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Home My WebLink About02.28.2022 Staff: Committee Members: Christian Clegg, City Manager Councilmember, Andrae Gonzales – Chair Brianna Carrier, Assistant to the City Manager Councilmember, Ken Weir Councilmember, Eric Arias SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Monday, February 28, 2022 12:00 p.m. City Hall North 1600 Truxtun Avenue, Bakersfield, CA 93301 First Floor, Conference Room A AGENDA 1. ROLL CALL 2. ADOPT DECEMBER 7, 2021, AGENDA SUMMARY REPORTS 3. PUBLIC STATEMENTS 4. NEW BUSINESS A. Committee Discussion and Recommendations Regarding FY 2022-23 CDBG, HOME, ESG Action Plan –Saldana/McKeegan B. Committee Discussion and Recommendations Regarding Wastewater Rate Study Results: Equity and Phased-in Rate Increase – Strakaluse C. Committee Discussion and Recommendations Regarding Solid Waste Rate Study and Phase I Rate Increase – Strakaluse D. Committee Discussion and Recommendation Regarding Adoption of the 2022 Committee Meeting Schedule – Carrier 5. COMMITTEE COMMENTS 6. ADJOURNMENT Staff: Committee Members: Christian Clegg, City Manager Councilmember, Andrae Gonzales – Chair Councilmember, Ken Weir Councilmember, Eric Arias SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE of the City Council - City of Bakersfield Tuesday, December 7, 2021 12:00 p.m. City Hall South 1501 Truxtun Avenue, Bakersfield, CA 93301 First Floor, Caucus Room AGENDA SUMMARY REPORT The meeting was called to order at 12:01 p.m. 1. ROLL CALL Committee members present: Councilmember Andrae Gonzales Councilmember Ken Weir Committee member absent: Councilmember Eric Arias Staff present: Christian Clegg, City Manager Anthony Valdez, Assistant to the City Manager Brianna Carrier, Assistant to the City Manager Crystal Rubio, Administrative Analyst III Juan Heredia, Administrative Analyst III Joshua Rudnick, Deputy City Attorney Randy McKeegan, Finance Director Additional Attendees: Members of the Public 2. ADOPT FEBRUARY 23, 2021 AGENDA SUMMARY REPORT The Reported was adopted as submitted. DRAFT AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, December 7, 2021, Agenda Page 2 3. PUBLIC STATEMENTS There were no public statements. 4. NEW BUSINESS A. Long Range Fiscal Model Project Update – Huot/McKeegan City Manager Clegg and Finance Director McKeegan provided an overview of the long-range fiscal model project and introduced Management Partners Special Advisor Bob Leland who provided a PowerPoint presentation on the Long-range Forecast and Fiscal Model planning tool to assist the city in forecasting major issues such as sales tax, fiscal capacity, recessions, and pensions. City Manager Clegg stated that the planning tool will be used to assess long-term impacts and provides the ability to strategically plan for the future. Finance Director McKeegan added that the planning tool will provide the capabilities to project market sensitivity changes in revenue performance and impacts associated with them 10 and 20 years into the future. Committee member Weir shared the trends and impacts he has witness in the past that impact the city’s outlook. He stated sales tax and pension costs see high revenue years that are then followed by very low revenue years. Mr. Leland responded that the fiscal structure tool uses the most recent figures of impacts to determine and review different scenarios. City Manager Clegg added that the planning tool provides Finance staff the capability to produce multiple projection scenarios with a single data set at one time. Committee Chair Gonzales inquired about the assumptions used to forecast the scenarios of sales tax revenue and Public Safety and Vital Services (PSVS). Mr. Leland referred to the 10-year forecast summary discussed during the presentation. Committee Chair Gonzales inquired about how the planning tool will be used to demonstrate the budgeting capacity of PSVS funding for staffing and projects. City Manager Clegg stated the forecast model tool will be referred to extensively during the mid-year and budgeting process. Committee Chair Gonzales thanked Mr. Leland of Management Partners and staff for the informative presentation. Committee member Weir made a motion to receive and file the report. The motion was approved with Committee member Arias absent. 5. COMMITTEE COMMENTS DRAFT AGENDA SUMMARY REPORT Budget and Finance Committee Meeting Tuesday, December 7, 2021, Agenda Page 2 There were no comments made. 6. ADJOURNMENT The meeting was adjourned at 1:08 p.m. DRAFT MEMORANDUM DATE: February 15, 2022 TO: Budget & Finance Committee FROM: Paul Saldaña, Economic and Community Development Director SUBJECT: Annual Action Plan process for FY 2022-23 HUD Applications (CDBG, ESG, HOME, HOPWA) Background: The United States Department of Housing and Urban Development (HUD) has designated the City of Bakersfield as an Entitlement City. Therefore, HUD provides annual funding to improve low-income neighborhoods throughout the City pursuant to the federal programs noted below. As is the case each year, HUD had not yet released the entitlement amount for FY 2022-23 as of the preparation of this Memo. However, there is an expectation that Congress will maintain previous year funding levels for all programs. The table below shows the anticipated HUD funds for all projects using last year’s entitlement as the current projection. Federal Program Previous FY21-22 Allocation Community Development Block Grant (CDBG) $3,968,097* Home Investment Partnership (HOME) $1,585,955* Emergency Solutions Grant (ESG) $329,429 Housing Opportunities for Persons with AIDS (HOPWA) $709,181 Total $6,592,662 *Includes an additional $8,000 in program income for CDBG and $80,000 for HOME Applications Received: Each year, the City issues a Notice of Funding Ability (NOFA) for the annual entitlement funds listed in the table above. The deadline for the submission of CDBG, HOME, and ESG applications for FY 2022- 23 funding was December 23, 2021. The requested projects are intended to improve the quality of life and infrastructure for low-income persons and neighborhoods in the City of Bakersfield. This year the City received 9 applications from non-profit and private entities totaling $738,117, and 14 applications from City Departments totaling $4,944,000. The total request for all grants, from both City and Non-City applicants, was $5,682,117, and the application details are listed in Attachment C. Recommendation: Pursuant to federal requirements, staff conducted a comprehensive review and evaluation of all applications for funding. Staff has prepared the attached Memorandum and recommended budget for consideration by the Budget and Finance Committee. Staff anticipates that the FY 2022-23 HUD Action Plan will be considered by the City Council on May 4, 2022. This is the third funding year of the Consolidated Plan 2020- 2025. Therefore, staff recommends that the Budget and Finance committee recommend that the City Council vote to fund allocations for the CDBG, HOME, ESG and HOPWA funds are listed in Attachments A and B. Attachments: A. FY 22/23 Recommended CDBG Budget B. FY 22/23 Recommended ESG/HOME/HOPWA Budget C. Overview of Applications Received (Reference) Description FY 22-23 Requested FY 22-23 Actual FY 21-22 Last Year Ward CDBG Entitlement 3,960,097 3,960,097 3,960,097 Program Income (Projected for FY 22-23) 8,000 8,000 8,000 Total Available Resources 3,968,097 3,968,097 3,968,097 ‐ Administration (not to exceed 20% or $792,019) 792,019 792,019 792,019 Section 108 Loan Payment on $4.1M 323,920 323,920 316,424 Section 108 Loan Payment on $800K 60,419 60,419 58,776 Total Admin and Debt Payment 1,176,358 1,176,358 1,167,219 Total Resources minus Admin and Debt Payments 2,791,739 2,791,739 2,800,878 Fair Housing Program Services 100,000 100,000 100,000 All Bakersfield Senior Center Support Services 90,000 90,000 90,000 1 New San Cai 81,670 All Total Public Service Projects 271,670 190,000 190,000 Home Access Rehabilitation 50,000 51,739 50,000 All Jewett Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv. 350,000 350,000 - 2 Ohio Drive Area Curb, Gutter, Sidewalk and ADA 350,000 350,000 - 1 Benton Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv. 350,000 350,000 398,167 7 Oleander Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv. 350,000 350,000 398,167 2 Madison Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv. 350,000 350,000 398,167 1 Alta Vista Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv. 350,000 - - 2 Union & East Truxtun Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv. 350,000 398,167 2 Wilson Road Pedestrian Improvments 239,000 - 1 Sunset Area Lighting Upgrade 730,000 - - 2 Union Brundage Phase 8 Area Curb, Gutter Sidewalk and ADA Imprv. 518,210 1 Saunders Park Sump Basin Wall Rehabilitation 400,000 400,000 2 Saunders Park Sports Pavillion Fence Improvements 400,000 400,000 2 Jefferson Park Aquatic Facility Fence Improvements 300,000 2 Beale Avenue Median Lanscape Rehabilitation 350,000 2 McMurtrey Aquatic Center Imprv. 150,000 2 Jefferson Park Imprv. 250,000 2 Bakersfield Senior Center Building Demolition 25,000 1 Mercy House BLNC Art and Murals 25,000 1 Total Public Facilities 4,919,000 2,601,739 2,610,878 Total Requests for Public Services + Projects 5,190,670 2,791,739 2,800,878 Total Available Resources Remaining (2,398,931) (0) (0) RECOMMENDED CDBG BUDGET FY 2022-23 RESOURCES ADMINISTRATION AND DEBT SERVICE PUBLIC SERVICES (MAX. 15% or $594,014) PUBLIC FACILITIES RECOMMENDED HOME BUDGET FY 2022-23 HOME Entitlement 1,505,955$ 1,505,955$ 1,505,955$ Program Income (Projected for FY 22/23) 80,000$ 80,000$ 80,000$ Previous Year Entitlement 1,809,720$ Total Available Resources 1,585,955$ 1,585,955$ 3,395,675$ Administration (not to exceed 10%) 150,596$ 150,596$ 150,596$ Total Resources minus Admin 1,435,360$ 1,435,360$ 3,245,080$ CHDO Set Aside (15%)225,893$ 225,893$ 225,893$ Acquisition/Construction/Rehabilitation/Downpayment -$ 1,209,466$ 119,186$ VCCDC Downpayment Assistance Program -$ 250,000$ Pacific Southwest Community Development Corp/Chelsea* -$ 1,000,000$ Cesar Chavez Foundation/HACK Renaissance at Baker Street -$ 1,650,000$ Total (All Requests) -$ 1,435,359$ 3,245,079$ Total Available Resources Remaining 1,435,360$ 0$ 0$ RECOMMENDED ESG BUDGET FY 2022-23 ESG Entitlement (Projected for FY 22/23) 329,429$ 329,429$ 329,429$ Administration (not to exceed 7.5%) 24,707$ 24,707$ 24,707$ Total Resources minus Admin 304,722$ 304,722$ 304,722$ Flood Ministries - Street Outreach* 25,056$ 25,000$ 24,477$ Bakersfield Homeless Center - Shelter* 180,000$ 70,000$ 70,000$ Bakersfield Homeless Center - Rapid Rehousing & Prevention* 121,891$ 107,222$ 108,245$ The Mission at Kern County - Shelter* 97,500$ 70,000$ 70,000$ Alliance Against Family Violence - Shelter 42,000$ 32,500$ 32,000$ Total (All Requests) 466,447$ 304,722$ 304,722$ Total Available Resources Remaining (161,725)$ (0)$ (0)$ RECOMMENDED HOPWA BUDGET FY 2022-23 HOPWA Entitlement (Projected for FY 22/23) 709,181$ 709,181$ 709,181$ Administration (not to exceed 3%) 21,275$ 21,275$ 21,275$ Total Resources minus Admin 687,906$ 687,906$ 687,906$ Kern County Public Health 687,906$ 687,906$ 687,906$ Total (All Requests) 687,906$ 687,906$ 687,906$ Total Available Resources Remaining (0)$ (0)$ (0)$ PROJECTS Description FY 22-23 Requested FY 22-23 Actual FY 21-22 Last Year RESOURCES ADMINISTRATION AND DEBT SERVICE Description FY 22-23 Requested FY 22-23 Actual FY 21-22 Last Year RESOURCES RESOURCES ADMINISTRATION AND DEBT SERVICE HOPWA SPONSOR/PROVIDER ADMINISTRATION PROJECTS Description FY 22-23 Requested FY 22-23 Actual FY 21-22 Last Year 12:00 p.m.3:30 pm Closed Session 5:15 p.m. Public Session Redistricting Hearing: 02/23 Budget Hearing: 06/01, Budget Adoption: 06/15 12:00 p.m. S M T W TH F S S M T W TH F S S M T W TH F S 31 1 1 2 3 4 5 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 27 28 29 30 31 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 7 1 2 3 4 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 1 2 3 3 4 5 6 7 8 9 7 8 9 10 11 12 13 4 5 6 7 8 9 10 10 11 12 13 14 15 16 14 15 16 17 18 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22 23 21 22 23 24 25 26 27 18 19 20 21 22 23 24 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 1 2 3 4 5 1 2 3 2 3 4 5 6 7 8 6 7 8 9 10 11 12 4 5 6 7 8 9 10 9 10 11 12 13 14 15 13 14 15 16 17 18 19 11 12 13 14 15 16 17 16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 30 31 League of California Cities Mayors and Council Members Executive Forum - 2022 Date Yet To Be Determined League of California Cities Annual Conference - September 7-9, 2022 OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE Budget & Finance Committee Calendar January 2022 Through December 2022 All meetings will be held at City Hall North, First Floor, Conference Room A DRAFT Budget & Finance Committee City Council Meetings Budget Departmental Workshop Holidays - City Hall Closed JULY AUGUST SEPTEMBER Last updated: 12/28/2021 12:47 PM Documents from meeting Budget & Finance Committee 2-28-2022 2022-23 HUD BUDGET & ACTION PLAN Budget and Finance Committee –February 28, 2022 ANTICIPATED RESOURCES 2022-23 Action Plan CDBG: $3,968,097 TOTAL HOME: TOTAL HOPWA: Admin: $792,019 (Section 108 $384,339) Projects: $2,791,739 HOME: $1,585,955 Admin: $150,595 Projects: $1,435,360 ESG: $329,429 Admin: $24,707 Projects: $304,722 HOPWA: $709,181 Admin: $21,275 Projects: $687,906 2020-2025 CONSOLIDATED PLAN GOALS •Increase and preserve affordable housing for low- and-moderate income households •Prevent and reduce homelessness. •Improve public infrastructure and facilities to promote safe and vibrant communities. •Foster community and economic development. •Enhance facilities and services for the non-homeless special needs population. 2022-23 ACTION PLAN Recommended CDBG Budget 1,750,000 800,000 190,000 51,739 Curb, Gutter, Sidewalk, ADA Park Improvements Public Services Home ADA Improvements CURB, GUTTER, SIDEWALK & ADA IMPROVEMENTS •Jewett Avenue Area: $350,000 (W2) •Ohio Drive Area: $350,000 (W1) •Benton Area: $350,000 (W7) •Oleander Area: $350,000 (W2) •Madison Area: $350,000 (W2) Jewett Project Area -$350,000 34th Street to 28th Street K Street to Q Street Ohio Drive Project Area -$350,000 Southeast end of Ohio Drive Ohio drive; Milham Drive and Tollhouse Drive Benton Project Area -$350,000 Ming Avenue to Planz Road South H Street to Hughes Lane Oleander Project Area -$350,000 H Street to A Street California Ave to Roosevelt Street Madison Project Area -$350,000 Madison St. to Cottonwood Rd. between Casa Loma Dr. and Brook St. Saunders Park -$400,000 Sump Basin Wall/Fence Rehabilitation Saunders Park -$400,000 Sports Pavilion Fence Improvements Home ADA Improvements -$51,739 •City-Run Program •Low-income •$3,500 Grants •Goal: 15 Households •$50,000 Public Services -$190,000 •Bakersfield Senior Center Support Services -$90,000 •GBLA Fair Housing: $100,000 2022-23 ACTION PLAN Recommended HOME Budget 225,893 1,209,467 CHDO Set-Aside New Construction 2022-23 ACTION PLAN Recommended ESG Budget Rapid Rehousing / Prevention Homeless Outreach Shelter Operations 172,500 25,000 107,222 2022-23 ACTION PLAN Recommended ESG Budget •Flood Outreach -$25,000 •BHC Shelter -$70,000 •Mission Shelter -$70,000 •AAFVSA Shelter -$32,500 •BHC RRH & Prevention: $107,222 ANTICIPATED TIMELINE 2022-23 Action Plan HOME •Budget & Finance Committee Meeting February 28, 2022 •Draft Action Plan Complete March 11, 2022 •Action Plan Public Notice Period April 1-May 4, 2022 •Community Meetings April 21,2022 •Public Hearing before City Council May 4, 2022 •Action Plan due to HUD May 15, 2022 QUESTIONS? Budget and Finance Committee –February 28, 2022 Budget and Finance Committee Meeting February 28, 2022 CITY OF BAKERSFIELD SEWER RATE STUDY PRESENTATION OUTLINE Introduction Rate-Making Objectives & Considerations Rate Study Process Revenue requirement Cost -of-service analysis Rate Design Next Steps RATE-MAKING OBJECTIVES & CONSIDERATIONS 1.Provide revenue sufficiency and financial stability to fund the projected capital and operations and maintenance (O&M) costs of the City’s enterprise 2.Meet the City’s wastewater reserve fund targets 3.Rate payer equity Each Customer class pays their proportionate share of expenses Each Customer, within each class, pays their proportionate share of expenses via consumption and service capacity 4.Customers understand and accept rates 5.Balance rate increases with future capital funding approach RATE BACKGROUND Residential customers pay a fixed annual charge Commercial customers pay an annual fixed charge plus a monthly sewer surcharge to account for actual flow that exceeds the assumed water use included in their respective fixed charge RECENT RATE AND CONNECTION FEE HISTORY Last rate increase to Single Family occurred July 1, 2016. Rates changed from $210 to $215. Connection fees for Single Family increased from $4,000 per connection to $5,000 per connection. This changed occurred over 5 years from 2017 through 2021. RATE STUDY PROCESS STEP 1: Revenue requirement projections Determines how much revenue is needed annually from rates STEP 2: Cost of service allocations Determines how much of the revenue should come from fixed and variable charges and from each customer class Allocations are proportionate to the cost of providing service STEP 3: Rate design Fixed service charge, sewer surcharge, Industrial User rates Balance rate-making objectives REVENUE REQUIREMENT PROJECTIONS KEY ASSUMPTIONS -CAPITAL Average annual capital need = $9 million Projected FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 Total 1 Sewer Repairs Var Loc $1,594,100 $600,000 $600,000 $600,000 $3,394,100 2 Centrifuge Rehab Plt3 $165,920 $80,000 $245,920 3 Repl 6 Sldge Recirc Pumps $412,097 $412,097 4 Rev Program Study Update $95,040 $95,040 5 Repl Vfd Influent Pumps $220,000 $60,000 $280,000 6 Rehab/Repl Unfluent Pumps $991,180 $120,000 $1,111,180 7 Primary Clarif 1-4 Rehab $1,328,000 $1,300,000 $2,628,000 8 Replace Flare $156,180 $156,180 9 Repl Primary Sludge Pumps $155,565 $155,565 10 Polymer Pump Replacement $123,296 $123,296 11 Aeration Basin Rehab $499,380 $499,380 12 Wwtp Misc Improvements $820,694 $600,000 $600,000 $600,000 $2,620,694 13 Sewer Lift & Strm Pump Sta $1,694,150 $1,000,000 $1,000,000 $1,000,000 $4,694,150 14 Sewer Lift Rehab-Bank St $1,228,000 $1,228,000 15 Swrlftrhb-Sandra/Meredith $1,166,000 $1,166,000 16 Swrlftrhb-Ming/Grnd Lakes $1,132,000 $1,132,000 17 Swrlftrhb-Eucalyptus $1,193,000 $1,193,000 18 Swrlftrhb-Taft Hwy/S H St $1,228,000 $1,228,000 19 Rehab Effluent Pump Stat $0 $500,000 $500,000 20 Demo Old Headworks Bldg $250,000 $250,000 21 Knudsen Drive Storm Drain $300,000 $300,000 22 Swrcln:Bv And Mccutchen $139,205 $139,205 KEY ASSUMPTIONS -CAPITAL Average annual capital need = $9 million Projected FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 Total 23 Storm Lift - Taslisman $415,730 $415,730 24 Wwtp Energy Upgrade $150,000 $150,000 25 Wwtp# 3 Arterial Roads $209,772 $209,772 26 Portalogic Syst. Upgrade $60,000 $60,000 27 Chem Dosing Syst Rehab $350,000 $350,000 28 Daf Rehab $500,000 $500,000 29 Hvac Units Repl $450,000 $450,000 30 Plc Upgrade $750,000 $750,000 31 Tertiary Expansion Wwtp 3 $100,000 $100,000 32 Return Act Sludge Pump $94,300 $94,300 33 Solids Train Upgrade $250,205 $250,205 34 Rehab Grit Clarrifiers $59,200 $59,200 35 Maint Bldg Repair And Remod $425,000 $425,000 36 Misc Storm Drain Improv $200,000 $200,000 37 Digester Engineer Study $208,000 $208,000 38 Digester Gas Reuse Altern $171,735 $171,735 39 Maintenance Mgmt Software $11,955 $11,955 40 Misc Projects $2,000,000 $2,200,000 $4,533,455 $6,733,455 $15,466,909 41 Total CIP - PAYGo $13,100,704 $8,869,000 $7,988,000 $6,733,455 $6,733,455 42 Inflationary Index 1.000 1.021 1.043 1.066 1.089 43 Total Inflated CIP - PAYGo $13,100,704 $9,059,186 $8,334,261 $7,175,984 $7,329,865 44 average annual $9,000,000 5-YEAR RATE INCREASE SUMMARY Projected year-end fund balances are greater than the Target Reserve Balance Maintain debt coverage ratio Fiscal Year:FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 Overall Revenue Increases 0.0%0.0%CPI CPI CPI Cumulative Increase 0.0%0.0%CPI CPI CPI Avg Annual PAYGo Capital Spending per Capital Improvement Plan $13,100,704 $9,059,186 $8,334,261 $7,175,984 $7,329,865 $9,000,000 Projected Connection Fee Revenue $7,600,000 $7,000,000 $6,500,000 $6,500,000 $6,500,000 Debt coverage ratio (1.25 minimum)1.79 1.74 1.65 1.63 1.61 COST-OF-SERVICE BY CUSTOMER CLASS –FY 2022-23 Overall revenue increase is not necessary for FY 2022-23 However, the cost-of-service study indicates a re-balancing between customer classes is warranted RATE DESIGN: ANNUAL FIXED SERVICE CHARGE (PER SFDE) Single family rates increase from $215.00 annual charge to $220.27 annual charge $5.27 increase to annual charge Equivalent to a $0.44 increase per month A combination of changes in single family water use patterns, strength characteristics, and costs contribute to the increase Flow: 250 gpd to 220 gpd BOD: 250 mg/L to 240 mg/L TSS: 250 mg/L to 280 mg/L Cost per SFDE Acct Flow BOD TSS Single Family 1 220 240 280 Characteristics gpd mg/l mg/l Annualize 1 107 161 188 hcf/yr lbs/yr lbs/yr Unit Costs $24.99 $1.43 $0.15 $0.09 Total Annual Cost per SFDE $24.99 $153.84 $24.34 $17.09 $220.27 RATE COMPARISON –SINGLE FAMILY RATE DESIGN: COMMERCIAL (CURRENT) Fixed charge on the Tax Roll varies by Customer Type (24+ different commercial Customer Types) Surcharge for water use which exceeds their respective minimum varies among 24+ Customer Types User Group Units SFDE/Unit Schools Average Daily Attendance 0.04 Hospital Bed 0.60 Churches Parcel 1.00 Rest Home Parcel 1.50 Small Store or Office Store or Office 1.00 Combination Store & Restaurant Parcel 1.75 Large Store Store 1.50 Big Box Store Store 1.50 Markets Store 1.50 Shopping Center w/ Dining Business 1.00 Office Bldg.Building 0.60 Mortuary Parcel 1.50 Food or Beverage Restaurant 1.50 Recreational Business 1.50 Medical Lab Business 1.50 Car Wash Business 1.50 Service Shop Business 1.50 Petroleum Business 1.50 Sales Business 1.50 Nurseries Business 1.00 Hotel-Motels, RV Parks Room or Space 0.300 Hotel-Motels, RV Parks - w/ rest.Room or Space 0.300 Mobile Home Park Dwelling Unit 0.75 Light & Heavy Industry Business 1.50 Timber & Produce Plant Business 1.50 Food Processing Business 1.50 Storage-Warehouse Business 1.50 OS - Commercial/Industrial Business 1.50 Laundromat Machine 0.60 User Group Surcharge Schools none Hospital $1.50 Churches $1.57 Nursing Home $1.60 Small Store $1.57 Combination Store & Residence $1.60 Large Store $1.57 Markets (Grocery Store)$2.62 Shopping Center w/ Dining (unit)$2.17 Office Bldg.$1.50 Mortuary $2.62 Food or Beverage $2.69 Recreational $1.68 Medical Lab $1.59 Car Wash $1.44 Service Shop $1.68 Petroleum $1.68 Sales $1.50 Nurseries $1.59 Hotel-Motels, RV Parks none Light & Heavy Industry $1.60 Timber & Produce Plant $1.60 Food Processing $1.60 Storage-Warehouse $1.68 OS - Commercial/Industrial $1.57 Big Box Store none Hotel-Motels, RV Parks (w/ restaurant)$2.20 Laundromat none RATE DESIGN: COMMERCIAL FIXED CHARGES (PROPOSED) Simplify rate structure Fixed charges the same regardless of Customer Type Differences in sewered water use among customers is captured in the commercial surcharge Current Proposed Customer Type SFDE/Unit SFDE/Unit Notes: Schools 0.05 1.00 current = per ADA; proposed = per school Hospital 0.60 1.00 current = per bed; proposed = per hospital Churches 1.00 1.00 Rest Home 1.50 1.00 Small Store or Office 1.00 1.00 Combination Store & Res 1.75 1.00 Large Store 1.50 1.00 Big Box Store 1.50 1.00 Markets 1.50 1.00 Shopping Center w/ Dining 1.00 1.00 Office Bldg.1.50 1.00 Mortuary 1.50 1.00 Food or Beverage (Restaurant)1.50 1.00 Recreational 1.50 1.00 Medical Lab 1.50 1.00 Car Wash 1.50 1.00 Service Shop 1.50 1.00 Petroleum 1.50 1.00 Sales 1.50 1.00 Nurseries 1.00 1.00 Hotel-Motels, RV Parks 0.30 1.00 current = per room/space; proposed = per business Hotel-Motels, RV Parks - w/ restaurant 0.30 1.00 current = per room/space; proposed = per business Light & Heavy Industry 1.50 1.00 Timber & Produce Plant 1.50 1.00 Food Processing 1.50 1.00 Storage-Warehouse 1.50 1.00 OS - Commercial/Industrial 1.50 1.00 Laundromat 1.50 1.00 RATE DESIGN: COMMERCIAL SEWER SURCHARGE (PROPOSED) Propose reducing commercial customer classes to four –low, medium, medium high, and high strength customers Include all commercial customer classes (i.e., schools, laundromats, big box stores, and hotels/motels without restaurants) These customer classes were not previously subject to the flow-based surcharge Sewer Connection Fees Single-Family Residential $5,000.00 per dwelling unit Commercial $227.00 per fixture unit Flow BOD TSS Industrial $1.18 $800.00 $254.00 per gpd per lb/day per lb/day PROPOSED CONNECTION FEES (CURRENT AND PROPOSED) RCN RCNLD City's Sewer System Assets Plant 2 & 3 Assets $890,215,891 $550,677,088 5-Year Future CIP $45,000,000 $45,000,000 Cash Reserves $35,800,000 $35,800,000 System Value $971,015,891 $631,477,088 Current EDUs 151,746 151,746 Connection Fee per EDU $6,398.93 $4,161.40 RCN RCNLD Connection Fee per EDU $6,398.93 $4,161.40 Fixture Units per EDU 25 25 Connection Fee per Fixture Unit $255.96 $166.46 Flow BOD TSS Total System Allocation 85.4%9.1%5.5% Total Value: $631,477,088 Total System Assets $539,462,109 $57,575,420 $34,439,560 Total Loadings 16,289,299 24,404,605 28,472,039 Unit Costs $33.12 $2.36 $1.21 Units HCF/yr lb/yr lb/yr Proposed Unit Cost Conn Fee $16.16 $861.11 $441.50 Units $/gpd $/lb/day $/lb/day Single Family - Proposed Commercial -Proposed Industrial – Proposed (assumes RCN) Changes in connection fees are not subject to Proposition 218 procedural requirements Periodic update of fees are good practice, in order to reflect increase value of system which benefits growth QUESTIONS/COMMENTS NEXT STEPS Update model / Recommended increase based on feedback March 16 Council Meeting Request authorization to mail Proposition 218 notices to ratepayers for change in sewer rates June –Rate adjustments presented to City Council Barring a successful protest (50% + 1), Council may adopt proposed rates included in the Proposition 218 notice July 1, 2022-Adopted rates enacted for FY 2022-23 Budget and Finance Committee Meeting February 28, 2022 CITY OF BAKERSFIELD SOLID WASTE RATE STUDY PRESENTATION OUTLINE Introduction Rate-Making Objectives & Considerations Rate Study Process Preliminary Results Q & A Next Steps RATE-MAKING OBJECTIVES & CONSIDERATIONS 1.Provide revenue sufficiency and financial stability to fund the projected capital and operations and maintenance (O&M) costs of the City’s solid waste enterprise 2.Maintain a reasonable reserve balance Cash-flow while waiting for tax roll revenue from the County Extraordinary costs Allows “smoothing-in” of necessary rate increases 3.Five -year planning period SERVICES PROVIDED Solid Waste Division is responsible for: Providing collection of solid waste, recyclable materials, and organic materials from residents and businesses Through City-operated routes or through contracted third parties (e.g., Kern Refuse) Operating the Mt. Vernon Green Waste Recycling, Materials Recycling Facility, and Composting Facility Street sweeping Operating the curbside bulky pickup program Operating the curbside motor oil recycling program RATES / SERVICES –RESIDENTIAL Single-Family Current Annual Charge = $234.00 Last rate adjustment = +5%, $11.00 per year (eff. July 1, 2021) Multi-Family Current Annual Charge = $210.54 per dwelling unit Last rate adjustment = +5%, $10.03 per year per unit (eff. July 1, 2021) Base Services included in annual charge: Weekly Solid Waste Collection Weekly Organics collection Every-Other-Week Recycling Collection Curbside pickup of two bulky items (e.g., Major appliance, mattress, sofa, water heater) per quarter (for single-family and multi-family customer with 4 dwelling units or less) Curbside pickup of motor oil and oil filter Processing material at Materials Recycling Facility RATES / SERVICES –COMMERCIAL Separate solid waste, recycling, and organics containers Charged separately for each container As of 1/1/2022, businesses must subscribe to all three containers (SB 1383) Solid waste container sizes ranging from small cart to 6 cubic yard bins Frequency of collection ranges from 1 to 6 times per week Last rate adjustment = +5% (eff. July 1, 2021) REVENUE REQUIREMENT (EXPENSES) ~$70 million revenue requirement (FY 2022-23) ~9% increase from FY 2021-22 ~2.7% annual increases (FY 2023-24 through FY 2026-27) ~$15 million in non-collection rate revenue (e.g., CalTrans/Kern Cog, County share of Mt. Vernon operations, BARC revenue) Need $55 million from rate revenue or use of reserves to cover costs Current revenue at Current rates = ~$49 million KEY ASSUMPTIONS Financial plan started with City’s Council-approved FY 2021-22 budget) Budget FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 1 General Inflation Budgeted 5.00%3.00%3.00%3.00%3.00% 2 Salary and Benefits Budgeted 3.00%3.00%3.00%3.00%3.00% 3 Operating Budget - Admin Budgeted 5.00%3.00%3.00%3.00%3.00% 4 Operating Budget - Street Cleaning Budgeted 5.00%3.00%3.00%3.00%3.00% 5 Operating Budget - Residential Budgeted 6.50%4.00%3.00%3.00%3.00% 6 Operating Budget - Commercial Budgeted 6.50%4.00%3.00%3.00%3.00% 7 Operating Budget - GreenWaste Budgeted 5.00%3.00%3.00%3.00%3.00% 8 Operating Budget - Landfill Budgeted 5.00%3.00%3.00%3.00%3.00% 9 Operating Budget - Curbside Budgeted 5.00%3.00%3.00%3.00%3.00% 10 Intergovernmental Budgeted 1.75%1.75%1.75%1.75%1.75% 11 Cal Trans and Kern Cog Payment Budgeted 0.00%0.00%0.00%0.00%0.00% 12 Other Revenue Budgeted -2.00%-2.00%-2.00%-2.00%-2.00% 13 Interest on Fund Balance 0.30%0.30%0.30%0.30%0.30%0.30% 14 New Programs Increase - Various Budgeted 3.00%3.00%3.00%3.00%3.00% 15 MRF Operating Costs Budgeted 3.00%3.00%3.00%3.00%3.00% 16 Workers Comp Premiums Budgeted 39.00%5.00%5.00%5.00%5.00% 17 Liability Premiums Budgeted 104.00%5.00%5.00%5.00%5.00% 18 Kern Refuse Compensation Budgeted 7.50%3.50%3.50%3.50%3.50% 19 Account Growth - Residential Budgeted 1,200 1,200 1,200 1,200 1,200 20 Commercial Org Self-haul Tip Fee $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 ProjectedApplied annual inflation/cost adjustment factors for five-year planning period (FY 2022-23 through FY 2026-27) New Positions One new Residential driver (in FY 2021-22 approved budget) Administrative Analyst (in FY 2021-22 approved budget) SB1383 Compliance Inspector (City Council Approval in March) Three new Commercial drivers (one in FY 2021-22 approved budget, one each added to FY 2023-24 and FY 2025-26) Inter-fund fleet charge increase for new route vehicles KEY ASSUMPTIONS –CAPITAL IMPROVEMENTS PROJECT CODE PROJECT NAME FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 1 NEW CIP SECURITY FENCING AND LIGHTING 125,000$ 125,000$ 125,000$ 2 NEW CIP TRANSFER STATION DESIGN ESTIMATE 100,000$ 3 NEW CIP EXTEND ELECTRICAL INFRASTRUCTURE 100,000$ 100,000$ 100,000$ 4 NEW CIP CONVEYOR SYSTEM DESIGN ESTIMATE 50,000$ 5 NEW CIP AUTOMATION, MOBILE STACKER 200,000$ 6 NEW CIP BALED MATERIAL COVERS 125,000$ 7 NEW CIP LINE UPGRADE 1,000,000$ 8 NEW CIP CONCRETE DOWN DRAINS 25,000$ 25,000$ 9 NEW CIP MISC DESIGN SERVICES 50,000$ 50,000$ 50,000$ 50,000$ 50,000$ 10 P0K237 TRANSFER STATION 60,000$ 11 P0K227 COMPOST SCREENING RESIDUE 100,000$ 12 P1K300 PAINT, CEILING, TILE, CARPET ADMIN BUILDING 30,000$ 13 P8K213 GREENWASTE PAVEMENT REPAIR 50,000$ 14 P9K200 COMPOST AUTOMATION PROJECT 250,000$ 250,000$ 250,000$ 1,780,000$ 910,000$ 525,000$ 175,000$ 50,000$ TOTALS 5-YEAR REVENUE RATE INCREASE SUMMARY –OPTION #1 Add to reserves each year to reach minimum and total targets as soon as reasonable Minimum Target = Operating Reserves = 3 mos. of Tax Roll revenue + 1.5 mos. of monthly bill revenue Target Reserve Target = Operating Reserves PLUS one-year average annual capital 1 Fiscal year FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 2 Eff. Date 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 3 Overall Rate Revenue Increase 13.0%6.0%2.5%2.0%2.5% 4 5 Single Family Rate (per year)$234.00 $264.42 $280.29 $287.29 $293.04 $300.36 6 Annual Increase $30.42 $15.87 $7.01 $5.75 $7.33 7 Monthly Increase $2.54 $1.32 $0.58 $0.48 $0.61 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 Rev Adj. +/-13.0%6.0%2.5%2.0%2.5% Re s e r v e s B a l a n c e ( M i l l i o n s ) Projected Year-End Unrestricted Cash Balance Total Balance with Rate Increases Total Balance w/o Rate Increases Minimum Reserve Target Total Reserve Target 5-YEAR REVENUE RATE INCREASE SUMMARY –OPTION #2 Use reserves to smooth-in rate increase Pros: Monthly increase never exceeds $2/month for Single- Family Customers Cons: Dipping further below operating reserve target, and for a longer period, may result in cash- flow issues during periods of high inflation or unexpected costs/emergencies 1 Fiscal year FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 2 Eff. Date 7/1/2022 7/1/2023 7/1/2024 7/1/2025 7/1/2026 3 Overall Rate Revenue Increase 9.0%9.0%4.0%3.0%2.5% 4 5 Single Family Rate (per year)$234.00 $255.06 $278.02 $289.14 $297.81 $305.26 6 Annual Increase $21.06 $22.96 $11.12 $8.67 $7.45 7 Monthly Increase $1.76 $1.91 $0.93 $0.72 $0.62 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 Rev Adj. +/-9.0%9.0%4.0%3.0%2.5% Re s e r v e s B a l a n c e ( M i l l i o n s ) Projected Year-End Unrestricted Cash Balance Total Balance with Rate Increases Total Balance w/o Rate Increases Minimum Reserve Target Total Reserve Target QUESTIONS/COMMENTS NEXT STEPS Update model / Recommended Increase based on feedback March 16 Council Meeting Request authorization to mail Proposition 218 notices to ratepayers June –Rate Adjustments Presented to City Council Barring a successful protest (50% + 1), Council may adopt maximum rates included in the Proposition 218 notice July 1, 2022-Adopted rates enacted for 2022 July 2022 –Begin Phase II to address SB 1383 and commercial rate re-structure 12:00 p.m.3:30 pm Closed Session 5:15 p.m. Public Session Redistricting Hearing: 02/23 Budget Hearing: 06/01, Budget Adoption: 06/15 12:00 p.m. S M T W TH F S S M T W TH F S S M T W TH F S 31 1 1 2 3 4 5 1 2 3 4 5 2 3 4 5 6 7 8 6 7 8 9 10 11 12 6 7 8 9 10 11 12 9 10 11 12 13 14 15 13 14 15 16 17 18 19 13 14 15 16 17 18 19 16 17 18 19 20 21 22 20 21 22 23 24 25 26 20 21 22 23 24 25 26 23 24 25 26 27 28 29 27 28 27 28 29 30 31 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 7 1 2 3 4 3 4 5 6 7 8 9 8 9 10 11 12 13 14 5 6 7 8 9 10 11 10 11 12 13 14 15 16 15 16 17 18 19 20 21 12 13 14 15 16 17 18 17 18 19 20 21 22 23 22 23 24 25 26 27 28 19 20 21 22 23 24 25 24 25 26 27 28 29 30 29 30 31 26 27 28 29 30 S M T W TH F S S M T W TH F S S M T W TH F S 1 2 1 2 3 4 5 6 1 2 3 3 4 5 6 7 8 9 7 8 9 10 11 12 13 4 5 6 7 8 9 10 10 11 12 13 14 15 16 14 15 16 17 18 19 20 11 12 13 14 15 16 17 17 18 19 20 21 22 23 21 22 23 24 25 26 27 18 19 20 21 22 23 24 24 25 26 27 28 29 30 28 29 30 31 25 26 27 28 29 30 31 S M T W TH F S S M T W TH F S S M T W TH F S 1 1 2 3 4 5 1 2 3 2 3 4 5 6 7 8 6 7 8 9 10 11 12 4 5 6 7 8 9 10 9 10 11 12 13 14 15 13 14 15 16 17 18 19 11 12 13 14 15 16 17 16 17 18 19 20 21 22 20 21 22 23 24 25 26 18 19 20 21 22 23 24 23 24 25 26 27 28 29 27 28 29 30 25 26 27 28 29 30 31 30 31 League of California Cities Mayors and Council Members Executive Forum - 2022 Date Yet To Be Determined League of California Cities Annual Conference - September 7-9, 2022 Budget Departmental Workshop Holidays - City Hall Closed JULY AUGUST SEPTEMBER Budget & Finance Committee Calendar January 2022 Through December 2022 All meetings will be held at City Hall North, First Floor, Conference Room A DRAFT Budget & Finance Committee City Council Meetings OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUNE Last updated: 2/24/2022 4:08 PM