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Home My WebLink About8.5 Zone7WaterRateIncrease CITY CLERK File# 1000-20 AG EN DA STATEMENT CITY COUNCIL MEETING DATE: October 7, 2003 SUBJECT: Support of Zone 7 in the Proposed Potable Water Rate Increase of Zero Percent for 2004 Report Prepared by: Joni Pattillo, Assistant City Manager ATTACHMENTS: 1) 2) Tri-Valley Water Retailers Group Letter dated September 17, 2003 Draft Resolution RECOMMENDATION: FINANCIAL STATEMENT: Adopt the attached resolution that supports Zone 7's proposed rate increase of 0.0% for potable water in 2004 None DESCRIPTION: Prior to November of each year, Zone 7 may consider increases to the potable water rate that it charges Dublin San Ramon Services District (DSRSD). Zone 7's initial proposal for the 2004 potable water rate was a 7.92 % rate increase which consisted of 2.5% for water quality improvement purposes, 2.5% for additional capital expenditures, and 2.92% for operations. After review by Zone 7 management, the Zone 7 Finance Committee and the Th-Valley Water Retailer Group, Zone 7 management has stated that their recommendation will be for a 0.0 % rate increase for 2004. Zone 7 addressed the DSRSD Board at its September 16, 2003 meeting and presented the background associated with the rate proposal. DSRSD Staff participates in the Th-Valley Water Retailer Group and independently reviewed the Zone 7 proposed rate for 2004 and concurs that a 0.0% rate increase is, in fact, appropriate. Recommendation: Adopt attached resolution supporting Zone 7's proposed rate increase of 0.0% for potable water in 2004. G:\CC-MTGSX2003-qtr4\Oct\I 0-07-03~as-zone 7.doc COPIES TO: Dale Meyers, General Manager, Zone 7 Bert Michalczyk, General Manager, DSRSD Darren Greenwood, Chair, Th-Valley Water Retailers AssociationiTEM NO. __~ C rr Lrw, ottr, ~UM~a~SUO~ Sgl~mber 17, 200~ Board of Directors c/o Dale MYers, General Manager Zone 7 Water Agency 5997 P~rkside Dnve Pleasauto~, CA 94588 F~: {9251 ~0~ t COU~ Ph~ ~75~0 · P~' $73-5267 Ph'. 57~.5~ -F~ 37~531~ Ph: 373-5200 - F~; 373.531~ RCONO~C Ph. ~7~5095 · F~: ~379 Ph: ~7~-5~ -F~ 37~55~ ~: ~7~lO~ -F~ Ph: ]TI~-F~ 371~950 TD~ 37i~98I P~ ~9 ~ Dn~ P~: S~I-5250 - F~: 375-5295 Subject: Prelim!.ary Treated Water Rate for CY 2004 Dear Board Membe~rs: As you may already know, the-four Tri-Vallcy water retail agencies recently formed the Tri-Vailey Water Retailers Group (TWRG). This letter, while printed on City of Livermore letterhead, represents the collective position of staff from the four member agencies: California Water Service Company (Cai Wa~r), City of Livermore, City of Pleasanton, aid Dublin San Kamon Service-q District (DSR.qD). We appreciate your staffmcmbers; Jan Orellaua and Phyllis May, meeting with thc TWRG yesterday to provide information and answer questions about the preliminary treated water rate for calendar year (CY) 2004. Based on infomtion provided at thc mcelkug, we understand thai there are basically thee components that may increase the water rate for CY 2004: (I) capital projects, (2) water quality/rehability, and (3) operating costs. Your staff indicated that it would be recommending no increase from the CY 2003 water rate for CY 2004. To make this possible, Zone 7 would "freeze most positions ~at impact the water rates and reduce some anticipated professional services exper~es md post'pone some capital expenditures ia the current year." Staff further indicated that Zone 7 would conduct an "evaluation of services" duxi_ug Ge year in preparation for fiscal year 2004/05 to minimize any rate increase in 2005. According ro your staff, ~e evaluation of services will include an in-depth look at Zone 7's operations, as well how priorities are set (e.g., pfioritizarion, scheduling and funding of capital projects). It was indicated, at both our meeting yesterday and the Zone 7 beard's Finance Committee meeting, that Zone 7 st, aff would seek input from the water retailers. As water ageaczes, we arc all facing the challenge of contiam~g to meet our customers' demands in light of rising cost~. We too are taking a look at controlling the costs of doing business: lad :reproving efficiency and effe~iveness in providing the same or improved levels of service. Our eumom~ will all benefit from Zone 7 and the TWRG working collaborafively as Zone 7 evaluates its operations and priorities. The TWR. G looks forward m assisting Zone 7 smffover ATTACHMENT Zone 7 Water Agency Board Members Prelimi.nary Treated Wa~er Rate for CY 2004 Page 2 the next year to explore ways to maintain rates at a low level while meeting ail sexvice expectations. Zone 7's proposed evaluation of services addresses two of the three components of the treated water rate: "capital projects" ancl ~'operatmg costs." In addition to studying those two components, the TWtlG recommends ttiat water quality improvement projects and landing also be reviewed. We look forward to working collaboratively on this component as well, To impr°vc ~e funding staras of water quality projects: water retailers supported a water rate increase of 2.5% last year, to be used nad earmarked for implementing projects recommended in Zone 7's Water Quality Management Program. As stated m the October 22, 2002, Zone 7 Board meetilig mi..nates, "the projects that will be funded with this money are necessary capital projects that will accelerate water quality and water reliability projects". Zone 7 sta.ffhas indicatecI that it is uncectain ax this point which water quality oi' water reliability improvement project5 the CY 2003 rate increase will go towards, Water quality remains a high priority for all four water retailers, and we encourage Zone 7 m cont/v, ue to work toward implementation of water quality improvements recommemded by the Water Quality Management Program. Since there are uncertainties related to the funding of water quality improvements, we support maintainmgthe water rate at the CY 2003 amounT, which includes the 2.5% component' specifically earmarked for water quality improvements. In conclusion, we support Zone 7 staffs recommendation that there be no increase from the CY 2003 water rate for CY 2004, wi~ the understanding that there will be no decrease in the level of service from Zone ?. The TWiG commends Zone 7 on its willilagaess to take a step back to assess all three significant components of fatuxe water rates, and to seek input from its customers, i.e., ~e four Tri-Valley water retail agencies. We look forward to cooperating togcther m the benefit of all treated watcr customers in the Tn-Valley, Darren Gxeenwood, Chair Tri-Valtey Water Retailers Groap Copy: Henry wmd~ Cai Water Linch Barton, City of Livermore Dan Mcintyre, City of Livermore Deborah Acosta-McI~eehan, City of Pleasanton Rob Wilson, City of Pleasaxtton Bert Michaiczyk, DSP,.SD" RESOLUTION NO. - 03 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ENDORSING ZONE 7's PROPOSED ZERO PERCENT INCREASE TO THE POTABLE WATER RATES FOR 2004 WHEREAS; the City of Dublin City Council recognizes and endorses Zone 7's proposed zero percent increase to the potable water rate for 2004; and WHEREAS; the Th-Valley Water Retailers Group has reviewed the zero percent rate increase that is being proposed by Zone 7 and concurs with recommendation; and WHEREAS; in consideration of the difficult economic times facing many public agencies including school districts and municipal governments because of the State Budget situation, any water rate increase would place a heaVy burden on already strained budgets of those agencies; and WHEREAS; the City Council commends Zone 7 on the prudent and fiscally responsible approach to pOtable water rate increases for 2004. NOW, THEREFORE BE IT RESOLVED that the City of Dublin endorses the proposed 0.0% increase to the Zone 7 potable water rates for 2004. PASSED, APPROVED AND ADOPTED this 7th day of October, 2003. AYES: NOES: ABSENT: ABSTAIN: ATTEST: Mayor City Clerk G:\CC-MTGS~2003-qtr4\Oct\I 0-07-03Xas-zone 7 water rate.doc ATTACHMENT 2