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notice, or something less onerous. Essentially, one the notice is issue the Council can elect to maintain or deepen the discount (or maintain or increase the threshold) but not the reverse. He suggested that if the Council wanted to retain the ability to examine and perhaps modify the threshold in October, the notice should state a threshold of 20 or 30 CCF rather than 40 CCF. Vice Mayor Brown said she agreed that the variable is worth considering. She explained that her intent in supporting the proposed senior discount decrease to 15% was to protect those who are perhaps seniors and are truly low income, rather than simply provide a 20% discount to someone who meets the age requirements but is more than capable of paying the standard rates. Ms. Wagner continued her presentation, explaining that the sewer enterprise currently maintains the sewer collection system within Ruby Hills while the actual service of sewage treatment is provided by the City of Livermore. Over the last decade the city has received an administrative fee for providing these services but has not recovered the cost of system maintenance. Therefore, Ruby Hills customers will need to be transitioned to the full single-family local collection charge over the next 2 years. Effective October 15, 2015 the charge would increase from $4.32 to $12.50 and then on July 1, 2016 to the full rate effective at that time. Despite the proposed increases and pass through of all Zone 7, DSRSD and City of Livermore rates, the city will continue to have some of the lowest combined water and sewer rates in the Bay Area. Using a low level single family residential user as an example, the city's water bill of $65.62 compares favorably to both Livermore ($81.02) and DSRSD ($97.94). Sewer rates compare favorably as well with the city only slightly higher than that of DSRSD due to a somewhat costly uphill pumping system. Ms. Wagner stated that staff recommends that the Council authorize staff to mail the Proposition 218 notice to ratepayers regarding the proposed changes in both water and sewer rates and to set the public hearing for consideration on October 6, 2015. In the meantime she and members of both utilities will be holding community workshops (August 5th and 20th) and meeting with the Chamber of Commerce's Economic Development and Government Relations Committee as well as the city's Economic Vitality Committee. Councilmember Narum noted that the draft notice contained considerable discussion regarding the implementation of drought rates but not how they are removed, and asked staff to explore some language in that regard. She also noted that, as proposed, a user's bill has the potential to increase 4 times over a 12 month period. She felt that was somewhat excessive and perhaps difficult to budget and asked staff to consider whether it might be limited to twice yearly. Ms. Wagner reminded her that the city's past practice of absorbing pass through rate increases has been identified as unsustainable. While DSRSD's annual increase coincides with the annual increase to sewer rates, the same cannot be said Zone 7 or the City of Livermore. This makes it difficult to time rate increases while still being able to pass through these increases as needed. City Manager said staff would return on October 5, 2015 with a more detailed analysis on whether that is feasible. Mayor Thorne said there were no speakers to address this item. Councilmember Pentin requested support to lower the CCF threshold relative to discounts for Proposition 218 purposes, which would allow the Council to further explore its benefits versus a modified discount rate. He asked and Mr. Smith confirmed that drought penalties are applied only to those users who fail to meet reduction targets and exceed 30 CCF, which he thought also supported his argument. He asked to reduce the published threshold to 20 CCF to allow the Council some flexibility in October. City Council Minutes Page 10 of 17 July 21,2015