SR-505-001-01-01 (7)
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JUN 10 198&
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Council Meeting: June 10, 1986
Santa Monica, California
To:
Mayor and City council
From:
city staff
Subject:
Sewer Rate Increase
Introduction
This
report
provides
information
regarding
projected
extraordinary sewer fund expenditures and proposes rate increases
to provide sufficient fund balance for operation during the next
fiscal year.
Background
Santa Monica maintains and operates the sewer collection system
within the City and, through a joint powers agreement with Los
Angeles (Contract No. 1544 CCS), operates the Moss Avenue lift
station (located near the pier Bridge on Appian Way and Moss
Avenue) . The joint powers agreem.ent also provides that Santa
Monica will reimburse Los Angeles for transportation, treatment,
and disposal of the sewage generated by Santa Monica and that
Santa Monica will pay a share of the capital improvement costs
(2.4%) associated with the Los Angeles sewage treatment system.
The share percentage is specified in the joint powers agreement
and also represents Santa Monica's guaranteed capacity at
Hyperion.
(Note that Santa Monica's guaranteed capacity is a
percentage of the total capacity of Hyperion and that as a result
of changes at Hyperion, the total capacity will be reduced from
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JUN 1 il 198&
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420 million gallons per day (mgd) to 380 mgd thus reducing Santa
Monica's guaranteed treatment volume from 10.08 mgd to 9.12 mgd.
Santa Monica f s flow for FY 1984-85 was 12.89 mgd for which a
surcharge was paid on 2.81 mgd.)
In 1975, Los Angeles applied for a waiver from Federal Wastewater
Treatment requirements for the Hyperion plant. The waiver would
have allowed continued discharge of partially (66%) secondarily
trea ted effluent to Santa Monica Bay.
The Santa Monica City
Council on April 23, 1985, approved a motion to oppose granting
the waiver. In July 1985, the waiver was denied and Los Angeles
will be required to provide full secondary treatment by the early
1990's.
The requirement
for
full
secondary treatment will
cost
approximately 330 million dollars beyond the already anticipated
capital costs for bringing the plant to 2/3 secondary treatment.
Santa Monica's share for the full secondary treatment is
approximately $7.9 million over the next 5 years estimated by Los
Angeles to be required as follows:
FY
Capital contribution
$3,708,400
1,608,200
933,100
780,300
886,300
86-87
87-88
88-89
89-90
90-9l
These additional costs, coinciding with a more aggressive sewer
infrastructure replacement program on Santa Monica's aging
collection system and the increased operation and maintenance
costs associated with maintaining Santa Monica's collection
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follows:
system will result in a deficit in the Sewer Fund in FY 86-87 as
June 30, 1986 est. fund balance
Estimated Revenue for FY86-87 (current rates)
Estimated Expenditure O&M FY 86-87
Estimated eIP FY 86-87
(excluding Hyperion Contribution)
Estimated Hyperion Capital contribution FY86-87
June 30, 1987 estimated fund balance
based on current rates
$3,6l9,692
+ 2,260,300
(- 1,782,790)
(- 1,1741750)
(- 3,708,400)
(- $ 785,948)
In order to avoid this deficit, the Staff proposes the following:
1. Increase the sewer service charge from 26 cents per billing
unit (one hundred cubic feet or 748 gallons of discharge to
the sewer) to 39 cents per billing unit. All users of the
sewer pay this basic chargei
2. Increase
the
industrial
waste
quality
industrial users by 50% (this will affect approximately 500
surcharge
for
listed on Page 7).
businesses in Santa Monica, the categories of which are
based
difficulty,
Industrial sewer users pay a surcharge
the
degree
of
on
treatment
and
transportation of their discharge presents to the sewer
system~ and
3. Eliminate the exemption of municipal buildings from sewer use
costs to the General Fund).
charges (this will result in less than $4,000 in additional
These actions are projected to generate $850,000 annually in
additional revenue.
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staff anticipates that further financial assistance for the
Wastewater Fund will be required in FY 87-88. A complete analysis
and detailed recommendation for future fiscal years will be based
on a comprehensive plan for the wastewater system which will be
available in the late spring of 1987. This Wastewater Master
Plan is a Wastewater Division goal for the FY 86-87 budget year.
The specific nature of the future recommendations will depend in
large part on the actual construction rate at Hyperion, on the
annual operation and maintenance charges from Los Angeles, and
the effectiveness of Santa Monica's Water conservation Program on
reducing sewer flows to Los Angeles.
Recent History of Sewer Rates
In June, 1976, the sewer service charge was established at 21
cents per billing unit and in June, 1977, the rate was reduced to
19 cents per billing unit. The current rate of 26 cents per
billing unit was established in June 1981, and has remained
unchanged over the last five years. The industrial waste quality
surcharge categories and rates (for approximately 500 businesses)
were established in 1972 and have never been modified.
Implementation
The changes in the service charge, industrial waste quality
surcharge, and municipal classifications should be effective July
I, 1986, to coincide with the beginning of a billing cycle,
minimizing the programming required to modify the billing system
software.
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Impact and Comparison of Proposed Sewer Rate Increase
In order to compare the sewer rates with other utilities, several
"average" users were considered:
Single family home using 40 units of water bi-monthly
Six-unit Apartment using 150 units of water bi-monthly
20 thousand square foot office building using 100 units of
water bi-monthly with 100 feet of frontage.
Table I compares the current and proposed monthly sewer charges
in Santa Monica with the current charges of the cities of Los
Angeles, Beverly Hills, Inglewood, Culver city and Glendale.
City
Santa Monica
(current)
Santa Monica
(proposed)
Los Angeles
(current)
Beverly Hills
(current)
Culver City
(current)
Inglewood
(current)
Glendale
(current)
TABLE 1
MONTHLY SEWER CHARGE COMPARISON
Single Family
$ 2.60
Apartment
Commercial
$17.55
$13.00
$ 3.90
$26.33
$19.50
$ 5.94
$34.28
$22.85
$ 5.03
$l8.57
$13.65
$ 3.11
$13.68
$20.15
$ 2.50
$11.58
$15.08
$ 3.75
$22.50
$17.00
1. Appears as an annual assessment on property tax bill.
2. Is not part of Hyperion System.
3. Have recently proposed higher rates.
As shown in Table l, the proposed sewer fee increases add less
than $1.50 per month per living unit to the average household in
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Santa Monica. The commercial increases are directly dependent on
the volume of water used and in the example add $6.50 per month
to the utility Bill.
As required by state Government Code section 54992, the Santa
Monica Chamber of Commerce and the Conunercial and Industrial
property Association have been notified of the proposed fee
increases.
Budget and Financial Analysis
The revenue increase as a result of increased rates is projected
to be $850,000 for FY 86-87. Additional fund assistance in the
form of a loan may be required to balance the Wastewater Fund for
FY 86-87 depending on the rate of realization of the proposed new
revenues. Rates and revenues for FY 87-88 and beyond must be
evaluated in the future when better estimates of the fund
expenditures are available, but rate increases appear inevitable.
The requirement that municipal facilities pay sewer use fees will
increase costs to the General Fund by less than $4,000.00 in FY
86-87. The past exemption of municipal facilities has had the
effect of a subsidy of the General Fund by the Sewer Fund for
which no credit has been given.
Recommendations
Staff recommends that the City council:
1. Adopt the attached resolution establishing the sewer service
charge at $.39 per billable unit, and establishing industrial
waste quality surcharges as follows, effective July 1, 1986.
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SEWER SURCHARGE CLASSIFICATIONS
Code Classification
o
1
2
Auto, truck, Motorcycle Repair
Bakeries & Candy Mfg.
Food Process Fish, Fruit, Tortillas,
Vegtables, Oil
Food Process - Meat, Poultry
Laundry-Linen & General
Restaurants & Food catering
Service stations
Aircraft Service & Mfg.
Carpet & Rug Cleaning
Ceramic Mfg.
Chemical Mfg.
Cosmetic Mfg.
Etching & Engraving
Foundry
Grinding
Lab Analytical
Lab Dental
Lab Medical
Latex & Rubber Products
Laundry - Towel & Uniform
Mirror Silvering
Paint Spraying
Silkscreen, Text Print Paint Removal
Soil Lab
Textiles
Non-Surcharged, Non-Domestic Waste
surcharge
Cents/HCF
Current New
21.6
56.0
35.8
16.0
l2.7
30.0
l5.1
3.4
2.6
4.1
18.0
9.2
2.2
5.8
0.9
1.1
1.3
0.5
8.1
5.8
21.6
21.6
15.3
6.05
0.0
32.4
84.0
53.7
24.0
19.05
45.0
22.65
5.1
3.9
6.15
27.0
13.8
3.3
8.7
1. 35
1. 65
1.95
0.75
l2.15
8.7
32.4
32.4
22.95
9.08
0.00
2. Eliminate sewer base code 8 (municipal) and authorize the
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4
5
6
A
B
C
D
E
F
G
H
I
J
K
L
M
N
o
P
Q
R
S
appropriate use categories.
utilities Manager to place municipal facilities in their
Prepared by:
stanley E. Scholl, Director of General services
Edward H. Lash, utilities Manager
John E. Hoagland, Administrative Water Engineer
Attachment 1.
(rates)
Resolution Establishing New Sewer Rates
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VOTE;: Affirmative:
Negative:
Abstain:
I Absent: f(1.e::e~
~ PRO~F VOTE~ WITH ANOTHER PERSON BEFORE ANYTHING
~!~I~iDuTi0N; uKi~iNAL ~o De signeci, sealeu ana filed in Vault.
I
NEWSrAPER PUBLICATION (Date:
Department originating staff report (
Management Ser~ise? Lynne BatT~tte -urdinances only
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BEPARE DISTRIBUTION CHECK CONTENT OF ALL
DIS.J;:IBUTION OF RESOLUTION 4# 7::(.);i-
coun~il Meeting Date ~o~l~
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Agenaa Item 11
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Was ~t amended?
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FOR CITY_~ERK'S ACTION
ORDINANCE ,
Introduced:
Adopted:
AalAYS PURT .TSH AOOPI'ED ORDINANCY.C; *
*Cross out Attorney f 5 approval
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Others,:
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tirport Parking Auth.
r~~ r?1 -'-
uditorum Personnel
, Building Dept. Planning
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a.uuLmity &1d Econani.c [leV. Police (en-
forcement?)
~inance Purchasing .
Fire
Recr/Parks
General Servo
I Transportation
Library
Treasurer
Manager
Agency mentioned in document or staff report
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Subject file (agenda packet)
Counler file
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SEND FOU~'COPIES OF'ALL ORDINANCES- TO:
CODP.D SYSTEMS, Attn Peter Maclearie
120 'J-fain' rtroet ....
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SEND FOUR COPIES _.oP__ AU. ORnniAN~E5-lio:
'Debra !-1yrick
SANTA MONICA MUNICIPAL COURT
~72S MAJN STREE~ Foom 118
SANTA MONICA, CA 90401
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(certified?)
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_ *Check Code sections before set'\rli ng .
TOTAL COPIES
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ATTACH. 1
RESOLUTION NO. 7232(CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA ESTABLISHING A SEWER SERVICE
CHARGE, AN INDUSTRIAL WASTE QUALITY SURCHARGE
AND ELIMINATING THE SEWER USE CATEGORY ENTITLED
MUNICIPAL.
WHEREAS, Section 7143B(C) of the Santa Monica
Municipal Code provides for the establishment of a sewer service
charge and industrial waste quality surcharge from time to time
by the city Council: and
WHEREAS, Section 7l43B(B) of the Santa Monica Code
provides that the sewer service charge shall be a charge to
governmental users of the sewer system: and
~~EREAS, the existing sewer use category entitled
"municipal" is not charged a se'.V'er service charge i and
~VHEREAS, the joint powers agreement between the City
of Santa Monica (Contract No. 1544 (CCS)) and the city of Los
Angeles for the transporation, treatment and disposal of sewage
re~~lres that the City of Santa Monica pay certain Capital
Improvement charges related to improve~ents at the City of Los
Angeles Hyperlon Wastewater Treatment Plant; and
~rn~R~AS, the proposed capital improvement charges for
the city of Los Angeles Hyperion Wastewater Treatment Plant
result in a projected deficit for the Sewer Fund in Fiscal Year
1986-1987.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. That effective July I, 1986, the sewer
service charge shall be thirty-nine cents per billing unit.
SECTION 2. That effective July l, 1986, the
industrial waste quality surcharge shall be:
SEWER SURCHARGE CLASSIFICATIONS
Code Classification
surcharge
Cents/RCF
New
o Auto, truck, Motorcycle Repair
1 Bakeries & Candy Mfg.
2 Food Process Fish, Fruit, Tortillas,
Vegtables, oil
3 Food Process - Meat, Poultry
4 Laundry-Linen & General
5 Restaurants & Food Catering
6 Service stations
A Aircraft Service & Mfg.
B Carpet & Rug Cleaning
C Ceramic Mfg.
D Chemical Mfg.
E Cosmetic Mfg.
F Etching & Engraving
G Foundry
H Grinding
I Lab Analytical
J Lab Dental
K Lab 1'-ledical
L Latex & Rubber Products
M Laundry - Towel & Uniform
N Mirror Silvering
o Paint Spraying
P silkscreen, Text Print Paint Removal
Q 5011 Lab
R Textiles
5 Non-Surcharged, Non-Domestic Waste
32.4
84.0
53.7
2~.O
19.05
45.0
22.65
5.1
3.9
6.15
27.0
13.8
3.3
8.7
1. 35
1. 65
1. 95
0.75
12.15
8.7
32.4
32.4
22.95
9.08
0.00
SECTION 3. That effective July I, 1986/ the utilities
Manager shall assign each municipal user of the sewer system to
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an appropriate sewer use category based on the sewer use of each
user.
SECTION 4.
That utility bills which overlap the
effective dates in section 1, section 2, and section 3 of this
resolution shall have the sewer service charge and industrial
waste quality surcharge, where applicable, prorated over the
period as though the sewer use were equivalent on each day of the
billing period.
SECTION 5.
The City Clerk shall certify to the
adoption of this resolution and thenceforth and thereafter the
same shall be in full force and effect.
Approved as to form:
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C1ty Attorney
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(RESOSmffi)
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Adopted and approved thIS 10th day of June, 1986.
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! Mayor
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I hereby certIfy that the foregoing ResolutIon No. 7232(CCS)
was duly adopted by the CIty CouncIl of the City of Santa MonIca
at a meetIng thereof held on June 10, 1986 by the fOllowing
CouncIl vote:
Ayes: Councllmembers: Conn, EpsteIn, JennIngs, A. Katz,
Zane and Mayor Reed
Noes: Councllmembers: None
AbstaIn: Councllmembers: None
Absent: Councllmembers: H. Katz
ATTEST:
~7~
CIty Clerk