City of Culver City, California
Agenda Item Report
RECOMMENDATION:
That the City Council:
Adopt a Resolution approving the Engineer’s Report for the Sewer User’s Service
Charge for Fiscal Year 2013/2014; Declaring its Intention to levy and collect the Sewer
User’s Service Charges for Fiscal Years 2013/2014; and setting a public hearing for
July 22, 2013, at 7:00 p.m. in the Mike Balkman Council Chambers.
BACKGROUND:
Culver City owns and operates a separate sewage collection system, which is
connected to Los Angeles’ system. Culver City sewage, which is deposited into the
Los Angeles system, is treated at the City of Los Angeles' Hyperion Treatment Plant
prior to its ultimate disposal in the Pacific Ocean or additional treatment by West
Basin Municipal Water District for the production of recycled water that is used
throughout the region. An agreement between the City of Los Angeles and a number
of other cities called the Amalgamated Agreement (Agreement) requires Culver City
to pay a proportionate share of the costs of conveyance, operation, maintenance,
repair and capital improvements to upgrade and improve the Amalgamated
Sewerage system.
Federal law requires that all agencies using the City of Los Angeles' Hyperion
Treatment Plant adopt a system of charges to assure that each property served by a
public sewer pays its fair share of costs for the operation, maintenance, repair and
Meeting Date: 05/28/2013 Item Number: A-5
CITY COUNCIL AGENDA ITEM: Adoption of the Resolution (1) Approving the
Engineer’s Report that Includes Proposed Rated for Approval by the District
Members for Fiscal Year 2013/2014; 2014/2015; and 2015/2016; (2) Declaring the
Intention to Order the Sewer User’s Service Charge for Fiscal Year 2013/2014; and
(3) Setting the Date, Time, and Place for the Public Hearing to be Monday, July 22,
2013 at 7:00 PM in the City Council Chambers.
Contact Person/Dept.: Mate Gaspar/PW Phone Number: 310-253-5602
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Agenda and Meetings – City Council (05/21/13)
Department Approval:
Charles D. Herbertson (05/15/13)
City Attorney Approval:
Carol Schwab (by H. Baker) (05/21/13)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (05/21/13)
City Manager Approval:
John M. Nachbar (05/21/13) City of Culver City, California
Agenda Item Report
improvement of the Hyperion Treatment Plant. The “fair share” of each property is
based on its contribution to the system in terms of flow quantity and sewage strength
(biochemical oxygen demand and suspended solids). This is in addition to the cost
experienced by Culver City in the collection, operation, and improvement of our own
sewage collection and conveyance system.
In addition to formulating and adopting a system of Sewer User’s Service Charges
(SUSC), the City must also select a system for collecting these charges. In 1980,
based on an engineering study and the City Engineer’s recommendation, the City
Council initiated a once-a-year billing procedure for the SUSC that places each
property owner’s charges on their property tax bill. This method of collection has
proven to be very efficient and provides the lowest cost billing and collection service
for Culver City.
On May 7, 2012, the City Council awarded a contract to NBS Government Finance
Group dba NBS to conduct an in-depth review of the existing SUSC and determine if
they were fair and equitable to each customer class taking into consideration the cost
of City of Los Angeles’ services to convey and treat the wastewater and Culver City’s
costs for collection and conveyance of the sewage in its own system.
NBS determined the following findings:
1. The City’s current sewer rates need to be adjusted to collect more revenue from
single family customers and less from other customer classes, particularly
commercial/restaurant customers.
2. The City should collect approximately 60% of rate revenue from base charges
and 40% from its commodity charges based on the classification of current
expenses as either fixed or variable. Currently the City collects 90% of rate
revenue from commodity charges. Fixed costs (which are associated with Base
Charges) are personnel costs (including cost for maintenance of the City’s
sewage collection system), office expense and most of the administrative
charges, and consultant support costs. These costs do not vary directly with the
quantity of sewage produced. Variable costs (which are associated with
Commodity Charges) are what the City pays to the City of Los Angeles for
wastewater treatment-related costs, utilities at the pump stations, and 25% of
administrative charges and consultant support. These charges are more directly
tied to the quantity of sewage produced.
3. Existing landscape irrigation credits for residential customers are reasonable.
In addition, NBS prepared a 5-year financial plan/revenue requirements for the sewer
enterprise fund. These requirements are based on several factors such as NBS’
recommended targets for operating, capital and debt reserve balances and the City’s
projected capital improvement program.
City of Culver City, California
Agenda Item Report
Based on recommendation contained in NBS’ study and Engineer’s Report, on
August 13, 2012, the City Council approved rate adjustments for the following
customer classes at last year’s Public Hearing on August 13, 2012:
Code Customer Class
Proposed percentage reduction
102 Multi-Family
200 Commercial/Business:
300 Commercial/Restaurants:
400 Institutional:
600 Special Users
-1% reduction
-2% reduction
-13% reduction
-4% reduction
-8% reduction
The Study recommended an 11% rate increase for single family residences. However,
Staff could not recommend any rate increase since any proposed rate increase
requires a 45-day public notice under Proposition 218, and there was not enough
time to submit the sewer charges to the County Assessor’s office in August 2012.
Accordingly the single family rates remained unchanged last year.
DISCUSSION:
Pursuant to a Resolution adopted by the City Council on Monday, April 22, 2013, the
Public Works Director/City Engineer has prepared the Engineer’s Report for the
SUSC and filed said Report with the City Clerk. A copy of the Engineer’s Report is
attached to this report for consideration by the City Council.
Rate increases of 4% are proposed across all customer classes for Fiscal Year
2013/2014 and continuing through 2014/2015 and 2015/2016 with the exception of
only a 3% rate increase for single family residences in Fiscal Year 2015/2016. In
addition, Base Charges are proposed to be adjusted in Fiscal Year 2013/2014 to
achieve the recommended 60%/40% revenue split. This is explained in detail in the
Study and Engineer’s Report.
This evening, the City Council is asked to adopt a resolution (1) approving the
Engineer’s Report, (2) declaring the City Council’s intention to levy and collect
assessments for the upcoming fiscal year; and (3) setting the time and place for the
public hearing as required by Culver City Municipal Code (CCMC) Section
15.01.070.
City of Culver City, California
Agenda Item Report
Should the City Council adopt the proposed resolution, pursuant to Section
15.01.070(G) of the CCMC, the City Clerk shall give notice of the public hearing by
causing the Resolution of Intention to be published at least 45 days prior to the date
of the hearing.
Each property owner in the City will receive a notice of the proposed rate increases
as required by Proposition 218. Staff is proposing that the rate increases for the
next three fiscal years be considered at one time on July 22, 2013, to save money
on postage and handling. The public hearing is scheduled for July 22, 2013. The
proposed Proposition 218 notice as prepared by NBS is attached.
Should the rate increases be adopted for the next three fiscal years, the City Council
will still be asked to consider each levy annually (generally in May/June of each
year).
FISCAL ANALYSIS:
As detailed in the Engineer’s Report, the proposed charges for Fiscal Year
2013/2014 will address estimated costs for providing complete operation,
maintenance, and local capital improvements for the Culver City sewerage system
and for the estimated payments due to the City of Los Angeles for Culver City's share
of the Los Angeles Amalgamated System costs.
ATTACHMENTS:
1. Proposed Resolution
2. Engineer’s Report
3. NBS Sewer Rate Study
4. Proposition 218 notice
MOTION:
That the City Council:
Adopt a Resolution (1) approving the Engineer’s Report, (2) declaring the City
Council’s intention to levy and collect assessments for the Sewer User’s Service
Charge - Fiscal Year 2013/2014 , and (3) setting the time, date, and place for a
Public Hearing for July 22, 2013, at 7:00 p.m. in the Mike Balkman Council
Chambers.
MEETING DATE: 05/28/13
AGENDA ITEM: (1) Receipt and Filing a Presentation on the Engineer's
Report (2) Adoption of the Resolution Approving the
Engineer's Report, (3) Declaring the Intention to Order the
Sewer User's Service Charge and (4) Setting the Date,
Time, and Place for the Public Hearing to be Monday, July
22, 2013 at 7:00 PM in the City Council Chambers for Fiscal
Years 2013/2014, 2014/2015, and 2015/2016 charges
ATTACHMENTS
1 Resolution
2 Engineer's Report
3 June 26, 2012 Sewer Rate Study by NBS
4 Proposition 218 Public Hearing Notice
Pages
1 - 4
5-15
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41 - 42 RESOLUTION NO. 2013-R
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA, APPROVING THE
ASSESSMENT ENGINEER'S REPORT, DECLARING ITS
INTENTION TO ORDER THE ANNUAL LEVY AND
COLLECTION OF ASSESSMENTS FOR THE SEWER
USER'S SERVICE CHARGES AND SETTING A TIME AND
PLACE FOR A PUBLIC HEARING THEREON.
WHEREAS, pursuant to the provisions of Culver City Municipal Code
("CCMC") §5.02.035.A, the City Council previously established a system of sewer user's
service charges providing that each parcel of property shall pay its proportionate share of
the costs for operation, maintenance, repair and improvements of the City sewerage
system (the "Sewer Users Service Charges"); and
WHEREAS, the City Council desires to declare its intention to provide for the
levy and collection of annual assessments for Fiscal Year 2013-2014, to provide for the
costs and expenses necessary for the operation, maintenance, repair and improvements of
17 the City sewerage system; and
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WHEREAS, the Engineer's Report has been prepared and filed with the City
19 Clerk and submitted to the City Council in accordance with CCMC §5.02.035.B; and
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WHEREAS, the. City Council has carefully examined and reviewed the
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22 Engineer's Report as presented and is preliminary satisfied with the proposed report, each
23 and all of the budget items and documents as set forth therein and is satisfied that the levy
24 amounts, on a preliminary basis, have been allocated so that each parcel of property shall
25 pay its proportionate share of the costs for operation, maintenance, repair and
26 improvements of the City sewerage system as set forth in the Engineer's Report.
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16 NOW, THEREFORE, the City Council of the City of Culver City, DOES
HEREBY RESOLVE as follows:
3 t The Engineer's Report as presented, consisting of the following: a
4 description of the operation, maintenance, repair and improvements of the City sewerage
5 system, the estimated costs of operation, maintenance, repair and improvements, and the
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formulas used to determine the sewer user service charges for the parcels, is hereby
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8 approved on a preliminary basis and is on file in the Office of the City Clerk open for public
9 inspection.
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2. It is the intention of the City Council to levy and collect assessments
11 for the Sewer User's Service Charges to pay the annual costs and expenses for the costs
12 for operation, maintenance, repair and improvements of the City sewerage system for the
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fiscal year commencing July 1, 2013 and ending June 30, 2014. The operation,
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15 maintenance, repair and improvements are generally described as: 90 miles of sewer
16 pipelines, seven sewer pump stations, and sewage transmission and treatment costs
17 payable to the City of Los Angeles per the executed Amalgamated Agreement with City of
18 Los Angeles. Costs include all necessary service, operations, administration and
19 maintenance required to keep the City's sewerage system in a healthy, vigorous and
20 satisfactory condition.
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3_ The Engineer's Report, as preliminarily approved by the City Council,
23 is on fife with the City Clerk and open for public inspection_ Reference is made to the
24 Engineer's Report for a full detailed description of the operation, maintenance, repair and
25 improvements to be maintained, and the proposed assessments upon assessable lots and
26 parcels of land within the City.
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-2- 4. As recommended in the Sewer Rate Study: 1) the maximum
assessment for all customer classes for Fiscal Years 2013-2014 and 2014-2015 is
proposed to increase annually by four percent (4%) above that previously approved by the
property owners for the preceding fiscal year; and 2) for the 2015-2016 Fiscal Year, the
maximum assessment for all customer classes (except for single family residences) is
proposed to increase by four percent (4%) above that previously approved by the property
owners for the preceding fiscal year, and the maximum assessment for single family
residences is proposed to increase by three percent (3%) above that previously approved
• by the property owners for the preceding fiscal year (as "increased assessment" is defined
in California Government Code §54954.6).
5. Notice is hereby given that a public hearing is scheduled to be held at
the Mike Balkman Council Chambers, 9770 Culver Boulevard, Culver City, California, on
July 22, 2013 at 7:00pm or as soon thereafter as the matter may be heard. All interested
persons, prior to the conclusion of the hearing, shall be afforded the opportunity to hear
and be heard. The City Council shall consider all oral statements or written communication
made or filed by any interested person.
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-3- 12 ATTEST:
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MARTIN R. COLE, City Clerk
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6. The City Clerk is hereby directed to give notice of the public hearing by
2 causing the resolution of intention, or summary thereof, to be published at least 45 days
3 prior to the date set for public hearing, as provided in CCMC §5.02.040 and Proposition
4 218_
5
APPROVED AND ADOPTED this day of 2013_
JEFFREY COOPER, Mayor
City of Culver City, California
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-4- Main Office
32605 Temecula Parkway, Suite 100
Temecula, CA 92592
Toll free: 800.676.7516 Fax: 951296.1998
Regional Office
870 Market Street, Suite 1223
San Francisco, CA 94102
Toll free: 800.434.8349 Fax: 415.391.8439
City of Culver City
Sewer User's Service Charge
Fiscal Year 2013/14 Engineer's Report
Pursuant to Chapter 5.02 of the Code of the City of Culver City CITY OF CULVER CITY
SEWER USER'S SERVICE CHARGE
9770 Culver Blvd.
Culver City, CA. 90232
Phone - (310) 253-5700
CITY COUNCIL
Jeffery Cooper, Mayor
Meghan Sahli-Wells, Councilmember
Jim B. Clarke, Counciimember
Micheal 0' Leary, Councilmember
Andrew Weissman, Councilmember
CITY STAFF
John Nachbar, City Manager
Charles D. Herbertson, Public Works Director
Mate Gaspar, Engineering Services Manager
NBS
Pablo Perez, Client Services Director
Danielle Wood, Project Manager
Nick Dayhoff, Financial Analyst TABLE OF CONTENTS
1. INTRODUCTION 1-1
2. DISCUSSION 2-1
2.1 Recommendation 2-1
2.2 Landscaping 2-1
3. ANNUAL EXPENDITURES AND REVENUE 3-1
3.1 Expenditures 3-1
3.2 Revenues 3-1
3.3 Reserve Fund 3-1
4. SUMMARY OF CURRENT RATE STRUCTURE 4-1
5. CURRENT SUSC RATES - FY 2012/13 5-1
6. PROPOSED SUSC RATES - FY 2013/14 6-1
7. ESTIMATED REVENUE PER CUSTOMER CLASS 7-1
8. 600 CUSTOMER CLASS USER DESCRIPTIONS 8-1 1. INTRODUCTION
A major challenge confronting those responsible for wastewater infrastructure, transportation, treatment
and disposal is acquiring adequate funds to finance and operate facilities and capital equipment, along
with implementing appropriate pricing structures to ensure the self-sufficiency of the utility. The financing
vehicle that is used by the utility and the timing of the financing are crucial in ensuring that wastewater
customers are appropriately paying for facilities that they need, and not inappropriately financing facilities
for future customers. It is a major goal of an effective financial plan to 'match' the economic impact on
customers with the benefits received from the service.
Regulations governing Federal and State grant funds require the City of Los Angeles to maintain a Cost
Recover Program (Sewer User Charges System) which includes all operations and maintenance costs
directly or indirectly related to the treatment and collection of liquid waste discharge by residents and
businesses. As a result of the City of Culver City's (the "City") contractual relationship with the City of Los
Angeles for wastewater treatment at the Hyperion Treatment Facility, the City is also required to recover
from each wastewater user their proportionate share of the costs incurred for wastewater collection
capital improvements within the City, wastewater system operation and maintenance, City of Los Angeles
capital improvements for conveyance to Hyperion and operation and Maintenance at Hyperion.
Accordingly, the City has adopted a plan to collect wastewater user charges and implemented it for the
first time in Fiscal Year 1980-81.
The City recovers wastewater user charges on an annual basis. Since the plan's inception, the Los
Angeles County Auditor-Controller and the annual property tax bill have been utilized as the vehicle for
both billing and collection. This method has proven to be both functionally satisfactory and exceptionally
economical over the last thirty-two years.
In order to achieve a fair and equitable system of wastewater user charges, users are charged in a
manner consistent with their actual use of the system. This comprises not only the flow quantity, but also
the wastewater strength (quality) as characterized by BOD (biochemical oxygen demand) and SS
(suspended solids).
Pursuant to the City's Municipal Code, in Fiscal Year 2012/13 the City and NBS reviewed and approved
the Sewer User's Service Charges (SUSC) structures and billing formulas to ensure that the City utilizes
an effective pricing structure within the constraints of Proposition 218. Additionally, the City wanted to
ensure that its sewer pricing structure continues to achieve the goals and objectives of the community,
while maintaining a fair and equitable distribution of costs to all of its customers.
Sewer User's Service Charge Engineer's Report — City of Culver City
1-1
Prepared by NBS — Fiscal Year 2013/14 2. DISCUSSION
2.1 Recommendation
NBS recommends that the SUSC rates proposed in Section 6 of this report be implemented for Fiscal
Year 2013/14. Based on the current Reserve Fund balance and the anticipated revenues and
expenses, the existing rates will be adequate to maintain the solvency of the Fund.
2.2 Landscaping
City of Los Angeles data indicates that 58% of single-family water usage is returned to the sanitary
sewer collection system as effluent, compared to 85% for multi-family customers. In fight of the lack of
recent, actual flow-return data for these two customer classes, these assumptions are not
unreasonable; due to landscape irrigation, single-family customers typically return a lower percentage
of water consumption to the sewer system. As such, the water consumption for single-family and
multi-family customers will be multiplied by the following factors:
Factor
Customer Class
Sinale-Familv Residential
Multi-Family Residential
0.58
0.85
Credits for residential landscaping can be given in two ways. A resident can either 1) install a
separate water meter for landscaping, the usage on which will not be assessed the SUSC, or 2)
prove by submitting calculations and evidence that the percentage reduction in the table above is not
adequate.
Sewer User's Service Charge Engineer's Report — City of Culver City
2-1
Prepared by NBS — Fiscal Year 2013/14 3. ANNUAL EXPENDITURES AND REVENUE
3.1 Expenditures
The following table shows the estimated annual expenditures for Fiscal Year 2013/14:
:;*:: Amount
Budget Item
Operating Expenses
Debt Service
Rate-Funded Capital Expenses 1
TOTAL
$6,210,405
1,605,200
0
$7,815,605
3.2 Revenues
The following table shows the estimated annual revenues for Fiscal Year 2013/14:
Revenue Source
Amount
Sewer User's Service Charge
Industrial Waste Inspection Fees
Interest Earnings
TOTAL
$7,983,141
70,000
150,000
$8,2030 41
3.3 Reserve Fund
The total minimum reserve amount recommended is calculated as follows:
Minimum Reserve Fund = 25% of annual operations operation and maintenance
expenses, plus 3% of Net Assets 3, plus the debt service requirement which is equal to
the maximum annual debt service payment.
For Fiscal Year 2013/14, the minimum required reserve fund is estimated to be $4,477,801, and the
available cash balance is projected to be $10,187,340.
The City has budgeted $3.3 million in Capital Expenses for FY 2013/14; however, such expenses will be
funded by the use of reserve funds.
2
Estimates for the Commodity Charge are based on 2011 water consumption data.
3
Based on the 2011/12 CAFR, NBS has used a Net Asset Value of $44.0 million.
Sewer User's Service Charge Engineer's Report — City of Culver City
3-1
Prepared by NBS — Fiscal Year 2013/14 4. SUMMARY OF CURRENT RATE STRUCTURE
The purpose of the rate design analysis performed by NBS in FY 2012/13 was to determine how to
collect fixed costs (i.e., base charges) and variable costs (i.e. commodity charges) from each of the
customer classes. The primary factor in allocating rate revenue between these fixed and variable
charges is the nature of the costs being collected. That is, fixed costs should be collected from fixed
charges, and variable costs should be collected from variable charges.
Accurately allocating these fixed and variable charges improves the revenue stability of the sewer
utility's rates, because changes in variable usage, or water consumption patterns, will be accounted
for in the variable (commodity-related) charges. In other words, if overall water consumption dropped,
the revenue collected from commodity-related charges would change in proportion to the commodity-
related costs.
A basic evaluation of fixed and variable costs indicates that approximately 63% of the sewer utility
costs are fixed and 37% are variable. Therefore, base charges and commodity rates should collect
sewer rate revenue from fixed and variable charges in roughly these proportions. NBS' analysis
incorporates these types of changes for FY 2013-14, rounding these percentages to 60% and 40%
respectively.
Sewer User's Service Charge Engineer's Report — City of Culver City
4-1
Prepared by NBS — Fiscal Year 2013/14
II 5. CURRENT SUSC RATES FY 2012/13
The following table shows the current SUSC rates for Fiscal Year 2012/13:
Sewer Rates
Base Charges I Commodity
(,$/yr) Rate ($/hcf/yr)
Customer Class
101 Single-Family 1
102 Multi-Family 2
200 Commercial/Business 3
300 Commercial/Restaurants
400 Institutional 3
500 Schools/Public 3
601 Special 3
602 Special 3
603 Special 3
604 Special 3
605 Special 3
606 Special 3
607 Special 3
608 Special 3
609 Special 3
610 Special 3
612 Special 3
613 Special 3
614 Special 3
615 Special 3
$42.32
41.80
41.37
36.89
40.50
42.32
39.11
39.11
39.11
39.11
39.11
39.11
39.03
39.10
39.11
39.12
39.11
39.09
39.12
n •••
$3.85
3.80
3.76
6.65
3.59
3.26
3.79
4.94
4.94
3.47
2.97
4.94
3.55
4.55
3.56
0.71
0.36
0.36
3.02
Base charge is per parcel.
2 Base charge is per dwelling unit.
3 Base charge is per meter.
Sewer User's Service Charge Engineer's Report - City of Culver City
Prepared by NBS - Fiscal Year 2013/14
la Customer Class
Base Charges Commodity
($/yr) Rate ($/hcf/yr)
6. PROPOSED SUSC RATES FY 2013/14
The following table shows the proposed SUSC rates for Fiscal Year 2013/14:
101 Single-Family 1
102 Multi-Family 2
200 Commercial/Business 3
300 Commercial/Restaurants 3
400 Institutional 3
500 Schools/Public 3
601 Special 3
602 Special 3
603 Special 3
604 Special 3
605 Special 3
606 Special 3
608 Special 3
610 Special 3
612 Special 3
613 Special 3
614 Special 3
615 Special 3 4
$254.24
202.97
254.24
254.24
254.24
254.24
254.24
254.24
254.24
254.24
254.24
254.24
254.24
254.24
128.07
254.24
254.24
254.24
$1.17
1.17
3.30
6.54
3.48
2.67
3.86
5.11
5.12
3.58
3.04
5.13
3.98
0.55
0.00
0.24
2.88
3.94
Base charge is per parcel.
4 Base charge is per dwelling unit.
3
Base charge is per meter.
4 Class 615 was added for FY 2013/14 as directed by City staff, assuming this rate consists of 20% of Class 300
and 80% of Class 200
Sewer User's Service Charge Engineer's Report - City of Culver City
6-1
Prepared by NBS - Fiscal Year 2013/14
13 From Base
Cha rges
From
Commodity
Rates 1
Total
Annual I
Revenue
7. ESTIMATED REVENUE PER CUSTOMER CLASS
The following table shows the estimated SUSC revenue per customer class based on the proposed
SUSC rates for Fiscal Year 201 3/14:
Total Annual Rate Revenue
Customer Class
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
601 Special
602 Special
603 Special
604 Special
605 Special
606 Special
608 Special
610 Special
612 Special
613 Special
614 Special
615 Special
Total
$1,437,981
2,233,076
262,851
42,712
19,576
5,841
763
508
254
508
1,271
254
254
254
768
254
508
254
$4,007,887
$473,115
752,769
1,288,641
716,287
226,475
75,155
96,257
59,010
57,917
44,961
72,291
104,780
1,345
974
0
381
3,781
1,115.02
$1,911,096
2,985,845
1,551,492
758,999
246,051
80,996
97,020
59,518
58,171
45,469
73,562
105,034
1,599
1,228
768
635
4,289
1,369
$7,983,141
Estimates for the Commodity Charge are based on 2011 water consumption data
Sewer User's Service Charge Engineers Report - City of Culver City
Prepared by NBS - Fiscal Year 2013/14
7-1
11 8. 600 CUSTOMER CLASS USER DESCRIPTIONS
The following table shows the user descriptions for the Special ''600"Customer Classes:
Use Description Use Code
601
Mall
602
6333 Bristol Parkway
603
5992 Green Valley Circle —4 Points Sheraton
604
Brotman Medical Center
605
Sony Studios
606
6161 Centinela — Double Tree
608
Jackson Market
610
4545 Sepulveda - #1818847 — 20% of User Code 200 Rates
612
Nurseries
613
10121 Jefferson - #4904654 — 10% of User Code 200 Rates
614
10555 Jefferson — 85% of Use Code 200 Rates
615
10824 Venice Blvd — 20% of User Code 300 Rates + 80% of User Code 200 Rates
Sewer User's Service Charge Engineer's Report — City of Culver City
8-1
Prepared by NBS — Fiscal Year 2013/14
/Si° 870 Market Street, Suite 1223
San Francisco, CA 94102
Toll free: 800.434.8349
nbsg ov.com
TRANSMITTAL
TO:
MATE GASPAR, ENGINEERING SERVICE MANAGER
CULVER CITY
FROM: KIM BOEHLER, CONSULTANT
GREG CLUMPNER, DIRECTOR
NBS
NBS
SUBJECT: SEWER RATE STUDY FINDINGS, RECOMMENDATIONS AND
PROPOSED RATES
DATE: JUNE 26, 2012
PURPOSE
The purpose of this transmittal is to summarize the findings of the Sewer Rate Study that NBS performed
for Culver City's Sewer Utility (City or Utility). NBS' findings focus on equitably allocating Utility costs to
each customer class and adjusting base charges and commodity rates in a manner that meets
Proposition 218 requirements and is fiscally sustainable. Projected revenue requirements and rate
adjustments cover the next four years (2012-13 through 2015-16). Recommended rate adjustments for
2012-13 retain the City's current rate design, while rates after 2012-13 incorporate cost-of-service
adjustments, including collecting 60% of rate revenue from base charges and 40% from commodity
charges. These changes are explained in more detail below.
Two appendices are included in this transmittal:
• Appendix A: Selected Tables for the Financial Plan and Revenue Requirement Analysis
• Appendix B: Selected Tables for the Cost-of-Service and Rate Design Analysis
OVERVIEW
A comprehensive sewer rate study typically includes the three key components shown in Exhibit 1, which
are based on industry standards such as the American Water Works Association (AVVWA) and Water
Environment Federation (WEF) cost of service methodologies. The cost-of-service component in
particular addresses the general requirements of equity and fairness embodied in Proposition 218. In
terms of the chronology, these three steps represent the order they were performed in this study.
Sewer Rate Study — City of Culver City
Page 1
Prepared by NBS — June 26, 2012 1. Financial
Plan/Revenue
Requirements
Exhibit 1. Primary Components of a Rate Study
Step 1: Financial Plan/
Revenue Requirements -
Compares current sources
of funds (revenues) to uses
of funds (expenses) and
determines the revenue
needed from rates.
2. Cost-of-
Service
Analysis
Step 2: Cost-of-Service
Analysis - Allocates the
revenue requirements to
the various customer
classes in a 'fair and
equitable" manner that
complies with Prop 218.
3. Rate Design
Step 3: Rate Design -
Considers what rate
structure alternatives will
best meet the City's need
to collect the annual
revenue requirements from
each customer class.
As a result of this rate study, changes in the total amount of rate revenue collected from each customer
class, as well as changes to base charges and commodity rates, are recommended. The following are the
key findings, followed by a summary of each of the three parts of this rate analysis.
KEY RATE STUDY FINDINGS
The following are NBS' key findings based on our analysis of the City's sewer revenue requirements, cost
of service, and rate design issues. More details are provided in the following sections.
• Revenue Requirements by Customer Class — Based on the results of the cost-of-service
analysis, the City's current sewer rates need to be adjusted to collect more revenue from single-
family residential customers and less from other customer classes, particularly commercial/
restaurant customers. However, this additional revenue that should be collected from the single-
family residential customers will be "phased-in" over a period of three years.
Changes in Rate Design — The City currently collects approximately 90% of its rate revenue
from commodity (consumption-based) charges and only 10% from base charges. Based on a
classification of current expenses as either fixed or variable, the City should collect closer to 60%
of rate revenue from base charges and 40% from its commodity charges.
• Landscape/Irrigation Factors for Residential Customers — The City's most current water
consumption data (for 2010) indicates that total water consumption per dwelling unit is
approximately 10 hcf/month for single-family customers compared to 5.6 hcf/month for multi-
family customers. City of Los Angeles data l indicates that 58% of single-family water usage 'is
returned to the sanitary sewer collection system as effluent, compared to 85% for multi-family
customers. In light of the lack of recent, actual flow-return data for these two customer classes,
these assumptions are not unreasonable; due to landscape irrigation, single-family customers
typically return a lower percentage of water consumption to the sewer system.
From the City's 2003 -04 Engineer's report, Table 2 - Summary of Users.
Sewer Rate Study — City of Culver City
Page 2
Prepared by NBS — June 26, 2012
/7 Projected
FY 2012113
FY 2013/14
FY 2014/15 FY 2015/16 FY 2016117
0.00%
12.49%
FINANCIAL PLAN AND REVENUE REQUIREMENTS ANALYSIS
Projected Revenue Requirements and Rate Increases NBS prepared a detailed five-year financial
plan. The results of this plan indicate that the Utility is able to meet all obligations in Fiscal Year 2012/13
without rate increases, but will need a four percent rate increase in each of the next three years (2013/14
through 2015/16).
Exhibit 2. Summary of Five-Year Revenue Requirements and Rate Increases
Summary of Sources and Uses of Funds and
Net Revenue Requirements
Sources of Sewer Funds
Rate Revenue Under PreNailing Rates
Industrial Waste Inspection Fees
Interest Earnings
Total Sources of Funds
Uses of Sewer Funds
Operating Expenses
Debt Service -
Rate-Funded Capital Expenses
Total Use of Funds
$ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661
70,000 70,000 70,000 70,000 70,000
202,000 150,000 150,000 150,000 150,000
$ 7,612,661 $ 7,560,661 I $ 7,560,661 1$ 7,560,661 $ 7,560,661
$ 5,858,475 $ 6,210,405 $ 6,096,069 $ 6,332,396 $ 6,509,572
1,606,800 1,605,200 1,603,000 1,608,300 1,605,650
482.386
$ 7,465,275 $ 7,815,605 $ 7,699,069 $ 8,423,082 $ 8,115,222
:1.4P.eff,qi.Vcr0040(9, -AVA. :Ipcf.e.0 se
147:386;
Additional Revenue from Rate Increases
293,626
598,998 916,584 I 916,584
AiiiiiI0M0000Miii*N10 ... '4:10*
Projected Annual Rate Increase
Rum atab ve Hate Increases
lIATAIKO
0.00%
0.00%
1:1-014,
A§O.glit 4 ,1 :kW
4.00% 4.00% 4.00%
4.00% a 16% 14.9%
-Net Revenue Requini
. - „$ 7AS-3-41.0 $ 4,-AOTA0015t1000.069-4 -: 4-400. -R8?-1
/. Total Use of Funds less industrial Water inspection Fees and Interest Earnings. This is the annual amount needed from seiner rates. However,
the proposed rates in this rate study have been set to recover the revenue currently collected from customers (i.e., $7,544,660 less
$204,000 for the reduction in estimated revenue for FY 2012-13, per the Cost of Service Analysis results.
Capital Improvement Projects and Costs — The Utility has an adopted Capital Improvement Program
(CIP) that has identified capital projects totaling $13.8 million, which are planned in 2012/13 through
2015/16. These projects will be funded from a combination of cash reserves set aside for rehabilitation
and replacement, and rate revenue.
Exhibit 3. Adopted Capital Improvement Program
Fiscal Years 2012/13 through 2015/16
Project Description FY 2012/13 FY 2013/14 FY 2014/15 •FY 2015/16
Sewer Main Rehabilitation Project
Sewer Main Point Repair, Manhole Rehabilitation, and Sewer Video
Sewer Pump Stations Improvement P-521
Jasmine Second Force Main Project
Overland pipeline diversion (Construction)
Hayden second force main Project
2nd force main Braddock connection to Los Angeles
New Pump Station Selmaraine
New pipelines to dhert Mesmer
New siphon at sewer convergences at Culver/Madison
Upsize Duquesne Sewer Pipe to 21 inch from Lucerne to Jefferson
Financial System Replacement/Enhancements
$ 3,000,000
-
$ 100,000
100,000 $ 100,000 $ 100,000
$ 100,090
200,000 $ 100,000 $ 100,000
$ 100,000
-
-
$ 500,000
$
$
$ 100,000
$ 160,000
3,000,000 $
-
$ 3,000,000 $ 3,000,000
-
$
26,472
.3;200*
Sewer Rate Study — City of Culver City
Page 3
Prepared by NBS — June 26, 2012
16 -Recommended
Target Reserve
Balance
3-
Cash Management and Target Reserve Fund Balances — The Utility will begin Fiscal Year 2012/13
with a total cash balance of $17.2 million. Exhibits 4 and 5 summarize the cash balances by reserve fund
and show the recommended target reserves. Due to the costs of the planned capital improvement
projects, the Utility will need to draw down the Capital Rehab & Replacement Reserve over the next five
years.
Exhibit 4. Ending Cash Balance Compared to Recommended Reserve Target
Beginning Reserve Fund Balances and
Recommended Reserve Targets
Operating Reserve
Budge t
FY 2012/13 FY 2013/14
Projected
FY2014115 FY 2015/16 FY 2016/17
Beginning Balance $ 1,479,650 $ 1,465,000 $ 1,503,683 $ 1,524,000 $ 1,578,163
Recommended Minimum Target 1,465,000 1,563,000 1,524,000 1,553,000 1,627,000
Capital Rehab & Replacement Reserve
Beginning Balance $ 14,101,776 $ 10,187,340 $ 6,887,340 $ 4,127,614 $ 1,410,000
Recommended Minimum Target 1,250,000 1,310,000 1,360,000 1,410,000 1,370,000
Debt Reserve
Beginning Balance $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838
Recommended Minimum Target 1,603838 1,608,838 1,608.838 1. 606. 838 , 1,. 608.838
letaLBe,glinningBalance $ ---11,1440.;264 $l&2&IiTL =$- 9,520.41 . - 4-.4144.4V-- E4:49T.044.-
Totatiik- orrunAWif unimum 7 -, fge t $ 432$$38 $ ;=4 - - **,001,0U 4-
Exhibit 5. Ending Cash Balance Compared to Recommended Reserve Target
514000,000
NES' recommended targets for year reserve balances are as follows:
• Operating Reserve - 25% or 90 days of operating and maintenance expenses.
• Capital Rehabilitation and Replacement Reserve - 3% of system net assets 2.
• Debt Reserve - the maximum annual debt service payment, as specified by the bond covenants.
2
Based on the 2010111 CAFR, plus capital asset additions and annual depreciation adjustments, NBS has used a
Net Asset Value of $41.6 million.
Sewer Rate Study — City of Culver City
Page 4
Prepared by NBS — June 26, 2012 Cost of Service Allocated Costs -20.12
Net Revenue Requirement by Class
(CA)
22%
(BOD)
Percent
thine ence
26.4%
38.2%
19.1%
8.4%
2.3%
0.1%
5.5%
$992013
$1,522,095
$868,087
$225,777
$113,140
$7,444
$258,430
$1,992,310
$2,879,417
$1,440,000
$632,840
$171,751
$10,814
$418,020
$239,608
$379,107
$221,195
$202,890
$16,011
$1,053
$71,316
$246,676
$399290
$227,720
$188,523
$37,194
$1,273
$84,956
$1,788,571
$2,915,211
$1,472,993
$725,973
$174,491
$10,594
$452,318
:13tifttn:
COST-OF-SERVICE ANALYSIS
The purpose of the cost-of-service analysis is to equitably allocate the sewer utility costs, or the net
revenue required from sewer rates, to each customer class. This process includes two primary steps:
1. Classifying various expenditures to one of four types of costs:
a. Volumetric-related costs
b. Strength-related costs, including:
• Biochemical Oxygen Demand, or BOD
• Total Suspended Solids, or TSS
c. Customer-related costs
2. Allocating costs to customer classes based on specific allocation factors for each of the
four cost types:
a. Volumetric-related costs are allocated using the percentage of total effluent (or water
consumption as adjusted for landscaping uses) from each customer class.
b. BOD-related costs are allocated based on estimated total pounds of BOD generated per
year by each customer class, and reflects the assumed concentrations of BOD for
residential, restaurants, commercial offices, etc.
c. TSS-related costs are allocated based on estimated total pounds of TSS generated per
year by each customer class, which reflects the concentrations of TSS for residential,
restaurants, commercial offices, etc.
d. Customer-related costs are allocated based on the number of accounts in each customer
class.
This analysis produced the results shown in Exhibit 6 below, along with a summary of the sewer rate
revenue currently collected from each customer class compared to the revenue requirements based on
the cost-of-service. As shown in this table, an additional 11% of the revenue should come from single-
family customers, while the restaurants and hotels should have reductions in rate revenue of 13% and
8%, respectively.
Exhibit 6. Revenue Requirements by Customer Class from COS Analysis
Cost-of-Service: Summary of Allocation of Revenue Requirements
El=11
101 Single-Family
102 Multi-Family
200 CommerciaLBusiness
300 Comm erciaRestaurants
400 institutional
500 Schools/Public
600 Corn mercial/Hotels
We note that Exhibit 6 indicates that net revenue requirements of $7,545,151 should be recovered
through sewer rates. This total reflects the City's current level of rate revenue, per the 2012/13 budget,
and therefore represents a "revenue neutral" level of rate revenue. However, as directed by City staff,
proposed rates will include the reductions indicated in Exhibit 6, but none of the increases. As a result,
total annual rate revenue is estimated to be approximately $7.34 million.
Sewer Rate Study - City of Culver City
Page 5
Prepared by NBS - June 26, 2012
ao RATE DESIGN AND PROPOSED RATES
The purpose of the rate design analysis is to determine how to collect fixed costs (i.e., base charges) and
variable costs (i.e. commodity charges) from each of the customer classes. The primary factor in
allocating rate revenue between these fixed and variable charges is the nature of the costs being
collected. That is, fixed costs should be collected from fixed charges, and variable costs should be
collected from variable charges.
Accurately allocating these fixed and variable charges improves the revenue stability of the sewer utility's
rates, because changes in variable usage, or water consumption patterns, will be accounted for in the
variable (commodity-related) charges. in other words, if overall water consumption dropped, the revenue
collected from commodity-related charges would change in proportion to the commodity-related costs.
A basic evaluation of fixed and variable costs indicates that approximately 63% of the sewer utility costs
are fixed and 37% are variable. Therefore, base charges and commodity rates should collect sewer rate
revenue from fixed and variable charges in roughly these proportions. NBS' analysis incorporates these
types of changes after 2012-13, rounding these percentages to 60% and 40% respectively.
The following table summarizes the 2011-12 rates and rate revenue along with the adjustments to 2012-
13 sewer rates (note: this table reflects revenue requirements by customer class, but has made only the
reductions previously shown in Exhibit 6).
Sewer Rate Study — City of Culver City
Page 6
Prepared by NBS —June 26, 2012 Exhibit 7. Existing and Proposed Sewer Rates and Rate Revenue Reflecting COS and Rate Design Adjustments
Fiscal Year 2011-12 Sewer Rates and Rate Revenue and New 2012-13 Sewer Rates Incorporating COS Revenue Requirements
Customer Class
_ 101 Single-Family
P .
Mu1I-Ferny_
200 Commercial/Business
2011-12 Sewer Rates 2011-12 Annual Rate Revenue 2012-13 Adjusted Sewer Rates 2012-13 Annual Rate Revenue
Base Charges
($/yr)
$42.32
Commodity Rate
($/hcf)
$3.85
$3.85
$3.85
Base Charges
(Styr)
_ $242,748
Commodity Rate
($/hcf)
$1,545,823
Total Annual
Revenue
$1,788,571
$2,915,211
!Base Charg s
(Sir)
$42.32
$41,80
$41.37
COM modity Rate
(MO)
Base Charges Commodity Rate
($/yr) ($/hcf)
Total Annuat
Revenue
$3.85
$3.80
$242,748 $1,545,823 , , $1,788,571
$2,879,417
. $1,440,000
$632,840
$171,751
$42.32
$42.32
$469,413
$45,960
$2,445,798
$1,427,033
$718,990
$177,079
$463,650 $2,415,767
$1,472,993 $3.76
$6.65
$44,930 $1,395,070
$6,087 $626,753
300 Com merc!al/Restaurants
400 Institutional
$42.32
$42.32
$7.63
$3.75
$6,983
$2,412
$725,973
$179,491
$36.89
$40.50 $3.59 $2,308 $169,443
500 Schools/Public
_-
$42.32
$42.32
$3.26 $486 $10,129 $10,594
$67,564
$70,758
$42.32
$39.11
$39.11
$3.26
$3.79
$466 $10,129 $10,594
$62,441 ... _
601 Special $4.10 $254 $67,310
$235 $62 , 206
602 Special $42.32 $5.35 $65 $70,674 $4.94 $78 $65,315 $65,393
603 Special
604 Special
$42.32
$42.32
$5.35
$3.75
$42 $65,382
$75,685
$65,425
$75,970
$39.11
$39.11
$4.94 $39 $60,425 $60,464
$85 $3.47
$2.97
$4.94
$3.55
$4.55
$3.56
$78 $70,131
8196 868,475
$39 $82,081
$39 $174
$70,209
8613,871 .
605 Special $42,32 $3.21 $212 $74,093 674,305 639.11
606 Special
_. 6137SP.2., - . - -
_ 608_Special
609 Speclal
$42.32 $5.35 $42
$42
$88,815 $88,858 $39.11
_$82,120
$42.32
$42.32
$42.32
$3.85 $189
$1,385
$231
$1,428
82,614
$39.03 $213
$1,319
$2,416 _.
$4.93
$3.85
$42 $39,10
539.11
$39 $1,280
$254 $2,360 6235 $2,181
610 Special _. _
612 Speolai
613 Special
$4232
$42.32
$42.32
$0.77
$0.39
$0.39
$42 $885 $927 $39.12 $0.71 $39 $818 $857
$862
$605
$296 $636 $933 $39,11
$39.09
$0.36 $274 $568
$42 $613 $665 $0.36 $39 $566
614 S4eciai
' Total -
$42.32 $3.27 $42
$789A82
$2,609
.
$6,770.669
$2,652
87,545,151
$39.12 $3.02
$39 $2,412
_
$781 557 $6,5 0037
- „.
$2,451
,
$7,341;10-'
0050 IsiA'41( 7etei ' 10W ,-,
90% 100% 10% .9091 .
Sewer Rate Study - City of Culver City
Prepared by NBS -June 26, 2012
Page 7 Exhibit 8 summarizes the proposed sewer rates for 2013-14 through 2015-16 that incorporate the cost-of-
service based changes necessary to accomplish the following objectives:
• Phase-in cost-of-service based rate increases to two customer classes (single-family and
Schools/Public accounts) over a three-year period.
• Increase all rates by 4% annually for 2013-14 through 2015-16, as indicated by the financial plan
previously shown in Exhibit 2.
• Adjust sewer rates so they collect 60% of the revenue required from base charges and 40% from
commodity rates.
Exhibit 8. Proposed Sewer Rates for 2013-14 through 2015-16
Summary of Proposed 2013-14 Through 2016-16 Sewer Rates Incorporating COS Revenue Requirements
Including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates 1
Customer Class
101 Single-Family
2013-14 2014-15 2015-16
Base
Charges ($/'.r)
$254.24 i
Commodity
Rates (Skid)
$1.17
Base
Charges ($/j/r)
$264.32
Commodity
Rates ($/hcf)
$1.21
Base
Charges ($/yr)
$274.80
Commodity
Rates (Me)
$1.25
102 Multi-Family2 $202.97I $1.17 : $21t48 $1.21 $22042 $1.25
200 Commercial/Business $254.24 $3.30 $264,32 $3.43 $274.80 $3.56
300 Commercial/Restaurants $254.24 $6.54 $264.32 $6.80 $274.80 $7.07
400 Institutional $254.24 I $3.48 $264.32 $3.61 $274.80 $3.76
500 Schools/Public $254.24 $2.67 $264.32 $2.78 $274.80 $2.89
601 Special $254,24 $3.86 $264.32 $4.02 $274.80 $4.18
602 Special $254.24 $5.11 $264.32 $5,31 $274.80 $5.53
603 S ecia I $254.24 $5.12 $264.32 $533 $274.80 $5.54
604 S ecia I $254.24 $3.58 $264.32 $3.73 $274.80 $3.88
605 Special $254.24 $3.04 $264.32 $3.16 $274.80 $3.29
606 Special . $254,24 $5.13 $26432 $5.33 $274.80 $5.55
607_Special $222.00 $0.00 $230.00 $0.00 $240.00 $0,00
608 Special $254.24 $3.98 5264.32 $4.14 $274.80 $430
609 Special $254.24 $1.61 $264.32 $1.68 $274.80 - $1.74
610 S ecial $254.24 $0.55 $0.58 $274.80 $0.60
612 Special $128.07 J $0.00 $133.19 $0.00 $138.52 $0.00
613 Special $254.24 J $0.24 $26432
_j
$0.25
$2.99
$274.80 $0.26
614 S ecial $264.24 , $2.88 $264.32 $274.80 $3.11
1. The base charges reflect residential classes and collect 60% of all sewer rate revenues; commodity charges collect 40%.
The overall sewer rate revenue collected from each customer class matches the cost-of-service revenue requirements.
2. Multi-Family base charges are SO% of Single-Family base charges based on the differences in per unit wafer
consumption. Muff-Family commodity rates are also adjusted to meet the revenue requirements for this class.
Sewer Rate Study - City of Culver City
Page 8
Prepared by NBS - June 26, 2012
23 CONSULTANT RECOMMENDATIONS
Based on the results of this study, NBS recommends the City consider the following actions:
• Adopt this rate analysis as the basis for adjustments to the City's current sewer rates.
• Adopt a five-year financial plan, as summarized in Exhibits 2 through 4, as the "road map" for the
Utility's financial management and cash management of reserves through 2016/17.
• Adopt the minimum target reserve fund balances as shown in Exhibit 4 and accumulate cash
funds in excess of these targets into the Capital Rehab and Replacement Reserve with the intent
of cash-funding planned capital improvements.
• Adopt and implement the proposed sewer rates shown above in Exhibits 7 and 8. This should not
require a Prop 218 protest balloting process for the 2012-13 rates, but will necessitate a Prop 218
process each year thereafter in order to adopt and implement the recommended rates.
PRINCIPAL ASSUMPTIONS AND CONSIDERATIONS
In preparing this transmittal and the opinions and recommendations included herein, NBS has relied on a
number of assumptions and considerations with regard to financial matters, conditions, and events that
may occur in the future. The information and assumptions, including the Utility's budgets and information
from Utility staff, were provided by sources we believe to be reliable.
While we believe the use of such information and assumptions is reasonable for the purpose of this
transmittal, some assumptions will invariably not materialize as stated herein and may vary significantly
due to unanticipated events and circumstances. Therefore, the actual results can be expected to vary
from those projected to the extent that actual future conditions differ from those assumed by us or
provided to us by others. Given that, the Utility should closely monitor future revenues, costs and capital
plans to determine any significant variances from the results shown in this report and take appropriate
management and City Council action to reconcile differences as needed.
Sewer Rate Study — City of Culver City
Page 9
Prepared by NBS — June 26, 2012 SEWER RATE STUDY - APPENDIX A
SELECTED TABLES FROM THE FINANCIAL PLAN
AND REVENUE REQUIREMENTS ANALYSIS $ 1,606,800 I $ 1,605,200 $ 1,603,000 $ 1,608,300 $ 1,605,650 $ 1,606,213 I $ 1,607,213 $ 1,604,088 $ 1,603,838 $ 1,605,338
$ 7,340,661 $ 7,340,661 3 7,340,661
293.626
8 7,340,661 $ 7,634,287 7340661
4,00. 74•
6.16%
0,004
0.00%
.4(110%
4.00%
Impacts of Rate Increases
Rate Revenues After Rate Increase 2
Net Cash Flow After Rate Increase
Coverage After Rate Increase
$ 7,340,661
147,386
1.09
$ 8,325,831
362,023
1.23
$ 8,325,831
54,163
1.33
$ 7,702,828
38,683
1.02
$ 8,008,222
460,590
1.29
$ 8,922,061
(19,646)
0.99
$ 8,747,118
15,345
1.01
A-1 Appendix A
Sewer Rate Study - City of Culver City
Prepared by NBS June 26, 2012
RATE REVENUE REQUIREMENTS SUMMARY
Sources of Sewer Funds
Rate Revenue Under Freveing Rates
Industrial Waste Inspection Fees
Interest Earnings
Total Sources of Funds
Uses of Sewer Funds
Operating Evenses:
Personnel Services
Maintenance and Operations
Subtotal: Operating Evens es
Other Expenditures:
Eksting Debt Service
New Debt Service
Rate-Funded Capital Expenses
Total Uses of Sewer Funds
Budget Projected
FY2018/19 FY2017118 FY 2019120
WEDIZEIMMECHEEEMI InEUEIENINIZELIEMININZELIEEEMIMELLUERIIMEELLUNI
$ 7,340,661
70,000
202,000
$ 7,612,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,681
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 1,367,370 3 1,394,717
4,491,105 4,815,687
$ 5,858,475 3 6,210,405
$ 1,422,612
4,673,457
$ 6.096,069
$ 1,451,064
4,881,332
$ 6,332,396
$ 1,480,085
5,029,487
$ 6,509,572
$ 1,509,687
5,182,625
$ 6,692,312
$ 1,539,881
5,340,929
$ 6,880,810
$ 1,570,678
5,504,585
$ 7,075,263
$ 1,602,092
6,673,787
$ 7,275,879
$ 1,634,134
5,848,738
$ 7,482,872
482,386
$ 7,465,275 I $ 7,815,605 1$ 7,699,069 1$ 8,423,082 I $ 8,116,222 I $ 8,298,525 1$ 8,488,022 1$ 6,679,351 I $ 8,879,716 I $ 9,088,209
Calculation of Required Rate Increases
Rate Revenue with No Rate Increase
plus: Revenue from Prior Rate Increases
Total Rate Revenue Before Rate increase
,PrOjeCte,PTAti nUalftefel .ere aSJD
Cumulative Increase from Annual Rate Increases
$ 8,325,831 $ 8,492,348
(10,777) (36,960)
0.99 0.98
Forecasted Surplus (Deficiency) before Rate Increase $ 147,386 $ (254,944H$ (138,408)1 $ {862,421)I$ (554,561) $ (737,864) $ (927,361) $ (1,118,690)13 (1,319,056) $ (1,527,548)
$ 7,340,661
598.998
$ 7,939,659
$ 7,340,661
916,684
$ 8,257,245
$ 7,340,661
916.584
$ 8,257,245
$ 7,340,661
91§.584
$ 8.257,245
$ 7,340,661
916,584
$ 8.257,245
$ 7,340,661
1 081.729
$ 8 422,390
$ 7,340,661
1 334,401
$ 8 675,062
cl:a3
0,0K
o*y%
igt104,,
3 00%
12.49%
12.49%
12.49%
12.49%
14.74%
18.18%
20.64%
1. in this iteration of the analysis, the rate increases target s total cash reserve balance of $4.6 million at the end of FY 2015/16.
2. Refer to Cost of Service Analysis for detailed calculations.
$ 8,325,831
178,720
1.11
Total Revenue Deficiency
Increase/(Decrease) to Reserves
Less: Revenue from Prior Rate Increases
Net Revenue Deficiency
$ 254,944
2,621
$ 138,408
$ 276,624
$ (138,408)
$ 862,421
$ 67,109
$ (598,998)
$ 330,532 $ 257,565 $ 276,824
$ 554,561
$ (554,561)
$ 737,864
$ •
$ (737,864)
$ 927,361
$ (916,584)
$ 1,118,690
-
$ (916,584)
$ 1,319,056
-
$ (1,081,729)
$ 1,527,548
$ (1,334,401)
$ 10,777 $ 202,105 $ 237,326 $ 193,147 SOURCES & USES OF FUNDS FOR
EXISTING CAPITAL NEEDS
Budget
Projected
FY 2 0 1 2/1 3 FY2013/14 FY2014115 FY 2015/16 FY2016117 PY2017/18 FY 2016119 P(2019/20 FY2020/21
FY2021/22
Sources of Capital Funds
Grants
State Revolving Fund Loan
Revenue Bond
Surplus Capital Reserve
Rate Revenue
Total Sources of Capital Funds
Uses of Capital Funds
Funding of Capital Evenditures {Existing Needs)
Total Uses of Capital Funds
_ Ca 4001.000.444*.:
4,076,472 3,300,000 3,200,000 2,717,614
482.306
$ 4,076,472 $ 3,300,000 $ 3,200,000 $ 3,200,000 $
$ 4,076,472 $ 3,300,000 $ 3,200,000 $ 3,200,000 $
$ 4,076,472 $ 3,300,000 $ 3,200,006 $ 3,200,000
Appendix A
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
A-2 $ 3,000,000 $
100,000 $ 100,000
100,000 $ 200,000
100,000 $
500,000 $
100,000 $
150,000 $
- $ 3,000,000
26,472 $
100,000
100,000
$ 3,000,000
100,000
100,000
$ 3,000,000
CAPITAL IMPROVEMENT PROGRAM FY 2012/13
MECUM! FY 2014/15
FY2015/16
Sewer Main Rehabilitation Project
Sewer Main Point Repair, Manhole Rehabilitation, and Sewer Video
Sewer Pump Stations Improvement P-521
Jasmine Second Force Main Project
Overland pipeline diversion (Construction)
Hayden second force main Project
2nd force main Braddock connection to Los Angeles
New Pump Station Selmaraine
New pipelines to divert Mesmer
New siphon at sewer convergences at Culver/Madison
Upsize Duquesne Sewer Pipe to 21 inch from Lucerne to Jefferson
Financial System Replacement/Enhancements
osts
Appendix A
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
A-3 SUPAMARY OF CASH ACTIVITY
Total Estimated Beginning Cash
Budget
FY2012113 FY2013114
Projected
FY2014115 FY2015116 FY2016117 FY2017118 FY2018119 PY 2019/20 FY2020121 FY2021/22 :
$ 17,190,264
Operating Reserve
Beginning Reserve Balance 1 1,479,650 $ 1,465,000 $ 1,503,683 $ 1,524,000 $ 1,578,163 $ 1,627,000 $ 1,673,000 $ 1,662,223 $ 1,625,263 $ 1,640,608
Plus: Net Cash Flow (After Rate Increases) 147,386 38,683 460,590 54,163 382,023 178,720 (10,777) (38,960) 15,345 (19,646)
Plus: Transfer of Debt Reserve Surplus . 1 - - - - - - -
Less: Transfers Out to Capital Replacement Reserve (162,036) - (440,273) - (313,186) (132,720) - -
Ending Operating Reserve Balance $ 1,465,000 $ 1,503,683 $ 1,524,000 $ 1,578,163 $ 1,627,000 $ 1,673,000 $ 1,662,223 $ 1,625,263 $ 1,640,608 $ 1,620,962
Target Ending Balance (25% or 00 481/.5. r.f moil
Of4.041i -lif4i,')=4: •:it'is:i ' : Fc.ft
$ f 465,0 41 0
.
$ 1 553,000
(4,81,4Yf
f :524 0140
_
$ 1 583,000
_ _,.,......._,,
$ " ' ,8 . : .
$ 1.627.000
:?:$
9' 1 673,000
: ,
$ 1.720.000
$ 7 777
5 1.769,000
43_,Ifat
1 1,819 000
$- ' ! 178.392
$ 1.871,000
$ too.
Capital Rehab 8 Replacement Reserve
Beginning Reserve Balance ' $ 14,101,775 $ 10,187,340 $ 6,887,340 $ 4,127,614 $ 1,410,000 $ 1,723,186 $ 1,855,907 $ 1,855,907 $ 1,855,907 $ 1,855,907
Plus: Net Debt Proceeds -
_
- - - - - - - -
Plus: Transfer of Operating Reserve Surplus 162,036 - 440,273 - 313,186 132,720 - - -
Less: Use of Reserves for Capital Projects (4,076,472) (3,300,000) (3,200,000j (2,717,614) - - - - - -
Ending Repair & Replacement Balance $ 10,187,340 $ 6,887,340 $ 4,127,614 $ 1,410,000 $ 1,723,186 $ 1,855,907 $ 1,855,907 $ 1,865,907 $ 1,855,907 $ 1,865,907
Target Ending Balance +:3% of Assets) $ 1,250,000 1,310,000 $ 1 , 369,000 $ 1,410.000 $ 1.370,000 . 1,330000 SS ' 290,000 . $ 1.250,000 $ 1,210,000 $ 1,160,000
Giareitiagirgliiiialiiit 411W4 ridiiikit)
$ 8;00:* f•- %strove' ' it -lAi,4: is -
iiiiiiis' . -- :0147 45:00t, 4747Rif '0007-1- .
Debt Reserve
Beginning Reserve Balance' $ 1,608,838 $ 1,608,838 $ 1808,838 $ 1,608,538 $ 1,608,838 $ 1,6013,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838
Plus: Reserve Funding from New Debt Obligations -
.
- - - - - - -
Less: Transfer of Surplus to Operating Reserve (11 - - - -
- - - -
Ending Debt Reserve Balance $ 1,808,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,808,838 $ 1,608,838 $ 1,606,838 $ 1,608,838 $ 1,608,838 $ 1,608,838
, TargelEnding .9a Is nce .... ,
l'eieldlieitiilltiiirpiqigtheii . citl
5 1,A0R,839 $ 1 11 -6,6,98 4 508 '?qe 8 1 508.F38
4
$ 1,60. 838 8 1 608.833 $ 1 608 8.38 .,t 1 608 538
$ -
$ 1 608,838
5
$ -, i,6r) Er38
-
De,bt Coverage Ratio (After Rat( 18 88 H 03
,,
1 02
,
1.29 1.33 1 23 0.99 , 1 Ji 0.99
Recommondcd Target Ending t,ildlice - i-H Pes8r , , 0-8 4,323,838 4,471,838 4 ,:2,838 481 , 01,833 S 4305,838 4 n:,11 8" 4,618,838 4 827,83H 4337 4_658,838
1,,
Total Minimum Reserves Recommended in this study: 25%, or 90 days of O&M expenses, plus 3% of Net Assets, plus the debt reserve requirement which is equal to the maximum annual debt service payment
For reference purposes, the total Minimum Reserves Per Existing City Policy: 70% of annual operations budget, plus two years of debt service payments, plus the annual capital improvements budget.
1. For purposes of this analysis, itis assumed that available cash can be deposited into distinct Operating, Capital and Debt Reserve Funds. Accordingly, the total beginning cash balance of $17,190,264 has
been segregated as follows: $1,479,650 has been assigned as the beginning cash balance in the Operating Fund, $14,101,776 has been assigned as the beginning cash balance in the Capital Reserve
and $1,608,838 has been assigned as the beginning Debt Reserve balance. No fund have been assigned to the Developer - Impact Fee Fund, because the City has no funds set aside for this fund currently.
Appendix A
A-4
Sewer Rate Study City of Culver City
Prepared by NBS — June 26, 2012 Classification of Expenses
Budget Categories
Total Revenue
Requirements
(1300)
• 846,544
25,000
15,912
5 12,763
65,1547
134,715
18,530
69,286
151,154
5,200
15,973
-
$ 2,546
5132
3,400
$ 1,367,370
$ 338,618
$ 10,000
6,365
5,105
$ 26,339
$ 53,886
7,412
$ 27,714
$ 60,462
2,080
6,389
1,018
200
• 1,360
$ 546.54*
4,491,105 $ 2,586,6$61
5,858,475 $ 3,133,604
100% 53%
056
2009 Series A Revenue Bonds 1.6.7:6 50 903.400 $ 401,700 101,700
9:i.•:•±1;250:08W 16%
Classification of Expenses {cont.)
Adjustments to Classification of Expenses
Adjustment for Current Rate Level: (VOL)
IWO
2013 Net Revenue Requirement
Current Level of Rate Revenue
Adjustment Factor
loofa**, Maio_
$7,193,275
$7,545,151
1.0489
Vqt-4
Less Non-Rafe Revenues
(less) Industrial Waste Inspection Fees
(less) Interest Eaminas
NET REVENUE REQUIREMENTS
Alioestion of Revende Requirementa
(70,000) $ (37,442) $ (9,022)
(202,000 $ (109,047) $ (26,036)
...
7,193,270 $ 3,791,515 5 1,121,757 $
. .. . . . . ..... . .
100% 53%1 16%
(8,480) $
(24,470) 8 (43445.
1
MEM!
1,078,426
12%
1,000
2,000
10,000
7,100
76,000
30,310
10,000
6,690
3,400
3,500
2,000
$ 3272,000
88,000
95,000
360,000
33,412
400
733,318
7,680
28,300
$
• 43,900
• 21,613
655,484
21,950
2,161
85.548 $
522,580
13,200
14,250
126,555
3,750
2,387
1,914
9,877
20,207
2,780
10,393
22,673
780
2,396
382
75
510
205,106
477,120
13,200
14,250
382
75
510
205,106
1,6,,552
3,750
2.3157
1,914
9,877
20,207
2,780
10,393
22,673
780
2,396
$ 550,010
$ 755,116 $ 709, 676
1:t% 129;
504,570
a- arid/40S
Regular Salaries
Part-Time Saieries
Overtime Pay
Deferred Compensation
Social Security
Retirement
Deferred Retirement
Workers Compensation
Group Issuance
Retiree Health Savings
Retiree Insurance
Retiree Medical Pre-funcing
State Disalality Instrance
Health Benefits
1-cn9evitY Pal
Uniform Allowance
Total Personnel Service*
Office Expense
Printing & Bindng
Postage & Delivery
Communications
Utilities
Departmental Special Supplies
Small Tools & Equipment
Trdning & Education
Conferences & Conventions
Special Events & Meetings
Memberships & Dues
Contributions to Agencies (1)
R&M - Equipment .
Garage EXpORSCS
Rental of Land
Amortization of Equipment
Med Services - 01+9/ Certificate
Med Services - Special Examine
Refuse Disp Services - Other
Other Contractual Services
hsurance Premiums - Other
Liability Reserve Charge
Depreciation
Improvements other than Bldg.
Auto - Rolling Stock& Equipment
FT Equipment- Hardware
Administrative Ch es
Total Maintenance & Operations
Total Operating Expenses
Allocation of Operafino Expenses
11 2031+1
7,500
4,774
3,829
$ 19,754
$ 40,415
5,559
$ 20,786
$ 45,346
1,560
4,792
764
150
1,020
$ 410,211
1,uuu
2,000
-10,000
7,100
7,600
3,031
1,000
8,690
3,400
3,500
2,000
25,400
28,500
36,000
3,341
40
73,332
768
2,830
21,950
56'6
19,452
589,936
849,869
1,260,080
27 ."-
68,400
27,270
9,000
1,272,320
35,200
39,000
324,000
30,071
-
WO
659,984
6,912
25,470
15%
1s-5;,
1556
15%
155s,
1555
159.6
1556
1556
1555
15%
15%
1555
15%
15%
15%
3.06 5
n";, 15%
15% -
I. Estimated Volumetric, BOD/TSS strength factors are from the City's 2003104 Engineers Report (Table 4).
Appendix B
B-1
Sewer Rate Study - City of Culver City
Prepared by NBS -June 26, 2012 Allocation of Revenue Requirements
Customer Classes
Net Revenue
Requirements'
200
Comnmerciall
Business
300
Commercial/
Restaurants
Classification Components
600
Commercial/
Hotels
101
Single-Family
102
400
Institutional
500 Schools/
Public
3,976,986 $962,013 $1,522,095 $888,087 $225,777 $113,144 $7,444 $258,430
Volume
Treatment
- BO D
- TSS
Customer-Related
Direct Assignment
Net Revenue RequirementA
1,176,630
1,131,180
1,260,354
ifrtb10 1:::
$246,676 $390,290 $227,720
$239,608 $379,107 $221,195
$544,013 $587,925 $102,998
$0 $O $0
777
r$1 14{410 $Z879 417 $144Q 000
$188,523
$202,890
$15,649
$0
AMMO
$37,194
$16,011
$5,406
$0
$1 71 N1
$1,273
$1,053
$1,043
$0
$10414
$84,956
$71,316
$3,319
$0
$41NPUR
1. These rmenue requirements have been adjusted to meet the City's currant revenue collected from sewer rates.
Appendix B
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
tra Customer Data
No. of Parcels/
Dwelling Units
New Base
Charges
Commodity Rates
Adjusted 2010
Consumption New Rate Who°
New Base
Charges
Total Annual
Revenue
Current Rate
Revenue COS Rev. Reqts
Annual Rate Revenue
Target Rev, Regts 2
Commodity
Charges
601 Special*
6
$39.11
16,417
$3.79
$235
$62,206
602 Special*
2
$39.11
13,210
$4.94
$78
$65,315
603 Special*
1
$39.11
12,221
$4.94
$39
$60,425
604 Special*
2
$39.11
20,236
13.47
$78
$70,131
605 Special*
5
$39.11
23,082
$2:97
$196
$68,475
606 Special*
1
$39.11
16,601
$4.94
$39
$82,081
607 Special*
1
$39.03
49
$3.55
$39
$174
608 Special*
1
$39.10
281
$4.55
$39
$1,280
609 Special*
$39,11
613
$3.56
$235
$2,181
610 Special*
1
$39.12
1,149
$0.71
$39
$818
612 Spacial*
7
$39.11
1,632
$0.36
$274
$588
613 Special*
1
$39.09
1,571
$0.36
$39
$566
614 Special*
1
$39.12
798
$3.02
$39
$2,412
18,182
1,659,863
7100*.ii
10,4%
$7 :•;00:5.1::
*Ati.
$62,441
$65,393
$60,464
$70,209
$68,671
$82,120
$213
$1,319
$2,416
$857
$862
$605
$2,451
$62,441 :
$65393
$60,464
$70,200
$68,671
$82,1 . 20
§213
$2,416
$862
$606
$2,461
.........
570 168
85$ 42$
$7:4",306: :!:
$88 858.:
31 426
:
$2 814
.5655
Proposed 2012-13 Sewer Rate Revenue - Base and Commodity Charges
101 Single-Famy
102 Multi-Familyt
200 Commercial/Business*
300 Commercial/Restaurants*
400 institutional*
500 Schools/Public*
$242,748
$463,650
$44,930
$6,087
$2,306
$466
$1,545,823
$2,415,767
$1,395,070
$626,753
$169,443
$10,129
$1,788,571
$2,879,417
$1,440,000
$632,640
$171,751
$10,594
$1;882,310
$2,879,417'
$1,440,000
$632,840:
$171,751 :
5,736
11,092
1,086
165
57
11
$42.32
$41.80
$41.37
$36.89
$40.50
$42.32
401,513
635,272
370,658
94,232
47,221
3,167
$3.85
$3.80
$3.76
$665
$3.59
$3.26
* Parcels. Dwelling Units.
1. Adjusted for irdgaffon factors.
2 Cost-of-Service (COS) analysis indicates some crosses should be reduced. The "Target Rev. Reqts" ere the /esser of Current or COS Revenue Requirement (which are highfigded in yellow).
Appendix B
B-3
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 New 201243 Sewer Rates Incorporating
Customer Class
COS Revenue Requirements
Adjusted' Sewer Rates
Total Annual
Revenue
Base Commodity
Charges Rates
Base Charges Commodity Rate
$ 11(r) (VW)
101 Single-Family $42.32 $3.85 $242,748 $1,545,823 $1,788,571
102 Multi-Family $41.80 $3.80 $463,650 $2,415,767 $2,879,417
200 Commercial/Business $41.37 $3.76 $44,930 $1,395,070 $1,440,000
300 Commercial/Restaurants $36.89 $6.65 $6,087 $626,753 $632,840
400 Institutional
H $40.50 $3.59 $2,308 $169,443 $171,751
500 Schools/Public $42.32 $3.26 $466 $10,129 $10,594
601 Special $39.11 $3.79 $235 $62,206 $62,441
602 Special $39.11 $4.94 $78 $65,315 $65,393
603 Special $39.11 $4.94 , $39 $60,425 $60,464
604 Special $39.11 $3.47 $78 $70,131 $70,209
605 Special $39.11 $2.97 $196 $68,475 $68,671
606 Special $39.11 $4.94 $39 $82,081 $82,120
607 Special $39.03 $3.55 $39 $174 $213
608 Special $39.10 $4.55 $39 $1,280 $1,319
609 Special $39.11 $3.56 $235 $2,181 $2,416
610 Special $39.12 $0.71 $39 $818 $857
612 Special $39.11 $0.36 $274 $588 $862
613 Special $39.09 $0,36 $39 $566 $605
614 Special
.' Tia
. PI TiMal
$39.12 $3.02 $39 $2,412
,637
$2,451
.
$7 ,341,194
,L ., a,m 4 . ,-- -e754114R
1. Adjustments to base charges and commodity rates were made to generate the Target Revenue Requirements,
including reductions in most customer classes based on the cost-of-service analysis results
Appendix B
B-5
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
33 Projected Sewer Revenue Requirements -
Including Rate Increases and COS Adjustments to Single-Family and Code 500 Customers
Rate Revenue
Customer Class
- nNti . . - _ ,
Total Annual '11-
12 Rate Revenue
.
One-Third of COS
Rev. Reqt
Adjustment 1
$67,913
Total Annual
_hill111•11111MIKE4h*
201344
$1,928,027
1 2014-15
$2,002,431
01111.:-
2015-16
$2,079,812 101 Single-Family $1,788,571
102 Multi-Earnily $2,879,417 N.A. $2,994,594 $3,114,377 $3,238,953
200 Commercial/Business $1,440,000 N.A. $1,497,600 $1,557,504 $1,619,804
300 Corn mercial/Restaurants $632,840 N.A. $658,154 $684,480 $711,859
400 Institutional $171,751 N.A. $178,621 $185,766 $193,197
500 Schools/Public $10,594 $73 $11,091 $11,532 $11,990
601 Special $62,441 N.A. $64,939 $67,536 $70,238
602 Special $65,393 ALA. $68,009 $70,729 $73,558
603 Special $60,464 ALA. $62,883 $65,398 $68,014
604 Special $70,209 N.A. $73,017 $75,938 $78,976
605 Special $68,671 N.A. $71,418 $74,275 $77,246
606 5 ecial $82,120 N.A. $85,405 $88,821 $92,374
607 Special $213 N.A. $222 $230 $240
608 Special $1,319 N.A. $1,372 $1,427 $1,484
609 Special $2 ,416 N.A. $2,513 $2,613 $2,718
610 Special $857 N.A. $891 $927 $964
612 Special $862 N.A. $896 $932 $970
613 Special $605 ALA. $629 $654 $681
614 Special ALA. $2,549 $2,757
,
' ' ,i '3.41.1941 , $8,428,80
This is added to the revenue requirements for these class in each of the next 3 years.
Appendix B
B-6
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 Proposed 2013-14 Sewer Rates Incorporating COS Revenue Requirements
Including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates
Total Annual Rate Revenue
3
Base
Customer Class
101 Single-Family
1
Charges
($/yr)
$254.24
Commodity
2
Rates ($/fic0
$1.17
From Base
1
Charges
$1,458,327
From Commodity Total Annual
3 Rates 2 Revenue
$469,700 $1,928,027
102 Multi-FarniFyl $202.97 $1.17 $2,251,326 $743,268 1
[ $2,994,594
200 Commercial/Business $254.24 $3,30 $276,106 $1,221,494 $1,497,600
300 Commercial/Restaurants $254.24 $6.54 $41,950 $616,204 $658,154
400 Institutional $254.24 $3.48 - $14,492 $164,129. $178,621
500 Schools/Public $254.24 $2.67 $2,797 $8,294 $11,091
601 Special $254.24
$254.24
$3.86
$5.11
$1,5251
$5081
$63,4141 $64,939
$67,501 $68,009 602 Special
603 Special $25424 $6.12 $2541 $62,6291 $62,883
$72,50- 91 $73,017 604 Special $254.24 $3.58
'I
$5081
605 Special $264.24 $3.04 $1,271 $70,147 $71,418
606 Special $254.24 $5.13 $2541 $85,151 $85,405
607 Special $222.00 $0.00
-1
$222 $0 $222
608 Special $254.24 $3.98 $254. $1,118 $1,372
609 Special $254.24 $1.61 $1,5251 $988
$637
$2,513
$891 610 Special $254.24 $0.55 $254 1
612 Special $128.07 $0.00 $896 $0 $896
613 Special $254.24 $0.24 $254; $375 $629
614 Special $254.24 $2.88 $2541 $2,295 , $2,549
_
-WO% ,
1.-The base charges reflect residential classes but are adjusted to overall collect 60% of all revenues.
2. Commodity charges are individually adjusted for each customer class to meet COS revenue requirements.
3,. The total rate revenue collected from each easterner class are the cost-of-service (COS) revenue requirement.
4. Multi-Family base charges are 80% of Single-Family base charges based on the differences in per unit water
consumption. Multi-Family commodity rates are also adjusted to meet the revenue requirements for this class.
Appendix B
B-7
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 Proposed 2014-15 Sewer Rates Incorporating COS Revenue Requirements
Including Rate COS-Adjusted Allocations to Base Charges and
Base
.
Commodity Rates
Total Annual Rate Revenue
Customer Class
101 Single-Family
Charges1
(Sip)
$264.32 |1010|Commodity
Rates ($474
$1.21
From Base
i
Charges
From
Commodity
2
Rates
Total Annual
3
Revenue
$1,516,1461 $486,2811
$768,679
$2,002,431
$3,114,377 102 Multi-Family4
Ile-
$211.48 $1.21 $2,345,698 1
200 Commercial/Business $264.32 $343 $287,0531
$43,6131
$1,270,451
$640,8674
$170,7001
$8,6241
$1,557,504
$684,480
$185,766
$11,532
300 Corn mercial/Restaurants $264.32 $6.80
400 Institutional $264.32 $3.61 $15,066]
$2,908! 500 Schools/Public $264.32 $2.78
_cotsip s.ia I $264.32 $4.02 $15861 $65,9501 $67,536
602 Special $264.32 $5.31 $529 ,
i
$70,2001 $70,729
603 Special $264.32 $5.33 $264 = $65,134
t
[ $65,398
604 Special $264.32 $3.73 $529 $75,4091 $75,938
605 Special $264.32 $3.16 $1,322
l
$72,953 $74,275
606 Special $264.32 $5.33 $2641 $88,557 1 $88,821
607 Special $230.00 $0.00 $2301 $0 $230
608 Special $264.32 $4.14 $264! $1,163 [ $1,427
609 Special $264.32 $1.68 $1,58
H
6 $1,0271 $2,613
610 Special $264.32 $0.58 $2641 $663 i $927
612 Special $133.19 $0.00 $932 $01
$3901
$2,3871
$932
$654
$2,651
14?"
613 Special $264.32 $025 $264
$264[ 614 Ssecial ,
$264.32 $2.99
1. The base charges reflect residential classes but are adjusted to overall collect 60% of all revenues.
2. Commodity charges are individually adjusted for each customer class to meet COS revenue requirements.
3. The total rate revenue collected from each customer class are the cost-of-service (COS) revenue requirement.
4. Multi-Family base charges are 80% of Single-Family base charges based on the differences in per unit water
consumption. Multi-Family commodity rates are also adjusted to meet the revenue requirements for this class.
Appendix B
B-8
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 Base
Charges'
(Sir)
Commodity
Rates 2
($/hc0
From Base
Charges 1
From
Commodity
Rates 2
Total Annual'
Reve nUe 3
Customer Class
Total Annual Rate Revenue
Proposed 2015-16 Sewer Rates Incorporating COS Revenue Requirements
Including Rate COS -Adjusted Allocations to Base Charges and Commodity Rates
101 Single-Family $274.80 $1.25 $1,576,276 1 $503,536 $2,079,812
102 Multi-Family4 $220.42 $1.25 $2,444,863 $794,090 $3,238,953
200 Commercial/Business $274.80 $3.56 $298,437 $1,321,367 $1,619,804
300 Corn m ercial/Resthurants $274.80 $7.07 $45,343 $666,516 $711,859
400 Institutional $274.80 $3.76
$2.89
$15,664! $177,533. $193,197
$3,023
1 $8,967
!
1 $11,990
500 Schools/Public $274.80
601_Special $274.80 $4.18 $1 i
,649 1 $68,589 1
$70,238
602 Special $274.80 $5.53 $550 $73,0081 $73,558
$67,739] $68,014
$78,426 $78,976
603 Special $274.80 $5.54 $275
604 Special $274.80 $3.88 $550
605 Special $274.80 $3.29 $1,374 $75,872 $77,246
606 Special $274.80 $5.55
$0.00
$275 1
---1
$240
$92,099 $92,374
607 Special $240.00 $0 $240
608 Special $274.80 $4.30 $275 $1,209 $1,484
609 Special $274.80 $1.74 $1,649 $1,069 $2,718
610 Special • $274.80 $0.60 $275 $689 $964
612 Special $138.52 $0.00 $970 1
.
i
$04 $970
$4061 $681
613 Special $274.80 $0.26 $275 1
--1
$275 614 S•ecial $274.80 $3.11 $2,482 $2,757
31
rc- ttai
- i 00
58,328,831.
1. The base charges reflect residential classes but are adjusted to overall collect 60% of all revenues.
2. Commodity charges are individually adjusted for each customer class to meet COS revenue requirements.
3. The total rate revenue collected from each customer class are the cost-of-service (CPS) revenue requirement.
4. Multi-Family base charges are 80% of Single-Family base charges based on the differences in per unit water
consumption. Multi-Family commodity rates are also adjusted to meet the revenue requirements for this class.
Appendix B
B-9
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
37 ALLOCATION OF OPERATING EXPENSE FORECAST':
- .
Personnel Services
-
2013:_
. .All '.. .. oc,ation 'Vs . Allocation $'s
Fixed Variable
010$:::::::C:A7
'''147:1M43.074;
' Fixed Variable
411100 Regular Salaries $ 846,544 100% $ 846,544 -
411200 Part-Time Salaries 25,000 100% $ 25,000 $
411300 Overtime Pay 15,912 100% $ 15,912 $ -
431000 Deferred Compensation 12,763 100% $ 12,763 $ -
432000 Social Security 65,847 100% $ 65,847 $ -
433000 Retirement 134,715 100% $ 134,715 $ -
433500 Deferred Retirement 18,530 100% $ 18,530 $ -
434000 Workers Compensation 69,286 100% $ 69,286 $ -
435000 Group Insurance 151,154 100% $ 151,154 $ -
435400 Retiree Health Savings 5,200 100% $ 5,200 $ -
435500 Retiree Insurance 15,973 100% $ 15,973 $ -
436000 State Disability Insurance 2,546 100% 2,546 $ -
437000 Health Benefits 500 100% $ 500 $ -
440000 Uniform Allowance 3,400 100% 3,400 $ -
Total: Personnel Services 1,367,370
Aitiiiiaii:4*,41604tiOirt
512100 Office Expense 1,000 100% 1,000 $ -
512200 Printing & Binding 2,000 100% $ 2,000 $ -
512299 Postage & Delivery 10,000 100% $ 10,000 $ -
512400 Communications 7,100 100% $ 7,100 $ -
513000 Utilities 76,000 100% $ - $ 76,000
514100 Departmental Special Supplies 30,310 100% $ 30,310 $ -
514600 Small Tools & Equipment 10,000 100% $ 10,000 $ -
516100 Training & Education 6,690 100% $ 6,690 $ -
516500 Conferences & Conventions 3,400 100% $ 3,400 $ -
516600 Special Events & Meetings 3,500 100% $ 3,500 $ -
516700 Memberships & Dues 2,000 100% $ 2,000 $ -
517500 Contributions to Agencies (5) 2,272,000 100% $ - $ 2,272,000
600200 R&M- Equipment 88,000 100% $ 88,000 $ -
600800 Garage Expenses 95,000 100% $ 95,000 $ -
605200 Rental of Land 360,000 100% $ 360,000 $ -
605400 Amortization of Equipment 33,412 100% $ - $ 33,412
614500 Med Services - Special Examine 400 100% $ 400 $ -
619800 Other Contractual Services 733,316 75% 25% $ 549,987 $ 183,329
650200 Insurance Premiums - Other 7,680 100% $ 7,680 $ -
650300 Liability Reserve Charge 28,300 100% $ 28,300 $ -
732100 Auto - Rolling Stock & Equipment 43,900 100% $ 43,900 $ -
732150 IT Equipment - Hardware 21,613 100% $ 21,613 $ -
670100 Administrative Charges 655,484 75% 25% $ 491,613 $ 163,871
Totat:' Mainteilancet ,OperatiOS 44911 05
Digit Se.Nicie,-: . - -1:*
2009 Series A Revenue E onds. 1,6(36,800 1 n - 1,606,36C 6 -
aatj tiA11:444040 --Riiiitienient 444275 $ 4,736 663 4 Z128,12
I rigs table is used to evaluate the f:,tal wrnortagp of, costs that are frod vs. a naptc, for rata design purposes.
Appendix B
B-10
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
3% % of 2010
Volume
(Unadjusted)
Development of the Customer Allocation Factor
5,736
6,199
1,086
165
57
11
35
1089
43.16%
46.65%
8.17%
1.24%
0.43%
0.08%
0.26%
Oh.
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
600 Commercial/Hotels
Total
5,736
6,199
1,086
165
57
11
35
Development of the Volume Allocation Factor
Est. 2010 Volume'
(ccf)
Adjusted Vol.
Total (ccf)
Percent of
Adjusted Vol.
Customer Class
316%
36.2%
18.0%
4.6%
2.3%
0.2%
5.2%
oOo
24.2%
38.3%
22.3%
5.7%
2.8%
0.2%
6.5%
IOU%
101 Single-Family
102 Multi-Family
200 CornmerciaVBusiness
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
600 Commercial/Hotels
692,263
747,379
370,658
94,232
47,221
3,107
107,860
At'
401,513
635,272
370,658
94,232
47,221
3,107
107,860
1,6$063
Target TotaI 3 (cc0:
itv Flow4 (11/7GD)
435,675
689,323
402,195
102,250
51,239
3,371
117,037
1000
1,801,090
3.6910
1. City-provided water use data (2011/12 Sewer User Charges, Summary by User code).
2. Single- and Multi-Family adjustments reflect landscape-inigation factors.
3. Total effluent from L.A. Hyperion records (effluent flow meters).
4. From flow meter data for Aoril 1. 2010 to March 31, 2011. Email from Public Works Dark, March 29. 2012.
Appendix B
B-11
Sewer Rate Study — City of Culver City
Prepared by NBS —June 26, 2012 Development of the Strength Allocation Factor
Biochemical Oxygen Demand (BOO) Total Suspended Solids (TSS) Adjusted
Annual Flow
(ccf) 1
Avg Strength
Factor2 (mg/1)
Calculated
BOO (Itifyr)
Adjusted BOO
(lb/yr)
Percent of
Total
Avg Strength
Factor2 (mg/1)
Percent of
Total
CuStOrner Class Calculated
TSS (113/yr)
Acljusted TSS
(lbfyr)
195
195
195
635
250
130
250
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
600 Schools/Public
600 CommerciaVHotels 3
435,675
689,323
402,195
102,250
51,239
3,371
117,037
529,986
838,543
489,259
405,045
79,911
2,734
182,529
529,986
20.96%
838,543
33.17%
489,259
19.35%
405,045
16,02%
79,911
3.16%
2,734
0:11%
182,529
7.22%
2,4213,00 M00%
478,347
756,839
441,588
405,045
31,964
2,103
142.372
478,347
756,839
441,588
405,045
31,964
2,103
142,372
Zitit> 8 :IT J 13101;
2, 48:0Yr
1. Reflects irrigation credits for single-and multi-family classes.
2. Estimated BODITSS strength factors are from the City's 2003/04 Engineers Report (Table 2).
3. Estimated BOD/TSS from City's 2003/04 Engineers Report (Table 2):
21.18%
33,51%
19.55%
17.94%
1.42%
0.09%
6.30%
Appendix B
B-12
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 NOTICE OF PUBLIC HEARING
ON PROPOSED SEWER UTILITY RATE INCREASES
JULY 22, 2013 AT 7:00 PM
CITY OF CULVER CITY COUNCIL CHAMBERS
9770 CULVER BOULEVARD
THE CITY OF CULVER CITY, IN COMPLIANCE WITH ARTICLE XIIID OF THE CALIFORNIA STATE
CONSTITUTION AND THE PROPOSITION 218 OMNIBUS IMPLEMENTATION ACT, IS HEREBY NOTIFYING ALL
AFFECTED PROPERTY OWNERS OF THE FOLLOWING:
• The City of Culver City is proposing to increase its sewer utility rates. The purpose of the proposed increases is
to adequately fund the ongoing costs of providing sewer utility service to properties within the City of Culver City.
Revenue from sewer utility charges pays for operations, maintenance, and capital improvements to the City of
Culver City's sewer system.
• This notice includes the proposed schedule of rates for Fiscal Year 2013/14 through Fiscal Year 2015/16. If the
proposed rate increases are approved by the City Council, the rates will become effective July 1 of each fiscal
year, commencing July 1, 2013, and remain in effect until otherwise modified by the City Council. The sewer
utility rates cannot exceed the amounts adopted by the City Council without providing written notice to property
owners.
COMMENTS AND WRITTEN PROTEST
A Public Hearing on the proposed rate increases will be held on July 22, 2013, at 7:00 pm, or as soon thereafter as the
matter may be heard, in the City Council Chambers located at 9770 Culver Boulevard in the City of Culver City. The City
Council will hear and consider all oral and written testimony concerning the proposed sewer utility rates.
If you oppose the proposed rate increases, you may submit a formal written protest in-person at the Public
Hearing, via postal mail, or by hand-delivery to the City Clerk's office. The protest must be submitted in
writing, include the property owner's name, contain a description of the affected property or properties for
which the protest is entered (assessor's parcel number or address), and be signed by the property owner
(faxes:lie-mailed protests will not be accepted).
Written protests will be tabulated pursuant to procedures adopted by the City Council. If written protests, opposing the
proposed rate increases, are received with respect to a majority (50% plus 1) of the properties within the City of Culver
City, then the proposed rate increases will not be imposed. All written protests must be received by the conclusion of the
Public Hearing on July 22, 2013. Please mail written protests to:
City of Culver City
Office of the City Clerk
RE: Written Protest — Sewer Utility Rates
9770 Culver Boulevard
Culver City, CA 90232
REASON FOR PROPOSED INCREASES
Sewer utility rates were last raised in Fiscal Year 2007/08, and rates were actually lowered in Fiscal Year 2012/13 for all
customer classes except Single-Family Residential. The purpose of the proposed increases is to adequately fund the
ongoing costs of providing sewer utility service to properties within the City. The proposed rates have been designed to
fairly and equitably recover the cost of providing sewer utility service from all customer classes. For further information
regarding the rates and analysis, please refer to the Sewer Rate Study, which is on file with the City Clerk.
*PLEASE SEE THE REVERSE SIDE OF THIS NOTICE FOR DETAIL OF THE PROPOSED RATE INCREASES*
City of Culver City Phone: (310) 253-6000 www.culvercity.org
41
Annual Water
Consumption
{HCF)
HCF
Adjustme nt
Factor
Dwelling
Units
$42.32
:
41.37
40.50
39.11
39.11
ii
39.11
39:117
39.10
39.11
39.12
$3.85
$254.24
• -2(12,97:
3.76 254.24
254.24
3.26 54.24
3.79 254.24
.4:94 .:24 . .,24
4.94 254.24
3,47 254.24.
2:97 254.24
• 494 25424
4.55
264.24
0.71
254,24
0.36
128.07
9 ,36
254,24
3.02
254.24
25 .4.24
$1.17 $264.32
1.17 211:48
3.30 264.32
54 20447
3.48 264 32
. 2.67 :264_32
3.86 264.32
5.11 2043.2
5.12 264.32
3.5.3 2643
3.04 264.32
.513 244:32
3.93 264.32
0 .45 264.32
0.00 133.19
2.88 264.32
394 .25432
6274.80
274.80
274.80
2748(1,:
274.80
274.60
274.80
274.60
274.80
274.80,
$1.21
.••••
3.43
6.50 :
3.61
4.02
5.31
5.33
3.73:
3.16
533
4.14
$1.25
0 00
2.99
4. 19
SAMPLE COMPARISON OF EXISTING AND PROPOSED CHARGES
The following table shows how some of the various customer classes will be affected by the proposed rates increases.
These are samples only. Your charge will be determined by your number of dwelling units and/or actual metered water
consumption.
Customer Class
101 Single-Family
51 0
2::10.0 11P+MAY::::
200 Commercial/Business
300:::COMMerCial/ReStaUrantS::::
Current
Charge
$310.28
568:10
1,470.17
.436;38. -
Proposed FY 2013(14
Charge
$335.67
1,508.24
PROPOSED SEWER RATES
The proposed sewer utility rates for Fiscal Year 2013/14 through Fiscal Year 2015/16 are compared to the current sewer
utility rates in the following table:
Customer Class
Proposed Annual Rates
FY 2014/16
Commodity
Base Rate
Charge (per HCF g)
Current Annual Rates
FY 2013114
Commodity
Base Rate
Charge (per HCF 6)
FY 2015/16
Commodity
Base Rate
Charge (per HCF 6)
Commodity
Base j
Rate
Charge (per HCF 6 )
101 Single-Family'
102 Multi
FaSitly
200 Commercial/Business
. . . .
• : .300-.P0mrper iOjafiReSta0taritS
400 Institutional 3
500 Sthoojs/Public
601 Special 34
602 Spacial
603 Special 34
604 pecla1 34
•
605 Special 34
606 Special
608 Special 34
610 Special 34
612 Special
...• •
614 Special
61.5 SpecIal
Base charge is per parcel
2 Base charge is per dwelling unit
3 Base charge is per meter
4 User descriptions of "Specie customer classes are on file at the City Engineer's office
'Class els was added for FY 2013114 as directed by City staff, assuming this rate consists of 20% of Class 300 and 80% of Class 200
5 HCF - hundred cubic feet of water consumption; for Single-Family and Multi-Family, only 58% and 85%, respectively, of the annual HCF (water consumption) will be
used in the calculation of the sewer charge
Detailed tables showing the development of the analysis and proposed rates are shown in the Sewer Rate Study on file
with the City Clerk.
The sewer charges will be forwarded to the Los Angeles County Auditor's office in August 2013 for placement on the
property tax bills that will be mailed to property owners in September/October 2013.
Questions? If you have any questions regarding the proposed rate increases, please contact NBS at (800) 676-7516.
. 6:65
3 59
City of Culver City Phone: (310) 253-6000 www.culvercity.org