Loading...
HomeMy WebLinkAbout2001-04-30 City Council (5)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL FROM: DATE: SUBJECT: CITY MANAGER APRIL 30, 2001 DEPARTMENT: UTILITIES CMR:216:01 ADOPTION OF A RESOLUTION REVISING RATE SCHEDULE C-4 TO EXPAND THE UTILITIES RESIDENTIAL RATE ASSISTANCE PROGRAM RECOMMENDATION The staff recommends that the City Council: 1. Approve the attached resolution revising Rate Schedule C-4 to extend applicability of the Utilities Residential Rate Assistance Program to Palo Alto residents of mobile home and trailer parks and; 2. Approve adoption of the Department of Housing and Urban Development Income Guidelines to apply to the Utilities Residential Rate Assistance Program. BACKGROUND In 1993, Council approved the Utilities Residential Rate Assistance Program (RAP) to provide¯rate relief to residents who lack adequate fmancial resources to pay utility bills (CMRi2,62:93). RAP was pattemed upon similar utility programs in the state that base eligibility on the State Department of Economic Opportunity income guidelines. RAP also provides a utility discount to qualifying residents with physical, disabilities that cause them to use additional energy or water in the home. In 1999, Council raised the RAP discount from 15 percent to 20 percent. Today, approximately 380 households qualify and participate in RAP. Approximately 300 households qualify under the low-income guidelines and approximately 80 residents qualify for disability reasons. 300 RAP participants represent approximately 25 percent of the potential households that qualify under current income , guidelines. CMR:216:01 Page 1 of 3 RAP is limited to residents who have utility accounts with the City of Palo Alto Utilities. This requirement precludes participation by resident-tenants of sub-metered utility, services located within a mobile home park. The City of Palo Alto provides utility services through a large master meter and billsthe owner. The resident-tenants are utility customers of the park manager/owner who is responsible for maintaining the utility distribution system within the park, installing and maintaining sub-meters to the mobile homes, and billing the tenants for utilities. DISCUSSION Palo Alto residents are experiencing significantly rising energy costs in 2001. This has a particularly adverse impact upon seniors on fixed incomes and other residents with limited earning power. To counteract the effect of rising utility rates on lower income residents, staff proposes to raise the RAP income guidelines so more residents can qualify for rate relief. To determine eligibility for RAP, the current income guidelines are provided by the State Department of Economic Opportunity (DEO). The DEO guidelines apply statewide and do not match well with the reality of living in an area such Palo Alto where the cost of living is higher than average. However, more realistic income guidelines are currently used for Pal.o Alto’s Fee Reduction Program in Community Services. The Department of Housing and Urban Development (HUD) develops these income guidelines specifically.for the metro area of Santa Clara County. Based on the HUD very low income guidelines for a household of four, the income cap is approximately $44,000. This compares to the DEO income cap of $32,000. Staff proposes .to replace the DEO guidelines with the HUD guidelines for the Utilities Residential Rate Assistance Program. This will enable more Palo Alto residents to obtain rate relief. However, one group of residents that currently cannot participate in RAP are the resident- tenants of Palo Alto’s sole mobile home park. The Buena Vista Mobile Home Park has approximately 169 people living in 75 households or mobile homes. Such residents have an indirect and unique relationship with the City of Palo Alto Utilities and the Mobile Home Park is a unique customer of the Utilities. Staff has evaluated how RAP could be extended to this group. Staff met with the Buena Vista Mobile Home Park owner, surveyed the tenants to determine RAP eligibility, and identified a billing solution that will work satisfactorily for all parties. Based on a tenant survey conducted by Human Services using HUD income guidelines, a majority of the Buena Vista households would qualify for RAP. CMR:216:01 Page 2 of 3 RESOURCE IMPACT With an effective date of May 1,2001 the expansion of RAP for the remaining two months of the current fiscal year is expected to reduce utility revenues marginally. For FY2000-01, the additional reduction in utility revenues is estimated to be approximately $3,000, $3,000, and $8,000 in Water, Electric, and Gas sales respectively. Assuming that the number of RAP participants rise from approximately 300 residents to approximately 900residents by the end of fiscal year 2001-02, the additional reduction in utility revenues is estimated to be approximately $40,000, $40,000, and $100,000 in Water, Electric, and Gas sales respectively. This represents one tenth of one percent of the annual combined sales revenue for the three utilities. Although. there will be some additional on-going workload impacts on staff, such impacts are administratively feasible and manageable because there is only one mobile home park located in Palo Alto. POLICY IMPLICATIONS These recommendations do not represent a change in current City policies. TIMELINE The effective date of the recommendations is May 1,2001. ATTACHMENTS A: Resolution B: Utility Rate Schedule C-4 PREPARED BY:Ran~d Baldschun, Assistant Director of Utilities DEPARTMENT HEAD CITY MANAGER APPROVAL of Utilities EMIL~" HARRISON Assistant City Manager CMR:216:01 Page 3 of 3 RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING UTILITY RATE SCHEDULE C-4 OF THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES PERTAINING TO THE RESIDENTIAL RATE ASSISTANCE PROGRAM The Council of the City of Palo Alto does RESOLVE as follows: SECTION i. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule C-4 (Residential Rate Assistance Program) of the City of Palo Alto Utilities Rates and Charges is hereby amended to read in accordance with the sheet captioned "Utility Rate Schedule C-4-I," attached hereto and incorporated herein by this reference. The foregoing Utility Rate Schedule, as amended, shall become effective on May i, 2001. SECTION 2. The Council finds that the discounts to be provided to electric, gas, and water utility customers who qualify for such discounts under prescribed terms and conditions established by the City Manager shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto. SECTION 3. The Council finds that the adoption of this resolution is exempted under the CEQA Guidelines under Section 15273 of Title 14 of the California Code of Regulations. INTRODUCED AND PASSED: AYES: NOES: ABSENT: .ABSTENTIONS: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney Mayor City Manager Director of Administrative Services Director of Utilities 010423 cl 0072019 RESIDENTIAL RATE ASSISTANCE PROGRAM UTILITY RATE SCHEDULE C-4 Co APPLICABILITY: This schedule applies to residential premises that qualifY for participation in the Utilities Residential Rate Assistance Program. The residential premises shall be served by a separately. metered utility service(s). Residential premises that are located within a mobile home and trailer park and have at least one utility service sub-metered by the landlord-owner similarly qualifY. Based on the above qualifications, residential premises within the city limits of Palo Alto may include a single-family dwelling, a multi-family dwelling, or a mobile or trailer home. RATES: A discount of twenty (20) percent on any applicable City of Palo Alto Utilities Rate Schedule. SPECIAL CONDITIONS: 1;Residents may qualifY for participation in the Residential Rate Assistance Program (RAP) for either medical or economic reasons. To qualifY for medical reasons, a resident must provide a physician’s letter certifYing to the medical condition of the resident and the necessity for special medical equipment. To qualifY for economic reasons, a resident must provide proof of fmancial need as required by the City or its authorized certification agency. Residents participating in RAP based on economic reasons will be eligible to receive a 20 percent discount on water, gas, and electric charges. Residents participating in RAP based on medical reasons will be eligible to receive a 20 percent discount on the applicable water, gas, and!or electric charges. The 20 percent discount does not relieve the resident of the obligation to pay the Utility Users Tax. Such tax will be computed on the gross utility charges before applying the discount. 3.It is unlawful for a resident to knowingly provide incorrect or false information in connection with an application for participation in RAP. Such violation could result in a $1,000 fine or six months in jail, or both. \ The issuance of the discount shall be subject to further reasonable rules and regulations, including income guidelines to determine eligibility, as may be prescribed by the City Manager. The procedure fo~ qualification and all interpretations as to the applicability of the provisions of this schedule or such rules and regulations shall be made by the City Manager or her/his designee whose determination shall be final. {End} CITY OF PALO ALTO UTILITIES Issued by the City Council Supersedes Sheet No. C-4-1 dated 7-1-93 CITY OF PALO ALTO UTILITIES Effective 5-1-2001 Sheet No.C-4-1