HomeMy WebLinkAbout1992-09-15; Municipal Water District; 190; Fixing Rates for Water Supplied by CMWD.
. . CARLSBAD V-‘NICIPAL WATER DISTRICT -
AB# )=I0 TITLE:
’ MTG. g/15/92 FIXING RATES FOR WATER SUPPLIED BY
CARLSBAD MUNICIPAL WATER DISTRICT DEPT. (‘rMWn
RECOMMENDED ACTION:
Hold a public hearing and adopt Resolution No. 2 15 fixing rates for water supplied by
the Carlsbad Municipal Water District, and adopt Resolution No. 8 16 appropriating
funds from the Rate Stabilization Fund to offset the loss of revenue due to the
postponement of the rate increase approval.
ITEM EXPLANATION:
Rate Increase
The base price of water supplied by the Carlsbad Municipal Water District (CMWD) is
currently $1.15 per unit (748 gallons). There are a number of factors that go into the
development of the retail water rates.
The most significant portion of CMWD’s retail water rate is the wholesale price of water
charged to the District by the San Diego County Water Authority (CWA). Presently,
CWA’s charges, which include the costs incurred by the Metropolitan Water District
(MWD), comprise 65% of the current retail rate. The second most significant portion of
the water rate is that which funds District operations. These expenses include personnel
and other operating costs associated with the distribution of the water supply. These
costs account for approximately 23% of the water rate. The remaining 13% of the rate
funds the District’s depreciation of the water system.
Retail Current Cost
Rate Components Per Unit
Proposed Cost
Per Unit
%
Increase
MWD Costs $0.60 $0.74 18.9
CWA Costs 0.14 0.14 0.0
District Operations 0.26 0.26 0.0
Depreciation 0.15 0.15 0.0
TOTAL $1.15 $1.29 12.2
An increase in one of the three components of the retail rate is being recommended: that
of MWD’s costs. MWD has increased its rate from $261 per acre foot to $322 per acre
foot, effective July 1, 1992. This represents a $0.14 per unit increase in treated water
costs. Thus, staff recommends that the base water rate be increased to $1.29 to cover
the increased costs from MWD.
’ Page 2 of Agenda Bill # 17 0
Chronoloay of Events
As a result of the increase from MWD and CWA, the Water Commission met on May 27,
1992, and recommended at that time to go with a flat rate of $1.29 per unit for all
customer classifications. At the July 28, 1992, Board of Directors meeting, staff
presented three rate structure options: 1) an inclining block rate, 2) a flat rate, and 3) a
flat rate with a lifeline rate.
The Board then referred rate structure revisions back to the Water Commission, asking
the Commissioners to consider a Conservation Rate and a Base Rate. The Board also
requested including a means of triggering implementation of an inclining block rate upon
declaration of certain conservation stages.
At present, the District’s rate structure includes a “lifeline” rate of $0.90 per unit for all
single-family residential customers for the first seven units of consumption, regardless of
total usage. The original purpose of the “lifeline” was to reward customers who conserve.
As it is now, the lifeline benefits all single-family customers, not restricting it to those who
consume less water. In order to alleviate this contradiction, the Water Commission is
recommending that only those customers whose usage is seven units or less per month
be rewarded with the “lifeline” rate which, more appropriately, has been renamed a
“conservation” rate by the Board of Directors.
The Water Commission met on August 5, 1992, and is recommending a Conservation
Rate of $1 .15 per unit for all single-family residential customers who use seven units of
water or less per month. These customers would pay $1.15 per unit for their entire
consumption. Customers whose usage is over seven units would not qualify for the
Conservation Rate. The base rate, which must subsidize the Conservation Rate, would
have to be $1.30. The additional one cent per unit (from the proposed $1.29 flat rate) will
make up the subsidy of the Conservation Rate.
Implementation of lnclinina Block Rate
CMWD presently charges its customers for water through an inclining block rate. The
inclining block rate was established during the 1991 calendar year to encourage water
conservation during the drought. The present inclining block rate structure is as follows:
1 though 7 units $O.gO/unit (single-family residential only)
Up to allocation* $1 .lS/unit
l-20% over allocation* $1.43/unit
More than 20% over allocation* $1.73/unit
*Allocation is based on a percentage of conservation required from the base year usage
(for example, during Stage 4, when 20% conservation is required, the allocation is 20%
less than the base year usage, for each customer).
Presently, CMWD is in a Stage 1 Water Watch, which asks for a voluntary 10%
Page 3 of Agenda Bill # \9 D
conservation effort. MWD is currently not charging a penalty rate through its Incremental
Interruption and Conservation Plan (IICP) program and, as a result, CWA will not be
charging any penalties for exceeding the base year allocations.
The IICP adopted by MWD on November 20, 1990, established staged monthly
conservation targets of water consumption reductions. CMWD adopted Ordinance No.
35 on March 5, 1991, which corresponds to the various stages outlined in the IICP.
Those stages are:
1 - Water Watch - Voluntary Conservation
2 - Water Alert - 10% Mandatory Conservation
3 - Water Warning - 15% Mandatory Conservation
4 - Water Warning - 20% Mandatory Conservation
5 - Water Warning - 30% Mandatory Conservation
6 - Water Warning - 40% Mandatory Conservation
The percentage reductions are based on the fiscal year July 1989 through June 1990.
The Water Commission has recommended that the water rate structure be implemented
in the following manner.
Stages 1 and 2 Flat Rate with Conservation Rate
Stages 3 through 6 Inclining Block Rate
The inclining block rate recommended would include the following blocks and prices.
1-7 units (SFD only) $l.l5/unit
Up to Allocation $1.30/unit
l-20% over Allocation $1.50/unit
More than 20% over Allocation $1.75/unit
Although during a Stage 2, the District is under MWD’s IICP and is assessed penalties
for exceeding its allocation, the Water Commission chose not to implement the inclining
block rate structure at that point. After surveying other water agencies with similar pricing
structures, staff found that implementation of an inclining block rate is generally done at
Stage 3.
The base year of 1989-90 for determining the allocation would still be used, pending notification from MWD or CWA to the contrary. All customer classifications will be billed
in this manner.
FISCAL IMPACT
The District currently balances its estimated revenues with anticipated expenses. With
the increase from CWA, the District must increase the retail water rates by a like amount
or an annual shortfall would exist of approximately $1,037,000 for FY 1992-93. This is
Page 4 of Agenda Bill # I’? 0
based on an additional $0.14 per unit times approximately 7.4 million units of water in
projected purchases. These additional costs ,are being assessed by CWA for their
budgetary needs.
As a result of this item being referred back to the Water Commission, the water rate
increase was not initiated as of July 15, 1992. However, the District is paying a higher
rate from CWA as of July 1, 1992. Staff is estimating a shortfall of approximately
$170,000 for the months of July and August, assuming a similar level of water
consumption as experienced during 1991. In order to compensate for this, the Water
Commission has recommended that the Rate Stabilization Fund be utilized to offset the
shortfall. The balance in the Rate Stabilization Fund as of June 30, 1992, was $502,000;
thus, there are sufficient funds to cover the estimated shortfall.
1. Resolution No. 8 1 5
2. Resolution No. 8 I b
3. Minutes of the Water Commission Meeting, August 5, 1992.
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'
RESOLUTION NO. 815
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE CARLSBAD MUNICIPAL WATER DISTRICT
FIXING RATES OF WATER SUPPLIED BY THE
CARLSBAD MUNICIPAL WATER DISTRICT
~ WHEREAS, the Metropolitan Water District (MWD) has increased the wholesale
cost of water by 18.9% for the 1992-93 fiscal year to cover its expenses; and
WHEREAS, the Carlsbad Municipal Water District will also require an increase in
its component of the retail water rate to cover the cost of the increase from the San Diego
~ County Water Authority for the 1992-93 fiscal year; and
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District has
determined that a revision of the charges for water delivery is necessary; and
WHEREAS, California continues to experience severe drought conditions; and
WHEREAS, an inclining block rate is included as one of the Best Management
Practices developed by the State Water Conservation Coalition.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE CARLSBAD
MUNICIPAL WATER DISTRICT HEREBY RESOLVES THAT:
1. The existing rate structure as described in Resolution No. 766 is amended
to read as follows.
2. Effective September 15, 1992, the base rate charged for all water supplied
by the District shall be set at $1.30 per unit.
3. A Conservation Rate of $1.15 per unit will be charged to all single-family
residential customers whose monthly consumption is seven units or less.
4. An inclining block rate structure will be implemented upon declaration of
Incremental Interruption and Conservation Plan (IICP) phases as follows:
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Stage 3 15% Conservation Reduction
Stage 4 20% Conservation Reduction
Stage 5 30% Conservation Reduction
Stage 6 40% Conservation Reduction
5. Monthly allocations for the above stages and stages 1 and 2 for all existing 1
water user classifications, including residential, will be established by the General
Manager using actual consumption during the base year of 1989-90 (July 1989 through
June 1990) and reducing that amount by the conservation target for the IICP phase in
effect.
6. Monthly allocations for new customers will be based on an average monthly
usage for comparable existing developments or structures. If adequate comparable uses 1
do not exist, the allocation will be determined on a case-by-case basis by the District’s
General Manager.
7. Water consumed by all customers up to their monthly allocation shall be
billed at the Block 1 rate (current retail), with the exception of single-family residential
customers (SFR) whose usage is seven units or less per month, for which they will be
billed at the Conservation Rate. For those customers who exceed their monthly
allocation, increasingly higher block rates will be charged. Based on the percentage by
which the customer exceeds his/her monthly allocation, the additional block rates will be
~ as follows:
Block 1 Up to Allocation $1.30
Block 2 l-20% Over Allocation $1.50
Block 3 More than 20% Over Allocation $1.75
The additional blocks shall be charged cumulatively. For example, if a customer exceeds
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his/her allocation by 30%, the water bill will include charges in all three blocks, not just
the Block 3 rate.
8. All water used from a fire hydrant through a temporary meter will be charged
at the Block 3 water rate.
9. If the Authority imposes another phase of its IICP, the District will respond
by requiring that its customers save the corresponding percentage of water for that
phase, which will then be the basis for the block rate system. The water conservation
target required by each phase of the IICP is as follows:
Phase I (Voluntary) 5% Conservation Target
Phase II 10% ” ”
Phase Ill 15% H *
Phase IV 20% ” ”
Phase V 30% ” ”
Phase VI 40% ” ”
Emergency 50% la ”
If a consewation percentage is declared that does not match any of the phases, the
District’s Board of Directors will set a conservation target as the basis for the inclining
block rate system.
10. The General Manager or his designee, upon receipt of a completed
application form demonstrating a clear need, may approve an additional water allowance
for special circumstances including, but not limited to, the following situations:
a. Change in ownership or occupancy of a residence that results in an
increase of more than three persons. Additional allocations of three units
per month will be granted for every added permanent resident.
b. Water demands for medical equipment in the home or to accommodate a
medical condition.
C. Unusual needs or special hardships.
d. The use of reclaimed water.
Installation of ornamental fountains or swimming pools, and the maintenance of new
landscaping do not qualify for exemptions.
11. Single-family residential customers whose water consumption is currently
at or below the average residential demand minus the current conservation target will not
be required to reduce further.
12. All customers, except those referenced in section 11, must reduce their
current monthly water demands at a level equivalent to monthly usage during fiscal year
1989-90 less the current-conservation target as defined in section 9.
If usage exceeds the aforementioned parameter, a written notification shall be sent.
If repeated in the second consecutive month, an excess user charge equivalent to $50.00
or 100% of the water usage for that month will be assessed, whichever is greater. For
the third consecutive violation, a flow restricting device may be installed in the customer’s
water meter. This action shall be taken to assure compliance with this Resolution
regarding the conservation of water.
Such action shall be taken only after a hearing held by the General Manager or
designee, where the customer has an opportunity to respond to the District’s information
or evidence that the customer has repeatedly violated provisions of this resolution
regarding the conservation of water, and that such action is reasonably necessary to
assure compliance with’this resolution. The targets for all structures constructed since
1989-90 will be set as described in section 6.
1 As determined by the General Manager, any such restricted service may be
2 restored upon application of the customer made not less than 48 hours after the
3 implementation of the action restricting service and only upon showing by the customer
4 that the customer is ready, willing and able to comply with the provisions of this
5 resolution. Prior to any restoration of service, the customer shall pay all District and City
6 of Carlsbad (City) charges for any restriction of service and restoration as provided for
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8 in the rules governing water service for the District and City.
9 Any willful tampering with or removal of any flow restriction device shall result in
10 termination of service for a period to be determined by the General Manager
11 13. Any customer against whom a penalty is levied pursuant to this section shall
12 have a right to an appeal, in the first instance to the District’s General Manager or
13 designee with the right of-appeal to the District’s Water Commission, on the merits of the
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15 alleged violation, upon written request of the customer to the District within fifteen days
16 of the date of notification of violation.
17 14. Any additional revenue generated by the inclining block rate structure or the
18 conservation rebates after deducting the penalty charges imposed by the Authority shall
lg , be equally appropriated between a rate stabilization fund and reserve fund.
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15. The effective date of this resolution shall be the beginning of the meter
reading cycle in September (September 15, 1992).
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PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad
Municipal Water District held on the 15th day of September, 1992, by the following vote,
to wit:
AYES: Board Members Lewis, Kulchin, Larson, Stanton, Nygaard
NOES: None
ABSENT: None
ATTEST:
ALETHA L. RA
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RESOLUTION NO. 816
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE CARLSBAD MUNICIPAL WATER DISTRICT
APPROPRIATING FUNDS FROM THE RATE STABILIZATION FUND
TO OFFSET LOSS OF REVENUE FROM RATE INCREASE
WHEREAS, the San Diego County Water Authority (CWA) has increased its rates
to the Carlsbad Municipal Water District by 15.9% effective July 1, 1992; and
WHEREAS, the Board of Directors of the Carlsbad Municipal Water District
(District) referred rate structure revisions back to the Water Commission to consider
changes; and
WHEREAS, the approval of the rate increase originally set for implementation on
July 15, 1992, was delayed as a result of the Board’s decision to refer changes back to
the Water Commission: and
WHEREAS, a shortfall of approximately $270,000 for the months of July, August
and half of September will exist due to the period during which rates were not increased
but the District was billed at the higher rate from CWA; and
WHEREAS a rate stabilization fund was established on December 10,1991, by the
Board with penalty monies obtained from the previous inclining block rate structure to be
used to offset rate increases; and
WHEREAS, the rate stabilization fund has a balance of $502,000 as of June 30,
1992, and therefore has enough to cover the estimated $270,000 shortfall.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE CARLSBAD
MUNICIPAL WATER DISTRICT HEREBY RESOLVES THAT:
1. The above recitations are true and correct.
2. Funds in the amount of $270,000 from the rate stabilization fund are hereby
appropriated to the Purchased Water Account No. 501-820-631 O-2661.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad
Municipal Water District held on the 15th day of September, 1992, by the following vote,
to wit:
AYES: Board Members Lewis, Kulchin, Larson, Stanton, Nygaard
NOES: None
ABSENT: None
Al-l-EST:
k! 6zLALiT.~ML-
ALETHA L. RAUTENKRANZ, Secreta
MINUTIX
MEETING OF: WATER COMMISSION
DATE OF MEETING: August 5, 1992 (Special Meeting)
TIME OF MEETING: 2:00 p.m.
PLACE OF MEETING: 5950 El Camino Real
CALL TO ORDER:
Chairman Henley called the Meeting to order at 2:00 p.m.
ROLL CALL:
Present: Commissioners Henley, Louis, Maerkle and Melideo.
Absent: None.
PLEDGE OF ALLEGIANCE was led by Chairman Henley.
PUBLIC COMMENT:
Jane Abamine stated that she felt that when Presentations are made at a Commission Meeting, that a
Member of the Board of Directors should be present to make such awards.
NEW BUSINESS:
1. Consideration of Revising Water Rate Structure and Amendinq Ordinance No. 35
Jeanne Flack gave the staff report, using transparencies to show alternatives available for a
Conservation/Lifeline Rate and a Comparison of alternatives. She distributed copies of
Ordinance No. 35 to the Commissioners for their perusal.
Ms. Flack stated that at the last Board Meeting, action was delayed on changing the water
rates, with the Board returning the item to staff with the direction to return this to the Water
Commission for development of a rate conservation rate and a base rate; to investigate
revising the Ordinance to show an inclining block rate to be triggered by certain water stages:
to see how the use of the Rate Stabilization Fund can be used to offset some of the rate
increases; and the use of that Fund to offset the loss of revenue caused by the delay in this
rate increase.
Ms. Flack stated that the Board had indicated they preferred the Conservation Rate title rather
than Lifeline Rate, as that would encourage customers to conserve water.
ACTION: On motion by Commissioner Maerkle, the Commission recommended a
Conservation Rate of $1.15, and a fiat rate of $1.30 for Stages I and II. At
Stage Ill, a reclining block rate would go into effect; with 1 - 20 percent over
base year to be billed at $1.50, and any amount over 20 percent to be billed
at $1.75
AYES- -* Henley, Louis, Maerkle and Melideo
August 5,1992 WATER COMMISSION Page 2
ACTION: By consensus, the Commission recommended that the Rate Stabilization Fund
not be used to offset rate increases. .
ACTION: On motion by Commissioner Louis, the Commission’recommended that the
Rate Stabilization Fund be used to make up for the loss of revenue to the
Water District in the interim before the rate increase is approved by the Board.
AYES: Henley, Louis, Maerkle and Melideo
2. Presentation of Plaque to Commissioner Maerkle for Service as 1991 Chairman
Chairman Henley presented a Plaque to Commissioner Maerkle for his service as Chairman of
the Water Commission for the year 1991.
ADDED ITEMS AND REPORTS:
Water Commission
No reports. .
GENERAL MANAGER REPORTS:
Staff Report on AB 3518 - Gravwater Bill
Jeanne Flack reported on AB 3518, stating any use of gray water has to go through the Health
Department-not the Water Department, and has to be underground.
APPROVAL -OF MINUTES:
On motion by Commissioner Louis, the Minutes of the Regular Meeting held July 22, 1992, were
approved as presented.
AYES:
ADJOURNMENT:
By proper motion, the
Henley, Louis, Maerkle and Melideo
Meeting of August 5, 1992, was adjourned at 3:04 p.m.
Harriett Babbitt
Minutes Clerk
Carlsbad Journal
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STATE OF CALIFORNIA, ss.
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 principal clerk of the printer, of the CarIsbad Journal, a newspaper of general circulation,
published weekly in the City of Carlsbad, County of San Diego, State of California, and which newspaper
is published for the dissemination of loca1 news and intelIigence of a genera1 character, and which
newspaper at ali times herein mentioned had and still has a bona fide subscription list of paying
subscribers, and which newspaper has been established, printed and published at regular intervals in the
said City of Oceanside, County of San Diego, State of California, for a period exceeding one year next
preceding the date of publication of the
notice hereinafter referred to; and that the
‘NOTICEOF - PUBLICHEARING REVlSlON OF RATBS FOR WATER SUPPLJRD BY THE CARLSBAD MUNICIPAL WATER DHTRICF
NUl’ICB IS HEREBY GWEN thet the Board of Dlrecton of the Cerl- rbad Mardcipal Water District will hdld a public beari at the Clt~
Cqusell Chemben. 1200 CarLbed * Vlllqa Drive.Culsbed. Celifornle, 8t $30 P.M., onl-ueadey. September ,I& IO@, to eonslder the revision of tbc water r&e stmcture to incorPo- rate the incrersed tort of reter prodded by the San Dle~e County ,water AUtbOruY. : Jf you heve coy questloo werd- tnp this matter, pleese cell Bob Orerney. General Manaser. at tbe %erlsbed Yuaicipel Water District. ( 43&?naext.lw. If you ehelleage the rovlrlon of the rater rate structure in court.
notice of which the annexed is a printed
copy, has been published in each regular
and entire issue of said newspaper and not
in any supplement thereof on the follow-
ing dates, to-wit:
&OU may be UmUed to raisins only
F I$ of Ceriebed City Clerk’s Offke b or prior to. the public bearin& ~~p~~Uc.a~Cmrlsbad Yunlelprl Wa-
CARLSBADYU?UICIPAL WATER DISTRICF BOARD OF DIRECI’ORS
CJ 31112: September 3. lwa
September 03 19 g2
w--
I certify under penalty of perjury that the
foregoing is true and correct. Executed at
Carlsbad, County of San Diego, State of
California on the 3rd
day of beptemDer, 193L
L zlerk of the Printer
NOTICE OF PUBLIC HEARING
REVISION OF RATES FOR WATER SUPPLIED BY THE
CARLSBAD MUNICIPAL WATER DISTRICT
NOTICE IS HEREBY GIVEN that the Board of Directors of the Carlsbad Municipal Water District will hold a public hearing at the City Council Chambers, 1200 Carlsbad Village Drive, Carlsbad, California, at 6:00 p.m., on Tuesday, September 15, 1992, to consider the revision of the water rate structure to incorporate the increased cost of water provided by the San Diego County Water Authority.
If you have any questions regarding this matter, please call Bob Greaney, General
Manager, at the Carlsbad Municipal Water District, 438-2722, ext. 106.
If you challenge the revision of the water rate structure in court, you may be limited to raising only those issues raised by you or someone else at the public hearing described in this notice, or in written correspondence delivered to the City of Carlsbad City Clerk's Office at, or prior to, the public hearing.
APPLICANT: Carlsbad Municipal
Water District
PUBLISH: September 3, 1992 CARLSBAD MUNICIPAL WATER DISTRICT BOARD OF DIRECTORS