HomeMy WebLinkAbout8 Water Electric Standby Charges Agenda Item # 8
Public Utility District
ACTION
To: Board of Directors
From: Mary Chapman
Date: April 15, 2009
Subject: Consideration of Scheduling Public Hearings Related to the
Adoption of Water and Electric Standby Charges
1. WHY THIS MATTER IS BEFORE THE BOARD
This matter involves scheduling a public hearing related to adoption of Water and
Electric Standby Charges for the 2009-2010 tax year. The Board needs to begin
taking actions in order to impose Water and Electric Standby Charges for the
2009-2010 tax year.
2. HISTORY
In 1975, the District began imposing annual Water and Electric Standby Charges
pursuant to California Government Code Section 54984 Uniform Standby Charge
Procedures Act. The purpose of the standby charge is to collect revenues to help pay
operating and maintenance expenses. The concept is that vacant lots benefit by being
in close proximity to water and electric lines, and should, therefore, contribute to
maintenance of those lines. We have not changed the standby rates in many years,
and we do not propose changing them at this time. The original charges were as
follows:
Water Standby:
$ 5 per unimproved parcel less than 1 acre
$10 per unimproved parcel greater than 1 acre
Electric Standby:
$10 per unimproved parcel less than 1 acre
$20 per unimproved parcel greater than 1 acre
In 1991, the District increased the Water Standby Charge for unimproved parcels. The
law required that the District follow a protest hearing process in order to increase a
Water Standby Charge. This process is required by California Proposition 218. In
order to increase the rate, the District was required to provide an engineer's report,
documentation on the basis of the charge and the methodology and rationale of
benefits conferred by the service.
After a protest hearing was held, the Board adopted Ordinance No. 9105 increasing
the Water Standby Charge to $80 per parcel regardless of the parcel's size. This
charge has not been increased since 1991.
In 2001, the District acquired the Donner Lake Water System. In 2002, the District
acquired the Glenshire Water System. In 2004, the District began imposing Water
Standby Charges to unimproved parcels in these developments. If these customers
were already included in the District's electric service territory, they would have
already been receiving an Electric Standby Charge. In 2006, it was determined that
the District did not follow the proper process to add Water Standby Charges to the
unimproved parcels within these two developments. As a result, the Water Standby
Charges were reversed and the monies collected were refunded to the parcel owners.
3. NEW INFORMATION
In order to continue either fee, the District must hold a Public Hearing to consider
renewing the existing Water and Electric Standby Charges on vacant parcels. Notice
of the Public Hearing requires publication once a week for two successive weeks with
two publications in a newspaper publicized once a week or more frequently, with at
least five days intervening between the respective publication dates. The first notice
will be published on May 13, and the second notice will be published on May 20.
Vacant parcel lists will be attached to the resolutions at the June 17 Board meeting.
The budgeted standby revenue charge for the 2009-2010 tax year is:
Electric Standby Charges $ 21,100
Water Standby Charges 162,800
Total $183,900
Since the Electric Standby Charge is now becoming a very small portion of the
District's electric revenue and imposing and collecting the charge requires some effort,
staff recommends that the Board consider phasing out the Electric Standby Charge
altogether. Any further effort to update the Electric Standby Charge rate would likely
cost the District more than the amount being charged.
The Water Standby charge is more significant representing approximately 1% of
Water Department revenues. Staff would like to continue the Water Standby Charge
for the 2009-2010 tax year; we would suggest that further continuance of this charge
be considered during the water rate study process which will be underway shortly.
4. FISCAL IMPACT
The estimated revenue associated with standby funds is:
Electric Standby Charges $ 21,100
Water Standby Charges 162,800
Total $183,900
5. RECOMMENDATION
Set a date for a Public Hearing on June 17, 2009 at 6:00 PM for the purpose of
receiving input on the adoption of Water and Electric Standby Charges.
Mary Cha n �ichael . Holley
Administrative Services Manager General Manager