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Home My WebLink AboutAgenda Report - January 19, 2022 C-17 PHAGENDA ITEM C-17 CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Set Public Hearing for February 16, 2022, to Consider Adopting Resolution Setting Pre -Approved 2021 Engineering News Record Adjustment Index for Usage -Based and Flat Water Rates for Residential, Commercial, and Industrial Customers MEETING DATE: January 19, 2022 PREPARED BY: Public Works Director RECOMMENDED ACTION: Set public hearing for February 16, 2022, 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, 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 rolled back rates on January 1, 2021 to January 1, 2016 levels. Prior to this rate rollback, there had not been an increase to rates since fiscal year 2018/19. While the approved five-year rate plan allows for a maximum increase of 3 percent, staff has analyzed the water financial plan and recommends a 2 percent increase. A 2 percent increase will support a healthy reserve balance that is between the recommended level of 50% and the minimum level of 25%. A summary of current and proposed rates for flat -rate and usage -based rate customers is provided in Exhibit A, which reflects a 2 percent increase. For a resident still on the flat rate, the monthly charge for a three-bedroom home will increase from $45.89 to $46.81, or $0.92 per month. A metered resident using an average of 1,500 cubic feet of water per month will see an increase from $36.88 to $37.65, or $0.77 per month. The water utility, due to the foregoing of the January 1, 2020 pre -approved rate increase and implementation of the January 1, 2021 rate rollback, projects fund balances to dip below the 50 percent reserve target starting in Fiscal Years 2024/25. Staff recommends setting public hearing for February 16, 2022, to consider adopting resolution setting pre -approved Engineering News Record adjustment index for usage -based and flat water rates for residential, commercial, and industrial customers. FISCAL IMPACT: Increased revenues are required to properly fund capital maintenance, and to keep up with cost of service increases. FUNDING AVAILABLE: Not applicable. Charles E. Swimley, Jr. Public Works Director Prepared by Rebecca Areida-Yadav, Public Works Management Analyst CES/RAY/cd Attachment APPROVED: Stephen Schwabauer, City Manager \\172.22.14.2\pubwks$\WP\UTILITY RATES\W_WW\2022 W—WW Rate Increase\CC SetPH_WaterRates2022.doc 1/5/2022 AGENDA ITEM Caa 17 a CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Set Public Hearing for February 16, 2022, to Consider Adopting Resolution Setting Pre -Approved 2021 Engineering News Record Adjustment Index for Usage -Based and Flat Water Rates for Residential, Commercial, and Industrial Customers MEETING DATE: January 19, 2022 PREPARED BY: Public Works Director RECOMMENDED ACTION: Set public hearing for February 16, 2022, 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, 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 rolled back rates on January 1, 2021 to January 1, 2016 levels. Prior to this rate rollback, there had not been an increase to rates since fiscal year 2018/19. While the approved five-year rate plan allows for a maximum increase of 3 percent, staff has analyzed the water financial plan and recommends a 2 percent increase. A 2 percent increase will support a healthy reserve balance that is between the recommended level of 50% and the minimum level of 25%. A summary of current and proposed rates for flat -rate and usage -based rate customers is provided in Exhibit A, which reflects a 2 percent increase. For a resident still on the flat rate, the monthly charge for a three-bedroom home will increase from $45.89 to $46.81, or $0.92 per month. A metered resident using an average of 1,500 cubic feet of water per month will see an increase from $36.88 to $37.65, or $0.77 per month. The water utility, due to the foregoing of the January 1, 2020 pre -approved rate increase and implementation of the January 1, 2021 rate rollback, projects fund balances to dip below the 50 percent reserve target starting in Fiscal Years 2024/25. Staff recommends setting public hearing for February 16, 2022, to consider adopting resolution setting pre -approved Engineering News Record adjustment index for usage -based and flat water rates for residential, commercial, and industrial customers. FISCAL IMPACT: Increased revenues are required to properly fund capital maintenance, and to keep up with cost of service increases. FUNDING AVAILABLE: Not applicable. Charles E. Swimley, Jr. Public Works Director Prepared by Rebecca Areida-Yadav, Public Works Management Analyst CES/RAY/cd Attachment APPROVED: SteveSchwabauer Stephen Schwabauer, City Manager \\172.22.14.2\pubwks$\WP\UTILITY RATES\W WW\2022 W WW Rate Increase\CC SetPH__WaterRates2022 doc 1/5/2022 Exhibit A City of Lodi Current and Proposed Flat Water Rates Current Proposed Rates (Jan. 2021) (Feb.2022) Rate Increase --> 2.0% FLAT RATES Single Family Residential 1 Bedroom $ 31.88 $ 32.52 2 Bedroom $ 38.29 $ 39.06 3 Bedroom $ 45.89 $ 46.81 4 Bedroom $ 55.14 $ 56.24 5 Bedroom $ 66.13 $ 67.45 6 Bedroom $ 79.37 $ 80.96 7 Bedroom $ 95.17 $ 97.07 Multi -Family (1) 1 Bedroom $ 27.37 $ 27.92 2 Bedroom $ 32.83 $ 33.49 3 Bedroom $ 39.40 $ 40.19 Mobile Homes Any Size $ 27.37 $ 27.92 Non -Residential Existing unmetered Varies 3.000% Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums. City of Lodi Current and Proposed Usage -Based Water Rates notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. Signature: - Ja ,dlch(Jan 13, 202210:06nS1)� Email: jmagdich@lodi.gov CurrentProposed (Jan. 2021) Rates (Feb.2022) Rate Increase --> 2.0% USAGE -BASED RATES Monthly Service Charge Single Family Up to 3/4" meter $ 21.23 $ 21.65 1" meter $ 33.34 $ 34.01 1 1/2" meter $ 63.35 $ 64.62 2" meter $ 99.53 $ 101.52 Multi -Family and Non -Residential (1) Up to 3/4" meter $ 21.23 $ 21.65 1" meter $ 33.34 $ 34.01 1 1/2" meter $ 63.35 $ 64.62 2" meter $ 99.53 $ 101.52 3" meter $ 183.98 $ 187.66 4" meter $ 304.59 $ 310.68 6" meter $ 605.85 $ 617.97 8" meter $ 967.52 $ 986.87 10" meter $ 1,389.57 $ 1,417.36 Usage Rates ($/CCF), Single Family Tier 1 (0-10 CCF) $ 0.94 $ 0.96 Tier (11-50 CCF) $ 1.25 $ 1,28 Tier 3 (>50 CCF) $ 1.55 $ 1.58 Multi -Family and Non -Residential (1) All water usage $ 1,12 $ 1.14 notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. Signature: - Ja ,dlch(Jan 13, 202210:06nS1)� Email: jmagdich@lodi.gov Please immediately confirm receipt of this fax by calling 333-6702 CITY OF LODI P. O. BOX 3006 LODI, CALIFORNIA 95241-1910 ADVER'T'ISING INSTRUCTIONS SUBJECT: NOTICE OF PUBLIC HEARING TO CONSIDER ADOPTION OF RESOLUTION SETTING PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR USEAGE-BASED AND FLAT WATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS PUBLISH DATE: SATURDAY, JANUARY22, 2022 TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: PAMELA M. FARRIS, ASSISTANT CITY CLERK LNS ACCT. #5100152 City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 DATED: THURSDAY, JANUARY 20, 2022 ORDERED BY: JENNIFER CUSMIR CITY CLERK PAMELA M. FARRIS KAYLEE CLAYTON ASSISTANT CITY CLERK ADMINISTRATIVE CLERK Emailed to the Sentinel at legals@lodinews.com at A'_3Q,-ime) on (pages) forms\advins.doc DECLARATION OF POSTING 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 On Thursday, January 20, 2022, in the City of Lodi, San Joaquin County, California, a 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 as identified on attached Exhibit A (attached and marked as Exhibit A) was posted at the following locations: Lodi City Clerk's Office Lodi City Hall Lobby Lodi Carnegie Forum WorkNet Office I declare under penalty of perjury that the foregoing is true and correct. Executed on January 20, 2022, at Lodi, California. PAMELA M. FARRIS ASSISTANT CITY CLERK ORDERED BY: PAMELA M. FARRIS ASSISTANT CITY CLERK KAYLE� LAYTON ADMINISTRATIVE CLERK \\cvcfilv0l\administration$\Administration\CLERK\Public HearingAAFFADAVITS\DECPOSTPW 1. DOC CITY OF LODI ` Carnegie Forum 305 West Pine Street, Lodi NOTICE OF PUBLIC HEARING Date: February 16, 2022 Time: 7:00 p.m. For information regarding this notice please contact: Pamela M. Farris Assistant City Clerk Telephone: (209) 333-6702 NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on Wednesday, February 16, 2022, 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 us4ge-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: Pamela M. Farris Assistant City Clerk Dated: January 19, 2022 Approved as to form: Janice D. Magdich Janice D. Magdich City Attorney AVISO: Para obtener ayuda interpretativa 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 WalerRales 1/13122 Exhibit A City of Lodi Current and Proposed Flat Water Rates Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums. Current (Jan. 2021) Proposed Rates (Feb.2022) Rate Increase --> 2.0% FLAT RATES Single Family Residential 1 Bedroom $ 31.88 $ 32.52 2 Bedroom $ 38.29 $ 39.06 3 Bedroom $ 45.89 $ 46.81 4 Bedroom $ 55.14 $ 56.24 5 Bedroom $ 66.13 $ 67.45 6 Bedroom $ 79.37 $ 80.96 7 Bedroom $ 95.17 $ 97,07 Multi -Family (1) 1 Bedroom $ 27.37 $ 27.92 2 Bedroom $ 32.83 $ 33.49 3 Bedroom $ 39.40 $ 40.19 Mobile Homes Any Size $ 27.37 $ 27.92 Non -Residential Existing unmetered Varies 3.000% Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums. City of Lodi Current and Proposed Usage -Based Water Rates Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks. Current (Jan. 2021) Proposed Rates (Feb.2022) 2.0% Rate Increase --> USAGE -BASED RATES Monthly Service Charge Single Family Up to 3/4" meter $ 21.23 $ 21.65 1" meter $ 33.34 $ 34.01 1 1/2" meter $ 63.35 $ 64.62 2" meter $ 99.53 $ 101.52 Multi -Family and Non -Residential (1) Up to 3/4" meter $ 21.23 $ 21.65 1" meter $ 33.34 $ 34.01 1 1/2" meter $ 63.35 $ 64.62 2" meter $ 99.53 $ 101.52 3" meter $ 183.98 $ 187.66 4" meter $ 304.59 $ 310.68 6" meter $ 605.85 $ 617.97 8" meter $ 967.52 $ 986.87 10" meter $ 1,389.57 $ 1,417.36 Usage Rates ($/CCF) Single Family Tier 1 (0-10 CCF) $ 0.94 $ 0.96 Tier 2 (11-50 CCF) $ 1.25 $ 1.28 Tier 3 (>50 CCF) $ 1.55 $ 1.58 Multi -Family and Non -Residential (1) All water usage $ 1.12 $ 1.14 Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, condominiums, and mobile home parks.