HomeMy WebLinkAboutAgenda Report - February 15, 2023 G-02 PHCITY OF
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CALIFORNIA
AGENDA ITEM
G•2
COUNCIL COMMUNICATION
AGENDA TITLE: Conduct 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: February 15, 2023
PREPARED BY: Public Works Director
RECOMMENDED ACTION: Conduct 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, 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 $1.15 per month. The
water utility, due to the foregoing of the January 1, 2020 pre -approved rate increase and implementation of the
January 1, 2021 rate rollback, projects fund balances to dip below the 50 percent reserve target starting in
Fiscal Years 2024/25 and below the 25 percent reserve target in Fiscal Year 2027/2028.
The current Proposition 218 water and wastewater rate plan expires on December 31, 2023. Staff is currently
working with a consultant to prepare an updated rate study to establish a rate plan for the next 5 years. The
rate study and proposed rate plan will be brought before Council this summer for feedback and consideration.
APPROVED: Steve Schwabauer
Stephen Schwabauer, City Manager
\\cvcfi1v02\pubwks$\WP\UTILITY RATES\W_WW\2023 W_WW Rate Increase\CCPH_Water Rates.docx 1/25/2023
Conduct 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
February 15, 2023
Page 2
Staff recommends 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,RJr.
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.
RESOLUTION NO. 2023-42
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, on March 20, 2019, City Council approved a five-year rate plan in
accordance with the Proposition 218 rate setting process; and
WHEREAS, the approved five-year rate plan allows for a maximum increase of
3 percent, and staff has analyzed the water financial plan and recommends a 3 percent
increase; and
WHEREAS, the current water rate adjustment reflects a 3 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 March 1, 2023.
Dated: February 15, 2023
I hereby certify that Resolution No. 2023-42 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held February 15, 2023, by the following vote:
AYES: COUNCIL MEMBERS — Bregman, Craig, Khan, Nakanishi, and
Mayor Bregman
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
OLIVIA NASHED
City Clerk
2023-42
Exhibit A
City of Lodi
Current and Proposed Flat Water Rates
(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
n 32.52
$
33.50
2 Bedroom
$ 39.06
$
40.23
3 Bedroom
S 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%
(1) Multi -family includes duplexes, triplexes, fourplexes, apartments, and condominiums.
City of Lodi
Current and Proposed Usage -Based Water Rates
Current Proposed Rates
(Feb.2022) (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.
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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
• Currently conducting new rate study and financial
model
4
Recommendation
• Recommendation
— 3% increase effective March 1St
• Proposition 218 — 3% maximum annual increase
• ENR Index Change for 2023 — 5.7%
• Pre -approved increase by March 20, 2019 Council Action
Water Meter Program Status
vvaVer Meter Program status (Phases 1-8)
• 100% of single family meters installed (16,175)
• 94% billed a metered rate (157300)
• 1,737 remain on flat rates (Phase 7 & 8)
• Phase 7 will convert to metered rates in 2023 (863 meters)
• 100% single family meters billed metered rates in 2024
Multi -family residential customers
• Approximately 240 properties to be metered
• Further discussion /policy needed
2016
3.0
1.975
1.975
2017
3.0
3.36
3.0
2018
3.0
3.98
0
2019
3.0
2.9
2.5
2020
3.0
1.3
0
2021
3.0
8.0
-5.3
2022
3.0
8.4
2.0
10%
8%
6%
4%
0%
-2%
-4%
-6%
ENR Implemented —•—Prop 218 Cap
R
10, 000, 000
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
Dnereqfinn B
0 '
22-23 23-24 24-25 25-26 26-27 27-28
f Ending Balance with 2023 Rate Increase - 345
(Operating Reserve (25%)
—6—Operating Reserve (50%)
Ending Balance without 2023 Rate Increase
R
1 Bedroom $32.52
2 Bedroom $39.06
3 Bedroom $46.81
4 Bedroom $56.24
5 Bedroom $67.45
6 Bedroom $80.96
7 Bedroom $97.07
$33.50
$40.23
$48.21
$57.93
$69.47
$83.39
$99.98
R
Residential
, . IVIh
Fixed Service Charge (3/4 inch) $21.65 $22.30
Metered Charges:
Tier 1 (Up to 7,480 gals/month) $0.00128/gal $0.00132/gal
Tier 2 (7,480-37,400 gals/month) $0.00171 /gal $0.00176/gal
Tier 3 (>34,000 gals/month) $0.00211 /gal $0.00217/gal
2% Increase Amounts
ate - 3 Bedroom Home
— �u1eptly
—March 1st
— Difference
$46.81 /Month
$48.21 /Month
$ 1.40 /Month
• Metered Rate — (1,500 CF / Month)
— Currently
—March 1st
— Difference
$37.65 /Month
$38.80 /Month
$ 1.15 /Month
R
City of Manteca
City of Galt
City of Lodi
City of Tracy
Citv of Stockton
$32.60
$36.09
$38.80
$41.00
$72.65
$81.32
Recommendation
Adopt Resolution Setting Pre -Approved Engineering
News Record Adjustment Index (3%) for Usage -
Based and Flat Water Rates for Residential,
Commercial, and Industrial Customers
tL
Dilpast-le
AM
■ r`
N
■ FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 ■
Water Capital Outlay 561
Water Meter/Main Install. Project
Water Taps
Miscellaneous Water Mains
Water Meter Replacement Program (1% per yr.)
Public Improvement Reimbursements
GAC & Meter Repl (DBCP)
MUS PW Admin Building Roof
Meter Shop Design/Construction
SWTF PS Generator
SWTF Membrane Replacement
SWTF Transmission Line Expansion Design/Constr.
SWTF Capacity Expansion
Water Well Rehab
Well 22 -Pump Rehab/Replacement
Well 14 -Pump Rehab/Replacement
Well 16 -Pump Rehab/Electrical Upgrade
Well 17 -Pump Rehab/Electrical Upgrade
Well 21 -Pump Rehab/Electrical Upgrade
Well 23 -Pump Rehab/Electrical Upgrade
Well 25 -Pump Rehab/Electrical Upgrade
Well 15 -Pump Rehab/Electrical Upgrade
Well 9 -Pump Rehab/Electrical Upgrade
Well 5 -Pump Rehab/Electrical Upgrade
Well 18 -Pump Rehab/Electrical Upgrade
Vehicles/Equipment
Project Planning
Total Water Capital Outlay 561
$1,500,000
$1,500,000
$0
$0
$0
$20,000,000
$400,000
$400,000
$75,000
$75,000
$75,000
$75,000
$75,000
$75,000
$75,000
$75,000
$50,000
$50,000
$250,000
$250,000
$500,000
$500,000
$500,000
$500,000
$75,000
$75,000
$75,000
$75,000
$150,000
$150,000
$150,000
$150,000
$0
$0
$0
$0
$0
$0
$0
$0
$300,000
$300,000
$300,000
$300,000
$300,000
$300,000
$300,000
$300,000
$250,000
$80,000
$0
$0
$0
$0
$250,000
$275,865
$0
$0
$0
$0
$0
$200,000
$0
$0
$0
$0
$0
$0
$1,000,000
$0
$0
$0
$2,500,000
$0
$0
$50,000
$50,000
$0
$0
$500,000
$1,500,000
$0
$25,000
$25,000
$25,000
1,285,865 $2,805,000 $4,425,000 $2,925,000 $1,750,000 $2,550,000 $1,550,000 $21,550,000
$20,000,000
$400,000
$400,000
$400,000
$400,000
$400,000
$400,000 $400,000 $400,000
$250,000
$0
$0
$0
$0
$170,000
$0
$0
$0
$0
$165,000
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
$200,000
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
$0
$250,000
$0
$0
$0
$0
$0
$200,000
$0
$0
$0
$0
$0
$200,000
$0
$0
$0
$0
$0
$200,000
$50,000
$50,000
$100,000
$100,000
$100,000
$100,000 $100,000 $100,000
$25,000
$25,000
$25,000
$25,000
$25,000
$25,000 $25,000 $25,000
1,285,865 $2,805,000 $4,425,000 $2,925,000 $1,750,000 $2,550,000 $1,550,000 $21,550,000
Please immediately confirm receipt
o f this. fax by callin
333-6702
CITY OF LODI
P. O. BOX 3006
LODI, CALIFORNIA 95241-1910
ADVERTISING INSTRUCTIONS
SUBJECT: NOTICE OF PUBLIC HEARING TO CONSIDER RESOLUTION SETTING
PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX
FOR USAGE -BASED AND FLAT WATER RATES FOR RESIDENTIAL,
COMMERCIAL, AND INDUSTRIAL CUSTOMERS
PUBLISH DATE: SATURDAY, JANUARY 21, 2023
TEAR SHEETS WANTED: One (1) please
SEND AFFIDAVIT AND BILL TO: OLIVIA NASHED, CITY CLERK
LNS ACCT. #5100152 City of Lodi
P.O. Box 3006
Lodi, CA 95241-1910
DATED: THURSDAY, JANUARY 19, 2023
ORDERED BY: OLIVIA NASHED
CITY CLERK
PAMELA M. FARRIS
ASSISTANT CITY CLERK
KAYLEE CLAYTON
ADMINISTRATIVE CLERK
Emailed to the Sentinel at legals@lodinews.com at„�) on R (pages)
forms\advins.doc
DECLARATION OF POSTING
NOTICE OF PUBLIC HEARING TO CONSIDER RESOLUTION SETTING
PRE -APPROVED ENGINEERING NEWS RECORD ADJUSTMENT INDEX FOR
USAGE -BASED AND FLAT WATER RATES FOR RESIDENTIAL, COMMERCIAL,
AND INDUSTRIAL CUSTOMERS
On Thursday, January 19, 2023, in the City of Lodi, San Joaquin County, California, a
copy of a Notice of Public Hearing to consider resolution setting pre -approved
Engineering News Record adjustment index for usage -based and flat water rates for
residential, commercial, and industrial customers (attached hereto, marked Exhibit "A")
was posted at the following locations:
Lodi City Clerk's Office
Lodi City Hall Lobby
Lodi Carnegie Forum
WorkNet Office
I declare under penalty of perjury that the foregoing is true and correct.
Executed on January 19, 2023, at Lodi, California.
PAMELA M. FARRIS
ASSISTANT CITY CLERK
ORDERED BY:
OLIVIA NASHED
CITY CLERK
KAYLEQ CLAYTON
ADMINISTRATIVE CL K
\\cvcfilv0l\administration$\Administration\CLERKWgenda\City Council\Public
Hearings\AFFADAVITS\DECPOST 1. DOC
• CITY OF LOD i
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://us06web.zoom.us/j182063770661?pwd=N2xpOXE2bniVJ Umg50DFzRItVH UIJbZzo9
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.
Jan a D. agdich
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.
CLERK\PUBHEAR\NOTICES\NOIPW_ Wa(erRates2023 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 Proposed Rates
(Feb.2022) (Feb.2023)
Rate Increase --> 3.0%
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)
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 $
$ 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
Notes:
(1) Multi -family includes apartments, condominiums, and mobile home parks,