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HomeMy WebLinkAbout08/20/1996, 10 - WASTEWATER CHARGES FOR COMMERCIAL WELL WATER USERS council M.Wi"°"e j , 1996 acEnda Repout AN St zo hem N®6m CITY 6 F SAN LUIS O B I S P O FROM: John Moss, Utilities Directorf,�� PREPARED BY: Ron Munds, Utilities Conservation,Coordinator SUBJECT: Wastewater Charges for Commercial Well Water Users CAO RECOMMENDATION Introduce to print an Ordinance amending the City Sewer Connection Regulations to require all commercial properties using private well water which discharges to the existing sewer system to install water meters on the wells for the purpose of assessing commercial sewer charges. DISCUSSION Background Commercial wastewater customers are currently billed a minimum rate plus a commodity charge based on water consumption over ten units of water per billing cycle (60 days). During the drought, several businesses installed wells to offset their potable use and avoid excess water use surcharge penalties. Additionally, recently annexed areas, such as the section bordered by Sacramento Drive and Broad Street are using their existing wells for domestic water purposes but are requesting sewer service from the City because of failing septic systems. The use of well water at these properties has made it difficult to assess the appropriate sewer charges. The proposed policy will effect approximately 10 current customers. More importantly, the policy will give clear direction to property owners in any future annexed area of the standards and cost associated with connecting to the City's wastewater system. During the past several years the Finance and Utilities Departments have attempted to create a billing system that is easy to administer and to communicate, and is fair to all our customers. The current methodology for calculating sewer charges for this group of customers has been difficult and confusing for both the customer and City staff, often resulting in the customer not being satisfied with the outcome of the process. The objective of the recommended action is to create a billing procedure for well water users which will address the concerns of all the parties involved. Current Methodology There are five options for establishing sewer service charges currently offered to customers who use well water for domestic business purposes. They are to: Council Agenda Report-Well Metering Page 2 1. Meter the well to establish commodity charges. In the past, this has been presented as a short term measure for a pre-determined monitoring period to establish a baseline for ongoing sewer service. 2. Use the City's water use factors which estimate the water usage for the type of business being evaluated. The factors are based on historical water use of similar businesses. These factors are also used in determining water allocations in new development. 3. Submit comparable water use records for a similar facility. If a customer provides water use records from a comparable facility, staff will consider the information when determining the sewer rate for the facility being evaluated. 4. Disconnect the connection to the well and use City water. This action will eliminate all question regarding the appropriate charges for sewer service. 5. Use past water use history if applicable. If the customer at one time had a water account with the City, the water use history will be used to determine sewer charges. Each option (except number one) is an estimate of water use which may or may not accurately represent actual consumption. Though option number one ( metering) is currently the preferred alterative, it is not a permanent solution. It has been determined that staff does not have the authority to require, on an on going basis, metering of the well for sewer service. The other options have created inequities in billing for both the customer and/or the City in many cases. For instance, if a commercial building is not fully occupied when the sewer rate is established, the customer still pays as though it has full occupancy based on the water use factors. From the City point of view, if the occupancy type changes within a facility to a higher water use after the establishment of the rate, the City has no way of monitoring such conversions, unless a building permit is required for any alteration thus not charging for the facility's fair share of the system cost. These are just two examples the problems that arise from the current system and demonstrate the difficulty in monitoring and tracking these situations over time. Proposed Policy Recognizing the deficiencies of the current procedures, the Utilities Department formed a committee to discuss possible solutions to the problem. Staff from the Public Works, Finance and Utilities Departments met and determined that metering of well water usage was the only accurate and equitable means for charging this group of customers for wastewater service. Additionally, the committee determined the new policy should apply to both existing and future customers. The key provisions of the policy are as follows: ■ Existing customers will have one year to comply to the new standards. ■ Standards for new development will be established addressing water meter installation, location and access. Council Agenda Report-Well Metering Page 'i ■ Standards for existing development will be established with the flexibility to address each situation to provide the lowest cost alternative. ■ Well water meters will be read and entered into the billing system for sewer charges like all other commercial accounts. The proposed policy will be administered by the Water Division of the Utilities Department to ensure compliance. The water meters will be incorporated into existing meter reading routes with the Customer Service crews from the Water Distribution Section performing maintenance on the meters as well as the recording of water consumption. CONCURRENCES The Finance Department concurs with the recommendations made in this report. FISCAL IMPACT Approval of the recommended action is anticipated to be revenue neutral. Sewer charges are currently assessed against all commercial well water users. The recommended action is to address issues of equity, accuracy of charges and ease of administration rather than to generate additional revenue. Attachment: Ordinance ORDINANCE NO. (1996 SERIES) AN ORDINANCE OF THE CITY OF SAN LUIS OBISPO AMENDING CHAPTER 13.08.090 WHEREAS, the City's municipal code authorizes wastewater service charges for commercial properties; and WHEREAS, wastewater service charges for commercial properties are based on water consumption; and WHEREAS, to determine the appropriate charges for commercial properties using private water wells for commercial purposes dictates the need for water metering; BE IT ORDAINED by the City Council of the City of San Luis Obispo as follows: SECTION 1. Chapter 13.08.090 is amended to the San Luis Obispo Municipal Code to read as follows: 13.08.090 Use of Existing Sewer A. Payment of costs prior to sewer connection permit issuance. Before a permit shall be issued for a sewer connection in any areas within the city, which property shall use any then existing sewerage facilities of the city for which such property shall not have made full payment of its share of the cost thereof, the owner or applicant shall pay to the city a sum of money for such privilege to be computed by the city engineer in the same manner as provided in this chapter. B. Installation of water meters on private wells serving commercial properties for determining sewer service charges. All commercial properties where private well water is used and discharged to the existing sewer system shall install a water meter on the well in order to determine the appropriate sewer charges. Installation of the water meter shall be in accordance with the standards established by the City Engineer. Private wells serving commercial properties in existance on the first reading of the ordinance shall have until October 1, 1997 to comply with the established standards. SECTION 2. A synopsis of this ordinance, approved by the City Attorney, together with the names of the Council Member voting for and against, shall be published at least five days prior to its final passage, in the Telegram-Tribune, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage. INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at a meeting held on the day of on motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: ATTEST: City Clerk Bonnie L. Gawf Mayor Allen Settle APPROVED AS TO FORM: C' me