06/29/2023 Water and Sewer Rate Study Informative Meeting

CITY OF CALIFORNIA CITY CITY COUNCIL MEETING THURSDAY JUNE 29, 2023 NOTICE OF CANCELLATION NOTICE IS HEREBY GIVEN that the Special Meeting of the City Council meeting scheduled for Thursday, June 29, 2023, at 5:00 p.m. in the Council Chambers, 21000 Hacienda Boulevard is cancelled due to no quorum. City Manager opened the meeting as informational only for public discussion. Affidavit of Posting: This agenda was posted on all official City bulletin boards and the City website. Socorro Chavez, City Clerk

Kelly Kulikoff Mayor Ronald Smith Mayor Pro Tem Jim Creighton Councilmember Karen Macedonio Councilmember Michael Kulikoff Councilmember AGENDA CITY OF CALIFORNIA CITY CITY COUNCIL/ HOUSING AUTHORITY/ SUCCESSOR AGENCY SPECIAL MEETING THURSDAY, JUNE 29, 2023 SPECIAL MEETING @ 5:00PM COUNCIL CHAMBERS & VIA ZOOM 21000 HACIENDA BLVD., CALIFORNIA CITY, CA 93505 If you need special assistance to participate in this meeting, contact the Deputy City Clerk at (760) 373-7140 or via email at Cityclerk@californiacity-ca.gov. We request a 24-hour notification prior to the meeting in order for the City to make reasonable arrangements to ensure accessibility. (28 CFR 35.102-35.104 American Disabilities Act Title II) Zoom instructions and notes: 1. Web Link: https://us06web.zoom.us/j/82835868350 2. Meeting ID: 828 3586 8350 3. Public can dial into the Zoom line: a. One tap mobile: +16694449171,,87475859247# US b. Dial the following number: +1 564 217 2000 US 4. Comments a.Public must join Zoom meeting to comment b.Keep your mic on Mute until you are requested to speak c.Use the “Raise your Hand” button to request to speak or, d.Send a chat request to City Clerk for request to speak e.When requested to speak state your name for the record f. Re-mute when your time to speak has ended Public is urged to listen to the meeting in a quiet place, to avoid background noise. We also request public to MUTE your audio device when not commenting to avoid disruption during meeting.June 29, 20231

** At this time, please take a moment to turn off your cell phones ** SPECIAL MEETING @ 5:00 PM CALL TO ORDER ROLL CALL Councilmembers: Kulikoff, Creighton, Macedonio, Mayor Pro Tem Smith, Mayor Kulikoff PLEDGE OF ALLEGIANCE/ INVOCATION ADOPT AGENDA DISCUSSION ITEM DI 1. Water and Sewer Rate Study – by Public Works Director, Joe Barragan PUBLIC COMMENTS Members of the public are welcome to address the City Council only on those items the discussion item section. Each member of the public will be given (3) three minutes to speak. ADJOURNMENT AFFIDAVIT OF POSTING: This agenda was posted on all official City bulletin boards and the city website at least 24 hours prior to the Special City Council Meeting. Socorro Chavez, City ClerkJune 29, 20232

Water and Sewer Rate Study City of California City R OB E R T D. N I E HA U S, I N C . J U N E 29, 2023June 29, 20233

Agenda  Key Assumptions  Inflation  Customer Growth  Water Use  Water Financial Plan  Proposed Water Rates  Sewer Financial Plan  Proposed Sewer Rates  Next Steps 2June 29, 20234

3Inflation Factors ~Average of 3.3% increase per year for water operating expenses ~Average of 3.5% increase per year for sewer operating expenses3.0% 3.2% 4.5% 5.0% 5.0% 4.5% 7.0% 5.5% 4.5% 3.4% 4.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Payroll Other Employee Utilities Chemicals Water Treatment Wastewater Treatment Water Purchase Fuel/Automobile Construction Insurance OverallJune 29, 20235

4Customer Growth 4,762 4,831 4,901 4,972 5,044 5,117 5,191 5,267 5,344 5,422 5,501 0 1,000 2,000 3,000 4,000 5,000 6,000 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 3/4" 1" 1 1/2" 2" 3" 4" 6" 8" Water Sewer 4,264 4,290 4,316 4,343 4,370 4,397 4,425 4,453 4,481 4,510 4,539 - 1,000 2,000 3,000 4,000 5,000 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 Residential Residential + Commerical Restaurants Prison (Bed)June 29, 20236

5Water Use 938 947 955 964 973 982 991 1,000 1,009 1,019 1,029 - 200 400 600 800 1,000 1,200 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 hcf Thousands 3/4" 1" 1 1/2" 2" 3" 4" 6" 8"June 29, 20237

6 Water Financial PlanJune 29, 20238

7Current Water RatesCustomer Class Meter Size Monthly Fee All Customers 3/4" $30.00 1" $70.00 1 1/2" $160.00 2" $270.00 3" $610.00 4" $1,110.00 6" $2,470.00 8" $4,240.00 Fixed ChargesCustomer Class Tier - Width Unit Cost 3/4" Tier 1 - 6 hcf $0.00 Tier 2 - 3 hcf $5.00 Tier 3 - 6 hcf $1.00 Tier 4 - 10 hcf $2.00 Tier 5 - 15 hcf $3.00 Tier - All Additional hcf $4.00 1" Tier 1-12 hcf $0.00 Tier 2-3 hcf $6.00 Tier 3-10 hcf $1.00 Tier 4-17 hcf $2.00 Tier 5-25 hcf $3.00 Tier 6 - All Additional hcf $4.00 1 1/2" Tier 1-25 hcf $0.00 Tier 2-5 hcf $4.00 Tier 3-20 hcf $1.00 Tier 4-33 hcf $2.00 Tier 5-50 hcf $3.00 Tier 6 - All Additional hcf $4.00 Variable Charges2" Tier 1-40 hcf $0.00 Tier 2-10 hcf $2.00 Tier 3-30 hcf $1.00 Tier 4-53 hcf $2.00 Tier 5-80 hcf $3.00 Tier 6 - All Additional hcf $4.00 3" Tier 1-90 hcf $0.00 Tier 2-15 hcf $1.00 Tier 3-70 hcf $1.00 Tier 4-117 hcf $2.00 Tier 5-175 hcf $3.00 Tier 6 - All Additional hcf $4.00 4" Tier 1-160 hcf $0.00 Tier 2-30 hcf $1.00 Tier 3-125 hcf $1.00 Tier 4-210 hcf $2.00 Tier 5-315 hcf $3.00 Tier 6 - All Additional hcf $4.00 6" Tier 1-360 hcf $0.00 Tier 2-60 hcf $1.00 Tier 3-280 hcf $1.00 Tier 4-467 hcf $2.00 Tier 5-700 hcf $3.00 Tier 6 - All Additional hcf $4.00 8" Tier 1-620 hcf $0.00 Tier 2-100 hcf $1.00 Tier 3-480 hcf $1.00 Tier 4-800 hcf $2.00 Tier 5-1200 hcf $3.00 Tier 6 - All Additional hcf $4.00June 29, 20239

8Revenue SummaryMeter Size Customer Count Rate Revenue 3/4" 4481 $30.00 $1,613,160 1" 195 $70.00 $163,800 1 1/2" 21 $160.00 $40,320 2" 43 $270.00 $139,320 3" 1 $610.00 $7,320 4" 12 $1,110.00 $159,840 6" 5 $2,470.00 $148,200 8" 4 $4,240.00 $203,520Use Category Volume (hcf) Rate Revenue 3/4" - Tier 1 244,900 $0.00 $0 3/4" - Tier 2 71,263 $5.00 $356,315 3/4" - Tier 3 84,361 $1.00 $84,361 3/4" - Tier 4 66,399 $2.00 $132,798 3/4" - Tier 5 39,300 $3.00 $117,900 3/4" - Tier 6 38,676 $4.00 $154,704 1" - Tier 1 19,051 $0.00 $0 1" - Tier 2 1,366 $6.00 $8,196 1" - Tier 3 3,223 $1.00 $3,223 1" - Tier 4 2,697 $2.00 $5,394 1" - Tier 5 1,446 $3.00 $4,338 1" - Tier 6 2,469 $4.00 $9,876 1 1/2" - Tier 1 2,065 $0.00 $0 1 1/2" - Tier 2 455 $4.00 $1,820 1 1/2" - Tier 3 1,196 $1.00 $1,196 1 1/2" - Tier 4 1,016 $2.00 $2,032 1 1/2" - Tier 5 641 $3.00 $1,923 1 1/2" - Tier 6 2,312 $4.00 $9,2482" - Tier 1 17,808 $0.00 $0 2" - Tier 2 1,367 $2.00 $2,734 2" - Tier 3 4,953 $1.00 $4,953 2" - Tier 4 5,653 $2.00 $11,306 2" - Tier 5 5,115 $3.00 $15,345 2" - Tier 6 17,339 $4.00 $69,356 3" - Tier 1 84 $0.00 $0 3" - Tier 2 - $1.00 $0 3" - Tier 3 - $1.00 $0 3" - Tier 4 - $2.00 $0 3" - Tier 5 - $3.00 $0 3" - Tier 6 - $4.00 $0 4" - Tier 1 18,653 $0.00 $0 4" - Tier 2 959 $1.00 $959 4" - Tier 3 2,158 $1.00 $2,158 4" - Tier 4 897 $2.00 $1,794 4" - Tier 5 190 $3.00 $570 4" - Tier 6 - $4.00 $0 6" - Tier 1 2,179 $0.00 $0 6" - Tier 2 390 $1.00 $390 6" - Tier 3 1,525 $1.00 $1,525 6" - Tier 4 2,520 $2.00 $5,040 6" - Tier 5 2,869 $3.00 $8,607 6" - Tier 6 372 $4.00 $1,488 8" - Tier 1 1,762 $0.00 $0 8" - Tier 2 431 $1.00 $431 8" - Tier 3 1,263 $1.00 $1,263 8" - Tier 4 2,218 $2.00 $4,436 8" - Tier 5 3,101 $3.00 $9,303 8" - Tier 6 261,763 $4.00 $1,047,052 Fixed 54% Variable 46%June 29, 202310

9Operating Budget Assumptions: • Slight customer growth • Stable water use • Current Inflation trends will level out over timeCategory FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total Revenue $4,742,514 $4,783,858 $4,825,782 $4,868,288 $4,911,375 $4,955,044 O&M Expense $5,244,122 $5,441,942 $5,639,260 $5,822,932 $6,012,877 $6,209,323 Inflation 3.8% 3.6% 3.3% 3.3% 3.3% Net Income (Deficit) ($658,084) ($813,477) ($954,644) ($1,101,503) ($1,254,279) FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 $4,999,296 $5,045,094 $5,091,476 $5,138,442 $5,185,993 $6,412,504 $6,622,666 $6,840,064 $7,064,961 $7,297,632 3.3% 3.3% 3.3% 3.3% 3.3% ($1,413,208) ($1,577,572) ($1,748,588) ($1,926,519) ($2,111,639)June 29, 202311

10Other Financial Reserve Policy/Targets No Policy Included: Cash Balance Water ~$4.3 Million $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 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 PAYGO Debt ServiceJune 29, 202312

11Specific Water Capital ProjectsJune 29, 202313

Fund Balance with No Adjustment (Water) 12-$80 -$70 -$60 -$50 -$40 -$30 -$20 -$10 $0 $10 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 MillionsJune 29, 202314

13Proposed Multi-Year AdjustmentsFY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Recommended Adjustment 68.0% 30.0% 8.0% 8.0% 8.0% Multiplier 1.68 2.18 2.36 2.55 2.75 Cumulative Adjustment 68.0% 118.4% 135.9% 154.7% 175.1%June 29, 202315

Suggested Reserve Policy 14 Operating Reserve: 6 Months Operating ~$3.1 Million in FY 2028 Capital Reserve: 1 year CIP expense average ~$4.5 Million Emergency Reserve: 2% of Assets ~?June 29, 202316

Fund Balance with Adjustment (Water) 15$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 MillionsJune 29, 202317

Financial Pro Forma (Water) 16Rate Increase 68.0% 30.0% 8.0% 8.0% 8.0% Rate Month Implemented January July July July July FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Cash Position Opening Balance 4,370,839$ 3,383,599$ 2,026,491$ 2,566,598$ 3,655,818$ 5,396,726$ Revenues Water Rate Revenue 4,557,514$ 7,721,749$ 10,124,123$ 11,028,051$ 12,013,199$ 13,086,885$ Other Operating Revenue 122,000$ 123,830$ 125,687$ 127,573$ 129,486$ 131,429$ Property Tax 63,000$ 63,749$ 64,508$ 65,276$ 66,055$ 66,843$ Other Non-Operating Revenue -$ -$ -$ -$ -$ -$ Total Revenues 4,742,514$ 7,909,328$ 10,314,318$ 11,220,900$ 12,208,740$ 13,285,157$ Operating Inflation Operating Expenses 5,244,122$ 5,441,942$ 5,639,260$ 5,822,932$ 6,012,877$ 6,209,323$ Current Debt Service 260,132$ 259,867$ 259,867$ 259,867$ 259,867$ 259,867$ Proposed Debt Service -$ -$ -$ -$ -$ -$ Total Operating and Debt Service 5,504,254$ 5,701,809$ 5,899,126$ 6,082,799$ 6,272,744$ 6,469,190$ Net Revenues (761,740)$ 2,207,519$ 4,415,191$ 5,138,101$ 5,935,995$ 6,815,967$ Capital Expenditure 225,500$ 3,564,627$ 3,875,084$ 4,048,882$ 4,195,087$ 4,346,572$ Debt Proceeds Current -$ -$ -$ -$ -$ -$ Debt Proceeds Proposed -$ -$ -$ -$ -$ -$ Grants -$ -$ -$ -$ -$ -$ Cash 225,500$ 3,564,627$ 3,875,084$ 4,048,882$ 4,195,087$ 4,346,572$ Net Income (987,240)$ (1,357,108)$ 540,107$ 1,089,220$ 1,740,908$ 2,469,395$ Ending Balance 3,383,599$ 2,026,491$ 2,566,598$ 3,655,818$ 5,396,726$ 7,866,121$ DSCR -1.93 9.49 17.99 20.77 23.84 27.23June 29, 202318

Cost of Service (Water) 17Unit Count of Units Customers 4,759 EMs 5,771 Water Use 944,436 Max Month 115,587 Average Day 2,595 Max Day 3,800 Peak Hourly 5,701Source of Supply Base MDD PHD Meters Customer Service Rate Revenue Requirement $252,107 $3,020,943 $1,403,930 $460,639 $1,430,746 $1,153,384 Units 944,436 944,436 3,800 5,701 5,771 4,759 Unit Cost $0.27 $3.20 $369.42 $80.81 $247.92 $242.36Customer Class Total Base MDD PHD Meters Customer Service Residential $5,445,224 $1,860,032 $822,073 $269,728 $1,218,955 $1,119,211 Non Residential $2,276,525 $1,160,911 $581,857 $190,911 $211,792 $34,173June 29, 202319

18 Proposed Water RatesJune 29, 202320

Rate Design (Water Option 1) 19Customer Class Cost of Service Variable Percent Fixed Percent Residential $5,445,224 $1,247,026 22.9% $4,198,198 77.1% Non Residential $2,276,525 $869,650 38.2% $1,406,875 61.8% Total $7,721,749 $2,116,676 27.4% $5,605,073 72.6%Meter Size Res Non-Res 3/4" $54.79 $97.61 1" $77.97 $149.48 1 1/2" $135.39 $278.00 2" $204.58 $432.83 3" $366.12 $794.38 4" $596.86 $1,310.75 6" $1,173.17 $2,600.54 8" $1,865.02 $4,148.90 Variable rate includes all water useCustomer Class Variable Rate (hcf) Residential $3.93 Non Residential $3.99June 29, 202321

Proposed Rates (Water Option 1) 20Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Res 68% 30% 8% 8% 8% 3/4" $30.00 $54.79 $71.23 $76.92 $83.08 $89.72 1" $70.00 $77.97 $101.36 $109.46 $118.22 $127.68 1 1/2" $160.00 $135.39 $176.01 $190.09 $205.29 $221.72 2" $270.00 $204.58 $265.95 $287.22 $310.20 $335.02 3" $610.00 $366.12 $475.96 $514.04 $555.16 $599.57 4" $1,110.00 $596.86 $775.91 $837.98 $905.02 $977.43 6" $2,470.00 $1,173.17 $1,525.12 $1,647.13 $1,778.90 $1,921.21 8" $4,240.00 $1,865.02 $2,424.53 $2,618.49 $2,827.97 $3,054.20 Non-Res 3/4" $30.00 $97.61 $126.90 $137.05 $148.01 $159.86 1" $70.00 $149.48 $194.33 $209.88 $226.67 $244.80 1 1/2" $160.00 $278.00 $361.40 $390.31 $421.53 $455.26 2" $270.00 $432.83 $562.68 $607.70 $656.32 $708.82 3" $610.00 $794.38 $1,032.69 $1,115.30 $1,204.53 $1,300.89 4" $1,110.00 $1,310.75 $1,703.98 $1,840.30 $1,987.52 $2,146.52 6" $2,470.00 $2,600.54 $3,380.70 $3,651.16 $3,943.25 $4,258.71 8" $4,240.00 $4,148.90 $5,393.57 $5,825.05 $6,291.06 $6,794.34Customer Class FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 All Use per hcf 68.0% 30.0% 8.0% 8.0% 8.0% Residential $3.93 $5.11 $5.52 $5.96 $6.44 Non Residential $3.99 $5.19 $5.60 $6.05 $6.53June 29, 202322

Rate Design (Water Option 2) 21 Variable rate includes all water useCustomer Class Variable Rate (hcf) Residential $5.34 Non Residential $5.59Meter Size Res Non-Res 3/4" $40.86 $40.86 1" $54.70 $54.70 1 1/2" $88.99 $88.99 2" $130.31 $130.31 3" $226.79 $226.79 4" $364.59 $364.59 6" $708.78 $708.78 8" $1,121.97 $1,121.97Customer Class Cost of Service Variable Percent Fixed Percent Residential $5,445,224 $3,107,058 57.1% $2,338,166 42.9% Non Residential $2,276,525 $2,030,561 89.2% $245,964 10.8% Total $7,721,749 $5,137,619 66.5% $2,584,130 33.5%June 29, 202323

Proposed Rates (Water Option 2) 22Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Res 68% 30% 8% 8% 8% 3/4" $30.00 $40.86 $53.11 $57.36 $61.95 $66.91 1" $70.00 $54.70 $71.11 $76.80 $82.94 $89.57 1 1/2" $160.00 $88.99 $115.69 $124.95 $134.94 $145.74 2" $270.00 $130.31 $169.41 $182.96 $197.60 $213.40 3" $610.00 $226.79 $294.83 $318.42 $343.89 $371.40 4" $1,110.00 $364.59 $473.97 $511.89 $552.84 $597.07 6" $2,470.00 $708.78 $921.42 $995.13 $1,074.74 $1,160.72 8" $4,240.00 $1,121.97 $1,458.57 $1,575.25 $1,701.27 $1,837.37 Non-Res 3/4" $30.00 $40.86 $53.11 $57.36 $61.95 $66.91 1" $70.00 $54.70 $71.11 $76.80 $82.94 $89.57 1 1/2" $160.00 $88.99 $115.69 $124.95 $134.94 $145.74 2" $270.00 $130.31 $169.41 $182.96 $197.60 $213.40 3" $610.00 $226.79 $294.83 $318.42 $343.89 $371.40 4" $1,110.00 $364.59 $473.97 $511.89 $552.84 $597.07 6" $2,470.00 $708.78 $921.42 $995.13 $1,074.74 $1,160.72 8" $4,240.00 $1,121.97 $1,458.57 $1,575.25 $1,701.27 $1,837.37Customer Class FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 All Use (per hcf) 68.0% 30.0% 8.0% 8.0% 8.0% Residential $5.34 $6.94 $7.50 $8.10 $8.74 Non Residential $5.59 $7.27 $7.85 $8.48 $9.15June 29, 202324

23 Sewer Financial PlanJune 29, 202325

24Current Rates SewerCustomer Class Annual Fee Residential $40.00 Residential + $10.00 Commerical $0.00 Restaurants $0.00 Prison (Bed) $21.41 Sewage Truck $0.00 Fixed ChargesCustomer Class Tier - Width Unit Cost Residential All Use $0.00 Residential + All Use $0.00 Commerical All Use $2.88 Restaurants All Use $4.13 Prison (Bed) All Use $1.50 Sewage Truck All Use $5.00 Variable ChargesJune 29, 202326

25Revenue Summary Fixed 78% Variable 22%Customer Class Customer Count Rate Revenue Residential 1,459 $40.00 $700,320 Residential + 239 $10.00 $28,680 Commerical 61 $0.00 $0 Restaurants 5 $0.00 $0 Prison (Bed) 2,500 $21.41 $642,300 Sewage Truck - $0.00 $0Use Category Volume (hcf) Rate Revenue Residential - $0.00 $0 Residential + - $0.00 $0 Commerical 42,334 $2.88 $121,922 Restaurants 2,329 $4.13 $9,619 Prison (Bed) 172,712 $1.50 $259,068 Sewage Truck - $5.00 $0June 29, 202327

26Operating Budget Assumptions: • Slight customer growth • Stable sewer flows • Current Inflation trends will level out over timeCategory FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Total Revenue $1,780,909 $1,792,257 $1,803,610 $1,815,450 $1,827,295 $1,839,146 O&M Expense $1,430,350 $1,486,962 $1,543,432 $1,594,053 $1,646,424 $1,700,608 Inflation 4.0% 3.8% 3.3% 3.3% 3.3% Net Income (Deficit) $305,295 $260,178 $221,396 $180,871 $138,538 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 $1,851,483 $1,863,826 $1,876,175 $1,889,011 $1,901,853 $1,756,671 $1,814,683 $1,874,715 $1,936,842 $2,001,140 3.3% 3.3% 3.3% 3.3% 3.3% $94,812 $49,143 $1,460 ($47,831) ($99,287)June 29, 202328

27Other Financial Reserve Policy/Targets No Policy Included: Cash Balance Sewer ~$4.0 Million $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 PAYGO Debt ServiceJune 29, 202329

28Specific Sewer Capital ProjectsFacility Project Timeline Cost WWTF Headworks Upgrade (fine screens and grit removal) Immediate $1,000,000 WWTF Biolac Conversion of Aeration Ponds Immediate $1,500,000 WWTF Additional 10-acre Disposal Pond Immediate $1,000,000 (City staff construction) WWTF Secondary Disinfection & Holding Tank (discharge to pond) Immediate $1,000,000 WWTF Sludge Dewatering Screw Press 5-10 years $1,000,000 WWTF Demolition of Tertiary Treatment Facilities 5-10 years $150,000 TOTAL $5,650,000June 29, 202330

Fund Balance with No Adjustment (Sewer) 29-$4.0 -$3.0 -$2.0 -$1.0 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 MillionsJune 29, 202331

30Proposed Multi-Year AdjustmentsFY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Recommended Adjustment 6.0% 6.0% 6.0% 6.0% 6.0% Multiplier 1.06 1.12 1.19 1.26 1.34 Cumulative Adjustment 6.0% 12.4% 19.1% 26.2% 33.8%June 29, 202332

Suggested Reserve Policy 31 Operating Reserve: 6 Months Operating ~$850,000 in FY 2028 Capital Reserve: 1 year CIP expense average ~$0.6 Million Emergency Reserve: 2% of Assets ~?June 29, 202333

Fund Balance with Adjustment 32$0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 MillionsJune 29, 202334

Financial Pro Forma (Sewer) 33Rate Increase 6.0% 6.0% 6.0% 6.0% 6.0% Rate Month Implemented January July July July July FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Cash Position Opening Balance 3,977,079$ 4,005,463$ 3,361,661$ 2,744,691$ 2,167,342$ 1,643,729$ Revenues Sewer Rate Revenue 1,761,909$ 1,879,326$ 2,004,490$ 2,138,480$ 2,281,332$ 2,433,628$ Other Operating Revenue 12,000$ 12,240$ 12,485$ 12,734$ 12,989$ 13,249$ Property Tax 7,000$ 7,068$ 7,137$ 7,206$ 7,277$ 7,348$ Other Non-Operating Revenue -$ -$ -$ -$ -$ -$ Total Revenues 1,780,909$ 1,898,634$ 2,024,111$ 2,158,420$ 2,301,598$ 2,454,225$ Operating Inflation 4.0% 3.8% 3.3% 3.3% 3.3% Operating Expenses 1,430,350$ 1,486,962$ 1,543,432$ 1,594,053$ 1,646,424$ 1,700,608$ Current Debt Service 112,175$ 115,109$ 115,109$ 115,109$ 115,109$ 115,109$ Proposed Debt Service -$ -$ -$ -$ -$ -$ Total Operating and Debt Service 1,542,525$ 1,602,071$ 1,658,541$ 1,709,162$ 1,761,533$ 1,815,716$ Net Revenues 238,384$ 296,563$ 365,571$ 449,258$ 540,065$ 638,509$ Capital Expenditure 210,000$ 940,365$ 982,540$ 1,026,607$ 1,063,678$ 1,102,088$ Debt Proceeds Current -$ -$ -$ -$ -$ -$ Debt Proceeds Proposed -$ -$ -$ -$ -$ -$ Grants -$ -$ -$ -$ -$ -$ Cash 210,000$ 940,365$ 982,540$ 1,026,607$ 1,063,678$ 1,102,088$ Net Income 28,384$ (643,802)$ (616,970)$ (577,349)$ (523,613)$ (463,579)$ Interest Adjustment -$ -$ -$ -$ -$ -$ Ending Balance 4,005,463$ 3,361,661$ 2,744,691$ 2,167,342$ 1,643,729$ 1,180,151$June 29, 202335

Cost of Service (Sewer) 34Unit Count of Units Customers 1,526 Units 4,264 Flow 352,683 BOD 562,862 TSS 543,832Volume BOD TSS Sewer Service Rate Revenue Requirement $810,563 $405,281 $405,281 $258,200 Units 352,683 562,862 543,832 1,526 Unit Cost $2.30 $0.72 $0.75 $169.20Customer Class Total Volume BOD TSS Sewer Service SFR $709,087 $261,599 $102,329 $105,909 $239,249 MFR $96,295 $49,376 $19,314 $19,990 $7,614 Commercial $148,111 $97,295 $24,738 $15,756 $10,321 Restaurants $23,169 $5,353 $10,469 $6,501 $846 Prison $902,665 $396,940 $248,431 $257,124 $169June 29, 202336

35 Proposed Sewer RatesJune 29, 202337

Rate Design (Sewer) 36 Truck rates based on 5x residential sewer strengthCustomer Class Cost of Service Fixed Units Fixed Cost per Unit Variable Units Variable Cost per Unit Fixed Percent SFR $709,087 1,414 $501.48 113,824 $0.00 $373,332 52.6% MFR $96,295 284 $339.07 21,484 $0.00 $59,697 62.0% Commercial $148,111 61 $0.00 42,334 $3.50 $98,141 66.3% Restaurants $23,169 5 $0.00 2,329 $9.95 $5,522 23.8% Prison $902,665 2,500 $259.95 172,712 $1.46 $396,940 44.0%Customer Class Fixed Charge Variable Charge SFR $41.79 $0.00 MFR $28.26 $0.00 Commercial $0.00 $3.50 Restaurants $0.00 $9.95 Prison $21.66 $1.46 Sewage Truck (100 gallons) $0.00 $14.10June 29, 202338

Proposed Rates (Sewer) 37Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Fixed Charge 6% 6% 6% 6% 6% SFR $40.00 $41.79 $44.30 $46.95 $49.77 $52.76 MFR $10.00 $28.26 $29.95 $31.75 $33.65 $35.67 Commercial $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Restaurants $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Prison $21.41 $21.66 $22.96 $24.34 $25.80 $27.35Customer Class Current FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Variable Charge 6% 6% 6% 6% 6% SFR $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 MFR $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Commercial $2.88 $3.50 $3.71 $3.93 $4.17 $4.42 Restaurants $4.13 $9.95 $10.54 $11.18 $11.85 $12.56 Prison $1.50 $1.46 $1.55 $1.64 $1.74 $1.85 Sewage Truck (100 gallons) $5.00 $14.10 $14.95 $15.84 $16.79 $17.80June 29, 202339