S:\City Council\Council Agenda packet\2023 - City Council Agenda Packets\12 December 2023\2023-12-19\218\Ordinance 876 As Amended Utility Rate Increase REV(333999.1).docx
1 2
3 ORDINANCE NO. 876
4 5 AN UNCODIFIED ORDINANCE OF THE CITY
6 COUNCIL OF THE CITY OF YREKA, CALIFORNIA
7 DETERMINING THAT THERE WAS NO MAJORITY
8 PROTEST OF THE PROPOSED WATER AND
9 WASTEWATER RATE INCREASE AND ADOPTING
10 UPDATED WATER AND WASTEWATER SERVICE
11 RATES AND SUPERSEDING THE EXISTING RATES
12 ESTABLISHED BY RESOLUTION NO. 2018-27 AND
13 FINDING THE ORDINANCE EXEMPT FROM CEQA
14 15 RECITALS
16 WHEREAS, the City of Yreka (“City”) operates and maintains potable water 17 and wastewater systems for the benefit of residents and businesses in the City, 18 and also for certain customers outside the boundaries of the City; and 19 WHEREAS, the City water and wastewater systems are operated as self20 supporting utility enterprises; and 21 WHEREAS, revenue from water and wastewater services rates and other 22 sources fund the ongoing operating and capital needs of City water and 23 wastewater systems, including providing for normal facility operations, 24 replacement and repair of equipment, improvements required to meet state 25 and federal regulatory requirements, inflation and other costs; and 26 WHEREAS, the water services rates currently applied to City customers were 27 last updated by Resolution No. 2018-27 adopted by City Council on June 21, 28 2018; and
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29 WHEREAS, the wastewater rates currently applied to City customers were 30 last updated by Resolution No. 2018-27 adopted by City Council on June 21, 31 2018; and
32 WHEREAS, the City contracts with PACE Engineering (“PACE”), as City 33 Engineers and a task order was initiated by staff to update the City’s water 34 and wastewater financial plans and to recommend rates based on the financial 35 plans; and
36 WHEREAS, PACE has prepared a report dated September 2023 entitled 37 “Water and Wastewater Utility Rate Study for the City of Yreka” (“Report”); 38 and
39 WHEREAS, the Report presents a five-year financial plan for each utility that 40 reflects the City’s FY 2023-24 budget and financial conditions as of the 41 beginning of the current fiscal year, as well as obtaining funds to meet the 42 City’s debt service obligations and capital improvement projects to maintain 43 service with existing service areas during the five-year planning period 44 extending through FY 2027-28; and
45 WHEREAS, recommendations in the Report concerning water services rates 46 include applying a 9.6 percent overall annual rate increase in the first part of 47 each of the next five fiscal years, and charging certain fixed monthly charges 48 regardless of the amount of water actually used; and 49 WHEREAS, recommendations in the Report concerning wastewater services 50 rates include applying a 9.5 percent overall annual rate increase in the first 51 part of each of the next five fiscal years and charging a certain monthly usage 52 rate for non-residential household equivalents that are based on 90% of winter 53 water consumption or available flow factors for similar type of discharges; 54 and
55 WHEREAS, the Report demonstrates that the recommended rates do not 56 exceed the reasonable cost of providing water and wastewater services and, as 57 such, the proposed rates are not levied for general revenue purposes; and December 19, 2023 Yreka City Council Agenda 169 of 177
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58 WHEREAS, the proposed rates reflect the cost of providing service to all 59 customers and customer classes through the apportionment of costs based on 60 customer, capacity, and demand characteristics; and
61 WHEREAS, on October 3, 2023, PACE representatives and the Finance 62 Director presented the Report to the City Council and members of the public 63 at a public meeting, and having heard the presentation and comments 64 regarding the Report, the City Council accepted the Report and the 65 recommendations contained therein; and
66 WHEREAS, in accordance with Government Code Section 50076, fees that 67 do not exceed the reasonable cost of providing the service or regulatory 68 activity for which the fees are charged and which are not levied for general 69 revenue purposes are not special taxes; and
70 WHEREAS, at least forty-five days in advance of the public hearing at which 71 this Ordinance was considered, notice of the public hearing, and notice of oral 72 and written protest procedures against the proposed rates increases, were 73 mailed to all property owners and customers in compliance with California 74 Constitution Article XIII D, Section 6; and
75 WHEREAS, notice of the public hearing was also published in a local 76 newspaper in accordance with applicable laws; and
77 WHEREAS, at the conclusion of the public hearing, the City Clerk tabulated 78 the number of written protests received and reported that there was not a 79 majority protest of the proposed water services rate increase or of the 80 proposed wastewater services rate increase by customers, owners or 81 authorized representatives of identified parcels receiving such services. 82 FINDINGS
83 WHEREAS, based on the information presented, including the staff report 84 and comments made by members of the public, the City Council of the City of 85 Yreka finds as follows:
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86 A. The purposes of the updated water and wastewater services rates 87 established pursuant to this Ordinance are to (1) recover the reasonable 88 estimated cost of the services for which the rates are charged; (2) provide that 89 such costs are allocated among City customers so as to bear a fair and 90 reasonable relationship to customers’ burdens on and benefits from City water 91 and wastewater services; (3) secure the financial stability of the water and 92 wastewater systems; (4) ensure high quality services; and (5) provide a sound 93 financial plan that meets existing debt service obligations, which will assist in 94 funding capital improvement projects.
95 B. The updated water and wastewater services rates established pursuant to 96 this ordinance are not levied for general revenue purposes. 97 C. The rates set forth in this Ordinance are intended to meet operating 98 expenses, meet financial reserve needs and requirements, secure funding for 99 capital improvement projects to maintain service within existing service areas, 100 and recover costs necessary to maintain the current level of City water and 101 wastewater services. As such, adoption of the rates proposed in the Report, as 102 they relate to provision of water and wastewater services to City customers, is 103 not a “project” within the meaning of the California Environmental Quality 104 Act or C.E.Q.A. (Public Resources Code § 21080(b)(8)(A, C, and D)). 105 D. In adopting the rates set forth in this Ordinance, the City Council of the 106 City of Yreka is exercising its powers under Article XI, Section 7 of the 107 California Constitution.
108 E. The record of proceedings (“Record”) establishes that the costs listed in 109 the Report as those incurred by the City in providing water and wastewater 110 services to City customers are reasonable estimates of the cost of providing 111 such services, and that the revisions recommended in the Report for existing 112 water and wastewater service rates are necessary to recover the reasonable, 113 estimated cost of providing such services for which the rates are charged, to 114 allocate such costs among City customers so that they bear a fair and 115 reasonable relationship to customers, and to secure the financial stability of 116 City water and wastewater systems in accordance with the analyses contained 117 in the Report.
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118 F. The procedures followed and the rates adopted are in compliance with 119 California Constitution Article XIII D.
120 G. There is not a protest of the proposed water services rate increases or of 121 the proposed wastewater services rate increases by a majority of customers, 122 owners, or authorized representatives, of identified parcels receiving such 123 services.
124 THE CITY COUNCIL OF THE CITY OF YREKA DOES HEREBY
125 ORDAIN AS FOLLOWS:
126 Section 1. Definitions.
127 a. “City Customer’ shall mean any person, corporation, or other entity that 128 receives City water and/or wastewater services, regardless of whether City 129 water and/or wastewater services are provided to property within the City, or 130 property outside the boundaries of the City.
131 b. “Rates” shall mean the charge or charges imposed on City Customers to 132 recover the costs incurred by the City in providing water and wastewater 133 services.
134 Section 2. Water and Wastewater Services Rates Imposed. The Rates set forth 135 in Exhibit “A”, attached, are hereby approved and adopted and said Rates 136 shall supersede and replace the rates set forth in City Council Resolution No. 137 2018-27. Rates shall apply to and be paid by City Customers at the times, and 138 in the amounts, and otherwise apply and be administered as prescribed in this 139 Ordinance, said Rates to become effective with the service period also known 140 as the billing cycle ending March 20th of each calendar year, through and 141 including December 31, 2028.
142 Section 3. Time for Payment of Rates. City Customers shall pay the Rates as 143 prescribed in bills issued to City Customers in accordance with Section 144 12.04.410 and 12.13.140 of the City’s Municipal Code, subject to all 145 applicable regulations, requirements and penalties for non-compliance 146 pursuant to the Municipal Code and other applicable law.
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147 Section 4. Rate Amounts. The Rate amounts applicable to water shall be as 148 specified in the rate schedule attached as Exhibit A to this Ordinance, which 149 schedule is hereby incorporated into this Ordinance. The Rate amounts 150 applicable to wastewater services shall be as specified in the rate schedule 151 attached as Exhibit A to this Ordinance, which schedule is hereby 152 incorporated into this Ordinance.
153 Section 5. Uses of Rate Revenue. The revenues raised by payment of the 154 Rates shall be used to fund the estimated reasonable cost of providing the 155 services for which the Rates are charged, and the Rate revenues shall not be 156 used for general revenues purposes.
157 Section 6. Subsequent Analysis and Revision of the Rates. The Rates set 158 herein are adopted and implemented by the City Council in reliance on the 159 Record identified above. The City may continue to conduct further study and 160 analyses to determine whether the Rates should be revised. When additional 161 information is available, the City Council may review the rates to determine 162 that the Rate amounts do not exceed the estimated reasonable cost of 163 providing the services for which the Rates are charged. 164 Section 7. Effective Date. This Ordinance will become effective sixty-one 165 days following its adoption.
166 Section 8. Implementation. The City Council hereby authorizes and directs 167 the City Manager to take any action and sign any documents necessary to 168 implement this Ordinance.
169 Section 9. CEQA Exemption. The Council finds that this Ordinance calling a 170 mail ballot election does not meet the definition of a project for the purposes 171 of the California Environmental Quality Act, under Public Resources Code 172 Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an 173 administrative governmental activity which will not cause a direct or indirect 174 physical change in the environment. The City Council’s review and adoption 175 of changing the water and wastewater rates is not a project under CEQA 176 Guidelines mechanisms which do not involve commitment to any specific December 19, 2023 Yreka City Council Agenda 173 of 177
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177 project which may result in a potentially significant environmental impact. 178 Thus, no environmental analysis is required at this time. 179 Section 10. Execution. The Mayor and City Clerk are authorized to subscribe 180 this Uncodified Ordinance where indicated below to evidence its approval by 181 the City Council.
182
183 Introduced as amended at a regular meeting of the City Council held on 184 December 5, 2023, passed, approved by at least a majority and adopted at a 185 regular meeting of the City Council of the City of Yreka held on December 186 19, 2023, by the following vote:
187
188 AYES:
189 NOES:
190 ABSTAIN:
191 ABSENT:
192
193 Corey Middleton, Mayor
194 Approved as to Form: Attest:
195
196 Andrew Jared, City Attorney Cyndy Prohaska, City Clerk 197
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198 Exhibit A
199
200
201 Water Rates (as amended)
202
203
204 Wastewater Rates (as amended)
205
206
207
December 19, 2023 Yreka City Council Agenda 175 of 177
Revenue Comparison Water
At 6.5% Actual
(FY 21-22)
Actual
(FY 22-23)
Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
STANDARD WATER RATES USED
5/8" Meter Fixed Monthly Service Charge $36.97 $38.45 $40.95 $43.61 $46.45 $49.46 $52.68 (See Table 12 for Larger Meters Charges)
Percent annual increase on fixed rate 4.0% 6.50% 6.50% 6.50% 6.50% 6.50% Percent annual increase on consumption 4.0% 6.50% 6.50% 6.50% 6.50% 6.50% Single-Family Consumption Rates ($/1000 gallons)
Excess over 101 Gallons $2.18 $2.26 $2.41 $2.56 $2.73 $2.91 $3.10 Non-Single-Family Consumption Rate ($/1000 gallons)
Excess over 101 Gallons $2.18 $2.26 $2.41 $2.56 $2.73 $2.91 $3.10
LOW INCOME WATER RATES
5/8" Meter Fixed Monthly Service Charge $34.97 $36.45 $38.95 $41.61 $44.45 $47.46 $50.68 Consumption Rates same as Single Family
Water Utility Rate - Fee Revenue Only
Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Fixed Service Charges 1,967,000 2,095,000 2,231,000 2,376,000 2,530,000 Consumption Charges 1,437,000 1,530,000 1,629,000 1,735,000 1,735,000 3,404,000 3,625,000 3,860,000 4,111,000 4,265,000 19,265,000 At 9.6% Actual
(FY 21-22)
Actual
(FY 22-23)
Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
STANDARD WATER RATES USED
5/8" Meter Fixed Monthly Service Charge $36.97 $38.45 $42.14 $46.19 $50.62 $55.48 $60.81 (See Table 12 for Larger Meters Charges)
Percent annual increase on fixed rate 4.0% 9.60% 9.60% 9.60% 9.60% 9.60% Percent annual increase on consumption 4.0% 9.60% 9.60% 9.60% 9.60% 9.60% Single-Family Consumption Rates ($/1000 gallons)
Excess over 101 Gallons $2.18 $2.26 $2.48 $2.71 $2.98 $3.26 $3.57 Non-Single-Family Consumption Rate ($/1000 gallons)
Excess over 101 Gallons $2.18 $2.26 $2.48 $2.71 $2.98 $3.26 $3.57
LOW INCOME WATER RATES
5/8" Meter Fixed Monthly Service Charge $34.97 $36.45 $40.14 $44.19 $48.62 $53.48 $58.81 Consumption Rates same as Single Family
Water Utility Rate - Fee Revenue Only
Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Fixed Service Charges 2,024,000 2,218,000 2,431,000 2,664,000 2,920,000 Consumption Charges 1,479,000 1,621,000 1,777,000 1,948,000 1,948,000 3,503,000 3,839,000 4,208,000 4,612,000 4,868,000
Projected Comparitive Revenue Change (Rate Loss) Each Year 99,000 214,000 348,000 501,000 603,000 Projected Cummulative Revenue Change (Rate Loss) 99,000 313,000 661,000 1,162,000 1,765,000 December 19, 2023 Yreka City Council Agenda 176 of 177
Revenue Comparison Wastewater
At 6.3%
Actual
(FY 22-23)
Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Single-Family Flat Rate per Unit $51.10 $54.31 $57.74 $61.37 $65.24 $69.35 Low Income Single-Family Rate per Unit $49.10 $52.31 $55.74 $59.37 $63.24 $67.35 Multi-Family Flat Rate per Unit $51.10 $54.31 $57.74 $61.37 $65.24 $69.35 Non-Residential Flat Rate per HE (see Notes) $51.10 $54.31 $57.74 $61.37 $65.24 $69.35
1. One household equivalent (HE) equals 200 gallons per day of wastewater flow, which is the estimated flow from a typical single-family household.
2. Non-residential HEs based on 90% of winter water consumption or available flow factors for similar type of discharges Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Wastewater Utility Rate - Fee Revenue Only $3,109,604 $3,305,509 $3,513,756 $3,735,122 $3,970,435 $17,634,426 At 9.5%
Actual
(FY 22-23)
Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Single-Family Flat Rate per Unit $51.10 $55.95 $61.26 $67.08 $73.46 $80.44 Low Income Single-Family Rate per Unit $49.10 $53.95 $59.26 $65.08 $71.46 $78.44 Multi-Family Flat Rate per Unit $51.10 $55.95 $61.26 $61.37 $65.24 $80.44 Non-Residential Flat Rate per HE (see Notes) $51.10 $55.95 $61.26 $61.37 $65.24 $80.44
1. One household equivalent (HE) equals 200 gallons per day of wastewater flow, which is the estimated flow from a typical single-family household.
2. Non-residential HEs based on 90% of winter water consumption or available flow factors for similar type of discharges Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Wastewater Utility Rate - Fee Revenue Only $3,203,214 $3,507,519 $3,840,733 $4,205,603 $4,605,135 Budgeted
(FY 23-24)
Projected
(FY 24-25)
Projected
(FY 25-26)
Projected
(FY 26-27)
Projected
(FY 27-28)
Projected Comparitive Revenue Change (Rate Loss) Each Year 93,610 202,010 326,977 470,481 634,700 Projected Cummulative Revenue Change (Rate Loss) 93,610 295,620 622,598 1,093,078 1,727,778 December 19, 2023 Yreka City Council Agenda 177 of 177