HomeMy WebLinkAboutAgenda Report - December 16, 2020 C-07AGENDA ITEM Cwn7
&% CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Approving 2021 Pre -Approved Rate Sunset for Usage -Based
and Flat Water Rates for Residential, Commercial, and Industrial Customers
MEETING DATE: December 16, 2020
PREPARED BY: Public Works Director
RECOMMENDED ACTION Adopt resolution approving 2021 pre -approved rate sunset 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, City Council
approved a five-year rate plan in accordance with the Proposition
218 rate setting process. The proposed rate adjustments are needed to generate sufficient revenue
to meet projected operation and maintenance costs and debt service obligations, as well as,
necessary capital maintenance improvements. The rate plan also included a rate "sunset' that will roll
back rates to January 1, 2016 levels in accordance with Council Resolution No. 2017-23 (Exhibit A).
A summary of current and proposed rates for flat -rate and usage -based rate customers is provided in
Exhibit B, which reflects a 5.3 percent decrease. For a resident still on the flat rate, the monthly
charge for a three-bedroom home will decrease from $48.45 to $45.89, or $2.56 per month. A
metered resident using an average of 1,500 cubic feet of water per month will see a decrease from
$38.92 to $36.88, or $2.04 per month. The water utility, despite foregoing the January 1, 2020 pre -
approved rate increase and implementation of the January 1, 2021 rate rollback, projects fund
balances to steadily rebound toward the reserve target of 50 percent, starting in Fiscal Year 2021/22.
This steady rebound in fund balances is the result of substantial annual cost savings associated with
the completion of the residential Water Meter Program and significant debt service savings from the
2020 bond refunding.
Staff recommends approving 2021 pre -approved rate sunset for usage -based and flat water rates for
residential, commercial, and industrial customers.
FISCAL IMPACT- The Water Utility is anticipated to remain financially sound upon
implementation of the rate rollback.
FUNDING AVAILABLE: Not applicable.
C-0 �_o
Charles E. Swimley, Jr.
Public Works Director
Prepared by Rebecca Areida-Yadav, Public Works Management Analyst
CES/RAY/tc
Attachment
APPROVED: Steve Schwabauer
Stephen Schwabauer, City Manager
K:\WP\UTILITY RATES\W-WW\2021 W _WW Rate Increase\CC RateSunset_WaterRates2021 doc 12/10/2020
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
NNIFE F XRAfOLO
ity Clerk
2017-23
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
Future Rate Ceiling (2)
Current
Proposed
Potential
Potential
(Jan. 2016)
(Jan. 2017)
(Jan, 2018)
(Jan.
2018)
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
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
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
$
32314
$
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 ($/CCI,
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
Exhibit B
City of Lodi
Current and Proposed Flat Water Rates
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
(2) Per Resolution No. 2017-23 adopted February 15, 2017.
Current
(April 2019)
Sunset Rates
(Jan. 2021) (2)
Rate Increase -->
-5.6%
FLAT RATES
Single Family Residential
1 Bedroom
$
33.66
$
31.88
2 Bedroom
$
40.43
$
38.29
3 Bedroom
$
48.45
$
45.89
4 Bedroom
$
58.21
$
55.14
5 Bedroom
$
69.81
$
66.13
6 Bedroom
$
83.79
$
79.37
7 Bedroom
$
100.48
$
95.17
Multi -Family (1)
1 Bedroom
$
28.89
$
27.37
2 Bedroom
$
34.66
$
32.83
3 Bedroom
$
41.59
$
39.40
Mobile Homes
Any Size
$
28.89
$
27.37
Non -Residential
Existing unmetered
Varies
-5.6%
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
(2) 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) Per Resolution No. 2017-23 adopted February 15, 2017.
Current
(April 2019)
Sunset Rates
(Jan. 2021) (2)
Rate Increase -->
-5.6%
USAGE -BASED RATES
Monthly Service Charge
Single Family
Up to 3/4" meter
$
22.42
$
21.23
1" meter
$
35.20
$
33.34
1 1/2" meter
$
66.88
$
63.35
2" meter
$
105.08
$
99.53
Multi -Family and Non -Residential
(1)
Up to 3/4" meter
$
22.42
$
21.23
1" meter
$
35.20
$
33.34
1 1/2" meter
$
66.88
$
63.35
2" meter
$
105.08
$
99.53
3" meter
$
194.24
$
183.98
4" meter
$
321.57
$
304.59
6" meter
$
639.63
$
605.85
8" meter
$
1,021.46
$
967.52
10" meter
$
1,467.04
$
1,389.57
Usage Rates ($/CCF)
Single Family
Tier 1 (0-10 CCF)
$
0.99
$
0.94
Tier 2 (11-50 CCF)
$
1.32
$
1.25
Tier 3 (>50 CCF)
$
1.64
$
1.55
Multi -Family and Non -Residential
(1)
All water usage
$
1.18
$
1.12
Notes:
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.
(2) Per Resolution No. 2017-23 adopted February 15, 2017.
AGENDA ITEM Caz7
&Q% CITY OF LODI BLUE SHEET
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Approving 2021 Pre -Approved Rate Sunset for Usage -Based
and Flat Water Rates for Residential, Commercial, and Industrial Customers
MEETING DATE: December 16, 2020
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Adopt resolution approving 2021 pre -approved rate sunset 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, City Council
approved a five-year rate plan in accordance with the Proposition
218 rate setting process. The proposed rate adjustments are needed to generate sufficient revenue
to meet projected operation and maintenance costs and debt service obligations, as well as,
necessary capital maintenance improvements. The rate plan also included a rate "sunset' that will roll
back rates to January 1, 2016 levels in accordance with Council Resolution No. 2017-23 (Exhibit A).
A summary of current and proposed rates for flat -rate and usage -based rate customers is provided in
Exhibit B, which reflects a 5.6 percent decrease. For a resident still on the flat rate, the monthly
charge for a three-bedroom home will decrease from $48.45 to $45.89, or $2.56 per month. A
metered resident using an average of 1,500 cubic feet of water per month will see a decrease from
$38.92 to $36.88, or $2.04 per month. The water utility, despite foregoing the January 1, 2020 pre -
approved rate increase and implementation of the January 1, 2021 rate rollback, projects fund
balances to steadily rebound toward the reserve target of 50 percent, starting in Fiscal Year 2021/22.
This steady rebound in fund balances is the result of substantial annual cost savings associated with
the completion of the residential Water Meter Program and significant debt service savings from the
2020 bond refunding.
Staff recommends approving 2021 pre -approved rate sunset for usage -based and flat water rates for
residential, commercial, and industrial customers.
FISCAL IMPACT: The Water Utility is anticipated to remain financially sound upon
implementation of the rate rollback.
FUNDING AVAILABLE: Not applicable.
n
Charles E. Swimley, Jr
Public Works Director
Prepared by Rebecca Areida-Yadav, Public Works Management Analyst
CES/RAY/tc
Attachment
t ab uer, City Manager
\\cvcfi1v02\pubwks$\WP\UTILITY RATES\W_WW\2021 WWW Rale increa CC Rale&f I_WaterRates2021.doc
12/7/2020
RESOLUTION NO. 2020-300
A RESOLUTION OF THE LODI CITY COUNCIL APPROVING
2021 PRE -APPROVED RATE SUNSET FOR USAGE -BASED
AND FLAT WATER RATES FOR RESIDENTIAL,
COMMERCIAL, AND INDUSTRIAL CUSTOMERS
WHEREAS, on March 20, 2019, City Council approved a five-year rate plan in
accordance with the Proposition 218 rate setting process; and
WHEREAS, the rate plan also included a rate "sunset" that will roll back rates to
January 1, 2016 levels in accordance with Council Resolution No. 2017-23; and
WHEREAS, staff recommends approving the 2021 pre -approved rate sunset for
usage -based and flat water rates for residential, commercial, and industrial customers.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
approve the 2021 pre -approved rate sunset for usage -based and flat water rates for
residential, commercial, and industrial customers; and
BE IT FURTHER RESOLVED, pursuant to Section 6.3q of the City Council
Protocol Manual (adopted 11/6/19, Resolution No. 2019-223), the City Attorney is
hereby authorized to make minor revisions to the above -referenced document(s) that do
not alter the compensation or term, and to make clerical corrections as necessary.
Dated: December 16, 2020
-------------------------------------------------------------------
-------------------------------------------------------------------
I hereby certify that Resolution No. 2020-300 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held December 16, 2020, by the
following vote:
AYES: COUNCIL MEMBERS — Chandler, Nakanishi, and Mayor Kuehne
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mounce
ABSTAIN: COUNCIL MEMBERS — None
/�.�-tom,
JENNIFE USMIR
City Clerk
2020-300