HomeMy WebLinkAbout06/06/2006, PH1-A - 2006 WATER FUND REVIEW Counat Mw�.Do June 6,2006
agenda Report �N �-
CITY OF SAN LUIS OBISPO
FROM: John Moss, Utilities Direct
Prepared By: Kathe Bish Senior Administrative Analyst ]
Gary Henderson,Water Division Manager,4W
SUBJECT: 2006 WATER FUND REVIEW
CAO RECOMMENDATION
1. Review and accept the 2006 annual water fund financial review; and
2. Conceptually approve the proposed operating program change requests ($465,600) and
capital improvement plan requests ($128,000), pending the June 20, 2006 budget review and
adoption; and
3. Adopt a resolution rescinding Resolution #9463 (2005 Series) increasing water service
charges by 8%, effective July 1, 2006, and adopting revised rate increase of 12%, effective
July 1, 2006 and establishing a third tier water rate for single family residential customers
using greater than 25 units per month; and
4. Adopt a resolution revising water meter and adaptor costs, effective July 1, 2006.
DISCUSSION
The 2006 Water Fund analysis confirms the ongoing moderate rate increases forecasted in recent
years during consideration of the Nacimiento water supply project and the Water Treatment Plant
Master Plan Improvement project. With this rate increase, the Water Fund will continue to be
healthy and stable, capable of supporting the continuing operations and capital programs. This
report recommends adoption of a resolution increasing water rates by 12%, effective July 1, 2006
and establishing a third tier water rate for single family residential customers using greater than
25 units per month. Additionally, a resolution revising water meter and adapter costs to the
current pricing structure, based on the amount Utilities is currently paying for these materials, is
attached.
Within this-analysis, which forecasts the water fund's financial position until 2013, the City is
able to upgrade the Water Treatment Plant, deliver recycled water for irrigation, and achieve its
long-term goal of adequate water supply through participation in the Nacimiento water supply
project. This analysis also includes an ongoing level of capital maintenance projects to maintain
the City's water infrastructure assets at industry standard levels.
Although regular annual rate increases are forecasted to position the water fund to meet its
current and future obligations, the water rates are projected to decrease each year and then level
off in 2012. Last year, in the 2005 water fund analysis, rates for 2006-07 were projected to
2006 Water Fund Review Page 2
increase 8%. The recommended 12% water rate increase (4% greater than previously projected)
is driven by a number of factors, including: (1) increased chemical costs for water treatment; (2)
additional customer service staff to provide monthly utility billing and volume based sewer rates
to the community; (3) increased electrical energy costs; (4) added staffing resources to continue
to meet the increasing demands in providing water treatment and laboratory services, and
maintaining regulatory, environmental and health standards; (5) increased construction costs for
the Water Treatment Plant Master Plan Improvements, and; (6) Nacimiento interest payments on
debt service in 2006-07 and 2007-08 for project design. Recommended changes to the currently
approved 2006-07 Budget in the amount of$593,600 are summarized as follows:
Significant Operating Program Change Requests
Program Description 2006-67
Water Treatment Electric utility cost increase for on-peak electrical 72,500
Source of Supply periods to ensure adequate coverage and oversight of
WTP upgrade project
Water Treatment Chemical cost increase to provide necessary water 20,300
treatment
Water Treatment WTP Operators—two additional positions to ensure 172,200
appropriate levels of certified staff to provide high
quality uninterrupted water treatment
Water Treatment Laboratory Analyst to support increased water and 62,500
wastewater demands including water reuse -
proportionate share 75%
Water Fund contribution to Customer service staff and operating materials to 138,100
Water Customer Service— support monthly utility billing: two Water Customer
Monthly billing and volume Service Personnel and one Accounting Assistant—
based sewer billing proportionate share 50%
Total $465,600
Capital Improvement Plan Requests
Description 2006-07
Water Distribution Additional cost($212,000 currently budgeted)to 108,000
replace two service trucks due to increased cost in
materials and labor to construct service bodies to
effectively meet o erational needs
Water Fund contribution to Fleet addition for two light pickups to support monthly 20,000
Water Customer Service— meter reading—proportionate share 50%
Monthly billing and volume
based sewer billing
Total $128,000
What does this mean to the average residential customer? For the average residential customer
2006 Water Fund Review _ Page 3
using 10 units ("ccf') of water monthly, the following illustrates the changes to the monthly bill
with the recommended increase.
Average Residential Water Customer Monthly Bill
Assuming 10 units of water use per month
CCF 2005-06 2006-07
1 -5 $2.93/ccf 14.65 $3.28/ccf 16.41.
5-25 $3.67/ccf 18.35 $4.11/ccf 20.55
25+ n/a n/a $5.14/ccf n/a
$33.00 $36.96
The 2006 Water Fund Analysis
Attached to this report is the 2006 Water Fund Analysis including the details of the process and
assumptions used to complete the analysis. In addition, detailed information on the Water Fund
2006-07 significant operating program change requests and capital improvement plan requests
are included in Attachment 1. 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 an increase to the 2006-07 water service
charges and projects a series of annual rate increases through 2012-2013. As identified in recent
years, the water fundis being positioned to pay for the City's share of the Nacimiento Project and
the Water Treatment Plant Master Plan Improvements, as well as meeting operational demands,
maintenance programs, improving customer services and ensuring the water fund's fiscal health.
Major Activities and Programs
Water Reuse Project- After over a decade of planning, design and construction, the Water Reuse
Project is posed to begin delivering recycled water to City parks, school grounds and median
landscaping areas this summer. This is the first new water supply project since the construction
of the Whale Rock Reservoir. The project will initially offset about 130 acre feet of existing
potable water used for landscape irrigation. Annual debt service payments of $573,100
beginning in 2005-06 are included in the Water Fund Financial Analysis. In addition, a close out
contingency for the water reuse project of$800,000 is included in 2006-07.
Water Conservation - As part of the 2003-05 Financial Plan, Council approved the funding for an
expanded water conservation program that would include a more aggressive irrigation efficiency
component and a broadened commercial conservation program. It is estimated, based on.an
analysis of water use before and after the measures were implemented, that the new programs
will yield about 120 acre feet per year savings on an ongoing basis.
Water Rate Structure - On April 18, 2006, Council approved the addition of third tier pricing to
the residential water rate structure for customers using more than 25 units of water per month,
effective July 1, 2006, which is included in this analysis. Staff is providing public information
and outreach to customers that includes the three tiered water rate structure and best practices to
increase water conservation.
� F� - 3
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2006 Water Fund Review Page 4
Nacimiento Pipeline Water Supply Project- As of May 2006, the project design is approximately
30% complete and the preliminary design report has been completed. The project schedule
anticipates beginning construction in July of 2007 and water deliveries to begin in 2010.
Annual operating and maintenance payments are projected at $4.3 million in 2010-11 increasing
to $5.75 million annually thereafter.
Water Treatment Plant Master Plan Improvements - The Water Treatment Plant Improvement
Project will provide improved treatment capacity and reliability to insure high quality water
supplies to the community. The contract for the construction was awarded to Stanek
Constructors on May 16, 2006. Construction is anticipated to begin in July of 2006 and
completion. is scheduled for December of 2007. Annual debt service payments are projected at
$815,800 in 2006-07 increasing to$1,085,900 annually thereafter.
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. This Citywide project managed by Finance and Information .
Technology will be debt financed. Annual debt service costs to the water fund are estimated at
$15,200 in 2006-07, with full debt payments beginning in 2007-08 at$46,200 annually.
Water Meter and Adaptor Material Costs
The update to the charges for meters and adaptors is to simply update the charges to reflect the
amount staff currently pays for these items. The table below shows the current and proposed
changes.
Meter and Adaptor Charges
Approved Proposed
Meter Costs Meter Costs*
_58 x.75 inches(5/8 x3/4 inch) $53.70 .58 x.75 inches(5/8 x 3/4 inch) $ 57.07
.75 inch(3/4 inch) $81.05 .75 inch(3/4 inch) $ 86.14
1.0 inch $96.67 1.0 inch. $102.74
1.5 inch $553.00 1.5 inch $650.00
2.0 inch $851.00 2.0 inch $995.00
3.0 inch and larger Time&materials 3.0 inch and larger Time&materials
Adapter Costs(Per Pair) Adapter Costs(Per Pair)*
1.6 inch service/.58 x.75 inch meter $11.00 1.0 inch service/.58 x.75 inch meter $ 10.25
1.0 inch service/.75 inch meter $11.00 1.0 inch service/.75 inch meter $ 9.00
1.5 inch service/ 1.0 inch meter $52.00 1.5 inch service/ 1.0 inch meter $66.25
2.0 inch service/ 1.0 inch meter $54.00 2.0 inch service/ 1.0 inch meter $72.00
2.0 inch service/ 1.5 inch meter $78.00 2.0 inch service/ 1.5 inch meter $103.00
'The 1'h"and larger meters are required to be Metron meters(different manufacturer than smaller meters)which are much more accurate
but are more expensive. The 1"adapter costs are slightly lower in 2006 as compared to 2005 material costs,although the 1'h"and larger
adaptor costs have increased.
I
2006 Water Fund Review Page 5
ATTACHMENTS
1. 2006 Water Fund Analysis
Exhibit A— Financial Schedules
A.I. Changes in Financial Position
A.2. Assumptions for Fund Projections
A.3. Significant Operating Program Change Requests
A.4. Capital Improvement Plan Requests
2. Resolution Rescinding Resolution #9463 (2005 Series) and Setting Water Service Charges
Exhibit A. Water Rates for 2006-07
3. Resolution Revising Water Meter and Adapter Costs
Exhibit A. Water Meter and Adaptor Costs
GA2005-07 Financial Plan\2006-07 Budget\2006 Fund Analysis\Water\2006 Water Fund CAR.doc
ATTACHMENT 1
2006 Water fund Analysis
June 6, 2006
Prepared by the
Utilities Department
city of san WIS OBIspo
r
Attachment 1
Page 2
City of San Luis Obispo
2006 Water Fund
TABLE OF CONTENTS
I. OVERVIEW
H. 2006-07 BUDGET
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. Revenues
B. Expenses
C. Debt Service Payments
V. 2005-06 UPDATE
A. Major Activities and Programs
EXHIBIT A— FINANCIAL SCHEDULES
A.1. Changes in Financial Position
A.2. Assumptions for Fund Projections
A3. Significant Operating Program Change Requests
A.4. Capital Improvement Plan Requests
(A r)
Attachment I
Page 3
Cly/ Of
�r san LUIS OBISPO
2006 Water Fund Report
I. OVERVIEW
This report presents the financial condition of the Water Fund, based on the 2005-07 Financial
Plan: 2006-07 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.
II. 2006-07 BUDGET
A. Summary of Operating Programs
Including requests shown in section B. 2006-07
BUDGET
Source.of Supply 1,109;500
Conservation 401,100
Treatment 1,515,000
Water Distribution 929,900
Customer Service 431,200
Administration/Engineering 595,600
Water Taxes and Fees 434,800
Total Water Services 5,417,100
B.Significant Operating.Program Change Requests
2006-07
BUDGET
Source of Supply
Electric Cost Increase 36,800
Water Treatment Plant
Electric Cost Increase 35,700
Chemical Cost Increase 20,300
Water Treatment Plant Operators 172,200
Lab Analyst-proportionate share 75% 62,500
Water Customer Service
Customer Service Staff—proportionate share 50% 138,100
Total Water Services—SOPC's 465,600
i
Attachment 1
Page 4
C. Capital Improvement Plan Requests
2066-07 2007-08 2008-09 2009-10 2010-11
REQUESTS PROPOSED PROPOSED PROPOSED PROPOSED
Source of Supply
Water reuse master plan 250,000 250,000 250,000 250,000
Water Treatment Plant
Major facility maintenance 50,000 50,000
Water Distribution
Distribution master plan implementation 250,000 250,000 250,000 250,000
Distribution system improvements 1,300,000 1,325,000 1,350,000 1,375,000
Downtown sprinkler reimbursement 25,000 25,000 25,000
Polybutylene water service replacement 350,000 350,000 350,000
Fleet replacement:
2 ton service body trucks 108,000
5- 112 ton pickups 32,800 57,900
Flatbed with crane 63,900
Water Customer Service
Fleet addition: 2 pickups-share 50% 20,000
Administration and Engineering
Fleet replacement: Sedan 17,000
Total Water Services New Requests 128,000 2,338,700 2,307,900 2,225,000 1,875,000
Water Services 2005-07 Financial Plan CIP 2,698,300
Shared City Information Technology CIP 86,200 6,400
Total Water Fund CIP. 2,826,300 2,424,900 2,314,300 2,225,000 1,875,000
III. RATE SETTING
A. 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.
► A - 9
Attachment l
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 coverage 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.
Ntonthly Water Charges
Inside the City Rates I— 5 CCF $2.93/CCF
5—10 CCF $3.67/CCF
Outside the City Rates I — 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.
C. Water Rate History
The table below shows 2006-07 proposed water charges including the previously approved third
tier pricing to the residential water rate structure for customers using more than 25 units of water
per month effective July 1, 2006,followed by a ten-year history of water charges.
Proposed 1-5 ccf $3.29/CCF
2006-07 5-25 ccf $4.12/CCF
more than 25 ccf $5.15/CCF
I � — � O
Attachment 1
Page 6
Year
nthly Charge
' 1-5 ccf 2.93
2005-06 more than 5 ccf 3.67
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.I. 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, which covers the current period ending
June 30, 2007, 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 pay only those fees in
place at the time of approval.
Attachment 1
Page 7
B. Expenses
The operating and capital expenses are based upon projections to the end of the 2005-06
fiscal year and the preliminary 2006-07 Budget. Thereafter, operations and maintenance
costs are adjusted assuming an inflation rate of 3%.
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 $1,078,100 in 2006-07. The 2001 lease revenue bonds (about$390,000
annually) will retire in December 2008.
2. Debt service to pay for the energy conservation projects is $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 $573,100 in 2006-07.
4. Debt service interest only for the design of the Nacimiento project is $295,000 in
2006-07 and 2007-08.
5. Debt Service is increased by $815,800 (pro-rated first payment) in 2006-07 for the
upgrades to the Water Treatment Plant, with estimated full payments at $1,085,900
annually beginning in 2007-08.
6. Debt service for the water fund's share of the new dispatch center and radio system
upgrades are projected at$15,200 in 2006-07 and$46,200 annually thereafter.
V. 2005-06 UPDATE
A. Major Activities and Programs
1. 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' construction improvements required for the Recycled Water
System were completed in spring 2005-06. Recycled water deliveries are
anticipated to begin in July 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 1961. The Water Reuse project is 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 at$573,100.
2. Water Rate Structure
On April 18, 2006, Council approved the addition of third tier pricing to the
residential water rate structure for customers using more than 25 units of water per
month, effective July 1, 2006, which is included in this analysis. Staff is providing
public information and outreach to customers that includes the three tiered water
rate structure and best practices to increase water conservation.
Attachment 1
Page 8
3. Water Treatment Plant Master Plan Implementation
Design work for the Water Master Plan Improvements to the Water Treatment Plant
was completed in January 2006, with the construction.contract awarded on May 16,
2006. This analysis includes the Master Plan Capital Improvements to the Water
Treatment Plant in 2006-07 at a cost of $16.78 million. The debt financing for
$15.47 million of the Water Treatment Plant Master Plan Improvement project
costs will increase debt service by $815,800 (pro-rated first payment) in 2006-07,
with estimated full debt payments at $1,085,900 annually beginning in 2007-08.
4. Nacimiento Pipeline Water Supply 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
water, providing adequate supplies 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. Annual operating and maintenance payments to the County for the
project are projected at $4.3 million beginning in 2010-11 and $5.75 million
annually thereafter.
5. 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 $15,200 in 2006-07, with full
debt payments beginning in 2007-08 at$46,200 annually.
6. Infrastructure Replacements
Industry standard would set annual infrastructure replacements at two percent of
system value (based on a fifty year replacement cycle) for the water distribution
system. This equates to expenditures of $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 overall efficiency.
i
Attachment 1
Page 9
EXHIBIT A
2005 WATER FUND
FINANCIAL SCHEDULES
Attachment 1
Exhibit A.1
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Attachment C
Exhibit A.3
OPERATING PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
ELECTRIC COST INCREASE-WATER TREATMENT PLANT AND RESERVOIR OPERATIONS
Sn';t p< J:t,'':w7 Y a; u.r ,T"':, *'' •,s a' ,`r."« r' 'i,`.•1
n
Request Summary
Increasing electrical utilities funding at the Water Treatment Plant (WTP) and Whale Rock, allowing for facilities
operations during peak energy use periods, to ensure adequate coverage for treatment plant operations and
oversight during the Water Treatment Plant Upgrade Project will cost $35,700 for Water Treatment and $36,800
for Reservoir Operations; a total electrical cost increase of$72,500 in 2006-07..
Key Objectives
Ensure the Water Treatment Plant meets daily water supply demands and allow staff to provide oversight of
construction improvements during the Water Treatment Plant Upgrade Project.
Factors Driving the Request for Change
1. Provide coverage to meet daily operational demands.
2. Provide additional oversight of construction improveritents during the WTP Upgrade Project.
3. Ensure sufficient supply of water to meet City demands.
Alternatives
In 1995, the Water Treatment Plant implemented "off-peak" operations as a cost savings program. The savings
result from the operation of the Water Treatment Plant outside of PG&E's peak electrical rate period of noon to
6:00 p.m., May through October. Due to operational constraints and oversight concems during construction, this
option is not recommended.
Operating Program
Water Treatment Plant
Source of Supply
Cost Summary
Lane Item Description Account Na 2006-07
Coumunca6ons-&Utilities _ _.._.__ ___—. _. _---- _._
2rW.
Bect=ical Utility Service 500-55150-7605 35,700
Whale Rock Opwations 500-55110-7311 36,800
Total Costs 723500
Net Operating Costs 72„500
Attachment I
Exhibit A.3
PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
CHEMICAL COST INCREASES FOR WATER AND WASTEWATER TREATMENT
i r ti. i.'= .'.', ':�: ..+ :?.: �1' r „!, :• .'p � ✓»... ff ,,. 1749 7�j:,t v`+�ryt i 4' i .Y.w. 'P�,.' V.�''
Request Summary
Increasing chemical costs for the Water Treatment Plant and the Water Reclamation Facility will require an
additional$20,300 for Water Treatment and$20,000 for Wastewater Treatment respectively; a total chemical cost
increase of$40,300 in 2006-07.
Key Objectives
1. Ensure compliance with the Department of Heath Services (DHS)and Regional Water Quality Control Board
(RWQCB)standards,for water quality.
2. Protect the citizens and the environment of San Luis Obispo.
Factors Driving the Request for Change
In December 2005, proposals received from chemical vendors as part of the City's Invitation for Bid (IFB)
process for chemicals for water and wastewater treatment showed marked increases in chemical costs. The
Utilities Department routinely bids out chemicals prior to financial plan development to ensure adequate budget
for the purchase of these chemicals during the ensuing fiscal period. Chemical addition at both of these facilities
is mandated by state regulatory agencies responsible for overseeing the safe treatment of the City's drinking
water supply and the successful treatment of the City's wastewater. Chemical addition in the treatment of
drinking water and wastewater is an ongoing and crucial part of plant process management. Contractswith
vendors to provide chemicals for water and for wastewater treatment were signed in January 2006.
Alternatives
There are no reasonable alternatives. Invitation for Bids for Chemicals for Water and Wastewater treatment are
offered regularly. This current structure offers the City the best opportunity to secure competitive prices.
Operating Program
Water Treatment
Water Reclamation Facility
Cost Summary
Total cost increases for chemicals for Water and Wastewater Treatment will be $40,300 in 2006-07. The Water
Treatment Plant chemical costs will increase by $20,300 per year and the chemical cost increases for the Water
Reclamation Facility will be$20,000 per year.
Attachment 1
Exhibit A.3
OPERATING PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
Line Item Description 1 Account No.1 2006-07
Other O ``ratin' endituies .i __ . ' w,_:. . `. . _ _ 4(1;300.
Aluminon Sulfate 500-55150-7755 8,400
Chlorine(Water) 500-55150-7777 8,700
Filter Aids 500-55150-7801 2,000
Sodium Silicofluoride 500-55150-7887 1,200
Chemicals(General) 520-55330-7775 20,000
Total Operating Costs 40,300
Net Operating Costs 40,300
Attachment l
' Exhibit A.3
oPERAANG
PAOGRAMS-
SIGNIFICANT OPERATING PROGRAM CHANGES
WATER TREATMENT PLANT OPERATORS
:..,. t:.j� x ..' �".�, -..�...,, j.'..:;`•r t d.�;'', ..1'..�,ar r�."�A�s > y �.:y.�'.-'�wtv+t'^..YS� 'f f •vf.i. ,4. rt_r�'�, +".wi,'
Request Summary
Adding two Water Treatment Plant Operator positions will allow the Water Treatment Plant (WTP) to continue to
provide high quality uninterrupted water treatment, meet all regulatory requirements and ensure appropriate
levels of certified staff, will cost$172,200 in 2006-07.
Key Objectives
1. Ensure compliance with current and future regulations.
2. Provide adequate shift coverage.
3. Meet increasing WTP operations and maintenance demands.
4. Ensure proper level of qualified staff.
5. Provide for succession planning and long term WTP staff retirement.
6. Provide additional oversight of WTP Upgrade Project construction improvements.
Factors Driving the Request for Change
1. Impending State and Federal drinking water regulations have increased operation, sampling and reporting
requirements in order to demonstrate and maintain compliance. These significant new regulations include:
a. Disinfectant/Disinfection By-products Rule Stage II
b. Enhanced Surface Water Treatment Rule
c. Long Tenn II Enhanced Surface Water Treatment Rule
d. Unregulated Contaminant Monitoring Rule
e. Radionuclides Regulations
f. Ground Water Rule
2. Projected increases in City water demand will require the WTP to increase plant operations from 17 hours
per day to 24 hours per day during peak demand periods in the future. This will require one additional shift
per day.
3. Water Treatment Plant organizational needs:
a. The water treatment plant has recently experienced a shortage of qualified, certified, experienced
operations and maintenance applicants, increasing the need to fill positions with less qualified entry
level personnel,providing a lower level of coverage for the facility.
b. Impending retirement and more frequent staff turnover have increased the training and oversight
demands of the Water Treatment Plant Supervisor and Chief Operator, requiring the need to double
staff until entry level staff can become fully trained and certified to operate independently.
c. The Utilities Department is increasingly becoming a "training organization" to address recruitment
issues. Staff training requires direct oversight by our limited certified operations staff until nye^.w{ staff
N^J
11 v r �
Attachment 1
Exhibit A.3
OPERATING
s ■ ■ ■ ■
SIGNIFICANT OPERATING PROGRAM CHANGES
is able to attain the required level of certification (Grade III)to operate independently. The minimum
qualifications to obtain a Grade III certification requires two years of experience working as a
certified operator,plus 9-units(108 hours)of specialized training in drinking water treatment.
4. The WTP Upgrade Project,with construction to begin in June 2006, will have increased demands of staff:
a. Additional staff will provide the benefit of additional oversight during the construction
improvements.
b. After construction, the facility will require greater operator oversight of the new high-rate
sedimentation process.
c. In general,there is an increasing maintenance workload due to added equipment and facilities as well
as aging infrastructure and equipment not affected by the project.
Alternatives
1. Continue the status quo. The City will experience problems with shift coverage and providing proper
maintenance and oversight of the WTP operations. If nothing is done at this time or action is deferred, the
City could experience a shortage of properly certified staffing with substantial increases in overtime and
possibly contracted maintenance costs. Therefore,this alternative is not recommended.
2. Defer or re phase the request. Operation of the WTP requires minimum staffing levels of trained and
certified staff to ensure water quality and plant maintenance. Deferring this request would result in the few
staff members whom are trained and certified required to work increased overtime shifts to maintain
operations. Deferring this request: (1) would require the need for additional overtime budget; (2) would.
require additional overtime shifts, as a means to meet operational demands,which lead to increased employee
burnout and potential public heath risk; (3) does not address the recruitment and staffing issues currently
impacting the operations of the WTP and forecasted with upcoming retirement, and; (4) would not provide
the required staffing to allow proper oversight of the facility upgrade project. This alternative is not
recommended.
3. Implement it in a different way. Contract operations have been investigated. There are firms that may be
interested in.assuming control of the entire operation. There is no reason to believe contract operations
would be less expensive. Due to staff's knowledge of other water system's experience with contract
operations,this alternative is not recommended.
Overtime is not recommended as a solution due to the extended shift work already being performed by staff.
Alternative work schedules have been investigated. Due to the unique operational demands of the WTP,this
alternative is not recommended.
4. Existing program evaluation. Staff analysis confirms the need to increase WTP staff by two additional
operations staff. These additional positions will most efficiently meet WTP and City demands. It is
infeasible to expect to meet the WTP demands with fewer regular employees.
Implementation
-D.----
Begin recruitment of the two operator positions 7/06
Fill positions 9/06
� A '
� Attachment I
Exhibit A.3
OPERATING PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
Operating Program
Water Treatment Plant
Cost Summary
11ne Item Description Acmmt N&I 200607
166,900..
Salaries-Regular 500-55150-7010 107,200
Retirement Contributions 500.55150-7040 28,700
Health&Disability Insurance 500-55150-7042 12,900
Medicare 500-55150-7044 1,600
UnernpIoyrnent Insurance 500-55150-7046 400
Workers.conp Insurance 1 500.55150-7048 16,100
1,500
Laundry&linen Service Contract 500-55150 7259 1,500
_ _ _ . _ . 3,800
Association 500-55150-7453 500
Education&Training 500-55150-7459 1,300
Operating Material&Supplies 500-55150-7843 1,000
Protective Clothing 500-55150-7861 500
Safety Supplies 500-55150-7875 _ 500
Total Operating Costs 172,200
Net Operating Costs 172,200
_ Attachment 1
Exhibit A.3
OPERATING
• s
SIGNIFICANT OPERATING PROGRAM CHANGES
LAB ANALYST FOR WATER AND WASTEWATER PROGRAM REQUIREMENTS
•i,`. p v.::=777777771777771t" .Y,..
Request Summary
Meeting the laboratory demands created by the continued workload for both water and wastewater analysis and
sampling, and the water reuse program has created a workload that cannot be met by the existing Water
Reclamation Facility Laboratory staff and will require one additional laboratory analyst at a cost of$84,200 in
2006-07. This request was identified as part of the 2005-07 Financial Plan as a necessary step in meeting the
increasing laboratory workload created by water reuse, special studies and regulatory requirements, but was
deferred because of fiscal constraints. Part-time temporary staffing approved in the 2005-07 Financial Plan for
fiscal year 2005-06 has helped offset some of this increasing demand during the past year. However, one regular
lab analyst is necessary to meet the current demands and the significant workload associated with ensuring water
quality standards are being met for water reuse.
History of the Water Reclamation Facility Laboratory
The Water Reclamation Facility(WRF) laboratory.section was created in 1993 with the completion of the WRF's
$20,000,000 upgrade in 1993. At that time, it was recognized that dedicated and specialized laboratory staff were
necessary to comply with the WRF's stringent NPDES permit and perform the numerous process control analyses
needed to operate a tertiary treatment facility. Staff were added in 2001 and 2005 to help alleviate the
tremendous growth in analytical workload created by continuingly more stringent NPDES permits and related
sampling requirements, required special studies and creek sampling, pilot testing, taking on water treatment and
distribution system analysis, and increased laboratory certification requirements. These factors have also
required the Chief Laboratory analyst to spend more time .managing the section's growing duties, data
management and reporting, and ensure the overall quality of the laboratory services. The Laboratory now serves
the entire Utilities Department and has become an important component of the Department's overall success in
providing technical analysis,compliance monitoring and customer service.
Key Objectives
1. Meet all program/permit requirements for the Water Reuse Program, special studies and water and
wastewater operating programs.
2. Ensure high quality water and wastewater through laboratory and process control analysis.
3. Complete all laboratory analysis within required time frame.
4. Entire consumer and public confidence in recycled water,drinking water and wastewater effluent.
5. Meet all regulatory demands effectively and efficiently.
6. Maintain clear concise certifiable records of all sampling events and analysis.
7. Meet increased sampling and analyses demands to ensure compliance and avoid mandatory penalties.
8. Protect environmental resources and human health.
Attachment 1
Exhibit A.3
OPERATING PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
Factors Driving the Request for Change
1. Change in Laboratory Certification Standards. Since 1995 the WRF's laboratory was required to comply
with significantly more stringent Quality Assurance/Quality Control (QA/QC) standards to perform
laboratory analyses: QA/QC is a State requirement of certification for laboratories to assure that analyses are
performed in a determined manner to guarantee accurate and reliable results. All of the analyses found in the
City's NPDES permit and those required for all of its special studies must be performed by a certified lab.
This more stringent certification continues to add staff hours to perform the QA/QC procedures. The
certification of our laboratory is critical to allowing the laboratory to perform a variety of analysis that would
otherwise have to be performed by a contract lab at a significantly higher cost. All certified labs in California
must perform QA/QC to be certified.
2. Regulatory sampling and analysis for the Water Reuse Project. The Water Reuse Project will be
operational in April 2006. The Master Reclamation Permit issued for the project by the State Water
Resources Control Board requires daily coliform, turbidity, and chlorine residual sampling and analysis. The
coliform sampling is extremely time consuming and can best be done in house to control costs and provide
results as quickly as possible. Many in-house analyses have very short holding times and timely results are
crucial to allow operational changes that will guarantee protection of public health and recycled water
quality. Timely process analysis will also be critical to water reuse to ensure that treatment processes are
being operated efficiently and compliantly to assist staff in reporting to regulatory agencies. The Laboratory
will also be responsible for making the additional calibration standards for a variety of the new process
equipment to ensure proper process control. These requirements will require a significant amount of one
analyst's time. The beginning stage of the water reuse project is a critical period to ensure consumer
confidence in recycled water and adequate and competent laboratory staffing will be an essential component
of a successful City water reuse program
3. Operational and regulatory needs at the Water Reclamation Facility Laboratory.. Laboratory staff
continue to struggle to meet the ongoing amount of regulatory and operational laboratory analysis. Added
sampling requirements from last year's NPDES permit, time sensitive process analysis, meeting the demands
of QA/QC analysis, performing analysis for a variety of the City Departments and handling customer service
requests strain the laboratory's available staffing. Hiring a full time laboratory analyst to cover a portion of
these demands will help alleviate the majority of these issues.
4. Meeting trihalomethane limits and other requirements. Options for meeting Trihalomethane (THM)
Limits as outlined in our discharge permit issued by the Regional Water Quality Control Board will continue
to require study which consumes laboratory time: Researching new ways of achieving disinfection without
the use of chlorine, which causes the formation of THM's, must be completed in 2006 and will include some
pilot studies. These pilot studies will consume laboratory time for sampling and analysis. Additional
analysis and studies will be requited for the upcoming renewal of the WRF's NPDES permit, improvement
design and special projects.
5. Performing all required analyses. Currently the lab is not performing a variety of analyses that should be
completed routinely. The analyses have been prioritized to ensure that operations at the WRF will not be
adversely affected by deleting some of the recommended testing, but this forces the facility staff to make
operational decisions without all of the proper information. This additional information would enhance the
facility's operations. Some analyses are critical and will be needed to comply with upcoming permit
requirements next year and to ensure proper control of new processes.
Attachment 1
Exhibit A.3
OPERATWO
-PROGRAMS■ • ■
SIGNIFICANT OPERATING PROGRAM CHANGES
Alternatives
1. Continue the status quo. This is not recommended. Although current workload is being met by temporary
staffing, this does not include the workload generated from the water reuse project. This additional analysis
will require approximately 75% of one analyst's time and will best be performed by full-time staff. The
coliform pathogen analysis requires extensive daily preparation and setup on top of the sampling, analysis
and management of analytical results. The temporary staffing for this position in 2005-06 was meant to be a
short tetra solution and conflicts with the City policy on use of temporary staffing.
2. Defer or re phase the request. The Water Reuse project is just finishing construction and will be delivering
recycled water this summer. Additional requirements will continue to increase the lab's workload. Re-
phasing of the water reuse program is not possible and adequate laboratory staff is vital to its operation and
consumer confidence. This request was previously deferred as identified in the 2005-07, Financial Plan,
Appendix A,pages 14-16,and is currently being partially covered by temporary staffing.
3. Implement it in a different way. Using a contract laboratory is neither practical nor cost efficient. Water
Reuse sampling will be required seven days per week and each sample requires a complicated and time
consuming,set-up and analysis that requires close monitoring for signs of bacterial growth. Immediate
response by WRF operations staff to any sign of bacterial growth will keep the delivered recycled water safe.
Additionally, the hold time on samples taken, such as coliform presence and chlorine residual, is very short
requiring daily sample pick-up. Process analysis is a critical function that is best accomplished by on-site
staff. Immediate response to the variety of requests and urgent unscheduled sampling event could not be
achieved with contract lab services. Generally, most required and process sampling and analysis, and
subsequent data management, can be done more efficiently by in-house staff than by a contract laboratory
services.
Below is a table that shows the estimated costs of analysis that may be practical to send to a contract
laboratory. These numbers are estimates and do not reflect the additional costs that would be incurred for
additional pick-up service from the lab. These costs would be significant given it would require sample pick-
up seven days a week instead of the two days during the week per our current contract with the lab. It is also
important to note that these analysis costs do not reflect the approximate 20% of a lab analyst's time
performing sample collection and performing sample preparation for shipping.
Estimated Cost for Contract Laboratorz Services
Coifs;fpr G atract I.a`borsto Scrv><c`es ,2006 0'i<.
Bacteriological Sampling for Water Reuse(8 months) $73,000
NPDES Permit Analysis $48,400
Process Control Analysis $27,000
Total $1489000
Implementation
Task bate
Hire lab analyst July 2006
2
Attachment 1
Exhibit A.3
PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
Operating Program
Water Reclamation Facility
Cost Summary
Hiring one laboratory analyst will cost$84,200 in 2006-07.
Line Item Description Account N&I 2006-09
Regular Salaries 7010 53,600
Retirement 7040 14,400
Health and Disability 7042 6,400
Medicare 7044 800
Unemployment Insurance 7046 200
Workers Comp Insurance 7048 8,000
Other O ra ' E ndiures 800
Laundry and linen 520-55330.7259 800
Total Opera' Costs 84,200
Net Operating Costs 84,200
The workload and staffing expenses for one additional laboratory analyst to meet the demand of the Water Reuse
Project, regulatory sampling and operational requirements and studies will be charged 75% to the Water Fund for
water reuse and 25%to the Sewer Fund for wastewater process analysis and study activities.
Requested Funding by Souree Account No. 2006-07
Water Fund
Water Reuse(75%) 500.55150 62,500
Sewer Fund 520.55330 21,700
Wastewater Process Analysis and Studies(25%
Total 84,200
t9 - D-U
-� Attachment 1
Exhibit A.3
PROGRAMSiOPERATING
SIGNIFICANT OPERATING PROGRAM CHANGES
CUSTOMER SERVICE STAFFFOR.MONTHLY UTILITY BILLING
F Cpl°M Yi6 .F �4M1 JK° t
Request Summary
Adding two Water Customer Service Personnel.positions, one Accounting Assistant position, and associated
operating materials and supplies to provide the necessary resources to implement monthly utility billing will cost
$276,100 in 2006-07.
Key Objectives
1. Provide billing frequency that is easier for customers to budget for.
2. Provide timely consumption information to customers wishing to conserve water and control their costs..
3. Provide monthly billing consistent with other utilities and service providers.
Factors Driving the Request for Change
■ City Council direction on April 18,2006 to implement monthly water and sewer billing.
■ Provide timely information to customers to improve water conservation.
■ Make it easier for customers with tight financial budgets and who have difficulty budgeting for a bill on a
bimonthly basis.
■ Provide information needed to implement volume based sewer billing.
Alternatives
1. Continue the status quo. Achieving monthly utility billing and associated goals can not be accomplished
with current staffing levels.
2. Implement it in a different way. An evaluation was prepared for utilizing"automated meter reading"(AMR)
systems as an alternative approach to reduce the number of staff needed to read water meters.' The analysis
revealed that the costs would be higher for an AMR system than hiring additional staff to compliment our
existing customer service staff. Therefore,this alternative is not recommended.
Implementation
Task Date
Begin
. -
Begin recruitment for the three positions 7/06
Fill positions 9/06
Operating Programs
Water Customer Service
Revenue Management
} � Attachment
Exhibit A.3
O . PROGRAMS
SIGNIFICANT OPERATING PROGRAM CHANGES
Cost Summary
line ItanDescription Account No. 2006-07
Stam --- _ 2131300'
Water Customer Service Staffing
Salaries-Regular 500-55170.7010 94,000
Retirement Contributions 500-55170-7040 25,200
Health&Disability Insurance 500-55170•-7042 13,700
Medicare 500-55170-7044 1;400
Unemployment IDSurdme 500-55170-7046 400
Workers Comp Insurance 500-55170-7048 14,100
Finance,&Tl Customer Services&a ffuw
Salaries-Regular 10025120-7010 43,600
Retirement Contributions 100-25120-7040 11,700
Health&Disability Insurance 100-25120-7042 6,800
N e&care 100-25120-7044 600
Lbemploy nrnt Insurance 100.25120-70.96 200
Workers Cornp Insurance 100-25120-7048 1,600
Contrsct Sev_ices--_-------- _-.__ __ __...__--- - ---_____ __--.- ----__-- ---------.-_-- __2iw
Contract Services 500-55170••7227 1,000
Laundry&Linen Service Contract 500.55170•-7259 1,000
Other _ - -Wfig
. iures• __ _ _._- __ _ ---W1>
Water Qaomer Services Supplies
Office Equipment Main� 500-55170-7275 2,400
Education&Tminiing 500-55170-7459 1,700
Operating Material&Supplies 500-55170-7843 5,800
Protective Clothing 500-55170-7861 700
Safety Supplies 500-55170-7875 100
Small Tools 500-55170-7885 600
Fmmwe&1T Customer Services Supplies
Canrputea Supplies 100-25300-7413 2,500
Pw1gF 10025120-7423 39,300
Printing&Repro Supplies 100.25120-7425 7,500
1 Operating Material&Supplies 100-25120-7843 200
Total Operating Costs 276,100
Funding Sources
Requested Funding.by Source Account No. 2006-07
Water Fund(50%) 500 138,100
Sewer Fund(50%) 520 138,000
Total 276,100
4 0
Attachment I
7 Exhibit A.4
CAPITAL IMPROVEMENTPLAN
PROJECT DESCRIPTIONS
FLEET REPLACEMENT COST INCREASE- WATER DISTRIBUTION
ate fie.$, i ._,i+"yeC'l ;S..t7,.777
CIP Project Summary
Replacing two service trucks and meeting the increased cost of materials and labor to effectively construct two
truck service bodies, will cost an additional$108,000 in 2006-07.
Background
Funds in the amount of$106,000 per unit to replace two 1991 GMC Topkick service trucks were approved in the
2005-07 CIP budget. Since approval of the 2005-07 Financial Plan, the cost of replacement has increased
significantly due to the increased costs of materials and labor. The current per unit cost, including sales tax and a
5% pre tax contingency is $160,000. That is a difference of $54,000 per unit. The total additional cost for
replacing the two.units is $108,000.. In addition to the increased funding, staff is requesting approval to sole
source the vehicle replacements with American Truck& Trailer Body Co., INC. (AT&TBC) of Tracy California.
The City Fleet Maintenance Supervisor supports the request to sole source the replacement vehicles. Due to the
unique design of. the trucks it is imperative that they be constructed by qualified technicians. AT&TBC
mechanics and welders are industry certified. The trucks being replaced were purchased by competitive bid and
had problems from the beginning. The service bodies were poorly constructed and ultimately cost nearly $30,000
in additional funds to correct deficiencies. Hundreds of hours of down time negatively impacted the water
distribution operations.
Project Objectives
1. Maintain fleet reliability.
2. Keep vehicle maintenance costs reasonable.
3. Improve employee safety and productivity.
4. Provide required equipment to properly and efficiently maintain the Water Distribution System.
Existing Situation
1991 GMC Topkicks: The two existing 1991 service trucks are the "workhorses" of the Water Distribution
Section and are used on a daily basis for waterline construction, repairs and emergency situations. The vehicles
will exceed both the mileage and age replacement criteria. In addition,the mileage does not accurately reflect the
engine usage since the engine must be running to power the air compressor that is used to run the jackhammers.
The trucks receive very heavy usage and the maintenance costs over the service life are high. Without
replacement,the maintenance costs will continue to increase and reliability will be compromised.
Goal and Policy Links
Fleet Management Policy (Section 405 of the Finance Management Manual)
Project Work Completed
1. Public Works has evaluated the mechanical condition and maintenance history of the units to be replaced.
2. Public Works has met with the Deputy Director of Utilities/Water and the Water Distribution Supervisor to
ensure that the replacement units have been correctly specified.
Attachment 1
Exhibit A.4
CAPITAL • PLAN
PROJECT DESCRIPTIONS
Environmental Review
No environmental review required.
Project Phasing and Funding Sources
Project Cost
Phase To-Date 2006-07 2007-08 2008-09 Total
Equipment Acquisition-Service Trucks(2) 212,000 108,000 320,000
Total 212,000 108,000 320,000
Project Funding Source: Water Fund
Department Coordinator and Project Review/Support
Department Coordinator: Gary Henderson
Project Review and Support: Ron Holstine
Alternatives
There are no reasonable alternatives to the recommended replacement of the service trucks.
Operating Program
Water Distribution
Project Effect on the Operating Budget
Requesting Department: Hours of staff time needed for project coordination: 16
Project Support: Fleet Maintenance staff time needed for project coordination: 8
Tim_
r
t' OL �
Freightliner M2 Crew Cab
Attachment I
Exhibit A.4
CAPITAL IMPROVEMENT PLAN
PROJECT DESCRIPTIONS
Department Coordinator and Project Review/Support
Department Coordinator: Gary Henderson
Project Review and Support: Ron Holstine,Fleet Supervisor
Alternatives
There are no reasonable alternatives to the recommended addition of the service trucks.
Operating Program
Water Distribution
Project Effect on the Operating Budget
Requesting Department: Hours of staff time needed for project coordination: 2
Project Support: Fleet Maintenance staff time needed for project coordination: 4
Description of Additional Units:
Model Year: 2007 2007
Make: Dodge* Dodge*
Model: Dakota Dakota
Description: V2-ton V2-ton
pickup pickup
w/extended w/extended
cab cab
Original AcuisitionPrice**: $16,326 $16,326
Estimated Replacement Price $20,000 $20,000
W/Accessories:
*or equal
**current CMAS list
s
� 1
Dodge Dakota Extended Cab
�� � 30�
f Attachment I
Exhibit AA
CAPITAL ° ° • PLAN
PROJECT DESCRIPTIONS
FLEET ADDITION-WATER CUSTOMER SERVICE
CIP Project Summary
Adding two light pick-up service trucks to provide monthly water meter reading will cost$40,000 in 2006-07.
Project Objectives
1. Provide enhanced customer service with monthly billing.
2.. Improve employee safety and productivity.
Eidsting Situation
The City of San Luis Obispo has historical billed customers for water and sewer service on a bimonthly basis..
With over 14,400 water meters,this has required that approximately 7,700 meters be read on a monthly basis.
On April 18, 2006, the City Council considered changes to the City's water and sewer rate structures as well as
providing monthly billing to our customers. The Council conceptually approved moving forward with monthly
billing. Monthly billing will require two additional customer service staff to provide for the reading of all meters
on a monthly basis. The staff will need a small service vehicle for the meter reading and other water service
repair work.
Goal and Policy Links
Fleet Management Policy(Section 405 of the Finance Management Manual)
Project Work Completed
1. Public Works has met with the Deputy Director of Utilities/Water and the Water Distribution Supervisor to
ensure that the replacement units have been correctly specified.
Environmental Review
No environmental review required.
Project Phasing and Funding Sources
Project Cost
Phase To-Date 2006-07 2007-08 2668-09 Total
Equipment Acquisition-Service Trucks(2) 40;000 40,000
Total 40,000 40,000
Project Funding Source: Water Fund -50%
Sewer Fund -50%
ATTACHMENT 2
RESOLUTION NO. (2006 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 2006-07 through 2012-13; and
WHEREAS,this comprehensive analysis has been revised based on updated revenue and
expenditure information; and
WHEREAS,a third tier water pricing structure is established for single family residential customers
using greater than 25 units per month; 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.9463 (2005 Series)is hereby rescinded,effective July 1,2006.
SECTION 2. The rates set forth in Exhibit"A"are hereby adopted,establishing rates effective
July 1,2006.
SECTION 3. The water system access charges are increased from$23.86 per month to$26.72
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 2006.
ATTEST: Mayor Dave Romero
Audrey Hooper, City Clerk
APPROVED AS TO FORM:
ona Lowell, City Attorney r
�.a . 3
EXHIBrr A to Resolution No. (Series 2006)
MONTHLY WATER SERVICE RATES
2006Rates Effective July 1,
Inside the City Rates 1 -5 CCF $3.28/CCF
5-25 CCF $4.11/CCF
25+ CCF $5.14/CCF
Outside the City Rates' 1 -5 CCF $6.56/CCF
5-25 CCF $8.22/CCF
25+ CCF $10.28/CCF
'For service to customers outside the City,the rates are two times the in City rate.
I� -4.
ATTACHMENT 3
RESOLUTION NO. (2006 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, 2006.
Upon motion of seconded by and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of 2006.
ATTEST: Mayor Dave Romero
Audrey Hooper,City Clerk
APPROVED AS TO FORM:
Jo an Lowell,City Attorney
EXHIBIT A to Resolution No. (Series 2006)
WATER METER AND ADAPTOR CHARGES
Meter Size
.58 x .75 inches (5/8 x 3/4 inch) $ 57.07
.75 inch (3/4 inch) $ 86.14
1.0 inch $102.74
1.5 inch $650.00
2.0 inch $995.00
3.0 inch and larger Time and materials
Adapter Costs
1.0 inch service/.58 inch x .75 inch meter $ 10.25 per pair
1.0 inch service/.75 inch meter $ 9.00 per pair
1.5 inch service/1.0 inch meter $.66.25 per pair,.
2.0 inch service/ 1.0 inch meter $ 72.00 per,pair
2.0 inch service/1.5 inch meter ,..$103.00 perpair