HomeMy WebLinkAbout07 SET PH FOR 7/21/09 TO CONS WATER RATES 06-02-09__~ Agenda Item. 7
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- --~~ AGENDA ~.EP RT Re~'ewea..
O City Manager
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~°'~'~-y-M~~ Finance director N/A
MEETING DATE: JUNE 2, 2009
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: TIM D. BEREFT, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
SUBJECT: SET A PUBLIC HEARING FOR JULY 21, 2009 TO CONSIDER
APPROVAL OF WATER RATES
SUMMARY
Over the last several months, staff has been working to develop a new water rate structure
to meet ongoing operation, maintenance, and long term capital facility improvements.
These new rates would generate sufficient revenue for operations, maintenance, and
needed system improvements to increase supply, system reliability, and redundancy. The
new rate structure has been refined to include a dedicated capital facilities charge,
additional usage tiers, conservation pricing (should mandatory reductions in import water
supply be required), and long-term financial stability.
RECOMMENDATION
It is recommended that the City Council set a public hearing for July 21, 2009 and approve
the mailing of the Proposition 218 notice, which notifies the public of the said hearing to set
rates for water. At that time, Council would be considering actual adoption of the rates.
FISCAL IMPACT
The proposed rates would generate the necessary revenue for operations, maintenance,
and long term capital infrastructure improvements. These funds are separate from the
General Fund.
BACKGROUND
Proposition 218 (Prop 218) was voter approved in 1996 and requires that the City give
notification to all property owners of rate increases on most utilities. This notification takes
the form of a mailing that includes the proposed rate, reasons for the rate increase,
information on the public hearing and instructions for those who wish to protest the rate
increase.
Tim D. Serlet
Director of Public Works/City Engineer
Pam Arends-King
Finance Director
ATTACHMENT(s): 218 Notice
TDS:DSS: ccg: Set PH for Water Rates.doc
CITY OF TUSTIN
PROPOSED WATER RATE INCREASE
FOR ALL PROPERTIES SERVED WITHIN THE CITY OF TUSTIN WATER SERVICE AREA
NOTICE IS HEREBY GIVEN that the City Council of the City of Tustin will hold a public hearing regarding
a proposed water rate increase on July 21, 2009 at 7:00 p.m., in the City Council Chambers, located
at 300 Centennial Way, Tustin, CA. The fees and charges, if approved by the City Council, will be
effective August 1, 2009. The proposed rates do not exceed the cost of providing water service to
Tustin customers and the increase would fund the City's continuing water service obligations to all
customers as mandated by the California Department of Health Services and needed system
improvements critical to increase supply, system reliability, and redundancy. This Notice provides for
the following:
1. Why water rates are being increased;
2. How much your water bill will increase when the new rates are imposed; and
3. How the proposed water rates are calculated.
In California, Proposition 218 allows customers to comment on a proposed water rate increase prior to
or during a public hearing. Consistent with the provisions of Proposition 218, this notice has been
mailed to all customers whose names and addresses appear in the current customer database of the
City of Tustin and property owners within the service area based on the most current information
published by the Orange County Assessor. If you object to the proposed fees as described in this
Notice, you may file a written protest with the City Clerk prior to the close of the public hearing, set for
July 21, 2009 at 7 p.m. Written protests can be mailed or personally delivered to:
City of Tustin -City Clerk's Office
300 Centennial Way
Tustin, CA 92780-3767
A valid protest must include all of the following information:
1. Customer name and account number or name of property owner;
2. The service address;
3. A statement of protest ("I protest" will suffice); and
4. The on final signature of the protesting customer/property owner (photocopies will not be
accepted).
The City Clerk will only accept one protest per property served by Tustin Water. The City Clerk will
determine the validity of all protests submitted and exclude any invalid protests from the final
tabulation. The City Clerk may confer with the City Attorney in determining the validity of written
protests. As part of this process, the City Attorney may review contested or suspect protest forms. The
City Clerk's decisions shall be final and binding. In the preliminary determination of validity, the City
Clerk will disregard as invalid all protests in the following categories:
1. The purported protest is a photocopy and does not contain an original authorized signature;
and/or
2. The purported protest does not identify the customer by name; and/or
3. The customer has not signed the purported protest; and/or
4. The purported protest does not have an identifiable statement of protest; and/or
5. The purported protest is one of multiple protests returned for a single service address; and/or
6. The purported protest's appearance or method of delivery reflects any other circumstances
which reasonably demonstrate that the protest has been tampered with or is otherwise
invalid.
7. The purported protest is received later than close of the public hearing on July 21, 2009.
For questions regarding this Notice or protest procedures, contact the City Clerk's Office at (714J 573-
3027. For questions regarding Water Rates, please contact Water Utility Services at (714J 573-3076.
Si necesita una copia de este documento en espanol por favor de Ilamar al (714) 573-3025.
Page i of 4
QUESTIONS AND ANSWERS
1. Why are water rates being increased?
These charge increases are designed to recover the City's actual increased costs in providing
water services. Costs have increased in the areas of purchased water, pumping, treatment,
various fees and charges from the water wholesalers, electricity, meter readings, billing, and
capital improvements.
2. How much will my water bill change when the new rates are imposed?
The typical single-family residential customer of the Tustin Water Service uses approximately
forty units of water every two months (1 unit = 100 cubic feet (hcf) = 748 gallons). The typical bi-
monthly residential water bill would increase $7.77 for FY 09/10. Based upon usage, the typical
bi-monthly water bill would increase over the next 5 years as follows:
CHANGE FROM PREVIOUS YEAR FOR SMALL METERS ~ under 2" mefer sized
__ i 10.82% 11.49% 14.80% 18.01 % 20.40%
10.49% 10.89% 11.22% 1 1.41 % 1 1.55%
6.94% 6.76% 6.62% 6.52% 6.45%
7.00%
___ _ __
6.83%
6.62%
6.51 %
6.44%
L_ _ _'~ 6.95% 6.72% 6.61 % 6.50% 6.43%
CHANGE FROM PREVIOUS YEAR FOR LARGE METERS (2" meter size & areafer )
60 Units 120 Units 180 Units 240 Units 300 Units
High 23.49% 35.86% 42.56% 46.76% 49.64%
FY 09/10 Normal 19.85% 28.84% 33.71% 36.76% 38.86
Low 16.54% 22.46% 25.66% 27.67 29.05%
High 10.33~b 1 1.1 1 °~0 1 1.48% 1 1.700 1 1.84
FY 10/11 Normal 10.27%a 1 1.040 1 1.420 11.64% 1 1.78%
Low 10.20 0 10.96% 1 1.350 1 1.58% 1 1.73°'0
High 8.23% 7.42% 7.04% 6.82% 6.68%
FY 11/12 Normal 8.30% 7.49% 7.11% 6.88% 6.73%
Low 8.37% 7.57% 7.18% 6.94% 6.78%
High 8.28ia 7.46% 7.070 6.85°'0 6.700
FY 12/13 Normal 8.35 0 7.54% 7.14 0 6.91 ~0 6.750
Low 8.42% 7.62% 7.22% 6.97% 6.81 %
High 8.33% 7.50% 7.11% 6.88% 6.73%
FY 13/14 Normal 8.40% 7.58% 7.18% 6.94% 6.78%
Low 8.47% 7.66% 7.25% 7.01% 6.84%
Page 3 of 4
3. How are the proposed water rates calculated?
There are three cost components which make up the City's water rate structure; service
capacity charge, water consumption charge, and capital charge.
- A service capacity charge is reflective of the service demands placed on the City's water
system, based upon the size of a customer's meter regardless of consumption.
PROPOSED Bi-MONTHLY SERVICE CAPACITY CHAR[~FS
~T_~
~ ~ ~ _
~
_ _
24.50 26.94 29.64 32.60 35.86
61.24
-- -
67.36
74.08
81.50
89.64
_ _ 122.46 134.70 148.18 163.00 179.28
_ 195.92 215.52 237.06 260.78 286.86
_ 367.36 404.08 444.50 488.94 537.84
___~ 612.24 673.46 740.82 814.90 896.38
1224.48 1346.92 1481.64 1629.80 1792.76
19.60 21.56 23.72 26.08 28.68
- A water consumption charge is based on water usage. The cost to the consumer for water
will be lower if less water is used and higher if more water is used. The consumption is
metered in units. A unit equals one hcf (hundred cubic feet). One hcf is equal to 748
gallons of water.
PROPOSED WATER CONSUMPTION CHARGE
--
-
,- i_
FY 09/10
0.58
1.01
1.31 _
l .b 1
1.91 -
2.21 :,
2.51
FY 10/11 0.65 1.14 1.47 1.81 2.15 2.49 2.82
FY 11 /12 0.69 1.21 1.56 1.92 2.28 2.64 2.99
FY 12/13 0.73 1.28 1.66 2.04 2.42 2.79 3.17
FY 13 14 0.78 1.35 1.76 2.16 2.56 2.96 3.36
Note: Multiple dwelling unit charges are calculated at 80% of single family dwelling charges.
Hi h 0.70 1.22 1.59 1.95 2.31 2.67 3.04
FY 09 10 Normal 0.64 l .l 1 1.44 1.77 2.10 2.43 2.76
_ Low
I, Hi4h
FY 10/11 'Normal
1 Low _ $0.58
. X0.79 T
$0.72
~~.65 _ $1.01
$1.38 ~
$1.25
$1.1,4 _$1.31
$1.78_
$1.62 ,
x_$1.47 $_1_.61
. $2.19
~ $1_99 j
'_ 1.81 ~ 1 _
X260
~2.36 ~
! 2_15 2.21
$3.01
$2.74
$2.49 1 _$2.51
I_$3.42
X3.1 1
X2.82
Hi h 0.84 1.46 1.89 2.32 2.76 3.19 3.62
FY 11 12 Normal 0.76 1.33 1.72 2.1 1 2.51 2.90 3.29
_ _ -Low 0.69 $ ~ ~? 1 $1.56 1.92 $2.28 $2.64 X2.99
__ _
FY _1.2/13 High
Normal 1
Low_ ... _ r
.._$0.89 _
0.81 _
$0.73 _ _
X1.55 _1
x.41 ~
~ .28 ..___
_
_$2.00 ~
`~ 1_82
_$1.66
_ j ~2.92_~
$2.46 ___
_$2.24 _~.66
~ X04 X2.42 _.. __
$3.38
~ ~_ f
~_~3.07 „
_.$2.79 _
$3 84
~49
3.17
,
Hi h 0.94 1.64 2.12 2.61 3.10 3.58 _
4.07
FY 13 14 Normal 0.86 1.49 1.93 2.37 2.82 3.26 3.70
Low 0.78 1.35 1.76 2.16 2.56 2.96 3.36
Hi h Greater t han 110% of rior ear consum Lion
Normal 90-1 10% of rior ear consum Lion
Low Less than 90% of prior year consumption
Page 4 of 4
- A capital charge is assessed for on-going water system infrastructure improvements. The
charge is dedicated exclusively to new capital construction, repair, and/or rehabilitation of
water storage, production, distribution, treatment, and security facilities regardless of
consumption.
PROPOSED Bi-MONTHLY CAPITAL CHARGE
,_--
5/8" of 3/4" 10 10 11 11 1 1
1" 12 12 13 13 14
1 1/2" 16 16 17 17 18
2" 22 23 23 24 25
3" 33 34 35 36 37
4" 53 55 56 58 60
6"orlar er 90 93 $95 98 101
PROPOSED PASS-THROUGH CHARGE(S)
Proposed water rate is subject to pass-through charges). Pass-through charges are increased
costs imposed by an outside utility or agency for such items as electricity, imported water, and
ground water replenishment. Pass-through charges shall not exceed 7% of annual water charges in
effect at the time of the pass-through.
WATER DEMAND REDUCTION STAGES
In response to potential escalating water shortages, the City may require or impose reductions in
the use of water when such reductions are necessary for the City to comply with wholesale water
use restrictions in response to regional water shortage conditions and emergencies. Once the
stage is declared and ratified by the City Council, notice of the required water use reduction will
be promptly given to customers and adjusted per the corresponding stage allocation identified in
the table below.
__-- i - _ _ _
- _ J-
No Mandatory Reduction -
- _ _ -
in units 0-10 1 1-20 21-30 31-40 41-50 51-60 61 +
STAGE 1 -Water Watch 0-9 10-18 19-27 28-36 37-45 46-54 55+
Voluntary Compliance
10-20% Reduction
STAGE 2 -Water Alert 0-8 9-16 17-24 25-32 33-40 41-48 49+
Mandatory Compliance
20-30% Reduction
STAGE 3 -Water Warning 0-7 8-14 15-21 22-28 29-35 36-42 43+
Mandatory Compliance
30-40% Reduction
STAGE 4 -Water Emergency 0-6 7-12 13-18 19-24 25-30 31-36 37+
Mandatory Compliance
40%+ Reduction