HomeMy WebLinkAbout1997-06-10; Municipal Water District; 367; Refund from CWA & Metropolitan Water DistrictAB# 862 TITLE:
APPROVAL OF DISTRIBUTION OF MTG. 6-l O-97 REFUND FROM CWA AND
DEPT. CMWD METROPOLITAN WATER DISTRICT
Pii~ (3 1 f- CARLSBh MUNICIPAL WATER DISTRZT - AGENDA BIL
RECOMMENDED ACTION
Adopt Resolution No. approving disbursement of funds received as a refund from the 976
San Diego County Water Authority.
ITEM EXPLANATION
The Metropolitan Water District (MWD) Board of Directors voted on January 14, 1997, to refund to
its member agencies $70 million in excess revenue collections from fiscal year 199596. The San
Diego County Water Authority’s share of this refund was $18,975,613. MWD provided several
options for agencies to receive the refund. These options included cash, credits to water bills, or a
flexible credit account. The funds were received by the Authority on January 30, 1997.
Authority staff recommended to the Authority Board that it adopt a resolution authorizing a member
agency pass-through of the funds as a cash refund. Authority member agency shares of the refund
were determined using a methodology similar to that used by MWD which reflected each agency’s
proportional contribution to total water sales revenue, readiness-to-serve (RTS) charges, and
standby charges for 199596. Carlsbad Municipal Water Districts share of this refund is
$688,340.96.
There are three options for disbursing or using this refund:
1.
2.
3.
The first option would be to credit each of the District’s 18,100 customer accounts. The credit
would be per unit of water (748 gallons) and would be calculated by dividing the total refund
amount of $688340.96 by the total amount of water used in the District during the billing month
immediately prior to the credit being given. This results in a credit amount per unit which is
estimated to be from $1 .I0 to $1.20 depending upon the actual amount of total water usage in
the District. The more water used District wide, the less the credit per unit amount and vice
versa. The credit amount per unit would then be multiplied by the customers water usage
during the previous month and reflected as a credit on the customers utility bill.
The second option would be to deposit all of the money into the Districts Capital Replacement
Fund. It could then be used to offset some replacement construction costs such as the present
lining and covering of Maerkle Reservoir or any other replacement project requiring the use of
replacement funds. (Because this money came from an existing customer base, the money
cannot be used for m capital expansion projects. Those types of projects are funded by the
connection fee imposed on new water customers.)
A third option would be to deposit all of the money into the District’s Rate Stabilization Account
to be used for offsetting future water rate increases from the Metropolitan Water District and/or
the County Water Authority. However, the money being refunded was collected in 199596
fiscal year and the beneficiaries of the refund under this option would include future water
customers. Additionally, offsetting future rate increases one year will cause a larger increase
the following year in order for customers to “catch-up” to the new rates. The Rate Stabilization
Fund should be used to offset only one time”spikes” in the rates.
Page 2 of Agenda Bill ha &y
This agenda item was presented to the Water Commission at its regular meeting of May 21, 1997.
. Staffs recommendation to the Commission was to return the money to the customer, as per Option
#I. The Commission was concerned that administrative difficulties and resultant costs for Option #I
would be too great and therefore, is recommending the Board approve depositing the money into
the Capital Replacement Fund (Option #2). However, staff believes that the steps necessary to
refund the money to the customer will not result in extraordinary administrative costs.
Therefore, staff is still recommending the return of the entire amount to the customer through the
credit per unit option (Option #I). Returning the funds directly back to the water customer follows
the original intent of both the County Water Authority and the Metropolitan Water District when
voting to send the money back to the retail agencies.
FISCAL IMPACT
The Carlsbad Municipal Water Districts share has been received from the Water Authority. Option
#I would return the total $688840.96 to the water customer. Option #2 would result in the deposit
of the entire $688340.96 refund into the District’s Capital Replacement Account. Option #I8 would
result in the deposit of the entire $688340.96 refund into the District’s Rate Stabilization Account.
EXHIBITS:
1. Resolution No. 7% .
2. Memorandum from the San Diego County Water Authority dated February 14, 1997.
.
To: Member Agencies
RE: Distribution of Excess Revenues from MWD.
Please find enclosed a check for the portion of your refund from the Metropolitan Water
District. If you have any questions regarding this issue, please contact me at (619)
682-4244.
Sincerely,
Cash Management Analyst Assistant
MEMBER AGENCIES
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RESOLUTION NO. 976
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CARLSBAD MUNICIPAL WATER DISTRICT APPROVING
THE DISTRIBUTION OF REFUND FROM CWA AND
METROPOLITAN WATER DISTRICT
WHEREAS, the Metropolitan Water District Board of Directors voted to refund to
its member agencies $70 million dollars in excess revenue collections from fiscal year 1995
96; and,
WHEREAS, the San Diego County Water Authority’s share of this excess revenue
collections was $18,975,6 13; and,
WHEREAS, the San Diego County Water Authority Board of Directors passed a
resolution disbursing those excess revenue collections to its member agencies using a
methodology which reflected water sales revenue, readiness-to-serve (RTS j charges and
stand-by charges for fiscal year 1995-96; and,
WHEREAS, the Carlsbad Municipal Water District’s share of these excess revenue
collections amount to $688,340.96; and,
WHEREAS, the Carlsbad Municipal Water District Board of Directors has reviewed
several options on the disbursement of these excess revenue collections;
NOW, THEREFORE BE IT RESOLVED that the Board of Directors of the
Carlsbad Municipal Water District hereby approves the disbursement of the District’s share
of those excess revenue collections in accordance with Option #l whereby the money will be
returned to the customers of the District as a credit on each customer’s utility bill.
Ill
Ill
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PASSED, APPROVED AND ADOPTED at the regular meeting of the Carlsbad
Municipal Water District held on the 10th day of June , 1997, by the following
vote, to wit:
AYES: Board Members Lewis, Finnila, Kulchin, and Hall
NOES: None
ABSENT: Board Member Nygaard
ATTEST:
ojId.cLk 5i?Gzm * ‘J
ALETHA L. RAUTENKRANZ, Secretary \
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