HomeMy WebLinkAboutItem 6b Adopt A Resolution Updating the 2025-26 and 2026-27 Sewer Rates Item 6b
Department: Utilities
Cost Center: 6101
For Agenda of: 6/17/2025
Placement: Public Hearing
Estimated Time: 20 minutes
FROM: Aaron Floyd, Utilities Director
Prepared By: Julie Ridgeway, Utilities Business Manager
SUBJECT: ADOPT A RESOLUTION UPDATING THE 2025-26 AND 2026-27 SEWER
RATES
RECOMMENDATION
1. Receive and file the City of San Luis Obispo Water and Wastewater Rate Study
Update Report, March 2025; and
2. Adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis
Obispo, California, Establishing the Sewer Service Rates for Financial Plan 2025-27”;
and
3. Find the action statutorily exempt from the California Environmental Quality Act
(CEQA) under Public Resources Code 21083 and 21080(b)(8) and State CEQA
Guidelines Section 15273 (Rates, Tolls, Fares, and Charges).
REPORT-IN-BRIEF
The City is proposing water and sewer (wastewater) rate increases consistent with the
requirements of California Constitution Article XIII C and D, commonly referred to as
Proposition 218 (“Prop 218”), the City’s Charter and Municipal Code, and City fiscal
policies. Sewer rates provide funding to the City’s Sewer Fund for the operation,
maintenance, and capital project needs commensurate with the costs to provide adequate
sewer services to the community. To meet projected revenue requirements for
operations, maintenance, and capital needs, sewer rates are proposed to increase 6.5
percent on July 1, 2025, and 6.5 percent on July 1, 2026.
This report, and the corresponding water rate report, are the second in a series of two
Council items scheduled for April 29, 2025 and June 17, 2025. This item, for the June 17,
2025 Council meeting would complete the rate setting process a nd recommends that
Council to consider receive and file the Water and Sewer rate study report, adopt a
resolution to modify the sewer rates, adopt a resolution to increase the City’s Customer
Assistance Program (CAP), and find the actions statutorily exempt from the California
Environmental Quality Act (CEQA), after conducting the public hearing and determining
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whether a majority protest has occurred. This follows the Introduction of the 2025-27
Water and Sewer Rates and Authorization to Release the Associated Proposition 218
Notice that Council considered on April 29, 2025.
POLICY CONTEXT
The City’s Sewer Fund operates as a self-sustaining enterprise fund, funded primarily
through customer rates and fees. In accordance with Prop 218, the proposed rates were
developed to recover the cost of providing sewer services without exceeding the
proportional cost to each parcel. This public hearing was noticed through the release of
the Prop 218 notices, mailed to all City property owners and water and/or sewer account
holders, and 45-day and 10-day legal ads and is being held following a 45-day notification
and protest period. At the conclusion of the public hearing scheduled for June 17, 2025,
the City Clerk will announce whether a majority protest exists. If a majority protest exists,
the City cannot proceed with the proposed change(s). If a majority protest does not exist,
the City has the authority to adopt the proposed sewer rates, which are recommended to
go into effect on July 1, 2025, and on July 1, 2026.
The proposed rates maintain the existing rate structures and align with City Council’s
previously adopted goals of fairness, revenue stability and predictability, and long-term
system sustainability (August 15, 2017; January 9, 2018). Rates also remain consistent
with the City’s fiscal policy to fully recover operational, capital, and debt service costs
(Section 3. Enterprise Fund Fees and Rates).
Under Government Code Section 53759, legal actions challenging resolutions amending
water or sewer fees or charges must occur within 120 days. Furthermore, under AB 2257,
legal objections to the proposed rates must be submitted in writing before June 16, 2025.
The City has complied with the requirements of AB 2257, which means ratepayers must
exhaust their administrative remedies prior to litigation. Legal challenges are limited to
those who submitted timely, valid objections to the proposed fee or assessment. To be
valid, legal objections must be in writing and include your name, address, signature, and
the legal basis for the objection. The legal objection must include sufficient detail to allow
the City to substantively respond to the objection. Any valid objections received will be
responded to in writing. Valid legal objections as well as the written responses will be
provided to City Council for their consideration as they pertain to the proposed rate
increases at the June 17th public hearing. Failure to submit a valid legal objection bars
any right to file a legal challenge to the proposed sewer rate s. Information regarding AB
2257 was included in the notices mailed to property owners and rate payers.
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DISCUSSION
Background
On April 29, 2025, the City Council received a presentation on the 2025 Water and
Wastewater Rate Study Updated Report, introducing the proposed water and sewer rate
adjustments, and authorized the release of a public notice consistent with Article XIII D of
the California Constitution and the Proposition 218 Omnibus Implementation Act (Prop
218).
The proposed sewer rate increases include 6.5% increases to the current rates each
fiscal year on July 1, 2025, and on July 1, 2026. These changes are similarly needed to
address growing costs of operations and maintenance, capital renewal, and stringent
environmental regulations. These rates support the City’s efforts to meet evolving
regulatory requirements, maintain critical infrastructure, and replace aging faciliti es to
ensure the continued safe and reliable treatment of wastewater. The adjustments are
essential to fund key upgrades, while also reducing reliance on debt for future
infrastructure needs. A full breakdown of the proposed sewer rates is included in Table 2
of the April 29, 2025 Council Agenda Report and the Draft Resolution Establishing the
Sewer Service Rates for Financial Plan 2025-27 (Attachment B) of this report.
The City of San Luis Obispo Water and Wastewater Rate Study Updated Report
(Attachment A of the April 29, 2025 Council Agenda Report) provides a comprehensive
analysis of the City’s water and sewer funds, including projected costs, customer
demands, and revenue for the upcoming Financial Plan period. City Council is being
asked to receive and file this report to formally acknowledge its use as the technical and
financial foundation for the proposed rate adjustments. Receiving and filing does not
adopt or approve the report’s recommendations as policy, it documents that the Council
has reviewed and considered the report’s findings as part of the rate-setting process and
ensures it is entered into the public record. Adoption of the proposed rates themselves
occurs through resolution and is a separate recommended action of this item.
In compliance with Prop 218, the City mailed 28,565 Prop 218 notices (Attachment B of
the April 29, 2025 Council Agenda Report) at the end of April 2025 to all property owners
and tenants directly liable to the City for payment of the water and/or sewer rates . Under
Prop 218, property owners of record and tenants directly liable to the City for payment of
the water and/or sewer rates may submit a written protest against the proposed changes
in the notice. Protests must be received by the close of the public hearing on June 17,
2025. At the conclusion of the public hearing, the City Clerk will announce whether a
majority protest exists. If a majority protest exists (50% + 1), the City cannot proceed with
the proposed changes. If a majority protest does not exist, the City has the authority to
adopt the proposed rate(s), which would go into effect on July 1, 2025, and July 1, 2026.
A majority of the City’s current 17,161 parcels is 8,580 plus one. As of June 9, 2025, a
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total of 323 protests against the proposed sewer rates had been received by the Office of
the City Clerk and validated. Protests are validated to confirm property ownership and
duplicated protests per parcel (i.e. an account holder and the property owner of the same
parcel both submitting a protest). The City Clerk will provide an updated summary of the
protests received at the conclusion of the public hearing on Ju ne 17, 2025.
As noted in the preceding water rate council agenda report (Item 7a), the amendment to
the City’s water and sewer Low-Income Assistance Program (“Customer Assistance
Program”) is accomplished through a single resolution presented in that report. Because
the program applies to both water and sewer charges, and to ensure consistency across
both enterprise funds, Council is asked to adopt this single resolution in the water item
only. No separate resolution is included in this report, and no separate adoption action is
needed here for the program update.
Previous Council or Advisory Body Action
On April 29, 2025, the City Council received a presentation introducing the proposed
water and sewer rate adjustments and authorized the release of a public notice consistent
with Article XIII D of the California Constitution and the Proposition 218 Omnibus
Implementation Act (Prop 218). The discussion emphasized the necessity of these
adjustments to meet revenue requirements to continue to provide sewer services and
planned capital improvement projects. The proposed sewer rate increases are structured
to address rising maintenance, regulatory, and operational costs, changes in anticipated
revenue, and fund critical capital projects. City Council also received the Strategic Budget
Direction from staff on April 15, 2025, which also shared information regarding the
proposed sewer rates, expenditures, and anticipated revenues.
Public Engagement
In compliance with Proposition 218, the City mailed 28,565 public hearing notices to all
identified parcel owners and utility account holders at the end of April. These notices
detailed the proposed water and sewer rate adjustments, explained the protest
procedure, and included a courtesy protest form that property owners or tenants directly
responsible for payment of the water and/or sewer bill could utilize to protest the rates, if
they so choose.
To further support community awareness and transparency, staff implemented an
extensive outreach campaign that included:
Updating the City’s water and sewer rates page (www.slocity.org/utilityrates) to
include background materials, a copy of the full rate study, rate calculators,
information about the City’s Customer Assistance Program, FAQs, and a
translated version of the Prop 218 notice into Spanish;
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Social media posts on the City’s social media channels and e-blast updates were
put out that included information in both English and Spanish;
A legal ad was published in New Times 10-days (Attachment D) and 45-days
(Attachment E) before the public hearing;
Flyers were shared with local community groups including Cuesta’s Basic Needs
Group, Cal Poly’s Off Campus Housing, the Central Coast Commission for Senior
Citizens, and the Latino Outreach Council;
Staff participated in interviews with local radio networks K-News (FM 98.5) and
KVEC (FM 96.5);
Staff presented to the Chamber of Commerce Legislative Action Committee on
April 10, 2025;
Staff attended Cal Poly’s ASI Community Engagement Day on May 6, 2025;
Staff shared information at the Public Works and Utilities Week event held at the
downtown SLO farmers market event on May 22, 2025;
Staff held a public information session at the Ludwick Community Center on June
4, 2025;
And staff responded directly to questions and concerns from customers and
property owners by phone, email, and in-person.
These efforts were aimed at informing the community about the need for the proposed
rate adjustments, explaining how the new rates were developed, and sharing information
about the City’s Customer Assistance Program to help income-qualified households with
their utility costs.
Customer Assistance Program
Prop 218 prohibits water and sewer providers from imposing fees that exceed the
proportional cost of service to a parcel. Therefore, revenues generated from fees
collected for sewer service cannot exceed the cost of providing sewer services nor can
they be used for an unrelated purpose. Thus, the City is unable to use rate collected funds
to provide low-income customer assistance programs. Given this constraint, the City uses
late fees paid by utilities customers who do not make their payments on time to fund its
Low-Income Assistance Program (commonly referred to today as the “Customer
Assistance Program (CAP)”).
Historically the City has conservatively budgeted $100,000 each year for the City’s sewer
CAP as this is within the forecasted amount of revenue received for miscellaneous
penalties (late fees) revenue each year (Table 1). Expenditures have historically been
significantly lower than the budgeted amount, averaging approximately $15,000 each
year.
As of May 12, 2025, of the 16,983 active water and sewer accounts in the City, 411
accounts were enrolled in the program and receive reduced rates. An increase in CAP
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enrollment occurred in the spring of 2025, following the launch of a new solid waste CAP
through the City’s solid waste hauler. The City’s Utilities Department has assisted the
garbage hauler with facilitating this program to make it easier for residents that qualify to
enroll in both programs. Due to the extensive outreach that occurred for the launch of the
solid waste CAP, the number of customers enrolled in the water and sewer CAP also
increased. Generally, there is also some, but relatively minimal, variability in the number
of customers enrolled from year to year as customers are required to renew their eligibility
status each year.
Table 1. Sewer Fund Customer Assistance Program (CAP) budget versus actuals for FY 2021-
22 through FY 2024-25.
FY 21-22 FY 22-23 FY 23-24 FY 24-25
Revenue Miscellaneous
Penalties $142,652 $138,014 $129,729 $115,391*
Budget Sewer Fund
CAP Budget $100,000 $100,000 $100,000 $100,000
Expenditures Sewer Fund
CAP Actuals $(13,437) $(15,225) $(16,464) $(12,483)*
% of Budget Utilized 13% 15% 16% 12%
Number of customers enrolled
for at least a portion of the FY 269 269 239 411**
*Revenue and expenditures for FY 2024-25 are as of May 16, 2025.
**An increase in customer assistance program enrollment during FY 2024-25 occurred in early
Spring due to the launch of the associated garbage CAP. Expenditures and percentage of budget
primarily reflect the CAP expenditures prior to this and are anticipated to approximately double
expenditures.
Given that the amount of funding provided has consistently remained underutilized, staff
recommend that Council adopt a resolution to increase the amount of discount that is
offered from 15% to 20%. 20% is inline with other customer assistance programs
throughout the county, including PG&E and the recently initiated CAP for solid waste. The
percentage provided through the City’s CAP for water and sewer services has not
increased since its adoption in 1992 (Resolution 8073; 1992 Series). Although the number
of enrolled customers has recently increased, staff still project that there is sufficient
budget to accommodate increasing the discount offered from 15% to 20%. The updated
resolution also formally changes the program name from the “Low Income Assistance
Program” to the “Customer Assistance Program”.
At the April 29, 2025 meeting, City Council requested staff to explore if there would be a
way to provide residents who live in multi-family properties, such as mobile home
communities, access to the CAP. This issue presents unique challenges as multi-family
properties, including mobile home parks, are often served by a single meter. This issue
is not unique to San Luis Obispo but creates an issue as individual households are not
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direct utility customers and thus not all residents receiving water/sewer service from the
meter may meet the program’s eligibility criteria. Thus, granting a blanket discount to the
entire account would be unequitable to the City’s other customers who are on their own
individual meter and do not meet the qualifications. Staff are evaluating potential
approaches, such as working with park operators to identify qualifying individual residents
and developing a proportional rebate mechanism or offering direct subsidies to
customers. These options would require additional staff time to either coordinate with the
mobile home park or manage a direct subsidy program with customers who are not
officially enrolled within the City’s utility billing system.
To ensure transparency, equitable distribution, and administrative feasibilit y, staff will
need to assess these alternatives and return to Council with recommendations at a future
date. Furthermore, although the current $100,000 budget is forecasted to be sufficient to
meet the recommendation to increase the budget from 15% to 20%, a more detailed
analysis would have to be done if the program were expanded to include additional groups
of qualified customers. Depending upon the subsidization level and scope of the CAP,
other funding sources such as contributions from the General Fund may be required. In
light of these considerations, the Resolution provided in Attachment C does not propose
to change the qualification provisions at this time.
CONCURRENCE
The City Attorney’s Office reviewed and approved the Prop 218 notice that was mailed
and the 2025 Rate Study Update and has been working with the Department to review
and respond to any Legal Objections received. The City’s Finance Department concurs
with the proposed sewer rate increases. The City Clerk’s Office concurs with associated
adherence to Prop 218 required procedures.
ENVIRONMENTAL REVIEW
Modification of rates and charges by public agencies are statutorily exempt from the
California Environmental Quality Act (CEQA) under Public Resources Code §§ 21083
and 21080(b)(8) and State CEQA Guidelines § 15273, as it involves the establishment of
rates to fund operating expenses and capital projects necessary to maintain service within
existing service areas. The change in rates is not intended to fund the expansion of capital
projects not otherwise evaluated under CEQA. Therefore, no environmental review is
required for this item.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-27
Funding Identified: Yes
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Item 7b
Fiscal Analysis:
The adoption of the proposed sewer service rates is projected to generate sufficient
revenue to cover the utility's operational expenses and fund necessary capital
improvements, ensuring continued compliance with regulatory standards and service
reliability. A full fiscal analysis for the proposed rates was included in the April 29, 2025
Introduction of the 2025-27 Water and Sewer Rates and Authorization to Release the
Associated Proposition 218 Notice.
The proposed sewer rate adjustments themselves do not require an additional budget
allocation from the City Council beyond what is already included in the proposed 2025-
27 Financial Plan. The Utilities Department has budgeted for the development of the rate
study and incorporated the recommended rates into the forecasted revenues for the next
two fiscal years. As such, this item is listed as “Budgeted: Yes” to reflect that sufficient
funding is already included in the budget to implement the rates, and no additional
appropriation is being requested.
ALTERNATIVES
1. Council could decide to deny the proposed sewer rate adjustments. If there is no
majority protest, Council could still choose to not adopt new rates at this time. If the
City Council does not approve the recommended rates, this option would maintain
current rates beyond their planned financial planning horizon and would result in
underfunding of planned capital improvements and operating expenditures. Staff
would need to revise the Sewer Fund’s Capital Improvement Plan as the Sewer Fund
would not have enough funding to implement the proposed Capital Improvement Plan .
Staff would need to re-engage the consultant to revise the plan based on revenue
projections with no rate increases. The City’s bond rating could also decrease if
insufficient revenues were to be received, which could hinder the City’s ability to obtain
low-interest loans for capital projects.
2. Council could decide to reduce the amount of the proposed sewer rate
increases. If there is no majority protest, Council could opt to adopt lower rate
increase than those recommended. If this alternative is selected, staff would work with
the consultant to revise the Capital Improvement Plan to meet the proposed rate
increases as directed by Council and return with a revised resolution and updated
financial projections. This would require deferral of key projects, which would likely
impact the system with potential failures and could impact the Sewer Fund rating due
to less than market expectations in terms of infrastructure replacement.
3. Council could decide to delay the effective date of the proposed sewer rates.
Council could approve the rates but delay their implementation beyond July 1, 2025 ,
and July 1, 2026. While this would provide relief to customers for a period of time , it
would reduce projected revenue and may impact the timing or scope of planned
infrastructure projects or lead to higher rate increases in the future. Staff would need
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Item 7b
to update the revenue forecasts and potentially adjust project CIP schedules
accordingly.
4. Council could request revisions to the proposed rate structure or study
assumptions. Currently no changes to the rate structure are proposed. While budget
has been requested to conduct a full cost-of-service analysis and rate structure review
with the next rate study that is planned for the 2027 -29 financial planning period,
Council could direct staff to work with the rate consultant to further evaluate or modify
rate design elements or underlying financial assumptions now. If this option were to
be requested for the currently proposed rates, this would significantly delay
implementation and require funding to explore an update to the cost-of-service
analysis and conduct a new Proposition 218 process, including re-noticing and an
additional public hearing.
5. Council could modify or choose to not adopt the proposed changes to the
Customer Assistance Program. A decision to not adopt the proposed changes to
the Customer Assistance Program would preserve the existing program and discount
level as-is, maintaining the fiscal impact to the Sewer Fund. However, it would not
expand financial relief for income-qualified customers, which would help offset the
impact of the proposed rate increases for low-income community members. Direction
to modify the proposed changes to the Customer Assistance Program may create
risks to the budgeted funding allocated to the program, depending on the direction
provided.
ATTACHMENTS
A - City of San Luis Obispo Water and Wastewater Rate Study Updated Report (HDR;
March 2025)
B - Draft Resolution Establishing the Sewer Service Rates for Financial Plan 2025 -27
C - Draft Resolution to Amend the City of San Luis Obispo Low Income Assistance
Program for City Residents
D - 10-day Legal Notice
E - 45-day Legal Notice
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City of San Luis Obispo
Water & Wastewater Rate Study Update
March 2025
Draft Report
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hdrinc.com
900 108th Ave NE, Suite 1200, Bellevue, WA 98004
T 425-450-6200
March 21, 2025
Mr. Aaron Floyd
Utilities Director
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401
Subject: Water & Wastewater Rate Study Update Draft Report
Dear Mr. Floyd:
HDR Engineering, Inc. (HDR) is pleased to present to the City of San Luis Obispo (City) the draft
report for the 2025 Water and Wastewater Rate Study Update (2025 Update). In 2023, the City
and HDR developed a comprehensive water and wastewater rate study (2023 Rate Study). Given
the development of the 2023 Rate Study - which proposed cost-based rates for the next two-year
period - the cost of service results from the 2023 Rate Study were used as the basis for the
proposed rates for FY 2023-24 and FY 2024-25. It is important to note that the 2023 Rate Study
developed a 5-year projection, however, only the first two years were adopted. For the 2025
Update, the revenues and expense, both operating and capital, of the water and wastewater
utilities were updated in order to match the updated customer characteristics and costs of
providing water and wastewater services to the City’s customers. The 2025 Update outlines the
overall approach used to achieve these objectives, along with our findings, conclusions, and
recommendations.
The costs associated with providing water and wastewater services to the City’s customers was
developed based on the City’s specific information and is included within the development of the
proposed rates. The 2025 Update was developed utilizing generally accepted rate setting
principles and methodologies. This report provides the basis for developing and implementing
water and wastewater rates which are cost-based and proportional to the City’s customers. We
appreciate the assistance provided by the City’s project team in the development of this study.
More importantly, HDR appreciates the opportunity to provide these technical and professional
services to the City of San Luis Obispo.
Sincerely,
HDR Engineering, Inc.
Josiah Close
Utility Rates Project Manager
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Table of Contents i
City of San Luis Obispo – Water & Wastewater Rate Study Update
Table of Contents
Introduction ........................................................................................................................ 1
Overview of the Rate Study Process .................................................................................... 1
Key Water & Wastewater Rate Study Results ...................................................................... 2
Summary of the Water Revenue Requirement Analysis....................................................... 3
Summary of the Water Cost of Service Analysis................................................................... 5
Summary of the Water Rate Design .................................................................................... 5
Summary of the Water Rate Study Update .......................................................................... 6
Summary of the Wastewater Revenue Requirement Analysis ............................................. 7
Summary of the Wastewater Cost of Service Analysis ......................................................... 9
Summary of the Wastewater Rate Design ......................................................................... 10
Summary of the Wastewater Rate Study Update .............................................................. 11
2.1 Introduction ............................................................................................................ 13
2.2 Water Revenue Requirement.................................................................................. 13
2.2.1 Determining the Water Revenue Requirement ............................................. 13
2.2.2 Projecting Rate and Miscellaneous Revenues ............................................... 13
2.2.3 Projecting Operation and Maintenance Expenses ......................................... 14
2.2.4 Projection of Debt Service ............................................................................ 14
2.2.5 Projecting Rate Funded Capital ..................................................................... 15
2.2.6 Summary of the Water Revenue Requirement ............................................. 16
2.2.7 Reserve Levels .............................................................................................. 18
2.2.8 Consultant’s Conclusion of the Revenue Requirement ................................. 18
2.3 Water Cost of Service Analysis Summary ................................................................ 18
2.4 Water Rate Design .................................................................................................. 19
2.4.1 Development of Cost-Based Water Rates ..................................................... 19
2.4.2 Overview of the Water Rate Structure .......................................................... 20
2.4.3 Present and Proposed Water Rates .............................................................. 20
2.5 Summary of the Water Rate Study Update ............................................................. 21
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Table of Contents ii
City of San Luis Obispo – Water & Wastewater Rate Study Update
3.1 Introduction ............................................................................................................ 23
3.2 Wastewater Revenue Requirement ........................................................................ 23
3.2.1 Determining the Revenue Requirement ....................................................... 23
3.2.2 Projecting Rate and Other Miscellaneous Revenues ..................................... 23
3.2.3 Projecting Operation and Maintenance Expenses ......................................... 24
3.2.4 Projecting Capital Funding Needs ................................................................. 24
3.2.5 Projection of Debt Service ............................................................................ 26
3.2.6 Summary of the Wastewater Revenue Requirement .................................... 26
3.2.7 Reserve Levels .............................................................................................. 27
3.2.8 Consultant’s Conclusions .............................................................................. 28
3.3 Wastewater Cost of Service Analysis Summary ....................................................... 28
3.4 Wastewater Rate Design ......................................................................................... 28
3.4.1 Development of Cost-Based Wastewater Rates ............................................ 28
3.4.2 Overview of the Wastewater Rate Structure ................................................ 29
3.4.3 Present and Proposed Wastewater Rates ..................................................... 30
3.5 Summary of the Wastewater Rate Study Update .................................................... 31
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Executive Summary 1
City of San Luis Obispo - Water & Wastewater Rate Study Update
Executive Summary
Introduction
HDR Engineering, Inc. (HDR) was retained by the City of San Luis Obispo (City) to conduct a
comprehensive water and wastewater rate study update (2025 Update). The objectives of the
2025 Update were to:
Develop a projection of water and wastewater revenues to support the City’s operating
and capital costs
Proposed cost-based and proportional rates for a multi-year time period
The City owns, operates, and maintains the water and wastewater systems which provide
services to its customers. The costs associated with providing water and wastewater services to
City’s customers has been developed based on the provided information and is included within
the development of the proposed rates.
For the 2025 Update, the cost of service results from the 2023 Comprehensive Water and
Wastewater Rate Study were utilized, specifically the proportional distribution of costs. The
revenues and expense of the water and wastewater utilities were updated in order to match the
updated customer characteristics and costs of the utilities. It is important to note that the results
shown in this report are based on information available at “a point in time”. That is to say that, if
the information available at a later date has changed, then the results of the analysis would likely
also change or differ from those presented in this report.
Overview of the Rate Study Process
A comprehensive rate study uses three interrelated analyses to address the adequacy and equity
of each utility’s rates. These three analyses are a revenue requirement analysis, a cost of service
analysis, and a rate design analysis. These three analyses are illustrated below in Figure ES - 1.
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Executive Summary 2
City of San Luis Obispo - Water & Wastewater Rate Study Update
Figure ES – 1
Overview of the Comprehensive Water & Wastewater Rate Analyses
The above basic framework was used in the development of this study for reviewing and
evaluating the City’s water and wastewater rates. For the 2025 Update, the revenue requirement
and rate design analyses were updated for each utility based on current operating and capital
expenses and recent customer characteristics. As noted previously, for the 2025 Update, the cost
of service results from the 2023 Rate Study were utilized to establish the proportionality of the
City’s water and wastewater rates.
Key Water & Wastewater Rate Study Results
The water and wastewater study’s technical analyses were developed based on the operating
and capital costs necessary to provide service to City’s customers. The analyses performed
resulted in the following findings, conclusions, and recommendations.
A revenue requirement analyses were developed for the water and wastewater utilities
over from FY 2024-25 through FY 2034-35
The City’s adopted FY 2024-25 budget was used as the starting point of the analyses for
both utilities
Operation and maintenance expenses are projected to increase at inflationary levels
Proposed rates were developed, for each utility reflected the proportionality as
developed in the 2023 Rate Study
9 The proposed water revenue adjustment is 5.5% in FY 2025-26 and FY 2026-27
9 The proposed wastewater revenue adjustment is 6.5% in FY 2025-26 and FY 2026-27
Revenue Requirement Analysis
Cost of Service Analysis
Rate Design Analysis
Compares the revenues to the expenses of
the utility to determine the overall rate
adjustment required
Distributes the revenue requirement to the
customer classes of service in a
proportional manner
Considers both the level and structure
of the rate design to collect the target
level of revenues
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Executive Summary 3
City of San Luis Obispo - Water & Wastewater Rate Study Update
Summary of the Water Revenue Requirement Analysis
A revenue requirement analysis is the first analytical step in the development of the water rate
study. This analysis determines the adequacy of the level of current water rates for the City. From
this analysis, a determination can be made as to the overall level of water revenue adjustments
needed to provide adequate and prudent funding for both operating and capital needs.
For the 2025 Update, the revenue requirement was developed based on the adopted FY 2024-
25 budget and then projected from FY 2025-26 to FY 2034-35 using a “cash basis” approach. The
cash basis approach includes an analysis of O&M expenses, transfers, debt service, rate funded
capital, and to/from reserve funding. The primary financial inputs in the development of the
revenue requirement analysis were the City’s Water Fund Analysis, historical billed customer and
consumption data, and the current water system capital improvement plan.
The operating and maintenance expenses were developed for the projected time period, based
on the adopted FY 2024-25 budgeted expenses and historical inflationary factors. The next step
was to develop the water capital funding plan. For the 2025 Update, the City developed a capital
improvement plan based on the needs of the water system. This plan identified the projects
necessary to maintain the water system as well as projects necessary to meet new growth and
expansion of the system. It is important to note that the City’s development impact fees will
contribute towards the growth related portions of the applicable capital improvement projects.
Provided below in Table ES - 1 is a summary of the water capital funding plan over the planning
period based on the capital plan at the time of the study development.
Table ES – 1
Summary of the Water Capital Funding Plan ($000s)
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
Total Capital Projects $24,379 $7,911 $5,470 $12,970 $6,975 $17,598
Other Funding Sources
Reserves $19,580 $4,164 $1,920 $3,770 $0 $1,198
Grants 3,517 3,748 0 0 0 0
Long-Term Debt 0 0 0 5,000 0 9,250
Total Other Funding Sources $23,097 $7,911 $1,920 $8,770 $0 $10,448
Rate Funded Capital $1,282 $0 $3,550 $4,200 $6,975 $7,150
The financial plan developed for the City’s water utility has placed the rate funded capital level
at $1.3 million in FY 2024-25 increasing to $7.2 million by FY 2029-30. This level of funding was
calculated based on the long-term need to prudently fund replacement and repair of the existing
water system. As can be seen, the difference between annual capital needs and rate funded
capital, when apparent, is being funded through other funding sources. The other funding
sources include reserve funds and long-term debt issuance; however, the City prefers to limit
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City of San Luis Obispo - Water & Wastewater Rate Study Update
debt issuances if at all possible. However, given the nature, and level, of the capital projects,
additional long-term debt is projected during the next five-year time period. A more detailed
discussion of the capital funding plan can be found in Section 2.2.5 of the report.
The revenue requirement analysis for the City’s water utility was developed to determine the
necessary revenues to meet the costs of providing water service to the customers based on the
specific costs of the water utility. Provided below, in Table ES – 2, is a summary of the water
revenue requirement analysis (financial plan).
Table ES - 2
Summary of the Water Revenue Requirement ($000s)
FY 2024-
25
FY 2025-
26
FY 2026-
27
FY 2027-
28
FY 2028-
29
FY 2029-
30
Revenues
Rate Revenues $25,793 $25,999 $26,207 $26,417 $26,628 $26,841
Other Revenues 2,799 2,885 2,947 3,031 3,118 3,210
Total Revenues $28,592 $28,884 $29,154 $29,447 $29,746 $30,051
Expenses
Total O & M $25,838 $30,313 $27,113 $28,246 $27,030 $28,850
Net Debt Service 1,469 1,466 1,455 1,455 1,778 1,790
Rate Funded Capital 1,282 0 3,550 4,200 6,975 7,150
To / (From) Reserves 3 (1,466) (3) 2 11 4
Total Revenue Requirement $28,592 $30,314 $32,116 $33,903 $35,794 $37,794
Total Bal. / (Def.) of Funds $0 ($1,430) ($2,962) ($4,456) ($6,048) ($7,743)
Balance a % of Rate Adj. Req'd 0.0% 5.5% 11.3% 16.9% 22.7% 28.8%
Proposed Rate Adjustment 0.0% 5.5% 5.5% 5.0% 5.0% 5.0%
Add'l Revenue with Rate Adj. $0 $1,430 $2,962 $4,456 $6,048 $7,743
Bal. / (Def.) After Rate Adj. $0 $0 ($0) $0 $0 $0
As can be seen, the water revenue requirement has summed O&M, rate funded capital, net debt
service, and transfers to / (from) reserves. It is important to note that the “net” in net debt service
refers to the use of development impact fees to pay for debt service which results in a reduction
in the total debt serve expense. The total revenue requirement is then compared to the total
sources of funds which are the rate revenues, at present rate levels, and other miscellaneous
revenues. From this comparison a balance or deficiency of funds in each year can be determined.
This deficiency of funds is then compared to the projection of rate revenues, at “normal”
consumption levels, to determine the level of revenue adjustment needed to meet the costs of
providing water service. It is important to note the “Bal. / (Def.) of Funds” row is cumulative. That
is, any adjustments in the initial years will reduce the deficiency in the later years. Over the five-
year projected period, rate revenues will need to be adjusted to reflect the projected operating
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City of San Luis Obispo - Water & Wastewater Rate Study Update
and capital needs. For the two-year rate setting period of FY 2025-26 and FY 2026-27 rate
revenues need to be increased 5.5% in each year. A more detailed analysis of the water revenue
requirement can be found in Section 2.2 of this report.
Summary of the Water Cost of Service Analysis
A cost of service analysis determines the proportional distribution of the revenue requirement
costs to the customer classes of service (e.g., residential, multi-family, non-residential, irrigation)
and the manner to collect that revenue requirement from each class of service.
Given the development of the cost of service for the 2023 Rate Study, and the implementation
of the cost of service results for the FY 2023-24 adopted water rates, the cost of service analysis
was not updated as part of the effort for the 2025 Update. Based on the results of the 2023 Rate
Study, the proposed water rates maintain the results of the 2023 Rate Study and are cost-based
and proportional between the customer classes of service.
Summary of the Water Rate Design
The final step of the 2025 Update is the development of proposed water rates to collect the
desired levels of revenue, based on the results of the previous tasks. The 2023 Rate Study
established specific customer classes of service and rates based on the cost of service results for
the residential, multi-family, non-residential, and irrigation customers. The rate structure
adopted includes a monthly fixed charge that varies by meter size and a consumption charge
established through the cost of service analysis for each customer class of service and by tier,
where applicable.
Given the implementation of cost of service rates in the 2023 Rate Study, and the projection of
rates for the subsequent four-year period, the 2025 Update maintained the existing rate
structure and cost of service adjustments as outlined in the 2023 Rate Study, only the level of the
proposed rates were revised to reflect the current operating and capital costs. Provided in Table
ES - 3 is a summary of the present and proposed water rates for the next two rate setting years.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
Table ES - 3
Summary of the Present and Proposed Water Rates
Present
Rate
FY
2025-26
FY
2026-27
Proposed Rate Revenue Adjustment 5.5% 5.5%
Fixed Charge - $/Month
Residential $30.25 $31.91 $33.67
MF / Non-Res / Irr
3/4" & Less $30.25 $31.91 $33.67
1" 50.50 53.28 56.21
1 1/2" 100.80 106.34 112.19
2" 161.30 170.17 179.53
3" 302.60 319.24 336.80
4" 504.45 532.19 561.46
6" 1,008.60 1,064.07 1,122.59
8" 1,613.85 1,702.61 1,796.25
Usage Charge – $/Unit
Residential
0 – 5 CCF $8.54 $9.01 $9.51
5 – 12 CCF 9.84 10.38 10.95
12 + CCF 16.97 17.90 18.88
Multi-Family $9.58 $10.11 $10.67
Non-Residential $10.14 $10.70 $11.29
Irrigation $10.35 $10.92 $11.52
Note: 1 unit = 1 CCF = 748 gallons
As can be seen, the rate structure was maintained and only the level of the rates was adjusted.
Again, the updated rates reflect the cost of service analysis and proportionality developed in the
2023 Rate Study.
Summary of the Water Rate Study Update
Based on the results of the 2025 Update, HDR developed the following conclusions and
recommendations.
Based on the revenue requirement, HDR concluded that the City will need to adjust the level of
water rate revenues. HDR reached this conclusion for the following reasons:
Revenue adjustments are necessary to meet the operating and capital costs of providing
water service to City’s customers
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The proposed revenue adjustments maintain the City’s financial health and provide long-
term sustainable funding levels
Based on the results of the cost of service analysis, HDR made the following conclusions and
provided the following recommendations:
The 2023 Rate Study cost of service analysis reflects the current customer characteristics
The proposed cost of service adjustments from the 2023 Rate Study are maintained in the
development of the proposed FY 2025-26 and FY 2026-27 water rates
Finally, HDR reached the following conclusions and provided the following recommendations for
the proposed water rates:
The proposed water rates reflect the overall costs of providing water service (i.e., cost-
basis)
The current rate structure reflects contemporary and industry standard approaches
City should review the water rates biannually in order to assess revenue sufficiency
In summary, HDR recommends the City adopt the proposed water rates for FY 2025-26 and FY
2026-27 as developed in the 2025 Update to provide to provide sufficient funding for the
operating expenses and capital improvement program needs for the water utility.
Summary of the Wastewater Revenue Requirement Analysis
As with the City’s water utility, the wastewater utility revenue requirement analysis is the first
analytical step in the process. The revenue requirement analysis determines the adequacy of the
current wastewater rates to fund current and future operating and capital needs. From this
analysis, a determination can be made as to the overall level of rate revenue adjustments needed
to provide adequate and prudent funding for the wastewater system.
For the 2025 Update, the revenue requirement was developed for the time period of FY 2024-25
– FY 2034-35 using a “cash basis” approach. The “cash basis” approach is the most commonly
used methodology by municipal utilities to set their revenue requirement and is composed of
O&M expenses, transfers, debt service payments, rate funded capital, and to/from reserve
funding. The primary financial inputs in the development of the revenue requirement were the
City’s FY 2024-25 budget documents, historical billed customer and water consumption data, and
the capital improvement plan. Budgeted O&M expenses were projected using inflationary factors
for the City’s expenses to provide collection and treatment services over the projected time
period.
The proper and adequate funding of capital projects is important to help minimize rate increases
over time. As a part of the 2025 Update, and in keeping with the best practices for capital project
funding approach, a concerted effort was made to increase the overall level of “pay-as-you-go”
(rate) funding and to avoid debt financing to the extent practical. Pay-as-you-go funding from
rates refers to spending cash on hand that the utility collects from charging the water rates to it’s
customers and is specifically earmarked to fund capital projects, often those deemed as renewal
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City of San Luis Obispo - Water & Wastewater Rate Study Update
and replacement. Provided below in Table ES - 4 is a summary of the wastewater capital funding
plan for the five-year rate setting period.
Table ES – 4
Summary of the Wastewater Capital Funding Plan ($000s)
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
Total Capital Projects $32,117 $8,251 $7,163 $4,581 $5,139 $6,348
Less: Other Funding Sources
Capital Reserves $31,402 $8,161 $6,188 $2,481 $1,964 $1,223
Long-Term Debt 0 0 0 0 0 0
Total $31,402 $8,161 $6,188 $2,481 $1,964 $1,223
Rate Funded Capital $715 $90 $975 $2,100 $3,175 $5,125
This financial plan has placed the City’s rate funding for capital from a low of $90,000 in FY 2025-
26 to a maximum of $5.1 million in FY 2029-30. This level of rate funded capital over the projected
time prudently funds the planned capital replacement needs. Given the level of capital
improvements for the wastewater system the City has assumed the need for long-term debt
issuances to fund capital improvements. In developing this financial plan. The wastewater capital
funding plan is described in further detail in Section 3.2.4 of the report.
Given a projection of operating and capital expenses, a summary of the revenue requirement
analysis was developed. Provided below in Table ES - 5 is a summary of the revenue requirement
analysis (financial plan) for the City’s wastewater utility.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
Table ES - 5
Summary of the Wastewater Revenue Requirement ($000s)
FY 2024-
25
FY 2025-
26
FY 2026-
27
FY 2027-
28
FY 2028-
29
FY 2029-
30
Revenues
Rate Revenues $19,141 $19,294 $19,448 $19,604 $19,761 $19,919
Other Revenues 2,092 1,216 1,256 1,260 1,269 1,345
Total Revenues $21,233 $20,510 $20,705 $20,864 $21,030 $21,264
Expenses
Total O & M $13,809 $14,994 $15,483 $16,029 $16,632 $17,260
Rate Funded Capital 715 90 975 2,100 3,175 5,125
Net Debt Service 6,706 6,799 6,790 6,788 6,787 6,170
To / (From) Reserves 3 (119) 67 23 96 80
Total Revenue Requirement $21,233 $21,764 $23,315 $24,941 $26,690 $28,635
Bal./(Deficiency) of Funds $0 ($1,254) ($2,610) ($4,077) ($5,661) ($7,372)
Balance as % of Rev from Rates 0.0% 6.5% 13.4% 20.8% 28.6% 37.0%
Proposed Rate Adjustments 0.0% 6.5% 6.5% 6.5% 6.5% 6.5%
Add'l Revenue with Rate Adj. $0 $1,254 $2,610 $4,077 $5,661 $7,372
Bal. / (Def.) After Rate Adj. $0 $0 $0 $0 $0 $0
As can be seen, the revenue requirement has summed the O&M, rate funded capital, net debt
service, and to / (from) reserves. It is important to note that the “net” in net debt service refers
to the use of development impact fees to pay for debt service which results in a reduction in the
total debt serve expense. The total revenue requirement is then compared to the total revenues
which include the rate revenues - at present rate levels - and other miscellaneous revenues. From
this comparison a balance or deficiency of funds in each year can be determined. This balance or
deficiency of funds is then compared to the rate revenues to determine the level of rate
adjustment needed to meet the revenue requirement. It is important to note the “Bal. / (Def.) of
Funds” row is cumulative. For the two-year rate setting period of FY 2025-26 and FY 2026-27,
rate revenues need to be increased 6.5% each year.
Summary of the Wastewater Cost of Service Analysis
A cost of service analysis determines the proportional distribution of the revenue requirement
to the City’s customer classes of service (i.e., residential, multi-family, non-residential). The
objective of the cost of service analysis is to determine the proportional manner to collect the
revenue requirement based on each customer class’s wastewater characteristics.
Given the development of the cost of service for the 2023 Rate Study, and the implementation
of the cost of service results for the FY 2023-24 adopted wastewater rates, the cost of service
analysis was not updated. Based on the results of the 2023 Rate Study, the proposed FY 2025-26
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City of San Luis Obispo - Water & Wastewater Rate Study Update
and FY 2026-27 rates maintain the results of the 2023 Rate Study and are cost-based and
proportional.
Summary of the Wastewater Rate Design
The final step of the 2025 Update is the development of proposed wastewater rates to collect
the desired levels of revenue, based on the results of the previous tasks. The 2023 Rate Study
established specific customer classes of service and rates based on the cost of service results for
the residential, multi-family, and non-residential customers. The current rate structure includes
a monthly fixed charge that varies by meter size and a consumption charge established through
the cost of service analysis. Residential and multi-family customers are billed the usage charge
up to the customer’s average winter water use. Non-residential customers are billed the usage
charge on all metered water consumption because separate irrigation meters are, or can be,
installed so that the metered water consumption reflects the contributions to the wastewater
system.
Given the implementation of cost of service rates in the 2023 Rate Study, and the projection of
rates for the subsequent four-year period, the 2025 Update maintained the existing rate
structure and cost of service adjustments as outlined in the 2023 Rate Study, and only the level
of the rates were updated to reflect updated expenses and revenue projections. Provided in
Table ES - 6 is a summary of the present and proposed wastewater rates for the next two rate
setting years.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
Table ES – 6
Summary of the Present and Proposed Wastewater Rates
Present Rates FY 2025-26 FY 2026-27
Fixed Charge - $/Month
Residential $24.52 $26.11 $27.81
MF / Non-Res
3/4" & Less $24.52 $26.11 $27.81
1" 40.95 43.61 46.44
1 1/2" 81.65 86.96 92.61
2" 130.70 139.20 148.25
3" 245.21 261.15 278.12
4" 408.76 435.33 463.63
6" 817.28 870.40 926.98
8" 1,307.70 1,392.70 1,483.23
10" 1,880.02 2,002.22 2,132.36
Usage Charge - $/Unit
Residential / Multi-Family
(up to sewer cap) $9.82 $10.46 $11.14
Non-Residential (all usage) $10.27 $10.94 $11.65
Note: 1 unit = 1 CCF = 748 gallons
As can be seen, the rate structure has been maintained and only the level of the rates has been
adjusted. Again, the updated rates reflect the cost of service analysis results in the 2023 Rate
Study and maintain the proportional relationships. The primary difference is the higher overall
revenue adjustment necessary to fund operating and capital needs for the next two-year period.
Summary of the Wastewater Rate Study Update
Based on the results of the 2025 Update, HDR developed the following conclusions and
recommendations.
Based on the revenue requirement, HDR concluded that the City will need to adjust the level of
wastewater rate revenues. HDR reached this conclusion based on the following:
Revenue adjustments are necessary to meet the operating costs of providing wastewater
service to the City’s customers
Revenue adjustments are necessary to provide adequate funding of the City’s capital
projects on a “pay-as-you-go” basis for renewal and replacement needs
The proposed revenue adjustments maintain the City’s financial health and provide long-
term sustainable funding levels
Based on the results of the cost of service analysis, HDR made the following conclusions and
provided the following recommendations:
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City of San Luis Obispo - Water & Wastewater Rate Study Update
The 2023 Rate Study cost of service analysis reflects the current customer characteristics
The proposed cost of service adjustments from the 2023 Rate Study are maintained in the
development of the proposed FY 2025-26 and FY 2026-27 wastewater rates
Finally, HDR has reached the following conclusions and provided the following recommendations
for the proposed wastewater rates:
The proposed rates reflect the overall costs of providing wastewater service (i.e., cost-
based)
The current rate structure reflects contemporary and industry standard approaches
City should review the wastewater rates biannually in order to assess sufficiency
In summary, HDR recommends the City adopt the proposed wastewater rates for FY 2025-26 and
FY 2026-27 as developed in this report to provide sufficient funding for the operating expenses
and capital improvement program needs for the wastewater utility.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
Development of the Water Analysis
2.1 Introduction
This section describes the development of the City’s water utility 2025 Update. The basis for the
study was the City’s adopted budget (FY 2024-25), current capital improvement plan, historical
customer consumption data, and water system operating characteristics. Based on the City’s
specific costs, and customer characteristics, cost-based water rates were developed to prudently
fund the water utility. Provided in this section is the detailed summary of the 2025 Update for
the City’s water utility and proposed water rates for FY 2025-26 and FY 2026-27.
2.2 Water Revenue Requirement
The City provided detailed revenue and expenses data for the water system that allowed for the
development of the revenue requirement. The revenue requirement analysis is the first analytical
step in the comprehensive rate study process. This analysis determines the adequacy of the City’s
overall water rates at current rate levels. From this analysis, a determination can be made as to
the overall level of revenue (rate) adjustment needed to provide adequate and prudent funding
for operating, debt service, and capital needs over the long-term. HDR developed an independent
analysis based on information provided by the City to develop the 2025 Update conclusions and
recommendations.
2.2.1 Determining the Water Revenue Requirement
In developing the City’s water revenue requirement, the water utility, must financially “stand on
its own” and be properly funded. That is, no rate revenues are being transferred from other City
funds or enterprises in order to support the water utility. As a result, the water revenue
requirement analysis assumes the full and proper funding needed to operate and maintain the
water system on a financially sound and prudent basis.
2.2.2 Projecting Rate and Miscellaneous Revenues
The City receives revenue from two primary sources: water rates and other revenues. Water rate
revenues are based on the current water rate structure and the current customer data. Other
revenue includes items such as interest, recycled water sales, fees, and miscellaneous revenues.
The City is projected to receive approximately $25.8 million in water rate revenues in FY 2024-
25. The projection of revenue is based on the recent customer consumption levels and adopted
water rates. HDR worked with the City to update the consumption levels of each customer class
of service for the 2025 Update. Over the planning horizon of the 2025 Update, customer growth
is expected to be around 0.8% resulting in a slight increase in the projection of water rate
revenues to approximately $26.8 million by FY 2029-30.
In addition to rate revenues, the City also receives a variety of other revenues including significant
sources in California Polytechnical State University (Cal Poly) and recycled water sales. Other
revenues are projected to be approximately $2.8 million in FY 2024-25. Other revenues are
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City of San Luis Obispo - Water & Wastewater Rate Study Update
expected to increase over the review period and are projected to be approximately $3.2 million
by FY 2029-30.
On a combined basis - taking into account both rate revenues and other revenues - the City’s
total projected water revenues are projected to be approximately $28.6 million in FY 2024-25,
increasing to approximately $30.1 million by FY 2029-30. It is important to note that these
revenue projections do not include rate revenue adjustment, and the increase is the result of
assumed customer growth on the water system as well as interest earned on cash reserves.
2.2.3 Projecting Operation and Maintenance Expenses
Operation and maintenance (O&M) expenses are incurred by the City to operate and maintain
the water system. The costs incurred in this area are expensed during the current year and are
not capitalized or depreciated. In general, O&M expenses are grouped into a number of different
functional categories. To begin the process of projecting O&M expenses over the planning
horizon, HDR utilized the future projected expenses from the City’s fund analysis for the water
utility. Total water O&M expenses for the City are projected to be approximately $25.8 million in
FY 2024-25. Water O&M expenses are projected to increase to approximately $28.7 million by
FY 2029-30 as a result of estimated inflation over the time period as well as capital projects
related to the source of supply at Nacimiento, Salinas, and Whale Rock that are expensed
annually. The escalation of costs is based on the assumptions from the City’s fund analysis.
2.2.4 Projection of Debt Service
Debt can serve a variety of functions for the utility. For example, long-term debt can provide
intergenerational equity as the assets purchased with the debt are paid for by the current
customers utilizing the services over time. Additionally, issuing long-term debt can help to
moderate rate impacts over time lessening the impact of capital projects by spreading the cost
out over a longer time period as compared to cash, or pay as you go, financing.
The City’s water utility currently has two existing long-term debt issuances and the annual debt
service for FY 2024-25 is approximately $1.9 million in total. Over the review period of FY 2024-
25 through FY 2029-30, the City has estimated the need to issue additional long-term debt to
fund capital improvement projects. The total debt service increases over the review period and
reaches to $2.5 million by FY 2029-30. It is important to note that there are also debt service
costs related to Nacimiento that is included in the water source of supply O&M budget which
reflects the City’s fund analysis approach. The 2025 Update assumes that $400,000 of annual
development impact fee revenues are used to offset annual debt service payments. This is done
in order to offset the impact of new customer growth on the water resources, treatment plant,
and distribution system.
As a note, HDR is not acting as a municipal advisor as it relates to bonds, terms, or structures of
debt issuance. Rather, the 2025 Update identifies the existing annual debt service payments and
projection future funding needs based on the City’s projection of long-term borrowing terms and
conditions.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
2.2.5 Projecting Rate Funded Capital
A key component in the development of the water revenue requirement was adequately funding
capital replacement needs. One of the major issues facing many utilities across the U.S. is the
amount of deferred capital projects and the funding pressure from renewal and replacement of
capital infrastructure projects. The proper and adequate funding of capital projects is an
important issue for all water utilities and is not just a local issue or concern of the City.
In general, there are three types of capital projects that a utility may need to fund. These include
the following types:
Renewal and replacement projects
Growth / capacity expansion projects
Regulatory-related projects
A renewal and replacement project is a project required for maintaining the existing system that
is in place today. As the existing plant or pipelines become worn out, obsolete, etc., the utility
should be making continuous investments to maintain the integrity of the facilities. To address
these needs, the City developed a capital improvement plan (CIP) which aides in identifying and
prioritizing capital replacement of the system. The CIP also includes projects to expand the
capacity of facilities to accommodate future capacity needs (customers). Finally, certain projects
may be a function of a regulatory requirement in which the Federal or State government
mandates the need for an improvement to the system to meet a regulatory standard.
Understanding these different types of capital projects is important because the way in which
projects are funded may vary by the type of capital project. For example, renewal and
replacement projects may be paid for via rates and funded on a “pay-as-you-go basis”. In contrast
to this, growth or capacity expansion projects may be funded via the collection of development
impact fees (i.e. growth-related charges) in which new development pays a proportional share
of the cost of facilities necessary to serve their development (impact). Finally, regulatory projects
may be funded by a variety of different means, which may include rates, long-term debt, grants,
etc.
Provided in Table 2 - 1 is the detail of the capital funding plan for the City’s water system that is
included within the development of the proposed revenue requirement.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
Table 2 – 1
Summary of the Water Capital Funding Plan ($000s)
FY 2024-
25
FY 2025-
26
FY 2026-
27
FY 2027-
28
FY 2028-
29
FY 2029-
30
Total Source of Supply $1,140 $2,496 $159 $164 $506 $1,681
Total Water Treatment 1,675 1,183 819 583 5,121 13,538
Total Water Distribution 4,655 4,116 4,371 12,203 748 2,295
Total Administration (40) 116 121 20 344 84
CIP Carryover 16,949 0 0 0 0 0
Unidentified Future Capital 0 0 0 0 0 0
Transfer to Cash Reserve 0 0 0 0 255 0
Total Capital $24,379 $7,911 $5,470 $12,970 $6,975 $17,598
Less: Other Funding Sources
Capital Fund Reserves $19,580 $4,164 $1,920 $3,770 $0 $1,198
Prop 1B Revenue 3,517 3,748 0 0 0 0
Assumed New Long-Term Debt 0 0 0 5,000 0 9,250
Total Other Funding Sources $23,097 $7,911 $1,920 $8,770 $0 $10,448
Rate Funded Capital $1,282 $0 $3,550 $4,200 $6,975 $7,150
As can be seen in Table 2 - 1, the funding level for projects vary from year-to-year. While the total
amount required to fund a project may vary from year to year, the rate study capital funding plan
has attempted to provide a consistent funding source for capital improvements. In this case, rates
will annually fund an amount ranging from $0 in FY 2024-25 to $7.2 million in FY 2029-30 (as
shown in Table 2 - 1). As a point of reference, the City’s annual depreciation expense is
approximately $3.3 million for FY 2022-23. A desirable and recommended minimum funding
target for rate funded capital is an amount equal to or greater than annual depreciation expense.
The level of capital funding through rates has been developed to reflect the capital replacement
needs of the City over the review period balanced with the use of available reserves and the
issuance of long-term debt. In developing this financial plan, HDR and the City have attempted
to minimize rate impacts while funding the planned capital replacement projects of the water
system.
2.2.6 Summary of the Water Revenue Requirement
Given the above projections of revenues and expenses, a summary of the City’s water revenue
requirement analysis can be developed. In developing the revenue requirement analysis,
consideration was given to the financial planning considerations of the City. In particular,
emphasis was placed on minimizing rates yet still having adequate funds to support the
operational activities and capital replacement needs throughout the projected time period.
Detailed exhibits of this analysis can be found in the Water Technical Appendix Exhibits 1 - 5.
Provided in Table 2 – 2 is a summary of the revenue requirement analysis performed for the City’s
water utility.
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City of San Luis Obispo - Water & Wastewater Rate Study Update
Table 2 - 2
Summary of the Water Revenue Requirement ($000s)
FY 2024-
25
FY 2025-
26
FY 2026-
27
FY 2027-
28
FY 2028-
29
FY 2029-
30
Revenues
Rate Revenues $25,793 $25,999 $26,207 $26,417 $26,628 $26,841
Other Revenues 2,799 2,885 2,947 3,031 3,118 3,210
Total Revenues $28,592 $28,884 $29,154 $29,447 $29,746 $30,051
Expenses
Total O & M $25,838 $30,313 $27,113 $28,246 $27,030 $28,850
Net Debt Service 1,469 1,466 1,455 1,455 1,778 1,790
Rate Funded Capital 1,282 0 3,550 4,200 6,975 7,150
To / (From) Reserves 3 (1,466) (3) 2 11 4
Total Revenue Requirement $28,592 $30,314 $32,116 $33,903 $35,794 $37,794
Total Bal. / (Def.) of Funds $0 ($1,430) ($2,962) ($4,456) ($6,048) ($7,743)
Balance a % of Rate Adj. Req'd 0.0% 5.5% 11.3% 16.9% 22.7% 28.8%
Proposed Rate Adjustment 0.0% 5.5% 5.5% 5.0% 5.0% 5.0%
Add'l Revenue with Rate Adj. $0 $1,430 $2,962 $4,456 $6,048 $7,743
Bal. / (Def.) After Rate Adj. $0 $0 ($0) $0 $0 $0
The revenue requirement for the City’s water utility has summed the O&M, rate funded capital,
net debt service, and to / (from) reserves. It is important to note that the “net” in net debt service
refers to the use of development impact fees to pay for debt service which results in a reduction
in the total debt serve expense. The total revenue requirement is then compared to the total
revenues which are the rate revenues, at present rate levels, and other miscellaneous revenues.
From this comparison a balance or deficiency of funds in each year can be determined. This
balance or deficiency of funds is then compared to the rate revenues to determine the level of
rate revenue adjustment needed to meet the revenue requirement.
The revenue requirement developed in Table 2 - 2 was developed to meet financial planning
objectives of the City. More specifically, the City’s need to adequately and prudently fund water
utility operating and capital needs. Table 2 - 2 also includes a set of proposed rate revenue
adjustments (blue band) which, based on the study assumptions, are sufficient to meet the total
revenue requirement over the projected time period. Over the next two-year period, the period
for which rates are being proposed, the total deficiency of revenues is 11.3%. The proposed
revenue adjustments are a function of assumed inflation over this time period, coupled with the
funding of identified capital improvement needs, and meet minimum reserve and debt service
coverage ratio levels. If water revenue adjustments are not implemented, the City will not have
sufficient funding to prudently operate and maintain the water system.
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2.2.7 Reserve Levels
A key component of determining the financial health and long-term sustainability of the City’s
water utility is to review the level of available reserves after the proposed rate adjustments.
Reserves play many different purposes. For the City’s water utility, the reserve funds are in place
to meet the City’s ongoing cash flow needs as well as meeting target minimum levels established
by the City’s financial policies. For the operating fund, a target of 20% of annual O&M expenses
is utilized and is approximately $5.2 million in FY 2024-25. There is currently no capital
component of the target, however, a general rule of thumb is to set a minimum equal to the
average annual capital project funding needs, excluding “one-time” major projects (e.g., water
treatment plant upgrade). For the review period (FY 2024-25 through FY 2029-30), the average
annual capital is approximately $9.6 million. Over the same time period, the capital fund reserve
averages an ending balance of $9.9 million. The final component of the target for the reserve
funds is the rate stabilization component which is 10% of rate revenues and for FY 2024-25 is
$2.6 million. Over the projected time period the City meets the minimum target reserve fund
balances. It is important for the City to review the reserve funds annually and maintain target
minimums.
2.2.8 Consultant’s Conclusion of the Revenue Requirement
HDR concludes that the City will need to adjust the level of water rate revenues as noted in Table
2-2. Provided below are the conclusions and recommendations of the water revenue
requirement:
Revenue adjustments are necessary to meet the operating and capital costs of providing
water service to City’s customers
The proposed revenue adjustments maintain the water utility’s financial health and
provide long-term, sustainable funding levels
The City should review the level of water rate revenues biannually in order to assess
sufficiency
The revenue requirement developed above has indicated the need for annual revenue increases
to adequately fund the City’s operating, debt service, and capital needs for the water utility. The
proposed increases are necessary to adequately and prudently fund the City’s needs.
2.3 Water Cost of Service Analysis Summary
The next step in the 2025 Update is the review of the cost of service analysis. A cost of service
analysis proportionally distributes the costs of providing water service between the City’s
customer classes of service based on the approaches outlined in the American Water Works M1
Manual. The 2023 Rate Study resulted in the establishment of customer classes of service and
the City Council adopted rates that included cost of service adjustments.
Given the completion of the comprehensive analysis in the 2023 Rate Study, and the FY 2023-24
water rates adopted by the City Council being based on the cost of service results, the 2025
Update maintained the prior study cost of service relationships for the development of proposed
water rates for FY 2025-26 and FY 2026-27.
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2.4 Water Rate Design
The final step of the 2025 Update is the development of proposed water rates to collect the
desired levels of revenue, based on the results of the previous tasks. As noted, the 2023 Rate
Study established specific customer classes of service and rates based on the cost of service
results for the residential, multi-family, non-residential, and irrigation customers. The 2025
Update is a continuation of the 2023 Rate Study and reflects the updated customer consumption
characteristics and projection of revenue needs. Provided below is a discussion of the
development of the proposed water rates for FY 2025-26 and FY 2026-27.
2.4.1 Development of Cost-Based Water Rates
Developing cost-based and proportional rates is of paramount importance in the development
of the proposed water rates. While always a key consideration in developing rates, meeting the
legal requirements, and documenting the steps taken to meet the requirements, has been in the
forefront with the recent legal challenges in the State of California on utility rates. Given this, the
City’s proposed water rates have been developed to meet the legal requirements of California
constitution article XIII D, section 6 (Article XIII D), or Proposition 218. A key component of Article
XIII D is the development of rates which reflect the cost of providing service and are
proportionally allocated among the customer classes of service. The American Water Works
Association (AWWA) M1 Manual clearly delineates various methodologies which may be used to
establish cost-based rates. HDR reviewed the City’s proposed water rates based on the
methodologies provided in the AWWA M1 Manual to meet the requirements of Article XIII D and
an administrative record of the steps taken to establish the City’s water rates.
HDR is of the opinion that the noticed rates comply with legal requirements of Article XIII D. HDR
reached this conclusion based upon the following:
x The revenue derived from water rates does not exceed the funds required to provide the
property related service (i.e., water service). The proposed rates are designed to collect the
overall revenue requirements of the City’s water utility.
x The revenues derived from water rates shall not be used for any purpose other than that
for which the fee or charge is imposed. The revenues derived from the City’s water rates are
used exclusively to operate and maintain the City’s water system.
x The amount of a fee or charge imposed upon a parcel or person as an incident of property
ownership shall not exceed the proportional costs of the service attributable to the parcel.
The cost of service analysis in the 2023 Rate Study was specifically developed to focus on the
issue of proportional assignment of costs to customer classes of service, and this study
maintains the cost of service relationships and proportionality. The proposed rates have
appropriately grouped customers into customer classes of service (residential, multi-family,
commercial, irrigation) that reflect the varying consumption patterns and system
requirements of each customer class of service. The grouping of customers and rates into
these classes of service creates the equity and proportionality expected under Article XIII D
by having differing rates by customer classes of service which reflect both the level of revenue
to be collected by the utility, but also the manner in which these costs are incurred and
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City of San Luis Obispo - Water & Wastewater Rate Study Update
equitably assigned to customer classes of service based upon their proportional impacts and
burdens on the City’s water system and/or water resources. The 2025 Update has continued
the results of the 2023 Rate Study cost of service results.
2.4.2 Overview of the Water Rate Structure
As mentioned, the 2023 Rate Study established the current rate structure based on the customer
classes of service and cost of service results. The rate structure is based on the customer classes
of service with each having a unique rate structure.
For residential customers, the structure includes a monthly flat fixed charge and a three-tier
consumption charge. As part of the 2025 Update, the tiers were reviewed and compared to
recent consumption patterns. It was determined the tiers established in the 2023 Rate Study
continue to reflect current consumption patterns. Given this, the sizing of the tiers was
maintained and only the pricing of the tiers was adjusted to reflect the overall revenue needs.
The multi-family rate structure includes a monthly fixed based on meter size and a uniform
consumption charge. This rate structure reflects the customer characteristics of the multi-family
customers.
The non-residential customer rate structure includes a fixed charge that varies by meter size and
a uniform consumption charge. However, the consumption charge specifically reflects the
characteristics of the non-residential customers and will vary from the multi-family and irrigation
customer consumption charges.
Finally, the irrigation customers will have the same fixed meter charge by meter size as multi-
family and non-residential but again, the uniform consumption charge will be unique to the
irrigation customer class and consumption characteristics.
2.4.3 Present and Proposed Water Rates
Given the implementation of cost of service rates in the 2023 Rate Study, and the 2025 Update
projection of rates for the subsequent two-year period (FY 2025-26 through FY 2026-27), the
2025 Update maintains the existing rate structure and cost of service adjustments as outlined in
the 2023 Rate Study. Provided in Table 2 - 3 is a summary of the present and proposed water
rates for the next two rate setting years.
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Table 2 - 3
Summary of the Present and Proposed Water Rates
Present
Rate
FY
2025-26
FY
2026-27
Proposed Rate Revenue Adjustment 5.5% 5.5%
Fixed Charge - $/Month
Residential $30.25 $31.91 $33.67
MF / Non-Res / Irr
3/4" & Less $30.25 $31.91 $33.67
1" 50.50 53.28 56.21
1 1/2" 100.80 106.34 112.19
2" 161.30 170.17 179.53
3" 302.60 319.24 336.80
4" 504.45 532.19 561.46
6" 1,008.60 1,064.07 1,122.59
8" 1,613.85 1,702.61 1,796.25
Usage Charge – $/Unit
Residential
0 – 5 CCF $8.54 $9.01 $9.51
5 – 12 CCF 9.84 10.38 10.95
12 + CCF 16.97 17.90 18.88
Multi-Family $9.58 $10.11 $10.67
Non-Residential $10.14 $10.70 $11.29
Irrigation $10.35 $10.92 $11.52
Note: 1 unit = 1 CCF = 748 gallons
As can be seen, the rate structure was maintained and only the level of the rates was adjusted to
reflect the 2025 Update revenue needs. Again, the updated rates reflect the proportionality
developed in the cost of service analysis as part of the 2023 Rate Study.
2.5 Summary of the Water Rate Study Update
Based on the results of the 2025 Update, HDR developed the following conclusions and
recommendations.
Based on the revenue requirement, HDR concludes that the City will need to adjust the level of
water rate revenues. HDR reached this conclusion for the following reasons:
Revenue adjustments are necessary to meet the operating and capital costs of providing
water service to City’s customers
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The proposed revenue adjustments maintain the City’s financial health and provide long-
term sustainable funding levels
Based on the results of the cost of service analysis, HDR made the following conclusions and
recommends:
The proposed cost of service adjustments from the 2023 Rate Study are maintained in the
development of the proposed FY 2025-26 and FY 2026-27 water rates
Finally, HDR reached the following conclusions and recommends the proposed water rates:
The proposed water rates reflect the overall costs of providing water service (i.e., cost-
based)
The current rate structure reflects contemporary and industry standard approaches
City should review the water rates biannually in order to assess sufficiency
In summary, HDR recommends the City adopt the proposed water rates for FY 2025-26 and FY
2026-27 as developed in this 2025 Update to provide to provide sufficient funding for the
operating expenses and capital improvement program needs for the water utility.
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City of San Luis Obispo – Water & Wastewater Rate Study Update
Development of the Wastewater Analysis
3.1 Introduction
This section describes the development of the City’s wastewater utility 2025 Update. The basis
for the study was the City’s wastewater adopted budget, current capital improvement plan,
historical customer data, system operation characteristics, and 2023 Rate Study cost of service
results. Based on the City’s specific costs, and customer characteristics, cost-based rates were
developed to prudently fund the wastewater utility. Provided in this section is the detailed
summary of the City’s wastewater rate study 2025 Update.
3.2 Wastewater Revenue Requirement
This section describes the development of the revenue requirement analysis for the City’s
wastewater utility. The revenue requirement analysis is the first analytical step in the 2025
Update process. From this analysis, a determination can be made as to the overall level of rate
adjustments needed to provide adequate and prudent funding for both the operating and capital
needs of the wastewater utility. The primary objective of the 2025 Update is to develop cost-
based and proportional rates while attempting to minimize the impacts to the utility’s customers.
3.2.1 Determining the Revenue Requirement
In developing the City’s wastewater revenue requirement, the utility, must financially “stand on
its own” and be properly funded. That is, revenues are not being transferred from other City
enterprise or general funds to support the wastewater utility. As a result, the revenue
requirement analysis assumes the full and proper funding needed to operate and maintain the
wastewater system on a financially sound and prudent basis.
3.2.2 Projecting Rate and Other Miscellaneous Revenues
In total, the City’s wastewater utility is projected to receive approximately $19.1 million in rate
revenue in FY 2024-25. Over the review period, the study has assumed 0.8% annual customer
growth. Based on current rates, and estimated customer growth, the FY 2029-30 rate revenues
are projected to be approximately $19.9 million.
In addition to rate revenues, the City also receives miscellaneous revenues. These are revenues
related to interest income, Cal-Poly charges, fees, permits, etc. In total, the City is projected to
receive approximately $2.1 in FY 2024-25 in miscellaneous revenues. The 2025 Update assumes
no growth of other or miscellaneous revenues; however, other revenues do decrease over the
review period as the revenues from Cal Poly decrease. In FY 2025-26, it is projected that the City
will receive approximately $1.3 million in other revenues, a reduction of approximately $800,000
due to the decrease in Cal-Poly wastewater flows to the City.
On a combined basis - taking into account the rate revenues and the miscellaneous revenues -
the City’s wastewater utility has total projected revenues of approximately $21.2 million in FY
2024-25, increasing to approximately $21.3 million by FY 2029-30 as a result of estimated growth
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as noted above. The assumptions used for growth can be found in Exhibit 2 of the Technical
Appendix.
3.2.3 Projecting Operation and Maintenance Expenses
Operation and maintenance (O&M) expenses are incurred by the City to maintain the wastewater
collection and treatment system. The starting point of the projection of O&M expenses was the
adopted FY 2024-25 budget. Budgeted O&M expenses were projected over the 2025 Update time
period based on the City’s wastewater fund analysis. The total O&M expenses budgeted for the
wastewater utility are projected to be $13.8 million in FY 2024-25. Over the review period, the
total O&M expenses are projected to increase to approximately $17.3 million by FY 2029-30 with
the expected inflationary impacts.
3.2.4 Projecting Capital Funding Needs
A key component in the development of the wastewater revenue requirement was properly and
adequately funding capital improvement needs. One of the major issues facing many utilities
across the U.S. is the amount of deferred capital projects and the funding pressure from
growth/expansion-related and regulatory improvements. The proper and adequate funding of
capital projects is an important issue for all utilities and is not just a local issue or concern of the
City.
In general, there are three types of capital projects that the City may need to fund. These include
the following types:
Renewal and replacement projects
Growth/capacity expansion projects
Regulatory-related projects
A renewal and replacement project is essentially maintaining the existing system that is in place
today. As the City’s existing wastewater collection system and Water Resource Recovery Facility
(WRRF) reaches the end of its useful life, becomes obsolete, etc., the City should be making
continuous investments to maintain the integrity of its facilities. Currently, the City has developed
capital improvement plan which will help guide and prioritize capital projects over time.
Additionally, the City may make capital investments to expand the capacity of facilities to
accommodate future customers. The capital improvement plan outlines the City’s strategy to
address needs systematically, so that timing and necessity of improvements aligns appropriately
with other projects throughout the City. Finally, certain projects may be a function of a regulatory
requirement in which the Federal or State government mandates the need for an improvement
to the system to meet a regulatory standard, such as that of the recent WRRF upgrade project.
Understanding these different types of capital projects is important because it helps to explain
why costs are increasing and the cost drivers for any needed rate adjustment. In addition, and
more importantly, the way in which projects are funded may vary by the type of capital project.
For example, renewal and replacement projects may be paid for via rates and funded on a “pay-
as-you-go basis”. In contrast to this, growth or capacity expansion projects may be funded
through the collection of connection fees (i.e., growth-related charges) in which new
development pays a proportional and equitable share of the cost of improvements required as a
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City of San Luis Obispo – Water & Wastewater Rate Study Update
result of their connection (impact). Finally, regulatory projects may be funded by a variety of
different means, which may include rates, long-term debt, grants, etc.
While the above discussion appears to neatly divide capital projects into three clearly defined
categories, the reality of working with specific capital projects may be more complex. For
example, a pump may be replaced, but while being replaced, it is up-sized to accommodate
greater capacity. There are many projects that share these “joint” characteristics. At the same
time, projects may not be “replacement” related, but rather “improvement” related. Provided
below in Table 3 - 1 is a summary of the wastewater capital funding Plan.
Table 3 – 1
Summary of the Wastewater Capital Funding Plan ($000s)
FY 2024-
25
FY 2025-
26
FY 2026-
27
FY 2027-
28
FY 2028-
29
FY 2029-
30
Total Wastewater Collection $7,487 $5,432 $5,164 $4,453 $4,654 $6,179
Total Water Resource Recovery
Facility (6,438) 2,770 1,878 55 56 128
Total Miscellaneous 65 50 121 74 429 42
CIP Carryover 31,003 0 0 0 0 0
Unidentified Future Capital Projects 0 0 0 0 0 0
Transfer to Cash Reserve 0 0 0 0 0 0
Total $32,117 $8,251 $7,163 $4,581 $5,139 $6,348
Less: Other Funding
Capital Reserves $31,402 $8,161 $6,188 $2,481 $1,964 $1,223
Add’l Long-Term Debt 0 0 0 0 0 0
Total $31,402 $8,161 $6,188 $2,481 $1,964 $1,223
Rate Funded Capital $715 $90 $975 $2,100 $3,175 $5,125
While the total amount of a project may vary from year to year, this wastewater capital funding
plan has attempted to provide a consistent funding source for the replacement fund. In this case,
the utility’s rates will annually fund an amount ranging from $90,000 to $5.1 million. As a point
of reference, the City’s annual depreciation expense is approximately $2.8 million in FY 2022-23.
It is important that in order to minimize rate impacts, wastewater capital has been delayed for
several years. A desirable funding target for rate funded capital is an amount equal to or greater
than annual depreciation expense. It is important to note and understand that depreciation
expense is not the same as replacement cost. Thus, funding an amount which exceeds
depreciation expense is both prudent and appropriate. As noted, to help establish a prudent level
of annual replacement funding through rates, HDR worked with City staff to develop a funding
plan for the capital projects. In developing this financial plan, HDR and the City have attempted
to minimize rate impacts while funding the planned capital replacement projects of the City.
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City of San Luis Obispo – Water & Wastewater Rate Study Update
3.2.5 Projection of Debt Service
The City’s wastewater utility currently has four outstanding long-term debt issuances, and one is
retired in FY 2028-29. The existing debt service for FY 2024-25 is $7.0 million, of which $5.8M is
for the City’s SRF loan for the WRRF upgrade project. As with the water utility, annual wastewater
development impact fee revenues are assumed at $300,000 to offset the debt service. This is
done in order to offset the impact of new customer growth on the wastewater system and results
in next debt service of approximately $6.7 million in FY 2024-25. With the retirement and the
addition of future long-term issuances, debt service is expected to decrease slightly and be
approximately $6.5 million by FY 2029-30 with net debt service after development impact fee
contribution to $6.2 million.
3.2.6 Summary of the Wastewater Revenue Requirement
Given the above projections of revenues and expenses, a summary of the wastewater revenue
requirement analysis can be developed. In developing the revenue requirement analysis,
consideration was given to the financial planning considerations of the City. In particular,
emphasis was placed on attempting to minimize rates yet still have adequate funds to support
the operational activities and capital projects throughout the projected time period. Presented
below in Table 3 – 2 is a summary of the City’s projected wastewater revenue requirement.
Detailed exhibits of this analysis can be found in the Technical Appendix (Exhibits 1 – 5).
Table 3 - 2
Summary of the Wastewater Revenue Requirement ($000s)
FY 2024-
25
FY 2025-
26
FY 2026-
27
FY 2027-
28
FY 2028-
29
FY 2029-
30
Revenues
Rate Revenues $19,141 $19,294 $19,448 $19,604 $19,761 $19,919
Other Revenues 2,092 1,216 1,256 1,260 1,269 1,345
Total Revenues $21,233 $20,510 $20,705 $20,864 $21,030 $21,264
Expenses
Total O & M $13,809 $14,994 $15,483 $16,029 $16,632 $17,260
Rate Funded Capital 715 90 975 2,100 3,175 5,125
Net Debt Service 6,706 6,799 6,790 6,788 6,787 6,170
To / (From) Reserves 3 (119) 67 23 96 80
Total Revenue Requirement $21,233 $21,764 $23,315 $24,941 $26,690 $28,635
Total Bal. / (Def.) of Funds $0 ($1,254) ($2,610) ($4,077) ($5,661) ($7,372)
Balance a % of Rate Adj. Req'd 0.0% 6.5% 13.4% 20.8% 28.6% 37.0%
Proposed Rate Adjustment 0.0% 6.5% 6.5% 6.5% 6.5% 6.5%
Add'l Revenue with Rate Adj. $0 $1,254 $2,610 $4,077 $5,661 $7,372
Bal. / (Def.) After Rate Adj. $0 ($0) $0 ($0) $0 $0
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As can be seen, the revenue requirement has summed the O&M, rate funded capital, net debt
service, and to / (from) reserves. It is important to note that the “net” in net debt service refers
to the use of development impact fees to pay for debt service which results in a reduction in the
total debt serve expense. The total revenue requirement is then compared to the total sources
of funds which include the rate revenues, at present rate levels, and other miscellaneous
revenues. From this comparison a balance or deficiency of funds in each year can be determined.
This balance or deficiency of funds is then compared to the rate revenues to determine the level
of rate adjustment needed to meet the revenue requirement. It is important to note the “Bal. /
(Def.) of Funds” row is cumulative. That is, adjustments in the initial years will reduce the
deficiency in the later years.
The overall level of wastewater rate revenues should be increased to prudently fund the
wastewater system operating, debt service, and capital needs. The revenue requirement
developed in Table 3 - 2 has been developed to meet financial planning objectives of the City.
More specifically, the City desires to adequately and prudently fund its wastewater operating
and capital needs. Table 3 - 2 has also included a set of proposed rate revenue adjustments (blue
band) which are sufficient to meet the total revenue requirement over the projected time period.
Over the next two year period, the period for which rates are being proposed, the total deficiency
of revenues is 13.4%. The proposed revenue adjustments are a function of assumed inflation over
this time period coupled with the need to fund capital improvement needs (renewal and
replacement funding) and meet minimum reserve and debt service coverage ratio levels. If
wastewater revenue adjustments are not implemented, the City will not have sufficient funding
to prudently operate and maintain the system or meet the financial requirements of issuing long-
term debt for the WRRF Project.
3.2.7 Reserve Levels
As with the water utility, a key element of determining the financial health and sustainability of
the City’s wastewater utility is to review the level of available reserve levels after the proposed
revenue adjustments. The reserve funds are established by the City’s financial policies and in
place to meet the wastewater utility annual cash flow needs as well as accomplishing a number
of target minimum reserve levels. For the operating fund, a target of 20% of annual O&M
expenses and is approximately $2.8 million in FY 2024-25. The capital fund does not currently
have an established target, but prudent planning approaches often view an average year of
capital expenses as a general rule of thumb. The average capital from FY 2024-25 through FY
2029-30 is approximately $6.4 million and over this time period the capital fund average balance
is about $11.4 million and is trending down in the last few years. The final component is the rate
stabilization fund which has a target of 5.0% of rate revenues and for FY 2024-25 is approximately
$957,000. Over the projected time period the City is meeting the minimum target levels for each
of the reserve funds.
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3.2.8 Consultant’s Conclusions
Based on the revenue requirement, HDR concluded that the City will need to adjust the level of
wastewater rate revenues over the next two-year period. HDR reached this conclusion for the
following reasons:
Revenue adjustments are necessary to meet the operating and capital costs of providing
wastewater service to City’s customers
The proposed revenue adjustments maintain the City’s financial health and provide long-
term sustainable funding levels
The City should review the level of wastewater rate revenues biannually in order to assess
sufficiency
In reaching this conclusion, HDR recommends that the City adjust revenue levels in FY 2025-26
and FY 2026-27 to provide sufficient funding for annual O&M and the capital improvement
program.
3.3 Wastewater Cost of Service Analysis Summary
The next step in the 2025 Update is the review of the cost of service analysis. A cost of service
analysis proportionally distributes the costs of providing wastewater service between the
customer classes of service based on the approaches outlined in the Water Environment
Federation Manual of Practice No. 27 (WEF MOP #27). The 2023 Rate Study resulted in the
establishment of customer classes of service and the City Council adopted rates that included
cost of service adjustments.
Given the completion of the 2023 Rate Study, and the rates adopted by the City Council being
based on the cost of service results, this Study maintained the prior cost of service relationships
for the development of proposed wastewater rates for FY 2025-26 and FY 2026-27.
3.4 Wastewater Rate Design
The final step of the 2025 Update is the development of proposed wastewater rates to collect
the desired levels of revenue, based on the results of the previous tasks. The 2023 Rate Study
established specific customer classes of service and rates based on the cost of service results for
the residential, multi-family, and non-residential customers. The 2025 Update is a continuation
of the 2023 Rate Study and reflects the updated customer consumption characteristics and
projection of revenue needs. Provided below is a discussion of the development of the proposed
wastewater rates for FY 2025-26 and FY 2026-27.
3.4.1 Development of Cost-Based Wastewater Rates
Developing cost-based and proportional rates is of paramount importance in the development
of the proposed wastewater rates. While always a key consideration in developing rates, meeting
the legal requirements, and documenting the steps taken to meet the requirements, has been in
the forefront with the recent legal challenges in the State of California on utility rates. Given this,
the City’s proposed wastewater rates have been developed to meet the legal requirements of
California constitution article XIII D, section 6 (Article XIII D), or Proposition 218. A key component
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of Article XIII D is the development of rates which reflect the cost of providing service and are
proportionally allocated among the customer classes of service. The Water Environment
Federation Manual of Practice No. 27 outlines the methodologies which may be used to establish
cost-based rates. HDR reviewed the City’s proposed wastewater rates based on the
methodologies provided in the WEF MOP #27 to meet the requirements of Article XIII D to
provide an administrative record of the steps taken to establish the City’s wastewater rates given
the results and implementation of the 2023 Rate Study.
HDR is of the opinion that the noticed rates comply with legal requirements of Article XIII D. HDR
reaches this conclusion based upon the following:
x The revenue derived from wastewater rates does not exceed the funds required to provide
the property related service (i.e., wastewater service). The proposed rates are designed to
collect the overall revenue requirement of the City’s wastewater utility.
x The revenues derived from wastewater rates shall not be used for any purpose other than
that for which the fee or charge is imposed. The revenues derived from the City’s wastewater
rates are used exclusively to operate and maintain the City’s wastewater system.
x The amount of a fee or charge imposed upon a parcel or person as an incident of property
ownership shall not exceed the proportional costs of the service attributable to the parcel.
The cost of service analysis in the 2023 Rate Study was specifically developed to focus on the
issue of proportional assignment of costs to customer classes of service, and the 2025 Update
maintains the cost of service relationships and proportionality. The proposed rates have
appropriately grouped customers into customer classes of service (residential, multi-family,
non-residential) that reflect the varying consumption patterns and system requirements of
each customer class of service. The grouping of customers and rates into these classes of
service creates the proportionality expected under Article XIII D by having which reflect both
the level of revenue to be collected by the utility, but also the manner in which these costs
are incurred and equitably assigned to customer classes of service based upon their
proportional impacts and burdens on the City’s wastewater system. The 2025 Update is a
continuation and based on the results of the 2023 Rate Study.
3.4.2 Overview of the Wastewater Rate Structure
As mentioned, the 2023 Rate Study established the proportionality of the current rate structure
based on the customer classes of service and cost of service results. The rate structure was based
on the characteristics of each customer classes of service.
For residential customers, the structure includes a monthly flat fixed charge, and a volume charge
up to each individual customer’s average winter water use (also referred to as the “sewer cap”).
Since wastewater volumes are not metered, average winter water use is used to reflect the
volumes, or amounts, of wastewater contributed to the wastewater system for collection and
treatment. In this way, customers are billed for the contributions to the wastewater system and
not for outdoor watering amounts in the summer. Annually, the City updates the average winter
water consumption for each customer. These values are then used for the subsequent rate year
to develop the customer bill.
Page 469 of 994
Wastewater Rate Study Update 30
City of San Luis Obispo – Water & Wastewater Rate Study Update
Multi-family customers includes a monthly fixed charge that varies based on meter size and a
volume charge up to each individual customer’s average winter water use. Winter water
consumption values for each multi-family customer are determined using the same methodology
as those for residential customers.
The non-residential rate structure includes a monthly fixed charge that varies based on meter
size and a uniform consumption charge based on all metered water consumption. For non-
residential customers, separate irrigation meters are, or can be, installed so that the metered
water consumption reflects the contributions to the wastewater system similar to the use of
average winter water for residential customers.
3.4.3 Present and Proposed Wastewater Rates
Given the implementation of cost of service rates in the 2023 Rate Study, the 2025 Update
maintained the existing rate structure and cost of service relationships as outlined in the 2023
Rate Study. Provided in Table 3 - 3 is a summary of the present and proposed wastewater rates
for the next two rate setting years.
Table 3 – 3
Summary of the Present and Proposed Wastewater Rates
Present Rates FY 2025-26 FY 2026-27
Fixed Charge - $/Month
Residential $24.52 $26.11 $27.81
MF / Non-Res
3/4" & Less $24.52 $26.11 $27.81
1" 40.95 43.61 46.44
1 1/2" 81.65 86.96 92.61
2" 130.70 139.20 148.25
3" 245.21 261.15 278.12
4" 408.76 435.33 463.63
6" 817.28 870.40 926.98
8" 1,307.70 1,392.70 1,483.23
10" 1,880.02 2,002.22 2,132.36
Usage Charge - $/Unit
Residential / Multi-Family
(up to sewer cap) $9.82 $10.46 $11.14
Non-Residential (all usage) $10.27 $10.94 $11.65
Note: 1 unit = 1 CCF = 748 gallons
Page 470 of 994
Wastewater Rate Study Update 31
City of San Luis Obispo – Water & Wastewater Rate Study Update
As can be seen, the rate structure has been maintained and only the level of the rates has been
adjusted for the 2025 Update. Again, the updated rates reflect the cost of service analysis
completed in the 2023 Rate Study and continue the results of the 2023 cost of service results.
3.5 Summary of the Wastewater Rate Study Update
Based on the results of the 2025 Update, HDR developed the following conclusions and
recommendations.
Based on the revenue requirement, HDR concluded that the City will need to adjust the level of
wastewater rate revenues. HDR reached this conclusion for the following reasons:
Revenue adjustments are necessary to meet the operating, debt service, and capital costs
of providing wastewater service to City’s customers, of which a large portion is driven by
the funding of capital projects related to the WRRF upgrades
Revenue adjustments are necessary to provide adequate funding of the City’s capital
projects on a “pay-as-you-go” basis for renewal and replacement needs
The proposed revenue adjustments maintain the City’s financial health and provide long-
term sustainable funding levels
Based on the results of the cost of service analysis, HDR has made the following conclusions and
recommendations:
The proposed cost of service adjustments from the 2023 Rate Study are maintained in the
development of the proposed FY 2025-26 and FY 2026-27 wastewater rates
Finally, HDR reached the following conclusions and recommendations for the proposed
wastewater rates:
The proposed rates reflect the overall costs of providing wastewater service (i.e., cost-
based)
The current rate structure reflects contemporary and industry standard approaches
City should review the wastewater rates biannually in order to assess sufficiency
In summary, HDR would recommend that the City adopt the proposed wastewater rates for FY
2025-26 and FY 2026-27 as developed in the 2025 Update to provide to provide sufficient funding
for the operating expenses and capital improvement program needs for the wastewater utility.
Page 471 of 994
Technical Appendix A
City of San Luis Obispo –Water & Wastewater Rate Study Update
Technical Appendix A – Water Analysis
Page 472 of 994
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35
Revenues
Rate Revenues $25,792,735 $25,999,077 $26,207,069 $26,416,726 $26,628,060 $26,841,084 $27,055,813 $27,272,259 $27,490,437 $27,710,361 $27,932,044
Miscellaneous Revenues 2,798,852 2,884,739 2,946,793 3,030,697 3,118,440 3,210,210 3,306,207 3,397,471 3,492,518 3,591,516 3,694,639--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Revenues $28,591,587 $28,883,816 $29,153,862 $29,447,423 $29,746,499 $30,051,294 $30,362,019 $30,669,731 $30,982,956 $31,301,877 $31,626,683
Expenses
Unfunded Liability $996,375 $959,034 $1,012,396 $1,054,947 $1,099,453 $1,146,183 $1,195,250 $1,246,771 $1,300,868 $1,357,669 $1,417,310
Water Admin / Engineering 4,588,962 5,166,098 5,264,341 5,447,540 5,684,309 5,931,856 6,185,419 6,456,069 6,739,093 7,035,076 7,344,629
Water Source of Supply 13,017,561 16,803,182 13,124,903 13,776,029 12,022,148 13,282,481 13,506,635 13,787,890 13,065,149 13,358,358 13,657,870
Water Treatment 4,292,206 4,290,068 4,497,294 4,706,882 4,864,770 5,028,226 5,197,461 5,372,690 5,554,140 5,742,045 5,936,649
Water Distribution 1,984,884 2,094,442 2,166,829 2,168,206 2,234,024 2,301,855 2,371,762 2,443,808 2,518,060 2,594,587 2,673,459
Water Resources 600,782 637,579 668,611 700,279 721,288 742,926 765,214 788,170 811,815 836,170 861,255
Utility Billing 356,834 362,957 378,706 392,540 404,316 416,446 428,939 441,807 461,559 475,406 489,668
Additional O&M 0 0 0 0 0 0 0 0 0 0 0
Total Operations & Maintenance $25,837,604 $30,313,360 $27,113,079 $28,246,424 $27,030,308 $28,849,974 $29,650,680 $30,537,205 $30,450,684 $31,399,311 $32,380,840
Rate Funded Capital $1,282,175 $0 $3,550,000 $4,200,000 $6,975,000 $7,150,000 $7,690,000 $8,175,000 $10,050,000 $11,320,000 $12,700,000
Net Debt Service 1,468,807 1,465,911 1,455,405 1,454,858 1,778,180 1,789,658 2,380,522 2,970,141 3,346,901 3,362,037 3,359,446
Total To / (From) Reserves 3,000 (1,465,506) (2,568) 2,015 10,512 4,391 188,512 271,796 258,988 291,389 318,379
Total Revenue Requirement $28,591,587 $30,313,765 $32,115,916 $33,903,297 $35,794,000 $37,794,023 $39,909,714 $41,954,142 $44,106,573 $46,372,736 $48,758,665
Bal. / (Def.) of Funds $0 ($1,429,949) ($2,962,054) ($4,455,874) ($6,047,500) ($7,742,729) ($9,547,695) ($11,284,411) ($13,123,617) ($15,070,859) ($17,131,983)
Balance a % of Rate Adj. Req'd 0.0%5.5% 11.3% 16.9%22.7% 28.8%35.3% 41.4% 47.7% 54.4% 61.3%
Proposed Rate Adjustment 0.0% 5.5% 5.5% 5.0% 5.0% 5.0% 5.0% 4.5% 4.5% 4.5% 4.5%
Add'l Revenue with Rate Adj.$0 $1,429,949 $2,962,054 $4,455,874 $6,047,500 $7,742,729 $9,547,695 $11,284,411 $13,123,617 $15,070,859 $17,131,983
Bal. / (Def.) After Rate Adj.$0 $0 ($0) $0 $0 $0 $0 $0 ($0)$0 $0
Additional Rate Adjustment Required 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Average Residential Customer Bill (Base Charge + 6 CCF)$82.79 $87.34 $92.17 $96.80 $101.63 $106.68 $112.01 $117.05 $122.32 $127.83 $133.58
Total Ending Balance $23,855,703 $18,802,287 $21,627,070 $18,434,696 $19,275,993 $18,657,715 $14,384,331 $13,964,443 $12,399,859 $12,971,122 $12,372,537
Exhibit 1
Summary of the Water Revenue Requirement
Water Rate Study
City of San Luis Obispo
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City of San Luis Obispo
Water Rate Study
Escalations
Exhibit 2
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Revenues
As Customer GrowthCustomer Growth 0.8%0.8% 0.8% 0.8%0.8% 0.8%0.8% 0.8%0.8% 0.8%0.8%
As Rate AdjustmentRate Adjustment 0.0%5.5% 5.5% 5.0%5.0% 5.0%5.0% 4.5%4.5% 4.5%4.5%
As Miscellaneous RevenuesMiscellaneous Revenues 0.8%0.8% 0.8% 0.8%0.8% 0.8%0.8% 0.8%0.8% 0.8%0.8%
As
Expenses
As CIPCIP 0.0%4.0% 3.0% 3.0%3.0% 3.0%3.0% 3.0%3.0% 3.0%3.0%
As
Interest 2.0%2.0% 2.0% 2.0%2.0% 2.0%2.0% 2.0%2.0% 2.0%2.0%
New Debt Service
Low Interest Loans
Term in Years 30 30 30 30 30 30 30 30 30 30 30
Rate 2.5%2.5% 2.5% 2.5%2.5% 2.5%2.5% 2.5%2.5% 2.5%2.5%
Revenue Bond
Term in Years 30 30 30 30 30 30 30 30 30 30 30
Rate 5.0%5.0% 5.0% 5.0%5.0% 5.0%5.0% 5.0%5.0% 5.0%5.0%
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City of San Luis Obispo Page 1 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35
Revenues
Rate Revenues
Residential $13,245,990 $13,351,958 $13,458,774 $13,566,444 $13,674,976 $13,784,376 $13,894,651 $14,005,808 $14,117,854 $14,230,797 $14,344,643 As Customer Growth
Multi-Family 4,546,687 4,583,061 4,619,725 4,656,683 4,693,937 4,731,488 4,769,340 4,807,495 4,845,955 4,884,722 4,923,800 As Customer Growth
Non-Residential 6,058,007 6,106,471 6,155,322 6,204,565 6,254,201 6,304,235 6,354,669 6,405,506 6,456,750 6,508,404 6,560,472 As Customer Growth
Irrigation 1,942,050 1,957,587 1,973,248 1,989,034 2,004,946 2,020,985 2,037,153 2,053,450 2,069,878 2,086,437 2,103,129 As Customer Growth--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Rate Revenues $25,792,735 $25,999,077 $26,207,069 $26,416,726 $26,628,060 $26,841,084 $27,055,813 $27,272,259 $27,490,437 $27,710,361 $27,932,044
Other Revenues
Interest on Investment $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Miscellaneous Penalties 118,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000
Utility Set-up Fees - Distribution 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
Utility Set-up Fees - Utility Billing 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000
Cal Poly Capacity & Resilience - WTP SST Project Payment 86,267 86,267 86,267 86,267 86,267 86,267 86,267 86,267 86,267 86,267 86,267
Cal Poly Capacity & Resilience 171,175 180,589 190,522 200,048 210,050 220,553 231,580 242,001 252,891 264,272 276,164 As Rate Adjustment
Other Utility Charges 0 0 0 0 0 0 0 0 0 0 0
Credit Collections 14,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Development Review Fees 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000
Miscellaneous Revenue 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Cal Poly 1,183,946 1,249,063 1,317,761 1,383,649 1,452,832 1,525,473 1,601,747 1,673,826 1,749,148 1,827,859 1,910,113 As Rate Adjustment
Recycled Water Sales 1,044,464 1,052,820 1,061,243 1,069,733 1,078,290 1,086,917 1,095,612 1,104,377 1,113,212 1,122,118 1,131,095 As Customer Growth
Low Income Subsidy (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000)
Future Unidentified Other Revenue 0 0 0 0 0 0 0 0 0 0 0
Other City Licenses & Permits 25,000 25,000 0 0 0 0 0 0 0 0 0---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Other Revenues $2,798,852 $2,884,739 $2,946,793 $3,030,697 $3,118,440 $3,210,210 $3,306,207 $3,397,471 $3,492,518 $3,591,516 $3,694,639
Total Revenues $28,591,587 $28,883,816 $29,153,862 $29,447,423 $29,746,499 $30,051,294 $30,362,019 $30,669,731 $30,982,956 $31,301,877 $31,626,683
Expenses
Unfunded Liability
52003-PERS Unfunded Liability - ADP Payments $245,418 $164,840 $164,840 $164,840 $164,840 $164,840 $164,840 $164,840 $164,840 $164,840 $164,840
52003-PERS Unfunded Liability 750,957 794,194 847,556 890,107 934,613 981,343 1,030,410 1,081,931 1,136,028 1,192,829 1,252,470---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Unfunded Liability $996,375 $959,034 $1,012,396 $1,054,947 $1,099,453 $1,146,183 $1,195,250 $1,246,771 $1,300,868 $1,357,669 $1,417,310
Notes
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City of San Luis Obispo Page 2 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Water Admin / Engineering
51001-Salaries - Regular $738,961 $805,253 $845,515 $887,791 $914,425 $941,858 $970,113 $999,217 $1,029,193 $1,060,069 $1,091,871
51003-Salaries - Contract 67,819 71,210 74,770 78,509 80,864 83,290 85,789 88,362 91,013 93,744 96,556
51004-Salaries - Temporary 61,280 129,736 132,953 70,939 73,067 75,259 77,517 79,843 82,238 84,705 87,246
51010-Overtime 2,500 2,625 2,756 2,894 2,981 3,070 3,162 3,257 3,355 3,456 3,559
52001-Retirement Contributions 56,293 59,107 62,063 65,166 67,121 69,134 71,208 73,345 75,545 77,811 80,146
52002-Retirement PARS - 401 894 939 986 1,035 1,067 1,099 1,131 1,165 1,200 1,236 1,274
53001-Employee Group Insurance 55,897 58,692 61,627 64,708 66,649 68,649 70,708 72,830 75,014 77,265 79,583
53002-Retiree Healthcare 10,975 11,523 12,099 12,704 13,086 13,478 13,882 14,299 14,728 15,170 15,625
55001-Medicare 10,508 11,033 11,585 12,164 12,529 12,905 13,292 13,691 14,101 14,525 14,960
61001-Advertising and Public Outreach 95,000 98,800 102,752 105,835 109,010 112,280 115,648 119,118 122,691 126,372 130,163
61007-Legal Services 40,000 91,600 43,264 44,562 45,899 47,276 48,694 50,155 51,659 53,209 54,806
61008-Parking 10,910 11,346 11,800 12,154 12,519 12,894 13,281 13,680 14,090 14,513 14,948
61013-Other Contract Services 189,995 161,005 84,765 87,308 89,927 92,625 95,404 98,266 101,214 104,250 107,378
61501-City Water Service 400 416 433 446 459 473 487 502 517 532 548
61502-City Sewer Service 330 343 357 368 379 390 402 414 426 439 452
61503-Electric Service 2,800 3,136 3,293 3,457 3,630 3,812 4,002 4,203 4,413 4,633 4,865
61504-Natural Gas Service 1,100 1,144 1,190 1,225 1,262 1,300 1,339 1,379 1,421 1,463 1,507
61505-Communication Service 2,800 2,912 3,028 3,119 3,213 3,309 3,409 3,511 3,616 3,725 3,836
62002-Office Supplies 3,590 3,734 3,883 4,000 4,120 4,243 4,371 4,502 4,637 4,776 4,919
62003-Postage 200 208 216 223 229 236 243 251 258 266 274
62004-Publications and Subscriptions 800 2,656 2,762 2,845 2,930 3,018 3,109 3,202 3,298 3,397 3,499
62007-Employee Recognition 1,250 1,290 1,332 1,364 1,397 1,432 1,467 1,504 1,541 1,580 1,620
62009-Software Licensing and Maint Agreements 31,520 40,683 42,137 43,243 44,382 45,556 41,493 42,738 44,020 45,341 46,701
62010-Office Expenses - Other 0 12,500 0 0 0 0 0 0 0 0 0
62505-Machinery and Equipment 2,750 2,860 2,974 3,064 3,156 3,250 3,348 3,448 3,552 3,658 3,768
62506-Safety Materials and Supplies 400 416 433 446 459 473 487 502 517 532 548
62509-Misc Materials and Supplies 1,550 1,612 1,676 1,727 1,779 1,832 1,887 1,943 2,002 2,062 2,124
63001-Membership and Certifications 8,281 8,613 8,957 9,226 9,502 9,788 10,081 10,384 10,695 11,016 11,346
63002-Education and Training 18,250 28,980 30,139 31,043 31,975 32,934 33,922 34,940 35,988 37,067 38,179
63003-Trips and Meetings 500 520 541 557 574 591 609 627 646 665 685
65013-Credit Cards Merchant Fees 223,992 210,625 216,943 223,452 230,155 237,060 244,172 251,497 259,042 266,813 274,817
75001-Transfers - Out 1,387,992 1,568,431 1,646,853 1,729,195 1,815,655 1,906,438 2,001,760 2,101,847 2,206,940 2,317,287 2,433,151
75002-Reimbursement Transfer Out 1,559,425 1,762,150 1,850,258 1,942,771 2,039,909 2,141,905 2,249,000 2,361,450 2,479,522 2,603,498 2,733,673---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Admin / Engineering $4,588,962 $5,166,098 $5,264,341 $5,447,540 $5,684,309 $5,931,856 $6,185,419 $6,456,069 $6,739,093 $7,035,076 $7,344,629
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City of San Luis Obispo Page 3 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Water Source of Supply
51001-Salaries - Regular $131,504 $138,079 $144,983 $152,233 $156,800 $161,503 $166,349 $171,339 $176,479 $181,774 $187,227
51010-Overtime 400 420 441 463 477 491 506 521 537 553 569
51018-Call Back 1,000 1,050 1,103 1,158 1,192 1,228 1,265 1,303 1,342 1,382 1,424
52001-Retirement Contributions 12,641 13,273 13,937 14,634 15,073 15,525 15,991 16,470 16,964 17,473 17,998
53001-Employee Group Insurance 17,266 18,129 19,035 19,987 20,587 21,204 21,840 22,496 23,171 23,866 24,582
53002-Retiree Healthcare 2,055 2,157 2,265 2,378 2,450 2,523 2,599 2,677 2,757 2,840 2,925
55001-Medicare 1,873 1,966 2,065 2,168 2,233 2,300 2,369 2,440 2,513 2,589 2,666
61012-Water Supply 62,500 64,980 67,579 69,607 71,695 73,846 76,061 78,343 80,693 83,114 85,607
61013-Other Contract Services 16,500 17,160 17,846 18,382 18,933 19,501 20,086 20,689 21,310 21,949 22,607
61017-Nacimiento contribution for O & M 1,404,929 1,461,125 1,519,570 1,565,157 1,612,112 1,660,475 1,710,290 1,761,598 1,814,446 1,868,880 1,924,946
61018-Nacimiento contribution for Electric Service 714,503 953,303 1,273,959 1,681,627 1,765,708 1,853,993 1,946,693 2,044,028 2,146,229 2,253,540 2,366,217
61019-Nacimiento contribution for Capital Projects 2,503,607 789,896 262,500 273,000 283,920 295,277 307,088 319,371 332,146 345,432 359,249
61020-Nacimiento contribution for Debt Service 4,621,208 4,622,040 4,615,844 4,621,896 4,622,732 4,617,371 4,612,077 4,626,248 4,616,791 4,621,413 4,620,904
61021-Salinas contribution for O & M 1,420,351 1,336,541 1,390,003 1,431,703 1,474,654 1,518,893 1,564,460 1,611,394 1,659,736 1,709,528 1,760,814
61022-Salinas contribution for Electric Service 287,100 275,000 164,594 95,053 99,806 104,796 110,036 115,538 121,315 127,380 133,750
61023-Salinas contribution for Capital Projects 184,475 5,053,430 1,101,500 745,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000
61024-Whale Rock contribution for O & M 721,170 735,977 758,057 780,798 804,222 828,349 853,199 878,795 905,159 932,314 960,283
61025-Whale Rock contribution for Electric Service 352,500 306,306 292,383 168,851 177,294 186,158 195,466 205,240 215,502 226,277 237,591
61026-Whale Rock contribution for Capital Projects 402,694 82,575 539,490 423,885 11,010 1,029,435 1,001,910 1,001,910 11,010 11,010 11,010
61026-Whale Rock contribution for Capital Projects - Reserves 0 762,357 762,357 1,524,714 189,922 189,922 189,922 189,922 189,922 189,922 189,922
61503-Electric Service 100,976 113,093 118,747 124,685 130,919 137,465 144,338 151,555 159,133 167,089 175,444
62501-Chemicals 14,000 14,700 15,435 16,207 16,693 17,194 17,710 18,241 18,788 19,352 19,932
62503-Equipment Maintenance Supplies 7,000 7,280 7,571 7,798 8,032 8,273 8,521 8,777 9,040 9,312 9,591
62509-Misc Materials and Supplies 35,510 30,472 31,691 32,642 33,621 34,629 35,668 36,738 37,841 38,976 40,145
63001-Membership and Certifications 1,800 1,872 1,947 2,005 2,065 2,127 2,191 2,257 2,325 2,394 2,466--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Source of Supply $13,017,561 $16,803,182 $13,124,903 $13,776,029 $12,022,148 $13,282,481 $13,506,635 $13,787,890 $13,065,149 $13,358,358 $13,657,870
Water Treatment
51001-Salaries - Regular $1,358,444 $1,563,097 $1,641,251 $1,723,314 $1,775,013 $1,828,264 $1,883,112 $1,939,605 $1,997,793 $2,057,727 $2,119,459
51010-Overtime 70,992 74,542 78,269 82,182 84,648 87,187 89,803 92,497 95,272 98,130 101,074
51017-Standby 19,500 20,475 21,499 22,574 23,251 23,948 24,667 25,407 26,169 26,954 27,763
51018-Call Back 12,000 5,000 5,250 5,513 5,678 5,848 6,024 6,204 6,390 6,582 6,780
52001-Retirement Contributions 131,573 138,152 145,060 152,313 156,882 161,589 166,436 171,429 176,572 181,869 187,325
53001-Employee Group Insurance 215,584 226,363 237,681 249,565 257,052 264,764 272,707 280,888 289,315 297,994 306,934
53002-Retiree Healthcare 22,322 23,438 24,610 25,840 26,615 27,414 28,236 29,083 29,956 30,855 31,780
55001-Medicare 20,095 21,100 22,155 23,263 23,961 24,680 25,420 26,183 26,968 27,777 28,610
61005-Data Processing Services 1,100 1,144 1,190 1,225 1,262 1,300 1,339 1,379 1,421 1,463 1,507
61013-Other Contract Services 461,098 438,610 456,285 470,112 484,358 499,038 514,164 529,751 545,811 562,360 579,412
61027-Control Systems 13,792 14,344 14,917 15,365 15,826 16,301 16,790 17,293 17,812 18,347 18,897
61503-Electric Service 944,179 750,000 787,500 826,875 868,219 911,630 957,211 1,005,072 1,055,325 1,108,092 1,163,496
61505-Communication Service 8,800 9,152 9,518 9,804 10,098 10,401 10,713 11,034 11,365 11,706 12,057
61506-Solid Waste Service 6,713 6,981 7,261 7,478 7,703 7,934 8,172 8,417 8,669 8,930 9,197
62002-Office Supplies 3,100 3,224 3,353 3,454 3,557 3,664 3,774 3,887 4,004 4,124 4,247
62004-Publications and Subscriptions 1,400 1,456 1,514 1,560 1,606 1,655 1,704 1,755 1,808 1,862 1,918
62007-Employee Recognition 1,100 1,144 1,190 1,225 1,262 1,300 1,339 1,379 1,421 1,463 1,507
62009-Software Licensing and Maint Agreements 183 190 198 204 210 216 223 229 236 243 251
62010-Office Expenses - Other 300 312 324 334 344 355 365 376 387 399 411
62501-Chemicals 795,819 726,974 763,322 801,488 825,533 850,299 875,808 902,082 929,145 957,019 985,730
62502-Construction Materials and Supplies 31,400 32,656 33,962 34,981 36,031 37,111 38,225 39,372 40,553 41,769 43,022
62503-Equipment Maintenance Supplies 71,948 92,964 96,683 99,583 102,571 105,648 108,817 112,082 115,444 118,907 122,475
62506-Safety Materials and Supplies 26,680 27,747 28,857 29,723 30,614 31,533 32,479 33,453 34,457 35,491 36,555
62509-Misc Materials and Supplies 49,498 85,435 88,852 91,518 94,263 97,091 100,004 103,004 106,094 109,277 112,555
63001-Membership and Certifications 3,286 3,417 3,554 3,661 3,771 3,884 4,000 4,120 4,244 4,371 4,502
63002-Education and Training 21,300 22,152 23,038 23,729 24,441 25,174 25,930 26,707 27,509 28,334 29,184---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Treatment $4,292,206 $4,290,068 $4,497,294 $4,706,882 $4,864,770 $5,028,226 $5,197,461 $5,372,690 $5,554,140 $5,742,045 $5,936,649
5 of 19 03/21/2025DRAFTPage 477 of 994
City of San Luis Obispo Page 4 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Water Distribution
51001-Salaries - Regular $1,050,433 $1,102,954 $1,158,102 $1,216,007 $1,252,487 $1,290,062 $1,328,764 $1,368,627 $1,409,685 $1,451,976 $1,495,535
51010-Overtime 18,000 18,900 19,845 20,837 21,462 22,106 22,769 23,453 24,156 24,881 25,627
51017-Standby 19,000 19,950 20,948 21,995 22,655 23,334 24,034 24,755 25,498 26,263 27,051
51018-Call Back 45,000 47,250 49,613 52,093 53,656 55,266 56,924 58,631 60,390 62,202 64,068
52001-Retirement Contributions 101,288 106,353 111,670 117,254 120,771 124,395 128,126 131,970 135,929 140,007 144,207
53001-Employee Group Insurance 171,150 179,708 188,693 198,128 204,071 210,193 216,499 222,994 229,684 236,575 243,672
53002-Retiree Healthcare 17,052 17,904 18,800 19,740 20,332 20,942 21,570 22,217 22,884 23,570 24,277
55001-Medicare 15,072 15,826 16,617 17,448 17,971 18,510 19,065 19,637 20,227 20,833 21,458
56003-Contingency Expense 87,904 90,541 93,257 0 0 0 0 0 0 0 0
61005-Data Processing Services 9,300 9,672 10,059 10,361 10,671 10,992 11,321 11,661 12,011 12,371 12,742
61011-Maintenance 1,000 1,040 1,082 1,114 1,147 1,182 1,217 1,254 1,291 1,330 1,370
61013-Other Contract Services 133,762 139,112 144,677 149,017 153,488 158,092 162,835 167,720 172,752 177,934 183,272
61027-Control Systems 22,542 23,444 24,381 25,113 25,866 26,642 27,442 28,265 29,113 29,986 30,886
61503-Electric Service 41,580 35,000 36,750 38,588 40,517 42,543 44,670 46,903 49,249 51,711 54,296
61505-Communication Service 18,000 18,720 19,469 20,053 20,654 21,274 21,912 22,570 23,247 23,944 24,662
62002-Office Supplies 1,550 1,612 1,676 1,727 1,779 1,832 1,887 1,943 2,002 2,062 2,124
62003-Postage 150 156 162 167 172 177 183 188 194 200 206
62004-Publications and Subscriptions 500 520 541 557 574 591 609 627 646 665 685
62007-Employee Recognition 900 927 955 983 1,013 1,043 1,075 1,107 1,140 1,174 1,210
62008-Furniture and Fixtures 500 520 541 557 574 591 609 627 646 665 685
62010-Office Expenses - Other 400 416 433 446 459 473 487 502 517 532 548
62501-Chemicals 300 315 331 347 358 368 379 391 403 415 427
62502-Construction Materials and Supplies 134,212 139,580 145,163 149,518 154,004 158,624 163,383 168,284 173,333 178,533 183,889
62503-Equipment Maintenance Supplies 18,000 18,720 19,469 20,053 20,654 21,274 21,912 22,570 23,247 23,944 24,662
62506-Safety Materials and Supplies 13,590 14,134 14,699 15,140 15,594 16,062 16,544 17,040 17,551 18,078 18,620
62509-Misc Materials and Supplies 38,300 64,753 41,425 42,668 43,948 45,267 46,625 48,023 49,464 50,948 52,476
63001-Membership and Certifications 4,400 4,576 4,759 4,902 5,049 5,200 5,356 5,517 5,683 5,853 6,029
63002-Education and Training 20,500 21,320 22,173 22,838 23,523 24,229 24,956 25,704 26,475 27,270 28,088
63003-Trips and Meetings 500 520 541 557 574 591 609 627 646 665 685---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Distribution $1,984,884 $2,094,442 $2,166,829 $2,168,206 $2,234,024 $2,301,855 $2,371,762 $2,443,808 $2,518,060 $2,594,587 $2,673,459
6 of 19 03/21/2025DRAFTPage 478 of 994
City of San Luis Obispo Page 5 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Water Resources
51001-Salaries - Regular $421,889 $442,983 $465,132 $488,389 $503,041 $518,132 $533,676 $549,686 $566,177 $583,162 $600,657
51010-Overtime 5,000 5,250 5,513 5,788 5,962 6,141 6,325 6,515 6,710 6,911 7,119
52001-Retirement Contributions 36,385 38,204 40,114 42,120 43,383 44,685 46,025 47,406 48,828 50,293 51,802
53001-Employee Group Insurance 52,068 54,671 57,405 60,275 62,083 63,946 65,864 67,840 69,875 71,972 74,131
53002-Retiree Healthcare 5,409 5,680 5,964 6,262 6,450 6,643 6,843 7,048 7,260 7,477 7,702
55001-Medicare 5,782 6,071 6,374 6,693 6,894 7,101 7,314 7,533 7,759 7,992 8,231
61001-Advertising and Public Outreach 5,250 5,460 5,678 5,849 6,024 6,205 6,391 6,583 6,780 6,984 7,193
61005-Data Processing Services 6,100 6,344 6,598 6,796 7,000 7,210 7,426 7,649 7,878 8,114 8,358
61013-Other Contract Services 8,400 16,236 16,885 17,392 17,914 18,451 19,005 19,575 20,162 20,767 21,390
61505-Communication Service 2,200 2,288 2,380 2,451 2,524 2,600 2,678 2,759 2,841 2,927 3,014
62001-Print and Reproduction 1,000 1,040 1,082 1,114 1,147 1,182 1,217 1,254 1,291 1,330 1,370
62002-Office Supplies 600 624 649 668 688 709 730 752 775 798 822
62003-Postage 2,500 2,600 2,704 2,785 2,869 2,955 3,043 3,135 3,229 3,326 3,425
62007-Employee Recognition 350 364 379 390 402 414 426 439 452 466 480
62506-Safety Materials and Supplies 1,450 1,508 1,568 1,615 1,664 1,714 1,765 1,818 1,873 1,929 1,987
62509-Misc Materials and Supplies 32,700 34,008 35,368 36,429 37,522 38,648 39,807 41,002 42,232 43,499 44,804
63001-Membership and Certifications 7,700 8,008 8,328 8,578 8,836 9,101 9,374 9,655 9,944 10,243 10,550
63002-Education and Training 5,000 5,200 5,408 5,570 5,737 5,909 6,087 6,269 6,457 6,651 6,851
63003-Trips and Meetings 1,000 1,040 1,082 1,114 1,147 1,182 1,217 1,254 1,291 1,330 1,370---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Resources $600,782 $637,579 $668,611 $700,279 $721,288 $742,926 $765,214 $788,170 $811,815 $836,170 $861,255
Utility Billing
51001-Salaries - Regular $87,263 $91,627 $96,208 $101,018 $104,049 $107,170 $110,385 $113,697 $117,108 $120,621 $124,240
51004-Salaries - Temporary 0 0 0 0 0 0 0 0 0 0 0
51010-Overtime 1,500 1,575 1,654 1,736 1,789 1,842 1,897 1,954 2,013 2,073 2,136
52001-Retirement Contributions 8,767 9,205 9,666 10,149 10,453 10,767 11,090 11,423 11,765 12,118 12,482
53001-Employee Group Insurance 11,738 12,325 12,941 13,588 13,996 14,416 14,849 15,294 15,753 16,225 16,712
53002-Retiree Healthcare 1,114 1,170 1,229 1,290 1,329 1,369 1,410 1,452 1,496 1,541 1,587
55001-Medicare 1,776 1,865 1,958 2,056 2,118 2,182 2,247 2,314 2,384 2,455 2,529
61005-Data Processing Services 30,250 31,460 32,718 33,700 34,711 35,752 36,825 37,930 39,067 40,240 41,447
61013-Other Contract Services 132,355 128,326 133,459 137,463 141,586 145,834 150,209 154,715 159,357 164,137 169,062
61028-Personnel Services 0 51 106 110 113 116 120 123 6,624 6,823 7,028
62001-Print and Reproduction 21,600 22,464 23,363 24,063 24,785 25,529 26,295 27,084 27,896 28,733 29,595
62002-Office Supplies 250 260 270 279 287 295 304 313 323 333 343
62003-Postage 57,470 59,768 62,159 64,024 65,945 67,923 69,961 72,060 74,221 76,448 78,741
62007-Employee Recognition 100 104 108 111 115 118 122 125 129 133 137
62505-Machinery and Equipment 375 390 406 418 430 443 457 470 484 499 514
62509-Misc Materials and Supplies 125 130 135 139 143 148 152 157 161 166 171
63001-Membership and Certifications 50 52 54 56 57 59 61 63 65 67 69
63002-Education and Training 1,500 1,560 1,622 1,671 1,721 1,773 1,826 1,881 1,937 1,995 2,055
63003-Trips and Meetings 600 624 649 668 688 709 730 752 775 798 822
---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Utility Billing $356,834 $362,957 $378,706 $392,540 $404,316 $416,446 $428,939 $441,807 $461,559 $475,406 $489,668
7 of 19 03/21/2025DRAFTPage 479 of 994
City of San Luis Obispo Page 6 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Additional O&M
Future O&M $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Additional O&M $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operations & Maintenance $25,837,604 $30,313,360 $27,113,079 $28,246,424 $27,030,308 $28,849,974 $29,650,680 $30,537,205 $30,450,684 $31,399,311 $32,380,840
Rate Funded Capital $1,282,175 $0 $3,550,000 $4,200,000 $6,975,000 $7,150,000 $7,690,000 $8,175,000 $10,050,000 $11,320,000 $12,700,000 $3,340,219 FY 2022-23 Dep. Exp.
Debt Service
2012 Revenue Refunding Bonds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Debt Schedule
2018 Refunding Bond (Water Admin/Eng)27,327 27,284 20,929 20,829 20,891 20,914 20,900 20,943 20,848 20,742 20,717 Debt Schedule
2018 Refunding Bond (Water Treatment)888,250 887,250 885,000 886,500 886,500 900,000 891,250 881,250 870,000 887,500 887,250 Debt Schedule
2020 CIEDB (I-Bank) Loan 953,230 951,376 949,476 947,529 945,532 943,486 941,389 939,239 937,036 934,777 932,462 Debt Schedule
Additional Long-Term Debt 0 0 0 0 325,257 325,257 926,983 1,528,709 1,919,017 1,919,017 1,919,017 Calculated @ 5% for 30 yrs----------------------------------------------------------------------------------------------------------------------------------------------------------
Total Debt Service $1,868,807 $1,865,911 $1,855,405 $1,854,858 $2,178,180 $2,189,658 $2,780,522 $3,370,141 $3,746,901 $3,762,037 $3,759,446
LESS: Development Impact Fees $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000 $400,000----------------------------------------------------------------------------------------------------------------------------------------------------------
Net Debt Service $1,468,807 $1,465,911 $1,455,405 $1,454,858 $1,778,180 $1,789,658 $2,380,522 $2,970,141 $3,346,901 $3,362,037 $3,359,446
To / (From) Reserves
To/From Operating Reserve $3,000 ($1,465,506)($2,568)$2,015 $10,512 $4,391 $13,512 $86,796 $58,988 $81,389 $93,379
To/From Capital Reserve 0 0 0 0 0 0 175,000 185,000 200,000 210,000 225,000
To/From Bond Reserve 0 0 0 0 0 0 0 0 0 0 0---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total To / (From) Reserves $3,000 ($1,465,506) ($2,568) $2,015 $10,512 $4,391 $188,512 $271,796 $258,988 $291,389 $318,379
Total Revenue Requirement $28,591,587 $30,313,765 $32,115,916 $33,903,297 $35,794,000 $37,794,023 $39,909,714 $41,954,142 $44,106,573 $46,372,736 $48,758,665
Bal. / (Def.) of Funds $0 ($1,429,949) ($2,962,054) ($4,455,874) ($6,047,500) ($7,742,729) ($9,547,695) ($11,284,411) ($13,123,617) ($15,070,859) ($17,131,983)
Balance a % of Rate Adj. Req'd 0.0% 5.5% 11.3% 16.9% 22.7% 28.8% 35.3% 41.4% 47.7% 54.4% 61.3%
Proposed Rate Adjustment 0.0%5.5% 5.5% 5.0% 5.0% 5.0% 5.0% 4.5% 4.5% 4.5% 4.5%
Months of Adjustment 12 12 12 12 12 12 12 12 12 12 12
Add'l Revenue with Rate Adj.$0 $1,429,949 $2,962,054 $4,455,874 $6,047,500 $7,742,729 $9,547,695 $11,284,411 $13,123,617 $15,070,859 $17,131,983
Bal. / (Def.) After Rate Adj.$0 $0 ($0)$0 $0 $0 $0 $0 ($0)$0 $0
Add'l Rate Adj. Req'd 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
8 of 19 03/21/2025DRAFTPage 480 of 994
City of San Luis Obispo Page 7 of 7
Water Rate Study
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Average Residential Customer Bill $82.79 (Base Charge + 6 CCF)
Customer Bill on Proposed Adjustment $87.34 $92.17 $96.80 $101.63 $106.68 $112.01 $117.05 $122.32 $127.83 $133.58
Bill Difference - Monthly 4.55 4.83 4.63 4.83 5.05 5.33 5.04 5.27 5.50 5.75
Cumulative Bill Difference 4.55 9.38 14.01 18.84 23.89 29.22 34.26 39.53 45.04 50.79
Debt Service Coverage Ratio (all debt, without DIF)
Before Rate Adjustment 1.47 0.00 1.10 0.65 1.25 0.55 0.26 0.04 0.14 0.00 0.00
After Proposed Rate Adjustment 1.47 0.00 2.70 3.05 4.02 4.08 3.69 3.39 3.64 3.98 4.36
Debt Service Coverage Ratio (all debt, with DIF)
Before Rate Adjustment 1.90 0.00 1.53 1.08 1.61 0.91 0.54 0.28 0.36 0.19 0.01
After Proposed Rate Adjustment 1.90 0.43 3.13 3.48 4.39 4.45 3.98 3.63 3.86 4.19 4.57
Reserve Funds
Total Beginning Balance $43,032,553 $23,855,703 $18,802,287 $21,627,070 $18,434,696 $19,275,993 $18,657,715 $14,384,331 $13,964,443 $12,399,859 $12,971,122
Operating Fund
Beginning Balance $5,167,521 $6,062,672 $5,422,616 $5,649,285 $5,406,062 $5,769,995 $5,930,136 $6,107,441 $6,090,137 $6,279,862 $6,476,168 20% of O&M
Plus: Additions 3,000 0 0 2,015 10,512 4,391 13,512 86,796 58,988 81,389 93,379
Less: Uses of Funds 0 (1,465,506) (2,568)0 0 0 0 0 0 0 0
Ending Balance $5,170,521 $4,597,166 $5,420,048 $5,651,300 $5,416,573 $5,774,385 $5,943,648 $6,194,237 $6,149,125 $6,361,251 $6,569,547
Capital Fund
Beginning Balance $35,110,103 $15,050,129 $10,462,758 $12,890,526 $9,761,079 $10,047,617 $9,067,228 $4,421,223 $3,812,901 $1,841,875 $1,988,551 Balance of Funds
Plus: Additions 0 0 0 0 255,129 0 175,000 185,000 200,000 210,000 225,000
Plus: FEMA Reimbursement 0 0 4,171,875 0 0 0 0 0 0 0 0
Development Impact Fees 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000 800,000
Less: Capital Project Funding (19,979,850) (4,563,567) (2,320,179) (4,170,045)(400,000)(1,598,325) (5,437,552) (1,667,340) (2,799,228)(695,782)(1,892,620)
Ending Balance $15,930,253 $11,286,562 $13,114,454 $9,520,481 $10,416,208 $9,249,292 $4,604,676 $3,738,883 $2,013,673 $2,156,093 $1,120,931
Rate Stabilization
Beginning Balance $2,579,273 $2,742,903 $2,916,912 $3,087,260 $3,267,556 $3,458,381 $3,660,351 $3,855,667 $4,061,405 $4,278,122 $4,506,403 10% of Rate Revenues
Plus: Additions 0 0 0 0 0 0 0 0 0 0 0
Less: Capital Project Funding 0 0 0 0 0 0 0 0 0 0 0
Ending Balance $2,579,273 $2,742,903 $2,916,912 $3,087,260 $3,267,556 $3,458,381 $3,660,351 $3,855,667 $4,061,405 $4,278,122 $4,506,403
UFL Trust
Beginning Balance $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656
Plus: Additions 0 0 0 0 0 0 0 0 0 0 0
Less: Capital Project Funding 0 0 0 0 0 0 0 0 0 0 0
Ending Balance $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656 $175,656
Total Ending Balance $23,855,703 $18,802,287 $21,627,070 $18,434,696 $19,275,993 $18,657,715 $14,384,331 $13,964,443 $12,399,859 $12,971,122 $12,372,537
Days of O&M 337 226 291 238 260 236 177 167 149 151 139
9 of 19 03/21/2025DRAFTPage 481 of 994
City of San Luis Obispo
Water Rate Study Page 1 of 3
Capital Improvement Plan
Exhibit 4
Capital Improvement Projects FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Total Notes
Source of Supply
Salinas Reservoir Transfer of Ownership Plan $550,000 $0 $0 $0 $0 $0 $0 $0 $0 $1,304,773 $1,343,916 $3,198,690
SGMA GSP (Groundwater Basin Management)150,000 156,000 159,135 163,909 168,826 173,891 179,108 184,481 0 0 0 1,335,350
Groundwater Well Development Program 350,000 2,340,000 0 0 0 0 0 0 0 0 0 2,690,000
Source Water Strategic Plan 90,000 0 0 0 0 0 298,513 0 0 0 0 388,513
Future Source Water Strategy 0 0 0 0 337,653 1,507,056 1,552,268 1,598,836 0 0 0 4,995,813------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Source of Supply $1,140,000 $2,496,000 $159,135 $163,909 $506,479 $1,680,947 $2,029,889 $1,783,317 $0 $1,304,773 $1,343,916 $12,608,366
Water Treatment
Water Treatment Plant - Major Equipment Maintenance $180,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $180,000
Ozone System Maintenance 0 145,600 148,526 152,982 157,571 162,298 167,167 172,182 177,348 182,668 188,148 1,654,491
Chemical System Maintenance 0 34,320 35,010 36,060 37,142 38,256 39,404 40,586 41,803 43,058 44,349 389,987
Air Compressor and Dryer Maintenance 0 7,280 7,426 7,649 7,879 8,115 8,358 8,609 8,867 9,133 9,407 82,725
Water Treatment Plant - Asset Replacement 0 0 0 0 0 0 53,732 55,344 57,005 58,715 60,476 285,272
Contact Basin Drain Repair - Ozone System 0 39,520 0 0 0 0 0 0 0 0 0 39,520
Package Thickener 25,000 0 0 0 540,244 0 0 0 0 0 0 565,244
Actiflo Poly Blend Units 0 26,000 0 0 0 0 0 0 0 0 0 26,000
Secondary Transformers and Arc Flash 0 0 0 0 0 0 597,026 0 0 0 0 597,026
Washwater Reclamation pipe celaning 0 0 0 0 0 44,052 0 0 0 0 0 44,052
Actiflo Electrical Panel Replacement (Allen Bradley)0 0 0 0 112,551 0 0 0 0 0 0 112,551
Cityworks Integration Plan - Implementation 0 0 0 131,127 0 0 0 0 0 0 0 131,127
Facility Master Plan 0 0 0 0 787,856 1,159,274 597,026 1,229,874 1,266,770 1,304,773 1,343,916 7,689,490
Effluent Pipe Corrosion Protection 0 52,000 0 0 0 0 0 0 0 0 0 52,000
Sludge Drying Bed Reconstruction 0 0 0 0 0 69,556 382,097 0 0 0 0 451,653
Filter Media Replacement and Underdrain Repairs 0 499,200 0 0 0 0 0 0 0 0 0 499,200
Water Plant - Roof Replacement 0 312,000 0 0 0 0 0 0 0 0 0 312,000
Water Treatment Plant - Water Meter Replacement 30,000 0 0 0 0 0 0 0 0 0 0 30,000
Salinas Water Meter 0 52,000 53,045 0 0 0 0 0 0 0 0 105,045
Drying Bed Meters 0 4,992 0 0 0 0 0 0 0 0 0 4,992
Effluent Meter Relocation 0 0 33,949 0 0 0 0 0 0 0 0 33,949
Waterline Replacement: Stenner Canyon at Reservoir 0 0 0 0 90,041 1,275,201 0 0 0 0 0 1,365,242
Raw Waterline Replacement: 30" (south of bridge)0 0 0 0 0 0 19,105 196,780 0 0 0 215,885
Water Storage Tank Major Maintenance 0 0 0 0 0 0 1,313,458 1,352,861 1,393,447 1,435,251 1,478,308 6,973,324
Edna Tank Internal and External Coatings 0 0 0 0 3,376,526 0 0 0 0 0 0 3,376,526
Water Reservoir 1 40,000 0 0 49,173 0 0 53,732 0 0 58,715 0 201,620
Water Reservoir 2 0 0 0 49,173 0 0 53,732 0 0 58,715 0 161,620
Storage Tanks 0 10,400 10,609 0 11,255 11,593 0 12,299 12,668 0 0 68,823
T-3 Water Storage Tank Replacement - High Pressure Zone 900,000 0 530,450 0 0 10,723,285 11,044,984 0 0 0 0 23,198,719 Debt Funded
Energy Efficiency Project (SST)0 0 0 0 0 0 417,918 0 0 0 0 417,918
Remove Plant Water Generator 500,397 0 0 0 0 0 0 0 0 0 0 500,397
Fleet - WTP
1000521-14-WTP 1/2 ton Crew Cab 4X4 Pickup (1004-F150)0 0 0 74,852 0 0 0 0 0 0 0 74,852
Service Body Truck (1644)0 0 0 0 0 0 0 122,987 0 0 0 122,987
2000521-XX - WTP Utility Cart 0 0 0 0 0 46,371 0 0 0 0 0 46,371
Water Treatment Plant Forklift (0910)0 0 0 81,955 0 0 0 0 0 0 0 81,955------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Treatment $1,675,397 $1,183,312 $819,015 $582,970 $5,121,065 $13,538,003 $14,747,740 $3,191,523 $2,957,908 $3,151,027 $3,124,606 $50,092,565
10 of 19 03/21/2025DRAFTPage 482 of 994
City of San Luis Obispo
Water Rate Study Page 2 of 3
Capital Improvement Plan
Exhibit 4
Capital Improvement Projects FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Total Notes
Water Distribution
Waterline Replacement (General Distribution)$0 $0 $0 $0 $0 $0 $0 $3,935,596 $2,026,832 $4,175,274 $0 $10,137,703
Johnson - Iris to Bishop Water Pipeline Replacement 440,000 0 0 0 0 0 0 0 0 0 0 440,000
Santa Rosa - Stenner Creek to Highland 30" Water Pipeline Rplc 150,000 0 0 10,085,870 0 0 0 0 0 0 0 10,235,870 Debt Funded
Chorro - Highland to Meinecke 24" Water Pipeline Replacement 2,620,000 104,000 0 0 0 0 0 0 0 0 0 2,724,000
Foothill - Chorro to California 24" Pipeline Inter-tie 0 0 0 0 0 0 3,892,610 0 0 0 0 3,892,610
Luneta - San Jose to Broad 12" Water Pipeline Replacement 0 0 0 0 0 0 0 0 0 391,432 6,800,217 7,191,649
Highland and UPRR at Cal Poly Water Pipeline Replacement 0 0 0 0 0 985,383 0 0 0 0 0 985,383
Rockview - Stoneridge to Broad Water Pipeline Replacement 0 0 0 0 0 0 0 159,884 1,938,158 0 0 2,098,042
Patricia, Highland, and La Entrada Water Pipeline Replacement 0 0 134,734 138,776 0 0 0 0 0 0 0 273,511
Craig, Christina, and Jaycee Water Pipeline Replacement 0 0 0 0 0 0 0 0 0 0 174,709 174,709
California - Stafford to Mill Water Pipeline Replacement 0 1,944,800 0 0 0 0 0 0 0 0 0 1,944,800
Terrace Hill Booster Pump Station 0 0 0 0 0 0 53,732 184,481 3,204,928 0 0 3,443,142
Water Distribution System - Point Repairs 0 260,000 0 273,182 0 405,746 0 430,456 443,370 456,671 470,371 2,739,794
Waterline Abandonment & Connections 50,000 0 53,045 54,636 56,275 57,964 59,703 61,494 63,339 65,239 67,196 588,890
Water Utility Trench Repair 280,000 353,600 360,706 371,527 382,673 394,153 405,978 418,157 430,702 443,623 456,932 4,298,051
Water Utility Raise Valve Covers 35,000 296,400 37,132 38,245 39,393 40,575 41,792 43,046 44,337 45,667 47,037 708,623
Water Meters and Boxes 0 0 0 27,318 28,138 28,982 59,703 61,494 221,685 228,335 235,185 890,839
AMI Water Meters 460,000 511,680 521,963 0 0 0 0 0 0 0 0 1,493,643
AMI Radio 360,000 406,640 414,812 0 0 0 0 0 0 0 0 1,181,452
AMI Meter Box Lids 75,000 78,000 79,568 0 0 0 0 0 0 0 0 232,568
Fire Hydrants 55,000 57,200 58,350 60,100 61,903 63,760 65,673 67,643 69,672 71,763 73,915 704,979
Water Distribution System Hydraulic Model & Master Plan Update 0 0 0 131,127 0 0 0 0 0 0 0 131,127
Recycled Water
UV Bulb Replacement (annual replacement)0 0 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 107,778
Recycled Water Pump Station Maintenance 60,000 0 0 0 0 0 0 0 760,062 782,864 806,350 2,409,276
RW Pump Upgrade 0 0 0 0 0 52,167 0 0 0 0 0 52,167
RW Effluent Meter Replacement 0 0 47,741 0 0 0 0 0 0 0 0 47,741
Chemical Storage Tank Replacement 0 104,000 0 0 0 0 0 0 0 0 0 104,000
Recycled Water Storage Expansion 0 0 0 0 0 23,185 0 0 0 0 0 23,185
Orcutt Street - Fernwood to Laurel Pipeline 25,000 0 2,015,710 0 0 0 0 0 0 0 0 2,040,710
Recycled Waterline at Tank Farm - Long to Innovation Pipeline 0 0 0 0 0 0 29,851 2,121,532 0 0 0 2,151,384
Recycled Waterline at Broad Street - Tank Farm to Aerovista 0 0 0 0 0 0 59,703 2,631,930 0 0 0 2,691,633
Recycled Water System Retrofits (potable to recycled)0 0 0 0 0 0 0 61,494 190,016 0 0 251,509
Ignition System for Recycled Water System 45,000 0 0 0 0 0 0 0 0 0 0 45,000
Fleet - Water Distribution
Dump Truck (0840)0 0 0 0 0 202,873 0 0 0 0 0 202,873
Backhoe (0720)0 0 0 273,182 0 0 0 0 0 97,858 0 371,040
Service body trucks (0846, 0847)0 0 636,540 655,636 0 0 0 0 0 0 0 1,292,176
Medium duty truck with bed & crane 0 0 0 82,501 0 0 0 0 0 0 0 82,501
Pickup (1629)0 0 0 0 0 0 94,330 0 0 0 0 94,330
Water Distribution Pickup (1523)0 0 0 0 0 0 0 0 0 125,911 0 125,911
Water Distribution Pickup (1903)0 0 0 0 0 0 0 0 0 125,911 0 125,911
Water Distribution Pickup (1908)0 0 0 0 0 0 0 110,074 0 0 0 110,074
Trailer (0235)0 0 0 0 0 28,982 0 0 0 0 0 28,982
Water Distribution Portable Generator (2007)0 0 0 0 0 0 0 0 0 0 268,783 268,783
Water Distribution Portable Generator (1619)0 0 0 0 0 0 238,810 0 0 0 0 238,810
Water Distribution Hydro Ex Trailer (1621)0 0 0 0 168,826 0 0 0 0 0 0 168,826------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Distribution $4,655,000 $4,116,320 $4,370,908 $12,203,029 $748,463 $2,295,363 $5,013,826 $10,299,579 $9,405,768 $7,023,594 $9,414,134 $69,545,983
11 of 19 03/21/2025DRAFTPage 483 of 994
City of San Luis Obispo
Water Rate Study Page 3 of 3
Capital Improvement Plan
Exhibit 4
Capital Improvement Projects FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Total Notes
Admin, IT, & Fleet
Public Works - Misc $0 $0 $0 $0 $0 $57,964 $0 $55,344 $0 $65,239 $67,196 $245,743
Mid-Higuera 45,000 0 0 0 0 0 0 0 0 0 0 45,000
Buchon/Santa Rosa (150,000)0 0 0 0 0 0 0 0 0 0 (150,000)
Overpass - Elks Lane 0 0 0 0 0 0 59,703 0 0 0 0 59,703
Prado Bridge Waterline Replacement 0 0 0 0 0 0 35,822 0 0 0 0 35,822
Pavement Management (Water Fund Contribution)0 2,080 0 0 0 0 0 0 0 0 0 2,080
ATP - Higuera Corridor Complete Street Design (Water Fund Contribution)0 2,080 0 0 0 0 0 0 0 0 0 2,080
Corp Yard Material Storage Stalls (Water Fund Contribution)0 0 26,523 0 281,377 0 0 0 0 0 0 307,900
Corporation Yard Permimeter Fence Replacement (Water Fund Contribution)0 0 0 0 0 0 0 6,149 76,006 0 0 82,156
Corporation Yard EV Charging Station (Water Fund Contribution)0 0 84,872 0 0 0 0 0 0 0 0 84,872
879 Roofing Project 65,000 78,000 0 0 0 0 0 0 0 0 0 143,000
Fleet
Compact Pickup (1613)$0 $0 $0 $0 $0 $0 $62,688 $0 $0 $0 $0 $62,688
Shared IT
Network Firewalls $0 $0 $0 $0 $0 $22,902 $0 $0 $0 $0 $30,779 $53,681
Network Security Upgrade 0 0 0 10,690 0 0 12,765 0 0 15,242 0 38,697
Network Switch Infrastructure Repl. 0 0 0 0 39,113 0 0 0 0 52,565 0 91,678
Radio Handhelds Repl. 0 0 0 0 0 0 0 83,192 0 0 0 83,192
UB System Upgrade 0 0 0 0 0 0 0 0 0 0 135,458 135,458
Uninterruptible Power Supplies (UPS) Battery Replacement 0 0 0 2,344 0 0 2,799 0 0 3,342 0 8,485
Virtual Private Network Replacment 0 0 0 0 0 3,146 0 0 0 0 4,228 7,374
City SAN (Network Storage)0 0 9,727 0 0 0 12,322 0 0 0 15,609 37,657
Vmware Infrastructure 0 16,455 0 0 19,459 0 0 23,235 0 0 27,744 86,893
VoIP 0 17,170 0 0 0 0 0 0 0 0 28,950 46,121
PD/City backup storage, secondary storage 0 0 0 0 3,914 0 0 0 0 0 0 3,914
Wireless System Citywide 0 0 0 7,103 0 0 0 0 9,546 0 0 16,648------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Admin, IT, & Fleet ($40,000) $115,785 $121,121 $20,137 $343,864 $84,012 $186,097 $167,921 $85,552 $136,387 $309,964 $1,530,841
CIP Carryover $16,948,799 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $16,948,799
Unidentified Future Capital Projects $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Transfer to Cash Reserve $0 $0 $0 $0 $255,129 $0 $0 $0 $0 $0 $0 $255,129
Total Capital Improvement Projects $24,379,196 $7,911,417 $5,470,179 $12,970,045 $6,975,000 $17,598,325 $21,977,552 $15,442,340 $12,449,228 $11,615,782 $14,192,620 $150,981,683
Less: Outside Funding Sources
Operating Fund Reserves $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Fund Reserves 19,579,850 4,163,567 1,920,179 3,770,045 0 1,198,325 5,037,552 1,267,340 2,399,228 295,782 1,492,620 41,124,488
Prop 1B Revenue 2,860,000 3,747,850 0 0 0 0 0 0 0 0 0 6,607,850
State Grants 657,171 0 0 0 0 0 0 0 0 0 0 657,171
Assumed Debt Proceeds 0 0 0 0 0 0 0 0 0 0 0 0
Assumed New Long-Term Debt 0 0 0 0 0 0 0 0 0 0 0 0
Additional Revenue Bonds 0 0 0 5,000,000 0 9,250,000 9,250,000 6,000,000 0 0 0 29,500,000------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Funding Sources $23,097,021 $7,911,417 $1,920,179 $8,770,045 $0 $10,448,325 $14,287,552 $7,267,340 $2,399,228 $295,782 $1,492,620 $77,889,509
Rate Funded Capital $1,282,175 $0 $3,550,000 $4,200,000 $6,975,000 $7,150,000 $7,690,000 $8,175,000 $10,050,000 $11,320,000 $12,700,000 $73,092,175
12 of 19 03/21/2025DRAFTPage 484 of 994
City of San Luis Obispo
Water Rate Study Page 1 of 3
Revenues at Present Rates
Exhibit 5
Effective 7.1.24 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Total
Residential
Base Fee $ / Acct. / Mo.
5/8"$30.25 4,353 4,353 4,343 4,306 4,300 4,290 4,288 4,279 4,473 4,360 4,284 4,225 4,225
3/4"30.25 4,795 4,806 4,860 4,836 4,831 4,836 4,914 4,918 5,152 5,120 5,026 5,007 5,007
1"30.25 4,391 4,399 4,424 4,426 4,429 4,463 4,474 4,521 4,677 4,610 4,593 4,582 4,582
1 1/2"30.25 28 28 28 28 28 28 28 28 29 28 29 29 29
2"30.25 19 19 19 19 19 19 19 19 21 20 20 20 20
3"30.25 1 1 1 1 1 1 1 1 1 1 1 1
8"30.25 15 15 16 15 15 16 15 15 16 15 15 16 16-----------------------------------------------------------------------------------------------------------------------------------------------13,601 13,621 13,691 13,631 13,623 13,653 13,739 13,781 14,369 14,154 13,968 13,880 13,880
Volume Charge $ / CCF
0 - 5 CCF $8.54 51,288 51,126 43,455 34,672 43,392 45,388 48,087 49,926 50,117 48,122 50,579 50,141 566,292
5 - 12 CCF 9.84 25,666 22,262 9,747 4,041 9,575 11,060 15,855 21,551 23,653 22,258 26,627 22,412 214,708
12 + CCF 16.97 9,075 6,550 1,921 714 1,571 2,715 3,319 6,372 9,803 8,301 16,606 8,737 75,685-------------------------------------------------------------------------------------------------------------------------------------------------86,029 79,939 55,122 39,427 54,538 59,163 67,261 77,849 83,573 78,681 93,813 81,290 856,685
Revenues
Base Fee $411,430 $412,035 $414,153 $412,338 $412,096 $413,003 $415,605 $416,875 $434,662 $428,159 $422,532 $419,870 $5,012,758
Volume Charge 844,561 766,837 499,605 347,975 491,451 542,519 623,000 746,565 827,103 770,847 975,767 797,002 8,233,233----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Residential Revenues $1,255,991 $1,178,873 $913,757 $760,313 $903,547 $955,523 $1,038,605 $1,163,440 $1,261,765 $1,199,005 $1,398,299 $1,216,872 $13,245,990
Multi-Family
Base Fee $ / Acct. / Mo.
5/8"$30.25 385 383 380 380 378 378 378 377 385 382 376 374 374
3/4"30.25 251 253 255 255 257 256 257 259 262 263 260 259 259
1"50.50 232 235 233 233 234 234 233 235 240 234 236 237 237
1 1/2"100.80 132 133 132 132 132 132 134 132 135 132 132 133 133
2"161.30 105 104 107 105 105 105 106 106 108 107 106 107 107
3"302.60 3 3 3 3 3 3 3 3 3 3 3 3 3
4"504.45 11 11 11 11 11 11 11 11 11 11 11 11 11
6"1,008.60 6 6 6 6 6 5 5 5 5 5 5 6 6
8"1,613.85 4 4 4 4 5 5 5 5 5 5 5 5 5-----------------------------------------------------------------------------------------------------------------------------------------------1,129 1,132 1,131 1,129 1,131 1,129 1,132 1,133 1,154 1,142 1,134 1,135 1,135
Volume Charge $ / CCF
All Use $9.58 36,032 34,958 28,778 21,461 29,364 30,713 32,507 32,559 31,230 28,578 32,931 33,903 373,014-------------------------------------------------------------------------------------------------------------------------------------------------36,032 34,958 28,778 21,461 29,364 30,713 32,507 32,559 31,230 28,578 32,931 33,903 373,014
Revenues
Base Fee $80,161 $80,252 $80,504 $80,181 $81,845 $80,807 $81,149 $81,079 $82,289 $81,462 $81,129 $82,360 $973,218
Volume Charge 345,183 334,896 275,693 205,599 281,306 294,232 311,414 311,915 299,185 273,779 315,474 324,795 3,573,469----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Multi-Family Revenues $425,344 $415,148 $356,197 $285,780 $363,151 $375,038 $392,563 $392,994 $381,474 $355,241 $396,604 $407,155 $4,546,687
13 of 19 03/21/2025DRAFTPage 485 of 994
City of San Luis Obispo
Water Rate Study Page 2 of 3
Revenues at Present Rates
Exhibit 5
Effective 7.1.24 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Total
Non-Residential
Base Fee $ / Acct. / Mo.
5/8"$30.25 408 405 409 407 403 402 400 400 403 403 410 401 401
3/4"30.25 561 559 565 564 564 563 567 570 563 570 569 575 575
1"50.50 348 347 347 352 349 349 351 349 352 351 351 351 351
1 1/2"100.80 171 172 173 172 171 173 174 173 172 174 172 173 173
2"161.30 182 181 185 182 184 183 185 183 187 185 184 184 184
3"302.60 21 21 21 21 22 21 21 21 21 21 22 23 23
4"504.45 21 21 22 21 21 21 21 21 21 21 21 21 21
6"1,008.60 7 7 7 7 7 7 7 7 7 7 7 7 7
8"1,613.85 3 3 3 3 3 3 3 3 3 3 3 3 3-----------------------------------------------------------------------------------------------------------------------------------------------1,722 1,716 1,732 1,729 1,724 1,722 1,729 1,727 1,729 1,735 1,739 1,738 1,738
Volume Charge $ / CCF
All Use $10.14 44,248 42,147 31,922 21,096 30,222 33,995 37,541 40,100 43,072 42,620 45,436 39,444 451,842-------------------------------------------------------------------------------------------------------------------------------------------------44,248 42,147 31,922 21,096 30,222 33,995 37,541 40,100 43,072 42,620 45,436 39,444 451,842
Revenues
Base Fee $122,329 $122,067 $123,620 $122,693 $122,945 $122,622 $123,207 $122,773 $123,348 $123,388 $123,509 $123,822 $1,476,324
Volume Charge 448,680 427,375 323,686 213,909 306,454 344,705 380,665 406,612 436,749 432,165 460,719 399,963 4,581,683----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Non-Residential Revenues $571,009 $549,443 $447,306 $336,602 $429,399 $467,327 $503,872 $529,385 $560,097 $555,554 $584,228 $523,785 $6,058,007
Irrigation
Base Fee $ / Acct. / Mo.
5/8"$30.25 37 36 36 36 36 36 36 36 37 38 36 36 36
3/4"30.25 175 176 176 175 176 176 177 175 175 174 175 173 173
1"50.50 168 170 171 171 171 171 171 171 175 173 175 173 173
1 1/2"100.80 90 92 91 91 91 90 90 91 91 90 91 91 91
2"161.30 67 68 67 67 67 66 65 65 65 67 65 65 65
3"302.60 1 1 1 2 1 1 1 1 1 1 1 1 1
4"504.45 2 2 2 2 2 2 2 2 2 2 2 2 2
6"1,008.60 2 2 2 2 2 2 2 2 2 2 2 2 2
8"1,613.85 1 1 1 1 1 1 1 1 1 1 1 1 1-----------------------------------------------------------------------------------------------------------------------------------------------543 548 547 547 547 545 545 544 549 548 548 544 544
Volume Charge $ / CCF
All Use $10.35 16,188 10,149 2,575 1,172 1,342 4,207 7,652 15,228 19,484 19,150 24,428 19,849 141,426-------------------------------------------------------------------------------------------------------------------------------------------------16,188 10,149 2,575 1,172 1,342 4,207 7,652 15,228 19,484 19,150 24,428 19,849 141,426
Revenues
Base Fee $39,719 $40,183 $39,971 $40,243 $39,971 $39,709 $39,578 $39,618 $39,850 $39,971 $39,820 $39,659 $478,291
Volume Charge 167,549 105,043 26,655 12,128 13,895 43,541 79,202 157,610 201,663 198,200 252,835 205,438 1,463,759----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Irrigation Revenues $207,268 $145,226 $66,626 $52,371 $53,866 $83,250 $118,779 $197,228 $241,514 $238,171 $292,655 $245,097 $1,942,050
14 of 19 03/21/2025DRAFTPage 486 of 994
City of San Luis Obispo
Water Rate Study Page 3 of 3
Revenues at Present Rates
Exhibit 5
Effective 7.1.24 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Total
Summary % of Total
Customers
Residential 13,601 13,621 13,691 13,631 13,623 13,653 13,739 13,781 14,369 14,154 13,968 13,880 13,880 79.8%
Multi-Family 1,129 1,132 1,131 1,129 1,131 1,129 1,132 1,133 1,154 1,142 1,134 1,135 1,135 6.5%
Non-Residential 1,722 1,716 1,732 1,729 1,724 1,722 1,729 1,727 1,729 1,735 1,739 1,738 1,738 10.0%
Irrigation 543 548 547 547 547 545 545 544 549 548 548 544 544 3.1%
Recycled Water 81 81 84 81 85 85 82 83 86 87 88 88 88 0.5%----------------------------------------------------------------------------------------------------------------------------------Total Number of Customers 17,076 17,098 17,185 17,117 17,110 17,134 17,227 17,268 17,887 17,666 17,477 17,385 17,385
Consumption
Residential 86,029 79,939 55,122 39,427 54,538 59,163 67,261 77,849 83,573 78,681 93,813 81,290 856,685 44.3%
Multi-Family 36,032 34,958 28,778 21,461 29,364 30,713 32,507 32,559 31,230 28,578 32,931 33,903 373,014 19.3%
Non-Residential 44,248 42,147 31,922 21,096 30,222 33,995 37,541 40,100 43,072 42,620 45,436 39,444 451,842 23.3%
Irrigation 16,188 10,149 2,575 1,172 1,342 4,207 7,652 15,228 19,484 19,150 24,428 19,849 141,426 7.3%
Recycled Water 12,509 8,671 2,007 865 989 3,617 6,678 13,075 14,587 17,495 17,734 13,900 112,127 5.8%
------------------------------------------------------------------------------------------------------------------------------------------------------------Total Consumption 195,007 175,864 120,404 84,020 116,456 131,695 151,639 178,811 191,947 186,523 214,341 188,387 1,935,094
Revenues
Base Fee $653,639 $654,537 $658,248 $655,455 $656,857 $656,141 $659,539 $660,345 $680,150 $672,980 $666,991 $665,711 $7,940,591 29.6%
Residential 411,430 412,035 414,153 412,338 412,096 413,003 415,605 416,875 434,662 428,159 422,532 419,870 5,012,758 18.7%
Multi-Family 80,161 80,252 80,504 80,181 81,845 80,807 81,149 81,079 82,289 81,462 81,129 82,360 973,218 3.6%
Non-Residential 122,329 122,067 123,620 122,693 122,945 122,622 123,207 122,773 123,348 123,388 123,509 123,822 1,476,324 5.5%
Irrigation 39,719 40,183 39,971 40,243 39,971 39,709 39,578 39,618 39,850 39,971 39,820 39,659 478,291 1.8%
Recycled Water 0 0 0 0 0 0 0 0 0 0 0 0 0 0.0%
Volume Charge 1,922,496 1,714,921 1,144,333 787,670 1,102,321 1,258,691 1,456,490 1,744,493 1,900,576 1,837,956 2,169,983 1,856,678 18,896,608 70.4%
Residential 844,561 766,837 499,605 347,975 491,451 542,519 623,000 746,565 827,103 770,847 975,767 797,002 8,233,233 30.7%
Multi-Family 345,183 334,896 275,693 205,599 281,306 294,232 311,414 311,915 299,185 273,779 315,474 324,795 3,573,469 13.3%
Non-Residential 448,680 427,375 323,686 213,909 306,454 344,705 380,665 406,612 436,749 432,165 460,719 399,963 4,581,683 17.1%
Irrigation 167,549 105,043 26,655 12,128 13,895 43,541 79,202 157,610 201,663 198,200 252,835 205,438 1,463,759 5.5%
Recycled Water 116,522 80,769 18,695 8,060 9,216 33,694 62,210 121,790 135,877 162,965 165,188 129,479 1,044,464 3.9%----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Revenues $2,576,135 $2,369,458 $1,802,581 $1,443,125 $1,759,178 $1,914,832 $2,116,029 $2,404,838 $2,580,726 $2,510,935 $2,836,974 $2,522,388 $26,837,199
FY 2024-25 Budget $26,506,593
Difference $330,606
Percent 1.2%
FY 2023-24 Actual $24,884,864
Difference $1,952,335
Percent 7.8%
Prior Study Rev Req FY 2024-25 $26,878,210
Difference ($41,011)
Percent -0.2%
15 of 19 03/21/2025DRAFTPage 487 of 994
City of San Luis Obispo
Water Rate Study
Residential Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
Per Account $30.25 $31.91 $33.67
Consumption Charge
0 - 5 CCF $8.54 $9.01 $9.51
5 - 12 CCF 9.84 10.38 10.95
12 + CCF 16.97 17.90 18.88
16 of 19 03/21/2025DRAFTPage 488 of 994
City of San Luis Obispo
Water Rate Study
Multi-Family Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
3/4" & Less $30.25 $31.91 $33.67
1"50.50 53.28 56.21
1 1/2"100.80 106.34 112.19
2"161.30 170.17 179.53
3"302.60 319.24 336.80
4"504.45 532.19 561.46
6"1,008.60 1,064.07 1,122.59
8"1,613.85 1,702.61 1,796.25
Consumption Charge
All Use $9.58 $10.11 $10.67
17 of 19 03/21/2025DRAFTPage 489 of 994
City of San Luis Obispo
Water Rate Study
Non-Residential Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
3/4" & Less $30.25 $31.91 $33.67
1"50.50 53.28 56.21
1 1/2"100.80 106.34 112.19
2"161.30 170.17 179.53
3"302.60 319.24 336.80
4"504.45 532.19 561.46
6"1,008.60 1,064.07 1,122.59
8"1,613.85 1,702.61 1,796.25
Consumption Charge
All Use $10.14 $10.70 $11.29
18 of 19 03/21/2025DRAFTPage 490 of 994
City of San Luis Obispo
Water Rate Study
Irrigation Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
3/4" & Less $30.25 $31.91 $33.67
1"50.50 53.28 56.21
1 1/2"100.80 106.34 112.19
2"161.30 170.17 179.53
3"302.60 319.24 336.80
4"504.45 532.19 561.46
6"1,008.60 1,064.07 1,122.59
8"1,613.85 1,702.61 1,796.25
Consumption Charge
All Use $10.35 $10.92 $11.52
19 of 19 03/21/2025DRAFTPage 491 of 994
Technical Appendix B
City of San Luis Obispo –Water & Wastewater Rate Study Update
Technical Appendix B – Wastewater Analysis
Page 492 of 994
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35
Revenues
Rate Revenues $19,140,992 $19,294,120 $19,448,473 $19,604,061 $19,760,893 $19,918,980 $20,078,332 $20,238,959 $20,400,871 $20,564,078 $20,728,590
Miscellaneous Revenues 2,091,847 1,215,587 1,256,106 1,259,935 1,268,705 1,344,541 1,377,303 1,447,686 1,487,260 1,529,448 1,716,724
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $21,232,839 $20,509,707 $20,704,579 $20,863,995 $21,029,598 $21,263,522 $21,455,635 $21,686,645 $21,888,131 $22,093,526 $22,445,314
Expenses
Total Unfunded Liability $1,016,890 $979,538 $1,033,969 $1,077,374 $1,122,772 $1,170,440 $1,220,491 $1,273,044 $1,328,226 $1,386,166 $1,447,003
Total Finance NonDepart 87,904 90,541 93,257 0 0 0 0 0 0 0 0
Total Wastewater Admin and Engineering 5,119,918 5,776,668 5,958,158 6,176,323 6,443,656 6,723,111 7,015,258 7,320,692 7,638,771 7,972,647 8,321,774
Total Wastewater Collection 1,519,166 1,600,108 1,677,309 1,755,343 1,808,995 1,864,307 1,921,330 1,980,119 2,040,728 2,103,216 2,167,643
Total Environmental Programs 415,941 565,915 456,871 477,967 492,306 507,075 522,287 537,956 554,095 570,718 587,839
Total Water Resource Recovery 4,517,815 4,807,649 5,036,357 5,263,892 5,448,357 5,639,683 5,838,143 6,044,020 6,257,610 6,479,221 6,709,175
Total Utility Billing 377,280 384,216 400,810 415,296 427,755 440,587 453,805 467,419 487,939 502,577 517,654
Total Water Quality Lab 753,650 789,109 826,251 862,751 888,634 915,293 942,752 971,034 1,000,165 1,030,170 1,061,075
Total Additional O&M 0 0 0 0 0 0 0 0 0 0 0
Total O&M Expenses $13,808,565 $14,993,745 $15,482,982 $16,028,946 $16,632,474 $17,260,496 $17,914,066 $18,594,284 $19,307,535 $20,044,716 $20,812,165
Rate Funded Capital $715,000 $90,000 $975,000 $2,100,000 $3,175,000 $5,125,000 $5,750,000 $6,375,000 $7,000,000 $7,650,000 $8,450,000
Net Debt Service 6,705,933 6,798,607 6,790,097 6,788,453 6,786,938 6,169,600 6,168,162 6,166,740 6,165,119 6,163,437 6,161,791
Total To / (From) Reserves 3,341 (118,527)66,971 23,253 96,016 80,174 16,947 15,796 4,337 2,261 23,017
Total Revenue Requirement $21,232,839 $21,763,825 $23,315,051 $24,940,652 $26,690,429 $28,635,271 $29,849,175 $31,151,821 $32,476,990 $33,860,413 $35,446,973
Bal. / (Def.) of Funds $0 ($1,254,118) ($2,610,471) ($4,076,657) ($5,660,831) ($7,371,749) ($8,393,540)($9,465,176) ($10,588,859) ($11,766,888) ($13,001,659)
Balance a % of Rate Adj. Req'd 0.0% 6.5% 13.4% 20.8% 28.6% 37.0% 41.8% 46.8% 51.9% 57.2% 62.7%
Proposed Rate Adjustment 0.0% 6.5% 6.5% 6.5% 6.5% 6.5% 3.5% 3.5% 3.5% 3.5% 3.5%
Add'l Revenue with Rate Adj.$0 $1,254,118 $2,610,471 $4,076,657 $5,660,831 $7,371,749 $8,393,540 $9,465,176 $10,588,859 $11,766,888 $13,001,659
Bal. / (Def.) After Rate Adj.$0 ($0)$0 ($0)$0 $0 $0 $0 $0 $0 $0
Additional Rate Adjustment Required 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Average Residential Customer Bill $63.80 (Base Charge + 6 CCF [4 CCF Cap])
Customer Bill on Proposed Adjustment $67.95 $72.37 $77.07 $82.08 $87.42 $90.48 $93.65 $96.92 $100.32 $103.83
Total Ending Balance $37,699,648 $29,720,133 $23,898,730 $21,740,699 $20,172,595 $19,329,278 $17,537,905 $19,486,827 $19,076,533 $20,826,840 $19,847,479
Exhibit 1
Summary of the Revenue Requirement
Sewer Rate Study
City of San Luis Obispo
1 of 17 03/21/2025DRAFTPage 493 of 994
City of San Luis Obispo
Sewer Rate Study
Escalation Factors
Exhibit 2
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Revenues
As Customer GrowthCustomer Growth 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
As Rate Revenue AdjustmentRate Revenue Adjustment 0.0% 6.5% 6.5% 6.5% 6.5% 6.5% 3.5% 3.5% 3.5% 3.5% 3.5%
As Miscellaneous RevenuesMiscellaneous Revenues 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
As
Expenses
As CIPCIP 0.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
As
Interest 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
New Debt Service
Low Interest Loans
Term in Years 30 30 30 30 30 30 30 30 30 30 30
Rate 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
Revenue Bond
Term in Years 30 30 30 30 30 30 30 30 30 30 30
Rate 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
2 of 17 03/21/2025DRAFTPage 494 of 994
City of San Luis Obispo
Sewer Rate Study Page 1 of 6
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35
Revenues
Rate Revenues
Residential $9,426,715 $9,502,129 $9,578,146 $9,654,771 $9,732,009 $9,809,865 $9,888,344 $9,967,451 $10,047,191 $10,127,568 $10,208,589 As Customer Growth
Multi-Family 3,774,251 3,804,445 3,834,880 3,865,559 3,896,484 3,927,656 3,959,077 3,990,750 4,022,676 4,054,857 4,087,296 As Customer Growth
Non-Residential 5,940,026 5,987,546 6,035,447 6,083,730 6,132,400 6,181,459 6,230,911 6,280,758 6,331,004 6,381,652 6,432,706 As Customer Growth--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Rate Revenues $19,140,992 $19,294,120 $19,448,473 $19,604,061 $19,760,893 $19,918,980 $20,078,332 $20,238,959 $20,400,871 $20,564,078 $20,728,590
Other Revenues
Interest on Investment $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Industrial User Charges 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000
Miscellaneous Penalties 118,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000 130,000
Utility Set-up Fees - Water Distribution 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
Utility Set-up Fees - Utility Billing 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000
Other Utility Charges 0 0 0 0 0 0 0 0 0 0 0
Low Income Subsidy (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000) (100,000)
Credit Collections 14,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Development Review Related Revenue 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000 26,000
Miscellaneous Revenues 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
Cal Poly 1,246,313 367,053 407,572 411,401 420,171 496,007 528,769 599,152 638,726 680,914 868,190 As Rate Revenue Adjustment
Cal Poly Capacity & Resilience 472,534 472,534 472,534 472,534 472,534 472,534 472,534 472,534 472,534 472,534 472,534---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Other Revenues $2,091,847 $1,215,587 $1,256,106 $1,259,935 $1,268,705 $1,344,541 $1,377,303 $1,447,686 $1,487,260 $1,529,448 $1,716,724
Total Revenues $21,232,839 $20,509,707 $20,704,579 $20,863,995 $21,029,598 $21,263,522 $21,455,635 $21,686,645 $21,888,131 $22,093,526 $22,445,314
Expenses
Unfunded Liability
52003-PERS Unfunded Liability - ADP Payments $250,875 $169,419 $169,419 $169,419 $169,419 $169,419 $169,419 $169,419 $169,419 $169,419 $169,419
52003-PERS Unfunded Liability 766,015 810,119 864,550 907,955 953,353 1,001,021 1,051,072 1,103,625 1,158,807 1,216,747 1,277,584--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Unfunded Liability $1,016,890 $979,538 $1,033,969 $1,077,374 $1,122,772 $1,170,440 $1,220,491 $1,273,044 $1,328,226 $1,386,166 $1,447,003
Finance NonDepart
56003-Contingency Expense $87,904 $90,541 $93,257 $0 $0 $0 $0 $0 $0 $0 $0--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Finance NonDepart $87,904 $90,541 $93,257 $0 $0 $0 $0 $0 $0 $0 $0
Notes
3 of 17 03/21/2025DRAFTPage 495 of 994
City of San Luis Obispo
Sewer Rate Study Page 2 of 6
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Wastewater Admin and Engineering
51001-Salaries - Regular $879,498 $960,153 $1,008,161 $1,058,569 $1,090,326 $1,123,035 $1,156,726 $1,191,428 $1,227,171 $1,263,986 $1,301,906
51003-Salaries - Contract 84,774 89,012 93,463 98,136 101,080 104,113 107,236 110,453 113,767 117,180 120,695
51004-Salaries - Temporary 132,494 204,510 211,466 153,378 157,980 162,719 167,601 172,629 177,807 183,142 188,636
51010-Overtime 2,500 2,625 2,756 2,894 2,981 3,070 3,162 3,257 3,355 3,456 3,559
52001-Retirement Contributions 67,856 71,249 74,811 78,552 80,908 83,335 85,835 88,410 91,063 93,795 96,609
52002-Retirement PARS - 401 1,118 1,174 1,233 1,294 1,333 1,373 1,414 1,457 1,500 1,546 1,592
53001-Employee Group Insurance 69,363 72,831 76,472 80,296 82,705 85,186 87,741 90,374 93,085 95,877 98,754
53002-Retiree Healthcare 13,099 13,754 14,442 15,164 15,619 16,087 16,570 17,067 17,579 18,106 18,649
55001-Medicare 13,123 13,779 14,468 15,192 15,647 16,117 16,600 17,098 17,611 18,140 18,684
61001-Advertising and Public Outreach 50,000 52,000 54,080 55,702 57,373 59,095 60,868 62,694 64,574 66,512 68,507
61007-Legal Services 42,058 43,740 45,490 46,854 48,260 49,708 51,199 52,735 54,317 55,947 57,625
61008-Parking 6,830 7,103 7,387 7,609 7,837 8,072 8,315 8,564 8,821 9,085 9,358
61013-Other Contract Services 155,315 176,248 100,618 103,636 106,746 109,948 113,246 116,644 120,143 123,747 127,460
61501-City Water Service 400 416 433 446 459 473 487 502 517 532 548
61502-City Sewer Service 330 343 357 368 379 390 402 414 426 439 452
61503-Electric Service 2,800 3,136 3,293 3,457 3,630 3,812 4,002 4,203 4,413 4,633 4,865
61504-Natural Gas Service 1,100 1,144 1,190 1,225 1,262 1,300 1,339 1,379 1,421 1,463 1,507
61505-Communication Service 600 624 649 668 688 709 730 752 775 798 822
62002-Office Supplies 5,363 5,578 5,801 5,975 6,154 6,338 6,529 6,725 6,926 7,134 7,348
62003-Postage 600 624 649 668 688 709 730 752 775 798 822
62004-Publications and Subscriptions 800 2,656 2,762 2,845 2,930 3,018 3,109 3,202 3,298 3,397 3,499
62007-Employee Recognition 1,250 1,280 1,311 1,343 1,376 1,409 1,444 1,480 250 250 250
62009-Software Licensing and Maint Agreements 31,857 37,244 38,931 40,099 41,302 42,541 43,818 45,132 46,486 47,881 49,317
62010-Office Expenses - Other 0 12,500 0 0 0 0 0 0 0 0 0
62505-Machinery and Equipment 2,750 2,860 2,974 3,064 3,156 3,250 3,348 3,448 3,552 3,658 3,768
62506-Safety Materials and Supplies 600 624 649 668 688 709 730 752 775 798 822
62509-Misc Materials and Supplies 1,550 1,612 1,676 1,727 1,779 1,832 1,887 1,943 2,002 2,062 2,124
63001-Membership and Certifications 16,900 17,576 18,279 18,827 19,392 19,974 20,573 21,190 21,826 22,481 23,155
63002-Education and Training 20,250 31,060 32,302 33,271 34,270 35,298 36,357 37,447 38,571 39,728 40,920
63003-Trips and Meetings 500 520 541 557 574 591 609 627 646 665 685
65013-Credit Cards Merchant Fees 223,992 230,711 237,633 244,762 252,104 259,668 267,458 275,481 283,746 292,258 301,026
75001-Transfers - Out 1,451,616 1,640,326 1,722,342 1,808,460 1,898,882 1,993,827 2,093,518 2,198,194 2,308,104 2,423,509 2,544,684
75002-Reimbursement Transfer Out 1,838,634 2,077,656 2,181,539 2,290,616 2,405,147 2,525,404 2,651,675 2,784,258 2,923,471 3,069,645 3,223,127--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Wastewater Admin and Engineering $5,119,918 $5,776,668 $5,958,158 $6,176,323 $6,443,656 $6,723,111 $7,015,258 $7,320,692 $7,638,771 $7,972,647 $8,321,774
Wastewater Collection
51001-Salaries - Regular $911,314 $956,879 $1,004,723 $1,054,960 $1,086,608 $1,119,207 $1,152,783 $1,187,366 $1,222,987 $1,259,677 $1,297,467
51010-Overtime 6,500 6,825 7,166 7,525 7,750 7,983 8,222 8,469 8,723 8,985 9,254
51017-Standby 15,000 15,750 16,538 17,364 17,885 18,422 18,975 19,544 20,130 20,734 21,356
51018-Call Back 30,300 31,815 33,406 35,076 36,128 37,212 38,329 39,478 40,663 41,883 43,139
52001-Retirement Contributions 89,068 93,522 98,198 103,108 106,201 109,387 112,669 116,049 119,530 123,116 126,809
53001-Employee Group Insurance 135,777 142,566 149,694 157,179 161,894 166,751 171,753 176,906 182,213 187,679 193,310
53002-Retiree Healthcare 12,916 13,562 14,240 14,952 15,401 15,863 16,339 16,829 17,334 17,854 18,390
55001-Medicare 13,139 13,796 14,485 15,210 15,666 16,136 16,620 17,119 17,632 18,161 18,706
61009-Regulatory Fees 5,000 5,200 5,408 5,570 5,737 5,909 6,087 6,269 6,457 6,651 6,851
61013-Other Contract Services 45,150 46,956 48,835 50,300 51,809 53,363 54,964 56,613 58,311 60,060 61,862
61027-Control Systems 12,058 12,540 13,042 13,433 13,836 14,251 14,679 15,119 15,573 16,040 16,521
61503-Electric Service 35,543 45,000 47,250 49,613 52,093 54,698 57,433 60,304 63,320 66,485 69,810
61504-Natural Gas Service 600 624 649 668 688 709 730 752 775 798 822
61505-Communication Service 9,600 9,984 10,383 10,695 11,016 11,346 11,687 12,037 12,398 12,770 13,153
62002-Office Supplies 2,500 2,600 2,704 2,785 2,869 2,955 3,043 3,135 3,229 3,326 3,425
62009-Software Licensing and Maint Agreements 30,233 31,442 32,700 33,681 34,691 35,732 36,804 37,908 39,046 40,217 41,423
62010-Office Expenses - Other 3,500 3,640 3,786 3,899 4,016 4,137 4,261 4,389 4,520 4,656 4,795
62502-Construction Materials and Supplies 71,480 74,339 77,313 79,632 82,021 84,482 87,016 89,627 92,315 95,085 97,938
62503-Equipment Maintenance Supplies 31,763 33,033 34,354 35,385 36,446 37,540 38,666 39,826 41,021 42,251 43,519
62506-Safety Materials and Supplies 12,050 12,532 13,033 13,424 13,827 14,242 14,669 15,109 15,562 16,029 16,510
62509-Misc Materials and Supplies 27,400 28,496 29,636 30,525 31,441 32,384 33,355 34,356 35,387 36,448 37,542
63001-Membership and Certifications 5,275 5,486 5,705 5,877 6,053 6,234 6,422 6,614 6,813 7,017 7,227
63002-Education and Training 12,500 13,000 13,520 13,926 14,343 14,774 15,217 15,673 16,144 16,628 17,127
63003-Trips and Meetings 500 520 541 557 574 591 609 627 646 665 685--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Total Wastewater Collection $1,519,166 $1,600,108 $1,677,309 $1,755,343 $1,808,995 $1,864,307 $1,921,330 $1,980,119 $2,040,728 $2,103,216 $2,167,643
4 of 17 03/21/2025DRAFTPage 496 of 994
City of San Luis Obispo
Sewer Rate Study Page 3 of 6
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Environmental Programs
51001-Salaries - Regular $272,020 $285,621 $299,902 $314,897 $324,344 $334,074 $344,096 $354,419 $365,052 $376,003 $387,283
51010-Overtime 1,000 1,050 1,103 1,158 1,192 1,228 1,265 1,303 1,342 1,382 1,424
51018-Call Back 100 105 110 116 119 123 126 130 134 138 142
52001-Retirement Contributions 23,522 24,698 25,933 27,229 28,046 28,888 29,754 30,647 31,566 32,513 33,489
53001-Employee Group Insurance 31,804 33,394 35,064 36,817 37,922 39,060 40,231 41,438 42,681 43,962 45,281
53002-Retiree Healthcare 2,755 2,893 3,037 3,189 3,285 3,384 3,485 3,590 3,697 3,808 3,922
55001-Medicare 3,940 4,138 4,344 4,562 4,698 4,839 4,985 5,134 5,288 5,447 5,610
61005-Data Processing Services 11,000 11,440 11,898 12,255 12,622 13,001 13,391 13,793 14,206 14,633 15,072
61013-Other Contract Services 46,800 178,672 50,619 52,137 53,702 55,313 56,972 58,681 60,442 62,255 64,122
61505-Communication Service 2,500 2,600 2,704 2,785 2,869 2,955 3,043 3,135 3,229 3,326 3,425
62002-Office Supplies 1,750 1,820 1,893 1,950 2,008 2,068 2,130 2,194 2,260 2,328 2,398
62004-Publications and Subscriptions 250 260 270 279 287 295 304 313 323 333 343
62007-Employee Recognition 500 520 541 557 574 591 609 627 646 665 685
62010-Office Expenses - Other 2,000 2,080 2,163 2,228 2,295 2,364 2,435 2,508 2,583 2,660 2,740
62503-Equipment Maintenance Supplies 1,200 1,248 1,298 1,337 1,377 1,418 1,461 1,505 1,550 1,596 1,644
62506-Safety Materials and Supplies 1,000 1,040 1,082 1,114 1,147 1,182 1,217 1,254 1,291 1,330 1,370
62509-Misc Materials and Supplies 3,300 3,432 3,569 3,676 3,787 3,900 4,017 4,138 4,262 4,390 4,521
63001-Membership and Certifications 1,500 1,545 1,607 1,655 1,705 1,756 1,808 1,863 1,919 1,976 2,035
63002-Education and Training 8,500 8,840 9,194 9,469 9,753 10,046 10,347 10,658 10,978 11,307 11,646
63003-Trips and Meetings 500 520 541 557 574 591 609 627 646 665 685--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Environmental Programs $415,941 $565,915 $456,871 $477,967 $492,306 $507,075 $522,287 $537,956 $554,095 $570,718 $587,839
Water Resource Recovery
51001-Salaries - Regular $1,349,832 $1,417,324 $1,488,190 $1,562,599 $1,609,477 $1,657,762 $1,707,495 $1,758,719 $1,811,481 $1,865,826 $1,921,800
51010-Overtime 37,000 38,850 40,793 42,832 44,117 45,441 46,804 48,208 49,654 51,144 52,678
51017-Standby 19,500 20,475 21,499 22,574 23,251 23,948 24,667 25,407 26,169 26,954 27,763
51018-Call Back 12,500 13,125 13,781 14,470 14,904 15,352 15,812 16,286 16,775 17,278 17,797
52001-Retirement Contributions 131,754 138,342 145,259 152,522 157,098 161,811 166,665 171,665 176,815 182,119 187,583
53001-Employee Group Insurance 142,550 149,678 157,162 165,020 169,971 175,070 180,322 185,731 191,303 197,042 202,954
53002-Retiree Healthcare 23,629 24,810 26,051 27,353 28,174 29,019 29,890 30,786 31,710 32,661 33,641
55001-Medicare 19,429 20,400 21,420 22,491 23,166 23,861 24,577 25,314 26,073 26,856 27,661
61009-Regulatory Fees 68,541 71,283 74,134 76,358 78,649 81,008 83,438 85,941 88,520 91,175 93,911
61011-Maintenance 730 759 789 813 837 862 888 915 942 971 1,000
61013-Other Contract Services 698,118 726,043 755,084 777,737 801,069 825,101 849,854 875,350 901,610 928,659 956,518
61027-Control Systems 28,193 29,321 30,494 31,408 32,351 33,321 34,321 35,350 36,411 37,503 38,628
61501-City Water Service 6,600 6,864 7,139 7,353 7,573 7,800 8,035 8,276 8,524 8,780 9,043
61502-City Sewer Service 3,000 3,120 3,245 3,342 3,442 3,546 3,652 3,762 3,874 3,991 4,110
61503-Electric Service 1,075,000 1,204,000 1,264,200 1,327,410 1,393,781 1,463,470 1,536,643 1,613,475 1,694,149 1,778,856 1,867,799
61504-Natural Gas Service 18,000 18,720 19,469 20,053 20,654 21,274 21,912 22,570 23,247 23,944 24,662
61505-Communication Service 12,000 12,480 12,979 13,369 13,770 14,183 14,608 15,046 15,498 15,963 16,442
61506-Solid Waste Service 21,250 22,100 22,984 23,674 24,384 25,115 25,869 26,645 27,444 28,267 29,115
62002-Office Supplies 8,000 8,320 8,653 8,912 9,180 9,455 9,739 10,031 10,332 10,642 10,961
62004-Publications and Subscriptions 1,000 1,040 1,082 1,114 1,147 1,182 1,217 1,254 1,291 1,330 1,370
62007-Employee Recognition 2,000 2,080 2,163 2,228 2,295 2,364 2,435 2,508 2,583 2,660 2,740
62009-Software Licensing and Maint Agreements 24,196 25,084 26,087 26,870 27,676 28,506 29,361 30,242 31,149 32,084 33,046
62010-Office Expenses - Other 2,000 2,080 2,163 2,228 2,295 2,364 2,435 2,508 2,583 2,660 2,740
62501-Chemicals 583,989 613,188 643,848 676,040 696,321 717,211 738,727 760,889 783,716 807,227 831,444
62502-Construction Materials and Supplies 13,000 13,520 14,061 14,483 14,917 15,365 15,826 16,300 16,789 17,293 17,812
62503-Equipment Maintenance Supplies 142,348 148,042 153,963 158,582 163,340 168,240 173,287 178,486 183,840 189,355 195,036
62506-Safety Materials and Supplies 25,056 26,058 27,101 27,914 28,751 29,614 30,502 31,417 32,359 33,330 34,330
62509-Misc Materials and Supplies 10,600 11,024 11,465 11,809 12,163 12,528 12,904 13,291 13,690 14,100 14,523
63001-Membership and Certifications 7,000 7,280 7,571 7,798 8,032 8,273 8,521 8,777 9,040 9,312 9,591
63002-Education and Training 30,500 31,720 32,989 33,978 34,998 36,048 37,129 38,243 39,390 40,572 41,789
63003-Trips and Meetings 500 520 541 557 574 591 609 627 646 665 685--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Resource Recovery $4,517,815 $4,807,649 $5,036,357 $5,263,892 $5,448,357 $5,639,683 $5,838,143 $6,044,020 $6,257,610 $6,479,221 $6,709,175
5 of 17 03/21/2025DRAFTPage 497 of 994
City of San Luis Obispo
Sewer Rate Study Page 4 of 6
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Utility Billing
51001-Salaries - Regular $87,263 $91,627 $96,208 $101,018 $104,049 $107,170 $110,385 $113,697 $117,108 $120,621 $124,240
51010-Overtime 1,500 1,575 1,654 1,736 1,789 1,842 1,897 1,954 2,013 2,073 2,136
52001-Retirement Contributions 8,767 9,205 9,666 10,149 10,453 10,767 11,090 11,423 11,765 12,118 12,482
53001-Employee Group Insurance 11,738 12,325 12,941 13,588 13,996 14,416 14,849 15,294 15,753 16,225 16,712
53002-Retiree Healthcare 1,114 1,170 1,229 1,290 1,329 1,369 1,410 1,452 1,496 1,541 1,587
55001-Medicare 1,255 1,318 1,384 1,453 1,496 1,541 1,587 1,635 1,684 1,735 1,787
61005-Data Processing Services 30,250 31,460 32,718 33,700 34,711 35,752 36,825 37,930 39,067 40,240 41,447
61013-Other Contract Services 132,355 128,326 133,459 137,463 141,586 145,834 150,209 154,715 159,357 164,137 169,062
61028-Personnel Services 0 51 106 110 113 116 120 123 6,624 6,823 7,028
62001-Print and Reproduction 25,024 26,025 27,066 27,878 28,714 29,575 30,463 31,377 32,318 33,287 34,286
62002-Office Supplies 250 260 270 279 287 295 304 313 323 333 343
62003-Postage 75,014 78,014 81,135 83,569 86,076 88,658 91,318 94,058 96,879 99,786 102,779
62007-Employee Recognition 100 104 108 111 115 118 122 125 129 133 137
62505-Machinery and Equipment 375 390 406 418 430 443 457 470 484 499 514
62509-Misc Materials and Supplies 125 130 135 139 143 148 152 157 161 166 171
63001-Membership and Certifications 50 52 54 56 57 59 61 63 65 67 69
63002-Education and Training 1,500 1,560 1,622 1,671 1,721 1,773 1,826 1,881 1,937 1,995 2,055
63003-Trips and Meetings 600 624 649 668 688 709 730 752 775 798 822--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Utility Billing $377,280 $384,216 $400,810 $415,296 $427,755 $440,587 $453,805 $467,419 $487,939 $502,577 $517,654
Water Quality Lab
51001-Salaries - Regular $399,792 $419,781 $440,771 $462,809 $476,693 $490,994 $505,724 $520,896 $536,523 $552,618 $569,197
51004-Salaries - Temporary 5,000 5,250 5,513 5,788 5,962 6,141 6,325 6,515 6,710 6,911 7,119
51010-Overtime 12,000 12,600 13,230 13,892 14,308 14,737 15,180 15,635 16,104 16,587 17,085
52001-Retirement Contributions 36,404 38,224 40,135 42,142 43,406 44,708 46,050 47,431 48,854 50,320 51,829
53001-Employee Group Insurance 65,696 68,981 72,430 76,051 78,333 80,683 83,103 85,596 88,164 90,809 93,533
53002-Retiree Healthcare 6,594 6,924 7,270 7,634 7,863 8,099 8,342 8,592 8,850 9,115 9,389
55001-Medicare 5,727 6,013 6,314 6,630 6,829 7,034 7,245 7,462 7,686 7,916 8,154
61009-Regulatory Fees 7,000 7,280 7,571 7,798 8,032 8,273 8,521 8,777 9,040 9,312 9,591
61013-Other Contract Services 127,372 132,467 137,765 141,898 146,155 150,540 155,056 159,708 164,499 169,434 174,517
61505-Communication Service 1,800 1,872 1,947 2,005 2,065 2,127 2,191 2,257 2,325 2,394 2,466
62002-Office Supplies 1,100 1,144 1,190 1,225 1,262 1,300 1,339 1,379 1,421 1,463 1,507
62004-Publications and Subscriptions 450 468 487 501 516 532 548 564 581 599 617
62007-Employee Recognition 600 624 649 668 688 709 730 752 775 798 822
62009-Software Licensing and Maint Agreements 9,000 9,360 9,734 10,026 10,327 10,637 10,956 11,285 11,623 11,972 12,331
62506-Safety Materials and Supplies 5,550 5,772 6,003 6,183 6,368 6,560 6,756 6,959 7,168 7,383 7,604
62509-Misc Materials and Supplies 53,589 55,732 57,962 59,701 61,492 63,336 65,236 67,194 69,209 71,286 73,424
63001-Membership and Certifications 4,877 5,072 5,275 5,433 5,596 5,764 5,937 6,115 6,299 6,488 6,682
63002-Education and Training 11,100 11,544 12,006 12,366 12,737 13,119 13,513 13,918 14,336 14,766 15,209--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Quality Lab $753,650 $789,109 $826,251 $862,751 $888,634 $915,293 $942,752 $971,034 $1,000,165 $1,030,170 $1,061,075
6 of 17 03/21/2025DRAFTPage 498 of 994
City of San Luis Obispo
Sewer Rate Study Page 5 of 6
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Additional O&M
Future O&M $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Additional O&M $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total O&M Expenses $13,808,565 $14,993,745 $15,482,982 $16,028,946 $16,632,474 $17,260,496 $17,914,066 $18,594,284 $19,307,535 $20,044,716 $20,812,165
Rate Funded Capital $715,000 $90,000 $975,000 $2,100,000 $3,175,000 $5,125,000 $5,750,000 $6,375,000 $7,000,000 $7,650,000 $8,450,000 $2,773,962 FY 2023-24 Dep. Exp.
Debt Service
WRRF Energy Efficiency Project $616,939 $616,711 $616,477 $616,236 $615,987 $0 $0 $0 $0 $0 $0 Debt Schedule
Tank Farm Lift Station - I Bank 549,999 548,786 547,535 546,242 544,908 543,530 542,108 540,639 539,123 537,557 535,940 Debt Schedule
2018 Refunding Bond - Dispatch Center 30,203 30,156 23,132 23,021 23,090 23,116 23,100 23,147 23,042 22,926 22,897 Debt Schedule
2019 SRF Loan - WRRF Upgrade 5,808,792 5,902,954 5,902,954 5,902,954 5,902,954 5,902,954 5,902,954 5,902,954 5,902,954 5,902,954 5,902,954 Debt Schedule
Additional Long-Term Debt 0 0 0 0 0 0 0 0 0 0 0 Calculated @ 5% for 30 yrs---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Debt Service $7,005,933 $7,098,607 $7,090,097 $7,088,453 $7,086,938 $6,469,600 $6,468,162 $6,466,740 $6,465,119 $6,463,437 $6,461,791
LESS: Other Funding
Development Impact Fees $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net Debt Service $6,705,933 $6,798,607 $6,790,097 $6,788,453 $6,786,938 $6,169,600 $6,168,162 $6,166,740 $6,165,119 $6,163,437 $6,161,791
To / (From) Reserves
To / (From) Operating Reserve $3,341 ($118,527)$66,971 $23,253 $96,016 $80,174 $16,947 $15,796 $4,337 $2,261 $23,017
To / (From) Capital Reserve 0 0 0 0 0 0 0 0 0 0 0
To / (From) Rate Stabilization Reserve 0 0 0 0 0 0 0 0 0 0 0---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total To / (From) Reserves $3,341 ($118,527) $66,971 $23,253 $96,016 $80,174 $16,947 $15,796 $4,337 $2,261 $23,017
Total Revenue Requirement $21,232,839 $21,763,825 $23,315,051 $24,940,652 $26,690,429 $28,635,271 $29,849,175 $31,151,821 $32,476,990 $33,860,413 $35,446,973
Bal. / (Def.) of Funds $0 ($1,254,118) ($2,610,471) ($4,076,657) ($5,660,831) ($7,371,749) ($8,393,540) ($9,465,176) ($10,588,859) ($11,766,888) ($13,001,659)
Balance a % of Rate Adj. Req'd 0.0% 6.5% 13.4% 20.8% 28.6% 37.0% 41.8% 46.8% 51.9% 57.2% 62.7%
Proposed Rate Adjustment 0.0%6.5% 6.5% 6.5% 6.5% 6.5% 3.5% 3.5% 3.5% 3.5% 3.5%
Months of Adjustment 12 12 12 12 12 12 12 12 12 12 12
Add'l Revenue with Rate Adj.$0 $1,254,118 $2,610,471 $4,076,657 $5,660,831 $7,371,749 $8,393,540 $9,465,176 $10,588,859 $11,766,888 $13,001,659
Bal. / (Def.) After Rate Adj.$0 ($0) $0 ($0) $0 $0 $0 $0 $0 $0 $0
Add'l Rate Adj. Req'd 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
7 of 17 03/21/2025DRAFTPage 499 of 994
City of San Luis Obispo
Sewer Rate Study Page 6 of 6
Revenue Requirement
Exhibit 3
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Notes
Average Residential Customer Bill $63.80 (Base Charge + 6 CCF [4 CCF Cap])
Customer Bill on Proposed Adjustment $67.95 $72.37 $77.07 $82.08 $87.42 $90.48 $93.65 $96.92 $100.32 $103.83
Bill Difference - Monthly 4.15 4.42 4.70 5.01 5.34 3.06 3.17 3.28 3.39 3.51
Cumulative Bill Difference 4.15 8.57 13.27 18.28 23.62 26.68 29.85 33.12 36.52 40.03
Debt Service Coverage Ratio (all debt, not including DIF)
Before Rate Adjustment 1.06 0.78 0.74 0.68 0.62 0.62 0.55 0.48 0.40 0.32 0.25
After Proposed Rate Adjustment 1.06 0.95 1.10 1.26 1.42 1.76 1.85 1.94 2.04 2.14 2.26
Debt Service Coverage Ratio (all debt, including DIF)
Before Rate Adjustment 1.15 0.86 0.82 0.77 0.71 0.71 0.64 0.57 0.49 0.41 0.35
After Proposed Rate Adjustment 1.15 1.04 1.19 1.34 1.50 1.85 1.94 2.03 2.13 2.23 2.36
Reserve Funds
Total Beginning Balance $53,797,920 $37,699,648 $29,720,133 $23,898,730 $21,740,699 $20,172,595 $19,329,278 $17,537,905 $19,486,827 $19,076,533 $20,826,840
Operating Fund
Beginning Balance $2,761,713 $2,998,749 $3,096,596 $3,205,789 $3,326,495 $3,452,099 $3,582,813 $3,718,857 $3,861,507 $4,008,943 $4,162,433 20% of O&M
Plus: Additions 3,341 0 66,971 23,253 96,016 80,174 16,947 15,796 4,337 2,261 23,017
Less: Uses of Funds 0 (118,527)0 0 0 0 0 0 0 0 0
Ending Balance $2,765,054 $2,880,222 $3,163,568 $3,229,043 $3,422,511 $3,532,274 $3,599,760 $3,734,653 $3,865,844 $4,011,204 $4,185,450
Capital Fund
Beginning Balance $43,991,991 $27,586,321 $19,433,424 $13,421,739 $11,055,952 $9,268,794 $8,235,705 $6,246,676 $7,988,667 $7,363,876 $8,890,729 Balance of Funds
Plus: Additions 0 0 0 0 0 0 0 1,633,125 0 1,448,046 0
Plus: LTD Proceeds 15,000,000 0 0 0 0 0 0 0 0 0 0
Development Impact Fees 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000
Less: Capital Project Funding (31,701,613) (8,460,987) (6,488,375) (2,781,284) (2,264,120) (1,523,492) (2,408,320)(300,000)(1,014,630)(300,000)(1,602,379)
Ending Balance $27,890,378 $19,725,334 $13,545,049 $11,240,455 $9,391,832 $8,345,302 $6,427,385 $8,179,801 $7,574,037 $9,111,922 $7,888,350
Rate Stabilization
Beginning Balance $957,050 $1,027,412 $1,102,947 $1,184,036 $1,271,086 $1,364,536 $1,423,594 $1,485,207 $1,549,486 $1,616,548 $1,686,512 5% of Rate Revenues
Plus: Additions 0 0 0 0 0 0 0 0 0 0 0
Less: Capital Project Funding 0 0 0 0 0 0 0 0 0 0 0
Ending Balance $957,050 $1,027,412 $1,102,947 $1,184,036 $1,271,086 $1,364,536 $1,423,594 $1,485,207 $1,549,486 $1,616,548 $1,686,512
UFL Trust & SRF Loan
Beginning Balance $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166
Plus: Additions 0 0 0 0 0 0 0 0 0 0 0
Less: Capital Project Funding 0 0 0 0 0 0 0 0 0 0 0
Ending Balance $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166 $6,087,166
Total Ending Balance $37,699,648 $29,720,133 $23,898,730 $21,740,699 $20,172,595 $19,329,278 $17,537,905 $19,486,827 $19,076,533 $20,826,840 $19,847,479
Days of O&M 997 723 563 495 443 409 357 383 361 379 348
8 of 17 03/21/2025DRAFTPage 500 of 994
City of San Luis Obispo
Sewer Rate Study Page 1 of 3
Capital Improvement Plan
Exhibit 4
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Total Notes
Wastewater Collection
Upcoming Pipeline Replacement Projects $0 $0 $0 $0 $0 $0 $0 $0 $2,280,186 $0 $2,419,049 $4,699,236
Wastewater Collection System - Point Repairs 120,000 353,600 254,616 262,254 0 278,226 0 295,170 0 0 0 1,563,866
Sewer-main Replacement: Morro, Mill, Santa Rosa, and Chorro 1,100,000 46,800 0 0 0 0 0 0 0 0 0 1,146,800
Sewer-main Replacement: Henry, and Sierra Way 2,200,000 0 0 0 0 0 0 0 0 0 0 2,200,000
Sewer-main Replacement: Ocenaire - Cayucos to Froom Road 700,000 36,400 0 0 0 0 0 0 0 0 0 736,400
Sewer-main Replacement: Islay - Nipomo to Santa Rosa 0 2,184,000 0 0 0 0 0 0 0 0 0 2,184,000
Sewer-main Replacement: Taft, Hathaway, Phillips, Buena Vista, and Loomis 0 343,200 0 0 0 0 0 0 0 0 0 343,200
Sewer-main Replacement: Serrano, Bressi, Dana and Higuera (1,275,000)0 0 0 0 2,196,824 0 0 0 0 0 921,824
Sewer-main Replacement: Murray, Chorro, and Meinecke 0 270,400 0 0 0 0 0 0 0 0 0 270,400
Sewer-main Replacement: Chorro - Boysen to Rougeot 250,000 0 2,917,475 0 0 0 0 0 0 0 0 3,167,475
Sewer-main Replacement: Buchon - Morro to Johnson 0 0 143,222 2,715,427 0 0 0 0 0 0 0 2,858,648
Sewer-main Replacement: Bee Bee from High Street to South Street 0 0 0 0 0 0 0 24,597 696,724 0 0 721,321
Sewer-main Replacement: Lincoln, Chorro, Morro, Toro 0 0 0 0 0 0 161,197 3,056,237 0 0 0 3,217,434
Sewer-main Replacement: Foothill Sewer Siphon 0 0 0 0 168,826 2,260,584 0 0 0 0 0 2,429,411
Sewer-main Replacement: Broad Street, Sacramento, Capiltolio, and Bullock 0 0 0 0 0 0 0 0 0 65,239 3,964,553 4,029,792
Sewer-main Replacement: Ocenaire - Laguna to Caycucos 0 0 0 0 0 115,927 2,364,224 0 0 0 0 2,480,151
Sewer-main Replacement: Broad, Murray, and Chorro 0 0 0 158,445 0 0 0 0 4,294,351 0 0 4,452,796
Sewer-main Replacement: San Jose, Ramona, Monte Vista, California 1,225,000 0 328,879 0 0 0 0 0 0 0 0 1,553,879
Sewer Inflow/Infiltration Reduction 470,000 436,800 445,578 458,945 281,377 289,819 298,513 307,468 0 0 0 2,988,501
Sewer Utility Trench Repair 25,000 26,000 26,523 27,318 33,765 34,778 35,822 36,896 38,003 39,143 40,317 363,566
Sewer Maintenance Cover Adjustments 30,000 114,400 31,827 32,782 39,393 40,575 41,792 43,046 44,337 45,667 47,037 510,855
Flow Study 0 0 0 0 0 0 0 0 0 0 10,536 10,536
Sewer Lift Station Maintenance 20,000 83,200 0 87,418 0 92,742 0 98,390 0 0 0 381,750
Laguna Lift Station Upgrades 0 332,800 0 0 0 0 0 0 0 0 0 332,800
Buckley Sewer Lift Station 150,000 0 0 0 0 0 0 0 0 0 0 150,000
Foothill Lift Station 0 0 0 0 0 463,710 4,179,183 0 0 0 0 4,642,893
Airport Lift Station 1,227,000 0 0 0 4,102,480 0 0 0 0 0 0 5,329,480
Silver City Lift Station 0 208,000 0 0 0 0 0 0 0 0 0 208,000
Placeholder 0 0 0 54,636 0 57,964 59,703 55,344 0 0 0 227,647
Foothill and Santa Rosa CalTrans Pipeline Replacement 350,000 0 0 0 0 0 0 0 0 0 0 350,000
Water Meters and Boxes (sewer fund contribution)0 0 0 27,318 28,138 28,982 59,703 61,494 221,685 228,335 235,185 890,839
AMI Water Meters 460,000 511,680 521,963 0 0 0 0 0 0 0 0 1,493,643
AMI Meter Box Lids 75,000 78,000 79,568 0 0 0 0 0 0 0 0 232,568
AMI Radio 360,000 406,640 414,812 0 0 0 0 0 0 0 0 1,181,452
Fleet - WWC
Wastewater Collections Portable Generator (1620)$0 $0 $0 $0 $0 $0 $0 $245,975 $0 $0 $0 $245,975
Portable Sewage Pump (1730)0 0 0 0 0 0 0 92,241 0 0 0 92,241
Caterpillar Mini Escavator 0 0 0 0 0 115,927 0 0 0 0 0 115,927
Wastewater Collections Truck w/Dump Bed (1811)0 0 0 0 0 0 0 122,987 0 0 0 122,987
Wastewater Collections Truck (1631)0 0 0 0 0 0 0 101,465 0 0 0 101,465
Wastewater Collections Service Truck (1608) 0 0 0 0 0 0 119,405 0 0 0 0 119,405
Wastewater Collections Service Truck (1810)0 0 0 0 0 0 119,405 0 0 0 0 119,405
Wastewater Collection Van (1643) 0 0 0 0 0 0 149,257 0 0 0 0 149,257
Wastewater Collections Hydrocleaner (1407) 0 0 0 628,318 0 0 0 0 0 0 0 628,318
Wastewater Collections Concrete Trailer (1804) 0 0 0 0 0 0 0 0 63,339 0 0 63,339
Dump Truck (0840)0 0 0 0 0 202,873 0 0 0 0 0 202,873------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Wastewater Collection $7,487,000 $5,431,920 $5,164,461 $4,452,863 $4,653,979 $6,178,931 $7,588,202 $4,541,309 $7,638,624 $378,384 $6,716,679 $60,232,352
9 of 17 03/21/2025DRAFTPage 501 of 994
City of San Luis Obispo
Sewer Rate Study Page 2 of 3
Capital Improvement Plan
Exhibit 4
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Total Notes
Water Resource Recovery Facilty
WRRF - Asset Replacement $0 $208,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $208,000
Coating Maintenance 0 0 26,523 0 0 0 0 0 0 0 0 26,523
Headworks Grit Piping and Blowers 0 0 265,225 0 0 0 0 0 0 0 0 265,225
Rebuild Influent Storm Pumps 75,000 78,000 0 0 0 0 0 0 0 0 0 153,000
Membrane Replacement 0 0 0 0 0 0 0 0 0 0 2,687,833 2,687,833
UV Bulb Replacement (annual replacement)50,000 0 0 54,636 56,275 57,964 59,703 61,494 0 0 0 340,072
Cityworks Strategic Plan & Implementation 0 0 21,218 0 0 0 0 0 0 0 0 21,218
Sludge Drying Bed Polymer Feed and Piping 0 0 0 0 0 69,556 0 0 0 0 0 69,556
Screw Press 0 208,000 0 0 0 0 0 0 0 0 0 208,000
WRRF and Wastewater Collection Maintenance Facility (6,563,331)0 0 0 0 0 0 0 0 0 0 (6,563,331)
Lab Admin HVAC 0 156,000 0 0 0 0 0 0 0 0 0 156,000
WRRF Digester Flare Upgrade 0 0 1,564,828 0 0 0 0 0 0 0 0 1,564,828
Slurry Seal and Pavement 0 2,080,000 0 0 0 0 0 0 0 0 0 2,080,000
Fleet - WRRF
1000521-05-Sewer WRRF Compact Pickup (0851)0 39,520 0 0 0 0 0 0 0 0 0 39,520
Compact Pick-up (0851)0 0 0 0 0 0 94,330 0 0 0 0 94,330------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Water Resource Recovery Facilty ($6,438,331) $2,769,520 $1,877,793 $54,636 $56,275 $127,520 $154,033 $61,494 $0 $0 $2,687,833 $1,350,773
Miscellaneous
Pavement Management (Sewer Fund Contribution)$0 $8,320 $0 $0 $0 $0 $0 $0 $0 $0 $0 $8,320
ATP - Higuera Corridor Complete Street Design (Sewer Fund Contribution)0 5,200 0 0 0 0 0 0 0 0 0 5,200
Corp Yard Material Storage Stalls (Sewer Fund Contribution)0 0 26,523 0 281,377 0 0 0 0 0 0 307,900
Corporation Yard Permimeter Fence Replacement (Sewer Fund Contribution)0 0 0 0 0 0 0 6,149 76,006 0 0 82,156
Corporation Yard EV Charging Station (Sewer Fund Contribution)0 0 84,872 0 0 0 0 0 0 0 0 84,872
Environmental Compliance
Pickup $0 $0 $0 $0 $51,211 $0 $0 $0 $0 $0 $0 $51,211
Sedan 0 0 0 45,895 0 0 0 0 0 0 0 45,895
Water Quality Lab
Water Quality Lab SUV 0 0 0 0 0 0 86,569 0 0 0 0 86,569
Administration
Roofing Project (Morro Refurbishment)65,000 0 0 0 0 0 0 0 0 0 0 65,000
Future Sewer Fund Vehicles 0 0 0 0 0 0 0 0 0 78,286 80,635 158,921
Future Water Fund Vehicles 0 0 0 0 0 0 0 0 0 130,477 0 130,477
Shared IT
Wireless System Citywide 0 0 0 14,203 0 0 0 18,532 0 0 0 32,735
Server Operating System 0 0 0 0 0 0 0 0 0 0 0 0
UB System Upgrade 0 0 0 0 0 0 0 0 0 0 135,458 135,458
Network Firewalls 0 0 0 0 0 24,063 0 0 0 0 32,338 56,401
Virtual Private Network Replacment 0 0 0 0 0 17,979 0 0 0 0 24,162 42,141
Network Switch Infrastructure Repl. 0 0 0 0 65,733 0 0 0 0 88,340 0 154,073
Network Security Upgrade 0 0 0 10,175 0 0 12,149 0 0 14,506 0 36,830
Radio Handhelds Repl. 0 0 0 0 0 0 0 83,192 0 0 0 83,192
City SAN (Network Storage)0 0 9,727 0 0 0 12,322 0 0 0 15,609 37,657
Security Cameras 0 640 0 0 629 0 851 903 0 845 0 3,868
Facility Security Citywide Camera Storage added redundancy 0 0 0 0 629 0 0 0 0 845 0 1,474
Uninterruptible Power Supplies (UPS’s Servers and Storage)0 0 0 3,513 0 0 4,195 0 0 5,009 0 12,716
PD/City backup storage, secondary storage 0 0 0 0 3,914 0 0 0 0 5,261 0 9,175
VM Infrastructure 0 21,455 0 0 25,372 0 0 30,296 0 0 36,175 113,298------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Miscellaneous $65,000 $49,547 $121,121 $73,785 $428,865 $42,042 $116,085 $139,073 $76,006 $323,569 $347,867 $1,782,960
10 of 17 03/21/2025DRAFTPage 502 of 994
City of San Luis Obispo
Sewer Rate Study Page 3 of 3
Capital Improvement Plan
Exhibit 4
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 Total
CIP Carryover $31,002,944 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $31,002,944
Unidentified Future Capital Projects $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,500,000 $0 $5,500,000
Delayed Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Transfer to Cash Reserve $0 $0 $0 $0 $0 $0 $0 $1,633,125 $0 $1,448,046 $0 $3,081,171
Total Capital Improvement Projects $32,116,613 $8,250,987 $7,163,375 $4,581,284 $5,139,120 $6,348,492 $7,858,320 $6,375,000 $7,714,630 $7,650,000 $9,752,379 $102,950,200
Less: Outside Funding Sources
Operating Fund Reserves $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Fund Reserves 31,401,613 8,160,987 6,188,375 2,481,284 1,964,120 1,223,492 2,108,320 0 714,630 0 1,302,379 55,545,200
Grants 0 0 0 0 0 0 0 0 0 0 0 0
WRRF Upgrade Debt 0 0 0 0 0 0 0 0 0 0 0 0
Assumed New Low Interest Loan 0 0 0 0 0 0 0 0 0 0 0 0
Additional Revenue Bonds 0 0 0 0 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Funding Sources $31,401,613 $8,160,987 $6,188,375 $2,481,284 $1,964,120 $1,223,492 $2,108,320 $0 $714,630 $0 $1,302,379 $55,545,200
Rate Funded Capital $715,000 $90,000 $975,000 $2,100,000 $3,175,000 $5,125,000 $5,750,000 $6,375,000 $7,000,000 $7,650,000 $8,450,000 $47,405,000
11 of 17 03/21/2025DRAFTPage 503 of 994
City of San Luis Obispo
Sewer Rate Study Page 1 of 3
Revenues at Present Rates
Exhibit 5
Effective 7.1.24 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Total
Residential
$ / Acct.
Base Fee $24.52 12,887 12,948 12,767 12,385 12,754 12,830 12,918 13,130 13,261 12,897 13,003 13,172 12,913
Total Base Fee Revenue $315,989 $317,485 $313,047 $303,680 $312,728 $314,592 $316,749 $321,948 $325,160 $316,234 $318,834 $322,977 $3,799,423
Volume Charge $ / CCF
Usage up to avg WW $9.82 52,256 52,414 45,975 36,691 46,517 48,161 50,194 51,442 49,840 44,872 46,687 47,995 573,044
Total Volume Charge Revenue $513,154 $514,705 $451,475 $360,306 $456,797 $472,941 $492,905 $505,160 $489,429 $440,643 $458,466 $471,311 $5,627,292
Total Residential Revenue $829,143 $832,190 $764,521 $663,986 $769,525 $787,533 $809,654 $827,108 $814,589 $756,877 $777,300 $794,288 $9,426,715
Multi-Family
Base Fee $ / Acct.
3/4" or Less $24.52 619 622 622 611 618 618 620 627 630 619 622 629 621
1"40.95 230 232 228 226 228 230 230 232 228 224 228 229 229
1.5"81.65 130 130 129 129 128 130 129 130 129 129 130 127 129
2"130.70 104 103 104 104 104 104 104 103 104 103 104 105 104
3"245.21 3 3 3 3 3 3 3 3 3 3 3 3 3
4"408.76 10 10 10 10 10 10 10 10 10 10 10 10 10
6"817.28 6 6 6 6 6 6 6 6 6 6 6 6 6
8"1,307.70 4 4 4 4 4 4 4 4 4 4 4 4 4
10"1,880.02 0 0 0 0 0 0 0 0 0 0 0 0 0------------------------------------------------------------------------------------------------------------------------------------------------------------1,106 1,110 1,106 1,093 1,101 1,105 1,106 1,115 1,114 1,098 1,107 1,113 1,106
Total Base Fee Revenue $63,761 $63,786 $63,671 $63,320 $63,492 $63,737 $63,704 $63,909 $63,868 $63,303 $63,753 $63,851 $764,156
Volume Charge $ / CCF
Usage up to avg WW $9.82 28,565 28,171 25,056 20,717 26,015 26,738 26,786 26,797 25,678 22,457 24,082 25,465 306,527------------------------------------------------------------------------------------------------------------------------------------------------------------28,565 28,171 25,056 20,717 26,015 26,738 26,786 26,797 25,678 22,457 24,082 25,465 306,527
Total Volume Charge Revenue $280,508 $276,639 $246,050 $203,441 $255,467 $262,567 $263,039 $263,147 $252,158 $220,528 $236,485 $250,066 $3,010,095
Total Multi-Family Revenue $344,270 $340,425 $309,721 $266,761 $318,959 $326,304 $326,743 $327,055 $316,026 $283,831 $300,238 $313,918 $3,774,251
12 of 17 03/21/2025DRAFTPage 504 of 994
City of San Luis Obispo
Sewer Rate Study Page 2 of 3
Revenues at Present Rates
Exhibit 5
Effective 7.1.24 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Total
Non-Residential
Base Fee $ / Acct.
3/4" or Less $24.52 761 770 728 658 722 725 737 742 756 737 759 752 737
1"40.95 315 312 306 293 304 306 317 316 312 311 313 314 310
1.5"81.65 158 161 157 153 158 156 155 159 159 160 158 158 158
2"130.70 177 177 174 174 174 178 178 175 181 175 174 177 176
3"245.21 20 20 20 21 20 20 20 20 19 20 21 19 20
4"408.76 20 20 20 20 20 21 20 20 20 20 20 20 20
6"817.28 6 6 6 6 6 6 6 6 6 6 6 6 6
8"1,307.70 4 3 4 3 4 4 4 4 4 4 3 4 4
10"1,880.02 0 0 0 0 0 0 0 0 0 0 0 0 0---------------------------------------------------------------------------------------------------------------------------------------------------------------1,461 1,469 1,415 1,328 1,408 1,416 1,437 1,442 1,457 1,433 1,454 1,450 1,431
Total Base Fee Revenue $90,807 $89,843 $89,156 $85,518 $89,009 $89,932 $90,187 $90,203 $90,921 $89,957 $89,222 $90,301 $1,075,055
Volume Charge $ / CCF
All Consumption $10.27 45,840 44,019 34,139 23,061 32,132 36,263 39,504 41,487 46,445 43,999 46,140 40,678 473,707-------------------------------------------------------------------------------------------------------------------------------------------------------------45,840 44,019 34,139 23,061 32,132 36,263 39,504 41,487 46,445 43,999 46,140 40,678 473,707
Total Volume Charge Revenue $470,777 $452,075 $350,608 $236,836 $329,996 $372,421 $405,706 $426,071 $476,990 $451,870 $473,858 $417,763 $4,864,971
Total Non-Residential Revenue $561,584 $541,918 $439,764 $322,355 $419,004 $462,353 $495,893 $516,274 $567,911 $541,827 $563,080 $508,064 $5,940,026
13 of 17 03/21/2025DRAFTPage 505 of 994
City of San Luis Obispo
Sewer Rate Study Page 3 of 3
Revenues at Present Rates
Exhibit 5
Effective 7.1.24 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Total
Summary % of Total
Customers
Residential 12,887 12,948 12,767 12,385 12,754 12,830 12,918 13,130 13,261 12,897 13,003 13,172 12,913 83.6%
Multi-Family 1,106 1,110 1,106 1,093 1,101 1,105 1,106 1,115 1,114 1,098 1,107 1,113 1,106 7.2%
Non-Residential 1,461 1,469 1,415 1,328 1,408 1,416 1,437 1,442 1,457 1,433 1,454 1,450 1,431 9.3%------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of Customers 15,454 15,527 15,288 14,806 15,263 15,351 15,461 15,687 15,832 15,428 15,564 15,735 15,450
Consumption
Residential 52,256 52,414 45,975 36,691 46,517 48,161 50,194 51,442 49,840 44,872 46,687 47,995 573,044 42.3%
Multi-Family 28,565 28,171 25,056 20,717 26,015 26,738 26,786 26,797 25,678 22,457 24,082 25,465 306,527 22.7%
Non-Residential 45,840 44,019 34,139 23,061 32,132 36,263 39,504 41,487 46,445 43,999 46,140 40,678 473,707 35.0%
---------------------------------------------------------------------------------------------------------------------------------------------------------------Total Consumption 126,661 124,604 105,170 80,469 104,664 111,162 116,484 119,726 121,963 111,328 116,909 114,138 1,353,278
Revenues
Base Fee $470,558 $471,114 $465,874 $452,518 $465,228 $468,261 $470,640 $476,059 $479,949 $469,495 $471,809 $477,129 $5,638,634 29.5%
Residential 315,989 317,485 313,047 303,680 312,728 314,592 316,749 321,948 325,160 316,234 318,834 322,977 3,799,423 19.8%
Multi-Family 63,761 63,786 63,671 63,320 63,492 63,737 63,704 63,909 63,868 63,303 63,753 63,851 764,156 4.0%
Non-Residential 90,807 89,843 89,156 85,518 89,009 89,932 90,187 90,203 90,921 89,957 89,222 90,301 1,075,055 5.6%
Volume Charge 1,264,439 1,243,420 1,048,132 800,583 1,042,260 1,107,929 1,161,650 1,194,378 1,218,577 1,113,041 1,168,809 1,139,140 13,502,358 70.5%
Residential 513,154 514,705 451,475 360,306 456,797 472,941 492,905 505,160 489,429 440,643 458,466 471,311 5,627,292 29.4%
Multi-Family 280,508 276,639 246,050 203,441 255,467 262,567 263,039 263,147 252,158 220,528 236,485 250,066 3,010,095 15.7%
Non-Residential 470,777 452,075 350,608 236,836 329,996 372,421 405,706 426,071 476,990 451,870 473,858 417,763 4,864,971 25.4%----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Revenues $1,734,997 $1,714,533 $1,514,006 $1,253,101 $1,507,488 $1,576,190 $1,632,290 $1,670,438 $1,698,525 $1,582,535 $1,640,618 $1,616,270 $19,140,992
FY 2024-25 Budget $19,551,311
Difference ($410,319)
Percent -2.1%
FY 2023-24 Actual $18,613,459
Difference $527,533
Percent 2.8%
14 of 17 03/21/2025DRAFTPage 506 of 994
City of San Luis Obispo
Sewer Rate Study
Residential Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
Per Account $24.52 $26.11 $27.81
Consumption Charge
Usage up to avg WW $9.82 $10.46 $11.14
15 of 17 03/21/2025DRAFTPage 507 of 994
City of San Luis Obispo
Sewer Rate Study
Multi-Family Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
3/4" or Less $24.52 $26.11 $27.81
1"40.95 43.61 46.44
1.5"81.65 86.96 92.61
2"130.70 139.20 148.25
3"245.21 261.15 278.12
4"408.76 435.33 463.63
6"817.28 870.40 926.98
8"1,307.70 1,392.70 1,483.23
10"1,880.02 2,002.22 2,132.36
Consumption Charge
Usage up to avg WW $9.82 $10.46 $11.14
16 of 17 03/21/2025DRAFTPage 508 of 994
City of San Luis Obispo
Sewer Rate Study
Non-Residential Rates
Present
Rates FY 2025-26 FY 2026-27
Fixed Charge
3/4" or Less $24.52 $26.11 $27.81
1"40.95 43.61 46.44
1.5"81.65 86.96 92.61
2"130.70 139.20 148.25
3"245.21 261.15 278.12
4"408.76 435.33 463.63
6"817.28 870.40 926.98
8"1,307.70 1,392.70 1,483.23
10"1,880.02 2,002.22 2,132.36
Consumption Charge
All Consumption $10.27 $10.94 $11.65
17 of 17 03/21/2025DRAFTPage 509 of 994
Page 510 of 994
R ______
RESOLUTION NO. _____ (2025 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, ESTABLISHING THE SEWER SERVICE RATES
FOR FINANCIAL PLAN 2025-27
WHEREAS, it is the policy of the City of San Luis Obispo to review enterprise fund
rates on an ongoing basis and to adjust them as required to ensure that they remain
equitable and adequate to fully cover the cost of providing services; and
WHEREAS, a comprehensive sewer rate study was completed in March 2025 by
HDR Engineering, Inc. including analysis of Sewer Fund operating, capital, and debt
service needs for fiscal years 2025-26 and 2026-27; and
WHEREAS, on April 29, 2025, the City Council authorized the release of the City’s
Prop 218 notice outlining preliminary sewer rates based on updated revenue and
expenditure information necessary to meet system operating, capital, and debt service
requirements; and
WHEREAS, the City provided all required mailed notices in compliance with
Proposition 218 and the exhaustion of administrative remedies provisions of AB 2257;
and
WHEREAS, a public hearing was properly noticed and held on June 17, 2025; and
WHEREAS, a majority protest, as contemplated by Article XIII D of the California
Constitution, was not received by the conclusion of the public hearing.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Recitals. The City Council finds and determines that the recitals set
forth above as true and correct.
SECTION 2. Sewer Rates. The sewer rates as set forth in Exhibit A are hereby
adopted, establishing sewer rates effective July 1, 2025 , and July 1, 2026.
SECTION 3. California Environmental Quality Act. Modification of rates and
charges by public agencies is statutorily exempt from the California Environmental Quality
Act (CEQA) under Public Resources Code 21083 and 21080(b)(8) and State CEQA
Guidelines Section 15273 (Rates, Tolls, Fares, and Charges) because the change in
rates and charges is for the purpose of:
a) Meeting operating expenses;
b) Purchasing or leasing supplies, equipment, or materials;
c) Meeting financial reserve needs and requirements;
d) Obtaining funds for capital projects necessary to maintain se rvice within
existing service areas; and
Page 511 of 994
Resolution No. _____ (2025 Series) Page 2
R ______
e) Obtaining funds necessary to maintain such intra -city transfers as authorized
by City Charter.
The change in fees is not intended to fund expansion of capital projects not otherwise
evaluated under CEQA. Therefore, no environmental review is required for this item.
SECTION 4. Resolution Number 11428 (2023 Series) is hereby repealed and
superseded to the extent inconsistent herewith effective 11:59 p.m. June 30, 2025.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 25.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
Page 512 of 994
Resolution No. _____ (2025 Series) Page 3
R ______
EXHIBIT A: 2025-27 SEWER RATES
Usage
(Variable Per Unit Cost)
Proposed Rates
Effective July 1, 2025
Proposed Rates
Effective July 1, 2026
Single Family and Multi-
Family Residential Per Unit
Cost
(Up to Sewer Cap)
$10.46 $11.14
Non-Residential Per Unit
Cost
(For all Water Consumption)
$10.94 $11.65
Monthly Base Fees
(Fixed Cost)
Proposed Rates
Effective July 1, 2025
Proposed Rates
Effective July 1, 2026
Single Family Residential $26.11 $27.81
Multi-Family and Non-Residential by Water Meter Size
0.75-inch or less meter $26.11 $27.81
1-inch meter $43.61 $46.44
1.5-inch meter $86.96 $92.61
2-inch meter $139.20 $148.25
3-inch meter $261.15 $278.12
4-inch meter $435.33 $463.63
6-inch meter $870.40 $926.98
8-inch meter $1,392.70 $1,483.23
10-inch meter $2,002.22 $2,132.36
Page 513 of 994
Page 514 of 994
R ______
RESOLUTION NO. _____ (2025 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, TO AMEND THE CITY OF SAN LUIS OBISPO
LOW INCOME ASSISTANCE PROGRAM FOR CITY RESIDENTS
WHEREAS, the City Council identified the development of a program to assist low
income customers in affording City utilities as a primary goal for 1991 -93; and
WHEREAS, the City Council adopted a Low Income Assistance Program via
Resolution 8073 in 1992; and
WHEREAS, the program consists of a 15% rate reduction for customers receiving
Federal and State aid or who meet income requirements, a one -time assistance for
customers who are experiencing financial difficulty, and help with retrofit ting and
maintaining conservative water usage within their homes; and
WHEREAS, other utilities in the area now provide Low Income Rate Reduction
Assistance of 20%, charges have increased, and budgets have historically been
underutilized; and
WHEREAS, the City Council finds it appropriate to update the program name from
the “Low Income Assistance Program” to the “Customer Assistance Program” to better
reflect the purpose and eligibility of the program;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo that the Low Income Assistance Program formally be updated to be called the
Customer Assistance Program and be increased to provide a 20% water and sewer rate
reduction for customers who meet the eligibility requirements.
SECTION 1. Resolution Number 8073 (1992 Series) is hereby amended and
superseded to the extent inconsistent herewith.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 25.
___________________________
Mayor Erica A. Stewart
Page 515 of 994
Resolution No. _____ (2025 Series) Page 2
R ______
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
Page 516 of 994
Public Hearing for the 2025-27
Sewer Rates
Tuesday, June 17, 2025
Recommendations –Item 6b
1.Receive and file the City of San Luis Obispo Water and Wastewater
Rate Study Updated Report
2.Adopt a Resolution entitled “A Resolution of the City Council of the
City of San Luis Obispo, California, Establishing the Sewer Service
Rates for Financial Plan 2025-27”
3.Find the action statutorily exempt from the California Environmental
Quality Act (CEQA) under Public Resources Code 21083 and
21080(b)(8) and State CEQA Guidelines Section 15273 (Rates,
Tolls, Fares, and Charges).
Proposed Sewer Rate Adjustments
Sewer Rate
Increases (%)
Proposed Projected
FY 26 FY 27 FY 28 FY 29 FY 30 FY 31 FY 32 FY 33
Previous Rate
Study (2023)4.0 4.0 3.5 2.5 2.5 2.5 2.5 2.5
Current Rate
Study (2025)6.5 6.5 6.5 6.5 6.5 3.5 3.5 3.5
Difference 2.5 2.5 3.0 4.0 4.0 1.0 1.0 1.0
A comparison of proposed and projected sewer rate percentage increases from the 2023 Comprehensive
Rates Study and the 2025 updated Rate Study Analysis.
Proposed Sewer Rates
Volumetric Sewer Rates
Usage (per unit1 cost)
Current Proposed
Effective
July 1,
2024
Effective
July 1,
2025
Effective
July 1,
2026
Single-Family and Multi-Family
Residential Per Unit Cost
(Up to Sewer Cap)
$9.82 $10.46 $11.14
Non-Residential Per Unit Costs
(All Water Consumption)$10.27 $10.94 $11.65
1One unit of water = 100 cubic feet = 748 gallons
Monthly Sewer Base Fees
Base Fees
Current Proposed
Effective July
1, 2024
Effective July
1, 2025
Effective July
1, 2026
Single-Family Residential
Monthly Base Fee $24.52 $26.11 $27.81
Multi-Family and Non-Residential by Water Meter Size
≤ 0.75-inch meter $24.52 $26.11 $27.81
1-inch meter $40.95 $43.61 $46.44
1.5-inch meter $81.65 $86.96 $92.61
2-inch meter $130.70 $139.20 $148.25
3-inch meter $245.21 $261.15 $278.12
4-inch meter $408.76 $435.33 $463.63
6-inch meter $817.28 $870.40 $926.98
8-inch meter $1,307.70 $1,392.70 $1,483.23
10-inch meter $1,880.02 $2,002.22 $2,132.36
Key Drivers Behind the Adjustments
•Increased costs for:
•Regulatory compliance (e.g., WRRF
upgrade)
•Capital improvement projects
•Inflation and increased costs of doing
business
•Revenue loss from Cal Poly’s new
wastewater treatment facility
•Avoiding debt through “pay-as-you-go”
strategies
Grants & Alternative Funding Sources
Fund Grant Purpose Project Amount
Sewer SRF Loan Forgiveness WRRF Upgrade $4,000,000
Sewer Flood Protection WRRF Upgrade $2,077,103
Sewer Wastewater Discharge
Compliance
WRRF Upgrade $1,314,530
Sewer Inflation Reduction Act
rebates
Qualified biogass
property, clean
commercial vehicles
$5,435,542
(RECENTLY APPLIED)
Total $12,827,175
Sewer Rate Protest Count as of 3:00 pm on June 17, 2025
Total Protests Received 430
Protest Determined to be Not Valid 30
Protests Determined to be Duplicates 31
Total Valid Sewer Protests 369
Questions?
Public Hearing – Sewer Rates
Mayor Open the Public Hearing
Call for any written protests from the public
Receive public comments
Close the public hearing
City Clerk Confirm the number of written protests received
Confirm the total number of valid protests
Council may not adopt the proposed rates if 8,580 plus one
(50% +1) of the City’s 17,161 parcels protests submit a valid protest.
Council Adopt or deny the resolution entitled “A Resolution of the City Council of
the City of San Luis Obispo, California, Establishing the Sewer Service
Rates for Financial Plan 2025-27”
Recommendations – Item 6b
1.Receive and file the City of San Luis Obispo Water and
Wastewater Rate Study Updated Report
2.Adopt a Resolution entitled “A Resolution of the City Council of the
City of San Luis Obispo, California, Establishing the Sewer
Service Rates for Financial Plan 2025-27”
3.Find the action statutorily exempt from the California Environmental
Quality Act (CEQA) under Public Resources Code 21083 and
21080(b)(8) and State CEQA Guidelines Section 15273 (Rates,
Tolls, Fares, and Charges).
Major Upcoming Sewer Projects Over
the Next 2 Years
•Finishing of the City's Water Resource Recovery Facility (WRRF)
upgrade project
•Sewer main pipeline replacement on Islay Street between Nipomo and
Santa Rosa
•Sewer main pipeline replacement on Chorro Street between Boysen
and Rougeot
•A flow study and continuation of the City's Inflow/Infiltration reduction
program, which provides rebates to community members who replace
their private sewer laterals
•Maintenance and improvements at the City's lift station in the Laguna
Lake and Silver City neighborhoods
Typical Monthly Bill for a Single-Family Home
Current Rates
Effective 7/1/2024
Proposed Rates
Effective 7/1/2025
Proposed Rates
Effective 7/1/2026
Water Fixed Charge $30.25 $31.91 $33.67
Water Variable Charge $42.70 $45.05 $47.55
Utility User Tax
(5% of water portion of bill)
$3.65 $3.85 $4.06
Sewer Fixed Charge $24.52 $26.11 $27.81
Sewer Variable Charge $39.28 $41.84 $44.56
Total $140.40 $148.76 $157.65
For a single-family residence with a 3/4” meter and a sewer cap of 4 units using 5 units (3,740 gallons) of water
What does this mean? For about $0.04 per gallon, the City secures, treats, and delivers drinking water, then
collects, treats, and discharges wastewater in compliance with environmental standards, all while also providing
essential non-volumetric services like fire protection for the community.
Is this a 24% Increase?
Water Rates Sewer Rates Total Utility Bill
Current Rates $76.60 $63.80 $140.40
Proposed Rates
(Effective July 1, 2025)$80.81 $67.95 $148.76
Proposed Rates
(Effective July 1, 2026)$85.28 $72.37 $157.65
Example: A single-family residence with a 3/4” meter and a sewer cap of 4 units
using 5 units (3,740 gallons) of water
No. Although customers receive one bill, the rate increases are applied separately
to Water and Sewer, not added together.
11.3%13.4%= 12.3%
How do sewer rates compare?
Sewer
Fund
SOBCs
Debt Service - Sewer
Debt Service FY 26 FY 27 FY 28 FY 29 FY 30 FY 31
2009 CIEDB Loan $548,786 $547,535 $546,242 $544,908 $543,530 $542,108
2014 US Bank Lease
Installment Agreement $616,711 $616,477 $616,236 $615,987 ------
2018 Refunding Bond $30,156 $23,131 $23,021 $23,090 $23,116 $23,100
2019 SRF Loan - WRRF $5,902,954 $5,902,954 $5,902,954 $5,902,954 $5,902,954 $5,902,954
Total Debt Service $7,098,607 $7,090,097 $7,088,453 $7,086,939 $6,469,600 $6,468,162