Loading...
HomeMy WebLinkAboutph3sewerratestructurechgforpublic&privateschools 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 Adopt a resolution eliminating “Average Daily Attendance” from the sewer rate structure provided there is no majority protest against such change. DISCUSSION Background Historically, San Luis Obispo public and private schools have been charged for wastewater service on a per student basis established by the school’s “average daily attendance” (ADA). A common rate structure with municipal agencies when adopted, it was structured on how schools receive funding through student attendance and the fact that most schools had only one water meter for both indoor water use and irrigation. These factors allowed the ADA methodology to provide an equitable rate structure to assess wastewater service charges based on student attendance while taking into account the large turf areas schools must irrigate and maintain. Over time, almost all public and private schools have installed irrigation meters. Recently schools 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 schools and confirmed that the campuses would benefit from the change in customer classification. The two remaining schools that do not have a separate irrigation meter currently have made plans for installing irrigation meters. 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. School Rate Structure Protests On December 3, 2013, City Council directed staff to proceed with eliminating the ADA sewer rate structure. (Attachment 1). On December 27, 2013, a Notice of Public Hearing (Attachment 2) of the proposed sewer rate structure change (which, for the first time, included an official protest form) was mailed to all sewer customers and property owners. Proposition 218 allows the property owners Meeting Date Item Number Feb 18, 2014 PH3 - 1 Sewer Rate Structure Change for Schools Page 2 or customers directly responsible for the payment of the wastewater service charge to protest the proposed rate structure change. A valid protest must be in writing on the official protest form, received by the City Clerk at or before the public hearing on February 18, 2014, identify what is being protested, and contain the service address. The party signing the protest must be listed on the account as the person responsible for the payment of the bill and/or the property owner. In the event that a protest is submitted by the owner and the tenant responsible for payment of the bill, only one valid protest is counted. If written protests are filed by a majority (50% + 1), the applicable proposed rate structure may not be imposed. A majority of approximately 14,700 customers is 7,351. As of January 28, 2014, a total of 54 written protests were received by the Office of the City Clerk. The City Clerk will provide an updated summary of the protests received at the close of the public hearing at the February 18, 2014 City Council meeting. FISCAL IMPACT Elimination of the ADA sewer rate structure 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. ATTACHMENTS 1. December 3, 2013 Council Agenda Report; Sewer Rate Structure Change for Public and Private Schools 2. Notice of Public Hearing for Proposed Sewer Rate Structure Change 3. Resolution Eliminating the ADA Sewer Rate Structure for Schools 4. Resolution No. 10441(2013 Series) ..\Sewer Rate Structure for Public & Private School (Mattingly-Hix) PH3 - 2 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 B1 - 1 Attachment 1 PH3 - 3 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) B1 - 2PH3 - 4 Attachment 2 PH3 - 5 Attachment 3 R ______ RESOLUTION NO. _____ (2014 Series) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO ELIMINATING THE AVERAGE DAILY ATTENDANCE SEWER RATE STRUCTURE FOR SCHOOLS WHEREAS, it is the policy of the City of San Luis Obispo to review enterprise fund fees, rates, and rates structures on an ongoing basis and adjust or modify as required to ensure that they remain equitable and adequate to fully cover the cost of providing services; and WHEREAS; a comprehensive analysis of the Average Daily Attendance (ADA) sewer rate structure was performed and found to be inconsistent with charges applicable to other non- residential customer for sewer services; and WHEREAS; the comprehensive analysis determined that application of the non- residential rate to schools more accurately reflects the costs of providing services to school customers and will allow the sewer fund to provide adequate income for the fund and its obligations; and WHEREAS, the Council desires to eliminate the ADA sewer rate structure WHEREAS, a public hearing was properly noticed and held on February 18, 2014; and WHEREAS, a majority protest, as contemplated by Article XIII D of the California Constitution, was not received by the conclusion of the public hearing. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Resolution No 10441 (2013 Series), Exhibit “A”, is hereby modified to eliminate the ADA sewer rate structure effective 11:59 pm February 28, 2014 and from henceforward and schools shall thereafter be subject to the same charges as other non-residential customers. SECTION 2. All other terms and conditions of Resolution No. 10441 (2013 Series) remain in effect. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 20xx. PH3 - 6 Resolution No. _____ (2014 Series) Page 2 ____________________________________ Mayor Jan Marx ATTEST: ____________________________________ Anthony Mejia City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney PH3 - 7 RESOLUTION NO. 10441(2013 Series) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO ESTABLISHING SEWER SERVICE RATES WHEREAS, it is the policy of the City of San Luis Obispo to review enterprise fund fees and rates on an ongoing basis and to adjust them as required to ensure that they remain equitable and adequate to fully cover the costs of providing services; and WHEREAS, a comprehensive analysis of sewer fund operating, capital, and debt service needs has been performed for fiscal years2013-15 through 2017-18; and WHEREAS, this comprehensive analysis has been revised based on updated revenue and expenditure information; and WHEREAS, the Council has reviewed the sewer service rates necessary to meet system operating, capital, and debt service requirements; and WHEREAS, a public hearing was properly noticed and held on June 12,2013; and WHEREAS, a majority protest, as contemplated by Article XIII D of the California Constitution, was not received by the conclusion of the public hearing. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Resolution No. 10272 (2011 Series) is hereby rescinded, effective 1l:59 p.m. June 30,2073. SECTION 2. The rates set forth in Exhibit "A" are hereby adopted, establishing rates effective July 1, 2013 and July 1, 2014. Upon motion of Council Member Ashbaugh, seconded by Vice Mayor Smith, and on the following roll call vote: AYES: NOES: ABSENT Council Member Ashbaugh, Vice Mayor Smith and Mayor Marx Council Member Carpenter None R 10441 PH3 - 8 ResolutionNo. 10441 (2013 Series) Page 2 The foregoing resolution was adopted this 12th day of June 2013 Ma Marx ATTEST City Clerk APPROVED AS TO F Christine Dietrick City Attorney PH3 - 9 ResolutionNo. 10441 (2013 Series) Page 3 MONTHLY SEWER SERVICE RATES EXHIBIT A Account Type Effective July 1,2013 Effective July l, 2014 Minimum charge: $7.96 per dwelling unit Volume charge per unit: $8,77 Total monthly fee capped based on average winter water use (AWWU) Single family dwelling, including single meter condominiums and townhouses Minimum charge: $7.73 per dwelling unit Volume charge per unit: $8.52 Total monthly fee capped based on average winter water use (A'WWU) Master-metered multi-family dwellings in any duplex, aparlment house or rooming house Minimum charge: $7.73 per dwelling unit Volume charge per unit: $8.52 Accouttls witltoul separate irrigation meler: Total monthly fee capped based on AV/WU Accouttls witlt sepuule ìrrigalion meteÍ: No cap Minimum charge: $7.96 per dwelling unit Volume charge per unit: $8.77 Accounls willtoul separate inigation meler: Total monthly fee capped based on AV/WU Accounls wilh separúe irrigalion meler: No cap Minimum charge: $7.96 per dwelling unit Volume charge per unit: $8,77 A cco unls w illto ut s eparale ìrr igat ion meter: Total monthly fee capped based on AWWU Accou nts w !!!¿sepørale irrigation metet : No cap Mobile home or trailer park Minimum charge: $7.73 per dwelling unit Volume charge per unit: $8.52 A ccounls w itltoul separale irrigation meter: Total monthly fee capped based on AWWU Accounls wìth seputtte irrigalion meler: No cap Public, private, or parochial school, average daily attendance (ADA) at the school $6.91 per ADA $7.11 per ADA All Other Accounts Minimum charge: $7.01 per account Volume charge per unit: $7.73 Minimum charge: $7.43 per account Volume charge per unit: $8.l9 $ 189.6s $1r.42 $ 195.34 $1r.76 Minimum charge Additional charge per 100 gallons in excess of 1,500 gallons discharged Sewer Rates: Residential Customcrs Sewer Rates: Non-Residential Customers Mon Mon Each Vehicle Sewer into Ci PH3 - 10