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HomeMy WebLinkAbout06/02/2005, 4 - 2005 WATER FUND REVIEW council Meeting Date June 2,2005 j acenaa wpoRt ItonN� CITY OF SAN LU I S O B I S P O FROM: John Moss, Director of Utilities Prepared By: Sue Baasch, Admin Analyst Gary Henderson, Water Division Manager SUBJECT: 2005 WATER FUND REVIEW CAO RECOMMENDATION 1. Review and accept the 2005 annual water fund financial and rate review; and 2. Conceptually approve the proposed operating program changes and capital improvement plan requests contained in the preliminary 2005-07 Financial Plan, pending final budget review and adoption; and 3. Adopt a resolution increasing water service charges by eight percent (8.0%), effective July 1, 2005 and eight percent (8.0%), effective July 1, 2006, consistent with the rate increases projected in approving participation in the Nacimiento Water project. 4. Adopt a resolution resetting water meter and adaptor costs, effective July 1, 2005. DISCUSSION The 2005 Water Fund analysis confirms the ongoing moderate rate increases forecasted last year during consideration of the Nacimiento project. With this rate increase, the Water Fund will continue to be healthy and stable, capable of supporting the continuing and recommended operations and capital programs. This report recommends adoption of a resolution increasing water rates by eight percent (8.0%), effective July 1, 2005 and an additional eight percent (8.0%), July 1, 2006. A resolution resetting water meter and adapter costs to the current pricing structure is also attached. The water meter and adapter costs have not been reset for a number of years, and staff requests approval to reset the charges to what Utilities is currently paying for these fixtures. Within this analysis, which forecasts the water fund's financial position until 2011-12, the City is able to achieve its long-term goal of adequate water supply. This analysis includes supplementing the City's water supplies through participation in the Nacimiento water supply project and delivery of recycled water for irrigation. This analysis also includes construction of the Water Master Plan improvements and achieves an ongoing level of capital maintenance projects to maintain the City's water infrastructure assets at industry standard levels. Although annual regular rate increases are forecasted to position the water fund to meet its future obligations, this should be put into context.. Water rates did not change for over five years, and in 1999, the rates were rolled back by 10%. The current rates are actually lower than the ones in y-i 2005 Water Fund Review Page 2 place for three years (1996 to 1999). The recommended rate increases city water rates from $2.71 to $2.93 (2005-06) and then to $3.16 (2006-07) per hundred cubic feet ("ccf') for the first tier use (1 - 5 ccf monthly), and from $3.41 to $3.68 (2005-06) and then to $3.96 per hundred cubic feet for the second tier use (more than 5 ccf monthly). What does this mean to the average residential customer? For the average residential customer using 10 units ("ccf') of water monthly, the following illustrates the changes to the monthly bill with the recommended increases. Average Residential Water Ctistomer Nlonthly Bill Assurnin.- 10 units of water use per month 2004-05 2005-06 2006-07 1-5 ccf $2.71/ccf 13.55 $2.93/ccf 14.65 $3.16/ccf 15.80 5-10 ccf 3.40/ccf 17.00 $3.67/ccf 18.35 $3.96/ccf 19.80 Total $30.55 $33.00 $35.60 The update to the charges for meters and adaptors is to merely reset the charges to what staff currently has to pay when they purchase these fixtures. The table below shows the current and proposed changes. Nieter and Adaptor Charges Approved Proposed Meter Costs Meter Costs* .58 x.75 inches .58 x .75 inches (5/8 x 3/4 inch) $43.00 (5/8 x 3/4 inch) $53.70 .75 inch(3/4 $74.00 .75 inch(3/4 inch) $81.05 inch) 1.0 inch $104.00 1.0 inch $96.67 1.5 inch $239.00 1.5 inch $553.00 2.0 inch $359.00 2.0 inch $851.00 3.0 inch and Time and materials 3.0 inch and larger Time and materials larger Adapter Costs Adapter Costs 1.0 inch service/ 1.0 inch service/ .58 inch x.75 $11.00 per pair .58 inch x .75 inch $11.00 per pair inch meter meter 1.0 inch service/ $11.00 per pair 1.0 inch service/ $11.00 per pair .75 inch meter .75 inch meter 1.5 inch service/ $52.00 per pair 1.5 inch service/ $52.00 per pair 1.0 inch meter 1.0 inch meter 2.0 inch service/ $53.00 per pair 2.0 inch service/ $54.00 per pair 1.0 inch meter 1.0 inch meter 2.0 inch service/ $68.00 per pair 2.0 inch service/ $78.00 per pair 1.5 inch meter 1.5 inch meter *The i"meter cost is slightly lower due to a new standard manufacturer for these meters. The 1'h"and larger meters are now required to be Metron meters(different manufacturer than smaller meters)which are much more accurate but are more expensive. y-z 2005_Water Fund Review Page 3 Background The 2005 Water Fund Analysis The details of the process and assumptions used to complete this year's review are included in the attached 2005 Water Fund Analysis (Attachment 1). A summary of the 2005-07 Water Fund Financial Plan requests are included in this attachment and the detailed requests are provided in the City's 2005-07 Financial Plan prepared by the Finance Department and previously provided to Council. Annually, staff reviews the water fund's health and recommends appropriate rates to meet the forecasted financial and programmatic conditions. This annual rate review recommends adoption of two years of increases to water service charges and projects a series of annual rate increases until 2010. As identified last year, the water fund is being positioned to pay for the City's share of the Nacimiento project, as well as to ensure the water fund's fiscal health. Participation in the Nacimiento project represents the achievement of one of the most significant Major City Goals in the City's history, securing an additional long- term water supply. Long-term water supply development has been a Major City Goal since the early 1990s. During this time, we have seen the objectives of this elusive goal move from one water supply project opportunity to another, all seemingly increasing in cost and complexity. At this time and included in this analysis, it now appears that the City will achieve water supply adequacy and reliability with the completion of several key water supply projects. Council approved the Water Reuse project in 1997 and construction of the backbone distribution system was completed in August of 2004. The Water Reclamation Facilities' improvements required for the Recycled Water System are currently under construction and recycled water deliveries are anticipated to begin in spring of 2006. This is the first significant new water supply added to the City since the completion of the Whale Rock Reservoir and transmission facilities in 1962. The Water Reuse project is being funded through a combination of State Grant ($2.9 million) and State Revolving Loan funds ($8.8 million) with annual debt service payments for Water Reuse beginning in 2005-06 ($573,100). Enhancements to the City's water conservation program were approved with the 2003-05 Financial Plan. Water conservation continues to be a key component of our water resource strategy and the overall program costs are about $295,000 for 2005-06. Water conservation is perhaps the City's most cost effective supply, but we have already implemented most of the potential supply benefits from conservation and the annual program costs represent the ongoing maintenance costs for the program. There are several opportunities for staff to continue to evaluate and enhance the City's water conservation programs, and these are discussed in more detail in the annual Water Resources Status Report (June of each year). Even with the potential development of significant additional supplies from Nacimiento, the City remains committed to achieving the highest levels of conservation through quality conservation service programs. Participation in the Nacimiento Water Supply Project is the most significant water supply achievement in terms of both cost and benefit. The project as identified will provide the City �-3 2005 Water Fund Review Page 4 with an additional 3,380 acre-feet per year of yield, providing adequate yield to meet our current General Plan build-out needs and provide greatly improved system and service reliability. The total project cost for the Nacimiento Project is estimated at $150 million for design and . construction. The City's share of that cost is projected at$6.6 million for design and$64 million for construction. Debt service for design and operations and maintenance payments for the project are projected at $5.4 million beginning in 2010-11 and annually thereafter for the remaining life of the bonds (30 years). At this point, the funding for the Nacimiento project is projected on an order of magnitude basis. The recommendation for adoption of the next two years of rate increases at this time will allow for refinement of information relative to project cost once design is completed. It is important to project future rate increases based on what we know today so that Council has a picture of the project costs and implications, however, actual rate adoption should be based on more refined information as it is developed. Our current rate setting strategy of two years in concert with our financial planning process should work well, in terms of timing and refined information, with the development of the Nacimiento project through design and construction. Following this period of significant expenditures and associated projected rate increases it is anticipated that the Water Fund will return to amore stable rate condition comparable to inflation. Water Master Plan Improvements Design of the Water Master Plan Improvements to our Water Treatment Plant is anticipated to be completed in winter 2005-06. This analysis projects initiation of the Master Plan Capital Improvements to our Water Treatment Plant in 2007-08 at a projected cost of$8.1 million. The analysis assumes debt financing for $6.2 million of the project costs. Funding for the Water Treatment Plant MasterPlan Improvements will increase annual debt service by$456,200. Issues on the Horizon Utility Billing Services With increasing water and sewer rates and customer growth, the need to complete a thorough review of our customer service/utility billing programs is becoming an increasing priority. The City Council approved a contract with HDR Engineering, Inc., on May 17, 2005; to provide a through evaluation of customer service programs which include water and sewer rate structure issues, automated/remote meter reading options, billing frequency, and billing system software to support the customer service needs of the community. This study will begin in June and go through the fall 2005. Water Reuse close-out contingency A close out contingency for the water reuse project of$800,000 has been included in this fund analysis. As Council is aware, there are considerable contract and legal issues associated with the completion and closeout of this project that "may" require additional funding. This may mean additional legal and scheduling services, as well as consultant and possibly contractor payments. Since staff has no means, at this time, to accurately estimate what the reuse closeout 2005 Water Fund Review Page 5 costs may be, no financial plan request has been prepared. However, funding has been set aside from working capital in case it is required to ensure working capital adequacy. Staff will be returning to Council periodically with updates on the project and will identify and request any specific funding needs for project closeout at that time. Dispatch Center and Radio Systems Upgrade Improvements The Utilities Department relies heavily on the radio system for dispatch of field crews and communication between crews on routine and emergency operations. The project will be debt financed and annual debt service costs to the water fund are estimated at $46,200 once the project is completed.. Public Participation The recommended rate increases will be discussed as a public hearing item before the Council. The public will have an opportunity at that time to comment on these recommendations. In addition, staff plans to have an extensive outreach to the public as part of the consultant study of the water and sewer rate structures and guiding policies. The current recommendation looks only at revenue adequacy; the new study will allow opportunity to fully discuss "rate structures and how various customer classes pay. That study will be kicking off in June and the first study session with Council will be in the summer. Staff looks forward to Council and community input on these issues. ATTACHMENTS 1. 2005 WATER FUND ANALYSIS Exhibit A—Financial Schedules A.1. Changes in Financial Position A.2. Assumptions 1. A.3. Capital Improvement Plan Schedule 2. RESOLUTION SETTING WATER SERVICE CHARGES Exhibit A. Water Rates for 200546 and 2006-07 3. RESOLUTION SETTING WATER METER AND ADAPTER COSTS Exhibit A. Water Meter and Adaptor Costs 4. 2005 Water and Sewer Rate Survey r y. s ATTACHMENT 1 2005 Water Fund Analysis June 2, 2005 Prepared by the Utilities Department city of San WIS OBISPO 41 Attachment 1 Page 2 City of San Luis Obispo 2005 Water Fund TABLE OF CONTENTS I. OVERVIEW II. 2005-07 FINANCIAL PLAN A. Summary of Operating Programs B. Significant Operating Program Change Requests C. Capital Improvement Plan Requests III. RATE SETTING A. Methodology B. Structure C. History IV. ASSUMPTIONS A. Sales B. Development Impact Fee collection C. Debt Service Payments V. 200405 UPDATE A. Major Activities and Programs VI. LOOKING TO THE FUTURE A. New Regulatory Requirements B. Master plan upgrades and improvements C. Infrastructure Maintenance EXHIBIT A—FINANCIAL SCHEDULES A. 1. Changes in financial position A. 2. Assumptions A..3. Capital Improvement Plan q-7 i Attachment 1 Page 3 city of A san LUIS OBlspo 2005 Water Fund Report I. OVERVIEW This report presents the financial condition of the Water Fund, based on the 2005-07 Financial Plan operating program budgets, and recommended program and capital requests to address the identified needs in the Water Master Plan, regulatory requirements, and adopted city financial and infrastructure maintenance policies. H. 2005-07 FINANCIAL PLAN A. Summary of Operating Programs Including requests shown in section B. 2005-06 2006-07 BUDGET BUDGET Source of Supply 1,045,800 1,072,700 Conservation 398,100 397,300 Treatment 1,233,300 1,220,300 Water Distribution 914,800 925,100 Customer Service 292,600 293,100 AdministrationlEngineering 567,500 580,800 Water Taxes and Fees 381,600 434,800 Total Water Services 4,833,700 4,924,100 B.Significant Operating Program Change Requests 2005-06 2006-07 BUDGET BUDGET Source of Supply Increased Salinas Reservoir Payment 25,000 Establish Water Recycling Oper Budget 35,200 38,000 Water Treatment Plant Contract Lab Svcs—Stage H Disinfect Rule 23,800 Increased Chemical Cost 14,300 14,300 Lab Analyst—proportionate share 7,600 7,700 Water Distribution Underground Service Alert Staffing 74,500 82,500 Water AdministrationlEngineering Energy Monitoring.Program 600 600 Total Water Services 156,000 168,200 y� Attachment 1 Page 4 C. Capital Improvement Plan Requests 2005-06 2006-07 2007-08 2008-09 BUDGET BUDGET PROPOSED PROPOSED Source of Supply Water reuse master plan 250,000 250,000 250,000 250,000 Water Treatment Plant Major Facility Maintenance 180,000 50,000 50,000 50,000 Water Distribution Distribution master plan implementation 350,000 770,000 250,000 250,000 Distribution system improvements 1,250,000 1,275,000 1,300,000 1,325,000 Computerized Maint Mgmt Program 20,800 Downtown sprinkler reimbursement 25,000 25,000 Polybutylene water service replacement 250,000 250,000 350,000 350,000 Fleet addition: Skid steer tractor 56,800 Pickup for USA marking 16,800 Fleet replacement-pickup 2 ton service body trucks 212,000 5—V2 ton pickups 32,800 57,900 Flatbed with crane 63,900 Backhoe 82,500 Administration and Engineering Fleet replacement-sedan 17,000 Total Water Services 2,565,600 2,698,300 2,338,700 2,307,900 III. RATE SETTING METHODOLOGY In determining water revenue requirements and setting recommended rates, the following general methodology is used: Step 1: Determine Water Fund revenue requirements for: a. Operations and maintenance b. Capital improvements and replacements C. Debt service obligations(existing and projected) Step 2: Subtract from this amount"non-rate revenues"such as: a. Interest earnings b. Connection fees and meter sales C. Revenues from other agencies(Cal Poly) d. Other service charges(service start-up fees,late charges,etc.) Step 3: Identify water rate requirements: a. Revenue needed to be generated from water rates is the difference between water revenue requirements(Step 1)and"non-rate"revenues(Step 2). Step 4: Determine new rates: a. Model the rate base(consumption and customer account assumptions)against the existing rate structure and rate requirements identified in Step 3. Attachment 1 Page 5 Because this analysis is performed over a multi-year period, other factors are considered, such as working capital available to support capital projects, debt service requirements, and minimum working capital policy. B. Water Rate Structure Current policies to guide rate structure setting ■ Comply with legal requirements ■ Encourage conservation ■ Ensure revenue adequacy to fully meet system operating and capital needs ■ Provide equity and fairness between classes of customers ■ Be easy to understand and easy to administer ■ Facilitate ongoing review to maintain rate stability The current water rate structure is completely variable, with the charges based on the volume of water used. The table below shows the current water rate structure. Nionthly Water Charges Inside the City Rates 1 — 5 CCF $2.71/CCF 5—10 CCF $3.40/CCF Outside the City Rates 1 — 5 CCF $5.42/CCF 5—10 CCF $6.80/CCF For service to customers outside the City,the rates are two times the"In-City"rate. C. Water Rate History The table below shows two years of projected as well as a ten-year history of water charges. Projected charges Proposed 1-5 ccf 3.16 2006-07 more than 5 ccf 3.96 Proposed 1-5 ccf 2.93 2005-06 more than 5 ccf 3.67 Attachment 1 Page 6 2004-05 1-5 ccf 2.71 more than 5 ccf _ 3.40 2003-04 1-5 ccf 2.51 more than 5 ccf _ 3.15 2002-03 1-5 ccf 2.51 more than 5 ccf 3.15 2001-02 1-5 ccf 2.51 more than 5 ccf 3.15 2000-01 1-5 ccf 2.51 more than 5 ccf 3.15 1999-00 1-5 ccf 2.51 more than 5 ccf 3.15 1998-99 1-5 ccf 2.79 more than 5 ccf 3.50 1997-98 1-5 ccf 2.79 more than 5 ccf 3.50 1996-97 1-5 ccf 2.75 more than 5 ccf 3.45 1995-96 1-5 ccf 2.65 more than 5 ccf 3.35 IV. ASSUMPTIONS The following provides more detail for the key assumptions in Exhibit A.1. and A.2. to this report, the financial schedules showing the water fund's changes in financial position and the listing of assumptions.. A. Revenues 1. Sales are calculated based on the percentage increase in rates and a one percent growth rate. 2. Sales to Cal Poly are based on historic use and the 2003 Agreement between the City and the University. This agreement set the proportion (61%) of the non- residential rate the University pays to account for the University's difference from other customers (the University owns its own water supply and capacity interest at the Water Treatment Plant). 3. Development Impact Fee collection is calculated according to the base set by the impact fee study in 2004 and adjusted by the one percent growth rate and inflation. Annually, this calculation is evaluated and proportionately adjusted due to lower than one percent growth as well as development occurring under maps vested prior to impact fee establishment. Development in those areas pays only those fees in place at the time of approval. B. Expenses The operating and capital expenses are based upon projections to the end of the 2004-05 fiscal year and the preliminary 2005-07 Financial Plan. Thereafter, operations and maintenance costs are adjusted according to an inflation rate of 3%. N-it Attachment 1 Page 7 C. Debt Service Payments 1. Debt service for the upgrade of the Water Treatment Plant and the refinancing of earlier bonds for system upgrades=-the 2001 and 2002 Refunding Water Revenue Bonds--is $1,074,900 in 2005-06 and $1,078,100 in 2006-07. The 2001 lease revenue bonds (about$390,000 annually) are retired in December 2008. 2. Debt service to pay for the energy conservation projects is $28,600 in 2005-06 and $28,700 in 2006-07. 3. Debt service for the repayment of the State Revolving Loan Fund for the construction of the Water Reuse system is projected to be$573,100. 4. Debt Service for the upgrades to the Water Treatment Plant are estimated to be $456,200 annually. Depending on the availability of working capital, the amount of this loan will be adjusted accordingly. 5. Debt service for the water fund's share of the new dispatch center and radio system upgrades are projected at$15,200 in 2005-06 and$46,200 annually thereafter. V. 2004-05 UPDATE A. Major Activities and Programs 1. The Water Reuse Project The Water Reuse project was approved by Council in 1997 and construction of the backbone distribution system was completed in August of 2004. The Water Reclamation Facilities' improvements required for the Recycled Water System are currently under construction and recycled water deliveries are anticipated. to begin in spring of 2006. This is the first significant new water supply added to the City since the completion of the Whale Rock Reservoir and transmission facilities in 1962. The Water Reuse project is being funded through a combination of State Grant ($2.9 million) and State Revolving Loan funds ($8.8 million) with annual debt service payments for Water Reuse beginning in 2005-06 ($573,000). 2. Water Conservation Enhancements to the City's water conservation program were approved.with the 2003-05 Financial Plan. Water conservation continues to remain a key component of our water resource strategy and the overall program costs are about $295,000 for 2005-06. Water conservation is perhaps the City's most cost effective supply, but we have already implemented most of the potential supply benefits from conservation and the annual program costs represent the ongoing maintenance costs for the program. There are several opportunities that staff will continue to evaluate to enhance the City's water conservation programs. These are discussed in more detail in the annual Water Resources Status Report (June of each year). 1 Attachment 1 Page 8 3. Nacimiento Pipeline Project Participation in the Nacimiento Pipeline Water Supply Project is the most significant water supply achievement in terms of both cost and benefit. The project, as identified, will provide the City with an additional 3,380 acre-feet per year of yield, providing adequate yield to meet our current General Plan build-out needs and provide greatly improved system and service reliability. The total project cost for the Nacimiento Project is estimated at $150 million for design and construction. The City's share of that cost is projected at $6.6 million for design and $64 million for construction. Debt service for design and operations and maintenance payments for the project are projected at $5.4 million beginning in 2010-11 and annually thereafter for the remaining life of the bonds (30 years). VI. LOOKING TO THE FUTURE A. Master plan upgrades and improvements Design of the Water Master Plan Improvements to our Water Treatment Plant is anticipated to be completed in winter 2005-06. This analysis projects initiation of the Master Plan Capital Improvements to our Water Treatment Plant in 2007-08 at a projected cost of$8.035 million. The analysis assumes debt financing for$6.2 million of the project costs. Funding for the Water Treatment Plant Master Plan Improvements will increase annual debt service by$456,200. B. Utility Billing Services With increasing water and sewer rates and customer growth, the need to complete a thorough review of our customer service/utility billing programs is becoming an increasing priority. The City Council has approved a contract with HDR Engineering Inc. to provide a through evaluation of customer service programs which include water and sewer rate structure issues, automated/remote meter read options, billing frequency, and billing system software to support the customer service needs of the community. C. Dispatch Center and Radio Systems Upgrade Improvements Utilities relies heavily on the radio system for dispatch of field crews and communication between crews on routine and emergency operations. The Enterprise funds will be expected to participate financially in the Dispatch Center and Radio Systems Upgrade Project. The project will be debt financed and annual debt service costs to the water fund are estimated at$46,200 beginning in 2006-07. D. Infrastructure Maintenance Industry standard would set annual infrastructure replacements at two percent of system value (based on a fifty year replacement cycle) for the water main distribution system. This equates to expenditures of $1250,000 in 2005-06 and $1,275,000 in 2006-07. Repair and upgrade at major facilities such as the Water Treatment Plant and pump stations is based on maintenance and repair history as well as depreciated value and overall efficiency. Attachment 1 Page 9 EXHIBIT A 2005 WATER FUND FINANCIAL SCHEDULES p pp pp pp o 8 _ ATTACHMENT 1.. Exhibit A. O 8 �O C N Pl wOn S II m O Qp+ f1 00 R V01 M Go M O% M ON a z 00 P 00 10,01 Q N Q V1 - l� 7 m e4 h O� o V'1 N V'1 M - h l- �O `S' O� Vl v R O 0C �O Vl O - - O� N 't r1 [� Iq V1 �O V 00 Vl M N �o - '+ N N N N = 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o a s -7 9 $ 000000go coo 0 0 0 0 00 >, e�• oo. 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O O O O a a ba O 0 0 0 0 0 0p 0 0 0 0 0 0 0 0 pp O O 00 00 �Q6 '9 O 7 O eT f0% 7 %O o lY O - M. M n d^ R O^ 00 O� O m t` tz a Mi. M r. r � N O- ON eh 00 -+ N V•e in V•e N_ b' iv b N a N M .. - O N t- 0 a V Va �a b - a N fV Oi O 7 %O N N rl N p euO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 p.-. O O a a O 0 0 0 0 0 0 0 0 O O O p O O O O O O 00 Vo'1 •O b t` O F- " 7 N v1 n r% M1 0 eD It ll I 00 �O 00 O, C7 e` eb a a M M 'r ul b M - V7 00 N b N N N V1 N Q N. 1` V) a 1` N M - a M 00 - 00. M M M M l� 00 .w M -It a - - .•r W N -- n - OD ... •.• �o 00 O V --� �o N N O Z ., U. p p p Ii 9. m O O O 0 0 0 0 0 0 0 0 0 0 - O O $ O $ O O 00. W � � r V O O h v a O h 00 -+ Ci O IO V� M e� v N \O V Oh Oi O kn N O. O N b eh 7 O a0 th Vi O O a 00 O to Q N Q 00 O n V 00 N - - N r- M O C\ � n 0It 00 N Mai r- Ntn 4 N e` .moi R z N --' N. v z tK c % a N 1 p p p Z � 3 C5 0O O O CD O pO O O O O O O O oQ oQ^ O O O O Oo U c+` �+ �G \G O N � a %O ri N M1 V1. O� 1% �D C f`� M _ O Q N O M V 0 00 h O_ ON MO 00 OON�i1 1, N O1 M O M O 00 ego L N a N � a N N - N c MNi- O r N- O� C e•: O r- - nOi V - �C a - eh Mi cn N a to - O a a d V O T ° tU O: Z h Q y C O0 m Gm U y y O C C y O L M ;11 d T. y . E e c Zy � {!- y O 0 u 3 U. U. _ Cl /rj a LQ v y E v Y=i I^\ y K L 6 z - y Q V y W Ci E. c E 6 11 c m d °' E L d D ai. _ ` v u W a3 n0 y ci V ? E o o = 'o 2 E zu Z " E E y r O 3 v Z E c aUi .Lc. U u �S > •" @ ° c o a d o 3 a o ° m° Q E ; o m m a ud 3 3 n ' o `� Ci F = a V F e F O A m _ enrA c� uaao � o u1� r � zu3u c O D. 3 ATTACHMENT 1. Exhibit A.2 m ' 0 0 0 0 0 0 e c� .i IO o 10 O N N N N O O N N p It N c0 N N tm0 N r N Q i0 L N m O d 69 6% E9 fA t9 64 Q N O O O O co o l0[7 (q N 0 O N N O 001 \ e Q N _ N c0 m c7 h Oj C7 (O cp �(1 p O I- O� LO r� N cc N �O�pp N i^O O V f7 �O 10 01 W EA to (B to69 cH cm6-1 pj ON cD R N � g cm N Q MO N NO to 0 N m p N Q c77OmtDco 60 cli 69 cc o p Q p N N �pO O O Q M O O p N co Go `�N' N LO O Vl7' O n N �cp7 �p � N m c0 Q N cD f9 61 to � to Q C 0 m m 0O O p pO O Op n 38 irni appppp `wp � Q Ln cli LON Ocm0.Om EO c' m <n co yEa co o 0o if, 0p0 -W cT O O ' ct OOn O CO nmN m ? CO O cj Cm M 6F> 60 to ^� O C m > o E m Q o OO jc0 poQ m mo p O o N 00j 0 O Ek 1: N u o o o m W 0 m 2! O c m co n a0 W m1 O p� O VjnCD pN r1n f7 aD Nn Cm N � O O m Cin o m o a m c m n - - - - t0 ado m E N m o o m o m O Z m O O m> p O ` m O. m A a0 m C I— m M ri E 0 V m E ° m c Z c t _ m to 0 o a m d > a' 2 o m n 2O o m m a o m _ m _ Z m E m o c m m Op y p m 1'L m c m N L E ammi m $ $ c m `o m r3 m e i`o m _ o > o W m c e c a m o m � 00 o E > ma o Q Q X `-� v E r w m `m ca o $ E:� c w ® m m m c m m E m c a U ¢ O ® C O > C m C 7 CO7 c m ¢ c m ca H '� cy o c ami m m m cclm D m g o E E m m m y .a E `m 3 y ¢ E CD m m m $ a .a m LL U c m m ¢ 3 0 m U ¢ 0 ca ¢ m LL m' m m d m a E -5rm m m p fA m lu m c N d ¢ a r3 li U ¢ c imo ui � c S H 0 C Z o m °e a m P? w ° c m m E v ¢ 0.� $ m ° l0 c c m c c m m y U m o `m E m m m c' c o w O `m E o `� ¢ c o >, a 3 g LL O g m c O CV y E j y m N .0 O w CL m m O O O U U U U U m W m m () E C m w m m m m O m c c c c 2 Z 2 2 2 m o E m Lb N = m E E E m cn m cnn y V o y m m v '2 v 3 N Q 3 0 z z z o 0 0 _ o . 0 0 3 0 ¢ 3 y^(�o ATTACHMENT 1 Exhibit A. w g o 0 0 0 0 0 0 0 o W o 0 0 0 0 0 0 M o a a. 0 0.. o 0 0 00 0 0 0 w S 0S 00 0 0 Op O 66 N kn Oeq V) in N N O O O O O O Oo O o en OO O O O N N O r-: 0 N N M M. en � - p Q O OO OO OO 00O �rl In 0 OOOL NM0 O. pph OO QN OO N O p^ 00 N O N N O M N Ln �' N M. a F �o W o 0 00000 0 0 0 0 0 0 . 06 N kn V1 l- n N Rn 00 p� N [- CN." N b % N N c#0 O O O O O OOO O 0 00 000 oOO O 00 O O O � �O N yN �b- _ in - FC14 y h N N U ,.a a 0 G A4 o G a e • E > Y • ¢ c ° 0En E .� :e o ^ • a fU L.. C cCd • F a E: F -0 o c d a c o L o? 0 3 y �' 4 O. o .L d cC y. ` .p Lpp .�+ Y U 0 o- T w O. y N v1 LL W E y �C 3AAuAa° w u 'VE [: cot (° 111-17 j ATTACHMENT 2 RESOLUTION NO. (2005 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO ESTABLISHING WATER 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 cost of providing services;and WHEREAS,a comprehensive analysis of Water Fund operating,capital and debt service needs has been performed for fiscal years 2005-06 through 2011-12;and WHEREAS; this comprehensive analysis has been revised based on updated revenue and expenditure information; and WHEREAS,the Council has reviewed the water service rates necessary to meet system operating, capital and debt service requirements. NOW,THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Resolution No.9568 (2004 Series)is hereby rescinded,effective July 1,2005. SECTION 2. The rates set forth in.Exhibit"A"are hereby adopted,establishing rates effective July 1,2005 and July 1,2006. SECTION 3. The water system access charges are increased from$22.09 per month to$23.86, per month,effective July 1,2005, and from$23.86 to$25.77 per month,effective July 1,2006,to reflect the increase in water rates. Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this. day of ' 2004. ATTEST`. Mayor Dave Romero Audrey Hooper,City Clerk APPROVED AS TO FORM: nathan Lowell,City Attorney - � 1 I EXHIBIT A to Resolution No. (Series 2005) MONTHLY WATER SERVICE RATES Rates Effective July 1, 00 Inside the City Rates 1 -5 CCF $2.93/CCF 5—10 CCF $3.67/CCF Outside the City Rates' 1 -5 CCF $5.86/CCF 5—10 CCF $7.34/CCF 'For service to customers outside the City,the rates are two times the in City rate. 2006Rates Effective July 1, Inside the City Rates 1 -5 CCF $3.16/CCF 5—10 CCF $3.96/CCF Outside the City Rates' . 1 -5 CCF $6.32/CCF 5—10 CCF $7.92/CCF 'For service to customers outside the City,the rates are two times the in City rate. J ATTACHMENT 3 RESOLUTION NO. (2005 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO SETTING WATER METER AND ADAPTER CHARGES WHEREAS, it is the policy of the City of San Luis Obispo to review charges on an ongoing basis and to adjust them as required to ensure that they remain equitable and adequate to fully cover the cost of providing fixtures. NOW,THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. The charges set forth in Exhibit"A"are hereby adopted,effective July 1,.2005. Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this day of- 2004. ATTEST: Mayor Dave Romero Audrey Hooper,City Clerk APPROVED AS TO FORM: C-o--na7-- than Lowell, City Attorney ^eo i EXHIBIT A to Resolution No. (Series 2005) WATER METER AND ADAPTOR CHARGES .58 x .75 inches (5/8 x 3/a inch) $53.70 .75 inch (314 inch) $81.05 1.0 inch $96.67 1.5 inch $553.00 2.0 inch $851.00 3.0 inch and larger Time and materials Adapter Costs 1.0 inch service/.58 inch z .75 inch meter $11.00 per pair 1.0 inch service/.75 inch meter $11.00 per pair 1.5 inch service/ 1.0 inch meter $52.00 per pair 2.0 inch service/ 1.0 inch meter $54.00 per pair 2.0 inch service/1.5 inch meter $78.00 per air Attachment 4 2005 WATER AND SEWER RATESURVEY Local Cities and Benchmark Cities- . �/-ZZ Attachment 4 2005 WATER AND SEWER RATE SURVEY In reviewing the attached survey results, it will be useful and more meaningful, if the reader is able to have a frame of reference for the information. Water Rates The City of San Luis Obispo primarily uses surface water (water from reservoir lakes) for its drinking water supply and the water must receive a high level of treatment. Some of the surveyed agencies obtain their water supply from wells which must only be treated with chlorine before being distributed. Also, the City of San Luis Obispo is recycling water; most of the surveyed agencies are not. The City is positioning itself for participation in a regional water supply project that will meet the City's long term water supply needs; it is difficult to tell where these other jurisdictions are in terms of meeting their general plan needs for water. The comparable water agencies or purveyors would be ones that rely upon surface water from local reservoirs, are recycling water, have comparable water use demand and have entered into long term planning to meet their general plan needs. Sewer Rates What are the characteristics of comparable agencies in terms of wastewater treatment? They would be treating to a disinfected, tertiary level, able to produce water of a quality that can be recycled for irrigation needs, and have met the requirements to discharge into a highly sensitive environmental area, such as the San Luis Obispo Creek. Also the agency would be in the process of renegotiating its discharge permit, something that happens only every five years, and would be planning to meet the California Toxics Rule and the Total Maximum Daily Load requirements. Also, that agency would have within the last fifteen years significantly upgraded their plant and be in the process of repaying a significant loan from the State. Finally, that agency would have a collection system with sections almost a hundred years old and need a significant amount to maintain and upgrade the system.. Conclusion All of these variables will affect where an agency is in teens of rates at any point in time. As a result, most point in time rate comparisons fail to provide meaningful or valid information. To complete a truly comparable rate evaluation, taking all variables into account, would require a substantial effort and still would not change the requirements and conditions facing the City. The City of San Luis Obispo is now in the mid-range for water costs, but at one time, it was among the top in costs. While the City of San Luis Obispo is among the top for sewer costs, it will likely change over the next five years as other agencies begin to plan for the long term and are required to meet the same regulations and requirements. Indeed, many of the industry publications over the last few months have been about the significant increases in the sewer costs in California communities. The City of San Luis Obispo values environmental stewardship, and in ensuring compliance with regulations and properly maintaining its infrastructure, the City continues to protect the community's and the environment's health in its wastewater treatment. ATTACHMENT ■ Icm 40 7 ` � f7 : k }}czk � ! ! \ 3 | 2 ; (k § ° 2® k § aR me f ; � o ■ ! 2 - ~ 7 ff! , a | e ea � ! � ■ I� § § v g ) 777 &7( ! _ ,X222 - - ; w 7[7 \ � / L) � ® ` � Ej ! Sm mk ~ 6 ~ ° ; !I 07�% §7) IL / | ) (£ { 16 �; k 5E _ ! | + 2 2 ! E ! : § \ � ! � ° , �• § wo # / ) ` ) ; ) ; ! ` wo : ! ■� E o 0 k { a � ! a 14-2 A MENI 4 T � § k\ . . . , or ; ;kaCi � 00 ! ■ ) � § ƒ) � � % � f7 ) § a ff cm yea ° ■ © 7— 20 cis � ` ■ {l . . , . [ |� , | 0) 42\ \ \ s(/ CL ° � k&! IL k } 22) ! ( £ ! E , . #§ � K * C4 Of C4 02 k � ! ! � k!! k !!Esa ! 2 , 9mmm FD 88 8 27 r , 2 / 2 § )E &k0 \\ ! \ 2 ° & ! ,— ;!!! � ■ JS /f J 0m �./S� m f \^ � qm _ � m ATTACHMENT 4 f : §« ! 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