HomeMy WebLinkAboutResolution 2010-178 N.C.S. 09/20/2010Resolution No. 2010-178 N.C.S.
of the City of Petaluma, California
A RESOLUTION EXPRESSING CITY COUNCIL OPPOSITION TO 1VIEASURE ~~U,"
AN INITIATIVE TO REDUCE CITY OF PETALUMA
WASTEWATER SERVICE RATES TO RATES IN EFFECT ON .IANUARY 1, 2006,
ON THE NOVEIVIBER 2, 2010 GENERAL ELECTION BALLOT
WHEREAS, on October 13, 2009, the Petaluma City Council adopted Resolution No.
2009-170 N.C.S., ordering the submission to the voters of an "Initiative to Reduce City of
Petaluma Wastewater Service Rates to Rates in Effect on January 1, 2006," at the general
election on November 2, 2010; and
WHEREAS, the Sonoma County Registrar of Voters has denominated the Initiative as
Measure "U"; and
WHEREAS, this resolution came before the City Council at a public hearing on
September 20, 2010, at which members of the public, including proponents and. opponents of the
Initiative, were free to comment on the Initiative and this resolution; and
WHEREAS, the City Council makes the findings of fact enumerated in Exhibit A, which
is attached to and made a part of this resolution, and based on such findings of fact
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PETALUIVIA
DOES HEREBY RESOLVE AS FOLLOWS:
1. The above recitals and the findings of fact in Exhibit A are hereby declared to be
true and correct and findings of the City Council of the City of Petaluma.
2. The "Initiative to Reduce City of Petaluma Wastewater Service Rates to Rates in
Effect on January 1, 2006," ("Measure `U"') would reduce City of Petaluma wastewater service
rates below levels required to fund: wastewater system operations, maintenance, and capital
projects as required by the terms of the City's State Revolving Fund Loan; applicable Clean
Water Act and other regulatory requirements; City wastewater bonds, and other debt. terms; and
public facilities related policies in the General Plan 2025.
3. In order to reduce Petaluma's wastewater service charges to 2006 levels, Measure
"U" threatens the City's ability to maintain wastewater system facilities that protect the
environment and public health, meet regulatory discharge requirements, preserve groundwater
for emergency and peak demand uses and provide adequate services and reliable, safe., secure
and economical wastewater treatment for all Petalumans.
4. The City Council supports the City of Petaluma General Plan 2025, which
establishes along-range vision for Petaluma's physical and economic development and governs
growth management and provision of City services through the year 2025.
5. The City Council opposes Measure "U," an "Initiative to Reduce City of
Petaluma Wastewater Service Rates to Rates in Effect on January 1, 2006," because it violates
Resolution No. 2010-178 N.C.S. Page 1
the guiding principles, planned infrastructure growth, water supply programs and other public
facilities policies of General Plan 2025.
6. The City Council opposes Measure "U" because it violates the terms of the City's
State Revolving Fund loan, violates the City's wastewater bond covenants and other debt
obligations and violates applicable Clean Water Act and other regulatory requirements.
7. In accordance with Sections 8314 and 54964 of the California Government Code,
and other applicable law, no public resources may be used to campaign for or against Measure
:~U~,
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Kesolution was introduced and adopted by the /Appr e as
Council of the City of Petaluma at a Regular meeting on the 20`h day of September, t(` r
2010, by the following vote: ~"
AYES: Barrett, Vice Mayor Glass, Harris, Healy, Rabbitt, Renee, Mayor Torliatt
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST: ~ ~ ~J )
(
`/~`~'~LJeC.~
City Clerk
City
Resolution No. 20?.0-178 N.C.S. Page 2
EXHIBIT A TO RESOLUTION
FINDINGS OF FACT RELATED TO MEASURE "U," AN INITIATIVE TO REDUCE
CITY OF PETALUMA WASTEWATER SERVICE RATES
TO RATES IN EFFECT ON JANUARY 1, 2006, ON THE NOVEMBER 2, 2010 GENERAL ELECTION BALLOT
If approved by Petaluma voters, Measure "U" would reduce City of Petaluma
wastewater service rates to rates in effect on January 1, 2006.
On May 19, 2008, the City Council adopted the General Plan 2025, establishing a long
range vision for Petaluma's physical and economic development and governing growth
management and provision of City services for a projected population increase by 2025
of an additional 15,622 residents and a total 2025 population of 72,707 residents:
3. Adoption of the General Plan 2025 was the culmination of an eight-year effort involving
input from many City decision making and advisory bodies, community groups and
individuals.
The General Plan 2025 requires operating and maintaining safe, reliable, high-quality,
economic and increasingly sustainable City wastewater treatment and water recycling
facilities in compliance with all State and federal permit requirements; and relies on the
contribution of potable water offset from recycled water for an integrated water supply
plan that will meet future water demands.
On January 22, 2007, after notice to property owners and wastewater service customers
in accordance with Proposition 218 and four public hearings, the City adopted
wastewater charges necessary to fund wastewater maintenance and operation costs,
debt service, and the City's obligations under the State Revolving Fund loan, in
accordance with the loan terms and the Clean Water Act.
Petaluma's wastewater rates for average single family residential customers rank
approximately in the middle among the nine Sonoma County cities.
The 2007 increases in Petaluma's wastewater rates were required to cover ongoing
operation and maintenance costs, to meet debt service obligations and to fund the
utility's capital improvement program, including completion of construction of the Ellis
Creek Water Recycling Facility (which has replaced the City's Hopper Street Wastewater
Treatment Facility), the C Street Pump Station Upgrade Project, expansion of the
recycled water program, and replacement of worn and deteriorated wastewater
pipelines.
8. The Hopper Street Facility, which was originally constructed in 1938, could not meet
anticipated growth in the community, did not produce tertiary recycled water, could not
consistently meet current permit requirements, could not meet future permit
requirements, did not have odor control, and was near the end of its useful life.
After an extensive period of evaluation, analysis, planning and design, which began in
1989, the City commenced construction of the Ellis Creek Water Recycling Facility in
October of 2005 and completed it in 2009.
10. The Ellis Creek Water Recycling Facility will produce tertiary recycled water for irrigation
of parks and other public spaces, and sufficiently reduce demand for potable water to
provide a necessary share of the City's potable water supply for domestic and
commercial use through 2025 as part of the City's integrated water and wastewater
planning.
Resolution No. 2010-178 N.C.S. Page 3
1 1. Construction of the Ellis Creek Water Recycling Facility is financed primarily by a State
Revolving Fund loan of $125,964,254 at an interest rate of 2.4%.
12. This below-market rate loan was secured with the help of Petaluma's state legislators,
and will save Petaluma rate payers an estimated $60 million in interest costs over the 20
year-life of the loan.
13. The terms of the City's State Revolving Fund loan require the City to impose wastewater
charges sufficient to fund the operation and maintenance of the City wastewater system
and the City's obligations under the loan; prohibit reducing City wastewater charges
below that level; and require the City to impose wastewater charges that ensure that
City wastewater customers pay their proportionate share of the operation and
maintenance of the wastewater system in accordance with the federal Clean Water
Act.
14. The .State has indicated it will not forgive or renegotiate the terms of the State Revolving
Fund loan if Petaluma voters approve Measure "U."
15. The terms of the City's outstanding wastewater bonds require setting wastewater service
rates sufficient to pay for operation and maintenance and debt service and other
obligations of the City wastewater system.
16. If approved by Petaluma voters, Measure "U" will create an estimated total annual
revenue shortfall in the wastewater enterprise of approximately $10 million. beginning in
201 1 /2012, and provide insufficient funds to pay for wastewater operations and
maintenance and debt service, including debt service on the State Revolving Fund loan,
and debt service on outstanding wastewater revenue bonds.
17. If approved by Petaluma voters, Measure "U" could cause the City to default on the
State Revolving loan, which could result in loss of any remaining undisbursed loan funds,
and litigation between the State and the City.
18. Approval of Measure "U" could result in the City defaulting on outstanding wastewater
revenue bonds and breaching its grant obligations to provide matching funds.
19. If the City defaults on any of its debt or other financial obligations, such default will cause
the City's credit to be downgraded, thereby increasing financing costs for the
wastewater operations, as well as other City operations, and decreasing the City's ability
to obtain financing for such operations.
20. Approval of Measure "U" would eliminate funding needed for capital improvement
projects and maintenance programs, resulting in deterioration of the wastewater system,
and could delay or cause cancellation of other wastewater projects, prevent the City
from maintaining wastewater service levels and compromise the City's ability to treat its
wastewater and comply with applicable regulatory requirements to protect the public
health and safety, which could result in environmental damage and fines. from State and
federal regulators and a State moratorium on new wastewater service connections.
21. Approval of Measure "U" would jeopardize implementation of the City's recycled water
program, which is necessary to provide enough potable water through offsets to ensure
the adequacy of water supplies under the General Plan 2025.
22. Without recycled water to offset potable water use, the City's ability to meet General
Plan Housing Element goals and communitywide goals of economic health and
sustainability will be impaired.
Resolution No. 2010-178 N.C.S. Page 4
23. The $10 million annual wastewater revenue shortfall estimated for fiscal year 201 1 /2012
and beyond if Measure U passes is more than 30 percent of the City's current General
Fund.
24. Approval of Measure "U" will create liability for unfunded debt service and could result in
the insolvency of Petaluma's City government if sufficient funds are not available from
other sources to replace lost wastewater revenues and maintain essential services, and
could require the City to seek bankruptcy protection to continue operating its
wastewater utility.
25. Approval of Measure "U" could cause the cancellation or reduction of public access
and educational activities at the Ellis Creek Wastewater Recycling facility.
26. If approved, Measure "U" would likely cause the City to incur significant legal expenses
either challenging the validity of Measure "U" or setting wastewater service rates
sufficient to meet the City's waste water maintenance, operation and capital needs,
and satisfy existing debt obligations.
1460545.4
Resolution No. 2010-178 N.C.S. Page 5