HomeMy WebLinkAbout09/16/2025 - PacketORCHARD
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Meeting Location:
216 Prospect Street
Port Orchard, WA 98366
Finance Committee
Contact us:
Phone (360) 876-4407
cityhall@portorchardwa.gov
www. portorchardwa.gov
Finance Committee Regular Meeting
Tuesday, September 16, 2025
4:00 PM
Remote Access
Link: https://us02web.zoom.us/j/88503885688
Zoom Meeting ID: 885 0388 5688
Zoom Call -In: 1 253 215 8782
1. Call to Order
2. Discussion Items
1) Finance Department (15 mins) Finance Director, Noah Crocker
A. a. Sales Tax & REET Revenue Report
b. Preliminary Treasurers Report — Funds, accounts
c. Sewer Rates Draft Report
3. Adjournment
4. Next Finance Committee Meeting
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September 16, 2025 Meeting Agenda
1
For Committee Membership please visit https://portorchardwa.gov/city-council-advisory-committees/.
September 16, 2025 Meeting Agenda
Ong City of Port Orchard
OI'HARD 216 Prospect Street, Port Orchard, WA 98366
(360) 876-4407 • FAX (360) 895-9029
Agenda Staff Report
Discussion Items: a. Sales Tax & REET Revenue Report
b. Preliminary Treasurers Report — Funds, accounts
c. Sewer Rates Draft Report
Meeting Date: September 16, 2025
Prepared By: Noah Crocker, M.B.A., Finance Director
Presenter: Noah Crocker, M.B.A., Finance Director
Summary and Background: N/A
Relationship to Comprenhensive Plan: N/A
Recommendation: N/A
Motion for Consideration: N/A
Has item been presented to Committee/Work Study? If so, which one: N/A
Fiscal Impact: N/A
Alternatives: N/A
Attachments:
2025.08.31 Sales Tax and REET.pdf
2025.08.31 Monthly Council Budget.pdf
2025.06.10 Sewer Rate Study.pdf
Port Orchard Sewer Rates Draft Report v8 (with Appendix).pdf
3
Sales Tax Collections
Population
Summary of Budget to 2024
Actuals
2025 2026
Biennial
Budget
Actual
6,895,000
7,300,000
7,665,000
14,965,000
8,031,757
5,134,416
5,134,416
Over/Under
$ 1,136,757
$ (2,165,584)
$ (7,665,000)
$ (9,830,584)
Actuals
2024
2025 2026
Biennial
January
February
March
April
May
June
July
August
September
October
November
December
$ 631,079
723,810
609,403
574,283
681,038
685,812
708,235
726,041
704,489
685,878
649,457
652,233
$ 615,894
720,131
599,665
555,942
662,443
605,926
654,834
719,580
$ 615,894
$ 720,131
$ 599,665
$ 555,942
$ 662,443
$ 605,926
$ 654,834
$ 719,580
$ -
$ -
$ -
$ -
Total
$ 8,031,757
$ 5,134,416 $ -
$ 5,134,416
Percentage of Biennial
Budget Received
34%
Actuals
Year over Year
%
Change
Change
$ (15,184)
-2.41%
$ (3,679)
-0.51%
$ (9,739)
-1.60%
$ (18,340)
-3.19%
$ (18,595)
-2.73%
$ (79,885)
-11.65%
$ (53,401)
-7.54%
$ (6,461)
-0.89%
$ (205,285)
-3.84%
Real Estate Excise Tax (REET) Collections
Summary of Budget to
2026
Actuals
Biennial
Budget $ 1,600,000 $ 1,600,000 $ 1,600,000
Actual 2,347,499 1,509,800 -
$ 3,200,000
$ 1,509,800
Over/Under I $ 747,499 I $ (90,200)1 $ (1,600,000)
$ (1,690,200)
Actuals
2024
2025 2026
Biennial
January
February
March
April
May
June
July
August
September
October
November
December
$ 107,320
104,091
139,296
152,272
171,062
173,797
125,930
255,423
204,747
125,621
135,707
652,233
$ 213,733
161,143
211,010
157,264
238,073
188,270
191,524
148,785
$ 213,733
$ 161,143
$ 211,010
$ 157,264
$ 238,073
$ 188,270
$ 191,524
$ 148,785
$ -
$ -
$ -
$ -
Total
$ 2,347,499
$ 1,509,800 $ -
$ 1,509,800
Percentage of Biennial
Budget Received
47%
Actuals
Year over Year
Change
%
Change
$ 106,412
99.15%
$ 57,051
54.81%
$ 71,713
51.48%
$ 4,992
3.28%
$ 67,011
39.17%
$ 14,473
8.33%
$ 65,594
52.09%
$ (106,637)
-41.75%
$ 280,609
23%
Budget
2025 estimated
Budget vs Actual
%
based on 5yr avg
(Over/Under)
Over/Under
$ 561,000
$ 54,895
9.8%
$ 645,310
$ 74,821
11.6%
$ 521,241
$ 78,424
15.0%
$ 501,257
$ 54,685
10.9%
$ 601,296
$ 61,148
10.2%
$ 608,033
$ (2,107)
-0.3%
$ 646,839
$ 7,995
1.2%
$ 679,582
$ 39,998
5.9%
$ 651,563
#VALUE!
$ 630,210
#VALUE!
$ 649,683
#VALUE!
$ 603,988
#VALUE!
$ 7,300,000
$ 369,859
7.76%
Budget
2025 estimated
Budget vs Actual
%
based on 5yr avg
(Over/Under)
Over/Under
$ 67,796
$ 145,937
215.3%
$ 117,049
$ 44,093
37.7%
$ 123,737
$ 87,272
70.5%
$ 111,723
$ 45,541
40.8%
$ 111,590
$ 126,482
113.3%
$ 143,720
$ 44,549
31.0%
$ 205,086
$ (13,562)
-6.6%
$ 139,015
$ 9,771
7.0%
$ 168,193
#VALUE!
$ 118,087
#VALUE!
$ 97,079
#VALUE!
$ 196,925
#VALUE!
$ 1,600,000
$ 490,084
48%
RCD
O.H� _AR
MONTHLY BUDGET FINANCIAL STATUS UPDATE
To: Mayor and Council members
From: Noah Crocker, Finance Director
Period: August 2025
OVERVIEW:
The Finance Department is committed to providing clear information to the Mayor, Council, and staff regarding
the budget status of the city. We have prepared the following reports to keep you up to date on the current
budget status of the city.
1) Budget Report
2) Detail Fund Summary Report
BUDGET REPORT:
The Budget report will first provide Operational Funds and follow up with Capital Projects Funds. This report does
not include beginning fund balance. This report is designed to provide a high-level view of each fund reviewing
total revenues and expenses. The report does provide expense information by department. The goal of the city is
to pay all current budget year expenses with current budget year revenues. We are not quite there yet, and this
will show in the Surplus (Deficit) line at the end of each fund. We expect that future budget cycles will smooth out
revenues and expenditures
The Budget Report provides information on current revenues and expenditures by fund including the following:
• The original budgeted amount.
• Current budget which would reflect any amendments that have been made.
• Period activity which details the revenue and expense activity for the period in which the report was run.
• Fiscal activity will provide the year-to-date expense and revenue amounts.
• Variance Shows the difference between budgeted and actual.
• The percentage remaining is the amount still needed to reach the budgeted amount.
CASH AND INVESTMENT FUND SUMMARY
The Cash and Investment Fund Summary provides information on current total cash & investment balances by
Fund.
5
POINTS OF INTEREST:
Current Expense Fund 001 —The Current Expense Fund is used for the general governmental functions of the City.
As of August 31, 2025, 81% of budgeted revenues were received.
The table provides budget versus actual (YTD) data by source of revenue.
i
•
Property Tax
2,652,000
2,652,000
1,425,748
53.76%
Sales Tax
7,300,000
7,300,000
5,134,416
70.33%
Other Taxes
2,746,400
2,746,400
2,374,906
86.47%
Total Taxes
12,698,400
12,698,400
8,935,069
70.36%
Licenses & Permits
853,000
853,000
1,127,520
132.18%
Intergovernmental Revenue
296,000
296,000
316,769
107.02%
Charges for Goods & Services
474,000
474,000
607,055
128.07%
Fines & Penalties
117,500
117,500
105,897
90.12%
Misc Revenues
142,238
142,238
711,688
500.35%
Non -Revenues
-
-
7,190
#DIV/0!
Other Financing
#DIV/0!
(Capital Contributions)
-
-
-
REVENUE TOTALS 14,581,138 14,581,138 11,811,187 81.00%
SALES TAX REVENUES SUMMARY
1
24,815
719,580
216,956
961,351
267,336
19,777
88,110
15,836
111,642
212
• Total 2025 Budget: $7,300,000
• Total 2025 YTD Actuals: $5,134,416
• Year -to -Date Actual revenue collected is 3.84% lower when compared to Prior Year -to -Date Actuals
• Year -to -Date Actual revenue collected is 7.76% higher when compared to Year -to -Date Budgeted
The following tables provide additional sales tax information:
Table 1: shows revenue received by month over a three-year period.
6
Monthly Sales Tax -Three Year Comparison
s00,000
700,000
�i033 Mutl
600,000
303C YfD4nw1
500,000
� 2@5 YfDGnwl
400,000
U�
300,000
V
200,000
100,000
0
-
S`JaIJ
PQ�\ �aa lJce s
�\ec
CratK
P S' O`/ ,QS
,e.
Table 2: provides current
data for sales tax revenue
collected Year-to-date.
Sales Tax Revenues
Ssoo,000
$700,000
$600,000
$500,000
$400,000—a.e�m=
$300,000
$200,000
$100,000
c� �J � i. as ce �� s� ec e� ec
,2°Ja e°�Ja �a� pQ �S J �J J ego Oho ,e�ro `ego
F `ieQ� �o Oe
ENTERPRISE/UTILITY FUNDS OPERATIONS:
Water operation - Water operations budgeted revenue in the amount of $4,305,885 for 2025. Through August,
the city has received $3,020,941 or "70% of the 2025 budgeted revenues. Revenues for the water utility, in
winter and spring, are typically lower with larger monthly revenues received during the warmer summer and fall
months. Water Operations expended $2,358,324 through August representing "60% of the 2025 budget. In
addition, the water operational budget includes transfers which occur throughout the year. The City manages its
transfers according to policy goals, cashflow needs, and realized expenses for water capital projects, stabilization
targets, and debt service payments. The 2025 budget includes $1,944,700 for transfers. A total of $14,751 was
transferred to fund 413 for Well 11, Melcher Pump Station, and SR166/Bay Street Reconstruction.
7
Water Service Payments
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
■ 2023
■ 2024
■ 2025
so too
Storm Drainage operations- Storm Operations budgeted revenue in the amount of $2,448,800 for 2025. Through
August, the city has received $2,401,855 or "99% of its annual budgeted revenue. Storm Drainage Operations
expended $1,386,889 through August, representing "63% of the 2025 operating budget. The storm drainage
operational budget includes transfers which occur throughout the year. The City manages its transfers according
to policy goals, cashflow needs, and realized expenses for storm capital projects, stabilization targets, and debt
service payments. The 2025 budget includes $723,800 for transfers. A total of $148,789 was transferred for debt
service payments related to LTGO 2017 Tremont.
Storm Drainage Payments
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
■ 2023
■ 2024
■ 2025
Sewer operation — Sewer operations budgeted revenue in the amount of $6,071,750 is budgeted for 2025.
Through August, the city has received $4,820,563 or "80% of the 2025 budgeted revenues. Sewer Operations
expended $3,254,523 through August representing —58% of the 2025 budget. The sewer operational expense
budget includes transfers which occur throughout the year. The City manages its transfers according to policy
goals, cashflow needs, and realized expenses for sewer capital projects, stabilization targets, and debt service
8
payments. The 2025 budget includes $4,483,087 for transfers. A total of $7,263 was transferred to fund 433 for
Marina Pump Station, and SR166/Bay Street Reconstruction.
Sewer Service Payments
800,000
700,000
600,000
500,000
400,000
I'll'
300,000
200,000
100,000
Jan Feb Mar Apr May Jun
Jul Aug Sep Oct
■ 2023
■ 2024
■ 2025
Nov Dec
Real Estate Excise Tax (REET) Fund 109 and Impact Mitieation Fee Fund 111
The City's Real Estate Excise Tax receipts fluctuate monthly. August 2025 receipts are Lower than August 2024 by
41%. Total Real estate Excise Tax revenues have a YTD growth rate of 23%. The table below shows balances
through August for REET 1 & 2 and Impact fees. These restricted funds are used as a local funding source for
capital projects that have been documented in the City's comprehensive plans. REET funds are also used for debt
payments.
1
2025-2026 Beginning Balance
3,916,725
374,571 213,790
6,847,926
1,903,311
4,620,216 29,984 - 93,800
2025-2026 Revenue Received*
2025-2026 Expenses Budgeted
2025-2026 Obligated Expenses
1,622,055
(997,000)
(4,541,781)
10,680 127,607
(300,000) -
(85,250) (341,397)
2,120,657
(3,969,532)
(4,190,561)
815,312
(3,217,200)
(183,800)
889,878 - 374,384 -
(5,032,100) (29,984) (807,519) (93,800)
(600,000) - -
2025-2026 Ending Balance
-
- -
808,489
(682,378)
(122,006) (0) (433,135)1 -
The table above shows 2025 beginning fund balances, biennial revenue received to date, expenses budgeted for
the biennium and expenses which are obligated for future projects but have not yet been officially budgeted. The
intent of this table is to snapshot and illustrate available balances and what is projected for the end of the
biennium.
Impact Fees received for August 2025 are as follows:
o Parks $506,191
o Transportation $778,714
o School District Impact $108,781
REET revenues received in August:
o REET1$74,392
$74,392
o REET2$74,392
$74,392
9
CAPITAL CONSTRUCTION BUDGET PROGRESS
Capital Construction Fund 302: The following General capital projects are in progress:
1) Project Account #15 -City Hall Remodel
a. City Staff Time, Construction —Nearing completion
2) Project Account #18 -South Kitsap Community Events Center including Plaza
a. City Staff Time, Design Consulting Services
3) Project Account #53 -Givens Park Sport Court Remodel
a. City Staff Time, Design Consulting Services, under construction
Street Capital Construction Fund 304: The following Street capital projects are in progress:
1) Project Account #11 -TIP 1.1 Bay St Pedestrian Path ROW
a. City Staff Time, Right of Way Consulting Services
2) Project Account #45 -TIP 1.14 Sidney non -motorized
a. City Staff Time, Design Consulting Services
3) Project Account #41 -TIP 1.15 Pottery Ave Non -Motorized
a. -COMPLETED
4) Project Account #42 -TIP 1.16 SR166/Bay Street Re -Construction
a. City Staff Time, Design Consulting Services
5) Project Account #47 -TIP 1.18 Tremont Phase 2 &3
a. City Staff Time, Design Consulting Services
6) Project Account #27 -TIP 1.2 Bay St Pedestrian Path Construction
a. City Staff Time, Design Consulting Services
7) Project Account #22 -TIP 1.7 Bethel Phase 5a -Mitchel Roundabout
a. City Staff Time, Construction Mgmt. Services, Construction
8) Project Account #38 -TIP 1.8 & 1.9 Blueberry & Salmonberry
a. City Staff Time, Design Consulting Services
9) Project Account #65 -TIE 1.4 Anderson Hill RAB
a. City Staff Time,
10) Project Account #66 -TIP 1.19 SB 160 2A
a. City Staff Time,
Water Capital Construction Fund 413: The following Water capital projects are in progress:
1) Project Account #16 -Water CIP #3 -Well 11 Treatment and Pumping Site Improvements
a. City Staff Time, Design Services, Construction -Nearly complete
2) Project Account #36 -Water CIP #10-Melcher Pump Station Rehab
a. City Staff Time, Design Services,
3) Project Account #41 -Pottery Ave Non -Motorized (Water)
a. COMPLETED
4) Project Account #42 -Water CIP#19a Water Main- SR166Bay Water Re -Construction
a. City Staff Time, Design Services
5) Project Account #60 -Well #7
a. Nothing at this time
10
6) Project Account #67 -Water CIP #22 Foster Mitigation
a. City Staff Time,
7) Project Account #70 -Water CIP #08 Old Clifton Water Main 390-580 Intertie
a. City Staff Time, Design Service
Storm Drainage Capital Construction Fund 423: The following Storm Capital projects are in progress:
1) Project Account #41- Pottery Ave Non -Motorized (Storm)
a. COMPLETED
2) Project Account #42 -TIP 1.16 SR166/Bay Street Re -Construction
a. City Staff Time, Design Services
3) Project Account #68 -South Sidney Regional Stormwater Facility
a. City Staff Time, Design Services
4) Project Account #72 -Ruby Creek Culvert Replacement
a. City Staff Time, Design
Sewer Capital Construction Fund 433: The following Sewer capital projects are in progress:
1) Project Account #04 -Sewer CIP #1 -Marina SW Pump Station
a. City Staff Time, Design Services, Construction
2) Project Account #37 -Sewer Lift Station Controls Upgrade
a. City Staff Time, Design Services
3) Project Account #41 -Pottery Ave Non -Motorized (Sewer)
a. COMPLETED
4) Project Account #42 -TIP 1.16 SR166/Bay Street Re -Construction
a. City Staff Time, Design Services
5) Project Account #43-SWCIP # SB South Sidney Lift Station (Ruby Creek)
a. City Staff Time, Design Services
6) Project Account #45-2 Sidney Force Main
a. City Staff Time, Design Services
7) Project Account #58 -Bay Street Sewer Lift Station Design
a. City Staff Time, Design Services
11
Budget Report OPERATING BUDGET For Fiscal: 2025 Period Ending: 08/31/2025
Group Summary
Variance
Original
Current
Period
Fiscal
Favorable Percent
Departmen...
Total Budget
Total Budget
Activity
Activity
(Unfavorable) Remaining
Fund: 001 - Current Expense
Revenue
00 - Revenues
14,581,138.07
14,581,138.07
1,464,264.50
11,811,186.78
-2,769,951.29 19.00%
Revenue Total: 14,581,138.07
14,581,138.07
1,464,264.50
11,811,186.78
-2,769,951.29 19.00%
Expense
01- Finance
1,208,345.51
1,208,345.51
91,530.46
625,794.27
582,551.24
48.21%
02 - Court
663,800.00
663,800.00
53,087.69
334,760.85
329,039.15
49.57%
03 - Law Enforcement
6,693,982.59
6,693,982.59
568,782.95
3,973,590.47
2,720,392.12
40.64%
04 - Community Development
3,292,767.68
3,292,767.68
356,614.34
1,961,059.41
1,331,708.27
40.44%
05 - Public Works
2,270,214.22
2,270,214.22
183,165.75
1,505,324.07
764,890.15
33.69%
06 - Miscellaneous
1,863,000.00
1,817,594.09
1,513.19
65,384.94
1,752,209.15
96.40%
07 - Administration
2,098,917.00
2,098,917.00
117,616.95
1,103,696.57
995,220.43
47.42%
Expense Total: 18,091,027.00
18,045,621.09
1,372,311.33
9,569,610.58
8,476,010.51
46.97%
Fund: 001- Current Expense Surplus (Deficit): -3,509,888.93 -3,464,483.02 91,953.17 2,241,576.20 5,706,059.22 164.70%
Fund: 002 - City Street Fund
Revenue
00 - Revenues
4,072,866.00 4,072,866.00 179,244.26 1,922,874.34 -2,149,991.66 52.79%
Revenue Total: 4,072,866.00 4,072,866.00 179,244.26 1,922,874.34 -2,149,991.66 52.79%
Expense
05 - Public Works
4,043,805.00
4,043,805.00
261,921.64
1,396,397.12
2,647,407.88
65.47%
06 -Miscellaneous
2,439,100.00
2,439,100.00
0.00
0.00
2,439,100.00
100.00%
Expense Total:
6,482,905.00
6,482,905.00
261,921.64
1,396,397.12
5,086,507.88
78.46%
Fund: 002 - City Street Fund Surplus (Deficit):
-2,410,039.00
-2,410,039.00
-82,677.38
526,477.22
2,936,516.22
121.85%
Fund: 003 - Stabilization Fund
Revenue
00 - Revenues
130,000.00
130,000.00
12,258.11
95,437.30
-34,562.70
26.59%
Revenue Total:
130,000.00
130,000.00
12,258.11
95,437.30
-34,562.70
26.59%
Fund: 103 - Criminal Justice
Revenue
00 - Revenues
Fund: 003 - Stabilization Fund Total:
130,000.00 130,000.00 12,258.11 95,437.30 -34,562.70 26.59%
438,800.00 438,800.00 41,581.59 326,975.27 -111,824.73 25.48%
Revenue Total: 438,800.00 438,800.00 41,581.59 326,975.27 -111,824.73 25.48%
Expense
03 - Law Enforcement 651,800.00 651,800.00 298,383.12 456,687.31 195,112.69 29.93%
Expense Total: 651,800.00 651,800.00 298,383.12 456,687.31 195,112.69 29.93%
Fund: 103 - Criminal Justice Surplus (Deficit): -213,000.00 -213,000.00 -256,801.53 -129,712.04 83,287.96 39.10%
Fund: 104 - Special Investigative Unit
Revenue
00 - Revenues
n nn
Revenue Total: 0.00
0.00 384.41 2,950.97 2,950.97 0.00%
0.00 384.41 2,950.97 2,950.97 0.00%
Expense
03 - Law Enforcement
4,000.00
4,000.00
0.00
-300.00
4,300.00
107.50%
Expense Total:
4,000.00
4,000.00
0.00
-300.00
4,300.00
107.50%
Fund: 104 - Special Investigative Unit Surplus (Deficit):
-4,000.00
-4,000.00
384.41
3,250.97
7,250.97
181.27%
Fund: 107 - Community Events
Revenue
00 - Revenues
102,200.00
102,200.00
23,049.28
128,241.30
26,041.30
25.48%
Revenue Total:
102,200.00
102,200.00
23,049.28
128,241.30
26,041.30
25.48%
Expense
07 - Administration
102,200.00
102,200.00
2,225.96
10,934.36
91,265.64
89.30%
9/9/2025 4:38:44 PM
Page 14 of 18
12
Budget Report For Fiscal: 2025 Period Ending: 08/31/2025
Variance
Original Current Period Fiscal Favorable Percent
Departmen... Total Budget Total Budget Activity Activity (Unfavorable) Remaining
Expense Total
Fund: 107 - Community Events Surplus (Deficit)
Fund: 108 - Paths & Trails
Revenue
00 - Revenues 1,000.00 1,000.00 231.10 1,400.81 400.81 40.08%
Revenue Total: 1,000.00 1,000.00 231.10 1,400.81 400.81 40.08%
Fund: 108 - Paths & Trails Total: 1,000.00 1,000.00 231.10 1,400.81 400.81 40.08%
102,200.00 102,200.00 2,225.96 10,934.36 91,265.64 89.30%
0.00 0.00 20,823.32 117,306.94 117,306.94 0.00%
Fund: 109 - Real Estate Excise Tax
Revenue
00 - Revenues
1,600,900.00
1,600,900.00
175,682.58
1,705,189.36
104,289.36
6.51%
Revenue Total:
1,600,900.00
1,600,900.00
175,682.58
1,705,189.36
104,289.36
6.51%
Expense
06 - Miscellaneous
7,003,900.00
7,003,900.00
337,630.72
720,631.14
6,283,268.86
89.71%
Expense Total:
7,003,900.00
7,003,900.00
337,630.72
720,631.14
6,283,268.86
89.71%
Fund: 109 - Real Estate Excise Tax Surplus (Deficit):
-5,403,000.00
-5,403,000.00
-161,948.14
984,558.22
6,387,558.22
118.22%
Fund: 111- Impact Mitigation Fee
Revenue
00 - Revenues
2,915,138.00
2,915,138.00
1,444,152.44
4,255,382.81
1,340,244.81
45.98%
Revenue Total:
2,915,138.00
2,915,138.00
1,444,152.44
4,255,382.81
1,340,244.81
45.98%
Expense
06 - Miscellaneous
5,600,107.00
5,423,607.00
180,018.00
622,460.68
4,801,146.32
88.52%
Expense Total:
5,600,107.00
5,423,607.00
180,018.00
622,460.68
4,801,146.32
88.52%
Fund: 111 - Impact Mitigation Fee Surplus (Deficit):
-2,684,969.00
-2,508,469.00
1,264,134.44
3,632,922.13
6,141,391.13
244.83%
Fund: 206 - Bond Redemption Fund
Revenue
00 - Revenues
1,247,500.00
1,247,500.00
278,298.05
525,427.90
-722,072.10
57.88%
Revenue Total:
1,247,500.00
1,247,500.00
278,298.05
525,427.90
-722,072.10
57.88%
Expense
06 - Miscellaneous
996,900.00
996,900.00
276,322.80
510,049.35
486,850.65
48.84%
Expense Total:
996,900.00
996,900.00
276,322.80
510,049.35
486,850.65
48.84%
Fund: 206 - Bond Redemption Fund Surplus (Deficit):
250,600.00
250,600.00
1,975.25
15,378.55
-235,221.45
93.86%
Fund: 411 - Water Operating
Revenue
00 - Revenues
4,305,885.00
4,305,885.00
594,089.08
3,020,941.60
-1,284,943.40
29.84%
Revenue Total:
4,305,885.00
4,305,885.00
594,089.08
3,020,941.60
-1,284,943.40
29.84%
Expense
05 - Public Works
4,066,174.99
4,066,174.99
338,154.39
2,358,324.40
1,707,850.59
42.00%
06 - Miscellaneous
1,944,700.00
1,944,700.00
14,751.23
108,111.43
1,836,588.57
94.44%
Expense Total:
6,010,874.99
6,010,874.99
352,905.62
2,466,435.83
3,544,439.16
58.97%
Fund: 411 - Water Operating Surplus (Deficit):
-1,704,989.99
-1,704,989.99
241,183.46
554,505.77
2,259,495.76
132.52%
Fund: 412 - Water Stabilization
Revenue
00 - Revenues
0.00
0.00
4,472.91
34,824.42
34,824.42
0.00%
Revenue Total:
0.00
0.00
4,472.91
34,824.42
34,824.42
0.00%
Fund: 412 - Water Stabilization Total:
Fund: 414 - Water Debt Service
Revenue
00 - Revenues
Expense
06 - Miscellaneous
0.00
0.00
4,472.91
34,824.42
34,824.42 0.00%
1,340,500.00
1,340,500.00
68,905.94
190,937.82
-1,149,562.18
85.76%
Revenue Total: 1,340,500.00
1,340,500.00
68,905.94
190,937.82
-1,149,562.18
85.76%
1,340,400.00
1,340,400.00
64,000.00
152,741.86
1,187,658.14
88.60%
9/9/2025 4:38:44 PM Page 15 of 18
13
Budget Report For Fiscal: 2025 Period Ending: 08/31/2025
Variance
Original Current Period Fiscal Favorable Percent
Departmen... Total Budget Total Budget Activity Activity (Unfavorable) Remaining
Expense Total
Fund: 414 - Water Debt Service Surplus (Deficit)
Fund: 421 - Storm Drainage Utility
Revenue
00 - Revenues 2,448,800.00 2,448,800.00 276,490.66 2,401,855.92 -46,944.08 1.92%
Revenue Total: 2,448,800.00 2,448,800.00 276,490.66 2,401,855.92 -46,944.08 1.92%
1,340,400.00 1,340,400.00 64,000.00 152,741.86 1,187,658.14 88.60%
100.00 100.00 4,905.94 38,195.96 38,095.9638,095.96%
Expense
05 - Public Works
2,199,044.90
2,199,044.90
471,951.34
1,386,889.43
812,155.47
36.93%
06 - Miscellaneous
723,800.00
723,800.00
148,789.20
191,361.62
532,438.38
73.56%
Expense Total:
2,922,844.90
2,922,844.90
620,740.54
1,578,251.05
1,344,593.85
46.00%
Fund: 421 - Storm Drainage
Utility Surplus (Deficit):
-474,044.90
-474,044.90
-344,249.88
823,604.87
1,297,649.77
273.74%
Fund: 422 - Storm Drainage Stabilization
Revenue
00 - Revenues
75,000.0075,000.002,298.5317,895.53-57,104.4776.14%
Revenue Total:
75,000.00
75,000.00
2,298.53
17,895.53
-57,104.47
76.14%
Fund: 422 - Storm Drainage Stabilization Total:
75,000.00
75,000.00
2,298.53
17,895.53
-57,104.47
76.14%
Fund: 424 - Storm Drainage Debt Service
Revenue
00 - Revenues
444,000.00444,000.00148,789.20190,622.47-253,377.5357.07%
Revenue Total:
444,000.00
444,000.00
148,789.20
190,622.47
-253,377.53
57.07%
Expense
06 - Miscellaneous
221,000.00
221,000.00
148,789.20
190,622.47
30,377.53
13.75%
Expense Total:
221,000.00
221,000.00
148,789.20
190,622.47
30,377.53
13.75%
Fund: 424 - Storm Drainage Debt Service Surplus (Deficit):
223,000.00
223,000.00
0.00
0.00
-223,000.00
100.00%
Fund: 431 - Sewer Operating
Revenue
00 - Revenues
6,071,750.00
6,071,750.00
689,190.23
4,820,562.22
-1,251,187.78
20.61%
Revenue Total:
6,071,750.00
6,071,750.00
689,190.23
4,820,562.22
-1,251,187.78
20.61%
Expense
05 - Public Works
5,661,694.90
5,661,694.90
509,397.69
3,254,523.17
2,407,171.73
42.52%
06 - Miscellaneous
2,083,075.00
4,483,087.01
7,263.32
1,413,365.45
3,069,721.56
68.47%
Expense Total:
7,744,769.90
10,144,781.91
516,661.01
4,667,888.62
5,476,893.29
53.99%
Fund: 431 - Sewer Operating Surplus (Deficit):
-1,673,019.90
-4,073,031.91
172,529.22
152,673.60
4,225,705.51
103.75%
Fund: 432 - Sewer Stabilization
Revenue
00 - Revenues
0.00
0.00
6,504.31
50,640.14
50,640.14
0.00%
Revenue Total:
Fund: 432 - Sewer Stabilization Total:
0.00 0.00 6,504.31 50,640.14 50,640.14 0.00%
0.00 0.00 6,504.31 50,640.14 50,640.14 0.00%
Fund: 434 - Sewer Debt Service
Revenue
00 - Revenues 1,081,900.001,081,900.005,829.2190,914.33-990,985.6791.60%
Revenue Total: 1,081,900.00 1,081,900.00 5,829.21 90,914.33 -990,985.67 91.60%
Expense
06 - Miscellaneous
1,081,500.00
1,081,500.00
0.00
45,530.26
1,035,969.74
95.79%
Expense Total:
1,081,500.00
1,081,500.00
0.00
45,530.26
1,035,969.74
95.79%
Fund: 434 - Sewer Debt Service Surplus (Deficit):
400.00
400.00
5,829.21
45,384.07
44,984.0711,246.02%
Fund: 500 - Equipment Rental and Revolving
Revenue
00 - Revenues
1,954,800.001,954,800.00949,356.511,675,208.13
-279,591.8714.30%
Revenue Total:
1,954,800.00
1,954,800.00
949,356.51
1,675,208.13
-279,591.87
14.30%
Expense
10 - ER&R
3,110,600.00
3,127,600.00
234,838.88
1,200,504.57
1,927,095.43
61.62%
9/9/2025 4:38:44 PM Page 16 of 18
14
Budget Report
Departmen...
For Fiscal: 2025 Period Ending: 08/31/2025
Variance
Original Current Period Fiscal Favorable Percent
Total Budget Total Budget Activity Activity (Unfavorable) Remaining
Expense Total: 3,110,600.00 3,127,600.00
Fund: 500 - Equipment Rental and Revolving Surplus (Deficit): -1,155,800.00 -1,172,800.00
Report Surplus (Deficit): -18,552,651.72 -20,747,757.82
234,838.88 1,200,504.57 1,927,095.43 61.62%
714,517.63 474,703.56 1,647,503.56 140.48%
1,698,324.08 9,681,024.22 30,428,782.04 146.66%
9/9/2025 4:38:44 PM
Page 17 of 18
15
Budget Report CAPITAL BUDGET For Fiscal: 2025 Period Ending: 08/31/2025
Group Summary
Variance
Original Current Period Fiscal Favorable Percent
Account Typ... Total Budget Total Budget Activity Activity (Unfavorable) Remaining
Fund: 302 - Capital Construction
Revenue
2,172,300.00
1,942,635.57
4,289.46
214,621.63
-1,728,013.94
88.95%
Expense
4,742,100.00
3,207,039.74
233,780.21
1,183,113.41
2,023,926.33
63.11%
Fund: 302 - Capital Construction Surplus (Deficit):
-2,569,800.00
-1,264,404.17
-229,490.75
-968,491.78
295,912.39
23.40%
Fund: 304 - Street Capital Projects
Revenue
20,240,280.00
20,240,280.00
162,556.51
1,357,461.49
-18,882,818.51
93.29%
Expense
20,947,500.00
20,281,588.64
193,949.30
878,622.55
19,402,966.09
95.67%
Fund: 304 - Street Capital Projects Surplus (Deficit):
-707,220.00
-41,308.64
-31,392.79
478,838.94
520,147.58
1,259.17%
Fund: 413 - Water Capital
Revenue
8,124,800.00
8,124,800.00
1,297,607.12
4,931,208.84
-3,193,591.16
39.31%
Expense
8,432,800.00
8,432,800.00
81,000.17
695,607.21
7,737,192.79
91.75%
Fund: 413 - Water Capital Surplus (Deficit):
-308,000.00
-308,000.00
1,216,606.95
4,235,601.63
4,543,601.63
1,475.20%
Fund: 423 - Storm Drainage Capital Facil
Revenue
1,273,500.00
1,273,500.00
281,654.85
936,423.19
-337,076.81
26.47%
Expense
1,460,000.00
1,460,000.00
1,671.60
2,564.71
1,457,435.29
99.82%
Fund: 423 - Storm Drainage Capital Facil Surplus (Deficit):
-186,500.00
-186,500.00
279,983.25
933,858.48
1,120,358.48
600.73%
Fund: 433 - Sewer Capital
Revenue 16,135,800.00 15,023,176.98 881,588.55 6,454,177.40 -8,568,999.58 57.04%
Expense 16,729,825.00 17,343,280.31 80,585.41 3,555,626.94 13,787,653.37 79.50%
Fund: 433 - Sewer Capital Surplus (Deficit): -594,025.00 -2,320,103.33 801,003.14 2,898,550.46 5,218,653.79 224.93%
Report Surplus (Deficit): -4,365,545.00 -4,120,316.14 2,036,709.80 7,578,357.73 11,698,673.87 283.93%
9/9/2025 5:54:26 PM Page 3 of 4
16
CASH & INVESTMENT
Detail Report Date Range: 08/01/2025 - 08/31/2025
Fund Summary
Fund
Beginning Balance
Total Activity
Ending Balance
001- Current Expense
20,585,775.85
91,953.17
20,677,729.02
002 - City Street Fund
5,057,517.49
-82,677.38
4,974,840.11
003 - Stabilization Fund
3,318,564.23
12,258.11
3,330,822.34
103 - Criminal Justice
703,915.85
-256,801.53
447,114.32
104 -Special Investigative Unit
107,962.42
384.41
108,346.83
107 - Community Events
568,867.33
20,823.32
589,690.65
108 - Paths & Trails
19,159.09
231.10
19,390.19
109 - Real Estate Excise Tax
7,670,033.37
-161,948.14
7,508,085.23
111- Impact Mitigation Fee
13,583,513.75
1,264,134.44
14,847,648.19
206 - Bond Redemption Fund
530,773.93
1,975.25
532,749.18
302 - Capital Construction
828,975.35
-229,490.75
599,484.60
304 - Street Capital Projects
1,462,343.72
-31,392.79
1,430,950.93
401- Water -Sewer Utilities
0.00
0.00
0.00
403 - Water -Sewer Cumulative Reserve
0.00
0.00
0.00
411- Water Operating
3,067,484.78
241,183.46
3,308,668.24
412 - Water Stabilization
1,201,927.46
4,472.91
1,206,400.37
413 - Water Capital
11,455,817.94
1,216,606.95
12,672,424.89
414 - Water Debt Service
1,318,294.75
4,905.94
1,323,200.69
421- Storm Drainage Utility
3,496,097.82
-344,249.88
3,151,847.94
422 - Storm Drainage Stabilization
617,645.00
2,298.53
619,943.53
423 - Storm Drainage Capital Facil
1,596,267.33
279,983.25
1,876,250.58
424 - Storm Drainage Debt Service
0.00
0.00
0.00
431- Sewer Operating
8,734,526.97
172,529.22
8,907,056.19
432 - Sewer Stabilization
1,747,790.63
6,504.31
1,754,294.94
433 - Sewer Capital
12,292,216.41
801,003.14
13,093,219.55
434 - Sewer Debt Service
1,566,383.45
5,829.21
1,572,212.66
500 - Equipment Rental and Revolving
5,248,814.96
714,517.63
5,963,332.59
631- Trust and Agency
11,294.62
4,606.00
15,900.62
632 - Wastewater Treatment Facil Fee
8,894,314.88
345,679.85
9,239,994.73
Grand Total:
115,686,279.38
4,085,319.73
119,771,599.11
9/9/2025 5:38:33 PM
Page 5 of 5
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❖>FCS
a Bowman company
August 6, 2025
Noah Crocker, Finance Director
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
Re: DRAFT Sewer Utility: Revenue Requirement, Cost -of -Service Analysis, and Rate Design
Dear Mr. Crocker:
FCS, a Bowman company, is pleased to submit this report summarizing the results of the revenue requirement,
cost -of -service, and rate design study for the City's sewer utility. We want to thank you and City staff for your
assistance and participation in data collection, analysis review, and discussion of key policy topics.
It has been a pleasure to work with you and other City staff on this effort. Please let us know if you have any
questions or need additional information. Tage Aaker, the study's project manager, can be reached at (425) 615-
6487 or Tage.Aaker@bowman.com.
Sincerely,
John Ghilarducci
Principal
Tage Aaker
Senior Project Manager
Zech Hazel
Assistant Project Manager
•:> FCS
fcsgroup.com I bowman.com 51
City of Port Orchard
Sewer Rate Study
Contents
August 2025
page ii
Exhibits................................................................................................................................................................................................................................ iii
1. Introduction...................................................................................................................................................................................................................1
Background...................................................................................................................................................................................................................1
RevenueRequirement Forecast............................................................................................................................................................................1
Costof Service Analysis............................................................................................................................................................................................2
RateDesign...................................................................................................................................................................................................................2
2. Fiscal Policies.................................................................................................................................................................................................................3
OperatingReserve — Fund 431..............................................................................................................................................................................3
CapitalReserve — Fund 433....................................................................................................................................................................................3
AdoptedCity Fiscal Policies....................................................................................................................................................................................4
StabilizationReserve — Fund 432.........................................................................................................................................................................4
DebtManagement.....................................................................................................................................................................................................4
Summaryof Fiscal Policies......................................................................................................................................................................................6
3. Revenue Requirement...............................................................................................................................................................................................7
FundBalances.............................................................................................................................................................................................................. 7
Economicand Inflation Factors.............................................................................................................................................................................7
Operating Revenues and Expenses.....................................................................................................................................................................8
CapitalImprovement Program(CIP)...................................................................................................................................................................8
OverallRevenue Requirement Forecast..........................................................................................................................................................10
4. Cost -of -Service Analysis.........................................................................................................................................................................................12
Background.................................................................................................................................................................................................................12
FunctionalCost Allocation....................................................................................................................................................................................12
CustomerClass Distinctions.................................................................................................................................................................................13
CostAllocation...........................................................................................................................................................................................................14
5. Rate Design..................................................................................................................................................................................................................15
Background.................................................................................................................................................................................................................15
RateDesign.................................................................................................................................................................................................................15
6. Summary.......................................................................................................................................................................................................................16
UpdatingThis Study's Findings...........................................................................................................................................................................16
RateComparisons....................................................................................................................................................................................................16
AppendixA: Existing Rate Schedule.......................................................................................................................................................................17
•:;>FCS
,,. �,a fcsgroup.com bowman.com 52
City of Port Orchard
Sewer Rate Study
Exhibits
August 2025
page iii
Exhibit 1.
Revenue Requirement Diagram........................................................................................................................................1
Exhibit 2.
Cost -of -Service Analysis Overview...................................................................................................................................2
Exhibit3.
Summary of Fiscal Policies..................................................................................................................................................6
Exhibit4.
Allocation of Utility Cash......................................................................................................................................................7
Exhibit 5.
Economic and Inflation Factors.........................................................................................................................................7
Exhibit 6.
Capital Improvement Program (2025-2030)................................................................................................................9
Exhibit 7.
Capital Funding (2025-2030)..............................................................................................................................................9
Exhibit 8.
Annual Revenue Requirement Forecast (2025-2030).............................................................................................10
Exhibit 9.
Fund Balance Forecast (2025-2030)..............................................................................................................................11
Exhibit 10.
Functional Allocation (2026).............................................................................................................................................13
Exhibit 11.
Customer Statistics by Class (2026)...............................................................................................................................13
Exhibit 12.
Cost -of -Service Analysis Results (2026).......................................................................................................................14
Exhibit13.
Rate Design (2026)...............................................................................................................................................................15
Exhibit 14.
Calculated Bi-Monthly Rates per ERU (2026-2030).................................................................................................15
Exhibit 15.
Jurisdictional Survey — Bi-Monthly Single-family Rates (10 CCF of Sewer Flow) .........................................16
•:;>FCS
.• - ,Y ksgroup.com I bowman.com 53
1. Introduction
Background
The City of Port Orchard (City) is located in Kitsap County and provides sewer collection services to most of the
residents of Port Orchard, with treatment services provided by the West Sound Utility District (WSUD). The City
charges bi-monthly sewer rates to cover both collection and treatment costs.
The City along with WSUD jointly own the South Kitsap Water Reclamation Facility (SKWRF), which provides
treatment services to customers in both jurisdictions. The Wastewater Facilities Management Interlocal
Agreement (the Joint Agreement) describes the operation of the SKWRF and the division of operating and capital
costs. Under the Joint Agreement, each jurisdiction splits the operating costs of the SKWRF based on the number
of equivalent residential units (ERUs) in each jurisdiction, where one ERU is equal to 180 gpd of sewer flow. As of
2024, the City was allocated about 49 percent of the total ERUs and WSUD was allocated 51 percent.
In 2023, the City contracted with FCS, a Bowman Company (FCS), to perform a rate study for its sewer utility. This
study includes the elements that are outlined in the sections below and documented in the rest of the report.
Section 6 summarizes the rate study results and outlines the City's implementation steps.
Revenue Requirement Forecast
The first purpose of this rate study is to develop a funding plan ("revenue requirement") for the years 2025
through 2030, a period that aligns with the capital improvement program. The revenue requirement analysis
identifies the total revenue needed to fully fund the utility on a standalone basis considering operating and
maintenance expenditures, fiscal policy achievement, and the capital project needs of the utility. Exhibit 1
outlines the key inputs in the revenue requirement analysis.
Exhibit 1. Revenue Requirement Diagram
Fiscal Policies
Capital I I I Economic
Improvement I Assumptions
Program (CIP)
Revenue
Requirement
Capital Funding Operating Costs
Section 2 discusses fiscal policies that inform the revenue requirement analysis, and Section 3 describes the
revenue requirement analysis. The initial results of the analysis are the recommended percentage rate
adjustments (as applied to the current rate structure) needed to meet the obligations of the utility. The cost -of -
service and rate design tasks described below will provide an alternative rate structure for the City's
consideration that increases the fairness of how rates are charged to customers, while generating sufficient
revenue and meeting other City policy objectives.
:i'FCS fcsgroup.com I bowman.com 54
City of Port Orchard
Sewer Rate Study
Cost of Service Analysis
August 2025
page 2
The purpose of a cost -of -service analysis (COSA) is to provide a rational basis for distributing the full costs of a
utility (i.e., revenue requirement) to each customer class in proportion to the demands they place on the system.
Detailed cost allocations, along with appropriate customer -class designations, help to increase the degree of
equity that can be achieved in the resulting rate structure.
The cost categories documented in this report include the following:
Customer Costs — The costs related to providing customer billing and related services.
Flow Costs — The costs associated with conveying sewer flow to the SKWRF, which include the costs of
boosting sewer flow, maintaining sewer lines, and other such costs.
Treatment Costs — The costs of operating the SKWRF to process sewer flow as outlined in the Joint
Agreement.
Two customer classes were analyzed: Residential and Non -Residential. The Residential class includes all single-
family and multi -family housing units, and the Non -Residential class includes every other customer. These classes
match those used by the City when determining the number of ERUs in its collection system for the purposes of
dividing treatment costs under the Joint Agreement; each Residential dwelling unit is equal to one ERU, and each
Non -Residential customer is assigned ERUs based on its winter average flow. Exhibit 2 below outlines the
approach taken in this report.
Exhibit 2. Cost -of -Service Analysis Overview
Revenue Requirement
1
Allocate Costs by Function
Customer Flow Treatment
Allocate Costs to Customer Classes
Residential Non -Residential
The results of the COSA are documented in Section 4.
Rate Design
The primary goal of rate design is to ensure the rate structure generates sufficient revenue aligned with the cost
of providing service. While guided by cost -of -service results, the rates also reflect the City's policy objectives. This
report focuses on simplifying the rate structure for Non -Residential customers, given the current complexity of
customer classes — the City currently has approximately twenty non-residential rate classes. The supporting
analysis is provided in Section 5.
•:;>FCS
.•- tea, fcsgroup.com I bowman.com 55
City of Port Orchard
Sewer Rate Study
2. Fiscal Policies
August 2025
page 3
The basic framework for evaluating utility revenue needs includes sound fiscal policies. Several policy topics are
important to consider further as part of managing the finances of the City, including operating reserves, capital
reserves, and debt management. The City makes use of four different reserves: operating, stabilization, capital,
and debt service.
When evaluating reserve levels and objectives, it is important to recognize that the value of reserves lies in their
potential use. A reserve strategy that deliberately avoids any use of reserves negates their purpose. The
fluctuation of reserve levels may indicate that the system is working, while the lack of variation over many years
strongly suggests that the reserves are, in fact, unnecessary.
Operating Reserve — Fund 431
An operating reserve is designed to provide a liquidity cushion; it protects the utility from the risk of short-term
variation in the timing of revenue collection or payment of expenses. Industry practice for utility operating
reserves typically ranges from 30 days (8 percent) to 120 days (33 percent) of operating expenses, with the lower
end more appropriate for utilities with stable revenue streams and the higher end of the range more appropriate
for utilities with significant seasonal or consumption -based fluctuations.
Recommended Policy: Achieve a year-end balance target of at least 60 days (16 percent) of
total annual operating expenditures. This equates to $924,000 for the 2025 budget.
Capital Reserve — Fund 433
This reserve provides a source of emergency funding for unexpected asset failures or other unanticipated capital
needs. This capital reserve policy is not intended to guard against catastrophic system failure or extreme acts of
nature. Minimum balances for capital reserves are often based on a percentage (commonly 1 percent to 2
percent) of the original cost of utility fixed assets or an amount determined sufficient to fund an emergency
capital project or equipment failure. Capital reserves larger than these amounts may be prudent if the City is
saving for future capital projects that cannot be funded with same -year rate revenues.
Recommended Policy: Achieve a year-end target of at least 2 percent of the original cost of
fixed assets. In 2025, the City had almost $61 million in sewer assets plus construction in
progress, which results in a $1.2 million capital reserve target. Capital reserves larger than this
may be prudent if the City is saving in advance for future capital projects. This target is
projected to grow over time as the City executes its capital improvement program.
•:;>FCS
.• - 'Y fcsgroup.com I bowman.com 56
City of Port Orchard
Sewer Rate Study
Adopted City Fiscal Policies
August 2025
page 4
Per Resolution No. 053-20, the City's sewer operating reserve (Fund 431) balance must be sufficient to meet
roughly two months of recurring revenue, with a goal to work towards a maximum of three months of revenues.
The City does not have an adopted policy regarding its capital reserve (Fund 433).
Calculating a reserve based on revenue in the rate forecast model can create a circular type of argument, so it
was not modeled that way. As previously noted, operating reserves are typically based on a certain number of
days of operating expenditures. The American Water Works Association (AWWA) published a 2018 Cash Reserve
Policy Guidelines, and it cites recommended reserve levels from the Water Environment Federation, International
City/County Management Association, and the Government Finance Officers Association, all of which reference a
certain number of days of operating expenses. Capital reserves are typically based on a percentage of fixed
assets or an amount sufficient to respond to an emergency capital project.
To make sure the rate plan met the City's adopted policy, FCS tested the combined operating reserve (60 days of
operating expenses) plus the capital reserve (2 percent of fixed assets) to ensure that it was equal to or greater
than 90 days of revenues. In all years of the study period the modeled reserve targets met or exceeded the City's
adopted fiscal policies.
Stabilization Reserve — Fund 432
The City maintains stabilization reserves for each of its water, sewer, and stormwater utilities. Per the City's
adopted fiscal policies, this reserve "shall be used if all efforts have been exhausted to fund a qualifying event
and no reasonable budget adjustments are available to continue to provide essential services to the public." The
policy notes qualifying events as follows:
• The State of Washington or the Federal government formally declares a disaster or emergency.
• A natural or urgent event that jeopardizes public safety, impedes commerce, or threatens additional damage
to City infrastructure.
• Unforeseen events or situations outside of the scope of contingency planning or planned normal course of
government operations.
• An act of war, terrorism, or declaration of Martial law.
Recommended Policy: Per Resolution No. 053-20, the stabilization reserve should target
having 90 days (25 percent) of annual expenditures. Per discussions with City staff, this reserve
is fully funded through the end of 2030. The forecast did not assume these funds were available
for use, nor did the forecast add any funds to this reserve throughout the study period.
Debt Management
The City currently has five outstanding sewer utility -related loans. For the management of current as well as
potential future debt, some considerations are provided below.
Types of Debt Considered as Part of this Forecast
For utilities, there are two primary sources of debt financing: State or federal loans and market debt financing.
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City of Port Orchard
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State -Administered Loan Programs
August 2025
page 5
State -administered loans (including federal loans administered by the State) are generally preferable to market
debt financing. The interest rate is generally lower for State loans, and the loan terms often offer more flexibility
in administering the debt. For instance, most State loan programs do not include a requirement that the utility
maintain a certain minimum level of debt service coverage.
Market Debt Financing
General Obligation Bonds
General Obligation (G.O.) bonds are voter -approved bonds secured by the full faith and credit of the issuing
agency, committing all available tax and revenue resources to debt repayment. With this high level of
commitment, G.O. bonds have relatively low interest rates. General Obligation taxing authority can be sought as
a backup pledge to reduce the interest rate of utility debt, even if the actual source of repayment is intended to
be utility rates. However, the use of G.O. bond financing is limited in relation to assessed valuation, and G.O.
bonds must be authorized by 60 percent of the voters. For these reasons, G.O. bonds are not often used for
utility capital projects.
Limited Tax General Obligation (LTGO) bonds can also be issued up to a statutory ceiling without a vote of the
people. In Washington, they are sometimes referred to as "council manic" bonds. Unlike G.O. bonds, LTGO debt
does not authorize additional property taxes; instead, it must be repaid within the City's existing taxing authority.
Usually there are competing demands for that funding within a City, and for that reason, LTGO debt is not often
used for utility capital projects either.
Revenue Bonds
Revenue bonds are secured by the revenues of the issuing utility; the debt obligation does not extend to the
City's other revenue sources. With this limited commitment, revenue bonds usually bear higher interest rates
than G.O. bonds. Revenue bonds typically require the achievement of minimum debt service coverage each year.
Revenue bonds can be issued in Washington without a public vote. There is no limit, except the practical limit of
the utility's ability to generate revenue to repay the debt and meet debt service coverage each year.
Forecast Assumption: The forecast assumes that the City will issue revenue bonds when debt
is needed. While low-cost state loans are typically preferred, revenue bonds are conservatively
assumed as they require the forecast to cover higher interest rates and debt service coverage
requirements. If the City secures low-cost state loans, that will be a positive result that will not
negatively impact the forecast, while the inverse could have a negative impact on the forecast
(relying on state loans but ultimately needing to rely on revenue bonds instead which have
higher interest and debt service coverage requirements).
Debt Service / Reserve — Fund 434
A debt reserve is most often required as a condition of bond issuance, though some state loan programs also
require a reserve. The reserve intends to protect bondholders (or the agency issuing loans) from the risk of the
borrower defaulting on their payments and is most often linked to either average annual debt service or
maximum annual debt service.
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City of Port Orchard August 2025
Sewer Rate Study page 6
Recommended Policy: The policy should be dictated by terms outlined in contracts for debt
obligations.
Debt Service Coverage
Debt service coverage is typically a requirement associated with revenue bonds and some state loans, and it is an
important benchmark to measure the riskiness of the sewer utility's capital funding plans. Coverage is most easily
understood as a factor applied to annual debt service. In such a case, if it issues revenue bonds, the utility agrees
to collect enough revenue to meet operating expenses and not only pay debt service but to collect an additional
factor (often 25 percent) above bonded debt service. The extra revenue is a "cushion" that makes bondholders
more confident that debt service will be paid on time.
Recommended Policy: While a factor of 1.25 is a common legal minimum coverage
requirement for revenue bonds, we recommend a more conservative internal policy coverage
target of at least 1.50 to 2.00 for revenue bond debt. We are not currently aware of any debt
service coverage requirements related to the City's existing sewer utility -related loans.
Summary of Fiscal Policies
Exhibit 3 provides a summary of the recommended fiscal policies for the City.
Exhibit 3. Summary of Fiscal Policies
Achieve a year-end minimum balance target of 60 days (16 percent) of total annual
Operating Reserve
operating expenditures. This target increases as the City's operating costs increase.
Capital Reserve Achieve a year-end target of at least 2 percent of the original cost of fixed assets.
Compare the combined operating plus capital targets against the City's adopted
Operating plus Capital
policy of three months of recurring revenues.
While a factor of 1.25 is a common legal minimum coverage for revenue bonds,
Debt Service Coverage
achieve an internal policy coverage target of at least 1.50 to 2.00+ when possible.
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City of Port Orchard
Sewer Rate Study
3. Revenue Requirement
August 2025
page 7
This section summarizes the results of the revenue requirement analysis for 2025 through 2030. As noted
previously, the revenue requirement analysis identifies the total revenue needed to fully fund the utility on a
standalone basis, considering all current financial obligations. Those financial obligations include fiscal policy
achievement, operating costs, debt service costs, and capital costs. Resources to meet those obligations include
fund balances, rate revenues, planned debt issuances, and other funding sources. The result of this analysis is a
series of recommended annual rate adjustments to satisfy the revenue requirement.
Fund Balances
A summary of each fund as of the beginning of 2025 is provided in Exhibit 4 below. These balances are
projected into future years using the forecasted revenues and expenses. The theory behind the minimum target
balances is discussed in more detail in Section 2.
Exhibit 4. Allocation of Utility Cash
Operating Reserve $8,750,000 60-90 days of budgeted expenses (about $1.1 million)
Stabilization Reserve 1,700,000 90 days of budgeted revenues (about $1.6 million)
Capital Reserve 10,190,000 2 percent of the original cost of plant assets (about $1.2 million)
Debt Reserve 1,530,000 One year of debt service payments (about $923,000)
Total Fund Balance $22,180,000 The combined totals from above (about $4.8 million)
Economic and Inflation Factors
The study makes several assumptions about economic inflation factors, account growth, taxes on utility revenues,
and interest returns on the City's fund balances. These are outlined in Exhibit 5 below.
Exhibit 5. Economic and Inflation Factors
10 -year average of the Consumer Price Index for Urban Customers (West
General Cost Inflation 3.00%
Region)
Construction Cost 3 .50% 10 -year average of the Engineering News -Record's 20 -City Avg. Construction
Inflation Cost Index
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City of Port Orchard
Sewer Rate Study
Labor Cost Inflation 3.00% Discussions with the City
Benefit Cost Inflation 5.00% Discussions with the City
Account Growth
Investment Interest
August 2025
page 8
1.25% Kitsap County Countywide Planning Policies
The Local Government Investment Pool rate for Washington. Forecasted to
4.45%
decrease.
Operating Revenues and Expenses
Annual operating revenues and expenses are based on the City's 2025 and 2026 budgets. Those amounts are
then escalated for future years using the factors described in Exhibit 5 above. The exceptions are sewer rate
revenues, which were estimated using the City's customer billing data, as well as treatment costs.
As described in Section 1, the Joint Agreement splits sewer treatment costs between each jurisdiction (the City
and WSUD) based on their share of the total ERUs in both jurisdictions. So, in addition to modelling an increase
in the cost of treatment based on the general cost inflation factor described in Exhibit 5, a forecast of the
number of ERUs in each jurisdiction was also completed to determine how cost recovery might shift between the
City and WSUD. The City's account growth is described in Exhibit 5. A growth rate of 1.75 percent was used for
WSUD, and so it is forecasted that WSUD will slowly begin to take on more of the treatment costs.
In 2025 the City is expecting to collect $7.3 million in operating revenues. Of this total, about $6.4 million is
expected to come from ongoing utility rates, and the remainder is from miscellaneous fees, interest on the City's
fund balances, and capital facilities charges (CFCs) used to pay for the City's existing debt. The City is expecting
to spend $5.6 million on operating costs, of which $2.0 million is for sewer treatment costs.
The utility has five existing debt obligations — four of which are low interest loans related to sewer utility
construction projects, with interest rates ranging from 0.69 percent up to 2.60 percent. It also has one obligation
it shares with other utilities for a City Hall remodel. The total debt service for these obligations is about $923,000
in 2025, though it will decrease to $749,000 in 2030 as some of the debt service is retired.
Capital Improvement Program (CIP)
The City, along with Consor (the engineering firm preparing the City's sewer master plan), prepared a CIP for the
planning period (2025-2030). The average annual cost of this plan in 2024 dollars is $9.0 million. Inflation to the
year of construction for each project was estimated using the construction cost inflation factor described above.
The annual CIP cost by fiscal year is shown in Exhibit 6 below, and totals $60.3 million.
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City of Port Orchard
Sewer Rate Study
Exhibit 6. Capital Improvement Program (2025-2030) in Escalated Dollars
N $25
c
g $20
2 $15
$10
$5
$-
August 2025
page 9
The City will use several funding sources to cover its capital needs. Between the low-cost loans the City has
secured, and the revenue bonds planned in this revenue requirement, the City will fund about 26 percent of its
capital plan through debt. As much as 46 percent of the plan will be funded by outside sources, such as
agreements with the Washington Department of Transportation (WSDOT), Kitsap Transit (Kitsap), developer
agreements, and capital facilities charges (CFCs). The remaining 30 percent of the capital plan will be funded by
utility rates and existing fund balances. These capital funding sources are summarized in Exhibit 7 below.
CFCs, $5,000,000,
8%
Exhibit 7. Capital Funding (2025-2030)
Low -Cost Loans,
$3,600,000, 6%
r
r
Agreements,
$9,800,000, 16%
Revenue Bonds,
$11,900,000, 20%
WSDOT/Kitsap,
$12,000,000, 20%
Grants, $200,000,
0%
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City of Port Orchard
Sewer Rate Study
Overall Revenue Requirement Forecast
August 2025
page 10
Exhibit 8 illustrates the projected revenue requirements through 2030. The columns depict various utility costs,
including operating expenses, debt service, and annual rate revenue allocated for capital projects. The solid black
line indicates revenue at current rates, while the dashed line represents revenue with rate increases.
• Solid black line: Revenue at existing rates (including rate revenue and non -rate revenues).
Rate revenue (at current rates) is expected to be roughly $6.4 million in 2025 and increases with the
account growth rate described in Exhibit 5.
Non -rate operating revenues are about $852,000, about half of which is capital facility charge revenue
used to pay for debt.
Dashed black line: Revenues with rate increases.
Rate revenue must increase to allow the utility to fund the operating costs and capital projects. These
rate increases are forecasted to be 3.50 percent from 2026 through 2030.
• [giiii• : Cash operating expenses.
Operating expenses begin at $5.6 million based on the 2025 budget. The 2026 budget ($6.1 million)
and inflation factors described in Exhibit 5 provide the forecast for future years.
• : Debt service.
Existing debt service is approximately $923,000 annually from 2025 through 2029 before dropping to
$750,000 from there on.
New debt service includes revenue bond issuances for capital: $10.0 million in 2028 and $1.9 million in
2030. Annual debt service is expected to start at $822,000 in 2028 and increase to $979,000 in 2030.
• � : Rate -funded capital.
Rate -funded capital totals $1.4 million from 2025 through 2027. This amount does not include funding
from the City's existing fund balances, which are used to fill funding gaps as they arise.
• Data labels: Annual system -wide rate increase and the bi-monthly bill for a single-family residence.
V, $9
o $8
$7
2 $6
$5
$4
$3
$2
$1
$0
Exhibit 8. Annual Revenue Requirement Forecast (2025-2030)
3.50% 3.50% 3.50%
3.50% 3.50% 4 ! RA ^ $187 05 $193.59
Operating & Maintenance Debt Service Rate Funded Capital
Revenue @ 2025 Rates — — Revenue with Increases
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City of Port Orchard August 2025
Sewer Rate Study page 11
Fund Balance Forecast
As described in Section 1, the combined Operating and Capital Reserves ending fund balance must be greater
than 90 days of operating revenues. Exhibit 9 below provides a projection of the combined fund balance based
on the revenues and expenses described in the Overall Revenue Requirement Forecast. As shown, the combined
fund balance is above the target throughout the planning period.
Exhibit 9. Fund Balance Forecast (2025-2030)
, $14 $12.53
o $12
$10
$8
$6
$4
$2
$-
tih
,LO
$12.50
IZTO OL'� OT4> OLO OHO
T ti ti ti ti
Combined Operating and Capital Reserve Ending Balance —Target (90 Days of Revenues)
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City of Port Orchard
Sewer Rate Study
4. Cost -of -Service Analysis
Background
August 2025
page 12
This section summarizes the results of the cost -of -service analysis. The test year for this analysis was 2026, as that
is the first year the City could raise rates under the plan proposed in Section 3. The purpose of a cost -of -service
analysis is to provide a rational basis for distributing the full costs of the utility service to each class of customers
in proportion to the demands they place on the system. Detailed cost allocations, along with appropriate
customer class designations, help to sharpen the degree of proportionality that can be achieved in the resulting
rate structure design. The key analytical steps of the cost -of -service analysis are as follows:
• Functional Cost Allocation. Establishes a rational relationship between functions (activities) and costs.
Each line item of the City's budget is allocated to each function (i.e., customer, flow, and treatment)
based on how those expenses serve the system. For example, utility billing costs would be attributed all
to the customer function, while the public works director might have some costs allocated across
multiple functions.
• Customer Class Distinctions. Identify the customer classes that will be evaluated as part of the study
and the relevant customer statistics used for cost allocation. It is appropriate to group customers that
exhibit similar usage characteristics and service requirements. The rate study used just two classes:
Residential and Non -Residential.
• Cost Allocation. Allocates the costs from the functional cost allocation to different customer classes
based on their unique demands for service as defined through the cost classification process. For
example, the cost of billing the utility's customers is based on the number of customer accounts, while
the cost of providing collection services is based on contributions to sewer flow. The results identify
shifts in cost recovery by customer class from that experienced under the existing rate structure.
Functional Cost Allocation
The first step in the cost -of -service analysis is to define the functions or activities that are supported by the sewer
utility. As described in Section I, the functions of service are customer, flow, and treatment.
Test -year (2026) revenue requirements for each accounting line item are assigned to the functions of service. As
the City primarily operates as a sewer collection utility, most of the City's line items are related to the Flow
function. Some billing -related line items are allocated to the Customer function. As described in previous
sections, the payments for the Joint Agreement are entirely related to the treatment of sewer flow, and so all $2.0
million of that cost is allocated to the Treatment function.
Using direct assignments to the functions of service for each of the City's accounting line items, the full
functional allocation of the utility's costs can be calculated. Exhibit 10 below summarizes the functional
allocation. As shown, flow costs are the largest share of the utility's costs at 65.36 percent, followed by
treatment costs at 31.79 percent, and finally customer costs at 2.85 percent.
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City of Port Orchard
Sewer Rate Study
Exhibit 10. Functional Allocation (2026)
Customer
$190,000
2.85%
Flow
$4,440,000
65.36%
Treatment
$2,140,000
31.79%
Total
$6,730,000
100.00%
August 2025
page 13
Customer Class Distinctions
A class of service is a grouping of utility customers with similar characteristics who are served at similar costs.
Classes of service can be defined based on several factors such as sewer flow patterns, service requirements,
geography, or other factors. The classes evaluated as part of the sewer rate study include just two: Residential
and Non -Residential. These customer statistics are used to allocate costs to each class:
• Number of Accounts. Used to allocate Customer costs.
• Water usage (in thousands of gallons — kgal). Used to allocate Flow costs. An annualized winter -
average usage is used for the Residential class to remove water usage related to irrigation. Total annual
usage is used for Non -Residential.
• Equivalent residential units (ERUs). Used to allocate Treatment costs, ERUs are the defined metric by
which Treatment costs are shared with WSUD under the Joint Agreement. One ERU is equal to 180
gallons per day of water use.
Account and water usage statistics are based on customer billing statistics from 2022, with four years of
estimated account growth included as described in Exhibit 5. ERU statistics are taken from the 2024 count of
ERUs done for the Joint Agreement, with two years of estimated account growth. Exhibit 11 summarizes the
forecasted customer stats for each customer class in 2026.
Exhibit 11. Customer Statistics by Class (2026)
Residential
4,614
93.71%
217,192
72.86%
5,690
83.75%
Non -Residential
310
6.29%
80,898
27.14%
1,104
16.25%
Total
4,924
100.00%
298,090
100.00%
6,794
100.00%
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City of Port Orchard August 2025
Sewer Rate Study page 14
Cost Allocation
The last step in the cost -of -service analysis is to assign costs by function (see Exhibit 10) to each class using
relevant customer statistics (Exhibit 11). The allocated cost of service can then be compared to the actual
revenue collection by class to determine where adjustments need to be made.
Exhibit 12 summarizes the results of the cost -of -service analysis for 2026. Results are shown assuming the 3.50
percent rate increase planned for 2026 in Section 3 takes effect.
Exhibit 12. Cost -of -Service Analysis Results (2026)
Residential $5,535,709 $5,177,543 106.92%
Non -Residential 1,195,679 1,553,845 76.95%
Total $6,731,388 $6,731,388 100.00%
A cost -of -service analysis is a reasonable allocation of the test year revenue requirement to classes of service
based on available financial and operational data, expectations of future demands for service, and the allocation
methodologies described in the previous sections. Given the need for assumptions and these other factors, FCS
recommends a reasonable range for class -specific results to be plus or minus 5 percent. Based on this framework,
the cost -of -service results indicate that the revenue generated by the Residential class exceeds its cost of service.
This means that the rates charged to the Residential class are over -collecting relative to its cost -of -service. In
contrast, the Non -Residential class is below the reasonable target, and therefore the rates charged to that class
are generating less than their fair cost share.
Strategies to address the cost -of -service differences are discussed in detail in the rate design section.
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City of Port Orchard
Sewer Rate Study
5. Rate Design
Background
August 2025
page 15
Rate design is the third and final technical step in utility rate setting. The first two technical steps (identifying the
total rate revenue needs and determining the proportional distribution of those revenue needs to the utility's
customer classes) provide the revenue targets for rate design. The principal objectives of rate design are to
implement rate structures that collect the appropriate level of revenue and that are reasonably aligned with cost -
of -service.
The City's existing sewer rate structure includes 20 different classes, many with distinct rate classifications
contained within those classes. There are a total of 55 different rate codes that could be used when calculating a
customer's bill. The City's existing sewer rate structure is shown in Appendix A. The complexity of this existing
schedule is one of the primary reasons the City was interested in developing a new rate design schedule.
Rate Design
The proposed rate structure simplifies the City's scheduling by basing the charge on the City's annual ERU count
performed for the Joint Agreement. Using this count ensures that the data is updated at least annually to reflect
changes in a customer's flow contributions. It also precludes the City from having to develop a new method of
measuring customer statistics or relying on the water usage data, which is not always available to the City.
Exhibit 13 summarizes the proposed rate design. As shown, the cost -of -service for each class is divided by the
number of ERUs and by six to produce a bi-monthly rate per ERU by class. As shown, the Residential rate per ERU
would drop to $151.67 per ERU (from $163), whereas Non -Residential customers would pay $234.56 per ERU.
Exhibit 13. Rate Design (2026)
Residential
$5,177,543
5,690
$151.67
Non -Residential
1,553,845
1,104
$234.56
Total
$6,731,388
6,794
$165.13
Exhibit 14 below provides the calculated bi-monthly rates per with annual rate increases of 3.50 percent.
Exhibit 14. Calculated Bi-Monthly Rates per ERU (2026-2030)
Residential
$151.67
$156.97
$162.47
$168.16
$174.04
Non -Residential
$234.56
$242.77
$251.26
$260.06
$269.16
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City of Port Orchard
Sewer Rate Study
6. Summary
August 2025
page 16
Based on the results of the revenue requirement analysis, FCS recommends a 3.50 percent overall rate increase in
2026 to be implemented January 1, 2026. Additional 3.50 percent increases are recommended to be adopted on
January 1 of each year until 2030.
In addition, should the City wish to recover the cost -of -service for each class and implement a simplified rate
structure, FCS recommends that the City uses the proposed rate schedule provided in Exhibit 14, which is based
on the number of ERUs for each customer.
Updating This Study's Findings
It is recommended that the City revisit the study findings during the forecast period to check that the
assumptions used are still appropriate and that no significant changes have occurred that would alter the results
of the study. The City should use the study findings as a living document, comparing study outcomes to actual
revenues and expenses each year. Any significant or unexpected changes may require adjustments to the rate
strategy recommended in this report.
Absent the results of a recent rate study, we recommend that the City adopt a policy of applying annual
Consumer Price Index (CPI) -based adjustments to its sewer rates. This will help ensure that revenues keep pace
with inflation and reduce the need for periodic large rate increases.
Rate Comparisons
As a resource to the City and its customers, a rate survey of regional utilities was performed. Exhibit 15 below
shows each jurisdiction's estimated bi-monthly single-family sewer bills, assuming 10 CCF of sewer flow. Note
that each jurisdiction has a unique set of geographic traits, customers, and system characteristics that can have a
significant impact on rates.
Exhibit 15. Jurisdictional Survey - Bi-Monthly Single-family Rates (10 CCF of Sewer Flow)
Poulsbo
Gig Harbor
Kitsap County
Bremerton
Port Orchard - Existing
Port Orchard - Proposed
West Sound Utility District
$244.04
$209.79
$208.50
_ $193.96
' $163.00
$151.67
$148.52
$0 $50 $100 $150 $200 $250
$300
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City of Port Orchard
Sewer Rate Study
Appendix A: Existing Rate Schedule
August 2025
page 17
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13.04.020 Bimonthly sewer rates.
Effective January 1, 2016, and January 1st of each subsequent year shown, the sewer rates,
as calculated bimonthly, are shown as follows:
Sewer Rates
2016
2017
2018
2019
2020
Class
Class
Description
No.
Description
1
Single-family
For each dwelling
$111.00
$124.00
$137.00
$150.00
$163.00
residences and
unit
mobile home
on single
parcel
2
Business and
For each business
$111.00
$124.00
$137.00
$150.00
$163.00
professional
with a fixture
For each business
$22.20
$24.80
$27.40
$30.00
$32.60
with an employee
present, without a
fixture
For each floor of
$111.00
$124.00
$137.00
$150.00
$163.00
an office building
or retail complex
that has a public
or community
bathroom
Plus the following
surcharge, based
on the store/office
interior size:
Small, less than
$0.00
$0.00
$0.00
$0.00
$0.00
15,000 sf, or
Medium, 15,000 to
$111.00
$124.00
$137.00
$150.00
$163.00
30,000 sf, or
Large, more than
$222.00
$248.00
$274.00
$300.00
$326.00
30,000 sf
3
Churches
For the church,
$111.00
$124.00
$137.00
$150.00
$163.00
plus*
71
Sewer Rates
2016
2017
2018
2019
2020
Class
Class
Description
No.
Description
For the rectory,
$111.00
$124.00
$137.00
$150.00
$163.00
plus*
For the annex
$111.00
$124.00
$137.00
$150.00
$163.00
*Class 6 for
educational
parochial schools
4
Hotels and
Base fee, plus
$111.00
$124.00
$137.00
$150.00
$163.00
motels, rest
homes and
care centers,
and Kitsap
County jail
Per unit
$22.20
$24.80
$27.40
$30.00
$32.60
5
Apartments
Per dwelling unit
$111.00
$124.00
$137.00
$150.00
$163.00
and mobile
home parks
6
Schools
For each pupil,
$3.30
$3.70
$4.10
$4.50
$4.90
teacher,
maintenance and
administrative
person
7
Kitsap County
$4,329.00
$4,836.00
$5,343.00
$5,850.00
$6,357.00
courthouse
(main complex)
8
Restaurants
Based on the
seating capacity
as determined by
the building official
72
Sewer Rates
2016
2017
2018
2019
2020
Class
Class
Description
No.
Description
Espresso Bar
Seating not
$111.00
$124.00
$137.00
$150.00
$163.00
applicable.
Classification
includes similar
food preparation
businesses which
do not require the
cooking of food or
the maintenance
of kitchen
equipment.
Deli
No seating
$166.50
$186.00
$205.50
$225.00
$244.50
Small
Seating for 1 to 50
$333.00
$372.00
$411.00
$450.00
$489.00
Medium
Seating for 51 to
$499.50
$558.00
$616.50
$675.00
$733.50
150
Large
Seating for more
$666.00
$744.00
$822.00
$900.00
$978.00
than 150
9
Laundromats
Base fee, plus
$55.50
$62.00
$68.50
$75.00
$81.50
Per washing
$22.20
$24.80
$27.40
$30.00
$32.60
machine
Laundromats with
less than 4
washing machines
are considered
Class 2. Dry
cleaners without
washing machines
are Class 2.
10
Taverns
$277.50
$310.00
$342.50
$375.00
$407.50
11
Car
For sales and
$111.00
$124.00
$137.00
$150.00
$163.00
dealerships
administrative
office, plus
73
Sewer Rates
2016
2017
2018
2019
2020
Class
Class
Description
No.
Description
For service
$111.00
$124.00
$137.00
$150.00
$163.00
department, plus
For car washing
$111.00
$124.00
$137.00
$150.00
$163.00
when the water is
used to determine
cost sharing for
the sewer
treatment plant
12
Post office
$388.50
$434.00
$479.50
$525.00
$570.50
13
Grocery stores
Basic fee, plus the
$55.50
$62.00
$68.50
$75.00
$81.50
following
surcharges
Basic store
$55.50
$62.00
$68.50
$75.00
$81.50
Bakery
$55.50
$62.00
$68.50
$75.00
$81.50
Wetted -down
$111.00
$124.00
$137.00
$150.00
$163.00
produce
Food disposal
$111.00
$124.00
$137.00
$150.00
$163.00
Meat cutting area
$222.00
$248.00
$274.00
$300.00
$326.00
14
Bowling alley,
Base fee, plus
$55.50
$62.00
$68.50
$75.00
$81.50
boat marina,
health
maintenance
organizations
and work
release and
juvenile
facilities
74
Sewer Rates
2016
2017
2018
2019
2020
Class
Class
Description
No.
Description
For each
$55.50
$62.00
$68.50
$75.00
$81.50
equivalent
residential unit
(ERU) as
determined for the
cost -sharing
formula for the
sewer treatment
plant
15
Car washes
Base fee, plus
$55.50
$62.00
$68.50
$75.00
$81.50
Per car washing
$166.50
$186.00
$205.50
$225.00
$244.50
bay
16
Beauty shops
$111.00
$124.00
$137.00
$150.00
$163.00
and barber
shops
17
Day care
Basic fee, plus
$111.00
$124.00
$137.00
$150.00
$163.00
For less than or
$0.00
$0.00
$0.00
$0.00
$0.00
equal to 6 children
For 7 to 25
$222.00
$248.00
$274.00
$300.00
$326.00
children
For more than 25
children, use
Class 6 rates
18
Gas stations
For gasoline retail,
$111.00
$124.00
$137.00
$150.00
$163.00
which could
include service
bay
For nonautomotive
$111.00
$124.00
$137.00
$150.00
$163.00
retail
19
Assisted living Base fee, plus $111.00 $124.00 $137.00 $150.00 $163.00
units
Per unit with $111.00 $124.00 $137.00 $150.00 $163.00
private kitchen
75
Sewer Rates
2016
2017
2018
2019
2020
Class
Class
Description
No.
Description
Per unit without
$22.20
$24.80
$27.40
$30.00
$32.60
private kitchen or
studio apartment
20
Bed and
Base fee, plus
$111.00
$124.00
$137.00
$150.00
$163.00
breakfasts
Per rentable
$8.90
$9.90
$11.00
$12.00
$13.00
bedroom
21
Public market
Basic fee, plus the
$222.00
$248.00
$274.00
$300.00
$326.00
following
surcharges
Nonfood retail
$27.80
$31.00
$34.30
$37.50
$40.80
Nonfood service
$27.80
$31.00
$34.30
$37.50
$40.80
business
Juice/soda/ice
$111.00
$124.00
$137.00
$150.00
$163.00
cream/espresso
bar
Restaurant
$222.00
$248.00
$274.00
$300.00
$326.00
(consume and buy
on premises)
Delicatessen
$111.00
$124.00
$137.00
$150.00
$163.00
(counter sales
takeout ready -to -
eat food products)
Retail meat/
$111.00
$124.00
$137.00
$150.00
$163.00
seafood
Retail bakery
$111.00
$124.00
$137.00
$150.00
$163.00
Special notes:
a) Home occupations will not be charged additional sewer fees.
b) For a combination of classes in one business, the highest rate will be
selected.
c) In the event that an established rate class does not accurately reflect the
impact on the sewer system, the city engineer may determine the specific
monthly rate.
76
Sewer Rates
2016
2017
2018
2019
2020
Class Class
Description
No. Description
d) Water accounts which serve a marina pier and do not have a connection
to the sewer shall not be charged a sewer bill. A sewer bill will be charged
and based on winter consumption if the water meter serves both the marina
pier and any facility or pump station that is connected to the sewer system.
For billing purposes, live-aboards will not be considered as a dwelling unit.
e) Properties served which are outside the city limits shall have a 50 percent
surcharge on the bimonthly rates.
(Ord. 038-16 § 2; Ord. 020-15 § 2; Ord. 027-11 § 1; Ord. 016-10 § 2; Ord. 021-09 § 3; Ord. 027-08 § 2; Ord.
010-05 § 3; Ord. 1897 § 3, 2003; Ord. 1799 § 3, 2000).
77