HomeMy WebLinkAbout05/25/1993, Item C2 - Sewer Fund Rate Review M1y II r
�I�II!I�p���INIIIIIIIIII III r MEETING cityo san tins osIspo - -
COUNCIL, AGENDA REPORT ITEM NUM6E1:/f A
�— FROM: William C. Statler, Director of Finance
Prepared by: Linda Asprion, Revenue Manager*�
SUBJECT: SEWER FUND RATE REVIEW
CAO RECOMMENDATION
Receive and file sewer fund rate review.
DISCUSSION
Overview
In June of 1992, the Council reviewed an updated financial plan and rate forecast for the
sewer fund which included projected debt service and operating requirements for
improvements to the water reclamation facility and collection system totaling $31.1 million.
Based on this forecast, the Council adopted monthly rates for sewer service charges for
single family residential customers (SFR) through 1994-95 as follows:
Existing Rates
SFR Customers
July 1, 1992 $15.00 (See Attachment C for existing ,
July 1, 1993 $1850 rates for other customers)
July 1, 1994 $19.50
It is important to note that as a condition of receiving the State Revolving Fund (SRF) i
loans, Council adopted Resolution No. 6958 in Apri1, 1991 dedicating sewer service charges
as revenues for repayment of the SRF loans. The currently approved rate increases are
sufficient for this purpose and have been submitted to the State as a final revenue program.
Accordingly,based on the updated rate review as summarized in Attachments A and B, rate
projections remain valid and no changes in currently adopted rates are recommended.
Background
In preparing long-term revenue plans, it is necessary to develop a number of key
assumptions which are subject to change depending on their number and the level off
uncertainty associated with them. In preparing sewer rate projections, key assumptions
include:
s Expenditure requirements for operations, capital outlay, and debt service
■ Customer service growth
■ Other revenues such as capital improvement charges and interest on investments
Attachments A and B detail the rate requirements and the assumptions used for the sewer
fund through 1996-97. As reflected in these attachments, it is projected that the sewer fee
revenues will approximately equal the expenditures in 1994-95, which is the "base year" for
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COUNCIL AGENDA REPORT
revenue requirements as operating and debt service costs associated with the treatment and
collection system improvements will be fully-developed by that time. As such, no increase
in sewer service charges is recommended at this time.
Summary of Key Assumptions
These projections include assumptions regarding the three key areas indicated above. These
assumptions are as follows:
■ Expenditure requirements for operations, capital out* and debt service. Operating
expenditures are based upon the 'base budget" prepared for 1993-94 and 1994-95
including significant operating program requests. Capital projects included in the
projection are those listed in the preliminary 1993-95 Financial Plan. Beginning.in
1993-94, debt service reflects the full amount of annual repayment of the State
Revolving Fund Loan.
® Customer service growth. Past projections have used the 1% growth limit consistent
with adopted growth management policies. However, the City has not experienced
this amount of growth during the past few years, Therefore, the assumed growth of
.3%and .5% for the next two years is used to provide consistency with the March 13;
1993 Budget Workshop Forecast.
■ Capital Improvement Charges Once again, past projections have used the 1%
anticipated growth, however, this projection assumes the more realistic growth rate
assumed in the March 13, 1993 Forecast. Accordingly, the projections used for
capital improvement charges reflect the indicated percentage of the"base projection"
of $583,200 which would be the revenue received with a 1% growth rate.
FISCAL IMPACT
Using the assumptions discussed above and the projected revenue and expenditures for
1993-94 and 1994-95, staff is recommending retaining the existing scheduled rate increases
for the next two years.. After 1994-95, a modest rate increase of 5% is projected and is
reflected in the recommended rates for 1995-96 and 1996-97.
ATTACHMENTS
A. Changes in fund balance - sewer fund
B. Assumptions for sewer fund projections
C. Currently adopted sewer service charges per Resolution No. 8022
Attachmentd.
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Attachment
MONTHLY SEWER SERVICE CHARGES
�} Effective Dates
Type of Account 7/1/92 7/1/93 7/1/94
-------------------------------------- --------------------------
single family dwelling, $15. 00 $18. 50 $19.50
including single meter
condominiums and townhouses
Multi-family dwelling unit $12. 00 $14 .75 $15.50
in any duplex, apartment house
or roominghouse, per each
dwelling unit
Mobile Home or trailer park, $ 9. 00 $11. 10 $11.70
per each dwelling unit
Hotel, motel, or auto court, $12.00 $14.75 $15. 50
per each unit
Public, private or parochial $' 1.70 $ 2 . 10 $ 2.20
school, average daily attendance
at the school
Each restaurant or bakery
Minimum charge $15.00 $18. 50 $19.50
Additional charge for every 3. 00 $ 3.70 $ 3.90
100 cubic feet in excess of
500 cubic feet of metered
water consumption
All other accounts
Minimum charge $15. 0.0 $18. 50 $19.50
Additional charge for every $ 1. 80 $ 2.20 $ 2. 30
100 cubic feet in excess of
500 cubic feet of metered
water consumption
Each vehicle discharging sewage
.into City system
Minimum charge - $50.30 $62. 00 . $65.00
Additional charge per $ 3. 00 $ 3.70 $ 3.90
100 gallons in excess of
J� •1500 gallons discharged