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CITY OF ANAHEIM WATER RATES, RULES Utilities Financial Services AND REGULATIONS 201 S. Anaheim Blvd. Page No. 2.2.1 Anaheim, CA 92805 SCHEDULE W-SRA WATER SYSTEM RELIABILITY ADJUSTMENT ISSUED BY: Effective: 04-03-24 by Resolution No.: 2024-023 Dated: 03-26-24 Dukku Lee Superseding Resolution No.: 2019-037 Dated: 04-16-19 General Manager APPLICABILITY Applicable to all areas served by the Utility and to all water Rate Schedule commodity charges. PURPOSE To provide for the automatic adjustment of the Utility's water Rate Schedule commodity charges per hundred cubic feet through the Water System Reliability Adjustment (“Water System Reliability Adjustment” or “WSRA”) for the purpose of recovering projected capital costs, including rehabilitation and construction of water and reclaimed water system infrastructure, and related debt service payments for the Utility. The WSRA will also fund a Capital Reserve Account (“Capital Reserve Account”). CALCULATION OF WATER SYSTEM RELIABILITY ADJUSTMENT For rate adjustments occurring on or after July 1, 2019, the amount of the Water System Reliability Adjustment shall be calculated in accordance with the following formula. The Formula is: (a + b - c - d - e) + f g g (expressed to the nearest $0.001 per hundred cubic feet) Expenditures for the Water Utility’s capital improvement program less those funded by developer contributions or other contributions, as reflected in the annual budget adopted by the City Council. Capital Reserve Account limit, not to exceed the highest of the three most recent fiscal year Water Utility capital improvement program budgets adopted by the City Council. Capital Reserve Account balance as of the end of the previous fiscal year. Bond funds allocated for capital expenditures. Funds available in the Water System Reliability Adjustment Balancing Account. Projected Water Utility debt service payments for the fiscal year. Projected water sales for the fiscal year. APPLICATION OF WATER SYSTEM RELIABILITY ADJUSTMENT The Water System Reliability Adjustment shall be adjusted by the General Manager to reflect non- reimbursable capital infrastructure and debt service costs, including costs associated with reclaimed water infrastructure, as adopted by the City Council in the annual budget, and to fund a Capital Reserve Account to be used for those purposes. The Water System Reliability Adjustment shall be limited to a maximum increase of 10¢ per hundred cubic feet (HCF) of water consumed per 12-month period (“period”); there shall be no limit on decreases to the Water System Reliability Adjustment. The Utility shall establish a designated Water System Reliability Adjustment Balancing Account (“Water System Reliability Adjustment Balancing Account”) to account for these collections and uses of funds. The funds accounted for in the Water System Reliability Adjustment Balancing Account shall only be used to pay for the capital improvement program as set forth in the formula above. ---PAGE BREAK--- CITY OF ANAHEIM WATER RATES, RULES Utilities Financial Services AND REGULATIONS 201 S. Anaheim Blvd. Page No. 2.2.2 Anaheim, CA 92805 SCHEDULE W-SRA WATER SYSTEM RELIABILITY ADJUSTMENT ISSUED BY: Effective: 04-03-26 by Resolution No.: N/A Dated: N/A Dukku Lee Superseding Resolution No.: 2024-023 Dated: 03-26-24 General Manager Any funds remaining in the Water System Reliability Adjustment Balancing Account at the end of the given period shall be transferred to the Capital Reserve Account subject to the Capital Reserve Account limit set forth below. If the funding limitations are met during a period and the Water System Reliability Adjustment Balancing Account has a balance, the excess funds shall reduce the WSRA revenue collections in a subsequent period as set forth in the formula above. The Utility shall establish a restricted water Capital Reserve Account to be used solely to pay for non- reimbursable capital infrastructure and debt service costs, including costs associated with reclaimed water infrastructure. The Capital Reserve Account limit shall not exceed the highest of the three most recent fiscal year Water Utility capital improvement program budgets approved by the City Council. WATER SYSTEM RELIABILITY ADJUSTMENT SUMMARY The amount of the Water System Reliability Adjustment and the data elements required to calculate the amount for the three most recent changes shall be shown in this section. Fiscal Year FY 2023/2024 FY 2024/2025 FY 2025/2026 Effective Date 4/3/2024 4/3/2025 4/3/2026 Budgeted capital expenditures less developer contributions ( a ) $ 13,018,000 $ 28,887,410 $ 21,809,000 Capital Reserve Account limit ( b ) $ 20,286,000 $ 23,564,470 $ 21,238,137 (Less Capital Reserve Account balance) ( c ) $ - $ - $ - (Less bond funds allocated for capital expenditures) ( d ) $ (13,018,000) $ (28,887,410) $ (21,809,000) (Less funds available in Balancing Account) ( e ) $ - $ - $ - Total Cash Required for Capital Expenditures (a+b+c+d+e) $ 20,286,000 $ 23,564,470 $ 21,238,137 Projected Debt Service Payments ( f ) $ 16,192,636 $ 18,628,145 $ 19,185,032 Projected Water Sales (HCF) ( g ) 21,512,233 22,057,199 22,334,985 Total Capital Costs ((a+b+c+d+e)/g) $ 0.943 $ 1.068 $ 0.951 Debt Service Costs (f/g) $ 0.753 $ 0.845 $ 0.859 Gross Water System Reliability Adjustment $ 1.696 $ 1.913 $ 1.810 (Less amount over maximum 10¢ increase) $ (0.646) $ (0.763) $ (0.560) Water System Reliability Adjustment ($/HCF) $ 1.050 $ 1.150 $ 1.250