75A - PH - WATER AND SEWER RATES

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2019 Water, Recycled Water, and Sewer Rate Study 1. Introduction 1. INTRODUCTION Stantec Consulting and Hildebrand Consulting have been retained by the City of Santa Ana (City) to conduct a Water, Recycled Water, and Sewer Rate Study (Study). This report describes the detailed assumptions, procedures, and results of the Study, including our conclusions and recommendations. 1.1 UTILITY BACKGROUND The City of Santa Ana is located in Orange County, with a population of approximately 343,000. The City owns and maintains an extensive water and recycled water system that are managed by the Water Enterprise, and a sewer collection system that is managed by the Sewer Enterprise. The infrastructure of the Water Utility includes water production and distribution facilities that deliver potable water to retail customers within the City. The Water Utility consists of 20 active groundwater wells, 8 reservoirs, 7 water connections to Metropolitan Water District (MWD), 16 interconnections witl- neighboring water utilities, and 478 miles of water mains. The Water Utility currently depends on two sources of supply — pumped groundwater managed by the Orange County Water District (OCWD) and purchased surface water from the Metropolitan Water District (MWD). The Water Utility limits its groundwater use to meet no more than 75% of its retail water demands, in conformance with OCWD regulations. The Water Utility also provides recycled water to customers where available. The Water Enterprise acts in a retail capacity and obtains all recycled water supplies from OCWD. The transmission and distribution infrastructure for recycled water is owned and maintained by the OCWD, however, any expansion of the existing distribution pipeline network must be funded by the City's Water Enterprise. The Sewer Enterprise owns and maintains an extensive system of sanitary sewer infrastructure that includes approximately 390 miles of sanitary sewer, 9,000 manholes, 48,500 sewer laterals, and 2 sewer lift stations. All sewage is conveyed to the Orange County Sanitation District (OCSD) for treatment. 1.2 OBJECTIVES The primary objectives of this Study are to: i. Develop a multi -year financial management plan that provides for the Water and Sewer Enterprise operational and capital funding needs, ii. Identify future rate adjustments to water, recycled water, and sewer rates that will ensure adequate rate revenue to meet the Water and Sewer Enterprise's ongoing financial requirements, iii. Determine the cost of providing water, recycled water, and sewer service to customers using industry accepted methodologies, and City of Santa Ana Stantec 14