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Home My WebLink AboutAgenda Report - May 4, 2016 C-22 PHAGENDA ITEM c-22 CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Set Public Hearing for June 1, 2016, to Consider Adopting Resolution Setting Pre -Approved Engineering News Record Adjustment Index for Wastewater Rates for Residential, Commercial, and Industrial Customers MEETING DATE: May 4, 2016 PREPARED BY: Public Works Director RECOMMENDED ACTION: Set public hearing for June 1, 2016, to consider adopting resolution setting pre -approved Engineering News Record adjustment index for wastewater rates for residential, commercial, and industrial customers. BACKGROUND INFORMATION: On May 7, 2014, City Council approved a program of future wastewater and water rate increases using an Engineering News Record — 20 Cities Average (ENR) based indexing, capped at 3 percent maximum. 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, 2016. The rates for this next year, attached as Exhibit B, reflect an increase of 2.5 percent, which is lower than both the 3 percent capped maximum and the ENR of 2.7 percent. The recent refinancing of the City's wastewater revenue bonds saved the wastewater utility approximately $200,000 per year in annual debt service and this savings is reflected in the Financial Plan. The table below reflects the history and future cap on wastewater rate adjustments. July 2012 July 2013 July 2014 July 2015 July 2016 July 2017 July 2018 Cap ENR Index Approved/ Recommended 5.0% 2.9% 3.0% 2.8% 2.8% 2.5% 3.0% 2.6% 2.5% 3.0% 2.8% 2.8% 3.0% 2.7% 2.5% 3.0% 3.0% FISCAL IMPACT: Increased revenues to the wastewater utility are required to keep up with cost of service increases and new mandated costs. FUNDING AVAILABLE: Not applicable. Charles E. Swimley, Jr. Public Works Director CES/RAY/tdb Attachments cc: Information Systems Manager APPROVED:IT ephen Schwab uer, City Manager K:\WP\UTILITY RATES\W_WW\2016 W WW Rate Increase\CCSet WW Rates 2016.doc 4/25/16 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 2004 Wastewater COP Debt Service 2007 Wastewater COP Debt Service 2012 Wastewater Refinancing 2016 Refinancing Total Expenditures Ending Balance Operating Reserve (25%) Available Balance Debt Service Coverage (min. = 1.20) without COST MINVIMI _ Beginning Balance Revenues Transfer In (from 170) Prop 84 Grant Other Revenue Total Revenues FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 2.8% 5,147,787 2.5% 9,332,062 2.5% 9,545,153 2% 2,772,753 2% 6,515,953 2% 8,854,853 15,006,000 15,411,000 15,827,000 16,175,000 16,530,000 16,893,000 56,000 98,000 100,000 33,000 70,000 94,000 270,300 273,900 282,600 291,400 300,300 309,400 25,000 367,111 22,000 22,000 22,000 22,000 9,000 149,000 150,000 150,000 150,000 422,000 15,366,300 16, 299, 011 16, 381, 600 16, 671,400 17,072,300 17, 740,400 1,068,000 1,068,000 1,068,000 1,068,000 1,068,000 1,068,000 - 4,850,000 11,250,000 750,000 2,250,000 250,000 1,261,685 1,332,740 1,382,000 1,434,200 1,488,400 1,544,600 4,116,440 4,675,340 4,864,000 5,060,000 5,264,000 5,476,000 542,540 629,650 653,000 677,000 703,000 729,000 511,600 455,000 475,000 497,000 520,000 544,000 15,760 12,190 13,000 13,000 13,000 13,000 98,000 98,000 98,000 98,000 98,000 98,000 1,607,000 544,000 553,000 423,000 421,000 458,000 1,961,000 1,947, 000 1,949,000 1,949,000 1,951,000 1,946,000 - 474,000 849,000 959,000 957,000 959,000 11,182,025 16,085,920 23,154,000 12,928,200 14,733,400 13,085,600 9,332,062 9,545,153 2,772,753 6,515,953 8,854,853 13,509,653. 2,305,000 2,204,000 2,277,000 2,318,000 2,394,000 2,483,000 7,027,062 7,341,153 495,753 4,197,953 6,460,853 11,026,653 2.18 3.01 3.05 3.21 3.36 3.35 2.47 3.42 3.46 3.64 3.79 3.78 6,015,626 2,561,390 82,818 48,747 441,176 414,176 - 4,850,000 11,250,000 750,000 2,250,000 250,000 562,500 2,250,000 1,762,500 - - - 96,429 96,429 96,429 96,429 - - 658,929 7,196,429 13,108,929 846,429 2,250,000 250,000 DRAFT -- 4/19/2016 Expenditures MSC Security Improvements Finance Security Cameras Info Systems Data Center Misc. System Relocations Misc. Wastewater Taps Collect. System Capac. Enhanc. Projects Wastewater Main Replac./Lining Proj. Henry Glaves Park Pump Station Storm Drain Improvements Pumps Storm Drain Trash Handling System Shady Acres Pump Vinewood Storm Water Pump Rehab Lodi Lake Outfall Line Realignment of Domestic & Industrial pipe Domestic Trunk Assessment and Rehab Vehicles /Equipment Plant Maintenance Structural Corrosion Repair Cloth Filter Media Replacement Electrical/Screen/SCADA Design Electrical Upgrades/SCADA Construction White Slough Recycled Water Storage Admin/Ops Building Improvements Fence Repairs/Upgrades Miscellaneous Future Projects Total Expenditures Ending Balance 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 Cash Deficit (amt. owed for past DS) FY 15-16 1 FY 16-17 1 FY 17-18 1 FY 18-19 1 FY 19-20 1. FY 20-21 - 25,000 - - - - 30,000 - - - - 214,165 - - - - - 35,000 36,000 38,000 39,000 41,000 40,000 40,000 42,000 43,000 45,000 47,000 - 20,000 104,000 22,000 225,000 - - - 54,000 1,687,000 - 70,000 - - - - - 380,000 - - - - - 200,000 - - - 400,000 - - - - 200,000 - - - - - - 200,000 - - - - 100,000 - - - - - 600,000 - - - - - 100,000 2,000,000 - - - 760,000 195,000 156,000 162,000 169,000 175,000 400,000 - - - - - - 1,750,000 - - - - 30,000 - 31,000 - - 500,000 500,000 - - - - - 3,100,000 8,320,000 - - - 750,000 3,000,000 2,350,000 - - - 24,000 - - - - - 25,000 - - 27,000 - - 100,000 104,000 108,000 112,000 117,000 4,113,165 9,675,000 13,143,000 454,000 2,277,000 380,000 2,561,390 82,818 48,747 441,176 414,176 284,176 2,511,962 2,511,962 2,169,851 2,169,851 2,169,851 2,169,851 25,000 25,000 22,000 22,000 22,000 22,000. 25,000 25,000 22,000 22,000 22,000 22,000 25,000 367,111 22,000 22,000 22,000 22,000 25,000 367,111 22,000 22,000 22,000 22,000 2,511,962 2,169,851 2,169,851 2,169,851 2,169,851 2,169,851 2,169, 851 2,169,851 2,169,851 2,169,851 2,169,851 2,169,851 DRAFT -- 4/19/2016 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 15-16 8,857 FY 16-17 148,857 FY 17-18 149,857 FY 18-19 149,857 FY 19-20 1 FY 20-21 149,857 421,857 149,000 149,000 149,000 149,000 421,000 438,000 - 1,000 1,000 1,000 1,000 4,000 149,000 150,000 150,000 150,000 422,000 442,000 9,000 149,000 150,000 150,000 150,000 422,000 9,000 149,000 150,000 150,000 150,000 422,000 148,857 149,857 149,857 149,857 421,857 441,857 4,092,000 4,285,000 4,482,000 4,603,000 4,723,000 4,593,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Aggregate End -of -Year Balance 15,054,000 12,448,000 5,641,000 9,777,000 12,361,000 16,906,000 Operating Reserve (25%) 2,305,000 2,204,000 2,277,000 2,318,000 2,394,000 2,483,000 Restricted DS Reserve 2,169,851 2,169,851 2,169,851 2,169,851 2,169,851 2,169,851 Rate Stabilization Fund 500,000 500,000 500,000 500,000 500,000 500,000 Net Available for Capital Projects 10,079,149 7,574,149 694,149 4,789,149 7,297,149 11,753,149 Financial Plan Assumptions FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 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 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Interest Earnings 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Cust. Growth (SSUs) 50 50 50 50 50 50 Wastewater Mitigation Impact Fee $ 8,420 $ 8,760 Residential 3/4" $ 1,720 $ 1,720 $ 1,720 $ 1,720 Non -Residential 3/4" 4,225 4.,225 4,225 4,225 DRAFT -- 4/19/2 .16 Exhibit B City of Lodi -- Wastewater Utility Lurrenz ana rroposea wastewater nates Current July 2015 Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 27.22 $ 27.90 2 Bedroom $ 36.29 $ 37.20 3 Bedroom $ 45.36 $ 46.49 4 Bedroom $ 54.43 $ 55.79 5 Bedroom $ 63.51 $ 65.10 6 Bedroom $ 72.58 $ 74.39 7 Bedroom $ 81.65 $ 83.69 Mobile Homes Any Size $ 27.22 $ 27.90 Schools 18 Students per SSU $ 35.30 $ 36.18 Usage -Based Rates (1) Monthly Usage Charge ($/CCF) (1) $ 2.82 $ 2.89 3/4" Meter Charge per month $ 24.78 $ 25.40 1" Meter Charge per month $ 39.92 $ 40.92 1 1/2" Meter Charge per month $ 77.13 $ 79.06 2" Meter Charge per month $ 121.30 $ 124.33 3" Meter Charge per month $ 226.62 $ 232.29 4" Meter Charge per month $ 376.12 $ 385.52 6" Meter Charge per month $ 749.54 $ 768.28 8" Meter Charge per month $ 1,197.81 $ 1,227.76 Notes: (1) Winter water usage determined as average monthly usage from December through February. C4w 22 Exhibit B City of Lodi -- Wastewater Utility Current and Proposed wastewater Rates Current Julv 2016 Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 27.22 $ 27.90 2 Bedroom $ 36.29 $ 37.20 3 Bedroom $ 45.36 $ 46.49 4 Bedroom $ 54.43 $ 55.79 5 Bedroom $ 63.51 $ 65.10 6 Bedroom $ 72.58 $ 74.39 7 Bedroom $ 81.65 $ 83.69 Mobile Homes Any Size $ 27.22 $ 27.90 Schools 18 Students per SSU $ 35.30 $ 36.18 Usage -Based Rates (1) Monthly Usage Charge ($/CCF) (1) $ 2.82 $ 2.89 3/4" Meter Charge per month $ 24.78 $ 25.40 1" Meter Charge per month $ 39.92 $ 40.92 1 1/2" Meter Charge per month $ 77.13 $ 79.06 2" Meter Charge per month $ 121.30 $ 124.33 3" Meter Charge per month $ 226.62 $ 232.29 4" Meter Charge per month $ 376.12 $ 385.52 6" Meter Charge per month $ 749.54 $ 768.28 8" Meter Charge per month $ 1,197.81 $ 1,227.76 Notes: (1) Winter water usage determined as average monthly usage from December through February. 'lease immediately confirm receipt of thisf ax by calling 333-6702 CITY OF LODI P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVERTYSMG WSTRUCTXO�TS SUBJECT: PUBLIC HEARING TO CONSIDER ADOPTING RESOLUTION SETTING PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR WASTEWATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS PUBLISH DATE: SATURDAY, MAY 7, 2016 TEAR SHEETS WANTED: 0"s 1PIIM SEND AFFIDAVIT AND BILL TO: LNS ACCT. #0510052 DATED: THURSDAY, MAY 5, 2016 JENNIFER M. FERRAIOLO, CITY CLERK City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK PAMELA M. FARRIS DEPUTY CITY CLERK ELIZABETH BURGOS ADMINISTRATIVE CLERK Verify Appearance of this Legal in the Newspaper — Copy to File Emailed to the Sentinel at dianer@lodinews.corn atitlrrre) an; dated (pages) LNS Phoned to confirm (eDeipf of all. ppa" at (timet � 8 F {iriWia) forms\advins.doc DECLARATION OF POSTING PUBLIC HEARING TO CONSIDER RESOLUTION SETTING PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR WASTEWATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS On Thursday, May 5, 2016, in the City of Lodi, San Joaquin County, California, a Notice of Public Hearing for discussion of the Community Development Block Grant program (attached and marked as Exhibit A), was posted at the following locations: Lodi City Clerk's Office Lodi City Hall Lobby Lodi Carnegie Forum WorkNet Office I declare under penalty of perjury that the foregoing is true and correct. Executed on May 5, 2016, at Lodi, California. PAMELA M. FARRIS DEPUTY CITY CLERK NAAdministration\CLERKTublic Hearings\AFFADAVITS\DEMST.DOC ORDERED BY: JENNIFER M. FERRAIOLO CITY CLERK ELIZABETH BURGOS ADMINISTRATIVE CLERK ' •. CITY OF LODI Carnegie Forum 305 West Pine Street, Lodi NOTICE OF PUBLIC HEARING Date: June 1, 2016 Time: 7:00 p.m. For information regarding this notice please contact: Jennifer M. Ferraiolo City Clerk Telephone: (209) 333-6702 NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on Wednesday, June 1, 2016, 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 adjustment index for wastewater 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 Clerk, 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. By Order of the Lodi City Council: nifer M. rraialo ity Clerk Dated: May 4, 2016 Ap oved as to form: i . Magdich City Attorney JACITYCLRKWORMSIPH NOTICE publication WWRates doc 4/28/16 Exhibit A City of Lodi -- Wastewater Utility Current ana rroposea wastewater RaLCs Current 7ttiv 2016 Percent Increase 2.5 Flat Rates ($/month) 1 Bedroom $ 27.22 $ 27.90 2 Bedroom $ 36.29 $ 37.20 3 Bedroom $ 45.36 $ 46.49 4 Bedroom $ 54.43 $ 55.79 5 Bedroom $ 63.51 $ 65.10 6 Bedroom $ 72.58 $ 74.39 7 Bedroom $ 81.65 $ 83.69 Mobile Homes Any Size $ 27.22 $ 27.90 Schools 18 Students per SSU $ 35.30 $ 36.18 Usage -Based Rates (1) Monthly Usage Charge ($/CCF) (1) $ 2.82 $ 2.89 3/4" Meter Charge per month $ 24.78 $ 25.40 1" Meter Charge per month $ 39.92 $ 40.92 1 1/2" Meter Charge per month $ 77.13 $ 79.06 2" Meter Charge per month $ 121.30 $ 124.33 3" Meter Charge per month $ 226.62 $ 232.29 4" Meter Charge per month $ 376.12 $ 385.52 6" Meter Charge per month $ 749.54 $ 768.28 8" Meter Charge per month $ 1,197.81 $ 1,227.76 Notes: (1) Winter water usage determined as average monthly usage from December through February.