HomeMy WebLinkAboutStaff Report 220-06
CMR:220:06 Page 1 of 2
TO: HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM: CITY MANAGER DEPARTMENT:PUBLIC WORKS
DATE: MAY 9, 2006 CMR:220:06
SUBJECT: APPROVAL OF A RESOLUTION AMENDING UTILITY RATE
SCHEDULE D-1 (STORM AND SURFACE WATER DRAINAGE)
REFLECTING A 2% RATE INCREASE TO $10.20 PER MONTH PER
EQUIVALENT RESIDENTIAL UNIT FOR FISCAL YEAR 2006-07
RECOMMENDATION
Staff recommends that Council approve the attached resolution (Attachment A) amending Utility
Rate Schedule D-1 (Storm and Surface Water Drainage), to implement a 2% rate increase to
$10.20 per month per Equivalent Residential Unit for Fiscal Year 2006-07.
BACKGROUND
On April 26, 2005, a majority of Palo Alto property owners approved a ballot measure
authorizing an increase in the monthly Storm Drainage Fee to fund storm drain capital
improvements and augmented maintenance. Council certified the results of the ballot proceeding
on May 9. The approved ballot measure contained an annual fee escalator clause that permits the
Council to consider raising the Storm Drainage Fee each year to account for inflationary cost
increases. Specifically, the ballot measure stated that:
“In order to offset the effects of inflation on labor and material costs, the proposed
fee increase would be subject to annual increases beyond the initial $10.00 per
Equivalent Residential Unit (ERU) rate as of July 1 of each year, starting in 2006.
Inflation adjustments would be based on the lesser of the local rate of inflation
(based on the change in the Consumer Price Index [CPI] for the San Francisco-
Oakland-San Jose CMSA, published by the United States Department of Labor,
Bureau of Labor Statistics) or 6 percent. The City Council would have the
authority and discretion to implement inflation adjustments on an annual basis as
part of the City budget process.”
On May 9, 2005, Council approved a resolution increasing the Storm Drainage rate
schedule to $10.00 per ERU, effective June 1, 2005.
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DISCUSSION
Administrative Services staff has determined from the above cited Bureau of Labor Statistics that
the CPI increased by 2.0% between December 2004 and December 2005. Staff recommends that
the Storm Drainage Fee be increased by this amount in order to attempt to keep fund revenues
consistent with increasing labor and materials costs. In order to enact the Storm Drainage Fee
increase, Council must approve the attached resolution amending Utility Rate Schedule D-1
(Storm and Surface Water Drainage). The new rate for the Storm Drainage Fee will be $10.20
per month per ERU. Single-family residential properties are billed a monthly amount based on
parcel size, in accordance with the following table:
RESIDENTIAL RATES (Single-Family Residential Properties)
PARCEL SIZE (sq.ft.) ERU
< 6,000 sq.ft. 0.8 ERU
6,000-11,000 sq.ft. 1.0 ERU
> 11,000 sq.ft. 1.4 ERU
Commercial, industrial, institutional, and multi-family residential properties are billed on a
monthly basis at a rate of 1.0 ERU for each 2,500 square feet of impervious surface on the
parcel.
TIMELINE
The Storm Drainage Fee increase will take effect on July 1, 2006.
ENVIRONMENTAL REVIEW
Adoption of changes to utility rate schedules does not represent a project under California
Environmental Quality Act (CEQA).
ATTACHMENT
Attachment: Resolution Amending Utility Rate Schedule D-1 (Storm and Surface Water
Drainage)
PREPARED BY: _______________________________
JOE TERESI
Senior Engineer
DEPARTMENT HEAD: ________________________________
GLENN S. ROBERTS
Director of Public Works
CITY MANAGER APPROVAL: ________________________________
EMILY HARRISON
Assistant City Manager
cc: Storm Drain Oversight Committee
Palo Alto Chamber of Commerce