City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends the City Council adopt a Resolution:
1. Approving the Engineer’s Report for the Sewer User Service Charge -
Fiscal Year 2011/2012;
2. Declaring its Intention to levy and collect assessments within said
District for Fiscal Year 2011/2012; and,
3. Setting a Public Hearing for June 27, 2011, at 7:00 p.m. in the Mike
Balkman Council Chambers.
DISCUSSION:
Pursuant to a Resolution adopted by the City Council on Monday, May 23, 2011, the
Director of Public Works/City Engineer has prepared the Engineer’s Report for the
Sewer User Service Charge and filed said Report with the City Clerk. A copy of the
Engineer’s Report is attached to this report for consideration, and recommended
approval, by the City Council.
Based on the Engineer’s Report, no increase to the sewer user service charge will be
proposed at the Public Hearing on June 27, 2011. The existing sewer user service
charge formulas for Fiscal Year 2010/2011 are proposed to be the same for Fiscal
Year 2011/2012.
Meeting Date: 06/06/2011 Item Number: C-3
CITY COUNCIL AGENDA ITEM: Adoption of a Resolution Approving the Engineer’s
Report, Declaring the Intention to Order the Annual Sewer User Service Charge,
and Setting the Date, Time and Place for the Public Hearing to be Monday, June 27,
2011 at 7:00 PM in the City Council Chambers for the Sewer User’s Service Charge
Contact Person/Dept.: Mate Gaspar/PW Phone Number: 310-253-5602
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Agenda and Meetings – City Council (06/01/2011);
Department Approval:
Charles D. Herbertson(05/27/11)
City Attorney Approval:
Carol Schwab (by H. Baker) (05/31/11)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (06/01/11)
City Manager Approval:
John M. Nachbar (06/01/11) City of Culver City, California
Agenda Item Report
This evening, the City Council is asked to adopt a resolution (1) approving the
Engineer’s Report, (2) declaring the City Council’s intention to levy and collect
assessments for the upcoming fiscal year; and (3) setting the time and place for the
public hearing as required by Culver City Municipal Code (CCMC) Section
15.01.070.
Should the City Council adopt the proposed resolution, pursuant to 15.01.070(G) of
the CCMC, the City Clerk shall give notice of the public hearing by causing the
Resolution of Intention to be published at least 10 days prior to the date of the
hearing. The public hearing is scheduled for June 27, 2011.
FISCAL ANALYSIS:
As detailed in the Engineer’s Report, the proposed charges for Fiscal Year
2011/2012 will address estimated costs for providing complete operation,
maintenance, and local capital improvements for the Culver City sewerage system
and for the estimated payments due to the City of Los Angeles for Culver City's share
of the Los Angeles Amalgamated System costs. As mentioned above and in
accordance with the Engineer’s Report, staff does not foresee an increase in the
Sewer User Charge for Fiscal Year 2011/2012.
ATTACHMENT:
1. Engineer’s Report
2. Proposed Resolution
MOTION:
That the City Council:
Adopt a Resolution (1) approving the Engineer’s Report , (2) declaring the City
Council’s intention to levy and collect assessments for the Sewer User Service
Charge - Fiscal Year 2011/2012, and (3) setting the time, date, and place for a
Public Hearing for June 27, 2011, at 7:00 p.m. in the Mike Balkman Council
Chambers.
MEETING DATE:
AGENDA ITEM:
06/06/11
Adoption of a Resolution Approving the
Preliminary Engineer's Report, Declaring the
Intention to Order the Annual Sewer User
Service Charge, and Setting the Date, Time,
and Place for the Public Hearing for the Sewer
User's Service Charge
ATTACHMENTS
Pages
1 Resolution of Intention 1-3
2 Preliminary Engineer's Report 4-10 I
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RESOLUTION NO. 2011-R
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CULVER CITY, CALIFORNIA, APPROVING THE
ASSESSMENT ENGINEERS REPORT, DECLARING ITS
INTENTION TO ORDER THE ANNUAL LEVY AND
COLLECTION OF ASSESSMENTS FOR THE SEWER
USER'S SERVICE CHARGES AND SETTING A TIME AND
PLACE FOR A PUBLIC HEARING THEREON.
WHEREAS, pursuant to the provisions of Culver City Municipal Code
("CCMC") §5.02.035.A, the City Council previously established a system of sewer users
service charges providing that each parcel of property shall pay its proportionate share of
the costs for operation, maintenance, repair and improvements of the City sewerage
system (the "Sewer User's Service Charges"); and
WHEREAS, the City Council desires to declare its intention to provide for the
levy and collection of annual assessments for Fiscal Year 2011-2012, to provide for the
costs and expenses necessary for the operation, maintenance, repair and improvements of
the City sewerage system; and
WHEREAS, the Engineer's Report has been prepared and filed with the City
Clerk and submitted to the City Council in accordance with GCMG §5.02.035.B; and
WHEREAS, the City Council has carefully examined and reviewed the
Engineers Report as presented and is preliminary satisfied with the proposed report, each
and all of the budget items and documents as set forth therein and is satisfied that the levy
amounts, on a preliminary basis, have been allocated so that each parcel of property shall
pay its proportionate share of the costs for operation, maintenance, repair and
improvements of the City sewerage system as set forth in the Engineer's Report.
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NOW, THEREFORE, the City Council of the City of Culver City, DOES
HEREBY RESOLVE as follows:
1. The Engineer's Report as presented, consisting of the following: a
description of the operation, maintenance, repair and improvements of the City sewerage
system, the estimated costs of operation, maintenance, repair and improvements, and the
formulas used to determine the sewer user service charges for the parcels, is hereby
approved on a preliminary basis and is on file in the Office of the City Clerk open for public
inspection.
2. It is the intention of the City Council to levy and collect assessments
for the Sewer User's Service Charges to pay the annual costs and expenses for the costs
for operation, maintenance, repair and improvements of the City sewerage system for the
fiscal year commencing July 1, 2011 and ending June 30, 2012. The operation,
maintenance, repair and improvements are generally described as: 90 miles of sewer
pipelines, seven sewer pump stations, and sewage transmission and treatment costs
payable to the City of Los Angeles per the executed Amalgamated Agreement with City of
Los Angeles. Costs include all necessary service, operations, administration and
maintenance required to keep the City's sewerage system in a healthy, vigorous and
satisfactory condition.
3. The Engineer's Report, as preliminarily approved by the City Council,
is on file with the City Clerk and open for public inspection. Reference is made to the
Engineer's Report for a full detailed description of the operation, maintenance, repair and
improvements to be maintained, and the proposed assessments upon assessable lots and
parcels of land within the City.
-2- IVIICHEAL O'LEARY, Mayor
City of Culver City, California
APPROVE-TO FORN
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HWAB,-City Attomii
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4. The maximum assessment is not proposed to increase from the
previous year above that previously approved by the property owners (as increased
assessment" is defined in California Government Code §54954.6).
5. Notice is hereby given that a Public Hearing is scheduled to be held at
the Mike Balkman Council Chambers, 9770 Culver Boulevard, Culver City, California, on
June 27, 2011 at 7:00pm or as soon thereafter as the matter may be heard. All interested
persons, prior to the conclusion of the hearing, shall be afforded the opportunity to hear
and be heard. The City Council shall consider all oral statements or written communication
made or filed by any interested person.
6. The City Clerk is hereby directed to give notice of the Public Hearing
by causing the resolution of intention, or summary thereof, to be published, posted and
mailed as provided in CCMC §5.02.035.C.
APPROVED AND ADOPTED this day of 2011.
ATTEST:
MARTIN R. COLE, City Clerk
A11-00236
3 PUBLIC WOR:KS D . E PA RTM.ENT
9770 CULVER BOULEVARD, 2ND FLOOR
CULVER CITY, CALIFORNIA 90232-0507
CHARLES D. HERBERTSON
Public Works Director/City Engineer
Phone (310) 253-5600
FAX (310) 253-5626
ENGINEER'S REPORT
ON THE ANNUAL LEVY
2010-2011
SEWER USER'S SERVICE CHARGE
IN THE CITY OF CULVER CITY UNDER THE
PROVISIONS
OF CHAPTER 5.02 OF THE CODE OF THE CITY OF
CULVER CITY, CALIFORNIA
FILED with the City Clerk
on June 01, 2011
PRESENTED to the City Council
and APPROVED by Resolution
No. 2011-R , adopted by said
City Council on June 27, 2011
and thereafter filed in the
Office of the City Clerk
4
Martin Cole
City Clerk
City of Culver City
TO: The Honorable Mayor and Members of the City Council FROM: Charles D. Herbertson, Public Works Director and City Engineer
CITY ENGINEER'S REPORT FOR SEWER USER'S SERVICE CHARGES FOR
FISCAL YEAR 2011-12
1.0 Introduction
A major challenge confronting those responsible for wastewater infrastructure,
transportation, treatment and disposal is acquiring adequate funds to finance and
operate facilities and capital equipment, along with implementing appropriate pricing
structures to ensure the self-sufficiency of the utility. The financing vehicle that is used
by the utility and the timing of the financing are crucial in ensuring that wastewater
customers are appropriately paying for facilities that they need, and not inappropriately
financing facilities for future customers. It is a major goal of an effective financial plan to
'match' the economic impact on customers with the benefits received from the service.
Regulations governing Federal and State grant funds require the City of Los Angeles to
maintain a Cost Recovery Program (Sewer User Charges System) which includes all
operations and maintenance costs directly or indirectly related to the treatment and
collection of liquid waste discharge by residents and businesses. As a result of Culver
City's contractual relationship with the City of Los Angeles for wastewater treatment at
the Hyperion Treatment Facility, Culver City (City) is also required to recover from each
wastewater user their proportionate share of the costs incurred for wastewater collection
capital improvements within Culver City, wastewater system operation and
maintenance, City of Los Angeles capital improvements for conveyance to Hyperion
and operation and maintenance at Hyperion. Accordingly, Culver City adopted a plan to
collect wastewater user charges and implemented it for the first time in fiscal year 1980-
81.
The City recovers wastewater user charges on an annual basis. Since the plan's
inception, the County Auditor-Controller's offices, and the annual property tax bill, have
been utilized as the vehicle for both billing and collection. This method has proven to be
both functionally satisfactory and exceptionally economical over the last twenty eight
years.
In order to achieve a fair and equitable system of wastewater user charges, users are
charged in a manner consistent with their actual use of the system. This comprises not
only the flow quantity, but also the wastewater strength (quality) as characterized by
BOD (biochemical oxygen demand) and SS (suspended solids).
Pursuant to the Culver City Municipal Code, in FY 2003-04 the City reviewed and
approved the Sewer User's Service Charges (SUSC) structures and billing formulas to
ensure that the City utilizes an effective pricing structure within the constraints of
Proposition 218. Additionally, the City wanted to ensure that its sewer pricing structure
continues to achieve the goals and objectives of the community, while maintaining a fair
and equitable distribution of costs to all of its customers.
2.0 Discussion $7,231,008
$ 350,000
Sewer User Service Charge
Interest Income
Staff recommends that the existing rates be affirmed for 2011-12 tax rolls. Staff
believes, based on the current Sewer Fund balances and the anticipated revenues and
costs, that the existing rates will protect the solvency of the Fund.
Credits for residential landscaping can be given in two ways. 1) Either the resident can
install a separate water meter for landscaping which will not be assessed on the tax bill
or 2) prove by submitting calculations and evidence that the percentage reduction in the
tabled formula is not adequate.
Last year, the City of Los Angeles charged $1,568,000 million for operations,
maintenance and capital improvements for the treatment and conveyance of Culver City
wastewater. For fiscal year 2011-12, the charge is projected to be about $2,335,000.
3.0 Calculation of Annual Expenditures and Revenue
For fiscal year 2011-12 the estimated annual expenditures are as follows:
Operating Costs — City $3,414,001
Operating and Capital Projected charges from $2,335,000
City of Los Angeles*
Debt Service on Sewer Bond $1,604,300
Capital Projects — City $ 4,320,000
Total FY 2011-2012 budget $ 11,673,301
Table 1 shows the Five-Year Cash Flow Projection for the Sewer Enterprise Fund.
*Operating and capital projects charges from the City of Los Angeles for fiscal year
2011-12 is a projection that was made in January 2010. Based on past experience, the
charges amount will likely change and be at a lower amount.
In addition to annual operating and capital expenditures, sewer fund rates are set
so as to maintain a minimum reserve within the sewer fund. The minimum
reserve amount is calculated as follows:
Minimum Reserve Fund = 70% of annual operations budget + 2 yrs of debt service
+ annual capital improvements budget
For fiscal year 2011-2012 the minimum required reserve fund is estimated to be
$9,918,400.and the available cash balance is projected to be $24,213,328.
For fiscal year 2011-12 the estimated annual revenue is as follows: Base
Charge SUSC
$7,581,008
Staff recommends that the current SUSC billing formulas and charges remain the same
for fiscal year 2011-12 due to the healthy cash reserve balance.
4.0 Summary of Current SUSC Rate Structure
The current SUSC Rate Structure is composed of a base charge and a commodity
charge for all customer classifications.
A. Base Charge
The base charge of the SUSC are fixed costs and are comprised of two components:
Customer Costs — Calculating the sewer user service charge for the annual property tax
bill and responding to property owner inquiries regarding the charges
Capacity Costs — Capacity costs are fixed costs associated with the cost of providing
the required capacity within the sewer collection system . These costs include rents
and leases.
B. Commodity Charge
The Commodity Charge is also comprised of two components:
Collection System Costs — Collection system costs are debt service and variable costs
associated with the maintenance of the underground pipelines from each customer and
the integrated pipeline system prior to the discharge points to the City of Los Angeles
transmission system. As there are no treatment costs involved in the maintenance of
the Culver City's collection system, these costs are allocated on a flow basis only.
Treatment Costs — The process and costs of providing transmission, treatment, and
disposal of Culver City's customers' sewage are provided and determined by the City of
Los Angeles. These costs are considered variable costs, as they vary with the flow and
sewage strength as metered and determined by the City of Los Angeles. Treatment
costs are recovered through commodity rates charged on the basis of each customer's
adjusted actual water usage and their assumed sewage strengths. In July of every year
the City of Los Angeles provides Culver City with the Amalgamated System Sewerage
System charge rates for the upcoming fiscal year.
Commodity Charge
Annual Water Return to Rate for the
Usage X Sewer X Customer
5.0 Current SUSC Rates for 2010 - 11 Base
Charge SUSC
Base Charge Commodity Charge
(Per HCF Annual total flow)
Multi-Family $ 42.32 per unit + (0.85W x $3.85)
Single Family $ 42.32 + (0.58W x $3.85)
Group ll Users: $ 42.32 + ( W x $3.85)
(Commercial no food preparation)
Group Ill Users: $ 42.32 + (W x $7.63)
(Commercial with food preparation)
Group IV Users: $ 42.32 + (W x $3.75)
(Institutional)
Group V Users: $ 42.32 + (VV x $3.26)
(Schools)
Group VI Users: Individual Special Users
601 $ 42.32 + (W x $4.10)
602 $ 42.32 + (W x $5.35)
603 $ 42.32 + (W x $5.35)
604 $ 42.32 + (W x $3.75)
605 $ 42.32 + (VV x $3.21)
606 $ 42.32 + (/1/ x $5.35)
607 $ 42.32 + (VV x $3.85)
609 $ 42.32 + (W x $3.85)
610 $ 42.32 + (W x $0.77)
Wz- -Annual Water Consumption In HCF
Unit is a resident dwelling unit.
Annual Water Consumption was based on calendar year 2008.
6.0 Proposed SUSC Rates for 2011-12
Commodity Charge
Annual Water Return to Rate for the
Usage X Sewer X Customer Base Charge Commodity Charge
(Per HCF Annual total flow)
Multi-Family $ 42.32 per unit + (0.85W x $3.85)
Single Family $ 42.32 + (0.58W x $3.85)
Group ll Users: $ 42.32 + ( W x $3.85)
(Commercial no food preparation)
Group III Users: $ 42.32 + ON x $7.63)
(Commercial with food preparation)
Group IV Users: $ 42.32 + (W x $3.75)
(Institutional)
Group V Users: $ 42.32 + (W x $3.26)
(Schools)
Group VI Users: Individual Special Users
601 $ 42.32 + (W x $4.10)
602 $ 42.32 + (VV x $5.35)
603 $ 42.32 + (W x $5.35)
604 $ 42.32 + (W x $3.75)
605 $ 42.32 + (W x $3.21)
606 $ 42.32 + ON x $5.35)
607 $ 42.32 + (W x $3.85)
609 $ 42.32 + (W x $3.85)
610 $ 42.32 + (W x $0.77)
W=Annual Water Consumption In HCF
Unit is a residential dwelling unit
On June 13, 2010, the City Council conducted a public hearing for the adoption of the
2010/11 sewer user service charges. The City Council was informed that Golden State
Water Company (GSWC) stated they would no longer provide the water consumption
data for each parcel. GSWC stated that they considered the water consumption data to
be private and that the California State Public Utilities Commission (CPUC) had not
directed them to release it. Per staff recommendation the City Council approved that
the fiscal year 2009-2010 sewer user service charges be used for the fiscal year 2010-
2011 sewer user service charges.
On August 23, 2010, the City Council authorized the use of the 2009 water consumption
data during the preparation of next year's annual Engineer's Report for the Sewer User
Service Charge (which will result in a one-time adjustment (deduction or addition) to the
Sewer User Service Charge in Fiscal Year 2011/2012). Meanwhile GSWC determined
that they could provide the water consumption data to Culver City if a confidentiality
agreement was put in place. This agreement has been executed and the GSWC has
provided the 2009 and 2010 water consumption data. The 2011/12 sewer user service charges will be calculated using the 2010 water
consumption data provided by GSWC and Los Angeles Department of Water and
Power. Also the one-time adjustment (deduction or addition) from the aforementioned
2009 water consumption data will then be applied to the 2011/12 sewer user charges.
7.0 Recommendations:
In Summary, Staff makes the following recommendations:
• Continue to use Los Angeles Auditor-Controller property tax roll for SUSC billing
purposes for FY 2011-2012 as it eliminates costly billing systems, additional staff,
and minimizes bad debt.
• Adopt a resolution that reaffirms the existing SUSC billing formulas for fiscal year
2011-12.
Charles D. Herbertson RCE 46658
Public Works Director and City Engineer
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