AGENDA
MUNICIPAL SERVICES COMMITTEE
MEETING NOTICE
FEBRUARY 13, 2024
PUBLIC MEETING 4:00 P.M.
MEMBERS
Felicia Williams, Chair, District 2
Tyron Hampton, Councilmember, District 1
Justin Jones, Councilmember, District 3
Jason Lyon, Councilmember, District 7
STAFF
Sidney Jackson, General Manager
Lisa Hosey, Assistant City Attorney
Jerice Kenebrew, Recording Secretary
MISSION STATEMENT
The City of Pasadena is dedicated to delivering exemplary municipal services, responsive to our entire community and consistent
with our history, culture and unique character.
In compliance with the Americans with Disabilities Act of 1990, Assistive Listening Devices are available from the City Clerk’s Office with a 24-hour advance notice.
Please call (626) 744-4124 to request use of a listening device.
Language translation services are available for this meeting by calling (626) 744-4124 at least 24 hours in advance.
Habrá servicio de interpretación disponible para éstas juntas llamando al (626) 74
4-4124 por lo menos con 24 horas de anticipación.
Items on the agenda may not be called in order listed.
Agendas and supporting documents are available on the Internet at http://ww5.cityofpasadena.net/commissions/city-council-municipal-services-committee/ Materials related to an item on this Agenda submitted to the Municipal Services Committee after distribution of the agenda packet will be posted online and listed as: “Supplemental Agenda Material Received after the Posting of the agenda”.
PUBLIC COMMENT AT THE MUNICIPAL SERVICES COMMITTEE MEETING FOR FEBRUARY 13, 2024, AT 4:00 P.M. WILL BE ACCEPTED IN-PERSON AND BY VIDEOCONFERENCE/TELECONFERENCE.
Link to City Meeting Policy:
cityofpasadena.net/CityCouncilMeetingPolicy
TO VIEW A LIVE STREAM OF THE MEETING:
http://pasadena.granicus.com/MediaPlayer.php?publish_id=9 AND
WWW.PASADENAMEDIA.ORG
In order to facilitate public participation at meetings the City will accept public comment in the following manner:
1. Whether participating in-person or virtually at the meeting, members of the public may provide public comment by submitting a speaker card prior to the start of public comment on that item, at the following webpage:
www.cityofpasadena.net/commissions/public-comment/
If a public comment speaker wishes to speak on more than one agenda item, please indicate which items on the online form (multiple item speakers will be handled according to the process posted on the agenda and as specified in the City meeting policy). Public comments are limited to 3 minutes each, and the Chair and Committee may limit this time if reasonable under the circumstances.
2. In-person Meeting Participation: Complete an online speaker card at the following website: www.cityofpasadena.net/commissions/public-comment/ After submitting a public speaker card, members of the public may attend the meeting in-person by coming to the Pasadena City Council Chamber, Room S249 at City Hall at the date and start-time of the posted meeting.
Virtual Meeting Participation: For virtual participants, you may attend by connecting to the meeting using a computer, other electronic device, or by telephone. Please review the agenda to identify the published start time for the meeting and connect to the meeting just prior to, or at the start of the meeting.
To participate in public comment for an item and to be recognized to speak, it is required that the speaker login to the meeting using the same name or telephone number used on the Speaker Card form. This will allow City staff to locate and promote the speaker into the meeting when it is time for their public comment.
Participants’ phone calls to the Committee meeting will be recorded as part of the Committee meeting. By staying on the line and making public comment during the Committee meeting by phone, you are agreeing to have your phone call recorded. Following is the connectivity information for virtual participation:
C
omputer or electronic devices, join the meeting at: cityofpasadena.net/cczoom Telephone only dial-in: 1-669-900-6833, Meeting ID: 161 482 446
3. Speaker Card Help Line: If a public comment speaker needs assistance in completing a speaker card, please call the City Clerk’s Office at: (626) 744-4124. The help line will open 30 minutes prior to the posted start time of the meeting.
4. Members of the public may submit correspondence of any length prior to the start of the meeting, at the following email address:
j
[email protected]
C
orrespondence will be forwarded to the Committee prior to the start of the meeting, posted online, and made part of the legislative record for the item.
LIVESTREAM WITH CAPTIONING IS AVAILABLE AT WWW.PASADENAMEDIA.ORG, AND ALSO AT WWW.CITYOFPASADENA.NET/COMMISSIONS/AGENDAS, I
F YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT TO THE
AMERICANS WITH DISABILITIES ACT
BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET FORTH ABOVE, CONTACT THE CITY CLERK’S OFFICE
AS SOON AS POSSIBLE AT (626) 744-4124 OR [email protected].
CITY OF PASADENA
MEETING OF
THE MUNICIPAL SERVICES COMMITTEE
FEBRUARY 13, 2024
PUBLIC MEETING: 4:00 PM
PASADENA CITY HALL, COUNCIL CHAMBER
100 NORTH GARFIELD AVENUE, ROOM S249
N
OTICE IS HEREBY GIVEN that the regular meeting of the Municipal Services Committee will be held on Tuesday, February 13, 2024, at 4:00 p.m., to discuss matters on the attached agenda.
I HEREBY CERTIFY that this agenda in its entirety, was posted on the Internet at https://www.cityofpasadena.net/commissions/city-council-municipal-services-committee/ and on the Council Chamber Bulletin Board, Room S249, and the Bulletin Board in the rotunda area; City Hall, 100 North Garfield Avenue, this February 8th, by 6:30 p.m. and that copies hereof were faxed, emailed or delivered to each member of the City Council and to each local newspaper of general circulation, radio or television station requesting notice in writing, all of which recipients are identified on the distribution herein below.
Susana Castro
DISTRIBUTION:
MSC Committee Members Central Library General Manager Pasadena Weekly City Council City Clerk Director of Planning and Permitting Pasadena Star-News City Manager Director of Public Works Los Angeles Times Pasadena Now City Attorney Public Information Officer La Opinion Pasadena Journal In compliance with the Americans with Disabilities Act of 1990, listening assistive devices are available from the City Clerk's Office with a 24-hour advance notice.
Please call (626) 744-4124 to request use of a listening device. Language translation services may be requested with 24-hour advance notice.
Habra servicio de interpretacion disponible para estas juntas llamando al (626) 744-4124 por lo menos con 24 horas de anticipación.
MEETING AGENDA
MUNICIPAL SERVICES COMMITTEE
FEBRUARY 13, 2024
Public Meeting: 4:00 P.M.
Council Chamber, Pasadena
City Hall 100 North Garfield Avenue, Room S249
APPROVAL OF MINUTES
D
ecember 26, 2023 (Canceled Meeting)
January 9, 2024 (Canceled Meeting)
January 16, 2024 (Special Meeting)
1. W
ATER COST-OF-SERVICE ANALYSIS AND RATE DESIGN UPDATE
2. A
UTHORIZATION TO ENTER INTO A POWER SALES CONTRACT WITH SOUTHERN CA
LIFORNIA PUBLIC POWER AUTHORITY FOR SOLAR PHOTOVOLTAIC ENERGY
AND BATTERY ENERGY STORAGE FROM BONANZA SOLAR, LLC FOR AN A
MOUNT NOT-TO-EXCEED $512,048,000 FOR THE WATER AND POWER
DEPARTMENT
3. A
DOPTION OF THE FINAL DRAFT PASADENA PEDESTRIAN TRANSPORTATION AC
TION PLAN
PUBLIC MEETING - 4:00 P.M.
ROLL CALL
PUBLIC COMMENT
NEW BUSINESS
ADJOURN
INFORMATION ONLY
1 01 12/26/2023
CITY OF PASADENA
MUNICIPAL SERVICES COMMITTEE MINUTES
PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
COUNCIL CHAMBER – ROOM S249
DECEMBER 26, 2023
MEETING
The regular meeting of the Municipal Services Committee, scheduled for Tuesday, December 26, 2023 , at 4:00 p.m., was cancelled as ordered on December 21, 2023, and was posted.
ATTEST:
____________________
Jerice Kenebrew
Recording Secretary
__________________________
Vice Mayor Felicia Williams, Chair
Municipal Services Committee
2 01 01/09/2024
CITY OF PASADENA
MUNICIPAL SERVICES COMMITTEE MINUTES
PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
COUNCIL CHAMBER – ROOM S249
JANURARY 9, 2024
MEETING
The regular meeting of the Municipal Services Committee, scheduled for Tuesday, January 9, 2024, at 4:00 p.m., was cancelled as ordered on January 4, 2024, and was posted.
ATTEST:
____________________
Jerice Kenebrew
Recording Secretary
__________________________
Vice Mayor Felicia Williams, Chair
Municipal Services Committee
3 01 01/16/2024
CITY OF PASADENA
MUNICIPAL SERVICES COMMITTEE MINUTES
PASADENA CITY HALL
100 NORTH GARFIELD AVENUE
COUNCIL CHAMBER – ROOM S249
JANURARY 16,2024
SPECIAL MEETING
The regular meeting of the Municipal Services Committee, scheduled for Tuesday, January 16, 2024, at 4:00 p.m., was cancelled, due to lack of a quorum on January 16, 2024 and posted by staff.
ATTEST:
____________________
Jerice Kenebrew
Recording Secretary
________________________________
Councilmember Felicia Williams, Chair
Municipal Services Committee
4 ITEM #1
5 PASADENA WATER AND POWER
MEMORANDUM
February 13, 2024
To: Municipal Services Committee
From: Sidney Jackson
General Manager
Subject: Water Cost-of-Service Analysis and Rate Design Update
This item is to provide an update regarding the Pasadena Water and Power (“PWP”) water cost-of-service analysis (“COSA”) and rate design findings.
BACKGROUND:
During the July 25, 2023, update of the water COSA and rate design process to the Municipal Services Committee (“MSC”), Raftelis Financial Consultants, Inc. (“Raftelis”) presented information and background, including industry best practice, on the cost allocation portion of the study conducted up to that point as well as a comparison of different rate structures with advantages/disadvantages of each. At that meeting, PWP was asked to return with an expanded analysis on water Budget-Based Tiered Rates (“BBTRs”).
SUMMARY:
Since the July 2023 meeting, staff and Raftelis conducted a thorough analysis of BBTRs.
First, staff reached out to other utilities who implemented BBTRs for lessons learned, benchmarking and to determine an in-depth understanding of why each utility adopted BBTRs and why that worked for their community. Staff and Raftelis conducted research on BBTRs and had conversations with Eastern Municipal Water District, Las Virgenes Municipal Water District, and Irvine Ranch Water District; all utilities who have adopted BBTRs and completed the implementation process. All districts who implemented BBTRs felt that it was the best structure for their utilities and were able to provide lessons learned, roadblocks throughout their adoption/implementation process, as well as the resources required to successfully implement and maintain a BBTR structure. One key takeaway from the series of discussions was that each of the utilities that implemented BBTRs have very different community composition from demographic, density, topography, technology maturity and overall development of the communities (i.e., planned community development versus the historic and organic nature of Pasadena’s community) as compared to Pasadena. Despite the different community composition, for all utilities, BBTRs required several years to implement due to ongoing factors such as availability and verification of household and parcel customer information; increased administrative efforts; advanced metering infrastructure implementation; and billing system modifications. 6 Water Cost-of-Service Analysis and Rate Design Update January 23, 2024
Implementation of a BBTR required a commitment of significant resources, which includes cost implications and phased deployment by customer type.
Secondly, in addition to conversations with BBTR adopters, staff analyzed the data availability and costs associated with BBTRs for Pasadena. Various data sources are required to implement BBTRs as a part of the individual formula for each customer, such as parcel irrigable area and local evapotranspiration data. In addition to the environmental data, because each budget is developed individually, data is required to determine the number of individuals living in each household and more demographic information than is currently available to the City. Each data source would require data collection and/or purchase for implementation, which adds to the overall cost to be borne by rate payers for implementing this rate structure. Specifically for the commercial customer class, staff and Raftelis determined there was no way without additional study to implement the BBTR for the commercial customer class with the data available at this time.
Finally, staff incorporated costs into the cost allocation model and generated draft rates for customers for a BBTR structure versus the staff-recommended Tiered by Customer Class rate structure and the current structure for comparison purposes. Raftelis compared these various rate designs incorporating the reallocation of costs and projected revenue increases from the cost-of-service analysis to identify impacts to various customers. The analysis showed the differences between the two rate structures are primarily driven by the additional costs to implement and maintain BBTRs.
CONCLUSION:
Given the factors involved to implement BBTRs and research conducted, it is the opinion of staff and Raftelis that the Tiered by Customer Class rate structure currently provides the optimal structure to continue to promote water conservation through pricing signals to the customer in addition to being compliant with legal requirements for being cost-based and provides the lowest implementation and maintenance cost for Pasadena ratepayers.
Pasadena’s current tiered rate structure allocates water based on meter size, regardless of customer class. BBTRs allocate water budgets based on customer indoor and outdoor needs. The tiered rate structure by customer class incorporates elements of both Pasadena’s current tiered rate structure and BBTR. Staff is seeking discussion and direction for the MSC regarding the proposed direction for the rate structure to return in the next months.
7 Water Cost of
Service Analysis
and Rate Design
Update
City of Pasadena
Municipal Services Committee
February 13, 2024
Water Cost of
Service Analysis
and Rate Design
Update
City of Pasadena
Municipal Services Committee
February 13, 2024
8 2
Background: Study Timeline
Rate setting framework
Rate design analysis
August 2022 –
June 2023
July 2023
MSC Update
Research on BBTRs
Analysis of rate design for
2 potential options
Considered 5 rate designs
MSC requested further
analysis of BBTRs and
Tiered by Customer Class*
Rate Structure and Impact
Review
Request MSC Guidance
*BBTRs: Budget-Based Tiered Rates
January 2024
MSC Update
August 2023-
December 2023
9 3
Rate Structures Analyzed and Compared
*All rate structures have fixed charges
Single-
Family
Residential
Class
Multi-
Family
Residential
Class
Commercial
Class
(small)
Commercial
Class
(medium)
Commercial
Class
(large)
Tier 1 14 10 17 105 1,700
Tier 2 58 20 87 530 10,100
Tier 3 >58 >20 >87 >530 >10,100
Tiered Rate
Structure by
Meter Size
Budget Based
Tiered Rates
(BBTRs)
Tiered Rate
Structure by
Customer Class
and Meter Size
Tiered rate structure incorporating customer classification Staff
recommended
structure
Current
Structure
BBTRs provide individual tier breakpoints
10 4
How Each Rate Structure Attains the
Pricing Objectives
Tiered by
Meter Size
(Current)
Tiered by
Class &
Meter
Size
Budget-
based
Tiered
Rates
Revenue
Stability
Depends on
fixed charge
Depends on
fixed charge
Depends on
fixed charge
Simplicity
Implementation
Affordability
Conservation
Well Mediocre Not so well
11 Budget-Based Tiered Rates Case Studies
Eastern Municipal Water
District IRWD Las Virgenes
Pasadena
(Expected Effort )
Community
Profile
Predominantly Uniform Lots
(easier to provide initial outdoor water use allocation) Varied/Non-Uniform Lots
(baseline water allocation
assumptions)
Territory
Growth Still in Development Matured Development
Data Collection
and
Implementation
Effort
• Ongoing data collection/verification: household, lot sizes, flyover irrigable area data, weather data availability
• Staff training
• Additional staffing: Consistent variance requests, increased billing inquiries, increased customer outreach,
implementation support, administration, conservation and technology staff
• Modifications to billing system and technology
(including
monthly billing)
• Incomplete
residential and
commercial irrigable
parcel information
• Limited weather
information
• Delay in AMI
deployment
Implementation
Time 3-10 Years (phased in by customer type)
5 years
(3 years for AMI
implementation)
Metering During
Implementation Automated Meter Reading (phased commercial with AMI) AMI optimal Previous Rate
Structure
Uniform Rate (minimal price signal) for EMWD and IRWD
Mixed (tiered for water and uniform for sanitation) for Las Virgenes Tiered Rate Structure
(provides price signal)
5 12
6 Water Savings Achieved under Different
Rate Structures
One-Size Fits All Does Not Play a Major Role in Conservation 13 7
Pasadena Water Usage Trends
14 8
Draft Financial Plan Results
FYE 2025
(July 1, 2024)
FYE 2026
(July 1, 2025)
FYE 2027
(July 1, 2026)
FYE 2028
(July 1, 2027)
FYE 2029
(July 1, 2028)
Percent 13% 12% 9% 6% 6%
Proposed Bond $30M $35M
Note: Revenue adjustments are not the same as customer bill impacts which are affected by Cost of Service and Rate Design.
15 • The bill impacts on the following slides assume the average water use by class and meter size
• For the BBTRs bill impacts, we assumed the average Tier 2 breakpoint – which is based on the average irrigable area
• BBTRs bill impacts include estimated additional costs to implement and maintain a BBTR rate structure (approximately $2M and $500k respectively)
• These depict the average customer bill impact; but each customer’s bill impact will vary based on water use and irrigable area
9 Assumptions for Rate Impacts Information
16 10
Sample SFR Bill Impact with Varied Meter
Size
17 11
Sample Multi-Family Bill Impact with
Varied Meter Size
18 12
Sample Commercial Bill Impact with
Varied Meter Size
19 Process and Next Steps
13 STEP 1
Rate Setting
Framework
STEP 2
Financial
Plan
STEP 3
Cost of Service
& Rate Design
STEP 4
Final Rate
Adoption
• Pricing objectives
• What is important?
• Revenue
Requirements
• How much $ do you
need
• Evaluation of
operating and
capital needs
• Cash flow analysis
for financial
sufficiency
• Rate design
• Water use (who
and how much)
• Rate calculations
• Customer impact
analyses
• Cost allocations
• Public Outreach
• Report
• Prop 218 Notice
• Public Hearing
Discussion of Moving Forward with Tiered by Customer Class Today
20 Contacts:
Lynne Chaimowitz
[email protected]
Steve Gagnon
[email protected]
14 Thank you!
21 ITEM #2
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30 ITEM #3
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