HomeMy WebLinkAboutStaff Report 1474City of Palo Alto (ID # 1474)
Finance Committee Staff Report
Report Type:Meeting Date: 4/5/2011
April 05, 2011 Page 1 of 3
(ID # 1474)
Council Priority: City Finances
Summary Title: Adoption of Amended Utility Rate Schedule D-1
Title: Adoption of a Resolution Amending Utility Rate Schedule D-1 (Storm and
Surface Water Drainage) Reflecting a 1.5% CPI Rate Increase to $11.40 Per
Month Per Equivalent Residential Unit for Fiscal Year 2012
From:City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council adopt the attached resolution (Attachment A) amending
Utility Rate Schedule D-1 (Storm and Surface Water Drainage), to implement a 1.5%
rate increase to $11.40 per month per Equivalent Residential Unit for Fiscal Year 2012.
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 $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 2011 is $11.23 per month per ERU.
April 05, 2011 Page 2 of 3
(ID # 1474)
Discussion
Staff has determined from Bureau of Labor Statistics records that the local CPI for the
San Francisco-Oakland-San Jose CMSA increased by 1.5% between December 2009 and
December 2010. 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. 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 $11.40 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.
Resource Impact
The 1.5 percent increase in rates is expected to increase revenue by $85,845.
Timeline
The Storm Drainage Fee increase will take effect on July 1, 2011.
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:
·Resolution Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage)(DOC)
April 05, 2011 Page 3 of 3
(ID # 1474)
Prepared By:Joe Teresi, Senior Engineer
Department Head:J. Michael Sartor, Interim Director
City Manager Approval: James Keene, City Manager
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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 1.5% CPI Per
Month Per Equivalent Residential Unit for Fiscal Year 2012
The Council of the City of Palo Alto does RESOLVE 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, 2011.
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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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:
________________________________________________________
Sr. Asst. City Attorney City Manager
_____________________________
Director of Public Works
_____________________________
Director of Administrative
Services
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