HomeMy WebLinkAbout06/11/2009, PH5 - 2009 SEWER FUND REVIEW AND ADOPTION OF SEWER RATES FOR 2009-11 council M.°na� June 11,2009
j ac encu Report "° _5
CITY OF SAN LUIS OBISPO
FROM: Carrie Mattingly, Utilities Director
Prepared By: Kathe Bishop, Senior Administrative Analyst
SUBJECT: 2009 SEWER FUND REVIEW AND ADOPTION OF SEWER RATES FOR
2009-11
RECOMMENDATION
1. Review and accept the 2009 annual sewer fund financial review, and;
2. Adopt a resolution increasing sewer service charges by 9.3% effective July 1, 2009 and nine
percent (9%) effective July 1, 2010 provided there is not a majority protest against such
increases.
3. Conceptually approve the Sewer Fund budget for 2009-11, with final action on June 16, 2009
with adoption of the 2009-11 Financial Plan.
DISCUSSION
Report-In-Brief
This report presents the annual review of the financial position of the City's sewer fund and
makes recommendations for sewer rate increases. The 2009 sewer fund financial analysis
confirms the need for incremental rate increases as forecast in recent years during consideration
of the Tank Farm Gravity Sewer, Lift Station, and Force Main project and the Wastewater
Master Plan improvement projects.
In the 2008 Sewer Fund Review presented to the Council in May 2008, sewer rate increases
were forecast at 10% in 2009-10 and 9% in 2010-11. The 2009 sewer fund analysis confirms the
2008 forecast indicating a need to increase sewer rates 9.3% (below the forecasted 10%)
effective July 1, 2009 and 9% effective July 1, 2010. For the typical residential sewer customer
that has a sewer cap of 7 units this means an increase of 54.49 per month for 2009-10 and $4.68
per month in 2010-11.
Pursuant to the requirements of California Constitution Article XIII (commonly referred to as
Proposition 218) the public was notified of the public hearing and the recommended rate
increases.
Overview of Capital Projects
The Tank Farm sewer project, budgeted at $12.9 million, is under construction and 95%
complete. Expected project completion is late summer 2009. Work is currently in progress that,
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2009 Sewer Fund Review and Adoption of Sewer Rates for 2009-11 Page 2
once completed, will result in projects that have significant fiscal impact on the sewer fund
including:
1. An amendment to the Wastewater Master Plan for the Water Reclamation Facility;
2. Negotiations with Regional Water Quality Control Board staff regarding the designation
of San Luis Obispo Creek as a municipal drinking water source; and,
3. National Pollutant Discharge Elimination System permit requirements related to the
removal of nutrients in the effluent.
Financial Analysis and Long-Range Forecast
Using a long-range forecast to inform the rate setting process enables the City to incrementally
adjust rates to achieve its long-term goals of protecting public health through infrastructure
maintenance and maintaining the San Luis.Obispo creek's many beneficial uses such as habitat
for fish and wildlife.
The inputs associated with the 2009 sewer fund review take into consideration current economic
conditions, significant reductions in short and long-term development impact fee revenues
(Attachment 1, page 8, A-3), regulatory requirements, and long-range planning. Included are
significant operating cost reduction options that produce the lowest responsible budget and
associated sewer service charges while ensuring reliable sewer services to the community and
the discharge of clean water to San Luis Obispo Creek that meets all regulatory requirements.
Within this analysis, which forecasts the sewer fund's financial position through 2016-2017, the
City is positioning the fund to meet the long-term financing costs for the Wastewater Master
Plan improvement projects at the Water Reclamation Facility. The analysis incorporates funding
for long-term financing costs associated with the pending Master Plan improvement projects and
includes an ongoing level of capital maintenance projects to maintain the City's sewer
infrastructure assets and meet current and anticipated regulatory requirements.
The Capital Improvement Plan in the 2009 financial analysis includes major infrastructure
replacements and upgrades, including replacement of the Calle Joaquin Lift Station, Disinfection
Modifications, and Wastewater Master Plan improvements for capacity and treatment at the
Water Reclamation Facility.
Over the next two years, staff will be working to secure financing for these major improvements.
The sewer fund change in financial condition, adopted rates, and forecasted rates are
representative of the City's sewer revenue plan and the fiscal health of the sewer fund. All
impact the City's financing options.
With the recommended sewer rate increases for 2009-11 and the ongoing incremental rate
increases in the long-term financial forecast, the sewer fund will be in a strong position to
maintain its fiscal health and stability, capable of supporting the continuing operations and
capital programs.
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2009 Sewer Fund Review and Adoption of Sewer Rates.for 2009-11 Page 3
2009 Sewer Fund Analysis Report
The 2009 Sewer Fund Analysis report, including the details of the process, changes in financial
position and assumptions used to complete the analysis, and an update on major activities and
programs is attached. This year's analysis confirms the previously forecasted rate increases for
2009-11 sewer service charges and projects incremental annual rate increases through 2016-17.
As identified in recent years under the City of San Luis Obispo's multi-year rate strategy, the
adoption of the proposed 2009-11 sewer rates positions the Sewer Fund to have adequate
resources for the Tank Farm Gravity Sewer, Lift Station, and Force Main project, wastewater
collection system improvements, and major equipment maintenance at the Water Reclamation
Facility. The proposed rates support the design of the Calle Joaquin Lift Station replacement and
technology improvements to the wastewater collection system. The proposed rates are necessary
to adequately meet operational and maintenance demands, environmental and regulatory
requirements necessary for compliance with state and federal laws regulating the sewer system,
and ensure the sewer fund's fiscal health.
2009-11 Financial Plan- Operating Program Reductions
The operating program reductions included in this analysis are outlined in Attachment 1, page 3.
A detailed listing of all sewer fund operating program reduction options that were identified and
evaluated, including reduction options that were retained in the budget and those options that
were reduced or eliminated from the budget, is provided in Appendix A of the Preliminary
Financial Plan,pages 106 to 111.
2009-11 Financial Plan-Significant Operating Program Change Requests
The Significant Operating Program Change requests are summarized in Attachment 1, page 4
with detailed supporting documentation for each request provided in Appendix A of the
Preliminary Financial Plan, pages 40 to 53.
2009-I1 Financial Plan- Capital Improvement Plan Requests
The Capital Improvement Plan requests are summarized in Attachment 1, page 5 with detailed
supporting documentation for each request provided in Appendix B of the Preliminary Financial
Plan, pages 3-110 to 3-141.
Public Participation
On April 27, 2009, pursuant to the requirements of California Constitution Article XIII
(commonly referred to as Proposition 218), a Notice of Public Hearing (Attachment 2) was
mailed to all water and sewer customers informing them of the proposed rate increases for the
water and sewer funds 45 days in advance of the public hearing. The Utilities Department
newsletter Resource, SLO City News, and the City website were also utilized to notify the
public of the proposed rate increases and the associated public hearing.
The Notice of Public Hearing included proposed sewer rate increases of 9.3% in 2009-10 and
9% in 2010-11, which are the final recommended sewer rates for Council consideration. As
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2009 Sewer Fund Review and Adoption of Sewer Rates for 2009-11 Page 4
outlined in the Proposition 218 notice, the recommended rate increases will be discussed as a
public hearing item before the City Council on June 11, 2009, when the public will have an
opportunity to comment on the recommendations. Staff looks forward to Council and community
input on these issues.
Paying for Sewer Services
The sewer rate contains two components — a minimum base charge and a service charge based
on the volume of water used. For residential customers, a "sewer cap" is established based on the
individual customer's three-month average of winter water use, when little or no irrigation
should occur,to establish the individual customer's year-round demand on the sewer system.
The following table shows a summary of the current and proposed sewer rates for accounts
inside the City limits. Exhibit A of Attachment.3 provides the detailed list of the proposed rate
increases for 2009-10 and 2010-11. For the few accounts outside of the City limits, rates are
twice the amounts shown.
CURRENT AND PROPOSED SEWER RATES
Proposed Proposed
USE CURRENT JULY 19 2009 JULY 19 2010
Single-Family Residential(includingsin le-metered condominiums.and townhomes
Base fee per dwelling unit $ 5.50 $ 6.00 $6.55
minimum charge)
Volume service charge per unit $ 6.06 $ 6.63 $ 7.22
NOTE: Totatmonthly charge is capped,based on average winter water use*
Master-Metered Multifamily Dwellings(mi any duplex,apartment house,or rooming house,mobile home or trailer park)
Base fee per account $ 5.50 $ 6.00 $6.55
minimum charge)
Volume service charge per unit $6.06 $6.63 $ 7.22
NOTE: For accounts without a separate irrigation meter, the total monthly charge is capped, based on
avera a winter water use.* Accounts with a separate irrigation meter have no cap.
Public,Private,or Parochial School
Per average daily attendance(ADA) $4.91 $ 5.37 $ 5.85
at the school
All Other Accounts
Minimum charge per account $ 5.50 $ 6.00 $6.55
Volume service charge per unit $ 6.06 $ 6.63 $ 7.22
*For single family residential and for those master-metered multifamily dwellings and mobile homes or trailer
parks without a separate irrigation meter, the sewer service charge is based on the volume of water used during a
three-month period during the winter months (December, January, and February, depending on when the meter is
read). This is known as the average winter water use. The average volume of water used during this period is used
to calculate the sewer cap or the next year. A unitequals 748 gallons.
2009 Sewer Fund Review and Adoption of Sewer Rates for 2009-11 Page 5
The impact of the proposed increase on the monthly sewer portion of the bill of a typical
residential customer who has an average winter water use sewer cap of seven units monthly is
shown below. Total (base and service) proposed sewer rate increases for the typical residential
customer are $4.49 monthly starting July 1, 2009 and $4.68 monthly starting July 1, 2010.
SAMPLE RESIDENTIAL SEWER BILL—Assumes sewer cap of 7 units*monthly
Proposed Proposed
USE CURRENT JULY 19 2009 JULY 19 2010
Sewer Base Fee $ 5.50 $6.00 $ 6.55
Sewer Service Use Fee $42.42 $46.41 $ 50.54
*A unit of water equals 748 gallons
Sewer Rate Protests
Under Proposition 218, customers directly responsible for the payment of the fee subject to the
proposed rate increase may submit a written protest against each proposed rate increase (water
and/or sewer). The protest must be in writing, received by the City Clerk at or before the public
hearing on June 11, 2009, identify what is being protested, and contain the service address and
the water and/or 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/or sewer bills..
If written protests are filed by a majority of the affected customers, the applicable proposed rate
may not be imposed. A majority is approximately 7,463 customers. As of May 22, 2009, a total
of 22 written protests were received by the Office of the City Clerk. Of the 22 written protests
received; 17 protests are valid, as summarized below. The City Clerk will provide an updated
summary of the protests received at the June 11, 2009 City Council meeting.
Proposition 218 Validated Protests as of May 22, 2009
Proposed Fee Chane Number of Valid Protests
Sewer Rate Increases l 7
FISCAL IMPACT
The recommended general purpose sewer rate increases of 9.3% effective July 1, 2009 and nine
percent (9%) effective July 1, 2010 will allow the City to fund the operating and capital needs of
the City's sewer system as presented to Council on June 11, 2009 during a public hearing on the
annual sewer fund review.
ALTERNATIVES
Deny the recommended rate increases. The Council could choose to enact rates less than those
recommended or it could choose to enact no rate increases.
2009 Sewer Fund Review and Adoption of Sewer Rates for 2009-11 Page 6
Through the fund analysis, numerous rate scenarios were analyzed in a rate model that was
affected by multiple factors (i.e. capital improvements, debt service, long-term fiscal health, 20%
reserve policy) to ensure the lowest responsible rates were recommended to Council for
adoption.
In modeling the rates, many alternatives were reviewed seeking to minimize impacts to the
customers in particularly difficult economic times.
As an example, a 4.65% alternative in FY 2009-10 (as opposed to the recommended 9.3%)
would result in about a $2.25 reduction to the average monthly sewer bill.
This alternative would have one or more of the following impacts:
• Reduced revenues in FY 2009-10 by $500,000 and $1.1 million in FY 2010-11 when
compounded.
• Reduced ability to secure the most favorable, low interest financing for the upcoming
capital improvements at the Water Reclamation Facility. Among other things, financing
institutions tie interest rates to an entity's long-term rate setting strategies and actual rate
setting history when determining its credit-worthiness.
• Essential capital projects deferred. In order to lessen the rate impacts during this
economic downturn, capital projects have already been reprogrammed out as far as
possible considering infrastructure needs and regulatory compliance.
• Further staffing reductions. Three regular positions are currently recommended for
elimination in the Utilities Department; 2 full-time equivalents impact the Wastewater
Division. Further reductions would have additional severe impacts to staff and service
deliveries.
• If the fund were to "handle" this lower rate in this two year financial plan, an
approximate 12% rate increase would be required(as opposed to 7% in the current rate
projections) in year three (FY 2011-12) in order to meet 20% policy reserve
requirements. While this increase is manageable,it conflicts with the City's current
philosophy of long-term planning and a multi-year rate strategy that smoothes rate
increases.
The recommended rate increases of 9.3% effective July 1, 2009 and 9% effective July 1, 2010
have been identified through the comprehensive fund analysis as being necessary to meet the
financial needs of the Sewer Fund.in providing for the sewer service needs of the community.
Significant reductions have been proposed in the 2009-11 Financial Plan. Staff believes that all
remaining services, operating programs, and capital components of the Sewer Fund represented
by the recommended rates for service are necessary, appropriate, and consistent with prior and
current policy/program direction of the City Council, and are consistent and necessary for
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2009 Sewer Fund Review and Adoption of Sewer Rates for 2009-11 Page 7
compliance with state and federal laws regulating the City's sewer system. Therefore, these
alternatives are not recommended.
ATTACHMENTS
1. 2009 Sewer Fund Analysis
Exhibit A — Updated Financial Schedules
A.1. Changes in Financial Position
A.2. Assumptions for Fund Projections
A.3. Capital Improvement Plan
2. Paying for Water and Sewer Services Proposition 218 Notice of Public Hearing
3. Resolution Establishing Sewer Service Rates for 2009-11
G:\Admin\Kathe\Fiscal\FINANCIAL PLANS\2009-11 Financial Plan\2009-10 Fund Analysis\l. Sewer\3. Staff Reports —
Sewer\l.2009 Sewer Fund CAR and 2.2009 Sewer Fund Report—Attachment I
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`-� ATTACHMENT 1
2009 Sewer Fund.Analysis
June 11, 2009
Prepared by the
Utilities Department
city of san WIS OBISPO
eR54
Attachment 1
Page 2
city of san Luis osispo
2009 Sewer Fund
TABLE OF CONTENTS
I. OVERVIEW
II. 2009-11 FINANCIAL PLAN
A. Operating Program Reductions
B. Summary of Operating Programs
C. Significant Operating Program Changes
D. Capital Improvement Plan
IH. RATE SETTING
A. Methodology
B. Sewer Rate Structure
C. Sewer Rate History
IV. ASSUMPTIONS
A. Revenues
B. Expenses
C. Debt Service Payments
V. MAJOR ACTIVITIES AND PROGRAMS
A. 2008-09 Update
B. 2009-11 and Forecast
EXHIBIT A—FINANCIAL SCHEDULES
A.1 Changes in Financial Position
A.2 Assumptions for Fund Projections
A.3 Capital Improvement Plan
Attachment 1
Page 3
city of
i.� san lues OBlapo
2009 Sewer Fund Analysis
I. OVERVIEW
This report presents the financial,condition of the Sewer Fund, based on the 2009-11 Financial
Plan operating and capital programs, taking into consideration current economic conditions,
while addressing the identified needs in the Wastewater Master Plan, regulatory requirements,
and adopted City financial and infrastructure maintenance policies.
II. 2009-11 FINANCIAL PLAN
The 2009-11 Financial Plan development process included identifying operating cost reduction
options to further tighten the on-going operating program budgets for wastewater service, in an
effort to recommend the lowest responsible budget and associated sewer charges,while ensuring
safe and reliable wastewater services to the cominunity. A total of 25 reduction options were
identified in the wastewater programs which resulted in short and long-term impacts to our sewer
customers and the community. The recommended operating program reductions for wastewater
services are outlined in Table A representing an annualized savings of $195,900 in 2009-11,
including 1.80 full-time equivalent positions representing the sewer fund's proportionate share of
three regular benefited positions that are recommended for elimination. Of the total 2009-11
annualized savings in the Sewer Fund; 78% ($153,000 annualized) is staffing related savings and
22%($42,900 annualized)reflects non-staffing operating savings.
A. Operating Program Reductions Regular Savings Savings
FTE lrl ' 2009-10 2010-11
1. Eliminate Utilities Engineer position-40%share m 0.40 57,700 57,600
2. Eliminate Laboratory Analyst position-90%share(3) 0.90 57,500 .53,900
3. Eliminate Water Customer Service position-50%share r"r 0.50 39,700 39,600
4. Reduce Contract Services for Sewer Map Printing 500 500
5. Reduce Contract Services for Telemetry Repairs 500 500
6. Reduce Radio Maintenance Services 1,500 1,500
7. Reduce Chemicals in Wastewater Collection 6,600 6,800
8. Reduce Contract Services for Manhole Rehabilitation 18,000 18,000
9. Reduce Contract Services for Flow Monitor Calibration 2,000 2,000
10. Reduce Contract Stormwater Sampling in Collections 1,300 1,300
11. Reduce Contract Janitorial Services at the WRF 6,000 6,000
12. Reduce Operating Materials for Lab Steel Toe Boots 1,000 1,000
13. Reduce Operating Materials for Lab Microbial Glassware 5,000 5,000
14. Reduce Operating Materials for Lab Filter Pads 400 400
1.80 197,700 194,100
" FrE represents full-time equivalent
u>Engineer position savings is shared 50%water,40%sewer,10%whale rock
'r lab Analyst position savings is shared 90%sewer and 10%water
(,)Water Customer Service position savings is shared 50%sewer and 50%water
Operating program reductions are provided in the Preliminary Financial Plan,pages 106 to 111.
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Attachment 1
Page 4
Wastewater service operating programs are summarized in Table.B. The summary of operating
programs includes the operating budget reductions from Table A and reflects the net operating
program base budget amounts for 2009-1.1.
B. Summary of Operating Programs
Includes Operating Program Reductions as outlined in Table A. 2009-10 2010-11
BUDGET BUDGET
Wastewater Collection trl 1,004,100 1,036,900
Pretreatment 240,600 248,500
Water Reclamation Facility 2,854,100 2,899,300
Water Quality Laboratory 456,800 470,100
Wastewater Administration/Engineering 476,400 545,500
Wastewater Franchise Fees 453,700 502,600
TOTAL WASTEWATER SERVICES OPERATING PROGRAMS 5,485,700 5,702,900
Wastewater Collections funds 50%of the Water Customer Service program
Significant operating program change requests are necessary to continue to meet the operating
requirements to provide safe and reliable wastewater services for the community, including:
operational and maintenance service levels, improving customer services, and maintaining
compliance with state and federal laws regulating the City's sewer system. The most significant
operating program change requests are due to on-going increased costs associated with electric
and gas utility services, and chemicals. The requested increase for Wastewater Collections is for
a one-time study, over a period of two-years, to conduct flow monitoring and hydraulic modeling
of the wastewater collection system to identify and quantify areas of excessive infiltration /
inflow to determine costs effective methods for infiltration/inflow reduction.
C. Significant Operating Program Changes
2009-10 2010-11
BUDGET BUDGET
Wastewater Collection
Infiltration/Inflow Reduction Study 75,000 75,000
Water Reclamation Facility
Electric and Gas Utilities,and Chemicals 300,200 324,300
Biosolids Composting Contract 30,000 32,000
Maintenance Projects 40,000 35,000
Water Quality Laboratory
Contract Services and Laboratory.Supplies 4,100 7,700
TOTAL WASTEWATER SERVICES SOPC REQUESTS 449,300 474,000
Detailed documents for each of the request is provided in Appendix A of the Preliminary
Financial Plan,pages 40 to 53.
��5 -II
Attachment l
Page 5
Capital Improvement Plan requests are based upon projections to the end of the 2008-09 fiscal
year and the Preliminary 2009-11 Financial Plan, including capital projections through 2012-13.
Maintaining the wastewater system infrastructure, including major equipment upgrades, on-
going treatment processes, technology, and long-term infrastructure upgrade and replacement
planning is critical to providing safe and reliable sewer services for the community. During the
current and forecasted downturn in the construction industry and given the competitive
construction bidding climate, investing resources in the wastewater system capital improvement
plan makes fiscal sense. The improvements are vital to infrastructure health and supporting
capital investment at this tirne will result in value added to the City, its sewer customers, the
community and for local businesses in construction related services. Table D outlines the Capital
Improvement Plan for wastewater services.
D. Capital Improvement Plan
2009-10 2010-11 2011-12 2012-13
BUDGET BUDGET PROPOSED PROPOSED
Wastewater Collection
Collection System Improvements 1,728,000 1,393,000 1,559,000 1,747,000
Calle Joaquin Lift Station 235,000 1,900,000
Voluntary Lateral Rehabilitation Program 52,000 52,000 52,000 52,000
Emergency Generator Replacement-50%share 33,800
Fleet Replacement: 1/2 Ton Pickup 22,800
Water Reclamation Facility
Master Plan Implementation
Design 5,000,000
Disinfection Modifications
Design 600,000
Major Maintenance 160,400 650,000 595,000
Administration and Engineering
Exterior Painting of 879 Morro Building-50%share 9,000
Total Wastewater Services CIP Requests. 1,813,800 1,840,400 7,892,800 4,294,000
Shared City Information Technology
Technology Infrastructure 6,300 20,000
IT Disaster Prevention and Recovery Plan 1,800
Office Application Software Replacement 11,500
SharePoint Enterprise Content Management 3,000
FoxPro Application Conversion 17,000 17,000
IT Strategic Plan 14,300
Total Share of Technology CIP Requests 0 6,300 53,300 31,300
TOTAL SEWER FUND CIP REQUESTS 1,813,800 1,846,700 7,946,100 4,325,300
Detailed supporting documents for each request is provided in Appendix B of the Preliminary Financial Plan,
pages 3-110 to 3441.
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Attachment I
Page 6
III. RATE SETTING
A. Methodology
In determining sewer revenue requirements and setting recommended rates, the following
general methodology is used:
Step 1: Determine Sewer 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. Development impact 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 sewer rate requirements:
a. Revenue needed to be generated from sewer rates is the difference between
sewer revenue requirements (Step 1) and"non-rate" revenues (Step 2).
Step 4: Determine new rates:
a. Model the rate base(consumption or usage, winter water use establishing
"sewer caps"and customer account assumptions)against the existing rate
structure and rate requirements identified in Step 3.
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. Sewer Rate Structure and Proposed Sewer Rates
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 customers
■ Be easy to understand and administer
■ Facilitate ongoing review to maintain rate stability
Attachment 1
Page 7
The sewer rate structure includes a minimum base charge plus a volume fee based on the volume
of water used. The table below summarizes the sewer rate structure with the current sewer rates.
2008-09 Sewer Rate Charges
TYPE OF ACCOUNT Monthl Rates
Base Fee Volume Fee
Residential—minimum base charge+volume charge
Single family dwelling, including single meter condominiums and
townhouses, per dwelling unit. Total monthly fee capped based on $5.50 $6.06/per unit
Average Winter Water Use(AWWU)
Multi-family dwelling in any duplex,apartment house or rooming house,
per account. Accounts without separate irrigation meter: Total monthly fee $5.50 $6.06/per unit
capped based on Average Winter Water Use(AWWU). Account with
separate irrigation meter. No cap
Mobile home or trailer park,per account. Accounts without separate
irrigation meter. Total monthly fee capped based on Average Winter Water $5.50 $6.06/per unit
Use(AWWU). Account with separate irrigation meter: No cap
Non-Residential—minimum base charge+volume charge
All non-residential accounts, per account $5.50 $6.06/per unit
Schools
Public or private school,based on per average daily attendance(ADA)at N/A $4.91/ADA
the school
Each Vehicle Discharging into the City Sewer System $8.61
Minimum base fee includes 1,500 gallons discharge. Volume fee per 100 $143.06 per 100
gallons in excess of initial 1,500 gallons discharged gallons
AWWU as established for December,January and February. 1 Unit=748 Gallons
The number of active water and sewer customers (accounts) changes daily with service turn-on
and turn-offs due to move-in and move-outs. A large volume of account changes directly
correlate with the academic schedules at the University and Cuesta College. Of the current,
14,700 active accounts approximately 85% (12,400) are residential customer accounts. The table
below displays the current and proposed sewer rates for the average residential customer,
assuming an average winter water use (AWWU) "sewer cap" of seven (7) units monthly, the
following illustrates the changes to the monthly bill with the proposed rate increases.
Average Residential Sewer Customer Monthly Bill Sample
Assuming An Average Winter Water Use"Sewer Cap"of Seven(7)Units
Fiscal Year: 2008-09 2009-10' 2010-11'
Fiscal Year: Charges Rates Charges Rates Charges
Base Charge: $5.50 $6.00 $6.00 $6.55 $6.55
Volume Charge Z: 42.42 $6.63/unit Z 46.41 $7.22/unit Z 50.54
Total $47.92 $52.41 $57.09
Sewer rate increases for the average residential customer are$4.49 monthly in 2009-10 and$4.68 monthly in 2010-11
Z Volume charge is per unit. I Unit=748 Gallons
PR � 'i`f
Attachment
Page 8
C. Sewer Rate History
The City Council approved the current volume based sewer rate structure effective July 1, 2007
delivering a sewer rate structure with a base fee and volume charge to reflect the individual
customer's usage and associated sewer charges. The volume based sewer rate structure
encourages water conservation and achieves fairness and equity among customer classes —
customers with low use pay less and customers with higher usage pay more. Prior to 2007, the
single family residential sewer rate structure was a fixed charge which did not reflect the
individual customer's water use and associated demand placed on the wastewater system. The
table below displays the average residential customer's monthly sewer charges with the proposed
sewer rate increases for 2009-10 and 2010-11, as well as a five year history of monthly
residential sewer charges.
Veal- Custolner Residelifial Customer
2010-11 57.09
2009-10 52.41
2008-09 47.92
2007-08 45.40
2006-07 35.56
2005-06 32.33
2004-05 28.36
How has moving from a fired sewer rate structure to the current volume based sewer rate
structure impacted the average residential customer? Using the 2006-07 residential fixed sewer
rate of$35.56 and applying approved sewer rate changes to-date and the proposed sewer rate
increases for 2009-11, the outcome would be $57.37 in 2010-11. With the current volume based
sewer rate structure and adoption of the proposed sewer rate increases, the average residential
customer's monthly sewer charges will be J57.09 in 2010-11. With the rate structure change, the
fiscal impact to the average residential customer remains about the same.
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 sewer 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 effluent flow trends and the 2007 Agreement between
the City and the University. This agreement, covering the period beginning July 1,
2007 and extending through June 30, 2012, set the proportion (82%) of the non-
residential rate the University pays to account for the University's difference from
other customers (prepaid capital share in the collection system and the Water
Reclamation Facility). h k,5 1 r
Attachment 1
Page 9
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 current impact fee establishment. Development in those areas pay only those
fees in place at the time of approval plus an annual adjustment based on the
consumer price index.
As a result of the current significant and anticipated continued downturn in
development, development impact fee revenue projections have been significantly
reduced relative to past budgets. Revenues are not project to reach 2007-08 levels
again until 2014-15.
Wastewater Development Impact fees are currently being reviewed and updated to
reflect updated costs for the Tank Farm Gravity Sewer, Lift Station, and Force Main
project, Calle Joaquin Lift Station replacement, and Disinfection Modifications and
Master Plan implementation projects at the Water Reclamation Facility.
Adjustments to the development impact fees are not projected in this fund analysis
given the current downturn in development activity. However, based on the impact
fee study work completed to-date, and the proposed 2009-11 Capital Improvement
Plan and forecast, staff anticipates future increases to the Wastewater Development
Impact fee and the area specific add-on fees for areas served by recent and
forecasted wastewater facility upgrades. Wastewater Development Impact fees were
updated in the 2004 impact fee study to include the projected costs for the Tank
Farm Gravity Sewer, Lift Station and Force Main project. Development Impact
fees are adjusted annually based on the consumer price index .
S. Expenses
The operating and maintenance costs for 2009-10 and 2010-11 are based on historical
trends and projected changes in costs. Operating and maintenance costs forecasted for
2011-12 through 2016-17 are adjusted assuming an inflation rate of 3% annually. Recent
trends in the consumer price index reflect relatively flat inflationary rates. However, the
most significant non-staffing operating costs for wastewater services are for electric
utility services and chemicals for wastewater collection and treatment processing.
Projected electric utility rate increases range from 9% to 11% depending on the type of
metered account. Chemical cost increases from 2008 to 2009 range from a 22% increase
for sodium hypochlorite (chlorine) from $0.79 to $0.96 per gallon to a 67% increase for
sodium hydroxide from $0.88 to $1.47 per gallon.
Capital expenses are based upon projections to the end of the 2008-09 fiscal year and the
Preliminary 2009-11 Financial Plan, including capital projections through 2012-13.
Thereafter, capital expenses are forecast based on infrastructure maintenance and repair
history, and regulatory requirements.
i \
} 1
Attachment]
Page 10
C. Debt Service Payments
1. Annual debt service payments of$2,135,600 are to repay the State Revolving Loan
Funds received by the City for the collection system improvement ("Relief Sewer
Main") and for construction of the Unit 3 and 4 improvements to the Water
Reclamation Facility. The collection system improvement final debt service
payment ($249,800) will be met in September 2011 and the final debt service
payment ($1,885,800) for construction of Unit 3 and 4 improvements to the Water
Reclamation Facility is scheduled for August 2012; when the State Revolving Loan
debt obligation will be met.
2. Debt service to pay for the Sewer Fund's portion of the energy conservation
projects are $281,300 in 2009-10 and $281,700 in 2010-11. The final debt service
payment will be in 2012-13.
3. Debt service for repayment of the California Infrastructure and Economic
Development Bank revolving fund loan for the Tank Farm Gravity Sewer, Lift
Station, and Force Main projects is $564,300 in 2009-10 and$563,500 in 2010-11.
4. Debt service for repayment of the SunTrust private placement loan for the Tank
Farm Gravity Sewer, Lift Station, and Force Main project is $186,100 in 2009-10
and $186,900 in 2010-11.
5. Debt service interest only payments for the design of the Water Reclamation
Facility Master Plan Implementation project are currently projected at $212,500
annually beginning.in 2011-12 for a period of two years.
6. Debt service is currently projected at $3,418,300 annually beginning in 2013-14 to
pay for the currently estimated $45.4 million in Master Plan Improvements to
upgrade the capacity and treatment of the Water Reclamation Facility.
7. Debt service is currently projected at $263,300 annually beginning in 2013-14 to
pay for the currently estimated $3.5 million for Disinfection Modifications that may
be required to meet pending regulatory requirements for the removal of
Trihalomethanes from the Water Reclamation Facility's effluent.
V. MAJOR ACTIVITIES AND PROGRAMS
A. 2008-09 Update
1. Tank Farm Gravity Sewer, Lift Station, and Force Main
The Tank Farm Gravity Sewer, Lift Station and Force Main project began
construction in summer 2008. Construction is on schedule with a projected
completion of late summer 2009. The project budget is $12.9 million; funding
sources include $11.9 million in low interest loans and $1 million in pay-as-you-go
funding from the Sewer Fund.
i
` Attachment 1
Page 11
2. Disinfection Modifications at the Water Reclamation Facility (WRF)
The pilot study utilizing chlorine dioxide as an alternative disinfectant that does not
create Trihalomethanes (THMs) has been completed with good results. This
summer the City's consultant will begin developing a final report that will provide
the basis for design.
3. Regulatory Requirements
The City continues to work with the Regional Water Quality Control Board
(RWQCB) to address the MUN beneficial use designation for San Luis Obispo
Creek. The City's Use Attainability Analysis (UAA) has been completed by the
City and submitted to the RWQCB and currently RWQCB staff is analyzing the
document. The MUN designation is the driver for stringent discharge limitations in
the WRF's permit that meet or exceed drinking water requirements. These limits
include nitrates and Trihalomethanes (THMs) and will likely include a host of
additional constituents in the future. Currently the WRF's National Pollutant
Discharge Elimination System (NPDES) permit has been administratively extended
until the outcome of the UAA. Staff will return to Council with alternatives if
regulatory efforts cannot be resolved in a satisfactory manner.
4. Wastewater Collection System Master Plan Update
To provide a road map of sewer infrastructure for the western portion of the airport
area, staff is working on an update to the Wastewater Master Plan. Since
completion of the 2000 Wastewater Master Plan, boundaries have changed
significantly, changing the infrastructure needs in a portion of the Airport Area.
Once complete, this study will provide the City and property owners with a defined
plan of required infrastructure.
B. 2009-10 and Forecast
1. Calle Joaquin Lift Station and Update of the Wastewater Master Plan
Replacement of the Calle Joaquin Lift Station to address maintenance and
operations issues and meet future flows is identified in the Wastewater Master Plan.
This request identifies $235,000 in 2010-11 for design, environmental work, and
easement acquisition and $1.9 million for construction in 2012-13. Funding sources
assume pay-as-you-go financing for design and construction.
2. Water Reclamation Facility Master Plan Implementation
Studies have almost been completed for the Water Reclamation Facility Master
Plan. The City's consultant and staff are working closely to identify the most cost
effective and flexible design to meet discharge limitations and reduce maintenance
and operations costs. Ultimate design and cost are dependant upon the success of
the City's regulatory negotiations relative to San Luis Obispo Creek's MUN de-
designation and the WRF's NPDES permit. Current cost estimates include $5
million in 2011-12 for design and $40.4 million for construction and construction
management in 2013-14. Funding for design and construction related services will
be debt financed.
pkv -18"
Attachment l
Page 12
3. Disinfection Modifications ations at the Water Reclamation Facility(WRF)
Design is currently projected at $600,000 in 2011-12, with construction costs
projected at $3.5 million in 2013-14. Funding sources assume pay-as-you-go
financing for design, with construction to be debt financed.
4. Infrastructure Maintenance
Industry standard would set annual infrastructure replacements at two percent of
system value(based on a fifty year replacement cycle) for the wastewater collection
system. This equates to expenditures of$1,728,000 in 2009-10 and $1,393,000 in
2010-11. Repair and upgrade at major facilities such as the Water Reclamation
Facility and lift stations is based on maintenance and repair history as well as
depreciated value and overall efficiency.
5. Lateral Program
The Voluntary Lateral Rehabilitation Program continues with over 98 applications
in 2007-08 and approximately 63 applications estimated for 2008-09. Recent
participation has slowed and the Voluntary Lateral Rehabilitation Program has a
"carry-over"budget of$157,700 available. Based on this availability of funding and
the current level of program participation, funding in the amount of $52,000
annually is requested in 2009-11.
pHs _tq
I
Attachment 1
Page 13
EXHIBIT A
2009 SEWER FUND
FINANCIAL SCHEDULES
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l ATTACHMENT 2
Y_ a tyof
@•
San tais oBIs o
p
NOTICE OF PUBLIC HEARING
Paying For Water and Sewer Services
Thursday, June 11, 2009
7: 00 p.m.
1 How Are Water And Sewer Rates Calculated?
Annually the City prepares detailed analyses of the revenues and expenditures for the Water and Sewer funds to ensure
sufficient revenues are collected to effectively provide for the short and long-term water and sewer service needs of the
community. Revenues received from water and sewer charges are restricted solely for these purposes.
M U LT I-Y E A R R AT E S E T T I N G S T R AT E G Y -The in-depth analyses that are conducted include a minimum five-
year look ahead at operating and capital program costs in order to adequately prepare the funds for upcoming expenses and
avoid significant unexpected increases in rates.To achieve planned service goals, incremental rate increases over a number of
years are the preferred method for ensuring rate stability.Tables 1 and 2 of this notice show the proposed rates. The proposed
rates are consistent with or slightly below those forecasted in the prior year.
RATES BAS ED 0 N CUSTOM E R U SAG E CH O ICES — Under the City's water and sewer rate structures,
bills are based on customer usage choices and resulting demand on the sewer and water systems.The City has a commodity-
based water rate the service charge is wholly based on the volume of water used.The sewer rate contains two components
— a minimum base charge and a service charge based on the volume of water used. For residential customers, a"sewer cap" is
established based on the individual customer's three-month average of winter water use, when little or no irrigation should occur,
to establish the individual customer's demand on the sewer system.
0 What Action Has Been Taken To Control Costs?
Keeping costs down is one of our main concerns,especially during these difficult economic times.While open positions are
not being filled, interns and volunteers are helping get the work done.All employees were asked to provide ideas on ways to
reduce expenses, many of which have been implemented.All water and sewer work programs worked on zero-based budgets:
The existing budget was not increased by some percentage, but was essentially rebuilt from scratch. Cuts were made in every
program.
On the other hand, costs for the electrical power needed to run treatment plants and pumps, as well as costs for disinfectant
and process chemicals, have significantly increased.The water treatment plant and water reclamation facility have focused on
further energy efficiencies, as electrical costs are some of the major operating expenses. We are exploring ways to reduce
chemical use and still meet regulatory requirements. Broken pipes and failed equipment create extraordinary expenses in
emergency contract work and staff overtime.The bidding climate for capital projects is good right now, and necessary capital
projects are continuing in order to reduce emergency situations.
qNS���
ATTACHMENT 2
i
Why Are The Water And Sewer Rates Being Increased?
W AT E R. There are a number of factors driving the need to increase water rates, one of which is the need to
develop new and more reliable sources of water.These new sources will provide for secure and reliable supplies in
times of drought or catastrophic loss of one of the City's major water supply sources.They will also provide the water
needed to achieve the City's General Plan goals.The new supply projects include the Water Reuse project,which will
generate over 1,000 acre-feet per year of drought-proof supply suitable for irrigation and other non-potable uses; and
the Nacimiento Pipeline project,which will provide the community with 3,380 acre-feet per year of additional potable
water supply when it is completed during the latter part of 2010.
In addition to water supplies,the proposed rate increases will support ongoing maintenance and operating programs
needed to ensure that the water treatment and delivery systems meet all federal and state water treatment
regulations—, provide adequate fire flow protection and are operated and maintained to provide reliable service.
e
S E W E R. The proposed increase to sewer rates is needed to fund required upgrades to the City's water
reclamation facility in order to meet added.regulatory requirements for protection of San Luis Obispo Creek. In
addition,the proposed rates will assist in funding repairs to the wastewater collection system.The proposed rates are
needed to fund ongoing operations and maintenance costs of an aging infrastructure in both the water reclamation
facility and the wastewater collection system.
For questions regarding the City's water and sewer operations and maintenance programs, or inquiries about specific
water or sewer projects, please contact the Utilities Department at(805) 781-7215.
How Can l Find Out More About The Proposed Increases?
Information to help you calculate how the proposed rates will affect your bill is on the Web at www.slocity.org/utilities;
click on "How to Calculate Your Water and Sewer Bill." If you keep your old water and sewer bills,you can look back
at the units of water you used and your sewer cap to determine how the proposed rate may impact you.You can also
look up your bills on-line by going to www.slocity.org and clicking "Pay Utility Bill."You may also call Utility Billing at
(805) 781-7097 or the Utilities Department at(805) 781-7215 for assistance.
How Do I Protest The Proposed WaterAnd/OrSewer.Rate?
Proposition 218 mandates how protests to water and/or sewer rates are conducted.Customers directly responsible for
the payment of the fee subject to the proposed rate increase may submit a written protest against the proposed rate. If
written protests are received from a majority of the affected customers,the proposed rate will not be imposed.
It is important to follow these instructions in order for your protest to be valid:
1. The protest must be in writing and received by the City Clerk at or before the public hearing on June 11,2009.
Those who protest must specifically identify what is being protested -the water rate increase,the sewer rate
increase or both.Written protests may be mailed or personally delivered to the City Clerk at 990 Palm Street,
San Luis Obispo,CA 93401.
2. All written protests must contain the service address and the water and sewer service account number.
3. The protest must be signed, and the party signing the protest must be listed on the account as the person
responsible for the payment of the bill.
ATTACHMENT2
What Are The Proposed Rates?
The following shows current and proposed rates for accounts inside the City limits. For accounts outside of the City limits, rates are
twice the amounts shown.
CURRENT AND PROPOSED WATER RATES (TABLE 1)
USE CURRENT Proposed JULY 1, 2009 Proposed JULY 1, 2010
Single-Family Residentitaf
1 to 5 units' $ 4.19 $ 4.69 $ 5.21
---- -- -
6 to 25 units $ 5.24 _ _ _ $ 5.8_7_ _ _ $_6_52_
26 or more units $ 6.57 $ 7.36 Y $8.17
All other
1 to 5 units _ $ 4.19 $ 4.69 $_5.21
I 6 or more units $ 5.24 $5.87 �- $6.52
'All rates shown are for one unit of water. A unit equals 748 gallons. [
CURRENT AND PROPOSED SEWER RATES (TABLE 2)
USE CURRENT Proposed JULY 1, 2009 Proposed JULY 1, 2010
Single-Family Residential (including single-metered condominiums and_townhomes)
Base fee per dwelling unit $ 5.50 $ 6.00 $ 6.55
(minimum charge) _
- Volume(service)charge per unit $6.06 - _ $ 6.63 V__ $7.22_-_�
NOTE:Total monthly charge is capped, based on average winter water use'
Master-Metered Multifamily Dwellings(in any duplex,apartment house,or rooming house,mobile home or trailer park)
r
Base fee per account(minimum charge) $ 5.50 $ 6.00 $ 6.55
I Volume(service)charge per unit $6.06 _ $ 6.63 $Z 2
NOTE: For accounts without a separate irrigation meter,the total monthly charge is capped,based on average winter water use"
Accounts with a separate irrigation meter have no cap.
Public,Private or Parochial School
Per average daily attendance(ADA) $ 4.91 $ 5.37 $ 5.85
at the school
All Other Accounts
Minimum charge per account $ 5.50 $ 6.00 .$ 6.5'5
Volume(service)charge per unit Tw$6.06 $ 6.63 $7.22
'For single family residential and for those master-metered multifamily dwellings and mobile homes or trailer parks without a
separate irrigation meter, the sewer service charge is based on the volume of water used during a three-month period during
the winter months (December, January and February, depending on when your meter is read). This is known as the average
winter water use. The average volume of water used during this period is used to calculate your sewer cap for the next year.
What Is The Impact On A Typical Residential Customer?
The following shows the impact of the increase on a typical residential customer, which assumes 10 units of water use per month
and a sewer cap of seven units per month:
SAMPLE RESIDENTIAL WATER AND SEWER BILL (TABLE 3)
CURRENT Proposed JULY 1, 2009 Proposed JULY 1, 2010
Water Service $ 4715 $ 52.80 $ 58.65
Sewer Base Fee $ 5.50 $ 6.00 $ 6.55
Sewer Service Use Fee $ 42.42 $ 46.41 $ 50.54
ATTACHMENT 2
MY,„ Of Presorted Standard.
SAe ! Wis OBISPO U.S.Postage
PAID
Permit No.7
utilities Department , San Luis Obispo
CA,93401
879 Morro Street
San Luis Obispo,CA 93401
Printed on Recycled Paper
with Soy-based Ink
Notice of Public Hearing
A public hearing on proposed water and sewer rate increases will be held on:
Date: Thursday, June 11,2009
Time: 7:00 p.m.
Place: City of San Luis Obispo, Council Chambers
990 Palm Street,San Luis Obispo,CA 93401
The hearing will cover the proposed 2009 and 2010 rate increases for water and sewer services.This notice
has been sent to all customers who currently receive either of these services provided by the City of San Luis
Obispo.If adopted,the proposed rate increases will become effective July 1,2009 and July 1,2010.
This Notice of Public Hearing provides information regarding proposed rate increases to the City's water
and sewer service customers pursuant to the requirements of California Constitution Article XIII(commonly
referred to as Proposition 218).The proposed rate increases will be presented to the Council for adoption on
Thursday,June 11,2009,at 7:00 p.m.in the Council Chambers.This notice also provides information on how
rates are calculated,the reasons for the required rate increases,how customers can receive more information
on the effect of the proposed rate increases on their water and sewer bills and how to file a protest against the
proposed rate increases.
PNS � ��
ATTACHMENT 3
RESOLUTION NO. (2009 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
ESTABLISHING SEWER SERVICE RATES
WHEREAS,it is the policy of the City of San Luis Obispo to review enterprise fund fees
and rates on an ongoing basis and to adjust them as required to ensure that they remain equitable
and adequate to fully cover the costs of providing services; and
WHEREAS, a comprehensive analysis of sewer fund operating, capital and debt service
needs has been performed for fiscal years 2009-11 through 2016-17; and
WHEREAS,this comprehensive analysis has been revised based on updated revenue and
expenditure information; and
WHEREAS, the Council has reviewed the sewer service rates necessary to meet system
operating, capital and debt service requirements; and
WHEREAS,a public hearing was properly noticed and held on June 11, 2009; 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. 10014 (2008 Series) is hereby rescinded, effective 11:59
p.m. June 10, 2009.
SECTION 2. The rates set forth in Exhibit "A" are hereby adopted, establishing rates
effective July 1, 2009 and July 1, 2010.
Upon motion of , seconded by
and on the following vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of 2009.
Mayor David F. Romero
R
PN5'
ATTACHMENT 3
Resolution No. (2009 Series)
Page 2
ATTEST:
Audrey Hooper
City Clerk
APPROVED AS TO FORM:
Jonathan P. Lowell
City Attorney
R
k 57-aq
ATTACHMENT 3
Resolution No. (2009 Series)
Page 3
EXHIBIT A
MONTHLY SEWER SERVICE RATES
Account Type Effective July 1,2009 Effective July 1,2010
Single family Minimum charge:$6.00 per dwelling unit Minimum charge:$6.55 per dwelling unit
dwelling, Volume charge per unit: $6.63 Volume charge per unit: $7.22
including single
meter Total monthly fee capped based on average Total monthly fee capped based on average
condominiums and winter water use(AWWU) winter water use(AWWU)
townhouses
Master-metered Minimum charge:$6.00 per account Minimum charge:$6.55 per account
multi-family Volume charge per unit:$6.63 Volume charge per unit:$7.22
dwellings in any
duplex,apartment Accounts without separate irrigation Accounts without separate irrigation
house or rooming meter: meter:
house Total monthly fee capped based on AWWU Total monthly fee capped based on AWWU
Accounts with separate irrigation meter: Accounts with separate irrigation meter:
No cap
No can
Mobile home or Minimum charge: $6.00 per account Minimum charge:$6.55 per account
trailer park Volume charge per unit: $6.63 Volume charge per unit:$7.22
Accounts without separate irrigation Accounts without separate irrigation
meter: meter:
Total monthly fee capped based on AWWU Total monthly fee capped based on AWWU
Accounts with separate irrigation meter: Accounts with separate irrigation meter:
No cap No cap
Monthiv Sewer Rates: Non-Residential Customers
Public,private,or $5.37 per ADA $5.85 per ADA
parochial school,
average daily
attendance(ADA)at
the school
All Other Accounts Minimum charge: $6.00 per account Minimum charge:$6.55 per account
Volume charge per unit: $6.63 Volume charge per unit: $7.22
Minimum charge $156.36 $170.43
Additional charge per $9.41 $10.26
100 gallons in excess
of 1,500 gallons
discharged
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1IIIIIIIIIIIq�I 111111
CONFIDENTIAL MEMORANDUM
From the Office of the City Attorney
June 11, 2009
TO: Mayor and City Council
FROM: Jonathan P. Lowell,City Attorney
SUBJECT: Closed Session,June 11,2009,at 6:00 p.m.
1.) Determination Pursuant to Government Code§54954.2 of Need for
Immediate Action in Light of Information Brought to City's Attention
after Posting of Agenda
2.) Conference Regarding Property Negotiations—
Pursuant to Government Code §54956.8
Pursuant to Government Code §54954.2, a Closed Session will be held on June 11, 2009, at 6:00
p.m. to determine: 1)if there is a need to take immediate action, and 2)the need to take action came
to the attention of the City after the agenda was posted.
If the above determinations justify doing so,immediately thereafter,pursuant to Government Code
§ 54956.8, a Closed Session will be held.to discuss Property Negotiations regarding an affordable
housing unit at 3591 Sacramento Drive, Unit 53.
A separate memorandum on this subject from Housing Programs Manager, Michael Codron will
be distributed to you as soon as possible. A more detailed explanation will be given at the
Closed Session, at which time you can provide direction to staff.
In the meantime, if you have any questions please contact Michael Codron or me.
JPL/cp
Attachment
cc: Ken Hampian
Shelly Stanwyck
Michael Codron
Kim Murry
John Mandeville
City Clerk:
The Closed Session Announcement should read:
CLOSED SESSION: June 11,2009, at 6:00 p.m.
DETERMINATIONS OF NEED FOR IMMEDIATE ACTION
Pursuant to Government Code § 54954.2
CONFERENCE REGARDING PROPERTY NEGOTIATIONS
Pursuant to Government Code § 54956.8
PROPERTY: 3591 Sacramento Drive ,Unit 53
NEGOTIATING PARTIES:
City of San Luis Obispo: Michael Codron,Jonathan Lowell
Landowner: J. Douglas
NEGOTIATIONS: Possible acquisition of property, terms and price; direction
for resale of property