23 - Laserfiche WebLink

THE CITY OF pLE ASANTONC CITY COUNCIL AGENDA REPORT 23 July 21, 2015 City Manager TITLE: OVERVIEW OF WATER AND SEWER RATES AND AUTHORIZATION TO MAIL THE PROPOSITION 218 NOTICE OF PUBLIC HEARING TO BE HELD ON OCTOBER 6, 2015 SUMMARY Completion of a comprehensive analysis of water and sewer rates is a City Council priority and consistent with the City's water and sewer policies. The policies require the City of Pleasanton to operate these utilities on an enterprise basis, whereby the costs of services are borne entirely by the users of the system. The City last reviewed the rates in September 2010. Proposition 218 requires that any utility that has an annual cost of living increase in its rates, review those rates a minimum of every five years. Based on all of the above, the City contracted with HDR Engineering, Inc. to complete a water and sewer rate study. Local water and sewer rates were increased in 2010 and have been annually adjusted by the change in the consumer price index (CPI). During this time, Pleasanton charged its customers 87.5% of the cost of purchased water from Zone 7 (the wholesaler). While the City has been able to absorb these increases, not passing through 100% of the Zone 7 rate to its customers is now placing a significant strain on the City's water enterprise, which over the years has not been, nor should be, reliant on the General Fund to operate. To ensure that both the water and sewer enterprises remain fiscally solvent and that appropriate reserves are in place to fund system maintenance and replacement obligations, staff is recommending for the average residential customer an average increase of $10.73 per bi- monthly period for water and sewer rates effective October 15, 2015. This results in an overall rate increase of 6.7 %. The following table demonstrates this recommendation for a residential customer who uses 30 100 cubic feet (Ccf) of water per bi- monthly billing period (22,440 gallons of water over a 60 day billing period): AVERAGE RESIDENTIAL ACCOUNT BI- MONTHLY BILLING PERIOD *assumes 5/8" meter charge Based on (30Ccf) Bi- monthly Monthly Current Bill Recommended Rates $ Difference $ Difference Sewer Local $ 24.46 $ 25.19 Regional 52.09 52.09 Total 76.55 77.28 Water 83.20 93.20 Total $159.75 $170.48 $10.73 $5.37 *assumes 5/8" meter charge