HomeMy WebLinkAboutStaff Report 160-09TO: HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM: CITY MANAGER
BUDGET
'09 - `10
DEPARTMENT: PUBLIC WORKS
DATE: MARCH 31, 2009 CMR:160:09
SUBJECT: Recommendation for No Rate Increase to Utility Rate Schedule D-1
(Storm and Surface Water Drainage) for Fiscal Year 2009-10
RECOMMENDATION,
Staff recommends that there be no rate increase to Utility Rate Schedule D-1 (Storm and Surface
Water Drainage) for Fiscal Year 2009-10.
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 on May 9,
2005. 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 month per ERU, effective June 1, 2005. The Council -approved
rate for FY 2008-09 is $10.95 per month per ERU.
DISCUSSION
Staff has determined from Bureau of Labor Statistics records that the local Consumer Price Index
did not increase between December 2007 and December 2008. Therefore, staff recommends that
the Storm Drainage Fee remain at its current rate of $10.95 per month per ERU for the fiscal
year 2009-10. Staff will continue to review inflation statistics on an annual basis and
CMR:160:09 Page 1 of 2
recommend future rate increases as appropriate. Single-family residential properties are billed a
monthly amount based on parcel size, in accordance with the following table:
RESIDENTIAL RATES=(SingleFamily Rpm dential Properties)
PARCEL SIZE (sq.ft.)
ERU
< 6,000 sq.ft.
0.8 ERU
6,000-11,000 sq.ft.
1.OERU
> 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
Staff will consider a potential increase in the Storm Drainage Fee as part of the fiscal year 2010-
2011 budget process, based on inflation statistics for calendar year 2009.
ENVIRONMENTAL REVIEW
Review of changes to utility rate schedules does not represent a project under pursuant to Public
Resources Code §21065, thus no review is required under the California Environmental Quality
Act (CEQA).
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
cc: Storm Drain Oversight Committee
Palo Alto Chamber of Commerce
JO
Se
'TERESI
or Engineer
GLENN S. ROBERTS
Director of Public Works
JA D: KEENE
Ci i anager
CMR:160:09 Page 2 of 2