HomeMy WebLinkAboutMinutes - August 28, 2001 SSCITY OF LODI
INFORMAL INFORMATIONAL MEETING
"SHIRTSLEEVE" SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, AUGUST 28, 2001
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday,
August 28, 2001 commencing at 7:03 a.m.
A. ROLL CALL
Present: Council Members — Hitchcock (arrived at 7:04 a.m.), Howard, Land, Pennino and
Mayor Nakanishi
Absent: Council Members — None
Also Present: City Manager Flynn, Deputy City Attorney Schwabauer and City Clerk Blackston
SPECIAL MEETING OF THE CITY COUNCIL
At 7:05 a.m., Mayor Nakanishi adjourned the Shirtsleeve Session to a Special meeting of the City
Council (NOTE: refer to the August 28, 2001 Special meeting minutes).
B. CITY COUNCIL CALENDAR UPDATE
At 7:09 a.m., Mayor Nakanishi reconvened the Shirtsleeve Session, and City Clerk Blackston
reviewed the weekly calendar (filed).
C. TOPIC(S)
C-1 "Water/Wastewater Rates"
Public Works Director Prima stated that at a previous Council meeting the question was
raised as to what other cities have done in the way of water and wastewater infrastructure
replacement and the associated cost. Mr. Prima reported that it is difficult to obtain data
on this issue, and there is no industry standard because it is dependent on the city's
particular conditions. Lodi has 14 miles of two-inch water pipe on both the east and west
sides of the City, in addition to some three-inch pipe that needs to be replaced. Much of
this pipe was installed in the 1920s through 1940s. Through the 1960s there was an
insufficient number of valves installed. Fire hydrants were placed 1,000 feet apart,
whereas current standards require hydrants to be placed 300 to 500 feet apart. Pipes,
valves, and fire hydrant placement all need to be brought up to current standards.
Mr. Prima reported that the City has an unknown amount of concrete or clay sewer pipes
that need to be replaced using the bursting method. As part of the general plan update in
the late 1980s, Public Works had a televised sampling done of the sewer pipes on the
east side to determine capacity and condition. They discovered off -set joints and sags in
the system. He explained that sewer pipes need to be installed on a gravity flow basis.
Sewer pipes in Lodi were installed flat until the 1970s when lift stations were installed
when needed and pipes were placed on a slope, which made them essentially self
cleaning.
Referencing documents presented to Council (filed), Mr. Prima explained that staff used a
budget figure of $200 a foot per utility. The Stockton Street project was used as an
example of costs, though Mr. Prima pointed out that this was not a typical infrastructure
replacement because it was part of a street reconstruction project, which decreases the
cost for water and sewer pipe replacement. Trunk lines run north and south, and mains
that serve lots in this area run east and west. Services that tie into each house attach to
the main lines. The contract price for water pipe replacement is $97 per foot and
wastewater pipe is $122 per foot. In typical replacements (i.e. not done in conjunction
with a street reconstruction project), the cost would increase an additional $190 a foot per
Continued August 28, 2001
utility. More pipe may need to be installed than is removed, due to rerouting that would be
necessary around lots, side streets, and interconnections in order to meet current
standards.
In response to Mayor Pro Tempore Pennino's request for clarification regarding costs,
Mr. Prima justified his estimate by reporting that on a recent sewer replacement, which
involved pipe bursting, the price was $46 per foot. In addition, restoration of alleys in the
older parts of the City will be necessary. In those areas both water and sewer lines are in
the alley, and it is not practical to move the sewer from the alley to the street due to the
way the houses were plumbed. In situations where the water and sewer lines are in a
rear easement, the water line would need to be moved to the street, which would cause
the additional work of street trenching and repair. Further, the split lots are problematic,
where water and sewer lines run through one lot and serve another parcel. This may
result in the need to place additional pipe in the alley and the street.
Discussion ensued regarding the difference between `project' cost versus the 'per foot of
pipe installation' cost, and the variances that are expected to occur with the infrastructure
replacement project.
In reply to Mayor Nakanishi, Mr. Prima explained that the 2 -inch pipe represents 10% of
the City's system.
Council Member Hitchcock asked for an explanation of the factors involved in the 30%
contingency cost.
Mr. Prima responded that the contingency cost includes engineering, staff, outside
contractors to do the design work, split lots, restoration of rear yards, additional work
required for the pipe bursting process, and unforeseen conditions such as when services
are under a resident's garage floor or other inconvenient location.
Council Member Hitchcock questioned whether staff took into account the period of time
the project would cover, and projected what the present value of those future dollars
would be.
Mr. Prima reported that the cost estimate was done at the current dollar value. Staff
projected out two years and added cost inflaters for that period only. He did not
recommend projecting rates beyond the two-year period. Rates will need to be adjusted
periodically over time.
In answer to Mayor Nakanishi's suggestion to consider using City crews, Mr. Prima
explained that the replacement project is seasonal and much of the work is specialized
(e.g. pipe bursting) requiring certain equipment and expertise.
The current water rate for a three-bedroom home is a flat monthly rate of $12.45. Of that
amount, $10.68 is for operations and maintenance — crews, engineering staff, power for
pumps, lab work, etc; $0.90 is for capital maintenance and equipment. Staff is
recommending an increase of $0.87 for the water pipe replacement program. Customers
with a three-bedroom home are currently billed $8.90 per month for sewer service. Of
that amount, $7.79 is for operations and maintenance; $0.80 is for capital maintenance
equipment. Staff is recommending an increase of $0.31 for the sewer pipe replacement
program.
In terms of an alternate water supply, Mr. Prima stated that if staff were to complete all
the filings and proceed with the environmental and preliminary design work, the cost
would potentially be $2 million a year for the next several years. He presented this for
information only and did not recommend adding that cost into the rates at this time.
Reporting on the wastewater treatment plant, Mr. Prima stated that $370,000 has been
included for each year of the 2001-03 budget to work on improvements at the plant.
When a decision is made to go to tertiary, or other method, the total project cost is
2
Continued August 28, 2001
estimated to be $34 million. Mr. Prima stated that 70% of the cost would be borne by
rates, with the remaining 30% in a connection or impact fee. Using the rule of thumb of
10% for debt service, this amounts to $2.38 million per year. Mr. Prima presented this for
information purposes only and did not recommend adding that cost into the rates at this
time.
In answer to Council Member Hitchcock's request for clarification on sustaining a fund
balance, Mr. Prima explained that the budget policies specify that the Department
maintain a minimum of 15%. Staff feels that maintaining only the minimum would not be
prudent and suggest 15%, plus an amount for a capital replacement.
Mr. Prima also reported that the City has $2 to 3 million in debt to the state for a loan
taken a few years ago related to dibromochloropropane (DBCP).
City Manager Flynn added that the City borrowed approximately $12 million for
wastewater system improvements and currently owes $10 million on that loan.
Returning to his report on rate increases, Mr. Prima recommended adjusting the water
rate, but not changing the base charge for a meter. He also reported that all three utilities
pay an in -lieu tax to the general fund: Electric Utility pays 12%, Water 17%, and Sewer
20%. Beginning the next fiscal year, he recommended adjusting the in -lieu tax so that all
utilities pay 12%.
In reply to Mayor Pro Tempore Pennino, Mr. Prima explained that the proposed rate
increases take into account the approximate $605,000 difference to the general fund that
the in -lieu tax change would make, which would result in no change in the net amount to
the general fund.
Mr. Prima recommended the following rate increases take place October 1, 2001 and July
2002:
• Water — 3 bedroom home, increase $3.11; additional increase of $3.89 in July 2002
• Wastewater — 3 bedroom home, increase $3.12; additional increase of $4.20 in
July 2002
Note: These increases amount to 25% for water and 35% for sewer.
Discussion ensued regarding equity in charging customers, the advantages and
disadvantages of meters, and possible future issues.
In response to Mayor Pro Tempore Pennino for examples of rates spread out over five
years and/or in a tiered effect, Mr. Prima advised against projecting further than two years
due to uncertainties.
Council Member Hitchcock asked for information related to funds deducted from the
water fund to pay for attorney fees related to PCE/TCE. She emphasized that these fees
should not be recaptured through the water and wastewater rates.
Mr. Prima assured Ms. Hitchcock that the rate increase recommendation does not include
costs related to PCE/TCE attorneys' fees. He indicated that he would look into
Ms. Hitchcock's request and supply the information.
Mayor Nakanishi asked Mr. Prima to include rate information on Stockton, Manteca,
Escalon, and the County for comparison purposes at the August 29, 2001, special Town
Hall meeting.
D. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS
None.
Continued August 28, 2001
E. ADJOURNMENT
No action was taken by the City Council. The meeting was adjourned at approximately 8:29 a.m.
ATTEST:
Susan J. Blackston
City Clerk
Mayor's & Council Member's Weekly Calendar
WEEK OF AUGUST 28, 2001
Tuesday, August 28, 2001
7:00 a.m. Shirtsleeve Session
1. Water/Wastewater Rates
7:00 a.m. Special Meeting
1. Authorize the City Manager to provide San Joaquin County Council of
Governments with a letter of support for its proposal to host a
League of California Cities 6rassroots Coordinator in its Stockton
office
5:30 p.m. Land. Lodi Sister City Committee Membership Appreciation Annual Picnic,
Lodi Lake Park - Parson Point.
Wednesday, August 29, 2001
7:00 p.m. Town Holl Meeting
1. City Council review of electric, water, and wastewater rates and
discussion regarding reverse frontage walls
Thursday, August 30, 2001
4:00 - 5:30 p.m. Lodi Lake Nature Area Docent Council Discovery Center Open House, Lodi
Lake Discovery Center.
4:00 - 7:00 p.m. Open House hosted by Sorac ino- Kirby- Snow, 980 Ninth Street, Suite
1480, Sacramento.
Friday, August 31, 2001
10:00 -2:00 p.m. Open House for Frank Pepper, retiring Parks Supervisor, Parks Division
Office.
Saturday, September 1, 2001
Sunday, September 2, 2001
Monday, September 3, 2001
Reminder Labor Day. City Hall closed.
Disclaimer. This calendar contains only in formation that was provided to the ON Clerk's office
counci hmisclmcalndr.doc
t-l� S1, a e -o
Water/Wastewater Utility Issues
(In Two Parts)
Part 1 — July 31, 2001 Shirtsleeve
■ Declining Fund Balance
■ Budget Objective #7- To Provide Resources to Maintain City's Infrastructure
■ Regulatory & Other Requirements
■ Direction/Next Steps
■ Rates
➢ History
➢ Other Agencies
Part 2 — August 28, 2001 Shirtsleeve
■ Infrastructure Replacement Issues
■ Cost of Replacements
■ Revenue Requirements
■ Proposed Rates
I
.Infrastructure Replacement Issues
■ No "Industry Standard"
■ Useful Life of Pipe Varies Considerably
➢ Pipe Material
➢ Soil Conditions
➢ Customer Demands
■ Lodi's Problem
➢ 2" Steel Pipe Watermains
✓ Size is fine by 1930's standards, inadequate today
✓ Prone to leakage, breaks
✓ Other appurtenances a problem —valves, hydrants
✓ 14 miles in our system
✓ 10 years to replace at total system I% replacement rate
➢ Concrete & Clay Sewer Pipe
✓ Size is minimally adequate, corrosion a problem
✓ Pipe breakage, joint leakage
✓ Quantity unknown
K
N
Cost of Replacements
■ Budget Estimate Approx. $200 per ft. Each for Water & Sewer ($400 total)
■ Stockton Street Project — Street Reconstruction w/ Trunk Line Replacement
➢ Includes Replacing 1,300 ft. Each of Water & Sewer Trunk Mains
➢ Work Is Entirely in Street, as Part of Street Reconstruction (shared costs)
➢ Contract Cost for Both: $219 per ft.
➢ For Typical Replacement Project, Need to Add:
✓ Trench/Street Restoration - $18 per ft.
✓ Water & Sewer Services to Each Parcel - $55 per ft.
✓ Engineering & Contingencies (30%) - $88 per ft.
✓ Total Cost Estimate - $380 per ft. ($190 for each utility)
✓ Does Not Include Easements & Related Construction for Split Lots.
■ Typical Eastside Project
➢ Includes Replacing Water & Sewer Mains in alleys or rear yards
➢ Work Is Mainly in Yards and New Water Main in Street
➢ Assumed No Cost for Easements
➢ Mission & Watson Streets Project Estimates:
✓ Wastewater - $187 per project foot A
$171 per foot of main pipe installed
✓ Water - $ 285 per project foot
$ 140 per foot of main pipe installed
3
STOCKTON STREET (TOKAY TO LODI AVE.)
WATER & WASTEWATER INFRASTRUCTURE
REPAIR COST COMPARISON (PER PROJECT FOOT)
Dell Engineering
Granite Construction
Average
,
Item No. Description Unit
Quantity
Unit Price
Total
Price
Unit Price
Total Price
Unit Price
Total Price
1 Traffic Control LS
1 $
1,751
$
1,751
$
45,000
$
45,000
$
23,376
$
23,376
2 Excavation Safety LS
1 $
9,959
$
9,959
$
5,000
$
5,000
$
7,480
$
7,480
3 6 inch WW Pipe LF
233 $
23
$
5,359
$
75
$
17,475
$
49
$
11,417
4 10 inch WW Pipe LF
1327 $
31
$
41,137
$
55
$
72,985
$
43
$
57,061
5 48 inch WWMH EA
7 $
2,083
$
14,581
$
2,200
$
15,400
$
2,142
$
14,991
6 Abandon WW Pipe LS
1 $
32,402
$
32,402
$
12,000
$
12,000
$
22,201
$
. 22,201
7 Abandon WWMH EA
5 $
1,938
$
9,690
$
1,000
$
5,000
$
1,469
$
7,345
8 Install 4 inch WW Service EA
21 $
565
$
11,865
$
1,200
$
25,200
$
883
$
18,533
Total WW Infrastructure Costs
$
126,744
$
198,060
$
162,402
10 6 inch Water Pipe LF
195 $
11
$
2,145
$
48
$
9,360
$
30
$
5,753
11 8 inch Water Pipe LF
66 $
16
$
1,056
$
60
$
3,960
$
38
$
2,508
12 12 inch Water Pipe LF
1328 $
35
$
46,480
$
57
$
75,696
$
46
$
61,088
13 6 inch Water Valve EA
10 $
539
$
5,390
$
900
$
9,000
$
720
$
7,195
14 8 inch Water Valve EA
2 $
752
$
1,504
$
1,100
$
2,200
$
926
$
1,852
15 12 inch Water Valve EA
7 $
1,258
$
8,806
$
1,900
$
13,300
$
1,579
$
11,053
16 Install 1 inch Water Service EA
15 $
518
$
7,770
$
1,200
$
18,000
$
859
$
12,885
17 Install 1 inch Water Service w/o Meter Box EA
3 $
622
$
1,866
$
1,100
$
3,300
$
861
$
2,583
18 Fire Hydrant EA
4 $
2,478
$
9,912
$
2,500
$
10,000
$
2,489
$
9,956
19 Temp. B.O. EA
11 $
292
$
3,212
$
1,200
$
13,200
$
746
$
8,206
20 Abandon WM & Valves LS
1 $
2,739
$
2,739
$
10,000
$
10,000
$
6.370
$
6,370
Total Water Infrastructure Costs
$
90,880
$
168,016
$
129,448
Total Project Footage
1,330
LF
Water Improvements Per Project Foot
$
97
WW Improvements Per Project Foot
$
122
Subtotal Water & WW Improvements Per Project Foot for this Project
$
219
$
219
Additional Costs For a Typical Planned Project:
Trench Repair @ $15/foot (Estimated)
$
15
Water Services to Each Lot (Avg. $ / Block Ft.)'
$
20
Sewer Services to Each Lot (Avg. $ / Block Ft.)
$
35
Street Repair (Slurry Seal After Construction - $
/ Block Ft.)'
$
3
Subtotal Additional Costs ($ / Block Ft.)
$
73
$
73
Subtotal of Estimated Project Costs ($ / Block Ft.)
$
293
Engr. & Contingencies (30%)
$
88
Total Estimated Project Costs ( $ / Block Ft.)
$
380
Cost Per Utility at 50% Each ( $ / Block Ft.):
$
190
'Not included: costs associated with adjacent blocks; costs of acquiring
easements;relocation of water services from
rear yard to front yard; property restoration after construction; traffic control; etc.
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#1
EASTSIDE WATER& WASTEWATER REPLACEMENT PROJECT
BLOCKS F-5 & G6 (Blocks Between Mission and Watson • E. of Stockton Street - No Ailey)
PRELIMINARY COST ESTIMATE - FUND DISTRIBUTION
• Including Costs Associated with Adjacent Blocks (Water Improvements 6 Street Repair)
" Not Including Costs Associated with Adjacent Blocks (Water Improvements & Street Repair)
Engineses Estimate
I Fund Distribution
Item No. Description
Unit Quantity Unit Price
Total Price
WW Main Replacement
W Main Replacement
Miscellaneous
17.1
18.1
Traffic Control
LS
1 $
10,000
$ 10,000
$ 4,000
$
6,000
Excavation Safety
LS
1 $
5,000
$ 5,000
$ 2,000
$
3,000
Mobilization/Demobilization
LS
1 $
20,000
$ 20,000
$ 8,000
$
12,000
Construction Photography
LS
1 $
1,500
$ 1,500
$ 800
$
goo
Subtotal Miscellaneous
$ 36,500
S 14,600
$
21,900
Wastewater
6inch WW Pipe
LF
1300 $
50
$ 65,000
$ 65,000
flinch WW Pipe
LF
170 $
60
S 10,200
$ 10,200
48 inch WWMH
FA
4 S
3,000
$ 12,000
$ 12,000
Abandon WWMH
LS
1 $
1,500
$ 11500
$ 1,500
Install 4 inch WW Connections w/ Service & Cleanouts
EA
42 $
1,200
S 5OA00
S 50,400
Subtotal Wastewater
$ 139,100
$ 139,100
Water
8 inch Water Pipe
LF
2750 $
40
$ 110,000
$
110,000
6 inch Water valve
EA
4 $
750
$ 3,000
$
3,000
8 inch Water Valve
EA
8 $
1.000
$ 8,000
$
8,000
Install 1 inch Water Service
EA
72 $
660
$ 61,920
$
61,920
Fire Hydrant
EA
2 $
2,500
$ 5,000
$
5,000
Abandon WM & Valves
EA
1 $
5,000
$ 5,000
$
5,000
Connect Services to Buildings
EA
42 $
500
$ 21,000
$
21,000
Subtotal Water
S 213,920
$
213,920
Backyard Reconstruction
Replace existing landscape and improvements if damaged by work
EA
42 $
750.00
$ 31,500
$ 12,600
$
18,900
Adjust MH rims and cleanouts to grade
LS
1 $
2,000
$ 2,000
$ Boo
$
1,200
Subtotal Alley Reconstruction
$ 33,500
$ 13,400
S
20,100
Street Reconstruction (Mlssion.Washington & Watson)
Patch Pave Water Main Trench
SF
14,500 $
4.00
S 58,000
$ 23,200
S
34,800
Slurry Seal Streets
SF
85,000 $
0.10
$ 8,500
$ 3,400
$
51100
,dJ
Subtotal Street Reconstruction
$ 66,500
S 26,600
S
39,900
Project Subtotal of Construction Costs
$ 489,520
$ 193,700
$
295,820
Contingencies (15%)
$ 73,428
$ 29,055
$
44,373
Engineering and Administration (15%)
$ 73,428
$ 29,055
$
44,373
Total Estimated Project Cost
$ 636,376
$ 251,810
S
384,566 S
636,376
TOTAL PROJECT FOOTAGE
1350 LF
NOTES:
Install water in the street, abandon water in backyards
Gross $ / Project Fool'
Rehab wastewater in backyards
Wastewater
Water
Combined
Indiividually serve each address with own service
S 187
$
285 $
472
Rebuild backyard area as required after construction
Slurry Seal Mission and Watson Streets after installation of water main and services
Net $ / Project Foot
Wastewater
Water
Combined
$ 187
$
166 $
353
$ / Foot of Pipe Installed'
Wastewater
Water
Combined
$ 171
$
140 $
311
• Including Costs Associated with Adjacent Blocks (Water Improvements 6 Street Repair)
" Not Including Costs Associated with Adjacent Blocks (Water Improvements & Street Repair)
$14.00
$12.00
E $10.00
0
L
C $8.00
M
d
0� $6.00
t
r-+
C
0 $4.00
$2.00
E:
Water Rate Components
DOperations & Maintenance M Capital Maintenance & Equipment
❑ Infrastructure Replacement Program
Avg. 2001103
i
$10.00
HM
ME
a)
E $7.00
0
m $6.00
M
$5.00
TA
>% $4.00
t
o $3.00
$2.00
$1.00
Wastewater Rate Components
13 Operations & Maintenance ® Capital Maintenance & Equipment
❑ Wastewater Treatment Improvements ❑Infrastructure Replacement
Avg. 2001103 Budget
E:3
Increased Revenue Requirements
Water Utility
Component
Sustain Fund Balance
w/Reserve
Replace Infrastructure
Alternate Water Supplies
Total:
Wastewater Utility
Sustain Fund Balance
w/Reserve
Replace Infrastructure
Wastewater Treatment
Upgrades
Total:
Grand Total:
$ Per Year
Recommended Potential
Program Program
$45,000 $ 45,000
$2,200,000 $2,200,000
$20,000 $2,000,000
$2,265,000 $4,245,000
$ 245,000 $ 245,000
$ 2,000,000 $ 2,000,000
$ 370,000 $ 2,380,000
$ 2,615,000 $ 4,625,000
$ 4,880,000 $ 8,870,000
V,
Proposed Rate Adjustment Concepts
■ Two Smaller Increases Rather Than One Large One
■ Adopt Both Increases Now To Allow Planning
➢ October 2001
➢ July 2002
➢ Reconsider during FY 2002/03 for Future Years
■ Water — Adjust Flat Rates and Water Usage, Leave Base Meter Charge As Is
➢ Encourage Conservation
➢ Rates More In Line With Other Cities
■ Reduce In -Lieu Charge Starting FY 2002/03
➢ Reduce Water from 17% to 12%
➢ Reduce Sewer from 20% to 12%
➢ Both will then be same as Electric
➢ Continuing practice from last Water increase in 1995
10
Proposed — Water/Wastewater Rates
October July
Water 2001 2002
$/month — 3 Br. Home
Existing Rate: $ 12.45 $15.56
Increase: $3.11 $3.89
Total: $ 15.56 $ 19.45
$/1000 gal/mo. Metered:
(no change in base chg.)
Existing Rate: $ 0.40
Increase: $0.14
Total: $ 0.54
Wastewater
$/month — 3 Br. Home
Existing Rate: $ 8.90
Increase: $3.12
Total: $ 12.02
Y
Y
I1
$ 0.54
0.17
$ 0.71
$ 12.02
4.20
$ 16.22
$25.00
$20.00
0
E
0
m $15.00
M
d
$10.00
S
C
O
a
$5.00
Water Rate Components
0 Operations & Maintenance ® Capital Maintenance & Equipment
[3Infrastructure Replacement Program
Avg. 2001103 Proposed July 2002
IL
$30.00
$25.00
a)
E
_ $20.00
L
in
M
$15.00
w
0:
a
$10.00
0
2
$5.00
Wastewater Rate Components
13 Operations & Maintenance ®Capital Maintenance & Equipment
p Wastewater Treatment Improvements 0Infrastructure Replacement
Avg. 2001/03 Budget Proposed July 2002 Potential 2003
13
Next Steps
■ Questions/Comments from Council
■ Town Hall Meeting August 29
• City Council Meeting September 19
14