HomeMy WebLinkAbout2002-05-14 City Council (5)TO:
City of Palo Alto
¯ City Manager
HONORABLE CITY COUNCIL
FROM:
ATTENTION:
CITY MANAGER
FINANCE COMMITTEE
DEPARTMENT:UTILITIES
DATE:
SUBJECT:
MAY 14, 2002 CMR:244:02
ADOPTION OF A RESOLUTION AMENDING VARIOUS RATE
SCHEDULES TO INCREASE UTILITY SERVICE CALL AND
CONNECTION FEES
RECOMMENDATION
Staff and the Utilities Advisory Commission (UAC) recommend that the City Council adopt
the attached resolution to increase fees for Utility connections and Utility service calls
effective September 1, 2002. In accordance with Government Code Section’66017, the
effective date for Rate Schedules W-5 and S-5 is September 1, 2002, to meet the code
requirement for a minimum 60 day delay in implementation after Council approval applicable
to water and sewer development fees. For consistency, Rate Schedules E-15, G-5, and C-1
are ,similarly effective September 1, 2002.
BACKGROUND
TheUtilities Department provides service connections to its distribution network in order to
meet new and existing customer’s needs for electric, gas, water, and sewer services.
Connection fee rate schedules are designed to recover the costs that the Utilities Department
incurs for installation, connection, and inspection of these new connections. A cost of
service study is periodically performed in order to determine whether the Utility continues to
fully recover those cost components.
CMR:244:02 Page 1 of 3
DISCUSSION
A recent review of connection costs has been completed, and the results indicate that current
fees are not fully recovering costs. In addition, some connections which, were subject to
engineering estimates, have now been standardized. New. fees have been added to cover
these standardized services.
Service Calls Rate Schedule has been updated to reflect the increase in labor rates. These
labor rates have continued to rise since the last time this rate schedule has been updated due
to contract increases. Therefore, staff is proposing to increase connection fees and service
call rates.
UTILITIES ADVISORY COMMISSION REVIEW
On May 1, 2002, the UAC unanimously approved the proposed
connection fees and service calls.
increase for Utility
RESOURCE IMPACT
The estimated increase in annual, connection fee revenues is approximately $50,000,
$80,000, $40,000, for the Water, Gas, Wastewater Collection Funds respectively. In spite of
the modest increase in electric connection fees, overall electric connection fee revenue is
expected to remain unchanged due to lower connection activity..
POLICY IMPLICATIONS
Forgoing the proposed fee increases is a deparfure from the long-standing policy to fully
recover costs of service. If the fees do not recover costs, the additional funds would come
from the Distribution Rate Stabilization Reserve, which is funded by all ratepayers.
ENVIRONMENTAL REVIEW
The adoption of the resolution does not constitute a project under the California
Environmental Air Quality Act; therefore, no environmental assessment is required.
CMR:244:02 Page 2 of 3
ATTACHMENTS
B.
C.
D.
E.
Resolution
Utility Rate Schedules E-15, W-5, G-5, S-5 and C-1
Tables 1,2, 3, and 4 detailing existing and recommended service connection charges
UAC Report dated May 1, 2002
Minutes from UAC May 1, 2002
PREPARED BY:Jose Jovel, Utilities Engineering Estimator
Tomm Marshall, Electric Engineering Manager
Lucie Hirmina, Manager Utilities Rates
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Dire~ of Utilities
Assistant City Manager
.CMR:244:02 Page 3 of 3
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OFPALO
ALTO AMENDING UTILITY RATE SCHEDULES W-5,G-5,
S-5, E-15, AND C-I OF THE CITY OF PALOALTO
UTILITIES RATES AND CHARGES PERTAINING TO
CONNECTION FEES
The Council of the City of Palo Alto does hereby RESOLVE
as follows:
SECTION i. Pursuant to Section 12.20.010 of the Palo
Alto Municipal Code, Schedules W-5 (Water Service Connection
Fees), G-5 (Gas Service Connection Fees), S-5 (Sewer Service
Connection Fees), E-15 (Electric Service Connection Fees), and
C-I (Utility Service Calls) of the Palo Alto Utilities Rates and
Charges are hereby amended to read in accordance with Sheets W-
5-1, W-5-2, W-5-3, W-5-4, W-5-5, G-5-1, G-5-2, G-5-3,. G-5-4, S-
5"1, S-5-2, S-5-3, E-15-1, E-15-2, E-15-3, E-15-4, E-15-5, E-15-
6, and C-I-I respectively, attached hereto and incorporated
herein by reference. The foregoing Utility Rate Schedules, as
amended, shall become effective on September i, 2002.
SECTION 2. The Council finds that the revenue derived
from the authorized adjustments of the aforementioned water,
gas, wastewater, electric, and service utility rates shall be
used only for the purposes set forth in Article VII, Section 2,
of the Charter of the City of Palo Alto.
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020508 Ih 0072156
1
SECTION 3. 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 (b) (8).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of Utilities
Director of Administrative
Services
020508 Ih 0072156
ELECTRIC SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE E- 15
A. APPLICABILITY:
This schedule applies to all connections, expansions, and upgrades to the City’s electric distribution
system except those that serve street lighting or traffic signals.
B. TERRITORY:
All territory within the incorporated limits of the City ~nd land owned or leased by the City.
C.ADVANCE ENGINEERING FEES
Advance engineering fees must be paid to start the engineering process and are non-refundable. The
engineering fees will be credited against the estimated job cost prior to the collection of construction
fees. Advance engineering fees will not be collected for service connections that do not require a job
estimate.
D. ESTIMATED CONSTRUCTION AND SERVICE CONNECTION FEES
All estimated on-site, off-site distribution system, and service connection fees must be paid prior to the
scheduling of any construction or connections to the City’s electrical distribution system.
E. SUMMARY OF FEES:
The following schedule is for summary purposes. Section F herein describes the specific fee and
conditions in detail.
1. UNDERGROUND SYSTEMS:
(A) Service Connections Which Do Not Require an Estimate
Service Connection Fees
(1) Residential ......................................................................................................$380
(2) Residential: Rear Easement ..............................................................................$610
(3) Multi-Family/Commercial/Industrial 400A or Less .......................................$610
(4) Multi-Family/Commercial/Industrial Greater Than 400A .................By Estimate
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes Sheet No. E-15,1 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.E-15-1
ELECTRIC SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE E- 15
(Conti .nued)
(B) Service Connections That Require Estimates
Advance Engineering Fees
(1) Residential ........................................................................................... ..........$300
(2) Multi-Family/Commercial/Industrial 400A or Less ........................................$600
(3) Multi-Family/Commercial/Industrial Greater Than 400A "By Estimate
On-Site
(1)
(2)
(3)
Distribution System Fees
Residential ....................................................................................................N/A
Multi-Family/Commercial/Industrial 400A or Less ............................By Estimate
Multi-Family/Commercial/Industrial Greater Than 400A .................By Estimate
Off-Site Distribution System Fees
(1) Residential .........................................................................................By Estimate
(2) Multi-Family/Commercial/Industrial 400A or Less ............................By Estimate
(3) Multi-Family/Commercial/Industrial Greater Than 400A .................By Estimate
2. OVERHEAD SYSTEMS:
All service connection fees are based on a 100-foot service length. If additional service length is
required there may be additional fees.
Service Connection Fees
(1) Residential ..................................................................................................:.. $530
(2) Multi-Family/Commercial/Industrial 400A or Less .......................................$760(3) Multi-Family/Commercial/Industrial Greater Than 400A .................By Estimate
3. TEMPORARY SERVICES:
Temporary service charges 200A maximum, 250 V maximum, 3-wire services 100’ in length will
are shown in the following table. Fees for services requiring greater voltage or capacity will be
determined by estimate.
Overhead Service Connection Fees
(1) Residential ....................................................................................................$710
(2) Multi-Family/Commercial/Industrial 400A or Less ¯By Estimate
(3) Multi-Family/Commercial/Industrial Greater Than 400A .................By Estimate
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes Sheet No. E-15-2 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.E-15-2
ELECTRIC SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE E,15
(Continued)
FEES:
Underground Service Connection Fees
(1) Residential ....................................................................................................$570
(2) Multi-Family/Commercial/Industrial 400A or Less ............................By Estimate
(3) Multi-Family/Commercial/Industrial Greater Than 400A ................i By Estimate
1.UNDERGROUND SYSTEMS
Connection fees for new or replacement services to the underground electrical system consist of one
or more of the following: Service Connection Fee, On-site Distribution System Fee and/or Off-site
Distribution System Fee.
(A) Service Connection Fees:
Where the City connects any Customer to the electrical distribution system, a service
connection fee shall be charged. A waiver of this fee is granted for services connected during’
an underground conversion district.
(1) Residential - Single Family
These fees apply to development in which electric metering will be on a single-family
basis.
(a) For a 250 volt maximum, 200 ampere maximum service ............................... $380
(b) For any connection requiring greater capacity the fee Shall be the estimate of the
installation cost or $380 whichever is greater.
(c) For a 250 volt maximum, 200 ampere max service from a rear easement $610
(d) For any connection requiring greater capacity the fee shall be the estimate of the
installation cost or $610, whichever is greater.
(2) Commercial/Industrial
These fees apply to commercial, industrial, multi-family residential services.
(a) For a 250 volt maximum, 400 ampere maximum service ............................... $610
(b) For any connection requiring greater capacity, the fee shall be the estimate of the
installation costs or $610, whichever is greater.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes Sheet No. E-15-3 dated 721-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.E-15-3
ELECTRIC SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE E-15
(Continued)
(B) On-site Distribution System Fees:
Where the City installs or will install the underground conductors (primary or secondary),
switches or transformers in and on facilities provided by the developer within the boundaries
of a sub-division or other development, an on-site distribution system fee shall be charged.
The fee shall be the estimate of the installation costs.
(C) Off-Site Distribution System Fees:
Where the City installs or will install an electric distribution system, system extension, or
system reinforcement outside the boundaries of a sub-division or other development to be
served, an off-site distribution system fee shall apply. The fee shall be the estimate of the
installation costs.
2. OVERHEAD SYSTEMS
Overhead services that do not require the addition of poles to the system will be the standard service
for residential areas not in Underground Districts. Underground Service will be required for all new
industrial, commercial, and multi-family residential .construction. No new construction that will
require new poles tO be added to the system shall be permitted except with the approval of the
Electrical Engineering Manager and only after a finding that an underground service is not feasible.
Replacement of existing overhead, services with new overhead services will be allowed so long as
the new service does not exceed the size of the existing service or 200 Amperes for single-family
residential or 400 amperes for all other; whichever is greater.
(A) Overhead Service Connection Replacement Fees:
(1)Residentia! - Single Family
These fees apply to development in which electric metering will be on a single-family
basis.
(a)For a 250 Volt, 200 ampere, 3 wire,
100 feet in length Maximum services ¯$530
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes Sheet No. E-15-4 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.E-15-4
ELECTRIC SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE E-15
(Continued)
(2)Commercial/Industrial
(3)
These fees apply to commercial, industrial, multi-family residential services.
(a)For a 250 Volt, 400 ampere, 3 and 4 wire services,
1 O0 feet in length maximum service ....................................................$760
Replacement of Overhead Services of greater voltage, other than described above -when
done for the customer benefit, or when required due to damage by customer, shall be the
estimate of the installation costs.
3. TEMPORARY SERVICE
A fee shall be charged to connect temporary service. The Customer shall furnish all equipment up
to the designated point-of-service. This point-of-service will usually be the weatherhead for
overhead temporary services in overhead distribution areas or the secondary connection box for
underground temporary services in underground distribution system areas. The City will not supply
overhead temporary services in underground service areas or underground temporary services in
overhead distribution system areas. The City will supply: overhead conductors and meter for
overhead temporary services; and meter only for underground temporary services. The City will
connect both overhead and underground services to the City’s electrical distribution system. Any
additional off-site facilities or work required shall be provided and removed by the utility at the
customer’s expense.
(A) Overhead Temporary Service Fees:
(1) For a 250 volt, 200 ampere, 3 wire service,
100 feet in length maximum service ................................. : ..............................$710
(2)The fees for a temporary service of greater length and capacity or voltage shall be the
estimate of the installation and remo,;,al costs or $710, whichever is greater.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes Sheet No. E-15-5 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.E-15-5
ELECTRIC SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE E- 15
(Continued)
(B)Underground Temporary Service Fees:.
(1)
G. NOTES:
(2)
(3)
For a 250 volt, 200 ampere, 3-wire maximum service,
If a service box is available at the property ....................................................$570
If a service box is not available at the property, the charges to provide a service box .will
be at the customer’s expense.
The fees for a temporary service of greater length and capacity or voltage shall be the
estimate of the installation or removal costs or $570, whichever is greater.
These fees apply to all vacant land except where the fees are recorded as previously paid.
The Customer is responsible for the installation of all equipment from the facility tO the designated
point-of-service. For underground systems, this includes conduit and conductors. For overhead
systems, because the point-of-service is the weatherhead or point of attachment to the facility, this
includes the mast or riser and all conductors therein.
When the City replaces a service, the Customer is obligated to accept a shutdown of service during
regular working hours. The time of the shutdown shall be agreed upon as mutually acceptable.
When, for the convenience of the Customer, the shutdown is during other than regular working
hours, it shall be done entirely at the Customer’s expense. The Customer shall pay the entire cost
of the overtime labor, not the incremental cost.
The City can generally provide service availability from 30 to 45 days after all fees are paid except
when long lead-time equipment or materials are required, Consult the City for estimated lead-times.
The City cannot be held liable for delays in service connection caused by conditions beyond it’s
control, including, but not limited to, delays in the arrival of equipment such as transformers,
switches and cable.
{Ena}
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes Sheet No. E-15-6 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.E-15-6
WATER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE W-5
A. TERRITORY:
Inside the incorporated limits of the City of Palo Alto and on land owned or leased by the City of Palo
Alto. ¯
B. FEES:
All fees must be paid prior to the scheduling of any construction. Depending on material availability and
scheduling constraints, utility service will be installed between 30 and 40 days following receipt of full
payment.
1.DISTRIBUTION SYSTEM EXTENSION CHARGE
For City Standard 6" Main, charge per foot ................................................................
SERVICE CONNECTION CHARGES:
$95.00
Category 1 - Domestic Water Service
Size
1-inch connection
1-1/2 inch connection
2-inch connection
4-inch connection
6-inch connection
Category 2 - Fire Service
Size
4-inch connection
6-inch connection
8-inch connection
Amount
$3,353.00
3,907.00
4,377.00
6,529.00
7,302.00
Amount
$5,827.00
6,526.00
7,245.00
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. W-5-1 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. W-5-1
WATER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE W-5
(Continued)
Category_ 3 - Additional Domestic or Irrigation Services
For service installations connecting to a pre-existing, larger service.
1-inch connection
1-1/2 inch connection
2-inch connection
4-inch connection
................. , ..................................................................................$1,156.00
......... , .........................................................................................1,433.00
...................................................................................................1,530.00
.................... : ..............................................................................3,657.00
Categors, 4 - Combination Domestic Water Service and Fire Service
For requests of combination domestic and fire water services, two service connection charges will
apply: the charge for connection of a fire service and the charge for domestic service installation
connection to a larger service.
Catego _ry 5 - Master Water Service
Approval by the Director of Utilities is required for a connection that serves domestic water service
and fire protection through a detector meter. The charge for master water service will be based on
the Engineering Manager’s, Water-Gas-Wastewater, estimate of the total costs of all materials,
metering not listed in Section B(4), labor and other costs incidental to the installation.
For service connections of 4-inch through 8-inch sizes and meter sizes of 3-inch through 8-inch, the
new owner must provide and install a concrete vault with meter reading lid covers to house meters
and other required control equipment in accordance with the Water Utility’s specifications.
An approved backflow prevention device with bypass assemblies must be provided by owner on all
fire services.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. W-5-2 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. W-5-2
WATER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE W-5
(Continued)
3. METER CHARGES:
5/8 Inch x 3/4 Inch ................. ............... ..................................................................................$58.00
1 Inch ..................................................................................................................................140.00
1 ½ Inch ............................................................ ..............................................-. .......................367.00
2 Inch ..................................................................................................................................463.00
3 Inch .................................................................................... ............................................2,104.00
4 Inch .......................................................................................................~ ........................3,593.00
6 Inch ...............................................................................................................................4,538.00
4. ADDITIONAL METERS ON CONNECTION:
With new connection .........................................................................................................$276
On existing connection .....................................~ ......., ...........................................................659
5.RELOCATION OF FACILITIES’
Approved relocation of service, hydrants, or other facilities will be done at the cost of the person
requesting the re-location. Deposit of estimated cost is required before relocation work begins. After
the City completes the work, a final billing based on actual costs will be sent to the person
requesting the relocation of facilities.
C. OTHER CONDITIONS
1.SERVICE CHARGES:
(A)
(B)
Additional Service connections are available with payment of additional service connection
charge as shown in Section B.
Replacement of service connection made necessary because of ordinary wear and deterioration
will be made without charge. Replacement due to inadequacy because of additional demand
or load will be charged as a new service connection.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. W-5-3 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. W-5-3
WATER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE W-5
(Continued)
2. INSTALLATION UNDER UNUSUAL CONDITIONS:
(A)Any condition which, in the opinion oft_he Engineering Manager, Water-Gas-Wastewater will
result in a cost higher than the charges set forth in Section B will be classified as unusual. The
charge for an unusual installation will be based on Engineering Manager, Water-Gas-
Wastewater’s estimate of the total costs of all materials, labor, and other costs incidental to the
installation.
(B)In the event water service to a premises is requested and insufficient capacity exists to provide
such service, the applicant shall bear the total cost for enlarging the distribution system to
accommodate serving the applicant. The Engineering Manager, Water-Gas-Wastewater may
require the applican( to make arrangements for the design and construction of said expansion
in accordance with City standards and specifications. Alternatively, the Engineering Manager,
Water-Gas-Wastewater may elect for City forces or contractors to design and’install
respectively such facilities at the applicants’ expense.
3. EXCEPTIONS:
(A)
(B)
Water Service Areas 3 & 4, connections served directly from supply main: The distribution
system charges (Section B) will be based on a maximum frontage of 660 feet. This exception
applies to single applications for service and does not apply to subdivisions or tracts.
The subdivision developer will furnish and install the water .system at his or her expense and
in accordance with City’s specifications.
D.OTHER SERVICES:
1. MANIFOLD:
(A) 2 Inch .................................................................................................i ..........................$525.00
2. ABANDONMENT:
(A) Small service less than 2 Inch .......................................................................................$817.00(B) Large service more than 2 Inch ....................................................................................1,186.00
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. W-5-4 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. W-5-4
WATER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE W-5
(Continued)
METER INSTALLATION:
Charges for meter installations by third parties, i.e. contractors, homeowners, etc.
5/8 Inch to 2 Inch ......................: .............................................................................................$69.00
3 Inch to 6 Inch .......................................................................................................................207.00
4. FIRE HYDRANT:
(A) Install New Hydrant without Lateral ......................................... ...................................$2,450.00
(B) Install New Hydrant with Lateral .................................................................................8,469.00
(C) Relocation behind curb (up to 5 feet) ...................................i ......................................3,688.00
Relocations more than 5 feet will require a New Lateral and the existing Lateral will be disconnected
and abandoned at the main.
5. OTHER FEES:Per Hour
The following fees will apply to utility work performed by outside contractors:
(A) Engineering Fee ..............................................................................................................$80.00
(B) Utility Inspection Fee .........................................................................................................77.00
CITY OF PALO ALTO UTILITIES
Issued by the City Council
CITY OF PALO ALTO
UTILIT ES
Effective 9-1-2002
Original Sheet No. W-5-5
GAS SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE G-5
A. TERRITORY:
Inside the incorporated limits of the City of Palo Alto and on land owned or leased by the City of Palo
Alto.
B. FEES:
All fees must be paid prior to the scheduling of any construction. Depending on material availability
and scheduling constraints, utility service will be installed between 30 and 40 days following receipt of
full payment.
1. DISTRIBUTION SYSTEM EXTENSION CHARGE:
Street frontage charge per foot ...................................................................................$80.00/ft.
CONNECTION CHARGE FOR SERVICE INSTALLED ON EXISTING MAIN:
Size
1-inch connection ......................................................" .........................................................$2,369.00
2-inch connection ............................................................... ...................................................3,343.00
Above 2-inch connection ................................................. ................................: ........Utility Estimate
Excess Length Fee: An additional charge ($17.00/foot for a 1-inch connection and $19.00/foot for
a 2- inch Connection) will apply to an extension greater than forty feet from the street property line
to the gas meter location, measured along a line perpendicular to the street property line.
Service-Location: The service line will be installed along the shortest, most practical route, as
determined by The Utilities Department (from the gas main in the adjoining street, alley, lane road,
or easement to the nearest suitable meter location at the building or structure).
3. METER CHARGES:
175-400 CFH Rotary-Residential ........................................................................................$167.00
500-800 CFH Rotary-Residential ........................................................................................1,089.00
500-1500 CFH Rotary-Commercial .....................................................................................1,156.00
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No.G-5-1 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No.G-5’I
GAS SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE G-5
(Continued)
2000 CFH Rotary-Commercial .............................................................................................1,500.00
3000 CFH Rotary-Commercial ............................................................................................1,766.00
5000 CFH Rotary-Commercial ............................................................................................2,172.00
7000 CFH Rotary-Commercial ............................................................................................2,441.00
11000 CFH Rotary-Commercial.. ............................................................................’ ............3,116.00
16000 CFH Rotary-Commercial ............................................’ ..............................................3,766.00
Electronic Volume Corrector System ..................................................................................5,378.00
Other Meter Sizes ....................................................................................................Utility Estimate
ADDITIONAL METERS ON CONNECTION:
(Applies to small meters up to 400 SCFH)Per Meter
With new connection ..............................................................................................................$73.00
On existing metered connection ....................................................................................153.00
Charges for meters above 400 SCFH, will be based on the Utility’s estimate.
5. SERVICE RELOCATION:
Service riser relocation ..........................................................................................................$702.00
Service riser relocations will only be performed on polyethylene pipe services. All "other material
pipe" services must be replaced from the main to the meter at the fees listed in Section B(2) of this
rate schedule.
Curb Meter- Riser relocation on existing pe pipe .........i .......................................................$500.00
Curb Meter- Riser relocation on same alignment of existing service .................................¯ ....812.00
Curb Meter- New service from main to house .....................................................................1,185.00
6. RELOCATION OF FACILITIES:
Approved relocation of service and other facilities will be done at the cost of the person requesting
the re-location. Deposit of estimated cost is required before relocation work begins. After the City
completes the work, a final billing based on actual costs will be sent to the person requesting the
relocation of facilities.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No.G-5-2 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. G-5-2
GAS SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE G-5
(Continued)
C. OTHER CONDITIONS:
1. SERVICE CHARGES:
(A)Additional service connections are available with payment of additional service connection
charges shown in Section B.
(B)Replacement of service connections made necessary because of ordinary wear and
deterioration will be made without charge. However, if the need for replacement arises due
to meeting an increase in load, the new service will becharged as a new service under
Section B.
(c)In commercial or industrial areas where a surface meter installation is impractical, meters may
be placed in underground vaults. Vaults must be. provided and installed by the owner in
accordance with the gas utility’s specifications. The vault lid sections shall not exceed 70
pounds. All lids shall be centered above the gas meter to allow visibility of the meter face
for meter reading purposes. ’
2. UNDER UNUSUAL CONDITIONS:
(A)
(B)
A condition which, in the opinion of the Engineering Manager, Water-Gas- Wastewater will
result in a cost higher than the fees in Section B, will be classified as unusual. The charge for
an unusual installation will be based on the Engineering Manager, Water-Gas-Wastewater
estimate of the total costs of all materials, labor, and other costs incidental to the installation.
In the event gas service to a premises is requested and insufficient capacity exists to provide
such service, the applicant shall bear the total cost for designing and enlarging the
distribution system to accommodate serving the applicant. The Engineering Manager,
Water-Gas-Wastewater may require the applicant to make arrangements for the design and
construction of said expansion in accordance with City standards and specifications.
Alternatively, the Engineering Manager may elect for City forces or contractors to design and
install respectively such facilities at the applicant’s expense. Full credit to the applicant will
be provided for any over sizing or extra facilities installed to meet service demands above
the specific capacity needs of the applicant as defined in the Utility’s rules and Regulations.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. G-5-3 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. G-5-3
GAS SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE G-5
(Continued)
3. EXCEPTIONS:
Gas Service Area 2, connections served directly from supply main: The’ distribution system charges
(Section B) will be based on a maximum frontage of 660 feet. This exception applies to single
applications of service and does not apply to subdivisions or tracts.
4. MASTER METERED GAS SERVICE
For master meter services using high volumes of g~, the applicant must provide all required meters,
sending units, regulators, and othernecessary flow control equipment as specified bythe City and
approved by the Engineering Manager, Water-Gas-Wastewater.
D. OTHER SERVICE CHARGES:
1. OTHER SERVICE FEES:
The following fees will apply to utility work performed by outside contractors:
(A) Engineering Service Fee .. ......................................................................................$80.00/hr
(B) Inspection Service Fee ...........................................................................................$77.00/hr
CITY OF PALO ALTO UTILITIES
IssUed by the City Council
Supersedes Sheet No. G-5-4 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. G-5-4
SEWER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE S-5
TERRITORY:
Inside the incorporated limits of the City of Palo Alto and on land owned or leased by the City of Palo
Alto.
FEES:
All fees must be paid prior to the scheduling of any construction. Depending on material availability
and scheduling constraints, utility service will be installed between 30 and 40 days following receipt
of full payment.
COLLECTION SYSTEM EXTENSION CHARGE:
For City Standard 8" Main Charges Per Foot
Wastewater Service Areas 1 & 2 ....................................................$110.00
Wastewater Service Areas 3 & 4 .........................................................................................130.00
2. CONNECTION CHARGES:
4-inch connection .............................. ..............................................................................$5,046.00
6-inch connection ..............................................................................................................5,518.00
4-Inch lateral depth more than 6 feet ............................. ...................................................5,553.00
6-inch lateral depth more than 6feet ................................................................................6,286.00
Sewer laterals over 25 feet in length will be charged for the additional footage at a rate of$100/Ln.
Ft. for 4 inch connections and $104/Ln. Ft for 6 inch connections.
Special arrangements must be made to provide for the cost of a connection larger than six-inch.
The City will estimate the cost which will serve as the basis for a customer deposit. Upon receipt
of this deposit the City will install the connection and the customer shall pay the actual cost net of
the deposit.
3.RELOCATION OF FACILITIES:
Approved relocation of service, and other facilities will be done at the cost of the person requesting
the re-location. Deposit of estimated cost is required before relocation work begins. After the City
completes the work, a final billing based on actual costs will be sent to the person requesting the
relocation of facilities. ¯
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. S-5-1 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. S-5-1
SEWER SERVICE CONNECTION FEES
UTILITY RATE SCHEDULE S-5
(Continued)
C.OTHER’CONDITIONS
1.SERVICE CHARGES:
(A)Additional service connections are available with payment of additional service connection
charge as shown in Section B2.
(B)Replacement of service connections made necessary because of ordinary wear and
deterioration will b~ made without charge. Replacement due to inadequacy because of
increased demand or load will be charged as a new connection.
2. INSTALLATION UNDER UNUSUAL CONDITIONS:
(A)Any condition which, in the opinion of the Engineering Manager, Water:Gas-Wastewater
will result in a cost higher than the charges set forth in B above will be classified as unusual.
The charge for an unusual installation will be based on the Engineering Manager’s estimate
of the total costs of all materials, labor, and other costs incidental to the installation.
(B)In the event wastewater service to a premises is requested and insufficient capacity exists to
provide such service, the applicant shall bear the total cost for flow monitoring the existing
main to determine remaining capacity, design of new sewer main and construction cost.’ for
enlarging the collection system to accommodate serving the applicant. The Engineering
Manager, Water-Gas-Wastewater may require the applicant to make arrangements for the
design and construction of said expansion in accordance with City standards and
specifications. Alternatively, the Engineering Manager, Water-Gas-Wastewater may elect
for City forces or contractors to design and install respectively such facilities at the applicants
expense.
3.PUMPING PLANTS:
Where pumping facilities are needed to drain wastewater into the wastewater collection system,
the capital cost of construction of the pumping plant and the on-going plant operation and
maintenance costs will be at the expense of the developer.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. S-5-2 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. S-5-2
SEWER SERVICE CONNECTION FEE~
UTILITY RATE SCHEDULE S-5
(Conti.nued)
4.EXCEPTIONS:
(A)Wastewater Service Areas 3 & 4, connections served directly from trtmk mains: The
collection system charges (Section B) will be based on a maximum frontage of 660 feet.
This exception applies to single applications for service and does not apply to subdivisions
or tracts.
(B)The developer will furnish and install the wastewater system at his or her expense and in
accordance with City’s specifications.
D.OTHER SERVICE CHARGES:
1.INSTALL MANHOLE:
(A) Depth less than 6 feet ........ .............................................................i .......................$5,154.00
(B) Depth more than 6 feet .............................................................................................6,764.00
2. ABANDONMENT:
(A) Sewer Lateral .........................................................................................................$1,089.00
3.OTHER SERVICE FEES:
The following fees wil! apply to utility work performed by outside contractors:
(A) Engineering Service Fee (Per Hour) ...........................................................................$80.00
(B) Inspection Service Fee (Per Hour) ................................................... ........., ...................77.00
rend}
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. S-5-3 dated 9-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. S-5-3
UTILITY SERVICE CALLS
SERVICE CALLS AND OTHER SERVICE WORK:
Meter Set
Restoration for service at meter following .turn-off
for n0n-payment
Restoration of service at power, pole following turn-off
for non-payment
Exchange meter for accuracy test (Rule 15)
Field Collection of Payment
Labor Rates Per Hour Per Person:
UTILITY RATE SCHEDULE C-1
Charges During
Business Hours
Charges After
Business Hours
No Charge $ 88.00
$24.00 $ 47.00
$100.00 $200.00
$29.00 Service not
Available
$24.00 $47.00
go
Services provided during normal working hours
Services provided .on overtime basis where the
overtime is scheduled at the City’s convenience.
Services provided on overtime basis where the
overtime is scheduled at the customer’s convenience.
RETURNED CHECK FEES:
SPECIAL PROVISION:
$93.00
$111.00
$130.00
$10.00
o
Charges made under this schedule may be added to the regular monthly utilities bill of the person
receiving the service and payment thereof will be subject to the Utilities Rules and Regulations
regarding discontinuance of service for nonpayment.
Charge for meter exchange will be refunded if meter is found to be more than two percent (2%)
over-registering. (End)
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No. C-1-1 dated 7-1-98 CITY OF PALO ALTO
UTILITIES
Effective 9-1-2002
Sheet No. C - 1-1
TABLE 1 - EXISTING AND RECOMMENDED SERVICE CONNECTION CHARGES
INSPECTIONS
SYSTEM EXTENSION
$2,694.00
$3,586.00
$6,050.00
$6,872.00
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
INSTALL FiRE HYDRANT ONLY
INSTALL FIRE HYDRANT & LATERAL
FIRE HYDRANT RELOCATION
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
$4,695.00
$5,244.00
$5,841.00
$2,061.00
$7,305.00
$3,095.00
ON EXJSTING CONNECTION 09-01-98 $350.00
METER CHARGE 09-01-98 $35.00
METER CHARGE 09-01-98 $103.00
METER CHARGE 09-01-98 $325.00
METER CHARGE 09-01-98 $420.00
METER CHARGE 09-01-98 $1,408.00
METER CHARGE 09-01-98 $2,603.00
METER CHARGE 09-01-98 $3,881.00
MANIFOLD INSTALLATION 09-0 1-98 $507.00
SERVICE DEMOLITION 09-01-98 $743.00
09-01-98
09-01-98
STANDARD CONNECTION RATES
$1,078.00
$80.00
PER HOUR
INSPECTION SERVICE FEE FOR NON
STANDARD CONNECTION RATES
$77.00
PER HOUR
WATER, GAS, AND WASTEWATER SERVICE CONNECTIONS - 2002 COST BREAKDOWNS
City of Palo Alto Utilities D~pan’m~nt - WGW Engineering Section Prepared by Jos~ Jowl
Page 2 3/5/02
SERVICE
SERVICE
SERVICE
SERVICE
SERVICE
CURB METER
SERVICE
CURB ~ETER
SERVICE
CURB METER
SERVICE
ADD METER
GAS SYSTEM EXTENSION
NEW SERVICE CONNECTION
NEW SERVICE CONNECTION
ADDITIONAL PIPE INSTALLATION
ADDITIONAL PIPE INSTALLATION
RISER RELOCATION
RISERRELOCATION ON EXIST, PE PIPE
METER -
COMMERCIAL
METER -
COMIVI~RCIAL
¯ METHR -
COMMERCIAL
METER -
COMMERCIAL
METER -
COMMERCLkL
METER -
COMMERCIAL
2000 CFH
3000 CFH
5000 CFH
7000 CFH
I 1,000 CFH
16,000 CFH
METER CHARGE & INSTALLATION -¯07-0 1-98
ROTARY
METER CHARGE &-’INSTALLATION -07-01-98
ROTARY
METER CHARGE & INSTAI.,L, ATION -07-01-98
ROTARY
$1,247.00 :$1~500 :, :’:;20%
$1,966.00 $2,172 ,.
~VC COMMERCIAL
METER CHARGE & INSTALLATION -
ROTARY
METER CHARGE & INSTALLATION -
ROTARY
METER CHARGE & INSTALLATION -
ROTARY
ELECTRONICVOLUME CORRECTOR
SYSTEM
ENGINEER!NG SERVICE FEE FOR NON
STANDARD CONNECTION RATES
INSPECTION SERVICE FEE FOR NON
STANDARD CONNECTION RATES
07-01-98
07-01-98
07-01-98
07-01-98
07-01-98
$2,235.00
$2,842.00
$3,492.00
$5,378.00
$80.00
PER HOUR
177.00
PER HOUR
$2,4~1
$3,116
’ $3~766
$80;00ENGINEERING
INSPECTIONS ’$77.00
WATER, GAS, AND WASTEWATER SERVICE CONNECTIONS - 2002 COST BREAK.DOWNS
City of Palo Alto Utilities Deparlm~nt - WGW Engineering S~tion Prepared by Jose Jovel 3/5/02
Page 3
~<6’
DEPTH < 6’
DEFFH < 6’
DEPTH >~’
DEPTH > 6’
MANHOLE
D~FH < 6’
MAJ~-IOLE
DHPTH > 6’
INSPECTIONS
COLLECTION SYSTEM EXTENSION
COLLECTION SYSTEM EXTENSION
NEW LATERAL CONNECTION
NEW LATERAL CONNECTION
NEW LATERAL CONNECTION
NEW LATERAL CONNECTION
NEW MANHOLE INSTALLATION
NEW MANHOLE INSTALLATION
DEMOLITION AND ABANDONMENT
ENGINEERING SERVICE FEE FOR. NON
STANDARD CONNECTION RATES
INSPECTION SERVICE I~E FOR NON
STANDARD CONNECTION RATES
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
09-01-98
$110.00/Fl’.
$130.00/FI’.
" $3,900.00
$4,349.00
$4,871.00
$5,514.00
$4,685.00
$6,149.00
$990.00
$8O.OO
PIeR HOUR
$77.00
PER HOUR
WATER, GAS, AND WASTEWATER SERVICE CONNECTIONS - 2002 COST BREAKDOWNS
Cityof Palo Alto Utilities Department - WOW Engineering S~tion Prepared by Jose Jovel 3/5/02
Page 4
TABLE. 4 . o
RECOMMENDED NEW SERVICE CONNECTION CHARGES TO BE ADDED TO CURRENT RATE SCHEDULE
TYPE OF RATEUT]L1TY SERVICE SCHEDULE SERVICE CONNECTION CHARGES DESCRIPTflON
WATER DOMTcSTIC W-5 5/8" - 2" METER INSTALLATION CHARGE FOR M~TERS
INSTALLED ON EXIST[NOOR NEW SERVICES BY OTI-~RS ¯
WATER DOIvIESTIC W-5 3" - 6" M~TEK INSTALLATION CHARGE FOR IVIETEP~
INSTALLED ON EXISTING OR NEW SERVICES BY OTI-~RS
WA~R
WA~R
WA~R
DOIvIESTICJ
HLR!GATION
DOIV[ESTIC/
IRR!GATION
DOMESTIC/
IRRIGATION
DOMBSTIC/
IRRIGATION
METER
RESIDENTIAL
METER-
CO~CIAL
G-5
G-5
1" SERVICE INSTALLATION CONNECTING TO A LARGER
SERVICE
1-~1/2" SERVICE INSTALLATION CONNECTING TO A
LARGER. SERVICE :
4" SERVICE INSTALLATION CONNECTING TO A LARGER
SERVICE
175-400 ~ METER CHARGE &INSTALLATION
500-800 CFH METER CHA~GE & INSTALLATION - ROTARY
5~)0-1500 CFH METER CHARGE & INSTALLATION
WATER, GAS, AND WASTEWATER SERVICE CONNECTIONS - 2002 COST BREAKDOWNS
City of Palo Alto Utilities Department - WGW Engineering Section Prepared by Jose Jovel 3/5/02
Page 5
MEMORANDUM
TO:UTILITIES ADVISORY COMMISSION
FROM:UTILITIES DEPARTMENT
DATE:
SUBJECT:
MAY 1, 2002
PROPOSED INCREASE
CONNECTION FEES
TO UTILITY SERVICE CALL AND
RECOMMENDATION
Staff requests that the Utilities Advisory Commission recommend that the City Council
approve amended Utility Connection Fees Rate Schedules E-15, W-5, G-5, S-5 and Utility
Service Calls Rate Schedule C-lto be effective July 1, 2002.
BACKGROUND
The Utilities Department provides service connections to its distribution network in order to
meet new customer’s needs for electric, gas, water, and sewer services. Connections are
usually finalized after the City inspects and approves all equipment installed by the customer
(i.e. contractor or developer) and usually after the customer pays the required fees as set forth
in the utility connection fee rate schedules.
The connection fee rate schedules are developed to recover costs that the Utilities
Department incurs to provide installation and connection services to new customers. In this
manner, the cost impact from adding a new customer is borne by the new customer.
Connection fees are based on a methodology which sums the cost of labor, materials;
overhead, street paving, meter costs where applicable, landfill dump charges, equipment, and
overhead charges. Periodically a cost of service study is performed to determine these cost
components and the fees are updated. The current connection fees schedules were last revised
in 1998. This year an updated cost-of-service study has been completed and the results
indicate that current fees are not fully recovering costs. Therefore, staff recommends that
connection fees be increased. In addition, staffproposes an increase to Utility-.Service Calls
Rate Schedule C-4, which has not been revised since July 1, 1998.
DISCUSSION
WGW Connection Fees:
The proposed increases in water, gas, and sewer connection fees are due to a combination of
factors which include an increase in labor rates and material costs. To ensure total recovery
of connection costs and to help keep retail water and gas rates competitive, staff proposes
that in addition to the existing connection fees, new water service connection charges include
payment for the cost of meter installation.
Tables 1, 2, 3, and 4 show the proposed connection fee increases for water, gas, and sewer
respectively. The proposed increases in water, gas, and sewer connection fees range from no
change to 88 percent. While these percentages are high, they are consistent with the range of
percentage increases that normally result from revised connection fees. For example, in 1998
the percentage increases ranged from 14 percent to 82 percent.
To the extent practical, fees are developed to cover standard connections under basic
assumptions. In reality, a number of special customer requirements arise with regard to
connections, and in such cases, the appropriate fees are generally subject to an engineering
estimate. In addition, new fees have been standardized, which previously were estimated,
and added to the connection fee rate schedules. Standardizing new fees eliminates the process
of estimating new connections, which will help shorten the permit issuing process.
Electric Connection Fees "
The proposed increases to electric connection fees result from increased hourly labor rates.
The proposed electric connection fees will increase between 11.5 to 14.7 percent.
Service Call Rates
With regard to Utilities labor rates on Rate Schedule C- 1, the hourly rates to perform certain
service calls, such as restoring service following a tum-off for non-payment, have been
revised to reflect updated labor costs. The increase is based on the salary increases since July
1998 and the service call increases range from 11 percent to 20 percent.
ALTERNATIVE
Forgoing the proposed fee increases is a departure from the long standing policy to fully
recover costs of service. If the fees do not recover costs, the additional funds would come
from the Distribution Rate Stabilization Reserve which is funded by all ratepayers.
RESOURCE IMPACT
¯ The estimated increase in annual connection fee revenues is approximately $50,000,
$80,000, $40,000, for the Water, Gas, Wastewater Collection Funds respectively. Despite the
modest increase in electric connection fees, overall connection fee revenues are expected to
remain unchanged due to lower connection activity.
POLICY IMPLICATIONS
This proposal meets the following 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. These recommendations do not represent a change in
current City policies.
current City policies.
ENVIRONMENTAL REVIEW
The adoption of the resolution does not constitute a project under the California
Environmental Air Quality Act; therefore, no environmental assessment is required.
ATTACHMENTS
A. Tables 1,2, 3, and 4 detailing existing and recommended service connection charges.
B. Utility Rate Schedules E-15, W-5, G-5, S-5 and C-1
PREPARED BY:Jose Jovel, Utilities Engineering Estimator
Tornm Marshall, Electric Engineering Manager
Lueie Hirmina, Utilities Rates
DEPARTMENT HEAD:
/ Di~’ectot" of Utilities
:
/,U
EXCERPT OF UAC MEETING 5/1/02
FY 2002/03 OPERATING/CIP BUDGET AND RATE PROPOSALS
Bechtel: And we’ll just move on to the next item with is item #2, the FY 2002-2003
operating and CIP budget and the rate proposals.
Ulrich: This would be item #2.
Bechtel: Item #2 on the agenda.
Ulrich: Do you want to do them, we’ve got them listed as A through E or do you want to
do them that way or what would your preference be?
Bechtel: I have notes from looking it over. It looks like for example there is a summary
report on the enterprise funds that lists all of the funds including some of those that are not
under our review: That’s the summary and it’s page 1. Then there are discussions of the
reserves for each of the funds and then we move to individuals so Fm open to comments
from the Commissioners as to how you would like to proceed with next year’s operating
budget and then at the same time we can look at the CIP. Comments on how you would
like to handle this? Mr. Ferguson.
Fer~uson: Just a question at the top here. As I read item 2, what we have here is 4-5
requests for the UAC to approve proposed rate increases and there is no staff request here
for the UAC to approve or discuss the budget items. So do we want toproceed directly to
the rate discussions or should we have some global discussions about the implications of
the budget?
Ulrich: IfI can just make one point. The reason for putting it together this way is we
brought the major changes and major items in the budget to you before and we’ve had
good discussion on that and our agreement was we would, hit the major changes because as
you recall, this is an interim year budget. This is not starting all over. You asked
questions and we went through that last time. My commitment to you at that time was I
would give you the latest draft of the budget. That way you will not be surprised when it
moves on to the Finance Committee and it all gets approved. But it’s not intended that we
would go through each of the items unless you had questions and wanted to get into more
detail. Because we had attempted to do those kind of items early on.
Fer.~uson: Good, I just wanted to clarify that, because my preference is to proceed ahead
directly to the discussion of the various rate proposals.
Bechtel: Mr.. Rosenbaum.
Rosenbaum: I did have one question on the text associated with the Electric Fund. This is
page 3, next to the last paragraph, it starts off in 2001-02, a 43% increase in rates was
adopted and then it goes on to say at present there is uncertainty regarding a potentially
UAC Minutes 5-1-02 DRAFT Page 19 of 40
significant impact related to supply contract settlement provisions and other outstanding
supply issues. What is that issue? Which one is that?
Baldschun: This relates to the cancellation of our Enron contract..
Rosenbaum: You’re suggesting there is some uncertainty? We’ve heard otherwise we
don’t think.
Baldschun: Oh no. Our position is of course that there’s not going to be any, you can’t
assume any liability here, but you never know so the prudent thing to do is don’t react too
quickly. So we’re not going to be assuming anything. We’re just going to keep the
reserves where they are and not propose to reduce rates. There’s some other factors too
that are...[interrupted]
Rosenbaum: All right, but you are suggesting the concern about the eventual outcome of
the Enron contract had some effect on your decision with regards to rates? We haven’t
heard that before.
Ulrich: You mention concern? ’
Rosenbaum: Yes.
Ulrich: I think it says uncertainty and there is a level of uncertainty. I wouldn’t raise it. I
think we did exactly the right thing and we’ve had significant discussion here and
communication about why we did what we did. And I feel very confident that what we did
was appropriate, but I think it is important that there’s always a level of uncertainty and
with this significant amount of it in that contract, I think it’s important to list it here. I
would not say in the sense of concern that we think we did something inappropriate and
we’re waiting for something to happen.
Rosenbaum: I wouldn’t suggest that, but it seems to me at the meeting, either last meeting
or 2 meetings ago, I did ask the question and I think the answer was we had not put aside
anything and we were not contemplating putting aside anything.
Baldschun: That is correct. We have not specifically set aside any funds for that.
Rosenbaum: But this should be an argument for maintaining a healthy reserve.
Baldschun: Like any other cost uncertainty, absolutely. We have, Bern mentioned, half a
dozen that potentially that could impact us so I think it is the prudent thing to do, and the
reserves are not exactly that healthy. If you look at the electricfund rate stabilization
reserve in the budget and given the fact we’ll be pulling out substantial amount of money
in this proposed fiscal year, this whole discussion is in the context of explaining why we
are not going to reduce the electric rates. I think there have been some perceptions that we
were automatically going to reduce our electric rates 43% in this year, which would not be
a wise thing to do.
Rosenbaum: All right, but ifI look forward to next year and some of these issues go away,
we’ll have another discussion about electric rates then. One other issue where I know there
was some concerns. I guess Dexter and Iboth went to the NCPA strategic planning
UAC Minutes 5’1-02 DRAFT Page 20 of 40
session and in conversations with some of the other NCPA members, we got the idea that
some of them were unhappy with what we had charged them during the height of the
energy crisis and were attempting to recovering some of those funds. Is this the $6 million
that we talk about as the NCPA settlements or is this still an outstanding issue?
Ulrich: I think what you’re referring to is what happens in a pool. A pool has a certain set
of agreements and it occasionally and sometimes quite frequently goes through discussion
about whether the pool agreements are being followed and what are the changes to be
made and that is a healthy thing that is done all the time, so that may be the area you’re
referring to. Yes, a significant amount of discussions have been done on that and some of
those expectations on what we think the settlements will be are reflected in the budget and
in this document so that there is no shock or surprise if or when that occurs. And with the
significant price increases last year, these numbers are much higher than they would be in a
calm year, but we go through the same process and the same settlement. That’s an
experience that the pool does all the time.
Rosenbaum: We’re still on good terms with everybody.
Ulrich: You bet.
Rosenbaum: Good.
Bechtel: All right then. Mr. Ferguson.
Ferguson: I was just going to propose a motion on 2A if you’re ready to.
Bechtel: First of all, for the interest of any viewers or for the minutes, let me just talk
about 2A. Item 2A is before us and it says staff requests the UAC recommend that the
City Council approve amended Utility Connection Fee Rate Schedules and they are listed
here to be effective July 1. And just a little bit of background, it says current fee schedules
were last revised in 1998 and so it’s appropriate to raise the rates at this time. So that’s the
background on the first rate schedule we’re looking at 2A. So Mr. Ferguson?
Ferguson: I’d like to move approval that the staff recommendation on item 2a.
Bechtel: Mr. Ferguson recommends 2a that UAC recommend to the Council that the fee
¯ schedules be listed to be affected. Do I hear a second?
Rosenbaum: Second.
Bechtel: Second by Mr. Rosenbaum. Any discussion on the proposed increase to the
Utility Service call and connection fees?
Dawes: This looked pretty straightforward to me. Basically cost of service, updated hours
and pay rates has my support.
Bechtel: Any other questions of staff on their justification? If not, I’ll call for a vote. All
in favor of the UAC recommending that the City Council approve these rate schedules
please say "aye".
UAC Minutes 5-1-02 DRAFT Page 21 of 40
All Commissioners: Aye.
Bechtel: All opposed. None opposed. Motion is approved unanimously. Moving next to
item 2B. 2B, there are 2 items here and this report requests that the UAC recommend that
the City Council approve a 1) revised electric rate schedule to update the public benefit
charge and the unmetered electric service rate schedule, which would be effective July 1,
2002 and 2) to transfer $4 million from the supply rate stabilization reserve to the
distribution rates stabilization reserve. So there are 2 issues here on this recommendation
from staff. Questions on this before a motion? Mr. Dawes.
Dawes: I was a little confused as to how the arithmetic worked on the 2.85%. I had
assumed that that’s what we were charging as an over-ride all the time, but the last
paragraph on that page starting 2B seemed to imply that we weren’t. Or maybe it’s just
simply an issue of kilowatt-hours versus percentage of dollars billed, but if you could ¯
elucidate me Randy, I’d appreciate it.
Baldschun: As you recall, AB 1890 was passed to require utilities to automatically charge
a public benefit fee and implement programs. The problem was you couldn’t implement
effective programs in a very short period of time. It took us, I think, a year to roll out the,
the Advantage Program. So, for the first year or.two, we had a surplus in the public benefit
reserve because we weren’t spending as much as we were collecting. So it didn’t make
sense for us to raise the public benefit charge percentage to 2.85 when we had the 43% rate
increase. Well after the energy crisis, we pretty much almost depleted the public benefits
reserve and so now there’s a good use and need for that money, so we’re going to be
collecting that.
Dawes: So there was a gap where we were collecting less than 2.85%?
Baldschun: Thatrs correct.
Dawes: Where we increase the ratio? Okay. That answers my question.
Baldschun:. Actually this fiscal year, we’re collecting less than 2.85 %.
Bechtel: Other questions of staff at this time on 2B? Let me just take a sense of the
Commission on separating these 2 issues, 1 and 2, separating the rate schedules from the
transfer. I’m assuming unless there’s some other discussion that we’ll handle both of those
items together in the same motion. Do I hear a motion?
Ferguson: Move approval.
Bechtel: We have a motion from Mr. Ferguson that we recommend to the City Council
that they approve a revision to the Electric Rate Schedule and that they approve a $4
million transfer between reserves. Do I hear a second?
Rosenbaum: Second.
Bechtel: Second by Mr. Rosenbaum. Any other q~uestions? Discussion? Mr. Dawes.
UAC Minutes 5-1-02 DRAFT Page 22 of 40
Dawea: Traffic lights. When we converted, we paid a lot of money to convert over to
LADs which were going to reduce the amount of electricity that they used and here we’re
¯ hitting up the City for a $32 thousand a year increase. I don’t get it.
Baldschun: I think some of you on the UAC reviewed our enterprise transfer
methodology. Well part of that transfer methodology recommendation was for the Utilities
to charge the City for traffic signals capital cost. Up until that study was done, the policy
was not to charge the City for capital cost in the traffic signal system. They recommended
’ and Council approved that we do collect capital cost. council approved I think a three
year transition to what was presumed to be full cost capital recovery and it was, I think,
$32,500 a year. And so we’re just following that, but to get to the point, I believe you’re
not the first person who has brought this up because our energy usage in these traffic
signals, we just saw an email, it’s gone down 2/3. Our cost of service, as it currently
stands, we’re not recovering our full cost and we can’t...[interrupted]
Dawes: That’s including the CIP, which installed them.
Baldschun: Right..
Dawes: We don’t pay; we don’t get all the cost of the electrical service back.
Baldschun: The energy costs are really .insignificant in terms of the overall traffic signal
operation. It’s really the capital cost that is the issue so we’re going to follow what
Council approved and in another year or two, we will look at the full cost of service and
we will make a recommendation if we feel we need to continue to increase those rates. But
it’s a policy decision that the Council is really the only one who can make and so we’re
just following what they’ve approved two or three years ago.
Dawes: Thank you.
Bechtel: Other questions on proposal 2B? Then I’ll call for a vote for the proposed
revision to the electric rate’schedules and the $4 million transfer between reserves. All in
favor, please indicate "aye".
All Commissioners: Aye.
Bechtel: Any opposed? Passes unanimously. Moving on to 2C. That’s the proposed gas
rate decrease. This report requests that the UAC recommend to the City Council that they
approve a $12 million retail gas revenue decrease effective July 1, 2002. The proposed
revenue decrease represents approximately 26.7% decrease system-wide. That’s the issue
before us. Discussion from Commission? Mr. Ferguson.
Ferguson: Thank you Mr. Chairman. I’m a great believer in our reserve approach and
using the reserve as shock absorbers in the over-all pattern of rate increases and decreases.
We had a couple of opportunities in the last year to talk about increasing the size of the
reserve maximums and minimums across programs and I think in the case of the electric
fund, we did accommodate the wild swings in electric energy prices and I recall Girish had
a nice little table showing the new factors that justified changing the over-all range in the
reserves. This year in the gas fund, what we have is a gas fund at least on the supply side
that’s going to be $3 million above the max. Did I read that correctly? So we’re on the
UAC Minutes 5-1-02 DRAFT Page 23 of 40
usual, ’ reasonable assumption that we want to keep rates stable over a multi-year period. It
might have made sense to leave $3 million above the maximum in the till, But my guess is
gas prices are going to be much more stable in the coming year or two, especially if we do
laddering, then the experience we had along with everything else with wild swings where
they took us by surprise. So I’m inclined to stick with the reserve guidelines that we
adopted and had kept in place for several years and rather than hold $3 million back above
the maximum guideline, let’s just roll that into the over-all decrease and adopt a reduction
of revenue of $15 million instead of $12 million. And if I’m just reading those numbers
wrong, I’m happy to be corrected; but it looks like we’re keeping an extra $3 million in the
supply reserve above the maximum guideline.
Baldschun: On which document are you looking at? Is it in the budget or in the rate
proposal?
Ferguson: In the gas fund, page 4 or in the text at the bottom of page 2 on the gas fund.
¯Baldschun: Let me direct your attention to page 2 of the Enterprise.Fund Reserves in the
budget. If you look at the projected reserve balance for the supply rate stabilization
reserve, there were a number of changes that-occurred and have been occurring in the
recent weeks and that’s why I’m delaying my response because as I indicated to some of
you earlier today~ I’ve got some revised reserve balances and one of them is the supply rate
stabilization reserve. But on page 2 of the enterprise fund reserves, you see an ending
balance of $4,989,000.
Ferguson: Yes. I’m reading the extra $3 million in the distribution reserves so my
apologies.
Baldschun: So that one’s within the range. Yet the statement you pointed out says it’s
above the maximum guideline and that’s because there were some changes that have been
occurring. If your point is are we going to change the guidelines or Should we keep them,
we changed the guideline formula for electric and for gas last year. The impact was that it
didn’t change the actual guideline amounts in the gas while it did in the electric. So where
we are now is we’ve got new guidelines as of last year, but it’s not resulting in any
significant difference at all than the old guideline. If you’d like, I’ll talk about that
particular reserve because in the accounting in the budget process, there was a double entry
in the bond proceeds related to our soft engineering costs.
Ferguson: Let me jusi correct myself first. There is an extra $3 million in the distribution
reserve, not the supply reserve, so there reallyis $3 million there above the guideline and
that’s what I’d prefer to send back to the ratepayers, but maybe there’s more to the story.
Amy Javelosa-Rio: Good evening. I’m Amy. I’m with the budget accounting and I’m the
one responding for preparing the budget documents. First of all, I would like to point to
your attention that there is a changein the reserve balance. We originally gave you a draft
document on the fund reserves. This has been amended, so for your discussion purposes, I
would refer you to the amended, which is a part of the document I think this evening.
Bechtel: You’re referring to page 2 of the summary sheet enterprise fund reserves?
Javelosa-Rio: That is correct sir.
UAC Minutes 5-1-02 DRAFT Page 24 of 40
Bechtel: And that has electric fired at the top, gas fund in the middle,
wastewater... [interrupted]
Javelosa-Rio: That is correct. We have an amended statement.
Baldschun: While she’s putting that up, I’ll talk in terms of what the impact of what the
changes are. Essentially, a change in the balance in the Gas distribution RSR resulted in a
drop from $7.8 million down to $5.2 million. That’s about a $2.6 million decrease in the
gas distribution RSR and it relates to an accounting oversight with certain CIP bond costs
going into that reserve which is incorrect. The other change is in the water fund that is a
change in the budget draft. It shows an RSR ending balance of $14.586 million and there
were two changes that brought that down to a level of $10.2 million. So that’s a total of a
$4.3 million drop in that projected reserve balance. Now what that essentially does is
bring that reserve below the maximum guideline in the water fund. I apologize
for...[interrupted]
Bechtel: So let me understand. Let me su.mmarize what I have heard and that is that on
the gas fund that the distribution RSR for the projected ending balance ’02-’03, you’re
saying is $5.2 million as opposed to almost $7.8 million. Is that correct? So $5.2 million
is about $1 million or maybe it’s $900,000 above the reserve guideline of $4.382? That’s
what we interrupt. We’re still a million dollars above the maximum.
Baldschun: Correct.
Bechtel: Okay. Under the water fund, which we’ll talk about, that is the rejected ending
balance, I assume that the first column which is ’01-’02 is 10.2 down $4 million so that
brings for next year, that brings that down to below 11.4 million.
Baldschun: Correct.
Bechtel: Okay. And so let me come back to Mr. Ferguson’s question was, where he was
leading to is, that on the gas fund, why wouldn’t we want to give back a million? He was
going to give back 4 million. Why not 1 million? I think that’s where the discussion was
around when we got onto this.
Baldschun, The way we sized the rate proposal was we wanted to be prudent in terms of
any cost contingencies and there’s one outstanding, uncertainty that we wanted to plan for
just in case and that’s approximately $7 million above our target level. What we did was.
we took that target level and we added $7 million. Lucie, you can correct me if I’m wrong
here. That was what we want to end fiscal year ’02-’03 with.
Hirmina: The plan was to leave $7 million above the target level on the supply side. The
distribution is only $785 thousand over the maximum at this point. We’re waiting to see
where all the expenses are going to be with those issues. We’re waiting for them to settle.
tf they settle as we think they would, then next year we would have another decrease.
Baldschun: I hate to do this because we have so many financial statements with different
goals in terms of presentations. I mean the budget is based on certain assumptions. Then
we have the 10-year financial forecast. The 10-year financial forecast is a document we
UAC Minutes 5-1-02 DRAFT Page 25 of 40
use todevelop the rate proposal. As I mentioned earlier today, the difference between our
10-year financial forecast reserve balances and the reserve balances you see here, are
significant in that the budget proposal was developed over a period of months, finally
getting to the point where we put it in draft form. In the meantime, we have been updating
on an ongoing basis, including the most recent being the quarterly report, what we project
to be reserve balances. Maybe it might help if we turn to the supply rate stabilization
reserve ending balance, let’s see what that looks like. The example in the quarterly report,
the supply rate stabilization reserve for fiscal year ’01-’02 is rising from an adopted budget
figure of $1.9 million to $6.8 million. A lot of that increase is based on the staff’s internal
assumptions about events that some of which are reflected in the draft budget and some of
which are not. In terms of the rate proposal we base it on the most updated information. I
think it would be imprudent not to use the most recent information we have. This budget
document, the way the City process goes, is you have a mid-year report in which
adjustments are made and becomes the adjusted budget. When that happens, the process
takes in November, December and then finally the Council approves it and it’s not until.
probably February or March where it’s released. Well lot of things happen between then,
so we don’t just use the adjusted budget. We keep on updating that adjusted budget in
terms of our projections for our rate requirements and that’s what we use the 10-year for. I
apologize for dragging this out, but the 10-year financial forecast indicates from our best
information that we can end fiscal year ’02-’03 with this 27% rated decrease where the
supply reserve will end up at a balance somewhere around $7 million over target which
was the defining factor. Next year, we’ll have a lot better information on what’s going to
happen with regards to that cost contingency and we’ll also have more information on the
cost for ’03-’04 which we’ve talked earlier about. We purchased up to have of that fiscal
year at this point. So next year, there’s a very good possibility we’ll have a subsequent
rate decrease if the cost contingency is not required and purchase gas costs continue to fall
below our current level of gas costs.
Bechtel: Mr. Ferguson, follow up to that since you’ve kicked this one off.
Ferguson: Yes, I’m trying to do the right thing here and I shouldn’t have kidded myself
that there would be $3 million lying on the table at the last minute before our budget
approval. But let’s go back and focus on what’s really going on here. We do have reserve
guidelines. The reserve guidelines are there because there are generally external factors
that bounce around supply prices or bounce around the distribution cost experience and we
want to accommodate those things without having annual rate increases or decreases.
Makes plenty of sense. I’ve always assumed that those brackets were created based on
experience and mostly because of external factors; things beyond our control; things we
can’t plan and manage for on an annual basis. Sounds like here, we’re talking about a
couple million-dollar swing that’s entirely inside our accounting system. And I’m just
wondering if maybe we ought to rethink our reasons for having max’s and min’s here if
part of the max and min calculus is that it’s just mechanically impossible toclose the
books or get a good number here at budget time to the nearest 1 million or 3 million. Well
so be it. Then let’s build that into our reserve guidelines, as well as our provision for
external factors. Am I reading that correctly or is this a one-time event?
Baldschun: I understand it’s a one-time event.
Bechtel: Mr. Dawes.
UAC Minutes 5-1-02 DRAFT Page 26 of 40
Dawes: I have the same line of thinking as Rick. Obviously these new figures are new
data, but sort of going backwards a year and half or so, I was certainly very strong on
inserting an extra rate increase in our series of either 4 or 5 increases in one fiscal year
when the gas was just running away from us in our reserves headed toward and actually
got to zero at that time. My message here is I think we have to do the same thing but only
on the down side of the curve. As I read the quarterly reports on the gas reserves, it looks
as though we’re considerably ahead of where we thought we would have been on the
enterprise fund reserve, schedules and Randy you’ve confirmed that. We’re doing better
than we had the opportunity to put in the enterprise fund budget cycle. So rather than
trying to suggest that we do something different than the rate adjustment that’s on the
table, I would like to re-emphasize the appropriateness of revisiting this in 6 months. It’s
great to have things stable for a year, but if it goes the way I sense itis going, and the fact
that you als0 said you’ve got our purchase prices locked up for this coming year, this
should be a fairly calculable thing. Other than the issue, the same issue in the gas fund as
we have in the electric side vis-a-vis contract termination issues, which to me says we
should have a little robust fund there, but again over time we’ll know more about that so
let’s look at it again in 6 months.
Baldschun: I absolutely agree. I think we should look at it on a quarterly basis. The end
of this fiscal year is going to be real critical and real important for us as every end of fiscal
year is because that’s where you find that there might be C~ projects deferred or there
may be other costs or that’s when our sales revenues come in. That’s when our actuals are
known and you really have a foundation of going forward to propose any rate changes.
Now we can propose rate changes anytime. We don,t have todo it in July. If we get good
contracts in ’03-’04 and we end this fiscal year as we’re hoping we are, then there’.s
nothing preventing us from coming back with a rate change if the financials indicate that.
Dawes: Yes, one item I did forget to mention is that the rate of change of those reserves is
very high. I mean, we got about to zero and we’ve restored them in virtually in one year to
where we are today and so it would seem to me and gas isn’t varied that much on the cost
side so we should be adding very rapidly to that and again goes the same, we should look
at it quickly.
Bechtel: Other discussion, more discussion on the gas rate decrease? Mr. Rosenbaum.
Rosenbaum: Rick, I just wanted to commend you for looking so carefully at this. It would
seem that if we are using the new number, the 5.2 million, and you add that to the supply
rate stabilization number, the sum of those two is about equal to the maximum for the sum
so we’re about in the ballpark using that number. So perhaps we should wait and we’ll
remember staff indicated that it is indeed possible to have rate changes in the middle of the
year.
Bechtel: Other discussion? Lucie, while you’re here, could you update the last line of the
enterprise fund reserves with the numbers that you have on the table here? I’m looking at
page 3 and what I’m noting is if you take a look at all of the enterprise funds, all added of
course together, our reserves are dropping $24 million according to the numbers we have
in front of us and dropping to $154 million. Do you have wha.t that number would be?
Really what do you think our projecting currently what or how our reserves are going to
drop or increase?
UAC Minutes 5-1-02 DRAFT Page 27 of 40
Ulrich: Just say, Amy will give you an answer to that.
Javelosa-Rio: The $154 million that you saw here includes enterprise funds other than the
utilities department and with the new numbers I have given, this will definitely be updated.
So the $154 million will decrease approximately by the difference of the numbers that I
gave you previously and the new numbers and it’s approximately. I believe $6 million.
Bechtel: So $154 will drop to $6?
Javelosa-Rio: That is correct.
Bechtel.’. Okay, so there’s been no. At least from that point of view, the City is not
deteriorating too rapidly even with decreasing the rates at this point. Any other
discussion? I’ll entertain a motion on the proposed gas rate decrease.
Rosenbaum: I move approval of the proposed gas rate decrease.
Dawes: Second.
Bechtel: Moved by Mr. Rosenbaum. Seconded by Mr. Dawes that we recommend to the
City Council to approve a rate decrease effective July 1, 2002. All in favor please indicate
"aye".
All Commissioners: Aye.
Bechtel: Opposed? None. Then motion passes unanimously. Moving on to item 2D
proposed water rate increase. What the City taketh giveth, the City taketh away I guess.
We are being asked to recommend to the City Council that they approve a 20% water rate
increase effective July 1, 2002 and there’s a basically part of the reason for this is the
revenue bonds and other issues associated with our long-term water cost. Discussions or
questions of staff on this item? Mr. Rosenbaum.
Rosenbaum: The water rate increase was in part predicated on the increase in the
wholesale rate from San Francisco. We’re told that the increase from San Francisco is not
going to occur. Are you going to propose reducing the rate increase request?
Baldschun: No we won’t. Again, timing is everything. We got the proposed rates from
San Francisco indicating a wholesale rate increase and went through the budget process as
the staff does. We prepared the language that we’re expecting this and also indicate that
as the reason for the rate increase because it’s a $400 thousand hit and that adds to the rate
increase. With Schedule B changes, we will revise this downward to reflect no increase in
wholesale costs. But if you look at the rate issue here, it’s certainly not SFPUC. Even in
’03-’04 when there is a planned SFPUC increase. It’s the CIP. The CIP is going up so
much in one year that we need to transition to that through a combination of the bond
proceeds, using the reserves and two rate increases. Now I think what this means in terms
of the impact on the customer from San Francisco not increasing their wholesale rate is it
should reduce the size of our retail rate increase if we have to have a rate increase next
year. Our projections are that we’re going to have another rate increase in ’03-’04 of 25%,
but I don’t think that’s going to materialize given the fact that SFPUC is not going to have
a wholesale rate increase this year, which tells me that we’re going to have at least $400
UAC Minutes 5-1-02 DRAFT Page 28 of 40
thousand, perhaps $800 thousand more in the reserves as a result of that action. So that "
should have some favorable impact on our rate proposal for next year. Even taking out the
San Francisco issue, you still are left with this very large C~ and we need to do the CIP.
Rosenbaum: I recognize that the CIP impact is there, but it seems to me and I guess I
made the same comment last year, if we were the California PUC and you gentlemen were
PG&E and you came to us and said we’ve got this rate increase based on certain estimated
increases and costs and, oh by the way, one of these increases ain’t going to occur, but
what the hell, we won’t take that into account. The members of the CPUC would kind of
look askance at that and suggest that you adjust the rate increase to reflect your true
increase in costs.
Baldschun: Well the rate proposal is not based on the requirements for this fiscal year.
That’s obvious. If you look at the budget document for ’02-’03, you don’t even see the
CIP going up much compared, but if you look at ’03-’04, that’s where you see it. So I
don’t know how PG&E plans or how the PUC wants them to plan to have levelized rate
adjustments, but that’s what this is all about. We’re trying to levelize the impact of this
huge project that’s coming up, not in this fiscal year, not in the proposed budget, but in the
following year and Council’s approved the CIP. We’ve issued bonds for it. Everybody is
on board to do it and this is simply the plan to fund it without having more of an adverse
impact on the ratepayers.
Rosenbaum: Sure, but it would seem that your CIP would be in exactly the same shape if
the rate increase were reduced by $400 thousand. I don’t want to belabor it. At some .
point, I’ll offer an amendment to reduce the rate increase by that amount.
Baldschun: Okay.
Ulrich: Your analogy, Mr. Rosenbaum, with CPUC and PG&E, the one difference is in
maybe the CPUC would not approve the rate increase because they know that additional
amount of money on rate of return would then go to the shareholders of PG&E in the form
of additional dividends or higher profits, whereas, the kind of money we’re talking about
here whether it is a lower rate or it goes into reserves or we spend it on CIP is all the
money of the customers in Palo Alto. It goes nowhere else. So I think your point about
whether there should be $400 thousand more in the reserve is a good point, but it is one
that is not going to go somewhere else and it won’t be diluted by dividends to somebody in
Kalamazoo, Michigan.
Bechtel: Other? Mr. Ferguson.
Ferguson: I’d like to connect this up to the legislative effort. I don’t have the answer right
now, but let me just pose the question. How does our, what’s the message that we convey
vis-g-vis the other suburbs in the San Francisco in the way we increase our rates this year
or next year or levelize them? Is there a wiser way, a more judicious way of incurring this
increase inside Palo Alto for purposes of making our case stronger in the legislature? Is it
better for us to take a big painful hit next year all at once? Do we look like we’ve had a
kind of cushy time of it if we levelize it over two years where the other suburbs are
incurring a painful increase forced by San Francisco next year? I’m just wondering how
the message works outside the city.
UAC Minutes 5-1-02 DRAFT Page 29 of 40
Beecham: I’d say there may be some small political benefit if we say that we have or we
are now in the process of recommending a rate increase to fund our own CIP that does take
into account reliability for our own distribution system. Whether we say we have the rates
this year or that we have approved the CIP for ’03-’04 is probably a small difference
actually.
Ulrich: As you also recall when we had this discussion about the 10-year financial
forecast, it showed in here, correct me if I’m wrong Randy or Lucie, but it showed 20%
this year, 25% next year and then several years of zero and then an actual reduction and
one of the ideas is to be able to smooth out these rates so that the increases are not jumping
all over the place. So I think this would fit iia with the smoothing part rather than have the
25% next year, it may be less than that. So this is our judgrnent area on what the
appropriate way to handle this lack of an increase from the City of San Francisco.
Bechtel: Thank you John. I think you raised a good issue. If you look at long-term, and ¯
actually, we’re looking at another increase next year. Mr. Dawes.
Dawes: Yes, I wanted to raise similar questions on water as we did for an earlier fund. I
noticed in the quarterly update that the water.fund, water RSR is projected at 10.5 at the
end of this year and then if I fast forward to the water fund in the draft budget, it shows a
14.586 balance at the end of this year and wondered if looks like there’s been substantial
slippage in that area. Same as we have so that this would be another reason for adhering to
the rate increase, which absorbs the San Francisco adjustment.
Baldschun: Well, let me just say to clarify, the 14 million is now fight around 10 million
based on Amy’s comments which is consistent with the 10-year financial forecast and
that’s below the maximum guideline of 11 or some million’. I don’t want to focus too
much on this SFPUC. We talk a lot about this huge project and the based on the
projections we’ve gotten from San Francisco, they have proposed rate increases from now
through the next 15 years, but they’re really not significant until 2008-2013 according to
their schedule. So I think if we can just get the SFPUC wholesale rate increase out of our
consciousness for a while and focus on what’s really driving this and that’s our capital
program.
Dawes: I only mentioned it because Commissioner Rosenbaum indicated he was going to
try to get it back a little bit later. One last question about the bond proceeds and again on
the water fund summary, it shows that at the end of next fiscal year, which is at the time
we will be starting to spend at our peak CIP rate for the big hole in the park and all that
stuff. We only have $584 thousand left of our bond proceeds. Basically we’ve spent $13
million. I realized that soft cost got reimbursed out of it right at the outset, but to blow
through $13 million in two years when before any of the big bucks start hitting seemed a
bit of a problem.
Baldschun: Well the timing and use of those funds is not so much trying to use those in
the very specific year in which that project’s going to hit. You really have to look at it in
terms of where did we start from and where are we going to end up at? We started with no
water rate increase. This was last year. With a CIP escalating over a 3-year period up to
$22 million, and we’ve got bond proceeds of$11 million. Now we can use those in the
last year and all that’s going to do is make our reserve balances quite a bit lower in these
early years. I mean at the end the 3-year period, we’re going to be exactly where we would
UAC Minutes 5-1-02 DRAFT Page 30 of 40
be whetherwe used the money early on, over a 3-year period or we use it at the end. The
reason we’re using it early on is because we want to keep the reserves healthy. We also
from our financial advisor’s standpoint, we want to have healthy reserves for our ratings,
so there’s no reason fo~ us to hold back on using those funds. If we did, we’d probably
have to have a larger rate increase. I mean, essentially, those bonds are buffering the size
of these rate increases that we’re proposing.
Dawes: Thank you.
Bechtel: Any other questions ofstaffon this? Mr. Carlson.
Carlson: I think this applies to all these reserve issues. It must be in the budget here
somewhere, but our reserves are so large, the interest we’re earning on them has to be
pretty significant item.
Baldschun: We do get interest income from all of our utility reserves. The yield varies. I
think the yield these days, the weighted average let’s say of the portfolio for the City, what
is it Amy?
Javelosa,Rio: The interest income is actually reflected in the summary. We are showing
an interest income here and how it’s computed is based actually on the average balance on
the cash and not on the reserves. So while we may be showing a reserve balance here, the
accounting is using the daily cash balance or the monthly cash balance to compute the
interest income.
Bechtel: Out of curiosity, what is the difference between ourdaily balance and our
reserves? Are we talking about $50 million or $10 million?
Javelosa-Rio: I think, sir, the difference is when we have the cash balance, when we
compute on the balance sheet, there might be, this is not a question of the cash basis and
accrual basis of accounting. So for example the rate stabilization, reserve is computed on a
full accrual basis, which has some accounts payable, while we compute the interest base on
the cash balances of a certain month. There may be some accounts payable sitting there so
if we compare the cash and the reserve on two different reporting basis, they don’t match.
And I think that is the difference.
Bechtel: I understand. Any other discussion on this? If not, I entertain a motion to
increase our water rates on an average of 20% effective July 1. Do I hear a motion?
Dawes: So moved.
Bechtel: Moved by Mr. Dawes. Do I hear a second?
Carlson: I’ll second.
Bechtel: Seconded by Mr. Carlson. Any other discussion? Mr. Rosenbaum’.
Rosenbaum: I would propose an amendment to reduce the rate increase by the size of the
reductior~ of the proposed increase of the San Francisco wholesale rate.
UAC Minutes 5-1-02 DRAFT Page 31 of 40
Bechtel: I have a motion, an amendment to reduce by approximately $400 thousand; I
believe it was approximately that to be applied in some way across that. Do I hear a
second?
Carlson: What percent is that?
Bechtel: There is 3.1 million is the rate increase according to the report.
Baldschun: It’s 2.6%.
Bechtel: 2.6?
Baldschun: $400 thousand and you’re taking it from 20 down to 17.4.
Bechtel: Not hearing a second on the motion to amend, we’ll move on to call to question.
All in favor of the proposed water, that we recommend to the City Council to approve the
rate schedule, all in favor please say "aye".
Carlson, Ferguson, Bechtel, Dawes: Aye.
Bechtel: Opposed?
Rosenbaum: Nay.
Bechtel: One, we have passes on a count of 4 to 1. Mr. Rosenbaum voting in the negative.
I guess that completes the agenda. No I’m sorry. One more. We have wastewater
collection 2E. This is a request for us to recommend to the City Council that we approve a
25% wastewater collection rate increase to be effective July 1, 2002. Questions of Staff on
this one? I .entertain a motion to approve that we recommend to the City Council approve
the 25% rate increase.
Rosenbaum: So moved.
Bechtel: Mr. Rosenbaum moved. Second by?
Dawes: Dawes.
Bechtel: Mr. Dawes. All in favor please say "aye".
All Commissioners: Aye.
Bechtel: Any opposed? Being none, motion passes unanimously. And I’ve reached the
end of my report, end of my agenda, so that completes our new business item fortonight.
Next regularly scheduled meeting is June 5th and which we will talk about the electric
long:term resource plan.. Randy, you have a question?
Baldschun: I believe you need to take action on the operating budget and the CIP. You,ve
approved the rate proposals, but unless I missed something, I don’t think you’ve taken any
action on the operating budget and the CIP.
UAC Minutes 5-1-02 DRAFT Page 32 of 40
Bechtel: I guess you’re fight. I guess we need to.
Ferguson?: Where’s the agendized item?
Ulrich: It’s listed under 2. It says Fiscal Year 2002-2003 Operating/CIP Budget and Rate
Proposals and it’s shown as an action item.
Bechtel: Okay. I guess.
Ferguson: That was my question at the top of the discussion whether. I’m happy to take
action. I just want to make sure we’re not going through a useless motion here.
Bechtel: So basically we’re looking atthe draft budget.
Ulrich: As you recall... [interrupted]
Bechtel: Beginning with item #, yes, it’s listed as agenda item #2 and all the way through
up to we reach the point of the rate increases.
Ulrich: As you recall, this has been an ongoing process. This is not an attempt to show
you this at the last minute of course. In years past, we’ve had very limited discussion
because the way the city budget moves by the time you get around to discussing these
items, it’s being printed and put into the manual. So we started a number of months ago,
as you recal!, talking the individual CIP areas and focusing on the ones that are a change
from previous years. If you have any questions on it or issues, we are glad to answer them.
Bechtel: Mr. Ferguson.
Ferguson: Mr. Chairman, I really don’t want to belabor the details of the budget or the C~
project list so I appreciate that, but I did ask the question at the beginning of our agenda
because I did have a couple of questions and they are things we visited a couple of times
before and maybe there’s a new wrinkle in the story. But it crops up, I think, in most of
the fund budgets, so let me ask the question generically. There’s a one-time facility rent
charge that crops up, I think, for all the funds, for example on the electric fund on page 6,
the ongoing facility rent is $255. There’s a one-time charge of $561k. Why is the one-
time charge so much larger than the ongoing charge and is this part of the process where
the City charges us market rate, top dollar rates for theuse of the City office buildings?
What does that number mean?
Ulrich: I believe it’s what you just described. It’s the rent that we pay to the City for the
use of City’s facilities. Utility in most cases does not own facilities. We pay rent to the
owner, which is the City and there is a market evaluation done. There was also an attempt
to mitigate those costs because of the economic situation in the market and the fact that
rents didn’t change much. So we did not have the same amount of rate increase in the
rents in past years. It’s now catching up and it will be an increase in the budget in July that
will reflect that change up to market.
Ferguson: Can you explain why there’s an ongoing charge and then there is a one-time
charge that’s so much bigger?
UAC Minutes 5-1-02 DRAFT Page 33 of 40
Ulrich: As you recall, this is a two-year budget so they deferred last year and we’re now
going to pay it this year.
Ferguson: Okay. My second question that again applies to almost all the funds is the
allocated charges. There’s a note 11 indicating that there is something perhaps related to
software and computer systems that’s allocated, I assume, at some City central staff
computer charge. And there my question is, is that being applied "rateably"? Is it applied
across City Departments based on their base budgets or how is it allocated?
Ulrich: That’s correct. It is allocated, actually, inthe case of the new program that we’re
working on that will have a significant cost to the City is the ERP which is the replacement
for the current accounting system and it will also include a job management system. So
we’re paying in Utilities, we are paying a fair share of that based on the expected use of the
system. So in the case of like the job management system, we would be paying a fairly
percentage proportion of that because of the amount of CIP work we do and how it will be
used..
Baldschun: Let me just elaborate on this. because it’s a very important application. I know
Bern is well aware of it. I don’t know that this has come to the attention of the UAC, but
the City’s financial accounting system is called IFAS. That was installed a number of
years ago and it’s going to be replaced. They went out to bid. There are still two vendors
that they’re looking at to replace it, or what they call ERP, or Enterprise Resource Plan, I
think it is. But as John said, it’s the general ledger, it’s all the financials, it’s the payroll,
it’s fixed assets, inventory, purchasing and it’s a huge application and it’s expensive, but
it’s one that will benefit the Utilities immensely as well as other City departments so that’s
what you’re seeing with these increased allocated charges.
Bechtel: Question in general on the budget preparation process. Have you taken a look at
this with regard? You certainly, the Utilities have their own revenue, but with respect to
overall, just looking at this from the top down or bottom’s up view, that we’re doing the
best we can in managing the expenses and overhead and that these are tough times for most
companies. The City, of course, benefits. The Utilities benefits from what we see having
gone through the revenues, but I can see a lot of other things where the City can benefit
from just reduced expenditures here and there. What sort of guidelines did you use for
yourself in looking at all the discretionary spending?
Ulrich: Well we attempt to follow the same guidelines as the general fund in looking at
ways of deferring some work. Most of the savings you’ll see in there are from not filling
positions. We are by far the largest organization or the largest number of vacant positions
so we’re looking at each one. Our goal this year, was not to add positions unless we were
able to find a way to either pay entirely for that additional position or additional revenue to
offset those costs. As you can see, it went very well in that area. At the same time, we’re
increasing the amount of work we’re actually accomplishing. So we’re looking at
everything. We’re also candidly looking at ways we can help the general fund and the rest
of the City get work done. We’re all part of the City and we are finding the synergies
around how to do things for the general fund that will also help our utility customers.
Bechtel: On a procedural issue, should we, we have before us an operating budget for next
year. We also have a long-range CIP. As part of our process, our recommendation tonight
UAC Minutes 5-1-02 DRAFT Page 34 of 40
to the City Council, do we include the long-range C]~ as a reeommendati0n or are we just
looking at next year’s operating budget?
Ulrich: Well the budget approval is just for this year, but in order to give you an idea of
why we’re spending the money, you have to look at the Capital Improvement Program for
much longer periods. For example, the water, you have a good understanding of how
much it’s costing for the water C~P and it’s not just a commitment to fund it for next year.
Next year fits in ~¢ith the entire plan, but technically you’re only approving the actual
expenditures for the forthcoming year.
Bechtel" I’ll entertain a motion then that UAC recommends to the City Council they
approve the Utilities Operating and CIP Budget for fiscal year ’02-’03. Do I hear a
motion?
Ferguson: So moved.
Bechtel: Mr. Ferguson moved that we recommend to the City Council. Do I hear a
second?
Rosenbaum: I’ll second and make a comment.
Bechtel: Second by Mr. Rosenbaum. Further comments?
Rosenbaum: I guess UAC has been looking at this information and making
recommendations to the Council since the UAC started. This is perhaps a cursory a look
as we’ve given. George, are you going to.the Finance Committee to represent the UAC?
Bechtel: Yes.
Rosenbaum: Yes, the Finance Committee doesn’t know that we looked at that as cursory
as did and I don’t know that you want to tell them. I’m not quite sure how to proceed. Is it
any different this year than it has been in past years? Clearly it was hard to get a second,
because I suspect none of us are terribly comfortable with making that recommendation.
Ulrich: Let me make a comment. I guess I would say I’m very disappointed in that
perspective is that I thought exactly what we did is we actually spent more time on it,
because we went back and started much earlier in the process and brought forward all the
work we did last year and that this is the second part of it so this long-term plan you did
see last year and portions of it the year before and on specific major areas, for example, the
water area, we went through a lot of study sessions and discussions on it. So I thought we
had spent time on this and we devoted the last meeting as I recall, no the meeting before
that, to the highlights to the changes. The other reason I think we spent time on it was we
put a lot of time and effort into the Strategic Plan, which called for in this matrix, the
things that were important to do and we tried to relate all the work that we’re doing to
those Strategic Plan initiatives so that we’re not off trying to sell you, doing something that
doesn’t fit in with reducing, keeping rates low or improving service reliability. So if we’re
not doing a good job in communicating either on specific.projects or where we’re spending
the money, then we ought to get back together and discuss how to do a better job of that.
Because we do not want you to go into the Finance Committee if you’re not comfortable
with what we’re doing.
UAC Minutes 5-1-02 DRAFT Page 35 of 40
Rosenbaum: I think you make a good point, John, and indeed two months ago, we
discussed significant changes I guess from year to year in the budget and I think that was
helpful. I think what you’re saying from a macro level, we’ve looked at the budget and.
compared it to the Strategic Plan and surely didn’t find anything out of place so I would
think George when you speak to the Finance Committee, that you emphasize that from the
macro level, we’ve looked at it and it seems fine without suggesting that we’ve gone
through the details of the line items in the budget.
Bechtel: Dick, I agree with you. I certainly can give you the floor. The process by which
we went through this is perhaps Rick and I were talking earlier in the meeting about having
gone through this in the previous years line item by line item and that is certainly a process
by which I’d be prepared to do so~ That’s why I encouraged everyone to do their
homework prior to this meeting and I felt that everyone had done their homework and had
looked at this thing. There seemed to be very little motivation for going through the details
at this time, so perhaps some of it is a cursory look. I certainly did not spend a small
amount of time at looking at this prior to the meeting. Mr. Dawes.
Dawes: I’d like to put in a plug for the process. In years past, when we have gone through
a book much thicker than this it seemed, CIP by .CIP, frankly the input that the
Commissioners can make on that kind of a thing is I think minimal. I think to characterize
our process as cursory is wrong. I rely not only on what we have seen tonight, but what we
have seen and been through in previous meetings. Frankly, I think, and I’ve said this
before, and I’ll say it again, the 10-year forecast, which Randy had at hand, and which the
staff has done an incredibly good job in putting together, I think it’s the most valuable
piece we have and we started with this 6 months ago. I’ll note that the rate increases,
which are really one of the bottom, bottom lines of what we do is fly-specking those, are
totally consistent with the 10-year forecast that we went through. I think it’s been an
excellent way of going through policy issues, which face the Utility and have gotten
deliberately away from the detail, so I would commend this process myself.
Bechtel: Mr. Carlson.
Carlson: I missed the last meeting because of a funeral, so I don’t know if you went over
this. I’m very uncomfortable with approving this kind 0fbudget with this level of
discussion because there’s some resource management operations goes up by 150% in 2
years. I mean that’s a pretty big item. I don’t remember ever discussing anything like that
and there’s some similar increases in the operations side and then there’s the rent item,
which Rick properly called out, which rents are not going up, they’re going down. They’re
collapsing right now. This is obviously a general fund bail out. Maybe that’s not a bad
thing, but that’s where it is. I just feel very nervous. In my understanding of the agenda
was that we were just starting to look at the budget and what was being approved, the way
I read the agenda, was the rate increases, which is why we jumped to that and boy I sure
would like to discuss this a little bit more, but here we are at 9:35 so I don’t know what to
do.
Bechtel: Mr. Ferguson.
Ferguson: The. process unfolded pretty much as I expected it would unfold. I think there
were a couple of procedural missed cues here. I don’t think tonight’s missed cue was fatal
UAC Minutes 5-1-02 DRAFT Page 36 of 40
although it’s a little bit of a stretch to say the budget was an action item proposed tonight.
I guess we can float a Supreme Court opinion on that somewhere, but I think Mr. Carlson
did miss the Strategic Planning discussion where we did talk about some significant
changes and items in the categories you indicated. It wasn’t in the context of the budget
dollar layout in this chart of accounts, but we hit the high points in those earlier
discussions. So I agree the process is an improved process. The other missed cue here is
that it wasn’t clear when any of the Commissioners who wanted to talk about a couple of
specific projects, it wasn’t clear when the invitation was extended. I would have come up
with the a few more comments and I think Mr. Rosenbaum wanted to make a few more
comments and so maybe there’s a better way to lay out the agenda given the major
improved changes that we made in the process. Maybe there’s a better way to define these
things in locked steps so that there are no missed cues the next time.around. I’m happy
with where we are, all things considered.
Bechtel: Thank you Mr. Ferguson. Other comments? Well I think that in proceeding with
this, we could have tried a systematic going through page-by-page, which I think might
have been instructed. We did have in front of us, in proper order anyway, the details of the
budget and then the back up being the rate proposals that we’re too basically fund next
year’s budget. I think every year, we seem to learn a little. At least, I’ve learned from my
mistakes having gone through 3 of these sessions. This year, perhaps, I think looking at
the long-term plan as we did several months ago and then strategic plan certainly gave me
plenty of background. Certainly the material as presented here, there was plenty of detail
and so we have our email system. I encourage all of us to use that system to bring up
points you didn’t understand so I guess I’m perhaps a lfftle unhappy that some of the
Commissioners felt that there needed to be more discussion on specific items. You’re
certainly welcome to come forth with those. At this point, I sense at least some level of
comfort with the budget the staff has put together. There may be some specific questions
on some of those items. We certainly have time to talk about them. Then certain!y next
year, we can come back and address them again. Any other comments before we vote on
this recommendation for next year’s operating budget?
Carlson: Can I just ask the one question?
Bechtel: Yes.
Carlson: Why does resource management operations go up by 150% in 2 years?
Ulrich: Some of that maybe Girish wants to answer that, but I think you’ll notice that the
legal fees are some of the significant... [interrupted]
Carlson: So that’s legal fees? I mean I just want toknow what’s going on. It goes from
$2 million back in 2000-2001 to $5 million.
Ulrich: I can go through the details, but that as you recall we’ve had discussions about the
additional legal charges.
Carlson: So that’s where it is?
Balachandran: That’s one major part. The other is NCPA cost.
up significantly and the previous budget, that was not as high.
UAC Minutes 5-1-02 DRAFT
NCPA cost has also gone
Page 37 of 40
Carlson: Our payments for membership as opposed to power purchases?
Balachandran: Oh yes, power purchases are just pass through. It’s the services like power
pooling and legal expenses and everything else. So those were, from a resource
management perspective, legal expenses are a large chunk of new cost and NCPA cost if
you look at just the NCPA staff cost that gets passed on to us, not the power cost. That has
taken a pretty large increase too.
Carlson: Well, after we get through this craziness, I would assume that item ought to go
back down?
Balachandran: Yes, I was just reviewing. I’m not sure when that craziness is going to get
over like Commissioner Bechtel talked about a little while ago. Nothing’s been fixed.
Ulrich: Maybe I’ll wait until after you have your vote, then I would like to comment a
little more discussion on this budget area.
Bechtel: Okay. Any other specific items or questions? Then all in favor of
recommending to the City Council they approve the utilities operating CIP budget for next
year, please say "aye".
All Commissioners: aye.
Bechtel: Opposed? No? Motion passes unanimously. I guess we’re close to wrap up,
John?
Ulrich: Sure, just a couple things on the budget. One, my sense is and I think I articulated
it a few minutes ago is that we followed the budget process and in fact made significant
improvements over prior years. Even though this is an interim budget year where we’re
not basically zero-based budgeting. It’s an attempt to have a 2-year budget cycle in the
City, so there should not be any major surprises. Last meeting, we did not discuss the
budget. ~That was the strategic plan meeting. It was the meeting before that where we
brought all of the items that were significant changes including the legal and others and
that’s where we had, I thought, a pretty detailed discussion. I guess what I’d like to have
some discussion or future meeting is the process for next year. The last thing I Want to do
and I am, I guess, conveying some disappoin,tment in not meeting the needs that I thought
you all wanted to have and the confidence that you have in the budget process that we
followed. So if we can have some more discussion on that, because we have protracted
this out over a.much longer period of time rather than hitting it all at one meeting and
going through it item by item. We took the high level and moved it through that way. So I
appreciate your support on that, but on how we did it, but I’d also want to meet the needs
in the sense that some of you were disappointed in something that we didn’t do in this
process.
Bechtel: Well I think we can certainly do some homework and let you know perhaps what
we can do for next year’s process to do this sort of thing. I think that’s my guess is that
this is a process that can change as we can change rates in midstream, we can certainly
change the process. Randy?
UAC Minutes 5-1-02 DRAFT Page 38 of 40
Baldsehun: Having gone through this a number of times, every year, it is a crunch. And
the truth is is that you have this Palo Alto process where we go to the UAC, Finance and
the Council. So you really have to back up from the Council date and that’s June 17 this
year. Then you’ve got the Finance meeting. Finance needs to have enough time to have a
meeting between them and the Council so the Council can digest the minutes. And every
year, we end up with this problem with the UAC meeting and perhaps more so this year.
What is different this year I think is that, and by the way, I think it’s better this year, is
don’t have the detail. You don’t have the functional detail and we don’t have the
functional detail. Some printer has it right now and he’s printing up hundreds of copies.
Finance will have it next week. It will have the same information you have plus some
functional detail. What you have is the. big picture and in my opinion, I think that’s
appropriate for you. Now the detail usually you don’t really get into that much frankly.
But what we’ve tried to do from the very beginning here and we’ve really bent over
backwards, particularly John pushing us, is to get you the information early. We had to do
our rate proposals back in March, all 5 of them. We’re normally doing them in April and
so the idea was to give you an early heads-up on what’s coming. You had a chance to
digest the rate proposals. You had a chance to look at the 10-year. You had a chance to
look at the operating budget, which was reflected in the 10-year for ’02-’03. I don’t know
how we could have done it otherwise given the fact that you’ve got a May 1st meeting,
they’ve got a Finance meeting and you’ve got a schedule that’s got to flow all the way to
the Council.
Bechtel: Mr. Dawes.
Dawes: One area that would be exceedingly helpful and this has come up in the past is
much more standardization in the format of the financial reports. One of the things that we
have spun wheels on both email and here in session is not being able to bridge from one
report to the other and drawing misconclusions about it. If there was one format, it would
be vastly easier for the staff to deal with too because if you’re dealing with one format for
quarterly reports, for budgeting, for all purposes, it would be you’re operating offthe same
database. You make one forecast based on actuals, year to date, forecast of balanced year
and that serves for every purpose. I think that confusing for instance sales revenues are
different in one report versus the other and so I would put in a very big plug for
standardization of financial formatting both as a way to save staff time, but to increase
depth of understanding on the part of Commissioners, Finance Committee and Council.
Bechtel: Mr. Rosenbaum.
Rosenbaum: Let me try to amplify a little on my concern. I actually agree with Dexter. I
think these 10-year reports or 10-year forecasts are by far the most interesting thing we go
through and we ask a lot of questions. I personally had difficulty understanding certain
aspects of it when I’m going to be trying to meet with staff to better my understanding. I
found that all helpful and that’s high level. But the Council Members and the Finance
Committee, they’re going to have this printed budget and that’s a hell of a lot of work to go
through and it’s very tempting for a Finance Committee member to say well the UAC has
already gone through this and that in a sense relieves me of some of the burden just as the
full Council might well feel that way after the Finance Committee has reviewed it. There’s
only a certain amount of time in a day and my discomfort is that we clearly haven’t done
that. The things we’ve done are perhaps more important than attempting to go through
line-by-line so my point is that if you can somehow convey to the Finance Committee that
UAC Minutes 5-1-02 DRAFT Page 39 of 40
we’ve done Very useful things but we have not done a line-by-line review and whether we
should or shouldn’t is hard to determine, but I don’t want to suggest that staff hasn’t been
very helpful in presenting us with the important issues and we’ve had a chance to debate
those.
Ulrich: Would you like me to just mention next meeting for the record?
Bechtel: For the record.
Ulrich: The next meeting for June is Wednesday, June 5 at 7 o’clock in this room and the
item that’s on the agenda now, subject to additions that you’d like to make is the electric
long-term resource plan. And this would be the next stage of the discussion that we had 3
months ago on various alternatives for the long-term resource plan so we’re getting closer
to our recommendation and it’s time to have that discussion with you all.
Bechtel: All right. Any suggestion? Any other items for next June s meeting.
Ulrich: I guess just probably a reminder, Mr. Bechtel, that the Finance Committee meeting
for the EnterPrise Funds, which will include us will be May 14 here at City Hall.
ADJOURNMENT
Bechtel: Yes, I think you alerted me sometime ago. No other items. I entertain a motion
to adjourn. ..
Rosenbaum: So moved.
Bechtel: Moved by Mr. Rosenbaum.
"aye".
All Commissioners: Aye.
Bechtel: Opposed? None.
Second by Mr. Carlson. All in favor please say
U/kC Minutes 5-1-02 DRAFT Page 40 of 40