HomeMy WebLinkAboutRES NO 094-14RESOLUTION NO. 094, 1 4
RESOLUTION ADOPTING THE WASTEWATER
REVENUE PROGRAM UPDATE AND CHANGE
IN METHODOLOGY OF SEWER SURCHARGE
CALCULATIONS AND RATES
WHEREAS, the City Council of the City of Bakersfield (City) is authorized
under state law to establish fees and charges for the use, operation, and
maintenance of the City's two wastewater treatment plants and storm sewer
service; and
WHEREAS, the Wastewater Revenue Program for the City of Bakersfield
Wastewater and Stormwater Facilities was developed in 1978 to establish sewer
user rates for residential, commercial, and industrial users to cover costs incurred
for the two wastewater treatment plants and storm sewer service; and
WHEREAS, the last Wastewater Revenue Program was approved by the
City Council on May 16,2001; and
WHEREAS, City staff prepared the attached Wastewater Revenue
Program Update (Exhibit "A ") in compliance with state requirements; and
WHEREAS, City staff has prepared the attached Wastewater Revenue
Program Update in compliance with state requirements; and
WHEREAS, the Wastewater Revenue Program Update included a
proposed change in methodology for surcharge calculations for those
commercial users subject to sewer surcharge. Exhibit "A ", page 18, illustrates the
proposed sewer surcharge calculation; and
WHEREAS, the Wastewater Revenue Program Update also established a
surcharge rate for hospitals and new user rate codes for "Shopping Center with
Restaurants or Market ", and "Hotel, Motel, RV Park with Restaurant;" and
WHEREAS, City staff prepared and mailed a notice of public hearing to
commercial users as required by Proposition 218 notifying them of the proposed
changes (Cal. Constitution Article XIIID, section 6); and
WHEREAS, the adoption of the proposed changes is exempt from CEQA
under California Public Resources Code Section 21080(b) (8); and
WHEREAS, Exhibit "B" summarizes both residential and commercial fees
proposed for Fiscal Year 2014/2015 including flat rate fees (collected on o��AK�9s
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ORIGINAL
property tax bill), commercial surcharge fees, and miscellaneous wastewater
fees.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Bakersfield
as follows:
1. The above recitals and findings are true and correct and are
incorporated herein by reference.
2. The Council finds that insufficient written protests were presented to
prevent the proposed changes.
3. The Council ratifies the Proposition 218 process followed by the City.
4. The Council finds adoption of the proposed changes is exempt from
C EQA.
5. The Council adopts the attached Wastewater Revenue Program
Update identified as Exhibit "A ".
6. The Council adopts fees established in Exhibit "B" including flat rate
fees, surcharge fees, and miscellaneous wastewater fees.
7. This Resolution is effective July 1, 2014.
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ORIGINAL_
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted,
by the Council of the City of Bakersfield at a regular meeting thereof held on
JUN 0 4 2014 by the following vote:
-�
YE ' COUNCILMEMBER RIVERA, MAXWELL, WEIR, SMITH, HAN ON, SULLIVAN,
OES' COUNCILMEMBER�Y�Sbe�.
ABSTAIN: COUNCILMEMBER 1V 00k
ABSENT: COUNCILMEMBER NCrfL.
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ROBERTA GAFFORD, C
CITY CLERK and Ex Officio Clerk of the
Council of the City of Bakersfield
APPROVED JUN 0 4 1014
�e
KEN WEIR
VICE -MAYOR
APPROVED as to form
VIRGINIA GENNARO
City Attorney
'-)'77"
DSHUA RUDNICK
eputy City Attorney II
Attached: Exhibit "A" - Revenue Program Update
Exhibit "B" -Schedule of Fees
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ORIGINAL
EXHIBIT A
CITY OF BAKERSFIELD
PUBLIC WORKS DEPARTMENT
WASTEWATER DIVISION
REVENUE PROGRAM UPDATE
Wastewater Treatment Plant No. 2
Wastewater Treatment Plant No. 3
Prepared by: Wastewater Staff
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PUBLIC WORKS DIRECTOR'S REPORT
The Public Works Director affirms that this Revenue Program Update complies with
Bakersfield Municipal Code Chapter 14.12 and State regulations.
NOW THEREFORE, I, NICK FIDLER, Acting Director of Public Works of the City of
Bakersfield, by virtue of the power vested in me and the order of the Council of said
City, hereby submit the City of Bakersfield Public Works Department Wastewater Division
Revenue Program Update as set forth in this document.
Dated:
NICK FIDLER
Acting Public Works Director
City of Bakersfield
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Contents
ChapterOne - Background ......................................................................... ............................... 4
Introduction................................................................................................ ............................... 4
Wastewater Rate Development .............................................................. ............................... 5
Prop218 ....................................................................................................... ............................... 6
Purposeof Report ...................................................................................... ............................... 6
Formatof Report ........................................................................................ ............................... 6
Chapter 2 - Cost of Service Analysis .......................................................... ............................... 7
Background................................................................................................ ............................... 7
Chapter 3 - Flat Rates for Residential and Commercial Users (Collected on Tax Roll) ...... 9
ResidentialFlat Rate .................................................................................. ............................... 9
CommercialFlat Rate ............................................................................. ............................... 10
Chapter 4 - Sewer Surcharge for Commercial Users (Excluding Industrial Users) ............. 10
Background.............................................................................................. ............................... 10
CurrentMethodology ............................................................................. ............................... 11
Recommendations for Changes to Surcharge Calculations ............ ............................... 11
ProposedMethodology ...................................................................... ............................... 11
Newrate codes .................................................................................... ............................... 12
Hospitals................................................................................................. ............................... 12
Chapter5 - Industrial Users ........................................................................ ............................... 13
Chapter 6 - Sub - regional Agreement / User Agencies ......................... ............................... 13
Plant2: ...................................................................................................................................... 13
Plant3: ...................................................................................................................................... 13
Chapter7 - Summary ................................................................................. ............................... 13
Chapter 8 - Future Research ...................................................................... ............................... 14
Hotels/ RV Parks without restaurants and Schools ........................... ............................... 14
Glossaryof Terms ......................................................................................... ............................... 15
Exhibits: ......................................................................................................................................... 16
1. Sewer User Fees and Charges ............................................................ ............................... 16
2. Current Sewer Surcharge Calculation .............................................. ............................... 17
3. Proposed Sewer Surcharge Calculation ........................................... ............................... 18
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Chapter One - Background
Introduction
The City of Bakersfield (City) has two wastewater treatment plants: Plant 2 and Plant 3
(Plant 1 was decommissioned in 1980) to serve our current population of 360,000
people. Together, Plant 2 and Plant 3 have a permitted capacity to process 57 million
gallons per day (MGD). In addition, over 1,000 miles of sewer lines are maintained to
collect the wastewater sent to the Plants. Sewer user fees are collected to fund
operations, debt service, reserve requirements, and capital improvements of the
wastewater treatment and collection system. These fees are established in
accordance with the City's revenue program.
The Revenue Program for the City of Bakersfield Wastewater and Stormwater Facilities
was developed in 1978 to establish sewer user rates for residential, commercial and
industrial users. Sewer user fees are required by state law to be periodically changed
and updated to ensure sewer fees do not exceed a user's proportionate share to treat
wastewater at the City's two plants. The last Wastewater Revenue Program was
approved by the City Council on May 16, 2001, and by the State Water Resources
Control Board on July 9, 2001. As the study was prepared over 13 years ago, staff
proposes an update to the current Revenue Program to ensure continued compliance
with state requirements. Additionally, the Revenue Program must also be updated to
include the $230 million Plant 3 Expansion, which was completed in June 2010.
As part of the review process, staff utilized a Revenue Rate Model (Model) developed
by Raftelis Financial Consultants to perform the analysis required for the Revenue
Program Update (Update). This Model forecasts revenue requirements to fund costs
and reserve requirements associated with operation of the two plants. The Model is a
management- forecasting tool, which is used to analyze residential and commercial
wastewater rates against multiple factors including revenue requirements, plant
characteristics, and characteristics of wastewater from customers.
The Update includes detailed information on sewer user fees. Sewer user fees include a
flat rate that is billed to all residential and commercial customers. Flat rates are
collected on the property tax roll. Commercial customers are also assessed surcharge
fees when actual water flow exceeds their flat rate base. Sewer user fees are based on
three unique characteristics. The three characteristics are:
• Water Flow - wastewater treated at the Plants
• Biological Oxygen Demand (BOD) - measures strength of wastewater
• Total Suspended Solids (TSS)- represents amount of particulate matter in
wastewater
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The Update also includes detailed information on wastewater characteristics assigned
to specific user groups. For instance, wastewater characteristics for a single family home
are different from a hotel with a restaurant. Each user group's unique wastewater
characteristics are incorporated into the Model.
As part of this Update, staff proposes four changes:
1. Simplify surcharge calculation - The current methodology of calculating
surcharges is complex and difficult to explain to users. This Update includes
recommendations to simplify the current surcharge rate structure and offers
users the ability to calculate and monitor their surcharges via an on -line
calculator available on the City's webpage.
2. Adjust wastewater characteristics assigned to single - family residences - With
the prevalent use of low -flow devices, water flow for single - family homes has
decreased while the strength of the effluent has increased. This subject is
explained in Chapter 3. It is important to note that staff recommends a five -year
implementation period for revised wastewater characteristics for single - family
residences to mitigate the impact on users.
3. Assign surcharge rate to hospitals - Currently, hospitals are assigned a flat rate
based on number of beds. Staff analysis found that water flow for this user
group varied significantly. Therefore, to ensure this user group pays their
proportionate share of fees, staff proposes to calculate fees for this group based
on water consumption. This will make all hospitals subject to surcharge fees.
4. Establish new rate codes for surcharge fees (Hotels, Motels, Recreational Vehicle
(RV) Parks with Restaurants and Shopping Centers with Restaurants) - The
proposed change to the surcharge calculation will require the addition of two
new rate codes for these user groups to ensure all users pay their proportionate
share of costs.
Wastewater Rate Development
Governmental agencies use enterprise funds to account for business type activities.
Business type activities include services primarily funded through user charges. The City
of Bakersfield uses the Wastewater Enterprise fund to report the activities of the
Wastewater Division.
The City's approach to rate development remains fiscally conservative to minimize rate
increases to residential and commercial customers to the fullest extent possible. The
rate structure, however, must recover the following:
• Operating and maintenance (O&M) costs;
• Bond payments;
• Short -term and long -term capital project costs;
• Rate stabilization reserve ($2 million reserve was established through the
budgetary process in keeping with the City Council's goal of fiscal conservatism);
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• Net revenue to debt service ratio (Bond covenant requires ratio to be higher
than 1.25);
• Wastewater Capital Reserve Fund (Sub - regional Agreement for Plant 2 with
outside agencies requires a reserve of $4.2 million); and,
• Bond reserve requirements are established to ensure that sufficient cash is on
hand within the fund to service bond payments.
Prop 218
Sewer user fees are subject to Proposition 218 (Prop 218). California Voters approved
Prop 218 in 1996, which added Article 13C and 13D to the State of California's
Constitution. The intent of Prop 218 is to limit methods which local governments collect
revenue from taxpayers without their consent.
Prop 218 requires mailing of hearing notices for proposed fee increases (including
changes in fee methodology) to the record owner of property 45 days prior to the
hearing date (California Cons. Art. XIIID, Section 6).
For Fiscal Year 2014/15, Prop 218 notices were not required for residential users since no
rate increase is proposed for these users. However, Prop 218 notices were mailed to
approximately 4,200 commercial customers since staff is proposing a change in the
methodology of calculating surcharges. Chapter 4 includes detailed information
regarding the proposed change in methodology for surcharges.
Purpose of Report
This Update meets State requirements that sewer user fees not exceed a user's
proportionate share to collect and treat wastewater at the City's two plants. The
Revenue Program will be periodically updated to reflect current revenue requirements
and wastewater characteristics. Additionally, the Update also includes a proposal to
simplify the current methodology of calculating surcharges for commercial users.
Format of Report
The Revenue Program Update is divided into the following Chapters:
• Chapter 2, Cost of Service Analysis - The goal of the cost of service analysis is to
ensure rates for residential and commercial users are proportionate and
sufficient to meet revenue requirements for the City's two plants.
• Chapter 3, Flat Rates for Residential and Commercial Users - This Chapter
provides background on the flat rate component of sewer user fees for all sewer
users. Flat rates are collected on the property tax bill.
• Chapter 4, Surcharge for Commercial Customers (excluding Industrial Users) - As
previously noted, sewer user fees include a flat rate that is billed to all residential
and commercial customers. Commercial customers are also charged surcharge
fees when actual water flow exceeds their flat rate base. Of the approximate
4,200 commercial customers, about 1,700 annually exceed their baseline flow 0A
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and are subject to surcharges. Although surcharge rates do go up when
necessary, changes in annual water use is the predominant reason surcharge
fees vary from year to year. Because current surcharge calculations are so
complex, surcharge fees are difficult to explain to users. The Update proposes a
simplified methodology to calculate the surcharge fee that is more user - friendly.
• Chapter 5, Industrial Users - Bakersfield Municipal Code Section 14.12.240
requires certain industrial users to be permitted. Industrial users discharge
wastewater from an industrial process that is regulated by the City.
Recommendations in this Update do not impact Industrial Users.
• Chapter 6, Sub - regional Agreement / User Agencies - This Chapter offers
information on agreements with other agencies to treat wastewater at the City's
two wastewater treatment plants. The Model incorporates users from outside
agencies into the comprehensive analysis.
• Chapter 7, Summary - In this Section, staff summarizes the highlights of proposed
updates and changes to City's current rate structure for sewer user fees for both
residential and commercial users.
• Chapter 8, Future Research - Hotels, Motels, RV parks without restaurants, and
schools fall into this category. These users are not impacted by
recommendations in this Update.
• Glossary of Terms - The Glossary provides an explanation of acronyms and
terminology common in the wastewater industry.
• Exhibits:
a. Sewer User Fees and Charges - Proposed Fee Schedule for Fiscal Year
2014/2015.
b. Current Methodology for Surcharge Calculations
c. Proposed Methodology for Surcharge Calculations
Chapter 2 - Cost of Service Analysis
Background
The cost of service analysis is used to calculate sewer user rates for residential and
commercial customers to ensure rates are fair, equitable, and sufficient to fund the
revenue requirements of the City's wastewater treatment facilities. The Model was
developed and used for the cost of service analysis. The Model calculates rates in the
following manner (impact to user groups will be presented later in this report):
1. Identification of revenue requirements:
a. O&M costs for the following cost centers: Plant 2, Plant 3, Wastewater
Revenue Section, Pretreatment Section, Storm Drain Maintenance and
Sanitary Sewer Maintenance.
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b. Capital improvement projects: The Model sets up a reserve fund for
capital projects. When the reserve falls below a minimum threshold, the
shortfall is included in the applicable year's revenue requirements.
c. Annual debt service costs.
d. Offsetting revenue derived from various sources lowers revenue
requirement needs (includes revenue collected from sewer connection
fees) .
e. Reserve requirements / sufficient fund balance.
f. Required debt coverage must be at least 1.25 of net revenue.
The total of the above steps yields the net revenue requirement - the amount
that must be collected through user fees.
2. Identification of users / billable units:
a. All user types were identified along with their unique wastewater
characteristics. This step includes permitted industrial users.
3. Perform mass balance: The mass balancing process provides the total billable
units for wastewater flow (CCF /yr.), BOD (Ibs. /yr.), and TSS (Ibs. /yr).
4. Allocation of costs:
a. Costs to treat are distributed amongst flow, BOD, and TSS.
i. O &M costs for storm drain and sanitary sewer maintenance are
allocated 100% to flow.
ii. O &M costs for Plant 2, Plant 3, Revenue and Pretreatment are
allocated based upon the total capital allocation percentages
(Capital allocation based upon the historical costs of plant
equipment including expansion and upgrade costs for specific
treatment processes broken down for each component to flow,
BOD and TSS):
1. 67.68% to flow
2. 20.26% to BOD
3. 12.06% to TSS
iii. Debt Service costs - allocated based upon capital allocation
percentages.
5. Calculation of per unit costs:
a. Annual costs for flow, BOD, and TSS (as computed in step 3) were divided
by total billable units for flow, BOD, and TSS to yield a per unit cost for
each.
6. Calculation of commercial user costs (this excludes flat rate calculation for
commercial businesses):
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a. Water consumption is used to determine the flow for each user type.
Each user type is assigned a wastewater strength to calculate the BOD
and TSS that is contributed by each user type. The unit rates calculated in
step 5 are then multiplied by the flow, BOD, and TSS for each user type to
find the total revenue required to treat that type of wastewater. Finally,
the total revenue is divided by the flow for each user type, to consolidate
the three rates (flow, BOD, TSS) into one rate based entirely on flow (in
CCF). These unit rates are used to assess whether commercial surcharge
is applicable.
Chapter 3 - Flat Rates for Residential and Commercial Users (Collected
on Tax Roll)
The objective of the current rate structure is to equitably allocate costs of the City's
sewer and stormwater collection system to residential, commercial, and industrial users
discharging wastewater into the system. Homes, businesses and institutions contribute
different quantities and strengths of waste to the wastewater collection and treatment
system. Costs are allocated to each user group in proportion to the user groups'
wastewater flow and strength.
Sewer user fees include a flat rate component for all users. In addition, some
commercial customers are assessed surcharges, which are billed monthly. The flat rate
fee is the subject of this Chapter. The surcharge fee will be discussed in Chapter 4.
Residential Flat Rate
Each residential parcel pays a fixed annual fee as a special assessment on their
property tax bill. This flat rate fee recovers residential users' proportionate share of
treating their waste. The flat rate for Fiscal Year 14/15 will remain at $205 for each single -
family unit. Each year, the Model will be updated to reflect current revenue
requirements and wastewater characteristics. Therefore, adjustments to the residential
flat rate will be necessary in the future to ensure sufficient revenues are collected for
operation of the City's two treatment plants and sewer collection systems. All rate
adjustments are subject to noticing requirements as mandated by Prop 218.
The current average residential discharge characteristics adopted as part of the 2001
Revenue Program are 300 gallons per day flow, 225 mg /L BOD and 180 mg /L TSS. Based
upon staff's mass balancing analysis, these residential characteristics should be
adjusted to reflect lower flow because of the prevalence of low -flow devices. However,
the strength (measured as BOD and TSS) of the influent has increased because the
influent is less diluted. Based upon staff's mass balancing analysis, residential
wastewater characteristics should be adjusted to 250 gallons per day flow, 250 mg /L
BOD and 250 mg /L TSS.
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Staff recommends the following five -year implementation period for single - family
characteristics to minimize spikes to users:
Commercial Flat Rate
Commercial customers are also subject to a flat rate special assessment on their
property tax bill. Commercial flat rates are expressed as a single - family dwelling
equivalent (SFDE). The minimum flat rate assessed to each commercial parcel is equal
to the single family rate.
Exhibit 1 summarizes the SFDE for each residential and commercial user type. Staff is
proposing only two changes to the current flat rate schedule. Based upon staff's
analysis, two new rate codes ( "Hotel, Motel, RV Park with Restaurant" and "Shopping
Center with Restaurant or Market ") are required to ensure each user group is assessed
their proportionate share of treating influent. These two user groups were charged a flat
rate in the past. However, their strength is notably different than existing user groups.
Chapter 4 - Sewer Surcharge for Commercial Users (Excluding Industrial
Users)
Background
Similar to residential users, commercial users pay a fixed amount collected on the
property tax roll. This fixed amount allocates a specific quantity of wastewater that
commercial users can discharge on a yearly basis. However, if a commercial user
exceeds this quantity, they are assessed a surcharge. Surcharge allows commercial
users to pay their proportionate share of costs to treat wastewater discharged into the
City's wastewater system.
Commercial users are categorized based on the strength of their wastewater
discharged. For example, a restaurant would discharge a higher strength waste than
an office building because restaurants discharge additional food wastes into the sewer.
Higher strength waste incurs more costs to treat; therefore, users who discharge high
strength waste pay more per unit of wastewater discharged.
Flow GPD
BOD mg/L
TSS mg /L
Current
300
225
180
FY 14/15
290
230
194
FY 15/16
280
235
208
FY 16/17
270
240
222
FY 17/18
260
245
236
FY 18/19
250
250
250
Commercial Flat Rate
Commercial customers are also subject to a flat rate special assessment on their
property tax bill. Commercial flat rates are expressed as a single - family dwelling
equivalent (SFDE). The minimum flat rate assessed to each commercial parcel is equal
to the single family rate.
Exhibit 1 summarizes the SFDE for each residential and commercial user type. Staff is
proposing only two changes to the current flat rate schedule. Based upon staff's
analysis, two new rate codes ( "Hotel, Motel, RV Park with Restaurant" and "Shopping
Center with Restaurant or Market ") are required to ensure each user group is assessed
their proportionate share of treating influent. These two user groups were charged a flat
rate in the past. However, their strength is notably different than existing user groups.
Chapter 4 - Sewer Surcharge for Commercial Users (Excluding Industrial
Users)
Background
Similar to residential users, commercial users pay a fixed amount collected on the
property tax roll. This fixed amount allocates a specific quantity of wastewater that
commercial users can discharge on a yearly basis. However, if a commercial user
exceeds this quantity, they are assessed a surcharge. Surcharge allows commercial
users to pay their proportionate share of costs to treat wastewater discharged into the
City's wastewater system.
Commercial users are categorized based on the strength of their wastewater
discharged. For example, a restaurant would discharge a higher strength waste than
an office building because restaurants discharge additional food wastes into the sewer.
Higher strength waste incurs more costs to treat; therefore, users who discharge high
strength waste pay more per unit of wastewater discharged.
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The current surcharge calculation involves several complex conversions and is not easy
for property owners to understand and estimate.
Current Methodology
Sewer surcharge fees are calculated annually using prior year water consumption. The
strength of wastewater for commercial users is measured by BOD and TSS.
Currently, there are separate rates for flow, BOD, and TSS. Flow is expressed in million
gallons (MG), BOD and TSS are expressed in thousand pounds (klbs). Each rate code
has a distinct BOD and TSS strength assigned based on the wastewater characteristics
of that user type. Specific wastewater characteristics for each rate code were
adopted in the 2001 Revenue Program.
The current methodology of calculating surcharge involves taking the flow, BOD, and
TSS that exceeds the flat rate allowances and multiplying those quantities by three
different rates. An example of the current surcharge calculation for a market is found in
Exhibit 2. The calculation can be confusing for commercial users to understand their
fees due to the number of calculations involved. The fee calculation involves several
unit conversions for three different wastewater characteristics. Flow converts from
hundred cubic feet (CCF) to MG. BOD and TSS convert from milligrams per liter (mg /L)
to klbs. Most commercial users are not familiar with these types of conversions and
wastewater math. Once a commercial user's surcharge fee is calculated, they are
then billed on a monthly basis.
Recommendations for Changes to Surcharge Calculations
Proposed Methodology
Proposed methodology simplifies sewer charge calculation and allows property owners
to estimate total sewer charges based on water consumption shown on their water bills.
The Model utilizes a cost of service analysis to take the three rates (flow, BOD, and TSS)
for each type of commercial user, and consolidates costs into a single rate that is
based entirely on flow. The proposed method will have a single rate for each type of
commercial user, and only involve the units of water (hundred cubic feet) that are
shown on the users' water bills. This makes the surcharge fee calculation easier to
understand. Exhibit 3 has an example of a proposed surcharge calculation. The steps
for using the proposed methodology are as follows:
• Calculate the previous year water consumption for each user by taking the
lesser of the annual water consumption or the winter months' water consumption
annualized (December, January, and February water consumption multiplied by
four).
• For users without a separate irrigation meter, water consumption (CCF) is
multiplied by a factor to reduce flow subject to surcharge. This reduction is
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necessary to account for water usage that does not discharge into the sewer,
such as irrigation or evaporation.
• Multiply the reduced water consumption by the surcharge fee per CCF in Exhibit
1.
• Subtract amount paid on special assessment (paid on property tax) to calculate
surcharge.
• Sewer surcharge is zero if amount paid on special assessment exceeds total
sewer charge.
• Divide sewer surcharge by twelve to get the amount of surcharge billed monthly.
New rate codes
Sewer surcharge for shopping centers with restaurants or markets and hotels, motels, RV
parks with restaurants are currently calculated using restaurant strength characteristics.
Wastewater strength for a restaurant has a BOD concentration of 1000 mg /L and a TSS
concentration of 600 mg /L. Sampling data of hotels with restaurants and shopping
centers with restaurants or markets indicates that wastewater strength for these users is
lower than a restaurant. Staff recommends creating new rate codes for these user
groups. The new rate codes are required in order to adopt the simplified surcharge
methodology.
Recommended new rate codes and strengths:
• Shopping centers with restaurants or markets BOD of 600 mg /L and TSS of 400 mg /L.
• Hotels, motels, RV parks with restaurants BOD of 500 mg /L and TSS of 600 mg /L.
Hospitals
Hospitals are currently billed 0.60 SFDE per bed on the property tax roll. Sewer fees
assessed to hospitals assumes water consumption for this user group is 180 gallons per
day per bed. Analysis of 2012 water consumption data from Bakersfield's seven
hospitals found actual water consumption ranged from 80 gallons per bed per day to
900 gallons per day per bed. Because hospitals have significant variances in water
usage, staff proposes hospitals continue to be charged a flat rate component.
However, when a hospital's flow exceeds flat rate base allowances, the hospital will be
assessed surcharges.
Staff recommends billing sewer charges to hospitals based on water consumption. This
recommendation is consistent with Prop 218 requirements, which requires all users to
pay their proportionate share of costs. With this proposal, all hospitals will be subject to
surcharge in addition to flat rate charges they are currently assessed.
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Chapter 5 - Industrial Users
Permitted industrial users pay a special assessment on the fax roll and are subject to
sewer fees based on actual measured volume and strength. The Model does make
reference to the wastewater of industrial users, but only for the purpose of performing a
mass balance calculation that is used in the cost of service analysis. No changes are
proposed for calculating sewer fees for this user group as this group currently pays their
proportionate cost to treat.
Chapter 6 - Sub - regional Agreement / User Agencies
The City maintains agreements with other agencies to treat wastewater at the City's
wastewater treatment plants.
Plant 2:
Wastewater from East Niles and Kern Sanitation District is treated at Wastewater
Treatment Plant No. 2. These user agencies fall under the Sub - regional Agreement.
Operating expenses for Plant 2 are shared proportionately by percentage of users
based on SFDE for each agency. Expenses for capital improvement projects are
shared proportionately based on capacity purchased by the User Agencies. No
changes are proposed for calculating sewer fees for the users in these districts.
Plant 3:
County Service Area 71 (CSA -71) falls under a separate agreement and flow goes to
Plant 3. In the CSA -71 area, City of Bakersfield staff bills CSA -71 the same SFDE flat rates
it bills users in the City of Bakersfield sewer service area.
Commercial users in the CSA -71 service are subject to surcharge using the same
methodology as commercial users within the City limits. Because of this, users in CSA -71
will be impacted by proposed changes for calculating surcharge fees.
Chapter 7 - Summary
This Revenue Program Update was developed in conformance with Revenue Program
Guidelines from the "Policy for Implementing the State Revolving Fund for Construction
of Wastewater Treatment Facilities" issued by the California Environmental Protection
Agency, State Water Resources Control Board. This Update also complies with Prop 218
mandates.
This Update proposes the following policy changes:
• Simplified surcharge calculations - Prop 218 notices were sent to commercial
customers notifying them of the proposed change in methodology for
calculation of surcharge fees. Of the approximate 4,200 commercial customers,
about 1,700 annually exceed their baseline flow and are subject to surcharge
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fees. Although surcharge rates do go up when necessary, changes in annual
water flow is the predominant reason surcharges vary from year to year.
Because current surcharge calculations are so complex, it is difficult to explain
this to users. Staff proposes a simplified methodology that is more user - friendly to
calculate the surcharge fee. The simplified methodology will be made available
to users via an on -line calculator available on the City's website. This on -line
calculator allows users to monitor their surcharges.
• Update of single - family wastewater characteristics - Based, upon staff's mass
balancing analysis, single - family wastewater characteristics should be updated
to reflect the actual strength of domestic influent treated at the City's two plants.
Staff proposes to phase -in domestic wastewater characteristics over a five -year
period until the goal of 250 gallons per day flow, 250 mg /L BOD, and 250 mg /L
TSS is reached. First year of phase -in period is proposed to commence in FY
2014/15. This change will not affect current single - family rates for FY 2014/15.
• Establish surcharge rate for hospitals - Hospitals will be included in surcharge
calculations because of variances in water consumption.
• Establish new user rate groups ( "Hotel, Motel, RV Park with Restaurant" and
"Shopping Center with Restaurant or Market ") - Based upon the strength of these
two users wastewater characteristics, these users should be reassigned to new
categories indicative of the strength of their discharge.
This Update meets State requirements that sewer fees not exceed a user's
proportionate share of costs to transport and treat effluent at the City's two wastewater
treatment plants. The Revenue Program will be updated to reflect current revenue
requirements and wastewater characteristics.
Chapter 8 - Future Research
Hotels/ RV Parks without restaurants and Schools
A review of assumed wastewater characteristics and methodology of assessing sewer
fees to "Hotels, Motel, RV Parks without restaurants" and "Schools" were not included in
this analysis. In the near future, staff will review actual water consumption data and
assumed wastewater characteristics for these user groups. Any proposed changes to
these user groups will be brought before council for future consideration.
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ORIGINAL.
Glossary of Terms
BOD: Biochemical oxygen demand measures strength of effluent
CCF: Hundred Cubic Feet (1 CCF = 748 gallons)
Industrial user: Any user who discharges non - domestic wastewater to any of the city's
sewerage systems or any other system tributary thereto (BMC 14.12.030).
klbs: One thousand pounds
mg /L: Milligrams per liter
O&K Operation and maintenance
SFDE: Single- family dwelling equivalent
TSS: Total suspended solids measures amount of particulate matter
Wastewater: "The water - carried wastes of the community derived from human or
industrial sources including domestic wastewater and industrial wastewater; rainwater,
groundwater or drainage of uncontaminated water is not wastewater" (BMC Section
14.12.030). Treatment processes for wastewater flow are impacted by both particulate
matter (referred to as total suspended solids, hereinafter referred to as TSS) and organic
matter (biochemical oxygen demand, hereinafter referred to as BOD). Wastewater
characteristics refer to the amount of BOD and TSS content of the flow treated at both
Plants. For the majority of cases, the City uses the BOD and TSS characteristics as
outlined in the State of California Revenue Program Guidelines dated March 1998.
There are exceptions to this rule as will be noted in this report.
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2. Current Sewer Surcharge Calculation
Public Works Department
Wastewater Division
SEWER SURCHARGE CALCULATION
Billing Period: July 2013- June 2014 Acct. #:
Business Name: Grocery Store Location
1 ESTIMATED WASTEWATER FLOW:
Wastewater flow is determined by analyzing water consumption records.
We estimate that 90 % d the water consumed is discharged to the sewer.
Water consumption records: January through December 2013 in the unit of hundred cubic feet (CCF)
1,000 CCF /yr X 748 gal /CCF = 748,000 gal = 0.748 MG (million gallons)/yr
stimated wastewater flow of 90% 0.748 MG x 90% = 0.673 MGyr
This account has additional adjustments of 0.0 SFDE* allowence(s), due to sewer special assesment billing on tax bill.
0.673 MG - 0 x 0.1095 MG/yr = 0.673 MG
Flew for 1 SFDE (Single Family Dwelling Equivano is 300 galMey, which equals to 0.1095 MGiyr).
2 Per Revenue Program Guidelines by the State Water Resource Control Board, your facility is In the fellowing rate code: Market
The wastewater strength characteristics and unit charges for this rate code are as follows:
FLOW (Wastewater Volume) =
Wastewater Characteristics
Unit Charge
$1,502.49 /MG
0.673 MG/yr.
BOD (Biochemical Oxygen Demand) =
800 mg/L
$104.91 /1000 lbs.
TSS (Total Suspended Solids) =
800 mg/L
$115.03 /1000 lbs
3 Flat Rate (FR) allowance: 1_5 SFDE
Flow = 0.1643
MG
0.1095 MG/SFDE
BOD = 308
lbs
206 lbs/SFDE
TSS = 247
lbs Q
164 Ibs/SFDE
4 Calculation of your sewer surcharge for the excess:
July 2013- June 2014
Service Period
FLOW ( 0.673200 MG
0.1643 MG
) x
$1,502.49 /MG = $764.69
BOD ( 0.673200 MGM 800
mg/L x 8.345Ibs /gal -
308 ) x
$104.91 /1000 lbs $439.14
TSS ( 0.673200 MG ) 800
mg/L x 8.345 lbs/gal -
247 ) x
$115.03 /1000 lbs = $488.60
SEWER SURCHARGE (Sum of BOD, TSS and Flow) for 12 -month period = $1,692.43
Special assessment paid on property tax 307.50
TOTAL SEWER CHARGES for 12 -month period 51,988.83
CURRENT METHOD
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ORIGINAL
3. Proposed Sewer Surcharge Calculation
Public works Department
Wastewater Division
SEWER FEE CALCULATION
Billing Period: July 2014- June 2015 Acct. #:
Business Name: Grocery Store Location
1 ESTIMATED WASTEWATER FLOW.
Wastewater flow is determined by analyzing water consumption records.
We estimate that 90 % of the water consumed is discharged to the sewer.
Water consumption records: January through December 2013 , in the unit of hundred cubic feet (CCF)
Water consumption: 1,000 CCF
Estimated wastewater flow. 1,000 x 90% 900 CCF
2 Per Revenue Program Guidelines by the State Water Resource Control Board, your facility is in the following rate code: Market
The unit charge for this rate code is: $2.26 / CCF
3 Sewer charge calculation is as follows:
H2O Flow Rate Total Sewer Charge
900 CCF X $2.26 /CCF = $2,034.00
TOTAL SEWER CHARGES for 12 -month period $2
Less special assessment paid on property tax $307.50
Sewer surcharge for 12 -month period $1,726.50
PROPOSED METHOD
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ORIGINAL
SEWER USER FEES AND CHARGES
RATE SCHEDULE
FISCAL YEAR 2014 -2015
EXHIBIT B pl
User Group
SFDE
Flat Rate Charge
Surcharge Fee
per CCF
Single Family Residence
1
$205.00 /unit
n/a
Hotel, Motel, RV Park *
0.30
$61.50 / room ors ace
n/a
Mobile Home, Mobile Home Park
0.75
$153.75 / unit
n/a
Multiple Dwelling
0.75
$153.75 / unit
n/a
Schools, Day Care Center
0.04
$8.20 / ADA
n/a
Car Wash
1.5
$307.50
$1.19
Church
1
$205.00
$1.30
Combination Store & Office
1.75
$358.75
$1.32
Food or Beverage Restaurant
1.5
$307.50
$2.30
Food Processing
1.5
$307.50
$1.32
Hospital
0.60
$123.00 / bed
$1.24
Hotel, Motel, RV Park With restaurant
0.30
$61.50 / room ors ace
$1.88
Large Store
1.5
$307.50
$1.30
Light & Heavy Industry
1.5
$307.50
$1.32
Market (Grocery Store
1.5
$307.50
$2.26
Medical Lab, Ambulance
1.5
$307.50
$1.31
Mortuary, etc.
1.5
$307.50
$2.26
Nurseries
1
$205.00
$1.32
Nursing Home, Retirement Home, etc.
1.5
$307.50
$1.32
Office & Financial Building
1.5
$307.50
$1.24
Petroleum
1.5
$307.50
$1.41
Recreational
1.5
$307.50
$1.40
Sales, Industrial Sales
1.5
$307.50
$1.24
Service Shop
1.5
$307.50
$1.41
Shopping Center with Restaurant or Market
1
$205.00 / unit
$1.84
Small Store or Small Office
1
$205.00
$1.30
Storage-Warehouse
1.5
$307.50
$1.41
Timber & Produce Plant
1.5
$307.50
$1.32
* No restaurant or restaurant on separate water meter
Note 1: Sewer fees for commercial users consist of 1) a flat rate component, collected on the property
tax bill by the Kern County Tax Assessor, and 2) sewer surcharge, which recovers costs that exceed the
amount of water consumption allowed for in the flat rate. The minimum sewer charge for all properties is
equal to the single family residence rate.
Note 2: Sewer fees for commercial and industrial users are estimated using lower of 1) winter months
annualized water consumption (Sum of January, February and December multiplied by four) or 2) actual
water consumption from prior calendar year. o� bPAFq
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ORIGINAL
SEWER USER FEES AND CHARGES
MISCELLANEOUS SCHEDULE
FISCAL YEAR 2014 -2015
EXHIBIT B p2
I. Sewer fee -Commercial and Industrial Other
Flow $1,502.49 / million gallons
BOD $104.91 /1,000 pounds
TSS $115.03 /1,000 pounds
Total sewer fees for commercial and industrial users that do not fall into strength categories identified
on Exhibit A p 1 will be calculated using unit rates above. Permitted industrial users are subject to sewer
fees based on actual measured volume and strength.
II. Additional fee for Outside Users
1. Single family dwelling $94.78 /yr /connection
2. Multiple dwelling $63.05 /yr /unit
3. Commercial and industrial facilities $94.78 /yr /business
4. Hotels /motels $15.80 /yr /room
All outside users pay the some annual user fee as City residents. In addition, an additional fee is
assessed to cover capacity charge for reserving a portion of City's trunk line and sewage treatment
facilities and a capital charge for recovering subsequent City capital costs.
III. Pretreatment Section Fees
1. Industrial waste monitoring - Permit application fee $75.00
2. Industrial waste monitoring - Permit fee $964.00 Annual
3. Industrial waste monitoring - Noncompliance re- inspections $964.00 As needed
4. Outside laboratory testing fees Actual costs
5. Notice of violation (NOV) basic fee $69.00
6. Cost recovery See below
Users may be charged cost recovery fees when discharges are monitored for compliance to regulatory
requirements. Costs may include, but are not limited to outside commercial laboratory fees, city staff
hourly rates and fringe benefit costs, equipment costs, reimbursement for damages, administrative
costs, overhead costs and other costs incurred by the City.
IV. Connection Fee - Maior Industrial Discharger
Flow $1.18 /gallons per day
BOD $800.00 /pounds per day
TSS $254.00 /pounds per day
Unit Rates: Based on maximum month loadings.
V. Septic / Grease Discharges
1. Permit application fee $30.00
2. Septage discharge permit fee - initial $153.00
3. Septage discharge permit fee - annual $75.00
4 Card replacement fee $10.00
5 Disposal rate $0.034 / gallon
6 Additional surcharge for discharge originating outside city limit! $0.034 / gallon
Definitions:
BOD - Biochemical oxygen demand
CCF - Hundred cubic feet
1 CCF - 1 hundred cubic feet is equal to 748 gallons
SFDE - Single family dwelling equivalent
TSS - Total suspended solids
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ORIGINAL.