December 20, 2023 City Council Regular Meeting
Agenda Item No. 3C – REVISED Staff Report
City Council Staff Report
DATE: December 20, 2023
AGENDA ITEM NO: Consent Calendar - 3C
TO: The Honorable Mayor and City Council
FROM: Martha Garcia, Director of Finance
SUBJECT: Second reading and adoption of ordinances increasing the amount of water and wastewater (sewer) rates and charges
RECOMMENDATION:
It is recommended that the City Council consider:
1. Waiving second reading and adopting the proposed Ordinance No. #### – Increasing the amount of Water Rates and Charges;
2. Waiving second reading and adopting the proposed Ordinance No. #### – Increasing the amount of Wastewater Rates and Charges; and
3. Taking such additional, related, action that may be desirable.
EXECUTIVE SUMMARY:
The first reading and public hearing occurred on December 6, 2023. The ordinances are now ready for second reading and adoption by the City Council.
BACKGROUND:
At the meeting on December 6, 2023, the City Council reviewed options for setting/increasing water, and wastewater (sewer) rates for a five-year period commencing on February 1, 2024.
Before the December 6, 2023 Council Meeting the City sent out public notices and protest ballots to all property owners in the City as well as to rate payers for water and wastewater services. As is detailed in the September 26, 2023, and December 6, 2023, staff reports, unless the City received a majority protest the City could proceed to increase the rates for these services. On December 6, 2023, the City Council determined that the City received, at most, 937 protest ballots which represented (at most) a 5% protest. This is well below the majority threshold requirement. This procedure was approved by the California electorate as part of Proposition 218 which amended the California Constitution to include this majority protest process for increasing water and wastewater (sewer) services.
At the December 6 meeting the Council introduced Ordinances that set a “cap rate” on water and wastewater (Sewer) increases at 32%, 8%, 8%, 7%, 8% for the five-year period from FY 2023
-24 through FY 2027-28. However, at a later date, should Council approve the financing of water facilities and improvements, rates may be considered at a 26%, 8%, 8%, 7% 7% from FY 2023-24 to FY 2027-28.
REVISED STAFF REPORT
Staff Report
December 20, 2023
Illustrations below show what new water and sewer charges will look like compared to current rates.
Single Family Residential Combined Monthly Bill Impact
Current FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Assumptions
Meter Size 3/4" meter 3/4" meter
Water Consumption 10 hcf 10 hcf
Water
Fixed Service Charge $19.20 $27.18 $29.36 $31.71 $33.93 $36.64 Consumption Charge $21.76 $34.15 $36.88 $39.83 $42.62 $46.03
37.5% Surcharge $15.36 n/a n/a n/a n/a n/a
Total $56.32 $61.33 $66.24 $71.54 $76.55 $82.67
Increase/(Decrease) $5.01 $4.91 $5.30 $5.01 $6.12
Sewer
Charge per account $10.17 $15.71 $20.42 $22.46 $24.71 $25.70 Total $10.17 $15.71 $20.42 $22.46 $24.71 $25.70
Increase/(Decrease) $5.54 $4.71 $2.04 $2.25 $0.99
Total Monthly Bill $66.49 $77.04 $86.66 $94.00 $101.25 $108.37 Increase/(Decrease) $10.55 $9.62 $7.34 $7.25 $7.11
Multi-Family Residential Combined Monthly Bill Impact
Current FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Assumptions
Meter Size 2" meter 2" meter
Water Consumption 90 hcf 90 hcf
Dwelling Units (DU) 10 10
Water
Fixed Service Charge $42.15 $118.52 $128.00 $138.24 $147.91 $159.75 Consumption Charge $215.10 $382.31 $412.90 $445.93 $477.14 $515.31
37.5% Surcharge $96.47 n/a n/a n/a n/a n/a
Total $353.72 $500.83 $540.89 $584.16 $625.06 $675.06
Increase/(Decrease) $147.11 $40.07 $43.27 $40.89 $50.00 Sewer
Charge per account $161.22 $157.08 $204.20 $224.62 $247.09 $256.97 Total $161.22 $157.08 $204.20 $224.62 $247.09 $256.97
Increase/(Decrease) ($4.14) $47.12 $20.42 $22.46 $9.88 Total Monthly Bill $514.94 $657.91 $745.10 $808.79 $872.14 $932.03 Total Increase/(Decrease) $142.97 $87.19 $63.69 $63.35 $59.89 Increase/Decrease per DU $14.30 $8.72 $6.37 $6.34 $5.99 Staff Report Page 3 of 4 December 20, 2023 Commercial and Institutional Combined Monthly Bill Impact Current FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 Assumptions Meter Size 1" meter 1" meter Water Consumption 53 hcf 53 hcf Sewered Flow 53 53 Water Fixed Service Charge $20.75 $41.23 $44.53 $48.10 $51.46 $55.58 Consumption Charge $126.67 $225.14 $243.15 $262.60 $280.98 $303.46 37.5% Surcharge $55.28 n/a n/a n/a n/a n/a Total $202.70 $266.37 $287.68 $310.70 $332.45 $359.04 Increase/(Decrease) $63.67 $21.31 $23.01 $21.75 $26.60 Sewer Charge per account $40.68 $45.61 $59.30 $65.23 $71.75 $74.62 Total $40.68 $45.61 $59.30 $65.23 $71.75 $74.62 Increase/(Decrease) $4.93 $13.68 $5.93 $6.52 $2.87 Total Monthly Bill $243.38 $311.98 $346.98 $375.92 $404.19 $433.66 Total Increase/(Decrease) $68.60 $34.99 $28.94 $28.27 $29.47 The ordinances introduced at the last City Council meeting must be adopted by four affirmative votes. California law requires that the City Council re-introduce any ordinance that is substantively changed from the time it was introduced. FISCAL IMPACT: Within the water fund, the proposed rate increase will generate approximately $30.1 million in additional water rate revenue over the five-year planning period. The proposed wastewater (sewer) rate increases will generate approximately $14.5 million in additional rate revenue over the five-year planning period. These additional revenues provide adequate funds to support increased water and sewer operating and capital expenses.
Staff Report
December 20, 2023
Respectfully submitted by:
Martha Garcia
Director of Finance
Approved by: Reviewed by:
Inez Alvarez
City Manager
Karl H. Berger
City Attorney
ATTACHMENT(S):
1. Staff Report from December 6, 2023 Meeting (without attachments)
2. Ordinance No. #### – Setting the amount of Water Rates and Charges
3. Ordinance No. #### – Setting the amount of Wastewater (Sewer) Rates and Charges
Staff Report
December 20, 2023
ATTACHMENT 1
Staff Report from December 6, 2023 Meeting
(without attachments)
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Staff Report
December 20, 2023
ATTACHMENT 2
Ordinance No. #### -
Setting the amount of Water Rates and Charges
ORDINANCE NO. AN ORDINANCE SETTING THE AMOUNT OF WATER RATES AND CHARGES PURSUANT TO HEALTH AND SAFETY CODE § 5471 AND MONTEREY PARK MUNICIPAL CODE CHAPTER 14.12. The City Council does ordain as follows: SECTION 1: The City Council finds and declares as follows: A. The City of Monterey Park requires a reliable supply of water meeting current and anticipated water quality standards to protect the public general welfare, health and safety; B. The purpose of water rates and charges is to protect the public health, safety and general welfare by providing a reliable and adequate supply of water meeting current and anticipated water quality standards for the residents of the City of Monterey Park and to pay for the cost of providing such service; C. There is a reasonable relationship between the amount of the rates and charges and the cost of services and facilities necessary to deliver water service to the residents and non-residential development of the City; D. Notice regarding the water rates included in this ordinance was provided in accordance with California Constitution Article XIIID, § 6(c) and Government Code § 54354.5; E. On December 6, 2023, the City Council held a public hearing to consider the results of the protest proceeding and to consider whether to increase the water rates as proposed; F. This Ordinance is exempt from review under the California Environmental Quality Act (Cal. Pub. Res. Code §§ 21000, et seq.; “CEQA") and CEQA regulations (14 Cal. Code Regs. §§ 15000, et seq.; “CEQA Guidelines”) because it establishes, modifies, structures, restructures, and approves rates and charges for meeting operating expenses; purchasing supplies, equipment, and materials; meeting financial requirements; and obtaining funds for capital projects needed to maintain service within existing service areas. This Ordinance, therefore, is categorically exempt from further CEQA review under CEQA Guidelines § 15273; G. This ordinance is adopted in accordance with Health and Safety Code § 5471 and Monterey Park Municipal Code (“MPMC”) Chapter 14.12 to establish the City's current water rates; H. The City Council has considered the evidence and testimony presented at the public hearing. Based in part upon that evidence, and the staff reports presented to the Council regarding this issue, the City Council believes that it Resolution No. Page 2 of 4 December 20, 2023 is in the public interest to adopt this Ordinance; SECTION 2: AMOUNT OF RATES AND CHARGES. A. Pursuant to MPMC Chapter 14.12, the City Council establishes the amount of water rates as set forth in attached Exhibit "A," which is incorporated by reference ("Water Charges"). B. The Water Charges include an annual increase of 32%, 8%, 8%, 7%, 8% beginning February 1, 2024 through fiscal year 2027-28. SECTION 3: COST ESTIMATES. The City Manager, or designee, will periodically, but not less than annually, review the Water Charges to determine whether revenues from such charges are meeting actual cost of services and facilities needed to deliver water service to the residents and non-residential developments within the City. If the City Manager determines that revenues do not adequately meet costs, the City Manager will recommend to the City Council a revised rate and charge schedule to be adopted by this City Council by ordinance: SECTION 4: This Ordinance was adopted to comply with the California Supreme Court decision in Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205. To the extent any provision of this Ordinance repeals or supersedes Ordinance No. 2109, such repeal or replacement will not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Ordinance's effective date. Any such repealed or superseded part of Ordinance No. 2109 will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance SECTION 5: If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable. SECTION 6: The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Monterey Park's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law: SECTION 7: Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
Resolution No.
December 20, 2023
SECTION 8: Severability. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provision or application and, to this end, the provisions of this Resolution are severable.
SECTION 9: Recordation. The Mayor, or presiding officer, is authorized to sign this Resolution signifying its adoption by the City Council of the City of Monterey Park and the City Clerk, or her duly appointed deputy, may attest thereto.
SECTION 10: Effective Date. This Ordinance will become effective immediately upon adoption and will remain effective unless repealed or superseded.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF MONTEREY PARK THIS 20th DAY OF DECEMBER 2023.
____________________________
Jose Sanchez, Mayor
ATTEST:
____________________________
Maychelle Yee, City Clerk
APPROVED AS TO FORM:
____________________________
Karl H. Berger, City Attorney
Resolution No. Page 4 of 4 December 20, 2023 I, Maychelle Yee, City Clerk of the City of Monterey Park, California, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a meeting of the City Council of said City at its meeting held on the 20th day of December 2023, by the following vote, to wit: Ayes: Noes: Absent: Abstain: IN WITNESS WHEREOF, this __th day of __________, 2023. City Clerk of the City of Monterey Park Exhibit A- Current and Proposed Water Rates
Monthly Service Charges
Meter Size
FY 2022-23
Current Rates
FY 2023-24
1/1/2024
FY 2024-25
7/1/2024
FY 2025-26
7/1/2025
FY 2026-27
7/1/2026
FY 2027-28
7/1/2027
5/8" meters $26.40 $20.16 $21.77 $23.51 $25.16 $27.17
3/4" meters $26.40 $27.18 $29.36 $31.71 $33.93 $36.64
1" meters $28.53 $41.23 $44.53 $48.10 $51.46 $55.58
1 1/2" meters $44.96 $76.36 $82.47 $89.07 $95.30 $102.93 2" meters $57.96 $118.52 $128.00 $138.24 $147.91 $159.75 3" meters $115.98 $230.92 $249.40 $269.35 $288.20 $311.26 4" meters $191.88 $357.38 $385.98 $416.85 $446.03 $481.72 6" meters $585.68 $708.66 $765.35 $826.58 $884.44 $955.20 8" meters $1,464.79 $1,130.20 $1,220.61 $1,318.26 $1,410.54 $1,523.38
Water Consumption Charge (per unit)
Monthly Use
FY 2022-23
Current Rates
Monthly Use
FY 2023-24
1/1/2024
FY 2024-25
7/1/2024
FY 2025-26
7/1/2025
FY 2026-27
7/1/2026
FY 2027-28
7/1/2027
Single Family Residential
Tier 1 (0-6 hcf) $2.89 Tier 1 (0 - 10 hcf) $3.41 $3.69 $3.98 $4.26 $4.60 Tier 2 (7-12 hcf) $3.15 Tier 2 (11 - 16 hcf) $4.50 $4.86 $5.24 $5.61 $6.06 Tier 3 (13+ hcf) $3.37 Tier 3 (17+ hcf) $8.51 $9.19 $9.92 $10.62 $11.47 All Other
All
Consumption
$3.29 All Consumption $4.25 $4.59 $4.95 $5.30 $5.73
Staff Report
December 20, 2023
ATTACHMENT 3
Ordinance No. #### -
Setting the amount of Wastewater (Sewer)
Rates and Charges
ORDINANCE NO. AN ORDINANCE SETTING THE AMOUNT OF WASTEWATER RATES AND CHARGES PURSUANT TO HEALTH AND SAFETY CODE § 5471 AND MONTEREY PARK MUNICIPAL CODE CHAPTER 14.12. The City Council does ordain as follows: SECTION 1: The City Council finds and declares as follows: A. The City of Monterey Park requires a reliable wastewater discharge system meeting current and anticipated water quality standards to protect the public general welfare, health and safety; B. The purpose of wastewater rates and charges is to protect the public health, safety and general welfare by providing a reliable and safe wastewater discharge system that meets current and anticipated wastewater quality standards for the residents of the City of Monterey Park and to pay for the cost of providing such service; C. Based upon the record, there is a reasonable relationship between the amount of the rates and charges and the cost of services and facilities necessary to deliver wastewater service to the residents and nonresidential development of the City; D. Notice regarding the wastewater rates included in this ordinance was provided in accordance with California Constitution Article XIIID, § 6(c) and Government Code § 54354.5; E. On December 6, 2023, the City Council held a public hearing to consider the results of the protest proceeding and to consider whether to increase the water rates as proposed; F. This Ordinance is exempt from review under the California Environmental Quality Act (Cal. Pub. Res. Code §§ 21000, et seq.; “CEQA") and CEQA regulations (14 Cal. Code Regs. §§ 15000, et seq.; “CEQA Guidelines”) because it establishes, modifies, structures, restructures, and approves rates and charges for meeting operating expenses; purchasing supplies, equipment, and materials; meeting financial requirements; and obtaining funds for capital projects needed to maintain service within existing service areas. This Ordinance, therefore, is categorically exempt from further CEQA review under CEQA Guidelines § 15273; G. This ordinance is adopted in accordance with Health and Safety Code § 5471 to establish the City's current wastewater rates and charges; H. The City Council has considered the evidence and testimony presented at the public hearing. Based in part upon that evidence, and the agenda reports Resolution No. Page 2 of 4 December 20, 2023 presented to the Council regarding this issue, the City Council believes that it is in the public interest to adopt this Ordinance. SECTION 2: AMOUNT OF RATES AND CHARGES. A. The City Council establishes amount of wastewater rates as set forth in attached Exhibit "A," which is incorporated by reference ("Wastewater Charges."). B. The Wastewater Charges include an annual increase of 40%, 30%, 10%, 10%, 4% beginning February 1, 2024 through fiscal year 2027-28. SECTION 3: COST ESTIMATES. The City Manager, or designee, will periodically, but not less than annually, review the Wastewater Charges to determine whether revenues from such charges are meeting actual cost of services and facilities needed to deliver water service to the residents and non-residential developments within the City. If the City Manager determines that revenues do not adequately meet costs, the City Manager will recommend to the City Council a revised rate and charge schedule to be adopted by this City Council by ordinance: SECTION 4: This Ordinance was adopted to comply with the California Supreme Court decision in Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205. To the extent any provision of this Ordinance repeals or supersedes any previous approvals, such repeal or replacement will not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Ordinance's effective date. Any such repealed or superseded part of previous approvals will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance. SECTION 5: If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable. SECTION 6: The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Monterey Park's book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law. SECTION 7: Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
Resolution No.
December 20, 2023
SECTION 8: Severability. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provision or application and, to this end, the provisions of this Resolution are severable.
SECTION 9: Recordation. The Mayor, or presiding officer, is authorized to sign this Resolution signifying its adoption by the City Council of the City of Monterey Park and the City Clerk, or her duly appointed deputy, may attest thereto.
SECTION 10: Effective Date. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE
CITY OF MONTEREY PARK THIS
20th DAY OF DECEMBER 2023.
____________________________
Jose Sanchez, Mayor
ATTEST:
____________________________
Maychelle Yee, City Clerk
APPROVED AS TO FORM:
____________________________
Karl H. Berger, City Attorney
Resolution No. Page 4 of 4 December 20, 2023 I, Maychelle Yee, City Clerk of the City of Monterey Park, California, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a meeting of the City Council of said City at its meeting held on the 20th day of December, 2023, by the following vote, to wit: Ayes: Noes: Absent: Abstain: IN WITNESS WHEREOF, this __th day of __________, 2023. City Clerk of the City of Monterey Park Exhibit A- Current and Proposed Sewer Rates