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HomeMy WebLinkAboutG- 3 Proposed Azus Valley Water Company Water Rate Adjustment of A t a The City of Azusa .5 oz� zs bsb�,�. ILIF©R AGENDA TO: HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL FROM: JOSEPH F. HSU, DIRECTOR OF UTILITIES VIA: HENRY GARCIA, CITY ADMINISTRATO' DATE: JUNE 5, 1997 RE: PROPOSED AZUSA VALLEY WATER COMPANY WATER RATE ADJUSTMENT Background At the time the City applied to the California Public Utilities Commission(CPUC) to acquire Azusa Valley Water Company (AVWC) in 1993, we informed CPUC that AVWC's system would require much capital improvement to bring its system up to par with the City's standard, and therefore, rate base would be adjusted to reflect capital investment. In addition, staff projected and CPUC concurred that two physical systems would be integrated in five years and at that point, tariff for both system will be equalized. Pursuant to Section 4.7 (Rate Covenant) of the Operating and Assignment Agreement relating to the issuance of Series 1993A Revenue Bonds for the acquisition of Azusa Valley Water Company dated June 1, 1993, the City covenants that it will prescribe, revise and collect such charges for the services and facilities of AVWC which, after allowances for contingencies and error in the estimates, shall produce Gross Revenues sufficient in each Fiscal Year to provide Net Revenues equal to at least 1.25 times the Operating Payments coming due and payable during such Fiscal Year. During the fiscal of 1996-1997, addition $1.5 million of capital improvements have been done to the AVWC system. In concert with AVWC's past rate making practice, staff is proposing to adjust the rate base to allow the City to recover its capital investment. At the same time the adjustment will bring AVWC's tariff one step closer to that of the City's and be ready to close the gap by next fiscal year which is the fifth year from its acquisition. Findings Based on the reasons stated above, I am recommending to adjust the AVWC's water rates by LIGHT& WATER DEPARTMENT Joseph F. Hsu, Director 729 North Azusa Avenue i P.O. Box 9500 42 !� 818/812-5208 (Phone) Azusa, California 91702 e Z A 818/334-3163 (Fax) Pg. 2: City Council—Proposed AVWC Water Rate Adjustment increase the second block of each rate from $.78/ccf to $.89/ccf. (l ccf= 100 cubic feet). No change is proposed to the remainder of the tariff. An average residential customer having normal consumption of 17ccf per month will not see any increase. Comparison of the existing, the proposed, and the existing City's rates are tabulated below for your information. Service Quantity City AVWC AVWC (Monthly) (Existing) (Existing) (Proposed) 3/4"-1" 0-17ccf $.67/ccf $.65/ccf $.65/ccf 18 or more $1.01/ccf $.78/ccf $.89/ccf 11/2-2" 0-50ccf $.67/ccf $.65/ccf $.65/ccf 51 or more $1.01/ccf $.78/ccf $.89/ccf 3" - 4" 0 - 200ccf $.67/ccf $.65/ccf $.65/ccf 201 or more $1.01/ccf $.78/ccf $.89/ccf 6" & up 0 - 600ccf $.67/ccf $.65/ccf $.65/ccf 601 or more $1.01/ccf $.78/ccf $.89/ccf The customers of AVWC will continue to enjoy the lowest water rates in the San Gabriel Valley even with the increase. A comparative bar chart is attached. Recommendation Staff recommends that City Council approve the proposed adjustment to AVWC water rates by resolution. Attachment cc: Bob Bowcock Khairi Ali RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA AMENDING THE SCHEDULE OF CHARGES, RULES AND REGULATIONS FOR THE LIGHT AND WATER DEPARTMENT OF THE CITY OF AZUSA WHEREAS, Pursuant to Section 13.08.020 of the Azusa Municipal Code, the City Council may from time to time establish and amend its Schedule of Charges and Rules and Regulations concerning utility services provided by its Light and Water Department;and WHEREAS,the amendment of the Schedule of Charges and Rules and Regulations will assist the City in: A. Meeting operating expenses of the Light and Water Department, including employee wage rates and fringe benefits; B. Permitting the purchase and/or leasing of supplies,equipment or materials for the operating expenses of the Light and Water Department; C. Meeting financial reserve goals of the Light and Water Department;and D. Financing capital projects necessary to maintain basic service within existing service levels;and WHEREAS, the City has conducted an extensive analysis of the amendments to the Charges and Rules and Regulations and has determined that the amendments reasonably reflect the cost and enforcement action borne by the Light and Water Department to provide services to its residents;and WHEREAS,the City Council has determined that the proposed amended Schedule of Charges pertaining to water-related services is based on individual customers'consumption of water and is not imposed on a per parcel basis for providing a property related service;and WHEREAS,the amendment of the Schedule of Charges and Rules and Regulations are statutorily and categorically exempt from the requirements of the California Environmental Quality Act since citing these fees fits within the statutory exemptions for local agency decisions involving the adoption and collection of rates,tolls and other charges,pursuant to Public Resources Code Section 210800(b)(8)and Section 15273 of the California Environmental Quality Act Guidelines. NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF AZUSA DOES RESOLVE AS FOLLOWS: Section 1. The City Council hereby adopts the amendments to the Schedule of Charges and Rules and Regulations set forth in Exhibit "A" which is attached to this Resolution and is incorporated herein as though set forth in full. Section 2. The amendments to the Charges and Rules and Regulations shall become effective on July 1, 1997. } Section 3. The City Clerk shall certify the adoption of this Resolution. PASSED,APPROVED AND ADOPTED this day of , 1997. 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 , 1997. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY Best Best& Krieger LLP 15I ISFRS,CANnS1RI col )T'AVWCRA It 797 EXHIBIT "A" City of Azusa Light & Water Department Azusa Valley Water System PROPOSED RATES (Effective 7/1/97) General Metered Service (1) Commodity Charge (per 100 cubic-feet or CCF) (a) 5/8" - 1 " meter O - 17 CCF $ .65 Over 17 CCF .89 (b) 11/2" - 2" meter O - 50 CCF $ .65 Over 50 CCF .89 © 3" - 4" meter O - 200 CCF $ .65 Over 200 CCF .89 (d) 6" and up O - 600 CCF $ .65 Over 600 CCF .89 (2) Service Charge: per meter per month 5/8x3/4 . . $ 6.20 x 3/4 . . 9.05 1" . 15.65 1 '/z" 28.75 2" . . 45.95 3" . . 87.60 4" . . 141 .50 6" . 249.30 8" . 360.70 (3) Minimum Charge: The minimum charge shall be the monthly Service Charge Special Conditions: 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 is subject to purchasing water to replace water produced above City's water rights. 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