ÇITVOF FARMERSVILLE  Farmersville City Council Regular Meeting  Tina Hernandez, Mayor Danny Valdovinos, Mayor Pro Tem Gregorio Gomez, Council Member Paul Boyer, Council Member Armando Hinojosa, Council Member  Monday, February 12, 2024 6:00 PM Meeting held in Civic Center Council Chambers 909 W. Visalia Road Farmersville, California  Pending no technical difficulties, the City Council meeting will also be streamed  (for observation only) via Zoom and accessed as follows:  Please dial 1-669-900-6833 Meeting ID: 89650089380 Password: 459727  1. Call to Order: 2. Roll Call: 3. Invocation: 4. Pledge of Allegiance: 5. Public Comment:  Provides an opportunity for members oft the public to address the City Council on items ofi interest to the public within the Council's jurisdiction and which are not already on the agenda this evening. Iti is the policy of the Council not to answer questions impromptu. Concerns or complaints will be referred to the City Manager's office. Speakers should limit their comments to not more than two (2) minutes. No more than twenty (20) total minutes will be allowed for Public Comment. For items which are on the agenda this evening, members of the public will be provided an opportunity to address the council as eachi item is brought upi for discussion. Comments are to be addressed to the Council as a body and not to any  individual Council Member. Presentations:  6.  A. Business License Analysis & Ordinance Review - HdL Companies B. Water & Sewer Utility Rate Study - Willdan Financial Services  7. Consent Agenda:  Under a CONSENT AGENDA category, a recommended course of action for each item is made. Any Council Member or Member oft the Public may remove any item from the CONSENT AGENDA in order to discuss and/or change the recommended course of action, and the Council can approve the remainder of  the CONSENT AGENDA.    A. Authorization to waive full reading of ordinances and resolutions and  to identify by title only.  Recommend that the City Council approve the full reading of all ordinances and resolutions be waived and to identify by title only. B. Minutes of Regular City Council Meeting of. January 22, 2024  Recommend approval of minutes.  Documents: Draft Action Minutes of. January 22, 2024 Notice of Completion of the Farmersville ADA Improvement Project Recommend that the City Council accept the Farmersville ADA Improvements Project, and the City Council authorize the City Manager sign the Notice of Completion and the City Clerk file the Notice of  C.  Completion with the County Clerk's office. Documents: Notice of Completion  8. General Business  A. Cooperative Agreement between the City of Farmersville and the County of Tulare for Avenue 280 Widening Project - Segment 2 Recommend that the City Council authorize the City Manager to sign the  Cooperative Agreement.  Documents: Cooperative Agreement  B. 4Creeks Proposal for Construction Management Services and Inspection Services for the Fire Station 83 Project  Recommend that the City Council authorize the City Manager to contract with 4Creeks for Construction Management Services and Inspection Services for the Fire Station 83 Project for an estimated Time and  Materials amount of $160,770.  Documents: 4Creeks Proposal  9.  Council Reports  A. City Council Updates and Committee Reports  10. Staff Communications: 11. Future Agenda Items  1. Amend Ordinance - Temporary Outdoor Use Permits    2. Review of Cannabis Cultivation 3. Site Visits to Woodlake, Exeter, and Lindsay 4. Water Restrictions 5. Update City Ordinances related to Code Enforcement 6. Reopening Two-way Traffic on E. Citrus at Freedom Drive 7. Transit Services with Visalia Transit and TCRTA  12. Adjourn to Closed Session:  A. CONFERENCE WITH LABOR NEGOTIATORS Pursuant to Government Code Section 54957.6 Agency designated representative:  Jennifer Gomez, Steve Huntley, Teqia Velyines, and Michael  Schulte Employee organization:  Miscellaneous Employees Police Officers Association Department Heads  International Brotherhood of Teamsters Local 517 Mid-Management Employee Association  B. PUBLIC EMPLOYMENT Title: City Attorney  Pursuant to Government Code Section 54957  13. Reconvene to Open Session: 14. Closed Session Report (ifany):  15. Adjournment: NOTICE TO PUBLIC  The City of Farmersville Civic Center and City Council Chambers comply with the provisions oft the Americans with Disabilities Act (ADA). Anyone needing special assistance please contact City Hall at (559) 747-0458 please allow at least six (6) hours prior to the meeting sO that staff may make Materials related to an item on this agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the City's offices during normal business hours.  arrangements to accommodate you.  Drafted by: J. Gomez  Strong Roots..-Growing Possibilities    CITY OF  FARMERSVILLE,  SHED 1868 INCORTGRN  Business License Analysis & Ordinance Review  Version 4 January 3, 2024  Hdl Companies  SUBMITTED BY HdLCompanies 120S.State College Blvd., Ste 200 Brea, CA92821 hdcompanies.com:  CONTACT EricMyers T1424228857Bx+1022 Eenychalcomanesconm    Table Of Contents  TABLE OF CONTENTS EXECUTIVE SUMMARY  2 3 4 4 4 5 6 7 10 11 11 12 12 15 16 19 19  SECTION1-C CITY OF FARMERSVILLE & COMPARATIVE, JURISDICTIONS  BUSINESSTAX-/ ANALYSIS BUSINESSTAX- EQUITYO OF CONTRIBUTION  CITYOFI FARMERSVILLE: UNESTAX-EUSNESTNE SUMMARY CITY OF FARMERSVILLE: OWPABONTONBGHBOANG CITIES COMPARISON CITIES SUMMARYTABLE/USINGFY18-19D DATA) RATE COMPARISON- CITYOF FARMERSVILLE VS. NEIGHBORS  SECTION 2- CATEGORY & TAX ANALYSIS  TAXI MODEL REVENUE. ANDI EQUITY COMPARISON MODEL1:EXISTING CATEGORIES WITH! SIMPLE INCREASES MODELS 2AND: 3: GROSS RECEIPTS TAX MODEL: 3: GROSS RECEPTISTAX-CLASIFCATION-BASEDRATES PROPOSED RATES COMPARISONS  APPENDIXA  LICENSE CLASSIFICATION, ANDI RATET TYPES  21Page  Hdl Companies    Executive Summary  Background  The City of Farmersville (City) requires all businesses operating within the City to obtaina al business license andp pay! business license taxes. (City's Municipal Code (Code) section 5.04.050). This revenue is locally controlled and funds essential services. The City commissioned the HdL Companies ("HdL" or "we," "us," "our," or similar terms) to prepare this taxs study to review the administrative efficiency of the current structures, to review options fori improving thee equity of the business license taxs structure, if any, and to investigate the possibilities for additional revenue, generation. The models and recommendations int this study should be evaluated not only on whether theyi increase revenue but, ideally, also on whether they move the City's business license structure up and to the right in the four quadrants presented below  in Chart1.  Chart 1: Key attributes of modern business tax structures  Tax Structure Simplification  $3  Complex Tax Implementation  Recommendation  The City's current structure isa at tiered gross receipts structure. Gross receipts-based: structures typically produce well when compared to other structures, however the cityl has al lower revenue compared to other similar jurisdictions." Thel likely cause of this underperformance is the inherent cap for larger businesses anda an overall lower effective tax rate. Ift the City were to consider updating its tax structure, we recommend that the City consider adopting a gross receipt tax structure likel Model 3.7 That model! keeps thet tax structure simple to administer and couldi increase revenue for thei future. It would also eliminate  the current structures cap. Report Structure  Wel have divided this report into two major sections and one appendix.  Section 1- Pages: 41 to 11 Section 2- Pages: 12-19  In thei first section, we review the City's current revenue and tax: structures to describe the City's current situation. Int this section, we review three alternative tax structures. Model 1 is a simple percentage increase applied to the existing taxs structure. Model 2 explores a single flat gross receipts rate. Model 3 explores the impact of increase rates by category. Appendix A outlines the categories of businesses that model 3 uses and gives basic statistics for those categories.  Appendix A  Companion Code Review  We will also provide inas separate document a code review.  31F P:36  Hdl Companies    SECTION 1 - City of Farmersville & Comparative Jurisdictions  Business Tax - Analysis  The City currently has approximately 734 businesses that are paying a business license tax. Businesses in Farmersville contribute around $45,000 to $60,000 in business license revenue yearly. In recent years Farmersville has seen increased  revenues with the addition of the cannabis businesses int the city.  Business Tax - Equity of Contribution  The City currently uses primarily gross receipts to calculate thet tax on businesses, although the city does have a per unit tax  onrentals and an additional tax on Cannabis provided through Measure Q.  Table 1: Current Tax Structures  Business CategoryIype General Business Rental Contractors Cannabis TOTALS  Total Count 273 347 111 3 734  PrimaryTaxType Tiered Gross Receipts Per Unit Tiered Gross Receipts Council Resolution  As you can see in chart 4a, the City's current gross-receipts tax rates result in a large spread of effective tax rates across business sizes. This appears to be ther result of having a capped gross receipts tax. This has caused the largest businesses to  pays significantly less proportionally than the smaller businesses ini the community.  Chart 2a: Examples of Current Tax Rate as Percent of Estimated Gross Receipts  EL Large Business Medium! Business "Small Business  0.036%  Business  0.097%  0.218% 0.25%  0.00%  0.05%  0.10%  0.15%  0.20%  4Pa  Hdl Companies    Chart 2b: Count of Current Business by Size and Category Distribution of Business by Size within Category  350 300 250 200 150 100 50 0  Contractor  General/Retail  Services Small Medium Large  Professionals Rental Properties  City of Farmersville: Business Tax - Business Type Summary As you can: see below, the City'seconomy, at least as reflected in its business taxi revenue, isp primarily basedi in contractors,  rental, Cannabis, and Service General.  Pie Chart1:  Total Share of Taxl Revenue Generated by! Business' Type  CONTRACTOR- ( GENERAL F RENTAL UNIT CANNABIS SERVICE-GENERAL RESTAURANT WITH ALCOHOL SALES - RETAIL SALES- - GENERAL GASOLINE & SERVICE STATIONS AUTOMOTIVE-S SERVICE& REPAIR AUTOMOTIVE-SALES BEAUTY- PARLORS& SALONS All Other  1  28%  15%  16%  249  51 wage  Hdl Companies    City of Farmersville: Comparison to Neighboring Cities  Below you can see the comparison) jurisdictions that the City and HdL chose as al baseline. They were chosen because they were: (1)i in similar geographic regions, (2) were like the City in median income, and (3) were relatively similar inp population density. With the exception of Visalia who isi included because of the extreme geographic proximity and has aj particularly As you can see below, the Cityi is at the lower end of household income and on the higher end of population density.  strong influence on the choice businesses make of where to establish themselves.  Chart5  Household Income (Vertical) with Population Density (Horizontal)  $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0  Kingsburg e Visalia e Tulare e  Sanger e Exeter e Reedley Dinuba o Selma e Farmersville  Woodlake e  0.00 500.00 1,000.00 1,500.00 2,000.00 2,500.00 3,000.00 3,500.00 4,000.00 4,500.00 5,000.00  The table below highlights population, the estimated number of licensed businesses, and estimated annual revenue for quick comparison. Below thet table are some key graphics showing how the City compares to other jurisdictions. For purposes of comparison, we use the fiscal year 18-19 data that was reported to the State by each jurisdiction. We do so because that datai is pre-COVID: ands so avoids the' 'noise' in the data caused byt thei impact oft the pandemic ont the City andt the comparison  jurisdictions.  Continued on next page.  61P2ge  Hdle Companies    Comparison Cities Summary Table (Using FY 18-19 data)  Table 2: Comparison Data Est. Median Income $69,252 $62,050 $50,186 $47,644 $73,349 $59,650 $55,498 $41,532 $55,519 $48,262  Est Miles Population 37.94 20.39 6.51 5.81 3.72 5.77 5.51 2.61 2.46 2.2  Jurisdiction Name Square Visalia Tulare Dinuba Selma Kingsburg Sanger Reedley Woodlake Exeter Farmersville  Est, 142,978 70,733 25,139 24,625 12,662 26,716 25,232 7,577 10,324 10,382  Household Est. Businesses in Tax-Schedules Est. Revenue in FY  FY78-79* 8,525 2,591 755 1,026 821 932 1,064 254 828 734  (general) Gross Receipts Gross Receipts Gross Receipts Gross Receipts Gross Receipts Tiered Gross Receipts Flat Tax Gross Receipts Flat Tax Gross Receipts  18-19 $2,658,360.00 $638,141.00 $237,357.00 $217,452.00 $184,623.00 $130,647.00 $118,031.00 $68,195.00 $56,806.00 $45,450.00  As you can see from the above table, the City's FY19 business tax revenues place it at the bottom amongst this comparison group. Iti is interesting to note the comparison between the City and Woodlake. Woodlake has 30% less businesses than the City but has 50%1 more revenue. However, the city seems to be doing well at generating revenue compared to cities like Exeter whol have 2x the number of businesses but significantly less than 2x1 the revenue. Below are additional charts that show how the City ranks among the comparison cities. Visalia isi included in this comparison set not because it is similar to the City in: size or population but! because of how close itis geographically and there is potential for business slippage into Visalia with changes inj policy. Chart 81 below shows that the City's current average per business rate is about halft that of Visalia. This large difference could serve as al buffer fora anyi increasesi int the business license tax. Int the years since FY191 the city! has seen large increases int total revenue mostly because oft thel large taxes assessed against the  cannabis businesses.  Continued ont ther next page  71Page  Hdl Companies    Chart 6: Est. Count of Businesses Est. Count of Businesses FY18/19 by. Jurisdiction  Visalia Tulare Reedley Selma Sanger 932 Exeter 828 Kingsburg 821 Dinuba 755 Farmersville 734 Woodlake 254  8,525  2,591 1,064 1,026  0  4,000 8,000 12,000 16,000 20,000 24,000  Chart7:Business' Tax Per Capita Comparison Est. FY 18/19 Business Tax Revenue  Per Capita  Visalia Kingsburg Dinuba Tulare Woodlake Selma Exeter Sanger Reedley Farmersville  $19  $15  $9 $9 $9 $9  $6 $5 $5 $4 $5  $0  $10  $15  $20  8IPage  Hdle Companies    Chart 8: Business Taxi per Business Comparison Est. FY 18/19 Business Tax Revenue  Per Business  Dinuba Visalia Woodlake Tulare Kingsburg Selma Sanger Reedley Exeter Farmersville  $314.47 $311.82  $268.58 $246.26 $224.91 $211.92  $140.15 $110.90 $68.62 $61.92  $- $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00  Continued on the next page.  912598  Hdl Companies    00 :5  0 00 - 25 -  00  6 o 8 - -    SECTION 2 - Category & Tax Analysis  The City requested that HdL conduct an analysis of the current license structures and explore options for modifying the rates and categories. In Section 1, we: summarized the current structure of the City's business tax and compared the City to neighboring. jurisdictions to give ani idea of how the various tax: structures and markets in nearby municipalities are creating Int this section, we provide options for modifying the City's business taxi rates and classifications. Using the data compiledi in section 1 of this report on current license revenues, we developed models to estimate potential fiscal impacts to the City from the different models. You cant find summary charts on pages 17-19 that provide ac quick look at each proposed model's  different revenue outcomes.  impact ont the City revenues and thel business community.  Tax Model Revenue and Equity Comparison  The three models below illustrate different frameworks the City can adopt tol better meet the needs of the city and possibly achieve greater equity in the taxation of the business community. Model one isa a straight increase in the current rates and structure of the tax code. It adds some additional revenuel but does nothing to address anyi inequities inherenti int the current structure of the taxation. Model two helps in three areas, it provides equality in the taxation of the whole business community, increases revenue, and simplifies the tax structure making it the easiest to administer and calculate. Model 3's focus is on maximizing equity by structuring the rates for business industries or categories in a way that considers other revenue contributions to the city likes sales tax and property tax. Model 3 allows businesses who contribute in other waysa tax! breaki int the Business License portion of their total city taxation. For example, a business who contributes tos sales tax or propertyt tax may have al lower business license tax. Belowi is an illustration comparing each model's effect on revenue and equity. Total equity as represented below is al heuristic estimate of the potential additional equity tol be expected with the  proposed models.  Chart 9: Model Revenue to Equity Comparison Model Revenue to Equity Comparison  3a 2a  1 C Total Tax Code Equity  C- Current Tax Structure  (Continued on Next Page)  11Page  Hdl Companies    Model 1: Existing Categories with Simple Increases  The City may elect to retain the existing structure while modifying thei tax: amounts fore each category. Keeping the current structure inj place would eliminate the need to create different categories and allow for ar muchs simpler implementation for  the City and thel business community.  Table 5: Estimated revenue from as simple percentage increase  Number of Businesses 734*  Current Revenue  20% Increase  40% Increase  $121,849.00 $146,218.80 $170,588.60  *Business counts andt total revenues usedi int the models represent businesses which area active, have payment history, and havea abusiness type assigned. Theset totals arer meantt tos show thee effects ofp policy changei int thec citya andg givev valuablei insight  tot the activityi int thec city.  Model 1 - Highlights and Impact Review  As indicated int the model above, a: simple increase could keep the existing structures in place while yielding higher revenues to the City. A: 20%-40% increase across all sectors of industry is easy toi implement but it does nothing to address equity or  ease of administration.  Models 2 and 3: Gross Receipts Tax  We now turn to consider two models that are additional variations on the theme ofag gross-receipts-based tax. Many California cities use some form of gross receipts tax structure. Many of those cities use a standard rate multiplier to determine thet tax: amount owed, or by setting the rate fore each! business category. Fore example, a city may choose to charge $1 per thousand dollars of gross receipts (0.001 x Gross) for a retail business while charging a rate of $3.00 per thousand The benefits of gross receipts-based taxes are the potential equity of their effective tax rate, ease of calculation, and potential for capturing revenue from growth in the economy. The drawback is that it exposes City revenues to the  dollars of gross receipts (0.003x Gross) for service or professional businesses.  fluctuations of gross receipts in the economy.  Gross Receipts Tax - Estimates  Since we dor not have complete information on gross receipts fort the City'scurrent! businesses, we used multiple assumptions int the options below, which are meant to provide an estimate oft thep possible impactands should not be relied uponf for precise budgeting. The followingi information was used as al basis for thet tax tables andi models in the options below. Gross receipts were determined by first calculating it from payment history and assigned rate. Secondly, if that was not viable such as in the non-gross receipts-based business categories we used rent estimates or sales tax to calculate the estimated gross  receipts.  Table 6: Key estimates used int the gross-receipts models  Total Business Taxable Gross Receipts(Est.) $120.7 Million  Number of Businesses 734  12IPage  Hdl Companies    Model 2: Gross Receipts Tax - Single Gross Receipts Rate Model 2r reflects the potential revenues for converting the Cityt taxt toas single-rate, gross-receiptsmode. Thisn modeli is simple to administer-as everyone is charged the same rate-but it allows the City to increase revenue. Model 2 also creates an annual base rate ofa a uniform $25, to provide some tax relief for very small businesses within the business community.  Table 7: Model 2-Potential Tax Structure  Tax Basis Flat Rate Gross Receipts Tax  TaxR Rate  $25 Flat Rate (up to $25,000 Gross Receipts) +$ $1.25 pert thousand dollars of Gross Receipts (0.00125; x Gross Receipts)  Model 2 Estimates Table  The table below indicates the potential revenues from implementing a gross receipts tax with two options, $1.25 per thousand. and $1.50 pert thousand. Information for the estimates comes from the datai int the: section above. Please note that this model and model three do not include the actual gross receipts. These models use estimated gross receipts based on the business classification which may overestimate or underestimate the actual gross receipts in the city. We believe however, it gives an accurate representation of the potential impact of the proposed tax structures. While these numbers  should not be used for precise budgeting there are usefuli insights contained within the estimates.  Table 8: Model 2 - Rough Estimates from as simple gross receipts structure  Number of Accts Taxable Gross  Current Revenues $121,849.00  Tax Amount $1.25/thousand $148,076.53  Tax Amount $1.50/thousand: $174,021.84  Receipts $119.5Million  734  "Thesee estimates arel heavily dependent ont thee estimated taxableg gross receipts! being closet tot thea actual gross receiptsi int thec city.  Model 2- Highlights and Impact Review  The "single rate" method of taxing on gross receipts provides an even distribution of the effective tax rate because all businesses subject to the tax will pay the same rate. Under this method, no cap is put in place, and therefore most of the revenues are received from the highest-grossing businesses. In the case of $1.50 per thousand in gross receipts approximately: 24% of total revenue is generated by the 181 businesses int thel large category. Model 2 expands revenue while keeping thet tax: structure: simple ande easy to understandi forb businesses, while askingl larger businesses top payaproportionally equivalent share. It does, however, significantly raise the tax rate for some businesses and would likely face significant opposition from the business community. Int the case of the smallest businesses the base minimum of $25 upt to $25,000in gross receipts places the effective tax rate slightly below equal. This is however a small sum of money and the economic  impact would be minimal.  13Page  Hdl Companies    Chart 10: Estimated Effective Tax Rates Under A Simple Gross Receipt Model  Current VS. Proposed Effective Tax Rates  Current Tax Structure $1.25, per $1,000 $1.50p per $1,000 0.217%  Small Business  0.114% 0.122%  0.071%  Medium Business  0.124%  0.147%  0.036%  Large Business  0.125%  0.149% 0.15% 0.20%  0.00%  0.05%  0.10%  0.25%  Continued ont the next page  14IPage  Hdl Companies    Model 3: Gross Receipts Tax - Cassification-Based Rates  Model 3, as indicated below, would create different rates for different business classifications. For example, the City might choose to implement a rate for the retail/wholesale/iscellaneous business activities at a base rate of 0.001, recognizing the higher costs of goods solda andI lower profit margins for these types of business as well as their contribution to other City revenues sucha as sales tax. At the same time, the City could consider implementing al higher rate for professionals due tot the nature of their business model. This model affords ther most flexibility for increasing revenues while accommodating certain We have tailored Model 31 to provide a revenue increase and to focus on shifting more of the tax to property rentals and  business categories. professional services.  Tax Structure and Estimated Revenue  The structure providedi ini thet table below isj just one example of how the City might utilize a gross receipt model toi improve the equity of rates andi increase revenue. Should the City decide to use a gross receipts model like model 3,H HdL will work with City staff to finalize a structure that best serves the City's goals. Categories are defined and summary statistics are available in Appendix B below. It is important to remember that like model 21 these models use estimated gross receipts based on the business classification which may overestimate or underestimate the actual gross receipts in the city. We believe however, it gives an accurate representation of the potential impact of the proposed tax structure. While these numbers should not be used for precise budgeting there are useful insights contained in the industry averages for the  business classifications.  Table 9: Basic tax structure for classification-based. gross receipts  Categories CONTRACTOR GENERAL COMMERCE/RETAL RENTAL (COMMERCIAL & RESIDENTIAL)  Minimum Rate $25 (GRI less than $25,000)  Taxl Rate BA 0.002 X Gross 0.001 X Gross 0.002 X Gross 0.002 X Gross 0.003 X Gross  TaxRate3B 0.0025 X Gross 0.0015 XG Gross 0.0025 X Gross 0.0025 XC Gross 0.0035. X Gross Est.Annual Gross ReceiptsTax Model3B $29,562.50 $38,215.49 $41,945.14 $133,357.10 $13,927.50 $257,007.73  SERVICE PROFESSIONAL  Table 10: Estimated revenue from classification-Dased gross receipts  Est/ Annual Gross Model3A $24,200.00 $25,860.33 $35,291.11 $107,795.68 $11,970.00 $205,117.12  Number Est.Taxable Gross  Business Type Contractors General Business Rental Service Professional  of Accts 110 46 347 222 9 734  Receipts* $13,030,000.00 $25,780,328.30 $21,733,056.00 $56,072,840.00 $4,140,000.00  CurrentTaxes Receipts Tax $35,650.00 $27,587.00 $29,428.00 $26,761.00 $2,423.00  $120,756,224.30 $121,849.00  "Thesee estimates are! heavily dependent ont thee estimated taxable gross receipts! being closet tot thea actual gross receiptsi int the city.  Model 3 -H Highlights and Impact Review  This option has the benefit of spreading thel burden of ani increase across multiple business types. This model retains some administrative efficiency by! having as simple structure of 5 categories. and wouldi increase revenue. and, as the City will seei in  the charts that follow, there would be greater equity ini the effective taxi rates.  15IPage  Hdl Companies    Proposed Rates Comparisons  Table 11: Comparing Gross-Receipt Models By Hypothetical Business Type  Model2 Gross $1.50/ Receipts Thousand  Model3 3A Gross  City's Current Receipt Rates $109.00 $71.18  Tulare's Exeter's Rates $75.00  Visalia's Woodlake's Rates  Sample Business Beauty Parlor: 1 employee /<$55,789 Restaurant:: 3 Employees/5150,000 Employees/5716.163 Residential Rental: 8 Dental Office: 20 Employees /$ $1,100,000 Small Contractor: 1 (outside) Contracting Firm: 3 (outside) Estimated Totals  Current Current Current Current  Rates $80.00  Rates  $55.79  $69.00 $110.00  $234.00 $212.50 $150.00 $232.50 $80.00 $300.32 $350.00  General Retail Store: 10 $254.00 $1,061.74 $716.16 $387.50 $80.00 $499.21 $575.00 Employees/5628,800 $304.00 $930.70 $1,232.60 $212.50 $80.00 $628.80 $550.00 Employees/5850,000 $254.00 $1,262.50 $2,500.00 $870.00 $80.00 $1,062.50 $800.00 Professional Firm: 15 $215.00 $1,637.50 $3,250.00 $984.00 $80.00 $445.83 $375.00  Employee /$75,000 $462.00 $100.00 $125.00 $92.00  $80.00 $198.00 $125.00  Employees. / $225,000 $795.00 $325.00 $425.00 $150.00 $80.00 $198.00 $150.00  $2,627.00 $5,601.13 $8,454.55 $3,003.50 $640.00 $3,401.67 $3,035.00  161Pa3e  Hdl Companies    Chart 11: Average Revenue Yield Per Model By Business Category  $1,400.00  Current Model2/6125/51000) a Model3A  $1,200.00  $1,000.00  $800.00  $600.00  $400.00  $200.00  $-  CONTRACTORS  GENERAL COMMERCE/RETAL  PROFESSIONAL RENTAL (COMMERCIALE  SERVICE  RESIDENTIAL)  171Page  Hdl Companies    Chart 12: Equity of Models  Current VS. Proposed Effective Tax Rates  Current Tax Structure  Model 21 Tax Rate Structure ($1.50/1000) Model: 3A Tax Rate Structure  0.218%  Small Business  0.124%  0.138%  0.097%  Medium Business  0.147%  0.180%  0.036%  Large Business  0.149%  0.164% 0.20%  0.00%  0.05%  0.10%  0.15%  0.25%  Hdle Companies  18Page    Appendix A  License Classification and Rate Types  Inl Model 3, we usei fivel basiccategories of businesses. These are five basic structures that are common: across municipalities. The definitions below are general and not meant to be the complete definitions that would appear inar municipal code. Contractors: These are persons or firms that are carrying on the business of a contractor, subcontractor, or builder particularly the construction or repair of any buildings. Examples include but are not limited to construction, plumbing, General Commerce/Retail: These are retailers, wholesalers, hoteliers, restaurateurs, andi manufacturers. All these businesses are likelyt to contribute to your tax base in other ways (i.e., property tax and sales tax) and often have lower profit margins. Rental (Commercial & Residential): This categoryi includes any business that leases, rents, or provides use of real property to another individual or entity for compensation. Examples include but are not limited to commerciall leasing, residential rental, parcel leasing, etc. This would also be a category where the City could include language and rates for taxing short-term Service: Thisi is the offering of services that require minimal to no higher education training. This is also the default category for any business that is not specifically defined in one of the other five categories. Examples include but are not limited to Professional: These businesses offer services that require a rigorous amount of training through any type of higher education, or vocational institutions that exclusively certifies, complete obtainment of skills and the ability to offer such professional: services. Examplesi include but are not limited to a doctors' office, al law office, a consulting firm, etc. Please note that in the table below we have excluded the non-profit businesses along with the "revenue" attributable to  HVAC, etc.  rentals.  hair stylists, gardeners, nail salons, etc.  their fees to give a clearer picture oft the tax revenue producing businesses int the City.  Approximate grouping of City's Businesses by the proposed categories  Business Category Type CONTRACTOR GENERAL COMMERCE/RETAIL RENTAL (COMMERCIAL & RESIDENTIAL)  Total Count 110 46 222 347 9 734  Total Current Taxes $35,650.00 $27,587.00 $26,761.00 $29,428.00 $2,423.00 121,849.00  SERVICE PROFESSIONAL TOTALS  HdI Companies  191Page    I  - -  - 0 C U S E  D  C S C C  a  3    3 6  S  S -  R  8  E  0  e - a  ULL C    I  6     E  e  -  B    Z  a  I  a 6  - L  7 A la  E    I  Z  6  3  a  3 6  S B    :  B  I  %  A 2  5    5 -  8  S  s  - S - e -  -    U 5  - E a  - - N 3  0 -    Z a   X > a -  C  & 8     :   B  & $ N 5  -  t  le :  -    - >  à L a    L -    A  B - R  S -  -  6  6  -  -  -  3 C A  - L    €  S  >  8  -  $  0 - $A  >    o 5 . & 4  8  -  &  o à    0 Z - S  $  2 8  n -  5    €  -  5    - - a  9 I 8 I 1 8 $ a f 8  <  > &  5 I di  E 5 &   :    8  x x x 8  d @    0  e e    7  2  9  00  3  3    I  3  6 & - a    E  > - - W  -  8  - a    I  -    City of Farmersville, CA  Report  Comprehensive Water & Sewer  Utility Rate Study  CITYOF  FARMERSVILLE  FARMERSVILLE CITY HALL  WILLDAN    Cityof FARMERSVILLE FARMERSVILLE EALORNIN  TABLE OF CONTENTS TABLE OF CONTENTS Section 1- Executive Summary.. 1.1 Infroduction.  1.2 Overview of the Rate Study Process. 1.3 Summary of Proposed Rates. Section 2. - Revenue Sufficiency Analysis. 2.1 Financial Planning Principles. 2.2 Existing Rates.. 2.3 Revenue Sufficiency Process. 2.3.1 Budget.. 2.3.3 Debt Service.  2.3.2 Capital Improvement Plan (CIP) 2.3.4 Gross and Net Revenue Requirement 2.4 Customers & Billable Flows.. 2.4.1 Customer Billing Analysis.. 2.5 Financial Projections Under Existing Rates. Section 3- Cost-of-Service (COS) Analysis. 3.1 General. 3.2 Water Cost-of-Service. 3.2.1 Peaking Factors.  10 11 12 12 13 .16 16 16 16 18 19 20 22 25 26 26 27  3.2.2 Functional Unbundling of Revenue Requirements. 3.2.3 Classification of Water System Costs. 3.2.5 Rate Design by Unit Cost. 3.2.6 COS and Revenue Check.. 3.3 Sewer Cost-of-Service.  3.2.4 Allocation to Customer Classes and Unit Cost Development.  3.3.1 Functional Unbundling of Revenue Requirements. 3.3.2 Classification of Revenue Requirements.  WWILLDAN  Water & Sewer Rate Study- - Draft Report  February 7,2024    Cityof FARMERSVILLE FARMERSVILLE EALFBERIA  3.3.3 Allocation to Customer Classes and Unit Cost Development.  28 30 31 31 34 36 38 38 38 41 42 .46 46 46 46 47 48  3.3.4 COS and Revenue Check.. Section 4- ProposedTest Year Rates. 4.2 Typical Monthly Bill Comparison. 4.3 Rate Comparison with Other Utilities Section 5- Projected Operating Results 5.2 Projected User Rate Revenues 5.3 Debt Service Coverage  4.1 General.  5.1 General.  5.4 Summary of Projected Operating Results Section 6-C Conclusions and Recommendations  6.1 Disclaimers.  6.1.1 General Disclaimer 6.1.2 Municipal Advisory Disclaimer. 6.2 Conclusions. 6.3 Recommendations:  WWILLDAN FINANCIAL  Water & Sewer Rate Study- Draft Report  February7,2024    Cityof FARMERSVILLE EATORTY  Section 1 = Executive Summary  1.1 Introduction  Willdan Financial: Services (Willdan) is pleasedi to submit tot the City of Farmersville (the "City") the Water and Sewer Rate Study report (the "Report") for your consideration. Willdan has completed the study of the City's water and sewer rates and summarized the results of the The City owns and operates water wells, storage tanks, and transmission and distribution facilities, and also provides sewer treatment and collection services to residential and nonresidential customers within its incorporated limits. The City has focused a significant amount of attention and effort on strategic planning measures in all areas of utility operations to ensure that it is able to provide uninterrupted service to its customers, and sO that it remains prepared for the future. As part of its ongoing strategic planning efforts, the Cllycommisioned Willdan to perform a water and sewer rate study to analyze the revenue sources and expenditures of the utility system and provide recommendations for proposed rate and/or rate structure adjustments to meet the financial and administrative goals and  investigations, analyses, and conclusions in this Report.  objectives of the City. The primary objectives of the rate study include:  Full recovery of costs related to utility operations (i.e., operating and maintenance  costs, debt, and other expenditure requirements);  Cost-based rate: structures; Federation ("WEF") guidelines; Equity among customer classes;  Consistency with American Water Works ("AWWA") and Water Environment  Meeting substantive and procedural Proposition 218requirements; Administrative efficiency (i.e., easy to understand andi implement); and  5-Year capital funding plan.  1.2 Overview of the Rate Study Process  This study develops water and sewer financial plans for a 5-year planning period and includes the development of cost-based rates through a cost-of-service and rate design analysis. Utility rates must be set at a level such that operating, maintenance, debt, and capital expenses are funded with the revenues received from customers. In addition, the revenues generated from utility rates must only be used for this purpose and for each system separately. This is a significant point, as failure to achieve the needed revenues can lead to unacceptable service levels and inadequately maintained facilities. Therefore, a rate study  typically consists of following three interrelated analyses:  1/Page    Cityof FARMERSVILLE CALEORNZS  Financial anning/Revenue Requirement Analysis: Creates a five-year plan to support an orderly, efficient program of on-going maintenance and operating costs, capital improvement and replacement activities, debt financing, and retirement of outstanding debt. In addition, the plan should fund and maintain appropriate reserve balances based on industry standards, as well as the City's fiscal I. Cost-of-Service Analysis: Identifies and apportions annual revenue requirements (i.e., expenditures) to operational and functional cost components based on the demand placed on the utility system. The purpose of this analysis is to develop rates that generate revenues relatively proportionate to the share of each utility's costs. This objective is consistent with industry standards as well as the II. Rate Design: Develops an equitable and proportionate fixed/variable schedule of rates for the City's customer base. The policy objectives are coordinated with Proposition 218 (Prop 218) requirements and cost-of-service objectives to achieve a balance between customer equity and financial stability goals. The balance of fixed and variable charges considers the need for a stable revenue source (the fixed charge) and the variable component of the rate structure such that customers placing higher costs on the system (through higher water and sewer use) incur a  policies and: specific needs.  requirements of Proposition 218.  higher bill reflective of their impact on the system.  Revenue Requirement Analysis  Compares the revenues to the expenses of the utility to determine the overall rate adjustment required.  Cost of Service Analysis components based on cost of service.  Allocates the revenue. requirements to the fixed/variable cost  Rate Design Analysis  Considers both the level and structure of the rate design to collect the appropiate and targeted level of revenues.  This rate study utilizes generally accepted rate-making principles and standards established byi industry experts such as the AWWA inits"M1 - Principles of Water Rates Fees and Charges" manual and WEF in its "Financing and Charges for Sewer Systems, Manual of Practice No. 27".T The principles established by these entities are used as guidelines in the development tof the proposed rates for water and sewer. A discussion of some of the key principles of  ratemaking is presented in the following subsection of this Report.  2Page    Cityof ARMERSVILLE FARMERSVILLE EALIEOENA  1.3 Summary of Proposed Rates  Ther rate study methodology appliedi in the development of updated water and sewerrates, outlined in this Report, consstedofrevewing the historical operatingresults of the water and sewer utility systems, historical customer billing and consumption data, analyzing the budget toi identify the net revenue requirements to be recovered from user rate revenues, performing general cost-of-service allocations based on the rate components and functional cost categories, and revising the rates based on the applicable costs and expenditures to be recovered from user rates. In addition, an analysis of the system customers and usage characteristics was performed toi identify the rate determinants since they drive the recommended rates, which are the primary sources for generating revenues. The allocated revenue requirements were utilized in conjunction with the rate determinants The findings and conclusions of the rate analysis, as well as the resulting revised rate recommendations, were utilized to develop a projection of future operating results for a 5- year planning period from Fiscal Year (FY) 2024 (beginning July 1, 2023) through FY 2028 (ending June 30, 2028), herein referred to as the "Projection Period". The purpose for developing the 5-year projectionsi is to demonstrate the financial capability of the water and sewer revenues to support system operations and fund planned capital improvements. The analyses, findings and accompanying recommendations are presented in the subsequent The water and sewer rate analyses described in the Report are performed based on the general guidelines of the defined objectives, as well as common industry standards for setting utility rates. In addition to focusing on these major objectives, the rate analyses performed herein will consider other factors in designing rates. As will be discussed in detail lateri in the Report, such other rate considerations generally include sensitivity to the impact on existing customers, the relative comparability with neighboring utilities and the City's existing rate structure. The proposed water and sewer rates for assumed implementation effective May 1, 2024 (or other such date as determined by the City) for FY: 2023/24 (FY2024, hereinreferred to as the "Test Year") arep provided ini Tables 1 and 2, respectively. The existing  and rate structure to develop proposed rates for water and sewer.  sections of the Report.  rates are provided in Tables 3 and 4, respectively.  3IPage    Cityof FARMERSVILLE FARMERSVILLE CDEGEA  Table 1-F Proposed Monthly Water Rates  Description  Rate 24.38 $ 24.38 $ 40.63 $ 81.26 $ 130.01 $ 243.77 $ 406.28 $ 812.55 $ 1,300.08 $ 1,868.87 $ 0.3230 $ 0.6945 $ 0.4875  Monthly Base Charge by Meter Size:  Single-Family Residential (3/4 Inch and 1 Inch) $  3/4 Inch 1.0 Inch 1.5 Inch 2.0 Inch 3.0 Inch 4.0 Inch 6.0 Inch 8.0 Inch 10.0 Inch  Volumetric Rates Per 100 Cubic Feet. Residential:  0-1,500 Cubic Feet Overl 1,500 cubic feet  Volumetric Rates Per 100 Cubic Feet All Other:  All Flow  4]Page    Cityof FARMERSVILLE FALORE  ARMER  Table 2-1 Proposed Monthly Sewer Rates  Description  Rate  Monthly Base Charge: Residenfial I Single-Family Residential Multple-Dwelling Unit Non-Residenlidl  $ $ $ $  56.76 49.75 31.91 31.91 31.91 31.91 31.91 31.91  Service Stations, Garages, Churches, Social, Fraternal, Non-Profit, Other Retai/Service Restaurants, Cafes, Drive-Ins, Grocery Stores, Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ with Cooking Facilities (per unit) Hotels (per unit), Motels (perunit), Rooming Units (per unit), Camps (per unit), Auto Courts $ without Cooking Facilities (per unit) Professional Offices or Other Business Volumetric Rates Per 100 Cubic Feet: Single-Family Residential Muliple-Dwelling Unit Non-Residentid  Public Schools  $ $  Residential  $ $ $ $  0.00 0.00 3.33 3.33 3.33 3.33 1.91 3.33  Service Stations, Garages, Churches, Social, Fratemal, Non-Profit, Other Retail/Service Restaurants, Cafes, Drive-Ins, Grocery Stores, Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ without Cooking Facilities (per unit) Protessional Offices or Other Business  Public Schools Notes:  $ $  [) All single-family and multi-family customers pay only a flat monthly fee per dwelling unit regardless of usage.  5]Page    Cityof FARMERSVILLE CADEBRNIA  Section 2 = Revenue Sufficiency Analysis  2.1 Financial Planning Principles  While the individual rates for each of the utility systems vary based on a variety of factors, rates should be consistent with commont rate-making principles within the utility industry. The guiding principle is that rates designed for any utility should provide a reasonable balance  between several key factors. In general, the utility rates should:  Generate a stable revenue stream that, when combined with other sources ofi funds, is-sufficient to meet the expenditure requirements and goals of the system; Be based upon the proportionate cost of providing the service and not exceed the cost of providing the service -i in compliance with California Proposition 218; Be equitable = that is, they should generate revenue from customer classes in a manner which is reasonably in proportion to the cost to provide service to that  customer class;  Bee easy to understand by customers; and Be easy to administer by the utility.  Striking the appropriate balance between the principles of ratemaking is the result of a detailed process of evaluation ofr revenue requirements and cost-of-service, and how those translate into the rate design alternatives which meet legal requirements and the specific  objectives of the utility under the circumstances in which it operates,  2.2 Existing Rates  The City has established user rates for water and sewer service that are applied to retail customers of the system. The rates charged for water and sewer service are approved by the City Council and are not subject to administrative review or approval by any other local ors state agency. The City has historically adjustedi rates, as necessary, toy provide forrecovery off financial obligationsincluding operating expenses, debtservice, copitdlexpenditures and The existing water rates consist of 1) a monthly base rate that designates the minimum amount a customer will pay, which includes 1,500 cubic feet of water, and 2) a volumetric rate per 100cubic feet based upon the amount ofr monthly metered water usage over 1,500 cubic feet. The monthly base rate varies based on meter size. The volumetric rates apply a uniform rate structure for all water usage over 1,500 cubic feet, such that the rate per 100 cubic feet remains the same regardless of the amount of water usage. The existing rates for  any other expenses and transfers.  water service are provided in Table 3.  6IPage    Cityof FARMERSVILLE CALUEDRRIA  Table 3 - Existing Monthly Water Rates  Description  Rote  Monthly Base Charge by Meter Size:  Single-Family Residential (3/4 Inch and 11 Inch), $ 27.32  3/4 Inch 1.0 Inch 1.5 Inch 2.0 Inch 3.0 Inch 4.0 Inch 6.0 Inch 8.0 Inch 10.0 Inch  $ 27.32 $ 27.32 $ 43.71 $ 43.71 $ 68.29 $ 68.29 $ 109.26 $ 109.26 N/A $ 0.0000 $ 0.9300 $ 0.0000 $ 0.9300  Volumetric Rates Per 100 Cubic Feet- Residential:  0-1,500 Cubic Feet Over 1,500 cubic feet 0-1,500 Cubic Feet Over 1,500 cubic feet  Volumetric Rates Per 100 Cubic Feet- All Other:  The existing sewer rates consist of 1)an monthly base rate (flat monthly fee) that applies to all single-family residential and multi-family residential customers by dwelling unit regardless of their usage, 2) a monthly fixed service charge that designates the minimum amount a non- residential customer will pay by account and 3) a non-residential volumetric rate component that recovers the costs of treatment and disposal of wastewater. Residential customers pay only a monthly flat fee, and therefore, do not pay a volumetric rate based oni their respective sewer discharge such as the non-residential customer classes. The existing  rates for sewer service are provided in Table 4.  7]Page    Cityof FARMERSVILLE CALORRIA  Table 4- Existing Monthly Sewer Rates  Descripion  Rate  Monthly Base Charge: Residential I Single-Family Residential Multple-Dwelling Unit Non-Residentidl  $ 56.61 $ 56.61 $ 56.61 13.00 14.53 11.53 13.00 53.03  Service Stations, Garages, Churches, Social, Fraternal, Non-Profit, Other Retai/Service Restaurants, Cafes, Drive-Ins, Grocery Stores, $ Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ without Cooking Facilities (per unit) Professional Offices or Other Business Volumetric Rates Per 100 Cubic Feet: Single-Family Residential Muliple-Dweling Unit Non-Residential  Public Schools  $ $  Residential  $ $ $  0.00 0.00 0.00 1.15 0.00 0.00 1.79 0.00  Service Stations, Garages, Churches, Social, Frateral, Non-Profit, Other Retail/Service Restaurants, Cafes, Drive-Ins, Grocery Stores, $ Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming Units (perunit), Camps (per unit), Auto Courts $ with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ without Cooking Facilities (per unit) Professional Offices or Other Business  Public Schools Notes:  $ $  01 All single-family and multi-family customers pay only a flat monthly fee per dwelling unit regardless of usage.  8Page    Cityof FARMERSVILLE PAPORTN  2.3 Revenue Sufficiency Process  Ine evaluating whether the existing rates will generate sufficient revenue to meet the expenditurer requirements of the water and sewer systems, the annual expendituresiequred (herein referred to as the "Revenue Requirements") must be developed. The Revenue Sufficiency Analysis compares the forecasted revenues of each system under existing rates  (including customer growth) to the projected Revenue Requirements.  2.3.1  Budget  The revenue sufficiency analysis performed as part of this study utilizes the City's budget for FY23/24 (the "Budget" for FY ending June 30, 2024) as one variable to determine the gross Revenue Requirements to be recovered from user rates over the Projection Period. The Budget, as prepared by the City, is provided on a line-item basis, and is used for projecting the budgeted financial needs for the Test Year and the remainder of the Projection Period. Inc developing the rate analysis, certain adjustments are made such that the expenditures are categorized into either Operating and Maintenance (O&M) expenses or non-operating expenses. The O&M expenses are primarily those ongoing costs for labor, materials, supplies, services, etc., requiredi to manage and operate the utility system on a day-to-day basis while maintaining a dependable level of service. The 0&Mrequirements are generally a function ofabudgetary process and are directly related tot the level of service provided to customers of the utility system. The non-operating expenses include such items as capital outlay and The Budget also identifies estimated revenues to be derived from sources other than the retail water and sewer user rates. Such other revenue sources include interest earnings on investments, water meter sales and various other miscellaneous service charges. The revenues generated from the other sources are applied to the gross Revenue Requirements tor reduce the amount of revenue required from user rates. The result is the net Revenue  any other expenses & transfers.  Requirement. 2.3.2  Capital improvement Plan (CIP)  The City provided a list of anticipated capital projects to be funded over the Projection Period. These are also included in the development of the gross Revenue Requirements. The capital projects provided by and identified by the City in the CIP are required in order to maintain uninterrupted service to customers by investing in improvements, repairs, or replacements of aging system components as they wear over time. The City provided cost estimates for the identified capital projects by the fiscal yeari in which they are estimated to be undertaken for each system. These capital costs were then used in the analysis, along with O&M and non-operating expenses, to determine the gross revenue requirements for both the water and sewer systems. The capital projects included in the CIP, along with their assumed funding sources, for the Projection Period are provided in Tables 5 and 6.  9IPage    Cityof FARMERSVILLE EALEDEHIA  FARMERSVILLE  Table 5-1 Water CIP Funding Source 2024 Grant Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Table 6. -S Sewer CIP Funding Source 2024 Grant 5,000,000 Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash  Descriphion  Fiscaly Year Ending June 30, 2026 18,000 3,400,000 53,000 83,250 83,250 15,000  2025  2027  2028  Water projecis Birch Water Line Relocation Master Plans for Sewer, Water, and Storm Drain Cash Water Storage Tank (pending future grant) Urban Water Management Plan New Corporation Yard for Public Works Skid Steer Loader (Bobcat) Digital Sign Public Works Backhoe Pick Up Trucks (F-150x2) Downtown. Specific Plan General Plan Update Line Replacement Program Vehicle Replacement Tolal Water projects  Cash. $ 35,000 $ 326,000 $  70,000 49,000 57,333 26,656 15,000 58,666  43,175  250,000 250,000 75,000 75,000  311,655 $. 470,425 $3,551,250 $ 325,000 $ 325,000  Description  FiscaYear Ending, June 30 2026 83,250 15,000  2025 83,250  2027  2028  Sewer projecls Solar Plant at WWTP (pending! future grant) New Corporation Yard for Public Works Skid Steer Loader (Bobcat) Digital Sign Vacuum Truck Public Works Backhoe Pick Up. Trucks (F-150x2) Downtown: Specific Plan General Plan Update Line Replacement Program Vehicle Replacement De-watering System Asset Purchase Tolal Sewer projects 2.3.3  Master Plans for Sewer, Water, and Storm Drain: Cash $. 70,000 $  49,000 384,500 57,333 26,656 15,000 58,666 934,341  43,175.  250,000 250,000 75,000 75,000  $6,595,496 $ 126,425 $ 98,250 $ 325,000 $ 325,000  Debt Service  The City currently has outstanding debt for the sewer utility only. There is no current outstanding debt or assumed future debt issuances relating to the water system. A debt service coverage ratio of 1.101 times is required to be maintained on an annual basis, based on the City's current bond covenants associated with this existing debt. In simple terms, this means the utilities must have $1.10 in net operating revenues for every $1.00 of debt service they are committed to pay on existing debt. The debt service coverage is calculated by dividing net operating revenues (revenues less operations and maintenance expenses) by annual debt service. The annual existing debt payments over the Projection Period are  provided in Table 7.  10Page    Cityof FARMERSVILLE CADEORRIA  Table 7- Annual Debt Service Payments  Description  Projected for Fiscal Yeor Ending June 30,  2024  2025 $ $  2026  2027  2028  Water Annual Debt Service' I Annual Debt Service Total Waler Annual Debt Service Sewer Annual Debt Service 2018 WWTP Project - SRF 2018 WWTP Project- USDA Total Sewer Annual Deb! Service Total Annual Debt Service Notes: service payment is $0.00. 2.3.4  491,214 $ 491,214 $ 491,214 $ 491,214 $ 491,214 207,674 $ 208,125 $ 207,843 $ 207,505 $ 208,436 698,888 $ 699,339 $ 699,057 $ 698,719 $ 699,650 698,888 $ 699,339 $ 699,057 $ 698,719 $ 699,650  DIT There is no outstanding debt service associated with the water system; therefore, the annual debt  Gross and Net Revenue Requirement  The proposed water and sewer rates developed in the Report are designed for assumed implementation for FY 2023/24 (the Test Year as previously defined). The projected Test Year gross and net Revenue Requirements are estimated by utilizing the Budget, actual debt servicerequirements as provided ini the applicable debt service schedules, capitdlestimates and assumed funding sources of capital projects as provided by the City, and transfers. The Test Year Revenue Requirements that are used for developing the userr rates proposed herein are detailed in Appendix A at the end of this report and summarized in Table 8.  Table 8-Test Year Revenue Requirements = FY2 2024  Description  Waler  Wastewater 698,888 (327,856) (138,817)  Total 698,888 (724,433) (176,366)  Total 0&M Debt Service  1,267,913 $ 1,850,203 $ 3,118,116 $1,269,081 $2,221,235 $3,092,571 $1,231,532 $2,082,418 $2,916,205  Other Expenditures & Transters Gross Revenue Requirement Less Other Revenues Net Revenue Requirement  1,168 (37,549)  The projected Revenue Requirements for the water and sewer systems over the entire  Projection Period are provided in Tables 9 and 10.  11Page    Cityof ARMERSVILLE FARMERSVILLE CALEORRTA  Table 9 = Water Revenue Requirements for the Projection Period  Description Total O&M Existing Debt Service Future Debt Service Other Expenditures & Transfers Gross Revenue Requirement Less Other Revenues Net Revenue Requirement  Projected for Fiscal Year Ending June 30,  2024  2025  2026 125,289 (37,549),  2027  2028 355,888 (37,549)  $ 1,267,913 $ 1,331,312 $ 1,397,880 $ 1,467,777 $ 1,541,170 $1,269,081 $1,364,106 $1,523,169 $1,700,205 $1,897,058 $1,231,532 $1,326,557 $1,485,620 $1,662,656 $1,859,509  1,168 (37,549)  32,794 (37,549):  232,428 (37,549)  Table 10-Sewer Revenue Requirements for the Projection Period  Descrplion Total O&M Existing Debt Service Future Debt Service Other Expenditures & Transfers Gross Revenue Requirement Less Other Revenues Net Revenue Requirement  Projected for Fiscal Year Ending Junes 30,  2024 698,888 (327,856)  2025 699,339 (61,680)  2026 699,057 70,210  2027 698,719 167,204  2028 699,650 269,596  $ 1,850,203 $ 1,732,713 $ 1,819,351 $ 1,910,316 $ 2,005,831 $2,221,235 $2,370,372 $2,588,618 $2,776,239 $2,975,077 (138,817) (138,817) (138,817) (138,817) (138,817) $2,082,418 $2,231,555 $2,449,801 $2,637,422 $2,836,260  2.4 Customers & Billable Flows  The rate study performed herein is heavily reliant upon a detailed analysis of system customers and accompanyng usage and demand characteristics. The existing utility customer base and metered/Dillable flows provide the determinants utilized in the cost-of- service analysis, and ultimately in calculating the monthly user rates and charges, which become the foundation for projecting future revenues generated by the water and sewer Itisi important to note that the customer and flow analysis focuses primarily on the customer classifications that will be subject to and impacted by the user rates and charges to be developed in the Report. This consists of the general service (retail) customers that currently pay for utility services pursuant to the existing user rates and charges as previously detailed. For the purposes of the rate study, it is these customers and their accompanying usage characteristics that will generate revenues based upon the proposed user rates and  systems.  charges. 2.4.1  Customer Billing Analysis  For the rate study, detailed monthly billing information was provided for each individual customer. This data offered a breakdown of water and sewer customers by class, usage characteristics and billed charges. The historical billing data was queried from the City's electronic billing records. An analysis of the billing data was conducted to obtain an understanding of existing customers, customer classes, and metered usage per customer  12Page    Cityof FARMERSVILLE EACIFORMIA  class. In accordance with the data, as well as discussions with the City staff, the utility system provides service to various identifiable retail customer classes consisting of:  Single-Family Residential Multi-Family Residential Commercial/Non-Residential Government, and Schools.  Each of these customer classes embodies certain common characteristics in their utility use and service demand profiles that provide the basis for establishing an equitable allocation of system costs. The billing data was utilized to identify the number of customer accounts within each class, the applicable equivalent residential units (ERUS) based on meter size, the The historical customer data was also utilized to establish growth trends for each customer classification. The growth trends werei then used to project the average number of customers within each class for the Test Year plus the remaining years of the Projection Period. 2.5 Financial Projections Under Existing Rates The projected customers and accompanying billable flows are applied to the existing rates to develop a projection of user rate revenues that would be generated under existing rates. The revenues are then compared to the projected revenue equremeni/ependiues to determine ifr revenue adjustments are needed. Based on this comparison, it is projected that under the existing rates, neither the water nor sewer systems would meet their projected operating (O&M) financial obligations, debt service payment or coverage requirements, cover costs of capital projects, and be able to make transfers that are anticipated to be funded with cashreserves. Therefore, revenue increases are required to generate additional cash to fund projected costs of operations and capital projects, meet debt service requirements, and maintain adequate cashreserves. In addition, the City has established an objective of maintaining a target of at least 180 days of cashreserves to help fund ongoing operations in the event of periodic fluctuations in cash flow, and to address unexpected needs that may need to be funded with cash. The cash-flow statements outlining the projected operating results under existing rates are summarized in Tables 11 and 12 for the water and sewer systems, respectively. The proposed rates- and projected financial results  metered/Dillable usage profiles, and strength characteristics.  are addressed in the subsequent sections of this Report.  13/Page    Cityof FARMERSVILLE CALEEDENTA  Table 11-1 Water System Projected Operating Results Under Existing Rates  Projectedi for Fiscal Year Ending Junes 30.(51.0003) Exisling Proposed 2025 2026 2027 2028 1,162 $ 1,162 $ 1,198 $ 1,231 $ 1,263 $ 1,296 1,199 $ 1,199 $ 1,235 $ 1,268 $. 1,301 $ 1,334 (1,268) (1,268) (1,331) (1,398): (1,468) (1,541) $ (69) $ (69) $ (96). $ (130). $ (167); $ (207)  Description  2024 2024 38  Revenues: Water Sales Other Revenues Total Revenues O&ME Expenses Net Income For Debt Debts Service . Existing, Future Total Debt Service Balance Afler Debt Olher Expenditures &1 Transfers: Capital Outiay Transfers In Transfers Out Total Olher Expenditures &1 Transfers Net Results Fund Balance Achivily: Operdling Fund Beginning Balance Depost/Withdirowol, from Operations Capital Projects From Capital Improvement Plan Total Operaling Fund Balance Debt Coverage D) Notes:  38  38  38  38  38  $ $ $  $ (69) (69) $ (96). $ (130) $ (167) $ (207)!  $ (69); $ (69) $ (96). $ (130). $ (167) $ (207)! 1,252 $ 1,252 $ 872 $ 323 $ 421$ (450) (69): (96). (130) (167) (207) (312) (312): (453) (151). (325): (325) $ 872 $ 872 $ 323 $ 42 $ (450); $ (982) N/AI N/AI N/A N/A! N/AI N/AI  (69)  [) Therei is no outstanding debt service associated with the water system; therefore, the annual debt: service  payment is $0.00 and there is no applicable debt service coverage ratio calculation.  14/Page    Cityof RMERSVILI FARMERSVILLE CALEDRWIN  Table 12 = Sewer System Projected Operating Results Under Existing Rates  Projecledfor Fiscal Yeor Ending Junes 30. ($1.000s) Exisling Proposed 2025 2026 2027 2028 2,025 $ 2,025 $. 2,087 $ 2,163 $ 2,239 $ 2,315 2,164 $ 2,164 $ 2,226 $ 2,302 $ 2,378 $ 2,454 (1,850) (1,850) (1,733) (1,819): (1,910): (2,006) 314 $ 314 $ 493 $ 482 $ 468 $ 448 699 $ 699 $ 699 $ 699 $ 699 $ 700 $ 699 $ 699 $ 699 $ 699 $ 699 $ 700 (385) $ (385) $ (207) $ (217): $ (231) $ (251):  Description  2024 2024 139  Revenues: Wastewater: Sales Other Revenues Tolal Revenues O&ME Expenses Net Income For Debt Debts Service: Existing Future Total Debt Service Balance Afler Debt Olher Expenditures &1 Transfers: Capital Outlay Transfers In Transfers Out Tolal Other Expenditures &1 Transfers Net Results Fund Balance Aclivily: Operahing Fund Beginning Balance Depost/Withdrawal, from Operations Tolal Operating Fund Balance Ending Fund Balance Debt Coverage  139.  139  139  139  139  $ $  $  (385) $ (385): $ (207); $ (217), $ (231), $ (251) 5,524. $ 5,524 $ 3,543 $ 3,210 $ 2,896 $ 2,339 (385) (385) (207) (217) (231) (251) 3,543 $ 3,543 $ 3,210 $ 2,896 $ 2,339 $ 1,763 3,543 $ 3,543 $ 3,210 $ 2,896 $ 2,339 $ 1,763 0.45 0.45 0.70; 0.69 0.67: 0.64  Capital Projects From Capital Improvement. Plan (,596) (1,596) (127)  (98) (325) (325)  15/Page    Cityof FARMERSVILLE CALORNIA  Section 3 = Cost-of-Service (COS) Analysis  3.1 General  Inaccordance with the American Water Works Association (AWWA) Manual M1, the costs incurred in a water utility system are generally driven by specific service requirements imposed on the system by its customers. The primary service requirements that drive costs include annual flow volumes, peaking flow volumes (i.e., peak day, peak hour), the number of customers and the types of customers served. The water cost-of-service analysis performed for this rate study utilizes a common industry approach known as the base-extra capacity method. The sewer cost-of-service analysis involves an examination of flows, strength factors, the number and type ofcusfomersservedinaccordance with the California State Water Resources Control Board (SWRCB) Revenue Program Guidelines for Wastewater  Agencies.  3.2 Water Cost-of-Service  The COS utilizes the revenue requirements for the Test Year as the cost basis. The Test Year revenue requirements as identified in the previous section of the Report are functionally unbundled, classified and allocated to customer classes to determine the proportionate cost of service by class. More detail relating to the water COS approach can be found in  Appendix B. 3.2.1  Peaking Factors  System-wide peaking factors are used to derive the cost component allocation bases for Base (Delivery), Max Day, and Max Hour costs. Base represents average daily demand during the year, which has been normalized to a factor of1.00. Based on data provided by City staff, the average water demand was 1.25 million gallons per day (MGD) and the Max Day water demand was 2.36 MGD in the most recent full year. The Max Day peaking factor shows that the system-wide Max Day demand is 1.89 (2.36 Max Day MGD divided by 1.25 Base Delivery) times greater than the average daily demand. The City does not track Max Hour demand; therefore, Max Hour demand is not factored into this analysis. The system-  wide peaking factors are showni in Table 13. The Max Day allocations are calculated as follows: Base Delivery: 1.25/2.36x1 100% = 52.95% Max Day: (2.36-1.25), /2.36x1 1009=47.05%  16/Page    Cityof FARMERSVILLE CALIEOREIA  Table 13-Peaking Factors System-Wide  Demand (MGD) 1.25 2.36  Descriplion Avg Day Max Day  Factor 1.00 1.89  Base 100.00% 52.95%  Max Day 0.00% 47.05%  Total 100.00% 100.00%  Max Day Customer specific peaking factors are then developed, based on the maximum monthly usage divided by average monthly usage for each customer class and tier. Since daily peaking statistics are not available for individual customer classes, the maximummonth peaking factor from the customer/billing data is used as a proxy for the class-specific Max Day peaking factors. Using the customer billing data, peaking factors by customer class and  tier were calculated as shown in Table 14.  Table 14-Peaking Factors by Customer Class  Max Day Peaking Factor 1.24 2.24 1.69  Description  Single-Family Residential Tier 1-0- 1,500 Cubic Feet Tier 2- Over 1,500 Cubic Feet All Other Classifications All Flow  Once peaking factors are determined, the Max Day demand of each customer class is calculated and shown in Table 15. Total annual usage is derived from the customer data and then converted to an average daily usage by dividing the total annual usage by 365 days in a year. Total Max Day capacity is developed by multiplying the cuslomerspecic peaking factor (from Table 14) by the average daily usage to arrive at the total capacity required to meet each class's Max Day demand. The extra capacity required to meet Max Day demand is calculated by subtracting the average daily usage from the total required capacity for Max Day. The calculation of additional capacity to meet the Max Day demand  for each customer class is shown in Table 15.  17/Page    Cityof FARMERSVILLE EALORRIA  Table 15- Usage and Extra Capacity Flows Total Annual Average Flow (CCF) Daily Flow 339,556 127,799 142,018 609,373  Max Day Total Capacily Capacily (CCF/Day) (CCF/Day) 1,157 786 656 2,599  Descrption Single-Family Residential Tier 1-0- 1,500 Cubic Feet Tier 2- Over 1,500 Cubic: Feet All Other Classificalions AlI Flow Total 3.2.2  Peaking Factor 1.24 2.24 1.69  Additional  (CCF) 930 350 389 1,670  227 436 267 929  Functional Unbundling of Revenue Requirements  The water system costs are unbundled into operating components consisting of supply/reatment, Transmission, Distribution, Customer, and Administration functions. These are the primary services provided by most water utility systems to its customers. A brief  description of each component is as follows:  supply/rediment Exa the costs associated with obtaining and converting raw Transmission -1 the costs associated with major pumping and large diameter line facilities that transmit potable water throughout the system at-large; Distribution = the costs associated with smaller diameter lines that carry water to Customer = the costs associated with metering, billing, and providing other services to customers (e.g., printing, delivering and collecting utility bills, Administration - various overhead and other non-operating costs.  water to potable water;  individual customer properties;  recordkeeping, etc.);  The allocation of the functionally unbundled revenue requirements for the Test Year are  summarized in Table 16.  18Page    Cityof FARMERSVILLE CALIFOEKIA  Table 16 -Functionally Unbundled Cost Allocations  Descriplion  Test Year 1,267,913 1,168 $ 1,269,081 (37,549) $1,231,532 90,840 924,573 252,500 311,700 (37,549) (310,532) 1 1,231,532  Total O&M Existing Debt Service Future Debt Service Other Expenditures & Transfers Gross Revenue Requirement Less Other Revenues Net Revenue Requirement Functional Unbundled Revenue Requirement Treatment Transmission & Distribution Pumping Customer Service Admin Source of Supply Transfers Existing Bond DS New! Bond DS CIP Non-Rate Revenue Fund Balance n Total Notes:  [)F Represents a fransfer from reserves to provide funding  for capital outlay and CIP costs.  3.2.3  Classification of Water System Costs  Asprevousyoddesed, the unctionalyunoundled water AemeuegAemarOe then classified using the base-extra capacity cost alocation method. Applying this  methodology, costs are classified into the following categories:  Base Costs - capital costs and O&M expenses associated with service to customers under average demand conditions. This category does not include any costs attributable to variations in water use resulting from peaks in demand. Base Maximum Day/Extra Capacity Costs = costs attributable to facilities that are designed to meet peaking requirements. These costs include capital and operating costs for additional plant and system capacity beyond that required for average usage. For the purposes of this analysis, the max/extra capacity costs are further separated into systemwide facilities and distribution facilities. Customer Costs = costs associatedwith any aspecto of customer service including billing, accounting, recordkeeping, and meter services. These costs are independent of the amount of water used and the size of the customer's meter  costs tend to vary directly with the total quantity of water used.  and are not subject to peaking factors.  19Page    Cityof FARMERSVILLE EATPOFNIA  As the name wouldi indicate, using the base-extra capacityr method, the costs are separated between those attributed to base capacity (and demand) and those attributed to extra capacity (and demand). Other components. such as treatment, transmission and distribution are allocated based on flows and peaking factors. All customer service-related costs are Based on discussions with City staff, the general makeup of the customer base is not expected to change, soitis anticipated that the allocation percentages and factors will not change materially during the Projection Period. However, it is important to note that COS analyses are based on the data at a specific point ini time (i.e., the most recent fiscal year). To the extent that weather conditions, economic conditions and customer usage characteristics change during the Projection Period, the cost allocators can be impacted.  allocated 100% to customer billing.  The system-wide costs by service characteristic are shown in Table 17.  Table 17- - Classification of Unbundled Revenue Requirements  Meters & Services $  Component  Base Max Day Total $ $ $ 48,098 42,742 90,840 924,573 133,693 118,807 252,500  Treatment Transmission & Distribution Pumping Customer Service Admin Source of Supply Transfers Existing Bond DS New Bond DS CIP Capital Outlay Non-Rate Rev & Fund Balance Total 3.2.4  924,573  311,700 (272,423)  311,700 (348,081)  (40,059)  (35,599)  963,850 $ 141,732 $ 125,950 $ 1,231,532  Allocation to Customer Classes and Unit Cost  Development  The functionalized and classified revenue requirements are allocated to customer classes  utilizing a unit cost approach as follows:  Base Costs - Based on relative percentage of Base Annual Usage. Maximum Day/Extra Capacity System Costs - Based on relative percentage Maximum Day/Extra Capacity Distribution Costs - Based on relative Customer Costs = Based on relative percentage of Equivalent Residential Units  of Extra Capacity for the entire system.  percentage of Extra Capacity fori the distribution system.  (ERUS).  20Page    Cityof FARMERSVILLE EAEFORRIA  The units of service for each component of cost by customer class (if applicable) are provided in Table 18. The units of service consist of the number of accounts and/or units, ERUS, annual flows in 100 cubic feet and Max Day extra capacity. Accounts and/or units are based on the number of customers as provided in the customer data. ERUS are based on meter equivalencies in accordance with. AWWA standards. Forreference, Table 21, showing meter equivalency factors follows in the next section (3.2.5) of this report. Base is the total annual usage projected for the test year based on historical customer data. Max Day is the  extra capacity demand result as previously developed in Table 15.  Table 18 = Units of Service  Monthly Unis 2,559  Max Day (CCF/Day) 662 227 436 267 267 929  Rate Class  Accounts/ ERUS Base (CCF)  Single-Family Residential Tier 1-0-1 1,500 Cubic Feet Tier2- Over 1,500 Cubic Feet All Other Classifications All Flow Total  2,563 467,355  339,556 127,799 732 142,018 142,018 3,295 609,373  228 2,787  Ther revenue requirement for each cost component is divided byi its respective unit of service to calculate a unit cost. The unit cost for each cost component is demonstrated in Table 19.  Table 19-Cost Per Unit Meters & Services 3,295 ERUS/Month ERU/Monthly  Descmption Total Revenue Requirement Units of Service Cost Per Unit  Base 609,373 CCF CCF  Max Day  Total  963,850 $ 141,732 $ 125,950 $1,231,532  929 CCF/Day ÇCF/Day  $ 24.38 $ 0.2326 $ 135.54  The allocation of the revenue requirement to each customer class is determined by multiplying the Units of Service for each customer class (from Table 18) by the Cost per Unit for each cost component (from Table 19).Theresulting total cost to be recoveredi from each customer class by cost component is shown in Table 20. To calculate the. Account/Units and ERU Cost of Service by Customer Class, the monthly Units of Service from Table 18 are first multiplied by 12to determine the total annual Accounts/Units and ERUS being served, then that result is multiplied by the Cost per Unit shown in Table 19. For the Base and Max Day Costs, the Units of Service from Table 18 are multiplied by the Costs per Unit fromTable 19.  21/Page    Cityof ARMERSVILL FARMERSVILLE CALIFORRIN  Table 20. - Cost of Service by Customer Class and Cost Component  Rate Class Single-Family Residential Tier1 1-0-1 1,500 Cubic Feet Tier2-Over 1,500 Cubic Feet All Other Classifications All Flow Total 3.2.5  ERUS  Base (CCF) Max Day Total Costs (CCF/Day) 78,976 $ 30,710 a 29,724 $ 59,033 33,031 $ 36,208  $ 749,824 $ 108,701 $ 89,742 $ 948,266 $ 214,026 $ 33,031 $ 36,208 $ 283,266 963,850 $ 141,732 $ 125,950 $1,231,532  Rate Design by Unit Cost  The unit costs developed in the previous section are used to develop the proposed drates for the Test Year. The fixed rate components are based on accounts, ERUS and the allocated customer-related costs. The volumetric rate component is based on the annual usage and The meter charge is calculated on an ERU basis. It is common practice in the utility rate- making industry to establish arate structure that includes an incremented. service availability charge (monthly meter charge, sometimes also called a base charge) such that customers placing a greater potential demand requirement on the system (those with larger meters) The methodology for incrementing the availability charge is based upon standardized meter/capacity criteria established by the AWWA relative to the size and capacity of the water meter. The. AWWA equivalent meter capacity criteria are commonly used to establish astandard unit of measure for customers referred to as an ERU. Based upon the established standards, an ERU is equal to one single-family residential connection with a 3/4-inch water meter (the typical standard meter size for a single-family residential customer). The applicable ERU factors for larger water meters are based upon the incremental increase in potential capacity of those meters as compared to the standard meter size. These factors are derived from actual flow testing results as performed and defined by the AWWA, and commonly utilized by the water and sewer utility industry. The AWWA equivalency factors can be applied to the meter charge for a 3/4-inch meter to calculate the applicable meter While the service availability charge (base charge) may be incremented based upon standardized meter/capacily criteria established by the AWWA relative to the size and capacity of the water meter, this methodology was modified for single-family residential customers whose meter size is 1-inch or smaller. Due to California Residential Code section R313.2, aulomaticresidentiol fire: sprinkler systems that can produce a minimum of 30 gallons per minute (gpm) are required. Based on meter tests, 5/8-inch and 5/8x3/4-inch meters are only rated for approximately 20-25 gpm. Also, several manufacturers who produce 3/4-inch  extra capacity requirements (Max Day).  will pay proportionately more for the service availability component.  charges for each meter size.  22Page    Cityof ARMEASVILLE FARMERSVILLE  TORA  meters have indicated that those meters cannot meet the 30-gpmrequrement. Therefore, 1-inch meters are nowi the new: standard single-family residential meter being installed since these meters can meet the 30-gpm requirement under California Residential Code section R313.2. Since a 1-inch meter is required to meet the state requirement of 30 gpm for fire suppression purposes, and not because a 1-inch single-family customer is truly placing more demand on the water system, relative to a 5/8-inch or 3/4-inch meter customer, these 1-inch single-family residential customers are assumed to place the same demand on the water system as a 5/8-inch or 3/4-inch residential customer. As such, both the 3/4-inch and 1-inch meters are normalized with af factor of1.00ass showni in Table 21. Ai fulls summary oft the AWWA and single-family residential meter-size equivalency factors are provided in Table 21. The  proposed monthly base charges for the Test Year are shown in Table 22.  Table 21 - AWWA & single-Family Residential Meter Equivalency Factors  Description  AWWA Factors II  Single-Family Residential Factors B  Meter Size 3/4 Inch 1.0 Inch 1.5 Inch 2.0 Inch 3.0 Inch 4.0 Inch 6.0 Inch 8.0 Inch 10.0 Inch Notes:  1.00 1.67 3.33 5.33 10.00 16.67 33.33 53.33 76.67  1.00 1.00 3.33 5.33 10.00 16.67 33.33 53.33 76.67  D] Meter-size equivalency factors established by the AWWA and identified in AWWA Standards C700, MI and M22. [2] Due to the fire supression requirements under California Residential Code section R313.2, it is assumed that 3/4-inch and 1-inch single-family residential customers place the same demand on the system.  23Page    Cityof ARMERSVILLE FARMERSVILLE CAUPORRIA  Table 22 -Monthly Base Charge Calculation  Meter Size DI General Service 3/4 Inch 1.0 Inch 1.5 Inch 2.0 Inch 3.0 Inch 4.0 Inch 6.0 Inch 8.0 Inch 10.0 Inch Notes:  Capacity Ratio  Meter Charge  Proposed Charge 24.38 40.63 81.26  1.00 $ 1.67 $ 3.33 $ 5.33 $  24.38 $ 40.63 $ 81.26 $ 130.01 $ 130.01  10.00 $ 243.77 $ 243.77 16.67 $ 406.28 $ 406.28 33.33 $ 812.55 $ 812.55 53.33 $ 1,300.08 $ 1,300.08 76.67 $ 1,868.87 $ 1,868.87  DJ 3/4-inch and 1-inch single-family residential customers pay the 3/4-inch monthly meter charge of $24.38. All other customers pay the monthly meter charge shown for their respective meter size.  The water volumetric rates are made up of two different rate components. The first component is for base usage and related costs. The second component represents peak usage and peaking costs (the Max Day cost component). The Max Day peaking costs for each customer class (from Table 20) are divided by the annual usage to calculate the  peaking unit costs shown in Table 23.  Table 23-F Peaking Unit Cost Calculation  Peaking Costs IAI $ 30,710 $ 59,033 36,208 125,950  Annual Use Peaking Unit  Rate Class  (CCF) [B] 339,556 $ 127,799 $  Cost [CI-IAI/IB] 0.0904 0.4619  Single-Family Residential Tier 1-0- 1,500 Cubic Feet Tier 2- Over 1,500 Cubic Feet All Other Classificahions All Flow Total  142,018 $ 0.2550 609,373  The peaking unit costs are then added to the base unit cost of $0.2326 per 100 cubic feet as previously identified in Table 19 to calculate the proposed volumetric rates for each  customer class and tier shown in Table 24.  24Page    Cityof FARMERSVILLE EALIFORNIA  Table 24 = Volumetric Rate Calculation  Base [A]  Peaking Proposed [BI  Tier [DI 1.00 2.15 1.00  Rate Class  Rate (S/CCF) Differential [CI=IA1+(BI  Single-Family Residential Tier 1-0-1,500 Cubic Feet All Other Classifications AII Flow 3.2.6  $ 0.2326 $ 0.0904 $ 0.3230  Tier2- Over 1,500 Cubic Feet $ 0.2326 $ 0.4619 $ 0.6945  $ 0.2326 $ 0.2550 $ 0.4875  COS and Revenue Check  Once the rates are developed from the unit cost analysis, as shown in Sections 3.2.4 and 3.2.5, they are then applied to the customer service units identified in Table 18 above. The unit cost rates are applied to the customer service units to ensure that the rates calculated under the base-extra capacity method generate revenues from each customer class equitably andinamanner. that reflects the costs associaledwithnserving them. The revenues generated by customer class and the cost allocated to each customer class are provided  inTable 25.  Table 25 - Proposed Rate Revenues VS COS  Monhly Meler Total Fixed Annual Use  Monthly ERUS Charge/ERU  Charge Revenues CI-(A1"7B1D: *12 24.38 $ 749,824  (CCF) [D1] 467,355 339,556 127,799 142,018 609,373 Allocaled Costs [D2]  Descrphon  [A1 2,563 $  [B1]  Single-Family Residential Tier 1-0- 1,500 Cubic Feet Tier 2- Over 1,500 Cubic Feet All Other Classifications Total  732 $ 3,295 Proposed Rafe (S/CCF) [A2] $ 0.3230 $ 0.6945 $ $ 0.4875 $  24.38 $ 214,026 $ 963,850 Total Revenues  Total Volumetric Revenues B2-(A2"D1 [C2J-IC1)-B2 109,686 88,757  Descrplion  Single-Family Residential Tier 1-0-1 1,500 Cubic Feet Tier 2- Over 1,500 Cubic Feet $ All Other Classifications Total  198,443 $ 948,266 $ 948,266  69,239 $ 283,266 $ 283,266 $ 267,682 $ 1,231,532 $ 1,231,532  25IPage    Cityof FARMERSVILLE CAETFORHIA  3.3 Sewer Cost-of-Service  As with the water system, the COS analysis for the sewer utility utilizes the revenue requirements for the Test Year as the cost basis. The Test Year revenue requirements are functionally unbundled, classified and allocated to customer classes to determine the cost- of-service by class. More detail relating to the sewer COS approach can be found in  Appendix C. 3.3.1  Functional Unbundling of Revenue Requirements  The sewer system costs are unbundled into Collection, Treatment, and Customer functions.  Al brief description of each component is as follows:  Collection b costs associated with lines and facilities that transport wastewater Treatment = costs associated with treating wastewater for disposal reclamation Customer = costs associated with metering, billing, and providing other services to customers (e.g., printing, delivering and collecting utility bills, recordkeeping,  from customer properties to the plants for treatment;  and/or discharge;  etc.).  The allocation of the functionally unbundled revenue requirements for the Test Year are  summarized in Table 26.  26]Page    Cityof FARMERSVILLE CAEITORNIA  Table 26 - Functional Unbundled Cost Allocations  Description  Test Year $ 1,850,203 698,888 (327,856) $ 2,221,235 (138,817) $ 2,082,418 $ 862,000 313,340 674,863  Total O&M Existing Debt Service Future Debt Service Other Expenditures & Transfers Gross Revenue Requirement Less Other Revenues Net Revenue Requirement Treatment Collection Administration Pumping Customer Service Transfers CIP Capital Outlay Existing Bond DS New Bond DS Non-Rate Revenue Fund Balance D Non-Rate Rev & Fund Balance Notes: for capital outlay and CIP costs.  Functional Unbundled Revenue Requirement  1,595,500 698,888 (138,817) (1,923,356) $ 2,082,418  DI Represents a transfer from reserves to provide funding Classification of Revenue Requirements  3.3.2  The functionally unbundled revenue requirements for the. sewer system are classified into fixed and volumetric customer components based on methodology consistent with the Water Environmentall Federation (WEF), Manual of Practice No. 27. As discussed for the water COS analysis, it is anticipated that the allocation percentages will not change materially during the Projection Period. However, it is important to note that COS analyses are based on the data at a specific point in time (i.e., the most recent fiscal year). To the extent that weather conditions, economic conditions and customer usage characteristics change during the Projection Period, the cost allocators can be impacted. The system-widecosts! by  service characteristic are shown in Table 27.  27/Page    Cityof FARMERSVILLE CALEDRNIA  Table 27 - Classification of Unbundled Revenue Requirements  Component Treatment Collection Administration Pumping Customer Service Transfers CIP Capital Outlay Existing Bond DS New Bond DS Total 3.3.3  Volume Capacily Strengt BOD Strengt- SS Customer $. 99,647 $ 99,647 $ 338,114 $ 324,592 $  Tolal $ 862,000 313,340 674,863 674,863 1,595,500 1,595,500  156,670  156,670  349,444 349,444  698,888  Non-Rate Rev & Fund Balance (301,401) (301,401). (168,231) (161,503) (1,129,637) (2,062,173)  304,360 $ 304,360 $ 169,883 $ 163,089 $1,140,726 $2,082,418  Allocation to Customer Classes and Unit Cost  Development  The functionalized and classified revenue requirements are allocated to customer classes  utilizing a unit cost approach as follows:  Collection - Based on relative percentage of annual sewer usage; Treatment - Based on relative percentage of sewer: strength discharge (BOD and Customer - Based on relative percentage of units by customer class.  SS);  The units of service for each component of cost by customer class (if applicable) are provided in Table 28. The units of service consist of the number of customer. units, annual flows in 100 cubic feet, and sewer strength discharge. Customer units are based on the number of customers as provided in the customer data. Collection is the total annual sewer flows projected for the test year. BOD and SS reflect the strength per pound of the sewer  discharge collected by the City from each customer class.  28/Page    Cityof FARMERSVILLE FARMERSVILLE CAUFGRRIA  Table 28 = Units of Service  Descrption Residential Classes 12) Single-Family Residential Apartment Non-Residenlial Classes [31 Commercial Class Commercial Government Church Sub-Total Commercial Schools Schools Total Notes:  Tofal Units 2,424 309,237 419 38,367 109 27,601 3 692 15 175 127 28,468 9 17,959 2,979 394,032  CCF  BOD  BOD 250 482,281 250 59,837  TSS  TSS 250 482,281 250 59,837  Flow Factorl Pounds Factorl [ Pounds  481 110,721 130 175 130  380 100 175  87,472 577 255 88,305 100 11,204 641,625  751 255 111,727 14,565 668,409  DAverage strength factors for BOD and TSS are based on the State Water Resources Control Board [2) Assumed annual residential sewer flows were caiculated byi taking the average winter consumption fori the lowest three months of the most recent full fiscal year of water customer data provided, then determining the factor of the winter average usage to the total annual average monthly water usage for ther most recent fullf fiscal year of water customer data provided. This factor was then applied to the projected monthly average "Test Year" water flows to determine the "Test Year" annual sewer flows. The revenue requirement for each cost component is divided byi itsr respective unit of service to calculate a unit cost. The unit cost for each cost component is demonstrated in Table 29.  Revenue Program Guidelines, Appendix G.  [3] Allr non-residential flow was provided from sewer billing data.  Table 29 = Cost Per Unit Volume Capacity Strengih BOD  Descriplion Units of Service Cost Per Unit  Strength SS Customer 641,625 Pound Units/Month 0.25 $ 31.91 Pound Units/Month  Tofal  Total Revenue Requirement $ 304,360 $ 304,360 $ 169,883 $ 163,089 $ 1,140,726 $ 2,082,418  394,032 394,032 668,409 CCF CCF Pound $ 0.77 $ 0.77 $ 0.25 $ CCF CCF Pound  2,979  The allocation of the revenue requirement to each customer class is based on the unit costs fore eachcomponent: multiplied by the units of service for each customer class. The total costs to be recovered from each customer class by rate component are shown in Table 30.  29Page    Cityof FARMERSVILLE FARMERSVILLE EALEGRRIA  Table 30 = Cost of Service by Customer Class and Cost Component  Rate Class Residenfial Apartment Non-Residenial Commercial Class Schools Total 3.3.4  Volume 29,636 21,989 13,872  Capacily Strengih BOD 29,636 21,989 13,872  Strengn SS Customer 15,209 22,445 2,848  Tolal 250,133 143,452 37,740  Single-Family Residential $ 238,863 $. 238,863 $ 122,577. $ 122,587 $ 928,204 $ 1,651,093  15,208 28,397 3,702  160,445 48,631 3,446  304,360 $ 304,360 $ 169,883 $ 163,089 $ 1,140,726 $ 2,082,418  COS and Revenue Check  Once the unit costs are developed and the costs associated with each customer class based on the units of service are determined in Section 3.3.3, rates can be developed to ensure that each customer class is generating sufficient revenues to cover their allocated cost of service. The proposedi rate structure for the sewer rates are as follows:  Residential Customers - For single-family and multi-family residential customers, the proposed rates will consist of a flat monthly charge based on the number of Commercial/Non-Residential Customers : For commercial customers, the proposedrates' will consist of at fixed monthly charge and a volumetric rate per 100 cubic feet based on each customer class's respective sewer strength discharge  dwelling units for single-family and multi-family, respectively.  (commercial and school classifications).  The revenues generated by customer class VS the cost allocated to each customer class is  provided in Table 31.  Table 31 = Proposed Rate Revenues VS COS Montly Proposed TolalFixed Billable Annual Proposed Volumetic Total  Tofal  Tolal COS IH)  Descripfion Residential Single-Family Residential Apartment Non-Residenfial Commercial Class Schools Tolal  Dwelling Morihly Fee Volume Volumetric Rate Calculated Revenues  Unis FixedFee Revenue (CCE) IBI ICI=IAIIB)"12 [D) 2,424 $ 56.76 $ 1,651,093 419 $ 49.75 $ 250,133  Rate Revenues Revenues [EI [FI=(DITEL [GI-ICI+IE1 N/A $ N/A. $  IAI  N/A N/A  1,651,093 $ 1,651,093 250,133 $ 250,133  127 $ 31.91 $ 48,631 28,468 $ 3.33 $ 94,820 $ 143,452 $ 143,452 31.91 $ 3,446 17,959 $ 1.91 $ 34.294 $ 37,740. $ 37,740  9 2,979  $1,953,304 46,427  129,114 $ 2,082,418 $ 2,082,418  30Page    Cityof ARMERSVILLE FARMERSVILLE EALFGRNIA  Section 4 = Proposed Test Year Rates  4.1 General  The methodology used to calculate the water and sewer rates proposed herein involves applying the projected customers and flows to the user rates in order to develop the estimated: revenues (separately for water and sewer), comparing the projected revenues to the estimated Test Year revenue requirements, and adjusting the water and/or sewer rates onapercentage basis as necessary to generate ther revenuessuficient to meet ther revenue needs of the utility system. In addition, there are other factors that must be considered in designing rates to satisfy the City's objectives. Such other rate considerations include, but  are not limited to:  1. Sensitivity to existing customers - the proposed rates must consider the impact on existing customers and avoid putting an inequitable financial Comparabilty with neighboring utilities - the proposed rates should consider the rates and charges applied to customers of neighboring utilities of 3. Existing rate structure - the proposed rates must consider the logistics and cost/benefit implications of instituting changes to the existing rates and rate Economic development - the proposed rates must consider the potential forf future development within the City's service area and ensure that the rates  burden on any particular customer class. relatively similar size for similar service.  2.  structure.  4.  do not make it cost-prohibitive for future development.  The proposed rates developed herein utilize these considerations, as well as discussions with the City staff, professional judgment, and prior experience with comparable utility systems. When reviewing potential rate structure options in conjunction with the need for additional revenues, it was determined that revenue adjustments are needed, and the existing rate Inc conjunction with the existing rate structure, the proposed water and sewer rates for the upcoming fiscal year are composed of two rate components consisting of a monthly base charge and a volumetric rate for both water and sewer. The proposed water and sewer rates for the Test Year are provided again in Tables 32 and 33, respectively.  structure needs to be adjusted based on the cost-of-service analysis.  31Page    Cityof ARMERSVILL FARMERSVILLE EALEBRRIA  Table 32-P Proposed Monthly Water Rates  Descriplion  Rale 24.38 $ 24.38 $ 40.63 $ 81.26 $ 130.01 $ 243.77 $ 406.28 $ 812.55 $ 1,300.08 $ 1,868.87 $ 0.3230 $ 0.6945 $ 0.4875  Monthly Base Charge by Meter Size:  Single-Family Residential (3/4 Inch and 1 Inch) $  3/4 Inch 1.0 Inch 1.5 Inch 2.0 Inch 3.0 Inch 4.0 Inch 6.0 Inch 8.0 Inch 10.0 Inch  Volumetric Rates Per 100 Cubic Feet Residential:  0-1,500 Cubic Feet Over 1,500 cubic feet  Volumetric Rates Per 100 Cubic Feet- All Other:  All Flow  32/Page    Cityof FARMEASVILLE FARMERSVILLE EAEBRNIA  Table 33. - Proposed Monthly Sewer Rates  Descriplion  Rate  Monthly Base Charge: Residential 0I Single-Family Residential Multiple-Dwelling Unit Non-Residential  $ 56.76 $ 49.75 $ 31.91 31.91  Service Stations, Garages, Churches, Social, Fraternal, Non-Profit, Other Retai/Service Restaurants, Cafes, Drive-ins, Grocery Stores, $ Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ 31.91 with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ without Cooking Facilities (per unit) Professional Offices or Other Business Volumetric Rates Per 100 Cubic Feet: Single-Family Residential Multiple-Dwelling Unit Non-Residential  31.91 $ 31.91 $ 31.91  Public Schools  Residential  $ $ $ $  0.00 0.00 3.33 3.33 3.33 3.33 1.91 3.33  Service Stations, Garages, Churches, Social, Fraternal, Non-Profit, Other Retail/Service Restaurants, Cafes, Drive-Ins, Grocery Stores, Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming Units (per unit), Camps (per unit), Auto Courts $ without Cooking Facilities (per unit) Professional Offices or Other Business  Public Schools Notes:  $ $  [I All single-family and multi-family customers pay a fiat monthly fee per dwelling unit regardless of usage.  33/Page    Cityof FARMERSVILLE CADORWTA  4.2 Typical Monthly Bill Comparison  Figure 1  In addition to reviewing the effect that a change in the rates will have on the system revenues, it is also important for City utility management to understand impact that a change will have on the existing customers. Tables 34, 35 and 36 provide a comparison ofs several monthly bills  Bill Comparison @ Various Units of Flow Combined Water & Sewer Bill  3,200 E 52.400 : a 1,600 e 1,400 800 400 200  the  $20  $40 Proposed DExisling  $60  $80  $100  at various flow levels for water and sewer, as well as the combined utility bills under the existing and proposed rates. A graphical illustration of a bill comparison at various units of flow is provided in Figure 1 for a residential customer with both water and sewer service. It was determined after conducting a historical billing analysis that an average residential customer uses 1,600 cubic feet monthly. Based on the proposed rates, a typical City residential customer will experience an increase of $1.82 in their combined monthly water  and sewer bill.  Table 34 - Residential Water Rate Impact  Description Residential 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.01 Inch 3/4 Inch & 1.01 Inch 3/4 Inch & 1.0 Inch 3/41 Inch & 1.0 Inch 3/4 Inch & 1.01 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch  Monthly Flow  Monthly Charges Exisling Proposed Difference 0$ 27.32 $ 24.38 $ [2.94) 200 $ 27.32 $ 25.02 $ (2.30) 400 $ 27.32 $ 25.67 $ (1.65) 600 $ 27.32 $ 26.31 $ (1.01) 800 $ 27.32 $ 26.96 $ (0.36) 1,000 $ 27.32 $ 27.61 $ 1,200 $ 27.32 $ 28.25 $ 1,400 $ 27.32 $ 28.90 $ 1,600 $ 28.25 $ 29.92 $ 1,800 $ 30.11 $ 31.31 $ 2,000 $ 31.97 $ 32.69 $ 2,400 $ 35.69 $ 35.47 $ (0.22) 2,800 $ 39.41 $ 38.25 $ (1.16) 3,200 $ 43.13 $ 41.03 $ (2.10) 3,600 $ 46.85 $ 43.81 $ (3.04)  $Amount  0.29 0.93 1.58 1.67 1.20 0.72  34/Page    Cityof FARMERSVILLE EAEEDKNIA  Table 35. = Residential Sewer Rate Impact  Monthly Flow  Monty Charges Exisling Proposed Diference 0 $ 56.61 $ 56.76 $ 200 $ 56.61 $ 56.76 $ 400 $ 56.61 $ 56.76 $ 600 $ 56.61 $ 56.76 $ 800 $ 56.61 $ 56.76 $ 1,000 $ 56.61 $ 56.76 $ 1,200 $ 56.61 $ 56.76 $ 1,400 $ 56.61 $ 56.76 $ 1,600 $ 56.61 $ 56.76 $ 0.15 1,800 $ 56.61 $ 56.76 $ 2,000 $ 56.61 $ 56.76 $ 2,400 $. 56.61 $ 56.76 $ 2,800 $ 56.61 $ 56.76 $ 3,200 $ 56.61 $ 56.76 $ 3,600 $ 56.61 $ 56.76 $  SAmount  Description Residential 3/4 Inch & 1.0 Inch 3/4 inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/41 Inch & 1.0 Inch 3/41 Inch & 1.0 Inch 3/41 Inch & 1.0 Inch 3/4 Inch & 1.0Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch  0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15  Table 36 = Residential Combined Rate Impact  Monthly Flow  Monthly Charges Existing Proposed Difference 01 $ 83.93 $ 81.14 $ (2.79) 200 $ 83.93 $ 81.78 $ (2.15) 400 $ 83.93 $ 82.43 $ (1.50) 600 $ 83.93 $ 83.07 $ (0.86) 800 $ 83.93 $ 83.72 $ (0.21) 1,000 $ 83.93 $ 84.37 $ 1,200 $ 83.93 $ 85.01 $ 1,400 $ 83.93 $ 85.66 $ 1,600 $ 84.86 $ 86.68 $ 1,800 $ 86.72 $ 88.07 $ 2,000 $. 88.58 $ 89.45 $ 2,400 $ 92.30 $ 92.23 $ (0.07) 2,800 $ 96.02 $ 95.01 $ (1.01) 3,200 $ 99.74 $ 97.79 $ (1.95) 3,600 $ 103.46 $ 100.57 $ (2.89)  SA Amount  Description Residential 3/4 Inch & 1.0Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.01 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.0 Inch 3/4 Inch & 1.01 Inch  0.44 1.08 1.73 1.82 1.35 0.87  35/Page    Cityof RMERSV FARMERSVILLE CAEFBRNIA  4.3 Rate Comparison with Other Utilities  Inc order to provide the City with additional insight regarding the proposed rate levels, the analysis includes a comparison of both the existing and proposed user rates relative to the user rates imposed by other water and sewer utility systems located in same region. A summary analysis is provided comparing the cost of monthly water and sewer service for a typical residential customer (assumed to have a 3/4-inch or 1-inch water meter) calculated under the existing and proposed rates of the City with those of the other utilities. The rates utilized for the other neighboring utilities shown were in effect as of December of 2023 and are exclusive of local taxes, outside surcharges, franchise fees, regulatory fees, or other rate adjustments. A summary comparison with other utilities for aresidential customer using 1,600  cubic feet per monthly billing is illustrated in Figure 2.  Figure 2  Neighboring Utility Comparison Combined Water & Sewer Bill  $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $74.20 $60.00 $40.00 $20.00 $-  Assumes ani inside residential customer receiving 1,600CF (or=12,000 Gallons) ofs service per month.  $169.29  $113.41 $115.10 $116.91  $100.00  $100.60  $90.80 $92.75.  $83.16 $84.86 $85.02 $85.43 $86.59 $86.68 $86.74  r  Jore  CececN  EMonthly Water Bill @1 1600 Cubic Feet Monthly' Wastewater Bill @1 1600 Cubic Feet -Average Monthly Bill  36/Page    Cityof FARMERSVILLE EAEEORNIA  Its should be noted that when making comparisons for water and sewer service, several  factors affect the level of rates and charges. Such factors may include:  1) Terms of wholesale service agreements; 2) Time since last rate update for comparison providers;  3) Level of treatment required before the distribution of water to the ultimate 4) Level of treatment and effluent disposal methods of sewer: service; 5) Anticipated capital improvement programs and capital financing methods; 6) Plant capacity utilization, age of facilities, and assistance in construction by federal or state grants, connection fees, developer contributions, etc.; 7) General Fund and/or administrative fee transfers made by other systems which may account for differences in the level of rates charged; and 8) Bond covenants and funding requirements of the rates.  customers;  For the utilities included in the rate comparisons, no analysis has been performed with consideration of the above-mentioned factors as they relate to the reported water and  sewer rates currently being charged.  37IPage    Cityof FARMERSVILLE EADTORNTA  Section 5 = Projected Operating Results  5.1 General  As a conclusion to the study, individual proforma operating statements are developed for both the water and sewer systems. The statements summarize the projected financiall results based on the system revenues, expenses and other revenue requirements anficipated in The individual operating statements cover the 5-fiscal year Projection Period through June 30, 2028 and are prepared on a cash-flow basis. In addition, the individual statements include the applicable annual percentage rate adjustments necessary to meet the projectedi revenue requirements. The annualrate adjustments are considered. separately for both water and sewer and further separated by the base charge and volumetric rate components. The following discussions describe the development of the major components  future years.  of the projected operating results.  5.2 Projected User Rate Revenues  The user rate and charge revenues are estimated by applying the existing and proposed rates to the projected customers and flows. The revenues for the Projection Period are estimated separately for both water and sewer. The resulting revenues are then compared to the projected revenue requirements (ie., O&M expenses, debt service, capital outlay, transfers, etc.) in each fiscal year to determine if the revenues are sufficient to satisfy the expenditure needs of the system. To the extent that there are revenue shortfalls in any given year of the Project Period, the water and/or sewer rates developed from the Cost-of-Service and Rate analysis outlined in Section 3 of this report are adjusted on a percentage basis as necessary to generate the required level of revenues. The projected water, sewer and  combined user rate revenues are provided in Table 37.  Table 37 - Projected User Rate Revenues  System Total Water Revenue Total Sewer Revenue  Existing Proposed 2024  ProjectedFY 2026 2027  2024  2025  2028  $1,161,798 $1,231,532 $1,326,557 $1,485,620 $1,662,656 $1,859,509 $2,025,057 $2,082,418 $2,231,555 $2,449,801 $2,637,422 $2,836,260  Total Combined Revenue $3,186,855 $3,313,950 $3,558,112 $3,935,421 $4,300,078 $4,695,769  38 IPage    Cityof FARMERSVILLE CALTORRIA  The projected revenues include the annual water and sewer rate adjustments anticipated fori the remaining years of Projection Period beyond the Test Year. The proposed user rates from which the projected operating results are developed for the entire 5-fiscal year Projection Period are provided in Tables 38 and 39. The rates identified in the tables reflect the cost of providing service to individual customer classes based on peaking factors,  volume of flow, and: strength characteristics.  Table 38. = Proposed Monthly Water Rates  Description  Exising Rales 2024  ProjectedFor Fiscall Year Ending June.30  2025  2026  2027 2028  Monthly Base Charge by Meler Size:  Single-Family Residential (3/4 Inch and I Inch) $.. 27.32 $ 24.38 $ 26.57 $ 28.96 $ 31.57 $ 34.41  3/4 Inch. 1.01 Inch 1.51 Inch 2.01 Inch 3.0 Inch 4.01 Inch. 6.0! Inch 8.01 Inch 10.01 Inch Volumehric Rates Per 100 Cubic Feet- Residentia!: 0-1 1,500 Cubic Feet Over 1,500 cubic feet Volumehric Rales Per 100 Cubic Feet. All Olher: 0-1,500 Cubic Feet Over 1,500 cubicf feet  27.32 $ 24.38 $ 26.57 $ 28.96 $ 31.57 $ 34.41 27.32 $. 40.63 $ 44.28 $ 48.27 $ 52.62 $ 57.35 43.71 $ 81.26 $ 88.57 $ 96.53 $ 105.23 $ 114.70 43.71 $ 130.01 $ 141.71 $ 154.45 $ 168.37 $ 183.52 68.29 $ 243.77 $ 265.70 $ 289.60 $ 315.70 $ 344.10 68.29 $ 406.28 $ 442.83 $ 482.67 $ 526.17 $ 573.50 109.26 $ 812.55 $ 885.67 $. 965.33 $ 1,052.33 $. 1,147.00 109.26 $ 1,300.08 $.1,417.07. $ 1,544.53 $ 1,683.73 $. 1,835.20 N/A $ 1,868.87 $2,037.03 $ 2,220.27 $2,420.37 $2,638.10 0.0000 $ 0.3230 $ 0.3521 $ 0.3838 $ 0.4183 $ 0.4559 0.9300 $ 0.6945 $ 0.7570 $ 0.8251 $ 0.8994 $ 0.9803 0.0000 $ 0.4875 $ 0.5314 $ 0.5792 $. 0.6313 $ 0.6881 0.9300 $ 0.4875 $ 0.5314 $ 0.5792 $. 0.6313 $. 0.6881  39/Page    Cityof FARMERSVILLE EALEORNIA  Table 39 - Proposed Monthly Sewer Rates  Description  Existing Rates 2024.  ProjectedFor fiscalYear Ending June 30: 2025 2026  2027  2028  Monthly Base Charge: Residential D Single-Famly Residential Multiple-Dwelling Unit Non-Residentidl  56.61 $ 56.76 $ 61.30 $. 63.75 $ 66.30 $ 68.95 56.61 $ 49.75 $ 53.72 $ 55.87. $ 58.11 $ 60.43  Service Stations, Garages, Churches, Social, Fraternal, Non-Profit, Other Retai/Service Restaurants, Cafes, Drive-Ins, Grocery Stores, Bars, Car Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming without Cooking! Facilities (per unit) Public Schools Professional Offices or Other Business Volumehric Rales Per 100 Cubic Fee!: Residential Single-Family Residential Multiple-Dweling Unit Non-Residentidl  56.61, $ 31.91 13.00 $ 31.91, $ 34.46 $  $ 34.46 $ 35.84 $ 37.27 $ 38.76  $  35.84, $ 37.27 38.76  Units (per unit), Camps (per unit), Auto Courts $ 14.53 $ 31.91 $ 34.46 $ 35.84 $ 37.27 $ 38.76 Units (per unit), Camps (per unit), Auto Courts $ 11.53 $ 31.91 $ 34.46 $ 35.84 $ 37.27 $ 38.76  13.00 $ 31.91 $ 34.46 $ 35.84 $ 37.27 $ 38.76 53.03 $ 31.91 $ 34.46 $ 35.84 $ 37.27 $. 38.76 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $. 0.00 $. 0.00  0.00 $ 0.00 $ 0.00 $ 0.00 $. 0.00 $ 0.00  Service Stations, Garages, Churches, Social, Fraternal, Non-Profit, Other Retail/Service Restaurants, Cafes, Drive-Ins, GroceryStores, Bars, Cary Washes, Laundromats Hotels (per unit), Motels (per unit), Rooming with Cooking Facilities (per unit) Hotels (per unit), Motels (per unit), Rooming without Çooking! Facilities (pery unit) Public Schools Professional Offices or Other Business Notes:  0.00 $ 3.33  3.60 $ $  3.74 $ 3.89 $ 4.05 3.89 $ $ 4.05  1.15 $ 3.33 $ 3.60 $ 3.74  Units (per unit), Camps (per unit), Auto Courts $ 0.00 $ 3.33 $ 3.60 $ 3.74 $ 3.89 $ 4.05 Units (per unit), Camps (per unit), Auto Courts $ 0.00 $ 3.33 $ 3.60 $ 3.74 $ 3.89 $ 4.05  1.79 $. 1.91 $ 2.06 $. 2.14 $ 2.23 $ 2.32 0.00 $ 3.33 $ 3.60 $ 3.74 $ 3.89 $ 4.05  D Alls single-family and multi-family customers pay only a flat monthly fee per dwelling unit regardless of usage. The projected user rates provided herein for the periods beyond the Test Year are intended for strategic planning purposes, and to provide the City with the estimated future rates that may be needed to satisfy the projected cash flow requirements. The rates are developedi in accordance with the assumed customer, flow, expenditure, and revenue estimates projected in this rate: study. Itisin important tor note that, since itisr necessary to utilize numerous assumptions to develop the projected operating results, to the extent that actual customers, flows and/or system expenditures differ from those assumed herein, additional rate adjustments may be required. Fori informative purposes, a calculation of the typical monthly bill for arepresentative City residential customer based oni the projectedi rates, as well as the accompanying change ini the monthly bill for each year of the Projection Periodi is included herein. An illustration of the projected typical bill rate path is provided in Figure 3.  40/Page    Cityof FARMERSVILLE EADEORRIA  Figure 3  Projected 5-Year Bill Path 1,600 Cubic Feet Per Month  $120 $100  $111.18  $105.04  $99.30  $93.91  $80 $84.86 $60 $40 $20 $- Existing  $86.68  2024  2025 Water Sewer  2026  2027  2028  5.3 Debt Service Coverage  The water and sewer operating statements also include a calculation of the annual debt service coverage. It should be noted though, that all current outstanding debt is associated with. the sewer system only. There is no current outstanding debt or assumed future debt issuances associated with the water system throughout the Projection Period. Debt service coverage is generally viewed as ani indicator of the financial strength of the utility. The debt service coverage ratio is broadly calculated by dividing the net revenues by the annual debt service requirement. For the purposes of the debt service coverage calculation developed herein, the net revenues consist of the total operating revenues (user rate revenues plus other revenues) less the 0&M expenses. In accordance with the requirements of the outstanding loan agreements, the City must maintain coverage of at least 110%(1.10 times) of the annual debt service payment. The pro-forma operating statements indicate that the sewer system is expected to meet or exceed the minimum level of debt service coverage in each fiscal year of the Projection Period. It is important to note that the coverage results are provided for informative purposes only and not intended as a legally supportable calculation for representation to bondholders. The debt service coverage for the water and sewer enterprise systems respectively over the projection period is provided  in1 Table 40.  41Page    Cityof FARMERSVILLE CAEEORNIA  Table 40 - Water and Sewer Utility System Projected Debt Service Coverage  Fiscal Year 2024 2025 2026 2027 2028  Water Enterprise D N/A N/A N/A N/A N/A  Sewer Enterprise 11 1.10 1.10 1.10 1.24 1.39  Projecled Minimum Projected Minimum  N/A N/A N/A N/A N/A  1.10 1.10 1.10 1.10 1.10  Notes:  DI There is no outstanding debt service associated with the water system; therefore, there is no applicable debt service coverage ratio calculation. [2] The rate stabilization fund established by the City is being utilized to meet the minimum debt service coverage requirement of 1.10x through FY 2025. The sewer system is able to meet the minimum debt service coverage requirement of1.10x without utilizing the rate stabilization fund starting in FY 2026. 5.4 Summary of Projected Operating Results The cash-flow statements outlining the projected operating results are summarized in Tables 41 and 421 for the water and sewer systems, respectively. The projectedi results are graphically illustrated in Figure 4 for the water and sewer systems, respectively. The results demonstrate that the proposed rates and charges along with the other system revenues are anticipated to be sufficient to satisfy the projected revenue requirements and capital needs of the  combined utility system.  42Page    Cityof FARMERSVILLE CAFORRIA  Table 41 - Water System Projected Operating Results  Projecledfor Fiscal Yearl Ending June 30.($1.0005) Exisling Proposed 2025 2026 2027 2028 1,162 $ 1,232 $ 1,327 $ 1,486 $ 1,663 $. 1,860 1,199 $ 1,269 $ 1,364 $ 1,523 $ 1,700 $ 1,897 (1,268) (1,268) (1,331) (1,398), (1,468) (1,541) $ (69): $ 1$ 33 $ 125 $ 232. $ 356  Description  2024 2024 38  Revenues: Water Sales Other Revenues Total Revenues O&ME Expenses Net Income For Debt Deb! Service 1. Existing Future Tolal Debts Service Balance After Debt Other Expendilures & Transfers: Capital Outlay Transfers In Transfers Out Total Olher Expenditures &1 Transfers Net Results Fund Balance Aclivily: Operaling Fund Beginning Balance Depoat/Withdrawol, from Operations Total Operaling Fund Balance Debt Coverage 1) Notes:  38  38  38  38  38  $  $ $  $  $ (69) 1$ 333 $ 125 $ 232 $ 356  $ (69) $  33 $ 125 $ 232 $ 356  1,252 $ 1,252 $ 941 $ 522 $ 496 $ 403 $ 872 $ 941 $ 522 $ 496 $ 403 $ 434 N/AI N/A! N/A: N/AI N/A N/A  (69)  33 125  232 356  Capital Projects From Capital Improvement Plan (312) (312) (453). (151); (325)! (325)  DJ There is no outstanding debt service associated with the water system; therefore, the annual debt service  payment is $0.00 and there is no applicable debt service coverage ratio calculation.  43Page    Cityof FARMERSVILLE CALIEDERIA  Table 42-S Sewer System Projected Operating Results  Projectedfor Fiscal Year Ending Hune30.151.0003 Exisling Proposed 2025 2026 2027 2028 2,025 $ 2,082. $ 2,232. $ 2,450 $. 2,637. $ 2,836 $.2,164 $ 2,221 $ 2,370 $ 2,589 $. 2,776 $ 2,975 (1,850)! (1,850) (1,733) (1,819), (1,910). (2,006), $ 314 $ 371 $ 638 $ 769 $ 866 $ 969 P 699 $ 699. $ 699 $ 699 $ 699 $ 700 $ 699 $ 699 $ 699 $ 699 $ 699 $ 700 (385) $ (328) $ (62) $ 70 $ 167 $ 270  Description  2024 2024 139  Revenues: Wastewater Sales Other Revenues Total Revenues O&MI Expenses Net Income For Debt Debt Service: Existing Future Tolal Debts Service Balance. Afler Debt Olher Expenditures & Transfers: Capital Outlay Transfers In Transfers Out Total Olher Expenditures & Transfers Net Resulls Fund Balance Aclivity: Operaling Fund Beginning Balance Depoat/Withdrawon, from Operations Rate Stabilization Fund Transfer Total Operating Fund Balance Rate Stabilizalion Fund' 1 Beginning Fund Balance Net Transfers In/(Out) Total Rate Stabilization Fund Balance Ending Fund Balance Debt Coverage [ Notes:  139  139  139  139  139  $  $  (385) $ (328) $ (62) $ 70 $ 167 $ 270 5,524 $ 5,524 $ 3,203 $ 3,281 $. 3,385 $ 3,227 $ 3,088 $ 3,203 $ 3,281 $ 3,385 $ 3,227 $ 3,171  (385) (328) (455); (398)  (62). 266  70 132  167 270 (98) (325) (325)  Capital Projects From Capitall Improvement Plan (1,596)! (1,596) (127),  $ $ 455  $ 398 $ 132 $ 398 (266). (132)  $ $  $ 455 $ 398 $ 132 $  $  $ 3,543 $ 3,601 $ 3,413 $ 3,385 $ 3,227 $ 3,171 1.10 1.10 1.10. 1.10 1.24 1.39,  [ The City established ar rate stabilization fund to effectively manage additional fund balance and tol help meet the minimum debt service coverage requirement. The rate stabilization fundis is utilized tor meet the minimum' debt service coverage requirement through FY 2025. The sewer system is able to meet the minimum debt service  coverage requirement without utlizing the rate stabilization funds startingi inf FY 2026.  44/Page    Cityof FARMERSVILLE CALIEORHA  Figure 4  Projected Operating Results Under Proposed Rates ($1,000s)  $700 $500 $300 $100 $100 $300 $500  1 -  Exisling Proposed 2024  2025 Wastewater  2026  2027  2028  2024 Water  -Combined  45IPage    Cityof FARMERSVILLE EPORNIA  Section 6- Conclusions and Recommendations  6.1 Disclaimers  6.1.1  General Disclaimer  Ini the development of the proposed user rates and charges, certain historical reviews and analyses have been performed, together with the application of assumptions based on prudent financial, operational, and ratemaking relationships. The cost criteria and customer usage characteristics associated with general ratemaking procedures are representative of In the preparation of the rate study, certain assumptions have been made with respect to conditions that may occur in the future. While it is believed that these assumptions are reasonable for the purpose of this update, they are dependent upon future events and actual conditions may differ from those assumed. In addition, the study has used and relied upon certain information that was provided by other parties not associated with Willdan. Such information includes, among other things, the City's audited financial statements, annual operating budgets, periodic reports, and other information and data provided by the City, its independent auditors, and other sources. While the sources are believed to be reliable, there has been no independent verification of the information, and no assurances are offered with respect thereto. To the extent that future conditions differ from those assumed herein or provided by others, the actual results may vary from those projected. Unless the City of Farmersville, California (the "City") has a written engagement from Willdan Financial Services ("Willdan") for municipal advisory services, Willdan is not advising or recommending any action be taken by the recipient of this information with respect to any prospective, new, or existing municipal financial products or issuance of municipals securities (including with respect to the structure, timing, terms and other similar matters concerning such financial products ori issues). The City shall discuss any such information and material contained in Willdan's work product with any and all internal and/or external advisors and experts, including its own municipal advisor, that it deems appropriate before acting on the For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cash-flow analyses, feasibility studies and/or other analyses Willdan may provide the City with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the City, (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the Cily.inconjunction with such ofi its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no Circumstances shall Willdan be asked to provide, nor shall it  averages and are not intended asi indicators of any individual customer.  6.1.2  Municipal Advisory Disclaimer  information and material.  46/Page    Cityof FARMERSVILLE CALDRNIA  provide, any advice or recommendations or subjective assumptions, opinions or views with respect tot the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any  revisions or amendments thereto. 6.2 Conclusions  As previously addressed, the purpose of this study is to provide areview of the City'sexisting utility rates to determine if rate adjustments are necessary to meet the budgeted and/or projected financial needs in future years. This Report is the result of the collaborative efforts ofr representatives from both the City and Willdan. City staff were diligent and cooperative int their efforts toe ensure the availability and quality ofsource data ont financial and operating matters. Based on the reviews, analyses and assumptions discussed herein, it is concluded  that:  1. The proposed user rates and charges are anticipated to generate sufficient revenues to meet the revenue requirements of the system based upon the projected expenditures, transfers, customers, and billable flows estimated for the Test Year. The proposed rates are based on an assumed implementation date of May 1, 2024 (or other such date as determined by the City). To the extent that thei implementation dateis is postponed, additional rate adjustments and/or appropriations from existing reserves may be necessary. 2. The estimated revenues and resulting rate adjustments for the remaining years of the Projection Period beyond the Test Year are developed based on the customer growth assumptions generated from the historical analyses and discussions with City staff. If the customer growth projections are not realized, Customer growth for the water and sewer systems is projected based on historical customer data as provided by the City as well as discussions with the City staff regarding developer activity and anticipated construction. Ifit turns out that the customer growth assumptions are not realized, the resulting 4. The projection of billable water and sewer flows is based on historical trends regarding the average flow per user for each customer class. The average water and sewer flow per account is developed from historical customer data and is assumed to remain relatively constant for the Projection Period. The historical billing data provided by the City was utilized toi identify the average flow statistics for system customers. For the analyses developed herein, iti is assumed that the average usage statistics for the Projection Period will be consistent with recent historical average usage levels as realized in recent years, or as otherwise assumed based on discussions with: staff. When applying the estimated average usage statistics, it is assumed that the water and: sewer  additional rate adjustments may be necessary.  3.  revenues could be different than projected.  47Page    Cityof FARMERSVILLE CAETEORNTA  sales will increase with the estimated growth in customers. However, itis important to note that annual variations in rainfall and other climatological factors may influence the level of future water demands and the Future capital improvement projects are assumed to occur as reported by the City ini its CIP. To the extent that the timing of such projects may change from that estimated herein, the cost of such projects and resulting impact on future 6. The proposed rates and rate: structure are consistent with industry standards for rate-setting practices, comply with Proposition 218 and conform to the City's  accompanying billable sewer flows fori the City.  5.  rates and charges may vary from those indicated.  financial policies with respect to: a. Equitably recovering costs;  b. Being based upon the proportionate cost of providing services; and :. Generating sufficient revenue to recover system revenue requirements, meet debt service coverogerequremens, fundo capital needs, andmeet  reserve requirements.  6.3 Recommendations  Based on the reviews, analyses and assumptions addressed herein, as well as the resulting conclusions provided above, it is respectfully recommended that the City:  1. Adopt the proposed water and sewer rates.  2.  Enact the proposedi rates tol become effective as of May 1,2 2024 (or other such date as determined by the City). Based on the timing of the project and the required public hearing notice procedures, it is expected that the effective Readdress the cost-of-service analysis portion of this study every three to five years to ensure costs are recovered consistent with cost-of-service principles  date will occur on the recommended date.  3.  and customer characteristics.  We appreciate the opportunity to be of service to the City in this engagement. In addition, we would like tot thank City staff for the valuable assistance provided during the completion  of the rate study. Respecffully Yours, WILLDAN FINANCIAL SERVICES  48Page    APPENDIX  DETAIL FOR THE COMPREHENSIVE WATER &  SEWER UTILITY RATE STUDY  CITY OF  Cityof  FARMERSVILLE CALIFORNIA  FARMERSVILLE  COMPREHENSIVE WATER & SEWER UTILITY RATE STUDY FOR THE  CITY OF FARMERSVILLE, CALIFORNIA  WWILLDAN    APPENDIXA  Revenue Requirement  from User Rates    a  N    APPENDIXB  Water Cost-ot-Service  Analysis    .E88E858, 88888  688 E8889-  E E N  8898    0o  00    N  6    6   6A  $  N  398PEPRERRE    3  A  $  N    6 6  Ne  10    Navigation  APPENDIX-B CITY OF FARMERSVILLE, CA  Water Rate Design and Revenue Requirement Check- Test' Year FY2 2024  Single-Family Residential Rates Cost of Service Component  $948,266  Service Charge, $ perE Bill Rate  Units Revenue 0 $0 1,473 430,880 1,085 317,383 0 0 1 1,560 0 0 0 0 0 0 0 0 0 0  0.625 $ 0.75 1.00 1.50 2.00 3.00 4.00 6.00 8.00 10.00  24.38 24.38 24.38 81.26 130.01 243.77 406.28 812.55 1,300.08 1,868.87  Total Service Charge Revenue Volume Charge Revenue tob be Recovered  $749,824 $198,443 Rate Revenue $109,686 88,757 $198,443 $0 $283,266  % Volume in Block 72.7% 27.3% 100%  Billed Cumulative Volume Factor 339,556 1.00 $ 127,799 2.15 $ 467,355 614,322  Volume Rate 0.3230 0.6945  Block  15 HCF 15 HCF  AlI Over Total Factor Adjusted Flow Annual Surplus/Deficiency),  AIIC Other Classifications Rates Cost of Service Component  Service Charge, $p per Bill Rate  Units Revenue 0 $0 117 34,225 30 14,626 16 15,601 49 76,445 5 14,626 10 48,753 1 9,751 0 0 0 0  0.625 $ 0.75 1.00 1.50 2.00 3.00. 4.00 6.00 8.00 10.00  16.25 24.38 40.63 81.26 130.01 243.77 406.28 812.55 1,300.08 1,868.87  Total Service Charge Revenue Volume Charge Revenue tot be Recovered  $214,026 $69,239 Rate Revenue $69,239 $69,239 $0  % Volume in Block 100.0% 100%  Billed Cumulative Volume Factor 142,018 1.00 0 142,018 $948,266 $283,266 1,231,532  Volume Rate 0.4875  Block  AIIFlow Total Factor Adjusted Flow Annual Surplus/Deficiency) Customer Class Single-Family Residential All Other Classifications  HCF  VaranceFrom COS Percent Variance $0 0 0  Proposed FY2022COS $948,266 $283,266 1,231,532  0.00% 0.00% 0.00%  B-7    APPENDIXC  Sewer Cost-ot-Service  Analysis    Navigation  APPENDIX-C CITY OFF FARMERSVILLE, CA Calculation ofF Fixed Charge Rates/ Revenue Sewer FY2024  Sewer Inside  Single-Family Units Units Units 2,424 419 109  Class-> Residential Apartment Commercial Government  School Units  Church Units Total 15 2,979  Meter Size Billing Basis-> Units AIIO Customers  C-1    Navigation  APPENDIX-C CITY OF FARMERSVILLE, CA Units  Customer Account & Stength Characteristics by Customer Class Sewer FY 2024  Total Total CCF BOD BOD TSS TSS Bills Flow Factor" Pounds Factor" Pounds  Residential Classes RI Single-Family Residential Apartment Non-Residential Classes PI Commercial Class Commercial Government Church Sub-Total Commercial Schools Schools Total Notes:  2,424 29,088 309,237 419 5,028 38,367 109 1,308 27,601 3 36 692 130 15 180 175 127 1,524 28,468 9 2,979 35,748 394,032  250 482,281 250 482,281 250 59,837 250 59,837 481 110,721 380 87,472 751 100 577 175 255 175 255 111,727 88,305 668,409 641,625  108 17,959 130 14,565 100 11,204  (1Average strengthf factors for BOD and TSS are! based ont the State Water Resources Control Board Revenue Program Guidelines, Appendix G. [2JA Assumed annual residential sewer flows were calculated by takingt the average winter consumption fort thel lowestt three months oft ther most recent fullf fiscaly year of water customer data provided,t then determining thef factor oft thev winter average usaget tot thet totala annual averager monthly water usage fort ther mostr recentf fullf fiscal year ofw water customer datap provided. This factor wast then appliedt tot thep projected monthly average' "Test) Year"  waterf flowst tod determinet the" Test) Yea" annual sewerf flows. [3JA All non-residential fiow wasp providedf froms sewerb billing data.  C-2    ?  3285E98RR R8a    4  6  6A  a 3    -  6 6    Co    CITYOF  FARMERSVILLE  FARMERSVILLE  TEGAI NCOREO  CITY  HALL  WILLDAN 273681 Vial Industria, Suite 200 Temecula, CA92590 800.755.6864 I Fax:8 888.326.6864 www.wildon.com    a  -  3  -  -  C @ 0 E E E C N O    I  8  8  1S 8 8 8 I  - C - f  - S 8 O 5 D $ O a D  8  I  3 E e  @ @ 8 0  O 8   o 8  @ 0 ) O a ) O  I  8 f t  I  5 8 0) 8 @ > 8 @  9 I  O £  e  LL  N  I 1    O  - /  e E @ 6 e 3 I  ) D  - 0  C 0 O - @ O S I  - @ à S - 8  @ à S I I 8 I  n O - I @ = 0 3 i - C @ E 1S à C 6 X t 0  3  E @ I  o O I  € 3 @ Q  0 Q 8 0 8 e 0) 8 0 : €  o L 0) D 0  I  8 8 0) I I  f S t Q D @ 0 1 @ U D 9 @ C 0) 0 O 9 I O S I  6 - @ @ C E e O a 0) O @  O    0  @ - O - &  8 o de 8  - 0       B o C o 8 e  I  C a  8  @  o  -  a  3  &   0  € 4      1 o L à  2  8 86 00 13 00  SUOIIW  f    6  3 @  A U e  9  8 o d0 d0 5 SUOIIW    $  -  6  6.88 888881  0:00000  0 E   6  E  a    A  6  S N  V  3 @ a  3V  a  00,00000  E  e E  o    0 @  D >  5  D  a  a  3  8  0  D 8 e  E  E B  e 3 C &  C de C  :  I  $  6 8 9 6 de 8  O 9 E a O e 1 )  E    $ $ $   $ - 3 o. 0 6 $, o 35 $ 6 o 33 $ 6 4 o $A 6A  6 6 $ $ 9 $ $ A  $, 6. 0 0 A  %  $  $A  $ $  4 6, $ $. $ $ $ $ $A  $  6 6  2  A  -    - . 00 8 $A $ 6 4A  / 9  8 6A - f 6A C 4 6 $A 3 6A E 6A 8 1 6A  8 6A 6A 6A 3 $ 6A $ d do 0 6 85 D $ 6A 6.    3 0 o 6 3  69 6 6A- $A-  o 6  0  6 6- 6A- 6  4 de 6- 6A 6A 6A- 0 : ls $ $ 6 6  a  $ $A 6A a o. 3 $A 6 6A 8 88 & - 6A 6A, $  0 @ de  = 0 N    6A $  - SS - -  - a 8    8 6 8 6 4 / 7 3 66 $ 6 6A 0 0 ) 8 6A 8 3 6A  3  $ $A $A 6  6A $ $ & 88 3 ai 6 6A 5 35 $ AA 5 9 3 88 $ 6A $ 8 8 a 6A 696 /  6 $ 6-  5  6A6A 6A $A- 8 3  - - 5 > -   $ 6 $ $  5) I  6A $: 6A $  6A  6 6 $  - a -  -  8    e  3  I  3 6 3  6  41    5  3   C  5  -  a  e)  N     8003  V M  E  5  0 00 10  suOyIW    3 U C a  E  I  a  0 - d0 0 0 W 6 S i f SUOIIW    8  )  D > 0 C C 0 D S  2 a  2 9 9  V  -  0 6 C    L A  L N    I  S B  e S N 8 8  6  - -  e  E 5 @ E  6  L 6 e 8  - Z  3 a - O  8  0)  8 t  - n 0 9  8 E  O  C 5 de 9  a  0O a  I  E o I  9  - )  8 3  @ S  o N  -  - -  O  O    A) -  n  O C o    CITYOF FARMERSVILLE,  Farmersville City Council Regular Meeting  Tina Hernandez, Mayor Danny Valdovinos, Mayor Pro Tem Gregorio Gomez, Council Member Paul Boyer, Council Member Armando Hinojosa, Council Member  Monday, January 22, 2024 6:00 PM Meeting held in Civic Center Council Chambers 909' - W. Visalia Road Farmersville, California  Pending no technical difficulties, the City Council meeting will also be streamed  (for observation only) via Zoom and accessed as follows:  Please dial 1-669-900-6833 Meeting ID: 856 6245 6860 Password: 710665  1. 2.  Call to Order: 6:00 pm. Roll Call: Attendee Name Tina Hernandez Danny' Valdovinos Greg Gomez Paul Boyer Armando Hinojosa  Title Mayor Mayor Pro Tem Council Member Council Member Council Member  Status Present Present Present Present Present  Arrived 6:00 pm 6:00 pm 6:00 pm 6:00 pm 6:00 pm  3. 4. 5.  Invocation: Mayor Hernandez  Pledge of Allegiance: Mayor Pro Tem Valdovinos  Public Comment:  Provides an opportunity for members of the public to address the City Council on items of interest to the public within the Council's jurisdiction and which are not already on the agenda this evening. Itis the policy of the Council not to answer questions impromptu. Concerns or complaints will be referred to the City Manager's office. Speakers should limit their comments to not more than two (2) minutes. No more than twenty (20) total minutes will be allowed for Public Comment. For items which are on the agenda this evening, members oft the public willl be provided an opportunity to address the council as each item is brought upi for discussion. Comments are to be addressed to the Council as al body and not to any Brian Thoburn from Southern California Edison thanked the City of Farmersville for their continuous support. During the Council meeting, he provided an update on upcoming projects, particularly addressing the non-functional streetlights along Farmersville Blvd. Mr. Thoburn informed the Council that the repair process might be extended for some  individual Council Member.    streetlights due to cable failures. To address the lighting issue promptly, Southern Califomia Edison is exploring the option of deploying temporary lights until the The coaches of the Farmersville Youth Cheer shared concerns about the challenges they are encountering in raising funds for their cheerleaders. They desired better alignment between their fundraising initiatives and the City's support. The coaches requested that the City consderacommodaling theirfundraising ideas to facilitate a Don Goforth from Crown Valley Youth Ranch delivered a presentation on the services offered to. youth. The Ranch supports individuals aged 6-18 through personalized 1-on- 1n mentorship, instilling work ethics, and engaging in extracurricular activities such as horseback riding, gardening, fishing, and more. Notably, it was emphasized that these Jose Prado of 1915N. Virginia Ave inquired about the completion date of the new park. Additionally, he expressed. interest in the possibility of installing a soccer field ift the existing baseball fields will be removed someday, with the intention of utilizing the  necessary cable repairs can be completed.  smooth fundraiser.  services are accessible to all youth.  existing field lights for soccer activities.  6.  Presentations:  A. Downtown Specific Plan: Analysis of Road Diet and Streetscape A representative from Ruettgers & Schuler conducted a presentation on the Road Diet for Downtown Farmersville. During the presentation, the speaker outlined the potential impacts on the community, specifically addressing concerns related to traffic, parking,  Concept for Farmersville Blvd. in the Downtown  travel, and pedestrian considerations. Discussion took place. and Police Department.  Mayor Pro Tem Valdovinos has concerns that it will affect response time from the Fire Councilmember Boyer expressed apprehensions about the potential impact on residential side streets, anticipating changes in traffic patterns as drivers seek alternative routes to avoid slower traffic resulting from the reduction in lanes. Additionally, he voiced concerns about the potential adverse effects on businesses, particularly regarding customer accessibility; he has concerns that customers may encounter difficulties entering and exiting businesses under the proposed changes. Mayor Hernandez is in favor of the Road Diet, stating that it gives a more Downtown"  feel.    Councimember Gomez supports the Road Diet concept. Furthermore, he highlighted that the Fire Department would be relocated to Front Street, alleviating any concerns he The Council has requested larger drawings of the proposed, plan and has expressed a desire for a work session to conduct a thorough review and gather additional information. Additionally, the Council seeks more input from the businesses that would be affected and wishes to involve residents in the decision-making process.  might have had about potential impacts on response times.  7.  Consent Agenda:  Under a CONSENT AGENDA category, a recommended course of action for each item is made. Any Council Member or Member of the Public may remove any item from the CONSENT AGENDA in order to discuss and/or change the recommended course of action, and the Council can approve the remainder of  the CONSENT AGENDA.  A. Authorization to waive full reading of ordinances and resolutions and  to identify by title only.  Recommend that the City Council approve the full reading of all ordinances and resolutions be waived and to identify by title only. B. Minutes of Regular City Council Meeting of January 8, 2024  Recommend approval of minutes.  Documents: Draft Action Minutes of. January 8, 2024  C.  Finance Update for November and December 2023: Warrant Register  and Investment Summary Recommend that the City Council:  1. Approve the Warrant Register as presented for the period. This reporting period represents warrants issued for the current Fiscal Year (2023/2024); 2. Accept the Investment Summary as presented for the period. This reporting period represents investment summary for the previous month. Documents: November & December 2023 Warrant Register  and  Investment Summary November & December 2023  D. Adopt Ordinance 521 amending the existing zoning designations for the Kaweah Pointe residential development project pertaining to 37t acres of land on the north side of Visalia Road, west of the Virginia Avenue alignment, proposing 151 single family residential lots, 3.7t acres of parkslopen space, 1.4-acres of land zoned for future multi-  family residential development    Recommend that the City Council adopt Ordinance 521 amending the  existing zoning designations for the site. Documents: Ordinance 521  E. Adopt Ordinance 522 approving a zone change for the Gardenia Courtyards multi-family residential and commercial project pertaining to 6.6t acres of land on the east side of N. Farmersville Boulevard, north of Walnut Avenue, proposing 82 multi-family residential units, and 2.7tacres of land zoned for future commercial Recommend that the City Council adopt Ordinance 522 approving az zone  development change for the site.  Documents: Ordinance 522  F.  Adopt Ordinance 523 to regulate the development of Accessory Dwelling Units (ADU's) and Junior Accessory Dwelling Units  (JADU's)  Recommend that the City Council adopt Ordinance 523, an amendment to Title 17 (the Zoning Ordinance) of the Farmersville Municipal code to establish standards to regulate the development of Accessory Dwelling Units (ADU's) and Junior Accessory Dwelling Units (JADU's).  Documents: Ordinance 523  G. Designation of Applicant's Agent Resolution for Non-State Agencies Recommend that the City Council designate the City Manager to be the Authorized Agent to complete and submit forms to engage with FEMA and  CalOES for grant funds.  Documents: Designation of Applicant's Agent Resolution for Non-  State Agencies  Councimember Boyer abstained from warrant register items from Self Help and  Kiwanis. RESULT MOVER AYES ABSENT ABSTAIN  Motion to approve as presented.  APPROVED (UNANIMOUS) Councilmember Gomez  SECONDER Mayor Pro Tem Valdovinos  Hernandez, Valdovinos, Gomez, Boyer Hinojosa Councilmember Boyer on Warrants to Self Help and Kiwanis.  0    8.  General Business  A. Potential City Development Adjacent to Linnel Farm Labor Center  Recommend that the City Council receive the information contained in this report regarding interest in development adjacent to the Linnel Farm Labor  Center and provide comments and direction to staff.  City Planner Karl Schoettler delivered a PowerPoint presentation addressing the interest in development near the Linnel Farm Labor Center. A. key focus of Mr. Schoettler's discussion was the proximity of the wastewater treatment plant at Linnel Farm Center to potential residential areas. He. highlighted that the City had previously  discussed this matter but abandoned it due to various concerns. There were several concerns and comments from the Council.  The Council directed the staff to contact the Developer and facilitate communication with the Housing Authority to explore potential measures for mitigating concerns related to the sewer plant. They also requested the developer conduct an environmental review  to address odor issues, given the location.  9. Council Reports  A. City Council Updates and Committee Reports  Councilmember Hinojosa inquired about cleaning the benches inside the City Museum. Councimember Boyer provided an update on the status of the chimes at the Clock Mayor Hernandez inquired about the feasibility of ordering Polo shirts with the City logo for the Planning Commissioners. City Manager Jennifer Gomez expressed her concerns  He also asked about a sign for Roy's Park.  Tower in the City of Lindsay.  about allowing the Planning Commissioners to wear City logo shirts.  10. Staff Communications:  City Manager Jennifer Gomez advised the Council about the Compost Giveaway. She also informed the Council that the City recently had an emergency purchase of a Bucket Lift Truck. The Public Works Director advised the Council that our current Bucket Lift Truck needs maintenance. However, the manufacturer is no longer in business, making getting parts complicated. After having a meeting with the Finance Director. and City Manager, the decision was made to purchase a new Bucket Lift Truck. Public Works Director. Jeff Dowlen talked about the free compost, stating that the State mandates the, purchase of compost through Cal Recycle. Mr. Dowlen also told the Council that local farmers can purchase the compost, and Cal Recycle will provide the City with credit. Furthermore, he updated the Council on ongoing projects, including installing curb and gutter, electrical, and irrigation work at Roy's Park.    Battalion Chief Thomas informed the Council that Code Enforcement is currently taking  their first module class, which is certified by the State.  11. Future Agenda Items  1. Amend Ordinance - Temporary Outdoor Use Permits 2. Review of Cannabis Cultivation 3. Site Visits to Woodlake, Exeter, and Lindsay 4. Water Restrictions 5. Update City Ordinances related to Code Enforcement 6. Reopening Two-way Traffic on E. Citrus at Freedom Drive 7. Transit Services with Visalia Transit and TCRTA  12. Adjourn to Closed Session:  Mayor Hernandez adjourned to closed session at 7:45 pm.  A. PUBLIC EMPLOYMENT Title: City Attorney  Pursuant to Government Code Section 54957  13. Reconvene to Open Session:  Mayor Hernandez reconvened to open session at 8:55 pm with nothing to report.  14. Closed Session Report (if any):  15. Adjournment:  Mayor Hernandez adjourned the meeting at 8:55 pm.  Respectfully submitted,  Rochelle Giovani, City Clerk  Strong Roots..-Growing Possibilities    CITYOF  FARMERSVILLE  City Council  Staff Report 7C  TO: FROM: DATE:  Honorable Mayor and City Council Jennifer Gomez, City Manager February 12, 2024  SUBJECT: Notice of Completion of the Farmersville ADA Improvements Project  RECOMMENDED ACTION:  Itis recommended that the City Council accept the Farmersville ADA Improvements Project, and the City Council authorize the City Manager sign the Notice of Completion and the City  Clerk file the Notice of Completion with the County Clerk's office.  BACKGROUND and DISCUSSION:  Clean Cut Landscape Inc, the contractor on the project, began construction on September 18, 2023, and completed the work on February 5, 2024. Work involved demolition, clearing and grubbing, grading, concrete and pavement improvements, fence relocations, SD installation, pavement delineation, mitigation measures, and clean up. Completion was delayed due to the The project had four (4) change orders that included: Revision in Bid quantity amount to reflect reduction in scope of removing Shasta Drive Improvements from the project plans. Additional demolition and improvements that were required at Kern/Dode, Shasta/Dode and Shasta/Fresno to maintain ADA compliance. Retesting for failed compaction test resulting in a credit. Removal of scope associated with bid item #17- Signing, Striping and Markings  required timeframe to complete all necessary paperwork.  modifications.  Base Contract Amount: Change Order 001-004: Final Contract Sum:  $250,749.50 ($90,586.78) $160,162.72  FISCAL IMPACT:  This project was funded by Measure Q.  ATTACHMENTIS): Notice of Completion    RECORDING REQUESTED ANDI RETURNT TO: City ofFarmersville 909 W. Visalia Road Farmersville, CA 93223 FREER RECORDING: Govt. Code6 6103  NOTICE OF COMPLETION  NOTICEI ISI HEREBY GIVEN:  1. That the City of Farmersville, California, al Municipal Corporation, whose address is 909 West Visalia Road Farmersville, California, is the owner of thet real property, public works or structure hereinafter described. 2. That on the Sth day of] February 2024, a work ofi improvement on real property hereinafter described was completed pursuant to a contract to which Division 2,1 Part 3, Chapter 1, Article 4, oft thel Public Contract Code applies. 3. Thatt the name ofthe contractor whoy performed: said work ofi improvement; pursuantt tos such contract witht the City of Farmersville is Clean Cut] Landscape Inc., whose address is 1990 N. Fowler Ave #116, Clovis, CA 93619 and that Everest  Reinsurance Company is the surety on said contract. Farmersville ADA Improvements.  4. That the real property or public work or structure: is described as follows: 5. That the Nature oft the owner's interest or estate is: In Fee  Dated:  Cityof Farmersville Al Municipal Corporation Jennifer Gomez, City Manager  By:  STATE OF CALIFORNIA) COUNTY OF TULARE )  )ss  The undersigned being duly sworn says: That she is the City Manager of the City of Farmersville, al Municipal Corporation, and gives notice for ando on behalfofsaid Municipal Corporation, that shel has read the foregoing notice andl knows  the contents thereof, and the same is true ofh her own knowledge.  By:  EgnyteDrivelProjectsProecis2022920372/CONSTRUCTION/MGMIIContractsINOC220372-Notice ofComp.Drafl.doc    AN Notary Public or other officer completing this certificate verifies only thei identity of the individual who signed the document to  which this certificate is attached, and nott the truthfulness, accuracy, or validity oft that document.  STATE OF CALIFORNIA) COUNTY OF TULARE )  )ss  Subscribed ands sworn or affirmed to before me ont this  day of  by_  who proved to me on the basis ofs satisfactory evidence to be the person(s) who appeared before me.  Notary Public in and for the County of Tulare, State of California  Commission Expiration) Date  Attached to Notice of Completion for FarmersVille ADA Improvements Project:  (Insertr name ofp project onl line above)  EgnyteDrivelProjectsiProecis20222022220372CONSTRUCTION/MGMT.COntractsINOC220372-Notice ofComp.Drafl.doc    CITYOF  FARMERSVILLE  City Council  Staff Report 8A  TO: FROM: DATE:  Honorable Mayor and City Council Jennifer Gomez, City Manager February 12, 2024  SUBJECT: Cooperative Agreement between the City of Farmersville and the County of  Tulare for Avenue 280 Widening Project - Segment2 2  RECOMMENDED ACTION:  Itis recommended that the City Council authorize the City Manager to sign the Cooperative  Agreement.  BACKGROUND and DISCUSSION:  This agreement outlines the roles and responsibilities of the County of Tulare and the City of Farmersville to achieve the widening of Avenue 280 and other related improvements as identified by the Tulare County Association of Government's (TCAG) Regional Transportation improvement Program and the City's General Plan Circulation Element. This project will widen Avenue 280 between Lover's Lane in Visalia and Virginia Avenue in Farmersville in order to South Virginia Avenue will also be realigned at' Visalia Road in order to align with ai future street in the Kaweah Pointe subdivision to create a safer intersection. Additionally, a storm basin will be constructed on the south side of Visalia Road next to South Virginia in lieu of al large storm basin that was originally proposed to be located north of Visalia Road in the Comprehensive Ina addition to these improvements, the City has requested that the County also install water and sewer infrastructure during their widening project that will support the future development of the Kaweah Pointe subdivision to be built on the north side of Visalia Road (Avenue 280). With the widening project scheduled to be completed first, no one wants to see a newly constructed street to be ripped up shortly thereafter to install utilities for the subdivision. The City will be seeking reimbursement from the parties that will benefit from the utility extensions as this area  increase mobility, reduce congestion, and improve traffic flow.  Infrastructure Master Plan.  gets developed.    FISCAL IMPACT: and Sewer funds. ATTACHMENT/S): Cooperative Agreement  The cost estimates to reimburse the County is $476,101.00 and will be funded from the Water    COOPERATIVE AGREEMENT AVENUE 280 WIDENING PROJECT-S SEGMENT2  for  This Cooperative AFeICACREMENT? is made and entered into this  day  of  2023 by and between the COUNTY OF TULARE (hereinafter referred  toas" "COUNTY"), and the CITY OF FARMERSVILLE (hereinafter referred to as "CITY")for the Avenue 280 Widening Project - Segment 2 (herein referred to as PROJECT").. An individual signatory agency in this AGREEMENT is referred to as "PARTY." Collectively, the signatory  agencies in this AGREEMENT are referred to as "PARTIES."  RECITALS  WHEREAS, the Tulare County Association of Governments identifies the widening of the Avenue 280 corridor as a component of the Regional Transportation Improvement Program;  and  WHEREAS, PARTIES recognize the need to widen the Avenue 280 (Visalia Road)  corridor toi increase mobility, reduce congestion, and improve traffic flow; and WHEREAS, COUNTY is the lead agency for the PROJECT; and  WHEREAS, a portion of the PROJECT is part of the current CITY General Plan Circulation Element, the PROJECT matches the street improvements at the PROJECT limit within the CITY at Virginia Avenue, and by this AGREEMENT CITY is stating that it intends to cooperatively work with COUNTY to fulfil CITY street improvement goals; and  WHEREAS, PROJECT is of general interest to PARTIES and a portion of PROJECT is WHEAREAS, Avenue 280 (Visalia Road) from Road 140(Lovers) Lane)toapproximately 1,325 feet East of Road 156 (Mariposa Avenue) is located within COUNTY'SJURSIDICTION  within each PARTIES' geographic boundaries; and  (limits shown on "Exhibit A"); and  WHEAREAS, Avenue 280 (Visalia Road) approximately 1,325 feet West of Road 160 (Virginia Avenue) is located within CITY'S. JURSIDICTION (limits shown on "Exhibit A");and WHEREAS, COUNTY is lead agency for the design and construction management of WHEREAS, PROJECT is scheduled for construction in fiscal year 2024/2025 and CITY will continue to operate and maintain the roadway system within CITYSJURISDICTION upon  PROJECT; and  PROJECT completion; and  Tulare County Agreement No.    WHEREAS, this AGREEMENT provides the framework for the collaboration between COUNTY and CITY defining the terms, conditions, and responsibilities of each PARTY for the  design and construction of PROJECT; and  WHEREAS, PARTIES are authorized to enter into this AGREEMENT per the California Government Code sections 6500 and 23004, ets seq., andt the California Streets and HighwaysCode NOW,THEREFORE, it is mutually understood and agreed by PARTIES as follows:  sections 1685 and 1803; and  ARTICLE1. DEFINITIONS  A. CEQA (California Environmental Quality Act) is the act (California Public Resources Code, sections 21000 et seq.) that requires state and local agencies to identify the significant environmental impacts oft their actions and to avoid or mitigate those significant B. CONSTRUCTION, as referred to in this AGREEMENT, is the project phase of completing the construction of PROJECT. Work includes, but is not limited to, construction contract administration, construction inspection, materials testing, construction survey, traffic detour, construction engineering, utility relocation, changes and modifications of plans and specifications for PROJECT necessitated by unforeseen or unforeseeable field conditions encountered during construction of! PROJECT, construction contingencies, and all other necessary work after advertisement of PROJECT for construction bids to cause PROJECT to be constructed in accordance with said plans and IMPLEMENTING AGENCY, as referred to in this AGREEMENT, is defined as the PARTY responsible for managing the scope, cost, and schedule ofap project phase to ensure D.J JURISDICTION, as referred to in this AGREEMENT, is defined as the area within the geographic boundary of CITY and the unincorporated areas ofCOUNTY. E.N NEPA (National Environmental Policy Act) is the act that requires federal agencies to assess the environmental effects oftheir proposed actions prior to making decisions. F.N NOTICE OF COMPLETION, as referred to in this AGREEMENT, is defined as G. PRELIMINARY ENGINEERING, as referred to in this AGREEMENT, is the project phase consisting of the preparation of plans, specifications, and cost estimates for PROJECT. Work includes, but is not limited to, topographic survey, environmental surveys and document preparation, hydraulics analysis, soils report, traffic index and  impacts, iffeasible.  specifications approved by PARTIES.  completion of said phase.  COUNTY acceptance of construction work for the PROJECT.  Tulare County Agreement No.    geometric investigations, civil and structural design, utility engineering, and all other necessary work prior to advertisement of PROJECT for construction bids. H. RIGHT-OF-WAY, as referred toi in this AGREEMENT, is defined as thej project phase of  acquiring real property interests for PROJECT.  ARTICLE2. COMPLETE AGREEMENT  This AGREEMENT, including any attachments incorporated herein and made applicable by reference, constitutes the complete and exclusive statement of the term(s) and condition(s) of this AGREEMENT between PARTIES and supersedes all prior representations, understandings, and communications between the PARTIES relating to the subject matter of this AGREEMENT. The invalidity in whole or in part of any term and condition of this AGREEMENT shall not affect the validity of other term(s) and condition(s) ofthis AGREEMENT. The above referenced Recitals are true: and correct and  incorporated herein by reference.  ARTICLE3. WAIVER  A. COUNTY's failure to insist on any instance(s) of CITY'S performance of any term(s) or condition(s) ofthis AGREEMENT shall not be construed as a waiver or relinquishment of COUNTY'S right to such performance or to future performance of such term(s) and condition(s), and CITY'S obligation in respect thereto shall continue in full force and effect. Changes to any portion oft this AGREEMENT shall not be binding upon COUNTY except when specifically confirmed in writing by an authorized: representative OfCOUNTY by way of a written amendment to this AGREEMENT and issued in accordance with the B. CITY'S failure to insist on any instance(s) of COUNTY'S performance ofany term(s) or condition(s) ofthis AGREEMENT shall not be construed as a waiver or relinquishment of CITY'Sright to such performance or to: future performance ofs such term(s) or condition(s), and COUNTY'S obligation in respect thereto shall continue in full force and effect. Changes to any portion ofthis AGREEMENT shall not be binding upon CITY except when specifically confirmed in writing by an authorized representative of CITY by way of a written amendment to this AGREEMENT and issued in accordance with the provisions of  provisions oft this AGREEMENT.  this AGREEMENT.  ARTICLE4. SCOPE OF AGREEMENT  This AGREEMENT specifies the roles and responsibilities ofthel PARTIES as they pertain to the subjects and projects addressed herein. PARTIES agree to cooperate and coordinate with the other in all activities covered by this AGREEMENT and any amendments to this  AGREEMENT.  Tulare County Agreement No.    ARTICLE5. RESPONSIBILITIES  A. Environmental Findings and Approvals/Permits  a. COUNTY is the CEQA Lead Agency and Caltrans is the NEPA Lead Agency for b. CEQA and NEPA documentation for the PROJECT are complete. The Final Environmental Impact Report (CEQA) was approved in May 2012, and the Environmental Assessment with Finding of No. Significant Impact (NEPA) document was approved in August 2012. COUNTY will revalidate CEQA prior to ( COUNTY will ensure that qualified personnel remain available to help resolve environmental issues and perform any necessary work to ensure that the PROJECT d. CITY will review, comment, and concur on all environmental documentation (including, but not limited to, studies, reports, public notices and public meeting materials, determinations, administrative drafts, final environmental documents, and revalidation) at appropriate stages of development prior to approval and public IfCOUNTY makes any changes to the environmental documentation, COUNTY will allow CITY to review, comment, and concur on those changes prior to the COUNTY'S (or Caltrans) approval at appropriate stages of development prior to IfCOUNTY makes any changes to environmental-related public notices (if any), then the COUNTY will allow CITY to review, comment, and concur on those COUNTY will attend all nyironmental-related public meetings (ifany). h. COUNTY is responsible for coordinating, obtaining, implementing, renewing, and/or amending the PROJECT's permits, agreements, and/or approvals whether they are identified in the PROJECT's scope of work or become necessary while  the PROJECT.  construction.  remains in environmental compliance.  availability.  public availability.  changes prior to publication and circulation.  completing the PROJECT.  B. Preliminary Engineering  a. COUNTY: is the PRELIMINARY ENGINEERING MPLEMENTINGAGENCY.  Tulare County Agreement No.    b. CITY will make available to COUNTY all necessary CITY regulations, policies, procedures, manuals, standards, plans, and specifications required for the COUNTY will prepare Utility Conflict Maps identifying the accommodation, protection, relocation, or removal of any existing utility that conflicts with d. COUNTY will determine the cost to positively identify and locate, accommodate, protect, relocate, or remove any utility facilities whether inside or outside the PARTIES' rights-of-way in accordance with federal and California laws and CITY will delegate authority to COUNTY to act on behalf of CITY on all utility Any necessary CITYr reviews of project studies, submittals, etc., shalll be completed within 21 days of COUNTY submittal. If a response is not received within this  construction of PROJECT when requested by COUNTY.  construction of the PROJECT.  regulations.  relocation related matters in CITY right-of-way.  time, CITY will be deemed to have completed its review.  C. Right-of-Way  a. COUNTY is the RIGHT-OF-WAY IMPLEMENTING AGENCY.  b. As RIGHT-OF-WAY IMPLEMENTING AGENCY, COUNTY is responsible for all RIGHT-OF-WAY work except those activities and responsibilities that are The selection of personnel performing RIGHT-OF-WAY work will be in d. If COUNTY acquires any RIGHT-OF-WAY within CITY'S JURISDICTION, COUNTYwill first acquire itini its ownr name. Title to thel AIGHT-OP-WAYwithn CITY'S JURISDICTION will ultimately be vested in the CITY. CITY'S acceptance of title will occur after Notice of Completion for the PROJECT is CITY agrees to accept those rights-of-way or easements that are acquired within the existing CITY limits and/or immediately adjacent to CITY limits including any F RIGHT-OF-WAY conveyances must be completed within 180 days after filing of the NOTICE OF COMPLETION unless PARTIES mutually agree to other  assigned to CITY.  accordance with federal and California laws and regulations.  recorded.  rights-of-way or easements required for drainage facilities.  arrangements in writing.  Tulare County Agreement No.    D. Construction  a. COUNTY is the CONSTRUCTION IMPLEMENTING, AGENCY.  b. COUNTY will advertise, open bids, award, and approve the construction contract in accordance with the California Public Contract Code, California Labor Code, COUNTY will not advertise the construction contract for PROJECT until CITY d. CITY will grant to COUNTY, at no cost to the COUNTY, permission to occupy or use public roads in CITY and any temporary RIGHT-OF-WAY that CITY owns or has an easement for, that is necessary for the construction of PROJECT. COUNTY will implement changes to the construction contract through change COUNTY will require the construction contractor to furnish payment and performance bonds naming COUNTY as obligee, and CITY as additional obligee, and to carry liability insurance in accordance with the PROJECT's specifications. Upon completion of PROJECT, CITY will operate and maintain at CITY'S expense, all improvements constructed as part of PROJECT within CITY'S h. - COUNTY will file the NOTICE OF COMPLETION upon PROJECT'S written acceptance by CITY and approval by COUNTY Board of Supervisors.  and Federal guidelines.  accepts the final plans, specifications, and estimate packages.  orders.  JURISDICTION.  ARTICLE6. FUNDING  As the lead agency, COUNTY will fund project in its entirety, excepting any work requested to be performed by the COUNTY on behalf of the CITY. CITY hereby agrees to reimburse the COUNTY for actual design and construction costs to extend existing sanitary sewer and potable water infrastructure as shown on Exhibit B (attached). The estimated costs are shown on Exhibit C (attached). Actual construction costs will be determined based on the actual installed quantity at the bid price for the sewer and water related work that were paid to the contractor. Design costs shalll be fixed at the cost: shown on Exhibit C. Upon PROJECT completion, the COUNTY shall invoice the CITY within six (6) months ofthe recorded Notice ofCompletion date fort thei improvements. TheCITY  shall pay the COUNTY within ninety (90) days of the invoice date.  Tulare County Agreement No.    ARTICLE7. NO RIGHTS IN THIRD PARTIES  Nothing in the provisions of this AGREEMENT is intended to create duties or obligations to or rights in third parties that are not parties to this AGREEMENT or to affect the legal liability of either PARTY to the AGREEMENT by imposing any standard of care with respect to the maintenance of the CITY's property different from the standard of care  imposed by law.  ARTICLE8. INDEMNIFICATION  A. Neither COUNTY nor any officer or employee thereof is responsible for any damage or liability occurring by reason of anything done or omitted to be done by CITY under or in connection with any work, authority, or jurisdiction delegated to CITY under this AGREEMENT. It is understood and agreed that, pursuant to Government Code Section 895.4, CITY shall fully indemnify and save harmless COUNTY and its officers and employees from all claims, suits or actions ofe every name, kind and description brought for or on account ofinjury (as defined by Government Code section 810.8)occurring' by reason of anything done or omitted to be done by CITY under or in connection with any work, authority, orj jurisdiction delegated to CITY under this AGREEMENT. B. Neither CITY nor any officer or employee thereofisresponsible for any damage or liability occurring by reason of anything done or omitted to be done by COUNTY under or in connection with any work, authority or jurisdiction delegated to COUNTY under this AGREEMENT. It is understood and agreed that, pursuant to Government Code Section 895.4, COUNTY shall fully indemnify and save harmless CITY and its officers and employees from all claims, suits, or actions of every name, kind and description brought for or on account. ofi injury (as defined by Government Code section 810.8) occurring by reason of anything done or omitted to be done by COUNTY under or in connection with any work, authority, or jurisdiction delegated to COUNTY under this AGREEMENT.  ARTICLE9. DISPUTE RESOLUTION  A. The PARTIES shall negotiate in good faith and attempt to resolve any dispute, controversy or claim arising out of or relating to this AGREEMENT (a "Dispute") within 30 days after the date that al PARTY gives written notice of such Dispute to the other PARTY. B. If, after such negotiation in accordance with subsection A., above, the Dispute remains unresolved, either PARTY may require that a non-binding mediation take place. In such mediation, representatives of the PARTIES with authority to resolve the dispute shall meet for at least two (2) hours with a mediator whom they choose together. The PARTIES shall  share the costs of the mediator equally.  Tulare County Agreement No.    ARTICLE 10. TERMINATION  This AGREEMENT shall terminate upon filing of the Notice of Completion, payment of final invoice, and transfer of RIGHT-OF-WAY to CITY, unless the PARTIES agree  through an amendment to this AGREEMENT to an extension oft time.  ARTICLE11. SEVERABILITY AND CONSTRUCTION  Ifany provision of this AGREEMENT is held to bei illegal, invalid, or unenforceable under present or future laws, such provisions shall be fully severable. This AGREEMENT shall be construed and enforced as though such illegal, invalid, or unenforceable provision had never comprised a part of this AGREEMENT and the remaining provisions of this  AGREEMENT shall remain in full force and effect.  ARTICLE 12. VENUE  This AGREEMENT shall be construed in accordance with the laws oft the State ofCalifornia without consideration of conflict of law principles. PARTIES agree to submit themselves to the JURISDICTION oft the court venue in COUNTY in any action relating to this AGREEMENT or  the enforcement ofinterpretation thereof.  ATNNN Section intentionally left blank A  Tulare County Agreement No.    IN WITNESS WHEREOF, the undersigned PARTIES have executed this AGREEMENT on the  day and year first written above:  CITY OF FARMERSVILLE Jennifer Gomez - City Manager  Date  By  ATTEST: Rochelle Giovani, Chief Deputy City Clerk ofthe City of Farmersville  By  Approved as to Form: City Attorney By_  COUNTY OF TULARE Chair, Board of Supervisors  Date  By_  ATTEST: JASONT T. BRITT County Administrative Officer/Clerk oft the Board ofSupervisors of the County ofTulare  By  Deputy Clerk Approved as to Form: County Counsel By_ Deputy Matter #  Tulare County Agreement No..    Exhibit A  City Limits Exhibit    vw/noovo M 969 AONRDV INSRDVNVK 40  AINNOO 3WVIAI 3 LNEDIS oaroud ONINIGIM 083 INNIAV SIIWIT AIID  SNOISIA3H  3AN3AV VNIOHIA S SLINIT KLIS  SLINIT KLIS    Exhibit B  Existing Sanitary Sewer and Portable  Water Infrastructure    HINONIT  I    Exhibit C  Preliminary Engineer's Cost  Estimate    E 6 1 9  3 3 2    CITYOF  FARMERSVILLE  City Council  Staff Report 8B  TO: FROM: DATE:  Honorable Mayor and City Council Jennifer Gomez, City Manager February 12, 2024  SUBJECT: 4Creeks Proposal for Construction Management Services and Inspection  Services for the Fire Station 83 Project  RECOMMENDED ACTION:  Itis recommended that the City Council authorize the City Manager to contract with 4Creeks for Construction Management Services and Inspection Services for the Fire Station 83 Project for  an estimated Time and Materials amount of $160,770. BACKGROUND and DISCUSSION:  The Fire Station 83 Project is currently in the design phase, and construction is expected to begin in a few months. Therefore, the City now needs to contract for Construction Management Services and Inspection Services for the construction phase. Pursuant to the Procurement Policy, as the City Engineer, 4Creeks can provide these services without the City going through 4Creeks has provided a proposal which is attached to include the following tasks:  a competitive process.  Task 1: Construction Management Services Task 2: Public Works Inspection Services Task 3: Materials Testing & Special Inspections  Each task will be provided for a Time and Materials Fee with at total estimate of $160,770.  FISCALI IMPACT:  These services will be funded from the $7,000,000 received from the State for this project.  ATTACHMENTIS): 4Creeks Proposal    February 8, 2024 Mrs. Jennifer Gomez City Manager of Farmersville City 909 W. Visalia Road Farmersville, CA 93223 Subject: Dear Mrs. Gomez,  4CREEKS  City of Farmersville Fire Station 83 Project, Limited Public Works Inspection and  Construction Management Services  Our understanding is that the City would liket to utilize our services on a limited part-time basis to perform inspection services and constructonmanagement fort the Fire Station 83 Project. Our understanding is that these services will be needed starting around the end of April or early May 2024 and will continue for the 230 working day duration as listed in the preliminary construction schedule. We expect the project will end around March or April 2025. Listed below is the scope of services that we anticipate performing for this project. Additionally, per  your request attached is at fee estimate for these services. Task 1: Construction Management Services Attend weekly project progress meetings  Perform periodic site visits to resolve unforeseen field issues.  Review materials testing reports and verify that materials comply with City of Farmersville requirements. Review key change orders and provide recommendations for City acceptance or rejection. This estimate: assumes: an average of 6hours per week spent on CM tasks for the 230 working day or 46  week duration  We estimate that the Task 1 services can be provided for a Time and Materials Fee of $52,670.  Task 2: Public Works Inspection Services  Coordinate with the City's project manager or directly with the materials testing company to schedule Perform periodic Inspections of the work performed by the contractor. Take pictures of construction Periodicallyi inspect contractor's workt throughout construction visually and using normal hand tools smart Inspector will be on site part time for an average of 8 hours per week during this period to observe the  testing for the project. progress.  levels, soil probes, tape measures, measuring wheels, etc.  improvements being constructed to verify compliance with City requirements. Perform field measurements to verify key progress payment quantities.  We estimate that the Task 2 services can be provided for a Time and Materials Fee of $55,200.  Task 3: Materials Testing & Special Inspections  The materials testing & special inspections have been estimated based on a percentage of the overall construction cost. Once final construction plans have been approved, 4Creeks will reassess this portion of the  proposal to finalize the fee.  Provide construction material sampling  324 S. Santa Fe, Suite A Visalia, California 93292 www.4-creeks.com    Field and lab testing for construction materials testing to verify contract and City Quality Assurance Plan  compliance.  Perform Reinforcing steel, concrete & other special inspections required.  We estimate that the Task 3 services can be provided for a Time and Materials Fee of $52,900.  Contractor Responsibilities City of Farmersville Responsibilities during construction. Provide a project DIR number. Process invoices for all parties. services.  Completing all other tasks required by the contract documents.  Retain the designengineer toy provide submittal review and assistv with RFI review on an as needed basis Utilize their on-call lists tor retain other subconsultant to perform work that is not in the 4Creeks scope of  Total Estimated Fee for Tasks 1-3= $160,770  The above services will be billed on a Time and Materials basis in accordance with the on-call contract and attached fee schedule. We will note exceed thet fee estimate without prior authorization or direction from the City.  Services Not Included in the Fee Estimate Building and Electrical Inspections Labor Compliance Survey Staking  Any work not specifically included in the scope of services  While the services above are excluded from this fee estimate, 4Creeks would be happy to provide some of these Ifyou have any questions or need any additional information, please feel free to give us a call to discuss.  services on an additional time and materials basis ift the City needs assistance.  Sincerely,  Bob lan Williams, PE 86546 Sr. Construction Manager encl: Fee Estimate Approval:  Matthew D. Ainley, PE6 66233 Principa-In-Charge  City Manager Signature  Date  324 S. Santa Fe, Suite A Visalia, California 93292 www.4-creeks.com