HomeMy WebLinkAboutStaff Report 243-08CMR:243:08 Page 1 of 2
TO: HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE: MAY 13, 2008 CMR:243:08
SUBJECT: ADOPTION OF A RESOLUTION AMENDING UTILITY RATE
SCHEDULE D-1 (STORM AND SURFACE WATER DRAINAGE) TO
INCREASE STORM DRAIN RATES BY 3.8% TO $10.95 PER MONTH
(PER EQUIVALENT RESIDENTIAL UNIT)
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 3.8% rate increase to
$10.95 per month per Equivalent Residential Unit beginning in Fiscal Year 2008-09.
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. The approved ballot measure contained an annual
fee escalator clause that permits the Council to increase the Storm Drainage Fee each year to
account for inflation. 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 month per ERU, effective June 1, 2005. The current rate,
approved by Council in 2007, is $10.55 per month per ERU.
BUDGET
’08 - ‘09
CMR:243:08 Page 2 of 2
DISCUSSION
Staff has determined from Bureau of Labor Statistics records that the local Consumer Price Index
increased by 3.8% between December 2006 and December 2007. Staff recommends that the
Storm Drainage Fee be increased by this amount in order to keep fund revenues consistent with
general cost increases. In order to enact the Storm Drainage Fee CPI 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 $10.95 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, 2008.
ENVIRONMENTAL REVIEW
Adoption of changes to utility rate schedules does not represent a project under the California
Environmental Quality Act (CEQA).
ATTACHMENT
Attachment A: 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: ______________________________________
KELLY MORARIU and STEVE EMSLIE
Deputy City Managers
cc: Storm Drain Oversight Committee
Palo Alto Chamber of Commerce