HomeMy WebLinkAbout14. Set a new Public Hearing for June 21, 2023 at 1:30 p.m. to consider establishing Sewer Service Charge (SSC) rate increases for Fiscal Years 2023-24 and 2024-25; Review associated Cost-of-Service Report and Proposition 218 noticeItem 14.
BOARD OF DI RECTORS
POSIT ION PA PER
M E E T ING D AT E:MAY 4, 2023
S UB J E C T: S E T A NE W P UB L I C HE A R I NG F O R J UNE 21, 2023 AT 1:30 P.M. TO
C O NS I D E R E S TA B L I S HI NG S E W E R S E RV I C E C HA R G E (S S C) R AT E
I NC R E A S E S F O R F I S C A L YE A R S 2023-24 A ND 2024-25; R E V I E W
A S S O C I AT E D C O S T-O F -S E RV I C E R E P O RT A ND P R O P O S I T I O N 218
NO T I C E
S UB M I T T E D B Y:
D A NE A G E MME L L , P L A NNI NG A ND
D E V E L O P ME NT S E RV I C E S D I V I S I O N
MA NA G E R
I NI T I AT I NG D E PART M E NT:
E NG-P D S-D I V I S I O N MA NA G E R
RE V IE WE D B Y:E MI LY B A R NE T T, C O MMUNI C AT I O NS A ND G O V E R NME NT R E L AT I O NS
MA NA G E R
E D G A R J . L O P E Z , P R O V I S I O NA L D I R E C TO R O F E NG I NE E R I NG A ND
T E C HNI C A L S E RV I C E S
P HI L I P L E I B E R , D E P UT Y G E NE R A L MA NA G E R
Roger S. Bailey
General Manager
K enton L . Alm
District Counsel
IS S UE
To comply with Proposition 218 public notice requirements, C entral San must provide a 45-day written
notice to property owners prior to considering proposed S S C C harge rate increases at a public hearing.
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B AC K G RO UND
C entral San has worked with Raftelis since 2014 on its Wastewater Cost-of -S ervice S tudy and the
development of a financial model f or f uture planning and rate design. T he Board of Directors (Board)
accepted that Cost-of -S ervice Report on J une 4, 2015, and accepted an update to the Cost-of -S ervice
R eport in April 2019 as part of the 4-year rate adoption f or F iscal Year (F Y) 2019-20 through F Y 2022-23.
Staf f engaged R af telis in 2022 to provide the C ost-of-Service Study update f or F Y 2023-24 and F Y 2024-
25 S S C rates.
R af telis and C entral San updated the aforementioned financial model and perf ormed a C ost-of-Service
update, which addressed the overall revenue requirement, how those costs are allocated between
customer classes, and how those costs are recovered from each class. T he analysis was completed in
D ecember 2022, ahead of a F inancial Planning Workshop held on J anuary 12, 2023, to address Central
San's long-term financial plan f or S S C rates and projected inf rastructure requirements or needs. I n
preparation for the workshop, the B oard also held a discussion with staf f regarding residential S S C rates
for A ccessory Dwelling Units (A D U) at its D ecember 15, 2022, regular B oard meeting.
At the J anuary 2023 workshop, staf f overviewed the long-term f inancial plan and rate scenarios with the
Board. Key takeaways included:
1. T he cost of service analysis justif ies the addition of an A D U residential S S C customer class.
2. D ue to changes in usage patterns, there is a shif t of costs from residential to non-residential
customers. P roposed changes to the customer classes are designed to be revenue neutral to
C entral San overall, but S S C rates can increase or decrease between -5 percent to +6 percent for
individual customer classes for the f irst year.
3. T he second year would include a four percent increase across all customer classes.
4. Proposed capital spending has been reduced in the next couple of years, shifting spending further
out in the Ten-Year C apital I mprovement Plan, helping reduce near-term rate pressure.
5. A combination of revenue bond and cash f inancing f or large (less frequent and non-recurring)
infrastructure projects. W hile State R evolving F und loans have f avorable terms, funds are scarce
and there is intense competition for them. R evenue bonds are the basis f or f uture debt needs.
6. Pay-as-you-go funding f or pipeline replacement projects.
I n addition to the workshop discussions, other planning documents have outlined the goals, objectives,
metrics, and overall services provided by C entral San, as well as the level of resources needed to provide
such services. T hese documents include the current staf f ing plan, the Cost-of -S ervice Report (A ttachment
1), and the F Y 2022-24 S trategic Plan. T he draft F Y 2023-24 budget, which will be presented to the Board
on May 18, 2023, is consistent with and below the f orecasts in the Cost-of -S ervice analysis presented at
the J anuary 2023 F inancial Workshop.
S C HE D UL E
A public hearing was previously scheduled f or April 20, 2023, for the proposed 2-year S S C rate schedule.
T he P roposition 218 notice was reviewed and approved f or mailing by the B oard on J anuary 19, 2023.
T he Cost-of -S ervice Report was not published prior to that meeting and staff canceled the public hearing.
T here have been no substantive changes to the Proposition 218 notice. I t is being revised to reflect (1) the
notice of the rescheduled public hearing on the cover, (2) the rescheduled date of J une 21, 2023, at 1:30
p.m., (3) a link to the C ost-of-Service R eport, (4) confirmation that all public protests previously submitted
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are still valid.
I n order to meet the 45-day notice requirements of P roposition 218 and hold the public hearing on J une
21, 2023, at 1:30 p.m., the notice must be mailed to property owners no later than May 5, 2023
(Attachment 2).
ALT E RNAT I V E S /C O NS I D E RAT IO NS
A public hearing is being rescheduled f rom April 20, 2023 to allow f or the 45 day notification period
required by Proposition 218 and still meet C entral San's key deadlines. T he public hearing needs to be
conducted in J une, to have adequate time to complete the S S C billing calculations which must be
submitted to the C ontra C osta C ounty Assessor by A ugust 10, 2023 f or inclusion on the tax roll.
F I NANC IAL I M PAC T S
T he total cost for the P roposition 218 notices to customers will be approximately $85,000 to print,
address, and send by F irst-Class mail (legally required).
C entral San’s annual Sewer Service C harge funds operations, maintenance, and the capital projects
program. Staf f has made assumptions for both programs in developing the rate model. Over the last eight
years, the operating budget has been kept essentially flat and this year it will address higher costs that may
increase it by $6 million; from $85.0 million this year up to $90.9 million next year. T he capital budget has
signif icantly increased over the last three years.
T heref ore, this next year will see a decrease f rom $90.7 million in the current year to $78.5 million next
year to fund critical infrastructure as outlined in the S S C Proposition 218 notice. T he economic uncertainty
and timing of a few major f uture projects can impact Central S an's rates and debt issuances. Additionally,
staf f is evaluating how to optimize capital project priorities. W ith these uncertainties, staf f is recommending
a two-year S S C rate schedule. Central S an proposes sewer service rate increases for the next two years
as shown in E xhibit A (Attachment 3).
C O M M UNI T Y O UT RE AC H
C entral San takes its responsibility to provide customers with clear and detailed information on proposed
rate changes very seriously. T hese outreach ef f orts signif icantly exceed the requirements of P roposition
218, including:
Providing an expanded SS C Proposition 218 notice that is more readable, engaging, and accessible to
customers by including graphics, locations of projects, and summarizing information.
Incorporating the notice of the proposed rate increases and public hearing in the Pipeline newsletter in an
effort to reach additional customers, including both property owners and tenants.
Receiving protests and customer rate inquiries through traditional mail, email, fax, and hosting a
Community Information Line.
Publishing a calendar of rate-related events, holding public workshops, distributing Proposition 218
notices that comprehensively describe the proposed rate changes, and holding a public hearing regarding
the changes as required by Proposition 218.
C O M M I T T E E RE C O M M E ND AT IO N
T his matter was not reviewed by a Board Committee.
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RE C O M M E ND E D B O ARD AC T I O N
Set a new P ublic Hearing for J une 21, 2023 at 1:30 p.m. to consider establishing S ewer S ervice Charge
(S S C ) rate increases for F iscal Years 2023-24 and 2024-25, and review associated C ost-of-Service
R eport and Proposition 218 notice.
Strategic Plan Tie-I n
G O A L FO U R : G overnance and Fiscal R esponsibility
Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 2 - Encourage and facilitate
public participation, Strategy 3 - Maintain financial stability and sustainability
AT TAC HM E NT S :
D escription
1. Cost of S ervice S tudy
2. P roposition 218 Notice P ublic Hearing
3. E xhibit
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Wastewater 2023
Cost of Service Study
Report / April 26, 2023
CENTRAL CONTRA COSTA
SANITARY DISTRICT
ATTACHMENT 1
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April 26, 2023
Mr. Roger Bailey
General Manager
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
Subject: Wastewater Cost of Service Rate Study Report
Dear Mr. Bailey:
Raftelis Financial Consultants, Inc. (Raftelis) is pleased to provide this Wastewater Cost-of-Service Rate Study
Report (Report) for the Central Contra Costa Sanitary District (Central San) to establish wastewater rates that are
equitable and align with Proposition 218 requirements.
The major objectives of the study include the following:
1. Review current wastewater rate structure, including accessory dwelling units
2. Review the current customer classifications
3. Update the 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
Central San 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 2023. 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 wastewater rates.
It has been a pleasure working with you, and we thank you and Central San staff for the support provided during
the course of this study.
Sincerely,
RAFTELIS FINANCIAL CONSULTANTS, INC.
Sudhir Pardiwala Nancy Phan
Executive Vice President Manager
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Wastewater Cost of Service Study Report | i
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY ............................................................................................................... 1
1.1 INTRODUCTION ............................................................................................................................. 1
1.2 FINANCIAL PLAN ........................................................................................................................... 1
1.3 COST OF SERVICE PROCESS AND METHODOLOGY ....................................................................... 2
1.4 PROPOSED WASTEWATER RATES ................................................................................................. 2
1.4.1 Customer Impacts…………………………………………………………………………………………………………….4
2. FINANCIAL PLAN ........................................................................................................................ 6
2.1 WASTEWATER SYSTEM INFRASTRUCTURE ................................................................................... 6
2.2 EXISTING WASTEWATER RATES .................................................................................................... 6
2.3 WASTEWATER ACCOUNTS AND USAGE CHARACTERISTICS ......................................................... 8
2.4 WASTEWATER SYSTEM REVENUES ............................................................................................... 8
2.5 WASTEWATER SYSTEM EXPENDITURES ...................................................................................... 10
2.5.1 Operation and Maintenance Expenses……………………………………………………………………………10
2.5.2 Capital Improvement Program……………………………………………………………………………………….10
2.5.3 Revenue Adjustments…………………………………………………………………………………………………….11
2.5.4 Debt Service Requirements…………………………………………………………………………………………….11
2.5.5 Debt Service Coverage……………………………………………………………………………………………………12
2.5.6 Operating Financial Plan…………………………………………………………………………………………………14
2.5.7 Reserves…………………………………………………………………………………………………………………………15
3. COST OF SERVICE ANALYSIS ...................................................................................................... 19
3.1 PROPOSED CUSTOMER CLASSIFICATIONS .................................................................................. 19
3.2 PLANT BALANCE .......................................................................................................................... 20
3.3 ALLOCATION OF REVENUE REQUIREMENTS BY FUNCTION........................................................ 21
3.4 ALLOCATION OF FUNCTIONAL COSTS TO COST COMPONENTS ................................................. 22
3.5 ALLOCATION OF REVENUE REQUIREMENTS ............................................................................... 25
3.6 DEVELOPMENT OF UNIT COSTS OF SERVICE .............................................................................. 27
3.7 ALLOCATION OF COSTS TO CUSTOMER CLASS ........................................................................... 28
4. PROPOSED WASTEWATER RATES ............................................................................................. 30
4.1 RATE DESIGN ............................................................................................................................... 30
4.2 PROPOSED RESIDENTIAL CHARGES ............................................................................................ 30
4.3 PROPOSED NON-RESIDENTIAL RATES ......................................................................................... 31
4.4 CUSTOMER IMPACTS .................................................................................................................. 32
4.4.1 Customer Impacts…………………………………………………………………………………………………………..32
5. APPENDIX ................................................................................................................................ 34
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Wastewater Cost of Service Study Report | ii
LIST OF FIGURES AND TABLES
Table 1-1: Proposed Revenue Adjustments ....................................................................................... 2
Table 1-2: Current and Proposed Wastewater Rates .......................................................................... 3
Table 1-3: Residential Annual Wastewater Bill Impacts...................................................................... 4
Table 2-1: Existing Wastewater Rate Structure .................................................................................. 7
Table 2-2: Projected Residential Customer Accounts ......................................................................... 8
Table 2-3: Annual Projected Water Usage (HCF) and Student Enrollment ........................................... 8
Table 2-4: Revenue Summary under Current Rate Structure .............................................................. 9
Table 2-5: Projected O&M Expenses1 by Function ............................................................................ 10
Table 2-6: Projected O&M Expenses1 by Category ........................................................................... 10
Table 2-7: Capital Improvement Plan1 ............................................................................................. 11
Table 2-8: Revenue Adjustments Schedule ...................................................................................... 11
Table 2-9: Existing Debt Schedule.................................................................................................... 12
Table 2-10: Debt Coverage Calculation ............................................................................................ 13
Table 2-11: Operating Financial Plan ............................................................................................... 14
Figure 2-1: Projected Reserves– Running Expense and Sewer Construction Funds ............................ 15
Figure 2-2: Projected Reserves ........................................................................................................ 16
Table 2-12: Projected Reserves ....................................................................................................... 17
Table 3-1: Average Water Consumption of Parcels With and Without ADUs ..................................... 20
Table 3-2: FY 2024 Plant Balance ..................................................................................................... 21
Table 3-3: Allocation of Wastewater O&M Expenses by Function ..................................................... 22
Table 3-4: Allocation of Wastewater Assets by Function .................................................................. 22
Table 3-5: Allocation to Cost Components – O&M ........................................................................... 23
Table 3-6: Allocation of O&M Expenses to Cost Components ........................................................... 23
Table 3-7: Allocation of O&M to Cost Components – Treatment Plant ............................................. 24
Table 3-8: Allocation to Cost Components – Capital ......................................................................... 25
Table 3-9: Allocation of Wastewater Assets to Cost Components ..................................................... 25
Table 3-10: Allocation of Revenue Requirements ............................................................................ 26
Table 3-11: Projected FY2024 Customer Class Service Units1 ............................................................ 27
Table 3-12: Development of Unit Costs ........................................................................................... 28
Table 3-13: Allocation of Costs to Customer Class ............................................................................ 28
Table 4-1: Calculated Residential Wastewater Charges – FY 2024 ..................................................... 30
Table 4-2: Proposed FY 2024 and FY 2025 Residential Wastewater Charges...................................... 31
Table 4-3: Proposed FY 2024 and FY 2025 Non-Residential Wastewater Rates .................................. 31
Table 4-4: Residential Annual Wastewater Bill Impacts.................................................................... 33
Table 4-5: Typical Non-Residential Annual Wastewater Bill Impacts ................................................. 33
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Wastewater Cost of Service Study Report | 1
1. EXECUTIVE SUMMARY
1.1 INTRODUCTION
In late 2022, the Central Contra Costa Sanitary District engaged Raftelis to conduct a comprehensive cost-of-
service (COS) study to independently assess and evaluate Central San’s existing wastewater rates. The objectives
of the study include providing a fair, equitable, and reasonable rate structure; ensuring that there is a
proportionate recovery of costs from the various customer classes; and developing rates that are aligned with
cost-of-service principles. This report documents the resultant findings, analyses, and proposed changes from the
study.
1.2 FINANCIAL PLAN
In order to determine wastewater rates, Raftelis used the revenue requirements, including operations and
maintenance (O&M) expenses, capital improvement expenses, debt service costs, and reserve requirements for a
five-year study period from Fiscal Year (FY) 2024 to 2026 provided in Central San’s financial plan. O&M expenses
include the cost of treatment, pumping, and collection facilities, pre-treatment, household hazardous waste
collection, 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 Central
San’s long-range financial plan and anticipated revenues and expenses as of January 2023 in order to prepare
rates for publication in the Proposition 218 notices which were mailed in March.
In addition to the operating expenses, Central San is planning continuing increases in capital investments over the
next ten 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. Central San has already obtained a low-interest
State Revolving Fund (SRF) loan and anticipates applying for additional SRF loans to fund future projects. Central
San anticipates that bonds may be necessary to fund a portion of the Capital Improvement Program (CIP), as it is
currently anticipated that SRF funding may become more difficult to obtain. The FY 2022-23 10-year CIP is
budgeted at $1.135 billion and will be funded primarily through rate revenues, capacity fees, and ad valorem tax
revenue. Annual payments on existing debt service are $13.25 million (declining to about $9 million annually
through FY 2027-28, and further declining until the maturity date in FY 2029-30).
Central San’s financial plan indicates that revenue adjustments of 2.2% are required for FY 2024 and 4% for FY
2025, as shown in Table 1-1. The adjustments are needed to meet the operating and capital expenses as well as
meet reserves targets. Central San currently has four separate funds: Running Expense Fund, Sewer Construction
Fund, Self-Insurance/Emergency Fund, and a Debt Service Fund. The current reserve policy includes 41.7% of the
next year’s O&M expenses, and 50% of the next year’s non-debt funded CIP expenses... A sound reserve policy –
and meeting those policy targets – are key to a sustainable financial plan and allow Central San to have funds for
working capital, natural disasters or emergencies, and any other unexpected expenses.
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Wastewater Cost of Service Study Report | 2
Table 1-1:
Proposed Revenue Adjustments
Fiscal Year Revenue Adjustments
2024 2.2%
2025 4.0%
1.3 COST OF SERVICE PROCESS AND METHODOLOGY
In this study, Raftelis followed the guidelines for allocating costs detailed in the Water Environment Federation
(WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems. Raftelis started with evaluating
the COS analysis methodology developed in the most recent studies conducted for Central San and updated the
data and methodology where required to align with COS principles and Central San’s current system.
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 Wastewater Flow, Biochemical Oxygen
Demand (BOD), 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.
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 PROPOSED WASTEWATER RATES
Through our review, Raftelis recommends that the District retain its current wastewater rate structure, which
includes fixed charges for residential customers and a flow charge per hundred cubic feet (HCF) for 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 Multi-Family Residential (MFR) annual charge.
Table 1-2 shows the current and proposed wastewater rates in FY 2024 and FY 2025.
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Wastewater Cost of Service Study Report | 3
Table 1-2:
Current and Proposed Wastewater Rates
User Group
Current
Effective
July 1, 2022
Proposed
Effective
July 1, 2023
Proposed
Effective
July 1, 2024
Residential (per residential unit)
Single Family Dwellings $690.00 $697.00 $725.00
Multi-Family Dwellings (Apartments,
Condominiums, Duplexes, Second Living Units,
Mobile Homes)
$654.00 $622.00 $647.00
Accessory Dwelling Units (previously included in
Multi-Family) $654.00 $339.00 $353.00
Non-Residential (per hcf)
Low (Retail, Office, Churches, Fraternal &
Service Organizations, State and Local
Institutions, Tax Exempt, Utilities with Special
Tax Status, Independent Living Facilities, Rest
Homes, & Convalescent Hospitals, and other
businesses with a combined BOD + TSS of less
than 350 mg/l)
$7.20 $7.63 $7.94
Medium-Low (Delicatessens, Yogurt Shops, Ice
Cream Shops, Coffee Shops, Bar, customers with
shared water meters with less than 50% food
service, other businesses with BOD + TSS less
than or equal to 700 mg/l)
$8.83 $9.32 $9.69
Medium (customers with shared water meters
with 50% or more food service, other businesses
with BOD + TSS less than or equal to 1,000 mg/l)
$11.07 $10.99 $11.43
Medium-High (Restaurants, Supermarkets,
Hotels and Motels, customers with shared
meters which include bakeries, other businesses
with BOD + TSS greater than 1,000 mg/l)
$12.35 $12.04 $12.52
High (Bakeries, Restaurants with on-site
breweries, Restaurants with food-waste grinders
or emulsifiers, other businesses with BOD + TSS
greater than 1,300 mg/l)
$16.37 $14.48 $15.06
Minimum Annual Charge $654.00 $622.00 $647.00
Schools
Schools - Daycare, Preschool, University
(per hundred cubic feet) $7.20 $7.63 $7.94
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Wastewater Cost of Service Study Report | 4
Schools – Elementary $8.58
per student
$8.94
per student
$9.30
per student
Schools – Intermediate, High School $16.95
per student
$17.89
per student
$18.61
per student
Permitted Industrial Users (includes hospitals, food processing, breweries, and wineries)
Wastewater Flow (per hundred cubic feet) $5.57 $7.28 $7.57
Biochemical Oxygen Demand (per 1,000 pounds) $1,473.00 $1,268.00 $1,338.00
Suspended Solids (per 1,000 pounds) $769.00 $644.00 $670.00
Fixed charge $108.20 $248.00 $258.00
Special Discharge Permits & Contractual
Agreements:
Determined
Individually
Determined
Individually
Determined
Individually
1.4.1 Customer Impacts
Low and medium non-residential customers are the majority of the non-residential customers. Table 1-3
compares the residential bill impacts for FY 2024 and FY 2025 to current rates. Single Family Residential (SFR)
customers would experience a $7 annual increase for FY 2024 and a $28 annual increase for FY 2025. MFR
customers would experience a $32 reduction for FY 2024 and a $25 increase for 2025. A new rate class would be
created for Accessory Dwelling Units (ADUs). Those units would be charged $339 per unit for FY 2024 and that
amount would be increased by $14 for FY 2025. ADUs are currently charged as one MFR unit.
Table 1-3:
Residential Annual Wastewater Bill Impacts
Current
Proposed
Effective
July 1, 2023
Proposed
Effective
July 1, 2024
Proposed
July 1, 2023
Increase or
(Decrease)
Proposed
July 1, 2023
Increase or
(Decrease)
SFR $690 $697 $725 $7 $28
MFR 654 622 647 (32) 25
ADU -- 339 353 -- 14
Table 1-4 shows the typical non-residential bill impacts for Central San’s largest non-residential rate classes for
FY 2024 and FY 2025 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
Non-residential
Customer Class
Average
Annual
Usage
(HCF)
July 1, 2022
Average Bill
July 1, 2023
Average Bill
July 1, 2024
Average Bill
July 1, 2023
Difference
July 1, 2024
Difference
July 1, 2023
Difference
July 1, 2024
Difference
Low (offices, retail, etc.) 722 5,198 5,509 5,733 310 224 6.0% 4.1%
Medium High (Restaurants) 799 9,868 9,620 10,003 (248)384 -2.5% 4.0%
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2. FINANCIAL PLAN
This section of the Report provides a summary of the projected revenues, 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 Central San’s financial plan. The financial plan is
an Excel model maintained by the District, and an extract is published in the annual budget book.
2.1 WASTEWATER SYSTEM INFRASTRUCTURE
Central San was established in 1946 as a special enterprise district and serves nearly 500,000 residents and 3,000
businesses in Alamo, Clyde, Danville, Lafayette, Martinez, Moraga, Orinda, Pacheco, Pleasant Hill, San Ramon,
Walnut Creek, and unincorporated areas within central Contra Costa County, covering a 146 square mile area.
Central San also treats wastewater from an additional 37 square miles for residents of Concord and Clayton under
a 1974 contract with the City of Concord.
Approximately 35 million gallons per day (MGD) of wastewater is treated on average at Central San’s Wastewater
Treatment Plant, which also produces nearly 560 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 18 wastewater pumping stations and 1,540 miles of sewer mains. Central San also operates a
Household Hazardous Waste facility which collects over 2 million pounds of household hazardous waste per year
and strives to reuse or recycle about 90% of those materials.
2.2 EXISTING WASTEWATER RATES
The current wastewater rate structure consists of fixed charges for residential customers and a flow charge per
HCF for most all other non-residential customers. Schools are charged a per-student rate based on the average
daily student attendance. Customers billed under the Industrial Formula are charged based on unit rates for flow,
BOD, and TSS. All customers are subject to a minimum annual charge which serves to recover a portion of the
fixed costs. The current rate structure, shown in Table 2-1, generates approximately 82 percent of the total rate
revenue from residential fixed charges, with the remaining 18 percent generated by non-residential charges.
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Table 2-1:
Existing Wastewater Rate Structure
User Group
Current Rates
Effective
July 1, 2022
Residential (per residential unit)
Single Family Dwellings $690.00
Multi-Family Dwellings (Apartments, Condominiums,
Duplexes, Mobile Homes, Accessory Dwelling Units) $654.00
Non-Residential (per hcf)
Low (Retail, Office, Churches, Fraternal & Service
Organizations, State and Local Institutions, Tax Exempt,
Utilities with Special Tax Status, Independent Living Facilities,
Rest Homes, & Convalescent Hospitals, and other businesses
with a combined BOD + TSS of less than 350 mg/l)
$7.20
Medium-Low (Delicatessens, Yogurt Shops, Ice Cream Shops,
Coffee Shops, Bars, customers with shared water meters with
less than 50% food service, and other businesses with BOD +
TSS less than or equal to 700 mg/l)
$8.83
Medium (customers with shared water meters with 50% or
more food service, other businesses with BOD + TSS less than
or equal to 1,000 mg/l)
$11.07
Medium-High (Restaurants, Supermarkets, Hotels and
Motels, customers with shared meters which include
bakeries, other businesses with BOD + TSS greater than 1,000
mg/l)
$12.35
High (Bakeries, Restaurants with on-site breweries,
Restaurants with food-waste grinders or emulsifiers, other
businesses with BOD + TSS greater than 1,300 mg/l)
$16.37
Minimum Annual Charge $654.00
Schools
Schools - Daycare, Preschool, University
(per hundred cubic feet) $7.20
Schools – Elementary (per student) $8.58
Schools – Intermediate, High School (per student) $16.95
Permitted Industrial Users (includes hospitals, food processing, breweries, and
wineries)
Wastewater Flow (per hundred cubic feet) $5.57
Biochemical Oxygen Demand (per 1,000 pounds) $1,473.00
Suspended Solids (per 1,000 pounds) $769.00
Fixed charge $108.20
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2.3 WASTEWATER ACCOUNTS AND USAGE CHARACTERISTICS
Customer accounts and usage information in FY 2022 are used as the basis for projecting wastewater revenues
during the study period, from FY 2023 to FY 2028. The projections are based on Central San’s long-range financial
plan. The number of wastewater accounts and water usage are projected to increase at approximately 0.4
percent per year through FY 2028. Table 2-2 shows the estimated total residential customer accounts by
customer class for the planning period from FY 2023 to FY 2028.
Table 2-2:
Projected Residential Customer Accounts
Table 2-3 shows the projected water usage by customer class and projected student counts for the planning
period from FY 2023 to FY 2028.
Table 2-3:
Annual Projected Water Usage (HCF) and Student Enrollment
2.4 WASTEWATER SYSTEM REVENUES
Central San’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 Central San’s
wastewater customers. Other revenue sources include miscellaneous operating revenues such as permit and
Accounts Info FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Single Family Residences 98,825 99,230 99,627 99,965 100,305 100,706
Multi-family Units 43,818 43,998 44,174 44,324 44,474 44,652
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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 from the City of Concord provide another significant source of operating and capital
revenues. The majority of the wastewater service charges are placed on the property tax roll, however about 200
government-owned parcels and other parcels which do not receive property tax bills are billed directly by Central
San.
Table 2-4 presents the details of the operating and capital related revenues. Central San 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 2-4:
Revenue Summary under Current Rate Structure
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2.5 WASTEWATER SYSTEM EXPENDITURES
For sound financial operation of Central San'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.
2.5.1 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 Central San's long-range financial plan, using inflationary factors and
assumptions ranging from 1.75 to 6.5 percent per year to project O&M expenditures.
Projected O&M expenditures for the study period are summarized by function and by category in Tables 2-5 and
2-6, respectively.
Table 2-5:
Projected O&M Expenses1 by Function
Table 2-6:
Projected O&M Expenses1 by Category
2.5.2 Capital Improvement Program
Central San has developed a comprehensive wastewater CIP to address current wastewater system needs. As
Table 2-7 indicates, the total estimated wastewater CIP for the study period of FY 2023 to FY 2028 is $568.1
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million. Central San applied an inflation rate of five percent per year for FY 2024 and 2025 and an inflation rate of
four percent per year for FY 2026, and inflation rate of 3 percent per year for FY 2027 and beyond. The financial
plan calls for Central San to fund capital costs through a combination of rate revenues supplemented with debt
financing. Funding the capital costs through rates is especially prudent because Central San’s capital costs are
fairly uniform over the planning period, and rates will provide the necessary cash to fund those projects and save
on interest costs. However, issuing debt will spread the costs over a longer term and minimize the revenue
adjustments needed in the short term. The proposed rate adjustments are primarily used to fund an increase in
capital expenditures.
Table 2-7:
Capital Improvement Plan1
1. Based on budgeted and projected revenues as of January 2023
2. Contingency will be included in individual projects beginning in FY 2024
2.5.3 Revenue Adjustments
Central San’s financial plan projects the following revenue adjustments for the next five years, as shown in Table
2-8. The adjustments are necessary to meet projected expenditures and to maintain sufficient reserves balances.
Table 2-8:
Revenue Adjustments Schedule
Fiscal Year Revenue Adjustments
2024 2.2%
2025 4.0%
2026 4.0%
2027 4.0%
2028 4.0%
2.5.4 Debt Service Requirements
Debt service requirements consist of principal and interest payments on existing debt. Central San currently has
debt service obligations associated with the outstanding 2018 bonds and the 2021 Certificates of Participation
(COPs). Existing debt service payments are approximately $13.2 million for FY 2023 and are anticipated to drop to
approximately $9 million per year in FY 2024, before declining further to $1.9 million in FY 2029-30. These debt
service figures do not include payments on the SRF loan. Table 2-9 shows the existing debt service of the
wastewater utility.
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Table 2-9:
Existing Debt Schedule
2.5.5 Debt Service Coverage
Central San must meet debt service coverage requirements on its outstanding bond issues. Coverage
requirements typically vary between 100 percent and 160 percent or higher. Central San’s target debt coverage is
200 percent, which means that Central San’s Adjusted Net System Revenues shall amount to at least 200 percent
of the Annual Debt Service. This is a Central San policy level requirement adopted for targeted credit ratings,
minimum debt service requirements specified in the bond documents may be lower. The system revenues include
funds derived from the ownership and operation of the system including wastewater service charges from Central
San’s customers, miscellaneous service charges, revenues received from contracts, and interest income. A
portion of the annual Sewer Service Charge is allocated to the Sewer Construction Fund and is considered to be
Non-Operating Income by Central San. Annual Debt Service includes annual principal and interest payments on
outstanding debt. Adjusted net revenues equal the net revenues less capacity fee revenue and the capital
charges from City of Concord. As shown in Table 2-10, Central San 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.
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Table 2-10:
Debt Coverage Calculation
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2.5.6 Operating Financial Plan
Table 2-11 shows the operating financial plan for FY 2023 through FY 2028 based on the revenue and expenses
information presented above. The plan includes the revenue adjustments shown in Table 2-8.
Table 2-11:
Operating Financial Plan
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2.5.7 Reserves
Central San currently has four separate funds/reserves: running expense fund, sewer construction fund, self-
insurance/emergency fund, a debt service fund. 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 current reserves
policy is 41.7 percent of next year’s O&M expenses, 50 percent of next year’s non-debt funded CIP expenses, 100
percent of next year’s debt service payment, $1.5 million for self-insurance, and $7.5 million for emergencies. The
self-insurance reserve is set at $1.5 million to cover three potential incidents. The emergency reserve is set at
$7.5 million to cover the liability insurance deductible for losses resulting from damage to wastewater assets
during disasters. The estimated FY 2023 total ending balance for the Running Expense Fund and Sewer
Construction Fund is approximately $105 million, as shown in Figure 2-1. These reserves also account for the cash
flow needs associated with Central San’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 targets1 for the running expense fund and sewer construction
fund are shown in Figure 2-1. The reserve levels are above the proposed targets for the entire study period. The
reserve levels in the Sewer Construction Fund are necessary to cover CIP expenses in future years.
Figure 2-1:
Projected Reserves– Running Expense and Sewer Construction Funds
1 Does not include the $9.0 million for self-insurance and emergency reserve. That money is set aside in separate funds.
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Figure 2-2 shows the total fund balance by the different funds maintained by Central San, including the Running
Expense, Sewer Construction Fund, and the Self-Insurance Fund, which includes the Emergency Fund.
Figure 2-2:
Projected Reserves
Table 2-12 shows the total fund balances for the different funds within Central San, as well as the current and
proposed targets.
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Table 2-12:
Projected Reserves
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Budgeted Projected Projected Projected Projected Projected
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
SELF INSURANCE FUND
Beginning Balance $10,633,117 $9,000,000 $9,000,000 $9,000,000 $9,000,000 $9,000,000
Revenue
Sewer Service Charge $464,483 $2,188,072 $2,332,745 $2,494,347 $2,665,976 $2,849,693
All Other $72,400 $121,303 $125,991 $124,474 $124,451 $124,715
Total Revenue $536,883 $2,309,375 $2,458,736 $2,618,821 $2,790,427 $2,974,408
Expenses
Insurance Premiums $1,745,000 $1,875,875 $2,016,566 $2,167,808 $2,330,394 $2,505,174
Loss Payments $425,000 $433,500 $442,170 $451,013 $460,033 $469,234
Total Expenses $2,170,000 $2,309,375 $2,458,736 $2,618,821 $2,790,427 $2,974,408
Ending Balance $9,000,000 $9,000,000 $9,000,000 $9,000,000 $9,000,000 $9,000,000
Over (Under) Target $0 $0 $0 $0 $0 $0
Self Insurance Target $9,000,000 $9,000,000 $9,000,000 $9,000,000 $9,000,000 $9,000,000
DEBT SERVICE FUND
Beginning Balance $0 $9,154,142 $8,809,875 $9,045,000 $9,293,750 $9,110,250
Revenue
Sewer Service Charge $819,564 $0 $0 $0 $0 $0
Tax Revenue $21,584,000 $8,711,923 $8,946,142 $9,193,779 $9,007,553 $14,946,397
Interest $0 $97,952 $98,858 $99,971 $102,697 $100,937
Total Revenue $22,403,564 $8,809,875 $9,045,000 $9,293,750 $9,110,250 $15,047,334
Expenses
Debt Service $13,249,422 $9,154,142 $8,809,875 $9,045,000 $9,293,750 $9,110,250
Total Expenses $13,249,422 $9,154,142 $8,809,875 $9,045,000 $9,293,750 $9,110,250
Ending Balance $9,154,142 $8,809,875 $9,045,000 $9,293,750 $9,110,250 $15,047,334
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3. 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 WEF Manual of Practice No. 27, Financing and Charges for
Wastewater Systems.
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 (I&I)
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
3.1 PROPOSED CUSTOMER CLASSIFICATIONS
As part of the study, Raftelis reviewed the current customer classifications. Central San indicated that increasing
numbers of ADUs were being permitted and requested a review of parcels with ADUs to determine if it was still
appropriate to place those units in the same rate class as apartments, condominiums, duplexes, and mobile
homes. Central San provided residential water consumption data for calendar years 2018 and 2019. This data set
included Contra Costa County’s use code for each parcel. Contra Costa County uses use code 11 as “Single Family
Residential, 1 [unit] on 1 site” and use code 13 as “2 or more [units] on 1 or more sites.” Central San has indicated
that they have found use code 13 to be a good indication of an Accessory Dwelling Unit or similar structure.
Central San also provided the annual charge that was levied against the parcel. For the analysis, the combination
of county use code and annual charge was used to classify parcels as the inclusion of the annual charge helped
identify parcels with recently added ADUs. Table 3-1 shows the average water consumption of parcels with and
without an ADU. The results show that an ADU uses 50 percent of the water of a single-family residence.
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Table 3-1:
Average Water Consumption of Parcels With and Without ADUs
Central San has historically billed elementary, intermediate, and high schools on a per-student basis. This was
reviewed during the prior COS study and a recommendation was made to increase the rates based on the per-
student wastewater generation values then used. Subsequent to the implementation of the updated school rates
for FY 2016, Central San reviewed actual water consumption for each of the school sites. As a result of this
review, the rates for high schools were reduced to better match the average actual consumption. Several schools
with water consumption significantly lower than the per-student based estimates were moved to consumption-
based billing. Central San has contacted school districts within its service area who confirmed that the number of
on-site instruction days and hours are back to pre-pandemic levels.
3.2 PLANT BALANCE
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 Central San’s strength concentration. The remaining loadings, net of the total less 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/l) 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 3-2, including the assumed BOD and TSS loadings.
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Table 3-2:
FY 2024 Plant Balance
3.3 CATEGORIZATION 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 3-3
shows the FY 2024 O&M expenses by the different functional categories, as classified by staff. Administration and
Engineering expenses are reclassified into Collection and Treatment portions in proportion to the Flow and
Treatment costs.
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Table 3-3:
Categorization of Wastewater O&M Expenses by Function
Table 3-4 shows the replacement value of the total wastewater assets by the different asset classes, as taken
from a 2014 analysis provided by Central San Asset Management group.
Table 3-4:
Categorization of Wastewater Assets by Function
3.4 ALLOCATION OF FUNCTIONAL COSTS TO COST COMPONENTS
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 Central San staff’s estimate of the fixed costs of the collection
system, which were determined by Raftelis 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 the prior COS study.
Central San believes that the treatment cost structure has not changed significantly since then.
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
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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 for 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 3-5 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 Central San.
Table 3-5:
Allocation to Cost Components – O&M
Table 3-6 shows the allocation of O&M expenses (shown in Table 3-3) to the different cost components based on
the allocation percentages shown in Table 3-5.
Table 3-6:
Allocation of O&M Expenses to Cost Components
Table 3-7 shows the different allocations, provided by Central San, to the cost components such as Flow, BOD,
TSS, etc. of the treatment plant assets.
O&M Allocation Factors Flow BOD TSS Customer General TOTAL
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%
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Table 3-7:
Allocation of O&M to Cost Components – Treatment Plant
Table 3-8 shows the different allocations to the cost components such as Flow, BOD, TSS, etc. of each capital asset
class.
Treatment Plant
Replacement
Cost Flow BOD TSS Customer General
Wet Weather Facilities
Holding Basins $152,500 100% 0% 0%
Bypass Facilities $6,803,307 100% 0% 0%
Primary Treatment
Headworks $9,954,350 100% 0% 0%
Pre-Aeration $6,472,000 45% 10% 45%
Primary Sedimentation $47,747,805 45% 10% 45%
Odor Control $5,607,500 45% 10% 45%
Secondary Treatment
Primary Effluent $2,963,900 100% 0% 0%
Aeration/Nitrification $77,580,885 25% 65% 10%
Secondary Clarifiers $40,736,800 25% 65% 10%
Odor Control $10,000 25% 65% 10%
Disinfection
UV $42,439,793 100% 0% 0%
Hypochlorite $1,635,558 100% 0% 0%
Chlorine/Dechlorine $2,993,400 100% 0% 0%
Final Effluent
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%
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Table 3-8:
Allocation to Cost Components – Capital
Table 3-9 shows the allocation of the replacement value of the wastewater assets (shown in Table 3-4) to the
different cost components based on the allocation percentages shown in Table 3-8.
Table 3-9:
Allocation of Wastewater Assets to Cost Components
3.5 ALLOCATION OF REVENUE REQUIREMENTS
The total revenue requirements net of revenue credits from miscellaneous sources, is by definition, the net
revenue requirement or net cost of providing service, as shown in Table 3-10. 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 2024, and
accordingly FY 2024 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.
Table 3-10 shows the allocation of revenue requirements to operating and capital components to determine the
revenue required from rates. The total FY 2024 cost of service to be recovered from Central San’s wastewater
customers is estimated at approximately $117.1 million, of which approximately $64.6 million is operating costs
and the remaining $52.5 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 2024. Adjustments are also made to account for cash balances to ensure adequate collection of
revenue and to determine annual revenues needed from rates.
Assets Allocation Factors Flow BOD TSS Customer General TOTAL
Collection System 100% 100%
Treatment Plant 29% 26% 15% 0% 30% 100%
General Improvements 100% 100%
Recycled Water 100% 100%
Assets Allocation Flow BOD TSS Customer General TOTAL
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%
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Table 3-10:
Allocation of Revenue Requirements
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3.6 DEVELOPMENT OF UNIT COSTS OF SERVICE
In order to allocate costs of service to the different customer classes, unit costs of service are developed. Units of
service for each cost component are developed in order to allocate costs of service to the different customer
classes. 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 3-11 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 3-2 and from the customer data shown in
Tables 2-2 and 2-3.
Table 3-11:
Projected FY2024 Customer Class Service Units 1
1 Non-residential flow estimates include a 90% reduction factor to account for water usage that does not contribute to wastewater flow.
The total operating and capital revenue requirements (from Table 3-10) are allocated to the different cost
components based on the percentages calculated in Tables 3-6 and 3-9, respectively. The General component is
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Wastewater Cost of Service Study Report | 28
allocated proportionally back to the remaining costs components. Table 3-12 shows the calculation of the unit
cost for each cost component, using the units of service from Table 3-11.
Table 3-12:
Development of Unit Costs
3.7 ALLOCATION OF COSTS TO CUSTOMER CLASS
The unit cost of each of the cost categories shown in Table 3-12 is then applied to the projected FY 2024 service
units of each customer class to derive customer class costs. Table 3-13 shows the allocation of costs to each
customer class, based on the service units from Table 3-11 and the unit cost from Table 3-12.
Table 3-13:
Allocation of Costs to Customer Class
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Wastewater Cost of Service Study Report | 29
The residential class has the highest assignment of costs at $97 million and is responsible for 83 percent of the
total cost of service. The non-residential classes are responsible for the remaining 17 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.
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Wastewater Cost of Service Study Report | 30
4. PROPOSED WASTEWATER RATES
4.1 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 Central San’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.
4.2 PROPOSED RESIDENTIAL CHARGES
Central San currently has a fixed charge structure for its residential wastewater customers. Since Central San bills
on the tax roll and does not have access to all customers’ water usage records, Raftelis recommends that Central
San retains the fixed charge structure for residential customers. A review of water consumption data for parcels
with and without ADUs indicates that a separate rate class for ADUs is appropriate.
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 Central San’s cost structure, the estimated total variable costs, include chemicals,
utilities, and net capital costs, in the system are approximately 54 percent2. These costs are applied per unit of
wastewater flow. The remaining 46 percent of the total system costs, considered fixed costs, are applied per
dwelling unit. Table 4-1 shows the cost-of-service calculation of wastewater charges for SFR and MFR customers
for FY 2024 based on the COS analysis. The COS analysis is based on the status quo revenue requirement, meaning
that the revenue adjustments in Table 2-8 are not yet applied. The annual charges for Residential customers in
Table 4-1 are adjusted by the revenue adjustments stated for FY 2024 and FY 2025 to determine the proposed
rates.
Table 4-1:
Calculated Residential Wastewater Charges – FY 2024 (Status Quo)
2 The average chemical and utilities cost is approximately 9 percent of the expenses, as shown in Table 2-6. Net capital cost is
approximately 45 percent, as shown in Table 3-10.
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Wastewater Cost of Service Study Report | 31
According to the financial plan, the total revenue adjustment in FY 2024 is 2.2 percent and in FY 2025 is 4.0
percent (refer to Table 2-8). Thus, residential wastewater charges need to increase 2.2 percent in FY 2024 to
meet the revenue requirements, meaning that SFR charges would be $697 per dwelling unit, MFR charges would
be $622 per dwelling unit, and ADU charges would be $339 per unit. Table 4-2 shows the proposed FY 2024 and
FY 2025 residential wastewater charges with the appropriate revenue adjustments determined in the financial
plan. In FY 2025, the SFR charge would be $725 instead of $697, the MFR charge would be $647 instead of $622,
and the ADU charge would be $353 instead of $339.
Table 4-2:
Proposed FY 2024 and FY 2025 Residential Wastewater Charges
4.3 PROPOSED NON-RESIDENTIAL RATES
Table 4-3 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 3-13 and the estimated
flow by customer class as shown in Table 3-11. Industrial customers will be charged on a unit rate basis. All non-
residential customers are subject to a minimum annual charge equal to the MFR charge.
Table 4-3:
Proposed FY 2024 and FY 2025 Non-Residential Wastewater Rates
User Group
Current
Effective
July 1, 2022
Proposed
Effective
July 1, 2023
Proposed
Effective
July 1, 2024
Non-Residential (per hcf)
Low (Retail, Office, Churches, Fraternal &
Service Organizations, State and Local
Institutions, Tax Exempt, Utilities with Special
Tax Status, Independent Living Facilities, Rest
Homes, & Convalescent Hospitals, and other
businesses with a combined BOD + TSS of less
than 350 mg/l)
$7.20 $7.63 $7.94
Medium-Low (Delicatessens, Yogurt Shops, Ice
Cream Shops, Coffee Shops, Bar, customers with
shared water meters with less than 50% food
service, other businesses with BOD + TSS less
than or equal to 700 mg/l)
$8.83 $9.32 $9.69
Residential Annual Charges
(per Residential Unit)Current Effective July
1, 2023
Effective July
1, 2024
SFR $690 $697 $725
MFR $654 $622 $647
ADU $654 $339 $353
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Wastewater Cost of Service Study Report | 32
Medium (customers with shared water meters
with 50% or more food service, other businesses
with BOD + TSS less than or equal to 1,000 mg/l)
$11.07 $10.99 $11.43
Medium-High (Restaurants, Supermarkets,
Hotels and Motels, customers with shared
meters which include bakeries, other businesses
with BOD + TSS greater than 1,000 mg/l)
$12.35 $12.04 $12.52
High (Bakeries, Restaurants with on-site
breweries, Restaurants with food-waste grinders
or emulsifiers, other businesses with BOD + TSS
greater than 1,300 mg/l)
$16.37 $14.48 $15.06
Minimum Annual Charge $654.00 $622.00 $647.00
Schools
Schools - Daycare, Preschool, University
(per hundred cubic feet) $7.20 $7.63 $7.94
Schools – Elementary $8.58
per student
$8.94
per student
$9.30
per student
Schools – Intermediate, High School $16.95
per student
$17.89
per student
$18.61
per student
Permitted Industrial Users (includes hospitals, food processing, breweries, and wineries)
Wastewater Flow (per hundred cubic feet) $5.57 $7.28 $7.57
Biochemical Oxygen Demand (per 1,000 pounds) $1,473.00 $1,268.00 $1,338.00
Suspended Solids (per 1,000 pounds) $769.00 $644.00 $670.00
Fixed charge $108.20 $248.00 $258.00
Special Discharge Permits & Contractual
Agreements:
Determined
Individually
Determined
Individually
Determined
Individually
4.4 CUSTOMER IMPACTS
RFC completed an analysis to evaluate the impact of the proposed rate structure on customers with various water
usage levels.
4.4.1 Customer Impacts
Table 4-4 compares the residential bill impacts for FY 2024 and FY 2025 to current rates. SFR customers would
experience a $7 annual increase for FY 2024 and a $28 annual increase for FY 2025. MFR customers would
experience a $32 reduction for FY 2024 and a $25 increase for 2025. A new rate class would be created for
Accessory Dwelling Units and those units would be charged $339 per unit for FY 2024 and that amount would be
increased by $14 for FY 2025. ADUs are currently charged as one MFR unit.
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Wastewater Cost of Service Study Report | 33
Table 4-4:
Residential Annual Wastewater Bill Impacts
Current
Proposed
Effective
July 1, 2023
Proposed
Effective
July 1, 2024
Proposed
July 1, 2023
Increase or
(Decrease)
Proposed
July 1, 2023
Increase or
(Decrease)
SFR $690 $697 $725 $7 $28
MFR 654 622 647 (32) 25
ADU -- 339 353 -- 14
Table 4-5 shows the typical non-residential bill impacts for Central San’s largest non-residential rate classes for
FY 2024 and FY 2025 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 4-5:
Typical Non-Residential Annual Wastewater Bill Impacts
Non-residential
Customer Class
Average
Annual
Usage
(HCF)
July 1, 2022
Average Bill
July 1, 2023
Average Bill
July 1, 2024
Average Bill
July 1, 2023
Difference
July 1, 2024
Difference
July 1, 2023
Difference
July 1, 2024
Difference
Low (offices, retail, etc.) 722 5,198 5,509 5,733 310 224 6.0% 4.1%
Medium High (Restaurants) 799 9,868 9,620 10,003 (248)384 -2.5% 4.0%
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Water and Wastewater Cost of Service Study Report | 34
5. APPENDIX
Cost of Service Model Assumptions
Inflation Factors 2023 2024 2025 2026 2027 2028
Running Expenses
Salaries & Wages 5.00% 5.00% 5.00% 3.75% 3.75% 3.75%
Salary-Step Increases/Longevity 1.75% 1.75% 1.75% 1.75% 1.75% 1.75%
Pensionable Salary 90.40% 86.33% 86.33% 86.33% 86.33% 86.33%
Purchased Services/Expenses 4.00% 4.00% 3.00% 3.00% 3.00% 3.00%
Supplies & Materials 4.00% 4.00% 3.00% 3.00% 3.00% 3.00%
Chemicals 4.75% 4.50% 4.50% 4.50% 4.50% 4.50%
Utilities 4.75% 4.50% 4.50% 4.25% 4.25% 4.00%
Insurance & Risk Management 4.00% 4.00% 3.00% 3.00% 3.00% 3.00%
Benefits
Medical & Health Insurance 5.34% 6.50% 6.25% 6.00% 5.80% 5.60%
Dental Insurance 3.80% 3.75% 3.75% 3.75% 3.75% 3.75%
Workers' Compensation Insurance 5.00% 5.00% 5.00% 5.00% 4.00% 4.00%
Benefits Vacancy 4.00% 3.00% 3.00% 3.00% 3.00% 3.00%
Capital
Capital Inflation Rate 0.00% 5.00% 5.00% 4.00% 3.00% 3.00%
Max Debt as % of 10-Year CIP 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%
Debt Financing Terms
Bond Issuance Cost 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Portion of Debt Service Payment in First Year 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
SRF Interest Rate 0.90% 2.00% 2.40% 2.40% 2.60% 2.60%
Bond Interest Rate 3.50% 4.00% 4.00% 4.00% 4.00% 4.50%
Revenue/Growth
Growth Rate 0.41% 0.41% 0.40% 0.34% 0.34% 0.40%
New Connections (RUE) 700 700 700 600 600 700
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Water and Wastewater Cost of Service Study Report | 35
Reserve Requirements
Running Expense 41.67% 41.67% 41.67% 41.67% 41.67% 41.67%
Sewer Construction 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
Self-Insurance: Subfund A $1.5 M $1.5 M $1.5 M $1.5 M $1.5 M $1.5 M
Self-Insurance: Subfund C $7.5 M $7.5 M $7.5 M $7.5 M $7.5 M $7.5 M
Debt Service: Bond 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Debt Service: CoP 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Debt Service: SRF 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
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5019 Imhoff Place, Martinez, CA 94553
WHAT YOU NEED TO KNOW
NOTICE OF
PROPOSED RATE
INCREASES AND
PUBLIC HEARING
AT 1:30 P.M. ON
JUNE 21, 2023
NEW RATE HEARING DATE
Printed with soy-based inks on recycled paperFor more information: CENTRALSAN.ORG/NOTICE
We will continue to implement an extensive neighborhood sewer
pipe replacement program, which will maintain and improve
reliable service levels in the community.
We stay committed to protecting public health and the environment and will
continue to offer services such as the Household Hazardous Waste Collection
Facility and Residential and Commercial Recycled Water Fill Stations.
We will continue to provide our customers
exceptional service at responsible rates.
We will continue to prudently manage costs and maintain
the financial stability and sustainability of Central San.
We will continue to maintain and upgrade our treatment plant,
pump stations, pipelines, and other critical infrastructure
essential to moving and cleaning wastewater.12345
DOING MORE TO PROTECT OUR ENVIRONMENT
1.HOUSEHOLD HAZARDOUS WASTE COLLECTION (HHW): For 25 years,
we have operated one of the most successful HHW facilities in the nation.
We have collected over 47 million pounds of paint, cleaners, pesticides,
batteries, fluorescent lamps, and much more, keeping those hazardous
products out of sewers, storm drains, and landfills by reusing or recycling
nearly 90% of what we collect.
2. RECYCLED WATER: Always on the forefront of local water resiliency,
we’ve distributed more than 4.5 billion gallons of recycled water to
customers, saving precious drinking water supplies.
PARTNERING WITH OUR CUSTOMERS
We have not done this alone. You, our customers, have provided us with
the funds necessary to do all this work and fulfill our mission of protecting
public health and our local environment. We are thankful for the trust you
have placed in us, and we remain committed to providing you exceptional
service at reasonable rates. At Central San, we continually strive to control
costs and do everything we can to keep rates low. Through proactive
maintenance, we’ve extended the lifespan of our facilities and equipment
to make every dollar work harder for our customers. When necessary, we
also have continuously invested in our pipes, pumps, and treatment plant
to ensure safe, efficient, and reliable service.
FINANCIAL ACTIONS
Held operation and maintenance
costs flat for the past 8 years
Secured low-cost state financing to
save $20 million in interest costs on
large-scale projects
Paid off pension liabilities, projected to
save nearly $15 million in interest payments
Maintained AAA (S&P) and Aa1
(Moody’s) credit ratings to keep
borrowing costs low
Benchmark performance
annually to ensure efficient,
cost-effective operations
YOUR DOLLARS AT WORK
Despite the challenges of the pandemic,
over the past four years we’ve worked hard to
complete several significant infrastructure
improvement projects.
1.RECYCLED WATER: We completed construction
of new storage facilities that will hold 6 million
gallons of recycled water ready for distribution to
make the most of our precious water resources.
2. PIPES AND PUMP STATIONS: We replaced over
19 miles of aging neighborhood sewer pipes
throughout our service area and completed major
renovations to three large pump stations serving
Orinda and Moraga.
3.INFLOW AND OUTFALL: We rehabilitated the
mechanical equipment and concrete structures
where wastewater enters our treatment plant and
the cleaning process begins. We also completed
critical inspections and improvements to our
3.5-mile outfall pipeline, which carries cleaned water
from our treatment plant to Suisun Bay to be safely
returned to the environment.
4. STEAM AND AERATION BLOWER SYSTEMS: We
completed comprehensive condition assessments
of our aging steam and aeration blower systems
and began design and construction of critical
seismic and other upgrades.
Central SanCentral San
NOTICE OF PROPOSED RATE INCREASES
Central Contra Costa Sanitary District (Central San) is your local sewer
service provider protecting public health and the environment for almost
77 years. Our team of dedicated professionals work around the clock
to collect and clean wastewater for nearly 500,000 residents and over
3,000 businesses in central Contra Costa County. Every time you wash
your dishes or clothes, flush your toilets, or use your sinks, bathtubs,
and showers, Central San collects and cleans all that dirty water. It is
not easy, but we take our job seriously. We maintain over 1,500 miles of
underground pipe and 18 pump stations to transport wastewater from
our customers to our regional treatment plant, where we clean about
13 billion gallons of wastewater every year.
ATTACHMENT 2
May 4, 2023 Regular Board Meeting Agenda Packet - Page 143 of 218
Page 45 of 47
PREPARING FOR THE FUTURE
As we begin our 77th year of service to the community, our key priori-
ties include replacing aging infrastructure, meeting emerging regula-
tory requirements, preparing for the future, and ensuring environmental
stewardship and sustainability in everything we do. As parts of our system
reach the end of their useful lives, prudent capital investments are neces-
sary to guarantee the reliable service you have come to expect from us.
Our long-term planning has identified many upgrade and replacement
projects for the collection system pipes, pump stations, and treatment
plant to ensure they continue to function properly now and into the future.
The proposed rate increases will continue to provide the necessary funding
for these critical projects currently scheduled for the next two years.
1. COLLECTION SYSTEM: We will replace about 14 miles of aging neighbor-
hood sewer pipes to ensure reliable service for decades to come.
2. PUMP STATIONS: We will continue phased renovations of our pump
stations, focusing on three large pump stations that are essential for contin-
uous delivery of wastewater from the Martinez area to our treatment plant.
3. LARGE SEWER INSPECTIONS: We will continue inspection and condition
assessments of large sewers, called interceptors, to plan for future repairs.
Measuring up to 8.5 feet in diameter, these pipes convey wastewater from
neighborhoods throughout our service area; nearly half are over 50 years old.
4. SOLIDS HANDLING: We will launch a large-scale, multi-year
rehabilitation of our solids handling facilities, starting with replacing aging
equipment including burners, centrifuges, pumps, and air pollution control
equipment to ensure reliable ongoing processing of wastewater solids
and compliance with strict air quality regulations.
5. STEAM AND AERATION BLOWER SYSTEMS: We will repair or replace
critical components of our aging steam generation equipment to address
vulnerabilities identified through our recent condition assessments.
6. AERATION BASINS: We will begin the phased repair or replacement of mechanical
equipment and concrete structures in our aeration basins to improve seismic reli-
ability, enhance the efficiency of our biological treatment processes, better protect
the environment, and prolong the lifespan of these critical facilities.
7. RECYCLED WATER: We will complete the first phase of renovations to our recycled
water plant, originally constructed in the 1970s. Along with our recently completed
recycled water storage, these improvements will ensure continued reliability of our
recycled water system and support expanded capacity for the future.
NOTICE OF PROPOSED RATE INCREASES
*NEW RATE CATEGORY: Central San is
proposing to implement a new, lower
rate for Accessory Dwelling Units
(ADUs), which are currently billed at
the same rate as an apartment unit
or condo. ADUs may include in-law
units, backyard cottages, and other
smaller independent residential units
located on the same property as a
single-family home. To ensure fair
rates, Central San completed a study
to assess the costs of providing sewer
service to all of our customer classes,
including ADUs. The proposed rates
are based on this analysis.
The cost of service report is available
at centralsan.org/notice.
CURRENT & PROPOSED ANNUAL SEWER SERVICE CHARGE RATES
USER GROUP CURRENT RATE PROPOSED RATE
EFFECTIVE JULY 1, 2023
PROPOSED RATE
EFFECTIVE JULY 1, 2024
RESIDENTIAL CUSTOMERS (RATE PER LIVING UNIT)
Single Family Homes $690.00 $697.00 $725.00
Apartments, Condominiums, Duplexes, Mobile Homes $654.00 $622.00 $647.00
Accessory Dwelling Units (ADUs)*—*$339.00 $353.00
COMMERCIAL & OTHER NON-RESIDENTIAL CUSTOMERS (PER HUNDRED CUBIC FEET - HCF)
STRENGTH
CATEGORY†DESCRIPTION
LOW
Retail, Office, Churches, Daycare,
Preschools, Universities, Rest Homes,
and Automotive
$7.20 $7.63 $7.94
LOW-MEDIUM
Delis, Ice Cream and Yogurt Shops,
Coffee Shops, Bars, and Shared meters
with 50% or less food service
$8.83 $9.32 $9.69
MEDIUM Shared meters with 50% or more
food service $11.07 $10.99 $11.43
MEDIUM-HIGH
Hotels, Motels, Restaurants, Supermarkets,
Shared meters with Bakeries or other
High Strength Food Services
$12.35 $12.04 $12.52
HIGH Bakeries, Breweries, Restaurants with
Grinders or Emulsifiers, and Mortuaries $16.37 $14.48 $15.06
SCHOOLS Elementary (per student)$8.58 $8.94 $9.30
Intermediate / High (per student)$16.95 $17.89 $18.61
MINIMUM ANNUAL CHARGE $654.00 $622.00 $647.00 RATE HEARING PROCESS / HOW TO PROTEST
Central San’s annual Sewer Service Charge funds round-the-
clock operations, maintenance, and construction of critical
infrastructure. Proposition 218 requires that wastewater agen-
cies like Central San must base their charges on the cost of
providing those services. Central San’s Board of Directors will
consider proposed rate increases for the next two years for
property owners of single family homes, multifamily dwellings,
Accessory Dwelling Units (ADUs), and commercial, industrial,
and institutional properties at a public hearing on the resched-
uled date of JUNE 21, 2023, AT 1:30 P.M., Central Contra Costa
Sanitary District Board Room, 5019 IMHOFF PLACE, MARTINEZ, CA
94553. Public comments and written protests will be accepted
at the public hearing. Written protests may be mailed or
hand-delivered to Central San prior to the public hearing to
the Secretary of the District at the address listed above. Written
protests must include the property’s address or Assessor’s
Parcel Number(s) and must be signed by the property owner or
tenant (only one protest per parcel counted). Scanned copies
of signed protest letters may also be submitted by fax
(925) 372-0192 or email to KYOUNG@CENTRALSAN.ORG.
All written protests must be received prior to the close of the
public hearing. PREVIOUSLY SUBMITTED PROTESTS ARE
STILL VALID. As required by law, the rate increases will not be
imposed if valid written protests are received from a majority of
property owners. More information about filing a protest can be
found at centralsan.org/notice or by calling (925) 335-7702.
Any suit to set aside the proposed rate increases must be
filed within 120 days of July 6, 2023, the effective date.
CENTRAL SAN
†STRENGTH CATEGORY: Some types of businesses produce more
concentrated sewer waste that requires additional energy and
effort to treat. Central San has developed five categories –
low, low-medium, medium, medium-high, and high – to fairly
charge those customers for their proportionate cost of providing
wastewater treatment services.
A nonresidential customer’s annual Sewer Service Charge is
determined by multiplying the appropriate strength category rate
times the annual wastewater discharge volume measured in HCF
(Hundred Cubic Feet). For example, a bakery discharging 250 HCF
per year would pay an annual sewer service charge at the July 1,
2023 proposed rate calculated as follows:
($14.48 per HCF) x (250 HCF per year) = $3,620.00.
If you have questions regarding your Sewer Service Charge, or
would like us to calculate a property-specific estimate of your
Sewer Service Charge for the upcoming rate years, please send an
e-mail request including your name, Assessor’s Parcel Number(s),
address, and phone number to rates@centralsan.org, or call
Central San’s Community Information Line at (925) 335-7702.
Additional information is available at centralsan.org/notice.
May 4, 2023 Regular Board Meeting Agenda Packet - Page 144 of 218
Page 46 of 47
Attachment 3
Exhibit A
USER GROUP
PROPOSED
RATE
EFFECTIVE
JULY 1, 2023
PROPOSED
RATE
EFFECTIVE
JULY 1, 2024
Residential*
Single Family
Increase 1% 4.0%
Annual
SSC $697 $725
Accessory Dwelling Units
Increase (48.2%) 4.1%
Annual
SSC $339 $353
Multi-Family Residences
Increase (4.9%) 4.0%
Annual
SSC $622 $647
Non-Residential**
Low
Increase 6% 4.1%
Annual
SSC $7.63 $7.94
Medium-Low
Increase 5.5% 4.0%
Annual
SSC $9.32 $9.69
Medium
Increase (0.7%) 4.0%
Annual
SSC $10.99 $11.43
Medium-High
Increase (2.5%) 4.0%
Annual
SSC $12.04 $12.52
High
Increase (11.5%) 4.0%
Annual
SSC $14.48 $15.06
Minimum Charge
Increase (4.9%) 4.0%
Annual
SSC $622 $647
*Residential rates shown in dollars per residential unit.
**Non-Residential rates shown in dollars per hundred cubic feet.
May 4, 2023 Regular Board Meeting Agenda Packet - Page 145 of 218
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