HomeMy WebLinkAboutAgenda Report - December 18, 2013 G-02 PHAGENDA ITEM G'OOL
CITY OF LODI
COUNCIL COMMUNICATION
• TM
AGENDA TITLE: Public Hearing 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
MEETING DATE: December 18, 2013
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Public hearing 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.
BACKGROUND INFORMATION: The City Council has made numerous water rate decisions over the
past few years. The recommended action is to approve a rate
increase of 2.5 percent effective January 1, 2014, as
presented in Exhibit A. The ENR -based adjustment for the period October 2012 through October 2013 is
3.3 percent. A summary for the past five years of the CPI -based and ENR -based adjustments and the
implemented adjustments is provided in Exhibit B. The purpose of this table is to demonstrate past rate
increases have frequently been below the programmed adjustments.
On May 20, 2009, Council waived the Consumer Price Index (CPI) adjustment of water rates based upon
a lack of new information supporting neither an increase nor a decrease. On January 6, 2010, Council
received advisory usage -based water rates for the purpose of research and customer billing
comparisons. On July 21, 2010, Council approved a change to the date for implementing the annual rate
adjustment to January 1 for each of the five years (maximum timeframe allowed by Proposition 218)
following January 1, 2011. This change was recommended so that rate changes occur at the lowest
usage time of the year. Council also changed the water rate adjustment index from the CPI to the
Engineering News Record (ENR), effective January 1, 2012, because this index better reflects the
combined inflationary effects of personnel, materials and energy costs on the total operations of the
utility, as was done for the Wastewater Rates on July 15, 2010.
Council approved a professional services agreement with The Reed Group on August 6, 2008, for the
preparation of a water utility financial model. Staff continues to update and use this model to forecast the
performance of the utility through FY 2018/19 while incorporating substantial capital investments, including
the water meter program, infrastructure replacement program, property owner meter payments and
PCE/TCE remediation costs. The recommended rates presented in Exhibit A were developed using this tool.
It is staff's recommendation that the water rate increase be 2.5 percent. For a resident still on the flat rate,
the monthly charge for a three-bedroom home will increase from $43.04 to $44.12 or $1.08. A metered
resident using 1,500 cubic feet of water per month will see an increase from $39.88 to $40.82 or $0.94.
FISCAL IMPACT: Increased revenues to the water utility are required to keep up with cost of
service increases and new mandated costs.
FUNDING AVAILABLE: Not applicable.
D�
F. Wally Undelin
Public Works Director
Attachments
cc: Steve Mann, Information Systems Manager
Larry Partin, Deputy Public Works Director— Utilities
`Ko`hr9dt Bartlam, City Manager
K:\WP\UTILITY RATES\W WW\2014 W -WW Rate Increase\CCPH WaterRates.doc
12/3/2013
Exhibit A
City of Lodi -- Water Utility
current and Proposed water Rates
Current
Jan. 2014
Flat Rates ($/month)
Percent Increase
2.5%
Single Family Residential Unit ($/month)
1 Bedroom
$
29.90
$
30.65
2 Bedroom
$
35.91
$
36.81
3 Bedroom
$
43.04
$
44.12
4 Bedroom
$
51.72
$
53.01
5 Bedroom
$
62.03
$
63.58
6 Bedroom
$
74.44
$
76.30
7 Bedroom
$
89.31
$
91.54
Multi -Family Residential Unit ($/month)
1 Bedroom
$
25.67
$
26.31
2 Bedroom
$
30.79
$
31.56
3 Bedroom
$
36.94
$
37.86
Metered Water Rates
Service Charge ($/month)
Single Family Residential
Up to 3/4" Meter
$
23.78
$
24.37
1" Meter
$
38.60
$
39.57
1 1/2" Meter
$
75.42
$
77.31
2" Meter
$
119.79
$
122.78
Multi -Family and Non -Residential
5/8" Meter
$
23.78
$
24.37
3/4" Meter
$
23.78
$
24.37
1" Meter
$
38.60
$
39.57
1 1/2" Meter
$
60.24
$
61.75
2" Meter
$
75.27
$
77.15
3" Meter
$
105.38
$
108.01
4" Meter
$
135.51
$
138.90
6" Meter
$
195.68
$
200.57
8" Meter
$
255.91
$
262.31
10" Meter
$
316.10
$
324.00
Water Usage Rates ($/CCF)
Single Family Residential
Tier 1 - 0 to 10 CCF/month
$
0.92
$
0.94
Tier 2 - 11 to 50 CCF/month
$
1.38
$
1.41
Tier 3 - Over 50 CCF/month
$
1.82
$
1.87
Multi -Family and Non -Residential
All Water Usage
$
0.92
$
0.94
Exhibit B
Programmed and Implemented Rate Adjustments
Water
Year
Programmed
Implemented
2009
3.10M
0
2010
0.73M
0
2011
5.98 (2)
2
2012
2.53 (3)
2.2
2013
2.50 (3)
2.5
2014
3.30 (3)
2.5
(1) Consumer Price Index change
(2) Consumer Price Index change (December 2008 through December 2010)
(3) Engineering News Record Index change
K:\WP\UTILITY RATES\W_WW\2014 W -WW Rate Increase\Exhibit B.xlsx
RESOLUTION NO. 2013-225
A RESOLUTION OF THE LODI CITY COUNCIL
SETTING PRE -APPROVED ENGINEERING NEWS
RECORD ADJUSTMENT INDEX FOR USAGE -BASED
AND FLAT RATE MONTHLY WATER RATES
WHEREAS, Resolution No. 2010-123 approved annual water rate increases in
an amount not to exceed the percentage change in the Engineering News Record (ENR)
Twenty Cities Annual Average Index beginning January 2012 through January 2016. A
Proposition 218 procedure was conducted that validated this action; and
WHEREAS, staff has regularly updated the Water Utility Financial Plan with the
assistance of the The Reed Consulting Group, Inc., of Sacramento; and
WHEREAS, the current water rate adjustment reflects a 2.5 percent increase.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
set pre -approved Engineering News Record adjustment index for usage -based and flat
rate monthly water rates as outlined on Exhibit A attached with the effective date of the
increase to be January 1, 2014.
Dated: December 18, 2013
-------------------------------------------------------------------
-------------------------------------------------------------------
I hereby certify that Resolution No. 2013-225 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held December 18, 2013, by the
following vote:
AYES: COUNCIL MEMBERS — Hansen, Johnson, Mounce, and
Mayor Katzakian
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Nakanishi
ABSTAIN: COUNCIL MEMBERS — None
NDI J L-OLSON
1ty erk
2013-225
Exhibit A
City of Lodi -- Water Utility
current ana vroposea water Kates
Current
Jan. 2014
Flat Rates ($/month)
Percent Increase
2.5%
Single Family Residential Unit ($/month)
1 Bedroom
$
29.90
$
30.65
2 Bedroom
$
35.91
$
36.81
3 Bedroom
$
43.04
$
44.12
4 Bedroom
$
51.72
$
53.01
5 Bedroom
$
62.03
$
63.58
6 Bedroom
$
74.44
$
76.30
7 Bedroom
$
89.31
$
91.54
Multi -Family Residential Unit ($/month)
1 Bedroom
$
25.67
$
26.31
2 Bedroom
$
30.79
$
31.56
3 Bedroom
$
36.94
$
37.86
Metered Water Rates
Service Charge ($/month)
Single Family Residential
Up to 3/4" Meter
$
23.78
$
24.37
1" Meter
$
38.60
$
39.57
1 1/2" Meter
$
75.42
$
77.31
2" Meter
$
119.79
$
122.78
Multi -Family and Non -Residential
5/8" Meter
$
23.78
$
24.37
3/4" Meter
$
23.78
$
24.37
1" Meter
$
38.60
$
39.57
1 1/2" Meter
$
60.24
$
61.75
2" Meter
$
75.27
$
77.15
3" Meter
$
105.38
$
108.01
4" Meter
$
135.51
$
138.90
6" Meter
$
195.68
$
200.57
8" Meter
$
255.91
$
262.31
10" Meter
$
316.10
$
324.00
Water Usage Rates ($/CCF)
Single Family Residential
Tier 1 - 0 to 10 CCF/month
$
0.92
$
0.94
Tier 2 - 11 to 50 CCF/month
$
1.38
$
1.41
Tier 3 - Over 50 CCF/month
$
1.82
$
1.87
Multi -Family and Non -Residential
All Water Usage
$
0.92
$
0.94
Engineering
Public Hearing
Water Rates
Agenda Item G - 2
December 18, 2013
Water Rate Setting
• July 2010 Council Adopted 5 -Year Schedule of
Rate Adjustments
• ENR Index Established (No More CPI)
• Proposition 218 Procedure Affirmed Schedule
• Financial Model Used to Analyze Rate Changes
Recommendation
• January 2014 Increase — 2.5%
• Proposition 218 Anticipated Increase — 3.3%
• ENR 2012 Index Change — 3.3%
5 -Year Summary
(1) Consumer Price Index change
(2) Consumer Price Index change (December 2008 through December 2010)
(3) Engineering News Record Index change
w
1 Bedroom $29.90
2 Bedroom
3 Bedroom
4 Bedroom
5 Bedroom
6 Bedroom
7 Bedroom
$35.91
$43.04
$51.72
$62.03
$74.44
$89.31
w
$30.65
$36.81
$44.12
$53.01
$63.58
$76.30
$91.54
New Metered Water Rates
Fixed Monthly Service Charge (3/4 inch)
• Metered charges:
— Tier 1 (Up to 7,480 gals/month)
— Tier 2 (7,480-37,400 gals/month)
— Tier 3 (>37,400 gals/month)
$24.37
$0.00126/gal
$0.00190/gal
$0.00250/gal
m
611aIONVId6010
•
City of Galt $24.31
City of Lodi $45.05
City of Stockton $49.95
City of Manteca $44.64
City of Lathrop $65.56
City of Tracy $29.70
Rate Comparisons - Rea-Ic
City of Sacramento $38.48
City of Lodi $45.05
City of Modesto $40.23
City of Brentwood $61.32
City of Oakland $65.05
City of San Mateo $99.60
City of Burlingame $121.04
MaaNaaa
Duestic
Z'ldlf[•
X6F'9
confirmPlease immediately h'
of thisfax by calling 333-6702
CITY OF LODI
P. O. BOX 3006
LODI, CALIFORNIA 95241-1910
ADVERTISING INSTRUCTIONS
SUBJECT: PUBLIC HEARING TO CONSIDER ADOPTION OF RESOLUTION
SETTING PRE -APPROVED ENGINEERING NEWS RECORD
ADJUSTMENT INDEX FOR USAGE -BASED AND FLAT WATER
RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL
CUSTOMERS
PUBLISH DATE: SATURDAY, NOVEMBER 9, 2013
TEAR SHEETS WANTED: One (1) please
SEND AFFIDAVIT AND BILL TO: RANDI JOHL-OLSON, CITY CLERK
LNS ACCT. #0510052 City of Lodi
P.O. Box 3006
Lodi, CA 95241-9910
DATED: THURSDAY, NOVEMBER 7, 2013
ORDERED BY: RANDI JOHL-OLSON
CITY CLERK
JENNIFER W%ROBISON, CMC
ASSISTANT CITY CLERK
MARIA DITMORE
ADMINISTRATIVE CLERK
Faxed to the Sentinel at 369-1084 at (time) on (date) (pages)
LNS Phoned to confirm receipt of all pages at (time) MD JMR (initials)
(armsladvins. doc
PUBLIC HEARING TO CONSIDER ADOPTION OF RESOLUTION SETTING
PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR
USAGE -BASED AND FLAT WATER RATES FOR RESIDENTIAL,
COMMERCIAL, AND INDUSTRIAL CUSTOMERS
On Thursday, November 7, 2013, in the City of Lodi, San Joaquin County, California, a
Notice of Public Hearing to consider adoption of resolution setting pre -approved
Engineering News Record adjustment index for usage -based and flat water rates for
residential, commercial, and industrial customers (attached and marked as Exhibit A)
was posted at the following locations:
Lodi City Clerk's Office
Lodi City Hall Lobby
Lodi Carnegie Forum
I declare under penalty of perjury that the foregoing is true and correct.
Executed on November 7, 2013, at Lodi, California.
Jf=NNIFER OBISON, CMC
ASSISTANT CITY CLERK
N:IAclraiinis[rationlCl..�,RK1PormslL)E;CPOS'I'I'W.IJOC
RANDI JOHL-OLSON
CITY CLERK
MARIA DITMORE
ADMINISTRATIVE CLERK
CITY OF LODI
Carnegie Forum
Y
• 305 West Pine Street, Lodi
NOTICE OF PUBLIC HEARING
Date: December 18, 2013
Time: 7:00 p.m.
For information regarding this notice please contact:
Randa Johl-Olson
City Clerk
Telephone: (209) 333-6702
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Wednesday, December 18, 2013, at the
hour of 7.00 p.m., or as soon thereafter as the matter may be heard, the City
Council will conduct a public hearing at the Carnegie Forum, 305 West Pine
Street, Lodi, to consider the following matter:
a) Adoption of resolution setting pre -approved Engineering News
Record adjustment index for usage -based and flat water rates for
residential, commercial, and industrial customers (as identified on
the attached Exhibit A).
Information regarding this item may be obtained in the Public Works
Department, 221 West Pine Street, Lodi, (209) 333-6706. All interested persons
are invited to present their views and comments on this matter. Written
statements may be filed with the City Clerks City Hall, 221 W. Pine Street, 2nd
Floor, Lodi, 95240, at any time prior to the hearing scheduled herein, and oral
statements may be made at said hearing.
If you challenge the subject matter in court, you may be limited to raising only
those issues you or someone else raised at the public hearing described in this
notice or in written correspondence delivered to the City Clerk at, or prior to, the
public hearing.
B r of the Lodi City Council:
R Jo Ison
City Clerk
Dated: November 6, 2013
I�.ARNIM r'Y�
D. Stephen Schwabauer
City Attorney
JACITYCLIRAWORMS PH NOTICE publlcallon waterReles.doc 1 AMM
Exhibit A
City of Lodi -- Water Utility
Current and proposed Water states
I Current .Ian. 2014 P
Flat Rates ($1month)
$
Percent increase
$ 38.60
Single Family Residential Unit ($/month)
39.57
1 Bedroom $
29.90 $
2 Bedroom $
35.91 $
3 Bedroom $
43.04 $
4 Bedroom $
51.72 $
5 Bedroom $
62.03 $
6 Bedroom $
74.4.4 $
7 Bedroom $
89.31 $
Multi -Family Residential Unit ($/month)
$ 60.24
1 Bedroom $
25.67 $
2 Bedroom $
30.79 $
3 Bedroom $
36.94 $
Metered Water Rates
Service Charge ($/month)
Single Family Residential
Up to 3/4" Meter
1" Meter
1 1/2" Mete'
2" Meter
Multi -Family and Non -Residential
5/8" Meter
3/4" Meter
1" Meter
1 1/2" Meter
2" Meter
3" Meter
4" Meter
6" Meter
8" Meter
10" Meter
Water Usage Rates ($/CCF)
Single Family Residential
Tier 1 - 0 to 10 CCF/month
Tier 2 - 11 to 50 CCF/month
Tier 3 - Over 50 CCF/mond)
Multi --Family and Non -Residential
All Water Usage
2.5%
30.65
36.81
44.12
53.01
63.58
76.30
91.54
26.31
31.56
37.86
$ 23.78
$
24.37
$ 38.60
$
39.57
$ 75.42
$
77.31
$ 119.79
$
122.78
$ 23.78
$
24.37
$ 2178
$
24.37
$ 38.60
$
39,57
$ 60.24
$
61.75
$ 75.27
$
77.15
$ 105.38
$
108.01
$ 135.51
$
138.90
$ 195.68
$
200,57
$ 255.91
$
262.31
$ 316.10
$
324.00
$ 0.92
$
0.94
$ 1.38
$
1.41
1.82
$
1.87
0.92
$
0.94