HomeMy WebLinkAbout06/19/2007, PH 1-A - ADOPTION OF WATER RATES FOR 2007-09 council M..gD� June 19,2007
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CITY O F SAN LUIS O B I S P O
FROM: John Moss, Utilities Directo
Prepared By: Kathe Bisho enior Administrative Analyst
SUBJECT: ADOPTION OF WATER RATES FOR 2007-09
CAO RECOMMENDATION
1. Adopt a resolution increasing water service charges by thirteen percent (13%), effective July
1, 2007 and thirteen percent (13%) effective July 1, 2008, provided there is not a majority
protest against such increases.
2. Adopt a resolution resetting water meter, valve, and adapter costs, effective July 1, 2007.
DISCUSSION
Background
On May 31, 2007, the Council considered the comprehensive financial review of the Water Fund
for 2007-09. At that time, Council approved the following three actions:
1. Review and accept the 2007 annual water fund financial review; and
2. Conceptually approve the proposed operating program changes and capital improvement plan
requests contained in'the preliminary 2007-09 Financial Plan, pending the June 19, 2007 final
budget review and adoption; and
3. Conceptually approve increasing water service charges by thirteen percent (13%), effective
July 1, 2007, and thirteen percent (13%) effective July 1, 2008, pending final budget review
and rate setting adoption on June 19, 2007.
Public Participation
Notification of a public hearing on the proposed water rate increases was mailed on April 30,
2007 to all water and sewer customers in accordance with the Proposition 218 notification
requirements. The notice includes proposed water rate increases of 13% in 2007-08 and 13% in
2008-09, which are the final recommended water rate changes for Council consideration. Under
Proposition 218, property owners or a tenant directly liable for payment of the fees subject to the
proposed rate changes may submit a written protest against each proposed rate increase (water,
sewer) and/or the proposed change to the sewer rate structure. A written protest must contain the
service address and the water and sewer service account number. The party signing the protest
must be listed on the account as the person responsible for payment of the water and sewer bills.
If written protests are filed by a majority of the affected customers, the applicable proposed rate
change would not be imposed. A majority is approximately 7,200 customers. At the June 19`h
h4v_./
Adoption of Water Rates for 2007-09 Page 2
City Council meeting, staff will provide an updated summary of the protests received to date. As
of June 7, 2007, a total of 82 written protests were received by the Office of the City Clerk. Of
the 82 written protests received_, 35 protests are compliant with Proposition 218 requirements, as
summarized below.
Proposition 218 Validated Protests as of June 7,2007
Proposed Fee-Change Numberof Valid Protests
Water Rate Increases 35
Sewer Rate Increases 26
Sewer Rate Structure Change 13
Water Meter,Valve and Adaptor Material Costs
The update to the charges for meters, valves and adaptors is to simply update the charges to
reflect the amount staff currently pays for these items. Customer valves are included in the City
specifications for Water Services, but a cost for this fixture has not previously been listed on the
Utility Service Fee Schedule. At this time, staff recommends establishing a fee for the customer
valves that reflects the amount staff currently pays for the valves. 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 x 3/4 inch) $ 57.07 .58 x.75 inches(5/8 x 3/4 inch) $ 54.00
.75 inch(3/4 inch) $ 86.14 .75 inch(3/4 inch) $ 89.00
1.0 inch $102.74 1.0 inch $115.00
1.5 inch $650.00 1.5 inch $650.00
2.0 inch $995.00 2.0 inch $995.00
.3.0 inch and larger Time&materials 3.0 inch and lar er Time&materials
Customer Valves Customer Valves Costs
None 1.0 inch $ 58.00
None 2.0 inch $147.00
Adapter Costs(Per Pair) Adapter Costs(Per Pair)
1.0 inch service/.58 x.75 inch meter $ 10.25 1.0 inch service/.58 x.75 inch meter $ 14.00
1.0 inch service/.75 inch meter $ 9.00 1.0 inch service/.75 inch meter $ 11_00
1.5 inch service/ 1.0 inch meter $ 66.25 1.5 inch service/ 1.0 inch meter $ 74.00
2.0 inch service/ 1.0 inch meter $ 72.00 2.0 inch service/ 1.0 inch meter $ 75.00
2.0 inch service 11.5 inch meter $103.00 2.0 inch service/ 1.5 inch meter $108.00
*The.58 x.75 meter cost is slightly lower in 2007 as compared to 2006 material costs.
Adoption of Water Rates for 2007-09 Page 3
Financial Impacts to Customers
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 Customer Monthly Bill
Assuming 10 units of water use per month
CCF 2006-07 2007-08 2008-09
1-5 $3.28/ccf 16.40 $3.71/ccf 18.55 $4.19/ccf 20.95
6-25 $4.11/ccf 20.55 $4.64/ccf 23.20 $5.24/ccf 26.20
26+ $5.14/ccf n/a $5.81/ccf n/a $6.57/ccf n/a
$36.95 $41.75 $41.15
FISCAL IMPACT
The recommended general purpose water rate increases of thirteen percent (13%) effective July
1, 2007 and thirteen percent (13%) effective July 1, 2008 will allow the City to fund the
operating and capital needs of the City's water system as presented to Council on May 31, 2007
during the annual water fund review.
ALTERNATIVE
Deny the recommended water rate increases. The recommended rate increases of 13% effective
July 1, 2007 and 13% effective July 1, 2008 have been identified through the comprehensive
fund analysis as necessary to meet the financial needs of the Water Fund in providing for the
water service need of the community. Staff believes that all of the services, operating programs
and capital components of the Water Fund represented by the recommended rates for service are
necessary, appropriate and consistent with prior policy/program direction of the City Council,
and are consistent and necessary for compliance with state and federal laws regulating our water
systems. Therefore, this alternative is not recommended.
ATTACHMENTS
1. Resolution Setting Water Service Rates
2. Resolution Setting Water Meter, Valve, and Adapter Costs
G:\UT1L\Kathe\Fiscal\FINANCIA-PLANS\2007-09 Financial Plan\2007 Fund Analysis\Water\Adoption of Water Rates for 2007-099CCAR.doc
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ATTACHMENT 1
RESOLUTION NO. (2007 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 2007-08 through 2012-13; 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.
WHEREAS, a public hearing was properly noticed and held on June 19, 2007;and
WHEREAS, a majority protest, as contemplated by Article XIII D of the California
Constitution, was not received by the conclusion of the public hearing.
NOW,THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:
SECTION 1. Resolution No. 9811 (2006 Series) is hereby rescinded, effective 11:59 p.m. June
30, 2007.
SECTION 2. The rates set forth in Exhibit "A" are hereby adopted, establishing rates effective
July 1, 2007 and July 1, 2008.
SECTION 3. The water system access charges are increased from $26.72 per month to $30.19
per month, effective July 1, 2007 and $34.11 effective July 1, 2008 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 2007.
Dave F. Romero,Mayor
R
ATTACHMENT 1
Resolution No. (2007 Series)
Page 2
ATTEST:
Audrey Hooper,City Clerk
APPROVED AS TO FORM:
P. Lowell,City Attorney
t
EXHIBIT A to Resolution No. (Series 2007)
MONTHLY WATER SERVICE RATES
Rates Effective July 1, 11
Customer Type Single Family All Other Customers
Residential Customers
Inside the City Rates 1 -5 CCF $3.71/CCF 1 -5 CCF $3.71/CCF
6-25 CCF $4.64/CCF 6+ CCF $4.64/CCF
26+ CCF $5.81/CCF
Outside the City Rates' 1 -5 CCF $7.42/CCF 1 -5 CCF $7.421CCF
6-25 CCF $9.28/CCF 6+ CCF $9.28/CCF
26+ CCF $11.62/CCF
'For service to customers outside the City,the rates are two times the in City rate.
2008Rates Effective July 1,
Customer Type Single Family All Other Customers
Residential Customers
Inside the City Rates 1 -5 CCF $4.19/CCF 1 -5 CCF $4.19/CCF
6-25 CCF $5.24/CCF 6+ CCF $5.24/CCF
26+ CCF $6.57/CCF
Outside the City Rates' 1 -5 CCF $8.38/CCF 1 -5 CCF $8.38/CCF
6-25 CCF $10.48/CCF 6+ CCF $10.48/CCF
26+ CCF $13.14/CCF
'For service to customers outside the City,the rates are two times the in City rate.
CCF:Per Hundred Cubic Feet
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ATTACHMENT 2
RESOLUTION NO. (2007 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
SETTING WATER METER, VALVE 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, 2007.
Upon motion of seconded by and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of 2007.
Dave F.Romero,Mayor
ATTEST:
Audrey Hooper, City Clerk
APPROVED AS TO FORM:
Jona an P. Lowell, City Attorney
R
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EXHIBIT A to Resolution No. (Series 2007)
WATER METER, VALVE AND ADAPTOR CHARGES
Meter Size Meter Cost
.58 x .75 inches (5/8 x 3/4 inch) $ 54.00
.75 inch (3/4 inch) $ 89.00
1.0 inch $115.00
1.5 inch $650.00
2.0 inch $995.00
3.0 inch and larger Time and materials
Customer Valve Size Customer Valve Costs
1.0 inch $ 58.00
2.0 inch $147.00
AdapterAdapter Size
1.0 inch service/.58 inch x.75 inch meter $ 14.00 per pair
1.0 inch service/.75 inch meter $ 11.00 per pair
1.5 inch service/1.0 inch meter $ 74.00 per pair
2.0 inch service/1.0 inch meter $ 75.00 per pair
2.0 inch service/1.5 inch meter $108.00 per pair
L$COUNCIL
RE, JIVED ICAO � �NDDIR
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JUN 19 2007 l? ATTORNEY 19 FIRE CHIEF
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' SLO CITY CLERK �UTIL DIR
♦/ San Luis Obispo Cham � R
June 18, 2007 eo&"`�
1039 Chorro Street • San Luis Obispo, California 93401-3278• Cqo RED FILE
(805) 781-2777 • FAX (805) 543-1255 . 00
David E. Garth, President/CEO MEETING AGENDA
Mayor Dave Romero and Members of the City Council DA 0 9 ITEM #PAI
990 Palm St.
San Luis Obispo, CA 93401
Re: Item PH 1.A., Adoption of Water Rates for 2007-09, Meeting of June 19
Dear Mayor Romero and Council Members,
Our Chamber supports the resolution increasing water service charges by thirteen percent
effective July 1, 2007 and thirteen percent effective July 1, 2008. To our way of thinking,
this is a wise business decision that will allow the city to fund the operating and capital
needs of the City's water supplies and system.
Water is a critical resource to the health and well-being of the community. It is prudent
for the City to charge reasonable rates and provide for its citizens adequate water
supplies. Recent protests to a rate increase don't seem to take into account the very real
threat of a serious drought and what that would do to our community. Most of us have not
forgotten the severe effects of the 1986-91 drought and the serious losses and restrictions
that resulted for our residents.
We, as responsible citizens, are willing to pay what appears to us to be a reasonable cost
for reliable water supplies without which our community cannot be sustained. In any
successful enterprise, one must be ready for the obligations of the day but also the needs
of tomorrow. City staff is responding to the needs of the community and has done their
due diligence in making sure that rates adequately reflect those needs. New customers
will continue to pay their own way and current customers will benefit.
We ask that you to stay focused on the Nacimiento option that after many years finally
gets us to the point of securing a real water supply source that will meet the City's long
term needs for water and reliability. The leadership that you have shown in the matter of
securing water for the city from the Nacimiento project demonstrates your commitment
to today and to the future. We ask that you stay the course on this local and
environmentally sound water source.
Sincerely.
6IJ u Ingham
Chairperson of the Board
email: slochamber@slochamber.org • websites: www.slochamber.org www.visitslo.com
RED FILE
MEETING AGEN
®ATFL TEM #2-LL RECEIVED
JUN 15 2001
Council Memorandui LO CITY CLERK
June 14, 2007 COUNCIL
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LTCAO !R FIN DIR
To: Mayor Romero and City Council CACAO (p FIRE CHIEF
WATTORNEY DPW DIR
[aCLERK/ORIG {i POLICE CHF
Via: John Moss, Utilities Director ❑ DEPT HEADS _1 AEC DIR
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From: David Hix, Wastewater Division Manager OR TRa ' 'r it HR DIR
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Subject: Water Reclamation Facility Master Plan Implementation r ��
During the May 31, budget hearings several questions regarding the scope and cost of the
Water Reclamation Facility (WRF) MasterPlan were raised. Provided below is a brief
breakdown of the phases and estimated cost being proposed for the Master Plan. While
still in a development phase, staff believes several of the areas are close to completion
while others options are still require investigation. The proposed final study phase of the
project will determine the final direction, provide a recommendation and contain
adequate information to allow development of facility design. Provided in this memo is
breakdown of the phases of the project and their preliminary costs.
Study
Additional funding has been requested in 2007-08 to complete the study phase of the
WRF Master Plan and will investigate possible significant processes changes at the WRF
needed to support the development of bidding documents for design of the project.
Because of past cost and design constraints, the WRF is a mixture of old and new
processes that may be adding to the overall cost of operating and maintaining the facility.
Recent improvements in wastewater treatment design and processes may allow the
removal of significant processes to stream-line the WRF's treatment operations. This last
phase of study will look closer at possible significant process changes and determine the
cost benefit of a revised treatment scheme. This comprehensive analysis is not only
critical to looking at how we may have to address the addition of nutrient removal, but
will look at the overall long-term operations at the WRF.
Estimated Cost: $249,500
Design of required facilities is currently estimated at $4 million and is anticipated to
follow the completion of the study phase services in 2008-09. A separate design contract
will be brought before Council along with the results of the study phase and
recommendations as appropriate.
Current project construction estimates, based on upgrading the current process scheme,
are as follows:
Council Memo—WRF iv.Laster Plan Implementation
June 14, 2007
Page 2
Phase I
Capacity. To meet the anticipated growth outlined in the General Plan, several processes
will require expansion to meet the increased flows while others will require replacement.
This will involve the expansion of the WRF's dual media filters, an additional DAFT for
solids thickening, additional cooling towers, and another belt filter press. The existing
digesters are also being studied for replacement because of capacity and efficiency
concerns. Provided below is the preliminary estimate for infrastructure improvements.
Estimated Cost: $993109000
Infrastructure. Several process areas of the WRF are very old or need upgrading
including critical portions that date back to the 1940's and 1950's. As discussed earlier,
much of this older infrastructure has remained in service because of cost and design
constraints, including the original 1924 digester which is still in service as a holding tank.
Many of these processes have become un-maintainable and staff must gingerly operate
the process to avoid breaking something. Other processes suffer from maintenance
problems or need updating to make them more efficient and operable. These processes
include the head works, primary clarification, secondary pumps, flow equalization,
adequate locker and shower facilities for staff, larger maintenance facility and possible
expansion of the laboratory. Provided below is the preliminary estimates for
infrastructure improvements. An estimate for the laboratory expansion was not available.
Estimated Cost: $1494259000
Phase II
Treatment. Recently the Regional Water Quality Control Board (RWQCB) adopted the
Total Maximum Daily Load for nitrates for San Luis Obispo Creek. The limit, 10mg/L
Total Nitrate, is the same limit for drinking water and reflects the Board's basin plan
objective for the Municipal and Domestic Supply (MUN) beneficial use. Currently the
City is pursing removing the MUN designation because no one down stream is utilizing
the surface water for a drinking water source.
If the City is required to meet this requirement, then additional aeration, chemical
addition, clarification, pumping and other equipment will be required. Provided below is
a very preliminary estimate of construction costs for nutrient removal processes.
Estimated Cost: $89865,000
Presently these costs are preliminary and while the study is significantly completed, staff
feels it is critical to investigate a more comprehensive final study phase to evaluate other
long term options. The finalized study will provide the City with a clear direction for the
WRF upgrade and the ability to advertise for design services. Given the difficult position
that City now faces with nutrient removal and other treatment upgrades and the work to
Council Memo—WRF master Plan Implementation �
June 14, 2007
Page 3
remove the MUN use from the creek, staff believe that this study and phasing approach
may allow the capacity and infrastructure portions of the construction to move forward if
the MUN de-designation process requires additional time. The final WRF Master Plan
should be complete with recommendations to Council in the Winter or Spring of 2008.
Please call David Hix at x039 or John Moss at x205 with any concerns or questions.
Page 1 of 1
Council,SloCity
From: Terry Mohan [catsdad@sbcglobal.net] RECEIVED Sent: Mon 6/18/2007 11:03 PM
To: Council,SloCity
`u JUN i A 2007
Subject: Water Rate Increase Protest
Attachments: SLO CITY CLERK
Dear Council Members,
This is to update you on my campaign to convince you allow a general public vote on the city's
participation in the Nacimiento Pipeline Project. As of Friday there were over 1500 protests mailed to the
city clerk. Considering I had 10,000 mailed to the general housing addresses this is almost ten times the
average response to an unsolicited return mail piece. However when you consider that half of the houses
in the city are rentals, most of the recipients were ineligible to vote and many of the utility customers live
outside of the city, the percentage of protests skyrockets. While I may not reach the 7200 or so that we
needed to stop you at the June 19 meeting it has raised awareness of the way you are attempting to
circumvent the voters rights under Proposition 218.
On the advice of my attorney's I have contacted the Howard Jarvis Taxpayers Association, the experts in
interpreting the intent of Proposition 218. They were concerned with several factors of the way this price
increase was set up. I am looking to them for guidance of how to proceed should you attempt to decide
this issue at the council level. An initiative or lawsuit could be politically damaging to those of you who
vote, over constituents objections, to pass this water rate increase so I ask you to consider the
consequences of your actions very carefully.
Terry Mohan
2416 Santa Clara
San Luis Obispo, CA 93401 OU v
COUNCIL EJ
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