HomeMy WebLinkAbout0255.092,
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lloy 14. 1992
THE HONORABLE CITY COUNCIL
Palo Alto, California
Attention: Finance Ccmmittee
proposed Wastewater Rate Increa~
H~er& of the Council:
Report in Brief
This report recommends Council approval of the attached Resolutiorl
to increase wastewater Collection revenue 9.9 percent or $754,000
on an ~nnual basis effective July 1, 1992.
Background
To comply with the City's Charter and t.'l-te conditions of the
Advanced Waste Treatment Facility Construction Grant mandated in
1979 (CKR:445:79), wastewater rates are established annually to
recover operating .and capital costs and to maintain a prudent
reserve level for system improvement. Additior,ally, retail rates
are based on a rate st.rucb.lre 'Which reflects cost-of-service
principles such that residential customers are charged a flat rate,
while non-resiaential customers are charged a rate base~ on the
quantity and quali~y of the effluent. Thus, non-residential
custo~ers charges ~re lin~ed to their water usage.
The revenue r-equirement of the Palo Alto Wastewa.ter Utilit'l
cons ists of ;. nwnber of components incl udj ng the cost vf the
treatment, the cost to operate and maintain a reliable system, to
finance a portion of the capital improvements from current
operating revenues, and to f\L~d a pr~dent reserve level~ A re\iew
of the FY 199~-93 wastewater Collection Fund's preliminary Annual
Budget ind:i.cates that this Fone is in a financially weakened state.
In order to avoid a revenue shortfall in this fund and to ensur-e
its financial stability, staff recommends approval of a 9.9 percent
rate increase effective July 1, 1992, which will provide $754,000
additicnal revenue.
The primary reason for this rate increase is to replenish a
depleted Syot.em Improve:ment Reserve {SIR). During this six year
drought, the financial condition of the Waste~ater Fund has
sutfered because it is, to a large extent, revenue driven by non
residential 'Water usage~ The SIR is c\lrrently \tiel 1 below the
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establish2d target level tor that fund. rhe projected SIR balance
for F¥ 91'-9~ is approxi::nately $300,000 'While t.he target level for
FY. !;'2-9) is $2,100,000. This proposed rate adjustment will
increase the funding level for this reserve approximately $550,000
above the amount funded by current rates. The projected FY 9"2-93
}7ear-end balance is $1.4 million.
Thus, approxi~ately 73 percent of the proposed $154,000 revenue
increase is necessary to restore toe SIR.. The remaining (u1".ds
generated by this rate adjustm~nt will help to offset increased
operation artd maintenance costs. It should be noted that a
financial r~view of this fund over the next t~n years has indicated
that a siqnificant rate increase of approximately 25 percent will
become necessary in FY 94-95 to finance the Infrastructure project~
The F¥ 94-95 rate i~crease would be even higher if the need to fund
the SIR was deferred to that year.
Application of the Proposed Reven~e Increa~
The overall percentage reverue increase is approximately 9.9
percent which was spread across the bo~rd. Each of the individual
rates bas~d on quantity and quality of effluent on Rate Schedule $-
2 were raised 9,9 percent as well as the domestic rate on Rate
Sche.dule S-l..~ 'I'he :-ates a.pplicable to hauled Liquid Wastes on Rate
Schedule $-4 .. ere also adjusted upward approl!:iID.ately 33 percent to
recover the costs of service for this activity. RevE.-r.ue collecte.d
under Rate Schedule S-4 accrues to the Water Quality Control Plant.
The followinq table indicates the impact of this proposed rate
increase on the custo~er classes:
Proposed CUrrent $ Percent
Rates Rates Increase Im;;reas~
Residential $12. E< $11. 50 $1.14 9.9
Restaurants
$jCCF Water Used 4.95 4. 50 .45 10.0
Commercial
$jCCF Used 2.55 2.32 .23 9.9
Comparison With Other cities
Figure 1, att~ched to this report, provides a budget comparison of
five Penin6ula cities who operate their own Wastewater Collection
System. The budget:s and ra.te comparisons for the four other
Peninsula cities are based on FY 91-92. However, since the subject
of this report i~ a rate increase for FY 92-9), the budget and rate
comparison tor palo Alto shown is FY 92-93. It should be
recognized that it is difficult to draw comparisons because each
City may have it's own accountinq peculiarities and only one annual
pariod is shown. For ~bample, the City of Santa clara does not
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break out its treatm~nt costs as do other cities surveyed. Santa
Cli!lra includes debt service. contr~ct services, memberships in
p~Lfessional organizations. health exams, and treatment costs unQer
a single account4 Furthermore, Palo Alt?'s st~ff is not familiar
with the operations of these other cities to any substantial degree
ana therefore we cannot state exactly why one city will vary trom
the .n~xt.
Still, fro-m disc1.lssions with the staff of these cities, the
followinq items have come to our ~ttention:
• Mt. View earns over $1 million annually ~~c= it~ Lcserves which
helpa to keep its rates appr-ox-imately 14 percent Ie-wer-than
~ould otherwise be the case. Palo Alto earns approximately
$60,000.
Mt. View has the advantage of a high mixture of apa~tment
dwellings in which to bill separately for sewer. Palo Alto has
approximately 24,000 domestic dwelling units compared to
40,000 units in Mountain View.
Santa clara earns approximately $2.0 million annually in
interest earnings which are used to pay current operating costs.
The interest is earned on a reserve set aside for expansion at
the treatment facility in the future.
santa Clara has a modern system and low capital improvement
activity.
• The N8stawater Collection System in Palo Alto is more mature
than systems in surrounding areas.
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SEWER RATE COMPARISON
RESIDENTIAL
..... ~ .. ~ M'. "liN
Aile CIt)' Parll ~ CI6n ... -~ ~~ ~,~: ~;~ ~
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The bar graph on the previous page compares residential wastewat=~
collection rates ootween five cities. cownercial rate compal'isons
are difficult to make on a meaningful basis because the rate
structures vary between the commerci~l customers in these cities.
staff recommends Council approval of
increasing 'Wa.stewater Collection revenue
1, 1992 ~
Respectfully 5ubmitted,
-r. ;).. £. W'~ f;...I.I..I--' __ _
W. RWDY BALDSCHUlI
Manager, Rates anu customer Services
/, .' t-t:L;( ~ ~~. YOUN~t/ 'f!
[:fire, ctor of tJt,il j..ties
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"i (~;;f:;2~ ~FLEMI~/ (/
.. Assistant City Mana~
'~ttaChments : Figure 1
Resolution
the att~ched aesolution
9.9' percent effective July
Rate Schedules 5-1, 5-2, ~nd S-4
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Figure 1
BUDGET COMPARISON 8ETWEEN ernE!>
CITY OF PALO ALTO
WASTEWATER
TOTAL -$ 7,nO,JOD
Sal'" -.. l EJ.er.ell II
OIMH E1p"rllIIn~l" ~------~-
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CITY OF SANTA CLARA
YlASTEV/ATER
TOTAL -.$ 11,080,000
REDWOOD C:TY
~;ASTEWATER
T01AL -$ 7,360,000
P",),m.nll
T(oN.tme."}t
Debt Se ..... 7J'I. COlllrIC! , .. _ ..
PaymeJlta
... i&!!lfJlT'~,klC$Un~ ....
s.alarlGl
, 811:,\qtita &
Inltrfund
e"penae. :::!!r.
k\Il..,fTLU
Otr.!"' E"P8flh' 5"-
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T,,,atmenl
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I S .. I¥~.
, eotrwofits ."
CITY OF MTN V:EW
WASTEWATER
TOTAL· $ 8,000,000
CITY OF MENW PAn..:
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Other &.p !'ro~1 , ..
Tr:alnsfer
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Sakrie •
• B,tr • .,lil.~
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WASTEWATER
TOTAL -.s 5,4'6,000
Ca.j:lliIJ O~Ia)'
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follows:
RESOWTION NO.
RESOLUTION OF THE COUN(':'IL OF TH'ECITY OF FALO ALTO
AMENDINC SCHEDULES 5-1, 5-2 AND S-4 OF THE CIT't OF
PALO ALi~ UTILITIES RATE3 AND CHARGES PERTAINING
fro SEW.'GE AND HAULED LIQUID WASTE COLLECTION,
VIS.PCSAL AND RELATED SERVICES
The Council of the City of Palo Al to does hereby RZSOLVE as
~ECTION 1, Pursuant to Section 12.20.010 of the Palo Alto
Municipal Code, Schedule S-l {Domestic Waste~ater ~ollection and
Disposal) t Schedule S-2 (Commercial wastewater Collection and
Disposal), and Schedule 5-4 (Hauled Liquid waste Charqes) of the
Palo Alto utilities Rates and charges are her~by amended to read as
shown on Sheets 5-1-1, 5-2-1, S-2-2, and 5-4-1, attached hereto and
incorporated herein.
SECTION 2 a This Coul"lcil finds that the revenue derived
from the authorized ad.justments of 'WCi.steW'ater collection and
disposal rates by the. City Hanaqer shall be used only for the
purposes set forth in the Palo Alto City Charter, Article VII,
section 2, entitled "Public utilities Revenue.-The adoption of
this Resolution is, therefore, specifically exempted under the
Public Re$ources Code Section 2108Q(b) (8) from the requirements of
CEQA.
SECTION 3. The foregoing changes shall become effective
July 1, 1992a
INTRODUCED AND PASS ED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
""':::--;===---~ --City Attorney
APPROVED:
Hayor
city Manager
Director of Finance
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APPUCABILITY:
DOMESTICWASTEWATEFl COLLECTION
AND DISPOSAL
UTiLITY flATUCHEDULE :u
This schedule applies 10 each =pied domesVc dweliing unit.
TERRITORY:
W~.~in !he inCOflJOfated "mils of the City of Palo Alto and on land owned or leased by the
City.
RATES:
Per Month
Each domestic j",elling unit ...................... S 12.54
SPECIAL tIOTES:
1. All OCCUpied domestic dwelling is designated as any house, cottage, fiat, duplex unit,
er apartment unit having kitchen, bath, and sleeping facilities and to which L11lities
servioes are being rendered.
2. Ally dwel!ing unit being individuany served by a water, gas, or electric meter will be
considered as continUO!Jsly occupied.
3. For two or more occupied dwelling unr-..s served by one water meter. tr,e monthly
waste'l/E.ter charge will be cafculated by multiprying the current wastewater rate by the
number of dwelling units.
4. Each deveiopad separate lot shan have a separate senvce iateral to a sanitary main or i
manhole. t
CITY OF PAlO ALTO UTILITIES
Issued by the City Coo neil
Supersedes Sheet No. S·I·1 dated 7·1·91
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Effective 7·1·92
Original Sheet No. S-1·1
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COMMERCIALWASTEWATEA COLLECTION
AND DISPOSAL
J.!Ill.ITY RATE SCHEDULE S-2
A. APPUCAEiIUTY:
Thts sd1edule,app~es to all establishments other than aomestic dWelling units.
B. TERRITORY:
Wllhin the inco<porated 'imiis 01 the City 01 PaIo Alto and on iane! owned Of leased by the
City.
C. RATES:
1. Restaurants
(A) Minimum charge per connection per month . . . . . . . . . . . . . . . . . $12.64
(8) Ouantity Ral-<>s;
Based on metered water, per 100 C'~bic feet ................ $ 4.95
2. Any establishment discharging sewage in excess of 25 QQQ 98 ~ons or Quality equivaient
of sewage per day as determined by metered water usage ~~
(A) Collection SyS1em Operation, Maintenance, and Inn ltTation Inflow:
$1,049.00 per million ganons ($0.78 per 100 cubic feet of melered water).
(8) Advanced Waste Treatment Operations and Malntenance Charge;
$792.00 per million gallons ($0.59 per 100 cubic feet 01 metered waler).
(Cl $ 175.00 per 1000 pounds 01 COD
(0) $ 373.00 per 1000 pounds of SS
(E) $ 2,32S.00 per 1000 pounds Of NH,
(FJ $10,990.00 per 1000 pounds of toxies·
*Toxics Include sum of chromium, copper, cyanide, lead, nicker, snver and zinc,
CITY OF PALO ALTO UTIUTIES
Issued by the City Counc"
Supersedes Sheet No. S·2-1 dated 7-1·91
Effective 7-1-92
Sheet No S-2-1
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All Other Estabfishrnents
COMMERCIAL WASTEWATER COLLECTION
AND DISPOSAL
J.!.I!h!IYJ3A.JL~f:\E DU I E S-2
(Continued)
(.A.) Mi:1imum Charge per connection per month ................. $12.64
(8) Quantity Ratas:
Based on metered water per 100 cub Ie reet . . . .
D. SPECIAL NOTES:
1, Upon app~cation from establlshments maintaining extensive 'Irrigated landscaping, the
monthly charge will be based upon the average water usage for the months of January,
February and March. If a water meter is idenUfied as exclusively serving irrigaiion
fandscapi.'1Q. ~uch meter will be exempted trom sewer charge calculations.
2. Sewage metering facilities may be required, in which case service will be governed by terms
or e special agree menl
3. Charges for large discharges (25,000 gallons per day or greater) will be determined on the
basis of sarnpfing as outlined h~ Utilities Rule anc Regulation 23C. Annual charges will be
determined and allocated monthly for billin~ purposes.
4. Dischargers of Unmetered Cootaminated Groundwater
Quantity rates for conectlon and treatment of the con!amlneted groundwpter will be baseo
on tt,e same rates app!icable to metered usage for Cllstomers discharging ~ess than 25,CXXl
ganons of sewage per day. Discharge permtts are issued by the Envimnmental Compliance
M""ager at the Water Quality Control Plant, 2501 Embarcadero Way, Palo Mo.
5. .L"X!!.!s..1Iia1 Waste Discharge Fee
A 1ee of $500 wili be required for the issuance of an Illdustrial Discharge Permit, inciud,ng
2I1y Exceptional Waste Perm~s. This fee may be reduced to $100 for a one-time batch
discharge permit.
CiTY OF PALO ALTO UTILITIES
Issued by the C~y COLlneil
Supersedes Sheet No. $-2-2 dated 7-1·91
Effective 7-1-92
Sheet No $-2-2
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HAULED LIQU!D WASTE CHARGES
UTIU1Y_RATE;~ULE 5-4
APPUCASIUlY:
i1'1is SChedule appfles to wastes as defined in Rule and Regulation 23.
TeRRITORV:
wastes originating from wi!r,~ arod outside the Regional Water Ouaflfy Control Plan! Service Area.
RATES:
Per loaa' of 1,000 gallons or less
Each additional 500 gallons or portion the,eof
Permit to discharge 11&1100 liquid wastes
$40.00
$20.00
$40.COjyr.
A bond or oasI1 depos~ for $2,000 shan be posted with tl1e appropriate City Department for an
nquid wss!e haulers discharging at the Palo Alto Regional Water Quarrty ContrOl plant
CITY OF PALO ALTO UTILITIES
Issued by the City Council
SvpersedtJs Sheet No. S+l dated 7-1-89
Effective 7-1-92
Sheet No 5-4-1
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