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_ 9.11(e)--Set Public Hearing regarding four-year rate increases for Solid Waste and Utilities
GI �" Y � F � � � ° � � � " � � CITY OF REDDING REPORT TO THE CITY COUNCIL MEETING DATE: September 5,2023 FROM: Chuck Aukland, Public ITEM NO. 9.11(e) Works Director ***APPROVED BY*** � ��n � .�.._ s.N,.�� � � � ��� ukl�n�l,H'ciblic Wc�aks L'��reGt ' �(?4/2423 ry ip}�in,�C"i ana � �12�/2423 caulcland@ci.redding.ca.us btippin@cityofredding.org SUBJECT: 9.11(e)--Consider setting a Public Hearing regarding a four-year service rate acka e for the City of Reddin Solid Waste, Water, and Wastewater Utilities. Recommendation Approve the following regarding proposed service rates for the City of Redding Solid Waste, Water, and Wastewater Utilities: (1) Approve the Protest Notice format; (2) Approve adding a new rate for the Solid Waste Utility for commercial source-separated food waste collection; and (3) Approve setting a Public Hearing on November 7, 2023, 6:00 p.m., in the City Council Chambers, 777 Cypress Avenue, Redding, California, to consider the four-year package of rates for Solid Waste, Water, and Wastewater Utilities proposed for implementation on or about January 1, 2024. Fiscal Impact The proposed new monthly service rate and annual utility rate increases for Solid Waste, Water and Wastewater over the next four years are provided in the Background below. For comparison purposes, a typical single-family residential customer uses a yearly average of 2,100 cubic feet of water per month, is connected to the City's sewer system, and utilizes a single 96-gallon refuse cart. On or about January 1, 2024, the total impact for the typical household will be approximately $16.83 per month. For years two, three and four, annually, service rates would increase by approximately $10 per month for a total increase above current rates of$47.73 per month in year four. The rate package for Solid Waste includes the addition of a new rate proposed for the collection of commereial source-separate food waste to support the implementation of a new service for businesses subject to the food waste diversion requirements of Senate Bill 1383. Utility customer rcvenue znay not b e used for other gen�ral government purpos�s. Report to Redding City Council August 30,2023 Re: 9.11(e)--Set Public Hearing regarding four year rate increases for Solid Waste and Utilities Page 2 Alternative Action Alternatives for the Council to consider are: 1. Modify and approve the protest notice thereby adjusting the proposed rate increases (up or down) and set the public hearing for November 7, 2023. The implication of this alternative is that staff will, to the extent practical, adjust utility expenses (capital project schedules and programs) to match revenues. If proposed rates are adjusted downward the ability to properly maintain the utility systems may be compromised; or 2. The Council may decline to set a public hearing at this time and direct staff to come back at a later date to show additional justification for any rate adjustments. The implication of this alternative is that the Council determines no rate adjustments are necessary at this time but would consider adjustments at a later date. Background/Analysis Rate Update Process. The City of Redding (City) retained NBS Consultants to undertake the necessary cost-of-service studies and utility-rate analyses used to prepare a new service rate for the implementation of commercial source-separated food waste collection and rate adjustment recommendations for the Solid Waste, Wastewater, and Water Utilities. The recommended rates take into consideration the maintenance and operation of each utility, such as purchasing raw water, electricity, supplies, rehabilitation and replacement of equipment and infrastruct�ure, personnel costs, and regulatory compliance. As part of the update process, staff asked a number of citizens to sit as an "advisory group" (AG) to assist staff and the consultant. Public Works often uses AGs to ensure staff understands the impacts of decisions on various utility and infrastructure users in the community. The AG for this effort was composed of the following individuals who are utility rate customers through their home and/or business in Redding: • Cindy Fisher—Vice President of Cornerstone Community Bank; • Trisha Funk—Financial Counselor and Advisor; • Larry Olmstead—President & CEO of United Way of Northern California; • Cameron Tiraterra—Restaurant Owner; � Janice Cunningham—Real Estate Consultant; and � Sami Kader—Business Owner/Consulting (Civil) Engineer. The focus of the AG was to ensure that the methodology used in the analyses was appropriate, function as a "sounding board" regarding options to modify the rate structures, and provide personal input on the reasonableness of the rates and fees. The AG met six times between May and August 2023, and provided extremely valuable input regarding financial stability, capital improvement program time fram�s, potential adjustments to the rate structures, and a host of other items. Report to Redding City Council August 30,2023 Re: 9.11(e)--Set Public Hearing regarding four year rate increases for Solid Waste and Utilities Page 3 Recent Rate Adjustments. The City Council last considered water, wastewater, and solid waste rate adjustments during a public hearing in February, 2020. At that time, the Council approved increases �or the three Utilities as follows: UTILTTY ' 2U20* 2021* 2022* 2023* ' Solid Waste 3% 3% 3% 3% $0.89 $0.78 $0.80 $0.82 Wastewater 4% 4% 4% 4% $2.19 $2.28 $2.37 $2.47 Water 4% 4% 4% 4% $0.60 $2.11 $2.18 $2.22 TOTAL $3.68 $5.17 $5.35 $5.51 *Monthly increase for typical snlgle-family home usin�96-gallon solid waste service and 2,100 cubic feet of waTer per month. In order to maintain adequate financial operating reserves and relative rate stability through time, it is appropriate that the Council consider adopting Water, Wastewater, and Solid Waste (collectively referred to as Utilities) rate adjustments incrementally to avoid potential future "rate shock," while maintaining the financial integrity of the City's Utilities. Proposed Rate Increases. The following table shows the proposed four years of rate increases for the Utilities. The amounts shown are the proposed monthly increases for a typical single- family residence for each year of the program, which would become effective on or about January 1, 2024. UTILTTY ' 2024* 2025* 2026* ' 2027* Solid Waste 15% 8% 8% 6% $4.29 $2.61 $2.82 $2.28 Wastewater 5% 5% 4% 4% $321 $3.37 $2.83 $2.94 Water 12°/o/ 6.5% 6.5% 6.5% 18%** $4.35 $4.68 $5.02 $9.33 TOTAL $16.83 $10.33 $10.33 $10.24 *Monthly increase for typical single-fainily home using 96-gallon solid waste serviee and 2,100 cubic feet of water per month. **Monthly increase for the fixed meter charge is 12%and the increase for the variable/commodity charge is 18%for a single-family home Need for Rate Increases. The City provides various Utility services for its citizens and some select areas outside the City. The day-to-day operations of each utility are funded through monthly service rates and are not support�d by property taxes or sales taxes paid by residents. The City's utility operations must be financially self-sufficient and fiseally responsible, and must provide reliable services to prevent impacts to customers as a result of deferred maintenance or laek of system capacity. While the Water, Wastewater and So1id Waste Utilities have been Report to Redding City Council August 30,2023 Re: 9.11(e)--Set Public Hearing regarding four year rate increases for Solid Waste and Utilities Page 4 highly successful in containing costs, there are ongoing fiscal challenges that must be addressed, including: • Expanding environmental and regulatory mandates associated with water quality, waste diversion (increased recycling), air quality, endangered-species protection, and more; � Increasing fuel, energy, chemical, material, equipment, and labor costs in all utilities exacerbated by the recent inflationary pressure nationwide; • Needed upgrades to Foothill Treatment Plant, new source water wells and replacement of Pump Station No. 1 in the Water Utility; • Critical aging pipe-replacement needs in the Water distribution and Wastewater collection systems; • Meeting debt service associated with the critical past upgrades to the Clear Creek Wastewater Treatment Plant and the Stillwater Wastewater Treatment Plant; and • Needed upgrades and expansion of the City of Redding Transfer and Recycling Facility. These challenges place continuous upward pressure on rates, and they will continue to do so into the foreseeable fut�ure for the Utilities. By proactively anticipating these future needs, the City and its Utilities strive to prevent dramatic and unanticipated increases in rates and disruption to services and maintain a reasonable level of operating funds using the lowest responsible rates. However, with unanticipated increased inflationary pressure, major capital requirements and new regulatory requirements, particularly in the Water and So1id Waste Utilities, there is a need to reset rates higher than typical before they stabilize into modest annual adjustments. Because each Utility is fundamentally different, detailed information and the recommended rates are summarized for each Utility in Attachments B, C, and D. Public Participation in Rate Setting Process. To ensure public participation in the rate-setting process and implement the requirements of Proposition 218, a Notice of Public Hearing and Protest Procedures (Notice) will be mailed to every property owner as well as each Water, Wastewater, and Solid Waste Utility customer in the City/service area receiving one or more of these services in accordance with Resolution 2019-93 adopted on September 17, 2019. The notice wi11 be mailed a minimum of forty-�ve days prior to the date of the public hearing. This will involve noticing to over 32,000 utility account holders and parcel owners within the City and another 1,000 outside the City. If the total protest forms representing a simple majority (50 percent plus one) of the properties are returned against the proposed rate adjustments, the Council will not be able to enact any rate increases. In order to reduce costs, the proposal is to consolidate the hearings and notices for the Water, Wastewater and Solid Waste Utilities into one combined notice and hearing, and establish rate adjustments for a four-year period. Additional notification of the public hearing and proposed rate increases will include postings on the City`s website and social media outlets, and coverage in the newspaper and other local media sources. Staff hosted a public informational workshop in the City's Community Room on August 31, 2023. Report to Redding City Council August 30,2023 Re: 9.11(e)--Set Public Hearing regarding four year rate increases for Solid Waste and Utilities Page 5 EnviNonmental Review This activity is not a project as defined by the California Environmental Quality Act, and no further action is required. Council Priority/City Manager Goals � Communication and Transparency — "Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust." • Budget and Financial Management — "Achieve balanced and stable 10-year Financial Plans for all funds." • Government of the 215t Century — `Be relevant and proactive to the opportunities and challenges of today's residents and workforce. Anticipate the future to make better decisions today." Attachments ^2023 Prop 218 Notice ^2023 Solid Waste System Overview and Proposed Rates ^2023 Wastewater System Overview and Proposed Rates ^2023 Water System Overview and Proposed Rates ^Resolution 2019-93 Procedures for Protest Hearings G I T Y Q F � ^ � � .-�i � � � u s ; � �`� �w - ,. � � � � � � � �� � C A � I F C? R N I �` �� ,.� � w , � � � .� � . � � � t �� �� � e � �; �, � ' i °, � NOTICEISHERE&YGIVENthat the City ofRedding will hald a public hearing on Tuesday,November�,2023, at 6 p.m., in the C"ity Council Chaa�nbe�s at 777 Cypress Avenu� Redding, Calif'o�niay to consider ad�ption of' new rates and pNoposed increases to existing�ates foN WateN, Wastewater,and Solid T�'aste Utility services Reasons for the pt^oposed Nates are desc�ibed in rrao�^e detccil below For additional information,please visit the City af'Redding Utility wehsite at:www.reddingutilities com. This notice explains proposed Water, Wastewater, and Solid Waste Utility service rate increases for City of Redding customers. The proposed rate increases will only apply to utilitics providcd by tl�e City, not serviccs provided by other entities, such as the Bella Vista Water District or Centerville Cominunity Services District. Please review your City utility bill to determine services received. What Do Water, Wastewater, and Solid Waste Rates Fund? The City provides water, wastewater (scwer), and solid waste (rafuse and recyeling) services to residential and eommereial customers in the Redding area. These Municipal Utilities are not-for-profit and are operated to be finaneially self sufficient. Monthly rates paid by eustomers are the primary source of revenue. Utility rates axc calculated to cover the costs for the maiz�tenance and operation of eaeh Utility, such as purehasing raw water, electrieity, supplies, rehabilitation and replacement of equipment/infrastructure, employee costs, and regulatory compliance. Ratepayer revenue is not used for other general government purposes. For more information about water and wastewater rates and services, please call (530) 224-6Q68, and for solid waste rates and services, please call (530) 224-6201. Visit www.reddingutilities.eom for additional information, incl�uding City Couneil reports,utility master plans, and otlaer relatcd materials. Why are rate increases being proposed? An increase in the rates is necessary in order to cover increased costs associated with operating and maintaining the City's water, wastewater, and solid waste systems. Specifically, the unexpected and significant inflationary cost increases of energy,fuel, chemicals, rehabilitation/replacement of equipment, empioyee costs, and California State regulatory compliance mandates. Funding is also needed to replace significant portions of the Ci1y's aging water and sewer infrastructure network. This is necessary if the Ci1y is to continue to provide reliable service to its customers and comply with the requirements of various regulatory agencies including the replacement of the City's main water pump station built over $5 years ago, miles of pipeline replacement, and installation of a biosolids processing system to divert organic material from the landfill to comply with California Senate Bill 1383. A new commercial rate for businesses is being introduced to provide hauling and disposal serviees for souree separated faad waste; a new requirement imposcd by the State of California tl�rough passage of Senate Bill 1383. If approved, the proposed rate increases will become effeetive January l,2024. Utility rate increases are subject to Proposition 218 requirements approved by California voters in 1996. The City must: (1) inform property owners of the new rates and praposed rate increase(s), (2} clearly demonstrate the basis on which the rates are calculated, and (3) hold a public hearing at least 45 days after public notification. If written protests are received representing a majority of properties receiving the utility service, the proposed rate increase(s) will not be imposed. If a sufficiez�t number of protests are not received, the rate increases may be approved by the City Council. The property owner and the utility account holder (ratepayer) subject to the proposed rate changes may submit a protest against any or all of the proposed rate changes by filing a written protest with the City Clerk at or before the time set for the public hearing. Please be advised: (1) More than one notice may be sent for a single property because the City sends notices to both property owners and ratepayers. (2) Property owners may receive more than one copy of this notice if they own multiple properties andlor have multiple City of Redding utility accounts. (3) While the City may receive multiple protests for a given property, only one protest can be counted for each property. (4)Not all utility services apply to each property, for example, some residents receive water from other providers. (5) A Public Hearing and Majority Protest is 110t 211 @10Ct10T1,t110T0�lT'0 T10"y0S"flT1C�"T10"V0�0S. If you object to the proposed imcrease in unliry rates for a property you own and/ar a utility service you receive,you may submit a written protest against any or all of the proposed rate incrcases by providing the following inforination: (1) the property address andlor Shasta County Assessor's Parcel Number where the service is received; (2)the utility aceount holder or prop�riy owner's printed name a�1d signature; and (3) listing the proposed utility increase(s) being protested. Then place your w�itten protest notice in an envelope and submit to the City of Redding-City Clerlc, 3rd floor, at '7'7'7 Cypress Avenue, Redding, Califarnia via one of the following m�thods: (1)U.S. mail, (2)hand-deliver to the City Clerk's Office,or(3)in person prior to the close of the public hearing. In order for the written protest to be counted as a valid protest,it must contain all the information noted above and be reeeived (not post�narked)by the City Clerk no later than the end of the public hearing noticed above on November 7,2023. Please be ad�ised, if the proposed utility rates do not pass, serviees may be scaled back or modified accordingly to continue operations and comply with regulatory requirements. You may prepare a written protest as instructed above or use this form to protest the proposed utiliry rate inereases. I, ,protest the proposed rate increase(s)for the following utilities: (Print first and Iast name,must be l�gibie) (Print Water,Wastewater,and/or Solid Waste) Property Address or Assessor's Parcel Number: (Please Print legibly) Please sign here: If you wish to use this form as your written protest,fill out and hand deliver or mail in a stamped envelope to: City of Reddirig,City Cl�rk,777 Cypress Avenue,Redding,CA,96001 If you are satisfied with the level of utility services provided and do not object to the proposed rat� increases to fund the op�ration, maintcnance, and replacement costs relating to provzding Wa�er,Wastewater, and Solid Was�e utilities servic�s,you do not need to take any action. Proposed rates for So1id Waste services: The proposed single-family residential rates for the various size solid waste carts are depicted in Table l. Proposed new rates for eollection of source-s�parated food waste from commercial eustomers are depicted in Table 2. In addition to the rate tables shown below, cormnercial aecounts have a recommended increase of same percentages shown in Table 1 for each fiscal year. Because of the diverse nature of commercial colleetion, such as varying number of pickup days per week, size of containers, ete., it is not practieal to list all charges and estimated rate ehanges for this Utility in this rate hearing notice. However, those charges are listed online at www.reddingutilities.com and are available by ealling eustomer serviee at(530) 224-6201. TABLE 1 - Froposed Rates for Residential Solid Waste Serviees . �. - . a � r � ° d � a � � e � ,I � , , �, . °A o . a . ID � ���� � �Rea : reea . �r�, Residential Wheeled Cart Monthly Rate 1 45-Ga) Container $25.30 $25.90 $27.97 $30.21 $32.02 64-Ga) Container $26.45 $28.34 $30.61 $33.06 $35.04 96-Ga) Container $28.30 $32.59 $35.20 $38.02 $40.30 Additional Green Waste Container $4.00 $4.60 $4.97 $5.37 $5.69 Landfill Monitoring ($0.22/month-no increases) 1. Residential Service includes trash,recycling,and green waste containers. New Proposed Rates for Commercial Solid Waste Food Waste Services A new commercial rate for businesses is being introduced to provide hauling and disposal services for source separated food wasta; a new requirement imposed by the State of California through passage of Senate Bill 1383. If approved, the proposed rate increascs will become effeetive January l, 202A�. This portio�� of the proposed increase does not apply to residential customers. TABLE 2 - New Proposed Rates for Commercial Solid Waste Food Waste Services � � . .. - . . . . - . . . . . - . � . � - . . - , 45-Gal Container $29.91 $59.82 $89.72 $119.63 $149.54 $179.45 64-Gal Container $33.49 $66.98 $100.46 $133.95 $167.44 $200.93 1-Yard Container $187.74 $374.22 $560.71 $747.19 $933.67 $1,120.15 2-Yard Container $314.10 $625.95 $937.81 $1,249.67 $1,561.52 $1,873.38 Proposed rates for Water and Wastewater services: Water and wastewater rates vary by size of water meter and type of wastewater effluent (i.e., rates are higher for restaurants and similar"high-strength"users).The complete schedule of rate inereases under consideration is shown in Tables 3 and 4. TABLE 3 - Proposed Rates for Water Services � . .-. 1 � 1 1 . 1 ' •�• '• � r 'r '► . I' . I' . 1' Fixed Service Charge-Based on Meter Size Monthly Fixed Service Charge-Standard Meters: *SFR 5/8 and 3/4 inch $24.92 $27.92 $29.73 $31.67 $33.73 3/4 inch $33.30 $39.41 $41.97 $44.70 $47.60 1 inch $50.08 $62.38 $66.44 $70.76 $75.36 1.5 inch $92.01 $119.82 $127.61 $135.91 $144.74 2 inch $142.32 $188.75 $201.02 $214.08 $228.� 3 inch $276.50 $372.55 $396.77 $422.56 $450.03 4 inch $427.45 $579.33 $616.99 $657.10 $699.81 6 inch $846.76 $1,153.72 $1,228.72 $1,308.58 $1,393.64 8 inch $1,349.93 $1,842.99 $1,962.79 $2,090.37 $2,226.24 10 inch N/A $4,829.82 $5,143.76 $S,478.10 $5,834.18 CommodityCharges forA/l WaterConsumed perCCF Uniform Rate $1.59 $1.88 $2.00 $2.13 $2.27 *Single Family Residents(SFRJ Meters are 12%Increase,Commodity Charge is 18%lncrease. Larger Meter Fixed Charges Percent lncreases Vary. CCF=Hundred Cubic Feet(748 gallons) TA - ro ose ates for astewater Serviees ... -. � . ., � ����' � � � � � • •�� •� � • 'i •i ll'. 11', � II'. � 11', Monthly Service Charges: Single Family Dwelling($/residence) $64.17 $67.38 $70.75 $73.58 $76.52 Multi Family Dwelling($/unit) $47.49 $49.86 $52.35 $54.44 $56.62 Standard Commercial billed monthly($/ccf) $6.59 $6.92 $7.27 $7.56 $7.86 Standard Commercial calculated annually($/#HE)2 $64.17 $67.38 $70.75 $73.58 $76.52 Commercial Food Preparation billed monthly($/ccf) $13.20 $13.86 $14.55 $15.13 $15.74 Commercia) Food Preparation calculated annually($/#HE) $128.36 $134.78 $141.52 $147.18 $153.07 HE=Household Equivalent Exhibit B Solid Waste Overview The City of Redding collects refuse and recycling, produces recycled product, transports to the landfill, and buries waste for over 30,000 residential and commercial customers. In terms of tonnage of material handled,the Solid Waste Utility handled the following volumes in Fiscal Year 2022-2023. Activit Wei ht 2022-2023 Waste collected 67,171 Self-haul waste 24,702 Household Hazardous 283 Rec clables 12,918 Green waste 17,125 Other waste-swee in 1,131 Total Tons 123,330 The City also operates the Richard W. Curry West Central Landfill (West Central Landfill) for Shasta County and buried a total of 164,053 tons of waste from both jurisdictions. To help meet diversion requirements, the City operates a Household Hazardous Waste Facility, compost operation, vehicle tire recycling, mixed recyclables collection operation, green-waste collection operation, recycling drop-off center, reuse facility, used motor oil and filter recycling program, and mattress recycling program;pulls recyclables off the floor of the Transfer Station; and operates an appliance program for residents. The Solid Waste Utility is experiencing increased operating costs associated with state regulations related to: (1) stormwater pollution prevention, (2) commercial and multi-family recycling, (3) air quality regulations related to diesel emissions, and (4) mandatory organics recycling and diversion. Existing Rates Because it serves a wide variety of customers,the Utility has 19 different service rates for different types and sizes of containers and the number of pickups per week. Built into these service rates are the costs of operation of the particular service and the shared cost of operation of other services, such as street sweeping,litter abatement and shopping cart removal, street maintenance(as a result of heavy truck use), storm drain waste disposal, and charges from other agencies or departments. These costs of operation vary by size of container, type of container, and frequency of collections (in terms of the volume of material handled, the residential and nonresidential sectors are about equal). To keep rates as low as possible and provide bene�cial programs, the e-waste diversion and household hazardous waste programs receive funds from a supplemental charge to users of the West Central Landfill. Also included within the Solid Waste Utility rate is a Benton Landfill monitoring charge. This is a state requirement mandating funds to monitor and maintain the closed and inactive City owned landfilL The monitoring surcharges that affect a11 custom�rs are not proposed to be changed. Proposed Rates The attached 10-Year Financial Plan (Figure SW-1) summarizes the current Solid Waste Utility budget and projeets what the expenditures and revenues will be over the next 10 years. The Plan also shows the recommended increases necessary for the next four years and possible increases for the remaining six years of the 10-year projection. The public hearing will only address the rates for the first four years of the 10-Year Financial Plan. The following table shows the existing rate and what is proposed for a typical single-family home: B B f '0 � � , ' � a � , ' , � ,r . .a ^ s r s � � o I�', a �t°. m RW°, 0 8t°, a !�`a Residentia)Wheeled Cart Monthly Rate 1 45-Gal Container $25.30 $25.90 $27.97 $30.21 $32.02 $33.30 64-Gal Container $26.45 $28.34 $30.61 $33.06 $35.04 $36.44 96-Ga)Container $28.30 $32.59 $35.20 $38.02 $40.30 $41.91 Additional Green Waste Container $4.00 $4.60 $4.97 $5.37 $5.69 $5.91 Landfill Monitoring ($0.22/month-no increases) q � 0 � { A Y8W B 0 Y 4 i 0' Commercial Bin 1.0 $92.20 $183:56 $274.91 $366.27 $457.63 $548.99 ` Adjustments forFoodwaste Collection Adjusted 1 CY Rates for Foodwaste Collection: $187.74 ' $374.22 $560.71 $747.19 $933.67 $1,120.15' %Increase over Non-Foodwasre 103.6% 103.9% 104.0% 104.0% 104.0% 104.0% Front Load Compactor 2A $208.17 $414r66 $621.15 $827.64 $1,034:13 $1,240.62 Adjustments for Foodwaste Collection Adjusted 2 CY Rates for Foodwaste Collection: $314.10 $625.95 $937.81 $1,249.67 I$1,561.52 $1,873.38 %fncrease over Non-Foodwaste :_�',,..�' ;;,,,.���,,,.�' � 50.9°0 � 51.0% 51.0% 51.0% 51.0% 52.0°0 ���. 'i�t. a �:�� e r a � e�m�a r �: a . e 6 < e.. . • o �. . a s a e . - . .� e a e�i� e����. e+e '• a Foodwaste 48-Gal.Cart $25.90 $29.91 r $59.82 $89:72 $119.63 , $149:54 $179.45 ', Foodwaste 65-GaL Cart $28.34 $33.49 $66.98 $100.46 $133.95 , $167.44 $200.93 Cost Increases and Programs Tipping-fee (landfill charge) increases, truck and equipment costs, fuel costs to operate vehicles and eguipment, planned transfer station facility expansion and maintenance projects, charge for street maintenance, customer service costs,labor and contract costs,health and maintenance costs, increased recycling programs and monitoring, and other charges have all increased for the Utility. The net effect is that the Utility increase rates over the next four years to cover projected cost increases, and prevent a rapid reduction of the reserve and its depletion. The proposed rates will allow the reserve to be maintained at a level that declines sharply in the beginning but then meets or exceeds 90 days cash on hand for the remainder of the Plan. The effects of Assembly Bill 1826 (a bill that is a mandate to divert organics), Assembly Bill 341 (a bi11 to increase diversion from 50 percent to 75 percent by increasing the focus on commercial and multi-family dwellings) and Senate Bi11 1383 (a bill to reduce disposal of organics in landfills including source separated food waste and inerease edible food recovery) have resulted in upward cost pressure. Additionally, a new commercial fee is propos�d in order to address the costs associated with fully implementing a new program that meets the regulatory reguirements of collecring source separated food waste and diverting it form landfills. The Utility expects to expand some current programs and investigate the addition of new programs during the next several years. However,the Utility wi11 need to increase public education, continue to improve route efficiency, add equipment and resources to meet mandatory diversion requirements, and monitor staffing levels in order to facilitate daily routes and collections. The Utility uses revenues from the sale of recyclables to offset a portion of the cost of collection and diversion of recyclables and organics from the landfill. The State has continued to increase emphasis on recycling and mandate the implementation of organics diversion programs as part of the plan to reduce greenhouse gas emissions. Attachments: Figure SW-1 Proposed Ten-Year Financial Plan with recommended rates Fi ure SW-1 �, � � � � � o 00000000 0 0;0 00;� � � M,�. O N ��.Qi iD��.OO N .�:00 O 1����.M f�,:.� � ��:.� O���. O ���.O a--I���.c-1 N O1 ����� n N�,.. lD M.:O tD c!'�:�tl lD lD..:tD N,; �n ;00 O.:O '..O o0�,.. �rl M C� i"�••. <I- 00', 00 1� lo 00�:1� �ti to��.O vl u'���M Ol� O Ol ��:O O'�. O '.O O�. 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N � > :::`.� cL'.� -a,. y �.. � a. - � � � � n- �., � _ o��. ac N �., ���.O � �: Q ���.O .,,,� � a+ .,:� � � — P' o+ o � �S'w � .- � � c°'., — � °' w c _ o � a m =';c�. '�... o=i .`E `-�6 � y��.'i' c�o�: s o ���� an 'S'.. a�i °' p..,. � `� � `n� � � �.�.. v ii, `° �: > N °� :� > o'. o�i G, a� "" o.,� c.: O y <n. � � � E . � � a.:� a+.' �, � y...� �:� To � � Q '. ''ti �; � Q ��' — ,,,a, � o'�� a.� o o��. a, `a : � ��, � � � o �`� � ��. °' �.,. � — �, V'c >': o o��.: a v� ac v ���. � t'--i x in��.v� v �..,vi $: :,; c �° '�•°f � �� "'a a�; o o c�. `o a��, F- �, � s �:� � � ,;<..�. � v�i i c� ¢�, v c� Z i t� cr�: � _�;O O ; ct t3.,� v Exhibit C Wastewater Utility Overview The Wastewater Utility funds and operates two regional wastewater treatment plants. It also manages over 442 miles of sewer collection line and 181ift stations serving approximately 39,380 connections. The utility's rates do not fund maintenance of lateral lines from the sewer line to a building. The wastewater treatment plants process the wastewater and discharge to the Sacramento River. Of the wastewater collected and treated by the utility, about 70 percent is from residential customers and 30 percent is from nonresidential or commercial customers. Peak hydraulic loads for the Wastewater Utility are just the opposite of those of the Water Utility due to the intrusion of storm water into the sewer system. The terms for this are inflow and infiltration (I&I) and there is an ongoing effort of the utility to reduce the flow d�ue to this. For illustrative purposes, in the summer,peak dry weather flows to the two treatment plants are about 10 million gallons per day (MGD) in a normal year. In the winter, peak wet weather flows can reach 50 MGD or a five-fold increase. In order to prevent overflows into the river,the utility must be able to process these flows. Like the other utilities, the Wastewater Utility has been affected by cost increases for continued environmental and regulatory mandates, materials and chemicals, fuel, salaries, health and retirement costs, and capital construction. These pressures are projected to continue into the foreseeable future. One of the key challenges for the wastewater system is I&I. As the physical integrity of a sewer system deteriorates over time, I&I increases. The resulting hydraulic loads reduce available capacity,increase treatment costs,and increase the likelihood of sanitary sewer overflows(SSO's). Some of the City's sewer lines are more than 100 years old. The Capital Improvement Plan for the next ten years includes a significant pipe replacement program,pipe and manhole rehabilitation projects, and storm drain improvements. Another significant challenge for the wastewater utility is the regulatory driven requirements dealing with the diversion of organics from landfill disposal. Currently, biosolids from both treatment plants are disposed of at the West Central Landfill. California Senate Bill 1383 has strict requirements regarding the disposal of organic material, which is requiring the Solid Waste utility to find a diversion program for food waste. These additions have driven the adoption of new technologies and other biosolid management practices. One such project is the new Pyrolysis process at the Clear Creek plant, which is currently under construction. Moving forward with the reception of food waste at the wastewater plant will require the expansion of the Pyrolysis system to accept additional biosolids loading. The Clear Creek Wastewater Treatment Plant was built in 1966 and expanded in 1979 to treat a peak wet weather flow of 16.2 MGD. In 2014, an$83 million rehabilitation and expansion project was completed that increased the peak wet weather capacity to 40 MGD. The Stillwater Wastewater Treatment Plant was put into operation in 1991 to treat a peak flow of 8.7 MGD. A $13 million rehabilitation and expansion project was also completed in 2014 that increased the peak wet weather capacity to 14.4 MGD. The majority of the funding for the plant rehabilitations and expansions was from low-interest loans from the State. Both projects were funded by a combination of connection fees paid by new development and monthly rates. The table below shows planned capital projects of more than $500,000 planned in the next five years for the Wastewater Utility along with the projected cost and the source of funding. "Rates" represent the portion of funding from monthly sewer rates. "Fees"are revenue from the connection fees paid by new development. Wastewater Utility Capital Improvements 2024-2030 Capital Projects Cost Funding Source Inflow and Infiltration Reduction $10,260,823 Rates 100% West Side Interceptor Phase III $10,000,000 Fees 100% 6-8" Line Repair/Replacement $24,250,881 Rates 100% Lift Station Improvements $1,812,000 Rates 100% Miscellaneous Treatment Plant Improvements $2,725,000 Rates 100% Magnolia Sewer Phase IT $�,000,000 Rates 100% Lake Redding Interceptor I $4,975,000 Rates 91% and Fees 9% Biosolids Pyrolysis $19,000,000 Rates 100% Mercury Drive Sewer $1,450,000 Rates 100% Clear Creek Wastewater Treatment Plant �4,079,146 Rates 100% Stillwater Wastewater Treatment Plant $2,719,524 Rates 100% Sludge Lagoons & Drying Beds $8,500,000 Rates 100% Buenaventura Sewer $5,200,000 Rates 91% and Fees 9% Sulph�ur Creek $2,931,430 Fees 100% Clear Creek Pond Upgrades $3,413,095 Rates 75% and Fees 25% Rates fund a significant portion of the costs associated with maintaining the sanitary sewer system. Whether or not the City will be able to accomplish all of these projects depends on the number of new connections, rates, and the actual construction costs. If an identified capital improvement cannot be funded, it will be deferred until funding is available and will then compete with other new needs. Pro�osed Rates Wastewater rates are predicated on the expense to maintain and expand the system needed to collect, transport, and treat wastewater. The flow produced by a typical single-family residence is expressed as a "household equivalent" (HE) and is the basis for rate charges. For example, a single-family household is expressed as one HE, and one HE is equivalent to 240 gallons per day of wastewater. An apartment is slightly less, and commercial, industrial, and public uses are calculated based on the number of household equivalents they generate each day. Industrial users have not only the volume of discharge calculated,but the strength of that discharge as well. Some commercial customers also have a rate that reflects the strength of discharge. The strength of the wastewater is measured as the amount of solids and organics in the wastewater. For example, typical food preparation facilities (restaurants) will discharge higher strength wastewater than a retail store. The following table shows the recommended rate increases for all customer classes: Com arison of Existin to Pro osed Rates 90p p '� d mumVui, Q I , i r. ,8 " �am �� � e °s - ^e ^ I/'. PI°. � /@'e � l�a, Monthly Service Charges: Single Family Dwelling($/residence) $64.17 $67.38 $70.75 $73.58 $76.52 Multi Family Dwelling($/unit) $47.49 $49.86 $52.35 $54.44 $56.62 Standard Commercial billed monthly($/ccf) $6.59 $6.92 $7.27 $7.56 $7.86 Standard Commercial calculated annually($/#HE) $64.17 $67.38 $70.75 $73.58 $76.52 Commercial Food Preparation billed monthly($/ccf) $13.20 $13.86 $14.55 $15.13 $15.74 Commercial Food Preparation calculated annually($/#HE} $128.36 $134.78 $141.52 $147.18 $153.07 HE=Household Equivalent The attached Ten-Year Financial Plan, Figure WW-1, summarizes the current Wastewater Utility budget and future expenditures and revenues with the recommended increases. The public hearing only addresses the rates for the first four years of the Ten-Year Financial Plan. It is the recommendation of the Wastewater Utility that the proposed rate increases are approved to fund the ongoing maintenance and upkeep of the sanitary sewer system for the benefit of citizens of the City of Redding. Attachments: Figure WW-1 Proposed Ten-Year Financial Plan with recommended rates Figure WW-1 + � a, � .�, � � �' , ti ae � �, tD� N ��. O �. 1� ��. i� G'� �.�1 �C ��. N N��� a.e')�� ���. O : 00 ��� ct N �. O � ul I�: N 1� - N Ci N M ; � O���: �.f')�..: O 00���.. �: l0 O : N M��. V 00 Ct... al�;: N ��. O N. N�. O �: �' r1 O��� O ��. !�. : i� I���. 1� N I`�.!F �D�: : �D N 3 00': M l0 6l i M Ol�:. l0 00��. Ql ��. <F ��: M �-1: 00 lA V • '... �+1���. . O 6l 6l.,. � C�.. �.fl�: �t' .; ;. lD N� M V : t' V�.: � ',: � �11:: � 1�... ' O �,. � O: Oi M M.. ,�: M . M��.. . a.e'f���. �f'f :-Vl- �N.�.; ��:l.? -l.n, Vl'.:(/1- �cn-�.:-tf)- .V'>,�.: ,:�- VT��: SlI- 4n� ' : �.n M�� O ��. � M . M aG�. rn �t � ...• � o ��. tD 1�.. M� Ql m �tl.' � 1� tff o� � 00 � ap�.. ��. 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N: = Q Exhibit D Water Utility Overview The City of Redding Water Utility provides water service to more than 88,000 people in what the United States Bureau of Reclamation (Reclamation) recognizes as the Redding Water Service Area. This approved service area includes nearly all of the incorporated area of the City of Redding and a small area of the County in northwest of Redding. Tt does not include portions of northeast Redding served by the Bella Vista Water District and the southwest served by Centerville Community Service District. The annual demand of nearly 25,000-acre feet of water is largely met from the 27,000 plus acre feet of historic and post Shasta Dam water contracts. This surface water comes from Whiskeytown:Reservoir via the Spring Creek conduit and the Sacramento:River via Pump Station No. 1 (PS-1) located along the south side of the Sacramento River TraiL In addition, the City utilizes and has the capacity to draw nearly 11,000 acre-feet of groundwater from 17 wells located in the Enterprise area and southwest portions of town. Water System Infrastructure The infrastructure required to meet the demands can be divided into two key areas including: Treatment - The City's water treatment infrastructure consists of the Foothill Water Treatment Plant, Buckeye Water Treatment Plant, 1'7 wells located in the Enterprise and Cascade areas and the supporting facilities. The Foothill Treatment Plant is the system's workhorse treating 40 percent of the City's water which is pumped from PS-1 located along the Sacramento :River. The Buckeye Treatment Plant,which is located west of Keswick Lake along the Spring Creek Conduit, meets approximately 30 percent of the water demand for the City. The 1'7 Enterprise and Cascade wells meet the remaining 30 percent of Redding's water demand. Distribution-Following treatment,the City's water is stored in 12 reservoirs throughout Redding and supplied to the utility's customers through over 560 miles of water main and 30,500 service connections. In addition, there are 11 booster pumps located throughout the city to maintain water pressure within the various pressure zones. The 2023 Water Master Plan presents a review of the City's water system and provides planning direction for the system through 2045, including water demand forecasts, required water supply, and recommended capital improvements to needed to maintain and grow the system. Water System Preservation Needs Much of the existing water system infrastructure is dated and in need of preservation efforts to continue meeting:Redding water demands. Key areas of need are summarized as follows: • Treatment - following are key water treatment preservation-related facility's needs: • Foothill Water Treatment Plant - The Foothill Treatment Plant was initially constructed in 1920, went through a significant upgrade in 1979 that added additional capacity, and has had several smaller upgrades since to meet growing population and regulatory standards. In 20ll, PACE Engineering prepared a Facilities Plan that provided a number of preservation related recommendations including a new control building and replacement of the supervisory control and data acquisition (SCADA) systems to better automate and ensure continued plant operation, electrical system upgrade, construction of a second clarifier to allow for adequate storage, replacement of the aging flocculator basins, and other various piping upgrades. The total cost of remaining preservation related improvements is estimated at $16 million by 2035. • Enterprise Wells - The Enterprise wells in particular have identified concerns with arsenic at two wells and iron/manganese at several other wells. It is recommended that wells with high arsenic levels remain offline as the resolution of the arsenic issues is substantial and water supply needs for the City can be met without these wells producing water. It is recommended, based on continued community interest in resolving the iron/manganese issue, that well head treatment at EW 12, the highest producing well, be implemented to blend and dilute constituent levels to below their respective MCLs. It is also noted that the utility has made relatively significant operational changes with very positive results that have minimized the concerns including implementation of a more aggressive water main flushing program as well as "pushing" treated water from the Buckeye Treatment plant to east Redding allowing reduced water use from iron/manganese problematic wells. • Pump Station No. 1-PS-1 was constructed in 1937 on the south side of the Sacramento River Trail just upstream of the Diestelhorst Bridge. The intake is influenced dramatically by river elevation levels dictated by downstream Anderson Cottonwood Irrigation District's diversion program. It has been a target of concern with the N�ational Oceanic and Atmosphere Administration (NOAA) Fisheries due to potential pump impacts on salmon migration in the Sacramento:River. Jacobs Engineering updated the feasibility study in 2022 and has begun the environmental clearance and engineering design process for a new pump station at a location upriver. Construction of a new pump station upstream is estimated at $40 million within the next 6 years. • Distribution - following are key preservation recommendations concerning water distribution related facilities: • Storage—Additional storage is necessary under existing conditions in the Hi11900 and Buckeye Pressure Zones to meet standard storage criteria for the combination of Equalization, Fire Service, and Emergency Storage. New 2.O.MG and 2.OMG storage facilities are recommended to address the current conditions and provide for ultimate build-out and replacement of aging facilities. Additional pump station upgrades to meet ultimate build-out demands in the Buckeye and Cascade Pressure Zones, and replacement of older reservoirs is also identified. • Pipe Replacement - As noted above, the City has over 560 miles of water main with much of it cast iron or steel,typically 50 to 80 years old. In addition,the city has grown to where demands are being met in some of the pipes by increasing velocities which shorten the life of the pipe. Water pipe failures have become relatively common as highlighted by several failures of water lines in the last ten years. It is recommended to expand the City's pipe replacement program to meet pipe age, material, and existing capacity issues at between $5 and $20 million per year over the next 10 years. Water System FutuNe GNowth Needs The City of Redding's water demands will continue to increase as the population in Redding grows. Growth rates, developed by Itron Inc. for the Redding Electric Utility,project growth rates at 0.'7 percent thru 2027. Other factors that may affect water demand include State water conservation mandates and California Green Building Code requirements. The master plan analysis reviewed projected needs in the Short Term (five-year outlook), a 10- and 20-year outlook, and Ultimate Build Out(50 to 70 years). Following are highlights of the projected water infrastructure projected needs: • Treatment - No additional growth-related capacity needs are identified in the City's treatment facilities over the next 10 years. It is expected that two additional wells will need to be added to the system, or two wells rehabilitated and reactivated, in the next 10 years to meet projected demands. • Distribution - Additional water main capacity will be needed to distribute water to areas of Redding where growth is being considered and capacity is not available or old, high velocity mains need replacement and larger pipes are recommended to meet additional demands. Additional water main capacity to meet east Redding demands for Buckeye water is currently under construction with a new 24"water main in Lake Boulevard. The table below shows planned capital projects of more than $1,000,000 for the Water Utility for the next five years, along with the projected cost and the source of funding. "Rates"represent the portion of funding from monthly water rates. "Fees" are revenue from the connection fees paid by new development: Water Utility Capital Improvement Projects 2024-2030 Capital Projects Cost Funding Source Water Main Replacement $36,000,000 Rates 100% Pump Station No. 1 Relocation $40,000,000 Rates 100% Foothill WTP Control :Building& SCADA $5,000,000 Rates 100% Buckeye Reservoir Booster Pump Station $1,500,000 Rates 100% Cypress Booster Pump Station $5,000,000 Rates 100% S. Bonnyview & Railroad Pump Station Upgrades $2,000,000 Rates 100% Ranchettes 12" Water Main $1,500,000 Rates 100% Buckeye Reservoir-New 2MG $5,000,000 Rates 100% Hi11900 Reservoir Rehab and New 2MG $6,000,000 Rates 100% New Enterprise Well $4,300,000 Rates 100% Rates fund a significant portion of the costs associated with maintaining the water system. Whether or not the City will be able to accomplish all of these projects depends on the number of new connections, rates, and the actual construction costs. If an identified capital improvement cannot be funded,it will be deferred until funding is available and will then compete with other new needs. Proposed Rates Water rates are predicated on the expense to maintain and expand the system needed to treat,pump, transport, and distribute water. The proposed water rate schedule includes a fixed meter cha�ge to cover the majority of the cost of delivering water to the customer,as well as a variable(commodity) cha�ge based on the actual amount of water consumed. Water consumption is measured in units of one hundred cubic feet (cc�, which is equal to 748 gallons. The following table shows the recommended rate increases for all customer classes: Com arison of Existin to Pro osed Rates , , , � p a-Q e p � � � Q • � � "A `� 'r@ ' I' B m p B f� �e I� .��b. ��b � � Vx...�� �� � 2:\� � � ��� Monthly Fixed Service Charge-Standard Meters: 5/8 inch $24.92 ; $27.91 $29J2 $31.66 $33J1 3/4 inch $33.30 $39.41 $41.97 $44.70 $47.61 1 inch $50.08 $62.42 ' $66.48 $70.80 $75.40 1.5 inch $92.01 ' $119.93 $127J3 $136.03 $144.87 2 inch $142.32 , $18$.95 $201.23 $214.31 $228.24 3 inch $276.50 , $372.99 $397.24 $423.06 $450.56 4inch $427.45 $580.C�4 $617J5 $657.90 $700.66 6 inch $846.76 ;$1,155.18 ' $1,230.27 $1,310.23 $1,395.40 8 inch $1,349.93 ;$1,845.35 ' $1,965.29 $2,093.04 $2,229.08 10 inch NJA $4,836.06 $5,150.41 $5,485.18 $5,841J2 , ��.��, � ��;" �����„�� . � � �` � . �', � � � � � Uniform Rate $1.59 $1.8$ $2.00 $2.13 $2.27 '*Single Family Residents(SFRJ 5/8"Meters are 12%tncrease,Commodity Charge is 18%Increase. targer Meter Fixed Charges Percent Increases Vary. A typical single-family residence, using 21 ccf per month, would be as follows: Schedule Existing 2024 2025 2026 2027 Fixed Meter Charge+ 21 ccf Commodity $58.31 $67.39 $71.72 $76.39 $81.38 Charge The attached Ten-Year Financial Plan, Figure W-1 summarizes the current Water Utility budget and future expenditures and revenues with the recommended increases. The public hearing only addresses the rates for the first four years of the Ten-Year Financial Plan. As discussed earlier in this report, the recommended rate increases affect both the service and the commodity charge. It is the recommendation of the Water Utility that the proposed rate increases are approved to fund the ongoing maintenance and upkeep of the water system for the benefit of citizens of the City of Redding. Attachments: Figure W-1 Proposed Ten-Year Financial Plan with recommended rates Figure W-1 O �.. �.n cv I� ��: � 00 <i' � �I' rn , i+'f ' .-� ��.� 00 �. N �+l � N af^i .� N O W . . tD �. 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