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HomeMy WebLinkAbout2008-12-02; City Council; 19657; Proposed Rate Increases for Water & WastwaterCITY OF CARLSBAD AND CARLSBAD MUNICIPAL WATER DISTRICT - AGENDA BILL AB# 19,657 MTG. 12/02/08 PROPOSED RATE INCREASES FOR WATER AND WASTEWATER RATES DEPT. HEAD CITY ATTY. CITY MGR.DEPT. FIN RECOMMENDED ACTION: Adopt Resolutions No. 1346 and No. 2008-321 approving increases for water and wastewater rates for properties within the Carlsbad Municipal Water District and the City of Carlsbad. ITEM EXPLANATION: The California Supreme Court has ruled that local governments must comply with the provisions of Proposition 218 when increasing water rates and the City Attorney has advised that this ruling will likely apply to proposed increases in wastewater rates as well. At the joint meetings on June 24, 2008, the Board of Directors of the Carlsbad Municipal Water District and the City Council adopted Resolutions No. 1324 and No. 2008-194 setting a majority protest hearing for September 9, 2008. The public hearing was held on September 9, 2008, and as of that date, three protests had been received. The Board of Directors and the City Council determined that a majority protest did not exist, however, they chose not to adopt the proposed rates at that time, and asked staff to return at a later date to allow for additional time to review the proposed increases. The proposed rate increases have not changed, and staff is requesting adoption of those rates at this time. Water Rates: Several factors are contributing to the proposed water rate of $2.12 per unit, a 20% increase over the current rate of $1.76 per unit. The Fiscal Year 2008-09 budget is estimated at $3.4 million higher than Fiscal Year 2007-08, due to several factors: • The largest increase (53% of the $3.4 million) is in the cost of purchased water from the San Diego County Water Authority, which has risen 12.4% from Fiscal Year 2007-08 to Fiscal Year 2008-09. An additional 10% of the increase represents the cost of additional quantities of water purchases related to growth within the City. DEPARTMENT CONTACT: Helga Stover, 760-602-2429, hstov@ci.carlsbad.ca.us FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED ^ CONTINUED TO DATE SPECIFIC D DENIED D CONTINUED TO DATE UNKNOWN D CONTINUED D RETURNED TO STAFF D WITHDRAWN D OTHER - SEE MINUTES O AMENDED D \ Page 2 • Transfers to the Capital Replacement fund represent 28% of the estimated budgetary increase. Several large water infrastructure assets constructed by the City and by developers in conjunction with new residential and commercial projects were added to the system. The annual replacement transfers are based on the estimated life and original cost of these assets, which have risen significantly in recent years. Recent additions to the system include the Carlsbad Water Recycling Facility and numerous waterlines and ancillary facilities within the Bressi Ranch, Villages of La Costa, La Costa Greens and Robertson Ranch projects. • The actual operating cost increases make up 8% of the $3.4 million, and include payments to Encina for operating the Carlsbad Water Recycling Facility, permit fees, interdepartmental charges, and maintenance and repair costs. Personnel costs are not expected to increase over the prior fiscal year due to a restructuring of staff. • Debt payments for the State Loan acquired to construct the Carlsbad Water Recycling Facility comprise the remaining 1% increase. In addition to funding these increased costs, the Operating reserve levels were depleted over the last few years to amounts below the recommended 40% and need to be brought back up to recommended levels. The proposed increase of 20% is expected to provide an additional $4.6 million in revenue per year. The following chart shows the current and proposed rates for an average single family residence as compared with other agencies within the region; Carlsbad would still have the lowest rates. Agency Monthly Water Rate Comparison Fallbrook Escondido (proposed) Del Mar Olivenhain Average Otay Water District Vista Irrigation Santa Fe Vallecitos Carlsbad - Current J. $40 $45 $50 $55 $60 $65 $70 $75 Page 3 Wastewater Rates: The proposed rate for the wastewater services is an increase of 9%, or a monthly residential fee increase from $16.20 to $17.65. This increase will fund on- going maintenance needs, increases in charges from the Encina Wastewater Authority, and the cost of legislated mandates which were implemented in Fiscal Year 2007-08. Ongoing operating costs for wastewater services increased $820,000 over the Fiscal Year 2007-08 budget. Of this increase, $625,000 (76%) is in personnel costs. In the second half of Fiscal Year 2007-08 additional staff was hired to perform additional maintenance activities as required by the state mandated Wastewater Discharge Requirements. In addition, the Encina Wastewater services comprise $120,000 of the overall increase, and capital replacement transfers are estimated at $180,000 over the prior fiscal year. These increases were offset by $105,000 in reductions to interdepartmental and other miscellaneous charges. The proposed increase of 9% is expected to provide an additional $760,000 in revenue per year. The following chart shows the current and proposed rates for an average single family residence as compared with other agencies within the region; Carlsbad would still have the lowest rates. Agency Monthly Wastewater Rate Comparison (*) = Encina Member Agencies Del Mar Row ay Oceans ide B Cajon (*) City of Vista/Buena Sanitation (*) Encinitas La Mesa Average Escondido Chuia Vista Lemon Grove Imperial Beach (*) Vallecitos Water District (2009) (*) Leucadia Wastewater (2009) (*) Carlsbad - Proposed (*) Carlsbad - Current $0 $10 $20 $30 $40 $50 $60 $70 $80 Page 4 FISCAL IMPACT: The proposed rate increases, if adopted, will be effective January 1, 2009. Carlsbad would still have the lowest water and wastewater rates in the region when compared to other agencies. ENVIRONMENTAL IMPACT: The California Environmental Quality Act (CEQA) does not apply to the establishment or modification of rate for the purpose of meeting operating expenses (CEQA Guidelines Regulation 15273). EXHIBITS: 1. Resolution No. 1346 of the Board of Directors of the Carlsbad Municipal Water District approving water rate increases. 2. Resolution No. 2008-321 of the City Council of the City of Carlsbad approving wastewater rate increases. 3. Notice of September 9, 2008 Public Hearing. Exhibit 1 1 RESOLUTION NO. 1346 2 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT (CMWD), 3 TO APPROVE INCREASES IN WATER RATES. 4 5 WHEREAS, the California Supreme Court has ruled that local governments must 6 comply with the provisions of Proposition 218 when increasing water rates; and 7 WHEREAS, the Carlsbad Municipal Water District is proposing an increase in 8 water rates; and WHEREAS, on June 24, 2008, The Board approved Resolution No. 1324 setting 10 a public hearing for September 9, 2008; and 11 WHEREAS a public hearing was held on September 9, 2008 and there was not a 12 majority protest. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the 15 Carlsbad Municipal Water District, as follows: 16 1. That the above recitations are true and correct. 17 2. That the Board of Directors of the Carlsbad Municipal Water District 18 approves the increases in water rates, outlined in the Water Rates Tables as attached 19 as Exhibit 3, effective January 1, 2009. 20 " 21 22 23 24 25 26 27 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Municipal Water District and the City Council of the City of Carlsbad on the 2nd day of December , 2008, by the following vote to wit: AYES:B6ard Members Lewis, Packard and Nygaard. NOES: Board Member Hall. ABSENT: Board Member Kulchin. lAUDBA LEWIS,President ATTEST: Exhibit 2 1 RESOLUTION NO. 2008-321 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, TO APPROVE INCREASES IN 3 WASTEWATER RATES. 4 5 WHEREAS, the California Supreme Court has ruled that local governments must 6 comply with the provisions of Proposition 218 when increasing water rates; and 7 WHEREAS, the City Attorney has advised that this ruling will apply to increases in wastewater rates; and 9 WHEREAS, the City of Carlsbad is proposing an increase in wastewater rates; 10 and 11 WHEREAS, on June 24, 2008, City Council approved Resolution No. 2008-194 12 setting a public hearing for September 9, 2008; and WHEREAS a public hearing was held on September 9, 2008 and there was not a majority protest. 16 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of 17 Carlsbad, California, as follows: 1 Q 1. That the above recitations are true and correct. 19 2. That the City Council of the City of Carlsbad approves the increases in 20 wastewater rates as outlined in the Wastewater (Sewer) Rates Table as attached as 21 Exhibit 3, effective January 1, 2009.22 23 " 24 // 25 // 26 // 27 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council and the Municipal Water District of the City of Carlsbad on the 2nd day of December , 2008, by the following vote to wit: AYES: Council Members Lewis, Packard and Nygaard. NOES: Council Member Hall. ABSENT: Council Member Kulchin. ATTEST: 4-LORRAINE M. WOOD, City Clerk ( \ j$EAL) (J \J ^ Exhibit 3 Notice of Public Hearing City of Carlsbad and Carlsbad Municipal Water District Dear City of Carlsbad and Carlsbad Municipal Water District Utility Customer: NOTICE IS HEREBY GIVEN that the City Council and Board of Directors will hold a public hearing regarding proposed increases for water and sewer fees for properties within the City of Carlsbad and Carlsbad Municipal Water District. This hearing is to comply with a ruling of the California Supreme Court. The public hearing will be held on the 9th of September at 6:00 p.m., in the Council Chambers, City Hall, 1200 Carlsbad Village Drive, Carlsbad, California, at which time the Council will hear all persons interested in the matter. Any person interested in objecting to the amount of the proposed increases may file a signed written protest with the City Clerk, at or before the hour fixed for the hearing. The written protest must contain the address of service, the rate change being protested, and the ground or grounds of protest. The protestor may appear at the hearing and be heard on the matter. Even with these proposed increases, the City's rates continue to be among the lowest in the region. Rates are being increased due to rising operating costs, unfunded State mandates, and the increased cost of water purchased from the San Diego County Water Authority. Age Falii>rook San Diego Escondido (proposed) Ramona Del Mar Rainbow Olivenhain Sweetwater Authoritv Average Poway ( l..'1.'O9) otav Water District San Diegulto Vista Irrigation Valley Center Santa Fe Oceanside Vaiiecitos Carlsuad - Proposed Carlsbad - Current ncy Monthly Water Rate Comparison '-li.i.iirAi.^.I.i; ""•*, 1 . •:*•• . "jv-'i C'^A'^s^ %;•,-*$' 7>v ' - '•". , ,- -j,. •-- ' . " | ,, ,>^«tr«>, }^*g~Zvg&t#&liA-i — »£ v " ' •>- - w:^. -' ' 'J- " •", ~ | ' - *v i «"^f>f fjitr1* .* s^™, ,c^ • • ,- -,.--. \ ' " ~* - 1 JiLiJiSi.'^^''fo.z:..^.: i_..: ......: . I ''*'->' -J ^' -v i" J> " v , . - ' • '..' i" -« : ;, . ... . -,-'\ , / :-t -<,?•• • '«. ^; - 'E^ V.'"-1 •>/! a> J ' V* *H •!• •. '.;*' 1 1 .,. ,-^KI^ .^ -, • -^J^ .0 ..'.". m ^ ."*p""*"*p""*p'l i 1 1 1 "]( /jj J ri $40 $50 $60 $70 Exhibit 3 Agency Monthly Wastewater Rate Comparison (') = Encina Member Agencies Del Mar Poway Oceanside El Cajon (*} City of Vtsta/Buena Sanitation (*) Encinitas La Mesa Average Escondido Chula Vista Lemon Grove Imperial Beach (*) Vallecitos Water District (2009) ("> Leucadia Wastewater (2009) (") Carlsbad - Proposed (*) Carlsbad - Current $0 S10 S20 S30 S40 S50 $6O S70 S80 Below is a summary of the proposed increases that are the subject of this hearing: Monthly water purchase fee increase is 20%: • The standard rate increases from $1.76 to $2.12 • The conservation rate increases from $1.59 to $1.91. • The recycled water rate increases from $1.68 to $2.01. • The agricultural water rate increases from $1.45 to $1.81. Both residential and commercial monthly water service fees vary depending on meter size. • The increase for a standard 5/8" meter is from $12.12 to $14.54. Both residential and commercial monthly sewer service fee increase is 9%: • The residential fee increases from $16.20 to $17.65. • The commercial fee increased 9%. A detailed schedule of the water and sewer utility rates is attached. For questions about the public hearing process, please contact the Finance Department's Customer Service Dept. at(760)602-2403 Exhibits Commodity Rates - Proposed 2008-09 Meter Size 5/8" 3/4" 1" 1-1/2" 2" 3" 4" 6" 8" Current Conservation Rate 1 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 $1.59 Units/Mo, (or less) 7 10 16 30 45 79 123 228 336 20.00% Adjustment Conservation Rate 1 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 Units/Mo, (or less) 7 10 16 30 45 79 123 228 336 Standard (Base) Rate Recycled Water Rate ^ Agricultural Water Rate J $1.76 $1.68 $1.45 $2.12 $2.01 $1.81 1 Conservation Rate is 90 percent of Standard (Base) Rate.2 Recycled Water Rate is 95 percent of Standard (Base) Rate. 3 Agricultural Water Rate is $0.31 off the Standard (Base) Rate (per the MWD "Interim Agricultural Water Program"). Delivery Charge Current Meter size Fee 5/8" 3/4" 1.0" 1.5" 2.0" 3.0" 4.0" 6.0" 8.0" $ 12.12 14.85 20.36 35.12 50.60 90.50 146.68 284.23 449.87 Proposed Fee 14.54 17.87 24.50 42.26 60.88 108.89 176.49 341.99 541.28 Wastewater (Sewer) Rates - Proposed 2008-2009 Group I Residential Single Family Multi-Family Mobile Home1 Group II Commercial * Group III Commercial ^ Group IV Commercial ^ Group V Institutional Schools per ADA3 Elementary * Junior* High* Boarding * Group VI Large Volume Beckman Micro Ops Culligan Current Unit Cost ($/hcf of water) $2.30 $2.30 $1.91 $2.51 $3.96 $0.25 $0.49 $0.73 $3.64 (based on volume and wastewater strengths) $4.78 $1 .36 Uniform Rate $16.20 — — 9.0% Adjustment Unit Cost ($/hcf of water) $2.51 $2.51 $2.08 $2.73 $4.31 $0.27 $0.53 $0.80 $3.97 (based on volume and wastewater strengths) $5.21 $1.48 Uniform Rate $17.65 PROOF OF PUBLICATION (2010 & 2011 C.C.P.) This space is for the County Clerk's Filing Stamp STATE OF CALIFORNIA County of San Diego I am a citizen of the United States and a resident of the County aforesaid: I am over the age of eighteen years and not a party to or interested in the above- entitled matter. I am the principal clerk of the printer of North County Times Formerly known as the Blade-Citizen and The Times- Advocate and which newspapers have been adjudicated newspapers of general circulation by the Superior Court of the County of San Diego, State of California, for the City of Oceanside and the City of Escondido, Court Decree number 171349, for the County of San Diego, that the notice of which the annexed is a printed copy (set in type not smaller than nonpariel), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit: Proof of Publication of November 30th, 2008 I certify (or declare) under penalty of perjury that the foregoing is true and correct. Dated at OCEANSIDE, California This 01st, day of December,ro Q Jane Allshouse NORTH COUNTY TIMES Legal Advertising Notice of Public Hearing City of Carlsbad and Carlsbad Municipal Water District Utility Customers Dear City of Carlsbad and Carlsbad Municipal Water District Utility Customer: NOTICE IS HEREBY GIVEN that the City Council and Board of Directors will hold a public hearing regarding proposed increases for water and sewer fees for properties within the City of Carlsbad and Carlsbad Municipal Water District. This hearing is to comply with a ruling of the California Supreme Court. The public hearing will be held on the 2nd of December at 6:00 p.m., in the Council Chambers, City Hall, 1200 Carlsbad Village Drive, Carlsbad, California, at which time the Council will hear all persons interested in the matter. Any person interested in objecting to the amount of the proposed increases may file a signed written protest with the City Clerk, at or before the hour fixed for the hearing. The written protest must contain the address of service, the rate change being protested, and the ground or grounds of protest. The protestor may appear at the hearing and be heard on the matter. Even with these proposed increases, the City's rates continue to be among the lowest in the region. Rates are being increased due to rising operating costs, unfunded State mandates, and the increased cost of water purchased from the San Diego County Water Authority. Ager Fat! crook San Dtecjo EscorKlido (proposed) Rarrord Del Mar 1 Rainbow J Gtiveohatn Swe«-twater Authority Poway (1/1^39) Otay Water Distnet San Dteguito vtsla irrigation valley Cenief Oceans de vallec lot: Canst>aa •- F-'ropo^ti Carlsbad - Cu*tf="« icy Monthly Water Rat« Comparison IK ,^.J.._A^............ rfJ.^jT-.^^--^^^^^^^^^.fe^^4i'.v;.^'.i R3-nn^,,m^T^^s^^E» Bfr 1*8** t.i ip — —— — i' *-ftFf ba£issfias& — j..:..^...?..^!^,, .b^iAflSj •rd*Js/L"^> *¥. * -^ ./. •' . tsV. ^JsU"-1" '^V^py^ i\ " " ^1 J 1 I I $4O $5O $6O $7O Agency Monthly Wastewater Rate Comparison (") = Encina Member Agencies Dei Mar Poway Oceanside Ef Cajon (*) City of Vtsta/Suena Sanita^on (*) Enctnitas La Mesa Average Escondido Chufa Vtst J Lemon Grove Impeoal Beach (*) Vallecitos Water District (2009) <") Leucadsa Wastewater (2009) {*) Carlsbad - Proposed H|£ftj Monthly water purchase fee increase is 20%: • The standard rate increases from $1.76 to $2.12 • The conservation rate increases from $1.59 to $1.91. • The recycled water rate increases from $1.68 to $2.01. • The agricultural water rate increases from $1.45 to $1.81. Both residential and commercial monthly water service fees vary depei • The increase for a standard 5/8" meter is from $12.12 to $14.54. Both residential and commercial monthly sewer service fee increase is 9%: • The residential fee increases from $16.20 to $17.65. • The commercial fee increased 9%. A detailed schedule of the water and sewer utility rates is attached. Commodity Rates - Proposed 2008-09 BEST Meter Size 5/8" 3/4" 1" 1-1/2" 2" y 4" 6" I 8" Currant . Consarvatiori Rate ' $1.59 $1.59 $1.59 $1.59 $1.59 $1,59 $1.59 $1.59 $1.59 Standard (Base) Rate Recycled Water Rate * I Agricultural Water Rate * $1.76 $1.68 $1.45 Uniis/Mo. {or -• (Mttr.."-. . 7 10 16 30 45 79 123 228 336 •- ^, ,_ .-; • 2Bli^ -A«MimwiL< J"^ ;/oijwjMifpBfiiii1.: $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $1.91 $2.12 $2.01 $1.81 ^UiMlilortoMp- •: 7 10 16 30 45 79 123 228 336 •:, • . •. '.a?j' ,v »;..; 1 Conservation Rate is 90 percent of Standard (Base) Rate.3 Recycled Water Rate is 95 percent of Standard (Base) Rate.3 Agricultural Water Rate is $0.31 off the Standard (Base) Rate (per the MWD "Interim Agricultural Water Program"). Delivery Charge Meter size 5/8" 3/4" 1.0" 1.5" 2.0" 3.0" 4.0" 6.0" 8.0" Current Fee $ 12.12 14.85 20.36 35.12 50.60 90.50 146.68 284.23 449.87 .....flMf. 14.54 17.87 24.50 42.26 60.88 108.89 176.49 341.99 541.28 Wastewater (Sewer) Rates - Proposed 2008-2009 Group 1 Residential Single Family Multi-Family' Mobile Home1 Group II Commercial * Group III Commercial * Group IV Commercial ' Group V Institutional Schools per ADA3 Elementary * Junior * High* Boarding * Group VI Large Volume Beckman Micro OpsCulligan — Current * i •. Unit Cost ($/hcf of water) $2.30 $2.30 $1.91 $2.51 $3.96 $0.25 $0.49 $0.73 $3.64 (based on volume and wastewater strengths) $4.78 $1.36 Uniform Rate $16.20 — — --- 9r«% Adjustment ?', UnltCo* ..'... ..flMhcfol water) $2.51 $2.51 $2.08 $2.73 $4.31 $0.27 $0.53 $0.80 $3.97 (based on volume and wastewater strengths) $5.21 $1.48 Uniform Raw ; • .> ' ''i. •i $17.65 — — — --- For questions about the public hearing process, please contact the Finance Department's Customer Service Dept. at (760) 602-2403 Dear Mayor and City Council, OWE i CITY OF CARLSBAD CITY CLERK'S OFFICE 2236 Janis Way Carlsbad, CA 92008 11 September 2008 I am appalled by the misleading and incomplete mail flyer - Notice of Public Hearing for the Carlsbad Municipal Water District (CMWD) proposed rate increase. As result I have serious doubts about the information presented at 9 August 2008 City Council/CMWD joint meeting. A copy of the two-sided color flyer was enclosed in a monthly utility bill mailing attached. My comments are on the two-sided color flyer. 1. on the reverse side, rate increases are delineated under the subject of "Monthly water purchase fee increase is 20%". The actual proposed increase for the agriculture water rate is 24.83% which is well above the implied 20%. This is a misrepresentation. As a residential consumer this will indirectly probably affect me in an increase of local agricultural products. 2. on the reverse side, the bar-chart labeled "Agency Monthly Wastewater Rate Comparison" has utilizes bar of one of three colors. There is no explanation for the third color. A CMWD Financial staff member could not explain and stated that it must be an error. The slide of this chart was changed from the flyer's chart, however, the slide was presented so quickly and made noting the change(s) impossible. If the information was important enough to be mailed out, any changes should have been clearly explained. 3. on the front side, the bar-chart labeled "Agency Monthly Water Rate Comparison" is not supported with derivation information --1 had to call. This information should have been included. For Carlsbad, the rate is based on a delivery charge for a 5/8" meter plus 19 units (1 unit= 1 hundred-cubic-feet (hcf) =748 gallons). However not all cited agencies measure water usage in same way. I believe Escondido measures in 1,000 gallon units. There is no indication that the chart has been normalized for comparison purposes. One trusts accurate and complete proposal to be provided. It is unbelievable that any increase in funding is requested considering the above. I intend to be present at the City Council meeting schedule for 9/16/2008 and address my issue during open comment. Whether or not I attend, I request the above issue to be considered/ discussed by City Council prior to the approval of any rate increase. Dale Kubacki Carlton .Bentley & Penn / A CaKfornia General Partnership 4l Camino Real, Suite 105 (760) 439-7380 La Costa, CA 92009 060) 438-7385 Fax (858) 569-4387 * Please address all correspondence to the La Costa address. 1902 Wright Place, Suite 200 Carlsbad, CA 92008 Date: To': From: 8/14/08 Number of pages: 1 (Including Cover Sheet) Lorraine Wood City Clerk Carlsbad, CA AUG 1 8 2008 CITY OF CARLSBAD,. CITY CLERK'S OFFICE Dennis F. Penn a su L/v ^7/00") Message: I am protesting the increase in water rates from $1,76 to $2.12 because this represents greater than a 3% increase. The City of Carlsbad is not entitled to increase the water rates more than the cost of living which is 3%. The yearly rate should go from $1.76 to $1.81. EXPERTISE IN COMMERCIAL MEDIATION AND CRISIS FINANCIAL MANAGEMENT Please call us if you do not receive the proper number of pages Carlton • Bentley &JPenn 6965 El Camino Real, Suite 105 La Costa, CA 92009 SAN DIEGO CA 921 15 AUG 08PM 11 T August 6, 2008 City of Carlsbad Carlsbad Municipal Water District 1200 Carlsbad Village Drive Carlsbad, C A 920 18 RE: PROPOSED INCREASE OF WATER RATES Account # 05505300-09 Meter #0077353340 Council Members: I am protesting the proposed increase of my water rates. After purchasing my condo in September 2006 I made $15,000 worth of energy saving upgrades. According to my bills, my water usage has been 2 units with a cost of $27.42. Since February 2008, my water usage remains at 2 units with a cost of $31.50. Through the months of June, July and August 2008, 1 worked at the Four Seasons Resort and did not use any water for cooking, bathing, etc. (these were provided by the Four Seasons during my temporary employment) and my water bill continued to reflect usage of 2 units according to the City's records. A minimum standard was established. Even though I continue to conserve water and other energy sources you are now asking me to continue to pay more: Conservation Rate from $1.59 to $1.91 Delivery Charge from $12.12 to $14.54 Wastewater Rates from $16.20 to $17.65 Your proposal represents a $4.19 increase to me - an $8.27 increase since February 2008. I live on a fixed retirement income. It is quite difficult finding employment at my age to make life a little easier during these appalling economic times. I have already decreased my driving to two trips a week to the Senior Center and stay home instead of socializing with others. I have even changed my eating habits. Because of the large amount I had to use for energy saving upgrades in my home and the need to refinance my home due to the greed of Countrywide Home Loans, my funds are low. Everyone is raising their prices. We are all hurting. My monthly retirement check only stretches so far. I have done everything in my power to conserve energy and water. Carlsbad is a wealthy city. Is it really necessary to cause such hardship to the seniors living here? I love living here in Carlsbad and would like to stay. Please don't force me to move by continually raising your various fees. I need to be able to live not just exist. Please consider my request not to raise my water bill any higher than it is now. Sincerely, Mary Hill 6999 Carnation Drive Carlsbad, CA. 92011 Mary Hill 6999 Carnation Drive Carlsbad, CA. 92011 City of Carlsbad Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, CA 92018 •Agenda Item # I IAll Receive-. For the Infonnation of the: CITY COUNCIL Asst.CM_CA_^C_^: 2236 Janis Way Date 13-] ^Citv Manager ^ 'Carlsbad> CA 92008 I December 2008 RE: AB#19657 Water and Sewer Rate Increase -MWD Dear Mayor and City Council Members, On 2 December 2008, a proposal to approve the water and sewer rate increase is again being presented for approval. Again, I request that City Council disapprove AB# 19657 (as proposed) based on: 1. The proposed rate increases are outrageous is view of the current state of the economy. The proposed rates remain unchanged from those proposed at the September 9th 2008 hearing. It was my understanding that the MWD budget was to be re-evaluated for cost savings: however, that does not appear to have happened effectively. 2. The initial public flyer inserted with the utility prior to September 9th 2008 contained errors and discrepancies. And now the filed staff report to be considered on 2 December 2008 again appears incomplete and appears to contain several discrepancies. An incomplete or error prone proposal should not be approved or even considered. State of the Economy In my letter to City Council dated 28 August 2008,1 stated my objections to the large rate increases based on the state of the economy in August 2008. Unfortunately the state of the economy has not improved. Additionally, even though the staff report states reduction and restructuring have taken place, these actions are not reflected by an overall decrease in the proposed rate increase. Somehow newly found costs have absorbed cited cost saving actions. With the same rate increases being proposed, it appears that costs have just been re-shuffled Staff report The staff report: 1. states the cost of water from SDCWA has risen 12.4%; however, North County Times (dated June 21, 2008) will be only increasing its rate 11.9% 2. states the proposed water rate increase will provide $4.6 million; yet the budget is only estimated at $3.4 million. 3. only addresses the standard rate increase ($1.76 to $2.12); it does not address the revenue from the other water rate increases or from the water service increases. 4. states the 9% waste water, (sewer service) is expected to provide an additional $760,000, but ongoing operating cost increased $820,000. What is the source for the needed $60,000? Additionally, several questions remain. The staff report: 1. states 10% of the $3.4 million increase represents cost of additional water purchase related to growth. I though growth would increase revenue by water sold. How is this different from water purchased from SDCWA? 2. states the 40% Operating reserve need to be brought back up to 40%. Could not this reserve be incrementally funded over several years? 3. states Carlsbad would still have the lowest rates. How is that justification for an increase? Recently, North County Times reported that Oceanside was proposing an increase to make up losses from lower than expected water revenue (usage). In addressing the state of the economy it has been discussed that we need to control our spending and we need spending transparency. Sincerely, Dale K Utility Rate Utility Rate IncreasesIncreasesDecember 2, 2008December 2, 2008 Water & Wastewater RatesWater & Wastewater Rates¾¾June 24June 24thth¾¾Set public hearing for September 9Set public hearing for September 9¾¾September 9, 2008September 9, 2008¾¾Public HearingPublic Hearing¾¾No majority protestNo majority protest¾¾November 19thNovember 19th¾¾Proposed rate increases discussedProposed rate increases discussed¾¾9% increase in Wastewater rates9% increase in Wastewater rates¾¾20% increase in Water rates20% increase in Water rates¾¾Answered additional questionsAnswered additional questions¾¾December 2December 2rdrd¾¾New rates effective with New rates effective with January 2009January 2009utility billsutility bills Proposed Rate IncreasesProposed Rate IncreasesWhat will additional revenue pay for?What will additional revenue pay for?Water Water ––20% increase20% increaseWastewater Wastewater ––9% increase9% increase••Maintain status quoMaintain status quo••No additional staffNo additional staff••Balanced budgetBalanced budget••Positive cash balancePositive cash balance Water Enterprise ExpendituresWater Enterprise ExpendituresFY 08/09FY 08/09$34.4 Million$34.4 MillionReplacementTransfers14%CMWD Operations25%WaterPurchases55%DebtPayments6% Water Purchases - Increased Cost53%Water Purchases - Growth10%Replacement28%Debt1%CMWD8%IncreaseIncreasein Water Fund Costsin Water Fund CostsFY 07FY 07--08 to 0808 to 08--0909$3.4 Million$3.4 Million Replacement Cost ComponentReplacement Cost Component28% of the $3.4 million increase28% of the $3.4 million increaseWater Purchases - Increased Cost53%Water Purchases - Growth10%Replacement28%Debt1%CMWD8% TOTAL Enterprise InfrastructureTOTAL Enterprise InfrastructureInventory at Cost Inventory at Cost ––10 years10 years$0$100$200$300$4001999 2000 2001 2002 2003 2004 2005 2006 2007 2008Total Infrastructure - At CostWater and Wastewater(in millions) CMWD Cost ComponentCMWD Cost Component8% of the $3.4 million increase8% of the $3.4 million increaseWater Purchases - Increased Cost53%Water Purchases - Growth10%Replacement28%Debt1%CMWD8% 20082008--09 CMWD Increase 09 CMWD Increase 8%8%Personnel BenefitsPersonnel Benefits$ 36,762$ 36,762Permit FeesPermit Fees$ 90,000$ 90,000Encina ChargesEncina Charges$174,000$174,000M&OM&O$ 57,257$ 57,257ChargebacksChargebacks$136,064$136,064Settlements Settlements ( $201,125)( $201,125)Total IncreaseTotal Increase$292,958$292,958 Proposed Water Increase Proposed Water Increase ––20%20%CurrentCurrentProposedProposedBase RateBase Rate$12.12$12.12$14.54$14.54Variable/per unitVariable/per unit$1.76$1.76$2.12$2.12X estimated unitsX estimated units19191919(*)Variable per month(*)Variable per month$33.44$33.44$40.28$40.28Total fixed + variableTotal fixed + variable$45.56$45.56$54.82$54.82(*) Single Family(*) Single Family Historical Rates Historical Rates --WaterWater$25$30$35$40$45$50$55$60199819992000200120022003200420052006200720082009Monthly Water BillWith 3% Increase Operating Reserve Levels (in millions)Operating Reserve Levels (in millions)$0$2$4$6$8$10$12$14$16$182001 2002 2003 2004 2005 2006 2007 2008 2009WaterWater Target Wastewater EnterpriseWastewater Enterprise Wastewater Enterprise FundWastewater Enterprise FundEstimated Revenue $9.7 millionBudget $10.2 million31%1%Encina OperationsReplacement TransfersCity OperationsService ChargesInterest OtherOther Unfunded State MandateUnfunded State MandateWastewater Discharge Requirement (WDR)Wastewater Discharge Requirement (WDR)FY2007FY2007--08 Adopted Budget08 Adopted BudgetWDR WDR ––Ongoing ($598,000)Ongoing ($598,000)5.5 new positions ($508,000/year)5.5 new positions ($508,000/year)Internal Service Fund Charges ($90,000/year)Internal Service Fund Charges ($90,000/year)WDR WDR ––OneOne--time ($510,000)time ($510,000)Vactor ($300,000)Vactor ($300,000)Video Inspection Van ($162,000)Video Inspection Van ($162,000)Pickup Trucks (2 Pickup Trucks (2 --$48,000)$48,000) ProposedProposedWastewater Rate IncreaseWastewater Rate Increase¾¾Commercial and Residential Commercial and Residential ¾¾9% increase for FY 089% increase for FY 08--0909¾¾Residential Rate Residential Rate ¾¾Current Rate $16.20/monthCurrent Rate $16.20/month¾¾Proposed Rate $17.65/monthProposed Rate $17.65/month Historical Rates Historical Rates --WastewaterWastewater$0$5$10$15$20$25199819992000200120022003200420052006200720082009Monthly Wastewater BillWith 3% Increase Operating Reserve Levels (in millions)Operating Reserve Levels (in millions)$0$1$2$3$4$52001 2002 2003 2004 2005 2006 2007 2008 2009WastewaterWastewater Target Combined Increase Combined Increase ––13.3%13.3%Current (*)Current (*)Proposed (*)Proposed (*)WastewaterWastewater$16.20$16.20$17.65$17.65Solid WasteSolid Waste$18.87$18.87$18.87$18.87WaterWater$45.56$45.56$54.82$54.82TotalTotal$80.63$80.63$91.34$91.34IncreaseIncrease$10.71$10.71(*) Single Family(*) Single Family13.3%13.3% Recommended ActionsRecommended Actions••Adopt the proposed rate increases for Adopt the proposed rate increases for the Wastewater Fund effective January the Wastewater Fund effective January of 2009.of 2009.••Adopt the proposed rate increases for Adopt the proposed rate increases for the Water Fund effective January 2009.the Water Fund effective January 2009. Questions Questions Debt PaymentsDebt PaymentsWater Purchases - Increased Cost53%Water Purchases - Growth10%Replacement28%Debt1%CMWD8% Enterprise InfrastructureEnterprise InfrastructureInventory at Cost Inventory at Cost ––10 years10 years$0$20,000,000$40,000,000$60,000,000$80,000,000$100,000,000$120,000,000$140,000,000$160,000,0001999 2000 2001 2002 2003 2004 2005 2006 2007 2008Infrastructure Inventory - At CostWaterRecycledWastewater Operations Cost ComponentOperations Cost Component(paid to other agencies)(paid to other agencies)¾¾Recycled Water Permit FeesRecycled Water Permit Fees+$ 44,000+$ 44,000¾¾Water Permit FeesWater Permit Fees+$ 46,000+$ 46,000¾¾Water Interdepartmental Water Interdepartmental ChargesCharges+$213,800+$213,800¾¾Recycled Water Recycled Water Interdepartmental ChargesInterdepartmental Charges+$62,900+$62,900 Operations Cost ComponentOperations Cost Component(other services and contracts)(other services and contracts)¾¾Cost of ServiceCost of Service+$125,000+$125,000¾¾Landscape maint.Landscape maint.+$10,000+$10,000¾¾Pipeline Repair Pipeline Repair +$25,000+$25,000¾¾ElectricalElectrical+$10,000+$10,000 SDCWA, $0.12Transp., $0.15CMWD, $0.52MWD, $1.33SDCWA, $0.11MWD, $1.17CMWD, $0.34Transp., $0.14$1.76 per Unit$2.12 per Unit Proposed Water Rate IncreaseProposed Water Rate Increase20%20%¾¾Standard Rate Standard Rate ¾¾Current Rate $1.76 per unitCurrent Rate $1.76 per unit¾¾Proposed Rate $2.12 per unitProposed Rate $2.12 per unit¾¾Delivery chargeDelivery charge¾¾Current Rate $12.12 per monthCurrent Rate $12.12 per month¾¾Proposed Rate $14.54 per monthProposed Rate $14.54 per month¾¾Average Monthly Bill Average Monthly Bill ––Single Family ResidenceSingle Family Residence¾¾Current Rate $45.56 per monthCurrent Rate $45.56 per month¾¾Proposed Rate $54.82 per monthProposed Rate $54.82 per month¾¾Increase = $9.26 per monthIncrease = $9.26 per month Proposed Water Rate IncreaseProposed Water Rate Increase¾¾Recycled Water Rate Recycled Water Rate ¾¾Current Rate $1.68 per unitCurrent Rate $1.68 per unit¾¾Proposed Rate $2.01 per unitProposed Rate $2.01 per unit¾¾Agricultural Water Rate Agricultural Water Rate ¾¾Current Rate $1.45 per unitCurrent Rate $1.45 per unit¾¾Proposed Rate $1.81 per unitProposed Rate $1.81 per unit ØØWater Rate Increase Water Rate Increase --$4.6 million/year$4.6 million/year••$383,000/month$383,000/monthØØWastewater Wastewater --$760,000/year$760,000/year••$63,000/month$63,000/monthAdditional Revenue GenerationAdditional Revenue Generation Examples Examples ––large projectslarge projects¾¾Bressi RanchBressi Ranch¾¾ECR/PAR SouthECR/PAR South¾¾Encina Joint Venture AssetsEncina Joint Venture Assets¾¾S. Agua Hedionda IntercepterS. Agua Hedionda Intercepter¾¾Carlsbad Water Recycling FacilityCarlsbad Water Recycling Facility¾¾Rancho Santa Fe Road Rancho Santa Fe Road ¾¾Villages of La Costa/The GreensVillages of La Costa/The Greens¾¾Poinsettia LanePoinsettia Lane¾¾Vista/Carlsbad InterceptorVista/Carlsbad Interceptor¾¾Rancho CarrilloRancho Carrillo¾¾Cannon RoadCannon Road Proposed Increase Proposed Increase ––20%20%CMWD1.9%Replacement6.2%Water Cost Base11.7%Debt0.2%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%Water Cost Base ReplacementCMWDDebt