HomeMy WebLinkAboutStaff Report 11234City of Palo Alto (ID # 11234)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 4/21/2020
City of Palo Alto Page 1
Summary Title: Wastewater Collection Utility Financial Projections
Title: Staff Recommendation the Finance Committee Recommend the City
Council Make no Changes to Wastewater Rates for Fiscal Year (FY) 2021
Beginning July 1, 2020
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the Finance Committee recommend the Council make no
changes to Wastewater rates for July 1, 2020.
Executive Summary
At the April 21, 2020 Finance Committee meeting, staff will present a general overview
of the financial projections for the Wastewater Collection Utility.
Staff will present the full FY 2021 Wastewater Collection Utility Financial Plan and Cost
of Service Study once complete, at a future meeting date. Staff will target a meeting
date that is both after the COVID-19 emergency and that allows for full and in person
customer attendance and participation in the public meetings and hearing to discuss the
proposed rate changes.
Attachments:
•Attachment A: Presentation on Wastewater Collection Utility Financial Projections
APRIL 21, 2020 www.cityofpaloalto.org
WASTEWATER COLLECTION UTILITY FINANCIAL PROJECTIONS
Attachment A
TL
~CITY OF
~PALO ALTO
1
WASTEWATER PROJECTIONS
•FY 2021 proposal:
•0% overall rate increase
•Future projections (following four years)
•5% per year increases
2
WASTEWATER UTILITY COST STRUCTURE
Palo Alto’s share of the
cost to treat sewage at
Palo Alto’s Regional
Water Quality Control
PlantCost to collect sewage
within Palo Alto,
including: maintaining
and replacing sewer
infrastructure, customer
service, billing,
administration, etc.
Treatment
$12.2
million
57%
Collections
$9.1 million
43%
3
WASTEWATER UTILITY BASICS
•Five partners: Stanford, East Palo Alto, Los Altos Hills, Los
Altos, and Mountain View
•Wastewater drains from partner systems through the
City of Palo Alto Collection System, and into the City of
Palo Alto Regional Water Quality Control Plant (RWQCP)
for treatment
•City of Palo Alto Utilities Department manages collection
system, Public Works manages the RWQCP
4
TREATMENT COST DRIVERS
•Regional Water Quality Control Plant needs rehabilitation
•Long Range Facilities Plan completed in 2012
•Rehab/replacement of:
•Sedimentation tank ($17M)
•Outfall pipeline ($9M)
•Laboratory/Operations Center ($22M)
•Secondary Treatment ($30M)
•Advanced Water Purification ($23M)
•Headworks Facility ($39M)
5
OPERATIONS/CAPITAL COST DRIVERS
•Salary and benefit costs for existing staff
•Underground construction cost increases
•Capital Spending:
•Large Capital Improvement Projects will be conducted
every two years
6
WASTEWATER MEDIAN MONTHLY RESIDENTIAL BILL ($)
Palo Alto
Neighboring Communities
Menlo
Park
Redwood
City
Santa
Clara
Mountain
View Los Altos Hayward
41.37 98.08 81.76 42.91 42.05 38.44 34.30
Palo Alto is 26% below
comparison city average
7
WASTEWATER MONTHLY NON-RESIDENTIAL BILL ($)
Palo Alto
Neighboring Communities
Menlo
Park
Redwood
City
Santa
Clara
Mountain
View Los Altos Hayward
General
Commercial
111.58 135.24 107.80 72.10 131.18 66.03 76.16
Restaurant 690.48 1,118.88 1,033.20 666.40 602.00 264.13 541.52
Commercial: Palo Alto is 14% higher than
comparison city average
Restaurant: Palo Alto is 2% below
comparison city average
8
WASTEWATER PROJECTIONS
9
WASTEWATER OPERATIONS RESERVE PROJECTIONS
12
RECOMMENDATION
Staff recommends that the Finance Committee recommend
that the Council make no changes to Wastewater rates for
July 1, 2020