HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 11/22/2011 (Special)0 East Valley
Water District
SPECIAL MEETING OF THE BOARD OF DIRECTORS
AND PUBLIC HEARING
NOVEMBER 22, 2011 - 6:00 PM
EAST VALLEY WATER DISTRICT
3694 HIGHLAND AVE #30, HIGHLAND, CA.
AGENDA
CALL TO ORDER
PLEDGE OF ALLEGIANCE
1. PUBLIC COMMENTS
2. PUBLIC HEARING — Consideration of sewer rates and charges
a. Staff Presentation
b. Public Comments
3. CLOSE OF PUBLIC HEARING
4. ADOPTION OF ORDINANCE NO. 381 "Establishing Rates and Charges
for Sewer Service"
5. ADJOURN
Pursuant to Government Code Section 54954.2(a), any request for a disability - related
modification or accommodation, including auxiliary aids or services, that is sought in order to
participate in the above agendized public meeting should be directed to the District's
Administrative Manager at (909) 885 -4900.
East Valley
tooWater District
Staff Report
Meeting Date: November 22, 2011
TO: Board of Directors
SUBJECT: Proposed Increase to Sewer Treatment Rates charged by the District
SUMMARY:
Issue — The rates for sewer treatment currently charged by EVWD to its
customers are not sufficient to cover the monthly sewer
treatment charges paid to the City of San Bernardino
Recommendation — Adopt Ordinance No. 381 establishing revised rates and charges
for sewer services
Fiscal Impact— Avoid potential sewer treatment rate deficits of $88,000 per
month resulting from the disparity between revenue received
and rates paid. Losses resulting from not implementing
increased City of San Bernardino sewer treatment rates will be
approximately $388,000 by December 31, 2011
Previous Related Action — Adopted 2011 -12 fiscal year budget that did not contemplate an
increase in Sewer Treatment Rates
BACKGROUND
On January 11, 2011, the San Bernardino City Council voted to approve a two -step sewer treatment
rate increase. The first step, effective February 1, 2011, included a $1.00 (6.3 %) increase for
residential customers, and commercial rate increases ranging from $.00 to $35 per Hundred Cubic
Feet (HCF) of water usage, depending on the type of commercial entity. The second step, effective
January 1, 2012, includes an additional $1.50 (8.8 %) increase for residential customers, and
commercial rate increases again of $.00 to $.35 per HCF.
The District is obligated to pay sewer treatment rates charged by the City in accordance Joint Power
Agreements dated 1957 and 1965. In order to then pass these charges on to District customers, the
District must adopt sewer treatment rates under its own rate hearing process. The City requested that
the District complete the rate hearing process, and begin paying the increased rates, as of April 1,
2011. The District has been paying the City's increased rates since April 1 st, but to date, has opted to
absorb the increased charges rather than passing them on to our customers.
SR# 0045
DISCUSSION
Between the months of April and June of 2011, the end of our previous fiscal year, the District lost
$129,132 by absorbing City rate increases. The District lost an additional $107,777 between July and
October 2010 while absorbing previous sewer treatment rate increases on behalf of District
customers. Combined, these losses attributable to sewer treatment rate differentials contributed
significantly to a $422,833 operating loss in the District's sewer fund for fiscal year 2010 -11.
In the current fiscal year, the District will lose approximately $260,000 between July and December
as a direct result of absorbing the sewer treatment rate differential - an average of $43,333 per month.
On January 1, 2012, when the second step of the City rate increases become effective, the monthly
loss would increase to approximately $88,000 per month. If the District does not adopt an ordinance
to align sewer treatment rates being charged to customers, with those being paid to the City, the
potential impact to the District's sewer fund would be $788,000 in lost operating income.
Continuing to use the District's operating budget to fund the City's increased treatment costs is
having a negative impact on our current budget situation and will likely impact our ability to maintain
our sanitary sewer system as required. The District is required to maintain its public sewer system in
order to comply with provisions of the State Water Resource Control Board's directive, the Capacity
Management Operating & Maintenance, or CMOM, dealing with sanitary sewer systems. Since the
City has passed the increased costs onto the District, staff has worked diligently to identify savings
and reduce our operating expenses; however, the increased costs for sewer treatment as promulgated
by the City have exceeded these efforts to reduce expenses to a manageable level.
Staff recommends that the District adopt Ordinance No. 381, with an effective date of January 1,
2012. This will bring the District's sewer treatment rates into exact alignment with the City of San
Bernardino sewer treatment rates that will become effective on the same date.
Res ctfully Submitted,
Brian W Tomp <ins
Chief Financial Officer
Attachments
by,
Robert A. DeLoth
Interim General Manager
SR# 0045
A East Valley
Water Disvict
East Valley Water District
Public Hearing
Robert DeLoach
Interim General Manager
AE..Valk,
Water District
Our Mission at East Valley Water District is
to provide our customers with a safe and
reliable water supply that is delivered at a
fair and cost - effective price.
11/18/2011
1
11/18/2011
2
• EVWD receives no profit from its water and
sewer collection rates.
• EVWD cannot charge its customers more than the
actual cost of providing water and sewer collection
services.
• EVWD collects no tax money.
• Customers pay only for the benefits they receive.
• EVWD maintains a collection
system for residential and
commercial sewer
(aka: wastewater).
• EVWD does not have a sewer
treatment facility.
EVWD contracts with the City of
San Bernardino Water Department
for sewer treatment.
• EVWD's agreement with the City
of San Bernardino requires the
District to collect sewer treatment
rates on behalf of the City.
0
e
W t
Wateer r District
11/18/2011
3
• The City of San Bernardino must comply with state
and federal mandates that require replacement and
upgrades to ensure public health and safety.
• San Bernardino City Council held a public hearing to
review the findings of a independent rate study.
• The rate increases recommended by San Bernardino
City staff were approved.
U
The City of San
Bernardino began
charging EVWD the
increased sewer
treatment rate in
January 2011.
11/18/2011
Ell
DEm Valley
Water Dmria
EVWD has been subsidizing its customers
by billing at old sewer treatment rates
while remitting payment to the
City of San Bernardino at the increased rate.
• Since January, EVWD has investigated
alternatives to the City's rate increase.
• EVWD has reduced its operating budget to
absorb the increase for District customers.
• EVWD cannot subsidize the City's rate
increase indefinitely.
• A rate increase is necessary to ensure the
District's exceptional financial standing.__
11/18/2011
5
District
• East Valley Water District is
required to provide customers
with 45 day notice of a public
hearing.
• Notice mailed to all customers
on Friday, October 7, 2011.
• Proposition 218 provides
opportunity for protest.
50% +1 is required to reject
rate proposal.
W t
Wateer r District
• Communication with
- City of Highland Officials
- Large Users
- Interested Citizens 4*4 -
»
- Media
xn wuc
• Highland Community News
Op -Ed
• Postcard Mailer
• Updated Website z
11/18/2011
AE..vV 11
Wazer Discri¢
Conduct a public hearing and
adopt Ordinance No. 381
establishing revised rates and
charges for sewer services.
11/18/2011
7
ORDINANCE NO. 381
AN ORDINANCE OF THE BOARD OF DIRECTORS OF
THE EAST VALLEY WATER DISTRICT
ESTABLISHING RATES AND CHARGES FOR SEWER SERVICE
AND SUPERSEDING PORTIONS OF ORDINANCE NO. 377
WHEREAS, East Valley Water District ( "District ") is a county water district organized and
operating pursuant to California Water Code Section 30000 et seq.; and
WHEREAS, pursuant to applicable law, including but not limited to Water Code Section
31105, the District's Board of Directors adopted Ordinance No. 376 on July 15, 2010, establishing
the rules and regulations for sewer service by the District; and
WHEREAS, pursuant to applicable law, including but not limited to Water Code Sections
31007 and 31105, the District's Board of Directors is authorized to adopt by ordinance such rates for
the provision of sewer service by the District to implement the rules and regulations set forth in
Ordinance No. 376 and to yield an amount sufficient to pay the operating expenses of the District,
provide for repairs and depreciation of works owned or operated by the District, pay the interest on
any bonded debt, and, so far as possible, provide a fund for the payment of the principal of the
bonded debt as it becomes due; and
WHEREAS, the actions taken herein are necessary for setting rates, fees, and charges for the
provision of sewer service within the boundaries of the District and are therefore exempt from the
requirements of the California Environmental Quality Act as provided by Public Resources Code
Section 21080(b)(8); and
WHEREAS, the amount of the rates and charges hereby adopted do not exceed the
reasonable anticipated costs for the corresponding services provided by the District, and therefore
the fees imposed hereby do not qualify as a "tax" under Article X1IIC, Section 1(e), of the California
Constitution or Section 50076 of the California Govemment Code, and the actions taken herein are
exempt from the additional notice and public meeting requirements of the Brown Act pursuant to
Government Code Section 54954.6(a)(1)(A) and (B); and
WHEREAS, the District has satisfied all of the substantive and procedural prerequisites of
Article XIIID of the California Constitution in establishing the rates and charges set forth herein,
including but not limited to, the identification of the parcels upon which the rates and charges will be
imposed; the calculation of the rates and charges; the mailing of written notice to the record owners
of each parcel upon which the rates and charges will be imposed describing the amount thereof, the
basis upon which the rates and charges were calculated, the reason for the rates and charges, and the
date, time, and location of the public hearing to be held thereon; and the conducting of a public
hearing on the rates and charges not less than 45 days after mailing the notice during which all
protests against the fee were considered.
NOW, THEREFORE, BE IT ORDAINED that the Board of Directors of the East Valley
Water District does hereby resolve and determine that the written protests against the rates and
charges set forth herein that were received by the District prior to the close of the public hearing
hereon represented less than a majority of the parcels subject to the rates and charges set forth below
and, thus, the District's Board of Directors further finds and orders that the public interest and
necessity requires the adoption of the following rates and charges for sewer service by the District in
1 SEWER ORDINANCE: NO. 381
accordance with Ordinance No. 376, as well as affirmation and ratification of all prior rates and
charges previously adopted by the District's Board of Directors:
SECTION 1. MONTHLY SEWER CHARGE
The following monthly charges for sewer service are hereby set and established for each of the
following classifications:
Collection Charges - established to maintain the District's wastewater collection lines. Collection
charges are a monthly fixed charge for residential customers; charges for commercial customers
include a small fixed charge plus a volumetric charge (water usage) which varies depending on the
nature of the commercial entity. The collection charges adopted by the District's Board of Directors
on July 15, 2010, pursuant to Ordinance No. 377 are reflected in Table 1 below.
Residential Customers (1 to 3 Units)
West of Boulder Ave.
East of Boulder Ave.
*Commercial Customers
Fixed Charges, plus
Volume Based Charges (per HCF):
Multi Family (4 or more units)
(Includes mobile home parks)
Commercial / Retail
(non- otrice, bakeries, markets)
Restaurants / Lounges
(Inel hotels/motels w /rest)
Laundromats
Dry Cleaners
Schools / Churches
(Intl. Daycare/Nursery Schools)
Offices / Motels
(w /o Rest, Incl Municipalities)
Convalescent Homes
Hotels
Auto Repair / Service Stations
(Intl. Car Wash)
Table I
Rates and Effective Dates
Current
(Effective
10/l/20I1)
$ 14.09
16.09
3.58
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
0.50
Effective
10/1/2012
$ 15.36
17.36
3.90
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
0.55
2 SEWER ORDINANCE: NO. 381
*Commercial Accounts East of Boulder have an additional $0.09 /hcf (hundred cubic feet)
Treatment Charges - adopted to pay charges established by the City of San Bernardino for the
operation and maintenance of wastewater treatment facilities. Treatment charges are a monthly
fixed charge for residential customers; charges for commercial customers include a small fixed plus
a volumetric charge (water usage) which varies depending on the nature of the commercial entity.
The treatment charges established by the City are adopted in accordance with Table 2 below, and
any future increases made by the City over the next five years following the effective date of this
Ordinance may be automatically passed through and incorporated herein by this reference by action
of the District's Board of Directors to the extent authorized by Government Code Section 53756 and
any other applicable provision of law.
Residential Customers (1 to 3 Units)
West of Boulder Ave.
East of Boulder Ave.
*Commercial Customers
Fixed Charges, plus
Volume Based Charges (per HCF):
Multi Family (4 or more units)
(includes mobile home parks)
Commercial / Retail
(non - office, bakeries, markets)
Restaurants / Lounges
(Intl hotels /motels w /rest)
Laundromats
Dry Cleaners
Schools / Churches
(Intl. Daycare/Nursery Schools)
Offices / Motels
(w /o Rest, Inc/ Municipalities)
Convalescent Homes
Hotels
Auto Repair / Service Stations
(Intl. Car Wash)
'fable 2
Rates and Effective Dates
Current
(Effective
10/1/2010)
$ 16.00
16.00
2.00
0.95
1.90
2.00
1.30
1.90
0.70
1.50
0.95
2.00
1.30
Effective
1/1/2012
$ 18.50
18.50
*Commercial Accounts East of Boulder have an additional $0.09 /hcf (hundred cubic feet)
3 SEWER ORDINANCE: NO. 381
2.40
1.25
2.10
2.70
1.50
2.10
1.10
1.50
1.35
2.70
1.30
a. Users other than Residential: Rates for users other than "residential" shall be computed
on the basis of actual consumption as reflected by water meter readings for the billing period. Such
water consumption may be reduced for the purpose of establishing sewer service charges subject to
"seasonal" or "consumptive" use as recognized and approved by the Governing Board.
b. Unmetered Commercial Dischargers: Unmetered commercial dischargers shall be billed
as follows:
Residential units in apartments, condominiums and mobile home parks shall be billed for
each dwelling unit at the rate established for single - family dwelling units. Other commercial
dischargers shall be billed at a rate determined by the General Manager, based on experience from
similar metered dischargers.
SECTION 2. SEWER SERVICE CONNECTION CHARGES
The sewer service connection charge is the charge for the type and size of service connection
desired. Such regular charge shall be paid in advance by the applicant. Where there is no such
regular charge, the District reserves the right to require the applicant to deposit an amount equal to
the estimated cost of such service connection. The following charges are hereby established and
shall be collected at the time of application for sewer connection:
Permit Charge: $ 25.00 /connection
Inspection Charge: $ 75.00 /connection
Connection Charges: $645.00 /edu or portion thereof
Trunk Sewer Charge: $158.00 /edu or portion thereof
SECTION 3. SPECIAL FACILITY CHARGE
A Special Facility Charge shall be required for development of limited service areas
whenever special facilities are required. The charge to be made to a Developer or Owner of land that
is considered by the District to be within a limited service area shall be based upon the Developer's
or Landowner's proportionate share of cost for the installation of such special facility. Such
proportionate share to be borne by the Developer or Landowner shall be based on the percentage of
such development to the entire limited service area to be served by the special facilities; and the
difference between the cost of facilities to serve the same number of acres or area under normal
conditions and the cost of facilities to serve the acreage or area under special conditions at a higher
cost.
SECTION 4. INSPECTION CHARGE
Where a customer service connection or facility requires inspection by District personnel,
the customer shall be charged for such inspection at the rate of $600.00 per day.
SECTION 5. ENGINEERING SERVICES CHARGE
The Engineering Services charge is a fee for the District's time and effort spent on assisting
customers who have a requirement to construct sewer extensions, or other sewer facilities, that must
4 SEWER ORDINANCE: NO. 381
meet District needs and conform to District Standards. This fee includes time and effort the District
spends on plan checking, plan and easement development and all other related work.
Prior to submission of any documents requiring work by the District, a non - refundable
minimum charge in the amount of 7.5% of the engineer's estimated cost for the project shall be
submitted to the District. The work will be accomplished on a time and effort basis. Should the
district require more funds than the original charge, the additional costs will be billed and must be
paid prior to allowing sewer service to the project.
SECTION 6. MANHOLE STRUCTURE DEPOSIT
A refundable deposit of $250 per manhole will be charged for each sewer manhole structure
shown on the sewer construction plans. This deposit will be returned when all manholes are
constructed to final grade by the developer's contractor and verified by the District.
As an alternative to the manhole deposit, a guarantee bond may be provided in the same
amount as the deposit. The guarantee bond shall contain covenants that are satisfactory to the
District. Such bond shall remain in force until all manholes are constructed to final grade by the
developer's contractor and verified by the District.
SECTION 7. DISCONNECT NOTICE CHARGE
The disconnect notice charge is the charge which covers reasonable District costs to notify
customers that their sewer service is subject to impending termination. The disconnect notice charge
is hereby established at $5.00 per occurrence.
SECTION S. VERIFICATION CHARGE
The verification charge is the charge which covers reasonable District costs to make follow
up attempts to contact the customer by mail, and attempts to make personal contact, and to verify
and mark the location of the sewer service lateral. The verification charge is hereby established at
$45.00 per occurrence.
SECTION 9. DISCONNECT/RECONNECT CHARGE
The disconnect /reconnect charge is the charge that covers the reasonable District
reconnect /disconnect costs for disconnection and reconnection of service connections that are in
violation of District ordinances, resolutions, and rules. The disconnect /reconnect charge is hereby
established at the rate of $750.00 per occurrence.
SECTION 10. SECURITY DEPOSIT CHARGE
The security deposit insures payment of minimum District charges and may be refunded
under certain circumstances. The amount of the security deposit charge shall be calculated at three
times the average monthly bill as estimated by the District, and is hereby established as follows:
1. Owner /Resident /Tenant $ 100.00 /edu (equivalent dwelling unit)
5 SEWER ORDINANCE: NO. 381
SECTION 11. SERVICE INITIATION CHARGE
The service initiation charge is the charge which covers the reasonable District costs for
initiating sewer service. The service initiation charge is hereby established at $25.00 per service
address.
SECTION 12. DELINQUENCY CHARGE
The Delinquency Charge is the charge which is added to each delinquent account at the time
any amount becomes delinquent, provided that no delinquent charge shall be made on any account
which at that time has no delinquencies of record. The delinquency charge is hereby established at
one and one -half (1 -1/2 %) per month of the total amount delinquent.
SECTION 13. RETURNED CHECK CHARGE
A returned check charge is a charge which covers the reasonable administrative cost and
banking charges for processing a returned check.
The returned check charge is hereby established at $20.00 per returned check.
SECTION 14. SEWAGE TREATMENT CAPACITY CHARGE
The Sewage treatment capacity charge shall be the fee collected by the City of San
Bernardino to cover the Water Reclamation Plant's expansion costs as the plant's capacity is used by
new connections.
SECTION 15. LANDSCAPE ADJUSTMENT
The landscape adjustment shall be the adjustment to the sewage treatment and collection
charge based upon the proportional amount of the customer's property irrigated through a domestic
water meter.
This Ordinance shall take effect immediately upon adoption, except that
the increase in the amount of the treatment charges set forth in
Table 2 of Section 1 of this Ordinance shall take effect on January 1, 2012.
6 SEWER ORDINANCE: NO. 381
ROLL CALL:
Ayes:
Noes:
Absent:
Abstain:
ATTEST:
ADOPTED this 22°" day of November 2011.
Robert DeLoach, Secretary
George E. Wilson, President
7 SEWER ORDINANCE: NO. 381