Agenda Report - May 1, 2019 Public CommentÉt \oC b,3
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LODI CITY COUNCIL MAY T,2OL9
LODI C]TY MANAGER
THIS IS A CLAIM ON BEHALF OF THE CITIZEN RATE PAYERS OF THE LODI WATER
UTILITY ENTERPRISE. THIS IS A DEMAND THAT THE SECT¡ONS THAT INCLUDE ANY
AND ALL DROUGHT SURCHARGE INSTRUCTIONS AND RATES BE REMOVED FROM
AGENDA ITEM G-1-, RESOLUTION 2Aß-42 DATED MARCH 20,20T9.
During the March 20, 201.9 City Council Meeting I requested the Drought
Surcharge be removed in its entirety since it violated Prop 2L8, XllD. This
Surcharge was part of ltem G-L of March 2A,2AL9 Agenda Title: Public Hearing to
Consider Adopting Resolution 2L8 for Residential, Commercial and lndustrial
Customers for year 20Lg through 2023.
Page 2: Para graph 2 starting with "Rate Schedules and rates analysis"--- (the
last sentence reads) "The proposed rate program includes a temporary water
shortage rate surcharge for the water utility to offset the financial impacts of
mandatory water use restrictions resulting from drought conditions."
Para graph 3: "lf adopted the proposed temporary water shortage rate
surcharges, as set forth herein, would be implemented when the City Council
declares a water shortage emergency, necessitating mandatory water use
reductions exceeding L0 percent. Water shortage rate surcharges have been
designed such that customers meeting water use reduction goals will have lower
water bills than their normal water bills with normal water usage. Temporary
water shortage surcharges would be applied to the water usage rates (but not to
monthly service charges or flat water rates) and the amount of the surcharge
would vary with the magnitude of required water use reductions."
Note: see attached documents of Agenda ltem G-1 in its entirety. lncluding City
of Lodi Water and Wastewater Rate Study, Final Report, dated March 6,20L9 by
The Reed Group, lnc.
Resolution No. 20L9-42 dated March 20,24L9.
Page 1 of 4
Basis for claim:
Cal. Const., art Xlll D. sec 6, subd. (bX3)
Cal. Const., art Xlll D. sec 6, subd. (bX4)
Cal. Const., art Xlll D. sec 6, subd. (bX5) .
The City of Lodi technically has added additional rate tiers 4 through 7 with the
percentage drought surcharges, which are in excess of normal costs of service.
They are based upon future assumptions of costs not yet evident and in conflict
with XllD cost of proportionality of cost to a parcel. This fact is true since it
doesn't require additional cost to supply above normal supply and is a penalty
rate.
The City cannot create tiers for drought. lt can only charge for cost of water to
those customers whose extra usage of water forces the water enterprise to incur
higher costs of supply that this extra water supply demand may create.
Since the City's water supply is constant through either ground wells or WID river
water, it therefore cannot escalate the cost of supply to a parcel.
The Cities argument that water conservation customers billing would be less
expensive on a t¡er pricing basis during drought surcharges is not accurate. When
comparing regular tier pricing by usage they save the money by less consumption
at the regular tier pricing compared to the drought surcharge regardless of it, not
because of it.
Legal Reference:
(1-) Capistrano Taxpayers Association lnc., vs City of San Juan Capistrano in the
Court of Appeal of the State of California, Fourth Appellate District, Division Three
G048969, (Su p e r Ct. N o. 30-2012-0059 457 91 Op i n i o n.
Page2 of 4
(2) C¡ty of Palmdale vs Palmdale Water District, et al in the Court of Appeal of the
State of California, Second Appellate District, Division Seven 8224869, (Los
Angeles County Super,Ct. No. 8C413907).
(3) Jerry W. Jackson, an individual, on behalf of himself and all others similarly
situated; and Charles M. Schmidt, an individual, on behalf of himself and all
others similarly situated, Petitioners and Plaintiffs, vs. City of Lincoln, a general
law city; and DOES L-L}, Respondents and Defendants, Superior Court of the
State of California for the County of Placer, Case No.:SCV0039384, Verified
Petition For Writ of Mandate; Complaint for Declaratory Relief and Violation of
Proposition 218 (Class Action) April 25,2017.
Mike Lusk disclaimer: All the information contained in this Claim is meant to
support the argument of the Claim and not in any way meant to miss-lead the
intention of this Claim.
The representation of sources and excerpts were taken from official documents
in part or in whole but may not contain all of the information of the source
document. Persons reviewing this Claim are urged to review all source
documents in their entirety if further understanding is required.
This Claim is directed at the City of Lodi and not to anyone individual or
individuals within the City Government.
Respectfully
Mike Lusk
2518 Colony Dr.
Lodi, Calif.
Page 3 of 4
CC: Mr. Tim Bittle
Howard Jarvis Taxpayers Assoc.
921 llth Street, Suite LÀOL
Sacramento, Ca. 95814
Krause Kalfayan Benink & Slavens, LLP/GEO LAW
Mr. Eric J. Bennik, Esq.
Mr. Benjamin T. Benumof, Esq.
550 W. C. Street, Suite 530
San Diego, Calif.92101
Page 4 of 4
AGENDA ITEM G.O,I
Cmv or Loor
Couucrr, CoIUMUNIcATIoN
'tM
AGENDA TITLE:
MEETING DATE
PREPARED BY:
Public Hearing to Consider Adopting Resolution Setting Future Water, Wastewater, and
Solid Waste Rate Schedules Pursuant to Proposition 218 for Residential, Commercial,
and lndustrial Customers for year 2019 through 2023
March 20,2019
Public Works Director
RECOMMENDED AGTION: Public hearing to consider adopting resolution setting future water,
wastewater, and solid waste rate schedules pursuant to Proposition 218
for residential, commercial, and industrial customers for year 2019
through 2023.
BACKGROUND INFORMATION: ln2014, the City Council approved a five-year rate program forthe water
and wastewater utilities, and the solid waste franchise. The Council
action complied with the Proposition 218 requirements pertaining to such
actions. The action also established a water meter charge schedule that identifies the property owner's cost to
purchase a water meter ranging in size from %-inch to eight-inch. The meter pricing is to remain unchanged
until the end of the water meter program and includes installation by City forces. The last pre-approved rate
adjustment under the current program for the water utility reflected a 3.0 percent increase, effective January 1,
2017, with a 2021 rate rollback upon the projected completion of the Water Meter Program. The wastewater
utility had a 2.5 percent increase effective July 1, 2016, which was below the three percent Engineering News
Record (ENR) index increase, also approved in 2014. A summary of the programmed rate adjustments and
the implemented rate adjustments for the past five years is provided in the table in Exhibit A. The purpose of
this table is to demonstrate past rate increases have frequently been below the approved adjustments.
ln preparation of the new five-year program, Staff engaged the services of The Reed Group, lnc. to analyze the
financial models and current rate structure within both utilities. The final report, Water and Wastewater Rate
Update Study, is provided in Exhibit B.
Staff is recommending a new five-year rate adjustment program for water, wastewater, and solid waste that will
be subject to the Proposition 218 process. As in the past, rate adjustment forecasts are based upon the
financial models for each utility. The water and wastewater financial models are provided in Exhibits C and D,
respectively. For both the water and wastewater utilities, the programmed adjustments are capped at three
percent per year. lmportant elements of the financial models are presented below.
Water Financial Model
1. Financial assumptions presented on the final page were checked and reconfirmed against
actual numbers.
2. Annual adjustments are capped at three percent and are indexed by the ENR 20-Cities Average
lndex.
3. The financial model includes the planned rate rollback to 2016 rates in accordance with
Resolution 2017-23. The rate rollback will include the proposed rate increases in 2019 and
2020 and will reduce water rates by over eight percent when it takes effect on January 1,2021.
4. Capital expenditures continue for the next four years of the Water Meter Program and include
instailation of meters at multi-family and non-residential customer locations.
APPROVED
Stephen Schwabauer, City Manager
K:VVP\UTILl TY RATES\W_\
^M2019
W_VVW Rate lncrease\CcPH_Rates.doc 3t1 3/201 I
Public Hearing to Cons¡der Adopting Resolution Setting Future Water, Waststrater, and Solid Waste Rate Schedules Pursuant to Proposit¡on 21I for Res¡dent¡al, Commerc¡al,
and lndustrial Customers
March 20, 2019
Page 2
5. Debt service payments for Surface Water Treatment Facility (SWTF) remain at approximately
$2.3 million per year.
6. New development revenues are planned to fund the Southwest Gateway Water Tank in Fiscal
Year2022123, ata costof $2.7 million.
7. Maintenance is scheduled for multiple wells in the system, amounting to approximately
$1.2 million.
Wastewater Financial Model
1. Financial assumptions presented on the final page were checked and reconfirmed against
actual numbers.
2. Annual adjustments are capped at three percent and are indexed by the ENR 20-Cities Average
lndex.
3. Wastewater main rehabilitation continues at an investment rate of approximately $2.0 million
every other year.
4. The 2003 Certificates of Participation debt service is paid off in the first year, amounting to
approximately $g.Z million.
5. Debt service payments for the improvements at lÂ/hite Slough Water Pollution Control Facility
WSWPCF) have been reduced to approximately $3.0 million per year, due to a refinancing of
the 2007 Certificates of Participation.6. New development revenue toward payment of WSWPGF debt service is assumed modest
($400,000 per year) to retain the utility's high bond rating.
7. Capital expenditures are planned, amounting to approximately $17.5 million, to expand the
recycled storage ponds and to reconstruct an existing electrical building and install coarse
screening facilities at WSWPCF.
8. Net available capital at the end of Fiscal Yea¡ 2022123 falls below the 50 percent reserve target,
but remains above a reserve of 25 percent. Nearly all new development revenues are planned
to be used to fund debt service.
Rate schedules and rates analysis information were supplied to the City Council at the January 15, 2019
Shirtsleeve Meeting. Proposition 218 protest hearing notíces and explanation letters, both
English and Spanish translations (Exhibit E), will be mailed 45 days prior to the proposed public hearing
to consider adopting the various rate schedules for the period from March 21,2019 through December
31 ,2023. The rate schedules set maximum limits on the various water, wastewater, and solid waste
rates for the next five years, and each year the City Council will be requested to approve the actual rates
to be implemented. At the public hearing on March 20,2A19, the Gity Council will be asked to receive
public comment and adopt resolutions setting future adjustments to water, wastewater, and solid waste
rates y4i![!þþ for the period between March 21 ,2019 through December 31 ,2023. The proposed rate
program includes a temporary water shortage rate surcharge for the water utility to offset the financial
impacts of mandatory water use restrictions resulting fiom drought conditions.
lf adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would be implemented
when the Gity Council declares a water shortage emergency, necessitating mandatory water use reductions
exceeding 10 percent. Water shortage rate surcharges have been designed such that customers meeting
water use reduction goals will have lower water bills than their normal water bills with normal water usage.
Temporary water shortage surcharges would be applied to the water usage rates (but not to monthly service
charges or flat water rates) and the amount of the surcharge would vary with the magnitude of required water
use reductions.
Solid Waste Rates
The existing franchise agreement (Agreement) with Central Valley Waste Services for Solid Waste
Collection, Recycling and Green Waste Collection, and Processing Services in the City of Lodi was
adopted in 2008 and extends until December 31 ,2023. An amendment to the Agreement was
KIWP\UT| LITY RATES\W WW\201 I W VVW Rate I ncrease\CoPH Rates.doc g13nu9
Publ¡c Hearing to Consider Adopt¡ng Resolution Setting Future Water, Wastewater, and Solid Waste Rate Schedules Pursuant to Propos¡tion 21 I for Resident¡al, Commerc¡al,
and lndustrial Customers
March 20, 2019
Page 3
approved in 2010 that gives the Gontractor the unilateral option to extend the Agreement until
December 31, 2030.
The Agreement states in Section 7b that rates for solid waste collection are to be adjusted annually on April 1 ,
of each anniversary of üre Agreement. Section 7c of the Agreement was amended by Proposition 218, which
was passed and authorized by Gity Gouncil at the May 7,2014 Public Hearing, and now allows Central Valley
Waste Services the option to either:
(a) adjust the rates in a percentage amount equal to 80 percent af the annual change in the Consumer
Price lndex (CPI) for all Urban Consumers for San Francisco-Oakland-San Jose, California Area, All
Items (1982-84=100) plus an adjustment for extraordinary increases in landfill fees, fuel and energy
costs, and changes in law up to 100 percent of the change in the CPl, or,
(b) 100 percent of the annual change in the CPI without the other adjustments but with a certification
that costs had increased by more than 100 percent of the change in the CPl.
Staffrecommends Council approve annual rate adjustments in accordance with the currentAgreementthrough
December 31 ,2023. Any increase greater than 100 percent of the CPI would require a separate Proposition 21 8
procedure and is subject to Gity Council approval.
A new category of solid waste rates to comply with Assembly Bill (AB) 1826 is added and titled, "Commercial
Organic Collection and Processing Services." These rates will apply to businesses that have four or more yards
of solid waste services. This rate schedule is provided in Exhibit F.
AB 1826 was passed in September 2014 to aid in meeting the statewide goal of diverting 75 percent of waste
from the landfill bV 202A. The law requires businesses, including state and local agencies with businesses that
generate certain amounts of organic waste per week, to have organic waste recycling programs on or after April
1 ,2016. Organic waste includes food waste, green waste, landscape and pruning waste, nonhazardous wood
waste, and food-soiled paper.
AB 1826 has phased thresholds to which agencies must have a program in place to comply with the law. The
City of Lodi did not have any qualiffing businesses until January 1 ,2019, when the threshold was reduced to
where agencies must have an organic waste recycling program in place to accommodate businesses generating
four or more cubic yards of solid waste per week. Currently, there are 457 commercial customers that meet the
mandatory organics recycling threshold on January 1,2019.
To prepare for implementing AB 1826 requirements, Central Valley Waste Services has purchased an organics
recycling truck and the carts and bins needed for initiating service. They also provided educational materials to
impacted businesses in October 2018, shared the draft organics recycling program with Cal Recycle, and is
currently preparing an education program for businesses pending CiS approvalof the rates and the program.
FISCAL IMPACT: lncreased revenues are required to properly fund capital maintenance to keep up
with cost of service increases and new state mandated costs.
FUNDING AVAILABLE: Not applicable
Charles E. Swimley Jr
Public Works Director
cEs/RAY/rdb
Attachmenls
K:$/VP\UTILITY RATES\W W\M2019 W WW Rate lncrease\CcPH Rates.doc 3/13t2419
Exhibit A
Programmed and lmplemented Rate Adjustments
Water
{1) Engineering News Record lndex Change
(2) Recommended by Staff
Programmed and lmplemented Rate Adjustments
Wastewater
(L) Engineering News Record lndex Change
(2) Recommended by Staff
Year Programmed lmplemented
20L4
zots
20L6
20L7
20L8
3.30 (1)
2.00 (t)
1.975 {1}
3.36 (1)
3.gg (1)
2.5Q!
2.00 (2)
t.g75tzt
3.00 (2)
0
Year Programmed lmplemented
20L4
20L5
zaL6
20L7
2AL8
2.6 (11
2.g0 (1)
2.70{tl
3.00
3.00
2.50 (2)
2.50 (2)
2.50 {2}
0
0
CrnroFLou
Water and Wastewater Rate Study
Einøl Report
March 6,2t19
tt
Tus Rpen GRoup, INc.
CITY oF LODI WeTgR AND WASTEWATER RATE STUDY
Table of Contents
SECTION I. EXECUTIVE SUMMARY..........
Intro duction and B ackgr ound.............
Financial Plans ønd Reaenue Needs..........
Proposed Water and Wastezoater Rates
Compørison of Proposed Rstes with Neighboring Commun:ities .......
Water Shartnge Finønciøl Annlysis øndWøter Shortøge Surcharges
Adop tin g P r op ase d Water ønd W østew ater Røtes .....
SECTION II. WATER AND WASTEWATER FINANCIAL PLANS .....................1.0
1
1
2
3
6
7
I
Fund Sttucture ønd Cøsh Flows.
F inøn ci øl P I øn A s sump ti ons
Finønciøl PIan Findings and Conclusions
Financial Plan Reoenue Re quirement Recommendøtions
Water Shortage Pinanciøl Analysis
SECTION III. WATER RATES 32
...,,'.',..1.0
...........12
...........18
...........22
...........26
Current Water Røtes...........
Continuing Transition to MeteredWøter Rntes ...
P r op ose d Multi-Y e ør Wøter Rste S che dule s... ..,....
Wøter Shortøge Rnte Surcharges
SECTION IV. WASTEWATER RATES
Cur r en t Was teut ater Røte s
Continuing Tr ansítion to Me tere d Wøstew ater Rates .................
P r op os e d MuIti-Y ear W ater Rate S che du\es...........
32
JJ
34
36
40
40
41
42
THE REED GRcIup, INc
CITY oF LODI WATER AND WASTEWATER RATE STUDY
SECTION I. EXECUTIVE SUMMARY
INTRODUCTTON AND BACKGROUND
The City of Lodi retained The Reed Group, Inc. to prepare new ten-year water and
wastewater system financial plans and to update the water and wastewater rates for the
City's two utilities. The purpose of the study was to ensure that water and wastewater rates
are sufficient to meet each utility's financial and service obligations for ongoing operation
and maintenance, debt service, and capital improvements while maintaining prudent
reserves. The last acljustrnent to the water rates occurred in2017, and wastewater rates were
last adjustecl in 20'J.6.
The scope of services for the water and wastewater rate study included the following:
Review financial goals and policy objectives related to the water and wastewater
utilities
Review the current budgets, existing debt obligations, and capital improvement
plans
Prepare ten-year financial plans and determine annual water and wastewater
rate revenue requirements for the utilibies
Review the current water and wastewater rate strucfures, as well as the
continuing tra¡sition from flat rates to metered rates
Verify that water and wastewater rate recomrnendations meet the legal
requirements for cost of servíce, and prepare multi-year rate plans to meet the
anticipated reverlue needs of each utility for up to five years
Evaluate the potential financial implications of water shortages, develop a water
shortage strategy to mitigate financial deficits created by shortage conditions,
and propose temporary water shortage rate surcharges as part of the strategy
Present dr#t study findings and recommendations to the City Council during a
shirtsleeve meeting
Prepare a water and wastewater rate study report (this report) to document the
analyses performed during the study
Present study recommendations to the City Council during a regular meeting,
ancl assist the City in prepaling a notice of public hearing regarding the proposed
water and wastewater rates
Present final water and wastewater rate recommendations during a public
hearing to adopt new rates.
The purpose of this report is to describe the analyses performed, present the financial
plans for the utilities, provide the basis and rationale for rate adjustments, and sumrnarize
fÏndings and recommendations regarding the water and wastewater rates.
a
a
a
a
a
a
a
a
THË REED GROUP, INC DRAFT 1.13/201.9 PAGE 1
CITY oF LODI WATER AND WASTEWATER RATE STUDY
FINANCIAL PLANS AND REVENUE NEEDS
Since 2012, the City has worked diligentþ to linrit annual water and wastewater rate
adjustments to be less than or equal to the rate of annual inflation. In addition, in
anticipation of the completion of the water meter retrofit program, 1r.2017 the City Council
approved a reduction of water rates in fanu ary 2021, to the levels that existing in 2016. While
the meter retrofit program will continue until aboul2023, the rate rollback is still planned.
Maintaining the very limited increases in water and wastewater rates has been
challenging for the City for multiple reasons. First the conversion of customers from flat
water rates to meterecl rates has resulted in a greater reduction in water demand than hacl
been previously anticipated. Second, the statewide drought from a few years ago also
contributed to reduced water sales and a decline in anticipatecl revenues. In additiorç water
demand has not rebounded to pre-drought levels thereby continuing to limit revenues.
Third, growth in operating costs and capital program neecls continue to apply filrancial
pressure on the utilities. And fourth, the transition to metered bi[ing is creating additional
revenue volatility for both the water and wastewater utilities thereby increasing the neecl for
maintaining prudent financial reseryes. Constant pressure to keep water and wastewater
rates low can result in a chronic underfunding of infrastructure rehabilitation and upgrade
needs and create unnecessary financial risk. This water and wastewater rate study has
focused on working to maintain limited increases to the City's water and wastewater rates
while also limiting financial risk. Input from the City's Public Works staff has been
instrumental in achieving these results.
At present, the City's water utility generates sufficient revenue to meet ongoing
operation and maintenance costs and debt service obligations, as well as most capital
improvement needs. However, in years with high capital program expenditures the water
ufility can experience significant reductions in the level of financial reserves. While previous
financial plaruring and rate studies have recommended a 25 percent Operating Reserve for
the water utility, the continuing transition to metered billing and the significant variability
of the annual capital progrãm expenditures suggests the need to increase the target for the
Operating Reserve.
At present the City's wastewater utility also generates sufficient revenue to meet
ongoing operation and maintenance costs and debt service obligations, as well as most
capital improvement needs. And, tike the water utility, in years with high capital program
expenditures the wastewater utility experiences significant reductions in the level of
financial reserves. lzVhile previous financial planning and rate studies recommendecl a 25
percent Operating Reserve for the wastewater utilþ, the continue transition to metered
billing and the significant variability arurual capital program expenditures suggests the need
to increase the target for the Operating Reserve.
In addition to meeting fhe financial neecls of the utilities with respect to operating and
maintenance costs, debt service obligations, and capital program needs, it is recommended
that the City increase the target for a prudent financial Operating Reserve from 25 percent
of annual operating and maintenance costs, including debt service, to 50 percent of these
annual costs. This change is indicated due to the increased revenue volatility associated with
metered rates and bilting, as well as the variable costs associatecl with water and wastewater
THE REED GnoUT, Iuc DRAFT 1./3/ 201.e PAGE 2
CITY oF LoDI Waren AND WASTEWATER RATE SrUDY
capital improvement programs. Reaching ancl maintaining the higher reserve levels cannot
be achieved immediateþ but can be met by the end of the lO-yeal planning period.
In light of the current and estimated future financial needs of the water and wastewater
utilities, it is recommended that the City continue to annually adjust its water and
wastewater rates to: (1) ensure continued financial support for ongoing operation and
maintena¡ce costs, inclucling debt repayment, (2) provide adequate funcling for the water
and wastewater capital irnprovement prograrns/ and (3) by the end of the planning period
establish and then maintain increased Operating Reserves of at least 50 percent of annual
operating and maintenance costs, including debt service.
In addition to adjusting the overall level of water and wastewater rates to meet current
and estimated future revenue needs, it is recommended that the Cify adopt temporary water
shortage surcharges, which would be implemented in the event of a future drought or other
water supply shortage. These surcharges would only be implemented when water use
restrictions ale necessary and mandated by the City Council. The temporary surcharges, as
presented herein, will also help to reduce financial risk for the benefit of both the City's water
utility and customers.
The water and wastewater financiaÌ plan models reflect information, assumptions, and
estimates that are believed reasonable at the present time. However, conditions change. It
is recommended that the City review the financial condition of the water and wastewater
utilities annually as part of the budget process and perform a more comprehensive financial
plan and rate update study every 3 to 5 years, unless otherrn¡ise needed sooner. The financial
analyses presented in this report indicate that the revenues generated by the current and
proposed water and wastewater rates would not exceecl the cost of providing service,
including maintaining prudent reserves for specified purposes.
Details of financial plan analyses, deterrnination of the annual water and wastewater rate
revenue requirements, and analysis supporting drought-related temporary water shortage
surcharges are presented in Section II of this report.
PROPOSED WATER AND WASTEWATER RATES
Exhibits I-1 and I-2 present the proposed water and wastewater rate schedules,
respectively, each spannìng a five-year period. It is recommended that the initial water rate
adjusknents be implemented effective in Aptrl 2019, with subsequent adjustrnents
implemented each January, horn 2020 through 2023. It is recommended that the initial
wastewater rate adjustments be implemented effective in July 2019, with subsequent
adjustments implemented eachJuly, from 2020 through 2023.
No changes to the water or wastewater rate structures are proposecl at the present time.
A cursory review of both strllctures indicates that they continue to generally function as
intendecl ancl reflect a proportionate allocation of costs to each customer consistent with legal
requirements. In addition, the City Council's decision to rollback water rates to the schedule
that existed in2076 would be complicated by any rate structure change at the present time.
Also, the City is still in the midst of its transition from flat rates to metered rates. It is
recommended that once all water meters are installed the City then undertake a
comprehensive cost of service study ar-rd consider rate structure refinements at that point in
time.
THE REED GROUP, INC DRAFT 113/201.9 PAGE 3
CITY oF LODI WATER AND WASTEWATER RATE STUDY
Exhibit l-1
City of todi
Current and Proposed Maximum Water Rate Schedules
Current (l) Apr.2019 (2) Jan.2O2O (31 len.zozl (1) Jan.2022l3l Jan.2023 (31
Rate Adjustment -->
Monthly Flat Water Rates {Unmetered}
Single Family Residential
1 bedroom S gZ.Sq S
2 bedroom 5 39.44 S' 3 bedroom $ 47.27 S
: 4 bedroom 5 56.79 S
: 5 bedroom 5 SA.ff 5
: Multi-tamily Units
L bedroom S 28.19 S
2 bedroom S e¡.sr S
3 bedroom S 40.58 5
4 bedroom S 48.68 S
Non-Residential
Per ESFU 5 39.44 S
Monthly Service Charges (Metered)
33.79 s
40.s8 s
48.64 s
s8.44 $
70.09 5
3r..88 s
38.29 s
4s.89 s
s5.14 s
66.13 s
33.83
40.62
48.69
58.49
70.rs
2.916
22.sO
35.34
67.L4
105.49
195.00
322.83
642.t3
L,Ozs.4s
I,472.77
3.096
34.80 s
41.80 5
s0.10 5
60.19 s
72.L9 $
2s.88 5
3s.83 5
43.01 s
s1.s9 5
s 23.18 5S 36.40 5$ 6e.r.s 5s 108.65 ss 200.8s 5s 332.s1 ss 661..3s 5
s 1,0s6.21 s
$ 1,s16.ss 5
-a,4%
2r.23
33.34
63.34
99.53
183.98
304.s9
605.85
967.s2
1,389.57
32.84 s
39.44 5
47.27 5
s6.79 $
68.11 s
t.o%LV"
zg,ot s
34.79 s
4r.76 s
s0.09 $
27.37 5
32.82 s
39.40 5
47.26 s
28.t9 5
33.80 5
40.s8 s
48.68 s
29.O4
34.8L
41".80
50.14
40.s8s 41.805 38.29$ 39.44s 40.62
Water Usage Rates (Meteredl -- S/CCF
Single Family Res¡dential
Tier 1 (0-10 cCF) 5
Tier 2 (11-s0 CCF) S
Tier 3 (> 50 ccF) 5
Multi-Family 5
Non-Residential S
$ 21.87
$ Ec.s¿
5 6s.24
S 102.52
5 189.s0
5 313.73
S 624.03
s 996.ss
5 t,4n.26
o.e7 s
t.zg s
1.60 s
1.1s s
1.1s $
1.oo s
1.33 s
1.6s s
1.18 s
1.18 $
1.00
1-.33
1.66
1.18
1.18
Up to 3/4" meter
L" meter
L 1/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
1"0" meter
s 21.87 s5 ¡c.E+ $5 6s.2s 5S r.o2.s2 Ss 18s.so s
5 313.73 S
5 624.03 Ss se6.ss s
5 t,431.26 S
$ 22.s3
$ ¡s.¡z
5 67.20
S 105.60
$ 19s.19
s 323.14
$ 642.7s
5 L,026.45
5 1,474.20
s
$
5
5
s
o.97
1..29
1.61
1,15
L.15
0.94
1.-25
1.56
L.12
L.t2
s
s
s
s
s
1.03
r.37
r.70
L.22
t.22
s
s
s
5
s
Notes
(1) Water rates were last adjusted in 20L7 based on Resolut¡on 2ot7-23, which includes a rate rollback in
, January 2021- to the water rates that were in effect ìn 2016.
. (2) Annual changeinENR20-CitiesConstructionCostlndexfor20lS(basedonDec.2017toDec.2018).
: (3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.O% cap.
Proposed wateÍ rates continue to include flat rates for unmetered customers and fixed
monthly service charges based on the size of the water meter, a three-tier water usage rate
structure for single family residential customers, and a uniform water usage rate for multi-
familp non-residential accounts with water meters.
THE REED GRour, Iilc DRAFT 1/3/201e PAGE 4
CITY oF LODI WATER AND WASTEwATER RATE STUDY
Exhibit l-2
City of Lodi
Current and Proposed Maxímum Wastewater Rate Schedules
Current (1)Juf.2019 l2l tul.2o2o 13) 'lu|.2021 (3ì Jul. 2ozzlsl Ju|.2023 {31
Rate Ad¡ustments --> 2.9%
. Monthly Flat Wâter Rates (Unmetered)
Single Family and Multì-Family Residential Dwelling Units
27.90 s
37.20 s
46.49 s
s5.7s s
6s.09 $
29.s7 s
3e.43 s
49.28 s
se.13 s
68.99 $
30.46 s
40.61- s
s0.76 s
6o.so s
71.06 s
3.0%
32.31
43.08
53.85
64.67
75.39
s 29.42
S 47.3s
5 gr.se
$ 143.99
S 269.04
S 446.49
$ 889.79
$ !,42!.94
3.ov,3.0%3.v/6
28.56
46.07
88.89
139.80
26r.20
433.49
863.87
380.52
1 bedroom
2 bedroom
3 bedroom
4 bedroom
5 bedroom
Mobile Homes
Any Size
Schools
Per SSU (18 students = L SSU)
Non-Residential
Per SFU
Monthly Service Charges (Metered)
Up to 3/4" meter
r 1" meter
1 1/2" meter
2" meter
I 3" meter
, 4" meter
: 6" meter
: 8" meter
' Wastewater Usage Rates {Metered)
: All Customers, Except High strength
Usage Rate ($/ccF of water use)
High Strength Users
Flow (per MG annually)
BOD {per 1,000 lbs annually)
SS {per 1,000 lbs annuallV)
28.71 s
38.28 s
47.84 s
s7.41 s
66.98 s
31.37 $
4L.83 $
52.28 s
62.73 s
73.L9 s
s
Þ
$
s
s
s
s
)
$
$
s
s
s
s
s
s
27.e0 5 28.71 5 2e.s7 S :0.¿0 S 31.37 S 32.31
27.90 5 28.71, S ZS.SZ S 30.46 S 31.37 S 32.31
37.20 s 38.28 s 3s.43 s 40.51 s 41.83 s 43.08
25.40
40.92
79.06
124.33
232.29
385.52
768.28
1,227.76
s 26.14
s 42.11S sr.ss
5 727.s4
5 z:g.o:
S 396.70
5 790.s6
5 1,263.37
S 26.92
s 43.37
S a:.zg
s 131.78
S z¿e.zo
S 408.60
S 814.28
S 7,301,27
5 27.73
5 44.67
5 ao.¡o
S 13s.73
S 2s3.s9
S 420.86
S 838.71
S 1,340.31
s
s
s
5
s
$
s
S1,
s z.¡g 5 z.st s 3.06 $ s.rs s s.z¿ s s.s¿
S 3,730.00
S 616.00
S 385.00
S 3,e3s.17
S 633,86
$ 396.17
953.32
652.88
408.06
S 4,o7L.92
5 672.47
$ 420.30
194.08
692.64
432.9I
S 4,319.90
5 713.42
S 445.90
s3,
s
s
$4
s
s
Notes:
(1) Wastewater rates were last adusted in 2016 based on Resolut¡on 2016-109.
, (Z)AnnualchangeinENR20-CitiesConstructionCostlndexfor2018(basedonDec.2017toDec.2018).
' (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap.
Proposed wastewater rates continue to include flat rates for unmetered customers and
fixed monthly service charges based on the size of the water meter and a uniform wastewater
usage rate for single Íarll';Jy, multi-family, and non-residential accounts with water meters.
High strength accounts will continue to be subject to sewer service charges based on
wastewater flow as well as loading characteristics of tlÌefu wastewater.
Additional information on the current water and wastewater rate structures and
proposecl schedules for the next five years are presented in Section III of this report.
The combined effect of proposed water and wastewater rate changes for 2019 is an
estimated increase in the typical metered monthly single family water arrd wastewater bill
THE REED GROUP, INC DRAFT 7/3/201e PAGE 5
CITY oF LODI WATER AND WASTEWATER RATE STUDY
from $89.43 to $92.02, for an increase of $2.59 or 2.9 percent. Because both water and
wastewater rates are proposed to increase by 2.9 percent and no rate structure changes are
proposed, all combined water and wastewater bills will increase by 2.9 ¡rercent, all other
factors remaining equal.
COMPARTSON OF PROPOSED RATES WITH NEIGHBORING COMMUNITTES
A typical monthly water and wastewater bill for single family residential customers with
metered rates in Lodi is currendy and will continue to be lower than bills for comparable
customers in most neighboring communities. Typical bills for a metered single family
customer in Lodi is compared with water and wastewater bills, based on current rates in
neighboring communities in Exhibit I-3.
Exhlblt l-3
flty of Lodi
Comparison of Typlcal Monthly weter/Westewater Bills
with Neighlpriæ Communities (1)
wastewat€f Total
Water Bill Biil
City of Tracy
City of Mantecâ
City of Lodi - ClJRRENT
City of Lod¡ - PROPoSED
City of Lod¡ - 2OzL (21
City of Galt
City of Stockton
Oty of Lathrop
s
s
5
s
s
5
s
s
32.80 5
32.60 s
38.02 5
39.1s s
36.88 s
33.70 s
68.7s $
90.s3 s
34.00 $
43.30 s
51,41 $
52.87 s
s5.08 s
63.ls 5
44.16 $
7s.00 s
66.80
75.90
89.43
92.O2
92.96
96.85
rr7.9r
16s.93
$180
$reo
$rqo
$1zo
$10o
$ao
$60
$40
$20
$-
¡ wàter B¡ll
r waftewater Bill
City of
Stockton
City of Trãcy City of
Mentece
C¡ty of Lod¡
CURRENT
City of
lathrop
Clty of todi - City of todi - City of Galt
PROPOSED 2O2Ll2l
Based on metered water rates w¡th 15 CCF of average monthly weter usage and 9 CCF of monthly w¡nter water usage
(for wastewater bill calculations), and a 3/4" residentiál meter.
I (2) lncludes rollbâck of water rates to 2016 schedule previously approved by the Cty Council.
THE REED Gnour, INc DRAFT 1./3/201.e Pecr 6
CITY OF LODI WATER AND WASTEWATER RATE STUDY
WATER SHORTAGE FINANCIAL ANALYSIS AND WATER SHORTAGE SURCHARGES
The water and wastewater rate study also inclucled an analysis of the financial impacts
associated with drought and reduced water sales. As clrought conditions worsened ir.2015,
the Governor declared a statewide water emergency and ordered urban water agencies to
reduce water use by 25 percent. In implementing the Governor's Executive Order, the
SWRCB required the City of Lodi to reduce water use by 20 percent relative to 20L3 water
use. The City, like other communities in the state, responded by requiring customers to
reduce water usage and implementing restrictions on water use.
The City, the region, and the State recently emerged from the multi-year drought.
However, the City is concerned about potential financial vulnerability in the event of a future
drought, especially a multi-year drought. The financial analyses in this report support the
development of temporary water shortage rate surcharges that would be implemented
cluring periods of mandatory water use reductions, as declared by the City Council.
Water shortage conditiorrs car-r result in (1) reduced water sales, (2) reduced water supply
purchase and pumping costs, (3) increased groundwater production costsl, and (a) increased
water conservation education and assistance costs. The net effect of these impacts can create
a financial deficit during periods of water shortage (i.e., revenue will decline more tha¡ the
decline in expenses).
To counter the financiaì impact of water shortage, a multi-prong strategy is proposed
that includes (1) utilizil'rg a portion of available operating reserves to offset the financial
deficit created by reduced water sales, and (2) adopting and implementing temporary water
shortage rate surcharges to generate supplemental revenue when mandatory use restrictions
are necessary, and (3) in the most severe conditions defer capital program expenditures to
preserve cash. This strategy, including the temporary water shortage rate surcharges,
should be incorporated into the City's water shortage contingency plans.
Proposed temporary water shortage rate surcharges would be implemented whenever
the City Council declares a water shortage emergency requiring mandatory water use
reductions. The temporary water shortage rate surcharges would be applied to water usage
rates þut not to monthly service charges or flat water rates). The temporary sulcharges
would mean that both the water utility's water sy$tem reseryes and customers would bear
a proportionate share of the financial burden created by water shortage. The water
shortage rate surcharges have been designed such that customers meeting water use
reduction goals will have lower water bills than their normal water bills. Customers that do
not meet water use reduction goals may have higher water bills, as illustrated in Exhibit III-
5 in Section IiI of thìs report.
Exhibit I-4 presents the proposed temporary water shortage rate surcharges, expressed
as a percentage increase to the normal water u,sage rates. The amount of increase depends
on the level of water use reduction goals. It is expressed as a percentage so that it can be
applied to any future water usage rate schedule. The specific râtes shown in Exhibit I-4 are
an application of the temporary water shortage surcharge percentages to the water rates
I The CiÇ has the ability to shift its water supply mix to increase reliance on groundwater during periods of
shortage. This helps the City meet water supply needs.
THE REED GnouT, INC DRAFT 1"/3/201"9 PAGE 7
CITY oF LODI WATER AND WASTEWATER RETE STUOY
proposed for April 2019. As an example, with a water use reduction goal of up to 20 percent
(Minor Shortage), a 5 percent water shortage rate surcharge would temporarily increase the
Tier 1 residential water usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05
per CCF). Monthly service charges and flat rates for unmetered customers would be
unaffected by the imposition of the temporary water shortage surcharges.
Details of the water shortage financial analysis are presented in Section tr of this report
and proposed temporary water shortage surcharges are presented in Section III of this
report. That section also includes information on how customers' bills would be affected by
the proposed surcharges, both for customers meeting water use reduction goals, as well as
those that do not.
Exh¡bit l-4
Oty of Lodl
Pronosed Temoorarv Water Shortage Rate Surcharges
Normal
Supply
Cond¡tioírs
Potent¡al
Shortage
Minor
Shortage
(Mandatoryl
Moderate
Shortage
(Mardatoryl
Severe
Shortage
{Mandatory)
Cdtical
shonege
(Mandatoryl
Use Reduction Goal -->
Temp. Wãter Shortage Surcharge {2}
Monthly Seru¡ce Chotges
Up to 3/4" meter
1" meter
1 L/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
L0" meter
Watet Usoge Rotes (S/CcFt (i)
Single Family Residential
Tier 1 (0-10 CCF)
T¡er 2 (11-50 CCFI
Tier 3 (> 50 CCF)
Multi-Family
Non-Residential
20% to 30%
LlJ%
30%to50%
L5%
> SOYo
2W6
None
None
5%toLO%
None
LO%tozO%
5%
S z2.sos 3s.34
5 at,u
5 105.49
5 195.00
5 322.83
5 642.13
5 r,ozs.+s
5 t,ctz.tt
No Changes to Servicè Charges
s
$
s
s
1.oo 5
1.33 s
1-.6s s
1.18 5
1,18 s
1.00 s
1.33 s
1.6s s
1.18 s
1.18 s
1.15 5
1.s3 s
1.90 5
1.36 s
1,36 $
L.20
1.60
1.98
L.42
L.42
1.0s s
1.40 s
1.73 5
r,z4 $
r.zq S
1.10 S
1.46 $
1.82 s
1.30 5
1.30 s
Notes:
(1) ThetemporarywatershortageratesurchargepercentagesareshownappliedtotheproposedwaterusageratesforApril20lg
forìllustrativêpurposes. Thepercentageswouldbeappliedtoanythen-currentwaterusagerateswhenimplementedby
declaratìon of a water shortage by the City Council.
(2) The temporary water shortage rate surcharge woud be an ìncrêmental (percentaBe) increase in the water usage rates, but woull
not be appl¡ed to monthly serv¡ce charges or to any flât water rates for unmetered customers.
(3) The water usage rates shown for Minor through Critical shortage conditions incorporãte the temporary water shortage rate
surcharges.
THE REED Gnoup, INc DRAFT 1/3/201"e PAGE 8
CITY oF LoDI WATER AND WASTEWATER RATE STUDY
ADOPTÏNG PROPOSED WATER ANDWASTEWATER RATES
In order to adopt the proposed multi-year water and wastewater rate plans, as well as
the proposed water shortage rate surcharges the City will need to follow the requirements
contained in Article XIII D of the California Constitution (Proposition 218). This includes a
Notice of Public Hearing to be mailed to all affected property owners and customers at least
45 days prior to a public healing. It is recommended that the City combine the adoption of
the water and wastewater multi-year rate plans and the temporary water shortage rate
surcharges into a single public notice and rate hearing process. This will save the City both
time and expenses.
THE REED GROUP, INC.DRAFT 1./3/201.9 PAGE 9
Crrv or Lou WATER AND WASTEWATER RATE STUDY
SECTION II. WATER AND WASTEWATER FINANCIAL PLANS
This section of the report describes the financial plans and related recommendations for
the City's water and wastewater utilities. The ten-year financial plans are used to determine
annual water and wastewater rate revenue requirements. The annual rate revenue
requirement is the amount of revenue needed from water or wastewater rates to cover
planned operating, maintenance, debt service, and capital program costs with consideration
of other revenues and financial reserves.
FUND STRUCTURE AND CASHFLOWS
The financial plans are annual cash flow models and represent updatecl versions of the
financial plan models that the City has successfully utilized for the past ten years. As a cash
flow model, it differs from standard accounting income statements, and balance sheets. The
financial plans model sources and uses of funds into, out ol and between the various funds
and reserves of both the water and wastewater utilities.
The financial plan models are based on the fund structures currentþ used by the City
and incorporate proposed reserve policies for specified purposes. This structure was
cliscussed with staff, with concurrence that it provides a helpful fi'amework for evaluating
the financial needs of each utility and for ciearly demonstrating how operating and
maintenance costs, debt service obligations, and capital prograrn needs are addressed. The
proposed reserve structure includes an Operating Reserve within each of the Operating
Funds (Funds 560 and 530), as well as Capital Furrds (Fund 561 and 531) for the purpose of
meeting water and wastewater system capital improvement needs of the capitai program
and Impact Mitigation Fee Funds (Fund 562 and 533/535) that account for revenue
associated with new development and capital projects neeclecl to provide capacity for that
development. Exhibit II-L includes schematic diagrams of the funds/reserves and major
cash flows associated with the two financial plan models.
An understanding of the fund/reserve strucfure is helpful in understanding the financial
plan worksheets that model estimated arrrual cash flows through the water and wastewater
utility from one year to the next. The fund/reserve structure is comprised of:
Water ønìIWøsteutøter OperøtingFunds þ6A ønil530) - The Operating Fund is
the primary fund within each utility. Most of the water/wastewater system's
revenues, including user rate revenues, flow into the Operating Fund and all
operating and maintenance costs, including debt service payments, are paid out
of this fund. Funds are also transferred from the Operating Fund to the Capital
Fund to pay for capital projects of the capital improvement program on a pay-as-
you-go basis.
o Opernting Reseraes - Previous financial plans included. a 25 percent
Operating Reserve. It is recommended that the City establish and
maintain Water and Wastewater Operating Reserves equal to 50 percent
of annual operating and maintenance costs, including debt service, for
both of the utfüties. The purpose of the Operating Reserve is to provide
working capital and funds for unplanned operating and maintenance
expenditures or unplanned reductions in revenue. The balance in the
THE REED GnouT, INc.DRAFT 1./3/201.9 Pecn 10
CITY oF LODI WeTsn AND WASTEWATER RATE STUDY
Water Operating Fund at the end of FY 17-18 was about $3,749,000, or
about $1,265,000 below the recommended 50 percent target Operating
Reserve. The balance in the Wastewater Operating Fund at the end of FY
17-18 was about $15,31Q000, or about Û9,317,000 above the 50 percent
target Operating Reserve.
Exhiblt II-1
C¡ty of Lod¡
Plans -- Schematic of Cash Flowsr
operat¡ng
Reserve
Rate
Stabll¡zâtlon
Fund (534)
(wwonly)
Debt Serv¡ce
o&M
Expenses
Replacement,
Rehab¡l¡tat¡on,
and Upgrade
Projects
fnterêst
Earnings
Impact
Mitigation
Fees
Expansion
Projects
User Rate
Revenues
Other
Oper.
Revênue
o Aaailable Balance - The balance in the Operating Fund in excess of the 50
percent target arnount for the Operating Reserve is shown in the financial
plan as Available Balance. After all other obligations are met the
Available Balance js used to offset rate increases. The financial plan
models generally seek to reduce any Available Balance over time. A
negative value for the Available Fund Balance indicates shorffalls in
maintaining the recommended rninimum 50 percent Operating Reserve.
The high Available Balance in the Wastewater Operating Fund is not
excessive, but necessary to meet future capital program needs of the
utility.
THE REED GROUP, INC DRAFT 713/201.9 PAGE 11
CITY OF LODI WATER AND WASTEWATER RATE STUDY
a
a
Wøter and Wastewøter Cøpitøl Funils (561 ani1531) - The Capital Fund is usecl
to account for revenues and funds available for capital project expenditures
related to replacement, rehabilitation, and upgrade projects. Transfers from the
Operating Fund provide funds intended for these capital project purposes. The
financial plan models generally seek to maintain a zero or positive balance in the
Capital Funds while also covering the costs of plannecl capital improvement
projects. This is achieved through annual transfers of funds from the Operating
Fund to the Capital Fund of each utility.
Water ønd Wøstewøter lmpøct Mitigøtion Fee Eunds (562 ønil 533/535) - Tlne
Impact Mitigation Fee Funds are used to account for revenues and funcls
available for capital project expenclitures that provide new capacity to the water
and wastewater systerns. Impact mitigation fees, paid by new development, are
available to irnprove systern capacity and help meets the capacity needs of new
development. The wastewater utility maintains separate Impact Mitigation
Funds for wastewater and stormwater project purposes. A portion of wastewater
impact mitigation fee revenues is transferred from the Wastewater Impact
Mitigation Fee Fund to the Wastewater Operating Fund to help pay debt service.
This is consistent with the wastewater impact mitigation fee methodology and
the intended use of fee revenue.
Wastewater Røte Støbilizøtion Funil (534) - ïre wastewater utility also
maintains a Rate Stabilization Fund consistent with debt covenants. The Rate
Stabilization Fund currently maintains a balance of $500,000. It is available to
assist with meeting debt service coverage requirements, if necessary. Since its
incepfion, this fund has never been utilized.
FINANCIAL PLAN ASSUMPTIONS
The water and wastewater financial plans reflect the city's FY 18-19 budget and financial
conditions as of the beginning of the fucal year. The financial plans also reflect the City's
debt service obligations and capital improvement programs, as identified by City sfaff,
during the planning period that extencls through FY 29-30. The financial plans are based on
the best available information and reasonable assumptions; future estimates have been
reviewed witl-r staff and are believed to be reasonable.
Inllation Røfes - The financial plan analyses include general inflation at 3.0 percent
per year. The general inflation rate applies to all operating and maintenance costs
except water purchases from the Woodbridge Irrigation Diskict, which increases
at 2.0 percent per year. Capital proiect costs are escalated at 3.0 percent per year
to the year of construction. These inflation assumptions have been reviewed
with City staff and are reasonable for financiat planning purposes.
Interest Røtes - Interest earned on fund/reserve balances is estimated to be 3.0
percent per year, which is consistent with the current interest earnings of money
invested with the Local Agency ftrvestment Fund (LAIF). Interest calculations
are based on beginning-of-year balances. The City also pays interest on
outstanding long-term debt obligations. The interest payments on outstanding
debt are those contained in existing contracts and repayment schedules.
a
THE REËD Gnour, Iruc DRAFT 1/3/2t1e PAGE 12
CITY oF LODI WATER AND WASTEWATER RATE STUDY
a
Growth Projections - The financial plans assume the annual pace of new
development equivalent to approximately 1.0 percent of the ãitrgte tamity
customer base. The estimate is believed to be reasonable and has been reviewed
with City staff.
Wnter and Wøstewøter Impact Mitigøtion Fees - Water and wastewater impact
mitigation fees for FY 19-20 are based on fee amounts contained in a new fee
study. In future years, they are adjusted at the rate of construction inflation.
Estirnated annual impact mitigation fee revenues are based on the applicable fees
and the arnount of new development activity. Impact mitigation fee revenue
accrues to each lmpact Mitigation Fee Fund and is used to help fund planned
expansion capital improvement projects. Consistent with the City's impact
mitigation fee methodology, a portion of impact mitigation fee revenue may be
transferred each year to the Operating Fund help pay a portion of growth-related
clebt service obligations (including unmet past obligations).
Custonter Demand - The City was under state-mandated water use restrictions
during the recent drought. A slight rebound in water demand is expected in FY
L8-19 after which the average customer water demands are assumed to remain
constant. A full rebound to pre-drought water usage is not included due to
hardening of usage (i.e., permanent conservation measures implemented during
the drought) and anticipated new water conservation requirements from the
State. The assumptions used are believed reasonable and have been reviewed
with City staff. Changes in water demand also affect arurual wastewater flows
used in wastewater revenue analysis, though to a lesser clegree. Because
wastewater bills are determined based on prior year winter water u-sage
(wastewater average), the impact of the rebould in water demand is delayed in
wastewater billing. Also, winter water use (reflecting indoor water use) is
expected to rebound by a smaller amount, as most water conservation was
achievecl tluough recluctions in outdoor irrigation.
Aperation ßnd Mflintenønce Costs - The financial plan mocLel is basecl on current
operating and maintenance costs as reflected in the adopted FY 18-19 operating
buclget, with future estimates based on the inflation and glowth assumptions
described above. Assumptions were reviewed with and approved by City staff.
Long-Term Debt Obligntions - The City's water and wastewater utilities are
fortunate to have a limited amount of long-term debt. The only water system
debt obligation is related to a 2010 water bond. That bond issue included Build
America Bonds (BABs), which provided a significant interest rate subsidy from
the federal government. The net annual debt service for the water utility is
currently slightly less than $3.0 million, not considering the BABs subsidy that is
currently about $662,000 annually. The wastewater system's debt obligations
include certificates of participation (COPs) issued in 2004,2010, and 2016. The
2016 COPs were a refunding of the eligible portion of the 2007 COPs and took
aclvantage of lower interest rates. The total annual debt service for the
wastewater utility is also currently about $3.0 million. The water and wastewater
debt service obligations reflected in the financial plans are presented in Exhibits
II-2 and II-3, respectively. No new long-term debt is included in the financial
plan analyses.
a
a
THE REED GnouP, INC.DRAFT 7/3/2019 PAGE 13
n'.1o>r,-oUÊlnlnrrlc)oaznUÞFflË(,)t..)F¡\o2O7O WaEr Búd Series ÀPrinc¡pallnterestAnnuâl PeynentÊndingBalance2O7O Woter Bond Señes BPr¡ncipallnterestAnnual PaymentEndingBalånceTotal Annual Deh seruiceBAgs lnterest Subs¡dyI{êt Annuãl oebt Seru¡ceExhíbit ll-2city of todiWater System Debt Obligat¡onsFy17-18 FY1&19 Fv19-ã' Fy20-2t Ft2L-þ. FvX¿-23 FY2t24 FY2*-8 Ey2s-25 Fy26-2t Fy27-28 ÊY2a-29 rY2}!tOs 9s0,0o0 I 980,000 $ 1,0r.0,o00 s 1,040,000s 126,700 s 97,600 I 68,200 s 36,400$ 1,076,100 s r,077,600 I r,o78,2to s 1,076,4m5 3,o3o,0oo S 2,oso,ooo S 1,040,000 5 -5 S - S 5 - S1,07s,0o0 S1,115,000 S1",150,000 S1,190,000 S1,23s,000 51,28s,000 S1,340,000 51,39s,000 $1,4s0,000s1,891,ss6 91,891,ss6 S1,891,ss6 51,891,5s6 S1,891,s56 5r,æ7,656 5L,779,s2O 5r,777,259 S1,6s0,452 57,577,s72 SX,48-a,sOO S1,403,914 51,314,81ss1,891,ss6 $1,891,5s6 $1,891,s56 51,89!556 s2,966,556 s2,952,656 52,929,s2O 52,907,259 S2,88s,452 52,856,572 S2,829,s00 52,798,914 52,764,a7ss29,650,000 s29,650,000 s29,6s0,000 s29,6s0,000 s28,575,000 s27,460,000 526,310,000 s25,X20,000 s23,88s,000 $22,600,000 921,260,000 s19,865,000 5X8,4ls,000s2,967,6s6 s2B69,1s6 s2,969,755 s2,967,956 $2,965.ss6 s2852,6s5 52,929,920 52,W7,259 $2,æ5,4s2 12,8s6,s72 92,8[r9,s00 $2,758,914 $2,7U,8L5${662,04s)s(662,04s)s(662,045)s{662,04s)$(662,04s)5(643,17s)s(622,832)s(601,040)s(s77,6s8)s(ss0,0s0)5{s2r32s)s14e1,370)5(460,18s)$2,30s,611 s2,3O7ÃLr 92,307,7rr 52,30sr11 É2.304511 52309Ã7, S2,306,688 92,3ú,279 52,307,794 52,3O6,s2:¿ Ë2,308,17s 52,jlJ7,44 S2,3ft4,630FÚÞiÞãÞË4ÞzU=Þ(¡ÊltdãÊlrl4FÞF.lü1(¡Ëc
nFlrio.tI'lüCIFzc)Exhibit ll-3City of Lod¡Wastewater Svstem Debt OblìsationsFY 77-te FY 1¡-19 FY 19-20 FY20-21 FY 2t-22 çY 22-22 FY 2t-24 FY 2+25 FY 25.26 ÊY 2Ê27 EY 27-28 FY 2A-29 FY29-30Èts\(j)l.)Þf\ozø(n Wdstewater CC|PPrincipâllnterestAnnual PaymentEnd¡ñgBalahcem72 Wdstewatet COPPrinc¡pallnterestAnnual PaymentEnding Bålancem16 Wqstewdter COPPrincipallnterestAnnuâl PaymerìtÊndjngBalancesqR ??Ê)q$q9 116 < qR q?6ss(q* l?Â(gR ?26qR ??6q9 ??6s 2,o7o,ooo4q 16?5 98,326 S 98,326 S 98,326 S e8,326 S s8,326 S 98,326 S 98,326 52,779,163s 2,070,000 s2,070,000 s2,070,000 s2,070,000 s2,070,000 $2,070,000 s2,070,000 5 -5 7,47S,OOO S 1,s3s,000 S 1,600,000 5 1,660,000 S 1,72s,000 S 1,79s,000 5 1,88s,0ms 4743AA s 414,100 s 351,400 s 286,200 s 218,s00 s 139,125 $ +t,tZSs 1,949,300 s X,949,100 5 1,9s1,400 $ 1,946,200 s 1,943,s00 s 1934,125 s L,912,72ss 10,200,000 s 8,665,000 5 7,06s,000 s s,405,000 s 3,680,000 s 1,885,000 5 -S 5 110,000 S i.10,000 S 11s,000 S 12s,000 S 140.000 S 145,ooo S 43s,000 S2,070,000 52,!7s,0oo S1,06s,000 S1,120,000 91,180,000s849,150s849,1s0s846,9s0s843,6505839,0505834,0s0s827.0s0S819,800$798,0s0s694,ss0s585,8005s32,ss0s476,5sOs 849,150 s 959,150 5 es6.9s0 s 9s8,6s0 s 964,0s0 s 974,0s0 s 972,0s0 s1,2s4,800 s2,868,0s0 s2,869,ss0 51,6s0,800 $1,652,ss0 sX,6s6,ss0s 20,295,000 S20t185,000 520,075,000 519,960,000 $19,835,000 S19,695,000 S19,550,000 S19,115,000 S17,045,000 S14,870,000 S13,805,000 512,685,000 S11,505,000ãÞFll¡jnzUãÞ(,Flf¡tãÞ{l¡ln'{lrlÇnFìÞLJÊ(JÌ
CITY oF LODI WATER AND WASTEWATER RRTE STuuy
a CøpitøI Improuement Program - The water utilþ's capital improvement plarç as
developed by staff, includes multiple projects totaling about $30.1 million (in
current dollars) through FY 29-30 to be funded by the water utility. Planned
annual water system CIP expenclitures range from about $750,000 to about $7.50
million and average about $2.5 million. Exhibit II-4 graphically summarizes the
water CIP into broad categories of projects, which inclucle meters and mains,
surface water treatment facilities, groundwater wells, the DBCP prograrn¡
vehicles and equipment, and other facilities. A detailed table listing the timing
and estimated cost for each water capital improvement project is presented in
Exhibit II-5.
The wastewater utility's capital improvement plan, as developed by staff,
includes multiple projects totaling aboutfi72.2 million (in current dollars) during
this period to be funded by the wastewater utility. Planned annual wastewater
system CIP expenditures range from about $2.90 million to about $12-45 million
and average about $6.0 million. Exhibit II-6 graphically summarizes the
wastewater CIP into broad categories of projecß, which inciude the sewer
collection system, the wastewater treatment facility, the stormwater system, and
vehicles and equipment. A detailed tabie listing the timing and estimated cost
for each wastewater capital improvement project is presented in Exhibit II-7.
Exhibit ll-4
City of lodì
Water System Capital lmprovement Program (Current Dollarsl
il Meters and Mains
t Groundwater Wells
I Vehictes/Equ¡pment
Surface Water Treal. Fac¡|.
DBCP Program
,: Ctther Facilities
s8.000,00o
s7,0o0,000
56,fn0,000
Ss,ooo.ooo
$40(}0,000
s3,000,000
s2,000,000
$1,000,00o
s-
F\r 17.18 FY 18-19 FY 19.20 FY 20-21 F( 2r-27 FY Z2-2t FY 23-24 rY 24-?5 FY 25-26 ËY 26-27 tY 27-28 FY 28-29 Fy 29-30
THE REED Gnoup, IIvc DRAFT 1./3/201,e PAGE 16
nÊô-oÈF1'a¿FNllIUc)Fc3zc)Exhlblt ll.5ıty of LodiWater Svstem CãDitâl lmorovement Progrem lcurrent Dollars)Fy 1t-r8 Fy 18-19 FY 19-20 Fy2S21 Í',( 2t'22 Fy 22-¿? Fy 23-24 FY 2+2t F',t 25"26 FY 26-27 F\ 27-2A Fv 2A-29 FY 29-30**r*p-"*t*warer Meter/Mâin lNrãll. Project 53,7s9,5o2 So 55,98Û,000 S1,m0,0m 51,000,000 S0 S0 50 $0WaterTâps 516,728 S75,oo0 $7s,000 $75,û00 575,000 S75,o0o S7s,m0 575,000 575,000 575,000 575,000 575,000 575,000M¡scêllèneÞus Water M¡ins 50 S50,ooO 550,000 550,000 550,000 S50,o0o S50,0o0 5s0,000 5250,0û0 5500,000 S500,000 5500,000 5500,000water Meter ßeplaæmenr ProgÉm 11% per yr.l s0 s0 50 s0 s75,om s75,o0o s7s,0o0 s75,000 $75,000 s150,000 s150,000 s150,000 s150,000Public lmprovement Reiñbu6eme¡ts S0 50 50 S0 S0 S0 $0 S0 S0 $06AC & Meter Repl (DBCP) s0 s0 s3o0,00o 53OO,0OO $3O0,OOO S3OO,OO0 53m,0OO 5300,000 5300,000 $300.000 5300,000 S300,00O $300,0ooUFE.lÊ(,NÞrMeter Shop Designlconstrud¡onsouthwest c¿tewây Wãter TênkSWTF P5 GeneratorSWTF Membrane ReplacementSWTF Transmlss¡on Llne Erpânsloh Design/ConstrMSC security ahd BuildinB lmprovementsWell 24 -Pump Rehab/ReplàcementWell 7 "Pump Rehab/Ëlectric¿l UpgradeWel I 27 -6AC Treatment & Sta ndby GeneratorWell 22 -Pump Rehab/Repla.emêntWell 14 -Pump Rehab/ReplaceñentWell 16 -Pump Rehab/Electricâl UpgÊdeWell 17 -Pump ßehab/Electrical UptEdeWell 21 -Pump Rehâb/Electrìcal UpgÉdeWell 23 -Pump Rehab/Eledricâl UpgÞdeWell 25 -Pump Rehab/Êiedrical UpgEdeWell 15 -Pump Rehab/Electrical UpgEdeWell 9 -Pump Rehab/Electrical UpgrðdeWell 5 -Pump Rêh¿b/Elêctric¿l UpgrâdeWell 18 -Pump Rehâb/Eledricâl UpgÞdeVeh¡cles/Equ¡pmentlocldord Streel lm præme ntsWdl RehabilitationToþl Wale. Cåpthl Oülay 561lnflãted 9sWâter IMF 5625outhwest Gatew¿y Wêter fankToÞl Wâtêr IMF 562lnflâted $sToÞl Wåter CIP570,o0o57,37o,offi 57471,ffis1,370,000 s¿69s,000so5oSoSoso5o5oSo$o9o5o5o5o$o9osoS2oo,ooo5ososoS2.7oo,oooS0 52,700,000 S0$0 s3,039,000 s0s3,2so,0rx) $1,9sD,üxr sr"27s,o0D53,881,000 52,398,000 St61s,oo0Sso,oooS2oo,ooo91,79s,0&t gr,æ4,0m52,342,OAO 52,424,000s¿014,80052,789,æ0s15,800 5200.0ms0 s0s0 $0s0 50so so$o s3s,ooos6,338 516s,000s0 s17s,00oS0 STo,ooos0 $0sû s050 S0s0 $0s0 s0so $osr s8o,ooosû s0s0 s050 S0$0 s0s0 s0s750,000$166,000$o5oSososo5o5oStsoSoSosososo9oSososo5o5os300,0005o5o5oSoSoSo5950,000$o$os156,000$oSzoo,oooso$0So$o$o$os0S2,ooo,ooû5s00,000s050s0So50s0$oSos0SoS2oo ooosoSosoSoSoSl,ooo,ooo$osoSo50soSoSosososoSoSo$200,000$ososoSoSoSoSosoSo$ososo$osoSoSo$o$oso$o9oSo5oso5oSOSoSoSo9o5o5oSo5o$o5o5oSoSoso$o5oSoSo9o5o$o5oSo5o$o5o5o5o5o5170,0ü)SoS18s,oooãÞ-lLll/¿ÞzÞ(nÈl'rlèÊl/¿ÞÉlLllØFlcs200,000So$t$o5o$2m,0ûo$20,354 5120,000 S80,O0O 540,000 S5O,OOO 5s0,O0o S50,0O0 S5O,0o0 $s0,000 5s0,0005400,0009o5oss0,000S2oo,ooosso,o0o$200,000s3,A1Al22s3,8r.9,ooo$2,081,m0s2,208,000S1,9os,om Sr.Tso,ooo gTso,ooo$2,082,00û 51,970,000 5869,000s0 $05osoSo5oSoso5o5oSoSo$o$oso5o$oS3-a1a-722 S1-37o.om S7¿71.m 32.oa1-mo S1-ss-om S4.4so-m 3780.m0 S3.zso.om Sl-gsD.m 3l27s.mo 31.79s.0m S1.m.om SzJu.sosoÞC)rnÊ\
CITY oF LoDI WATER AND WASTEWATER ReTT S{uny
Exhlb¡t ll-6
qW of Lodi
Wastswðter System Cap¡tel lmproyement Prqråm (qrrGnt Dollarsl
$12,000,000
s10.{xr0,0oo
a Sewer Collection System
I Wasteffiter Treatm€nt Fæ¡l¡ty
I Vehicles/Equipment
$9flro,om
S6,000,ooo
$4ofþ,ooo
$2,ooo,ooo rl lll5-
FY 17-18 FY 18-19 FY 19-20 FY 20-21 Ft 2t-22 N 22-23 Ft 23-24 rV 2+25 Ft 25-26 Fy 26-27 Ft 27-2A W 2e-29 çtt 29-tO
FINANCIAL PLAN FINDTNGS AND CONCLUSIONS
Exhibit II-8 provicles the details of the water system financial plan model. Current water
rate and other operating revenues are adequate to cover current operating and maintenance
costs, as well as debt service payments. However, revenues are insufficient to support peak
years in the capital improvement program without depleting the Operating Reserve. The
primary challenge for the water utility is to provide sufficient funding for the capital
improvement program while also covering operating and maintenance costs and
maintaining an adequate Operating Reserve.
Exhibit II-9 graphically summarizes the annual revenues, expenses/ and year-end
balances of the Water Operating Fund (560) through the planning period. Both Exhibib II-
8 and II-9 reflect the proposed water rate adjustments for FY 18-19 through FY 22-23, as well
as estimates for future rate adiustments through FY 29-30. It is recommended that the City
seek to maintain an Operating Reserve equal to 50 percent of annual operating and
maintenance expenses including debt service. However, by limiting annual rate
adjustments to the rate of inflatioru this target reserve level will not be reached sustainably
until the end of the planning period. Also, ín FY 19-20 because of Phase 8 of the meter retrofit
program/ the Operating Reserve will dip below 25 percent. This is a lean financial picture
for the foreseeable future.
THE REED Gnoup, INc.DRAFT 1./3/201.e PAGE 18
Crrv op Lou WATER AND WASTEWATER RATE STUDY
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PAGE 19DRAFT 1/3/2A1.9THE REED GROUP, INC
Erôibit ll-8qty ofLodiWate. System tinancial PlanWAÍER OPERANÍ{G FUÍ\¡D (FUI{D 55O)Beg¡m¡nt g¡lanceOpeñt¡ng ñsenuesFIet Rãte RêænUeSeruice Chaße RewnueUs¿ge cherge Rewn!eBABs SubsidvMsael åneous Rewñuelnþre5t EãrningsTÉns, from Water lf\r{F Fu¡d for 6$ 3,6oo.oms 5,079.0005 43Æ,000s 56¿010$ 384,7cnS 158,om3.O%ss,299,0003,498,m05,e6,0004,713,ñO662,000377,300159,m0-&4%laô€ry52,300,2002,955,0005,570,0004905,00066¿0m3n3û69,0005 2,630,0@s s,575,0005 4845,000s 662,000$ 377,3û5 96,6m5 2,s,æos 6,000,000s 5,150,000s 643,200S 3n}oo$ 1@,Eoos'$ x,@,om5 os11,000$ s,t22,o65 62¿8m5 377,3m5 131,1005$ 495,ooos 6,900,000$ 6,414000S 6o1,moI 377300$ 185,300$5 7,19s,0m5 6,s3,00oS 511,1ûs 377,300$ 146,000s739¿ffi7,070,000550,Xæ377,3æ150,m07,941,úO7,626,ú04æ,20O377,300202,4017-18FY 1&ßRae Adj6freß ->2.9%April9 3,s97,764 S 3,226,236$ 3,s74ooos s,009,000t 5 +,+22,o23s 609,956$ 3s,?415 47,0053-gxlanuarytM 2.úÁ 2.Mlanuary lanuary January2.ú/rJanuafy2-MJanuary2.ú62.Mlanuery2.ry"ËEt¡lrnc)oczFÞFrl.lF¡(])N]Ê\os3,218,900 s3,661.100 s4,368,900 56,178,100 54,865,700 54p99,7æ 5S,9S,200 S6,3s9,000 56,747$0ôÊlo-ssss5$5ss5$-$7,595,000 5 7,æ3,0007,249,ô00 5 7,4s,0ñ521,300 s 49t4m3n3ú 5 377,3ú179,700 S 19o,8oo-Þ5s5s5fdal OpeËtiG ReenæropeGt¡ng ErpeÉes and TE6fe6Water AdministEt¡onWDWater PurchasesOÞeÉt¡ng lransfer Outhmåge to PropertvEledrcityWater DÌstributionS!rf¿ce Water Treatmed Éac¡l¡tyEledricityW¡ter CmemtionDts@Debt SedceTË¡sfer to Cap¡tal Fund lFund 561)Tdel Opér. ExFß6 a¡d Tþ6feßEndirB aalã*eOpectng ReseNe {50%)aEilable FundsDebtSenie Corer¿ge (min. 1.25)sr4,u6,7v sr4,228,740 514,97s,300 5X4538,300 314185,9@ 514,584,æ0 514,828,2m 914,972,600 515,199.000 S15,539,ffi 515,922,300 916,æ7,5m 516,652,900I r,412,5255 1,429,421s 820,560ss ss3,s425 312,188s 950,750s 12s3,6875 165,393t 83,884$ n,4L6s 2,967,6565 3,86€,33151,æ7,8AS !44a,4s!5 821,900S 4,oes 694,1005 292,920s 1,0s0,0æs 1,617.s90$ 15o,om5 147,44A5 67,ru5 2,969.156sx,225,59091,1ü3AOs 1,487,900s 846,600s 4,2oOS 71s,1oo$ 3o3,8ooS X,081,¡100s 1,66ô1005 15s,6oo$ 1s1.7ooS 69,600S 2,969,7s65 6,745,ß0S 1,768,s00S !sz8,4ooS 8z2,ooos 4,300s 736,6m$ 3ú,rm5 1,113,8005 L,7ß,7úS 16L4m5 1s6,1ooS 71,7m5 2,967,956$ 2,208,0æ51,e21,3æ$ 1,s7o,ooo$ 899200$ 4400s 758,600$ 326,900s L,L47,XØ$ 1,766,6d0S 167,Æ$ 160,7mS 73,9tr$ 2,966,ss65 2,082,m051,e75,90s 1,612,$01,951,5001,656,8m952,9004,6mæ4,7û3sl8mr,2L6,7N1,873,000ß0,1m170,10078,3m2,929,5201.988,9001,703,500981,5004,700828,700365,3001,253,000\924,500187,m0L1S,t0080,5002,907,2592,04,400 5 2,109,4ú 5 2,172,4OO1,751,500 $ 1,802,2m S 1,8544002,237,2æ 5 2,3O3,7OO1,908,0m 5 1,953,2001,ß4,5æ 51'L37,7OO925,1004500781,$0339,100!,LAr,ßOr,819,100t73,60016s,30076,LOO2,952,6561"970,@0æ9,0m 5 3,881,m01,010,9m4,800853,4m3?gjmr,290,2N1,985,7m194,2ú180,10083,0m2.8454522,3940æ5 1,041,200S 4,900s 879,200S 394,100s 1,32&900S 2,044,7æS 2o1,8oo$ 18s,3ooS 8s,6æS 2,856,s7251,61s,m05 L,O72,440$ s,oooS gos,soo5 4og,soos 1,358,7005 2,105,sûoS 2æ,700$ 190,7005 88,2005 2,829,5005,1m932,600425,5æ!,4916æ2,164,2N2!7,9û196,2æ90,9m2,19A,974$ s,200S 96o,4doS M2,!oos L4s1,6005 2,232,æ05 226,40I 20¿60$ 93,600I 2,764,8t5s 2,7A9,ûO5 1,142,OOO S 2A24,0æ513.æS,3s3 512,1ss,997 $17,914.0s6 $13,619,5s6 513,743,656 5ß,A76,4s6 513,019,02û ç!6,28/.,9s9 51s,064,952 S14s48,872 91s,ss3,s00 515,918,7!4 576,s72,3tss,014000 s5,465,000 5s,s8s,000 $s,706.000 5s,831,000 9s.9s3,000 55,ms,000 56,202,m0 s5 6,487,m5,606,000 5 6,747,0mã*ìF17ÞzUãÞ(rl-lãÞFl4'A)Þ'-lr¡tØËcU6,892,000${1264¡85s) S (166,021) 513,284,1s6) $(2,487,0s61 5(2,169,856} S(1,s84,o561 S 103,081 5{L336,259ì S{1,3392s2) S l4?6,nLl I {242000j S 786 S {63,61s)$ 2.4s5 2.2i S 2.465 2.zs 5 2.069 2.135 2.13$ 2.115 2.t2 5 2.18i z.t S 2.315 2.37warER cÂPlrÆ FUND (FUND 5êr)Beß¡mirg gãlãn.eR4enær ard TÞßfeE lnT€nsfer frcm Operâting FundTEn5fer frcm Water IMF FlndTdal Ræeru6 ând Tñ6reÉ lñGfital Èqril ExFrldtæscâpitâlPrcjecBTú.1 C¿ibl Èog. ExFñd,End¡rE BaleEes 9s,07s $ 144310 $-5SSSS5869,0m 9 3,881,m0 $ 2,398,000 S 1,615/0d' S 2þ42,OOO S 2,424pú ç 2;189,æ0-)-)-)-)-)-t6ms 19,200s 39,1m5 æ,m9 ß,200s 107,400s 133,300619,s00 5 644,s00 $ 670,5m 5 697,sú 5 725,7@ S 7s49ú 5 78s,400s 1868,331 S 1,225,590 S 6,745,000 $ 2,208,0m 5 2,082,0@ S 1"970,æ0 Ss 5 s sso,ooos 5 s - 5$3,858,33X SX,225,590 5¿695,000 S2,208,000 52,082,000 S1.970,000 S 869,000 53,881,m0 S2,398,0@ S1,615,000 t2,342,000 S2,424.0m 52,789,000s3,819,000 s1,370,000 s¿69s,000 $2,208,000 s2,082,000 5L,97o,@9 s 869,0û0 s3,881,m0 s2,398,0æ 51,61s,000 s2,!z,aao sz.n4,0û s2,789,000s3,819,000 $1,370,0m S7,695,000 s2,208,000 $2,082,000 S1,970,000 $ tr9,000 53,881,000 52,398,0æ 51,615,0m 52342,AOO 52A24p0A 52,789,æ0ø41n (s 7O2,8Ls S1,079,382 S1,55s,700 S1,181,200 5r,766,7Ø S2,39¿100 S 20,400 S 640,500 S1,304,2m SZ,O13,8OO SL771,7OO S3,s80,600 S4,4Z,g0OwÄftR HF FUNO (FUND sdl)B{¡ming Balãncelnterest EarningsW¡ter IMF Rewf,ue362,481416374I 46.700 s5 s2&soo $3t4m$ 53,m5 7L,8OOss0,100 5 572,400 S s9s,s005$Þnln1..)s362,481S476,3109575,500S585,500$625,4{05667¡00S620,1m5663,700S709,6m5757,ffiS808,9005862,3m59ß,700s 3.C39,000 5s9s 5 s 950,000 s - s - s3,03s,000 5 5 s - $ 5 - 5 Ss 8,267,f94 S 9.8'5,a7r S10,394,375 5rr,93r,679 513,468,050 Sr5,OA7,6a7 5ß,545,5OO S18,083,005 519,621,501 S2L,!S9,LsS 522,697.955 524,236,297 525,772,7079s0,000Wâter ìMF ProjeftTmnsfer to cap. Fund fo. Pro.jedsTd.l Wate.lMF ExFrd.End¡rg Ba¡efieOwed Flnd SSfor Debt seûice
ôFlorf,rroU-lFtññûo,tzÕExh¡bit ll-9City of LodiIJãtsl-ìF¡(r)l\)c)\oãÞËL1¡73ÞzÉãÞ(¡Êad€Fll|I7rÞtsiL1J(/)tsttL]l.)tJs25,000,000$zo,ooo,ooo$15,000,000s10,000,000S5,ooo,ooos-FY17-18 FY18-19 Fy19-20 FY20-2t F,t21,-22 FtZ2-23 Ff23-24 Fy2+25 F{25-26 P(26-27 FY27-28 P(28-29 FY29-30n Oper,& Ma¡nt. Costs- CurrentRevenuesummffi Debt service costs- Ending BalanceGp¡tal Prog. Transfer- - Targetoper. Reserve- Proposed RevenueS---- Min. Oper. Reserue1.6È¡.oß,friÀLorß I 10t2-ú*,'ürol¡.ffi*,l'ß'.ffir"9*¡r¡ffi-.¡
CITY oF LODI WATER AND WASTEwATER Rers Sruov
Exhibit II-L0 (on two pages) provides the details of the wastewater system financial plan
model. The wastewater utility differs from the water utility in that it currently has an
Operating Fulct balance that greatly exceeds the target Operating Reserve. FIowever, the
surplus will be needed to fund peak years of the wastewater capital improvement program.
By limiting annual rate adjustments to the rate of inflation the wastewater O¡rerating Reserve
wiil dip near or below the minimum 25 percent level at two points in time over the plarrning
period before recovering to the target 50 percent level.
Exhibit II-LL graphically summarizes the annual revenues, expenses, and year-encl
balances of the Wastewater Operating Fund (530) through the plannir-rg period. Both
Exhibits II-10 and II-11 reflect the proposed wastewater rate adjustments for trY L9-20
tluough FY 23-24, as well as estimates for future rate adjustments through FY 29-30. This
lean financial situation should be monitored closely particularly as the City reaches the peak
capital program expendihrre years about five years from now.
FINANCIAL PLAN REVENUE REQUIREMENT RECOMMENDATIONS
The water and wastewater financial plan models were developed in close consultation
with Public Works staff in an effort to limit annual rate adjushnents to the rate of inflation
as determined by changes in the ENR 20-cities construction cost index. Such rate
adjusknents have been the practice of the City for the past five years. The water system
financial plan also incorporates the rate rollback, as previously approved by the City Council
for January 202'1.. At that time, the water rates will be reduced to the levels that existed in
2016. While the rate rollback was intended to coincide with the completion of the meter
retrofit program, metering of multi-family apartment complexes and some commercial
accor¡nts will still remain at that time.
In summary, the five-year water and wastewater rate recommendations are to continue
to adjust water and wastewater rates annually based on changes in the ENR CCI. Because
of the timing of this study, the initial water rate adjustments are proposed for April 2019
followed by adjustrnents each |anuary from 2020 through 2023. Wastewater rate
acljustments would all occur in ]uly of each year from 2019 through 2023. Initial adjustments
should be 2.9 percent for both water and wastewater, based on the change in the ENR CCI
in 2018. Subsequent adjustments would be based on the annual change in the ENR CCI
subject to a 3.0 percent annual cap. Every rate adjustnent is needed in order to meet the
longer-term revenue needs of the utilities. That is, implementing a smaller increase than
proposed in any given year could contribute to a future need for rate adjustrnents that exceed
the rate of inflation. This is particularly true with the variability exhibited in the capital
improvernent programs for both the water and wastewater utilities.
'IHE REED CROUP, INC.DRAFT 1./3/201e PAGE22
'l4)oo4ocHzCJñPE*JIJ(tNExhibit il-10C¡ty ol tod¡Wãstewâter Svslem F¡nanc¡ål PlenFY 17-1E Fy 1919 ÍY L9-20 FY 20-21 F\ 2r-22 Fy 22"23 Fy 23.24 Fy 24-25 F't 25-26 F t 26-27 Fy 27"2a Fy 28.29 ty 29-30ôÈoFrlrioI ulyRate Ad¡ustñenb ->2.yÀJulv3,O%luly3.e,t.luly3.e/o$11,780,300 511,403,800 513,990,100 513,322,200 S9,69s,600 54,200,200 56,743,s00 57,990,200 S3,z7\,roo gs,86s,3oo g7,so¿9oo3.VAJ ulVt.vÁJuly7,571,700 S L,6!8,500r,219,7O0 5 L,2S6,3OO3.O%JulyS 2,405,400 S$ 8,626,300 55 8,507,000 S5 211,900 S55S 126,000 S5S$ 400,000 s5 1,666,600 55 1,294000 S$ 6,400 Ss s,2944O0 sS 72o,2oo Ss 94s,200 s5 867,200 SI 14,ooo S5S5 8&3oo S3,eÁJulv3.0%3.0%Ju yt.o%JulyWASiIEWAIEI OPÉÊATFI€ iUßP (T!¿fiD I?gJBeginnjhgBãlarce S f2,967,86A 515,365.382Operãting RevenuesFlat Râle RevenueSeilìce ChârBe RevenueUsage Charge RevenueMiscellaneous Re@ñueGÊnt Reven!elnterest Eârnìngsfrans. From/{To} wW Rate Stab.TÞhs. From WW IMF Fund for DS180,000224,O00Totêl OpeEtlilß ßevenws4,O7L,9æ5,576,6m5,215,0432O4,OO7&0,2822A5,L4A3,393,6006,343,6006,032,500211,9003s3,400400,0003,015,6006,889,0û06,637,700211 90034¿100400,0002,619,6ú2458,5007,267,4ú217p04419,7-04400,0002,698,2007,74A,7007,554,9002rL,9002,335,4008,313,5008,186,00027r,900290,900400,000'J.,239,D049,245,7ñ8,958,200211,900202,300400,0009,896,6009,430,2002LL,900239,7-O0400,000798,4002rr,90098,300400,000211,9002ZS,Zæ400,0003,297,9006,113,3005,796,900$ss)sss$Þ)Þs55s5s55ss$s$10,264,900s-S10,647,100510 180,700S 211,900sS 176,0005s 400,000511,044,0001,930,3001,500.1007,Offi6,137,O8834,9001,095,0001,004,60015,500101,300$s,ss$$s10,270,000)s5$s3,150,000399.700400,0006,2004,990,800678.800891,100817,400L3,4005 75,672,971, 518,758.100 $16,735,000 577,495,7OO 518,377,r"00 519,005,400 5L9,737,70O 520,276,600 52D,257,1æ 520,178,400 52A,773,500 521,615,700 S22,1s1,100ope6ting Expeßes ðrd TransfeßWastewater AdministÉt¡onOpeËting Transfer outDamåge to PÞpertywhitê slough wPcFEleddcityS¿nitãry Ststem MaintenanceStorm Drâinage Maìhtenahcelndustrlal System MaiftenanceWate/WâstewateÌ PeßonnelWatershed EducationDebt SeruiceTransfer to cap¡tal tund (Fund 531)WA5΀W_AÍER CA¡tÎÁl ÍUND {FUND 3¡{Beginning Bålance STEnsferfrom 0perating FundTrahsfer from WW IMF FundCapltal ProgÊm Erpe¡ditæsWastewãter capital outlayWastewater PlantTDtal Câpital Prog. Expend,EndirB Balðnae7,324,12A 5 7,397,!407,ña,27A 5 7,æ3,7702,46I3,424,O52629,474889,128565,9185,590!39,'1122,896,7761,345,7545,8004,434,54O603,06079r,730725,A9Or2,2001,439,000L,176,2005,9004567,800621,200815,700744,00012,5O0!,Æ!,7007,749,7OOo0o04,7O4,9OO639,800840,100770,5001¿8001,526,1007,ta4,2æ6,1004845,80O659,000865,200793,60013,1006,3005,!44,200699,200977,700841,90073,70O7,767,6001.372,8006,500s,616,400764,1001,002,600919,90014600ssss))5$555s555$5s55Þ5ss7,776,4ûr"332,8006,5005,453,100747,8ffi973,500893,10014,3001,820,2001,474,0006,7005,784,900747,000r,032,500947,4OA14,9005 1,874,s00s t,4s6,4005 6,800s 5,958,4Oo5 810,6005 1,063,4005 97s,7ooS 1s,2oos-S 98,soos 1,6s¿600S 6,061,000743r43.51S 246,8s1 S76,50074,70081,00083,40085,80090,80093,30095,900ã-ltllzãÞ('JFìãË/¿A)tsllÏl(rltslcUs3,006.s76 53,006,700 s3,003,200 53,m5,900 s3,006,s00 53,002,s00 S3,374,000 5¿868,100 S2,869,500 S1.650,800510,208,149 54,702,000 52,222,ú0 S6,06s,000 $9,353,000 S11,6s1,000 93,463,000 S4,920,000 510,463.000 S4.632,000s 1,656,600s 6,298,000EñdirE Balan.eOperãting ReseM (50%)Avâilâblê FundsDebt SeNiæ Coverage (min. 1.25)$ $,852,890 sLL,7@,3?7 s11,4O3,E00 sß,99O,100 $7!,322,200 s9,695,600 s4,2OO,2OO s6,743,500 s7,99O,2OO $3,278,100 ss,865,300 sZ5O7,9OO $9,078,7005 s,716,0m 5 6,067.000S 10,146,890 S s,773,337s 6,20s,000S s,198,8002.456,344,000 s6,490,000 s6,640,000 S6,791,000 57,13s,000 5204s,0m 57,214,000 S6,777,000 S 6,956,000 57,141,0007,646,100 S6,832,200 S3,0ss,600 $(2,590,800)5 (39r"s00) S 94s,200 5{3,93s,900)S (911,700) S ss1,90o 57p37,7N2.62 2.82 2.94 3.09 2.80 3.18 3.04 5.45 5.75 5,862.64r,067,o977,345,754ÞC)¡.)(¡)510,208,149 54,702,OOO 52,222,D00 S6,06s,000 59,353,000 $11,651,000 53,463,m0 54,920,000 510,463,000 S4632,000 56,061,000 56,298,000sl,ooo,ooo $ - 5 5 S s s 5 S S s s$ \34s,7s4 $11,208,149 s4,702,0oO 52,222-ñ0 S606s,000 S9,3s3,00û 511,651,000 $3,463,000 54920,000 510,463,000 54,632,000 S6,061"000 S6,298,000s 820,000 s3,95s,000 s3,193,000 51,034m0 53,661,000 5 394,00û s3,594OOO 51,761,000 53,813,000 $2,660,000 s2/40,000 s4166,000s 1.346,000 57,500,000 s1,s09,000 51,188,000 52,404.000 S8,9s9,000 $8,0s¿oo0 51.702,000 S1,107,000 57,803,000 $1,892,000 51,895,000s 2,166,000 s11,4ss,000 s4,702,OOo s2,222,Ø0 s6,06s,000 s9,3s1.000 su,6s1,ooo s3,463,000 s4920,000 510,463.000 s4632,000 s6,061,000 sôze8,ooo,0002,N74,297,OûS u6.ss1 ÉI3
ô*l-tslnl¡JoznrùÀslEw4¡ER qì/F FUilO lruro gãtlBegindnt gâlanceInterest EarningsWastewater IMF Reve¡u€Tftl Revenu€! and fransfers lnWast€water ltu$ ExFnd. & TGnslersWastewater IMF PrcjectsTransfer to Oper. for Debt SeruiceTransfer to Cap. for Projecßfo€l Wartewãter IMF Experd.End¡E BalânceOwed Fund 530 for Debt seruice9loftÎt¡llrrArÊi lrt¡_ü f-frfrD F.l¡.1!O,5331Bet¡ndnt galançelnterest EarnintsT@l Revenues and lrañsfeE lhStomiater IMF Experd. &TransteFStormwater IMF PrcjectsTransfer to Cap. for ProjeGTæl Stofmwãter IMF E¡pend.End¡rg EalancewaslEl{¡lf rB iaft $A$w¡Ì¡pt¡Exh¡bit ll-10 - cont¡nuedCity ûf LodiWestewater svstem Financial PlanFY 2O-2LFY AA-DÊv E-26s 759,967 s 809,400 5 712,500 s 621,700 s s39,900 5 467,600 S 405,700 S 355,000 S 315,400 S 290,700 S 279.000 S 2A2,2OO S 301,400503,776- 5 21,400S 18,7005 16,200S 14,000S 12.2005 10,700S 9,s005 8,7005 8,400S 8,500S 9,000903,130s 287,EOO$ 299,s0O5 311,5005 324,100S 337,1005 350,700S 364,800$ 379,6005 394,800t 4rO,7oO5 42-1,2005503,776$903,1305309,200S318,2005327,100S338,100S349,300S361,4005374¡00S388,300S403,2005419,200$qZS,ZO,s 5 4oo,oooS 1,ooo,ooo S400,000400,000400,000400,000400,000400,000400,000400,000400,0004{10,00051,000,000 5 40o,oo0 5 4oo,ooo S 4oo,o0o 5 40o,0oo S 40o,ooo S 4oo,0oo 5 400,000 5 400,000 S 4oo,o0o S 40o,ooo $ qoo,oooS s,899,s08 S 6,8s2,s23 5 7,803,963 5 8,7s6,618 $ 9,709,s43 S10,660,668 51r,718,968 512,669,613 513,s6o,933 S13,903,793 574,247,463 514,592,93355555$ÞEÊF¡(JJN)Ê5.546.549925,574S 9s0,384 S 945,700 S1,069,000 51,199,800 S1,338,600 $1,48s,700 ${1,140,400)5{r,0s8,900) $ (970,300}S (874,200)$ {770,100) S (657,600)- 5 28,4005 32,100S 36,0005 40,200$ 44,6005 (34,2û0)5 (31,800)15,330s 94,900s 98,7005 102,800S 106,900s 111,3005 115,7005 720,440ãÞËAzUãÞU]Ê€'-t7JÞ'.1lnØ*lfU4{29,1o0)s (26,200) s (23,100) s (1s,7oo)s 130,300 5 13s,600 5 14r.,ooo125,2005 7]s9 $ 1s,330 S 123,300 S 130,800 5 138,800 S 74?,rN S 1ss,9oo 5 81,s00 5 88,600 5 96,100 S 104,100 S 112,s00 5 121,3005s782,0002,5sS 2,782,000 S8eg¡nnlnt BalançeReverues and TEnsteß lnlnterest EarningsTransfers From/(To) Oper, Fundr.ufrD lFuilÞ È311s s00,000 s s00,000 s500,00015,000515,00015,500s30,50015,900546,40016,4N562,80016,900579,70077,4O4s9¿100L7,900615,00018,500633,50019,ûæ652,50019,600672,r0020,200ss5ss(Total Revs. andlñßfe6 ln/(Out¡Ënd¡rg Balãnce(S ls,oooS ls,sooS 1s,9ooS 1G,40cS 16,900S 17,400S 17,9ooS 18,sooS 19,omS 19,600S 20,200((Gtim t67t 16i6q2.4mÞnl\)Þ
a)FloFrllioUrìFüc)FocHztlExhibit ll-11CitV of Lodir'¿PÞrjÈFJ(¡)¡.J()\oãFlrrrþzãÞ(,FJrrl€ËtrjñFÞFlØFl-Þc)N)(JrS3o,ooo,ooos2s,000,000Szo,ooo,oooSls,ooo,ooo$1o,ooo,ooo$5,ooo,ooo$-Fy17-18 Fy18-19 Fy19-20 Ft20-2L pt2L-22 çttz}-23 FY23^24 çtt?4-25 FY25-26 Fl26-27 Fl27-28 FY28-29 FY29-30m0per.i*rffi"f,stsProposed Revenues- CurrentRevenues- t¡di¡g Balanceor. Reserve---. MinReserve¡r_ãtttfflfrrür I ¡¿r
CITY oF LODI WATER AND WASTEWATER RerE Sruov
, ,- As proposed, the City should anticipate adjusting water and wastewater rates by the
following amounts:
Wøter Utility
April2019
January 2020
January 2021
Jarvary 2022
]anuary 2023
Wøsteutater Utility
JuIy 2019
JuJy 2020
luly 2021
JuIy 2022
July 20?3
2.9%
3.Oy,
-8.4%
3.0To
3.0%
2.9%
3.0%
3.0%
3.0%
3.0y"
(rollback to 2016 rates)
The water and wastewater system financial plan models reflect assumptions and
estimates that are believed reasonable at the present time. However, conditionschange. It
is recommended that the City review the financial conditions of the utilities annually aı part
of the budget process and perform a more comprehensive financial plan and rate upàate
study every 3 to 5 years, unless otherwise needed sooner.
WATER SHORTAGE FINANCIAL ANALYSIS
-This study also included an analysis of the financial impacts associated with drought
and reduced water sales. The City (and the entire State) recently emerged from an extendìd
drough¡ which included State-mandated water use restrictions. Reduced water sales in
recent years have had a financial impact of the water utility as the reduction in water sales
revenue exceeded the reduction in water system costs. The financial strain placed. on the
City's water utility was similar to the strain confronted by many other utiliti,es. With this
recent exPerience, the City is concerned about potential financial impact of a fuhrre drought
and reduced water usage on the water utility. As a resul¡ a financial analysis of the poteniialilfa¡t of drought was performed as part of this study with the intenl of identifying and
developing tools for countering the potential financial impacts associated wiih later
shortage conditions.
The City's water utility can be affected in several ways by drought conditions. Changes
in operating and maintenance costs and revenues can include:
¡ Reduced water sales and water sales revenue
¡ Reduced water purchases and water purchase costs
. Reduced or increased groundwater procluction and production costs2
. Increased water conservation and education/assistance program costs.
z An increase in groundwater production costs could result from a shift in water supply mix away from WID
water purchases and towards groundwater production.
TrjE Rpso Gnoue, INc DRAFT 1/3/207e PAGE 26
Crrv op Loot WetsR AND WASTEWATER RATE STUDY
\Âtrhile the reduction in water sales revenue would be partially offset by the reduction in
water purchase and production costs, revenue typically declines more than costs creating a
financial cleficit. Increased water conservatron program costs, including education ancl
assistance progranu, add to the financial deficit created by water shortage.
In response to water shortage, and the financial deficit created, the City has the ability to
take several actioru. The analysis presentecl herein focused on three potential courses of
action, including:
. Using available financial reserves, including portions of the water Operating
Reserve
. Supplementing water rate revenues through imposition of temporary water
shortage surcharges
¡ In more severe conditions deferring capital program expenditures to reduce costs
and preserve cash.
The City could also reduce operating anci maintenance costs, where possible, or seek
outside funding sources, such as Sants, to heþ bridge a financial deficit'
In its 2015 Urban Water Management Plary the City has established a Wster Shortage
Corutingency Plaø (WSCP). Beyond normal water supply conditions, the WSCP defines five
stages of use supply reductions, as indicated below.
. Normøl Supply - Under normal conditions the City has adequate water supplies
to meet all customer water demands. Both water supply and demand could
fluctuate by up to 5 percent without creating concern for the utility.
o PotentiøI Shortøge (Støge 7) - A potential shortage exists when water supplies
are reduced from 5 to 10 percent from normal conditions. In this situation, the
City would impose voluntary water use restrictions and encourage customers to
reduce water demand commensurate with the lirnited water supply.
c Minor Shortøge (Støge 2) - A minor shortage exists when water supplies are
reduced from 10 to 20 percent from normal conditions. In this situatiorç the City
would impose mandatory water use restrictions and encourage customers to
reduce water demand commensurate with the limited water supply'
t Moderøte Shortøge (Støge 3) - A moderate shortage exists when water supplies
are reduced from 20 to 30 percent from norrnal conditions. In this sitnation, the
City would impose additional mandatory water use restrictions and require
customers to reduce water demand conunensurate with the Lirnited water supply.
. Seaere Shortage (Støge 4) - A severe shortage exists when water supplies are
reduced {rom 30 to 50 percent from normal conditions. ln this situation, the City
would impose stricter mandatory water use restrictions and require customers to
' reduce water demand commensurate with the limited water supply'
t Criticøl Shortøge (Stage 5) - A critical shortage exists when water supplies are
reduced by more than 50 percent from normal conditions. In tlüs situation, the
City would impose the most stringent water use restrictions and require
custoÍrers to reduce water demancl cornÍrensurate with the limited water supply.
THË REED Gnour, INC DRAFT 1.13/201.9 PAcE27
CITY oF LODI W¿.Tgn AND WASTEWATER RATE STUDY
The California Legislature and the State Water Resources Control Board are in the
process of developing new laws and regulations for implementing the Governor's order for
expanding water conservation requiremenb as well as planning and preparing for future
water shortagesr. The new laws and regulations are evolving and the City may need to
modify its WSCP once State regulations have been finalizect.
Using the financial plan rnodef an analysis of the potential financial impacts of water
shortages was performed. The analysis includes estimating the magnitude of reduced
revenue/ reduced costs, and increasecl costs that may be associated with various stages of
water shortage. The anaþis was performed using financial plan estimates for CY 202J.,
which is when all customers are expected to be on metered water rates. Exhibit II-12
surnmarizes estimated Cy 2025 operatingrevenues and water system costs under normalized
water supply conditions and under various water shortage conditions. The shortage
analysis starts with normal conditions whereby revenues and expenses are effectively in
balance+. Under water shortage conditions, a financial deficit is likely to emerge ancl
increases with increasing severity of drought conditions. Exhibit II-13 graphically illustrates
the financial deficit created by reducecl water sales resulting from water shortage conditions
as defined by the City's WSCP.
Exhibit II-14 graphically illustrates how the financial deficit created by reduced water
sales could be bridged through a combination of actions. Under potential shortage
conditions and voluntary use restrictions, the City wouid rely on its Operating Reserve to
bridge the deficit gap. Under more significant conditions with mandatory use restrictions,
the City would implement the proposed temporary water shortage rate surcharges to
provide supplemental water rate revenue¡ thereby reducing the impact on reserves.
Financial analysis indicates that it would not be necessary to reduce capital improvement
program expenditures during minor and moderate shortage periods. However, in severe
and critical conditions modest CIP deferrals may be necessary. By invoking the temporary
water shortage surcharge during periods of mandatory use restrictions the City would
provide customers with a financial incentive for rneeting use reduction goals, and also
preserve its water system reserves as protection against extended droughts or other risks.
In addition, once reserves are drawn down, the City would be faced with having to replenish
them, which may necessitate a subsequent rate increase (likely in excess of inflation rãtes) to
re-establish financial stability.
3- See lvw.r,r..rvaterboatds.ca.gor'/¡.vater issues/Irrogtams/conservatiolr portal/califcmia statules.hlrnl for
the most recent deveþments.
a Fot the "Normal Supply" condition this analysis shows water operating revenue to be in balance with total
cosls, even though the costs may inclucle confuibutions into or from financialreserves, as well as capital program
funding. This balanced perspective is necessary to evaluate the impact shortage conditions wlth rãducãd ñater
sales.
THE REED Gnour, h.rc DRAFT 1/3/2019 Pacn 28
nFloÞ¡,rioÊñr'¿C]ozôE'ltJO)N)tJ\oNormal SupplyPotential ShortageMinor ShortageModêrate ShortageSevêrè ShortageCr¡t¡cal Shortâge3to,700621"400932,100t,242,7A0o%ß%20?630%so%600Áo%5%Lo%20o/o3A%500/6Exhibit ll-12Crty of Lodithe Finãnciâl Iof Wâter Shoto5 20,221,100 S 2,25s,800 5 17.965,300s 19,s99,700 s 2,030,200 s 17,96s,3007S 18,97s,400 S i.,Bo4,6oo S 17,965,300s 18,357,000 $ 1,s79.100 s 17865,3005 r7,rt4,3oo ; r,t27,9oo 5 17,95s,3O0s t6,492,9OO s 9o2,3oo s 17,965,300$ 20,221,100 $5 19,99s,500 SS 19,769,900 S$ 19,544,400 $s r.9,093,200 5s 18,867,600 I(39s,800)(791,s00)[1.187,400)(L,978,900)l?,374,7oO1sssssss$s$s5s)s)$5395,800480,800s66,000796,800632,000250,000500,000ãÞtslL1¡Þz€Þ(nÈrfl€ÞFløÞtslL1t(nÞlUNoneNone,%L0%ts%20%ÞúÞc)N)\0TempotaryWateÌShortegesurchal?eúY 2025 Flnânclal Analvs¡s lNo Flat Rate RevenuelWaterOperatingRevenueVariableCrstsFixedCostsTotâlCostsFinancialDeficitRserueCørtributionWù. Shst.5ur€hårgÊContribr¡tionOPDeferâlsSuDDlv Redudlohtor End Hþh Endof Rerue df RânEe
CITY oF LoDI WATER AND WASTEWATER RATE STUDY
I Revenues r Expenses
Szo,ooo,ooo
$1s,ooo,ooo
S25,ooo,ooo
s10,æ0,000
S5,ooo,ooo
s,
Normal
Supply
Potential
Shortage
{st4e 1}
Minor
Shortage
{stqe 2)
Moderate
Shortage
(Stage 3)
Severe
Shortage
(Stage al
Critical
Shortage
(Stæe sl
Exhibit lþ13
City of Lodi
Financial lm of Water
Exhibit II-14
City of todi
Example of Mitigation Measures for Bridging Financial Deficit D urirg Periods of Water Shortage
$3,ooo,ooo
I Reserræ Contribution
I lemp. Surcharge Revenue
n CIP Deferrals
$2,5oo,ooo
S2,ooo,ooo
S1,50o,ooo
$1,ooo,ooo
$5oo,ooo
s-
Normal
Supply
Potential
Shortage
(stqe U
Minor
Shortage
(stage 2)
Moderate
Shortage
(Stage 3)
Severe
Shortage
(stې 4l
Critical
Shortage
(stage sl
THE REED GROUP, INC DRAFT 1/3/2O1e PAGE 30
CITY oF LoDI WATER AND WASTEWATER RATE STUDY
Considering that droughts may extend over several years (as the most recent drought
did) generating revenue through the shortage surcharge would help preserve the Operating
Reserve and lessen the longer-term impact created by extended water shortage conditions.
Lr effect, the temporary water shortage surcharges provide the Cify with an additional tool
for managing the financial risk associated with water shortage conditions.
Adopting the water shortage rate surcharges (presented in Section III of this report) is an
important step in providing a comprehensive strategy to protect the water utitity's financial
condition against the uncertainty associated with potential future drought conditions.
THE REËD GnouT, INC.DRAFT 1./3/2Aß PAGE 31
Clrv or Lou WATER AND WASTEWATER RATE STUDY
SECTION III. WATER RATES
This section of the report presents water rate recommendations and schedules for the
next five years. The water system financial plan, presented in the previous section, was used
to determine the annual water rate revenue requirements and to develop the strategy for
meeting current and future financial obligations. As described in this section, no changes to
the water rate structures are proposed at this time.
This section also presents recommendations for adopting a new temporary water
shortage rate surcharge, which could be implemented in the event of a futuie drought or
water shortage that necessitates mandatory water use restrictions and reductions in usage.
CURRENT WATER RATES
The current water rate schedule is summarized ín Exhibit III-L. The City last adjusted
its water rates in 2017. The last comprehensive water rate stucly occurrecl in 2013. The City
is continuing to transition customers from flat (unmetered) water rates to usage-based
(metered) water rates as the meter retrofit program continues. The Ci{r's goal is to have all
customers on metered water rates by 2A'25.
Flat water rates include a fixed monthly charge for single family homes and multi-family
dwelling units based on the number of bedrooms. A small number of non-residential
accounts also pay flat water rates based on the numl¡er of equivalent dwelling units.
The metered water rates include a fixed monthly service charge based on the size of the
water meter. Single family accounts are subject to a 3-tier usage rate structure and multi-
family and non-residential accounts pay a uniform water usage rate. The tiered water usage
rates for single family homes was originally cleveloped in 2009. The tier structure reflects
differences in water supply costs (groundwater and IMD water) and provides a
proportionate method of allocating costs that also helps to achieve the City's water
conservation objectives. The uniform water usage rate applicable to multi-family and non-
residential accounts is equal to the weighted average of the single family tier rates to ensure
proportionality between customer classes. Tier rates were determined to not be suitable for
multi-family and non-residential accounts due to the diversity of water use characteristics
and the more complex and costly administrative requirements.
Minor refinements to the meterecl water rate structure wete made as part of the 2013
update study. The rate structure was also reviewed in 2015 following the Àppellate Court
decision n Gty of snn þnn CøpisÍrano v. ccrpistrano Tøttpøyers Associøtiott.
At presenf aboul 46 percent of metered water rate revenue is generated from water
usage charges and about 54 percent from fixed service charges. Both flat and rnetered rates
are generally performing as intended and each element of the water rate structures continues
to reflect a proportionate allocation of costs to each custonrer based on estimated
(unmetered) or actual (metered) usage as well as capacity and service requirements.
THE REED Gnoup, Irrlc.DRAFT 1/3/201e PAGE 32
CITY oF LoDI WATER AND WASTEWATER RATE STUDY
Exhibit lll-1
City of Lodi
Current Water Rates
Monthly Flat Water Rates (Unmetered)
Single Family Residential
1 bedroom
2 bedroom
3 bedroom
4 bedroom
5 bedroom
Multi-Family Units
1 bedroom
2 bedroom
3 bedroom
4 bedroom
Non-Resídential
Per ESFU
Monthly Service Charges (Metered)
Up to 3/4" meter
l" meter
L L/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
10" meter
Water Usage Rates (Metered) -- S/CCF
Single Family Resldential
Tier 1 (0:10 ccF)
Tier 2 (11-50 CCF)
Tier 3 {> 50 CCF)
Multi-Family
Non-Residential
s
$
$
$
s
s
s
$
5
32.84
39.44
47.21
56.79
68.11
28.19
33.81
40.58
48.68
S s9.44
2L.a7
34.34
65.25
LO2.52
189.50
3r3.73
624.O3
996.55
r,43L.26
s
$
s
)
s
s
s
s
s
s
$
)
s
S
o.97
t.z9
1.60
1- 15
1.15
: Notes:
(L) Water rates were last adjusted in 2017 based on Resolution 2Ot7-23.
CONTINUING TRANSITTON TO METERED WATER RATES
The City continues to install water meters on all unmetered water service connections.
In FY '17-18, t'ne City completed Phase 7 of tir.e meter retrofit program. Phase 8 will
commence in FY 19-20, followed by Stage 9 to install meters on apartment complexes and a
small number of remâining non-residential accounts.
The City provicles customers with water usage information and flat vs. meterecl water
bill information prior to converting them to the metered water rates. Because of this lag
between meter installation and metered billing, the final conversion to metered billing may
not occur until January 2025. As described in the next sectiorL customers are also converted
THE REED GROUP. INC.DRAFT 1/3/2019 PAGE 33
CITY oF LODI WATER AND WASTEWATER RATE STUDY
to metered wastewater usage rates. That wastewater billing conversion generally happens
18 months after the water billing conversion.
In general, most customers benefit from the transition to metered water and wastewater
rates. This is because for most customers actual usage is somewhat less than the average
usage on which flat rates have been based.
The transition to metered billing for multi-family aparknent complexes will have a more
significant impact on water rate revenue. Under the current flat rates, each clwelling unit is
billed separately for water service. However, for a variety of reasons it is generally
impractical and infeasible to install separate water meters on each apartment unit.
Therefore, apartrnent complexes will generally have a single (or in some cases a few) master
meters that serve the entire complex. Uncler the rneterecl rate structure, in which service
charges are based on meter sizes for each connection and usage charges based on actual
usage and the uniform usage rate, water rate revenue from apartunent complexes will likely
be less than the aggregate flat rate revenue from billing individual units. ltVhile the financiai
plan analyses contained in this study incorporate estimates for this impact as the transition
occurs, the actual impact wili depencl on the specific number and sizes of master meters
installed as part of the meter retrofit progtam for multi-farnily customers.
PROPOSED MULTI-YEAR WATER RATE SCHEDULES
Exhibit III-2 sumrnarizes proposed maximum flat and metered water rate schedules for
rates to be effective in April 2019, as well as for each January from 2020 through 2023. The
later years of this multi-year rate plan reflect the annual revenue requirements through FY
23-24, as well as the previously approved water rate rollback scheduled f.or Januaty 2021,,
based on the water system financial plan presented in Section II of ihis report.
Continuing with recent practice, the City should adjust water rates arurually based on
changes in the ENR CCI, suþect to a 3.0 percent annual cap. The rate schedules shown in
Exhibit III-2 include 3.0 percent adjustments in future years (excluding the |anuary 20Zl rate
rollback). Therefore, for the five-year Proposition 218 rate period, the schedules reflect tl're
maximum amount of the water rates with each adjustment. If actual inflation is less than 3.0
percent, then the irnplemented schedules would be correspondingly lower.
As previously described, no rate structure changes are proposed at this time. However,
it is recommended that the next rate study include a comprehensive cost of service update
as all water meters will likely be installed by that time and the City will have more complete
knowledge and understanding of water usage for all customers and customer classes, as well
as more accurate information on the number and sizes of multi-family master meters.
THE REED Gnour, INc.DRAFT 1./3/201.e Pacr 34
CITY OF LoDI WATER AND WASTEWATER RaTs STuuy
Exhibit lll-2
City of Lodi
Current and Proposed Maximum Water Rate Schedules
Current {1) Apr.2019 Jan. 2020 (3) Jan. 2O2l l1l Jan.2022(3) Jan. 2023 13)
Rate Adjustment -->
Monthly Flat water Rates (Unmetered)
Single Family Residential
1 bedroom S
2 bedroom S
3 bedroom S
4 bedroom S
5 bedroom $
Multi-FamilV Units
1 bedroom S
2 bedroom 5
3 bedroom S
4 bedroom S
Non-Residential
Per ESFU S
Momhly Service Charges (Metered)
5 21.87
$ s¿.E¿
s 6s.2s
s 102.s2
S 18s.so
s 313.73
$ 624.03
5 996.ss
s 1,431.26
31.88 s
38.29 s
4s.89 s
ss.14 s
66.13 s
32.84 $
3s.44 s
47.27 s
s6.79 s
68.11 s
33.83
40.62
48.69
58.49
7D-T5
32.84 s
3s.44 s
47.27 s
56.79 $
68.11 s
2-9%
33.7s s
40.58 $
4a.64 s
s8.44 s
70.09 s
29.01 s
34.79 s
4L.76 s
so.os s
s 22.s0 5
5 :s.¡q S
5 67.L4 Ss Los.4e ss lss.oo ss 322.83 s
$ 642.13 s
s 1,02s.4s s
$ L,472.77 S
34.80 s
4L.8o s
so.1o s
60.19 s
72.19 s
3.4%-8-496 3.OoÁ
28.19 s
33.80 s
40.s8 s
48.68 s
3.OoÁ
29.04
34.81
41.80
50.14
s 22.s3
S ss.gz
s 67.20
S 1os.6o
$ 19s.19
s 323.14
S 642.7s
S 1,026.4s
S 1,474.20
28.!9 s
33.81 s
40.s8 s
48.68 s
29.88 s
3s.83 s
43.01 s
s1.ss 5
27.37 s
32.82 s
3s.40 s
47.26 s
3s.44 s 40.s8s 41.80s 38.295 3s.44s 40.62
Water Usage Rates (Metered) -- $/CCF
Single Family Residential
Tier 1 (0-10 ccF) S
Tier 2 (11-50 CCF) S
Tier 3 (> s0 CCF) S
Mult¡-Family S
Non-Residential S
23.18
36.40
69.15
108.65
200.85
332.51
661.39
1,056.21
1,516.95
s 27.23
S :¡.s¿
s 63.34
S ee.s3
S rsa.sa
s 3o4.ss
s 60s.8s
5 967.s2
s 1,38e.57
0.97 s
r.2s s
1.60 s
1.1s 5
1.1s s
1.00 s
1.33 s
1,6s $
1.18 s
1.18 s
1.03 s
t.37 s
L.7a s
7.22 s
!.22 s
o.s4 s
r.2s s
1.s6 $t.t2 s
r.r2 $
o.s7 s
1.2s s
t.6L $
1.1s s
1.1s s
Up to 3/4" meter
1" meter
LL/2" meïer
2" meter
3" meter
4" meter
6" meter
8" meter
10" meter
S zr.azS ¡¿.¡+5 ss.z¿
5 i.o2.s2
S 189.s0
s 313.73
S 624.035 sse.ss
$ 1,431.26
1.00
1.33
1.66
1.18
1.18
I Notes:
{1) Water rates were last adjusted ¡n 2017 based on Resolution 2OI7-23, which includes a rate rollback in
' January 2021 to the water rates that were in effect in 2016.
: (2)AnnualchangeinENR20-CitiesConstructionCostlndexfor20lS(basedonDec.2017toDec.20L8).
(3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap.
THE REED GRoUP, INC DRAFT 1/3/2019 PAGE 35
CITY oF LODI WATER AND WASTEWATER RATE STUDY
WATER SHORTAGE RATE SURCHARGES
To help encourage water conservation and to help bridge the financial deficit created by
a water shortage, it is recommended that the City adopt temporary water shortage
surcharges that would be implemented under specified water shortage conditions. The
temporary water shortage rate surcharges would be incremental increases in the water usage
rates. Even though the water shortage surcharges represent an increase in the water rates,
total water rate revenue coulcl still decline with reduced water sales as water shortage
conditions worsen. That is, the supplernental revenue generatecl through the water shortage
rate surcharges woulcl only partially briclge the cleficit gap created by clrought anci recluced
water sales.
As described in Section II of this report, a multi-prongecl approach to adclressing
financial strain caused by water supply shortages and reduced water is suggested. While
the utility can use a portion of Operating Reserves in a potential shortage condition, with
voluntary use restrictions, temporary water shortage rate surcharges are recommended for
conditions that warrant mandatory water use restrictions (i.e., minor, moderate, severg and
critical conditions, as defined). Under these conditions, the estimated financial deficit
created by water shortage conditions is largely recovered through a temporary water
shortage surcharge from customers in proportion to each customer's water usage. In short,
the calculation ensures that each customer bears a proportionate share of the cosb associated
with water shortage conditions. The temporary water shortage rate surcharges have been
specifically clesigned such that customers that meet water use reduction goals will have
lower water bills with the water shortage rate surcharges than they would with normal
water usage and normal water rates. Customers that do not meet water use reduction goals
may pay more for water service because of the water shortage rate surcharges.
Exhibit III-3 presents the proposed April 2019 water usage rate schedule supplemented
with the temporary water shortage rate surcharges. As an example, Tier 1 of residential
water usage rates would increase from $1.00 per CCF to $1.05 per CCF under Minor Shortage
conditions (i.e., a 5 percent surcharge when water use reductions of 10 to 20 percent are
necessary). Because the water shortage rate surcharge would only apply to the water usage
rates (and not the fixed monthly service charges or flat rates) the impact on the total water
bill is substantially mitigated. In additioru the temporary water shortage surcharges would
only be required during periods of mandatory use restrictions, but not in normal or potential
shortage conditions with a use reduction of up to 10 percent.
The temporary water shortage rate surcharge is not intencled to be a penalty for excessive
use; rather it represents each customer's fair share of the cost of partially bridging the
financial deficit createcl by reducecl water sales during periods of water shortage. Customers
would participate in bearing this cost in proportion to their water use. During this time, the
portion of the Operating Reserve would also l¡e used to l-relp close the financial cleficit gap
cause by reduced water sales.
THE REED GRoue, Iuc DRAFT 1./3/201e PAGE 36
CITY OF LODI WATER AND WASTEWATER RATE STUDY
Exh¡b¡t lll-3
c¡ty of lod¡
ProDosed Temnorañ, Waler çhrYtãp¡Rãte Sr¡r¡haroeç
Normâl
supply
cônd¡tions
Potentíel
ShorteEe
Minor
Shortage
f Mandatorul
Moderate
Shortage
{Mandatorvl
Severe
Shortage
(Mandatorv)
Crit¡cál
Shortage
{Mandatorv}
Use Reduction Goal -->
Temp. Water Shortage Surcharge (21
Monthly Servîce Chø,rges
Up to 3/4" meter
1" meter
1V2" meter
2" meter
3" mêter
4" meter
6" meter
8" meter
10" meter
wdter lJsage ßotes (s/ccF) (3)
Single Family Residential
Tier 1 (0-10 CCF)
Tier 2 (11-50 CCF)
Tier 3 {> 50 CCF)
MultÈFamily
N on- Residential
None
None
5%toLO%
NonÊ
IOY, to 207o
5%
20%to30%
ro%
3OYo Io 50%
75%
> 5A%
20%
5 22.s0
S rs.¡+
s 67.14
s 10s.49
s 19s.00
s 322.83
S o¿z.r¡
S r,ozs.+s
$ L,472.71
No Changes to Service Charges
1.10 s
1,46 s
1.82 s
1.30 s
1.30 s
$
s
s
s
s
1.00 s
1.33 $
1.6s s
1.18 s
1.18 s
1.00 5
1.33 s
1.6s 5
1.18 5
1.18 s
1.0s s
1.40 s
1.73 s
1.24 s
r,24 5
1.1s s
1.s3 s
1.90 s
1.36 s
1.36 s
1.20
1.60
1.98
t.42
1,.42
r Notes:
(1) ThetemporarywatershoratgeratesurchargepercentagesareshownappliedtotheproposedwaterusageratesforApril2019
forillustrativepurposes. Thepercentageswouldbeapp¡iedtoanythen-currentwaterusagerateswhenimplementedby
declaration of a water shortage by the City Council.
(2) Thetermporârywatershortägerâtesurchargewoudbeanincremental(percentagelincreaseinthewaterusagerates,butwou
not be applied to monthly seruice charges or to anyflat water ratÊs for unmetered customers.
(3) The water usage rates shown for Minor through Critical shortage conditions incorporate the temporary water shortage rate
surcharges.
Water shortage rate surcharges would. provide moderate supplemental revenue for
addressing water supply shortages and the resulting reduced water demand. As illustrated
graphically in Exhibit III-4, the water shortage rate surcharge revenue only partially
replaces lost revenue due to reduced water sales. As a resulç even with the water shortage
rate surchaages, the proposed water rates for water shortage conditions are less than the total
cost of providing water service. The inforrnation in Exhibit III-4 reflects revenue estimates
based on the application of water shortage rate surcharges in 2025, which is the point in time
when all customers are expected to be on metered water rates.
If adoptecl, the temporary water shortage rate surcharges woulcl be irnplementecl when
water shortage conditions tìecessitate water use reductions exceeding 10 percent/ and would
depend on the specific stage of shortage, as declared by the City Council. The temporary
surcharges would continue only as long as the shortage conditions exist. Vvhen the shortage
is declared over, then the water shortage rate surcharges would be discontinued.
THE REED GnoUI, INC DRAFT 1/312A19 PAGE 37
CIty or Lool WRIER AND WASTEWATER Rere Sruoy
Exhibit llþ4
City of todi
Water Rate Revenue During Periods of Water Shortage
$18,ooo,ooo
$16,000,00o
$14,ooo,ooo
$12,ooo,ooo
$10,ooo,ooo
$8,ooo,ooo
S6,000,ooo
$4000,000
$2,ooo,ooo
s-
r Service Charge Revenue
r Usage Charge Revenue
r Temp. Surcharge Revenue
Normal
Supply
Potential
Shortage
(St4e 1)
Minor
Shortage
(Stage 2)
Moderate
Shortage
{Stage 3)
Severe
Shortage
(Strye 4)
Critical
Shortage
{Stage 5)
Bill Impacts of Water Shortøge Rate Surcharges
Water shortage rate surcharges have been specifically designed such that customers
achieving required water use rectuction goals will have lower water bills than they would
with normal water rates and normal water usage. Customers that do not meet water use
reduction goals may have higher water bills. Because the temporary water shortage rate
surcharges apply to all water usage, all metered rate customers will participate in bridging
the financial gap created by water shortage. Of course, those customers that use the least
amount of water or conserve the most will pay less through the water shortage rate
surcharges.
Exhibit I[-5 illustrates how a typical single family customer would be affected by the
water shortage rate surcharges across various shortage conditions. Monthly water bills are
shown for customers that, under normal conditions, use L5 CCF monthly. Water bills are
calculated for customers meeting requested water use reduction goals, and customers that
do not conserve at all-
THE REED Gnour, INc DRAFT 1/3/201e PAGE 38
CITY OF LODI WATER AND WASTEWATER RATE STUDY
Exhib¡t lll-5
City of Lodi
Bill lmpacts of Temporary Water Shortage Râte Surchärges
Water Stace Goal
Water Use
Reduction
Monthlv
Water Use
Monthly
Service
Charee
Water
Usage
Wäter
shortaBe
Total
Water
B¡II
% Orange
from
Surcharse ttlarmrl sill
:Averege Síngle Fåmily Customer Meet¡ng Reduction
None
5o/o f.ô tOYo
t0%to20%
20%to30%
3Oo/" to 5îo/o
> 50%
Goals
s
s
s
s
)
s
22.s0 5
22.s0 I
22.50 $
22.s0 s
22.s0 s
22.s0 s
16.65 s
1s.32 $
13.99 5
12.65 s
10.00 s
7.00 s
ì Normal Supply
Potenìial Shortage
Minor Shortage
Moderate Shortage
Severe Shortage
Critical Shortage
15
L4
13
L2
t0
7
0.70
L.27
1.50
1.40
0.83
7.67
2,50
3.33
39.15
37,82
37.r9
36.43
34.00
30.90
39.15
39.15
39.98
40.82
41.65
42.48
-t.4%
'5.Vo
-7.V"
-t3.2%
-2t.1%
o.úl
2.L%
4.3%
6,4%
8.5%
s
)
Þ
5
$
s
s
s
s
s
s
Average SÌngle Family Customer NOT Meeting Reduction Goals
Normal Supply None 15 S 22.50 S
Potent¡al Shortage |o/oto LAyo 15 S 22.50 S
Minor shortâge \a%lro2o% 15 s 22.50 s
Moderate Shortâge 20% to 30% 75 S 22.50 S
severe shortãge 3oYoto'Oo/o 15 s 22.50 s
Cr¡t¡cal Shortage > 5Ð% 15 5 22.50 5
16.6s s
16.6s s
16.6s s
16.6s s
16.6s s
16.65 5
THE REËD GROUP, INC DRAFT 7/3/201.9 PAGE 39
C¡rY or Lopr WeTgR AND WASTEWATER RATE STUDY
SECTION IV. WASTEWATER RATES
This section of the report presents wastewater rate recommendations and schedules for
the next five years. The wastewater system financial plan, presented in Section II of this
report, was used to determine the annual wastewater rate revenue requirements and tq
develop the strategy for meeting current and future financial obligations. As described in
this sectiory no changes to the wastewater rate structures are proposed at this time.
CURRENT WASTEWATER RATES
The current wastewater rate schedule is summarized in Exhibit IV-I.. The City last
adjusted its wastewater rates in July 2016. The last comprehensive wastewater rate study
occurred in 2013. The City is continuing to transition customers from flat (unmetered)
wastewater rates to usage-based (metered) wastewater rates as the meter retrofit program
continues. The City's goal is to have all customers on metered wastewater rates byftrly 2026.
Flat wastewater rates include a fixed monttrly charge for single family homes and multi-
family dwelling units based on the number of bedrooms. Most non-residential accounts also
pay flat wastewater rates based on the number of sanitary sewer units (SSUs) for each
account, as determined by City staff, One SSU is equivalent to a two-bedroom single family
hon'te. All flat wastewater rates will be phased out as the installation of water meters is
completed.
The metered wastewater rates include a fixed monthly service charged based on the size
of the water meter and a usage rate based on winter water usage. Winter water usage is
used for sewer flow estimation since irigation usage is minimized during this time period
and winter usage reeisonably reflects the amount of ongoing water usage that ends up in thu
sewer system. The City uses the average monthly water usage from December through
February for determining the average winter wâter usage, and hence the estimated monthly
sewer flow. In fuly of each year, a monthly charge is calculated for each customer that
includes both the fixed service charge and a usage cllarge based on the averaged winter
water usage and the uniform wastewater usage rate. That charge is then billed monthly for
tl're ensuring 12-month period.
_ Ih: City has a small number of large industrial customers (primarily food processing).
Each of these customers pays for wastewater service based on actual wastewater flows and
loading characteristics. Industrial rates for ctischarging into the City's domestic sewer
collection system are included in Exhibit IV-1. Separate (lower) rates apply to the few
inclustriai users that discharge into the industrial line, which requires less treatment.
At present, tenants of unmetered multi-family aparlnents are individually billed for
water and wastewater services. As water meters are installed the billing for these services
will be fransferred from tenants to property owners. As described in the previous section, it
is impractical and infeasible to install water meters on each dwelling unit and one or a few
master meters will be needed for each aparhnent complex.
THE REED Gnoup, Iuc DRAFT 1./3/201e Pacr 40
CITY oF LODI WATER AND WASTEWATER RATE STUDY
Exh¡bit lv-1
City of todi
Current Wastewater Rates
Monthly Flat Water Rates (Unmetered)
Single Family and Multi-Family Residential Dwelling Units
1 bedroom $
2 bedroom S
3 bedroom $
4 bedroom $
5 bedroom $
Mobile Homes
Any Size S
Schools
Per SSU (18 students = 1 SSU) S
Non-Residentia I
Per SFU S
Monthly Service Charges {Metered}
Up to 3/4" meter
l" meter
1. L/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
Wastewater Usage Rates {Meteredf
All Customers, Except High Strength
Usage Rate (S/CCF of water use)
High Strength Users
Flow (per MG annually)
BOD (per L,000 lbs annually)
SS (per 1,000 lbs annually)
S 2s.40
5 +o,sz
s 7e.06
5 124.33
s 232.29
s 38s.s2
s 768.28
5 t,227.76
27.90
37.20
46.49
55.79
65.09
27.90
36.18
37.20
2.89
3,730.00
616.00
385.00
s
s
s
s
Notes:
(1) Wastewater rates were last adusted in 20L6 based on Resolution 2016-109
CONTINUING TRANSITION TO METERED WASTEWATER RA'TES
The City continues to install water meters on all unmetered water service connections.
In FY 17-18, the City completed Phase 7 oÍ the meter retrofit proglam. Phase I will
commence in FY 19-20, followed by Stage 9 to install meters on apartment complexes and a
small number of remaining non-residential accounts.
The conversion to metered wastewater billing lags the conversion for water billing by 18
months, This gives customers plenty of tirne to become familiar with their own water usage
and modify practices, if needed, to limit bill amounts. Because of this lag between meter
THE REED GROUP, INC DRAFT 113/2019 PAGE 41
CITY OF LODI WATER AND WASTEwATER RATE STUDY
installation and metered billing, the final conversion to metered wastewater billing may not
occur until luly 2026.
In general, most customers benefit from the transition to metered water and wastewater
rates. This is because for most customers actual usage is somewhat less than the average
usage on which flat rates have been based.
As with water billing, the transition to wastewater metered billing for multi-family
apaûment complexes will have a more significant impact on wastewater rate revenue.
Under the current flat rates, each dwelling unit is billed separately for wastewater service.
However, for a variety of reasons it is generally impractical and infeasible to install separate
water meters on each apartrnent unit. Therefore, apartment complexes will generally have
a single (or in sonre cases a few) master meters that serve the entire complex. Under the
metered rate structure, in which service charges are based on meter sizes for each connection
ancl usage charges based on actual usage and the uniform usage rate, wastewater rate
revenue from apartment complexes will likeþ be less than the aggregate flat rate revenue
from billing individual units. While the financial plan analyses contained in this shrdy
incorporate estimates for this impact as the transition occurs, the actual impact will depend
on the specific number and sizes of master meters installed as part of the meter retrofit
program for multi-family customers.
PROPOSED MULTT-YEAR WATER RATE SCHEDULES
Exhibit IV-2 summarizes proposed maximum flat and metered wastewater rate
schedules for rates to be effective in |uly 2019, as well as for each July from 2020 tl'uough
2023. The later years of this multi-year rate plan reflect the annual revenue requirements
through Fy ?3-24 based on the wastewater system financial plan presented in Section II of
this report.
Continuing with recent practice, the City should adjust wastewater rates annually based
on changes in the ENR CCI, subject to a 3.0 percent annual cap. The rate schedules shown
in Exhibit IV-2 include 3.0 percent adjustments in future years. Therefore, for the five-year
Proposition 218 rate period, the schedules reflect the maximum amount of the wastewater
rates with each adjustment. If actual inflation is less than 3.0 percent, then the implemented
schedules would be correspondingly lower.
As previously described, no rate structure changes are proposed at this time. Flowever,
it is recommended that the next rate stucly include a comprehensive cost of service update
as all water meters will likely be installed by that time and the City will have more complete
knowledge and understanding of water usage for all customers and customer classes, as well
as more accurate information on the number and sizes of multi-family master meters. This
would also be an appropriate time to examine the wastewater rates applicable to all non-
residential accounls. Beyond the special rates for high strength industrial customers (e.g.,
food processors), m¿rny utilities have non-residential wastewater rates based on strength
characteristics (e.g., low, medium, and high categories) for the variety of business categories
that exist within their jurisdiction.
THE REED Gnoup, INc.DRAFT 1/3/201e PAGE 42
Crrv op LooI WATER AND WASTEWATER RATE STUDY
Exhíb¡t lV-2
CitY of Lodi
Current and Proposed Maximum Wastewater Rate Schedules
(2) Ju|.2020(3) Jul.2021(3)tul.2022 {31 Jul.2023 (31
Rate Ad¡ustments --> 2.9%
Monthly Flat Water Rates (Unmetered)
Single Family and Multi-Family Res¡dential Dwell¡ng Units
27.90 s
37.20 s
46.49 $
ss.79 s
6s.09 s
28.71 5
38.28 $
47.84 s
s7.4L s
66.98 s
29.57 s
39.43 s
49.28 s
ss.13 s
68.99 s
30.46 s
4o.6L s
s0.76 s
60.90 s
71.06 $
31.37 s
41.83 s
52.28 s
62.73 s
73.19 s
3.V/o
32.31
43.08
53.85
64.61
75.39
$ 29.42
5 47.3eS gr.so
s 143.99
S 269.04
S 446.49
S 889.79
s 7,42t.94
4,319.90
7t3.42
445.90
3.eÁ 3.0%3.M"
1 bedroom
2 bedroom
3 bedroom
4 bedroom
i 5 bedroom
i Mobile Homes
¡ Any Size
Schools
: Per SSU (18 students = 1 SSU)
Non-Residential
Per SFU
Monthly Service Charges (Metered)
Up to 3/4" meter
1" meter
, 1 1/2" meter
s
s
s
s
$
s zt.so $ zsJt s 2s.s7 s 30.46 s 31.37 $ 32.31
S 27.s0 S 28.71 S zs.sz $ 30.46 S 31.37 S 32.31
s 37.20 $ 38.28 s 3s.43 s 40.61 s 41.83 5 43.08
2" meter
3" meter
4" meter
6" meter
8" meter
r WastewaterUsage Rates {Metered)
All Customers, Excepl High strength
r Usage Rate {S/ccF of water use) S
High Strength Users
Flow (per MG annually) S 3,
I BoD fper 1,000 lbs annually) S
, SS (per 1,000 lbs annually) S
S zs.¿o
s 40.e2
s 7e.06
S 124.33
ç 232.29
5 38s.s2
s 768.28
S t,zzt.te
5 26.14
s 42.11
$ er.ss
s L27.94
s 239.03
S 396.70
S 790.s6
5 t,263.37
s 26.92
5 43.37
S es.zs
s 131.78
S 246.20
S 408.60
s 814.28
5 1,3tL.27
5 27.73
s 44.67$ se.¡os 13s.73
S 253.se
S 420.86
S 838.71
S 1,340.31
s 28.s6
s 46.01
$ sg.es
s 139.80
S z6L.2o
S 433.49
S 863.87
S 1,380.s2
2.8e5 z.gt $ :.oe $ s.rs 5 tza $ :.s¿
730.00
616.00
385.00
S 3,83s.17
5 633.86
S 396.17
S 3,9s3.32 S 4,o7L.92 S 4,194.08 S
s 6s2.88 5 672.41 s 692.64 s
s 408.06 $ 420.30 s 432.91 $
Notes:
(11 Wastewater rates were last adusted in 201-6 based on Resolution 2016-109.
: {2)AnnualchangeinENR20-CitiesConstructionCostlndexfor20lS(basedonDec.2017toDec.2018).
(3) Estimated adjustments based on the annual change ¡n the ENR index each April 30, subject to 3.0% cap.
THE REEÐ GROUP, INC DRAFT tl3/2A1.e PAGE 43
Exhibit ll-8City of todiWaterFinancial PlanF( !1-la w ß-19 FY 19-20Rate Adjqstments -->Ft20-27 FV2r-22 FV22-23 ty23-24 Fy2+25 Fy25-26 ç't25-27 Ff27-2A Fy2A_29 Fy2g-gÙ2.April3.O%lanuary7,7!'1,3007,447,900846,6004,204715,100303,8001,08r.,4001,666,100155,600151,70069,6002,969,7566,745,000a4%January3.t 6January?.o% 2,ty6January January2,304,0O06,000,0005,150,000643,20037't,300109,8002.O%lanuary5 4gs,ooo gS 6,900,000 Ss 6,414,000 ss 601,000 sS 377,300 S5 18s,3oo S5s 7,s9s,0005 ?,249,0ooS 521,300s 3n3OO5 779,700ss 7,803,000I 1,MïþOOs 491,400S 177,3oos 190,8002.M"January2.VÁJanuary2.OrÁJanuary2,Vèlanuarys6,359,0002.O%lanuarys6,74-1,800WATER OPERANNG FUND (FUND 560)Beg¡nn¡ng BålanceOperatint RevenuesFlat Rãte Revenueseruice Charge RevenueUsage Charge RevenueBABS SubsidyMiscelleneous Revenuelnterest EarningsTotal OperatinS Revenuesoperating ExpeNe! and TrânsfersW¡ter Adm¡nistråt¡onWID Water PurchasesOperat¡ng Transfer OutDamage to PfopenyWater ProductionElectricityWater Oistr¡butionSurface Water Treatment FacilityElectr¡c¡tyWater ConservationDBCPDebt 5erviceTransfer to Capital Fund (Fund 561)5 3,s74,ooo I 3,600,000 5 3,498,0û0 S z,955,ooo 5 2,630,000s s,009,000 $ s,079,000 s s,446,000 $ 5,570,000 5 s,s7s,0o0s 4,422,023 s 4,345,000 S 4]73,s0O S 4,90s,000 S 4,84s,000s 609p66 S 662,040 S 662,000 S 662,000 S 662,000S 3U,741 S 384,700 5 377,3oO S 377,300 S 377,300S 47,005 5 i.s8,ooo 5 1s9,000 S 69,000 5 96,600s 3,59"t,764 s 3,226,236 5s,299,000 52,300,200 53,218,900 53,661,100 $4,363,900 56,178.100 54,865,700 54,999,700 Ss,990,2001,464,0OO6,511,000s,722,OOO622,aOO377,300131,1007,195,0006,903,000s77,700?77,300146,0007,392,OOO7,A7O,OOO550,10037"t,300150,0007,9A7,OOO7,626,400460,200377,300202,400514,046,734 5r4,22a,740 S14,91s,300 S14,538,300 $14,185,900 S14,594,300 S14,828,200 S14,972,6û0 S15,199,000 S15,s39,400 Sls,gz2,3so S16,307,500 S16,6s2,900Isss)$!,472,szsr,429,42t820,560S r,667,2305 7,448,4s15 821,s00s 4,080s 694,100s 292,920s 1,0s0,000S 1,617,s90s 1s0,0005 747,440s 67,s40s 2,969,X56s1,22s,s901,768,5001,528,400aTz,ooo4,300736,600315,1001,113,8001,775,108161,400156,10071,7002,967,9562,208,0005 1,821,3ooS 1,57o,ooos 898,200S 4,400s 7s8,600$ 326,9005 1,147,1005 x,t66,6oos 167,400s 160,7005 73,9005 2,966,ss65 2,082,ooo$ 1,875,s00S 1,612,800$ 925,100s 4s0o5 781,3005 339,100$ 1,181,40ûS 1,819,100S 173,60ûS 165,3005 76,1005 2,952,6s6$ 1,97o,oooS 1,931,500S 1,556,8005 9s2,900S 4,600s 804,700S 3s1,8oo5 7,2r6,ioo5 1,873,000S 18o,1oos 170,100s 78,3005 2,929,320S 869,0001,988,9001,703,500981,5004,700828,700365,3001,253,0001,928,500187,000175,10080,5002,907,2593,881,0û02,O48,4001,7s1,5001,010,9004,800853,400379,3001,290.20a1,985,700L94,200180,10083,0002,845,4s22,398,000$ 2,109,400S 1,802,200s 1,041,200s 4,900s 879,200$ 394,1005 1,328,900S 2,o44,7oos 201,800s 185,300s 85,600S 2,as6,572s 1,51s,0002,L72,400L,454,400L,072,4005,000905,5004@,500r3æ,1OO2,10s,s002æ,7OO190,70088,2002,a29,5002,342,000S 2,237,2s0S 1,9o8,oooS 1,104,600s 5,100$ 932,600$ 425,sooS 1,409,600S 2,16B,zoos 217,900s 196,200s 90,900s 2,798,974S 2,424,ooa2,303,7001,,963,2097,r37,7005,200960,400M2,7001,451,6002,232,600226,400202,00093,6002,764,8r52,7A9,OOO55sssssss)s$5ss)sss5$ssss)5)$s5($5)ss)$553,542372,144950,-150$ 1,2s3,6875 165,3935 83,8845 77,4765 2,967,6s6s 3,868,331End¡ng BalanceOperating Reserve (50%)Available FundsDebt Serv¡ce Coverage {min. 1.25}$ 3,749,14s s s,218,979 I 2,!OO,U4 $ 3,21&944 5 3,6$,r.449 4,865,742 S 4,999,748 5 S,eSO,228 S 6,3s9,001 I 6,747,786 S ô828,38s5s,014,0005s,465,0005s,s8s,0005s,706,0o0ss,831,000s5,9s3,00056,07s,000s6,202,000s6,333,0005-,46i,No5;¡os,ooo5s,z¿zpooSs¡gzpoo5(r,264,8551 S {165,021}9(3,284,7s6)512,487,056) S(2,16e,856)S(1,s84,0s6}5 103,0s1 9(1,336,2se)Slr:.æ,2sz)S 1476/7215 lz41,oool S 786 S {63,61s)S 2,48 $ 2.21 S 2.46 S 2.25 S 2.06 S 2.13 S z,rs S 2.11 S z.tz S 2.18 5 2,24 S 2.31 S 2.37The Reed Group, lnc.DRAFT-'1/8/2019
tr/AIER CÂPTTAL FUÀrû (FUì|O 5611Beginning BalanæRevenues and lransfèrs lnlnterest Earn¡ngsTrañsfer from Operating FundTransferfrom Water IMF FundTolal Revenues and Transfe6 lDCãpiþl PÞgrãm Expehd¡turesCapitål ProiectsTolal Cap¡tal Prug. Expend.Ending BalañcewAfER rMr FUND (FUND 5621Beg¡nning Ealan@Revenues and TransfeE lnlnterest Earning5Wãter IMF RevenueTqlal Revenues and Transfets lnWater IMF Expend. & TransfeEWater IMF ProjectsTransferto Cap. Fund for PþjedsTolal Water IMF Expend.Ending ÊalanceOwed Fund 560 for Debt S€rvices 95,079 5 144,410 5Is$ssss$$s 3,868,331 s 1,225,590 s 6,745,000 s 2,208,000 s 2,082,000 s 1,970,000 s 869,000s s $ s5o,ooos s s s$ 3,868,331 s 1,225,s90 $ ¿69s,000 s 2,208,000$ 3,819,000 s 1,370,000 $ ¿69s,000 5 2,208,000( t¿¿ ¿10 tsA((-$$$s51,000 $ 2,398,000 s 1,61s,000 5 2,342,000 S 2,+24,OOO 5 2,-sssss789,0003,88s2,0s2.000 sx,970,000 s 859,000 53,s81,000 92,39s,000 S1,615,000 $2,342,000 52,424,0D0 $2,789,000s2,082,000 s1,970,000 5 869,000 53,381,000 $2,398,000 s1,615,000;2,342,0DO s2,424,000 s2,789,000s3,819,000 $1,370,000 s7,6es,000 $2,208,000 s2,o82,ooo s1,970,000 s 859,000 s3,88r.,000 $2,39s,000 51,615,000 S2,342,000 5z,4z4,ooo S2,789,000$ 7O2,S1s 57,O7s,382 $1,sss,7oo É1,181,200 5r,766,7oa 52,3s2,7OO5 ZO,4OO 5 64O,sO0 51,304,200 52,013,800 5?',777,700 S3,s80,600 54,442,9OO3s,400 s s3,000 $55o,1oo s 572,4OO 5600 s 19,200 s619,500 5 644,500 S60 400 $ 83,200 s 107,400 s697,s00 s 725,7OO s 754,900 s- s 46,700 s476,310 s 528,800 ss 9s0,000 sg71,800 s595,500 s39,100 s670,500 s133,3007a5,40t362,44Ls 362,481s 476,370 s s7s,5o0$ 58s,s00s 625,400$ 667,300$ 620,100s 663,700s 709,600s 7s7,9oo s 808,9005 862,300s 918,700950,0005 3,039,000 Ss-ss$55s)5$)5ss55 3,o39,ooo Ss1,06s,296 51,s5s,692 s1.181,200 sL,766,7OO s2,392,100 s 20,400 s 640,so0 51,3r)4,2fxt S¿013,800 52,771,7oo $9,59,qq0 S!¿44!,900 Ss,361,60Os s,267,794 $ 9,80s,S71 s 10,3943?s 5L7,931,679 s 13,468,0s0 s 1s,0O¿687 s 16,s4s,s0Û5 18,083,006 s 19,621,s07Is5s 21,159,1ss $ 22,697,9ss s 24,236,297 Í 2s,772.7O1Ft 17-L8 tY 18-19 FY 19-208,443,6008,695,1008,953,800Ft24F25 ÍY25-26 Rl9,781,50010,077,300to3a2,ooa2,88s,4s2 s 2,856,s72 52,829,5002,398,000 s 1,615,000 s 2,342,0û015,199,000 s15,539,400 $15,922,3004,999,748 s s,990,228 $ 6,359,0016,333,000 s 6,467,000 $ 5,606,000Oper. & Maint. CostsDebt Service Cosl5capital Prog. TransferProposed RevenuesEnding BalanceTarget Oper, Reservelvlin, Oper. ReserueCurrent Revênuess 7,0s9,366s 2,967,6s6s 3,868,331Ë 74,A46,7345 3,749,145$ 5,o14oooS 2,so7,ooo5 t4,o47,7r27s 2,969,1s6s 1,22s,s90s 14,228,7405 5,298,979s s,46s,000s 2]32,sO0s !4,732,74As 8,199,3005 2,969,7s6s 6 745,0005 14915,300$ 2,300,244s s,s85,oo0s 2,792,s00s 14342,300s 2,967,9s6s 2,2o8,ooos 14,53&3005 3,2L8,944S 5,706,000s 2,8s3,000s 14,111,300S 2,966,ss6s 2,082,000s 14,185,900s 3,Ê6L,L44s s,831,000s 2,91s,s00s 14006,900s 2,9s2,6.55s 1,970,000s 14,584,300s 4,368,944s s,9s3,000ç 2,976,soos 14,014,3005 2,798,9!4 Ss 2,424,OOo 5s 16,307,s00 ss 6,747,786 ss 5,747,000 s11,018,5002,764,8r52,7a9,OOO16,652,9006,828,3856,892,000$$sss9,220,50010,695,800$ z,9z9,s2o s 2,907,2s9s 869,000 s 3,881,000S t4,Bz8,2oo S 14,972,600S 6,178,081 5 4,865,742s 6,07s,000 5 6,202,000s 13,930,200 5 13,821,600 S 13,781,000 S 13,838,400 S 13,919,300 S 13,982,500 S r4,OO7,9AOThe Reed Group, lnc.DRAFT-1/8i2019
FY 17-182.996lulyFY 1&19 FY t9-20 Fy 2ù2t Cy 27-22 Ft 22-23Exh¡bit ll-10Cíty of todiWastewater System Financial Plân$ 2,619,500 Ss 7,458,500 5s't,267,4O0 ss 211,900 sS 419,700 SS 4m,ooo SFv 2t-24 FY 2ç25 Fy 2s-26 Fy2g-27 Fy 27-,! Fy 28-29 Fy 2S3ot.ú3.W.1.M1-úâ3.ú/o3-(Ht.wo3.'DÊs 12,e67,860 s1s,36s,382 511,730,300 511,403,300 513,990,100 573,322,200 S9,69s,600 54,200,2@ 56,743,s00 57,ss1,200 53.278,100 gs,865,300 S¿sO7,goORat€ Miustments -->$ 3,297,s00S 6,113,3005 s,796,900S r8o,ooos 3,150,000S 22o,ooo55-3,393,600 s6,343,600 56,032,s00 s211,900 s353,400 5400,000 s3.9y.luly3,015,6006,889,0006,Ê31,7O0211,9006,0004,704,900639,800840,100770,5001.2,800I 9,896,6005 9,430,200s 211,900$S 239,700)-S 4oo,ooo!,767,600't,372,8006,6003,676,400764,7001,m2,600919,90014,60055 10.264,900s 9.798,100s 277,9005$ 98,3005 4oo,ooo5 L0,647,Læ5 xo,18o,7oos 211,900s 176,000$ 4oo.ooo5 11,044,0005 1o,27o,ooos 211,900Þ-S 22s,2oo5-S 4oo,oooJulyJuly-ulyJulyJulyJulVJulyJu ly1.096lulvufas{åtrF p.f..tnårtr'¡6 ru!!ÞF,unq 9¡qlBeginning BalanceOperatirg RwenuesFlat Rate Revenueservice Charge RevenueUsage Charge RevenueMiscellaneous RevenueGrant Revenuelñterest Earningslrans. Éroñl(To) WW Âate Stab.Trans. Érom WW IMF Fund for DSTdal Opcrâting Rêven!€sOperating Exp€nses ðnd L¿n5f€6Wastewater AdministrationOperating Transfer OutDamâge to PropertvWhìte Slouth WPCFElectricitySan¡tary System Ma¡ntenãñceStorm Drainage Mãintenancelndustrial System MaintenanceWater/Wastewêter PersoñnelWetershed EduråtionDebt serv¡cêIrãnsfer to Capital Fund (Fund 531)Total Oper. Exp€nses ãnd TransfeßEnding Balan<eOper¿ting Reserue (50/o)Ava¡lable FundsDebt Seru¡ce Coveraee (m¡n. 1.25)ss55ÞÞss5ss5s5$5()55342,700,1.00,000s 15,672,971 S18,7s8,100 S16,73s,000 S17,49s,700 S18,377,100 Sr9,O0s,40o 51s,737,700 520,276,600 920,2s7,100 S20,178,400 520,773,sO0 S21,61s,700 S22,1s1,1004,071,9005,576,6005,21s,0432U,OO7400,282205,7402,698,2007,740,7007,554,900211,900399,700400,0002,405,4004,626,3008,s0¿000217,900126,000400,0001,239,0009,245,7008,9s8,20021r,900202,XOO400,0002,335,40Õ8,313,5008,186,0002rL,90E290,90040t,000s 7,324,72a5 1,708,270s 2,861S 3,828,052S 629,4705 889,128s 565,918S s.ssoS 739,7125 42,290s 2,896,7765 rÊ45,1s4S 1,397,140 S 1,439,000s 1,083,71û S 1,116,20074,27076,5006,100s 6,2005 6,300S 6,,too4,84s,800 S 4,990,800 S s,r4o,2oo I s,zs4,4oos55)55Þs)ssss$5$s5sÞ$Þs$55s5sss$sss$S5s)s5ss5ssss$sÞ)s1,481,700 s 7,526,7Ot I 7,s77,7OO S 1,618,500 S 1,666,6001"149,700 S 1,184200 S 7,219,700 5 1,2s6,300 S 1,2940007,7t6,4001,332,8006,s005,4s3,100747,400973,500893,10014,30090,8007,820,2007,474,0006,7005,784,9007A7,0007p32,900947,40014,9005 1,874s00S 1,4s6,400S 6,800s s,9s8,40oS 810,600S 1,063,400s 97s,700S 1s,2oo)-s 98,s00s r,6s2,6æs 6,061,0m1,930,300L,soo,7007,0005,137,000834,9001,09s,0001,004,60015,500101,3001,656,6006,29A,OOOs$sI$55$5sÞ5,8004,434,580603,060797,730725,A9012,z$t5,9004,567,800627,200815,700748,00012,500659,00086s,200793,60013,100678,800891.1004n,40013,400699,200977,7OO841,9007!,700720,20094s,200867,20014,00078,7O081,00083,40085,80088,30093,3002,869,60095,9001,650,8004,ß32,@0s 3,006,5763,006,700 S3,003,200 S3,005,900 S3,006,500 s3,002,500 s3,374,000 52,868,100s10,208,149 $ 4702,0m 5 2,222,ooo S 6,r6s,000 $ 9,3s3,000 $11,6s1,000 g 3,463.000 g 4920,000 Ê10,463,0005 72,777,947 522¡ß,r4s S17,1r1,5OO S14,909,400 S19,045,000 522,632p00 S25,233,100 $X7,?33,300 919,010,400 $24,890,s00 $19186,300 S19,973,100 S20,s80,300,ÀrfEllrÂlR ç¡pftAt Flmo.l¡t fþ 9$11Beglnn¡ng Ealance 5L,067,O97 5 246,8sL 5s$ss-$s$5-SS-5595s L,34s,754 s7O,2O8,r49 S4,702,000 52,222,00Õ Sô06s,000 S9,3s3,000 511,65!000 53,463,000 S4,12O,OOO 510,463,000 54,632,000 S6,061,000 S6,293,000s _ sl,ooo,ooos _ s s s _ s 5 I _ S 5 S SCapilal Progrâm ExpsdituresWastewater Capital OutlayWastewater PlantTotal Capital Prog, Expend.End¡ng Balan(e5 2,166,000 511,455,000 54,702,000 52,222,Ot0 S6,065,000 S9,3s3,000 511,651,000 S3,463,000 54,q2O¡N 510,463,000 54,532,æ0 S6,061,000 S6,29&000lnterest Eârn¡ngslransfer from Operat¡ng FundTransfer from wW lMt Fund6,067,0006,205,0006,791,0007,135,0007,045,0007,214,0006,777,0006,9s6,000 s ¿141,000s10,146,8905s,773,237 Ss,198,800S7,646,100S6,832,200S3,05s,6005{2,s90,800)S (391,s00)S 945,200S(3,93s,900)S (911,700)5 ss1,90o5L,ï37]OO2.64 3.51 2.45 2.62 2.a2 2.94 3.09 2.80 3.18 3.U 5.45 5.75 5,86s 820,000 s3,955,000 s3,193,S00 s1,034,000 s3,661,000 S 394,OOO S3,594,000 S1.761,000 S3,813,000 52,560,000 S2,t40,000 S4,166,000 $4,291,000S 1,346,000 S7,s00,000 91,s09,000 gt,18s,00o S2,4u,ooo g8,9s9,ooo 98,0s7,000 S1,702,000 91,107,000 g¿803,000 S1,392,000 S1,895,000 Ë2,007,000Thê R€êd Group, lnc.DRAFT - 1/8/2019
Êxhlbit ll-10 - ContinuedCity of tod¡wâstewater System Financ¡al PlanFy 17-18 Fy 18-19 Fy 1$20 Fy 2ç21 Í\ 2t-22 Fy 22-23 Fy 2124 Ft 2ç25 N 25-26 rY 26,27 Ff 27-28 FY 28-29 tY 29-30WÁSItllrATËR IMF Fultlg (fUND. 5331Beg¡nning BalanceS 7s9,967 Ss9S 503,776 S- s 21,400 5903,ß0 s 287,800 s28,400 s94,900 s809,400s 712,500s 621,7005 s39,9OO$ 467,600s 4Os,7005 3ss,û00s 316,4005 290,700S 279,0005 282,2OO5 301,400lnterest EarningsWastewêter IMF RevenueTotal R€venues and TransfeF lnWastewater IMF Exgend. & TransTersWåstewãter IMF ProjectsTransfer to Oper. for Debt 5eruiceTrånsfer to Cap. for ProjectsTotal warlewâter IMF Expehd.End¡ng BalanceOwed Fund 530 for Debt Sed¡cesrcnMwAlEa rMç FufiÞ (FU$Þ 5!51Beginn¡ng BalanceRÈvenûès ãnd Tlâñrf€fs lnlnterest Earn¡ngsStormwater IMF RevenueTdtãl Revenues âîd Trânsfêrs lnStormwâter lMf Expend. & TransfeEStormwater IMF Projects $Trânsfer 10 Cåp. for Pro¡eds STotal Slormwater IMF Exp€nd,Ending Balancen¡¡slÊwAltß RAîE sfAgru?4l.lon Fgrlp lÊllllo g¡q)Beg¡nn¡ng BalanæRevenues and Transfers lnlnterest Earn¡ngsI r¿nslers From/{ I ol uper. hunolotal Revs. and Transters ln/(outÌEndlng BalânceOper. & M¿int. CostsDebt Seru¡ce Costscap¡tal Prog. TransferProposed Rev€nuesEnd¡ng BalanceTårget Oper. ReserveMin. Oper. ReserueCurrent Revenues18,700 s X6,200 $ 14,000 5 IZ,2OA 5299,s00 s 311,sOO 5 324,100 5 337,100 S32,100 s98,700 ss 2,782,æ0 s10,700 $ 9,500 s 8,700 s 8,400 $3so,7oo 5 364800 S 379,600 S 394,800 S8,500 s 9,000410,700 5 427,2005 sa3/76 S 903,130S 309,200$ 31S,2005 327,7æ S 338,1005 349,3005 361,4005 374,380 S 388,300S 403,200S 419,200S 436,2005->-S s 4oo,oooS 1,ooo,ooo S -400,000400,000400,000400,000400,000400,000400,000400,000s1,OO0,OOOs 4OO,O00s 40O,OOOs 4O0,O0Os 4OO,OOOS 400,0005 400,0005 400,000s 400,000s 400,000s 40û,000s 400,0005 s,s46,s49S s,899,s08S 6,8s2,S23S 7,803,9635 e,7s6,618S 9.709,s43$10,660,668511,778,96s 512,569,613S13,s60.933$13,903,793514,247,463 $1.4592.9335 s25,574 5 930,384$ 94s,70051,06e,000S1,æ9,800S1,338,600$7,485,70A S(1,14O,4m1S{1,0s8,900)S {970,300)S (874,200}S {770,100)5 {6s7,600)sss400,000400,00015,330ss36,000 s 40,2s0 s 44,600 s (34200)s (31,800)s (29,100)5 (26,200)s i23,100)5102,800s 106,900s 111,3009 115,700$ 120,400s 125,200s 130,3009 13s,6OOs$9,7A0)141,0007,759s 7,7ss s 1s,330s 123,300s 130,800s 138,8ms 747,IoO s 1ss,90os 81,sO0s 88,600s 96,100s 104,100s 112,s005 121,300782,æO)ss5s( o¡erlr ê d<1i, a 1ßanm { riqqrm ( r??f,6nn q r8q7m (frrÁn4Mt (tl osaqoot q lg?o.?ml 3 lR?4-2ml 3 ¡??0-1ool q 4657.5m1 ç ls36.38ols 500,0005 500,000s s00,000$ sls,ooos s3o,soo9 546,400s 562,8005 579,700$ 597,100s 615,000s 633,500$652,50019,600672,70020,200ss15,50015,000s5)s19,000$18,500s(16,90016,4001s,90077,400 5-$17,900 5,sss ls,ooos 1s,s0o5 1s,e00s 16,4005 16,9005 77,4005 t7,900 S 18,s00S 19,0009 19,600S 20,200(cnôôm4(mmñ((tqm<qloqmq%4o({62ßm+qæ7m(sc7-loo361s.mo3633.500S652.500E672.10ôS592,300Fy 17-18 Fy 18-19 Fy 1+20 Fy 2$21 Fy 2t-22 Fy 22-23 Fy 23-2| Fv 24-25 FY 25-26 FY 26-27 Í't 27-28 FY 28-29 FY 2+30s 8,s35,411 s 9,728,420 $ 9,402,800 s 9,684,200 s s,974,100 s10,272,s00 s10,s79,600 s10,896,300s 2,896,776 s3,006,576 $3,006,700 s3,003,200 s3,00s,900 $3,006,s00 $3,002,500 s3,374,0æs 1,345,7s4 s7A,208,749 s 4,7O2þOO s 2,222,W0 s 6,06s,000 s 9,3s3,000 s11,6s1,000 5 3,463,000S rs,672,97t S18,7s8,1m $16,73s,o00 517,495,7oo S18ì77,7ú $19.00s,400 519,737,7oo 52a,276,6æs 1s,862,890 'L1,7AOß37 s11,403,800 s13,990,100 s13,322,200 s 9,69s,600 s 4,2OO,2OO 5 6,743,5ús s,716,0O0 s6,067,000 s6,205,000 s6,344,000 s6,490,000 $6,640,000 s6,791,000 57,135,000s 3,320,000 s 3,39s,s00 5 3,567,500s 75,46a,922 518,578,1m 57s,672,20O S1s,943,200 S16,301,900 $16.39s,900 S16,s46,s00 S16,498,4005t].,222,3ooS 2,868,100I 4,92o,ooos2O,2s7,rOOs 7,990,200s 7,04s,000S 3,522,500s 16,019,400s 11,ss7,900s 2,869,600s 10,463,000S 20,178,¿!oo$ 3,278,100s 7,274,ùOOs 3,607,000S 1s,503,300S 11,903,s00s 1,6s0,800S 4,632,000S 2Õ,773,sooS 5,865,300s 6,777,OWs 3,388,500S 1s,482,800$ 12,2s9,s00s 1,6s2,600S 6,061,000$2t,67s,lÙo5 7,5O7,9OOS 5,956,0005 r2,6zs,7oo5 1,6s6,600S 6,298,000s 22,1s1,1005 I,O7A,7OO5 7,747,ú0s 15,682,100 s 15,854,200The Reed Group, lnc.DRAFT - 1/8/2019
Proposition 218 Notification and Protest Hearing Process
For Proposed Increases to Water and Wastewater Rates
Summary
The Lodi City Council will consider proposed future water and wastewater rato increases at a
public hearing at7:00 p.m., Wednesday, March 20,2019, at the Carnegie Forum, 305 West Pine
Street, Lodi. A majority protest would sûop the proposed future increases. If you wish to protest
the proposed increases written protests may be made in person at the hearing or delivercd to:
City of Lodi
Attention: City Clerk
221 West Pine Street
Post Office Box 3006
Lodi, California 9524 I -1 9l 0
Explanation of Protest Process
Proposition 218 requires that the City provide a notice of the proposed future rate schedule to all
properfy owners forty-five (45) days prior to holding a public hearing. If a majority of the
properby owners or renters who pay the utility bill file oppositions to the increase, the increase
will not take effect. A protest must contain a description of the property owned sufficient to
identify the property. The address or assessor's parcel number is shown on this mailing.
If the name on the written protest is not shown on the last equalized assessment roll of San
Joaquin County as the owner of the propeúy or on the utility account, the signer of the proûest
must also submit written evidence of ownership or rentership and utility bill responsibilify.
At the public hearing, Council shall hear all protests and tabulate the ballots. One written protest
per parcel, filed by the or¡.ner or tenant (payrng the utility bill) of the parcel shall be counted in
calculating a majority protest to a proposed new fee or charge subject to the requirements of
Section 6 of Article )OII D of the California Constitution. If the votes conflict, the City will
count the no vote.
Explanation of Proposed X'uture Increases
City Staff is requesting that the City Council authorize continuation of the existing practice of
inflationary based adjustnents to water and wastewater rates in an amount up to the lesser of
three percent (3%) or the actual amount of annual inflation for the next five years to pay for
anticipated operating and maintenance costs, debt service obligations, and capital program needs
as well as the maintenance of prudent financial reserves for both the water and wastewater
utilities. The initial increase in water rates would be effective in April 2019, followed by
inflationary adjustments each January I from 2020 tlvough2023. Wastewater rate adjustments
would occur each July I from 2019 through2023.
For rate setting pu{poses, the City of Lodi determines inflation as the annual percentage increase in
the Engineering News Record's 20-Cities Construction Cost Index ("ENR'). The change in the
ENR for 2018 was 2.9 percent. Therefore, City staff proposes that the initial increases for both
water and wastewater rates be 2.9 percent. Water rates would initially be adjusted effective April l,
2019 andwastewater rates would initially be adjusted effective July 1, 2019.
Tlrereafter water rates would be adjusted each January I from 2020 through2023 based on the
annual change in the ENR as of September 30, subject to a3o/o annual cap. An exception will occur
in January 202T. AL that time, water rates will be reduced to the rates that existed in 2016, as
previously approved by the City Council in Resolution 2017-23.
After the initial wastewater rate increase in July 2019, wastewater rates would be adjusted each July
1 from 2020 through 2023 based on the annual change in the ENR as of March 31, subject to a3Yo
annual cap.
The proposed initial adjustment to water and wastewater rates, as well as the maximum potential
future rates based on this proposal are presented in the schedules atthe end ofthis notice. They
include both flat rates and metered (usage-based) rates for both water and wastewater utilities. No
changes to the water or wastewater rate structures are proposed at this time.
Explanation of Proposed Temporary Water Shortage Rate Surcharges
With metered water rates, water usage restrictions during an extended drought can have a
financial impact on the water utility because the reduction in water sales revenue can exceed the
reduction in water system costs. The proposed temporary water shortage rate surcharges were
calculated by assigning a portion of the estimated financial deficit created by water shortage
conditions to customers in proportion to each customer's metered water usage. This approach
ensures that each customer bears a proportionate share of the costs associated with water
shortage conditions.
If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would be
implemented when the City Council declares awater shortage emergency necessitating
mandatory water use reductions exceeding 10 percent. Temporary water shortage surcharges
would be applied to the water usage rates (but not to monthly service charges or flat water rates),
and the amount of the surcharge would vary with the magnitude of required water use reductions.
Water shortage rate surcharges have been designed such that customers meeting water use
reduction goals will have lower water bills than their normal water bills with normal water usage.
The proposed temporary water shortage rate surcharges are expressed as apercentage ofthe
normal water usage rates. The amount of the surcharge would depend on the water use reduction
goal established by the City Council. The specific rates shown in this notice are an example,
based on proposed (April 2019) water rates. As an example, with Minor Shortage condiúons a 5
percent water shortage rate surcharge would temporarily increase the Tier I residential water
usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Otherwater
usage rates would be similarly affected as shown in surcharge schedule. Monthly service
charges and the flat rates for unmetered customers would be unaffected. The temporary
surcharge would be rescinded when the City Council declares an end to mandatory water use
restrictions.
The City Council currently has no plans to implement the proposed temporary water shortage
rate surcharges, but they would be available to help address financial needs during a future
drought. Adopting the surcharges at this time would enable timely implementation during a
future water shortage condition.
Basis of Proposed Rate Calculation
The proposed annual water and wastewater rate adjustnents are justified basetl on estimated
future costs associated with ongoing operation and maintenance, edsting debt service
obligations, and capiøl program needs æ well as the need to maintain prudent financial reserves.
The water and wastewater rate revenue requirements were detennined based on financial plans
developed as part of a water and wastewater rate study. The Water and lï'astewater Rate Study,
prepared by The Reed Group, Inc. is available at wü'rv.lodi.qov or at the Public Works counter in
City Hall. The rationale and calculations of the temporary water shortage rate surcharges are
also described in the same report.
Conclusion
If you have any questions about this notice, please call the Public Works Department at
(209)333-6706 between 7:30 a.m. and 5:30 p.m., Monday through rhursday, and between
8:00 a.m. and 5:00 p.m. on Friday. City Hall is closed every other Friday.
JENMFERM. FERRAIOLO, Ciry Cterk
City of Lodi
City of todi
Current and Proposed Maximum Water Rate Schedules
Current fl) Apr.2019 Jan.2020 l3'l lan.2Û2l {11 Jan. 2022I3l Jan.2023 f3l
Rate Adjustment -->
Monthly Flat Water Rates (Unmetered)
Single Family Residential
L bedroom S 32.84
2 bedroom S 39.44
3 bedroom S 47.27
4 bedroom S 56.79
5 bedroom S 68.11
Multi-Family Un¡ts
1 bedroom S 28.19
2 bedroom S 33.81
3 bedroom S 40.58
4 bedroom S 48.68
Non-Residential
PCr ESFU S gS.+¿
Monthly Service Charges {Metered)
Up to 3/4" meter S 21.87
L" meter $ 34.34
LU2" merer S 65.25
2" meter S 102.52
3" meter S 189.50
4" meter S 313.73
6" meter S 624.03
8" meter s 996.55
l0" meter s 1,431.26
Water Usage Rates (Meteredl -- S/CCF
Single Family Residential
Tier 1 (0-10 CCF) S o.gz
rier 2 (11-50 CCF) S 1.29
Tier 3 (> s0 ccF) S 1.60
Multi-Family S 1.15
Non-Residential S 1.15
3L.88 s
38.2e s
4s.89 $
ss.14 s
66.13 s
2e.88 s
3s.83 s
43.01 s
s1.s9 5
27.37 s
32.82 s
3e.40 s
47.26 s
28.1s s
33.80 s
40.s8 s
48.68 s
2.9%3.O%
33.79 s
40.s8 s
48.64 s
s8.44 s
70.09 s
2e.oL s
34.79 s
47.76 s
so.os s
34.80 s
41.80 s
s0.10 s
60.19 s
72.!s s
-8.4%
S zr.zEs 33.34
S 63.34s se.s3
s r.83.98
s 304.sss 6os.8s
s 967.s2
s 1,389.s7
32.84 s
39.44 s
47.27 s
56.79 s
68.11 s
3.O%
33.83
40.62
48.69
58.49
70.r5
29.O4
34.81
41.80
50.14
S 22.s3
S 3s.37
s 67.20
s 10s.60
s 19s.19
s 323.14
S e¿z.zs
s 1,026.4s
s r,474.2A
3.O%
s
s
s
s
s
s
s
s
s
s 4o.s8s 41.Sos gS.Zgs gg.¿¿s 40.62
s 22.s0
S ss.s+
s 67.L4
s 10s.49
s 19s.00
s 322.83
s 642.13
s 1,02s.4s
5 7,472.77
s 23.18
s 36.40
S 6e.1s
s 108.6s
s 200.8s
s 332.s1
s 661.s9
s 1,0s6.21
s 1,s16.9s
S 2L.Bj
s 34.34
s 6s.24
s 102.52
s 189.s0
$ 313.73
5 624.03
s 996.ss
$ 1,431.26
s
$
s
$
s
1.oo I
1.33 s
L.6s s
1.18 s
1.18 s
1.03 s
7.37 5
1.70 s
1.22 s
r.22 s
o.e4 s
1.2s $
1.s6 s
t.72 s
r.72 s
o.e1 s
r.2s s
L.6! s
1.1s s
1.1s s
1,00
1.33
1.66
1.18
1.18
Notes:
{1) Water rates were last adjusted in 2017 based on Resolution 20L7-23, which includes a rate rollback in
January 2021 to the water rates that were in effect in 2016.
{2} Annual change in ENR 20-Cities Construction Cost lndex for 2018 (based on Dec. 2017 to Dec. 2018).
{3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap.
City of Lodi
Current and Proposed Maximum Wastewater Rate Schedules
Current lll Ju|.2019 12Ì Jul. 2020 (3) Jul. 2021 l3l Jul. 2022131 Jul. 2023 f3l
Rate Adjustments --> 2,9%
Monthly Flat Water Rates (Unmetered!
Single Family and Multi-Family Residentíal Dwelling Units
1 bedroom 5
2 bedroom $
3 bedroom 5
4 bedroom 5
5 bedroom S
Mobile Homes
Any Size 5
Schools
Per SSU (18 students = 1 SSU) S
Non-Residential
Per SFU S
Monthly Seruice Orarges (Meter€dl
Up to 3/4" meter $
1" meter S
1 1/2" meter S
2" meter 5
3" meter S
4" meter 5
6" meter $
8" meter 5
27.90 5
37.2A $
46.49 5
ss.79 5
65.os 5
30.46 5
40.61 s
s0.76 5
60.90 s
71..06 s
28.7L 5
38.28 5
47.84 s
s7.4t s
66.s8 s
29.s7 s
39.43 s
49.28 5
ss.13 s
68.ss s
3,OYo
s 27.73
S 44.67
s 86.30
S r3s.73
S zs¡.sg
S 420.86
s 838.71
s 1,340.31
31.37 s
41.83 s
s2.28 s
62.73 s
73.19 s
?.a%
32.31,
43.08
53.85
64.6L
75.39
$ zg.qz
5 ¿z.sg
S gr.ss
S r¿:.gs
S 269.04
5 446.49
$ aas.zg
5 1,42r.94
3.O%3.OY¡
27.90 5 ZS.Zr 5 Zg.St S 30.46 5 Sr.SZ S 32.31
27.90 5 28.7L S Zs,Sz 5 Eo.¿6 5 gr.gz S ¡2.¡r
37.20 5 38.28 S ¡s.¿: $ 40.61 $ ¿r.a¡ S ¿¡.os
25.40
40.92
79.06
t24.33
232.29
38s.s2
768.28
L,227.76
5 za.MS ¿z.rr
S 81.3s
$ ntsq
$ zgg.o¡
5 396.70
5 790.s6
s 1,263.37
s 26.92
S 43.37
S 83.79S r¡r.zs
$ zqø.2ø
$ qoa.so
s 814-28
5 7,30r.27
S ze.so
5 qe .or
S 88.89
S 139.80
s 261.20
S 433.49
$ 863.87
5 1,380.s2
, Wastewater Usage Retes (Meteredt
All Customers, Except H¡gh Strength
, Usage Rate (S/CCF of water use) $
High Strength Users
, Flow (per MG annually) $: BOD {per 1,000 lbs annually) Sj ss (per 1,000 lbs annually) S
2.8s 5 Z.gt S 3.06 S 3.1s 5 z.z+ S ¡.¡+
3,730.00 s 3,838.17 s 3,9s3.32 5 4,O7t.92
616.00s 633.86s 652.885 672.47
38s.00S ¡g0.rzS ¿OA.ooS +zo,¡o
54,
s
s
194.08
692.64
432.9r
$ 4,319.s0
S 713.42
S ¿+s.so
Notes:
(1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109.
i (2) Annual change in ENR 2o-Cities Construction Cost lndex for 20L8 (based on Dec. 2017 to Dec. 201.8).
: (3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap.
City of todi
Tem Water Rate
Normal
Supply
Conditions
Potent¡al
Shortage
lVoluntary)
Minor
Shortäge
lMandatorv)
Moderate
Shortage
Severe
Shortage
lMandatorvl
Critlcal
Shortãge
lMandatorvl
I Use Reductìon Goal -->
: Temp, Water Shortage Surcharge (2)
, Monthly Sewíce Charges
, Up to 3/4" meter
l" meter
1 V2" meter
2" meter
3" meter
4" meter
6" meter
S" meter
lO" meter
Wdter Usage Røtes (S/CCF) {3)
Single Family Residential
T¡er 1 {0-10 CCF)
Tier 2 (11-s0 CCF)
Tier 3 (> 50 CCF)
Multi-Family
Non-Res¡dential
None
None
$ zz.so
S 35.34
S oz.r¿
S 105.49
s 19s.00
5 322.83
5 642.L3
$ 1,025.4s
s 7,472.77
5% toIO%
None
LO%to2O%
s%
20%to30%
[n6
30%ro50%
rs%
> 50%
20%
No Chânges to Sen/ice Charges
)
s
s
)
$
1.00 s
1.33 s
1.6s s
1.18 s
1.18 s
1.00 s
1.33 s
1.6s 5
1.18 s
1.18 s
1^1s $
1.s3 s
1.90 s
1.36 s
1.36 s
l.os s
1.40 $
t.73 s
1.24 s
1.24 $
1.10 s
1.46 s
r.82 s
1.30 s
1.30 s
1.20
1.60
1.98
L.42
1.42
Notes!
{1) ThetemporarywatershoratgeratesurchargepercentagesareshownappliedtotheproposedwaterusageratesforApril 2019
for illustrative purposes. The percentages would be applied to anythen-current water usage rates when implemented by
declaration of a water shortage bythe CÌty Council.
{2) Thetermporarywatershortageratesurchargewoudbeanincremental (percentage)increaseinthewaterusagerates,butwou
not be applied to monthly service charges or to any flat water rates for unmetered customers,
(3) ThewaterusageratesshownforMinorthroughCritical shortageconditionsincorporatethetemporarywatershortagerate
surcharges.
Proposición 218 Aviso y Proceso de Audiencia para Protestar
La Propuesta para Incrementar las Tarifas parâ el Agua y las Aguas Residuales
Resumen
El Consejo Municipal de la Ciudad considerará futuros aumentos de tarifas para el agua y las
aguas residuales, durante una audiencia pública que se efectuara el Miércoles 20 de Marzo de
2019 a las 7:00p.m en el Carnegie Fórum, 305 West Pine Street, Lodi. Una protesta mayoritaria
impedirá los aumentos futuros propuestos. Si desea oponerse a los aumentos propuestos,
protestas por escrito podrrán hacerse en persona durante la audiencia o pueden ser entregadas a:
City of Lodi
Attention: Ciqv Clerk
221 West Pine Street
Post Office Box 3006
Lodi, Califo rnia 9 5241 -19 l0
Explicación del Proceso para Protestar
La Proposición 218, requiere que la Ciudad le proporcione aviso a todos los dueños de propiedad
sobre la propuesta de estructura de tarifas futuras, cuarenta y cinco (45) días antes de que se
lleve a cabo la audiencia pública. Si la mayoría de los propietarios o inquilinos que pagan las
facturas de utilidades entablan oposiciones al aumento, el incremento no entrara en vigor. La
protesta debe contener una descrþción de la propiedad, suficiente para identificar el predio. El
domicilio o número de parcela deberá demostrmse en esta correspondencia.
Si el nombre en la protesta escrita no aparece en la última lista de tasaciones ecualizadas del
Condado de San Joaquín, como dueño de la propiedad o en la cuenta de utilidades, la persona
que firme la protesta deberá someter evidencia por escrito de ser el arrendatario o propietario y
que tiene la responsabilidad de pagarlafactura de utilidad.
Durante la audiencia pública el Consejo deberá escuchar todas las protestas y tabular los votos.
Una protesta escrita por parcela, sometida por el propietario o el inquilino (pagando la factura de
utilidad) de la parcela deberá contarse en el cálculo de protesta mayoritaria para la propuesta de
tarifa nueva o cobro sujeto a los requisitos de la Sección 6 del Artículo XIII D de la Constitución
de California. Si los votos entran en conflicto- la Ciudad no contara el voto.
Explicación de los F'uturos Aumentos Propuestos
El personal municipal está solicitando que el Consejo Municipal autorice la continuación de la
practica actual de ajustes de tarifas debido a la inflación pma el agua y las aguas residuales, en
una cantidad mínima de hasta menos de tres por ciento (3o/o), o la cantidad real de la inflación
anual por los próximos cinco años, para pagar gastos de mantenimiento y de operación,
obligaciones de servicios de deudas, y las necesidades de programas capitales, así como el
sustento de reservas financieras prudentes para ambos servicios; del agua y de las aguas
residuales. El aumento inicial en la tasa del agua entrara en vigor en Abril de 2019, seguido por
los ajustes inflacionarios cada 1ro. De Enero, iniciando el año 2020 hasta el año 2023. Los
ajustes de tarifa para el agua residual se llevaran a cabo cada 1ro. De Julio, a partir del año 2019
hasta el año 2A23.
Con el propósito de fijar tmifas, la Ciudad de Lodi determina la inflación como el incremento del
porcentaje anual en el Engineering News Record's 20-Cities Construction Cost Index ("ENR")
(ndice de Costes de Construcción 20-Ciudades). El cambio en el ENR para el año 2018 fue el
2.9 por ciento. Por lo tanto, el personal del municipio propuso que el aumento inicial para ambas
tarifas; la del agua y la de las aguas residuales sean de 2.9 por ciento. Las tarifas del agua serán
inicialmente ajustadas a partir del 1ro. De Abril de 2019 y las tarifas para las aguas residuales
ser¿án inicialmente ajustadas a partir del 1ro. De Julio de 2019.
Después de eso, las tarifas serán ajustadas cada 1ro. De Enero desde el año 2020 hastael aña2023
basado en el cambio anual en el ENR, a partir del 30 de Septiembre, sujeto a un límite anual, de 3Yu
Una excepción sucederá en Enero de 2A2I. En esa fecha, las tarifas del agua serán reducidas alas
tarifas que existieron en el año 2016, como fue previamente aprobado por el Consejo Municipal en
la Resolución2AI7-23.
Después del aumento de tarifa para el agua residual en Julio de 2019, las tasas para el agua residual
serián ajustadas cada 1ro. De Julio iniciando el año 2020 hasta el año 2023, basado en el cambio
anual en el ENR a partir del 31 de Marzo, sujeto a un límite anual de 3Yu
Los ajustes iniciales planteados para las tarifas del agua y para las aguas residuales, así como las
futuras tarif¿s máximas posibles basadas en esta propuesta se presentan en el cronograma al final
de este aviso. Se incluyen ambas tarifas, precios frjos y precios medidos (basados según el uso)
para ambas utilidades; de aguas residuales y el agua. Por ahora no hay cambios propuestos para las
listas de tarifas para el agua y las aguas residuales.
Explicación sobre la Propuesta Temporal de la Tarifa de Recargo debido a la Escasez de
Agua
Con tarifas de agua medida, restricciones sobre el consumo de agua durante una sequía
prolongada puede tener un impacto económico en la ganancia del agua, porque una reducción de
ingresos de la venta de agua, puede exceder la disminución en los gastos del sistema del agua.
La propuesta temporal de la tarifa de recargos debido a la escasez de agua, fue calculada
atribuyéndole al cliente una porción del déficit económico calculado, el cual fue causado por las
condiciones de escasez de agua, en proporción por el consumo de agua medida para cada
cliente. Este método asegura que cada cliente tenga una participación pareja en los gastos
asociados con las condiciones de la escasez del agua.
Si se adopta, la propuesta temporal de tarifa de recargo debido a la escasez de agua, como se
establece en el presente, será implementada cuando el Consejo Municipal exprese la emergencia
de escasez de agua, necesitando obligatoriamente la reducción del uso de agua excediendo el 10
por ciento. Recargos temporales por la escasez de agaa se aplicarían a las tarifas del uso de
agua þero no al cargo de servicio mensual o a las tarifas fijas de agua), y la cantidad de recargo
vanaria de acuerdo a la magnitud de las reducciones del consumo de agua requeridas.
Las tarifas de recargos debido a la escasez de agua se han diseñado de esta maneta para que los
clientes que cumplan con las metas del consumo reducido de agua puedan tener facturas de agua
rnás rebajadas que las facturas de agua de consumo de agua normal.
Las tarifas de recargos temporales debido a la escasez de agua propuestas son expresadas como
un porcentaje de las tarifas de consumo normal de agua. La cantidad del sobrecargo dependerá
de la meta del consumo reducido de agua que establezca el Consejo Municipal. Las tarifas
específicas que se demuestran en este aviso son un ejemplo, basado en las tarifas propuestas para
el agua (Abril 2019). Como un ejemplo, con condiciones de Escasez Leve, un 5 por ciento de
tarifa de recargo debido a la escasez de agua, temporalmente aumentara la tarifa de consumo de
agua residencial del Nivel 1 de $1.00 por CCF (Centum Cubic Feet) a $1.05 por CCF (un
recargo de $0.05 por CCF). Ofas tarifas de consumo de agua serifur similarmente afectadas según
se indica en la lista de sobrecargos. Cargos de servicio mensual y tarifas fijas para los clientes
sin medidores de agua serán inafectados. El recargo temporal será rescindido cuando el
Municipio declare la cesación del consumo de agua restringido.
El Consejo Municipal actualmente no tiene planes de implementar la propuesta de tarifa
temporal de recargos debido a la escasez de agua, pero estariín disponibles para ayudar a resolver
necesidades económicas durante una futura sequía. Adoptando los recargos en este momento
permitirá la implementación a tiempo durante una situación de futura escasez de agua.
Bases para el Cálculo de la Tarifa Propuesta
Los ajustes anuales de tarifas propuestos para el agua y las aguas residuales sejustifican en base
a gastos estimados en el futuro que están asociados con el mantenimiento y operación continua,
obligaciones de servicios de deudq y necesidades de programa de capital, así como el sustento
de reserva financiera prudente. Los requisitos de las tarifas de ingresos para el agua y aguas
residuales fueron determinados de acuerdo a planes finránciales desarollados como parte de un
estudio de tazas para el agua y aguas residuales. El lYater and Wastewater Rate Study (Estudio
de Tarifas para el Agua y Aguas Residuales), preparado por The Reed Group, Inc. está
disponible en el sitio web r'vr,r-rv.lodi.gor o en el mostrador del Departamento de Obras Publicas
en el Ayuntamiento. La razón fundamental y el cálculo de la tarifa temporal de recargos debido
a la escasez de agua, tambìén se describen en el mismo informe,
Conclusión
Si tiene preguntas sobre este aviso, por favor llame al Departamento de Obras Publicas al
(209)333-6706 entre lasT.30 a.m.y 5:30 p.m., de Lunes a Jueves, y de 8:00 a.m. a5:00 p.m. los
Viernes. El Ayuntamiento estii cerrado cada ofo viernes.
JENNIFER M. FERRAIOLO, Actuaria Municipal
Ciudad de Lodi
Ciudad de Lodi
Lista de Tarifas Actuales y Propuestas Máximas para el Agua
Actual (1)
Aiuste de Tarifa
Abril 2019 (2) Enero 2020(3) Enero 2021 (1) Enero 2022(3) Enero2023(3)
2.9o/o 3.0o/o -8.4o/o 3.0o/o 3.0o/o
Tarifas Fijas para el Agua Mensuales (Sin Medir)
Resiilencias Unifamiliares
1 Recamar¿$32.84 $33.79 $34.80 $3 1.88 $32.84 $33.83
2 Recamaras $39.44 $40.58 M1.80 s38.29 $39.44 s40.62
3 Recamaras M7.27 $48.64 $50.10 s45.89 s47.27 $48.69
4 Recamaras $56.79 $58.44 s60.19 $55. i4 $s6.79 $58.49
5 Recamaras $68. r 1 $70.09 s72.19 $66.13 $68.1 I $70.15
Viviendas Multifamiliares
1 Recarnara $28. 19 $29.01 $29.88 s27.37 $28.19 s29.04
2 Recamaras $33.81 834.79 $35.83 s32.82 $33.80 $34.81
3 Recamaras M0.58 s41.76 $43.01 $39.40 $40.58 $41.80
4 Recarnaras M8.68 $50.09 $5 1.5e s47-26 $48.68 $50.14
No-Residenciales
De acuerdo a ESFU
Costos de Servicio Mensuales (Con Medidor)
Hasta3/+" me1ro s21.87 s22.50 $23. l 8 s2t.23 s2r.87 822.53
l " metro s34.34 $35.34 $36.40 s33.34 $34.34 $35.37
7 /2" tnetro $65.25 867.r4 $69.15 s63.34 $65.24 s67.20
2" mefro $102.52 $r05.49 $108.65 $99.53 8t02.52 $105.60
3" metro $l 89.50 $195.00 s200.85 $183.98 $189.50 $195.19
4" metro $3 13.73 fi322.83 $332.51 $304.53 $313.73 $323.14
6" lnetro s624.03 $642.13 $661.39 $605.85 $624.03 s642.75
8" metro $996.55 $1025.45 $1056.2 r $967.52 $996.55 $1026.45
10" rnetro $1431.26 s1472.77 $1516.95 $1389.57 s|43t.26 st474.20
Tarifas de Consumo de Agua (Con Medidor) --$/CCF
Residencias Unifamilia¡es I
Nivel 1(0-10CCF)s0.97 $1.00 $1.03 $0.94 $0.97 $1.00
51.29 $1.33 $1.37 $1.25 st.29 $1.33
Nivel 3(>50CCF $1.60 $1.65 $r.70 sl.56 .$1.6,|s1.66
Multifamiliares $1.15 $1. r8 sr.22 sl.12 sl.t5 st-18
No-Residenciales $r.15 $1. 18 sl.22 $1.12 $1.15 $1.18
Notas:
(1) Las tarifas del agua fuelrn ajustadas en el 2017 basado en la Resolución 2017-23, cual incluye uua t¿sa de reducción en
E¡erc 2021 para las tarifas de agua que entraron en vigor en el 2016
(2) El Cambio anual en el ENR 20-Cities Construction Cost Index para el 2018 (basado enDic.20l7 a Dic. 2018)
(3) Los aiustes calculados basados en el carnbio anual en el índice ENR cada 30 de Septiembre, es suieto a un límite de 3.0o/o
Ciudad de Lodi
Lista de Tarifas Actuales v Propuestas Máximas nara las Acuas Residuales
Jurio2019 (2) Jurio 2020(3) Julio 2021 (3) Julio 2022(3) Julio 2023(3)
Residencias Unifamiliares v VirCendas Residenci¡les Multifamiliares
3.0o/o2.9o/o 3.0o/o 3.Oo/o 3.0o/o
Tarifas fijas para el Àgua Mensuales (Sin Medir)
Actual (1)
Ajuste de Tarifa-
1 Recamara s27.90 $28.71 s29.57 s30.46 $3L37 $32.31
2 Recamaras $37.20 $38.28 $39.43 $40.61 $41.83 s43.08
3 Recamaras $46.4e $47.84 $49.28 $50.76 $52.28 $53.85
4 Recamaras $55.79 $57.41 $s9.13 $60.90 s62.73 $64.61
5 Recamaras $65.09 $66.98 $68.99 $71.06 $73.19 s75.39
Casas Rodantes
Cualquier Tamaño 827.90 $28.71 629.s7 $30.46 $31.37 $32.3 1
Escuelas
De acuerdo ¿ SSU
(1 8 estudiantes=1 SSU
No-Residenciales
De acuerdo a ESFU
Costos de Servicio Mensuales (Con Medidor)
Hasta %" metro $25.,+0 $26. 14 s26.92 s27.73 $28.56 s29.42
1" meho s40.92 $42.1 I 943.37 s44.6'7 $46.01 s47.39
7 Vz" metro $79.06 $81.35 s83.79 $86.30 $88.8e $91.56
2" metro s124.33 sr27.94 $ 131.78 $r35.73 $139.80 $143.99
3" metro $232.29 $239.03 s246.20 $253.59 $261.20 s269.04
4" metro $385.52 $396.70 $408.60 $420.86 $433.49 v46.49
6" metro s768.28 $790.56 $814.28 $838.71 $863.87 $889.79
8" metro s1227.76 st263.37 $1301.27 $1340.3 I $1380.52 sr42t.94
s2.97 s3.06 s3.15
Todos los Clientes,
Tarifa de Uso($/CCF
Del uso de agua)
Salvo de Alta Potencia
de Utilización de Aguas Residuales (Con Medidor)
s3.24 $3.34
Coroumidores de Alta Potencia
Caudal(iluaìmæte por Mc)$3730.00 $3838.17 $3953.32 s407t.92 $4194.08 $43 19.90
BOD (ilualment€ por
1,000lbs.)$616.00 $633.86 $652.88 s672.47 M92.64 s713.42
SS(anualmente por
1,000 lbs.)$385.00 $396. l7 $408.06 $420.30 s432.91 $445.90
Notas:
(1)LastarifasdelasAguasResidt¡ales laíúlimavezquefueronajustadasft¡eenel2016basadoenlaResolución2016-109.
(2) El Cambio anual en el ENR 20-Cities Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018)
(3) l¡s ajustes qalculados basados en el cambio anr¡al en el índice ENR cada 30 de Abril, es su_jeto a un límite de 3.0o/o
Ciudad de Lodi
Lista de las Tarifas Temporales Propuestas debido a la Escasez de Aqua
Meta de Consumo
Reducido Nada 5Yø al 1jVo 1 Oo/" al 2jo/o 2Ùo/o al3ÙVo 30Vo al 50o/o >500/0
Recargo Temporal debido
a la escasez de Agua (2)Nada Nada 5o/o 10%1sVo 2$o/o
Costos de Servicio Mensu¿les
Hasta 7+" metro s22.50
l" rnetro $35.34
No hay cambios a los cobros por los servicios
I /2" metro M7.r4
2" metro s105.49
3" metro $19s.00
4" metro $322.83
6" metro M42.r3
S" metro $1025.45
10" metro s1472.77
Tarifas de Consumo de Agua ($/CCFX3)
Residencias Unifamilia¡es
Nivel l(0-lOCCF)r1.00 $1.00 $1.05 s 1.10 sl. l5 $1.20
Nivel 2(1 1-5OCCF)$1.33 $1.33 s1.40 sr.46 s1.53 s1.60
Nivel 3(>5OCCF)$1.65 $1.65 $1.73 s1.82 s1.90 $1.98
Multifamiliares $1.18 $1.18 $1.24 s1.30 $1.36 $1.42
No-Residenciales $1.18 $1. l8 $r.24 s1.30 $1.36 sl.42
Notas:
(1) l,os porcentajes de las tarifas de recargos debido a la escasez de agua que se demuestran aplicadas a la propuesta de tarifas
paraelconsumodelaguaparaAbttl20lg,sonp¿ra propósitosilustrativos. Losporcentajesseaplicaranacualquiertarifade
consulno de agua que esté vigente en esa fecha, cuando el Consejo Municipal declare la implementación de escasez de agua.
Q)Latarifa de recargo temporal debido a la escasez de agua será rur aumento incrcmental þorcenl4ie) en las tarìfas del
consumo de agua, pero no seriin aplicadas a los cobros de servicio mensuales o a ningunalarifaTrjapara los clientes sin medidor
(3) La talifa pala el consr¡mo de agua que se demuestran para las situaciones de escasez de Nivel Leve a Nivel Critico
incorþoran las t¿rifas de recargo debido a la escasez de agua.
CITY COUNCIL
MARK CHANDLER, Mayor
DOUG KUEHNE,
Mayor Pro Tempore
BOB JOHNSON
JOANNE MOUNCE
ALAN NAKANISHI
CITY OF LODI
2015 "Wine Region of the Year"
CITY HALL, 22,I WEST PINE STREET
P.O. BOX 3006
LODt, CALTFORNTA 95241 -1 91 0
(209) 333-6706 / FAX (209) 333-6710
EMAIL: pwde pt@lodi.gov
www.lodi.qov
STEPHEN SCHWABAUER
City Manager
JENNIFER M. FERRAIOLO
City Clerk
JANICE D. MAGDICH
City Attorney
CHARLES E. SWIMLEY, JR.
Public Works Director
January _,2019
SUBJEGT: Proposed Schedule of Water and Wastewater Rate lncreases
This letter to our utility customers addresses some commonly questioned aspects of the
Proposition 218 process relative to forecasted utility rate increases.
First, the CiÇ's Proposition 218 notices will not result in any increase in utility rates. The
Proposition 2'18 notice is a notice of a public hearing for the City Council to consider
proposed rate schedules and does not const¡tute a utility rate increase. ln the case of
water and wastewater rates, if the City Council approves the proposal it would set an
annual maximum limit of 3o/o for future water and wastewater rate increases, even if the
inflationary index exceeds 3%.
Second, the City has acted ûansparently by regularly presenting at public meetings the
financial models for the water and wastewater utilities that contain specific information on
the forecasted increases in costs for personnel, utilities, materials, supplies, and debt
service and lists specific system improvement projects. As recently as January 15, 2019,
this information was presented at the Shirtsleeve meeting and is available online at the
CiÇ's website (www.lodi.qov) under Council Agendas and Minutes.
Third, the financial models present the best information available that support the notion
of continued modest increases in rates. Again, the city council will not be voting on
March 20 to increase rates by 3o/o for each of the next five years. Each year, actual
numbers from the prior year and budget projections for the next year provide the facts to
the City Council so a decision can be made as to whether there should be no rate
increase or a modest increase limited to no more than 3%.
Fourth, the objective of the proposed rate schedules is to make it possible to (1) ofüet
inflationary increases in water and wastewater operating costs should that become
necessary, (2) meet mandatory debt service obligations, and (3) help replace and
rehabilitate aging infrastructure. ln the past, maximum permitted rate increases have not
been implemented and, in fact, since 2012 the average annual water rate increase has
been 2.0% and the average annual wastewater rate increase has been 1.9%.
Fifth, the recent drought and reduced water sales created some financial strain on the
Gity's water utility. To help reduce financial risk and the potential for unplanned rate
increases, the City Council will be considering adopting temporary water shortage rate
surcharges. These temporary surcharges would only be implemented during a future
drought at a time when the City Council declares shortage conditions requiring mandatory
water use reductions
condit¡ons end.
The temporary surcharges would be rescinded when shortage
Sixth, the proposed rate schedules will not be used to pay for infrastructure required to
serve the demands presented by new development. The development impact fee
program requires new development to reimburse the City for past and future investments
in water, wastewater, streets, police, fire and other inftastructure. ln fact, if new
development fee revenues exceed that forecasted in the financial models, this could
partially ofßet recommended inflationary increases.
Lastly, significant system improvements are being implemented that will, in the long term,
significantly reduce expensive maintenance costs and evenly spread utility costs (rates)
amongst our customers. These system improvements include the water and wastewater
main replacement/rehabilitation program, water meter installation program, old water
meter retrofit program, and system-wide well maintenance. And there are administration
costs to run the utilities with much of those costs related to meeting State requirements
for the operation of the wastewater treatment plant and the water treatment plant.
Sincerely,
Charles E. Swimley, Jr
Public Works Director
CONSEJO MUNICIPAL
MARK CHANDLER, Alcalde
DOUG KUEHNE,
Alcalde Pro Tempore
BOB JOHNSON
JOANNE MOUNCE
ALAN NAKANISHI
CITY OF LODI
DEPARTAMENTO DE OBRAS PÚBLICAS
CITY HALL, 221 WEST PINE STREET / P.O. BOX 3006
LODt, CALTFORN tA 95241-1 91 0
TELÉFONO (209) 333-6706 / FAX (209) 333-6710
EMAIL pwdept@lodi.gov
http://www.lodi.gov
STEPHEN SCHWABAUER
Administrador Municipal
JENNIFER M. FERRAIOLO
Actuario Municipal
JANICE D. MAGDICH
Fiscal Municipal
CHARLES E. SWIMLEY
Director de Obras Publicas
De Enero de 2019
TEMA: Programa Propuesto para lncrementar las Tarifas para elagua y las Aguas
Residuales
Esta carta a nuestros clientes de servicios públicos aborda algunas preguntas que
comúnmente cuestionan los aspectos del proceso sobre la Proposición 218
concerniente a los aumentos de servicios públicos pronost¡cados.
Primero,los avisos relacionados con la Proposición 218 del Municipio no resultaran en
ningún aumento en las tarifas de los servicios públicos o utilidades. El aviso sobre la
Proposición 218, es un comunicado sobre una Audiencia Pública para que el Gonsejo
Municipal preste consideración a una propuesta de un programa para aumentar las
tarifas, y no constituye un aumento en los servicios públicos o utilidades. En el caso de
las tarifas para el agua y las aguas residuales, si el Consejo Municipal aprueba la
proposición, se fijará un límite máximo anual de 3o/o para incrementar las tasas para el
agua y para las aguas residuales en el futuro, aunque el índice inflacionario supere el
3%.
Segundo, la Giudad ha obrado transparentemente, presentando regularmente, durante
sus juntas publicas los modelos financieros para los servicios públicos del agua y las
aguas residuales, los cuales contienen información especÍfica sobre los aumentos
pronosticados con respecto al personal, materiales, utilidades, aprovisionamiento de
materiales y servicios de deudas y listados de proyectos para la mejora de sistemas.
Recientemente, durante la reunión informaldel 15 de Enero de 2019 esta información
fue presentada, y está disponible por línea en el sitio web de la Ciudad (www.lodi.qov)
bajo el titular Council Agendas y Minutes (Agendas del Consejo y Actas)
Tercero, los modelos financieros presentan la mejor información disponible para apoyar
la noción para un modesto aumento continuo de las tasas. Una vez más, el Consejo
Municipal no votara el 20 de Marzo para incrementar las tarifas un 3% por cada uno de
los próximos cinco años. Gada año, cifras reales del año previo y proyecciones
presupuestarias para el año venidero, le proporcionan información al Consejo Municipal
para que se pueda hacer una decisión pertinente a, si se debe efectuar un aumento
modesto limitado a no exceder el 3o/o o si no se debe efectuar.
Cuarto, el objetivo de la propuesta para el plan de incrementación de tarifa, es para que
sea posible (1) compensar los aumentos de inflación del costo operativo de agua
residual y de agua, si llegaran a ser necesarios, (2) cumplir con las obligaciones de
servicios de deudas y (3) para asistir a reemplazar y a rehabilitar la infraestructura
anticuada. En el pasado, el aumento de precios máximo permitido no se ha
implementado y, de hecho, desde el2012 el promedio anual de aumento de tarifas del
agua ha sido 2.0% y el promedio anual de incrementación de tarifa del agua residual ha
sido 1.9%.
Quinto, la sequía reciente y la venta de agua reducida ocasionó algunas tensiones
financieras con el uso de agua de la Ciudad. Para ayudar a reducir el riesgo económico
y la posibilidad de aumentos de precios imprevistos, el Consejo Municipaltomará en
consideración la adopción temporal de cobros de recargos debido a la escasez de agua.
Estos recargos temporales serán únicamente implementados durante una futura sequía,
en el momento en que el Gonsejo Municipal presente situaciones de escasez
requiriendo la reducción obligatoria del uso de agua. Los sobrecargos temporales serán
rescindidos cuando la situación de escasez cese.
Sexto, la estructura de tarifas propuesta, no se utilizarâ para pagar por la infraestructura
necesaria para atender las exigencias que sean presentadas por un desarrollo nuevo. El
programa de cuotas de impacto de urbanización, le requiere al desarrollo nuevo que le
reembolse a la Ciudad por las inversiones que se hayan hecho en el pasado y en el
futuro en agua, aguas residuales, calles, policía, bomberos y ota inftaestructura. De
hecho, si las ganancias de las cuotas de urbanización exceden lo que se ha
pronosticado en los modelos financieros, esto podrÍa parcialmente compensar los
aumentos infl acionarios sugeridos.
Por último, se están implementando mejoras importantes en el sistema, los cuales a
largo plazo, reducirán significativamente costos caros de mantenimiento y distribuirá los
costos (tarifas) de utilidades equitativamente entre nuestros clientes. Estas mejoras del
sistema incluyen, la sustitución de las cañerías de las aguas residuales y conductos del
agua/programa de rehabilitación, programa de instalación de medidores de agua,
programa de reequipamiento de los medidores de agua antiguos, y el mantenimiento de
todo el sistema de norias. Y hay gastos de gerencia para administrar las utilidades, gran
parte de esos costos están relacionados con el cumplimiento de los requisitos que tiene
el Estado para la operación de la planta de tratamiento de aguas residuales y la planta
potabilizadora.
Sinceramente,
Charles E. Swimley, Jr.
Director de Obras Publicas
Proposed Rrteg - Commèrclrl O¡gãnlcs Collectlon and Procæslng Servlces
f.¡n
Slze
359
359
648
6,fe
frÉqucncy túlonthly RatË
$46.60
s9¡.19
570.11
$rco.zz
Contãmlnat¡on
$100 per occurrence
$100 peroccurrence
$1fl) peroccurrence
$loo peroccurrence
lx per week par cart
2r per week per cert
lx per week per cart
2x per week per cart
av¿ll¡ble for customers wlth 4+ carts
avallable for custorners wlth 4+ carts
lf there are any questions, please do not hesitate to cal¡ me ¡t (2091 333€630 (d¡rect office llne), or (831)
33rfl64 (cell).
Publlc Sector Servlces Månåger
central valley waste sefv¡ces
CC:
Alex Oseguera, Vlce Presldent and General Managêr WM
Sam Jager, District ManagerWM
RESOLUTION NO.2019-
A RESOLUTION OF THE LODI CITY COUNCIL
SETTING FUTURE WATER, WASTEWATER AND
SOLID WASTE RATES SCHEDULES PURSUANT TO
PROPOSITION 218 FOR R.ESIDENTIAL,
COMMERCIAL, AND INDUSTRIAL CUSTOMERS
1
WHEREAS, the Council of the City of Lodi finds as follows:
The City of Lodi provides water supply and wastewater disposal service
to its citizens and provides solid waste disposal service through a
Franchise Agreement with USA Waste of California, lnc. dba Central
Valley Waste Services (CentralValley); and
The City charges customers of the water and wastewater utilities a
charge to fund the on-going operation and maintenance of the water
supply and wastewater disposal service; and
Pursuant to Lodi Municipal Code Section I 3. 1 6.1 I 0 (Ordinance
No. 1709), the schedule of rates for solid waste collection shall be
established and adopted by the City Council from time to time by
Resolution; and
Central Valley has requested increases to the current solid waste
disposal rates for inflation and increased disposalfees as permitted under
their Franchise Agreement; and
The City engaged the services of The Reed Group, lnc., to analyze the
financial models and current rate structure within the City's water and
wastewater utilities. The final report, Water and Water Rate Update
Study is on file with the City's Public Works Department; and
Staff recommends adopting future adjustments with limits to usage-based
and flat water and wastewater rates for residential, multi-family, and non-
residential customers as presented in Exhibit A to become effective upon
City Council approval of rate increase resolutions at a future date; and
Water, wastewater and solid waste rate schedules and an analysis of
rates were provided to the City Council at a publicly noticed Council
Meeting held on January '16, 2019; and
Staff recommends approval of the Central Valley Commercial Organics
Rate schedule, as presented in Exhibit B; and
The Council directed that notice of a hearing on the water, wastewater
and solid waste rate schedules be given to the property owners and
water, wastewater, and solid waste utility customers in the City, with such
notice in both English and Spanish to include, among other matters, the
information required to be included pursuant to California law; and
2
3
4
5
6.
7
8.
9.
10.
11
12
13
14.
15.
Pursuant to California Constitution, Section 6 of Article XlllD and
Government Code 53755, such notice has been mailed to those property
owners and account holders, at least 45 days before the hearing, as
evidenced by a Certificate of Mailing on file with the City Glerk; and
The Council also directed that notice of a hearing be given with such
notice to include the information required to be included pursuant to
Government Code section 54354.5; and
Such notice has been published once each week for two weeks, in
accordance with Government Code section 54354.5, in the Lodi News-
Sentinel as evidenced by Proofs of Publication on file with the City Clerk;
and
On March 20, 2019, the City Council conducted said public hearing, at
which time the City Council heard all objections and protests to the
proposed usage-based and flat water and wastewater rates and solid
waste rates for residential, commercial and industrial customers; and
Written protests against the proposed usage-based and flat water and
wastewater rates and solid waste rates for residential, commercial and
industrial customers were not presented by a majority of the property
owners and water, wastewater and solid waste utility customers; and
The proposed usage-based and flat water and wastewater rates and solid
waste rates for residential, commercial and industrial customers are not
discriminatory or excessive, are sufficient under Government Code
section 54515, comply with the provisions or covenants of any
outstanding revenue bonds of the City payable from the revenues of the
enterprise, comply with the provisions of Title 5, Division 2, Chapter 6 of
the Government Code, and are in compliance with all other applicable
law.
NOW, THEREFORE, BE lT RESOLVED by the City Councilof the City of Lodi as
follows:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2. Levv of Charqes. Pursuant to Sections 13.08.010, 13.12.240, and
13.16.110 of the Lodi Municipal Code, the usage-based and flat water and wastewater
rates for residential, commercial, and industrial customers and the Waste Management
Commercial Organics rate schedule, as attached hereto as Exhibits A and B are hereby
approved.
Section 3. Future Adiustments. As provided by Government Gode Section
53756, the future adjustments shown in Exhibit A may be adopted annually for a period
of five years by resolution beginning March 21,2019 through December 31,2023 lor
water, wastewater rates, with Council approval following a public hearing, in an amount
not to exceed the smaller of the limits stated in Exhibit A or the percentage change in the
Engineering News Record (ENR) Twenty Cities Annual Average lndex for water and
wastewater or other index as approved by the City Council by resolution. For solid
waste rates, the annual adjustment will not exceed 80 percent of the annual change in
the Consumer Price lndex for all Urban Consumers for San Francisco-Oakland-
San Jose, California area (CPl), All ltems (1982- 84 = 100) published by the Bureau of
Labor Statistics, plus an adjustment for extraordinary increases in landfill fees, fuel and
energy costs and changes in law up to 100 percent of the annual change in the CPl. The
adjustment shall not be made if it causes rates to exceed the cost of service and Notice
of the Adjustment shall be mailed to each account not less than 30 days before the
effective date of the adjustment.
Section 4. Effective Date. This Resolution shall take effect from and after the
date of its passage.
Dated: March 20,2019
I hereby certify that Resolution No. 2019-_was passed and adopted
City Council of the City of Lodi in a regular meeting held March 20, 2019,
following vote:
AYES: COUNCIL MEMBERS -
NOES: COUNCIL MEMBERS -
ABSENT: COUNCIL MEMBERS -
ABSTAIN: COUNCIL MEMBERS -
Jennifer M. Ferraiolo
City Clerk
by the
by the
2019-
City of lodi
Current and Proposed Maximum Water Rate Schedules
Current(1) Apr. 2019(2) Jan.2020(3) Jan. 2021(1) ian. 2022(31 Jan.2023 (3)
Rate Adjustment -->
Monthly Flat Water Rates (Unmetered)
Single Family Residential
I bedroom $ ¡Z.a+ $
2 bedroom S 39.44 $
3 bedroom S al .zl S
4 bedroom S 56.79 S
5 bedroom S 68.11 $
Multi-Family Units
l- bedroom $ 28.19 S
2 bedroom $ 33.81 S
3 bedroom S 40.58 5
4 bedroom $ ¿e.6S S
Non-Residential
Per ESFU S 39.44 S
Monthly Service Charges (Metered)
Up to 3/4" meter
1" meter
1 1/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
10" meter
5 zt.st
s 34.34
5 6s.2s
s 102.s2
$ 189.s0
s 313.73
S oz¿.os
S gso.ss
$ t,431.26
Water Usage Rates (Metered) -- $/CCf
Single Family Residential
Tier L (0-1.0 CCF)
Tier 2 (11-50 CCF)
Tier 3 (> 50 CCF)
Multi-Family
Non-Residential
41.80S 38.29S 39./14S 40.52
2.9%3.OYø -8.4%7.4%3.4%
33.83
40.62
48,69
58.49
70.L5
29.04
34.8L
4L-80
50.14
5 zz.s¡
s 3s.37
5 67.20
s 10s.60
s 19s.19
$ 323.14
5 64z.ts
$ 1,026.45
$ L,474.2o
33,79
40.58
48.64
58.44
70.09
29.0t
34.79
4L.76
50.09
40.58
34.80 $
4r..80 s
so.1o s
60.1s s
72.19 s
29.88 s
3s.83 5
43.0L S
s1.s9 5
3L.88 $
38.29 S
4s.8e s
ss.14 s
66.13 $
27.37 s
32.82 s
39.40 5
47.26 5
32.U $
39.M s
47.27 s
s6Js s
68.11" s
28.19 s
33.80 s
40.s8 5
48.68 s
$
$
s
s
s
s
s
5
5
s
S zz.sos 3s.34
5 67.14
s 10s.49
5 . 19s.00
$ 322.83
s 642.13
s 1,02s.4s
s 1,472.77
$ z¡.rs
5 36.40
5 69.1s
s 108.6s
5 200.8s
5 332.s1
s 661.3e
s 1,056.2L
S 1,s16.es
5 21.23
s 33.34
5 63.34
5 ee.s3
5 183.e8
s 304.59
s 605.8s
s 967.s2
$ 1,389.s7
5 21.87
5 34.34
5 6s.24
s 102.s2
$ 189.s0
s 313.73
S ez¿.ot
S gge .ss
5 3.,43L.26
$
s
$
Þ
o.97 s
L.zs 5
1",60 s
1.1s 5
L.Ls s
L.00 s
1.33 5
1.6s s
1.18 s
1.18 s
0.94 5
7.2s s
1.s6 s
7.12 $
!.12 5
o.97 $
r.29 5
r..61 5
1.1s s
1.L5 s
1.00
1.33
1.56
1. L8
L.18
1.03 s
1..37 $
L.7A s
7.22 s
t.22 s
Notes:
(L) Water rates were last adjusted in 2017 based on Resolution 2tL7-23, which includes a rate rollback in
January
^AZ'J.lo
the water rates that were in effect in 2016.
(2) Annual change in ENR 20-Cities Construction Cost lndex for 2018 (based on Dec. 2017 to Dec. 2018).
(3) Estimated adjustments based on the annual change in the ENR index each September 30, subject to 3.0% cap.
City of tod i
Current and Proposed Maximum Wastewater Rate Schedules
Current lll Jul.2019 f2l Ju|.2020 {3) Jul.2021 tul. 2O22l3l Jul. 2023 l3l
Rate Adjustments -> 2,9%
Momhly Flât water Rates (Unmetered)
Single Family and Multi-Family Residential Dwell¡ng Units
1 bedroom
2 bedroom
3 bedroom
4 bedroom
5 bedroom
Mobile Homes
Any Size
Schools
Per SSU (18 students = 1 SSU)
Non-Residential
Per SFU
Monthly Service Charges {Metered}
Up to 3/4" meter
1" meter
1 1/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
wastewateÍ Usage Rates {Metered}
All Customers, Except High Strength
Usage Rate ($/ccr of water use) $
High Strength Users
Flow (per MG annually) S
BOD (per 1.000 lbs annually) S
55 (per 1,000 lbs annually) S
27.so 5
37.20 5
46.49 s
ss.7e $
6s.09 5
32.3L
43.08
53.85
64.6t
75.39
28.71 s
38.28 5
41.84 5
s7.4r s
66.e8 $
28.7r s
29.s7 s
3e.43 s
49.28 5
se.13 s
68.ee $
30,46 5
40.6r. 5
s0.76 s
6o.eo $
7L.o6 $
31.37 s
41.83 s
s2.28 s
62.73 s
73.Le $
3.0%
s 2e.42
S 47.39
S gr.so
$ r¿r.sg
S zes.o¿
S qqø.Æ
5 88e.79
s t,42t.s4
3.0%3.0%9.ú/"
)
s
s
)
$
$
$
)
27.eo 5 2e.57 s 30.465 31.37s 32.31
27.90 ç 28.7t s 29.s7 $ SO.¿0 s Sr.¡z s :2.:r
37.20s38.28$39.43s40.61 s41.83s43.08
s
Þ
s
$
Þ
)
s
s1,
25.40
40.92
79.06
L24.33
232.29
385.52
768.28
227.76
s 26.14
$ cz.tt
s 81.3s
S L27.94
I 239.03
5 396.70
s 790.s6
s 1,263.37
5 26.s2
$ ¿s.Ez
5 ss.lg
s 131.78
5 zqø.zo
$ 408.60
s 814.28
s 1,3s7.27
5 zt.ts
$ u.ot
S se .¡o
S 135.73
S 2s3.s9
S +zo.ee
s 838.71
s 1,340.31
s 28.s6
$ 46.01
$ es.eg
s 139.80
5 261.20
S 433.49
S 863.87
s 1,380.s2
2.8ss 2.97 s 3.06s 3.1ss 3.24s 3.34
3,730.00
616.00
385.00
S 3,s38.17
S 633.86
S 396.17
S 3,9s3.32
S osz.es
s 408.06
5 4,o7!.s2
S 672.47
S 420.30
s 4,194.08
S 692.64
5 432.91
s 4,319.90
S 7t3.42
S 44s.90
Notes:
{1) Wastewater rates were last adusted in 2016 based on Resolution 2016-109.
{2) Annual change in ENR 20-Cities Construction Cost lndexfor 2018 {based on Dec.2017 to Dec. 2018).
i3) Estimated adjustments based on the annual change in the ENR index each April 30, subject to 3.0% cap.
City of tod¡
Proposed Temporary Water Shortase Rate Su¡charses
Normaf
Supply
f¡nd¡tions
Potent¡al
Shortage
Mimr
Shortâge
{Mandatoryl
lìtloderate
Shortãge
fMardaþrvl
Severe
Shortage
lMardatoryl
Cr¡t¡câl
Shortage
lMandatorvl
Use Reduction Goãl -->
Temp. Wâter Shortåge Surcharge (2)
Monthty Service Clnrges
up to 3/4" meter
l" meter
L U2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
10" meter
Woter usoge Rotes (S/ccF) (3)
Single Family Residential
T¡er L (0-10 CCF)
Tier 2 (11-50 CCF)
T¡er 3 (> 50 CcF)
Multi-Family
Non-Residential
None
None
$ ze.so
$ 35.34
5 at.M
S ros.¿g
S 19s.oo
s 322.83
5 642.t3
$ 1,02s.4s
5 1,472.71
5% to 10%
None
LO%to20%
5%
ZO%to309,ñ
tw6
30%to50%
\5%
> 50%
20%
No Changes to Serv¡ce Charges
)
s
5
s
s
1..00 s
1.33 s
1.6s 5
1.18 5
1.L8 s
1.00 s
1.33 5
1.65 5
1.18 5
1.18 s
1.15 5
1.53 $
1.so s
1.36 5
r"36 s
1.05 s
1.40 $
L.73 s
r.24 5
t.24 $
1.10 s
1.46 5
1.82 s
1.30 $
1.3o s
1.20
1,60
1.98
1.42
r.42
Notes!
{U The tempo;w *ttet st'-utge rate surcharge percentâges are shown appl¡ed to the proposed water usage rates for April 20L9
forillustratìvepurposes. Thepercentageswouldbeappiiedtoanythen-currentwaterusagerateswhenìmplementedby
declaration of a water shortage by the City Counc¡|.
{2) Thetermporarywatershortageratesurchargewoudbeanincremental (percentage) increasèinthewaterusagerates,butwou
not be applied to monthly service charges or to ãny flat water rates for unmetered customers.
{3} The water usâge rates shown for Minor through Critical shortage conditions incorporâte the temporary water shortage rate
surcharges.
Exhibit B
Propoced Råte$ - Comm€rclal ırganlcs Collection and Procersing Servlces
C¡n
Sire
359
35e
648
1x per week pÈr cart
2x per week per cart
lx per weêk per cart
Frequency
available for customers w¡th 4+ carts
Monthly Rata
s46.60
593.19
570.1L
Contam¡nation
$100 per occurrenee
$L00 per occurrence
$100 per occurrence
2x week fol cuctomers w¡th 4+ carts r.00 occu rrence
ffi Please immediøtely conlirm receipt
o"f this.fux by cølling 333-6702
CITY OF LODI
P. O. BOX 3006
LODI, CALIFORNIA 9524 1-1 91 O
ADVERTISING INSTRUCTIONS
SUBJECT:
PUBLISH DATE:
PROPOSITION 2I8 NOTIFICATION AND PROTEST HEARING PROCESS
SATURDAY, MARCH 2, MARCH 9, AND i'IARGH {6,2019
CANCEL PREVIOUS REQUEST FOR FEBRUARY 2,20''9
LEGAL AD
TEAR SHEETS WANTED: OnE {1I plaase
SEND AFFIDAVIT AND BILL TO:
LNS AGCT. #05t0052
DATED:WEDNESDAY, JANUARY 30, 2019
ORDERED BY:JENNIFER M, FERRAIOLO
CITY CLERK
M. FARRIS
DEPUTY CIry CLERK
JENNIFER M. FERRAIOLO, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
SYLVIA DOMINGUEZ
ADMINISTRATIVE CLERK
Verify Appearance of this Legal in the Newspaper - Copy to File
LNS
Emailed to the Sentinel at classifiedl@lodinews.com at (tme) on (dste)
-(pagos)
Phoned to conflrm recelpt of all pag€ô at (tlme) _EB _PMF (ln¡tlals)
forms\advins.doc
ffi Pleøs e immedíø.tely confirm receípt
of this føx by cø 3s3-6702
CITY OF LODI
P. O. BOX 3006
LODI, CALIFORNIA 95241-ßIA
ADVERTISING INSTRUCTIONS
PROPOSITION 218 NOTIFICATION AND PROTEST HEARING PROCESS
SATURDAY, FEBRUARY 2, 2019
SUBJEGT:
PUBLISH DATE:
LEGAL AD
TEAR SHEETS WANTED: One 11} please
SEND AFFIDAV¡TAND BILL TO:
LNS ACCT. #O5íOO52
DATED:TUESDAY, JANUARY 29, 2019
ORDERED BY:JENNIFER M. FERRAIOLO
CITY CLERK
LA M-
DEPUTY CITY CLERK
JENNIFER M. FERRAIOLO, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-191A
SYLVIA DOMINGUEZ
ADMINISTRATIVE CLERK
r-rance of this Legal in the Newspa to FileVer
Ernailed to the Sentinel at classifiedl@lodinews.com at
Phoned to confirm of all atLNS
on
forms\advins.doc
DECLARATION OF POSTING
PROPOSITION 218 NOTIFICATION AND PROTEST HEARING PROCESS
(ENGLTSH AND SPANTSH)
On Tuesday, January 29, 2019, in the City of Lodi, San Joaquin County, Califomia, a
Proposition 218 notification and protest hearing process (attached and marked as
Exhibit A) was posted at the following locations:
Lodi City Clerk's Office
Lodi City Hall Lobby
LodiCarnegie Forum
WorkNet Office
I declare under penalty of perjury that the foregoing is true and correct
Executed on January 29,2019, at Lodí, California.
ORDERED BY:
JENNIFER ÍIII. FERRAIOLO
CITY CLERK
PAMELA M
DEPUTY CITY CLERK
SYLVIA DOMINGUEZ
ADMINISTRATIVE CLERK
N:\Administration\CLERK\Public Hearings\AFFADA\¡ITS\DECPOSTPWI,DOC
EXHIBIT A
Proposition 218 Notifîcation and Protest Hearing Process
Summary
The Lodi City Councit will consider proposed future water, wastewater, and contracted
solid waste rate increases at a nubEc hearins at 7:00 p.m.. Wednesdav. March 20. 2019. at
the Carneeie Forup. 905 West Pine Street. Lod¡. CA. A majority protest would stop the
propns"A future rate increases. ff you wish to protest the proposed increases written
proies* may be madc in person at the public hearing or delivered prior to the hearing to:
City of Lodi
Attention: City Clerk
221 West Pine Street
Post Office Box 3006
Lodi, California 95241-1910
Written protests must be received by the end of the public hearing, including those mailed
to the City. Wo postmarks wilt be accepted; thercfore, any protest not physicalþ received
by the close of the public hearing, whether or not mailed prior to the hearing sh¡ll not be
counted.
Explanation of Protest Process
Proposition 218 requires that the City provide a notice of the proposed future rate schedule to all
properfy owners forty-five (45) days prior to holding a public hearing. if a majority of the
pïoperty owners, or renters who pay the utility bill, file oppositions to the increase, the increase
will not take effect. A protest must contain a description of the property owned sufftcient to
identiff the property, The address or assessor's parcel number is shor,vn on this mailing.
If the name on the written protest is not shown on the last equalized assessment roll of San
Joaquin County as the owner of the property or on the utility account, the signer of the protest
must also submit written evidence of ownership or rentership and financial responsibility for the
utility account.
At the public hearing, Council shall hear all protests and tabulate written protests. One written
protest per parcel, filed by the owner or tenant (payrng the utility bill) of the parcel shall be
counted in calculæing a majority protest to a proposed new fee or charge subject to the
requirements of Section 6 of Article XIII D of the Califomia Constitution. If the votes conflict,
the Cþ will count the no vote.
Explanation of Proposed f,'uture Incrcascs
CiÇ Staff is requesting that the City Council authorize continuation of the existing practice of
inflationary based adjustments to water and wastewater rates in an amount up to the lesser of
three percent (3Vo), or the actual amount of annual inflation, for the next five years, to pay for
anticipated operating and maintenance costs, debt service obligations, and capital progtam needs
as well as the maintenance of prudent financial reserves for both the water and wastewater
utilities. The initial increase in water rates would be effective on April 1,2019, followed by
inflationary adjustments each January l't from 2020 through 2023. rtrastewater rate adjustments
would occu¡ eàch July l't from 2019 through 2023.ln accordance with the City's existing solid
waste franchise agreement with Cenhal Valley Waste Services (Waste Management), solid waste
rate adjustmenß would occu¡ eaeh April l" from 2019 through 2023.
For water and wastewater rate setting purposes, the City of Lodi determines inflation as the a:rnual
percentage increase inthe Engineering News Record's 20-Cities Construction Cost Index ("ENR').
The change in the ENR for 2018 was 2.9 percent. Therefore, City staff proposes that the initial
increases for both water and wastewater tates be 2.9 percent. Water rates would initially be adjusted
effective April 1, 2019 and wastewate'r rates would initially be adjusted effective Jrfy 1, 2019.
Thereafteç water râtes woukl be adjusted each January I't from 2020 through 2023 based on the
annual change in the ENR as of September 30th, subject to a three percent (3%) annual cap' An
exception will occur in January 2A21. Atthattime, watcr rates will be reduced to the rates that
existed in 2016, as previously approved by the City Council in Resolution No. 2Al7-23.
After the initial wastewater rate increase in July 2019, wastewater rates would be adjusted each July
I't from 2020 through2023 based on the annual change in the ENR as of Mmch 3l'r subject to a
three percent (3%) arurual cap.
In accordance with the City's existing solid waste franchise agreement with Waste Management,
the City of Lodi proposes to continue increasing contracted solid waste charges by the amount
equal to 80 percent of the annual change in the Consumer Price Index (CP! for all Urban
Consumers for San Francisco-Oakland-San Jose, California Atea, All ltems (1982-84=100) plus an
adjustrnent for extraordinary increases in landfill fees, fuel and energy costs, and changes in law up
to 100 percent of the change in the CPI; or 100 percent of the annual change in the CPI without the
other adjustments but with a certification that costs had increased by more than 100 percent ofthe
change in the CPI. To comply with new State law, a new category of solid \ryaste rates is proposed
to be added and titled, "Commercial Organic Collection and Processing Services." These new
proposed organic collection rates will not affect single family residential customers at this time.
The proposed initial adjustment to waûer and wastewater rates, as well as the ma:<imum potential
futlre water, wastewater, and contracted solid waste rates based on this proposal are presented in
the schedules at the end of this notice. The schedules include both flat rates and metered (usage-
based) rates for both water and wastewater utilities. No changes to the water or wastewater rate
structures are proposed at this time.
Explanation of Proposed Temporary Water Shortage Rate Surcharges
With metered water rates, water usage restrictions dwing an extended drought can have a
financial impact on the water utility because the reduction in water sales revenue can exceed the
reduction in water system oosts. The proposed temporary water shortage rate surcharges were
calculated by assigning a portion of the estimated financial deficit created by water shortage
conditions to customers in proportion to each customer's metered water usage. This approach
ensures that each customer bears a proportionate share of the costs associated with water
shortage conditions.
If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would
only be implemented when the City Council declares a watü shortage emergency necessitating
mandatory water use reductions exceeding 10 percent. Temporary water shortage surcharges
would be applied to the water usage rates (but not to monthly service charges or flat water rates),
and the amount of the surcharge would vary with the magnitude of required water use reductions.
Water shortage rate surchmges have been designed such that customers meeting water use
reduction goals will have lower water bills than their normal water bills with norrnal water usage.
The proposed temporary water shortage rate surcharges are expressed as a percentage ofthe
normal water usage rates. The amount of the surcharge would depend on the water use reduction
goal established by the City Council. The specific rates shown in this notice âre an example,
based on proposed (4pri12019) water rates. As an example, with Minor Shortage conditions a
five percent (5%) water shortage rate surcharge would temporarily increase the Tier 1 residential
water usage rate from $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Other
water usage rates would be similarly affected as shown in surcharge schedule. Monthly service
charges and the flat rates for unmetered customers would be unaffected. The temporary
surcharge would be rescinded when the City Council declares an end to mandatory water use
restrictions.
The City Council currently has no plans to implement the proposed temporary water shortage
rate surcharges, but they would be available to help address financial needs during a future
drought. Adopting the surcharges at this time would enable timely implementation during a
future water shortage condition.
Explanation of Proposed Commercial Organic CollecfÍon and Processing Services Rates
Assembly Bilt 1826 was passed in September 2014 to aid in meeting the statewide goal of
diverting 75 percent of waste from landfillsby 202A. The law requires businesses, including state
and local agencies with businesses that generate certain amounts of organic waste per weeþ to
have organic waste recycling programs on or after April l, 2016. Organic waste includes food
waste, green waste, landscape and pruning waste, nonhazardous wood waste and food-soiled
paper.
AB 1826 has phased thresholds triggering when agencies must have a progfam in place to
comply with the law. The City of Lodi has not had any qualifying businesses until January 1,
2019 when the threshold was reduced to require agencies to have a progtam in place to
accommodate businesses generating 4 or more cubic yards of solid waste per week. Residential
customers will not be affected by these new rates.
Basis of Proposed Rate Calculation
The proposed annual water and wastewater rate adjustrnents are justified based on estimated
fr¡ture costs associated with ongoing operation and maintenance, existing debt service
obligations, and capital program needs as well as the need to maint¿in prudent financial reserves.
The water and wastewater rate revenue requirements were determined based on financial plans
clevelopecl as part of a water and wastewater rate study. The Water wtd Wastewater Rute Study,
prepared for the City of Lodi by The Reed Group, Inc,, is available at www.lrrdi.gov or at the
Public Works counter in City Hall during regular business hours. The rationale and calculations
of the temporary water shortage rate surcharges are also described in the Rate Study. The
proposed annual contracted solid waste rate adjushents are based on the City of Lodi's existing
franchise agreemelrt with Waste Management for Solid WsstÊ Collection
Conclusion
If you have any questions regarding this noticg please call the Public Works Departnent at
Q09)333-6706 between 7:30 a.m. and 5:30 p.m., Mondoythrough Thursday, ¿nd between
8:00 a.m. and 5:00 p.m. on Friday. City Hall is closed every other Friday.
JENNIFERM. FERRAIOLO, City Clerk
City of Lodi
City of Lodi
Current and Prop osed Maximum Water Rate Schedules
Clrrrent lll Anr-2019 lan.2O2O l3l lan.2O2t 11ì Jan 2022 l?l lan.2O23 {31
Rate Adiustment -->
Monthly Flat Water Rates (Unmeteredl
Single Family Residential
I bedroom S
2 bedroom S
3 bedroom S
4 bedroom S
5 bedroom $
Multi-Family Units
I bedroom $
2 bedroom S
3 bedroom $
4 bedroom $
Non-Residential
Per ESFU S
Monthly Service Charges (Metered)
3e.44s 40.s8s 41.SOs 3S.29s 39.44$ 40.62
32.84 $
39.44 s
47.27 s
s6.79 s
68.11 s
28,19 s
33.8r $
40,s8 $
48.68 $
5 21.87 $
5 f4.34 Ss 6s.2s $5 102.s2 $
$ 189.s0 $
$ 313.73 s
$ 624.03 $s es6.ss s
$ 1,431.26 s
33.79 s
40.s8 $
48.64 $
s8.44 s
70.09 $
29.01 $
34.79 s
4L.76 s
s0.09 s
34.80 s
41.80 s
s0.10 s
60.le $
72.t9 5
29.88
35.83
43.01
51.59
31.88
38,29
45.89
55,14
66.13
21.2?
33.34
63.34
99.s3
183.98
304.59
605.85
967.52
1,389.57
S 32.84 Ss ag.q+ I
$ 47.27 $
$ s6.7e 5
$ os.1l $
2.9To
22.50
35.34
67.L4
105.49
r.95.00
322.83
642,L3
1,025.4s
3.O%-8.4%?.o%3.0%
s
s
$
s
27.37 s
32.82 I
39.40 s
47.26 s
33.83
40.62
48.69
58.49
70.15
29.44
34.81
41.80
50.14
Up to 3,/4" meter
1," meter
1f2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
10" meter
5 z¡.re Ss 36.40 ss 6s.1s s$ 108.6s ss 200.8s s$ 332.s1 ss 661.39 s
$ 1,056.21 $
s 1,s15.9s s
28.19 $
33.80 s
40.s8 $
48.68 $
5 21.87S ra.s¿$ ss.z¿
5 102.52
$ rag.so
s 3r.3.73
s 624.03
S 996.ss
s 1¡31.26
$ 22.s3
s 3s.37
$ 67,20
s 105.60
s 19s.19
s 323.r.4
5 642.7s
$ :"oze.¿s
$ 1,474,20
1,00
1.33
1.66
1.18
1.18
1,472.77
Water Usage Rates (MEt€red) " $/CCF
Single Family Residential
Tier 1 (0-10 CCFI
Tier 2 (11-50 ccF)
Tier 3 (> 50 CCF)
Multi-Family
Non-Residential
o.s7 $
L.ze $
1.60 st.ls s
1.1s $
1.oo s
1,33 5
1.6s s
1.18 $
1.18 s
1.03 s
t.37 s
L.70 s
r.22 $
r.22 s
0.e4 $
1.2s s
1,s6 $
1.12 $
T.L2 S
o.e7 $
L.zs $
1.61 $
x.1s $
1.1s $
s
$
$
$
s
Notes!
{1) water rates were last adjusted 1r:.2AL7 based on Resolution 20!7-23,which includes a rate rollback in
January 202!to the water rates that were in effect in 2016'
{2) Annual change in ENR 20-Clties Constructíon Cost lndex for 2018 (based on Dec' 2OL7 lo Dec' 2018)'
(3) Est¡mated adjustments based on the annual change in the ENR index each September 30, subiect to 3.A% ca9,
Gty of lodl
û¡rrent and Proposed Man'mum Wastewater Rate Sch€dules
ô¡renl lLl Jul.2019 f2l Júl.2O2O l3l Ju|.2021 Jul.2022 t3l ,ul.2lX23 t3l
: Rate Ad¡ustments --> 2,9%
i
I nnonthly Flat Water Rates (Unmeteredl
: single Family and Multi-Family Resldential Dwelling Units
3.Wo 3.O%3.096 3.0%
1 bedroom 5
2 bedroom S
3 bedroom $
4bedroom S
5 bedroom S
Moblle Homes
Any Size $
Schools
Per SSU (18 students = 1 SSU) S
Non-Resldential
PeTSFU S
i luonttrty Service Gtarges lMetered)
Up to 3/4" meter SI l" meter S: 1 112" meter Sj 2" meter S
' 3" meter S
4" meter S' 6" meter $
; 8" mete¡ $
; l¡lrastewater Usagê Rates lMeteredl
i All customers, Except High strength
, usage Rate ($/ccF of water use) s
. Hlgh Strength Users
Flow (per MG annually) S. BOD (per1,000 lbs annually) $
' SS (per1,000 lbs annually) S
27,9A s
37,20 s
46.49 I
s5.79 s
6s.09 s
21,90 s
27,90 s
37,20 s
28.7r s
38.28 $
47.84 $
s7.4L s
66.98 $
28.7L $
28,7L s
38.28 s
29.57 s
3e.43 s
49.28 5
s9.13 s
68.99 5
30.46 $
40.61 s
s0.76 s
60.90 $
71.06 s
3r.37 $
41.83 $
s2.28 s
62,73 s
73.19 s
32.31
43.08
53.85
64.61
75,39
s 29.42
S 47.39
$ gr.so
S 143.99
$ 269.04
s 4É}6,49
s 889.79
5 L,42t.94
$ 4319.e0
$ 713.42
s 44s.90
2s.57 5 30.46S ¡r.¡zS 32.31
29.57 s 30.46s gr.¡Z$ ¡z.rr
39.43$ ¿0.0r$ 41.83$ ¿¡.Oe
25,40
40.92
79.06
124.33
232.29
38s.52
768.28
1,227.76
3,730.00
616.00
38s.00
S 26.t4
S 42.11
s 81.35
S nt.gq
$ zsg.os
S ¡go.zo
s 790.s6
$ 1,263.37
s 26.s2$ +s.szS ss,zg
S 131.78
$ zqø.zo
$ 408,60
$ ar¿,zg
5 7,301.27
s 27.73S +¿.ozI se.soS ras.zss 2s3.59
s 420,86
s 838.71
s 1,340.31
$ 28.s6S +e.or$ ss.sg$ r¡s.¡o
S 26t.20
s 433.49
$ ss¡.sz
s 1,380.52
2.895 2.97 S 3.06$ 3.1s$ 3.24S 3.34
$ 3,838.17 5 g,gss.sz 5 4,07r.92 g 41s4.08
s 633.86 $ 6SZ.AA s 672.47 s 692.64
s 396.17 $ +os.oo $ 420.30 s 432.s1
f{otes:
; (11 Wastewater rates were last adusted in 2016 based on Resolution 2016-109,
;(21 Annual changelnENR20-OtiesConstructionCostlndexfor20lS(basedonDec.2017toDec.2018l.
r (3, EstlmatedadJustmentsbasedontheannualchangeintheENRlndexeachApril 3Osubjectto3,0%cap.
Clty of todl
Prooosed Temoorcry Shctrrê Râte Surchâ¡pes
Normal
Supply
Condtlons
PÕtentlãl
Shorta6€
Minor
Shortage
lMandatorvl
Moderate
Shortage
(Mandatorvl
Severe
ShortaEe
lMandatorv)
Crídcal
ShoÉåge
ffìlândaton )
Use Reduct¡on Goaf -->
Temp. wåter Shortag€ Surcharge {21
Monthty Serulce Choqes
Up to 3/4" meter
, l" meter
1U2" meter
2" meter
3" meter
4'meter
6" meter
8" meter
10'meter
; woter Usage Røtes ls/ccF) (3)
Single Fâm¡ly Residehtial
Tier 1(G10 CCF)
Ter 2 (11-50 CCF)
ller 3 (> 50 CCF)
Mutti-Family
Non-Residential
None
None
5/¡ lo LOlo
None
10%to2O%
5%
ZQYoto3O%
t0%
30% to 50%
ts%
> 50/o
2O/"
s 22.s05 ¡s,sc
$ 67.14
$ 10s.49
s 19s.00
s 322.83
s 642.13
S 1,02s.4s
$ t,472J7
No tranges to Service Charges
1.0s s
x.40 s
r.73 s
L.24 s
1.24 s
s
5
s
s
s
1.00 s
1.33 s
1.6s $
1,18 I
1.18 s
1.15 s
r..s3 s
r.e0 $
1.36 s
1.36 s
1.10
1.46
L.82
1.30
1.30
1.00
1.33
1.65
1,18
1.r.8
s
s
$
s
Þ
s
$
$(
s
1,20
1.98
t-42
r.60
t,42
f{otes:
(1) ThetemporarywatershoratBeratesurchargepercentagesareshownapplledtotheproposedwaterusageratesforApril2019
for ¡llustrative purposes. The percentages would be applied to anythen-current water usage rates when implemented by
declaration of a water shortãge by the City Council.
(2) Thetermporárywâtershortageratesurchargewoudbeanlncrementãl(percentage)lncreãselnthewãterusagerãtes,butwou
not be applied to monthly serv¡ce charges or to any flat water rates for unmetered customers.
(3f ThewaterusageratesshownforMinorthroughCr¡ticalshorta8econdit¡ons¡ncorporatethetemporarywâtershortegerate
surcharges.
Proposêd nåtci - commêricôl_ojga¡rlcs Colloction snd Pro€e55lnt 5¿fvkcs
Can Slze f!9s!9ttq -.
lx per W,eek per Cãrt
:2x per Week per Cart
,¡r pgtw_esk p9I_ça|.t
:2xper Week per Cart
Monthly ßrtc
S46.60,
s93'19,
s70.11
s140.¿2
Contsm¡nrtlon
5100 per occur.ãrce
$1O0 per Occuneræe
Sl00 psrOccurrerre
$100 pr Occurrence
359
358
648
649
Ava¡lable for Customers wlth 4+ Carts
Avâllablê for Customêrs w¡th 4+ Certs
Notificación pertinente a la Proposición 218 y Aviso para el Proceso de Audienciâ para
Protestar
Resumen
El Consejo Municípal de la Ciudad considerará futuros aumentos de tarifas para el agua, las
uguus residuales y las tarifas acordadas de desechos sólidos, durante una audiencia plibliçsgue
sã efecruar-a el Miércolas 20 de Marzq de-?019 a las 7:00n.m en el Carneeie Fórum. 3Q5 riVest
Þinà Street. t,odi. Cn. Una protesta mayoritaria impedirá los aumentos futuros de tarifas
propuestas. Si desea oponerse a los aumentos propuestos, protestas por escrito podrán hacerse
ã,r p".sonu durante la audiencia prlblica o pueden ser entregadas antes se dicha audiencia en:
City of Lodi
Attention: City Clerk
221 West Pine Street
Post OfÍice Box 3006
Lodi, Califomia 9 5241 -I 9 ß
Las protestas por escrito debenin ser recibidas al final de la audienciapúbiica, incluyendo las que
fueron enviadas por correo a ta Ciudad. No se aceptaran cartas con fecha matasellada; por lo
tanto, cualquier protesta que no se haya recibido fisicamente a la conclusión de la audiencia
pública, ya sea o no enviada antes de la audiencia, no contarå.
Explicacién del Proceso para Protestar
LaÞroposición 21 8, requiere que la Ciudad le proporcione aviso a todos los dueños de propiedad
sobre la propuesta de estructura de tarifas futuras, cuarenta y cinco (45) días antes de que se
lleve a càbo la audiencia pública. Si la mayoría de los propietarios o inquilinos que pagan las
facturas de utiiidades entablan oposiciones al aumento, el incremento no entrâra en vigor. La
protesta debe contcner una descripción de la propiedad, suficiente para identificar el predio' El
domicilio o número de parcela deberá demostrarse en esta correspondencia.
Si el nombre en la protesta escdta no aparece en la {¡ltima lista de tasaciones ecualizadas del
Condado de San Joaquín, como ducño de la propiedad o en la cuenta de utilidades, la persona
que firme la protesta deberá someter evidencia por escrito de ser el arrendatario o propietario y
que tiene la responsabilidad frnanciera sobre la cuenta de las utilidades.
Durante la audiencia pública el Consejo deberá escuchar todas las protestas y tabular las
protestas por escritos. Una protesta escrita por parcela, sometida por el propietario o el inquilino
(pagando 1a factura de utilidad) de la parcela deberá contarse en el cálculo de protesta
mayoritaria para la propuesta de tarifa nueva o cobro sujeto a los requisitos de la Sección 6 del
Artículo XIII D de la Constitución de California. Si los votos entran en contlic.to, la Ciudad no
contara el voto.
Explicación de los Futuros Aumentos Propuestos
El personai municipal está solicitando que e[ Consejo Municipal autorice la continuación de la
practica actual de ajustes de tarifas debido a la inflaciónpara el agua y las aguas residuales, en
una cantidad mlnima de hasta menos de tres por ciento (37o), o la cantidad real de la inflación
anual por los próximos cinco años, para pagar gastos de mantenimiento y de operación,
obligaciones de servicios de deudas, y las necesidades de programas capitales, asl como el
sustento de reservas financiera.s prudentes para ambos servicios; del agua y de las aguas
residuales. El aumento inicial en la tasa del agua entrara en vigor el lro. de Abril de 2019,
seguido por los ajustes inflacionarios cada 1ro. De Enero, iniciando el año 2020 hasta el año
2023. Los ajustes de tarifas para el agua residual se llevaran a cabo cada 1ro. De Julio, a partir
del año 2019 hasta el año 2023. En conformidad con el contrato de lianquicia pertinente a los
desechos sólidos que existe entra el Municipio y Central Valley Waste Services (Iù/aste
Management). Los ajustes de tarifas para los desechos sólidos deber¡ån llevarse a cabo cada 1ro
de Abril iniciando el año 2019 hasta el aïto2023.
Con el propósito de fijar tarifas para el agua y las aguas residuales, la Ciudad de Lodi determina
la inflación como el incremento del porcentaje anual enel Engineering News Record's 20-Cities
Construction Cost Index ("ENR') (Índice de Costes de Construcción 20-Ciudades). El carrbio
en el ENR para el año 2018 fue el2,9 por ciento. Por lo tanto, el personal del municipio propuso
que el aumento inicial para ambas tarifas; la del agua y la de las aguas residuales sean de 2.9 por
ciento. Las tarifas del agua serán inicialmente ajustadas a partir del 1ro. De Abril de 2019 y las
tarifas para las aguas residuales serán inicialmente ajustadas a partir del lro. De Julio de 2019.
Después de eso, las tarifas serán ajustadas cada lro. De Enero a partir del a¡lo 2020 hasta el arlo
2023 basado en el cambio anual en el ENR, apartir del 30 de Septiernbre, sujeto a un llmite anual
de hes por ciento (3%) Una excepción sucederá en Enero de202I. En esa fecha las tarifas del
agua serán reducidas a las tarifas que existieron en el afro 2016, como fue previamente aprobado
por el Consejo Municipal en la Resolución No. 201?-23.
Después del aumento de tarifa para el agua residual en Julio de 20l9,las tasas para el agua residual
setán ajustadas cada 1ro. De Julio iniciando el año 2020 hasta el año 2023,basaÅo en el cambio
anual en el ENR a partir del 31 de Matzo, sujeto a un lÍmite anual de tres por ciento (3%o).
En conformidad con el contrato de franquicia pertinente a los desechos sólidos que existe entre la
Ciudad y Waste Management, La Ciudad de Lodi propone seguir incrementando los cobros
acordados de los desechos sólidos, por Ìrna cantidad equitativa de 80 por ciento de la vatiación
anual en el Índice de Precios d.e Consumo (CPI siglas en Ingles), para todos los Consumidores
Urbanos en las áreæ de San Francisco-Oakland-San Jose, California. Todos los Artlculos, (1982-
84:100) más un ajuste debido a los aumentos extraordina¡ios de tasas para los vertederos o
bastreros, los-costos de combustible y energia, y cambios en la ley hasta el 100 por ciento del
cambio en el Índice de Precios de Consumo (CPl); o 100 por cienio del cambio anual del lndice de
Precios de Consumo (CIP) sin los otros ajustes, pero con la certificación de que los coslos han
aumentado en m¿ís del 100 por ciento en el cambio del fndice de Precios de Consumo (CPI). Para
cumplir con lanueva Ley Estatal se propone que una categoria nueva para las tarifas de residuos
sólidos sea afradida y titulada, "Recolección Orgánica Comercial y Servicios de Procesamiento".
Esta propuesta nueva de tarifas para 1a recolección orgánica no afectara a clientes de vivienda
unifamiliar en este momento.
Los ajustes iniciales planteados para las tarifas del agua y para las aguas residuales, así como las
futuras tarifas máximas posibles para el agua, las residuales y las tarifas acordadas para desechos
sólidos, basadas en esta propuesta se presentan en el cronograma a1 final de este aviso. La tabla de
tasas incluye ambas tarifas, precios fijos y precios medidos (basados según el uso) para ambas
utilidades; de aguas residuales y el agua. Por ahora no hay cambios propuestos para las listas de
tarifas para el a,g;ny las aguas residuales.
Explicación sobre la Propuesta Temporal de la Tarifa de Recargo debido a la Escasez de
Agua
Con tarifas de agua medid4 restricciones sobre el consumo de agua durante una sequía
prolongada puede tener un impacto económico en la ganancia del agua, porque una reducción de
ingresos de la venta de agua, puede exceder la disminución en los gastos del sistema del agua.
La propuesta temporal de la tarifa de recargos debido a la escasez de agua, fue calculada
atribuyéndole al cliente una porción del déficit económico calculado, el cual fue causado por las
condiciones de escasez de agua, en proporción por el consumo de agua medida para cada
cliente. Este método asegura que cada cliente tcnga una participación pareja en los gastos
asociados con las condiciones de la escasez del agua.
Si se adopta, la propuesta temporal de tarifa de recargo debido a la escasez de agua, como se
establece en el presente, será únicamente implementada cuando el Consejo Municipal exprese la
emergencia de escasez de agua, necesitando obligatoriamente la reducción del uso de agua
excediendo el 10 por ciento. Recargos temporales por la escasez de agua se aplicarían a las
tarifas del uso de agua þero no al cargo de servicio mensual o a las tarifas frjas de agua), y la
cantidad de recargo variaría de acuerdo a la magnitud de las reducciones del consumo de agua
requeridas. Las tarifas de recargos debido a la escasez de agua se han diseñado de esta manera
para que los clientes que cumplan con las metas del consumo reducido de agua puedan tener
facturas de agua más rebajadas que las facturas de agua de consumo de agua normal.
Las tarifas de recargos temporales debido a la escasee de agua propuestas son expresadas como
un porcentaje de las tarifas cle çonsumo nolmal de agua. La cantidad del sobrecargo dependerá
de la meta del consumo reducido de agua que establezca el Consejo Municipal. Las tarifas
específicas que se demuestran en este aviso son un ejemplo, basado en las tarifas propuestas para
el agua (Abril 2019). Como un ejemplo, con condiciones de Escasez Leve, un cinco por ciento
(5%) de tarifa de rccargo debido a la escasez de agua, temporalmente aumentara la tarifa de
consumo de agua residencial del Nivel 1 de $1.00 por CCF (Centum Cubic Feet) a $1.05 por
CCF (un recargo de $0.05 por CCF). Oüas tarifas de consumo de agua senin similarmente
afectadas según se indica en la lista de sobrecargos. Cargos de servicio mensual y tarifas fijas
para los clientes sin medidores de agua serián inafectados, EI recargo temporal será rescindido
cuando el Municipio declare la cesación del consumo de agua restringido.
El Consejo Municipal actualmente no tiene planes de implementar la propuesta de tarifa
temporal de recargos debido a la escasee de agua, pero estanin disponibles para ayudar a resolver
necesidades económicas durante una futura sequía- Adoptando los recargos en este momento
permitirá la implementación a tiempo durante una situación de futura escasez de agua.
Explicación para ln Propuesta de tarifas para la Recolección Orgánica Comercial y los
Servicios de Procesamiento
El Proyecto de Ley 1826 fuc aprobado en Septiembre de201,4 para ayudar a cumplir la meta a
nivel estatal de desviar el 75 por ciento de desechos de los basureros o vertederos para el año
202t. Lal,ey exige a cmprçsas, incluyendo agencias locales y estatales con comercios que
generan cierta cantidad de desechos orgánicos por semana, que tengan programas de reciclaje de
residuos orgánicos a partir o a no más tardar del 1ro. De Abril de 2016. Los desechos orgánicos
incluyen desechos alimenticios, residuos verdes, residuos dejardinerfa y de podat, residuos de
leña que no sea peligrosa y papel que este ensuciado por comida.
La Propuesta de Ley 1826 ha puesto etapas para que las agencias tengan el programa empleado
para poder cumplir con la ley. La Ciudad de Lodi no ha tenido ninguna empresa que califique
hasta el lro. de Enero de 2019 cuando ei lfmite fue reducido para que las agencias tengan un
progrâma situado para acoplar a las empresas que generen 4 o más yardas cubicas de
desperdicios sólidos por semana Los clientes residenciales no serán afectados por estas nuevas
tarifas.
Bases para el C¡álculo de la Tarifa Propuesta
Los ajustes anuales de tarifas propuestos para el agua y las aguas residuales sejustifican en base
a gastos estimados en el futuro que estrån asociados con el mantenimiento y op,eración continu4
obligaciones de servicios de deuda, y necesidades de programa de capital, asl como el sustento
de reserva financiera prudente. Los requisitos de las tarifas de ingtesos para el agua y aguas
residuales fueron determinados de acuerdo a planes finánciales desarrollados como parte de un
estudio de tazas para el agua y aguas residuales. El Water and Wastewater Rate Study (Estudio
de Tarifas para el Agua y Aguas Residuales), preparado por The Reed Group, Inc. está
disponible en el sitio web rvww.lodi.gov o en el mostrador del Departamento de Obras Publicas
en el Ayuntamiento durante las horas normales de trabajo. Larazínfundamental y el cálculo de
la t¿¡ifa temporal dc recargos debido a la escasez de agua, también se describen en el Estudio de
Tasas. La propuesta de ajustes anuales de tarifas acordadas para los desechos sólidos están
basadas e'n el contrato de franquicia que existe entre La Ciudad de Lodi y rùYaste Management
para la recolección de Residuos Sólidos.
Conclusién
Si tiene preguntas sobre este aviso, por favor llarne al Departamento de Obras Publicas al
Q09)333-6706 entre las 7:30 a.m. y 5:30 p.m., de Lunes a Jueves, y de 8:00 a.m. a 5:00 p.m. los
Viernes. El Ayuntamiento está cerrado cada otro viemes.
JENNIFER M. FERRAIOLO, Actuaria Municipal
Ciudad de Lodi
Ciudad de Lodi
Lista de Tarifas Actuales y Propuestas Máximas para el Agua
Actual (1)
{iuste de Tarifr
Enero 2020(3)
t.0%
[nero 2021 (1)
4.{Vo
Enero 2022(3)
3.0%
Enero 2023(3)
3.O"/.
Abril 2019 (2)
2,90/o
Tarifirs Fijrs par¡ el Agua lVlcnsu¿¡lcs (Sln Mcdir)
Residencias Unifamili¡res
$33.79 $34.80 $3 t .88 $32.84 $33.83I Recamara $32.84
$40.58 $41.80 $38.29 s39,M $40.ó22 Reczunaras $3e.44
3 Recamaras S4't.2'7 $48.64 $50.10 Ms.89 s{'t.27 $48.69
$58.44 s60. l9 $5é.?9 $s8.494 Recamaras $s6.79 $5s. l4
$68.115 Recamaras $68. r l $70.09 fi12.19 $66. l3 $70. r 5
Viviendas Multifamiliare s
I Recamara $28.19 $29.0r $29.88 s27.37 $28.1e $29.04
2 Recamaras s33.81 $34.79 $3s.83 532.82 s33.80 $34.8 I
3 Recamaras s40.58 $41.76 $43.01 $39.40 $40.58 $41.80
4 Recamaras $48.68 $50.09 $5 r .59 s47,26 $48.68 $50.1 4
No-Residenciales
De acuerrlo a ËSFï1
Costos de Servicio Me nsuales (Con Medidor)
Ha-sta 3/¿" metro $21 .8?.s22.50 s23. I I s21.23 s2t.87 922.53
1" metro $34.34 $3s.34 $36.40 $33.34 $34.34 $35.3?
I %" metro $65.25 s67.t 4 $69. l5 $63.34 $65,24 s67,2t
2" metro $102,s2 $ 105.49 $ 108.65 $99.s3 $102.52 $105.60
3" metro $189.50 $ I 95.00 $200.85 $183.98 $189.50 $t95.19
4" metro $313.73 . 322.¡J3 $332.5 t $304.53 $313.73 $323.14
6" metro $624.03 s642.t3 s66I.39 $605.85 $624.03 $642.75
S" metro $99ó.55 $1025.45 $105ó.21 s967.52 $996.55 $102ó.45
l0" moho $1431.26 sl472.77 $ 1516.95 $1389.57 $143 r.26 $1474"2û
Tarifas de Consumo de Agua (Con
I Inifamiliares
I s0 97 $1.00 $1.03 $0.94 $0.97 r.00
Nivel 2(l 1-5OCCF)$1.29 $ t.33 s1.37 $1.25 1.29 1.33
Nivet 3(>50CCF)$1.60 $ 1.65 $r.70 $ 1.56 $1.61 s1.66
Multifûmiliûres s 1.15 $ r.rB s1.22 $r.12 l.l5 l.l8
No-Residenciales $1.r5 $r.r8 sl.22 $r.12 1.15 it.t8
del agua f'ueron ajustadas en el 2017 basado en la Resolución 2017-23, cual incluye una tasa de reducción en
Enero 2021 para las tarifos de agua que entraron en vigor en el 2016
(2) EI Cambio anual en cl ENR 20-Cities Construction Cost Index para el 2018 (basado en Dic.20l7 a Dic. 2018)
calculados basados en el cambio anual en el lndice ENR cada 30 deLos lfrnite de 3.0%
Ciudad de Lodi
Lista de Tarifas Äctuales Máximas las Residuales
Residenc
3.Ot/o 3,0%
¡ârGs
el
Julio 2020(3) JulioJulio 2019
2.94/"
(3) Julio 2022(3) Julio 2023(3)
3.0% 3.0%
Actual (t)
{luste dc Tarifn-
s31.37 $32.3 r$28.71 fi29.57 $30,46I Recamara $27.90
$41.83 $43.08$38.28 $39.43 s40.612 Recamaras $37.20
$52.28 $53.85$49.28 $50,763 Recama¡as $46.49 $4?.84
fi62.73 $64.61$59. l3 $60,904 Recamaras $55.7e $5?.41
$73. l9 $75.39$68.99 $7t,065 Recamaras $65.09 $66.98
$31.37 $32.3 r$28.? t $29.57 $30,46
Casas Rodantes
Cualquier Tamaño s27.90
De acucrdo a SSU
{ I I estudiantes-ISSU 'n90
No-Residenciales
De acuerdo a ESFU
Costos dc Servicio Mensuales (Con Medidor)
$28.56s26.14 î26.92 s27.73Hasta %" metro $25.40
$46.01 947.39$42.1 r s43.37 t44.61l" metro $40.e2
$88.89 $91.s6$8 1.35 $83.79 $86.30I Yz" metro $79.06
$139.80 $143.99$127.94 $13t.78 $13s.73?'metro $124.33
$269.04$239.03 s246,20 $253.59 $2ó 1.203" metro s232.29
8M6.49$396.70 $408.60 $420.86 $433.494" metro $385.52
$889.79$790.56 $814.28 $838.71 $863.8?6" metro $768.28
$1301.27 $ 1340.3 I $1380.52 sl42t.948" m€tro ß1227,76 s1263.37
s3.34s3.06 s3.tJ $3,24$2.e?
Todos los Clientes,
Ttifa de Uso($/CCF
Del uso dc agua)
(Con Medidor)de Utilización .Aguas
Salvo de Alta Potencia
Consumidores de Alta Potencíâ
$4319.90$3953.32 s4071.92 $4r94.08o-audal(atrualmetrte po¡ MG)$3730.00 $3838. I 7
s713.42$633.86 $6s2.88 s672.47 9692.64
BOD (anualmonl€ por
1,000 lbs.)$6 r6.00
s420.30 s432.91 $445,90$385.00 s396. I 7 $408.06
SS(ånualmonte por
1,000 lbs.)
Notæ:
(1)LastarifasdelasAguasRcsiduales lairltimavezquefueronajustadaslueenel20l6basadoenlaResoluciôn2016'109.
El Cambio anual en el ENR 20-Citics Construction Cost Index para el 2018 (basado en Dic.2017 a Dic. 2018)
f3) Los aiustes calculados basados en el cambio anual en ei Indice ENR cada 30 de
a)Ab¡il. es suieto a un llnite de 3.0%
Ciudad de Lodi
Lista de Iss Tarifas Temporales Propuestas debido a la Escasez de Agua
Met¡ dc Consumo
Redrcitlo Nndn 5o/" al ltlo/"l8o/o al 209/o 20o/o al 30Vo 3tlû/' nl 5Oo/">50Vô
Recargo Temporal debido
a la escæez de Agua (2)Nada Nada 5o/o lAYa ls%o 20Vo
Costos de Seryicio Mensuales
Hasta %" metro $22.50
l" metro $35.34
No hay cambios a los cobros por los servicios
1t/2" me1.¡o $67. l4
2" metro $105.49
3" metro $ 195.00
4t'meho $322.83
6" metro $ó42. t3
8" metlo $ I 025.45
10" mefo 81472.7',7
Tarifas de Consumo de Agua ($/CCFX3)
Residencias Unifàmil iares
Nivet ti0-lOCCF)$1.00 $1.00 $ 1.05 $1.10 1.15 sI,20
Nivcl 2(l 1-50CCF)$ r.33 i1.33 1.40 1.46 1.53 $1.60
Nivel 3{>s0CCF)1.65 $ 1.65 t-73 1.82 1.90 st,98
Multifamiliares 1. 18 s1.18 it.24 1.30 1.36 $ 1.42
No-Residenciales 1.18 1.18 it.24 t.30 $1.36 $1.42
Notas:
(1) Los porccntajes dc las tarifas dc rccargos debido a la escasez de agüa que se demuestran aplicadas a la propuesta de tarifas
para el consumo del agua para Abril 20 19, son para propósitos ilustrativos. Los porcentajos se aplioaran a cualquier tarifa de
consumo de agua que esté vigente en esa fecha, cuando el Consejo Municipal declare la implemcntacién de escasez de agua.
(2) La tarifa de recâ¡go temporal debido a la escasez de agua será un aumento iucremental (porcentaje) en las taritÌrs del
consumo de agua, pero no selán aplicadas a los cobros de servicio mensuales o a ninguna tarifa tija para los clientes sin medidor
(3) La tadfa para el consumo de agua que se demuestran pruå las situaciones de escasez dc Nivct Lcve a Nivcl Critico
incorporan las tarifas de recargo debido a la escasez de agua.
Trrlfås Propuestås -Reoþcclón Ory¡¡nlcå Comertlal y Serulclos de Prcc€¡¡mhn¡o
T¡rlle Mcn¡ualTrmatlo de reclplente
35s.
¡¡5t
64c
648
tl€cusncl¡
1¡( Semrna por r€clplenté
2x semena por reclplente -Dlsponlble parr clhnter oon 4+botes
lx Semsna por rsclplenta
2r s€mrne por r.clplente -Dlrpônlble para cllentes on 4+botes
${G.60
$93,19
$r0.11
$140.22
Contårnlnælón
$100 por c¡d¡ lrecho
$100 por cadâ hrcho
$(¡o por cedâ hocho
$100 por cad¡ hecho
CERTIFICATE OF MAITING
NOTTCE OF RATE SETTING, PROPOSED RATE INCREASE & PUBLIC HEARING DATE
l, Tiffani Butorovich, Adm¡nistrat¡ve Secretary of the Public Works Department of the City of
Lodi, under penalty of periury, certify as follows:
That for and on behalf ofthe City Clerk ofthe City of Lodi, and on February 1, 2019, I caused to
be malled a Notice of Rate Setttng, Proposed Rate lncrease & Public Hearing Ðateto all water,
wastewater and solid weste customers of the Clty of Lodi and all persons owning real property on which
these rãtes and charges are imposed and as are shown on the last equaltzed assessment roll of San
Joaguin County {mailing list on file în the offlce of the Public Works Department), â copy of which Notlce
is hereto attached and marked "Exhiblt A".
Executed on February 6,?ALg.
BUTOROVICH
I Exhibit A
ProposÍtion 218 Notification and Protest Hearing Process
Summary
The Lodi City Council will consider proposed future water, wastewater, nnd contracted
solid waste rate increases at a public hearing at 7:00 p.m., Wednesday, March 2012019, at
the Carnegie Forum,305 West Pine Street, Lodi, CA. A majority protest would stop the
proposed future rate increases. If you wish to protest the proposed increases written
protests may be made in person st the public hearing or delivered prior to the hearing to:
City of Lodi
Attention: City Clerk
221 West Pine Street
Post Office Box 3006
Lodi, California 95241-19 I 0
Written protests must be received by the end of the public hearing, including those mailed
to the City. No postmarks will be accepted; therefore, any protest not physically received
by the close of the public hearing, whether or not mailed prior to the hcaring, shall not be
counted.
Explanation of Protest Process
Proposition 218 requires that the Cþ provide a notice of the proposed future rate schedule to all
property olvners forty-five (45) days prior to holding a public hearing. If a majority of the
property owners, or renters who pay the utility bill, file oppositions to the increase, the increase
will not take effect. A protest must contain a desuþtion of the property owned sufficient to
identify the property. The address or assessor's parcel number is shown on this mailing.
If the name on the written protest is not shown on the last equalized assessment roll of San
Joaquin County as the owner of the property or on the utility account, the signer of the protest
must also submit written evidence of ownership or rentership and financial responsibility for the
utiliiy account.
At the public hearing, Council shall hear all protests and tabulate r¡nitten protests. One written
protest per parcel, filed by the owner or tenant (paying the utility bilt) of the parcel shall be
counted in calculating a majority protest to a proposed new fee or eharge subject to the
requirements of Section 6 of Article XIII D of the California Constitution. If the votes conflict,
the City will count the no vote.
Explanation of Proposed X'uture Increases
City Staffis requesting that the City Council authorize continuation of the existing practice of
inflationary based adjustments to water and wastewater rates in an amount up to the lesser of
three percent QYo), ar the actual amount of annual inflation, for the next five years, to pay for
anticipated operating and maintenance costs, debt service obligations, and capital program needs
as well as the maintenance of prudent financial reserves for both the water and wastewater
utilities. The initial increase in water rates would be effective on April 1,2079, followed by
inflationary adjustments each January l't from 2020 through2}zS. Wastewater rate adjustments
would occur each July l*t from 2019 through 2023.Tn accordance with the City's existing solid
waste franchise agreement with Cenhal Valley Waste Services (S/aste Management), solid waste
rate adjustments would occur each April I't from 2019 through 2023.
For water and wastewater rate setting purposes, the City of Lodi determines inflation as the annual
percentage increase inthe Engìneering News Record's 20-Cities Construction Cost Index ('ENR").
The change in the ENR for 2018 was 2,9 percent. Therefore, City staff proposes that the initial
increases for both water and wastewater rates be 2,9 percent. Water rates would initially be adjusted
effective April 1, 2019 and wastewater rates would initially be adjusted effective July l, 2019.
Thereafter, water r¿rtes woulcl be adjusted each January I't from 2020 through}Oz3 based on the
annual change in the ENR as of September 30th, subject to a three percent (3%) aruiual cap. An
exception will occw in January 2A2t. Atthat time, water rates will be reduced to the rates that
existed in 2016, as previously approved by the City Council in Resolution No. 7017-23.
After the initial wastewater rate increase in July 2019, wastewater rates would be adjusted each July
l't from 2020 through 2023 based, on the annual change in the ENR as of March 3l't subject to a
three percent (3%) amual cap.
In accordance with the City's existing solid waste franchise agreement with Waste Management,
the City of Lodi proposes to continue iucreasing contracted solid waste charges by the amount
equal to 80 percent of the annual change in the Consumer Price Index (CPI) for a1l Urban
Consumers for San Francisco-Oakland-San Jose, Califomia Area, All ltems (1982-84:100) plus an
adjustrnent for extraordinary increases in landfill fees, fuel and energy costs, and changes in law up
to 100 percent of the change in the CPI; or 100 percent of the annual change in the CPI without the
other adjustments but with a certification that costs had increased by more than 100 percent of the
change in the CPI. To comply with new State law, a ne\ry category of solid waste rates is proposed
to be added and titled, "Commercial Organic Collection and Processing Services." These new
proposed organic collection rates will not affect single family residential customers at this time.
The proposed initial adjustmentto water and wastewater rates, as well as the maximum potential
future water, wastewater, and contracted solid waste rates based on this proposal are presented in
the schedules at the end of this notice. The schedules include both flat rates and metered (usage-
based) rates for both water and wastewater utilities. No changes to the water or \4¡aste\¡/ater rate
structrues are proposed at this time.
Explanation of Proposed Temporary'Water Shortage Rate Surcharges
IVith metered water rates, water usage restrictions during an extended drought can have a
financial impact on the water utility because the reduction in water sales revenue can exceed the
reduction in water system costs. The proposed temporary water short¿ge rate surcharges were
calculated by assigning a portion of the estimated financial deficit created by water shortage
conditions to customers in proportion to each customer's metered water usage. This approach
ensures that each customer bears a proportionate share of the costs associated with water
shortage conditions.
If adopted, the proposed temporary water shortage rate surcharges, as set forth herein, would
only be implemented when the City Council declares a water shortage emergency necessitating
mandatory wâter use reductions exceeding l0 percent. Temporary water shortage surcharges
would be applied to the water usage rat€s (but not to monthly service charges or flat water rates),
and the amount of the surcharge would vary with the magnitude of required water use reductions.
Water shortage rate surcharges have been designed such that customers meeting water use
reduction goals will have lower water bills than their normal water bills with normal wafer usage,
The proposed temporary water shorüage rate surc.harges are expressed as a percentage of the
normal water usage rates. The amount of the swcharge would depend on the water use reduction
goal established by the City Council. The specific rates shown in this notice are an example,
based on proposed (April 2019) water rates. As an example, with Minor Shortage conditions a
five percent (5%) water shortage rate surcharge would temporarily increase the Tier I residential
water usage rate ftom $1.00 per CCF to $1.05 per CCF (a surcharge of $0.05 per CCF). Other
water usage rates would be similarly affected as shown in surcharge schedule. Monthly service
charges and the flat rates for unmetered customers would be unaffected. The temporary
surcharge would be rescinded when the City Council declares an end to mandatory water use
restrictions.
The City Council currently has no plans to implgment the proposed temporary water shortage
rate surcharges, but they would be available to help address financial needs during a future
drought, Adopting the suroharges at this time would enable timely implementation during a
future water shortage sondition.
Explanation of Proposed Commercial Organic Collection and Processing Services Rates
Assembly Bill 1826 was passed in September 2014to aid in meeting the statewide goal of
diverting 75 percent of waste from landfills by 2020. The law requires businesses, including state
and local agencies with businesses that generate certain amounts of organic waste per week, to
have organic waste recycling programs on or after April 1, 2016. Organic waste includes food
lvaste, green waste, landscape and pruning waste, nonhazardous wood waste and food-soiled
påper.
AB 1826 has phased thresholds ftiggering when agencies must have a progtam in place to
comply with the law. The City of Lodi has not had any qualiffing businesses until January l,
2019 when the threshold was reduced to require agencies to have a prograrn in place to
¿ccommodate businesses generating 4 or more cubic yards of solid waste per week. Residential
customers will not be affected by these new rates.
Basis of Proposod Rate Calculation
The proposed annual water and wastewater rate adjustments are justified based on estimated
future costs associated with ongoing operation and maintenance, existing debt service
obligations, and capital program needs as well as the need to maintain prudent financial reserves.
The water and wastewater rate revenue requirements were determined based on financial plans
developed as part of a water and wastewater rate study. The Water and Wastewater Rate Sndy,
prepared for the City of Lodi by The Reed Group, Inc., is available at www.lc¡di.eoY or at the
Public Works counter in City Hall during regular business hours, The tationale and calculations
of ttre temporûry water shortage rate surchatges are also describe{ in the Rate Study. The
propo""A ;"*1 contracted sılid waste rate adþstrre$s_g" based on the City of Lodi's existing
iranchise agreement with Waste Management for Solid Waste Collection.
Conclusion
if Voo ftuu" any questions regarding this notice, plerye glt 9" Public Works Depar[nent at
1Zól¡ lf f-e706 betrveen ?:3Ó a.m. and 5:30 p.m., Monday thrgueh Thursday, and between
8:00'a.m. and 5:00 p.m. on Friday. Cþ Hall is closed every other Friday.
JENNIFERM. FERRAIOLO, CitY Clerk
City of Lodi
Clty of todi
Current and Proposed Maximum Water Rate Schedules
lrl Âñr ?Ot.l Jan 2020 lrl lân.?lì?1 ltl l¡n-2022 taì Jan,?ôrl l1ìCutr€nt
' Rate Adiustment -->
Monthly Flât Water Rates (Unmetered)
Singte Family Residential
1 bedroom S
2 bedroom $
3 bedroom S
4 bedroom $
5 bedroom S
Multi-Family Units
1 bedroom $
2 bedroom S
3 bedroom $
4 bedroom 5
Non-Residential
Per ESFU S
Monthly Service (harges {Metered}s 2t.87
$ 34.34
s 6s.2s
s 102.s2
s 189.s0
s 313.73
$ 624.03
s 996.ss
s 1,431..26
29.88 s
3s,83 $
43.01 s
s1.s9 s
29,44
34.81
41.80
s0,14
32.84
39.44
47.21
56.79
68.11
28.19
33.81
40.58
48.68
$
$
$
s
$
$
s
s
s
$
2.9Yo 3.096 -8.4%
2L.23
33.34
63.34
99.53
183.98
304,59
605.85
967.52
L,389.57
3.O%3.0%
33.7e s
40.s8 s
48.64 s
s8.44 s
70.09 $
29.01 s
34.7s s
4t.76 s
so.os $
34.80 s
41.80 s
50,L0 s
60.19 $
72.!9 $
31.88 s
38,29 s
4s.89 s
ss.14 s
66.13 s
27.37 $
32.82 s
3e.40 s
47.26 s
32.84 $
39.44 s
47.2? $
s6.79 s
68.11 $
28.t9 $
33,80 5
40,s8 $
48.68 $
33.83
40,62
48.69
58.49
70.15
39.M 40.s8$ 4r.80$ ¡a.zss 39.44$ 40.62
Upto 3/4r' meter
l" meter
L 112" meter
2" meter
3" meter
4" meter
6" meter
S" meter
10" meter
s 22.s0 s 23.18 $s :s.aa , 5 36.40 Ss 67.14 s 6e.1s ss 1os.4e s 108.6s $$ 1es.00 $ 200.8s s$ 322.83 s 332.s1 $s 642.L3 $ 661.3e s
s 1,02s.45 s 1,0s6.21 s
5 1-,472.77 s 1,516.95 $
$ 2t.87
S s¿.sq
s 6s.24
s 102.s2
s 18e.s0
5 313.73
s 624.03
s 996.5s
5 1,431.26
s 22.s3
S gs.¡l
s 67,20
s 10s.60
$ 19s,1s
s 323.14
s 642.7s
$ 1,026.4s
$ 1,474.20
' Water Usage Rates (lì¡leteredl - $/CCF
Single Family Residential
Tier 1 {c10 CCF) $
Tier 2 (11-50CCF) S
Tier 3 {> 50 CCF) $
Multi-Family S
Non-Residential $
1.03 s
L.37 s
L.70 $
L.22 s
1.22 $
1.00
1.33
1.66
1.18
1.18
o,e7 $
1.2s s
1,60 s
1.1s $
1.1s $
1,00 s
1.33 s
1,6s s
1.18 s
1.18 5
0.94 $
1.25 $
1.s6 st.rz $
1..12 $
o.e7 $
L.29 $
1.61 $
1.1s s
1.1s s
Notes:
{1) Water rates were last adjusted io 7At7 based on Resolution 2OL7-23, which includes a rate rollback in
January 2021 to the water rat€s that were in effect ln 2016.
(2) Annual change in ENR 2O-Cities Construction Cost lndex for 2018 (based on Dec. 2017 to Dec. 2018).
(3) Fstimated adjustments based on the annual change in the ENR index each September 30, subiect to 3.0% cap.
City of Lodi
Current and Proposed Maximum Wastewater Rate Schedules
Cuffe¡¡þ[Jul. ¿019 {2} Jul.2020(3) 1u1.2021 Jd. e022 (3!Ju|.2023 (31
Rate Ad¡rßtments --> 2.9Yı
Monthly Flat Wat€r Rates (Unmetetedl
Single Family and Mult¡-Family Resldentlal Dwelling Units
3,0%t.ort 3.ú6
29.57 s
3e.43 s
49.28 s
se.13 $
68.99 s
30,46 s
40.61 $
s0.76 $
6o.eo $
7t.o6 s
3.O%
32.31
43.08
53.8s
64.61
75,39
5 2e.42
s 47.39
$ 91.s6
s 143.99
s 269.04
$ 446.49
s 889.79
s 1,421.94
1 bedroom $
2 bedroom S
3 bedroom $
4 bedroom $
5 bedroom S
Mobife Homes
Any Size $
Schools
Per SSU {18 students = 1 SSU} S
Non-Residential
Per SFU S
Monthly Service Charges {n¡etered)
Up to 314" meter 5
1'' meter S
1 U2" meter $
2" meter S
3" meter S
4" meter S
6" meter S
8" meter S
wastewãter Usage Rates (Mete¡edl
All Customers. Except High Strength
Usage Rate ($/CCF of water usel S
High strength Users
Flour (per MG annuallY) S
BOD (per 1,000 lbs annuallyl $
SS (p€r 1,000 lbs annuallY) 5
78.71 $
38.28 $
47.84 s
57.4L s
66.98 s
31.37 s
4t.83 5
52.28 $
62.73 5
73.19 s
27.sO s
37.20 s
46.4s $
s5.7e $
6s.oe $
27.90 s
27.90 $
37.20 $
25.4i ç 26.14
40.92 $ 42.7L
79.06 s 81.35
124.33 5 127.94
232.29 $ 239.03
38s,52 s 396.70
768.28 $ 790.s6
1,227.76 s 1,263.37
s 26.e2
s 43,37
s 83.7e
$ 131.78
s 246.20
$ 408.60
s 814.28
S r,¡or.zz
s 27.73
s 44.67
s 86.30
s 13s.73
$ 2s3.se
s 420.86
$ ess.n
5 1,340,31
s 28.s6S ¿o.or
$ 88.8s
$ 13e.BoS zor.zo
s 433.49
S 863,87
$ 1,380.s2
28.71.s 2e.57 $ go.¿e s 31.37 5 32,31
28:11 s ZS.st $ 30.46 $ 31.37 5 32.31
38.28$ 39.43s 40.61 s 41.83s 43.08
2.89 5 z.gz 5 a,oo $ 3.1s $
$ 4,t7r.92 5
5 672.N 5
s 420.30 $
3.24
4,794.O8
692.64
432.9!
$ 3,34
s 4,319,90
5 713,42
s 44s.90
3,730.00 s 3,838,17 s 3,953.32
616.00s 633.86s 6s2.88
38s.o0s 396.175 408.06
. Notes:
(1| Wastewater rates were last adusted in 2016 based on Resoh¡tion 2016-109.
(2) Annual change in ENR 20-Oties Construction Cost lndexfor2018 {basedon Dec.2017toDec' 2018).
(3) Estlmated adjustments based on the annual change in the ENR lndex each April 30, subject to 3.0% cap'
C¡ty of tod
Prmôsed T€rìì úôrân Wåtêr ShrtaEe Rate Sufdran€3
Normal
Supply
Potential
Shortage
M¡noÌ
Shortage
lMard¡ton¡l
Moder¡te
Shortate
{MãndÐtôrvl
Severe
Shortage
Oltlcaf
Shortate
lMend¡ton¡lCondltiqls
Use Reduction Goâl -->
Temp. Weter Shortage Sucharge (2|
Monthly Serulce Chorges
Up to 3/4" meter
1" meter
1 1/2" meter
2" meter
3" meter
4" meter
6'r meter
S" meter
10" meter
wotet|.ttage Rates ($/cTr) (s)
Slngle Family Res¡dentlal
Tier 1(G10 CCF)
T¡er 2 (11-50 CCF)
Tier 3 (> s0 CCFI
Multi-Family
Non-Res¡dent¡al
1.00 s
1.33 s
x.6s s
1.18 s
1.18 s
1.0s $
1.40 s
t,73 s
1.24 $
r,24 s
No Oranges to Service Charges
1.10 $
L.46 $
1.82 s
1.30 s
1.so s
Nonê
f{one
50/"to LO9l
None
tW"1o209l
\16
20% to 30%
to%
30%to 50%
L5%
>50%
2A'É
S zz.soS 3s.34
$ 67.14
S 10s.49
$ 19s.oo
$ 322.83
$ o+z.rgs 1,02s.45
5 1,472.77
$
$
s
s
s
1.00 $
1.33 $
1,6s $
1.18 $
1.18 $
1.1s s
1.s3 s
L90 $
1.36 s
1.36 s
1.20
1.98
1.42
1.60
7.42
r l{otes:
, (11 Thetemporarywatershoratgeratesurcharg€percentagesareshownappl¡edtotheproposedwâterusagerates
forillustratlræpurposes. Thepercentageswouldbeãppliedtoânythen-currentwaterusagerateswhenimplem
for Apfl 2019
ented by
. declaration of a water shortage by the Ûty Council.
{2} The termporâry water shortage rate surcharge woud be an lncreme¡tal (percentage) increase in the water usage rates, but wou. not be âpplled to monthly service charges or to arry flat water rates for unmetered customers.
(31 The water usage rates shown for M¡nor through Cr¡ticâl shortage cond¡tlons lncorporate the temporary water shortage rate
surcharges.
Ptoposed Ratcs- Commerlct. I qtßân|c5. Colleatton and Frocesglf Sêstcc-s
Can sir€FrequênÍy
lx per Week pèr Cårl
2x p€r weêk per cart
lx per Week per Cart
:2x per Week per Cart
Mo¡thly Bûte
s46.60
593.19
s70.r1
s 140.22
Contmhât¡on
S100 per Occurrencs
$l(Xl ger occurrence
$10o per Occurtence
'9100 Fer oecurrence
35c
359
:64s
64c
iAvallable for Customers with 4+ Certs
j Available Sor Customers with 4+ Cans
Notificación pertinente a la Proposición 218 y Äviso para el Proceso de Audiencia para
Protestar
Resumen
El Consejo Municipal de la Ciudad considerará futuros aumentos de tarifas para el agua, las
aguas residuales y las tarifas acordadas de desechos sólidos, durante una audiencia pública que
se efectuara el Miércoles 20 deMarzo de 2019 a las 7:00p.m en el Carnegie Fórur& 305 V/est
Pine Street, Lodi, CA. Una protesta mayoritaria impedirá los aumentos futuros de tarifas
propuestas. Si desea oponerse a los aumentos propuestos, protestas por escrito podrán hacerse
en persona durante la audiencia púbiica o pueden ser entregadas antes se dicha audiencia en:
City of Lodi
Attention: City Clerk
221 West Pine Street
Post Office Box 3006
Lodi, Califomia 95241-1910
Las protestas por escrito deberán ser recibidas al final de la audiencia pública, incluyendo las que
fueron enviadas por coneo a 1a Ciudad. No se aceptaran cartas con fecha mataseliada; por lo
tanto, cualquier protesta que no se haya recibido fisicamente a la conclusión de la audiencia
pública, yâ. sea o no enviada antes de la audienciq no contará.
Explicación del Proceso para Protestar
La Proposición 21 8, requiere que la Ciudad le proporcione aviso a todos los dueños de propiedad
sobre la propuesta de estructura de tarifas futuras, cuarenta y cinco (45) días antes de que se
lleve a cabo la audiencia pública. Si la mayoría de los propietatios o inquilinos que pagan las
tbcturas de utilidades entablan oposiciones al aumento, el incremento no entrara en vigor. La
protesta debe contener una descrþción de la propiedad, suficiente para identificar el predio. El
domicilio o número de parcela deberá demostrarse en esta correspondencia.
Si el nombre en la protesta escrita no aparece en la última lista de tasaciones ecualizadas del
Condado de San Joaquín, como duefio de la propiedad o en la cuenta de utilidades, la persona
que firme la protesta deberá someter evidencia por escrito de ser el arrendatario o propietario y
que tiene la responsabilidad financiera sobre la cuenta de las utilidades.
Durante la audiencia pública el Consejo debçrá escuchar todas las protestas y tabular las
protestas por escritos. Una protesta escrita por parcela" sometida por el propietario o el inquilino
(pagando la factura de utilidad) de la parcela deberá contarse en el cálculo de protesta
mayoritaria para la propuesta de tarifa nueva o cobro sujeto a los requisitos de la Sección 6 del
Artlculo XIII D de la Constitución de California. Si los votos entran en conflicto, la Ciudad no
contara el voto.
Explicación de los tr'uturos Aumentos Propuestos
El personal municipal está solicitando que el Consejo Municipal autorice la continuación de la
practica actual de ajustes de tarifas debido a la inflación para el agua y las aguas residuales, en
una cantidad mínima de hasta menos de tres por ciento (3%), o la cantidad real de la inflación
anual por los próximos cinco años, para pagar gastos de mantenimiento y de opetación,
obligaciones åe servicios de deudas, y las necesidades de plogramas capitales, asf como el
*ortãnto de reservas financieras prudentes para ambos servicios; del agua y de las aguas
residuales. El aumento inicial en la tasa del agua entrara en vigor el lro. de Abril de 2019,
seguido por los ajustes inflacionarios cada 1ro. De Enero, iniciando el año 2020 hasta el año
ZúZl. tosajustes de tarifas para el agua residual se llevaran a cabo cada 1ro. De Julio, a partir
del año 201Õ hasta el afio 2023. Enconformidad con el contrato de franquicia pertinente a los
desechos sólidos que existe entra el Municþio y Central Valley Waste Services (Waste
Management). Lós ajustes de tarifas para los desechos sólidos deberán llevarse a cabo cada 1ro.
de Ab¡il iniciando el año 2019 hast¿ ela.fl,.o2023,
Con el propósito de frjar tarifas para el aguay las aguas residuales, la Ciudad de Lodi determina
ta inflaci¿n como el incremento del porcentaje anual en e! Engineering News Record's 20-Cities
Cons¡uction Cost lndex (*ENR') (Índice de Costes de Construcción 20-Ciudades). El cambio
en el ENR para el año 2018 fue el 2.9 por ciento. Por lo tanto, el personal del municipio propuso
que el aumãnto inicial para ambas tarifas; la del agua y la de las aguas residuales sean de 2'9 por
ciento. Las tarifas del agua serán inicialmente ajustadas apartir del 1ro. De Abril de 2019 y las
tarifas para las aguas residuales serán inicialmente ajustadas a partir del 1ro. De Julio de 2019'
Después de eso, las tarifas serán ajustadas cada 1ro. be Enero a partir del año 2020 hasta el año
202i basado en el cambio anual en el ENR, a partir del 30 de Septiembre, sujeto a un límite anual
de tres por ciento (3%) Una excepción sucederá en Enero de202l. En esa fecha, las tarifas del
ugou *"iátr reducídas a las tarifas que existieron en el año 2016, como fue previamente aprobado
por el Consejo Municipal en la ResoluciónNo. 2|fi-23'
Después del aumento de tarifapara el agua residual en Julio de20l9,las tasas para el agua residual
serán ajustadas cada lro. De Julio iniciando el año 2020hastael año 2023,basado en el cambio
anual en eI ENR a partir del 31 deMarzo, sujeto a un límite anual de tres por oiento (3%).
En conformidad con el contrato de franquicia pertinente a los desechos sólidos que existe entre la
Ciudad y \ü/aste Management, La Ciudad de Lodi propone seguir incrementando los cobros
acordados de los desechos sólidos, por una cantidad equitativa de 80 por ciento de la variación
anual en el indice de Precios de Consumo (CPI siglas en Ingles), para todos los Consumidores
Urbanos en las fueas de San Francisco-Oakland-San Jose, Califomia. Todos los Artículos, (1982-
84:100) más un ajuste debido a los aumentos extraordinarios de tasas para los vertederos o
basurerôs, los costos de combustible y energfa, y cambios en la ley hasta el 100 por cianto del
;r-6¡6 ; el Índice de Precios de ConzumJ(CPI); o 100 por ciento del cambio anual del fndice de
Precios de Consumo (CIP) sin los otros ajustes, pero co.n la certificación de que los costos han
aumentado en más ¿ei tOó por ciento en àl cambio del indice de Precios de Consumo (CP|. Para
cumplir con la nueva Ley Estatal se propone que una categoría n-ueva para las tarifas de residuos
sólidìs sea añadiday titulada, "Recolección Orgánica Comercial y Servicios de Procesamiento".
Esta propuesta nueva de tarifas parala recolección orgánica no afectara a clientes de vivienda
unifamüiar en este momento.
Los ajustes iniciales planteados para las tarifas del agua y para las aguas residuales, asl como las
funnàs tarifas máximas posibles para el agua, las residuales y las tarifas acordadas para desechos
sólidos, basadas en esta propuesta se presentan en el cronograma al final de este aviso' La tabla de
tasas incluye ambas taxifas, precios fijos y precios medidos (basados segrln el uso) para ambas
utilidades; de aguas residuales y el agua. Por ahora no hay carnbios propuestos para las listas de
tarifas para el aguay las aguas residuales.'
Explicacién sobre la Propuesta Tcmporal de la Tarifa de Recargo debido a la Escasez de
Ägua
Con tarifas de agua medida, restricciones sobre el consumo de agua durante una sequla
prolongada puede tener un impacto económico en la ganancia del agua, porque una reducción de
ingresos de ia venta de agua, puede exceder la disminución en los gastos del sistema del agua.
Lapropuesta temporal de la tarifa de recargos debido a la escasez de agua, fue calculada
atribuyéndole al cliente una porción del déficit económico calculado, el cual fue causado por las
condiciones dç escasez de agua, en proporción por el consumo de agua medida para cada
cliente. Este método asegura que cada cliente tenga una participación pareja en los gastos
asociados con las condiciones de la escasez del agua.
Si se adopta, la propuesta temporal de tarifa de recargo debido a la escasez de agua, como se
establece en el presente, será únicamente implementada cuando el Consejo Municipal exprese la
emergencia de escasez de agu4 necesitando obligatotiamente la reducción del uso de agua
excediendo el 10 por ciento. Recargos temporales por la esoasez de agua se aplicarían a las
tarifas del uso de agua (pero no al cargo de servicio mensual o a las tarifas fijas de agua), y la
cantidad de recargo variarla de acuerdo a la magnitud de las reducciones del consumo de agua
requeridas. Las ta¡ifas de recargos debido a la escasez de agua se han diseñado de esta manera
pam que los clientes que cumplan con las metas del consumo reducido de agua puedan tener
facturas de agua más rebajadas que las facturas de agUa de consumo de agua normal.
Las tarifas de recargos temporales debido a laescasez de agua propuestas son expresadas como
un porcentaje de las tarifas de consumo normal de agua. La cantidad del sobrecargo dependerá
de la meta del consumo reducido de agua que establezca el Consejo MunicþI. Las tarifas
especfficas que se demuestran en este aviso son un ejemplo, basado en las tarifas propuestas para
el agua (Abdl 2019). Como un ejemplo, con condiciones de Escasez Leve, un cinco por ciento
(5%) de tarifa de recargo debido a la escasez de agua, temporalmente aumentara Ia tarifa de
coûsumo de agua residencial del Nivel 1 de $1,00 por CCF (Centum Cubic Feet) a $1.05 por
CCF (un recargo de $0.05 por CCF). Otras tarifas de consumo de agua serán similarmente
afectadas según se indica en la lista de sobrecargos. Cargos de servicio mensual y tarifas fijas
para los clientes sin medidores de agua serán inafectados. El recargo temporal será rescindido
cuando el Municipio declare la cesación del consumo de agua restringido.
El Consejo Municipal actualmente no tiene planes de implementar la propuesta de tarifa
temporal de recargos debido a la escasez de agua, pero estarán disponibles para ayudar a resolver
necesidades económicas durante una fi¡tura sequla. Adoptando los recargos en este momento
permitirá la implementación a tiempo durante una situación de futura escasez de agua.
Explicación para la Propuesta de tarifas para [r Recolección Orgånica Comercial y los
Servicios de Procesamiento
El proyecto de Ley 1826 fue aprobado en Septiembre de 2014 para ayudar a cumplir lameta a
nivel estatal de desviar el 75 por ciento de desechos de los basureros o vertederos para el año
2020. La Ley exige a empresas, incluyendo agencias locales y estatales con comercios que
generân ciertá cantidad de desechos orgrinicos por semana, que tengan programas de reciclaje de
iesiduos orgránicos a partir o a no más t¿rdar del 1ro. De Abril de201'6. Los desechos orgánicos
incluyen dJsechos alimenticiosn residuos verdes, residuos de jardinería y de podar, residuos de
leña que no sea peligrosa y papel que este ensuciado pot comida'
La Propuesta de Ley 1826 ha puesto etapas para que las agencias tengan el programa empleado
p*opðd.". cumplir con la ley. La Ciudad de Lodi no hatenido ninguna empresa que califique
lastael 1ro. de Enero de 2019 cuando el llmite fue reducido para que las agencias tengan un
pïograma situado para acoplar a las empresa¡¡ que generen 4 o más yardas cubicas de
ãesperdicios sólidos por semana. Los clientes residenciales no serán afectados por estas nuevas
tarifas.
Bases para el C:álculo de la Tarifa Propuesta
Los ajustes anuales de tarifas propuestos para el agua y las aguas residuales se justiñcan en base
u gurior estimados en el futuro que están asociados con el mantenimiento y operación continua,
obligaciones de servicios de deuda, y necesidades de programa de capital, así como el sustento
de rèserva financiera prudente. Los requisitos de las tarifas de ingresos para el agua y aguas
residuales fueron determinados de acuerdo a plafies finánciales desarrollados colno parte de un
estudio detazaspara el âguay aguas residuales. El Water and Wøstewater Rate ^Sfudl (Estudio
de Tarifas para el Agua y Aguas Residuales), preparado por The Reed Group, Inc. est'ii
disponibleìn el sitio web r¿owrv.locli.sov o en el mostrador del Departamento de Obras Publicas
en ãl Ayuntamiento durante las horas normales de trabajo. Larazín fundamental y el calculo de
la tarifa temporal de recargos debido a la escasez de agua, también se describen en el Estudio de
Tasas. La piopuesta de ajustes anuales de tarifas acordadas para los desechos sólidos están
basadas en el contrato de franquicia que existe entre La Ciudad de Lodi y Waste Management
pal:a larecolección de Residuos Sólidos.
Conclusión
Si tiene preguntas sobre este aviso, por favor llame al Departamento de Obras Publicas al
Q0Ðßa-61A6 entre las 7:30 u.m. y S:30 p.m., de Lunes â Jueves, y de 8:00 a.m. a 5:00 p.m. Ios
Vicrnes. El Ayuntamiento está cerrado cada otro viemes.
JENNIFER M. FERRAIOLO, Actuaria Municipal
Ciudad de Lodi
Lista de Tarifas Actuales v Pronuestas Máximas para el Aeua
Ciud¡d de Lodi
Actual (l)
Aju¡te de T¡rlfa
Enero 2022(3)
3.Ii/r
2021 (r)
-8ÃVo2.9o/o
Abril Enero 2023(3)
3,0./.
Dnero 2020(3)
3.0%
$31.88
Residencias Unifami
I Recarnara
s40.62$38.29 $39.44$40.58 $41.802 Recama¡as $39.44
$48.69s4s.89 s47.27$48.64 $50.103 Recamaras s47.27
$58.49$60.19 $55.14 $56.79$58.444 Recamaras $56.79
$?0. I s$66. I 3 s68.1 l$70.09 $72.195 Recamaras $68.1 I
Viviendas Multifamiliares
$28. l 9 $29.04$29.88 827.37$28.r9 s29.01I
$33.80 $34.81$35.83 $32.82$33.81 $34.792 Recamaras
$40.58 $41.80$43.01 $39.40$40.58 $41.763 Recamaras
$48.68 $50.14$51.s9 s47.26s48.68 $s0.094 Recamaras
No-Residenciales
58
$34.34 $35,37$36.40 $33,34s34.34 $3s-34
$65.24 $67.20$69. l 5 $63.34$65.25 $67 "14
$102.52 $105.60$108,65 $99.532" metro $102.52 $105.49
$189.s0 $195.19$200.85 $1 83,98$189.50 $195.003" metro
$313.73 $323.14$332.51 $304.53s313.13 9322.834" metro
$624.03 s642.15$661.39 $605.8J$624.03 ß642.136" metro
$996"s5 $r026,4ss967.52$r02s.45 $1056.218" metro $996.ss
st474.20$1389.57 $143 t .26614'12.77 $15 16.95l0" metro $ r431.26
Unífamiliares
Agua (Con
l-00$0,94 $0,97s1.00 $1.03Nivel I(O-IOCCF s0,97
r.33s1.25$ r.33 $ r,3?Nivcl 2{ll-5üCCl'-$1.29
1.66$1.56s1.65 $1,70$1.60Nivel 3(>50CCF
1.18$1.15sr -18 $1.22 $1.12Multit?¡miliares sl.15 [. t8$ 1.12 $1.t5$r.I8 sr.22$1.15No-Residenc¡ales
basado cn la Resolución 2017'23, cual incluye una tasa de reducción en
de3.ïVo
( I ) Las tarifas del agua fueron ajust¿das en el 2017
entrâfon 6n 20el 62021Enerolasdetarifasqucvlgoregqapaftr
7 Dic.L 20Index20elt8Dic.209nConstruction20-Cities Cost 8)CambioEI 9nanual ENR para (basadocl(2)
30 de cs aeleÍelbasadoscalculadosLos
Ciudad de Lodi
Lista de Tarifas Actuales Máximas las Residuales
Julio
Ajuste dc Tarifa-3,0%3.BVot.Oo/o
llo 2021 (3) Jul
Mensuales
fls
2s2¿li3}
3.0v,
Julio 2019 (2) Julio
2.9%
$32.31$30,46 $31-37$29.s7$28.71s27.90I Recamara
$43.08$40,61 $41.83$39.43$38.28s37.202 Recamaras
$50,76 $52.?8$49.28$47.84$46.493 Recamaras
962.73$59. l3 $60.90$s7.4f$5s.794 Recamaras
$73. I 9 s75.39$71.06$66.98 $68.99$65.095 Recamaras
$32.31s30.46 $31.37s29,57$28.71$2?.90
Casas Rodantes
Cualquicr Tamafo
$3r I90I I estudiantes=lSSU
Escuelas
De acuerdo a SSU
No-Residenciales
De acuerdo a ESFU
Costos de Ssrvício Mensuales
$28.56t26.92 î27.73s26.14$25.40Hasta %" metro
$46.01 $47.39944.67$42.1 1 $43.37$40.921" meko
$91,56$86.30 $88.8e$83.79$79.06 $81.35I Yr" metro
$ 143.99s13s.73 Í;139,80$131.?88127.942" meho $124.33
.04$253.s9 $261.20fi246.20$239.03s232.293" metro
$420.86 $433.49$408.60$396,70$385.524" metro
19$838.71 $863.87$8 r 4.28$790,56$768.286" metro
$1421.94$r340,31 $ I 3 80.s2$130 1.27s1263.31s1227,768" metfo
$1.34f3.r5 s3"24$3.0682.97
Todos los Clientes,
Tarifa de Uso($/CCF
Del uso de agua)
Residuales (Con Medidor)Tn¡ifas de Uiilización Aguas
Salvo de Alta Potsnoia
Consumidores de Altâ Potencia
$4194.08$3953.32 $407r.92$3838. l7$3730.00Caudal(uualmqte Por M(i)
s6'.12.47 $6y2.64 s711.42$652.88$633.86$616.00
BOD (mualmente px
1,000 lbs.)
1,000 lbs.)
por
3000
Notas:t6-2A 109.enfrle 20el basado16 la ResoluciónfueronirltimalzvezIasdeResidualesajust¡dasquetarifasLasAguas
.201f)ic ^7 20Ðic.2Al8el enIndexCost 8)(basadoENReLConstructionpara20-CitiesEIanualCambioen
(1)
(2)
CS LíndiceelENRelenanualcambiobasadoscalculadosLos
Ciudad de Lodi
Lisfa de las Tarifas Temporales Propuestas debido a Ia Escasez de Asua
Mcl¡ de Consumo
R¡¡lnci¡ln Nada SYo tl l0o/o l0f/" alZtf/o 2{P/dal3U/"1(P/" al 5ûo/">50y"
Recargo lemporal debido
a [a escasez de Agun (2)Nada Narla 5o/o Itr/o lsVo 20o/o
Costos de Servicio
Hastâ %" metro 22.50
1" meüo $35.34
No hay cambios a los cobros por los servicios
I Yz" metro $67.14
2" metro $105.49
3" metro $r95.00
4" metro $322.83
ó" metro $642.13
8" metro $1025.45
10" metro t|472.77
Tarifas de Consurno de Agua ($/CCFX3)
Residencias Unifamiliares
Nivel l(ù10CCF)iL00 $ l.oo $ 1.05 s1.10 sl.l5 $r.20
Nivel 2(l L-sOCCF)$ 1.33 $1.33 $1.40 s1.46 s1.53 $1.60
Nivel 3(>50CCF)$1.65 $r.65 $ 1.73 $1.82 $i.s0 $1.98
Multifamiliùes $ l.l8 $r,18 st.24 s 1.30 sl 16 $1.42
No-Residenciales $1.18 sl.t8 st.24 $1.30 $1.3ó ô1.42
Notæ:
(l) Los porcentajes de las tarifas de recargos debido a la escasez ds ågua que se demuestran aplicadas a Ia propuesta de tarífas
para el consumo del agua para Abril 2019, son para propósitos ilustrativos. Los porcentajes se aplicaran a cualquier tarifa de
consumo de agua que €sté vigente en esa fecha, cuando el Consejo Municipol declue la implementación de escasez de agua.
(2) La tarifa de rccargo temporal dcbido a la cscasce de agua será un aumcnto incrcmental (porcentaj o) en las tarifas del
consumo de aguø, pero no serdn aplicadas ¿ los cobros de servicio mensuales o a ninguna tarifa frja para los clientes sitr medidor
(3) La tarifa para el consumo de agua que se demuestran para las sifuaciones ds escascz de Nivel Leve a Nivel Critico
incor,Ðoran læ tarifæ de recargo debido a la escasez de agua.
Tsmrrlo de rcclp¡enþ
3*.
35s
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Tårli¡¡ Propü¡rtsr {eeolecelón or!únlca come¡cltl Y Sowlclo3 de prcoesrm¡snto
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2x Semam por ÍedplBnt€ -Ol¡ponlbh P¡rt dlent¡! con ¡l+botêl 393.19
l¡lsomanåporrccldcne $70'11
tr san¡na por redþhnte Ðlsponlble pale Gllênt€s Gon ¡l{åoÈs $140'22
contamltraclón
$100 porc¡d¡ hæho
$1(n porød¡ hecho
$100 poreda hecho
$100 potc¡d¡ hacho
Èi#Æîi,tr#,ã.
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Restrioted lnfonnâl¡on
Mailing Group Summary lnformation
233308498 Mailer's Job tå
-PRESORT CENTER OF FRÊSNO, tLC (PCF) PO ofMailing F¡nance Noì
Stockton Lodi 012919 Suh¡ission Type:
HOMEI HELP I CUSTOMERCARE I SIGN OUT
Todây's Date: 02/01/20 1SDa8hboald > Display
Mailing Group lO:
Preparer:
Dêscription:
00008815
05288ô
Meil.dåt
Open Dåte:
Closð Dete:
02-01-2019
Câncel I Confirmâtion Pao€ I Reoister I Piece-W€¡qht lnformåtionPS # 330923270, UPD
AcoMr Holltr
T558) e99 - 6600
raßjlvpurðwal@âtlnôt
Aeünt Numbêr: .40640
P€mil: ' Pôrmlt lmpdnt 39E
cRto t¡gEstaS
Srdúlwl FG Fa ItJü¡vú.t: S8.07%
posrotræolMâifins: iFRESNOCAg370eS098
Posr ori@ of P€rlit: pnESNo c¡ sszo8"gssg
ft,dlû Ooclæd Wê¡ght ot Skqlo i 0., 't , a ,".Pt€æ:
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: USPS Dsterm¡led hreìght of Sinqle, 0.1 1 1e lbs.Plæô:
Soqt!¡dng {rdð:021011201s
I l'MM Trayg
: cny of Lodi
, NCOALIñk
Postage Surnmary
No of Cqrtâ¡n€ß;
Culomcr Rofcrèncé lD.:
lvlovo UpdtL€ t tlhod:
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lúütlplocô t! r pÈrt¡Gt !åÍlÞlı: t{O
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Moi rAr¡ieðl Dda úd f bñB: NtA
Conlairrcr Grcuplrg_lD:
Cop¡l lt¡¡¡ng lype:
sSFTD Numbðr¡
Part A: Automtion Lett fs
Lina Number Entry Dism¡nt
A1 NONE
A2 NONE
A3 NONE
A8 oSCF
A9
410
Part B: Nonaulomat¡on Letters
Unå Numbsr Enlry Diecount
81 NONE
Marketing Mail - Psrm
PRESORT CENTER OF FRESNO, LLC (PCF) uaittne
495 s URUAPAN wAY ¡c"nt
ÞrNuBA,cA o3s1B-?rig
Contsct: RANJIV PUREWAL
Planned
PR€SORT CENTER OF FRESNO, LLC (PGF)IMEU OWN¡c CITY OF LODI
4S6 S URUAPAN I/ì'AY PO BOX 3OO3'D|NUBÂ, CA 936rð-?718 LOOI, CÀ 00241 -19101
; F.€¡rh,g
Calagory:, Lotlar8
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Roolo:
3,469.'1538lbs.
3,459,1536 lbs.
$ ô,205.37
0112912018
:orh6r2'l',lvl Trays ,2' EMM Trâys
237
lFlâl Trays rsecfis
Quantlv
2071 pca.
1 530pcs.
442pca,
17pcs,
Quant¡ty
32'tpß.
Subtotal
Poslage
$ e3.7320
FS Disaount
$ 0,0000
iÞallets
DlBcor¡nt
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$ 0.0000
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s 0,0000
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t 93.7320
l¡gA; : NO- olldElËlodlmlito[: l.lo
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l^g Tûrlìng Clalnãd: NO
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AAOC
Mlxed AAOC
AADC
DISPLAY ONLY
Lêtters - Number of
F¡sces that Comply
Doscr¡pl¡on
Lêtt€rs 3.5 oz (0.2188
lbs) 0r less
Letlers 3.5 oz (0.2168
lbs) or less
Letler6 3.5 oz (0.2lEE
lbs) or less
Lê{têrs 3.5 oz (0.2'1Eo
lbs) or leog
Mail Option
Dêscdpt¡on
Maðh¡nebl. Lettcrs 3.5
oz (0.2188 lb6) or l.8s
0.003 ¡l060pca.
Ptfcê
0.256
0.28't
0,2s1
0.253
FT31!|1 Fs Discount oftff.ilt FeB lotal Poetase
$ 530.1780 $ 6.2130 $ -6.2130 $ 0.0000 $ 523.9630
$ 423.9300 $ 4.5900 $ -4,5900 $ 0.0000 $ 425,3400
$ 12e.6220 $ 1.3260 $ -1.3260 $ 0.0t00 fi 127.2s8A
$4.3010 $0.0510 $-0.0510 $0.0Õ00 $4.2500
PartATotal (Add llnssAI-AE) $ 1,080.8490
Tille
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o.2s2
B2 NONE
828
Paft g: Carrls Route L€ttårs
Lino Numbêr Entry Discounl
C1 NONE
C2 NONE
C3 NONE
C4 NONË
C.l0
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Title
Salurâtlorì
Hlgh Dflsily Plus
High DenÉity
Baslc
Maohinaþle L€tt€rs 3.5
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Descriptlon
(Automallon) Lêttsrs 3.5
oz. (0.2188 lb3.) or lcEs
{Automeüon) Letters 9.5
oz. (0.2188 lbs.) or þ3!
(Automation) Lettsß 3.5
oz. {0.2189 lbs.) oÌ lðÈ3
(Automat¡m) LBtters 3.5
oz, (0.2188 lbe.) arleBs
euanüty *3å!"j
s o.oooo $ 8.4580
s 102'1 ô80
Fêê Tolal Postagê
$o-o0oo s4,422.s240
$ 0.0000 $ 417.0490
s 0.0000 $ 134.9300
t 0.0000 $ 47.4330
$ 5,022.3380
$ 0,205.3730
N/A
$ 6,205.37
0,302 28ps. S 8.4560 0 0.0000 t 0.0000
Paft B Tolal (Add linês 81-827)
Prica
0.1 s0
0.200
0.20s
0.2s4
FS Diseount
23652p08. S4,493.8800 $7t.s580 $-70.95Ë0
2117pës. $ 423,4000 $ ô'3510 9'0.3510
6sspcs. S 136.8950 0 1.9ô50 9-1.9ô50
163pca. $47.9220 s0.4890 s-0.48s0
Part c Total (Add linês c,l-c45)
Olscau¡t
Total'
For Extrs Services and other FeÉs
0.003 26587Pcs.
Tôlel Futl Sewloe Dlscount Frcm ¡ül Parts $ '91'9410
Total PoÉtrgê Frcm All Partg
Tolat Frcm Attached Fom 354È5
Total Postage
Totål lncantlve/Discount Claimåd $ - 91.9410
* May contâin both Full Servke lnlelligent Mail and olher discount- sôê lnstructions page for add¡t¡onal intormation.
DISPLAY ONLY
Lêtters - NumbËr of
Piecæ thât Comply
Full Séru¡cê lntelligênt
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lotalAdditimd Posldgê:- $ o-odr¡mbs of Rt'¡ôrfod Piæês:I
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RESOLUTTON NO. 201942
A RESOLUTION OF THE LODI CITY COUNCIL
SETTING FUTURE WATER, WASTEWATER AND
SOLID WASTE RATE SCHEDULES PURSUANT TO
PROPOS¡TION 218 FOR RESIDENTIAL,
COMMERCIAL, AND INDUSTRIAL CUSTOMERS
WHEREAS, the Council of the City of Lodi finds as follows:
The City of Lodi provides water supply and wastewater disposal service
to its citizens and provides solid waste disposal seruice through a
Franchise Agreement with USA Waste of California, lnc. dba Central
Valley Waste Services (Central Valley); and
The City charges customers of the water and wastewater utilities a
charge to fund the on-going operation and maintenance of the wafer
supply and wastewater disposal service; and
Pursuant to Lodi Municipal Code Section 13.16.1f 0 (Ordinance
No. 1709), the schedule of rates for solid waste collection shall be
established and adopted by the City Council from time to time by
Resolution; and
Central Valley has requested increases to the current solid waste
disposal rates for inflation and increased disposal fees as permitted under
their Franchise Agreement; and
The City engaged the services of The Reed Group, lnc., to analyze the
financial models and current rate structure within the City's water and
wastewater utilities. The final report, Water and Water Rate Update
Study is on file with the Cíty's Public Works Department; and
Staff recommends adopting future adjustments with limits to usage-based
and flat water and wastewater rates for residential, multi-family, and non-
residential customers as presented in Exhibit A to become effective upon
City Councíl approval of rate increase resolutions at a future date; and
Water, wastewater and solid waste rate schedules and an analysis of
rates were provided to the City Council at a publicly noticed Council
Meeting held on January 16, 2019; and
Staff recommends approval of the Central Valley Commercial Organics
Rate schedule, as presented in Exhibit B; and
The Council directed that notice of a hearing on the water, wastewater
and solid waste rate schedules be given to the property owners and
water, wastewater, and solid waste utility customers in the City, with such
notice in both English and Spanish to include, among other matters, the
information required to be included pursuant to California law; and
1
2
3.
6.
7
4.
5.
8"
g.
10. Pursuant to California Constitution, Section 6 of Article XlllD and
Government Code 53755, such notice has been maíled to those property
owners and account holders at least 45 days before the hearing, as
evidenced by a Certificate of Mailing on file with the City Clerk; and
11. The Council also directed that notice of a hearing be given with such
notice to include the information required to be included pursuant to
Government Code section 54354.5; and
12. Such notice has been published once each week for two weeks, in
accordance with Government Code section 54354.5, in the Lodi News-
Sentinel, as evidenced by Proofs of Publication on file with the City Clerk;
and
13. On March 20, 2019, the City Council conducted said public hearing, at
which time the City Council heard all objections and protests to the
proposed usage-based and flat water and wastewater rates and solid
waste rates for residential, commercial and industrial customers; and
14. written protests against the proposed usage-based and flat water and
wastewater rates and solid waste rates for residential, commercial and
industrial customers were not presented by a majority of the property
owners and water, wastewater and solíd waste utility customers; and
15. The proposed usage-based and flat water and wastewater rates and solid
waste rates for residential, commercial and industrial customers are not
discriminatory or excessive, are sufficient under Govemment code
section 54515, comply with the provisions or covenants of any
outstanding revenue bonds of the city payable from the revenues of the
enterprise, comply with the provisions of Tifle 5, Division 2, Chapter 6 of
the Government Code, and are in compliance with all other applicable
law.
NOW, THEREFORE, BE lT RESOLVED by the City Councilof the City of Lodias
follows;
Section 1, Recitals. The foregoing recitals are true and correct.
Sçctipn 2. Lew of Charges. Pursuant to Sections 13.08.010, 13.12.240, and
13.16.110 of the Lodi Municipal Code, the usage-based and flat water and wastewater
rates for residential, commercial, and industrial customers and the Waste Management
Commercial Organics rate schedule, as attached hereto as Exhibits A and B are-hereby
approved.
_ 9Êction 3. Future Adiustments. As provided by Govemment Code Section
597-56, the future adjustments shown in Exhibit A may be ãdopted annually for a period
of five years by resolution beginning March 20, 20lg through December 3l,2o2gfor
water, wastewater rates, with Council approval following a public hearing, in an amount
not to exceed the smaller of the limits stated in Exhibit A or the percentage change in the
Engineering News Record (ENR) Twenty Cities Annual Average lndex for wãter and
wastewaler or other index as approved by the City Council by resolution. For solid
waste rates, the annual adjustment will not exceed 80 percent of the annual change inthe Consumer Price lndex for all Urban Consumers for San Francisco-Oakland-
San Jose, California area (CPl), All ltems (1982 - 84 = 100) published by the Bureau of
Labor Statistics, plus an adjustment for extraordinary increases in landfill fees, fuel and
energy costs and changes in law up to 100 percent of the annual change in the CPl. The
adjustment shall not be made if it causes rates to exceed the cost of service and Notice
of the Adjustment shall be mailed to each account not less than 30 days before the
effective date of the adjustment.
Sectíon 4. Effective Date. This Resolution shall take effect from and after the
date of its passage,
Dated: March 20,2019
I hereby certify that Resolution No. 2019-42 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held March 2A,2019, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS - Johnson, Kuehne, Nakanishi, and
Mayor Chandler
COUNCIL MEMBERS - Mounce
COUNCIL MEMBERS - None
COUNCIL MEMBERS - None
nifer M iolo
ity Clerk
201942
f-jãibliÃ-l
City of Lodi
Currênt end Propoaed Flat
Notes:
l1i-mäffi1¡y ¡ñmãsãupt€xes, triptexes, fourptexes, aperfnents, and condom¡n¡ums.
(2) These ere the maxlmum rates for each yea¡ wiürout a formal rate-settlng process. Actual water rate
adjustments may be lower and would be tied to annual dranges in the ENR index*Pending a Prop 218 approval
{3) Per Ræolutlon No. 2017-23 adopted February 15,2017,
Future Rate Celllns 12)
Current
(Jsn. 2017|
Propocedt
(Apr¡l 20191
Potential
(Jsn.20201
Sunsst Ratos
(Jan.20211 (3|
Rate lncrease -> 2.6%3.0%
FLAT RATÊ8
SÍngle Famlly Resldentlal
1 B€droom
2 Bedroom
3 Bedroom
4 Bedroom
5 Bedroom
6 Bedroom
7 Bedroom
Multl-Famlly (1)
1 Bedroom
2 Bedroom
3 Bedroom
Mobile Homes
Any Size
Non.Residentlal
Exlst¡ng unmetered
$ 32.84
$ 39.44
I 47.27
s 56.79
$ 08.11
$ 8f .75
$ 98.03
$ 28.19
$ 33.81
$ 40.s8
$ 28.1e $ 28.89
Varies +2.5o/o
$ 33.66
$ ,10.43
S ,rE.,t5
$ 58.21
$ 69.8r
$ 83.7S
$ 100.48
$ 28.89
$ 34.86
$ 41,59
$ 34.67
t 41.64
$ 49.90
$ 59.96
$ 71.90
$ 86.30
$ 103.49
$ 29.76
$ 3s.70
s 42.84
$ 29.76
+3.Oolo
31.88
38.2S
45.89
55.14
68.11
81.75
98.03
$
$
$
$27,37
Veries
27.57
32.82
39.40
Glty of Lodl
Curfent and Propoeed Water Rates
Future Rate Celllnq {21
Current
(Jan. 2017)
Proposed*
(April 2019)
Potential
(Jan.2020)
Sunaet Rates
(Jan. 2021 ) (3)
Räte lncÌease -> 2.5o/o 3.Ùo/i
USÁGE.BÁSED RAIES
Monthly Seru¡ce Charge
Single Family
Up to 3/4" meter $ 21.87
l" meter $ S4.Sq
1 1/2" meter $ 65.25
2" meter $ 102.52
MultLFamily and Non-Residentiel (1)
$ 22.42
$ 35.20
$ 66.88
$ 105.08
Up to 3/4" meter
l" meter
1 1/2" meter
2" meter
3" meter
4" meter
€" m€ter
8" meter
1O'meter
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 GCF)
Tier 2 (11-50 CCF)
Tier 3 (>50 CCF)
21.87
34.34
65.25
102.52
189.50
313.73
624.03
996.55
,431,26
0.97
1,29
1.60
6 22.42
$ 35.20
$ 66.88
$ 10ã.08
$ 154.24
$ 321.57
$ 639.63
$ 1,021.46
$ 1,467.04
1.18
$
$
$
$
$
$
$
$
$t
$
s
$
$
$
$
0.99
1.32
1.64
Mult¡-Family and Non-Residential (1)
All water usage $ 1.15 $
$ 23.09
$ 36.26
$ 68.89
$ 108.23
$ 23.09
$ 36.26
$ 68,89
$ r08 23
$ 200.07
s 331.22
$ 658.82
$ 1,052.10
$ 1,511.05
1.02
1.36
1.69
$
$
$
$1.22
21.23
33.34
63.34
99.53
$ 21.23
$ 33.34
$ 63,34
$ 99.53$ 183.S8s 304.59
$ 605.85
$ 967.s2
$ 1,389.57
$
$
$
$
$
$
$
$
0.94
1.25
1.56
1.12
Notee:
(1) Multi-family includes duplexes, triplexes, fourplexes, apañments, condominiums, and mobile hom€ pårks.
(2) These are the maximum rates for each year, without a formal rate-setting process. Actual water rate
adJustments may be lower and would bs tied to annual changes in the ENR index
'Pending a Prop 218 approval
(3) PerResolution No.2017-23 adopted February 15,2017.
Cþof Lodl
Têmtófåru Wit.r Râtå Surchår¡er
Normal
Supply
Cfidltlons
Fotentlel
shorta8e
Minor
Shodage
lMrndåtür¡
Moderat€
ShortrBê
Severe
Shortaße
Ciltlcal
Shortôte
{lì[andrtory]lMandatorvl
Use Reduction Goal ->
Têmp. Water Shortage Surcharye (2)
ìltonthly Serytce Char4Jet
Up to 3/4'' metèr
l" meter
1 1/2" meter
2" meter
3" meter
4" meter
6" meter
8" meter
10" meter
Woter Usoge Eates (S/CCF| (J)
Single Family Res¡dential
Tier 1 (0-10 CcF)
Tier 2 {11-50 CCF)
T¡er 3 (> 50 CCF)
Multi-Fam¡ly
Non- ResidentiaI
None
None
5% to 70oÁ
None
10% to 20%
î/"
20% to 30%
1096
30% to 50%
t5%
> 50/o
2Ax
S 22,s0
$ 3s.34
s 67.14
$ ros.¿g
S 19s.oo
5 rzz.s¡
S e+z.r¡
5 1,02s.45
S 1,472:17
No Changes to Sêrvice Charges
Þ
s
$
s
s
t,oo s
1.33 s
1.5s $
1.18 $
1.18 $
1,oo $
1,33 s
1.6s $
1,18 $
1.X8 $
l.os $
1.40 s
t.73 s
1.24 5
t.?4 s
1.10 s
1.46 s
t,82 s
r.30 s
1.30 $
1.1s s
1.s3 s
l.eo $
1.36 s
x,36 s
1.20
1.60
1,98
7.42
7.42
Not€s:
(11 ThetemporarywatershofatgeratesurchargepefcentagesaïeshownappliedtotheproposedwaterusageratesforApril20lg
foríllustrãt¡vepurposes' Thepercentageswouldbeappltedtcanythen-curentwaterrrrg"r"t.rwhenlmplementedby
declarat¡on of a water shortage by the Cty Councll.
{2} The termporârywater shortage rate surcharge woud be an lncremental (percentage) increase in the water usage rates, but wounot be applied to monthly serv¡ce charges or to any flat water rates for unmetered sustomers,
{3} Thewaterusageratesshoì/nforMlnorthroughcritícalshortagecond¡tionsincorporatethetemporàrywatershortagerate
surcharges.
R¡tGs - commêrcl¡l Or!.nlss CollcÊtloí end Processln8 Servlces
C¡n
She
359
353
648
1r per week per cart
¡¡ per week per c¡tt
lx per week per یrt
Frequency
aualleblc for cuíomÊß w¡th 4+ carts
Monthþ ßrte
$46.60
5s3,19
s70.11
Cont¡mlnatlon
$10û per occurrence
$100 peroccurrence
$100 per occurrence
a)
b)
LODI CITY COUNCIL
REGULAR CITY COUNCIL MEETING
CARNEGIE FORUM, 305 WEST PINE STREET
WEDNESDAY, FEBRUARY 20, 2019
C-1 Call to Order / Roll Call
The City Council Closed Session meeting of February 20,2019, was called to order by
Mayor Chandler at 6:00 p.m.
Present: Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Kuehne,
and Mayor Chandler
Absent: Council Member Nakanishi
Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
C-2 Announcement of Closed Session
Conference with Adele Post, Human Resources Manaqer. and Andrew Kevs, Deputv Citv
Manaqer (Labor Neqotiators). Reqardinq Fire Mid-Manaqement, lnternational Brotherhood
of Electrical Workers. Lodi Police Disnatchers Association. Police Officers Association of
Lodi, and Police Mid-Manaqement Pursuant to Government Code S54957.6 (CM)
Conference with Leqal Counsel - Anticipated Litigation - Pursuant to Government Code
$54956.9(d)(4) and 54954.5(c): Two Potential Cases (CA)
C-3 Adioum to Closed Session
At 6:00 p.m., Mayor Chandler adjourned the meeting to a Closed Session to discuss the above
matters. The Closed Session adjourned at 6:31 p.m.
C4 Return to Open Session / Disclosure of Action
At 7:03 p.m., Mayor Chandler reconvened the City Council meeting, and City Attorney Magdich
disclosed the following actions.
Items C-2a) and C-2b) were discussion only with no reportable action
A. Call to Order / Roll Call
The Regular City Council meeting of February 20,2019, was called to order by Mayor Chandler
at 7:03 p.m.
Present: Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Kuehne,
and Mayor Chandler
Absent Council Member Nakanishi
Also Present City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo
Presentations - None
Consent Calendar (Readinq: Comments bv the Public: Council Action)
Council Member Johnson made a motion, second by Council Member Mounce, to approve the
following items hereinafter set forth, except those otherwise noted, in accordance with the
report and recommendation of the City Manager.
B.
c.
I
VOTE:
The aþove motion carr¡ed by the following vote:
Ayes: Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Kuehne, and
Mayor Chandler
Noes: None
Absent: Council Member Nakanishi
C-1 Receive Reoister of Claims for Januarv 18. 201 9 throuqh Januarv 31 . 201 9 in the Amount
of $2.655,693.09 (FlN)
Claims were approved in the amount of $2,655,693.09.
C-2 Aporove Minutes (CLK)
The minutes of January 29,2019 (Shirtsleeve Session) and February 5, 2019 (Shirtsleeve
Session) were approved as written.
C-3 Approve Plans and Specifications and Authorize Advertisement for Bids for Kofu Park
Court Resurfacing lmprovements (PVÐ
Item C-3 was pulled from the agenda pursuant to staffs request.
C4 Adopt Resolution Authorizinq Citv Manager to Waive Bid Process and Purchase One
Bucket Truck with Material Handlinq System. Mounted on 2019 Ford F550 Chassis from
Altec lndustries. lnc.. of Dixon, Utilizinq the Competitivelv Bid Sourcewell Contract No.
012418-ALT ($172.538). and Approoriatinq Funds ($12.538) (P\M
Mayor Pro Tempore Kuehne made a brief comment on C4, commend¡ng Public Works staff for
its efforts in negot¡ating a decent price for this vehicle.
Adopted Resolution No. 2019-1 5 authorizing the City Manager to waive bid process and
purchase one bucket truck with material handling system, mounted on 2O19 Ford F550 chassis
from Altec lndustries, lnc., of Dixon, utilizing the competitively-bid Sourcewell Contract
No. 012418-ALT, in the amount of $172,538, and appropriating funds in the amount of $12,538
C-5 Adopt Resolution Authorizinq Purchases of Electronic Fare Collection Svstems and
Ancillarv Equipment for Lodi Transit Vehicles from GFI Genfare, of Elk Grove Villaqe,
lllinois ($1 86,000) IPW)
Adopted Resolution No. 2019-16 authorizing purchases of electronic fare collection systems and
ancillary equipment for Lodi Transit vehicles from GFI Genfare, of Elk Grove Village, lllinois, in
the amount of $186,000.
C-6 Adopt Resolution Awarding Bid for Purchase of Two Pad-Mounted Switches from Anixter.
lnc.. of Benicia ($55.818.81) (EU)
Adopted Resolution No. 2019-1 7 awarding bid for purchase of two pad-mounted switches from
Anixter, lnc., of Benicia, in the amount of $55,818.81.
C-7 Adopt Resolution Awardinq Bid for Purchase of Medium Voltaqe Cable from The Okonite
Companv. of San Ramon ($208.496.26) (EU)
Adopted Resolution No. 2019-18 awarding bid for purchase of medium voltage cable from The
Okonite Company, of San Ramon, in the amount of $208,496.26.
C-8 Adopt Resolution Authorizinq City Manaqer to Execute Asreement with Report Svstems,
lnc.. DBA Emerqencv Reportinq. for Application Hostinq and Technology Support
Services. and Authorizinq Fire Chief to Aoprove Chanqe Orders as Needed ($41 ,176.30)
(FD)
2
Adopted Resolution No.2019-19 authorizing the City Managerto execute an agreementwith
Report Systems, lnc., DBA Emergency Reporting, for application hosting and technology support
services, and authorizing the Fire Chief to approve change orders as needed, in the amount of
$41 ,1 76.30.
C-9 Adopt Resolution Authorizinq Citv Manager to Execute Two-Year Extension to
Professional Services Agreement: and Two Optional One-Year Extensions with the Pun
Groun. of Santa Ana. for Auditinq Services l$249.7721 (CM)
Adopted Resolution No. 2019-20 authorizing the City Manager to execute a two-year extension to
the Professional Services Agreement and two optional one-year extensions with the Pun Group,
of Santa Ana, for auditing services, in the amounl of $249,772.
C-10 Accept lmprovements Under Contract for Transit Station Security Fencinq Proiect (P\ 4
Accepted improvements under contract for Transit Station Security Fencing Project.
C-11 Receive Annual Report Reqardinq Boards. Committees. and Commissions Relatinq to
Attendance. Traininq. and Filing Requirements (CLK)
Mayor Pro Tempore Kuehne made a brief comment on C-1 1, stating it was difficult to read some
of the attendance reports. City Clerk Ferraiolo responded that, in thefuture, all board and
commission liaisons will be asked to utilize the same format for consistency and ease in reading
the reports.
Received annual report regarding boards, committees, and commissions relating to attendance,
training, and filing requirements.
C-12 Adopt Resolution Aporoving Budqet and Fiscal Policies for Fiscal Year 2019/20 and Fiscal
Year 2Q2Al21 (CM)
Adopted Resolution No. 2019-2'l approving Budget and Fiscal Policies for Fiscal Year 2019/20
and Fiscal Year 2O2O121.
c-13 Set Public Hearing for March 20. 2019. to Consider Adopting Resolution Setting Pre-
Anproved Enqineerinq News Record Adiustment lndex for Usaqe-Based and Flat Water
Rates for Residential. Commercial. and lndustrial Customers IPW)
Set public hearing for March 20,2019, to consider adopting resolution setting pre-approved
Engineering News Record adjustment index for usage-based and flat water rates for residential,
commercial, and industrial customers.
C-14 Set Public Hearinq for March 20. 2019. to Consider Resolution Adoptinq Pre-Aoproved.
Proposition 218 Consumer Price lndex-Based Annual Adjustment to Rates for Solid Waste
Collection (P\M
Set public hearing for March 20,2019, to consider resolution adopting pre-approved Proposition
218 Consumer Price lndex-based annual adjustment to rates for solid waste collection.
Comments bv the Public on Non-Aqenda ltems
THE TIME ALLOWED PER NON-AGENDA ITEM FOR COMMENTS MADE BY THE
PUBLIC IS LIMITED TO FIVE MINUTES.
Public comment mav onlv be made on matters within the Lodi Citv Council's jurisdiction
(Government Code Section 54954.3. Lodi Citv Council Protocol Manual Section 6.311. The
Council cannot take action or deliberate on items that are not on this aqenda unless there
is an emerqencv and the need to take action on that emerqencv arose after this aqenda
was posted (Government Code Section 54954.2(b)(2)). All other items mav onlv be
referred for review to staff or placement on a future Council aqenda.
J
D.
Amanda Lee, member of the public, presented materials (filed) regarding what she believes is an
environmental crisis on the Mokelumne River resulting from the impact of the California
Department of Transportation (Caltrans) homeless encampment at Highway 99 near the river.
Specific topics of discussion in her presentation included background information on the source of
Lodi's drinking water; known contaminants in Lodi's water supply; information about
Cryptosporidium ("Crypto"); details and photographs about the homeless encampment; call to
Caltrans to stop the homeless from polluting the water in the Mokelumne River; interesting
findings regarding the homeless; and questions for the City. Ms. Lee further reported there is an
individual in the area who has threatened her with an axe, which prompted her to repair the fence
because the homeless continue to cut it to go through the neighbor's private property to urinate,
defecate, and throw garbage. At this point, Curtis Lee, member of the public, ceded his five
minutes to Ms. Lee. She continued that part of the problem is the area has three jurisdictions:
San Joaquin County Sherriffs Office, Lodi Police Department, and California Highway Patrol. She
encouraged the City and Coung to collaborate efforts with Caltrans as there seems to be
confusion over jurisdictional lines. She pointed out that the dirt along the river is stained red,
which could be red phosphorus for methamphetamine production, and she often sees the
homeless dumping contaminants in the river. She requested Caltrans evict the homeless tenants,
secure the area, and decontaminate the biohazard waste. At this point, Andre Crockett, member
of the public, ceded his five minutes to Ms. Lee so she could ask questions of the City as listed in
her presentation materials.
Public Works Director Charlie Swimley provided answers to Ms. Lee's questions that covered
topics such as the Annual Waler Quality Report, last environmental impact study, list of
contaminated wells, the PCE/TCE cleanup and monitoring report, and ways to protect drinking
water from contamination. Travis Kahrs, Water Plant Superintendent, provided information on the
water monitoring report sample dates from 2013.
City Manager Schwabauer provided information on a broader prospective and detailed the City's
efforts to address homelessness, including the many shelters, the Committee on Homelessness,
creation of a worKorce job training program, application and receipt of grant funds for affordable
hous¡ng, and participation in the Continuum of Care. He added that homelessness is a
complicated, national social problem that no city has solved. He encouraged the public to
participate in meetings of the Committee on Homelessness.
Mayor Chandler thanked Ms. Lee for providing h¡m a tour of her neighborhood. Afterward, he met
with the City Manager and City Attorney, and they came up with a mulli-prong approach to
outreach with representatives from var¡ous agencies. To date, contacts have been made with
Assemblymember Jim Cooper to assist with Caltrans and CHP and the Lodi Police Captains to
work with Sherriff Whithrow.
Mr. Schwabauer encouraged Ms. Lee to speak to Police Chief Tod Patterson about the individual
armed with an axe.
Mr. Swimley offered to provide a tour to Ms. Lee and her neighbors of the state-of-the-art Water
Treatment Facility that was designed to provide high quality, safe drinking water.
An unidentified individual and neighbor of Ms. Lee stated she has been dealing with the homeless
situation, water contamination, and illegal drugs in the neighborhood for a long time and reported
she often sees individuals dumping or dropping off barrels in the middle of the night. As
responsive as Lodi Police Department is when she calls the non-emergency line, by the time
officers arrive, these individuals leave and there is nothing oflicers can do. She stated she
supports her neighbor and the Police Department and encouraged the City to be more proactive
in this matter.
Mr. Schwabauer reported there are eight police officers entering the academy who should be
ready for patrol in 10 or so months. The City advanced Measure L funds at its last meeting in
order to meet the academy deadline which begins in March. One of the officer positions will be a
Community Liaison Officer for homeless issues, which will add greater assistance and resources
4
in addressing these types of calls.
Craig Troxclair, member of the public, stated he volunteers with Caltrans' Adopt-a-Highway
Program and shared his experience with what Caltrans goes through when dealing with homeless
encampments, including posting the properg for 72 hours, video recording the process in case
anything of value is damaged or taken, and the fear of homeless advocate lawyers suing
over how the process was handled. He stated Caltrans can do a better job, but he acknowledged
it has many hoops to jump through to clean up properties. Further, Mr. Troxclair expressed his
strong opposition to smoking and tobacco products and encouraged Council to strengthen no-
smoking laws, such as prohibiting smoking in parks and on sidewalks and perhaps even banning
cigarette sales.
Lisa Hosman, member of the public, reported that her neighborhood has a significant rat problem,
which she has tried to address with extermination and conversations with neighbors and county
health inspectors. She would like the situation to improve and suggested the City look at a
program that Stockton has in which it inspects all rental properties every flve years lo ensure they
are safe and clean.
Mushtaq Tahirkheli, member of the public, commented on the Delta College campus that was
scheduled to come to Lodi but never came to fruition, stating he and a group of friends are
working to continue these discussions with the Delta College Board of Trustees. He asked
Council to support his efforts.
John Hall, member of the public, stated he too lives in the neighborhood near the Mokelumne
River and shared his issues and concerns with the homeless encampments in the area, stating
the area went from idyllic and safe to frightening with drugs, vandalism, graffiti, garbage, and
human waste. He stated the aggressiveness of the homeless is getting worse and he is afraid
someone will be hurt as a result.
Chief Patterson shared with the public that recent legislation has tied the hands of police by
lowering the thresholds on crimes, which quickly puts criminals back on fhe streets. He
encouraged the public to study legislative bills, such as Propositions 47 and 57, before voting on
them because these laws are allowing criminals to stay on the streets. He stated the City is doing
all it can to address the homeless situation, as well as organizations such as Take Back Lodi, and
everyone needs to work harder to make this successful. He encouraged those in attendance to
speak with him further after the meeting.
Mayor Pro Tempore Kuehne thanked the neighbors for sharing their concems and reported on
his efforts in working on this issue, including involvement in the Committee on Homeless and the
County's Continuum of Care and participation in the HEAP grant application process that brought
in $1 .25 million for Lodi. The City has helped get over 100 people off of the streets and into
rehabilitation centers or shelters; Take Back Lodi is working to address the situation; many
people donated their time to volunteer for the point-in-time count; the public donated money to the
Police Department for a truck for the Homeless Community Liaison Officer to pick up shopping
carts; and Measure L recently passed that will hire more Police Officers and another Homeless
Community Liaison Ofücer. He added the Grand Jury points to Lodi as a role model based on its
effoÍs to address homelessness and that he continues to search out other ideas and programs
both locally and nationally.
E. Comments by the CiW Council Members on Non-Agenda ltems
Council Member Mounce concurred with Chief Patterson that legislation, such as Propositions 47
and 57, has downgraded a number of violent crimes that can no longer be prosecuted and
realignment has pushed low offenders back onto the streets, mostly criminals who continue to do
drugs and commit acts of violence. She shared some of her experiences in dealing with the
homeless, including touring sites with trash and human waste, homeless individuals sleeping on
her porch, attempted assault against her by a homeless man at Lawrence Park, and her family's
rental becoming ransacked and damaged by a group of homeless individuals. As a League of
California Cities Board Member, she and her colleagues are working with the new Governor and
5
his administration to communicate the significant problems associated with these pieces of
legislation and how it is resulting in the destruction of neighborhoods. She stated she will continue
to fight to give police back the tools needed to address this situation. Further, Council Member
Mounce reported that she participated in a White House call today regarding the current
administration's non-partisan transportation package, which is a matching program. She stated
that a few years ago she met with the Director of lnternal Affairs who asked her to submit a
project for consideration; however, it did not happen because staff did not provide her with a
project idea. She stressed that if the City ever has a similar chance, it should take advantage of it
and not miss the opportunity.
F. Comments by the City Manaqer on Non-Aqenda ltems
None.
G. Puþlic Hearinqs - None
H. Reqular Calendar
H-1 Adopt Resolution Approvinq Fiscal Year 2018/19 Mid-Year Budqet Adiustments (CM)
Budget Manager Susan Bjork provided a PowerPoint presentation regarding the Fiscal Year
2018119 mid-year budget report. Specific topics of discussion included General Fund overview,
revenues, and expenses; requested General Fund adjustments; Confidential Administrative
Secretary position; Risk Management Technician position; Electric Utility; Water Utility;
Wastewater Utility; other budget requests; and action requested.
Mayor Pro Tempore Kuehne made a motion, second by Council Member Johnson, to adopt
Resolution No. 2019-22 approving Fiscal Year 2018119 mid-year budget adjustments.
VOTE:
The above motion carried by the following vote:
Ayes: Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Kuehne, and
Mayor Ghandler
Noes: None
Absent: Council Member Nakanishi
H-2 Appoint Members to the Measure L Citizens' Oversiqht Committee {CM)
Council Member Mounce suggested this item be postponed until a time when there is a full
quorum of Council at the meeting to make appointments.
Council Member Mounce made a motion, second by Council Member Johnson, to postpone the
item without reopening the application period until there is a full Council in attendance.
VOTE:
The above motion failed by the following vote:
Ayes: Council Member Johnson, Council Member Mounce
Noes: Mayor Pro Tempore Kuehne, Mayor Chandler
Absent: Council Member Nakanishi
Mayor Pro Tempore Kuehne suggested postponing the matter to a date certain and reopening
the application period to encourage greater participation from Districts 4 and 5.
Council Member Johnson stated he recalled Council decided that those Council Members who
had no applications in their Districts could choose from another District if there were enough
applications, and he believed there were enough applications to do so.
Council Member Mounce concurred, stating it was anticipated there may not be enough
applications from some diskicts, and the option of choosing from other Districts allows Council to
6
move forward. She concurred with postponing the decision bui not with reposting the openings.
ln response to Council Member Johnson, Deputy City Manager Keys stated it would not cause a
problem if the appointments were pushed to the end of March. Council Member Johnson stated
that, since no Measure L money comes in until June, he would prefer to do this right and not push
the item to an arlritrary timeframe.
Mayor Pro Tempore Kuehne made a motion, second by Mayor Chandler, to direct the City Clerk
to repost the openings on the Measure L Citizens' Oversight Committee to close on March 1,
2019, and to bring this item back to Council at its regular meeting of March 6, 2019.
VOTE:
The above motion carried by the following vote:
Ayes: Council Member Johnson, Mayor Pro Tempore Kuehne, and Mayor Chandler
Noes: Council Member Mounce
Absent Council Member Nakanishi
L Ordinances - None
J. Adioumment
There being no further business to come before the City Council, the meeting was adjourned at
8:41 p.m.
ATTEST:
Jennifer M. Ferraiolo
City Clerk
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Ëric J. Benink, Esq" (SBN 187434)
e r i t (itl.k kb s -l ¿t v. c' o¡t t
Benjarnin T. Benumof, Esq- (SBN 22'134Û)
b e n Çùldrlzç - letrt'. co nt
I(RAUSE, KALFAYAN, BENINK & SLAVENS, LLP
550 West C Street, Suite 530
San Diego, CA 92101
Tel: (619) 232-0331
Fax: (619) 232-4419
Attomeys for Petitioners and Plaintiffs
IERRY W. JACKSON, an individual, on
behalf of himself and ail others similarly
situated; and CHARLES M. SCHMIDT, an
individual, on behalf of himself and all others
similar{y situated,
Frg-ËÞ
SUPERIOR COUFT OF CALIFORNIA
COUNTY OF PLACEF¡ffirl
JAKE CHATTERS
ËXECUTIVE OFFICER A bIENT
By: C. Lestêr, Deputy
S1IPERIOR COURT CIF THE STATE OF CALiFORNIA
FCIRTHE COI]NTY OF PLACER
Case No.s0uFnFn-4n '
\¡ERIT'IED PETITION FOR WRIT OF
MANDATE; COMPLAINT FOR
DECLÂNATORY RELIEF AND
VIOLATION OF PROPOEITION 218
Petitioners and Plaintifîs,ICLASS ACTIONI BV F-AK
CITY OF LINCOLN, a general law city; and
DOES 1-10,
Respondents and Ðefendants.
Petitioners and Plaintiffs JERRY W. JACKSON and CHARLES M. SCHMIDT
("Petitioners" or '?laintifß") allege, on behalf of themselves and on behalf of a Class, as defined
herein, as follows:
INTRODUCTTON
l. Petitioners bring this action to challenge fees and charges Respondenl and
Defendant CITY OF LINCOLN ("City" or "Respondent') has imposed on its single-family
residential water custûmers in violation of Proposition 218 (Cal. Const., art. XIII D, $ 6 f'Section
6"), subd. (b)).
Verified Petition lor Writ of Mandate
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PARTIES
À. Petitioners/Plaintiffs
Z. petitioner and Plaintiff Jerry W. Jackson owns real properry in the City of Lincoln,
CA, which receives residential water service from the Cify. He pays the fees and charges at issue
herein.
3. pstitioner and PlaintilT Charles M. Schmidt owns real properfy in the City of
Lincoln, CA, which receives residential water service from the City. He pays the fees and
charges at issue herein,
B. ResogndeutslDefendsnts
4. Respondent and Defendant City of Lincoln is a general law city incorporated on or
about August 18, 1890, located in Placer County. The City is govemed by the Cify CounciVCity
Manager form of goverurnent. A five-member City Council is elected æ large to four-year tetms
to oversee the City operations and to guide the future development of the City' It is an "agency''
subject to Prop.218. (See Cal. Const., art. Xiü C, $ l, subd. (b) & (c); art- XIII D' $ 2' subd' (a)')
5. petitioners are unarvare of the true names and capacities of Respondents /
Defendants sued as DoEs 1 tbrough 10, and therefore zue them by such fictitious ]rames.
petitioners are informed a¡rd believe and thereon allege, that each DOE Respondent/Def'endant is
responsible for the acts, violalions and injuries alleged herein. Petitioners wiil amend this petition
and complaint to allege the true nam€s and capacities of the DOE Respondents/Defendants when
their identities are ascertained.
6. petitioners are informed and believe and thereon allege, that at all times, each of
DOE Respondents/Defendants the agent, employeq r€,presentative, partner, joint venture, and/or
alter ego of each other Respondent/Defendant and, in doing the things alleged herein, was acting
within the course and scope of such agency, employrnent and representation on behalf of such
partnership or joint venh¡Íe, and/or as such alter ego, with the authority, permission, consent'
and/or ratification of each other RespondenlDefendant'
2Verified Petition for Writ of Mandatc
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GANERAL ALLEGATIONS
7. On or about February 9.2017, Petitioners filed a claim with Respondent seeking a
refund on behalf of themselves and all other single-family residential water customers based on
the ailegations raised herein. On or about March 28,2017, the City mailed a letter to Petitioners'
counsel rejecting the claim. Petitioners' claim complied with all requirements of the Govemment
Claims AcL (Gov't. Code $ 910, et seq.)
8. The City provides water service to more than 16,000 aecounts tkough a systern of
wells, reservoirs, booster pumps, and distribution pipelines. Ali of tlre Cily's customers are
metered. The City's residential and non-residential watsr service is a property-related service
because it is public service having a direet relationship to properly ownership. (Sec Cal. Const,
art. XIII D, $ 2, subd. (h).) The City imposes water fees and charges on properties as an inciclent
of property ownership, including Petitioners' properties. (See $ 2 subd. (e).). These fees and
charges are for û property-related service. (.Id.)
9. Proposition 218 added ârticles XIII C and D to the California consîitution in 1996.
It piaces csnsfitutional limitations on the månner by which local govemments may impose fees
and charges imposed as an incident of property ownership. Ä local govËnxnent may not impose
any fee or charge that exceeds the funds required to provide the properfy-relaled service. (See $ ó
subd. (b)(1)). Furlhermore, a local govenilnent may not impose any fee or charge thal exceeds
the proportional cost of the service attributable to the parcel. (See $ 6 subd. (bX3).) The City's
residerrtial water service fees and charges violate these two constitutional restrictions as described
beiow.
10. On Novembcr 12,2013, the City passed Ordinance No- 8888 adopting the City's
cunent water rate sûucture effective January l,2Al4 through Fiscal Year 2017-18 pursuant to the
City of LincoÌn llater, llastewater, and Solid Wcste Rate Sndy - Revised prepared by HF&H
Consultants, tLC, dated Octsber L4,2013 ("Study'').
I l. ln accordance rvith the Sfudy and Ordinance, the City charges its single-family
residential 'water çustomers tiered rates (i.e., higher arnouuts as consurnption increases.) For
JVerifled Petitio¡r for Writ of Mândate
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examplç, in the "Verdara Villages" single-family residential area, which represents Petitioners'
areas, the Cþ currently charges as follows each month:
TmR 1 $1.60 Per 1000 gallons
TIER 2 $2-61 Per 1000 gallons
TIER 3 $4.36 Per 1000 gallons
TIER 4 $7-99 Per 1000 gallons
TIER 5 $11.01 Per 1000 gallons
lZ. The water rate tisrs ("Tiers") violate Prop. 218 because the rates assìgned to each
Tier are arbitrarily set without any relation to the cost of providing water service in each Tier.
According to the Sfudy, average cost of water is $2.90 per 100Û gallons, and the City charges its
'"Tier 2" rate because "[u]se at this level does not burden the system and is priced at close to the
average cost," Every other Tier is increased or decreased by an arbitrary percentage using Tier 2
as the bencþmark. For example, according to the Study, Tier I is "the most efficient and the
least expensive to serve" and water in Tier I is priced at "a cost equal to 55% of the average cosf'
in an effort to o'encowage conti¡ued conservation"; Tier 3 use'oexceeds moderate use...and for
that reason is priced at t 50% of the average cost [of water]"; Tier 4 use is '\nusually high use"
and is'þriced at275o/o of the average cost"; and Tier 5 "includes the highest 4% of excessively
high bilts" and is 'þiced at 400% of the average cost to provide a strong deterrent to discourage
waste."
13. The cost of pmviding lvater at each Tier is the same; in other words, the cost of
water provided at Tier 5 is no greater than the cost of providing ìüater at Tier l. The City never
conducted any analysis regarding the cosls of providing water at the different Tiers to support the
creation of Tiers and its consultant HF&I{ Consultants admitted as zuch in the Study when it
stated: ',The rates do not align directly with any speoific costs of providing service across the
spectnun of demand from lowest to highest." The only purpose of the Tiers is to encourage water
conservation. Thus, the imposition of water fees and charges based on Tiers 1-5 violates section
6 subdivisions (bXl) and (3).
4Verified Petition fçr riVrit of Mandate
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14. Beginning on or äbout February 14, ztt7, and moving forward, the city
"suspended" the eoilection of fees/charges for Tiers 4 and 5 but did not declare Tiers 4 and 5
unlawful or offer the City's Tier 4 and 5 ratepayers any refrurds. The Tier 3 rates are still in
effect.
CLASS ALLEGATIONS
15. Plaintifis bring this action pursuant to section 382 of the Califomia Code of Civil
Procedure, on behalf of themselves and on behalf of all others similarly situated. PlaintifTs seek to
represent a class (the "Class') initially de led as:
AX City of Lincoln Single-Family Reside,ntial Water Customers during the period
February 9,2t16 through the date ofjudgment who paid Tiered rates in excess of the
average cost of water: $2.90 per 1000 gallons per month. Specifically excluded *om
the Class are: (a) any judge assigned to hear this case (or spouse or immediate family
member of any assigned judge) (b) any ofñcer, cify council member, or offrcial
representative of the City of Lincoln and (c) any attomeys of record and thefu.
employees.
16. Plaintiffs reserve the right to modify, expand, or amend thc above Class definition or
seek certiücation of a class that is defned differently than above before any court detennines
whether cerfifi.cation is appropriate following discovery.
17. Numerosity of the Class. Members of the Class are so numeror$ that their
individual joinder herein is impracticable.
18. Ascertain¡ble Class. The community of interest Bmong the Class members in the
Iitigation is well-defined and the proposed class is ascertainable from objective criter{a. The
identities of Class members san be obtained &om Respondents' business records. Class members
can be notified cf the pendency of Plaintiffs' Fetiliôn by mail or published notice. If necessary to
preserve the case as a class action, the Court can redefine the Class anüor create subclasses.
19. Commonality and Predominance. There is a well-defined community of interest
in the questions of law and fact involved affecting the parties to be represented. These coûrmon
questious of law and fact eúst as to all members of the Class and predominate over any questions
affecting only individual members, including but not lfunited to:
a' Whether Raspondents impose fees and charges on Single-Family Residential Water
5Verified Petition for Wr'ír of Mandate
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Customers in violation of Proposition 21 8.
b- Whether the Plaintiffs and Class members are enútled to refunds for such violations;
e. Whether the Plaintiffs and Class mernbers are entitled to declaratory relief; and
d. Whether the Plaintiffs and Class members are entitled to an o¡der / rvrit compelling
Respoudents to complywiththe law-
20. Adequacy of Representation. Plaintifß are adequate representatives of the Class
because thei¡ interests do not conflict wiür the interests of the other putative Class Members, and
because Plaintifis have retained coursel competent and experienced in complex class action and
consumer litigatioq including substantial e"rperience in the types of claims alleged herein. Plaintiffs
and their counsel will fairly and adequately protect the interests of all putative Class members.
2t. Superiority of Class Àdjudication. The ce¡tification of a elass in this action is
superior to the litigation of a multitude of casçs by members of the putative class. Class
adjudication will conserve judicial resources and will avoid the possibility of inco¡rsistent rulings.
Moreover, there are Class mernbers who are unlikely to join or bring a¡r action due To, among other
reasons, their reluctance to sue Respond€nts and/or their inability to afiord a sepamte action. Equity
dictates that all psrsons who stand to benefit from the relief sought herein slrould be subject to the
lawzuit and hence subject to an order spreading the costs of the litigation among the Class members
in relation to the beneñts received" The damages, restitution and other potenfial recovery for each
individual member of the Class are modest, relative to the substantial burden and expense of
individual prosecution of these claims. Given the amount of the individual class members' claims,
few, if any, Class members could afford to seek legal redress individually for the wrongs
complained of herein. Individualized litigation presenß a potential for inconsistent or contradictory
judgments. Individualized litigation increases the delay and expense to all palies and the court
system presented by *re complex legal and facn¡al issues of the case. By conmst, the class action
device presents fa¡ fewer managsmelrt difficultis, and provides the benefits of single adjudication,
economy of scale, and compreheræive supervision by a single court.
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6Verified Petition for Writ of Mandate
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CAUS$S OF ACTTON
FIRST CAUSE OF ACTION
Petition for Writ of Mandate
c.c.P. $ 108s
(Against All Respondents)
22. Petitioners hereby incorporate by reference each of the preceding allegations as
though fully set forth therein.
23. Respondents have refused and continue to refuse to comply with Califorria
Constitution article XtrID section 6 subdivision (b)(l) and (3). Specifically, they impose water
utility fbes and charges that exceed the cost of providing water services and impose water utility
fbes or charges that exceed the proportional cost ofthe service attributable to the parcels.
24. There is a clear, present and ministerial duty upon the part of the Respondents to
comply with these constitutional mandates.
25. Petitioners have a cleaq present and beneficial right to the performance of that
duty.
26. Petitioners do not have an adequate remedy at law.
27. Accordingl¡ Petitioners are entitled to a writ of mandate pursuant to Code of Civil
Procedure section 1085 as specified more fully below.
SEEOND CAUSE OF ACTION
Declaratory Rellef
c.c.P. g 1060
(Against AII Defendants)
28. Plaintiffs hereby incorporate by reference each of the preceding allegations as
though fully set fbrth herein.
79, An actual, present, and substantial controversy exists between Ptaintiffs and the
Class, on the one hand, and Defendants, on the other. Plaintiffs contend that Defendants have
violated andlcr will continue to violate California Constitution article XIII D section 6
subdivisions &Xl) and (3). Defendants contend that they have complied, and rvill continue to
comply said constitutional restrictions and requirements.
7Verifled Petition fo¡ Writ of Mandate
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30. Plaintiffs and the Class are entitled to a judicial declaration declaring that the fees
and chmges the Defendants impose violate.d or are in violation Califomia Constitution article XIII
D section 6 subdivisions {bXl) and (3) and an order compelling Defendants to restore or refund
ail illegally-imposed fees and charges.
THIRD CAUSE OF ACTION
Violation of Cal. Const. art. XIII D, Section 6
(Against Àll Defendants)
31. Plaintiffs hereby incoçorate by reference each of the preceding allegations as
though fully set forth herein.
32. Defendants have violated California Constitution, article XIII D, section 6
subdivisions (bXl) and (3).
33. Plaintiffs anrl the Class have been damaged by Defendants' violations.
PRAYER FOR RELÍEF
WHEREFORE, Petitioners/Plaintiffs pray, on behalf of themselves and the Class, that the
Court:
ON TTIE F'IRST CAUSE OF ACTION AS TO ALL R.TSPONIDENTS
1. Issue a writ of mandate directing the Raspondents to comply with California
Constitution a*icle X|IID, section 6, subdivisions (bxl) and (3) witb respect to their imposition
of Single-Family Residential water fees and charges.
2. Enter an award of damages pursuant to Code of Civil Procedure section 1095 or a
judicial orcler compelling Respondents to restore or refund to Plainti{Ts and the Class, all fees and
charges that werc illegally imposed in violation of Proposition 218.
ON TIIT SECOND CAUSE OF ACTION AS TO ALL DEFENDANTS
L Enter a declaratory judgment declaring that Defendants' practices havs vìolated
Califomia Constitution article XIIID, section 6, subdivisions (bXl) and (3), and ordering
Defendants to restoÏe or reftind tö Plaintiffs and the Class, all fees and charges that were illegally
imposed in violation of Proposition 218.
IVerified Petition for Writ of Mandate
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Ol,l TI{E THIRO CAüSE OF ÀCTION AS TO,AJ,L DEFENÐANTS
l. Arvard damages i¡ an amou¡t to be proven at trial.
ON ALL CÁ.ÜSE$ OF ACTTON AS TO Al,L ÐEFENDANTS
l. Enter as order certifying this'case as a class action appointing Plaintiff's Jerry \il.
Jackson and Charlcs M. Schmidt es the class r€presentatives and appointing their attomeys ns
clsss coun$el
2. Âu'ard costs and aftomeys' fees to Petitionem as permitted by law.
3. Provide an_v and all ñuther relief tbat the Csrut deems just and proper and in the
interest cfjustice.
Dared:April)f,zolt' çr'
Eric J. Beûink,
BenjaminT. Benumof, Ph.D." Esq.
Attomeys for Petitioners and Plaintiffs
9Verified Petitiqn for Writ of Mandate
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VERII¿ICATIONS
I, Jerry r,)V. Jackson, have read lhe foregoing VERIFIED PETITION FOR WRIT OF
MANDATE; COMPLAINT FOR DECLARATORY REtfEF AND VIOLATION OF
PRCIPOSITION 218. The matters stated therein axe tue and cor¡ect of my own hnowledge and
belief ot on information and belief as indicated therein.
I declare under penatty of perjury under the laws of the state of California that the
foregoing is fue and correçt.
Executed in the County of Placer, California.
D,A.TED: lpril ,il,ZOtl
I, Charles M. Sohmidt, have readthe foregoing \IERIHIED PETffiON FOR WRIT OF
ìVIANDATE,; COMPLAINT FOR DECLARATORY RELIEF. AND VIOLATION OF
PROPOSITTON 218. The matters stated.therein are true and correct of my own knowldge and
belief or on isformation and belief as indicated therein.
I decla¡e under penalty of perjr¡ry under the laws of the state of California thæ the
foregoing is tn¡e and correct.
Executed in the County of Placer, California.
DATED: April_,2017
C}iARLES M. SCHMIDT
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VERIFICATIONS
I' Jeny W. Jackso¡r. luve read the f'oregoiug VERIFIED pETrnoN FoR 1¡iRI.r oF
MAND.Ä'|'E; COMPLAINT FoR DECLAR,¡\TORY RELIEF AND vtof-A'iloN ol:
PROPOSITION 218. The malters stated lherein ûrc tnre arrd cnrrccr of my own knowledge a¡d
helief or on irrf'ormation and helief as indicaterl tlrercin.
I declare under penalty ot'perjury uncler thc laws of the statc c¡f Calijbrnia thar rhe
hregoing is true and con.ect.
Executed in the County ol'Placer, Calil.ornia.
DATED: April .2017
JËRRY W. JACKSON
I, Charles M. Sclimidt, have rcad the fbregoing VERIFIED PETITION FOR WRIT OIì
MITNDATE; COMPLAINT FoR DHCLARA'IORY RELIEF AND vtol¡,1.toN oF
PROP0SITION 218. 'llhe malters stated therein sre trr¡e and col.rect of my own knorvtedge antl
belief or on information and helief as indic*ted therein.
I declare under penalty of pedury uncler the jaws of the stflte of Câlif'ornia that rhe
{bregoing is true and comect.
üxecuted in the County of plscer, Califbruia.
DATED: nprit 2l , zOf Ch¡nlas fut . Soh,n, ðL
CÌ.IARLES M. SCI-IfuIIDT
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2017 Water Rate Refund
Fact Sheet
On April 25,2017, the City was sued over the residential water rate structure. The City and the
proponents of the lawsuit have reached a settlement. This fact sheet is intended to provide
information related to the settlement agreement. The Settlement agreement is final. The City will
further apprise the rate payers on the timing and process for refunds and how the settlement may
affect individual residential users.
ln 2013, the City of Lincoln adopted Residential Water Rates with five water rate tiers
To estaþlish pricing for the tiered rate structure, the total cost to provide water service was
estimated for each year of the rate study and then allocated across the five tiers. The tiered
rate structure ímposed progressively higher rates for water service according to the level of
consumption.
The tiered rates were, in part, based on state mandates intended to encourage water
conservation. At the time of the City's rate adoption, 667o to 80% of California water providers
use some type of tiered rates. As such, the development and implementation of tiered rates
were considered the standard practice for rate estaþlishment at the time of adoption.
ln 2015 the court in the San Juan Capistrano case held that a tiered rate structure similar to
that adopted in the City of Lincoln was invalid under the court's narrowly defined definition of
Proposition 218.
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The establishment of utility rates is subject to the requirements of Proposition 218, which
requires that established rates do not exceed the proportional cost of service to any specific
class of customers.
As a result of the San Juan Capistrano ruling and concerns raised by members of the
community, the City of Lincoln voluntarily suspended rates in Tiers 4 and 5 in April 2017, as
the City believed those rates were no longer in compliance with Proposition 218.
On April 25, 2017, the City was sued over the residential water rate structure. The City has
settled the lawsuit and agreed to issue refunds to ratepayers who paid in excess of the cost of
service to provide water. ln the settlement agreement, the cost to provide waterwas applied at
identified to be $2.76 per thousand gallons for the purposes of calculating refunds.
Residential customers who paid water rates in Tiers 1, 2, and a portion of Tier 3 paid equal to
or less than $2.76 per thousand gallons. As such, those residential customers will not be
eligible for any refund.
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Revised 11-28-2017
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A small percentage of residential customers who paid Tier 3 water rates and those who paid
water rates in Tiers 4 and 5 will receive refunds for those amounts in excess of $2.76 per
thousand gallons. For water bills beginning in April 20'17, refunds will be issued for all
residential use in excess of 21,000 gallons per month for amounts paid in excess of $2.76 per
thousand gallons.
Although not required by the Settlement Agreement, the City Council will also be addressing
potential refunds to non-residential rate payers for payments for water made in excess of the
cost to provide service. The City is still in the process of calculating these refund amounts.
Refunds will be issued for the time period beginning February 2016 through the date of the
adoption of the City's new water rates, The City is currently establishing new water rates, which
are anticipated to be adopted in early 2018.
The City will notify the ratepayers of the refund process through an insert that will be placed in
an upcoming bill. Ratepayers entitled to a refund of less than $1,000 will receive a credit on
their account that will be applied against future water bills. The City will issue checks to
ratepayers who have refunds in excess of $1,000.
Two rounds of refunds will be issued. The first refund will be issued within 90 days of the
dismissal of thelawsuitforthetimeperiodof February2016throughMarch 2017. Thesecond
round of refunds will be issued within 90 days of the adoption of the new rates for the time
period of April 2017 until the adoption of new water rates. The dismissal of the lawsuit has not
occurred yet. This Fact Sheet will be updated when the dismissal date is known.
The City is in the process of setting new water rates in compliance with Proposition 218 and
invites all ratepayers to provide their input on the new rates. Any ratepayer who has questions
about the credit on the bill or refund may contact the Water Conservation Hotline at (916) 434-
2455 or via email atWaterRefund@lincolnca.gov. For additional details, please see the City's
website at www. Li ncol nCA.g ov.
¡ Although not required by the Settlement Agreement, the City Council approved refunds for
commercial rate-payers and multi-family residences for the same one year period covered by
the statute of limitations at the November 7,2017 regular meeting.
Reyrsed 11-28-2017
SETTLEMENT AGRBEMENT
This Settlement Agreement is made as of this October 16,2017 by and between Jerry W'
Jackson and Charles M. Schmidt ('Petitionors"), individuals, and the Cþ of Lincoln ("City'), a
California municipality, who agree as follows:
1. Recitals. This Settlement Agreernent is made with refere,nce to the following background
recitals.
1.1.On November 12,2013, City's Council adopted Ordinance No. 8888 enacting
new single-family residential water rates effective 2014 through 2017 ("Water
Rates"). The Water Rates included five tiers of volumetric water rates.
In March 2017, the City suspended its Tier 4 andTier 5 rates and all consumption
that would have otherwise been charged at Tier 4 and, Tier 5 rates (i.e' > 21
thousand gallons ("kgals") / month) is now charged at the Tier 3 rate.
On April 25,2017, Petitioners filed a lawsuit against City in Placer County
Superiìr Court titled Jacluon, et ø1. v. City of Lincaln, Case No' SCV0039384
("Pending Lawsuif '). Petitioners filed the lawsuit on behalf of a putative class of
City singie-family residential water service customers (hereinafter'oCustomer(s)")
and a[eged the'Water Rates as charged by City for the period of February 2016
through present violated Proposition 218 (Cal. Const.o art. XIII D' $ 6). The
lawsuit ãemanded, åmong other things, that the City issue refunds of the
volumetric water rates collected from the putative class allegedly in violation of
Proposition 218 from February 2016 to the date ofjudgment.
On September 25,2017, the parties agreed at mediation to resolve the Pending
Lawsuit on the terms set forth in this agreement.
t.2
1.3.
Z. Water Rate Refunds. City shall create a water rate refrmd fund and issue refunds to current
and former Customers, including Petitioners, as set forth in this agreement.
Z.l. Amount of Refunds for February 2016 to March 2011. For February 2016
through March z\n, the base formula the City shall use for determining each
refund shall be the volumetric amount each Customer paid for water under Tiers 4
and 5 of the Water Rates, less the City's cost of service for the water' For
purposes of this agreemenl, the City's cost of service for this period shall be
calculated as $2.76 per kgal. City and Petitioners agree that no refunds are due to
any Customer using water in Tier 3 for this time period. The City shall issue
refunds for this time period within 90 days of entry of dismissal described in
Section 3,4.
2.2. Amount of Refunds for April2017 until a New Tier 3 Rate Is Adopted. For
April 2017 through the month in which a new Tier 3 rate becomes effective, the
base formula the City shall use for determining each refund due to those charged
at Tier 3 of the Water Rates shall be the amount each Customer paid for water in
excess of 21,000 gallons and in excess of the 92.76 per kgal cost of water. The
.lackson v. City of Lincoln Settlcment
Agreement (00010589.DOCX;8)
1.4
1
¿".)
City shall issue refunds for this time period within 90 days of City's adoption of
new water rates.
City Cost of Service. The cost of service referenced in this agreement is a
negotiated sum and is not intended to be binding on the City for any purposes
other than this agreement.
Attorney Fees Paid from Water Rate Refund Fund. The City shall reduce the
total amount of the water rate refund fund by the attorney fees payment in
Section 3.3. Because the month in which a new Tier 3 rate will become effective
and the amount of future water consumption are unknown, the total a:nount of the
refunds due under Section 2.2 is unknown. In an eflort to distribute the attomey
fees payment equitably, the City will reduce the refund total in Section 2.1 by the
$150,000 attorney fees payment. Nothing herein shall affect the timing of the
attorney's fee paynent set forth in Section 3.3.
Refund Fund Calculations. The City's refund fund calculations for water rate
refunds under section 2.1 are reflected on Exhibit A, For refunds under section
2.2, the City shall prepare, and provide to Petitioners' attomeys, an updated
refund fund calculation within 30 days of the date a new Tier 3 rate becomes
effective.
Individual Refund Calculations. The City shall provide an individual Customer
refund calculation in writing to any Customer or former water service Customer
who requests one.
City Payment of Refunds, For cument Customers who are due $1,000 or less in
refrrnds shall be issued as a bill credit. Customers who are entitled to refunds in
excess of $1,000 shall receive a refund by check. For former Customers and for
Customers who cancel water service with a positive refund balance, the City shall
issue a refund check and employ the City's existing procedures and policies for
issuing refirnds to said Customers.
City shall include a bill insert with the first bill reflecting the credit that explains
that the credit resulted from a Proposition 218 refund. The City shall include the
same inseft with each refund check.
2.4.
2.5
2.6.
2.7.
3 Resolution of Pending Lawsuit
3.1. Waiver and Release of Refund Claims. Petitioners, on behalf of themselves,
but not on behalf of putative class members, r'elease and forever discharge the
City and its employees, adminisfrators, officers, directors, managers, attorneys,
agents, representatives, predecessors, successors, parents, subsidiaries, co-
venturers, and any affiliated entities of all claims for water rate refunds that were
asserted against the City in the Pending Litigation relating to and arising out of
the Water Rates. For the sake of clanty, this release does not encompass (a) any
claims arising from or related to excess reserves generated from the fees and
charges in the Water Rates or (b) any claims whatsoever as to putative class
members,
Jackson v. City of Lincoln Set¡lement
Agreement (0001 0589.DOCX;8)2
4.
The release is a full and final release applying to all released matters described in
this section. The parties waive all rights or benefits which they may now have or
in the future may have under the terms of section 1547 of the Civil Code of the
California, which reads:
A general release does not extend to the claims which the creditor does not
know or suspect to exist in his or her favor at ths time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.
Petitioners understand and accept the risk that they may have substantial rights,
claims, damages, demands, liabilities, actions or defenses arising out of or related
to the Pending Lawsuit, existing or arising on or before the effective date of this
Settlement Agreement, that have not yet manifested or that are presently
unknown, or that have not yet been identified, and the parties nevertheless intend
to and do deliberately release these possíble furure rights, claims, damages,
demands, liabilities, actions or defenses'
Petitioners agree not to file or prosecute against City any cause of action, suit, or
claim respecting any of the claims released by this agreement'
3.2. Attorneys Disqualifïed from Future Lawsuits. Petitioners' attorneys Eric
Benink, Beljamin Benumof and Krause, Kalfayan, Benink & Slavens, LLP are
disqualified from, and covenant not to file or pursue, any claim, lawzuit, or other
proceeding against the City related to the Water Rates.
3.3. Attorney Fees Payment. City shall pay Petitioners' attorneys $150,000 within
30 days of entry of the dismissal described in Section 3.4. Consistent with
Section 2.4, the payment to Petitionerso attorneys shall be paid solely from the
water rate refund fund created by the City's refund calculations as described in
section 2.4,
3.4. Retention of Jurisdiction and Dismissal of Pending Lawsuit. \Mithin ten (10)
court days of the full execution of this Settlement Agteement, the parties shali
execute a stipulation substantially in the form attached hereto as Exhibit B that
requests that tle Court (a) retain jurisdiction pursuant to Code of Civil Procedure
seCtion 664.6 and (b) dismiss this entire action with prejudice as to the Petitioners
and without prejudice as to the putative class. The parties agree that Petitioners
may file the Declaration of Eric J. Benink in Support of Request for Dismissal
substa¡tially in the form attached hereto as Exhibit C together with the
stipulation. If the Court declines to enter the dismissal as stþlated, or if the
Court modifies any term of this Settlement Agreement, then this settlement sha1l
immediately become null and void.
General Provisions.
4.1. Enforcement of Agreement. The parties agree that this agreernent is enforceable
and binding as of the date fust written above and may be enforced in any court of
Jackson v. City of Lincoln Setflemetrt
Agreement (0001 0589.DOCX;8)
a1
competent jurisdiction, including by way of motion pursuant to Code of Civil
Procedure section 664.6.
4.2. RepresentatÍons and Warranties Regarding Execution. Each party to this
agreement wa:rants and represents that in executing this agteement, it has had the
opportunity to consult with an attomey of its choice; that the teruns of this
agreement have been read and its consequences, including the risks,
complications and costs, are completely understood; that it fully understands the
terms of this agreement; and that each party is fully authorized to enter into this
agreement. Each party further acknowledges and represents that, in executing this
agreemento it has not relied on any inducements, promises, or representations
made by the opposing party or any person representing or sewing the opposing
parfy, except as specifically provided herein; and that each has signed this
agreement voluntarily, without any duress or undue influence on the part of, or on
behalf of, any party. Each person signing this agreemelrt on behalf of a party also
represents and wa¡rants that he or she has the authority and capacíty to make the
releases and promises set forth in this agreement and that each parfy is the owner
of and has not assigned or hypothecated any of the claims encompassed by this
agreement, whether known or unknown.
4.3. Costs and Attorney Fees. Except as provided in Section 3.3, each party shall
bear its own attomey fees, costs and expenses arising out of or connected with the
Pending Lawsuit.
4.4. Integration. This agreement constitutes the sole, fïnal, complete, exclusive and
integrated expression and statement of the terms of this contract among the parties
concerning the subject matter addressed herein, and supersedes all prior
negotiations, representations or agreements, either oral or written, that may be
related to the subject matter of this agreement. The parties agree that upon
execution of this Settlement Agreemen! this agreement supersedes and replaces
the Binding Settlement Agreønent dated September 25,2017 previously executed
by the parties. Each parfy acknowledges and represents that, in releasing,
discharging and settling ceftain claims and in entering into this agreement, it has
not acted in reliance upon any promiseo covenant, representation, warranty,
warning or inducement whatsoever, cxpress or implied, except as contained in
this agteement.
4.5. Governing Law. Except as otherwise required by law, this agreement shall be
interpreted, govemed by, and construed under the laws of the State of Califomia.
Any action to ent'orce or interpret this agreement shall be brought in the Superior
Court for the County of Placer,
4.6. Cooperation, Each party to this agreement agrees to do all things that may be
necessriry, including, without limitatiorU the preparation and execution of
documents which may be required hereunder, in order to implement and
effectuate this agreernent.
Jackson v. City ofl-incotn Settlement
Agreement (0û01 0589.DOCX;8)4
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Joint Drafting of Agreement. The parties aglee this,agreement hâs been jointly
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Cha*\cs 0'1. S^.t,'ÀL
JERRY W. JACKSON CHARLES M. SCHMIDT
Approved as to Form and section 3.2: Approved as to Form arrd section 3.2:
ERIC J. BENINK
Krause. Kalfayan. Benink & Slavens. LLP
BENJAMIN T. BENUMOF
Krause. Kaliþan, Berrink & Slave¡rs' LLP
For City:Approved as to Form:
PETER GILBERT
Mayor
BRUCE CI-INE
Interim City AttomeY
Exhibit A:
Exltibit B:
Exhibit C:
city Retund Funcl calculatioüs tbr February 2016 to March 20l7
Stipulation rc: Retention of Jurisdictio¡r Pursuattt to C.C.P. |i 664.6 and Dismissah
fi]roposedl Order Thereon [unexccuted]
Declaratio¡r of Eric J. Benink in Support of Request for Dis¡nissal [C.R'C' 3'770J
Iune.xecuted]
Juckson v. City ol'l,incohr Scttl€ûuJnl
^lfu(ÌrlìÈrl
(t'0iJ l()58q. IXX X:815
EXHIBIT A
Settlement Agreement - Exhibìt A
Refund Glculation Summary for February 2016 to March 2017
Jackson, et al. v. City of Lincoln
t¿'QV1.e ¿,L I 5,L5 51,622.88358811
),I Jö,+ó 58,034.3642,9L7 s20,930.09
Tier
2015-2016 4 538
$12,89s.
Amount Unrefunded Base AmountMonth Units Base Refund Amount Adiusted
5.743 S25,441.49 52r,224.99 51s,8s0.685541,292.r1
s62.396.23 S46,s97.08616,883 5121,388.77 s74,797.69
26.663 s118,117.09 s98,s41.18 973,589.884 Total $191,706.97
s347.67 s1s7.325¿s1 Ss73.99 $416.67
s2.638.91 s2,201,s6 5e96.36a361s3,63s.27
s1,03s.0c4375s3.776,25 52,74t.25 s2,286.93
52,L36.245774s7,794,18
6 2,952 s29.77s.60
4.519 s4s.sss.29
5s,6s7.94
_ _$21,628.08
$33,082,85
2015-2016 Totaf 31,182 5237.262.26
$8,147
srz,472.44
$86,062.32
59r,375.3220L6-24r7
5 Total
4 a 33,107 s264,524.93 $173,149.61
s85.761.48831,073 s248,273.27 s162,511.79 S135,s78,21
5102,225.79 $64,664.04923,429 s787,t97.7r s122,533.67
s22,L46.2410I,O24 s64,tLr.76 s41,96s.52 $3s,010.45
57,A29.14 S4,446.3611t,67t 512,871.89 $s,42s.53
92,370.AT2859s6,863.41 54,492.57 $3,748.00
$2,2os.24179956.3&1.01
2
.__$q,fie.tt
$3,2s8.29
s2.107.69
s3,486.21
, $2,7L8.28
51,7ss.38
s1,71¡.48
5L,1r2.28,3
a1a
4D3
s4,977.77
$3,2t9.97
s275,801.284 Totãl 99,928 5798,4A.72 $522,623.44 $436,007.46
588.783.11 s74068.81 s29,683.8c5710,755 s118,466.91
s22,92L.8C88,305 s91,s76.97 s68,6ss.1-7 5s7,276.74
s37,111.28 S14,821.2cIs,370 ss9,304.90 S44 483.7c
S4,686.48LO1,698 s19,398.64 $L4,712.16 512,273.87
52,620.7't S9s4.96L7346$4,096-36 S3,141.40
L2 52,968.1r
1 $6,446.s8
s2,242.23
54,862.34
2 $4,s43.80 53,434.28
$1_,870.63
$4,0s6.€
$2,86s.u
5777.62
$72s.Be
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s1,1q9.52
S281.s23
?6?_Þ7!_!a?
taz $1,213.62 s932.10
2016-2017 Totâl
Grand Tótal
76
$905,069.87 $755,069.87 s438,633.0!
L27,
1s8,925 sr,343,702.87
EXHIBIT B
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JERRY W. JACKSON, an individual, on
behalf of himself and all others similarly
situated; and CHARLES M. SCHMIDT, an
individual, on behalf of himself and all others
similarly situated,
Eric J. Beninþ Esq. (SBN 187434)
eric@,kkbs-law.com
Benjamin T. Bem¡mof, Esq. (SBN 227340)
ben(ò.kkbs-law.co¡n
KRAUSE, KALFAYAN, BENINK & SLAVENS, LLP
550 West C Street, Suite 530
San Diego, CA 92101
Tel: (619) 232-0331
Fax: (619) 2324019
Attorneys for Petitioners and Plaintifïs
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF PLACER
CaseNo.: SCV0039384
STIPULATION RE: RETENTION OF
JITSDICTION PURSUANT TO C.C.P. S
664.6 AND DISNIISSAL; [PROPOSEDI
ORDER THEREON
Petitioners and Plaintifß,
lcl,Ass ACTIONI
CITY OF LINCOLN, a general law city; and
DOES 1-10,
and Defendants
WHEREAS Plaintiffs and Petitioners Jerry 'W. Jackson and Charles M. Schmidt
("Petitioners") and the City of Linooln (*City") have executed a written Settlement Agreement
dated October 16,2017;
WHEREAS the Settlement Agreement provides for the Court to retain jurisdiction over
the parties and to enforce the terms of the Settlement Agreement pursuant to Code of Civil
Procedure section $ 66a.6;
WHEREAS the Settlement Agreement provides that the Petitioners request that this entire
action be dismissed with prejudice as to themselves and without prejudice as to the putative class;
and
v
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\4/HEREAS Petitioners have filed herewith, a Declaration of Eric J. Benink in Support of
Request for Dismissal pursuant to Califomia Rules of Court, Rule 3.770, which requires a
dismissal of a putative class action to be zupported by a declaration of certain facts.
WHEREFORE, IT IS HEREBY STIPULATED BY AND BETTVEEN THE PARTIES
that:
1. The Court shall retain jurisdiction over the parties and to enforce the terms of the
Settlernent Agreement pursuant to C.C.P. $ 664.6;
2. The Court shall dismiss this entire action with prejudice as to Petitioners and
without prejudice as to the putative class.
SO STIPULATED.
DATED:
Jerry W. Jackson, Petitioner
DATED
Charles M. Schmidt, Petitioner
DATED 10, [1- La I 'l
Peter Gilbert
for Defendant City of Lincoln
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ORDER
Upon reviewing the foregoing stipulation and the Declaration of Eric J. Benink in Support
of Request for Dismissal of Action and Exhibit I thereto (Settle,nrent Agreemeut) and good cause
appearing thereon,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:
(1) The Court shall retain jurisdiction over the parties and to enforce the terms of the
Settlement Agreement pursuant to Code of Civil Procedure section 664.6.
Ø This entire action is hereby dismissed with prejudice as to Petitioners Jeny'W.
Jackson and Charles M. Schmidt, and without prejudice as to the putative class.
SO ORDERED.
DATED:
ruDGE OF THE SUPERIOR COURT
Q+.inrrl otin¡scv0039384
EXHIBIT C
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Eric J. Benink, Esq. (SBN 187434)
eric@.kkbs-law,cent
Benjamin T. Benumof, Esq. (SBN 227340)
ben@kkhs-hw.com
KRÁUSE, KALFAYAN, BENINK & SLAVENS, LLP
550 West C Street, Suite 530
San Diego, CA 92101
Tel: (619) 232-0331
Fax: (619) 232-4019
Attomeys for Petitioners and Plaintiffs
JERRY W. JACKSON, an individual, on
behalf of himself and all others similarly
situated; and CHARLES M. SCHMIDT, an
individual, on behalf of himself and all others
similady situatsd,
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR T}TE COUNTY OF PLACER
CaseNo.: SCV0039384
DECLARATION OF ERIC J. BENINK IN
suPPoRT OF REQUEST FOR
DrsMrssAL [c.R.c. 3.7741
Petitioners and Plaintifß,ICLASS ACTIONI
CffY OF LINCOLN, a general law city; and
DOES 1-10,
Respondents and Defendants.
I, Eric J. Benink, declare as follows:
l. I am one of the attorneys for Petitioners and Plaintiffs ('?etitioners") in the above-
entitled action. I have personal knowledge of the facts stated below and if called upon, I could
and would testify competently thereto.
2. This action was filed on April 25,2An as a putative class action seeking refirnds for a
class of residential water ratepayers in the City of Lincoln ("City") who Petitioners claim paid
tiered rates that exceeded the true cost of water during the period February 9, 2016 through date
of judgmurt. More specifrcally, Petitioners allege that City's water rates at tiers 3,4, and 5
exceed the true cost of water inviolation of Proposition 218 (Cal. Const. att. XIIID, $ 6, subd.
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(bxl) and (3).) February g, 2016 marks the date one year prior to the date Plaintiffs submitted a
refund claim with the City in compliance with the Govemment Claims Act.
3. On September 25,2017, the parties participated in a mediation at JAMS in
Sacramento before Judge Cecily Bond (Ret.) Participating in the mediation on Petitioners' side
were both Petitioners, two members of a local ratepayer advocacy group called LIFT, my co-
counsel Ben Benumof, and myself. Participating on the City's side were two outside attorneys,
the Interim City Attorney, the City Manager, the Publíc Services Director, the City Engineer, and
the City Director of Support Services. The mediation lasted from 9:00 a-m. to approximately
7:00 p.m.
4. At all times, the negotiations were armsJength and adversarial' The mediation
concluded with the execution of a binding term sheet, which required formal City Council
approval and contemplated the preparation and execution of a more fonnal agreement. The City
Council approved the terms of the settleÍient during a closed session meeting the following day,
September 26,2017.
5. On October _, 2017, the parties executed a formal settlement agreement
(.,Settlement Agreement") a copy of which is attached hereto as Exhibit 1. The Settlement
Agreernent requires that Petitioners request dismissal of the current action with prejudice as to
themselves and without orejrrclice as to the putative class. It also requires the Court to retain
jurisdiction pursuant to Code of Civil Procedure section 664.6.
6. The highlights of the settlement Agreement are as follows:
a) The City will provide refunds to water ratepayers either through water bill credits
or refund checks based on alleged overcharges during the class period and that obligation will
continue until the City adopts a new Tier 3 rate. Through August 20L7, that amount is
approximately $1,002,000. Although there are a number of factors that one could argue alter the
damages caleulation, I believe that the amounts the City has agreed to credilrefund re,present
close to 100% of the damages Petitioners would likely recover for class members applying
reasonable assumptions about the damages.
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b) The City provided refund calculations which show that approximately $755,000
will be refunded/credited for the period February 2016 through April 2017. (See Settlement
Agreement, Ex. A). The City will provide updated refund/credit calculations for the remaining
period within 30 days of the date a new Tier 3 rute is adopted. The City has been working
towards adopting a new water rate resolution all year and it is my understanding that the City
expects to adopt new rates (including a new Tier 3 rate) in January 2018.
c) Petitioners shall release only claims pertaining to the issues raised in the lawsuit as
to the current water rate shucture. The putative class members aÍe not releasing any claims and
those claims have been explicitly reserved. The parties are required to f,rle a stipulation
requesting disrnissai of the entire action with prejudice as to Petitioners and without prejudice as
the putative class.
d) Petitioners' attorneys shall be paid $150,000 for attorney's fees and costs from the
funds created for ratepayers. This sum was negotiated at the mediation after all other terms were
negotiated.
7. The Settlement Agreement represents all consideration given in exchange for
Petitioners' request for dismissal, No other promises or agreements have been rnade.
8. I believe that in light of the fact that putative class members are obtaining a
substantial reeovery without having to provide any release of their claims and without the risk and
delay of continued litigation, a dismissal of this class action lawsuit is fair and reasonable.
I declale under penalty of perjury that the foregoing is true and conect.
Executed in San Diego, CA on October
-,2Q17.
Eric J. Benink
1Tìc¡l¡ra+inn nfErin I Eleninl¡
Filed 8/9/1 1 ; pub. order & mod. 8125/11 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
CITY OF PALMDALE,8224869
Plaintiff and Appe llant,(Los Angeles County
Super. Ct. No. 8C4I3907)
PALMDALE WATER DISTRICT, et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Conrad R. Aragon, Judge. Reversed.
Wm. Matth ew Ditzhazy, City Attorney, Clty of Palmdale ; Richards,
'Watson & Gershon, Gregory M. Kunert and Whitrey G. McDonald for Plaintiff and
Appellant.
Lagerlof, Senecal, Gosney & Kruse, Timothy J. Gosney, James D. Ciampa
and Francis J. Santo for Defendants and Respondents.
Daniel S. Hentschke for Association of California Water Agencies
(ACWA) as Amicus Curiae on behalf of Defendant and Respondent Palmdale Water
District.
v
INTRODUCTION
In this appeal, the City of Palmdale (Crty) asserts the trial court erred in finding
the Palmdale Water District (P\ /D) had adopted a new water rate sffucture in conformity
with the constitutional requirements of Proposition 218.
After conducting an independent review of the record (Silicon Valley Taxpayers'
Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal. rh 43I, 448), we
conclude PWD failed to satisfy its burden to establish that its new water rate structure
complies with the mandates of Proposition 218 (as set forth in article XIII D of the
California Constitution (article XIII D)), including the proportionality requirement which
specifies that no fee or charge imposed upon any person or parcel as an incident of
property ownership shall exceed the proportional cost of the service attributable to the
parcel. Accordingly, we reverse the judgment.
FACTUAL AND PROCEDURAL SUMMARY
As of 2008, Palmdale Water District (PWD) revenues had decreased by about
$1.3 million ("primarily due to a decline in water sales"), while its expenses had
increased by about $1.2 million in 2008 (and $2.4 million ín2007). PWD's General
Manager concluded a 15 percent rate increase was necessary to balance the budget.
At a cost of $136,000, Palmdale \Mater District GUID) retained Raftelis Financial
Consultants (RFC) to prepare a rate sfudy and recommend a new rate structure.
According to RFC's Water Rate Study Report, PWD serves a population of
approximately 145,000 with about 26,000 service connections. PWD's water supply
consists of 60 percent surface water (from Little Rock Reservoir and State Water Project
(SWP)) and 40 percent from PWD's 25 arca groundwater wells. Single family residential
customers account for 72 percent of PWD's total water usage. Remaining water usage is
as follows: commercial/industrial (10 percent), multi-family residential (9 percent),
inigation (5 percent), and construction and other customers such as qchools and
municipalities (4 percent).
2
According to RFC's report, over the preceding five years, PWD had spent more
than $56 million to upgrade its water ffeatment plant and depleted its reserves. PWD
wanted to issue S38.25 million in debt by July 2009 for future capital projects and
refinancing. RFC presented policy issues for the Board to decide, including water budget
allocation defaults and methods for calculating desired fixed revenue from proposed new
rates. RFC advised the Board regarding two options for determining fixed revenues: a
"Cost of Service" option and a "Percentage of fixed cost" option. Advantages of the Cost
of Service option were noted as "Defensible-Prop 218" and "Consistent with industry
standards" but one disadvantage was "Greater revenue fluctuation with varying demand."
An advantage of the alternative (FV) option was "rate stability" while disadvantages
included "Significant impact on small customers who conserye water" and "weaker
signal for water conservation." RFC indicated fixed revenue should not exceed 30
percent ofrevenues.
RFC again met with PWD's Board regarding the "need to adopt a water rate
increase structure for a future bond issue . . . ." It was determined P'WD's new rate
structure would recover 75 percent of its costs from fixed fees and 25 percent from
variable fees "based on the bond team's recofllmendation and conservation factors. . . ."
The proposed rate structure then included a fixed monthly service charge based on meter
size and commodity charges based on a water budget allocation. Residential customers
were provided indoor and outdoor allocations, commercial customers received a three-
year average allocation and irrigation customers received only an outdoor allocation.
Commodity rates were then imposed under a tiered strucûre, determining how much the
çustomer went over (or stayed within) the allocated budget.
aJ
Again, RFC presented two options for determining the commodity rates and
monthly service charge: the Cost of Service (COS) option and the Fixed/Variable Cost
Allocation (FV). With the FV option, monthly fixed charges would represent 75 percent
of total costs while the COS alternative would include only billing and customer Service
costs plus meter charges in the fixed monthly fees. RFC indicated this option offered
'omore revenue stability" but a "weaker conservation signal." The reverse was true for
the COS option: "less revenue stability" but aoostronger conservation signal."
When RFC presented its final Water Rate Study Report to the PWD Board in
March 2009, the Board approved the FV option but modified it such that 60 percent of
fixed costs would be recovered from fixed monthly charges and 40 percent would be
recovered from variable charges.
PV/D prepared a "Notice of Public Hearing" pursuant to Proposition 218, and the
City (and its Redevelopment Agency) sent letters to PWD protesting the rate increase.
PWD held a public hearing in May 2009 at which City representatives spoke against the
increase and members of the public appeared to object as well. At the same meeting, the
Board adopted a resolution approving its 2009 bonds to replenish its reserves. "The
success of this bond issue is dependent on the adoption of the pending water rate
increases."
As approved, the new rate structure now imposes a fixed monthly service charge
based on the size of the customer's meter and a per unit commodity charge for the
amount of water used, with the amount depending upon the customer's adherence to the
allocated water budget. The customer pays a higher commodity charge per unit of water
above the budgeted allotment, but the incremental rate increase depends on the
customer's class. More particularly, all customers pay Tier I rates ($.64lunit in 2009) at
0 to 100 percent of their water budget allocation. Thereafter, however, the increased rate
depends on the customer category:
4
SFR/MFR Commercial Irrigation
Tier 2 ($2.50luniÐ IA\-nSyo 100-130% 0-n0o/o
Tier 3 ($3.20luniÐ I25-I5Ao/o 130-I60yo 110-1200./0
Tier 4 ($4.16/uniÐ 150-l75yo ï60-1900/0 120-I30yo
Tier 5 ($5.03/uniÐ1 Above l75o/o Above Ig0o/o Above l30o/o
The following day, the City filed a complaint seeking to invalidate the water rate
increase and the 2009 bonds. (The case was deemed related to another action fîled by the
City against PWD seeking injunctive and declaratoryrelief to stop imposition of the new
rates. The cases were not consolidated.)
This action was tried in February 2AI0. The City sought to introduce evidence
beyond the scope of the administrative record, after propounding discovery and serving
Public Records Act requests for documents. The trial court granted the City's motion to
amend its complaint but denied its motion to augment the record. The City filed an offer
of proof identiû¿i.,g evidence it would have presented at trial had it been allowed to do so
and requested a statement of decision. Initially, the trial court's tentative ruling was to
invalidate the rate increase but after hearing oral argument and taking the matter under
submission, the trial court issued its ruling validating PWD's rates and the 2009 bonds.
At the court's request, both the City and PWD submiued proposed statements of decision
(and the City also filed objections to P'WD's statement). The court issued PWD's
statement without changes. (The court mistakenly believed the City had not filed a
proposed statement but when the error was brought to the court's attention, decided
PWD's statement should stand.) Judgment was entered. The City appeals.
1 These costs per unit are the tiered rates for 20}9;the per unit cost increases each
year thereafter while the tier percentages remain the same.
5
DISCUSSION
"In November 1996, California voters adopted Proposition 218, the Right to Vote
on Taxes Act.[] In adopting this measure, the people found and declared ""that
Proposition 13 was intended to provide effective tax relief and to require voter approval
of tax increases. However, local governments have subjected taxpayers to excessive tax,
assessment, fee and charge increases that not only frustrate the purposes of voter approval
for tax increases, but also threaten the economic security of all Californians and the
California economy itself. This measure protects taxpayers by limiting the methods by
which local governments exact revenue from taxpayers without their consent."" [ ]"
(Howørd Jawis Taxpayers Assn. v. City of Roseville (2002) 97 Cal.App.4th 637, 640,
footnotes omitted.) "Proposition 218 added articles XIII C and XIII D to the California
Constitution. Article XIII C concerns voter approval for local government general taxes
and special taxes. Article XIII D sets forth procedures, requirements and voter approval
mechanisms for local government assessments, fees and charges. We are concerned here
with article XIII D, specifically certain provisions concerning fees and charges." (Ibid.)
The relevant California Constitution, article XIII D provisions on fees and charges
are as follows:
"fSection] 1. Application of article. Notwithstanding any other provision of law,
the provisions of this article shall apply to all assessments, fees and charges, whether
imposed pursuant to state statute or local government charter authority. . . .
"fSection] 2. Def,rnitions. As used in this article: tl|l . . . tl|l
"(e) 'Fee' or 'charge' means any levy other than an ad valorem tax, a special tax,
or an assessment, imposed by ar agency upon a parcel or upon a person as an incident of
property ownership, including a userfee or chørge for a property-related service.l\|. . .
tTl
"(g) 'Property ownership' shall be deemed to include tenancies of real property
where tenants are directþ liable to pay the assessment, fee, ot charge in question.
"(h) 'Property-related service' means a public service having a direct relationship
6
to property ownership t'!Tl . . . tfll
"fSection] 3. Limitation of propertytaxes, assessments, tbes and charges[.]
"(a) No tax, assessment, fee, or charge shall be assessed by any agency upon any
parcel of property or upon any person as an incident of property ownership except:
"(1) The ad valorem properlry tax imposed pursuant to Article XIII and Article
)flI A.
"(2) Any special tax receiving a two-thirds vote pursuant to Section 4 of Article
)ilII A.
"(3) Assessments as provided by this article.
"(4) Fees or charges þr property related services as provided by this article.
"(b) For purposes of this article, fees for the provision of electrical or gas service
shall not be deemed charges or fees imposed as an incident of property ownership.[2]
"fSection] 6. Property Related Fees and Charges.
"(a) Procedures for New or Increased Fees and Charges. An agency shall follow
the procedures pursuant to this section in imposing or increasing any fee or charge as
defined pursuant to this article [these procedures include notice to property owners, and a
public hearing for proposed new or increased feesl: tTl . . . t!ÌI
"(b) Requirements for Exisîing, New or Increased Fees qnd Charges. A fee or
charge shall not be extended, imposed, or increased by any agency unless it meets att of
the following requirements :
"(1) Revenues derived from the fee or charge shall not exceed the funds required
to provide the property-related service.
"(2) Revenues derived from the fee or charge shall not be usedfor any purpose
other than that for which the fee or charge was imposed.
"(3) The amount of a fee or charge imposed upon any parcel or person as an
2 Section 4 sets forth procedures and requirements for assessments analogous to the
procedures and requirements for fees and charges set forth in section 6, post. Section 5
specifies the effective date and exemptions from Section 4.
7
incident of property ownership shall not exceed the proportional cost of the service
arffibutable to the parcel.
"(4) No fee or charge may be imposed for a service unless that service is actually
used by, or immediately available to, the owner of the property in question. Fees or
charges based on potential or future use of a service are not permitted. Standby charges,
whether charactenzed as charges or assessments, shall be classified as assessments and
shall not be imposed without compliance with Section 4.
"(5) No fee or charge may be imposed for general governmental services
including, but not limited to, police, fire, ambulance or library services, where the service
is available to the public at large in substantially the same manner as it is to property
owners. [!f] Reliance by an agency on any parcel map, including, but not limited to, an
assessor's parcel map, may be considered a significant factor in determining whether a
fee or charge is imposed as an incident of property ownership for purposes of this article.
In any legal action contesting the validity of afee or chørge, the burden shøll be on the
qgency to demonstrate complionce with this article.
"(c) Voter Approval for New or Increased Fees and Charges. Except for fees or
charges for sewer, water, and refuse collection services, no property-related fee or charge
shall be imposed or increased unless and until that fee or charge is submitted and
approved by a majority vote of the property owners of the property subject to the fee or
charge or, at the option of the agency, by a two-thirds vote of the electorate residing in
the affected area. The election shall be conducted not less than 45 days after the public
hearing. . . .
"(d) Beginning July I, 1997, all fees or charges shall comply with this section."
(Italics added.)
As our Supreme Court emphasize d in Silicon Valley, sttpt ø, 44 Cal.4th 43 1, "We
""'must enforce the provisions of our Constitution and 'may not lightly disregard or blink
at . . . a cleat constitutional mandate.)"") fCitation.] In so doing, we are obligated to
construe constitutional amendments in a manner that effectuates the voters' purpose in
I
adopting the law. [Citation.]" (Id.at p. 448.) "Because Proposition 218's underlying
purpose was to limit government's power to exact revenue and to curtail the deference
that had been ûaditionally accorded legislative enactments on fees, assessments, and
charges, a more rigorous standard of review is warranted," and we must exercise our
"independent judgment" in determining whether PWD's rate increase violates article XIII
D (Proposition 218). (Ibid.)
Among other substantive challenges, the City argues PWD failed to demonstrate
that its water rates are proportional to the cost of providing water service to each parcel as
required under section 6(bX3) of article XIII D: "The Proposition2lS Ballot Pamphlet
makes clear that the voters intended that 'No property owner's fee may be more than the
cost to provide service to that property owner's land."' Nevertheless, the City says,
PWD's rates violate this proportionality requirement in a number of respects: (1) for no
permissible purpose (according to the City), PWD admiuedly targets irrigation users to
pay dramatically higher and disproportionate water rates; (2) PWD's monthly service
charge is arbitrary and not tied to the actual costs of providing identified services to each
meter; (3) PïVD's commodity charge tiers are not proportional to the costs of providing
water service; (4) P'WD's water budget structure is not proportional to the costs of
providing water service and fails to achieve its stated purpose. Moreover, the City urges,
PWD failed to prove its revenues under the new rate structure will not exceed the costs of
providing water service in contravention of Article XIII D, section 6(bX1), and instead
"a11but assures that revenues PWD receives from customers in the higher tiers will be
more than is required to cover PWD's costs of service." Further, the City says, PWD's
new rates require irrigation users to pay for services they cannot receive in violation of
section 6(bX4) of Article XIII D.
According to the City, "PWD's scheme charges a few irrigation users a vastly
disproportionate share of PV/D's total costs. PWD makes no showing whatsoever that
P'WD's cost of delivering service to those irrigation users is proportionately higher than
PWD's costs of delivering service to residential and commercial users. The record shows
9
that PWD intentionally seeks to recoup most of its costs from a relatively few irrigation
users (who happen to be institutions such as the City), so as to keep costs to the vast
majority of PWD's customers proportionately low. This sort of price discrimination is
not allowed under Proposition 218 . . . ."
In response, PWD asserts that the structuring of the various tiers does not even
constitute a "fee or charge" for purposes of Proposition 18 but merely "dehned
percentages of a customer's water budget that define the breaking points for the
applicable tiers," but this is inconsistent with the law as PWD uses these tiers to calculate
its customers' water rates. "Because it is imposed for the property-related service of
water delivery, [PWD's] water rate, as well as its fixed monthly charges, are fees or
charges within the meaning of article XIII D . . . ." (Bighorn-Desert View Water Agency
v. Verjil (2006) 39 Cal4th205,217.) "lAlll charges for water delivery" incurued after a
water connection is made "are charges for a property-related service, whether the charge
is calculated on the basis of consumption or is imposed as a fixed monthly fee." (Ibid.)
Next, PWD says it is entitled to promote conservation in such a manner pursuant
to Article X, section 2, of lhe California Constitution: "It is hereby declared that because
of the conditions prevailing in this State the general welfare requires that the water
resources of the State be put to beneficial use to the fullest extent of which they are
capable, and that the waste or uffeasonable use or unreasonable method of use of water
be prevented, and that the conservation of such waters is to be exercised with a view to
the reasonable and beneficial use thereof in the interest of the people and for the public
welfare. The right to water or to the use or flow of water in or from any natural stream or
water course in this State is and shall be limited to such water as shall be reasonably
required for the beneficial use to be served, and such right does not and shall not extend
to the waste or uffeasonable use or umeasonable method of use or uffeasonable method
of diversion of water. . . . This section shall be self-executing, and the Legislature may
also enact laws in the furtherance of the policy in this section contained."
10
In addition, PWD notes, consistent with this constitutional provision, the
Legislature enacted'Water Code section 372 (allocation-based conservation water
pricing) which provides :
"(a) A public entity may employ allocation-based conservation water pricing that
meets all of the following criteria:
" (1) Billing is based on metered water use.
" (2) A basic use allocation is established for each customer acçount that provides
a reasonable amount of water for the customer's needs and properly characteristics.
Factors used to determine the basic use allocation may include, but are not limited to, the
number of occupants, the type or classification of use, the size of lot or irrigatedarea, and
the local climate data for the billing period. Nothing in this chapter prohibits a customer
of the public entity from challenging whether the basic use allocation established for that
customer's account is reasonable under the circumstances. Nothing in this chapter is
intended to permit public entities to limit the use of property through the establishment of
a basic use allocation.
"(3) A basic charge is imposed for all water used within the customer's basic use
allocation, except that at the option of the public entrty, a lower rate may be applied to
any portion of the basic use allocation that the public entity has determined to represent
superior or more than reasonable conservation efforts.
"(4) A conservation charge shall be imposed on all increments of water use in
excess of the basic use allocation. The increments may be fixed or may be determined on
a percentage or any other basis, without limitation on the number of increments, or any
requirement that the increments or conservation charges be sized, or ascend uniformly, or
in a specified relationship. The volumetric prices for the lowest through the highest
priced increments shall be established in an ascending relationship that is economically
strucfured to encourage conservation and reduce the inefÍicient use of water, consistent
with Section 2 of Article X of the California Constitution.
11
"(b) (1) Except as specified in subdivision (a), the design of an allocation-based
conservation pricing rate structure shall be determined in the discretion of the public
entity.
"(2) The public entity may impose meter charges or other fixed charges to reçover
fixed costs of water service in addition to the allocation-based conservation pricing rate
structure.
"(c) A public entity may use one or more allocation-based conservation water
pricing structures for any class of municipal or other service that the public entity
provides." (Wat. Code, 5 372.)
While this statute contemplates allocation-based conservation pricing consistent
with Article X, section 2, P'WD fails to explain why this provision cannot be harmonized
with Proposition 218 and its mandate for proportionality. PWD fails to identi$i any
support in the record for the inequality between tiers, depending on the category of user.
In addition, PWD says, "the distinct tiers for irrigation users are [further]
supported by'Water Code section 106, which expressly recognizes that the use of water
for domestic purposes is superior to that for inigation usage." However, the precise
language of section 106 is as follows: "It is hereby declared to be the established policy
of this State that the use of water for domestic purposes is the highest use of water and
that the next highest use is for irrigation." (W'at. Code, $ 106, italics added; and see
Deetz v. Carter (1965) 232 Cal.App.zd 851, 854, 856 [domestic use includes
"consumption for the sustenance of human beings, for household conveniences, and for
the care of livestock," but not "commercial purposes"].) Yet, under P'WD's tier structure,
commercial users are permitted to use amounts of water exceeding their budgeted
allocation under Tier 1 at a lower cost than irrigation only users-without any
explanation for this disparity even attempted by PWD.
Article X, section 2 is not at odds with Article XIII D so long as, for example,
conservation is attained in a manner that "shall not exceed the proportional cost of the
T2
service attributable to the parcel." (Art. XIII D, $ 6, subd. (bX3).) According to the
record, the efficient use of water in keeping with the policy in favor of water conservation
is already built into the customer's budgeted allocation (the Tier 1 rate which is equal for
all users). Yet, a review of the tier structure alone establishes that irrigation customers
such as the City are charged disproportionate rates (reaching Tier 5 ($5.03/unit) rates at
130 percent of their budgeted allocation as compared to other users who do not reach
such high rates until they exceed L75 percent (SFR) and 190 percent (Commercial)
without any showing by PWD of a corresponding disparity in the cost of providing water
to these customers at such 1eve1s.3 Notably, PWD's "IRR" category means customers
designated as "irrigation only" users; PWD does not segregate the recognized outdoor
and inigation usage of its other customers such as residential or commercial users. As a
result, a residential (single or multi-family) or commercial user (constrained only by its
historical three-year average usage) could waste or inefficiently use water by, for
example, filling, emptying and refilling a swimming pool or excessively hosing off a
work site or parking lot without the same proportional cost because of the significant
disparity in tiered rates for water use in excess of the customer's allotted water budget.
According to the record, it is the furigation only user (perhaps, as the City urges,
maintaining playing fields, playgrounds and parks for example) who is 'þotentially the
most impacted," without a corresponding showing in the record that such impact is
justified under Article X, section 2, or permissible under Article XIII D, section 6.
As stated in section 6, subdivision (b)(5) of Article XIII D, "In any legal action
contesting the validity of a fee or charge, the burden shall be on the agency to
demonstrate compliance with this article." According to RFC, it was the cost of service
3
Tíer 2 ($2.50/unit)
Tier 3 ($3.20lunit)
Tier 4 ($4.16/urrit)
Tier 5 ($5.03/unit)
SFR/MFR
100-I25o/o
I25-t50yo
t50-t75yo
Above l75o/o
Commercial
100-I30o/o
130-I60vo
160- 190%
Above I90a/o
Irrigation
0-ll0o/o
Irc-I2AYI
120-130o/"
Above I30o/o
13
(COS) option-the option PWD díd not choose-that was "[d]efensible [under]
Propfosition] 218," and this option was also "[c]onsistent with industry standards," but it
meant "fg]reater revenue fluctuation with varying demand." On the other hand, RFC
advised PWD the "percentage of fixed cost" or FV option it ultimately chose would send
a"fwjeaker signal for water conservation" and would mean a "fs]ignificant impact on
small customers who conserve waÍ.er," but afforded "rate stability." (Italics added.) It
follows that PWD has failed to carry its burden to demonstrate compliance with the
requirements of article XIII D, and the judgment must be reversed.4
DISPOSITION
The judgment is reversed. The City is entitled to its costs of appeal.
lvooDs, J.
'lVe concur:
PERLUSS' P.J.ZELON, J.
4 In addition to arguing PWD's rate structure violated the proportionality
requirement of Proposition 218, the City says the trial court abused its discretion in
denying its motion to augment (beyond the administrative record) and raises a number of
additional substantive and procedural challenges, but we need not address these
additional arguments in light of our disposition of the preceding issue.
T4
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORMA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
CITY OF PALMDALE,8224869
Plaintiff and Appellant (Los Angeles County
Super. Ct. No. 8C4I3907)
PALMDALE WATER DISTRICT, et al.,
ORDER MODIFYING OPINON;
NO CHANGE II{ JUDGMENT
CERTIFIED FOR PUBLICATION
Defendants and Respondents.
THE COURT:
It is ordered that the opinion filed herein on August 9,2A11, and not certified for
publication, be modified as follows:
1. The opinion was not certified for publication in the Official Reports. For
good cause it now appears that the opinion should be published in the Official Reports
and it is so ordered.
2. On page 10, in the first full paragraph, there is a reference to "Proposition 18."
It should read "Proposition 218."
The foregoing does not change the judgment.
wooDs, J.
V
PERLUSS, P. J.
15
Filed 5119115 (unmodified opn. attached)
CERTIF'IED F'OR PUBLICATION
IN THE COLIRT OF APPEAL OF TI{E STATE OF CALIFORNIA
FOI]RTH APPELLATE DISTRICT
DTVISION THREE
CAPISTRANO TA)GAYERS
ASSOCIATION INC.,
Pl aintiff and Respondent,
G048969
(Super. Ct. No. 30-2012-00594579)
CITY OF SAN ruAN CAPISTRANO,
Defendant and Appellant.
ORDER MODIFYING OPINION;
NO CHANGE IN JUDGMENT
On May 6,2015, the defendant in this case, City of San Juan Capistrano,
called "City Watet'' in the published opinion, filed a petition for rehearing of the court's
decision of April 20,20T5. On May ll, City Water formally requested withdrawal of the
petition for rehearing. The request is now GRANTED.
The opinion in this case filed April 20, 2015, is hereby modified in the
foll owing particul ars :
V
l. On page 4, after the word "parcel" in the paragraph at the top, remove
the period and add the following to complete the sentence: " - at least without a vote of
the electorate."
2. Onpage 4, in the paragraph that begins at the bottom, 'In February
2011" should read "in February 2010."
3. On page 10, in the last full paragraph, delete "Water Code" and replace
with "Government Code. "
4. On page 10, beginning of footnote 13, delete "Water Code" and replace
with "Government Code. "
5. On page 26, delete the first two sentences in the fïrst complete paragraph
on the page (the one that begins with "City Water's theory") and substitute these two
sentences in its stead: "City Water's theory of penalty rates relies on article XItr C,
section 1, subdivision (e)(5). This subdivision defines the word 'tax' to exclude fines
'imposed by' a local govemment 'as a result of a violation of law."' Footnote 22 andthe
balance of the paragraph remain the same.
6. On page27, delete the first sentence of the first complete paragraph, and
substitute this paragraph in its stead: "The way Proposition 218 operates, water rates that
exceed the cost of service operate as a tax, similar to the way a 'carbon tax' might be
imposed on use of energr. But, we should emphasize. Just because such above-cost
rates are a tax does not mean they cannot be imposed - they just have to be submitted to
the relevant electorate and approved by the people in a vote. There is no reason, for
example, why a water district or local govemment cannot, consistent with Proposition
218, seek the approval of the voters to impose a tax on water over a given level of usage
- ¿ìs we indicated earlier, that might be a good idea. However, if a local govemment
body chooses to impose tiered rates unilaterally without a vote, those tiers must be based
on cost of service for the incremental level of usage, not pre-determined budgets. (For
2
the moment, of course, we need not decide whether such a proposed tax would constitute
a general tax or special tax.)"
7 . On page 2'l, at the sentence that begins "City Water's Article X, section
2 position," begin a new paragraph, but delete the existing sentence (the one that begins
"City Water's Article X, section 2 position" and substitute this sentence (as the new
beginning sentence): "Having chosen to bypass the electorate, City Water's Article X,
section 2 position kept it from explaining to uswhy it cannot anchor rates to cost of
service." The balance of that paragraph remains unchanged.
These modifications do not affect the appellate judgment
BEDSWORTH, ACTTNGP. J
WE CONCUR:
MOORE, J
THOMPSON, J
aJ
Filed 4120115 (unmodified opn.)
CERTII'IED FOR PUBLICATION
IN TI{E COURT OF APPEAL OF TITE STATE OF CALIFORNIA
FOURTTI APPELLATE DISTRICT
DIVISION THREE
CAPISTRANO TAXPAYERS
ASSOCIATION,INC.,
Plaintiff and Respondent,
G048969
(super. ct. No. 30-2012-00594579)
O PINI ON
CITY OF SAN JUAN CAPISTRANO,
Defendant and Appellant.
Appeal from a judgment of the Superior Court of Orange County, Gregory
Munoz, Judge. Affirmed in part; reversed in part and remanded.
Colantuono & Levin, Colantuono, Highsmith & Whatley, Michael G.
Colantuono, Tiana J. Murillo and Jon di Cristina; Rutan & Tucker, Hans Van Ligten and
Joel Kuperberg for Defendant and Appellant.
Best, Best & Krieger and Kelly J. Salt for the Association of Califomia
Water Agencies, League of California Cities and Califomia State Association of Counties
as Amicus Curiae on behalf of Defendant and Appellant.
V
Mills Legal Clinic at Stanford Law School, Environmental Law Clinic and
Deborah A. Sivas for Natural Resources Defense Council and Planning and Conservation
League as Amicus Curiae on behalf of Defendant and Appellant.
AlvaradoSmith, Benjamin T. Benumof and William M. Hensley for
Plaintiff and Respondent.
Howard Jarvis Taxpayers Foundation, Trevor A. Grimm, Jonathan M.
Coupal, Timothy A. Bittle and Ryan Cogdill as Amicus Curiae on behalf of Plaintiff and
Respondent.
Foley & Mansfield and Louis C. Klein for Mesa Water Distriø as Amicus
Curiae on behalf of Plaintiff and Respondent.
trl.*
I. INTRODUCTON
Southem California is a "semi-desert with a desert heart."l Visionary
engineers and scientists have done a remarkable job of making our home habitable, and
too many of us south of the Tehachapis never give a thought to its remarkable
reclamation. In his brilliant - if opinionated - classic Cadillac Desert, the late Marc
Reisner laments how little appreciation there is of "how difficult it will be just to hang on
to the beachhead they have made."2
In this case we deal wrth parties who have an acute appreciation of how
tenuous the beachhead is, and how desperately we all must fight to protect it. But they
disagree about what steps are allowable - or required - to accomplish that task. We are
called upon to determine not u¡hat is the right - or even the more reasonable - approach
to the beachhead's preservation, but what is the one chosen by the state's voters.
We hope there are future scientists, engineers, and legislators with the
wisdom to envision and enact water plans to keep our beloved Cadillac Desert habitable.
Walter Prescott Webb. "The American West, Perpetual Mirage," Harper's Magazine, May, 1957
Reisner. Cadillac Desert, p. 6.
1
,'
2
But that is not the court's mandate. Our job - and it is daunting enough - is solely to
determine what water plans the voters and legislators of the past have put in place, and to
determine whether the trial court's rulings complied with those plans.
We conclude the trial court erred in holding that Proposition 218 does not
allow public water agencies to pass on to their customers the capital costs of
improvements to provide additional increments of water - such as building a recycling
plant. Its findings were that future water provided by the improvement is not
immediately available to customers. (See Cal. Const., art. XIII D, $ 6, subd. (b)( )) [no
fees "may be imposed for a service unless that service is actually used by, or immediately
available to, the owner of the properly in question"].) But, as applied to water delivery,
the phrase "a service" cannot be read to differentiate between recycled water and
traditional, potable water. Water sewice is already "immediately available" to all
customers, and continued water service is assured by such capital improvements as water
recycling plants. That satisfies the constitutional and statutory requirements.
However, the trial court did not em in ruling that Proposition 218 requires
public water agencies to calculate the actual costs of providing water at various levels of
usage. Article XIII D, section 6, subdivision (b)(3) of the Califomia Constitution, as
interpreted by our Supreme Court in Bighorn-Desert View Water Agency v. l/erjil (2006)
39 Cal. thãAs,226 (Bighorn) provides that water rates must reflect the "cost of service
attributable" to a given parcel.3 While tiered, or inclined rates that go up progressively in
relation to usage are perfectly consonant with article XIII D, section 6, subdivision (b)(3)
andBighorn, the tiers must still corespond to the actual cost of providing service at a
given level of usage. The water agency here did not try to calculate the cost of actually
3 Until B ighorn,there was a question as to whether Proposition 218 applied at all to water rates. In
2000, the appellate court in HowardJarvis Tatpayers Asm. v. City of Los Angeles (2000) 85 Cal,App. lh79,83
(Jarvis v. Los Angeles), held that a city's water rates weren't subject to Proposition 2 1 8, reasoning that water rates
are mere commodity charges. Bighom, however, formally disapproved -/ørvis v. Los Angel¿s and held that water
ratesaresubjecttoarticle)(IllDoftheCaliforniaConstitution. (Bighorn,supra,39Cal. thatp.217,1n.5.)
-t
providing water at its various tier levels. It merely allocated all its costs among the price
tier levels, based not on costs, but on pre-determined usage budgets. Accordingly, the
trial court correctly determined the agency had failed to carry the burden imposed on it
by another part of Proposition 218 (art. XIII D, $ 6, subd. (bX5)) of showing it had
complied with the requirement water fees not exceed the cost of service attributable to a
parcel. That part of the judgment must be affrrmed.
TI. FACTS
Sometimes cities are themselves customers of a water district, the best
example in the case law being the City of Palmdale, which successfully invoked
Proposition 218 to challenge the rates ll was paying to a water district.a (See City of
Palmdale v. Palmdale IIlater Dist. (2011) 198 Cal.App.4th926 (Palmdøle)). And
sometimes cities are, as in the present case, their own water district. As Amicus
Association of Califomia Water Agencies (ACV/A) points out, government water
suppliers in Califomi a are a diverse lot that includes municipal water districts, irrigation
districts, county water districts, and, in some cases, cities themselves. To focus on its
specific role in this case as a municipal water supplier - as distinct from its role as the
provider of municipal services u'hich consume water such as parks, city landscaping or
public golf courses - we will refer to appellant City of San Juan Capistrano as "City
Water."
In February 2011, City Water adopted a new water rate structure
recommended by a consulting firm. The way City Water calculated the new rate
structure is well described in City Water's supplemental brief of November 25,2014.s
4 Fo. r"ader convenience, we will occasionally refer in this opinion in shorthand to "suMivision
(bX1)," "subdivision (bX3)," "subdivision (b)(4)," and "subdivision (b)(5)," and sometimes even just to "(b)(1)"
*(bX3)," "(b)(4)" or'(bX5)." Each tirne those references refer to article XIII D, section 6, subdivision (b) of the
California Constitution. Also. all references to any "article" are to the Califomia C,onstifution.
5 W" requested supplernental briefing prior to oral argument to clariff the nature of the issues and
precisely what was in, and not in, the administrative record. We are indebted to able counsel on all sides for giving
us their best efforts to answer our questions.
4
City Water followed apattem generally recommended by a manual used by public water
agencies throughout the westem United States knovvn as the "M-1" manual. It first
ascertained its total costs, including things like debt service on previous infrastructural
improvements. It then identified components of its costs, such as the cost of billing and
the cost of water treatment. Next it identified classes of customers, differentiating, for
example, between "regular lot" residential customers and "large lot" residential
customers, and between construction customers and agricultural customers. Then, in
regard to each class, City Water calculated four possible budgets of water usage, based on
historical data of usage pattems: low, reasonable, excessive and very excessive.
The four budgets were then used as the basis for four distinct "tiers" of
pricing.6 For residential customers, tier l, the low budget, was assumed to be exclusively
indoor usage, based on V/orld Health Organization (WHO) guidelines conceming the
"minimum quantity of water required for survival," with adjustments for things like
"low-flush toilets and other high-efficiency appliances." Tier 2, the reasonable budget,
included an outdoor allocation based on "typical landscapes," and assumed "use of native
plants and drought-tolerant plants." The final two tiers were based on budgets of wtrat
City Water considers excessive usages of water or overuse volumes. Using these four
budgets of consumption levels, City Water allocated its total costs in such a way that the
anticipated revenues from all four tiers would equal its total costs, and thus the four-tier
system would be, taken as a whole, revenue neutral, and City Water would not make a
profit on its pricing structure. City Water did not try to calculate the incremental cost of
providing water at the level of use represented by each tier, and in fact, at oral argument
6 Suchratestructuresaresometimescalled"inclining"asinthepre-Proposition2lS case,Brydonv.
East Bay Mun. Utility Dist. (1994) 24 Cal.App.4th 178, 184 (Brydon). Amicus ACWA estimates that over half its
members now have some sort of tiered water rate system. As we will say numerous times in this opinion, tiered
water rate structures and Proposition 21 8 are thoroughly compatible "so long as" - and that phrase is drawn directly
from Palmdale - those rates reasonably reflect the cost of service attributable to each parcnl. (Palmdale, supra, 798
Cal.App.4th at p. 936.)
5
in this court, admitted it effectively used revenues from the top tiers to subsidize below-
cost rates for the bottom tier.
Here is the rate structure adopted, as applied to residential customers:
Tier
1
2
J
4
Usage
Up to 6 ccfT
7 to 17 ccF
18 to 34 ccfe
Over 34 ccflo
Price
52.47 per ccf
$3.29 per ccf
$4.94 per ccf
$9.05 per ccf
City Water obtains water from five separate sources: a municipal
groundwater recovery plant, the Metropolitan Water District, five local groundwater
wells, recycled water wells, and the nearby Moulton Niguel Water District. With the
exception of water obtained from the Metropolitan Water District, City Water admits in
its briefing that the record does not contain any breakdown as to the relative cost of each
source of supply.
The breakdown of cost from each of its various sources of water is, in
percentage terms:
Source
Groundwater Recovery Plant
Percent of Supply
51.95o/o
Cost to Supply
Not ascertained
7 C"f *tunds for one hundred cubic feet, which translates to 748 gallons. (See Brydon, supra,Z4
CalApp.4th at p. 184.)
8 4 precise figure for the usage is complicated by an attempt in the rate structure to distinguish
indoor and outdoor use. Technically,tier 2 is tier 1 * 3 extra ccfs, plus an outdoor allocation that is supposed to
average out to a total of 17 ccfs, i.e., I ccfs are allocated (on average) for outdoor use.
9 Technically, tier 3 is defined as up to 200 percent of tiers I and 2, which, given City Water's
projected 17 ccfaverage, works out to be 34 ccf.
10 While the consultants distinguished between regular and large lot residential customers, the final
structure made no distinction between the two.
6
Metropolitan Water Di stri ct
Local Wells
Recycled Wells
Moulton ñguel Water District
28.54o/o
7.79o/o
6.llYo
s.6r%
$1,007 per acre
footll
Not ascertained
Not ascertained
Not ascertained
Various percentages of City Water's overhead - or fixed costs in the record
- were allocated in percentages to some of the sources of water, so the price per tier
reflected apercentage of fixed costs and costs of some sources.
This chart reflects those allocations:
Tier Price Percentage Allocation
T $2.47 $1.78 to fixed costs, .62 to wells
2 53.29 $1.78 to fixed, 1.46 to wells
3 94.94 $1.53 to fixed, .69 to wells, .17 to the
Metropolitan \üater District, and 2.50 to the
groundwater recovery plant
4 $9.05 0 to fixed, 0 to wells, .53 to groundwater
recovery plant,2.53 to recycled,
3.32to the Metropolitan Water
District, and2.64 to Penalty Set Aside
There is no issue in this case as to the process of the adoption of the new
rates, such as whether they should have been voted on first under the article )([tr C part
I I In 2010, City Water was paying 5719 per acre foot for water from the Metropolitan Water Dstrict,
andthatcostwasprojectedtoincreaseincrementallyeachyearuntilitreached$1,007peracrefootby2014. One
acre foot equals 435.6 ccl
7
of Proposition 218. Forpurposes of this appeal it is enough to say City Water adopted
them.12
In August 2012, the Capistrano Taxpayers Association (CTA) filed this
action, challenging City Water's newrates as violative of Proposition 218, specifically
article XIII D, section 6, subdivision (b)(3)'s limit on fees to the "cost of service
attributable to the parcel." After a review of the administrative record and hearing, the
trial court found the rates weren't compliant with article )(Itr D, noting it "could not find
any specific financial cost data in the A/R to support the substantial rate increases" in the
progressively more expensive tiers. In particular the trial judge found a lack of support
for the inequality between the tiers.
The statement of decision also concluded that the imposition of charges for
recycling within the rate structure violated the "immediately available" provision in
article XIII D, section 6, subdivision (b)(a), because recycled water is not used by
residential parcels. (City V/ater concedes that when the recycling plant comes on line, it
will supply water to some, but not all, of its customers. Residences, for example, are not
typically plumbed to receive non-potable recycled water.) City Water has timely
appealed from the declaratory judgment, challenging both determinations.
III, DISCUSSION
A. Capital Costs and Proposition 218
We first review the constitutional text. Article XIII D, section 6,
subdivision (bX4) provides: "No fee or charge may be imposed for a service unless that
service is actually used by, or immediately available to, the owner of the property in
question. Fees or charges based on potential or fufure use of a service are not permitted.
12 With a minor qualification that, given our disposition, it need not be ¿ddressed in too much detail.
A minor issue in the briefing is whether City Water should luve made its consultants' report available for taxpayer
scrutiny prior to the public hearing contemplated in article XIII D, section 6, subdivision (c). Since City Water is
not able to show its price structure conelates with the actual cost ofproviding service at the various incremental
levels even with the consultants' report, we need not get bogged down in this issue.
I
Standby charges, r¡¡hether characterized as charges or assessments, shall be classified as
assessments and shall not be imposed without compliance with Section 4."
The trial court ruled City Water had violated this provision by "charging
certain ratepayers for recycled water that they do not actually use and that is not
immediately available to them." The trial judge specifically found, in his statement of
decision, that "City [Water] imposed a fee on all ratepayers for recycled water services
and delivery of recycled water services, despite the fact that not all ratepayers used
recycled water or have it immediately available to them or would ever be able to use it."
But the trial court assumed that providing recycled water is a fundamentally
different kind of service from providing traditional potable water. We think not. When
each kind of water is provided by a single local agency that provides water to different
kinds of users, some of whom can make use of recycled water (for example, cities
inigating park land) while others, such as private residences, can only make use of
traditional potable water, providing each kind of water is providing the same service.
Both are getting water that meets their needs. Non-potable water for some customers
frees up potable water for others. And since water service is already immediately
available to all customers of City Water, there is no contravention of subdivision (b)(a) in
including charges to construct and provide recycled water to some customers.
On this point, Griffith v. Pajaro Valley Water Management Agency (2013)
22A Cal.App.4th 586 (Griffith) is instructive. Griffith involved an augmentation fee on
parcels that had their own wells. An objection to the augmentation fee by the well
owners was that the fee included a charge for delivered water, even though some of the
properties were outside the area and not actually receiving delivered water. The Griffith
court said that even if some parcel owners weren't receiving delivered water, revenues
from the augmentation fee still benefited those parcels, since they funded "activities
required to prepare or implement the groundwater management program for the common
benefìt of all water users." (Id. af p. 602.) In Griffith the augmentation fee was thus
9
intended to fund aggressive capital investments to increase the general supply of water,
including some customers receiving delivered water when other customers didn't. It was
undeniable that by funding delivered water to some customers water wasfreed up for all
customers. (See Griffith, sttpra,220 Ca1,.App.4th at p. 602; accord, Paland v. Brooktrails
Township Community Services Dist. Bd. of Directors (2009) I79 Cal.App.4th 1358
[customer in rural area who periodically went inactive still had water immediately
available to himl.)
In the present case, there is a Govemment Code definition of water which
shows water to be part of a holistic distribution system that does not distinguish between
potable and non-potable water: "''Water' means any system of public improvements
intended to provide for the production, storage, supply, treatment, or distribution of water
from any source." (Gov. Code, $ 53750, subd. (m).)
A recycling plant, like other capital improvements to increase water supply,
obviously entails a longer time frame than a residential customer's normal one-month
billing cycle. As shown inMorganv. Imperial lwigation District (2014) 223
Cal.App.4th 892, the time frame for the calculation of the true cost of water can be, given
capital improvements, quite long. (See id. p.90A [costs amortized over a six-year
period].) And, as pointed out by amici Howard Jarvis Taxpayers Association, Water
Code section 53756 contemplates time frames for water rates that can be as much as five
years.13 There is no need, then, to conclude that rates to pay for a recycling plant have to
be figured on a month-to-month basis.
The upshot is that within a five-year period, a water agency might develop
a capital-intensive means of production of what is effectively new water, such as
13 Water Code section 53756 provides in relevant part:
'iAn agency providing water, wastewater, sewer, or refuse collection service may adopt a schedule
offees or charges authorizing automatic adjustments that pass through increases in wholesale charges for water,
sewage treatment, or wastewater treatlnent or adjustnents for inflation, if it complies with all of the following:
"(a) It adopts the schedule offees or charges for a property-r'elated service for a peiod not to
erceedfive yeals pursuant to Section 53755." Qtalics added.)
i0
recycling or desalinization, and p¿ßs on the costs of developing that new water to those
customers whose marginal or incremental extra usage requires such new water to be
produced. As amicus Mesa Water District points out, Water Code section 31020 gives
local water agencies power to do acts to "furnish sufficient water for any present or.future
beneficial use." (Wat. Code, $ 31020, italics added.) The trial court thus erred in
concluding the inclusion of charges to fund a recycling operation was, by itself, a
violation of subdivision (b)( ).
However, the record is insufficient to allow us to determine at this level
whether residential ratepayers who only use 6 ccf or less - what City Water considers the
super-conservers - are being required to pay for recycling facilities that would not be
necessary but for above-average consumption. Proposition 218 protects lower-than-
average users from having to pay rates that are above the cost of service for thembecause
those rates include capital investments their levels of consumption do not make
necessary. We note, in this regard, that in Palmdale, supra, one of the reasons the court
there found the tiered pricing structure to violate subdivision (bX3) was the perverse
effect of affirmatively penalizing conservation by some users. (See Palmdale, supra,198
Cal.App.4th atpp.937-938; see accord, Brydon, suprd, 24 Cal.App.4th atp. 202 ["To the
extent that certain customers over-utilize the resource, they contribute disproportionately
to the necessity for conservation, and the requirement that the District acquire new
sources for the supply of domestic water."].)
There is a case with an analogous lacun4 the Supreme Court case of
Cøliþrnia Farm Bureau Federation v. State l4later Resources Control Bd. (2011) 5I
Cal.4th 421 (Farm Bureau). In Farm Bureau, the record was also unclear as to the issue
of apportionment between a regulatory activity's fees and its costs. (Id. atp. a2S.)
Accordingly, the high court directed the matter to be remanded to the trial court for such
necessary findings.
11
That seems to us the appropriate way to complete the record in our case.
Following the example of Farm Bureau, we remand the matter for further findings on
u¡hether charges to develop City Water's nascent recycling operation have been
improperly allocated to users whose levels of consumption are so low that they cannot be
said to be responsible for the need for that recycling.
B. Tiered Pricing and Cost of Service
I. Basic Analysis
We begin, as we did with the capital cost issue, with the text of the
Constitution. In addition to subdivision (bX3), the main provision at issue in this case,
we also quote subdivision (bxl), because it throws light on subdivision (bX3)
Subdivision (b) describes "Requirements for Existing, New or Increased Fees and
Charges," and provides that, "A fee or charge shall not be extended, imposed, or
increased by any agency unless it meets all of the following requirements: ['ï] (1)
Revenues derived from the fee or charge shall not exceed thefunds required to provide
the property related service. tfll ttll (3) The amount of afee or charge imposed upon
any parcel or person as an incident of property ownership shall not exceed the
proportional cost of the sewice attribuîable to the parcel." (Italics added.)
In addition to these two substantive limits on fees, article XtrI D, section 6,
subdivision (bX5) puts an important procedural limit on a sourt's analysis in regard to the
burden of proof: "In any legal action contesting the validity of a fee or charge, the
burden shall be on the agency to demonstrate compliance with this article." The trial
court found City Water had failed to carry its burden of proof under subdivision (b)(5) of
showing its 2010 tiered water fees were proportional to the cost of service attributable to
each customer's parcel as required by subdivision (b)(3).
As respondent CTA quickly ascertained, the difference between Tier I and
Tier 2 is a tidy ll3 ertra, the difference between Tier 2 and 3 is a similarly exact ll2
extra, and the difference between Tier 3 and Tier 4 is precisely 5/6ths extra. This
t2
fractional precision suggested to us that City Water did not attempt to correlate its rates
with cost of service. Such mathematical tidiness is rare in multi-decimal point
calculations. This conclusion was confirmed at oral argument in this court, when City
Water acknowledged it had not tried to correlate the incremental cost of providing service
at the various incremental tier levels to the prices of water at those levels.
In voluminous briefrng by City'Water and its amici allies, two somer¡¡hat
overlapping core thoughts emerge: First, they contend that when it comes to water, local
agencies do not have to - or should not have to - calculate the cost of water service at
various incremental levels of usage because the task is simply too complex and thus not
required by our Constitution. The second core thought is that even if agencies are
required to calculate the actual costs of water service at various tiered levels of usage,
such a calculation is necessarily, as City Water's briefing contends, a legislative or quasi-
legislative, discretionary matter, largely insulated from judicial review We cannot agree
with either assertion.
The appropriate way of examining the text of Proposition 218 has already
been spelled out by the Supreme Court in Silicon Valley Taxpayers' Assn., Inc. v. Santa
Clara County Open Space Authority (2008) 44 Cal. th 431, 448 (Silicon Valley): "We
""must enforce the provisions of our Constitution and "may not lightly disregard or blink
at . . . a clear constifutional mandate.""" [Citation.] In so doing, we are obligated to
construe constitutional amendments in a manner that effectuates the voters' purpose in
adopting the law. [Citation.] [fl] Proposition 218 specifically states that '[t]he provisions
of this act shall be liberally construed to effectuate its purposes of limiting local
government revenue and enhancing taxpayer consent.' (Ballot Pamp., supra, text of
Prop. 218, $ 5, p. 109; Historical Notes, supra, at p. 85.) Also, as discussed above, the
ballot materials explained to the voters that Proposition 218 was designed to "constrain
local governments' ability to impose assessments; place extensive requirements on local
govemments charging assessments; shift the burden of demonstrating assessments'
T3
legality to local government; make it easierþr tØcpayers to win løwsuits; and limit the
methods by which local govetnments exact revenuefrom tdxpayers without their
consent." (Silicon Valley, supra,44 Cal4th atp.448, italics added.)
If the phrase "proportional cost of service attributable to the parcel" (italics
added) is to mean anything, it has to be that article XIII D, section 6, subdivision (b)(3)
assumes that there really ls an ascertainable cost of service that can be attributed to a
specific - hence that little word "the" - parcel. Otherwise, the cost of service language
would be meaningless. Why use the phrase "cost of service to the parcel" if a local
agency doesn't actually have to ascertain a cost of service to that particular parcel?
The presence of subdivision (b)(1) of section 6, article XItr D, just a few
lines above subdivision (bX3), confirms our conclusion. Constitutional provisions,
particularly when enacted in the same measure, should be construed together and read as
a uihole. (Bighom, supra, 39 Cal.4th atp.228.) The "proportional cost of service"
language from subdivision (b)(3) is part of a general subdivision (b), and there is an
additional reference to costs in subdivision (b)(1). Subdivision (bxl) provides that the
total revenue from fees "shall not exceed the funds required to provide the properly
related service." (Italics added.)
It seems to us that to comply with the Constitution, City Water had to do
more than merely balance its total costs of service with its total revenues - that's already
covered in subdivision (b)(l). To comply with subdivision (b)(3), City Water also had to
correlate its tiered prices with the actual cost of providing water at those tiered levels.
Since City Water didn't try to calculate the actual costs of service for the various tiers,
the trial court's ruling on tiered pricing must be upheld simply on the basis of the
constitutional text.
V/e find precedent for our conclusion in the Palmdale case. There, a water
district obtained its water from two basic sources: 60 percent from a reservoir and the
state water project, and the 40 percent balance from the district's own area groundwater
I4
wells. Most (about 72 percent) of the water went to single family residences, with
irrigation users accounting for 5 percent of the distribution . (Palmdale, supra,198
Cal.App.4th atp.928.) For the previous five years, the district had spent considerable
money to upgrade its water treatment plant ($56 million) but revenues suffered from a
"decline in water sales," so its reserves were depleted. The district wanted to issue more
debt for "future capital projects." (Id. atpp. 928-929.) Relying on consultants, the water
district adopted anew five-tiered rate structure, r¡¡hich progtessively increased rates (for
the top four tiers) for three basic categories of customers: residences, businesses, and
irrigation projects. The tiered budgets for inigation users were more stringent than for
residential and commercial customers. (Id. at p. 930.) The way the tiers operated, all
three classes of customers got a tier I budget, but irrigation customers had less leeway to
increase usage without progressing to another tier. Thus, for example, the tier 2 rates for
residential customers did not kick in until 125 percent of the budget, but tier 2 rates for
irrigation customers kicked in at I l0 percent of the budget. The tiered rate structure was
itself based on a monthly allocated water budget. (Ibid.)
Two irigation users - the city itself and its redevelopment agency - sought
to invalidate the new rates. The trial court had the advantage of the newly-decided
Supreme Court opinion in Silicon Valley, which had clarified the standard of review for
Proposition 218 cases. There, the high court made it clear that in Proposition 218
challenges to agency action, the agency had to bear the burden of proof of demonstrating
compliance with Proposition 218, and both trial and reviewing courts are to apply an
independent review standard not the traditional, deferential standards usually applicable
in challenges to govemmental action. (Silicon Valley, supra,44 Calfith at p. 448.) More
directly, sud Silicon Valley, it is not enough that the agency have substantial evidence to
support its action. That substantial evidence must itself be able to withstand independent
review. (See ld atpp. 441,448-449 [explaining why substantial evidence to support the
15
agency action standard was too deferential in light of Proposition 218's liberal
construction in favor of taxpayer feature].)
With this in mind, the Palmdale court held the district had failed to carry its
burden of showing compliance with Proposition 2I8. (Palmdale, supra,198
Cal.App. th atpp.937-938.) The core of the Palmdale court's reasoning was twofold.
First, there was discrimination against irrigation-only customers, giving an unfair price
advantage to those customers in other classes who were inclined to inefficientþ use - or,
for that matter, waste - outdoor water. (The opinion noted the perfect exemplar of water
waste: hosing off a parking lot.) Thus an irrigation user, such as a city providing playing
fields, playgrounds and parks, was disproportionately impacted by the inequality in
classes of users. (Palmdale, supra,198 Cal.App.4thatp.937.) Second, the
discrimination was gratuitous. The district's own consultants had proposed a "cost of
service" option that they considered Proposition 218 compliant, but the district did not
choose it because it preferred a "fixed" option providing better "'tate stability. "' In fact
the choice had the perverse effect of entailing a"'weaker signal for water conservation"'
for "'small customers who consewe water."' (Palmdale, suprq,l98 Cal.App. th atpp.
937 -939, italics added.) t+
We recognize that Palmdale was primarily focused on inequality between
classes of users, as distinct from classes of water rate tiers. But, just asinPalmdale
lr¡here the district never attempted to justi$z the inequality "in the cost of providing
water" to its various classes of customers at each tiered level (Palmdale, supra, 198
Cal.App.4th atp.937), so City Water has never attempted to justifu its price points as
based on costs of service þr those tiers. Rather, City Water merely used what it thought
was its legislative, discretionary power to attribute percentages of total costs to the
various tiers. While an interesting conversation might be had about u¡hether this was
14 As described by the court, the fixed cost option was really a'fixed variable" option, with lixed
clrarges being 60 percent of total costs, the balance being variable. (Palmdale, supra,198 Cal.App.4th at p.929.)
16
reasonable or wise, we can find no room for arguing its constitutionality. It does not
comply with the mandate of the voters as we understand it.
2. City Water's Arguments
a. Article X, section 2
In supplemental briefing prior to oral argument, this court pitched a batting
practice fastball question to City Water, intended to give the agency its best chance of
showing that the prices for its various usage tiers, particularly the higher tiers (e.g., $4.94
for all usage over 17 ccf to 34 ccf, and $9.04 for usage over 34 ccf) comesponded with its
actual costs of delivering water in those increments. We were hoping that, maybe, we
had missed something in the record that would demonstrate the actual cost of delivering
water for usage over 34 ccf per month really is $9.04 per ccf, and City Water would hit
our question into the upper deck.
What we got back w¿N a rejection of the very idea behind the question. As
would later be confirmed at oral argument, City Water's answer was that there does not
have to be a correlation between tiered water prices and the cost of service. Its position is
that the "cost-of-service principle of Proposition 218" must be "balance[d]" against "the
conservation mandate of article X, section 2." In short, City Water justifies the lack of a
correlation between the marginal amounts of water usage represented by its various tiers
and the actual cost of supplying that water by saying the lack of correlation is excused by
the subsidy for low usage represented by tier 1, on the theory that subsidi zedtier 1 rates
are somehow required by Article X, section 2. While we agree that low-cost water rates
do not, in and of themselves, offend subdivision (bX3) (seeMorgan, supra,223
Cal.App.4th at p. 899), we cannot adopt City Water's constitutional extrapolation of that
point.
17
We quote the complete text of article X, section 2 in the margin.15 Article
X, section 2 was enacted in 1928 in reaction to a specific Supreme Court case decided
two years earlier, Hetminghaus v. South. Caliþrnia Edison Co. (1926) 200 Cal. 81
(Herminghaas). The Herminghaas decision, as Justice Shenk wrote in his dissent there,
allowed dor,¡vnstream riparian land owners - basically farmers owning land adjacent to a
river - to claim 99 percent of the flow of the San Joaquin River even though they were
actually using less than I percent of that flow.16 To compound that anomaly, the
downstream riparian land owners' claims came at the expense of the efforts of an electric
utility company to generate electricity for general, beneficial use by building reservoirs at
various points upstream on the river. (See id. atp. 109.) In the process of upholding the
downstream landowners' "ripalian rights" over the rights of the electric company to use
the water to make electricity, the Herminghaus majority invalidated legislation aimed at
preserving water in the state for a reasonable beneficial use, thereby countenancing what
Justice Shenk perceived to be a plain waste of good water. (Herminghaus, supra,20A
Cd,. atp. 123 (dis. opn. of Shenk, J.).) As our Supreme Court would describe
Herminghaas about half a century later: "we held not only that riparian rights took
priority over appropriations authorized by the Water Board, a point r,vhich had always
15 '1t is hereby declared that because ofthe conditions prevailing in this State the general welfare
requires that the water resourpes ofthe State be put to beneficial use to the fullest extent ofwhich they are capable,
and that the wasto or unreasonable use or unreasonable method ofuse ofwater be prevented, and that the
conservation of such waters is to be exercised with a view to the reasonable and benehcial use thereof in the interest
ofthe people and for the public welfare. The right to water or to the use ot flow ofwater in or from any natural
stream or water course in this State is and shall be limited to such water as shall be reasonably required for the
beneficial use to be served, and such right does not and shall not extend to the waste or unreasonable use or
unreasonable rnethod ofuse or unreasonable method ofdiversion ofwater. Riparian rights in a stream or water
cornse attach to, but to no more than so much of the flow thereof as may be required or used consistently with this
section, for the purposes for which such lands are, or may be made adaptable, in view of such reasonable and
beneficial uses; provided, however, that nothing herein contained shall be construed as depriving any riparian owner
of the reasonable use of water of the strearn to which the owner's land is riparian under reason¿ble mcthods of
diversion and use" or as depriving any appropriator ofwater to which the appropriator is lat{ully entitled. This
section shall be self-executing, and the Legislature may also enact laws in the furtherance ofthe policy in this
section contained."
16 '1n order to have the beneficial use ofless than one per cent ofthe maximum flow ofthe San
Joaquin River on their riparian lands the plaintiffs are contending for the right to use the balance in such a way that,
so fàr as they are concerned, over ninety-nine per cent ofthat flow is wasted. This is a highly unreasonable use or
method of the use of water." (Hermingþaus, supra,200 Cal. at p. 123 (dis. opn. of Shenk, J.).)
18
been clear, but that as between the riparian and the appropriator, the former's use of
water was not limited by the doctrine of reasonable use." (National Audubon Society v.
Superior Court (1983) 33 Cal.3d 4I9, 442 (Audubon-Mono løke).)
The voters overturned Herminghaus in the 1928 election by adopting article
X, section 2,then denoted article XfV, section 3. (See Gin S. Chow v. City of Santa
Barbara (1933) 217 CaL. 673,699 (Gin Chow).) In the 1976 Constitutional revision, old
article XfV, section 3, was recodified verbatim as article X, section 2. (See CÍay, "In
Search of Bigfoot": The Common Løw Origins of Article X, Section 2 of the Califurnia
Constitution (1989) 17 Hastings Const. L. Q.225 (hereinafter "Origins of Article X,
Section 2"¡.17
The purpose of article X, section 2 was described inGin Chow,the first
case to reach the Supreme Court in the wake of the adoption of what is now article X,
section 2, in 1928. Justice Shenk, having been vindicated by the voters on the point of a
perceived need to prevent the waste of water by letting it flow to the sea, suÍtmarized the
new amendment in terms emphasizing beneficial use: "The purpose of the amendment
was stated to be 'to prevent the waste of waters of the state resulting from an
interpretation of our law which permits them to flow unused, unrestrained and
undiminished to the sea', and is an effort 'on the part of the state, in the interest of the
people of the state, to conserve our waters' without interference with the beneficial uses
to which such waters may be put by the owners of water rights, including riparian
owners. That such purpose is reflected in the language of the amendment is beyond
question. Its language is plain and unambiguous. In the main it is an endeavor on the
part of the people of the state, through its fundamental law, to conserve a great natural
resource, and thereby render available for beneficial use that portion of the waters of our
rivers and streams which, under the old riparian doctrine, was of no substantial benefit to
17 Professor Gray's article is an exceptionally valuable source on the origins ofarticle X, section 2.
19
the riparian owner and the conservaúon of r¡¡hich will result in no material injury to his
riparian right, and without which conservation such waters would be wasted and forever
losf ." (Gin Chow, supra,2I7 Cal,. at p. 700.)
The emphasis in the actual language of article X, section 2 is thus on a
policy that favors the beneficial use of water as against the waste of water for non-
beneficial uses. That is what one would expect, consistent with both Justice Shenk's
dissent in Herminghaus andhis majority opinion in Gin Chow. (See Gray, supra,
Origtns of Article X, Section 2,17 Hastings Const. L. Q. at p.263 [noting emphasis in
text on beneficial use].) The word "conservation" is used in the introductory sentence of
the provision in the context of promoting beneficial uses: "the conservation of such
waters is to be exercised w ith a view to the reasonable and beneficial use thereof in the
interest of the people and for the public welfare." (Gray, suprq, Origins v. Article X,
Section 2,p. 225, italics added.)
But nothing in article X, section 2, requires water rates to exceed the true
cost of supplying that water, and in fact pricing water at its true cost is compatible with
the article's theme of conservation with a view toward reasonable and beneficial use.
(See Palmdale, suprø,198 Cal.App.4th atpp.936-937 freconciling article X, section 2
with Proposition 2181; accord, Brydon, supra, 24 Cal.App. th atp. 197 [noting that
incremental rate structures create an incentive to reduce water use].) Thus it is hard for
us to see how article X, section 2, cart be read to trump subdivision (bX3) We would
note here that in times of drought - which looks increasingly like the foreseeable future -
providing water can become very pricey indeed.18 And, we emphasize, there is nothing
at all in subdivision (bX3) or elsewhere in Proposition 218 that prevents water agencies
18 It was recently noted that Santa Barbara is dusting offa desalinization plant built in the 1990's to
provide additional water for the city in the current drought. (See Covarrubias, Santa Barbara ll/orking to Reactive
Mothballed Desalinization Plant (March3,2015,L.A. Tirnes < http://www.latimes.com/local/califomialla-me-
santa-barbara-desal-20150303-story.html> (as ofMarch 30,2015) [noting, arnong other things, that desalination can
be expensivel.)
20
from passing on the incrementally higher costs of expensive water to incrementally
higher users. That would seem like a good idea. But subdivision (bX3) does require they
fïgure out the true cost of water, not simply draw lines based on water budgets. Thus in
Palmdale, the appellate court perceived no conflict between Proposition 218 and article
X, section 2, so long as article X, section 2 is not read to allow water rates that exceed the
cost of service. Said Palmdale: "Califomia Constitution, article X, section 2 is not at
odds with Article XItr D so long as, þr example, consewation is attained in a manner
that 'shall not exceed the proportional cost of the service attributable to the parcel.'
(Art. )ilID, $ 6, subd. (b)(3).) (Palmdale, supra,198 Cal.App.4thatpp.936-937,
italics added.) And as its history, and the demonstrated concem of the voters in 1928
demonstrates, article X, section 2 certainly does not require above-cost water rates.
In fact, if push came to shove and article X, section 2, really were in
ireconcilable conflict with article XIII D, section 6, subdivision (b)(3), we might have to
read article XIII D, section 6, subdivision (b)(3) to have carved out an Øcception to article
X, section 2, since Proposition 218 is both more recent, and more specific. (Greene v.
Marin County Flood Control & Water Conservation Dist. (2010) 49 CaL th 277 ,290
["As a means of avoiding conflict, a recent, specific provision is deemed to carve out an
exception to and thereby limit an older, general provision."); Izazaga v. Superior Court
(1991) 54 Cal.3 d 3 s6, 37 I [same].)
Fortunately, that problem has not arisen. We perceive article X, section 2
and article XIIID, section 6, subdivision (b)(3) to work together to promote increased
supplies of water - after all, the main reason article X, section 2 was enacted in the first
place was to ensure lhe capture and beneficial use, of water and prevent its wasteful
draining into the ocean. As a pre-Proposition 218 case, Brydon, supra, 24
Cal.App.4th 178 observed, one of the benefits of tiered rates is thatitis reasonable to
¿ìssume people will not waste water as its price goes up. (See ld. atp.197 [noting that
incremental rate structures create an incentive to reduce water use].) Our courts have
2t
made it clear they interpret the Constitution to allow tiered pricing, but the voters have
made it clear they want it done in a particular way.
b. Brydon and Griffith
We believe the precedent most on point is Palmdale, and we read Palmdale
to support the trial court's conclusion City V/ater did not comply with the subdivision
(bX3) requirement that rates be proportional to cost of service. The two cases City Water
relies on primarily for its opposite conclusion, Brydon and Griffith, do not support a
different result.
Brydon was a pre-Proposition 218 case upholding a tiered water rate
structure as against challenges based on 1978's Proposition 13, rational basis, and equal
protection challenges. Similar to the case at hand, the water district promulgated an
"inclining block rate structure." (Brydon, supra, 24 CaJ,.App. th at p. 182; see p. 184
[details of four-tier stnrcture].) Proposition 218 had not yet been enacted, so the
opponents of the block rate structure did not have the "proportional cost of the service
attributable to the parcel" language in subdivision (b)(3) to use to challenge the rate
structure. They relied, rather, on the theory that Proposition 13 made the rate structure a
"special tax," requiring a vote. As a backup they made traditional rational basis and
equal protection arguments. They claimed the rate structure was "arbitrary, capricious
and not rationally related to any legitimate or administrative objective" and, further, that
the structure unreasonably discriminated against customers in the hotter areas of the
district. {Brydon, supra, atp. 182.) TheBrydon courtrejectedboththeProposition 13
and rational basis/equal protection arguments.
But Brydon - though it might still be read as evidence that tiered pricing
not otherwise connected to cost of service would survive a rational basis or equal
protection challenge - simply has no application to post-Proposition 218 cases. In fact,
the construction of Proposition l3 applied by Brydon was based on cases Proposition 218
22
was designed to overtum.19 The best example of such reliance was Brydon 's declination
to followBeaumont Investors v. Beaumont-Cherry Valley Water Dist. (1985) 165
Cal.App.3d 227 (Beaumont) on the issue of the burden of proof. Beaumont had held it
was the agency that had the burden of proof to show compliance with Proposition 13.
Brydon, however, said the burden was on the taxpayers to show lack of compliance. In
coming to its conclusion, Brydon invokedKnox v. City of Orlønd (1992) 4 Cal. th 132.
Knox, sald Brydon, had "cast substantial doubt" on the "propriety of shifting the burden
of proof to the agency." (Brydon, supra,Z4 CalApp. th atp. 191.) But, more than a
decade later, our Supreme Court in Silicon Valley recognized that Knox itself was one of
the targets of Proposition 218. (See Silicon Valley, supra,44 Cal. th atp. 445.2a) In the
wake ofKzox's fate (see in particular subdivision (bX5) [changing burden of proof]), it
seems safe to say that Brydo¡r itself was part of the general case law which the enactors of
Proposition 218 wanted replaced with stricter controls on local government discretion.
As the Silicon Valley court observed, Proposition 218 effected a paradigm
shift. Proposition 218 was passed by the voters in order to curtail discretionary models
of local agency fee determination. (See Silicon Valley, supra,44 Cal. th atp. 446f"As
further evidence that the voters sought to curtail local agency discretion in raising funds
19 Two examples ofearly, post-Proposition 13 cases that took a strict constructionist view ofthe
provision are Los Angeles County Transportation Com. v. Richmond(1982)31 Cal.3d 197 (Los Angeles Countyv.
RichmonQ [strictly construing Proposition 13's voting requirements to avoid finding a transportation commission
was a "special district"]; City and County of San Francisco v. Farrell (1982)32 Cal3d 47, 54 [strictly construing
words "special tax" used in section 4 ofProposition 13 as ambiguous to avoid finding municipal payroll and gross
receipts tax was a "special tax'}.) Brydon expressly relied onLos Angeles County v. Richmond. (See Brydon,
supra,24 Cal.App.4th at p. 190.) Proposition 218 effectively reversed these cases with a liberal construction
provision. (See Silicon Valley, supra,44 Cal. th at p. 448.)
20 Here is the relevant passage ftomsilicon Valley: "Asthe dissent below points out, a provision in
Proposition2lSshiflingtheburdenofdemonstrationwasincludedinreactiontoouropinioninKnox. Thedrafters
of Proposition 218 were clearly aware of Knox and the deferential standard it applied based on Dawsonfv. Town of
Los Altos Hills (1976)1 76 Cal3d 676;'
23
. . . ."f.)21 Allocation of water rates might indeed have been a purely discretionary,
legislative task when Brydon was decided, but not after passage of Proposition 218.
The other key case in which City Water's analysis of this point is Grifrtth.
There, the fee itself varied according to the location of the property, e.g., whether the
parcels with wells were coastal and metered, non-coastal and metered, or residential and
non-metered. Objectors to the fee asserted certain tiers in the fee, bøsed on the
geographic dffirences in the parcels coveredby the fee, were not proportional to the
cost they were paying. One objector in particular complained the fee was improperly
established by working backwards from the overall amount of the project, subtracting
other revenues, the balance being the augmentation charge, which was then apportioned
among the users. (Grifrtth, suprq, 220 Cal.App. th at p. 600.) This objector argued that
the proportional cost of service had to be calculated prior to setting the rate for the
charge.
The court noted the M-l industry manual recommends such a work-
backwards-from-total-cost methodology in setting rates, and held that the objectors did
not attempt to explain why such an approach "offends Proposition 218 proportionality."
(Grifrtth, suprd,220 Cal.App.4th at p. 600.) The best the objectors could do was to point
to what Silicon Valley had said about assessments, namely, agencies cannot start with
"'an amount taxpayers are likely to pay"' and then determine their annual spending
budget from that. (Ibid., quoting Silicon Valley, supra,44 Cal.4th at p. 457.) The
2l Here and there in City Water's briefìng there a¡e references to a discretionary, legislative power in
regard to local rnunicipal water agencies conferrcd by article )O, section 9, which was a 1970 arnendment to the
Constitution, though one can trace it back to the Constitution of 1879. Basically, article Xl, section 9, gives cities
the right to go into the water supply business. We quote its text, unamended since 1970: "(a) A municipal
corporation may establish, purchase, and oporate public works to furnish its inhabitants with light, water, power,
heat, transportation, or means of communication. It may furnish those services outside its boundaries, except within
another municipal corporation which furnishes the same service and does not consent. ['l[ @) Persons or
co¡porafions may establish and operate works for supplying those services upon conditions and under regulations
that the citv rnay prescribe under its organic law."
Article )il, section 9 obviously does not require rnunicipal corporations to establish fees in excess
oftheir costs, so therc is no incompatibility between it and the later enacted Proposition 218.
24
Griffith court distinguished the language from Silicon Valley, however, by saying the case
before it did not entail any what-the-market-will-bear methodology. (Griffith, supra,220
Cal.App.4th at p. 600.)
The objectors had also relied on Palmdal¿ for the proposition that
"Proposition 218 proportionality compels a parcel-by-parcel proportionality analysis."
(Grffith, sltpra,220 Cal.App. fh at p. 601.) The Grifith court rejected that point by
stating "[A]pportionment is not a determination that lends itself to precise calculation,"
for which it cited a pre-Proposition 13, pre-Proposition 218 case, White v. County of San
Diego (1980) 26 CaL.3d 897, 903, without any explanation. (Grffith, supra,22A
Cal.App.4th at p. 601.)
When read in context, Grifrth does not excuse water agencies from
ascertaining the true costs of supplying water to various úers of usage. Its comments on
proportionality necessarily relate only to variations in property location, such as u¡hat
side of a water basin aparcel might fall into. That explains its citationto l(hite, which
itself was not only pre-Proposition 218, but pre-Proposition 13. Moreover, while the
Grifrtth court may have noted that the M-l manual generally recommends a work-
backwards approach, we certainly do not readGriffith for the proposition that a mere
manual used by utilities throughout the Westem United States can tnrmp the plain
language of the California state Constitution. The M-1 manual might show working
backwards is reasonable, but it cannot excuse utilities from ascertaining cost of service
now that the voters and the Constitution have chosen cost of service.
To the extent GrifrÊth does apply to this case, which is on the (b)(4) issue,
we find it helpful and have followed it. But trying to apply it to the (bxl) and (b)(3)
issues is fatally flawed.
c. Penalty Rates
A final justification City Water gives for not tying tier prices to cost of
service is to say it doesn't make any difference because the higher tiers can be justified as
25
penalties not within the purview of Proposition 218 at all. (In the context of article X,
section 2, Cily Water euphemistically refers to its higher tiered rates as conservation rates
as if such a designation would bring them within article X, section 2 and exempt them
from subdivision (b)(3), but as we have explained, article X, section 2, does not require
'¡ihat article XIII D, section 6, subdivision (b)(3) forbids) and designating something a
"conservation rate" is no more determinative than calling it an "apple pie" or
"motherhood" rate.
City Water's theory of penalty rates relies on the procedural first part of
Proposition 218, specifically article )iltr C, section 1, subdivision (e)(5). This part of
Proposition 218 defines the word "tax" to exclude fïnes "imposed by" a local govemment
"as a result of a violation of law."Ð That is hardly a revelation, of course. lVe may take
as a given that Proposition 218 was never meant to apply to parking tickets.
But City Water's penalty rate theory is inconsistent with the Constitution.
It would open up a loophole in article XIII D, section 6, subdivision (b)(3) so large it
would virtually repeal it. Atl an agency supplying any sewice would need to do to
circumvent article )iltr D, section 6, subdivision (b)(3), would be to establish a low legal
base use for that service, pass an ordinance to the effect that any usage above the base
amount is illegal, and then decree that the penalty for such illegal usage equals the
incrementally increased rate for that service. Such a methodology could easily yield rates
that have no relation at all to the actual cost of providing the service at the penalty levels.
And it would make a mockery of the Constitution.
IV. CONCLUSION
All of which leads us to the conclusion City Water's pricing violates the
constitutional requirement that fees "not exceed the proportional cost of the service
22 The relevanttexl from article )ClI C, section l, subdivision (eX5) is:
'(e) As used in this article, "tax" rneans any levy, charge, or exaction ofany kind intposed by a
local govemtnent, except the following: t'lll t'lll (5) A fìne, penalty, or other monetary charge irnposed by the
judicial branch of govemment or a local government, as a result of a violation of law."
26
attributable to the parcel." This is not to say City Water must calculate arate for 225 Elm
Street and then calculate another for the house across the street at226. Neither the
voters nor the Constitution say anything we can find that would prohibit tiered pricing.
But the tiers must be based on usage, not budgets. City Water's Article X,
section 2 position kept it from explaining to us why it cannot anchor rates to usage.
Nothing in our record tells us uzhy, for example, they could not figure out the costs of
given usage levels that require City Water to tap more expensive supplies, and then bill
users in those tiers accordingly. Such computations would seem to satisfu Proposition
218, and City Water has not shown in this record it would be impossible to comply with
the Constitutional mandate in this way or some other. As the court pointed out in
HowardJarvis TaxpayersAss'nv. Cityof Fresno (2005) 127 Cal/rpp. fh9l4,923,the
calculations required by Proposition 218 may be "complex," but "such a process is now
required by the Califomia Constitution."
Water rate fees to fund the costs of capital-intensive operations to produce
more or new water, such as the recycling plant at issue in this case, do not contravene
article XIII, section 6, subdivision (b)(a) of the Constitution. While that provision
precludes fees for a service not immediately available, both recycled water and traditional
potable water are part of the same service - water service. And water service most
assuredly is immediately available to City Water's customers now.
But, because the record is unclear whether low usage customers might be
paying for a recycling operation made necessary only because of high usage customers,
we must reverse the trial court's judgment that the rates here are necessarily inconsistent
with subdivision (b)(4), and remand the matter for further proceedings with a view to
ascertaining the portion of the cost of funding the recycling operation attributable to those
customers whose additional, incremental usage requires its development.
By the same token, we see nothing in article XIII, section 6, subdivision
(bX3) of the Califomia Constitution that is incompatible with water agencies passing on
27
the true, marginal cost of water to those consumers whose extra use of water forces water
agencies to incur higher costs to supply that extra water. Precedent and common sense
both support such an approach. However, we do hold that above-cost-of-service pricing
for tiers of water service is not allowed by Proposition 218 and in this case, City Water
did not carry its burden of proving its higher tiers reflected its costs of service. In fact it
has practically admitted those tiers don't reflect cost of service, as shown by their tidy
percentage increments and City Water's refusal to defend the calculations. And so, on
the subdivision (b)(3) issue, we affirm the trial court's judgment.
Given the procedural posture the case now finds itself in, the issue of who
is the prevailing party is premature. That question should be first dealt with by the trial
court only after all proceedings as to City Water's rate structure are final. Accordingly,
we do not make an appellate cost order now, but reserve that matter for future
adjudication in the trial court. (See Neufeld v. Balboa Ins. Co. (2000) 84 Cal.App.4th
759,766 [deferring question of appellate costs in case being remanded until litigation w¿ß
finall.)
BEDSWORTH, ACTING P. J
WE CONCUR:
MOORE, J
THOMPSON, J
28