HomeMy WebLinkAbout8A, Water Rate StudyAction Item # 8
Consideration of:
a) Accepting the Water Rate Study Report
b) A Draft Ordinance Setting the Water Rates
c) Setting a Public Hearing Date Regarding
Water Rates
November 6, 2013
Background / History
• Water rates have not increased since January 2011
— Recommended water rate increase for
FY12 & FY13 was declined
— Compounded inflation since 2009 is over 11%
2009
2010
2011
2012
2013
campoundIed
Water Rate Increase 0.00%
1. 75%
1.75%
0.00%
0.00%
3. 53%
I nfIation 2.71%
1.50%
2. 6%
1.74%
2.00%
11.40%
2
Background / History
• FY14 & FY15 Budget
— Modest 3% water rate increase needed in FY14 & FY15
— Must follow Prop 218
— Board authorized HDR to perform rate and cost of service study
— Shawn Koorn of HDR will present results tonight
— Monthly $5 water meter surcharge ends 12/31 /2013 (-7.5%)
— Overall 4.5% decrease in FY14
3
Background / History
• California's Proposition 218
— Adopted in 1996
— Effective 1997
— "Right to Vote for Taxes Act"
— Courts ruled that Prop 218 includes water utility rate changes
0
Background / History
• Prop 218 Requirements
— Rates must be based on actual cost of service
— Notice must be mailed to all rate payers
— Notice may be mailed to all property owners
— Public hearing must be held after 45 days of notice
— If majority of rate payers protest, then rates are rejected
— Rates can become effective 30 days after public hearing
5
Shawn Koorn of HDR
a
Next Steps
• November 30 (or before)
— Mail notices of public hearing to customers and property
owners
— Begin advertising public hearing in local newspaper
• January 15
— Hold a public hearing regarding proposed water rates
— Consider adopting ordinance for new water rates
• February 14
— Adopted water rates can become effective
— Effective for utility bills printed after March 15
7
Fiscal Impact
• There is no direct fiscal impact of accepting the HDR Water
Rate Study Report
• Adopting an ordinance to raise the water rates will increase
revenue annually by 3% to achieve the District's short-term
and long-term goals
— Draft ordinance included in Board packet uses
Alternative 1 - "3% across the board" for both residential and
commercial customers
• The cost of advertising and mailing the Prop 218 required
notices of the public hearing will cost about $10,000
Recommendation
• Accept the HDR Water Rate Study Report
• Accept the proposed draft of the water rate ordinance
• Set January 15, 2014 as the date of the public hearing
regarding water rates
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Effect of Water Rate Changes and Meter Surcharge
Average Meter
Residential
$ 6 1 w A
$ n `
' 'MrAr 1, . 41
3%
$ 2.
$0.
$ 2. 2
4%
$62.62
$0.00
$62.62
r %
$63.22
$0.00
$63.22
11