RES 2024025 - Laserfiche WebLink

31 senior customers. The discount program applies to the City’s water fixed and variable charges and Zone 7-related charges. The City participates in the Low Income Household Water Assistance Program (“LIHWAP”), which is a limited-term, federally-funded program that offers assistance to help low- income households pay residential water and sewer bills and manage their residential water utility costs. LIHWAP was established by Congress in December 2020. The program ended on March 31, 2024. The City also participates in the California Water and Wastewater Arrearages Program. Through $985 million in federal funding allocated by the state legislature, the State Water Board created the California Water and Wastewater Arrearages Payment Program to provide relief to community water and wastewater systems for unpaid bills related to the pandemic. The funding comes from the federal American Rescue Plan Act of 2021 and was authorized by Governor Newsom and the California State Legislature. Rate Setting Process. The City is required to annually review water sales revenue as part of the budgetary process. In May every odd numbered year, the City Manager submits to the City Council a two-year proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and expenses and the means of financing them. Separate rate studies and public hearings for utility rates are conducted to comply with the requirements of Proposition 218 and obtain citizen comments. The City Council adopts utility rates by ordinance. The Council adopted a two-year rate increase on November 7, 2023 and the City plans to go through the Proposition 218 process every two years, which is less than the required every five years. The budget is adopted, prior to June 30, through passage of appropriate resolutions. The final adopted budget is subject to amendment to reflect any significant changes in expenditures or revenues due to State or federally mandated programs, emergencies, or other unforeseen occurrences. The City’s budget guidelines state that: • Water customer rates and fees will be reviewed and adjusted every two to five years, if necessary. • All utility enterprise funds will be operated in a manner similar to private enterprise, and as such, the City will set fees and user charges at a level that fully supports the total direct and indirect cost of the activity, including depreciation of assets, overhead charges, and reserves for unanticipated expenses and capital projects. • The City’s General Fund reimburses the Water Enterprise Fund for the senior and low-income discount programs as described above. • The City will maintain a working capital reserve in the Water Fund of approximately 30% to 40% of the annual operating and maintenance expenses with a reserve target of 35%. See “RISK FACTORS – Proposition 218” for information about the City’s compliance with Proposition 218 in connection with adopting rates for the Water System. 2023 Rate Study. In 2023, Raftelis Financial Consultants, Inc. (“Raftelis”) was retained by the City to provide a Water and Recycled Water Rate Study Report (“2023 Rate Study”). The primary objectives of the 2023 Rate Study were to: