HomeMy WebLinkAboutAgenda Report - March 20, 2019 G-02 PHTM
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA ITEM
G-
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: March 20, 2019
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 several years. On March 20, 2019, a public hearing will
be held asking City Council to consider approving a five-year
program of rate adjustments for water, wastewater, and solid waste services, in accordance with the
Proposition 218 rate setting process. The proposed rate adjustments are needed to generate
sufficient revenue to meet ongoing operation and maintenance costs and debt service obligations, as
well as, necessary capital maintenance improvements.
For the water and wastewater utilities, the annual rate adjustment, if approved, is the lesser of the
Engineering News Record (ENR) index change or three percent, with the exception of the proposed
January 1, 2021 water rate adjustment that includes a projected 8.4 percent decrease, to January 1,
2016 levels. A summary of the past years' water rate adjustments relative to the ENR index change is
provided in Attachment A. The purpose of this table is to demonstrate that, due to sound financial
management, past actual rate increases have frequently been below the approved maximum. On
January 17, 2018, Council voted to reject Staff's recommendation to implement a three percent
increase in water rates. This decision resulted in postponing Phase 8 of the Water Meter Program
(WMP). Water rates have not been increased since March 1, 2017.
The previous year's ENR index change was 2.90 percent. In response to the anticipated downward trend
in Water Fund balance, staff is recommending a water rate increase of 2.9 percent. A substantial portion
of the costs to operate the water utility are fixed since Lodi buys only a fraction of its water supply. The
bulk of the fixed costs are related to the debt service associated with constructing the water treatment
plant and fixed costs to maintain the well production and delivery system. As such, conservation does not
reduce fixed operation costs. While a 2.9 percent increase, if approved, will allow for the planned
construction of WMP Phase 8 over Fiscal Years 2018/19 and 2019/20, it is expected the utility fund
balance will dip below the minimum reserve target of 25 percent by $492,256 in Fiscal Year 2019/20. In
subsequent years, fund balances will recover and remain above the 25 percent minimum reserve target
(Attachment B). This short-term financial condition is tolerable because of the overall good condition of
the water system, and a minimum fund balance of $2,300,244 in Fiscal Year 2019/20 is available to
account for unforeseen conditions that may be experienced by the utility. All debt service coverage
requirements are being met during this period.
er, City Manager
K:\WP\UTILITY RATES \W WW\2019 WWW Rate Increase \CCPR WaterRates2019.doc 3/11/2019
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
March 20, 2019
Page 2
A summary of current and proposed rates for flat rate and usage -based rate customers is provided in
Attachment C. The attachment includes the rate sunset scheduled in January of 2021 that will role
water rates back to January 1, 2016 levels. This action was directed by Council at the February 15,
2017 meeting. For a resident still on the flat rate, the monthly charge for a three-bedroom home will
increase from $47.27 to $48.64, or $1.37 per month. A metered resident using an average of 1,500
cubic feet of water per month will see an increase from $38.02 to $39.15, or $1.13 per month.
As reflected in the City's Financial Plan (Attachment D), fund balances steadily rebound toward the
maximum reserve target of 50 percent starting in Fiscal Year 2020/21, as large WMP expenditures
are no longer needed. This year corresponds with the rate sunset, as reflected in Resolution No.
2017-23 (Attachment E), and completion of the City's multi-year residential WMP.
FISCAL IMPACT:
The Water Utility is requiring increased revenue to fund the remaining
phases of the WMP and to minimize declining fund balances until the
WMP is complete.
FUNDING AVAILABLE: Not applicable.
Charles E. Swimley, Jr.
Public Works Director
Prepared by Rebecca Areida-Yadav, Public Works Management Analyst
CES/RAY/tdb
Attachments
K:\WP\UTILITY RATES\W WW\2019 W WW Rate Increase\CCPH WaterRates2019 doc 3/11/2019
Attachment A
Programmed and Implemented Rate Adjustments
Water
Year
Programmed
Implemented
2009
3.10 (1)
0
2010
0.73 (1)
0
2011
5.98 (2)
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
3.36 (3)
3.0 (4)
2018
3.98 (3)
0 (5)
2019
2.90 (3)
2.90 (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
(5) Implemented by Council
City of Lodi
Water System Financial Plan Summary
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
Oper. & Maint. Costs
Debt Service Costs Capital Prog. Transfer Proposed Revenues
Current Revenues Ending Balance
— — Target Oper. Reserve --- Min. Oper. Reserve
f
1
1
FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
The Reed Group, Inc.
DRAFT — 2/11/2019
Attachment C
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
*Pending a Prop 218 approval
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
Future Rate Ceiling (2)
Current Proposed*
(Jan. 2017) (April 2019)
Potential
(Jan. 2020)
Sunset Rates
(Jan. 2021) (3)
Rate Increase --> 2.9%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom $ 32.84 $ 33.79
$ 34.80
$ 31.88
2 Bedroom $ 39.44 $ 40.58
$ 41.80
$ 38.29
3 Bedroom $ 47.27 $ 48.64
$ 50.10
$ 45.89
4 Bedroom $ 56.79 $ 58.44
$ 60.19
$ 55.14
5 Bedroom $ 68.11 $ 70.09
$ 72.19
$ 68.11
6 Bedroom $ 81.75 $ 84.12
$ 86.64
$ 81.75
7 Bedroom $ 98.03 $ 100.87
$ 103.90
$ 98.03
Multi -Family (1)
1 Bedroom $ 28.19 $ 29.01
$ 29.88
$ 27.37
2 Bedroom $ 33.81 $ 34.79
$ 35.83
$ 32.82
3 Bedroom $ 40.58 $ 41.76
$ 43.01
$ 39.40
Mobile Homes
Any Size $ 28.19 $ 29.01
$ 29.88
$ 27.37
Non -Residential
Existing unmetered Varies +2.9%
+3.0%
Varies
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
*Pending a Prop 218 approval
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
City of Lodi
Current and Proposed Usage -Based Water Rates
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
*Pending a Prop 218 approval
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
Future Rate Ceiling (2)
Current Proposed*
(Jan. 2017) (April 2019)
Potential
(Jan. 2020)
Sunset Rates
(Jan. 2021) (3)
Rate Increase --> 2.9%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family
Up to 3/4" meter $ 21.87 $ 22.50
$ 23.18
$ 21.23
1" meter $ 34.34 $ 35.34
$ 36.40
$ 33.34
1 1/2" meter $ 65.25 $ 67.14
$ 69.15
$ 63.34
2" meter $ 102.52 $ 105.49
$ 108.65
$ 99.53
Multi -Family and Non -Residential (1)
Up to 3/4" meter $ 21.87 $ 22.50
$ 23.18
$ 21.23
1" meter $ 34.34 $ 35.34
$ 36.40
$ 33.34
1 1/2" meter $ 65.25 $ 67.14
$ 69.15
$ 63.34
2" meter $ 102.52 $ 105.49
$ 108.65
$ 99.53
3" meter $ 189.50 $ 195.00
$ 200.85
$ 183.98
4" meter $ 313.73 $ 322.83
$ 332.51
$ 304.59
6" meter $ 624.03 $ 642.13
$ 661.39
$ 605.85
8" meter $ 996.55 $ 1,025.45
$ 1,056.21
$ 967.52
10" meter $ 1,431.26 $ 1,472.77
$ 1,516.95
$ 1,389.57
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF) $ 0.97 $ 1.00
$ 1.03
$ 0.94
Tier 2 (11-50 CCF) $ 1.29 $ 1.33
$ 1.37
$ 1.25
Tier 3 (>50 CCF) $ 1.60 $ 1.65
$ 1.70
$ 1.56
Multi -Family and Non -Residential (1)
All water usage $ 1.15 $ 1.18
$ 1.22
$ 1.12
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
*Pending a Prop 218 approval
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
City of Lodi
Water System Financial Plan
FY 17-18
FY 18-19 FY 19-20
FY 20-21 FY 21-22
FY 22-23 FY 23-24
FY 24-25 FY 25-26
FY 26-27 FY 27-28
FY 28-29 FY 29-30
Rate Adjustments --> 2.9% 3.0% -8.4% 3.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
April January January January January January January January January January January January
WATER OPERATING FUND (FUND 560) -8.4%
Beginning Balance $ 3,597,764 $ 3,226,236 $5,299,000 $2,300,200 $3,218,900 $3,661,100 $4,368,900 $6,178,100 $4,865,700 $4,999,700 $5,990,200 $6,359,000 $6,747,800
Operating Revenues
Flat Rate Revenue $ 3,574,000 $ 3,600,000 $ 3,498,000 $ 2,955,000 $ 2,630,000 $ 2,304,000 $ 1,464,000 $ 495,000 $ - $ - $ - $ - $ -
Service Charge Revenue $ 5,009,000 $ 5,079,000 $ 5,446,000 $ 5,570,000 $ 5,575,000 $ 6,000,000 $ 6,511,000 $ 6,900,000 $ 7,195,000 $ 7,392,000 $ 7,595,000 $ 7,803,000 $ 7,987,000
Usage Charge Revenue $ 4,422,023 $ 4,345,000 $ 4,773,000 $ 4,905,000 $ 4,845,000 $ 5,150,000 $ 5,722,000 $ 6,414,000 $ 6,903,000 $ 7,070,000 $ 7,249,000 $ 7,445,000 $ 7,626,000
BABs Subsidy $ 609,966 $ 662,040 $ 662,000 $ 662,000 $ 662,000 $ 643,200 $ 622,800 $ 601,000 $ 577,700 $ 550,100 $ 521,300 $ 491,400 $ 460,200
Miscellaneous Revenue $ 384,741 $ 384,700 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300 $ 377,300
Interest Earnings $ 47,005 $ 158,000 $ 159,000 $ 69,000 $ 96,600 $ 109,800 $ 131,100 $ 185,300 $ 146,000 $ 150,000 $ 179,700 $ 190,800 $ 202,400
Trans. from Water IMF Fund for DS $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Operating Revenues $ 14,046,734 $ 14,228,740 $ 14,915,300 $ 14,538,300 $ 14,185,900 $ 14,584,300 $ 14,828,200 $ 14,972,600 $ 15,199,000 $ 15,539,400 $ 15,922,300 $ 16,307,500 $ 16,652,900
Operating Expenses and Transfers
Water Administration $ 1,412,525 $ 1,667,230 $ 1,717,300 $ 1,768,500 $ 1,821,300 $ 1,875,500 $ 1,931,500 $ 1,988,900 $ 2,048,400 $ 2,109,400 $ 2,172,400 $ 2,237,200 $ 2,303,700
WID Water Purchases $ 1,429,421 $ 1,448,451 $ 1,487,900 $ 1,528,400 $ 1,570,000 $ 1,612,800 $ 1,656,800 $ 1,703,500 $ 1,751,500 $ 1,802,200 $ 1,854,400 $ 1,908,000 $ 1,963,200
Operating Transfer Out $ 820,560 $ 821,900 $ 846,600 $ 872,000 $ 898,200 $ 925,100 $ 952,900 $ 981,500 $ 1,010,900 $ 1,041,200 $ 1,072,400 $ 1,104,600 $ 1,137,700
Damage to Property $ $ 4,080 $ 4,200 $ 4,300 $ 4,400 $ 4,500 $ 4,600 $ 4,700 $ 4,800 $ 4,900 $ 5,000 $ 5,100 $ 5,200
Water Production $ 553,542 $ 694,100 $ 715,100 $ 736,600 $ 758,600 $ 781,300 $ 804,700 $ 828,700 $ 853,400 $ 879,200 $ 905,500 $ 932,600 $ 960,400
Electricity $ 312,188 $ 292,920 $ 303,800 $ 315,100 $ 326,900 $ 339,100 $ 351,800 $ 365,300 $ 379,300 $ 394,100 $ 409,500 $ 425,500 $ 442,100
Water Distribution $ 950,750 $ 1,050,000 $ 1,081,400 $ 1,113,800 $ 1,147,100 $ 1,181,400 $ 1,216,700 $ 1,253,000 $ 1,290,200 $ 1,328,900 $ 1,368,700 $ 1,409,600 $ 1,451,600
Surface Water Treatment Facility $ 1,253,687 $ 1,617,590 $ 1,666,100 $ 1,715,700 $ 1,766,600 $ 1,819,100 $ 1,873,000 $ 1,928,500 $ 1,985,700 $ 2,044,700 $ 2,105,500 $ 2,168,200 $ 2,232,600
Electricity $ 165,393 $ 150,000 $ 155,600 $ 161,400 $ 167,400 $ 173,600 $ 180,100 $ 187,000 $ 194,200 $ 201,800 $ 209,700 $ 217,900 $ 226,400
Water Conservation $ 83,884 $ 147,440 $ 151,700 $ 156,100 $ 160,700 $ 165,300 $ 170,100 $ 175,100 $ 180,100 $ 185,300 $ 190,700 $ 196,200 $ 202,000
DBCP $ 77,416 $ 67,540 $ 69,600 $ 71,700 $ 73,900 $ 76,100 $ 78,300 $ 80,500 $ 83,000 $ 85,600 $ 88,200 $ 90,900 $ 93,600
Debt Service $ 2,967,656 $ 2,969,156 $ 2,969,756 $ 2,967,956 $ 2,966,556 $ 2,952,656 $ 2,929,520 $ 2,907,259 $ 2,885,452 $ 2,856,572 $ 2,829,500 $ 2,798,914 $ 2,764,815
Transfer to Capital Fund (Fund 561) $ 3,868,331 $1,225,590 $ 6,745,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000
Total Oper. Expenses and Transfers $ 13,895,353 $ 12,155,997 $ 17,914,056 $ 13,619,556 $ 13,743,656 $ 13,876,456 $ 13,019,020 $ 16,284,959 $ 15,064,952 $ 14,548,872 $ 15,553,500 $ 15,918,714 $ 16,572,315
Ending Balance
Operating Reserve (50%)
Available Funds
Debt Service Coverage (min. 1.25)
$ 3,749,145 $ 5,298,979 $ 2,300,244 $ 3,218,944 $ 3,661,144 $ 4,368,944 $ 6,178,081 $ 4,865,742 $ 4,999,748 $ 5,990,228 $ 6,359,001 $ 6,747,786 $ 6,828,385
$ 5,014,000 $ 5,465,000 $ 5,585,000 $ 5,706,000 $ 5,831,000 $ 5,953,000 $ 6,075,000 $ 6,202,000 $ 6,333,000 $ 6,467,000 $ 6,606,000 $ 6,747,000 $ 6,892,000
$ (1,264,855) $ (166,021) $ (3,284,756) $ (2,487,056) $ (2,169,856) $ (1,584,056) $ 103,081 $ (1,336,259) $ (1,333,252) $ (476,772) $ (247,000) $ 786 $ (63,615)
$ 2.48 $ 2.27 $ 2.46 $ 2.25 $ 2.06 $ 2.13 $ 2.13 $ 2.11 $ 2.12 $ 2.18 $ 2.24 $ 2.31 $ 2.37
The Reed Group, Inc. DRAFT - 2/11/2019
WATER CAPITAL FUND (FUND 561)
Beginning Balance $ 95,079 $ 144,410 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $
Revenues and Transfers In
Interest Earnings $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Transfer from Operating Fund $ 3,868,331 $ 1,225,590 $ 6,745,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000
Transfer from Water IMF Fund $ - $ - $ 950,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Debt Proceeds $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total Revenues and Transfers In $ 3,868,331 $ 1,225,590 $ 7,695,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000
Capital Program Expenditures
Capital Projects $ 3,819,000 $ 1,370,000 $ 7,695,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000
Total Capital Prog. Expend. $ 3,819,000 $ 1,370,000 $ 7,695,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000
Ending Balance $ 144,410 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $
WATER IMF FUND (FUND 562)
Beginning Balance $ 702,815 $ 1,079,382 $ 1,555,700 $ 1,181,200 $ 1,766,700 $ 2,392,100 $ 20,400 $ 640,500 $ 1,304,200 $ 2,013,800 $ 2,771,700 $ 3,580,600 $ 4,442,900
Revenues and Transfers In
Interest Earnings $ - $ - $ 46,700 $ 35,400 $ 53,000 $ 71,800 $ 600 $ 19,200 $ 39,100 $ 60,400 $ 83,200 $ 107,400 $ 133,300
Water IMF Revenue $ 362,481 $ 476,310 $ 528,800 $ 550,100 $ 572,400 $ 595,500 $ 619,500 $ 644,500 $ 670,500 $ 697,500 $ 725,700 $ 754,900 $ 785,400
Total Revenues and Transfers In $ 362,481 $ 476,310 $ 575,500 $ 585,500 $ 625,400 $ 667,300 $ 620,100 $ 663,700 $ 709,600 $ 757,900 $ 808,900 $ 862,300 $ 918,700
Water IMF Expend. & Transfers
Water IMF Projects $ - $ - $ - $ $ $ 3,039,000 $ $ $ - $ $ - $ $
Transfer to Oper. for Debt Service $ - $ - $ - $ $ $ - $ - $ $ - $ - $ - $ - $
Transfer to Cap. for Projects $ - $ - $ 950,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $
Total Water IMF Expend. $ - $ - $ 950,000 $ - $ - $ 3,039,000 $ - $ - $ - $ - $ - $ - $
Ending Balance $ 1,065,296 $ 1,555,692 $ 1,181,200 $ 1,766,700 $ 2,392,100 $ 20,400 $ 640,500 $ 1,304,200 $ 2,013,800 $ 2,771,700 $ 3,580,600 $ 4,442,900 $ 5,361,600
Owed Fund 560 for Debt Service $ 8,267,794 $ 9,805,871 $ 10,394,375 $ 11,931,679 $ 13,468,050 $ 15,007,687 $ 16,545,500 $ 18,083,006 $ 19,621,507 $ 21,159,155 $ 22,697,955 $ 24,236,297 $ 25,772,707
Oper. & Maint. Costs
Debt Service Costs
Capital Prog. Transfer
Proposed Revenues
Ending Balance
Target Oper. Reserve
Min. Oper. Reserve
Current Revenues
FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
$ 7,059,366 $ 7,961,251 $ 8,199,300 $ 8,443,600 $ 8,695,100 $ 8,953,800 $ 9,220,500 $ 9,496,700 $ 9,781,500 $ 10,077,300 $ 10,382,000 $ 10,695,800 $ 11,018,500
$ 2,967,656 $ 2,969,156 $ 2,969,756 $ 2,967,956 $ 2,966,556 $ 2,952,656 $ 2,929,520 $ 2,907,259 $ 2,885,452 $ 2,856,572 $ 2,829,500 $ 2,798,914 $ 2,764,815
$ 3,868,331 $ 1,225,590 $ 6,745,000 $ 2,208,000 $ 2,082,000 $ 1,970,000 $ 869,000 $ 3,881,000 $ 2,398,000 $ 1,615,000 $ 2,342,000 $ 2,424,000 $ 2,789,000
$ 14,046,734 $ 14,228,740 $ 14,915,300 $ 14,538,300 $ 14,185,900 $ 14,584,300 $ 14,828,200 $ 14,972,600 $ 15,199,000 $ 15,539,400 $ 15,922,300 $ 16,307,500 $ 16,652,900
$ 3,749,145 $ 5,298,979 $ 2,300,244 $ 3,218,944 $ 3,661,144 $ 4,368,944 $ 6,178,081 $ 4,865,742 $ 4,999,748 $ 5,990,228 $ 6,359,001 $ 6,747,786 $ 6,828,385
$ 5,014,000 $ 5,465,000 $ 5,585,000 $ 5,706,000 $ 5,831,000 $ 5,953,000 $ 6,075,000 $ 6,202,000 $ 6,333,000 $ 6,467,000 $ 6,606,000 $ 6,747,000 $ 6,892,000
$ 2,507,000 $ 2,732,500 $ 2,792,500 $ 2,853,000 $ 2,915,500 $ 2,976,500
$ 14,047,712 $ 14,132,740 $ 14,342,300 $ 14,111,300 $ 14,006,900 $ 14,014,300 $ 13,930,200 $ 13,821,600 $ 13,781,000 $ 13,838,400 $ 13,919,300 $ 13,982,500 $ 14,007,900
The Reed Group, Inc. DRAFT - 2/11/2019
RESOLUTION NO. 2017-23
A RESOLUTION OF THE LODI CITY COUNCIL SETTING
PRE -APPROVED ENGINEERING NEWS RECORD
ADJUSTMENT INDEX FOR USAGE -BASED AND FLAT
WATER RATES FOR RESIDENTIAL, COMMERCIAL, AND
INDUSTRIAL CUSTOMERS
WHEREAS, Resolution No. 2014-75 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, or three percent, beginning 2015 through January 2019. 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 three -percent increase; and
WHEREAS, the adjustment includes a "rate sunset" at the end of the Water Meter
Program, which will eliminate this rate increase going forward from January 1, 2021.
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 water rates
for residential, commercial, and industrial customers as outlined on Exhibit A, with the effective
date of the increase to be March 1, 2017; and
BE IT FURTHER RESOLVED that the adjustment includes a "rate sunset" at the end of
the Water Meter Program whereby water rates will be reset going forward from January 1, 2021,
to the applicable rate as if this resolution had never passed.
Dated: February 15, 2017
I hereby certify that Resolution No. 2017-23 was passed and adopted by the City
Council of the City of Lodi in a special meeting held February 15, 2017, by the following vote:
AYES: COUNCIL MEMBERS — Chandler, Johnson, and Mayor Kuehne
NOES: COUNCIL MEMBERS — Nakanishi
ABSENT: COUNCIL MEMBERS — Mounce
ABSTAIN: COUNCIL MEMBERS — None
2017-23
NNIFE
ity Clerk
Tril eUtC/A-te
RRAIOLO
Exhibit A
City of Lodi
Flat Water Rates
Notes:
(1) Mufti -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
(Jan. 2016)
Proposed
(Jan. 2017)
Potential
(Jan. 2018)
Potential
(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) Mufti -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
-Based Water Rates
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
Future Rate Ceiling (2)
Current
(Jan. 2016)
Proposed
(Jan. 2017)
Potential
(Jan. 2018)
Potential
(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
RESOLUTION NO. 2019-43
A RESOLUTION OF THE LODI CITY COUNCIL SETTING
PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT
INDEX FOR USAGE -BASED AND FLAT WATER RATES FOR
RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS
WHEREAS, Resolution No. 2019-43 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, or three percent, beginning 2019 through January 2023. 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 water rates
for residential, commercial, and industrial customers, as outlined on Exhibit A, with the effective
date of the increase to be April 1, 2019.
Dated: March 20, 2019
I hereby certify that Resolution No. 2019-43 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held March 20, 2019, by the following vote:
AYES: COUNCIL MEMBERS — Kuehne, Nakanishi, and Mayor Chandler
NOES: COUNCIL MEMBERS — Johnson and Mounce
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
(JE, NIFER FERRAIOLO
City Clerk
2019-43
Exhibit A
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
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
Future Rate Ceiling (2)
Current
(Jan. 2017) (April 2019)
Potential
(Jan. 2020)
Sunset Rates
(Jan. 2021) (3)
Rate Increase --> 2.5%
3.0%
FLAT RATES
Single Family Residential
1 Bedroom $ 32.84 $ 33.66
$ 34.67
$ 31.88
2 Bedroom $ 39.44 $ 40.43
$ 41.64
$ 38.29
3 Bedroom $ 47.27 $ 48.45
$ 49.90
$ 45.89
4 Bedroom $ 56.79 $ 58.21
$ 59.96
$ 55.14
5 Bedroom $ 68.11 $ 69.81
$ 71.90
$ 68.11
6 Bedroom $ 81.75 $ 83.79
$ 86.30
$ 81.75
7 Bedroom $ 98.03 $ 100.48
$ 103.49
$ 98.03
Multi -Family (1)
1 Bedroom $ 28.19 $ 28.89
$ 29.76
$ 27.37
2 Bedroom $ 33.81 $ 34.66
$ 35.70
$ 32.82
3 Bedroom $ 40.58 $ 41.59
$ 42.84
$ 39.40
Mobile Homes
Any Size $ 28.19 $ 28.89
$ 29.76
$ 27.37
Non -Residential
Existing unmetered Varies +2.5%
+3.0%
Varies
J
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
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
City of Lodi
Current and Proposed Usage -Based Water Rates
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
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
Future Rate Ceiling (2)
Current
(Jan. 2017) (April 2019)
Potential
(Jan. 2020)
Sunset Rates
(Jan. 2021) (3)
Rate Increase --> 2.5%
3.0%
USAGE -BASED RATES
Monthly Service Charge
Single Family
Up to 3/4" meter $ 21.87 $ 22.42
$ 23.09
$ 21.23
1" meter $ 34.34 $ 35.20
$ 36.26
$ 33.34
1 1/2" meter $ 65.25 $ 66.88
$ 68.89
$ 63.34
2" meter $ 102.52 $ 105.08
$ 108.23
$ 99.53
Multi -Family and Non -Residential (1)
Up to 3/4" meter $ 21.87 $ 22.42
$ 23.09
$ 21.23
1" meter $ 34.34 $ 35.20
$ 36.26
$ 33.34
1 1/2" meter $ 65.25 $ 66.88
$ 68.89
$ 63.34
2" meter $ 102.52 $ 105.08
$ 108.23
$ 99.53
3" meter $ 189.50 $ 194.24
$ 200.07
$ 183.98
4" meter $ 313.73 $ 321.57
$ 331.22
$ 304.59
6" meter $ 624.03 $ 639.63
$ 658.82
$ 605.85
8" meter $ 996.55 $ 1,021.46
$ 1,052.10
$ 967.52
10" meter $ 1,431.26 $ 1,467.04
$ 1,511.05
$ 1,389.57
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF) $ 0.97 $ 0.99
$ 1.02
$ 0.94
Tier 2 (11-50 CCF) $ 1.29 $ 1.32
$ 1.36
$ 1.25
Tier 3 (>50 CCF) $ 1.60 $ 1.64
$ 1.69
$ 1.56
Multi -Family and Non -Residential (1)
All water usage $ 1.15 $ 1.18
$ 1.22
$ 1.12
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
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
1 0
Engineering
Public Hearing
Water Rates
Agenda Item G-2
March 20, 2019
Water Rate Setting
• March 20, 2019 - Council adopted five-year
schedule of rate adjustments
• ENR Index or maximum 3%
• Proposition 218 Procedure affirmed schedule
• Updated financial model used to analyze proposed
rate changes
Recommendation
• Recommendation
— 2.9% increase in FY 2018/19 followed by annual ENR
Index change increases (or maximum 3% through
December 31, 2023)
• Proposition 218 — 3% maximum annual increase
• 2018 ENR Index Change — 2.9%
• Pre -approved increase by March 20, 2019 Council Action
— Implement WMP Phase 8
— Rate sunset -January 1, 2021 (Resolution No. 2017-23)
Water Meter Program Status
• Metered residential customers
• 87% single-family residential as of January 1, 2019
• 14,400 meters
• Residential meters installed
• 92% single-family residential
• 15,300 meters
• Flat -rate, single-family residential customers
• Approximately 1,130 remain as of January 1, 2019
7 -Year Summary
Year
Prop 218
Approved
ENR
Implemented
2012
2013
2.53
2.5
2014 3.3
2015 3.0
2016 3.0
2017 3.0
2018 3.0
2.53
2.5
3.3 2.5
2.0 2.0
1.975 1.975
3.36 3.0
3.98 0
2.2
2.5
Recommended Water Flat Rates
Residential
1 Bedroom
2 Bedroom
3 Bedroom
4 Bedroom
5 Bedroom
6 Bedroom
7 Bedroom
$32.84
$39.44
$47.27
$56.79
$68.11
$81.75
$98.03
April 2019
$33.79
$40.58
$48.64
$58.44
$70.09
$84.12
$100.87
Recommended Metered Rates
Residential
Current
April 2019
Fixed Service Charge (3/4 inch)
$21.87
$22.50
Metered Charges:
Tier 1 (Up to 7,480 gals/month) $0.00130/gal $0.00134/gal
Tier 2 (7,480-37,400 gals/month) $0.00172/gal $0.00178/gal
Tier 3 (>34,000 gals/month) $0.00214/gal $0.00221 /gal
2.9% Increase Amounts
• Flat -Rate - 3 Bedroom Home
— Currently $47.27 / Month
— April 1st $48.64 / Month
— Difference $ 1.37 / Month
• Metered Rate — (1,500 CF / Month)
— Currently $38.02 / Month
— April 1St $39.15 / Month
— Difference $ 1.13 / Month
Rate Comparisons - Local
City of Manteca
City of Tracy
City of Galt
City of Lodi
City of Stockton
City of Lathrop
Average Bill
$32.60
$32.80
$34.81
$39.15
$68.75
$90.93
Based on 1,500 cubic feet per month
Recommendation
Adopt Resolution Setting Pre -Approved Engineering
News Record Adjustment Index for Usage -Based
and Flat Water Rates for Residential, Commercial,
and Industrial Customers
Questions?
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: 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
PUBLISH DATE: SATURDAY, MARCH 2, MARCH 9, AND MARCH 16, 2019
LEGAL AD
TEAR SHEETS WANTED: One (1) please
SEND AFFIDAVIT AND BILL TO:
LNS ACCT. #0510052
JENNIFER M. FERRAIOLO, CITY CLERK
City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
DATED: THURSDAY, FEBRUARY 21, 2019
ORDERED BY: JENNIFER M. FERRAIOLO
CITY CLERK
PAMELA M. FARRIS
DEPUTY CITY CLERK
SYLVIA DOMINGUEZ
ADMINISTRATIVE CLERK
Verify Appearance of this Legal in the Newspaper — Copy to File
LNS
Emailed to the Sentinel at classified) @lodinews.com at ":1g(tlme) on ',t `1 d te) (pages)
Phoned to confirm receipt of all pages at (time) EB PPF Ciniliaisy
forms\advins.doc
CITY OF LODI
Carnegie Forum
305 West Pine Street, Lodi
NOTICE OF PUBLIC HEARING
Date: March 20, 2019
Time: 7:00 p.m.
For information regarding this notice please contact:
Jennifer M. Ferraiolo
City Clerk
Telephone: (209) 333-6702
1
EXIfl biT A
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on Wednesday, March 20, 2019, 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 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:
niter M.
ity Clerk
rr-iolo
Dated: February 20, 2019
Approved as to form:
o il�r�
( I l
Janice -D. Magdich
City Attorney
AVISO: Para obtener ayuda interpretative con esta noticia, por favor Ilame a la oficina de la
Secretaria Municipal, a las (209) 333-6702.
J:CLERK\PUBLICHEARING\NOTICES\PH NOTICE continue WaterRales doc 2/19/19
Exhibit A
City of Lodi
Current and Proposed Flat Water Rates
Current Proposed*
(Jan. 2017) (April 2019)
Rate Increase --> 2.9%
FLAT RATES
Single Family Residential
1 Bedroom $ 32.84 $ 33.79
2 Bedroom $ 39.44 $ 40.58
3 Bedroom $ 47.27 $ 48.64
4 Bedroom $ 56.79 $ 58.44
5 Bedroom $ 68.11 $ 70.09
6 Bedroom $ 81.75 $ 84.12
7 Bedroom $ 98.03 $ 100.87
Multi -Family (1)
1 Bedroom $ 28.19 $ 29.01
2 Bedroom $ 33.81 $ 34.79
3 Bedroom $ 40.58 $ 41.76
Mobile Homes
Any Size $ 28.19 $ 29.01
Non -Residential
Existing unmetered Varies +2.9%
Notes:
(1) Multi -family includes duplexes, triplexes, €ourplexes, 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 ties to annual changes in the ENR index
*Pending a Prop 218 approval
(3) Per Resolution No. 2017-23 adopted February 15, 2017.
Future Rate Ceiling (2)
Potential
(Jan. 2020)
3.0%
$ 34.80
$ 41.80
$ 50.10
$ 60.19
$ 72.19
$ 86.64
$ 103.90
$ 29.88
$ 35.83
$ 43.01
$ 29.88
+3.0%
Sunset Rates
(Jan. 2021) (3)
$ 31.88
$ 38.29
$ 45.89
$ 55.14
$ 68.11
$ 81.75
$ 98.03
$ 27.37
$ 32.82
$ 39.40
$ 27.37
Varies
City of Lodi
Current and Proposed Usage -Based Water Rates
Current Proposed*
(Jan. 2017) (April 2019)
Future Rate Ceiling (2)
Potential
(Jan. 2020)
Sunset Rates
(Jan. 2021) (3)
Rate Increase --> 2.9%
USAGE -BASED RATES
Monthly Service Charge
Single Family
Up to 3/4" meter $ 21.87 $ 22.50
1" meter $ 34.34 $ 35.34
1 1/2" meter $ 65.25 $ 67.14
2" meter $ 102.52 $ 105.49
Multi -Family and Non -Residential (1)
Up to 3/4" meter $ 21.87 $ 22.50
1" meter $ 34.34 $ 35.34
1 1/2" meter $ 65.25 $ 67.14
2" meter $ 102.52 $ 105.49
3" meter $ 189.50 $ 195.00
4" meter $ 313.73 $ 322.83
6" meter $ 624.03 $ 642.13
8" meter $ 996.55 $1,025.45
10" meter $1,431.26 $1,472.77
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF) $ 0.97 $ 1.00
Tier 2 (11-50 CCF $ 1,29 $ 1.33
Tier 3 (>50 CCF) $ 1.60 $ 1.65
Multi -Family and Non -Residential (1)
All water usage $ 1.15 $ 1.18
Notes:
3.0%
$ 23.18
$ 36.40
$ 69.15
$ 108.65
$ 23.18
$ 36.40
$ 69.15
$ 108.65
$ 200.85
$ 332.51
$ 661.39
$1,056.21
$1,516.95
$ 1.03
$ 1.37
$ 1.70
$ 1.22
$ 21.23
$ 33.34
$ 63.34
$ 99.53
$ 21.23
$ 33.34
$ 63.34
$ 99.53
$ 183.98
$ 304.59
$ 605.85
$ 967.52
$ 1,389.57
$ 0.94
$ 1.25
$ 1.56
$ 1.12
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) These are the maximum rates for each year, without a forrnal rate -setting process. Actual water rate
adjustments may be lower and would be tied to annual changes in the ENR index
*Pending a Prop 218 approval
(3) Per Resolution No. 2017-23 adopted February 15, 2017.