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Home My WebLink AboutAgenda Report - August 4, 2004 I-01AGENDA ITEM I M I CiTy OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Introduce Ordinance Repealing and Reenacting LMC §13.04-130 and Establishing Low Income Discounts for Water, Sewer and Refuse Services and Adopt Resolution Establishing Discounts MEETING DATE: August 4, 2004 PREPARED BY: Public Works Director RECOMMENDED ACTION: That the City Council introduce an ordinance repealing and reenacting LMC §13.04.130 establishing low income discounts for water, sewer and refuse services and adopt a resolution establishing discounts. BACKGROUND INFORMATION: In discussion on water and wastewater rates, the subject of providing a meaningful discount for low income residents was brought up. Staff is recommending a change in the City's current discount program as described below. Currently, the Lodi Municipal Code contains the following section: 13.04.130 Low income adjustments. The rates for residential water, sewer and refuse collection service as they now exist or may hereafter be modified under this chapter, shall be reduced by ten percent (exclusive of surcharges, if any) for those residential accounts in the names of person otherwise eligible for Supplemental Security Income (SSI), or State Supplement Payments (SSP), as determined by the Social Security Administration, which shall have sole discretion in determining such eligibility. Proof of eligibility may be required by the city to qualify for the rate adjustments provided herein. (Ord. 1445 § 1, 1989) In addition, the City has various electric and refuse programs, as summarized on Exhibit A. Note that the refuse discount was actually far greater than 10% due to the way past rate increases were handled; however, the rates adopted on April 27, 2004, eliminated that separate rate category. Customers in that rate category are being given the 3SI/56P 10% discount. There are about 1,300 customers receiving electric discounts, almost 900 receiving refuse discounts and about 300 receiving water/wastewater discounts. The actual number of customers on these discount programs varies due to both different eligibility criteria and the fact that not all customers pay each of these bills. For example, a landlord might pay water and sewer and the tenant pays refuse and electric. This recommendation is based on the fundamental concept that the City should have one set of eligibility criteria for its discount programs, although the amount of the discount may vary among the utilities; and, they would be set by resolution. This will allow one administrative process for approval rather than two or three. The text of the proposed ordinance is as follows: APPROVED: H. Dixbn Flynn, Cit� Manager CRateDiscountsOrdinance.doc 7/27/2004 Introduce Ordinance Repealing and Reenacting LMC §13.04.130 and Establishing Low Income Discounts for Water, Sewer and Refuse Services and Adopt Resolution Establishing Discounts August 4, 2004 Page 2 13.04.130 Low income adjustments. The rates for residential water, sewer and refuse collection service as they now exist or may hereafter be modified under this chapter, shall be reduced as established by resolution for those residential accounts in the names of persons meeting the eligibility criteria for applicable electric service discounts as provided in this Title. Proof of eligibility will be required by the city to qualify for the rate adjustments provided herein. A draft of the implementing resolution is attached, with the recommended discounts. The annual cost to the utilities, making various assumptions as to how many customers will seek the discounts is shown below. Assumptions * 95% of existing SHARE program customers would receive the discounts. This accounts for residential units in which the landlord pays the utility bill. No change is proposed to the eligibility criteria, so we have not assumed an increase in the number of SHARE customers. 0 100% of existing Senior/Fixed Income program customers will receive the discounts. 0 Same mix of billing classifications as current customers. 0 The discount percentages as recommended: SHARE Sr./Fixed Income Refuse 30% 10% Water 20% 10% Wastewater 20% 10% Costs (Revenue Loss) • "Cost" (actually a loss in revenue) is shown below. This is the total less estimated cost of existing program (annual). SHARE Sr./Fixed Income Refuse $7,930 $2,800 Water $60,300 $3,300 Wastewater $46,700 $2,500 • The equivalent "cost" to other rate payers in terms of lost revenue is approximately 8 to 27 cents per month. Staff also notes that Central Valley Waste Services has reviewed the proposed discounts and has sent a letter stating their concurrence (see attached). The ongoing verification of eligibility will be handled by the Finance Department, generally on an annual basis, depending on the circumstances under which a customer qualifies. FUNDING: Administration costs would be borne by the Electric, Water and Wastewater funds and revenue loss would occur in each of the four revenue funds. I *Jes RZMK!ru'eg�er, Finance Dfre�ct6r Richard C. Primajr. Public Works Director RCP/pmf Attachments cc: Alan Vallow, Electric utility Director Jim Krueger, Finance Director MateDiscountsOrdinance.dac 7/2712004 Exhibit A Refuse Rate Reduction Pro2ram Residential customers may apply for a reduction in their rate due to personal economic hardship. The rate reduction is actually a set rate depending on the size of the cart. 20 -gallon carts are currently at a rate of $8.24 and the 38 -gallon cart at $10.30. The criteria for this program is proof of income that meets the following guidelines: One person in household $12,000/year Each additional person add $2,000/year Once application is approved there is no follow-up procedure to verify continued eligibility. SHARIE Program This program allows residential customers to apply for a discount of 20% on their monthly utility bill. The criteria for this program is proof of income that meets the following guidelines: Number of Persons in Household Maximum Annual Household Income 1-2 $22,000 3 $25,900 4 $31,100 Each additional member $5,200 Once the application is approved, it is up to the applicant to notify the Finance Department within 30 days of becoming ineligible for the program. SSI & SSP Recipient Discount Program If a resident receives SSI or SSP, they may be eligible for a 10% discount on Water, Sewer and Refuse rates. Once the application is filled out, the Finance Department will send the form to the Social Security Administration to verify eligibility. Once approved, there is no follow-up procedure to verify continued eligibility. Senior Fixed Income Program This program allows for residential customers over the age of 62 with a maximum household income of $45,000 to apply for a 5% discount on their monthly electric bill. SHARE Program Discounts Notes: *Out of the 1355 Electric(SHARE Program) discounts, 209 also have water discounts and 211 have wastewater discounts Assuming all but 5% of existing SHARE Customers will receive discount 1355 95% 1287 Total Utility Total Revenue, Old # of Old Annual Proposed Estimated # Est. Revenue Net Increase Total % Loss, Approximate Customers Discount Revenue New rates Proposed Discounted of Eligible Loss w/ New in Revenue New Total % Amount on giMy w/discount Old Rates Rate Loss (May 2004 Discount Rate Customers Discount Shown Loss Loss New Rate Refuse (38 gallon) 580 $19.12 $10.30 $61,387.20 $19.64 30% $13.75 918 $64,906.27 $ 7,021,800 $0.23 (20 gallon) 233 $13.01 $8.24 $13,336.92 $13.36 30% $9.35 369 $17,747.42 1.1% $0.16 813 Subtotal: $74,724.12 Subtotal: $82,653.70 $7,929.58 1.2% Water 10% (not incl. infrastructure repl. chg.) 20% (on total charge) apartment, 1 bedroom 78 $11.60 $10.86 $694.51 $15.66 $12.53 338 $12,703.39 $0.13 apartment, 2 bedroom 48 $13.91 $13.02 $512.64 $18.78 $15.02 208 $9,374.98 $0.16 apartment, 3 bedroom 2 $16.69 $15.62 $25.63 $22.53 $18.02 9 $486.65 $0.19 house, 1 bedroom 22 $13.51 $12.65 $228.36 $18.24 $14.59 95 $4,158.72 $0.15 house, 2 bedroom 75 $16.22 $15.18 $934.20 $21.90 $17.52 325 $17,082.00 Old: $5,682,845 $0.18 house, 3 bedroom 66 $19.45 $18.21 $986.04 $26.26 $21.01 286 $18,024.86 0.1% $0.22 house, 4 bedroom 6 $23.36 $21.87 $107.64 $31.54 $25.23 26 $1,968.10 New: $7,663,316 $0.26 297 Subtotal: $3,489.02 Subtotal: $63,798.70 $60,309.67 0.8% Wastewater 10% (not incl. infrastructure repl. chg.) 20% (on total charge) house, 1 bedroom 100 $9.73 $9.20 $640.80 $12.16 $9.73 433 $12,636.67 $0.08 house, 2 bedroom 123 $12.97 $12.26 $1,050.91 $16.21 $12.97 533 $20,735.83 Old: $6,079,083 $0.10 house, 3 bedroom 68 $16.21 $15.32 $726.24 $20.27 $16.22 295 $14,351.16 0.0% $0.13 house, 4 bedroom 6 $19.46 $17.93 $110.02 $24.32 $19.46 26 $1,517.57 New: $7,615,375 $0.16 297 Subtotal: $2,527.97 Subtotal: $49,241.23 $46,713.26 0.6% Notes: *Out of the 1355 Electric(SHARE Program) discounts, 209 also have water discounts and 211 have wastewater discounts Assuming all but 5% of existing SHARE Customers will receive discount 1355 95% 1287 Senior/Fixed Income Program Discounts qqRty Refuse (38 gallon) (20 gallon) 0 $19.12 0 $13.01 0 Water $0.00 Total Utility Total apartment, 1 bedroom Revenue, Old # of Old Annual Proposed Estimated # Est. Revenue Net Increase Total % Loss, Approximate Customers Discount Revenue New rates Proposed Discounted of Eligible Loss w/ New in Revenue New Total % Amount on w/discount* Old Rates Rate Loss (May 2004) Discount Rate Customers Discount Shown Loss Loss New Rate 0 $19.12 0 $13.01 0 Water $0.00 $19.64 $8.24 apartment, 1 bedroom 0 $11.60 $0.00 apartment, 2 bedroom 0 $13.91 repl. chg.) apartment, 3 bedroom 0 $16.69 $13.91 house, 1 bedroom 0 $13.51 $0.00 house, 2 bedroom 0 $16.22 $18.24 house, 3 bedroom 0 $19.45 $19.45 house, 4 bedroom 0 $23.36 $0.00 $31.54 0 $0.00 Wastewater repl. chg.) $9.73 $0.00 house, 1 bedroom 0 $9.73 $16.21 house, 2 bedroom 0 $12.97 $19.46 house, 3 bedroom 0 $16.21 house, 4 bedroom 0 $19.46 0 $10.30 $0.00 $19.64 $8.24 $0.00 $13.36 Subtotal: $0.00 Old: $5,682,845 0% (not ind. infrastructure repl. chg.) $11.60 $0.00 $15.66 $13.91 $0.00 $18.78 $16.69 $0.00 $22.53 $13.51 $0.00 $18.24 $16.22 $0.00 $21.90 $19.45 $0.00 $26.26 $23.36 $0.00 $31.54 Subtotal: $0.00 0% (not incl. infrastructure repl. chg.) $9.73 $0.00 $12.16 $12.97 $0.00 $16.21 $16.21 $0.00 $20.27 $19.46 $0.00 $24.32 Subtotal: $0.00 Notes: *130 existing Electric Sr./Fixed Income customers; proposed new program for these utilities. Assuming all existing electric Sr/Fixed income customers will receive discount 130 100% 130 10% $17.68 10% $12.02 10% (on total charge) $14.09 $16.90 $20.28 $16.42 $19.71 $23.63 $28.39 10% (on total charge) $10.94 $14.59 $18.24 $21.89 93 37 Subtotal: 34 21 1 10 33 29 3 Subtotal: 44 54 30 3 Subtotal $2,191.82 $593.18 $2,785.01 $638.93 $473.26 $27.04 $218.88 $867.24 $913.85 $113.54 $3,252.73 $642.05 $1,050.41 $729.72 $87.55 $2,509.73 $ 7,021,800 $0.01 0.0% $0.01 $2,785.01 0.0% $0.00 Old: $6,079,083 $0.01 0.0% $0.01 New: $7,615,375 $0.01 $2,509.73 0.0% $0.01 $0.01 $0.01 $0.01 Old: $5,682,845 $0.01 0.0% $0.01 New: $7,663,316 $0.01 $3,252.73 0.0% $0.00 Old: $6,079,083 $0.01 0.0% $0.01 New: $7,615,375 $0.01 $2,509.73 0.0% rill E AV May 14,2004 Mr. Richard C. Prima, Jr. Public Works Director City of Lodi — Public Works Department 221 West Pine Street Post Office Box 3006 Lodi, CA 95241-1910 Re: Utility Discounts Dear Mr. Prima Central Valley Waste Services, Inc. A WASTE MANAGEMENT COMPANY 1333 E. Tunier Ro:id P0. 13 ox 24 1001 Lodi. C;djlonua 9�2-1 1 1 (2091 369-8274 i2G,I)i 3691-6894 Fax Thank YOU for the information and discussion regarding Staff's proposal to the Lodi City Council on the Utility Discounts. Central Valley Waste Services supports Staff's proposal regarding the 30% Share 0 C, Program Discountand the 10% Senior/Fixed Income Program Discount. If you have questions please call rne at (209) 333-5611. Sincerely q . < Pinasco Districi Matiager Central Valley Waste Services cc,: Mr. Alex Oseguera, Sacramento Market Area Mana-.er/WM, ORDINANCE NO. 1750 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LODI AMENDING CHAPTER 13.04 OF THE LODI MUNICIPAL CODE BY REPEALING AND REENACTING SECTION 13.04.130, RELATING TO LOW-INCOME ADJUSTMENTS BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LODI AS FOLLOWS: SECTION 1. Chapter 13.04 — "Service Generally" - is hereby amended by repealing and reenacting §13.04.130, relating to low-income adjustments to read as follows: 13.04.130 Low Income Adjustments. The rates for residential water, sewer, and refuse collection service as they now exist or may hereafter be modified under this chapter, shall be reduced as established by resolution for those residential accounts in the names of persons meeting the eligibility criteria for applicable electric service discounts as provided in this Title. Proof of eligibility will be required by the city to qualify for the rate adjustments provided herein. SECTION 2. This ordinance is adopted under Government Code §36934 based on health, safety, and welfare considerations arising from: (1) the City of Lodi's consideration of increased utility rates if adopted take effect prior to the City's ability to institute the low-income discounts considered herein; (2) If the increases are adopted prior to institution of the discounts, Lodi's low-income community may suffer financial hardship or inability to afford critical health and sanitary services. SECTION 3. All ordinances and parts of ordinances in conflict herewith are repealed insofar as such conflict may exist. SECTION 4. This ordinance shall be published one time in the "Lodi News -Sentinel," a daily newspaper of general circulation printed and published in the City of Lodi and shall be in force and take effect immediately after its passage and approval. Approved this day of _, 2004 LARRY D. HANSEN Mayor Attest: SUSAN J. BLACKSTON City Clerk State of California County of San Joaquin, ss. 1, Susan J. Blackston, City Clerk of the City of Lodi, do hereby certify that Ordinance No. 1750 was introduced at a regular meeting of the City Council of the City of Lodi held August 4, 2004, and was thereafter passed, adopted and ordered to print at a regular meeting of said Council held � 2004, by the following vote: AYES: COUNCIL MEMBERS — NOES; COUNCIL MEMBERS — ABSENT: COUNCIL MEMBERS — ABSTAIN: COUNCIL MEMBERS — I further certify that Ordinance No. 1750 was approved and signed by the Mayor on the date of its passage and the same has been published pursuant to law. SUSAN J. BLACKSTON City Clerk Approved as to Form: D. STEPHEN SCHWABAUER City Attorney RESOLUTION NO. 2004-158 A RESOLUTION OF THE LODI CITY COUNCIL ESTABLISHING LOW-INCOME DISCOUNTS FOR WATER, SEWER, AND (3E1FUSE SERVICES WHEREAS, with the implementation -of hew water, sewer, and refuse rates and charges adopted April 27, 2004, the Lodi City Council has now introduced Ordinance No. 1750 amending Lodi Municipal Code Chapter 13.04, §13.04.130, "Low Income Adjustments," at its August 4, 2004, City Council meeting; and I I WHEREAS, the City Council now desires to adopt a resolution establishing discounts for eligible low-income residents. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby approve and establish low-income discounts for water, sewer, and refuse services as shown below, which shall become effective the first billing period following the effective date of Ordinance: For Residential Customers who qyalify for the Electric SHARE Program discount: Water 20% Discount on the Residential Fiat Rate Wastewater 20% Discount on the Residential Flat Rate for Disposal to the Domestic System Refuse 30% Dis�unt for Cart Service Categories 1, 2, 3, 4, and 5 OR, For Residential Customers who quality for the Electric Senior/Fixed-Income discount: Water 10% Discount on the Residential Flat Rate Wastewater 10% Discount on the Residential Flat Rate for Disposal to the Domestic System Ref use 10% Discount for Cart Service Categories 1, 2, 3, 4, and 5 BE IT FURTHER RESOLVED that the City Council does hereby direct staff to institute a verification program whereby every three years 10% of 1/3 of the applicants' eligibility is re -confirmed. Dated: August 4, 2004 ----------- I hereby certify that Resolution No. 2004-158 was passed and adopted by the City Council of the City of Lodi at its regular meeting held August 4, 2004, by the following vote: AYES: COU14CIL MEMBERS — Hitchcock, Land, and Mayor Hansen NOES: COUNCIL MEMBERS — Beckman and Howard ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None SUSAN J. BLACK�T N City Clerk 2004-158