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HomeMy WebLinkAbout1979-10-02; City Council; 6018; Sewer Service Feesc Initial : Dept. Head --I- -. AGENDA BlLL NO. _L?Q/r -.-- SEWER SERVICE FEES SUBJECT : STATEMENT OF THE MATTER The adopted 1979-80 budget contained $433,824 for the maintenance and operation of both the Encina Hater Pollution Control Facility and the City Sanitation Diviston. This maintenance and operation budget exceeded estimated revenues ($367,200) by $66,624 or 18+%. in 1972. Current sewer service fees were established by the City Council In undertaking the task of rate analysis, staff considered using the financial plan prepared for the City by Brown and Caldwell in 1968; we considered using our own staff analysis; and we considered the 1979 revenue and finance report prepared by Brown and Caldwell as part of the Encina Phase 111 project. Because of the detailed information available and because of the need to familiarize ourselves with the system that will be required by Federal regulations when Phase I11 is completed, we used the 1979 report as our information base. In using the 1979 Bfown and Caldwell report it was necessary to make several modifica- tions since the report included the cost of treatment processes not currently employed. It also assumed the revenue needs based on the 1982-83 fiscal year. The attached staff report outlines the analysis of costs, makes ments, provides a revised table of revenue needs and recommends classes of users. the necessary adjust- rates for the various EXHIBITS 1. 2. 3. Draft Financial Plan and Revenue Program by Brown and Caldwell , 1979 (on file in the Public Works Administrator's office) Staff report from Public Works Administrator dated September 17, 1979 Monthly Sewer Use Charges for Local Sewering Agencies. 4. Resolution No.5967. . RECOMMENDATION If Council concurs with staff recommendation, adopt Resolution No. b9'7setting new sewer service fees. AGENDA BILL NO. 6018 Page 2 Counci 1 Action: 10-2-79 Council adopted Resolution 5957, setting sewer service charges to be effective December 1, 1979. TO: MEMORANDUM City Manager FROM: Public Works Administrator DATE: September 17, 1979 SUBJECT: SEWER SERVICE FEES Section 13.12.020 of the Carlsbad Municipal Code provides that all persons served by the City sewer system shall pay a sewer service charge, which charge shall be set by resolution of the City Council. Resolution 2025, adopted by the Council on August 15, 1972, set the basic rate at $2.00 per dwelling unit with varying charges for a number of commercial and indus- trial uses. Rates have not been changed since 1972. Federal regulations, which are applicable to us as an agency accepting Clean Water Grant funds, require the preparation of an updated financial plan and revenue pro- gram. eral regulations. Copies of the draft, labeled "Financial Plan and Revenue Pro- gram - Phase I11 Enlargement and Upgrading of Encina Water Pollution Control Fa- cilities," and dated August 10, 1979, have been furnished to each of the Council members. Brown and Caldwell have prepared a draft report in conformance with the Fed- The Brown and Caldwell report goes into great detail in establishing the various elements of cost associated with the collection and treatment of wastewater. These elements are assembled in such a manner as to allow the determination of local (Sanitation Division) costs and regional (Encina) costs. are further subdivided into the portions attributable to residential, commercial and industrial sources. water throughout the plant; hence some of the costs relate to the volume of flow. The Encina treatment processes, when modification to a secondary facility is com- plete, also include the removal of suspended solids and of biochemical oxygen demand (B.O.D.); therefore the balance of the cost of operation can be attributed to these processes. The operations of the local system do not involve treatment; there- fore all of the local costs are attributable to volume of flow. Appendix "A" sum- marizes the procedures used by Brown and Caldwell in their report. Tables from the Brown and Caldwell report will be included, as necessary, to help the reader under- stand Brown and Caldwell's techniques. This report will refer to certain of those tab1 es. These two main groupings The operations at Encina include the transportation of waste- The balance of this report will use the Brown and Caldwell figures in a modified form. Local costs will be used, as presented, since they relate to flow only. Re- gional costs will be reduced by the percentage attributable to B.O.D. removal since no B.O.D. removal is taking place. Since the Brown and Caldwell figures are pro- jected into the 1982-83 fiscal year, I will use a reduced figure which is the aver- age annual demand to reflect the present budget figures and their yearly inflation- ary growth to arrive at the Brown and Caldwell figures. Using the adjusted cost figures, I will then calculate recommended rates so that residential, commercial and industrial categories will return, in revenue, their cost of system operation. REVENUE NEEDS Primary reference for this calculation will be Table 10-14 from the Brown and Cald- well report. Local Costs Since all local costs are flow related, they will be used here without modification. Local costs are projected to be $301,700. from residential , $62,800 from commercial and $29,100 from industrial. These fig- ures rfelect an annual inflation rate of 9.2% over the current Sanitation budget of $231,714. This figure is comprised of $209,800 Regional Costs Since the figures under the column headed EJPRSA in Table 10-14 include B.O.D. re- moval costs, all amounts, except monitoring, will be reduced by 55.12%. This reduc- tion subtracts the costs of B.O.D. removal. Monitoring, since it is flow related, will be used without modification and will be spread to all three groupings. Re- gional costs, as modified, are projected to be $395,688. This figure is comprised of $237,413 from residential , $102,937 from commercial and $55,338 from industrial. These figures reflect an annual inflation rate of 25.1% over the current Water Pol- lution budget of $202,110. Total Annual Costs The total annual cost of operating the system in fiscal year 1982-83 is $697,388 with $447,213 being attributed to residential , $165,737 attributable to commercial and $84,438 being attributable to industrial. Annual Prorating As previously stated, the annual local figure of $301,700 represents an average an- nual inflation factor of 9.2% while the regional figure of $395,688 represents an average annual inflation factor of 25.1%. If we were to determine an average an- nual revenue need for the four fiscal years 1979-80 to 1982-83, it would be $265,697 for local needs and $291,722 for regional needs or a total of $557,419. This figure is 80% of the $697,388 projected by Brown and Caldwell. If we esta- lished rates for a four-year period based on an annual revenue of $557,419 then, during the first two years of operation, we would build a surplus that would be used during the third and fourth years. The annual revenue needs then would be $357,770 from residential, $132,590 from commercial and $67,550 from industrial for a total average annual income of $557,910. This is the recommended course of action. COST SPREAD Resi denti a1 Average annual income from the residential element of the customer base is $357,770. Table 10-14 from the Brown and Caldwell report identifies 9,292 EDUs as the number of bill ing units in the residential category. projections prepared by Brown and Caldwell to eliminate B.O.D. removal costs, to account for annual averaging from fiscal year 1979-80 to fiscal year 1982-83 and to account for the spread of monitoring, the revised residential portion of Table 10-14 would look as follows: Correcting the revenue requirement User Class I Annual Revenue Requirements 1 Billing Unit I Monthly User Charge Residential Local I EJPRSA I Total Descrip.lQuant. Local I EJPRSA ITotal I I I I 1 Si ngl e Mu1 tiple Total Commerci a1 Making similar modifications to the Brown and Caldwell figures for comnercial users as was made for residential users results in the following figures: 98,310 111,262 209,572 EDU 5,443 1.51 69,520 78,678 148,198 EDU 3,849 1.51 167,830 189,940 357,770 EDU 9,292 -- User C1 ass I Annual Re EJPRSA 1,208 2 , 966 37 30 , 648 2,087 ' 45,404 82,350 ~ Comnerc i a1 r Local I 6.18 3.08 6.72 1.39 1.70 Ba keri es. Mark et s Mortuaries Restaurants School s All Other Total 7.68 3.08 8.23 2.88 3.20 240 720 6 , 880 2,240 40,160 50,240 -- ilenue Requirements To tal 1,448 3 , 686 37 37 , 528 4,327 85,564 132,590 Billing Unit I Monthly User Charge Descri p. EDU EDU EDU EDU EDU 2,225 EDU I 2,786 Quant. 380 125 Local 1.33 1.50 -- 1.51 1.49 1.50 -- !Total It should be recognized that in preparing the basic Table 10-14, the staff of Brown and Caldwell made many approximations which result in variations of revenue needs. As an example, to show that the flows from a mortuary create no local revenue need makes as much sense as saying that the flow from any single connection creates no local revenue need. To compensate for this and to provide a uniform type of rate structure, I recommend a rate of $8.25 per EDU for bakeries, markets, mortuaries and restaurants and a rate of $3.25 per EDU for schools and all others. It should be noted that certain commercial uses create flows far in excess of their EDU count (1 aundromats , commercial 1 aundries , etc. ) . These uses should be charged a base rate of $3.25 per EDU and a charge of 324: per 100 cubic feet of water flow. This is based on the fact that their suspended solids count is in the approximate range of domestic sewage (180 mg/l). occur, special billing methods as developed for industrial uses may be needed. Should variations in flow characteristics Likewise, there are some uses which have been determined by previous Councils to contribute significantly less than normal flows. These uses are units in a hotel, motel, rooming house, boarding house or lodging house. Existing rates provide for each unit up to 10 to be charged 804: per month and those units in excess of 10 to be charged 606 per month. The logic behind these earlier decisions seems to be that since the rental units had no cooking facilities and no laundry facilities, were sometimes vacant and, when rented, were often just for overnight sleeping, the flow from each unit would be significantly less than normal. apply to those units with live-in managers since those units would contribute kitchen and laundry flows. The logic described above is supportable and it is my recommendation that the new rate structure applicable to units in motels, etc., be proportional to present rates. Units in ex- cess of 10 should be charged $1.00 per unit per month. Rental units with resi- dent managers should be charged $3.25 for the manager's unit, $1.30 per unit per month for the next 9 units and $1 .OO per unit per month for all units in excess of 10. This logic would not Units up to 10 should be charged $1.30 per unit per month. -3- Industrial Modified revenue requirements for the industrial category are listed in the table below. Information has been added to indicate the number of EDUs credited by the Finance Department to each listed user as well as information concerning average flow of wastewater in gallons per day (from Table 3-4) and in units (100 cubic feet) per month. User C1 ass I Annual Revenue Requirements I Billing Units Industri a1 Burroughs, Inc. Beckman Instr. Hughes Indus. Sargent Indus. Winslow Pac. Lancer Pac. Culligan S.W. To tal I Local 13,920 2,000 5,920 560 24 0 160 480 23,280 EJPRSA 16,777 18,928 7,157 704 2 74 195 235 44,270 Total IIDescrip.1 Quant.1 Descrip. I Quant. 30,697 20 , 928 13,077 1,264 51 4 35 5 71 5 67 , 550 I ' EDU EDU EDU EDU EDU EDU EDU EDU 39 16 47 20 19 19 3 163 G.P.D. G.P.D. G.P.D. G.P.D. G.P.D. G.P.D. G.P.D. G.P.D. 194 , 600 27,800 83,100 8 , 200 3 , 200 2,000 7 , 300 326 , 200 Descri p. 100 c.f./mo. 100 c.f./mo. 100 c.f./mo. 100 c.f./mo. 100 c.f./mo. 100 c.f./mo. 100 c.f./mo. 100 c.f./mo. Analysis of wastewater characteristic (reference Table 3-4) show that the suspended solids of industrial wastewater are fairly uniform with one notable exception. man Instruments contributes wastewater with higher than normal concentrations of B.O.D. and suspended solids. At this time, Encina does not remove any significant amounts of B.O.D. We do treat for suspended solids; therefore, this higher than normal concentration of suspended solids requires additional effort resulting in higher treatment costs. While Beckman Instruments contributes only 14.3% of the flow from Burroughs (reference Table 3-4) , their revenue requirements (reference above chart) are 68.2% of those of Burroughs. structure should be able to equitably assess charges based on actual user demand. Beck- It becomes obvious that our rate Cost' recovery analysis shows that a flat rate charge of $3.25 per EDU and a flow rate charge of 326 per 100 cubic feet through the water meter will recover industrial costs except in the case of Beckman Instruments. In those cases where the waste- water characteristics (for the time being limited to suspended solids) exceeds the service area averages (in this case 204 mg/l), the flow rate charges per 100 cubic feet through the water meter should be determined by using the formula ([-l80 + SS] + 360) x $0.32. SS refers to the average reading, as determined by laboratory tests, for the month being billed. The above rates are based on the assumption that all water flowing through the meter ends up in the sewer. In those cases where landscaping water flows through the same meter and where it is impractical to meter actual flows to the sewer and where it can be established that substantial portions of the flow through the water meter are used for landscaping purposes then a rate base of 296/100 cubic feet may be used. SUMMARY Quan t . 7,913 1,130 3 , 379 333 130 81 297 13,265 Staff has reviewed the revenue requirements for the next four years (until comple- tion of Encina Phase 111) using a recent finance and revenue report prepared by Brown and Caldwell. Adjustments to the Brown and Caldwell recommendations were made to compensate for current level of treatment at Encina and to compensate for inflation and increased levels of service anticipated in the near future. this information base, a revised rate schedule is recommended. The revised sched- ule insures that residential, comercial and industrial customers generate revenues Using -4 - commensurate with the cost of providing collection and treatment services. recommended rates are as outlined in the following table. The ~~ User C1 ass I Billi Flat Rate Residential Single Family Multiple & Mobile Each Rental Unit of a Hotel , Motel , Rooming, Lodging or Boarding House - Ten Units or Less More Than 10 Units EDU EDU Unit Unit Commerc i a 1 Bakeries Markets with Disposals Mortuaries Restaurants Schools All Others EDU EDU EDU EDU EDU EDU Industria 1 I EDU 3 Unit Consump ti on Rate N/A N/A N/A N/A N/A N/A N/A N/A N/A **lo0 C.F, 100 C.F, Monthly User Charge Dollars Per Billin Unit I $3.25 3.25 1.30 1 .oo 8.25 8.25 8.25 8.25 3.25 3.25 3.25 ***32$ x mu1 ti p1 i r **Self-service laundries, laundromats, car washes, wash racks and laundries. **Multiplier derived by using formula ([180 + SS] i 360) when average monthly sus- pended solids reading exceeds service area average. not exceed average, mu1 tip1 ier equals 1. When suspended solids do -c Ronald A. Beckman, P.E. Pub1 ic Works Administrator RAB : VEB -5- APPENDIX BASIC DATA In compliance with guidelines prepared by the Environmental Protection Agency, Brown and Caldwell took all of the raw data for each sewerage agency and segregated it in- to the three basic groupings: three basic groups was further subdivided as necessary to establish coherent group- ings or, in the case of industrial , individual firms that were classified as major users. Once this identification process was completed, the flows from each subgroup were analyzed to determine the three major cost related factors: gen demand (B.O.D.) and suspended solids (S.S.). listed on Table 3-4. The table identifies each of the major groups and subgroups with the wastewater characteristics and capacity impacts of each. residential, commercial and industrial. Each of these flow, biochemical oxy- The results of this analysis are FACILITY COST ALLOCATION Brown and Caldwell analyzed each and every component of the Encina Water Pollution Control Faci 1 i ty (Enci na) to determi ne its total cost, annual capi tal recovery costs, whether it was part of the upgrading or the expansion and what percentage of its function was dedicated to handling flow or B.O.D. or S.S. This information is sum- marized on Table 5-2 (two pages). COST ALLOCATION In order to fairly determine impacts on cost, Brown and Caldwell analyzed the raw data and determined that the most equitable way was on the basis of annual total demand. The annual total distribution is fairly straightforward. The peak month demands were added to offset the cost of reserving treatment capability for inter- mittent high demands. all times, we must maintain the ability to handle a wide range of accepted flow characteristics. The cost of maintaining this ability should be apportioned to those groups or individuals that create the need, hence, peak month characteristics. This information is sumnarized in Table 5-3. The table has been modified to indi- cate which flow characteristic the cost is charged against, the total of each group's costs and its percentage of the total cost. Since we are charged with meeting our discharge standards at ANNUAL REVENUE REQUIREMENTS Using information previously generated, Brown and Caldwell allocates to each of the residential, commercial and industrial subgroups, its share of the total cost of operating the treatment plant and joint system (EJPRSA) and the cost of operating the City of Carlsbad sewerage system (local). These revenue requirements and the recommended rates per EDU for each subgroup are listed in Table 10-14. case, Brown and Caldwell recommends a flat rate except for industrial uses. Charges to industrial users are recommended to be based on six elements, each one separately determined for each user. The first three elements in the fee determination are based on peak month demand (flow, B.O.D. and S.S.) in the calendar year preceding the current year. The last three elements are to be determined based on actual flow. This latter calculation will necessitate formal monthly reports, including laboratory tests, to determine the necessary information. It should be remembered that the information on Table 10-14 is based on the cost of operating a secondary treatment plant with operational costs as they are projected to be in fiscal year 1982-83. In each t- a a f r: w c U c 4 c TABLE 3-4' r c TABLE 5-2 I1 I Ill 11,111 w rnm maw wn I1 11 I II Ill I1 I roe 4 N I I1 I Ill I1 111 I1 I Ill I1 Ill I1 I I11 I1 I11 I-w NO r- wv 4- *N r- I1 ooo no o I I1 Ill cy44 N-I wn -N .P mn 4 4 N 4 0 - I1 r(mm ow n I I1 Ill (D $- om In 000 00 000 .PN r- -PI- ON 9.Nn 0mIn om om om omln omm om 00 c GO -44 O4 ON T4 944 w'" -4 9.N m ?N TABLE 5-2 ~ w nwm wm WO~I-o 111 Ill llm d -4emw N rnvr 9.m mworlo Ill 111 11-3 em(? - - . - 2,000 - - - 56,700 56,700 - 1,300 2,500 2,500 - 1,003 1,000 1,000 - 2,000 ll3.400 6,300 3,000 800 28,100 - - - - - c - - - - - - 408,000 - - - - - - 3,200 24,600 U7,OOO - - - - - - - - - 8,600 - 14,100 1,200 200 9,600 1,200 515,400 I201,600 24,500 - -~ 14.8 4.7 - 17.4 6.3 0.3 453,900 140,800 I 515,400 201,600 24,500 TABLE 5-3 Table 5-3. FeaiwA Cost iulocation to -merit pararoeters for N 1982/83 I I I I 1 5,800 54,600 0 8,900 3,500 1,600 3,100 15,000 29,700 0 0 2,iOO 4,800 1,000 1,900 ~ * TotaL capital 72,600 20,100 39,500 ?e?xent diLocated - 27.5 54.3 56,700 10,100 21,700 766,400 ao,aoo 416,100 425,800 U7,lOO 231,200 -u- 1,248,909 I 338,000 t 669,000 8, 500 2,600 9,600 3.800 400 u9,500 - - - - 77,500 - - - - u5,soo 2,6w 1 9,600 j 3,aoo I Lao 483,200 l32,900 262,400 1, 16,900 61.500 1 33,400 544,700 w,aoo 295,aoo subtotal, ch5ia I- I U,600 I 70,000 I 70,000 E3.600 642,000 0 180,000 U,300 5,400 8,600 14,100 18,300 141,400 U7,OOO - - - - - - 900 6,700 - 90,000 2,400 - - 2,700 2l,OOO 6,900. 53,500 I l,U2,100 Total operaticns and makrtenance 2,970,300 519.500 440,700 140,800 -. ~ eercmt allccated TotaL 0.2 5,400 *e? allocated I - I 17.7 I 38.2 14.9 I 4.6 1 17.0 I 6.6 1 0.8 0.2 7-- TABLE 10-14 &;le family Cnmercial ~ Harkets Bakeries RStaUKants Scm1s All otiaer Lrr3ustria.l Burroughs, Inc. Bedam -r~ts Hughes Xndustdes Sargent Ildustrhs Winslaw PacifLc uncer Pzcific culliqan soft water .mI%itmng Totdl. *Siriential Single family tUtinle ani 1122,900 1 303,900 I 426,800 1 ElXl '1 5,443 1 1.38 1' 4.65 1 6.53 86,900 214,800 301,700 EDU I 3~49 f 1.88 4.63 1 6.53 300 3,300 3,600 W 15 1.67 18.33 20.00 900 8,100 9,000 EDU 40 1.88 16.88 18.7s - 100 100 ZEu 1 - 8 -33 8 -33 a, 600 93,700 92,300 Em 380 1.89 18.35 20.24 2,800 5,700 8,500 W 125 1.87 3.ao 5.67 50,200 124,000 174,200 EDU 2,225 1.88 4.64 6.52 17,400 42,900 60,300 C C C C C 2,500 48,400 SO, 900 C C C C i: 7,400 18,300 25,700 C C C C C 700 1,800 2,500 C C C C C 300 700 1,000 C C C C C 200 500 700 C C C C 600 - 7,700 7,700 - - - - 600 1,200 C C C C IE 301,700 864,500 1,166,200 - - - - - MEMORANDUM TO : FROM: DATE : SUBJECT: City Manager City Engineer September 25, MONTHLY SEWER AGENCIES 1979 USE CHARGES FOR LOCAL SEWERING The folloc.ing is a compil tion of the monthly user charges imposed by local agencies: Buena Sanitation District Encinitas Sanitary District Monthly Monthly Residenti a1 User Charge User Charge Commercial /Indus tri a1 $ 3.00 $3.00 per EDU 3.00 45&;/100 c.f. Leucadia County Water District 3.00 22 1/2fj/lOO c.f. City of Oceanside 2.40 4.8% of water bill San Marcos County Water District 3.50 $1.75 per EDU Vista Sanitation District 7.50 $7.50 per EDU City of Carlsbad 2.00 12$/100 c.f. LE:mmt .. , 4 5 6 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 RESOLUTIOI"! NO. 5957 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, SETTING SEWER SERVICE CHARGES BE IT RESOLVED by the City Council of the City of Carlsbad as follows: 1. This resolution sets sewer service charges for all persons whose premises in the City are served by a connection with the City sewer system whereby sewage or other waste material is disposed of through such systems, effective from December 1, 1979, shall pay a sewer service charge per equiva- lent dwelling unit as CLASSIFICATION: A. Residential (1) For each sing fol 1 ows : MONTHLY CHARGE : e-family we (2) For each unit of a duplex, ng fl at, apartment, court, multiple dwelling, mobile home com- plex or trailer court 8. Commercial & Industrial (1) For each unit of a motel, hotel, rooming, .lodging or boarding house, ten units or less Each additional unit over ten Each unit with kitchen facilities (2) Bakeri es , markets wi th di sposal s, mortuaries and restaurants (3) Schools and all other commercial uses not listed above (4) Car washes, wash racks, laundries and other enterprises where water is the primary com- modity to carry on said business and said water is discharged into the sanitary sewer system shall be charged $3.25 per equiva- lent dwelling unit plus the sum of thirty- two cents ($0.32) per each one hundred cubic feet of all water used. (5) *Each enterprise where water is the primary commodity to carry on said business, said water characteristics exceed the sewer ser- vice area average for suspended solids (S.S.), shall be charged the sum of thirty-two cents ($0.32) times a multiplier per each one hundred cubic feet. The multiplier shall be (5180 + S.S.] c 360) where S.S. is the average monthly suspended solids reading from the enterprise.. (6) For each unit of an office of commercial building or any establishment having facilities for trailers, campers or boats. $3.25 $3.25 $1.30 $1 .oo $3.25 $8.25 $3.25 I $3.25 per EDU + $0.32 per each 100 cubic feet $0.32 x ([180 + S.S.] + 360) $3.25 1 2 3 4 5 6 7 8 9 10 31 12 13 14 15 16 17 18 19 20 21 '22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad held the 2nd day of October , 1979, by th,e following vote, to wit: AYES : Councilmen Packard, Anear, Lewis and NOES: None Councilwoman Casler ABSENT : Co'uncilman Skotnicki /.6?E22*dkA>@L:/ RONALD C. PACKARD, MAYOR ATTEST: (SEAL) -2-