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HomeMy WebLinkAboutAgenda Report - June 19, 2019 G-01 PHAGENDA ¡TEM G-l Crrv on Lonr CouNcu, CoIIMUNICATToN IM AGENDA TITLE: IUIEETING DATE: June 19,2019 PREPARED BY: Public Works Director Continue Public Hearing to July 17,2019, to Consider Adopting Resolution Setting Pre-Approved Engineering News Record Adjustment lndex for Wastewater Rates for Residential, Commercial, and lndustrial Customers RECOMMENDED ACTION Continue public hearing to July 17,2019, to consider adopting resolution setting pre-approved Engineering News Record adjustment index for wastewater 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, Council voted to approve 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. A summary of the past years' wastewater rate adjustments relative to the ENR index change is provided in the table below. 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 or deferred to coordinate with the programming of capital improvement projects. ln fact, staff has not recommended a wastewater rate increase since July 1 ,2016. July 2OL4 July 2015 July 2016 July 2OL7 July 2018 July 2019 cap ENR lndex Approved/ Recommended 3.0% 3.Oo/o 3,Oo/o 3.O% 3.O% 3.O% 2.6% 2.8% 2.7% 4.2o/o 2.7o/o 2.9% 2.5% 2.8% 2.5% 0% o% 2.9% ln preparation of the new five-year rate program, staff engaged the services of The Reed Group, lnc. to analyze and update the financial models and current rate structure within both utilities. At present, the wastewater operating fund balance exceeds target operating reserves. This surplus will be needed to fund wastewater expenditures amounting to over $30 million over the next five years without borrowing AppRovEo,'ffi Stephen-Sclfwabauer, City Manager KIWP\UTILITY RATES\W_I ^ /\20'lI W_WW Rate lncrease\CC_Cont_PH_VVW Rates 201g.doc 61612019 Continue Public Hearing to July 17, 2019, to ConsiderAdopting Resolution Setting Pre-Approved Engineering News Record Adjustment lndex for Wastewater Rates for Residential, Commercial, and lndustr¡al Customers June 19,2019 Page2 A copy of the current wastewater Financial Plan is attached as Exhibit A. The recommended rate adjustments in the Financial Plan are 2.9 percent, beginning July 1 ,2019. The rates for this next year (Exhibit B) reflect a recommended increase of 2.9 percent which is lower than the three percent capped maximum. FISCAL IMPACT lncreased revenues are required to properly fund capital maintenance, to keep up with cost of service increases, and State mandated costs. FUNDING AVAILABLE: Not applicable. Charles E. Swimley, Jr Public Works Director CES/RAY/tdb Attachments K:\WP\UTILITY RATES\W_\MM201 I W_lÀM/ Rate lncrease\CC_Cont_PH_VVW Rates 201 g.doc 61612015 FY 17‐18 FY 18‐19 FY 19‐20 FY 20‐21 FY 21‐22 FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 FY 27‐28 FY 28‐29 FY 29‐30Rate Adjustments ‐‐> 2.9% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%July July July July July July July July July July JulyWASTEWATER OPERATING FUND (FUND 530)Beginning Balance12,967,860$      15,365,382$   $11,780,300 $11,403,800 $13,990,100 $13,322,200 $9,695,600 $4,200,200 $6,743,500 $7,990,200 $3,278,100 $5,865,300 $7,507,900Operating RevenuesFlat Rate Revenue 4,071,900$        3,297,900$     3,393,600$     3,015,600$     2,619,600$     2,698,200$     2,335,400$     2,405,400$     1,239,000$     ‐$                 ‐$                 ‐$                 ‐$                Service Charge Revenue 5,576,600$        6,113,300$     6,343,600$     6,889,000$     7,458,500$     7,740,700$     8,313,500$     8,626,300$     9,245,700$     9,896,600$     10,264,900$   10,647,100$   11,044,000$  Usage Charge Revenue 5,215,043$        5,796,900$     6,032,500$     6,637,100$     7,267,400$     7,554,900$     8,186,000$     8,507,000$     8,958,200$     9,430,200$     9,798,400$     10,180,700$   10,270,000$  Miscellaneous Revenue 204,007$           180,000$        211,900$        211,900$        211,900$        211,900$        211,900$        211,900$        211,900$        211,900$        211,900$        211,900$        211,900$       Grant Revenue 400,282$           3,150,000$     ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Interest Earnings 205,140$           220,000$        353,400$        342,100$        419,700$        399,700$        290,900$        126,000$        202,300$        239,700$        98,300$           176,000$        225,200$       Trans. From/(To) WW Rate Stab. ‐$                    ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Trans. From WW IMF Fund for DS ‐$                    ‐$                 400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$       Total Operating Revenues15,672,971$      18,758,100$   16,735,000$   17,495,700$   18,377,100$   19,005,400$   19,737,700$   20,276,600$   20,257,100$   20,178,400$   20,773,500$   21,615,700$   22,151,100$  Operating Expenses and TransfersWastewater Administration 1,324,120$        1,397,140$     1,439,000$     1,481,700$     1,526,100$     1,571,700$     1,618,500$     1,666,600$     1,716,400$     1,767,600$     1,820,200$     1,874,500$     1,930,300$    Operating Transfer Out 1,108,270$        1,083,710$     1,116,200$     1,149,700$     1,184,200$     1,219,700$     1,256,300$     1,294,000$     1,332,800$     1,372,800$     1,414,000$     1,456,400$     1,500,100$    Damage to Property 2,861$                5,800$             5,900$             6,000$             6,100$             6,200$             6,300$             6,400$             6,500$             6,600$             6,700$             6,800$             7,000$            White Slough WPCF 3,828,052$        4,434,580$     4,567,800$     4,704,900$     4,845,800$     4,990,800$     5,140,200$     5,294,400$     5,453,100$     5,616,400$     5,784,900$     5,958,400$     6,137,000$    Electricity 629,470$           603,060$        621,200$        639,800$        659,000$        678,800$        699,200$        720,200$        741,800$        764,100$        787,000$        810,600$        834,900$       Sanitary System Maintenance 889,128$           791,730$        815,700$        840,100$        865,200$        891,100$        917,700$        945,200$        973,500$        1,002,600$     1,032,500$     1,063,400$     1,095,000$    Storm Drainage Maintenance 565,918$           725,890$        748,000$        770,500$        793,600$        817,400$        841,900$        867,200$        893,100$        919,900$        947,400$        975,700$        1,004,600$    Industrial System Maintenance 5,590$                12,200$           12,500$           12,800$           13,100$           13,400$           13,700$           14,000$           14,300$           14,600$           14,900$           15,200$           15,500$          Water/Wastewater Personnel 139,712$           ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Watershed Education 42,290$              74,310$           76,500$           78,700$           81,000$           83,400$           85,800$           88,300$           90,800$           93,300$           95,900$           98,500$           101,300$       Debt Service 2,896,776$        3,006,576$     3,006,700$     3,003,200$     3,005,900$     3,006,500$     3,002,500$     3,374,000$     2,868,100$     2,869,600$     1,650,800$     1,652,600$     1,656,600$    Transfer to Capital Fund (Fund 531) 1,345,754$        $10,208,149 4,702,000$     2,222,000$     6,065,000$     9,353,000$     11,651,000$   3,463,000$     4,920,000$     10,463,000$   4,632,000$     6,061,000$     6,298,000$    Total Oper. Expenses and Transfers12,777,941$      22,343,145$   17,111,500$   14,909,400$   19,045,000$   22,632,000$   25,233,100$   17,733,300$   19,010,400$   24,890,500$   18,186,300$   19,973,100$   20,580,300$  Ending Balance 15,862,890$     11,780,337$   11,403,800$   13,990,100$   13,322,200$   9,695,600$     4,200,200$     6,743,500$     7,990,200$     3,278,100$     5,865,300$     7,507,900$     9,078,700$    Operating Reserve (50%) 5,716,000$        6,067,000$     6,205,000$     6,344,000$     6,490,000$     6,640,000$     6,791,000$     7,135,000$     7,045,000$     7,214,000$     6,777,000$     6,956,000$     7,141,000$     50%Available Funds 10,146,890$      5,713,337$     5,198,800$     7,646,100$     6,832,200$     3,055,600$     (2,590,800)$    (391,500)$       945,200$        (3,935,900)$    (911,700)$       551,900$        1,937,700$    Debt Service Coverage (min. 1.25) 2.64                    3.51                 2.45                 2.62                 2.82                 2.94                 3.09                 2.80                 3.18                 3.04                 5.45                 5.75                 5.86                WASTEWATER CAPITAL FUND (FUND 531)Beginning Balance1,067,097$        246,851$        ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Revenues and Transfers InTransfer from Operating Fund 1,345,754$        10,208,149$   4,702,000$     2,222,000$     6,065,000$     9,353,000$     11,651,000$   3,463,000$     4,920,000$     10,463,000$   4,632,000$     6,061,000$     6,298,000$    Transfer from WW IMF Fund ‐$                    1,000,000$     ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Total Revenues and Transfers In1,345,754$        11,208,149$   4,702,000$     2,222,000$     6,065,000$     9,353,000$     11,651,000$   3,463,000$     4,920,000$     10,463,000$   4,632,000$     6,061,000$     6,298,000$    Capital Program ExpendituresWastewater Capital Outlay 820,000$           3,955,000$     3,193,000$     1,034,000$     3,661,000$     394,000$        3,594,000$     1,761,000$     3,813,000$     2,660,000$     2,740,000$     4,166,000$     4,291,000$    Wastewater Plant 1,346,000$        7,500,000$     1,509,000$     1,188,000$     2,404,000$     8,959,000$     8,057,000$     1,702,000$     1,107,000$     7,803,000$     1,892,000$     1,895,000$     2,007,000$    Total Capital Prog. Expend.2,166,000$        11,455,000$   4,702,000$     2,222,000$     6,065,000$     9,353,000$     11,651,000$   3,463,000$     4,920,000$     10,463,000$   4,632,000$     6,061,000$     6,298,000$    Ending Balance 246,851$           ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                City of LodiWastewater System Financial PlanThe Reed Group, Inc.DRAFT — 5/2/2019 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 29‐30WASTEWATER IMF FUND (FUND 533)Beginning Balance759,967$           809,400$        712,500$        621,700$        539,900$        467,600$        405,700$        355,000$        316,400$        290,700$        279,000$        282,200$        301,400$       Revenues and Transfers InInterest Earnings ‐$                    ‐$                 21,400$           18,700$           16,200$           14,000$           12,200$           10,700$           9,500$             8,700$             8,400$             8,500$             9,000$            Wastewater IMF Revenue 503,776$           903,130$        287,800$        299,500$        311,500$        324,100$        337,100$        350,700$        364,800$        379,600$        394,800$        410,700$        427,200$       Total Revenues and Transfers In503,776$           903,130$        309,200$        318,200$        327,700$        338,100$        349,300$        361,400$        374,300$        388,300$        403,200$        419,200$        436,200$       Wastewater IMF Expend. & TransfersWastewater IMF Projects ‐$                    ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Transfer to Oper. for Debt Service ‐$                    ‐$                 400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$       Transfer to Cap. for Projects ‐$                    1,000,000$     ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Total Wastewater IMF Expend.‐$                    1,000,000$     400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$        400,000$       Ending Balance 1,263,743$        712,530$        621,700$        539,900$        467,600$        405,700$        355,000$        316,400$        290,700$        279,000$        282,200$        301,400$        337,600$       Owed Fund 530 for Debt Service4,243,000$          3,243,000$       2,843,000$       2,443,000$       2,043,000$       1,643,000$       1,243,000$       843,000$           443,000$           43,000$             (357,000)$         (757,000)$         (1,157,000)$     STORMWATER IMF FUND (FUND 535)Beginning Balance925,574$           930,384$        945,700$        1,069,000$     1,199,800$     1,338,600$     1,485,700$     (1,140,400)$    (1,058,900)$    (970,300)$       (874,200)$       (770,100)$       (657,600)$      Revenues and Transfers InInterest Earnings ‐$                    ‐$                 28,400$           32,100$           36,000$           40,200$           44,600$           (34,200)$         (31,800)$         (29,100)$         (26,200)$         (23,100)$         (19,700)$        Stormwater IMF Revenue 7,759$                15,330$           94,900$           98,700$           102,800$        106,900$        111,300$        115,700$        120,400$        125,200$        130,300$        135,600$        141,000$       Total Revenues and Transfers In7,759$                15,330$           123,300$        130,800$        138,800$        147,100$        155,900$        81,500$           88,600$           96,100$           104,100$        112,500$        121,300$       Stormwater IMF Expend. & TransfersStormwater IMF Projects ‐$                    ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 2,782,000$     ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Transfer to Cap. for Projects ‐$                    ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Total Stormwater IMF Expend.‐$                    ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 2,782,000$     ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Ending Balance 933,333$           945,714$        1,069,000$     1,199,800$     1,338,600$     1,485,700$     (1,140,400)$   (1,058,900)$   (970,300)$       (874,200)$       (770,100)$       (657,600)$       (536,300)$      WASTEWATER RATE STABILIZATION FUND (FUND 534)Beginning Balance500,000$           500,000$        500,000$        515,000$        530,500$        546,400$        562,800$        579,700$        597,100$        615,000$        633,500$        652,500$        672,100$       Revenues and Transfers InInterest Earnings ‐$                    ‐$                 15,000$           15,500$           15,900$           16,400$           16,900$           17,400$           17,900$           18,500$           19,000$           19,600$           20,200$          Transfers From/(To) Oper. Fund ‐$                    ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                 ‐$                Total Revs. and Transfers In/(Out)‐$                    ‐$                 15,000$           15,500$           15,900$           16,400$           16,900$           17,400$           17,900$           18,500$           19,000$           19,600$           20,200$          Ending Balance 500,000$           500,000$        515,000$        530,500$        546,400$        562,800$        579,700$        597,100$        615,000$        633,500$        652,500$        672,100$        692,300$       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 29‐30Oper. & Maint. Costs 8,535,411$        9,128,420$     9,402,800$     9,684,200$     9,974,100$     10,272,500$   10,579,600$   10,896,300$   11,222,300$   11,557,900$   11,903,500$   12,259,500$   12,625,700$  Debt Service Costs 2,896,776$        3,006,576$     3,006,700$     3,003,200$     3,005,900$     3,006,500$     3,002,500$     3,374,000$     2,868,100$     2,869,600$     1,650,800$     1,652,600$     1,656,600$    Capital Prog. Transfer 1,345,754$        10,208,149$   4,702,000$     2,222,000$     6,065,000$     9,353,000$     11,651,000$   3,463,000$     4,920,000$     10,463,000$   4,632,000$     6,061,000$     6,298,000$    Proposed Revenues 15,672,971$      18,758,100$   16,735,000$   17,495,700$   18,377,100$   19,005,400$   19,737,700$   20,276,600$   20,257,100$   20,178,400$   20,773,500$   21,615,700$   22,151,100$  Ending Balance 15,862,890$      11,780,337$   11,403,800$   13,990,100$   13,322,200$   9,695,600$     4,200,200$     6,743,500$     7,990,200$     3,278,100$     5,865,300$     7,507,900$     9,078,700$    Target Oper. Reserve 5,716,000$        6,067,000$     6,205,000$     6,344,000$     6,490,000$     6,640,000$     6,791,000$     7,135,000$     7,045,000$     7,214,000$     6,777,000$     6,956,000$     7,141,000$    Min. Oper. Reserve3,320,000$     3,395,500$     3,567,500$     3,522,500$     3,607,000$     3,388,500$    Current Revenues 15,468,922$      18,578,100$   15,672,200$   15,943,200$   16,301,900$   16,395,900$   16,546,500$   16,498,400$   16,019,400$   15,503,300$   15,482,800$   15,682,100$   15,854,200$  City of LodiWastewater System Financial PlanThe Reed Group, Inc.DRAFT — 5/2/2019 Exhibit B City of Lodi -- Wastewater Utility Current and Proposed Wastewater Rates Current July 2019 Percent Increase 2.9 Flat Rates ($/month) 1 Bedroom 27.90$               28.71$          2 Bedroom 37.20$               38.28$          3 Bedroom 46.49$               47.84$          4 Bedroom 55.79$               57.41$          5 Bedroom 65.09$               66.98$          6 Bedroom 74.39$               76.25$          7 Bedroom 83.69$               86.12$          Mobile Homes  Any Size 27.90$               28.71$          Schools 18 Students per SSU 36.18$               37.23$          Usage-Based Rates (1) Monthly Usage Charge ($/CCF) (1) 2.89$                 2.97$            3/4" Meter Charge per month 25.40$               26.14$          1" Meter Charge per month 40.92$               42.11$          1 1/2" Meter Charge per month 79.06$               81.35$          2" Meter Charge per month 124.33$             127.94$        3" Meter Charge per month 232.29$             239.03$        4" Meter Charge per month 385.52$             396.70$        6" Meter Charge per month 768.28$             790.56$        8" Meter Charge per month 1,227.76$         1,263.37$    Notes: (1) Winter water usage determined as average monthly usage from December through February. (' DECLARATION OF POSTING NOTICE OF CONTINUED PUBLIC HEARING TO CONSIDER RESOI.UTION SETTING PRE-APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR WASTEWATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS On Thursday, June 20, 2019, in the City of Lodi, San Joaquin County, California, a Notice of Puþlic Hearing to consider resolution setting pre-approved Engineering News Record adjustment index for wastewater 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 Worknet Office I declare undei penalty of perjury that the foregoing is true and correct. Executed on June 24,2Q19, at Lodi, California. ORDERED BY: JENNIFER M. FERRAIOLO G¡TY CLERK ELA M S KAYLEE CLAYTON ADMINISTRATIVE CLERKPUTY CI CLERK N :\Adninistration\Ct.ERK\Publ ic Hearings\AFFADAVITS\DECPOSTPW2.doc CITY OF LODI Carnegie Forum 305 West Pine Street, Lodi NOTICE OF CONTINUED PUBLIC HEARING Date: July 17,2019 Time: 7:00 p.m. For information regarding this notice please contact: Jennifer M. Ferraiolo City Clerk Telephone: (209) 333-6702 EXHfiMIî A NOTIGE OF CONTINUED PUBLIC HEARING NOTICE lS HEREBY GIVEN that on Wednesday, July 17,2019, at the hour òf 7:00 p,m,, or as soon thereafter as the matter may be heard, the City Council will conduct a continued public hearing at the Carnegie Forum, 305 West Pine Street, Lodi, to consider: a) Resolution setting pre-approved Engineering News Record adjustment index for wastewater rates for residential, commercial, and industrial customers. lnformation regarding this item may be obtained in the Public Works Department, 221 West Pine Street, Lodi, (209) 333-6706. All interested persons aie 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,2ndFloor, Lodi, 95240, at anytime prior to the hearing scheduled herein, and oral statements may be made at said hearing. lf 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. By Order of the Lodi City Council: l-vt,Tn-'*,--& ifer M. F iolo City Clerk Dated: June 19, 2019 Approved to form: Ja ce ich City Attornêy AVISO: Para obtener ayuda interpretativa con esta noticia, por favor llame a la oficina de la Secretaria Municipal, a las (209) 333-6702. CLERI(PUBI-IEAR\NOTICES\NOT_PW.doc 6/14/19 City of Lodt -. Wastewater Utility Current and Pro Wastewater Rates Notes: (l) Wtnter water usage determlned as ðverage monthly usage from December through February. 2019Current Jul Percent Increase Flat Rates ($/monttr¡ L Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom 6 Bedroom 7 Bedroom t|obile Homes Any Size Schools 18 Students per SSU Usage-Based Rates (1) Monthly Usage Charge {S/CCF} (1) 3/4r' Meter Charge per month 1" Meter Charge per monlh 1 1/2" Mefer Charge per monlh 2" Meler Charge per monlh 3" Meter Charge per monLh 4" Meter Charge per month 6" Meter Charge per month 8" Meter Charge per month s $ $ s s s s s s s s s $ $ $ Þ s 5 2,9 27,90 S 37.20 S 46,49 $ ss,7e $ 6s,0s $ 74,39 $ 83,69 $ 27,90 $ zs,tt 36,X8 $ ¡z,z¡ 28.77 38,28 47,84 57,4t 66.98 76,25 86.12 2,89 25,40 40,92 79,06 124.33 232.29 3 85.5 2 768.28 I,227,76 $ z.gt$ zo,rqS qz,rr 5 er,¡s$ tzt,sq $ z¡s,oaS ggo.zo $ zgo.so $ 1,263,37