HomeMy WebLinkAbout12-03-2013 b1 sewer rate structure change for public & private schools
FROM: Carrie Mattingly, Utilities Director
Prepared By: David Hix, Wastewater Division Manager
Ron Munds, Utilities Conservation Manager
SUBJECT: SEWER RATE STRUCTURE CHANGE FOR PUBLIC AND PRIVATE
SCHOOLS
RECOMMENDATION
Direct staff to proceed with eliminating “Average Daily Attendance” from the sewer rate structure.
DISCUSSION
Background
Historically, San Luis Obispo public and private schools have been charged for sewer on a per
student basis established by the schools “average daily attendance” (ADA). This method of
charging schools for wastewater service has been common practice in the wastewater industry and
is thought to be related to the way schools receive funding. Each year the individual private schools
and San Luis Coastal Unified School District (District) reports the ADA for each facility which in
turn becomes the basis for the campus’ monthly sewer charge. The ADA rate was established at a
time when wastewater service charges were based on a flat rate. When wastewater moved to
volumetric billing, most schools in San Luis Obispo were still served by one meter that provided
water to both the buildings and large turf-covered play fields. Continuing to use the ADA
methodology was determined to be the most equitable way to assess wastewater service charges in
lieu of being classified as a non-residential customer where the service fee applies to all metered
water.
Over time, most of the District’s campuses and all the private schools have installed irrigation
meters. Recently the District inquired about changing from the ADA rate to the non-residential
sewer rate since this would result in significantly lower sewer bills for most of its campuses. Staff
analyzed the water consumption data for both private and public schools and confirmed that all
private schools and six out of eight District campuses would benefit from the change in customer
classification. District staff indicated it plans to install irrigation meters on the two campuses
without separate irrigation meters sometime in the future.
Presently the City has three sewer rate structures; residential, non-residential, and ADA.
Elimination of the ADA rate would result in the schools being charged the non-residential rate,
which is consistent with how the City charges all other non-residential customers. Elimination of
the rate would simplify the City’s billing and administration of these accounts. City staff has
conferred with all the schools about a proposed change and they are appreciative and supportive of
the rate structure change.
Meeting Date
Item Number Dec. 3, 2013
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Sewer Rate Structure for Schools Page 2
Next Steps
In consultation with the City Attorney’s Office, changing the schools’ customer classification
requires the current rate structure to be modified to eliminate the ADA sewer rate from the
structure. In 2011 the courts ruled that changes in a rate structure fall under the requirements of
Proposition 218. If the Council approves the recommended action, staff will initiate the Proposition
218 process which requires a 45-day period for customers and property owners to protest a sewer
rate structure change that eliminates the ADA rate. Staff will return to the Council after the close of
the protest period to report back the results and provide a recommended action. Should Council
adopt the new rate structure after the protest hearing, schools will be billed the non-residential rate
commencing the next full monthly billing cycle after the protest hearing.
CONCURRENCES
Public and private schools concur with the proposed rate structure change.
FISCAL IMPACT
Elimination of the ADA sewer rate will reduce sewer fund revenue by approximately $225,300
annually based on today’s rate. Staff has analyzed the impact of the rate structure change and has
determined that based on current information, existing adopted and forecast rates will provide
adequate income for the fund and its obligations.
ALTERNATIVES
Perform a sewer rate structure study to determine a more appropriate ADA or alternate rate for
schools. Council could choose this alternative if it believes the proposed rate structure change does
not provide an equitable rate structure for schools. Should Council chose this alternative, staff
recommends Council direct staff to solicit proposals for a sewer rate structure study for schools and
authorize funding of $15,000 from sewer fund working capital.
..\Sewer Rate Structure Change for Schools (Mattingly-Munds)
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