106,090
All Other
$118,450
$118,450
Calibration (model to actual)
$728,965
$728,965
Property Tax Revenue
$10,064,708
$10,064,708
Capacity Fee Revenue
$6,184,425
$6,184,425
Pump Zone Revenue
$554,736
$554,736
Concord Capital Revenue
$3,602,491
$3,602,491
Interest Income
$62,774
$62,774
Permit and Inspection Fees
$109,140
$109,140
Recycled Water
$267,800
$267,800
All Other
$1,030
$1,030
New Bond Proceeds
$0
$0
New SRF Proceeds
$0
$0
Subtotal Revenues from Other Sources
$18,142,086
$20,847,103
$38,989,189
Less: Adjustments
Adjustment for Annual Cash Balance ($1,851,050) $2,052,322 $201,272
Subtotal Adjustments ($1,851,050) $2,052,322 $201,272
Revenue to be Recovered from Rates
$69,880,459 $7,890,575 $77,771,035
1. Existing debt service is paid by property tax revenue. The property tax revenue shown
in this table is net of the debt service expenses.
00
Wastewater Cost of Service Study Report 135
4.6 DEVELOPMENT OF UNIT COSTS OF SERVICE
In order to allocate costs of service to the different customer classes, unit costs of service need to be
developed for each cost component. The unit costs of service are developed by dividing the total annual
costs allocated to each parameter by the total annual service units of the respective component.
The unit costs of service are developed by dividing the total annual costs by the appropriate service
units, such as flow, BOD and TSS generated in the system and accounts for billing costs. Table 4 -12
shows the service units, such as annual flow, total pounds of BOD and TSS, dwelling units, accounts, etc.
for each customer class. These service units are determined from the plant balance shown in Table 4 -3
and from the customer data shown in Tables 3 -3 and 3 -4.
Table 4 -12:
Projected FY2016 Customer Class Service Units'
Residential
SFR
6,436,719
7,995,886
11,049,591
91,871
MFR
2,623,444
3,258,921
4,503,534
44,052
Total Residential
9,060,162
11,254,807
15,553,125
0
135,923
Non - Residential
Bakeries
266
1,660
996
4
Supermarkets
81,946
358,074
184,152
31
Mortuaries
3,948
19,714
19,714
8
Restaurants
155,597
679,907
349,666
216
Industrial
83,510
281,068
255,415
13
Church
56,066
52,497
57,747
113
Schools (Daycare, Preschool, University)
8,025
6,513
5,010
14
Schools (Elementary)
33,855
27,474
21,134
51
Schools (Intermediate)
35,728
28,994
22,303
18
Schools (High School)
72,109
58,517
45,013
19
Rate Group XA
27,492
35,181
31,921
8
Rate Group XB
9,031
14,657
11,669
4
Rate Group XC
29,440
57,889
41,901
17
Rate Group XD
27,577
63,694
42,864
15
Rate Group XE
29,555
78,411
49,814
20
Rate Group XF
34,865
104,466
63,333
25
Rate Group XG
29,337
97,976
57,138
23
Rate Group XH
37,909
139,618
78,801
27
Rate Group XI
33,622
135,373
74,298
30
Rate Group XJ
518
2,652
1,672
1
Rate Group XK
2,377
11,685
7,289
2
Rate Group XL
471
2,489
1,533
1
Rate Group XM
509
2,824
1,725
1
Rate Group XN
1,989
11,626
7,040
1
Rate Group XO
0
0
0
0
Standard Commercial
1,430,244
1,339,215
1,473,137
2,203
Hotels /Motels
112,620
351,508
421,809
21
Auto Repair Facilities
48,184
54,141
84,219
182
Total Non - Residential
2,386,790
4,017,823
3,411,312
3,069
GRANDTOTAL
11,446,953
15,272,629
18,964,437
3,069
135,923
28,137
14,847
19,977
62,961
62,961
1 Non - residential flow estimates include a 90% reduction factor to account for water usage that does not contribute to wastewater flow.
36 1 Central Contra Costa Sanitary District
AW
The total operating and capital revenue requirements (from Table 4 -11) are allocated to the different
cost components based on the percentages calculated in Tables 4 -7 and 4 -10, respectively. The General
component is allocated proportionally back to the remaining costs components. Table 4 -13 shows the
calculation of the unit cost for each cost component, using the units of service from Table 4 -12.
Table 4 -13:
Development of Unit Costs
Operating Revenue Requirements
$32,110,750
$16,806,823
$9,730,266
$11,232,620
$0
$69,880,459
Capital Revenue Requirements
$6,741,574
$383,761
$226,967
$0
$538,273
$7,890,575
Total Revenue Requirements
$38,852,324
$17,190,584
$9,957,233
$11,232,620
$538,273
$77,771,035
Allocation of General Cost
$270,781
$119,810
$69,397
$78,286
($538,273)
$0
Total Cost of Service
Unit of Service
Units
Unit Cost
Units
$39,123,105 $17,310,394 $10,026,630 $11,310,906 $0 $77,771,035
11, 446, 953 15, 272, 629 18, 964, 437 138,992
hcf Ibs /yr Ibs /yr DU /accounts
$3.42 $1.13 $0.53 $81.38
hcf Ibs /yr Ibs /yr DU /accounts
4.7 ALLOCATION OF COSTS TO CUSTOMER CLASS
The unit cost of each of the cost categories shown in Table 4 -13 is then applied to the projected FY 2016
service units of each customer class to derive customer class costs. Table 4 -14 shows the allocation of
costs to each customer class, based on the service units from Table 4 -12 and the unit cost from Table 4-
13.
Wastewater Cost of Service Study Report 137
Table 4 -14:
Allocation of Costs to Customer Class
Residential
SFR
MFR
Subtotal Residential
Non - Residential
Bakeries
Supermarkets
Mortuaries
Restaurants
Industrial
Church
Schools (Daycare, Preschool, University)
Schools (Elementary)
Schools (Intermediate)
Schools (High School)
Rate Group XA
Rate Group XB
Rate Group XC
Rate Group XD
Rate Group XE
Rate Group XF
Rate Group XG
Rate Group XH
Rate Group XI
Rate Group XJ
Rate Group XK
Rate Group XL
Rate Group XM
Rate Group XN
Rate Group XO
Standard Commercial
Hotels /Motels
Automotive
Subtotal Non - Residential
TOTAL
$21,999,253
$9,062,744
$5,841,996
$7,476,293
$44,380,286
$8,966,339
$3,693,745
$2,381,050
$3,584,880
$18,626,014
$30,965,593
$12,756,489
$8,223,046
$11,061,172
$63,006,300
$909
$1,882
$527
$326
$3,644
$280,072
$405,851
$97,363
$2,528
$785,813
$13,492
$22,345
$10,423
$652
$46,912
$531,797
$770,624
$184,871
$17,611
$1,504,903
$285,419
$318,570
$135,039
$1,058
$740,086
$191,620
$59,502
$30,531
$9,213
$290,866
$27,428
$7,381
$2,649
$1,141
$38,600
$115,709
$31,139
$11,173
$4,158
$162,180
$122,112
$32,862
$11,792
$1,468
$168,234
$246,453
$66,325
$23,799
$1,549
$338,125
$93,962
$39,876
$16,877
$652
$151,367
$30,865
$16,612
$6,170
$326
$53,973
$100,619
$65,613
$22,153
$1,386
$189,771
$94,252
$72,192
$22,663
$1,223
$190,330
$101,014
$88,873
$26,337
$1,631
$217,854
$119,160
$118,405
$33,484
$2,038
$273,087
$100,268
$111,049
$30,209
$1,875
$243,401
$129,564
$158,247
$41,663
$2,201
$331,675
$114,913
$153,436
$39,282
$2,446
$310,076
$1,772
$3,006
$884
$82
$5,744
$8,124
$13,244
$3,854
$163
$25,384
$1,609
$2,821
$810
$82
$5,321
$1,738
$3,201
$912
$82
$5,932
$6,799
$13,177
$3,722
$82
$23,779
$0
$0
$0
$0
$0
$4,888,252
$1,517,901
$778,858
$179,241
$7,364,252
$384,910
$398,408
$223,013
$1,709
$1,008,040
$164,681
$61,364
$44,527
$14,811
$285,384
$8,157,512
$4,553,904
$1,803,584
$249,734
$14,764,734
$39,123,105
$17,310,394
$10,026,630
$11,310,906
$77,771,035
The residential class has the highest assignment of costs at $63 million and is responsible for 81 percent
of the total cost of service. The non - residential classes are responsible for the remaining 19 percent of
the annual cost of service.
Once the customer class cost responsibility is determined, the next step is to design customer rate
schedules to recover the revenues required from each customer class, which is discussed in the next
section. The rate design analysis will illustrate how revenues are collected within each class using the
current rate structure and how these revenues compare to the indicated cost of service.
38 1 Central Contra Costa Sanitary District rk
5. PROPOSED WASTEWATER RATES
501 RATE DESIGN
The revenue requirements and cost of service analyses described in the preceding sections of this report
provide a basis for the design of a wastewater rate structure. Rate design involves the development of
rate schedules for each customer class so as to recover the annual cost of service determined for each
customer class. This section of the report discusses the development of a schedule of wastewater rates
for the District's customer classes and analyzes the impact of the proposed changes in cost allocations
and rate design on the customer classes.
The primary emphasis in the design of rate structures is ordinarily placed on achieving fairness and
equity, with the objective of being able to ensure that each customer class pays its fair share of costs
and to comply with regulatory requirements. The following subsections discuss how each rate
component is calculated.
5.2 PROPOSED RESIDENTIAL CHARGES
The District currently has a fixed charge structure for its residential wastewater customers. Since the
District bills on the tax roll and does not have access to all customers' water usage records, RFC
recommends that the District retain the fixed charge structure for residential customers. However, due
to the different residential density data between SFR and MFR customers, their charges will be different
based on wastewater flow to increase equity in the wastewater charges. Condos, duplexes, mobile
homes, and second living units will be treated as MFR.
The proposed residential charges consist of two components: a fixed component to be billed on each
dwelling unit, since a significant portion of the wastewater system costs are fixed and therefore do not
vary based on the amount of flow entering the wastewater system, and a variable component to be
billed on the estimated flow. Based on a review with staff of the District's cost structure, the estimated
total variable costs, include chemicals, utilities, hauling /disposal, and net capital costs, in the system are
approximately 20 percent2. These costs are applied per unit of wastewater flow. The remaining 80
percent of the total system costs, considered fixed costs, are applied per dwelling unit. Table 5 -1 shows
the cost of service calculation of wastewater charges for SFR and MFR customers for FY 2016.
Table 5 -1:
Calculated Residential Wastewater Charges — FY 2016
Residential
SFR $44,380,286 91,871 6,436,719 $368.81 $99.57 $468.38
MFR $18,626,014 44,052 2,623,444 $368.81 $84.63 $453.44
TOTAL $63,006,300 135,923 9,060,162
z The average chemicals, utilities, and hauling /disposal cost is approximately 10 percent of the expenses, as shown in Table 3 -8.
Net capital cost is approximately 10 percent, as shown in Table 4 -11.
Wastewater Cost of Service Study Report 139
According to the financial plan, the total revenue adjustment in FY 2017 is 7.30 percent (refer to Table 3-
9). Thus, residential wastewater charges need to increase 7.30 percent in FY 2017 to meet the revenue
requirements, meaning that SFR charges would be $503 per dwelling unit and MFR charges would be
$487 per dwelling unit. The District Board would like to smooth out the increases over the two year
period so that impacts to residential customers would be more stable. The total increases over two
years for SFR customers are $64 ($503 -$439) and for MFR customers are $48 ($487 - $439). Thus, the
annual increase with the smoothing schedule is $32 per year for SFR and $24 per year for MFR
customers. Table 5 -2 shows the proposed FY 2016 and FY 2017 residential wastewater charges with the
smoothing schedule. In FY 2016, the SFR charge would be $471 instead of $468.38 and the MFR charge
would be $463 instead of $453.44.
Table 5 -2:
Proposed FY 2016 and FY 2017 Residential Wastewater Charges
Residential Annual Charges (per Residential Unit)
Single Family Dwellings $439.00 $471.00 $503.00
Condominium, Multi - Family, Mobile Home $439.00 $463.00 $487.00
503 PROPOSED NON - RESIDENTIAL RATES
The District currently has a variable rate structure for its non - residential customers, subject to a
minimum annual charge. Since non - residential customers use is non - homogeneous, it is more equitable
to charge on the basis of flow. Thus, RFC recommends that the District retain the current variable rate
structure. Based on the unit rate calculated in the previous section (refer to Table 4 -13), a variable rate
per HCF is calculated for each customer class based on their estimated loadings into the system. As
discussed in the previous section, RFC proposes that the District create two new customer classes:
Hotels /Motels and Automotive facilities, as well as redefine the strength for supermarkets and the flow
for schools.
Table 5 -3 shows the proposed cost of service wastewater rates for non - residential customers. The rates
are calculated based on the total revenue requirements per customer class identified in Table 4 -14 and
the estimated flow by customer class as shown in Table 4 -12. Industrial customers will be charged on a
unit rate basis. All non - residential customers will be subject to a minimum annual charge equal to the
MFR charge plus the District's historic $17 pollution prevention surcharge, which includes the inspection
and other costs for source control, for these non - residential classes.
40 1 Central Contra Costa Sanitary District fft
Table 5 -3:
Proposed FY 2016 and FY 2017 Non - Residential Wastewater Rates
Commercial /Non - Industrial
(per hcf)
$1.68
$3.42
Bakeries
$11.22
$12.33
$13.22
Supermarkets
$4.07
$8.71
$9.34
Mortuaries
$7.99
$10.70
$11.47
Restaurants
$8.32
$8.71
$9.34
Hotels/Motels
$4.07
$8.06
$8.64
Automotive
$4.07
$5.34
$5.73
Standard Commercial
$4.07
$4.64
$4.98
Industrial
Wastewater Flow
(per hcf)
$1.68
$3.42
$3.67
BOD
(per 1,000Ibs)
$934
$1,134
$1,216
SS
(per 1,000Ibs)
$667
$529
$567
Fixed Charge
(per account)
$81.38
$87.23
Mixed Use
(per hcf)
Rate Group XA
$4.46
$4.96
$5.32
Rate Group XB
$4.85
$5.38
$5.77
Rate Group XC
$5.25
$5.81
$6.23
Rate Group XD
$5.64
$6.22
$6.67
Rate Group XE
$6.03
$6.64
$7.12
Rate Group XF
$6.42
$7.05
$7.56
Rate Group XG
$6.81
$7.47
$8.01
Rate Group XH
$7.21
$7.88
$8.45
Rate Group XI
$7.60
$8.31
$8.91
Rate Group XJ
$8.72
$9.97
$10.69
Rate Group XK
$9.08
$9.62
$10.32
Rate Group XL
$9.79
$10.18
$10.92
Rate Group XM
$10.15
$10.50
$11.26
Rate Group XN
$10.51
$10.76
$11.54
Rate Group XO
$10.74
$10.90
$11.69
Institutional
(per hcf)
Churches
$4.07
$4.64
$4.98
Schools (Daycare, Preschool, University)
(per hcf)
$4.07
$4.33
$4.65
Schools (Elementary)
(per student)
$5.62
$5.77
$6.19
Schools (Intermediate)
(per student)
$5.94
$11.34
$12.16
Schools (High School)
(per student)
$6.27
$16.93
$18.15
Minimum Annual Charge
$456
$480
$504
rk Wastewater Cost of Service Study Report 141
5.4, CUSTOMER IMPACTS
RFC completed an analysis to evaluate the impact of the proposed rate structure on customers with
various water usage levels.
Table 5 -4 shows the residential bill impacts for FY 2016 and FY 2017. SFR customers would experience a
$32 annual increase, or approximately seven percent per year, over the next two years and MFR
customers would experience a $24 annual increase, or approximately five percent per year, over the
next two years.
Table 5 -4:
Residential Annual Wastewater Bill Impacts
SFR $439 $471 $503 $32 $32
MFR $439 $463 $487 $24 $24
Table 5 -5 shows the typical non - residential bill impacts for FY 2016 and FY 2017. The bills are calculated
based on the average annual water usage for each customer class.
Table 5 -5:
Typical Non - Residential Annual Wastewater Bill Impacts
Hotels /Motels
5,959
$24,252
$48,027
$51,483
$23,775
$3,456
98.0%
7.2%
Supermarkets
2,932
$11,931
$25,534
$27,381
$13,602
$1,847
114.0%
7.2%
Standard Commercial
722
$2,937
$3,348
$3,593
$411
$245
14.0%
7.3%
Restaurants
799
$6,647
$6,958
$7,462
$312
$503
4.7%
7.2%
Automotive
294
$1,197
$1,571
$1,686
$374
$115
31.2%
7.3%
42 1 Central Contra Costa Sanitary District fft
6. APPENDIX
For readability purposes, some of the tables in the text of the report are reproduced in the Appendix. The original table number is kept for easy
reference.
Table 3 -5:
Revenue Summary under Existing Rates
Sewer Service Charge
$69,447,000
$68,235,881
Service Charges - Concord
$13,500,000
$13,926,682
Permit /Inspection /Right -of -Way Fees
$1,244,600
$1,281,938
Lease Rental Income
$566,000
$582,980
Household Hazardous Waste Reimbursement
$895,000
$921,850
Stormwater/ Pollution Prevention /Pretreatment
$271,000
$279,130
Interest Income
$90,000
$196,001
Recycled Water
$103,000
$106,090
All Other
$115,000
$118,450
TOTAL REVENUES
$86,231,600
$85,649,002
$68,310,851
$68,727,563
$69,153,753
$14,337,387
$14,311,392
$14,836,224
$1,320,396
$1,360,008
$1,400,808
$600,469
$618,483
$637,038
$949,506
$977,991
$1,007,330
$287,504
$296,129
$305,013
$207,710
$322,273
$427,843
$109,273
$112,551
$115,927
$122,004
$125,664
$129,434
$86,245,099
$86,852,054
$88,013,371
$69,589,570
$15,380,349
$1,442,833
$656,149
$1,037,550
$314,163
$555,082
$119,405
$133,317
$89,228,417
Water and Wastewater Cost of Service Study Report 143
Table 3 -5:
Revenue Summary under Existing Rates (cont'd)
Sewer Service Charge
$3,750,000
$3,787,675
$3,791,930
$3,815,045
$3,838,620
$3,862,655
Property Tax Revenue
$8,160,000
$10,064,708
$10,212,767
$10,406,401
$10,908,644
$11,284,728
Capacity Fee Revenue
$5,890,000
$6,184,425
$6,484,415
$6,788,320
$7,095,960
$7,407,155
Pump Zone Revenue
$528,000
$554,736
$581,717
$609,000
$497,318
$186,862
Concord Capital Revenue
$3,305,000
$3,602,491
$5,487,737
$7,647,624
$6,884,640
$4,917,324
Interest Income
$280,000
$62,774
$52,512
$68,292
$95,703
$167,906
Permit and Inspection Fees
$107,000
$109,140
$111,323
$113,549
$115,820
$118,137
Recycled Water
$260,000
$267,800
$275,834
$284,109
$292,632
$301,411
All Other
$1,000
$1,030
$1,061
$1,093
$1,126
$1,159
TOTAL REVENUES
$22,281,000
$24,634,778
$26,999,295
$29,733,433
$29,730,463
$28,247,336
1. Based on anticipated expenses as of March 2015
Table 3 -6:
Projected O &M Expenses by Function
Administration
$24,476,326
$24,605,598
$25,372,937
$24,805,582
$25,675,372
$25,785,443
Engineering
$12,229,549
$11,662,173
$11,925,299
$11,470,088
$11,851,909
$12,236,341
Collection System Operations
$15,617,120
$14,752,239
$15,114,151
$14,845,264
$15,308,591
$15,797,147
Plant Operations Department
$32,523,037
$31,584,881
$32,513,761
$32,351,627
$33,504,849
$34,699,324
Pumping Stations
$3,352,863
$3,566,604
$3,676,142
$3,668,317
$3,805,223
$3,935,565
TOTAL EXPENSES
$88,198,895
$86,171,496
$88,602,290
$87,140,879
$90,145,944
$92,453,820
44
Central Contra Costa Sanitary District
Salary & Wages
Capitalized Admin Overhead
Directors Fees & Expenses
Chemicals
Utilities
Repairs & Maintenance
Hauling & Disposal
Professional & Legal Services
Outside Services
Self- Insurance Expense
Materials & Supplies
Other Expenses
Allocated Benefits
TOTAL O &M EXPENSES
Treatment Plant
Collection System
General Improvements
Recycled Water
TOTAL Cl P
$28,618,169
($3,806,958)
$199,800
$1,605,000
$4,861,350
$4,911,762
$1,040,200
$539,400
$3,303,021
$650,000
$2,024,315
$2,419,448
$41,833,388
$88,198,895
$9,045,000
$12,217,000
$3,265,000
$552,000
$25,079,000
Table 3 -7:
Projected O &M Expenses by Category
$30,133,152
($4,355,446)
$207,792
$1,685,250
$5,101,680
$5,059,115
$1,080,226
$555,582
$3,402,112
$1,300,000
$2,085,044
$2,105,781
$37,811,208
$86,171,496
$31,338,478
($4,486,109)
$ 216,104
$1,769,513
$5,353,943
$5,210,888
$1,121,894
$572,249
$3,504,175
$1,300,000
$2,147,596
$2,555,205
$37,998,354
$88,602,290
Table 3 -8:
Capital Improvement Plan
$10,410,000
$15,950,000
$3,980,000
$450,000
$30,790,000
Based on anticipated revenues and expenses as of March 2015
$12,820,000
$18,125,000
$4,605,000
$500,000
$36,050,000
$32,284,087
($4,620,692)
$224,748
$1,857,988
$5,618,736
$5,367,215
$1,165,275
$589,417
$3,609,300
$1,350,000
$2,212,024
$2,245,611
$35,237,171
$87,140,879
$21,785,000
$16,840,000
$4,203,000
$500,000
$43,328,000
$33,402,716
($4,759,313)
$233,738
$1,950,888
$5,896,681
$5,528,231
$1,210,443
$607,099
$3,717,579
$1,350,000
$2,278,384
$2,699,229
$36,030,268
$90,145,944
$19,429,000
$17,611,500
$1,955,000
$509,500
$39,505,000
$34,537,213
($4,902,093)
$243,087
$2,048,432
$6,188,433
$5,694,078
$1,257,477
$625,312
$3,829,107
$1,350,000
$2,346,736
$2,393,956
$36,842,080
$92,453,820
$13,303,400
$15,690,000
$2,725,000
$350,000
$32,068,400
(A. Water and Wastewater Cost of Service Study Report 145
Table 3 -12:
Operating Financial Plan
Revenue from Existing Rates - O &M
$69,447,000
$68,235,881
$68,310,851
$68,727,563
$69,153,753
$69,589,570
Revenue from Existing Rates - Capital
$3,750,000
$3,787,675
$3,791,930
$3,815,045
$3,838,620
$3,862,655
Additional Revenue from Rates
$0
$5,747,480
$11,343,905
$15,552,119
$19,814,665
$23,964,681
Subtotal Rate Revenue
$73,197,000
$77,771,035
$83,446,686
$88,094,727
$92,807,037
$97,416,905
Calibration (model to actual)Z
$0
$728,965
$782,163
$825,730
$869,900
$913,109
Calibrated Rate Revenue
$73,197,000
$78,500,000 a
$84,228,849
$88,920,457
$93,676,937
$98,330,013
Service Charges - Concord
$13,500,000
$13,926,682
$14,337,387
$14,311,392
$14,836,224
$15,380,349
Permit /Inspection /Right -of -Way Fees
$1,244,600
$1,281,938
$1,320,396
$1,360,008
$1,400,808
$1,442,833
Lease Rental Income
$566,000
$582,980
$600,469
$618,483
$637,038
$656,149
Household Hazardous Waste Reimbursement
$895,000
$921,850
$949,506
$977,991
$1,007,330
$1,037,550
Stormwater/ Pollution Prevention /Pretreatment
$271,000
$279,130
$287,504
$296,129
$305,013
$314,163
Interest Income
$90,000
$196,001
$207,710
$322,273
$427,843
$555,082
Recycled Water
$103,000
$106,090
$109,273
$112,551
$115,927
$119,405
All Other
$115,000
$118,450
$122,004
$125,664
$129,434
$133,317
TOTAL REVENUES
$89,981,600
$95,913,121
$102,163,096
$107,044,947
$112,536,555
$117,968,861
O &M Expenses
Administration
$24,476,326
$24,605,598
$25,372,937
$24,805,582
$25,675,372
$25,785,443
Engineering
$12,229,549
$11,662,173
$11,925,299
$11,470,088
$11,851,909
$12,236,341
Collection System Operations
$15,617,120
$14,752,239
$15,114,151
$14,845,264
$15,308,591
$15,797,147
Plant Operations Department
$32,523,037
$31,584,881
$32,513,761
$32,351,627
$33,504,849
$34,699,324
Pumping Stations
$3,352,863
$3,566,604
$3,676,142
$3,668,317
$3,805,223
$3,935,565
TOTAL EXPENSES
$88,198,895
$86,171,496
$88,602,290
$87,140,879
$90,145,944
$92,453,820
Less: Construction Fund SSC Revenue
($3,750,000)
($4,089,931)
($4,388,512)
($4,632,937)
($4,880,659)
($5,122,892)
NET OPERATING INCOME
($1,967,295)
$5,651,694
$9,172,294
$15,271,132
$17,509,952
$20,392,149
46 1
Central Contra Costa Sanitary District
Table 4 -6:
Allocation to Cost Components — O &M
Administration - Collection portion
60%
$0
40%
100%
Administration - Treatment portion
40% 38%
22%
Customer
100%
Engineering - Collection portion
40%
$2,928,544
60%
100%
Engineering - Treatment portion
40% 38%
22%
$0
100%
Collection System Operations
60%
$3,925,842
40%
100%
Plant Operations Department
40% 38%
22%
$5,900,896
100%
Pumping Stations
60%
$0
40%
100%
Administration - Flow portion
Administration - Treatment portion
Engineering- Flow portion
Engineering - Treatment portion
Collection System Operations
Plant Operations Department
Pumping Stations
TOTAL O &M EXPENSES
Allocation %
J
$0
Table 4 -7:
$0
$12,623,302
Allocation of O &M Expenses to Cost Components
Flow
:•D
TSS
Customer
$4,392,816
$0
$0
$2,928,544
$5,049,321
$4,796,855
$2,777,126
$0
$2,396,779
$0
$0
$3,595,168
$4,132,465
$3,925,842
$2,272,856
$0
$8,851,344
$0
$0
$5,900,896
$12,633,952
$12,002,255
$6,948,674
$0
$2,139,962
$0
$0
$1,426,642
$0
$7,321,360
$0
$12,623,302
$0
$5,991,947
$0
$10,331,162
$0
$14,752,239
$0
$31,584,881
$0
$3,566,604
$39,596,639 $20,724,951 $11,998,656 $13,851,250 $0 $86,171,496
46% 24% 14% 16% 0%
Water and Wastewater Cost of Service Study Report 147
Table 4 -9:
Allocation to Cost Components — Capital
Collection System 100% 100%
Treatment Plant 29% 26% 15% 0% 30% 100%
General Improvements 100% 100%
Recycled Water 100% 100%
Table 4 -10:
Allocation of Wastewater Assets to Cost Components
Collection System
$2,794,785,669
$0
$0
$0
$0
$2,794,785,669
Treatment Plant
$200,515,694
$174,923,961
$103,455,021
$0
$206,134,846
$685,029,522
General Improvements
$0
$0
$0
$0
$39,218,237
$39,218,237
Recycled Water
$77,609,035
$0
$0
$0
$0
$77,609,035
TOTAL ASSETS
$3,072,910,398
$174,923,961
$103,455,021
$0
$245,353,083
$3,596,642,463
Allocation %
85%
5%
3%
0%
7%
48
Central Contra Costa Sanitary District
Total Cost of Service $39,123,105
$17,310,394
Table 4 -13:
$11,310,906 $0 $77,771,035
Unit of Service 11,446,953
15,272,629
18,964,437
138,992
Units hcf
Development of Unit Costs
Ibs /yr
DU /accounts
Unit Cost $3.42
$1.13
Flow
:•D
TSS
Customer
General
TOTAL
Operating Revenue Requirements
$32,110,750
$16,806,823
$9,730,266
$11,232,620
$0
$69,880,459
Capital Revenue Requirements
$6,741,574
$383,761
$226,967
$0
$538,273
$7,890,575
Total Revenue Requirements
$38,852,324
$17,190,584
$9,957,233
$11,232,620
$538,273
$77,771,035
Allocation of General Cost
$270,781
$119,810
$69,397
$78,286
($538,273)
$0
Total Cost of Service $39,123,105
$17,310,394
$10,026,630
$11,310,906 $0 $77,771,035
Unit of Service 11,446,953
15,272,629
18,964,437
138,992
Units hcf
Ibs /yr
Ibs /yr
DU /accounts
Unit Cost $3.42
$1.13
$0.53
$81.38
Units hcf
Ibs /yr
Ibs /yr
DU /accounts
Table 5 -5:
Typical Non - Residential Annual Wastewater Bill Impacts
Residential
S F R $44,380,286 91,871 6,436,719 $368.81 $99.57 $468.38
MFR $18,626,014 44,052 2,623,444 $368.81 $84.63 $453.44
TOTAL $63,006,300 135,923 9,060,162
Water and Wastewater Cost of Service Study Report 149