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Home My WebLink AboutAgenda Report - July 16, 2014 G-01 PHAGENDA ITEM 4 40 1 M, CITY OF LODI ,. COUNCIL COMMUNICATION TM AGENDA TITLE: Public Hearing to Consider Adopting Resolution Setting Pre -Approved Engineering News Record Adjustment Index for Wastewater Rates and Restructured Water Rates for Residential, Commercial and Industrial Customers MEETING DATE: July 16, 2014 PREPARED BY: Public Works Director RECOMMENDED ACTION: Public hearing to consider adopting resolution setting pre -approved Engineering News Record Adjustment Index for wastewater rates and restructure water rates for residential, commercial and industrial customers. BACKGROUND INFORMATION: City Council, on May 7, 2014, approved a program of future wastewater and water rate increases, capped at 3 percent. City Council also approved a restructuring of the usage -based water rates. Prior to that, the City Council on December 18, 2013 approved a 2.5 percent increase in water rates that became effective January 1, 2014. A Proposition 218 procedure was conducted that validated these actions. Staff has regularly updated the Wastewater Utility Financial Plan and a copy of the current Financial Plan is attached as Exhibit A. The recommended rate adjustments in the Financial Plan are 2.5 percent beginning July 1, 2014, lower than the ENR -based index of 2.6. City Council is requested to implement the first year of a three-year transition to restructure the usage -based water rates. By design, the restructured rate schedule is revenue neutral, with no increase in net revenue above the annual inflation adjustment. A summary of the restructured water rates changes is provided below. 1. The monthly base charge, comprising fixed customer costs and system capacity costs, are allocated as follows. Fixed customer costs (such as meter reading, billing, and customer service) are allocated equally to each customer. Fixed capacity costs (such as debt service, capital expenditures, and system maintenance) are allocated based upon the relative capacity of the meter size. The biggest change here is in the larger meter sizes that were paying disproportionately less based upon the meter size. 2. The commodity charge (cents per cubic foot used) for single-family uses will slightly reduce over time (mostly in the second and third rate tiers) while for non-residential and multi -family uses, it will increase over time. The non-residential and multi -family will remain on a single tier rate, but the charge will reflect the weighted average rate across the three single-family tiers. A copy of the current and proposed usage -based water rates is provided in Exhibit C. A copy of the Water Utility Financial Plan is provided in Exhibit D. FISCAL IMPACT: Increased revenues to the wastewater and water utilities are required to keep up with cost of service increases and new mandated costs. FUNDING AVAILABLE: Not applicable. A in F. Wally S elin Public Works Director Attachments cc: Information Systems Manager K:\WMUTILITY RATES\W WW 2014 W -WW Rate Increase\CCPR WW WRales doc 7/7/2014 City of Lodi -- Wastewater Utility Financial Plan Summary Beginning Balance Revenues Wastewater Sales Interest Earnings Other Revenues Transfer In for Debt Service (172) Transfer In for Debt Service (173) Total Revenues Expenditures Operating Transfers Out (to GF) Transfer Out to Gen'I Fund (Cost of Services) Transfer Out to WW Capital Outlay (171) Administration & Other Plant Maintenance Sanitary System Maintenance Storm Drainage Maintenance Industrial System Maintenance 2003 Wastewater COP Debt Service 2004 Wastewater COP Debt Service 2007 Wastewater COP Debt Service 2012 Wastewater Refinancing Total Expenditures Ending Balance Operating Reserve (25%) Available Balance Debt Service Coverage (min. = 1.20) without COST FY 13-14 1 FY 14-15 1 FY 15-16 1 FY 16-17 1 FY 17-18 1 FY 18-19 2.5% 3,240,603 2.5% 3,811,123 3% 2,239,962 3% 4,374,962 3% 5,277,062 3% 4,876,262 14,118,000 14,499,000 14,890,000 15,292,000 15,705,000 16,129,000 37,000 43,000 96,000 171,000 202,000 188,000 234,400 241,200 248,000 255,900 263,800 271,800 31,000 31,000 110,000 110,000 110,000 110,000 16,000 149,000 150,000 154,000 154,000 154,000 14,436,400 14,963,200 15,494,000 15,982,900 16,434,800 16,852,800 1,068,000 1,068,000 1,068,000 1,068,000 1,068,000 1,451,478 - 5,900,000 2,500,000 4,000,000 5,500,000 500,000 1,124,330 1,160,173 1,204,000 1,248,800 1,294,600 1,342,400 3,948,650 3,989,577 4,146,000 4,308,000 4,476,000 4,652,000 611,260 406,782 422,000 438,000 454,000 471,000 415,710 313,813 327,000 340,000 354,000 368,000 23,930 25,016 26,000 27,000 28,000 29,000 3,050,000 - - - - - 98,000 98,000 98,000 98,000 98,000 98,000 1,604,000 1,603,000 1,607,000 1,606,000 1,614,000 1,617,000 1,922,000 1,970,000 1,961,000 1,947,000 1,949,000 1,949,000 13,865,880 16, 534,361 13, 359,000 15, 080,800 16,835,600 12,477,878 3,811,123 2,239,962 4,374,962 5,277,062 4,876,262 9,251,184 2,986,000 2,166,000 2,225,000 2,283,000 2,347,000 2,507,000 825,123 73,962 2,149,962 2,994,062 2,529,262 6,744,184 1.11 2.18 2.27 2.34 2.39 2.33 2.33 2.47 2.56 2.64 2.68 2.73 Beginning Balance 9,242,732 7,767,857 52,285 1,113,714 252,143 424,571 Revenues Transfer In (from 170) - 5,900,000 2,500,000 4,000,000 5,500,000 500,000 Other Revenue 96,429 96,429 96,429 96,429 96,429 96,429 Total Revenues 96,429 5,996,429 2,596,429 4,096,429 5,596,429 596,429 DRAFT -- 5/6/2014 Expenditures Financial System Replacement Elm to Pine Alley Sewer/Laurel Storm Project Misc. System Relocations Misc. Wastewater Taps Collect. System Capac. Enhanc. Projects Wastewater Main Replac./Lining Proj. City Hall Annex Storm Drain Trash Handling System Sacramento Street Lodi Lake Pump Station Lodi Lake Outfall Line Realignment of Domestic & Industrial pipe Domestic Trunk Assessment and Rehab MSC/Kofu Parking Lot Vehicles /Equipment White Slough Compliance Studies & Rpts Plant Maint. & Land Applic. Area Improv. Influent Screening Replacement UV Disinfection Upgrade Aeration Diffuser Replacement Cloth Filter Media Replacement Digested Sludge Line to Presses Electrical Upgrades Admin/Ops Building Improvements Rotary Press Maintenance Crane & air compressor Pond Gates Shop Rollup Door Emergency Generator Maintenance Road to Outfall Repair Secondary Scum Trough Drives Misc Paving SCADA Upgrades/PLC Replacement Primary Chain & Flights Effluent Irrigation Improvements Dewatering screwpress Irrigation Conveyance & Pumping Construction Micro Turbine Fence Repairs/Upgrades Anaerobic Digester Painting WSWPCF Building/Restroom Expansion Plant Security Enhancements Miscellaneous Future Projects Total Expenditures Ending Balance FY 13-14 1 FY 14-15 1 FY 15-16 1 FY 16-17 1 FY 17-18 1 FY 18-19 250,000 250,000 - - - - 33,000 - - - - - 35,000 35,000 36,000 38,000 39,000 41,000 40,000 40,000 42,000 43,000 45,000 47,000 - - 208,000 22,000 225,000 23,000 100,000 2,000,000 104,000 2,163,000 - - - 625,000 - - - - - 700,000 - - - - 56,304 - - - - - - - 100,000 1,000,000 - - - 100,000 - - - 1,100,000 - - - - - - - 200,000 2,000,000 - 75,000 - - - - - 75,000 545,000 104,000 162,000 169,000 175,000 - 270,000 - - - - - 2,000,000 - - - - - 300,000 - - - - - - - 500,000 - - 30,000 - 31,000 - 34,000 - 30,000 - - - - - - 600,000 - - - - - 750,000 - - - - 30,000 - - - - - 35,000 - - - - - 8,000 - - - - - 20,000 - - - - - 10,000 - - - - - 12,000 - - - - - 10,000 1,000,000 - - - - - 130,000 - - - - 80,000 45,000 - - - - - - 780,000 1,622,000 - - - 1,200,000 - - - - - - - - 1,800,000 - - 1,200,000 - - - - - - 26,000 - - 29,000 90,000 - - - - - 300,000 - - - - - 130,000 - - - - - 100,000 100,000 104,000 108,000 112,000 117,000 1,571,304 13,712,000 1,535,000 4,958,000 5,424,000 432,000 7,767,857 52,285 1,113,714 252,143 424,571 DRAFT58956p"t014 Beginning Balance Revenues Transfer In from 170 Interest Earnings Total Revenues Expenditures Transfer Out to 170 (for Debt Service) Total Expenditures Ending Balance Restricted Debt Service Reserve 2007 COP Proceeds (w/ fiscal agent) Cash Deficit (amt. owed for past DS) Beginning Balance Revenues Wastewater IMF Interest Earnings Total Revenues Expenditures Transfer Out (to 170 for Debt Service) Total Expenditures Ending Balance Owed to Fund 170 for Debt Service Beginning Balance Transfer In from 170 Total Revenues Expenditures Transfer Out to 170 Total Expenditures Ending Balance FY 13-14 1 FY 14-15 1 FY 15-16 1 FY 16-17 1 FY 17-18 1 FY 18-19 3,135,539 3,135,539 3,135,539 3,135,539 3,135,539 3,135,539 31,000 31,000 110,000 110,000 110,000 110,000 31,000 31,000 110,000 110,000 110,000 110,000 31,000 31,000 110,000 110,000 110,000 110,000 31,000 31,000 110,000 110,000 110,000 110,000 3,135,539 3,135,539 3,135,539 3,135,539 3,135,539 3,135,539 2,379,536 2,379,536 2,379,536 2,379,536 2,379,536 2,379,536 756,003 756,003 756,003 756,003 756,003 756,003 15,775 148,775 149,775 153,775 153,775 153,775 149,000 149,000 149,000 149,000 149,000 149,000 - 1,000 5,000 5,000 5,000 5,000 149,000 150,000 154,000 154,000 154,000 154,000 16,000 149,000 150,000 154,000 154,000 154,000 16,000 149,000 150,000 154,000 154,000 154,000 148,775 149,775 153,775 153,775 153,775 153,775 2,199,000 500,000 3,010,000 500,000 3,823,000 500,000 4,631,000 500,000 5,444,000 500,000 6,259,000 500,000 500,000 500,000 500,000 500,000 500,000 no oDIA nn 14 FY 13-14 1 FY 14-15 1 FY 15-16 1 FY 16-17 1 FY 17-18 1 FY 18-19 Aggregate End -of -Year Balance 15,363,000 6,078,000 9,278,000 9,319,000 9,090,000 13,629,000 Operating Reserve (25%) 2,986,000 2,166,000 2,225,000 2,283,000 2,347,000 2,507,000 Restricted DS Reserve 2,379,536 2,379,536 2,379,536 2,379,536 2,379,536 2,379,536 2007 COP Proceeds 756,003 756,003 756,003 756,003 756,003 756,003 Rate Stabilization Fund 500,000 500,000 500,000 500,000 500,000 500,000 Net Available for Capital Projects 8,741,461 276,461 3,417,461 3,400,461 3,107,461 7,486,461 City of Lodi -- Wastewater Utility Financial Plan Assumptions Financial Assumptions General Inflation Labor Inflation Material/Energy Inflation Construction Inflation Interest Earnings Cust. Growth (SSUs) Wastewater Mitigation Impact Fee Residential 3/4" Non -Residential 3/4" FY 13-14 FY 14-15 3.0% 3.0% 3.4% 3.4% 4.5% 4.5% 4.0% 4.0% 1.0% 1.0% 50 50 1,720 $ 1,720 $ 4,225 4,225 FY 15-16 3.0% 3.4% 4.5% 4.0% 3.5% 50 1,720 $ 4,225 FY 16-17 3.0% 3.4% 4.5% 4.0% 3.5% 50 1,720 $ 4,225 FY 17-18 3.0% 3.4% 4.5% 4.0% 3.5% 50 1,720 $ 4,225 FY 18-19 3.0% 3.4% 4.5% 4.0% 3.5% 50 1,720 4,225 DRAFT -- 5/6/2014 Exhibit B City of Lodi -- Wastewater Utility current ana rroposea wastewater nates Notes: (1) Winter water usage determined as average monthly usage from December through February. Current July 2014 Residential Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 25.83 $ 26.48 2 Bedroom $ 34.44 $ 35.30 3 Bedroom $ 43.05 $ 44.13 4 Bedroom $ 51.66 $ 52.95 5 Bedroom $ 60.27 $ 61.78 6 Bedroom $ 68.88 $ 70.60 7 Bedroom $ 77.49 $ 79.43 Usage -Based Rates Service Charge ($/month for 3/4" water meter) $ 23.52 $ 24.11 Usage Charge ($/CCF) (1) $ 2.68 $ 2.75 Non -Residential ($/month) Moderate Strength (per SSU) $ 34.44 $ 35.30 High Strength Flow (per MG, annual basis) $ 3,487.41 $ 3,574.60 BOD (per 1,000 lbs, annual basis) $ 575.51 $ 589.90 SS (per 1,000 lbs, annual basis) $ 359.85 $ 368.85 Grease Interceptor & Septic Holding Tank Waste within City Limits (per 1,000 gal.) $ 304.72 $ 312.34 Septic (only) Holding Tank Waste Outside City Limits (per 1,000 gal.) $ 646.89 $ 663.06 Disposal to Storm Drain System (per MG) $ 320.09 $ 328.09 Notes: (1) Winter water usage determined as average monthly usage from December through February. Exhibit C City of Lodi Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. (2) This rate schedule is revenue neutral relative to the proposed newly indexed July 2014 water rates, but includes the beginning of the proposed 3 -year phased changes to the rate structure. (3) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate adjustment due to ENR indexing. Current and Proposed Usage -Based Water Rates Future Rate Ceiling Current Proposed Proposed Proposed Proposed Proposed Proposed (Jan. 2014) (July 2014) (Jan. 2015) (Jan. 2016) (Jan. 2017) (Jan. 2018) (Jan. 2019) Rate Increase --> (2) 3.0%(3) 3.0%(3) 3.0% 3.0% 3.0% USAGE -BASED RATES Monthly Service Charge Single Family Up to 3/4" meter $ 24.37 $ 23.26 $ 22.80 $ 21.65 $ 22.30 $ 22.97 $ 23.66 1" meter $ 39.57 $ 37.38 $ 36.26 $ 34.01 $ 35.03 $ 36.08 $ 37.16 1 1/2" meter $ 77.31 $ 72.45 $ 69.63 $ 64.62 $ 66.56 $ 68.56 $ 70.62 2" meter $ 122.78 $ 114.71 $ 109.84 $ 101.52 $ 104.57 $ 107.71 $ 110.94 Multi -Family and Non -Residential (1) Up to 3/4" meter $ 24.37 $ 23.26 $ 22.80 $ 21.65 $ 22.30 $ 22.97 $ 23.66 1" meter $ 39.57 $ 37.38 $ 36.26 $ 34.01 $ 35.03 $ 36.08 $ 37.16 1 1/2" meter $ 61.75 $ 62.08 $ 64.28 $ 64.62 $ 66.56 $ 68.56 $ 70.62 2" meter $ 77.15 $ 84.29 $ 94.17 $ 101.52 $ 104.57 $ 107.71 $ 110.94 3" meter $ 108.01 $ 132.74 $ 162.18 $ 187.65 $ 193.28 $ 199.08 $ 205.05 4" meter $ 138.90 $ 193.14 $ 254.80 $ 310.67 $ 319.99 $ 329.59 $ 339.48 6" meter $ 200.57 $ 333.69 $ 480.82 $ 617.94 $ 636.48 $ 655.57 $ 675.24 8" meter $ 262.31 $ 494.23 $ 747.94 $ 986.82 $ 1,016.42 $ 1,046.91 $ 1,078.32 10" meter $ 324.00 $ 674.61 $ 1,056.08 $ 1,417.30 $ 1,459.82 $ 1,503.61 $ 1,548.72 Usage Rates ($/CCF) Single Family Tier 1 (0-10 CCF) $ 0.94 $ 0.94 $ 0.97 $ 0.96 $ 0.99 $ 1.02 $ 1.05 Tier 2 (11-50 CCF) $ 1.41 $ 1.35 $ 1.33 $ 1.27 $ 1.31 $ 1.35 $ 1.39 Tier 3 (>50 CCF) $ 1.87 $ 1.76 $ 1.70 $ 1.59 $ 1.64 $ 1.69 $ 1.74 Multi -Family and Non -Residential (1) All water usage $ 0.94 $ 1.00 $ 1.09 $ 1.14 $ 1.17 $ 1.21 $ 1.25 Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. (2) This rate schedule is revenue neutral relative to the proposed newly indexed July 2014 water rates, but includes the beginning of the proposed 3 -year phased changes to the rate structure. (3) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate adjustment due to ENR indexing. City of Lodi -- Water Utility Financial Plan Summary Ending Balance Operating Reserve (25%) Available Balance Debt Service Coverage (min. 1.25) Beginning Balance Revenues Operating Transfers In Interest Earnings Retrofit Meter Install. Charge Debt Proceeds Total Revenues Expenditures Water Meter/Main Install. Project Water Taps Miscellaneous Water Mains Commercial Meter Replacements Financial System Replacement City Hall Annex GAC & Meter Repl (DBCP) UWMP Update 6,734,640 FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 1,631,000 2.5% 2.5% 2.5% 3.0% 3.0% 3.0% 5,033,668 Jan. 2014 Jan. 2015 Jan. 2016 Jan. 2017 Jan. 2018 Jan. 2019 WATER OPERATING FUND (180) 3.31 3.45 5,545,755 6,047,000 6,017,000 8,505,000 Beginning Balance 7,038,455 6,734,640 7,795,229 6,711,668 3,287,607 2,910,996 Revenues 324,000 300,000 300,000 300,000 300,000 300,000 Water Sales 12,716,000 13,059,000 13,412,000 13,807,000 14,286,000 14,744,000 Interest Earnings 136,000 144,000 144,000 99,000 61,000 129,000 Other Revenues 791,070 2,580,400 269,000 272,000 275,000 278,000 Transfer From/(To) RSF (18x) (500,000) - - - - - Transfer from Fund 182 for Debt Service - 109,000 109,000 109,000 109,000 109,000 Total Revenues 13,143,070 15,892,400 13,934,000 14,287,000 14,731,000 15,260,000 Expenditures Transfer Out to General Fund (Cost of Services) 780,000 780,000 780,000 780,000 780,000 780,000 Transfer Out to Capital Fund 181 for projects 4,500,000 6,000,000 6,000,000 8,500,000 5,700,000 1,000,000 To Capital Fund 181 (Depreciation) - - - - - - Personnel Services 2,093,000 2,028,000 2,098,000 2,170,000 2,244,000 2,320,000 Utilities 755,000 664,000 693,000 723,000 754,000 787,000 Supplies, Mat'ls., Services & Other 2,963,000 3,052,000 3,140,000 3,230,000 3,324,000 3,419,000 Debt Service Net 2010 Rev. Bond Payments 2,355,886 2,307,811 2,306,561 2,308,061 2,305,611 2,307,111 Total Expenditures 13,446,886 14,831,811 15,017,561 17,711,061 15,107,611 10,613,111 Ending Balance Operating Reserve (25%) Available Balance Debt Service Coverage (min. 1.25) Beginning Balance Revenues Operating Transfers In Interest Earnings Retrofit Meter Install. Charge Debt Proceeds Total Revenues Expenditures Water Meter/Main Install. Project Water Taps Miscellaneous Water Mains Commercial Meter Replacements Financial System Replacement City Hall Annex GAC & Meter Repl (DBCP) UWMP Update 6,734,640 7,795,229 6,711,668 3,287,607 2,910,996 7,557,885 1,648,000 1,631,000 1,678,000 1,726,000 1,776,000 1,827,000 5,086,640 6,164,229 5,033,668 1,561,607 1,134,996 5,730,885 3.25 4.08 3.14 3.20 3.31 3.45 1 3,809,103 3,268,379 1,493,379 185,379 308,379 291,379 4,549,755 6,000,000 6,000,000 8,500,000 5,700,000 1,000,000 70,000 47,000 17,000 5,000 6,000 8,000 926,000 - - - - - 5,545,755 6,047,000 6,017,000 8,505,000 5,706,000 1,008,000 4,780,000 5,487,000 6,177,000 7,264,000 2,848,000 - 75,000 75,000 77,000 79,000 82,000 84,000 50,000 - 51,000 53,000 54,000 56,000 5,000 5,000 5,000 5,000 5,000 6,000 250,000 250,000 - - - - - 625,000 - - - - 324,000 300,000 300,000 300,000 300,000 300,000 - - 51,000 - - - FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 Fire Station 2 Water Main 25,000 - - - - Meter Fixed Network - - - - - MSC/Kofu Parking Lot 75,000 - - - - Debenedetti Enclosure 30,000 - - - - Sacramento Street 127,479 - - - - Southwest Gateway Water Tank - - - 200,000 2,000,000 Surface Water Treatment Plant PS Generator - - 300,000 - - Well 1 - - 166,000 - - Well 2 -Replace Motor - - 103,000 - - Well 6R -Pump Rehab/Rept 116,000 - - - - Well 5 -Pump Rehab & Electrical Upgrade - 145,000 - - - Well 8 -Pump Rehab, Electrical Upgrade & Chlorination - 245,000 - - - Well 10 - Pump Rehab - 120,000 - - - Well 11 - - - 175,000 - Well 12 -Pump Rehab/Rept - - - 264,000 - Well 13 -Pump Rehab & Electrical Upgrade - 135,000 - - - Well 14 -Pump Rehab/Rept - - - - 181,000 Well 15 -Pump Rehab/Rept - - - - 190,000 Well 16 -Pump Rehab/Electrical Upgrade - - - - - Well 17 -Pump Rehab/Electrical Upgrade - - - - - Well 18 -Pumpb Rehab/Electrical Upgrade - 40,000 - - - Well 19 -Pump Replacement 4,000 - - - - Well 20 -Pump Rehab/Electrical Upgrade - 145,000 - - - Well 24 - Pump Rehab & Electrical Upgrade 135,000 - - - - Well Site Improvements - 100,000 - - - Vehicles/Equipment 90,000 150,000 95,000 42,000 63,000 Total Expenditures 6,086,479 7,822,000 7,325,000 8,382,000 5,723,000 Balance Beginning Balance Revenues Water Impact Mitigation Fees Interest Earnings Total Revenues Expenditures Transfer to Fund 181 for Well 27 Transfer to Operations Fund 180 for Debt Service Total Expenditures Ending Balance Owed Fund 180 for Debt Service 79 224,000 207,000 45,000 922,000 .379 185,379 308,379 291,379 377,379 (6,846) 52,399 53,399 54,399 55,399 56,399 109,000 109,000 109,000 109,000 109,000 109,000 - 1,000 1,000 1,000 1,000 1,000 109,000 110,000 110,000 110,000 110,000 110,000 49,755 - - - - - - 109,000 109,000 109,000 109,000 109,000 49,755 109,000 109,000 109,000 109,000 109,000 52,399 53,399 54,399 55,399 56,399 57,399 5,345,000 6,775,000 8,204,000 9,634,000 11,062,000 12,491,000 Beginning Balance Revenues Transfer In from 180 Total Revenues Expenditures Transfer Out to 180 Total Expenditures Ending Balance FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 FY 18-19 - 500,000 500,000 500,000 500,000 500,000 500,000 - - - - - 500,000 - - - - - 500,000 500,000 500,000 500,000 500,000 500,000 City of Lodi -- Water Utility Financiai Pian Assumptions Financial Assumptions Aggregate End -of -Year Balance * 12,411,000 11,698,000 9,307,000 6,007,000 5,615,000 10,349,000 Operating Reserve (25%) 1,648,000 1,631,000 1,678,000 1,726,000 1,776,000 1,827,000 Restricted DS Reserve 2,356,000 2,356,000 2,356,000 2,356,000 2,356,000 2,356,000 2010 COP Proceeds - - - - - - Rate Stabilization Fund 500,000 500,000 500,000 500,000 500,000 500,000 Net Available for Capital Projects 7,907,000 7,211,000 4,773,000 1,425,000 983,000 5,666,000 City of Lodi -- Water Utility Financiai Pian Assumptions Financial Assumptions General Inflation 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Labor Inflation 3.4% 3.4% 3.4% 3.4% 3.4% 3.4% Material/Energy Inflation 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% Construction Inflation 2.5% 2.5% 2.5% 3.0% 3.0% 3.0% Interest Earnings 2.0% 2.0% 2.0% 2.0% 2.0% 2.5% Customer Account Assumptions No. of DUs/Accounts 23,506 23,556 23,606 23,656 23,706 23,756 No. of 3/4" Eq. Mtrs. 25,554 25,604 25,654 25,704 25,754 25,804 No. of New Connections 50 50 50 50 50 50 Customer Growth Rate 0.20% 0.20% 0.19% 0.19% 0.19% 0.19% Water Mitigation Impact Fee Residential $ 1,263 $ 1,263 $ 1,263 $ 1,263 $ 1,263 $ 1,263 Non -Residential 3,103 3,103 3,103 3,103 3,103 3,103 RESOLUTION NO. 2014-122 A RESOLUTION OF THE LODI CITY COUNCIL SETTING PRE - APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR WASTEWATER RATES AND RESTRUCTURED WATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS WHEREAS, Resolution No. 2014-75 approved a program of wastewater rate increases of up to 3 percent effective July 1, 2014 through 2018; a program of water rate increases of up to 3 percent effective January 1, 2015 through 2019; and a restructuring of usage -based water rates. A Proposition 218 procedure was conducted that validated these actions; and WHEREAS, staff has regularly updated the Wastewater Utility Financial Plan and the recommended rate adjustment in the Financial Plan is 2.5 percent beginning July 1, 2014; and WHEREAS, the rates for current adjustment reflect a 2.5 percent increase that is lower than the ENR -based index of 2.6 percent; and WHEREAS, staff recommends implementation of the first year of a three-year transition to restructure the usage -based water rates effective July 17, 2014. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby set the pre -approved Engineering News Record Adjustment Index for wastewater rates for residential, commercial and industrial customers as outlined on Exhibit A attached with the effective date of the increase to be July 17, 2014; and BE IT FURTHER RESOLVED that the City Council does hereby set the restructured water rates for residential, commercial and industrial customers as outlined in Exhibit B attached with the effective date of the increase to be July 17, 2014. Dated: July 16, 2014 I hereby certify that Resolution No. 2014-122 was passed and adopted by the City Council of the City of Lodi in a regular meeting held July 16, 2014, by the following vote: AYES: COUNCIL MEMBERS — Hansen, Johnson, Nakanishi, and Mayor Katzakian NOES: COUNCIL MEMBERS — Mounce ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None KARI4CADWICK Administrative Secretary 2014-122 Exhibit A City of Lodi -- Wastewater Utility Curmlit.anarrif .asell.wastewacer_KWMS Current July 2014 Residential Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 25.83 $ 26.48 2 Bedroom $ 34.44 $ 35.30 3 Bedroom $ 43.05 $ 44.13 4 Bedroom $ 51.66 $ 52.95 5 Bedroom $ 60.27 $ 61.78 6 Bedroom $ 68.88 $ 70.60 7 Bedroom $ 77.49 $ 79.43 Mobile Homes Any Size $ 25.83 $ 26.48 Usage -Based Rates (1) Service Charge ($/month for 3/4" water meter) $ 23.52 $ 24.11 Usage Charge ($/CCF) (1) $ 2.68 $ 2.75 Non -Residential ($/month) (2) Moderate Strength (per SSU) $ 34.44 $ 35.30 High Strength Flow (per MG, annual basis) $ 3,487.41 $ 3,574.60 BOD (per 1,000 lbs, annual basis) $ 575.51 $ 589.90 SS (per 1,000 lbs, annual basis) $ 359.85 $ 368.85 Grease Interceptor & Septic Holding Tank Waste within City Limits (per 1,000 gal.) $ 304.72 $ 312.34 Septic (only) Holding Tank Waste Outside City Limits (per 1,000 gal.) $ 646.89 $ 663.06 Disposal to Storm Drain System (per MG) $ 320.09 $ 328.09 Notes: (1) Winter water usage determined as average monthly usage from December through February. (2) Flat wastewater rates for schools are to be determined on the basis of 18 students per SSU. Exhibit B City of Lodi Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. (2) This rate schedule is revenue neutral relative to the proposed newly indexed July 2014 water rates, but includes the beginning of the proposed 3 -year phased changes to the rate structure. (3) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate adjustment due to ENR indexing. Current and Proposed Usage -Based Water Rates Future Rate Ceiling Current Proposed Proposed Proposed Proposed Proposed Proposed (Jan. 2014) (July 2014) (Jan. 2015) (Jan. 2016) (Jan. 2017) (Jan. 2018) (Jan. 2019) Rate Increase -> (2) 3.0%(3) 3.0%(3) 3.0% 3.0% 3.0% USAGE -BASED RATES Monthly Service Charge Single Family Up to 3/4" meter $ 24.37 $ 23.26 $ 22.80 $ 21.65 $ 22.30 $ 22.97 $ 23.66 1" meter $ 39.57 $ 37.38 $ 36.26 $ 34.01 $ 35.03 $ 36.08 $ 37.16 1 1/2" meter $ 77.31 $ 72.45 $ 69.63 $ 64.62 $ 66.56 $ 68.56 $ 70.62 2" meter $ 122.78 $ 114.71 $ 109.84 $ 101.52 $ 104.57 $ 107.71 $ 110.94 Multi -Family and Non -Residential (1) Up to 3/4" meter $ 24.37 $ 23.26 $ 22.80 $ 21.65 $ 22.30 $ 22.97 $ 23.66 1" meter $ 39.57 $ 37.38 $ 36.26 $ 34.01 $ 35.03 $ 36.08 $ 37.16 1 1/2" meter $ 61.75 $ 62.08 $ 64.28 $ 64.62 $ 66.56 $ 68.56 $ 70.62 2" meter $ 77.15 $ 84.29 $ 94.17 $ 101.52 $ 104.57 $ 107.71 $ 110.94 3" meter $ 108.01 $ 132.74 $ 162.18 $ 187.65 $ 193.28 $ 199.08 $ 205.05 4" meter $ 138.90 $ 193.14 $ 254.80 $ 310.67 $ 319.99 $ 329.59 $ 339.48 6" meter $ 200.57 $ 333.69 $ 480.82 $ 617.94 $ 636.48 $ 655.57 $ 675.24 8" meter $ 262.31 $ 494.23 $ 747.94 $ 986.82 $ 1,016.42 $ 1,046.91 $ 1,078.32 10" meter $ 324.00 $ 674.61 $ 1,056.08 $ 1,417.30 $ 1,459.82 $ 1,503.61 $ 1,548.72 Usage Rates ($/CCF) Single Family Tier 1 (0-10 CCF) $ 0.94 $ 0.94 $ 0.97 $ 0.96 $ 0.99 $ 1.02 $ 1.05 Tier 2 (11-50 CCF) $ 1.41 $ 1.35 $ 1.33 $ 1.27 $ 1.31 $ 1.35 $ 1.39 Tier 3 (>50 CCF) $ 1.87 $ 1.76 $ 1.70 $ 1.59 $ 1.64 $ 1.69 $ 1.74 Multi -Family and Non -Residential (1) All water usage $ 0.94 $ 1.00 $ 1.09 $ 1.14 $ 1.17 $ 1.21 $ 1.25 Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. (2) This rate schedule is revenue neutral relative to the proposed newly indexed July 2014 water rates, but includes the beginning of the proposed 3 -year phased changes to the rate structure. (3) These rate schedules reflect the second and third year of the 3 -year rate structure phasing, as well as the maximum potential rate adjustment due to ENR indexing. Engineering fi� Setting Pre -Approved Wastewater Rates and Re -structuring Water Rates Agenda Item G-01 Background • May 7, 2014 — Adopted future rate schedules • December 18, 2013 — 2.5 % water rate increase approved • ENR based indexing • Adjustments typically below ENR index increase Rate Adjustments • July 1, 2011 • July 1, 2012 • July 1, 2013 • July 17, 2014 (ENR index change) 5%(10%) 3%(5%) 2.5%(3%) 2.5%(3.3%) Wastewater Comparative Rates 2 Bedroom 3 Bedroom 4 Bedroom Current $34.44 $43.05 $51.66 Julv 2014 $35.30 $44.13 $52.95 m 0 0 City of Galt $24.51 City of Lodi $48.86 City of Stockton $40.67 City of Manteca $43.30 City of Lathrop $59.40 City of Tracy $34.00 W 0l111lOY:l96"10 City of Sacramento $22.42 City of Lodi $48.86 City of Modesto $31.01 City of Brentwood $50.69 City of Oakland $79.53 City of San Mateo $44.10 City of Burlingame $82.47 Water Rate Structural Changes • Revenue neutral and 3 -year transition • Residential - monthly service charge and 3 -tier usage rates reduce • Non-residential and multi -family - monthly service charge and single -tier usage rate increase j Rate/Revenue Change j Single Family ■ 3 bedroom flat rate j Average use (18 CCF) ■ Non -Residential 0 Current Proposed Proposed Proposed 2014 2014 2015 2016 Re -structure water rate over three years 2.5% 3.0% 3.0% $43.04 $45.05 No Change -$1.59 Scientific Specialties $481.83 +$44.34 (2 inch meter) +$1.32 -$0.32 +$49.66 +$1.36 -$1.73 +$29.50 1. Blue Shield 2. City of Lodi 3. Cottage Bakery 4. General Mills 5. Lodi Unified 6. Lodi Memorial 7. Lustre Cal 8. Pacific Coast Producers 9. Scientific Specialties 10. Target 11. Holiday Retirement 12. Wal mart 13. Safeway 14. Miller Packing 15. Lodi Card Room 16. Archer Daniels Midland 17. Armorstruxx 18. Costco 19. Cepheid w 0 0 City of Galt $24.51 City of Lodi $43.46 City of Stockton $51.42 City of Manteca $44.64 City of Lathrop $65.56 City of Tracy $29.70 W 0l111lOY:l96"10 City of Sacramento $42.33 City of Lodi $43.46 City of Modesto $41.03 City of Brentwood $63.17 City of Oakland $65.05 City of San Mateo $99.60 City of Burlingame $127.84 MaaNaaa Dilps'st-le Item No. G-1 Exhibit B City of Lodi -- Wastewater Utility current ana rro wastewater Kates Current July 2014 Residential Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 25.83 $ 26.48 2 Bedroom $ 34.44 $ 35.30 3 Bedroom $ 43.05 $ 44.13 4 Bedroom $ 51.66 $ 52.95 5 Bedroom $ 60.27 $ 61.78 6 Bedroom $ 68.88 $ 70.60 7 Bedroom $ 77.49 $ 79.43 Mobile Homes Any Size $ 25.83 $ 26.48 Usage -Based Rates (1) Service Charge ($/month for 3/4" water meter) $ 23.52 $ 24.11 Usage Charge ($/CCF) (1) $ 2.68 $ 2.75 Non -Residential ($/month) (2) Moderate Strength (per SSU) $ 34.44 $ 35.30 High Strength Flow (per MG, annual basis) $ 3,487.41 $ 3,574.60 BOD (per 1,000 lbs, annual basis) $ 575.51 $ 589.90 SS (per 1,000 lbs, annual basis) $ 359.85 $ 368.85 Grease Interceptor & Septic Holding Tank Waste within City Limits (per 1,000 gal.) $ 304.72 $ 312.34 Septic (only) Holding Tank Waste Outside City Limits (per 1,000 gal.) $ 646.89 $ 663.06 Disposal to Storm Drain System (per MG) $ 320.09 $ 328.09 Notes: (1) Winter water usage determined as average monthly usage from December through February. (2) Flat wastewater rates for schools are to be determined on the basis of 18 students per SSU. Item No. G-1 Revised Exhibit A to Resolution Exhibit A City of Lodi -- Wastewater Utility current ana ipropus wastewater Kates Notes: (1) Winter water usage determined as average monthly usage from December through February. (2) Flat wastewater rates for schools are to be determined on the basis of 18 students per SSU. Current July 2014 Residential Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 25.83 $ 26.48 2 Bedroom $ 34.44 $ 35.30 3 Bedroom $ 43.05 $ 44.13 4 Bedroom $ 51.66 $ 52.95 5 Bedroom $ 60.27 $ 61.78 6 Bedroom $ 68.88 $ 70.60 7 Bedroom $ 77.49 $ 79.43 Mobile Homes Any Size $ 25.83 $ 26.48 Usage -Based Rates (1) Service Charge ($/month for 3/4" water meter) $ 23.52 $ 24.11 Usage Charge ($/CCF) (1) $ 2.68 $ 2.75 Non -Residential ($/month) (2) Moderate Strength (per SSU) $ 34.44 $ 35.30 High Strength Flow (per MG, annual basis) $ 3,487.41 $ 3,574.60 BOD (per 1,000 lbs, annual basis) $ 575.51 $ 589.90 SS (per 1,000 lbs, annual basis) $ 359.85 $ 368.85 Grease Interceptor & Septic Holding Tank Waste within City Limits (per 1,000 gal.) $ 304.72 $ 312.34 Septic (only) Holding Tank Waste Outside City Limits (per 1,000 gal.) $ 646.89 $ 663.06 Disposal to Storm Drain System (per MG) $ 320.09 $ 328.09 Notes: (1) Winter water usage determined as average monthly usage from December through February. (2) Flat wastewater rates for schools are to be determined on the basis of 18 students per SSU. EFF Please immediately confirm receipt of this fax by calling 333-6702 CITY OF LODI P. O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVERTISING INSTRUCTIONS SUBJECT: PUBLIC HEARING SETTING PRE -APPROVED ENGINEERING NEWS RECORD INDEX FOR WASTEWATER RATES AND RESTRUCTURED WATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS PUBLISH DATE: SATURDAY, JUNE 7, 2014 TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: LNS ACCT. #0510052 DATED: THURSDAY, JUNE 5, 2014 ORDERED BY: RANDI JOHL-OLSON CITY CLERK AA A 1, PQJ"� -QAIA� JgONIFER Mj ROBISON, CMC ASSISTANT CITY CLERK RANDI JOHL-OLSON, CITY CLERK City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 MARIA DITMORE ADMINISTRATIVE CLERK Verify Appearance of this Legal in the Newspaper — Copy to File forms\advins.doc DECLARATION OF POSTING PUBLIC HEARING SETTING PRE -APPROVED ENGINEERING NEWS RECORD INDEX FOR WASTEWATER RATES AND RESTRUCTURED WATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS On Thursday, June 5, 2014, in the City of Lodi, San Joaquin County, California, a Notice of Public Hearing setting pre -approved Engineering News Record index for wastewater rates and restructured 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 June 5, 2014, at Lodi, California. Vr ROBISON, CMC N:\Administration\CLERK\Forms\DECPOSTPW.DOC ORDERED BY: RANDI JOHL-OLSON CITY CLERK MARIA DITMORE ADMINISTRATIVE CLERK :r 's •. CITY OF LODI Carnegie Forum ' ' ; • 305 West Pine Street, Lodi NOTICE OF PUBLIC HEARING Date: July 16, 2014 Time: 7:00 p.m. For information regarding this notice please contact: Randi Johl-Olson, City Clerk Telephone: (209) 333-6702 NOTICE OF PUBLIC HEARING e NOTICE IS HEREBY GIVEN that on Wednesday, July 16, 2014, 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) Resolution setting pre -approved Engineering News Record index for wastewater rates and restructured water rates for residential, commercial, and industrial customers. 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 Clerk, City Hall, 221 West 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, 221 West Pine Street, at or prior to the close of the public hearing. ZB-Or er of the Lodi City Council: �1_01son City Clerk Dated: June 4, 2014 Approved as to form: Janice D. Magdich Interim City Attorney N:1Administration\CLERK\PubHear\NOTICES\NotPW.doc CLERK\PUBHEARWOTICES1NotPW.doc 6/3/14