HUMBOLDT COMMUNITY SERVICES...

OFFICE LOCATIONS:

Temecula – Corporate Headquarters32605 Temecula Parkway, Suite 100Temecula, CA 92592

San Francisco – Regional Office870 Market Street, Suite 1223San Francisco, CA 94102

California Satellite OfficesAtascadero, DavisHuntington Beach,Joshua Tree, RiversideSacramento, San Jose

www.nbsgov.com

Prepared by:

HUMBOLDTCOMMUNITYSERVICESDISTRICTReport for:

Water andWastewaterRate StudyMarch 2017

Humboldt Community Services DistrictWater and Wastewater Rate Study Report TOC

TABLE OF CONTENTS

Section 1. Executive Summary ........................................................................................... 1

Background and Purpose ....................................................................................................1

Key Findings.........................................................................................................................2

Study Recommendations ....................................................................................................3

Section 2. Overview of the Study Methodology ................................................................. 4

Rate Design Criteria.............................................................................................................4

Rate Structure Terminology ................................................................................................5

Section 3. Water Rate Study .............................................................................................. 8

Developing Recommended Water Rates ............................................................................8

Water Utility Revenue Requirements .................................................................................8

Characteristics of Water Customers by Class....................................................................10

Cost of Service Analysis – Water .......................................................................................12

Current vs. Proposed Water Rate Structures....................................................................13

Comparison of Current and Proposed Monthly Bills ........................................................13

Section 4. Wastewater Rate Study................................................................................... 16

Developing Recommended Wastewater Rates ................................................................16

Wastewater Utility Revenue Requirements......................................................................16

Cost of Service Analysis – Wastewater .............................................................................18

Current vs. Proposed Wastewater Rates ..........................................................................20

Section 5. Recommendations And Next Steps .................................................................. 24

Consultant Recommendations..........................................................................................24

Next Steps..........................................................................................................................24

Section 6. Appendix A - Abbreviations & Acronyms ......................................................... 25

Section 7. Appendix B – Water Rate Summary Tables ...................................................... 27

Section 8. Appendix C – Wastewater Rate Summary Tables ............................................. 29

Humboldt Community Services DistrictWater and Wastewater Rate Study Report TOF

TABLE OF FIGURESFigure 1. Regional Rate Comparisons................................................................................................................... 3Figure 2. Primary Components of a Rate Study ................................................................................................... 4Figure 3. Summary of Water Revenue Requirements........................................................................................ 10Figure 4. Summary of Water Reserve Funds ...................................................................................................... 10Figure 5. Water Consumption by Customer Class .............................................................................................. 11Figure 6. Peaking Factors by Customer Class ..................................................................................................... 11Figure 7. Number of Accounts by Customer Class ............................................................................................. 11Figure 8. Summary of Fixed and Variable Rate Revenue Requirements............................................................ 12Figure 9. Summary of Adjusted Rate Revenue Requirements by Customer Class............................................. 12Figure 10. Current and Proposed Water Rates Fiscal Year 2016/17 – 2021/22................................................. 13Figure 11. Monthly Water Bill Comparison for SFR Customers.......................................................................... 14Figure 12. Monthly Water Bill Comparison with Other Communities ............................................................... 14Figure 13. Monthly Water Bill Comparison for Commercial Users .................................................................... 15Figure 14. Summary of Wastewater Revenue Requirements ............................................................................ 17Figure 15. Summary of Wastewater Reserve Funds .......................................................................................... 17Figure 16. Summary of Estimated Flow to Treatment Plant .............................................................................. 18Figure 17. Summary of Annual Flow and Strength (BOD) Characteristics by Customer Class: .......................... 19Figure 18. Summary of Annual Flow and Strength (TSS) Characteristics by Customer Class:............................ 19Figure 19. Summary of Wastewater customer Accounts and EDU’s ................................................................. 20Figure 20. Summary of Adjusted Rate Revenue Requirements by Customer Class........................................... 20Figure 21. Current and Proposed Wastewater Rates Fiscal Year 2016/17 – 2021/22 ....................................... 21Figure 22. Monthly Single-Family Wastewater Bill Comparison ........................................................................ 22Figure 23. Monthly Single-Family Wastewater Bill Comparison with Other Communities ............................... 22Figure 24. Monthly Medium-Strength Commercial Wastewater Bill Comparison ............................................ 23

Humboldt Community Services DistrictWater and Wastewater Rate Study Report 1

Section 1. EXECUTIVE SUMMARYBackground and Purpose

BACKGROUNDThe District was created in 1952 to provide water and wastewater service to the unincorporated areas ofEureka. The District maintains more than 160 miles of water and wastewater pipelines, 10 water storagetanks and more than 40 wastewater and water pumping stations over a 15 square-mile area. This ratestudy was performed concurrently with a water and wastewater rate study for the City of Eureka (City).The City and the District have interconnected water and wastewater systems – the District purchases aportion of their water from the City and sends all effluent to the City’s wastewater treatment plant.

Periodically, due to increases in energy costs, compliance with State and Federal regulations,transportation, contractual obligations with other agencies, equipment and supply costs, the District mustreexamine the amount of funds the District requires to continue to provide a high level of customer serviceand sustain this vast amount of infrastructure.

Humboldt Community Services District (HCSD or District) last performed a rate study for the wastewaterutility in 2012; for the water utility, the most recent study is more than five years old. The District retainedNBS in June 2016 to perform a rate study for both utilities as well as evaluate alternative rate structuresand address other rate-related issues such as reduced water sales, changes in costs, and how costs areallocated to customer classes.

The District’s Board of Directors adopted a timeline for implementation of a rate study process at theirDecember 13, 2016 Board Meeting. Per that process, the District’s Board conducted a public workshop attheir January 10, 2017 Board meeting; reviewed and discussed at the Board meetings of January 24 andFebruary 7, 2017; adopted a rate alternative based upon information summarized in this document at theirFebruary 28, 2017 Board meeting; and directed District staff to proceed with the Proposition 218 rateadoption process at their March 14, 2017 Board meeting. This document provides a summary compilationof the wastewater and water rate study information used by the Board to adopt five-years of new rates.

PURPOSEThe overall purpose of the rate study was to develop the proposed water and wastewater rates. The ratestudy required thoroughly reviewing and confirming the District’s broader rate-related goals andobjectives, including key financial parameters, and ensuring the new rates reflect the District’s uniquecharacteristics and provide long-term revenue stability.

The rates developed in this study are intended to meet the requirements of Proposition 218 (Prop 218),commonly referred to as the “right to vote on new taxes” act, and were developed in a manner that isconsistent with industry standards. This report is provided in part to assist the District in its effort tocommunicate transparently with the residents and businesses it serves.

In developing proposed utility rates, NBS and District staff worked cooperatively in developing study resultsand rate alternatives. The District’s Board of Directors reviewed initial results, provided NBS and Districtstaff with feedback and direction, and ultimately approved the water and wastewater rates.


Key Findings

REVENUE REQUIREMENTS AND PROJECTED RATESThe District’s water and wastewater utilities both need to complete ongoing rehabilitation andreplacement projects while at the same time building and maintaining healthy reserve funds. Annual rateincreases over the next five years are recommended for both utilities1, as follows:

Water – 39 percent in FY 2017/18 (Year 1); 7 percent in Year 2; 3 percent in Year 3; 2 percent in Year4; and 1.5 percent in Year 5.

Wastewater – 27 percent in FY 2017/18 (Year 1); 10 percent in Year 2; and 2 percent in Years 3, 4and 5.

WATER RATESDue to the source and cost of the District’s water supply, which make it difficult to establish a defensiblecost basis for multiple volumetric tiers, the District elected to maintain a uniform (single-tier) rate designrather than change to a multi-tiered rate design. Category 1 and Category 2 classifications for fixed waterrates were no longer needed and were therefore revised – all District customers will pay the same fixedmonthly rate by meter size.

The water utility’s need to build reserves and pay for ongoing capital repair and replacement costs werekey considerations in developing the proposed water rates. While it was not possible to fund all plannedcapital expenditures, District staff believe the proposed rates allow for sufficient expenditures at this time.Although significant increases are proposed, customer bills under the recommended water rates stillcompare favorably with other communities in the region.

WASTEWATER RATESThe current wastewater rate design was largely retained; however, some customer classes were combinedinto other existing classes. Wastewater customers will be charged a monthly fixed service charge by livingunit, a monthly customer service charge per account, and a volumetric charge based on waterconsumption. As with water rates, although significant increases are recommended, customer bills underthe recommended wastewater rates still compare favorably with other communities in the region.

Figure 1 below shows the monthly combined water and wastewater bill for a typical single-family customerin the District compared to monthly bills in other communities.

1 More specifically, these are increases in the total rate revenue; the rates increases for each customer class reflect cost allocationfactors that result in some rates being more or less than the annual increases noted here.


FIGURE 1. REGIONAL RATE COMPARISONS

Study RecommendationsAt the February 28th Board meeting, the Board selected the recommended water and wastewater alternativepresented in this report and then at the March 14th directed staff to proceed with the Prop 218 noticingprocedures. In light of these actions, NBS recommends the District take the following measures:

Conduct a legal review of the proposed rates. Proceed with Prop 218 noticing requirements and 45-day protest period. Assuming a successful Prop 218 process (that is, there is no majority protest of the rates), adopt the

rates summarized in this report.

The next section discusses rate study methodology.


Section 2. OVERVIEW OF THE STUDY METHODOLOGYComprehensive rate studies such as this one typically include three components: (1) preparation of afinancial plan, which identifies the net revenue requirements for the utility; (2) analysis of the cost to serveeach customer class, and; (3) the rate structure design. These steps are shown in Figure 2 and are intendedto follow industry standards and reflect the fundamental principles of cost-of-service ratemakingembodied in the American Water Works Association (AWWA) Principles of Water Rates, Fees, andCharges2, also referred to as Manual M1.

FIGURE 2. PRIMARY COMPONENTS OF A RATE STUDY

N

This methodology also addresses requirements under Proposition 218 that rates not exceed the cost ofproviding the service and be proportionate to the cost of providing service for all customers. In terms ofthe chronology of the study, these three steps represent the order they were performed in this Study forall both utilities.

As a part of this rate study, NBS projected revenues and expenditures, developed net revenuerequirements, performed cost-of-service rate analyses, and prepared new utility rates for the District. As aresult of this study, rate increases – or more accurately, increases in the total revenue collected from rates –are recommended for each utility. The District provided NBS with the necessary data, including historical,current and projected revenues, expenditures, customer accounts and water consumption, along withother operational and capital cost data.

Rate Design CriteriaIt is important for utilities to send proper price signals to its customers about the actual cost of providingservice. This objective is typically addressed through both the magnitude of the rates and the ratestructure design. In other words, both the amount of revenue collected and the way in which the revenueis collected from customers are important.

Several criteria are typically considered in setting rates and developing sound rate structures. Thefundamentals of this process have been documented in a number of rate-setting manuals. For example,the foundation for evaluating rate structures is generally credited to James C. Bonbright in the Principles of

2 Principles of Water Rates, Fees, and Charges, Manual of Water Supply Practices, M1, AWWA, seventh edition, 2017.

Step 3: Rate Design - Considerswhat rate structure will best meetthe District’s need to collect raterevenue from each customer class.

Step 2: Cost-of-Service Analysis –Proportionately allocates the revenuerequirements to the customer classesin compliance with industry standardsand State Law.

Step 1: Financial Plan/ RevenueRequirements – Compares currentsources and uses of funds anddetermines the revenue neededfrom rates and project rateadjustments.

FINANCIAL PLAN/REVENUEREQUIREMENTS

COST-OF-SERVICEANALYSIS

RATE DESIGNANALYSIS1 2 3


Public Utility Rates3, which outlines pricing policies, theories, and economic concepts along with variousrate designs. The other common industry standard is the American Water Works Association’s (AWWA)Manual M1.

The following is a simplified list of the attributes of a sound rate structure, which apply to water andwastewater utilities:

Rates should be easy to understand from the customer’s perspective. Rates should be easy to administer from the utility’s perspective. Rates should promote the efficient allocation of the resource. Rates should be equitable and non-discriminating (i.e., cost based). There should be continuity in the ratemaking philosophy over time. Other utility policies should be considered (e.g., encouraging conservation & economic

development). Rates should consider the customer’s ability to pay. Rates should provide month-to-month and year to year revenue stability.

Rate Structure TerminologyOne of the most fundamental points in considering rate structures is the relationship between fixed andvariable costs. The vast majority of water and wastewater rate structures contain a fixed or minimumcharge, and a volumetric charge.

The District’s rate design criteria are unique to the characteristics of the District’s utilities. Capital andoperational reserve funding targets used in this study have been established with the input of District staffin order to meet specific utility objectives. The following discussion describes general industry rate-studypractices in California and principals that were reflected in the recommended rates.

FIXED CHARGES

Fixed charges can be called base charges, minimum monthly charges, customer charges, fixed metercharges, etc. Although fixed charges are typically a significant percentage of the utility’s overall coststructure, utilities rarely collect 100% of their fixed costs through fixed charges. In general, customersprefer that charges include a volumetric component, as there is an inherent and widely recognized equityin a “pay-for-what-you-use” philosophy.

For a water utility, fixed charges typically increase by meter size. For example, a customer with a 2" metermay have a fixed meter charge that is eight times greater than the 5/8” meter charge based on the meter’smaximum flow rate.4 Because a large portion of water utilities’ costs are typically related to meetingcapacity requirements, reflecting the capacity demands of each meter size is important in establishingequitable fixed charges for customers.

3 James C. Bonbright; Albert L. Danielsen and David R. Kamerschen, Principles of Public Utility Rates, (Arlington, VA: Public UtilitiesReport, Inc., Second Edition, 1988), p. 383-384.

4 These are typically referred to as “hydraulic capacity factors” that represent the relative capacity required in the water system.See American Water Works Association, Water Meters – Selection, Installation, Testing and Maintenance, M6 Manual, Table 5-3.


VARIABLE (CONSUMPTION-BASED) CHARGES

In contrast, variable costs such as the cost of purchased water, electricity used in pumping water, andchemicals used in the water and wastewater treatment facilities tend to change with the quantity of waterproduced (or wastewater effluent treated). For water utilities, variable charges are generally based onmetered consumption and charged on a dollar-per-unit cost (per 100 cubic feet, or hcf, in the District’scase).

There are significant variations in the basic philosophy of variable charge rate alternatives. Under auniform (single tier) water rate structure, the cost per unit does not change with consumption, andprovides a simple and straightforward approach from the perspective of customer understanding and rateadministration/billing. A similar volumetric rate is often used for wastewater utilities to reflect the flow-related costs (i.e., sewage effluent) as well as the costs of treating the level of wastewater “strength” (i.e.,the amount of biochemical oxygen demand (BOD) and total suspended solids (TSS) constituents).

KEY FINANCIAL ASSUMPTIONS

The following are the key assumptions used in the water and wastewater rate analyses:

Funding Capital Projects – The analysis for both utilities assumes:

Capital costs attributable to existing customers are funded with rate revenue. Capital costs attributable to growth, or expansion-related costs, will be funded through

connection fee revenue. All capital projects listed in the financial plans are District projections.

Reserve Targets for Water and Wastewater – Reserves for operations and capital needs are set atlevels established by District staff and District Board, and are slightly lower than typical industrystandards in an attempt to minimize rate increases. Reserve targets used in the analysis are asfollows:

Operating & Maintenance Reserve – 60 days (typical industry standard target is 90 days) Capital Rehabilitation and Replacement Reserve – 3 percent of net asset values

Pass Through Charges – Increases to purchased water and wastewater treatment costs above whatis proposed for the next five-years in the adopted rate study. Pass through charges are intended tokeep rates low while recovering additional costs charged by wholesale water or wastewatertreatment providers – in the District’s case, this includes purchased water costs from Humboldt BayMunicipal Water District and the City of Eureka, and wastewater treatment costs from City ofEureka. Pass through charges will be calculated by an adopted formula5 and charged as a $/hcfsurcharge for both water and wastewater billed consumption.

Inflation and Growth Projections – Inflation and growth projections are applied equally to thewater and wastewater utilities:

General inflation is 3 percent annually, per District projections. Customer growth is 0 percent annually, per District projections.

5 Pass through charge structure is designed to adhere to California Government Code 53756. District is required to provide at leasta 30-day notice to customers for implementation or adjustments to the pass through charges.


Labor cost inflation is 4 percent annually, per District estimates. Energy cost inflation is 3 percent annually, per District projections. Chemical cost inflation is 5 percent annually, per District projections.

The next two sections discuss the water and wastewater rate studies in further detail.


Section 3. WATER RATE STUDYDeveloping Recommended Water RatesThe water rate analysis was undertaken with a few specific objectives in mind, including:

Generating sufficient additional revenue needed to meet projected funding requirements, Providing revenue stability, Providing equity among customer classes, Incorporating projected water consumption levels.

NBS developed several water rate alternatives as requested by District staff over the course of this study.All rate structure alternatives were developed using industry standards and cost-of-service principles.District staff, with input from the Board of Directors, selected the rate alternative recommended in thisreport. The following are the basic components included in this analysis:

Developing Cost Allocations: The water revenue requirements were “functionalized” into threecategories: (1) fixed capacity costs; (2) variable (or volume-based) costs; and (3) customer servicecosts. Each of these functional costs has a distinct allocation factor used to determine revenuerequirements by customer class.

Determining Revenue Requirements by Customer Class6: Revenue requirements for each customerclass were determined based on allocation factors such as water consumption, capacity peakingfactors, and number of accounts by meter size. For example, volume-related costs are allocatedbased on the water consumption for each class, while customer costs are allocated based onnumber of accounts. Once the costs are allocated and revenue requirement for each customer classis determined, collecting these revenue requirements from each customer class is addressed in therate design task.

Rate Design and Fixed vs. Variable Costs: Fixed costs, such as capacity-related and infrastructurecosts, billing, and general administrative costs, are typically collected through a fixed monthlycharge, while variable costs such as pumping and purchased water costs are typically collectedthrough volumetric charges. While this study determined that the District’s fixed and variable costsare approximately 57% fixed and 43% variable, California law7 and industry practices provideflexibility regarding the actual percentages collected from fixed vs. variable rates. After evaluatingvarious rate alternatives, a rate structure that recovers 52% fixed and 48% variable charges isproposed, based on direction from District staff and the District Board.

Water Utility Revenue RequirementsIt is important for municipal utilities to maintain reasonable reserves in order to handle emergencies, fundworking capital, maintain a good credit rating, and generally follow sound financial management practices.Rate increases are governed by the need to meet these objectives as follows:

6 In the District’s case, meter sizes serve as customer classes for the water utility while more traditional customer classes, such assingle-family, multi-family, and commercial classes were used for the wastewater utility.

7 For example, AB 2882 allows a variety of conservation-oriented rate structures, including tiered water rates, and the CaliforniaUrban Water Conservation Council recommends recovering 70 percent of rate revenue through volume-based rates. However,water utilities generally develop their own policy and conservation objectives.


Meeting Operating Costs: For Fiscal Years 2016/17 through 2021/22, the net revenue requirement(i.e., total annual O&M expenses, debt service, and rate-funded capital costs less non-raterevenues) is estimated to be approximately $4.2 mil to $4.7 mil. If no rate increases areimplemented, current revenue is expected to be insufficient to cover these operating costs.

Maintaining Adequate Bond Coverage: The District is required by its bond covenants for its 1988and 2012 water bonds to maintain debt-service coverage ratios of at least 1.20. The benefit ofmaintaining a higher coverage ratio is that it strengthens the District’s credit rating, which can helplower the interest rates for debt-funded capital projects, and in turn reduce annual debt servicepayments. However, this analysis assumes that the District will not be incurring new debt to fundthe planned capital expenses. It is projected that, with the recommended rate increases, the Districtwill meet the 1.20 debt coverage ratio for all existing and anticipated debt through Fiscal Year2021/22.

Building and Maintaining Reserve Funds: If no rate increases are implemented, reserves areexpected to essentially be depleted by FY 2018/19. This is due to the District’s net operating deficit:projected revenues are insufficient to meet annual expenses. Implementing annual rate increasesbuilds target reserve fund levels to appropriate levels. Primarily to minimize impacts on ratepayers,District staff chose to use the following reserve targets:

Operating Reserves equal to about 16 percent of the utility’s annual operating expenses. Thisreserve target is equal to a two-month (or 60-day) cash cushion for normal operations. ForFiscal Year 2016/17, this is estimated to be $605,000. This reserve is intended to preservefinancial viability in the event of short-term fluctuations in revenues and/or expenditures,including those due to weather patterns, the natural billing cycle cash flows, variability involume-based rates, and changes in the age of receivables.

Capital Reserves of 3 percent of net assets serves as a starting point for addressing longer-term capital needs. For Fiscal Year/17, this is estimated to be $485,000. If ratepayers cangenerate this level of revenues, the District will have reserved a partial cash resource that canbe applied toward future capital replacement and rehabilitation needs.

Debt Reserves for the water utility’s debt obligations has a target of $460,000; however,paying off the existing debt service obligations in FY 2025/26 will eliminate the need for thisreserve.

Figure 3 summarizes the sources and uses of funds and net revenue requirements for the next five years,and includes the recommended annual rate increases.


FIGURE 3. SUMMARY OF WATER REVENUE REQUIREMENTS

Figure 4 summarizes the projected reserve fund balances and reserve targets. A summary of the waterutility’s proposed 10-year financial plan, which is included in Appendix B – Water Rate Study SummaryTables, includes revenue requirements, reserve funds, revenue sources, proposed rate increases, and theDistrict’s capital improvement program.

FIGURE 4. SUMMARY OF WATER RESERVE FUNDS

Characteristics of Water Customers by ClassWater customer characteristics are used in allocating costs in the cost-of-service analysis. The District’smost recent data by customer class includes the consumption data in Figure 5, peaking factors in Figure 6,and the total number of accounts in Figure 7.

BudgetFY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22

Sources of Water FundsRate Revenue Under Prevailing Rates 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$Non-Rate Revenues 83,965 79,481 79,481 79,481 79,481 79,481Interest Earnings 9,751 2,725 891 263 2,422 3,150

Total Sources of Funds 3,343,716$ 3,332,206$ 3,330,372$ 3,329,745$ 3,331,903$ 3,332,631$Uses of Water Funds

Personnel Expenses 1,491,161$ 1,550,807$ 1,612,839$ 1,677,353$ 1,744,447$ 1,814,225$Purchased Water 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717Operating Expenses 680,446 700,968 722,111 743,893 766,336 789,457Debt Service 503,247 408,677 408,677 408,677 405,197 232,907Rate-Funded Capital Expenses 172,495 1,090,511 857,816 565,744 778,720 579,637

Total Use of Funds 4,303,065$ 5,206,680$ 5,057,159$ 4,851,384$ 5,150,416$ 4,871,943$Surplus (Deficiency) before Rate Increase (959,349)$ (1,874,474)$ (1,726,787)$ (1,521,639)$ (1,818,513)$ (1,539,311)$Additional Revenue from Rate Increases (1) - 1,267,500 1,583,725 1,728,737 1,828,311 1,904,486Surplus (Deficiency) after Rate Increase (959,349)$ (606,974)$ (143,062)$ 207,097$ 9,799$ 365,175$Projected Annual Rate Increase 0.00% 39.00% 7.00% 3.00% 2.00% 1.50%Cumulative Rate Increases 0.00% 39.00% 48.73% 53.19% 56.26% 58.60%Net Revenue Requirement (2) 4,209,349$ 5,124,474$ 4,976,787$ 4,771,639$ 5,068,513$ 4,789,311$

1. Assumes new rates are implemented July 1, 2017.2. Total Use of Funds less non-rate revenues and interest earnings. This is the annual amount needed from water rates.

Summary of Sources and Uses of Funds andNet Revenue Requirements

Projected


Operating ReserveEnding Balance (353,575)$ (960,550)$ (1,103,612)$ (896,515)$ (886,716)$ (521,541)$Recommended Minimum Target 605,000 618,000 632,000 646,000 661,000 677,000

Capital Rehabilitation & Replacement ReserveEnding Balance 1,138,744$ 1,138,744$ 1,138,744$ 1,138,744$ 1,138,744$ 1,138,744$Recommended Minimum Target 484,000 507,800 524,200 531,600 545,000 552,100Total Ending Balance 785,169$ 178,195$ 35,132$ 242,230$ 252,029$ 617,203$Total Recommended Minimum Target 1,089,000$ 1,125,800$ 1,156,200$ 1,177,600$ 1,206,000$ 1,229,100$

Beginning Reserve Fund Balances andRecommended Reserve Targets

Projected


FIGURE 5. WATER CONSUMPTION BY CUSTOMER CLASS

FIGURE 6. PEAKING FACTORS BY CUSTOMER CLASS

FIGURE 7. NUMBER OF ACCOUNTS BY CUSTOMER CLASS

Customer Class2015 (CY)

Volume (hcf)(1)

% Adjustmentfor

Conservation(2)

Estimated FY2016/17 Volume

Adjusted forConservation

Percent ofTotal Volume

Residential 450,718 0% 450,718 74.1%Multi-Family Residential 57,067 0% 57,067 9.4%Mobile Home Park 23,117 0% 23,117 3.8%Commercial 57,962 0% 57,962 9.5%Church 1,629 0% 1,629 0.3%School 14,445 0% 14,445 2.4%Irrigation/Landscaping 3,651 0% 3,651 0.6%Total 608,589 0% 608,589 100%

1. Consumption data is based on the HCSD's billing data.2. Production dropped approximately 20% from 2013 to 2015. No additional conservation is assumed.

Development of the Commodity Allocation Factor

Development of the Capacity Allocation Factors

Customer ClassAverage

Monthly Use(hcf)

Peak MonthlyUse (hcf) (1)

Peak MonthlyFactor

Max MonthCapacity Factor

Residential 37,560 54,742 1.46 75.6%Multi-Family Residential 4,756 5,801 1.22 8.0%Mobile Home Park 1,926 2,405 1.25 3.3%Commercial 4,830 6,590 1.36 9.1%Church 136 271 2.00 0.4%School 1,204 1,886 1.57 2.6%Irrigation/Landscaping 304 747 2.46 1.0%Total 50,716 72,442 1.43 100%

1. Based on peak monthly data (peak day data not available).

Development of the Customer Service Allocation Factor

Customer Class Number ofMeters (1)

Percent ofTotal

Residential 6,972 91.7%Multi-Family Residential 356 4.7%Mobile Home Park 9 0.1%Commercial 213 2.8%Church 18 0.2%School 15 0.2%Irrigation/Landscaping 19 0.2%Total 7,602 100.0%

1. Meter Count data is based on the HCSD's billing data for September 2016.


Cost of Service Analysis – WaterAs previously noted in Figure 2, the purpose of the cost-of-service analysis is to fairly and equitably allocateannual water utility revenue requirements to customer classes, while the rate design determines the actualrates within each customer class. The first step of separating costs into commodity-, capacity-, andcustomer-related cost classifications is based on their functional purpose in the water utility: results aresummarized in Figure 8, while more detailed fixed and variable allocations are shown in Appendix B.

FIGURE 8. SUMMARY OF FIXED AND VARIABLE RATE REVENUE REQUIREMENTS

The next step is to allocate these commodity-related, capacity-related, and customer-related costs to eachcustomer class based on the allocation factors previously shown in Figure 5 through Figure 7, as follows:

Water consumption (Figure 5) is used to allocate commodity-related variable costs shown in Figure8. For example, single-family commodity-related costs are 74.1% of $2.168 million, or $1,605,906.8

Peaking factors (Figure 6) are used to allocate the capacity-related costs shown in Figure 8; single-family capacity-related costs are 75.6% of $2,145 million, or $1,621,519.

Number of meters (Figure 7) are used to allocate the customer-related costs shown in Figure 8;single-family customer-related costs are 91.7% allocation of $203,000, or $186,440.

The results of this cost allocation process are summarized in Figure 9:

FIGURE 9. SUMMARY OF ADJUSTED RATE REVENUE REQUIREMENTS BY CUSTOMER CLASS

8 In each of these examples, there are more decimal places used in the calculations than indicated in the numbers shown here.Because of this, results shown may not exactly duplicate the actual calculation.

Commodity-Related Costs Variable 2,168,400$ 48.0%Capacity-Related Costs Fixed 2,145,813 47.5%Customer-Related Costs Fixed 203,288 4.5%Net Revenue Requirement 4,517,500$ 100%

Classification Components

(52% Fixed / 48% Variable)

Adjusted Net RevenueRequirements (2017/18)

Fixed &Variable Cost

Allocations

Residential 1,605,906$ 1,621,519$ 186,440$ 3,413,866$ 75.6%Multi-Family Residential 203,329$ 171,832$ 9,520$ 384,681$ 8.5%Mobile Home Park 82,366$ 71,239$ 241$ 153,845$ 3.4%Commercial 206,518$ 195,203$ 5,696$ 407,417$ 9.0%Church 5,804$ 8,027$ 481$ 14,313$ 0.3%School 51,467$ 55,865$ 401$ 107,734$ 2.4%Irrigation/Landscaping 13,008$ 22,127$ 508$ 35,644$ 0.8%Total Net Revenue Requirement 2,168,400$ 2,145,813$ 203,288$ 4,517,500$ 100%

VARIABLE$2,168,400

Total Net Revenue Requirementby Classification Component

FIXED$4,517,500$2,349,100

Customer ClassesClassification Components Cost of Service

Net Rev.Req'ts

% of COSNet

RevenueCommodity-

Related CostsCapacity-

Related CostsCustomer-

Related

Recommended Rate Alternative (52% Fixed / 48% Variable)


As previously shown in Figure 3, the projected rate revenue collected in FY 2017/18 from new rates wouldbe $1,267,500, which assumes rates are effective beginning in July 2017. When added to the expected raterevenue from current rates (i.e., $3,250,000), the projected rate revenue in FY 2017/18 is $4,517,500, asshown in Figure 9.

Current vs. Proposed Water Rate StructuresBesides merely providing the mechanism for collecting rate revenue from individual customers, water ratedesign presents an opportunity to consider broader rate-design objectives and policies, including revenuestability, equity among customer classes, and water conservation.

During the rate-design analysis, District staff and NBS developed several water rate structure alternativesfor consideration. As previously noted, after carefully considering Proposition 218 requirements and recentcourt cases, maintaining a uniform volumetric rate was, in the opinion of NBS, District staff, the District’slegal counsel the most defensible rate structure. Additionally, maintaining the current meter sizes ascustomer classifications was also recommended – it maintains continuity with the District’s current designis easy for customers to understand, and easy for the District to administrate.

Figure 10 compares the current and recommended rates for FY 2016/17 through 2021/22. Cost-of-serviceadjustments are reflected in the FY 2017/18 rates; thereafter rate increases are applied on an across-the-board basis. Appendix B provides more detail on the development of the proposed water rates.

FIGURE 10. CURRENT AND PROPOSED WATER RATES FISCAL YEAR 2016/17 – 2021/22

Comparison of Current and Proposed Monthly Bills

SINGLE-FAMILY WATER CUSTOMERSFigure 11 compares monthly water bills under the current and proposed rates, for single-family residentialcustomers, in the first year of the rate adjustment plan. Figure 12 compares current and proposed typicalsingle-family monthly water bills to other communities.

FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22Projected Increase in Rate Revenue per Financial Plan: 39.00% 7.00% 3.00% 2.00% 1.50%Fixed Service ChargeMonthly Fixed Service Charges: Category 1 Category 2

5/8 inch $16.30 $20.95 $23.19 $24.81 $25.56 $26.07 $26.463/4 inch $20.95 $25.55 $33.67 $36.03 $37.11 $37.85 $38.421 inch $27.85 $32.60 $54.63 $58.46 $60.21 $61.42 $62.341 1/2 inch $55.85 $60.50 $107.04 $114.53 $117.97 $120.33 $122.132 inch $92.95 $97.65 $169.93 $181.82 $187.28 $191.02 $193.893 inch $207.95 $214.95 $337.62 $361.26 $372.09 $379.54 $385.234 inch $367.40 $374.00 $526.28 $563.12 $580.02 $591.62 $600.496 inch $817.65 $817.65 $1,050.34 $1,123.86 $1,157.58 $1,180.73 $1,198.44

Volumetric Charges for All Water ConsumedUniform Rate (per hcf) $2.30 $3.56 $3.81 $3.92 $4.00 $4.06

CurrentRatesWater Rate Schedule Proposed Rates


FIGURE 11. MONTHLY WATER BILL COMPARISON FOR SFR CUSTOMERS

FIGURE 12. MONTHLY WATER BILL COMPARISON WITH OTHER COMMUNITIES


COMMERCIAL WATER CUSTOMERSCommercial customers are currently subject to the same fixed monthly charges by meter size and uniformvolumetric rate as single-family customers. Figure 13 compares current and proposed monthly bills forcommercial customers with a 2-inch meter at various levels of consumption, in the first year of the rateadjustment plan.

FIGURE 13. MONTHLY WATER BILL COMPARISON FOR COMMERCIAL USERS$1

09.0

5

$127

.45

$136

.65

$145

.85

$155

.05

$164

.25

$173

.45

$194

.85

$223

.33

$237

.57

$251

.81

$266

.05

$280

.29

$294

.53

$0

$100

$200

$300

$400

7 15 19 23 27 31 35

Mon

thly

Bill

Monthly Water Consumption (CCF)

Commercial Water Bill ComparisonCurrent vs. Proposed 2017/18 Rate Alternatives (2" meter)

Commercial Bill - Current Rates

Comm Bill - (52% Fixed / 48% Variable)

AverageWinter

AverageAnnual

AverageSummer


Section 4. WASTEWATER RATE STUDYDeveloping Recommended Wastewater RatesThe wastewater rate study focused on key objectives similar to those considered in the water rate study,with the overriding concern being maintaining the financial health of the utility.

Similar wastewater rate tasks were performed, including (1) developing functional cost allocations, (2)developing revenue requirements by customer class, and (3) determining rates within customer classes.Detailed tables showing the step-by-step development of the analysis are presented in Appendix C –Wastewater Rate Summary Tables.

Wastewater Utility Revenue RequirementsTo identify the wastewater utility’s long-term financial needs, including funding for capital improvementprojects, NBS developed a 20-year financial plan that forecasts wastewater revenues, expenditures, andprojected reserves. This plan is based on the District’s current operating budget for the utility, discussionswith District staff, and related information such as debt service schedules and capital improvement plans.This financial plan addresses four primary objectives:

Meeting Operating Costs: The wastewater utility must generate enough revenue to cover theexpenses of wastewater operations, including administration, maintenance, and the collectionsystem. Wastewater treatment plant services are contracted with the City of Eureka and accountedfor in the District’s annual budget as an operating cost.

Meeting Capital Improvement Costs: The wastewater utility plans to adequately fund necessarycapital improvements, which includes roughly $8 million in planned capital improvements for thecurrent fiscal year through the end of FY 2021/22. A large portion of the District’s capitalimprovements costs represents a 32.1 percent share of the City of Eureka’s wastewater treatmentplant improvement costs.

Maintaining Adequate Bond Coverage: The District is required by its bond covenant to maintain adebt service coverage ratio of at least 1.20 for the outstanding Wastewater Revenue Bonds, 2014Series. The Utility is projected to meet this coverage requirement through FY 2021/22.

Maintaining Reserve Funds: Currently, the utility’s reserves are insufficient to meet industrystandards for prudent utility fund management. Recommended rate increases will build and thenmaintain a healthy unrestricted reserve fund balance for the wastewater utility. After discussionswith District staff, the following target reserve levels were established for this analysis:

Operating Reserves equal to about 16 percent of the utility’s budgeted annual operatingexpenses. This reserve target is equal to a two-month (or 60-day) cash cushion for normaloperations, which is $482,000 for Fiscal Year 2016/17. This reserve is intended to promotefinancial viability in the event of any short-term fluctuation in revenues and/or expenditures,due to weather patterns, the natural billing cycle cash flows, variability in volume-based rates,and changes in the age of receivables.

Capital Reserves of 3 percent of net assets serves as a starting point for addressing longer-term capital needs. For Fiscal Year 2016/17, this is estimated to be $454,000. If ratepayer


revenue meets this level, the District will have accumulated a cash resource that can beapplied toward future capital replacement and rehabilitation needs.

Debt Reserves for the wastewater utility’s existing debt obligations has a target level of$665,000.

For FY 2016/17, the net revenue requirement is approximately $4.2 million. Current annual revenues areinsufficient to cover annual operating expenditures, debt service payments and contribute to plannedcapital improvement costs. The need to meet annual operating expenses, fund the Utility’s planned capitalprogram, and maintain healthy reserves, significant rate increases are recommended.

Figure 14 summarizes the sources and uses of funds and net revenue requirements for the next five years,and includes the recommended annual rate increases. Figure 15 summarizes the utility’s projected reservefunds and target balances.

FIGURE 14. SUMMARY OF WASTEWATER REVENUE REQUIREMENTS

FIGURE 15. SUMMARY OF WASTEWATER RESERVE FUNDS


Sources of Wastewater FundsRate Revenue Under Prevailing Rates 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$Non-Rate Revenues 10,249 2,208 841 1,839 10,072 15,740

Total Sources of Funds 3,660,249$ 3,652,208$ 3,650,841$ 3,651,839$ 3,660,072$ 3,665,740$Uses of Wastewater Funds

Personnel Expenses 1,214,263$ 1,262,834$ 1,313,347$ 1,365,881$ 1,420,516$ 1,477,337$Sewage Treatment O&M 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000Operating Expenses 570,254 587,453 605,173 623,429 642,238 661,617Debt Service 702,345 705,545 703,345 700,945 703,345 665,175Rate-Funded Capital Expenses 729,010 1,521,569 1,372,329 722,226 968,070 1,451,546

Total Use of Funds 4,321,873$ 5,183,401$ 5,100,195$ 4,518,482$ 4,840,170$ 5,361,675$Surplus (Deficiency) before Rate Increase (661,624)$ (1,531,194)$ (1,449,354)$ (866,643)$ (1,180,098)$ (1,695,934)$Additional Revenue from Rate Increases (1) - 985,500 1,449,050 1,551,031 1,655,052 1,761,153Surplus (Deficiency) after Rate Increase (661,624)$ (546,000)$ -$ 684,000$ 475,000$ 65,000$Projected Annual Rate Increase 0.00% 27.00% 10.00% 2.00% 2.00% 2.00%Cumulative Rate Increases 0.00% 27.00% 39.70% 42.49% 45.34% 48.25%Net Revenue Requirement (2) 4,229,390$ 5,103,674$ 5,021,834$ 4,439,123$ 4,752,578$ 5,268,415$

1. Assumes new rates are implemented July 1, 2017.2. Total Use of Funds less non-rate revenues. This is the annual amount needed from wastewater rates.

Summary of Sources and Uses of Funds and NetRevenue Requirements

Projected


Un-Restricted ReservesOperating & Capital Replacement Reserve

Ending Balance 182,438$ -$ 77,000$ 515,900$ 528,100$ 540,800$Recommended Minimum Target 481,800 492,700 504,100 515,900 528,100 540,800

Capital Rehabilitation & Replacement ReserveEnding Balance 453,800$ 168,238$ 168,238$ 491,338$ 731,138$ 590,000$Recommended Minimum Target 453,800 484,500 509,900 515,600 528,300 559,700

Sinking Fund ReserveEnding Balance -$ -$ -$ -$ -$ -$Recommended Minimum Target - - - - - -Total Ending Balance 636,238$ 168,238$ 245,238$ 1,007,238$ 1,259,238$ 1,130,800$Total Recommended Minimum Target 935,600$ 977,200$ 1,014,000$ 1,031,500$ 1,056,400$ 1,100,500$

Beginning Reserve Fund Balances andRecommended Reserve Targets

Projected


A summary of the entire 20-year financial plan, showing revenue requirements, revenue sources (includingrate revenue), and necessary rate increases is presented in Appendix C, along with a summary of theDistrict’s capital improvement program.

Cost of Service Analysis – WastewaterThe wastewater cost-of-service analysis is where annual revenue requirements are fairly and equitablyallocated to customer classes. In contrast to the District’s water customer classes, the District’s wastewatercustomer classes are represented by type of customer: residential, multi-family, and commercial.

The key factors used in the wastewater cost-of-service analysis include the estimated effluent (flow) goingto the wastewater treatment plant, the effluent strengths (BOD and TSS), and customer-related costs (e.g.,billing and administrative costs). Actual wastewater flow data from 2015 was used. The District has rightsto 32.1 percent of wastewater treatment plant capacity at the City of Eureka’s treatment plant.

Figure 16 shows how the volume allocation factors were developed, which are the percentages of annualconsumption and estimated flow by various types of customers.

FIGURE 16. SUMMARY OF ESTIMATED FLOW TO TREATMENT PLANT

Customer Class Effluent Strengths – Effluent strength factors for individual customer classes are estimatedusing the general industry guidelines9. The estimated effluent strengths by customer class are describedbelow.

Residential customers, including single-family, multi-family and mobile homes, are estimated tohave BOD and TSS strength factors of 200 mg/l.

Commercial customers have strength factors ranging from lower to higher than residential users,reflecting three strength-related classes (low-, medium-, and high-strength users).

9 The State Water Resources Control Council (SWRCB) Revenue Program Guidelines, Appendix G, page G-21 “Commercial UserStrength Characteristics,” were used for this purpose.

Development of the VOLUME Allocation Factor (1)

Customer ClassAnnual

Volume Total(HCF)

MonthlyWinter-

Average BasedBillable

Volume (HCF)(2)

Annual Winter-Average Based

BillableVolume (HCF)

AdjustedAnnual

Volume Total(HCF)

Percentage ofAdjustedAnnualVolume

ConsumptionBased

EDU/LivingUnit

Equivalents (3,4)

Percent ofTotal

ConsumptionBased UnitEquivalents

Residential 453,312 33,043 396,519 391,781 74.8% 6,006 74.5%Multi-Family Residential 54,555 4,166 49,992 49,395 9.4% 606 7.5%Mobile Home Park 23,004 1,883 22,596 22,326 4.3% 325 4.0%Commercial - Light Strength 58,779 3,859 46,308 45,755 8.7% 880 10.9%Commercial - Medium Strength 5,103 421 5,055 4,995 1.0% 86 1.1%Commercial - High Strength 9,024 777 9,318 9,207 1.8% 160 2.0%

Grand Total: 603,777 44,149 529,788 523,458 100.0% 8,063 100.0%523,458 Flow (HCF/yr.)

0.99 Flow Adj. Factor1. Consumption data is based on the HCSD's 2015 customer data.2. Monthly Billable Volume is equal to the Average Winter Consumption for all customers; for Non-Residential only, monthly consumption is less two (2) units of water.3. Multi-Family Residential Lot/Living Units are equal to 80 percent of a SFR unit; Mobile Home Park Lot/Living Units are equal to 87 percent of a SFR unit.4. For Mobile Home Park and Commercial Customers, EDUs/Lus based on SFR Winter Consumption was calculated per account and summarized by customer class.


Figure 17 and Figure 18 summarize the strength characteristics and allocation percentages of the utility’swastewater customer classes.

FIGURE 17. SUMMARY OF ANNUAL FLOW AND STRENGTH (BOD) CHARACTERISTICS BY CUSTOMER CLASS:

FIGURE 18. SUMMARY OF ANNUAL FLOW AND STRENGTH (TSS) CHARACTERISTICS BY CUSTOMER CLASS:

Figure 19 compares the total number of accounts and living units or EDUs (depending on how customersare billed) by customer class. Figure 20 then summarizes the total rate revenue requirements by customerclass resulting from the cost-of-service cost allocation process. Cost classification components includevolume, strength-related (BOD and TSS) and customer-related costs and are represented both as a dollaramount and as a percentage of total net revenue requirements.

Development of the STRENGTH Allocation Factor

Customer Class Annual Flow(gallons)

AverageStrength Factor

(mg/l) (1)

Calculated BOD(lbs./yr.)

Adjusted BOD(lbs./yr.) Percent of Total

Residential 339,100,042 200 565,619 608,695 72.0%Multi-Family Residential 40,809,868 200 68,071 73,255 8.7%Mobile Home Park 17,208,142 200 28,703 30,889 3.7%Commercial - Light Strength 43,969,631 200 73,341 78,927 9.3%Commercial - Medium Strength 3,817,299 435 13,849 14,903 1.8%Commercial - High Strength 6,750,403 630 35,468 38,169 4.5%

Grand Total: 451,655,385 785,051 844,838Target, from WWTP Data (2) 844,838 BOD (lbs./yr.)

1.076 BOD Adj. Factor

2. Reported in City of Eureka's Sewer Rate Study, concurrent with this rate study.

1. Average strength factors for BOD and TSS are derived from the State Water Resources Control Board Revenue ProgramGuidelines, Appendix G.

Biochemical Oxygen Demand (BOD)

Development of the STRENGTH Allocation Factor



(mg/l) (1)

Calculated TSS(lbs./yr.)

Adjusted TSS(lbs./yr.) Percent of Total

Residential 339,100,042 200 565,619 532,386 72.0%Multi-Family Residential 40,809,868 200 68,071 64,071 8.7%Mobile Home Park 17,208,142 200 28,703 27,017 3.7%Commercial - Light Strength 43,969,631 200 73,341 69,032 9.3%Commercial - Medium Strength 3,817,299 435 13,849 13,035 1.8%Commercial - High Strength 6,750,403 630 35,468 33,384 4.5%

Grand Total: 451,655,385 785,051 738,926Target, from WWTP Data (2) 738,926 TSS (lbs./yr.)

0.941 TSS Adj. Factor


1. Average strength factors for BOD and TSS are derived from the State Water Resources Control BoardRevenue Program Guidelines, Appendix G.

Total Suspended Solids (TSS)


FIGURE 19. SUMMARY OF WASTEWATER CUSTOMER ACCOUNTS AND EDU’S

FIGURE 20. SUMMARY OF ADJUSTED RATE REVENUE REQUIREMENTS BY CUSTOMER CLASS

As shown in Figure 20, the total rate revenue expected to be collected in FY 2017/18 would beapproximately $4.635 million. The cost allocation factors shown in Figure 16 through Figure 19 are used tocalculate the amount of this revenue collected from fixed charges and volumetric rates.

How these costs are then collected from fixed and volumetric charges within each customer class is part ofthe rate design analysis, the third study component previously shown in Figure 2.

Current vs. Proposed Wastewater RatesCurrently, the District’s wastewater rates consist of a small fixed monthly account charge, a fixed monthlybase charge per living unit (which varies by customer class), and a volumetric rate (which also varies bycustomer class). The proposed rates collect 61 percent of revenue requirements from volumetric rates and39 percent from fixed charges. Proposed rates maintain the existing rate structure with some changes tocustomer classes as follows:

Development of the CUSTOMER Allocation Factor

Customer Class EDU/LUEquivalent (1)

Number ofAccounts

Percent ofTotal

EDUs/LUsbased on SFR

WinterConsumption

(2)

ConsumptionBased

EDU/LivingUnit

Equivalents

Percent ofConsumption-

Based Total(EDU/LU

Equivalents)Residential 100% 5,811 91.2% 6,006 6,006 74.5%Multi-Family Residential 80% 335 5.3% 757 606 7.5%Mobile Home Park 87% 10 0.2% 374 325 4.0%Commercial - Light Strength 100% 196 3.1% 880 880 10.9%Commercial - Medium Strength 100% 5 0.1% 86 86 1.1%Commercial - High Strength 100% 14 0.2% 160 160 2.0%

Grand Total: -- 6,371 100.0% 8,263 8,063 100.0%1. Multi-Family Residential Lot/Living Units are equal to 80 percent of a SFR unit; Mobile Home Park Lot/Living Units are equal to87 percent of a SFR unit.2. For Mobile Home Park and Commercial Customers, EDUs/Lus based on SFR Winter Consumption was calculated per account andsummarized by customer class.

Allocation of FY 2017/18 Revenue Requirements by Customer Class

BOD TSSNet Revenue Requirements (1) 2,805,283$ 775,101$ 775,101$ 280,014$ 4,635,500$ --

60.5% 16.7% 16.7% 6.0% 100.0%Residential 2,089,616$ 558,450$ 558,450$ 255,401$ 3,461,918$ 74.7%Multi-Family Residential 210,701 67,208 67,208 14,724 359,841 7.8%Mobile Home Park 113,207 28,339 28,339 440 170,325 3.7%Commercial - Light Strength 306,171 72,412 72,412 8,614 459,609 9.9%Commercial - Medium Strength 29,921 13,673 13,673 220 57,488 1.2%Commercial - High Strength 55,667 35,018 35,018 615 126,320 2.7%

2,805,283$ 775,101$ 775,101$ 280,014$ 4,635,500$ 100%1. Revenue requirement for each customer class is determined by multiplying the revenue requirement from each cost

classification by the allocation factors for each customer class.

VolumeTreatment Customer

RelatedCustomer Class

Cost Classification Components Cost-of-Service Net

RevenueReqts.

% of COSNet Revenue

Reqts.


Trailer Parks is now included in the Mobile Home customer class. Separate Laundry Facility accounts are now included in the Commercial – Light Strength class. Public Facilities, Schools, Religious & Non-Profit, Fairgrounds, and Commercial Power Plants

customer classes are now included in the Commercial – Light Strength class.

The customer classes that have been incorporated into an existing class were rarely if ever used; thesechanges were made to improve customer accounting efficiency.

Figure 21 shows the current and proposed wastewater rates through FY 2021/22.

FIGURE 21. CURRENT AND PROPOSED WASTEWATER RATES FISCAL YEAR 2016/17 – 2021/22

SINGLE-FAMILY WASTEWATER CUSTOMERSFigure 22 compares typical single-family monthly wastewater bills in year one of the adjusted rate plan.

Figure 23 compares typical single-family monthly wastewater bills with other communities.

FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22Projected Increase in Rate Revenue per Financial Plan: 27.00% 10.00% 2.00% 2.00% 2.00%Monthly Fixed Service ChargeCustomer Service Charge Per Account $4.00 $3.66 $4.03 $4.11 $4.19 $4.28Monthly Fixed Service Charge Per Living Unit (LU)Single Family Residential (1-3) $21.59 $16.35 $17.99 $18.35 $18.72 $19.09Multi-Family (4 or more) $17.27 $13.08 $14.39 $14.68 $14.97 $15.27Mobile Homes $18.78 $14.23 $15.65 $15.96 $16.28 $16.61Trailer Parks $10.79 $14.23 $15.65 $15.96 $16.28 $16.61Commercial - Light Strength (< 370 mg/liter) $41.76 $16.35 $17.99 $18.35 $18.72 $19.09Commercial - Medium Strength (370-500 mg/liter) $50.71 $16.35 $17.99 $18.35 $18.72 $19.09Commercial - Heavy Strength (>500 mg/liter) $59.67 $16.35 $17.99 $18.35 $18.72 $19.09Volumetric Charge ($/HCF)Single Family Residential (1-3) $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Multi-Family (4 or more) $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Mobile Homes $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Trailer Parks $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Commercial - Light Strength (< 370 mg/liter) $5.70 $6.09 $6.69 $6.83 $6.96 $7.10Commercial - Medium Strength (370-500 mg/liter) $7.56 $8.06 $8.86 $9.04 $9.22 $9.41Commercial - Heavy Strength (>500 mg/liter) $6.65 $10.19 $11.21 $11.43 $11.66 $11.89

Sewer Rate Schedule Recommended Sewer RatesCurrentRates


FIGURE 22. MONTHLY SINGLE-FAMILY WASTEWATER BILL COMPARISON

FIGURE 23. MONTHLY SINGLE-FAMILY WASTEWATER BILL COMPARISON WITH OTHER COMMUNITIES


COMMERCIAL WASTEWATER CUSTOMERSFigure 24 compares typical medium-strength commercial monthly wastewater bills in year one of theadjusted rate plan.

FIGURE 24. MONTHLY MEDIUM-STRENGTH COMMERCIAL WASTEWATER BILL COMPARISON


Section 5. RECOMMENDATIONS AND NEXT STEPSConsultant RecommendationsThis rate study reflects input from District staff and the Board of Directors and is intended to comply withgeneral industry standards and meet the requirements of Proposition 218. Public hearings and protestballoting requirements. Below are the next steps required to complete the adoption and implementationrequirements. As a part of this process, NBS recommends the District take the following actions:

Implement Recommended Levels of Rate Increases and Proposed Rates: Based on successfullymeeting the Proposition 218 balloting requirements, the Board of Directors should proceed withimplementing the rate increases and rate structures recommended in this report for both utilitiesfor the next five years (see Figure 10 and Figure 21). These rate increases are necessary to ensurethe continued financial health of the District’s water and wastewater utilities, although maintainingthe financial health of the water and wastewater utilities will be an ongoing process.

Adopt Reserve Fund Targets: NBS recommends the Board of Directors adopt and strive to meet therecommended reserve fund targets described in this report for each utility. While the operatingreserve target is lower than those commonly used in the industry, they are a starting point forbuilding and maintaining these reserve funds in the future. The District should periodically evaluatereserve fund levels with the intent of achieving a long-term goal of carrying a 90-day (i.e., 25percent of operating expenses) Operating Fund Reserve for both the water and wastewater utilities.

Next StepsANNUALLY REVIEW RATES AND REVENUE

Any time an agency adopts new utility rates, particularly when facing significant capital costs and recentunforeseen expenditures, those new rates should be closely monitored over the next several years toensure the revenue generated is sufficient to meet the annual revenue requirements. Changing economicand drought-related consumption patterns underscore the need for this review, as well as potential andunseen changing revenue requirements, particularly those related to capital improvement and repair andreplacement costs that can significantly affect annual cash flows.

PRINCIPAL ASSUMPTIONS AND CONSIDERATIONSIn preparing this report and the recommendations included herein, NBS has relied on a number of principalassumptions and considerations with regard to financial matters, including the District’s utility budgets,capital improvement plans, the number of customer accounts, water consumption records, and otherconditions and events projected to occur in the future. This information and these assumptions wereprovided by sources we believe to be reliable, although NBS has not independently verified this data.

While we believe NBS’ use of such information and assumptions is reasonable for the purpose of thisreport and its recommendations, some assumptions will invariably not materialize as stated herein or mayvary significantly due to unanticipated events and circumstances. Therefore, the actual results can beexpected to vary from those projected to the extent that actual future conditions differ from thoseassumed by us or provided to us by others.


Section 6. APPENDIX A - ABBREVIATIONS &ACRONYMS10

AAFAFAlt.Avg.AWWABMPBODCACAPCCFCCICODCOMComm.COSCOSACPICIPDUExcl.ENREDUExp.FPFYFY 2016/17GPDGPMHCFInd.Irr.LAIFLbs.MFRMGDMG/LMo.Muni.NH3NPVN/AO&MProp 13

Prop 218

Req’tRes.

10 This appendix identifies abbreviations and acronyms that may be used in this report. This appendix has not been viewed,arranged, or edited by an attorney, nor should it be relied on as legal advice. The intent of this appendix is to support therecognition and analysis of this report. Any questions regarding clarification of this document should be directed to staff or anattorney specializing in this particular subject matter.

Average Annual FlowAcre Foot, equal to 435.6 HCF/CCF or 325,851 gallonsAlternativeAverageAmerican Water Works AssociationBest Management PracticeBiochemical Oxygen DemandCustomerCapacityHundred Cubic Feet (same as HCF); equal to 748 gallonsConstruction Cost IndexChemical Oxygen DemandCommodityCommercialCost of ServiceCost of Service AnalysisConsumer Price IndexCapital Improvement ProgramDwelling UnitExcludeEngineering News RecordEquivalent Dwelling UnitExpenseFire ProtectionFiscal Year (e.g., July 1st to June 30th)July 1, 2016 through June 30, 2017Gallons per DayGallons per MinuteHundred Cubic Feet; equal to 748 gallons or 1 CCFIndustrialIrrigationLocal Agency Investment FundPoundsMulti-Family ResidentialMillion Gallons per DayMilligrams per LiterMonthMunicipalAmmoniaNet Present ValueNot Available or Not ApplicableOperational & Maintenance ExpensesProposition 13 (1978) – Article XIIIA of the California Constitution which limits taxes on real property to 1% of thefull cash value of such property.Proposition 218 (1996) – State Constitutional amendment expanded restrictions of local government revenuecollections.RequirementResidential


Appendix A, continued

Rev.RTSR&RSFRSRF LoanSWRCBTSS / SSV. / Vs. /vs.WWTP

RevenueReadiness-to-ServeRehabilitation & ReplacementSingle Family ResidentialState Revolving Fund LoanState Water Resources Control CouncilTotal Suspended SolidsVersusWaste Water Treatment Plant


Section 7. APPENDIX B – WATER RATE SUMMARYTABLES

HUMBOLDT COMMUNITY SERVICES DISTRICT Financial Plan & Reserve SummaryWATER RATE STUDYFinancial Plan and Reserve Projections

TABLE 1FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS

BudgetFY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26

Sources of Water FundsRate Revenue: (1)

Water Service Charge 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$Non-Rate Revenue:

Fees 61,929 61,929 61,929 61,929 61,929 61,929 61,929 61,929 61,929 61,929Miscellaneous 17,552 17,552 17,552 17,552 17,552 17,552 17,552 17,552 17,552 17,552Non-Operating Revenues 4,484 - - - - - - - - -Interest/General 9,751 2,725 891 263 2,422 3,150 9,258 12,439 17,529 22,449

Total Sources of Funds 3,343,716$ 3,332,206$ 3,330,372$ 3,329,745$ 3,331,903$ 3,332,631$ 3,338,739$ 3,341,920$ 3,347,010$ 3,351,930$Uses of Water Funds

OPERATING EXPENSES:Personnel Expenses $ 1,491,161 $ 1,550,807 $ 1,612,839 $ 1,677,353 $ 1,744,447 $ 1,814,225 $ 1,886,794 $ 1,962,266 $ 2,040,756 $ 2,122,386Purchased Water (2) 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717 1,455,717Operating Expenses 680,446 700,968 722,111 743,893 766,336 789,457 813,279 837,823 863,110 889,164

Subtotal: Operating Expenses 3,627,323 3,707,492 3,790,667 3,876,963 3,966,500 4,059,399 4,155,790 4,255,806 4,359,583 4,467,267Other Expenditures:

Existing Debt Service 503,247$ 408,677$ 408,677$ 408,677$ 405,197$ 232,907$ 209,572$ 94,692$ 5,977$ 5,977$New Debt Service - - 0 0 0 0 0 0 0 0Rate-Funded Capital Expenses 172,495 1,090,511 857,816 565,744 778,720 579,637 835,837 860,912 886,739 913,341

Subtotal: Other Expenditures 675,741$ 1,499,188$ 1,266,493$ 974,421$ 1,183,916$ 812,544$ 1,045,409$ 955,604$ 892,716$ 919,318$Total Uses of Water Funds 4,303,065$ 5,206,680$ 5,057,159$ 4,851,384$ 5,150,416$ 4,871,943$ 5,201,199$ 5,211,409$ 5,252,300$ 5,386,585$plus: Revenue from Rate Increases (3) - 1,267,500 1,583,725 1,728,737 1,828,311 1,904,486 1,956,031 2,008,091 2,060,672 2,166,886Annual Surplus/(Deficit) (959,349)$ (606,974)$ (143,062)$ 207,097$ 9,799$ 365,175$ 93,571$ 138,602$ 155,382$ 132,230$Net Revenue Reqt. (Total Uses less Non-Rate Revenue) 4,209,349$ 5,124,474$ 4,976,787$ 4,771,639$ 5,068,513$ 4,789,311$ 5,112,460$ 5,119,490$ 5,155,290$ 5,284,656$Total Rate Revenue After Rate Increases 3,250,000$ 4,517,500$ 4,833,725$ 4,978,737$ 5,078,311$ 5,154,486$ 5,206,031$ 5,258,091$ 5,310,672$ 5,416,886$Projected Annual Rate Revenue Increase 0.00% 39.00% 7.00% 3.00% 2.00% 1.50% 1.00% 1.00% 1.00% 2.00%Cumulative Increase from Annual Revenue Increases 0.00% 39.00% 48.73% 53.19% 56.26% 58.60% 60.19% 61.79% 63.41% 66.67%Debt Coverage After Rate Increase (0.56) 2.18 2.75 2.89 2.95 5.06 5.43 11.56 175.35 175.93

1. Revenue and expenses for FY 2016/17 were provided by HCSD Staff. Source File: 2016/17 Budget.pdf.2. Assumption includes a Pass-Through charge for additional purchased water; inflation rate set to 0.0%.3. Assumes new rates are implemented July 1, 2017.

RATE REVENUE REQUIREMENTS SUMMARYProjected

Prepared by NBSwww.nbsgov.com | 800.676.7516

Financial Plan, 1 of 38

Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICT Financial Plan & Reserve SummaryWATER RATE STUDYFinancial Plan and Reserve Projections

TABLE 2RESERVE FUND SUMMARY


Total Beginning Cash (1) 1,857,585$Operating ReserveBeginning Reserve Balance (2) 605,774$ -$ -$ -$ 207,097$ 216,896$ 582,071$ 675,642$ 709,000$ 727,000$

Plus: Net Cash Flow (After Rate Increases) (959,349) (606,974) (143,062) 207,097 9,799 365,175 93,571 138,602 155,382 132,230Plus: Transfer of Debt Reserve Surplus - - - - - - - 27,059 90,608 120Plus: Transfer of Capital R&R Reserve Surplus 353,575 606,974 143,062 - - - - - - -Less: Transfer Out to Capital Replacement Reserve - - - - - - - (132,303) (227,991) (114,349)

Ending Operating Reserve Balance -$ -$ -$ 207,097$ 216,896$ 582,071$ 675,642$ 709,000$ 727,000$ 745,000$Target Ending Balance (60-days of O&M) 605,000$ 618,000$ 632,000$ 646,000$ 661,000$ 677,000$ 693,000$ 709,000$ 727,000$ 745,000$Capital Rehabilitation & Replacement ReserveBeginning Reserve Balance (3) 1,138,744$ 785,169$ 178,195$ 35,132$ 35,132$ 35,132$ 35,132$ 35,132$ 167,435$ 395,426$

Plus: Grant Proceeds - - - - - - - - - -Plus: Transfer of Operating Reserve Surplus - - - - - - - 132,303 227,991 114,349Less: Use of Reserves for Operating Reserve (353,575) (606,974) (143,062) - - - - - - -Less: Use of Reserves for Capital Projects - - - - - - - - - -

Ending Capital Rehab & Replacement Reserve Balance 785,169$ 178,195$ 35,132$ 35,132$ 35,132$ 35,132$ 35,132$ 167,435$ 395,426$ 509,775$Capital R&R Reserve (3% of Net Assets) 484,000$ 507,800$ 524,200$ 531,600$ 545,000$ 552,100$ 566,600$ 581,300$ 596,300$ 611,600$Ending Balance - Excl. Restricted Reserves 785,169$ 178,195$ 35,132$ 242,230$ 252,029$ 617,203$ 710,774$ 876,435$ 1,122,426$ 1,254,775$Min. Target Ending Balance -Excl. Restricted Reserves 1,089,000$ 1,125,800$ 1,156,200$ 1,177,600$ 1,206,000$ 1,229,100$ 1,259,600$ 1,290,300$ 1,323,300$ 1,356,600$Ending Surplus/(Deficit) Compared to Reserve Targets (303,831)$ (947,605)$ (1,121,068)$ (935,370)$ (953,971)$ (611,897)$ (548,826)$ (413,865)$ (200,874)$ (101,825)$Restricted Reserve:Connection Fee ReserveBeginning Reserve Balance -$ 40,000$ 40,139$ 40,339$ 40,642$ 41,048$ 41,562$ 42,185$ 42,923$ 43,782$

Plus: Interest Earnings - 139 201 303 406 513 623 738 858 876Plus: Capacity Fee Revenue 40,000 - - - - - - - - -Less: Use of Reserves for Capital Projects - - - - - - - - - -

Ending Connection Fee Fund Balance 40,000$ 40,139$ 40,339$ 40,642$ 41,048$ 41,562$ 42,185$ 42,923$ 43,782$ 44,657$Bond Project FundBeginning Reserve Balance (4) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Plus: SRF Loan Funding Proceeds - - - - - - - - - -Plus: Revenue Bond Proceeds - 0 - - - - - - - -Less: Use of Bond & Loan Funds for Capital Projects - (0) - - - - - - - -

Ending Bond Project Fund Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Target Ending Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Debt ReserveBeginning Reserve Balance (5) 113,067$ 113,459$ 113,853$ 114,422$ 115,280$ 116,433$ 117,888$ 119,657$ 94,692$ 5,977$

Plus: Reserve Funding from New Debt Obligations - - 0 - - - - - - -Plus: Interest Earnings 392 394 569 858 1,153 1,455 1,768 2,094 1,894 120Less: Transfer of Surplus to Operating Reserve - - - - - - - (27,059) (90,608) (120)

Ending Debt Reserve Balance 113,459$ 113,853$ 114,422$ 115,280$ 116,433$ 117,888$ 119,657$ 94,692$ 5,977$ 5,977$Target Ending Balance 463,076$ 368,507$ 368,507$ 368,507$ 365,026$ 232,907$ 209,572$ 94,692$ 5,977$ 5,977$Annual Interest Earnings Rate (6) 0.35% 0.35% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.00%

1. The beginning Cash balance is equal to the amount allocated to the Water System. The District currently maintains one fund for water and sewer operations. Shared cash balances were allocated based on previous years actual revenues, or 49% of revenues. Allocation method used per staff request. June 30 2016 summary trial balance.xls.2. The beginning Operating Reserve balance is equal to 49% of total cash at the end of FY 2015/16 in Fund 1, Accounts 1011 & 1012, per the City's Trial Balance report as of August 11, 2015.3. The beginning Capital Rehab and Replacement balance is equal to 49% of total cash at the end of FY 2015/16 in Fund 1, Accounts 1015 & 1029, per the City's Trial Balance report as of August 11, 2015.4. The beginning Bond Project Reserve balance is assumed to be zero.5. The beginning Debt Reserve balance is equal 49% of total cash at the end of FY 2015/16 in Fund 1, Accounts 1030, & 1031, per the City's Trial Balance report as of August 11, 2015.6. Historical interest earning rates were referenced on the California Treasurer's Office website for funds invested in LAIF. Future years earnings were conservatively estimated through 2022 and phase into the historical 10 year average interest earnings rate.

SUMMARY OF CASH ACTIVITYUN-RESTRICTED RESERVES

Projected



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYRate Adjustment Charts and Report Tables

CHART 1

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26

Annu

al O

blig

atio

ns

Fiscal Year Ending June 30

Water Revenue Requirements vs.Revenue Under Existing and Increased Rates

Reserve Funded Capital ExpensesRate Funded Capital ExpensesDebt ServiceO&M ExpensesRevenues under Existing RatesRevenues under Increased Rates


Charts and Tables, 3 of 38

Appendix B


CHART 2

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26Fiscal Year Ending June 30

Ending Cash Balances vs.Recommended Reserve Targets

Ending Cash Balance (Unrestricted Reserves)

Minimum Target Reserve Balance

Recommended Target Reserve Balance



Appendix B


CHART 3

0.0%

39.0%

7.0%

3.0% 2.0% 1.5% 1.0% 1.0% 1.0% 2.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26


Projected Increases to Rate Revenue



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICT EXHIBIT 1WATER RATE STUDYOperating Revenue and Expenses

TABLE 3REVENUE FORECAST (1)

DESCRIPTION Basis 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Operating Revenue

Metered Water Sales 1 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$Water Construction Fees 1 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$ 20,000$Account Fees 1 40,954$ 40,954$ 40,954$ 40,954$ 40,954$ 40,954$ 40,954$ 40,954$ 40,954$ 40,954$Inspection Fees 1 975$ 975$ 975$ 975$ 975$ 975$ 975$ 975$ 975$ 975$Reimbursable Maintenance 1 5,851$ 5,851$ 5,851$ 5,851$ 5,851$ 5,851$ 5,851$ 5,851$ 5,851$ 5,851$Miscellaneous 1 11,701$ 11,701$ 11,701$ 11,701$ 11,701$ 11,701$ 11,701$ 11,701$ 11,701$ 11,701$

Non-Operating RevenueWater Capital Connection Fees 1 40,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Interest/General 1 9,751$ -$ -$ -$ -$ -$ -$ -$ -$ -$Discounts Earned 1 1,462$ -$ -$ -$ -$ -$ -$ -$ -$ -$Sale of Fixed Assets 1 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Sales of Scrap Metal 1 1,462$ -$ -$ -$ -$ -$ -$ -$ -$ -$Bad Debt Recovery 1 1,560$ -$ -$ -$ -$ -$ -$ -$ -$ -$Property Taxes 1 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$TOTAL: REVENUE 3,383,716$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$

TABLE 4REVENUE SUMMARY:Water Service Charge 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$ 3,250,000$Property Taxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Fees 61,929$ 61,929$ 61,929$ 61,929$ 61,929$ 61,929$ 61,929$ 61,929$ 61,929$ 61,929$Miscellaneous 17,552$ 17,552$ 17,552$ 17,552$ 17,552$ 17,552$ 17,552$ 17,552$ 17,552$ 17,552$Connection Fees 40,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Non-Operating Revenues 4,484$ -$ -$ -$ -$ -$ -$ -$ -$ -$Interest/General 9,751$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TOTAL REVENUE 3,383,716$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$ 3,329,481$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$


Exhibit 1 (O&M), 6 of 38

Appendix B


TABLE 5OPERATING EXPENSE FORECAST (1, 2):DESCRIPTION Basis 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Personnel Expenses

Wages: Operation 3 712,579$ 741,083$ 770,726$ 801,555$ 833,617$ 866,962$ 901,640$ 937,706$ 975,214$ 1,014,223$PERS 3 182,344$ 189,638$ 197,224$ 205,113$ 213,317$ 221,850$ 230,724$ 239,953$ 249,551$ 259,533$UI 3 2,709$ 2,818$ 2,931$ 3,048$ 3,170$ 3,296$ 3,428$ 3,565$ 3,708$ 3,856$Group Insurance 3 522,920$ 543,836$ 565,590$ 588,213$ 611,742$ 636,212$ 661,660$ 688,126$ 715,651$ 744,278$Workers Comp 3 16,040$ 16,681$ 17,349$ 18,043$ 18,764$ 19,515$ 20,295$ 21,107$ 21,952$ 22,830$FICA / Medicare 3 54,459$ 56,638$ 58,903$ 61,260$ 63,710$ 66,258$ 68,909$ 71,665$ 74,532$ 77,513$Misc. Benefits 3 108$ 113$ 117$ 122$ 127$ 132$ 137$ 143$ 148$ 154$

Operating ExpensesWater Purchase HBMWD (3) 4 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$ 1,040,577$Water Purchase Eureka (3) 4 415,140$ 415,140$ 415,140$ 415,140$ 415,140$ 415,140$ 415,140$ 415,140$ 415,140$ 415,140$Water/Sewer Analysis 2 8,128$ 8,372$ 8,623$ 8,882$ 9,148$ 9,423$ 9,706$ 9,997$ 10,297$ 10,606$Supplies/Construction 2 70,445$ 72,558$ 74,735$ 76,977$ 79,287$ 81,665$ 84,115$ 86,639$ 89,238$ 91,915$Supplies / Office-Admin 2 8,670$ 8,930$ 9,198$ 9,474$ 9,758$ 10,051$ 10,353$ 10,663$ 10,983$ 11,313$Supplies Engineering 2 4,064$ 4,186$ 4,312$ 4,441$ 4,574$ 4,711$ 4,853$ 4,998$ 5,148$ 5,303$Supplies/Maintenance 2 54,189$ 55,814$ 57,489$ 59,213$ 60,990$ 62,819$ 64,704$ 66,645$ 68,644$ 70,704$Temp Labor - Maintenance 2 3,251$ 3,349$ 3,449$ 3,553$ 3,659$ 3,769$ 3,882$ 3,999$ 4,119$ 4,242$Temp Labor - Construction 2 10,838$ 11,163$ 11,498$ 11,843$ 12,198$ 12,564$ 12,941$ 13,329$ 13,729$ 14,141$Temp Labor - Customer Service/Finance 2 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Repairs & Maint: Trucks 2 27,094$ 27,907$ 28,744$ 29,607$ 30,495$ 31,410$ 32,352$ 33,323$ 34,322$ 35,352$Building & Grounds Maint 2 10,838$ 11,163$ 11,498$ 11,843$ 12,198$ 12,564$ 12,941$ 13,329$ 13,729$ 14,141$Electrical Power 5 173,403$ 178,605$ 183,964$ 189,483$ 195,167$ 201,022$ 207,053$ 213,264$ 219,662$ 226,252$Street Lights 5 43,351$ 44,651$ 45,991$ 47,371$ 48,792$ 50,256$ 51,763$ 53,316$ 54,916$ 56,563$Telephone 2 7,045$ 7,256$ 7,474$ 7,698$ 7,929$ 8,167$ 8,412$ 8,664$ 8,924$ 9,191$Equipment Rental 2 4,877$ 5,023$ 5,174$ 5,329$ 5,489$ 5,654$ 5,823$ 5,998$ 6,178$ 6,363$Property Lease 2 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Postage 2 18,966$ 19,535$ 20,121$ 20,725$ 21,346$ 21,987$ 22,646$ 23,326$ 24,026$ 24,746$Freight 2 271$ 279$ 287$ 296$ 305$ 314$ 324$ 333$ 343$ 354$Chemicals 6 5,419$ 5,690$ 5,974$ 6,273$ 6,587$ 6,916$ 7,262$ 7,625$ 8,006$ 8,406$Liability Insurance 2 39,016$ 40,186$ 41,392$ 42,634$ 43,913$ 45,230$ 46,587$ 47,984$ 49,424$ 50,907$Legal 2 10,838$ 11,163$ 11,498$ 11,843$ 12,198$ 12,564$ 12,941$ 13,329$ 13,729$ 14,141$Accounting 2 7,586$ 7,814$ 8,048$ 8,290$ 8,539$ 8,795$ 9,059$ 9,330$ 9,610$ 9,899$Engineering 2 10,838$ 11,163$ 11,498$ 11,843$ 12,198$ 12,564$ 12,941$ 13,329$ 13,729$ 14,141$Other Professional Services 2 8,670$ 8,930$ 9,198$ 9,474$ 9,758$ 10,051$ 10,353$ 10,663$ 10,983$ 11,313$Bank Service Charges 2 19,508$ 20,093$ 20,696$ 21,317$ 21,956$ 22,615$ 23,293$ 23,992$ 24,712$ 25,453$Transportation 7 27,094$ 27,907$ 28,744$ 29,607$ 30,495$ 31,410$ 32,352$ 33,323$ 34,322$ 35,352$Office Equip / Maint 2 11,705$ 12,056$ 12,418$ 12,790$ 13,174$ 13,569$ 13,976$ 14,396$ 14,828$ 15,272$Computer Software Maintenance 2 16,257$ 16,744$ 17,247$ 17,764$ 18,297$ 18,846$ 19,411$ 19,994$ 20,593$ 21,211$Memberships & Subscriptions 2 12,518$ 12,893$ 13,280$ 13,678$ 14,089$ 14,511$ 14,947$ 15,395$ 15,857$ 16,333$Bad Debts & Min Bal write-off 2 13,005$ 13,395$ 13,797$ 14,211$ 14,638$ 15,077$ 15,529$ 15,995$ 16,475$ 16,969$Conferences & Continuing Ed 2 7,586$ 7,814$ 8,048$ 8,290$ 8,539$ 8,795$ 9,059$ 9,330$ 9,610$ 9,899$Certifications 2 1,084$ 1,116$ 1,150$ 1,184$ 1,220$ 1,256$ 1,294$ 1,333$ 1,373$ 1,414$State/County & LAFCO Fees & Charges 2 16,257$ 16,744$ 17,247$ 17,764$ 18,297$ 18,846$ 19,411$ 19,994$ 20,593$ 21,211$Elections Expense 2 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Human Resources 2 8,128$ 8,372$ 8,623$ 8,882$ 9,148$ 9,423$ 9,706$ 9,997$ 10,297$ 10,606$Miscellaneous 2 10,838$ 11,163$ 11,498$ 11,843$ 12,198$ 12,564$ 12,941$ 13,329$ 13,729$ 14,141$Directors Fees 2 8,670$ 8,930$ 9,198$ 9,474$ 9,758$ 10,051$ 10,353$ 10,663$ 10,983$ 11,313$

GRAND TOTAL: WATER EXPENSES 3,627,323$ 3,707,492$ 3,790,667$ 3,876,963$ 3,966,500$ 4,059,399$ 4,155,790$ 4,255,806$ 4,359,583$ 4,467,267$



Appendix B


TABLE 6FORECASTING ASSUMPTIONS, Shown for Reference Purposes OnlyINFLATION FACTORS Basis 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Customer Growth 1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%General Cost Inflation 2 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Labor Cost Inflation 3 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%Water Purchases (4) 4 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Energy 5 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Chemicals 6 0.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%Fuel 7 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%No Escalation 8 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Revenues for FY 2016/17 are estimated actual revenues for FY 2015/16; source file: 2016-17 Budget.pdf . The District currently maintains one fund for water and sewer operations. Non-rate revenues were allocated to the water utility based on previous years actual revenues; the Water System is allocated 49% of non-rate revenues.2. Expenses for FY 2016/17 are per the Districts 2016/17 budget; source file: 2016-17 Budget.pdf . The District currently maintains one fund for water and sewer operations. Personnel and Operating Expenses were allocated to the water utility based on previous years actual expenses; the Water System is allocated 54% of expenses.3. This line item is allocated 100% to the Water System.4. Water Purchases are not inflated as the District will implement a pass-through as costs increase for purchased water.



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICT EXHIBIT 2WATER RATE STUDYCapital Improvement Plan Expenditures

TABLE 7CAPITAL FUNDING SUMMARY

CAPITAL FUNDING FORECAST BudgetFY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26

Grants -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Use of Capacity Fee Reserves - - - - - - - - - -SRF Loan Funding - - - - - - - - - -Use of New Revenue Bond Proceeds - 0 - - - - - - - -Use of Capital Rehabilitation and Replacement Reserve - - - - - - - - - -Rate Revenue 172,495 1,090,511 857,816 565,744 778,720 579,637 835,837 860,912 886,739 913,341

Total Sources of Capital Funds 172,495$ 1,090,511$ 857,816$ 565,744$ 778,720$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$

Uses of Capital Funds:Total Project Costs 172,495$ 1,090,511$ 857,816$ 565,744$ 778,720$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$Capital Funding Surplus (Deficiency) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

SRF Loan Funding -$ -$ -$ -$ -$ -$ -$ -$ -$ -$New Revenue Bond Proceeds -$ 0$ -$ -$ -$ -$ -$ -$ -$ -$

CAPITAL IMPROVEMENT PROGRAM FUNDING OPTIONS

1Policy Choice 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

1 Full Funding of Capital Improvement Program, at actual cost & timing 172,495$ 1,090,511$ 857,816$ 565,744$ 778,720$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$2 50% Funding of Capital Improvement Program, at actual cost & timing 86,247$ 545,256$ 428,908$ 282,872$ 389,360$ 289,819$ 417,918$ 430,456$ 443,370$ 456,671$3 Other -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Capital Improvement Program Funding Choice 172,495$ 1,090,511$ 857,816$ 565,744$ 778,720$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$

Insert policy choice in box to right, based on options listed above:

Funding Sources:Projected


Exhibit 2 (CIP), 9 of 38

Appendix B


CAPITAL IMPROVEMENT PROGRAM

TABLE 8Capital Improvement Program Costs (in Current-Year Dollars ) (1, 2):Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026WATER MAIN LINE REPLACEMENTS ($100.00/LF)

New Connections 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ -$ -$ -$ -$ -$Pine Hill Br WL Replacement -$ -$ 150,000$ -$ -$ -$ -$ -$ -$ -$USCG Upgrade Water Connections 50,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Phase 1 Vista tie in (1000 LF) -$ 120,000$ -$ -$ -$ -$ -$ -$ -$ -$Essex (300’) -$ 30,000$ -$ -$ -$ -$ -$ -$ -$ -$Harris (Rdwd Acres)600’stl 10” to 12” -$ 70,000$ -$ -$ -$ -$ -$ -$ -$ -$Tower Ln (600’– 2”stl upsize to 8”) -$ 60,000$ -$ -$ -$ -$ -$ -$ -$ -$Temple Circle (165 LF) -$ 16,500$ -$ -$ -$ -$ -$ -$ -$ -$Phase 2 Vista tie in (1000 LF) -$ -$ 120,000$ -$ -$ -$ -$ -$ -$ -$Hinman Lane (500 LF) -$ -$ 50,000$ -$ -$ -$ -$ -$ -$ -$Shady Lane (400 LF 2” stl) -$ -$ 40,000$ -$ -$ -$ -$ -$ -$ -$Stanford (100 LF) -$ -$ 10,000$ -$ -$ -$ -$ -$ -$ -$Austin Court (250 LF) -$ -$ 25,000$ -$ -$ -$ -$ -$ -$ -$Spears Avenue (200 LF) -$ -$ 20,000$ -$ -$ -$ -$ -$ -$ -$Park St (STL 500 LF) -$ -$ 50,000$ -$ -$ -$ -$ -$ -$ -$College Streets (1000 LF) -$ -$ -$ 100,000$ -$ -$ -$ -$ -$ -$Crane St (STL 250LF) -$ -$ -$ 25,000$ -$ -$ -$ -$ -$ -$Lloyd St (STL 350LF) -$ -$ -$ 35,000$ -$ -$ -$ -$ -$ -$Christiansen St (STL 150LF) -$ -$ -$ 15,000$ -$ -$ -$ -$ -$ -$End of Summit Ridge South (300LF) -$ -$ -$ 30,000$ -$ -$ -$ -$ -$ -$Tracy Ct. (STL 120LF) -$ -$ -$ -$ 12,000$ -$ -$ -$ -$ -$Fields Landing (STL 1150LF) -$ -$ -$ -$ 115,000$ -$ -$ -$ -$ -$Beechwood Dr (STL 600LF) -$ -$ -$ -$ 60,000$ -$ -$ -$ -$ -$

WATER PUMPING FACILITY UPGRADESTruesdale new pump -$ 25,000$ 25,000$ 25,000$ 25,000$ -$ -$ -$ -$ -$New South Bay well -$ 365,000$ -$ -$ -$ -$ -$ -$ -$ -$18th and Quaker PSV -$ 17,000$ -$ -$ -$ -$ -$ -$ -$ -$Spruce Pt. Well Spare Pump 20,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood Pump Upgrade 7,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Donna Drive tank exterior painting and fall protection and ladder modifications -$ 150,000$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood and Walnut 1MG Water storage tank repairs and fall protection -$ 100,000$ -$ -$ -$ -$ -$ -$ -$ -$Donna Dr. BS Bldg Rehab -$ -$ 30,000$ -$ -$ -$ -$ -$ -$ -$Water storage tank cleaning and maintenance (5 tanks) -$ -$ 25,000$ -$ -$ -$ -$ -$ -$ -$Ridgewood 3rd pump -$ -$ 30,000$ -$ -$ -$ -$ -$ -$ -$Ridgewood tank exterior painting and cathodic protection -$ -$ 150,000$ -$ -$ -$ -$ -$ -$ -$Walnut Drive 1.0 MG tank exterior painting -$ -$ -$ 125,000$ -$ -$ -$ -$ -$ -$Pigeon Point WBS building rehab -$ -$ -$ 10,000$ -$ -$ -$ -$ -$ -$Hubbard 3rd pump -$ -$ -$ 30,000$ -$ -$ -$ -$ -$ -$Donna Drive hydro tank replacement -$ -$ -$ 50,000$ -$ -$ -$ -$ -$ -$Brier Lane tank exterior painting, fall Protection and ladder modification -$ -$ -$ -$ 150,000$ -$ -$ -$ -$ -$Future Tank Repairs -$ -$ -$ -$ 100,000$ -$ -$ -$ -$ -$

Subtotal: Capital Improvement Program Costs 82,000$ 958,500$ 730,000$ 450,000$ 467,000$ -$ -$ -$ -$ -$



Appendix B


TABLE 9Capital Improvement Program Costs (in Current-Year Dollars ) (1, 2):Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026VEHICLES/ROLLING STOCK/EQUIPMENT

Tack Oil Pump 8,128$ -$ -$ -$ -$ -$ -$ -$ -$ -$Copier Replacement 8,128$ -$ -$ -$ -$ -$ -$ -$ -$ -$Unit #15 (replacement) 27,094$ -$ -$ -$ -$ -$ -$ -$ -$ -$Unit #12 (replacement) -$ 16,257$ -$ -$ -$ -$ -$ -$ -$ -$MQ70 Generator (replacement) -$ 21,675$ -$ -$ -$ -$ -$ -$ -$ -$Unit#6 (replacement) -$ 27,094$ -$ -$ -$ -$ -$ -$ -$ -$MQ45 Generator (replacement) -$ 21,675$ -$ -$ -$ -$ -$ -$ -$ -$Unit #11 (replacement) -$ -$ 16,257$ -$ -$ -$ -$ -$ -$ -$Backhoe "L" (replacement) -$ -$ 54,189$ -$ -$ -$ -$ -$ -$ -$Unit#16 (replacement) -$ -$ -$ 21,675$ -$ -$ -$ -$ -$ -$Unit #9 (replacement) -$ -$ -$ 27,094$ -$ -$ -$ -$ -$ -$Vac-Con Unit #13 (replacement) -$ -$ -$ -$ 216,754$ -$ -$ -$ -$ -$

ENGINEERING NEEDSFields Landing Sewer FM Test andDesign 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$Cummins Road Fill Site Design 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Bay Well Const. Mgmt 10,838$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood and Walnut Tank Repairs 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$Water Tank Exterior Painting Specs 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hemlock Diversion Design 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$Lower Shop Drain design 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hartman SLS 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$Total Walnut Yard Grading/Fill Siteand New Storage Bldg pad Design 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$18th and Quaker PSV Water 1,084$ -$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsDonna Specific (includes fall protec on/ ladder mods/etc) 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Broadway Sewer FM Test -$ 5,419$ -$ -$ -$ -$ -$ -$ -$ -$F Street Design -$ 5,419$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsRidgewood Specific (includes fall protec on/ ladder mods/etc -$ 2,709$ -$ -$ -$ -$ -$ -$ -$ -$Spruce Street Design -$ -$ 5,419$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsWalnut Specific(includes fall protec on/ladder mods/etc) -$ -$ 2,709$ -$ -$ -$ -$ -$ -$ -$Small Truck Garage Rehab -$ -$ -$ 8,128$ -$ -$ -$ -$ -$ -$Alder Design -$ -$ -$ 5,419$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsBrier Specific(includes fall protec on/ladder mods/etc) -$ -$ -$ 2,709$ -$ -$ -$ -$ -$ -$Hoover Sewer Crossing (1000 LF) -$ -$ -$ 2,709$ -$ -$ -$ -$ -$ -$D Street Design -$ -$ -$ -$ 5,419$ -$ -$ -$ -$ -$Future Tank Repairs -$ -$ -$ -$ 2,709$ -$ -$ -$ -$ -$

Estimated Future ProjectsUnforseen Expenditures -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Future Projects (4) -$ -$ -$ -$ -$ 500,000$ 700,000$ 700,000$ 700,000$ 700,000$

Subtotal: Capital Improvement Program Costs 90,495$ 100,249$ 78,573$ 67,736$ 224,882$ 500,000$ 700,000$ 700,000$ 700,000$ 700,000$

Total: CIP Program Costs (Current-Year Dollars) 172,495$ 1,058,749$ 808,573$ 517,736$ 691,882$ 500,000$ 700,000$ 700,000$ 700,000$ 700,000$

TABLE 10FORECASTING ASSUMPTIONS:

Economic Variables 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Annual Construction Cost Inflation, Per Engineering News Record (5) 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Cumulative Construction Cost Multiplier from 2017 1.00 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.301. Capital project costs were provided by HCSD Staff in source file: 2016-17 CIP.pdf.2. The District currently maintains one fund for water and sewer operations. CIP Expenses for Vehicles & Rolling Stock and Engineering Needs were allocated to the water utility based on previous years actual expenses (54% of expenses).3. Project costs are inflated by 3.0% per year in FY 2017/18 and beyond.4. Future Projects are included at $700,000 per year based on 5-year average annual expenditures.5. For reference purposes, the annual Construction Cost Inflation percentage is the 10 year average change in the Construction Cost Index for 2005-2015 (3.0%). Source: Engineering News Record website (http://enr.construction.com).



Appendix B


TABLE 11Capital Improvement Program Costs (in Future-Year Dollars ) (2):

Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026WATER MAIN LINE REPLACEMENTS ($100.00/LF)

New Connections 5,000$ 5,150$ 5,305$ 5,464$ 5,628$ -$ -$ -$ -$ -$Pine Hill Br WL Replacement -$ -$ 159,135$ -$ -$ -$ -$ -$ -$ -$USCG Upgrade Water Connections 50,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Phase 1 Vista tie in (1000 LF) -$ 123,600$ -$ -$ -$ -$ -$ -$ -$ -$Essex (300’) -$ 30,900$ -$ -$ -$ -$ -$ -$ -$ -$Harris (Rdwd Acres)600’stl 10” to 12” -$ 72,100$ -$ -$ -$ -$ -$ -$ -$ -$Tower Ln (600’– 2”stl upsize to 8”) -$ 61,800$ -$ -$ -$ -$ -$ -$ -$ -$Temple Circle (165 LF) -$ 16,995$ -$ -$ -$ -$ -$ -$ -$ -$Phase 2 Vista tie in (1000 LF) -$ -$ 127,308$ -$ -$ -$ -$ -$ -$ -$Hinman Lane (500 LF) -$ -$ 53,045$ -$ -$ -$ -$ -$ -$ -$Shady Lane (400 LF 2” stl) -$ -$ 42,436$ -$ -$ -$ -$ -$ -$ -$Stanford (100 LF) -$ -$ 10,609$ -$ -$ -$ -$ -$ -$ -$Austin Court (250 LF) -$ -$ 26,523$ -$ -$ -$ -$ -$ -$ -$Spears Avenue (200 LF) -$ -$ 21,218$ -$ -$ -$ -$ -$ -$ -$Park St (STL 500 LF) -$ -$ 53,045$ -$ -$ -$ -$ -$ -$ -$College Streets (1000 LF) -$ -$ -$ 109,273$ -$ -$ -$ -$ -$ -$Crane St (STL 250LF) -$ -$ -$ 27,318$ -$ -$ -$ -$ -$ -$Lloyd St (STL 350LF) -$ -$ -$ 38,245$ -$ -$ -$ -$ -$ -$Christiansen St (STL 150LF) -$ -$ -$ 16,391$ -$ -$ -$ -$ -$ -$End of Summit Ridge South (300LF) -$ -$ -$ 32,782$ -$ -$ -$ -$ -$ -$Tracy Ct. (STL 120LF) -$ -$ -$ -$ 13,506$ -$ -$ -$ -$ -$Fields Landing (STL 1150LF) -$ -$ -$ -$ 129,434$ -$ -$ -$ -$ -$Beechwood Dr (STL 600LF) -$ -$ -$ -$ 67,531$ -$ -$ -$ -$ -$

WATER PUMPING FACILITY UPGRADESTruesdale new pump -$ 25,750$ 26,523$ 27,318$ 28,138$ -$ -$ -$ -$ -$New South Bay well -$ 375,950$ -$ -$ -$ -$ -$ -$ -$ -$18th and Quaker PSV -$ 17,510$ -$ -$ -$ -$ -$ -$ -$ -$Spruce Pt. Well Spare Pump 20,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood Pump Upgrade 7,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Donna Drive tank exterior painting and fall protection and ladder modifications -$ 154,500$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood and Walnut 1MG Water storage tank repairs and fall protection -$ 103,000$ -$ -$ -$ -$ -$ -$ -$ -$Donna Dr. BS Bldg Rehab -$ -$ 31,827$ -$ -$ -$ -$ -$ -$ -$Water storage tank cleaning and maintenance (5 tanks) -$ -$ 26,523$ -$ -$ -$ -$ -$ -$ -$Ridgewood 3rd pump -$ -$ 31,827$ -$ -$ -$ -$ -$ -$ -$Ridgewood tank exterior painting and cathodic protection -$ -$ 159,135$ -$ -$ -$ -$ -$ -$ -$Walnut Drive 1.0 MG tank exterior painting -$ -$ -$ 136,591$ -$ -$ -$ -$ -$ -$Pigeon Point WBS building rehab -$ -$ -$ 10,927$ -$ -$ -$ -$ -$ -$Hubbard 3rd pump -$ -$ -$ 32,782$ -$ -$ -$ -$ -$ -$Donna Drive hydro tank replacement -$ -$ -$ 54,636$ -$ -$ -$ -$ -$ -$Brier Lane tank exterior painting, fall Protection and ladder modification -$ -$ -$ -$ 168,826$ -$ -$ -$ -$ -$Future Tank Repairs -$ -$ -$ -$ 112,551$ -$ -$ -$ -$ -$

Subtotal: Capital Improvement Program Costs 82,000$ 987,255$ 774,457$ 491,727$ 525,613$ -$ -$ -$ -$ -$



Appendix B


TABLE 12Capital Improvement Program Costs (in Future-Year Dollars ) (2):Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026VEHICLES/ROLLING STOCK/EQUIPMENT


ENGINEERING NEEDSFields Landing Sewer FM Test andDesign 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$Cummins Road Fill Site Design 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Bay Well Const. Mgmt 10,838$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood and Walnut Tank Repairs 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$Water Tank Exterior Painting Specs 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hemlock Diversion Design 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$Lower Shop Drain design 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hartman SLS 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$Total Walnut Yard Grading/Fill Siteand New Storage Bldg pad Design 5,419$ -$ -$ -$ -$ -$ -$ -$ -$ -$18th and Quaker PSV Water 1,084$ -$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsDonna Specific (includes fall protec on/ ladder mods/etc) 2,709$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Broadway Sewer FM Test -$ 5,581$ -$ -$ -$ -$ -$ -$ -$ -$F Street Design -$ 5,581$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsRidgewood Specific (includes fall protec on/ ladder mods/etc -$ 2,791$ -$ -$ -$ -$ -$ -$ -$ -$Spruce Street Design -$ -$ 5,749$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsWalnut Specific(includes fall protec on/ladder mods/etc) -$ -$ 2,874$ -$ -$ -$ -$ -$ -$ -$Small Truck Garage Rehab -$ -$ -$ 8,882$ -$ -$ -$ -$ -$ -$Alder Design -$ -$ -$ 5,921$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsBrier Specific(includes fall protec on/ladder mods/etc) -$ -$ -$ 2,961$ -$ -$ -$ -$ -$ -$Hoover Sewer Crossing (1000 LF) -$ -$ -$ 2,961$ -$ -$ -$ -$ -$ -$D Street Design -$ -$ -$ -$ 6,099$ -$ -$ -$ -$ -$Future Tank Repairs -$ -$ -$ -$ 3,049$ -$ -$ -$ -$ -$

Estimated Future Projects -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Unforseen Expenditures -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Future Projects (4) -$ -$ -$ -$ -$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$

Subtotal: Capital Improvement Program Costs 90,495$ 103,256$ 83,359$ 74,017$ 253,107$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$

Total: CIP Program Costs (Future-Year Dollars) 172,495$ 1,090,511$ 857,816$ 565,744$ 778,720$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICT EXHIBIT 3WATER RATE STUDYDebt Service

TABLE 13EXISTING DEBT OBLIGATIONS BudgetAnnual Repayment Schedules: (1) FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26VacCon Installment Sale (2)

Principal Payment 38,985$ 38,985$ 38,985$ 38,985$ 38,985$ -$ -$ -$ -$ -$Interest Payment 1,185$ 1,185$ 1,185$ 1,185$ 1,185$ - - - - -

Subtotal: Annual Debt Service 40,170$ 40,170$ 40,170$ 40,170$ 40,170$ -$ -$ -$ -$ -$Coverage Requirement ($-Amnt above annual payment) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Reserve Requirement (total fund balance) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

1988 Freshwater/Mitchell Road Clean Water Bond, $3,399,562.92Principal Payment 140,890$ 145,377$ 150,086$ 154,905$ 160,004$ 165,149$ 170,499$ 87,308$ -$ -$Interest Payment 36,539$ 32,052$ 27,343$ 22,525$ 17,426$ 12,280 6,930 1,407 - -

Subtotal: Annual Debt Service 177,429$ 177,429$ 177,429$ 177,429$ 177,429$ 177,429$ 177,429$ 88,715$ -$ -$Coverage Requirement ($-Amnt above annual payment) (3) 212,915$ 212,915$ 212,915$ 212,915$ 212,915$ 212,915$ 212,915$ 106,457$ -$ -$Reserve Requirement (total fund balance) (3) 177,429$ 177,429$ 177,429$ 177,429$ 177,429$ 177,429$ 177,429$ 88,715$ -$ -$

Davis-Grunsky Loan, $166,000Principal Payment 4,669$ 4,786$ 4,906$ 5,028$ 5,154$ 5,283$ 5,415$ 5,551$ 5,689$ 5,831$Interest Payment 1,308$ 1,191$ 1,071$ 949$ 823$ 694 562 427 288 146

Subtotal: Annual Debt Service 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$Coverage Requirement ($-Amnt above annual payment) (3) 7,173$ 7,173$ 7,173$ 7,173$ 7,173$ 7,173$ 7,173$ 7,173$ 7,173$ 7,173$Reserve Requirement (total fund balance) (3) 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$ 5,977$

2012 Refinance of 1981 BondPrincipal Payment 39,811$ 41,217$ 42,672$ 44,179$ 45,738$ 47,353$ 25,716$ -$ -$ -$Interest Payment 9,689$ 8,283$ 6,828$ 5,321$ 3,762$ 2,147 450 - - -

Subtotal: Annual Debt Service 49,500$ 49,500$ 49,500$ 49,500$ 49,500$ 49,500$ 26,166$ -$ -$ -$Coverage Requirement ($-Amnt above annual payment) (3) 59,400$ 59,400$ 59,400$ 59,400$ 59,400$ 59,400$ 31,399$ -$ -$ -$Reserve Requirement (total fund balance) (3) 49,500$ 49,500$ 49,500$ 49,500$ 49,500$ 49,500$ 26,166$ -$ -$ -$

2012 Refinance of 2001 CIP LoanPrincipal Payment 93,126$ -$ -$ -$ -$ -$ -$ -$ -$ -$Interest Payment 1,443$ -$ -$ -$ -$ - - - - -

Subtotal: Annual Debt Service 94,570$ -$ -$ -$ -$ -$ -$ -$ -$ -$Coverage Requirement ($-Amnt above annual payment) (3) 113,483$ -$ -$ -$ -$ -$ -$ -$ -$ -$Reserve Requirement (total fund balance) (3) 94,570$ -$ -$ -$ -$ -$ -$ -$ -$ -$

2012 Refinance of 2006 Installment SalePrincipal Payment 116,448$ 120,263$ 124,203$ 128,273$ 128,995$ -$ -$ -$ -$ -$Interest Payment 19,152$ 15,337$ 11,397$ 7,327$ 3,125$ - - - - -

Subtotal: Annual Debt Service 135,600$ 135,600$ 135,600$ 135,600$ 132,120$ -$ -$ -$ -$ -$Coverage Requirement ($-Amnt above annual payment) (3) 162,720$ 162,720$ 162,720$ 162,720$ 158,543$ -$ -$ -$ -$ -$Reserve Requirement (total fund balance) (3) 135,600$ 135,600$ 135,600$ 135,600$ 132,120$ -$ -$ -$ -$ -$

1. File provided by HCSD staff: Data Request Item 8 Repayment Schedules.pdf and 2016-17 Budget.pdf (page 3).2. For the purposes of this analysis, NBS calculated principal and interest (annual payment equal to $80,340.92 including 2.95% annual interest). Source file:2016-17 Budget.pdf (page 14). Debt service obligation is split evenly between Water and Sewer utilities.3. Coverage requirement assumed to be 120% of annual payment. Reserve Requirement is equal to the maximum annual payment.

TABLE 14Existing Annual Debt Obligations to be Satisfied by Water Rates:Existing Annual Debt Service 503,247$ 408,677$ 408,677$ 408,677$ 405,197$ 232,907$ 209,572$ 94,692$ 5,977$ 5,977$Existing Annual Coverage Requirement 555,691$ 442,208$ 442,208$ 442,208$ 438,031$ 279,488$ 251,487$ 113,630$ 7,173$ 7,173$Existing Debt Reserve Target 463,076$ 368,507$ 368,507$ 368,507$ 365,026$ 232,907$ 209,572$ 94,692$ 5,977$ 5,977$

Projected


Exhibit 3 (Debt), 14 of 38

Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICT EXHIBIT 4WATER RATE STUDYExisting Rate Schedule

TABLE 16Current Water Rate Schedule:

Category 1 (1) Category 2 (2)Meter Size, Residential & Commercial

5/8 x 3/4 inch $16.30 $20.953/4 inch $20.95 $25.551 inch $27.85 $32.601 1/2 inch $55.85 $60.502 inch $92.95 $97.653 inch $207.95 $214.954 inch $367.40 $374.006 inch $817.65 $817.65

Category 1 (1) Category 2 (2)

Public & Non-Profit YouthRecreationFields (3)

Residential & Commercial< 100 HCF $2.30 $2.95 $2.30> 100 HCF $2.30 $2.95 $1.00

1. Water Service located in District before 11/04/1979 and Freshwater/Mitchell Road Assessment District.2. Water Service located in District Zone 1, 2, or 3 per Ordinance 82-4 or Outside District Boundary.

4. One Unit is equal to one HCF (Hundred Cubic Feet) or 748 gallons.

Data Source: 2016-17 Budget.pdf (FY 2016/17 Master Fees list).

Current Rates

Per Unit (4)

3. For services that provide irrigation only water to recognized non-profit and publicly owned recreation fields that are usedprimarily for youth 18 years and under, the monthly quantity charge per 100 cubic-feet.

Fixed Charges

Volumetric Charges


Exhibit 4 (Current Rates), 15 of 38

Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYAssumptions


ANNUAL ADJUSTMENTS (PLEASE SET HERE) (1) FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/261 Customer Growth 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%2 General Cost Inflation 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%3 Labor Cost Inflation 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%4 Water Purchases (2) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%5 Energy 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%6 Chemicals 0.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%7 Fuel 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%8 No Escalation 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

1. Customer growth is preliminarily estimated at 0%.2. Water Purchases are not inflated as the District will implement a pass-through as costs increase for purchased water.TABLE 18CAPITAL REHAB & REPLACEMENT RESERVE CALCULATION:

Capital R&R Reserve Target Calculation 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Land and Other Capital Assets Not Being Depreciated (2) 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$ 7,394,616$Capital Assets Net of Accumulated Depreciation (2) 8,834,840$ 8,737,114$ 9,532,797$ 10,078,894$ 10,325,299$ 10,770,898$ 11,010,019$ 11,490,480$ 11,980,850$ 12,481,561$Additions to Net Assets Per CIP for current year 172,495$ 1,090,511$ 857,816$ 565,744$ 778,720$ 579,637$ 835,837$ 860,912$ 886,739$ 913,341$Less: 3% for depreciation (270,220)$ (294,829)$ (311,718)$ (319,339)$ (333,121)$ (340,516)$ (355,376)$ (370,542)$ (386,028)$ (401,847)$

Total System Assets 16,131,731$ 16,927,413$ 17,473,510$ 17,719,915$ 18,165,514$ 18,404,635$ 18,885,096$ 19,375,466$ 19,876,178$ 20,387,672$Capital R&R Reserve (3% of Net Assets) 484,000$ 507,800$ 524,200$ 531,600$ 545,000$ 552,100$ 566,600$ 581,300$ 596,300$ 611,600$

2. Source file: Humboldt CSD Audit Rpt 6.30.15.pdf. Capital Assets are allocated to the Sewer System based on the average operating expense allocation of 46%. See Exhibit 1, Footnote #2.

TABLE 19Input Values for Table Above

Land & Non-Depreciable Assets 7,394,616$Other Capital Assets Not Being Depreciated -$Other capital assets, net 8,834,840$Depreciation % 3%Capital R&R Reserve % of Net Assets 3%

These variables are used in Exhibit 1, where each line-item has a designated assumption number (i.e., 1 through 8).Change the assumptions here and it carries through to the projections in Exhibit 1 (and subsequently into the Financial plan and rest of the model.).

$ mil.

$1 mil.

$2 mil.

$3 mil.

$4 mil.

$5 mil.

$6 mil.

$7 mil.

$8 mil.

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36

Annu

al O

blig

atio

ns


Water Revenue Requirements vs.Revenue Under Existing and Increased Rates

Rate Funded Capital ExpensesDebt ServiceO&M ExpensesRevenues under Existing RatesRevenues under Increased Rates

Chart 4


Assumptions, 16 of 38

Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYCost of Service Analysis

TABLE 20Classification of Expenses

FY 2017/18 (COM) (CAP) (CA) (COM) (CAP) (CA)

Personnel ExpensesWages: Operation 741,083$ 259,379$ 444,650$ 37,054$ 35.0% 60.0% 5.0%PERS 189,638$ 66,373$ 113,783$ 9,482$ 35.0% 60.0% 5.0%UI 2,818$ 986$ 1,691$ 141$ 35.0% 60.0% 5.0%Group Insurance 543,836$ 190,343$ 326,302$ 27,192$ 35.0% 60.0% 5.0%Workers Comp 16,681$ 5,838$ 10,009$ 834$ 35.0% 60.0% 5.0%FICA / Medicare 56,638$ 19,823$ 33,983$ 2,832$ 35.0% 60.0% 5.0%Misc. Benefits 113$ 39$ 68$ 6$ 35.0% 60.0% 5.0%

Operating ExpensesWater Purchase HBMWD (3) 1,040,577$ 1,040,577$ -$ -$ 100.0% 0.0% 0.0%Water Purchase Eureka (3) 415,140$ 415,140$ -$ -$ 100.0% 0.0% 0.0%Sewage Treatment: O&M (4) -$ -$ -$ -$ 90.0% 10.0% 0.0%Water/Sewer Analysis 8,372$ -$ 6,279$ 2,093$ 0.0% 75.0% 25.0%Supplies/Construction 72,558$ 18,140$ 54,419$ -$ 25.0% 75.0% 0.0%Supplies / Office-Admin 8,930$ -$ 4,465$ 4,465$ 0.0% 50.0% 50.0%Supplies Engineering 4,186$ 2,093$ 2,093$ -$ 50.0% 50.0% 0.0%Supplies/Maintenance 55,814$ 13,954$ 41,861$ -$ 25.0% 75.0% 0.0%Temp Labor - Maintenance 3,349$ 837$ 2,512$ -$ 25.0% 75.0% 0.0%Temp Labor - Construction 11,163$ 2,791$ 8,372$ -$ 25.0% 75.0% 0.0%Temp Labor - Customer Service/Finance -$ -$ -$ -$ 0.0% 20.0% 80.0%Repairs & Maint: Trucks 27,907$ 5,581$ 20,930$ 1,395$ 20.0% 75.0% 5.0%Building & Grounds Maint 11,163$ 5,581$ 5,023$ 558$ 50.0% 45.0% 5.0%Electrical Power 178,605$ 142,884$ 26,791$ 8,930$ 80.0% 15.0% 5.0%Street Lights 44,651$ -$ 40,186$ 4,465$ 0.0% 90.0% 10.0%Telephone 7,256$ -$ 1,451$ 5,805$ 0.0% 20.0% 80.0%Equipment Rental 5,023$ 1,507$ 3,265$ 251$ 30.0% 65.0% 5.0%Property Lease -$ -$ -$ -$ 0.0% 100.0% 0.0%Postage 19,535$ -$ 3,907$ 15,628$ 0.0% 20.0% 80.0%Freight 279$ -$ 56$ 223$ 0.0% 20.0% 80.0%Chemicals 5,690$ 4,267$ 1,422$ -$ 75.0% 25.0% 0.0%Liability Insurance 40,186$ -$ 40,186$ -$ 0.0% 100.0% 0.0%Legal 11,163$ -$ 5,581$ 5,581$ 0.0% 50.0% 50.0%Accounting 7,814$ -$ 3,907$ 3,907$ 0.0% 50.0% 50.0%Engineering 11,163$ 5,023$ 5,023$ 1,116$ 45.0% 45.0% 10.0%Other Professional Services 8,930$ 1,786$ 1,786$ 5,358$ 20.0% 20.0% 60.0%Bank Service Charges 20,093$ -$ -$ 20,093$ 0.0% 0.0% 100.0%Transportation 27,907$ 12,558$ 12,558$ 2,791$ 45.0% 45.0% 10.0%Office Equip / Maint 12,056$ 2,411$ 2,411$ 7,234$ 20.0% 20.0% 60.0%Computer Software Maintenance 16,744$ 3,349$ 3,349$ 10,047$ 20.0% 20.0% 60.0%Memberships & Subscriptions 12,893$ 4,513$ 4,513$ 3,868$ 35.0% 35.0% 30.0%Bad Debts & Min Bal write-off 13,395$ -$ -$ 13,395$ 0.0% 0.0% 100.0%Conferences & Continuing Ed 7,814$ 2,735$ 2,735$ 2,344$ 35.0% 35.0% 30.0%Certifications 1,116$ 447$ 447$ 223$ 40.0% 40.0% 20.0%State/County & LAFCO Fees & Charges 16,744$ -$ -$ 16,744$ 0.0% 0.0% 100.0%Elections Expense -$ -$ -$ -$ 0.0% 0.0% 100.0%Human Resources 8,372$ 2,930$ 2,930$ 2,512$ 35.0% 35.0% 30.0%Miscellaneous 11,163$ 3,907$ 3,907$ 3,349$ 35.0% 35.0% 30.0%Directors Fees 8,930$ -$ -$ 8,930$ 0.0% 0.0% 100.0%

GRAND TOTAL: WATER EXPENSES 3,707,492$ 2,235,794$ 1,242,850$ 228,847$ 60.3% 33.5% 6.2%

Basis of ClassificationBudget CategoriesTotal RevenueRequirements Commodity Capacity Customer


Funct. & Classification, 17 of 38

Appendix B


TABLE 21Classification of Expenses, continued

FY 2017/18 (COM) (CAP) (CA) (COM) (CAP) (CA)Debt Service Payments

VacCon Installment Sale (2) 40,170$ -$ 40,170$ -$ 0.0% 100.0% 0.0%1988 Freshwater/Mitchell Road Clean Water Bond, $3,399,562.92177,429$ -$ 177,429$ -$ 0.0% 100.0% 0.0%Davis-Grunsky Loan, $166,000 5,977$ -$ 5,977$ -$ 0.0% 100.0% 0.0%2012 Refinance of 1981 Bond 49,500$ -$ 49,500$ -$ 0.0% 100.0% 0.0%2012 Refinance of 2001 CIP Loan -$ -$ -$ -$ 0.0% 100.0% 0.0%2012 Refinance of 2006 Installment Sale 135,600$ -$ 135,600$ -$ 0.0% 100.0% 0.0%Grand Total: Future Annual Debt Service -$ -$ -$ -$ 0.0% 100.0% 0.0%

Total Debt Service Payments 408,677$ -$ 408,677$ -$ 0.0% 100.0% 0.0%Capital ExpendituresRate Funded Capital Expenses 1,090,511$ -$ 1,090,511$ -$ 0.0% 100.0% 0.0%TOTAL REVENUE REQUIREMENTS 5,206,680$ 2,235,794$ 2,742,039$ 228,847$ 42.9% 52.7% 4.4%Less: Non-Rate Revenues

Operating RevenueMetered Water Sales -$ -$ -$ -$ 42.9% 52.7% 4.4%Sewer Service Charges -$ -$ -$ -$ 42.9% 52.7% 4.4%Water Construction Fees (20,000)$ (8,588)$ (10,533)$ (879)$ 42.9% 52.7% 4.4%Sewer Construction Fees -$ -$ -$ -$ 42.9% 52.7% 4.4%Account Fees (40,954)$ (17,586)$ (21,568)$ (1,800)$ 42.9% 52.7% 4.4%Inspection Fees (975)$ (419)$ (514)$ (43)$ 42.9% 52.7% 4.4%Reimbursable Maintenance (5,851)$ (2,512)$ (3,081)$ (257)$ 42.9% 52.7% 4.4%Miscellaneous (11,701)$ (5,025)$ (6,162)$ (514)$ 42.9% 52.7% 4.4%

Non-Operating RevenueWater Capital Connection Fees -$ -$ -$ -$ 42.9% 52.7% 4.4%Sewer Capital Connection Fees -$ -$ -$ -$ 42.9% 52.7% 4.4%Interest/General (2,725)$ (1,170)$ (1,435)$ (120)$ 42.9% 52.7% 4.4%Discounts Earned -$ -$ -$ -$ 42.9% 52.7% 4.4%Sale of Fixed Assets -$ -$ -$ -$ 42.9% 52.7% 4.4%Sales of Scrap Metal -$ -$ -$ -$ 42.9% 52.7% 4.4%Bad Debt Recovery -$ -$ -$ -$ 42.9% 52.7% 4.4%Property Taxes -$ -$ -$ -$ 42.9% 52.7% 4.4%NET REVENUE REQUIREMENTS 5,124,474$ 2,200,494$ 2,698,746$ 225,234$Allocation of Revenue Requirements 100.0% 42.9% 52.7% 4.4%

Net Revenue Reqt. Check from Financial Plan 0$

Basis of ClassificationBudget CategoriesTotal RevenueRequirements Commodity Capacity Customer



Appendix B


TABLE 22Classification of Expenses, continuedAdjustments to Classification of ExpensesAdjustment for Current Rate Level: Total (COM) (CAP) (CA)

Test Year (FY 2017/18) Target Rate Rev. After Rate Increases4,517,500$Projected Rate Revenue at Current Rates 3,250,000$Test Year (FY 2017/18) Projected Rate Adjustment 39%Adjusted Net Revenue Req'ts 4,517,500$ 1,939,854$ 2,379,090$ 198,556$

Percent of Revenue 100.0% 42.94% 52.66% 4.40%

TABLE 23

Rate-Design Adjustments to Fixed/Variable % 100.0% 48.0% 47.5% 4.5%Rate-Design Adjustments to Fixed/Variable ($) $4,517,500 $2,168,400 $2,145,813 $203,288

Variable Charges (Volumetric Rates) 48.0%Fixed Charges 52.0%

CustomerRelated Costs

Fixed CostsCapacity

Related Costs

Net Revenue Requirements52% Fixed / 48% Variable

Total RateRevenue

RequirementsFY 2017/18

CommodityRelated Costs

Variable Costs



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYWater Cost of Service Analysis

TABLE 24

Customer Class 2015 (CY)Volume (hcf) (1)

% Adjustmentfor Conservation

(2)

Estimated FY2016/17 Volume

Adjusted forConservation

Percent of TotalVolume

Residential 450,718 0% 450,718 74.1%Multi-Family Residential 57,067 0% 57,067 9.4%Mobile Home Park 23,117 0% 23,117 3.8%Commercial 57,962 0% 57,962 9.5%Church 1,629 0% 1,629 0.3%School 14,445 0% 14,445 2.4%Irrigation/Landscaping 3,651 0% 3,651 0.6%Total 608,589 0% 608,589 100%

1. Consumption data is based on the HCSD's billing data.2. Production dropped approximately 20% from 2013 to 2015. No additional conservation is assumed.

Commodity Related Costs: These costs are associated with the total consumption (flow) of water over aspecified period of time (e.g. annual).

TABLE 25Development of the Capacity Allocation Factors

Customer ClassAverage

Monthly Use(hcf)

Peak MonthlyUse (hcf) (1)

Peak MonthlyFactor

Max MonthCapacity Factor

Residential 37,560 54,742 1.46 75.6%Multi-Family Residential 4,756 5,801 1.22 8.0%Mobile Home Park 1,926 2,405 1.25 3.3%Commercial 4,830 6,590 1.36 9.1%Church 136 271 2.00 0.4%School 1,204 1,886 1.57 2.6%Irrigation/Landscaping 304 747 2.46 1.0%Total 50,716 72,442 1.43 100%

1. Based on peak monthly data (peak day data not available).

the maximum size of facilities required to meet this demand.Capacity Related Costs: Costs associated with the maximum demand required at one point in time or

Development of the Commodity Allocation Factor


Allocation Factors, 20 of 38

Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYWater Cost of Service Analysis

TABLE 26Development of the Customer Service Allocation Factor

Customer Class Number ofMeters (1)

Percent of Total

Residential 6,972 91.7%Multi-Family Residential 356 4.7%Mobile Home Park 9 0.1%Commercial 213 2.8%Church 18 0.2%School 15 0.2%Irrigation/Landscaping 19 0.2%Total 7,602 100.0%

1. Meter Count data is based on the HCSD's billing data for September 2016.

Customer Related Costs : Costs associated with having a customer on the water system. These costs varywith the addition or deletion of customers on the system. Examples: Meter-reading, Postage and billing.


Allocation Factors, 21 of 38

Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYCustomer Data

91.5%

4.7%0.1%

2.8%0.2% 0.2%

84.2%

6.3%0.7%

5.6%1.0% 0.7%

74.1%

9.4%3.8%

9.5%

2.4% 0.6%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Humboldt Community Service District% of Consumption vs. % of Equivalent Meters by Customer Class

Total % of Meters

Total % of Equivalent Meters

Total % of Consumption

MFR uses more water vs.their allocated capacity

(Eq. Meters).

Schools uses far morewater vs. their allocatedcapacity (Eq. Meters).

SFR uses far less water vs.their allocated capacity (Eq.

Meters).

MFR/MH uses more watervs. their allocated capacity

(Eq. Meters). Comm. uses more watervs. their allocated capacity

(Eq. Meters).

Landscape uses about the samevs. their allocated capacity (Eq.

Meters).


% Cons vs. % Eqv Meters, 22 of 38

Appendix B


TABLE 27

MeterCapacity(gpm) (1)

Equivalency to 5/8 inch



5/8 inch 20 1.00 20 1.003/4 inch 30 1.50 30 1.501 inch 50 2.50 50 2.50

1.5 inch 100 5.00 100 5.002 inch 160 8.00 160 8.00

3 inch 320 16.00 350 17.504 inch 500 25.00 700 35.006 inch 1,000 50.00 1,600 80.008 inch 1,600 80.00 2,800 140.00

10 inch 4,200 210.00 4,400 220.0012 inch 5,300 265.00 N/A --

1. Per AWWA M-1, Table B-1.2. Per AWWA M-6, Table 5-3.

Compound Class I Meters Fire Service Type I & II Meters

Turbine Class II Meters

Meter Size

Standard Meters Fire Meters

Displacement Meters Displacement Meters



Appendix B


TABLE 28

5/8 inch 3/4 inch 1 inch 1.5 inch 2 inch 3 inch 4 inch 6 inch

Residential 6,807 91 64 6 1 - 2 1 6,972 91.5%Multi-Family Residential 267 31 32 22 3 1 - - 356 4.7%Mobile Home Park 1 - - 4 3 1 - - 9 0.1%Commercial 127 30 24 16 11 5 - - 213 2.8%Church 9 1 2 4 2 - - - 18 0.2%School 3 - - 6 5 1 - - 15 0.2%Irrigation/Landscaping 9 3 3 2 1 - 1 - 19 0.2%Fire Service 18 - - 1 - - - 1 20 0.3%

Total 7,241 156 125 61 26 8 3 2 7,622 100.0%

TABLE 29


Residential 6,807 137 160 30 8 - 50 50 7,242 84.2%Multi-Family Residential 267 47 80 110 24 16 - - 544 6.3%Mobile Home Park 1 - - 20 24 16 - - 61 0.7%Commercial 127 45 60 80 88 80 - - 480 5.6%Church 9 2 5 20 16 - - - 52 0.6%School 3 - - 30 40 16 - - 89 1.0%Irrigation/Landscaping 9 5 8 10 8 - 25 - 64 0.7%Fire Service 18 - - 5 - - - 50 73 0.8%

Total 7,241 234 313 305 208 128 75 100 8,604 100.0%

TABLE 30

Residential 450,718 74.1%Multi-Family Residential 57,067 9.4%Mobile Home Park 23,117 3.8%Commercial 57,962 9.5%Church 1,629 0.3%School 14,445 2.4%Irrigation/Landscaping 3,651 0.6%Fire Service 57 0.0%

Total 608,646 100.0%

Consumptionby Class and Size

TotalConsumption

Total % ofConsumption

Total % ofMetersTotal Meters

FY 2015/16

Number of EquivalentMeters

by Class and Size

FY 2015/16Total Meters

Total % ofEquivalent

Meters

Number of Metersby Class and Size



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYWater Cost of Service Analysis/Rate Design

TABLE 31PROPOSED VOLUMETRIC CHARGES FOR FY 2016/17:Recommended Rate Alternative (52% Fixed / 48% Variable)

Customer Classes Number ofMeters (1)

WaterConsumption

(hcf/yr) (2)

Total TargetRev. Req't from

Vol. Charges

% of Total RateRevenue

UniformCommodity

Rates ($/hcf)

Proposed RateStructure

Residential 6,972 450,718 1,605,906$ 35.5% $3.563 UniformMulti-Family Residential 356 57,067 203,329$ 4.5% $3.563 UniformMobile Home Park 9 23,117 82,366$ 1.8% $3.563 UniformCommercial 213 57,962 206,518$ 4.6% $3.563 UniformChurch 18 1,629 5,804$ 0.1% $3.563 UniformSchool 15 14,445 51,467$ 1.1% $3.563 UniformIrrigation/Landscaping 19 3,651 13,008$ 0.3% $3.563 UniformTotal Potable Water 7,602 608,589 2,168,400$ 48%

1. Consumption data is based on the City of Eureka's billing data.2. Water consumption is % less than FY 2015/16 consumption to account for conservation.


Proposed Uniform Volume Charges, 25 of 38

Appendix B


TABLE 32ALLOCATION OF WATER REVENUE REQUIREMENTS:

Commodity-Related Costs Variable 2,168,400$ 48.0%Capacity-Related Costs Fixed 2,145,813 47.5%Customer-Related Costs Fixed 203,288 4.5%Net Revenue Requirement 4,517,500$ 100%

48% total variable52% total fixed

100%

TABLE 33Allocation of Unadjusted Net Revenue Requirements - FY 2017/18:

Residential 1,605,906$ 1,621,519$ 186,440$ 3,413,866$ 75.6%Multi-Family Residential 203,329$ 171,832$ 9,520$ 384,681$ 8.5%Mobile Home Park 82,366$ 71,239$ 241$ 153,845$ 3.4%Commercial 206,518$ 195,203$ 5,696$ 407,417$ 9.0%Church 5,804$ 8,027$ 481$ 14,313$ 0.3%School 51,467$ 55,865$ 401$ 107,734$ 2.4%Irrigation/Landscaping 13,008$ 22,127$ 508$ 35,644$ 0.8%Total Net Revenue Requirement 2,168,400$ 2,145,813$ 203,288$ 4,517,500$ 100%

VARIABLE$2,168,400

48% 48% 5% 100.0%

Total Net Revenue Requirementby Classification Component

FIXED $4,517,500$2,349,100

Unadjusted Net Rev. Req'ts.

Customer ClassesClassification Components Cost of Service

Net Rev. Req'ts

% of COS NetRevenue

Req'tsCommodity-

Related CostsCapacity-Related

CostsCustomer-

Related Costs

Classification Components

(52% Fixed / 48% Variable)

Adjusted Net RevenueRequirements (2017/18)

Fixed &Variable CostAllocations

Recommended Rate Alternative (52% Fixed / 48% Variable)


Proposed Fixed Charges, 26 of 38

Appendix B


TABLE 34Cost-of-Service Summary of Revenue Requirements:

Residential 2,652,265$ 80.5% 3,413,866$ 75.6% -5.0%Multi-Family Residential 248,005$ 7.5% 384,681$ 8.5% 1.0%Mobile Home Park 78,742$ 2.4% 153,845$ 3.4% 1.0%Commercial 243,180$ 7.4% 407,417$ 9.0% 1.6%Church 10,699$ 0.3% 14,313$ 0.3% 0.0%School 46,916$ 1.4% 107,734$ 2.4% 1.0%Irrigation/Landscaping 13,434$ 0.4% 35,644$ 0.8% 0.4%Total 3,293,242$ 100.0% 4,517,500$ 100% 0.0%

TABLE 35Meter Equivalency Factors Used in Fixed Charges Calculations:

Meter Capacity(gpm) (1)




5/8 inch 20 1.00 20 1.003/4 inch 30 1.50 30 1.501 inch 50 2.50 50 2.50

1.5 inch 100 5.00 100 5.002 inch 160 8.00 160 8.00

3 inch 320 16.00 350 17.504 inch 500 25.00 700 35.006 inch 1,000 50.00 1,600 80.008 inch 1,600 80.00 2,800 140.00

10 inch 4,200 210.00 4,400 220.0012 inch 5,300 265.00 N/A --

1. Per AWWA M-1, Table B-1.2. Per AWWA M-6, Table 5-3.

Displacement Meters Displacement Meters

Compound Class I Meters Fire Service Type I & II Meters

Turbine Class II Meters

Meter Size

Standard Meters Fire Meters

Rate Revenue % of Revenue COSRev. Req't

% of COSRev. Req't.

% of 2015/16vs. 2017/18

Customer Class

Rate Revenue -FY 2015/16

Recommended Rate Alternative (52% Fixed/ 48% Variable)

Fixed Charges for FY 2017/18



Appendix B


TABLE 36CALCULATION OF MONTHLY FIXED METER SERVICE CHARGES FOR FY 2017/18: Recommended Rate Alternative (52% Fixed / 48% Variable)


Residential 6,807 91 64 6 1 - 2 1 6,972Multi-Family Residential 267 31 32 22 3 1 - - 356Mobile Home Park 1 - - 4 3 1 - - 9Commercial 127 30 24 16 11 5 - - 213Church 9 1 2 4 2 - - - 18School 3 - - 6 5 1 - - 15Irrigation/Landscaping 9 3 3 2 1 - 1 - 19Total Meters/Accounts 7,223 156 125 60 26 8 3 1 7,602Hydraulic Capacity Factor (2) 1.00 1.50 2.50 5.00 8.00 16.00 25.00 50.00Total Equivalent Meters 7,223 234 313 300 208 128 75 50 8,531

Monthly Fixed Service Charges Customer Costs ($/Acct/month) (3) $2.23 $2.23 $2.23 $2.23 $2.23 $2.23 $2.23 $2.23 Capacity Costs ($/Acct/month) (4) $20.96 $31.44 $52.41 $104.81 $167.70 $335.39 $524.05 $1,048.11

Total Monthly Meter Charge $23.19 $33.67 $54.63 $107.04 $169.93 $337.62 $526.28 $1,050.34Annual Fixed Costs Allocated to Monthly Meter Charges

Customer Costs $ 203,288Capacity Costs 2,145,813

Total Fixed Meter Costs 2,349,100$Annual Revenue from Monthly Meter Charges

Customer Charges 193,153$ 4,172$ 3,343$ 1,604$ 695$ 214$ 80$ 27$ 203,288$Capacity Charges 1,816,916 58,862 78,608 75,464 52,322 32,198 18,866 12,577 2,145,813Total Revenue from Monthly Meter Charges2,010,069$ 63,033$ 81,951$ 77,068$ 53,017$ 32,412$ 18,946$ 12,604$ 2,349,100$

1. Meter by Class and Size are based on September 2016 customer billing data.2. Source: AWWA Manual M1, "Principles of Water Rates, Fees, and Charges", Table B-1.3. Customer costs are allocated to each customer by dividing the total customer costs by the total number of customers.4. Capacity costs are allocated by meter size and the hydraulic capacity of the meter.

Number of Meters by Class and Size (1)FY 2017/18

Total



Appendix B

HUMBOLDT COMMUNITY SERVICES DISTRICTWATER RATE STUDYWater Cost of Service Analysis/Rate DesignPreliminary Draft Subject to Material Revision, Do Not Cite or Distribute

TABLE 37Fixed Charges Revenue Check:

5/8 inch 3/4 inch 1 inch 1.5 inch 2 inch 3 inch 4 inch 6 inchResidential 6,807 91 64 6 1 - 2 1 6,972Multi-Family Residential 267 31 32 22 3 1 - - 356Mobile Home Park 1 - - 4 3 1 - - 9Commercial 127 30 24 16 11 5 - - 213Church 9 1 2 4 2 - - - 18School 3 - - 6 5 1 - - 15Irrigation/Landscaping 9 3 3 2 1 - 1 - 19

Total Meters/Accounts 7,223 156 125 60 26 8 3 1 7,602

TABLE 38 Recommended Rate Alternative (52% Fixed / 48% Variable)

5/8 inch 3/4 inch 1 inch 1.5 inch 2 inch 3 inch 4 inch 6 inchCharges by Meter Size $23.19 $33.67 $54.63 $107.04 $169.93 $337.62 $526.28 $1,050.34Revenue from Fixed ChargesResidential 1,894,301$ 36,769$ 41,959$ 7,707$ 2,039$ -$ 12,631$ 12,604$ 2,008,010$Multi-Family Residential 74,303$ 12,526$ 20,979$ 28,258$ 6,117$ 4,051$ -$ -$ 146,235$Mobile Home Park 278$ -$ -$ 5,138$ 6,117$ 4,051$ -$ -$ 15,585$Commercial 35,342$ 12,122$ 15,735$ 20,552$ 22,430$ 20,257$ -$ -$ 126,438$Church 2,505$ 404$ 1,311$ 5,138$ 4,078$ -$ -$ -$ 13,436$School 835$ -$ -$ 7,707$ 10,196$ 4,051$ -$ -$ 22,789$Irrigation/Landscaping 2,505$ 1,212$ 1,967$ 2,569$ 2,039$ -$ 6,315$ -$ 16,607$

Total Revenue - Fixed Charges 2,349,100$

Number of Meters by Class and Size FY 2017/18 Total

Projected Revenue From Fixed Charges byCustomer Class

FY 2017/18 Total


Fixed Charges Rev Check, 29 of 38

Appendix B


TABLE 39

FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22Projected Increase in Rate Revenue per Financial Plan: 39.00% 7.00% 3.00% 2.00% 1.50%Fixed Service Charge (by Meter Size) (1)Monthly Fixed Service Charges: Category 1 Category 2

5/8 inch $16.30 $20.95 $23.19 $24.81 $25.56 $26.07 $26.463/4 inch $20.95 $25.55 $33.67 $36.03 $37.11 $37.85 $38.421 inch $27.85 $32.60 $54.63 $58.46 $60.21 $61.42 $62.341 1/2 inch $55.85 $60.50 $107.04 $114.53 $117.97 $120.33 $122.132 inch $92.95 $97.65 $169.93 $181.82 $187.28 $191.02 $193.893 inch $207.95 $214.95 $337.62 $361.26 $372.09 $379.54 $385.234 inch $367.40 $374.00 $526.28 $563.12 $580.02 $591.62 $600.496 inch $817.65 $817.65 $1,050.34 $1,123.86 $1,157.58 $1,180.73 $1,198.44

Volumetric Charges for All Water ConsumedUniform Rate (per hcf) $2.30 $3.56 $3.81 $3.92 $4.00 $4.061. The most common meter size for Residential customers is a 5/8 inch meter.

CURRENT VS. PROPOSED WATER RATES: Recommended Rate Alternative (52% Fixed / 48% Variable)CurrentRatesWater Rate Schedule Proposed Rates


Current & Proposed Rates, 30 of 38

Appendix B


TABLE 40

Bill Comparisons - Current vs. Proposed Rates for FY 2015 (Residential):AverageWinter

AverageAnnual

AverageSummer

Residential1 3 4 5 7 9 11

SFR Bill - Current Rates $18.60 $23.20 $25.50 $27.80 $32.40 $37.00 $41.60SFR Bill - (52% Fixed / 48% Variable) $26.75 $33.87 $37.43 $40.99 $48.11 $55.23 $62.35SFR Bill - Alt #2 (40% Fixed / 60% Variable) $22.34 $31.24 $35.69 $40.14 $49.04 $57.94 $66.84SFR Bill - Alt #3 (60% Fixed / 40% Variable) $29.68 $35.60 $38.56 $41.52 $47.44 $53.36 $59.28Difference (in $) Alt. #1 Uniform vs. Current Rates $8.15 $10.67 $11.93 $13.19 $15.71 $18.23 $20.75Difference (in %) Alt. #1 Uniform vs. Current Rates 44% 46% 47% 47% 48% 49% 50%Difference (in $) Alt. #2 Uniform vs. Current Rates $3.74 $8.04 $10.19 $12.34 $16.64 $20.94 $25.24Difference (in %) Alt. #2 Uniform vs. Current Rates 20% 35% 40% 44% 51% 57% 61%Difference (in $) Alt. #3 Uniform vs. Current Rates $11.08 $12.40 $13.06 $13.72 $15.04 $16.36 $17.68Difference (in %) Alt. #3 Uniform vs. Current Rates 60% 53% 51% 49% 46% 44% 43%Note: Average consumption for a residential customer with a 5/8-inch meter is 5 HCF/month.

TABLE 41

Bill Comparisons - Current vs. Proposed Rates for FY 2015 (Commercial):

7 15 19 23 27 31 35Commercial Bill - Current Rates $109.05 $127.45 $136.65 $145.85 $155.05 $164.25 $173.45Comm Bill - (52% Fixed / 48% Variable) $194.85 $223.33 $237.57 $251.81 $266.05 $280.29 $294.53Comm Bill - Alt #2 (40% Fixed / 60% Variable) $158.71 $194.31 $212.11 $229.91 $247.71 $265.51 $283.31Comm Bill - Alt #3 (60% Fixed / 40% Variable) $218.89 $242.57 $254.41 $266.25 $278.09 $289.93 $301.77Difference (in $) Alt. #1 Uniform vs. Current Rates $85.80 $95.88 $100.92 $105.96 $111.00 $116.04 $121.08Difference (in %) Alt. #1 Uniform vs. Current Rates 79% 75% 74% 73% 72% 71% 70%Difference (in $) Alt. #2 Uniform vs. Current Rates $49.66 $69.16 $77.76 $84.06 $92.66 $101.26 $109.86Difference (in %) Alt. #2 Uniform vs. Current Rates 46% 55% 58% 58% 60% 62% 63%Difference (in $) Alt. #3 Uniform vs. Current Rates $109.84 $117.42 $120.06 $120.40 $123.04 $125.68 $128.32Difference (in %) Alt. #3 Uniform vs. Current Rates 101% 94% 89% 83% 79% 77% 74%Note: Average consumption for Commercial Customers is 23 HCF/monthly.

Water Consumption (HCF)

Commercial Bill Comparisonwith a 2 inch meter

Water Consumption (HCF)

AverageWinter

AverageAnnual

AverageSummer


Bill Comps, 31 of 38

Appendix B

Prepared by NBSwww.nbsgov.com | 800.676.7516 SFR Distribution Graph, Page 32 of 38

0

100

200

300

400

500

600

700

800

900

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Num

ber o

f Cus

tom

ers

Average Annual Consumption, Bi-Monthly (ccf)

Single-Family ResidentialWater Consumption Distribution Curve - CY 2015

Average Winter Consumption= 4 hcf per month

Average Annual Consumption= 5 hcf per month

Average Summer Consumption= 8 hcf per month

Average Annual Consumption:*Consumption up to 4 hcf represents 40% of SFR.

*Consumption between 5-8 hcf represents 33% of SFR.*Consumption above 8 hcf represents 27% of SFR.

40% of SFR Customers



Appendix B

Prepared by NBSwww.nbsgov.com | 800.676.7516 SFR Bill Comp Alt #1, Page 33 of 38

$18.

60 $23.

20

$25.

50

$27.

80 $32.

40 $37.

00 $41.

60

$26.

75 $33.

87 $37.

43 $40.

99 $48.

11 $55.

23 $62.

35

$0

$20

$40

$60

$80

1 3 4 5 7 9 11

Mon

thly

Bill


Single-Family Residential Water Bill ComparisonCurrent vs. Proposed 2017/18 Rates (5/8" meter)

SFR Bill - Current Rates

SFR Bill - (52% Fixed / 48% Variable)

AverageWinter

AverageAnnual

AverageSummer

Appendix B

Prepared by NBSwww.nbsgov.com | 800.676.7516 Commercial Bill Comp Alt #1, Page 34 of 38

$109

.05

$127

.45

$136

.65

$145

.85

$155

.05

$164

.25

$173

.45

$194

.85 $223

.33

$237

.57

$251

.81

$266

.05

$280

.29

$294

.53

$0

$100

$200

$300

$400

7 15 19 23 27 31 35

Mon

thly

Bill


Commercial Water Bill ComparisonCurrent vs. Proposed 2017/18 Rates (2" meter)

Commercial Bill - Current Rates

Comm Bill - (52% Fixed / 48% Variable)

AverageWinter

AverageAnnual

AverageSummer

Appendix B


TABLE 42 TABLE 43

meters* Annual Summer WinterResidential 450,718 6,972 5 8 4 Residential -$ -$ $ 2,652,265Multi-Family Residential 57,067 356 13 16 11 Multi-Family Residential -$ -$ $ 248,005Mobile Home Park 23,117 9 214 267 178 Mobile Home Park -$ -$ $ 78,742Commercial 57,962 213 23 31 18 Commercial -$ -$ $ 243,180Church 1,629 18 8 15 5 Church -$ -$ $ 10,699School 14,445 15 80 126 53 School -$ -$ $ 46,916Fire Service 57 20 0 0 0 Fire Service -$ -$ $ 106Irrigation/Landscaping 3,651 19 16 39 1 Irrigation/Landscaping -$ -$ $ 13,434Construction Meter - 2 - - - Construction Meter -$ -$ $ 1,638

Total 608,646 7,624 Total -$ -$ $ 3,294,985Fixed vs. Variable % 0% 0%1. Rate Revenue For October 2015 - September 2016 is from HCSD's billing data.

FY 2015/16 Approximate Rate Revenue (1)

Meter Counts are as of September 2016. 102 additional accounts with unknown meter sizes were added tothe most common meter size (5/8"): 86 Residential, 2 MFR, 5 Commercial, and 9 Fire Service.

Revenue byCustomer Class Fixed Charges

VariableCharges TOTAL

Water Consumption Data used for Humboldt Community Services District Rates:

Summary of Consumption by ClassConsumption

(hcf/year)


FY15-16 Data, 35 of 38

Appendix B


TABLE 44Total Water Supply (hcf) 2016 2015 2014 2013

January 61,468 73,523 83,740 83,740February 74,661 79,644 67,462 67,462March 77,768 73,823 83,674 83,674April 78,191 72,855 75,909 75,909May 77,066 79,840 96,610 96,610June 98,408 88,624 94,371 94,371July 98,194 93,712 104,973 104,973August - 97,677 99,914 99,914September - 88,459 85,616 85,616October - 79,481 79,898 79,898November - 78,853 76,254 76,254December - 85,858 73,658 73,658TOTAL 567,771 994,363 1,024,094 1,024,093

TABLE 45Total Water Supply 2016 2015 2014 2013

January 45,981,000 54,999,000 62,642,000 62,642,000February 55,850,000 59,578,000 50,465,000 50,465,000March 58,174,000 55,223,000 62,592,000 62,592,000April 58,491,000 54,499,000 56,784,000 56,784,000May 57,649,000 59,724,000 72,269,000 72,269,000June 73,614,000 66,295,000 70,594,000 70,594,000July 73,454,000 70,101,000 78,525,000 78,525,000August - 73,067,000 74,741,000 74,741,000September - 66,172,000 64,045,000 64,045,000October - 59,456,000 59,768,000 59,768,000November - 58,986,000 57,042,000 57,042,000December - 64,226,000 55,100,000 55,100,000TOTAL 423,215,016 742,328,015 764,569,014 764,569,013


Water Production Data, 36 of 38

Appendix B


TABLE 46

MONTH TRUSDALE HARRIS ELK RIVER(HH to PH) (1)

ELK RIVER(PH to HH) (1) PRINC. SO. BAY WELL (2) SP. POINT WELL TOTAL

January 20,374,000 12,476,000 - - - - 13,131,000 45,981,000February 25,037,000 15,192,000 - - - - 15,621,000 55,850,000March 25,888,000 15,683,000 - - - - 16,603,000 58,174,000April 25,649,000 15,905,000 - - - - 16,937,000 58,491,000May 25,054,000 15,896,000 - - - - 16,699,000 57,649,000June 33,395,000 20,011,000 - - - - 20,208,000 73,614,000July 33,940,000 20,009,000 - - - - 19,505,000 73,454,000August - - - - - - - -September - - - - - - - -October - - - - - - - -November - - - - - - - -December - - - - - - - -TOTAL 189,337,000 115,172,000 - - - - 118,704,000 423,213,000

TABLE 47



January 22,705,000 18,715,000 - - - - 13,579,000 54,999,000February 21,421,000 19,041,000 2,131,000 - - - 16,985,000 59,578,000March 22,776,000 18,171,000 - - - - 14,276,000 55,223,000April 22,364,000 17,748,000 - - - - 14,387,000 54,499,000May 25,364,000 18,508,000 - - - - 15,852,000 59,724,000June 30,971,000 18,668,000 - - - - 16,656,000 66,295,000July 32,489,000 21,002,000 - - - - 16,610,000 70,101,000August 33,946,000 20,958,000 - - - - 18,163,000 73,067,000September 29,777,000 18,663,000 - - - - 17,732,000 66,172,000October 26,498,000 16,852,000 - - - - 16,106,000 59,456,000November 27,023,000 15,970,000 - - - - 15,993,000 58,986,000December 29,372,000 17,462,000 - - - - 17,392,000 64,226,000TOTAL 324,706,000 221,758,000 2,131,000 - - - 193,731,000 742,326,000

2016 WATER FLOW SUMMARYWells




Appendix B


TABLE 48



January 23,603,000 18,991,000 3,040,000 - - 2,341,000 14,667,000 62,642,000February 22,280,000 16,830,000 - - - - 11,355,000 50,465,000March 36,396,000 11,928,000 - - - 1,855,000 12,413,000 62,592,000April 27,377,000 15,307,000 - - - - 14,100,000 56,784,000May 35,587,000 19,373,000 5,000 - - - 17,304,000 72,269,000June 39,087,000 14,766,000 - - - - 16,741,000 70,594,000July 43,613,000 15,831,000 - - - - 19,081,000 78,525,000August 40,982,000 15,823,000 - - - - 17,936,000 74,741,000September 34,554,000 13,801,000 - - - - 15,690,000 64,045,000October 24,144,000 20,207,000 362,000 - - - 15,055,000 59,768,000November 23,278,000 19,527,000 - - - - 14,237,000 57,042,000December 22,991,000 18,424,000 - - - - 13,685,000 55,100,000TOTAL 373,892,000 200,808,000 3,407,000 - - 4,196,000 182,264,000 764,567,000

TABLE 49



January 24,701,000 16,531,000 4,576,000 - - 9,605,000 11,473,000 66,886,000February 21,463,000 14,134,000 3,047,000 - - 7,533,000 11,078,000 57,255,000March 24,844,307 15,753,000 3,222,000 - - 8,947,000 10,270,000 63,036,307April 22,625,000 15,088,000 3,415,000 - - 8,961,000 9,510,000 59,599,000May 28,110,000 16,515,000 5,036,000 - - 13,836,000 10,074,000 73,571,000June 35,672,000 14,587,000 5,842,000 - - 17,153,000 8,897,000 82,151,000July 38,392,000 14,678,000 6,011,000 - - 17,233,000 9,611,000 85,925,000August 38,121,000 14,371,000 - - - 17,644,000 9,570,000 79,706,000September 37,003,000 12,917,000 - - - 16,631,000 9,342,000 75,893,000October 31,780,000 10,489,000 5,040,000 - - 10,791,000 10,740,000 68,840,000November 32,625,000 14,512,000 301,000 - - - 14,297,000 61,735,000December 26,903,000 16,500,000 291,000 - - - 13,172,000 56,866,000TOTAL 362,239,307 176,075,000 36,781,000 - - 128,334,000 128,034,000 831,463,307

Client Source Files (received via email 08/30/2016):2016 Water Flows.xlsWater 13 Flows.xlsWater 14 Flows.xlsWater 15 Flows.xls

Per Client Files:1. Pine Hill isolated from Humboldt Hill2. South Bay Well offline

Wells


2014 WATER FLOW SUMMARY



Appendix B


Section 8. APPENDIX C – WASTEWATER RATESUMMARY TABLES

HUMBOLDT COMMUNITY SERVICE DISTRICT Financial Plan & Reserve SummarySEWER RATE ANALYSISFinancial Plan and Reserve Projections

TABLE 1FINANCIAL PLAN AND SUMMARY OF REVENUE REQUIREMENTS (1)


Sources of Funds (Sewer Revenues)Sewer Service Charge 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$Property Taxes - - - - - - - - - -Fees 59,071 59,071 59,071 59,071 59,071 59,071 59,071 59,071 59,071 59,071Miscellaneous 18,448 18,448 18,448 18,448 18,448 18,448 18,448 18,448 18,448 18,448Non-Operating Revenues 4,715 - - - - - - - - -Interest Earned 10,249 2,208 841 1,839 10,072 15,740 16,962 21,121 25,340 27,322

Total Sources of Funds 3,742,484$ 3,729,728$ 3,728,361$ 3,729,359$ 3,737,592$ 3,743,260$ 3,744,482$ 3,748,641$ 3,752,860$ 3,754,842$Uses of Funds

OPERATING EXPENSES:Personnel Expenses 1,214,263$ 1,262,834$ 1,313,347$ 1,365,881$ 1,420,516$ 1,477,337$ 1,536,431$ 1,597,888$ 1,661,803$ 1,728,275$Sewage Treatment O&M (2) 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000 1,106,000Operating Expenses 570,254 587,453 605,173 623,429 642,238 661,617 681,582 702,152 723,346 745,182

Subtotal: Operating Expenses 2,890,518$ 2,956,287$ 3,024,520$ 3,095,311$ 3,168,755$ 3,244,954$ 3,324,013$ 3,406,040$ 3,491,149$ 3,579,457$OTHER EXPENDITURES:

Existing Debt Service 702,345$ 705,545$ 703,345$ 700,945$ 703,345$ 665,175$ 661,775$ 663,175$ 664,175$ 664,775$Future Debt Service - - - - - - - - - -Rate-Funded Capital Expenses 729,010 1,521,569 1,372,329 722,226 968,070 1,451,546 1,550,368 1,562,936 1,593,901 1,588,305

Subtotal: Other Expenditures 1,431,356$ 2,227,114$ 2,075,674$ 1,423,172$ 1,671,415$ 2,116,721$ 2,212,143$ 2,226,111$ 2,258,076$ 2,253,080$Total Uses of Water Funds 4,321,873$ 5,183,401$ 5,100,195$ 4,518,482$ 4,840,170$ 5,361,675$ 5,536,156$ 5,632,151$ 5,749,225$ 5,832,537$plus: Revenue from Rate Increases (3) - 985,500 1,449,050 1,551,031 1,655,052 1,761,153 1,869,376 1,979,763 2,148,656 2,322,616Contribution to Reserves (579,390)$ (468,000)$ 77,000$ 762,000$ 552,000$ 143,000$ 78,000$ 96,000$ 152,000$ 245,000$

4,229,390$ 5,103,674$ 5,021,834$ 4,439,123$ 4,752,578$ 5,268,415$ 5,441,674$ 5,533,511$ 5,646,366$ 5,727,696$

Total Rate Revenue After Rate Increases 3,650,000$ 4,635,500$ 5,099,050$ 5,201,031$ 5,305,052$ 5,411,153$ 5,519,376$ 5,629,763$ 5,798,656$ 5,972,616$Projected Annual Rate Revenue Increase 0.00% 27.00% 10.00% 2.00% 2.00% 2.00% 2.00% 2.00% 3.00% 3.00%Cumulative Increase from Annual Revenue Increases 0.00% 27.00% 39.70% 42.49% 45.34% 48.25% 51.22% 54.24% 58.87% 63.63%Debt Coverage After Rate Increase 1.21 2.49 3.06 3.12 3.16 3.40 3.46 3.50 3.63 3.76

1. Revenue and expenses for FY 2016/17 were provided by HCSD Staff. Source File: 2016/17 Budget.pdf.2. Sewage Treatment O&M assumes additional increases in charges will be a pass-through rate.3. Assumes new rates are implemented July 1, 2017.

RATE REVENUE REQUIREMENTSSUMMARY (1)

Net Revenue Reqt.(Total Uses less Non-Rate Revenue)

Projected



Appendix C


TABLE 2RESERVE FUND SUMMARY, UN-RESTRICTED RESERVES


Total Beginning Cash (1) 2,256,967$Un-Restricted Reserves:Operating and Capital Replacement ReserveBeginning Reserve Balance (2) 761,828$ 182,438$ -$ 77,000$ 515,900$ 528,100$ 540,800$ 554,000$ 567,700$ 581,900$

Plus: Net Cash Flow (After Rate Increases) (579,390) (468,000) 77,000 762,000 552,000 143,000 78,000 96,000 152,000 245,000Plus: Transfer of Debt Reserve Surplus - - - - - - - - - -Plus: Transfer in from Capital R&R Reserve - 285,562 - - - - - - - -Less: Transfer Out to Debt Reserve - - - - (300,000) (100,000) - - - -Less: Transfer Out to Sinking Fund Reserve - - - - - - - - - -Less: Transfer Out to Capital Replacement Reserve - - - (323,100) (239,800) (30,300) (64,800) (82,300) (137,800) (230,300)

Ending Operating Reserve Balance 182,438$ -$ 77,000$ 515,900$ 528,100$ 540,800$ 554,000$ 567,700$ 581,900$ 596,600$Target Ending Balance (60 days of O&M) 481,800$ 492,700$ 504,100$ 515,900$ 528,100$ 540,800$ 554,000$ 567,700$ 581,900$ 596,600$Capital Rehabilitation & Replacement ReserveBeginning Reserve Balance (3) 1,495,140$ 453,800$ 168,238$ 168,238$ 491,338$ 731,138$ 590,000$ 652,900$ 699,300$ 784,200$

Plus: Grant Proceeds - - - - - - - - - -Plus: Transfer of Operating Reserve Surplus - - - 323,100 239,800 30,300 64,800 82,300 137,800 230,300Less: Use of Reserves for Operating Reserve - (285,562) - - - - - - - -Less: Use of Reserves for Capital Projects (1,041,340) - - - - (171,438) (1,900) (35,900) (52,900) (107,900)

Ending Capital Rehab & Replacement Reserve Balance 453,800$ 168,238$ 168,238$ 491,338$ 731,138$ 590,000$ 652,900$ 699,300$ 784,200$ 906,600$Capital R&R Reserve (3% of Net Assets) 453,800$ 484,500$ 509,900$ 515,600$ 528,300$ 559,700$ 588,100$ 617,000$ 646,400$ 676,300$Sinking Fund ReserveBeginning Reserve Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Plus: Contributions - - - - - - - - - -Less: Use of Reserves for Capital Projects - - - - - - - - - -

Ending Sinking Fund Reserve Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Capital R&R Reserve (3% of Net Assets) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ending Balance - Excl. Restricted Reserves 636,238$ 168,238$ 245,238$ 1,007,238$ 1,259,238$ 1,130,800$ 1,206,900$ 1,267,000$ 1,366,100$ 1,503,200$Min. Target Ending Balance -Excl. Restricted Reserves 935,600$ 977,200$ 1,014,000$ 1,031,500$ 1,056,400$ 1,100,500$ 1,142,100$ 1,184,700$ 1,228,300$ 1,272,900$Ending Surplus/(Deficit) Compared to Reserve Targets (299,362)$ (808,962)$ (768,762)$ (24,262)$ 202,838$ 30,300$ 64,800$ 82,300$ 137,800$ 230,300$

ProjectedSUMMARY OF CASH ACTIVITY



Appendix C


TABLE 3RESERVE FUND SUMMARY, RESTRICTED RESERVES


Restricted Reserves:Connection Fee ReserveBeginning Reserve Balance -$ 60,000$ 60,208$ 60,509$ 60,963$ 61,573$ 62,342$ 63,277$ 64,385$ 65,673$

Plus: Interest Earnings - 208 301 454 610 770 935 1,107 1,288 1,313Plus: Capacity Fee Revenue 60,000 - - - - - - - - -Less: Use of Reserves for Capital Projects - - - - - - - - - -

Ending Connection Fee Fund Balance 60,000$ 60,208$ 60,509$ 60,963$ 61,573$ 62,342$ 63,277$ 64,385$ 65,673$ 66,986$Target Ending Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Bond Project FundBeginning Reserve Balance (4) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Plus: SRF Loan Funding Proceeds - - - - - - - - - -Plus: Revenue Bond Proceeds - - - - - - - - - -Less: Use of Bond & Loan Funds for Capital Projects - - - - - - - - - -

Ending Bond Project Fund Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Target Ending Balance -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Debt ReserveBeginning Reserve Balance (5) 182,360$ 182,992$ 183,627$ 184,546$ 185,930$ 487,789$ 593,886$ 602,795$ 613,344$ 625,610$

Plus: Reserve Funding from Future Debt Obligations - - - - - - - - - -Plus: Reserve Funding from Excess Operating Funds - - - - 300,000 100,000 - - - -Plus: Interest Earnings 633 635 918 1,384 1,859 6,097 8,908 10,549 12,267 12,512Less: Transfer of Surplus to Operating Reserve - - - - - - - - - -

Ending Debt Reserve Balance 182,992$ 183,627$ 184,546$ 185,930$ 487,789$ 593,886$ 602,795$ 613,344$ 625,610$ 638,123$Target Ending Balance 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$Ending Balance - Restricted Reserves 242,992$ 243,836$ 245,055$ 246,893$ 549,362$ 656,229$ 666,072$ 677,728$ 691,283$ 705,109$Min. Target Ending Balance - Restricted Reserves 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$Ending Surplus/(Deficit) Compared to Reserve Targets (422,383)$ (421,539)$ (420,320)$ (418,482)$ (116,013)$ (9,146)$ 697$ 12,353$ 25,908$ 39,734$Annual Interest Earnings Rate (6) 0.35% 0.35% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.00%

1. The beginning Cash balance is equal to the amount allocated to the Sewer System. The District currently maintains one fund for water and sewer operations. Shared cash balances were allocated based on previous years actual revenues, or 51% of revenues. Allocation method used at staff request. Source file: Data Request Item 7 Cash Balances at 6-30-15 - Beginning of 2015-16.xls.2. The beginning Operating Reserve balance is equal to 51% of total cash in Fund 1, Accounts 1011 & 1012, per the City's Trial Balance report as of August 11, 2015. Allocation method used at staff request.3. The beginning Capital Rehab and Replacement balance is equal to 51% of total cash in Fund 1, Accounts 1015, 1029 & all of Account 1033, per the City's Trial Balance report as of August 11, 2015.4. The beginning Bond Project Reserve balance is assumed to be zero.5. The beginning Debt Reserve balance is equal to the amount in Fund 1, Account 1032 and 51% of total cash in Fund 1, Accounts 1030, & 1031, per the City's Trial Balance report as of August 11, 2015.6. Historical interest earning rates were referenced on the California Treasurer's Office website for funds invested in LAIF. Future years earnings were conservatively estimated through 2022 and phase into the historical 10 year average interest earnings rate.

SUMMARY OF CASH ACTIVITY Projected



Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE ANALYSISFinancial Plan Charts

CHART 1

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Annu

al O

blig

atio

ns


Sewer Revenue Requirements vs.Revenue Under Existing and Increased Rates

Reserve Funded Capital ExpensesRate Funded Capital ExpensesDebt ServiceO&M ExpensesRevenues under Existing RatesRevenues under Increased Rates



Appendix C


CHART 2

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Fiscal Year Ending June 30

Ending Cash Balances vs.Recommended Reserve Targets

Wastewater Fund - Un-Restricted Reserves

Ending Cash BalanceRecommended Target Reserve BalanceMinimum Target Reserve Balance



Appendix C


CHART 3

0.0%

27.0%

10.0%

2.0% 2.0% 2.0% 2.0% 2.0%3.0% 3.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

26%

28%

30%

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026


Projected Increases to Rate Revenue



Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICT EXHIBIT 1SEWER RATE ANALYSISOperating Revenue and Expenses

TABLE 4REVENUE FORECAST (1):

DESCRIPTION Basis 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Operating Revenue

Sewer Service Charges 1 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$Sewer Construction Fees 1 15,000$ 15,000$ 15,000$ 15,000$ 15,000$ 15,000$ 15,000$ 15,000$ 15,000$ 15,000$Account Fees 1 43,046$ 43,046$ 43,046$ 43,046$ 43,046$ 43,046$ 43,046$ 43,046$ 43,046$ 43,046$Inspection Fees 1 1,025$ 1,025$ 1,025$ 1,025$ 1,025$ 1,025$ 1,025$ 1,025$ 1,025$ 1,025$Reimbursable Maintenance 1 6,149$ 6,149$ 6,149$ 6,149$ 6,149$ 6,149$ 6,149$ 6,149$ 6,149$ 6,149$Miscellaneous 1 12,299$ 12,299$ 12,299$ 12,299$ 12,299$ 12,299$ 12,299$ 12,299$ 12,299$ 12,299$

Non-Operating RevenueSewer Capital Connection Fees 1 60,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Interest/General 1 10,249$ -$ -$ -$ -$ -$ -$ -$ -$ -$Discounts Earned 1 1,537$ -$ -$ -$ -$ -$ -$ -$ -$ -$Sale of Fixed Assets 1 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Sales of Scrap Metal 1 1,537$ -$ -$ -$ -$ -$ -$ -$ -$ -$Bad Debt Recovery 1 1,640$ -$ -$ -$ -$ -$ -$ -$ -$ -$Property Taxes 1 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TOTAL: REVENUE 3,802,484$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$

TABLE 5REVENUE SUMMARY:

Sewer Service Charge 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$ 3,650,000$Property Taxes -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Fees 59,071$ 59,071$ 59,071$ 59,071$ 59,071$ 59,071$ 59,071$ 59,071$ 59,071$ 59,071$Miscellaneous 18,448$ 18,448$ 18,448$ 18,448$ 18,448$ 18,448$ 18,448$ 18,448$ 18,448$ 18,448$Connection Fees 60,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Non-Operating Revenues 4,715$ -$ -$ -$ -$ -$ -$ -$ -$ -$Interest/General 10,249$ -$ -$ -$ -$ -$ -$ -$ -$ -$

TOTAL: REVENUE 3,802,484$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$ 3,727,520$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$



Appendix C


TABLE 6OPERATING EXPENSE FORECAST (2):

DESCRIPTION Basis 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Personnel Expenses

Wages: Operation 3 556,045$ 578,286$ 601,418$ 625,474$ 650,493$ 676,513$ 703,574$ 731,717$ 760,985$ 791,425$PERS 3 154,156$ 160,322$ 166,735$ 173,404$ 180,340$ 187,554$ 195,056$ 202,858$ 210,972$ 219,411$UI 3 2,291$ 2,382$ 2,477$ 2,577$ 2,680$ 2,787$ 2,898$ 3,014$ 3,135$ 3,260$Group Insurance 3 442,080$ 459,764$ 478,154$ 497,280$ 517,172$ 537,858$ 559,373$ 581,748$ 605,018$ 629,218$Workers Comp 3 13,560$ 14,103$ 14,667$ 15,253$ 15,864$ 16,498$ 17,158$ 17,844$ 18,558$ 19,300$FICA / Medicare 3 46,041$ 47,882$ 49,797$ 51,789$ 53,861$ 56,015$ 58,256$ 60,586$ 63,010$ 65,530$Misc. Benefits 3 92$ 95$ 99$ 103$ 107$ 111$ 116$ 121$ 125$ 130$

Operating ExpensesSewage Treatment: O&M (3) 8 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$ 1,106,000$Water/Sewer Analysis 2 6,872$ 7,078$ 7,290$ 7,509$ 7,734$ 7,966$ 8,205$ 8,451$ 8,705$ 8,966$Supplies/Construction 2 59,555$ 61,342$ 63,182$ 65,077$ 67,030$ 69,040$ 71,112$ 73,245$ 75,442$ 77,706$Supplies / Office-Admin 2 7,330$ 7,550$ 7,776$ 8,010$ 8,250$ 8,497$ 8,752$ 9,015$ 9,285$ 9,564$Supplies Engineering 2 3,436$ 3,539$ 3,645$ 3,754$ 3,867$ 3,983$ 4,103$ 4,226$ 4,352$ 4,483$Supplies/Maintenance 2 45,811$ 47,186$ 48,601$ 50,059$ 51,561$ 53,108$ 54,701$ 56,342$ 58,033$ 59,774$Temp Labor - Maintenance 2 2,749$ 2,831$ 2,916$ 3,004$ 3,094$ 3,186$ 3,282$ 3,381$ 3,482$ 3,586$Temp Labor - Construction 2 9,162$ 9,437$ 9,720$ 10,012$ 10,312$ 10,622$ 10,940$ 11,268$ 11,607$ 11,955$Temp Labor - Customer Service/Finance 2 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Repairs & Maint: Trucks 2 22,906$ 23,593$ 24,301$ 25,030$ 25,781$ 26,554$ 27,351$ 28,171$ 29,016$ 29,887$Building & Grounds Maint 2 9,162$ 9,437$ 9,720$ 10,012$ 10,312$ 10,622$ 10,940$ 11,268$ 11,607$ 11,955$Electrical Power 5 146,597$ 150,995$ 155,524$ 160,190$ 164,996$ 169,946$ 175,044$ 180,295$ 185,704$ 191,275$Street Lights 5 36,649$ 37,749$ 38,881$ 40,048$ 41,249$ 42,486$ 43,761$ 45,074$ 46,426$ 47,819$Telephone 2 5,955$ 6,134$ 6,318$ 6,508$ 6,703$ 6,904$ 7,111$ 7,324$ 7,544$ 7,771$Equipment Rental 2 4,123$ 4,247$ 4,374$ 4,505$ 4,641$ 4,780$ 4,923$ 5,071$ 5,223$ 5,380$Property Lease 2 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Postage 2 16,034$ 16,515$ 17,010$ 17,521$ 18,046$ 18,588$ 19,145$ 19,720$ 20,311$ 20,921$Freight 2 229$ 236$ 243$ 250$ 258$ 266$ 274$ 282$ 290$ 299$Chemicals 6 4,581$ 4,810$ 5,051$ 5,303$ 5,568$ 5,847$ 6,139$ 6,446$ 6,768$ 7,107$Liability Insurance 2 32,984$ 33,974$ 34,993$ 36,043$ 37,124$ 38,238$ 39,385$ 40,566$ 41,783$ 43,037$Legal 2 9,162$ 9,437$ 9,720$ 10,012$ 10,312$ 10,622$ 10,940$ 11,268$ 11,607$ 11,955$Accounting 2 6,414$ 6,606$ 6,804$ 7,008$ 7,219$ 7,435$ 7,658$ 7,888$ 8,125$ 8,368$Engineering 2 9,162$ 9,437$ 9,720$ 10,012$ 10,312$ 10,622$ 10,940$ 11,268$ 11,607$ 11,955$Other Professional Services 2 7,330$ 7,550$ 7,776$ 8,010$ 8,250$ 8,497$ 8,752$ 9,015$ 9,285$ 9,564$Bank Service Charges 2 16,492$ 16,987$ 17,496$ 18,021$ 18,562$ 19,119$ 19,692$ 20,283$ 20,892$ 21,518$Transportation 7 22,906$ 23,593$ 24,301$ 25,030$ 25,781$ 26,554$ 27,351$ 28,171$ 29,016$ 29,887$Office Equip / Maint 2 9,895$ 10,192$ 10,498$ 10,813$ 11,137$ 11,471$ 11,815$ 12,170$ 12,535$ 12,911$Computer Software Maintenance 2 13,743$ 14,156$ 14,580$ 15,018$ 15,468$ 15,932$ 16,410$ 16,903$ 17,410$ 17,932$Memberships & Subscriptions 2 10,582$ 10,900$ 11,227$ 11,564$ 11,911$ 12,268$ 12,636$ 13,015$ 13,406$ 13,808$Bad Debts & Min Bal write-off 2 5,995$ 6,175$ 6,360$ 6,551$ 6,747$ 6,950$ 7,158$ 7,373$ 7,594$ 7,822$Conferences & Continuing Ed 2 6,414$ 6,606$ 6,804$ 7,008$ 7,219$ 7,435$ 7,658$ 7,888$ 8,125$ 8,368$Certifications 2 916$ 944$ 972$ 1,001$ 1,031$ 1,062$ 1,094$ 1,127$ 1,161$ 1,195$State/County & LAFCO Fees & Charges 2 13,743$ 14,156$ 14,580$ 15,018$ 15,468$ 15,932$ 16,410$ 16,903$ 17,410$ 17,932$Elections Expense 2 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Human Resources 2 6,872$ 7,078$ 7,290$ 7,509$ 7,734$ 7,966$ 8,205$ 8,451$ 8,705$ 8,966$Miscellaneous 2 9,162$ 9,437$ 9,720$ 10,012$ 10,312$ 10,622$ 10,940$ 11,268$ 11,607$ 11,955$Directors Fees 2 7,330$ 7,550$ 7,776$ 8,010$ 8,250$ 8,497$ 8,752$ 9,015$ 9,285$ 9,564$

GRAND TOTAL: WASTEWATER EXPENSES 2,890,518$ 2,956,287$ 3,024,520$ 3,095,311$ 3,168,755$ 3,244,954$ 3,324,013$ 3,406,040$ 3,491,149$ 3,579,457$1. Revenues for FY 2016/17 are estimated actual revenues for FY 2015/16; source file: 2016-17 Budget.pdf . The District currently maintains one fund for water and sewer operations. Non-rate revenues were allocated to the sewer utility based on previous years actual revenues; the Sewer System is allocated 51% of non-rate revenues.2. Expenses for FY 2016/17 are per the Districts 2016/17 budget; source file: 2016-17 Budget.pdf . The District currently maintains one fund for water and sewer operations. Personnel and Operating Expenses were allocated to the sewer utility based on previous years actual expenses; the Sewer System is allocated 46% of expenses. Allocation method used at staff request.3. This line item is allocated 100% to the Sewer System. Analysis assumes increases in sewage treatment O&M (paid to the City of Eureka) will be an additional pass-through charge to customers.



Appendix C



COST INFLATION FACTORS Basis 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Customer Growth 1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%General Cost Inflation 2 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Labor Cost Inflation 3 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%Water Purchases 4 0.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%Energy 5 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%Chemicals 6 0.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%Fuel 7 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%No Escalation 8 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%



Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICT EXHIBIT 2SEWER RATE ANALYSISCapital Improvement Plan Expenditures

TABLE 8CAPITAL FUNDING SUMMARY

CAPITAL FUNDING FORECAST BudgetFY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26

Grants -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Use of Connection Fee Reserves - - - - - - - - -SRF Loan Funding - - - - - - - - - -Use of Future Revenue Bond Proceeds - - - - - - - - - -Use of Capital Rehabilitation and Replacement Reserve 1,041,340 - - - - 171,438 1,900 35,900 52,900 107,900Rate Revenue 729,010 1,521,569 1,372,329 722,226 968,070 1,451,546 1,550,368 1,562,936 1,593,901 1,588,305

Total Sources of Capital Funds 1,770,350$ 1,521,569$ 1,372,329$ 722,226$ 968,070$ 1,622,984$ 1,552,268$ 1,598,836$ 1,646,801$ 1,696,205$

Uses of Capital Funds:Total Project Costs 1,770,350$ 1,521,569$ 1,372,329$ 722,226$ 968,070$ 1,622,984$ 1,552,268$ 1,598,836$ 1,646,801$ 1,696,205$Capital Funding Surplus (Deficiency) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

SRF Loan Funding -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Future Revenue Bond Proceeds -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Funding Sources:Projected



Appendix C


CAPITAL IMPROVEMENT PROGRAM

TABLE 9Capital Improvement Program Costs (1, 2):

Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026City of Eureka CIP 1,628,845$ 810,000$ 100,000$ 100,000$ 100,000$ 800,000$ 500,000$ 500,000$ 500,000$ 500,000$

SEWER MAIN EXTENSION AND REPLACEMENTS ($175.00 LF) (3)New Connections 5,000$ 5,000$ 5,000$ 5,000$ 5,000$ -$ -$ -$ -$ -$Walnut Drive Lateral Replacement 25,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Croan/Johnson Force Main (1626 LF)* -$ 170,000$ -$ -$ -$ -$ -$ -$ -$ -$Hartman (~900 LF)’* -$ 157,500$ -$ -$ -$ -$ -$ -$ -$ -$Dr. Office Lane (400 LF) -$ 70,000$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood (200LF) C -$ 50,000$ -$ -$ -$ -$ -$ -$ -$ -$Hemlock* -$ -$ 700,000$ -$ -$ -$ -$ -$ -$ -$Burns Drive (155 LF) -$ -$ 27,125$ -$ -$ -$ -$ -$ -$ -$Mesa Project (~700 LF) C -$ -$ 200,000$ -$ -$ -$ -$ -$ -$ -$End of Summit Ridge to David (265 LF) -$ -$ -$ 46,375$ -$ -$ -$ -$ -$ -$F Street (~900 LF)* -$ -$ -$ 157,500$ -$ -$ -$ -$ -$ -$David Street (676 LF) -$ -$ -$ 118,300$ -$ -$ -$ -$ -$ -$London Drive at Burns (220 LF) -$ -$ -$ 38,500$ -$ -$ -$ -$ -$ -$Spruce Street (~1000 LF_)* -$ -$ -$ -$ 175,000$ -$ -$ -$ -$ -$Alder Street (~600 LF)* -$ -$ -$ -$ 105,000$ -$ -$ -$ -$ -$Hoover Crossing (1000 LF) -$ -$ -$ -$ 175,000$ -$ -$ -$ -$ -$D Street* (21/22) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

SEWER LIFT STATIONSBeechwood SLS rehab 10,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hoover Spare Pump 25,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Broadway transfer switch upgrade -$ 20,000$ -$ -$ -$ -$ -$ -$ -$ -$Sea Ave SLS Upgrade -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Sequoia SLS -$ 50,000$ -$ -$ -$ -$ -$ -$ -$ -$Artino SLS generator -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Fields Landing transfer switch -$ 20,000$ -$ -$ -$ -$ -$ -$ -$ -$Pine hill SLS generator -$ 40,000$ -$ -$ -$ -$ -$ -$ -$ -$Bailey SLS generator -$ -$ 50,000$ -$ -$ -$ -$ -$ -$ -$Pine Hill SLS rehab -$ -$ 125,000$ -$ -$ -$ -$ -$ -$ -$Edgewood new pump -$ -$ 20,000$ -$ -$ -$ -$ -$ -$ -$Blackberry pumps and rehab -$ -$ -$ 50,000$ -$ -$ -$ -$ -$ -$Christine SLS panel -$ -$ -$ 30,000$ -$ -$ -$ -$ -$ -$Allard access vault -$ -$ -$ 8,000$ -$ -$ -$ -$ -$ -$King Salmon Generator -$ -$ -$ 50,000$ -$ -$ -$ -$ -$ -$Roth Ct. SLS Rehab -$ -$ -$ -$ 50,000$ -$ -$ -$ -$ -$SCADA Upgrade -$ -$ -$ -$ 60,000$ -$ -$ -$ -$ -$

Sub-Total: CIP Program Costs 1,693,845$ 1,392,500$ 1,227,125$ 603,675$ 670,000$ 800,000$ 500,000$ 500,000$ 500,000$ 500,000$



Appendix C


TABLE 10Capital Improvement Program Costs (1, 2):

Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026VEHICLES/ROLLING STOCK/EQUIPMENT (4)


ENGINEERING NEEDS (4)Fields Landing Sewer FM Test andDesign 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$Cummins Road Fill Site Design 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Bay Well Const. Mgmt 9,162$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood and Walnut Tank Repairs 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$Water Tank Exterior Painting Specs 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hemlock Diversion Design 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$Lower Shop Drain design 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hartman SLS 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$Total Walnut Yard Grading/Fill Siteand New Storage Bldg pad Design 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$18th and Quaker PSV Water 916$ -$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsDonna Specific (includes fall protec on/ ladder mods/etc) 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Broadway Sewer FM Test -$ 4,581$ -$ -$ -$ -$ -$ -$ -$ -$F Street Design -$ 4,581$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsRidgewood Specific (includes fall protec on/ ladder mods/etc -$ 2,291$ -$ -$ -$ -$ -$ -$ -$ -$Spruce Street Design -$ -$ 4,581$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsWalnut Specific(includes fall protec on/ladder mods/etc) -$ -$ 2,291$ -$ -$ -$ -$ -$ -$ -$Small Truck Garage Rehab -$ -$ -$ 6,872$ -$ -$ -$ -$ -$ -$Alder Design -$ -$ -$ 4,581$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsBrier Specific(includes fall protec on/ladder mods/etc) -$ -$ -$ 2,291$ -$ -$ -$ -$ -$ -$Hoover Sewer Crossing (1000 LF) -$ -$ -$ 2,291$ -$ -$ -$ -$ -$ -$D Street Design -$ -$ -$ -$ 4,581$ -$ -$ -$ -$ -$Future Tank Repairs -$ -$ -$ -$ 2,291$ -$ -$ -$ -$ -$

Martin Slough Additional Funds Required -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Potential Future Expenditures

Unforseen Expenditures -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Placeholder for Future Year Capital Projects (5) -$ -$ -$ -$ -$ 600,000$ 800,000$ 800,000$ 800,000$ 800,000$

Sub-Total: CIP Program Costs 76,505$ 84,751$ 66,427$ 57,264$ 190,118$ 600,000$ 800,000$ 800,000$ 800,000$ 800,000$Grand Total: CIP Program Costs 1,770,350$ 1,477,251$ 1,293,552$ 660,939$ 860,118$ 1,400,000$ 1,300,000$ 1,300,000$ 1,300,000$ 1,300,000$

11/29/16 - What Eureka has for HCSD CIP Obligation: 1,206,960$ 576,516$ 95,337$ 60,669$ 46,866$ 758,722$ 444,187$ 457,513$ 471,238$ 485,376$



Appendix C


TABLE 11Capital Improvement Program Costs (in Future-Year Dollars ):

Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026City of Eureka CIP 1,628,845$ 834,300$ 106,090$ 109,273$ 112,551$ 927,419$ 597,026$ 614,937$ 633,385$ 652,387$

SEWER MAIN EXTENSION AND REPLACEMENTS ($175.00 LF) (3)New Connections 5,000$ 5,150$ 5,305$ 5,464$ 5,628$ -$ -$ -$ -$ -$Walnut Drive Lateral Replacement 25,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Croan/Johnson Force Main (1626 LF)* -$ 175,100$ -$ -$ -$ -$ -$ -$ -$ -$Hartman (~900 LF)’* -$ 162,225$ -$ -$ -$ -$ -$ -$ -$ -$Dr. Office Lane (400 LF) -$ 72,100$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood (200LF) C -$ 51,500$ -$ -$ -$ -$ -$ -$ -$ -$Hemlock* -$ -$ 742,630$ -$ -$ -$ -$ -$ -$ -$Burns Drive (155 LF) -$ -$ 28,777$ -$ -$ -$ -$ -$ -$ -$Mesa Project (~700 LF) C -$ -$ 212,180$ -$ -$ -$ -$ -$ -$ -$End of Summit Ridge to David (265 LF) -$ -$ -$ 50,675$ -$ -$ -$ -$ -$ -$F Street (~900 LF)* -$ -$ -$ 172,105$ -$ -$ -$ -$ -$ -$David Street (676 LF) -$ -$ -$ 129,270$ -$ -$ -$ -$ -$ -$London Drive at Burns (220 LF) -$ -$ -$ 42,070$ -$ -$ -$ -$ -$ -$Spruce Street (~1000 LF_)* -$ -$ -$ -$ 196,964$ -$ -$ -$ -$ -$Alder Street (~600 LF)* -$ -$ -$ -$ 118,178$ -$ -$ -$ -$ -$Hoover Crossing (1000 LF) -$ -$ -$ -$ 196,964$ -$ -$ -$ -$ -$D Street* (21/22) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

SEWER LIFT STATIONS -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Beechwood SLS rehab 10,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hoover Spare Pump 25,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Broadway transfer switch upgrade -$ 20,600$ -$ -$ -$ -$ -$ -$ -$ -$Sea Ave SLS Upgrade -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Sequoia SLS -$ 51,500$ -$ -$ -$ -$ -$ -$ -$ -$Artino SLS generator -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Fields Landing transfer switch -$ 20,600$ -$ -$ -$ -$ -$ -$ -$ -$Pine hill SLS generator -$ 41,200$ -$ -$ -$ -$ -$ -$ -$ -$Bailey SLS generator -$ -$ 53,045$ -$ -$ -$ -$ -$ -$ -$Pine Hill SLS rehab -$ -$ 132,613$ -$ -$ -$ -$ -$ -$ -$Edgewood new pump -$ -$ 21,218$ -$ -$ -$ -$ -$ -$ -$Blackberry pumps and rehab -$ -$ -$ 54,636$ -$ -$ -$ -$ -$ -$Christine SLS panel -$ -$ -$ 32,782$ -$ -$ -$ -$ -$ -$Allard access vault -$ -$ -$ 8,742$ -$ -$ -$ -$ -$ -$King Salmon Generator -$ -$ -$ 54,636$ -$ -$ -$ -$ -$ -$Roth Ct. SLS Rehab -$ -$ -$ -$ 56,275$ -$ -$ -$ -$ -$SCADA Upgrade -$ -$ -$ -$ 67,531$ -$ -$ -$ -$ -$

Sub-Total: CIP Program Costs 1,693,845$ 1,434,275$ 1,301,857$ 659,652$ 754,091$ 927,419$ 597,026$ 614,937$ 633,385$ 652,387$



Appendix C


TABLE 12Capital Improvement Program Costs (in Future-Year Dollars ):

Project Description 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026VEHICLES/ROLLING STOCK/EQUIPMENT (4) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$


ENGINEERING NEEDS (4) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Fields Landing Sewer FM Test andDesign 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$Cummins Road Fill Site Design 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Bay Well Const. Mgmt 9,162$ -$ -$ -$ -$ -$ -$ -$ -$ -$Ridgewood and Walnut Tank Repairs 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$Water Tank Exterior Painting Specs 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hemlock Diversion Design 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$Lower Shop Drain design 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$Hartman SLS 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$Total Walnut Yard Grading/Fill Siteand New Storage Bldg pad Design 4,581$ -$ -$ -$ -$ -$ -$ -$ -$ -$18th and Quaker PSV Water 916$ -$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsDonna Specific (includes fall protec on/ ladder mods/etc) 2,291$ -$ -$ -$ -$ -$ -$ -$ -$ -$South Broadway Sewer FM Test -$ 4,719$ -$ -$ -$ -$ -$ -$ -$ -$F Street Design -$ 4,719$ -$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsRidgewood Specific (includes fall protec on/ ladder mods/etc -$ 2,359$ -$ -$ -$ -$ -$ -$ -$ -$Spruce Street Design -$ -$ 4,860$ -$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsWalnut Specific(includes fall protec on/ladder mods/etc) -$ -$ 2,430$ -$ -$ -$ -$ -$ -$ -$Small Truck Garage Rehab -$ -$ -$ 7,509$ -$ -$ -$ -$ -$ -$Alder Design -$ -$ -$ 5,006$ -$ -$ -$ -$ -$ -$Tank Pain ng SpecsBrier Specific(includes fall protec on/ladder mods/etc) -$ -$ -$ 2,503$ -$ -$ -$ -$ -$ -$Hoover Sewer Crossing (1000 LF) -$ -$ -$ 2,503$ -$ -$ -$ -$ -$ -$D Street Design -$ -$ -$ -$ 5,156$ -$ -$ -$ -$ -$Future Tank Repairs -$ -$ -$ -$ 2,578$ -$ -$ -$ -$ -$

Martin Slough Additional Funds Required -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Potential Future Expenditures

Unforseen Expenditures -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Placeholder for Future Year Capital Projects (5) -$ -$ -$ -$ -$ 695,564$ 955,242$ 983,899$ 1,013,416$ 1,043,819$

Sub-Total: CIP Program Costs 76,505$ 87,294$ 70,472$ 62,574$ 213,979$ 695,564$ 955,242$ 983,899$ 1,013,416$ 1,043,819$Grand Total: Capital Improvement Program Costs (Future-Year Dollars) 1,770,350$ 1,521,569$ 1,372,329$ 722,226$ 968,070$ 1,622,984$ 1,552,268$ 1,598,836$ 1,646,801$ 1,696,205$

1. Capital project costs were provided by HCSD Staff in source file: 2016-17 CIP.pdf.2. Project costs are inflated by 3.0% per year in FY 2017/18 and beyond.3. Future Projects are included at $700,000 per year based on 5-year average annual expenditures.4. The District currently maintains one fund for water and sewer operations. CIP Expenses for Vehicles & Rolling Stock and Engineering Needs were allocated to the sewer utility based on previous years actual expenses; the Sewer System is allocated 46% of expenses.5. For reference purposes, the annual Construction Cost Inflation percentage is the 10 year average change in the Construction Cost Index for 2006-2016 (3.0%). Source: Engineering News Record (http://enr.construction.com).



Appendix C



Economic Variables 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Annual Construction Cost Inflation, Per Engineering News Record (2) 0.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

Cumulative Construction Cost Multiplier from 2017 1.00 1.03 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30



Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICT EXHIBIT 3SEWER RATE ANALYSISDebt Service

28500000

TABLE 14WASTEWATER UTILITY EXISTING DEBT OBLIGATIONS BudgetAnnual Repayment Schedules: (1) FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/262014 Wastewater Revenue Bonds, $8,500,000

Principal Payment 170,000$ 180,000$ 185,000$ 190,000$ 200,000$ 210,000$ 215,000$ 225,000$ 235,000$ 245,000$Interest Payment 314,575$ 307,775$ 300,575$ 293,175$ 285,575$ 277,575$ 269,175$ 260,575$ 251,575$ 242,175$


2012 Refinancing for Martin Slough Project, $2,372,000Principal Payment 89,694$ 93,547$ 97,564$ 101,755$ 106,126$ 110,684$ 115,438$ 120,396$ 125,567$ 130,961$Interest Payment 87,906$ 84,054$ 80,036$ 75,845$ 71,474$ 66,916$ 62,162$ 57,204$ 52,033$ 46,639$


VacCon Installment Sale (4)Principal Payment 38,985$ 38,985$ 38,985$ 38,985$ 38,985$ -$ -$ -$ -$ -$Interest Payment 1,185$ 1,185$ 1,185$ 1,185$ 1,185$ -$ -$ -$ -$ -$

Subtotal: Annual Debt Service 40,170$ 40,170$ 40,170$ 40,170$ 40,170$ -$ -$ -$ -$ -$Coverage Requirement ($-Amnt above annual payment) (5) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$Reserve Requirement (total fund balance) (5) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Grand Total: Existing Annual Debt Service 702,345$ 705,545$ 703,345$ 700,945$ 703,345$ 665,175$ 661,775$ 663,175$ 664,175$ 664,775$Grand Total: Existing Annual Coverage Requirement 798,450$ 798,450$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$Grand Total: Existing Debt Reserve Target 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$1. File provided by HCSD staff: Data Request Item 8 Repayment Schedules.pdf and 2016-17 Budget.pdf (page 3).2. Coverage requirement equal to 120% of the maximum annual payment. Reserve Requirement is identified in the Official Statement, page 7.3. Coverage requirement assumed to be equal to 120% of the maximum annual payment. Reserve Requirement is equal to the maximum annual payment.4. For the purposes of this analysis, NBS calculated principal and interest (annual payment equal to $80,340.92 including 2.95% annual interest). Source file:2016-17 Budget.pdf (page 14) Debt service obligation is split evenly between Water and Sewer utilities.5. Lease payment assumed to not have coverage or reserve requirements.

TABLE 15Existing Annual Debt Obligations to be Satisfied by Sewer Rates:Existing Annual Debt Service 702,345$ 705,545$ 703,345$ 700,945$ 703,345$ 665,175$ 661,775$ 663,175$ 664,175$ 664,775$Existing Annual Coverage Requirement 798,450$ 798,450$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$ 798,240$Existing Debt Reserve Target 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$ 665,375$

Projected


Exhibit 3 (Debt), 16 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICT EXHIBIT 4SEWER RATE ANALYSISCurrent Wastewater Rates

TABLE 16Current Monthly Sewer Rate Schedule:

Residential (3):Single Family Residential (1-3) $4.00 $21.59 $2.96Multi-Family (4 or more) $4.00 $17.27 $2.96Mobile Homes $4.00 $18.78 $2.96Trailer Parks $4.00 $10.79 $2.96For separate laundry facilities $0.00 $10.80 $0.00For additional units without kitchens $0.00 $10.80 $0.00

Non-Residential (4):Commercial - Light Strength (< 370 mg/liter) $4.00 $41.76 $5.70Commercial - Medium Strength (370-500 mg/liter) $4.00 $50.71 $7.56Commercial - Heavy Strength (>500 mg/liter) $4.00 $59.67 $6.65Public Facilities, Schools, Religious & Non-Profit Organizations $4.00 $41.76 $5.70Fairgrounds $4.00 $41.76 $1.43Commercial Power Plants $4.00 $339.62 $0.00RV Dump Station $4.00 $43.18 $0.00

1. One Unit is equal to one HCF (Hundred Cubic Feet) or 748 gallons.2. Rate is charged based on the average winter water use of the previous calendar year (December - March) for each account.3. Water Flow Rate applies to each unit (hcf) billed to Residential customers.4. Water Flow Rate applies to each unit (hcf) in excess of 2 hcf billed to Non-Residential customers.

Data Source: 2016-17 Budget.pdf (FY 2016/17 Master Fees list).

Water Flow RatePer Unit (1, 2)

Base Charges(Per Living Unit (LU))Customer Class

Account Charges(Per Customer

Account)


Exhibit 4 (Current Rates), 17 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE STUDYCost of Service Analysis

TABLE 17Classification of Expenses

FY 2017/18 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA)Operating ExpensesPersonnel Expenses

Wages: Operation 578,286$ 404,800$ 57,829$ 57,829$ 57,829$ 70% 10% 10% 10%PERS 160,322$ 112,225$ 16,032$ 16,032$ 16,032$ 70% 10% 10% 10%UI 2,382$ 1,668$ 238$ 238$ 238$ 70% 10% 10% 10%Group Insurance 459,764$ 321,835$ 45,976$ 45,976$ 45,976$ 70% 10% 10% 10%Workers Comp 14,103$ 9,872$ 1,410$ 1,410$ 1,410$ 70% 10% 10% 10%FICA / Medicare 47,882$ 33,517$ 4,788$ 4,788$ 4,788$ 70% 10% 10% 10%Misc. Benefits 95$ 67$ 10$ 10$ 10$ 70% 10% 10% 10%

Operating ExpensesWater Purchase HBMWD (3) -$ -$ -$ -$ -$ 55% 20% 20% 5%Water Purchase Eureka (3) -$ -$ -$ -$ -$ 55% 20% 20% 5%Sewage Treatment: O&M (3) 1,106,000$ 774,200$ 165,900$ 165,900$ -$ 70% 15% 15% 0%Water/Sewer Analysis 7,078$ 3,893$ 1,416$ 1,416$ 354$ 55% 20% 20% 5%Supplies/Construction 61,342$ 12,268$ 3,067$ 3,067$ 42,939$ 20% 5% 5% 70%Supplies / Office-Admin 7,550$ 1,510$ 1,510$ 1,510$ 3,020$ 20% 20% 20% 40%Supplies Engineering 3,539$ 1,769$ 708$ 708$ 354$ 50% 20% 20% 10%Supplies/Maintenance 47,186$ 23,593$ 9,437$ 9,437$ 4,719$ 50% 20% 20% 10%Temp Labor - Maintenance 2,831$ 1,557$ 566$ 566$ 142$ 55% 20% 20% 5%Temp Labor - Construction 9,437$ 5,190$ 1,887$ 1,887$ 472$ 55% 20% 20% 5%Temp Labor - Customer Service/Finance -$ -$ -$ -$ -$ 20% 20% 20% 40%Repairs & Maint: Trucks 23,593$ 12,976$ 4,719$ 4,719$ 1,180$ 55% 20% 20% 5%Building & Grounds Maint 9,437$ 4,719$ 1,887$ 1,887$ 944$ 50% 20% 20% 10%Electrical Power 150,995$ 150,995$ -$ -$ -$ 100% 0% 0% 0%Street Lights 37,749$ -$ -$ -$ 37,749$ 0% 0% 0% 100%Telephone 6,134$ 1,227$ 307$ 307$ 4,294$ 20% 5% 5% 70%Equipment Rental 4,247$ 2,336$ 849$ 849$ 212$ 55% 20% 20% 5%Property Lease -$ -$ -$ -$ -$ 55% 20% 20% 5%Postage 16,515$ -$ -$ -$ 16,515$ 0% 0% 0% 100%Freight 236$ 130$ 47$ 47$ 12$ 55% 20% 20% 5%Chemicals 4,810$ 2,405$ 1,203$ 1,203$ -$ 50% 25% 25% 0%Liability Insurance 33,974$ 18,686$ 1,699$ 1,699$ 11,891$ 55% 5% 5% 35%Legal 9,437$ 1,887$ 1,887$ 1,887$ 3,775$ 20% 20% 20% 40%Accounting 6,606$ 1,321$ 1,321$ 1,321$ 2,642$ 20% 20% 20% 40%Engineering 9,437$ 5,190$ 1,887$ 1,887$ 472$ 55% 20% 20% 5%Other Professional Services 7,550$ 3,775$ 1,132$ 1,132$ 1,510$ 50% 15% 15% 20%Bank Service Charges 16,987$ -$ -$ -$ 16,987$ 0% 0% 0% 100%Transportation 23,593$ 12,976$ 4,719$ 4,719$ 1,180$ 55% 20% 20% 5%Office Equip / Maint 10,192$ 2,038$ 2,038$ 2,038$ 4,077$ 20% 20% 20% 40%Computer Software Maintenance 14,156$ 2,831$ 2,831$ 2,831$ 5,662$ 20% 20% 20% 40%Memberships & Subscriptions 10,900$ 2,180$ 2,180$ 2,180$ 4,360$ 20% 20% 20% 40%Bad Debts & Min Bal write-off 6,175$ -$ -$ -$ 6,175$ 0% 0% 0% 100%Conferences & Continuing Ed 6,606$ 3,303$ 991$ 991$ 1,321$ 50% 15% 15% 20%Certifications 944$ 472$ 142$ 142$ 189$ 50% 15% 15% 20%State/County & LAFCO Fees & Charges 14,156$ 7,078$ 2,123$ 2,123$ 2,831$ 50% 15% 15% 20%Elections Expense -$ -$ -$ -$ -$ 20% 20% 20% 40%Human Resources 7,078$ 3,539$ 1,062$ 1,062$ 1,416$ 50% 15% 15% 20%Miscellaneous 9,437$ 4,719$ 1,416$ 1,416$ 1,887$ 50% 15% 15% 20%Directors Fees 7,550$ -$ -$ -$ 7,550$ 0% 0% 0% 100%GRAND TOTAL: WASTEWATER EXPENSES 2,956,287$ 1,952,747$ 345,215$ 345,215$ 313,111$ 66% 12% 12% 11%

Budget CategoriesTotal RevenueRequirements Flow CustomerStrength Basis of Classification


COSA Funct. & Classification, 18 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE STUDYCost of Service Analysis

TABLE 18Classification of Expenses, continued

FY 2017/18 (VOL) (BOD) (TSS) (CA) (VOL) (BOD) (TSS) (CA)Debt Service Payments

Existing Annual Debt Service 705,545$ 423,327$ 141,109$ 141,109$ -$ 60% 20% 20% 0%Future Annual Debt Service -$ -$ -$ -$ -$ 50% 25% 25% 0%

Total Debt Service Payments 705,545$ 423,327$ 141,109$ 141,109$ -$ 60% 20% 20% 0%Capital ExpendituresRate Funded Capital Expenses 1,521,569$ 760,784$ 380,392$ 380,392$ -$ 50% 25% 25% 0%TOTAL REVENUE REQUIREMENTS 5,183,401$ 3,136,858$ 866,716$ 866,716$ 313,111$ 61% 17% 17% 6%Less: Non-Rate Revenues

Operating RevenueMetered Water Sales -$ -$ -$ -$ -$ 61% 17% 17% 6%Sewer Service Charges -$ -$ -$ -$ -$ 61% 17% 17% 6%Water Construction Fees -$ -$ -$ -$ -$ 61% 17% 17% 6%Sewer Construction Fees (15,000)$ (9,078)$ (2,508)$ (2,508)$ (906)$ 61% 17% 17% 6%Account Fees (43,046)$ (26,051)$ (7,198)$ (7,198)$ (2,600)$ 61% 17% 17% 6%Inspection Fees (1,025)$ (620)$ (171)$ (171)$ (62)$ 61% 17% 17% 6%Reimbursable Maintenance (6,149)$ (3,722)$ (1,028)$ (1,028)$ (371)$ 61% 17% 17% 6%Miscellaneous (12,299)$ (7,443)$ (2,057)$ (2,057)$ (743)$ 61% 17% 17% 6%Non-Operating Revenue -$ -$ -$ -$ -$ 61% 17% 17% 6%Water Capital Connection Fees -$ -$ -$ -$ -$ 61% 17% 17% 6%Sewer Capital Connection Fees -$ -$ -$ -$ -$ 61% 17% 17% 6%Interest/General (2,208)$ (1,336)$ (369)$ (369)$ (133)$ 61% 17% 17% 6%Discounts Earned -$ -$ -$ -$ -$ 61% 17% 17% 6%Sale of Fixed Assets -$ -$ -$ -$ -$ 61% 17% 17% 6%Sales of Scrap Metal -$ -$ -$ -$ -$ 61% 17% 17% 6%Bad Debt Recovery -$ -$ -$ -$ -$ 61% 17% 17% 6%Property Taxes -$ -$ -$ -$ -$ 61% 17% 17% 6%

NET REVENUE REQUIREMENTS 5,103,674$ 3,088,609$ 853,385$ 853,385$ 308,295$Allocation of Revenue Requirements 100.0% 60.5% 16.7% 16.7% 6.0%

Net Revenue Reqt. Check from Financial Plan -$

TABLE 19Classification of Expenses, continuedAdjustments to Classification of ExpensesAdjustment to Current Rate Level: Total (VOL) (BOD) (TSS) (CA)

FY 2017/18 Target Rate Rev. After Rate Increases $4,635,500Projected Rate Revenue at Current Rates $3,650,000FY 2017/18 Projected Rate Increase 27.0%Adjusted Net Revenue Req'ts 4,635,500$ 2,805,283$ 775,101$ 775,101$ 280,014$

Percent of Revenue 60.5% 16.7% 16.7% 6.0%

FlowBudget CategoriesTotal RevenueRequirements Strength Customer Basis of Classification


COSA Funct. & Classification, 19 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE STUDYWastewater Cost of Service Analysis

TABLE 20Development of the VOLUME Allocation Factor (1)

Customer Class Annual VolumeTotal (HCF)

Monthly Winter-Average BasedBillable Volume

(HCF) (2)

Annual Winter-Average BasedBillable Volume

(HCF)

Percent of TotalConsumption

Based UnitEquivalents

Residential 453,312 33,043 396,519 74.5%Multi-Family Residential 54,555 4,166 49,992 7.5%Mobile Home Park 23,004 1,883 22,596 4.0%Commercial - Light Strength 58,779 3,859 46,308 10.9%Commercial - Medium Strength 5,103 421 5,055 1.1%Commercial - High Strength 9,024 777 9,318 2.0%

Grand Total: 603,777 44,149 529,788 100.0%

1. Consumption data is based on the HCSD's 2015 customer data.2. Monthly Billable Volume is equal to the Average Winter Consumption for all customers; for Non-Residential only, monthly consumption is less two (2) units of water.3. Multi-Family Residential Lot/Living Units are equal to 80 percent of a SFR unit; Mobile Home Park Lot/Living Units are equal to 87 percent of a SFR unit.4. For Mobile Home Park and Commercial Customers, EDUs/Lus based on SFR Winter Consumption was calculated per account and summarized by customer class.


COSA Allocation Factors, 20 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE STUDYWastewater Cost of Service Analysis

TABLE 21Development of the STRENGTH Allocation Factor



(mg/l) (1)

Calculated BOD(lbs./yr.)

Calculated TSS(lbs./yr.)

Adjusted TSS(lbs./yr.) Percent of Total

Residential 339,100,042 200 565,619 565,619 532,386 72.0%Multi-Family Residential 40,809,868 200 68,071 68,071 64,071 8.7%Mobile Home Park 17,208,142 200 28,703 28,703 27,017 3.7%Commercial - Light Strength 43,969,631 200 73,341 73,341 69,032 9.3%Commercial - Medium Strength 3,817,299 435 13,849 13,849 13,035 1.8%Commercial - High Strength 6,750,403 630 35,468 35,468 33,384 4.5%

Grand Total: 451,655,385 785,051 785,051 738,926Target, from WWTP Data (2) 738,926 TSS (lbs./yr.)

0.941 TSS Adj. Factor


TABLE 22Development of the CUSTOMER Allocation Factor

Customer Class EDU/LUEquivalent (1)

Number ofAccounts Percent of Total

EDUs/LUs basedon SFR WinterConsumption

(2)

ConsumptionBased

EDU/Living UnitEquivalents

Percent ofConsumption-

Based Total(EDU/LU

Equivalents)Residential 100% 5,811 91.2% 6,006 6,006 74.5%Multi-Family Residential 80% 335 5.3% 757 606 7.5%Mobile Home Park 87% 10 0.2% 374 325 4.0%Commercial - Light Strength 100% 196 3.1% 880 880 10.9%Commercial - Medium Strength 100% 5 0.1% 86 86 1.1%Commercial - High Strength 100% 14 0.2% 160 160 2.0%

Grand Total: -- 6,371 100.0% 8,263 8,063 100.0%

1. Average strength factors for BOD and TSS are derived from the State Water Resources Control Board Revenue Program

Biochemical Oxygen Demand (BOD) Total Suspended Solids (TSS)

1. Multi-Family Residential Lot/Living Units are equal to 80 percent of a SFR unit; Mobile Home Park Lot/Living Units are equal to 87 percent ofa SFR unit.2. For Mobile Home Park and Commercial Customers, EDUs/Lus based on SFR Winter Consumption was calculated per account andsummarized by customer class.


COSA Allocation Factors, 21 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE ANALYSISSewer Cost of Service Analysis

TABLE 23Allocation of FY 2017/18 Revenue Requirements by Customer Class

BOD TSSNet Revenue Requirements (1) 2,805,283$ 775,101$ 775,101$ 280,014$ 4,635,500$ --

60.5% 16.7% 16.7% 6.0% 100.0%Residential 2,089,616$ 558,450$ 558,450$ 255,401$ 3,461,918$ 74.7%Multi-Family Residential 210,701 67,208 67,208 14,724 359,841 7.8%Mobile Home Park 113,207 28,339 28,339 440 170,325 3.7%Commercial - Light Strength 306,171 72,412 72,412 8,614 459,609 9.9%Commercial - Medium Strength 29,921 13,673 13,673 220 57,488 1.2%Commercial - High Strength 55,667 35,018 35,018 615 126,320 2.7%

2,805,283$ 775,101$ 775,101$ 280,014$ 4,635,500$ 100%1. Revenue requirement for each customer class is determined by multiplying the revenue requirement from each cost

classification by the allocation factors for each customer class.

VolumeTreatment Customer

RelatedCustomer Class

Cost Classification Components Cost-of-Service Net

RevenueReqts.

% of COS NetRevenue

Reqts.


COSA - Sewer Rates, 22 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE ANALYSISSewer Cost of Service Analysis

TABLE 24Proposed Sewer Rates for FY 2017/18:

Total Fixed -Customer

Fixed(TreatmentStrength)

Volumetric(Flow)

Residential 5,811 6,006 396,519 3,461,918$ 255,401$ 1,154,724$ 2,051,792$ $3.66 $16.35 $5.09Multi-Family Residential 335 606 49,992 359,841 14,724 116,434 228,684 $3.66 $13.08 $5.09Mobile Home Park 10 325 22,596 170,325 440 62,558 107,327 $3.66 $14.23 $5.09Commercial - Light Strength 196 880 46,308 459,609 8,614 169,190 281,804 $3.66 $16.35 $6.09Commercial - Medium Strength 5 86 5,055 57,488 220 16,535 40,733 $3.66 $16.35 $8.06Commercial - High Strength 14 160 9,318 126,320 615 30,762 94,942 $3.66 $16.35 $10.19

Total 6,371 8,063 529,788 4,635,500$ 280,014$ 1,550,203$ 2,805,283$Percent of Revenue from Fixed vs. Volumetric Charges 100% 6% 33% 61%

1. Multi-Family Residential Lot/Living Units are equal to 80 percent of a SFR unit; Mobile Home Park Lot/Living Units are equal to 87 percent of a SFR unit.

TABLE 25 Revenue Check: 4,635,333$ 280,014$ 1,550,203$ 2,805,116$Revenue Check for Proposed Rates

Residential $3,461,918 $255,401 $1,178,613 $2,018,181 $3,452,195 -$9,722 -0.28% 74.5%Multi-Family Residential $359,841 $14,724 $95,074 $254,447 $364,244 $4,403 1.22% 7.9%Mobile Home Park $170,325 $440 $55,552 $115,008 $170,999 $674 0.40% 3.7%Commercial - Light Strength $459,609 $8,614 $172,690 $281,804 $463,109 $3,500 0.76% 10.0%Commercial - Medium Strength $57,488 $220 $16,877 $40,733 $57,830 $342 0.60% 1.2%Commercial - High Strength $126,320 $615 $31,398 $94,942 $126,956 $636 0.50% 2.7%

Total $4,635,500 $280,014 $1,550,203 $2,805,116 $4,635,333 -$167

Over/(Under)CollectedCustomer Class

Fixed MonthlyRevenue Per

Account

Fixed MonthlyRevenue PerLot (Living)

Units

VolumetricRevenue(billablevolume)

ExpectedRevenue byCustomer

Class

COSA RevenueRequirements

VolumetricChargePer hcf

Customer Class No. ofAccounts

AnnualBillable

Volume (hcf)

Monthly FixedCharge Per Lot(Living) Units

(1)

Monthly FixedCharge Per

Account

No. of Lot(Living) Units

(LU) or DUEs bySFR Wtr Avg

Annual Rev. Req't


COSA - Sewer Rates, 23 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE ANALYSISSewer Cost of Service Analysis/Rate Design

TABLE 26Current vs. Proposed Sewer Rates (Monthly )

FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22Projected Increase in Rate Revenue per Financial Plan: 27.00% 10.00% 2.00% 2.00% 2.00%Monthly Fixed Service ChargeCustomer Service Charge Per Account $4.00 $3.66 $4.03 $4.11 $4.19 $4.28Monthly Fixed Service Charge Per Living Unit (LU)Residential:

Single Family Residential (1-3) $21.59 $16.35 $17.99 $18.35 $18.72 $19.09Multi-Family (4 or more) $17.27 $13.08 $14.39 $14.68 $14.97 $15.27Mobile Homes $18.78 $14.23 $15.65 $15.96 $16.28 $16.61Trailer Parks $10.79 $14.23 $15.65 $15.96 $16.28 $16.61

Commercial:Commercial - Light Strength (< 370 mg/liter) $41.76 $16.35 $17.99 $18.35 $18.72 $19.09Commercial - Medium Strength (370-500 mg/liter) $50.71 $16.35 $17.99 $18.35 $18.72 $19.09Commercial - Heavy Strength (>500 mg/liter) $59.67 $16.35 $17.99 $18.35 $18.72 $19.09

Volumetric Charge ($/HCF) (1, 2)Residential (3):

Single Family Residential (1-3) $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Multi-Family (4 or more) $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Mobile Homes $2.96 $5.09 $5.60 $5.71 $5.82 $5.94Trailer Parks $2.96 $5.09 $5.60 $5.71 $5.82 $5.94

Commercial (4):Commercial - Light Strength (< 370 mg/liter) $5.70 $6.09 $6.69 $6.83 $6.96 $7.10Commercial - Medium Strength (370-500 mg/liter) $7.56 $8.06 $8.86 $9.04 $9.22 $9.41Commercial - Heavy Strength (>500 mg/liter) $6.65 $10.19 $11.21 $11.43 $11.66 $11.89

1. One Unit is equal to one HCF (Hundred Cubic Feet) or 748 gallons.2. Rate is charged based on the average winter water use of the previous calendar year (December - March) for each account.3. Water Flow Rate applies to each unit (hcf) billed to Residential customers.4. Water Flow Rate applies to each unit (hcf) in excess of 2 hcf billed to Non-Residential customers.

Sewer Rate Schedule Recommended Monthly Fixed Sewer RatesCurrentRates


COSA Current & Proposed Rates, 24 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE STUDYWastewater Cost of Service Analysis/Rate Design

TABLE 27Annual Bill Comparisons - Current vs. Proposed Rates for 5 Years

FY 2016/17 FY 2017/18 FY 2018/19 FY 2019/20 FY 2020/21 FY 2021/22SFR Bill - Current Rates $484.68 $484.68 $484.68 $484.68 $484.68 $484.68SFR Bill - Proposed Rates $484.68 $545.58 $600.13 $612.14 $624.38 $636.87Difference (in $) Proposed vs. Current Rates $0.00 $60.90 $115.45 $127.46 $139.70 $152.19Difference (in %) Proposed vs. Current Rates 0% 13% 24% 26% 29% 31%Note: Average winter consumption for a residential customer is 5 HCF/month.

TABLE 28Monthly Bill Comparisons - Current vs. Proposed Rates in FY 2017/18

0 3 5 7 9 11 13 15 17 19 21 22SFR Bill - Current Rates $25.59 $34.47 $40.39 $46.31 $52.23 $58.15 $64.07 $69.99 $75.91 $81.83 $87.75 $90.71SFR Bill - Proposed Rates $20.02 $35.29 $45.46 $55.64 $65.82 $76.00 $86.18 $96.36 $106.54 $116.72 $126.90 $131.99Difference (in $) Proposed vs. Current Rates -$5.57 $0.82 $5.07 $9.33 $13.59 $17.85 $22.11 $26.37 $30.63 $34.89 $39.15 $41.28Difference (in %) Proposed vs. Current Rates -22% 2% 13% 20% 26% 31% 35% 38% 40% 43% 45% 46%Note: Average winter consumption for a residential customer is 5 HCF/month.


13 15 17 19 21 25 33 37 41 45 49 50Commercial Low Bill - Current Rates $119.86 $131.26 $142.66 $154.06 $165.46 $188.26 $233.86 $256.66 $279.46 $302.26 $325.06 $330.76Commercial Low Bill - Proposed Rates $99.13 $111.30 $123.47 $135.64 $147.81 $172.15 $220.84 $245.18 $269.52 $293.86 $318.20 $324.29Difference (in $) Commercial Low Bill vs. Current Rates -$20.73 -$19.96 -$19.19 -$18.42 -$17.65 -$16.11 -$13.02 -$11.48 -$9.94 -$8.40 -$6.86 -$6.47Difference (in %) Commercial Low Bill vs. Current Rates -17% -15% -13% -12% -11% -9% -6% -4% -4% -3% -2% -2%Note: Average winter consumption for a low-strength customer is 17 HCF/month, medium-strength average is 75 HCF/month, and high-strength average is 39 HCF/month.

Annual Sewer Bill Comparison

Monthly Sewer Bill ComparisonCommercial

Residential

Residential Monthly Sewer Bill Comparison Monthly Sewer Bill Comparison

Monthly Sewer Bill Comparison


COSA Bill Comps, 25 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICE DISTRICTSEWER RATE STUDYWastewater Cost of Service Analysis/Rate Design


55 65 75 85 95 105 115 125 135 145 155 165Commercial Medium Bill - Current Rates $470.51 $546.11 $621.71 $697.31 $772.91 $848.51 $924.11 $999.71 $1,075.31 $1,150.91 $1,226.51 $1,302.11Commercial Medium Bill - Proposed Rates $463.21 $543.79 $624.37 $704.95 $785.53 $866.11 $946.69 $1,027.27 $1,107.85 $1,188.43 $1,269.01 $1,349.59Difference (in $) Commercial Medium Bill vs. Current Rates -$7.30 -$2.32 $2.66 $7.64 $12.62 $17.60 $22.58 $27.56 $32.54 $37.52 $42.50 $47.48Difference (in %) Commercial Medium Bill vs. Current Rates -2% 0% 0% 1% 2% 2% 2% 3% 3% 3% 3% 4%Note: Average winter consumption for a low-strength customer is 17 HCF/month, medium-strength average is 75 HCF/month, and high-strength average is 39 HCF/month.


25 30 35 40 45 50 55 60 65 70 75 80Commercial Heavy Bill - Current Rates $229.92 $263.17 $296.42 $329.67 $362.92 $396.17 $429.42 $462.67 $495.92 $529.17 $562.42 $595.67Commercial Heavy Bill - Proposed Rates $274.74 $325.69 $376.64 $427.58 $478.53 $529.47 $580.42 $631.36 $682.31 $733.26 $784.20 $835.15Difference (in $) Commercial Heavy Bill vs. Current Rates $44.82 $62.52 $80.22 $97.91 $115.61 $133.30 $151.00 $168.69 $186.39 $204.09 $221.78 $239.48Difference (in %) Commercial Heavy Bill vs. Current Rates 19% 24% 27% 30% 32% 34% 35% 36% 38% 39% 39% 40%Note: Average winter consumption for a low-strength customer is 17 HCF/month, medium-strength average is 75 HCF/month, and high-strength average is 39 HCF/month.

Commercial Monthly Sewer Bill Comparison

Commercial Monthly Sewer Bill Comparison




COSA Bill Comps, 26 of 31

Appendix C

NBS - Prepared for Humboldt Community Services DistrictWeb: www.nbsgov.com Toll-Free: 800.676.7516 SFR Bill Comp MONTHLY, Page 27 of 31

$25.59

$34.47

$40.39

$46.31

$52.23

$58.15

$20.02

$35.29

$45.46

$55.64

$65.82

$76.00

$0

$10

$20

$30

$40

$50

$60

$70

$80

0 3 5 7 9 11

Mon

thly

Bill

Consumption (hcf)

Residential Monthly Sewer Bill ComparisonCurrent vs. Proposed Rates (FY 2017/18)

SFR Bill - Current Rates

SFR Bill - Proposed Rates

WinterAverage

Appendix C

NBS - Prepared for Humboldt Community Services DistrictWeb: www.nbsgov.com Toll-Free: 800.676.7516 COMM Light Bill Comp MONTHLY, Page 28 of 31

$119.86

$131.26

$142.66

$154.06

$165.46

$188.26

$99.13

$111.30

$123.47

$135.64

$147.81

$172.15

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

13 15 17 19 21 25

Mon

thly

Bill

Consumption (hcf)

Commercial Light Strength Sewer Bill ComparisonCurrent vs. Proposed Rates (FY 2017/18)

Commercial Low Bill - Current Rates

Commercial Low Bill - Proposed Rates

WinterAverage

Appendix C

NBS - Prepared for Humboldt Community Services DistrictWeb: www.nbsgov.com Toll-Free: 800.676.7516 COMM Med Bill Comp MONTHLY, Page 29 of 31

$470.51

$546.11

$621.71

$697.31

$772.91

$848.51

$463.21

$543.79

$624.37

$704.95

$785.53

$866.11

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

55 65 75 85 95 105

Mon

thly

Bill

Consumption (hcf)

Commercial Medium Strength Sewer Bill ComparisonCurrent vs. Proposed Rates (FY 2017/18)

Commercial Medium Bill - Current RatesCommercial Medium Bill - Proposed Rates

WinterAverage

Appendix C

HUMBOLDT COMMUNITY SERVICES DISTRICTSEWER RATE STUDYCustomer Data

TABLE 32 TABLE 33

meters* Annual Summer WinterResidential 453,312 5,811 7 9 5 Residential -$ -$ $ 2,671,623 74.8%Multi-Family Residential 54,555 335 14 19 11 Multi-Family Residential -$ -$ $ 372,711 10.4%Mobile Home Park 23,004 10 192 238 158 Mobile Home Park -$ -$ $ 161,151 4.5%Commercial - Light Strength 58,779 196 25 36 17 Commercial - Light Strength -$ -$ $ 277,718 7.8%Commercial - Medium Strength 5,103 5 85 106 75 Commercial - Medium Strength -$ -$ $ 37,939 1.1%Commercial - High Strength 9,024 14 54 89 39 Commercial - High Strength -$ -$ $ 48,283 1.4%Irrigation/Landscaping 3,444 2 144 360 13 Irrigation/Landscaping -$ -$ $ 1,098 0.0%Total 607,221 6,373 Total -$ -$ $ 3,570,524 100.0%

Fixed vs. Variable % 0% 0%1. Rate Revenue For October 2015 - September 2016 is from HCSD's billing data.

Commercial Light Strength includes Schools & Churches.

Meter Counts are as of September 2016. 72 additional accounts with unknown meter sizes were added to themost common meter size (5/8"): 69 Residential, 2 MFR, and 1 Commercial.

Water Consumption Data used for Humboldt Community Services District Rates: FY 2015/16 Approximate Rate Revenue (1)

Summary of Consumption by ClassConsumption

(hcf/year) Revenue by

Customer Class Fixed

Charges VariableCharges TOTAL


FY15-16 Data, 30 of 31

Appendix C

HUMBOLDT COMMUNITY SERVICES DISTRICTSEWER RATE STUDYCustomer Data

HUMBOLDT COMMUNITY SERVICES DISTRICT 2015 SEWER FLOW SUMMARY

HOOVER includes F. Landing

DATE METER#1 METER#2 F.LANDING SO. BRDWY HEMLOCK VISTA F. STREET ALLARD Leslie

Lane Monthly C O E Monthly Total

Monthly

ReadsFrom

HoneywellMeter

HoneywellMeter

Total Meter#1 & #2

HoneywellMeter

HoneywellMeter

HoneywellMeter

HoneywellMeter

HoneywellMeter

HoneywellMeter Flo-Dar Totals "H" ST By-

PassMinusCOE Rainfall

2015 1/1/2015 2,513,400 7,552,500 10,065,900 1,449,200 9,587,100 2,037,000 8,456,300 928,000 4,965,700 452,317 36,492,317 N/A N/A 1.362/1/2015 4,033,200 10,160,800 14,194,000 2,308,600 12,079,400 2,602,400 11,528,300 1,166,700 6,430,900 454,438 48,456,138 N/A N/A 5.043/1/2015 2,438,800 7,966,800 10,405,600 1,606,300 9,572,900 2,083,500 8,782,500 696,800 4,285,100 457,417 36,283,817 N/A N/A 3.214/1/2015 2,454,400 7,996,500 10,450,900 1,728,100 9,754,900 2,283,000 9,850,800 642,200 4,659,800 456,703 38,098,303 N/A N/A 2.575/1/2015 1,824,400 6,803,600 8,628,000 879,500 7,270,100 1,679,300 8,062,500 497,000 3,448,200 464,371 30,049,471 N/A N/A 0.076/1/2015 1,559,900 6,617,800 8,177,700 685,200 6,549,600 1,604,900 5,126,200 435,100 2,980,500 410,224 25,284,224 N/A N/A 0.047/1/2015 1,652,100 6,621,600 8,273,700 694,100 6,223,500 1,635,600 0 400,400 2,554,900 373,481 19,461,581 N/A N/A 0.158/1/2015 3,205,100 5,582,100 8,787,200 850,700 7,003,300 1,696,100 0 460,900 2,892,900 370,930 21,211,330 N/A N/A 0.419/1/2015 2,287,100 6,280,900 8,568,000 756,500 6,472,200 1,592,700 0 444,500 2,834,100 405,147 20,316,647 N/A N/A 0.27

10/1/2015 2,004,300 6,496,500 8,500,800 777,000 6,324,400 1,643,100 0 457,600 2,678,700 406,195 20,010,795 N/A N/A 1.1811/1/2015 2,410,100 7,369,500 9,779,600 1,508,900 8,900,100 1,751,800 0 581,800 3,394,600 471,683 24,879,583 N/A N/A 4.8812/1/2015 10,881,500 15,167,200 26,048,700 4,492,000 19,316,900 4,466,000 0 1,807,800 8,901,600 633,500 61,174,500 N/A N/A 14.66

2016 1/1/2016 9,734,400 12,576,800 22,311,200 3,740,300 15,936,400 4,155,600 0 1,823,900 9,197,400 754,847 54,179,347 N/A N/A 12.062/1/2016 6,794,500 10,683,800 17,478,300 2,335,600 13,535,000 3,743,700 0 1,217,300 7,450,000 508,329 43,932,629 N/A N/A 2.983/1/2016 11,920,100 12,232,300 24,152,400 2,818,800 14,910,300 4,450,400 0 1,289,600 9,038,000 686,414 54,527,114 N/A N/A 8.114/1/2016 3,002,800 8,415,200 11,418,000 1,477,100 9,375,600 2,346,200 0 639,200 4,484,200 431,890 28,695,090 N/A N/A 2.845/1/2016 2,118,900 6,945,300 9,064,200 897,900 7,346,200 1,716,100 0 517,900 3,456,600 436,701 22,537,701 N/A N/A 0.766/1/2016 2,408,500 6,432,900 8,841,400 810,000 7,003,100 1,749,700 0 472,600 3,181,700 390,773 21,639,273 N/A N/A 0.027/1/2016 2,388,700 6,295,300 8,684,000 738,800 6,428,000 1,756,200 0 493,200 2,919,400 309,883 20,590,683 N/A N/A 0.548/1/2016 2,259,300 6,179,100 8,438,400 910,200 6,191,600 1,657,800 0 452,600 2,663,000 384,204 19,787,604 N/A N/A 0.049/1/2016 2,121,800 5,764,400 7,886,200 686,300 6,226,300 1,681,700 0 478,700 2,913,400 432,261 19,618,561 N/A N/A

10/1/201611/1/201612/1/2016

FY 2015/16 Gallons 58,419,400 104,804,100 163,223,500 21,158,900 122,347,000 30,947,000 0 10,113,500 60,064,700 5,869,890 392,565,590HCF 78,096 140,103 218,199 28,285 163,555 41,370 0 13,520 80,295 7,847 524,785MG 58.4194 104.8041 163.2235 21.1589 122.347 30.947 0 10.1135 60.0647 5.86989 392.56559

Last 12 Months Gallons 58,044,900 104,558,300 162,603,200 21,192,900 121,493,900 31,118,300 0 10,232,200 60,278,600 5,846,680 391,572,880HCF 77,595 139,774 217,369 28,331 162,414 41,599 0 13,678 80,581 7,816 523,458MG 58.0449 104.5583 162.6032 21.1929 121.4939 31.1183 0 10.2322 60.2786 5.84668 391.57288


Sewer Flow Data, 31 of 31

Appendix C

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