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CITYW CARLSBAD - AGENDAOLL -. 'i
AB# ii,oo y' TITLE:
MTG. 1 /22/91
DEPT. HO
CITY MGI DEPT,v&M
CITY All
RECOMMENDED ACTION: 7 *L;
, WASTF, WATER REVENUE
PROGRAM
ADOPT RESOLUTION NO.
1. Accepts the sewer rate study prepared by James M. Montgomery, Consulting
(4' -"/ m(-JlJ:
Engineers, Incorporated.
2. Directs staff to prepare the required ordinances for Council consideration at a
noticed public hearing.
I'IEM EXPLANATION:
The Sewer Enterprise Fund is dependent on sewer service fees and lateral installation
fees for its support. No general fund revenues are dedicated to the operation and/or
maintenance of the sewer system.
It has been eight (8) years since the last comprehensive review of sewer service
charges.
In 1982, the sewer service charge was $5.25 per month for single family residential
uses. Rates were increased to $6.75/mo. in 1984 to cover increased treatment costs.
When the Encina Water Pollution Control Facility (EWPCF) shifted from primary to
secondary sewage treatment in 1987, the cost of treatment was significantly increased.
Since 1985 sewer operating costs have increased 90%, while operating revenues have
increased only 42%. This increase was absorbed within the existing rate structure with
deficits occurring in ETs 1988-89, 89-90 and 90-91, which were subsidized by sewer
operating reserves (see Exhibit "4").
A sewer service charge increase to $7.30/mo. was approved in 1989 as a means to
partially offset the revenue shortfall until a comprehensive review of the sewer rate
structure could be completed (see Exhibit "5"). Without a further increase the sewer
operating reserve would be depleted in less than two (2) years.
Additionally, the City's present system to determine sewer service rates does not meet
Environmental Protection Agency (EPA) guidelines of fairness and equity required for
grant financed facilities such as the EWPCF.
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On December 19, 1989, the City Council authorized a sewer rate study. The objective
of the Study was to examine the financial position of the Sewer Enterprise Fund, to
value the assets of the Fund and to recommend fair and equitable sewer rates
consistent with regulatory guidelines. Rates were to be determined on a cost of service
basis so that customers pay charges in proportion to the services they use. The Sewer
Rate Study has been completed and several actions are recommended to maintain the
sewer enterprise fund on a fiscally sound basis.
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1. To comply with EPA regulations for fair and equitable rates, the City must
switch to a system of rates based on flow and strength.
2. Depreciation of the system must be revised to reflect the value of all of the
assets owned by the City.
3. Establishment of a new replacement reserve as required by EPA which would
be funded by the depreciation portion of the sewer service charge.
4. Industrial pretreatment fees should be established to partially fund the cost of
the pretreatment testing program operated by EWPCF. The industrial customers
will be categorized into classes depending upon the quality of their wastewater,
their size and the number of inspections required per year. A portion of the
cost of the pretreatment program will be borne by all users in the system.
5. Sewer lateral installation feeddeposits should be increased to recover full costs
of the service.
Staff recommends City Council approve a monthly residential sewer rate of $11.58
which includes depreciation of 100% of historic asset value. This is a 58% increase
over present rates. The proposed rate is at or below current sewer service charges in
other cities (see Exhibit "6l and "6a").
Should the City Council wish to consider increasing the sewer rate in phases, Staff
recommends the following two alternatives for consideration.
1 RESIDENTIAL SERVICE CHARGE @ $ll.Oo/MO.
Using depreciation equal to 75% of that based on full value of assets ($574,000) used
for FY 1990-91. Depreciation amount to be increased 10% each year until full asset
value depreciation is attained ($766,000).
II RESIDENTIAL, SERVICE CHARGE @ $10.35/MO.
Methodology same as I except we use depreciation of approximately 50% of full value
of assets. This amount ($382,000) closely approximates the annual amount required
to meet the minimum requirements of the State Water Resources Control Board.
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Staff further recommends that the City Council approve the recommendations
conceming the establishment of funds, pre-treatment fees and full cost recovery for
sewer lateral installations as contained in the Sewer Rate Study and direct staff to
prepare the ordinances required to implement the study recommendations, for Council
consideration at a noticed public hearing.
FISCAL IMPACI':
Should the City Council later determine to implement the recommendations of staff,
sewer rates will increase 58% as shown in Exhibit "3". This would fund increasing
operating expenses and establish a replacement reserve which would be funded by full
historic cost depreciation. Continuation of current rate structure would deplete
operating reserve in less than two (2) years.
EXHIBITS:
1. Resolution No. .
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2. Sewer Rate Study, Executive Summary.
3. Proposed Sewer Service Charges.
4. Historic Expenses and Revenues.
5. Sewer Rate History.
6. Comparison of Residential Charges (North County).
6a. Comparison of Residential Charges (Entire County).
7, Wastewater Revenue Program (On file in City Clerk's Office)
8.
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0 RESOLUTION NO. 91-32
A RESOLUTION OF THE CITY OF CARLSBAD,
CALIFORNIA, ADOPTING THE 1990 SEWER RATE
WDY AND SET A DATE FOR A NOTICED PUBLIC
HEARING
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7 study be conducted;
WHEREAS, the sewer enterprise fund is totally dependent on sewer servicc
charges to keep it fiscally sound;
WHEREAS, the City Council of the City of Carlsbad, authorized a sewer rat1
8 WHEREAS, the firm of James M. Montgomery, Consulting Engineer:
9 Incorporated, has completed the sewer rate study.
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NOW, THEREFORE, BE IT RESOLVED by the City of Carlsbad, as follows
1. That the sewer rate study prepared by James M. Montgomeq
Consulting Engineers Incorporated, attached hereto as Exhibit 2 :
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2. That the City Council directs staff to prepare the ordinances require 15
accepted; and,
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to implement the recommendations of the sewer rate study fc
consideration by the City Council at a noticed public hearing
I.8 i PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbz
City Council held on the 22 day of Jan. , 1991, by the following vote, to wit:
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AYES: Council Members Lewis, Kulchin, Larson, Stanton and Nygaa
NOES: None
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ABSENT: None
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26 27 ‘FLS KAREN E HAL. R. KUNDTZ, Assistant Z, City City Clerk Clerk
28 (SEAL)
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CHAPTER 1
EXECUTIVE SUMMARY
The objective of this report is to examine the financial position and value tile ah.5ers
of the of the sewer enterprise of the City of Carlsbad (City). The review 01' [\le
financial position is to culminate in a set of sewer rates that is fair alld equit;lble
and meets regulatory guidelines.
Rates were designed to be fair and equitable, easy to administer and update and
conform to the policies of the City. Rates were determined on a cost of service
basis so that customers pay charges in proportion to the services they use. R;ltes
that meet these objectives may gain easier acceptance by users.
The findings and recommendations of this study are summarized below.
FINDINGS
1. The City of Carlsbad provides sewer service to 70 percent of the Ci11;'s
population. The remaining population of the City is served by Leucadia
County Water District and Vallecitos Water District. The Urilities and
Maintenance Department is responsible for sewer service in the City. The
wastewater generated is transported for treatment and disposal to [he
Encina Water Pollution Control Facility (EWPCF) located in the City.
1. The City generates about 4.8 million gallons per day (mgd) wastewater at
the present time and owns trearmenr capacity of 6.2 mgd at EWPCF.
However, due to continuing growrh in the City, it is acquiring additional
treatment capacity of 3.15 mgd through an expansion of EWPCF currently
in progress. The City's share of this expansion is being funded by Joint
Power Authority financing.
3. The City's existing system of charges is based on equivalent dwelling units
(EDUs). A few customers. whose primary activity involves use of water
and very large water users, are charged on water usage as well as EDCs.
The existing charge for most customers is 57.30 per EDU per month.
Restaurants are charged 514.25 per EDC per nlonth. These rates are the
lowest in the Encina system.
EXHIBIT 2
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4. Billing for sewer service is done monthly along with water bills. This is
facilitated by the fact that the City is the water purveyor and has ready
access to the ‘water consumption records of its customers.
5. The City’s present EDU system does not meet EPA guidelines of fairness
and equity required for grant financed facilities such as EWPCF. A more
equitable method of charging customers for sewer service is that based 011
flow and strength.
6. Increasing costs of treatment and complying with more stringent regulatory
requirements will cause the City’s expenses to be increased by an estimaled
44 percent the next fiscal year and six percent per year Tor the subseqyent
four years reviewed.
7. Encina Administrative Agency will manage and administer (he
pretreatment program from FY 1990-91. In the past. this program was
administered by the County of San Diego. The City was not billed for
several years and hence these costs were not budgeted and revenues not
collected during that time. Future costs of this program will be
administered equitably.
8. The capital improvement program at Encina, the connection fees to be
charged to new customers and the related cash inflows and outflows are
covered in the City’s sewer master plan prepared by Wilson Engineering.
9. The Department’s operating and capital expansion reserves are healthy by
utility standards.
RECOMMENDATIONS
1. In order to comply with €PA regulations for fair and equitable rates. [he
City must switch to a system of rates based on flow and strength.
2. We recommend six classes of customers categorized by quality of
wastewater. These are Group I-Residential, Group 11-Low Strength
Commercial, Group 111-Medium Strength Commercial, Group IV-High
Strength Commercial, Group V-Institutional and Group VI Large Volurne
Users. Low strength users are those whose combined strength expressed in
terms of biochemical oxygen demand (BOD) and suspended solids (SS) is
less than 400 mg/l. This group includes car washes, offices, retail stores.
laundromats, warehouses, hospitals and convalescent homes, and indoor
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theatres. Medium strength users are those whose combined strength is at
least 400 mg/l but less than 1000 mg/I. This group includes hotels/motels
without restaurants or kitchens, service stations, shopping centers.
commercial laundries, and industrial users. High strength users are Those
whose strength is 1000 mg/l or greater and include restaurants, bakeries.
food processors, supermarkets, mortuaries and hotels with restaurants.
Institutional users are schools and membership organizations like churches.
social service clubs. Large volume users are customers who use in excess of
25,000 gpd. These customers have rates set individually based on their
strength.
3. The rates recommended for the different groups for FY 1990-91 are shown below.
Residences are flat rated at $11.58 per month. All other customers pay based on their
water usage, subject to a minimum monthly charge as shown below.
SEWER RATE CHARGES*
murr lvl”
COST MONTHLY
USERS s/BcF CHARGE
G-1-
~Gro~pIICommercial
GroupIXICommercial
GroupIVC I
GroupVIastirrtionat
SCihadrparADA
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Bovding
Jpnior
$1.56 $1 1.58
$1.43 $1 1 .58
$1.87 $1 1.58
$2.96 $1 1.58
$1.42 $1 1.58
$0.26
$0.51
$0.77
$3.86
~..iro\IpvT~vd~users
HUgilCSAiICdt $1.15 $11.58
Beckman Micro Ope? 1 $3.88 $11.58
WgM $1.11 -” $1 1.58
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4. We recommend a deposit be collected for installation of laterals. This
deposit should be $2,500 to ensure that actual Costs of installation are
recovered. On completion of the job the balance, if any, should be
returned.
5. We recommend that users requiring pretreatment be categorized into classes
depending upon the quality of their wastewater, their size and the number
of inspections required per year. Part of the costs of pretreatment program
should be borne by those users in proportion to the costs incurred. These
costs should be prorated so that users are charged for a portion of the COSIS
each month as opposed to being charged a lump sum when the work is
actually performed. A preliminary schedule of fees is shown below. We
recommend that these fees be revised when the program is under way and
users have been categorized. Classes are defined in Chapter 5.
PRETREATMENT FEES PER MONTH
Class 1 $250
Class 2 $150
Class 3 $25
6. We recommend the City categorize all its commercial, industrial and
institutional customers per the classifications listed above as soon as
possible to implement the new rates.
7. We recommend that depreciation be expensed to reflect the value of assels
owned by the City. The recommended rates shown in this chapter are
based on depreciation expensed at 75 percent of that calculated on historic
cost of assets. It is recommended that depreciation be increased gradually
to 100 percent based on historic cost of assets.
8. No changes are recommended in the City’s operating reserves. A new
replacement reserve to be funded by depreciation must be created. This
will be used to finance replacements of the City’s sewer collection system.
The capital expansion reserve will continue to be funded by connection
fees.
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SEWER RATE CHARGES*
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COST MONTHLY
USERS $/HcF CHARGE
Group I Residential $1.56 $1 1.58
Group II Commercial $1.43 $1 1.58
Group IlI Commercial $1.87 $1 1.58
Group IV Commercial $2.96 $11.58
Group V Instiutional $1.42 $1 1.58
Schools pcr ADA
Elementary $0.26
Junior $0.51
High $0.77
Boarding $3.86
Group VI Large Volume Users
Hughes Aircraft $1.15 $1 1.58
Beckman Micro Oper 1 $3.88 $1 1.58
Cuiligan $1.11 $1 1.58
upsing fd historic depreciation
EXHIBIT 3
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BGENCYT
FEE FEE
AB OF AS OF
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City of National City
City of Carlsbad
City of mula Vista Errciaitas Saniw District
City of La Mesa (changed rate structure Lemon Grove Sanitation District Jtainbow Municipal Water District
Padre barn Municipal .Water Dis.trict Vallecitos water District
City of spring valley . . city of vista.
City Of Escoadido valley canter Municipal Water District city of Oceanside upha sanitation District Buma Sanitation District
Wht- Gardens Sewer Maint. Dist,
City of Poway .-
City Of Sa Diego Leucadia County Water District
City Of Coronado Miff laaftation District Fallbrook Sanitary District
Pa= Valley community Serv. Dist Ramona K-W. Pist, (Smta Maria- Plant) Rancho Santa Fe san. ,Imp. Dist. fl Mering Palms Sanitation District Ramona M.W. Dist, (sm'vicinte Plant) 'Fairbanks Ranch Sanitary District Rancho Ckelo Sanitation District Pine. Valley Sanitation District . Julian Sanitation District Rancho Santa Fe San. Imp. Dist, f2 Rancho Santa Fe San, Imp.. Dist. $3
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$ 72.00
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104 . 40
120 . 00
180.24
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144.00
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124.00 4
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Mean Average $245032 $210.78 20
EXHIBIT 6a
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City of Carlsbad
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Wastewater
Revenue Program
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September 1990
JW James M. Montgomery
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Consulting Engineers. Inc
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ERRATA
THE CONSULTANT HAS RECOMMENDED A SEWER SERVICE CHARGE OF
$11.00/MO. WHICH WOULD INCLUDE DEPRECIATION OF 75% OF THE
ASSET VALUE. THE DEPRECIATION PORTION OF THE SERVICE
CHARGE WOULD INCREASE TO 100% OF ASSET VALUE OVER FIVE
(5) YEARS.
AFTER REVIEW OF THE REPORT, STAFF HAS RECOMMENDED A SEWER
SERVICE CHARGE OF $11,58/MO. THIS AMOUNT WOULD PROVIDE
FOR DEPRECIATION OF FULL ASSET VALUE (100% OF HISTORIC
COST) AND GENERATE SUFFICIENT FUNDS TO PROVIDE FOR
REHABILITATION OF AN AGING SEWER INFRASTRUCTURE. THE
DETAIL FOR THIS RECOMMENDATION IS CONTAINED IN APPENDIX
rtA" OF THIS REPORT.
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Serving the World's Environmental Needs Telephone
818 736-9'41
253 NcrtP Mmsor Avenue
Califomla 9: 109 7009
P 0 BOX 70C9. Pasacena.
JNM James M. Montgomery
Zorisulting Engineers. Inc.
@ September 25, 1990
City of Carlsbad
Utilities and Maintenance Department
2075 Las Palmas
Carlsbad, CA 92009-1 5 19
Attention: Mr. Ralph Anderson
Director
Subject: Report on Wastewater Revenue Program
Gentlemen:
James M. Montgomery is pleased to submit this final report on the wastewater
revenue program and inventory valuation study. We found completion of this study
to be quite interesting and are confident that implementation of the results will
prove to be beneficial to the City and its customers.
We believe that the report presents a fair and equitable program of rates and
charges that will keep the City's wastewater enterprise in a sound financial position.
Included in the scope of the work was the preparation of a Symphony computer
model. A diskette containing this model is presented as part of this project and
enclosed herewith.
We wish to take this opportunity to thank the staff of the City for their diligent
efforts and cooperation extended during the course of this study. Specifically we
wish to thank Mr. Pat Guevara for his cooperation throughout the course of this
study.
If we can be of further assistance, or if you have any questions, please do not
hesitate to call.
Very truly yours,
Sudhir D. Pardiwala, P. E.
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CITY OF CARLSBAD
CITY COUNCIL
Claude A. "Bud" Lewis, Mayor
Ann J. Kulchin
Eric Larson
John J. Mamaux
Mark V. Petine
Raymond R. Patchett, City Manager
Ralph Anderson, Utilities and Maintenance Director
Lloyd Hubbs, City Engineer
James Elliott, Finance Director
JAMES M. MONTGOMERY,CONSULTING ENGINEERS, INC.
Sudhir D. Pardiwala
Project Eqgineer
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TABLEOFCONTENTS
Page No .
Letter of Transmittal
CHAPTER 1 EXECUTIVE SUMMARY
Findings ................................................................................................................. 1-1
Recommendations ................................................................................................... 1-2
CHAPTER 2 SYSTEM OPERATIONS
Introduction .............................................................................................................. 2-1
Review of Historical Data ................................................................................. 2-2
Physical System Data ........................................................................................... 2-3
Revenues and Expenditures .............................................................................. 2-3
Discharge Loadings ............................................................................................... 2-5
Equivalent Dwelling Units (EDUs) ............................................................... 2-8
Existing Rates .......................................................................................................... 2-11
CHAPTER 3 POLICY CONSIDERATIONS
Rate Structure .......................................................................................................... 3-1
Reserves Management ............................................................................................ 3-3
Industrial Pretreatment ......................................................................................... 3-3
CHAPTER4 PROJECTION OF DATA AND RATE
DETERMINATION
System Data ................................................................................................................
Discharge Loadings .................................................................................................
Fiscal Data ..................................................................................................................
Reserves ...................................................................................................................
Rate Determination .................................................................................................
Allocation of Revenues and Expenses ...........................................................
Rates ...................................................................................................................
Comparison of New and Existing Charges ................................................
Lateral Installation ..................................................................................................
4-1
4-1
4-4
4-6
4-7
4-9
4-14
4-17
4-18
CHAPTER 5 IMPLEMENTATION
Wastewater Charges ............................................................................................... 5-1
City ................................................................................................................... 5-1
Customers ................................................................................................................... 5-2
Industrial Pretreatment ....................................................................................... 5-2
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TABLEOFCONTENTS
(contd)
CHAPTER 6 VALUATION AND DEPRECIATION
Valuation ...................................................................................................................
City Sewer System ...................................................................................................
Encina ...................................................................................................................
Asset Age and Useful Lives ...............................................................................
Depreciation ................................................................................................................
Allocation of Depreciation ..................................................................................
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APPENDIX A EXPENSING FULL HISTORIC DEPRECIATION ._......
APPENDIX B EFFECT OF ADDING STAFF ................................................
APPENDIX C DATA ON LARGE VOLUME USERS ................................
APPENDIX D SWRCB FORMS .................................................................................
Page No.
6- 1
6-2
6-2
6-5
6-6
6-9
A- 1
B- 1
c- 1
D- 1
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LIST OF TABLES
Number Page No .
2-1 Physical System Data: Wastewater Generated and
Number of Connections ....................................................................... 2-4
2-2 Historical Revenues ............................................................................... 2-6
2-3 Historical Expenditures ....................................................................... 2-6
2-4 Typical Wastewater Strengths by User Classification .......... 2-7
2-5 Commercial. Industrial and Institutional Users ...................... 2-9
2-6 Calculation of Equivalent Dwelling Units (EDUs) ............... 2-10
2-7 Existing Rate Structure ........................................................................ 2-11
4- 1
4-2
4-3
4-4
' 4-5
4-6
4-7
4-8
4-9
4-10
4-1 1
4-12
4-13
4-14
Physical System Data: Projected Wastewater and
Number of Connections .......................................................................
Total Discharge Data ............................................................................
Projected Expenditures .........................................................................
Capital Improvements ...........................................................................
Pro~ect~on of Reserves
Sources and Applications of Funds ...............................................
Allocation of Capacity at Encina ...................................................
Allocation of Sources and Applications of Funds .................
Unit Costs ....................................................................................................
Total Wastewater Flows and Strengths ........................................
Total Annual Revenues from Service Charges ........................
Calculated User Rates ...........................................................................
Projected Wastewater Rates ...............................................................
Comparison of Charges .......................................................................
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4-2
4-3
4-5
4-5
4-7
4-8
4-10
4-11
4-11
4-12
4-13
4-15
4-16
4-17
6-1 Replacement Cost New for Assets in City of Carisbad
Sewer System ............................................................................................. 6-3
6-2 Historic Value of Encina Assets ...................................................... 6-4
6-3 Average Useful Lives for Sewer System Assets ...................... 6-5
6-4 . Summary of System assets at Encina and in City .................. 6-7
6-5 Allocation of Encina Assets ............................................................... 6-10
6-6 Allocation of Depreciation of Sewer System Assets at
Encina and in City ................................................................................. 6-11
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CHAPTER 1
EXECUTIVE SUMMARY
The objective of this report is to examine the financial position and value the assets
of the of the sewer enterprise of the City of Carlsbad (City). The review of the
financial position is to culminate in a set of sewer rates that is fair and equitable
and meets regulatory guidelines.
Rates were designed to be fair and equitable, easy to administer and update and
conform to the policies of the City. Rates were determined on a cost of service
basis so that customers pay charges in proportion to the services they use. Rates
that meet these objectives may gain easier acceptance by users.
The findings and recommendations of this study are summarized below.
FINDINGS
1. The City of Carlsbad provides sewer service to 70 percent of the City’s
population. The remaining population of the City is served by Leucadia
County Water District and Vallecitos Water District. The Utilities and
Maintenance Department is responsible for sewer service in the City. The
wastewater generated is transported for treatment and disposal to the
Encina Water Pollution Control Facility (EWPCF) located in the City.
2. The City generates about 4.8 million gallons per day (mgd) wastewater at
the present time and owns treatment capacity of 6.2 mgd at EN’PCF.
However, due to continuing growth in the City, it is acquiring additional
treatment capacity of 3.15 mgd through an expansion of EWPCF currently
in progress. The City’s share of this expansion is being funded by Joint
Power Authority financing.
3. The City’s existing system of charges is based on equivalent dwelling units
(EDUs). A few customers, whose primary activity involves use of water
and very large water users, are charged on water usage as well as EDUs.
The existing charge for most customers is $7.30 per EDU per month.
Restaurants are charged $1425 per EDU per month. These rates are the
lowest in the Encina systeru.
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4. Billing for sewer service is done monthly along with water bills. This is
facilitated by the fact that the City is the water purveyor and has ready
access to the water consumption records of its customers.
5. The City’s present EDU system does not meet EPA guidelines of fairness
and equity required for grant financed facilities such as EWPCF. A more
equitable method of charging customers for sewer service is that based on
flow and strength.
6. Increasing costs of treatment and complying with more stringent regulatory
requirements will cause the City’s expenses to be increased by an estimated
44 percent the next fiscal year and six percent per year for the subseqxent
four years reviewed.
7. Encina Administrative Agency will manage and administer the
pretreatment program from FY 1990-91. In the past, this program was
administered by the County of San Diego. The City was not billed for
several years and hence these costs were not budgeted and revenues not
collected during that time. Future costs of this program will be
administered equitably.
8. The capital improvement program at Encina, the connection fees to be
charged to new customers and the related cash inflows and outflows are
covered in the City’s sewer master plan prepared by Wilson Engineering.
9. The Department’s operating and capital expansion reserves are healthy by
utility standards.
RECOMMENDATIONS
1. In order to comply with EPA regulations for fair and equitable rates, the
City must switch to a system of rates based on flow and strength.
2. We recommend six classes of customers categorized by quality of
wastewater. These are Group I-Residential, Group 11-Low Strength
Commercial, Group 111-Medium Strength Commercial, Group IV-High
Strength Commercial, Group V-Institutional and Group VI Large Volume
Users. Low strength users are those whose combined strength expressed in
terms of biochemical oxygen demand (BOD) and suspended solids (SS) is
less than 400 mg/l. This group includes car washes, offices, retail stores,
laundromats, warehouses, hospitals and convalescent homes, and indoor
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theatres. Medium strength users are those whose combined strength is at
least 400 mg/l but less than 1000 mg/l. This group includes hotels/motels
without restaurants or kitchens, service stations, shopping centers,
commercial laundries, and industrial users. High strength users are those
whose strength is 1000 mg/l or greater and include restaurants, bakeries,
food processors, supermarkets, mortuaries and hotels with restaurants.
Institutional users are schools and membership organizations like churches,
social service clubs. Large volume users are customers who use in excess of
25,000 gpd. These customers have rates set individually. based on their
strength.
3. The rates recommended for the different groups for FY 1990-91 are shown
below. Residences are flat rated at $11 per month. All other customers
pay based on their water usage, subject to a minimurn monthly charge as
shown below.
Users Unit Cost Min. Monthly 70 Rate
$/HCF ** Charge, $ Increase
Group I Residential
Group I1 Commercial
Group I11 Commercial
Group IV Commercial
Group V Institutional
Schools per ADA *
Elementary
Junior
High
Boarding
Group VI Large Volume Users
Hughes Aircraft
Beckman Micro Oper 1
Culligan
1.351
1.77 1
2.806
1.343
0.243
0.487
0.730
3.652
1.088
3.678
1.049
11.00
1 1.00
13.17
20.85
1 1.00
11.00
27.34
1 1 .oo
50
36
78
44
100
233
200
48
223
172
* ADA is average daily attendance.
** Flow is hundred cubic feet fHCFI of wastewater generally 95 percent of
metered water consumption for most customers.
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4. We recommend a deposit be collected for installation of laterals. This
deposit should be $2,500 to ensure that actual costs of installation are
recovered. On completion of the ‘job the balance, if any, should be
returned.
5. We recommend that users requiring pretreatment be categorized into classes
depending upon the quality of their wastewater, their size and the number
of inspections required per year. Part of the costs of pretreatment program
should be borne by those users in proportion to the costs incurred. These
costs should be prorated so that users are charged for a portion of the costs
each month as opposed to being charged a lump sum when the work is
actually performed. A preliminary schedule of fees is shown below. We
recommend that these fees be revised when the program is under way and
users have been categorized. Classes are defined in Chapter 5.
PRETREATMENT FEES PER MONTH
Class 1 $250
Class 2 $1 50
Class 3 $25
6. We recommend the City categorize all its commercial, industrial and
institutional customers per the classifications listed above as soon as
possible to implement the new rates.
7. We recommend that depreciation be expensed to reflect the value of assets
owned by the City. The recommended rates shown in this chapter are
based on depreciation expensed at 75 percent of that calculated on historic
cost of assets. It is recommended that depreciation be increased gradually
to 100 percent based on historic cost of assets.
8. No changes are recommended in the City’s operating reserves. A new
replacement reserve to be funded by depreciation must be created. This
will be used to finance replacements of the City’s sewer collection system.
The capital expansion reserve will continue to be funded by connection
fees.
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CHAPTER 2
WASTEWATER OPERATIONS
INRODUCTION
The City of Carlsbad (City) is a general-law city incorporated in 1952 and governed
by a five member City Council under a CounciUManager form of government. The
City provides a full range of municipal services including collection of wastewater
from 70 percent of the City area. Sewer service in this city area is provided by the
Utilities and Maintenance Department (Department). The remaining 30 percent of
the City is served by Leucadia County Water District and Vallecitos Water District.
The first sewer service in the City was provided by the Carlsbad Sanitary District
formed in 1929. During the same year, a sewage treatment plant and a system of
sewer lines covering the northwest corner of the City’s present downtown area were
constructed. By 1960 the original treatment plant was being used to capacity and
new facilities were required. The Cities of Vista and Carlsbad cooperated in
building a jointly owned facility which went into operation in 1965. All flows were
then shifted to this new facility. This facility was gradually expanded to provide
service to other agencies in the area. This facility known as the Encina Water
Pollution Control Facility (EWPCF) is now a regional wastewater treatment plant
providing service to and owned jointly by the Cities of Vista and Carlsbad, Buena
Sanitation District serving portions of Vista and County of San Diego, Vallecitos
Water District serving City of San Marcos, Leucadia County Water District serving
Carlsbad and part of City of Encinitas and Encinitas Sanitary District serving the
City of Encinitas. Since this facility is located in the City of Carlsbad, all of the
other agencies served by the plant transport wastewater through major interceptor
sewers that run through the City. The City owns or leases capacity in all of the
interceptors serving the other agencies.
The EWPCF is a full secondary treatment facility with an estimated capacity of
27.16 million gallons per day (mgd). The City owns treatment capacity of 6.2 nlgd
in the plant. The EWPCF is designed so that it can be expanded through modular
addition of units to 45 mgd. The EWPCF is currently undergoing expansion to
increase its liquid treatment capacity to 36 mgd and equivalent solids capacity to 38
mgd. The expansion is scheduled to be completed by June 1992. The EWPCF is
operated and administered by Encina Administrative Agency (EAA).
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The City also owns another treatment plant, the Lake Calavera Hills Water
Reclamation Plant. This plant was completed in 1981 and turned over to the City
for operation and maintenance. The design capacity of this plant is 1.2 mgd,
however, the plant is limited by the sewer system which has a capacity of 0.88 mgd.
The City has not operated this plant to date.
Until recently the capacity of EWPCF was estimated to be about 22.5 mgd with the
City owning 25.4 percent of this capacity or 5.72 mgd. The City’s wastewater
generation until recently was believed to have been 5.79 mgd thus exceeding its
purchased capacity in EWPCF. To tide over this shortfall in capacity, the City
leased capacity from the City of Vista in September 1988. However, a recently
implemented automatic metering system showed that the City’s flows were lower at
4.8 mgd.
Growth in the City over the next few years will cause the City’s demand on EWPCF
to exceed its owned capacity and for this reason the City is in the process of
acquiring additional capacity by expansion of the plant (Phase IV expansion).
Carlsbad’s share in this project is 23.3 percent. In March 1989, the City approved
the Encina Financing Joint Powers Authority Agreement (EFJPA) to facilitate
financing of the expansion of the facility. The EFJPA includes the Cities of
Carlsbad and Vista, Leucadia County Water District (CWD) and Buena Sanitation
District. In June 1989, the City and EFJPA entered into an installment purchase
agreement for the City to acquire additional capacity in EWPCF. In August 1989,
the EFJPA issued Wastewater Revenue Bonds Series A in the amount of $33.5
million. The City’s share in the JPA is approximately 37.88 percent. The debt
service on the bonds issued is to be covered by connection fees from new customers,
The City has agreed to maintain and collect rates and charges so that net revenues
sufficient to pay an amount equal to 110 percent of the annual debt service are
available each year. Gross revenues for purposes of the above include all charges,
connection fees, interest income and standby charges. Net revenues are gross
revenues less operations and maintenance (O&M) costs of the enterprise.
The City last revised its sewer service rates in May 1989. The existing rate
structure is based on equivalent dwelling units (EDUs). A few customers using
large quantities of water are charged on the basis of water usage.
REVIEW OF HISTORICAL DATA
In order to make projections of wastewater flows, customers, revenues and expenses
in future years, it is good practice to review the same for previous years. This
provides a perspective of where we have been and where we are going and serves as
a basis for making projections for future years.
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Physical System Data
EAA reported the City’s flows as shown in Table 2-1. These flows were back
calculated by subtracting flow of other agencies from the total flow into EWPCF.
Using a new flow measuring system, flow for 1989-90 was determined to be 4.8 mgd.
The flows for previous years were corrected based on EDUs reported for those
years. It can be seen from Table 2-1 that the City’s corrected wastewater generation
has increased at a compound rate of eleven percent per year between 1985-86 and
1988-89.
Strength of the City’s wastewater was obtained from reports generated by EAA.
Strength is characterized by biochemical oxygen demand (BOD) and suspended
solids (SS). SS appear to be normal but BOD appears to be high.
The present population of the whole City is estimated to be 65,000. 70 percent of
this population is served by the City’s sewer system. The population of the City as
a whole has increased by just under 5.5 percent per year from 1985-86 to 1988-89.
The number of EDUs has increased just over eleven percent per year in the same
time period. If we make the assumption that growth throughout the City has been
uniform then wastewater generation has outstripped population growth implying
that commercial and industrial wastewater generation is increasing faster than
residential wastewater generation.
In the past one EDU was expected to generate 220 gallons per day (gpd). This was
based on the higher reported flows. Using the measured 4.8 mgd and 24,522 EDUs
for October 1989 and 0.5 mgd for users whose charges are based on flow results in a
calculated flow of 175 gpd per EDU. The EDUs shown in Table 2-1 take into
account users whose charges are based on water consumption. These users include
laundromats, car washes and large volume users.
Three large volume users have been identified: Hughes Aircraft, Beckman Micro
Operators and Culligan Water Conditioner. A large volume user is defined as one
which uses more than 25,000 gpd. These users are identified individually because
State Water Resources Control Board (SWRCB) which oversees revenue programs for
grant funded agencies requires the charges for large users to be calculated
separately.
Revenues and Expenditures
The main sources of revenues are service charges, connection fees and investment
income based on substantial reserves the Department has accumulated. Other
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TABLE 2-1
PHYSICAL SYSTEM DATA: WASTEUATER GENERATED AND NUMBER OF CONNECTIONS
Actual Actua l Actual Actual Expected
1985-86 1986-87 1987-88 1988-89 1989-90
Wastewater Flow, mgd
Reported *
Corrected ** 3 -94 4.72 5.23 5.73 5 .a3
3.18 3.81 4.23 4.70 4.80
Average BOD, mg/l !!
Average SS, mg/l !!
NA 229 266 263 26 1
NA 187 227 23 1 202
No. of EDUs [4,71 17,910 21,450 23 , 786 26,410 26,995
Population (whole City) f4,71 51,390 56,400 60,460 62,030 64,827
Population Served by City *** 35,973 39,480 42,322 43,421 45,379
* Reported flows were originally derived by measuring flows from
other agencies and back calculating Carlsbad’s flows.
** In late 1989 Carlsbad’s flows uere measured and found to be lower.
The flows for previous years uere corrected by using the same flow
per EDU for each of the previous years.
*** Assumed that 70% of the City’s population is served by City.
!! Obtained from EUPCF revenue program for the year shown.
Whole city population for 1988-89 was obtained from Department of Finance Report E-5.
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service fees and miscellaneous income make up the total revenue stream. Revenues
for the past four 'years are shown in Table 2-2. During the last four years, service
charge revenues increased at a compound rate of over 9 percent per year. It should
be noted that from 1986-87, connection fee income was not reported as part of
operating income due to accounting changes.
Table 2-3 shows the expenses of the Department for the last four years. Since the
Department is primarily responsible for collection of the wastewater, expenses
excluding treatment and disposal are related to operations and maintenance of the
sewers. The major operating expenses are personal services, repairs and
depreciation. An analysis of the expenses in Table 2-3 shows that expenses related
to personnel services has increased steadily over the last few years. The average
rate of increase between FY 1988-89 and 1985-86 was 19 percent per year. This
relatively large increase is due to the large growth rate in the community. Repairs
and maintenance expenses vary from year to year depending upon the problems
encountered. Bad debt showed a marked increase €or the year 1987-88 due to
changes in accounting practice. Depreciation was refigured in 1988-89 and the
larger expense resulted from a more realistic recognition of asset value.
Costs of treatment and disposal are shown separately and include rental charges on
capacity owned as well as operational costs related to total flow from the City and
the total flow into the plant. Costs of power, chemicals, maintenance and other
sewage treatment, solids handling and disposal costs are proportional to flow. Other
expenses such as costs of insurance, administration, laboratory, plant operations,
services, and maintenance and other sewage collection and treatment, solids
handling and effluent disposal costs which are incurred irrespective of the amount
of wastewater treated are based on capacity owned in the treatment plant.
Treatment expenses vary from year to year but the trend is upwards. This results
from increases in wastewater generated and treated as well as inflation and more
regulatory requirements related to a cleaner environment.
Discharge Loadings
Wastewater is characterized by flow, biochemical oxygen demand (BOD), and
suspended solids (SS). One of the purposes of wastewater treatment is to reduce the
strength, i.e., BOD and SS, to acceptable levels. The strength of wastewater can vary
depending upon the type of user. Published data are available on the typical
quality of wastewater from different types of commercial and industrial
establishments, Table 2-4 summarizes the discharge loadings of residential and
commercial users. These data are from published sampling compilations from the
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TABLE 2-2
HISTORICAL REVENUES
Actual Actual Actual Actual Expected
1985-86 1986-87 1987-88 1988-89 1989-90
Service Charges $1,607,82a 31,747,677 $1,934,262 $2,096,997 $2,288,350
Connection Fees COS1 2,544,325 1,885.685 1,090,154 681,846 731,250
Other Service Fees 24,372 25,310 31,084 15,517 20,000
Miscellaneous 8,380 5,782 0 25,951 10,000
Subtotal $4,184,905 $3,664,454 $3,055,500 $2,820,311 $3,049,600
Other Revenues
Interest 673,137 679,560 796,864 839,345 800,000
TOTAL REVENUES $4,858,042 $4,344,014 $3,852,364 83,659,656 83,849,600
TABLE 2-3
HISTORICAL EXPENDITURES
Actual Actual Actual Actual Budgeted
1985-86 1986-87 1987-88 1988-89 1989-90
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Personal Services 3314,700 8397,404 $425,877 $530,948 8371,693
Office Expenses 3,m 5 , 633 6,029 55,695 76,900
Repairs and Maintenance 147,609 222,188 308,944 154,275 336,100
Insurance 7,900 9,410 12,734 12,732 15,300
Bad Debt 2,193 15,289 150,639 15,000
Depreciation 127,872 139,697 126,062 488,990 105,000
Professional Services 368,369
Subtotal Collection Expenses 860L.017 $789,621 $1,030,285 $1,257,640 $1,273,362
Treatment & Disposal 812,626 860,028 1,071,520 1,392,832 1,415,316
Other Professional Services 0 175,225 (193,098) (280,998) 0
TOTAL OPERATING $1,416,673 $1,824,874 81,908,707 82,369,474 82,688,678
Capital Expenditures 621,063 525,959 161,727 2,301,346 16,200
TOTAL EXPENDITURES 32,037,736 $2,350,833 $2,070,434 $4,670,820 $2,704,878
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TABLE 2-4
TYPICAL WASTERWATER STRENGTHS BY USER CLASSIFICATION **
Users Classification BOD+SS SS BOD
mgfl Number mg/l mgfl
Group I Residential
Typical Domestic 200 I 200 I 400 I 0
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Group VI Large Volume Users
Hughes 93 52 41 6.1
Beckman Micro Oper 1
51 5 Culligan
6.2 2,683 60 1 2.082 56 6.3
** Wastewater strength data is adapted from State Water Resources Control Board's
(SWRCB) "Revenue Program Guidelines for Wastewater Agencies", and from data
obtained from County Sanitation Districts of Los Angeles County (LACSD).
For large volume users, strength is from measured data.
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City of San Jose, East Bay MUD, and Sacramento County Regional Sanitation
District and County Sanitation Districts of Los Angeles County (LACSD). State
Water Resources Control Board (SWRCB), which oversees rates for all grant funded
agencies in the state, considers these data representative of most cities in California.
To simplify administration with a few rates, users are divided into groups based on
the strength of their wastewater. Group I consists of residential users. Group I1
Commercial consists of commercial users whose combined ROD and SS strength is
less than or equal to 400 mg/l but excluding Group V users. Group 111 Commercial
users have a combined strength of more than 400 mg/l but less than 1,000 mg/l.
Group IV Commercial users combined strength exceeds 1,000 mg/l. Group V
Institutional users are membership organizations, social services and schools. Group
VI large volume users are those whose water usage exceeds 25,000 gallons per day
(gpd). These users need to be identified individually and charges determined
individually per regulatory guidelines. There are three large volume users in the
city--Hughes Aircraft, Culligan and Beckman. Wastewater strength for Hughes and
Culligan was obtained from actual measurements included in Appendix C.
Beckman’s wastewater strength was obtained from staff and is the average strength
over a fourteen month period.
A list of commercial and industrial accounts with wastewater generation
consumption in the City’s sewer service area is show in Table 2-5. Wastewater
generated was assumed to be 95 percent of water usage for most users. The only
exception was Hughes with 80 percent wastewater generation based on actual data
obtained from them. Loadings of BOD and SS were computed using the strengths
shown in Table 2-4.
Equivalent Dwelling Units (EDUs)
The Department’s existing rate structure is based on equivalent dwelling units
(EDUs). A single family residential or multifamily unit is considered to be one
EDU. For other users EDUs are computed by estimating the amount of flow
generated and comparing that with the average residential flow. The system is
based on using 220 gpd per EDU. In the determination of EDUs consideration is
not given to the strength of the wastewater generated by the user. A commercial or
industrial user’s EDUs are calculated based on building area. A building area of
1,800 sq ft is considered equivalent to one EDU. The method of determining EDUs
for various types of business establishments is shown in Table 2-6..
The City’s EDU system takes into account various kinds of users. The advantage of
the EDU system is its relative simplicity. EDUs are determined initially and then
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TABLE 2-5
COMMERCIAL, INDUSTRIAL AND INSTITUTIONAL USERS
Name Number of EDUs ss BOD 1989 Flow
hcflyr Method
SWRCB Existing lblyr lblyr
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Hospitals, Convalescent Homes 0 0 0) 0 0
Indoor Theatre 1,870 2,217 2,450 I 19 20
I I I Group IV Commercial
Hotels-Motels (w restaurants) 0 0 0 0 0
BakerieslFood Processors 5,728
6,064 Supermarkets
108 59 21,444 35,740
835 512 164,950 274,917 44,057 Restaurants
0 0 0 0 0 Mortuary
109 10 30,271 30,271
Group V Institutional
Membership Organizations
349 255 223 19 29,664 36,568 Schools
184 1 14 9,726 15.804 19,483
Social Services 70 41 3,681 5.982 1.374
Membership Organizations
349 255 223 19 1 29,664 36,568 Schools
184 1 14 9,726 1 15.804 19,483
~~ 5.982 70 41 3,681
Group VI Large Volume Users
Hughes
106 3 4,058 358 12,75 1 Culligan
586 64 78,151 270,681 20,834 Beckman Micro Oper 1
942 47 35,186 28,012 109.49 1
1 TOTAL
5,453 adjust for water billed cut
608,192 1,135,772 756,556 4,032 6,925
TOTAL PER DAY 1.25 3,112 2,073
(mgd) Wd) Wd)
[ Calculated EDU based on 183 gpd/ EDU.
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TABLE 2-6
EXISTING CALCULATION OF EQUIVALENT DUELLING UNITS (EDUS)
Description Equivalent Duelling Units
Single Family Residence 1 .oo
Each Apartment in Apartment House 1 .oo
Each Space of Mobile Home/Trailer Park 1 .oo
Lodginghouse, Boardinghouse, Hotel, Motel
Without cooking facilities 0.60 per room
With cooking facilities 1.00 per room
Churches, Theater, Auditoriums, per unit
or fraction thereof of seating capacity 1.33
(one unit is 150 persons)
Restaurants
Non Seating
Seating
Delicatessen or fast food using
Disposable tableuare
Non Seating
Seating
Automobile Service Stations:
upto four gasoline pumps
2.67
2.67 plus 1.00 for each 7 seats
or fraction thereof
2.67
2.67 plus 1.00 for each 21 seats
or fraction thereof
2.00
More than four gasoline pumps 3.00
Self-service Laundaries, per washer 0.75
Office space in industrial or comnercial Divide gross floor area of
establishments and uarehouses building in square feet by 1800
Schools
Elementary, for 60 pupils or fraction 1 .oo
Junior, for 50 pupils or fraction 1 .oo
High, for 30 pupils or fraction 1 .oo
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remain fixed. User charges remain constant from month to month so that users are
aware of their monthly charges and the Department is assured of a stable source of
revenues. The disadvantage of the EDU system is that commercial users are not
distinguished by strength and quantity of wastewater generated. This results in
inequity. Also administration for changes in the EDUs resulting from changes in
customer activity are difficult to track.
Existing Rates
The existing rates for different customers are different based on the type of
facility. The existing rates became effective May 1989 and are shown in Table 2-7.
Charges for most users are based on EDUs. Users such as laundromats and car
washes whose primary activity involves use of water are charged on the basis of
flow. In addition large volume users’ charges also require flows and one user’s
charges need SS strength and flow and is hand calculated every month.
TABLE 2-7
EXISTING RATE STRUCTURE
Account Type Monthly Service
Charge in 1989-90
SFR
MFR
Hotel/Motel <IO units
Additional units
Kitchen Units
Restaurant, Bakeries
Car Wash, Laundry
Off ice, Trai iers
Schools
Elementary, per 60 students
Junior, per 50 students
High, per 30 students
Comnerc i a 1
For High SS Generators
$7.30
$7.30
$7.30 + $2.90 for each addn. unit
82.20 per unit for more than 10 units
$7.30 per unit
$14.25 per EDU
$7.30 +$0.56 per hcf
$7.30
$7.30
$7.30
$7.30
$7.30 per EDU
0.72*(180+ss/360)
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CHAPTER 3
POLICY CONSIDERATIONS
As a condition of receiving federal and state grant funds for the construction of
wastewater treatment works, wastewater service agencies must devise and adopt
an equitable system of rates and user charges pursuant to criteria contained in a
series of regulations developed by the EPA and the State Water Resources
Control Board (SWRCB). The revenue guidelines are applicable to all agencies
sharing a regional wastewater treatment facility.
Regulations of the SWRCB require that users be charged equitably for the use of
the wastewater system, taking into account volume and strength of wastewater
discharges of users. The cost allocation philosophy which determines rates is
specified in the SWRCB guidelines and essentially determines the rates once the
revenue requirements are identified.
RATE STRUCTURE
Before setting rates the existing rate structure should be examined in terms of
equity and simplicity in administration.
The existing EDU system is based on building area for non residential,
commercial customers. The calculation of EDU’s for different types of
customers was shown in Table 2-6.
The City’s EDU system is quite comprehensive covering a wide range of‘
businesses and seems to work reasonably well. The advantages of using EDUs lie
in simplicity of calculation once a formula has been determined. User charges
remain constant from month to month maintaining a stable source of revenues.
The disadvantages of EDUs is that it does not take into account changes in use
patterns with any type of user. It is difficult to keep the information on the
parameters required to determine the EDUs updated. Keeping track of growth
or, in some cases, decline in existing activity is difficult. For example, if a
restaurant expands and adds a few more seats, there is a good chance the
Department may not be apprised of the change and hence the EDUs for {hat
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user may not change. Also, EDUs do not take into account the usage variation
between similar customers. For example, two restaurants with the same seating
capacity would be charged the same monthly amount based on EDUs. However,
if one restaurants was successful and generated much more wastewater than the
other one, it would not pay in proportion to the amount of wastewater it
generated. Some other disadvantages of EDUs including inequity and inability
to consider strength appropriately were discussed in the previous chapter.
An important consideration in retaining the EDU system would be acceptability
to the SWRCB. Using SWRCB criteria, EDUs for all the commercial and
industrial user groups were determined based on the actual residential flow and
strength determined for the City’s residential users. The existing EDU system
was found to have 25 percent less EDUs than that calculated by the SWRCB
method as shown by comparison of the last two columns in Table 2-5. The total
number of existing EDUs is 4,032 and that calculated by the SWRCB method and
adjusted for water billed customers is 5,453. It is believed that SWRCB would
consider this discrepancy to be inequitable and would not accept a revenue
program based on the existing EDU system. The alternative is to modify the
EDU system or switch to a flow based system. The City is the water provider
and bills on a monthly basis. Billing based on flow and strength provides a more
equitable system of charges. Implementation of such a systetn would be simpler
than modifying the EDU system and therefore a flow and strength based system
was developed.
Most commercial and industrial users generate wastewater roughly equal to the
amount of water use. Wastewater generation equal to 95 percent of water use is
assumed for these users. Water usage for residential customers, on the other
hand, varies widely depending on usage for irrigation. An average wastewater
flow is used for residential customers since yard watering practices vary widely
and administration of a flow based program for residences can become a
problem because of complaints or requests for changes in individual cases for a
variety of reasons. Therefore it is recommended that residential charges be
fixed from month to month and provide a stable source of income. It should be
noted that residential service charges account for 75 percent of the total service
charges to be collected.
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RESERVES MANAGEMENT
Utilities are encouraged to maintain adequate reserves as part of risk
management to provide short term capital in case of emergencies as well as to
provide working capital. There are generally four reserve funds: operating,
replacement, capital and debt. Operating and capital reserves are not mandated
by SWRCB guidelines but are considered necessary for prudent fiscal
management. Debt reserves are required.if there is outstanding debt in the form
of bonds. Replacement reserves are discussed below.
The replacement reserve fund is required. SWRCB guidelines require
replacement costs to be funded through user charges. Replacement is defined as
expenses for obtaining and installing equipment such as pumps, motors, controls
etc. which are required to maintain the capacity and performance of the c;tyys
wastewater facilities. Replacement costs could be based on a five year planning
cycle, with the average cost over five years being recovered through annual user
charges. This is the minimum allowed by SWRCB. An alternative provided by
SWRCB is using a straight line depreciation (based on current costs) of the assets
excluding structural facilities such as buildings, ponds and pipes etc.
The City does not have a replacement reserve Fund at the present time. We
recommend that such a fund be created and funded by revenues from
depreciation. Depreciation is discussed in Chapter 6. Capital costs in the City
not related to expansion of the system may be funded by Funds from this
reserve.
Details on fund balances in the various reserves is shown in the following
chapter.
INDUSTRIAL PRETREATMENT
The industrial pretreatment program involves the monitoring of commercial and
industrial establishments to ensure that wastewater generated and treated meets
criteria of discharge to protect treatment plant sa that sludge and effluent
disposal limitation can be met consistently and public health and safety
protected. Some users may generate wastewater that contain pollutants at a
strength not acceptable without prior pretreatment. Such users need industrial
waste permits to ensure that the quality of their wastewater is acceptable. These
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users are required to pretreat their wastewater before it enters the City’s sewers.
The complexity and time and therefore the costs incurred to monitor varies from
user to user depending upon the type and concentration of pollutants present and
the quantity of wastewater generated. Users should therefore be categorized into
groups depending upon the time involved and complexity of this monitoring
process.
In past years industrial pretreatment was performed by the County of San Diego
and EAA and charges were not collected from any users as the County delayed
billing the City for several years. However, this has changed now. Industrial
pretreatment inspection and permitting will be performed exclusively by the
EAA. This will mean a closer control of the establishments in Carlsbad and
annual bills to the City.
Pretreatment costs are normally allocated to users requiring the service in
proportion to the complexity and frequency of monitoring required. This is in
line with the rest of the revenue program which is based on allocating costs
proportional to service provided. Applying this same concept here dictates that
the costs should be borne by the users that require this service and that other
users who do not avail of this service should not be required to share in these
costs. However, at the present time, users requiring this service have not been
fully identified. The total cost of the industrial pretreatment program cannot be
spread on these known users alone as the costs would be very high and unfair.
An argument may be made that policing of establishments, even those not
requiring pretreatment provides benefits to the whole community since the
safety and health of all the citizens is protected by this enforcement action.
This line of reasoning allows the costs of this program to be recovered partially
or fully from all the users in Carlsbad. Taking into consideration the above
facts part of the costs of this program are spread on all users and part from the
users availing this service.
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CHAPTER 4
PROJECTION OF DATA AND RATE DETERMINATION
An important part of a rate study is to make projections which are most likely to
present the true picture For the next Few years. This results in a plan which will
provide adequate revenues for financial stability of the enterprise. It is difficult to
make accurate projections for more than a few years as the accuracy of the data
fall off for time horizons further away from the present. For this reason it is
appropriate to revise and update all projections beyond the first year.
SYSTEM DATA
Table 4-1 shows projections of EDUs, population, and wastewater generated, for a
planning period of Five years. The total EDUs are from the report titled Capacity
Fee Update to the December 1987 Master Plan of Seweraee dated March 1390
prepared by Wilson Engineering. Only EDUs for the City area served by the
Department are included here. The EDUs increase of 1090 per year was obtained
from the above referenced report.
In addition to the total EDUs, existing residential EDUs tabulated from the City’s
utility rates summary report are used in projections. Projection for future years are
based on assuming 70 percent of the total increase in EDUs for the residential
sector and the reminder for the commercial and industrial sector. Commercial and
industrial EDUs are projected from the EDUs tabulated in Table 2-5. Commercial
and industrial EDUs do not include the EDUs for users charged on basis of flow.
Population for the sewer service area is based on the existing population serviced
and increase in the residential EDUs. A population density of 2.41 per dwelling
unit is used based on Report E-5 of the State Department of Finance.
Wastewater generation is projected to increase by the increase in total EDUs.
Discharge Loadings
Commercial and industrial flow has been tabulated using a percentage of actual
water use (generally 95 percent). A significant quantity of residential flow is used
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TABLE 4-1
PHYSICAL SYSTEM DATA: PROJECTED UASTEUATER AND NUMBER OF CONNECTIONS
Projected Projected Projected Projected Projected
1990-91 1991-92 1992-93 1993-94 1994-95
Total EDU from on Master Plan# 28,085 29,175 30,265 31,355 32,445
Increase in EDU from Prev. Yr. 1,090 1,090 1,090 1,090 1,090
Residential EDUs ** 17820+763 18,583 19,346 20,109 20,872 21,635
Comnercial and Industrial EDUs 4,359 4,686 5,013 5,340 5,667
Population Serviced * 47,218 49,057 50,895 52,734 54,573
City Population 67,454 70,081 72,708 75,335 77,962
Wastewater Generated, mgd 4.994 5.188 5 -381 5.575 5.769
# Total EDUs include comnercial and industrial accounts that are charged
on the basis of flow. These include laundromats, car washes etc.
* Residential population density of 2.41 (Report E-5 Department of Finance).
** Residential EDUs for 90-91 are based on Utility Rates Sumnary Report, Jan 31,1990.
70 percent of the increase in EOU is assumed to be in residential sector.
*** Wastewater generated is projected based on EDUs projected in master plan and flows
of previous year.
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for irrigation and this flow can vary considerably from user to user. To determine
the quantity of wastewater discharged by the residential sector the total flow, BOD,
and SS generated in the City is reduced by the corresponding amounts generated by
the commercial and industrial sectors and by infiltration and inflow (I&I). This
method eliminates inequities due to yard watering practices among residential users.
I&I was estimated to be five percent of the City’s total flow. Strength of the I&I
was assumed to be 0 and 50 mg/l BOD and SS respectively. Strength of the City’s
wastewater was obtained from EAA. The strength reported by EAA varies from
quarter to quarter and year to year. The average values for the last four years, 260
mg/l and 220 mg/l for BOD and SS respectively, were used here. The flows and
strengths from the different sectors are summarized in Table 4-2 below.
TABLE 4-2
TOTAL DISCHARGE DATA
1990-9 1
Item Quantity BOD ss
(mgd) (lb/d) (lb/d)
Total Commercial 1.347 3,364 2,241
Infdtration & Inflow * 0.250 0 104
Residential **
Total Flow ***
3.397 7,465 6,818
4.994 10,829 9,163
Check Residential 72 264 24 1
(assumes 47218 people) (gal/per) (mg/l) (mdl)
* I/I flow is assumed to be 5 percent of total flow,
BOD assumed to be 0 mg/1, SS assumed to be 50 mg/l.
** Residential figures equal the totals shown less the figures
for commercial and I/I.
*** Strength of City’s wastewater is assumed to be
260 mgll BOD and 220 mgil SS.
Accountable flow, strength 4.744 10,829 9,059
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The above analysis resulted in a wastewater generated per capita of 72 gallons per
day (gpd) and concentration of 264 and 241 mg/l of BOD and SS respectively as
shown in Table 4-2. Flow is in the lower range of acceptable limits but compares
quite well with the 70 gpd used by the City of San Diego. BOD and SS
concentrations are on the higher side specially the BOD. As the revenue program is
implemented, updating flow and strength data on users may help increase data
accuracy.
FISCAL DATA
Expenses of the wastewater department are projected in Table 4-3. Projections for
1990-91 are based on budgeted costs. Increases are expected in all costs due to
growth in user base and inflation. Inflation was assumed to be five percent. All
costs for future years are inflated by five percent plus a factor to account for
growth in number of users. Each line item can be inflated separately. A major
increase is projected in depreciation expense. In past years depreciation allowance
was insufficient and not representative of the assets in the system. Depreciation has
been increased for FY 90-91, however, it still does not represent IO0 percent
recovery. Depreciation is projected to increase at a faster rate of ten percent to
increase recovery. Depreciation is discussed in Chapter 6. Pretreatment costs show
on the expense statement for the first time. Treatment and disposal costs are from
figures provided by EAA for 1990-91. There is a big increase in costs from Encina
to cover larger flows as also for a larger ownership in a larger facility and to
comply with more regulatory requirements. Other costs which are being accounted
for include costs of operation of the Buena Vista and Agua Hedionda Pump Stations
as well as flow monitoring program. As the City continues to grow a larger staff is
required to maintain the system. However, budget For additional staff was not
approved for FY 1990-91. An option is provided here with increases in budget
restricted to inflation shown in the main report and additional increases in costs
due to larger staff being shown in Appendix A.
In the next fiscal year there is another major expense that will appear for a full
year for the first time. This is the debt service cost for financing of expansion
capacity at EWPCF.
Capital expenditures related to the City’s sewer system are shown in Table 4-4.
Phase IV capital expenses are covered in the master plan. There are some capital
costs at Encina which are not part of the Phase IV expansion. These include
building improvements and acquisitions for the existing plant. Another major.
expense at Encina, solids management, has been covered under the master plan
financing and is not shown here.
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TABLE 4-3
PROJECTED EXPENDITURES
Projected Projected Projected Projected Projected Escalation
1990-91 1991-92 1992-93 1993-94 1994-95 Rate
Collection System
Personal Services
Off ice Expenses
Repairs and Maintenance
Insurance
Bad Debt
Miscellaneous
Depreciation
Professional Services
$408,300
65,500
427,150
16,050
15,750
10,000
574,425
288,900
$445,354
71 ,444
465,914
16,853
16,538
10,000
631,868
303,345
$485,092
77,819
507,487
17,695
17,364
10,000
695,054
318,512
$527,691
84,653
552,053
18,580
18,233
10,000
764,560
334,438
$573,337
91,975
599, 806
19,509
19,144
10,000
841,016
351,160
Subtotal Collection Expenses $1,806,075 $1,961,315 82,129,025 $2,310,207 82,505,947
Treatment & Disposal 1,759,021 1,918,654 2,089,854 2,273,376 2,470,026
Pretreatment Program 70,645 74,177 77, 886 81,780 85,869
TOTAL OPERATING $3,635,741 $3,954,147 $4,296,764 $4,665,363 $5,061,843
Debt Service to JPA 844,452 844,452 844,452 1,119,082 1,117,481
Capital Expenditures-City 198,400 187,000 187,000 487,000 487,000
Capital Expenditures-Encina 75,710 75,000 75,000 75,000 75,000
TOTAL EXPENDITURES $4,754,303 $5,060,598 $5,403,216 $6,346,445 86,741,324
5.00%
5 .OO%
5.00%
5.00%
5.00%
10.00%
5 .OO%
5.005
5.007
TABLE 4-4
CAPITAL IMPROVEMENTS
Projected Projected Projected Projected Projected TOTAL
1990-91 1991-92 1992-93 1993-94 1994-95
~
Buena/San Marcos Interceptor $0 $0 $0 $100,000 $100,000 8200,00c
N. Batiquitos Lift Station 167,000 167,000 167,000 167,000 167,000 835,OOC
Vista-Carlsbad Interceptor 0 0 0 200,000 200,000 400,OOC
Sewer Monitoring 20,000 20,000 20,000 20,000 20,000 100, oot
TOTAL $198,400 $187,000 m7,ooo $487,000 $487,000 $1,535,00(
Capital Cost at Encina 75,710 75,000 75,000 75,000 75,000 375,71(
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Reserves
Prudent fiscal management requires that reserve funds be established as part of risk
management to provide short term capital in case of emergencies as well as to
provide working capital. The different reserve funds were enumerated in the
previous chapter. These are discussed below.
Operating Reserves. Operating reserves may be used to meet ongoing cash flow
requirements as well as emergency requirements. A balance in this fund of between
10-50 percent of annual operating expenses is considered normal in this business.
The Department has a healthy operating reserve balance as compared to the norm.
Table 4-5 shows that the balance in the first year is over 65 percent of the
operating costs of the Department. As the operating costs increase from year to
year the balance as percentage of the operating costs decreases but is still at
comfortable levels. No increases are recommended at this time for the duration of
the plan.
Capital Reserves. Capital reserves are used to expand, replace and improve the
system. A minimum balance of 50 percent of average annual capital expenditures is
considered appropriate. There are two capital reserves: expansion and replacement.
The replacement reserve will be set up now and will be funded from depreciation.
Funds may be used for capital expenses related to sewer lines and other capital
expenses incurred by the City in the maintenance of the City’s sewer system and
treatment plant. The City’s capital replacement costs for the next five years are
lower than the depreciation amount and hence a balance will accumulate. But it
should be noted that many of the City’s assets are quite .old and capital expenditures
may increase in the near future. This reserve may be drawn upon at such times.
There is another encumbered expansion capital fund for capital costs related to
purchase of capacity at EWPCF. That capital expansion reserve is funded from
connection fees and bond receipts. It has a balance of $14 million. Withdrawals
from this fund are made to finance facilities being expanded. The balance is shown
in Table 4-5 for information. More details on projects being funded and the
inflows and outflows may be obtained from the master plan referenced earlier. It
should be noted that in keeping with the requirements of AB 1600, fees in the
expansion fund should not be used for other purposes and generally need to be
expensed in five years.
Debt reserves related to the financing of Phase IV are maintained by the JPA and
are not shown here.
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TABLE 4-5
PROJECTION OF RESERVES
Projected Projected Projected Projected Projected
1990-91 1991-92 1992-93 1993-94 1994-95
Operating
At Beginning of Year $2,395,322 $2,395,322 $2,395,322 $2,395,322 $2,395,322
Additions During Year 0 0 0 0 0
At End of Year $2,395,322 $2,395,322 $2,395,322 82,395,322 82,395,322
% of Operating Expense 65.88% 60.58x 55.75% 51.34% 47.32%
Capital Replacement *
At Beginning of Year $0 8312,828 $724,176 $1,235,622 81,549,590
Additions During Year 300,315 369,868 433,054 202,560 279,016
Interest 8 % per Year 12,513 41,480 78,392 111,408 140,758
At End of Year $312,828 3724,176 $1,235,622 $1,549,590 81,969,364
% of Capital Expense 101.90% 235.89% 402.48% 504.75% 641.49%
TOTAL $2,708,150 $3,119,498 93,630,944 $3,944,912 $4,364,686
Capital Expansion **
At Beginning of Year $13,970,000 $9,430,000 $4,856,000 $3,656,000 84,333,000
* The capital replacement acoount is funded from depreciation and income from operations.
** Income from connection fees is placed in capital expansion account.
Connection fees, capital expenses and other inflows and outflows
from this account are shown in master plan.
RATE DETERMINATION
The next step in the rate making process involves determination of revenue
requirements and deficits in revenue at the existing rates. This provides a net
revenue increase required from all the users. To calculate the revenue deficit tor
each of' the years in the planning period, revenues and expenses are integrated in a
sources and applications of funds statement. Revenues from rates are projected at
the existing rates taking into account the projected growth in customers. Other
revenues such as investment earnings are also projected and net revenue' increases
required are determined.
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Transfers are made from capital replacement reservcs to reduce rate increases
required each year. Pretreatment is shown as a separate line item on both the
expense and revenue side. Debt service payments and connection fees are not shown
used in the rate determination process. It is assumed that debt service will be
covered by connection fees and related cash flows balanced in the capital expansion
reserve. It is our understanding that if connection fee; are insufficient to pay the
debt service the City's general fund will loan the amount of the payments and sewer
rates will not be effected. The sources and applications of funds, Table 4-6, show
revenue requirements increase 44 percent for the first year and over six percent
each year for the next four years.
TABLE 4-6
SWRCES AND APPLICATIONS OF FUNDS
~~~ ~~
Budgeted Projected Projected Projected Projected
1990-91 1991-92 14J2-93 1993-94 1994-95
Applications of Funds
Collection System $1,231,650
Depreciation 574,425
Treatment & Disposal 1,759,021
Pretreatment 70 , 645
Payment to JPA * 0
Capital Expenditure (Local) 198,400
Capital Expenditure (Encina) 75,710
~~ ~~~
91,329,447 $1,435,970 $1,545,647 $1,664,931
631,868 69'5,054 764,560 841,016
1,918,654 2,08?,854 2,273,376 2,470,026
74,177 77,886 81 ,780 85 , 869
0 0 0 0
187,000 187,000 487,000 487,000
75,000 75,000 75,000 75,000
TOTAL $3,909,851 $4,216,147 $4,558,764 $5,227,363 $5,623,843
"
Sources of Funds
Service Chrg 3 '90 Rates $2,372,061
Serv Chrg from Prev Yr Rate Incr.
Connection Fees * 0
Pretreatment 19,000
Other Service Fees 5,000
Interest Earnings 191,626
Miscellaneous 1,200
Transfers from Repl. Reserve 274,110
$2,464,123
1,046,856
0
30,000
5,000
191,626
1,200
262,000
$2,556,184
1,262,198
0
38,943
5,000
15 1,626
1,200
2C'2,000
92,648,246
1,503,811
0
40,890
5,000
191,626
1,200
562,000
$2,740,307
1,778,401
0
42,935
5,000
191,626
1,200
562,000
TOTAL 52,862,997 $4,000,802 $4,317,151 94,952,773 $5,321,469
"
Rev. needed from Rate Incr. 1,046,854 215,344 21.1,613 274,590 302,374
% Revenue Increase 44.13% 6.13% 6.33% 6.61% 6.69%
* Debt service, capital expenses for expansion and connect on fees are
excluded here. These are reported in CaDacity Fee Update to December 1987
Master Plan of Sewerage dated March 1990 by Wilson Engineering.
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Allocation of Expenses and Revenues
In order that costs be distributed equitably, SWRCB guidelines require expenses and
revenues of the enterprise to be allocated to different cost centers: flow, BOD, and
SS. Costs associated with the collection system such as interceptors, collectors, pump
stations, etc. are assigned to flow. Treatment and disposal costs are assigned to
flow, BOD and SS. EWPCF has allocated treatment costs to flow, BOD and SS.
Their revenue program has been approved by the SWRCB. Treatment costs were
allocated to the three costs centers using the cost breakdown provided by EWPCF.
For lack of better data, rental costs of ownership were allocated to flow and
strength based on the allocation of the new capacity to be acquired. The
determination of this allocation is shown in Table 4-7.
Capital expenses within the City’s sewer system are allocated based on the type of
projects. Projects within the City relating to sewers and collection are allocated to
flow. Capital expenses at EWPCF not related to Phase IV expansion are allocated
the same as the Phase IV expansion expenses. Phase 1V capital projects at the
EWPCF and connection fees used to meet those expenses are not shown. Debt
service aIso is not shown in the sources and applications of funds statement since
this is expected to be covered by income from connection fees. If the expected
growth and hence connection fees do not materialize, the general fund will loan the
amount of the costs of debt service so that existing users are not burdened with
these costs through sewer service charges.
Revenue sources which are not directly associated with any one cost center are
allocated on the same basis as the total of all expenses. Allocations of expenses and
revenues are shown in Table 4-8.
Revenue requirements from each cost center are thus determined and unit costs
calculated by dividing these by total flow, BOD and SS produced by the City as
shown in Table 4-9. Table 4-10 lists the flow, BOD and SS from each class of users.
Figures for residential users are from Table 4-2. Using the unit costs shown in
Table 4-9 revenues to be obtained from each class of users are calculated and shown
in Table 4-11. A sample calculation is shown below.
For office buildings:
Unit Costs Cost per year
Flow, mgd 0.370 $ 1,341/mg $181,134
BOD, lb/d 403 0.1681/lb 24,7 15
SS, lb/d 245 0.1 307/lb 1 1,680
TOTAL $2 17,529
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TABLE 4-7
ALLOCATION OF CAPACITY AT ENCINA
Equi pent cost Flow BOD ss Total
Bar Screen
Primary Clarifiers
B lower
Aeration Basins
Aeration Basins Covers
Secondary Clarifiers
DAF Thickeners
Digestors
Belt Presses
Buildings - Sludge Dewatering
Miscellaneous Buildings
Elec & Instrumentation
Sitework and Painting
Bonds & Mobilization
Outfall
Design and CMS
Contingencies
$290,000
3,692,000
142,000
2,904,000
4,856,000
3,383,000
868,000
6,089,000
1 , 058,000
2,743,000
1,666,000
1,504,000
2,654,000
799,000
6,075,000
5,845,000
3,120,000
$87,000
3,138,200
0
871,200
3,642,000
2,875,550
0
0
0
0
1,666,000
817,563
1,442,695
434,331
6,075,000
3,177,299
1 ,696,009
$0
193,830
142,000
2,032,800
1,214,000
507,450
434,000
3,0LL,500
529,000
1,371,500
0
421,770
744,268
224,065
0
1,639,127
874,949
8203,000
359,970
0
0
0
0
434,000
3,OLL.SOO
529,000
1,371,500
0
264,666
467,038
140,604
0
1,028,574
549,042
$290,000
3,692,000
142,000
2,904,000
4,856,000
3,383,000
868,000
6,089,000
1,058,000
2,743,000
1,666,000
1,504,000
2,654,000
799,000
6,075,000
5,845,000
3,120,000
$47,688,000 $25,922,847 $13,373,260 $8,391,893 847,688,000
Capacity Allocation Percentages 54.36% 28.04% 17.60% 100.00%
ALLOCATION OF TREATMENT COSTS
Allocations to
cost F LOU BOD ss
__~
Flow *
BOD *
ss *
Sludge Gas (BOD)
Ownership Share
Other Flow
$95,750
407,341
240, 873
(32,155)
907,770
135,467
TOTAL 81,755,046
* Costs of treatment reported by EAA
100.00% 0.00% 0.00%
0.00% 100.00% 0.00%
0.00% 0.00% 100.00%
0.00% 100.00% 0.00%
54.36% 28.04% 17.60%
100.00% 0.00% 0.00%
41.29% 35.88% 22.83%
Final Treatment Allocation
4-10
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I ALLOCATIONS OF SOURCES AND APPLICATIONS OF FUNDS
1990-91
I AlLocation Percentages Allocations to
FLOU BOD ss FLOU BOD ss I Appl i cat ions of Funds
Collection System lOD.OO% 0.00% 0.00% $1,231,650 $0 $0 $1
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Depreciation 68.64% 17.99% 13.3PL
Treatment & Disposal 41 29% 35.88% 22.83%
Pretreatment 100.00% 0.00% 0.00%
Payment to JPA *
Capital Expenditure (local) 100.00% 0.00% 0.00%
Capital Expenditure (Encina) 54.36% 28.04% 17.60%
1 TOTAL
Sources of Funds
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Service Chrg 6l '90 Rates
Serv Chrg from Prev Yr Rate Incr.
Connection Fees * 0.00%
Pretreatment 100.00%
Other Service Fees 68.10%
Interest Earnings 68.10%
Miscettaneous 68- 10%
@ Transfers from Repl. Reserve 68.10%
TOTAL
$394,285 $1 03,339 $76,801
726,315 631,180 401,525 $1
70,645 0 0
0 0 0
198,400 0 0
41,155 21,232 13,323
$2,662,451
68.10%
0.00% 0.00%
0.00% 0.00%
19.33% 12.5777
19.33% 12.5777
19.33% 12-57!
19.33% 12.5777
$0
19,000
3,405
130,489
817
186,658
$340,369
8 Rev. needed from Rate Incr.
% Revenue Increase
Weighted factors
$755,75 1
19.33%
$0
0
966
37,040
232
52,984
$91,222
8491,649 8:
12.57%
-
$0
0
629
24,096
25t
34,468
859,344
$2,322,082 $664,529 8432,305 B
67.92% 19.44% 12.64% 1
I TABLE 4-9
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UNIT COSTS
F Lou BOD 5s
~~ ___~ ~
Revenue Requirement $2,322,082 8664,529 $432,305
Cost Parameters 1,732 3,952,434 3,306,363
(from Table 4-2) mg t bs l bs
Unit Cost to Treat $1,341 $0.1681 $0.1307
and Convey (per mil gal) (per lb) (per Lb)
or
$1.0031
(per hcf)
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TABLE 4-10
TOTAL WASTEWATER FLOW AND STRENGTHS
1990-9 1
Users FLOW BOD
mgd Ibld
ss
lbid
t
Group I Residential
Residential 3.397 I 7,465 1 6,818
Group I1 Commercial
Softwater Service
4 1 0.004 Car Wash
0 0 O.Oo0
Office Buildings 245 403 0.370
Professional Buildings (Doctors) 7 12 0.01 1
'Laundromats 9 13 0.010
Department and Retail Stores
Warehouse
92 93 0.074
7 7 0.004 Indoor Theatre
0 0 0.000 Hospitals, Convalescent Homes
17 17 0.014
Subtotal
Group 111 Commercial
0.487 546
382 I
Hotels-Motels(w/o restaurants)
175 239 0.092 ShODDing Center
I57 102 0.068 Repair and Service Stations
5 13 0.005
I I 1 Amusement Park
Nightclub 0.000 I 01 0
I' - 0.000 I 01 0
I- I Nursery/Greenhouse 0 0 0.000
Commercial Laundry 0.012
0 0 O.Oo0 Lumber yard
418 I 408 0.120 Manufacturing
23 44
0 0
Commercial Laundry 0.012
0
418 I 408
23 [ 44
0 1 I
Subtotal 0.297 806 778
Group IV Commercial
Hotels-Motels (w restaurants)
0 0 0.000 Mortuary
91 92 0.014 Supermarkets
64 109 0.013 Bakeries (wholesale)
0 0 0.000
49 6 836 0.100 Restaurants
Subtotal 0.127 1,037 65 1
Group V Institutional
Membership Organizations 0.044 I 48 I 29
Social Services I 0.017 I 18 I II - - . . " - . . . . . -
scllools 0.083 I ~ ~~ .~
90 [ 69
Subtotal 0.143 157 I09
.~
Group VI Large Volume Users j
Hughes
11 1 0.026 Culligan
214 742 0.043 Beclynan Micro Oper 1
96 77 0.224
TOTAL 9,059 10,829 4.144
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TABLE 4-1 1
TOTAL ANNUAL REVENUES FROM SERVICE CHARGES
1990-9 1
Users TOTAL ss BOD FLOW
$ $ $ $
Group I Residential
Residential 1,662,548 I 458,083 1 325,363 I 2,445,993
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Restaurants
Subtotal 48,894 I 51,319 I 23,647 I 123,861 61,980 63,641 3 1,061 156,683
I GrouD v Institutional I I
Membership Organizations 21,622 I 2,950 I 1,394 1 25,966 -I
Social Services 8.184 I 1.117 1 528 I 9.828 I I I Schools
Subtotal 40,583 I 5,537 1 3,271 I 49,392 70,388 9.604 5,193 85.186
Group VI Large Volume Users
Hughes
13,381 53 1 60 12,790 Culligan
76,626 10.218 45,510 20,897 Beckman Micro Oper 1
119,137 4,601 4,710 109,827
TOTALS 3,419,142 432,342 664,555 2,322,245
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Rates
Having determined revenue requirements from each group of users rates for each
group can be calculated. Rates are based on the flow generated from each group of
users. For example for Group I1 Commercial users:
Total revenue requirement from all classes in Group I1 is $290,288 (Table 4-1 1).
Total wastewater flow for that group is 0.487 mgd (Table 4-10) or 238,551
hcf/year
Rate for that group is $290,288/238,551 = $1.351 per hcf
Rates for residential users are determined by taking the total revenue requirement
for the residential class and dividing by total number of residences.
The calculated rates for each group of customers is tabulated in Table 4-12.
Residential customers are flat rated at $11 per month. The unit cost per hcf is
shown for comparison purposes only. All other customers pay in proportion to the
wastewater generated based on their water usage for the month. There is a
minimum charge that is to be charged to each user as per regulatory guidelines.
This minimum charge is based on the expected flow from a residence and the
strength of that group of customers. This minimum amount is to be charged even if
no water is consumed for a given month for any reason. Thus an office using 30
hcf for a month would be charged as follows:
Charge = 30 x 0.95 x 1.351 = $38.50 (wastewater generation is 35 percent of
water use)
The same office using 5 hcf per month would pay
Charge = 5 x 0.95 x 1.351 = $ 6.42
however, since this calculated charge is less than $11 the minimum to be charged
for users in Group 11, that user would pay $11 for that month.
Charges for large volume users are determined individually using the unit rates
calculated.
Rates for the remaining years in the planning period are shown in Table 4-13.
These rates are shown for planning purposes only and should not be used to set
rates. Rates for subsequent years in the planning period may be calculated by
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TABLE 4-12
CALCULATED USER RATES
1990-91
Users Unit Cost Min. Monthly % Rate
S/hcf * Charge, S Increase
Group I Residential 1.4757 10.97 50.26%
~ ~~
Group I1 Comnercial 1.3505 10.97 35.62%
Group Ill Comnercial 1.7713 13.17 77.88%
Group IV Comrcial 2.8055 20.85 44.33%
Group V Institutional 1.3431 10.97
Schools per ADA
Elementary 0.2434 100.09%
Junior 0.4869 233 -48%
High 0.7303 200.13%
Boarding 3.6516
Group VI Large Volume Users
Hughes Aircraft 1.0881 10.97 47.52%
Beckman Micro Oper 1 3.6780 27.34 223.45%
Culligan 1 .0494 10.97 172.01%
~~~
* Flow is wastewater flow generally 95 percent of metered
water consumption for most customers.
~~~
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updating the system information such as number of customers, flows for different
commercial groups, total flows into plant, updated information on expenses and
revenues etc.
COMPARISON OF NEW AND EXISTING CHARGES
A direct comparison between the old and the new rates cannot be made for
commercial and industrial customers since the structure is different, however, it is
possible to compare charges under the new and the old system.
To determine the impact of the new rates several customers were picked randomly
from different classes and their charges compared under the new and the old rates.
The results are shown in Table 4-14. The charges vary significantly under the new
system depending upon the type of user and water usage. It should be noted that
the increase or decrease in charges is not representative of the class of that
customer.
TABLE 4-14
COMPARISON OF CHARGES FOR DIFFERENT CUSTOMERS
Establishment EDUs Annual Usage Old Charge New Charge Increase
Residential (1) 1 7.30 11 .oo 50.26%
Office (11) 6 396 43.80 42.34 -3.34%
Retail (11) 2 250 14.60 26.73 83. on
Gas Station (111) 2 379 14.60 53.15 264.01%
Industrial (111) 7 3,010 51.10 422.08 725.99%
Restaurant (IV) 24 2,293 342.00 509.28 48.91%
Church (V) 16 71 2 116.80 75.71 -35.18%
Group classifications are shown in brackets.
Residential charges calculated here still compare very favorably with those of other
agencies in the area as shown below for residential customers in August 1990.
Carlsbad $1 1 .oo
Buena Sanitation District
Cardiff 20.53
Solano Beach 18.75
Encinitas Sanitary District 10.00
Leucadia County Water District 16.70
Vista 12.75
-..
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LATERAL INSTALLATION
The City’s present charges for installation of laterals are inadequate to recover its
costs. The present charges of $690 and $810 for 4 and 6-inch meters have not been
updated for several years. To ensure fair recovery of costs installed, we reviewed
work orders for installation of laterals covering a period from July 1989 to April
1990. The costs of installation varied from $1,300 to $2,250 depending upon size
and site location. In order to ensure adequate recovery of costs we recommend that
a deposit of $2,500 be established for installation of laterals and that the actual
costs incurred be charged for new installations. The excess deposit over costs
incurred should be returned after completion of the job.
4-18
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CHAPTER 5
IMPLEMENTATION
WASTEWATER CHARGES
The City will be changing its billing system from an EDU based system to a more
equitable flow based system. This involves changes to the City’s database and also
education of customers accustomed to paying sewer bills based on EDU. To smooth
the transition and provide both customers and the City personnel involved with
enough time to prepare for the changes, it would be helpful to implement the
following.
City
The City has to change from an EDU based system to a flow based system. This
will involve classifying each and every water customer with water connections in
the City into groups I through VI identified in Table 2-4. Special care must be
taken to exclude customers not in the City’s sewer service area, customers who are
connected to septic tanks and customers with irrigation meters only. All residential
units are flat rated. These include single family residences, duplexes and
multifamily units. These should be identified as Group I.
For commercial and industrial customers, the rates shown in Table 4-12 are based on
wastewater flow. 95 percent of the metered water use was assumed to end up as
wastewater. In other words the City should take the total water use on any given
meter, multiply that by 0.95 to determine the wastewater generated and multiply
that by the appropriate rate to generate the sewer bill for any given month. There
may be a few customers who consistently discharge much less than 95 percent of
their water usage in to the sewer. In that case written proof should be required
from the customer regarding the average wastewater generated before implementing
a change in the 95 percent factor. Hence to calculate each non residential
customer’s monthly charge an usage factor should be incorporated which would
default to 95 percent of water consumption but could be different. It is also
possible that water consumption might be reduced in case of a drought. If the City
adopts a drought management program, it would be possible that using the 95
percent wastewater generation factor would reduce the revenues produced. In such
a case that factor may be increased in steps to 100 percent since the most reductions
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in water usage would be for applications that do not produce wastewater. The City
should consider these factors when developing the implementation procedure for
billing customers in Groups I1 through VI. It should be noted that Hughes, a large
water user, has provided documentation to show its wastewater generation is 80
percentage of its water usage. This factor should be incorporated for billing
Hughes.
There will be times when a new customer who is not characterized in any of the
groups shown in Table 2-4 joins the system. Staff may classify that customer based
on its wastewater strength (see section titled Discharge Loadings page 2-5) or call
JMM for inclusion in the appropriate group.
There is a minimum charge established for customers in each group. This charge is
to be borne when a user connects to the sewer system, irrespective of whether any
water is used during any given period. Charges for the first month may be prorated
depending on number of days connected. This charge is required to pay the fixed
costs the City incurs to provide service to customers.
Customers
The effect on customers as a group varies from group to group. Group I1 customers
as a whole are effected the least from the change in the rate structure. However, it
is possible that within any given group individual customers may experience
significant changes in their sewer service charges as shown in Table 4-14. This
results from the new flow based system being more representative of costs of service
than the EDU system. To assess the impact of the new system, customers may
review their average water consumption, determine their group classification anti
rate and calculate their charge using a 95 percent usage factor. This may then be
compared with the charge under the existing system. It should be noted that the
change does not result purely from a change from an EDU system to a flow based
system. Revenue requirements increased by over 44 percent as shown in Table 4-6,
so even if no change was made in the rate structure charges would have increased
44 percent.
INDUSTRIAL PRETREATMENT
The pretreatment program provides for inspection of commercial and industrial
accounts to ensure that hazardous and/or toxic materials are not discharged by these
users into the City’s sewers and control household hazardous wastes. This protects
the health of all the citizens, maintains high quality effluent and sludge to meet
Encina’s National Pollution Discharge Elimination System Permit requirements and
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also helps to prevent costly upsets in plant operations. The policing of users which
is an important part of the pretreatment program is a precautionary step and
benefits all users, The household hazardous waste portion is limited to a community
education program provided on a contract basis by San Diego County’s Hazardous
Materials Management Unit.
The industrial pretreatment program will be managed and administered by the EAA.
The City will be billed by EAA for the costs incurred in administering the program.
In the past this service was provided by the County of San Diego and EAA and
charges for pretreatment from San Diego were not received for several years and
hence not charged appropriately. The program for FY 1990-91 will be centralized
at Encina. The program is in the process of being organized.
Discussions with staff at EWPCF indicated that about 300 commercial
establishments in the City would be required to be inspected. Of these it was
estimated that about 25 would require permits, five to eight large customers and
15-20 medium sized customers. Depending upon the size of the facility and the type
of wastewater generated the time and hence the cost of carrying out an inspection
could vary considerably.
For purposes of allocating costs equitably, it is recommended that customers again
be categorized by classes depending upon the type of facility and the number of
inspections required each year. The fees to be charged such customers should be
calculated €or the year and distributed evenly by charging on a monthly basis over
a year so that customers are not required to make lump sum payments.
There are three classes of users identified here. Class I are categorical users that
discharge certain pollutants, listed by EPA in the Code of Federal Regulations, to
the treatment plant. Class I1 customers are not categorical but are significant users
by virtue of actual or potential discharges as determined by source control staff.
Class I11 customers are neither categorical users nor significant dischargers.
However, they do have the potential to impact the sewerage system as determined
by source control staff.
Class I customers require quarterly inspection and annual permits. Class I1
customers require semi-annual inspection and permits every two years and Class 111
users require annual inspections and three year permits.
All the customers requiring permits and the categorization depending upon toxicity
and number of annual inspections has not been identified as yet. In order to
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collect revenues in the short term to offset expenses, we recommend that the
following schedule be used to charge for costs of the pretreatment program for the
first year. The classifications and charges should be reviewed as soon as
categorization of users is completed, groupings made and costs of service established.
It should be noted that the revenues obtained from these charges will generate only
part of the costs of the pretreatment program. The remaining revenues will be
collected from all the users in the City.
Class I: $3,000 per year or $250 per month.
Class 11: $1,800 per year or $150 per month.
Class 111: $300 per year or $25 per month.
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CHAPTER 6
ASSET VALUATTON AND DEPRECTATTON
This chapter covers valuation of the assets owned by the sewer enterprise of the
City. This valuation will provide a reasonable basis for depreciation expense
accounted in the financial statements of the enterprise.
One of the concerns of management is that depreciation expense element of the
sewer budget may not have been fully representative of the value of the assets of
the sewer system. This results from incomplete asset data since an inventory of
assets was not diligently maintained or updated from the early years of system
operation. As a result, when major system improvements and replacements are
needed there will not be sufficient reserves-funded by depreciation-to finance these
projects. Rates must then be increased to support a debt issue, or dramatically
increased if a pay-as-you-go financial program is continued. An inequity results as
users who have not used the system during the time it was depreciating share the
burden of the higher rates required for the financing, whether by debt or pay-as-
you-go.
To address these concerns assets of the sewer system have been valued. This will
provide a fair basis for depreciation representative of system assets. A replacement
reserve fund is established to hold depreciation designated revenues collected from
year to year in excess of replacement expenses incurred. This reserve would help
buffer sharp rate increases in the future in the event that major system replacement
expenses are to to be incurred,
VALUATION
There are several ways to value assets. These include historic cost method,
replacement cost method, reproduction cost method, comparable sales method and
capitalization of earnings. The last two methods are appropriate for valuation in
case of sale of a system but are not considered appropriate methods for the purposes
here.
Historic cost is the actual cost incurred for installing an asset as recorded in the
past.
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Replacement cost is the cost of constructing new assets with the same use or
function as the original asset. A "replacement" asset need not be exactly the same as
the original asset but may be a different asset which provides the same function
under current design conditions, codes, technology and/or construction methods.
Reproduction cost is the cost of duplicating the installation of an asset under the
present cost of labor and materials. For many older systems, exact duplicate
components may no longer be available in the marketplace at a competitive price or
may no longer be allowed by current building or health codes. For this reason
reproduction costs are not considered here for the purpose of determining
depreciation.
Since the main purpose here is to develop a basis for determining depreciation, the
historic cost and replacement cost methods are considered appropriate and both are
used. Sewer assets in the City were valued at replacement cost since historic or
book values for many assets are not readily available. The City's share of assets
owned at Encina are valued at book or historic value since it is understood that
these records are accurate and are updated annually.
City Sewer System
The City's sewer system consists of laterals, collectors, interceptors, pump stations
and associated appurtenances. These are itemized in Table 6-1. The size and length
of the lines were obtained from City staff. The data on pump stations were
obtained through inspection of the facilities. Design information on the pump
stations, where available, was reviewed. The dates of the original installation along
with the replacement values are included shown in Table 6-1. The pump station
data are divided into structures, equipment and electrical for the purpose of
estimating depreciation.
Encina
The assets at Encina and their book values along with the percentages owned by
Carlsbad are shown in Table 6-2. These data were obtained from EAA. The asset
data were divided into structures and equipment based on JMM experience.
The sewer system assets in the City are valued at replacement costs whereas the
assets owned at Encina are valued at historic costs. Due to price inflation, the
replacement cost of any asset would be expected to be greater than the historic cost
of that asset. Thus to obtain uniformity in the valuation, all assets should be
valued on an equivalent historic cost or replacement cost basis. An acceptable
method to convert replacement costs to historic costs, and vice versa, is by use of a
cost index such as Construction Cost Index (CCI) published by Engineering News-
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TABLE 6-1
REPLACEMENT COST NEW FOR ASSETS IN CITY OF CARLSBAD SEWER SYSTEM
Pump Stations Struct. Date Pipe & Eq. Date Elect. Date Total
Chinquapin
Faraday
Forest
Foxes
Gateshead
Home Plant
La Costa
La Golondrina
Simsberry
Tamarack
Terramar
Vancouver
Vi l las
Moods t oc k
$1 10,000
ao, ooo 75,000
250,000
75,000
110,000
75,000
as, ooo
120,000
75,000
75 , 000
75,000
75,000
75,000
TOTALS $1,355,000
1959 $125,000
1980 85, ooo
1950 125,000
1965 240,000
1985 110,ooo
1963 120,000
1976 120,000
1981 125,000
1985 140, ooo
1980 120,000
1972 110,000
1981 95,000
1983 95,000
I 985 as, ooo
$1,695,000
1980
1980
1980
1980
1985
1982
1981
1985
1976
1980
1972
1981
1983
1985
835,000
20,000
35,000
120,000
20,000
45,000
45,000
35,000
55,000
30,000
20,000
30,000
35,000
20,000
$545,000
1982
1980
1982
1980
1985
1982
1976
1981
1985
I 980
1972
1981
1983
1985
270,000
1ao,ooo
240,000
610,000
205,000
275,000
240,000
245,000
315,000
225,000
205,000
200,000
205,000
180,000
83,595,000
Other Assets Length/LF Unit Cost
or Quantity
Totat
Pipelines:
4" PVC
6" VCP
8" VCP
10" VCP
12" VCP
15" VCP
16" Ductile Iron
24" VCP
Manholes:
24" Diameter
48" Diameter
TOTALS
331,125
41,611
430 , 426
6.938
56,935
4,625
93
a, 644
2,177
10
$35
42
48
55
60
78 ao
128
2,500
3,800
$11,sa9,37s
20,660,448
416,280
1,747,662
3,131,425
360,750
7,440
1,106,432
5,442,500
38,000
$44,500,312
~ ~~
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TABLE 6-2
HISTORIC VALUE OF ENCINA ASSETS
~~~~ ~
Unit Description Total Carlsbad Carlsbad Equipment Other Value Share, % Total Value Value
B
C
D
E
F
G
H
1
J
Gravity Line
Buena Vista Pump Station
Force Main (BVPS)
Gravity Line
Gravity Line
Aqua Hedionda Pumps Station
with force main Gravity Line
Treatment Plant
Outfall
TOTAL FACILITIES AT ENCINA
$1,897,435 457,461
93,925
379,776 662,335
768,619
513,056
59,584,706
2,957,879
$67,315,192
7.00% $132,820 $132,820 15.50% 70,906 $35,453 35,453 15.50% 14,558 14,558
27.30% 209,833 209,833
38.50% 254,999 127,499 127,499
51 ,70% 265 , 250 265 , 250
37.30% 141,656 141,656
25.40% 15,134,515 1,740,774 10,393,741
28.66% 847 , 728 847,728
$17,072,267 $4,903,727 812,168,540
TREATMENT PLANT UNIT I
Description Total Carlsbad Carlsbad Equipment Other Share, % Total Value Value
Operations Building
Screening Building Structure
Equipment
Structure
Equipment
structure
Equi pent
Power Building
Structure
Equipment
Structure
Equi pent
Structure
Equi pent
DAF Thickeners
Structure
Equi pent
Aeration Tanks 8,
Secondary Facilities
Structure
Equipment
Structure
Equipment
Primary Treatment
Chlorine Building
Digesters
Sludge Dewatering Building
Secondary Sedimentation Tanks
Other Facilities
$2,201,249
846,002
1 ,974,006
5,095,887 899,274
450,415
300,276
3,113,478
7,264,782
3,467,261 1,485,969
1,790,106 1,790,106
706,036 706,036
2,419,688
3,629,531
3,482,075
17,348,046 614,484
TOTAL FOR TREATMENT PLANT $59,584,706
25.40% 8559,117 $0 $559,117
25.40% 214,885 $0 214,885 25.40% 501,397 $501,397 0
25.40% 1,294,355 $0 1,294,355 25.40% 228,416 $228,416 . 0
25.40% 114,405 30 114,405
25.40% 76,270 876,270 0
25.4oX 790,823 $0 790,823 25.40% 1,845,255 $1,845,255 0
25.40% 880,684 $0 880,684
25.40% 377,436 8377,436 0
25.40% 454,687 $0 454,687 25.40% 454,687 $454,687 0
25.40% 179,333 $0 179,333 25.40% 179,333 $179,333 0
25.40% 614,601 $0 614,601 25.40% 921,901 8921,901 0
25 .bo% 884,447 $0 884,447
25.40% 156,079 8156,079 0
25.40% 4,406,404 $0 4,406,404
$15,134,515 $4,740,774 810,393,741
6-4
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Record (ENR). To estimate the replacement costs of the assets at Encina average
age of these assets can be estimated and the replacement costs determined as follows:
for an asset that is ten years old, For example, the replacement cost is
Replacement Cost = Historic Cost x CCI 1990
ccI1980
Similarly, historic value of an asset that is 25 years old would be calculated from
replacement cost as Follows
Historic Cost = Replacement Cost x CCII 965
ccl 1990
Asset Age And Useful Lives
The ages of the assets both in the City and at Encina are not readily available.
Since the primary purpose of valuing is to estimate depreciation, an assumption of
the age of an asset must be made. In the absence of other data, it is assumed herein
that the average age of all assets is half their useful life. To determine average age
of an asset its average life must be determined.
Average lives for various assets shown in Table. 6-3 are based on JMM experience
and the literature.
TABLE 6-3
AVERAGE USEFUL LIVES FOR
SEWER SYSTEM ASSETS
~~ ~
Asset Useful Life, Years
Control Panels
Generators
Manholes
Motors
Pipe
VCP
PVC
Pumps
Valves
Wet Wells
Structures
15
15
50
20
50
50
15
40
40
70
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For the purpose of estimating average age, assets owned by the City are divided into
three main groups: structures, equipment and electrical. Structures consist of
pipelines, manholes, wet wells and structures. These are assumed to have an average
useful life of of 50 years. Equipment consists of pumps, motors, and valves, with
an average useful life of 20 years. Electrical consisting of generators and control
panels are assumed to have an average useful life of 15 years.
Using the average useful lives indicated above and assuming the average age of
these assets as half the average life, the historic and replacement values for the
assets owned by the City were determined as shown in Table 6-4. The 20-city
average CCI used in the calculations are shown below:
Year CCI
1990 (March)
1983 (March)
1980 (March)
1965
470 1
4006
3159
97 1
DEPRECIATION
Public service organizations, such as Carlsbad, do not pay income taxes and are less
concerned with an accurate reporting of assets, liabilities and equity than they are
with providing high quality service to their constituencies. To achieve this goal it
is advisable for them not just to account for (recognize) depreciation as an
indication that assets are wearing out but also to include the depreciation amount in
their pricing schemes as a revenue requirement to be recovered from the direct
beneficiaries through user charges.
Generally assets are recorded at historic (original) cost and depreciated based on
that historic cost. As time passes and costs of acquiring assets increase, depreciation
based on historic cost alone is not sufficient to finance replacements. In that case
rates have to be raised to collect the needed revenues and/or external financing has
to be arranged.
Depending upon how depreciation is calculated there could be a significant impact
on rates. To decide the basis of depreciation, regulations and practical
considerations are used as a guide.
The purpose of expensing depreciation, as discussed earlier, is to collect revenues to
fund a replacement reserve for use to finance replacement type capital expenses.
SWRCB requires a replacement reserve to be funded through depreciation or by
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considering the average replacement capital expenditures over the next five years.
The average replacement capital expenses over the next five years are $382,000 per
year (Table 4-4). Depreciation based on historic value and replacement value of
assets is shown in Table 6-4 and is $766,000 and $2,581,000 respectively.
Depreciation based on historic cost is not acceptable to SWRCB for certain assets.
The SWRCB requires depreciation on a straight line basis on "replacement costs"
which are current or estimated future costs of the assets. Replacement costs, as
defined by SWRCB, include all capital expenditures except:
0 major rehabilitations needed as individual processes near the end
of their useful lives.
0 structural rehabilitations such as buildings, ponds, and pipes.
0 facility expansions or upgrades to meet future user demands.
SWRCB replacement costs cover such items as pumps, motors, telemetry and
electrical controls, chlorination and dechlorination equipment etc. This covers
equipment and electrical in the assets identified in Tables 6-1 and 6-2. Depreciation
on the replacement costs of equipment can be determined from Table 6-4 and is
$485,952.
The amount that can be used to fund the replacement reserve under different
methods, can be summarized as follows:
Average Replacement Type Capital expense (SWRCB) $382,000
Historic Cost Depreciation $766,000
Replacement Cost Depreciation $2,58 1,000
Equipment Only Replacement Cost Depreciation (SWRCB) $486,000.
Using these figures the minimum amount acceptable to the SWRCB would be
$382,000. Considering that the City does not have a reserve and that many parts of
the City's system need to be renovated and hence there may be large expenses in the
near future a more reasonable amount should be used. Depreciation base'd on
replacement costs would cause rates to increase substantially. The minimum amount
that would be advisable would be equipment only replacement cost depreciation.
However, taking into consideration the circumstances in the City, it is recommended
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that depreciation equal to historic cost depreciation be expensed annually. This will
be more than the equipment only replacement cost depreciation. In order to ease the
burden in the first few years, depreciation equal to 75 percent of the that based on
historic costs ($574,400) is used for FY 1990-91. It is recommended that this amount
be increased each year until full historic cost depreciation is attained. An option
showing the rates with the full deprecation at historic values for FY 1990-91 is
included in Appendix A.
ALLOCATION OF DEPRECIATION
The final section of this chapter is devoted to determining the allocation of the
different assets so that the depreciation cost element is assigned appropriately to the
flow, BOD and SS cost centers. This is shown in Tables 6-5 and 6-6 and used earlier
in Table 4-8. Assets within the City are allocated to flow as they relate to the
collection system. Assets at Encina are allocated per SWRCB guidelines as shown in
Table 6-5 to flow, BOD, and SS. The total allocation of all assets is combined and
shown in Table 6-6.
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TABLE 6-5
ALLOCATION OF ENCINA ASSETS
~~~~ ~~ ~~ ~
Unit Description
~~ ~ ~ ~~~ ~~ ~~~~ ~~~~
Allocations % Allocations $ H Flow BOD ss Flow BOO ss
B
C
0
E
F
G
H
I
J
Gravity Line
Buena Vista Pump Station
Force Main (BVPS)
Gravity Line
Gravity Line
Aqua Hedionda Pumps Station
with force main
Gravity Line
Treatment Plant
Outfall
100.00%
100.00% 100.00%
100.00% 100.00%
100.00%
100. oox 44.54% 100.00%
0.00%
0.00% 0.00%
0.00% 0.00%
0.00%
0.00%
0.00%
31 .a2%
0.00%
0.00%
0.00%
0.00% 0.00%
0.00%
0. oox 23.64%
0. oox
$132,820
209, a33
70,906 14,558
141,656
254,999
265,250 6,741,359 847,728
$0 so $
0 0
0 0
0 0 0 0
0 0
0 0
0 0
4,815,374 3,577,783 15,
TOTAL FACILITIES AT ENCINA $8,679,111 $4,815,374 $3,577,783 $17,
ALLOCATION OF FACILITIES AT ENCINA 50.84% 28.21% 20.96%
TREATMENT PLANT UNIT I
Description % of Allocations $ Allocations $
Total Flow BOD ss F Low BOO ss
Operations Building
Screening Building
Structure
Equipment
Structure
Equipment
Structure Equi pment
Power Building
Structure
Equipment
Structure
Primary Treatment
Chlorine Building
Digesters
Equipment
Structure
Equipment
OAF Thickeners Structure
Equipment
Aeration Tanks &
Secondary Facilities
Structure
Equipment
Structure
Equipment
Sludge Dewatering Building
Secondary Sedimentation Tanks
Other Facilities
TOTAL FOR TREATMENT PLANT
100% 100.0% 0.0% 0.0%
30% 100.0% 0.0% 0.0%
70% 0.0% 0.0% 100.0%
85% 10o.o~ 0.0% 0.0% 15% 0.0% 35.0% 65.0%
60% 100.0% 0.0% 0.0%
40% 100.0% 0.0% 0.0%
30% 44.5% 31.8% 23.6% 70% 44.5% 31.8% 23.6%
70% 0.0% 50.0% 50.0%
30% 0.0% 50.0% 50.0%
50% 0.0% 50.0% 50.0% 50% 0.0% 50.0% 50.0%
50% 0.0% 50.0% 50.0%
50% 0.0% 50.0% 50.0%
40% 75.0% 25.0% 0.0%
60% 0.0% 100.0% 0.0%
85%. 10o.o~ 0.0% 0.0%
100% 44.5% 31.8% 23.6%
15% 0.0% 100.0% 0.0%
ALLOCATION PERCENTAGES
8559,117 BO $0 4
214,885 0 0
0 0 501,397
1,294,355 0 0 1, 0 79,945 148,470
114,405 0 0
76,270 0 0
352,256 251,618 186,950 821,931 587,108 436,216 I,
0 440,342 440,342 o 188,718 188,718
0 227,343 227,343 0 227,343 227,343
0 89,667 89,667 o 89,667 89,667
460,950 153,650 0
0 921,901 0
884,447 0 0
0 156,079 0 1,962,742 1,401,993 1,041,669 4
$6,741,359 $4,815,374 $3,577,783 $15
44.54% 31.82% 23.64%
~~~~~
6-10
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SEWER RATE CHARGES*
UNlT MINI"
COST MONTHLY
USERS $/HcF CHARGE
Group I Residential $1.56 $1 1.58
Group II Commercial $1.43 $11.58
Group III Commercial $1.87 $1 1.58
Group IV Commercial $2.96 $1 1.58
Group V Instiutional $1 -42 $1 1.58
Schools per ADA
Elementary $0.26
Junior $0.51
High $0.77
Boarding $3.86
Group VI Large Volume Users
Hughes Aircraft $1.15 $1 1.58
Beckman Micro Oper 1 $3.88 $11.58
Culligan $1.11 $1 1.58
expuLFing fd historic depreciation
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TABLE 4-3A
PROJECTED EXPENDITURES
Projected Projected Projected Projected Projected Escalati
1990-91 1991-92 1992-93 1993-94 1994-95 Rate
Collection System
~~
Personal Services
Office Expenses
Repairs and Maintenance
Insurance
Bad Debt
Mi sce 1 1 aneous
Depreciation
Professional Services
8408,300
65,500
427,150
16,050
15,750
10,000
765,900
288,900
8445,354
71 ,444
465,914
16,853
16,538
10,000
765,900
303,345
$485,092
77,819
507,487
17,695
17,364
10,000
765,900
318,512
$527,691
84,653
552,053
18,580
18,233
10,000
765,900
334,438
~
8573,337 5.
91,975 5.1
599,806 5.1
19,509 5.1
19,144 5.1
10,000
765,900 0.1
351,160 5.1
Subtotal Collection Expenses 81,997,550 82,095,347 82,199,870 82,311,547 $2,430,831
Treatment & Disposal 1,759,021 1,918,654 2,089,854 2,273,376 2,470,026 5.
Pretreatment Program 70,645 74,177 77,886 81,780 85,869 5.
TOTAL OPERATING 83,827,216 84,088,179 84,367,610 $4,666,704 $4,986,727
Debt Service to JPA 844,452 844,452 844,452 1,119,082 1,117,481
Capital Expenditures-City 198,400 187,000 187,000 487,000 487,000
Capital Expenditures-Encina 75,710 75,000 75,000 75,000 75,000
TOTAL EXPEND I TURES 84,945,778 $5,194,631 $5,474,062 $6,347,786 86,666,208
TABLE 4-4
CAPITAL IMPROVEMENTS
~ ~~~~~ ~ ~~
Projected Projected Projected Projected Projected TOT)
1990-91 1991 -92 1992-93 1993-94 1994-95
~
Buena/San Marcos Interceptor SO 80 80 81 00,000
H. Batiquitos Lift Station 167,000 167,000 167,000 167,000
Vista-Carlsbad Interceptor 0 0 0 200,000
Sewer Monitoring 20,000 20,000 20,000 20,000
TOTAL 8198,400 $187,000 $187,000 8487,000
Capital Cost at Encina 75,710 75,000 75,000 75,000
~~~
8100,000 8200,0[
167,000 835,OO
20,000 100,oo
200,000 400,OO
8487,000 $1,535,00
75,000 375,71
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TABLE 4-5
PROJECTION OF RESERVES
~~
Projected Projected Projected Projected Projected
1990-91 1991-92 1992-93 1993-94 1994-95
Operating
At Beginning of Year $2,395,322 $2,395,322 82,395,322 $2,395,322 $2,395,322
Additions During Year 0 0 0 0 0
At End of Year 82,395,322 82,395,322 82,395,322 82,395,322 82,395,322
% of Operating Expense 62.59% 58.59x 54.84% 51.33% 48.03%
Capital Replacement *
At Beginning of Year $0 $512,281 $1,079,867 $1,694,752 $2,048,377
Additions During Year 491,790 503,900 503,900 203,900 203,900
Interest 8 % per Year 20,491 63,686 110,985 149,725 179,194
At End of Year $512,281 $1,079,867 81,694,752 82,048,377 $2,131,171
% of Capital Expense 1M.an 351.75% 552.04% ~7.2~ 792.01%
TOTAL 82,907,603 $3,475,189 $4,090,074 84,443,699 $4,826,793
Capital Expansion **
At Beginning of Year $13,970,000 $9,430,000 84,856,000 $3,656,000 84,333,000
* The capital replacement acoount is funded from depreciation and income from operations.
** Income from connection fees is placed in capital expansion account.
Connection fees, capital expenses and other inflows and outflows
from this account are show in master plan.
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TABLE 4-6A
SWRCES AND APPLICATIONS OF FUNDS
~ ~~ ~ ~~ ~~ ~
Budgeted Projected Projected Projected Projected
1990-91 1991-92 1992-93 1993-94 1994-95
Applications of Funds
Collection System $1,231,650 81,329,447 81,433,970 81,545,647 81,664,931
Depreciation 765,900 765,900 765,900 765,900 765,900
Treatment 8 Disposal 1,759,021 1,918,654 2,089,854 2,273,376 2,470,026
Pretreatment 70 , 645 74,177 7’7,886 81,780 85 , 869
Payment to JPA * 0 0 0 0 0
Capital Expenditure (local) 198,400 187,000 187,000 487,000 487,000
Capital Expenditure (Encina) 75,710 75,000 75,000 75,000 75,000
TOTAL $4,101,326 84,350,179 84,629,610 85,228,704 85,548,727
Sources of Funds
Service Chrg a ‘90 Rates $2,372,061
Serv Chrg from Prev Yr Rate Incr.
Connection Fees 0
Pretreatment 19,000
Other Service Fees 5,000
Interest Earnings 191,626
Miscellaneous 1,200
Transfers from Repl. Reserve 274,110
82,464,123 82,556,184 82,648,246
1,238,329 1,396,230 1,574,657
0 0 0
30,000 38,943 LO, a90
5,000 5,000 5,000
191,626 191,626 191,626
1,200 1,200 1,200
262,000 262,000 562,000
82,740,307
1,779,742
0
L2.935
5,000
191,626
1,200
562,000
TOTAL $2,862,997 84,192,277 94,451,184 $5,023,619 $5,322,810
Rev. needed from Rate Incr. 1,238,329 157,902 178,427 205,085 225,918
% Revenue Increase 52.20% 4.26% 4.51% 4.86% 5.00%
* Debt service, capital expenses for expansion and connection fees are
excluded here. These are reported in Capacity Fee Update to December 1987
”- Master Plan of Sewerage dated March 1990 by Wiison Engineering.
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TABLE 4-8
ALLOCATIONS OF SWRCES AND APPLICATIONS OF FUNDS
1990-91
~~
Allocation Percentages
FLOW BOD ss Allocations to
FLOW BOD SS
Applications of Funds
Collection System 100.00% 0.00% 0.00% $1,231,650 SO SC
Depreciation 68.64% 17.99% 13.37% 1OO.OOOOoX $525,714 $137,785 $102,401
Treatment & Disposal 41.29% 35.88% 22.83% 726,315 631,180 401,525
Pretreatment 100.00% 0.00% 0.00% 70,645 0 0
Payment to JPA * 0 0 0
Capital Expenditure (local) 100.00% 0.00% 0.00% 198,400 0 0
Capital Expenditure (Encina) 54.36% 28.04% 17.60% 41,155 21,232 13,323
TOTAL
Sources of Funds
Service Chrg a '90 Rates
Serv Chrg from Prev Yr Rate Incr.
Connection Fees * 0 .OO%
Pretreatment 100.00%
Other Service Fees 68.12%
Interest Earnings 68.12%
Miscellaneous 68.12%
Transfers from Repl. Reserve 68.12%
82,793,880
68.12%
0 I 00% 0 I 00% $0
O,OO% 0.00% 19,000
19.27% 12.61% 3,406
19.27% 12.61% 130,538
19.27% 12.61% 81 7
19.27% 12.61% 186,727
8790,197
19.27%
$0
0
963
36,920
23 1
52,812
$5 17,249
12.61
$0
0
63 1
24,167
151
34,570
TOTAL $340,489 $90,927 $59,519
Rev. needed from Rate Incr.
% Revenue Increase
Ueighted factors
$2,453,390 $699,270 $457,730
67.95% 19.3iK 12.68:
TABLE 4-9A
UNIT COSTS
F Lou Boo ss
~~
Revenue Requirement $2,453,390 $699,270 8457,730
Cost Parameters 1,732 3,952,434 3,306,363
(from Table 4-2) w I bs L bs
Unit Cost to Treat $1,417 $0.1769 $0.1381
and Convey (per mil gal) (per Lb) (per lb)
or
$1 .0598
(per hcf)
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TABLE 4-llA
TOTAL ANNUAL REVENUES FROM SERVICE CHARGES
1990-9 1
1
Users FLOW BOD ss TOTAL
$ $ $ $
.
Group I Residential
Residential 1,756,561 1 482,031 1 344,499 I 2,583,091
Group IV Commercial I
Hotels-Motels (w restaurants) 0 0 0 01 Bakeries (wholesale) 6,716 7,020 3,255 16,991
Supermarkets 7,110 5,946 4,595 17,651
Mortuary 0 0 0 0
Restaurants 5 1,659 54.002 25.038 I 130,699
Subtotal 65.485 66.969 32,888 165,342
TOTALS ! 2.453.563 I 699.297 I 457.769 1 3.610.629 I I
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TABLE 4-12A
CALCULATED USER RATES
1990-91
~~____
Users Unit Cost Hin. Monthly X Rate
S/hcf * Charge, f Increase
Group I Residential 1.5585 11.58 58.68%
Group I1 Comnercial 1.4264 11 -58 43.24%
Group 111 Comnercial 1 .8705 11 .5a 87.84%
Group IV Comnercial 2.9605 11.58 52 -30%
Group V Institutional 1.4186 11 -58
Schools per ADA
Elementary 0.2571 11 1.33x
Junior 0.5142 252.22%
High 0.7714 217.00%
Boarding 3.8568
Group VI Large Volw Users
Hughes Aircraft 1.1495 11.58 55 -85%
Beckman Micro Oper 1 3.8778 11.58 235.59%
Culligan 1 .lo88 11.58 181 -75%
* Flow is wastewater flou generally 95 percent of metered
water consurption for most customers.
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APPENDIX B
EFFECT OF ADDING STAFF
With growth occurring at a fast pace, the City may need to add staff. One of the
options reviewed was the cost of retaining additional staff and the impact on rates.
Management has considered adding two personnel to the staff. The expenses
budgeted for this purpose were $ 91,000 per year. This cost was allocated to flow as
.this staff would be required to maintain the City's collection system. Unit cost of
flow increases by about $0.04 per hcf. The effect of this addition on rates is shown
in the table below.
Users Unit Cost Minimum Monthly
$/HCF Charge, $
Group I Residential
Group I1 Commercial
Group I11 Commercial
Group IV Commercial
Group V Institutional
Schools per ADA
Elementary
Junior
High
Boarding
Group VI Large Volume Users
Hughes Aircraft
Beckman Micro Oper 1
Culligan
1.51 1
1.389
1.81 1
2.848
1.381
0.250
0.50 1
0.75 1
3.756
1.122
3.720
1.084
1 1.23
11.23
13.46
21.17
1 1.23
11.23
27.65
1 1.23
~ ~~
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I APPENDIX C
I DATA ON LARGE VOLUME USERS
1
I Test data on strength of wastewater from Hughes and Culligan is included here as
also mass balance on water for Hughes.
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Environmental Engineering Laboratory
.. -, , 2; - _. .
3538 Hancock Street
San Diego, CA 92110
(619) 298-6131
CULLIGAN WATER COND/CARLSEAD
2501 STATE ST.
CARLSBAD , ,CA
92008
Customer 8 926 Sample ts 900505174
Reference : 24 HR.COMPOSITE
Sampled : 05/15/90 0O:OO-M Received : 05/16/90 03:45PM P.O. #
Comment :
Test Run: Result :
Biochemical Oxygen Demand 4.5 mg/L
Solids, Suspended 51 mg/L
Coliform results are in MPN/100 ml A
929-70
Reported by Date
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HUGHES AIRCRAFT COMPANY 6155 EL CAMINO REAL, CARLSBAD, CA BUILDING 736 WEEKLY WATER BALANCE IN UNITS OF 1000 GALS PER WEEK BASED ON COMPOSITE 1989-90 STATISTICS
WATER USAGE 1960
SYSTEM 1 HIGH PURITY WATER - 380
SYSTEM 1 REVERSE OSMOSIS BRINE - 120
SYSTEM 2 HIGH PURITY WATER - 240
SYSTEM 2 REVERSE OSMOSIS BRINE - 80
SCRUBBERS (NOT INCLUDING RECLAIM) 620
COOLING TOWERS 400
DOMESTIC 50
IRRIGATION 70
.....................
TOTAL USAGE 1960
WATER DISCHARGE
EAST INDUSTRIAL WASTE NEUTRALIZER
WEST INDUSTRIAL WASTE NEUTRALIZER
EVAPORATION IN COOLING TOWERS
EVAPORATION IN SCRUBBERS
COOLING TOWER BLOWDOWN
BOILER EVAPORATION & BLOWDOWN
DOMESTIC
SURFACE RUNOFF
1000
375
320
20
80
45
50
70
""""""""""""""~""""""~
TOTAL DISCHARGE 1960
- DAVID MCKINLEY APRIL 11, 1990
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BUAL ITY ASSLJF:ANCE LAE0F:ATOF:Y
SAN D I E.lxl, C:AL LFQF..:N I A 92 12 I
6555 NANCY F.:IDGE DE:. , SUITE 30(5 c; z. r" T - ,." ,~
( € 1'3 :I 566- 1060 .*i
ccl
", ,
G, .. -. -. ..
5?
'2 :-.> "11, - ,* - *.,! (i I i j. - - - " - - " - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -. - - - - - - " - - - - - " - - - - - - - - " - - - - - .. - I
.. .
-. . .- '_ ....-.
3 ::.. . . j -,, ,
HUGHES A I F:C:EAFT - M I iXOELEI1:TKIN I ICs CENTER
ATTN: DAV ID PICK I NLEY
CARLSBAD, Ck '3200'3
6155 EL cAriINo REAL, ELDG 73~ M/S 211
DATE OF mzFuF:-r
GATE RECE I VIED
DATE OF SAMPLE
DATE C:OMPLETED
ANALYZED BY
SAMPLE TYPE
SAMF'LE LOC:AT I ON
MAY 23, 1'3'30
Mil'.( 1 E, , 1'3'30
MAY 14, 1'3'X)
MA)' 21 , 1'3'3()
M G
1 WASTE WATER
DOWN THE HILL ON THE
WEST SIDE UF BLDG
ANALYSES RESULTS
LOG NI..IPIBEF~: 7555-'3(3
SAMFLE ID: DliWNIiIL-I- #1
ANALY s I s METHOD UNITS : rwL
E;OD STD 512 li7-D
TSS STU 254i:j-D
- - - - - - - - - - - - - __ - - - - - - - - - - -_ - " -. - - - - - - - - - - - - - - - - - - - - - " - - - - - - - " - - - - - ." ~ i'd . (j _-,.-, - LL. (j
P P
LABORATORY D I EEI1:TOE
FS/h 1
QUALITY ASSURANCE
LABORATORY
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OUALITY Assu~m~lx LAmmA-roRy
6"" 44.2 NANCi' F: IDGE DL:. , SIJITE ZiI)(I)
SAN D I EGO, CAL I,.FTJF.IN I A '32 i 2 I
( 6 1'3 :i 5i36- 1 I:)E,[:)
""""""""""""."""" ""."""" """ """"" """"
HUGHES A I FXF:AFT - M I CF:OELEC:TRON I CS CENTEI;:
ATTN: DAV ID MCK I NLEY
E, 155 EL lxrl IN^ REAL, ELDG 726 rvs 2 I 1
i;AF.:LSEAD, I:A '32i:)O3
DATE UF- EEF'ORT
DATE l?ECE IVED
DATE OF SAMPLE
DATE COMPLETED
ANALYZED BY
SAMPLE TYPE
SAMPLE Lo1::k-r I ON
MAY 23, 1 '3'3(:)
MAY 1€, 1'33(:1
MAY 15, 1'3'30
MAY 2 1 , 1'39(:)
M 13
1 WASTE WATER
DOWN THE HILL @id THE
WEST SIDE OF ELDG
ANALYSES RESULTS
tnt3 NI-IPlEEF:: 76t:!'="'' . L Ji-i
SAMFLE ID: GOWNHILL #2
ANALYS I s ME'THrJD U t.1 I TS : M I3 /' L
BOD STD 5.2 1 i1I-F 3 8 , (1) / 3 '3 . (:j ., "_"""""""""""""""""~"""""""""""""~
TSS STfi 254('.)-D 28. t:j
* DI-IF'L I KATE ANALY S I S
&%2% FETER SHEN
LAB0T;;'ATORY D I REl::TUR '
FS/hl
QUALITY ASSURANCE LABORATORY
N
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QUAL I TY ASSUF:ANCE LAF0F;:ATOF:Y
€555 NANCY F I DGE DE:. , SUITE 30i3
SAN D I EGO, C:kL I FOEN I A '32 12 1
i: F, 1'3 j 56& 1 (:)G(:)
"""__""""""""""""~ ""_ "_"..."""" """"."_"_
HUGHES AI RC:EAFT-M 1CRUELECTF:iJN 111:s C:ENTER
ATTN : DAV ID MCt::: I NLEY
€155 EL C:AMINO F:EAL, ELDG 7% M/S 21 1
C+,F:.LSBAD s I~A '32iI)(:)'3
EATE OF F:woF:-r
PATE F:ECE IVED
DATE OF EiiVlFLE
DATE CUMPI-€TED
ANALYZED BY
SAMFLE TYPE
SAMFLE LOCAT I ON
M fi \i; '"4 1 #3#:j,O &.,
MR'y' 17 , 1 '3'3i:)
"
MAY IF,F 1'3'3(::l
MAY '2.2 , 1 '3'3iI)
M G
1 WASTE MATEF: rm.a THE HILL or4
THE WEST SIIjE OF THE
ANALYSES FESULTS
LDG twtqEEF: : 762 1 -9t:)
SAMF'LE IG! DOWNHILL +k?
Ar.jf;us r s METHOn UNITS: MG/L
E: 111 D STD .52: 1 (:)-E .-, A/. 7 i:1/23.5+
""""""""""""""""""""""""""""""""
TSS STu .zsc?(:)-fi E, . (:I
ii ELIPI- I CATE ANALYS IS
0 r-
FETER SHEN
LAEOF.:AT@FY D 1F:EC:TOF:
FS ./'ti 1
QUALITY ASSURANCE LABORATORY
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QUALITY ASSUF;:ANCE LABORATORY
€555 NANCY F: I DGE DR. , SUITE 3:)C)
SAN DIEGO, CALIFORNIA 92121 c 6 1'35 SEJG'l (:)6(3
""""""""""""""""""""""""""""""""
HUGHES A IRCRAFT - MI CF:OELEIZTF:ON 111:s CENTER
ATTN: DAVE MCKINLEY
6155 EL CAMINO REAL, BLDG 735 M/S 211
IIAELSBAD, izA '32(](:)'3
DATE OF REPORT
DATE RECEIVED
DATE OF SAMPLE
DATE COMPLETED
ANALYZED BY
SAMPLE TYPE
SAMPLE LOCAT ION
MAY 25, 1'3'30
MAY 18, 1'3*30
MAY 17, 1'3'30
MAY 23, 1'3'3(:)
M I3
1 WASTE WATER
DOWN THE HILL ON
THE WEST SIDE OF THE
ANALYSES RESULTS
ANALYSIS METHOD
LOG NUMBER: 7757-9C)
SAMPLE ID: DOWNHILL #4
UNITS: MG/L _"""""""~""""""~""""""""""~""~""""
BOD STD 52 1 (1)-E
TSS . STD 2540-D
63.0/€ 1 . 5*
i 5 (5
)c DUPL I CATE ANALYS IS
4 <p
FETER SHEN
LABORATORY DIRECTOR
FS/hl
QUALITY ASSURANCE
LABORATORY
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APPENDIX D
SWRCB FORMS
The State Water Resources Control Board has to approve the City’s revenue program
under conditions of the grants received for construction of the treatment plant.
Forms in a format acceptable to SWRCB are included here so that the revenue
program may gain speedier acceptance.
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FORM 2
OPERATIONS AND MAINTENANCE COSTS AND DEBT SERVICE
ESTIMATED COST
COST CATEGORY FIRST FULL YEAR OF OPERATION
YEAR: 1999-9 1
1. TREATMENT FACILITIES
Fixed Costs Replacement Costs
Variable Costs Total Fixed Costs
920,958
75 , 710
996 , 668
838 , 063
SUBTOTAL
2. COLLECTION SYSTEM
Fixed Costs
Replacement Costs
Variable Costs
SUBTOTAL
Total Fixed Costs
3. MISCELLANEOUS
Overhead
Pretreatment Program
Other
SUBTOTAL
4. TOTAL - FIXED COSTS
5. TOTAL - VARIABLE COSTS
6. TOTAL O&M COSTS
7. DEBT SERVICE PRINCIPAL & INTEREST
1,834,731
1,378 , 925
198,400
1,577,325
427 , 150
2 , 004 , 475
70,645
70,645
2 , 573 , 993
1,335,858
3,909,851
844 , 452
D-3
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1
FORM 4 I UNIT COST DETERMINATION
ALLOCATIONS OF SOURCES AND APPLICATIONS OF FUNDS B 1990-91
I Allocation Percentages
FLOU BOD ss
Allocations to
FLOW BOD ss
-
~
Appl i cations of Funds I Collection System 100.00% 0.00% 0.00% 91 , 231,650 $0 $0 :
Depreciation 68.64% 17.99% 13.37% 8394,285 $103,339 $76,801
Treatment & Disposal 41.29% 35.88% 22.83% 726,315 631,180 401,525 ! 1 Pretreatment 100.00% 0.00% 0. oox
Payment to JPA *
Capital Expenditure (local) 100.00% 0.00% 0.00%
70,645 0 0
0 0 0
198,400 0 0 I Capital Expenditure (Encina) 54.36% 28.04% 17.60% 41,155 21,232 13,323
TOTAL 92,662,451 $755,751 $491,649 :
68.10% 19.33% 12.57% I Sources of Funds
Connection Fees * 0.00% 0.00% 0 .OWL $0 SO $0
1 Pretreatment
Other Service Fees
Interest Earnings
Miscellaneous
100.00% 0.00% 0.00%
68.10% 19.33% 12.57%
68.10% 19.33% 12.57%
68.10% 19.33% 12.57%
1 Transfers from Repl. Reserve 68.10% 19.33% 12.57%
TOTAL
19,000 0 0
3,405 966 629
130,489 37,040 24,096
81 7 232 151
186,658 52,984 34,468
$340,369 $91,222 $59,344
I Rev. needed from Rate Incr.
% Revenue Increase
Weighted factors
$2,322,082 $664,529 $432,305 3
67.92% 19.44% 12.64% 8
I
1 UNIT COSTS
F Lou BOD ss
U
I u
Revenue Requirement $2,322,082 $664,529 8432,305
Cost Parameters 1,732 3,952,434 3,306,363
(from Table 4-2) mg l bs l bs
Unit Cost to Treat 81,341 $0.1681 $0.1307
and Convey (per mil gal) (per lb) (per lb)
or I $1.0031
(per hcf)
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1
BENEFIT AREA FEES FOR
CONVEYANCE SYSTEM IMPROVEMENTS
UPDATE TO THE DECEMBER, 1987
CITY OF CARLSBAD
MASTER PLAN OF SEWERAGE
December 1990
Wilson Engineering
Consulting Engineers
I*
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TABLE OF CONTENTS
PAGE NC
LISTOFTABLES ............ ~........Os.OO..OO......O..~.i
LISTOFFIGURES ..........................................
CHAPTER 1. INTRODUCTION .................................
Recommendations ......................................
Summary of Changes .....................................
CHAPTERZ. FEEAREAS .....................................
VistajCarlsbad Interceptor Basin ~ - s D o . D D D . o s - ~ ~ - ~ . . D ~ . . - - . .
Benefit Area A ....................................
North Agua Hedionda Interceptor Basin ......................
BenefitAreaB ....................................
South Agua Hedionda Basin ...............................
BenefitAreaC ...................................
Benefit Area D ...................................
BenefitAreaE ...................................
BenefitAreaF ...................................
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TABLE OF CONTENTS (Continued)
PAGE N4
Buena/San Marcos Interceptor Basin ........................
Benefit Area G ...................................
BenefitAreaH ...................................
BenefitAreaI .................................... y
North Batiquitos Interceptor Basin ......................... :
BenefitAreaJ .....................................
BenefitAreaK ...................................
BenefitAreaL ....................................
BenefitAreaM ...................................
*. 11
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Table 1-1
Table 2-1
Table 2-2 .
Table 2-3
Table 2-4
Table 2-5
Table 2-6
Table 2-7
Table 2-8
Table 2-9
Table 2-10
Table 2-11
Table 2-12
Table 2-13
Table 2-14
Table 2-15
Table 2-16
Table 2-17
Table 2-18
Table 2-19
Table 2-20
Table 2-21
LIST OF TABLES
PAGE Nc
Summary of Benefit Areas .......................
Improvements for Benefit Area A ..................
EDU Information for Benefit Area A ...............
Improvements for Benefit Area B ..................
EDU Information for Benefit Area B ...............
Improvements to the South Agua Hedionda
Basin Interceptor System ........................
EDU Information for South Agua Hedionda Basin
Interceptor System ............................
Improvements for Benefit Area D .................
EDU Information for Benefit Area D ..............
Improvements for Benefit Area E .................
EDU Information for Benefit Area E ...............
Improvements for Benefit Area F .................
EDU Information for Benefit Area F ..............
Improvements for Benefit Area G .................
EDU Information for Benefit Area G ..............
Improvements for Benefit Area H .................
EDU Information for Benefit Area H ..............
Improvements for Beneift Area I .................
EDU Information for Benefit Area I ...............
Improvements to North Batiquitos Basin
Interceptor System ............................
Interceptor System ............................
EDU Information for North Batiquitos Basin
Reimbursements for the Occidental/Ponto
Trunk ......................................
... 111
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I Table 2-22 u Table 2-23
Table 2-24
Table 2-25
Table 2-26
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LIST OF TABLES (Continued)
PAGE N4
Reimbursements for the Ayres/Batiquitos
Trunk .......................................
Improvements for Benefit Area J ................. i
EDU Information for Benefit Area J .............. :
Improvements for Benefit Area K ................. :
EDU Information for Benefit Area K .............. :
iv
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I LIST OF FIGURES
D PAGE N4
1
I Figure 2-1 Benefit Fee Areas D . . D *. . . . . D e . . . m - - - . . . . - . . - - .
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CHAPTER I
INTRODUCTION
0 The City of Carlsbad sewer capacity fee includes improvements to the Enci~
Water Pollution Control Facility, the Vista/Carlsbad Interceptor, the La1
Calavera Hills Water Reclamation Plant and the Home Plant Lift Statio
Construction of the facilities funded by the city wide capacity fee does n 1 provide a sewer line to each of the City’s growth management zones. Th
1
I there are a number of conveyance facilities which will need to be funded
more than one growth management zone.
This report provides recommended boundaries for benefit areas for faciliti B recommended in the December, 1987 Master Plan of Sewerage. In most cas
these facilities will probably be built by a developer. This developer will th
be eligible for reimbursement by subsequent developers within the benefit are
established in this report. Reimbursement fees for the Occidental/Ponto Tru
and Ayres/Batiquitos Trunk have also been included.
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1
1 RECOMMENDATIONS @
Adopt the benefit areas A through M and establish an estimated cost per u: D for development of the conveyance system in these benefit areas as present
B in Table 1-1.
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TABLE 1-1
SUMMARY OF BENEFIT AREAS
SUMMARY OF CHANGES
1. Provide a second fee above the city wide capacity fee to fund conveyar
system improvements.
2
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2. Provide a fee-based system for the construction of or reimbursement fc
construction of conveyance systems to each sub-basin established in tk
December, 1987 Master Plan of Sewerage.
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CHAPTER 2
FEE AREAS
All costs presented in this report are based on facilities recommended in th
December, 1987 Master Plan of Sewerage. Costs for these facilities have bee
increased based on an ENR-CCI-LA of 5,800. Where better data is current1
available on facility costs, other adjustments have been made. The number (
units in each subbasin is also based on information presented in the Decembe
1987 Master Plan of Sewerage. Unit counts have been updated to reflel
current development status and projections.
Figure 2-1 shows the boundaries of the recommended fee areas. Exhibit A fro
the December, 1987 Master Plan of Sewerage may be found in the pocket at tl
back of this report and shows the location of the reach designations called 01
in the tables in this chapter.
4
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I r 8ENEFIT FIGURE
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B
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NORTH AGUA HEDIONDA INTERCEPTOR BASIN
There are no interceptor improvements needed in the North Agua Wedionc
Interceptor Basin. Benefit Area B is the only benefit area in the North AgL
Hedionda Basin.
Benefit Area B
Benefit Area B contains sewer drainage zones 7B and f4B. This benefit arc
has 644 estimated future units and an estimated cost of trunk improvements
$316,000. The estimated fee for this benefit area is $491 per unit. Table 2
provides a summary of the improvements needed for the benefit area, and Tab
2-4 provides a summary sf the units by sewer drainage zone.
IMPROVEMENTS FOR BENEFIT AREA B
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SOUTH AGUA HEDIONBA BASIN
The South Agua Hedionda Basin contains Benefit Areas C, D, E, and
Interceptor improvements are needed in the South Agua Hedionda Bas
System. These interceptor improvements will serve zones 5A, 5B, 5D, 7C,
14A, 15A, 15B, 16, 24A, 24B, 24C and 18A. The South Agua Hedionda Bas
has 11,307 estimated future units and an estimated cost of intercept
improvements of $4,600,621. The estimated fee for these improvements is $41
per unit.
Table 2-5 provides a summary of the improvements needed and Table 2
provides a summary of the units by sewer drainage zone. The estimated $4
per unit will be added to all benefit areas in the South Agua Hedion
Interceptor Basin to pay for the interceptor improvements.
I I/ TABLE 2-5
IMPROVEMENTS TO SOUTH AGUA HEDIONDA
BASIN INTERCEPTOR SYSTEM
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TABLE 2.6
EDU INFORMATION FOR SOUTH AGUA HEDIONDA
BASIN INTERCEPTOR SYSTEM
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5A 1 -a- I 383 I 383
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18A I --= I g32 I 832
24A I ~~ ~ ~~
1 I I 250 I 251
I I
24B 114 "- 114 I I I ~ ~~
24C I "- I 77 I 77
10
a
I Benefit Area C
Benefit Area C contains sewer drainage zone 8. This benefit area has 1,4~ ' estimated future units. There are no trunk improvements needed in this benei
area and, therefore, the total fee per unit within Benefit Area C is $407. Th
fee is based solely on the interceptor system improvements needed in the Sou
Agua Hedionda Interceptor Basin.
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Benefit Area D
Benefit Area D contains sewer drainage zones 7C, 14A, and 15A. This bene
area has 2,891 estimated future units and an estimated cost of tru.
improvements of $1,092,000. The estimated fee for this benefit area is $785 p I " .-. ' unit. Table 2-13 provides a summary of the improvements needed for the bene
area, and Table 2-8 provides a summary of the units by sewer drainage zonc I
1 TABLE 2-7
19
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/I IMPROVEMENTS FOR BENEFIT AREA D
I 11
B
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Benefit Area E
Benefit Area E contains sewer drainage zones 5A, 5D, 15B, 16, 24A, 24B a1
P8A. This benefit area has 5,447 estimated future units and an estimated co
of trunk improvements of $2,155,000. The estimated fee for this benefit arc
is $803 per unit. Table 2-9 provides a summary of the improvements needed f~
the benefit area, and Table 2-10 provides a summary of the units by sew
drainage zone.
TABLE 2-9
IMPROVEMENTS FOR BENEFIT AREA E
II I I I I
SAHTlE 503,000 4,540 15 Rancho Carlsbad,
Sunny
Creek Road
SAHTlF 137,000 2,000 8 Future College Blvd.
II I I I I I 11 SAHTlG I El Camino Real I 18 I 2,500 1 316,000
13
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Benefit Area F
Benefit Area F contains sewer drainage zones 5B and 24C. This benefit are
has 1,524 estimated future units and an estimated cost of trunk improvemen
of $720,000. The estimated fee for this benefit area is $879 per unit. Table :
11 provides a summary of the improvements needed for the benefit area, a1
Table 2-12 provides a summary of the units by sewer drainage zone.
TABLE 2-11
IMPROVEMENTS FOR BENEFIT AREA F
SAIPT3A 103,000 1,500 8 Future Macario
Canyon Road
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BUENA/SAN MARCOS INTERCEPTOR BASIN
There are no interceptor improvements in the Buena/San Marcos Intercept(
Basin. Benefit Areas G, H, and I fall within this basin.
Benefit Area G
Benefit Area G contains sewer drainage zones 5C, 5E, 5F and 51 . This bene
area has 1,692 estimated future units and an estimated cost of tru:
improvements of $128,000. The estimated fee for this benefit area is $76 p
unit. Table 2-13 provides a summary of the improvements needed for t
benefit area, and Table 2-14 provides a summary of th,e units by sewer draina
zone.
1. 1
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~ TABLE 2-14
II EDU INFORMATION FOR BENEFIT AREA G II
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Benefit Area H
Benefit Area H contains sewer drainage zones 6B, lOA, 10B, lOC, 17A, 17B an
P8B. This benefit area has 4,836 estimated future units and an estimated cos
of trunk improvements of $2,484,000. The estimated fee for this benefit are
is $514 per unit. Table 2-15 provides a summary of the improvements neede
for the benefit area, and Table 2-16 provides a summary of the units by sewe
drainage zone.
18
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I TABLE 2-15
I IMPROVEMENTS FOR BENEFIT AREA H
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TABLE 2-16
EDU INFORMATION FOR BENEFIT AREA H
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3
-
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-
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" -
20
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Benefit Area I
Benefit Area I contains sewer drainage zone 20B and fifty percent of Zone 201
This benefit area has 1,334 estimated future units and an estimated cost (
trunk improvements of $380,000. The estimated fee for this benefit area is $28
per unit. Table 2-17 provides a summary of the improvements needed for tl:
benefit area, and Table 2-18 provides a summary of the units by sewer drainag
!Zone.
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NORTH BATIQUITOS INTERCEPTOR BASIN
The North Batiquitos Basin includes Benefit Areas J, K, L, and M. The!
benefit areas include zones 4A (50%), 4B, 6A, 9, 19A, 19B, 19C, 19D, 20C, 211
21B and 22B. Benefit Areas J, K, and L have 4,013 estimated future units ar
the estimated cost of North Batiquitos Interceptor improvements is $2,095,04
The estimated fee for these benefit areas is $522 per unit. Table 2-19 providl
a summary of the improvements needed for the North Batiquitos Bas
Interceptor System, and Table 2-20 provides a summary of the units by sew1
drainage zone. The interceptor improvements cost of $522 per unit will I
added to the fees for Benefit Areas J, K, and L.
Reimbursement fees for previously constructed facilities are also required
the North Batiquitos Interceptor Basin. Benefit Areas J, K, L, and M have :
estimated 9,725 total buildout units and the reimbursement for tl
Occidental/Ponto Trunk is estimated to be $372,127. The fee of $38 per UI
shall apply to Benefit Area M and be added to Benefit Areas J, K, and L. Tab
2-21 provides a summary of reimbursements for the Occidental/Ponto Trm
Benefit Areas L and J have an estimated 4,916 total buildout units a]
reimbursement for the Ayres/Batiquitos Trunk is estimated to be $1,060,05
A fee of $216 per unit is added to Benefit Areas L and J for this reimburseme1
Table 2-22 provides a summary of reimbursements for the Ayres/Batiquit
Trunk.
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TABLE 2-19
/I IMPROVEMENTS TO NORTH BATIQUITOS
BASIN INTERCEPTOR SYSTEM
11 LIFT STATION IMPROVEMENTS
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North Batiquitos Lift Station and Force
Main Repairs 1,984,446'
Repairs to Ayres Sewer Trunk 1PQ,6Q01
1 From Aviara Land Associates letter to City Engineer, dated 12-27-90.
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TABLE 2-20
EDU INFORMATION FOR NORTH BATIQUITOS
BASIN INTERCEPTOR SYSTEM
4A (50%) I 1,090 25 I 1,115
4B I 886 0" I 886
6A I 407 122 I 529
9 I 514 1,256 I 1,770
19A "- 1,138 1,138
19B "- 894 894
20c I "_ 390 1 390
2PA I- ," 350 I 350
21B Do- 474 I ~ 474
22B 277 I 1,257 I 1,534
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TABLE 2-21
REIMBURSEMENTS FOR THE OCCIDENTAL/PONTO TRUNK
II Occidental/Ponto I 372,127 P I
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’ From City Engineer’s memorandum, dated 7-23-90,
1979 dollars escalated to 1990 dollars.
r TABLE 2-22
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REIMBURSEMENTS FOR THE AYRESIBATIQUITOS TRUNK
ll Ay-fes/Batiquitos I 1,060,070 I1 I
1 From City Engineer’s memorandum, dated 7-23-90,
1979 dollars escalated to 1990 dollars.
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Benefit Area J contains sewer drainage zones 6A, 19B, 19C, 21A and 21B. Th
benefit area has 2,300 estimated future units and an estimated cost of trul
improvements of $473,028. Table 2-23 provides a summary of the improvemen
needed for the benefit area, and Table 2-24 provides a summary of the units '
sewer drainage zone. The estimated fees for this benefit area also inch
North Batiquitos Interceptor improvements and reimbursements for t:
Occidental/ Ponto Trunk and Ayres/Batiquitos Trunk. The estimated fee f
this benefit area is $982 per unit.
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TABLE 2-23
IMPROVEMENTS FOR BENEFIT AREA J
II I I 473,028 ll NBT2 19B, 19c
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1 From estimate prepared by P&D Technologies for Aviara, dated 1-10-90.
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Benefit Area K contains sewer drainage zone 20C This benefit area has 39
estimated future units and an estimated cost of trunk improvements of $554,00(
Table 2-25 provides a summary of the improvements needed for the benefj
area, and Table 2-26 provides a summary of the units by sewer drainage zonz
The estimated fees for this benefit area also include North Batiquita
Interceptor improvements and reimbursement for the Occidental/Ponto Trunl
The estimated fee for this benefit area is $1,981 per unit.
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’ IMPROVEMENTS FOR BENEFIT AREA K
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TABLE 2-26
EDU INFORMATION FOR BENEFIT AREA K
Benefit Area L
Benefit Area L contains Basins 4B, 19A, and 19D. This benefit area has 1,32
estimated future units. This benefit area has no trunk improvements needed s
the estimated fee for this benefit area includes the North Batiquitos Intercept0
improvements and reimbursements for the Occidental/Ponto Trunk and th
Ayres/Batiquitos Trunk. The estimated fee for this benefit area is $776 pe
unit.
Benefit Area M
Benefit Area M contains Basins 9, 22B, and half of 4A. This benefit area ha
2,538 estimated future units. The estimated fee for this benefit area include
only the reimbursement of the Occidental/Ponto Trunk and is $38 per unit.
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CITY OF CARLSBAD
CAPACITY FEE UPDATE TO THE
DECEMBER 1987, MASTER PLAN
OF SEWERAGE
June 1990
Wilson Engineering
Consulting Engineers
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TABLE OF CONTENTS
PAGE NC
LliSTOFTABLES ..........................................
CHAPTER 1. INTRODUCTION ...............................
Recommendations
Revisions from the December 1987, Master Plan
.....................................
ofsewerage .........................................
CHAPTER 2. CAPITAL COSTS ...............................
Encina Water Pollution Control Facility Costs ..................
PhaseV ........................................
Solids Management ................................
Ocean Outfall
Vista/Carlsbad Interceptor ...............................
Other City of Carlsbad Capital Projects - ~ e ~ . o . a . r D e ~ s = (1 . . o c . ~
CHAPTER 3. CITY WIDE CAPACITY FEE .......................
Units ...............................................
Inflation and Interest 11
Sewer Construction Fund Obligations ...................... 11
PhaseIVProject ..................................
....................................
Bondpayments ...................................
..................................
EstimatedFees ...................................... 11
EXHIBITA .............................. ............. Pocke
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LIST OF TABLES
. PAGE N(
Table 2-1 Improvements to the Encina Water Pollution Control
Facility (All Figures in Thousands of Dollars) ..............
Table 2-2 Improvements to the Vista/Carlsbad Interceptor
Sewage Drainage Basin .............................
fable 2-3 Other City of Carlsbad Capital Projects (All
Costs in Thousands of Dollars) .......................
Table 3-1 Sum of Expenses (All Costs in Thousands of Dollars) n . e . - . .
Table 3-2 Sewer Capital Fund Cash Flow Projection ................
.. II
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CHAPTER 1
INTRODUCTION
In 1989, the City of Carlsbad elected to bond finance their portion of the Phasf
IV construction at the Encina Water Pollution Control Facility. These bond:
obligate the City of Carlsbad to pay back principle and interest in future years
The purpose of this report is to analyze the impact of these future bonc
payments and other cost increases and adjustments on the sewer eonnectiol
fees.
The assumptions used for determining future flows are derived from th
December 1987, Master PIan of Sewerage. Sizing the facility and cost data ar
obtained from the December 1987, Master Plan of Sewerage and the 1989-9
Encina Budget. All cost data has been revised to an ENR-CGI-LA of 5,800.
RECOMMENDATIONS
1. The City wide capacity fee should be changed to $1,610.
2. The City wide capacity fee should only cover costs for the Encina Watf
Pollution Control Facility, the Vista/Carlsbad Interceptor, and the Hor
Plant Pump Station.
3. A number of smaller sewer area fees should be established to fur
collection system improvements to bring a sewer line to each zor
subbasin as defined in the December, 1987, Master Plan of Sewerage ar
the Benefit Area Fee for Conveyance System Improvements dated Marl
1990.
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REVISIONS FROM THE DECEMBER 1987, MASTER PLAN OF SEWERAG
1. Bond payments have been included as an expense.
2. All conveyance system improvements other than the Vista/Carlsba
interceptor and Home Plant Pump Station and Force Main have bee
removed from the City wide capacity fee.
3. The Calavera Hills Water Reclamation Plant credit amount has been adde
as an expense to the sewer construction fund and improvement costs fc
the Calavera Hills Water Reclamation Plant have been removed.
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CHAPTER 2
CAPITAL COSTS
All capital costs are based on information presented in the December 198
Master Plan of Sewerage and the Encina Water Pollution Control Facility 19894
Budget. All costs have been increased to reflect an ENR-CCI-LA of 5,800.
ENCINA WATER POLLUTION CONTROL FACILITY COSTS
Table 2-1 presents a summary of the City of Carlsbad share of improvements
the Encina Water Pollution Control Facility over the next 30 years. The to‘
costs of these improvements is estimated to be $43,573,000.
Phase IV Proiect
Construction is currently underway on the Phase IV project. During the Pha
IV project, the City of Carlsbad’s ownership in the plant will change. Becau
the City of Carisbad’s ownership in the plant is changing, its share of projc
costs will not be established until construction is completed. We are estimati
that the City of Carlsbad’s share in the PhaseW plant and outfall projects will
23.5 percent. The Phase IV operations building improvements have not be
designed or constructed. The City of Carlsbad’s share in the operations buildi
improvements project will be based on their post-Phase IV ownership of 25.
percent. The Phase IV operations’ building construction is scheduled to be!
near the end of the Phase IV plant and outfall projects.
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Phase V
The Phase V project will not occur until after.the year 2000. For the purpose o
establishing capacity fees we are estimating it will occur in approximately thc
year 2005. The City of Carlsbad’s share in this project will be based on the
needed capacity. Our cost estimate is based on the City of Carlsbad obtainin
an additional treatment capacity of 5.09 million gallons per day during the Phas
V project.
Solids Manaqement
The solids management project will be done in two stages. The City (
Carlsbad’s share of the solids management project will be 24.19 percent. VC
have estimated the cost of land acquisition for this project at $5,000,000.
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Ocean Outfall
The City of Carlsbad's share of future ocean outfall costs will be 24.19 percent
For the purposes of estimating capacity fees, a reballasting project is schedule(
for the year 1993. A parallel ocean outfall will have to be built in conjunction wit1
the Phase V expansion project and it is also scheduled for the year 2005.
VISTA/CARLSBAD INTERCEPTOR
Table 2-2 provides a list of improvements needed to the Vista/Carlsba
Interceptor. The total estimated cost for these improvements is $6,863,00(
Exhibit A from the December 1987, Master Plan of Sewerage shows the locatic
of the reaches called out in Table 2-2. This exhibit is found in the pocket in tt-
back of this report.
OTHER CITY OF CARLSBAD CAPITAL PROJECTS
Table 2-3 lists the other City of Carlsbad capital projects included in the Ci
wide capacity fee. " The projects total $1,137,000 and include the Home Plant L
Station and Force Main improvements.
In addition to these specific City of Carlsbad improvements, we have includl
a category for miscellaneous City of Carlsbad capital improvement projeci
which is factored into the City wide capacity fee. The projected estimate
costs for the miscellaneous projects is $70,000 for each year through the ye
2020. . .".
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Encina Water Pollution
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(1 Home Plant Lift Station I 1,000 II II I I1 I( Home Plant Force Main I 137 ll
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CHAPTER 3
CITY WIDE CAPACITY FEE
In order to assess the impact of bond payments on the sewer construction fund
a year by year cash flow projection is needed. This year by year projection mu:
include estimated number of units, inflation rates and interest.
UNITS
On December 29, 1989, the City of Carlsbad had a total of 26,995 equivaler
dwelling units. The December 1987, Master Plan of Sewerage projects, at buil
out, that the City will have a total of 68,935 equivalent dwelling units. For tt
purpose of our capacity fee cash flow analysis, we have assumed that the Ci of Carlsbad will build out in the year 202Q. We have uniformly distributed ti.
dwelling units each year. Thus, for the years 1990 through 2019, 1 ,O:
equivalent dwelling units per year are assumed to be connected and in the fin
year of the projection 1,090 units are assumed to be connected to total 60,9:
equivalent dwelling units.
Bond Pavments
Bond payments for the Phase IV bonds are approximately $850,000 for the fii
three years from 1990 to 1992, and $1 ,I 20,000 for the remaining 22 years of t
bond issuance. This bond payment provides $1; 1,029,000 for the constructil
of the Encina Phase IV projects. These same ratios were utilized for a project
bond issuance in the year 2005 to cover the year 2005 expenses. Based or
total construction cost need of $53,853,000, bond payments for the year 20
through 2007 will be $4,150,000. For the remaining 22 years, bond paymer
will be $5,469,000.
INFLATION AND INTEREST
Construction costs were projected to increase 5 percent per year. Inter
income on the sewer construction fund was estimated to be 8 percent per ye
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SEWER CONSTRUCTION FUND OBLIGATIONS
Table 3-1 provides a summary of the expenses to the sewer construction fund.
The expenses include construction, bond payments and the Lake Calavera Hills
Water Reclamation Plant credit. The City of Carlsbad is obligated by contraci
to provide connection fee credits for the Lake Calavera Hills area. These credits
decrease the income to the sewer construction fund and show up as an expense
on this table.
ESTIMATED FEES
Table 3-2 shows a cash flow projection year by year needed to obtain a zerc
balance in the year 2029, and cover all estimated construction costs, bonc
payments and credits. In order for the sewer construction fund to have a zerc
balance in the year 2029, the present sewer connection fees should be changec
to $1,610.
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Table 3-1
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111 Table 3-2
Sewer Capital Fund Cash Flow Projection
' Beginning Fund Balance $7,418,000 1 12