City of Culver City, California
Agenda Item Report
RECOMMENDATION:
That the City Council:
1. Receive and File a Presentation on the Engineer’s Report; and
2. Adopt a Resolution approving the Engineer’s Report for the Sewer
User’s Service Charge for Fiscal Year 2012/2013; declaring its
Intention to levy and collect the Sewer User’s Service Charges for
Fiscal Year 2012/2013; and setting a public hearing for July 23, 2012,
at 7:00 p.m. in the Mike Balkman Council Chambers.
BACKGROUND:
Culver City obtains sewage treatment services at the City of Los Angeles' Hyperion
Treatment Plant through an Amalgamated Agreement with the City of Los Angeles.
(Agreement). The 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.
Culver City owns and operates a separate sewage collection system, which is
connected to the Amalgamated 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: 07/02/2012 Item Number: A-1
CITY COUNCIL AGENDA ITEM: (1) Receipt and Filing a Presentation on the
Engineer’s Report, and (2) Adoption of a Resolution Approving the Engineer’s
Report, Declaring the Intention to Order the Annual Sewer User Service Charge,
and Setting the Date, Time, and Place for the Public Hearing to be Monday, July 23,
2012 at 7:00 PM in the City Council Chambers for the Sewer User’s Service Charge
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: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Agenda and Meetings – City Council (06/28/2012);
Department Approval:
Charles D. Herbertson (06/21/12)
City Attorney Approval:
Carol Schwab (by H. Baker) (06/26/12)
Chief Financial Officer Approval:
Jeff Muir (06/26/12)
City Manager Approval:
John M. Nachbar (06/27/12) 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,
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 Sewer User’s Service Charges 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.
DISCUSSION:
Pursuant to a Resolution adopted by the City Council on Monday, May 14, 2012, the
Public Works Director/City Engineer has prepared the Engineer’s Report for the
Sewer User’s Service Charge and filed said Report with the City Clerk. A copy of the
Engineer’s Report is attached to this report for consideration, and recommended
approval, by the City Council.
On May 7, 2012, the City Council approved a professional services agreement with
NBS Government Finance Group dba NBS for an update to the sewer user’s service
charges (SUSC). The scope of work is for NBS to conduct an in-depth review of the
existing SUSC and determine if they are fair and equitable to each customer class in
light of the cost passed on to the City of Los Angeles to treat the wastewater and the
City’s costs for collection and conveyance of the sewage in its own system.
NBS has completed the analysis and made 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. 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. Commodity charges cover
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 City of Culver City, California
Agenda Item Report
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.
The attached Engineer’s Report contains a detailed explanation of the rate analysis
and 5 year financial plan. NBS will also conduct a presentation of the Study this
evening. The Study is also attached to this report.
Based on the recommendation contained in NBS’ study and the Engineer’s Report,
Staff anticipates recommending rate reductions for the following customer classes at
the Public Hearing on July 23, 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
Staff is not recommending any rate increases since any proposed rate increase
requires a 45-day public notice under Proposition 218, and there would not be
enough time to submit the sewer charges to the County Assessor’s Office in August
2012. The Study recommended an 11% rate increase for single family residences.
Rate increases of 4% are proposed across all customer classes beginning in Fiscal
Year 2013/2014 and continuing through Fiscal Year 2015/2016. In addition, base
charges will be 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.
City of Culver City, California
Agenda Item 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 5.02.035.
Should the City Council adopt the proposed resolution, pursuant to 5.02.040 of the
CCMC, the City Clerk shall give notice of the public hearing by causing the
Resolution of Intention to be published at least 10 days prior to the date of the
hearing. The public hearing is scheduled for July 23, 2012.
FISCAL ANALYSIS:
As detailed in the Engineer’s Report, the proposed charges for Fiscal Year
2012/2013 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
MOTION:
That the City Council:
(1) Receive and File a Presentation on the Engineer’s Report; and,
(2) 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 2012/2013, and (3) setting the time, date, and
place for a Public Hearing for July 23, 2012, at 7:00 p.m. in the Mike Balkman
Council Chambers.
MEETING DATE: 07/02/12
AGENDA ITEM: Adoption of a Resolution Approving the Engineer's Report,
Declaring the Intention to Order the Annual Sewer User
Service Charge, and Setting the Date, Tirne and Place for
the Public Hearing to be Monday, July 23, 2012 at 7:00 PM
in the City Council Chambers for the Sewer User's Service
Charge
ATTACHMENTS
Pages
1 Proposed Resolution
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2 Engineer's Report
4-9
3 NBS Sewer Rate Study
10-36 6
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I RESOLUTION NO. 2012-R
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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 shalt pay its proportionate share of
the costs for operation, maintenance, repair and improvements of the City sewerage
system (the "Sewer User's 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 2012-2013, to provide for the
costs and expenses necessary for the operation, maintenance, repair and improvements of
the City sewerage system; and
WHEREAS, the Engineer's Report has been prepared and filed with the City
Clerk and submitted to the City Council in accordance with CCMC §5.02.0353; and
WHEREAS, the City Council has carefully examined and reviewed the
Engineer's Report as presented and is preliminary satisfied with the proposed report, each
and all of the budget items and documents as set forth therein and is satisfied that the levy
amounts, on a preliminary basis, have been allocated so that each parcel of property shall
pay its proportionate share of the costs for operation, maintenance, repair and
improvements of the City sewerage system as set forth in the Engineers Report.
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.
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1 I
NOW, THEREFORE the City Council of the City of Culver City, DOES
2 HEREBY RESOLVE as follows:
3
1. 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
6 formulas used to determine the sewer user service charges for the parcels, is hereby
7
approved on a preliminary basis and is on file in the Office of the City Clerk open for public
9 inspection.
10
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
13 fiscal year commencing July 1 7 2012 and ending June 30, 2013. The operation,
14
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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22
3. The Engineer's Report, as preliminarily approved by the City Council,
23 is on file with the City Clerk and open for public inspection. Reference is made to the
24 Engineers 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- CAROL A. SCHWAB, City Attorney
4. The maximum assessment is not proposed to increase from the
previous year above that previously approved by the City Council (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
6
July 23, 2012 at 7:00pm or as soon thereafter as the mailer may be heard. All interested
7
8 persons, prior to the conclusion of the hearing, shall be afforded the opportunity to hear
9 and be heard. The City Council shall consider all oral statements or written communication
10 made or filed by any interested person.
11
6. The City Clerk is hereby directed to give notice of the public hearing by
12 causing the resolution of intention, or summary thereof, to be published at least ten days
13
prior to the date set for public hearing, as provided in CC/VIC §5.02.040.
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ANDREW WEISSMAN , Mayor
City of Culver City, California
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21 ATTEST:
22
23 MARTIN R. COLE, City Clerk
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Al2-00515
APPROVED AND ADOPTED this day of
2012.
-3- PlEISIJC. WORKS. DEPARTM1 -
9770 CULVER BOULEVARD, 2ND FLOOR
CULVER CITY, CALIFORNIA 90232-0507
CHARLES D. HERBERTSON
Phone (310) 253-5600
Public Works Director/City Engineer
FAX (310) 253-5626
ENGINEER'S REPORT
ON THE ANNUAL LEVY
2012-2013
SEWER USER'S SERVICE CHARGE
IN THE CITY OF CULVER CITY UNDER THE
PROVISIONS
OF CHAPTER 5.02 OF THE CODE OF THE CITY OF
CULVER CITY, CALIFORNIA
FILED with the City Clerk
on June 28, 2012
PRESENTED to the City Council
and APPROVED by Resolution
No. 2012-R , adopted by said
City Council on July 2, 2012
and thereafter filed in the
Office of the City Clerk
Martin Cole
City Clerk
City of Culver City TO: The Honorable Mayor and Members of the City Council
FROM: Charles D. Herbertson, Public Works Director and City Engineer
CITY ENGINEER'S REPORT FOR SEWER USER'S SERVICE CHARGES FOR
FISCAL YEAR 2012-13
Charles D. Herbertson RCE 46658
Public Works Director and City Engineer
1.0 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 and services 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 Recovery 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 Culver
City's contractual relationship with the City of Los Angeles for wastewater treatment at
the Hyperion Treatment Facility (Hyperion), Culver City (City) is also required to recover
from each wastewater user their proportionate share of the costs incurred for
wastewater collection capital improvements within Culver City, wastewater system
operation and maintenance, City of Los Angeles capital improvements for conveyance
to Hyperion and operation and maintenance at Hyperion. Accordingly, Culver City
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 County Auditor-Controller's offices, 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.
In Fiscal Year 2003-2004 the City Council approved an update to the Sewer User's
Service Charges (SUSC) structures and billing formulas. 2.0 Discussion
As it has been 9 years since the last update and due to several concerns expressed by
certain property owners regarding the existing sewer formulas, the City Council
approved staffs recommendation to enter into a contract with NBS to conduct a rate
study of the current SUSC. The study has been completed and includes
recommendations that will improve and best meet the City's goal of fairly and equitably
collecting the annual sewer revenue requirements.
The first part of the Study contains a proposed five-year financial plan for the sewer
enterprise funds in order to meet recommended operating, capital, and debt reserve
balances and to adequately fund the City's proposed capital improvement program.
The current unreserved cash balance is $17.2 million, although most of this will be
spent on capital improvement projects over the next four years.
The new targets for reserve balances recommended by NBS are as follows:
1. Operating Reserve — 25% or 90 days of operating and maintenance
expenses.
2. Capital Rehabilitation and Replacement Reserve — 3% of system net
assets. The net assets is based on the 2010/11 CAFR, plus capital asset
additions and annual depreciation adjustments, it is estimated that the
City's Net Asset value of the sewer system is approximately $41.6 million.
3. Debt Reserve the maximum annual debt service payment, as specified
by the bond covenants.
These recommended targets for reserve balances equate to approximately $4.5 million.
The capital improvement program is proposed to total $13.8 million in the five-year
financial plan. This information was provided to NBS from City staff. Staff also provided
NBS the projected charges by the City of Los Angeles, Culver City personnel costs, and
administration and consultants expenses.
Based on the aforementioned recommended targets for reserve balances, proposed
capital improvement program, and other expenses, the Study recommends 4% rate
increases in each of the next three years, (Fiscal Years 2013/14 through 2015116). At
the end of the 5-year plan, the unreserved cash balance is projected to be
approximately $4.5 million which matches the recommended reserve balance
The second part of the Study was a cost-of-service analysis. The purpose of this
analysis is to equitably allocate the sewer costs to each customer class. The process
includes two steps, first classifying the four types of costs (volume, BOD, SS, and
number of accounts) and then allocating them based on specific factors for each type of
cost. The Study contains several Exhibits that show how this is calculated.
The results of this exercise show that the revenue requirements change in each of the
customer classes. For example an additional 11c/0 of the revenue should come from
single family customers. It also shows a reduction of 13% of the revenue from the
commercial/restaurants customer class. The following table summarizes the cost-of-service analysis revenue requirements from
each customer class for Fiscal Year 2012-2013:
Customer Class
Code
Commodity Charge
101 Single-Family
102 Multi-Family
200 Commercial/Business:
300 Commercial/Restaurants:
400 Institutional:
600 Special Users
+11% increase
-1% reduction
-2% reduction
-13% reduction
-4% reduction
-8% reduction
The third part of the study was a rate design analysis, which evaluated how the revenue
requirements should be collected from base charges vs. commodity rates. This part of
the study looked at all the sewer enterprise fund expenses and determined which ones
are fixed costs (base charges) and variable costs (i.e. commodity charges). Base
charges should be used to recover costs such as personnel costs, capital improvement
costs, office expenses, and most of the administrative costs and consultant charges.
Commodity charges should be used to recover what the City pays to the City of Los
Angeles for wastewater treatment-related costs, utilities at the seven sewer pump
stations, and some of administrative and consultant charges. The study determined
that approximately 60% of the sewer utility costs are fixed and 40% are variable.
Therefore, fixed charges (base charges) should collect 60% of the sewer rate revenue,
and commodity charges should collect 40%.
This proposed change will improve the stability of the revenue amount because if
overall water consumption is lower than the previous year, only the revenue collected
from the commodity charge would be lower. Water consumption has been significantly
lower these past several years due to a combination of factors such as water
conservation and economic slowdown as shown in the following table:
2006 calendar year 2,435,491 HCF consumption
and not irrigation
$8,683,340 sewer revenue
2007 2,451,378 HCF $8,668,401
2008 2,284,560 HCF $8,104,502
2009 2,285,866 HCF $8,107,837
2010 2,062,720 HCF $7,544,661 As a result, with no changes to the rates since 2007, sewer revenue has decreased by
over $1 million.
At the time of the writing of this report, Staff received the water consumption data for
2011. A preliminary review indicates that the water consumption is nearly the same as
it was in 2010. It is important to note that while conducting the study, NBS relied on the
2010 water consumption numbers and revenue numbers.
3.0 Recommendation
Staff recommends that:
1.) Only rate reductions be approved for the 2012-13 tax rolls.
Customer Class
Code
Commodity Charge
102 Multi-Family
200 Commercial/Business:
300 Commercial/Restaurants:
400 Institutional:
600 Special Users
-1% reduction
-2% reduction
-13% reduction
-4% reduction
-8% reduction
It is too late now to recommend an 11% increase to the single family residence rates
because the City is required to meet the Proposition 218 requirements of a minimum 45
day notice of the Public Hearing and submit the sewer charges to the County
Assessor's office by their August 10 deadline. Staff proposes that the 11% increase be
gradually implemented over a three-year period, beginning in 2013-14. This is in
addition to the 4% rate increases for all customer classes beginning next year (2013-
14).
2.) Residential customers can request alternative credits for landscape irrigation in two
ways: I) by installing a separate water meter for landscaping which will not be
assessed sewer charges on the tax bill, or ii) prove by submitting calculations and
evidence that the percentage reduction in the tabled formula is not adequate.
3.) Continue to use Los Angeles Auditor-Controller property tax roll for SUSC billing
purposes for FY 2012-2013 as it eliminates costly billing systems, additional staff,
and minimizes bad debt. Proposed SUSC Rates for 2012-2013
Customer Class
Code
Base Charge Commodity Charge
102 Multi-Family $ 41.80 + (W x $3.80)
101 Single Family $ 42.32 + (0.58W x $3.85)
200 Commercial/Business: $ 41.37 + (W x $3.76)
300 Commercial/Restaurants: $ 36.89 + (VV x $6.65)
400 Institutional: $ 40.50 + (W x $3.59)
500 School/Public: $ 42.32 + (W x $3.26)
600 Special Users
601 $ 39.11 + (W x $3.79)
602 $ 39.11 + (W x $4.94)
603 $ 39.11 + (W x $4.94)
604 $ 39.11 + (W x $3.47)
605 $ 39.11 + (W x $2.97)
606 $ 39.11 + (W x $4.94)
607 $ 39.03 + (W x $4.55)
609 $ 39.10 + (VV x $3.56)
610 $ 39.11
+
(\/11 x $0.71)
612 $ 39.12 + (VV x $0.36)
613 $ 39.11 + (W x $0.36)
614 $ 39.09 + (W x $0.36)
615 $ 39.12 + (W x $3.02)
W=Annual Water Consumption in HCF
Unit is a resident dwelling unit. NBS
,
helping oornmonEties
fund tomorrow
870 Market Street, Suite 1223
San Francisco, CA 94102
Toll free: 800.434,8349
nbsgov.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 (AVUWA) 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
Prepared by NBS — June 26,2012
Page 1
10 Exhibit 1. Primary Components of a Rate Study
1. Financial
Plan/Revenue
Requirements
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' 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 $ 8,423,082 $ 8,115,222
5 M.5004
916,584 916,584
0014 AUP:
4.00% 0.00%
12.49%
12.49%
125A
293,626
' 'rjKatikg
198,998
5 If
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 2015116).
Exhibit 2. Summary of Five-Year Revenue Requirements and Rate Increases
Summary of Sources and Uses of Funds and
Net Revenue Requirements
Budget
Projected
FY 2012/13
PY 2013/14 FY 2014115 FY 2015/16 FY 2016117
Sources of Sewer Funds
Rate Revenue Under Prevailing Rates
Industrial Waste Inspection Fees
Interest Earnings
Total Sources of Funds
$ 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
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 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
Uses of Sewer Funds
Operating Expenses
Debt Service
Rate-Funded Capital Expenses
Total Use of Funds
S46). 1.4 " rib:Wie
Addilional Revenue from Rate Increases
$ s.0032
895.,222 '
7,465,275 $ 7,815,605 $ 7.699,069
Projected Annual Rate Increase 0.00% 4.00%
4.00%
Cumulative Rate Increases 0.00% 4.009,
6. 1Er
' .04t0 -09.4,1Re IPP:10.41 7y193, 275 S 7,5000 - 7,47$,P,69
1. Total Use of Funds less Industrial Water Inspection Fees and Interest Earnings. This is the annual amount needed from sewer 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 2013114 FY 2014/15 FY 2015/16
$ 26,472 $
Sewer Main Rehabilitation Project $ 3,000,000
Sewer Main Point Repair, Manhole Rehabilitation, and Sewer Video $ 100,000
Sewer Pump Stations Improvement P-521 $ 100,000
Jasmine Second Force Main Project $ 100,000
Overland pipeline diversion (Construction) $ 500,000
Hayden second force main Project $ 100,000
2nd force main Braddock connection to Los Angeles $ 150,000
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
$
$ 100,000 $ 100,000
$ 200,000 $ 100,000
$ 3,000,000 $
$ 3,000,000
$ 100,000
$ 100,000
$ 3,000,000
Total: Project tosts
-
ablo;,#t abwocio
*290.409 $_ 3,20030'
Sewer Rate Study — City of Culver City
Page 3
Prepared by NBS — June 26, 2012 MEM Ending Cash
Balance, All
Reserves
-Recommended
Tanget Reserve
Balance
• 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 Rind. Balance's and Budget Projected
Recommended Reserve Targets
FY 2012/13 FY 2013/14 FY204/15. FY 2015116 FY 2016117
Operating Reserve
Beginning Balance $ 1,479,650 $ 1,465,000 $ 1,503,683 $ 1,524,000 $ 1,578,163
Recommended Minimum Target 1,465,000 1,553,000 1,524,000 1,583,000 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 $ 1,808,838 $ 1,608,838 $ 1,608,838 $ 1,608,838
Recommended Minimum Target
1,608,838 1,608838 1,608,838 1,609,838 1,608,838
1 otax*dOl'illit'9 fkiNi14
$ 1746:2r64,1 $- n,41 'Ai's.' ,$, , ,4,9R,aol lj'7, ;:' - 66.,-461 : $ 4197;0040:
totOj'IP6c.oinfr*dOC
,,, m-igi ,-'' -g
$ 4,,,,33.,$38 -- , c4,471,836 'S ' 4492th 3§' r '$ - 4.601 re38 $ 4,406,:tOki
Exhibit 5. Ending Cash Balance Compared to Recommended Reserve Target
$14,000,000
$12,000,000
$10,000,000
$13,000,000
$8 0,000,000
$4,000,000
$2,000,000
NBS' 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 assets2 .
• 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 (SOD)
137.
COS Rev,
Req't
(TSS)
12%
$3,319 I $258,430
$04035
.
$84,956 I $71,316
0;176;031n $1,:1
3.080, I
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 BUD 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
costa Service Alloca1Cd C9sts - 2012
Net Revenue Requirement by Class
% of COS
Rev, Reg,
g Present
Rates
Percent
Difference
284%
38.2%
19.1%
8.4%
2.3%
0.1%
5.5%
101 Single-Family
102 Multi-Family
200 CommerciallBusiness
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
600 Commercial/Hotels
$544,013
$587,925
$102,998
$15,649
$5,406
$1,043
$962013
$1,522,095
$888,087
$225,777
$113,140
$7,444
$246,676
$390,290
$227,720
$188,523
$37,194
$1,273
$239,608
$379,107
$221,195
$202,890
$16,011
$1,053
$1,992,310
$2,879,417
$1,440,000
$632,840
$171,751
$10,814
$418,020
$7. 4: 5 .10 1
$1,788,571
$2,915,211
$1,472,993
$725,973
$179,491
$10,594
$452,318
%
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
Prepared by NBS June 26,2012
Page 5 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. ls113S' 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
1 5
Prepared by NBS — June 26, 2012 Fiscal Year 2011-12 Sewer Rates and Rat
_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
607 Special
608 Special
609 Special
610 Special
612 Special
613 Special
614 Special
$42.3
$42.3
$42.3
$42,3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
$42.3
Exhibit 7. Existing and Proposed Sewer Rates and Rate Revenue Reflecting COS and Rate Design Adjustments
Revenue
-12 Sewer
and New 2012-13 Sewer Rates Incorporating COS Revenue Requirements
Rates 2011-12 Annual Rate Revenue 201243 Adjusted Sewer Rates J 2012-13 Annual Rate Revenue
.,.. _k_ _
_
ryes
2
2
Commodity Rate
i$/hcf)
$3.85
Base Charges
($/yr)
$242,748
$469,413
Commodity Rate
($/hcf)
$1,545,823
Total Annual
Revenue
$1,788,571
Base Charges
(Styr}
$42.32
Commodity Rate
($/hcf)
$3.85
' Base Charges
{$/yr} j
$242,748
Commodity Rate Total Annual
($1hcf) Revenue
$1,545,823 $1 788 571
$2,415,767 $2879417
$3.85
$3.85
$2,445,798 $2,915,211 $41,80 $3.80
$3.76
$463,650
$45,960 $1,427,033 $1 472 993 $41.37 $44,930 $1,395,070 $1,440,000
2
2
$7.63
$3.75
$6,983
$2,412
$718,990
$177,079
$10,129
$725,973
$179,491
$36.89
$40.50
$42,32
$39.11
$6.65
$3.59
$3.26
$6,087 $626,753 $632,840
$2,308
$466
$235
$169,443 $171,751
$10,129 $10,594
$3.26 $466 $10,594
2 $4.10 $254 $67,310 $67,564 $3.79 $62,206 $62,441
a
2
_$5.35
$5.35
$3.75
$3,21
$5.35
$85
$42
$85
$212
$42
$70,674 $70,758
$65,425
$39.11 $4.94 $78
$39
_ $78
$196
$39
$65,315 $65,393
$60,425 $60,464
$85,382 $39.11 $4.94
2
2
2
$75,585 $75,970 $39.11 $3.47 $70,131 $70,209
$74,093
$88,815
$74,305
$88,858
$39.11
$39.11
$2.97
$4.94
$68,475 $68,671
$82,08,1 $82,120 _
2 $3.85 $42 $189 $231 $39.03 . $3.55
- -
$39
,..._
$174 $213
2 $4.93 $42 $1,385
$2,360
$885
$1,428 $39.10 $4,55 $39
$235
-
$1,280 $1,319
$3.85
$0.77
$254
$42
$2,614
$927
$39.11 $3.56 $2,181 $2,416
$39.12
$39.11
$39.09
$39.12
$0.71 $39
$274
$818 $857
$588 $862
2
2
$0.39 $296 $636 $933 $0,36
$0.36
$0,39 $42
$42
$613
$2,609
$655
$39
$39
$566 $605
$3.27
$2,652 $3.02
$2,412 52.451
-
$7...5- 4kfti
,
iiirrAMENEra
- - --
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
Page 7 Exhibit 8 summarizes the proposed sewer rates for 2013-14 through 2015-16 that incorporate the cost-of-
service based changes necessary to accomplish the following objectives:
• Phase-in cost-of-service based rate increases to two customer classes (single-family and
Schools/Public accounts) over a three-year period.
• Increase all rates by 4% annually for 2013-14 through 2015-16, as indicated by the financial plan
previously shown in Exhibit 2.
• Adjust sewer rates so they collect 60% of the revenue required from base charges and 40% from
commodity rates.
Exhibit 8. Proposed Sewer Rates for 2013-14 through 2015-16
Summary of Proposed 201344 Through
including Rate COS-Adjusted Allocations _
201646 Sewer
to Base
--
Rates Incorporating COS Revenue Requirements
Charges and Commodity Rat&
Customer Class
101 Single-Family
2013-14 2014-15
Commodity
Rates ($/hcf)
, $1.21
i 2015-16
Base Commodity
Charges ($/y0 Rates (.$filc
$254.24 $1.17
Base
Charges ($4er)
$264.32
Base Commodity
Charges ($4ir) Rates ($7/7c5
$274.80 $1.25
102 Mulli-Famil? $202.97 $1.17 $211.48 $1.21 $220.42 $125
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 $274.60 J $7.07
400 Institutional $254.24 $3.48 $264.32 $3.61 $274.80 $3.76
500 Schools/Public $254.24 $2.67 $264.32 $2.78 $274,80
601 Special $254.24 $3.86 $264,32 $4.02 $279.80 $4.18
602 Special $254.24 $5.11 $264,32 $5.31 $274.80 $5.53
603 Special $254.24 $5.12 $264.32 . $5.33 $274.80 $5.54
604 Special $254.24
$254.24
$3.58 $264.32
$264.32
$3.73
$3.16
$274.80 $3.88
605 Special $3.04 $274.80 $3.29
606 Special $254.24 ...4 $5.13
$0.00
$264.32 $5.33
$0,00
$274.80 $5.55_
607 Special $222.00 I $230.00 $240.00 $0.00
608 Special $25924 $3.98 $264.32 $4.14 $274.80 $4.30
609 Special $254.24 $1,61 $264.32 $1.68 $274.80 $1.74
610 Special $254.24 $0.55 $264.32 $0.58 $274.80 $0.60
612 Special $128.07 $0.00 $133.19 $0.00 $138.52 $0.00
613 Special
614 S.edal
$254.24 $024 $264.32 $0.25 $274.801. $0.26
$254.24 $2.88 $264.32 $2.99
q
$274.80 l $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 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.
Sewer Rate Study City of Culver City
Prepared by NBS -June 26, 2012
Page 8
11 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 N BS — June 26, 2012 SEWER RATE STUDY APPENDIX A
SELECTED TABLES FROM THE FINANCIAL PLAN
AND REVENUE REQUIREMENTS ANALYSIS RATE REVENUE REQUIREMENTS SUMMARY
Projected
FY2013114 FY20141'15
FY2015/16
FY2016/17
FT2017/18.
FY 2018119
FY2019/20
FY2020/21
FY 2021/22
Budget
FY2012/13
Sources of Sewer Funds
Rate Revenue Under Prevailing Rates
Industrial Waste Inspection Fees
Interest Earnings
Total Sources of Funds
$ 7,340,661 $ 7,340,661
70,000 70,000
202,000 150,000
$ 7,612,661 $ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,660,661
$ 7,340,661 $ 7,340,661
70,000 70,000
150,000 150,000
$ 7,560,661 $ 7,560,661
$ 7,340,661
70,00Q
150,000
$ 7,660,661
$ 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
$ 7,660,661
$ 7,340,661
70,000
150,000
$ 7,660,661
Uses of Sewer Funds
Operating Evenses:
Personnel SeNces
Maintenance and Operations
SubtotaLOperating Expenses
Other Expenditures:
EAsting Debt Service
New Debt Service
Rate-Funded Capital ENsonses
Total Uses of Sewer Funds
$ 1,367,370 $ 1,394,717 $ 1,422,612 $ 1,451,064 $ 1,480,085 $ 1,509,687 $ 1,539,881 $ 1,570,678 $ 1,602,092 $ 1,634,134
4,491,105
4,815,687
4,673,457
4,881,332
5,029,487
5,182,625
5,340,929
5,504,585
5,673,787
5,848,738
$ 5,858,475 $ 6,210,405 $ 6,096,069 $ 6,332,396 $ 6,509,572 $ 6,692,312 $ 6,880,810 $ 7,075,263 $ 7,275,879 $ 7,482,872
$ 1,606,800 $ 1,605,200 $ 1,603,000 $ 1,608,300 $ 1,605,650 $ 1,606,213 $ 1,607,213 $ 1,604,088 5 1,603,838 $ 1,605,338
482,386
$ 7,465,276 1 $ 7,816,605 1 $ 7,699,069 1 $ 8,423,082 $ 8,115,222 1 $ 8,298,525 1 $ 8,488,022 1 $ 8,679,351 I $ 8,879,716 1$ 9,088,209
Forecasted Surplus (Deficiency) before Rate Increase
$ 147,386 $ (264,944)1 $ (138,408) $ (862,421) $ (554,661) $ (737,864) $ (927,361) $ (1,118,690) $ (1,319,066) $ (1,527,648)
Total Revenue Deficiency
increase/(Decrease) to Reserves
Less: Revenue from Prior Rate Increases
Net Revenue Deficiency
$ 254,944
2,621
$
$ 138,408
$ 276,824
$ (138,408)
$ 862,421
$ 87,109
$ (5913,998)
$ 554,561
-
$ (554,561)
737,864
(737,864)
$ 927,361
-
$ (916,584)
$ 1,118,690 $ 1,319,056
5 (916,584) $ (1,081,729)
$ 1,527,548
-
$ (1,334,401)
$ 267,666 276,824 $ 330,532 $ $ 10,777 $ 202,105 $ 237,326 $ 193,147
Calculation of Required Rafe increases
Rate Revenue with No Rate Increase
plus: Revenue from Prior Rate Increases
Total Rate Revenue Before Rate Increase
PiOje400 AnntiiiiiRate In-Crease
Cumulative Increase from Annual Rate Increases
5 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661
- - 293,626 598,998 916,584 916 584 916.584
$ 7,340,661 $ 7,340.661 7,634,287 $ 7,939 659 $ 6,257,245 $ 8,257,245 $ 8.257.245
,
4,O0 .0.00% MO'
0.00% 4.00% 8.16% /2.49% 12.49% 12.49% 12.49%
$ 7,340,661 $ 7,340,661 $ 7,340,661
916.584
1,081,729
1,334.401
$ 8.257.245 $ 13,422,390 $ 8,675,062
1,00 14 14.4*
14.74%
18.18%
20,54%
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
$ 7,702,828
38,683
1.02
$ 8,008,222
460,590
1.29
$ 8,325,831
54,163
1,33
$ 8,325,831
362,023
1.23
$ 8,325,831
178,720
1.11
5 8,325,831 $ 8,492,348
(10,777) (36,960)
0.99 0.98
$ 8,747,118
15,345
1.01
$ 8,922,061
(19, 1646)
0.99
1. In this iteration of the analysis, the rate increases targets total cash reserve balance of $4.5 million at the end of FY 2015/16.
2, Refer to Cost of Service Analysis for detailed calculations.
Appendix A
Sewer Rate Study - City of Culver City
Prepared by N BS - June 26, 2012
A-1 Budget
Projected
WiEllIZLEMIIMMEUINLI giECBERii IMAKIWEIN FY2018/19 FY2019/20
INNEEMEMNIMEMME
4,076,472 3,300,000 3,200,000 2,717,614
- - 482.386
$ 4,076,472 $ 3,300,000 $ 3,200,000 $ 3,200,000
1 $ 4,076,472 $ 3,300,000 $ 3,200,000 $ 3,200,000
$ 4,076,472 $ 3,300,000 $ 3,200,000 $ 3,200,000
SOURCES & USES OF FUNDS FOR
EXISTING CAPITAL NEEDS
Sources of Capital Funds
Grants
State Revolving Fund Loan
Revenue Bond
Surplus Capital Reserve
Rate Revenue
Total Sourtes of Capital Funds
Uses of Capital Funds
Funding of Capital Expenditures (Existing Needs)
Total Uses of Capital Funds
CaPjfaMtlfdlng StirOlthelpetiOje:ilt0
Appendix A
A-2
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012 26,472
- I $
100,000 $
100,000
200,000 $
100,000
_ $
- $
3,000,000 $
$ 3,000,000
- $
100,000
100,000
$ 3,000,000
3,000,000
100,000
100,000
100,000
500,000
100,000
150,000
CAPITAL IMPROVEMENT PROGRAM
FY2012/1.6 FY2013/14 FY2014/15 FY2015/16
Sewer Main Rehabilitation Project
Sewer Main Point Repair, Manhole Rehabilitation, and Sewer Video
Sewer Pum p 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
Total: Project Costs
3,-300,000 3,20 3,20(til
Appendix A
A-3
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012 SUMMARY OF CASH ACTIVITY
Total Estimated13egInning Cash
Budget Projected .
FY2021/22 FY2012/13
$ 17,190,264
FY 2013/14 FY2014/15 1FY2015/16 • FY2016117 FY2017/18 FY2018/19 FY2019/20 FY2(120/21
Operating Reserve
Beginning Reserve Balance 1
Plus: Net Cash Flow (After Rate Increases)
Plus: Transfer of Debt Reserve Surplus
Less: Transfers Duff° Capital Replacement Reserve
$ 1,479,650
147,386
1
(162,036)
$ 1,465,000
38,683
-
-
$ 1,503,683
460,590
-
(440,273)
$ 1,524,000
54,163
-
-
$ 1,578,163
362,423
-
(313,186)
$ 1,627,000
178,720
-
(132,720)
$ 1,673,000
(10,777)
-
$ 1,662,223
(36,960)
-
$ 1,625,263
15,345
-
-
$ 1,640,608
(19,646)
-
-
Ending Operating Reserve Balance
Target Ending Balance (25% or 90 day, nf O&M)
— _ .„,____ „..,.
o'poiat- iiikitt4elveatP107 (100* 11.)
$ 1,465,000
$ 1.465,000
$'
$ 1,503,683
5 1,553,000
_.,.,
=MOO)
$ 1,624,000
$ 1,524,000
, , .,.
$ 1,578,163
$ 1,583,000,
Orr)
$ 1,627,000
$ 1,627 000
-
$ 1,673,000
:P 1,67 000
$ -
$ 1,662,223
$ 1,720,000
$ 7 (5T,ii-7,1
$ 1,625,263
$ 1;769.000
s 1400 )
$ 1,640,608
$ 1.819,000
$ 'f1 tait
$ 1,620,962
$ _ 1 ,871!)00
ri .' • 0040
Capital Rehab & Replacement Reserve
Beginning Reserve Balance I
Plus: Net Debt Proceeds
Plus: Transfer of Operating Reserve Surplus
Less: Use of Reserves for Capital Projects
$ 14,101,776
-
162,036
(4,076,472)
$ 10,187,340
-
.
(3,300,000)
1 6,887,340
-
440,273
(3200,000)
$ 4,127,614
-
-
(2,717,614)
$ 1,410,000
313,186
-
$ 1,723,186
-
132,720
-
$ 1,855,907
.
-
$ 1,855,907
-
-
-
$ 1,855,907
-
-
-
$ 1,855,907
-
-
-
Ending Repair & Replacement Balance
Target Ending Balance (3% cy-Assets)
$ 10,187,340
$ 1,250,000
$ 8:937340
$ 1,608,838
.
(1)
$ 6,887,340
$ 1,310,000
$T-.5477, -344C'
$ 1,608,838
, -
$ 4,127,614
$ 1,360.000
,-- _
$ 2, 7 ,.,' 4
$ 1,608,835
-
-
$ 1,410,000
$ 1.410.000
$
$ 1,608,838
-
-
$ 1,723,186
$ 1,370.000
$ 1,855,907
$ 1,330,000
$ 1,855,907
$ 1.290.000
$ 1,855,907
$ 1,250.000
$05,9Q7
$ 1,608,838
-
-
$ 1,865,907
$ 1.210,000
. 641.11.1iiT
$ 1,698,838
-
-
$ 1,865,907
5 1,180.000
— tii5VitTi
1,608,838
-
CW'i- ialti.646:4 Re MC' ent eur Ats rieficrt
Debt Reserve
Beginning Reserve Balance 1
Plus: Reserve Funding from New Debt Obligations
Less: Transfer of Surplus to Operating Reserve
$ 43 -180
$ 1,608,838
-
-
:_ 2 4 : 0. 7
$ 1,608,838
-
-
'.ii.555,907
$ 1,608,838
-
Ending Debt Reserve Balance
Target Friellag Balance _.
Debt Reserve $4,10,i0tiiiebit,)
$ 1,608;838
.9 1.608.838
.
$ 1,608,838
$ 1,608,838
-
$1,608,838
St 1,608,838
s
$ 1,608,838
$ 1,608,838
-
$ 1,608,838
$ 1,608.838
.:., ,
$ 1,608,838
$ 1,608.838
-
$ 1,608,838
$ 1.608.839
$ 1,608,838
$ 1 608 838
$ 1,608,838
$ 1 608 838
$ 1,608,838
g' 1 606846
.4
Debt Cove r age Ratio (After Rate (me re ase)
---1 'Err-
Recommended Target Ending E, ,, 1 a FIG e - All Reserves
1.99
4,323,838
/ ,
—
$ 4,471,838
/ 9
$ 4,422,338
-
1 3
$ 4,401,338
,
4 ,6C.18,338
1.11
4,611,838
0.99
$ 4,618,838
'-
0.93
4 627,838
1.01
4,637,833
0 99
4,659,838
-
Total Minimum Reserves Recommended in this study: 25%, or 90 days of 08,11/1expenses, plus 3% of Net Assets, plus the debt resolve requirement which is equal to the maximum annual debt service payment.
For reference purposes, the t otal 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, ills 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 $1,608,638 has been assigned as the beginning Deb tReserve 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 N BS — June 26, 2012 SEWER RATE STUDY APPENDIX B
SELECTED TABLES FROM THE COST-OF-SERVICE ANALYSIS
'2_uk 338,618 $ 126,982
10,090 $ 3,750
6,365 $ 2,387
5,105 $ 1,914
26,339 $ 9,877
53,886 $ 26207
7,412 $ 2,750
27,714 $ 10,393
60,462 $ 22,673
2,080 $ 780
6,389 $ 2,395
1,018 $ 382
200 $ 75
-
:1.360 6 510
68,400
27,279
9,000
Customer
Actual
126,982 $ 253,963
3,750 $ 7,500
2,387 $ 4,774
1,914 $ 3,529
9,877 $ 19.754
20,207 $ 40,415
2,780 $ 5,559
16393 $ 20786
22,673 $ 45,346
780 $ 1,560
2,396 $ 4,792
382 $ 764
75 $ 150
510 $ 1 ,020
205,106 $
2,000
10,000
7,100
7,600
3,031
1,000
6,690
3,400
3,500
2,000
26,400
28,500
36,000
3,341
TotatReve nue
Requirements
846,544
25,000
15,912
12,763
65,847
134715
16530
69,286
151,154
5,200
15,973
2,548
500
3,400
1,000
2,000
10,000
7,100
76,000
30,310
10,000
6,690
3,400
3,500
2,000
2,272,000
88,000
95,000
360,000
33,412
400
733,316
7,6130
28,300
43,900
21,613
655.484
$ 1,367,370 I 8 546,948 I 1 205,106
1,272,320
35,200
38,000
324,000
30,071
360
659,964
6,912
25,470
21,950
2,161
65,548
522,560
13,200
14,250
477,120
13,200
14,250
4,491,105 I $ 2,586,656 3 550,010 $ 504,570 $ 849,869
Basis of Classification
311'0,
010 00
3111011]
3 0 1)
YrA4r. ,
0.111 .01 n
- OPF4=
Less Non-Rate Revenues
(less) Industrial Waste Inspection Fees
least hterest Eaminas
NET.!EyplyEeEquiaennewrs .
Allocation of Revenue koluiremenis
(70,0001 $ (37,442)
(202,000) $ (105,047)
7,193,275 $ 3,791,515 8' .1,121.,757 5 1,079,425 rj,201,577
900% 63% 16% 15% 17%
(9,022)
$ (26,036)
(8,480)1 $ (15056)
(24,470) $ (43,448
,53'k
13%"
Classification of Expenses (cont.)
Adjustments to Classification of Expenses
Adjustment for Current Rate Level: (VOL) MOO) {TSS)
2013 Net Revenue Requirement
Current Level of Rate Revenue
Adjustment Factor
Adjusted Net *Venue - Oe
1,170-Ad
1,131.1.flg
=2%3
54
1. Estimated Volumetric, BOD/TSS strength factors are from the City's 2003/04 Engineer's Report (Table 4).
TOW Operating Expenses 5,858,475 $ 3,133,6041$ 755,116 $ 709,676 I 1,260,050
Allocation offterating Expenses 100% 63% 13% 12%i - 22%
ON%
2009 Series A Revenue Bonds:
TAtaist:Sior0VtiW
1 606,800 5
4405,(275
863,400 5 401, 71)0 1 $ 4D1 , 00
37.
02 1141L1111$4,1
$,,„ 1 Alt
50.5W :75W.
53% :154 17%
'0°A.
Classification of Expenses
Budget Categories
Regular Salaries
Part-Time Salaries
Overtime Pay
Deferred Compensation
Social Security
Retirement
Deterred Retirement
Workers Compensation
Group Insurance
Retiree Hearth Savings
Retiree Insurance
Retiree Medical Pre-funding
State Disability Insurer -ice
Health Benefits
Longevity Pay
Uniform Allowance
Total personnel Services
Oren& KriiiiCalbrrs
Office Expense
Printing & Binding
Postage & Delivery
Communications
Utilities
Departmental Special Supplies
Small Tools Br Equipment
Training & Education
Conferences & Conventions'
Special Events & Meetings
Memberships & Dues
Contributions' to Agencies (1)
R&M - Equipment
Garage Expenses
Rental of Land -
Amarlization of Equipment
tiled Services - DIA/ Certificate
Med Services - Special Exam ins
Refuse Disp Services Other
Other Contractual Services
Insurance Premiums - Other
Liability Reserve Charge
Depreciation
Improvements other than Bldg.
Auto - Rolling Stock & Equipment
FT Equipment - Hardware
Administrative Chames
Total Maintenance & Operations
B-1 .2.5
Appendix B
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 Allocation of Revenue Requirements
Custome r Classes
Classification Components
Net Revenue
Requirements .'
101
Single-Family
102
Mufti-Family
200
Commercial/
Business
300
Commercial/
Restaurants
400
Institutional
:500:ScboOls/
: Public
600
Commercial!
Hotels
Volume
Treatment
- BOD
- TSS
Customer-Related
Direct Assignment
Net:Revenue :R .0
$962,013
$246,676
$239,608
$544,013
$0
$1,522,095
$390,290
$379,107
$587,925
$0
:it -S2,879;2
$888,087
$227,720
$221,195
$102,998
$0
$225,777
$113,140
$188,523
$202,890
$15,649
$0
2.840.]
$7,444
$1,273
$1,053
$1,043
$0
814
3,976,986
$ 1,176,630
$ 1,131,180
$ 1,260,364
7,346,1S1 Uirerne
$37,194
$16,011
$5,406
$0
317tn
$258,430
$84,956
$71,316
$3,319
$0
11 - 8164
I. These revenue requfrements have been adjusted to meet the Clty's current revenue collected from sewer rates.
Appendix 13
Sewer Rate Study — City of Culver City
Prepared by NBS —June 26, 2012 Proposed 2012-13 Sewer Rate Revenue -Base and Commodity Charges
121131=10211
Customer Data
No. of Parcels/
Dwelling Units
Adjusted 2010
Consumption
Commodity Rates
New Rate (Vic0
New Base
Charges
Commodity
Charges
Total Annual
Revenue
Target Rev, Regts 2
Current Rate
Revenue COS Rev. Regts
101 Single-Family*
5,736
102 Multi-Family
11,092
200 Commercial/Business*
1,086
300 Commercial/Restaurants*
165
400 Institutional*
57
500 Schools/Public*
11
601 Special*
$39.11
602 Special*
2
$39.11
603 Special*
1
$39.11
604 Special*
2
$39.11
605 Special*
5
$39.11
606 Special*
1
$39.11
607 Special"
1
$39.03
608 Special*
1
$39.10
609 Special*
6
$39.11
610 Special*
1
$39.12
612 Special*
7
$39.11
613 Special*
1
$39.09
614 Special"
1
$39.12
ITOtaik:
18 82
- I% of Totel
Parcels. Dwelling Units.
1. Adjusted for irrigation factors.
2. Cost-of-Senrice (COS) analysis indicates some classes should be reduced The "Target Rev. Refgs" am the lesser of Current or COS Revenue Requirement (which are highlighted in yellow).
$42.32
$41.80
$41.37
$36.89
$40.50
$42.32
401,513
635,272
370,658
94,232
47,221
3,107
$3.85
$3.80
$3.76
$6.65
$3.59
$3.26
$242,748
$463,650
$44,930
$6,087
$2,308
$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
$632,840
$171,751
$10.594
$1,788,571
$10;594
,992
$2,879,417
$1,440,000
$632,840
$171,751
-
$62,441
$65,393
$60,464
$70,209
$68,671
$82,120
$213
$1,319
$2,416
$857
$862
$605
$2,451
67,54505Th
16,417
13,210
12,221
20,236
23,082
16,601
49
281
613
1,149
1,632
1,571
798
$235
4713
$39
$78
$196
$39
$39
$39
$235
$39
$274
$39
$39
$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
*79;1531 $7',341A94
10,4' -H,6% _100 0%
$62,206
$65,315
$60,425
$70,131
$68,475
$82,081
$174
$1,280
$2,181
$818
$588
$566
$2,412
$62,441
$65,393
$60,464
$70,209
$68,671
$82,120
$213
$1,319
$2,416
$857
$862
$605
$2,451
Appendix B
B-3
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 REEram Annual Rate Revenue
Existing 2011-12 Sevver Rates and Rate Revenue
Customer Class
Base Charges
(Styr)
Commodity Base
Rate ($/hcf) Charges
Commodity
Rates
Total Annual
Revenue
101 Sin_gle-Fam ily
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools Schools/Public ublic
601 S ecial
602 Special
603 Special
604 Special
,60_5_Special
606 Special
607 Special
608 Special
609 Special
610 Special
612 Special
613 Special
614 Special
To
:4) 1
$42.32
$3.85
$42,32
$3.85
$42,32
$3.85
$42.32
$7.63
$42.32 $3.75
$42.32 $3.26
$42.32 $4.10
$42.32 $5.35
$42.32 _ $5.35
$42.32 $3,75
$42.32
$42.32 $5.35
$42.32 $3.85
$42.32 $4.93
$42.32 $3.85
$42.32
$0.77
$42.32
$0.39
$42.32
$0.39
$42.32
$3.27
L l
$1,545,823
$2,445,798
$1,427,033
$718,990
$177,079
$10,129
$254 $67,310
$85 $70,674
_$42 5,382
$85 $75,885
$212 $74,093
$42 $88,815
$42 $189
$42
$254
$42
$296
$42
$2,609
$242,748
$469,413
$45,960
$6,983
$466
$2,412
$1,788,571
$2,915,211
$1,472,993
_ $725,973
_$179,491
$10,594
$67,564
$2,652
$70,758
$65,425
$75,970
$74,305
$88,858
$231
1,385 $1,428
$2,360 $2,614
$885 $927
$636 $933
$613 $655
Appendix B
B-4
Sewer Rate Study - City of Culver City
29,
Prepared by NBS - June 26, 2012 Customer Class
Base Charges I Commodity Rate
Myr) r ($/hcf)
New 2012-13 Sewer Rates Incorporating COS Revenue Requirements
Base
Charges
101 SiNle-Family $42.32 $3.85 $242,748 $1,545,823 $1,788,571
102 Multi-Family $41.80 $3.80
$3.76
$463,650 $2,415,767 $2,879,417
$1,440,000 $44,930 $1,395,070 200 Commercial/Business $41.37
300 Commercial/Restaurants $36.89 $6.65 $6,087 $626,753 $632,840
400 Institutional $40.50 $3.59 $2,308 $169,443 $171,751
500 SchoolstPublic $42.32 $326 $466 $10,129 $10,594
601 Special $39.11 $3.79 $235 $62,206 $62,441
602 S eaal $39.11
$39.11
$4.94
$4.94
$3.47
$78 $65,315 $65,393
603 Spedal
604 Special
605 Special
$39 $60,425 $60,464
$70,209 $39.11
$39.11
$78 $70,131
$68,475 $2.97 $196 $68,671
606 S ecial $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
$39.12
$3.56
$0.71
$235
$39
$2,181
$818
$2,416
$857 610 Special
612 Special $39.11 $0.36 $588 $862
613 Soecial $39.09 $0.36 $39
0
$566 $605
614 S•ecial
All ilife( I.
1iI
ii
$39.12 $3.02
1111
ii,
i $27 4 .
$39
'
$2,412 $2,451
1
J
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 Projected Sewer Revenue Requirements -
I 0
Customer Class
-
rein
" 0 1
One•Third of COS
Total Annual '11-
Rev. req.
12 Rate Revenue Adjustment'
Ii -
....
i Total Annual Rate Revenue
1--
1
20 .13-14 , 2014-15 , 2015-16
I11111WS
101 Single-Family $1,788,571 $67,913 $1,928,027 $2,002,431 52,079,812
102 Multi-Family $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 Commercial/Restaurants
400 Institutional
$632,840 N.A. $658,154
$178,621
$684,480
$185,766
$711,859
$171,751
$10,594
N.A. $193,197
500 Schools/Public $73 $11,091 $11,532 $11,990
601 Special $62,441 MA. $64,939 $67,536 $70,238
602 Special $65,393 N.A. $68,009 $70,729 $73,558
603 Special $60,464 MA. $62,883 $65,398 $68,014
604 Special $70,209 ALA. $73,017 $75,938 $78,976
605 Special $68,671 NA $71,418 $74,275 $77,246
606 S ecial $82,120 NA , $85,405
$222
$88,821 $92,374
607 Special $213 N.A. $230 $240
608 Special $1,319
$2,416
N.A.
N.A.
ALA
$1,372
$2,513
$891
$1,427
$2,613
$927
$932
$1,484
609 Special $2,718
610 Special $857
$862
$964
612 Special N.A. $896 $970
613 S ecial $605 MA. $629 $654 $681
614 Special
r"! 1 ' Ili :ii , ' ' ;
$2,451
IFP ' '
N.A. $2,549 $2,651 $2,757
1. 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
30
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
Customer Class
1 01 Single-Family
Base
Chargest
($4er)
$254.24
Commodity
2
Rates (S.A2 CO
$1.17
$1.17
3
Total Annual Rate Revenue
From Base
Charges 1
$1,458,327
$276,106
I
From Commodity
RateS
2
J $469,700
Total Annual
Revenue 3
$1,928,027
102 Multi-Family $202.97 1,32 J
$1,221,494
$2,994,594
$1,497,600 200 Commercial/Business $254.24 $3.30
300 Commercial/Restaurants $254.24 $6.54 $41,9501 $616204 •$658,154
400 Institutional $254.24 $3.48 $14,4921 $164,129 $178,621
500 Schools/Public $254,24 $2.67 $2,7971 $8,294 $11,091
601 Special $254.24 $3.86 $1,5251 $63,414 $64,939
602 Special _ $254.24
$254,24
$254.24
$5.11
$5.12
$3.58
$508 $67,501
$254 1 $62,629
$68,009
$6-2,88-3 -
$73,017
$71,418
$85,405
$222
603 Special
604 Special $508
$1,271
$254!
$222
$72,509
$70,1471
$85,15- 11
$0
605 Special $254.24 $3.04
606 Special $254.24 $5.13
607 Special $222.00 $0.00
608 Special $254.24 $3.98 $254 $1,118 $1,372
609 Special $25424 $1.61 $1,525 $988 $2,513
610 Special $254.24 $0.55 $254 $637 $891
612 Special $128.07 $0.00 $896 $0 $896
613 Special $254.24 $024 $254 $375 $629
614 Special
. -
.". I,. h.l'h
1 1 . .1
$2.88
$254 $2,295 $2,549
ii s t O2:
, , - io , ; . nI1 - 11.1p - isiiil
."1
1 . To
, HI,
1. The base charges reflect residential classes but are adjusted to overall collect 60% of all revenues.
2. Commodity charges are individually adjusted for each customer class to meet COS revenue requirements.
3. The total rate revenue collected from each customer class are the cost-of-service (COS) revenue requirement.
4. Multi-Family base charges are 80% of Single-Family base charges based on the differences in per unit water
consumption. Multi-Family commodity rates are also adjusted to meet the revenue requirements for this class.
Appendix B
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
B-7
31 Customer Class
1 Commodity I
2 a From Base
Rates ($/ho)
Charges
From
Commodity
r 2
Rates
Total Annual
Revenue s
II 1
3•
MUM J .1 Lui
Proposed 2014-15 Sewer Rates Incorporating COS Revenue Requirements
including Rate COS Adjusted Allocations to Base Charges and Commodity Rates
101 Single-Family
102 Mu Iti-Fam ilL
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
601 Special
602 Special
603 Special
.._624_Skecia
6_05_Sp_esial
606 Special
607 Special
608 Special
609 Special
610 Special
612 Special
613 Special
614 Special
$264.32
$211.48
$264.32
$264.32
$264.32
$264.32
$264.32
$264.32
$264.32
$264.32
$264.32
$264.32
$230.00
$264.32
$264.32
$264.32
$133.19
$264.32
$264.32
$1,516,146 $486,285 $2,002,431
$2,345,6981 $768,679 $3,114,377
$287,053] $1,270,451 $1,557,504
$43,6131 $640,867' $684,480
$15,066 $170,700 $185,766
$2,90J. $11,532
$1,586 , $65,950 $67,536
$529 $70,200 $70,729
$264 $65,134 J $65,398
$529 $75,409 $75,938
$1,322 $72,953 $74,275
$264 $88,557 $88,821
$230 r $01 $230
$264 $1,163 $1,427
$1,586' $1,027 $2,613
$264 $663 $927
$932 $0 $932
$__4_ 264 1 $390 $654
$2641 $2,387
$2,651
$1.21
$1.21
$3.43
$6.80
$3.61
$2.78
$4.02
$5.31
$5.33
$3.73
$3.16
$5.33
$0.00
$4.14
$1.68
$0.58
$0.00
$0.25
$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
31
Prepared by NBS - June 26, 2012 From
Commodity
Rates 2
Total Annual
Revenue
Proposed 2015-16 Sewer Rates Incorporating
cos
Revenue Requirements
Including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates
Customer Class
101 Single-Famil
102 Multi-Earn iIy
200 Commercial/Business
300 Corn mercial/Restaurants
400 Institutional
500 Schools/Public
601 Special
602 Special
603 Special
604 Special
605 Special
606 Special
607 Special
.08 pi al
609 Special
610 Special
612 Special
613 Special
614 Special
131
I% of Tota/
$1,576,2761
$503,536L $2,079,812
$2,444,863
$794,090;
$3,238,953
$298,437
$1,321,367
$1,619,804
$45,343
$666,516 ...
$711,859
$15,664 $177,533
$193,197
$3,0231
$11,990
$1,6491 $68,5891
$70,238
$550 $73,0081
$73,558
$275' $67,7391
$682014
$5501 $78,426
$78,976
$75,872
$77,246
$92,0991 $92,374
$0' $240
$1,209i $1,484
$1,069 $2,718
$689 $964
$0 $970
....._
$406,1 $681
$275[ $2,482;
$2,757
4 39
$274.80
$1.25
$220.42
$1.25
$274.80
$3.56
$274.80
$7.07
$274.80
$3.76
$274,80
$2,89
$274.80
$4.18
$274.80
$5.53
$274.80
$5.54
$274.80
$3.88
$274.80
$3.29
$274.80
$5.55
$240.00
$0.00
$274.80
$4.30
$274.80
$1.74
$274.80
$0.60
$138.52
$0.00
$274.80
$0.26
$274.80
$3.11
$1,374
$275
$240
$275 I
11,6491
$2751.
$970
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
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
B-9
33 ALLOCATION OF OPERATING EXPENSE FORECASTh
' •
Allocation ' 'W s Allocation $ s
Fixed 1 Variable i .Fixed Variable
Pelf§QtAlVt.PrIfOe .20.1 0.
lh:f mrtAtk .*:14
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
, 4 ,
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 Exam ina 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
'Total ,itiaintenarieo,i' O êiabocs ',,q,4 491 105
:0000/
6
2009 Series A Revenue Doads. 1,606,800 1o,„, ' 1 606,600 $ -
6-rand Total: ReVenue Ohulrennent 1 74005 4,71063 2,120.0
1 This table is used only to. ovaluete the totel pereentago of costs that are fixed vs. enable r .or ••rate design purposes.
Appendix B
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
B- 10
3 14 Development of the Volume Allocation Factor
°A) of 2010
Volume
(Unadjusted)
Est. 2010 Volume 4
(ccf)
Adjusted 2
Volume
Adjusted Vol.
Total (ccf)
Percent of •
Adjusted Vol.
Customer Class
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Cornmercial/Restaurants
400 Institutional
500 Schools/Public
600 Commercial/Hotels
692,263
747,379
370,658
94,232
47,221
3,107
107,860
33.6%
36.2%
18.0%
4.6%
2.3%
0.2%
5.2%
401,513
635,272
370,658
94,232
47,221
3,107
107,860
435,675
689,323
402,195
102,250
51,239
3,371
117,037
24.2%
38.3%
22.3%
5.7%
2.8%
0.2%
6.5%
ii6500
Target Total 3 (ccf)
Citv Flow4 (MGD
1. City-provided water use data (2011/12 Sewer User Charges, Summary by User code).
2. Single-. and Multi-Family adjustments reflect landscape-irrigation factors.
3. Total effluent from L.A. Hyperion records (effluent flow meters).
4. From flow meter data for April 1, 2010 to March 31, 2011. Email from Public Works Dept. March 29 2012.
Development of the Customer Allocation Factor
Number of
Accounts
Adjusted (if
needed)
Percent of
Total
Customer Class
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
600 Corn merciaVHotels
iroal
r
5,736
6,199
1,086
165
57
11
35
4518:1
5,736
6,199
1,086
165
57
11
35
Iji110 .09 1 : 1
43.16%
46.65%
8.17%
1.24%
0.43%
0.08%
0.26%
Appendix B
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
B-11
3S Percent of
Total
20.96%
33.17%
19.35%
16.02%
3.16%
0.11%
7.22%
Avg Strength •Calculated Adjusted TSS
Percent of
Factor 2 (mg/!) TSS (lb/yr)
(lb/yr)
Total
478,347 478,347 21.18%
756,839 756,839 33.51%
441,588 441,588 19.55%
405,045 405,045 17.94%
31,964 31,964 1.42%
2,103 2,103 0.09%
142.372 142,372 6.30%
;NOW 2, 285 :258 Ain%
635
oo
Avg Strength
Factor2 (nigh)
Calculated
BOO (lb/yr)
Adjusted BOD
(113/yr)
Development of the Strength Allocation Factor
529,986
838,543
489,259
405,045
79,911
2,734
182529
52807,
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
600 . Commercial/Hritels 3
utti
1. Reflects irrigation credits for single-and multi-family classes.
2. Estimated BOD/TSS strength factors are from the City's 2003/04 Engineers Report (Table 2).
3. Estimated 130D/T$S from City's 2003/04 Engineers Report (Table 2):
Adjusted
Annual Flow
(CO /
Customer Class
435,675 -
689,323
402,195
102,250
51,239
3,371
117,037
:=1:054iti90
529,986
838,543
489,259
405,045
79,911
2,734
182,529
-
4'96'
635
250
Biochemical Oxygen Demand MOD)
Total Suspended Solids (MS)
Appendix B
B-12
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012