HomeMy WebLinkAboutAgenda Report - December 21, 2016 G-02 PHw.
AGENDA ITEM
A� 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 21, 2016
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. A summary of the past years water rate adjustments relative
to the Engineering News Record (ENR) index change is provided in
Attachment A. The purpose of this table is to demonstrate that past actual rate increases have frequently been
below those approved.
At the July 16, 2014 public hearing, City Council approved a restructured water rate schedule to be
implemented over the three-year period from 2014 through 2016. Two principal elements of the restructuring
were a decrease in residential (3/4 -inch meter size) monthly base charge and three -tiered residential
commodity charge; and an increase in the single -tiered non-residential and multi -family commodity charge.
On May 7, 2014, City Council approved a five-year program of rate adjustments for water, wastewater and
solid waste services. For the water and wastewater utilities, the approved annual rate adjustment is the lesser
of the ENR index change or three percent. The previous year's ENR index change was 3.36 percent and staff
is recommending a water rate increase of three percent. A summary of current and proposed rates for flat rate
and usage -based rate customers is provided in Attachment B. For a resident still on the flat rate, the monthly
charge for a three-bedroom home will increase from $45.89 to $47.27 or $1.38 per month. A metered resident
using an average of 1,800 cubic feet of water per month will see an increase from $40.63 to $41.89, or $1.26
per month. The drought conditions have resulted in a downward trend in water revenue received. In
response, the City's consultant has analyzed the most current utility billing and water production data in an
effort to update the rate revenue model to reflect the impacts of water conservation and the expected increase
in water usage associated with relaxing water conservation measures.
The reduction in sales revenue due to conservation coupled with increased construction costs (primarily
associated with the Water Meter Program) is requiring the recommendation for the three percent rate increase.
As reflected in the City's Financial Plan (Attachment C), fund balances rebound substantially starting in Fiscal
Year 2019/20. This year corresponds with the completion of the City's multi-year Water Meter Program.
FISCAL IMPACT: The Water Utility is requiring increased revenue to accommodate the impacts of
conservation coupled with inflationary pressures in the construction industry
resulting from an improving economy.
K:\WP\UTILITY RATES\W W1M2u17 W WW Kate Increase\ UPH waterKates2ul t.aoc - IZ/ 1110
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
December 21, 2016
Page 2
FUNDING AVAILABLE: Not applicable.
Charles E. Swimley, Jr.
Public Works Director
Prepared by Rebecca Areida-Yadav, Public Works Management Analyst
CES/RAY/jr
Attachments
K:\WP\UTILITY RATES\W WW\2017 W WW Rate Increase\CCPR WaterRates20l7.doc 12/1/16
Attachment A
Programmed and Implemented Rate Adjustments
Water
Year
Programmed
Implemented
2009
3.10(1)
0
2010
0.73(1)
0
2011
5.98 (z)
2.0
2012
2.53 (3)
2.2
2013
2.50 (3)
2.5
2014
3.30 (3)
2.5
2015
2.00 (3)
2.0 (4)
2016
1.975(3)
1.975 (4)
2017
1 3.36 (3)
3.0 (4)
(1) Consumer Price Index change
(2) Consumer Price Index change (December 2008 through December 2010)
(3) Engineering News Record Index change
(4) Recommended by Staff
Attachment B
City of Lodi
Current and Proposed Flat Water Rates
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
(2) These are the maximum rates for each year, without a formal rate -setting process. Actual water rate
adjustments may be lower and would be tied to annual changes in the ENR index
Future Rate Ceiling (2)
Current
Proposed
Potential
Potential
(Jan.2016)
(Jan.2017)
(Jan.2018)
(Jan.2019)
Rate Increase -->
3.0%
3.0%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom
$
31.88
$
32.84
$
33.83
$
34.84
2 Bedroom
$
38.29
$
39.44
$
40.62
$
41.84
3 Bedroom
$
45.89
$
47.27
$
48.69
$
50.15
4 Bedroom
$
55.14
$
56.79
$
58.49
$
60.24
5 Bedroom
$
66.13
$
68.11
$
70.15
$
72.25
6 Bedroom
$
79.37
$
81.75
$
84.20
$
86.73
7 Bedroom
$
95.17
$
98.03
$
100.97
$
104.00
Multi -Family (1)
1 Bedroom
$
27.37
$
28.19
$
29.04
$
29.91
2 Bedroom
$
32.83
$
33.81
$
34.82
$
35.86
3 Bedroom
$
39.40
$
40.58
$
41.80
$
43.05
Mobile Homes
Any Size
$
27.37
$
28.19
$
29.04
$
29.91
Non -Residential
Existing unmetered
Varies
+3.0%
+3.0%
+3.0%
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
(2) These are the maximum rates for each year, without a formal rate -setting process. Actual water rate
adjustments may be lower and would be tied to annual changes in the ENR index
City of Lodi
Current and Proposed Usage -Based Water Rates
Future Rate Ceiling (2)
Current
Proposed
Potential
Potential
(Jan.2016)
(Jan.2017)
(Jan.2018)
(Jan.2019)
Rate Increase -->
3.0%
3.0%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family
Up to 3/4" meter
$
21.23
$
21.87
$
22.53
$
23.21
1" meter
$
33.34
$
34.34
$
35.37
$
36.43
1 1/2" meter
$
63.35
$
65.25
$
67.21
$
69.23
2" meter
$
99.53
$
102.52
$
105.60
$
108.77
Multi -Family and Non -Residential
(1)
Up to 3/4" meter
$
21.23
$
21.87
$
22.53
$
23.21
1" meter
$
33.34
$
34.34
$
35.37
$
36.43
1 1/2" meter
$
63.35
$
65.25
$
67.21
$
69.23
2" meter
$
99.53
$
102.52
$
105.60
$
108.77
3" meter
$
183.98
$
189.50
$
195.19
$
201.05
4" meter
$
304.59
$
313.73
$
323.14
$
332.83
6" meter
$
605.85
$
624.03
$
642.75
$
662.03
8" meter
$
967.52
$
996.55
$
1,026.45
$
1,057.24
10" meter
$ 1,389.57
$
1,431.26
$
1,474.20
$
1,518.43
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF)
$
0.94
$
0.97
$
1.00
$
1.03
Tier 2 (11-50 CCF)
$
1.25
$
1.29
$
1.33
$
1.37
Tier 3 (>50 CCF)
$
1.55
$
1.60
$
1.65
$
1.70
Multi -Family and Non -Residential
(1)
All water usage
$
1.12
$
1.15
$
1.18
$
1.22
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) These are the maximum rates for each year, without a formal rate -setting process. Actual water rate
adjustments may be lower and would be tied to annual changes in the ENR index
Beginning Balance
Revenues
Water Sales
Interest Earnings
Other Revenues
Transfer From/(To) RSF (18x)
Transfer from Fund 182 for Debt Service
Total Revenues
Expenditures
Transfer Out to General Fund (Cost of Services)
Transfer Out to Capital Fund 181 for projects
To Capital Fund 181 (Depreciation)
Personnel Services
Utilities
Supplies, Mat'ls., Services & Other
Debt Service
1991 CSDW Loan Payments
Net 2010 Rev. Bond Payments
Total Expenditures
Ending Balance
Operating Reserve (25%)
Available Balance
Debt Service Coverage (min. 1.25)
Beginning Balance
Revenues
Operating Transfers In
Interest Earnings
Loan Repayment from EUD (City Hall Annex)
DBCP Reimbursements
Retrofit Meter Install. Charge
Debt Proceeds
Total Revenues
City of Lodi -- Water Utility
Financial Plan Summary
FY 15-16
FY 16-17
FY 17-18
FY 18-19
FY 19-20
FY 20-21
1.975%
3.0%
3.0%
3.0%
3.0%
3.0%
Jan. 2016
Jan. 2017
Jan. 2018
Jan. 2019
3an.2020
Jan. 2021
5,972,949
4,551,353
3,742,272
1,198,661
595,550
2,618,839
12,161,186
12,867,000
13,493,000
14,246,000
14,869,000
15,199,000
123,397
82,000
49,000
22,000
40,000
117,000
114,712
39,000
40,000
41,000
42,000
43,000
-
109,000
109,000
109,000
286,000
286,000
12, 399,294
13,097,000
13,691,000
14,418,000
15,237,000
15,645,000
780,000
780,000
780,000
780,000
780,000
780,000
4,750,000
3,850,000
6,000,000
4,550,000
2,500,000
500,000
2,659,000
2,761,000
2,854,000
2,951,000
3,051,000
3,123,000
496,000
762,000
794,000
828,000
863,000
892,000
2,781,000
3,400,000
3,501,000
3,605,000
3,712,000
3,800,000
2,354,890
2,353,080
2,305,611
2,307,111
2,307,711
2,305,911
13,820,890
13,906,080
16, 234,611
15,021,111
13,213,711
11,400,911
4,551,353
3,742,272
1,198,661
595,550
2,618,839
6,862,928
1,679,000
1,926,000
1,982,000
2,041,000
2,102,000
2,149,000
2,872,353
1,816,272
(783,339)
(1,445,450)
516,839
4,713,928
2.61
2.41
2.86
2.82
3.07
3.10
735,242
1,447,432
303,597
146,621
81,621
126,621
4,750,000
3,850,000
6,000,000
4,550,000
2,500,000
500,000
41,500
15,000
(4,000)
-
(1,000)
1,000
-
-
585,024
-
-
-
249,231
251,000
252,000
254,000
256,000
78,000
5,040,731
4,116,000
6,833,024
4,804,000
2,755,000
579,000
FY 15-16
FY 16-17
FY 17-18
FY 18-19
FY 19-20
FY 20-21
Expenditures
Loan to EUD (City Hall Annex)
-
-
-
-
-
Water Meter/Main Install. Project
4,017,000
4,296,000
5,634,000
3,967,000
-
-
Water Taps
1,000
77,000
80,000
82,000
84,000
87,000
Miscellaneous Water Mains
-
52,000
53,000
55,000
56,000
58,000
GAC & Meter Repl (DBCP)
272
300,000
300,000
300,000
300,000
-
Meter Shop Design
_
50,000
200,000
-
-
-
Southwest Gateway Water Tank
-
-
-
-
2,000,000
-
Surface Water Treatment Plant PS Generator
-
-
300,000
-
-
-
Finance Security Cameras
-
30,000
-
-
-
Info Systems Data Center
214,165
-Lodi
Lake Boat Launch
29,319
-
Well 10C
9,512
110,488
-
-
-
Well 3 & 1OR Abandonment
9,652
55,348
-
-
-
Well 14 -Pump Rehab/Rept
-
-
176,000
-
-
Well 15 -Pump Rehab/Rep[
_
-
186,000
-
-
Well 16 -Pump Rehab/Electrical Upgrade
-
-
-
219,000
-
Well 17 -Pump Rehab/Electrical Upgrade
-
-
202,000
Well 21
-
-
-
-
225,000
Well 22
-
155,000
-
-
Well 23
-
-
-
-
-
214,000
Well 24 - Pump Rehab & Electrical Upgrade
-
-
-
-
Well 25
-
-
-
232,000
Vehicles/Equipment
47,619
134,000
61 000
441090
45&000
461000.
Total Expenditures
4,328,540
5,259,835
6,990,000
4,869,000
2,710,000
637,000
Ending Balance
11447L432
303,597
146621
81. 631
136.621
68,621
IMF WATER FACILITIES (562)
Beginning Balance
164,051
330,561
337,561
344,561
353,561
362,561
Revenues
Water Impact Mitigation Fees
165,098
109,000
109,000
109,000
286,000
286,000
Interest Earnings
.1 ,411
7,000
7,000
21,000
9,000
9,000.
Total Revenues
166,510
116,000
116,000
118,000
295,000
295,000
Expenditures
Transfer to Fund 181 for Well 27
-
--
-
-
-
-
Transfer to Operations Fund 180 for Debt Service
-
109,000
109.000
109,00()
286 000
286,000
Total Expenditures
-
109,000
109,000
109,000
286,000
286,000
Ending Balance
330,561
337,561
344,561
353,561
362,561
371,561
Owed Fund 180 for Debt Service
5,737,000
6,587,000
7,382,000
8,158,000
8,,7374000
9,295,000
FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21
City of Lodi -- Water Utility
Financial Plan Assumptions
Aggregate End -of -Year Balance *
7,859,000
5,913,000
3,220,000
2,561,000
4,638,000
8,833,000
Operating Reserve (25%)
1,679,000
1,926,000
1,982,000
2,041,000
2,102,000
2,149,000
Restricted DS Reserve
1,530,000
1,530,000
1,530,000
1,530,000
1,530,000
1,530,000
2010 COP Proceeds
-
-
-
-
-
-
Rate Stabilization Fund
-
-
-
-
-
-
Net Available for Capital Projects
4,650,000
2,457,000
(292,000)_
(1,010,000)
1,006,000
5,154,000
City of Lodi -- Water Utility
Financial Plan Assumptions
Financia/ 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
2.0%
3.0%
3.0%
3.0%
3.0%
3.0%
Interest Earnings
2.0%
2.0%
2.0%
2.5%
2.5%
2.5%
Customer Account Assumptions
No. of DUs/Accounts
23,606
23,656
23,706
23,756
23,806
23,856
No. of 3/4" Eq. Mtrs.
25,654
25,704
25,754
25,804
25,854
25,904
No. of New Connections
50
50
50
50
50
50
Customer Growth Rate
0.19%
0.19%
0.19%
0.19%
0.19%
0.19%
Water Mitigation Impact Fee
$
5,710 $
5,710
Residential $ 1,263 $
1,263 $
1,263 $
1,263
Non -Residential 3,103
3,103
3,103
3,103
Engineering
10
Public Hearing
Water Rates
Agenda Item G-2
December 21, 2016
LM
Water Rate Setting
• May 2014 - Council Adopted Five -Year Schedule
of Rate Adjustments
• ENR Index or Maximum Three Percent
• Proposition 218 Procedure Affirmed Schedule
• Financial Model Used to Analyze Rate Changes
Recommendation
• January 2017 - 3.0 Percent Increase
• Proposition 218 - 3.0 Percent Maximum
• 2016 ENR Index Change - 3.36 Percent
17,000
16,000
15,000
N
N
14,000
N
i
U
Q
13,000
12,000
11,000
10,000
Water Production
2010 2011 2012 2013 2014 2015 2016
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
Water Operating Balances
FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21
Ending Balance with Rate
Increase
Operating Reserve (25%)
(Ending Balance w/out Rate
Increase
Water Meter Program Status
• Metered residential customers
• 80% Single-family residential as of January 1, 2017
• 13,500 meters
• Residential meters installed (incl. Phase 6)
• 87% Single-family residential
• 14,400 meters
• Flat -rate single-family residential customers
• 3,000 as of January 1, 2017
2011
5.98
5.98*
2.0
2012
2.53
2.53
2.2
2013
2.5
2.5
2.5
2014
3.3
3.3
2.5
2015
3.0
2.0
2.0
2016
3.0
1.975
1.975
2017
3.0
3.36
3.0
Recommended Water Flat Rates
INEWO
Fixed 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 (>34,000 gals/month)
iC�iI11/Ciia'%iiI:
$21.23 $21.87
$0.00126/gal $0.00130/gal
$0.00167/gal $0.00172/gal
$0.00207/gal $0.00214/gal
Increase Amounts
Flat -Rate - 3 Bedroom Home
— Currently
— January 1St
— Difference
$45.89 /Month
$47.27 /Month
$ 1.38 /Month
• Metered Rate — (1,800 CF / Month)
— Currently
— January 1St
— Difference
$40.63 /Month
$41.89 /Month
$ 1.26 /Month
Kate Comparisons - La
City of Tracy $29.70
City of Galt $34.64
City of Lodi $41.89
City of Manteca $44.64
City of Stockton $69.31
City of Lathrop $80.71
Rate Comparisons - Rea-Ic
City of Lodi
City of Modesto
City of Sacramento
City of Brentwood
City of Oakland
City of Burlingame
City of San Mateo
$41.89
$45.99
$46.57
$63.60
$102.83
$123.16
$132.25
f f f f f f ! f f !
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Duestic
xlliete
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 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
PUBLISH DATE: SATURDAY, NOVEMBER 19, 2016
IVA I
TEAR SHEETS WANTED: One (1) P12M
SEND AFFIDAVIT AND BILL TO: JENNIFER M. FERRAIOLO, CITY CLERK
LNS ACCT. #0510052 City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
DATED: WEDNESDAY, NOVEMBER 16, 2016
ORDERED BY: JENNIFER M. FERRAIOLO
CITY CLERK
PAMELA M. FARRI
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.com at. AA50(O_me on (d �G I
$ Phoned to confirm receipt`of all'p8gee at irtte� �'MF QLa
forms\advins.doc
DECLARATION OF POSING
NOTICE OF 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
On Wednesday, November 16, 2016, in the City of Lodi, San Joaquin County,
California, a copy of a Notice of 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 (attached hereto,
marked Exhibit "A") was posted at the following four 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 November 16, 2016, at Lodi, California.
I
PAMELA M. FARRIS
DEPUTY CITY CLERK
ORDERED BY:
JENNIFER M. FERRAIOLO
CITY CLERK
ELIZABETH BURGOS
ADMINISTRATIVE CLERK
NA\Administration\CLERK\Public Hearings\AFFADAVITS\DECPOST3.DOC
CITY OF LODI
Carnegie Forum
305 West Pine Street, Lodi
NOTICE OF PUBLIC HEARING
Date: December 21, 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
Ex�;sor a
NOTICE IS HEREBY GIVEN that on Wednesday, December 21, 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) 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, (20.9) 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, e
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:
gnifeI!�
Ferrmiolo
r
Clerk
Dated: November 15, 2016
Appr?Xedas to form:
QD0e.
M Bichey
AVISO: Para obtener ayuda interpretativa con esta noticia, por favor [lame a la oficina de la
Secretaria Municipal,.a las (209) 333-6702.
J:CLERK\PUBLICHEARING\NOTICES\PH NOTICE publication waterKates.aoc 1111u"0
Exhibit A
City of Lodi
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
(2) These are the maximum rates for each year, without a formal rate -setting process. Actual water rate
adjustments may be lower and would be tied to annual changes in the ENR index
City of Lodi
Current and Proposed Usage -Based Water Rates
Future Rate Ceiling (2)
Current Proposed Potential Potential
Jan: x018. Jan. 2011 Jan. 2018 J m 2019.'
Rata Increase --> 3.0%. 1 3.0% 3.Oye
USAGE -BASED RATES
Monthly Service Charge
Sin ie Family
Up to 314" metes S 21.23 $ 21:87 $ 22 53. 23.21
1" meter $ 'A3,34- 34.34 35.37 1 S 38.43
1 112" meter $ 03.351 $ 65.25 6721 $ 8 23
Up to 3tf :meter 9
21:23
21.87
22.53
7321
1" meter 4
33.34.
$
34.34 $
35.37. S
36.43.
11&2" motor
63.35
6825
67.21.
139:23
2" meter
99-63
102.52.
105.60 $
108.77
3" mBteP
183.96.
$
189.50
195.19
201:05:•
,V meter
30..q.59
313.73
323.14
332.83
6" meter
80585
S'
624.0& S.
642.75
662.8
8" MetOr $
967.52
996.55
1,025-45.1
.1 ,057.24
1011meter
1 389.57
S
7431.26
11474.213
1 518.4
Usage Rates ($/CCF)
s e Irl
tier 1 0.10 CC $
0:94
0.97
1.00
1.03
110T2 f11-50 COB S'
1:25
$.
1.29 $.
1.33
1.37
Wl water e1 $ 1.12 1.15 1.181 1.22
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) These are the maximum rates for each year, without a formal rate -setting process. Actual water rate
adjustments may be lower and would be tied to annual changes in the ENR index