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Home My WebLink AboutAgenda Report - January 18, 2023 C-16 PHF CITY OF Ag tCIO t CALIFORNIA AGENDA ITEM C016 COUNCIL COMMUNICATION AGENDA TITLE: Set Public Hearing for February 15, 2023, 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: January 18, 2023 PREPARED BY: Public Works Director RECOMMENDED ACTION- Set Public Hearing for February 15, 2023, 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. At its meeting on February 16, 2022, City Council approved a 2 percent increase which was below the allowed maximum increase of 3 percent. The recommended 2 percent increase was appropriate even though the Engineering News Record (ENR) increase for the period between 2021 and 2022 was 8%, because the trajectory of the water utility fund balance at this time had exceeded the 50% reserve target. The approved five-year rate plan allows for a maximum increase of 3 percent. Staff has analyzed the water financial plan and based on persistent inflationary pressure and projected capital improvements, recommends a 3 percent increase. A 3 percent increase will continue to support a healthy reserve balance that is between the recommended level of 50% and the minimum level of 25% through FY 2027/28. A summary of current and proposed rates for flat -rate and usage -based rate customers is provided in Exhibit A, which reflects a 3 percent increase. For a resident still on the flat rate, the monthly charge for a three- bedroom home will increase from $46.81 to $48.21, or $1.40 per month. A metered resident using an average of 1,500 cubic feet of water per month will see an increase from $37.65 to $38.80, or $1.15 per month. The water utility, due to the foregoing of the January 1, 2020 pre -approved rate increase and implementation of the January 1, 2021 rate rollback, projects fund balances to dip below the 50 percent reserve target starting in Fiscal Years 2024/25 and below the 25 percent reserve target in Fiscal Year 2027/2028. APPROVED: _W' xovw Stephen Schwabauer, City Manager \\172.22.14.2\pubwks$\WP\UTILITY RATES\W_WW\2023 W_WW Rate Increase\CCSetPH_Water Rates.docx 1/6/2023 Set Public Hearing for February 15, 2023, 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 January 18, 2023 Page 2 The current Proposition 218 water and wastewater rate plan expires on December 31, 2023. Staff is currently working with a consultant to prepare an updated rate study to establish a rate plan for the next 5 years. The rate study and proposed rate plan will be brought before Council this summer for feedback and consideration. Staff recommends setting public hearing for February 15, 2023, 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. Swlmley, Jr. Public Works Director Exhibit A City of Lodi Current and Proposed Flat Water Rates Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums. Current (Feb.2022) Proposed Rates (Feb.2022) Rate Increase --> 3.0% FLAT RATES Single Family Residential 1 Bedroom $ 32.52 $ 33.50 2 Bedroom $ 39.06 $ 40.23 3 Bedroom $ 46.81 $ 48.21 4 Bedroom $ 56.24 $ 57.93 5 Bedroom $ 67.45 $ 69.47 6 Bedroom $ 80.96 $ 83.39 7 Bedroom $ 97.07 $ 99.98 Multi -Family (1) 1 Bedroom $ 27.92 $ 28.76 2 Bedroom $ 33.49 $ 34.49 3 Bedroom $ 40.19 $ 41.40 Mobile Homes Any Size $ 27.92 $ 28.76 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 apartments, condominiums, and mobile home parks. Current (Feb.2022) Proposed Rates (Feb.2023) Rate Increase --> 3.0% USAGE -BASED RATES Monthly Service Charge Single Family Up to 3/4" meter $ 21.65 $ 22.30 1" meter $ 34.01 $ 35.03 1 1/2" meter $ 64.62 $ 66.56 2" meter $ 101.52 $ 104.57 Multi -Family and Non -Residential (1) Up to 3/4" meter $ 21.65 $ 22.30 1" meter $ 34.01 $ 35.03 1 1/2" meter $ 64.62 $ 66.56 2" meter $ 101.52 $ 104.57 3" meter $ 187.66 $ 193.29 4" meter $ 310.68 $ 320.00 6" meter $ 617.97 $ 636.51 8" meter $ 986.87 $ 1,016.48 10" meter $ 1,417.36 $ 1,459.88 Usage Rates ($/CCF) Single Family Tier 1 (0-10 CCF) $ 0.96 $ 0.99 Tier 2 (11-50 CCF) $ 1.28 $ 1.32 Tier 3 (>50 CCF) $ 1.58 $ 1.63 Multi -Family and Non -Residential (1) All water usage $ 1.14 $ 1.17 Notes: (1) Multi -family includes apartments, condominiums, and mobile home parks. 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 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, JANUARY 21, 2023 TEAR SHEETS WANTED: One (1) please SEND AFFIDAVIT AND BILL TO: OLIVIA NASHED, CITY CLERK LNS ACCT. #5100152 City of Lodi P.O. Box 3006 Lodi, CA 95241-1910 DATED: THURSDAY, JANUARY 19, 2023 ORDERED BY: OLIVIA NASHED CITY CLERK PAMELA M. FARRIS ASSISTANT CITY CLERK KAYLEE CLAYTON ADMINISTRATIVE CLERK Emailed to the Sentinel at legals@lodinews.com at ms) on 9 (pages) forms\advins.doc DECLARATION OF POSTING NOTICE OF PUBLIC HEARING TO CONSIDER 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 19, 2023, in the City of Lodi, San Joaquin County, California, a copy of a Notice of Public Hearing to consider 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 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 19, 2023, at Lodi, California. PAMELA M. FARRIS ASSISTANT CITY CLERK ORDERED BY: OLIVIA NASHED CITY CLERK ; _Xl� �� KAYL CLAYTON ADMINISTRATIVE CL K \\cvcf1v01\administration$\Administration\CLERK\Agenda\City Council\Public Hearings\AFFADAVITS\DECPOST 1. DOC • CITY OF LODI Carnegie Forum 305 West Pine Street, Lodi NOTICE OF PUBLIC HEARING Date: February 15, 2023 Time: 7:00 p.m. For information regarding this notice please contact: Olivia Nashed City Clerk Telephone: (209) 333-6702 NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that on Wednesday, February 15, 2023, 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 item: a) Adopting a 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 West Pine Street, 2nd Floor, Lodi, 95240, at any time prior to the hearing scheduled herein, and oral statements may be made at said hearing. Comments may be made in person or via the following link: https;llus06we_b.zoom, us/ml820637706617pwd=N2xpOXF2hmVJUjg5aoFzRkVH U IJ52z09 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, 221 West Pine Street, at or prior to the close of the public hearing. By Order of the Lodi City Council: Olivia Nashed City Clerk Dated: January 18, 2023 Approve as to form: Janice D. agdich City Aaorney AVISo. Para obtener ayuda interpretative con esta noticia, por favor Ilame a la oficina de la Secretaria Municipal, a las (209) 333-6702. CLERK\PUBHEAR\NOTICES\NoIPW WalerRaW2023 1/12/23 Exhibit A City of Lodi Current and Proposed Flat Water Rates Notes: (1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums. Current (Feb.2022) Proposed Rates (Feb.2022) Rate Increase --> 3.0% FLAT RATES Single Family Residential 1 Bedroom $ 32.52 $ 33.50 2 Bedroom $ 39.06 $ 40.23 3 Bedroom $ 46.81 $ 48.21 4 Bedroom $ 56.24 $ 57.93 5 Bedroom $ 67,45 $ 69.47 6 Bedroom $ 80.96 $ 83.39 7 Bedroom $ 97.07 $ 99.98 Multi -Family (1) 1 Bedroom $ 27.92 $ 28.76 2 Bedroom $ 33.49 $ 34.49 3 Bedroom $ 40.19 $ 41.40 Mobile Homes Any Size $ 27.92 $ 28.76 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 Current eb. 2022 Rate Increase --> USAGE -BASED RATES $ Monthly Service Charge 34.01 Single Family 35.03 Up to 3/4" meter $ 1" meter $ 1 1/2" meter $ 2" meter $ Multi -Family and Non -Residential (1) Proposed Rates (Feb. 2023) 3.0% 21 .65 $ 22.30 34.01 $ 35.03 64.62 $ 66.56 101.52 $ 104.57 Up to 3/4" meter $ 21.65 1" meter $ 34.01 1 1/2" meter $ 64.62 2" meter $ 101.52 3" meter $ 187.66 4" meter $ 310.68 6" meter $ 617.97 8" meter $ 986.87 10" meter $ 1,417.36 Usage Rates ($/CCF) Single Family Tier 1 (0-10 CCF) $ Tier 2 (11-50 CCF) $ Tier 3 (>50 CCF) $ Multi -Family and Non -Residential (1) All water usage $ Notes: $ 22.30 $ 35.03 $ 66.56 $ 104.57 $ 193.29 $ 320.00 $ 636.51 $ 1,016.48 $ 1,459.88 0.96 $ 0.99 1.28 $ 1,32 1.58 $ 1.63 1.14 $ 1.17 (1) Multi -family includes apartments, condominiums, and mobile home parks.