HomeMy WebLinkAbout2003 07-01 CC AGENDA PKT (2)AGENDA OF A SPECIAL MEETING OF THE
CITY COUNCIL OF THE CITY OF NATIONAL CITY WORKSHOP
LARGE CONFERENCE ROOM
CIVIC CENTER
1243 NATIONAL CITY BOULEVARD
TUESDAY - JULY 1, 2003 - 9:30 A.M.
OPEN TO THE PUBLIC
ROLL CALL
1. Continued Public Hearing to consider changes in sewer service charges for Fiscal
Years 2003-2004, 2004-2005, and 2005-2006.
PUBLIC ORAL COMMUNCICATIONS (Five -Minute Time Limit)
NOTE: Pursuant to State Law, items requiring Council action must be brought
back on a subsequent Council agenda unless they are of a demonstrated
emergency or urgent nature.
ADJOURNMENT
Next Regular City Council Meeting — Tuesday, July 1, 2003 — 6:00 p.m. — Council
Chambers, Civic Center
TAPE RECORDINGS OF EACH COUNCIL MEETING ARE
AVAILABLE FOR SALE AND TO LISTEN TO
IN THE CITY CLERK'S OFFICE
MEETING DATE
July 1, 2003
City of National City, California
COUNCIL AGENDA STATEMENT
AGENDA ITEM NO.
1
ITEM TITLE
A PUBLIC HEARING TO CONSIDER A SEWER RATE CHANGE IN EACH OF THE NEXT THREE
FISCAL YEARS 2004, 2005, 2006
PREPARED BY Stephen Kirkpatrick DEPARTMENT Public Works/Engineering
336-4580
EXPLANATION
See attached explanation.
Financial Statement
The burden of the increased rates. will fall on all the sewer service recipients.
STAFF RE OMMENDATION
Hold the Public Hearing to consider a sewer rate change in each of the next Fiscal Years 2004, 2005,
2006.
Finance Director
BOARD / COMMI W ON RECOMMENDATION
N/A
ATTACHMENTS ( Listed Below )
1. Exhibit A - Proposed Sewer Rates
2. Exhibit B — Rate Comparison Table
Account No.
Resolution No.
Explanation:
The cost of wastewater collection, transportation and treatment has increased
dramatically. Wastewater rates charged to residents and businesses must be increased
to keep up with the rising costs. Wastewater rates are proposed to increase over the
next three years. The proposed increases are shown in Exhibit A.
The current rates generate approximately $4.9M annually. The rates as proposed will
generate approximately $6.1M in FY 2004, approximately $7.0M in FY 2005, and
approximately $7.7 M in FY 2006. In FY 2004, the cost of providing wastewater service
will total approximately $6..8M, and increase each of the next two years. It will be
necessary to augment the wastewater budget in FY 2004 with approximately $700,000
from the Wastewater Rate Stabilization Reserve to cover the cost of wastewater
collection, transportation, and treatment. Approximately $540,000 of those funds will be
recovered over the next two fiscal years.
Three major factors play a role in the increase in costs that we are experiencing here in
National City. They are:
1. The increased amount being charged by San Diego for wastewater treatment.
2. The increased wastewater flow being generated by National City - primarily due
to San Diego installing additional and more accurate flow meters.
3. The requirements of the State issued NPDES stormwater pollution prevention
permit.
All National City's sewage is transported to Point Loma for treatment. The amount
being charged by San Diego has increased significantly over the last few years and the
increases are projected to continue. The Metro Wastewater Joint Power Authority, of
which National City is a member, hired an independent auditor to review the costs being
passed on the member agencies. Without exception the auditor concurred with the
validity of the costs.
All the sewage that is collected by National City is metered by San Diego as it enters
their system on the way to Point Loma for treatment. For the last couple of years San
Diego has been upgrading all their flow meters. The result for National City has been a
significant increase in the flow and consequent charges for treatment.. In fact, the
increase was so significant that we contracted with an independent firm to temporarily
install flow meters in series with the San Diego meters to assess the accuracy of San
Diego's new meters. Daily flow was measured by National City's and San Diego's
meters for several months then compared. The results showed that San Diego's new
meters were accurate and the City will be charged more for treatment as a result.
Finally, National City operates and maintains its storm drain system in accordance with
the requirements of the California Water Quality Control Board's NPDES permit. This
permit has completely changed the way storm drain systems are operated. In the past
the storm drain system was primarily operated and maintained with the goal of
eliminating flooding of private property in the event of storms, and somewhat ignored at
all other times. Now water quality is a major factor to consider in the operation of the
system. As you know the storm drain system transports more than actual storm water.
Significant demands are placed upon the City's storm water system by improved
properties within the City which are served by the City's sewer system. The California
Water Quality Control Board has issued the NPDES permit that very prescriptively
describes things the City must do to reduce or eliminate the amount of urban run-off
pollution that enters as is carried through the system. These new requirements are very
costly. Like many other cities that are subject to the permit, it is proposed that the
wastewater fund be used to pay a portion of the costs.
Exhibit B is included so that Council can see how the proposed wastewater rates
compare with rates that other Metro member agencies in the region are charging.
Exhibit B shows the rates being charged for single family service. National City charges
a flat rate to residential users, as opposed to a water consumption based rate as is
charged Commercial users. This residential billing practice is common when water and
sewer are provided by different agencies. Exhibit B lists Agencies that likewise charge
a flat rate for residential users, and converts data from Agencies that do not charge a
flat rate to an average monthly rate so a comparison is possible.
Earlier in the report it was stated that the Rate Stabilization Fund would need to
augment next years wastewater budget by approximately $700,000, then recover a total
of approximately $540,000 over the following two years. Currently there is
approximately $3.0M in the Rate Stabilization Fund. The reason we are proposing the
recover of the $540,000 is so the Rate Stabilization Fund maintains a balance of almost
$2.9M, as it may be necessary to cover the bad debt that has already accrued.
The rates assume that the Rate Stabilization Fund will be expended to cover the bad
debt. When the rates are again reviewed for 2006 we will be able to determine how any
remaining Rate Stabilization Fund balance be utilized if the collection efforts are
positive.
Exhibit A
National City Proposed Wastewater Rates for FY 2004, 2005, and 2006
Residential Flat Rates (per month)
Single Family Residence
Multi -Family Residence
Mobile Homes
Commercial Variable Rates (per HCF)
Suspended Solid
Strength Category
Commercial
Commercial -
Commercial -
Commercial -
Commercial -
- Low
Medium Low
Medium
Medium High
High
Suspended Solids
Strength Range
< 200 PPM
201 to 280 PPM
281 to 420 PPM
421 to 600 PPM
> 600 PPM
Current Rate 03/04 Rate 04/05 Rate 05/06 Rate
Monthly Monthly Monthly Monthly
$16.08 $22.08 $28.08 $32.08
$15.00 $19.00 $23.00 $25.00
$9.50 $13.50 $17.50 $19.50
$2.41
$2.65
$3.36
$3.99
$5.19
$2.85
$3.09
$3.84
$4.60
$5.75
$2.89
$3.13
$3.90
$4.68
$5.86
$3.03
$3.28
$4.09
$4.90
$6.12
Exhibit B
Comparison of Single Family Wastewater Rates for Metro Member Agencies
2000 2002 2003 2004
DEL MAR " $ 36.49 $ 51.65 $ 57.62 $ 59.50
CORONADO ** $ 31.64 $ 31.64 $ 31.64 $ 31.64
PADRE DAM " $ 29.45 $ 31.46 $ 32.69 $ 32.69
OTAY **
$ 28.95 $ 28.95 $ 28.95 $ 28.95
POWAY " $ 25.90 $ 30.10 $ 30.92 $ 30.92
ALPINE **
$ 24.25 $ 24.25 $ 24.25 $ 24.25
SPRING VALLEY ** $ 23.00 $ 23.00 $ 23.00 $ 23.00
$ 22.08 $. 22.08 $ 22.08 $ 22.08
LAKESIDE ** LA MESA $ 21.25 $ 21.25 $ 28.70 $ 31.57
WINTERGARDENS ** $ 21.17 $ 21.17 $ 21.17 $ 21.17
CHULA VISTA " $ 20.06 $ 20.06 $ 19.00 $ 17.47
LEMON GROVE ** $ 17.08 $ 24.32 $ 30.03 $ 30.03
NATIONAL CITY ** $ 16.08 $ 16.08 $ 16.08 $ 22.08
SAN DIEGO " $ 28.38 $ 29.80 $ 41.31 $ 43.79
** Flat Rate
" Converted to Flat Rate
Mike Dalla
From: Stephen Kirkpatrick
Sent: Monday, June 30, 2003 12:01 PM
To: Nick Inzunza; Frank Parra; Ron Morrison; Fideles Ungab; Luis Natividad; Mike Dalla
Cc: Park Morse; Ryan Hyland; 'Kkeese@pbsj.com'; 'tconeil@pbsj.com'; Joe Smith; Burt Myers;
George Eiser; Marylou Matienzo; Alison Hunter
Subject: FW: Sewer Rate Workshop
Please find attached a number of tables that address the questions that were raised at the City Council meeting on June
17, 2003. The tables will be presented at the workshop meeting scheduled for tomorrow morning. If you have any
questions in the meantime please do not hesitate to call me at 336-4383 at work, or 619-464-6614 at home if after hours.
(When you open the document click "no" when asked if you want to update.)
The tables show proposed low income rates, and present a number different scenarios. Unfortunately the low income
rate is not exactly correct. We omitted from the cost approximately $60K annually needed to hire an administrator for
the program. Since this is a program that rebates the difference between the low income rate and the normal rate to a
qualifying resident whether owner or not, and we bill owners through the tax rolls, we will have to have a full time person
run the program. The rates will be adjusted on the table that is presented tomorrow. I will attempt to get the modified
table to each of you through e-mail this afternoon.
One of the tables compares proposed residential increases to proposed commercial increases, and factors in water use.
This table shows the percentage increases are very similar at the end of three years. One very interesting thing to note
is the significant increase in average water use as reported by Sweetwater Authority in each of the rate classes from
00/01 (when the last rate study was prepared) to 02/03. Significantly more water is being used, and sewer generated and
sewer rates are following accordingly.
For additional information we have also prepared a table showing how the rate is broken down by costs; Metro charges,
NPDES charges; and City O&M costs (including capital improvement). This table clearly shows how much of each bill is
spent on each purpose.
National City sewer
rates.xls
Original Message
From: Stephen Kirkpatrick
Sent: Wednesday, June 18, 2003 10:01 AM
To: Nick Inzunza; Frank Parra; Ron Morrison; Fideles Ungab; Luis Natividad; Mike Della
Cc: Park Morse; Ryan Hyland; 'Kkeese@pbsj.com'; 'tconeil@pbsj.com'; Joe Smith; Burt Myers
Subject: Sewer Rate Workshop
From my understanding of the discussion at last night's meeting, two main issues regarding the proposed rate increases
were raised that you would like further clarified:
1. Discussion of a low income rate. Low income rates are allowed under the State law. Certification of low income
status is required. It is probable that an additional staff person will be necessary to certify low income status - as is the
case in Vista. This will raise the overall cost of sewer service. I understand that we will attempt to subsidize a low
income program the with any "bad debt" that is successfully collected, however in the long run the discount given to
qualified low income users must be made up those that do not qualify as low income. For the workshop on July 1 we will
put together a rate scenario that contemplates a low income rate, assumes some collection of bad debt, and adjusts
other rates accordingly.
2. Further clarify the difference between proposed residential increases and commercial increases I understand the
table prepared appears to show a large increase to residential rates compared to commercial rates. This is really not the
case. The residential rates are flat rates, while the commercial rates are a water consumption/sewer strength based
rate. A direct comparison is like comparing apples to oranges. For our meeting on July 1 we will prepare a spreadsheet
that factors in water consumption to the commercial rates. It will make the comparison more apples to apples. It will
show that the proposed rate increases, although not exact, are more similar than they appear.
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We will be preparing these documents this week, or early next week. I will distribute them to everyone prior to the
workshop so that you can consider them ahead of time if you so choose.
If there is additional information that would like, or if I am incorrect in my understanding of what needs further
clarification, please let me know as soon as possible so that we can be fully prepared for the workshop.
Finally, our Consultant Karen Keese from PBS&J, is available to attend a workshop meeting during the day on July 1,
2003 , but is unable to attend the meeting at 6:00 pm. She has already committed to another meeting that evening.
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