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<br />
<br />Water Rate Cost-of-Service Study
<br />Section 3. Revenue Requirements
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<br />HF&H Consultants, LLC | July 8, 2025 | Page 17 of 53
<br />Figure 3-4. Projected Capital Improvement Program
<br /> Note: Capacity Fees based on historical growth from billing account data. Capital projects provided by the City based on
<br />recommendations to City Council in April 2025.
<br />Note: Land purchase is not a part of the approved CIP. Also, Projected costs for Recycled Water Distribution System Phase 2
<br />Extension were not included in the approved CIP.
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<br />The major expenses described above that comprise the revenue requirements are shown in
<br />Figure 3-5. Wholesale water purchases account for the largest individual cost among these
<br />three cost categories. In the City’s case 44% of its total revenue requirement is for the cost
<br />of water, which will vary in direct proportion to demand. Current rate revenues of $49.0 million
<br />are insufficient to meet projected expenses. The City faces a future growing deficit.
<br />Water Enterprise CIP FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
<br />Distrib. System Replacement Program $1,000,000 $1,500,000 $2,000,000 $2,000,000 $2,000,000
<br />Cathodic Protection Program $100,000 $100,000 $100,000 $100,000 $100,000
<br />Water System Seismic Improvement Program $1,000,000 $250,000 $250,000 $250,000 $250,000
<br />Main City Potable Water Tank and Pump Station $2,250,000 $3,000,000 $3,000,000 $3,500,000 $4,000,000
<br />Pump Station and Tank Rehab./ Repl.$1,500,000 $2,000,000 $1,000,000 $1,000,000 $1,000,000
<br />(SCADA) System Rehabilitation $500,000 $0 $0 $0 $0
<br />Water Tank Cathodic Protection Syst. Repl. $100,000 $100,000 $100,000 $100,000 $100,000
<br />Recycled Water Distrib. System Phase 2 Ext. $0 $1,000,000 $2,000,000 $3,100,000 $3,100,000
<br />Main City Recycled Water Tank and Pump Station $2,400,000 $2,400,000 $2,400,000 $2,400,000 $2,400,000
<br />Future Water Storage Tank Land Purchase $0 $2,067,308 $2,067,308 $2,067,308 $0
<br />Water Enterprise CIP Subtotal $8,850,000 $12,417,308 $12,917,308 $14,517,308 $12,950,000
<br />Construction Cost Index 3.26% 6.62% 10.10% 13.68% 17.39%
<br />Total Inflated CIP $9,138,353 $13,239,658 $14,221,519 $16,503,830 $15,201,732
<br />Less Total Capacity Fees ($499,752) ($499,752) ($499,752) ($499,752) ($499,752)
<br />Net PAYGo CIP $8,638,601 $12,739,906 $13,721,767 $16,004,078 $14,701,980
<br />ATTY/RESO.0109/CC RESO WATER RATES - EXHIBIT A
<br />REV: 11-05-25 MI
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