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Light & Water Department THE CITY o• OFAZU! J. AGENDA (818) 334-0215
AUGUST 11, 1992
TO: HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: Joseph F. Hsu, Director of Utilities
VIA: HENRY GARCIA, CITY ADMINISTRATOR*
RE: AMENDMENT TO WATER RATES, RULES & REGULATIONS
Submitted herewith for your consideration and approval is
the proposed water rate schedule along with reference table
and graph. Pursuant to the recently adopted budget and its
five-year financial plan, this proposed adjustment requires
an increase in annual revenue by approximately $1. 2
million. The following paragraphs will detail the reasons
for required increase and the structure of the proposed
rate schedule.
The Azusa water system was established in 1900 and the main
transmission and distribution systems were substantial
completed by 1930-1940's. The system has not had much need
for replacement or upgrade until 1980's when single family
dwellings began to convert to multi-family dwellings which
required larger water mains to accommodate fire flow; and
at the same time the originally installed infrastructure
began to show age and deterioration. An extensive capital
improvement program was initiated in 1983 and a couple of
capital enhancement programs were instituted: Reimbursement
District and Water System Development Fee. Between 1983
and 1991 the system has received $8 . 6 million of capital
improvements, of which $2 . 7 million were financed by long-
term debt.
Aging and deterioration of the infrastructure will continue
since we had only replaced a small portion of the original
system. Projected capital expenditure for the next five
years range from $500, 000 to $800, 000 per year.
Compounding the need for capital, the drought condition and
the continuous increase in population worsen the fiscal
condition further--on one hand the drought reduces Safe
Yield of the San Gabriel Basin which reduces Azusa's annual
water rights, and on the other hand the population growth
increases city's water demand thus more purchased water and
more operating costs. In fiscal year 1991-1992 , the costs
associated with purchased water was 25% of water utility's
net operating cost. The attached bar chart illustrates the
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777 North Alameda Avenue, P.O. Box 9500, Azusa, California 91702-9500
Pg. 2; Amendment to Water Rates, Rules, & Regulations
changes in City's replacement water cost as result of
changes in Water Right and actual water production between
fiscal years 1981 and 1991. As a side note, my
Conservation Officer is drafting water conservation
programs which would maintain the current level of water
demand and still provide water for future developments.
The proposed water rate schedule (Exhibit "A") differs in
its structure from the existing one (Exhibit "B") in two
aspects: (1) The Commodity Charge is no longer a flat rate;
instead there will be four sub-classes of service based on
meter sizes; and each sub-class of service consists of a
lifeline rate and an inverted second block rate. (2) All
customers will be subject to the provisions under Special
Condition called Replacement Water Cost Adjustment Factor
(RWCAF) . This is described in more detail in Section (F)
of the rate schedule (Exhibit "A") .
The RWCAF is designed to provide stability to the basic
rate schedule and at the same time to establish a method
which would minimize fiscal impacts from external elements
such as drought, increase in purchased water costs, and
sudden change in customer usage pattern. As I mentioned
above, the costs associated with Replacement Water in this
fiscal year is about 25% of the net operating cost, the
RWCAF method will be a substantial improvement to our
ability to maintain fiscal strength and lessen the need for
future rate adjustments.
The projected revenue increase will be derived mostly from
high usage customers, residential and commercial alike.
The lifeline threshold of 17 hundred-cubic-foot (ccf) is
the average monthly usage in Azusa and it is 5 ccf higher
than the average of residential usage in Los Angeles
County. Net increase without RWCAF for the average
customer will be $1.93 or 10.83% per month, and RWCAF for
fiscal year 1992-1993 is estimated at $. 115 per ccf. This
adjustment can be negative. A table showing comparative
water rates of neighboring cities and private water
utilities is also attached for your reference.
The proposed rate schedule eliminates Irrigation Rate, but
retains Golf Course Rate per existing contract. I am also
proposing changes to miscellaneous charges provides under
the Water Rules and Regulations to reconcile with the
actual costs associated with performing the respective
tasks. These changes will only affect new construction.
They are summarized below:
Pg. 3 ; Amendment to Water Rates, Rules & Regulations
Rule No. Description Existing Proposed
7 .D Late Payment Charge $4 . 00 $5. 00
8 .G Meter Lock Charge $0. 00 $15. 00
13 .A Fire Hydrant Meter Deposit $700. 00 $1000. 00
13 .B Fire Flow Availability Test $25 . 00 $50. 00
I recommend that City Council approve the proposed
amendment to Water Rate, Rules and Regulations by adoption
of the attached resolution, and authorize it to
become effective the first of month following the adoption.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AZUSA FIXING AND ESTABLISHING THE RATES TO BE
CHARGED FOR WATER BY THE CITY OF AZUSA
THE CITY COUNCIL OF THE CITY OF AZUSA DOES HEREBY RESOLVE
AS FOLLOWS:
SECTION 1 . The City Council finds that pursuant to Sec. 15079.1 of the
State CEQA Guidelines (14 Cal. Admin, Code Sec. 15079.1) that CEQA is not
applicable to the approval of the rates and charges set forth herein because such rates
and charges are for the purpose of:
(1) Meeting operation expenses, including employee wage rates and
fringe benefits and departmental operations;
(2) Purchasing or leasing of supplies, equipment or materials;
(3) Meeting financial reserve needs and requirements;
(4) Obtaining funds for capital projects necessary to maintain a service
within existing service areas.
SECTION 2. Pursuant to Section 16.20.030 of the Azusa Municipal
Code, those certain charges set forth in prior resolutions fixing and establishing the
rates to be charged for water by the City are hereby amended to read as set forth in
Exhibit "A", attached to this Resolution, and incorporated herein as though set forth
in full.
SECTION 3. The amended water rates and charges of the Light and
Water Department of the City of Azusa set forth in Sec. 2 of this Resolution shall be
effective as of , 1992.
SECTION 4. The City Clerk shall certify to the adoption of this
Resolution.
PASSED, APPROVED AND ADOPTED this_day of , 1992.
MAYOR
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by
the City Council of the City of Azusa, at a regular meeting thereof held on the
day of , 1992.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
City Clerk
EXHIBIT "A"
WATER RATE SCHEDULE
RULES AND REGULATION
AZUSA WATER RATE SCHEDULE
The following schedule of rates is fixed and established as
the rates to be collected by the City of Azusa Light and
Water Department for supplying water to its customers:
(A) The Monthly Charges for water supplied to domestic,
commercial, industrial, irrigation, and agricultural
customers by the City of Azusa Light and Water Department
within the incorporated limits of said City shall be as
follows:
(1) SERVICE CHARGE
Service Size Charge
5/8" meter $ 5 . 56
3/4" meter 8 . 35
1" meter 11. 82
1-1/2" meter 20. 31
2" meter 29 . 56
3" meter 55. 50
4" meter 92 . 56
6" meter 137 . 67
8" meter 208 . 65
10" meter 244 . 80
12" meter 319 . 93
(2) COMMODITY CHARGES (per 100 cubic-feet or ccf)
(To be added to Service Charge)
(a) 5/8"--l" meter 0--17 ccf $ . 67
Over 17 ccf $1. 01
(b) 1-1/2"--2" meter 0--50 ccf $ . 67
Over 50 ccf $1. 01
(c) 3"-- 4" meter 0--200 ccf $ . 67
Over 200 ccf $1. 01
(d) 6"--12" meter 0-600 ccf $ . 67
Over 600 ccf $1. 01
(3) MINIMUM CHARGE
The minimum charge shall be the monthly service
charge.
(B) Golf Course (per 100 cubic-feet or ccf)
(To be added to Service Charge per (A) (1) ) $ . 86
(C) Fire Service Charge--The Monthly Charge for such
service shall be $6. 00 per diameter-inch.
Water Rate Schedule (continued)
In case a fire service is used for other than fire
purpose, a charge of not less than $25 . 00 shall be
assessed, which charge will be determined by the Water
Superintendent, subject to the approval of the Director of
Utilities for charges over the minimum.
(D) Charges for Outside City Limits--For water supplied
by the City of Azusa Light and Water Department for use
outside the incorporated limits of the City, the Charges
shall be double the applicable rates within the
incorporated limits of the City.
(E) Lifeline Rate. Upon written application to the
Utility, a water customer of the Utility who meets the
following standards is eligible for $2 . 00 discount from the
Service Charge.
1. The customer must be either:
a) . 62 years of age or older; or
b) . Disabled within the meaning of 20 C. F.R.
404 . 1505 and presently is receiving
disability Social Security Benefits.
2 . The customer must be a resident of a single-
family dwelling within the City of Azusa water
service area served by a water meter no larger
than 3/4" .
3 . The customer shall have been a water customer at
that address for at least the previous twelve
(12) months.
4 . The customer's household income is at or below
sixty percent (60%) of the Los Angeles County
median income level. Customers who qualify
under this standard shall re-submit application
every twelve (12) months.
(F) SPECIAL CONDITIONS
(1) The City reserves the right and power to
contract separately with any person for the sale and
delivery of water within or outside the incorporated limits
of the City, at times, places and prices to be fixed and
agreed upon by resolution of the City Council.
(2) The above rates are subject to the Replacement
Water Cost Adjustment Factor (RWCAF) which is to provide
automatic adjustment of the Utility's water rate schedule
commodity charges per 100 cubic feet whenever the Utility
Water Rate Schedule (continued)
is subject to purchasing water to replace water produced
above City's water rights.
The Light and Water Department shall determine the
RWCAF pursuant to the following methodology prior to the
beginning of each fiscal year. The Director of Utilities
shall notify the City Council of the new RWCAF. It shall
be applied to all water bills beginning the first billing
cycle of the new fiscal year.
Methodology:
1. Determines Azusa's Integrated Production Rights
(R) for the following fiscal year based on the Safe Yield
declared by the San Gabriel Basin Watermaster in the Spring
of each year.
2 . Project Azusa's total water production (P) based
on estimated sales (S) for the following fiscal year.
3 . Derive the amount of Replacement Water by
subtracting (R) from (P) .
4 . Compare this amount of Replacement Water with
the amount of replacement water of fiscal year 1983-1984
(Base Year) , the differential is (X) .
5. Derive the costs (C) associated with (X) which
consists of replacement cost, Watermaster A&G costs and
production costs.
6 . Derive Replacement Water Cost Adjustment Factor
(RWCAF) by dividing (C) by (S) .
7 . If the RWCAF is less than $. 01/ccf, then apply
$. 01/ccf commencing the first bill in July until (C) amount
is reached.
8 . In the event in Step 4 the projected Replacement
Water is less than the replacement water of the Base Year,
the RWCAF derived from Steps 5 and 6 shall be a credit to
be applied to all bills commencing the first billing of
July; and Step 7 also applies.
ISSUED BY: Joseph F. Hsu, Director of Utilities
Effective 1, 1992 by Resolution No. Dated
Superseding Resolution No. 91-C2 Dated 2/19/91
EXHIBIT "B"
I. WATER RATE SCHEDULE
The following schedule of rates is fixed and established as the
rates to be collected by the City of Azusa Light and Water
Department for supplying water and installing water service
connections:
(a) The monthly charges for water supplied by the City of Azusa
Light and Water Department within the incorporated limits of said
City shall be as follows:
SERVICE SIZE CHARGE
5/8" meter 4 . 28
3/4" meter 6. 42
1" meter 9 . 09
1-1/2" meter 15. 62
2" meter 22 . 74
3" meter 42 .70
4" meter 71. 20
6" meter 105. 90
8" meter 160.50
10" meter 188. 30
12" meter 246. 10
QUANTITY RATES
General Service, per 100 cubic feet $ . 67
Golf Course and Irrigation, per 100 $ . 54
cubic feet
(b) For fire service only, the monthly charge for such service
shall be $5 . 00 per diameter-inch.
In case a fire service if used for other than fire purposes,
a charge of not less than $25 . 00 shall be assessed, which charge
will be determined by the Water Superintendent, subject to the
approval of the Director of Utilities for charges over the
minimum.
(c) (Outside City Limits) For water supplied by the City of
Azusa Light and Water Department for use outside the incorporated
limits of the City, the charges shall be double the applicable
rates within the incorporated limits of the City.
Water Rate Schedule (continued)
(d) Lifeline Rate. Upon written application to the City, a
water customer of the City of Azusa who meets the following
standards is eligible for $2. 00 discount from the Service Charge.
1. The customer must be either:
-62 years of age or older; or
-Disabled within the meaning of 20 C.F.R. 404 . 1505 and
presently is receiving disability Social Security
Benefits.
2 . The customer must be a resident of a single-family
dwelling within the City of Azusa water service area
served by a water meter no larger than 3/4" .
3 . The customer shall have been a water customer at that
address for at least the previous 12 months.
4 . The customer' s household income is at or below sixty
percent (60%) of the Los Angeles County median income
level. Customers who qualify under this standard shall
re-submit application every twelve (12) months.
(e) The City reserves the right and power to contract
separately with any person for the sale and delivery of water
within or outside the incorporated limits of the City, at times,
places and prices to be fixed and agreed upon by resolution of
the City Council
ISSUED BY: Joseph F. Hsu, Director of Utilities
Effective April 1, 1991 by Resolution No. Gil - CI- Dated � 1� lcl
Superseding Resolution No. 8543 dated 12/5/88
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