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WITHDRAWN D OTHER - SEE MINUTES O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