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Staff Report 282-07
TO: FROM: DATE: SUBJECT: BUDGET ’07- ’09 City of Palo Alto HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: UTILITIES JUNE 11, 2007 CMR: 282:07 TRANSMITTAL OF FINANCE COMMITTEE AND UTILITIES ADVISORY COMMISSION RECOMMENDATION FOR APPROVAL OF A WATER REVENUE INCREASE OF $2.2 MILLION FOR FISCAL YEAR 2007-08, CONCEPTUAL APPROVAL OF A ~VATER REVENUE INCREASE OF $2.5 MILLION FOR FISCAL YEAR 2008-09, AND ADOPTION OF A RESOLUTION AMENDING WATER UTILITY RATE SCHEDULES W-l, W-2, W-4 AND W-7, INCLUDING RATE CHANGES, ESTABLISHMENT OF MONTHLY WATER SERVICE CUSTOMER CHARGES, AND DISCONTINUANCE OF DISCOUNTED IRRIGATION RATES. RECOMMENDATION The Finance Committee and the Utilities Advisory, Commission (UAC) recommend that the City Council adopt the attached resolution to: (a)Approve a 10 percent increase to the average system retail water rate, for Fiscal Year (FY) 2007-08, effective July 1, 2007, which will increase mmual revenue by $2.2 million. This increase includes the reinstatement of monthly fixed charges, discontinued at the beginning of FY 2003-04, for all customer classes, in order to collect a portion of the utility’s fixed operating costs. Revenues from the fixed "customer charge" comprise $1.6 million of the requested $2.2 million increase. (b) Approve the changes to the Water Utility Rate Schedules, as attached; (c)Approve the discontinuance of the current discounted rate for commercial, industrial and institutional irrigation customers; and, (d)Conceptually approve, in concept, of a 10 percent average system water rate increase for FY 2008-09, which will increase annual revenue by an additional $2.5 million. CMR:282:07 Page 1 of 6 BACKGROUND Propositiou 218 Notice and Public Communications Water, wastewater and refuse fees are subject to the requirements of Proposition 218, codified in Article 13D of the California Constitution. Pursuant to Proposition 218, the City must provide written notice of any new or increased water, wastewater, or refuse utility fee to those subject to the proposed fee. A public hearing on the new or increased fee must be held not less than 45 days after mailing notice to those subject to the proposed increase. At the hearing, the Council will consider all protests, and if written protests against the proposed fee are presented by a majority of those subject to the fee, the City may not impose the fee. On April 23, 2007, Utilities and Public Works jointly mailed over 27,000 "Notice of Utility Rate Change" letters to impacted customers at a cost of $17,000. Wastewater customers were not notified since there is no proposed rate increase for wastewater collection for FY 2007-08. As part of the public notification campaign, City staff posted an electronic copy of the "Notice" on the Utilities Department Internet web site, released two "Frank’s Memos" explaining the rate increases at the beginning and end of May, placed a notification in all May 2007 Utilities bills in the "Utility Comlnunity Announcements" section, and posted a "Frequently Asked Questioias" list on the Utilities Department web site. In addition, staff had conversations with media representatives and continues to meet with interested members of the public. A Utilities bill insert outlining the Council-approved rates changes is anticipated for July distribution. DISCUSSION l’Vater Utility Revenue Requirement In June 2006, the City Council approved a 7 percent average system water rate increase for FY 2006-07. The Water Utility sales levels for FY 2006-07 have remained flat, and projections for Fiscal Year 2007-08 and beyond assume either flat or declining sales due to voluntary reductions due to drought conditions in California. The key drivers for this water rate increase are: a decrease in sales volume, increased wholesale water rates from San Francisco Public Utilities Commission (SFPUC) that were received after Council approval of the FY 2006-07 Budget, and increases in Water Utility operating costs. Customer The Water Utility has fixed operating costs to provide water service to any customer, regardless of the amount of water used. These costs include customer se~wice and administrative expenses that do not vary significantly over time, such as Phone Center staffing, meter reading, billing, and collections. The current Water Utility volumetric pricing methodology, where all utility revenues are collected from the price of the water consumed, creates fluctuations in revenues due to reduced CMR:282:07 Page 2 of 6 customer water consmnption from conservation and efficiency improvements, unusually long wet weather patterns, oi- customer drought response. These fluctuations result in under-collection of fixed operating expenses from customers and can contribute to the annual variability of water rates. Even with the proposed $2.2 million revenue increase, a !0% drop in sales during FY 2007-08 due to drought-related conservation would result in a revenue loss to the Water Fund of $2.4 million. A $5 lnonthly "customer charge" is proposed for most residential customers, which represents 48 percent of tile fully allocated monthly customer costs of $10.40 based on the Water Utility’s cost-of-service study. Table 1: Residential Water Costs (per CCF) First Tier Second Tier FY 2006-07 (current)$4.040 $4.270 FY 2007-08 $4.507 $4.737 Without Customer Charge FY 2007-08 $3.949 $4.510 With $5 Customer Charge Table 2: Monthly Water Bill Comparison for Residential Users 5/8" meter No Customer Charge With $5!month Customer Charge Number & Percentage of Residential Customers (%) Small Residential $17.35 $20.80 User (4-7ccf/month)($1.19 increase)($4.64 increase)6,145 (38.2%) Average Residential $64.66 $64.21 User (10-($6.49 increase)($6.04 increase)4,661 (29.1%) 14ccf/month) Large Residential $24! .01 $226.57 User (>14ccf/month)($29.13 increase)($14.68 increase)21,286 (32.7%) For commercial customers, the monthly customer charge will be based on meter size, and be effective July 1, 2007. The monthly customer charge will range from $5 for tile 518 inch meter to $383.67 for the 8 inch and 10 inch meters. Staff recommends establishing the residential monthly customer charge at $5 per month resulting in a 48 percent cost-of-service recovery of fixed operating expenses until completing an analysis of the monthly charges of other regional water utilities. This analysis will be presented to CMR:282:07 Page 3 of 6 Council during the FY 2008-09 Budget process. The commercial charges will continue to be fully allocated based upon updated cost-of-service studies. Collecting each customer’s portion of fixed operating expenses from that customer (for the service to provide them with water) continues to provide an accurate price signal for the water itselt: This is consistent with City of Palo Alto’s Comprehensive Plan (Natural Resources Section, Program N-62) to encourage responsible use of water and conservation of a valued natural resource, by charging customers an increasing amount for increased water usage. Discounted IrriT, ation Rate The Water Utility established Water Rate W-7 for irrigation-only customers in FY 2002-03. The unit cost at that time was the same as the commercial W-4 Water Rate Schedule. In FY 2003-04, a discount was established that charged W-7 customers 10 percent less than W-4 customers. The purpose of the discount was to provide a financial incentive to large landscape users to install the dedicated irrigation meters required under the W-7 Rate Schedule. The W-7 discount was decreased to 5 percent for FY 2006-07, and is proposed to be eliminated for FY2007-08. The reason for establishing the W-7 discount was to provide an incentive for irrigation-only- customers to split their domestic water systems into indoor and outdoor services and to install dedicated irrigation meters in order to: 1) allow the Water Utility to provide the proper price signals to customers during drought periods; 2) support "Best Management Practice #5 for Large Landscapes" by providing water consumption information to customers for both their indoor and outdoor systems with the goal of identifying and implementing cost-effective efficiency improvements; and 3) allow the customer to better manage limited water availability durillg ail emergency condition. There are 280 customers currently on the W-7 Water Rate, and the goals established for the incentive discount have been met. Therefore, discount prices are no longer necessary to encourage customer participation. The loss of the discount can be offset by each customer through efficiency and conservation improvements. Reseloves With the approval of the proposed 10 percent increase, the Water Rate Stabilization Reserve (W- RSR) balance is projected to be $12.4 million by the end of FY 2007-08 or $200,000 above the Maximum Guideline level approved by Council. This $12.4 million includes $8.5 million in I’unds to be returned from closed water supply Capital Improvement Program (CIP) projects. This amount would be used to provide partial funding for the City’s Emergency Water Supply project starting in FY 2008-09. With the proposed Fiscal Year 2008-09 rate increase, the W-RSR balance at the end of FY 2008-09 is expected to be $3.4 million, which is $200,000 below the Minimum Guideline level and below the Risk Assessment level of $3.6 million. CMR:282:07 Page 4 of 6 FINANCE COMMITTEE REVIEW AND RECOMMENDATIONS On April 17, 2007, the Finance Committee voted 4 to 0, to reconamend that the City Counci!: (a)Approve a 10 percent increase to water retail rates for Fiscal Year (FY) 2007-08, effective July 1, 2007, which will increase annual revenue by $2.2 million and result in a projected year-end W-RSR balance of $12.4 million; (b)Approve the discontinuance of the current discounted rate for commercial, industrial and institutional irrigation customers; (c)Approve a fixed monthly "customer charge" for all customer classes, irrespective of their monthly water consumption, in order to collect a portion of the utility’s fixed operating costs; and (d) Approve the changes to the Water Utility Rate Schedules, as attached. In addition, for biennial budgeting purposes, Finance Committee recommended approval, in concept, of a 10 percent average systeln water rate increase for FY 2008-09, which will increase animal revenue by an additional $2.5 million resulting in a projected year-end W-RSR balance of $3.4 million. UTILITIES ADVISORY COMMISSION REVIEW AND RECOMMENDATIONS On April 4, 2007, the UAC voted 4 to 0, with one absent, to recommend that the City Council: (a) Approve a 10 percent increase to water retail rates, for Fiscal Year (FY) 2007-08, effective July 1, 2007, which will increase annual revenue by $2.2 million; (b) Approve the discontinuance of the CUlTent discounted rate for commercial, industrial and institutional irrigation customers; and, (c) Approve a monthly "Customer Charge" for all customer classes, irrespective of their monthly water consumption, in order to collect a portion of the utility’s fixed operating costs. The UAC voted to withhold conceptual approval of a 10 percent average system water rate increase for Fiscal Year 2008-09 due to uncertainties associated ~vith future costs time, but instead to wait for next year’s budget process to evaluate the necessary rate increase. ALTERNATIVES Staff evaluated the impact of alternative rate proposals to the proposed $2.2 million revenue requirement. Any smaller rate increase would require reducing some combination of the operating budget, Capital Improvement Program (CIP), or depleting the W-RSR. Reducing the operating budget would negatively impact ongoing system maintenance, thus increasing system CMR:282:07 Page 5 of 6 water losses and leading to higher capital costs. Reducing the CIP would hinder water main replacement projects, where the infrastructure has exceeded its system design life. Withdrawals from the W-RSR are not recommended, since even the proposed rate increase will result in the Reserve balance being below both the Minimum Guideline level and the Risk Assessment target. POLICY IMPLICATIONS This proposed rate increase meets the Utilities Strategic Plan objective of providing superior financial performance to the City and investing in utilities infrastructure to deliver reliable service. The reinstatement of a monthly customer charge for water service represents a return to former rate design, but does not represent a change in current City policies. ENVIRONMENTAL REVIEW The adoption of the resolution does not constitute a project under the California Environmental Quality Act, California Public Resources Code section 21080, subdivision (b)(8). Therefore, no environmental assessment is required. ATTACHMENTS A~ B. C. D. E. F. Resolution Water Rate Schedules W-l, W-2, W-4, and W-7 Report to the UAC flom its April 4, 2007 meeting: Proposed Water Rate Increase Extract from the City of Palo Alto Utilities Department web site "FAQ’s on Proposed Water Rates for FY 2007-08" (City of Palo Alto ~veb site) "Notice o fUtility Rate Change", letter dated April 23, 2007, to customers of record PREPARED BY:LUCIE HIRMINA Utilities Rates Manager TOM AUZENNE Assistant Director, Customer Support Services DEPARTMENT HEAD: CITY MANAGER APPROVAL: O. FONG Directoll;o f UtiliO es ~ EMILY HARRISON Assistant City Manager CMR:282:07 Page 6 of 6 NOT YET APPROVED ATTACHMENT A RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING UTILITY RATE SCHEDULES W-l, W-2, W-4, AND W-7 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAINING TO WATER RATES WHEREAS, pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the City Council may by resolution adopt rules and regulations governing utility services and the fees and charges therefore; and WHEREAS, pursuant to Article XIIID Sec. 6 of the California Constitution, on June 11, 2007 the Council of the City of Palo Alto held a public hearing to consider all protests against the proposed water rate fee increases; and WHEREAS, the total number of written protests presented by the close of the public heating was less than fifty percent (50%) of the total number of customers subject to the proposed water rate fee increases. NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-1 (General Residential Water Service) is hereby amended to read in accordance with sheet W-l-l, attached hereto and incorporate herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-2 (Water Service from Fire Hydrants) is hereby amended to read in accordance with sheet W-2-1, attached hereto and incorporate herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-4 (General Non-Residential Water Service) is hereby amended to read in accordance with sheet W-4-1, attached hereto and incorporate herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-7 (Irrigation Water Service) is hereby amended to read in accordance with sheet W-7-1, attached hereto and incorporate herein. The foregoing Utility Rate Schedule, as amended, shall become effective July 1, 2007. 070606syn 6050161 NOT YET APPROVED SECTION 5. 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 6. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, California Public Resources Code section 21080, subdivision (13)(8). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: Deputy City Attorney City Manager Director of Utilities Director of Administrative Services 070606 syn 6050161 2 ATTACHMENT B GENERAL RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-1 APPLICABILITY: This schedule applies to all residential single family water service. TERRITORY: Inside and outside the incorporated limits of the City of Palo Alto and land owned or leased by the City. RATES: Monthly Customer Charge: Per Meter Per Month For 5/8-inch meter For 3/4 inch meter For 1 inch meter For 1 1/2 inch meter For 2-inch meter For 3-inch meter For 4-inch meter For 6-inch meter For 8-inch meter For 10-inch meter ............................................................................................................$5.00 ............................................................................................................12.27 ............................................................................................................19.37 ............................................................................................................77.65 ............................................................................................................130.60 ............................................................................................................260.43 ............................................................................................................383.67 ............................................................................................................383.67 Commodity Rate: (To be added Customer Charge and applicable to all pressure zones.) Per Meter Per Hundred Cubic Feet Per Month All Pressure Zones First 7 Ccf Over 7 Ccf ........................................................................................................................ $3.949 4.510 Temporary unmetered service to residential subdivision developers, per connection ........................................................................$6.00 CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. W-1-1 dated 7-1-2006 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No. W-l-1 WATER SERVICE FROM FIRE HYDRANTS UTILITY RATE SCHEDULE W-2 A. APPLICABILITY: This schedule applies to all water taken from fire hydrants for construction, maintenance, and other uses in conformance with provisions of a Hydrant Meter Permit. B. TERRITORY: Within the water service area of the City of Palo Alto. RATES: 1. Monthly Customer Charge. METER SIZE 5/8 inch ...........................................................................................................................50.00 3 inch ...........................................................................................................................125.00 2. Commodity Rate: (per hundred cubic feet) ...................................................................$4.34 D. SPECIAL NOTES: o o Monthly charges shall include the applicable monthly customer charge in addition to usage billed at the commodity rate. Any applicant using a hydrant without obtaining a Hydrant Meter Permit or any permittee using a hydrant without a Hydrant Meter Permit shall pay a fee of $50.00 for each day of such use in addition to all other costs and fees provided in this schedule. A hydrant permit may be denied or revoked for failure to pay such fee. A meter deposit of $750.00 may be charged any applicant for a Hydrant Meter Permit as a prerequisite to the issuance of a permit and meter(s). A charge of $50.00 per day will be added for delinquent return of hydrant meters. A fee will be charged for any meter returned with missing or damaged parts. Any person or company using a fire hydrant as described in D. 1 above or who draws water from a hydrant without a meter installed and properly recording usage shall, in addition to all other applicable charges be subject to criminal prosecution pursuant to the Palo Alto Municipal Code. CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. W-2-1 dated 7-1-2006 Effective 7-1-2007 Sheet No. W-2-1 GENERAL NON-RESIDENTIAL WATER SERVICE UTILITY RATE SCHEDULE W-4 APPLICABILITY: This schedule applies to non-residential water service in the City of Palo Alto and its distribution area. This schedule is also applicable to multi-family residential customers served through a master meter. TERRITORY: Inside the incorporated limits of the City of Palo Alto, on land owned or leased by the City, and any other land serviced by the Palo Alto Water Utility. RATES: Monthly Customer Charge For 5/8-inch meter For 3/4-inch meter For 1-inch meter For 1 1/2 inch meter For 2-inch meter For 3-inch meter For 4-inch meter For 6-inch meter For 8-inch meter For 10-inch meter Per Meter Per Month ................................................................................................$5.00 ................................................................................................12.27 ................................................................................................19.37 ................................................................................................77.65 ................................................................................................130.60 ................................................................................................260.43 ................................................................................................383.67 ................................................................................................383.67 Commodity Rates: (to be added to Customer Charge) Per Meter Per Month Per Hundred Cubic Feet All Pressure Zones Per Ccf ........................................................................................................................ $4.341 {Endl CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. W-4-1 dated 7-1-2006 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No. W-4-1 IRRIGATION WATER SERVICE UTILITY RATE SCHEDULE W-7 APPLICABILITY: This schedule applies to non-residential water service supplying dedicated irrigation meters in the City of Palo Alto and its distribution area. TERRITORY: Inside the incorporated limits of the City of Palo Alto, on land owned or leased by the City, and any other land serviced by the Palo Alto Water Utility. RATES: Monthly Customer Charge For 5/8-inch meter For 3/4-inch meter For 1-inch meter For 1 1/2 inch meter For 2-inch meter For 3-inch meter For 4-inch meter For 6-inch meter For 8-inch meter For 10-inch meter Per Meter Per Month ................................................................................................ $5.00 ................................................................................................5.00 ................................................................................................12.27 ................................................................................................19.37 ................................................................................................77.65 ................................................................................................130.60 ................................................................................................ 260.43 ................................................................................................ 383.67 ................................................................................................ 383.67 Commodity Rates: (to be added to Customer Charge) Per Meter Per Month Per Hundred Cubic Feet All Pressure Zones Per Ccf ........................................................................................................................ $4.341 {End} CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. W-7-1 dated 7-1-2006 CITY OF PALO ALTO UTILITIES Effective 7-1-2007 Sheet No. W-7-1 ATTACHMENT C MEMOILA, NDUM 3 TO:UTILITIES ADVISORY COMMISSION FROM:UTILITIES DEPARTMENT DATE:APRIL4, 2007 SUBJECT: RECOMMENDED FY 2007-08 WATER RATE INCREASE RECOMMENDATION This report requests that the Utilities Advisory Cow_mission (UAC) recommend that the City Council: a) Approve a 10 percent retail water rate, or $2.2 million revenue, increase effective July I, 2007; b) Approve, in concept, another 10 percent retail water rate or $2.5 million revenue increase, for FY 2008-09; c) Approve the discontinuance of the current discounted rate for commercial, industrial and institutional irrigation customers; and d) Initiate a monthly "Customer Charge" for all customer classes designed to collect a reasonable portion of the utility’s non-variable operating costs. This customer charge will be fixed and will not be related to volume of water used. Imposing both the rate increase and customer charge will trigger Proposition 218’s notice and protest hearing procedures. BACKGROUND The Water Fund’s revenue requirement consists of a number of components including: wholesale water cost, distribution system operations, Capital Improvement Pro~am (CtP) projects, funding of the Water Rate Stabilization Reserve (W-RSR) and the ]Emergency Plant Replacement Reserve (EPR~), and debt service. Any change in one or more of these components, or a change in retail sales levels, can trigger the need for a rate adjustment. During the budget process, staff forecasts customer revenues and utility expenses in order to quantify the amaual revenue requirement. Changes to forecasted revenues or expenses are reflected in adjustments during the midyear budget process. In FY 2005-06, as part of the mid-year budget adjustments, staff reduced the water budget revenue by $2.6 million, based on water sales-to-date, which were 12.9 percent below the original budget projections. The lower sales level for FY 2005-06 stemmed Koma reduction in water usage, especially irrigation water, as a result of above average rainfall and ongoing water Page 1 of 6 efficiency impacts. Since water rates have been volumetrically-based for the last few years, changes in rainfall patterns have had significant impacts on Water Fund revenue. After the adoption of the City of Palo Alto Budget for FY 2006-07, the San Francisco Public Utilities Commission (SFPUC) increased its wholesale water rates. A budget adjustment increasing the wholesale supply costs by approximately $800,000 to account for the increase in wholesale water rates was made as part of the midyear budget process. Since retail rates had already been set and implemented, this additional expense was funded from the W-RSR. During the FY 2006-07 budget process, a 7 percent revenue increase was proposed by the Utilities Department and approved by the City Council. That revenue increase was not sufficient to bring the W-RSR balance above the Minimum Guideline approved by the City Council. However, to avoid a larger rate increase, the decision was made to slowly fund the reserve until it reached the Minimum Guideline Level in FY 2010-1!, unless there was a need to accelerate that schedule. The Minimum Guideline will be $4.9 million for FY 2007-08. DISCUSSION Revenues. Expenses and Reserves The Water Utility continues to experience declining sales levels due to efficiency improvements and certain large customers leaving the system. At the same time, there have been increased wholesale supply, operating and CIP costs. There have also been unanticipated costs related to retiree medical liabilities and Workers’ Compensation. These impacts have resulted in withdrawal of funds from the W-RSR during FY 2006-07, leaving the W-RSR balance below the Minimum Guideline Level. The SFPUC has indicated that wholesale water costs may increase in FY 2007-08, but, since the SFPUC’s budget process runs later in the year than Palo Alto’s, the SFPUC’s final adopted rates are not currently tcnown and may substantially differ from early projections. Due to the continuing trend of declining water sales, revenue forecasts for FY 2007-08 and beyond have been adjusted down to match this pattern. CD expenses are projected to be $1.1 million geater in FY 2007-08 than FY 2006-07. After the proposed 10% rate increase, the W-RSR balance is forecast to be $12.4 million at the end of FY 2007-08. This includes an $8.5 million return from the FY 2006-07 CD budget to the W-RSR. The $8.5 million represents the close out of various individual CIP projects which are elements of the City’s Emergency Water Supply and Storage Project. The Emergency Water Supply and Storage Project is estimated to cost roughly $40 million with expenditures beginning in FY 2007-08. Utilities staff is working with the Administrative Services Department to explore utility revenue bond financing necessary to fund the Emergency Water Supply and Storage Project. The projected W-RSR balance at the end of FY 2007-08, will be above both the target level established by the "Asmual Risk Assessment for Reserves", and the Maximum Guideline Level approved by Council due to the temporary infusion of $8.5 million from closed CIP projects. Assuming retail rates are increased 10% for FY 2008-09, the W-RSR balance at the end of FY 2008-09 is forecast to be $3.4 million or $200,000 below the Minimum Guideline Level for that Page 2 of 6 year. Staff will reassess the Water Utility risks, revenues and reserve levels for FY 2008-09 during the budget process for that fiscal year. Customer Charge Until the end of FY 2002-03, all water rate schedules included a monthly meter charge based on meter size. The meter charge was desig-ned to recover a portion of the fixed costs of serving the customers including meter reading, accounting costs and administrative costs. In June 2003, staff recommended, and the City Council approved, the discontinuance of the monthly meter charge and a change in the Water Utility pricing policy to collect revenues from all customer classes through pure volumetric pricing. (CMR:267:03). The objective at that time was to encourage customer water efficiency and avoid potential conflicts with California’s Proposition 218. In FY 2002-03, the revenue collected from the meter charge was approximately $1 million, or five percent of the Water Utility revenue. The °’Customer Charge", recommended for FY 2007-08; collects revenue for services rendered to the customer regardless of usage, and mitigates the revenue uncertainty associated with predicting water usage. Staff recommends the fixed charge be termed a "Customer Charge" to more accurately describe the nature of the charge. The proposal calls for the customer charge to vary based upon the meter size as applied to all water rate schedules. Staff reviewed a survey by the California Municipal Utilities Association and found that the majority of California’s water utilities have both a fixed customer charge and a volumetric charge. The recommended residential customer charge of five dollars for a 5/8 inch meter appears to be in line ~vith that of other water utilities. Table 1 below shows the fixed monthly charges for surrounding cities: TABLE 1: Water Rate Comparisons Meter Size 5/8 " 3/4 " 1 " 1 1/2" 2 " 6 " 8 " Palo Alto (Proposed) $ 5.00 5.00 6.50 ]2.27 19.37 77.65 130.60 260.43 383.67 383.67 Mountain Los View Altos $ 4.!0 $ 10.47 4.10 15.71 8.20 22.07 13.30 35.31 24.80 55.16 43.05 95.99 67.70 132.40 135.55 215.14 215.85 344._.~ 315.00 441.32 Menlo Park $ 12.95 19.4.~ 25.17 37.18 56.30 121.09 212.44 366.46 1,036.00 1,489.25 Redwood City $ 14.25 21.38 35.63 71.25 114.00 213.75 356.25 712.50 712.50 712.50 A recently completed water cost-of-service study determined the pro-rata share of fixed costs for each customer class. To avoid a sudden large negative impact on the smaller water users (with meters up to two inches in size), staff recommends that the customer charge initially be set at a level that does not fully collect all fixed costs, but rather a portion of those costs. The portion of fixed costs left uncollected by the customer charge would continue to be collected volumetrically. For example a five dollar monthly charge is proposed for most of the residential customers (5/8 inch meter), which represents 48% of the fully allocated cost-of-service result of Page 3 of 6 $10.40. Incremental changes will be made over time in order to match revenue from the customer charge with the fully allocated cost of service. For larger cnstomers, with meter sizes of tl~ee inches or more, the proposed monthly charge, varying ~vith meter size, will immediately collect the fully allocated customer costs. The expected revenue from implementing a fixed charge is approximately $1.6 million. The impact of all revenue requirement changes and the new monthly customer charge, will result in an average residential customer’s water bill increasing by $6.04/month (or 10.4%, from $58.17 to $64.21). Small users will have a monthly bill increase of $4.74 (for 4 monthly usage of CCF, the monthly bill will increase from $16.16 to $20.80, a 28.7% increase). Proposition 218 Water Rate Increase Procedure: Proposition 218 amended the California Constitution and set forth procedural requirements public agencies must follow in order to enact or increase a property-related fee. Since Proposition 218 applies to the water service rate increases and customer charges described here, the City must provide written notice by mail to water customers subject to the proposed fees, follo~ved by a public hearing held not less than 45 days after notice is mailed. The notice must include the arnount of the fee, the basis upon which the fee was calculated, the reason for the fee, and the date, time and location of the public hearing. If written protests against the proposed fees are not presented by a majority of customers, the City may impose the fee. Allocation of the Rate Increase A cost-of-service study conducted during FY 2005-06 for the ~Vater Utility determined the allocation of costs between customer classes. The results indicated inequities among customer classes that needed correction. This imbalance is exacerbated by the changing customer mix in the City. Table 2 below shows the impact of the proposed rates increase on customer bills based on different consumption levels for the residential and non-residential classes. TABLE 2: Impact of Rate Increase on Customer Bills Customer Small Residential 5/8" Meter Average Residential 518" Meter Residential 5/8" Meter Large Residential 5/8" Meter Medium Commercial 3" Meter Large Commercial or Industrial 6" Meter Large Commercial or Industrial 6" Meter Usage Percent (CCF)Increase 7 15.4% 14 10.4% 20 8.9% 35 7.5% 3OO 8.2% 1200 7.2% Proposed Monthly Bill $ 32.64 64.21 91.27 158.92 1,379.95 5,469.63 Amount of Proposed Increase $ 4.36 6.04 7.48 11.08 104.95 369.63 (irrigation only) (W-7)3000 13,283.43 1,163.43 9.6% In addition to implementation of the customer charge, staff recommends discontinuing the discount for all the commercial, industrial and institutional irrigation rate schedule (W-7) which has been in effect since July 2003. Water Rate Schedule W-7 currently gives a discount to large Page 4 of 6 customers who install a separate landscape irrigation meter. The City still supports the installation of separate in-igation meters, but feels that the customer savings on wastewater bills provide sufficient incentive to do so. This change will provide a new price signal to improve landscape efficiency. Comparison of Palo Alto Water Rates and Surroundin~ Cities: For several years, Palo Alto’s retail water rates have generally been higher than surrounding areas, due to wholesale water rate increases from SFPUC, the funding of an aggressive Capital Improvement Program (CIP) to rehabilitate or replace aging water distribution infrastructure, and increases in allocated costs from other City departments for services provided to the Water Fund. A 2007 bill comparison of municipal water rates in Redwood City, Mountain View, Los Altos and Menlo Park indicates that the average Pato Alto residential customer pays approximately 32 percent more than comparable customers in surrounding cities. There are indications that nearby cities that purchase their water supplies from the SFPUC may be raising rates this year. At this time, the certainty or ma~itude of their rate increases is not known. Risk Assessment An a~mualized risk assessment has been performed by staff which compares projected reserve levels to applicable risk factors. This assessment has determined that reserve balances are adequate for FY 2007-08. An updated risk assessment will be performed as part of the budget process for FY 2008-09. A rate increase of 10 percent, or a revenue increase of $2.5 million, in FY 2008-09 is also recommended by staff. The projected ending W-RSR balance of $3.4 million for FY 2008-09 would be below the Minimum Guideline Level of $5.4 million, but only slightly below the projected risk assessed reserve level of $3.6 million. Staff will evaluate the revenues, expenses and risks during the FY 2008-09 budget process to ensure that the Water Utility remains financially sound. Table 3 below summarizes the end of year balances for the W-RSR, the risk assessment level and the Reserve Guidelines. Note that the risk assessment level is determined by assessing the short-tem-~ risks to the water fund. The Reserve Guidelines were established to manage risks over the longer term. TABLE 3: "~Vater Reserve Balance, Guideline Levels and Risk Assessment Level Reserve Balance and Guideline Levels End of Year Balance (Forecast with No Rate Adjustments) End of Year Balance (Forecast with Proposed Rate Adjustments) Risk Assessment Level Reserve Minimum Level Reserve Maximum Level FY 200%08 $10.2 million $12.4 million $3.3 million $4.9 million $12.4 million FY 2008-09 - $1.3 million $3.4 million $3.6 million $5.4 million $13.6 million ALTERNATIVES Staff evaluated the impact of alternative rate proposals to the proposed $2.2 million revenue increase. ’Any smaller rate increase would require reducing some combination of the operating Page 5 of 6 budget, Capital Improvement Pro~am, or the W-RSR. Reducing the CIP would hinder water main replacement projects, where the infrastructure has exceeded its system design life. Reducing the water operating budget will hinder the reliability and safety of the water system. Withdrawing more fi.mds from the W-RSR would drive the reserve balance further below the Minimum Guideline, and could necessitate an emergency rate increase request to accommodate infrastructure failure, or an increase in water supply costs. RESOURCE IMPACT Approval of this rate proposal will increase the Water Fund metered retail sales revenues by approximately $2.2 million for FY 2007-08. Due to the return of $8.5 million from encumbered CIP projects, the W-RSR balance is projected to be temporarily above the Maximum Reserve Guideline Level at the end of FY 2007-08. However, the returned monies will be earmarked to partially fund the City’s Emergency Water Supply Storage project starting in FY 2007-08. Staff also recomrnends that Council approve in concept an additional I 0 percent rate increase, or $2.5 million, in FY 2008-09 to bring the W-RSR closer to the Minimum Guideline Level. POLICY IMPLICATIONS This rate proposal meets the follo~ving Utilities Strategic Plan objectives: to invest in utility infrastructure to deliver reliable service and to provide superior financial service to the City and competitive rates to customers. Approval of the proposed water rate increase does not represent a change to existing policies. ATTACHMENTS: A.Water Rate Schedules W-l, W-2, W-4, and W-7 PREPARED BY: REVIEWED BY: Assistant Director, Customer Support Services DEPARTMENT HEAD: Director of Utilities Page 6 of 6 Palo Alto Utilities, City of- Welcome Pa~e 1 of 2 ATTACHMEIIT D Search: ],.~, Advanced Home ~" iBrowse By Topic ~ ,~, CP__A_U_H.O_ME I HIGHLIGHTS ~ank .~raff_Ln_g Co_m__m~rqi~l _Fib e/ Ene_rgy Sa~!ag Tip_s_ ._H_elp~!_qo n_t~_~ _H_.0me_E_~ergy A_D aJy _sj_s_ M y_U_ti!iti e s _Accou~n_t Pa!o_A!toGr#_e p Ra!e.s_ 7!!/_06 Rgb_ate p[pgra~s _c~P _AU SlTEMA~P I CiTY OF PALO ALTO UTILITIES (CPAU The City of Palo Alto Utilities (CPAU) is the only municipal utility in California that operates city-owned utility services that include electric, fiber optic, natural gas, water and wastewater services. Since 1896, CPAU has been providing quality services to the citizens and businesses of Palo Alto. For over 100 years, you’ve reaped the benefits and achievements of having reliable, homegrown and environmentally-focused utilities. To learn more about Palo Alto’s homegrown utility services, its recent accomplishments and future plans, view "AI!_A_b~_u=t Y_our Utilities" or request a copy by calling Customer Service at (650) 329-2161. IMPORTANT LINKS Customer-furnished Me_tffr_. Readigg__F.~rm Online access to My U_ti!_itie_s Acc_o_u_D_t Landfill, Refuse, Hazardous Waste & Recycling, ~li~k here Utilities Advisory Commission (UAC) City Manager Reports (CMRs) Development Center for new construction and major remodeling projects IMPORTANT UTILITIES PHONE NUMBERS Customer Service Power Outages Water, Gas & Wastewater Leaks/Service Disruptions Engineering-Electric Engineering-Water, Gas, Wastewater Utility Marketing Services 329-2161 496-6914 329-2579 566-4500 566-4501 329-2241 RECENT NEWS 1.~.tJ]]tY q~st_om~ers pa~i_cjPate_in_ a_uto~m~a_ted~p_ho_n_e_ ~u_~gy_ conducted to measure public awareness of qa_s_s_aLety 2.Annual Gas Leak Detection Survey_b_e_i__ng conducted May_~hro~ugh_ November 3.Emergen-~y~-W#te[~upp~yand~t~-r-age‘P~je~ct~-As~#~d-~E]n~a!~-~ir~nm-~e-n-~a[~p~acA~-ep-#rti-. s_n__o_~ av. ai!a.b_le~ http ://www.cityofpa!oalto.org/utilities/welcome.htnal 6/6/2007 Palo Alto Utilities, City of- Welcome Page 2 of 2 Obtain rebates of $300 for energy efficient, Tankless Water Heaters. Kqo__w!ed_ge_is _Pp.w~rl _F_R_E_EE _E£#zgy__a_o~_W_ater__~E_ffici_e .n_£y_ Workshop_ Information UPDATE ON WATER & REFUSE INCREASES On June 11, 2007, the Palo Alto City Council will consider proposed changes in the City’s water and refuse collection services rates for Fiscal Years 2007-08 and 2008-09. These rates will be considered by the City Council at a public hearing to be held at 7:00 p.m. in the Council Chambers at 250 Hamilton Avenue, Palo Alto, California 94301. For assistance in determining the cost of the proposed rate adjustments to you, please call the City of Palo Alto Customer Contact Center at 650-329-2161. To review a copy of the letter sent to all water and refuse customers, click here Notice of Utility Rate Chang~ For more information about the proposed water and refuse collection rates, view our Frequently Asked Questions (FAQs) at W_ater FA_Qs and Bemuse FAQs Links to City Manager’s Reports and Utilities Advisory Commission reports on these increases can be found at: Water CMR, Refuse CMR, Water Report to the UAC UPDATE ON ELECTRIC and GAS INCREASES As part of the Utilities Budget for Fiscal Years 2007-08, increases for Electric and Gas will also be considered. _inks to these rate increases can be found at: _G_a__s C~MB, Electric CMR G~as~Re_po_rt_Lo__.t_h.e_U~A_C, #!##.t._ric R_e_port to the UAC For more information on these increases, please call the City of Palo Alto Customer Contact Center at 650- 329-2161. UPDATE ON WATER SITUATION For more information on the water situation, you may visit the San Francisco Public Utilities Commission (SFPUC) on their web site at: www.sfwater.org. Copyright © 2006, City of Pato Alto Utilities. City of Palo Alto’s This page best viewed in Microsoft Explorer 4.0 or Netscape 3.0 or above. C~A~.We_b_~aster Last Update: April 16, 2007 http://wax~,.cityofpaloalto.org/utilities/welcome.htmt 6/6/2007 Palo Alto Utilities, City of- Welcome Page 1 of 2 IMPORTANT UTILITIES PHONE NUMBERS Customer Service Power Outages Water, Gas & Wastewater Leaks/Service Disruptions Engineering-Electric Engineering-Water, Gas, Wastewater Utility Marketing Services 329-2161 496-6914 329-2579 566-4500 566-4501 329-2241 http://wa~cw.cityofpaloalto.org/utilities/welcome.html 6/6/2007 ATTACHMENT E FAQs on Proposed Water Rates for Fiscal Year 2007-08 Why was a Proposition 218 Notice sent to you about the Proposed Water Rate Changes? Proposition 2! 8 amended the California Constitution and set procedural requirement that public agencies must follow in order to enact or increase a property-related fee. Since Proposition 218 applies to the water service rate increases and customer charges described here, the City must provide written notice by mail to water customers subject to the proposed fees, followed by a public hearing held not less than 45 days after the notice is mailed. The City will meet these requirements through the mailing sent to customers on April 23, 2007 and the public hearing to be held on June 1 1, 2007 at 7:00 p.m. in the Council Chambers. If written protests against the proposed fees are not presented by a majority of customers, the City may impose the fee. For a copy of the notification letter, visit http://www.cityofpaloalto.orq/utilities/pdf/Bi.qhornfinal.pdf or call the Customer Service Center at (650) 329-2161. Why are water rates going up? The key factors driving the proposed 10% water rate increase are the following: decreases in sales volume due to efficiency improvements and a few large customers leaving the system; increases in wholesale water supply rates charged by the San Francisco Public Utilities Commission, and increases in operating and Capital Improvement Project costs. These variable cost increases have resulted in withdrawals from the Water Rate Stabilization Reserve during Fiscal Year 2006-07, which has left the reserve balance below the City’s Minimum Guideline Level. As a result of rising costs and decreasing sales, staff is recommending that Council approve a 10 percent water rate increase which includes a new Customer Charge for Fiscal Year 2007-08, pending City Council approval. What is the new Customer Charge for water use? The new Customer Charge is actually a return to past utility billing practices. Until June 2003, all water customers in Palo Alto were charged a monthly Meter Charge based on meter size. This practice was discontinued in July 2003 to avoid potential conflicts with California’s Proposition 2 18; this issue has since been resolved through recent legal decisions. The Customer Charge is designed to recover a portion of the fixed costs required to read your meter, maintain the distribution infrastructure, provide customer service and provide you with a monthly bill. The Customer Charge is based on the meter sizes of the services used for standard consumption (W-I- Residential, W-4-Commercial and W-7-1rrigation). Why is the Customer Charge being implemented? A cost-of-service study conducted during FY 2005-06 for the Water Utility determined the proper allocation of costs between customer classes. The results of the study also indicated there were inequities among customer classes and subsidization of low volume water users by other water users. Staff has recommended reinstating a monthly Customer Charge to achieve greater equity among customer classes and provide stability in recovering some of the fixed Water Utility costs. In order to avoid a sudden financial impact on smaller water users, this fixed monthly charge has been set at a lower level than is required to fully collect all customer-associated fixed costs. This charge will likely increase over time to fully recover the fixed costs required to read your meter, maintain the distribution infrastructure, provide customer service and provide you with a monthly bill. City of Palo Alto - Proposed Water Rates and Customer Charges for FY 2007-08 May 2007 Do other water utilities have a customer charge? Yes. A state survey of other water utilities, conducted by the California Municipal Utilities Association, indicates that most California water utilities have a fixed monthly meter or customer charge. Many utilities in the Bay Area utilize a customer charge based on the meter size to recover a portion of the fixed costs of providing water service to customers. Most residential meters in Palo Alto are 5/8 inches and the comparative monthly charges are listed below: ¯Mountain View - $4.10 ¯Palo Alto - $5 (proposed) °Los Altos - $10.47 o Menlo Park - $12.95 o Redwood City - $14.25 The Water Rate Comparison table below provides a more detailed breakdown. Meter Size 5/8" 3/4" 1" 1½" 2" 3" 4" 6" 8" 10" Palo Alto (Proposed) $ 5.00 5.00 6.50 12.27 19.37 77.65 130.60 260.43 383.67 383.67 Mountain Los View Altos $ 4.10 $10.47 4.10 15.71 8.20 22.07 13.30 35.31 24.80 55.16 43.051 95.99 67.70 I 132.40 135.551 2!5.14 215.85 344.23 315.00 441.32 Menlo Redwood Park City $ 12.95t $ 14.25 19.43 I 21.38 25.17 35.63 37.18 71.25 56.30 114.00 121.09 213.75 212.44 356.25 366.46 712.50 1,036.00 712.50 1,489.25 712.50 What is the impact of the water rate change to my water bill? The overall impact to customer bills is listed in the table below. Usage Proposed PercentCustomer(CCF) Monthly IncreaseBill Small Residential 5/8" Meter !7 Average Residential 5/8" Meter I 14 Residential 5/8" Meter !20 .arge Residential 5/8" Meter !35 Medium Commercial 3" Meter I 300 Large Commercial or Industrial 6" Meter I 1,200 Large Commercial or Industrial 6" Meter (Irrigation only, W-7)3,000 $ 32.64 15.4% 64.21 10.4% 91.27 8.9% 158.92 I 7.5% 1,379/95 I 8.2% 5,469.631 7.2% 13,283.43 9.6% Amount of Proposed Increase S 4.361 6.04 i 7.48! 11.08 I 104.95 369.63 1,163.43 Do the new water rates encourage conservation? Yes. Palo Alto’s water rates are designed to promote efficiency through a tiered rate structure. As more water is used, the customer moves into the next usage tier and pays the higher price per unit of water within that volume of usage. Where may I find more information on rates? For more information about all utility rate changes being proposed as part of the FY 2007-08 budget, please visit www.cityofpaloalto.orq/utilities or call the Custom er Service Center at (650) 329-2161. City of Palo Alto - Proposed Water Rates and Customer Charges for FY 2007-08 May 2007 City of Palo Alto ATTACHMENT F NOTICE OF UTILITY RATE CHANGE April 23, 2007 On June I 1, 2007, the Palo Alto City Council wilt consider proposed changes in the City’s water and refuse collection services rates for Fiscal Years 2007-08 and 2008-09. There is no proposed change in rates for wastewater collection services. The revised rates would begin appearing on bills dated July 1, 2007 and later. The City has designed each of the proposed rate structures so that each customer will pay tbr the proportional share of the cost of providing service to the customer. WATER Water Utility rates are imposed in order that the City may recover its costs of buying and distributing water. The proposed water rate structure includes two components: (i) a "volumetric" charge for each CCF (hundred cubic feet) of water consumed during the bitling period, and (ii) a base monthly charge for each customer that is based on the size of that customer’s water meter. The base monthly charge would be a new component for Fiscal Year 2007-08. The lbllowing is the proposed volumetric component: [ .....i roposed Rates v0iuii{e curr~ni Rai~S (dffective 7-i-07) Rate Schedule Charges W 1 - Residential First 7 CCF Over 7 CCF W2 - Hydrant [ All CCF W4 -- Commercial [ All CCF \\17 - h-rigation [ At! CCF Percent (per CCF) I (per CCF) [ Cilange $4.040 $4.270 $4.250 $4.250 $4.040 $~.949 $4.510 $4.~40 $4.341 $4.341 -2.3% 5.6% 2.t% 2.1% 7.5% The following are the proposed base monthly cha :ges: Meter Pr0posed M0nfldv CUst0me~ Ciiafge Residential / Residential / Residential / Residential / Residential / Conm~ercial Commercial Commercial Commercial Conmaercial Conmaercial Commercial Commercial Commercial Commercial 518 " 3/4" 1 1/2" 2~ 6~, 10" $5:00 $5.00 $6.50 $12.27 $19.37 $77.65 $130.60 $260.43 $383.67 $383.67 Overall, the proposed rates have been designed so that, on average, water customers will experience a 10 percent increase in their water bill over current rates. The City p,oposes to continue the "Rate Assistance Program" (RAP) for residential customers. This program offers a 20 percent utilities discount to provide financial relief to residents who meet special medical or financial qualifications. REFUSE COLLECTION Refuse Lltility Collection rates are imposed in order that the City may recover its costs of collecting and disposing of refnse (trash) and other forms of waste, as well as the costs of recycling pro~ams. The proposed rate increase will affect all charges associated with the refuse rate schedules for resident and commercial customers (Rate Schedules R1, R2 and R3). The table below sho~vs the cunent rate for residential customers and the proposed 13 percent rate increase. Tables showing proposed changes for commercial refuse services are attached on a separate page. Residential Refuse Rate tbr Utility Rate Schedule R-1 Current Rate Proposed Current Rate ProPosed Current RateRateRate (FY 2006-07) (FY 2007’08}(FY 2006-07) !(~2007208) (FY 2006-07) Collection Frequency Per Week Service Level Mini-can (20 gallon) One standard can (32 gallons) I’xx o standard cans Tluce standard cans Four standard cans Five standard cans Six standard can One $16.87 $19.06 $21.38 $24.I6 $44.01 $49:73 $66.64 !$75:30 $89.26 $100.86 $111.89 $126!44 $134.51 $152.o0 Two Three N!A NIA $156.11 $223.9~c $291.87 $359.75 $427.63 N/A N/A N/A NiA $100.06 $ ii 3.07 $145.31 $16420 $190.57 $215234 $235.82 $266.48 $281.07 $317.6i Proposed Rate (FY 2007’08) N/A N/A $176140 $253.11 $329181 $406152 $483.22 Special labor and cart charges will also increase by 13 percent, and charges for collecting specific items, such as appliances and furniture, will increase as welt. Refuse rates are available online at http:i/www.cpau.comJdocs/rates/ratesindex.html. YOUR OPPORTUNITY TO GET INVOLVED These rates will be considered by the City Council at a public hearing to be held on June 11, 2007 at 7:00 p.m. in the Council Chambers at 250 Hamilton Avenue, Palo Alto, California 94301. All residents and other interested persons are encouraged to submit written or oral testimony at the hearing. You may also submit a written protest against any or all of the proposed charges. You must file a separate written protest for each type of utility rate increase (water and/or refuse) that you are protesting, and the City must receive your written protest prior to the close of the public heariug ou June 11, 2007. Mail or deliver written protests to: City Clerk, 250 Hamilton Avenue, Palo Alto, Calitbrnia 94301. If written protests are filed by a majority of the affected customers, the applicable proposed rate increases will not be imposed. For assistance in detemfining the cost of the proposed rate adjustments to you, please call the City of Palo Alto Customer Contact Center at 650-329-2161. The tables below show the current refuse rates fOl commercial c.ustomers before and after the proposed 13 percertt rate increase. Curre lit Rate (IvY 2006-07) Number of Calls (32 gallons) 1 2 3 4 5 6 Proposed Rate (FY 2007-08) Ollce $21.38 $24;16 $44.01 $49173 $66.64 $25.30 $89.26 $100:86 $111.89 $126A4 $134.51 $152.00 Colnmercial’Refuse Collection (Utility ]),ate Schedule R-2) Current Prol}osed Current Proposed Current Proposed Rate Rate (FY (FY 2006-07)2007-08) Twice Rate Rate Rate Rate (FY (FY 200%(FY (FY 2007, 2006-07)08)2006-07)08) Collection Frequency Per Week Three Times N/A N/A $156.11 $176.40 $223.99 $253211 $291.87 $329~81 $359.75 $40&52 $427.63 $48322 Four Times NiA N/A $212.17 $239.75 $302.67 $342:02 $393.17 $444.28 $483.68 $546.56 $574.t8 $648.82 Current Proposed Current Proposed Rate Rate Rate Rate (FY (FY 2007-(FY (FY 2006-07)08)2006-2007-08) 07) Five Times N/A N/A $268.22 $303.09 $381.35 $430i93 $494.48 $558.76 Six Times N!A $324.27 (! $366.43 $460.03 ~$519.83! $595.78 $673.23 $607.61 $686.60 $731.54 :$826.64 $720.74 $814.44 $867.29 $980:04 N/A N/A $100.06 i!$113107i $145.31 :$164:20 1 $190.57 i:$215:34 $235.82 ! $266,48 $281.07 i~$317.61 Size Cubic yard 1 1.5 2 3 4 5 6 8 Commercial Bin Collection (Utility Rate Schedule R-3) Current iProposed Cun’ent Proposed Current Pr01}osed Current Proposed Current PropOsed Rate Rate Rate Rate Rate Rate: Rate Rate Rate Rate (FY 2006- (FY 2007, (FY 2006- (FY 2007’ (FY 2006- (FY 2007a (FY 2006- (FY 20072 (FY 2006-(FY 200% 07)08)07) 08)07)08] 07) 08) 07) i: 08) Collection Frequency Per Week Cm-rent Proposed Rate Rate (FY 2006- (FY 200% 07) 08) Once $106.92 $120182 $146.12 i$165A2 $185.33i ~ $209A2 $262.55i $296.68 $349.27!$394.68 $426.49 i $481:93 $513.22 $579.94 $668.84 $755.79 Twice $218.59 $247.01 $301.16 $340.31 $383.72 $433.60 ! $548.86 i $620.211 $705,67~ $797.41 $887.44 :$1,002.81 $1,062.07 :$1,200.14 $1,391.15[ oo Ttu’ee Times Four Times $330.26 $373.19 $440.75 $456.79 $516.17 $6tl.23 $583.3t $659:14 S781.70 $833.98 $94240 $1,120.28 $1,096.52 $1;239:07 $1,470.74 $1,348.38 $1;523267$1,809.32 $1,609.7451;81920l$2,158£0 $2,114.64 $2!389254$2,838.13 $498.05 :$~90.69 S883.~2 $1,265.92 $1,661:94 $Z044~53 $2,43922 $3,_07.09 Five Times $552.42 $624.23 $766.26i $865.87 $980.1~1 $1,i 07:5t $1,406.59 $1,58945 $1.843.78521683,47 $2,270.27 $2,565:41 $2,707.45 $3,059.42 $3,561,62 $4,024.63 Six Times $662.90 $749a08 $920.70 $1;040i39 $1,178.50 $1~912.98$1,692.90 ~ $2,216.81 $2i505100 V "$3086,27 $3,255.12 $3~67829 $4,285.12 $4184219 Cunent Proposed Rate Rate (FY 2006-(FY200% 07)08): Monthly Bin Rental $31.19 : $3524 $a1.19 $40.58 $45i86 $51.15 $57180 $5!.15 $57280 $62.37 $70A8 $62.37 $70i48 $82.33 $93.03 The tables below show the current refuse rates for commercial customers before and after the proposed 13 percent rate increase. Ctlrrent Rate (FY 2006- O7) Commercial Collection (Utility Rate Schedule R-3) On-Call Debris Box Service For Solid Waste And Recyclable Construction And Demolition Materials* Delivery Service Total Non-use ** Minimum Overfi, ll Abandoned Secvice Proposed Rate (F¥ 2007- O8) 7 Cubic Yards (CY) $93.85 $10&05 $406.30 $459.12 $500.15 $565:17 $52.27 $59:07 $35.64 $47.52 $40.27 ~$53.70 Current Rate (FY2006- 07) 15 $93.85 $406.30 $500.15 $52.27 $35.64 $47.52 Proposed Rate (FY 2007- 08) CY $10&05 $459,12 $565.17 $59.07 $40.27 $53.7o Currertt Rate (FY 2006- 07) 2O $93.85 $471.64 $565.49 $52.27 $47.52 PFoilosed Rate (~Y 2007- 08~ CY $106.05 $532195 $639.00 $59:07 $5_~.70 $53~70 Curyent Rate (FY 2006- O7) 30 CY $93.85 $603.50 $697.36 $52.27 $59.40 $47.52 Proposed Rate (F’¥ 2007- 08) $106.05 $681.96 $788102 $59.07 $67.12 $53.70 $93.85 $658.15 $752.00 $52.27 Current Proposed Rate Rate (FY 2006-(FY 2007- 07)08) 40 CY $106.05 $743,71 $849.76 $59.07 $71.58 $80~89 $47.52 $53i70 Delivery Service Monthly Rental Single-Source SeI}arated Debris Box Service 7 Cubic Yards(CY)t5 CY $86.90 $98.20 $86.90 $98.20 $282.15 $318.83 $282.15 $318.83 $103.95 $117.46 $103.95 $117.46 20 CY $86.90 $98.20 $327.52 $370.10 $138.60 $156.62 30 CY $86.90 $419.10 $207.90 40 CY $98.20 $86.90 $98.20 $473.58 $457.05 ii$516.47 $234.93 $259.88 !$293.66: Permanent Service Size 15 CY $1,585.12 20 CY $1,927.93 30 CY $2,475.91 Size 15 CY 20 CY 30 CY Ollce $1;791.19 $2;178.56 $2;797.78 Collection Frequency Per Week Twice Three Times $3,170.22 $3,58235 $4,755.35 $5,373.55 $3,855.88 $4,357.14 $5,783.81 : $6,535;71 $4,951.80 $5,595~53 $7,427.72 $8,393:32 Monthly Box Rental $112.27 $126.87 $149.69 $169A5 $224.53 $253.72 Yard Trimmings Debris Box Service Once $268.23 $303:10 $312.93 $353.61 $335.69 $3"19.33 Collection Freqnency Per Week Twice Three Times 536.47 $606.2I $804.71 $909132 $625.86 $707.22 $938.78 $1,060~82 $671.35 $758.63 $1,007.04 $1,137196 Monthly Box Rental $112.27 ......$126.87 $149.69 $169:15 $224.53 $253272 * Additional contaminated charge of $152.55 may apply on debris boxes used for const,-uction and demolition materials. ** Within a 7 dab, period.