RLY
AGENDA REPORT
Meeting Date: March 11,2024
Item Number:
To: Honorable Mayor & City Council
From: Laurence S. Wiener, City Attorney
Subject: AN ORDINANCE OF THE CITY OF BEVERLY HILLS TO MODIFY
RATES AND CHARGES FOR WATER AND WASTEWATER
SERVICES AND FACILITIES FURNISHED BY THE CITY AND
ADDING NEW SECTION 6-1-308 (WASTEWATER SERVICE
CHARGES) TO ARTICLE 3 (WASTEWATER SYSTEM) OF CHAPTER
1 (CITY UTILITY SERVICES) OF TITLE 6 (UTILITIES AND
FRANCHISES) OF THE BEVERLY HILLS MUNICIPAL CODE ANDRENUMBERING THE REMAINING SECTIONS OF ARTICLE 3
ACCORDINGLY
Attachments: 1. Ordinance
RECOMMENDATION
It is recommended that the City Council move to waive the full reading and adopt the ordinance entitled: ‘AN ORDINANCE OF THE CITY OF BEVERLY HILLS TO MODIFY RATES AND CHARGES FOR WATER AND WASTEWATER SERVICES ANDFACILITIES FURNISHED BY THE CITY AND ADDING NEW SECTION 6-1-308(WASTEWATER SERVICE CHARGES) TO ARTICLE 3 (WASTEWATER SYSTEM) OF CHAPTER 1 (CITY UTILITY SERVICES) OF TITLE 6 (UTILITIES AND FRANCHISES)OF THE BEVERLY HILLS MUNICIPAL CODE AND RENUMBERING THE REMAININGSECTIONS OF ARTICLE 3 ACCORDINGLY”.INTRODUCTION At its meeting of February 20, 2024, the City Council conducted a first reading of this ordinance and introduced it.
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Meeting Date: March 11,2024
DISCUSSION
The City’s Water and Wastewater Utilities are enterprise entities, and their expenses and revenues are separate from the City’s General Fund. In essence, customers pay for water and wastewater services through rates adopted by the City Council. Customer rates must generate sufficient revenues to sustain operations, maintenance, debtpayments, capital improvement projects, costs of oversight and administrative functionsperformed by the City’s internal service departments and maintain healthy reserve levelsbased on the City’s financial policies.
This ordinance adds a new Section 6-1-308 to the Beverly Hills Municipal Code to modify rates and charges for water and wastewater services and facilities furnished by the City.
FISCAL IMPACT
The adjustments to water rates will generate an additional $6 million for the Water Enterprise over the five-year study period to address operational and capital investment needs. The adjustments to wastewater rates will generate no additional revenue for the Wastewater Enterprise. The adjustments to Wastewater rates are intended to be revenue neutral. However, current projected revenue is less than forecasted expenses; therefore, a total of $10.9 million (over a five-year period) of capital expenses will befunded using reserve funds. The adjustments will better align the rates for each customer class with the costs attributable to providing their respective services.
Wastewater rates will be phased in for residential customers to avoid large impacts on customers by using $2.0 million from reserves over the five-year planning period. With the use of reserves to fund capital expenses and the phase-in recommendation, theWastewater reserve fund ending balance is projected to be above the City’s reservetarget of 50% of annual Operating and Maintenance in reserves at all times.
Laurence S. Wiener
City Attorney
Approved By
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Attachment
1 ORDINANCE NO. 24-0-
AN ORDINANCE OF THE CITY OF BEVERLY HILLS TO
MODIFY RATES AND CHARGES FOR WATER AND
WASTEWATER SERVICES AND FACILITIES FURNISHEDBY THE CITY AND ADDING NEW SECTION 6-1-308 (WASTEWATER SERVICE CHARGES) TO ARTICLE 3(WASTEWATER SYSTEM) OF CHAPTER 1 (CITY UTILITY SERVICES) OF TITLE 6 (UTILITIES AND
FRANCHISES) OF THE BEVERLY HILLS MUNICIPALCODE AND RENUMBERING THE REMAINING SECTIONSOF ARTICLE 3 ACCORDINGLY
THE CITY COUNCIL OF THE CITY OF BEVERLY HILLS DOES ORDAIN AS FOLLOWS:
Section 1. The City Council of the City of Beverly Hills hereby finds as follows:
(a) The City Council is authorized pursuant to the California Health and Safety Code Section 5471 to prescribe, revise and collect rates and charges for water and wastewaterservices and facilities furnished by the City. (b) The City Council wishes to modify the rates and charges for water services and facilities furnished by the City (the “water service charges”) and the rates and charges for wastewater services and facilities furnished by the City (the “wastewater service charges”), asprovided in Exhibit A. (c) The City Council identified the parcels upon which the proposed water service charges and the proposed wastewater service charges would be imposed and calculated theamount of the proposed water service charges and the proposed wastewater service charges. (d) The City Clerk caused a notice of the time and place of a public hearing on the proposed water service charges and proposed wastewater service charges to be mailed asrequired by Section 6 of Article XIIID of the California Constitution. (e) Each notice described the amount of proposed water service charges and proposed wastewater service charges, the basis upon which the amounts of the proposed water B0785-000 I \29 I 7463v2.doc
service charges and proposed wastewater service charges were calculated, the reason for the proposed water service charges and proposed wastewater service charges, and the date, time, and location of a public hearing on the proposed water service charges and proposed wastewaterservice charges. (f) On February 20, 2024, the City Council conducted a public hearing on the proposed water service charges and proposed wastewater charges and heard and considered allobjections and protests thereto. At the close of the public hearing, the City Council determined that written protests against the proposed water service charges representing a majority of theparcels that receive water service had not been presented and that written protests against theproposed wastewater service charges representing a majority ofthe parcels that receive wastewater services had not been presented, meaning there was no majority protest against the proposed waterservice charges or proposed wastewater service charges.
Section 2. The City Council hereby approves the water service charges and the wastewater service charges in the amounts and on the effective dates as provided in Exhibit A.The water service charges are subject to automatic adjustments for an additional five (5) years beginning on the effective date ofthis Ordinance that pass through to the water customers increases in wholesale water charges for purchasing water from the Metropolitan Water District if the wholesale charges for purchasing water are higher than the adopted budgeted costs. In addition,the Water Shortage Revenue Stabilization Factors set forth in Exhibit A, although not currentlyused, are approved for use (if needed) for an additional five (5) years beginning on the effectivedate of this Ordinance.
Section 3. The City Council hereby adds new Section 6-1 -308 (Wastewater Service Charges) to Article 3 (Wastewater System) of Chapter 1 (City Utility Services) of Title 6 (Utilities and Franchises) of the Beverly Hills Municipal Code to read as follows and renumbers the remaining sections of Article 3 accordingly:
“Section 6-1-308: Wastewater Service Charges
A. There is imposed a wastewater service charge for the receiving, transportation, pumping, treatment and disposal of wastewater through the wastewater system, and capital replacement costs pertaining thereto.
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B. The wastewater service charge shall be charged to residential, commercial, governmental, industrial and other users of the wastewater system pursuant to article 1,“General Provisions Relating to City Utility Service” of this chapter. It shall have the following components as follows:
1. A fixed rate component, which shall be based on a user class to recover the City’s fixed costs of service to that particular user class.
2. A variable rate component, which shall be based on estimated volumedischarge of wastewater as determined by metered water usage and adopted discharge factors to recover the City’s variable or flow related cost ofservice.
3. Wastewater strength component of low, medium, or high wastewater strength, shall be applied to commercial and industrial users. The strengthcomponent shall be based on the actual or estimated sewage strength usingBiological Oxygen Demand (BOD) and Total Suspended Solids (TSS) criteria, andgenerally intended to recover the City’s variable costs of collecting, transporting, pumping, treating and disposing of wastewater which exceeds residential strength.
Classification of wastewater strength by commercial or industrial users are referenced below.
a. Low Strength (Range — BOD/TSS: 0 to 250 mg/L (ppm))
Banks & Financial InstitutionsBarber Shops/Hair Salons (Hair Cutting Only) Post Offices/GovernmentRetail StoresLibraries
Schools
Religious Buildings, Halls & LodgesOffices (Business and Professional) b. Medium Strength (Range — BOD/TSS: 251 to 600 mgfL (ppm)) Bars & Taverns (w/o Dining)
Appliance Repair
Barber Shops/Hair Salons (Haircutting w/Add’l Treatments) Dry Cleaners
Nail Salons
Pet GroornersCommercial Laundromats
Tasting Rooms
Medical Offices/Hospitals (General, Cosmetic, Dental, Convalescent & Veterinarian)Hotels, Motels, or Bed & BreakfastPools with Restrooms (Clubhouse) Theaters WarehousesCar Washes
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Gym or Health Club
Service Stations, Garages, Auto Repair Shops
Car Rental/Car Service
Mini Marts (w/o Dish Washer or Garbage Disposal)Mini Mart with Gas Pumps — (w/o Dish Washer or Garbage Disposal) Spa
c. High Strength (Range —BOD/TSS: over 600 mg/L (ppm))RestaurantsCoffee ShopsIce Cream ParlorsCateringEatery Juice Bars
Bakeries
Butcher ShopsBars & Taverns (w/ Dining)
Grocery Stores or Markets
Mini Marts (w/ Dish Washer or Garbage Disposal)Delicatessens
4. Commercial or industrial users may request to evaluate their wastewater strength for appropriate classification. The Director of Public Works, or his or her designated representative, shall evaluate the user’s wastewater strength byusing Section 6-1-308 (B)(3) user classification and/or estimated return to thewastewater system by the types of commercial or industrial users in thecustomer’s premise.
5. The wastewater service charges shall be computed at the rates established from time to time pursuant to article 1, “General Provisions Relating to City Utility Service” of this chapter.
6. No wastewater service charge shall be made to any appurtenance,improvement, building, lot or property where there is no connection todischarge to the wastewater system.7. No wastewater service charge shall be made to water use metered by an irrigation meter where none of the water use is discharged to the wastewatersystem.8. The Director of Public Works, or his or her designated representative,shall have the power and duty, and is directed to enforce all the provisions of this Section 6-1-308, and shall provide such rules and regulations as are consistent with the provisions ofsaid section and may be necessary or desirable to aid in the administration, adjustment and enforcement ofsaid section.” -4-
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Section 4. The City Clerk shall cause this Ordinance to be published at least once in a newspaper of general circulation published and circulated in the City within fifteen (15) days afterits passage, in accordance with Section 36933 of the Government Code; shall certify to theadoption ofthis Ordinance and shall cause this ordinance and her certification, together with proof of publication, to be entered in the Book of Ordinances of the Council of this City.
Section 5. This Ordinance shall go into effect and be in full force and effect at 12:01 a.m. on the thirty-first (3 Ut) day after its passage.Adopted:Effective:
JULIAN A. GOLD, M.D.Mayor of the City of Beverly Hills, California
ATTEST:
____________________________
(SEAL)
HUMA AHMEDCity Clerk
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
LAURENCE S. WIENER NANCY HUNT-COFFEYCity Attorney City Manager JEFF S. MUIRDirector of Finance
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A. Bi-Monthly Fixed Service Charges
EXHIBIT A
1. Water Rates and Charges
Service Current Proposed (All Customer Classes; Inside and Outside City) Size Charge 7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Water Meter Service Charges
i’ $53.51 $53.51 $58.64 $59.81 $61.01 $62.23
11/20 $93.84 $93.84 $100.69 $102.70 $104.75 $106.85
2’ $142.24 $142.24 $151.15 $154.17 $157.25 $160.403” $271.30 $271.30 $285.72 $291.43 $297.26 $303.21 4’ $416.50 $416.50 $437.11 $445.85 $454.77 $463.87
6’ $819.82 $819.82 $857.63 $874.78 $892.28 $910.13
8” $1,311.71 $1,311.71 $1,362.26 $1,389.51 $1,417.30 $1,445.65 10” $1,967.57 $1,967.57 $3,548.99 $3,619.97 $3,692.37 $3,766.22 Fire Meter Service Charges
<= 2” $29.73 $29.73 $30.32 $30.93 $31.55 $32.18
2 1/2” $44.32 $44.32 $45.21 $46.11 $47.03 $47.97
3” $64.56 $64.56 $65.85 $67.17 $68.51 $69.88
4” $124.69 $124.69 $127.18 $129.72 $132.31 $134.966” $340.52 $340.52 $347.33 $354.28 $361.37 $368.608” $712.74 $712.74 $726.99 $741.53 $756.36 $771.49 10” $1,272.63 $1,272.63 $1,298.08 $1,324.04 $1,350.52 $1,377.5312” $1,654.42 $1,654.42 $1,687.51 $1,721.26 $1,755.69 $1,790.80 —1—
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B. Bi-Monthly Quantity Charge Rates
Current Quantity Charge Rates Recommended Quantity Charge Rates Current Proposed New Proposed
Tier Size $/HCF Tier Size 7/1/2024 TIer Size 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Inside City $/HCF $/HCF $/HCF $/HCF $/HCF
Single-Family/Duplex Single-Family/Duplex
Tier 1 0-26 HCF $3.65 Tier 1 0-26 HCF $3.65 0-32 HCF $3.75 $3.83 $3.91 $3.99Tier2 27-48HCF $7.12 Tier2 27-48HCF $7.12 33-48HCF $6.36 $6.49 $6.62 $6.75Tier3 49-86HCF $10.48 Tier3 49-86HCF $10.48 49-83HCF $10.52 $10.73 $10.94 $11.16Tier 4 86+ HCF $14.87 Tier 4 86+ HCF $14.87 84+ HCF $14.94 $15.24 $15.54 $15.85 Multi-Family Multi-Family
Tier 1 0-8 HCF $4.66 Tier 1 0-8 HCF $4.66 0-8 HCF $5.06 $5.16 $5.26 $5.37Tier2 9+HCF $13.31 Tier2 9+HCF $13.31 9+HCF $14.73 $15.02 $15.32 $15.63 Commercial $7.24 Commercial $7.24 $7.43 $7.58 $7.73 $7.88 Water Reliability (all customers) $0.26 All Use $0.27 $0.28 $0.29 $0.30 $0.31 Fire Protection (all customers) $3.65 All Use $3.65
Outside City lierSize $/HCF lierSize $/HCF TierSize $/HCF $/HCF $/HCF $/HCF Single-Family/Duplex Single-Family/Duplex
Tierl 0-26HCF $4.54 Tierl 0-26HCF $4.54 0-32HCF $4.43 $4.52 $4.61 $4.70Tier 2 27-48 HCF $8.01 Tier 2 27-48 HCF $8.01 33-48 HCF $7.04 $7.18 $7.32 $7.47Tier 3 49-86 HCF $11.36 Tier 3 49-86 HCF $11.36 49-83 HCF $11.20 $11.42 $11.65 $11.88Tier 4 86+ HCF $15.77 Tier 4 86-f HCF $15.77 84+ HCF $15.62 $15.93 $16.25 $16.58 Multi-Family Multi-Family
Tier 1 0-8 HCF $5.55 Tier 1 0-8 HCF $5.55 0-8 HCF $5.74 $5.85 $5.97 $6.09 Tier2 9+HCF $14.19 Tier2 9+HCF $14.19 9÷HCF $15.41 $15.72 $16.03 $16.35 Commercial $8.14 Commercial $8.14 $8.11 $8.27 $8.44 $8.61 Water Reliability (all customers) $0.41 All Use $0.42 $0.43 $0.44 $0.45 $0.46 Fire Protection (all customers) $4.54 All Use $4.54 $4.43 $4.52 $4.61 $4.70 C. Water Shortage Revenue Stabilization Factors
Revenue Stabilization Factors by Customer Class
Stage A Stage B Stage C Stage D Stage E
Up to Up to Up to Up to Up to
Class (5% Reduction) (10% Reduction) (20% Reduction) (30% Reduction) (50% Reduction) Single Family 1.041 1.088 1.203 1.360 1.827
Multi-Family 1.018 1.038 1.081 1.129 1.361
Commercial 1.024 1.050 1.109 1.179 1.453
Irrigation 1.095 1.224 1.685 3.180 n/a
To be applied to the prevailing quantity charge rates in effect at the time ofthe shortage declaration, if needed -2-
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2. Wastewater Rates and Charges
A. Bi-Monthly Fixed Service Charge and Quantity Charge Rates Charge Type Current Proposed
Customer Class Rates 7/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Bi-Monthly Fixed Service Charge
Single Family $87.38 $77.92 $68.46 $59.00 $49.54 $40.08 Multi Family $87.38 $77.92 $68.46 $59.00 $49.54 $40.08
Commercial -Low Strength $34.20 $40.08 $40.08 $40.08 $40.08 $40.08Commercial -Medium Strength n/a $40.08 $40.08 $40.08 $40.08 $40.08Commercial -High Strength $34.20 $40.08 $40.08 $40.08 $40.08 $40.08 Quantity Charge Rate per hcf [1]
Single Family $0.00 $0.72 $1.43 $2.15 $2.86 $3.58
Multi Family $0.00 $0.72 $1.43 $2.15 $2.86 $3.58
Commercial -Low Strength $4.74 $3.58 $3.58 $3.58 $3.58 $3.58 Commercial - Medium Strength n/a $5.24 $5.24 $5.24 $5.24 $5.24Commercial -High Strength $7.08 $6.95 $6.95 $6.95 $6.95 $6.95 [ii Quantity charge applied to sewered water use. Sewered water use is calculated as actual water use x Return to Sewer Factor.Return to Sewer Factors are as follows:
Single Family=52%
Multi Family =90%
Commerical =83%
Note: Customers with an irrigation meter will be charged 100% of their water use for the domestic meter. -3-
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