HomeMy WebLinkAbout1999-04-13; Municipal Water District; 440; Public Hearing to Adjust Water Rates. bJk
CARLSBiD MUNICIPAL WATER DISTtiCT -AGENDA BILL/b
AB# 440
MTG. w13199
DEPT. CMWD
TITLE- --
APPROPRIATIONS OF WATER OPERATIONS UNRESERVED
FUNDS AND SETTING OF A PUBLIC HEARING TO ADJUST
WATER RATES
1 DEPT. I!?!! jZ5ij~
CITY MGR-
RECOMMENDED ACTION:
Adopt Resolution No. /oq8 transferring funds from the Water Operations Fund
Balance to Water Capital Replacement Fund, appropriating funds for Local Water
Resources projects and requesting the Board to set a Public Hearing for May 4, 1999 to
consider adjusting water rates.
ITEM EXPLANATION:
The Local Water Resource Plan, previously presented, reviews potential local water
resource projects that would increase Carlsbad’s water reliability. To further explore the
feasibility of those projects, this item is to transfer funds from the Water Operations
Fund Balance to help finance the recommended development of:
J Phase II of the Recycled Water Program,
J Potential for developing Seawater Desalination, and
J Potential for a cooperative groundwater program in the Mission Basin of the
San Luis Rey River.
Staff has reviewed the status of the Water Operations Fund Balance and the present
water rates. This review has resulted in a determination that the present fund balance
exceeds the level of reserves that was recommended in the District’s Rate Study
approved by the Board in 1996.
The excess funds are a result of revenue being generated by the water commodity rates
which were set to provide for funding of capital projects construction, the largest being
Phase II of the Recycled Water Program. These projects were anticipated to be under
construction in fiscal year 199596. Because these projects have not yet begun,
expenditure of the funds has not yet occurred resulting in a fund balance that exceeds
the adopted level of required reserves stated in the previously mentioned Rate Study.-
To deal with future setting of rates, staff has developed a financial “water rate model” to
better forecast future operational expenses and establish subsequent revenue
requirements. With improved water rate forecasting and with the current full-funding of the
adopted level of annual operations reserves, staff is also recommending adjustments to
the water commodity rates as follows:
l Reducing existing water commodity rate from $1.70 to $1.60 per unit of water or 748
gallons; e.g., an average residential customer in the CMWD service area, using 16
units of water, would realize a decrease in their monthly water charge from $36.45 to
$34.85.
l Reducing the existing conservation rate from $1.52 to $1.44 (90% of commodity rate).
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Page 2 of Agenda Bilr ,do. +w
It is recommended that the Board set a Public Hearing for May 4, 1999, to take public input
regarding the proposed rate adjustments.
FISCAL IMPACT:
There is currently an unreserved amount of $8 million in the water operations fund which is
available to fund water resource development projects. Staff recommends that these funds be
transferred to the Water Capital Replacement fund in the Capital Improvement Program (CIP)
and that the 1998-99 CIP be amended as follows:
l Appropriate $600,000 for the 10% Design Report for Phase II of the Recycled Water
Program,
l Designate $900,000 (at $300,000 per year, starting in 1999-00) for the Seawater
Desalination and Mission Basin Groundwater programs. These programs consist of
funding for engineering studies, preliminary designs and environmental reports only, at this
time,
l Designate $6.5 million towards other water resource development projects in year 2000-
2001. Staff will return next year with recommendations on the individual projects for these
funds.
EXHIBITS:
1. Resolution No. /O qg transferring funds from the Water Operations Fund Balance
to Water Capital Replacement Fund, appropriating funds for Local Water Resources
projects and setting the date for the Public Hearing to adjust water rates.
R:\CMWD\Word\Word - 99iAGENDAElI.DOC
RESOLUTION NO. 1048
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CARLSBAD MUNICIPAL WATER DISTRICT, CARLSBAD
CALIFORNIA, TRANSFERRING FUNDS FROM THE WATER
OPERATION FUND BALANCE TO THE WATER CAPITAL
REPLACEMENT FUND, APPROPRIATING FUNDS FOR LOCAL
WATER RESOURCES PROJECTS AND SETTING THE DATE
FOR THE PUBLIC HEARING
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WHEREAS, a review of the status of the Water Operations Fund Balance shows the
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fund exceeds the level of reserves recommended in the 1996 Rate Study; and
WHEREAS, the unreserved funds are a result of revenue generated by water
commodity rates set to provide funding of capital projectswhich have not yet begun and
therefore fund expenditures have not yet occurred; and
WHEREAS, a financial “water rate model” has been developed to better project
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expenditures and revenues which has resulted in water commodity rate adjustments; and
17 WHEREAS, the existing water commodity rate of $1.70 per unit is recommended to
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be reduced to $1.60 per unit (748 gallons), the existing water conservation rate of $1.52 per
unit is recommended to be reduced to $1.44 per unit and the existing recycled water rate of
$1.62 per unit is recommended to be reduced to $1.52 per unit; and
WHEREAS, the Public Hearing is required to take public input regarding the
proposed water rate adjustments.
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NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad
Municipal Water District of Carlsbad, California as follows:
1. That the above recitations are true and correct.
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2.
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That staff be directed to transfer the unreserved funds fi-om Water Operations
Fund to the Water Capital Replacement Fund and that the 1998-99 CIP be
amended as follows:
Appropriate $600,000 for the 10% Design Report for Phase II of the
Recycled Water Program,
Designate $900,000 (at $300,000 per year, starting in 1999-00) for the
Seawater Desalination and Mission Basin Groundwater programs.
Designate $6.5 million towards other water resource development projects in
year 2000-2001.
I That a Public Hearing is set for May 4, 1999 to take public input regarding
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the proposed water rate adjustments.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Board of
Directors of the Carlsbad Municipal Water District held on the 13th day of
April 1999, by the following vote:
AYES: Board Members Lewis, Hall, Finnila, Nygaard and Kulchin
(SEW