City of Culver City, California
Agenda Item Report
Meeting Date: 07/22/13 Item Number: PH-1
CITY COUNCIL AGENDA ITEM: PUBLIC HEARING - Adoption of a Resolution
Confirming the Assessment and Ordering the Levy for the Sewer User’s Service
Charge - Fiscal Year 2013/2014
Contact Person/Dept.: Mate Gaspar/PW Phone Number: (310) 253-5602
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [X] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Agenda and Meetings – City Council (07/16/13); (Mail)
Official Public Notification to each parcel owner in the City (06/07/13)
Department Approval:
Charles D. Herbertson (07/10/13)
City Attorney Approval:
Carol Schwab (by H. Baker) (07/15/13)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller)
City Manager Approval:
John Nachbar: (07/16/13)
RECOMMENDATION:
Staff recommends the City Council adopt a resolution confirming the assessment
and ordering the levy for the Sewer User’s Service Charge - Fiscal Year 2013/2014.
PROCEDURE:
1. Mayor seeks motion from the City Council to receive and file the affidavits of
publication and posting of notices and correspondence received in response to
the public hearing notices; and,
2. Mayor calls for a staff report and the City Council Members may pose questions
to staff as desired; and,
3. Mayor seeks a motion to open the public hearing; and,
4. Mayor seeks a motion to close the public hearing after all public testimony has
been presented; and,
5. The City Council discusses the item and arrives at its decision.
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 (Amalgamated
System). City of Culver City, California
Agenda Item Report
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 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 incurred by Culver City as a result of the collection, operation,
and improvement of our own sewage collection and conveyance system.
All of these costs are annually determined and presented to the City Council in an
Engineer’s Report, in accordance with Section 5.02.035 of the Culver City Municipal
Code (CCMC).
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 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. In addition, in order to address situations where the SUSC are
inadvertently not included in the property tax bill and ensure that each parcel of real
property in the City is properly assessed its proportionate share of the cost for the
operation, maintenance, repair and improvements of the City sewerage system, the
City Council adopted a resolution earlier this year, which authorizes the Public
Works Director to issue a direct billing to the owner of any property that was not
previously assessed their sewer user’s service charge through their property tax
bill.
On May 28, 2013, the City Council adopted the Resolution that approved the
Engineer’s Report, declared its intention to order the assessment levy and
collection of assessments, and set the date, time, and place for this public hearing
for July 22, 2013 at 7:00 PM (or as soon thereafter as this item may be considered
by the City Council).
DISCUSSION:
Rate increases of approximately 4% are proposed across all customer classes for
Fiscal Year 2013/2014 and continuing through Fiscal Year 2014/2015 and Fiscal
Year 2015/2016 with the exception of an approximate 8% rate increase for single
family residences proposed for Fiscal Year 2013/2014 and a 3 to 4% rate increase
for single family residences in Fiscal Years 2014/2015 and 2015/2016. In addition, City of Culver City, California
Agenda Item Report
base charges and commodity charges are proposed to be adjusted in Fiscal Year
2013/2014 to achieve the recommended 60%/40% revenue split, respectively. (All
of the above rate increase percentages are approximate as the actual rate increase
varies somewhat depending on water consumption.)
Brief Summary of Why an Increase in Rate is Proposed
The City Council last approved an increase to the SUSC in Fiscal Year 2007/08.
During these past 6 years, expenditures to the sewer enterprise fund have
continuously increased. Some of the increase is attributed to the State adopting a
new Wastewater Discharge Requirements (WDR) under a separate NPDES permit.
The WDR directs agencies to minimize sewer spills through a preventative
maintenance program and by new capital improvement projects. The WDR also
charges steep fines for any sewer overflow to the public. Therefore, the City has
been aggressively cleaning the sewer lines, installing superior emergency
notifications systems to alert of potential sewer overflow, and has a major capital
improvement project that will close four sewer pump stations and construct one new
one.
Each property owner in the City received a notice of the proposed rate increase as
required by Proposition 218. Staff is proposing that the rate increases for the next
three fiscal years be considered at one time tonight to save money on postage and
handling and to reduce other administrative costs.
Pursuant to Section 5.02.035.C of the Culver City Municipal Code (CCMC), any
interested persons may file a written protest with the City Clerk (or withdrawal a
previously filed protest) until the conclusion of the Public Hearing. Pursuant to
CCMC 5.02.035.D, at the conclusion of the hearing, the City Council shall allow or
overrule any objections. Adoption of the proposed Resolution shall overrule any
protests received and confirm the SUSC against each parcel as a special
assessment and lien on that parcel.
Copies of all written correspondence received prior to the preparation of the agenda
packet for this evening’s meeting will be provided to the City Council at the night of
the meeting. For the correspondence received, staff has attempted to contact each
property owner and has provided additional explanation of the proposed rates. In
many cases, once those persons received the additional information, their level of
concern dropped significantly. Those who have presented a written protest who
then expressed their desire to withdrawal such protest after a conversation with staff
have been requested to do so in writing.
Majority Protest
Under the applicable provisions of Proposition 218, a majority protest exists if written
protests received exceed 50% + 1 of the parcels impacted by the proposed SUSC
assessment. Since the SUSC assessment involves all parcels in Culver City City of Culver City, California
Agenda Item Report
(approximately 14,000 parcels), in order for a majority protest to exist, approximately
more than 7,000 protests would need to be filed. As of the date of this staff report,
staff has received 7 protests, with 5 indicating they would like to withdrawal their
protest after contacting staff and receiving additional information.
FISCAL ANALYSIS:
The Engineer’s report contains the estimated annual expenditures and revenue for
Fiscal Year 2013/14. The estimated revenue is estimated to be $8,203,141. The
estimated expenditures is estimated to be $7,815,605.
ATTACHMENT:
1. Proposed Resolution
2. Engineer’s Report
3. NBS Sewer Rate Study
MOTION:
That the City Council:
(Absent a majority protest) Adopt the Resolution confirming the assessment and
ordering the levy for Sewer User’s Service Charge for Fiscal Year 2013/2014.
MEETING DATE: 07/22/13
AGENDA ITEM:
PUBLIC HEARING - Adoption of a Resolution Confirming
the Assessment and Ordering the Levy for the Sewer User's
Service Charge - Fiscal Year 2013/2014
ATTACHMENTS
1 Resolution
2 Engineer's Report
3 June 26, 2012 Sewer Rate Study by NBS
Pages
1 - 3
4-14
15 — 40 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA, CONFIRMING THE
ASSESSMENT AND ORDERING THE LEVY FOR THE
SEWER USER'S SERVICE CHARGES FOR FISCAL YEAR
2013-2014.
I RESOLUTION NO. 2013-R
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WHEREAS, the City Council previously completed proceedings in
8 accordance with the provisions of Chapter 5.02 of the Culver City Municipal Code
9 ("CCMC") for the levy and collection of annual assessments for the system of sewer
10 user's service charges providing that each parcel of property shall pay its proportionate
11 share of the costs for operation, maintenance, repair and improvements of the City
12 sewerage system (the "Sewer User's Service Charges"); and,
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WHEREAS, on May 28, 2013, the City Council approved the Assessment
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15 Engineers Report (the "Engineer's Report") and declared its intention to provide for the
16 levy and collection of annual assessments for Fiscal Year 2013-2014, to provide for the•
17 costs and expenses necessary for the operation, maintenance, repair and
18 improvements of the City sewerage system; and,
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WHEREAS, the City Council has heard all testimony and considered all
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objections to the assessment at a duly noticed public hearing held on July 22, 2013 and
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22 has determined to proceed with the levy of annual assessments for the District.
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NOW, THEREFORE, the City Council of the City of Culver City, DOES
24 HEREBY RESOLVE as follows:
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1. Pursuant' to CCMC Section 5.02.035.D, the City Council hereby
26 overrules any objections and confirms the assessment and the allocation of the levy
27 amounts so that each parcel of property shall pay its proportionate share of the costs
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-1- I for operation, maintenance, repair and improvements of the City sewerage system, as
2 is described in full detail in the Engineer's Report on file with the Clerk.
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2. The adoption of this resolution shall constitute the levy of an
4 assessment for the fiscal year commencing July 1,2013 and ending June 30, 2014.
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3. The assessment for the Sewer User's Service Charges as set forth
6 in the Engineer's Report shall be performed pursuant to law. The County Auditor shall
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8 enter on the County Assessment Roll the amount of the assessment and the
9 as sessment shall be collected at the same time and in the same manner as the County
10 property taxes are collected. After collection by the County, the net amount of the
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shall be paid to the City of Culver City.
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4. Upon receipt of monies representing assessments collected by the
13 County, the City shall deposit the monies into a special fund known as the "Fund for
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15 Salver User's Service Charges" which was previously established upon the creation of
16 the District.
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5. Immediately upon the adoption of this Resolution, the City Clerk
18 shall file a certified copy of this Resolution, which includes the Engineer's Report
19 containing the allocation of levy amounts and assessment, with the County Auditor.
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-2- CAROL A. SCHWAB, City
6. A certified copy of the Engineer's Report shall also be filed in the
Office of the City Engineer, with a duplicate copy on file in the Office of the City Clerk,
and shall be open for public inspection.
APPROVED and ADOPTED this day of
2013.
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ATTEST:
MARTIN R. COLE, City Clerk
Attorney
A13-00426
JEFFREY COOPER, Mayor
City of Culver City, California
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3 Main Office
32605 Temecula Parkway, Suite 100
Temecula, CA 92592
Toll free: 800.676.7516 Fax: 951.296.1998
Regional Office
870 Market Street, Suite 1223
San Francisco, CA 94102
Toll free: 800.434.8349 Fax: 415.391.8439
heipinp: co ron
fuEs0 to.triprtOw
City of Culver City
Sewer User's Service Charge
Fiscal Year 2013114 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, Councilmember
Micheal 0' Leary, Councilmember
Andrew Weissman, Councilmember
CITY STAFF
John Nach bar, 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 2013114 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
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 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. As such, the water consumption for single-family and
multi-family customers will be multiplied by the following factors:
Customer Class
Factor
Single-Family 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:
Budget Item
Amount
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
Amoun
Sewer User's Service Charge
Industrial Waste Inspection Fees
Interest Earnings
TOTAL
$7,983,141
70,000
150 , 000
$8,203,141
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, 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.
I 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 $44.0 million.
Sewer User's Service Charge Engineer's Report — City of Culver City
3-1
Prepared by NBS — Fiscal Year 2013/14 4. SUMMARY OF CURRENT RATE STRUCTURE
The purpose of the rate design analysis performed by NBS in FY 2012/13 was to determine how to
collect fixed costs (i.e., base charges) and variable costs (i.e. commodity charges) from each of the
customer classes. The primary factor in allocating rate revenue between these fixed and variable
charges is the nature of the costs being collected. That is, fixed costs should be collected from fixed
charges, and variable costs should be collected from variable charges.
Accurately allocating these fixed and variable charges improves the revenue stability of the sewer
utility's rates, because changes in variable usage, or water consumption patterns, will be accounted
for in the variable (commodity-related) charges. In other words, if overall water consumption dropped,
the revenue collected from commodity-related charges would change in proportion to the commodity-
related costs.
A basic evaluation of fixed and variable costs indicates that approximately 63% of the sewer utility
costs are fixed and 37% are variable. Therefore, base charges and commodity rates should collect
sewer rate revenue from fixed and variable charges in roughly these proportions. NBS' analysis
incorporates these types of changes for FY 2013-14, rounding these percentages to 60% and 40%
respectively.
Sewer User's Service Charge Engineer's Report — City of Culver City
4-1
Prepared by NBS — Fiscal Year 2013/14 5. CURRENT SUSC RATES - FY 2012/13
The following table shows the current SUSC rates for Fiscal Year 2012/13:
Sewer Rates
Base Charges; Commodity '
($/yr) 1 Rate ($/hcflyr)
Customer Class
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
607 Special 3
608 Special 3
609 Special 3
610 Special 3
612 Special 3
613 Special 3
614 Special 3
615 Special 3
1 Base charge is per parcel.
2 Base charge is per dwelling unit.
3 Base charge is per meter.
$42.32
$3.85
41.80
3.80
41.37
3.76
36.89
6.65
40.50
3.59
42.32
3.26
39.11
3.79
39.11
4.94
39.11
4.94
39.11
3.47
39.11
2.97
39.11
4.94
39.03
3.55
39.10
4.55
39.11
3.56
39.12
0.71
39.11
0.36
39.09
0.36
39.12
3.02
Sewer User's Service Charge Engineer's Report City of Culver City
5-1
Prepared by NES - Fiscal Year 2013/14
// 6. PROPOSED SUSC RATES - FY 2013/14
The following table shows the proposed - SUSC rates for Fiscal Year 2013/14:
Customer Class I
Sewer Rates
Base Charges .
($/yr) '
Commodity .
Rate ($/hcf/yr)
101 Single-Family 1 $254.24 $1.17
102 Multi-Family 2 202.97 1.17
200 Commercial/Business 3 254.24 3.30
300 Commercial/Restaurants 3 254.24 6.54
400 Institutional 3 254.24 3.48
500 Schools/Public 3 254.24 2.67
601 Special 3 25424 3.86
602 Special 3 254.24 5.11
603 Special 3 254.24 5.12
604 Special 3 254.24 3.58
605 Special 3 254.24 3.04
606 Special 3 254.24 5.13
608 Special 3 254.24 3.98
610 Special 3 254.24 0.55
612 Special 3 128.07 0.00
613 Special 3 • 254.24 0.24
614 Special 3 254.24 2.88
615 Special 3 4 254.24 3.94
11
Base charge is per parcel.
2 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 N BS - Fiscal Year 2013/14 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 2013/14:
Customer Class .
Total Annual Rate Revenue
From Base
Charges_
From
Commodity
Rates 1 1
Total
Annual
Revenue
101 Single-Family $1,437,981 $473,115 $1,911,096
102 Multi-Family 2,233,076 752,769 2,985,845
200 Commercial/Business 262,851 1,288,641 1,551,492
300 Commercial/Restaurants 42,712 716,287 758,999
400 Institutional 19,576 226,475 246,051
500 Schools/Public 5,841 75,155 80,996
601 Special 763 96,257 97,020
602 Special 508 59,010 59,518
603 Special 254 57,917 58,171
604 Special 508 44,961 45,469
605 Special 1,271 72,291 73,562
606 Special 254 104,780 105,034
608 Special 254 1,345 1,599
610 Special 254 974 1,228
612 Special 768 0 768
613 Special 254 381 635
614 Special 508 3,781 4,289
615 S ecial 254 1,115.02 1,369
Total $4,007,887 $3,975,254
Estimates for the Commodity Charge are based on 2011 water consumption data
Sewer User's Service Charge Engineer's Report - City of Culver City
7-1
Prepared by NBS - Fiscal Year 2013/14
/3 8. 600 CUSTOMER CLASS USER DESCRIPTIONS
The following table shows the user descriptions for the Special "600"Customer Classes:
Use Code
Use Description
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
14
Prepared by NBS — Fiscal Year 2013/14 ' 44*# NBS
herPMQ cornrou!Wjes
tund toms/1-60w
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 (AWVVA) 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 N BS June 26, 2012 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 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
I',
Prepared by NBS —June 26, 2012 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
Budget Projected
Net Revenue Requirements
FY 2012/13
FY 2013/14
FY 2014/15 FY 2015/16 FY 2016/17
Sources of Sewer Funds
Rate Relenue 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
$ 6,096,069 $ 6,332,396 $ 6,509,572
1,603,000 1,608,300 1,605,650
- 482.386 -
$ 7,699,069 $ 8,423,082 $ 8,115,222
113K408) 4=.: 044421k
$ 5,858,475 $ 6,210,405
1,606,800 1,605,200
916,584
*04
916,584
itiiiiiiiiitfONakigkEifffitAk104.000.400 47A96.
Projected Annual Rate increase 0.00% 4.00% 4.00% 4.00% 01°0 9:
Cumulative Rale increases 124
-
Net Revenue;::Rogioltootg 71927j$ 1,5$5;00,0,1,47069 : 189,4422 :
1. Total Use of Funds less Industrial Water Inspection Fees and Interest Earnings. This is the annual amount needed from semer 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 2015116
FY 2012/13
FY 2013/14
FY 2014/15
FY 2015/16 Project Description
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 chert Mesmer
New siphon at sewer convergences at CuKer/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
500,000
100,000
150,000
26,472
$ 100,000
$ 200,000
$ 100,000 $ 100,000
$ 100,000 $ 100,000
$ 3,000,000 $ 3,000,000
-
$ 3,000,000
44144411. 1 $! ,4001000
7.44;10: 7
8.16%
Uses of Sewer Funds
Operating Expenses
Debt Service
Rate-Funded Capital Expenses
Total Use of Funds
before Rate
Additional Revenue horn Rate Encreases
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
Page 3 Exhibit 5. Ending Cash Balance Compared to Recommended Reserve Target
$14,000,000
$12,000,000
marss Ending Cash
Balance, All
Reserves
$10,000,000 t
-Recommended
Target Reserve
Balance
$6,000,000
$5,000,000
$4,000,000
$2,000,0110 4--
Cash Management and Target Reserve Fund Balances — The Utility will begin Fiscal Year 201211 3
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
Budget
FY 2012/13 FY 2013/14
Proj e
FY 2014/15
:led
FY 2015/16 , FY 2018/17
Beginning Balance $ 1,479,650 $ 1,465,000 $ 1,503,683 $ 1,524,000 $ 1,578,163
Recommended Minimum Target 1,465,000 1,553,000 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 1,250,600 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 1,608,838 1,608,838 1,608,838 1,608,838 1,608,838
!!Frotiat 84 :041000:EtOarice - -- -inl:
W5I,1* 804:EII 7;26061i $ r 4597,000:
.'Tot*RecotruitelMed Agnimom -Tgef $ 4,32,3;008 $ 4,4048 - 74,494 5
60t838
_V-41.j.0.08::
3-
2013 2014 2015 2010 2017 2018 2V9 2020 2021 2022
Fiscal Year Ending
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 assets 2 .
• Debt Reserve - the maximum annual debt service payment, as specified by the bond covenants.
2
Based on the 2010/11 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 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
Cost of Service Alocated Costs. 2012
Net Revenue Requirement by Class
% of COS
Rev. Reqt.
at Present
Rates
LE=
(CA)
22%
(VOL
(BOO)
13%
(TSS)
12%
COS Rev.
Reg%
Percent
Difference
53%
101 Single-Family
102 MAIti-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/1%Mo
600 Commercial/Hotels
$962,013 $245,676 $239,608 $1,992,310
$1,522,095 $390,290 $379,107 $2,879,417
$888,087 $227,720 $221,195 $1,440,000
$225,777 $188,523 $202,890 $632,840
$113,140 $37,194 $16,011 $171,751
$1,043
$7,444 $1,273 $1,053 $10,814
$3,319
$258,430 $84,956 $71,316 . $418,020 .
$ Ogiggli *WOO 330040 0.,i0iff4(' .17:74 $ 106
$1,788,571
$2,915,211
$1,472,993
$725,973
$179,491
$10,594
$452,318
$74.45061_
26.4%
38.2%
19.1%
8.4%
2.3%
0.1%
5.5%
$544,013
$102,998
$5,403
$587,925
$15,649
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
17 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
2011-12 Sewer Rates
Sewer Rates Incorporating COS Revenue
2011-12 Annual Rate Revenue
Requirements
2012-13 Adjusted Sewer Rates 2012-13 Annual Rate Revenue
Customer Class
101 Single-Family
Base Charges
(Mir)
$42.32
Commodity Rate
(Mut)
$3.85
Base Charges
($)Yr)
$242,748
Commodity Rate
{$/hcf)
$1,545,823
Total Annual
Revenue
$1,788,571
Base Charges
(S/Yr)
$42.32
Commodity Rate
($/hcf)
Base Charges Commodity Rate
($40 ($/hcf)
$242,748 $1,545,823
Total Annual
Revenue
$1,786,571
102 Mu-Family • $42 32 . $3.85 $469,413 $2,445,798 $2 915 211 $41.80 $3.80 $463,650 $2,415,767 $2,679,417
200 Commercial/Business $42.32 $3,85 $45,960 $1,427,033 $1,472,993 $41.37 $3.76 $44,930 $1,395,070 $1,440,000
300 Commercial/Restaurants $42.32 $7,63 $6,983 , $718,990 $725,973 $36.89 $6.65 $6,067 $626,753 $632,840
400 Institutional $42.32 $3.75 $2,412 $177,079 $179,491 $40.50 $3.59 $2,308 $169443 $171,751
500 Schools/Public $42.32 $3.26 $466 $10,129 $10,594 $42.32 $3.26 $466 $10,129 $10,594
601 Special $42.32 $4.10 $254 $67,310 $67,564 $39.11 $3.79 $235 $62,206 $62,441
602 Special $42.32 $5.35 $85 $76,674 $70,758 $39.11 $4.94 $78 $65,315 $65,393
603 Special $42.32 $5.35 $42 $65,382 $65,425 $39.11 $4.94 $39 $60,425 $60,464
604;Special _ $42.32 $375 $85 $75,885 $75,970 $39.11 $3.47 $78 $70,131 $70,209
605 Special $42.32 $3.21 $212 $74,093 $74,305 $39.11 $2.97 $196 $68,475 $68,671
606 Special $42,32 $5,35 $42 $86,815 $88,858 $39.11 $4.94 $39 $82,061 $82,120
607 Special $42.32 $3.85 $42 $189 $231 $39.03 $3.55 $39 $174 $213
- - ,--.....
608 Special , $42.32 $4.93 $42 $1,385 $1,428 $39.10 $4.55 $39 $1,280 _ _ .$1,319,
609 Special $42,32 $3,85 $254 $2,360 $2,614 $39.11 $3.56 $235 $2 , 181 $2,416
610 Special $42.32 $0.77 $42 $885 $927 $39.12 $0.71 $39 $818 $857
612 Special $42.32 $0,39 $296 $636 $933 $39.11 $0.36 $274 $588 $862
613 Special $42.32 $0.39 $42
,
$613 $655 $39.09 10.36 $39 $566 $605
614 S.eclal $42.32 $3.27 $42 $2,609 $2,652 $39.12 $3.02 $39 $2,412 $2,451
:.: clotal • $769,462 $6,776,6 9 $7, 4 151
1 $761,667 $ ,679,$37 . .
$ ,4411g4.'
o.
)o 6 . . '9 ' Q %
Sewer Rate Study - City of Culver City
Page 7
Prepared by NBS - June 26, 2012 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
Including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates 1
Revenue Requirements
2014-15 2015-16
Customer Class
101 Single-Family
2013-14
Base
Charges ($/yr)
$254.24
Commodity
Rates (SAO
$1.17
Base
Charges ($/yr)
$264.32 I
Commodity
Rates ($/het)
$1.21
Base
Charges (Sty')
$274.80
Commodity
Rates ($/hci,
$1.25
102 Multi-Family $202.97 $1.17 $211.48 $1.21 $220.42 $1.25
200 Com mercial/Business $254.24 $3.30 $264.32 $3.43 $274.80 I
1
$3.56
$7.07 300 Commercial/Restaurants $254.24 1 $6.54 $26432 $6.80 $274.80
400 Institutional $254.24 j
$3.48 $26432
$2.67 $264.32 ---'-,
$3.61 $274.80 $3.76
500 Schools/Public $254.24 ' $2.78 $274.80 $2.89
601 Special $25424 $3.86 $264.32 $4.02 $274.80 $4.18
602 Special $254.24
,
$5.11 $264.32 $6.31 $274.80 $5.53
603 Special $25424 $5.12 $264.32 $5.33 $274.80 $5.54
604 Special $25424 i $3.58 5P $3.73 $274.80 $3.88
605 Special $254.24 1 $3.04 $264.32 $3.16 $274.80 $3.29
606 Special $254.24 j $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 $264.32 $4.14 $274.80 $4.30
609 Special $254.24 i $1.61 $264.32 $1.68 $274.80 $1.74
61,0 Special $254.24
1
1 $0.56 $264.32 $0.58 $274.80 $0.60
612 Special $128,07
$254.24
$0.00
$0.24
$133.19
$264.32
$0.00
$0.25
$138.52
$274.80
$0.00
$0.26 613 Special
614 Special $254.24 $2.88 $264.32 $2.99 $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 Me 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 rneet the revenue requirements for this class.
Sewer Rate Study - City of Culver City
Page 8
Prepared by NBS -June 26, 2012 CONSULTANT RECOMMENDATIONS
Based on the results of this study, NIBS 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
23 SEWER RATE STUDY APPENDIX A
SELECTED TABLES FROM THE FINANCIAL PLAN
AND REVENUE REQUIREMENTS ANALYSIS 1•111ECIEEMIENECINEEI INEEMIIENZELFELLEMELEIMINI
RATE REVENUE REQUIREMENTS SUMMARY
Budget Projected
Sources of Sewer Funds
Rate Revenue Under Prevailing Rates
Industrial Waste Inspection Fees
Interest Earnings
Total Sources of Funds
FY2012113
$ 7,340,661
70,000
202,000
$ 7,612,661
FY 2013114
$ 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
$ 7,560,661
$ 7,340,661
70,000
150,000
$ 7,660,661
FY2017/18
$ 7,340,661
70,000
150,000
$ 7,660,661
FY 2018)19
$ 7,340,661
70,000
150,000
$ 7,560,661
FY2019/20
$ 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
$ 7,560,661
147,386 $ (254,944) $ (138,408)
$ (862,421)1 $ (654,561) $ (737,864) $ (927,361)1 $ (1,118,690) $ (1,319,056) $ (1,527,548
$ 254,944 $ 138,408 $ 852,421
2,621 $ 276,824 $ 67,109
$ (138,408) $ (595,998)
$ 257,565 $ 276,824
554,561 $ 737,864 3 927,361 $ 1,118,690 $ 1,319,056 $ 1,527,548
$ - $ $ - $ - S
(554,561)
$ (737,864) $ (916,584) $ (916,584) $ (1,081,729) $ (1,334,401)
$ 10,777 $ 202,105 $ 237,326 $ 193,147
$ 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
1,570,675
5,504,585
7,075,263
$ 1,602,092
5,673,787
$ 7,275,879
$ 1,634,134
5,845,738
$ 7,482,872
Uses of Sewer Funds
Operating Eapenses:
Personnel SeNices
Maintenance and Operations
Subtotal: Operating Expenses
Other Expenditures:
Existing Debt Service
New Debt Service
Rate-Funded Capital Evens es
Total Uses of Sewer Funds
Forecasted Surplus (Deficiency) before Rate Increase
Total Revenue Deficiency
increase/(Decrease) to Reserves
Less: Revenue from Prior Rate Increases
1 Net Revenue Deficiency
Calculation of Required Rate Increases
Rate Revenue with No Rate Increase
plus: Revenue from Prior Rate Increases
Total Rate Revenue Before Rate Increase
Cumulative increase from Annual Rate Increases
$ 1,367,370 I 8 1,394,717 $ 1,422,612
4,491,105 1 4,815,687 4,673,457
$ 5,858,475 I $ 6,210,405 $ 6,096,069
$ 1,608,600 1$ 1,605,200 $ 1,603,000 $ 1,608,300 $ 1,605,650 $ 1,606,213 $ 1,607,213 1 $ 1,604,088 $ 1,603,838 $ 1,605,338
482,386
$ 7,465,275 1 $ 7,815,605 $ 7,699,069 $ 8,423,082 $ 8,116,222 $ 8,298,525 $ 8,488,022 1 $ 8,679,361 1 $ 8,879,716
1$ 9,088,209
$ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661 $ 7,340,661/
- 293.626 598,998 916.584 916.5 84 916,584 1,081,729 1,334,401
$ 7.340,651 $ 7,340,661 5 7 634,287 6 7 939,659 8 8.257,245 $ 8 257,245 $ 8 257,245 $ 8422,390 $ 8,675,062
OK ii% ,:: ik:o0,1 4AdbX eilitic zl l 'oik 2.totir. iiiiik 2 i0(1:°.
0,00% 4.00% 8.16% 12.49%1 12.49% 12.49% 12.49% 14.74% 18.18% 20.64%
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
$ 8,325,831 $ 8,492,348
(10,777) (36,960)
0.99 0.98
8,747,118
15,345
1.01
$ 8,922,061
(19,646)
0.99
1. in this iteration of the analysis, the rate increases targets 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.
Appendix A
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
A-1 SOURCES & USES OF FUNDS FOR
Budget
Projected
FY2012/13 FY2013/14 FY2014/15 FY 2015116 FY2016/17 FY2017/18 FY 2018119 FY2019/20 FY 2020(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 Expenditures (E>dsting Needs)
Total Uses of Capital Funds
CaialW.tiindini0400004001 10e0041:
- Is
$
4,076,472 3,300,000 3,200,000 2,717,614
482,386
$ 4,076,472 1 $ 3,300,000 $ 3,200,000 $ 3,200,000 $
$ 4,076,472 I $ 3,300,000 $ 3,200,000 $ 3,200,000
$ 4,076,472 1 $ 3,300,000 $ 3,200,000 $ 3,200,000
Appendix A
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
A-2 CAPITAL IMPROVEMENT PROGRAM
FY2012/13
FY 2013/14
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 Seim araine
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: oject .sts
3,000,000
100,000
100,000
100,000
500,000
100,000
150,000
- $
26,472 $
4.;076472! 34iitifid0
_ $
100,000 $ 100,000
100,000 $ 100,000
- $
3,000,000 $ 3,000,000
100,000
200,000 $
3,000,000 $
Appendix A
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
A-3 SUMMARY OF CASH ACTIVITY
Total Estimated Beginning Cash
Budget Projected
FY2012113
$ 17,190,264
FY2013114 FY2014115 FY2015116 I FY2016117 FY20171113 FY2018/19 FY2019120 FY2020121 FY 20.2V22
MINI
Operating Reserve
Beginning Reserve Balance 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 54,163 362,023 178,720 (10,777) (36,960) 15,345 (19,646)
Plus: Transfer of Debi Reserve Surplus 1 .
-
_
- -
Less: Transfers Cult) Ca .ital Replacement Reserve 162,036) - 440,273) - (313,186) 132,720 - - . .
Ending Operating Reserve Balance $ 1,466,000 $ 1,503,683 $ 1,624,000 $ 1,678,183 $ 1,627,000 $ 1,673,000 $ 1,662,223 $ 1,625,263 $ 1,640,608 $ 1,620,962
Ta et Ending Balance. (25% or: 90oravs nf (:)(ZMI $ 1 465 non $ 1,553.000
.. ,„
$ 1 824 nn0 5 1.583,000
,.......—
4 R2 7 0 09 6 1 572, 990 5 1.720,000 $1,769,000 8 1,819,000 1,871,000
l' kfiti'Aititeea $ t.,t, „ -It.w' I . r ,iiic it $- $ 49.1.:31:1,- . 43. . _ .
Si iii - '14:i3i - -$ 16:492 ' 1W.0 ,0|1010|iir
Capital Rehab & Replacement Reserve
.
Beginning Reserve Balance 1 $ 14,101,776 $ 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 Ca•ital Prcrects 4,076,472 (3,300,000) 3,200,000 2,717,614 _
- - - - -
Ending Repair & Replacement Balance $ 10,187,340 $ 8,887,340 $ 4,127,614 $ 1,410,000 $ 1,723,186 $ 1,865,907 $ 1,855,907 $ 1,855,907 $ 1,865,907 $ 1,855,907
Target Fnding .palanco (3% of Assets) . $ 1,250,000 $ 1,310,000 $ 1,3.50,000 8 1.410,000 $ 1,370 000 $ 1,330.000 $ 1 290,000 1 ,250.000
,
'3 1,210,000 1 ,180.000
, ..,..,.-,..,..
.'.
16 .4-400447t- • 4M -.6*.tiorr'; Do 8;03n340.1 $' toff-340 1_ r 'S .-H -Itn.1.4 - 1- ' WO - s.c52b1 -:: 606 6/ 6 . tioliti
Debt Reserve
Beginning Reserve Balance 1 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,6013,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,606,838
Plus: Reserve Funding from New Debt Obligations - - - - - - - - - -
Less: Transfer of Sur•lus to Operating Reserve (1) - - - - -
- _
-
Ending Debt Reserve Balance $ 1,608,838 $ 1,608,838 $ 1,808,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838 $ 1,608,838
TarcretE:ndirre Balance._ 1 .".,838 $ 1.608 838 $ 1 608 838 $ 1 608 838 $ 1 non 838 1 606 638 8 1,808 f4 - 4R 5 f 605,515 $ 1.608.635 8
5808 538_
$ - $ - $
• $ - $ - $ • $ -
Debt Coverage Ratio After Rate Increase 1 09 1.02 1.29 c 9 0 .:, 3
, ,
99
''-,! Efid 10 .4:All: e erv s .
Air ' I
Recommended Tar et Endln Balance - All Reserves $ 4,2:',.83a $ 4,601,838 $ 4,805,838 S 4,618,838 $ 4,627,838 $ 4,637,838 $ 4859,838
n =failm . ,...•nn !n =1n ,n imarn a.
illttialiiiiSil 4 1 L i411167;44414* : ,.:-0,'5.20i024114.:.:iitiiiiiit-iitv; .:4,40:1413: - !.1:14531i1C;1::::: -;-:!A2C00,4111111114 011111M- - =Me
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 annuardebt 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, it is 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 2,003
10,000
7,100
7,600
3,031
1,000
6,690
3,430
3,500
2,000
26,400
28,500
36,ono
3,341
253,963
7,500
4,774
3,829
19,754
40,415
5,559
20,786
45,346
1,560
4,792
764
150
1,020
440,211 1
43%
40% i
5,85,3,475
Adjustment for Current Rate Level: Total (VOL) (BOD)
IEEE
2013 Net Revenue Requirement
Current Level of Rate Revenue
Ad ustment Factor
Regular Salaries
Part-lime Salaries
Overtime Pay
Deferred Compensation
Social Security
Retirement
Deferred Retirement
Workers Compensation
Group Insurance
Retiree Heath Savings
Retiree Insurance
Retiree Medical . Pre-funding
State Disability hsurance
Health Benefits
Longevity Pay
Uniform Allowance
Total Personnel Services
'fttennieCe*C048tifitiSS
Office Expense
Printing & Birdhg
Postage & Delivery
Communications
Utililea
Departmental Special Supplies
Small Tools & Equipment
Training & Education
Conferences & Conventions
Special Events & Meetings
Memberships & Dues
Contributions to Agencies (1)
R&M - Equipment
Garage Expenses
Rental of Land
Amortization of Equipment
Med Services - DM,/ Certificate
Med Services - Special Exam ins
Refuse Dist:, Services - Other
Other Contractual Services
Insurance Premiums - Other
Liability Reserve Charge
Depreciation
Improvements other than Bldg.
Auto - Rolling Stock & Equipment
Equipment - Hardware
Administrative Char
0,
• 338618 $ 126,982 $ 126,982 $
10,000 $ 3,750 $ 3,750 $
6,365 $ 2,367 $ 2,387 $
5,105 $ 1,914 $ 1,914 $
26,339 $ 9,877 $ 9,877 $
53,886 $ 2207 $ 20,207 $
7,412 $ 2,780 $ 2,780 $
27,714 $ 10,393 $
151,154 22
60,462 $ ,673 $
• 2,080 $ 780 $
6,389 $ 2,396 $
• 1,018 $ 382 $
500 0
23 $ 75 $
3,4
1,360 $ 510 $
1,367,370 $ 546.948 $ 205.106 $ 205,106
1,060 $
2,000 $
10,000 $
7,100 $
76,000 $
68,400
30,310 $
27,279
10,000 $
9,003
6,690 $
3,400 $
3,500 $
2,0C/0 $
2,272,3831
522,560
477,120
88,000 $
13,200
13,200
95,000 $
14,250
14,250
360,000 $
33,412 $
400 $
- $
733,316 $
7,680 $
28,300 $
- $
43,900 $
21,6/3 $
655 484 $
25,000
12763
134,715
18,530
69266
5,200
15,973
15,912
65,847
2,546
00
10,393 $
22,673 $
780 $
23% $
3
382 $
76 $
510 $
Total Main enance & Operations
Total Operating Expenses
Allocation of Operating Expenses
it:SCA444_134iiirelitan: .
2009 Series . A Revenue Bonds:
TdiA0VsEsoF,SONERUNDs.±': -
Less Non-Rate Revenues
(less) Industrial Waste Inspection Fees
less Interest Earnin
8034001$ 40.1. 700,
1,937804,is:IL 1141,01.13.
(70,003) $ (37,442)
202 000 $ (108,347)
NET REVENUE REQUIREMENTS 7,193,275 $ 3.791,616
location of Revenue Requirements 106% 53%
Classification of Expenses (cont.)
Adjustments to Classification of Expenses
1. Estimated Volumetric, BOD/TSS strength factors are from the City's 2003/04 Engineer's Report (Table 4).
B-1 Appendix B
Sewer Rate Study -City of Cuiver City
Prepared by NBS - June 26, 2012
act $ 3,976,986 $952,013 $1,522,095 $885,087 $225,777 $113,140 I $7,444
$258,430
$390,290 $227,720 $188,523 . $37,194 $1,273
$379,107 $221,195 $202,890 $16,011 $1,053
$587,925 $102,998 $15,649 $5,406 $1,043
$0 $0 $0 $0 $0 $0 ,
$t992311 $879.417 ,$i*tOtiti 0.04|1010|4
1,176,630
1,131,180
1,260,354
$246,676
$239,608
$544,013
$54,956
$71,316
$3,319
$0
44ttlioR0
Allocation of Revenue Requirements
Customer Classes
Classification Components
Volume
Treatment
- BO D
TSS
Customer-Relateq
Direct Assignment
Net Revenue
Requirements !
101
Single-Family
102
Multi-Family
200
Commercial/
Business
300
Commercial/
Restaurants
400
Institutional
500 Schools/
Public
600
Commercial/
Hotels
1. These revenue requirements have been adfftsted 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 Proposed 2012-13 Sewe Rate Revenue - Base and Commodity Charges
Ei=111
No. of Parcels/
Dwelling Units
New Base
Charges
Adjusted 2010
Consumption
Commodity Rates
New Rate (Mid)
New Base
Charges
Annual Rate Revenue
Commodity
Charges
Total Annual
Revenue
Current Rate
Revenue
Target Rev. Regtsz
[ILZIMIZI13
101 Single-Family*
102 Multi-Family+
200 Commercial/Business.
300 Commercial/Restaurants*
400 Institutione
500 Schools/Pubric"
601 Special"
602 Special"
603 Special"
604 Special*
605 Special*
606 Special*
607 Specie'
608 Special*
609 Special*
610 Special*
612 Special*
613 Special*
614 Special*
TOM
16,417
13,210
12,221
20,236
23,082
16,601
49
281
613
1,149
1,632
1,571
798
- 10 4 %
$62,206
$65,315
$60,425
$70,131
$68,475
$82,081
$174
$1,280
$2,181
$818
$588
$566
$2,412
WOW
$52,441
$65,393
$60,464
$70,209
$68,671
$82,120
$213
$1,319
$2,416
$857
$862
$605
$2,451
• 1P4: .1 . :0$.0:
:„.
:$21692
7,545,151
S 1.992,310
52,879,417 .
51,440,000:
S632;840:
• .$171;751:
.410,814,
$62,441 .
$65,393
$60,464
$70 ,206' •
$68;679:
$82,120
$213
$1;319
• $2,416
$857:
$882:
$605
$2,451 ,
7 545161
5,736
11,092
1,085
165
57
11
$42.32
$41.80
$41.37
$36.89
$40.50
$42.32
$3.85
$3.80
$3.76
$6.65
$3,59
$3.26
$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
$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
ROO
401,513
635,272
370,658
94,232
47,221
3.107
$242,748
$463,650
$44,930
$6,087
$2,308
$456
$235
$78
$39
$78
$196
$39
$39
$39
$235
$39
$274
$39
$39
,17.10071
$1,545,823
$2,415,767
$1,395,070
$626,753
$169,443
$10,129
minurainam
$1,788,571
$2,879,417
$1,440,000
$632,840
$171,751
$10,594
$1;788,571
$1:::472;093::
: $725,973 :
$10,594
"Parcels. Dwelling Units.
1. Adjusted for in-igation factors.
2. Cost-of-Service (COS) analysis indicates some classes should be reduced. The "Target Rev. Regts" are the lesser of Current or COS Revenue Requirement (which are highlighted in yellow).
Appendix B
B-3
Sewer Rate Study - City of Culver City
Prepared by N BS - June 26, 2012 0
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0
,r !- New 2012-13 Sewer Rates Incorporating COS Revenue Requirements
Customer Class
101 Sirigle-Family
Adjusted l Sewer Rates Annual Rate Revenue
Base Charges
Myr}
$42.32
Commodity Rate
(Mid)
$3.85
Base
Charges
$242,748
Commodity Total Annual
Rates Revenue
$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 $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
606 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 $39.12 $3.02 $39 $2,412 $2,451
.--*- -
.
1 _
$6 __I -7 . 037 _
- --
-- - -
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
8-5
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
r,
Customer Class
1
One-Third of COS
Total Annual '11- _
Rev. Reqt.
12 Rate Revenue Adjustmentl
Total Annual Rate Revenue
2013-14
'
2014-15 2015-16
101 Single-Family $1,788,571 $67,913 $1,928,027 $2,002,431 $2,079,812
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 $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 N.A. $68,009 $70,729 $73,558
603 Special $60,464 N.A. $62,883 $65,398 $68,014
604 Special $70,209 MA. $73,017 $75,938 $78,976
605 Special $68,671 N.A. $71,418 $74,275 $77,246
606 Special $82,120 ALA $85,405 $88,821 $92,374
607 Special $213 N.A. $222 $230 $240
608 Special $1,319 ALA. $1,372 $1,427 $1,484
609 Special $2,416 N.A. $2,513 $2,613 $2,718
610 Special $857 ALA. $891 $927 $964
612 Special $862 N.A. $896 $932 $970
613 Special $605 N.A. $629 $654 $681
614 S ecial $2,451 N.A. $2,549 $2,651 $2,757
.;.r
-
.,
1. This is added to the revenue requirements for these class in each of the next 3 years.
Appendix B
8-6
Sewer Rate Study - City of Culver City
Prepared by 1413S - June 26, 2012 Proposed 2013-14 Sewer Rates Incorporating COS Revenue Requirements
Including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates
Customer Class
101 Single-Family
B ase
Charges 1
($/yr)
$254.24
Commodity
Rates 2 (vh co
$1.17
$1.17
Total Annual Rate Revenue
From Base
Charges 1
$1,458,3271
$2,251,3261
From Commodity
Rates 2
$4697001
$743,2681.
Total Annual
Revenue 3
$1,928,027
$2,994,594 102 Multi-Famil/ $202.97
200 Commercial/Business $254.24 $3.30 $2761
1-
$1,221,4941
t
$1,497,600
300 Commercial/Restaurants $254.24 $6.54 $41,950 $616,2041 $658,154
400 Institutional $254.24 $3.48
$ 14 ,492 1
$2,7971
$164,129 $178,621
500 Schools/Public $254.24 $2.67 $8,294 $11,091
601 Special $254.24 $3.86 $1,525 $63,4141 $64,939
602 Special $254.24 $5.11 $508 $67,501 $68,009
603 Special $254,24 $5,12
$3.58
$254
$508
$62,6291
$72,5091
$62,883
$73,017 604 Special $254.24
605 Special $254.24 $3.04 $1,2714
$254.
$70,147
$85,1511
$71,418
$85,405 606 Special $254.24 $5.13
607 Special $222.00 $0.00 $222
I
$0: $222
608 Special $254.24 $3.98 $254 $1,1181 $1,372
609 Special $254.24 $1.61 $1,525 $988 $2,513
610 Special $254.24 $0.55 $254 $637= $891
612 Special $128.07 $0.00 $896
f
$01 $896
613 Special $254.24 $0.24 $254 $375 1 $629
614 Special $2.88 $254 $2,2951 $2,549
- - -$4,OS29O $364S852 $lj.0218.2 -
. -96:1)t:Th 5_37ar 47%, ,;4. ,,4P.O! ,4:
1. The base charges reflect residential classes but are adjusted to overall collect 60% of all revenues.
2. Commodity charges are individually adjusted for each customer class to meet COS revenue requirements.
3. The total rate revenue collected from each customer class are the cost-of-service (COS) revenue requirement.
4. Multi-Family base charges are 80% of Single-Family base charges based on the differences in per unit water
consumption. Multi-Family commodity rates are also adjusted to meet the revenue requirements for this class.
Appendix B
B-7
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
35 Proposed 2014-15 Sewer Rates Incorporating COS Revenue Requirements
Including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates
Customer Class
101 Single-Family
ase
i Chargesi
($/yr)
$264.32
Commodity
Rates 2 ($/hc0
From
From Base Total Annual
, Commodity
Charges' , - Revenue 3
Rates
$1.21 $1,516,146 $486,285 $2,002,431
102 Multi-Family' $211.48 $1.21 $2,345,698
$768 679' $3 114 377
, ! , ,
200 Commercial/Business $264.32 $3.43 $287,053
,
$1,270,451 1[ $1,557,504
300 Commercial/Restaurants $264.32 $6.80 $43,613
-,
$6408671
,8671 $684,480
$170,7001$185,766
$8,6241 $11,532
$65,9501 $67,536
$70,2001 $70,729
400 Institutional $264.32 $3.61 $15,066
500 Schools/Public $264.32 $2.78 $2,908
601 Special $264.32 $4.02 $1,586
602 Special $264.32 $5.31 $529
603 Special $264.32 $5.33 $264 $65,1341
$75,4091
$72,953
$65,398
$75,938
$74,275
604 Special. $264.32 $3.73 $529
$1,322 605 Special $264.32 $3.16
606 Special $264.32 $5.33 $264 $88,557 $88,821
607 Special $230.00 $0.00 $230 $0 $230
608 Special $264.32 $4.14 $264 $1,163 $1,427
609 Special $264.32 $1.68 $1,586 $1,027 $2,613
610 Special $264.32 $0.58 $264 $663 $927
612 Special $133.19 $0.00 $932 $0 $932
613_Special $264.32 $0.25 $264 $390 $654
614 Special
.fg,
,
$264.32 $2.99 $264
4,Z1 ,7 I
$2,387 t $2,651
...... ..
3. -18944O'
a a4:,,
1. The base charges reflect residential classes but are adjusted to overall collect 60% of all revenues.
2. Commodity charges are individually adjusted for each customer class to meet COS revenue requirements,
3. The total rate revenue collected from each customer class are the cost-of-service (COS) revenue requirement
4. Multi-Family base charges are 80% of Single-Family base charges based on the differences in per unit water
consumption. Multi-Family commodity rates are also adjusted to m eet the revenue requirements for this class.
Appendix B
B-8
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012
36 Base
Charges'
($/Yr)
Commodity
Rates ?.
($/h ct)
From Base
Charges'
From
Commodity
Rates 2
Total Annual
Revenue 3
Total Annual Rate Revenue
Customer Class
Proposed 20115-16 Sewer Rates Incorporating COS Revenue Requirements
including Rate COS-Adjusted Allocations to Base Charges and Commodity Rates
102 Multi-Family
4
$220.42 $1.25 $2,444,863 $794,090 1 $3,238,953
200 Commercial/Business $274.80 $3.56 $298,437 $1,321,367 $1,619,804
300 Commercial/Restaurants $274.80 $7.07 $45,343 $666,516 $711,859
400 Institutional $274.80 $3.76 $15,664
$3,023
$177,533 1 $193,197
$8,9671 $11,990 500 Schools/Public $274.80 $2.89
601 Special $274.80 $4.18 $1,649 $68,589 $70,238
602 Special $274.80 $5.53 $550 $73,008 $73,558
603 Special $274.80 $5.54 $275 $67,739 $68,014
604 Special $274.80 $3.88 $550 $78426J $78,976
$75,872, $77,246
-q
605 Special $274.80 $3.29 $1,374
606 Special $274.80 $5.55 $275 $92,099 $92,374
607 Special $240.00 $0.00 $240 $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 $0 6970
613 Special $274.80 $026 $275 $406 $681
614 Special $274.80 $3.11 $275 $2,482 $2,757
q,
-,-,-b-r-
, ,2
.3%
3,9-33.6 i
47%
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-9
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 ALLOCATION OF OPERATING EXPENSE FORECAST':
Allocation
Fixed
%'s
Variable
Allocation $s
'
Fixed Variable
_Perseavel!:SgetKeS 2
91
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 hsurance 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
miiiite4ino -8,0004tidns
512100 Office Expense $ 1,000 100% $ 1,000 $ -
512200 Printing & Binding 2,000 100% $ 2000 , $ -
512299 Postage & Delivery 10,000 100% $ 10,000 $ -
512400 Communications 7,106 100% $ 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 Mad Services - Special Examina 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
átaIMa1ntenance;tiOPijitjOnS 4,491 1O5
tii:KBOv hic4t__
- 009 Series A Revtr.nuc B00416. $ 1,64800
. , : . .
juo=, 1 (3 ij , .,, ulja $ -
41.746:4 :::104:ReivOluoigioi*.mer tr T,465052
4,74-063- $ _212612
This tot* is: used only to evaluale'the tOtapercertago of costs that are f ixorl vs torilblq, for rate deign purpOses.:
Appendix B
B-10
Sewer Rate Study - City of Culver City
Prepared by NBS - June 26, 2012 % of 2010
Volume
(Unadjusted)
692,263
747,379
370,658
94,232
47,221
3,107
107,860
2,0012P
33.6%
3E2%
18.0%
4.6%
2.3%
0.2%
5.2%
Development of the Volume Allocation Factor
Customer Class
Est. 2010 Volurne l
(ccf)
Adjusted2
Volume
Adjusted Vol.
Total (ccf)
Percent of
Adjusted Vol.
101 Single-Family
102 Multi-Earnily
200 Commercial/Business
300 Cornmercial/Restaurants
400 Institutional
500 Schools/Public
600 Commercial/Hotels
401,513
635,272
370,658
94,232
47,221
3,107
107,860
,05063
Target Total 3 (cot):
Ave. Annual Culver City Flow 4 (MGD
435,675
689,323
402,195
102,250
51,239
3,371
117,037
14$01:09_ .-
1,801,090
3.6910
24.2%
38.3%
22.3%
5.7%
28%
0.2%
6.5%
toomi
1. City-provided water use data (2011/12 Sevier 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 Commercial/Hotels
5,736
6,199
1,086
165
57
11
35
5,736
6,199
1,086
165
57
11
35
43A 6%
46.65%
8.17%
1.24%
0.43%
0.08%
026%
Total
Appendix B
B-11
Sewer Rate Study — City of Culver City
Prepared by NBS — June 26, 2012
3 Adjusted
Annual Flow
(cc f) 1
Avg Strength
Factor2 (rniall)
Calculated
BOD (lbfyr)
Adjusted BOD
(lb/yr)
Percent of
Total
Avg Strength
Factor2 (mgil)
Percent of
Total
Biochemical Oxygen Demand (BOD)
Total Suspended Solids (MS)
Customer Class
Calculated
TSS (1b/yr)
Adjusted TSS
(lbfyr)
Development of the Strength Allocation Factor
195
195
195
635
250
18D
250
101 Single-Family
102 Multi-Family
200 Commercial/Business
300 Commercial/Restaurants
400 Institutional
500 Schools/Public
600 Cornmercial/Hotels 3
Total
435,675
689,323
402,195
102,250
51,239
3,371
117 037
86090
529,986
838,543
489,259
405,045
79,911
2,734
182.529
529,986
838,543
489,259
405,045
79,911
2,734
182,529
478,347
756,839
441,588
405,045
31,964
2,103
142.372
478,347
21.18%
756,839
33.51%
441,588
19.55%
405,045
17.94%
31,964
1.42%
2,103
0.09%
142,372
6.30%
g15.000111- 400,F4;',;•
20,96%
33.17%
19.35%
16.02%
3.16%
0.11%
7.22%
635
100
195
4$24:01ft
3,007
1. Reflects irrigation credits for single-and multi-family classes.
2. Estimated BOD/TSS strength factors are from the City's 2003/04 Engineer's Report (Table 2).
3. Estimated BOD/TSS from City's 2003104 Engineers Report (Table 2):
Appendix B
Sewer Rate Study - City of Culver City
Prepared by NBS June 26, 2012
B-12