SR-011309-1F~_
c;~YO, City Council Report
Santa rlonica~
To: Mayor and City Council
City Council Meeting: January 13, 2009
Agenda Item: 9 ~ ~
From: Lee E. Swain, Director of Public Works
Subject: Revision to Fire Line Meter Water Rates
Recommended Action
Staff recommends that City Council adopt a resolution revising the water fire line meter
service charge.
Executive Summary
On July 8, 2008, City Council adopted a water rate resolution establishing revised water
rates and a new rate structure effective August 1, 2008. The resolution includes rates
and charges for fire line meters. It was recently discovered that the service charges in
the fire line meter rates included in the. report were incorrect. There is no financial
impact. The error does not affect revenue estimates or the calculation of other water
rates.
Background
Fire line meters are installed in water service lines supplying water dedicated to fire
protection systems (fire sprinklers, private hydrants, etc.) in commercial, and in limited
residential, applications. Unless there has been a fire on the premises, month to month
usage is zero. Commodity charges apply. only to water used during a fire.
Nevertheless, these meters are read and maintained on the same basis and frequency
as all other domestic and commercial meters, and a service charge is billed
independent of usage.
For this reason, the rate structure for fire service meters was not changed to a
commodity-only structure as were all other domestic water meters in the rate .adoption
of July 2008. The rate structure .for fire service meters continues to comprise a fixed
service charge plus a commodity charge.
1
On May 13, 2008, Council approved a five year schedule of water and wastewater
water rate increases. On July 8, .2008, City Council held a public hearing and adopted
Resolution No. 10321 CCS revising water rates and water service charges, effective
August 1, 2008. Section 5 in the resolution established a fixed bi-monthly service
charge for fire line meters. The fire line service charges approved pursuant to
Resolution 10321, along with the previous charges, are stated in Table 1 below.
TABLE 1
Meter size Previous charges
2" $34.10
3" $58.66
4" $93.76
6" $181.47
8" $286.73
10" $409.54
Per Resolution 10321
$62.67
$111.63
$181.60
$356.48
$566.37
$811.23
Discussion
The first bills including the new charges for fire services were received by customers in
November 2008. After numerous calls were. received inquiring about the magnitude of
the service charge increase, the rate consultant was contacted to ascertain the
justification for such a large increase, as it was not contained in the body of the final
report. It was discovered that an error had been. made in the final report in the table
indicating the service charges for fire lines. A letter was mailed to customers on
December 12, 2008 explaining the error and offering payment options. The previous
charges and the correct charges, incorporating the 11% increase approved by Council,
are indicated in Table 2 below
TABLE 2
Previous Charaes Correct Charaes as ofAuaust 1.2008
2" $34.10. $37.85
3" $58.66 $65.12
4" $93.76 $104.07
6" $181.47 $201.44
8" $286.73 $318.28
10" $409.54 $454.60
2
The attached resolution establishes the correct schedule for charges for fire service
lines. Following Council approval, customer invoices will be adjusted to reflect the
correct rates
Financial Impacts & Budget Actions
There are no budget actions or financial impacts resulting from the revision of the fire
line meter service charge. The revenue budget and the rate analysis were prepared
with the Council approved 11 % increase.
Prepared by:
Gil Borboa, Water Resources Manager
Attachment: Resolution
Approved:
Forwarded to Council:
Lee E. Swain P,~L~fnont Ern
Director, Department of Public Works C`ttyy Manager
3
Reference Resolution
No. 10372 (CCS).