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HomeMy WebLinkAboutAgenda Statement 1988/04/05 Item 24• COUNCIL AGENDA STATEMENT Item 2 4/ ~ Meeting Date 4/5/88 ITEM TITLE: Public hearing on proposed reduced rate sewer service charge for low-income households (continued from the meeting of 3/8/88) Ordinance z ~,S 9 To the Chula Vista Municipal Code adding Section 3.20.022 to Chapter 3.20 Sewer Revenue Fund to permi t the reduced sewer charge SECOND BEfi~,DIC~C AIVD NDOETaOd Resolution Modifying the Master Fee Schedule relative to the reduced sewer service charge for low-income households SUBMITTED BY: Director of Public Works REVIEWED BY: City Manager (4/5ths Vote: Yes No X ) At its meeting of March 8, 1988, the City Council continued the public hearing and deferred action on the above subject item for two weeks to the meeting of March 22, 1988. The City Council requested that staff return with an • alternate resolution tying the sewer service charge lifeline to water usage. Attached for Council information are two reports which were presented to the City Council on this subject on September 22, 1987 and January 19, 1988. Also attached is a copy of the Council agenda statement for the meeting of March 8, 1988, which scheduled the public hearing on the reduced rate sewer service charge for low-income households. RECOMMENDATION: That Council hold the public hearing on the reduced sewer service charge and take appropriate action. BOARDS/COMMISSIONS RECOMMENDATION: None DISCUSSION: At the direction of the City Council, staff presented to the Council at a public hearing on March 8, 1988, a proposed reduced rate sewer service charge for low-income households. The City Council deferred action on the item and continued the public hearing and requested that staff return in two weeks with an additional option for Council's consideration regarding variable sewer service"charge rates to encourage water conservation. Staff sees the reduced rate sewer service charge for low-income households and a variable rate sewer service to encourage water conservation as somewhat separate issues. • • Page 2, Item 24 Meeting Date~/5/8~ The item which staff brought before the City Council two weeks ago, at Council's direction, was to implement a reduced sewer service charge for only low-income households. This affects approximately 2,100 households in the City which is a small percentage of the total. The implementation of a variable rate sewer service charge would affect all households within the City including low-income individuals. Option 3 as presented in the report to City Council on September 22, 1987, would charge everyone in the City the same basic unit rate per 100 cubic feet of water usage. That option proposed that for single family uses, the minimum sewer service charge would be $6.10 per month and the maximum amount would be $8.70 per month. In that option, everyone in the City would be charged $.70 per 100 cubic feet of water usage. Low income users, as well as all users, could have some control of their sewer charges by conserving water. It was thought that if low income users were not concerned about higher water bills by inefficiently using water, they should also not be concerned by higher sewer bills. The rationale of Option 3, however, could be modified whereby everyone in the City pays on the basis of every unit of water used. Based upon the City's current sewer service charge, everyone would be charged $.70 per 100 cubic feet of water usage. The low-income households, however, could be capped at a maximum sewer charge of $6.10. Other users of the sewer system would pay on the basis of the amount of water used and it is possible that the monthly rate • charged would exceed the current $8.70 per month cap for single family residential units. It is conceivable under this option that a single family residential unit could pay $10, $15, or $20 a month sewer service charge depending upon the amount of water used. A variable sewer service charge rate would encourage water conservation. However, it would not accurately reflect the amount of water into sewers, since single-family users use much higher water consumption in dry months for irrigation purposes. The City of San Diego has given a preliminary indication that the sewer treatment cost will increase from $626 per million gallons to $870 per million gallons. This represents an increase in the 40 percent range. A rate increase is imminent for next year. Until we have more accurate cost estimates from the City of San Diego, and an analysis of our revenue estimates as well as status of reserves, we aren't in a position now to predict the actual rate increase. The point is that if we choose to go to a variable rate sewer charge, it not be implemented until the rates are increased in order to avoid reprogramming costs twice in a relatively short period of time. Conclusion Staff believes Council has the following options: 1. Adopt the rate structure for low income individuals as proposed in the ordinance. •2. Adopt a variable rate with a cap for single-family lots. '1 • Page 3, Item 24 Meeting Dated/5/$$~ 3. Adopt 1 and 2 above. 4. Adopt 2, but have a different lower cap for lower income users. It is recommended that if options 2 or 4 are selected, that they be done simultaneously with a rate increase study, If option 3 is adopted, then the first part could be implemented immediately. FISCAL IMPACT: The City could lose approximately $65,520 in revenues a year based on 2,100 households applying for the lower sewer rate and $54,600 for a one-time refund with the adoption of the ordinance and resolution. The fiscal impact of adopting a variable rate sewer charge cannot be determined at this time. WPC 3644E • • ~~ _ ~ by tM° Cry Council of Chula Vista, California Dated .~/~ by the City t;o~.ir.,i! of Chula Vista, Ca ifornia Dated 2 z. ~~ ,.