1. CITY OF ARCATA -WATER AND WASTEWATER CAPITAL IMPROVEMENT PROGRAM: RATE SETTING

2. Capital Improvement Program Background  First adopted in 2010 the City’s CIP proactively addresses the City’s long-term needs for major capital improvements as well as upgrading and maintaining aging facilities with the goal of continuing to provide high quality services and maintaining a diverse economic base for our City.

3. Narrowing to Key Priorities  Remaining Useful Life  Infrastructure Importance  Redundancy  Environmental Enhancement  Regulatory Requirement  Impact on Annual Maintenance and Operation Cost

4. Planning for the Next 5 Years Highest Priorities Staffing Capacity 5 Year Project Commitment

5. Water Water Fund2014/20152015/20162016/20172017/20182018/2019 Water Line Replacement$750,000 $375,000 Additional Water Storage Zone 1$620,000$20,000 $600,000 Water Tank 9 Replacement$575,000$550,000 Westwood 4" AC water line replacement- east side$565,000$125,000$440,000 Water Fill Stations$85,000 Eureka Interconnection @ 14th Street$115,000 Aldergrove / West End Road Tie In$639,000$25,000 Heindon Station$75,000 Alliance Transfer Station PV$58,000 Tank Coating (Interior and Exterior)$150,000$30,000 Pumps, motors, lift stations$160,000 $40,000 Corp Yard Relocation (61-0001 and 85- 0005)$525,000$165,000$360,000 Total$4,537,000$990,000$870,000$530,000$728,000$665,000 Grand Total$3,783,000

6. Wastewater Projects Wastewater Fund2014/20152015/20162016/20172017/20182018/2019 Inflow and Infiltration Reduction $7,000,000 $3,000,000 $4,000,000 1st street pump and motor rehabilitation $195,000 Lift Station Rehabilitation (Meadowbrook, others) $280,000 $140,000 Lift Station SCADA and CCTV $105,000 $50,000 $30,000 Ultra Violet Disinfection Process / PV System $1,075,000 Development of Treatment Marsh 7 $175,000 WWTP Reconfiguration to single pass $2,300,000$300,000$2,000,000 Influent Screw Pumps Replacement $180,000 Bar Screen Replacement $200,000 Grit Chamber Replacment $250,000 Sludge Clarifiers, pumps and digester $4,045,000 $3,245,000 $800,000 Pond 2 Upgrades $155,000 Pond 1 Effluent Pipe and Weirs $275,000 Outfall 001 Long Term Disinfection $275,000 Corp Yard Relocation (61-0001 and 85-0005) $525,000 AMIC Improvements $125,000 Total $17,160,000$545,000$7,625,000$3,865,000$4,925,000$175,000 $17,135,000

7. Water and Wastewater Financing  Wastewater  Financed through the State Water Resources Control Board. Current Rate 2.1%.  Estimated at 2.3% for 20 years  Total Capital Financed $17 million  Water  Bond Financing, Energy Financing and Private Placement  Financing Estimated up to 4.5% for 20 years  Total Capital Financed 3.7 million

8. Comparison of Rates Water /Sewer Combined Inside City for 6 units of water or 4488 gallons/month2014/2015 Arcata 2014-2019$67.35-$107.43 Crescent City$86.12 Eureka$81.34 Fortuna$69.30 Fort Bragg$107.92 McKinleyville$59.80 Ukiah$125.77 Willits$104.68

9. Average Rates: 2014-2019 Water and Wastewater Charges 2014-2019 2013/20142014/20152015/20162016/20172017/20182018/2019 11% Rate Increase 8% Rate Increase Water Inside City $ 23.89 $ 26.52 $ 29.43 $ 32.67 $ 35.29 $ 38.11 Water Outside City $ 31.78 $ 35.28 $ 39.16 $ 43.46 $ 46.94 $ 50.70 Sewer Inside City $ 43.46 $ 48.24 $ 53.54 $ 59.43 $ 64.19 $ 69.32 Sewer Outside City $ 43.46 $ 48.24 $ 53.54 $ 59.43 $ 64.19 $ 69.32 Calculated at 6 units or 4488 gallons per month

10. Next Steps  Send Information to residents about rate increases and public meetings.  Hold public meetings to talk in depth about the history of the system, current state, proposed projects and timeline for rehabilitation.  Hold final public hearing.