HomeMy WebLinkAboutStaff Report 6.B 05/15/2017Agenda Item #6.B
DATE: May 15, 2017
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Dant. Jo E — Director, Public Works & Utilities Department
SUBJECT: Public Hearing on Water and Wastewater Services Charges and Resolution
Adopting a New Rate Schedule for Water Service and Resolution Adopting a
New Rate Schedule for Wastewater Service
RECOMMENDATION
It is recommended that the City Council receive the Financial Plan and Rate Study, conduct the
required Public Hearing and following the conclusion of the Public Hearing and canvassing and
reporting of the number of protests received related to parcels subject to the proposed rate
schedules, assuming a majority protest does not exist, approve the Resolution Adopting a New
Rate Schedule for Water Service Superseding Resolution No 2011-165 and the Resolution
Adopting aNew Rate Schedule for Wastewater Service Superseding Resolution No. 2011-166.
BACKGROUND
The existing rates were adopted by Resolution Nos. 2011-165 and 2011-166 N.C.S. on
December 5, 2011. These rates included an automatic annual pass-through increase for both the
Consumer Price Index (CPI) and increases in the wholesale price of water charged by the
Sonoma County Water Agency (SCWA). By law, the City is required to prepare a new rate study
and adopt new rates every five years if it wishes to rely on automatic cost adjustments.
Therefore, the new rates will need to be adopted before the existing rates, last adjusted on July 1,
2016, can be adjusted again to meet the fiscal needs of the utilities.
In February 2016, the City contracted with Bartle Wells Associates to prepare financial plans and
rate studies for the water and wastewater utilities to address fiscal needs for the five-year period
beginning with the 2017 rate year while looking out to 2027. The study analyzed ongoing
operation and maintenance activities, debt service obligations, short-term capital improvement
projects, and ongoing revenue requirements; and provided recommendations for modifying the
rate structures and making necessary rate adjustments. This comprehensive analysis indicates a
need for rate increases for both the water and sewer enterprise funds. In the case of water,
increased revenue is needed to offset losses in revenue due to water conservation during the
recent drought, and for the City's participation in the emerging groundwater sustainability
agency and the groundwater study. However, for both enterprise funds, the greatest needs are to
support the proposed Capital Improvements Program (CIP), even without many of the master
planned recycled water projects, and to fund the new pavement maintenance fee. On the
wastewater side, projected increases in maintenance and capital replacement costs at the
wastewater treatment plant, along with the commissioning of the proposed bio -methane to
compressed natural gas conversion program (13213 Project), are taken into account.
On November 14, 2016 and February 13, 2017, the City Council held workshops to discuss the
utilities rate study, including the CIP and cash flow analysis of the two enterprise funds. The
Council provided input to establish future revenue targets, to guide rate design and revenue
stability, and to analyze customer impacts. An initial rate proposal was presented based on a "full
CIP" scenario. The Council further addressed the rate study at the regular Council meeting of
March 20, 2017, including consideration of two additional options based on a "reduced CIP"
scenario that is considered adequate to meet the basic needs of the utilities. These options sought
to reduce rate increases on low water users, yet still promote a gradual shift to higher percentage
of fixed revenues to promote fiscal stability. Impacts to various customer classes and
benchmarking to other agencies for the proposed rates were provided. The Council directed that
"Option 2" be developed and brought forward to the requisite public hearing required by
Proposition 218 at the May 15 Council meeting after a 45 -day public notification period. At that
time, the Council can set the water and sewer utility rate structure for the next five years
beginning on July 1, 2017. The two proposed rate resolutions are included as Attachments 1 and
2 and include minor edits to procedural issues, fees related to private fire protection service, hot
taps, temporary water connection service and hauling, and penalty charges.
A Public Notice for the proposed rates and public hearing, included as Attachment 4, was sent to
property owners and utility customers on March 30, 2017. The Rate Study Report will be made
available on the City's website and is included as Attachment 4. As of April 14, 2017, ten written
protests had been received and a full accounting of all the written protests shall be presented at
the Public Hearing.
DISCUSSION
The Water and Sewer Rate Study, included as Attachment 3, addresses the period from July
2017 through June 2027 and proposes to modify rates and the rate structures beginning in July
2017 and each year thereafter through June 2022. The proposal includes an automatic rate
adjustment mechanism to pass through the SCWA wholesale water rate changes and CPI to
begin in July 2018. The major elements of the rate development process have proceeded with the
completion of the following key steps:
• Finalization of the cash flow projections for water and sewer enterprise fiends through
increases in fiscal year 2026/27 using full and reduced capital improvement plan (CIP)
scenarios.
Design of a rate structure sufficient to meet projected revenue needs taking into
consideration direction provided at the November and February Council workshops and
March Council meeting. Three alternative rate structures were developed for the
Council's consideration and the one labeled "Option 2" was selected for final
development and subject of Public Hearing in May.
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• Evaluation of proposed rate changes on key customer categories and benchmarking to
other agencies within our region.
• Finalization of the Rate Study.
• Circulation of Public Notice to all City customers as required by Proposition 218.
The cash flow projections indicate a need for rate increases for both the water and sewer
enterprise funds and include the following assumptions for future -year expenses and revenues:
• Operating costs are generally escalated at the projected CPI plus 1.5%.
• Automatic pass-through of wholesale water rate and CPI increases into new rates each
July 1, beginning in 2018.
• Low growth of customer base per City of Petaluma General Plan.
• Enterprise funds reserve target is equal to three months operating expenses plus the
average year's CIP expenses, plus a $3,500,000 Rate Stabilization reserve is included in
the wastewater fund.
• Minor water demand "bounce back" after drought.
• New debt issuance with new debt payments for water fund and refinancing the 2011
wastewater bonds in sewer fund.
The selected rate proposal was developed based on the parameters discussed at the
aforementioned Council workshops and meetings, namely:
• Shift the percentage of fixed revenue from less than 20% to a more stable target of 28 to
30% in the water fund, and from around 25% to 38 to 40% in the sewer fund.
• Update method calculating the fixed monthly charge by utilizing the industry standard
American Water Works Association (AWWA) Meter Capacity Ratio tables for
establishing non-residential customers' rates and introducing an equal Account and
Metering Charge for all accounts.
• Establish a new multi -family unit (MFU) fixed water rate, similar to that used in sewer
rates, based on the single-family unit rate multiplied by a demand factor of 0.6 to account
for lower average usage. Adjust the MFU sewer demand factor based on metered use
from 0.87 to 0.85.
• For single-family units (SFU) water customers, reduce the increments of the steps in the
water commodity charges for Tier 1 and 2 from eight to four hundred cubic foot (HCF)
units (one HCF unit equals 748 gallons).
Other aspects of the rate design are similar to those used in previous rate studies and rate
resolutions.
The Water and Sewer Rate Study addresses tiering of water commodity rates and allocation of
water system extra or peak capacity costs to higher tiers and other non -single family rate
categories, as fair and equitable. These expenses, in excess of base costs, are for additional
operations, maintenance, energy demand charges and facilities needed to meet extra and peak
demands; for programs designed to lower potable water use and add resiliency to the water
supply to assure availability of water supply during peak demands, such as for water
conservation, groundwater sustainability; and recycled water and peaking capacity projects. As
the Study reflects, water system extra or peak capacity costs include a portion of the cost of the
City's water conservation, ground water sustainability, debt service, capital improvement and
recycled water programs, which are focused on maintaining, augmenting, or reducing the need
for the City's peak water supply capacity.
The case of Capistrano Tax Payers Association v. City of San Juan Capistrano (2015) 235
CA4th 1493 held that for tiered water rates to comply with the requirements of Proposition 218
(Article XIIID, Section 6 of the California Constitution), the tiers "must be based on cost of
service for the incremental level of usage." In accordance with the San Juan case, Tables 18, 19,
and 20 of the Study reflect the volumetric basis for the City's residential water usage tiers 1-4,
and water- usage -based allocation of the $1,602,900 peak or extra capacity costs to the
residential customer tiers and to multi -family residential, commercial, and irrigation customer
classes.
It was then estimated how much of these costs are reasonability caused by meeting the service
needs of each of the water commodity rate tiers and categories based on the higher costs incurred
to the utility to meet the demands placed on the system by the higher tiers and categories. Costs
are allocated progressively to water consumed by tiers 2, 3 and 4 in recognition of the costs
incurred by providing the higher levels services required by these tiers. Based on review of cost
drivers, it was determined that an extra capacity costs would be applied to 90% of the water
delivered for Tier 4 use, 50% of water in Tier 3, 20% in Tier 2, and zero in Tier 1. In addition,
25% of water delivered to non -single family water user would be charged extra or peak demand
costs. These allocations are considered conservative because it could be argued that 100% of
Tier 4 water incurs peak or extra costs because so much of the water conservation program and
the need for high capacity delivery and alternate groundwater supplies are driven by high users.
For Tier 3, Based on this allocation method, an extra capacity unit charge that ranges from
$0.45/HCF for Tier 2 to $2.03/HCF for Tier 4, was applied to the base consumption charge as
summarized in Table 20 of the Study.
A summary of the proposed rate schedules is shown in the following table:
TABLE: Summary of Proposed Water Rates (1)
Proposed Rates
Categoy
Current
JuIv 2017
Ju,11 2021
Monthly fixed charges
SFU up to 1 -inch meter
$7.39 to $10.75
$9.57
$16.88
Multi -family Unit
$1.46(2)
$5.74
$10.13
2 -inch Commercial
$29.20
$40.98
$81.37
Monthly fixed charges
SFU - Tier 1: 0-4 HCF
$3.52
$3.52
$3.52
SFU - Tier 2: 4-8 HCF
$4.20
$3.95
$3.95
SFU - Tier 3: 8-16 HCF
$5.24
$4.50
$4.56
SFU - Tier 4: 16+ HCF
$6.82
$5.35
$5.40
Other Customer Classes — non -tem ora
$3.91
$3.95
$3.95
M.
Temporary Water /Water Hauler
$3.911 $6.071 $6.07
TABLE: Summary of Proposed Sewer Rates (1)
(1)
Current
CaLegog
Current
Jul 2017
July 2021
Monthly fixed charges
SFU
$20.13
$23.41
$33.74
Multi -family Unit
$17.54(2)
$19.90
$28.68
2 -inch Commercial
$ 86.41
$107.09
$173.37
Co modity Charges (per HC
Low Strength Commercial
$8.95
$8.83
$7.70
Residential
$9.14
$9.041
$8.00
Notes for Rate Tables:
1) Assumes CPI or SCWA rate increases.
2) Based on 20 unit apartment with 2" meter
The proposed rates, which are based on the cash flow analysis for the reduced CIP scenario, best
meets the stated concerns of the Council. By lowering revenue requirements and by slightly
reducing the fixed revenue target in this option, the fixed rates shifted downward to lessen the
impact on customers with low water use when compared to first rate option presented in January.
While the percentage increases for multi -family water customers appear high, it is because of the
existing, very favorable current rate structure for this customer class. Actual increases for MFU
customers are projected to be lower than with SFU customers over the long run. The tiered
commodity charges were design to incentivize water conservation while also meeting the legal
guidelines imposed by Proposition 218 as interpreted in recent year legal challenges such as the
San Juan Capistrano case.
An analysis, assuming projected 3% CPI and 5% SCWA wholesale rate pass-through, was
conducted to predict impacts on key customer categories as summarized in the following tables:
Summary of Water Rate Impact - (2)
Customer Description
Monthly
Use
(HCF)
Current
'jam
2017
Increase
Julv
2021
5 -Year
Increase
July
2017
July
2021
SFU - Low User: 25th
Percentile
3
$17.95
$20.13
$2.18
$31.17
$13.22
SFU - Median User
6
$28.51
$31.55
$3.04
$44.99
$16.48
SFU - High User: 90th
Percentile
13
$56.55
$61.95
$5.40
$81.66
$25.11
MFU, per dwelling unit
4
$17.10
$21.54
$4.44
$30.44
$13.34
(1)
Monthly
Use
(HCF)
Current
J.�
2017
Increase
July
2021
5 -Year
Increase
Small Business
10
$46.49
$49.07
$2.58
$66.97
$20.48
Medium Business
25
$108.50
$113.15
$4.65
$150.76
$42.26
Large Industry
5,000
$19,720
$19,994
$274.00
$24,889
$5,169
Notes:
1) Analysis based on a 20 unit apartment with a 2 -inch meter using 80 HCF per month.
2) Assumes projected CPI and SCWA Wholesale Rate pass thru.
Summary of Sewer Rate Impact - (2)
Customer Description
Monthly
Use
(HCF)
Current
J.�
2017
Increase
July
2021
5 -Year
Increase
July
2017
July
2021
$20.13
SFU - Low User: 25th
Percentile
3
$47.55
$50.53
$2.98
$62.50
$14.95
SFU - Median User
5
$65.83
$68.61
$2.78
$79.82
$13.99
SFU - Higher User
8
$93.25
$95.73
$2.48
$105.80
$12.55
MFU, per dwelling unit
(1)
3
$44.96
$47.02
$2.06
$57.02
$12.06
Small Business - Low
Strength
10
$109.63
$111.71
$2.08
$119.82
$10.19
Restaurant - High
Strength
25
$387.38
$399.08
$11.70
$445.36
$57.98
Large Industry
5,000
$59,042
$62,813
$3,771
$77,270
$18,228
Notes:
1) Analysis based on a 20 unit apartment using 60 HCF per month.
2) Assumes projected CPI adjustments in rates.
The following table compares the impact on the SFU Low User Category:
Summary of Water Rate Impacts on Low Residential Users (1)
Notes:
1) SFU - Low User: 25th Percentile, Monthly Use equals 3 MCF.
2) Assumes projected CPI and SCWA Wholesale Rate adjustments to rates.
0
Current
July
2017
Increase
July 2017
July
2021
5 -Year Increase
July 2021
Proposed Rates (2)
$17.95
$20.13
$2.18
$31.17
$13.22
Notes:
1) SFU - Low User: 25th Percentile, Monthly Use equals 3 MCF.
2) Assumes projected CPI and SCWA Wholesale Rate adjustments to rates.
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The proposed rate resolutions address the new rates as well as updating language and minor fees,
including:
Setting of the recycled water rate at 50% of the "other customer class" potable water
commodity charge, resulting in a rate of $1.98 per HCF on July 1, 2017 compared to
$1.88 per HCF currently. This would allow recycled water rates, unchanged for 5 years,
to be adjusted annually as potable water commodity charges increase over time.
Establishing an "all -in" rate for temporary water users and water haulers based on the
total cost of service. While the use in this category is very small at less than 1% of the
total, these customers currently only pay the "all other users" commodity charge and do
not pay a fixed charge, other than a meter rental fee. For equity with other users, the "all -
in" rate of $6.07 per HCF includes a fair share of fixed costs and capital costs and other
costs of water service as proportionally borne by the City's other water customers. The
computation of this rate is included in the rate study.
While considered, it is not recommended to pursue a change in "out -of -service area" rates
for customers residing outside of City limits. Limitation of Proposition 218 and 26
appears to restrict the City's ability to charge higher rates unless directly related to cost of
service.
• Penalty and service fees were raised to meet current costs after being frozen for five
years.
The proposed rates will support continued protection of public health and the environment, will
remain competitive with nearby communities, and will support the City's ability to meet debt
obligations and governmental regulatory requirements. It is recommended that the Council
approve the proposed rate resolutions for implementation in July 2017.
FINANCIAL IMPACTS
The intent of the proposed rate structures is to achieve fiscal sustainability for both utilities for
the study period through June 2022 and beyond. The financial impacts of the proposed rates are
summarized below.
Water Fund Sewer Fund
Increase in Annual -,Revenue 3.5% 1.5%
Reauired Borrowing $ 11,800,000 $ 0
Increase in Annual Average CIP $ 3,438,000 $ 7,551,200
A detailed discussion of the financial impact associated with the Rate Study is contained in the
Financial Plan sections of the Report. The analysis provides background, definition of funding
and rate structures, cash flows within the two utility funds, assumptions reflected in the analysis
for the report, customer and account characteristics, capital improvement program funding, long-
term debt financing, operating reserves, and conclusions and recommendations.
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Total consulting costs for the rate study was approximately $98,990.
ATTACHMENTS
1. Resolution Adopting New Water Rates
2. Resolution Adopting New Wastewater Rates
3. Notice of Public Hearing and Proposed Increases in Water & Wastewater Rates and
Changes to Rate Structures.
® Items listed below are large in volume and are not attached to this report, but may be viewed in the
City Clerk's office.
4. Water and Sewer Rate Study Dated May 5, 2017; Exhibit A to Resolutions Adopting
New Water and Wastewater Rates —(Due to size, a copy is available at the City Clerk's
office)
Attachment 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA
ADOPTING A NEW RATE SCHEDULE FOR WATER SERVICE AND
SUPERSEDING AND REPEALING RESOLUTION NO. 2011-165
WHEREAS, Petaluma Municipal Code Title 15 provides for the establishment and
operation of a water system and the charging of certain fees and charges; and
WHEREAS, Chapter 15.16 of Title 15 provides for the setting of certain fees and
charges by resolution; and
WHEREAS, water services provided by the City include, but are not limited to,
pumping, storage, and distribution of water purchased from the Sonoma County Water
Agency ("SCWA") and from groundwater; and
WHEREAS, the City retained Bartle Wells Associates to develop a Water and Sewer
Rate Study("Study"), which Study is approved by the City Council, and attached to and made
a part of this resolution as Exhibit A; and
WHEREAS, the Petaluma City Council conducted public meetings on the proposed
rates pursuant to the Study on November 14,.2016, February 13, 2017 and March 20, 2017;
and
WHEREAS, a notice of public hearing on the proposed water rates and change in rate
structures ("Rates") was mailed to water utility customers and record owners of properties that
would be impacted by the proposed increases on March 30, 2017, 45 days or more before the
requisite public hearing, in accordance with the requirements of section 6(a)(2) of Article
XIIID ("Proposition 218") of the California Constitution, including notice of the requirements
for submitting a written protest in accordance with Proposition 218; and
WHEREAS, a notice of the proposed Rates and the May 15 public hearing was
published in the Petaluma Argus Courier on May 4, 2017; and
WHEREAS, the Petaluma City Council conducted a public hearing on the proposed
Rates on May 15,2017, and received testimony and considered all evidence ("the Record")
presented regarding the proposed Rates; and
WHEREAS, following the public hearing conducted on May 15, 2017, the City Clerk
canvassed and reported on the number of written protests received concerning the proposed
Rates in accordance with Proposition 218, totaling , in comparison with the number of
parcels affected by the proposed Rates, totaling approximately 19,741; and
6&
WHEREAS, in accordance with the canvass and report of the City Clerk, the number
of written protests received concerning the proposed Rates, totaling the minimum number of
parcels affected by the proposed Rates for which written protests would be required to be
submitted for a majority protest to exist that would preclude the City Council from adopting
the proposed Rates, thus confirming that a majority protest concerning the proposed Rates
does not exist; and
WHEREAS, after due consideration, the Petaluma City Council finds in accordance
with Section 6(b) of Proposition 218 and based on the Study and the Record that:
(1) The proposed Rates as presented herein are necessary to achieve full recovery of the costs
of providing water services to residents and businesses in Petaluma;
(2) The proposed Rates as presented herein will not generate revenue in excess of the cost of
providing water services;
(3) The proposed Rates as presented herein will not be used for purposes other than providing
water services;
(4) The Rates or charges imposed on any parcel or person as an incident of property
ownership shall not exceed the proportional cost of the service attributable to the parcel or
person;
(5) The Rates are for recovery of the cost of providing services that are actually used by and
immediately available to the owners of property subject to the Rates, and are not based on
potential or future uses of services;
(6) The Rates are not imposed for general governmental services including, but not limited to,
police, fire, ambulance or library services;
(7) Proper notice of the proposed Rates were given to record owners of properties that would
be impacted by the proposed increases, as prescribed by law; and
(8) A majority of record owners of properties that would be impacted by the proposed Rates
did not protest the proposed Rates; and
WHEREAS, the proposed Rates are "fees" or "charges" as defined in Section 2(e) of
Proposition 218, and are levies other than an ad valorem tax, special tax or assessment,
imposed by an agency upon a parcel or upon a.person as an incident of property ownership,
including user fees or charges for property related services; and
WHEREAS, the proposed Rates are not a "tax" as defined in Section 1, paragraph (e)
of Article XIII C of the California Constitution ("Proposition 26") because such rates are
imposed for a specific benefit conferred or privilege granted directly to the payor that is not
provided to those not charged, and which does not exceed the reasonable cost to the local
government of providing the service or product; and/or such fees and charges are imposed for
a specific government service or product provided directly to the payor that is not provided to
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those not charged, and which does not exceed the reasonable cost to the local government of
providing the service or product; and/or such fees and charges are imposed for the reasonable
regulatory costs to a local government for issuing licenses and permits, performing
investigations, inspections and audits, enforcing agricultural marketing orders and the
administrative enforcement and adjudication thereof; and/or such fees and charges are
imposed as a condition of property development; and
WHEREAS, adoption of revised rates and charges pursuant to this resolution involves
the establishment, modification, restructuring or approval of rates and charges, as identified
and analyzed in the Study, including rates and charges to obtain funds for meeting operating
expenses, purchasing or leasing supplies, equipment or materials, meeting financial reserve
needs and requirements and/or obtaining funds for capital projects necessary to maintain
service within existing service areas. Therefore, adoption of this resolution setting rates and
charges is not a project under the California Environmental Quality Act pursuant to California
Public Resources Code Section 21080(b)(8)(D) and 14 Cal. Code Regs. Section 15273.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Petaluma that the Petaluma City Council hereby adopt this resolution superseding and
repealing in its entirety Resolution 2011-165 effective July 1, 2017, as follows:
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ARTICLE I
GENERAL
SECTION 1.1 PURPOSE.
(A) Findings. The above recitals are hereby declared to be true and correct and to be
findings of the City Council of the City of Petaluma and are made a part of this resolution.
(B) Revenue. The purpose of the water service charge is to raise revenue for the cost
of operation and maintenance of the City of Petaluma's water utility used for the distribution,
pumping and storage of water and for payment of principal and interest on bonds and capital
recovery costs.
(C) Resolution. The purpose of this resolution is to establish a method of sharing the
cost of the operation and maintenance of the City's water utility among the users of water
service.
(D) Study. This resolution and the water charges established in this resolution are
based on the Water and Sewer Rate Study prepared by Bartle Wells Associates. The Study is
attached to and made a part of this resolution as Exhibit A.
ARTICLE II
RATES
SECTION 2.1 WATER SERVICE CHARGE.
(A) Potable Water. The monthly service charge for potable water shall be as set
forth in Table 1, as adjusted in accordance with this Article.
Table 1. Monthly Water Service. and Commodity (Usage) Charges
uposed Base Water Rates Effective on or After
July 1 July 1 July 1 July 1 July 1
2017 2018 2019 2020 2021
FIXED MONTHLY CHARGES*
Fixed monthly charge billed per residential dwelling unit or based on non-residential meter size.
RESIDENTIAL
Fixed charge per residential dwelling unit.
Single Family: Up to 1" Meter
Multi -Family: Per Dwelling Unit
ALL OTHER USERS
Fixed charge based on water meter size.
Up to 3/4 -inch meter
$9.57
$11.52
$13.39
$15.18
$16.88
$5.74
$6.91
$8.03
$9.11
$10.13
$9.57 $11.52 $13.39 $15.18 $16.88
12
1 -inch meter
$14.40
$17.70
$20.86
$23.89
$26.80
1-1/2 inch meter
$26.46
$33.15
$39.56
$45.71
$51.61
2 -inch meter
$40.98
$51.73
$62.03
$71.92
$81.37
3 -inch meter
$74.83
$95.04
$114.43
$133.02
$150.83
4 -inch meter
$123.20
$156.93
$189.29
$220.32
$250.05
6 -inch meter
$244.06
$311.61
$376.41
$438.56
$498.10
WATER COMMODITY CHARGES
Volumetric charge billed per hundred cubic feet (hcf)
of metered water use.
SINGLE FAMILY
RESIDENTIAL
Proposed
Rate Tier Tiers
Tier 1 0 - 4.00 hcf
$3.52
$3.52
$3.52
$3.52
$3.52
Tier 2 4.01- 8.00 hcf
$3.95
$3.95
$3.95
$3.95
$3.95
Tier 3 8.01- 16.00 hcf
$4.50
$4.52
$4.53
$4.54
$4.56
Tier 4 16.01+ hcf
$5.35
$5.37
$5.39
$5.40
$5.40
ALL OTHER USERS
All Other Users, non -temporary
$3.95
$3.95
$3.95
$3.95
$3.95
Temporary Service & Water Haulers
$6.07
$6.07
$6.07
$6.07
$6.07
(B) Fixed Monthly and Commodity (Usage) Charge Increases Due to CPI.
Beginning July 1, 2018 and each July 1 thereafter, the Base Water Rates shown in Table 1
will be adjusted each year to account for annual pass-throughs for 1) cost inflation and 2)
wholesale water rate increases adopted by Sonoma County Water Agency (SCWA). Each
fiscal year the Base Rates will be adjusted by the percentage change in the San Francisco -
Oakland -San Jose Consumer Price Index for All Urban Consumers (San Francisco CPI -U)
from the December 2016 index to the index for the December immediately preceding the
subject fiscal year (e.g. SFU fixed charge for July 2020: $15.18 x (December 2019 CPI) /
(December 2016 CPI). A negative percentage change in CPI shall result in no change in the
rate structure for CPI.
(C) Monthly usage Charge Annual Pass Through Increase.
Beginning July 1, 2018 and each July 1 thereafter, or whenever the SCWA implements new
water rates applicable to the City, water usage charges shall be adjusted based on the changes
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to wholesale water purchase costs from SCWA. After making the adjustments addressed by
paragraph B above, the Water Commodity Charges will be adjusted by the increase in the
wholesale water rate per hcf charged to the City of Petaluma for water supply.
SECTION 2.2 RECYCLED WATER COMMODITY CHARGES. The commodity
charge for recycled water use shall be 50% of the All Other Users, Non -temporary rate
shown in Table 1, as adjusted in accordance with Section 2.1 unless otherwise determined by
individual recycled water delivery contract.
SECTION 2.3 PRIVATE FIRE PROTECTION.
(A) Private Fire Protection Services. For services used exclusively for fire
protection, including sprinklers, private hydrants and other fire lines, the service charge shall
be as follows:
Table 4. Private Fire Protection Service Charge
CONNECTION SIZE (INCHES)
MONTHLY SERVICE CHARGE
1 V2
$4.72
2
$6.82
3
$10.16
4
$13.58
6
$20.33
8
$27.15
(B) Water Consumed for Fire Protection. In addition, all water consumed for
private fire hydrant testing or fire suppression or other uses shall be charged to the property
owner at the All Other Users, Non -temporary commodity rate in Table 1, as adjusted in
accordance with Section 2.1.
ARTICLE III
OTHER CHARGES
SECTION 3.1 DELINQUENCY AND SERVICE RESTORATION CHARGES.
(A) Delinquency Charges. If payment is not received within thirty (30) days of the
billing date, it is considered delinquent, and a late charge of $10 will be levied.
14
(B) Restoration Charges. When service is discontinued because of delinquency in
payment of water bill, the service shall not be restored until all charges, including a restoration
charge, have been paid.
(1) Restoration Charge During Normal Working Hours (8:00 AM — 4:30
PM Monday through Friday, excepting City holidays). The restoration charge
applicable for work requested to be performed during normal working hours of the
Public Works and Utilities Department will be $40.
(2) Restoration Charge After Normal Working Hours. The restoration
charge applicable for work requested to be performed after normal working hours will
be $60.
SECTION 3.2 CHARGE FOR RETURNED CHECKS/NON-SUFFICIENT FUNDS
(NSF)FEES. A fee of $25 shall be charged for the receipt of a check or ACH payment drawn
on a closed bank account and bank accounts with insufficient funds to cover the amount of the
check or ACH payment, whether deliberate or not. This fee also applies when a stop payment
has been requested by the issuer of check, credit card, or ACH payment.
SECTION 3.3 SERVICE CHARGE FOR NEW ACCOUNTS. A charge of $15.00
shall be paid for reading the meter or turning on service for new accounts during normal
working hours. A charge of $60 shall be paid for reading the meter or turning on service for
new accounts after normal working hours.
SECTION 3.4 TEMPORARY WATER SERVICE CONNECTION. Wherever
feasible, recycled water shall be used for construction uses, including water hauled for other
non -potable purposes. This section also applies to water haulers that fill from City fire
hydrants or other City fill stations into vehicles and deliver the water within or outside of the
City service area.
(A) Meter Deposit. Deposits are required at the time of application. Lost meters
will result in forfeiture of deposit. The deposit may be applied to the closing bill and any
remaining amount refunded to the customer.
(1) 1" or Smaller Service Meter. A deposit of $200 shall be required for a
1 -inch or smaller service meter set at curb stop.
(2) Bridge Meter. Bridge meters are used to "bridge" from the City's water
system to a project's water system for the purpose of testing buried water
infrastructure and for providing site water. A deposit of $1,000 shall be required for a
bridge meter.
(3) Fire Hydrant Meter. A deposit of $1,000 shall be required for a fire
hydrant meter.
15
(B) Service Charges.
(1) 1" or Smaller Service Meter. A $1.00 per day service charge shall be
applied for water service, irrespective of the quantity used.
(2) Bridge Meter Hydrant Meter or Water Hauler Meter. A $4.00 per day
service charge shall be applied for water service, irrespective of the quantity used. .
(C) Commodity Charge..The water commodity charge for either potable or
recycled water shall be the Temporary Service and Water Haulers Commodity Rate in Table
1, as adjusted in accordance with Section 2.1. The recycled water commodity charge
addressed in Section 2.2, shall not apply to connections addressed under this section including
water haulers.
(D) Fees. Fees associated with temporary City meters are shown below.
DESCRIPTION
FEE
FIRST TIME METER SET
$65
UNABLE TO SET/TEST METER
$50
RELOCATE METER
$85
RUSH METER SET/RELOCATE (IF SET/RELOCATE REQUEST IS
WITHIN 24 HOURS OF PERMIT ISSUANCE OR RELOCATION
REQUEST)
$150
ARTICLE IV
CITY PROVIDED SERVICES
SECTION 4.1 CITY PROVIDED SERVICES.
(A) Hot Taps. Hot tap fees shall be paid prior to service. Hot taps will be charged
as follows:
SIZE OF HOT TAP (INCHES)
HOT TAP FEE
3/ -2
$400
4-6
$600
8
$700
10-12
$950
(B) Other Services. The City may install domestic or fire services, or provide other
related services, upon request. The cost for each service will be based on an estimate prepared
by the City. The requestor will provide a written request accompanied by a drawing to show
the location of the proposed service. The City will provide an estimate to the requestor. When
the check for the service is received from the requestor the work order will be forwarded to
City crews for installation and coordination. Final costs will be based on actual time and
materials costs plus applicable administrative charges.
16
ARTICLE V
PENALTY CHARGES
SECTION 5.1 TAMPERING WITH CITY METERS. The charge for tampering with
City meters or operating a meter valve is $500 for each occurrence.
SECTION 5.2 ILLEGAL OR UNAUTHORIZED USE OF FIRE HYDRANT. The
fee for any illegal or unauthorized use of a City hydrant shall be $1,000 for each occurrence
plus $50 for each additional day that such use occurs.
ARTICLE VI
SECURITY DEPOSITS
SECTION 6.1 AMOUNT. The City may impose a security deposit of $200 to open an
account or for instances of delinquent payments.
SECTION 6.2 APPLICATION OF DEPOSIT. The City may apply the security
deposit to an account owing to the City, which is delinquent for more than thirty days.
SECTION 6.3 REFUND. Any amounts remaining in the security deposit will be
returned to the customer without interest upon termination of the service and payment of all
charges, fees and indebtedness owed to the City by the customer.
ARTICLE VII
ADJUSTMENT OF BILLS
SECTION 7.1 GENERAL. The City may, upon written request of a customer,
supported by repair bills or other appropriate documentation, adjust such customer's bill in the
case of loss of water due to circumstances beyond the reasonable control of such customer,
such as mechanical malfunction, blind leak, theft of water, vandalism, unexplained water loss
or other unusual or emergency conditions. A determination of whether an adjustment is
granted shall be made at the sole discretion of the City. In making the determination, the City
may take into account the cause of water loss, the customer's opportunity, if any, to detect it,
any negligence or fault of the customer in connection therewith, and the promptness with
which the water loss was discovered, stopped and repairs made.
SECTION 7.2 WATER BILL ADJUSTMENT. The customer's adjusted bill shall be
calculated as follows.
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(A) Average Usage. The "average usage" shall equal the average used during the
same period in the previous one or two years, whichever is available. If the applicant has not
been a customer for a sufficient length of time to make such determination, then the amount of
water used shall be at the discretion of the City.
(B) Excess Usage. From the total water consumption shown on the bill submitted
for correction, the "average usage" will be deducted. The resulting amount is the "excess
usage."
(C) Applicable Rates.
(1) Single Family Residential Customers. The billing adjustment is
calculated at 50% of the "excess usage" multiplied times the Tier 2 rate shown on the
bill submitted for correction.
(2) Multi -Family Residential and Non -Residential Customers. The billing
adjustment is calculated at 50% of the "excess usage" multiplied times the regular
water consumption rate shown on the bill submitted for correction.
(D) Limitations. Water loss adjustments will be limited to two billing periods, and
will also be limited to one adjustment every thirty-six months. The thirty-six month period
begins the first month of the billing period following the last billing period for which the
water loss adjustment was prepared. The adjustment request must be received within 90 days
of the date of the water bill with excessive use. No adjustments will be made to bills more
than two billing periods after the billing period with excessive use.
(E) Adjustments Under $25. No adjustments shall be made for an amount less than
twenty-five dollars ($25).
SECTION 7.3 WASTEWATER BILL ADJUSTMENT. This section addresses adjustments
to wastewater bills due to a water leak.
(A) Single Family Residential and Multi -Family Residential Customers. The
"average usage" or the wastewater winter average (whichever is lower) will be deducted from
the wastewater consumption shown on the bill submitted for correction. The result is excess
wastewater usage. The billing adjustment is calculated at 100% of the excess wastewater
usage multiplied by the wastewater consumption rate shown on the bill submitted for
correction.
(B) Non -Residential Customers. The billing adjustment is calculated at 50% of the
"excess usage" multiplied times the wastewater consumption rate shown on the bill submitted
for correction.
(C) Adjustments Under $25. No adjustments shall be made for an amount less
than twenty-five dollars ($25).
(D) Wastewater Winter Average Calculation. If "excess usage" inflates the system
calculated wastewater winter average, this calculated wastewater winter average will be
replaced with the previous year's winter average. If the customer has not established a
wastewater winter average for the previous year, the winter average amount shall be as
determined by the City.
ARTICLE VIII
SEVERABILITY
SECTION 7.1 Severability. If any provision .of this resolution or the application thereof to
any person or circumstance is held invalid, the remainder of the resolution, including the
application of such part or provision to other persons or circumstances shall not be affected
thereby and shall continue in full force and effect. To this end, provisions of this resolution
are severable. The City Council hereby declares that it would have passed each section,
subsection, subdivision, paragraph, sentence, clause, or phrase hereof irrespective of the fact
that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or
phrases be held unconstitutional, invalid, or unenforceable.
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Attachment 2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA
ADOPTING A NEW RATE SCHEDULE FOR WASTEWATER SERVICE
SUPERSEDING AND REPEALING RESOLUTION NO. 2011-166
WHEREAS, the City of Petaluma operates and maintains a wastewater collection,
treatment, disposal and recycling system; and
WHEREAS, on August 4, 2006, the City entered into a loan Agreement with the State of
California and as part of the Agreement made. contractual assurances that it would adopt a
system of charges to assure reasonable recovery of costs from recipients of the service; and
WHEREAS, the City issued the 2011 Wastewater Revenue Refunding Bonds, which
impose specific debt ratio obligations; and
WHEREAS, wastewater services currently provided by the City include collection,
treatment, and discharge of treated wastewater, and treatment and distribution of recycled water
in a manner to protect the wastewater system, and use of the term "wastewater services" herein
refers to all of those services; and
WHEREAS, the City retained Bartle Wells Associates to develop a Water and Sewer
Rate Study("Study"), which Study is approved by the City Council, and attached to and made a
part of this resolution as Exhibit A; and
WHEREAS, the Petaluma City Council conducted a public meeting on the proposed
rates pursuant to the Study on November 14, 2016, February 13, 2017 and March 20, 2017; and
WHEREAS, a notice of public hearing on the proposed wastewater rates and change in
rate structures ("Rates") was mailed to wastewater utility customers and record owners of
properties that would be impacted by the proposed increases on March 30, 2017, 45 days or more
before the requisite public hearing, in accordance with the requirements of section 6(a)(2) of
Article XIIID ("Proposition 218") of the California Constitution, including notice of the
requirements for submitting a written protest in accordance with Proposition 218; and
WHEREAS, a notice of the proposed Rates and the December 5 public hearing was
published in the Petaluma Argus Courier on May 4, 2017; and
WHEREAS, the Petaluma City Council conducted a public hearing on the proposed
Rates on May 15, 2017, and received testimony and considered all evidence ("the Record")
presented regarding the proposed Rates; and
20
WHEREAS, following the public hearing conducted on May 15, 2017, the City Clerk
canvassed and reported on the number of written protests received concerning the proposed
Rates in accordance with Proposition 218, totaling , in comparison with the number of
parcels affected by the proposed Rates, totaling approximately 19,090; and
WHEREAS, in accordance with the canvass and report of the City Clerk, the number of
written protests received concerning the proposed Rates, totaling , are less than the
minimum number of parcels affected by the proposed Rates for which written protests would be
required to be submitted for a majority protest to exist that would preclude the City Council from
adopting the proposed Rates, thus confirming that a majority protest concerning the proposed
Rates does not exist; and
WHEREAS, after due consideration, the Petaluma City Council finds based on the Study
and the Record that:
1) The proposed Rates as presented herein are necessary to achieve full recovery of the
costs of providing wastewater services to residents and businesses in Petaluma;
2) The proposed Rates as presented herein will not generate revenue in excess of the
cost of providing wastewater services;
3) The proposed Rates as presented herein will not be used for purposes other than
providing wastewater services;
4) The Rates or charges imposed on any parcel or person as an incident of property
ownership shall not exceed the proportional cost of the service attributable to the
parcel;
5) The Rates are for recovery of the cost of providing services that are actually used by
and immediately available to the owners of property subject to the Rates, and are not
based on potential or future uses of services;
6) The Rates are not imposed for general governmental services including, but not
limited to, police, fire, ambulance or library services;
7) Proper notice of the proposed Rates were given to record owners of properties that
would be impacted by the proposed increases, as prescribed by law; and
8) A majority of record owners of properties that would be impacted by the proposed
increases did not protest the proposed Rates; and
WHEREAS, the proposed Rates are "fees" or "charges" as defined in Section 2(e) of
Proposition 218, and are levies other than an ad valorem tax, special tax or assessment, imposed
by an agency upon a parcel or upon a person as an incident of property ownership, including user
fees or charges for property related services; and
21
WHEREAS, the proposed Rates are not a "tax" as defined in Section 1, paragraph (e) of
Article XIII C of the California Constitution ("Proposition 26") because such rates are imposed
for a specific benefit conferred or privilege granted directly to the payor that is not provided to
those not charged, and which does not exceed the reasonable cost to the local government of
providing the service or product; and/or such fees and charges are imposed for a specific
government service or product provided directly to the payor that is not provided to those not
charged, and which does not exceed the reasonable cost to the local government of providing the
service or product; and/or such fees and charges are imposed for the reasonable regulatory costs
to a local government for issuing licenses and permits, performing investigations, inspections
and audits, enforcing agricultural marketing orders and the administrative enforcement and
adjudication thereof; and/or such fees and charges are imposed as a condition of property
development; and
WHEREAS, adoption of revised rates and charges pursuant to this resolution involves
the establishment, modification, restructuring or approval of rates and charges, as identified and
analyzed in the Study, including rates and charges to obtain funds for meeting operating
expenses, purchasing or leasing supplies, equipment or materials, meeting financial reserve
needs and requirements and/or obtaining funds for capital projects necessary to maintain service
within existing service areas. Therefore, adoption of this resolution setting rates and charges is
not a project under the California Environmental Quality Act pursuant to California Public
Resources Code Section 21080(b)(8)(D) and 14 Cal. Code Regs. Section 15273.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Petaluma that the Petaluma City Council hereby adopts this resolution superseding and repealing
in its entirety Resolution 2011-166 effective July 1, 2017, as follows:
22
ARTICLE I
GENERAL
SECTION 1.1 PURPOSE.
(A) Findings. The above recitals are hereby declared to be true and correct and to be
findings of the City Council of the City of Petaluma and are made a part of this resolution.
(B) Revenue. The purpose of the wastewater service charge is to raise revenue for the
cost of operation and maintenance of the City. of Petaluma's wastewater utility used for the
collection, treatment, disposal, and recycling of domestic wastewater, industrial wastewater,
commercial wastewater, and for payment of principal and interest on bonds and capital recovery
costs, and for collection and disposal of storm water.
(C) Resolution. The purpose of this resolution is to establish a method of sharing the
cost of the operation and maintenance of the City's wastewater utility among the users of
wastewater service.
(D) Study. This resolution and the wastewater charges established in this resolution
are based on the City of Petaluma Water and Sewer Rate Study prepared by Bartle Wells
Associates. The Study is attached to and made a part of this resolution as Exhibit A.
ARTICLE II
DEFINITIONS
SECTION 2.1 DEFINITIONS.
"Accessory Dwelling" means as specified in Article 21 of the Petaluma Zoning
Ordinance.
"BOD" means biochemical oxygen demand.
"Director" means the Director of Public Works and Utilities, or his/her designee.
"Dwelling Unit" means:
(A) Any single-family residential dwelling or mobile home designed for occupancy
by one family, each of which shall be deemed equivalent to one dwelling unit, and
(B) Any duplex, triplex, fourplex, townhouse or condominium, apartment house,
lofts, mobile home park or other multi -residential establishment, designed for occupancy for
living purposes by more than one family, which is divided into separate residential units, each of
which is designed for occupancy by one family only, each resident unit shall be deemed
equivalent to one dwelling unit. For example; an apartment complex with 10 apartments shall be
considered to have 10 dwelling units.
"hcf' means hundred cubic feet. One hcf is equivalent to 748 gallons.
"Low Strength" means Non-residential User wastewater with a BOD concentration of
less than or equal to 350 mg/L and a TSS concentration of less than 300 mg/L.
"High Strength" means Non-residential User wastewater with a BOD concentration
greater than 700 mg/L and a TSS concentration of greater than 450 mg/L.
23
"Medium Strength" means Non-residential User wastewater that is not Low Strength or
High Strength.
"Metered Industrial Users" means a Non-residential User whose wastewater discharge is
metered and whose wastewater service charge is based on laboratory analysis of the user's
wastewater. Users placed in this category shall be as determined by the Director.
"Non-residential User" includes, but is not limited to, any commercial, industrial or
institutional customer.
"Residential User" means any single-family residential dwelling or mobile home
designed for occupancy by one family, and any duplex, triplex, fourplex, townhouse or
condominium, apartment house, mobile home park or other multi -residential establishment,
designed for occupancy for living purposes by more than one family, which is divided into
separate residential units, each of which is designed for occupancy by one family only.
"TSS" means total suspended solids.
"Unmetered Residential" means Residential Users whose potable water is provided in
part or in whole by a water source other than the City of Petaluma.
ARTICLE III
RATES
SECTION 3.1 FIXED MONTHLY FEES.
(A) Residential Users. The fixed monthly fee for Residential Users, per dwelling unit,
shall be as set forth in Table 1, as adjusted in accordance with this ARTICLE.
(B) Non-residential Users. The fixed monthly fee for Non-residential Users shall be
as set forth in Table 1, as adjusted in accordance with this ARTICLE.
24
Table 1. Fixed Monthly Wastewater and Wastewater Usage Charges
25
Proposed Base Sewer Rates Effective on or After
July 1
July 1
July 1
July 1
July 1
2017
2018
2019
2020
2021
FIXED MONTHLY CHARGES*
*Fixed monthly charge billed per residential dwelling unitorbased on non-residential metersize.
RESIDENTIAL
Fixed monthly charge per dwelling unit
Single Family Residential
$23.41
$26.17
$28.81
$31.33
$33.74
Multi -Unit Residential
19.90
22.24
24.49
26.63
28.68
Unmetered Residential
86.69
87.42
88.24
88.94
89.74
NON-RESIDENTIAL
Fixed monthly charge based on metersize
Up to 3/4-i nch meter
$23.41
$26.17
$28.81
$31.33
$33.74
1 -inch meter
36.33
41.45
46.36
51.06
55.53
1-1/2 inch meter,
68.45
79.52
90.13
100.29
110.00
2 -inch meter
107.09
125.26
142.69
159.37
175.37
3 -inch meter
197.29
232.06
265.39
297.32
327.91
4 -inch meter
326.13
384.61
440.67
494.38
545.82
6 -inch meter
648.05
765.84
878.77
986.97
1,090.57
METERED INDUSTRIAL
Fixed monthly charge based on meter size
Up to 2 -inch non-magnetic meter
$293.89
$346.45
$396.84
$445.12
$491.34
Larger than 2 -inch non-magnetic meter
648.08
765.86
878.78
986.97
1,090.57
Up to 2 -inch magnetic meter
197.29
232.06
265.39
297.32
327.91
3 -inch magnetic meter
425.04
503.58
578.87
651.02
720.14
4 -inch magnetic meter
681.47
804.86
923.15
1,036.50
1,145.05
6 -inch or larger magnetic meter
1,519.78
1,724.77
1,921.15
2,109.15
2,289.05
SEWER COMMODITY CHARGES*
*Volumetric charge billed per hundred
cubic feet (hcf) of estimated sewer discharge.
RESIDENTIAL
Single Family Residential
$9.04
$8.75
$8.49
$8.23
$8.00
Multi -Unit Residential
9.04
8.75
8.49
8.23
8.00
COMMERCIAL
Billed based on metered water use
Low Strength
8.83
8.54
8.26
7.98
7.70
Medium Strength
11.04
11.12
11.20
11.28
11.34
High Strength
14.51
14.74
14.97
15.20
15.41
METERED INDUSTRIAL
Based on metered use & estimated wastewater
loadings
Flow ($/hcf)
7.13
7.00
6.87
6.75
6.62
BOD ($/I b)
0.79
0.89
0.99
1.09
1.21
SS ($/I b)
0.91
1.02
1.13
1.24
1.37
25
(C) Fixed Monthly and Commodity(Usa (Usage) Charges Annual Increases. Beginning
July 1, 2018 and each July 1 thereafter, Base Sewer fixed and commodity charges will be
adjusted each year to account for changes in cost inflation. Each year starting July 1 Wastewater
Rates will be adjusted by the percentage change in the San Francisco -Oakland -San Jose
Consumer Price Index for All Urban Consumers (San Francisco CPI -U) from the December
2016 index to the index for the December immediately preceding the subject fiscal year (e.g.
SFU fixed charge for July 2020: $15.18 x (December 2019 CPI) / (December 2016 CPI). A
negative percentage change in CPI shall result in no change in the fixed or commodity charges.
SECTION 3.2 USER CHARGES.
(A) Residential Users. In addition to the fixed monthly fee set forth in Section 3. 1,
there shall be a user charge for Residential Users as set forth in Table 1, based on the amount of
wastewater discharged. The amount of wastewater discharged shall be established based on the
average amount of water used for the two lowest use billing months during the winter months.
The billing months used to establish the "winter average" shall generally fall within December,
January, February, March, and April, but actual winter months used for this determination may
vary depending on individual billing cycles or pattern of use, as determined by the Public Works
& Utilities Director. The "winter" average becomes effective each July based on the most recent
winter water usage. If the customer does not have sufficient history to make such determination,
then the amount of water used shall be set at a default of 5.0 hcf for Single Family Residential
Users per Dwelling Unit, and a default of 4.25 hcf for Multi -Family Residential Users per
Dwelling Unit. If water use during any billing month during the year is lower than the
established winter average, then the actual water use will be used to calculate the bill
(B) Non-residential Users. In additional to the fixed monthly fee set forth in Section
3. 1, there shall be a user charge for Non-residential Users, based on the amount of water used or
discharged, as set forth in Table 1.
(1) User Charge for Non -Residential Users with Shared Water Meters. If a
water meter is used by Non-residential Users in different customer classes, the user
charge shall be based on the Non-residential User with the higher wastewater strength.
For example, if a Low Strength user and a High Strength user use the same water meter,
the wastewater user charge shall be based on the High Strength user rate.
(2) Commercial Customers. Commercial customers shall be assessed a
variable user charge based on the strength of the wastewater. Assignment to Low,
Medium, or High strength shall be as determined by the Director, or based on laboratory
analyses of the Non-residential User's wastewater. A State of California Certified
laboratory must conduct the laboratory analysis.
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SECTION 3.3 SPECIAL CHARGES AND FEES.
(A) Sample Collection and Laboratory Analysis. The City shall charge for samples
collected by the City and analyzed by the City or an outside laboratory for the purpose of
determining wastewater charges. Charges shall be assessed for collecting the sample and for
laboratory analysis of the sample.
(1) Collection Charges.
(a) For the Purpose of Determining Wastewater Charges. The charge for
collecting a "grab" sample shall be $75. The charge for collecting a "composite"
sample shall be $250.
(b) For Violation Follow -Up Samples. The charge for collecting a
"grab" sample shall be $100. The charge for collecting a composite sample shall
be $350.
(2) Laboratory Analysis Charges.
(a) Outside Laboratories. Samples analyzed by outside laboratories
shall be charged at cost per sample.
(b) City Laboratory. Samples analyzed by the City's laboratory for
conventional pollutants shall be $125 per sample.
(B) Septic Waste. Discharge of septic waste shall be charged at $0.25 per gallon of
discharge. Discharge may not occur without a permit.
(C) Short -Term Discharge. A short-term discharge fee is hereby established at the
Commercial Sewer Commodity rate in Table 1 for low, medium or high strength as appropriate,
plus a permit fee of $200.00. These fees shall apply to direct temporary discharges from a point
of discharge for which a City connection charge is inapplicable or for which connection charges
sufficient to address the temporary discharge have not been paid, including, but not limited to,
temporary discharges of groundwater. Discharge may not occur without a permit and may not
continue for more than one year from the effective date of permit. If the discharge period
continues beyond one year, discharger will be assessed applicable and then -current wastewater
service fees and may be assessed connection fees. The decision to accept any such temporary
discharge and all requirements pertaining to the acceptance of such temporary discharge shall be
based on an evaluation of the effect on capacity, compliance with regulations, and any other
factors that could affect the overall operations of the wastewater treatment facility. Such
discharges shall fully comply with all applicable federal, state and local laws, regulations and
orders, including, but not limited to, the City's sewer use regulations as described in Chapters
15.48 through 13.76 of the Petaluma Municipal Code.
(D) Hauled Waste. Discharge of liquid waste not exceeding local limits for BOD and
TSS (as established in Petaluma Municipal Code Chapter 15.48) may be accepted at the
wastewater treatment facility. The Hauled Waste discharge fee is hereby established at the
Commercial Sewer Commodity rate in Table 1 for low, medium or high strength as appropriate,
27
with a $500.00 minimum fee, plus a permit fee of $200.00. These fees shall apply to liquid
wastes hauled to and discharged at the wastewater treatment facility. Discharge may not occur
without a permit and may not continue for more than one year from the effective date of permit.
If the discharge period continues beyond one year, discharger will be assessed applicable and
then -current wastewater service fees and may be assessed connection fees. The decision to
accept any such wastes and all requirements pertaining to the acceptance of such wastes shall be
based on an evaluation of the effect on capacity, compliance with regulations, and any other
factors that could affect the overall operations of the wastewater treatment facility. Such
discharges shall fully comply with all applicable federal, state and local laws, regulations and
orders, including, but not limited to, the City's sewer use regulations as described in Chapters
15.48 through 15.76 of the Petaluma Municipal Code.
(E) High Strength Waste (HSW). Discharge of liquid waste exceeding local limits
for BOD and TSS (as established in Petaluma Municipal Code Chapter 15.48) shall only be
accepted at the Ellis Creek Water Recycling Facility HSW facility. The HSW fee shall be
established based on a cost of service analysis as approved and amended from time -to -time by
the Public Works and Utilities Director. The HSW permit fee shall be $200.00. Discharge may
not occur without a permit and may not continue for more than five years from the effective date
of permit. If the discharge period continues beyond five years, discharger must reapply for a
permit. The decision to accept any such HSW discharge and all requirements pertaining to the
acceptance of such HSW discharge shall be based on an evaluation of the effect on capacity,
compliance with regulations, and any other factors that could affect the overall operations of the
wastewater treatment facility and shall be made solely by the Public Works and Utilities
Director. Such discharges shall fully comply with all applicable federal, state and local laws,
regulations and orders, including, but not limited to, the City's sewer use regulations as
described in Chapters 15.48 through 15.76 of the Petaluma Municipal Code.
SECTION 3.4 RATES FOR WASTEWATER USERS OUTSIDE OF THE CITY
LIMITS.
(A) Residential Users. Residential users outside of the City limits shall be charged
$0.80 per month for each dwelling unit in addition to the charge set forth in Section 3.1.
(B) Non -Residential Users. Non-residential users outside of the City limits shall
be charged $0.80 per month for each account in additional to the charge set forth in Section 3.1.
ARTICLE IV
SEVERABILITY
SECTION 7.1 Severability. If any provision of this resolution or the application thereof to any
person or circumstance is held invalid, the remainder of the resolution, including the application
of such part or provision to other persons or circumstances shall not be affected thereby and shall
continue in full force and effect. To this end, provisions of this resolution are severable. The
City Council hereby declares that it would have passed each section, subsection, subdivision,
paragraph, sentence, clause, or phrase hereof irrespective of the fact that any one or more
sections, subsections, subdivisions, paragraphs,' sentences, clauses, or phrases be held
unconstitutional, invalid, or unenforceable.
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Attachment 3
L U
r8�s
Notice of Public Hearing on Proposed Increases in
Water & Wastewater Rates and Changes to Rate Structures
Dear Property Owner or Customer:
The City of Petaluma is proposing to gradually increase its water and sewer rates over the next
five years to provide adequate funding for operating and maintenance expenses and high-priority
capital improvements needed to support safe and reliable water and sewer service. The City will
hold a public hearing on the proposed rates as follows:
Date: May 15, 2017
Time: 6:45 p.m. or as soon thereafter as the matter may be
heard
Place: Petaluma City Hall Council Chambers
11 English Street
Petaluma, CA 94952
The City's water and sewer utilities are self-supporting enterprises that rely primarily on
revenues from service charges to fund the costs of providing service. As such, water and sewer
rates must be set at levels adequate to fund the costs of operations, maintenance, debt service,
wholesale water supply from the Sonoma County Water Agency, and capital improvement needs
including rehabilitation and replacement of aging infrastructure. With the proposed rate
increases, the City's combined water and sewer bills for a typical home will remain in the middle
of the range compared to other regional zttility agencies.
Compliance with Proposition 218. Proposition 218 establishes procedural requirements for
imposition of new and increased water and sewer charges. The procedural requirements include
providing mailed notice of the amount of the proposed charge, the basis for calculating the
charge, the reasons for the charge, and the date, time and location of a public hearing on the
proposed charge. This Notice is being provided to Petaluma property owners and water and
sewer ratepayers in accordance with Proposition 218. The proposed rate changes, basis for rate
calculation, reasons for the rate changes, and information on a public hearing on the proposed
rate changes are all provided within this Notice.
PROPOSED WATER RATES
Proposed water rate adjustments are needed to keep rates aligned with the cost of providing
service and to fund infrastructure improvements to the City's aging water system. Infrastructure
improvements include water storage tank retrofits, water main and service replacements, new
recycled water lines, well repairs and other high-priority capital improvements needed to support
safe and reliable water service.
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The City is proposing to phase in a series of water rate increases over the next five years as
shown on the table on the following pages. Water rates include two components:
Fixed Monthly Service Charges: These are fixed charges billed per residential dwelling
unit or per meter size for non-residential accounts. These charges are billed
independently of water consumption. The proposed rates include a fixed charge per
multi -family residential dwelling unit that is set at 60% of the fixed charge for a single
family home based on lower average water demand.
Water Consumption Charges: These charges are billed based on metered water
consumption. Water Consumption Charges for single family residential customers are
billed according to a 4 -tiered rate structure with water first billed in Tier 1 and
subsequently billed in higher tiers as water use increases. All other customers pay a
uniform rate for all water use. The rate for Water Consumption Charges is set per
hundred cubic feet (hcf), with 1 hcf equal to approximately 748 gallons of water. Your
bill shows consumption charges calculated by the cubic foot, hence, the proposed Tier 1
Single Family Residential Rate of $3.52 per hcf would be shown on your bill as $0.0352
per cubic foot, times your water consumption measured in cubic feet.
The proposed water rates are designed to generate an average overall increase in water revenues
of 3.5% per year, prior to any adjustments for inflation or wholesale water rate increases. The
exact impacts on each bill may vary depending on customer class, meter size, and metered water
use. The proposed water rate adjustments include a gradual increase in the City's Fixed Monthly
Charges designed to improve revenue stability and align rates with the cost of providing service.
The proposed rates also include a revision to the Single Family Residential Water Consumption
Charge Tiers as shown below, with no increase to the base Tier 1 Single Family Residential
Consumption Charge over the next five years excluding increases due to inflation and changes in
the SCWA wholesale water rates.
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*The Proposed Base Water Rates will be adjusted each year to account for annual pass-throughs for a) cost
inflation and b) wholesale water rate increases adopted by Sonoma County Water Agency (SCWA). Each year
starting July 1, 2018, the Proposed Base Rates effective July 1 will be adjusted by the percentage change in the
Consumer Price Index from the December 2016 index to the index for December immediately preceding the
upcoming fiscal year. Subsequently, the Base Water Consumption Charges will be adjusted by the increase in
cents in the wholesale water rate per hcf charged to the City of Petaluma for water supply.
Sample Monthly Water Bill Calculation for a Typical Single Family Home
Effective July 1, 2017, the water bill for a typical single-family home using 7 hcf of water per
month would be calculated as follows:
Fixed Monthly Charge
�kOROS "T�R TES
$9.57
First 4 hcf x $3.52 Next 3 hcf x $3.95 Subtotal
$14.08 $11.85 $25.93 $35.50
Current
Proposed Base Water Rates Effective on or After
Water
July 1
July 1
July 1
July 1
July 1
Rates
2017
2018
2019
2020
2021
FIXED MONTHLY CHARGES*
Fixed monthly charge billed per residential dwelling unit or based on non-residential metersize.
RESIDENTIAL
Fixed charge per residential dwelling
unit.
Single Family: Up to V Meter
$7.39
$9.57
$11.52
$13.39
$15.18
$16.88
Multi -Family: Per Dwelling Unit
5.74
6.91
8.03
9.11
10.13
ALL OTHER CUSTOMERS
Fixed charge based on water meter size.
Up to 3/4 -inch meter
$7.39
$9.57
$11.52
$13.39
$15.18
$16.88
1 -inch meter
10.75
14.40
17.70
20.86
23.89
26.80
1-1/2 inch meter
19.11
26.46
33.15
39.56
45.71
51.61
2 -inch meter
29.20
40.98
51.73
62.03
71.92
81.37
3 -inch meter
52.72
74.83
95.04
114.43
133.02
150.83
4 -inch meter
86.33
123.20
156.93
189.29
220.32
250.05
6 -inch meter
170.28
244.06
311.61
376.41
438.56
498.10
WATER CONSUMPTION CHARGES*
Volumetric charge billed per hundred cubic feet (hcf) of metered water use.
SINGLE FAMILY RESIDENTIAL
Rate Tier CurrentTiers
Proposed Tiers
Tier 1 0 - 8 hcf
$3.52
0 - 4 hcf $3.52
$3.52
$3.52
$3.52
$3.52
Tier 2 9 -16 hcf
4.20
5 - 8 hcf 3.95
3.95
3.95
3.95
3.95
Tier 3 17 - 24 hcf
5.24
9 -16 hcf 4.50
4.52
4.53
4.54
4.56
Tier 4 25+ hcf
6.82
17+ hcf 5.35
5.37
5.39
5.40
5.40
ALL OTHER CUSTOMERS
All Water Use
$3.91
$3.95
$3.95
$3.95
$3.95
$3.95
*The Proposed Base Water Rates will be adjusted each year to account for annual pass-throughs for a) cost
inflation and b) wholesale water rate increases adopted by Sonoma County Water Agency (SCWA). Each year
starting July 1, 2018, the Proposed Base Rates effective July 1 will be adjusted by the percentage change in the
Consumer Price Index from the December 2016 index to the index for December immediately preceding the
upcoming fiscal year. Subsequently, the Base Water Consumption Charges will be adjusted by the increase in
cents in the wholesale water rate per hcf charged to the City of Petaluma for water supply.
Sample Monthly Water Bill Calculation for a Typical Single Family Home
Effective July 1, 2017, the water bill for a typical single-family home using 7 hcf of water per
month would be calculated as follows:
Fixed Monthly Charge
Water Consumption Charge Total
$9.57
First 4 hcf x $3.52 Next 3 hcf x $3.95 Subtotal
$14.08 $11.85 $25.93 $35.50
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PROPOSED SEWER RATES
Proposed sewer rate increases are needed to fund projected operating and maintenance expenses,
pay for capital improvements to address existing infrastructure deficiencies, and keep sewer rates
aligned with the cost of providing service. Capital improvement needs include wastewater
treatment plant upgrades, rehabilitation and replacement of sewer lift stations, replacement of
aging sewer system pipelines, and other high-priority infrastructure improvements needed to
support safe and reliable sewer service.
The City is proposing to phase in a series of sewer rate increases over the next five years as
shown on the table on the following page. Sewer rates include two components:
• Fixed Monthly Service Charges: These are fixed charges billed per residential dwelling
unit or per meter size for non-residential accounts. These charges are billed
independently of consumption. The proposed rates include a fixed charge per multi-
family residential dwelling unit that is set at 85% of the fixed charge for a single family
home.
• Sewer Commodity Charles: The sewer commodity charges are billed based on metered
water consumption as an estimate of sewer discharges. To estimate your monthly sewer
discharge quantity for each month of the year, Residential Commodity Charges are billed
based on the average water use of the two lowest winter months. Commercial
Commodity Charges are based on metered water use. Metered Industrial customers are
billed based on metered wastewater flow and wastewater loadings estimated for each
customer. The rate for sewer Commodity Charges is set per hundred cubic feet (hcf), with
1 hcf equal to approximately 748 gallons. For billing convenience, your bill will calculate
your commodity change based on cubic feet, hence, the City's proposed Residential Rate
of $9.04 per hcf will be shown on your bill as $0.0904 per cubic foot times your
consumption in cubic feet. You can endeavor to reduce your sewer bill by minimizing
your water use for at least two monthly billing periods during the winter because
the average of these two low monthly bills will set your monthly sewer consumption
for the rest of the year.
The proposed sewer rates are designed to generate an average overall increase in sewer rate
revenues of 1.5% per year, prior to any adjustments for inflation. The exact impacts on each bill
.may vary depending on customer class and billed sewer use. The proposed sewer rate
adjustments include a gradual increase in the City's Fixed Monthly Charges coupled with a
decrease in the base volumetric Sewer Commodity Charges. This gradual adjustment is designed
to improve revenue stability and align rates with the cost of providing service.
Sample Sewer Bill Calculation for a Typical Single Family Home
Effective July 1, 2017, the sewer bill for a typical single-family home with billed sewer usage of
5 hcf per month would be calculated as follows:
Fixed Monthly Charge
Sewer Commodity Charge
Total
$23.41
1 5 hcf x $9.04 = $45.20
$68.61
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*The Proposed Base Sewer Rates will be adjusted each year to account for annual pass-throughsfor cost! nflation. Each
year starting July 1, 2018,t he Proposed Base Rates effective July 1 will be adjusted by the percentage change in the
Consumer Price Index from the December 2016 index to the index for December immediately preceding the upcoming
fiscal year.
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Current
Proposed Base Sewer Rates Effective on or After
Sewer
July 1
July 1
July 1
July 1
July 1
Rates
2017
2018
2019
2020
2021
FIXED MONTHLY CHARGES*
Fixed monthly charge billed per
residential dwelling unit or based
on non-residential meter size.
RESIDENTIAL
Fixed monthly charge per dwelling unit
Single Family Residential
$20.13
$23.41
$26.17
$28.81
$31.33
$33.74
Multi -Unit Residential
17.54
19.90
22.24
24.49
26.63
28.68
Unmetered Residential
93.40
86.69
87.42
88.24
88.94
89.74
NON-RESIDENTIAL
Fixed monthly charge based on metersize
Up to 3/4 -inch meter
$20.13
$23.41
$26.17
$28.81
$31.33
$33.74
1 -inch meter
30.38
36.33
41.45
46.36
51.06
55.53
1-1/21nch meter
55.79
68.45
79.52
90.13
100.29
110.00
2 -inch meter
86.41
107.09
125.26
142.69
159.37
175.37
3 -inch meter
157.88
197.29
232.06
265.39
297.32
327.91
4 -inch meter
259.96
326.13
384.61
440.67
494.38
545.82
6 -inch meter
514.94
648.05
765.84
878.77
986.97
1,090.57
METERED INDUSTRIAL '
Fixed monthly charge based on metersize
2 -inch ultrasonic meter
$234.40
$293.89
$346.45
$396.84
$445.12
$491.34
10 -inch ultrasonic meter
514.98
648.08
765.86
878.78
986.97
1,090.57
2 -inch magnetic meter
157.88.
197.29
232.06
265.39
297.32
327.91
3 -inch magnetic meter
336.43
425.04
503.58
578.87
651.02
720.14
4 -inch magnetic meter
541.98
681.47
804.86
923.15
1,036.50
1,145.05
6 -inch magnetic meter
1,280.29
1,519.78
1,724.77
1,921.15
2,109.15
2,289.05
SEWER COMMODITY CHARGES*
Volumetric charge billed per hundred cubic feet (hcf) of estimated sewer discharge.
RESIDENTIAL
Based on a) average of two lowest of four
low use months of metered winter water use or b) actual water use
Single Family Residential
$9.14
$9.04
$8.75
$8.49
$8.23
$8.00
Multi -Unit Residential
9.14
9.04
8.75'
8.49
8.23
8.00
COMMERCIAL
Billed based on metered water use
Low Strength
8.95
8.83
8.54
8.26
7.98
7.70
Medium Strength
10.97
11.04
11.12
11.20
11.28
11.34
High Strength
14.28
14.51
14.74
14.97
15.20
15.41
METERED INDUSTRIAL
Based on metered use & estimated wastewater loadings
Flow ($/hcf)
7.12
7.13
7.00
6.87
6.75
6.62
BOD ($/I b)
0.68
0.79
0.89
0.99
1.09
1.21
SS ($/I b)
0.79
0.91
1.02
1.13
1.24
1.37
*The Proposed Base Sewer Rates will be adjusted each year to account for annual pass-throughsfor cost! nflation. Each
year starting July 1, 2018,t he Proposed Base Rates effective July 1 will be adjusted by the percentage change in the
Consumer Price Index from the December 2016 index to the index for December immediately preceding the upcoming
fiscal year.
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PASS-THROUGH RATE ADJUSTMENTS FOR INFLATION & WHOLESALE WATER
RATE INCREASES
Pursuant to California Government Code 53756, the City plans to adjust its water and sewer rates
each year starting July 1, 2018 to account for, a) cost inflation, and b) future wholesale water rate
increases. Prior to initiating any pass-through rate adjustments, the City will send notification to
all customers at least 30 days prior to implementation informing them of the rate adjustments.
• Future inflation pass-through rate adjustments will be implemented by adjusting the
City's Proposed Water and Sewer Rates by the percentage change in the Consumer Price
Index (CPI) for the San Francisco Bay Area from the base reference index of [269.483
for December 2016] to the index for December preceding each fiscal year. For example,
if the CPI increases by 2% from December 2016 to December 2017, the City would
adjust its adopted water and sewer rates shown in the previous tables by 2% starting July
1, 2018.
• Wholesale water rate pass-through adjustments will be implemented by adjusting the
City's Water Consumption Charges by the increase in Sonoma County Water Agency's
wholesale water rate per hcf from the adopted rate of $1.94 effective July 1, 2017. For
example, if SCWA increases its wholesale water rate to $2.08 per hcf effective July 1,
2018, the City would be authorized to increase all components of its Water Consumption
Charges by $0.14 per hcf starting July 1, 2018.
HOW TO SUBMIT A WRITTEN PROTEST
Property owners or customers may file written protests against the proposed rate increases.
Pursuant to California law, protests must be submitted in writing and must a) identify the
affected property or properties, such as by address, Assessor's Parcel Number, or customer
account number, b) include the name and signature of the property owner or customers
submitting the protest and c) indicate opposition to the proposed water and/or sewer rate
increases. Protests submitted by e-mail, facsimile or other electronic means are not considered
valid written protests. The proposed rates cannot be adopted if written protests are received from
a majority.of affected parcels with one written protest counted per parcel. Written protests can be
mailed or delivered to: Attn: City Clerk, City of Petaluma, 11 English Street, Petaluma, CA
94952. All protests must be submitted prior to the close of the Public Hearing.
WHAT IS THE CITY DOING TO CONTROL COSTS?
The City has taken steps to control the costs of utility service and looks for opportunities to save
money at every possibility. In the water area, savings are being achieved by:
Increased water conservation efforts to reduce water waste, resulting in less need for
potable water from the Sonoma County Water Agency, and lower peak demands
resulting in less need for pumping. Significant funding for water conservation programs,
including turf replacement and rebate incentives, comes from grant funding.
The recently extended Recycled Water service to Kaiser Permanente Medical Facility
was largely funded by Kaiser and will'increase recycled water use in the Oakmead
Business Park area. The Sonoma Mountain Recycled Water Main project, which will add
the Junior College and two secondary school sites to the recycled water system, is
substantially funded by a State Proposition 1 grant.
Projects are being redesigned to save money such as the Paula Lane Water Reservoir
Rehabilitation Project. This project was originally designed to remove the existing
6 35
reservoir and construct two new ones. After a thorough evaluation, that project was re-
designed to rehabilitate the existing steel reservoir and not build a second one because it
is not needed.
• Implementation of an automatic meter reading system that saves considerable staff time
in reading of the water meters and provides early detection for customers with leaks.
• Recent waterline projects on E. Washington and Petaluma Boulevard are being designed
and managed in-house at considerable savings in consulting fees.
• In the wastewater service area, savings are being achieved by;
• Participation in a Bay Area purchasing pool for chemicals, resulting in lower chemical
costs based on economies of scale.
• Enhanced use of SCADA (Supervisory Control and Data Acquisition) systems to
remotely monitor wastewater operations, resulting in less overtime and reduced staff
costs; and less costly repairs and clean-ups due to undetected incidents.
• Installation of more efficient equipment to reduce chemical use and reduce energy costs.
• As with Water, routine projects such as the South Boulevard Sewer Trunk Replacement
Project and the Weller/D Street Sewer. Improvements are being designed and managed in-
house to minimize consulting fees.
• Expansion of recycled water use to agricultural and urban irrigators, which increases our
revenues to offset other operating costs.
• Modifications to Sewer Capacity Fee regulations that require industrial users to
"purchase" additional sewer capacity from the City when their businesses expand
production and increase sewer flows. Funds from industry are used to enhance and
expand existing systems to meet the higher flows but also benefit all customers by
increasing system reliability.
For additional information or questions, please contact the City of Petaluma's
Public Works & Utilities Department, Attention Jason Earl, at 707-778-4546 or email
jearl@ci.petaluma.ca. its, or via mail at 202 N. McDowell Blvd., Petaluma, CA 94954.
Connect with its on social media:
www.Facebook.com/CityofpetalumalandtwittetWetalumaCityGov
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PRSRT STD
U.S. POSTAGE
PAID
PETALUMA, CA
PERMIT NO. 255
Jg�$
City of Petaluma
11 English Street
Petaluma, CA 94952
Notice of Public Hearing on Proposed Increases in Water and Wastewater Rates
Protecting Public Health and the Environment
Our aging infrastructure requires major rehabilitation and investment. A rate increase is
needed to fund critical upgrades that protect public health and the environment.
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