HomeMy WebLinkAbout2011-12-06; City Council; 20750; PUBLIC HEARING PROPOSE INCREASES WATER SEWER RATES10
CITY OF CARLSBAD AND CARLSBAD MUNICIPAL WATER
DISTRICT - AGENDA BILL rffdA
AB# 20.750
MTG. 12/06/11
DEPT. FIN
PUBLIC HEARING FOR PROPOSED
INCREASES FOR WATER AND SEWER
RATES
DEPT. HEAD^t^s
CITY ATTY. £/C
CITYMGR. (U^^
RECOMMENDED ACTION:
Conduct a public hearing to receive public comment and adopt Resolutions No. 1430
and No. 2011-275 approving increases for water and sewer rates for properties within the
Carlsbad Municipal Water District (CMWD) and the City of Carlsbad (City), so long as there is
not a majority protest regarding the proposed rate increases.
ITEM EXPLANATION:
As part of the ongoing financial management program, the City annually prepares five-year
operating and maintenance forecasts for the water and sewer funds.
The most recent forecasts for the water and sewer funds show that rate increases are needed
for the following reasons:
• Increased cost of wholesale potable and recycled water
• Increased maintenance and operating expenditures
• Maintenance of adequate operating and replacement reserves
PROPOSED WATER RATES:
The proposed maximum increase to water rates paid by Carlsbad residents located within the
Carlsbad Municipal Water District is 10 percent, effective January 1, 2012, and an additional 10
percent, effective January 1, 2013. As long as the rates adopted are equal to or less than the
maximum rates noticed, there is no requirement for a subsequent notice and public hearing
(see section titled "Public Noticing Requirements" below). The increase for January 2013 will
be reviewed during the budget adoption process for FY2012-13.
A primary component of these increases, 65 to 70 percent, is directly attributed to the
increases in the cost of purchased water. The City of Carlsbad purchases 100 percent of its
potable water from the San Diego County Water Authority (CWA). The purchase price includes
two components - fixed and variable charges. The variable charges are paid for the actual
DEPARTMENT CONTACT: Helga Stover, 760-602-2429, Helga.Stover@carlsbadca.gov
FOR CITY CLERKS USE ONLY. „ /
COUNCIL ACTION:APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
Kn'aan
CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER -SEE MINUTES
D
D
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Page 2
water, or commodity, purchased and the transportation cost and is charged on a per acre foot
basis. In January 2012, the CWA is expected to increase the cost of wholesale water by 8
percent, from $887 to $957 per acre foot. The fixed charge component incudes charges for
customer service, emergency storage, infrastructure access, ready-to-serve charges, and
capacity reservation charges. These are allocated to member agencies of the CWA on an
annual basis and billed over a 12 month period. These fixed charges pay for everything except
the water and transportation of the water. Fixed charges for water purchases are expected to
increase by about 18 percent in January 2012. Projected increases to fixed and variable
charges for water purchased from CWA are expected to be about 10 percent or more in
January 2013.
The remaining 30 to 35 percent of the increase are to fund on-going operating, maintenance,
and replacement of the infrastructure for the Carlsbad Municipal Water District (CMWD). The
CMWD is also setting aside a portion of the rates to build an adequate reserve. The maximum
rate increases are consistent with CMWD's plan to increase the fund balance (reserve) to 30
percent of operating expenses by the end of Fiscal Year 2014-15. The 30 percent fund balance
is an amount reserved for unanticipated emergencies (such as a water main break) and
unexpected fluctuations in revenues or expenditures (such as decreases in water purchase
quantities or rising water costs) which could affect the district's ability to fund ongoing operating
and maintenance costs.
In preparing the five-year financial forecast for the water utility, CMWD uses a rate model to
develop proposed rate increases. The rate model includes expenditures for the cost of
purchased water from the CWA, with assumptions about expected increases based on
information provided by the CWA. In addition, the model takes all other expenditures, such as
personnel, maintenance and operations, and replacement of infrastructure, and calculates the
funds remaining at the end of each year. The district's objective is to have the balance of funds
equal to 30 percent of the annual operating expense, by 2014-15. In order to meet this
objective, the rate model calculates the estimated increase needed for each year. Current
estimates indicate that rate increases will stabilize at 5 to 9 percent, annually, after FY 2013-14,
based on projections of fixed and variable water costs provided by the CWA.
PROPOSED SEWER RATES:
The proposed maximum wastewater/sewer rates are 6.5 percent, effective January 1, 2012 and
6 percent, effective January 1, 2013. These proposed rate increases are needed for ongoing
operating, maintenance, and replacement of the infrastructure, and to ensure that operating
reserves are replenished and adequate. Revenues from sewer service charges decreased
when customers began using significantly less amounts of water due to the drought and
ensuing conservation efforts. At the same time, expenditures for maintenance activities
increased in order to comply with the state mandated Wastewater Discharge Requirements.
The decrease in revenue, coupled with the increase in costs, rapidly depleted the cash balance
of the utility. The proposed rate increases will allow the fund to reach a positive balance and to
establish a 30 percent reserve by fiscal year 2014-15.
Like the increases for water rates, there is no requirement for a subsequent notice and public
hearing as long as rates are equal to or less than those adopted in this public hearing (see
section titled "Public Noticing Requirements" below). The increase for January 2013 will be
reviewed during the budget adoption process for FY2012-13.
PageS
PUBLIC NOTICING REQUIREMENT:
The California Constitution, Article XIIID, Section 6, states that local governments must hold a
public majority protest hearing, and notify property owners and customers forty-five (45) days in
advance of public hearings related to proposed water and wastewater rates. The public hearing
is to be held forty-five (45) days after noticing the ratepayers.
At the public hearing, if it is determined that a majority of property owners has submitted a
formal protest, the proposed fee change must be rejected. This is a requirement of
Proposition 218, which was passed by California voters in 1996 to limit methods by which
local governments can create or increase taxes, fees and charges without taxpayer consent.
Any person interested in objecting to the increases may file a signed written protest with the
City Clerk. The written protest must contain the address of service, the rate change being
protested and be received prior to the close of the public hearing. While protestors may
appear at the hearing and be heard on the matter, only written protests are considered as part
of the majority protest.
Staff took the following actions at least forty-five (45) days prior to this public hearing:
• Affected utility customers and property owners were notified by mail of the public
hearing.
• The notice (see Exhibit 1) outlined the proposed rate changes.
• The notice provided information relating to the public hearing.
• In addition, information about the majority protest hearing and proposed rates was
posted on the City's website at www.carlsbadca.gov.
PROTEST LETTERS RECEIVED:
As of November 7, two protest letters were received. The protest letters are attached as Exhibit
2. Any protest letters received after the public hearing will be forwarded to the City Council.
If there is no majority protest, staff is recommending that the Board of Directors and City
Council, after hearing public comment, adopt the proposed rate increases.
FISCAL IMPACT:
The proposed rate increases, if approved, will be effective January 1, 2012 and January 1,
2013, and will provide adequate funding to properly operate and maintain Carlsbad's water and
sewer systems and provide adequate operational reserves.
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Page 4
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. Notice of Public Hearing
2. Protest letters received
3. Rate Schedule
4. Resolution No. 1430 of the Board of Directors of the Carlsbad Municipal Water
District approving water rate increases
5. Resolution No. 2011-275 of the City Council of the City of Carlsbad approving sewer
rate increases
Exhibit 1
Proposed Sewer Increases
Residential customers pay a flat monthly
charge for sewer services while most non-
residential customers pay a rate per volume of
water usage. The proposed sewer rate
increases are 6.5% and 6.0% beginning January
1, 2012 and January 1, 2013, respectively. The
proposed rate increases are needed to
generate sufficient revenue for recovering
costs associated with operations, maintenance
and replacement of aging or failing
infrastructure, as well as establishing and
maintaining an adequate operating reserve.
Two Year Maximum Rate Increases
1/1/2012 1/1/2013
Current Proposed Proposed
Groups (I through VI) 6.5% 6.0%
Flat monthly charge:
1 - Residential $23.03 $24.53 $26.00
Per unit of water used:
1 - Multi-family
II - Commercial
III - Commercial
IV - Commercial
V - Other institutional
$2.65
$2.16
$3.28
$6.08
$2.06
$2.82
$2.30
$3.49
$6.47
$2.19
$2.99
$2.44
$3.70
$6.86
$2.32
VI - Bio-Hydration Research
Lab Inc.$1.87 $1.99 $2.11
Per student:
V - Elementary school
V - Junior high school
V - High school
V - Boarding school
$0.47
$0.70
$0.94
$4.90
$0.50
$0.74
$1.00
$5.22
$0.53
$0.78
$1.06
$5.53
The proposed rates, if adopted, will
become effective January 1, 2012
and January 1, 2013.
Sample of Maximum Rate Increases
Current 1/1/2012 1/1/2013
Water (*) $ 50.40 $ 55.44 $ 61.02
Sewer $ 23.03 $ 24.53 $ 26.00
Trash (**) $ 18.87 $ 18.87 $ 18.87
Total $ 92.30 $ 98.84 $ 105.89
Total monthly increase $ 6.54 $ 7.05
Increase percent 7.1% 7.1%
(*) The sample rate calculation is based on a single
family home with a 5/8 inch meter using 12 units of
water per month.
(**) Trash rate increases are not being considered as
part of this action. The trash rates shown in the
table above are based on the existing rates and are
subject to changes in future years based on subse-
quent actions by the city council.
For more information about the public hearing
process or the proposed water and sewer rate
increases, call 760-602-2403, or visit the city's
website at www.carlsbadca.gov/finance.
Notice of Public
Hearing on
proposed maximum
sewer and water
rate increases
Tuesday
December 6th, 2011
at 6pm
City of Carlsbad
City Council Chambers
1200 Carlsbad Village Drive
Carlsbad, CA 92008
The rates for water and sewer service
are proposed to increase. This notice
has information about the proposed
rate increases.
CITY OF
CARLSBAD
Proposed Water and Sewer Rate Increases
The City of Carlsbad and the Carlsbad Municipal Water District are proposing increases in
water and sewer rates over the next 2 years. If the City Council and the Carlsbad Municipal
Water District Board of Directors adopt the rate increases at the public hearing on December
6th, 2011, the new rates will be effective January 1, 2012, and January 1, 2013,
About Water Rates
There are two components to the water rates
charged by the city: the delivery charge and the
usage charge. The delivery charge is a monthly
fixed charge based on the size of meter. The
usage charge is the charge for the volume of
water used. The proposed rate increases for
the residential and non-residential delivery
charges and usage charges are 10% (maximum)
on January 1, 2012 and 10% (maximum) on
January 1, 2013.
The City of Carlsbad purchases 100% of its
potable water from the San Diego County
Water Authority (SDCWA). The cost of potable
water purchased from the SDCWA continues to
increase. The cost of purchased recycled water
has also risen. The proposed rates will cover
the increasing cost of purchased water and pay
for ongoing operations, maintenance and
replacement of the city's water system, as well
as establish an adequate operating reserve.
CITY Of
CARLSBAD
Residential water rates
Single-family and multi-family residential rates
are grouped into tiers, with the first tiers having
the lowest per unit rate and the second and
third tiers having incrementally higher rates.
The proposed water rate increase for January 1,
2012, will raise the monthly water charge for a
typical single family household with a 5/8 inch
meter and using 12 units of water, by $5.04
(from $50.40 to $55.44). The exact amount of
the increase will vary among customers
depending on actual water usage. The
proposed increase for January 1, 2013 will raise
the monthly water charge from $55.44 to
$61.02 ($5.58). Proposed water rates are
shown on the table to the right.
Commercial, agriculture, recycled
and irrigation water rates
Non-residential customers have different water
usage needs than residential customers;
therefore, the usage charge is a flat per unit
rate rather than a tiered rate. The delivery
charge is also a flat rate based on meter size.
Proposed non-residential rates are also shown
on the table to the right.
Two Year Maximum Rate Increases
Current
Monthly Delivery Charge:
1/1/2012
Proposed
10%
1/1/2013
Proposed
10%
Meter Size:
5/8"
3/4"
1"
1.5"
2"
2.5"
3"
4"
6"
8"
10" $
Usage Charges (i unit =
$ 18.00
$ 22.70
$ 32.43
$ 56.90
$ 86.08
$ 124.41
$ 163.91
$ 251.47
$ 494.97
$ 786.83
1,127.62
748 gallons):
$ 19.80
$ 24.97
$ 35.67
$ 62.59
$ 94.69
$ 136.85
$ 180.30
$ 276.62
$ 544.47
$ 865.51
$ 1,240.38
10%
$ 21.78
$ 27.47
$ 39.24
$ 68.85
$ 104.16
$ 150.54
$ 198.33
$ 304.28
$ 598.92
$ 952.06
$ 1,364.42
10%
Single-Family Rates
Tier 1 (0-12 units)
Tier 2 (13-20 units)
Tier 3 (21+ units)
$ 2.70
$ 3.48
$ 4.74
$ 2.97
$ 3.83
$ 5.21
$3.27
$ 4.21
$ 5.73
[Multi-Family Rates |
Tier 1 (0-5 units)
Tier 2 (6-10 units)
Tier 3 (11+ units)
$ 2.28
$ 2.57
$ 3.06
$ 2.51
$ 2.83
$ 3.37
$ 2.76
$ 3.11
$ 3.71
(Commercial, Agriculture and Irrigation Rates
Non-residential
Agricultural Rates
Irrigation Rate
Recycled Water
$3.12
$3.12
$ 3.50
$ 2.97
$ 3.43
$ 3.43
$ 3.85
$ 3.27
$ 3.77
$ 3.77
$ 4.24
$ 3.60
Exhibit 2
From: Bill Blank [mailto:brblank@roadrunner.com]
Sent: Monday, October 24, 2011 4:12 PM
To: WasteWater; Water
Subject: Proposed rate increases on sewer and water fees
Carlsbad Municipal Water District Board of Directors:
This message is in opposition to the proposed increases on water and sewage fees. I a a retired senior citizen on a
fixed income and these fee increases will be a burden on the senior citizen community with Carlsbad. The only
opportunity that I have to increase my income is through the Cost of Living Adjustments for Social Security, which this
year is estimated to be about 3%. In my opinion the Water and Sewer Board need to look for ways to reduce cost and
keep any increases in the range of the COLA adjustment for the Senior Citizen community.
I am amazed at all the Water Boards in San Diego County and the duplicate facilities that they have built and the fees
paid to Water Board Directors. To me, water board consolidation and having directors serve without pay, it a prime way to
reduce overhead cost.
I can't understand the City of Carlsbad spending millions of dollars on a "water park" and at the same time trying to
raise rates for water and sewer fees. In these difficult times, it seems more appropriate to reduce discretionary spending
to offset any extra cost charged by SDCWA.
BiH Blank
2917 Rancho Rio Chico
Carlsbad, CA 92009
Exhibit 2
2236 Janis Way
Carlsbad, CA 92008
16 November 2011
Subj: CMWD Water and Sewer Rate Increases
Dear Mayor and City Council Members,
I protest the water rate increase (up to 10% each year) and sewer rate increases (6.5% and 6.0%)
proposed for January 2012 and January 2013 respectively. While some rate increase may be
considered I believe the proposed rate increases are unwarranted, not justified and excessive. The
reasons for my opposition are as follows:
1. The current economic state does not support the excessive rate proposal. Even today's
Union Tribune's Business section cites high unemployment and low pay increases.
Employees have seen negative pay increases. Although it appears the economy is
SLOWLY improving, we are not out of the woods yet.
2. The Notice of Public Hearing on proposed Rate Increases is confusing and does not provide
(nor identify by reference) information that clearly justifies rate increases nor where the
revenue or the additional generated revenue will be spend. Even contact with the Water
Department only provides general information, for example: our costs are increasing, lack of
revenue due to conservation (finally admitted to), passing down cost increases from
SDCWA (but the amount is never stated), etc. I have asked specifically how my monthly
delivery charge ($22.70) is spent, but no one has provided an answer. The issue of spending
transparency regarding the CMWD was raised at September 9th 2008 City Council meeting;
however, only general and department level information has been provided,
3. To my knowledge CMWD has never challenged or opposed the rate increases of SDCWA
or MWD. These appear to be accepted as just "pass down". I have heard rumors of
unnecessary facilities expansion, pension increases, huge high level salary increases, etc.
4. Although customer charges seem to continually increase, service does not seem to be
increasing.
I urge City Council to reject CMWD's proposal rate increases.
Sincerely,
Dale Kubacki
PROPOSED MAXIMUM RATE INCREASES EXHIBITS
Delivery Charge
5/8"
3/4"
1"
1.5"
2"
2.5"
3"
4"
6"
8"
10"
Single-Family Rates
Tier 1 (0-12ccfs)
Tier 2 (13-20ccfs)
Tier 3 (21+ ccfs)
Multi-Family Rates
Tier 1 (0-5ccfs)
Tier 2 (6-10ccfs)
Tier 3 (11+ ccfs)
Commercial/Non-Residential
Agricultural Rates
Irrigation Rate
Recycled Water
WATER
Current
18.00
22.70
32.43
56.90
86.08
124.41
163.91
251.47
494.97
786.83
1,127.62
2.70
3.48
4.74
2.28
2.57
3.06
3.12
3.12
3.50
2.97
1/1/2012
PROPOSED
10%
19.80
24.97
35.67
62.59
94.69
136.85
180.30
276.62
544.47
865.51
1,240.38
2.97
3.83
5.21
2.51
2.83
3.37
3.43
3.43
3.85
3.27
1/1/2013
PROPOSED
10%
21.78
27.47
39.24
68.85
104.16
150.54
198.33
304.28
598.92
952.06
1,364.42
3.27
4.21
5.73
2.76
3.11
3.71
3.77
3.77
4.24
3.60
SEWER
Group 1 - Residential (Flat Monthly Charge)
Group 1 - Multi-Family (per ccf of water usage)
Group II - Commercial (per ccf of water usage)
Group III - Commercial (per ccf of water usage)
Group IV - Commercial (per ccf of water usage)
Group V - Other Institutional (per ccf of water usage)
Group V - Elementary School (per student)
Group V - Junior High School (per student)
Group V - High School (per student)
Group V - Boarding School (per student)
Group VI - Bio-Hydration Research Lab Inc. (per ccf)
Current
23.03
2.65
2.16
3.28
6.08
2.06
0.47
0.70
0.94
4.90
1.87
1/1/2012
PROPOSED
6.5%
24.53
2.82
2.30
3.49
6.47
2.19
0.50
0.74
1.00
5.22
1.99
1/1/2013
PROPOSED
6.0%
26.00
2.99
2.44
3.70
6.86
2.32
0.53
0.78
1.06
5.53
2.11
Table showing single family monthly utility
bill for a household using 12 units of water.
Average Single Family Bill
WATER
SEWER
TRASH
TOTAL
CURRENT
$ 50.40
$ 23.03
$ 18.87
$ 92.30
Increase $
Increase %
1/1/2012
$
$
$
$
$
55.44
24.53
18.87
98.84
6.54
7.1%
1/1/2012
S
$
$
$
$
61.02
26.00
18.87
105.89
7.05
7.1%
1
2
3
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
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RESOLUTION NO. 1430
A RESOLUTION OF THE BOARD OF DIRECTORS
CARLSBAD MUNICIPAL WATER DISTRICT (CMWD)
APPROVE INCREASES IN WATER RATES.
WHEREAS, the California Constitution, Article XIIID, Section
local governments must hold a public majority-protest hearing, and
forty-five (45) days in advance of increases in water rates; and
Exhibit 4
OF
TO
6, provides that
notify customers
WHEREAS, the Carlsbad Municipal Water District is proposing a schedule of
maximum water rates as shown in "Exhibit 3;" and
WHEREAS, in October 2011, Carlsbad residents and property owners were
notified by mail of the proposed rate increases (Exhibit 1), thereby complying with the
advance notice requirement of forty-five days; and
NOW, THEREFORE, BE IT RESOLVED by the Board of
Carlsbad Municipal Water District, as follows:
1 . That the above recitations are true and correct.
2. The Board of Directors of the Carlsbad Municipal Water
Directors of the
District imposes
the rates that appear in "Exhibit 3." These rates shall be effective as of January 1 , 2012
and January 1, 2013.
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PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the
Carlsbad Municipal Water District Board of Directors and the Carlsbad City Council,
held on the 6th day of December 2011, by the following vote:
AYES: Board Members Hall, Kulchin, Blackburn, Douglas, Packard.
NOES: None.
ABSENT: None.
MATKHALL, President
(SEAL)
M. WOOD, Secretary
Exhibit 5
1 RESOLUTION NO. 2011-275
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, TO APPROVE INCREASES IN
3 SEWER RATES.
4
5 WHEREAS, the California Constitution, Article XIIID, Section 6, states that local
6 governments must hold a public majority-protest hearing, and notify customers forty-five
7 (45) days in advance of increases in sewer and trash rates; and
8 WHEREAS, the City of Carlsbad is proposing an increase in sewer rates; and
9
WHEREAS, in October 2011, Carlsbad residents and property owners were
10
notified by mail of the proposed rate increases (Exhibit 1), thereby complying with the
11
advance notice requirement of forty-five (45) days; and
12
WHEREAS, the City Council of the City of Carlsbad approves the sewer rate
increases as set forth in "Exhibit 3."
15 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
16 Carlsbad, California, as follows:
17 1. That the above recitations are true and correct.
18 2. That the City Council of the City of Carlsbad approves the increases in
19
sewer rates, effective January 1, 2012, and January 1, 2013, as set forth in "Exhibit 3."
20
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1 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the
2 Carlsbad City Council and Carlsbad Municipal Water District Board of Directors, held
on the 6th day of December 2011, by the following vote:
4
5
AYES: Council Members Hall, Kulchin, Blackburn, Douglas, Packard.
6
NOES: None.
7
ABSENT: None.8
9
10
11
MATT HALL, Mayor
12
ATTEST:13
14
' ' ~ ~'-' INE M. WOOD, City Clerk"
16 (SEAL)
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Partial List of Items Reviewed Regarding Proposed Water and Sewer Fees Increases
• Carlsbad Public Hearing Notices from 2007 through 2011.
• The Agenda Bills and Protest Letters from 2008 and 2009.
• CAFR-June 30, 2010.
• Cash Flow Sheet from Finance Department - briefly viewed.
• Monthly Financial Status Reports June and October 2011.
• Council and CMWD Meeting Videos including the SDCWA, CMWD, and Finance Department
power point presentations from earlier this year.
• CMWD Ordinances 44 and 45.
• CMWD Urban Water Management Plan June 2011 - briefly viewed.
• U.S. Census Demographics for the Carlsbad 2000 and 2010.
• Cost of Services Study prepared by the FCS Group for Carlsbad.
• City of Carlsbad Legislative Platform.
• City Council Goals for FY 2011-2012.
• Brown Act regarding Open Meetings.
• Proposition 218 and a number of overviews, court cases and legal interpretations of various
parts of Proposition 218, in particular regarding notices for public hearings and the majority
protest process. These include a paper by Attorney Steve Kabot, of McCormick, Kabot, Jenner &
Lew, and recommendations by San Diego City Attorney Tom Zelaney.
• Public Hearing Notices, all of which include majority protest announcements and instructions
from the cities of Davis, Port Hueneme, Vacaville, Los Angeles, Escondido, Oceanside and more.
• The San Diego Grand Jury Report Regarding Water dated May 31, 2011.
• The California Local Government Financial Almanac - briefly reviewed.
• League of California Cities, Proposition 218 Implementation Guide.
• State of California Legislative Analyst Office: Understanding Proposition 218 with analysis.
• Howard Jarvis Taxpayers Association, drafters of Proposition 218 and "Intent".
• Article 13d of the California Constitution, the legislative interpretation of the law and the
corresponding code 53750-53760.
• Association of California Water Agencies website, ordered their publication titled "Open and
Accessible: A Public Water Agency Guide to Communication and Transparency, and reviewed
the ACWA Proposition 218: Local Agency Guidelines for Compliance 2007 particularly pages 19
and 20.
...and more.
Gretchen M. Ashton
(760) 271-6069
Main Points for Majority Protest Public Hearing
• In 2007, 2008 and 2009, the agenda bills and public hearing notices regarding utility
service fee increases included wording informing property owners/customers of their
right to protest fee increases and the basic procedures for a majority protest hearing. In
2010 and 2011 the majority protest information was dropped from the notices.
Majority protest wording should be included in the public hearing notices. In the course
of preparing for this hearing, I was initially provided two different sets of procedures for
filing a protest. According to the Carlsbad City Attorney's office, Carlsbad does not have
a legal opinion paper to reference regarding these procedures. It appears Carlsbad has
not established written policy and procedures directed by council for the majority
protest hearing process. The public hearing notices for water and sewer are not
reviewed by the attorney's office for compliance with Proposition 218 or any other legal
concern before they are mailed to customers.
Instead staff references the Proposition 218 Implementation Guidelines from the
Association of California Water Agencies, which states, Article 13d does not specifically
require a notice of a proposed property-related fee or charge to contain a statement
that a majority protest will prevent the increase of the fee. ACWA also states "This does
not mean that an agency may not include an explanation". The spirit and intent of
Proposition 218 is clear, "The provisions of this Act shall be liberally construed to
effectuate its purposes of limiting local government revenue and enhancing taxpayer
consent." According to the Howard Jarvis Taxpayers Association, the drafters of
Proposition 218, the purpose of this section is to ensure that, in the event of any
ambiguity, the rights of the taxpayers will be the paramount consideration."
It is common practice among virtually all other cities in California to have either a
written procedural recommendation or include majority protest wording in the public
hearing notice, or both. The City of San Diego goes so far as to include a protest form in
the public hearing mailer. In a conversation with San Diego City Attorney Tom Zelaney, I
asked how he connected the dots between his recommendations and what some would
call ambiguity in Proposition 218. His response was simply it is the "most conservative"
approach. He also believed it "high risk" to not have a legal review of the notice.
• Since staff currently relies on the ACWA implementation procedure of Proposition 218,1
reviewed it and numerous other documents. In addition to other information, the public
hearing notice must state the basis upon which the amount of the proposed fee or
charge is to be imposed on each parcel. The basis would include some explanation of
the costs which the proposed fee or charge will cover and how the costs are allocated
among property owners/customers under the proposed rate and fee schedule.
According to ACWA, the explanation may necessarily by presented in a general
description, "but the agency must nevertheless have detailed data to support the
amount of the increase, including actual cost data and water sales projections, prior to
the hearing on the increase." The City's Comprehensive Annual Financial Report (CAFR)
is not yet complete. While some data may be available to the governing body, the public
also requires this audited financial information in advance to prepare for the public
hearing. Finance staff shared a cash flow sheet with me while at the city offices, but
would not provide a copy, stating "it is a working document. The year-to-date report
through October 2011 reflects water and sewer revenues are up a net 9%, yet maximum
increases are still being proposed. Further maximum increases as outlined in the Cost of
Services Study have been implemented "across-the-board". And there still needs to be
action taken regarding the disproportionate way the San Diego County Water Authority
passes through their MWD costs. I also understand that at least one water reserve fund
was quote "decimated" by the Marbella settlement. Legal and insurance documents,
and some news articles refer to the cause of the landslide as a rupture/leak of a fire
hydrant and water line attached to a fire hydrant after city employees changed out an o-
ring. However, the July 2007 Agenda Bill outlining the details of city actions regarding
the Marbella settlement describes it as a storm drain settlement, which in reality was
ancillary as a practical consequence of the repairs. Regardless of the opinions or what
the settlement is labeled, it seems that repairs obviously included some fire protection
related expenses and it could be determined that the entire settlement was the result of
providing fire protection services. Proposition 218, regarding property-related fees
specifically excludes fire protection services where the service is available to the public
at large in substantially the same manner as it is to property owners. An article in
CityVision Magazine indicates courts have already ruled that providing public fire
protection through fire hydrants is a governmental function that must be paid out of
general fund revenue and not through water-use rates including the entire
infrastructure required to deliver water to the hydrants.
• Another compliance question, relating to the proportionality requirements of
Proposition 218 is raised by assumptions that were made in the establishment of the
tiered pricing break points in the Cost of Services Study that deviate from encouraging
water conservation and reasonable costs to ultimately penalizing families. U.S. Census
data for Carlsbad shed some light on this.
According to Proposition 218, the burden of proof is on the City of Carlsbad and CMWD. I
request that the proposed fee increases not be approved, that compliance with Proposition 218
be ensured in all areas including fire protection and current financial data and how costs are
allocated and fees are established, that procedures and policies be established for the majority
protest public hearing process and that these procedures be included in the notification of the
public hearing mailed to property owners/customers before any further consideration of
additional fee increases including the upcoming proposed trash collection. I invite your
questions.
A
&$> CITY OF
CARLSBAD
Memorandum
Decembers, 2011
To: Lisa Hildabrand, City Manager
From: Helga Stover, Senior Accountant
Via: Chuck McBride, Finance Directorc
Re: Protest Letters and correspondence - Majority Protest Public Hearing
Attached are copies of protest letters received as of December 6th, 2011, for distribution
1. Bill Blank
a. Email dated 10/24/2011
b. Reply to Email, dated 11/7/2011
c. Reply to reply to Email, dated 11/29/2011
2. Todd Anderson
a. Email dated 11/6/2011
3. Dale Kubacki
a. Letter dated 11/16/2011
4. Gretchen Ashton
a. Email dated 10/25/2011
b. Email dated 11/16/2011
c. Email from Ron Kemp dated 11/18/2011
d. Response to Email dated 11/18/2011
e. Email dated 11/28/2011
f. Letter dated 12/1/2011
HS
Finance Department
1635 Faraday Ave. I Carlsbad, CA 92008 I 760-602-2430 I 760-602-8553 fax I www.carlsbadca.gov
From: Bill Blank [mailto:brblank@roadrunner.com]
Sent: Monday, October 24, 2011 4:12 PM
To: WasteWater; Water
Subject: Proposed rate increases on sewer and water fees
Carlsbad Municipal Water District Board of Directors:
This message is in opposition to the proposed increases on water and sewage fees. I a a retired senior citizen on a
fixed income and these fee increases will be a burden on the senior citizen community with Carlsbad. The only
opportunity that I have to increase my income is through the Cost of Living Adjustments for Social Security, which this
year is estimated to be about 3%. In my opinion the Water and Sewer Board need to look for ways to reduce cost and
keep any increases in the range of the COLA adjustment for the Senior Citizen community.
I am amazed at all the Water Boards in San Diego County and the duplicate facilities that they have built and the fees
paid to Water Board Directors. To me, water board consolidation and having directors serve without pay, it a prime way to
reduce overhead cost.
I can't understand the City of Carlsbad spending millions of dollars on a "water park" and at the same time trying to
raise rates for water and sewer fees. In these difficult times, it seems more appropriate to reduce discretionary spending
to offset any extra cost charged by SDCWA.
Bill Blank
2917 Rancho Rio Chico
Carlsbad, CA 92009
CITY OF
CARLSBAD
Finance Department www.carlsbadca.gov
November 7,2011
Bill Blank
2917 Rancho Rio Chico
Carlsbad, CA 92009
Re: Proposed rate increases on sewer and water fees
Dear Mr. Blank,
The City of Carlsbad has received your opposition to the proposed increases in water and sewer charges,
and appreciates your comments. The city works hard to keep rates as affordable as possible for our
utility customers and understands that the economy has made this a difficult time for people financially.
Unfortunately, many of the costs associated with these rate increases, such as the actual cost of
purchasing water, are passed through to the city from other regional water agencies. By law, revenues
collected from our utility customers may only be used for the business needs of those specific utilities.
For example, funds collected for water charges can only be used to fund water purchases, water system
operations and improvements and cannot be used to fund other governmental services, such as
libraries, parks or public safety. Compensation for the members of the Board is provided from these
funds, but the amount paid is nominal and not a contributing factor in how new water rates are
established.
The water park you mentioned in your letter is actually a component of a new community park called
Alga Norte. Because this is a park facility and not related in any way to our water utilities, it is precluded
from receiving any funding from water, wastewater, or solid waste funds. Instead, Alga Norte Park will
be funded from fees paid by developers and revenues collected from general taxes, such as property
and sales tax.
Again, thank you for your comments about the proposed rate increases. I hope this letter has clarified
how funds from our water and sewer funds are established and how they may be used. The city will
continue its commitment to keep rates as affordable as possible for our customers. Your comments will
be shared with the City Council/ board members of Carlsbad Municipal Water District (CMWD), to be
considered at the public hearing scheduled for December 6, 2011.
Regards,
Helga Stover, Senior Accountant
City of Carlsbad
1635 Faraday Avenue. Carlsbad CA 92008-7314 Tel 760-602-2430 Fax 760-602-8553
Business License 760-602-2495, Utility Billing 760-602-2420, Purchasing Tel 760-602-2460 - Fax 760-602-8556 ®
William R. Blank
2917 Rancho Rio Chico
Carlsbad, CA 92009
November 29, 2011
Helga Stover
Senor Accountant
City of Carlsbad
1635 Faraday Ave.
Carlsbad, CA 92008
Ms. Stover:
First, thank you for your response to my e-mail concerning the proposed increases
in water and sewer charges.
I continue to object to the large (10%) increases to the water and sewer
rates. If the law requires that the "revenues collected from our utility customers may only
be used for the business needs of those specific utilities", then the Carlsbad Water &
Sewer District (CMWD) needs to find savings within their own organization
The Water and Sewer District need to reduce cost to compensate for the increased
cost from the MWP. This must include staff reduction and compensation reductions.
This is the model that is being enforced at school district across the county. The District
should not be forcing any increase on their customers without first taking this action.
The concept of building a surplus for future expenses is not appropriate in today's
current financial environment. The CMWD must live within its revenue income and
reduce cost through expense reduction. This may be painful for the CMWD employees
and its customers, BUT it MUST be done. I feel that Carlsbad residents are totally
opposed to this concept of double digit increases.
Also, any compensation for the members of the board should be totally
eliminated, in my opinion. In addition, expenses for attendance at conferences and out of
town events should be NOT allowed, EXCEPT for senior executive on legitimate fact
find trips to reduce cost and improve efficiency.
Further, I continue to believe that real cost savings will come from merging the
numerous Water Boards in the North County. There are significant savings to be realized
by combining all the Water/Sewer Boards through reduction of employees, sharing of
equipment, elimination of administrative staff, sharing of maintenance equipment and
reducing the number of "Palaces" built by the various Boards. I know this will take time
to negotiate and implement, but we need to get started NOW.
Please enter my comments into the record for the December 6, hearing.
Sincerely
WilliafrlR. Blank
CC: Matt Hall, Mayor, City of Carlsbad
Helga Stover
From: Todd Anderson <todd@switchfootcreative.com>
Sent: Tuesday, November 08, 2011 7:18 AM
To: Council Internet Email
Subject: Proposed Water and Sewer rate increases for 2012-13
Honorable Mayor and City Council -
As a current resident, business owner, and taxpayer in the City of Carlsbad, I am disappointed to learn that our water and
sewer rates are again slated for an increase. If this proposed increase is approved by the Council, it will be three years in a
row of rate increases at a time when our economy is still struggling, business is still down and families are having a tough
time making ends meet from month to month.
Carlsbad residents and businesses just witnessed an increase this year of 7.2 percent for the fixed monthly charge, and 18
percent for the per unit or "commodity" charge. The new proposal requests an additional 20 percent increase in both over
the next two years. That's an unbelievable 27.2 percent increase for the fixed monthly charge, and 38 percent increase per
unit per month over a three year period.
Think about the burden that will place on city residents and small businesses struggling to keep a roof over their heads and
their doors open. If the growth of the economy was trucking along at such voluminous numbers each year, I probably
wouldn't have a problem with the proposed rate hike. But this is unprecedented, and I urge you to look for cuts in services
and other City programs to mitigate the need for these increases.
Thank you for your time and consideration -
Todd Anderson, Owner/Creative Director
switchfoot creative
t 760.720.4255
f 760.720.4295
>» Put Your Best Foot Forward >»
3«~
2236 Janis Way
Carlsbad, CA 92008
16 November 2011
Dear Mayor and City Council Members,
It appears that since 1988 that I have only approximately 40 psi (standing water pressure)
which falls to less than 40 psi under demand (substandard). Yet other residential
customers (estimated over 90%) have up to 150 psi.
The question I have asked various water/utility personnel this: question
"Why — when I receive low standard to substandard service, do I continue to
pay the same amount for service (delivery charge) as those residential
customers who receive better service?
To date have not received a clear/acquit able answer.
I believe one should only pay for the level of service provided.
Sincerely,
Dale Kubacki
•u.
Helga Stover
To: Kira Linberg
Subject: RE: Water Fees and CAFR - Providing Information to Carlsbad Residents
—Original Message—
From: dngbythec@roadrunner.com [mailto:dngbythec@roadrunner.com]
Sent: Tuesday, October 25, 2011 4:54 AM
To: Council Internet Email
Cc: Finance
Subject: Water Fees and CAFR - Providing Information to Carlsbad Residents
Dear Mayor, Council Members and Finance Department,
I received the water rate increase brochure in the mail and read it over. As a result of the way information was
presented in the brochure and having seen staff presentations at council meetings, I wanted more information. After
review and research on the city website, I would like to pass along quick discoveries that the following items are not
current information regarding the proposed water rate increase:
The .pdf water rate increase brochure is from the fee increase that went into effect as of January 1,2011.
The CAFR is dated fiscal year ending June 2010.
Please post the current information as soon as possible, so it can be reviewed by anyone interested before the public
hearing on the fee increase.
Further reading and navigating revealed that the council is also the board for other legal agencies including CMWD. This
clarification really should be noted on the water fee brochure. Makes me wonder if any public comment matters
because of this arrangement. Seems as if the increase is a board recommendation to get this far in the process, and that
the council will be approving something it has already approved or decided on. Perhaps you can clarify for me.
The council as board(s) for CMWD and other agencies is not easy to discover on the website, especially through the
water information area. The board members are not listed on the CMWD page. Further, these five agencies/boards are
not listed in the boards, commissions and committees list through the city clerk pages. These would be obvious locations
for this information.
The information does appear in the council area of the website at the bottom of the meeting and agendas page in the
"other" section, in the council meeting brochure, and a reference in human resources where it discusses compensation
for participating in board meetings.
Regarding the CAFR; I am interested to know how the revenue generated by CMWD is spent. Once it is transferred how
do we track the funds in a way that correlates to the reasons for the increase indicated in the water fees brochure? In
other words, how much is actually spent on operating expenses, reserve, maintenance, etc., Or is it just thrown into a
lump sum with other departments in its category and used in a general fashion to offset deficits in waste water, the golf
course, etc., as a lump sum. Does all of the revenue fall into discretionary spending accounts in the budget? With this in
mind? Does our fee increase become an "automatic response" to any increase in the cost of water or are other analyses
performed to evaluate the possibility of avoiding an increase or at least a portion of it? Will you please direct me to or
provide a summary of how much the city spends on the cost of water only - per tier, the cost of maintenance only, how
reserve funds are spent in detail, etc. It would also be important to see this same level of detail for any funds that are
offset by CMWD revenue to fully understand what our fees are paying for. It seems that a lot of the reporting available
and presented emphasizes trends and speculations of our region and the economy and could be more inclusive of actual
costs. It would be very good to put a breakdown of costs in the water fees brochure. Maybe show where the average
single family home water bill actually gets spent - on what and how much.
A lot of folks don't have the time or are not willing to do this much research. It would be great if meaningful information
was available with little effort, so it is easier for those who are engaged in city government and to encourage those who
would be more involved if it wasn't so difficult.
Thank you for your assistance,
Gretchen M. Ashton
(760) 271-6069
Mayor/ Board Member
City Council of Carlsbad
Carlsbad Municipal Water District (CMWD)
RE: Proposed Water and Sewer Rate Increases - Public Notice Process
This is an IMPORTANT and TIME SENSITIVE communication.
Dear Mayor Hall,
On October 25, 2011,1 sent an email communication to city council and the finance department via
council(5)carlsbadca.gov. I expressed concerns that the information in the public notice for water and sewer
increases did not provide all the information that might be presented to water users, i.e. that the city council is
also the board for CMWD. I also shared my discovery that information regarding the rate change was not
provided on the city website. In fact, the water fee increase brochure for the previous year was posted and the
Comprehensive Annual Financial Report (CAFR) was through fiscal year-ending June 2010. Since then I have
observed a few changes of updated information on the website. Current water and sewer fee increase brochure
is now available. The CAFR is not. In the website update regarding the public process for the water and sewer
fee increase, there is a reference to Proposition 218 and an announcement that it is a "majority protest" public
hearing. Upon further research about what is involved in this type of hearing, I discovered that there are
requirements for the information and language of the public notice sent out 45 days prior, and a required
additional public meeting. It appears city of Carlsbad has not met these requirements.
I have attached a brochure from the city of San Diego that includes required wording, a "Revised Notice of
Public Hearing" from the city of Vacaville, and the city of Carlsbad brochure for your quick reference.
See Brown Act Section 54954.6
The legislative body shall provide at least 45 days' public notice of the public hearing at which the legislative
body proposed to enact or increase the general tax or assessment. The legislative body shall provide notice for
public meeting at the same time and in the same document as the notice for public hearing, but the meeting shall
occur prior to the hearing.
The joint notice of both the public meeting and the public hearing required by subdivision (a) with respect to a
proposal for a new or increased assessment on real property shall be accomplished through a mailing, postage
prepaid, in the United States mail and shall be deemed given when so deposited. The public meeting .. .shall
take place no earlier than 10 days after the joint mailing pursuant to this subdivision. The public hearing shall
take place no earlier than seven days after the public meeting....A statement that a majority protest will cause
the assessment to be abandoned if the assessment act used to the levy the assessment so provides (see
Proposition 218).
The joint notice required shall include, but not be limited to ....
The estimated amount of the assessment...
A general description of the purpose or improvements... The phone number and address for more
information...
A statement that a majority protest will cause the assessment to be abandoned if the assessment act used to the
levy the assessment so provides...The dates, times, and location of the public meeting and hearing... AND
MORE
See Proposition 218
The drafters of Proposition 218 indicate that is was their intent to include most fees commonly collected on
monthly bills to property owners, such as those for water delivery, garbage service, sewer service, and storm
water management fees.
Sincerely,
Gretchen M. Ashton
1204 Abelia Avenue
Carlsbad, California 92011
tc.
•1 *''" V
Helga Stover :
I
crom: Ronald Kemp
jent: Friday, November 18, 2011 4:03 PM
To: dngbythec@roadrunner.com
Cc: Helga Stover
Subject: IMPORTANT INFORMATION REGARDING PUBLIC HEARING - WATER AND SEWER
FEES INCREASE
Good Afternoon Ms. Ashton,
I understand that you met with Helga Stover of the city's finance department to discuss the concerns that are outlined in
your e-mail below. I wanted to address your concern over the noticing aspect of the public hearing.
It is important to note that water and sewer rates are considered to be property related charges under California
Constitution Article XIIID (introduced by Proposition 218). This is different from a tax or assessment. As such, the city
and the water district must follow the procedures outlined in Article XIIID, Section 6. Government Code Section 54954.6
does not apply.
The City and CMWD are required to give customers 45 days' notice of a public hearing in which the Council and Board
Members will consider the rate increase. If a majority of the rate payers submit a written protest prior to the close of
the hearing, the rate increase cannot take effect. If the Council and Board adopt the rate increase it becomes
effective. Voter approval is not required for the increase as Section makes an exception for fees and charges for sewer,
water and refuse collection.
Dlease do not hesitate to contact me if you have further questions.
Ronald Kemp
Assistant City Attorney
CITY OF
CARLSBAD
'$& Office of the Gty Attorney
"id
Helga Stover
To: Kira Linberg
Subject: RE: Re: IMPORTANT INFORMATION REGARDING PUBLIC HEARING - WATER AND
SEWER FEES INCREASE
From: "gretchen ashton" <scubafit(o)gmail.com>
Date: Nov 18,2011 5:50 PM
Subject: Re: IMPORTANT INFORMATION REGARDING PUBLIC HEARING - WATER AND SEWER
FEES INCREASE
To: "Ronald Kemp" <Ronald.Kemp(S),carlsbadca.gov>
Dear Mr. Kemp,
I know you are pressed on the power plant preparation and appreciate your looking into this matter for me.
Although the Brown Act and Proposition 218 do not specifically state the same semantics for fee, assessment or
rate, The Brown Act is the only reference we have for how a majority protest hearing is to be conducted and
Proposition 218 is clearly drafted as a supplement to, not a replacement for other laws . Proposition 218 is clear
that water fees require a majority protest hearing. How can the city legally or in good conscience conduct a
majority protest hearing without informing property owners of the type and process of the hearing. The city has
set a standard of adhering to the Brown Act for other hearings and processes why not this one. Other cities have
demonstrated the proper announcement of a majority protest hearing as I provided in the brochure from San
Diego. I will discuss this with council directly. It was explained to me that the city always leans toward
openness and transparency with the public, but this is not the appearance in this matter.
Thank you for your time and I hope you will review Proposition 218 and the Brown Act again from this
practical perspective.
Best Regards,
Gretchen M. Ashton
te.
Helga Stover
To: Kira Linberg
Subject: RE: Majority Protest Process for the City of Carlsbad Proposed Water Rate Increase
Original Message
From: dngbythec@roadrunner.com [mailto:dngbythec@roadrunner.cbm]
Sent: Monday, November 28, 201112:18 PM
To: Council Internet Email
Cc: Attorney
Subject: Majority Protest Process for the City of Carlsbad Proposed Water Rate Increase
Dear Mayor, Council Members / Board CMWD,
To keep you informed, I have contacted the City Clerk's office to confirm information found on the city website and
inquire about the specific instructions for the majority protest process.
Whether you decide to inform,or NOT inform, residents that the public hearing for the proposed water and sewer rate
increase is a majority protest hearing, we still need to know how, when and in what form (email?) to file a protest.
Interestingly, when the website was updated, after the fact, staff felt it necessary to identify the hearing as "majority
protest" according to Proposition 218. However, they did not include this information in the mailer to residents. As
recent as 2009, the City of Carlsbad did include the majority protest information and instructions in the notice to
residents. It is my opinion, that the RIGHT thing to do is to reschedule this hearing and give proper notice to residents.
The City Clerk's office is checking the procedure with the City Attorney and will let me know by the end of the day.
Gretchen M. Ashton
(760) 271-6069
Gretchen M. Ashton
1204 Abelia Avenue
Carlsbad, California 92011
December 1,2011
City of Carlsbad and Carlsbad Municipal Water District (CMWD)
1635 Faraday Avenue
Carlsbad, CA 92011
Subject: Protest of Proposed Water and Sewer Fee Increases
Reference: Notice of Public Hearing of December 6,2011
Dear Mayor Hall, Council Members and CMWD Board Members,
This written letter of protest is submitted according to my rights under Article 13d of the California
Constitution and Proposition 218. I am protesting the proposed maximum water and sewer fee
increases that, if approved, would become effective January 1,2012 and January 1, 2013. This protest
includes, but is not limited to the following concerns:
1) The majority protest proceedings have not been properly announced or followed for this public
hearing. I am requesting that the hearing be rescheduled with proper notice and procedure. I
will also note that the same lack of procedure occurred for the 2010 public hearing approving
utility fee increases. As recent as 2009, the majority protest procedure was properly performed
as evidenced in both the agenda bill and mailing to residents for that year.
2) Current, complete and audited financial information regarding water and sewer fees is not yet
available for public review; i.e., the Comprehensive Annual Financial Report (CAFR) for fiscal
year-end June 30,2011. The finance department allowed me to view a cash flow sheet, but I
was not able to receive a copy of it and I was informed "it is a working document".
3) The monthly update reports done in June 2011 and October 2011, which include year-to-date
revenue reporting for enterprise funds, indicates water revenue is up by a net 9%, yet maximum
increases in water fees are still being proposed. The report attributes this to a combination of
the fee increase effective January 1,2011 and an increase in water usage.
4) The October 2011 year-to-date report reveals that more than half of the water budget is for
items other than purchasing water. While some of these additional costs are clearly associated
with provided the actual service, it appears it is prudent to evaluate compliance with
Proposition 218 and Article 13d regarding the "reasonable and actual costs of providing the
service", including expenses relating to the Marbella lawsuit and reserve accounts. This is
especially important when a comparison of the five-year rate projections provided in the Cost of
Services Study by the FCS Group reveals that fee increases have been implemented every year
at the maximum and are proposed again at the maximum.
5) The Cost of Services Study in determining the current and proposed city water rates
recommended a tiered fee system. In the study, it appears that certain assumptions were made
regarding single-family discretionary water use that deviates from encouraging water
conservation and actually penalizes households with more family members. This is then
reinforced by the arbitrary decision that the Tier One "break point" of 12 units should be based
on the one-half (51%) of single family homes with the lowest water usage, which represents
only 21% of the total water used by single family homes. The entire report and basis for all
utility fees needs to be further evaluated. Especially since census demographics data that was
available at the time the study was conducted provides at least some data that supersedes such
an assumption and usage information from the positive draught response is now available to
assist in analysis. The COSS cost us over $106,000.00.
6) The San Diego County Water Authority (SDCWA) acquires considerably less than 50% of its total
water purchases from the Metropolitan Water District (MWD), but "passes through" 55% of its
fees as MWD costs to CMWD. Communication and information provided to residents, is further
complicated when increases from these agencies are cited as if nothing can be done to prevent
water fee increases.
I appreciate your consideration of this protest as allowed by law.
Sincerely,
Gretchen M. Ashton
(760) 271-6069
Majority Protest Public Hearing Water and Sewer Rate IncreasesDecember 6, 2011
CalendarJune 2011: Budget AdoptionSeptember 2011: Update Financial ForecastOctober 2011: Public Notice mailedDecember 6: Hold Public HearingSet rates –2 yearsJanuary 1: Effective Dates(2012 & 2013)
June 20115 Year ForecastWater Rates:January 1, 2012 – increase 12.5%January 1, 2103 – increase 12.0%Sewer Rates:January 1, 2102 – increase 6.5%January 1, 2013 – increase 6.3%
September 20115 Year ForecastWater Rates:January 1, 2012 – increase 10.0%January 1, 2103 – increase 10.0.%Sewer Rates:January 1, 2102 – increase 6.5%January 1, 2013 – increase 6.0%
Public Noticing•Mailed to all property owners and customers affected by the proposed increase•Notice posted on city website•Prop. 218 process posted on city website•Q&A posted on city website
Agenda•Water Purchases and Sales•San Diego County Water Authority Rates and Charges•Carlsbad/CMWD Proposed Rates•Water•Sewer•Protest Letters•Open Public Hearing •CMWD Board Action•Carlsbad City Council Action6
Water Enterprise
Potable Water Purchased (Acre Feet)10,00012,00014,00016,00018,00020,00022,00024,0002007 2008 2009 2010 2011 2012 (est)Purchases
•Water sales have decreased by 38% since 2007San Diego County Water AuthorityDecreasing Water Sales - 100,000 200,000 300,000 400,000 500,000 600,000 700,0002007 2008 2009 2010 2011Acre FeetHistorical Water Sales VolumesAGM&I491,9249661,618619,407556,592410,320(est.)
Potable Water –Cost per Acre FootPaid to San Diego County Water Authority(Fixed + Commodity)
•Decreasing sales volumes•Planned debt service payments•Increasing cost of water supplies•Increasing water supply transportation costsKey Rate Drivers11
San Diego County Water Authorityhttp://www.sdcwa.org4677 Overland AvenueSan Diego, CA 921231‐858‐522‐6600Metropolitan Water Districthttp://www.mwdh2o.comMailing address:P.O. Box 54153Los Angeles, CA 90054‐0153Street address:700 North Alameda StreetLos Angeles, CA 90012‐29441‐213‐217‐6000
Potable Water Supply•Carlsbad currently purchases 100% of its potable water supply from the San Diego County Water Authority.•61% of annual operating expense
Where does the money go?$ 3,449,268 , 11%$4,826,845 , 15%$ 4,193,000 , 13%$ 19,870,511 , 61%PersonnelM&OReplacementWater Purchases
5 Year Forecast ‐Revised•Updated with actual revenues and expenditures through 6/30/2011•Revenue from water sales was higher than anticipated•Future sales increased based on revised actual sales for FY2011•Reduction in proposed rate increase
Water Fund•Public Notice mailed in October 2011–Maximum Increase•January 1, 2012 = 10.0% (down from 12.5%)•January 1, 2013 = 10.0% (down from 12.0%)•Pay for Maintenance and Operations•Pay for replacement of infrastructure•Fund Emergency reserve ‐30% (110 days) of annual operating expense by 201517
Potable Water Operating FundProjected Reserve BalanceAt 6/30/2012 $2.7 Million =8% (estimated)At 6/30/2015 $12.0 Million = 30% (estimated)
Proposed Water Rate IncreaseDelivery Charge ‐Residential•Current Rate ‐$18.00 per month•1/1/2012 rate ‐$19.80 per month•1/1/2013 rate ‐$21.78 per monthCommodity Charge – Residential (*)•Current Rate ‐$2.70 per unit•1/1/2012 rate ‐$2.97 per unit•1/1/2013 rate ‐$3.27 per unit(*) First 12 units per month
Proposed Water Rate IncreaseCurrentJan. 1 2012Jan 1. 2013Non‐residential3.12$ 3.43$ 3.77$ Agricultural Rates3.12$ 3.43$ 3.77$ Irrigation Rate3.50$ 3.85$ 4.24$ Recycled Water2.97$ 3.27$ 3.60$ Proposed Rate Increases
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Comparison with other agencies(monthly charge using 12 units of water)