2021 Water and Wastewater Rate Study


 

Cloverdale's Water & Wastewater Utilities

Water

The City of Cloverdale provides water services to over 3,300 residential, commercial, industrial, and irrigation service connections. The city can provide more than 500 million gallons of water per year and maintains over 40 miles of water pipelines, 3,300 service lines, hundreds of fire hydrants, 10 storage reservoirs, and two pump stations. The city's water filtration plant has the capacity to produce 4.5 million gallons per day of high-quality drinking water. The city's 7 wells have an approximate total capacity in the summer months of 3.6 million gallons per day. Capital  Capital projects totaling about $26.9 million have been identified to build a new well, rehabilitate aging wells, improve treatment facilities, replace and or rehabilitate pipes, pump stations, water tanks, and other system facilities over the next ten years.

Wastewater


Cloverdale also provides wastewater services to approximately 3,300 customers, maintaining over 37 miles of wastewater mains, and one wastewater lift station. According to the City's Sewer Master Plan, the Wastewater Treatment Facility has an average daily dry weather capacity 1.0 million gallons per day (MGD) with a peak dry weather capacity of 2.20 MGD and peak wet weather capacity of 8.25 MGD.   Unique to the wastewater utility is the possibility of a large project (the “Advanced Water Treatment” (AWT) project) in the next decade or two. The City has been notified by the State of California Regional Water Quality Control Board (RWQCB) that the wastewater utility may eventually (perhaps within 10 years) be required to increase the level of treatment of its wastewater. The AWT project is projected to cost on the order of $80 million.

Proposed Rate Changes

Reasons for the Proposed Rate Changes

A Rate Study was previously updated in 2016 which recommended adjusting water and wastewater rates by 3% on July 1, 2017, 2018 and 2019. Periodic rate adjustments are necessary to:

  • Ensure that each customer bears a fair and proportionate share of the cost of providing services (consistent with legal requirements)
  • Cover the rising cost of providing services, including operation and maintenance costs, debt service, and capital program needs
  • Meet financial, regulatory, and service obligations

Water and wastewater costs include:

  • Energy, fuel, and chemical costs
  • Water production and treatment costs
  • Wastewater treatment and disposal costs
  • Water distribution and wastewater collection costs
  • Administrative and customer service costs
  • Costs related to facilities replacement, rehabilitation, and upgrade of water and wastewater systems

Central factors necessitating rate increases at this time include:

  • Funding requirements for the replacement, rehabilitation, and upgrade of water and wastewater facilities which have experienced deferred maintenance in recent years.
  • Increased costs of water and wastewater operations, including energy costs, supplies, maintenance, and employee costs.

2021 Water and Wastewater Rate Study

The City actively works to maintain the financial stability of the two utilities while providing safe and reliable services.  Updates to the Water and Wastewater Financial Plans and to supporting rates are periodically necessary to ensure that the water and wastewater utilities are fully able to cover the costs of providing services. Updating the water and wastewater rates to keep up with the rising costs of providing safe and high quality drinking water and wastewater services is a key component of maintaining the financial viability of the utilities, including maintaining healthy fund balances/reserves for emergencies and applicable bond covenants, and debt coverage ratios for bond covenants and strong credit ratings. Updates to the rate study are also necessary to fund infrastructure investments in infrastructure maintenance and improvements which are mandated or otherwise necessary for safe and efficient operation of the utilities. 

Proposed Water Rates Revenue Increases


Rate Adjustment Date  Proposed Rate Revenue Increase 
 July 1, 2021  6.0%
 July 1, 2022  12.0%
 July 1, 2023  12.0%
 July 1, 2024  12.0%
 July 1, 2025  12.0%

Proposed Wastewater Rates Revenue Increases


 Rate Adjustment Date  Proposed Rate Revenue Increase
 July 1, 2021  3.0%
 July 1, 2022  10.0%
 July 1, 2023  10.0%
 July 1, 2024  10.0%
 July 1, 2025  10.0%


The rate analysis and proposed rates and rate structures are described in the 2021 Water and Sewer Rate Study (PDF).

A PowerPoint presentation about the 2021 Rate Study was prepared to provide an overview of the rate study.


Public Hearing on Water and Wastewater Rates

The City Council considered a recommendation from staff to adopt changes to the water and wastewater rates at a public hearing on Wednesday, June 9, 2021, held via Teleconference. The hearing started at 6:00 p.m. After the close of the Public Hearing, the Council recommended ending the 218 process and holding a workshop to further discuss the 2021 Water and Sewer Rate Study (PDF) and receive public input from the community.  

More information about the June 9, 2021 public hearing and the proposed rates is provided in the Proposition 218 Public Hearing Notice (PDF).

2021 Water and Sewer Rate Study (PDF)