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Home My WebLink About0299.091May 30, 1991 THE HONORABLE CIn COUNCIL Palo ~to, California / Buoorr C; i -92 Attention: Finance and Public Works committee 'lfast8VI.ter Cpliection Rate IncreAse lIe.bers of the COunc il : Beport in Brief During FY 1991-92, the wastewater Collection Fund Is expecte~ to experience riSing operatinq costs and declining revenue~ In order to avoid II. revenue shortfall in this fund and to ensure its financial stability, staff recommends approval of ~ $1,560,000 revenue increase effectiVe July 1, ~991~ Background TO comply with the City Charter and the conditions of the City's Advanced Waste Treatment Facility construction Grant mandated in 1979 (CMR:445:79). wastewater rates are established annually to recover operating' and capital costs and to maintain a prudent reserve level for system improvement. Additionally, the revenue requireaent is set at a level to allow the utility to break even, and retail rates are based on a rate structure which reflects cost-af-service principles~ For residential customers, a flat rate is cbarged, while non-residential custolDer charqes are based. on the quantity and quality of the effluent. Thus, non residential custoaers' wastewater quantity charges are linked to their vater consumption. This linkaqe betWeen wastewater charges CIIR,Z9t, U ~----"""'---"-, -,--~. ~-~ • ~~-----~~------------:-~~ o ancI vater consumption has an i_portant i_pact on the financial at&bility of the Wastewater collection FUnd, especially during periods of decreased water consumption such as with the existi~ drougbt. UJ.tayater Fund Reyenue Requirements This report requests approval of a 26 percent overall revenue increase to cover increased financial Obliqations and reduced &ales revenue, which translates to a revenue requirement increase of $1,560,000 on an annual basis. Thi. revenue increase is accomplished by establishing new customer rates. There are several reasons for the need to increase wastewater collection rates. A review of the FY 1991-92 Budget indicate£ that Palo Alto'. share of the Water Quality Control Plant operatton costs is expected to increase approximately $478,000 trom FY 90-91. other -ajar co~nents of the revenue increase include the need to replenish a depleted System Improvement Reserve, as ~ell as recover declining sales revenue from the non-residential class. During the current fiscal year, the Wastewater Collection Fund is expeeted. to experience a $530,000 revenue short.fall due to the decline in non-residential customers' water consumptlon. Approxiaately 65 percent o.f the wastewater revenue is collected fro. non-residential customers. As drought conditions continue and water consumption levels remain at their present lev~ls during FY 1991-92, the wastewater Collection 7und would continue to experience a revenue shorttall. rheretore, a rate adjustment is necessary to maintain an appropriate revenue level sufficient to meet operatinq costs from these customers. Also, this rate increase will help restore the depleted System raprovement Reserve. staff proposes increasinq funding of the SIR by an additional $337,000. Finally, $215~000 la necessary to cover increases in other operating costs, such as operations and :aaintenance coats and interfund charges from City Departments. Wostevat.r Rate Ingrease Proposal In order to allow the Wastewater Collection Fund to break-even during the next fiscal year, a 26 percent revenue increase is proposed to beca.e effective July 1, 1991. This increase will be spread among all customers~ However, it should be noted that due to the relationship between the commercial (non-residential) custo.ers· wastewater charqes and their vater consumption, the comaercial rate schedule 5-2 has received a higher percentage of ,",-,," "'~~~-~j~~. ',. '\ .' 1 I I .' , " the required rate increase than the residential rate schedule 8-1. In thi. manner, the decline in wastewater revenue c~llect~d fro. the non-residential sector can be altiqated by the increased rates. The resultinq percentage rat. increase. is approximately 15 percent for residential customers and 32 percent for non residential customers. To the extent non-residential customers re.a:pond to the existing drouqht condition by reducing-their water consuaption as expected, the overall dollar amount o~ their wastewater bills vill approach a percentage increase closer to 15 percent. nit following table indicates the impact of tbis proposed rate increase. ProposeCS IncreaSE Percent Per Month rer Month Ch§nqe Residential $11.50 $1.50 15 Restaurants $/CCF watar used 4.50 1.10 32 COBaercial $/CCF Water Used 2.32 .57 32 A co.parison of Palo Altals proposed wastewater collection rates with those cbarqed in nearby communities is shown below. It is iaportant to note that the bill comparison does not reflect rate increases for the cit.ies of Menlo Park .. Redwood City" Los Altos and Sunnyvale" Which are antiCipated fer July 1, 1991. Their actual rate proposals were not developed in time for this report. Palo Alto Menlo Park xountain View Redwood City Los Altos Sunnyvale CKlUZtt.t1 WastewatEr Bill rpmparison Commercial Resident.lal Retail (S/eer) $11.50 15.50 9.95 14.38 10.00 10.98 $2.34 1.68 1.45 1.44 11/10 1.01 ---------.. I "-_ '.-J'--- ;/ o o sta~t re~ that Council adopt ~. attached ~esolution revi.ing Wastewater Rat. SChedul •• S-1 and S-2 effective July 1, 1991. Respectfully aubaitted, 'tv. ~ ~"aJ w. lUUIDOtk BALDSCIroII ABaistant Director ot utilities A4ainistrative Service. /2., (A...t-? IUCIIARI) 1.. YOUNG Director ot Utilities r 1IJ: City anager Attaclmenta: CIUUzttlU Resolution utility ~te Schedule S-1 Utility Rate Schedule S-2 , • ".~: ." , Rl!SOLUTION 110. Rl!SOLO"l'ION OF THE COUNCIL OF THE CITY OF PALO ALTO AKEIlDIIIG SCBEDIJLES S-l AND 5-2 OF TIlE CITY OF PALO ALTO DTILIrIES RATES AND CHARGES PERTAIIIIIIG TO SEWAGE COLLECTIOII, DISPOSAL AND Rl!Ll\TED SERVICES The council of the City or Palo Al to does hereby RESOLVE as follows: ~ECTIQN 1. Pursuant to Section 12.20.010 of the Palo Alto MUnicipal Code, Scbedule 8-1 (Do~estic Wastewater Collection and Disposal) and Schedule S-2 (Commercial Wastewater Collection and Disposal) of the Palo Alto Utilities Rates and Charqes are hereby amended to read as shown on Sheets S-1-1, S-2-1 and 5-2-2, attached hereto and incorporated berein. SECTION 2. This Council finds that the revenue derived .froliil the authorized adjusaents of vastewater collection and disposal rates by the City Manager shall be used only for the purpose .. set :torth in the Palo Alto City Charter, Article V.II, Section 2, entitled -Public utilities Revenue.-The adoption of tbi. Resolution is., therefore, specifically exe.pted under the Public Resources Code Section 21080 (b) (8) frOll the requirements of CEQA. SECTIOII 3. JUly 1, 1991. IIITRODt1CED AND PASSED: AYES: 1I0ES: ABSENT: ABSTENTIONS: A=T: City Clerk APPROVED AS TO FORM: City Attorney The for89oing changes shall become affective APPROVED: Mayor City Manager Director of Finance Director of UtilitIes -----' ............ -_ ... '"'---" ,""-,,.........,,- "-. ) .. r-j . <- ( I ~ ~ ~~ " ~ ~ '. u , j --~----~-------------------~:;:ri .' . " .', -~~1~; ~\ -C,<") J' APl'LICAlILm, / ,/ DOIIESTIC WASTElIATER COLUCTIOII AlII DISPOSAL UTILITY BATE SCHEDUlE $_1 ]hIs schedule appl~es to each occupied dome.tlc dwelling unit. TERRITORY, Wlthl" the Inc~rpoTated 11.lt. cf the City of Palo Alto and on land owned or leased by the City. RATES, Per Mgnth Each d .... tlc dwelling unit. ••• •• ~ •• 4 •••••• ~ •••• SIJ .SO SPECIAL 1I01n: An occupied d ... stlc dwelling I. deSignated a. any house, cottage, flat, duplex unit, or apart .. nt unit having kitchen, both, and sle.plng fac, litle. and to ~Ich .tllitle. service. are being rendered, Any dwelling unit being IndlYldually served by gas or .1.ctT'C .. ter Will be considered a. contlnuou.ly occupied. For .~ dwelling unit being served by DOre than "ne wastewater connection, the IOnthly charge will be '~lled to each connectiOn. CITY OF PALO ALTO UTilITIES Issued by the City Council Supersede. Sheet Mo. S-I-1 dated 7-1-90 EffectlYe 7-1-91 Sheet No. S-I-1 --"--.~.---------- • " • _____________ --------....,/0..:' COIItDCIAI. 1/ASTDlATEII COllECTION QID DISPOSAL lITIL!TY RATE SQifllUU S-2 APPliCABILITY. rbls schedule Ipplles to .11 establishments other thin domestic dwelling units. TElRITQlY. RATES: Within the Incorporated 110it. of the Cit! of P.lo Alto and on l.nd owned Dr leased bi the tlty. Restawranh Mhl_ charge per connection per IIDnth .•.••.•.••..••.•• $11.50 Quantity Rates: Based on .. tered water, per 100 c"blc feet. . . • . . . • • • .• S 4.50 Any eshh1hhMnt disc"'rg100 splgt! in ')leus Of 2~.QOO gallons or quality equinTent of seMJ9c per day is deteOllntd by egtered water usage IDd sampling. Collection Syst .. Operation, Maintenance, Ind Infiltration Inflow 5954.00 per .ill10n gallons (SO.71 per 100 cubic feet of .. tered water). Advanced VI.te Treatment Operations and Maintenance Charge $721.00 per .!ll1on gallons ($0.54 per 100 cubic feet of ""tored w.ter). S 159.00 per 1000 po.nds of COD $ 339.00 per 1000 pounds of 5S S 2,118.00 per 1000 pounds of NH, SIO,OOO.OO per 1000 pounds of toxlcs· *Tox1cs include su. of chromfum, copper. cYi~ide,lead. nftkel, s~lyer and z~n'. All Other Establishments Miolmua Charge per connection per month ....••...•..•• , 511.50 QUint It! Rites: Blsed on .. tered water per 100 cubiC feet . • . . . • • • • .• S 2.32 CITY OF ,AlO AlTO UTIliTIES Issued by the tlty Council • \ .' EffedlYe 1-1-91 Supersedes Sheet Nc. S-2-1 dated 7-1-90 Sheet Ho. S-2-1 · .. .. ~. o lCO!!TINlJEPl p1scbargers pI Ureettttd ContJl'DJttd $rgyndwiter -.< -. o COMMERCIAl WASTEWATER COLLECTION All) DISPOSAl • UTiliTY BATE SCHEDULE $-2 Quantity rates for collection and treat .. nt of the contaminated groundwater will be based 0_ tn. saoe rotes applicable to .. tered ",.ge for cust.mors discharging less thar. 25,000 gallons of sewage per d.y. Indystria] Mist, Discharge fre A fee of $500 will be required for the Issuance of an Industrial Discharge Penolt, 'ncludlng any Exceptional lIaste PeT'llllts. This fee II'Y be reduced to S100 for a one tl .. batch discharge ptnoit. SPECIAl IIOTES: Upon application fr .. estab11shments .. Int.lning extensIve irrigated landscaping, the .. nthly charge will be hased upon the averoge water usage for the .. nths of Janua~, February and Korch. If a water ... ter Is Identified as exclusively serving Irrl90tlon landscaping, such IIOter will be exempted frOll sewer charge calcuTations. Sewage .. tering facilitle, "'1 be required, in which case service will he governed by term, of • speci.l .groome_t_ Charges for large discharges (25,000 gollons per day or gre.ter) wi 11 be determined on the baSi, of ,.-pIing a. outlined In Utilltles Rule and Regul.tlon 23C. Annu.l charges will be deterllined .nd allocated oont'ly. CITY Of PAlO AlTO UTILITIES Issued by the Clty Council Supersedes Sheet No. $-Z-Z dated 1-1-90 ~-,. - ! Effective 7-1-91 Sheet No. 5-2-2