Murrieta FMSR Final Report 12-10-2020

FINAL REPORT | DECEMBER 2020 Focused Municipal Service Review for the Murrieta Service Area (LAFCO 2019-11-3) PREPARED FOR Riverside Local Agency Formation Commission (LAFCO) PREPARED BY Focused Municipal Service Review for the Murrieta Service Area (LAFCO 2019-11-3) Prepared for Riverside Local Agency Formation Commission (LAFCO) Project No. 868-40-19-1 12-10-20 Project Manager: Stephen Dopudja, PE Date 12-10-20 QA/QC Review: Jon Wells, PE Date FINAL REPORT | DECEMBER 2020 Table of Contents Preface .......................................................................................................................................................... 1 Executive Summary ...................................................................................................................................... 1 Introduction and Background .................................................................................................................. 1 Existing Facilities and Supply Sources for the Murrieta Service Area ................................................... 3 Agency Infrastructure Policies ................................................................................................................ 3 System Demands ................................................................................................................................... 4 Infrastructure Requirements ................................................................................................................... 4 Cost Estimates ........................................................................................................................................ 5 Financial Assessment Methodology and Policies .................................................................................. 6 Financial Assessment of the Three Ownership Scenarios ..................................................................... 7 Rainbow and Rock Mountain Service Area ............................................................................................ 8 Findings and Conclusions ...................................................................................................................... 8 Infrastructure .................................................................................................................................. 10 Future Development ....................................................................................................................... 10 Total Cost to Ratepayers ............................................................................................................... 11 Areas of Uncertainty ....................................................................................................................... 12 1.0 Introduction and Background ................................................................................................................ 13 1.1 Objectives of this Analysis .............................................................................................................. 15 1.2 Water Agencies .............................................................................................................................. 15 1.2.1 Western Municipal Water District .......................................................................................... 15 1.2.2 Rancho California Water District ........................................................................................... 16 1.2.3 Eastern Municipal Water District ........................................................................................... 16 1.3 Restructuring Options ..................................................................................................................... 17 1.4 Public Comments (Responses in Appendix A) ............................................................................... 17 2.0 Existing Facilities and Supply Sources ................................................................................................. 18 2.1 Overview of Murrieta Service Area ................................................................................................. 18 2.2 Western Municipal Water District ................................................................................................... 18 2.2.1 Summary of Water System Facilities .................................................................................... 20 2.2.2 MWD Annexation .................................................................................................................. 22 2.2.3 Rancho California Water District ........................................................................................... 24 2.2.4 Eastern Municipal Water District ........................................................................................... 24 3.0 Agency Infrastructure Policies .............................................................................................................. 25 3.1 Water Supply Policies ..................................................................................................................... 25 3.2 Water Demand Policies .................................................................................................................. 25 3.2.1 Demand Peaking Description ............................................................................................... 25 3.2.2 Demand Peaking Policies ..................................................................................................... 26 3.2.3 Build-Out Service Policies ..................................................................................................... 26 3.3 Infrastructure Performance Criteria ................................................................................................ 29 3.3.1 Pumps ................................................................................................................................... 29 3.3.2 Storage .................................................................................................................................. 29 3.3.2.1 Equalization Storage ................................................................................................... 29 3.3.2.2 Fire Flow Storage ........................................................................................................ 29 i Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents 3.3.2.3 Emergency Storage ..................................................................................................... 30 3.3.2.4 Total Storage ............................................................................................................... 30 3.3.3 Pipelines ................................................................................................................................ 30 3.3.4 Fire Flow ............................................................................................................................... 31 4.0 System Demands .................................................................................................................................. 32 4.1 Existing ........................................................................................................................................... 32 4.1.1 Current Metered Water Consumption ................................................................................... 32 4.1.2 Current Water Demand ......................................................................................................... 34 4.2 Projected ......................................................................................................................................... 35 4.2.1 Projected System Development ............................................................................................ 35 4.2.2 Projected System Demands ................................................................................................. 37 5.0 Infrastructure Requirements ................................................................................................................. 39 5.1 Western Municipal Water District ................................................................................................... 39 5.1.1 Required Improvements within the Murrieta Service Area ................................................... 39 5.1.1.1 Pump Capacity Evaluation .......................................................................................... 39 5.1.1.2 Storage Capacity Evaluation ....................................................................................... 40 5.1.1.3 Pipeline Hydraulic Evaluation ...................................................................................... 41 5.1.1.4 Expansion of the Distribution System .......................................................................... 41 5.1.1.5 Fire Flow Hydraulic Evaluation .................................................................................... 42 5.1.2 Required Offsite Improvements Outside the Murrieta Service Area ..................................... 42 5.1.3 WMWD Ownership Scenario Infrastructure Summary ......................................................... 44 5.2 Rancho California Water District .................................................................................................... 44 5.2.1 Required Improvements within the Murrieta Service Area ................................................... 44 5.2.1.1 Pump Capacity Evaluation .......................................................................................... 44 5.2.1.2 Storage Capacity Evaluation ....................................................................................... 44 5.2.1.3 Pipeline Hydraulic Evaluation ...................................................................................... 45 5.2.1.4 Expansion of the Distribution System .......................................................................... 45 5.2.1.5 Fire Flow Hydraulic Evaluation .................................................................................... 45 5.2.2 Required Offsite Improvements Outside the Murrieta Service Area ..................................... 46 5.2.3 RCWD Ownership Scenario Infrastructure Summary........................................................... 46 5.3 Eastern Municipal Water District .................................................................................................... 48 5.3.1 Required Improvements within the Murrieta Service Area ................................................... 48 5.3.1.1 Pump Capacity Evaluation .......................................................................................... 48 5.3.1.2 Storage Capacity Evaluation ....................................................................................... 48 5.3.1.3 Pipeline Hydraulic Evaluation ...................................................................................... 48 5.3.1.4 Expansion of the Distribution System .......................................................................... 49 5.3.1.5 Fire Flow Hydraulic Evaluation .................................................................................... 49 5.3.2 Required Offsite Improvements Outside the Murrieta Service Area ..................................... 49 5.3.3 EMWD Ownership Scenario Infrastructure Summary .......................................................... 50 6.0 Cost Estimates ...................................................................................................................................... 52 6.1 Description of Unit Costs ................................................................................................................ 52 6.1.1 Pipeline Unit Costs ................................................................................................................ 52 6.1.2 Tank Unit Costs ..................................................................................................................... 53 6.1.3 Contingency Costs and Mark-ups ......................................................................................... 54 6.2 Conceptual Project Costs ............................................................................................................... 54 6.2.1 Western Municipal Water District .......................................................................................... 54 6.2.2 Rancho California Water District ........................................................................................... 55 6.2.3 Eastern Municipal Water District ........................................................................................... 55 ii Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents 7.0 Financial Assessment Methodology and Policies ................................................................................. 62 7.1 Overview ......................................................................................................................................... 62 7.2 Agency Financial Policies ............................................................................................................... 63 7.2.1 Introduction ........................................................................................................................... 63 7.2.2 Financially Distinct or Financially Blended ............................................................................ 65 7.2.3 Initial Water Rate Structure ................................................................................................... 65 7.2.4 Low-Income Discount ........................................................................................................... 65 7.2.5 Standby Charge .................................................................................................................... 66 7.2.6 Ad Valorem Tax .................................................................................................................... 66 7.2.7 Assessment Districts and Community Facilities Districts ..................................................... 67 7.2.8 Connection Fees ................................................................................................................... 68 7.2.9 Mandatory Connection to Water System for Customers with Existing Private Wells ........... 69 7.2.10 Voluntary Private Well Connections: Irrigation Use Remaining on Private Wells .............. 69 7.3 Methods of Prioritization ................................................................................................................. 70 8.0 Financial Assessment of the Three Ownership Scenarios ................................................................... 71 8.1 Methodology and Key Assumptions ............................................................................................... 71 8.2 WMWD Ownership Scenario .......................................................................................................... 73 8.2.1 Overview ............................................................................................................................... 73 8.2.2 Projected Revenues .............................................................................................................. 76 8.2.2.1 Water Rates ................................................................................................................. 76 8.2.2.2 Other Revenues .......................................................................................................... 77 8.2.3 Projected Expenses .............................................................................................................. 78 8.2.3.1 Source of Supply ......................................................................................................... 78 8.2.3.2 Other Operation and Maintenance .............................................................................. 78 8.2.3.3 Repair and Replacement ............................................................................................. 81 8.2.3.4 Capital Project Funding ............................................................................................... 81 8.2.3.5 Debt Service ................................................................................................................ 82 8.2.4 Projected Utility Reserves ..................................................................................................... 83 8.2.5 Projected Total Cost of Water ............................................................................................... 84 8.3 RCWD Ownership Scenario ........................................................................................................... 85 8.3.1 Overview ............................................................................................................................... 85 8.3.2 Projected Revenues .............................................................................................................. 88 8.3.2.1 Water Rates ................................................................................................................. 88 8.3.2.2 Ad Valorem Taxes ....................................................................................................... 89 8.3.2.3 Water Rate Surcharge ................................................................................................. 90 8.3.2.4 Other Revenues .......................................................................................................... 90 8.3.3 Projected Expenses .............................................................................................................. 91 8.3.3.1 Source of Supply ......................................................................................................... 91 8.3.3.2 Other Operation and Maintenance .............................................................................. 91 8.3.3.3 Repair and Replacement ............................................................................................. 93 8.3.3.4 Capital Project Funding ............................................................................................... 93 8.3.3.5 Debt Service ................................................................................................................ 93 8.3.4 Projected Utility Reserves ..................................................................................................... 94 8.3.5 Projected Total Cost of Water ............................................................................................... 95 8.4 EMWD Ownership Scenario ........................................................................................................... 97 8.4.1 Overview ............................................................................................................................... 97 8.4.2 Projected Revenues ............................................................................................................ 101 8.4.2.1 Water Rate Revenues ............................................................................................... 102 iii Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents 8.4.2.2 Other Revenues ........................................................................................................ 103 8.4.3 Projected Expenses ............................................................................................................ 104 8.4.3.1 Study Area Share of EMWD Expenses ..................................................................... 104 8.4.3.2 Capital Project Funding ............................................................................................. 105 8.4.3.3 Preliminary Acquisition Balance Calculation ............................................................. 106 8.4.4 Projected Study Area Contribution to EMWD Reserves ..................................................... 107 8.4.5 Projected Total Cost of Water ............................................................................................. 107 8.4.5.1 Example Single Family Residential Connection ........................................................ 107 8.4.5.2 Example Commercial Connection ............................................................................. 107 8.5 Side by Side Comparisons ........................................................................................................... 109 8.5.1 Total Cost to Existing Connections ..................................................................................... 109 8.5.2 Financial Impact to Development ........................................................................................ 110 8.5.2.1.1 CIP Expansion Improvement Funding ............................................................. 110 8.5.2.1.2 Connection Fee Comparison ........................................................................... 111 8.6 Summary of Financial Analysis .................................................................................................... 112 9.0 Rainbow and Rock Mountain Service Area ........................................................................................ 114 10.0 Determinations .................................................................................................................................. 115 10.1 Infrastructure............................................................................................................................... 115 10.2 Future Development ................................................................................................................... 116 10.3 Total Cost to Ratepayers: ........................................................................................................... 116 List of Tables Table ES-1. Key Parameters and Comparison of Ownership Scenarios ............................................... 9 Table 1-1. Current Number of Water System Connections by Connection Type ................................ 15 Table 2-1. Current Number of Water System Connections by Connection Type ................................ 24 Table 3-1. Fire Flow Criteria ................................................................................................................. 29 Table 3-2. Storage Criteria, MG ........................................................................................................... 30 Table 3-3. Fire Flow Criteria, gpm ........................................................................................................ 31 Table 4-1. Current Monthly Water Use by WMWD Rate Tier .............................................................. 33 Table 4-2. Current Annual Water Use by WMWD Connection Class and WMWD Rate Tier ............. 34 Table 4-3. Projected Number of Water System Connections .............................................................. 36 Table 4-4. Projected Sources of Water Supply, acre-feet per year ...................................................... 38 Table 5-1. Existing Storage Summary .................................................................................................. 40 Table 5-2. Build-Out Storage Summary ............................................................................................... 40 Table 6-1. Unit Base Construction Costs for Pipelines ........................................................................ 53 Table 6-2. Base Construction Costs for Welded Steel Water Storage Reservoirs ............................. 53 Table 6-3. WMWD Storage CIP (Future) ............................................................................................. 56 Table 6-4. WMWD Expansion CIP North of Murrieta Creek (Future) .................................................. 56 Table 6-5. WMWD Expansion CIP South of Murrieta Creek (Future) .................................................. 56 Table 6-6. WMWD Hydraulic Improvement CIP (Future) ..................................................................... 57 iv Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents Table 6-7. WMWD Fire Flow Improvement CIP (Existing) ................................................................... 57 Table 6-8. Supply Improvements Through EMWD (Future) ................................................................. 58 Table 6-9. RCWD Hydraulic Improvement CIP (Future) ...................................................................... 58 Table 6-10. RCWD Expansion CIP North of Murrieta Creek (Future) .................................................. 58 Table 6-11. RCWD Expansion CIP South of Murrieta Creek (Future) ................................................. 59 Table 6-12. Supply Improvements Through RCWD (Future) ............................................................... 59 Table 6-13. EMWD Storage CIP (Future) ............................................................................................ 59 Table 6-14. EMWD Hydraulic Improvement CIP (Future) .................................................................... 60 Table 6-15. EMWD Expansion CIP North of Murrieta Creek (Future) ................................................. 60 Table 6-16. EMWD Expansion CIP South of Murrieta Creek (Future) ................................................. 61 Table 6-17. EMWD Fire Flow Improvement CIP (Existing) .................................................................. 61 Table 6-18. Supply Improvements Through EMWD (Future) ............................................................... 61 Table 7-1. Financial Policy Direction .................................................................................................... 64 Table 7-2. $37 Million Pipe Extension Funding Alternatives ................................................................ 68 Table 7-3. Key Parameters ................................................................................................................... 70 Table 8-1. Projected Number of Water System Connections .............................................................. 74 Table 8-2. Calendar Year 2020 WMWD Rate Structure ...................................................................... 75 Table 8-3 Calendar Year 2020 WMWD Connection Fees .................................................................. 76 Table 8-4. Projected Water Rate Revenue, WMWD Ownership Scenario .......................................... 77 Table 8-5. Average Annual Revenues, WMWD Ownership Scenario ................................................. 77 Table 8-6. Projected Source of Supply Unit Costs, $/acre-foot ............................................................ 79 Table 8-7. Projected O&M Expenses, WMWD Ownership Scenario, $ ............................................... 80 Table 8-8. Projected Capital Improvement Funding, WMWD Ownership Scenario ............................. 81 Table 8-9. FY 19/20 RCWD Santa Rosa Division Rate Schedule ....................................................... 86 Table 8-10. Comparison of WMWD and RCWD Rate Structures ........................................................ 87 Table 8-11. FY 19/20 RCWD Santa Rosa Division Capacity Charges ............................................... 88 Table 8-12. Projected Water Rate Revenue, RCWD Ownership Scenario......................................... 89 Table 8-13. Average Annual Revenues, RCWD Ownership Scenario ................................................. 90 Table 8-14. Projected O&M Expenses, RCWD Ownership Scenario .................................................. 92 Table 8-15. Projected Capital Improvement Funding, RCWD Ownership Scenario ............................ 93 Table 8-16. Calendar Year 2020 and Calendar Year 2021 EMWD Rate Schedule ............................ 99 Table 8-17. Comparison of WMWD and EMWD Budget-Based Rate Structure Tiers ....................... 100 Table 8-18. CY 2020 EMWD Financial Participation Charges ........................................................... 101 Table 8-19. Projected Water Rate Revenues, EMWD Ownership Scenario...................................... 102 Table 8-20. Projected Average Annual Revenues, EMWD Ownership Scenario ............................. 103 Table 8-21. Estimated FY 20/21 EMWD Per Acre-Foot Cost of Water Service................................. 104 Table 8-22. Projected Study Area Share of EMWD Water System Cost .......................................... 104 v Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents Table 8-23. Projected Capital Improvement Funding, EMWD Ownership Scenario .......................... 105 Table 8-24. Preliminary Acquisition Balance Calculation ................................................................... 106 Table 8-25. Comparison of CFD and AD Activity(a) ............................................................................ 111 Table 8-26. Key Parameters and Comparison of Ownership Scenarios............................................ 113 List of Figures Figure ES-1. Projected Monthly Total Cost: Comparison of Scenarios (SFR, ¾-inch Meter, 18 CCF/month, $80K Land Value) ...................................................................... 11 Figure ES-2. Projected Monthly Total Cost: Comparison of Scenarios (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value, 1 acre) .......................................... 12 Figure 1-1. Murrieta, Rainbow & Rock Mountain Study Areas ............................................................. 14 Figure 2-1. Murrieta Study Area ........................................................................................................... 19 Figure 2-2. Study Area Water System Facilities ................................................................................... 21 Figure 2-3. MWD Annexation Charge Payment Map ........................................................................... 23 Figure 3-1. Study Area Parcels with Existing Private Wells ................................................................. 28 Figure 5-1. WMWD Ownership Scenario Improvements ..................................................................... 43 Figure 5-2. RCWD Ownership Scenario Improvements....................................................................... 47 Figure 5-3. EMWD Ownership Scenario Improvements ...................................................................... 51 Figure 8-1. Projected Revenues: WMWD Scenario, $M ...................................................................... 78 Figure 8-2. Projected Expenses: WMWD Scenario, $M ...................................................................... 82 Figure 8-3. Projected Ending Year Reserve Balance: WMWD Scenario, $M ...................................... 83 Figure 8-4. Projected Total Water Cost: WMWD Scenario (Single-Family Residence, ¾-inch Meter, 18 CCF/month, Power Zone 7) .......................................... 84 Figure 8-5. Projected Total Water Cost: WMWD Scenario (Commercial, 2-inch Meter, 125 CCF/month, Power Zone 7, 1 acre) .................................................. 85 Figure 8-6. Projected Revenues: RCWD Scenario, $M ....................................................................... 91 Figure 8-7. Projected Expenses: RCWD Scenario, $M........................................................................ 94 Figure 8-8. Projected Ending Year Reserve Balance: RCWD Scenario, $M ....................................... 95 Figure 8-9. Projected Monthly Total Cost (Water Bill + AV Tax/Surcharge + Standby): RCWD Scenario (SFR, ¾-inch Meter, 18 CCF/month, $80K Land Value) ...................................................... 96 Figure 8-10. Projected Monthly Total Cost (Water Bill + AV Tax/Surcharge + Standby): RCWD Scenario (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value, 1 acre) ........................... 97 Figure 8-11. Projected Revenues: EMWD Scenario, $M ................................................................... 103 Figure 8-12. Projected Expenses: EMWD Scenario, $M ................................................................... 106 Figure 8-13. Projected Study Area Contribution to EMWD Reserves: EMWD Scenario, $M ............ 107 Figure 8-14. Projected Monthly Total Water Cost: EMWD Scenario (Single-Family Residence, ¾-inch Meter, 18 CCF/month) ................................................................. 108 Figure 8-15. Projected Monthly Total Water Cost: EMWD Scenario (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value) ..................................................... 108 vi Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents Figure 8-16. Projected Monthly Total Cost: Comparison of Scenarios (SFR, ¾-inch Meter, 18 CCF/month, $80K Land Value) .................................................................... 109 Figure 8-17. Projected Monthly Total Cost: Comparison of Scenarios (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value, 1 acre) ........................................ 110 List of Appendices Appendix A: Public Comment Summary Appendix B: Detailed Financial Models Appendix C: Infrastructure and Land Use List of Acronyms and Abbreviations AACE Association for the Advancement of Cost Engineering 4 AACE Advancement of Cost Engineering 46 AD Assessment District ADD Average Day Demand 21 AF/year Acre Feet Per Year 21 AWB Annual Water Budget 80 CCF Hundred Cubic Feet 108 ccf/year 100 Cubic Feet Per Year 27 CCI Construction Cost Index 46 CFD Community Facilities District 57 cfs Cubic Feet Per Second 34 CII Commercial, Industrial, Institutional 80 CIP Capital Improvement Program 42 CY Calendar Year EMWD Eastern Municipal Water District 9 ENR Engineering News Record 4 ETAF Evapotranspiration Adjustment Factor 80 EVMWD Elsinore Valley Municipal Water District 14 FAQ Frequently Asked Questions 11 FMSR Focused Municipal Service Review 9 ft3 Cubic Feet 35 FY Fiscal Year 12 GIS Geographic Information System 34 gpm Gallons Per Minute 16 HGL Hydraulic Grade Line 20 HP Horsepower 16 IWB Indoor Water Budget 80 LAFCO Local Agency Formation Commission 9 MDD Maximum Day Demand 21 MG Million Gallons 16 MSR Municipal Service Review 11 MWD Metropolitan Water District 18 vii Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table of Contents O&M Operations and Maintenance 66 OWB Outdoor Water Budget 80 PHD Peak Hour Demand 21 PRV Pressure Reducing Valve 16 psi Pounds Per Square Inch 23 RCWD Rancho California Water District 11 TWB Total Water Budget 80 VFD Variable Frequency Drive 34 WMP Water Master Plan 3 WMWD Western Municipal Water District 9 viii Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area PREFACE This report is prepared pursuant to legislation enacted in 2000 that provides the Riverside Local Agency Formation Commission (LAFCO) with the authority to conduct comprehensive reviews to evaluate potential modifications to utility service areas under LAFCO’s jurisdiction. Under the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Government Code § 56000 et seq.), which took effect January 1, 2001, LAFCO is required to prepare Municipal Service Reviews (MSRs). This focused MSR was prepared for Riverside LAFCO to provide a hydraulic, infrastructure and financial analysis for the retail water component of Western Municipal Water District’s Murrieta Service Area. West Yost would like to extend our appreciation to the staffs of LAFCO, the City of Murrieta, Western Municipal Water District, Rancho California Water District, and Eastern Municipal Water District for their assistance throughout our analysis. We would also like to thank the members of the community who participated in two public outreach sessions, to express their perspectives and input into this focused MSR process. EXECUTIVE SUMMARY This Executive Summary (ES) is provided to give the reader a high-level overview of our analyses and findings. The body of the report and appendices provides more in-depth information and supporting detail. To aid the reader in cross referencing, this Executive Summary follows the specific sections from the detailed body report. For example, ES Section Introduction and Background provides a summary of Section 1 Introduction and Background from the detailed body of the report, and ES Section Existing Facilities and Supply Sources provides a summary of Section 2 Existing Facilities and Supply Sources from the detailed body of the report, and continues throughout this Executive Summary. Introduction and Background The City of Murrieta is serviced by four different water service providers. For several years, discussions have been held within the Murrieta community and among the water districts serving the Murrieta area regarding service delivery, cost to rate payers, and infrastructure. There are several complex considerations that often overlap, but also compete for consideration. These include competing interest for existing and future customers. Some examples are the costs and efficiencies of system improvements serving existing customers or combined with expansion for future customers, proximity of existing infrastructure compared to rates and an agency’s overall cost of service, availability of existing storage versus the feasibility of expanding storage facilities, etc. Nowhere do these issues appear to converge more than in the Murrieta Retail Service Area. This focused MSR specifically considered these competing issues in determining the hydraulic, infrastructure and financial implications for existing and future customers. The City of Murrieta also has a desire to facilitate the needs of future customers that will come from growth, through the potential build out of the region. 1 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area The implications of these competing interests have historically existed in the Murrieta Retail Service Area. Several steps have been taken to sort through the challenges to identify alternatives and find the most appropriate path forward. The City of Murrieta convened an ad hoc committee to review these discussions more formally. Consequently, the City of Murrieta initiated a formal request to LAFCO for this focused MSR in order to analyze these concerns, with a particular focus on the portion of the City of Murrieta designated as the Murrieta Retail Service Area. This area includes existing and future residential and commercial connections and is projected to include substantial future planned growth in addition to development projects that have already been approved. In addition to the Murrieta area, the two additional service areas of Rainbow and Rock Mountain were also included for consideration. Therefore, three separate areas are the subject of this Focused Municipal Service Review (FMSR): • Murrieta, specifically the portion of the City of Murrieta currently receiving water service from Western Municipal Water District (WMWD). This area is defined as the Murrieta Study Area, or Study Area, for the purposes of this report. • Rainbow, a portion of WMWD’s service area located south of Murrieta (Rainbow Study Area) • Rock Mountain, a portion of WMWD’s service area located south of Murrieta (Rock Mountain Study Area) Because the Rainbow and Rock Mountain Study Areas are more geographically independent and less complicated from a hydraulic and infrastructure perspective, they are covered more independently in Section 9 of this FMSR. In 2019, LAFCO issued its request for proposals for this Focused Municipal Service Review, and stated the following objective: To conduct a Focused Municipal Service Review (FMSR) that will inform the LAFCO, local water purveyors, the City of Murrieta, and the public, regarding the most effective and efficient method of providing water service to the “Study Area”. Three alternatives for future ownership of WMWD’s Murrieta Study Area were evaluated. These three Ownership Scenarios are identified below, and later sections of this report describe the technical and financial implications of the three Ownership Scenarios: • Continued operation by WMWD “WMWD Ownership Scenario” • Acquisition by Rancho California Water District (RCWD) “RCWD Ownership Scenario” • Acquisition by Eastern Municipal Water District (EMWD) “EMWD Ownership Scenario” Further detail on the background of this report can be found in Section 1. 2 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Existing Facilities and Supply Sources for the Murrieta Service Area The Murrieta Retail Service Area is 6.5 square miles in size and lies within the City of Murrieta. The area is contained by Interstate 15 to the northeast and the Santa Rosa Plateau to the southwest. It is on the south end of the WMWD service area boundary, bordered by EMWD to the northeast, Elsinore Valley Municipal Water District (EVMWD) to the northwest, and RCWD to the southwest and south. In 2006, WMWD took over ownership of the Murrieta Study Area from the Murrieta County Water District and incorporated it into WMWD. This transfer created a unique circumstance in which WMWD took ownership of a retail service area that was not adjacent to any of its other retail service areas. As such the Murrieta Study Area operates as a stand-alone retail water system, surrounded by the retail service areas of adjacent water districts. The Murrieta Retail Area water system consists of 2,869 potable water connections served by over 52 miles of potable water pipelines, three potable water tanks, one booster station, and one pressures reducing valve (PRV) station. Only one well, New Clay Well, is currently active and producing water for the Murrieta Service Area. WMWD is currently working to bring a replacement for the North Well, a previously inactivated well, online in the near future. New Clay Well currently produces 450 gpm for the system and the North Well is expected to produce 700 gpm, making the total well production 1,150 gpm. An intertie to EMWD where Los Alamos Rd crosses over the I-15, referred to as the “Los Alamos Interconnection,” provides the rest of the supply to the service area under existing conditions. An emergency intertie connects the system to EVMWD on Washington Ave near Palomar street. Further detail on existing facilities and supply sources can be found in Section 2 of this report. Agency Infrastructure Policies At the outset of this FMSR process, it was important to establish certain policies that had been, or would be established by each agency under their respective ownership alternatives. Each agency was requested to provide their policy responses that were used in this analysis. The following categories of policies and assumptions were implemented throughout the analysis to evaluate the infrastructure requirements for service for each of the candidate agencies: • Water Supply Policies • Water Demand Policies • Infrastructure Performance Criteria The details of these policies and criteria can be found in Section 3 of the report. 3 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area System Demands The system demands for the Study Area were evaluated from a historical perspective and developed looking forward into the future. These demands were critical to this study in order to identify potential system improvements to serve both existing and future customers. This has several benefits. It identifies potential system improvements for existing and future customers separately to ensure that “growth pays for growth”, which ensure neither customer types subsidize the other. However, in the case of overlapping system improvements, it also allows for a more cost-effective solution to both customer types. For example, a situation could arise where the existing system demands would justify upsizing a pipeline to 12-inches in diameter, but the ultimate demands would require a 16-inch pipeline. Under this type of scenario, the respective cost split to either the existing or future customers would be less than each group constructing their own respective improvements. Water demand in this report refers to the sum of local groundwater production from WMWD wells plus imported regional water. WMWD estimates its water demand as the amount of metered consumption plus 3.5 percent non-revenue water which is typically water lost through pipe leaks or water use that is not metered. The CY 2019 estimated water demand for the Murrieta Study Area provided by WMWD is as follows : • Total metered consumption: 2,304 acre feet per year (AF/year) • Plus 3.5 percent non-revenue water: 84 AF/year • Total demand: 2,388 AF/year The infrastructure analysis described in Sections 5 and 6 of this FMSR uses the following average demands at buildout, with the projected demands obtained from the 2018 Kennedy Jenks analysis: • Average day demand, current: 1,295 gpm (equal to 2,090 AF/year) • Average day demand, buildout: 2,338 gpm (approximately 80 percent higher than current) System demands are detailed in Section 4 of this report. Infrastructure Requirements An analysis of system infrastructure to meet current needs of the Murrieta Study Area, and at buildout was performed. While we did carefully analyze the buildout condition, the scope of this FMSR did not include any specific effort to identify how to phase or accommodate immediate development along the Jefferson Avenue Corridor. Any phasing would vary, depending on the specific developer, their funding approaches, goals of the City’s General Plan and the water agency ultimately serving the Murrieta Study Area. 4 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area West Yost was provided an existing InfoWater model for the Murrieta Service Area by WMWD that was last updated in 2014. This model was updated to the most current geographic information system (GIS) infrastructure data and the most recent demand developments as part of the Draft 2018 Water Master Plan (WMP) Update. The updated model was used as the basis of the hydraulic analysis for the infrastructure within the Murrieta Service Area. Because it was necessary to assess the hydraulic impact of supplying the Murrieta Service Area through the EMWD and RCWD distribution systems, EMWD and RCWD also supplied the most recent versions of their distribution system hydraulic models for this analysis. West Yost regularly works with and updates the EMWD potable water distribution system model. The EMWD hydraulic model used in the analysis was current as of the analysis date of September 2019. The RCWD potable water hydraulic model was provided to West Yost in July 2019. The resulting infrastructure requirements are provided in Sections 5 of the report. As outlined in System Demands, the system demands have a direct correlation to the size and extent of necessary infrastructure. Infrastructure requirements were considered separately for current and future customers to ensure that “growth pays for growth”. We also identified where overlapping current and future upgrades would provide cost benefits for both customer types. Cost Estimates West Yost developed opinions of the probable construction cost for the planning and design of the recommended infrastructure identified in the sections above. The opinion of probable construction cost was developed based on a combination of data supplied by manufacturers, published industry standard cost data and curves, construction costs for similar facilities built by other public agencies, and construction costs previously estimated by West Yost for similar facilities with similar construction cost indexes. Additionally, the costs presented in this document are for construction only and do not include uncertainties in estimation or unexpected construction costs (e.g., variations in final quantities) or specific cost estimates for engineering, legal costs, environmental review, soils investigation, surveying, construction management, and inspections and/or contract administration. Some of these additional cost items are referred to as contingency costs or mark-ups, and are further described below. The opinion of probable construction cost has been adjusted to reflect January 2020 dollars based on an Engineering News Record (ENR) Construction Cost Index (CCI) of 11,392 (20-Cities Average). These construction costs are to be used for conceptual cost estimates only, and should be updated regularly. Construction costs are not intended to represent the lowest prices in the industry for each type of construction; rather they are representative of average or typical construction costs. These planning-level construction costs have been prepared for guidance in evaluating various facility improvement options, and are intended for budgetary purposes only, within the context of this planning effort. The cost estimates prepared for this document are in accordance with the guidelines of the Association for the Advancement of Cost Engineering (AACE) International for a Class 5 Estimate, suitable for long-range capital planning, with an accuracy range of -50 percent to +100 percent. Construction costs were developed based on bids from other water system design 5 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area projects and from standard cost estimating guides. The basis of the cost estimates and the resulting cost estimates can be found in Section 6 of the Report. All of the cost estimates have been provided to each of the participants of the FMSR for their review and comments Financial Assessment Methodology and Policies The financial assessment for this FMSR is intended to show the effect on three distinct groups in the Study Area: • Rate payers • Residents currently on private wells • Development community To do this, a financial model was prepared for each Ownership Scenario. The financial model contains a year by year projection of revenues and expenses for the Study Area. Three Ownership Scenarios were created: • WMWD Ownership Scenario. The financial model for the WMWD Ownership Scenario was prepared as if WMWD would continue to own and operate the water system. • RCWD Ownership Scenario. The financial model for the RCWD Ownership Scenario was prepared as if RCWD would become the owner of the water system on July 1, 2020. • EMWD Ownership Scenario. The financial model for the EMWD Ownership Scenario was prepared as if EMWD would become the owner of the water system on July 1, 2020. Financial models were developed for each Ownership Scenario. The models project what the various expenses are over the next 10 years to operate and maintain the water system, including building the capital improvements described in Sections 5 and 6 of this report. The financial analysis considers whether debt would be issued to pay for capital improvements, estimates future costs for water supply, and shows how growth would pay for growth. The financial models also show where the money comes from to pay these costs. The majority of utility revenues are from water rates. Smaller amounts of revenues are from connection fees (one time charges that development pays before connecting to the water system), and standby fees. The financial assessment methodology and policies are detailed in Section 7 below. 6 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Financial Assessment of the Three Ownership Scenarios As described above, three financial models were prepared: one for each Ownership Scenario. The financial models have several elements in common: • 10-year projection period, starting July 1, 2020 and ending June 30, 2030. • Identifying how each utility would structure the financial tracking of revenues and expenses: utilities typically create “Funds” which house certain types of revenues and expenses. As examples, most utilities have an Operating Fund, into which water rate revenues are put, and from which operation and maintenance expenses are paid. Many utilities have a separate fund for connection fees, where the fund’s revenues are connection fees and the funds expenses are development-related capital projects funded by connection fees. Each utility would do this differently. • Projections of water rate revenues, using the applicable rate structure, current number of connections and current water use, projected development, and projected increases in water rate revenues. • Projections of other types of revenues, including connection fees, standby charges, interest income, and (if applicable) ad valorem tax revenue. Each utility charges a standby fee to all parcels in the Study Area, regardless of whether or not they are connected to the water system. • Projections of operation and maintenance expenses. This includes projecting the cost to purchase imported water and produce local groundwater, and the remaining costs to operate and maintain the water system. • Identification of which capital costs are related to development, and which capital costs are related to providing service to the existing customer base. • Identification of which capital costs would be funded on a pay-as-you-go basis, and which capital costs would be debt funded. • Projected beginning and ending year reserve balances in each utility fund. • Projected water rates, assuming that the water rate revenue increases are distributed equally among all connections. The following are assumptions common to the three Ownership Scenarios. • Inflation assumptions • Current connection and water use data • Projected future water demands and water source production • Calculation of total costs to ratepayers The results of the financial models and the above assumptions can be found in Section 8 of this report. 7 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Rainbow and Rock Mountain Service Area At the outset of the FMSR for the Murrieta Study Area, several questions have come up regarding the analysis of the Rainbow and Rock and Mountain Study Areas. The questions center on how the analysis differs for the Rainbow and Rock Mountain Study Areas versus the Murrieta Study Area. It is correct that the Rainbow and Rock Mountain Study Areas were originally contemplated for analysis in the Request for Proposal. However, several key distinctions were identified that eliminated the need for such a detailed analysis of the Rainbow and Rock and Mountain Study Areas. The most significant distinction is the physical infrastructure. Currently, the Rainbow and Rock Mountain Study Areas are WMWD customers. However, WMWD does not have physical facilities in the Rock Mountain Service Area. WMWD does have a storage reservoir, distribution pipelines and and Metropolitan Water District (MWD) turnout in the Rainbow Service Area. The water operations for both service areas are provided under contract through RCWD. Because of this existing arrangement, a detailed analysis of the Rainbow and Rock Mountain areas would be largely duplicative. It was determined that a duplicate effort was not warranted under this Municipal Service Review. As a result, that detailed analysis was ultimately eliminated from the scope of work. Findings and Conclusions The comparison of three potential water purveyors, each with distinct policy drivers, revenue approaches, and physical infrastructure in proximity to the study area, leads to a complex analysis. The contents of this report cover those issues and analysis in detail. In an effort to provide LAFCO, the participating water agencies, the City of Murrieta and the potentially affected customers, with an overview, this Executive Summary is being provided for a quicker reference. All of the supporting analysis is included in the body of this report. Table ES1-1 provides a summary of the key policies and parameters that were considered within this FMSR. These critical parameters reflect policy decision inputs provided each agency, and the corresponding results. It should be noted that the policy decision inputs are a reflection of policy as of this analysis period. The inputs are subject to change in the future through action of the Board of Directors of any of the agencies. 8 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table ES-1. Key Parameters and Comparison of Ownership Scenarios Parameter(a) WMWD RCWD EMWD Key Policies Financially Distinct or Financially Integrated Distinct Distinct(b) Integrated Ad Valorem Tax No Possibly(c) No Possible Funding Sources for $37M of Pipe Extensions Developers Yes Yes Yes Assessment Districts(d) Yes Yes Yes Community Facility Districts(d) Yes, but can't be Yes Yes financed through WMWD Low Income Discount Yes No No Projected Total Cost to Ratepayers Example Single-Family Residence Middle Highest Lowest Example Commercial Customer Middle, but higher If water rate Middle, but less than EMWD surcharge then than WMWD Scenario. highest. If ad Scenario. valorem tax then lowest. Residents with Private Wells Mandatory Connection of Private Wells No No No Standby Charge, $/Acre/year $21 $69.92 $14 Voluntary Connection to Public Water System for Option to Convert Must Convert Option to Convert Customers Currently Using Private Wells Indoor Use Only. Indoor and Indoor Use Only. May reduce meter Irrigation Use. May reduce meter size and size and connection fee. connection fee. Connection Fee Comparison(e) Single Family Residential(f) $7,050 $2,537 $5,501 2" Meter(g) $37,599 $13,445 $44,008 - $73,328 (a) Please refer to Section 8 for more detail on these parameters. (b) RCWD indicated that this policy would be reevaluated after RCWD has experience operating the system. (c) The decision of whether to adopt an ad valorem tax under the RCWD Ownership Scenario will be made by the RCWD Board of Directors. If RCWD decides not to adopt an ad valorem tax, then RCWD would adopt a water rate surcharge that collects the same amount of money. (d) Section 8.5.2 contains additional detail, including a comparison of how frequently each agency has used these funding mechanisms in the recent past. (e) RCWD connection fees are lower because of revenue from Ad Valorem property taxes that reduce reliance on connection fees. (f) The Connection Fee for a ¾-inch meter is shown to provide a standard for comparison. It is acknowledged that future single-family residences may require a 1-inch meter depending on fire sprinkler requirements inside the home. (g) A 2-inch meter is shown for comparative purposes. Separately, in the example Total Cost to Ratepayers calculation, a customer with a 2-inch water meter and water consumption of 125 ccf/month is used for comparison. EMWD noted that this customer with water consumption of 125 ccf/month would likely require a 1.5-inch water meter. EMWD’s Connection Fee for a 1.5-inch meter is $27,505 After compiling the information and performing our analysis, we can offer the following overall conclusions regarding Infrastructure, Future Development and the Total Cost to Ratepayers. 9 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Infrastructure The cost of infrastructure to serve the Study Area’s supply needs is one of the important factors in determining the most cost effective approach to serve the area. The proximity of the Study Area to existing infrastructure has a significant impact on the cost of future or expanded infrastructure. The closer the Study Area is to existing infrastructure, the less infrastructure would be anticipated. We also analyzed potential impacts to customers with their own private wells: • Due to its close proximity to the Study Area and current infrastructure, RCWD has the lowest infrastructure costs associated with providing service to future development. • Under all Ownership Scenarios, nearly $5 million is anticipated to replace legacy small diameter water lines in the Study Area. For purposes of this FMSR, these improvements are projected to be done over the next 10 years. • Both EMWD and WMWD offer an option for residents who currently use private wells. If a resident chooses to connect to the public water system, EMWD and WMWD offer the option of converting indoor use only, and would allow customers to leave their irrigation demands connected to their private well. • EMWD offers existing private well users the lowest standby charges. Future Development Several important factors are important to accommodate potential development in the Study Area. These include connection fees for agencies, future extension of facilities, policies regarding growth paying for growth, and the funding mechanisms for infrastructure required to serve future development. • RCWD has the lowest connection fees of the three agencies. Each agency calculates its connection fee differently, and RCWD’s lower fees acknowledge that Ad Valorem tax revenues are also used to pay for water system infrastructure. • The pipe extensions required to extend water service to facilitate development would not be funded directly by the utility. All agencies would allow developers to build and fund them. • All agencies would allow formation of one or more Assessment Districts where the assessment is based on the value of the property. • All agencies would allow formation of one or more Community Facilities Districts (CFD), though WMWD does not allow CFDs to be financed through WMWD. • This FMSR did not specifically asses the ability to immediately serve projected development in the Jefferson Avenue Corridor. That being said, it is likely the RCWD Ownership Scenario would allow some development in the Jefferson Avenue Corridor with less up front cost to developers than the other agencies. However, depending on the location of the development, and the timing of future development, some of this developer-funded investment might be redundant or stranded in the long-term. 10 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Total Cost to Ratepayers Figure ES-1 shows that the EMWD Ownership Scenario has the lowest total cost of water for the example single-family residence. After EMWD’s Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water for the single-family residential example would decrease further. The RCWD Ownership Scenario has the highest total cost of water, though the total cost of water under the RCWD Ownership Scenario will also depend on whether an Ad Valorem tax is applied, or if RCWD applies the water rate surcharge. Projected Monthly Total Cost: Comparison of Scenarios (SFR, 3/4" Meter, 18 hcf/month, $80K Land Value) $160 $140 $120 $100 $80 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 RCWD Water Rate Surcharge RCWD Ad Valorem Tax EMWD WMWD Figure ES-1. Projected Monthly Total Cost: Comparison of Scenarios (SFR, ¾-inch Meter, 18 CCF/month, $80K Land Value) Figure ES-2 shows that with the implementation of the Ad Valorem Tax, the total cost of water will be lowest under the RCWD Scenario for the property value assumption shown for a commercial water bill. Without implementation of the Ad Valorem Tax, the EMWD Ownership Scenario will provide the lowest total cost of water until the Acquisition Balance is paid off (expected to be after FY 29/30. There is a wide range of projected total cost under the RCWD Ownership Scenario, depending on whether an Ad Valorem Tax or Water Rate Surcharge is applied. After the EMWD’s Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water under the EMWD Ownership Scenario is expected to increase, because EMWD’s commercial water rates are generally higher than WMWD’s commercial water rates. It should be noted that EMWD believes its rate structure and policies may result in further commercial conservation. EMWD provided records for commercial connections nearest the Murrieta Study Area which indicated an average of 59 CCF/month for similar 2-inch water meters. Based on the EMWD data, the overall cost of the representative commercial connection would decrease due to the lower volume. The trend would be the same as described above. Initially, EMWD is likely to offer the lowest cost to commercial connections. After the Acquisition Balance is paid off (expected to be after FY 29/30), commercial connections may pay more under the EMWD Ownership Scenario than had WMWD retained water system ownership. 11 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Projected Monthly Total Cost: Comparison of Scenarios (Commercial, 2" Meter, 125 hcf/month, $200K Land Value, 1 acre) $900 $800 $700 $600 $500 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 RCWD Water Rate Surcharge RCWD Ad Valorem Tax EMWD WMWD Figure ES-2. Projected Monthly Total Cost: Comparison of Scenarios (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value, 1 acre) The total cost to connections under the RCWD scenario will depend on the specifics of each connection and whether RCWD chooses to (and is able to) adopt an Ad Valorem tax or pursue a water rate surcharge. Areas of Uncertainty The purpose of this FMSR is the give the agencies and ratepayers an immediate and long-term outlook for each of the potential Ownership Scenarios. The engineering and financial analyses contained in this FMSR contain some underlying estimates and projections of future conditions. Numerically, the analyses and calculations are detailed and are shown throughout this report and in the appendices. Detailed findings and conclusions can be found in Section 10. 12 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 1.0 INTRODUCTION AND BACKGROUND The City of Murrieta is serviced by four different water service providers. For several years, discussions have been held within the Murrieta community and among the water districts serving the Murrieta area regarding service delivery, cost to rate payers, and infrastructure. There are several complex considerations that often overlap, but also compete for consideration. These include competing interest for existing and future customers. Some examples are the costs and efficiencies of system improvements serving existing customers or combined with expansion for future customers, proximity of existing infrastructure compared to rates and an agency’s overall cost of service, availability of existing storage versus the feasibility of expanding storage facilities, etc. Nowhere do these issues appear to converge more than in the Murrieta Retail Service Area. This focused MSR specifically considered these competing issues in determining the hydraulic, infrastructure and financial implications for existing and future customers. The City of Murrieta also has a desire to facilitate the needs of future customers that will come from growth, through the potential build out of the region. The implications of these competing interests have historically existed in the Murrieta Retail Service Area. Several steps have been taken to sort through the challenges to identify alternatives and find the most appropriate path forward. The City of Murrieta convened an ad hoc committee to review these discussions more formally. Consequently, the City of Murrieta initiated a formal request to LAFCO for this focused MSR in order to analyze these concerns with a particular focus on the portion of the City of Murrieta designated as the Murrieta Retail Service Area. This area includes existing and future residential and commercial connections and is projected to include substantial future planned growth in addition to development projects that have already been approved. In addition to the Murrieta area, the two additional service areas of Rainbow and Rock Mountain were also included for consideration. Therefore, three separate areas are the subject of this Focused Municipal Service Review (FMSR): • Murrieta, specifically the portion of the City of Murrieta currently receiving water service from Western Municipal Water District (WMWD). This area is defined as the Murrieta Study Area, or Study Area, for the purposes of this report. • Rainbow, a portion of WMWD’s service area located south of Murrieta (Rainbow Study Area) • Rock Mountain, a portion of WMWD’s service area located south of Murrieta (Rock Mountain Study Area) Because the Rainbow and Rock Mountain Study Areas are more geographically independent and less complicated from a hydraulic and infrastructure perspective, they are covered more independently in Section 9 of this FMSR Figure 1-1 below, shows the Murrieta Study Area, the Rainbow Study Area, Rock Mountain Study Area. The blue shaded area is the area receiving wholesale water from WMWD, and the pink shaded area is the area receiving wholesale water from Eastern Municipal Water District (EMWD). There are several “islands” shown on Figure 1-1 that do not receive wholesale water from either 13 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview WEST YOST - N:\Clients\868 Riverside LAFCO\40-19-01 Water Serv Rev\GIS\MXD\_Working Figures\Figure 1-1. Murrieta, Rainbow, Rock Mountain Study Areas.mxd - coconnor - 11/30/2020 ¨¦§ 15 §¨¦5 1 2 ÄÆ 9 7 ¿ EMWD ¨¦§ WMWD Unshaded areas indicate 1 5 island parcels which are not within any water district. ÄÆ 79 Rock Mountain Rainbow ¨¦§ 1 5 San Diego County LOS Study Areas Water Districts ANGELES SAN Figure 1-1 BERNARDINO County Boundary Eastern Municipal Water District City Boundary Western Municipal Water District Murrieta, Rainbow & RIVERSIDE Interstate Highway Rock Mountain ORANGE State Highway Study Areas Local Roads 0 2,500 5,000 Riverside LAFCO SAN DIEGO Focused Water MSR Scale in Feet Murrieta Area Focused Municipal Services Review for the Murrieta Service Area agency. These islands may be subject to LAFCO review and adjudication if an application is filed by any agency. Table 1-1 shows the current number of connections in the Study Area by connection type. Table 1-1. Current Number of Water System Connections by Connection Type Single Family Multi Family Non- Fire Meter Size Residential Residential Residential Irrigation Protection Total ⅝" 347 2 25 3 105 482 ¾" 1,939 6 10 3 10 1,968 1" 76 51 45 172 1.5" 1 31 45 77 2" 1 41 75 44 161 3" 4 1 5 4" 2 2 4 Total 2,364 51 198 141 115 2,869 Source: WMWD, 2/19/2020. Based on connection meter export at January 15, 2020. 1.1 Objectives of this Analysis In 2019, LAFCO issued its request for proposals for this Focused Municipal Service Review. The objective is to conduct an FMSR that will inform the Local Agency Formation Commission (LAFCO), local water purveyors, the City of Murrieta, and the public, regarding the most effective and efficient method of providing water service to the Murrieta Study Area. To meet this objective, LAFCO retained West Yost Associates to analyze the infrastructure, supply capacity and financial costs for providing water service to the Murrieta Study Area. These analyses were performed for current and future connections, and contemplated how best to provide that service in the most efficient and cost-effective manner. Completion of this Focused MSR will serve as a roadmap for provision of adequate infrastructure and water supply to support development of the area in a manner consistent with the City of Murrieta’s General Plan and Downtown Specific Plan which were adopted in 2011 and 2017 respectively. This analysis considers many of the complex and often competing interests, as well as the specific advantages each agency brings towards resolving these challenges. 1.2 Water Agencies This section provides a brief introduction to the three candidate agencies, WMWD, Rancho California Water District (RCWD) and EMWD, to provide service to the Study Area, with information obtained from the respective agencies. 1.2.1 Western Municipal Water District WMWD was formed in 1954. Today, WMWD supplies water on both a wholesale and a retail basis to a region stretching 527-square miles in western Riverside County with an assessed 15 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area valuation of $83 billion and a population of more than 880,000 people. This regional area includes the cities of Corona, Norco and Riverside and the water agencies serving Box Springs, Eagle Valley, Lake Elsinore, Temescal Valley and Temecula. While most of WMWD’s business is in wholesaling of water to water agencies and municipalities, WMWD directly serves approximately 25,000 residential and business connections (and provides emergency service when necessary) in the following areas: • Riverside – home to WMWD’s largest grouping of direct connections. Areas served include a portion of the city of Riverside, Orangecrest, Mission Grove, El Sobrante, Eagle Valley, Woodcrest, Lake Mathews, portions of Mead Valley and Perris, and March Air Reserve Base. • Murrieta – with the merger of the city’s water utility agency in 2005, WMWD now serves a 6.5-square mile section of western Murrieta (the Study Area), primarily in the historic downtown area of the city. • Rainbow and Rock Mountain – WMWD’s most distant served communities are an unincorporated area of southern Riverside County bordering San Diego County. 1.2.2 Rancho California Water District Development of the Temecula / Rancho California community began in 1964 when the Vail Ranch was acquired by the partnership of Kaiser Corporations and Macco Realty Company. In 1965, in order to provide for a continuing and reliable water supply, the developers of Temecula/Rancho California formed the original Rancho California Water District (the “Rancho District”) over the easterly 41,000 acres of the community. The Santa Rosa Ranches Water District was organized on January 24, 1968 (the “Santa Rosa District”) to serve the westerly 44,800 acres of the community. In early 1977, the Rancho and Santa Rosa districts were consolidated in accordance with Local Agency Formation Commission resolutions under the name “Rancho California Water District.” RCWD currently serves the area known as Temecula/Rancho California, which includes the City of Temecula, portions of the City of Murrieta, and unincorporated areas of Riverside County. The total gross acreage within the RCWD’s service area is approximately 99,000 acres (154.7 square miles). As of Fiscal Year (FY) 18/19, RCWD served approximately 44,000 connections. RCWD currently provides emergency water service calls to customers in close proximity to the Murrieta Study Area, and it appears the RCWD as the surge capacity to extend emergency service to the study area if necessary. 1.2.3 Eastern Municipal Water District Eastern Municipal Water District (EMWD) is the water, wastewater service and recycled water provider to more than 825,000 people living and working within a 555-square mile service area in western Riverside County. It is California’s sixth-largest retail water agency and its mission is “To deliver value to our customers and the communities we serve by providing safe, reliable, economical and environmentally sustainable water, wastewater and recycled water services.” 16 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area EMWD provides service to retail customers located within the cities of Canyon Lake, Hemet, San Jacinto, Menifee, Moreno Valley, Murrieta, Perris and Temecula, as well as the unincorporated communities of French Valley, Good Hope, Homeland, Lakeview, Mead Valley, Murrieta Hot Springs, Nuevo, Romoland, Valle Vista and Winchester. As of 2019, EMWD served approximately 153,000 connections. EMWD currently provides emergency water service calls to customers in close proximity to the Murrieta Study Area, and it appears the RCWD as the surge capacity to extend emergency service to the study area if necessary. EMWD also supplies water on a wholesale basis to the Cities of Hemet, San Jacinto and Perris; Lake Hemet Municipal Water District; Nuevo Water Company; Rancho California Water District; and Western Municipal Water District. 1.3 Restructuring Options Three alternatives for future ownership of WMWD’s Murrieta Study Area were evaluated. These three Ownership Alternatives are identified below, and later sections of this report describe the technical and financial implications of the three Ownership Alternatives. • Continued operation by WMWD “WMWD Ownership Scenario” • Acquisition by RCWD “RCWD Ownership Scenario” • Acquisition by EMWD “EMWD Ownership Scenario” 1.4 Public Comments (Responses in Appendix A) There were two public meetings held in Murrieta at the kick-off of this FMSR. These meetings were held in April 2019 and July 2019, before any of the analysis associated with this FMSR had been completed. During these meetings, public comments were received. A compilation of public comments is included in Appendix A. Some of the major themes of the public comments included: • Concerns about changing the water purveyor • Opposition to imposing an Ad Valorem tax • Opposition to paying Standby Charges • Concern about the costs of water service • Concerns that adequate fire flow is not available • Concerns about the amount of development in the Study Area • Drawdown of local aquifers • Historical and miscellaneous concerns about Rancho California Water District • Desire to keep private wells, not be connected to the public water system, not be metered, and not have aquifer drawdown. • Meeting wasn’t noticed and the room was too small for the meeting 17 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 2.0 EXISTING FACILITIES AND SUPPLY SOURCES This chapter describes the Murrieta Retail Service Area’s characteristics and its existing water distribution system. 2.1 Overview of Murrieta Service Area The Murrieta Retail Service Area is 6.5 square miles in size and lies within the City of Murrieta. In 2006, WMWD took over ownership of the Murrieta Retail Area from the Murrieta County Water District and incorporated it into WMWD. The area is contained by Interstate 15 to the northeast and the Santa Rosa Plateau to the southwest. It is on the south end of the WMWD service area boundary, bordered by EMWD to the northeast, Elsinore Valley Municipal Water District (EVMWD) to the northwest, and RCWD to the southwest and south. 2.2 Western Municipal Water District Figure 2-1 shows the Study Area and also the adjacent RCWD and EMWD Service Areas. This figure, created by the City of Murrieta and originally contained in the Request for Proposals for this project issued by LAFCO, shows the locations of the various water purveyors in the area. Neighboring utilities are shown on Figure 2-1: • Study Area: in orange • RCWD: in yellow, to the southwest and the south of the Study Area • EMWD: EMWD’s retail water service area is shown in pink, to the east and northeast of the Study Area. • EVMWD: in green, to the north and northeast of the Study Area. EVMWD was not assessed as a potential water service purveyor in this MSA. As can be seen on Figure 2-1, there are several areas adjacent to the Study Area that are not part of any water district. These are colloquially referred to as “islands”. The islands have no color on Figure 2-1. 18 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview St me g EVMWD ut N §¨¦5 1 2 H a y e s A v e Le m o n S A t A v e d a m s mi a St ¨¦§ EMWD al 15 K W a s h in g to mia St n A v e A d a Kal Ivy St m s A v e J e H a y e Study Area ffe rs o n A s A v e v e St n or h Ha wt a St av u G WMWD RCWD ÄÆ 9 7 Study Areas Water Districts City Boundary Eastern Municipal Water Figure 2-1 District Interstate Highway Elsinore Valley Municipal Murrieta Study Area State Highway Water District Local Roads Murrieta Service Area Riverside LAFCO (Western Municipal 0 2,000 4,000 Focused Water MSR Water District) Murrieta Area Rancho California Water Scale in Feet District 0202/01/21 - ronnococ - dxm.aerA ydutS ateirruM .1-2 erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area 2.2.1 Summary of Water System Facilities The Murrieta Area water system consists of 2,869 potable water connections served by over 52 miles of potable water pipelines, four potable water tanks, one booster station, and one pressure reducing valve (PRV) station. The existing system facilities can be found on Figure 2-2. Due to elevation changes, the service area is split into two pressure zones: the 1280 Zone and the 1430 Zone. The 1280 Zone is the larger of the two zones, containing almost 42 miles of water pipelines and serving residential, commercial, and industrial connections. Two tanks, located at the Olga Gordon site on the southern edge of the system, store water for the zone. The two tanks both have a low water level of 1,250 feet, a high-water level of 1,282 feet, and a radius of 45 feet, giving them both a capacity of 1.5 million gallons (MG). The 1430 Zone serves the more elevated, northwest portion of the system. It contains almost 11 miles of water pipelines and exclusively serves residential connections. The zone currently has existing storage capable of holding 1.9 MG of potable water at the Grizzly Ridge Reservoir site. The only source of water for Zone 1430 currently is from the lower 1280 Zone. Water must be pumped up through the existing Alson Booster Pump Station, located on Washington Ave just southeast of Alexandria Dr. The Alson Booster Pump Station currently houses three 60 HP pumps, each with a capacity to pump 800 gallons per minute (gpm). This means the stations total pumping capacity is 2,400 gpm and its firm pumping capacity is 1,600 gpm. Only one well, New Clay Well, is currently active and producing water for the Murrieta Service Area. WMWD is currently working to bring a replacement for the North Well, a previously inactivated well, online in the near future. New Clay Well currently produces 450 gpm for the system and the North Well is expected to produce 700 gpm, making the total well production 1,150 gpm. An intertie to EMWD where Los Alamos Rd crosses over the I-15, referred to as the “Los Alamos Interconnection,” provides the rest of the supply to the service area under existing conditions. An emergency intertie connects the system to EVMWD in the 1430 Zone on Washington Ave near Palomar street. The capacity of the Los Alamos Interconnection is limited by infrastructure in the EMWD system to 5.0 cubic feet per second (cfs), or 2,250 gpm. 20 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview ¨¦§ 215 Los Alamos ¨¦§ Interconnection 15 N u tm "5 e g §¨¦ S t 15 tS Grizzly Ridge a Reservoir Site im Jefferson Ave tS la TU n K o m e L EVMWD Interconnection Adams Ave Adams Ave (Emergency Only) "5 Alson Booster Pump Station ÚÐ ¼ Washington Ave St y v I North Well ") New Clay Well St ") n o r St mi a St H a wt h G u a v a Hayes Ave al Hayes Ave K TU Olga Gordon Reservoir Site ÚÐ LOS Study Area ¼ Booster Pump Station Pressure Zone ANGELES BERN S A A R N DINO County Boundary TU 1280 Figure 2-2 Existing Reservoir Site City Boundary 1430 ") Production Well Study Area RIVERSIDE Interstate Highway "5 Interconnection Point Water System Facilities ORANGE State Highway 4 - 10 in Notes: Local Roads 1. Production Wells are labeled in green text. Riverside LAFCO 12 - 16 in 2. Booster Pump Stations are leabeled in gray text. 0 1,000 2,000 Focused Water Municipal SAN DIEGO Murrieta Creek 3. Reservoirs are labeled in blue text. 24 in 4. Interconnections are labeled in red text. Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.seitilicaF metsyS retaW aerA ydutS .2-2 erugiF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area 2.2.2 MWD Annexation Imported water supply from the Study Area is purchased from Metropolitan Water District (MWD) through EMWD, at the Los Alamos Interconnection Point. Service areas receiving MWD water must pay an MWD Annexation Charge. The 2020 MWD Annexation Charge is $6,151 per acre. For most MWD customers, the Annexation Charge is paid in aggregate for the entire service area, regardless of connection status. That is, when a service area is annexed into the MWD service area, parcels with existing water service connections pay the MWD Annexation Charge, and undeveloped parcels without water service also pay the MWD Annexation Charge. With WMWD, the situation is different. In December 1999, an agreement between MWD, EMWD, WMWD, and the Murrieta County Water District and MWD was executed. This agreement specified that the entirety of the Murrieta County Water District would be annexed into the MWD Service Area, but only the portion of the Murrieta County Water District that has paid the MWD Annexation Charge could receive water from MWD. As a result, there are portions of the Study Area that have not yet paid the MWD Annexation Charge. In Figure 2-3, obtained from WMWD, portions of the Study Area that have not paid the MWD Annexation Charge are shown in yellow. Section 11 of the 1999 Agreement states that the agreement shall be binding to successors, so for the purposes of this analysis, it is assumed that the 1999 Agreement would be assignable to either RCWD or EMWD. The need for some future development to pay the MWD Annexation Charges is the same under all Ownership Scenarios described in this report, and as a result, is not included in the quantitative financial analysis. The 1999 agreement terminates in 2024. It is also assumed that regardless of the ownership scenario, the future owner will be able to extend the agreement. The current outstanding Annexation Charge balance is approximately $12M. If the agreement is not extended, it is possible that MWD would require the outstanding balance to be paid by the owner of the water system or de-annex parcels that haven’t paid the Annexation Charge, regardless of which agency owned the water system. The current number of service connections in the Study Area, summarized by meter size, can be seen in Table 2-1. The majority of the meters currently in the Study Area are ¾-inch meters that serve single family residential connections. A large number of parcels in the Study Area are currently served by private wells. Therefore, land within the study area is classified as Developed-Served, if it currently has service from the distribution system, Developed-Unserved, if it currently developed but provided service by private well, or Vacant, if the land is undeveloped and available for development in the future. 22 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview ¨¦§ 215 ¨¦§ 15 N u tm e g §¨¦ S t 15 tS a im Jefferson Ave tS la n K o m e L Adams Ave Adams Ave Washington Ave St y v I St n o r St mi a St H a wt h G u a v a Hayes Ave al Hayes Ave K LOS Study Area No Data ANGELES SAN BERNARDINO County Boundary Not Paid Figure 2-3 City Boundary Paid MWD Annexation RIVERSIDE Interstate Highway Fee Payment Map ORANGE State Highway Local Roads Riverside LAFCO 0 1,000 2,000 Focused Water Municipal SAN DIEGO Murrieta Creek Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.paM tnemyaP eeF noitcaxennA DWM .3-2 erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area Table 2-1. Current Number of Water System Connections by Connection Type Single Family Multi Family Non- Meter Size Residential Residential Residential Irrigation Fire Protection Total ⅝" 347 2 25 3 105 482 ¾" 1,939 6 10 3 10 1,968 1" 76 51 45 172 1.5" 1 31 45 77 2" 1 41 75 44 161 3" 4 1 5 4" 2 2 4 Total 2,364 51 198 141 115 2,869 Source: WMWD, 2/19/2020. Based on connection meter export at January 15, 2020. 2.2.3 Rancho California Water District Rancho California Water District provides service directly adjacent to the Murrieta Service Area to the south, west, and north. Large diameter transmission mains in the in the RCWD system traverse the Murrieta Service Area. The lowest pressure zone in the RCWD distribution system serves a hydraulic grade line (HGL) of 1,305 feet. 2.2.4 Eastern Municipal Water District Eastern Municipal Water District serves parcels directly adjacent to the east of the Murrieta Service Area. EMWD’s distribution system runs directly to the border of the Murrieta Service Area at the Los Alamos Interconnection, but does not traverse the service area. The EMWD pressure zone adjacent to the Murrieta Service Area serves an HGL of 1,384 feet. 24 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 3.0 AGENCY INFRASTRUCTURE POLICIES The following policies and assumptions were implemented to evaluate the infrastructure requirements for service for each of the candidate agencies. 3.1 Water Supply Policies As described above, the Study Area is currently served by the New Clay Well and the Los Alamos Interconnection with EMWD. WMWD is currently developing the North Well, which is a replacement for a well of the same name that is no longer operational. This replacement well is designed to recover the capacity lost from the original North Well. Historically, WMWD was able to supply 1,452 acre feet per year (AF/year) of water supply for the study area, with original North Well and the New Clay Well operating. Therefore, it was directed that 1,452 AF/year be supplied by the replacement North Well and the New Clay well for the purposes of this analysis. Any required water supply beyond this amount is to be supplied by the candidate agency in the manner they determine to be most appropriate. The value of 1,452 AF/year is a volume of water supply that can be sustained over a typical year. The design capacity of the New Clay Well is 450 gpm, and the design capacity of the North Well is expected to be 700 gpm. The resulting well capacity for the study area 1,150 gpm, which would result in over 1,800 AF/year of supply if both wells were run constantly for a year. Because wells cannot be run constantly for a year, the more sustainable volume of 1,452 AF/year is used for water supply purposes. However, the well capacity of 1,150 gpm is used for infrastructure analysis. 3.2 Water Demand Policies A general description of demand peaking as well as a discussion of the demand peaking policies used in this analysis are provided below. Policies concerning which parcels in the Study Area will be served in the future are provided as well. 3.2.1 Demand Peaking Description Water system demands are generally developed from average values that that can be measured reliably over time, but water system facilities are generally sized for peak demands. Therefore, it is critical to be able to calculate representative and appropriate peak demand values from average values. The peaking conditions of most concern for water facility sizing are Maximum Day Demands (MDD) plus fire flow and peak hour demand (PHD) on the maximum day. Average Day Demand (ADD) is the average annual water use divided by the number of days in the year. MDD is the highest demand day of the year, averaged over a 24-hour period. Peak Hour Demand (PHD) is the highest demand rate occurring over a 1-hour period during the MDD. Peak water use is typically expressed as a ratio, or peaking factor. The MDD peaking factor is calculated by dividing the maximum day water use by the average daily water use and the PHD peaking factor is calculated by dividing the peak hour water use by the maximum day water use. These peaking factors are then used, along with existing or future ADD values, to project maximum day and peak hour water use for existing or future conditions. 25 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 3.2.2 Demand Peaking Policies In previous master planning and hydraulic analysis for the Study Area, WMWD has used a peaking factor of 2.7 to calculate MDD from ADD. EMWD varies the MDD/ADD peaking factor according to the size pressure zone being evaluated. EMWD’s peak factor would be 2.5 for a similarly sized pressure zone. RCWD uses a consistent MDD/ADD peak factor of 2.0. For the purposes of this study, a peaking factor of 2.5 was used for the MDD/ADD ratio. All of the candidate agencies use a peaking factor of 2.0 to develop PHD from MDD. A PHD/MDD ratio of 2.0 was used in this analysis. 3.2.3 Build-Out Service Policies In previous master planning efforts for the Study Area, WMWD assumed full build-out conditions for future hydraulic evaluations. This assumption indicates that both Vacant parcels and Developed-Unserved parcels (parcels currently served by private wells) will be connected to and served by the distribution system at some point in the future. This assumption was conservative and designed to make sure that infrastructure and supply evaluations account for all possible future connections no matter how unlikely their potential connection, and the assumption did not reflect any potential policy decisions concerning private wells. For this evaluation, it was directed that future demands should include parcels that are reasonably likely to connect to the distribution system, not all possible parcels in the Study Area. Vacant parcels are considered likely to connect and are assumed to connect to the distribution system. Developed-Unserved parcels within 1,000 feet of an existing or future distribution system water main are considered likely to connect because the cost to connect in such a case is considered reasonable. Therefore, Developed-Unserved parcels within 1,000 feet of an existing or future distribution system water main are assumed to connect to the distribution system in the future. Developed-Unserved parcels farther than 1,000 feet from the distribution system are considered unlikely to connect to the distribution system (they are likely to remain on private well supply) and are assumed to remain unserved in the future. None of the assumptions described above have any impact on individual parcels or on the decisions of individual property owners concerning water service. The assumptions are generalized and intended only to project water demands to correctly identify future supply requirements and correctly size future infrastructure. 26 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Figure 3-1 provides a map of the Study Area indicating the parcel status described above. In this map: • Purple shaded areas are parcels with existing wells (Developed-Unserved) within 1,000 feet of a distribution system pipeline. As noted above, these parcels are assumed to connect to the system for the purposes of sizing facilities. • Pink shaded areas are parcels with existing wells (Developed-Unserved) that are not within 1,000 feet of an existing pipe and are not assumed to connect to the public water system. • Blue shaded areas are undeveloped parcels (Vacant) which are assumed to connect to the public water system when they develop. • Green shaded areas are parcels with existing service from the public water system, where continued service is expected. 27 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview ¨¦§ 215 Los Alamos ¨¦§ Interconnection 15 N u tm "5 e g §¨¦ S t 15 tS Grizzly Ridge a Reservoir Site im Jefferson Ave tS la TU n K o m e L EVMWD Interconnection Adams Ave Adams Ave (Emergency Only) "5 Alson Booster Pump Station ÚÐ ¼ Washington Ave St y v I North Well ") New Clay Well St ") n o r St mi a St H a wt h G u a v a Hayes Ave al Hayes Ave K TU Olga Gordon Reservoir Site ÚÐ LOS Study Area ¼ Booster Pump Station Parcels with Private Wells Within 1,000 ft of ANGELES SAN Existing Pipe - Assumed Service in Future BERNARDINO County Boundary TU Existing Reservoir Site Figure 3-1 Parcels with Private Wells - Assumed No City Boundary ") Production Well Service in Future Study Area with RIVERSIDE ORANGE Interstate Highway "5 Interconnection Point P S a e r r c v e ic l e s w in i t F h u E tu x r i e sting Service - Continued Existing Private Wells State Highway Existing Water Main Notes: Undeveloped Parcels - Assumed Service in 1. Production Wells are labeled in green text. Riverside LAFCO Local Roads Future 2. Booster Pump Stations are leabeled in gray text. 0 1,000 2,000 Focused Water Municipal SAN DIEGO Murrieta Creek 3. Reservoirs are labeled in blue text. 4. Interconnections are labeled in red text. Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.slleW etavirP gnitsixE htiw aerA ydutS .1-3 erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area 3.3 Infrastructure Performance Criteria In order to evaluate the water system facilities required to serve existing and future demands, the following criteria were defined and approved by the Agencies: 3.3.1 Pumps The ultimate pumping requirements used to analyze the build-out system are consistent with previous master plans. The pumping requirement states that the firm capacity of the pump station must be capable of meeting the MDD of the zone it is serving. Firm capacity of a pump station is defined as the total pumping capacity with the largest pump at the site out of service. Currently, the only pump station in the system is the WMWD Alson Booster Station that pumps water from the 1280 Zone into the 1430 Zone, which means the station must have a firm capacity to match the MDD of the 1430 Zone. 3.3.2 Storage The ultimate storage requirements used in this analysis are consistent with previous master plans. Storage for each zone must be able to meet the sum of the multiple criteria listed below. 3.3.2.1 Equalization Storage Pumping facilities in the system have been designed to meet build-out MDD as described below in Section 3.3.3. This means that anytime the demand in the system goes beyond MDD, the system storage must be able to provide the supply deficit. The equalization storage deemed necessary to account for these peak supply deficits was determined to be 25 percent of the MDD within each pressure zone. 3.3.2.2 Fire Flow Storage System storage also must account for any fire flow through the system. The fire flow storage requirements, found in Table 3-1 below, were updated by the City of Murrieta Fire Department in April of 2014. Table 3-1. Fire Flow Criteria Flow and Time Corresponding Property Classification Requirement Volume Needed, MG One- & two-family dwellings 1,500 gpm at 20 psi for 2 hours 0.18 Multi family dwellings 2,500 gpm at 20 psi for 2 hours 0.30 Commercial buildings/occupancies 3,000 gpm at 20 psi for 3 hours 0.54 Industrial buildings/occupancies 3,000 gpm at 20 psi for 4 hours 0.72 psi = pounds per square inch 29 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area The 1280 Zone contains buildings in all the categories listed above, therefore the requirement that was used for the 1280 Zone was the “Industrial buildings/occupancies” requirement of 3,000 gpm at 20 psi for 4 hours which equates to 0.72 MG. The 1430 Zone only contains residential connections, including a couple of parcels zoned for multi-family residential. Therefore the “multi family dwellings” requirement of 2,500 at 20 psi for 2 hours was used which equates to 0.30 MG. 3.3.2.3 Emergency Storage Emergency storage capacity would be needed to sustain the water needs during periods of total or partial shutdown of the water supply facilities. One-half (50 percent) of the MDD is used to calculate the emergency storage of each pressure zone. 3.3.2.4 Total Storage The total existing and build out storage required for each pressure zone is presented in Table 3-2. Table 3-2. Storage Criteria, MG Equalization Fire Flow Emergency Total Storage Zone Storage Storage Storage Required Existing Conditions 1280 0.97 0.72 1.94 3.64 1430 0.29 0.24 0.57 1.16 Buildout Conditions 1280 1.97 0.72 3.93 6.62 1430 0.46 0.30 0.93 1.69 Total 2.43 1.02 4.86 8.31 3.3.3 Pipelines The performance criteria used for pipelines is summarized below. • Maximum velocity of 6 feet/second in transmission pipelines under replenishment conditions • Maximum friction loss of 3.5 feet/1,000 feet of transmission line under replenishment conditions • Maximum velocity of 7.5 feet/second in any water pipelines during PHD or MDD plus emergency fire flow conditions • Transmission pipelines shall be no smaller than 12-in diameter • Pressure during normal operation is to be maintained at 40 psi or above • Residual pressure during fire flow is to be maintained at 20 psi or above 30 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 3.3.4 Fire Flow Fire flow criterion for each land use was outlined in a document provided by the City of Murrieta Fire Department and summarized below in Table 3-3. The criteria for amount of flow needed at each point throughout the system is the same criteria that was used to calculate the amount of fire flow storage necessary, as described above. The system was analyzed using these criteria, which were developed in 2013. It should be noted that hydrants may have been constructed before 2013 with different criteria. Table 3-3. Fire Flow Criteria, gpm Property Classification Flow Requirements One- & Two-Family Dwellings 1,500 Multi family dwellings 2,500 Commercial buildings / occupancies 3,000 Industrial building / occupancies 3,000 31 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 4.0 SYSTEM DEMANDS Existing and future system demands for the Study Area are described below. Metered water consumption data, compiled from water meter readings is presented, as is local groundwater production and imported water purchase data. 4.1 Existing Existing demands are described below. 4.1.1 Current Metered Water Consumption Table 4-1 shows current monthly consumption by WMWD Rate Tier, representing WMWD’s estimate of water demands for Calendar Year 2019. WMWD has five rate tiers linked to its budget based rate structure. Tier 1 is the water use corresponding to WMWD’s Indoor Budget, and Tier 1 water use is approximately 45 percent of the Study Area total. The remaining water use is primarily outdoor water use. Table 4-2 shows currently monthly consumption by WMWD connection class and WMWD rate tier, 100 cubic feet per year (ccf/year). Nearly 75 percent of Study Area water use is residential, approximately 10 percent is non-residential, and approximately 15 percent is irrigation. Detailed consumption data is provided as part of the financial models included in Appendix B. 32 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table 4-1. Current Monthly Water Use by WMWD Rate Tier Monthly Water Use, ccf Total Annual Tier Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Usage Tier 1 - Indoor Budget 28,000 30,000 28,000 36,000 38,000 50,000 50,000 40,000 40,000 38,000 35,000 42,000 455,000 Tier 2 - Outdoor Budget 19,000 20,000 17,000 30,000 48,000 50,000 68,000 58,000 50,000 36,000 30,000 25,000 451,000 Tier 3 - Inefficient 3,000 1,500 1,300 1,700 2,800 3,500 4,200 5,000 5,300 4,500 4,200 3,800 40,800 Tier 4 - Wasteful 1,500 1,200 1,000 800 1,200 1,400 1,700 2,100 2,300 2,200 2,100 2,000 19,500 Tier 5 - Unsustainable 3,500 2,000 1,800 1,900 2,400 2,900 2,200 4,000 3,500 3,800 4,400 5,000 37,400 Total 55,000 54,700 49,100 70,400 92,400 107,800 126,100 109,100 101,100 84,500 75,700 77,800 1,003,700 Source: WMWD, 2/19/2020. Based on customer meter export at January 15, 2020. Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Last Revised: 09-23-2020 Murrieta Service Ares Focused Municipal Services Review for the Murrieta Service Area Table 4-2. Current Annual Water Use by WMWD Connection Class and WMWD Rate Tier, ccf/year Single Multi Family Family Non- Fire Tier Residential Residential Residential Irrigation Protection Total Tier 1 - Indoor Budget 310,830 88,655 55,514 0 0 455,000 Tier 2 - Outdoor Budget 292,899 2,475 36,898 118,728 0 451,000 Tier 3 - Inefficient 13,424 1,924 5,514 19,938 0 40,800 Tier 4 - Wasteful 4,470 730 2,372 11,929 0 19,500 Tier 5 - Unsustainable 2,295 213 3,802 31,090 0 37,400 Total 623,918 93,996 104,100 181,686 0 1,003,700 Source: WMWD, 2/19/2020. Based on connection meter export at January 15, 2020. 4.1.2 Current Water Demand Water demand in this report refers to the sum of local groundwater production from WMWD wells plus imported regional water. WMWD estimates its water demand as the amount of metered consumption (shown above in Tables 4-1 and 4-2, plus 3.5 percent non-revenue water which is typically water lost through pipe leaks or water use that isn’t metered. The CY 2019 estimate water demand provided by WMWD is as follows: • Total metered consumption: 2,304 AF/year • Plus 3.5 percent non-revenue water: 84 AF/year • Total demand: 2,388 AF/year There are three sources of water for the Study Area • North Well • New Clay Well • Imported Water, purchased from EMWD at the Los Alamos Interconnection Currently, the North Well is out of service with repairs currently in construction. After the repairs are complete, WMWD anticipates local groundwater production would return to the historic amount 1,452 AF/year. WMWD’s analysis was based on the production capacities of the North Well and the New Clay Well assuming the well pumps are operational no more than 90 percent of the time. Additionally, seasonal variations in water demands were recognized by WMWD. In some months, local groundwater could meet all projected Study Area demands without requiring imported water. In other months, and during the summer, imported water is necessary. The Consultant Team was not asked to assess the local aquifer capacity to produce 1,452 AF/year and is relying on WMWD’s prior assessment and production that sufficient aquifer capacity exists to produce 1,452 AF/year. 34 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area The projected demands of 2,388 acre-feet per year is approximately 15 percent higher than what was used in the infrastructure analysis (described in Sections 5 and 6 of this report) in the hydraulic analysis of the existing distribution system under existing demands. The water demand used in the hydraulic analysis of the existing distribution system was obtained from a 2018 analysis prepared by Kennedy Jenks and does not reflect recent development in the Study Area. While it is lower than the current demands provided by WMWD, the difference in current demands is relevant to the projected buildout demands upon which the infrastructure analysis is based on. 4.2 Projected Projected demands are described below. 4.2.1 Projected System Development In 2018, Kennedy Jenks prepared an assessment of buildout demands in the Study Area. This assessment produced projected buildout demands that are approximately 80 percent higher than current demands. In 2017, Kennedy Jenks also prepared a draft assessment of demand forecasts in the Study Area. This assessment showed development projections in five-year ranges through 2040. The projected growth rates in five-year ranges were not used for the infrastructure analysis, but they were used for the financial analysis. For the purposes of this FMSR, the projected system growth rates between 2020 and 2030 were used to generate the projected growth rates in water demand and water connections needed to complete the financial analysis. The 2017 Kennedy Jenks analysis projects annual system growth in the Study Area of 1.62 percent between 2020 and 2025, and 1.63 percent between 2025 and 2030. Table 4-3 incorporates these projected growth rates and shows the projected number of water system connections through 2030. As of January 2020, there were 2,867 water system connections, and the number of connections is projected to increase to 3,365 by FY 29/30. On average, approximately 50 new water system connections are projected each year. 35 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table 4-3. Projected Number of Water System Customers Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 5/8" 482 490 498 506 514 522 530 538 546 554 563 3/4" 1,968 1,999 2,031 2,063 2,096 2,129 2,163 2,198 2,233 2,269 2,305 1" 172 175 178 181 184 187 190 193 196 199 202 1.5" 77 79 81 83 85 87 89 91 93 95 97 2" 161 164 167 170 173 176 179 182 185 188 191 3" 5 5 5 5 5 5 5 5 5 5 5 4" 2 2 2 2 2 2 2 2 2 2 2 Total 2,867 2,914 2,962 3,010 3,059 3,108 3,158 3,209 3,260 3,312 3,365 Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Last Revised: 09-23-2020 Murrieta Service Ares Focused Municipal Services Review for the Murrieta Service Area As part of this FMSR, the Consultant Team met with the City of Murrieta to review potential known development in the Study Area. The City identified the following examples of development in the Study Area: • A 210 unit apartment building, construction in progress • An assisted living facility, construction in progress • An approved four story development • Three developments with, combined, over 440 units that are either planned or in pre- application stages The City also mentioned that as of February 2020, the vacancy rate in the Murrieta business park is 0.5 percent, indicative of pent up demand for development. With the above information provided by the City, it appears that future development may exceed 50 connections per year, and that the financial analysis shown in Sections 7 and 8 of this is not overly dependent on development. 4.2.2 Projected System Demands The infrastructure analysis described in Sections 5 and 6 of this FMSR uses the following average demands at buildout, with the projected demands obtained from the 2018 Kennedy Jenks analysis: • Average day demand, current: 1,295 gpm (equal to 2,090 AF/year) • Average day demand, buildout: 2,338 gpm (approximately 80 percent higher than current) Table 4-4 shows the projected water demands through 2030. This table shows the total demand increasing at approximately 1.62 percent per year through 2030, and also shows that local groundwater production would be 1,452 AF/year after the North Well improvements are completed. All increases in water demands resulting from development would be accommodated from increased purchases of imported water 37 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table 4-4. Projected Sources of Water Supply, acre-feet per year Source FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 New Clay Well and North Well 363 1,452 1,452 1,452 1,452 1,452 1,452 1,452 1,452 1,452 1,452 Imported 2,025 936 974 1,014 1,054 1,094 1,136 1,178 1,221 1,264 1,308 Total 2,388 2,388 2,426 2,466 2,506 2,546 2,588 2,630 2,673 2,716 2,760 Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Last Revised: 05-04-2020 Murrieta Service Ares Focused Municipal Services Review for the Murrieta Service Area 5.0 INFRASTRUCTURE REQUIREMENTS West Yost performed analysis of system infrastructure needs currently, and at buildout. The scope of this FMSR did not include any separate effort to identify how to accommodate immediate development along the Jefferson Avenue corridor. The phasing of any area of development would be dependent on the specific owner/developer, their funding approach for infrastructure and the water agency ultimately recommended to serve the Murrieta Study Area. However, all areas of potential development are included in our analysis of the buildout condition. West Yost was provided an existing InfoWater model for the Murrieta Service Area by WMWD that was last updated in 2014. This model was updated to the most current geographic information system (GIS) infrastructure data and the most recent demand developments as part of the Draft 2018 WMP Update. The updated model was used as the basis of the hydraulic analysis for the infrastructure within the Murrieta Service Area. Because it was necessary to assess the hydraulic impact of supplying the Murrieta Service Area through the EMWD and RCWD distribution systems, EMWD and RCWD also supplied the most recent versions of their distribution system hydraulic models for this analysis. These models were also in the InfoWater Software platform. The following sections describe the infrastructure requirements for: • Western Municipal Water District • Rancho California Water District • Eastern Municipal Water District 5.1 Western Municipal Water District For each of the candidate agency’s potential Ownership Scenarios, specific infrastructure improvements are required to provide service while meeting the performance criteria described above. For each agency, these improvements are categorized by improvements required within the Study Area and improvements required outside of the Study Area to supply water to the Study Area. The improvements required for WMWD are described below. Detailed infrastructure evaluation results can be found in Appendix C. 5.1.1 Required Improvements within the Murrieta Service Area Required improvements within the Murrieta Service Area are described below. 5.1.1.1 Pump Capacity Evaluation The pumping requirements used to analyze the buildout system are defined above. The pumping requirement states that the firm capacity of the pumping station must be capable of meeting the MDD of the zone it is serving. Firm capacity of a pumping station is defined as the total pumping capacity with the largest pump at the site out of service. Currently, the only pump station in the system is the Alson Booster Pump Station that pumps water from the 1280 Zone into the 1430 Zone, which means the station must have a firm capacity to match the MDD of the 1430 Zone. The existing pump station contains a total of three 60 HP pumps each capable of pumping 800 gpm, giving it a firm capacity of 1,600 gpm, or 3.6 cubic feet per second (cfs). A 39 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Variable Frequency Drive (VFD) has been recommended for the pump station to reduce the velocity in pipelines that serve the pump station. The 1430 Zone has an existing MDD of 797 gpm, or 1.78 cfs which is below the firm capacity of the existing Alson Booster Pump Station. No upgrades to the booster station (with the exception of the VFD described above) are required for existing conditions. The 1430 Zone has a build-out MDD of 1,286 gpm, or 2.86 cfs which is below the firm capacity of the existing Alson Booster Pump Station. No upgrades to the booster station are required through build out. 5.1.1.2 Storage Capacity Evaluation Table 5-1 below presents the existing storage capacity for both pressure zones along with the amount of storage required as described above. Table 5-1. Existing Storage Summary Additional Storage Storage Additional Equalization Fire Flow Emergency Required, Existing Required, Storage Zone Storage, MG Storage, MG Storage, MG MG Storage, MG MG Required, ft3 1280 0.97 0.30 1.94 3.22 3.00 0.22 28,778 1430 0.29 0.24 0.57 1.10 1.90 - - Total 1.26 0.54 2.52 4.32 4.90 0.22 28,778 ft3 = cubic feet Using the existing MDD to calculate the existing storage requirements, the 1280 Zone is currently short by 0.22 MG. Table 5-2 below presents the existing storage capacity for both pressure zones along with the amount of storage required for build out conditions as described in Section 3. Table 5-2. Build-Out Storage Summary Ultimate Additional Storage Storage Additional Equalization Fire Flow Emergency Required, Existing Required, Storage Zone Storage, MG Storage, MG Storage, MG MG Storage, MG MG Required, ft3 1280 1.97 0.72 3.93 6.62 3.00 3.62 484,147 1430 0.46 0.30 0.93 1.69 1.90 - - Total 2.43 1.02 4.86 8.31 4.90 3.62 484,147 40 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Using the projected built out demands to calculate the required storage, an additional 3.62 MG of storage will be needed in the 1280 zone. The existing Olga Gordon site, however, is built out and constrained, and does not have any room for construction of the new storage. A new site approximately 4,000 ft northwest and sharing the same elevation as the Olga Gordon site was identified with the help of WMWD staff using GIS elevation data received from the County of Riverside. The new tank proposed to be constructed is a 4 MG steel tank with radius of 73 ft and a height of 32 ft. Around 2,100 ft of 24-inch diameter pipe and 2,100 ft of 21-inch diameter pipe will be required to connect the existing Olga Gordon tanks with the proposed tank. A junction will be made halfway between the tanks and an extra 1380 ft of 24-inch pipe is required to connect the junction to the existing system. Once both of the reservoir sites are connected to the existing system, 825 ft of existing 8-inch pipe will have to be upsized to 24-inches. The proposed alignment of the recommended storage and pipelines to connect that storage to the distribution system would be difficult to permit and construct. However, there are very few sites available that meet the topographic constraints necessary for storage in the 1280 Zone. 5.1.1.3 Pipeline Hydraulic Evaluation The model was run with the existing system, existing PHD, and the status quo supply to determine if any deficiencies currently existed in the Murrieta Service Area distribution system. After running hydraulic analysis, it was found no hydraulic deficiencies exist in the current system. Under the build out hydraulic evaluation, the amount of flow required to be supplied through EMWD to the Murrieta Service Area increases from 4.65 cfs to 10.47 cfs under MDD conditions. EMWD has stated that a second interconnection near the Los Alamos interconnection on Murrieta Hot Springs Road will be constructed to supply this higher flow value. The hydraulic analysis indicates that pipeline improvements are required in the Murrieta Service Area distribution system to convey this flow because maximum velocity criteria are violated. The analysis indicates that 1,295 feet of 12-in pipeline requires improvement to 16-in pipeline. 5.1.1.4 Expansion of the Distribution System Currently, only about 40 percent of the entire service area is being served water by WMWD. Most of the area not being served is at the southeast section of the service area and is split by Murrieta Creek, which runs northwest to southeast through the city. The unserved area north of the creek is currently Vacant free space. The unserved area south of Murrieta Creek has many parcels identified as Developed-Unserved with single family homes that have their own well supply for daily use. There are also vacant parcels that are assumed to require distribution system service in the future. The distribution system grid required to serve the areas north and south of Murrieta Creek was developed and sized using the hydraulic model. All pipelines projected in the grid were sized to handle appropriate fire flow requirements when service is provided. 41 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 5.1.1.5 Fire Flow Hydraulic Evaluation A fire flow analysis was run for the Murrieta Service Area distribution system. The intention of running a fire flow analysis is to determine the system’s ability to provide a given amount of flow at any specific point in the system and compare that to the City of Murrieta's fire flow criteria for the land use at that point in the system. Every location in the built-out system capable of having a fire hydrant was tested to see if it met the fire flow criteria for the type of land it is serving. The amount of flow available at each of these locations is limited by the residual pressure in the rest of the system as well as the velocity in the pipelines supplying the flow. The model measures the amount of flow that the system is capable of producing while every other connection in the system maintains a minimum residual pressure of 20 psi and the velocity in the expansion pipes is below 7.5 fps. The fire flow analysis identified specific infrastructure in the existing distribution system unequipped to handle current fire flow values. This infrastructure is primarily small diameter legacy pipelines that do not provide sufficient capacity and require upsizing as well as dead-end sections of pipeline that require more robust looping into the distribution system. 5.1.2 Required Offsite Improvements Outside the Murrieta Service Area As described above, under the WMWD Ownership Scenario water supply that is not met by groundwater production is met through purchased water supplied through EMWD’s distribution system. EMWD’s distribution system is appropriately sized to provide a maximum flow to the Los Alamos Interconnection of 5.0 cfs. This capacity is sufficient to provide the maximum existing flow requirement of 4.65 cfs under existing MDD conditions. The future requirement is that 10.47 cfs be provided by EMWD’s distribution system under MDD conditions. EMWD would provide the increased flow through a second interconnection on Murrieta Hot Springs Road. The second connection would provide greater resiliency at the higher flow rates. EMWD’s distribution system hydraulic model was used to evaluate the capacity requirements for providing 5.0 cfs of flow to the Los Alamos Interconnection and 5.47 cfs of flow to the proposed Murrieta Hot Springs Road Interconnection under future MDD conditions. Pipeline and tanks were evaluated as part of the analysis. Tanks were evaluated to make sure that storage was not drawn down during the supply of this flow. The analysis indicates that pipeline improvement projects identified in the EMWD 2015 Water Facility Master Plan will require implementation before the required flow can be supplied. In addition, newly identified projects specific to the Murrieta Service Area flow requirements will have to be implemented. In total, approximately 5,300 feet of 16-in pipeline require upgrading to 20-in pipeline, and another 2,400 feet of 16-in pipeline require improvement to 24-in. The improvements can be seen on Figure 5-1. 42 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview TU TU TU TU TU Las Brisas Tanks (EMWD) TUTUTTUU ¨¦§ 215 ÄÆ7 9 St g e m ut N Los Alamos ¨¦§ Interconnection New Murrieta 15 "5 §¨¦ Hot Springs Road 15 5" Interconnection Grizzly Ridge K a Reservoir Site tS lm n ia Jefferson Ave TU o S m t e L EVMWD Interconnection Adams Ave Adams Ave (Emergency Only) "5 Alson Booster Pump Station ÚÐ ¼ Washington Ave St y v North Well I New Clay Well ") ") St Hayes Ave K al mi a St Hayes Ave wt h o r n St G u a v a a H TU Proposed Olga Gordon Reservoir Site TU Reservoir Site ÚÐ LOS Study Area ¼ Booster Pump Station EMWD Existing Pipeline Pressure Zone ANGELES BERN S A A R N DINO County Boundary TU EMWD CIP (Murrieta) 1280 Figure 5-1 Existing Reservoir Site City Boundary TU EMWD CIP (Water Facilities Master Plan) 1430 WMWD Ownership Proposed Reservoir Site RIVERSIDE Interstate Highway Existing Water Main Scenario Improvements ORANGE State Highway ") Production Well Expansion Pipe - North of Murrieta Creek Notes: 1. Production Wells are labeled in green text. Local Roads "5 Interconnection Point Expansion Pipe - South of Murrieta Creek 2. Booster Pump Stations are leabeled in gray text. Riverside LAFCO 3. Reservoirs are labeled in blue text. 0 1,500 3,000 Focused Water Municipal SAN DIEGO Required CIP 4. Interconnections are labeled in red text. 5. Proposed facilities are labeled in purple text. Scale in Feet Service Review Murrieta Area Pipe to Proposed Storage 0202/03/11 - ronnococ - dxm.stnemevorpmI oiranecS pihsrednwO DWMW .1-5 erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area 5.1.3 WMWD Ownership Scenario Infrastructure Summary In summary, the Murrieta Service Area is not contiguous with other WMWD service areas. Therefore, infrastructure storage projects in the Murrieta Service Area and pipeline improvements in the EMWD service area are required for WMWD to provide service in the future. Because it is currently providing service to the Murrieta Service Area, WMWD has a proven ability to respond to emergency infrastructure repair and service calls in the area. 5.2 Rancho California Water District For each of the candidate agency’s potential Ownership Scenarios, specific infrastructure improvements are required to provide service while meeting the performance criteria described above. For each agency, these improvements are categorized by improvements required within the Study Area and improvements required outside of the Study Area to supply water to the Study Area. The improvements required for RCWD are described below. Detailed infrastructure evaluation results can be found in Appendix C. 5.2.1 Required Improvements within the Murrieta Service Area As described above, RCWD serves customers to the south, west, and north of the Murrieta Service Area, and has transmission mains that are within the service area. There are a variety of ways that the RCWD distribution system can be connected to the Murrieta Service Area distribution system. The RCWD pressure zone that neighbors the Murrieta Service Areas serves water at an HGL of 1,305 feet, compared to an HGL on 1,280 for the lower pressure zone in the Murrieta Service Area, so an interconnection between the Murrieta Service Area and the RCWD distribution system that includes a Pressure Reducing Valve was identified to provide service. Several potential connection points were identified and tested. An interconnection between the two systems near the intersection of Adams Avenue and Kalmia Street was identified as the connection point that minimized the amount of infrastructure improvements required. There is a 30-in transmission main owned by RCWD in Adams Avenue. The evaluation results below all utilize this proposed interconnection. 5.2.1.1 Pump Capacity Evaluation The pumping evaluation described above for the WMWD Ownership Scenario does not change for RCWD ownership. No improvements to the Alson Booster Pump Station are required. 5.2.1.2 Storage Capacity Evaluation As described above, the Murrieta Service Area is short of storage in both existing and future conditions. RCWD requires 63.75 percent of MDD demands for operational and emergency storage, plus sufficient storage for fire flow. Currently, the RCWD 1,305 pressure zone has storage requirements of 12.14 MG compared to 22.71 MG of actual storage. There is ample storage in the RCWD 1,305 pressure zone to provide the required storage in the Murrieta Service Area. The storage requirements in the RCWD 1,305 pressure zone are projected to grow to 25.3 MG by build out. RCWD plans a 4.81 MG reservoir in this pressure zone that will provide sufficient future storage for both RCWD and Murrieta Service Area demands. Therefore, 44 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area storage specific to the Murrieta Service Area will not require construction for the RCWD Ownership Scenario. 5.2.1.3 Pipeline Hydraulic Evaluation The model was run with the existing system, existing PHD, and the Adam/Kalmia supply to determine if any deficiencies currently existed in the Murrieta Service Area distribution system. After running hydraulic analysis, it was found no hydraulic deficiencies exist in the current system. Under the build out hydraulic evaluation, the amount of flow required to be supplied through the RCWD distribution system to the Murrieta Service Area would require improvements in the Murrieta Service Area. The hydraulic analysis indicates that pipeline improvements are required in the Murrieta Service Area distribution system to convey this flow because maximum velocity criteria are violated. The analysis indicates that approximately 4,000 feet of 8-inch and 12-inch pipeline requires improvement to 16-inch pipeline. 5.2.1.4 Expansion of the Distribution System The expansion of the service area under the RCWD Ownership Scenario is identical to that under the WMWD Ownership Scenario. Currently, only about 40 percent of the entire service area is being served water by the Murrieta Service Area. Most of the area not being served is at the southeast section of the service area and is split by Murrieta Creek, which runs northwest to southeast through the city. The unserved area north of the creek is currently Vacant free space. The unserved area south of Murrieta Creek has many parcels identified as Developed-Unserved with single family homes that have their own well supply for daily use. There are also vacant parcels that are assumed to require distribution system service in the future. The distribution system grid required to serve the areas north and south of Murrieta Creek was developed and sized using the hydraulic model. All pipelines projected in the grid were sized to handle appropriate fire flow requirements when service is provided. 5.2.1.5 Fire Flow Hydraulic Evaluation The fire flow hydraulic evaluation for the RCWD Ownership Scenario does not change from that provided above for the WMWD Ownership Scenario. A fire flow analysis was run for the Murrieta Service Area distribution system. The intention of running a fire flow analysis is to determine the system’s ability to provide a given amount of flow at any specific point in the system and compare that to the City of Murrieta's fire flow criteria for the land use at that point in the system. Every location in the built-out system capable of having a fire hydrant was tested to see if it met the fire flow criteria for the type of land it is serving. The amount of flow available at each of these locations is limited by the residual pressure in the rest of the system as well as the velocity in the pipelines supplying the flow. The model measures the amount of flow that the system is capable of producing while every other connection in the system maintains a minimum residual pressure of 20 psi and the velocity in the expansion pipes is below 7.5 fps. The fire flow analysis identified specific infrastructure in the existing distribution system unequipped to handle current fire flow values. This infrastructure is primarily small diameter legacy pipelines that do not provide sufficient capacity and require upsizing as well as dead-end sections of pipeline that require more robust looping into the distribution system. 45 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 5.2.2 Required Offsite Improvements Outside the Murrieta Service Area RCWD’s InfoWater hydraulic model was used to assess the hydraulic impact of supplying flow to the Murrieta Service Area. The evaluation was performed by placing the MDD of the Murrieta Service Area into the RCWD model as a point load, applying the diurnal pattern for the service area taken from the Murrieta Service Area hydraulic model, and running existing and future MDD scenarios. For these scenarios, it was assumed that the flow for the Murrieta service area would be provided by RCWD’s WR26 and WR28 connections from WMWD. The hydraulic results indicate that minor pipeline deficiencies in the area of the WR26 and WR28 connections and in Jefferson Avenue outside of the Murrieta Service Area are present in the distribution system for RCWD’s 1,305 pressure zone both with and without the Murrieta Service Area connection. The deficiencies are not significantly impacted by the service connection. Improvements to RCWD’s distribution system are not required for service. The improvements required for the RCWD ownership scenario can be found on Figure 5-2. 5.2.3 RCWD Ownership Scenario Infrastructure Summary In summary, the Murrieta Service Area is in close proximity to areas currently provided service by RCWD, and there is RCWD transmission infrastructure that currently extends under the service area. The result of this proximity is that the Murrieta Service Area can be integrated into RCWD’s 1,305 pressure zone, which has sufficient storage and pipeline capacity to provide service without extensive improvements. Furthermore, although the following elements were not quantitatively defined through hydraulic modeling, it follows logically that the RCWD transmission and storage infrastructure in the 1,305 pressure zone provides the following to the Murrieta Service Area: • Reservoir storage provides emergency resiliency • Local groundwater wells provide local water supply resiliency • Multiple MWD turnouts from multiple pipelines and multiple wholesaler agencies provide imported water supply resiliency • Potential availability of recycled water, as RCWD provides to other customers in the 1,305 pressure zone, provides water supply resiliency • Existing transmission pipelines in the Murrieta Service Area provide potential to service specific future customers without extensive infrastructure improvements RCWD provides emergency infrastructure and service calls to its service area in close proximity to the Murrieta Service Area, and it is assumed that it would be able to provide such service to the Murrieta Service Area. 46 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview ¨¦§ 215 ÄÆ7 9 St g e m ut N §¨¦ 15 Grizzly Ridge Reservoir Site New Adams/Kalmia Jefferson Ave ¨¦§ tS Interconnection 15 EVMWD Interconnection Alson Booster Adams Ave n o 5" Adams Ave (Emergency Only) Pump Station m e L Washington Ave New St St Clay r n North Well St I v y Well a wt h o a St a H v Hayes Ave mi Hayes Ave u a al G K RCWD's WR26/28 Connection 5" Olga Gordon Reservoir Site ÚÐ LOS Study Area ¼ Booster Pump Station Recommended CIP for RCWD Supply Pressure Zone ANGELES BERN S A A R N DINO County Boundary TU RCWD Pipeline 1280 Figure 5-2 Existing Reservoir Site City Boundary RCWD Pipeline with Capacity Constraint (With 1430 ") Production Well and Without Murrieta Service) RCWD Ownership RIVERSIDE Interstate Highway ORANGE "5 Interconnection Point Existing Water Main Scenario Improvements State Highway Notes: Expansion Pipe - North of Murrieta Creek Local Roads 1. Production Wells are labeled in green text. Riverside LAFCO Expansion Pipe - South of Murrieta Creek 2. Booster Pump Stations are leabeled in gray text. 0 2,000 4,000 Focused Water Municipal SAN DIEGO 3. Reservoirs are labeled in blue text. 4. Interconnections are labeled in red text. Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.stnemevorpmI oiranecS pihsrenwO DWCR .2-5 erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area 5.3 Eastern Municipal Water District For each of the candidate agency’s potential Ownership Scenarios, specific infrastructure improvements are required to provide service while meeting the performance criteria described above. For each agency, these improvements are categorized by improvements required within the Study Area and improvements required outside of the Study Area to supply water to the Study Area. The improvements required for EMWD are described below. Detailed infrastructure evaluation results can be found in Appendix C. Because EMWD currently supplies water through contract with WMWD at the Los Alamos Interconnection, the EMWD Ownership Scenario provides water to the Murrieta Service Area in similar fashion to the WMWD Ownership Scenario. The analysis below includes the existing interconnection at Los Alamos Road and the future proposed connection at Murrieta Hot Springs Road. 5.3.1 Required Improvements within the Murrieta Service Area Required improvements within the Murrieta Service Area are described below. 5.3.1.1 Pump Capacity Evaluation The pumping evaluation described above for the WMWD Ownership Scenario does not change for EMWD ownership. No improvements to the Alson Booster Pump Station are required. 5.3.1.2 Storage Capacity Evaluation As described above, the Murrieta Service Area is short of storage in both existing and future conditions. The EMWD 1,384 pressure zone contains enough storage to offset the slight deficit under existing conditions. Under build-out conditions, the 1,384 pressure zone is short of storage. EMWD is planning to move the Hunter Tank to a more operationally suitable location and increase the capacity of the tank to provide storage at build-out for this pressure zone. EMWD’s current Capital Improvement Program (CIP) identifies 3.0 MG of storage to serve EMWD’s build out demands in this zone. Increasing the size of this proposed tank from 3.0 MG to 4.1 MG will provide the required build out storage, including the demands from the Murrieta Service Area. 5.3.1.3 Pipeline Hydraulic Evaluation The analysis for the EMWD Ownership Scenario does not differ from that for the WMWD scenario. The model was run with the existing system, existing PHD, and the EMWD supply to determine if any deficiencies currently existed in the Murrieta Service Area distribution system. After running hydraulic analysis, it was found no hydraulic deficiencies exist in the current system. Under the build out hydraulic evaluation, the amount of flow required to be supplied through EMWD to the Murrieta Service Area increases from 4.65 cfs to 10.47 cfs under MDD conditions. EMWD has stated that a second interconnection near the Los Alamos interconnection on Murrieta Hot Springs Road will be constructed to supply this higher flow value. The hydraulic analysis indicates that pipeline improvements are required in the Murrieta Service Area 48 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area distribution system to convey this flow because maximum velocity criteria are violated. The analysis indicates that 1,295 feet of 12-in pipeline requires improvement to 16-in pipeline. 5.3.1.4 Expansion of the Distribution System The analysis for the EMWD Ownership Scenario does not differ from that for the WMWD scenario. Currently, only about 40 percent of the entire service area is being served water by WMWD. Most of the area not being served is at the southeast section of the service area and is split by Murrieta Creek, which runs northwest to southeast through the city. The unserved area north of the creek is currently Vacant free space. The unserved area south of Murrieta Creek has many parcels identified as Developed-Unserved with single family homes that have their own well supply for daily use. There are also vacant parcels that are assumed to require distribution system service in the future. The distribution system grid required to serve the areas north and south of Murrieta Creek was developed and sized using the hydraulic model. All pipelines projected in the grid were sized to handle appropriate fire flow requirements when service is provided. 5.3.1.5 Fire Flow Hydraulic Evaluation The analysis for the EMWD Ownership Scenario does not differ from that for the WMWD scenario. A fire flow analysis was run for the Murrieta Service Area distribution system. The intention of running a fire flow analysis is to determine the system’s ability to provide a given amount of flow at any specific point in the system and compare that to the City of Murrieta's fire flow criteria for the land use at that point in the system. Every location in the built-out system capable of having a fire hydrant was tested to see if it met the fire flow criteria for the type of land it is serving. The amount of flow available at each of these locations is limited by the residual pressure in the rest of the system as well as the velocity in the pipelines supplying the flow. The model measures the amount of flow that the system is capable of producing while every other connection in the system maintains a minimum residual pressure of 20 psi and the velocity in the expansion pipes is below 7.5 fps. The fire flow analysis identified specific infrastructure in the existing distribution system unequipped to handle current fire flow values. This infrastructure is primarily small diameter legacy pipelines that do not provide sufficient capacity and require upsizing as well as dead-end sections of pipeline that require more robust looping into the distribution system. 5.3.2 Required Offsite Improvements Outside the Murrieta Service Area Identically to the WMWD Ownership Scenario described above, under the EMWD Ownership Scenario water supply that is not met by groundwater production is met through purchased water supplied through EMWD’s distribution system. EMWD’s distribution system is appropriately sized to provide a maximum flow to the Los Alamos Interconnection of 5.0 cfs. This capacity is sufficient to provide the maximum existing flow requirement of 4.65 cfs under existing MDD conditions. The future requirement is that 10.47 cfs be provided by EMWD’s distribution system under MDD conditions. EMWD would provide the increased flow through a second interconnection on Murrieta Hot Springs Road. The second connection would provide greater resiliency at the higher flow rates. 49 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area EMWD’s distribution system hydraulic model was used to evaluate the capacity requirements for providing 5.0 cfs of flow to the Los Alamos Interconnection and 5.47 cfs of flow to the proposed Murrieta Hot Springs Road Interconnection under future MDD conditions. Pipeline and tanks were evaluated as part of the analysis. Tanks were evaluated to make sure that storage was not drawn down during the supply of this flow. The analysis indicates that pipeline improvement projects identified in the EMWD 2015 Water Facility Master Plan will require implementation before the required flow can be supplied. In addition, newly identified projects specific to the Murrieta Service Area flow requirements will have to be implemented. In total, approximately 5,300 feet of 16-inch pipeline require upgrading to 20-in pipeline, and another 2,400 feet of 16-inch pipeline require improvement to 24-inch. The improvements required for the EMWD ownership scenario can be found on Figure 5-3. 5.3.3 EMWD Ownership Scenario Infrastructure Summary In summary, the Murrieta Service Area borders an area currently served by EMWD, and EMWD currently provides water to the Murrieta Service through the Los Alamos interconnection. The Murrieta Service Area can be integrated into EMWD’s 1,384 pressure zone and be served under existing conditions with no improvements to EMWD infrastructure. Future demands will require improvements to EMWD pipelines. The storage provided in the 1,384 pressure zone eliminates the need for a storage improvement in the Murrieta Service Area and increases the emergency resiliency of the Murrieta Service Area. EMWD provides emergency infrastructure and service calls to its service area in close proximity to the Murrieta Service Area, and it is assumed that it would be able to provide such service to the Murrieta Service Area. 50 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview TUTUTU TU TU TUTU TU TU TU Proposed Reservoir Site Las Brisas Tanks (EMWD) TUTUTTUU ¨¦§ 215 ÄÆ7 9 St g e m ut N Los Alamos ¨¦§ Interconnection New Murrieta 15 "5 §¨¦ Hot Springs Road 15 5" Interconnection Grizzly Ridge K a Reservoir Site tS lm n ia Jefferson Ave TU o S m t e L EVMWD Interconnection Adams Ave Adams Ave (Emergency Only) "5 Alson Booster Pump Station ÚÐ ¼ Washington Ave St y v North Well I New Clay Well ") ") St Hayes Ave K al mi a St Hayes Ave wt h o r n St G u a v a a H TU Olga Gordon Reservoir Site ÚÐ LOS Study Area ¼ Booster Pump Station EMWD Existing Pipeline Pressure Zone ANGELES BERN S A A R N DINO County Boundary TU EMWD CIP (Murrieta) 1280 Figure 5-3 Existing Reservoir Site City Boundary TU EMWD CIP (Water Facilities Master Plan) 1430 EMWD Ownership Propsoed Reservoir Site RIVERSIDE Interstate Highway Existing Water Main Scenario Improvements ORANGE State Highway ") Production Well Expansion Pipe - North of Murrieta Creek Notes: 1. Production Wells are labeled in green text. Local Roads "5 Interconnection Point Expansion Pipe - South of Murrieta Creek 2. Booster Pump Stations are leabeled in gray text. Riverside LAFCO 3. Reservoirs are labeled in blue text. 0 1,500 3,000 Focused Water Municipal SAN DIEGO Required CIP 4. Interconnections are labeled in red text. 5. Proposed facilities are labeled in purple text. Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.stnemevorpmI oiranecS pihsrenwO DWME .3-5 erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Focused Municipal Services Review for the Murrieta Service Area 6.0 COST ESTIMATES West Yost developed opinion of the probable construction cost for the planning and design of the recommended infrastructure identified in the sections above. The opinion of probable construction cost was developed based on a combination of data supplied by manufacturers, published industry standard cost data and curves, construction costs for similar facilities built by other public agencies, and construction costs previously estimated by West Yost for similar facilities with similar construction cost indexes. Additionally, the costs presented in this document are for construction only and do not include uncertainties in estimation or unexpected construction costs (e.g., variations in final quantities) or specific cost estimates for engineering, legal costs, environmental review, soils investigation, surveying, construction management, and inspections and/or contract administration. Some of these additional cost items are referred to as contingency costs or mark-ups, and are further described below. The opinion of probable construction cost has been adjusted to reflect January 2020 dollars based on an Engineering News Record (ENR) Construction Cost Index (CCI) of 11,392 (20-Cities Average). These construction costs are to be used for conceptual cost estimates only, and should be updated regularly. Construction costs are not intended to represent the lowest prices in the industry for each type of construction; rather they are representative of average or typical construction costs. These planning-level construction costs have been prepared for guidance in evaluating various facility improvement options, and are intended for budgetary purposes only, within the context of this planning effort. The cost estimates prepared for this document are in accordance with the guidelines of the Association for the Advancement of Cost Engineering (AACE) International for a Class 5 Estimate, suitable for long-range capital planning, with an accuracy range of -50 percent to +100 percent. Construction costs were developed based on bids from other water system design projects and from standard cost estimating guides. 6.1 Description of Unit Costs Unit costs are broken down by type of infrastructure in the sections below. 6.1.1 Pipeline Unit Costs Table 6-1 presents unit base construction costs for potable water pipelines 8 through 24-inches in diameter. These unit costs are for pipeline construction in developed areas and are representative of pipeline construction conducted under common or normal conditions, which would be significantly higher under special or difficult conditions. The unit base construction costs presented below generally include pipeline materials, trenching, placing and jointing pipe, valves, fittings, hydrants, service connections, placing imported pipe bedding, native backfill material, and asphalt pavement replacement, if required. However, the costs presented in Table 6-1 do not include the cost of boring and jacking pipe. 52 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-1. Unit Base Construction Costs for Pipelines Unit Base Construction Cost, Pipeline Diameter, inches $/linear foot 8 187 10 225 12 247 14 275 16 302 20 330 24 352 30 401 6.1.2 Tank Unit Costs Table 6-2 summarizes the construction costs for water storage reservoirs for the size range of 0.1 to 6.0 MG. These costs generally include the installation of the storage tank, site piping, earthwork, paving, instrumentation, and all related sitework. Costs do not include land acquisition. It should be noted that these costs are representative of construction conducted under normal excavation and foundation conditions, and would be significantly higher for special or difficult foundation requirements. Costs also assume relatively minor earthwork and grading to level the tank site and does not include significant grading or excavation to clear a site for a tank. Cost assumptions are for above grade welded steel tanks. Table 6-2. Base Construction Costs for Welded Steel Water Storage Reservoirs Estimated Base Construction Cost, Capacity, MG million dollars 0.1 1.4 0.5 1.9 1.0 2.4 2.0 3.2 3.0 4.0 4.0 4.7 5.0 5.4 6.0 6.2 53 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 6.1.3 Contingency Costs and Mark-ups Contingency costs or mark-ups must be reviewed on a case-by-case basis because they will vary considerably with each construction project. However, to assist District staff with budgeting for recommended water system facility improvements, the following percentages were developed. • Estimating Contingencies (30 percent): The construction costs presented above are representative of the construction of wastewater collection system facilities under normal construction conditions and schedules; consequently, it is appropriate to allow for estimating and construction uncertainties unavoidably associated with the conceptual planning of projects. Factors such as unexpected construction conditions, the need for unforeseen mechanical items, and variations in design and final quantities are only a few of the items that can increase project costs. • Design and Construction Period Services (30 percent): Design period services associated with new facilities include preliminary investigations and reports, right-of-way acquisition, foundation explorations, preparation of drawings and specifications for construction, surveying and staking, sampling of testing material, and start-up services. Design period services also include permitting and regulatory compliance, as well as District administration, legal, and associated activities. Construction period services cover items such as contract management and inspection during construction. The total markup, including contingencies and professional services, is compounded, and amounts to 69 percent of the estimated construction cost. However, it must be noted that for smaller or more complicated projects, the design cost may increase by 10 to 20 percent of the estimated construction cost. 6.2 Conceptual Project Costs The following lists the costs evaluated for each district; detailed cost estimates are shown in Tables 6-3 through 6-18. 6.2.1 Western Municipal Water District The following is a list of costs evaluated for WMWD: • Pipelines Associated with Storage, Table 6-3 • Expansion CIP North of Murrieta Creek, Table 6-4 • Expansion CIP South of Murrieta Creek, Table 6-5 • Hydraulic Improvements, Table 6-6 • Fire Flow Improvements, Table 6-7 • Supply Improvements Through EMWD, Table 6-8 54 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 6.2.2 Rancho California Water District The following is a list of costs evaluated for RCWD, addressing storage needs through payment of RCWD connection fee: • Hydraulic Improvement, Table 6-9 • Expansion CIP North of Murrieta Creek, Table 6-10 • Expansion CIP South of Murrieta Creek, Table 6-11 • Supply Improvements through RCWD, Table 6-12 6.2.3 Eastern Municipal Water District The following is a list of costs evaluated for EMWD: • Storage (Hunter Tank), Table 6-13 • Hydraulic Improvements, Table 6-14 • Expansion CIP North of Murrieta Creek, Table 6-15 • Expansion CIP South of Murrieta Creek, Table 6-16 • Fire Flow Improvements, Table 6-17 • Supply Improvements Through EMWD, Table 6-18 55 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-3. WMWD Storage CIP (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 20 2105.83 741,000 24 4284.45 1,719,000 Construction Subtotal $2,460,000 Contingency and Soft Cost Subtotal $1,697,000 Total $4,157,000 Tank 3 MG Steel Tank 4,928,060 Construction Subtotal $4,928,060 Contingency and Soft Cost Subtotal $3,399,940 Total $8,328,000 Table 6-4. WMWD Expansion CIP North of Murrieta Creek (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 8 6071.3 1,135,000 12 36359.2 8,995,000 Construction Subtotal $10,130,000 Contingency and Soft Cost Subtotal $6,990,000 Total $17,120,000 Table 6-5. WMWD Expansion CIP South of Murrieta Creek (Future) Diameter, inches Length, feet Cost, $ Upsize Pipe 8 29672.77 5,546,000 12 26346.56 6,518,000 Construction Subtotal $12,064,000 Contingency and Soft Cost Subtotal $8,324,000 Total $20,388,000 56 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-6. WMWD Hydraulic Improvement CIP (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 16 1294.68 391,000 Construction Subtotal $391,000 Contingency and Soft Cost Subtotal $270,000 Total $661,000 VFD at Alson Booster Pump Station 130,000 Construction Subtotal $130,000 Contingency and Soft Cost Subtotal $85,000 Total $215,000 New Connection and PRV Station 350,000 Construction Subtotal $350,000 Contingency and Soft Cost Subtotal $242,000 Total $592,000 Table 6-7. WMWD Fire Flow Improvement CIP (Existing) Diameter, inches Length, feet Cost, $ Proposed/Upsize Pipe 8 5988.66 1,119,380 10 848.61 190,937 12 6534.55 1,616,579 Construction Subtotal $2,927,000 Contingency and Soft Cost Subtotal $2,020,000 Total $4,947,000 57 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-8. Supply Improvements Through EMWD (Future) Diameter, inches Length, feet Cost, $ Proposed/Upsize Pipe 20 5273 2,114,473 24 2371 1,107,257 Construction Subtotal $3,222,000 Contingency and Soft Cost Subtotal $2,223,000 Total $5,445,000 Table 6-9. RCWD Hydraulic Improvement CIP (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 16 3990.59 1,207,000 Construction Subtotal $1,207,000 Contingency and Soft Cost Subtotal $833,000 Total $2,040,000 VFD at Alson Booster Pump Station 130,000 Construction Subtotal $130,000 Contingency and Soft Cost Subtotal $85,000 Total $215,000 Table 6-10. RCWD Expansion CIP North of Murrieta Creek (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 8 6071.3 1,135,000 12 36359.2 8,995,000 Construction Subtotal $10,130,000 Contingency and Soft Cost Subtotal $6,990,000 Total $17,120,000 58 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-11. RCWD Expansion CIP South of Murrieta Creek (Future) Diameter, inches Length, feet Cost, $ Upsize Pipe 8 29672.77 5,546,000 12 26346.56 6,518,000 Construction Subtotal $12,064,000 Contingency and Soft Cost Subtotal $8,324,000 Total $20,388,000 Table 6-12. Supply Improvements Through RCWD (Future) Diameter, inches Length, feet Cost, $ Proposed/Upsize Pipe 30 0 0 Construction Subtotal $0 Contingency and Soft Cost Subtotal $0 Total $0 Table 6-13. EMWD Storage CIP (Future) Diameter, inches Length, feet Cost, $ Hunter Tank (EMWD + Murrieta) 4.1 MG Steel Tank 4,800,000 Construction Subtotal $4,800,000 Contingency and Soft Cost Subtotal $3,312,000 Total $8,112,000 59 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-14. EMWD Hydraulic Improvement CIP (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 16 1294.68 391,000 Construction Subtotal $391,000 Contingency and Soft Cost Subtotal $270,000 Total $661,000 VFD at Alson Booster Pump Station 130,000 Construction Subtotal $130,000 Contingency and Soft Cost Subtotal $85,000 Total $215,000 New Connection and PRV Station 350,000 Construction Subtotal $350,000 Contingency and Soft Cost Subtotal $242,000 Total $592,000 Table 6-15. EMWD Expansion CIP North of Murrieta Creek (Future) Diameter, inches Length, feet Cost, $ Proposed Pipe 8 6071.3 1,135,000 12 36359.2 8,995,000 Construction Subtotal $10,130,000 Contingency and Soft Cost Subtotal $6,990,000 Total $17,120,000 60 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 6-16. EMWD Expansion CIP South of Murrieta Creek (Future) Diameter, inches Length, feet Cost, $ Upsize Pipe 8 29672.77 5,546,000 12 26346.56 6,518,000 Construction Subtotal $12,064,000 Contingency and Soft Cost Subtotal $8,324,000 Total $20,388,000 Table 6-17. EMWD Fire Flow Improvement CIP (Existing) Diameter, inches Length, feet Cost, $ Proposed/Upsize Pipe 8 5988.66 1,119,380 10 848.61 190,937 12 6534.55 1,616,579 Construction Subtotal $2,927,000 Contingency and Soft Cost Subtotal $2,020,000 Total $4,947,000 Table 6-18. Supply Improvements Through EMWD (Future) Diameter, inches Length, feet Cost, $ Proposed/Upsize Pipe 20 5273 2,114,473 24 2371 1,107,257 Construction Subtotal $3,222,000 Contingency and Soft Cost Subtotal $2,223,000 Total $5,445,000 61 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 7.0 FINANCIAL ASSESSMENT METHODOLOGY AND POLICIES The financial assessment for this FMSR is intended to show the effect on three distinct groups in the Study Area: • Rate payers • Residents currently on private wells • Development community This section defines the Ownership Scenarios, provides an overview of the process of developing the financial analysis, and shows the financial policy direction provided by utility staff. 7.1 Overview To do this, a financial model was prepared for each Ownership Scenario. The financial model contains a year by year projection of revenues and expenses for the Study Area. Three “ownership scenarios” were created: • WMWD Ownership Scenario. The financial model for the WMWD Ownership Scenario was prepared as if WMWD would continue to own and operate the water system. • RCWD Ownership Scenario. The financial model for the RCWD Ownership Scenario was prepared as if RCWD would become the owner of the water system on July 1, 2020. • EMWD Ownership Scenario. The financial model for the EMWD Ownership Scenario was prepared as if EMWD would become the owner of the water system on July 1, 2020. The financial models developed for each Ownership Scenario are included in Appendix B, specifically Table B-3 for the WMWD Ownership Scenario, Table B-4 for the EMWD Ownership Scenario, and Table B-5 for the RCWD Ownership Scenario. The models project what the various expenses are over the next 10 years to operate and maintain the water system, including building the capital improvements described in Sections 5 and 6 of this report. The financial analysis considers whether debt would be issued to pay for capital improvements, estimates future costs for water supply, and shows how growth would pay for growth. The financial models also show where the money comes from to pay these costs. The majority of utility revenues are from water rates. Smaller amounts of revenues are from connection fees (one time charges that development pays before connecting to the water system), and standby fees. 62 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area The following list shows key steps in completing the financial analysis: 1. Public Kick-off Meetings, held in April 2019 and July 2019 2. Data request, sent by the Consultant team to LAFCO and the three utilities 3. Development of initial assumptions to start the financial analysis. These are parameters such as inflation rates, system growth rates (that is, how many new connections to the water system each year), and the projected cost of purchasing water from the Metropolitan Water District. 4. Asked agencies for policy direction, in May 2019 5. After receipt of policy direction, develop the financial models for each Ownership Alternative 6. After receipt of final draft capital improvement costs (see Section 6 of this report), develop draft financial analysis 7. Distribute preliminary draft results to Agencies 8. Review with Agencies, in January 2020 9. Revise analysis as needed: incorporate Agency review comments; incorporate more current input data, receive revised policy direction from agencies, in February and March 2020 10. Distribute final draft results to Agencies and draft report, in April 2020 11. Review final draft results with Agencies, in April 2020 12. Future: present final draft results at community meeting 7.2 Agency Financial Policies Agency financial policies are described in detail in the sections below. 7.2.1 Introduction One of the most important steps in the development of the financial analysis is obtaining policy direction from the three utilities. The utility that will be the owner of the water system in the Study Area will decide how they want to manage it. To create a financial analysis that represents how each utility would manage the utility, the Consultant team needed to ask the utilities for policy direction. An important distinction must be made between “policy direction” and “policy decisions”, acknowledging that utility policies are made by the respective Boards of Directors of each utility, and no such Board actions have been made regarding this Study Area. • Policy Direction: provided by utility management, and is their best estimate of what their Board would decide. • Policy Decision: made by a Board of Directors. 63 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area In this FMSR, the Consultant team relied on Policy Direction obtained from utility staff. The process for obtaining Policy Direction was: 1. May 2019: completed list of policy questions separately for each agency 2. June 2019: agencies responded, Consultant team reviewed responses 3. Remainder of project: policy direction used to guide financial analysis; some revision and clarification of policy direction was provided by agencies to Consultant team as the project progressed Key Policy Directions are shown in Table 7-1. These policies are described further in the paragraphs after Table 7-1. Table 7-1. Financial Policy Direction WMWD RCWD EMWD Financially Blended or Distinct Distinct Blended Financially Distinct Initial Water Rate Current WMWD Rate Current RCWD Santa Rosa Current WMWD Rate Structure Structure Division Rate Structure Structure With 20% Reduction in Monthly Service Charge Low-Income Discount Yes. Up to $150/year No No, though qualified low- income/medical payment plans are available Standby Charge Applied Yes. $21/acre Yes. $69.92/acre Yes $14/acre Ad Valorem Tax No Possibly. If not, then apply No Applied? revenue-neutral water rate surcharge Methods of Funding Developers, ADs, and Developers, ADs, and Developers, ADs, and $37M CIP Expansion CFDs. CFDs can’t be CFDs CFDs Projects financed through WMWD Connection Fee Existing WMWD Fee. Existing Santa Rosa Existing EMWD Fee. Charged? $7,050 for ¾” Meter Division Fee. $2,537 for a $5,501 for ¾” Meter ¾” meter For Customers with No No No Existing Wells, Is Connection to Public Water System Mandatory? For Voluntary Yes No Yes Connections, Can Irrigation Water Remain on Private Well? AD = Assessment District CFD = Community Facilities District 64 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 7.2.2 Financially Distinct or Financially Blended This policy direction is possibly the single most significant policy direction, with the terms Financially Distinct and Financially Blended defined as follows: Financially Distinct: all costs to provide water service in the Study Area must come from revenues generated within the Study Area. From an accounting point of view, the Study Area is a separate entity from all other parts of the agency’s operations. Financially Blended: from an accounting point of view, the Study Area will be merged with another part of the agency’s operations. Revenues from the Study Area would be combined with other revenues of the agency. The costs of providing water service to the Study Area would be combined with other costs of the agency. Under the WMWD Ownership Scenario, the Study Area would continue to be financially distinct. RCWD noted that initially, the Study Area would be financially distinct, and RCWD would complete a cost of service study to assess whether the Study Area could be financially integrated into its Santa Rosa Division. Under the EMWD Ownership Scenario, the Study Area would be financially blended with the remainder of EMWD’s retail water service area. 7.2.3 Initial Water Rate Structure This question was asked to understand the water rate structure that each agency would apply upon acquisition of the water system. The policy direction was different for each Ownership Scenario. • WMWD Ownership Scenario: WMWD would continue to use its current water rate structure, with water rate increases as needed to continue to provide water service. • RCWD Ownership Scenario: RCWD would use the water rate schedule currently applied to its Santa Rosa Division. • EMWD Ownership Scenario: EMWD would apply WMWD’s current water rate structure for the Study Area, except EMWD would reduce the WMWD’s Fixed System Charge by 20 percent. For most Study Area connections with a ¾-inch water meter, the CY 2020 Fixed System Charge under the EMWD Ownership Scenario would be $35.51 instead of WMWD’s $44.39. 7.2.4 Low-Income Discount Some utilities offer a discount for qualifying customers that do not meet minimum income thresholds. For the purposes of this analysis, each agency’s current policies are assumed to be applied in the Study Area, should they be the future water purveyor. • WMWD Ownership Scenario: WMWD would retain its current policy of providing assistance for customers that also qualify for their electric or natural gas utility’s California Alternate Rates for Energy (CARE) program. WMWD provides up to $150 per year in bill payment assistance. 65 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area • RCWD Ownership Scenario: RCWD does not offer a low-income discount. • EMWD: EMWD does not offer a low-income discount, but does offer payment plans for qualified low-income customers with documented specific medical conditions. 7.2.5 Standby Charge Each agency has a Standby Charge, which is an annual charge to all parcels in their respective service areas, including those that are not connected to the water system. Each agency indicated it would continue to charge a Standby Charge to property owners in the Study Area. The amounts of the Standby Charge are expected to vary. • WMWD Ownership Scenario: WMWD would continue its current Standby Charge of $21 per acre, with a minimum charge of $21/parcel for parcels smaller than one acre. • RCWD Ownership Scenario: RCWD would apply its current Santa Rosa Division Standby Charge of $69.92 per acre1, with a minimum charge of $69.92/parcel for parcels smaller than one acre. • EMWD Ownership Scenario: EMWD staff indicated that EMWD would apply a $14 per acre Standby Charge, with a minimum charge of $14 per parcel for parcels smaller than one acre. 7.2.6 Ad Valorem Tax Another important policy direction is consideration of an Ad Valorem Tax. An Ad Valorem Tax is a tax based on the assessed value of an item. A legal opinion on whether an Ad Valorem Tax could be applied in the Study Area is outside the scope of this FMSR and is not included. Further, the FMSR also does not identify the process, if any, for applying an Ad Valorem Tax in the Study Area. The Consultant Team asked each agency whether they would apply an Ad Valorem Tax to the Study Area if they were the future water purveyor. • WMWD Ownership Scenario: WMWD would not apply an Ad Valorem Tax. • RCWD Ownership Scenario: RCWD staff provided policy direction to assume that, if possible, the current Ad Valorem Tax in RCWD’s Santa Rosa Division would be applied. The current tax rate is $0.50 per year per $100 assessed value of land. An Ad Valorem Tax would be applied throughout the Study Area. RCWD indicates that the Ad Valorem Tax revenues are used for capital improvements, including paying debt service. 1 A Standby Fee of $69.92 per acre per year is assumed for this FMSR (and $69.92/year for parcels smaller than one acre). RCWD’s Standby Fee for its Santa Rosa Division can be found in full on RCWD’s website, and lists some circumstances where the Standby Fee differs from $69.92/acre. 66 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area If an Ad Valorem Tax is not possible, or the RCWD Board of Directors chooses not to apply it, RCWD would instead apply a Water Rate Surcharge. The Water Rate Surcharge would be applicable only to water system connections, and the Water Rate Surcharge would not be applicable to connections that are not connected to the water system. The Water Rate Surcharge would be calculated so that the surcharge would collect the same amount of money, systemwide, that the Ad Valorem Tax would collect if it were applied only to water system connections. • EMWD Ownership Scenario: EMWD would not apply an Ad Valorem Tax. 7.2.7 Assessment Districts and Community Facilities Districts As noted in Section 6 of this report, there are two sets of water main extensions that have a combined total cost of approximately $37 million. These improvements, shown in Figures 5-1, 5-2, and 5-3 above, are the same for each Ownership Scenario. For the purposes of presentation in this report, the water main extensions are consolidated into two projects: water main extensions north of the Murrieta River and water main extensions south of the Murrieta River. Given that the majority of the near-term projected development is north of the Murrieta River, it is anticipated that the pipe extensions north of the Murrieta River would be built first. The actual schedule and timing for completion of these pipe extensions would depend on the specific timing and location of proposed development as it occurs. It is possible that the pipe extensions would be built as a series of smaller projects instead of two larger projects. Four primary funding methods for these improvements were identified through the course of the project. 1. Funded by the utility, and the cost included in each utility’s connection fee. 2. Funded by Community Facility Districts, which are a form of an Assessment District where the assessment is not based on the value of the property. These are also commonly called Mello-Roos Districts. 3. Funded by Assessment Districts, where the assessment is based on the value of the property. 4. Directly funded by developers. Table 7-2 shows the potential funding methods and how they are applicable to each Ownership Scenario. This table shows that developer funding and Assessment District(s) are possible under all Ownership Scenarios. All agencies will allow Community Facilities Districts, though WMWD will not allow a CFD to be financed through WMWD. RCWD and EMWD have indicated they can accommodate this funding mechanism. 67 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 7-2. $37 Million Pipe Extension Funding Alternatives Ownership Scenario Potential Funding Method WMWD RCWD EMWD Funded by Utility, Cost Incorporated into Connection Fee No No No Community Facility District Financed Through Utility No Possibly Yes Allows Community Facility District Yes Yes Yes Allows Assessment District Yes Yes Yes Funded Directly by Developers Yes Yes Yes Four primary funding methods for these improvements were identified through the course of the project. Each agency was asked about potential funding methods for these improvements, and the results are shown in Table 7-2. • WMWD Ownership Scenario: The improvements could be directly funded by developers, through an Assessment District, or through a Community Facilities District. However, a Community Facilities District could not be funded through WMWD. In 1997, WMWD adopted Resolution No. 2008, which states “The District will not finance through proceedings pursuant to the Mello-Roos Community Facilities Act of 1982”. • RCWD Ownership Scenario: The improvements could be funded directly by developers, or under conditions specified by RCWD, funded using Assessment Districts or Community Facilities Districts. It is beyond the scope of this FMSR to identify the specific conditions under which RCWD would allow Assessment Districts or Community Facilities Districts. • EMWD Ownership Scenario: The improvements could be funded directly by developers, or under conditions specified by EMWD, funded using Assessment Districts or Community Facilities Districts. It is beyond the scope of this FMSR to identify the specific conditions under which EMWD would allow Assessment Districts or Community Facility Districts. 7.2.8 Connection Fees A connection fee is a one-time charge payable by new development prior to connection to the water system. Each agency has a connection fee, and each agency uses a different term to describe the connection fee. Throughout this report, the term connection fee refers to each agency’s similar charge, regardless of the term used by each agency. Each agency’s policy follows: • WMWD Ownership Scenario: WMWD uses the term “connection fee.” The current connection fee for a ¾-inch water meter is $7,050, and for a 2-inch water meter, the current connection fee is $37,599. WMWD typically updates its connection fee each year for inflation, and WMWD expects to update its connection fee in 2020 or 2021 as its Water Master Plan for the Study Area is completed. 68 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area • RCWD Ownership Scenario: RCWD uses the term “Capacity Charge.” RCWD’s FY 19/20 Capacity Charge was $2,537 for a ¾-inch meter and $13,445 for a 2-inch meter. RCWD typically adjusts its Capacity Charges each year for inflation. • EMWD Ownership Scenario: EMWD uses the term “Financial Participation Charge”. EMWD’s current Financial Participation Charge is $5,501 for a ¾-inch meter. The Financial Participation Charge for a 2-inch meter depends on the type of 2-inch meter and ranges from $44,008 to $73,328. EMWD typically updates its Financial Participation Charge each year for inflation. EMWD notes that, for the example customer with a 2-inch meter (described in Section 8 below), the most likely 2-inch meter Financial Participation Charge would be $44,008 and it is likely that a 1.5-inch meter would be applicable. The Financial Participation Charge for a 1.5-inch meter is $27,505. 7.2.9 Mandatory Connection to Water System for Customers with Existing Private Wells The Consultant team asked each agency if residents with existing private wells would be required to connect to the public water system. • All three Ownership Scenarios: Policy direction given from utility staff is that no mandatory connections would be required. Anyone with a private well could voluntarily connect to the water system. 7.2.10 Voluntary Private Well Connections: Irrigation Use Remaining on Private Wells For residents with existing private wells who choose to connect to the public water system, is it possible to connect only the indoor water use and have outdoor irrigation use remain on the private well? The Consultant team asked each agency. • WMWD Ownership Scenario: If a resident chooses to connect to the public water system, the irrigation use could remain on the private well at the discretion of the resident. However, the resident must follow WMWD’s requirements to make sure that the well system and the public water system are physically separated to prevent contamination of the public water system. • RCWD Ownership Scenario: If a resident chooses to connect to the public water system, the entire water use on the property must be connected, including irrigation use. • EMWD Ownership Scenario: If a resident chooses to connect to the public water system, the irrigation use could remain on the private well at the discretion of the resident. However, the resident must follow EMWD’s requirements to make sure that the well system and the public water system are physically separated to prevent contamination of the public water system. 69 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 7.3 Methods of Prioritization Table 7-3 describes the parameters that are the key outputs of the financial analysis, and the paragraphs below describe them in additional detail. Some of the key outputs are policies, and the remainder describe financial impacts. The outputs are also described as to whether they describe the financial impact to • Rate payers • Residents currently on private wells • Development community Table 7-3. Key Parameters Part of the Financial Impact to: Residents on Development Key Financial Analysis Parameters Rate Payers Private Wells Community Key Policies Financially Distinct or Financially Integrated? X Ad Valorem Tax? X X X How are $37M of Pipe Extensions Funded? X Low Income Discount? X For Voluntary Connections of Private Wells, Option to Leave X Irrigation Use on Private Wells? Projected Total Cost to Ratepayers Example Single-Family Residence X Example Commercial Connection X Residents with Private Wells Mandatory Connection of Private Wells? X Standby Charge, $/Acre X X X Connection Fee Comparison Single Family Residential If Connected X 2" Meter If Connected X 70 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.0 FINANCIAL ASSESSMENT OF THE THREE OWNERSHIP SCENARIOS This section describes the financial analysis in detail, and includes results for all three Ownership Scenarios. The results for each Ownership Scenario are presented individually in Sections 8.2, 8.3, and 8.4. Section 8.5 shows a side by side comparison of selected parameters for the three Ownership Scenarios. 8.1 Methodology and Key Assumptions As described above in Section 7.1, three financial models were prepared: one for each Ownership Scenario. The financial models have several elements in common: • 10-year projection period, starting July 1, 2020 and ending June 30, 2030. • Identifying how each utility would structure the financial tracking of revenues and expenses: utilities typically create “Funds” which house certain types of revenues and expenses. As examples, most utilities have an Operating Fund, into which water rate revenues are put, and from which operation and maintenance expenses are paid. Many utilities have a separate fund for connection fees, where the fund’s revenues are connection fees and the funds expenses are development-related capital projects funded by connection fees. Each utility would do this differently, as discussed in Sections 8.2, 8.3, and 8.4 below. • Projections of water rate revenues, using the applicable rate structure, current number of connections and current water use, projected development, and projected increases in water rate revenues. • Projections of other types of revenues, including connection fees, standby charges, interest income, and (if applicable) ad valorem tax revenue. • Projections of operation and maintenance expenses. This includes projecting the cost to purchase imported water and produce local groundwater, and the remaining costs to operate and maintain the water system. • Identification of which capital costs are related to development, and which capital costs are related to providing service to the existing customer base. • Identification of which capital costs would be funded on a pay-as-you-go basis, and which capital costs would be debt funded. • Projected beginning and ending year reserve balances in each utility fund. • Projected water rates, assuming that the water rate revenue increases are distributed equally among all connections. 71 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area The following are assumptions common to the three Ownership Scenarios. • Inflation assumptions — Annual inflation of 2.5 percent per year — Personnel (wages and benefits) inflation of 2.5 percent per year • Current connection and water use data — Number of connections by meter size and connection class per WMWD as of 1/15/2020, provided on 2/19/2020. — Metered water consumption: by month, by connection class, and by WMWD rate tier. Source: WMWD 2/19/2020. See Appendix B, Table B-2, lines 103 and 131. — Projected growth rate through 2030: calculated from data in Kennedy Jenks 2017 Draft WMWD Murrieta Retail Demand Projections. See Table B-2, line 154. — Meter equivalent calculations done separately for each agency using respective agency meter equivalent ratios. Meter equivalents include fire service connections. • Projected future water demands and water source production — FY 19/20 water supply, local plus imported: 2,304 acre-feet per year (source: WMWD, based on estimate for FY 18/19). — Local groundwater production capped at 1,452 acre-feet per year after the North Well Improvements are complete. This based on an analysis done by WMWD, incorporating the pumping capacities of WMWD’s two existing wells at 90 percent run time, and seasonal variations in water demand. — Metropolitan Water District imported water costs thru FY 29/30 ($/acre-foot) are used, based on the proposed revised MWD 10-Year Financial Forecast released by MWD in early 2020. • Projected capital improvement spending — Based on capital improvements shown in Sections 5 and 6 for each respective Ownership Scenario. — Escalated for inflation at 2.5 percent per year. • Calculation of total costs to ratepayers — Example single-family residence: ¾-inch water meter using 18 ccf/month, where 8 of the 18 ccf/month is indoor water use. 18 ccf/month is the value used by WMWD in monthly water bill comparisons and is assumed to approximate an average water use by single-family residences in the Study Area. Where applicable, the land value of the property is $80,000. — Example commercial connection: 2-inch water meter using 125 ccf/month. 125 ccf/month is the average water use for commercial connections in the Study Area with a 2-inch water meter. Where applicable, the land value of the property is $200,000, and for purposes of Standby Charge calculations, the parcel is one acre in size. 72 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.2 WMWD Ownership Scenario Components of the WMWD Ownership Scenario are described below. 8.2.1 Overview WMWD tracks revenues and expenditures for the Study Area in a series of four funds: • Fund 230: Operating Fund. Most revenues are deposited into this Fund, including water rate revenues. Most expenses are paid from this fund, including all all operation and maintenance (O&M) expenses. • Fund 231: Connection Fee Fund. Connection fee revenues are deposited into this Fund. Capital expenses that support development are paid from this Fund. • Fund 233: Distribution Fund. This Fund is not actively used by WMWD. • Fund 235: Asset Replacement Fund. Revenues for this fund are primarily a transfer from Fund 230. Asset replacement projects are paid for from this Fund. Table 8-1 shows the number of current and projected number of future Study Area connections by water meter size. Table 8-2 shows the current WMWD rate structure. WMWD has a monthly Fixed System Charge that depends on water meter size. For the majority of water system connections that have a ¾-inch water meter, the Fixed System Charge is $44.39 per month. WMWD typically adjusts water rates on January 1 of each year. 73 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table 8-1. Projected Number of Water System Customers Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 5/8" 482 490 498 506 514 522 530 538 546 554 563 3/4" 1,968 1,999 2,031 2,063 2,096 2,129 2,163 2,198 2,233 2,269 2,305 1" 172 175 178 181 184 187 190 193 196 199 202 1.5" 77 79 81 83 85 87 89 91 93 95 97 2" 161 164 167 170 173 176 179 182 185 188 191 3" 5 5 5 5 5 5 5 5 5 5 5 4" 2 2 2 2 2 2 2 2 2 2 2 Total 2,867 2,914 2,962 3,010 3,059 3,108 3,158 3,209 3,260 3,312 3,365 Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Last Revised: 09-23-2020 Murrieta Service Ares Focused Municipal Services Review for the Murrieta Service Area Table 8-2. Calendar Year 2020 WMWD Rate Structure Fixed Charges Depending on Water Meter Size Fixed System Charge, $/month ⅝" Meter $32.00 ¾" Meter $44.39 1" Meter $68.56 1.5" Meter $129.28 2" Meter $154.50 3" Meter $384.49 4" Meter $744.16 Variable Charges $/CCF Commodity Charges Tier 1 - Indoor Budget $2.006 Tier 2 - Outdoor Budget $4.286 Tier 3 - Inefficient $5.118 Tier 4 - Wasteful $5.558 Tier 5 - Unsustainable $6.438 Pumping Charge, Power Zone 8 - Grizzly Ridge $0.234 WMWD has a budget-based water rate structure, and WMWD’s Commodity Charges are also shown in Table 8-2 for each of the five tiers. The residential budget-based water rate tiers are: • Tier 1, Efficient Indoor Use, also referred to as the Indoor Budget: The Indoor Budget is based on 60 gallons of water use per person per day. The default household size is 3 for single-family residences and 2 for apartments and condominiums. • Tier 2, Efficient Outdoor Use, also referred to as the Outdoor Budget: The Outdoor Budget is described in more detail on WMWD’s website, and is based on four factors: daily localized weather data, irrigated area, a landscape factor, and the number of days in the billing period. The landscape factor measures the specific amount of irrigation water required by each type of plant in the yard. An 80 percent factor is applied for customers connected prior to January 1, 2012 and a 70 percent factor is applied to customers installing a water meter after January 1, 2012. The sum of the Indoor Budget and the Outdoor Budget is called the Total Water Budget. • Tier 3, Inefficient Use: Water use exceeding the Total Water Budget by up to 25 percent of the Total Water Budget. • Tier 4, Wasteful Use: Water use exceeding the Total Water Budget by between 25 and 50 percent of the Total Water Budget. • Tier 5, Unsustainable Use: Water use exceeding the Total Water Budget by more than 50 percent of the Total Water Budget. 75 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area The commercial budget-based water rate tiers are: • Tier 1, Efficient Indoor Use, also referred to as the Indoor Budget: The Indoor Budget is determined each month and is based on 43 percent of that month’s average water use during past years. • Tier 2, Efficient Outdoor Use, also referred to as the Outdoor Budget: The Outdoor Budget is determined each month and is based on the remaining 57 percent of that month’s average water use during the past three years. The sum of the Indoor Budget and the Outdoor Budget is called the Total Water Budget. • Tier 3, Inefficient Use: Water use exceeding the Total Water Budget by up to 25 percent of the Total Water Budget. • Tier 4, Wasteful Use: Water use exceeding the Total Water Budget by between 25 and 50 percent of the Total Water Budget. • Tier 5, Unsustainable Use: Water use exceeding the Total Water Budget by more than 50 percent of the Total Water Budget. Table 8-3 shows the current connection fees. A connection fee is a one-time charge payable by new development prior to connecting to the water system. They are typically updated each January 1. Table 8-3 Calendar Year 2020 WMWD Connection Fees Water Meter Size CY 2020 Connection Fee ⅝" $7,050 ¾" $7,050 1" $11,750 1.5" $23,499 2" $37,599 8.2.2 Projected Revenues Projected revenues categorized by revenue type are provided below. 8.2.2.1 Water Rates Water rate revenues under WMWD’s Calendar Year 2020 rates were calculated by FG Solutions based on WMWD’s calendar year 2020 water rate schedule, along with connection and water use data provided by WMWD. Future water rate revenue increases were estimated by FG Solutions based on providing sufficient revenues to fund projected water system expenses through FY 29/30 and meet WMWD’s minimum reserve criteria in WMWD’s Operating Fund (Fund 230) and Asset Replacement Fund (Fund 235). The projected increases in water rate revenues are shown in Table 8-4 and reserves are discussed in Section 8.2.4 below. 76 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 8-4. Projected Water Rate Revenue, WMWD Ownership Scenario Projected Water Rate Revenues % Increase in Water Rate At CY 2020 From Future Fiscal Year Revenues(a) Rates(b) Rate Increases(c) Total FY 20/21 3.3% $5,539,097 $91,395 $5,630,492 FY 21/22 3.3% $5,628,784 $281,690 $5,910,474 FY 22/23 3.3% $5,719,924 $484,453 $6,204,377 FY 23/24 3.3% $5,812,539 $700,358 $6,512,897 FY 24/25 3.3% $5,906,653 $930,104 $6,836,757 FY 25/26 3.3% $6,002,834 $1,174,536 $7,177,370 FY 26/27 3.3% $6,100,580 $1,434,372 $7,534,952 FY 27/28 3.3% $6,199,919 $1,710,430 $7,910,349 FY 28/29 0.0% $6,300,875 $1,868,776 $8,169,651 FY 29/30 0.0% $6,403,474 $1,899,207 $8,302,681 (a) Rate increases presumed effective on January 1 of each year. (b) Increase in rate revenues at WMWD's Calendar Year 2020 Rates are from system growth. (c) See Appendix B, Table B-3 for more detail. 8.2.2.2 Other Revenues Other revenues are from connection fee, Standby Charges, interest income, and other miscellaneous sources of revenue such as rents/leases, and delinquent penalties. Table 8-5 shows the projected average annual revenue from each revenue source over the 10-year financial planning period. Water rate revenues are projected to represent over 88 percent of total water system revenues. The next largest source of revenues are from connection fees. Table 8-5. Average Annual Revenues, WMWD Ownership Scenario Projected Average Annual Revenue Type of Revenue Amount Percentage Note Water Rates $7,019,000 88.8% 1, 2 Connection Fees $563,427 7.1% 2 Standby Charges $138,978 1.8% 2, 3 Interest Income $143,875 1.5% 2 Delinquent Penalties $53,045 0.7% 2 Other $6,244 0.1% 2 Total $7,924,568 100.0% Notes: (1) See Table 8-4. (2) See Appendix B, Table B-3 for more detail. Totals may not add up due to rounding. (3) Also referred to as Water Availability Charges by WMWD. Figure 8-1 shows projected annual revenues graphically, also showing that water rate revenues constitute the majority of water system revenues. 77 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area $12 $10 $8 $6 $4 $2 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Other Non-Rate Revenues Connection Fees Interest Income Standby Charges Water Rates Figure 8-1. Projected Revenues: WMWD Scenario, $M 8.2.3 Projected Expenses 8.2.3.1 Source of Supply Table 8-6 shows projected source of supply unit costs. WMWD purchases its water from EMWD at the Los Alamos interconnection point, and the projected cost per acre foot is shown below. The projected cost is based on EMWD’s current cost, projected increases in MWD Tier 1 costs, and projected increases in EMWD’s costs to deliver MWD water to the Los Alamos Interconnection. Also shown in Table 8-6 are WMWD’s costs (excluding labor) to produce and treat local groundwater. Projected source of supply expenses through FY 29/30 are calculated using the unit costs shown above and the projected volumes of purchased and locally produced groundwater shown in Table 8-6 above. Projected source of supply expenses are shown below in Table 8-7 along with all other O&M expenses. 8.2.3.2 Other Operation and Maintenance Table 8-7 shows projected O&M expenses, which includes the source of supply expenses as well as other components of O&M expenses. Currently, purchased water expenses and transmission & distribution system expenses (which are primarily labor and equipment expenses) are the largest components of O&M expenses. The G&A Allocation is a payment from the Operating Fund to the WMWD General Fund to cover centralized costs such as administration, human resources, payroll, accounting, legal, and Board of Directors services. 78 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table 8-6. Projected Source of Supply Unit Costs, $/acre-foot Description FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 MWD Tier 1 Treated Water(a) 1,078 1,131 1,183 1,237 1,270 1,306 1,336 1,370 1,403 1,442 1,486 Projected EMWD Los Alamos Rate (b) 1,350 1,409 1,469 1,532 1,573 1,618 1,656 1,699 1,741 1,789 1,843 Source of Supply (c) 224 229 235 241 247 253 259 266 273 279 286 Treatment (c) 90 92 94 96 99 101 104 106 109 112 115 (a) MWD Tier 1 Treated rate from WMWD 2/19/2020 per proposed MWD Updated 10-Year Financial Forecast. MWD costs are on a calendar year basis. The MWD cost in the FY 19/20 column is for calendar year 2020. (b) This is the cost that EMWD charges WMWD for purchased water for the Study Area. Cost estimates were provided by WMWD on 2/19/2020. (c) Source: WMWD, 2/19/2020, based on FY 18/19 actual expenses adjusted by rate of General Inflation for future years Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Last Revised: 09-23-2020 Murrieta Service Ares Table 8-7. Projected O&M Expenses, WMWD Ownership Scenario, $ FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Water Pumping 279,316 286,298 293,456 300,792 308,312 316,020 323,920 332,018 340,319 348,827 Transmission & Distribution 1,345,278 1,378,910 1,413,382 1,448,717 1,484,935 1,522,058 1,560,110 1,599,112 1,639,090 1,680,067 Customer Accounts 194,822 202,926 211,367 220,159 229,317 238,878 248,836 259,211 270,017 281,274 G&A Allocation 667,864 684,561 701,675 719,217 737,197 755,627 774,518 793,881 813,728 834,071 Other Operating Expenses 126,790 129,960 133,209 136,539 139,953 143,452 147,038 150,714 154,482 158,344 Purchased Water 1,318,210 1,431,664 1,553,099 1,657,486 1,769,890 1,880,495 2,000,664 2,124,645 2,261,783 2,411,685 Source of Supply 332,973 341,297 349,829 358,575 367,539 376,728 386,146 395,800 405,695 415,837 Treatment 133,284 136,616 140,031 143,532 147,120 150,798 154,568 158,432 162,393 166,453 Water Use Efficiency 51,199 52,479 53,791 55,135 56,514 57,927 59,375 60,859 62,381 63,940 Other Non-Operating Expense 3,403 3,488 3,575 3,665 3,756 3,850 3,946 4,045 4,146 4,250 Total $4,453,138 $4,648,199 $4,853,415 $5,043,818 $5,244,534 $5,445,832 $5,659,122 $5,878,718 $6,114,034 $6,364,748 Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Murrieta Service Ares Last Revised: 09-23-2020 Focused Municipal Services Review for the Murrieta Service Area In general, all O&M expenses are escalated for inflation at a rate of 2.5 percent per year, except purchased water costs which are linked to MWD Tier 1 costs. Connection account expenses are also increased by the rate of system growth. 8.2.3.3 Repair and Replacement WMWD is anticipating $500,000 each year for infrastructure repair and replacement expenses, in addition to capital expenses described in Sections 5 and 6. 8.2.3.4 Capital Project Funding Table 8-8 shows the how the capital projects shown in Sections 5 and 6 would be funded. The majority of the projected approximately $62 million in capital investment is related to development. Some of this (approximately $12.4 million) would be funded by WMWD and the cost incorporated into its connection fee. Approximately $12 million is related to improving service to existing connections, including construction of additional storage and related pipelines to connect the storage to the water system. Approximately $5 million of the capital investment is to replace legacy small diameter pipelines. Table 8-8. Projected Capital Improvement Funding, WMWD Ownership Scenario $ to Future Development Estimated Cost, 2020 $ $ to Existing Funded by Funded by Project (Note 1) Connections WMWD Developers Note Storage 8,328,000 4,610,842 3,717,158 2 Pipelines Associated with Storage 4,157,000 2,301,546 1,855,454 2 Expansion CIP North of Murrieta 17,120,000 17,120,000 3,4 Creek Expansion CIP South of Murrieta 20,388,000 20,388,000 3,4 Creek WMWD Hydraulic Improvements 1,468,000 1,468,000 3,5 Supply Improvements Through 5,379,000 5,379,000 3,5 EMWD Legacy (Small Diameter) 4,947,000 4,947,000 6 Improvements New Well No. 3 0 0 0 2 Total $61,787,000 $11,859,388 $12,419,612 $37,508,000 Notes: (1) Costs were developed by West Yost for this analysis and are shown in Sections 5 and 6 of the report. (2) Project benefits both existing connections and future development. Cost division between existing connections and future development is based on the ratio of existing meter equivalents to buildout meter equivalents. (3) Project benefits future development only and would not be done if there was no future development. (4) WMWD's existing policy is to not participate finance through proceedings pursuant to the Mello-Roos Community Facilities Act of 1982. See Table 7.2 for possible funding alternatives. (5) For facilities of this magnitude, WMWD would fund the project, and incorporate the cost in its connection fee. Connection fee revenues, over time, would pay for the project. (6) These legacy (small diameter) improvements are needed to support existing development. 81 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.2.3.5 Debt Service WMWD is currently making debt service payments on two loans. • A 2010 Revenue Bond with annual debt service payments of approximately $67,000 and an outstanding principal balance of $998,460. • A $2 million interfund loan from the WMWD’s General Fund to the Murrieta Water System to partially fund the construction of the North Well. The annual debt service payment is $108,743, and the outstanding principal balance is $2,000,000. For the purposes of this analysis, all but one of the of the WMWD funded improvements shown in Table 8-8 would be debt financed. Anticipated debt issuance terms are levelized principal and interest payments over a 30-year term at an interest rate of 4 percent. For each project, the debt proceeds equal the estimated cost of the project plus 10 percent to cover costs of issuance and a capitalized bond reserve. Table B-3 in Appendix B shows more detailed debt service calculations. The WMWD Hydraulic Improvements would be funded on a pay as you go basis, because the project cost (at approximately $1.5 million) is comparatively small. Figure 8-2 shows total projected water system expenses funded by WMWD each year through FY 29/30. $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Pay As You Go Capital and Replacement Debt Service Other O&M Expenses Purchased Water Figure 8-2. Projected Expenses: WMWD Scenario, $M 82 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.2.4 Projected Utility Reserves WMWD maintains a reserve balance in each of its four funds. As of July 1, 2020, the projected reserve balance in each fund is (rounded to the nearest $100,000): • Operating Fund (Fund 230): $2.5 million • Connection Fee Fund (Fund 231): -$0.8 million • Distribution Fund (Fund 233): $0.3 million • Asset Replacement Fund (Fund 235): $2.4 million There is currently a negative balance in the Connection Fee Fund, which implies a de facto loan from the Operating Fund to the Connection Fee Fund. WMWD maintains the following fiscal policies related to reserve balances: • Operating Fund (Fund 230): target balance of between three and six months of operating expenses • Connection Fee Fund (Fund 231): no policy established • Distribution Fund (Fund 233): no policy established • Asset Replacement Fund (Fund 235): WMWD staff provided a target reserve balance of between $6,355,923 and $14,235,000 Figure 8-3 shows the projected ending year reserve balance under the WMWD Ownership Scenario. It represents the combined reserve balance in the four WMWD funds. Also shown in Figure 8-3 are the minimum reserve balances according to WMWD’s reserve policies. The projected revenue impacts described above were developed to meet the reserve criteria at the end of the 10-year planning period. $10.0 $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 Minimum Reserve Balance Criteria Are 3 Months ofOperating Expenses $1.0 plus $6,355,923 in WMWD's Asset Replacement Fund. $0.0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Projected Ending Year Reserves WMWD's Minimum Reserve Criteria Figure 8-3. Projected Ending Year Reserve Balance: WMWD Scenario, $M 83 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.2.5 Projected Total Cost of Water The projected total cost of water is the sum of the water bill and the standby charge. It is shown for two example connections in Figures 8-2 and 8-3. Example Single Family Residential Connection • ¾-inch water meter • Monthly water use of 18 ccf, with 8 ccf/month in Tier 1 and 10 ccf/month in Tier 2 Example Commercial Connection • 2-inch water meter • Monthly water use of 125 ccf • 1 acre parcel The graphs below show the effect of the projected annual 3.3 percent revenue increases through FY 27/28. As described above, in this analysis, the projected annual revenue increases are applied across the board percentage increases to all connections. No changes in WMWD’s rate structure are contemplated in this analysis other than applying across the board percentage increases. If WMWD remains the system owner, it may choose to adjust rate structures to reflect WMWD policies or future cost of service analyses, and the total cost of water would be different from what is shown in Figures 8-4 and 8-5. $160 $140 $120 $100 $80 $60 $40 $20 $0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Figure 8-4. Projected Total Water Cost: WMWD Scenario (Single-Family Residence, ¾-inch Meter, 18 CCF/month, Power Zone 7) 84 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area $800 $700 $600 $500 $400 $300 $200 $100 $0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Figure 8-5. Projected Total Water Cost: WMWD Scenario (Commercial, 2-inch Meter, 125 CCF/month, Power Zone 7, 1 acre) 8.3 RCWD Ownership Scenario Details of the RCWD Ownership Scenario are described below. 8.3.1 Overview If Rancho California Water District acquires the Study Area, from a financial perspective, it would operate the utility in a financially distinct manner. Policy direction from RCWD staff was that RCWD would do a cost of service study after acquisition to identify whether the Study Area operation, if integrated into RCWD’s Santa Rosa Division, would result in any subsidies. If material subsidies were not identified, RCWD would consider an integrated operation, where the Study Area would become part of RCWD’s Santa Rosa Division. Like the WMWD Ownership Scenario described in Section 8.2, the financial projections for the RCWD Ownership Scenario cover a 10-year projection period ending in FY 29/30. Separate revenue and expense projections are made corresponding to RCWD’s policy directions, and these revenue and expense projections are shown below and in Appendix B, Table B-4. 85 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area For the purposes of this analysis, the initial rate structure applied to the Study Area under the RCWD Ownership Scenario is RCWD’s rate structure for its Santa Rosa Division. Table 8-9 shows RCWD’s Santa Rosa Division FY 19/20 Rate Structure. Table 8-9. FY 19/20 RCWD Santa Rosa Division Rate Schedule Monthly Service Charge Depending on Water Meter Size $/month ⅝" Meter(a) $29.51 ¾" Meter $44.04 1" Meter $66.49 1.5" Meter $117.50 2" Meter $180.79 3" Meter $532.49 4" Meter $1,047.78 6" Meter $1,669.23 8" Meter or Larger $2,358.21 Commodity Charge(b) $/CCF Residential, Multi Family & Landscape Tier 1 $1.286 Tier 2 $2.255 Tier 3 $3.235 Tier 4 $7.597 Commercial, Industrial, Ag, Domestic, and Other Tier 1 $2.044 Tier 2 $3.235 Tier 3 $7.597 (a) RCWD does not have ⅝" meters and does not have a Monthly Service Charge for ⅝" meters. Under the RCWD Ownership Scenario for connections with ⅝" meters in the Study Area, RCWD would apply its ¾" Monthly Service Charge, adjusted for the meter equivalent ratio between ⅝" meters and ¾" meters. (b) RCWD has energy charges for portions of its Santa Rosa Division that are not shown in this table. RCWD's energy charges are not expected to be applicable for the majority of the Study Area. RCWD’s rate structure is similar to WMWD’s. There is a Monthly Service Charge that depends on water meter size. RCWD doesn’t have ⅝-inch water meters in the Santa Rosa Division, so there is no Monthly Service Charge established for a ⅝-inch water meter. Per RCWD staff, RCWD would calculate a Monthly Service Charge for ⅝-inch water meters using RCWD’s meter equivalent ratios, and the rate shown in Table 8-9 reflects this calculation. RCWD also has a budget-based water rate structure, with four tiers for single-family residences, multi-family residences, and landscape connections. A three tier budget-based rate structure is established for all other connections. 86 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 8-10 compares RCWD’s and WMWD’s rate structures. For residential connections, the volume of water consumed in Tiers 1 and 2 will be approximately equal under RCWD’s and WMWD’s rate structures. For RCWD’s Outdoor Water Budget (where the Tier 2 rate is applied), RCWD uses an Evapotranspiration Adjustment Factor (ETAF, equivalent to WMWD’s Landscape Factor) of 75 percent for the first 30,000 square feet of irrigable area, and a 60 percent ETAF for irrigable area above 30,000 square feet. For residential connections exceeding their water budget, RCWD’s Tier 3 covers the same water use as the combination of WMWD’s Tier 3 and Tier 4. In terms of water use, RCWD’s Tier 4 is analogous to WMWD’s Tier 5. For commercial, industrial, and institutional connections, RCWD’s Tier 1 use is approximately the combination of WMWD’s Tier 1 and Tier 2 use, and RCWD’s Tier 2 use is approximately the combination of WMWD’s Tier 3 and Tier 4 use. Table 8-10. Comparison of WMWD and RCWD Rate Structures Tier WMWD Residential RCWD Residential WMWD CII RCWD CII Tier 1 100% IWB 100% IWB 90% TWB 100% AWB Tier 2 100% OWB 100% OWB 10% TWB 50% AWB Tier 3 25% TWB 50% TWB 25% TWB Above Tier 2 Tier 4 25% TWB Above Tier 3 25% TWB Tier 5 Above Tier 4 Above Tier 4 Residential CII (Commercial, Industrial, Institutional) RCWD Tier 1 Use = WMWD Tier 1 Use RCWD Tier 1 Use = WMWD Tier 1 + Tier 2 Use RCWD Tier 2 Use = WMWD Tier 2 Use RCWD Tier 2 Use = WMWD Tier 3 + Tier 4 Use RCWD Tier 3 Use = WMWD Tier 3 + Tier 4 Use RCWD Tier 3 Use = WMWD Tier 5 Use RCWD Tier 4 Use = WMWD Tier 4 Use CII = Commercial, Industrial, Institutional IWB = Indoor Water Budget OWB = Outdoor Water Budget TWB = Total Water Budget AWB = Annual Water Budget 87 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 8-11 shows the current capacity charges for RCWD’s Santa Rosa Division. The capacity charge for a new ¾-inch water meter is $2,537 and for a new 1-inch meter, the capacity charge is $4,313. RCWD’s capacity charges are lower than WMWD’s connection fees. Table 8-11. FY 19/20 RCWD Santa Rosa Division Capacity Charges Water Meter Size FY 19/20 Capacity Charge ⅝" Meter $1,700 ¾" Meter $2,537 1" Meter $4,313 1.5" Meter $8,372 2" Meter $13,445 2" Turbine Meter $25,367 3" Meter $42,363 4" Meter $84,471 6" Meter $135,204 8" Meter or Larger $191,518 8.3.2 Projected Revenues Projected revenues by revenue type are detailed below. 8.3.2.1 Water Rates Water rate revenues under RCWD’s FY 19/20 Santa Rosa Division rates were calculated by FG Solutions based on the rate schedule shown above in Table 8-9, along with connection and water use data provided by WMWD. The connection and water use data under the RCWD Ownership Scenario are the same as under the WMWD Ownership Scenario (and shown in Section 8.2). 88 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Future water rate revenue increases were estimated by FG Solutions based on providing sufficient revenues to fund projected water system expenses through FY 29/30 and meet RCWD’s minimum reserve criteria. The projected increases in water rate revenues are shown in Table 8-12 and reserves are discussed in Section 8.3.4 below. Table 8-12. Projected Water Rate Revenue, RCWD Ownership Scenario Projected Water Rate Revenues % Increase in Water Rate At FY 19/20 Rate Fiscal Year Revenues(a) Rates(b) Increases(c) Total FY 20/21 2.0% $3,978,531 $79,571 $4,058,102 FY 21/22 2.0% $4,042,950 $163,335 $4,206,285 FY 22/23 2.0% $4,108,412 $251,468 $4,359,880 FY 23/24 2.0% $4,174,934 $344,149 $4,519,083 FY 24/25 2.0% $4,242,533 $441,567 $4,684,100 FY 25/26 2.0% $4,311,616 $543,963 $4,855,579 FY 26/27 2.0% $4,381,824 $651,515 $5,033,339 FY 27/28 2.0% $4,453,175 $764,430 $5,217,605 FY 28/29 0.0% $4,525,688 $776,878 $5,302,566 FY 29/30 0.0% $4,599,382 $789,527 $5,388,909 (a) Rate increases presumed effective on July 1 of each year. (b) Increase in rate revenues at RCWD's FY 19/20 Rates are from system growth. (c) See Appendix B, Table B-4 for more detail. 8.3.2.2 Ad Valorem Taxes RCWD currently charges an Ad Valorem tax to connections in its Santa Rosa Division. The current Ad Valorem tax rate is $0.50 per year per $100 of assessed land value. RCWD staff reports that Ad Valorem tax revenues are typically used for capital expenses, including paying debt service. RCWD’s policy direction for this FMSR is that if possible, RCWD would apply an Ad Valorem tax to the Study Area as well. FG Solutions obtained parcel data from the City of Murrieta, which contains land value for every parcel in the Study Area. With detailed calculations in Appendix B, Table B-4, the estimated annual Ad Valorem tax revenues in the Study Area for parcels currently served by WMWD is approximately $2,040,000. If RCWD applies the Ad Valorem tax to the Study Area, then parcels not currently receiving water service from WMWD, EMWD, or RCWD in the Study Area would also pay the Ad Valorem tax. However, the revenue from these parcels was not included in this financial analysis. In future years, the revenue from the Ad Valorem tax is assumed to increase by the rate of land inflation, assumed to be 2.5 percent per year. The Ad Valorem rate of $0.50 per $100 of assessed land value is not expected to change. 89 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.3.2.3 Water Rate Surcharge If RCWD is not able to apply an Ad Valorem tax, or chooses not to, RCWD indicated (as policy direction from staff) that RCWD would apply a revenue-neutral water rate surcharge to recover the same amount of revenue as the Ad Valorem tax would have collected. Initially, the water rate surcharge is intended to collect approximately $2,040,000 per year, equivalent to the projected revenue from the Ad Valorem tax. This represents approximately 51.26 percent increase to the Monthly Service Charges and Commodity Charges shown in Table 8-9. In future years, the amount of revenue from the Water Rate Surcharge would increase by 2.5 percent per year, to maintain consistency with the concept of collecting the same amount of revenue that the Ad Valorem tax would have. 8.3.2.4 Other Revenues Besides revenues from water rates, the Ad Valorem tax, and/or the water rate surcharge, there are additional smaller sources of utility revenue. Table 8-13 shows the projected annual revenue from each revenue source over the 10-year financial planning period. Water rate revenues and either the Ad Valorem tax or the water rate surcharge would combine for over 90 percent of total water system revenues. Smaller amounts of revenue are anticipated from Standby Charges, Capacity Charges, interest income, delinquent penalties, and other miscellaneous sources. Table 8-13. Average Annual Revenues, RCWD Ownership Scenario Projected Average Annual Revenue Type of Revenue Amount Percentage Note Water Rates $4,762,545 60.5% 1, 2 Ad Valorem Tax or Water Rate Surcharge $2,342,011 29.7% 2 Capacity Charges $194,761 2.5% 2 Standby Charges $462,731 5.9% 2 Interest Income $53,499 0.7% 2 Delinquent Penalties $53,045 0.7% 2 Other $4,244 0.1% 2 Total $7,872,836 100.0% Notes: (1) See Table 8-12. (2) See Appendix B, Table B-4 for more detail. Totals may not add up due to rounding. 90 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Figure 8-6 shows projected Study Area revenues for each year through FY 29/30 under the RCWD Ownership Scenario. This graph shows the relative importance of water rate revenues and the Ad Valorem Tax/Water Rate Surcharge. $12 $10 $8 $6 $4 $2 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Interest Income Standby Charges Other Non-Rate Revenue AV Tax or Water Rate Surcharge Water Rates Figure 8-6. Projected Revenues: RCWD Scenario, $M 8.3.3 Projected Expenses Projected expenses by type are described below. 8.3.3.1 Source of Supply Under the RCWD Ownership Scenario, RCWD would provide imported water without it being delivered at the Los Alamos interconnection point from EMWD. For the purposes of this analysis, the unit cost per acre foot of imported water would be equal to the MWD Tier 1 Treated Rate plus 10 percent. The 10 percent factor is to cover MWD’s Capacity Charges and Ready to Serve Charges. Projected source of supply expenses are shown below in Table 8-14 along with other O&M expenses. 8.3.3.2 Other Operation and Maintenance Table 8-14 shows projected O&M expenses, which includes the source of supply expenses as well as other components of O&M expenses. Many of the projected O&M expenses shown in this RCWD Ownership Scenario are projected to be the same as under the WMWD Ownership Scenario. The exceptions are purchased water, because RCWD would supply imported water in a different manner and with a different cost structure than WMWD. In general, all O&M expenses are escalated for inflation at a rate of 2.5 percent per year, except purchased water costs which are linked to MWD Tier 1 costs. Connection account expenses are also increased by the rate of system growth. 91 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Table 8.14. Projected O&M Expenses, RCWD Ownership Scenario FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Water Pumping 279,316 286,298 293,456 300,792 308,312 316,020 323,920 332,018 340,319 348,827 Transmission & Distribution 1,345,278 1,378,910 1,413,382 1,448,717 1,484,935 1,522,058 1,560,110 1,599,112 1,639,090 1,680,067 Customer Accounts 194,822 202,926 211,367 220,159 229,317 238,878 248,836 259,211 270,017 281,274 G&A Allocation 667,864 684,561 701,675 719,217 737,197 755,627 774,518 793,881 813,728 834,071 Other Operating Expenses 126,790 129,960 133,209 136,539 139,953 143,452 147,038 150,714 154,482 158,344 Purchased Water 1,136,889 1,240,134 1,349,234 1,452,788 1,550,253 1,650,218 1,752,904 1,861,616 1,978,049 2,106,981 Source of Supply 332,973 341,297 349,829 358,575 367,539 376,728 386,146 395,800 405,695 415,837 Treatment 133,284 136,616 140,031 143,532 147,120 150,798 154,568 158,432 162,393 166,453 Water Use Efficiency 51,199 53,328 55,547 57,857 60,264 62,776 65,394 68,120 70,960 73,918 Other Non-Operating Expenses 3,403 3,488 3,575 3,665 3,756 3,850 3,946 4,045 4,146 4,250 Total $4,271,818 $4,457,518 $4,651,306 $4,841,842 $5,028,647 $5,220,406 $5,417,381 $5,622,949 $5,838,879 $6,070,023 Riverside County LAFCO Focused Municipal Service Review for the l\c\868\40-19-01\wp\r\DRAFT 1452AFLAFCOFinancialModel 04252020 Murrieta Service Ares Last Revised: 09-23-2020 Focused Municipal Services Review for the Murrieta Service Area 8.3.3.3 Repair and Replacement RCWD is anticipating $500,000 each year for infrastructure repair and replacement expenses within the Study Area, in addition to capital expenses described in Sections 5 and 6. RCWD is also anticipating that the Study Area would contribute $540,00 per year toward repair and replacement of RCWD facilities that will provide water source, storage, and transmission services to the Study Area. 8.3.3.4 Capital Project Funding Table 8-15 shows how the capital projects shown in Sections 5 and 6 would be funded. The majority of the projected approximately $54 million in capital investment is related to development. Some of this (approximately $2.3 million) would be funded by RCWD and the cost incorporated into its connection fee. Approximately $14.6 million is related to improving service to existing connection, the majority of which is buying into RCWD’s existing facilities located in its Santa Rosa Division. These existing facilities in the Santa Rosa Division that would benefit existing Study Area customers, including storage and transmission facilities. As with the WMWD Ownership Scenario, approximately $5 million of the capital investment is to replace legacy small diameter pipelines. 8.3.3.5 Debt Service For the purposes of this analysis, RCWD would issue debt to pay for all of the RCWD-funded improvements in Table 8-15. Table 8-15. Projected Capital Improvement Funding, RCWD Ownership Scenario Benefits Future Development Benefits Existing Funded by Estimated Customers, Funded by Developers ID, Project Cost, 2020 $ RCWD Funded RCWD or CFD Buy-In to RCWD for Existing Customers 9,659,628 9,659,628 Expansion CIP North of Murrieta Creek 17,120,000 17,120,000 Expansion CIP South of Murrieta Creek 20,388,000 20,388,000 RCWD Hydraulic Improvements 2,255,000 2,255,000 Legacy (Small Diameter) Improvements 4,947,000 4,947,000 Total $54,369,628 $14,606,628 $2,255,000 $37,508,000 Notes: (1) RCWD anticipates requiring existing Murrieta Study Area customers to buy into RCWD facilities, including storage facilities, distribution facilities, and accessing MWD connections. This buy-in eliminates the need to separately build additional reservoir storage. (2) Project benefits future development only and would not be done if there was no future development. (3) Under some circumstances, RCWD would accept an Assessment District or related type of financing for these improvements. For this analysis, these improvements would be funded either directly by developers or through an Assessment District. They would not be funded directly by RCWD. (4) For facilities of this magnitude, RCWD would fund the project, and incorporate the cost in its Capacity Charge. Capacity Charge revenues, over time, would pay for the project. 93 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Anticipated debt issuance terms are levelized principal and interest payments over a 30-year term at an interest rate of 4 percent. For each project, the debt proceeds equal the estimated cost of the project plus 10 percent to cover costs of issuance and a capitalized bond reserve. Table B-4 in Appendix B shows more detailed debt service calculations. RCWD would not pay debt service on the existing WMWD debt described in Section 8.2.3. Instead, as described below, some of the existing reserves associated with the Study Area (described in Section 8.2.4 above) would be retained by WMWD to retire WMWD’s existing debt. Figure 8-7 shows projected RCWD-funded Study Area expenses under the RCWD Ownership Scenario. $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 WMWD Capital + Repair/Repl FMSR Capital Excl. Imp. Districts Other O&M Expenses Purchased Water Figure 8-7. Projected Expenses: RCWD Scenario, $M 8.3.4 Projected Utility Reserves Upon acquisition of the water system, WMWD would transfer its reserves associated with the Study Area to RCWD, less an amount needed to repay the existing two WMWD debt issuances described in Section 8.2.3. The estimated reserve amount transferred is approximately $1.3 million, with calculations shown in Table B-4 of Appendix B. RCWD’s policy direction is that it would apply its reserve criteria applicable to its Santa Rosa Division to the Study Area, acknowledging that reserves in the Study Area would accumulate over the 10-year planning period to meet reserve criteria. The reserve criteria are: • Working capital reserve: within five years, accumulate four months’ worth of the Study Area operating budget • Drought reserve: within 10 years, accumulate 30 percent of the cost of local supply volume at MWD’s Tier 1 untreated rate effective at the end of the fiscal year. 94 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area • Rate stabilization fund reserve: within 10 years, accumulate three months of Operating Budget within ten years. • Risk management reserve: within 10 years, accumulate $750,000 plus 1 percent of current gross plant value. RCWD also has a water replenishment reserve, which would not be applicable to the Study Area. Figure 8-8 shows the projected reserves associated with the Study Area under the RCWD Ownership Scenario, indicating that the cumulative reserves meet the RCWD criteria by the end of the 10-year planning period. $7 $6 $5 $4 $3 $2 $1 $0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Projected Ending Year Reserves RCWD's Minimum Reserve Criteria Figure 8-8. Projected Ending Year Reserve Balance: RCWD Scenario, $M 8.3.5 Projected Total Cost of Water The projected total cost of water is the sum of the water bill, the standby charge, and either the Ad Valorem Tax or the water rate surcharge. It is shown for two example connection in Figures 8-9 and 8-10. Example Single Family Residential Connection • ¾-inch water meter • Monthly water use of 18 ccf, with 8 ccf/month in Tier 1 and 10 ccf/month in Tier 2 • Assessed land value of $80,000 95 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Example Commercial Connection • 2-inch water meter • Monthly water use of 125 ccf • 1 acre parcel • Assessed land value of $200,000 In Figures 8-9 and 8-10, separate total cost projections are shown for (a) the scenario where RCWD applies an Ad Valorem Tax, and (b) the scenario where RCWD applies a water rate surcharge. For the examples shown, the total cost is higher under an Ad Valorem Tax, but that would not be the case for all connections. Connections with high land value relative to water use would see a higher total cost with an Ad Valorem Tax, and connections with high water use relative to land value would see a higher total cost with a water rate surcharge. The graphs below show the effect of the projected annual 2.0 percent water rate revenue increases through FY 27/28. As described above, in this analysis, the projected annual revenue increases are applied across the board percentage increases to all connections. No changes in RCWD’s rate structure are contemplated in this analysis other than applying across the board percentage increases. If RCWD acquires the water system, it may choose to adjust rate structures to reflect RCWD policies or future cost of service analyses, and the total cost of water would be different from what is shown in Figures 8-9 and 8-10. $160 $140 Water Rate Surcharge $120 Ad Valorem Tax $100 $80 $60 $40 $20 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Figure 8-9. Projected Monthly Total Cost (Water Bill + AV Tax/Surcharge + Standby): RCWD Scenario (SFR, ¾-inch Meter, 18 CCF/month, $80K Land Value) 96 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area $900 $800 Water Rate Surcharge $700 $600 Ad Valorem Tax $500 $400 $300 $200 $100 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Figure 8-10. Projected Monthly Total Cost (Water Bill + AV Tax/Surcharge + Standby): RCWD Scenario (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value, 1 acre) 8.4 EMWD Ownership Scenario The components of the EMWD Ownership Scenario are described below. 8.4.1 Overview If Eastern Municipal Water District acquires the Study Area, from a financial and operational perspective, it would operate the utility in a financially integrated manner. EMWD has proposed a methodology to assess revenues and expenditures in the Study Area, and to fund the capital projects identified in Sections 5 and 6. Key aspects of this methodology are: Revenues 1. Upon acquisition of the system, EMWD would retain WMWD’s existing rate structure, rate tier definitions, and water budget methodology for the Study Area with one adjustment. a. EMWD would reduce WMWD’s Fixed System Charge by 20 percent. For the majority of Study Area connections with a ¾-inch water meter, this would reduce water bills by $8.88 per month. b. In this FMSR, the water rates that EMWD would apply in the Study Area are referred to as “Adjusted WMWD Rates” 2. EMWD would track revenues from its application of the Adjusted WMWD Rates. 3. EMWD would also track what revenues would have been, if EMWD charged its water rates that all other EMWD connections are charged. 97 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 4. The Adjusted WMWD Rates collect more revenue than EMWD’s rates. 5. The amount of revenue that would have been collected from EMWD’s rates is used to pay O&M and rate-funded capital expenses (see below) 6. The difference in revenue from the Adjusted WMWD Rates and what would have been collected from EMWD’s rates will be used to pay down the “Acquisition Balance” (see below for a discussion of the Acquisition Balance). 7. After the Acquisition Balance is paid off, EMWD would apply its then-current water rates (the same rate schedule it charges other connections) to the Study Area. For most connections, water bills would decrease at this future time. O&M Expenses 1. Since the Study Area is financially integrated with the remainder of EMWD’s Service Area, a separate projection of expenses for the Study Area is not relevant and was not developed for this analysis. 2. Instead, the Study Area’s share of the total EMWD water system expenses is calculated proportional to water demand. 3. EMWD provided EMWD’s water system expenses, to enable a calculation of expenses per acre-foot of metered water demand. 4. The Study Area’s share of EMWD’s water system expenses is estimated on an annual basis by multiplying the projected Study Area water demand times the per acre-foot cost of EMWD’s water system expenses. Capital Expenses 1. Capital expenses are divided into three categories: a. Those benefitting existing connections which are required to bring the Study Area up to operational parity with the remainder of EMWD’s service area. b. Those needed to accommodate future development that are funded by EMWD and paid for using EMWD’s Facility Participation Charge revenues c. Those needed to accommodate future development that are not funded by EMWD, and are funded by development. Acquisition Balance 1. The Acquisition Balance is the amount of funds needed to bring the Study Area water system into operational and financial parity with the remainder of the EMWD water system. It is discussed below in more detail. As described above, EMWD would initially apply Adjusted WMWD Rates to the Study Area. WMWD rates are shown above in Table 8-2, and EMWD would reduce the WMWD’s Fixed System Charge by 20 percent. 98 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area After the Acquisition Balance is paid off, EMWD would transition the Study Area to then- current EMWD rates. EMWD’s has adopted rates for CY 2020 and CY 2021, which are shown in Table 8-16. EMWD has two fixed charges: a Daily Service Charge and a Monthly Fixed Charge for Water Supply and Reliability. Both of the fixed charges depend on water meter size. EMWD has a four tier budget-based rate structure, also shown in Table 8-16. Table 8-16. Calendar Year 2020 and Calendar Year 2021 EMWD Rate Schedule Monthly Fixed Charge for Daily Service Charge $/month Water Supply and Reliability Fixed Charges CY 2020 CY 2021 CY 2020 CY 2021 ⅝" Meter $13.38 $13.99 $3.95 $4.26 ¾" Meter $13.38 $13.99 $3.95 $4.26 1" Meter $18.25 $19.16 $5.93 $6.39 1.5" Meter $50.19 $52.62 $19.75 $21.30 2" Meter $78.17 $81.52 $31.60 $34.08 3" Meter $152.08 $159.08 $63.20 $68.16 4" Meter $235.12 $245.77 $98.75 $106.50 Commodity Charges, $/CCF CY 2020 CY 2021 Residential Tier 1 $1.10 $1.13 Tier 2 $3.53 $3.63 Tier 3: Excessive Use $5.84 $6.01 Tier 4: Wasteful Use $11.94 $12.30 Non-Residential Tier 1 $3.66 $3.77 Tier 2 $7.43 $7.65 Tier 3: Excessive Use $12.38 $12.75 99 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 8-17 compares EMWD’s and WMWD’s rate structures. EMWD has a four-tier rate structure for residential connections. EMWD calculates separate Indoor Water Budgets and Outdoor Water Budgets. The Outdoor Water Budget is based on landscaped area, the weather, and the following Evapotranspiration Adjustment Factors. • Homes connected prior to December 31, 2010 receive 80 percent of ET • Homes connected between January 1, 2011 and May 31, 2015 receive 70 percent of ET • Homes connected on or after June 1, 2015 receive 50 percent of ET Table 8-17. Comparison of WMWD and EMWD Budget-Based Rate Structure Tiers WMWD Non- EMWD Non- Tier WMWD Residential EMWD Residential Residential Residential Tier 1 100% IWB 0 - 20% TWB 90% TWB 100% TWB Tier 2 100% OWB 20 - 100% TWB 10% TWB 101-150% TWB Tier 3 25% TWB 101-150% TWB 25% TWB Above Tier 2 Tier 4 25% TWB Above Tier 3 25% TWB Tier 5 Above Tier 4 164 Above Tier 4 Residential Non-Residential EMWD Tier 1 Use ~ WMWD Tier 1 Use EMWD Tier 1 Use = WMWD Tier 1 + Tier 2 Use EMWD Tier 2 Use ~ WMWD Tier 2 Use EMWD Tier 2 Use = WMWD Tier 3 + Tier 4 Use EMWD Tier 3 Use = WMWD Tier 3 + Tier 4 Use EMWD Tier 3 Use = WMWD Tier 5 Use EMWD Tier 4 Use = WMWD Tier 4 Use IWB = Indoor Water Budget OWB = Outdoor Water Budget TWB = Total Water Budget This FMSR is based on the assumption that the Study Area will be grandfathered into an ETAF that predates connection in 2010, as many of the single-family residences in the Study Area existed prior to 2010. The way that EMWD allocates water between Tier 1 and Tier 2 is different from WMWD or RCWD. • RCWD and WMWD have separate calculations for Indoor Water Budgets and Outdoor Water Budgets. All the Indoor Water Budget is sold at the Tier 1 rate and all of the Outdoor Water Budget is sold at the Tier 2 rate. • EMWD calculates separate Indoor Water Budget and Outdoor Water Budgets, and then adds them together to generate the Total Water Budget. • 20 percent of the Total Water Budget is sold at the Tier 1 water rate, and 80 percent of the Total Water Budget is sold at the Tier 2 water rate. 100 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area It is possible, for many Study Area residential connections, that more of their water use will be sold at Tier 2 rates under the EMWD Ownership Scenario than under the RCWD and WMWD Ownership Scenarios. For the EMWD Ownership Scenario, the total water cost calculation shown later in this Section is based on 18 ccf per month water consumption, with 3.4 ccf/month occurring in Tier 1. 3.4 ccf/month is 20 percent of 18 ccf/month. This is a reasonable assumption for the EMWD Ownership Scenario if the Total Water Budget is 18 ccf/month. It is not within the scope of this FMSR for the Consultant Team to evaluate the typical Total Water Budget for the Study Area connections to test this assumption. Table 8-18 shows CY 2020 EMWD Financial Participation Charges. The FPC for most new connections would be $5,501. Table 8-18. CY 2020 EMWD Financial Participation Charges Meter Size CY 2020 Financial Participation Charge ⅝" Meter $5,501 ¾" Meter $5,501 1" Meter $5,501 1.5" Meter $27,505 2" Meter $44,008 - $73,328 3" Meter $146,711.67 - $183,348.33 4" Meter $293,368.33 - $366,751.67 6" Meter $586,792 Note: If a range of Financial Participation Charges is shown, then the charge depends on the type of meter installed. The charges for ⅝" and ¾" meters shown are for residential customers, and assume a fire sprinkler is installed. Charges for residential customers without fire sprinklers are not shown in this table. EMWD notes that the closest 2-inch water meter Financial Participation Charge for the example commercial customer described above is $44,008, and for this example commercial customer, a 1.5-inch meter might be applied. 8.4.2 Projected Revenues Projected revenues by revenue type are described below. 101 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.4.2.1 Water Rate Revenues Projected water rate revenues under the EMWD Ownership Scenario are shown in Table 8-19. The table shows total rate revenues under the Adjusted WMWD Rates as (1) annual revenue increases become effective, and (2) as the system transitions to use of then-current EMWD rates after the acquisition balance is paid off. Table 8-19. Projected Water Rate Revenues, EMWD Ownership Scenario Projected Water Rate Fiscal Year Revenues Applicable Rate Schedule FY 20/21 $5,264,354 Adjusted WMWD Rates FY 21/22 $5,552,652 Adjusted WMWD Rates FY 22/23 $5,856,854 Adjusted WMWD Rates FY 23/24 $6,177,717 Adjusted WMWD Rates FY 24/25 $6,516,283 Adjusted WMWD Rates FY 25/26 $6,874,068 Adjusted WMWD Rates FY 26/27 $7,251,490 Adjusted WMWD Rates FY 27/28 $7,649,779 Adjusted WMWD Rates FY 28/29 $7,649,779 Adjusted WMWD Rates FY 29/30 $7,649,779 Adjusted WMWD Rates Notes: (1) Rate increases presumed effective on July 1 of each year. (2) Increase in rate revenues at RCWD's FY 19/20 Rates are from system growth. (3) See Appendix B, Table B-5 for more detail. Through at least the ten-year planning period the Adjusted WMWD Rate Schedule would be applicable. Future increases in the Adjusted WMWD Rates were estimated by FG Solutions based on providing sufficient revenues to fund projected water system expenses through FY 29/30 and completely pay down the Acquisition Balance (described below). Annual 3.8 percent increases from the Adjusted WMWD Rates in CY 2020 are projected. To project how fast the Acquisition Balance is paid off, FG Solutions assumed that EMWD’s retail rates would increase by 2.5 percent each year. After the Acquisition Balance is paid off, EMWD would transition the Study Area to its then-current retail rate structure. This is expected to happen within approximately 12 years. Additional details of monthly water bill calculations are in Appendix B, Table B-5. For many single-family residential connections, the water rate would go down as rates are transitioned from the Adjusted WMWD Rates to EMWD Rates. It is possible that some commercial connections might see rate increases when rates are transitioned from the Adjusted WMWD Rates to EMWD Rates. 102 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.4.2.2 Other Revenues Other revenues are from Financial Participation Charges, Standby Charges, interest income, and other miscellaneous sources of revenue such as rents/leases, and delinquent penalties. Table 8-20 shows the projected average annual revenue from each revenue source over the 10-year financial planning period. Water rate revenues are projected to represent nearly 90 percent of total water system revenues. The next largest source of revenues is from Financial Participation Charges. Table 8-20. Projected Average Annual Revenues, EMWD Ownership Scenario Projected Average Annual Revenue Type of Revenue Amount Percentage Note Water Rates 6,487,761 89.3% 1 Financial Participation Charges 549,196 7.6% 1 Standby Charges 92,652 1.3% 1 Interest Income 78,881 1.1% 1 Delinquent Penalties 53,045 0.7% 1 Other 4,244 0.1% 1 Total $7,265,778 100.0% Notes: (1) See Appendix B, Table B-5 for more detail. Totals may not add up due to rounding. Figure 8-11 shows projected revenues under the EMWD Ownership Scenario. Not shown in Figure 8-11 are revenues from Financial Participation Charges. This is because of EMWD intends to integrate the Study Area with the rest of EMWD’s retail system, and Financial Participation Charges revenues from the Study Area would be deposited in EMWD’s Financial Participation Charge fund serving its entire system. $9 $8 $7 $6 $5 Revenues Will DecreaseAfter Acquisition Balance $4 is Paid Off, Projected to be After FY 29/30. At $3 This Time, Rates Switch from Adjusted WMWD Rates to EMWD Rates $2 $1 $0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Interest Income Standby Charges Figure 8-11. Projected Revenues: EMWD Scenario, $M 103 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.4.3 Projected Expenses Projected expenses by type are provided below. 8.4.3.1 Study Area Share of EMWD Expenses Table 8-21 shows how much EMWD estimates it will spend in FY 20/21 providing water service to its retail connections, on a per-acre foot basis. This unit cost, estimated at $1,850 AF of metered water consumption, includes O&M, repair/replacement capital, debt service, and post employment benefits. Table 8-21. Estimated FY 20/21 EMWD Per Acre-Foot Cost of Water Service EMWD System-Wide Estimated Category FY 20/21 Cost Purchased Water 78,021,000 Groundwater Replenishment O&M 724,417 Operations & Maintenance 20,335,266 Energy 7,729,356 Allocated Support Costs 24,850,322 General and Admin Allocation 5,054,221 Capital/Repair & Replacement 13,239,287 Debt Service 4,047,495 Post Employment Benefits 7,182,927 Total $161,184,291 EMWD Acre-Feet Per Year Demand 88,100 Unit Cost, $/Acre-Foot Demand $1,830 Table 8-22 shows the calculation of the projected FY 20/21 Study Area share of EMWD’s water system cost. Table 8-22. Projected Study Area Share of EMWD Water System Cost FY 20/21 Unit Cost, $/Acre-Foot Demand $1,830 Projected FY 20/21 Study Area Demand, AF 2,388 Projected FY 20/21 Study Area Share of EMWD Water System Cost 4,368,533 104 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.4.3.2 Capital Project Funding Table 8-23 shows how the capital projects shown in Sections 5 and 6 would be funded. The majority of the projected approximately $53 million in capital investment is related to development. Approximately $7.2 million would be included in the Acquisition Balance, and an additional approximately $8.7 million would be funded by EMWD and paid for using Financial Participation Charge revenues. Table 8-23. Projected Capital Improvement Funding, EMWD Ownership Scenario $ to Future Development Financial Funded by Estimated Cost, Acquisition Participation Developers or Project 2020 $ Balance Charges Imp. District Note Storage (Hunter Tank) 4,056,000 2,245,626 1,810,374 1, 2, 3, 4 Expansion CIP North of Murrieta Creek 17,120,000 17,120,000 5 Expansion CIP South of Murrieta Creek 20,388,000 20,388,000 5 EMWD Hydraulic Improvements 1,468,000 1,468,000 3 Supply Improvements Through EMWD 5,379,000 5,379,000 3 Legacy (Small Diameter) Improvements 4,947,000 4,947,000 6 Total $53,358,000 $7,192,626 $8,657,374 $37,508,000 0 Notes: (1) The proposed improvement to the Hunter Tank would benefit existing Study Area connections, future development in the for the portion of the Hunter Tank that benefits the Study Area and excludes the portion that benefits the current EMWD retail service area. (2) Project benefits both existing connections and future development. Cost division between existing connections and future development is based on the ratio of existing meter equivalents to buildout meter equivalents. (3) The portion of the project cost that benefits existing connections would be included in the Acquisition Balance (4) For facilities of this magnitude, EMWD would fund the project, and incorporate the cost in its Financial Participation Charge. Financial Participation Charge revenues, over time, would pay for the project. (5) Under some circumstances, EMWD would accept an Assessment District or related type of financing for these improvements. For this analysis, these improvements would be funded either directly by developers or through an Assessment District(s). They would not be funded directly by EMWD. (6) These improvements are needed to support existing development. 105 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.4.3.3 Preliminary Acquisition Balance Calculation Table 8-24 shows the preliminary calculation of the Acquisition Balance. The majority of the Acquisition Balance is related to capital improvements that benefit existing connections, shown in Table 8-22. The WMWD-identified capital improvements for the tank mixing system, GIS system, and reservoir recoating are also included. Further, $620 per Meter Equivalent is assessed to buy in to existing EMWD facilities that would be used to supply water to the Study Area. Table 8-24. Preliminary Acquisition Balance Calculation Component of Acquisition Balance Amount Note Capital Costs to Achieve Conditional and Operational Parity Identified in FMSR $7,192,626 1 Identified by WMWD $1,950,000 2 Prospective PERS Pension & OPEB Costs for Transferred Employees; Severance $0 3 Replacement and Refurbishment Reserve $0 4 Buy-In to Imported Water Turnouts, Distribution, and Treatment $2,827,820 5 Total $11,970,446 Notes: (1) See Table 8-22 (2) Includes GIS Mapping, Tank Mixing System, and Reservoir Recoating (3) Not applicable, per EMWD. EMWD does not anticipate transfer of any existing WMWD staff under the EMWD Ownership Scenario. (4) This is a charge that EMWD would normally assess, but is electing not to require because of the transfer of reserves associated with the Study Area from WMWD. (5) $620 per meter equivalent. Figure 8-12 shows total expenses under the EMWD Ownership Scenario. This figure shows the Study Area share of EMWD expenses, and the paydown of the Acquisition Balance. $8 $7 $6 $5 $4 $3 $2 $1 $0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Study Area Share of EMWD Expenses Paydown of Acquisition Balance Figure 8-12. Projected Expenses: EMWD Scenario, $M 106 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.4.4 Projected Study Area Contribution to EMWD Reserves Figure 8-13 shows the cumulative projected amount that the Study Area would contribute to EMWD’s water system reserves. Because of the financially integrated nature of the EMWD Ownership Scenario, there would not be a separate reserve fund for the Study Area. Projected Study Area Contribution to EMWD Reserves: EMWD Scenario, $M $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Figure 8-13. Projected Study Area Contribution to EMWD Reserves: EMWD Scenario, $M 8.4.5 Projected Total Cost of Water The projected total cost of water is the sum of the water bill and the standby charge. It is shown for two example connections in Figures 8-14 and 8-15. 8.4.5.1 Example Single Family Residential Connection • ¾-inch water meter • Monthly water use of 18 ccf, with 8 ccf/month in Tier 1 and 10 ccf/month in Tier 2 8.4.5.2 Example Commercial Connection • 2-inch water meter • Monthly water use of 125 ccf • 1 acre parcel The graphs below show the effect of the projected annual 3.8 percent water rate revenue increases for the Adjusted WMWD Rates through FY 27/28. As described above, in this analysis, the projected annual revenue increases are applied across the board percentage increases to all connections. No changes in the Adjusted WMWD Rate Structure or EMWD’s rate structure are contemplated in this analysis other than applying across the board percentage increases. If EMWD acquires the water system, it may choose to adjust rate 107 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area structures to reflect EMWD policies or future cost of service analyses, and the total cost of water would be different from what is shown in Figures 8-14 and 8-15. $140 $120 $100 $80 Total Cost Will DecreaseAfter Acquisition Balance is Paid Off, Projected to be After FY 29/30. At $60 This Time, Rates Switch from Adjusted WMWD Rates to EMWD Rates $40 $20 $0 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 Figure 8-14. Projected Monthly Total Water Cost: EMWD Scenario (Single-Family Residence, ¾-inch Meter, 18 CCF/month) $800 $700 $600 $500 $400 Total Cost Will IncreaseAfter Acquisition Balance $300 is Paid Off, Projected to be After FY 29/30. At This Time, Rates Switch from Adjusted WMWD Rates $200 to EMWD Rates $100 $0 FY 20/21FY 21/22FY 22/23FY 23/24FY 24/25FY 25/26FY 26/27FY 27/28FY 28/29FY 29/30 Figure 8-15. Projected Monthly Total Water Cost: EMWD Scenario (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value) 108 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 8.5 Side by Side Comparisons Side by side comparisons for the total cost to existing connections and the total impact to development are provided below. 8.5.1 Total Cost to Existing Connections Figure 8-16 shows the total cost of water for the single-family residential example, for all three Ownership Scenarios. Projected Monthly Total Cost: Comparison of Scenarios (SFR, 3/4" Meter, 18 hcf/month, $80K Land Value) $160 $140 $120 $100 $80 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 RCWD Water Rate Surcharge RCWD Ad Valorem Tax EMWD WMWD Figure 8-16. Projected Monthly Total Cost: Comparison of Scenarios (SFR, ¾-inch Meter, 18 CCF/month, $80K Land Value) This graph shows that the EMWD Ownership Scenario, has the lowest total cost of water for the example single-family residence. After EMWD’s Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water for the single-family residential example would decrease further. The RCWD Ownership Scenario has the highest total cost of water, though the total cost of water under the RCWD Ownership Scenario will also depend on whether an Ad Valorem tax is applied, or if RCWD applies the water rate surcharge. 109 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Figure 8-17 shows the total cost of water for the commercial example, for all three Ownership Scenarios. Projected Monthly Total Cost: Comparison of Scenarios (Commercial, 2" Meter, 125 hcf/month, $200K Land Value, 1 acre) $900 $800 $700 $600 $500 FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 RCWD Water Rate Surcharge RCWD Ad Valorem Tax EMWD WMWD Figure 8-17. Projected Monthly Total Cost: Comparison of Scenarios (Commercial, 2-inch Meter, 125 CCF/month, $200K Land Value, 1 acre) Figure 8-17 shows that the implementation of the Ad Valorem Tax results in the RCWD Ownership Scenario providing the lowest total cost of water for the land value assumption shown. If RCWD does not implement an Ad Valorem Tax, until the EMWD Acquisition Balance is paid off, the total cost of water for this commercial example will be lowest under the EMWD Ownership Scenario. There is a wide range of projected total cost under the RCWD Ownership Scenario, depending on whether an Ad Valorem Tax or Water Rate Surcharge is applied. After the EMWD’s Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water under the EMWD Ownership Scenario is expected to increase, because EMWD’s commercial water rates are generally higher than WMWD’s commercial water rates. 8.5.2 Financial Impact to Development The financial impact to development can be measured according to two factors: 1. How the $37 million in CIP Expansion improvements can be funded, and 2. The Magnitude of connection fees 8.5.2.1.1 CIP Expansion Improvement Funding Developer Funding: In all Ownership Scenarios, Developer Funding is possible. This FMSR does not speculate on the capacity or willingness of developers to fund all or part of the $37 million of CIP Expansion improvements. 110 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Community Facilities District and Assessment Funding: In all Ownership Scenarios, formation of one or more Community Facility District(s) or Assessment District(s) is possible. This FMSR does not speculate on how likely it for a Community Facility District or Assessment District to successfully form. Table 8-25 outlines a comparison CFD and AD activity among the agencies. It should be noted that each agency has its own policies and procedures in place that reflects that agency’s development demands, with some agencies more built out prior to this FMSR. RCWD did note that their low capacity fees and presence of existing RCWD water infrastructure near areas of development has allowed developers to proceed with projects without the need for CFDs or ADs, which is reflective of their total number of CFDs/ADs or requests to form them. Additionally, WMWD also noted they do not currently allow CFDs to be financed through the District, though they are a participant in CFDs/ADs. Table 8-25. Comparison of CFD and AD Activity(a) Total Total CFDs/Ads CFDs/Ads Total CFDs/Ads as Total Overall In Process of Formed in Total CFDs as Lead Agency or CFDs/Ads in Being Formed Past Five Participant in Participant in Past Agency Program or Amended(e Years Past Five Years Five Years EMWD 83(b) 5 17 42 59 RCWD 4(c) 0 0 0 0 WMWD 19(d) 0 0 6 6 (a) Information gathered via available public records and requested of agencies. (b) EMWD has issued or refinanced bonds for 38 of its total 83 ADs/CFDs in the past five years. (c) RCWD has refinanced bonds for 3 of its total 4 ADs/CFDs. (d) WMWD has not led the issuance or refinancing of bonds for any of its CFDs/ADs within the past five years. Lead agencies were the Murrieta Valley and Riverside Unified School Districts. (e) Application and deposit received. Formation in progress but not complete. 8.5.2.1.2 Connection Fee Comparison Future development will be required to pay a connection fee (or an equivalent charge with a different name) under all Ownership Scenarios. A comparison of CY 2020 connection fees for ¾-inch and 2-inch meters is shown below: • ¾-inch Water Meter — WMWD: $7,050 — RCWD: $2,537 — EMWD: $5,501 • 2-inch Water Meter — WMWD: $37,599 — RCWD: $13,445 111 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area — EMWD: Ranges between $44,008 - $73,328, depending on the type of 2-inch meter. The closest comparative fee appears to be the low end of the range at $44,008 For both meter sizes shown, RCWD has the lowest Connection Fees. Each agency calculates its connection fee differently, and RCWD’s lower fees acknowledge that Ad Valorem tax revenues are also used to pay for water system infrastructure. WMWD’s Connection Fee for a ¾-inch meter is the highest, and EMWD’s Connection Fee for a 2-inch meter is highest. EMWD’s fee for a 2-inch meter is shown as a range because EMWD has multiple 2-inch meter Connection Fees for different types of 2-inch meters. Separately, in the example Total Cost to Ratepayers calculation, a customer with a 2-inch water meter and water consumption of 125 ccf/month is used for comparison. EMWD noted that this customer with water consumption of 125 ccf/month would likely require a 1.5-inch water meter. EMWD’s Connection Fee for a 1.5-inch meter is $27,505. 8.6 Summary of Financial Analysis Table 8-26 summarizes the key parameters associated with this FMSR. 112 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area Table 8-26. Key Parameters and Comparison of Ownership Scenarios Parameter(a) WMWD RCWD EMWD Key Policies Financially Distinct or Financially Integrated Distinct Distinct(b) Integrated Ad Valorem Tax No Possibly(c) No Possible Funding Sources for $37M of Pipe Extensions Developers Yes Yes Yes Assessment Districts(d) Yes Yes Yes Community Facility Districts(d) Yes, but can't be Yes Yes financed through WMWD Low Income Discount Yes No No Projected Total Cost to Ratepayers Example Single-Family Residence Middle Highest Lowest Example Commercial Customer Middle, but higher If water rate Middle, but less than EMWD surcharge then than WMWD Scenario. highest. If ad Scenario. valorem tax then lowest. Residents with Private Wells Mandatory Connection of Private Wells No No No Standby Charge, $/Acre/year $21 $69.92 $14 Voluntary Connection to Public Water System for Option to Convert Must Convert Option to Convert Customers Currently Using Private Wells Indoor Use Only. Indoor and Indoor Use Only. May reduce meter Irrigation Use. May reduce meter size and size and connection fee. connection fee. Connection Fee Comparison(e) Single Family Residential(f) $7,050 $2,537 $5,501 2" Meter(g) $37,599 $13,445 $44,008 - $73,328 (a) Please refer to Section 8 for more detail on these parameters. (b) RCWD indicated that this policy would be reevaluated after RCWD has experience operating the system. (c) The decision of whether to adopt an ad valorem tax under the RCWD Ownership Scenario will be made by the RCWD Board of Directors. If RCWD decides not to adopt an ad valorem tax, then RCWD would adopt a water rate surcharge that collects the same amount of money. (d) Section 8.5.2 contains additional detail, including a comparison of how frequently each agency has used these funding mechanisms in the recent past. (e) RCWD connection fees are lower because of revenue from Ad Valorem property taxes that reduce reliance on connection fees. (f) The Connection Fee for a ¾-inch meter is shown to provide a standard for comparison. It is acknowledged that future single-family residences may require a 1-inch meter depending on fire sprinkler requirements inside the home. (g) A 2-inch meter is shown for comparative purposes. Separately, in the example Total Cost to Ratepayers calculation, a customer with a 2-inch water meter and water consumption of 125 ccf/month is used for comparison. EMWD noted that this customer with water consumption of 125 ccf/month would likely require a 1.5-inch water meter. EMWD’s Connection Fee for a 1.5-inch meter is $27,505 113 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 9.0 RAINBOW AND ROCK MOUNTAIN SERVICE AREA At the outset of the FMSR for the Murrieta Study Area, several questions have come up regarding the analysis of the Rainbow and Rock and Mountain Study Areas. The questions center on how the analysis differs for the Rainbow and Rock Mountain Study Areas versus the Murrieta Study Area. It is correct that the Rainbow and Rock Mountain Study Areas were originally contemplated for analysis in the Request for Proposal. However, several key distinctions were identified that eliminated the need for such a detailed analysis of the Rainbow and Rock and Mountain Study Areas. The most significant distinction is the physical infrastructure. Currently, the Rainbow and Rock Mountain Study Areas are WMWD customers. However, WMWD does not have physical facilities in the Rock Mountain Service Area. WMWD does have a storage reservoir, distribution pipelines and Metropolitan Water District (MWD) turnout in the Rainbow Service Area. The water operations for both service areas are provided under contract through RCWD. Because of this existing arrangement, a detailed analysis of the Rainbow and Rock Mountain areas would be largely duplicative. It was determined that a duplicate effort was not warranted under this Municipal Service Review. As a result, that detailed analysis was ultimately eliminated from the scope of work. However, West Yost was asked to include the key considerations, distinctions and rationale for this decision. These are outlined below: • The Rainbow and Rock Mountain areas are physically served by WMWD through a contract with RCWD. • WMWD does not have any physical facilities in the Rock Mountain Service Area. • WMWD owns a storage reservoir, distribution pipelines and Metropolitan Water District (MWD) turnout in the Rainbow Service Area. • Because of the existing infrastructure, RCWD could serve these areas directly, without the need for any significant infrastructure modifications or cost. • The WMWD infrastructure in the Rainbow Service Area would require ownership transfer to RCWD. • Continued WMWD ownership would require continuation of the contracted operation currently in place with RCWD. • EMWD does not have any physical facilities in this area. • EMWD ownership would also likely require contracted operation with RCWD. • Rainbow study area’s rate structure is a fixed monthly charge, plus commodity and elevation charges which depend on water use. The water rate structure is called a “uniform block” structure, meaning that all metered water consumption is sold at the same price. Rainbow does not have a budget-based water rate structure. If the ownership of the system is transferred from WMWD to EMWD or RCWD, either EMWD or RCWD will have to decide whether to retain the current rate structure, or change the rate structure to be consistent with what is charged to the agency’s other customers. Given the size and remote nature of the Rainbow and Rock Mountain Study Areas, the cost to build or extend infrastructure distinctly separate from RCWD’s system, would impact those rates, and would likely make any other transfer scenario cost prohibitive. 114 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 10.0 DETERMINATIONS The comparison of three potential water purveyors, each with distinct policy drivers, revenue approaches, and physical infrastructure in proximity to the study area, leads to a complex analysis. In conducting our analysis in this FMSR, West Yost carefully evaluated: • The community input received by residents in the Murrieta Study Area, received at two community outreach meetings. The input we received was considered and included in our requests to each agency for specific policy directions. This included important community issues such as the potential use of Ad Valorem taxes, private well owners, rate implication and future development (growth paying for growth). • Existing Facilities and Supply Sources, including MWD Annexation Fee considerations. • Agency infrastructure policies, including anticipated water supply policies, current and future water demands, system peaking factors, build-out services policies, infrastructure performance criteria and corresponding infrastructure improvements required • Numerous hydraulic model simulations were performed to simulate service from WMWD, RCWD and EMWD to meet current and future needs. This includes recommended improvements to the existing system and to serve potential future expansions. Detailed costs for improvements under all Ownership Scenarios were prepared and reviewed by the agencies. After compiling the information and performing our analysis, we can offer the following overall conclusions regarding Infrastructure, Future Development and the Total Cost to Ratepayers. 10.1 Infrastructure The cost of infrastructure to serve the Study Area’s supply needs is one of the important factors in determining the most cost-effective approach to serve the area. The proximity of the Study Area to existing infrastructure has a significant impact on the cost of future or expanded infrastructure. The closer the Study Area is to existing infrastructure, the less infrastructure would be anticipated. We also analyzed potential impacts to connections with their own private wells: • Due to its closer proximity to the Study Area and the presence of current infrastructure, RCWD has the lowest infrastructure costs associated with extending their facilities to provide service to future development. • Under all Ownership Scenarios, nearly $5 million is anticipated to replace legacy small diameter water lines in the Study Area. For purposes of this FMSR, these improvements are projected to be done over the next 10 years. • Both EMWD and WMWD offer an option for residents who currently use private wells. If a resident chooses to connect to the public water system, EMWD and WMWD offer the option of converting indoor use only, and would allow connections to leave their irrigation demands connected to their private well. • EMWD offers existing private well users the lowest standby charges. 115 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area 10.2 Future Development Several important factors are important to accommodate potential development in the Study Area. These include connection fees for agencies, future extension of facilities, policies regarding growth paying for growth, and the funding mechanisms for infrastructure required to serve future development • RCWD has the lowest connection fees of the three agencies • The pipe extensions required to extend water service to facilitate development would not be funded directly by the utility. All agencies would allow developers to build and fund them. • All agencies would allow formation of one or more Assessment Districts where the assessment is based on the value of the property. • All agencies would allow formation of one or more CFDs, though WMWD does not allow CFDs to be financed through WMWD. • This FMSR did not specifically asses the ability to immediately serve projected development in the Jefferson Avenue Corridor. That being said, it is likely the RCWD Ownership Scenario would allow some development in the Jefferson Avenue Corridor with less up front cost to developers than the other agencies. This is due to the closer proximity of existing RCWD infrastructure. However, depending on the location of the development, and the timing of future development, some of this developer-funded investment might be redundant or stranded in the long-term. 10.3 Total Cost to Ratepayers: • Figure 8-16 shows that the EMWD Ownership Scenario, has the lowest total cost of water for the example single-family residence. After EMWD’s Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water for the single-family residential example would decrease further. This anticipated reduction would occur after this FMWR’s study threshold of ten years and is therefore not reflective in the report Figures. • The total cost to connections under the RCWD scenario will depend on the specifics of each connection and whether RCWD chooses to (and is able to) adopt an Ad Valorem tax or pursue a water rate surcharge. Both RCWD alternatives were evaluated and are reflected in the single-family connection comparison and the commercial connection comparison. • Figure 8-17 shows that until the Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water for this commercial example will be lowest under the EMWD Ownership Scenario. There is a wide range of projected total cost under the RCWD Ownership Scenario, depending on whether an Ad Valorem Tax or Water Rate Surcharge is applied. After the EMWD’s Acquisition Balance is paid off (expected to be after FY 29/30), the total cost of water under the EMWD Ownership Scenario is expected to increase, because EMWD’s commercial water rates are generally higher than WMWD’s commercial water rates. 116 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Focused Municipal Services Review for the Murrieta Service Area • It should be noted that EMWD believes its rate structure and policies may result in further commercial conservation. EMWD provided records for commercial connections nearest the Murrieta Study Area which indicated an average of 59 CCF/month for similar 2-inch water meters. Based on the EMWD data, the overall cost of the representative commercial connection would decrease due to the lower volume. The trend would be the same as described above. Initially, EMWD is likely to offer the lowest cost to commercial connections. After the Acquisition Balance is paid off (expected to be after FY 29/30, commercial connections may pay more under the EMWD Ownership Scenario than had WMWD retained water system ownership. As stated at the outset of this report, there are several complex considerations that often overlap, but also compete for consideration in determining which agency should serve the Murrieta Retail Area. These include competing interest for existing and future customers. This includes both residential and retail/commercial customers. Some factors attributing to the complexity include the costs and efficiencies of system improvements serving existing customers or combined with expansion for future customers, proximity of existing infrastructure compared to rates and an agency’s overall cost of service, availability of existing storage versus the feasibility of expanding storage facilities, etc. Nowhere do these issues appear to converge more than in the Murrieta Retail Service Area. This focused MSR specifically considered these competing issues in determining the hydraulic, infrastructure and financial implications for existing and future customers. The City of Murrieta also has a desire to facilitate the needs of future customers that will come from growth, through the potential build out of the region. Because of these complexities and competing interests, this report established a methodology to allow each agency reasonable flexibility in their approaches and policies, while requesting those at the outset of this project. Each agency had respective input and control of their own financial models. However, only after each agency reviewed their model, were the cumulative results shared with all agencies. The objective was to minimize modifications to agreed assumptions or chosen policies, which would result in an iterative financial modeling process. This is not to say that any agencies policies are better. It is simply a reflection of applicability to the unique circumstances within the Murrieta Retail Area. Based on the agreed key assumptions and the agencies respective policy approaches, the desired agency will likely depend on the customer perspectives. While some existing customers have expressed a desire to remain with WMWD, regardless of cost, the following general conclusions may be drawn. The representative existing and future residential customer would experience lower water bills under the EMWD ownership scenario. The representative existing and future commercial customer would experience lower water bills through at least FY 29/30 under the EMWD ownership scenario and potentially higher bills after but would depend on EMWD’s conservation rate structure at that time. Existing landowners who wish to develop their properties may prefer the lower connection fees and closer proximity to existing RCWD infrastructure. During the financial modeling process, all agencies have agreed with the process. However, when the consolidated financial model was shared among the three agencies, there was some indication that the agencies may wish to incorporate additional considerations. For purposes of this FMSR, those substantive modifications to the agreed key assumptions and policy decisions were not included, but may be submitted during the public comment period for this report and submitted to LAFCO for consideration. 117 Riverside County LAFCO December 2020 n\c\868\40-19-01\wp\municipalservicereview Appendix A Public Comment Summary LAFCO PUBLIC MEETING APRIL 25, 2019 (1) Appendix A: Public Comment Summary Public Comment/ Topic # Provided Comment and/or Statement (2) Response 1 A West Murrieta resident and member of Ad Hoc committee that was recently disbanded by the city. Attended meeting in Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider July 2017, regarding annexing Murrieta into Rancho California's service area to share fixed costs, $135M in debt, that will Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on retire in 2047. equally evaluated criteria. 2 Comment expressed concerns over the development in the Jefferson Corridor. The FMSR has many areas of consideration for the three participating water agencies. The City of Murrieta is also a participant in the study, with the desire to evaluate the water infrastructure required to serve the study area through buildout. The detailed results can be found in Section 5 of the FMSR. The FMSR does not provide assessment of the development policies within the General Plan, only the required water infrastructure to serve development. 3 Concern was expressed that fire flow is an issue. Fire flow analyses were conducted under the existing and ultimate buildout conditions for all three water agencies. See Sections 3 and 5 in the FMSR. 4 Resident expressed a general concern with the Murrieta study area changing service from WMWD to RCWD Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria. 5 The commenter wants assurances from LAFCO for 1.) A complete story from City and Districts 2.) If a change is anticipated, requests the boundary change be thoroughly evaluated, and 3.) A public forum to discuss the potential change. The FMSR does provide a through evaluation of the issues facing each agency and any potential de-annexation. LAFCO has stated it's intent to hold a public forum, in addition to any regular board meeting. 6 Comment was focused on the need for another study, the $260k cost. Commenter directed their comment to City The FMSR has many technical areas for consideration in the scope of work, to consider the three participating water representatives that development is the intent behind the study. agencies. The City of Murrieta is also a participant in the study, with the desire to evaluate the water infrastructure required to serve the study area through buildout. 7 What will the cost be to join RCWD and the Ad Valorem Tax implications. To respond the residents concerns, RCWD had two scenarios analyzed. One funding mechanism would utilize a water rate surcharge, the other is an Ad Valorem Tax. The results of the RCWD analysis it address in detail in Section 8.3 of the FMSR. 8 Resident as lived in Murrieta his entire life and can remember fire hydrants wrapped in black plastic when agencies do not work cooperatively. Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria, to help resolve the type of concern the resident raised. See Section 5 in the FMSR. 9 Resident was thankful for the community attendance and voicing their concerns and expressed concerns that private well owners will be forced to connect to the agency systems and abandon their wells or have their wells metered. The resident indicated this was the case in in French Valley and Temecula. Lots of money. The resident wanted written assurances in Each agency was specifically asked to address this concern with their respective policies. Sections 7.2.9, 7.2.10, Table the report. 7-3 and Table 8-25 outlines each agencies' policy. 10 Room is too small. Comment was noted and larger accommodations will be sought in the future. 11 Is Wildomar being considered as part of the study area. The Wildomar area is not a part of this FMSR. 12 No information sent to residents about this meeting, I heard about it on social media. Meeting should have been Comment has been noted by the participating agencies. WMWD indicated notifications were sent and will look into advertised. why some residents may not have received a notice. 13 Community member residence is on a well and has concerns if access to City water would jeopardize use of their well. Also Each agency was specifically asked to address this concern with their respective policies. Sections 7.2.9, 7.2.10, Table felt too many permits are issued for multi-family developments. 7-3 and Table 8-26 outlines each agencies' policy. The specific land use types utilized in this study rely on the City's General Plan. Modifications to the General Plan are not part of the FMSR project. 14 Community member expressed concerns the is not enough water to serve current homes. The agencies have all expressed an ability to provide sufficient water, consistent with reliability requirements. 15 Community member expressed their belief a pre-decision has been made and nothing can be done to change it. No pre-decision was ever made, regarding which agencies will serve the Murrieta Study Area. The results of the study differ from some of the beliefs expressed in the community meetings. 16 Community member expressed their concern if there is sufficient groundwater for existing, let alone future demands. Comment is noted by the agencies. The scope of the FMSR looked at the financial implication across the agencies. The amount of water currently used by existing customers is not expected to change, independent of the agency serving the Murrieta Study Area. Future growth would require further evaluation of future demands and sources, before development could occur. 17 Community member reinforced a prior comment, stating that issuance of building permits for high density development The specific land use types utilized in this study rely on the City's General Plan. Modifications to the General Plan and and apartment complexes is too significant. approvals by the City are not part of the FMSR project. 12/10/2020 1 OF 5 LAFCO Meetings Comment Matrix - ALL.xlsx Public Mtg Comments - FINAL RPT LAFCO PUBLIC MEETING APRIL 25, 2019 (1) Appendix A: Public Comment Summary Public Comment/ Topic # Provided Comment and/or Statement (2) Response 18 Several resident of raised concerns over paying connection fees and feel they do not receive any benefit. The basis and benefits why WMWD assesses its Standby Charges (or Assessment Charge) are outline on the District's website and Resolution 3126. 19 Long time resident of Murrieta indicated he was not notified about the community meeting. Comment has been noted by the participating agencies. WMWD indicated notifications were sent and will look into why some residents may not have received a notice. 20 Long time resident expressed his distrust of RCWD and the LAFCO process, particularly since some members in the community live on a fixed income. Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria, to help resolve the type of concern the resident raised. See Section 5 in the FMSR. 21 Long time resident has lived in Murrieta since 1984. This would be the 3rd water district change he has seen. Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria, to help resolve the type of concern the resident raised. 22 Long time resident expressed concerns on the existing condition and long term sustainability of the existing water system. The residents concern is noted. The FMSR does evaluate improvements to the existing water system. Please see Section 5.0 of the FMSR. 23 Long time resident indicated that WMWD recently installed new water meter, and felt a leak and sinkhole was caused by the meter or nearby aging infrastructure. Comment has been noted. We can not provide any context if the construction work caused a leak. However, the FMSR dose evaluate the magnitude of aging infrastructure that should be considered for replacement. 24 Resident who lives in Old Town Murrieta, on a well expressed his concern a meter will be put on his well. Each agency was specifically asked to address this concern with their respective policies. Sections 7.2.9, 7.2.10, Table 7-3 and Table 8-25 outlines each agencies' policy. 25 Resident who lives in Old Town Murrieta expressed concerns about the amount of development. The FMSR has many areas of consideration for the three participating water agencies. The City of Murrieta is also a participant in the study, with the desire to evaluate the water infrastructure required to serve the study area through buildout. The detailed results can be found in Section 5 of the FMSR. The FMSR does not provide assessment of the development policies within the General Plan, only the required water infrastructure to serve development. 26 Resident who lives in Old Town Murrieta expressed concerns that aquifer drawdown could result in his need to drill a Comment is noted by the agencies. The scope of the FMSR looked at the financial implication across the agencies. deeper well, at a cost of $50K to $60k. The amount of water currently used by existing customers is not expected to change, independent of the agency serving the Murrieta Study Area. Future growth would require further evaluation of future demands and sources, before development could occur. 27 Resident who lives in Old Town Murrieta expressed he had no desire to receive City. Comment has been noted. Each agency was specifically asked to address this concern with their respective policies. Sections 7.2.9, 7.2.10, Table 7-3 and Table 8-26 outlines each agencies' policy. 28 Community member indicated they are in a disagreement with RCWD regarding ownership of groundwater rights and is in Comment has been noted. Specific disputes between a participating agency and customer are not within the scope discussion with the Watermaster. County Kennels "the Window". of the FMSR. 29 A resident of Murrieta since 1957 expressed concerns of over pumped aquifer and potential lost capacity. Comment is noted by the agencies. The scope of the FMSR looked at the financial implication across the agencies. The amount of water currently used by existing customers is not expected to change, independent of the agency serving the Murrieta Study Area. Future growth would require further evaluation of future demands and sources, before development could occur. 30 A resident of Murrieta since 1957 expressed his resistance to be annexed into RCWD's service area. Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria. 31 Resident has lived in Murrieta since 1983. She has had disagreements with WMWD over meters, but would like the system Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider to remain with WMWD. She feels WMWD will address the aging infrastructure over time. Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria, including improvements to existing infrastructure. 32 Several long term Murrieta resident expressed objections to growth and change in the community. The FMSR has many areas of consideration for the three participating water agencies. The City of Murrieta is also a participant in the study, with the desire to evaluate the water infrastructure required to serve the study area through buildout. 33 Resident has lived in Murrieta since 1983 and objections to any agency impacting her ability to continue to use her well. Each agency was specifically asked to address this concern with their respective policies. Sections 7.2.9, 7.2.10, Table 7-3 and Table 8-25 outlines each agencies' policy. 12/10/2020 2 OF 5 LAFCO Meetings Comment Matrix - ALL.xlsx Public Mtg Comments - FINAL RPT LAFCO PUBLIC MEETING APRIL 25, 2019 (1) Appendix A: Public Comment Summary Public Comment/ Topic # Provided Comment and/or Statement (2) Response 34 A recent resident of Murrieta inquired which City representatives and elected officials were present for the meetings. He City representatives identified themselves in the meeting. The comments on clarity of the report have been noted. wants the FMSR to be clear in it's conveying of information. The FMSR provides detailed analysis of infrastructure needs, cost and the financial and rate implications to customers, for each of the participating agencies. 35 How is Murrieta paying for this? The $255k project cost are equally split between the City of Murrieta, EMWD, RCWD and WMWD. 36 Resident question how will conflicts with existing agency policies be handled, if identified. The process implemented for the FSMR was intended to address this concern. From the outset of the FMSR, each agency was asked to provide the necessary policy inputs, prior to the analysis being performed. This would reduce the opportunity for policy changes as the results were developed. The policy input provided to West Yost are included within the FMSR. 37 How will ongoing contact with public? Will there be another public meeting ? When WY provides findings to LAFCO, will Ongoing public interface will be handled by LAFCO and WMWD, for their customers and residents. Subsequent to the meeting be held in Murrieta at a good time when the public can attend, and in a place that will hold everyone? this comment, a third public kickoff meeting was requested by residents and held at the Murrieta Community Center. LAFCO has stated it's intent to hold a public forum, in addition to any regular board meeting. The location is not yet determined due to COVID-19 requirements, but is anticipated to occur in the Murrieta area, at a convenient time for the residents. 38 Resident expressed appreciation that multiple community kickoff meetings were held. Thank you for doing the meeting twice. Resident also stated they participated in a meeting 22 months ago where developers expressed concerns over the Comment is appreciated and noted. The required infrastructure and costs are outlined in Section 6 of this FMSR. It cost it would take to get water to their development sites. should be noted the consistent policy from the agencies has been growth will pay for growth. 39 Resident expressed a WMWD turning district over to RCWD. Developers and city hall are together. Comment has been noted. This Murrieta Focused Municipal Service Review (FMSR) will independently consider Eastern Municipal Water District, Rancho California Water District and Western Municipal Water District based on equally evaluated criteria. There are no pre-determined conclusions in the FMSR. 40 Resident expressed concerns over an RCWD annexation to share in existing fixed costs and debt. The RCWD analysis in the FMSR treated the study area as financially distinct. 41 Resident asked West Yost to look into the Ad Valorem Tax carefully and expressed concerns that if study area is given to To respond the residents concerns, RCWD had two scenarios analyzed. One funding mechanism would utilize a RCWD and they became part of Santa Rosa, they would have to pay the Ad Valorem Tax. water rate surcharge, the other is an Ad Valorem Tax. The results of the RCWD analysis it address in detail in Section 8.3 of the FMSR. 42 Resident stated that EMWD also has the authority to charge an Ad Valorem Tax EMWD did not request an Ad Valorem Tax financial analysis to be considered in the FMSR. 43 A resident requested clarification of the structure and authority of the LAFCO Commission. LAFCO provided an explanation at the meeting. 44 Resident indicated they moved to the are because it was less expensive. Resident indicated that water is becoming more Comment has been noted. Sections 7 and 8 of the FMSR will assist the resident in assessing the cost implication of scarce. They have a pool, and are concerned about their financial ability to keep it filled. service from any of the three water districts. 45 Resident asked if there will be time to review the final FMSR, prior to any LAFCO Commission meeting? LAFCO has stated it's intent to hold a public forum, in addition to any regular board meeting. The location is not yet determined due to COVID-19 requirements, but is anticipated to occur in the Murrieta area, at a convenient time for the residents. LAFCO plans to release the report prior to any public meeting and the subsequent commission meeting. 46 Residents asked what initiated looking at this study? The FMSR was initiated by a request from the City of Murrieta to LAFCO to evaluate the long term infrastructure, cost and financial implications for water service in the Murrieta Retail Area. 47 Resident stated they have lived in the Murrieta area most of their life, but lives outside of boundary of the study area and To respond the residents concerns, RCWD had two scenarios analyzed. One funding mechanism would utilize a is on a well, Santa Rosa area. Concerns were raised over the Ad Valorem Tax and RCWD's history with the Murrieta water rate surcharge, the other is an Ad Valorem Tax. The results of the RCWD analysis it address in detail in Section community. 8.3 of the FMSR. 48 Comment was provided that developers have to install interior sprinklers. Generally, this is true. However, the FMSR does not analyze the interior plumbing requirements for any given home or unit. 49 Resident questioned why they were not notified of the meeting and requested advanced notification for future meetings. Comment has been noted by the participating agencies. WMWD indicated notifications were sent and will look into why some residents may not have received a notice. 50 Resident expressed concerns the AV tax would not be taken into account the. To respond the residents concerns, RCWD had two scenarios analyzed. One funding mechanism would utilize a water rate surcharge, the other is an Ad Valorem Tax. The results of the RCWD analysis it address in detail in Section 8.3 of the FMSR. 51 Resident expressed concerns over an Ad Valorem Tax and wanted assurances it would be analyzed in the FMSR. To respond the residents concerns, RCWD had two scenarios analyzed. One funding mechanism would utilize a water rate surcharge, the other is an Ad Valorem Tax. The results of the RCWD analysis it address in detail in Section 8.3 of the FMSR. 52 why was study commissioned? Was it at developers request? What was the process? How to object? 12/10/2020 3 OF 5 LAFCO Meetings Comment Matrix - ALL.xlsx Public Mtg Comments - FINAL RPT LAFCO PUBLIC MEETING APRIL 25, 2019 (1) Appendix A: Public Comment Summary Public Comment/ Topic # Provided Comment and/or Statement (2) Response 53 Why did the water districts and the City agree to pay for the study? All four agencies mutually agreed an analysis through LAFCO was the best course of action to preserve the necessary independence of a study, for the agencies and the public. 54 Member of the community commented the State can re-adjust agency territories. Agency boundary adjustments are under the authority of the Riverside LAFCO, who initiated the Murrieta FMSR. 55 Resident commented that well owners may not have received a notice of the meeting because they are not a customer. Comment has been noted by the participating agencies. WMWD indicated notifications were sent and will look into why some residents may not have received a notice. 56 Residents asked West Yost to look at differences between the water districts regarding metering of private wells. Each agency provided their respective policies regarding any proposed connection and metering of private wells. Please see Section 8 and Table 8-26 for those policy positions. 57 Resident asked if the community would get to vote on any proposed RCWD Ad Valorem Tax. Responses were given at the public comments meeting that residents would have an opportunity to vote on an Ad Valorem Tax. However, West Yost are not attorneys who can advise the community on legal or voting matters. To respond the residents concerns, RCWD did request the Ad Valorem tax scenario to be included in the FMSR. 58 Self sustaining questions regarding the study area. Will it be financially distinct from growth projections. The sustainability of the study area's existing customers weas considered. The FMSR evaluated the necessary infrastructure from each agencies perspective. All growth related infrastructure components/increases will be paid for by those future customers. Growth pays for growth. 59 How will LAFCO maintain contact with public? Will public be able to observe meetings? I just want to observe, I wont talk. Ongoing public interface will be handled by LAFCO and WMWD, for their customers and residents. Subsequent to this comment, a third public kickoff meeting was requested by residents and held at the Murrieta Community Center. LAFCO has stated it's intent to hold a public forum, in addition to any regular board meeting. The location is not yet determined due to COVID-19 requirements, but is anticipated to occur in the Murrieta area, at a convenient time for the residents. Regular project meetings were not open to the public. 60 Murrieta resident of 40 years asked if fees are all going to be based on lot size? Resident commented that large parcels could pay 5 times than homeowners and 5 acres is more than a residential parcel. Resident feels this is unfair and could Comment is noted by the agencies. The scope of the FMSR looked at the financial implication across the agencies. force people to sell or subdivide. Fees should be based on house size and not parcel size. The fees based on assessed land values must be consistent with state and local laws for land versus improvement valuations. 61 A community member identified themselves as a real estate developer for 30 years. He expressed concerns about the availability, cost and quality of water. Comment is noted. The FMSR analyzes each of these issues throughout the report. 62 Several additional residents expressed significant concerns about any agency requiring the metering of their well. The well Each agency was specifically asked to address this concern with their respective policies. Sections 7.2.9, 7.2.10, Table owners requested for policy clarification within the FMSR. 7-3 and Table 8-25 outlines each agencies' policy. 63 Question was raised if West Yost project dollars for WMWD infrastructure, and if stays with WMWD, who will pay for the infrastructure upgrade? Yes, the infrastructure and costs for WMWD was analyzed, and also for RCWD and EMWD. Please see Section 5.0 (5.1 for WMWD) for the identified infrastructure and Section 6.0 (6.2.1 for WMWD) of the FMSR. 64 Resident requested a detail analysis of the financial implications. Detailed financial analysis were completed for the FMSR. Please see Sections 7 and 8 of the FMSR. 65 Resident raised concerns that apartments should have to pay the same fees. For the FMSR, water rates and fees are applied based on the policies of the respective agency. Modifications to rates and fees are not contemplated within the purview of the FMSR. 66 Resident expressed concerns they will be paying for developers to come in and expressed that anyone interested in buying property should do their homework. As stated above, the sustainability of the study area's existing customers weas considered. The FMSR evaluated the necessary infrastructure from each agencies perspective. All growth related infrastructure components/increases will be paid for by those future customers. Growth pays for growth. 67 Resident indicated they were told the FMSR would include all costs, also taking into consideration infrastructure costs. That is correct. The infrastructure and costs for EMWD, RCWD and WMWD were analyzed. Please see Section 5.0 for the identified infrastructure and Section 6.0 for respective cost within the FMSR. 12/10/2020 4 OF 5 LAFCO Meetings Comment Matrix - ALL.xlsx Public Mtg Comments - FINAL RPT LAFCO PUBLIC MEETING APRIL 25, 2019 (1) Appendix A: Public Comment Summary Public Comment/ Topic # Provided Comment and/or Statement (2) Response 68 Resident asked how far into future are bills projected? Resident stated they read online they project out to 2050. While agencies look at long range forecasting, the threshold for this FMSR is ten years. This covers (2) five year Proposition 218 cycles. 69 Resident asked if it is part of the FMSR scope of work to look at adding catch basins? Resident's pond is filled much of the The FMSR focuses only on domestic water service only. Stormwater flows, storm drains, creeks and catch basins are year. Concerns were also expressed over any lining of natural creeks. not part of the FMSR. 70 Assessment district is okay. 71 Resident expressed concerns over their property taxes increasing under an Ad Valorem Tax. To respond the residents concerns, RCWD had two scenarios analyzed. One funding mechanism would utilize a water rate surcharge, the other is an Ad Valorem Tax. The results of the RCWD analysis it address in detail in Section 8.3 of the FMSR. Notes: (1) Several members of the public expressed similar comments throughout the public meetings. Where comments and topics overlapped, responses were consolidated within this summary of responses. (2) The "Provided Comment and/or Statements" column is not intended to provide a verbatim representation or meeting minutes of any particular comment. It is intended to capture the essence of a comment or statement, in order to provide clarity or location where it is covered in the FMSR. 12/10/2020 5 OF 5 LAFCO Meetings Comment Matrix - ALL.xlsx Public Mtg Comments - FINAL RPT Appendix B Detailed Financial Models RIVERSIDE LAFCO Murrieta Focused Municipal Service Review: Financial Analysis OCTOBER 2020 Appendix B - Financial Analysis Calculations Table B-1 General Assumptions and Parameters Table B-2 Customer and Water Use Data Table B-3 WMWD Scenario Calculations Table B-4 RCWD Scenario Calculations Table B-3a Projected Operating Statement: Sources of Funds Table B-4a Projected Operating Statement: Sources of Funds Table B-3b Projected Operating Statement: Uses of Funds Table B-4b Projected Operating Statement: Uses of Funds and Financial Performance Criteria and Financial Performance Criteria Table B-3c Revenue Calculations Table B-4c Revenue Calculations Table B-3d FMSR Capital Improvements and Cost Allocation Table B-4d FMSR Capital Improvements and Cost Allocation to Existing Customers or Development to Existing Customers or Development Table B-3e Projected Pay-As-You-Go Capital Expenses Table B-4e Projected Pay-As-You-Go Capital Expenses and Projected Debt Service Expenses Projected Debt Service Expenses Table B-4f Potential Capital Funding for Facilities That Benefit Future Development Table B-3f Development Capital Funding Table B-4g Projected Monthly Total Water Cost Calculation Table B-3g Projected Monthly Water Bill Calculation Table B-5 EMWD Scenario Calculations Table B-5a Projected Operating Statement: Sources of Funds Table B-5e Preliminary Acquisition Balance Calculation Table B-5b Projected Operating Statement: Uses of Funds and Table B-5f FMSR Capital Improvements and Cost Allocation Projected Payoff of Acquisition Balance to Existing Customers or Development Table B-5c Revenue Calculations Table B-5g Projected Pay-As-You-Go Capital Expenses Table B-5d Preliminary Cost Per Equivalent Meter Projected Debt Service Expenses to Provide Water Service Table B-5h Projected Monthly Water Bill Calculation LAFCO Murrieta FMSR Financial Model Page 1 of 51 Main Page Copyright 2020 All Rights Reserved 10/15/2020 Assumptions Table B-1 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis General Assumptions and Parameters Line General Assumptions and Parameters 1 2 Gross Plant Value of WMWD Assets, $M $14.60 Source: WMWD CY 2020 Model, "Assets" tab 3 4 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 5 General Inflation 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 7 CIP Escalation 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 8 Change in per capita water consumption 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 9 10 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 11 MWD Unit Costs (1) 12 Full Service Treated Volumetric Cost ($/AF) 13 Tier 1 $1,078 $1,131 $1,183 $1,237 $1,270 $1,306 $1,336 $1,370 $1,403 $1,442 $1,486 14 Tier 2 $1,165 $1,178 $1,196 $1,218 $1,236 $1,269 $1,278 $1,299 $1,321 $1,354 $1,388 15 Full Service Untreated Volumetric Cost ($/AF) 16 Tier 1 $755 $781 $807 $836 $860 $889 $916 $945 $974 $998 $1,023 17 Tier 2 $842 $855 $873 $895 $913 $936 $955 $976 $998 $1,023 $1,049 18 19 Projected EMWD Los Alamos Rate, $/AF (2) $1,350.48 $1,408.72 $1,469.26 $1,532.11 $1,573.13 $1,617.53 $1,655.87 $1,698.66 $1,740.64 $1,789.20 $1,843.29 20 21 22 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 23 Projected Source Production and Treatment Unit Costs (3) 24 Source of Supply / AF $223.73 $229.32 $235.05 $240.93 $246.95 $253.13 $259.45 $265.94 $272.59 $279.40 $286.39 25 Treatment / AF $89.55 $91.79 $94.09 $96.44 $98.85 $101.32 $103.86 $106.45 $109.11 $111.84 $114.64 26 Total $313.28 $321.11 $329.14 $337.37 $345.80 $354.45 $363.31 $372.39 $381.70 $391.25 $401.03 27 28 Water Supply in Acre-feet, per FY (4) (5) FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 29 Local 363 1,452 1,452 1,452 1,452 1,452 1,452 1,452 1,452 1,452 1,452 30 Additional Local Production from New Well No. 3 0 0 0 0 0 0 31 Imported 2,025 936 974 1,014 1,054 1,094 1,136 1,178 1,221 1,264 1,308 32 Total 2,388 2,388 2,426 2,466 2,506 2,546 2,588 2,630 2,673 2,716 2,760 33 34 % Change in Imported Water Volumes 4.1% 4.0% 3.9% 3.9% 3.8% 3.7% 3.6% 3.6% 3.5% LAFCO Murrieta FMSR Financial Model Page 2 of 51 B1Assump Copyright 2020 All Rights Reserved Printed: 10/15/2020 Assumptions Table B-1 Notes: (1) Tier 1 Treated rate from WMWD 2/19/2020 per proposed MWD Updated 10-Year Financial Forecast. Others: From MWD 10-Year Financial Forecast, 2018 (Page 5) (2) Source: WMWD 2/19/2020 (3) Source: WMWD, 2/19/2020, based on FY 18/19 actual expenses adjusted by rate of General Inflation for future years (4) FY 19/20 and FY 20/21 equals WMWD's water consumption data plus 3.5% non-revenue water (5) Groundwater production assumed to remain at 1,452 acre-feet per year, therefore all increase in water supply is from an increase in imported water. FY 19/20 value is lower. because North Well is out of service. Source: WMWD, 2/19/2020. LAFCO Murrieta FMSR Financial Model Page 3 of 51 B1Assump Copyright 2020 All Rights Reserved Printed: 10/15/2020 Customer and Water Use Data Table B-2 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Customer and Water Use Data This Table Contains: Line Number Subject 1 FY 19/20 Number of Murrieta Study Area Accounts 18 FY 19/20 Number of Murrieta Study Area Meter Equivalents 37 Projected Number of Single-Family Residential Connections 50 Projected Number of Multi-Family Residential Connections 63 Projected Number of Commercial Connections 76 Projected Number of Irrigation Connections 89 Projected Number of Fire Protection Connections 115 Monthly Water Use in Murrieta Study Area, All Customer Classes 130 Murrieta Study Area Single Family Residential Usage (ccf, 2013-2014 Average) 142 Annual Usage by Tier for Each Customer Class, ccf 175 Projected Water Demands from 2017 Kennedy Jenks Draft Western Murrieta Retail Demand Projection 203 Projected Annual Growth Rate from 2017 Kennedy Jenks Draft Western Murrieta Retail Demand Projection 232 Projected Buildout Meter Equivalents 1 FY 19/20 Number of Murrieta Study Area Accounts 2 3 Fire 4 Meter Size SFR MFR COM IRR Schools Protection Total (1) 5 5/8" 347 2 25 3 0 105 482 6 3/4" 1,939 6 10 3 0 10 1,968 7 1" 76 51 45 0 172 8 1.5" 1 31 45 0 77 9 2" 1 41 75 44 0 161 10 3" 4 1 0 5 11 4" 2 2 4 12 Total 2,364 51 198 141 0 115 2,869 13 14 Notes: 15 (1) Source: WMWD, 2/19/2020. Based on customer meter export at January 15, 2020. Commercial accounts include schools 16 17 18 FY 19/20 Number of Murrieta Study Area Meter Equivalents 19 Using WMWD Meter Equivalent Ratios Using EMWD Meter Equivalent Ratios Using RCWD Meter Equivalent Ratios 20 No. of No. of Meter No. of Meter No. of Meter 21 Meter Size Accounts Ratio (1) Equivalents(2) Ratio (3) Equivalents(2) Ratio (4) Equivalents(2) 22 5/8" 482 1.00 482.00 1.00 482.00 0.67 322.94 23 3/4" 1,968 1.00 1,968.00 1.00 1,968.00 1.00 1,968.00 24 1" 172 1.67 287.24 1.50 258.00 1.70 292.40 25 1.5" 77 3.33 256.41 5.00 385.00 3.30 254.10 26 2" 161 5.33 858.13 8.00 1,288.00 5.30 853.30 27 3" 5 11.67 58.35 16.00 80.00 16.70 83.50 28 4" 4 21.00 84.00 25.00 100.00 33.30 133.20 29 Total 2,869 3,994.13 4,561.00 3,907.44 30 31 (1) Source: WMWD Connection Fee Study, Table B-2 32 (2) Meter Equivalent calculation is based on the number of connections from WMWD's CY 2020 Rate Model 33 (3) Source: EMWD Cost of Service Study, Table 1-1. 34 (4) Source: RCWD email 11/25/19 LAFCO Murrieta FMSR Financial Model Page 4 of 51 B2Units Copyright 2020 All Rights Reserved Printed: 10/15/2020 Customer and Water Use Data Table B-2 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Customer and Water Use Data 35 36 37 Projected Number of Single-Family Residential Connections (refer to line: 216 below for annual percent growth rates.) 38 39 Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 40 5/8" 347 353 359 365 371 377 383 389 395 401 408 41 3/4" 1,939 1,970 2,002 2,034 2,067 2,100 2,134 2,169 2,204 2,240 2,276 42 1" 76 77 78 79 80 81 82 83 84 85 86 43 1.5" 1 1 1 1 1 1 1 1 1 1 1 44 2" 1 1 1 1 1 1 1 1 1 1 1 45 3" 0 0 0 0 0 0 0 0 0 0 0 46 4" 47 Total 2,364 2,402 2,441 2,480 2,520 2,560 2,601 2,643 2,685 2,728 2,772 48 49 50 Projected Number of Multi-Family Residential Connections (refer to line: 216 below for annual percent growth rates.) 51 52 Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 53 5/8" 2 2 2 2 2 2 2 2 2 2 2 54 3/4" 6 6 6 6 6 6 6 6 6 6 6 55 1" 0 0 0 0 0 0 0 0 0 0 0 56 1.5" 0 0 0 0 0 0 0 0 0 0 0 57 2" 41 42 43 44 45 46 47 48 49 50 51 58 3" 0 0 0 0 0 0 0 0 0 0 0 59 4" 60 Total 49 50 51 52 53 54 55 56 57 58 59 61 62 63 Projected Number of Commercial Connections (refer to line: 216 below for annual percent growth rates.) 64 65 Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 66 5/8" 25 25 25 25 25 25 25 25 25 25 25 67 3/4" 10 10 10 10 10 10 10 10 10 10 10 68 1" 51 52 53 54 55 56 57 58 59 60 61 69 1.5" 31 32 33 34 35 36 37 38 39 40 41 70 2" 75 76 77 78 79 80 81 82 83 84 85 71 3" 4 4 4 4 4 4 4 4 4 4 4 72 4" 2 2 2 2 2 2 2 2 2 2 2 73 Total 198 201 204 207 210 213 216 219 222 225 228 74 75 76 Projected Number of Irrigation Connections (refer to line: 216 below for annual percent growth rates.) 77 78 Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 79 5/8" 3 3 3 3 3 3 3 3 3 3 3 80 3/4" 3 3 3 3 3 3 3 3 3 3 3 81 1" 45 46 47 48 49 50 51 52 53 54 55 82 1.5" 45 46 47 48 49 50 51 52 53 54 55 83 2" 44 45 46 47 48 49 50 51 52 53 54 84 3" 1 1 1 1 1 1 1 1 1 1 1 85 4" 0 0 0 0 0 0 0 0 0 0 0 86 Total 141 144 147 150 153 156 159 162 165 168 171 LAFCO Murrieta FMSR Financial Model Page 5 of 51 B2Units Copyright 2020 All Rights Reserved Printed: 10/15/2020 Customer and Water Use Data Table B-2 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Customer and Water Use Data 87 Projected Number of School Connections Note: WMWD includes usage for schools in its Commercial customer class 88 89 Projected Number of Fire Protection Connections (refer to line: 216 below for annual percent growth rates.) 90 91 Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 92 5/8" 105 107 109 111 113 115 117 119 121 123 125 93 3/4" 10 10 10 10 10 10 10 10 10 10 10 94 1" 0 0 0 0 0 0 0 0 0 0 0 95 1.5" 0 0 0 0 0 0 0 0 0 0 0 96 2" 0 0 0 0 0 0 0 0 0 0 0 97 3" 0 0 0 0 0 0 0 0 0 0 0 98 4" 0 0 0 0 0 0 0 0 0 0 0 99 Total 115 117 119 121 123 125 127 129 131 133 135 100 101 102 Total Projected Number of Connections 103 104 Meter Size FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 105 5/8" 482 490 498 506 514 522 530 538 546 554 563 106 3/4" 1,968 1,999 2,031 2,063 2,096 2,129 2,163 2,198 2,233 2,269 2,305 107 1" 172 175 178 181 184 187 190 193 196 199 202 108 1.5" 77 79 81 83 85 87 89 91 93 95 97 109 2" 161 164 167 170 173 176 179 182 185 188 191 110 3" 5 5 5 5 5 5 5 5 5 5 5 111 4" 2 2 2 2 2 2 2 2 2 2 2 112 Total 2,867 2,914 2,962 3,010 3,059 3,108 3,158 3,209 3,260 3,312 3,365 113 114 115 Monthly Water Use in Murrieta Study Area, All Customer Classes 116 117 Monthly Water Use, ccf Total Annual 118 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Usage 119 Tier 1 28,000 30,000 28,000 36,000 38,000 50,000 50,000 40,000 40,000 38,000 35,000 42,000 455,000 120 Tier 2 19,000 20,000 17,000 30,000 48,000 50,000 68,000 58,000 50,000 36,000 30,000 25,000 451,000 121 Tier 3 3,000 1,500 1,300 1,700 2,800 3,500 4,200 5,000 5,300 4,500 4,200 3,800 40,800 122 Tier 4 1,500 1,200 1,000 800 1,200 1,400 1,700 2,100 2,300 2,200 2,100 2,000 19,500 123 Tier 5 3,500 2,000 1,800 1,900 2,400 2,900 2,200 4,000 3,500 3,800 4,400 5,000 37,400 124 Total 55,000 54,700 49,100 70,400 92,400 107,800 126,100 109,100 101,100 84,500 75,700 77,800 1,003,700 125 126 Source: WMWD, 2/19/2020 127 Total in AFY 2,304 128 Compare to current total demand, per West Yost, AFY 2,090 129 130 Murrieta Study Area Single Family Residential Usage (ccf, 2013-2014 Average) 131 Source: WMWD CY 2020 Rate Model, get tab and cell range 132 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Annual 133 Tier 1. Efficient Indoor Use 22,680 22,592 22,465 22,146 21,883 21,548 18,572 17,380 20,464 21,603 22,233 22,528 256,092 134 Tier 2. Efficient Outdoor Use 36,572 36,748 34,623 28,042 22,795 17,251 6,399 9,368 12,966 19,636 31,661 38,928 294,987 135 Tier 3. Inefficient Use 786 808 1,492 1,355 1,028 894 307 296 368 202 698 953 9,187 136 Tier 4. Excessive Use 203 211 660 520 470 412 117 89 88 64 184 327 3,345 137 Tier 5. Unsustainable Use 69 81 561 417 303 354 501 100 30 75 124 202 2,817 138 Total 60,309 60,440 59,801 52,480 46,479 40,459 25,895 27,232 33,916 41,580 54,899 62,938 566,428 139 140 141 LAFCO Murrieta FMSR Financial Model Page 6 of 51 B2Units Copyright 2020 All Rights Reserved Printed: 10/15/2020 Customer and Water Use Data Table B-2 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Customer and Water Use Data 142 Annual Usage by Tier for Each Customer Class, ccf 143 Step 1. Use Previously Provided Data from WMWD's CY 2020 Rate Model, As Percent of Total. Assume Fire Protection Account Use is 0. 144 Single-Family Residential Multi-Family Residential Irrigation All Other (CII) Fire Prot. Total 145 Annual % of Tier Annual % of Tier Annual % of Tier Annual % of Tier Annual Annual % of Total 146 Usage Usage Usage Usage Usage Usage Usage Usage Usage Usage Usage 147 Tier 1 256,092 68.31% 73,043 19.48% 0 0.00% 45,738 12.20% 0 374,873 41% 148 Tier 2 295,675 64.94% 2,498 0.55% 119,854 26.33% 37,248 8.18% 0 455,274 50% 149 Tier 3 8,729 32.90% 1,251 4.72% 12,965 48.87% 3,586 13.51% 0 26,531 3% 150 Tier 4 3,203 22.92% 523 3.74% 8,549 61.17% 1,700 12.16% 0 13,975 2% 151 Tier 5 2,728 6.14% 253 0.57% 36,963 83.13% 4,520 10.17% 0 44,464 5% 152 Total 566,428 77,568 178,331 92,791 0 915,118 100% 153 % of Usage 62% 8% 19% 10% 0% 154 155 Step 1. Multiply Percentages from Previously Provided Data from CY 2020 Rate Model (which is a projection) by Total Demand by Tier Data Provided by WMWD 2/19/2020. 156 SFR MFR Irrigation All Other (CII) Fire Prot. Total 157 Annual Annual Annual Annual Annual Annual 158 Usage Usage Usage Usage Usage Usage 159 Tier 1 310,830 88,655 0 55,514 0 455,000 160 Tier 2 292,899 2,475 118,728 36,898 0 451,000 161 Tier 3 13,424 1,924 19,938 5,514 0 40,800 162 Tier 4 4,470 730 11,929 2,372 0 19,500 163 Tier 5 2,295 213 31,090 3,802 0 37,400 164 Total 623,918 93,996 181,686 104,100 0 1,003,700 165 166 Annual Source of Supply, Current (Data is Superseded by Data Found in Table B-1) 167 Current Average Source of Supply 168 Unit of GPM 1,295 gpm Source: West Yost, 12/20/19 169 Units of GPD 1,864,800 gpd 170 Units of Cubic Feet per Day 249,305 cf per day 171 Units of Cubic Feet per Year 91,058,583 cf per year 172 Units of Acre Feet Per Year 2,090 afy 173 174 LAFCO Murrieta FMSR Financial Model Page 7 of 51 B2Units Copyright 2020 All Rights Reserved Printed: 10/15/2020 Customer and Water Use Data Table B-2 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Customer and Water Use Data 175 Projected Water Demands from 2017 Kennedy Jenks Draft Western Murrieta Retail Demand Projection 176 Source: Kennedy/Jenks DRAFT Western Murrieta Retail Demand Projection July 2017, Table 3-2, page 25 of 31 (Scenario 2a, Recommended Scenario; units = AFY) 177 178 Year 179 Category 2010 2015 2020 2025 2030 2035 2040 180 Single Family Indoor (1) 313 395 440 477 517 560 577 181 Single Family Outdoor (2) 940 1,184 1,320 1,430 1,550 1,680 1,732 182 Single Family Total (3) 1,254 1,578 1,760 1,907 2,067 2,240 2,309 183 Commercial/Multi-Family Indoor (4) 253 319 355 385 417 452 466 184 Commercial/Multi-Family Outdoor (5) 309 389 434 470 510 553 570 185 Commercial/Multi-Family Total (6) 562 708 789 855 927 1,005 1,036 186 Landscape Potable (7) 640 806 899 974 1,056 1,144 1,179 187 Temporary 5 7 8 9 10 11 11 188 Total 2,461 3,099 3,456 3,745 4,060 4,400 4,535 189 Annual Percent Growth 1.62% 1.63% 190 Notes from Kennedy Jenks report: 191 Note: Assumes 2016 SCAG growth rate plus an additional 0.5% increment of annual growth. Differences in totals between Table 3-3 and Table 2-12 due to rounding. 192 (1) Assumes indoor water use 25% of total water use. 193 (2) Assumes outdoor water use 75% of total water use. 194 (3) Years 2010-2015 based on Western Meter Data, Cost Center 270, Single Family Category. 195 (4) Assumes indoor water use 45% of total water use. 196 (5) Assumes outdoor water use 55% of total water use. 197 (6) Years 2010-2015 based on Western Meter Data, Cost Center 270. Commercial/Multi-Family includes Commercial, Multi-Family, Religious Organizations, Restaurants, Schools, and Park Restrooms. 198 (7) Years 2010-2015 based on Western Meter Data, Cost Center 270. Landscape includes Landscape Potable, Hydrant, and Fire Protection. 199 200 Use of this data in the financial analysis: Not directly used in calculations, but used for comparison of growth rates. 201 202 203 Projected Annual Growth Rate from 2017 Kennedy Jenks Draft Western Murrieta Retail Demand Projection 204 Source: Kennedy/Jenks DRAFT Western Murrieta Retail Demand Projection July 2017, page 25 205 206 207 Category 2020-2025 2025-2030 208 Single Family Indoor (1) 1.63% 1.62% 209 Single Family Outdoor (2) 1.61% 1.62% 210 Single Family Total (3) 1.62% 1.62% 211 Commercial/Multi-Family Indoor (4) 1.64% 1.61% 212 Commercial/Multi-Family Outdoor (5) 1.61% 1.65% 213 Commercial/Multi-Family Total (6) 1.62% 1.63% 214 Landscape Potable (7) 1.62% 1.63% 215 Temporary 2.38% 2.13% 216 Total 1.62% 1.63% 217 218 219 Notes from Kennedy Jenks report: 220 Note: Assumes 2016 SCAG growth rate plus an additional 0.5% increment of annual growth. Differences in totals between Table 3-3 and Table 2-12 due to rounding. 221 (1) Assumes indoor water use 25% of total water use. 222 (2) Assumes outdoor water use 75% of total water use. 223 (3) Years 2010-2015 based on Western Meter Data, Cost Center 270, Single Family Category. 224 (4) Assumes indoor water use 45% of total water use. 225 (5) Assumes outdoor water use 55% of total water use. 226 (6) Years 2010-2015 based on Western Meter Data, Cost Center 270. Commercial/Multi-Family includes Commercial, Multi-Family, Religious Organizations, Restaurants, Schools, and Park Restrooms. 227 (7) Years 2010-2015 based on Western Meter Data, Cost Center 270. Landscape includes Landscape Potable, Hydrant, and Fire Protection. 228 229 Use of this data in the financial analysis: The total percent growth rates in the last line of this table are used as the projected water system growth rates. LAFCO Murrieta FMSR Financial Model Page 8 of 51 B2Units Copyright 2020 All Rights Reserved Printed: 10/15/2020 Customer and Water Use Data Table B-2 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Customer and Water Use Data 230 These annual growth rates are used to project water rate revenues, certain O&M expenses, the number of service connections, and connection fee revenues. 231 232 Projected Buildout Meter Equivalents 233 234 Methodology: Use West Yost Water Demand Projections 235 236 Current Average Day Demand, gpm 1,295 237 Projected Buildout Average Day Demand, gpm 2,339Note 1 238 % Increase in Average Day Demand at Buildout 80.62% 239 % Increase in Meter Equivalents at Buildout 80.62% 240 Increase in Meter Equivalents at Buildout 3,219.98 241 Number of Meter Equivalents at Buildout 7,214.11 242 243 Notes: 244 (1) Scenario: Build-Out Demand With Parcels Served by Existing Private Well Within 1,000' of 245 Existing Pipeline Converted to Municipal Service. Note that any such connections of customers on existing 246 private wells to municipal service is voluntary. Inclusion of these customers connecting is how the 247 facilities are being planned for, in the event they connect in the future. LAFCO Murrieta FMSR Financial Model Page 9 of 51 B2Units Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES Table B-3a WMWD SCENARIO Projected Operating Statement: Sources of Funds WMWD Projected Line Fund FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 1 Beginning Reserve Balance as of 7/1 2 Operating Fund 230 230 $3,109,336 $2,493,163 $2,796,455 $2,454,184 $2,443,753 $2,651,231 $2,986,003 $3,266,784 $3,597,474 $4,090,579 $4,517,531 1, 2 3 Connection Fee Fund 231 231 ($1,223,311) ($820,381) ($706,630) ($940,411) ($1,169,367) ($1,385,570) ($1,596,515) ($1,864,512) ($2,109,889) ($2,340,461) ($2,547,054) 1, 2 4 Distribution Fund 233 233 $256,807 $261,943 $267,182 $272,526 $277,976 $283,536 $289,206 $294,991 $300,890 $306,908 $313,046 1, 2 5 Asset Replacement Fund 235 235 $4,049,899 $2,378,668 $2,439,691 $3,057,860 $2,688,391 $3,311,534 $3,947,139 $4,285,518 $4,730,664 $5,184,713 $5,747,844 1, 2 6 7 Sources of Funds 8 Customer Rates (CY 2019 and CY 2020 Rates) 230 5,061,033 3 9 Customer Rates (CY 2020 Rates) 230 5,539,097 5,628,784 5,719,924 5,812,539 5,906,653 6,002,834 6,100,580 6,199,919 6,300,875 6,403,474 4 10 11 Additional Rate Revenues (Rate Increases CY 2021 and Subsequent Years) 5 12 Fiscal % of Water Months 13 Year Rate Revenue of Revenue 14 FY 19/20 N/A N/A 230 15 FY 20/21 3.3% 6 230 91,395 185,750 188,757 191,814 194,920 198,094 201,319 204,597 207,929 211,315 16 FY 21/22 3.3% 6 230 95,940 194,986 198,144 201,352 204,631 207,963 211,349 214,791 218,288 17 FY 22/23 3.3% 6 230 100,710 204,682 207,997 211,383 214,825 218,324 221,879 225,492 18 FY 23/24 3.3% 6 230 105,718 214,860 218,359 221,915 225,528 229,201 232,933 19 FY 24/25 3.3% 6 230 110,975 225,565 229,238 232,971 236,764 240,620 20 FY 25/26 3.3% 6 230 116,504 236,803 240,659 244,577 248,560 21 FY 26/27 3.3% 6 230 122,309 248,600 252,649 256,763 22 FY 27/28 3.3% 6 230 128,402 260,986 265,236 23 FY 28/29 6 230 0 0 24 FY 29/30 6 230 0 25 Total Additional Rate Revenue $0 $91,395 $281,690 $484,453 $700,358 $930,104 $1,174,536 $1,434,372 $1,710,430 $1,868,776 $1,899,207 26 27 Total Customer Rate Revenues, Fund 230 $5,061,033 $5,630,492 $5,910,474 $6,204,377 $6,512,897 $6,836,757 $7,177,370 $7,534,952 $7,910,349 $8,169,651 $8,302,681 28 29 Non-Rate Revenue 30 Non-Operating Revenues 31 Property Tax 230 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 32 Operating Revenues 33 Interest Income 230 62,187 49,863 55,929 49,084 48,875 53,025 59,720 65,336 71,949 81,812 90,351 34 Interest Income 231 0 0 0 0 0 0 0 0 0 0 0 35 Interest Income 233 5,136 5,239 5,344 5,451 5,560 5,671 5,784 5,900 6,018 6,138 6,261 36 Interest Income 235 80,998 47,573 48,794 61,157 53,768 66,231 78,943 85,710 94,613 103,694 114,957 37 Delinquent Penalties 230 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 38 Water Availability Charge Revenue 230 138,978 138,978 138,978 138,978 138,978 138,978 138,978 138,978 138,978 138,978 138,978 39 Other - New Service Set Up & Meter Repair 230 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 40 Water Reliability Charge Revenue 230 0 0 0 0 0 0 0 0 0 0 0 41 Connection Fees 231 469,995 481,745 501,196 513,726 534,351 547,709 569,578 592,198 607,002 630,982 655,781 6 43 Debt Proceeds, FMSR Capital, Existing Customers 235 5,197,442 8,016,251 12 44 Debt Proceeds, FMSR Capital, Development 231 5,651,312 6,462,522 12 45 Debt Proceeds, New Well No. 3 235 0 46 Total Non-Rate Revenue $2,816,583 $782,688 $11,658,283 $827,684 $840,820 $870,902 $15,391,064 $947,410 $977,850 $1,020,893 $1,065,617 47 48 Total Revenues $7,877,616 $6,413,180 $17,568,757 $7,032,061 $7,353,717 $7,707,659 $22,568,434 $8,482,363 $8,888,199 $9,190,544 $9,368,298 49 Table Notes for this table are found after Table B-3b LAFCO Murrieta FMSR Financial Model Page 10 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES Table B-3b WMWD SCENARIO Projected Operating Statement: Uses of Funds and Financial Performance Criteria WMWD Projected Fund FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 50 Uses of Funds 51 O&M Expenditures Source of Data: FY 19/20 from WMWD, 2/19/2020 7 52 Water Pumping 230 272,503 279,316 286,298 293,456 300,792 308,312 316,020 323,920 332,018 340,319 348,827 8 53 Transmission & Distribution 230 1,312,466 1,345,278 1,378,910 1,413,382 1,448,717 1,484,935 1,522,058 1,560,110 1,599,112 1,639,090 1,680,067 54 Customer Accounts 230 187,042 194,822 202,926 211,367 220,159 229,317 238,878 248,836 259,211 270,017 281,274 8 55 G&A Allocation 230 651,575 667,864 684,561 701,675 719,217 737,197 755,627 774,518 793,881 813,728 834,071 56 Other Operating Expenses 230 123,698 126,790 129,960 133,209 136,539 139,953 143,452 147,038 150,714 154,482 158,344 57 58 Other Expenditures 59 Purchased Water 230 $2,734,384 $1,318,210 $1,431,664 $1,553,099 $1,657,486 $1,769,890 $1,880,495 $2,000,664 $2,124,645 $2,261,783 $2,411,685 8 60 Source of Supply 230 81,213 332,973 341,297 349,829 358,575 367,539 376,728 386,146 395,800 405,695 415,837 13 61 Treatment 230 32,508 133,284 136,616 140,031 143,532 147,120 150,798 154,568 158,432 162,393 166,453 13 62 Water Use Efficiency 230 49,950 51,199 52,479 53,791 55,135 56,514 57,927 59,375 60,859 62,381 63,940 63 Other Non-Operating Expense 230 3,320 3,403 3,488 3,575 3,665 3,756 3,850 3,946 4,045 4,146 4,250 64 65 Other Expenditures (Other than O&M) 66 Capital (GIS Mapping, Tank Mixing System) 230 $0 $500,000 $350,000 $0 $0 $0 $0 $0 $0 $0 $0 9 67 Debt Service, Interfund Loan for North Well 230 0 108,743 108,743 108,743 108,743 108,743 108,743 108,743 108,743 108,743 108,743 68 Capital Project Funding - 231 231 0 0 0 0 0 0 0 0 0 0 0 69 Debt Service - 231 231 67,065 67,054 67,016 67,009 66,976 66,976 66,976 66,976 66,976 66,976 66,976 70 Capital Project Funding - 233 233 0 0 0 0 0 0 0 0 0 0 0 71 Debt Service - 233 233 0 0 0 0 0 0 0 0 0 0 0 72 Capital Projects - 235 235 4,241,229 0 0 1,100,000 0 0 0 0 0 0 9 73 Study Area Repair & Replacement 235 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 10 74 75 FMSR Capital Projects 76 PAYG Capital, Existing Customers 235 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 77 PAYG Capital, Future Development 231 $300,940 $308,464 $316,175 $324,079 $332,181 $0 $0 $0 $0 $0 78 PAYG, Annual Debt Svc, Existing Customers 235 $0 $330,625 $330,625 $330,625 $330,625 $840,564 $840,564 $840,564 $840,564 $840,564 11 79 PAYG, Annual Debt Svc, Future Development 231 $0 $359,498 $359,498 $359,498 $359,498 $770,599 $770,599 $770,599 $770,599 $770,599 11 80 FMSR Capital Projects, Existing Customers 235 5,197,442 8,016,251 11 81 FMSR Capital Projects, Future Development 231 5,651,312 6,462,522 11 82 New Well No. 3 235 0 11 83 84 Total Uses of Funds $9,756,953 $5,929,875 $17,521,298 $7,635,465 $6,733,739 $6,942,557 $22,211,486 $7,946,004 $8,165,600 $8,400,915 $8,651,630 85 86 Interfund Transfer: 230 to 235 489,000 513,450 1,400,000 1,500,000 1,400,000 1,400,000 1,600,000 1,700,000 1,700,000 1,800,000 1,850,000 12 87 88 End of Year Balance 89 Operating Fund 230 $2,493,163 $2,796,455 $2,454,184 $2,443,753 $2,651,231 $2,986,003 $3,266,784 $3,597,474 $4,090,579 $4,517,531 $4,785,339 90 Connection Fee Fund 231 ($820,381) ($706,630) ($940,411) ($1,169,367) ($1,385,570) ($1,596,515) ($1,864,512) ($2,109,889) ($2,340,461) ($2,547,054) ($2,728,847) 91 Distribution Fund 233 $261,943 $267,182 $272,526 $277,976 $283,536 $289,206 $294,991 $300,890 $306,908 $313,046 $319,307 92 Asset Replacement Fund 235 $2,378,668 $2,439,691 $3,057,860 $2,688,391 $3,311,534 $3,947,139 $4,285,518 $4,730,664 $5,184,713 $5,747,844 $6,372,236 93 Math Check, should equal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 94 LAFCO Murrieta FMSR Financial Model Page 11 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES 95 Financial Performance Criteria 96 Operating Reserve: Target 3 - 6 months of Operating Expenses (2013 Reserve Policies, Page 7 as found in Appendix to 2018 - 2020 Budget) 97 Operating Expenses (230 expenses less capital) $5,448,659 $4,453,138 $4,648,199 $4,853,415 $5,043,818 $5,244,534 $5,445,832 $5,659,122 $5,878,718 $6,114,034 $6,364,748 98 3 Months Operating Expenses $1,362,165 $1,113,284 $1,162,050 $1,213,354 $1,260,954 $1,311,134 $1,361,458 $1,414,781 $1,469,679 $1,528,508 $1,591,187 99 6 Months Operating Expenses $2,724,330 $2,226,569 $2,324,099 $2,426,707 $2,521,909 $2,622,267 $2,722,916 $2,829,561 $2,939,359 $3,057,017 $3,182,374 100 Projected EOY 230+231 Reserve Balance $1,672,783 $2,089,825 $1,513,773 $1,274,386 $1,265,662 $1,389,488 $1,402,272 $1,487,585 $1,750,117 $1,970,477 $2,056,491 13 101 OK? Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 102 103 Asset Replacement Fund Reserve: Target between $6,355,923 and $14,235,000 per WMWD 2/5/2020 104 Projected EOY 235 Reserve Balance $2,378,668 $2,439,691 $3,057,860 $2,688,391 $3,311,534 $3,947,139 $4,285,518 $4,730,664 $5,184,713 $5,747,844 $6,372,236 105 OK? No No No No No No No No No No Yes 106 107 108 Notes to Tables A-3a and A-3b: 109 (1) FY 19/20 Beginning Balance per WMWD, 2/4/2020 110 (2) WMWD has four funds used to separately track water system revenues and expenses 111 (3) Source: WMWD Calendar Year 2020 Rate Model 112 (4) Calculated by FG Solutions based on WMWD's CY 2020 Rates and Customer, Water Use data contained in WMWD's CY 2020 Rate Model. See Table A3-c. ~1.6% annual system growth is also included in the calculations (See Table B-2) 113 (5) Projected rate increases are calculated by FG Solutions based on meeting the cash needs of the utility. 114 (6) Connection Fee revenues are included in this analysis and they will be used to pay for Development Capital. See Table B-3c. 115 (7) FY 19/20 expenses from WMWD's FY 19/20 budget. All expenses except debt service and capital improvements are escalated for inflation. 116 (8) Projected expenses are also adjusted for system growth in addition to inflation. Purchased Water expenses based on imported acre-feet times EMWD's per acre-foot cost (see Table B-1). 117 FY 19/20 imported water deliveries and costs are higher than typical because the North Well has been out of service, which reduces local groundwater production. 118 (9) Source: $500K for GIS Mapping and $1.1M for Reservoir Recoating. Schedule per WMWD 2/4/2020. FY 19/20 North Well $ from WMWD, 2/19/2020. $5M for 3rd Well, FY 23/24, per WMWD 2/04/2020. 119 $350K for tank mixing system and schedule from WMWD 2/19/2020. 120 (10) Per WMWD, 2/5/2020 121 (11) See Tables A-3d and A-3e. 122 (12) Transfers estimated by FG Solutions based on meeting the minimum reserve criteria (Operating Reserve exceeding of 3 months of expenses and Asset Replacement Fund reserve within WMWD's specified range. 123 (13) Projected local production times local production unit cost. See Table B-1 124 (14) The 230 and 231 Reserve Balances are combined for the purposes of this reserve balance criteria calculation because the negative balance in the 231 Fund must be covered by the 230 Fund. LAFCO Murrieta FMSR Financial Model Page 12 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES Table B-3c WMWD SCENARIO: Revenue Calculations This Table Contains: Line Number Subject 125 Number of Connections per Meter Size (See Table B-2) 134 Projected Water Use by WMWD Tier, ccf/year (See Table B-2) 142 Seasonal Distribution of Water Use, ccf/year (Calculated from Data in Table B-2) 152 CY 2019 and CY 2020 Rate Revenue Back calculation Under WMWD Rates 204 WMWD Adopted Water Rates Through Calendar Year 2020, and Projected Rates through FY 29/30. Projected Based on % Increases in Operating Statement Shown Above in Table B-3a 229 Projected Connection Fee Revenues Projected FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 125 Number of Connections per Meter Size (See Table B-2) 126 5/8" 482 490 498 506 514 522 530 538 546 554 563 127 3/4" 1,968 1,999 2,031 2,063 2,096 2,129 2,163 2,198 2,233 2,269 2,305 128 1" 172 175 178 181 184 187 190 193 196 199 202 129 1.5" 77 79 81 83 85 87 89 91 93 95 97 130 2" 161 164 167 170 173 176 179 182 185 188 191 131 3" 5 5 5 5 5 5 5 5 5 5 5 132 4" 2 2 2 2 2 2 2 2 2 2 2 133 Total 2,867 2,914 2,962 3,010 3,059 3,108 3,158 3,209 3,260 3,312 3,365 134 Projected Water Use by WMWD Tier, ccf/year (See Table B-2) 135 Tier 1 455,000 462,367 469,853 477,461 485,192 493,048 501,077 509,236 517,528 525,955 534,519 136 Tier 2 451,000 458,302 465,723 473,264 480,927 488,714 496,672 504,760 512,979 521,332 529,821 137 Tier 3 40,800 41,461 42,132 42,814 43,507 44,211 44,931 45,663 46,407 47,163 47,931 138 Tier 4 19,500 19,816 20,137 20,463 20,794 21,131 21,475 21,825 22,180 22,541 22,908 139 Tier 5 37,400 38,006 38,621 39,246 39,881 40,527 41,187 41,858 42,540 43,233 43,937 140 Total 1,003,700 1,019,952 1,036,466 1,053,248 1,070,301 1,087,631 1,105,342 1,123,342 1,141,634 1,160,224 1,179,116 141 142 Seasonal Distribution of Water Use, ccf/year (Calculated from Data in Table B-2) 143 July - Dec Jan - June 144 Tier 1 54% 46% What this table means: according to data provided by WMWD, 54% of Tier 1 water use occurs between July and December, 145 Tier 2 59% 41% 61% of Tier 5 water use occurs between July and December, and 57% of total water use occurs between January and June. 146 Tier 3 66% 34% 147 Tier 4 64% 36% 148 Tier 5 61% 39% 149 Total 57% 43% 150 151 LAFCO Murrieta FMSR Financial Model Page 13 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES 152 CY 2019 and CY 2020 Rate Revenue Back calculation Under WMWD Rates 153 Fixed System Charge, CY 2019 and CY 2020 Rates 154 CY 2019 CY 2020 155 5/8" Meter $29.05 $32.00 156 3/4" Meter $40.11 $44.39 157 1" Meter $61.68 $68.56 158 1.5" Meter $115.87 $129.28 159 2" Meter $138.43 $154.50 160 3" Meter $344.39 $384.49 161 4" Meter $665.06 $744.16 162 163 Fixed System Charge Revenues FY 19/20 FY 20/21 164 5/8" Meter $176,557 $188,160 165 3/4" Meter 997,776 1,064,827 166 1" Meter 134,408 143,976 167 1.5" Meter 113,259 122,557 168 2" Meter 282,970 304,056 169 3" Meter 21,866 23,069 170 4" Meter 16,911 17,860 171 Subtotal, Fixed System Charge Revenues $1,743,747 $1,864,506 172 173 Commodity Charge and Pumping Charges (per HCF, 1 HCF = 748 gallons) 174 Water delivered for fire protection services will be billed at the Tier 2 rate. 175 176 Commodity Charge Tiers CY 2019 CY 2020 177 Tier 1 - Indoor Budget $1.919 $2.006 178 Tier 2 - Outdoor Budget $4.115 $4.286 179 Tier 3 - Inefficient $4.932 $5.118 180 Tier 4 - Wasteful $5.372 $5.558 181 Tier 5 - Unsustainable $6.252 $6.438 182 183 Pumping Charge (per HCF) 184 Power Zone 8 - Grizzly Ridge $0.225 $0.234 185 186 Commodity Charge Revenues FY 19/20 CY 2020 187 Tier 1 - Indoor Budget $891,415 $920,687 188 Tier 2 - Outdoor Budget 1,887,329 1,951,514 189 Tier 3 - Inefficient 203,792 211,053 190 Tier 4 - Wasteful 106,075 109,498 191 Tier 5 - Unsustainable 236,522 243,170 192 Subtotal Commodity Charge Revenues $3,325,133 $3,435,923 193 194 Pumping Charge Revenues $233,177 $238,669 195 196 Total Calculated Rate Revenues $5,302,057 $5,539,097 197 198 Compare with FY 19/20 revenues in WMWD Budget (see Table B-3a above) $5,061,033 Conclusion: FY 19/20 revenues should be lower than calculated CY 2020 revenues, 199 given projected system growth between 2019 and 2020, and that the calculated CY 2020 rates have a full year of the 200 CY 2020 rate increases in effect. The CY 2020 rate revenues are based on a different set of customer data, with more customers and higher water use 201 resulting from growth. 202 8.63%percent difference between calculated and FY 19/20 WMWD Budget. 203 LAFCO Murrieta FMSR Financial Model Page 14 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES 204 WMWD Adopted Water Rates Through Calendar Year 2020, and Projected Rates through FY 29/30. Projected Based on % Increases in Operating Statement Shown Above in Table B-3a 205 206 Adopted Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected 207 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 208 Fixed System Charge 209 5/8" Meter $32.00 $33.06 $34.15 $35.27 $36.44 $37.64 $38.88 $40.17 $41.49 $41.49 $41.49 210 3/4" Meter $44.39 $45.85 $47.37 $48.93 $50.55 $52.21 $53.94 $55.72 $57.56 $57.56 $57.56 211 1" Meter $68.56 $70.82 $73.16 $75.57 $78.07 $80.64 $83.31 $86.05 $88.89 $88.89 $88.89 212 1.5" Meter $129.28 $133.55 $137.95 $142.51 $147.21 $152.07 $157.08 $162.27 $167.62 $167.62 $167.62 213 2" Meter $154.50 $159.60 $164.87 $170.31 $175.93 $181.73 $187.73 $193.92 $200.32 $200.32 $200.32 214 3" Meter $384.49 $397.18 $410.29 $423.82 $437.81 $452.26 $467.18 $482.60 $498.53 $498.53 $498.53 215 4" Meter $744.16 $768.72 $794.08 $820.29 $847.36 $875.32 $904.21 $934.05 $964.87 $964.87 $964.87 216 217 218 Commodity Charge Tiers (per HCF) 219 Tier 1 - Indoor Budget $2.006 $2.07 $2.14 $2.21 $2.28 $2.36 $2.44 $2.52 $2.60 $2.60 $2.60 220 Tier 2 - Outdoor Budget $4.286 $4.43 $4.57 $4.72 $4.88 $5.04 $5.21 $5.38 $5.56 $5.56 $5.56 221 Tier 3 - Inefficient $5.118 $5.29 $5.46 $5.64 $5.83 $6.02 $6.22 $6.42 $6.64 $6.64 $6.64 222 Tier 4 - Wasteful $5.558 $5.74 $5.93 $6.13 $6.33 $6.54 $6.75 $6.98 $7.21 $7.21 $7.21 223 Tier 5 - Unsustainable $6.438 $6.65 $6.87 $7.10 $7.33 $7.57 $7.82 $8.08 $8.35 $8.35 $8.35 224 225 Pumping Charge (per HCF) 226 Power Zone 8 - Grizzly Ridge $0.234 $0.242 $0.250 $0.258 $0.266 $0.275 $0.284 $0.294 $0.303 $0.303 $0.303 227 Note: the majority of the WMWD Service Area is in Power Zone 7, so this Pumping Charge is not applicable. 228 229 Projected Connection Fee Revenues Additional growth rate if desired, to make Fund 231 balance = $0 at end of FY 29/30 0.0%Included in model per 3/26/2020 direction from WMWD; removed 230 per 4/2/2020 direction from WMWD 231 Projected 232 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 233 Number of New Meters 234 5/8" 8 8 8 8 8 8 8 8 8 8 9 235 3/4" 31 31 32 32 33 33 34 35 35 36 36 236 1" 3 3 3 3 3 3 3 3 3 3 3 237 1.5" 2 2 2 2 2 2 2 2 2 2 2 238 2" 3 3 3 3 3 3 3 3 3 3 3 239 3" 0 0 0 0 0 0 0 0 0 0 0 240 4" 0 0 0 0 0 0 0 0 0 0 0 241 Total 47 47 48 48 49 49 50 51 51 52 53 242 243 Connection Fee (Assume any new meters larger than 2" pay the 2" Connection Fee). Connection Fees increased with rate of CIP escalation per WMWD, 2/4/2020 244 5/8" $7,050 $7,226 $7,407 $7,592 $7,782 $7,976 $8,176 $8,380 $8,590 $8,804 $9,025 245 3/4" $7,050 $7,226 $7,407 $7,592 $7,782 $7,976 $8,176 $8,380 $8,590 $8,804 $9,025 246 1" $11,750 $12,043 $12,344 $12,653 $12,969 $13,294 $13,626 $13,967 $14,316 $14,674 $15,041 247 1.5" $23,499 $24,087 $24,689 $25,306 $25,939 $26,587 $27,252 $27,933 $28,632 $29,347 $30,081 248 2" $37,599 $38,539 $39,503 $40,490 $41,503 $42,540 $43,604 $44,694 $45,811 $46,956 $48,130 249 250 Projected Connection Fee Revenues 251 5/8" $56,400 $57,810 $59,255 $60,737 $62,255 $63,811 $65,407 $67,042 $68,718 $70,436 $81,221 252 3/4" 218,550 224,014 237,021 242,947 256,802 263,222 277,979 293,308 300,641 316,961 324,885 253 1" 35,249 36,130 37,033 37,959 38,908 39,881 40,878 41,900 42,947 44,021 45,122 254 1.5" 46,999 48,173 49,378 50,612 51,878 53,175 54,504 55,866 57,263 58,695 60,162 255 2" 112,798 115,618 118,508 121,471 124,508 127,620 130,811 134,081 137,433 140,869 144,391 256 Total $469,995 $481,745 $501,196 $513,726 $534,351 $547,709 $569,578 $592,198 $607,002 $630,982 $655,781 257 LAFCO Murrieta FMSR Financial Model Page 15 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES Table B-3d WMWD SCENARIO: FSMR Capital Improvements and New Well No. 3; Possible Cost Allocation to Existing Customers or Future Development Benefits Basis Estimated Existing $ to Future Development for Existing/ Cost, 2020 $ Customers or $ to Existing Funded by Funded by Development Projected Project (See Note 1) Development? Customers WMWD Developers Allocation Schedule 258 259 Storage $8,328,000 Both $4,610,842 $3,717,158 Note 2 Note 5 260 Pipelines Associated with Storage $4,157,000 Both $2,301,546 $1,855,454 Note 2 Note 5 261 Expansion CIP North of Murrieta Creek $17,120,000 Future Only $17,120,000 Note 3 Note 3 262 Expansion CIP South of Murrieta Creek $20,388,000 Future Only $20,388,000 Note 3 Note 3 263 WMWD Hydraulic Improvements $1,468,000 Future Only $1,468,000 Note 4 Note 4 264 Supply Improvements Through EMWD $5,379,000 Future Only $5,379,000 Note 4 Note 4 265 Legacy (Small Diameter) Improvements $4,947,000 Existing Only $4,947,000 Note 6 Note 6 266 267 Total $61,787,000 $11,859,388 $12,419,612 $37,508,000 268 269 New Well No. 3 $0 Both $0 $0 Note 2 Note 7 270 271 Notes: 272 (1) Source: West Yost, October 2019, except for New Well No. 3. Costs for New Well No. 3 are in FY 23/24 dollars. 273 (2) Project serves both existing and new EDUs. % to existing EDUs is based on ratio of existing EDUs to buildout EDUs. 274 (3) Expansion of water system. Project is not needed unless there is development. Schedule depends on when development occurs. 275 (4) Needed to accommodate future water demands from growth. Improvement is not needed unless there is development. Schedule depends on when development occurs but assumed FY 21/22 in this analysis. 276 (5) Assume that this improvement will be completed between 2025 and 2030. Anticipate that permitting and siting of the reservoir will require additional time and could occur before 2025. 277 (6) These improvements are required even if there is no future development. Assume improvements will be completed between 2020 and 2025. 278 (7) Not Used LAFCO Murrieta FMSR Financial Model Page 16 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES Table B-3e WMWD SCENARIO: Potential Pay-As-You-Go Capital Expenses and Potential Debt Service Expenses Potential Funding Projected Pay-As-You-Go Expenditures and/or Debt Service Expenditures FMSR Capital Projects Method (1) FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Note 279 Storage, Portion for Existing Customers Debt 235 $340,150 $340,150 $340,150 $340,150 $340,150 2 280 Storage, Portion for Future Development Debt 231 $274,221 $274,221 $274,221 $274,221 $274,221 2 281 Pipelines Associated with Storage, Existing Customers Debt 235 $169,789 $169,789 $169,789 $169,789 $169,789 2 282 Pipelines Associated with Storage, Future Development Debt 231 $136,880 $136,880 $136,880 $136,880 $136,880 2 283 Expansion CIP North of Murrieta Creek Developer 1 284 Expansion CIP South of Murrieta Creek Developer 1 285 WMWD Hydraulic Improvements PAYG 231 $300,940 $308,464 $316,175 $324,079 $332,181 3 286 Supply Improvements Through EMWD Debt 231 $359,498 $359,498 $359,498 $359,498 $359,498 $359,498 $359,498 $359,498 $359,498 4 287 Legacy (Small Diameter) Improvements Debt 235 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 4 288 Total $300,940 $998,586 $1,006,298 $1,014,202 $1,022,304 $1,611,163 $1,611,163 $1,611,163 $1,611,163 $1,611,163 289 290 Projected 291 Existing WMWD Debt Service and Future Debt Service for 3rd Well FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 292 2010 A&B Revenue Bond Debt Service Fund 231 $67,054 $67,016 $67,009 $66,976 $66,976 $66,976 $66,976 $66,976 $66,976 $66,976 293 Interfund Loan for North Well Fund 230 $108,743 $108,743 $108,743 $108,743 $108,743 $108,743 $108,743 $108,743 $108,743 $108,743 294 Well No. 3, Portion for Existing Customers Fund 235 $0 $0 $0 $0 $0 $0 $0 295 Well No. 3, Portion for Future Development Fund 231 $0 $0 $0 $0 $0 $0 $0 296 Total $175,797 $175,759 $175,752 $175,719 $175,719 $175,719 $175,719 $175,719 $175,719 $175,719 297 298 Table B-3d Notes: 299 (1) Decisions on how to fund improvement projects will be made by the WMWD Board of Directors. Information is provided here to indicate a potential funding method, and is subject to review and modification by WMWD staff and/or Board. 300 WMWD's resolutions state that the "District will not finance through proceedings pursuant to the Mello-Roos Community Facilities Act of 1982". Therefore, Improvement Districts are not assumed to be an option. 301 (2) Assumes 30 year debt at interest rate of 4%, staring in FY 25/26, with 10% added to project cost to cover capitalized bond reserve and issuance costs. Project cost escalated for inflation from 2019 dollars to 2025 dollars. 302 (3) Project cost spread evenly between FY 20/21 and FY 24/25 and adjusted for inflation. 303 (4) Assumes 30 year debt (per WMWD 2/4/2020) at interest rate of 4%, staring in FY 21/22, with 10% added to project cost to cover capitalized bond reserve and issuance costs. Project cost escalated for inflation from 2019 dollars to 2021 dollars. Table B-3f WMWD SCENARIO: Potential Capital Funding for Facilities That Benefit Future Development Capital Projects How Growth Pays for Growth 304 Storage WMWD funds growth portion using debt; cost incorporated into Connection Fee. Future development pays Connection Fees. 305 Pipelines Associated with Storage WMWD funds growth portion using debt; cost incorporated into Connection Fee. Future development pays Connection Fees. 306 Expansion CIP North of Murrieta Creek Developer 307 Expansion CIP South of Murrieta Creek Developer 308 WMWD Hydraulic Improvements WMWD funds project; cost incorporated into Connection Fee. Future development pays Connection Fees. 309 Supply Improvements Through EMWD WMWD funds project; cost incorporated into Connection Fee. Future development pays Connection Fees. 310 Fireflow Improvements Not applicable. Not growth related 311 New Well No. 3 Not applicable. Project not planned LAFCO Murrieta FMSR Financial Model Page 17 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 WMWD Scenario Table B-3 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis WMWD SCENARIO TABLES Table B-3g WMWD SCENARIO: Projected Total Cost of Water Projected FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 312 Single Family Residence, 3/4" Meter, 18 ccf/month, Power Zone 7 1 313 Fixed System Charge, $/month $44.39 $45.85 $47.37 $48.93 $50.55 $52.21 $53.94 $55.72 $57.56 $57.56 314 Tier 1 Volume Charge, $/hcf $2.01 $2.07 $2.14 $2.21 $2.28 $2.36 $2.44 $2.52 $2.60 $2.60 315 Tier 2 Volume Charge, $/hcf $4.29 $4.43 $4.57 $4.72 $4.88 $5.04 $5.21 $5.38 $5.56 $5.56 316 Pumping Charge, $/hcf (N/A to the majority of the Study Area) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 317 Standby Charge, $/month $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 318 Projected Total Cost of Water $105.05 $108.46 $111.98 $115.62 $119.37 $123.25 $127.26 $131.41 $135.69 $135.69 319 320 Commercial Account, 2" Meter, 1,500 ccf/year (125 ccf/month) 2 321 Fixed System Charge, $/month $154.50 $159.60 $164.87 $170.31 $175.93 $181.73 $187.73 $193.92 $200.32 $200.32 322 Tier 1 Volume Charge, $/hcf $2.01 $2.07 $2.14 $2.21 $2.28 $2.36 $2.44 $2.52 $2.60 $2.60 323 Tier 2 Volume Charge, $/hcf $4.29 $4.43 $4.57 $4.72 $4.88 $5.04 $5.21 $5.38 $5.56 $5.56 324 Pumping Charge, $/hcf (N/A to the majority of the Study Area) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 325 Standby Charge, $/month $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 $1.75 326 Projected Total Cost of Water $569.45 $588.18 $607.54 $627.53 $648.18 $669.51 $691.55 $714.31 $737.82 $737.82 Notes: (1) For single-family residential customers, estimate 8 ccf/month in Tier 1 and remainder of water use in Tier 2. No Tier 3 or Tier 4 use. (8 ccf/month in Tier 1 per WMWD, 2/4/2020) 3.28 household size yields 8 ccf/month in Tier 1, at 60 gpcd. For the commercial account example, 1,500 ccf/year is the average water use for WMWD's customers in the Study Area with 2" meters, as reported by WMWD (1/21/2020) (2) WMWD's commercial budget formula is for any given month, 43% of that month's three-year historical average water use is in Tier 1, and the remaining 57% is in Tier 2. For the purposes of this monthly bill calculation, Tier 1 water use is 53.75 ccf, and Tier 2 water use is 71.25 ccf. Source: WMWD staff, 8/20/2020. LAFCO Murrieta FMSR Financial Model Page 18 of 51 B3 WMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES Table B-4a RCWD SCENARIO: Projected Operating Statement: Sources of Funds Projected Line FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 1 Beginning Reserve Balance 2 Working Capital $1,314,934 $1,423,939 $1,485,839 $1,287,861 $1,613,947 $1,676,216 $1,740,135 $1,805,794 $1,874,316 $1,946,293 3 Drought Reserve $0 $325,890 $351,529 $0 $197,016 $387,248 $399,010 $411,642 $424,274 $434,881 4 Rate Stabilization $0 $0 $46,287 $0 $0 $320,172 $873,699 $1,354,345 $1,405,737 $1,459,720 5 Water Replenishment: Not Applicable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6 Risk Management $0 $0 $0 $0 $0 $0 $0 $130,710 $746,032 $895,951 7 Unrestricted $0 $0 $0 $0 $0 $0 $0 $0 $0 $415,914 8 9 Sources of Funds 10 Rate Revenues Under Existing Santa Rosa Division Rate Schedule 11 Monthly Service Charges $1,862,904 1,893,067 1,923,719 1,954,867 1,986,520 2,018,867 2,051,741 2,085,151 2,119,104 2,153,610 12 Commodity Charges $2,115,628 2,149,883 2,184,693 2,220,067 2,256,014 2,292,749 2,330,083 2,368,025 2,406,584 2,445,772 13 14 Additional Rate Revenues (Rate Increases for Monthly Service Charges and Commodity Charges) 15 Fiscal % of Water Months 16 Year Rate Revenue of Revenue 17 FY 20/21 2.0% 12 79,571 80,859 82,168 83,499 84,851 86,232 87,636 89,064 90,514 91,988 18 FY 21/22 2.0% 12 82,476 83,812 85,169 86,548 87,957 89,389 90,845 92,324 93,827 19 FY 22/23 2.0% 12 85,488 86,872 88,279 89,716 91,177 92,662 94,171 95,704 20 FY 23/24 2.0% 12 88,609 90,044 91,510 93,001 94,515 96,054 97,618 21 FY 24/25 2.0% 12 91,845 93,341 94,861 96,405 97,975 99,570 22 FY 25/26 2.0% 12 95,207 96,758 98,333 99,935 101,562 23 FY 26/27 2.0% 12 98,693 100,300 101,933 103,593 24 FY 27/28 2.0% 12 102,306 103,972 105,665 25 FY 28/29 12 0 0 26 FY 29/30 12 0 27 Total Additional Rate Revenue (Monthly Service Charges, Commodity Charges $79,571 $163,335 $251,468 $344,149 $441,567 $543,963 $651,515 $764,430 $776,878 $789,527 28 29 Energy Charges $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 30 Ad Valorem Equivalent Rate Surcharge (assume land values increases with inflation) $2,090,450 2,142,711 2,196,279 2,251,186 2,307,466 2,365,152 2,424,281 2,484,888 2,547,010 2,610,686 31 32 Subtotal Rate Revenues $6,148,552 $6,348,997 $6,556,159 $6,770,269 $6,991,566 $7,220,732 $7,457,620 $7,702,493 $7,849,577 $7,999,595 33 34 Non-Rate Revenue 35 Non-Operating Revenues 36 Property Tax (1% Share) Assume WMWD's small property tax revenue does not transfer 0 0 0 0 0 0 0 0 0 0 37 Operating Revenues 38 Interest Income 26,299 34,997 37,673 25,757 36,219 47,673 60,257 74,050 89,007 103,055 39 Delinquent Penalties (Assumed Same as WMWD) 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 40 Standby Charge Revenues 462,731 462,731 462,731 462,731 462,731 462,731 462,731 462,731 462,731 462,731 41 Other - New Service Set Up & Meter Repair 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 42 Other Revenues 43 Connection Fees 166,322 173,145 177,474 184,711 189,329 197,004 204,945 210,068 218,489 226,127 44 Total Non-Rate Revenue $712,640 $728,161 $735,166 $730,488 $745,568 $764,696 $785,221 $804,138 $827,515 $849,202 45 46 Total Revenues $6,861,192 $7,077,158 $7,291,326 $7,500,757 $7,737,134 $7,985,428 $8,242,842 $8,506,631 $8,677,092 $8,848,796 47 48 LAFCO Murrieta FMSR Financial Model Page 19 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES Table B-4b RCWD SCENARIO: Projected Operating Statement: Uses of Funds and Financial Performance Criteria Projected FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 49 Uses of Funds 50 O&M Expenditures 1 51 Water Pumping 279,316 286,298 293,456 300,792 308,312 316,020 323,920 332,018 340,319 348,827 52 Transmission & Distribution 1,345,278 1,378,910 1,413,382 1,448,717 1,484,935 1,522,058 1,560,110 1,599,112 1,639,090 1,680,067 53 Customer Accounts 194,822 202,926 211,367 220,159 229,317 238,878 248,836 259,211 270,017 281,274 54 G&A Allocation 667,864 684,561 701,675 719,217 737,197 755,627 774,518 793,881 813,728 834,071 3 55 Other Operating Expenses 126,790 129,960 133,209 136,539 139,953 143,452 147,038 150,714 154,482 158,344 56 57 Other Expenditures 58 Purchased Water $1,136,889 $1,240,134 $1,349,234 $1,452,788 $1,550,253 $1,650,218 $1,752,904 $1,861,616 $1,978,049 $2,106,981 8 59 Source of Supply 332,973 341,297 349,829 358,575 367,539 376,728 386,146 395,800 405,695 415,837 60 Treatment 133,284 136,616 140,031 143,532 147,120 150,798 154,568 158,432 162,393 166,453 61 Water Use Efficiency 51,199 53,328 55,547 57,857 60,264 62,776 65,394 68,120 70,960 73,918 62 Other Non-Operating Expenses 3,403 3,488 3,575 3,665 3,756 3,850 3,946 4,045 4,146 4,250 63 64 Other Expenditures 65 WMWD Identified Capital Project Funding (GIS Mapping and Tank Mixing System) $500,000 $350,000 $0 $0 $0 $0 $0 $0 $0 $0 68 WMWD-Identified Capital Project Funding (Reservoir Recoating) 0 0 1,100,000 0 0 0 0 0 0 0 69 Study Area Repair and Replacement 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 4 70 RCWD "Backbone" Repair and Replacement 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 540,000 5 71 FMSR Capital Excluding Improvement Districts $614,479 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 6 72 73 Total Uses of Funds $6,426,297 $6,943,332 $7,887,120 $6,977,656 $7,164,461 $7,356,220 $7,553,195 $7,758,763 $7,974,693 $8,205,837 74 75 End of Year Balance 76 Working Capital $1,423,939 $1,485,839 $1,287,861 $1,613,947 $1,676,216 $1,740,135 $1,805,794 $1,874,316 $1,946,293 $2,023,341 77 Drought Reserve $325,890 $351,529 $0 $197,016 $387,248 $399,010 $411,642 $424,274 $434,881 $445,753 78 Rate Stabilization $0 $46,287 $0 $0 $320,172 $873,699 $1,354,345 $1,405,737 $1,459,720 $1,517,506 79 Water Replenishment: Not Applicable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 80 Risk Management $0 $0 $0 $0 $0 $0 $130,710 $746,032 $895,951 $895,951 81 Unrestricted $0 $0 $0 $0 $0 $0 $0 $0 $415,914 $913,168 82 Math Check, should equal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 83 84 Financial Performance Criteria 85 Working Capital Reserve: Four Months of Operating Budget Within Five Years 86 Criteria, $ $1,423,939 $1,485,839 $1,550,435 $1,613,947 $1,676,216 $1,740,135 $1,805,794 $1,874,316 $1,946,293 $2,023,341 87 Reserve Criteria Met? Yes Yes Yes Yes Yes Yes 88 Drought Reserve: 30% of Local Supplies @MWD Tier 1 Untreated Rate Effective at End of FY 7 89 Criteria, $ $340,204 $351,529 $364,162 $374,616 $387,248 $399,010 $411,642 $424,274 $434,881 $445,753 90 Reserve Criteria Met? No Yes No No Yes Yes Yes Yes Yes Yes 91 Rate Stabilization Fund: Three Months of Operating Budget Within Ten Years 92 Criteria, $ $1,067,954 $1,114,380 $1,162,826 $1,210,460 $1,257,162 $1,305,101 $1,354,345 $1,405,737 $1,459,720 $1,517,506 93 Reserve Criteria Met? Yes 94 Water Replenishment Reserve: not applicable per RWS 1/22/2020 95 Reserve Criteria Met? 96 Risk Management Reserve: $750,000 plus 1% of current gross plant 97 Criteria, $ $895,951 $895,951 $895,951 $895,951 $895,951 $895,951 $895,951 $895,951 $895,951 $895,951 98 Reserve Criteria Met? No No No No No No No No Yes Yes 99 LAFCO Murrieta FMSR Financial Model Page 20 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES 100 Table B-4a and A-5b Notes: 101 (1) Source: Western Municipal Water District FY 2020 for the expenses in this table except for purchased water. 102 (2) Debt service payments under a WMWD Scenario will be discontinued under a RCWD scenario because WMWD's outstanding debt will be refunded as part of a service area transfer. 103 (3) RCWD reviewed this projected General and Administrative expense projected by WMWD and for the purposes of this analysis, determined that it was a reasonable estimate. 104 (4) Estimated, starting FY 20/21, per WMWD 2/5/2020. FY 20/21 and 21/22 WMWD-identified capital expenses also represent repair/replacement expenditures. 105 (5) Per RCWD staff, 1/22/2020. Represents repair/replacement expenditures in RCWD's system that will provide water source, storage, and transmission services to the Study Area. 106 (6) See Table B-4d for more details. 107 (7) Criteria for Drought Reserve per RCWD staff, January 22, 2020. 108 (8) Purchased Water = MWD Tier 1 Rate * 1.1 * Imported AF/Year. 10% factor for MWD Capacity and RTS Charges, based on review of EMWD's charges to WMWD Table B-4c RCWD SCENARIO: Revenue Calculations This Table Contains: Line Number Subject 109 Number of Connections per Meter Size (See Table B-2) 118 Comparison of RCWD and WMWD Budget-Based Rate Tiers 137 Projected Water Use by RCWD Tier, ccf/year (See Table B-2), All Customers Except CII (Commercial, Industrial, Institutional) 158 FY 19/20 Rate Revenue Back calculation Under RCWD's Santa Rosa Rate Schedule 212 RCWD Adopted Water Rates Through FY 19/20, and Projected Rates through FY 29/30. Projected Based on % Increases in Operating Statement Shown Above. 237 Existing Santa Rosa Division Capacity Charge Schedule 253 Projected Capacity Charge Revenues 277 Projected Standby Charge Revenues 287 Projected Ad Valorem Tax Revenues and Projected Revenue-Neutral Rate Surcharge Calculation 337 Projected Reserve Balance Transferred From WMWD to RCWD Projected FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 109 Number of Connections per Meter Size (See Table B-2) 110 5/8" 482 490 498 506 514 522 530 538 546 554 563 111 3/4" 1,968 1,999 2,031 2,063 2,096 2,129 2,163 2,198 2,233 2,269 2,305 112 1" 172 175 178 181 184 187 190 193 196 199 202 113 1.5" 77 79 81 83 85 87 89 91 93 95 97 114 2" 161 164 167 170 173 176 179 182 185 188 191 115 3" 5 5 5 5 5 5 5 5 5 5 5 116 4" 2 2 2 2 2 2 2 2 2 2 2 117 118 Comparison of RCWD and WMWD Budget-Based Rate Tiers 119 - WMWD has five tiers, RCWD has four tiers. For CII, WMWD has five tiers, RCWD has three. Projecting revenues from Santa Rosa Division rates requires estimating water sales by RCWD tiers. 120 - Over 60% of Murrieta Division Water Use is Single-Family. A comparison of tier definitions is as follows: 121 - Also, from Table B-2, 91% of Murrieta Division water use is in either Tier 1 or Tier 2 122 123 WMWD RCWD WMWD RCWD 124 Tier SFR SFR CII CII 125 Tier 1 100% IWB 100% IWB 43% TWB 100% AWB 126 Tier 2 100% OWB 100% OWB 57% TWB 50% AWB 127 Tier 3 25% TWB 50% TWB 25% TWB Above Tier 2 128 Tier 4 25% TWB Above Tier 3 25% TWB 129 Tier 5 Above Tier 4 Above Tier 4 130 131 SFR Conclusions: CII (Commercial, Industrial, Institutional) Conclusions: 132 RCWD Tier 1 Use = WMWD Tier 1 Use RCWD Tier 1 Use = WMWD Tier 1 + Tier 2 Use 133 RCWD Tier 2 Use = WMWD Tier 2 Use RCWD Tier 2 Use = WMWD Tier 3 + Tier 4 Use 134 RCWD Tier 3 Use = WMWD Tier 3 + Tier 4 Use RCWD Tier 3 Use = WMWD Tier 5 Use 135 RCWD Tier 4 Use = WMWD Tier 4 Use 136 LAFCO Murrieta FMSR Financial Model Page 21 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES 137 Projected Water Use by RCWD Tier, ccf/year (See Table B-2), All Customers Except CII (Commercial, Industrial, Institutional) 138 Projected 139 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 140 Tier 1 399,486 405,954 412,527 419,206 425,994 432,892 439,941 447,105 454,385 461,784 469,303 141 Tier 2 414,102 420,807 427,621 434,545 441,581 448,731 456,038 463,464 471,011 478,681 486,476 142 Tier 3 52,414 53,263 54,125 55,001 55,892 56,797 57,722 58,662 59,617 60,588 61,575 143 Tier 4 33,598 34,142 34,695 35,257 35,828 36,408 37,001 37,604 38,216 38,838 39,470 144 Total 899,600 914,166 928,968 944,009 959,295 974,828 990,702 1,006,835 1,023,229 1,039,891 1,056,824 145 146 147 Projected Water Use by RCWD Tier, ccf/year (See Table B-2), CII 148 Projected 149 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 150 Tier 1 92,412 93,909 95,430 96,975 98,545 100,141 101,772 103,429 105,113 106,825 108,564 151 Tier 2 7,886 8,013 8,143 8,275 8,409 8,545 8,684 8,825 8,969 9,115 9,263 152 Tier 3 3,802 3,863 3,926 3,990 4,055 4,121 4,188 4,256 4,325 4,395 4,467 153 Total 104,100 105,785 107,499 109,240 111,009 112,807 114,644 116,510 118,407 120,335 122,294 154 155 Total Murrieta Division Water Use 1,003,700 1,019,951 1,036,467 1,053,249 1,070,304 1,087,635 1,105,346 1,123,345 1,141,636 1,160,226 1,179,118 156 157 158 FY 19/20 Rate Revenue Back calculation Under RCWD's Santa Rosa Rate Schedule 159 Effective 160 Monthly Service Charge 7/1/2019 161 5/8" Meter $29.51 Per RCWD 1/22/2020: RCWD doesn't have this charge because they don't use 5/8" meters. They would scale the 3/4" charge per their meter equivalent ratio. 162 3/4" Meter $44.04 163 1" Meter $66.49 164 1.5" Meter $117.50 165 2" Meter $180.79 166 3" Meter $532.49 167 4" Meter $1,047.78 168 6" Meter $1,669.23 169 8" Meter or Larger $2,358.21 170 171 Source: Rancho California Water District: Customer Guide Rates & Charges 2019-2020 172 173 Monthly Service Charge Revenues FY 19/20 174 5/8" Meter $170,667 175 3/4" Meter $1,040,049 176 1" Meter $137,235 177 1.5" Meter $108,570 178 2" Meter $349,286 179 3" Meter $31,949 180 4" Meter $25,147 181 Total $1,862,904 182 183 LAFCO Murrieta FMSR Financial Model Page 22 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES 184 Commodity Charge and Pumping Charges ($ per HCF, 1 HCF = 748 gallons) 185 Assume that standard rates apply, as Tier 1 water will be available from MWD via the MWD wholesaler (EMWD) 186 187 Effective 7/1/2019 188 Pre & Post 189 Standard 2003 Annex 190 Residential, Multi-Family & Landscape 191 Tier 1 $1.286 $2.548 192 Tier 2 $2.255 $2.548 193 Tier 3 $3.235 $3.235 194 Tier 4 $7.597 $7.597 195 Commercial, Industrial, Ag, Domestic, and Other 196 Tier 1 $2.044 $2.548 197 Tier 2 $3.235 $3.235 198 Tier 3 $7.597 $7.597 199 Energy Rates: Assume Most of System in RCWD 1305 with no energy charge zone 200 201 Source: Rancho California Water District: Customer Guide Rates & Charges 2019-2020 202 FY 19/20 203 All Customers FY 19/20 204 Commodity Charge Revenues Except CII CII 205 Tier 1 $513,739 $188,891 206 Tier 2 933,800 25,510 207 Tier 3 169,560 28,883 208 Tier 4 255,245 N/A 209 Subtotal Commodity Charge Revenues $1,872,344 $243,284 210 211 212 RCWD Adopted Water Rates Through FY 19/20, and Projected Rates through FY 29/30. Projected Based on % Increases in Operating Statement Shown Above. 213 214 Adopted Projected 215 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 216 Monthly Service Charge 217 5/8" Meter $29.51 $30.10 $30.70 $31.31 $31.94 $32.58 $33.23 $33.89 $34.57 $34.57 $34.57 218 3/4" Meter $44.04 $44.92 $45.82 $46.74 $47.67 $48.62 $49.60 $50.59 $51.60 $51.60 $51.60 219 1" Meter $66.49 $67.82 $69.18 $70.56 $71.97 $73.41 $74.88 $76.38 $77.90 $77.90 $77.90 220 1.5" Meter $117.50 $119.85 $122.25 $124.69 $127.19 $129.73 $132.32 $134.97 $137.67 $137.67 $137.67 221 2" Meter $180.79 $184.41 $188.09 $191.86 $195.69 $199.61 $203.60 $207.67 $211.82 $211.82 $211.82 222 3" Meter $532.49 $543.14 $554.00 $565.08 $576.38 $587.91 $599.67 $611.66 $623.90 $623.90 $623.90 223 4" Meter $1,047.78 $1,068.74 $1,090.11 $1,111.91 $1,134.15 $1,156.83 $1,179.97 $1,203.57 $1,227.64 $1,227.64 $1,227.64 224 225 Commodity Charge 226 Residential, Multi-Family & Landscape 227 Tier 1 $1.286 $1.312 $1.338 $1.365 $1.392 $1.420 $1.448 $1.477 $1.507 $1.507 $1.507 228 Tier 2 $2.255 $2.300 $2.346 $2.393 $2.441 $2.490 $2.539 $2.590 $2.642 $2.642 $2.642 229 Tier 3 $3.235 $3.300 $3.366 $3.433 $3.502 $3.572 $3.643 $3.716 $3.790 $3.790 $3.790 230 Tier 4 $7.597 $7.749 $7.904 $8.062 $8.223 $8.388 $8.555 $8.727 $8.901 $8.901 $8.901 231 Commercial, Industrial, Ag, Domestic, and Other 232 Tier 1 $2.044 $2.085 $2.127 $2.169 $2.212 $2.257 $2.302 $2.348 $2.395 $2.395 $2.395 233 Tier 2 $3.235 $3.300 $3.366 $3.433 $3.502 $3.572 $3.643 $3.716 $3.790 $3.790 $3.790 234 Tier 3 $7.597 $7.749 $7.904 $8.062 $8.223 $8.388 $8.555 $8.727 $8.901 $8.901 $8.901 235 236 LAFCO Murrieta FMSR Financial Model Page 23 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES 237 Existing Santa Rosa Division Capacity Charge Schedule 238 239 Santa Rosa District Projected 240 Capacity Charge 7/1/2019 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 241 5/8" Meter $1,700 $1,742.50 $1,786.06 $1,830.71 $1,876.48 $1,923.39 $1,971.48 $2,020.77 $2,071.28 $2,123.07 $2,176.14 242 3/4" Meter $2,537 $2,600.43 $2,665.44 $2,732.07 $2,800.37 $2,870.38 $2,942.14 $3,015.70 $3,091.09 $3,168.37 $3,247.57 243 1" Meter $4,313 $4,420.83 $4,531.35 $4,644.63 $4,760.74 $4,879.76 $5,001.76 $5,126.80 $5,254.97 $5,386.35 $5,521.00 244 1.5" Meter $8,372 $8,581.30 $8,795.83 $9,015.73 $9,241.12 $9,472.15 $9,708.95 $9,951.68 $10,200.47 $10,455.48 $10,716.87 245 2" Meter $13,445 $13,781.13 $14,125.65 $14,478.79 $14,840.76 $15,211.78 $15,592.08 $15,981.88 $16,381.43 $16,790.96 $17,210.74 246 2" Turbine Meter $25,367 $26,001.18 $26,651.20 $27,317.48 $28,000.42 $28,700.43 $29,417.94 $30,153.39 $30,907.23 $31,679.91 $32,471.90 247 3" Meter $42,363 $43,422.08 $44,507.63 $45,620.32 $46,760.83 $47,929.85 $49,128.09 $50,356.29 $51,615.20 $52,905.58 $54,228.22 248 4" Meter $84,471 $86,582.78 $88,747.34 $90,966.03 $93,240.18 $95,571.18 $97,960.46 $100,409.47 $102,919.71 $105,492.70 $108,130.02 249 6" Meter $135,204 $138,584.10 $142,048.70 $145,599.92 $149,239.92 $152,970.92 $156,795.19 $160,715.07 $164,732.95 $168,851.27 $173,072.55 250 8" Meter or Larger $191,518 $196,305.95 $201,213.60 $206,243.94 $211,400.04 $216,685.04 $222,102.16 $227,654.72 $233,346.09 $239,179.74 $245,159.23 251 252 253 Projected Capacity Charge Revenues 254 255 Projected 256 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 257 Number of New Meters 258 5/8" 8 8 8 8 8 8 8 8 8 8 9 259 3/4" 31 31 32 32 33 33 34 35 35 36 36 260 1" 3 3 3 3 3 3 3 3 3 3 3 261 1.5" 2 2 2 2 2 2 2 2 2 2 2 262 2" 3 3 3 3 3 3 3 3 3 3 3 263 3" 0 0 0 0 0 0 0 0 0 0 0 264 4" 0 0 0 0 0 0 0 0 0 0 0 265 Total 47 47 48 48 49 49 50 51 51 52 53 266 267 Projected Capacity Charge Revenues 268 5/8" $13,940 $14,289 $14,646 $15,012 $15,387 $15,772 $16,166 $16,570 $16,985 $19,585 269 3/4" $80,613 $85,294 $87,426 $92,412 $94,723 $100,033 $105,549 $108,188 $114,061 $116,913 270 1" $13,262 $13,594 $13,934 $14,282 $14,639 $15,005 $15,380 $15,765 $16,159 $16,563 271 1.5" $17,163 $17,592 $18,031 $18,482 $18,944 $19,418 $19,903 $20,401 $20,911 $21,434 272 2" $41,343 $42,377 $43,436 $44,522 $45,635 $46,776 $47,946 $49,144 $50,373 $51,632 273 3" $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 274 4" $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 275 $166,322 $173,145 $177,474 $184,711 $189,329 $197,004 $204,945 $210,068 $218,489 $226,127 276 277 Projected Standby Charge Revenues 278 Methodology: RCWD Standby Charge Revenue = WMWD Standby Charge Revenue * (RCWD Standby Fee / WMWD Standby Fee) 279 280 $138,978 WMWD Standby Charge Revenue (Source: WMWD CY 2020 Water Rate Model) 281 $21 WMWD Standby Charge, $/acre or $/parcel if less than one acre (Source: 5/15/19 letter from WMWD GM to WMWD Board) 282 $69.92 RCWD Standby Charge, $/acre or $/parcel if less than one acre (Source: RCWD Customer Guide - Rates & Charges) 283 284 $462,730.56 RCWD Standby Charge Revenue 285 286 LAFCO Murrieta FMSR Financial Model Page 24 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES 287 Projected Ad Valorem Tax Revenues and Projected Revenue-Neutral Rate Surcharge Calculation 288 Methodology: Ad Valorem Tax Revenue = Ad Valorem Rate * Assessed Value of Land. Ad valorem tax applied to entirety of service area, regardless of whether it is served by RCWD or not. 289 290 $0.50 Ad Valorem Rate, $/ $100 assessed land value (Source: RCWD Customer Guide - Rates & Charges) 291 $407,892,695 Assessed Value of Land (Source: City of Murrieta, spreadsheet filename StudyAreaLandValue20190423, analyzed by West Yost to include customers served by WMWD. 292 293 $2,039,463 Annual Ad Valorem Tax Revenue 294 295 Check of Water Rate Revenues and Ad Valorem Revenues from RCWD (Entire District and Santa Rosa Division) to compare magnitude of Ad Valorem vs water rates 296 297 298 Water Rate Revenue (Santa Rosa Rates Applied to Murrieta Study Area) FY 19/20 Budget Entire RCWD District 299 Monthly Service Charge $1,862,904 Water Revenue + Monthly Service Charges $61,973,719 pdf page 61 300 Commodity Charge $2,115,628 Reclass from Non-Operating $10,381,868 pdf page 61 301 Standby Charge $462,731 Energy Charges $3,010,786 pdf page 64 302 Total $4,441,262 Ad Valorem Assessments $25,957,000 page 213 303 1% Assessments $17,951,900 District's share of the 1% property tax that is levied by the County 304 based on land value and distributed to agencies 305 306 FY 19/20 Budget Santa Rosa Division 307 Water Revenue + Monthly Service Charges $27,969,071 page 67 308 Reclass from Non-Operating $3,909,256 page 67 309 Energy Charges $1,735,144 page 67 310 Ad Valorem Assessments $8,834,000 page 213 311 1% Assessments $2,741,100 District's share of the 1% property tax that is levied by the County 312 based on land value and distributed to agencies 313 314 Conclusion: in the Murrieta Study Area, ad valorem revenues would be about 87% of monthly service charge + commodity charge revenues. 315 In RCWD's Santa Rosa Division, ad valorem revenues are ~1/3 of water rate revenues. RCWD district as a whole, ad valorem revenues are ~40% of water rate revenues. 316 Why for Murrieta Study Area are ad valorem revenues a higher % of water rate revenues than in the RCWD service area? Is there more land value in the Murrieta Study Area that is 317 not connected to the water system? Thereby subject to an ad valorem fee but not paying water rates? 318 319 Calculation of Revenue-Neutral Rate Surcharge 320 321 Note: In the event an ad valorem tax is not adopted, RCWD staff indicated that RCWD would adopt a revenue-neutral rate surcharge. Any such decision is a policy 322 decision that must be made by the RCWD Board of Directors, and that decision has not yet been made. For the purposes of this analysis, RCWD staff indicated that a revenue-neutral rate surcharge would be 323 charged to water system customers. 324 325 $0.50 Ad Valorem Rate, $/ $100 assessed land value (Source: RCWD Customer Guide - Rates & Charges) 326 $407,892,695 Assessed Value of Land by Customers Currently Served by WMWD (Source: City of Murrieta, spreadsheet filename StudyAreaLandValue20190423, as analyzed by West Yost) 327 328 $2,039,463 Annual Ad Valorem Tax Revenue from Customers Currently Served by WMWD 329 330 331 Monthly Service Charge Revenue $1,862,904 332 Commodity Charge Revenues $2,115,628 333 Ad Valorem Tax Revenue as a % of Monthly Service Charge and Commodity Charge Revenue 51.26%this is the percentage that Monthly Service Charges and Commodity Charges would need to go up 334 Ad Valorem Tax Revenue as a % of Monthly Service Charge Revenue 109.48%% increase to Monthly Service Charges if surcharge is not applied to Commodity Charges 335 336 LAFCO Murrieta FMSR Financial Model Page 25 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES 337 Projected Reserve Balance Transferred From WMWD to RCWD 338 339 Methodology: value of projected WMWD reserves as of 7/1/20, less outstanding debt principal. 340 341 Projected WMWD Reserves as of 7/1/20 342 WMWD Fund 230 $2,493,163 343 WMWD Fund 231 ($820,381) 344 WMWD Fund 233 $261,943 345 WMWD Fund 235 $2,378,668 346 Less Outstanding Debt (998,460)Source: WMWD 347 Less Outstanding Interfund Loan (2,000,000)Source: WWMD 348 Total $1,314,934 349 350 Table B-4d RCWD SCENARIO: FSMR Capital Improvements and Possible Cost Allocation to Existing Customers or Future Development Benefits $ to Future Development Basis Estimated Existing Funded by for Existing/ Cost, 2020 $ Customers or $ to Existing Funded by Developers or Development Projected Project (See Note 1) Development? Customers RCWD Imp. District Allocation Schedule 351 352 Buy-In to RCWD for Existing Customers (Note 2) $9,659,628 Existing Only $9,659,628 Note 3 353 Expansion CIP North of Murrieta Creek $17,120,000 Future Only $17,120,000 Note 4 Note 4 354 Expansion CIP South of Murrieta Creek $20,388,000 Future Only $20,388,000 Note 4 Note 4 355 RCWD Hydraulic Improvement $2,255,000 Future Only $2,255,000 Note 5 Note 8 356 Not Used. Previously Supply Improvements Through RCWD $0 Future Only Note 5 Note 8 357 Legacy (Small Diameter) Improvements $4,947,000 Existing Only $4,947,000 Note 6 Note 8 358 359 Total $54,369,628 $14,606,628 $2,255,000 $37,508,000 360 361 New Well No. 3, Not Included in Infrastructure Review $0 $0 $0 Note 9 362 363 364 Notes: 365 (1) Source: West Yost, October 2019 366 (2) RCWD anticipates requiring existing Murrieta Study Area customers to buy into RCWD facilities, including storage facilities, distribution facilities, 367 and accessing MWD connections. This buy-in eliminates the need to separately build storage. Calculation of the buy-in is as follows (effective 7/1/19 to 6/30/2020): 368 369 Number of Capacity Fee Buy-In 370 Meter Size Connections per Connection Charge 371 5/8" 482 $1,700 $819,400 372 3/4" 1,968 $2,537 $4,992,816 373 1" 172 $4,313 $741,836 374 1.5" 77 $8,372 $644,644 375 2" 161 $13,445 $2,164,645 376 3" 5 $25,367 $126,835 377 4" 4 $42,363 $169,452 378 Total $9,659,628 379 380 (3) No cost is assigned to future development. Storage needs for future development will be provided by RCWD and funded via Capacity Fees paid by future development. 381 (4) Expansion of water system. Project is not needed unless there is development. Schedule depends on when development occurs. 382 (5) Needed to accommodate future water demands from growth. Project is not needed unless there is development. 383 (6) These improvements are required even if there is no future development. Assume improvements will be completed between 2020 and 2025. 384 (7) Schedule depends on development, but assume improvements will be completed between 2020 and 2025. 385 (8) Assume improvements will be completed between 2020 and 2025. 386 (9) Project Identified by WMWD but RCWD would not complete this project (RCWD, 2/18/2020). However, since the local water production is increased, it is assumed 387 for the purposes of this analysis that RCWD would in fact include this project. LAFCO Murrieta FMSR Financial Model Page 26 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES Table B-4e RCWD SCENARIO: Potential Pay-As-You-Go Capital Expenses and Potential Debt Service Expenses Potential Funding Projected Infrastructure Review Projects + RCWD System Buy-In + New Well No. 3 Method (1) FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Note 388 Buy-In to RCWD for Existing Customers Debt $614,479 $614,479 $614,479 $614,479 $614,479 $614,479 $614,479 $614,479 $614,479 $614,479 2 389 Expansion CIP North of Murrieta Creek Developer or Improvement District 1 390 Expansion CIP South of Murrieta Creek Developer or Improvement District 1 391 RCWD Hydraulic Improvement Debt $150,710 $150,710 $150,710 $150,710 $150,710 $150,710 $150,710 $150,710 $150,710 3 392 Not Used. Previously Supply Improvements Through RCWD Pay-As-You-Go $0 $0 $0 $0 $0 3 393 Legacy (Small Diameter) Improvements Debt $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 $330,625 4 394 New Well No. 3, Not Included in Infrastructure Review Debt $0 $0 $0 $0 $0 $0 $0 4 395 Total $614,479 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 $1,095,814 (1) Decisions on how to fund improvement projects would be made by the RCWD Board of Directors. Information is provided here to indicate a potential funding method, and is subject to review and modification by RCWD staff and/or Board. Use of improvement districts is listed as a potential source for Expansion CIP projects based on input from staff. (2) Assumes 30 year debt at interest rate of 4%, staring in FY 25/26, with 10% added to project cost to cover capitalized bond reserve and issuance costs. Project cost escalated for inflation from 2019 dollars to 2025 dollars. (3) Project cost spread evenly between FY 20/21 and FY 24/25 and adjusted for inflation. Supply Improvements Through RCWD No Longer Proposed, due to RCWD's Opinion that Pipe Velocities Without This Improvement Being Acceptable. (4) Assumes 30 year debt at interest rate of 4%, staring in FY 21/22, with 10% added to project cost to cover capitalized bond reserve and issuance costs. Project cost escalated for inflation from 2019 dollars to 2021 dollars, except New Well 3 (FY 23/24 $) Table B-4f RCWD SCENARIO: Potential Capital Funding for Facilities That Benefit Future Development FMSR Capital Projects How Growth Pays for Growth 396 Expansion CIP North of Murrieta Creek Developer or Improvement District 397 Expansion CIP South of Murrieta Creek Developer or Improvement District 398 Hydraulic Improvement, Pipelines RCWD funds project; cost incorporated into Connection Fee. Future development pays Connection Fees. 399 Hydraulic Improvement, VFD @ Alson BPS RCWD funds project; cost incorporated into Connection Fee. Future development pays Connection Fees. 400 Supply Improvements Through RCWD Not Applicable. No Supply Improvements Needed 401 Fireflow Improvements Not applicable. Not growth related LAFCO Murrieta FMSR Financial Model Page 27 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 RCWD Scenario Table B-4 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis RCWD SCENARIO TABLES Table B-4g RCWD Scenario: Projected Total Water Cost Calculation Projected Notes FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 1, 2, 3 402 Single Family Residence (3/4" Meter; 18 ccf/month; $80,000 land value) 403 Monthly Service Charge $44.92 $45.82 $46.74 $47.67 $48.62 $49.60 $50.59 $51.60 $51.60 $51.60 404 Tier 1 Commodity Charge, $/hcf $1.31 $1.34 $1.36 $1.39 $1.42 $1.45 $1.48 $1.51 $1.51 $1.51 405 Tier 2 Commodity Charge, $/hcf $2.30 $2.35 $2.39 $2.44 $2.49 $2.54 $2.59 $2.64 $2.64 $2.64 406 407 Monthly Water Bill (Service Charge + 8*Tier 1 Charge + 10*Tier 2 Charge) $78.42 $79.98 $81.58 $83.22 $84.88 $86.58 $88.31 $90.07 $90.07 $90.07 408 409 Standby Charge, $/month $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 410 411 Ad Valorem Tax Calculation 412 Valuation (FY 20/21 Dollars, Adjusted for Inflation in Subsequent Years) $80,000 $82,000 $84,050 $86,151 $88,305 $90,513 $92,775 $95,095 $97,472 $99,909 413 Annual Ad Valorem Rate ($ per $100 land value) $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 414 Ad Valorem Tax per Month $33.33 $34.17 $35.02 $35.90 $36.79 $37.71 $38.66 $39.62 $40.61 $41.63 415 416 Revenue Neutral Rate Surcharge 417 % Rate Surcharge (applied to FY 19/20 Bill) 51.26% 418 $ Rate Surcharge (55.42% of FY 19/20 Monthly Bill, Increased for Inflation in Subsequent Yrs) $40.20 $41.20 $42.23 $43.29 $44.37 $45.48 $46.62 $47.78 $48.98 $50.20 419 Inflation is due to projected inflationary increase in property values 420 421 Commercial Account (2" Meter; 125 ccf/month; $200,000 land value, 1 acre) 2, 4, 5 422 Monthly Service Charge, $/month $184.41 $188.09 $191.86 $195.69 $199.61 $203.60 $207.67 $211.82 $211.82 $211.82 423 Tier 1 Commodity Charge, $/hcf $2.08 $2.13 $2.17 $2.21 $2.26 $2.30 $2.35 $2.39 $2.39 $2.39 424 Monthly Water Bill (Service Charge + 100*Tier 1 Charge) $445.02 $453.92 $462.99 $472.25 $481.70 $491.33 $501.16 $511.18 $511.18 $511.18 425 426 Standby Charge, $/month $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 $5.83 427 428 Ad Valorem Tax Calculation 429 Valuation (FY 20/21 Dollars, Adjusted for Inflation in Subsequent Years) $200,000 $205,000 $210,125 $215,378 $220,763 $226,282 $231,939 $237,737 $243,681 $249,773 430 Annual Ad Valorem Rate ($ per $100 land value) $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 431 Ad Valorem Tax per Month $83.33 $85.42 $87.55 $89.74 $91.98 $94.28 $96.64 $99.06 $101.53 $104.07 432 433 Revenue Neutral Rate Surcharge 434 % Rate Surcharge (applied to FY 19/20 Bill) 51.26% 435 $ Rate Surcharge (89.32% of FY 19/20 Monthly Bill, Increased for Inflation in Subsequent Yrs) $228.12 $233.83 $239.67 $245.66 $251.80 $258.10 $264.55 $271.17 $277.95 $284.89 Notes: (1) Both RCWD and WMWD use budget based rates. For single-family residences, of the 18 ccf/month use, estimate 8 ccf/month in Tier 1 and remainder of water use in Tier 2. No Tier 3 or Tier 4 use. For the commercial account example, 1,500 ccf/year (125 ccf/month) is the average water use for WMWD's customers in the Study Area with 2" meters, as reported by WMWD (1/21/2020) (2) RCWD adjusts rates on July 1 of each year. The monthly bills shown in this table are for the entire fiscal year. (3) $80,000 is used as an example land value for single-family residences based on qualitative review of assessor data provided by the City of Murrieta. (4) WMWD and RCWD have different tier structures for non-residential customers. For RCWD, all water use is projected to be in Tier 1. (5) $200,000 is used as an example land value for commercial property based on qualitative review of assessor data provided by the City of Murrieta. LAFCO Murrieta FMSR Financial Model Page 28 of 51 B4 RCWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES Table B-5a EMWD SCENARIO: Projected Operating Statement: Sources of Funds Projected Line FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 1 Beginning Reserve Balance $1,314,934 $1,746,478 $2,240,672 $2,783,083 $3,377,960 $4,029,623 $4,742,899 $5,523,053 $6,375,447 $7,306,146 1 2 3 Sources of Funds 4 Methodology: Initially, transferred customers will be charged WMWD's rate schedule. WMWD's rates are higher than EMWD's rates. The difference in rate revenues between WMWD's and EMWD's rates will be used to pay off the acquisition balance. 5 After the acquisition balance is paid off, transferred customers will be charged EMWD's rate schedule. 6 7 Step 1. Rate Revenues WMWD Rate Schedule as Adjusted by EMWD 8 Water Rate Revenues at WMWD CY 2020 Rates 5,539,097 5,628,784 5,719,924 5,812,539 5,906,653 6,002,834 6,100,580 6,199,919 6,300,875 6,403,474 1 9 Less Rate Discount Offered by EMWD (20% of WMWD's Fixed Charge) (372,901) (379,151) (385,401) (391,758) (398,115) (404,578) (411,148) (417,717) (424,394) (431,147) 2 10 11 Additional Rate Revenues from Future EMWD Increases to Adjusted WMWD Rates 12 Fiscal % of Water Months 13 Year Rate Revenue of Revenue 14 FY 20/21 3.8% 6 98,158 199,486 202,712 205,990 209,324 212,734 216,198 219,724 223,306 226,948 3 15 FY 21/22 3.8% 6 103,533 210,415 213,817 217,279 220,818 224,414 228,073 231,792 235,572 16 FY 22/23 3.8% 6 109,205 221,942 225,535 229,209 232,942 236,740 240,600 244,524 17 FY 23/24 3.8% 6 115,188 234,106 237,919 241,793 245,736 249,743 253,816 18 FY 24/25 3.8% 6 121,501 246,960 250,982 255,074 259,233 263,461 19 FY 25/26 3.8% 6 128,172 260,519 264,767 269,084 273,473 20 FY 26/27 3.8% 6 135,209 274,828 279,309 283,865 21 FY 27/28 3.8% 6 142,636 289,923 294,651 22 FY 28/29 0.0% 6 0 0 23 FY 29/30 0.0% 6 0 24 Total Additional Rate Revenue (Monthly Service Charges, Commodity Charges) $98,158 $303,019 $522,332 $756,937 $1,007,745 $1,275,812 $1,562,057 $1,867,578 $2,042,990 $2,076,310 25 26 Subtotal Rate Revenues: WMWD Rate Schedule as Adjusted by EMWD $5,264,354 $5,552,652 $5,856,854 $6,177,717 $6,516,283 $6,874,068 $7,251,490 $7,649,779 $7,919,471 $8,048,638 27 28 Step 2: Rate Revenues, EMWD Rates $4,623,838 $4,859,573 $5,087,179 $5,325,945 $5,576,181 $5,839,134 $6,115,057 $6,404,315 $6,707,890 $7,026,520 29 Methodology: Use EMWD Rates That Have Been Adopted Thru CY 2021. In Subsequent Years Include Projected Inflationary Rate Increases. See line 182 below: 30 31 Step 3: Determine Whether to Use WMWD or EMWD Rates, Based on Whether the Acquisition Balance is Paid Off 32 Beginning Year Acquisition Balance $11,970,446 $11,329,930 $10,636,851 $9,867,176 $9,015,403 $8,075,300 $7,040,367 $5,903,934 $4,658,469 $3,446,888 33 Define Which Rate Structure to Use WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj 34 35 Step 4: Determine the Projected Rate Revenue 36 Projected Rate Revenue Under EMWD Rates Used to Pay Expenses $4,623,838 $4,859,573 $5,087,179 $5,325,945 $5,576,181 $5,839,134 $6,115,057 $6,404,315 $6,707,890 $7,026,520 37 (Delta Between Adjusted WMWD Rates and EMWD Rates Used to Pay Acquisition Balance Down) 38 39 Non-Rate Revenue 40 Non-Operating Revenues 41 Property Tax (1% Share) Assume WMWD's small property tax rev does not transfer 0 0 0 0 0 0 0 0 0 0 42 Operating Revenues 43 Interest Income 26,299 34,930 44,813 55,662 67,559 80,592 94,858 110,461 127,509 146,123 44 Delinquent Penalties (Assumed Same as WMWD) 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 53,045 45 Standby Charge Revenues 92,652 92,652 92,652 92,652 92,652 92,652 92,652 92,652 92,652 92,652 46 Other - New Service Set Up & Meter Repair 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 4,244 47 Other Revenues 48 Total Non-Rate Revenue $176,240 $184,871 $194,754 $205,603 $217,500 $230,533 $244,799 $260,402 $277,450 $296,064 49 50 Total Revenues Excluding Paydown of Acquisition Balance $4,800,078 $5,044,443 $5,281,933 $5,531,547 $5,793,681 $6,069,667 $6,359,856 $6,664,717 $6,985,340 $7,322,584 LAFCO Murrieta FMSR Financial Model Page 29 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES Table B-5b EMWD SCENARIO Projected Operating Statement: Uses of Funds, Projected Payoff of Acquisition Balance, and Cumulative FPC Revenues Projected FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 51 Uses of Funds 52 53 Estimated Cost to Provide Water Service, Including O&M, Debt Service, Capital, and OPEB (Excludes Capital Required to Bring System to Operational Parity) 54 Capital required to bring system to operational parity assumed for the purposes of this analysis to be the portion of the West Yost identified capital improvements that benefits existing customers. 55 56 Cost to Provide Water Service, $/AF (see below) $1,830 $1,875 $1,922 $1,970 $2,019 $2,070 $2,122 $2,175 $2,229 $2,285 4 57 Number of AF 2,388 2,426 2,466 2,506 2,546 2,588 2,630 2,673 2,716 2,760 5 58 59 Cost to provide water services $4,368,533 $4,550,249 $4,739,523 $4,936,670 $5,142,018 $5,356,391 $5,579,702 $5,812,323 $6,054,641 $6,307,062 60 61 62 Total Uses of Funds $4,368,533 $4,550,249 $4,739,523 $4,936,670 $5,142,018 $5,356,391 $5,579,702 $5,812,323 $6,054,641 $6,307,062 63 64 End of Year Balance $1,746,478 $2,240,672 $2,783,083 $3,377,960 $4,029,623 $4,742,899 $5,523,053 $6,375,447 $7,306,146 $8,321,667 65 Math Check, should equal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 66 67 68 Projected 69 Projected Payoff of Acquisition Balance FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 70 Beginning Year Acquisition Balance $11,970,446 $11,329,930 $10,636,851 $9,867,176 $9,015,403 $8,075,300 $7,040,367 $5,903,934 $4,658,469 $3,446,888 71 72 Calculation of Acquisition Balance Paydown Amount 73 Rate Revenues Under WMWD Rates (Including EMWD Discount and Rate Increases) $5,264,354 $5,552,652 $5,856,854 $6,177,717 $6,516,283 $6,874,068 $7,251,490 $7,649,779 $7,919,471 $8,048,638 74 Less Rate Revenues Under EMWD Rates (See Table A4-b Below) ($4,623,838) ($4,859,573) ($5,087,179) ($5,325,945) ($5,576,181) ($5,839,134) ($6,115,057) ($6,404,315) ($6,707,890) ($7,026,520) 75 Acquisition Balance Paydown Amount $640,516 $693,079 $769,675 $851,773 $940,102 $1,034,934 $1,136,433 $1,245,465 $1,211,581 $1,022,118 76 77 Ending Year Acquisition Balance $11,329,930 $10,636,851 $9,867,176 $9,015,403 $8,075,300 $7,040,367 $5,903,934 $4,658,469 $3,446,888 $2,424,771 78 79 80 Projected 81 Cumulative FPC Revenues FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 82 Annual FPC Revenues $473,692 $491,314 $503,597 $522,259 $535,316 $555,078 $575,494 $589,881 $611,498 $633,827 83 Cumulative FPC Revenues $473,692 $965,007 $1,468,604 $1,990,863 $2,526,179 $3,081,257 $3,656,751 $4,246,632 $4,858,130 $5,491,958 84 85 Notes: 86 (1) Calculation of reserve balance to be transferred is shown below and represents projected 7/1/2020 WMWD reserves less outstanding WMWD debt. 87 (2) EMWD is proposing an initial rate discount of 20% of WMWD's fixed charge. See line 337below for the calculation of this revenue adjustment. 88 (3) Both EMWD and WMWD adjust rates on January 1 of each year. The first increase for future EMWD increases to Adjusted WMWD rates would occur on January 1, 2021. 89 (4) FY 20/21 per Acre Foot demand expense estimated in Table B-5c below. Subsequent years adjusted for inflation per assumptions in Table B-1. 90 (5) FY 20/21 number of Meter Equivalents estimated in Table B-2. Subsequent years adjusted for growth per assumptions in Table B-2. 91 92 LAFCO Murrieta FMSR Financial Model Page 30 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES Table B-5c EMWD SCENARIO: Revenue Calculations This Table Contains: Line Number Subject 94 Number of Connections per Meter Size (See Table B-2) 102 Comparison of EMWD and WMWD Budget-Based Rate Tiers 124 Seasonal Use of Water in Murrieta Study Area (Source: WMWD Water Use Data, See Table B-3) 134 Projected Water Use by Tier, ccf/year, All Residential Customers, When Calculating Revenues Under Adjusted WMWD Rates and Monthly Bills Under Adjusted WMWD Rates 152 Projected Water Use by EMWD Tier, ccf/year, Non-Residential 163 EMWD Adopted Water Rates Through Calendar Year 2021, Projected Rates through FY 29/30, and Rate Revenue Calculation Through Calendar Year 2021 309 Projected Rate Revenues Under EMWD Rates 337 Adjustment to Revenues Where EMWD Applies WMWD Rates with 20% Discount on Fixed Charge 379 Reserve Balance Transferred Over 393 Projected Financial Participation Charge Revenue Calculation 430 Standby Charge Revenue Calculation Projected FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 93 Number of Connections per Meter Size (See Table B-2) 94 5/8" 482 490 498 506 514 522 530 538 546 554 563 95 3/4" 1,968 1,999 2,031 2,063 2,096 2,129 2,163 2,198 2,233 2,269 2,305 96 1" 172 175 178 181 184 187 190 193 196 199 202 97 1.5" 77 79 81 83 85 87 89 91 93 95 97 98 2" 161 164 167 170 173 176 179 182 185 188 191 99 3" 5 5 5 5 5 5 5 5 5 5 5 100 4" 2 2 2 2 2 2 2 2 2 2 2 101 102 Comparison of EMWD and WMWD Budget-Based Rate Tiers 103 - WMWD has five tiers, EMWD has four tiers. For CII, WMWD has five tiers, EMWD has three. Projecting revenues from EMWD rates requires estimating water sales by EMWD tiers. 104 - Over 60% of Murrieta Division Water Use is Single-Family. A comparison of tier definitions is as follows: 105 - Also, from Table B-2, 91% of Murrieta Division water use is in either Tier 1 or Tier 2 106 107 WMWD EMWD WMWD EMWD 108 Tier Residential Residential Non-ResidentialNon-Residential 109 Tier 1 100% IWB 0 - 20% TWB 43% TWB 100% TWB 110 Tier 2 100% OWB 20 - 100% TWB 57% TWB 101-150% TWB 111 Tier 3 25% TWB 101-150% TWB 25% TWB Above Tier 2 112 Tier 4 25% TWB Above Tier 3 25% TWB 113 Tier 5 Above Tier 4 Above Tier 4 114 115 Residential Non-Residential 116 EMWD Tier 1 Use ~ WMWD Tier 1 Use EMWD Tier 1 Use = WMWD Tier 1 + Tier 2 Use 117 EMWD Tier 2 Use ~ WMWD Tier 2 Use EMWD Tier 2 Use = WMWD Tier 3 + Tier 4 Use 118 EMWD Tier 3 Use = WMWD Tier 3 + Tier 4 Use EMWD Tier 3 Use = WMWD Tier 5 Use 119 EMWD Tier 4 Use = WMWD Tier 4 Use 120 121 EMWD Source: https://www.emwd.org/sites/default/files/file-attachments/emwd_prop_218_2019_residential_final_web.pdf, downloaded July 25, 2019 122 123 LAFCO Murrieta FMSR Financial Model Page 31 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 124 Seasonal Use of Water in Murrieta Study Area (Source: WMWD Water Use Data, See Table B-3) 125 126 WMWD Tier July - Dec Jan - June 127 Tier 1 54% 46% What this table means: according to data provided by WMWD, 54% of Tier 1 water use occurs between July and December, 128 Tier 2 59% 41% 61% of Tier 5 water use occurs between July and December, and 57% of total water use occurs between January and June. 129 Tier 3 66% 34% 130 Tier 4 64% 36% 131 Tier 5 61% 39% 132 Total 57% 43% 133 134 Projected Water Use by Tier, ccf/year, All Residential Customers, When Calculating Revenues Under Adjusted WMWD Rates and Monthly Bills Under Adjusted WMWD Rates 135 Projected 136 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 137 Tier 1 399,486 405,954 412,527 419,206 425,994 432,892 439,941 447,105 454,385 461,784 469,303 138 Tier 2 414,102 420,807 427,621 434,545 441,581 448,731 456,038 463,464 471,011 478,681 486,476 139 Tier 3 52,414 53,263 54,125 55,001 55,892 56,797 57,722 58,662 59,617 60,588 61,575 140 Tier 4 33,598 34,142 34,695 35,257 35,828 36,408 37,001 37,604 38,216 38,838 39,470 141 Total 899,600 914,166 928,968 944,009 959,295 974,828 990,702 1,006,835 1,023,229 1,039,891 1,056,824 142 143 Projected Water Use by Tier, ccf/year, All Residential Customers, When Calculating Revenues Under EMWD Rates and Monthly Bills Under EMWD Rates 144 Projected 145 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 146 Tier 1 162,718 165,352 168,030 170,750 173,515 176,325 179,196 182,114 185,079 188,093 191,156 147 Tier 2 650,870 661,409 672,118 683,001 694,060 705,298 716,783 728,455 740,317 752,372 764,623 148 Tier 3 52,414 53,263 54,125 55,001 55,892 56,797 57,722 58,662 59,617 60,588 61,575 149 Tier 4 33,598 34,142 34,695 35,257 35,828 36,408 37,001 37,604 38,216 38,838 39,470 150 Total 899,600 914,166 928,968 944,009 959,295 974,828 990,702 1,006,835 1,023,229 1,039,891 1,056,824 151 152 Projected Water Use by EMWD Tier, ccf/year, Non-Residential 153 Projected 154 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 155 Tier 1 92,412 93,909 95,430 96,975 98,545 100,141 101,772 103,429 105,113 106,825 108,564 156 Tier 2 7,886 8,013 8,143 8,275 8,409 8,545 8,684 8,825 8,969 9,115 9,263 157 Tier 3 3,802 3,863 3,926 3,990 4,055 4,121 4,188 4,256 4,325 4,395 4,467 158 Total 104,100 105,785 107,499 109,240 111,009 112,807 114,644 116,510 118,407 120,335 122,294 159 160 Total Murrieta Division Water Use 1,003,700 1,019,951 1,036,467 1,053,249 1,070,304 1,087,635 1,105,346 1,123,345 1,141,636 1,160,226 1,179,118 161 162 163 EMWD Adopted Water Rates Through Calendar Year 2021, Projected Rates through FY 29/30, and Rate Revenue Calculation Through Calendar Year 2021 164 165 EMWD Daily Service Charge 166 Sources of Data: 167 https://www.emwd.org/sites/default/files/file-attachments/emwd_prop_218_2019_residential_final_web.pdf 168 https://www.emwd.org/sites/default/files/file-attachments/emwd_prop_218_2019_commercial_final_web.pdf 169 170 Daily Service Adopted Adopted Adopted Adopted Adopted 171 Charge Schedule ($/day) CY 2017 CY 2018 CY 2019 CY 2020 CY 2021 172 5/8" Meter $0.39 $0.39 $0.42 $0.44 $0.46 173 3/4" Meter $0.42 $0.44 $0.46 174 1" Meter $0.57 $0.60 $0.63 175 1.5" Meter $1.58 $1.65 $1.73 176 2" Meter $2.45 $2.57 $2.68 177 3" Meter $4.77 $5.00 $5.23 178 4" Meter $7.38 $7.73 $8.08 179 6" Meter $14.63 $15.33 $16.02 LAFCO Murrieta FMSR Financial Model Page 32 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 180 Daily Service Charge Revenues 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 181 Through FY 21/22 (See Notes 1 and 2) FY 19/20 FY 19/20 FY 19/20 FY 20/21 FY 20/21 FY 20/21 FY 21/22 FY 21/22 FY 21/22 182 5/8" Meter $36,945 $38,705 $75,650 $39,347 $41,136 $80,483 $41,807 $41,807 $83,614 183 3/4" Meter $150,847 $158,030 $308,878 $160,520 $167,816 $328,336 $170,502 $170,502 $341,005 184 1" Meter $17,892 $18,834 $36,726 $19,163 $20,121 $39,283 $20,466 $20,466 $40,931 185 1.5" Meter $22,203 $23,187 $45,390 $23,789 $24,942 $48,731 $25,574 $25,574 $51,147 186 2" Meter $71,987 $75,513 $147,500 $76,920 $80,212 $157,133 $81,680 $81,680 $163,359 187 3" Meter $4,353 $4,563 $8,915 $4,563 $4,772 $9,335 $4,772 $4,772 $9,545 188 4" Meter $2,694 $2,821 $5,515 $2,821 $2,949 $5,771 $2,949 $2,949 $5,898 189 Total $628,574 $669,071 $695,500 190 191 Notes: 192 (1) Annual revenues are the daily charge multiplied by 365 times the projected number of customers. 193 (2) EMWD has adopted rate increases only through CY 2021, which covers the first half of FY 21/22. This table projects FY 21/22 revenues at the CY 2021 rate. 194 Rate adjustments effective for CY 2022 are projected in Table B-5a above. 195 196 197 Daily Service Adopted Adopted Projected Projected Projected Projected Projected Projected Projected Projected Projected 198 Charge Schedule ($/month) CY 2020 CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 199 5/8" Meter $13.38 $13.99 $14.34 $14.70 $15.07 $15.44 $15.83 $16.23 $16.63 $17.05 $17.47 200 3/4" Meter $13.38 $13.99 $14.34 $14.70 $15.07 $15.44 $15.83 $16.23 $16.63 $17.05 $17.47 201 1" Meter $18.25 $19.16 $19.64 $20.13 $20.64 $21.15 $21.68 $22.22 $22.78 $23.35 $23.93 202 1.5" Meter $50.19 $52.62 $53.94 $55.28 $56.67 $58.08 $59.54 $61.02 $62.55 $64.11 $65.72 203 2" Meter $78.17 $81.52 $83.55 $85.64 $87.78 $89.98 $92.23 $94.53 $96.90 $99.32 $101.80 204 3" Meter $152.08 $159.08 $163.06 $167.13 $171.31 $175.59 $179.98 $184.48 $189.10 $193.82 $198.67 205 4" Meter $235.12 $245.77 $251.91 $258.21 $264.66 $271.28 $278.06 $285.01 $292.14 $299.44 $306.93 206 6" Meter $466.29 $487.28 $499.46 $511.94 $524.74 $537.86 $551.31 $565.09 $579.22 $593.70 $608.54 207 208 209 Projected Daily Service Projected 210 Charge Revenues FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 211 5/8" Meter $80,483 $84,659 $88,170 $91,803 $95,563 $99,453 $103,478 $107,642 $111,950 $116,612 212 3/4" Meter $328,336 $345,267 $359,475 $374,356 $389,756 $405,880 $422,759 $440,228 $458,508 $477,428 213 1" Meter $39,283 $41,443 $43,195 $45,008 $46,886 $48,829 $50,840 $52,921 $55,074 $57,302 214 1.5" Meter $48,731 $51,787 $54,392 $57,095 $59,900 $62,809 $65,826 $68,954 $72,198 $75,561 215 2" Meter $157,133 $165,401 $172,582 $180,018 $187,718 $195,691 $203,945 $212,490 $221,334 $230,487 216 3" Meter $9,335 $9,664 $9,906 $10,153 $10,407 $10,667 $10,934 $11,207 $11,488 $11,775 217 4" Meter $5,771 $5,972 $6,121 $6,274 $6,431 $6,592 $6,757 $6,926 $7,099 $7,276 218 Total $669,071 $704,194 $733,841 $764,709 $796,661 $829,921 $864,538 $900,368 $937,650 $976,442 219 220 221 EMWD Fixed Charge for Water Supply and Reliability Capital Projects 222 Sources of Data: 223 https://www.emwd.org/sites/default/files/file-attachments/emwd_prop_218_2019_residential_final_web.pdf 224 https://www.emwd.org/sites/default/files/file-attachments/emwd_prop_218_2019_commercial_final_web.pdf 225 The charge is shown on the EMWD website as "per Equivalent Meter Size". EMWD Equivalent Meter factors are shown in Table B-2 226 227 Monthly Fixed Charge for Water Adopted Adopted Adopted Projected Projected Projected Projected Projected Projected Projected Projected Projected 228 Supply and Reliability CY 2019 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 229 5/8" Meter $3.65 $3.95 $4.26 $4.37 $4.48 $4.59 $4.70 $4.82 $4.94 $5.06 $5.19 $5.32 230 3/4" Meter $3.65 $3.95 $4.26 $4.37 $4.48 $4.59 $4.70 $4.82 $4.94 $5.06 $5.19 $5.32 231 1" Meter $5.48 $5.93 $6.39 $6.55 $6.71 $6.88 $7.05 $7.23 $7.41 $7.60 $7.79 $7.98 232 1.5" Meter $18.25 $19.75 $21.30 $21.83 $22.38 $22.94 $23.51 $24.10 $24.70 $25.32 $25.95 $26.60 233 2" Meter $29.20 $31.60 $34.08 $34.93 $35.81 $36.70 $37.62 $38.56 $39.52 $40.51 $41.52 $42.56 234 3" Meter $58.40 $63.20 $68.16 $69.86 $71.61 $73.40 $75.24 $77.12 $79.04 $81.02 $83.05 $85.12 235 4" Meter $91.25 $98.75 $106.50 $109.16 $111.89 $114.69 $117.56 $120.49 $123.51 $126.60 $129.76 $133.00 LAFCO Murrieta FMSR Financial Model Page 33 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 236 237 238 Revenues, Monthly Fixed Charge for Capital 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 239 Through FY 21/22 (See Notes 1 and 2) FY 19/20 FY 19/20 FY 19/20 FY 20/21 FY 20/21 FY 20/21 FY 21/22 FY 21/22 FY 21/22 240 5/8" Meter $10,556 $11,423 $21,979 $11,613 $12,524 $24,137 $12,729 $12,729 $25,458 241 3/4" Meter $43,099 $46,642 $89,741 $47,376 $51,094 $98,471 $51,912 $51,912 $103,825 242 1" Meter $5,650 $6,115 $11,765 $6,221 $6,710 $12,931 $6,825 $6,825 $13,649 243 1.5" Meter $8,432 $9,125 $17,556 $9,362 $10,096 $19,458 $10,352 $10,352 $20,704 244 2" Meter $28,207 $30,526 $58,733 $31,094 $33,535 $64,629 $34,148 $34,148 $68,296 245 3" Meter $1,752 $1,896 $3,648 $1,896 $2,045 $3,941 $2,045 $2,045 $4,090 246 4" Meter $1,095 $1,185 $2,280 $1,185 $1,278 $2,463 $1,278 $1,278 $2,556 247 Total $205,702 $226,030 $238,577 248 249 Notes: 250 (1) Annual revenues are the monthly charge multiplied by 12 times the projected number of customers. 251 (2) EMWD has adopted rate increases only through CY 2021, which covers the first half of FY 21/22. This table projects FY 21/22 revenues at the CY 2021 rate. 252 Rate adjustments effective for CY 2022 are projected in Table B-5a above. 253 254 Projected Monthly Fixed Charge for Projected 255 Capital Projects Revenues FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 256 5/8" Meter $24,137 $25,776 $26,845 $27,951 $29,096 $30,280 $31,506 $32,773 $34,085 $35,505 257 3/4" Meter $98,471 $105,123 $109,448 $113,979 $118,668 $123,577 $128,716 $134,035 $139,601 $145,361 258 1" Meter $12,931 $13,820 $14,404 $15,009 $15,635 $16,283 $16,953 $17,647 $18,365 $19,108 259 1.5" Meter $19,458 $20,962 $22,017 $23,111 $24,246 $25,424 $26,645 $27,911 $29,224 $30,586 260 2" Meter $64,629 $69,150 $72,152 $75,261 $78,480 $81,813 $85,264 $88,836 $92,534 $96,361 261 3" Meter $3,941 $4,141 $4,244 $4,350 $4,459 $4,571 $4,685 $4,802 $4,922 $5,045 262 4" Meter $2,463 $2,588 $2,653 $2,719 $2,787 $2,857 $2,928 $3,001 $3,076 $3,153 263 Total $226,030 $241,559 $251,763 $262,380 $273,371 $284,804 $296,697 $309,006 $321,807 $335,118 264 265 266 EMWD Commodity Charge 267 268 Residential Adopted Adopted Adopted Projected Projected Projected Projected Projected Projected Projected Projected Projected 269 Commodity Charge CY 2019 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 270 Tier 1 $1.07 $1.10 $1.13 $1.16 $1.19 $1.22 $1.25 $1.28 $1.31 $1.34 $1.38 $1.41 271 Tier 2 $3.43 $3.53 $3.63 $3.72 $3.81 $3.91 $4.01 $4.11 $4.21 $4.31 $4.42 $4.53 272 Tier 3: Excessive Use $5.67 $5.84 $6.01 $6.16 $6.31 $6.47 $6.63 $6.80 $6.97 $7.14 $7.32 $7.51 273 Tier 4: Wasteful Use $11.59 $11.94 $12.30 $12.61 $12.92 $13.25 $13.58 $13.92 $14.26 $14.62 $14.99 $15.36 274 275 Non-Residential Adopted Adopted Adopted Projected Projected Projected Projected Projected Projected Projected Projected Projected 276 Commodity Charge CY 2019 CY 2020 CY 2021 CY 2022 CY 2023 CY 2024 CY 2025 CY 2026 CY 2027 CY 2028 CY 2029 CY 2030 277 Tier 1 $3.55 $3.66 $3.77 $3.86 $3.96 $4.06 $4.16 $4.27 $4.37 $4.48 $4.59 $4.71 278 Tier 2 $7.21 $7.43 $7.65 $7.84 $8.04 $8.24 $8.44 $8.66 $8.87 $9.09 $9.32 $9.55 279 Tier 3: Excessive Use $12.02 $12.38 $12.75 $13.07 $13.40 $13.73 $14.07 $14.43 $14.79 $15.16 $15.53 $15.92 280 281 282 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 283 FY 19/20 FY 19/20 FY 19/20 FY 19/20 FY 19/20 FY 19/20 284 Commodity Charge Revenues Residential Residential Residential Non-ResidentialNon-ResidentialNon-Residential 285 Tier 1 $93,750 $82,610 $176,361 $176,650 $156,106 $332,756 286 Tier 2 $1,321,670 $937,368 $2,259,039 $33,660 $23,904 $57,564 287 Tier 3 $196,669 $103,534 $300,202 $30,241 $15,920 $46,161 288 Tier 4 $247,620 $146,064 $393,684 289 Subtotal Commodity Charge Revenues $3,129,286 $436,481 290 LAFCO Murrieta FMSR Financial Model Page 34 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 291 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 292 FY 20/21 FY 20/21 FY 20/21 FY 20/21 FY 20/21 FY 20/21 293 Commodity Charge Revenues Residential Residential Residential Non-ResidentialNon-ResidentialNon-Residential 294 Tier 1 $97,939 $86,238 $184,177 $185,073 $163,402 $348,475 295 Tier 2 $1,382,227 $979,530 $2,361,757 $35,247 $25,009 $60,256 296 Tier 3 $205,846 $108,273 $314,119 $31,648 $16,176 $47,824 297 Tier 4 $259,227 $152,904 $412,131 298 Subtotal Commodity Charge Revenues $3,272,184 $456,554 299 300 1st Half of FY 2nd Half of FY Total FY 1st Half of FY 2nd Half of FY Total FY 301 FY 21/22 FY 21/22 FY 21/22 FY 21/22 FY 21/22 FY 21/22 302 Commodity Charge Revenues Residential Residential Residential Non-ResidentialNon-ResidentialNon-Residential 303 Tier 1 $102,240 $87,634 $189,873 $193,723 $166,048 $359,771 304 Tier 2 $1,444,399 $995,391 $2,439,790 $36,879 $25,415 $62,294 305 Tier 3 $215,266 $110,025 $325,291 $33,126 $16,931 $50,057 306 Tier 4 $271,368 $155,380 $426,749 307 Subtotal Commodity Charge Revenues $3,381,703 $472,122 308 309 Projected Rate Revenues Under EMWD Rates 310 311 Projected 312 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 313 Already Adopted EMWD Rates Through CY 2021 and Projected Rates 314 Residential Commodity Charges $3,272,184 $3,381,703 $3,436,456 $3,492,102 $3,548,646 $3,606,432 $3,665,161 $3,724,839 $3,785,494 $3,847,135 315 Non-Residential Commodity Charges $456,554 $472,122 $479,768 $487,537 $495,434 $503,501 $511,697 $520,028 $528,496 $537,099 316 Daily Service Charge $669,071 $704,194 $733,841 $764,709 $796,661 $829,921 $864,538 $900,368 $937,650 $976,442 317 Fixed Charge for Capital Projects $226,030 $241,559 $251,763 $262,380 $273,371 $284,804 $296,697 $309,006 $321,807 $335,118 318 319 Revenue from Projected EMWD Rate Increases after CY 2021 320 Fiscal % of Water Months 321 Year Rate Revenue of Revenue 322 323 FY 21/22 2.5% 6 CY 2022 59,995 122,546 125,168 127,853 130,616 133,452 136,356 139,336 142,395 324 FY 22/23 2.5% 6 CY 2023 62,805 128,297 131,049 133,882 136,789 139,765 142,820 145,955 325 FY 23/24 2.5% 6 CY 2024 65,752 134,325 137,229 140,208 143,259 146,390 149,604 326 FY 24/25 2.5% 6 CY 2025 68,842 140,660 143,714 146,841 150,050 153,344 327 FY 25/26 2.5% 6 CY 2026 72,088 147,306 150,512 153,801 157,177 328 FY 26/27 2.5% 6 CY 2027 75,495 154,274 157,646 161,107 329 FY 27/28 2.5% 6 CY 2028 79,066 161,587 165,134 330 FY 28/29 2.5% 6 CY 2029 82,813 169,263 331 FY 29/30 2.5% 6 CY 2030 86,747 332 Total Additional Rate Revenue (Monthly Service Charges, Commodity Charges $0 $59,995 $185,351 $319,217 $462,069 $614,475 $776,964 $950,073 $1,134,443 $1,330,726 333 334 Total Projected Rates Under EMWD Rate Structure $4,623,838 $4,859,573 $5,087,179 $5,325,945 $5,576,181 $5,839,134 $6,115,057 $6,404,315 $6,707,890 $7,026,520 335 336 LAFCO Murrieta FMSR Financial Model Page 35 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 337 Adjustment to Revenues Where EMWD Applies WMWD Rates with 20% Discount on Fixed Charge 338 339 Methodology: EMWD would charge the Murrieta Study Area customers WMWD's CY 2020 rates but would lower the fixed charge by 20%. 340 This information is used to calculate revenues based on the EMWD's Adjusted WMWD rates in Table B-5a, Line 9 above 341 Projected 342 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 343 Initial Reduction in WMWD Meter Charge, percent 20% 344 345 346 Meter Size WMWD's Calendar Year 2020 Meter Charge 347 5/8" Meter $32.00 $32.00 $32.00 $32.00 $32.00 $32.00 $32.00 $32.00 $32.00 $32.00 348 3/4" Meter $44.39 $44.39 $44.39 $44.39 $44.39 $44.39 $44.39 $44.39 $44.39 $44.39 349 1" Meter $68.56 $68.56 $68.56 $68.56 $68.56 $68.56 $68.56 $68.56 $68.56 $68.56 350 1.5" Meter $129.28 $129.28 $129.28 $129.28 $129.28 $129.28 $129.28 $129.28 $129.28 $129.28 351 2" Meter $154.50 $154.50 $154.50 $154.50 $154.50 $154.50 $154.50 $154.50 $154.50 $154.50 352 3" Meter $384.49 $384.49 $384.49 $384.49 $384.49 $384.49 $384.49 $384.49 $384.49 $384.49 353 4" Meter $744.16 $744.16 $744.16 $744.16 $744.16 $744.16 $744.16 $744.16 $744.16 $744.16 354 355 Meter Size Initial Difference Between EMWD's Adjusted WMWD Fixed Charge and WMWD's Fixed Charge (CY 2020 Rates) 356 5/8" Meter $6.40 $6.40 $6.40 $6.40 $6.40 $6.40 $6.40 $6.40 $6.40 $6.40 357 3/4" Meter $8.88 $8.88 $8.88 $8.88 $8.88 $8.88 $8.88 $8.88 $8.88 $8.88 358 1" Meter $13.71 $13.71 $13.71 $13.71 $13.71 $13.71 $13.71 $13.71 $13.71 $13.71 359 1.5" Meter $25.86 $25.86 $25.86 $25.86 $25.86 $25.86 $25.86 $25.86 $25.86 $25.86 360 2" Meter $30.90 $30.90 $30.90 $30.90 $30.90 $30.90 $30.90 $30.90 $30.90 $30.90 361 3" Meter $76.90 $76.90 $76.90 $76.90 $76.90 $76.90 $76.90 $76.90 $76.90 $76.90 362 4" Meter $148.83 $148.83 $148.83 $148.83 $148.83 $148.83 $148.83 $148.83 $148.83 $148.83 363 364 365 Change in Revenues Resulting from EMWD's Adjustment to WMWD Rates $372,901 $379,151 $385,401 $391,758 $398,115 $404,578 $411,148 $417,717 $424,394 $431,147 366 367 368 369 Meter Size Proposed EMWD Adjusted WMWD Meter Charge 370 5/8" Meter $25.60 $26.57 $27.58 $28.63 $29.72 $30.85 $32.02 $33.24 $33.24 $33.24 371 3/4" Meter $35.51 $36.86 $38.26 $39.72 $41.23 $42.79 $44.42 $46.11 $46.11 $46.11 372 1" Meter $54.85 $56.93 $59.10 $61.34 $63.67 $66.09 $68.60 $71.21 $71.21 $71.21 373 1.5" Meter $103.42 $107.35 $111.43 $115.67 $120.06 $124.63 $129.36 $134.28 $134.28 $134.28 374 2" Meter $123.60 $128.30 $133.17 $138.23 $143.49 $148.94 $154.60 $160.47 $160.47 $160.47 375 3" Meter $307.59 $319.28 $331.41 $344.01 $357.08 $370.65 $384.73 $399.35 $399.35 $399.35 376 4" Meter $595.33 $617.95 $641.43 $665.81 $691.11 $717.37 $744.63 $772.93 $772.93 $772.93 377 378 379 Reserve Balance Transferred Over 380 381 Methodology: value of projected WMWD reserves as of 7/1/20, less outstanding debt principal. 382 383 Projected WMWD Reserves and Outstanding Debt as of 7/1/20 384 WMWD Fund 230 $2,493,163 385 WMWD Fund 231 ($820,381) 386 WMWD Fund 233 $261,943 387 WMWD Fund 235 $2,378,668 388 Less Outstanding 2010 A&B Revenue Bond Principal (998,460)Source: WMWD via email, 11/20/19 389 Less Outstanding Interfund Loan (2,000,000) 390 Total $1,314,934 Represents amount transferred over to EMWD 391 392 LAFCO Murrieta FMSR Financial Model Page 36 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 393 Projected Financial Participation Charge Revenue Calculation 394 395 Current Financial Participation Charges Source: EMWD, per https://www.emwd.org/sites/main/files/file-attachments/fees_dsr_mtrs_ems_backflow.pdf?1577750076 396 Meter Size 7/1/2019 Range depending on type of meter, if applicable 397 5/8" Meter $5,501 Assume 5/8" meters are single-family residences with fire sprinklers that would be a 1" meters under EMWD ownership $5,501 398 3/4" Meter $5,501 Assume 3/4" meters are single-family residences with fire sprinklers that would be a 1" meters under EMWD ownership $5,501 399 1" Meter $5,501 Assume 1" meters are single-family residences with fire sprinklers that would be a 1" meters under EMWD ownership $5,501 400 1.5" Meter $27,505 Master Meter Multi-Jet $27,505 401 2" Meter $58,696 Sensus OMNI C2 meter $44,008 - $73,328 402 3" Meter $146,712 Sensus OMNI C2 meter $146,711.67 - $183,348.33 403 4" Meter $293,368 Sensus OMNI C2 meter $293,368.33 - $366,751.67 404 6" Meter $586,792 Sensus OMNI C2 meter $586,792 405 406 EMWD indexes its Financial Participation Charges to inflation, per page 55 of the EMWD Consolidated Schedule of Rates, Fees, and Charges (June 19, 2019). Projected FPC revenues in table below assume inflationary increases in EMWD's FPC. 407 408 Projected 409 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 410 Number of New Meters 411 5/8" 8 8 8 8 8 8 8 8 8 9 412 3/4" 31 32 32 33 33 34 35 35 36 36 413 1" 3 3 3 3 3 3 3 3 3 3 414 1.5" 2 2 2 2 2 2 2 2 2 2 415 2" 3 3 3 3 3 3 3 3 3 3 416 3" 0 0 0 0 0 0 0 0 0 0 417 4" 0 0 0 0 0 0 0 0 0 0 418 Total 47 48 48 49 49 50 51 51 52 53 419 420 Projected Financial Participation Charge Revenues 421 5/8" $45,108 $46,236 $47,392 $48,577 $49,791 $51,036 $52,312 $53,619 $54,960 $63,376 422 3/4" $174,794 $184,944 $189,567 $200,378 $205,388 $216,902 $228,864 $234,585 $247,320 $253,503 423 1" $16,916 $17,338 $17,772 $18,216 $18,672 $19,138 $19,617 $20,107 $20,610 $21,125 424 1.5" $56,385 $57,795 $59,240 $60,721 $62,239 $63,795 $65,390 $67,024 $68,700 $70,417 425 2" $180,489 $185,001 $189,626 $194,367 $199,226 $204,207 $209,312 $214,545 $219,909 $225,406 426 3" $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 427 4" $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 428 $473,692 $491,314 $503,597 $522,259 $535,316 $555,078 $575,494 $589,881 $611,498 $633,827 429 430 Standby Charge Revenue Calculation 431 Methodology: EMWD Standby Charge Revenue = WMWD Standby Charge Revenue * (EMWD Standby Fee / WMWD Standby Fee) 432 433 $138,978 WMWD Standby Charge Revenue (Source: WMWD CY 2020 Water Rate Model) 434 $21 WMWD Standby Charge, $/acre or $/parcel if less than one acre (Source: 5/15/19 letter from WMWD GM to WMWD Board) 435 $14.00 Proposed EMWD Standby Charge, $/acre (Source: policy question response from EMWD, 6/26/19) 436 437 $92,652 Projected EMWD Standby Charge Revenue LAFCO Murrieta FMSR Financial Model Page 37 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES Table B-5d EMWD SCENARIO: Preliminary Cost per Equivalent Meter to Provide Water Service Water Sewer Recycled Consolidated 438 Cost of Service (Funded by rates) FY 2020-21 439 Operating Expense 440 Purchased Water $78,021,000 $78,021,000 Source: EMWD, 1/23/2020 441 Groundwater Replenishment O&M $724,417 $724,417 Source: EMWD, 1/23/2020 442 Operations & Maintenance $20,335,266 $38,350,816 $2,608,412 $61,294,494 Source: EMWD, 1/23/2020 443 Energy $7,729,356 $4,980,895 $1,051,860 $13,762,111 Source: EMWD, 1/23/2020 444 Allocated Support Costs $24,850,322 $13,522,294 $4,036,068 $42,408,684 Source: EMWD, 1/23/2020 445 General and Admin Allocation $5,054,221 $9,387,048 $14,441,269 Source: EMWD, 1/23/2020 446 Subtotal $136,714,582 $66,241,053 $7,696,340 $210,651,975 447 448 Non-Operating Expense 449 Capital (R&R) (1) $13,239,287 $15,803,052 $1,327,997 $30,370,336 Source: EMWD, 1/23/2020 450 Debt Service (2) $4,047,495 $5,830,660 $1,279,880 $11,158,035 Source: EMWD, 1/23/2020 451 OPEB (ARC) $7,182,927 $11,817,073 $19,000,000 Source: EMWD, 1/23/2020 452 Subtotal $24,469,709 $33,450,786 $2,607,876 $60,528,371 453 454 Total Cost of Service by Operating Service $161,184,291 $99,691,839 $10,304,216 $271,180,346 455 456 457 EMS/EDU 155,000 255,000 NA NA Source: EMWD, 1/23/2020 458 Acre-Foot Supply 98,830 NA 48,000 146,830 Source: EMWD, 1/23/2020 459 Acre-Foot Demand 88,100 36,000 124,100 Source: EMWD, 1/23/2020 460 461 Cost per EMS/EDU $1,040 $391 462 Cost per Acre-Foot Supply $1,631 $215 $1,847 463 Cost per Acre-Foot Demand $1,830 <== Use this calculation; use demand as a denominator because it is applied to metered 464 water consumption to determine costs. 465 466 (1) Capital (R&R) 467 5-Year CIP (FY 2020-21 through FY 2024-25) 468 Replacement CIP $66,196,437 $79,015,261 $6,639,983 $151,851,681 Source: EMWD, 1/23/2020 469 Expansion CIP $166,930,603 $61,361,321 $18,121,516 $246,413,440 Source: EMWD, 1/23/2020 470 Total CIP $233,127,040 $140,376,582 $24,761,499 $398,265,120 471 472 Average Annual CIP 473 Replacement CIP $13,239,287 $15,803,052 $1,327,997 $30,370,336 474 Expansion CIP $33,386,121 $12,272,264 $3,624,303 $49,282,688 475 Total CIP $46,625,408 $28,075,316 $4,952,300 $79,653,024 476 477 478 (2) Debt Service Allocation 479 Expansion Funded (FPC) $7,510,459 $39,493,423 $1,689,083 $48,692,965 480 Replacement Funded (Rates) $4,047,495 $5,830,660 $1,279,880 $11,158,035 481 Total Debt Service $11,557,954 $45,324,083 $2,968,963 $59,851,000 482 LAFCO Murrieta FMSR Financial Model Page 38 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES 483 484 EMWD Funded Replacement Capital TOTAL 485 Replacement Replacement Replacement Replacement Replacement Replacement 486 Row Labels FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Total 487 General ($16,328) ($42,540) ($22,508) ($39,806) ($3,011) ($124,193) Source: EMWD, 1/23/2020 488 Recycled $2,689,323 $1,336,640 $1,187,239 $847,322 $579,459 $6,639,983 Source: EMWD, 1/23/2020 489 Sewer $16,764,995 $17,995,688 $20,654,386 $12,212,995 $11,511,391 $79,139,454 Source: EMWD, 1/23/2020 490 Water $11,906,016 $18,733,954 $16,968,825 $8,900,259 $9,687,384 $66,196,437 Source: EMWD, 1/23/2020 491 Total $31,344,005 $38,023,741 $38,787,942 $21,920,769 $21,775,223 $151,851,681 492 493 EMWD Funding Capital TOTAL 494 EMWD Funding EMWD Funding EMWD Funding EMWD Funding EMWD Funding EMWD Funding 495 Row Labels FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Total 496 General $2,858,032 $3,748,317 $1,363,761 $2,511,342 $519,313 $11,000,765 Source: EMWD, 1/23/2020 497 Recycled $8,804,919 $5,078,620 $4,860,067 $3,586,049 $2,431,844 $24,761,499 Source: EMWD, 1/23/2020 498 Sewer $21,220,233 $24,267,184 $31,731,100 $31,073,504 $21,083,797 $129,375,817 Source: EMWD, 1/23/2020 499 Water $38,016,267 $50,913,956 $58,824,723 $41,878,430 $43,493,665 $233,127,040 Source: EMWD, 1/23/2020 500 Total $70,899,450 $84,008,077 $96,779,651 $79,049,326 $67,528,618 $398,265,120 501 502 Debt Service 503 EMWD Debt Service TOTAL FY 2021 504 Water Expansion $7,510,459 Source: EMWD, 1/23/2020 505 Water Replacement & Refurbishment (R & R) $4,047,495 Source: EMWD, 1/23/2020 506 Sewer Expansion $39,493,423 Source: EMWD, 1/23/2020 507 Sewer R & R $5,830,660 Source: EMWD, 1/23/2020 508 Recycled Water Expansion $1,689,083 Source: EMWD, 1/23/2020 509 Recycled Water R & R $1,279,880 Source: EMWD, 1/23/2020 510 Total $59,851,000 Table B-5e EMWD SCENARIO: Preliminary Acquisition Balance Calculation Component of Acquisition Balance Amount 511 Capital Costs to Achieve Conditional and Operational Parity 512 Identified in FMSR $7,192,626 See Table B-5f 513 Identified by WMWD $1,950,000 GIS Mapping, Tank Mixing System, Reservoir Recoating 514 Prospective PERS Pension & OPEB Costs for 515 Transferred Employees; Severance $0 N/A per EMWD, December 2019 email. No staff anticipated to be transferred over. 516 Replacement and Refurbishment Reserve $0 Normally $220 per Equivalent Meter, 12/4/19 email from EMWD. Not applicable per EMWD 1/23/2020, as amount would be ~offset by transferred reserves. 517 Buy-In to Imported Water Turnouts, Distribution, and Treatment $2,827,820 $620 per Equivalent Meter, 12/4/19 email from EMWD 518 Total $11,970,446 519 520 Note: WMWD outstanding debt is considered as part of the reserve balance transferred over calculation, where WMWD will retain part of its 521 reserves to refund its outstanding debt. LAFCO Murrieta FMSR Financial Model Page 39 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES Table B-5f EMWD SCENARIO: FSMR Capital Improvements and Possible Cost Allocation to Existing Customers or Future Development How Funded Improvement Basis Estimated Existing Financial District for Existing/ Cost, 2020 $ Customers or Acquisition Participation or Developer Development Projected Project (See Note 1) Development? Balance Charges Funded Allocation Schedule 522 Storage for Existing Customers (Hunter Tank) $2,245,626 Existing Only $2,245,626 Note 2 Note 3 523 Storage for Development (Hunter Tank) $1,810,374 Future Only $1,810,374 Note 2 Note 3 524 Expansion CIP North of Murrieta Creek $17,120,000 Future Only $17,120,000 Note 3 Note 4 525 Expansion CIP South of Murrieta Creek $20,388,000 Future Only $20,388,000 Note 3 Note 4 526 EMWD Hydraulic Improvements $1,468,000 Future Only $1,468,000 Note 4 Note 4 527 Supply Improvements Through EMWD $5,379,000 Future Only $5,379,000 Note 4 528 Legacy (Small Diameter) Improvements $4,947,000 Existing Only $4,947,000 Note 2 Note 5 529 Well No. 3 $0 $0 $0 530 Total $53,358,000 $7,192,626 $8,657,374 $37,508,000 531 532 533 Notes: 534 (1) Source: West Yost, October 2019 535 (2) Per West Yost, these projects are required to address deficiencies in the existing system. Cost of the project to be included in the Acquisition Balance. 536 Reservoir serves both Study Area and EMWD retail service area. 50/50 split of costs between existing Study Area customers and existing EMWD retail customers based on anticipated storage needs. 537 For cost applicable to Study Area, division of cost between existing and future customers based on ratio of existing to buildout Meter Equivalents. 538 (3) Expansion of water system. Project is not needed unless there is development. Schedule depends on when development occurs. 539 (4) Needed to accommodate future water demands from growth. Project is not needed unless there is development. Schedule depends on when development occurs. 540 (5) Assume that this project will be completed between 2025 and 2030. Anticipate that permitting and siting of the reservoir will require additional time and could occur before 2025. 541 (6) Assume improvements will be completed between 2020 and 2025. Table B-5g EMWD SCENARIO: Funding for Capital Projects Not Funded by Improvement Districts or Acquisition Balance Potential Funding Infrastructure Review Project Method (1) 542 Storage for Existing Customers (Hunter Tank) Acquisition Balance 543 Storage for Development (Hunter Tank) FPC Funded 544 Expansion CIP North of Murrieta Creek Improvement District or Developer Contribution 545 Expansion CIP South of Murrieta Creek Improvement District or Developer Contribution 546 EMWD Hydraulic Improvements FPC Funded 547 Supply Improvements Through EMWD FPC Funded 548 Fireflow Improvements Acquisition Balance 549 Total 550 551 Compare FPC Funded Costs with FPC Revenues Over the 10-Year Planning Period 552 553 FPC Funded Projects $8,657,374 554 FPC Revenues, 10-Year Total $5,491,958 555 FPC Funded Projects Cost More than Projected FPC Revenues. This means that FPC revenues after FY 29/30 would also be used to fund 556 Alternatively, a higher growth rate than the 1.6% (approximately 50 connections per year) would provide more FPC revenues than what is shown here. LAFCO Murrieta FMSR Financial Model Page 40 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 EMWD Scenario Table B-5 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis EMWD SCENARIO TABLES Table B-5h Projected Monthly Water Bill Calculations Projected FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 Notes 557 Applicable Rate Schedule WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj WMWD Adj 558 559 Single Family Residence, 3/4" Meter, 18 ccf/month 1, 2 560 Fixed System Charge (Adjusted WMWD), $/month $35.51 $36.86 $38.26 $39.72 $41.23 $42.79 $44.42 $46.11 $46.11 $46.11 3 561 Tier 1 Commodity Charge (WMWD), $/hcf $2.01 $2.08 $2.16 $2.24 $2.33 $2.42 $2.51 $2.60 $2.60 $2.60 562 Tier 2 Commodity Charge (WMWD), $/hcf $4.29 $4.45 $4.62 $4.79 $4.98 $5.16 $5.36 $5.56 $5.56 $5.56 563 Standby Charge $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 564 WMWD Rates: Water Bill Calculation $95.59 $99.17 $102.90 $106.76 $110.78 $114.94 $119.27 $123.75 $123.75 $123.75 565 566 Service Charge (EMWD), $/month $13.38 $13.99 $14.34 $14.70 $15.07 $15.44 $15.83 $16.23 $16.63 $17.05 4 567 Fixed Charge for Water Supply and Reliability (EMWD), $/month $3.95 $4.26 $4.37 $4.48 $4.59 $4.70 $4.82 $4.94 $5.06 $5.19 568 Tier 1 Volume Charge (EMWD), $/hcf $1.10 $1.13 $1.16 $1.19 $1.22 $1.25 $1.28 $1.31 $1.34 $1.38 569 Tier 2 Volume Charge (EMWD), $/hcf $3.53 $3.63 $3.72 $3.81 $3.91 $4.01 $4.11 $4.21 $4.31 $4.42 570 Standby Charge $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 571 EMWD Rates: Water Bill Calculation $62.60 $64.76 $66.35 $67.98 $69.65 $71.36 $73.11 $74.91 $76.76 $78.65 572 573 Monthly Water Bill $95.59 $99.17 $102.90 $106.76 $110.78 $114.94 $119.27 $123.75 $123.75 $123.75 574 575 576 Commercial Account, 2" Meter, 1,500 ccf/year (125 ccf/month) 1, 2, 3, 4 577 Fixed System Charge (Adjusted WMWD), $/month $123.60 $128.30 $133.17 $138.23 $143.49 $148.94 $154.60 $160.47 $160.47 $160.47 578 Tier 1 Commodity Charge (WMWD), $/hcf $2.01 $2.08 $2.16 $2.24 $2.33 $2.42 $2.51 $2.60 $2.60 $2.60 579 Tier 2 Commodity Charge (WMWD), $/hcf $4.29 $4.45 $4.62 $4.79 $4.98 $5.16 $5.36 $5.56 $5.56 $5.56 580 Standby Charge $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 581 WMWD Rates: Water Bill Calculation $537.97 $558.37 $579.54 $601.52 $624.33 $648.01 $672.59 $698.10 $698.10 $698.10 582 583 Service Charge (EMWD), $/month $78.17 $81.52 $83.55 $85.64 $87.78 $89.98 $92.23 $94.53 $96.90 $99.32 584 Fixed Charge for Water Supply and Reliability (EMWD), $/month $31.60 $34.08 $34.93 $35.81 $36.70 $37.62 $38.56 $39.52 $40.51 $41.52 585 Tier 1 Volume Charge (EMWD), $/hcf $3.66 $3.77 $3.86 $3.96 $4.06 $4.16 $4.27 $4.37 $4.48 $4.59 586 Tier 2 Volume Charge (EMWD), $/hcf $7.43 $7.65 $7.84 $8.04 $8.24 $8.44 $8.66 $8.87 $9.09 $9.32 587 Standby Charge $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 $1.17 588 EMWD Rates: Water Bill Calculation $568.44 $588.01 $602.68 $617.72 $633.14 $648.94 $665.13 $681.73 $698.74 $716.18 589 590 Monthly Water Bill $537.97 $558.37 $579.54 $601.52 $624.33 $648.01 $672.59 $698.10 $698.10 $698.10 Notes: (1) Both EMWD and WMWD use budget based rates. For single-family residences, of the 18 ccf/month use, estimate 8 ccf/month in Tier 1 and remainder of water use in Tier 2. No Tier 3 or Tier 4 use. For the commercial account example, 1,500 ccf/year is the average water use for WMWD's customers in the Study Area with 2" meters, as reported by WMWD (1/21/2020) (2) Switch from WMWD rates to EMWD projected to begin as noted in Table B-5a above (3) WMWD's pumping surcharge is not applicable to most of the Study Area, because the pumping surcharge is for pumping zone 8, and most of the Study Area is in pumping zone 7. (4) WMWD and EMWD adjust rates on January 1 of each year. The monthly bills shown in this table are for the July - December portion of each fiscal year. (5) WMWD and EMWD have different tier structures for non-residential customers. For EMWD, all water use is projected to be in Tier 1. For WMWD, 90% of water use is Tier 1 and 10% is Tier 2. (6) WMWD's commercial budget formula is for any given month, 90% of that month's two-year historical average water use is in Tier 1, and the remaining 10% is in Tier 2. For the purposes of this monthly bill calculation, Tier 1 water use is 90%*125 ccf/month, and Tier 2 water use is 10%*125 ccf/month. Source: https://www.wmwd.com/337/Water-Budget-Chart-Commercial EMWD's commercial budget formula is shown above. For the purposes of this calculation, all commercial water use is Tier 1. LAFCO Murrieta FMSR Financial Model Page 41 of 51 B5 EMWD Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 1 WMWD Scenario: Projected Revenues, $M 2 3 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 4 Water Rate Revenues $5.63 $5.91 $6.20 $6.51 $6.84 $7.18 $7.53 $7.91 $8.17 $8.30 5 Standby Charges 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 6 Interest Income 0.10 0.11 0.12 0.11 0.12 0.14 0.16 0.17 0.19 0.21 7 Connection Fees 0.47 0.48 0.50 0.51 0.53 0.55 0.57 0.59 0.61 0.63 8 Other Non-Rate Revenues 0.07 0.08 0.07 0.08 0.07 0.08 0.08 0.07 0.08 0.08 9 Total $6.41 $6.72 $7.03 $7.35 $7.71 $8.09 $8.48 $8.89 $9.19 $9.37 10 math check, should = $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 11 12 WMWD Scenario: Projected Expenses, $M 13 14 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 15 Purchased Water $1.32 $1.43 $1.55 $1.66 $1.77 $1.88 $2.00 $2.12 $2.26 $2.41 16 Other O&M 3.13 3.22 3.30 3.39 3.47 3.57 3.66 3.75 3.85 3.95 17 Debt Service 0.18 0.87 0.87 0.87 0.87 1.79 1.79 1.79 1.79 1.79 18 Pay as You Go Capital, Repair/Repl. 1.30 1.16 1.92 0.82 0.83 0.50 0.50 0.50 0.50 0.50 19 Total $5.93 $6.67 $7.64 $6.73 $6.94 $7.73 $7.95 $8.17 $8.40 $8.65 20 math check, should = $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 21 22 WMWD Scenario: Projected Ending Year Reserves, $M 23 24 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 25 Projected Ending Year Reserve Balance $4.80 $4.84 $4.24 $4.86 $5.63 $5.98 $6.52 $7.24 $8.03 $8.75 26 WMWD's Minimum Reserve Balance $7.47 $7.52 $7.57 $7.62 $7.67 $7.72 $7.77 $7.83 $7.88 $7.95 27 28 WMWD Scenario: Projected Total Water Cost, SFR, 3/4" Meter, 18 ccf/month, Tier 1 Usage 8 ccf/month, Power Zone 7 29 30 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 31 Total Water Cost $105.05 $108.46 $111.98 $115.62 $119.37 $123.25 $127.26 $131.41 $135.69 $135.69 32 33 34 WMWD Scenario: Projected Total Water Cost, Commercial, 2" Meter, 125 ccf/month, Power Zone 7, 1 acre 35 36 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 37 Total Water Cost $569.45 $588.18 $607.54 $627.53 $648.18 $669.51 $691.55 $714.31 $737.82 $737.82 38 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 42 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 39 40 Projected Revenues: WMWD Scenario, $M Projected Expenses: WMWD Scenario, $M 41 42 $12 $9 43 $8 44 $10 $7 45 $8 $6 46 47 $5 $6 48 $4 49 $4 $3 50 $2 51 $2 $1 52 53 $0 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 54 55 Other Non-Rate Revenues Connection Fees Interest Income Pay As You Go Capital and Replacement Debt Service 56 Other O&M Expenses Purchased Water Standby Charges Water Rates 57 58 59 Projected Ending Year Reserve Balance: WMWD Scenario, $M 60 61 $10.0 62 $9.0 63 $8.0 64 $7.0 65 $6.0 66 67 $5.0 68 $4.0 69 $3.0 70 $2.0 Minimum Reserve Balance Criteria Are 3 Months ofOperating Expenses 71 $1.0 plus $6,355,923 in WMWD's Asset Replacement Fund. 72 $0.0 73 FY FY FY FY FY FY FY FY FY FY 74 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 75 76 Projected Ending Year Reserves WMWD's Minimum Reserve Criteria LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 43 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 77 78 79 Projected Total Water Cost: WMWD Scenario Projected Total Water Cost: WMWD Scenario 80 (Single-Family Residence, 3/4" Meter, 18 hcf/month, Power Zone 7) (Commercial, 2" Meter, 125 hcf/month, Power Zone 7, 1 acre) $160 $800 81 82 $140 $700 83 $120 $600 84 85 $100 $500 86 $80 $400 87 88 $60 $300 89 90 $40 $200 91 $20 $100 92 93 $0 $0 94 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 95 96 97 98 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 44 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 99 EMWD Scenario: Projected Revenues, $M 100 101 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 102 Water Rate Revenues $5.26 $5.55 $5.86 $6.18 $6.52 $6.87 $7.25 $7.65 $7.92 $8.05 103 Standby Charges 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 104 Interest Income 0.03 0.03 0.04 0.06 0.07 0.08 0.09 0.11 0.13 0.15 105 Other Non-Rate Revenues 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 106 Total $5.44 $5.74 $6.05 $6.38 $6.73 $7.10 $7.50 $7.91 $8.20 $8.34 107 math check, should = $0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 108 109 EMWD Scenario: Projected Expenses, $M 110 111 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 112 Paydown of Acquisition Balance $0.64 $0.69 $0.77 $0.85 $0.94 $1.03 $1.14 $1.25 $1.21 $1.02 113 Study Area Share of EMWD Expenses $4.37 $4.55 $4.74 $4.94 $5.14 $5.36 $5.58 $5.81 $6.05 $6.31 114 Total $5.01 $5.24 $5.51 $5.79 $6.08 $6.39 $6.72 $7.06 $7.27 $7.33 115 116 117 EMWD Scenario: Projected Ending Year Reserves, $M 118 119 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 120 Projected Ending Year Reserve Balance $1.75 $2.24 $2.78 $3.38 $4.03 $4.74 $5.52 $6.38 $7.31 $8.32 121 122 123 EMWD Scenario: Projected Total Water Cost, SFR, 3/4" Meter, 17 ccf/month 124 125 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 126 Total Water Cost $95.59 $99.17 $102.90 $106.76 $110.78 $114.94 $119.27 $123.75 $123.75 $123.75 127 128 129 EMWD Scenario: Projected Total Water Cost, Commercial, 2" Meter, 125 ccf/month 130 131 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 132 Total Water Cost $537.97 $558.37 $579.54 $601.52 $624.33 $648.01 $672.59 $698.10 $698.10 $698.10 133 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 45 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 134 135 Projected Revenues: EMWD Scenario, $M Projected Expenses: EMWD Scenario, $M 136 137 $9 $8 138 $8 $7 139 $7 $6 140 $6 $5 141 $5 Revenues Will DecreaseAfter Acquisition Balance $4 142 $4 is Paid Off, Projected to be After FY 29/30. At 143 $3 This Time, Rates Switch from Adjusted WMWD Rates $3 144 $2 to EMWD Rates $2 145 $1 $1 146 $0 $0 147 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 148 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 149 Interest Income Standby Charges Other Non-Rate Revenue Water Rates Study Area Share of EMWD Expenses Paydown of Acquisition Balance 150 151 Projected Study Area Contribution to EMWD Reserves: EMWD 152 Scenario, $M 153 $9.0 154 $8.0 155 $7.0 156 $6.0 157 $5.0 158 $4.0 159 $3.0 160 $2.0 161 $1.0 162 $0.0 163 FY FY FY FY FY FY FY FY FY FY 164 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 165 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 46 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 166 167 Projected Monthly Total Water Cost: EMWD Scenario Projected Monthly Total Water Cost: EMWD Scenario 168 (Single-Family Residence, 3/4" Meter, 18 hcf/month) (Commercial, 2" Meter, 125 hcf/month, $200K Land Value) 169 $140 $800 170 171 $120 $700 172 $600 173 $100 174 $500 175 $80 Total Cost Will DecreaseAfter Acquisition Balance 176 is Paid Off, Projected to be After FY 29/30. At $400 $60 Total Cost Will IncreaseAfter Acquisition Balance 177 This Time, Rates Switch from Adjusted WMWD Rates $300 is Paid Off, Projected to be After FY 29/30. At 178 $40 to EMWD Rates This Time, Rates Switch from Adjusted WMWD Rates 179 $200 to EMWD Rates 180 $20 $100 181 182 $0 $0 183 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 184 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 185 186 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 47 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 187 RCWD Scenario: Projected Revenues, $M 188 189 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 190 Water Rate Revenues $4.06 $4.21 $4.36 $4.52 $4.68 $4.86 $5.03 $5.22 $5.30 $5.39 191 Ad Valorem or Equivalent Rate Surcharge 2.09 2.14 2.20 2.25 2.31 2.37 2.42 2.48 2.55 2.61 192 Standby Charges 0.46 0.46 0.46 0.46 0.46 0.46 0.46 0.46 0.46 0.46 193 Interest Income 0.03 0.03 0.04 0.03 0.04 0.05 0.06 0.07 0.09 0.10 194 Other Non-Rate Revenues 0.22 0.23 0.23 0.24 0.25 0.25 0.26 0.27 0.28 0.28 195 Total $6.86 $7.08 $7.29 $7.50 $7.74 $7.99 $8.24 $8.51 $8.68 $8.85 196 % from Ad Valorem 30% 30% 30% 30% 30% 30% 29% 29% 29% 30% 197 math check, should = $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 198 199 RCWD Scenario: Projected Expenses, $M 200 201 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 202 Purchased Water $1.14 $1.24 $1.35 $1.45 $1.55 $1.65 $1.75 $1.86 $1.98 $2.11 203 Other O&M 3.13 3.22 3.30 3.39 3.48 3.57 3.66 3.76 3.86 3.96 204 WMWD-Initiated Capital and Repair/Replacement 1.54 1.39 2.14 1.04 1.04 1.04 1.04 1.04 1.04 1.04 205 FMSR Capital Excluding Improvement Districts/Develop0e.r61 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 206 Total $6.43 $6.94 $7.89 $6.98 $7.16 $7.36 $7.55 $7.76 $7.97 $8.21 207 math check, should = $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 208 209 RCWD Scenario: Projected Reserves, $M 210 211 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 212 Projected Ending Year Reserve Balance $1.75 $1.88 $1.29 $1.81 $2.38 $3.01 $3.70 $4.45 $5.15 $5.80 213 RCWD's Minimum Reserve Balance $3.73 $3.85 $3.97 $4.09 $4.22 $4.34 $4.47 $4.60 $4.74 $4.88 214 215 RCWD Scenario: Projected Total Water Cost, SFR, 3/4" Meter, 18 ccf/month, $80,000 land value 216 217 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 218 Total Water Cost 219 Revenue Neutral Surcharge $124.44 $127.01 $129.64 $132.33 $135.08 $137.88 $140.75 $143.68 $144.88 $146.10 220 Ad Valorem Tax $117.58 $119.98 $122.43 $124.94 $127.50 $130.12 $132.79 $135.52 $136.51 $137.53 221 222 223 RCWD Scenario: Projected Total Water Cost, Commercial, 2" Meter, 125 ccf/month, $200,000 land value, 1 acre 224 225 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 226 Total Water Cost 227 Revenue Neutral Surcharge $678.97 $693.57 $708.49 $723.74 $739.33 $755.26 $771.54 $788.18 $794.96 $801.90 228 Ad Valorem Tax $534.18 $545.16 $556.37 $567.82 $579.51 $591.44 $603.63 $616.07 $618.54 $621.08 229 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 48 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 230 231 232 Projected Revenues: RCWD Scenario, $M Projected Expenses: RCWD Scenario, $M 233 $12 $9 234 $8 235 $10 $7 236 $8 $6 237 238 $5 $6 239 $4 240 $4 $3 241 $2 242 $2 $1 243 244 $0 $0 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 245 246 Interest Income Standby Charges WMWD Capital + Repair/Repl FMSR Capital Excl. Imp. Districts 247 Other Non-Rate Revenue AV Tax or Water Rate Surcharge Other O&M Expenses Purchased Water 248 Water Rates 249 250 251 Projected Ending Year Reserve Balance: RCWD Scenario, $M 252 253 $7 254 $6 255 256 $5 257 258 $4 259 $3 260 261 $2 262 263 $1 264 $0 265 FY FY FY FY FY FY FY FY FY FY 266 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 267 Projected Ending Year Reserves RCWD's Minimum Reserve Criteria 268 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 49 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 269 270 Projected Monthly Total Cost (Water Bill + AV Tax/Surcharge + Projected Monthly Total Cost (Water Bill + AV Tax/Surcharge + Standby): 271 Standby): RCWD Scenario RCWD Scenario 272 (Commercial, 2" Meter, 125 hcf/month, $200K Land Value, 1 acre) (SFR, 3/4" Meter, 18 hcf/month, $80K Land Value) 273 $160 $900 274 $800 275 $140 Water Rate Surcharge Water Rate Surcharge 276 $120 Ad Valorem Tax $700 277 $600 Ad Valorem Tax $100 278 $500 279 $80 $400 280 $60 281 $300 282 $40 $200 283 $20 $100 284 285 $0 $0 286 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 FY 28/29 FY 29/30 287 288 289 290 291 292 293 Projected Monthly Total Cost: Comparison of Scenarios Projected Monthly Total Cost: Comparison of Scenarios 294 (SFR, 3/4" Meter, 18 hcf/month, $80K Land Value) (Commercial, 2" Meter, 125 hcf/month, $200K Land Value, 1 acre) 295 $160 $900 296 $140 $800 297 $120 $700 298 $100 $600 299 $80 $500 300 $60 $400 301 $300 $40 302 $200 303 $20 $100 304 $0 $0 305 FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 306 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 307 308 RCWD Water Rate Surcharge RCWD Ad Valorem Tax EMWD WMWD RCWD Water Rate Surcharge RCWD Ad Valorem Tax EMWD WMWD 309 310 311 312 313 314 Projected Ending Year Reserve Balance, LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 50 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Graphs and Graph Data Table B-6 RIVERSIDE LAFCO - Murrieta Focused Municipal Service Review: Financial Analysis Graph Data and Graphs 315 Projected Ending Year Reserve Balance, 316 Side by Side Comparison, $M 317 $10 318 RCWD WMWD EMWD 319 $8 320 321 $6 322 323 $4 324 325 $2 326 327 328 $0 329 FY FY FY FY FY FY FY FY FY FY 330 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 LAFCO Murrieta FMSR Financial Model FG Solutions, LLC Page 51 of 51 B6 GraphResults Copyright 2020 All Rights Reserved Printed: 10/15/2020 Appendix C Infrastructure and Land Use ¨¦§ 215 ¨¦§ 15 N u tm e g §¨¦ S t 15 tS a im Jefferson Ave tS la n K o m e L Adams Ave Adams Ave Washington Ave St y v I St n o r St mi a St H a wt h G u a v a Hayes Ave al Hayes Ave K LOS Study Area General Plan Land Use Large Lot Residential ANGELES SAN BERNARDINO County Boundary Business Park Mixed Use Figure C-1 City Boundary Civic/Institutional Multiple Family Residential Land Use RIVERSIDE Interstate Highway Commercial Parks and Open Space 2035 General Plan ORANGE State Highway Industrial Professional and Office Local Roads Innovation Single Family Residential Riverside LAFCO 0 1,000 2,000 Focused Water Municipal SAN DIEGO Murrieta Creek Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.esU dnaL nalP lareneG .1-C erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW ¨¦§ 215 ¨¦§ 15 N u tm e g §¨¦ S t 15 tS a im Jefferson Ave tS la n K o m e L Adams Ave Adams Ave Washington Ave St y v I St n o r St mi a St H a wt h G u a v a Hayes Ave al Hayes Ave K LOS Study Area Focus Area ANGELES SAN BERNARDINO County Boundary Mutliple Use Areas (MU-3) Figure C-2 City Boundary South Murrieta Business Corridor Focus Areas RIVERSIDE Interstate Highway 2035 General Plan ORANGE State Highway Local Roads Riverside LAFCO 0 1,000 2,000 Focused Water Municipal SAN DIEGO Murrieta Creek Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.saerA sucoF .2-C erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW ¨¦§ 215 ¨¦§ 15 N u tm e g §¨¦ S t 15 tS a im Jefferson Ave tS la n K o m e L Adams Ave Adams Ave Washington Ave St y v I St n o r St mi a St H a wt h G u a v a Hayes Ave al Hayes Ave K LOS Study Area Specific Plan ANGELES SAN BERNARDINO County Boundary Downtown Murrieta Figure C-3 City Boundary Santa Rosa Highlands Specific Plan Areas RIVERSIDE Interstate Highway 2035 General Plan ORANGE State Highway Local Roads Riverside LAFCO 0 1,000 2,000 Focused Water Municipal SAN DIEGO Murrieta Creek Scale in Feet Service Review Murrieta Area 0202/03/11 - ronnococ - dxm.saerA nalP cificepS .3-C erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW ÄÆ ÄÆ LOS ANGELES ¨¦§ 138 1 7 3 ÄÆ ÄÆ 1 38 5 18 ÄÆ ÄÆ §¨¦ 1 8 330 ÄÆ ÄÆ 15 ¨¦§ ÄÆ 38 SAN 2 1 30 5 30 BERNARDINO ¨¦§ 10 §¨¦ 10 ÄÆ ÄÆ 2 60 6 ÄÆ 7 1 ÄÆ 60 §¨¦ 10 ÄÆ ÄÆ 91 111 ÄÆ 7 ¨¦§ 9 ÄÆ 2 1 5 2 4 3 ¨¦§ 15 ÄÆ 74 RIVERSIDE ¨¦§ 5 ÄÆ ÄÆ ORANGE 4 7 9 7 ÄÆ 371 §¨¦ 5 ÄÆ 79 ÄÆ 76 ¨¦§ 1 5 SAN DIEGO ¨¦§ 5 ÄÆ 78 Study Areas Figure C-4 County Boundary Interstate Highway EMWD Service Area & SOI State Highway EWWD Service Area Riverside LAFCO 0 5 10 EMWD SOI Focused Water MSR Miles Murrieta Area 0202/01/21 - ronnococ - dxm.IOS DWME .4-C erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW ÄÆ ÄÆ LOS ANGELES ¨¦§ 138 1 7 3 ÄÆ ÄÆ 1 38 5 18 ÄÆ ÄÆ §¨¦ 1 8 330 ÄÆ ÄÆ 15 ¨¦§ ÄÆ 38 SAN 2 1 30 5 30 BERNARDINO ¨¦§ 10 §¨¦ 10 ÄÆ ÄÆ 2 60 6 ÄÆ 7 1 ÄÆ 60 §¨¦ 10 ÄÆ ÄÆ 91 111 ÄÆ 7 ¨¦§ 9 ÄÆ 2 1 5 2 4 3 ¨¦§ 15 ÄÆ 74 RIVERSIDE ¨¦§ 5 ÄÆ ÄÆ ORANGE 4 7 9 7 ÄÆ 371 §¨¦ 5 ÄÆ 79 ÄÆ 76 ¨¦§ 1 5 SAN DIEGO ¨¦§ 5 ÄÆ 78 Study Areas Figure C-5 County Boundary Interstate Highway WMWD Service Area & SOI State Highway WMWD Service Area Riverside LAFCO 0 5 10 WMWD SOI Focused Water MSR Miles Murrieta Area 0202/01/21 - ronnococ - dxm.IOS DWMW .5-C erugIF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW WEST YOST - N:\Clients\868 Riverside LAFCO\40-19-01 Water Serv Rev\GIS\MXD\_Working Figures\FIgure C-6. RCWD SOI.mxd - coconnor - 12/10/2020 ÄÆ 7 9 ÄÆ 74 ÄÆ 4 ¨¦§ 7 2 1 5 RIVERSIDE ¨¦§ 1 ÄÆ 5 9 7 ÄÆ 79 ÄÆ ¨¦§ 76 1 5 SAN DIEGO ÄÆ 6 7 ¨¦§ 5 LOS Study Areas ANGELES SAN BERNARDINO County Boundary Figure C-6 Interstate Highway RCWD RIVERSIDE State Highway Service Area & SOI ORANGE RCWD Service Area RCWD SOI Riverside LAFCO 0 1.5 3 Focused Water MSR SAN DIEGO Miles Murrieta Area UT UT Proposed Reservoir Site ¨¦§ 215 ÄÆ7 9 Los Alamos Interconnection ¨¦§ 15 5" New Murrieta Hot Springs Road Interconnection ÚÐ LOS Study Area ¼ Booster Pump Station EMWD Existing Pipeline Pressure Zone ANGELES SAN BERNARDINO County Boundary UT EMWD CIP (Murrieta) 1280 Figure C-7 Existing Reservoir Site City Boundary EMWD CIP (Water Facilities Master Plan) 1430 UT EMWD Ownership Propsoed Reservoir Site RIVERSIDE Interstate Highway Existing Water Main Scenario Hydraulic Details ORANGE State Highway ") Production Well Expansion Pipe - North of Murrieta Creek Notes: 1. Production Wells are labeled in green text. Local Roads 5" Interconnection Point Expansion Pipe - South of Murrieta Creek 2. Booster Pump Stations are leabeled in gray text. Riverside LAFCO 3. Reservoirs are labeled in blue text. 0 1,250 2,500 Focused Water Municipal SAN DIEGO Required CIP 4. Interconnections are labeled in red text. 5. Proposed facilities are labeled in purple text. Scale in Feet Service Review Murrieta Area 0202/61/01 - sllewj - dxm.7-C erugiF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Pumping Supply and Storage Analysis - Murrieta Hot Springs (1384) Temecula Valley Operational Service Area Supply and Storage Capacity Evaluation - Temecula Valley Operational Service Area Murrieta Hot Springs (1384) Eastern Municipal Water District Zone Type: Normal Planning Year Type Description Units 2013 2016 2018 2020 2022 2025 2030 2035 2040 2045 2100 ADD ADD for Murrieta Hot Springs (1384) gpm 1,732 1,734 1,734 1,741 1,741 1,706 1,706 1,706 1,772 1,896 4,711 MDD for Murrieta Hot Springs (1384) gpm 4,331 4,335 4,335 4,353 4,353 4,266 4,266 4,266 4,429 4,739 9,422 Pumped to Higher Zones gpm 1,510 1,407 1,407 1,449 1,449 1,449 1,449 1,510 1,522 1,522 1,545 MDD Regulated Zones gpm 1,447 1,453 1,453 1,453 1,453 1,703 1,710 1,722 1,829 1,979 2,007 Subagencies gpm 11,803 19,254 19,254 19,254 19,254 19,254 19,254 19,254 19,254 19,254 16,830 Total MDD Required (w/ Linked Zones) gpm 19,091 26,449 26,449 26,509 26,509 26,670 26,678 26,751 27,033 27,493 29,804 MDD (w/ Linked Zones w/ PHD) gpm 5,778 5,788 5,788 5,807 5,807 5,968 5,976 5,987 6,258 6,718 11,429 PHD for Murrieta Hot Springs (1384) gpm 8,662 8,670 8,670 8,707 8,707 8,531 8,531 8,531 8,858 9,478 18,844 PHD Pumped to Higher Zones gpm 1,510 1,407 1,407 1,449 1,449 1,449 1,449 1,510 1,522 1,522 1,545 Regulated Zones gpm 2,893 2,907 2,907 2,907 2,907 3,405 3,420 3,443 3,659 3,958 4,013 Subagencies gpm 11,803 19,254 19,254 19,254 19,254 19,254 19,254 19,254 19,254 19,254 16,830 Total PHD Required (w/ Linked Zones) gpm 24,869 32,237 32,237 32,316 32,316 32,639 32,654 32,738 33,292 34,211 41,232 Duration hr 4 4 4 4 4 4 4 4 4 4 4 MDD+FF Fire Flow gpm 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Total MDD+FF Pumping Required gpm 24,091 31,449 31,449 31,509 31,509 31,670 31,678 31,751 32,033 32,493 34,804 Supplies Local Supplies gpm 29,980 29,980 29,980 29,980 29,980 29,980 29,980 29,980 29,980 29,980 29,980 PRV Supply from Other Zones gpm 0 0 0 0 0 0 0 0 0 0 0 Total Capacity gpm 0 0 0 0 0 0 0 0 0 0 0 Firm Capacity gpm 0 0 0 0 0 0 0 0 0 0 0 Pumping Total Capacity w/o Largest Pumping Station gpm 0 0 0 0 0 0 0 0 0 0 0 Capacity Firm Capacity w/o Largest Pumping Station gpm 0 0 0 0 0 0 0 0 0 0 0 Total Capacity Available during Electrical Outage gpm 0 0 0 0 0 0 0 0 0 0 0 Firm Capacity Available during Electrical Outage gpm 0 0 0 0 0 0 0 0 0 0 0 Equalization (25 % of MDD [w/ Linked Zones w/ PHD]) MG 2.080 2.084 2.084 2.090 2.090 2.148 2.151 2.155 2.253 2.419 4.114 Operational Pump Through (10 % of MDD in Higher Zones) MG 0.217 0.203 0.203 0.209 0.209 0.209 0.209 0.217 0.219 0.219 0.223 Time of Use (25 % of MDD [w/ Linked Zones]) MG 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Operational Storage Required MG 2.297 2.287 2.287 2.299 2.299 2.357 2.360 2.372 2.472 2.638 4.337 Fire Fire (5000 gpm for 4 hrs) MG 1.200 1.200 1.200 1.200 1.200 1.200 1.200 1.200 1.200 1.200 1.200 50 % of MDD MG 4.160 4.168 4.168 4.181 4.181 4.297 4.302 4.311 4.506 4.837 8.229 Emergency (Minimum = 25% MDD) MG 2.080 2.084 2.084 2.090 2.090 2.148 2.151 2.155 2.253 2.419 4.114 Emergency Emergency (Electrical Outage) MG 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Emergency (50 % of MDD - Q Remaining Total) MG 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Emergency (50 % of MDD - Q Remaining Firm) MG 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Emergency Storage Required MG 2.080 2.084 2.084 2.090 2.090 2.148 2.151 2.155 2.253 2.419 4.114 Storage Total Available Storage MG 5.105 5.105 5.105 6.501 6.501 6.501 6.501 6.501 6.501 6.501 9.501 Analysis Total Required Storage MG 5.577 5.571 5.571 5.589 5.589 5.705 5.711 5.727 5.925 6.257 9.651 Available minus Required MG -0.472 -0.466 -0.466 0.912 0.912 0.796 0.790 0.774 0.576 0.244 -0.150 Analysis Adequate Storage is Available? (Y/N) NO NO NO YES YES YES YES YES YES YES NO Results Adequate Pumping is Available? (Y/N) YES YES YES YES YES YES YES YES YES YES YES Highest Priority Deficiency 9 9 9 0 0 0 0 0 0 0 20 Deficiency Type Storage Storage Storage OK OK OK OK OK OK OK Storage SDNAMED YLPPUS EGAROTS 0 500 1,000 Scale in Feet llennoca : dxm.PIC egarotS weN 1-6\SERUGIF PMW\DXM\SIG\aerA vreS ateirruM 10-71-02\DW lapicinuM nretseW 587\stneilC\:L MP 72:65:4 8102/3/01 :devaS tsaL Los Alamos Connection ¿ "5 North Well ") New Clay Well ") Upsize from 8" to 24" ¿ UT 5"¿ 24" 24" Shut Existing 5" Connection to 20" Olga Gordon Tanks 24" Proposed Tank Reservoir Site Connection Point UT Proposed Reservoir Site Elev: 1250 Symbology UT Proposed Reservoir Site Required Pipe to Proposed Pressure Zone Elevation 1260 Figure Reservoir UT 1280 1240 1265 Existing Reservoir Site Existing Pipe 1430 1245 1270 ") Production Well 1250 1275 5" Existing Connection to Tanks 1255 1280 5" Proposed Connection to Tanks C-8 Detailed WMWD Proposed Storage Riverside LAFCO Focused Water Mun. Service Review MSA 0 1,000 2,000 Scale in Feet Figure C-5 Fire Flow Upgrades Riverside LAFCO Focused Water Municipal Service Review MSA llennoca : dxm.PIC FF esaB 7-6\SERUGIF PMW\DXM\SIG\aerA vreS ateirruM 10-71-02\DW lapicinuM nretseW 587\stneilC\:L MA 75:23:8 8102/13/01 :devaS tsaL Upsize 939 ft from 6" and Upsize 320 ft 4" to 12" and construct from 8" to 12" 239 ft of 8" pipe Upsize 100 ft Construct 610 ft from 4" to 8" of 12" Pipe to RCWD Connection Grizzly Ridge Upsize 3190 ft Reservoir Site from 8" to 12" UT Upsize 610 ft from 6" to 10" 5" Alson Booster Upsize 1400 ft from Proposed RCWD Pump Station 6" and 4" to 12" Connection ÚÐ ¼ UUUpppsssiiizzzeee 133999011700 fffttt ffrroomm f44r""o maann 4dd" 66 t""o tt8oo" 88"" North Well ") ") New Clay Well UT Olga Gordon Reservoir Site UT Proposed Reservoir Site Symbology UT Existing Water Main Murrieta Creek Proposed Reservoir Site UT Pipe to Proposed Storage Pressure Zone Existing Reservoir Site Expansion Pipe - North of Murrieta Creek 1280 5" Interconnection Expansion Pipe - South of Murrieta Creek 1430 ") Production Well Fire Flow CIP Pipe ÚÐ ¼ Booster Pump Station Jefferson Ave P3 & P4 ÄÆ ¨¦§ 7 9 15 P1, P2, P3, and P4 have hydraulic RCWD's WR26/28 Connection restrictions both before and after 5" serving the MSA. Service to the MSA does not significantly exacerbate P1 & P2 ¨¦§ 15 the hydraulic restrictions. LOS ANGELES SAN Fig. C-10 BERNARDINO RIVERSIDE ORANGE 0 1,000 2,000 SAN DIEGO Scale in Feet RCWD Ownership Study Area Interstate Highway Pressure Zone County Boundary State Highway 1280 City Boundary Local Roads RCWD Pipeline Hydraulic Restriction Details RCWD Pipeline with Capacity Constraint (With and Without Murrieta Service) Riverside LAFCO Focused Water Municipal Service Review Murrieta Area 0202/61/01 - sllewj - dxm.6-C erugiF\serugiF gnikroW_\DXM\SIG\veR vreS retaW 10-91-04\OCFAL edisreviR 868\stneilC\:N - TSOY TSEW Concord Phoenix 1001 Galaxy Way, Suite 310 4505 E Chandler Boulevard, Suite 230 Concord CA 95420 Phoenix AZ 85048 925-949-5800 602-337-6110 Davis Pleasanton 2020 Research Park Drive, Suite 100 6800 Koll Center Parkway, Suite 150 Davis CA 95618 Pleasanton CA 94566 530-756-5905 925-426-2580 Eugene Sacramento 1650 W 11th Ave. Suite 1-A 8950 Cal Center Drive, Bldg. 1, Suite 363 Eugene OR 97402 Sacramento CA 95826 541-431-1280 916-306-2250 Irvine San Diego 6 Venture, Suite 290 11939 Rancho Bernardo Road Suite 100 Irvine CA 92618 San Diego CA 92128 949-517-9060 858-505-0075 Lake Oswego Santa Rosa 5 Centerpointe Drive, Suite 130 2235 Mercury Way, Suite 105 Lake Oswego OR 97035 Santa Rosa CA 95407 503-451-4500 707-543-8506 Oceanside 804 Pier View Way Suite 100 Oceanside CA 92054 760-795-0365