HomeMy Public PortalAboutCC Agenda Workshop 05.30.2023
CITY COUNCIL SPECIAL MEETING WORKSHOP
AGENDA
Tuesday, May 30, 2023
5:00 p.m.
550 E. Sixth Street, Beaumont, CA
Materials related to an item on this agenda submitted to the City Council after distribution of the
agenda packets are available for public inspection in the City Clerk’s office at 550 E. 6th Street during
normal business hours.
MEETING PARTICIPATION NOTICE
This meeting will will be recorded for live streaming as well as open to public attendance. Please use
the following link during the meeting for live stream access: beaumontca.gov/livestream
Public comments will be accepted using the following options.
1. Written comments will be accepted via email and will be read aloud during the corresponding item
of the meeting. Public comments shall not exceed three (3) minutes unless otherwise authorized by
City Council. Comments can be submitted anytime prior to the meeting as well as during the meeting
up until the end of the corresponding item. Please submit your comments to:
nicolew@beaumontca.gov with "Public Comment" in the subject line.
2. Phone-in comments will be accepted by joining a conference line prior to the corresponding item of
the meeting. Public comments shall not exceed three (3) minutes unless otherwise authorized by City
Council. Please use the following phone number to join the call (951) 922 - 4845.
3. In-person comments are accepted by notifying the City Clerk using a provided Request to Speak
Form prior to the start of the Public Comment Period. Public comments shall not exceed three (3)
minutes unless otherwise authorized by City Council.
In compliance with the American Disabilities Act, if you require special assistance to participate in this
meeting, please contact the City Clerk's office using the above email or call (951) 572 - 3196.
Notification 48 hours prior to a meeting will ensure the best reasonable accommodation
arrangements.
Pages
WORKSHOP SESSION
A.CALL TO ORDER
Mayor Martinez, Mayor Pro Tem Fenn, Council Member Lara, Council Member
Voigt, Council Member White
Report out from Closed Session
Action on any Closed Session Items
Action of any Requests for Excused Absence
Pledge of Allegiance
Invocation
Adjustments to the Agenda
Conflict of Interest Disclosure
B.PUBLIC COMMENT PERIOD
Any one person may address the City Council on any matter on this agenda. If
you wish to speak, please fill out a “Public Comment Form” provided at the back
table and give it to the City Clerk. There is a three (3) minute time limit on public
comments. There will be no sharing or passing of time to another person. State
Law prohibits the City Council from discussing or taking actions brought up by
your comments.
C.ACTION ITEMS
Approval of all Ordinances and Resolutions to be read by title only.
C.1 Continued Discussion of Sewer Rate Study 3
Continue the discussion on the Sewer Rate Study and provide direction
on scenarios.
Recommended Action:
Review scenarios presented by Raftelis and provide direction to City
staff.
D.ADJOURNMENT
The next regular meeting of the Beaumont City Council, Beaumont Financing
Authority, the Beaumont Successor Agency (formerly RDA), the Beaumont
Utility Authority, the Beaumont Parking Authority and the Beaumont Public
Improvement Agency is scheduled for June 6, 2023, at 6:00 p.m. unless
otherwise posted.
Page 2 of 26
Staff Report
TO: City Council
FROM: Jennifer Ustation, Finance Director
Thaxton Van Belle, General Manager of Utilities
DATE May 30, 2023
SUBJECT: Continued Discussion of Sewer Rate Study
Description Continue the discussion on the Sewer Rate Study and provide direction on
scenarios.
Background and Analysis:
On December 6, 2022, City Council approved a contract with Raftelis Financial
Consultants, Inc. dba Raftelis, to complete a sewer rate study th at will independently
evaluate and make recommendations related to the City’s existing wastewater rates and
fee schedule. The final goals of the project include the development of the following:
Fair and reasonable wastewater rates and fees for a five-year (5) period.
Ten-Year (10) Financial Plan to provide necessary revenue for the City’s CIP
needs.
Updating financing and rate schedule models.
Raftelis completed the financial planning, cost-of-service analysis, and preliminary
proposed FY2024 rates and presented them to the City Council on April 10, 2023. The
City Council provided direction to bring back information on the following:
Provide scenarios that include the General Fund charging the full amount of
administrative overhead as identified in the Cost Allocation Plan approved in
June 2022.
List of capital improvement projects used within the study.
Any debt scenarios to list the potential projects the debt would fund.
Determine what was driving the potential rate increases being proposed, i.e.,
growth vs operations.
Raftelis has completed two financial plans. Scenario 1 ramps up the administrative
overhead charge with the full amount charge by FY2028. Scenario 2 has the full
Page 3 of 26
administrative overhead charged in FY2025. Neither scenario requires the use of debt
to fund projects as was originally proposed due to the reduction of a duplicated project
in the capital improvement plan schedule.
Both models provide different rate increases determined by the revenue requirements to
meet both operational and capital costs.
Fiscal Impact:
The estimated cost to prepare this report is $106.
Recommended Action:
Review scenarios presented by Raftelis and provide direction to City staff .
Attachments:
A. Raftelis Presentation
B. Capital Improvement Schedule
Page 4 of 26
City of
Beaumont
Sewer Rate Study
City Council Meeting
May 30, 2023
Page 5 of 26
Agenda
2
Project Scope
Proposition 218
Financial Planning
Rates and Bills
Rate Survey
Page 6 of 26
Project Scope
3 Page 7 of 26
Review of Project Scope
•10-Year Financial Plan
•Cost-of-Service Analysis
•Five-Year Rate Projection
•Adjacent Agency Benchmarking
•Microsoft Excel Model
•Rate Study Report
4 Page 8 of 26
Proposition 218
5 Page 9 of 26
Review of Proposition 218
•Revenues Cannot Exceed Costs
•Revenues Must Be Used for Utility Service
•Fees Must Be Proportional to the Cost to Provide Service
•Service Must Be Available
6 Page 10 of 26
Financial Planning
7 Page 11 of 26
Previous Presentation at the
Council Workshop on April 10, 2023
8
•Financial planning scenario presented with $7 million debt
financing
•In today’s presentation, the financial planning scenarios
presented do not reflect the use of any debt financing.
Page 12 of 26
Changes Since the April 10th Workshop
9
Item FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total
Capital Improvement Expenditures
Revised CIP Expenditures $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356 $20,834,647
Original CIP Expenditures $5,560,000 $7,014,462 $6,796,913 $3,095,820 $2,952,495 $4,257,498 $29,677,187
CIP Expenditure Reduction ($400,000)$735,000 ($4,410,000)($1,146,600)($944,798)($2,676,141)($8,842,540)
Capacity Fees
Revised Capacity Fees $3,783,021 $2,586,380 $2,026,956 $1,905,618 $1,149,502 $1,917,477 $13,368,954
Original Capacity Fees $2,665,372 $1,770,236 $1,392,178 $1,905,618 $1,149,502 $1,917,477 $10,800,383
Increase in Capacity Fees $1,117,649 $816,144 $634,778 $0 $0 $0 $2,568,571
Summary of Changes:$8,842,540 Less CIP Expenditures
$2,568,571 More Capacity Fee Receipts
$11,411,111 Total Positive Improvements
Page 13 of 26
Revised Financial Planning Scenarios
Scenario 1:
Ramp-Up to $1.499 million annual administrative overhead
No debt financing
Scenario 2:
$1.499 million annual administrative overhead beginning in FY 2025
No debt financing
10 Page 14 of 26
Scenario 1: Ramp-Up to Full Admin OH
11
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rate Revenue Adjustment 0.0%5.0%4.0%3.0%3.0%2.0%
External Debt Financing $0 $0 $0 $0 $0 $0
Administrative Overhead $650,000 $650,000 $862,250 $1,074,500 $1,286,750 $1,499,000
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Reserve Ending Balance
Operating Reserve Ending Balance Operating Reserve Target Balance
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Cash Reserves Ending Balance
Combined Reserve Ending Balance Combined Reserve Target Balance
Page 15 of 26
Scenario 2: $1.499 Million Admin OH in FY 2025
12
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rate Revenue Adjustment 0.0%6.0%5.0%3.0%2.0%2.0%
External Debt Financing $0 $0 $0 $0 $0 $0
Administrative Overhead $650,000 $650,000 $1,499,000 $1,499,000 $1,499,000 $1,499,000
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Reserve Ending Balance
Operating Reserve Ending Balance Operating Reserve Target Balance
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Combined Cash Reserves Ending Balance
Combined Reserve Ending Balance Combined Reserve Target Balance
Page 16 of 26
CIP Financing Summary: Scenarios 1 and 2
13
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rates Debt Capacity Fees Grants
Page 17 of 26
Key Drivers of Required Rate Increases
•Planned CIP Expenditures: Inflation Adjusted Total of $20.9 million*
•Continued Funding of the Repair and Replacement Reserve Fund
$2 million annual rate-funded contribution
Dollars used throughout the planning horizon for repair and replacement CIP projects
•Inflation
14
Category FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
General 5.0%5.0%4.0%3.0%2.0%
Personnel 2.5%2.5%2.5%2.5%2.5%
Administrative 5.0%3.0%3.0%3.0%2.0%
Operating 5.0%3.0%3.0%3.0%2.0%
Utilities 5.0%5.0%5.0%5.0%5.0%
Construction Costs 5.0%5.0%4.0%3.0%3.0%
FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total
Total CIP $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356 $20,834,647
* Detail of CIP provided in the Council agenda packet
Page 18 of 26
Proposed
FY 2024 Rates
15 Page 19 of 26
FY 2024
Rates
Under
Each
Scenario
16
Line Fixed Charges ($/Month)Current Rates Scenario 1 Scenario 2
1 Single Family $47.21 $49.83 $50.22
2 Multi-Family & Mobile Home-Rural $29.24 $28.32 $28.55
3
4 Schools $1.07 $1.09 $1.10
5
6 Commercial - Low $25.77 $6.11 $6.14
7 Commercial - Medium $47.21 $6.11 $6.14
8 Commercial - High $151.07 $6.11 $6.14
9
10 Dura Plastics Products $0.00 $553.08 $553.02
11 Perricone Juice $0.00 $553.08 $553.02
12 Rudolph Food Company $169.27 $553.08 $553.02
13 CJ Foods #1 $0.00 $553.08 $553.02
14 CJ Foods #2 $0.00 $553.08 $553.02
15 Precision Stamping $148.24 $553.08 $553.02
16
17 Variable Charges ($/HCF)Current Rates Scenario 1 Scenario 2
18 Single Family N/A N/A N/A
19 Multi-Family & Mobile Home-Rural N/A N/A N/A
20
21 Schools N/A N/A N/A
22
23 Commercial - Low $2.77 $4.87 $4.91
24 Commercial - Medium $3.75 $5.86 $5.91
25 Commercial - High $7.31 $9.80 $9.88
26
27 Dura Plastics Products $3.84 $5.08 $5.13
28 Perricone Juice $2.94 $10.78 $10.87
29 Rudolph Food Company $0.00 $0.00 $0.00
30 CJ Foods #1 $11.07 $13.26 $13.37
31 CJ Foods #2 $5.71 $8.13 $8.20
32 Precision Stamping $0.00 $4.87 $4.91Page 20 of 26
FY 2024 Monthly Bill Impacts
17
Customer Class Current Bill Scenario 1 Scenario 2 Scenario 1 Scenario 2
Single Family Residential $47.21 $49.83 $50.22 $2.62 $3.01
Multi-Family & Mobile Home-Rural $29.24 $28.32 $28.55 ($0.92)($0.69)
Schools (Per Student)$1.07 $1.09 $1.10 $0.02 $0.03
Commercial Low $136.57 $201.01 $202.63 $64.44 $66.06
Commercial - Medium $197.21 $240.45 $242.42 $43.24 $45.21
Commercial - High $443.47 $398.19 $401.54 ($45.28)($41.93)
Dura Plastics Products $358.33 $1,027.11 $1,030.94 $668.77 $672.60
Perricone Juice (Note 1)$13,852.50 $46,585.34 $46,976.68 $32,732.84 $33,124.18
Rudolph Food Company $169.27 $553.08 $553.02 $383.81 $383.75
CJ Foods #1 $47,608.33 $57,593.52 $58,081.93 $9,985.19 $10,473.59
CJ Foods #2 $2,891.67 $4,668.00 $4,702.77 $1,776.33 $1,811.10
Precision Stamping $148.24 $675.74 $676.68 $527.50 $528.44
Note 1: Perricone Juice currently has a temporary agreement with the City to implement an onsite treatment program.
Without this agreement, the company's monthly bill would be $43,667.
Monthly Bill Monthly Charnge in Bill
Page 21 of 26
Single Family Residential Bill Comparison
(with Long-Term Debt at FYE 2022)
18
$31.22
$40.07 $40.26
$45.35 $46.09 $47.21 $49.83 $50.23
$62.19
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Page 22 of 26
Next Steps
19
•Today’s Meeting:
Council selects its preferred financial planning scenario
•Next Council Meeting:
Projection of proposed rates for FY 2024 –FY 2027
Authorization to Issue Proposition 218 notice
•Proposition 218 Notice Issued
•Council Proposition 218 Hearing:
Held a minimum of 45 days after Proposition 218 Notice Issued
Approval of Rates assuming inadequate protests received
•Target Effective Date: September 1, 2023
Page 23 of 26
2020 Page 24 of 26
Thank you!
Contacts:
Steve Gagnon –213.262.9308 / sgagnon@raftelis.com
John Wright –951.395.1674 / jwright@raftelis.com
21 Page 25 of 26
FY 2023 - FY 2028 Capital Improvement Plan (Inflation Adjusted Project Costs)
Project Funding Type FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Gravity Main Improvements
Apron Lane Pipeline Replacement WW Repair & Replace Non-Growth $303,188
Edgar Ave Pipeline Replacement WW Repair & Replace Non-Growth $650,475
Lift Station Condition Assessment Improvements
Lift Station Condition WW Repair & Replace Non-Growth $441,000 $458,640 $472,399 $486,571
Operation and Maintenance Improvements
On-going Pipeline Replacement Program WW Repair & Replace Non-Growth $551,250 $573,300 $708,599 $729,857
Wastewater Treatment Plant
I&I System Repairs - Phase 3 WW Repair & Replace Non-Growth $220,500
Office Expansion PAYGO Non-Growth $573,300
UV Bulb Replacement WW Repair & Replace Non-Growth $165,375
RO Module Replacement WW Repair & Replace Non-Growth $343,980
Collection System
Vactor Truck WW Repair & Replace Non-Growth $826,699
Crane Truck PAYGO Non-Growth $364,928
Huber 4MM Coarse Screen Retrofit WW Repair & Replace Non-Growth $52,500
CCTV Main Line Inspection System PAYGO Non-Growth $241,962
Sewer Bridge Coating/Inspection WW Repair & Replace Non-Growth $55,125
4th Streen Manhole Replacement PAYGO Non-Growth $200,000
Oak Valley Lift Station Access Point PAYGO Non-Growth $210,000
Vactor Dump Station PAYGO Non-Growth $450,000
Oak Valley Lift Station Access Point
Mesa Lift Station Construction Capacity Fees Growth $3,650,000 $2,835,000
Mesa Lift Station Construction Grants Growth $100,000 $2,415,000
Repair and Replacement
Lift Station Spare Pump Program WW Repair & Replace Non-Growth $300,000
VFD WW Repair & Replace Non-Growth $250,000
Recycled Water
Recycled Water Feasibility Capacity Fees Growth $2,205,000
Total $5,160,000 $7,749,462 $2,386,913 $1,949,220 $2,007,697 $1,581,356
Cumulative Total $5,160,000 $12,909,462 $15,296,375 $17,245,595 $19,253,291 $20,834,647
Page 26 of 26