300 E. Chapman Ave.
Orange, CA 92866
PUBLIC HEARING AND PROTEST PROCEEDINGS
Both in person and mailed written protests must be received prior to the close of the public hearing on Tuesday, March 14, 2023. Each written protest must clearly identify the property or account, reference the proposed rate increases and must include the signature of the property owner or tenant, as applicable. Due to the inability to verify the authenticity of each individual protest, protests received by telephone, electronic mail (e-mail), or via social media sites, including, but not limited to, Facebook or Twitter shall NOT be accepted. All interested parties are invited to attend the public hearing and present written protests and/or oral comments on the proposed rate increases referenced herein. Oral comments made at the public hearing will qualify as formal protests of the proposed rate increases if accompanied by a written protest setting forth the required information (as set forth above). If written protests are submitted by a majority of the affected property owners or customers, the proposed increase(s) will not be imposed.
WHY IS THE CITY PROPOSING RATE INCREASES?
The City of Orange (City) is subject to Proposition 218 and therefore is required by law to charge its customers only what is necessary to provide water and sewer services. The City is proud to have some of the lowest water and wastewater rates in Orange County.
The City is dedicated to keeping rates low by maintaining efficient staffing levels and using reserves when necessary.
The recent drought has decreased City reserves while the costs associated with providing water and wastewater collection service as well as maintaining both systems continue to rise. The City proposes rate adjustments in order to sufficiently fund the increasing costs of operating, maintaining, and replacing the water and sewer systems. The City’s cost to provide water and sewer service includes the cost of: (1) operations and maintenance; and (2) repair and rehabilitation of each system.
WATER
Many outside factors influence the cost of providing safe and reliable water to our customers. In general, the water the City provides to customers comes from a combination of water pumped from the groundwater basin managed by the Orange County Water District (OCWD) and water purchased on a wholesale basis from the Metropolitan Water District of Southern California (MET) through its regional water wholesaler, the Municipal Water District of Orange County (MWDOC). All water produced is pressurized through use of electric pumps and motors and subject to Southern California Edison (SCE) power rates. These three outside agencies (OCWD, MET/MWDOC, and SCE) and the charges they impose on the City have a significant impact on the City’s water rates. The City has no control over the rates it must pay OCWD, MET/MWDOC, and SCE to acquire and produce water.
The City’s water rates can only reflect those direct costs to provide water service to customers, and do not include a profit margin. The costs include: the repair, rehabilitation, and replacement of critical water system infrastructure; water supply and power costs based on charges for imported water; groundwater costs; energy costs for the City’s wells and pump stations; and system operations and maintenance costs to ensure water supply reliability and quality 24/7/365. The proposed increase will enable the City to balance its water service revenues and expenditures, and maintain sufficient funds to repair and/or replace aging water infrastructure. If the increase is approved, Orange water rates will still be among the lowest in Orange County.
PROPOSED WATER RATES
The City currently has a fixed charge and a variable charge structure for each customer class that together comprise the water rate for consumers. As customers are billed bi-monthly, the charts below reflect the proposed bi-monthly rates.
Fixed Charges: The fixed charge is a bi-monthly service charge based on the potential capacity demand that every individual service can place on the City’s water system. The potential capacity demand is reflected by the size of the line serving the customer’s property. The larger the line, the greater the water capacity demand. The charge remains the same (fixed) for each two-month billing period of service. The City also charges a fixed private fire service charge to customers with private fire service connections.
Variable Charges: The variable charges are based on the number of units of water delivered to a property during a billing period (every two months). A unit of water is 100 cubic feet (hcf) which is equal to 748 gallons. Variable charges include a tiered rate for both single family and condo customer classes (a single line serving a single dwelling unit) and a different tiered rate for multi-family customer classes (a single line serving multiple dwelling units), and an elevation charge for Zone 4 and 5 customers, to cover costs associated with pumping water to higher elevations.
Lastly, the City passes through its wholesale water purchase costs through a volumetric pass-through rate.
The City proposes to maintain this rate structure and incorporate a new item: a capital charge recovered through and fixed charge and volumetric rate to fund necessary capital repair and rehabilitation. The proposed rates and charges are shown in the tables inside.
NOTICE OF PUBLIC HEARING
Proposed Adjustment in Water and Sewer Rates
NOTICE IS HEREBY GIVEN that on Tuesday, March 14, 2023, at 6:00 p.m., or as soon thereafter as the matter may be heard, a public hearing will be held at the City of Orange City Council Chambers located at 300 East Chapman Avenue, Orange, CA 92866 to consider proposed increases to the City’s water and sewer rates and charges. If approved by City Council, the proposed rate increases will be effective for services provided on or after April 1, 2023.
Pursuant to State law, protests may be provided by any City customer, or owner of property subject to the proposed rate changes, against any or all of the proposed rate changes described in this Notice. Written protests may be submitted in person to the City Council at the Public Hearing. They may also be submitted by mail addressed to:
City Clerk
City of Orange
300 East Chapman Avenue
Orange, CA 92866.
ADDITIONAL INFORMATION
A report explaining the methodology for determining
the rates and the cost-of-service analysis will be
available in the City Clerk’s Office at the address
listed above on or about February 6, 2023, and will
also be posted on the City’s website. As required
by Government Code Section 66016, the report will
also provide data indicating the amount of cost or
estimated cost to provide water and sewer service,
and the revenue sources anticipated to provide the
service.
The proposed water and sanitation rate adjustments
are applicable to properties served by City’s water
and sewer enterprises. These rates do not impact
customers being served by other agencies.
Frequently asked questions (FAQ’s) about the
proposed rate increase and the answers to those
questions are available on the City’s website by
visiting www.cityoforange.org. If you have additional
questions or want more information about the
proposed rate increase, please contact 714-744-
2233 during regular business hours, or email us at
[email protected]
Presort Std.
U.S. Postage
PAID
Santa Ana, CA
Permit No. 647
WATER PASS-THROUGH CHARGE
A significant portion of the City’s water rates are influenced by wholesale water agencies. Since the City has no control over these charges, it is recommended to continue with a pass-through charge.
Government Code Section 53756 authorizes agencies to adopt a schedule of fees or charges authorizing automatic adjustments that pass-through increases in wholesale charges for water and adjustments for inflation, for a period of five (5) years. The amount of automatic adjustments (Pass-Through Charges) to account for changes in wholesale water costs will be based directly on the incremental difference in costs that the City will incur from these other agencies as a result of increases or decreases in the amount such agencies charge the City. Any such adjustments will only be made to the extent such increases or decreases are not already reflected in the schedule of charges then in effect. Data documenting the amount of the increase or decrease in water commodity costs and the basis for all adjustment calculations will be made available to the public upon request at the time of any automatic adjustment. The pass-through cost applies only to the volumetric usage charge component of the water used and will be assessed on all hcf’s used by a customer. A notice of at least 30 days will be provided to customers before any such adjustments will take effect. The formula for which the automatic Pass-Through Charge is calculated is as follows:
SEWER
The City’s sewer rates also only cover costs to fund sewer expenses and repair and replace the sewer system.
Rates do not include a profit margin. The City currently maintains 312 miles of sewer collection pipelines and has approximately 33,010 sewer connections. The sewer pipe age varies from more than 110-years old to less than 5, and on average it costs around $2 million per mile to replace 8-inch sewer main pipe. In order to adequately maintain the sewer system to ensure the system functions properly and prevent sewerage spills, the City needs to develop and regularly update a financial plan for the sanitation enterprise to meet operation and maintenance costs, and fund necessary capital improvements.
The City is dedicated to keeping rates low by maintaining efficient operations and maintenance. The cost associated with providing wastewater collection service as well as maintaining sewer facilities continue to rise, so the City is proposing rate adjustments in order to sufficiently fund the increasing costs of operating, maintaining, and replacing the sewer system. The City’s cost to provide sewer and environmental compliance services includes the cost of: (1) operations and maintenance; and (2) repair, rehabilitation, and replacement of the system; and (3) storm water management and environmental compliances.
PROPOSED SEWER and CAPITAL RATES
The City’s sewer service currently utilizes a set of bi-monthly fixed rates for its Residential customers (Single Family, Multi-Family, and Condos), and volumetric, per hcf rate based on bi-monthly water use for its Commercial customers. The City plans to maintain this rate structure in future years with necessary revenue adjustments applied to its current set of rates. The following table shows the proposed sewer service rates for the next
five years.
Bi-monthly Fixed Charge
Current
Meter Size Rate Apr 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 (A) (B) (C) (D) (E) (F) (G)
5/8” or 3/4” $32.05 $34.00 $36.04 $37.48 $38.98 $40.15 1” $48.96 $52.75 $55.92 $58.16 $60.49 $62.30
1 1/2” $91.24 $99.63 $105.61 $109.83 $114.22 $117.65 2” $141.98 $155.88 $165.23 $171.84 $178.71 $184.07 3” $260.38 $287.13 $304.36 $316.53 $329.19 $339.07 4” $429.51 $474.63 $503.11 $523.23 $544.16 $560.48 6” $852.35 $943.39 $999.99 $1,039.99 $1,081.59 $1,114.04 8” $2,036.29 $2,255.89 $2,391.24 $2,486.89 $2,586.37 $2,663.96 10” $3,220.23 $3,568.40 $3,782.50 $3,933.80 $4,091.15 $4,213.88 Bi-monthly Variable Charge ($/hcf)
Current
Volumetric Rate Rate Apr 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 (A) (B) (C) (D) (E) (F) (G)
Single Family & Condo
Tier 1 (0-23 hcf) $2.87 $3.08 $3.26 $3.39 $3.53 $3.64 Tier 2 (24-42 hcf) $2.95 $3.20 $3.39 $3.53 $3.67 $3.78 Tier 3 (43+ hcf) $3.05 $3.37 $3.57 $3.71 $3.86 $3.98 Multi-Family
Tier 1(0-15 hcf) $2.87 $3.07 $3.25 $3.38 $3.52 $3.63 Tier 2 (16-19 hcf) $2.91 $3.14 $3.33 $3.46 $3.60 $3.71 Tier 3 (20+ hcf) $2.96 $3.20 $3.39 $3.53 $3.67 $3.78 Commercial $2.94 $3.20 $3.39 $3.53 $3.67 $3.78
Agriculture $2.93 $3.30 $3.50 $3.64 $3.79 $3.90
Construction $2.93 $3.30 $3.50 $3.64 $3.79 $3.90
Bi-monthly Private Fire Service Charge
Fire Service Current
Size Rate Apr 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 (A) (B) (C) (D) (E) (F) (G)
2” $2.97 $3.15 $3.28 $3.41 $3.51
3” $8.62 $9.14 $9.51 $9.89 $10.19
4” $39.02 $18.38 $19.48 $20.26 $21.07 $21.70
6” $113.34 $53.38 $56.58 $58.84 $61.19 $63.03
8” $241.53 $113.75 $120.58 $125.40 $130.42 $134.33 10” $434.36 $204.56 $216.83 $225.50 $234.52 $241.56 12” $330.42 $350.25 $364.26 $378.83 $390.19
16” $704.13 $746.38 $776.24 $807.29 $831.51
Elevation Pumping Charge ($/hcf)
Pumping Current
Zone Rate Apr 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 (A) (B) (C) (D) (E) (F) (G)
4 $0.26 $0.22 $0.23 $0.24 $0.25 $0.26
5 $0.68 $0.56 $0.59 $0.61 $0.63 $0.65
PROPOSED SEWER SERVICE RATES
Sewer Rate Current Apr 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1 2026 Jan1, 2027 Bi-monthly Fixed Rate for Residential Customers
SFR $15.85 $17.41 $18.28 $18.83 $19.21 $19.59
MFR $9.69 $9.42 $9.89 $10.19 $10.39 $10.60
Condo $9.69 $9.42 $9.89 $10.19 $10.39 $10.60
Commerical Volumetric Rate ($/hcf)
Commercial $0.59 $0.61 $0.64 $0.66 $0.68 $0.69
Capital Rate Current Apr 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1 2026 Jan1, 2027 Bi-monthly Fixed Rate for Residential Customers
SFR $7.15 $7.88 $8.28 $8.53 $8.70 $8.87
MFR $4.37 $4.27 $4.48 $4.61 $4.71 $4.80
Condo $4.37 $4.27 $4.48 $4.61 $4.71 $4.80
Commerical Volumetric Rate ($/hcf)
Commercial $0.27 $0.28 $0.29 $0.30 $0.31 $0.31
PROPOSED WATER SERVICE RATES and CHARGES