HomeMy WebLinkAboutStaff Report 4489City of Palo Alto (ID # 4489)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 4/15/2014
City of Palo Alto Page 1
Counci l Priority: City F inances
Summary T itle: Storm Drain Fee Increase for FY 2015
Title: Adoption of a Resolution Amending Utility Rate Schedule D-1 (Storm
and Surface Water Drainage) Reflecting a 2.6% CPI Rate Increase to $12.30
Per Month Per Equivalent Residential Unit for F iscal Year 2015
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee recommend that Council adopt
the attached resolution (Attachment A) amending Utility Rate Schedule D-1
(Storm and Surface Water Drainage), to implement a 2.6% rate increase,
increasing the monthly charge per Equivalent Residential Unit by $0.31, from
$11.99 to $12.30 for Fiscal Year 2015.
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, 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
City of Palo Alto Page 2
$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 adopted 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 2014 is $11.99 per month per ERU.
Discussion
Staff has determined from Bureau of Labor Statistics records that the local CPI for
the San Francisco-Oakland-San Jose CMSA increased by 2.6% between December
2012 and December 2013. As the CPI rate is substantially lower than 6%,
consistent with the ballot measure, staff recommends that the Storm Drainage
Fee be increased by the CPI in order to keep fund revenues consistent with
general cost increases and to provide sufficient funds for planned storm drain
capital expenditures. In particular, the increased revenue is needed to cover
rising construction costs for the remaining storm drain capital improvement
projects. Approval of the rate increase will help to ensure that staff can complete
all seven of the capital projects specified in the 2005 ballot measure before the
fee increase sunsets in June 2017. In order to enact the Storm Drainage Fee
increase, Council must adopt the attached resolution amending Utility Rate
Schedule D-1 (Storm and Surface Water Drainage). The new rate for the Storm
Drainage Fee will be $12.30 per month per ERU. Single-family residential
properties are billed a monthly amount based on parcel size, in accordance with
the following table:
City of Palo Alto Page 3
RESIDENTIAL RATES (Single-Family Residential Properties)
PARCEL SIZE (sq.ft.)ERU FY2014 RATE FY2015 RATE
< 6,000 sq.ft.0.8 ERU $9.59/month $9.84/month
6,000-11,000 sq.ft.1.0 ERU $11.99/month $12.30/month
> 11,000 sq.ft.1.4 ERU $16.79/month $17.22/month
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.
Resource Impact
The 2.6 percent increase in rates is expected to increase annual revenue to the
Storm Drainage Fund by approximately $150,000 and,if recommended,will be
included in the Public Works Department Storm Drainage Fund FY 2015 Proposed
Operating budget.
Timeline
The Storm Drainage Fee increase will take effect on July 1, 2014.
Environmental Review
Adoption of changes to utility rate schedules does not represent a project under
the California Environmental Quality Act (CEQA).
Courtesy Copies
Storm Drain Oversight Committee
Palo Alto Chamber of Commerce
Attachments:
·A -Resolution (PDF)
Not Yet Approved
1
130319 jb 0131057
Resolution No. ______
Resolution of the Council of the City of Palo Alto Amending Utility Rate
Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm
Drain Rates by 2.6% Per Month Per Equivalent Residential Unit for
Fiscal Year 2015
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in
accordance with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility
Rate Schedule, as amended, shall become effective July 1, 2014.
SECTION 2. The Council finds that this rate increase is being imposed to offset the
effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator
provision of the Storm Drainage Fee ballot measure, which was approved by a majority of Palo
Alto property owners on April 26, 2005.
SECTION 3. The Council finds that the revenue derived from the authorized
adoption enumerated herein shall be used only for the purpose set forth in Article VII, Section
2, of the Charter of the City of Palo Alto.
SECTION 4. The Council finds that modification and approval of this change to the
Utility Rate Schedule D-1 (Storm and Surface Water Drainage) for the purpose of meeting
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Not Yet Approved
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130319 jb 0131057
operating expenses is statutorily exempt from California Environmental Quality Act (CEQA)
review, pursuant to Public Resources Code Section 15273(a).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Senior Asst. City Attorney City Manager
_____________________________
Director of Public Works
_____________________________
Director of Administrative
Services
GENERAL STORM AND SURFACE WATER DRAINAGE
UTILITY RATE SCHEDULE D-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 7-1-2014
Supersedes Sheet No.D-1-1 dated 7-1-2013 Sheet No. D-1-1
A. APPLICABILITY:
This schedule applies to all storm and surface water drainage service, excepting only those
users and to the extent that they are constitutionally exempt under the Constitution of the
State of California or who are determined to be exempt pursuant to Rule and Regulation 25.
B. TERRITORY:
Inside the incorporated limits of the city of Palo Alto and land owned or leased by the city.
C. RATES:
Per Month:
Storm Drainage Fee per Equivalent Residential Unit (ERU) .......................................................$12.30
D. SPECIAL NOTES:
1. An Equivalent Residential Unit (ERU) is the basic unit for computation of storm
drainage fees for residential and non-residential customers. All single-family residential
properties shall be billed the number of ERUs specified in the following table, based on
an analysis of the relationship between impervious area and lot size for Palo Alto
properties.
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
All other properties will have ERU's computed to the nearest 1/10 ERU using the
following formula:
No. of ERU = Impervious Area (Sq. Ft.)
2,500 Sq. Ft.
2. For more details on the storm drainage fee, refer to Utilities Rule and Regulation 25.
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