Item 193/2025
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Patricia Song
Dept:
City Manager Dept: Finance
Date: 6/10/2025
Subject: Adoption of a Resolution amending certain User Fees for water service. (Action Item)
OBJECTIVE
For the City Council to conduct a public hearing to consider the adoption of the attached resolution amending certain user fees.
BACKGROUND
State law grants cities the authority to establish and implement fees, rates, and charges for municipal services, provided they do not exceed the estimated reasonable cost of delivering those services. This framework ensures that the City can recover the direct and indirect costs associated with providing specific services to the community, without placing an undue burden on the general taxpayer.
Over the years, the City Council has approved various fees and charges to support a wide range of City services – such as planning fees, building permits, water services, and facility uses – based on this cost -recovery principle. To enhance transparency and streamline the management of these fees, the City Council adopted a Master Fee Schedule in 1994. This consolidated document brought together all approved fees and charges across departments into a single, comprehensive reference. The Master Fee Schedule continues to serve as the City’s central source for service-related fee information and is periodically updated to reflect changes in service delivery costs, regulatory requirements, and community needs.
DISCUSSION
User fees and charges are payments made for voluntarily requested, publicly provided services that benefit specific individuals rather than the general public. In acco rdance with sound financial management practices, these fees should aim to fully recover the costs of providing such services to protect the broader public interest. Since fees are to be based on actual service costs, periodic reviews are essential to ensure they remain aligned with current cost structures.
Item 193/2025
During a recent review, staff identified several Water Service fees that require updates to accurately reflect current labor and material costs, thereby ensuring fairness and cost recovery. Additionally, a new fee is proposed within the same category to recover costs associated with non-compliant customers under the City’s Cross Connection Control Program.
Staff recommends the following changes:
Description Current Rate Proposed New Rate
Construction Meter with Backflow
Device Deposit
$2,800.00 $3,800.00
Construction Meter with Backflow
Device Daily Rental Fee
$1.00/day $2.00/day
Water Service Restoration of Non -
Compliant Backflow Testing Fee
None $107.00
Construction Meter with Backflow Device Deposit and Daily Rental Rate
The City currently requires a deposit from contractors for the use of construction meters connected to fire hydrants for temporary water service during construction. This deposit is intended to cover costs if a meter is damaged, lost, or stolen. Fees are deducted from the deposit to cover backflow testing, water usage, and meter installation, relocation, or removal.
A daily rental fee is also charged to partially recover the cost of routine meter replacement and staff time spent performing monthly meter reads to monitor usage and inspect meter condition. This daily fee has not been updated in over 20 years.
Currently, the cost to replace a 3 -inch hydrant construction meter is approximately $3,880 including tax. The exist ing $2,800 deposit is no longer sufficient to cover full replacement costs in the event of damage.
Water Service Restoration Fee for Non-Compliant Backflow Testing Fee
This proposed new fee is intended to recover costs incurred when customers fail to com ply with the City’s request to test their backflow prevention devices. As part of the City’s Cross Connection Control Program, privately owned backflow devices must be tested annually to ensure they function properly and prevent contaminants from entering the City’s potable water system.
There are approximately 2,000 backflow devices citywide. To comply with State Water Resources Control Board regulations, the City must ensure that each device is tested at least once a year. When owners fail to submit pass ing test reports, City staff must shut off the water service to enforce compliance. After the device is tested and passes, staff must restore the water service.
The new fee will help encourage compliance and allow the City to recover the costs associated with the shutoff and restoration process. This fee will only apply to non -compliant backflow device owners.
Item 193/2025
The actual cost for staff time and vehicle use is calculated at $107.58, based on current fully burdened labor and vehicle rates.
FINANCIAL IMPACT
The proposed fee increase and new fee are intended to improve cost recovery for the delivery of water services to users.
RECOMMENDATION
It is recommended that the City Council:
Conduct a public hearing; and
Adopt the attached Resolution amending certain user fees for water service.
ATTACHMENT(S)
1. Resolution Amending User Fees for Water Service