HomeMy WebLinkAbout23 - Conduct a Public Hearing and Consider Water and Sewer Rate AdjustmentsQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
November 14, 2023
Agenda Item No. 23
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Mark Vukojevic, Utilities Director - 949-644-3011,
mvukojevic@newportbeachca.gov
PREPARED BY: Mark Vukojevic, Utilities Director, mvukojevic@newportbeachca.gov
PHONE: 949-644-3011
TITLE: Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
ABSTRACT:
The City Council conducted a Study Session on August 22, 2023, and approved the
2023 Water and Sewer Rate Studies on September 26, 2023. The completed studies
analyze the cost of services, revenues and reserves, and recommend increases to the
water and sewer rates. Increases are needed to fund the increased costs to purchase
and pump water, to operate the system, and to fund the increased Capital Improvement
Program to rehabilitate and maintain the City of Newport Beach's (City) water and sewer
infrastructure for the long term. Staff has sent notices to all affected property owners and
customers per state law. The City Council is asked to conduct a public hearing, tabulate
the results of protests received, and if a majority protest is not received, approve the
five-year water and sewer rate increase effective January 1, 2024.
RECOMMENDATIONS:
a) Conduct a public hearing to accept comments on the proposed water rates and at the
conclusion of the hearing close the 45-day notice period;
b) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
c) Direct the City Clerk to tabulate the results of the protests received from property
owners and customers and announce the findings;
d) Adopt Resolution No. 2023-74, A Resolution of the City Council of the City of Newport
Beach, California, Establishing Water Rates and Charges Effective January 1, 2024,
and Four Years of Phased In Increases Thereto; and
e) Adopt Resolution No. 2023-75, A Resolution of the City Council of the City of Newport
Beach, California, Establishing Sewer Rates and Charges Effective January 1, 2024,
and Four Years of Phased In Increases Thereto.
23-1
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 2
DISCUSSION:
Executive Summary:
• Both the Water and Wastewater Enterprise Funds operate at a structural deficit,
drawing down on net working capital reserves to fund the current Capital
Improvement Programs.
• Increased replacement and rehabilitation of the water and sewer system pipes and
components (the Capital Improvement Program) are needed and are estimated to
cost $45 million over the next five years.
• Current and future inflationary costs are affecting the Capital Improvement
Program as well as all operational costs for materials, supplies, labor and
electricity. The cost of pumping groundwater and purchasing imported water
continues to increase.
• New comprehensive Water and Sewer Rate Studies have been completed,
reviewed by the Finance Committee, and approved by the City Council.
• Water and sewer rate increases are recommended to properly sustain the water
and sewer system, with regular increases each year for five years.
• The average rate increase for the first year is approximately $4.77/month for water
and $2.20/month for sewer services, per household.
• The City Council is asked to conduct a public hearing and to approve the new,
5-year rate schedule.
If approved, water and sewer rate adjustments will commence on January 1, 2024, and
will adjust annually on January 1 of each subsequent year. The total amount of a
customer's bill will depend on the amount of water consumed. Based on the typical
single-family residential customer consuming 10 HCF per month with a 5/8" metered
connection, the bills will increase as noted below:
Current MrM 2024 wEr 2025 2026
singie ramify Kesiaentiai
Monthly Typical Bill (5/8" meter and 10 HCF)
Water
$63.92
$68.69
$74.19
$80.19
$86.19
$92.19
$ Increase
$4.77
$5.50
$6.00
$6.00
$6.00
Sewer
$13.65
$15.85
$18.35
$21.35
$24.85
$28.35
$ Increase
$2.20
$2.50
$3.00
$3.50
$3.50
On August 22, 2023, the City Council held a study session to review the water and sewer
rate studies and the proposed rates. On September 26, the City Council approved the
rate studies, authorized the public noticing, and set a date of November 14 for the public
hearing. In accordance with Proposition 218, local agencies are required to provide a
45-day notice period whereby property owners may submit in writing a protest objecting
to the proposed water rates. At the conclusion of the notice period, the City is required to
conduct a public hearing and tabulate the protests received. In the absence of a majority
of property owners objecting to the rate, the City Council may adjust the rate and/or
structure. The 45-day period will conclude at the end of the November 14, 2023 public
hearing.
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Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 3
Rate Study Background:
Every few years, as the current rate schedules expire, a separate financial plan and rate
studies are necessary to evaluate the water and sewer rates and to determine the charge
for customers. Rate studies were previously completed in 2017 for sewer and in 2019 for
water. These studies represent a best practice for determining utility rates that are fair,
equitable and reflective of the demand placed on the systems by the customers. The City
retained Black & Veatch Corporation to conduct the studies and assess the City's water
and sewer rate structures. The goal was to ensure that the City's plans for critical
infrastructure maintenance and for funding capital improvement projects with cash are in
alignment with the proposed rates.
On May 11, 2023, and July 26, 2023, the Finance Committee reviewed the water and
sewer rate financial analysis of both funds. This included the reserve policy, the continued
reinvestment needs for infrastructure replacement through the Capital Improvement
Program, inflationary cost increases, and preparation for future droughts. Briefly
discussed were typical steps and decision points for evaluating rates and rate structures.
Staff recommended, and the Finance Committee concurred, with maintaining a similar
and simplified, easy -to -understand rate structure and moving fixed and variable rates to
better match actual costs. The City Council studied and approved the various items as
noted above on August 22, 2023, and September 26, 2023.
The rate studies have been constructed with a financial plan that corrects the structural
deficit and sufficiently funds operations, capital and reserves. Each fund has a reserve
policy/target, which considers the various types of risk the utility faces. The reserve
policies are similar to the previous policies; however, they better articulate the types and
uses of the reserves. In general, even with the rates increasing, reserve calculations are
below target. The rates ramp up over the years, attempting to reach the target values by
the fifth year (the amount is similar to the existing policy).
Reserve Policy for the Water Enterprise Fund:
• O&M Reserve — to cover day-to-day expenses and maintain sufficient funds to
cover operating cash flows, periods of lower -than -expected water sales, or
unforeseen cost.
> 33% of operating expenses (or 4 months of expenses)
• Capital Reserve — to cover a portion of upcoming annual capital expenditures,
smooth out the amount of capital infusion needed each year, and help mitigate
unexpected capital costs.
> 75% of 5-year average CIP
• Rate Stabilization Reserve — to absorb lower -than -expected revenue due to
short-term decreases in water sales in order to avoid large swings in rates charged
to customers over time.
> 30% of water use reduction (approximately $3 million)
23-3
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 4
Reserve Policy for the Sewer Enterprise Fund:
• O&M Reserve — to cover day-to-day expenses and maintain sufficient funds to
cover operating cash flows, periods of lower -than -expected sewer sales, or
unforeseen cost increases.
> 25% of operating expenses (or 3 months of expenses)
• Capital Reserve — to cover a portion of upcoming annual capital expenditures,
smooth out the amount of capital infusion needed each year, and help mitigate
unexpected capital costs.
> 100% of 5-year average CIP
Understanding the fees, the water and sewer bill:
Water and sewer users are billed for two components: the size of the meter, known as
the fixed charge (or standby/ready-to-serve charge), and the commodity or water usage
charge. Most users are billed every two months via a Municipal Services Statement. This
statement also includes charges for the City's recycling program and the Fire Medics
program for those who are subscribed. Some users receive a monthly bill, and the future
goal is to transition to monthly billing.
The rate studies looked at each of these charges, including their proportionality and
recommended structured rate levels consistent with industry standard, in order to fairly
and equitably recover the cost of providing water and sewer to the City's customers. The
Finance Committee concurred with the goal of moving fixed and variable rates to better
match actual costs. In order to accomplish this, most of the rate increases are reflected
in the fixed meter charges as compared to the commodity charges. This approach better
aligns with actual fixed expenditures, enhances the stability of the Enterprise Funds, and
continues to maintain affordability and water conservation goals.
Water System:
The Utilities Department oversees the water system to provide safe and reliable water for
drinking, irrigation and fire protection to Newport Beach residents, businesses and
visitors. These essential services are accomplished through a strategic combination of
dedicated in-house licensed staff operators (on -call 24 hours a day) and highly qualified
contractors. Behind the scenes, the department is responsible for all water
purchases/production, treatment, disinfection, water quality testing, regulatory
compliance, field customer service, and emergency response. The water system is
supported by the Public Works Department for the Capital Improvement Program projects
and the Finance Department for utility billing and customer service. The system includes
approximately 300 miles of water pipelines, 200 million gallons of water storage, 26,000
service connections (water meters), 17 water booster pumps, 42 pressure -reducing
stations, 2,700 fire hydrants, 8,100 water valves, 12 interconnects and four groundwater
wells.
23-4
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 5
There are four main expenditure categories of the water enterprise that are important to
providing water service: Purchasing/Pumping Water, Operations, Replacement and
Customer Service. The cost to purchase and pump water includes the direct cost for the
rights to pump groundwater and to buy imported surface water. The Operations category
includes day-to-day operations and maintenance and is comprised of salaries, contract
maintenance, repair materials, permits, outside agency fees, electricity, and professional
services. Replacement includes the annual capital replacement or rehabilitation of aging
infrastructure and recommended improvements per the Water Master Plan. Over
$40 million in total annual capital improvements are planned over the next five years.
Customer Service includes meter reading, invoicing, customer service, administration,
and internal service charges.
Water rates, as shown in the table below and in the report, are proposed to be adjusted
proportionally and increased each year for the next five years. The average residential
customer, who uses approximately 10 billing units (7,480 gallons per month), is expected
to see a $4.77 per month increase starting in 2024. This was the previously approved rate
originally scheduled in 2019. In the following years, the monthly rate will increase monthly
by $5.50 in 2025, $6.00 in 2026, $6.00 in 2027 and $6.00 in 2028. A billing unit is
100 cubic feet (one HCF) or 748 gallons.
Proposed 5-year (Potable) Water Rates:
Fixed Service Charges ($/Month)
Meter Size
I
I I
5/8", 3/4"
25.22
27.09
31.59
36.59
41.59
46.59
1 "
39.09
41.99
50.07
58.30
66.53
74.75
1-1 /2"
73.69
79.15
96.29
112.59
128.88
145.16
2"
115.23
123.76
151.74
177.74
203.71
229.65
3"
305.61
328.23
405.92
476.32
546.65
616.89
4"
523.69
562.45
697.06
818.33
939.47
1,060.46
6"
1,112.15
1,194.45
1,482.68
1,741.22
1,999.48
2,257.39
8"
1,942.91
2,086.69
2,591.80
3,044.12
3,495.95
3,947.18
Usage Charge ($/HCF)
Water Usage 3.87 4.16 4.26 4.36 4.46 4.56
Fire Service Water Rates. -
The City's water system also has approximately 460 fire service customer connections.
These are typically the large, red, above -ground pipes and valves seen in front of
businesses or in parking lots. This pressurized water is supplied on a standby basis to
provide additional fire -fighting water if needed by the property beyond the fire hydrant.
The fire service water rates recover the proportional cost to provide fire protection
capacity, metering and billing. As seen in the table below, especially for the larger meter
sizes, rates have been increased and adjusted to be compliant with industry
"proportionality" standards, ensuring compliance with Proposition 218. Simply put, the
larger the pipe connection, the larger the burden on the system to meet peak demands.
23-5
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 6
Most fire services do not use water regularly. However, if water is used through the fire
service, the standard commodity potable water rate is used. Fire service water rates are
shown below:
Proposed 5-year Fire Protection Service Water Rates:
-off -ecirive 0-
Date
Fire Service Charge ($/Monthly)
Meter Size
1 " 13.14 14.12 8.96 9.59 10.18 10.75
1-1 /2" 13.72 14.74 10.15 10.86 11.55 12.23
2"
14.72
15.81
12.21
13.06
13.92
14.77
2-1 /2"
16.23
17.44
15.31
16.36
17.48
18.60
3"
18.31
19.67
19.59
20.94
22.43
23.91
4"
24.52
26.34
32.33
34.53
37.10
39.68
6"
46.75
50.21
78.03
83.29
89.75
96.25
8"
85.13
91.43
156.85
167.41
180.56
193.84
10"
142.84
153.42
275.42
293.93
317.16
340.62
Recycled Water System Rates:
The City provides recycled (non -potable) water to irrigate parks, certain landscaping,
center medians, and golf courses encompassing 3% of the City's total water use. The
City purchases recycled water from the Orange County Water District through a project
known as Green Acres Project. The recycled water rates recover the direct costs to
purchase the recycled water as well as the proportional costs with regards to capacity,
metering and billing. Proportionality standards also apply to these recycled meters and in
this case, the fixed rates are adjusted and reduced. Certain users also have exclusive
pump stations to increase the flow and pressure of the water to meet watering needs.
Those users are charged the direct charges associated with the pump stations. In
general, recycled water remains less expensive than potable water. Recycled water rates
are shown below:
Approved New New New New
Fffarfiva 1 /112n9d 1 /1 /9(195 1 /1 /9f19R 1 /1 /gn97 1 /1 /9n9R
Fixed Service Charges ($/Month)
Meter Size
1 "
18.41
19.78
21.85
23.06
24.16
25.25
1-1 /2"
32.35
34.75
39.84
42.10
44.15
46.16
2"
49.09
52.73
61.43
64.95
68.13
71.25
3"
125.81
135.12
160.38
169.69
178.05
186.25
4"
213.68
229.50
273.72
289.66
303.96
317.97
6"
450.80
484.16
579.56
613.40
643.72
673.42
8"
har
�RW Usage
785.55
2.21
843.69
2.29
1,011.34
2.66
1,070.43
2.74
1,123.38
2.82
1,175.23
2.91
Pump Charge
0.67
0.72
0.50
0.52
0.55
0.57
23-6
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 7
Sewer (Wastewater) System:
The Utilities Department oversees the operation of the City's sanitary sewer system.
Hidden below the ground, a properly functioning system provides a crucial service to
Newport Beach residents, businesses and visitors, and protects the environment. This
essential service is also accomplished through a strategic combination of in-house,
licensed, staff operators (on -call 24 hours a day) and highly qualified contractors. Behind
the scenes, the department is responsible for cleaning, pumping and repairs of the
collection system. Sanitary sewer flows are collected from homes and businesses in
Newport Beach and transported through more than 25,000 laterals, 200 miles of gravity
sewer mains, and five miles of pressurized force sewer mains by way of 21 pump (lift)
stations to the Orange County Sanitation District. The sewer system is supported by the
Public Works Department for the Capital Improvement Program projects and the Finance
Department for utility billing and customer service.
There are four main expenditure categories of the sewer (wastewater) enterprise that are
important to providing sewer service: Cleaning Operations, Pump Station Operations,
Repairs/Capital Replacement, and Customer Service. Cleaning Operations include the
cost to regularly clean and video tape sewer lines. The public may be familiar with the
department's large, yellow vacuum trucks. Pump Station Operations includes the
day-to-day operation, inspection and repairs of the City's 21 pump stations that lift and
pump wastewater from low-lying areas. Repairs include the scheduled and unscheduled
dig out spot repairs of the underground pipelines and laterals. Capital Replacement
includes the larger -scale replacement and rehabilitation of pipelines and pump stations
as recommended per the Wastewater Master Plan. More than $5 million in total annual
capital improvements are planned over the next five years. Customer Service includes
meter reading, invoicing, customer service, administration and internal service charges.
Sewer rates as shown in the table below and in the report are proposed to be adjusted
proportionally and increased each year for the next five years. The average residential
customer, who uses approximately 10 billing units (7,480 gallons per month), is expected
to see a $2.20 per month increase starting in 2024. In the following years, the monthly
rate will increase by $2.50 in 2025, $3.00 in 2026, $3.50 in 2027 and $3.50 in 2028. A
billing unit is 100 cubic feet (or 1 HCF) or 748 gallons.
Sewer Rates
Fixed Service Charges ($/Month)
Meter Size
5/8", 3/4", 1" 8.55 10.55
1-1 /2" 9.41 15.83
12.85
15.65
18.95
22.25
19.28
23.47
28.43
33.38
2"
12.83
21.11
25.71
31.30
37.90
44.51
3"
14.54
26.38
32.14
39.12
47.38
55.63
4"
17.11
31.66
38.56
46.95
56.85
66.76
6"
19.25
36.94
44.99
54.77
66.33
77.89
8"
21.39
42.22
51.42
62.60
75.81
89.01
Usage Charge ($/HCF)
Sewer Usage I 0.51 0.53 0.55 0.57 0.59 0.61
23-7
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 8
Approximately 600 Newport Beach properties receive sewer service from the City, but are
supplied water by Mesa Water District or Irvine Ranch Water District. For those properties,
the City does not have immediate access to their water use for billing purposes. The best
practice is to estimate an average based on the meter size, as explained in the official
report. Hence, these users only receive a flat fee. As noted and approved by the City
Council on July 25, 2023, these properties, for the second year in a row, will be billed
through the property tax roll.
Proposed 5-year Sewer Only Customer Rates
��1 •.1 l-f 11 ���1.%.%l I l�i��
Effective
Date
Sewer Only Customers, Fixed Service Charge, (no Use Charge) ($/Monthly)
Meter Size
5/8", 3/4"
13.10
15.86
18.36
21.35
24.85
28.36
111
15.34
18.51
21.11
24.20
27.80
31.41
1-1 /2"
46.14
53.99
58.88
64.52
70.91
77.30
211
47.54
59.27
65.31
72.34
80.39
88.43
311
122.10
137.68
147.63
158.83
171.29
183.74
4"
216.25
238.35
253.06
269.27
286.97
304.67
6"
381.07
413.21
435.48
459.51
485.26
511.00
811
383.21
418.49
441.91
467.33
494.74
522.12
10" 389.20 423.77
448.33
475.15
504.21
533.25
Proposition 218 Procedures
Under State Proposition 218 requirements, the rates cannot be increased if a majority of
the property owners submit valid written protests to the City Clerk by the close of the
45-day notice and protest period. At the conclusion of the public hearing, the City Clerk
shall complete the tabulation of all written protests received, including those received
during the public hearing, and shall report the results to the City Council. The City Clerk
may advise the City Council of the absence of a majority protest without determining the
validity of all protests. Notices were also sent to all water customers who may not be
property -owning customers and the City Council may consider their protests; however,
they will not be counted as part of the requirement. Only one protest is allowed per
property parcel. At this point, if a majority of property owners do not submit a valid written
protest, the City Council could vote to adopt the new rates and structure.
If the rates are approved via the attached resolutions, the proposed water and sewer rates
would become effective on January 1, 2024, and for every year thereafter with the final
scheduled adjustments occurring January 1, 2028.
FISCAL IMPACT:
The adopted budget includes sufficient funding for completion of the studies and the
public noticing. The cost of the studies is approximately $100,000 and the cost of the
public noticing (Proposition 218 mailed notice) was approximately $15,000. As currently
budgeted, the Water Enterprise Fund and Wastewater Enterprise funds are now
operating at a structural deficit, drawing down on net working capital reserves.
23-8
Resolution Nos. 2023-74 and 2023-75: Conduct a Public Hearing and
Consider Water and Sewer Rate Adjustments
November 14, 2023
Page 9
If the proposed rate increases are approved, rates would be adjusted and generally
increase each year for five years, starting in January 2024. The rate increases will fund
the necessary Capital Improvement Program, the increased inflationary cost of
maintenance and operations, the cost to purchase and pump water, and stabilizing the
enterprise funds.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING -
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Resolution No. 2023-74, Establishing Water Rates
Attachment B — Resolution No. 2023-75, Establishing Sewer Rates
23-9
ATTACHMENT A
RESOLUTION NO. 2023- 74
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, ESTABLISHING
WATER RATES AND CHARGES EFFECTIVE JANUARY
1, 2024 AND FOUR YEARS OF PHASED IN INCREASES
THERETO
WHEREAS, on December 1, 2022, the City of Newport Beach ("City") retained
Black & Veatch Management Consulting, LLC ("Black & Veatch") to conduct a Water Rate
Study ("Study") to analyze the current cost of providing water services to property owners
and customers, develop a 10-year financial plan, and recommend an appropriate rate
structure and water charges;
WHEREAS, on May 11, 2023, and July 25, 2023, the City's Utilities Department
("Utilities") and Black & Veatch presented findings and recommendations of the Study to
the City's Finance Committee, and after thorough discussion and review, the Finance
Committee unanimously voted to forward the Study to the City Council of the City of
Newport Beach ("City Council") for final review and approval;
WHEREAS, on August 22, 2023, Utilities and Black & Veatch presented a draft
of the Study's findings and recommendations during a City Council study session;
WHEREAS, on September 26, 2023, Utilities presented the final draft Study for
City Council approval and requested City Council set a public hearing, authorize the
mailing of over 27,000 notices to property owners and water customers informing them
of the proposed increased in water rates and charges, and commence the 45-day notice
period in accordance with Proposition 218; and
WHEREAS, following a public hearing held on November 14, 2023, in conformity
with Proposition 218, the City Council determined that no majority protest against the
proposed water rates and charges existed.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
23-10
Resolution No. 2023-
Page 2 of 3
Section 1: The City Council does hereby adopt the water rates and charges set
forth in Exhibit 'A" which is attached hereto and incorporated herein by reference
effective January 1, 2024, with phased in increases thereto through January 1, 2028, as
identified in Exhibit "A." The City Council directs staff to include the newly established
water rates and charges and phased -in increases thereto, as adopted by this resolution,
in the City's Schedule of Rents, Fines, and Fees, or other successor document thereto
as amended from time to time.
Section 2: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 3: If any section, subsection, sentence, clause or phrase of this
resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution, and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 4: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
23-11
Resolution No. 2023-
Page 3 of 3
Section 5: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 141h day of November, 2023.
NOAH BLOM
Mayor
ATTEST:
Leilani 1. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
ar n C. Harp
City Attorney
Attachment: Exhibit A - Water Rates and Charges
23-12
EXHIBIT A
Sewer Rates and Charges
Table 1: Water Services
Effective
Effective
Effective
Effective
Effective
Meter Size (Inch)
JAN 1,
2024
JAN 1,
2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
5/81h
$27.09
$31.59
$36.59
$41.59
$46.59
3/4'h
$27.09
$31.59
$36.59
$41.59
$46.59
1
$41.99
$50.07
$58.30
$66.53
$74.75
1 '/z
$79.15
$96.29
_ $112.59
$128.88
$145.16
2
$123.76
$151,74
$177.74
$203.71
$229.65
3
$328.23
$405.92
$476.32
$546.65
$616.89
4
$562.45
$697.06
$818.33
$939.47
$1,060.46
6
$1,194.45
$1,482.68
$1,741.22
$1,999.48
$2,257.39
g
$2,086.69
$2,591.80
$3,044.12
$3,495.95
$3,947.18
Effective Dates
JAN 1,
2024
JAN 1,
2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
Usage Charges
per HCF
Potable Water
$4.16
$4.26
$4.36
$4.46
$4.56
23-13
Table 2: Fire Protection Services
Effective
Effective
Effective
Effective
Effective
Meter Size (Inch)
JAN 1,
2024
JAN 1,
2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
1
$14.12
$8.96
$9.59
$10.18
$10.75
1 Y2
$14.74
$10.15
$10.86
$11.55
$12.23
2
$15.81
$12.21
$13.06
$13.92
$14.77
2'/2
$17.44
$15.31
$16.36
$17.48
$18.60
3
$19.67
$19.59
$20.94
$22.43
$23.91
4
$26.34
_ $32.33
$34.53
$37.10
$39.68
_ 6
$50.21
$78.03
$83.29
$167.41
$89.75
$96.25
8
$91.43
$156.85
$180.56
$193.84
10
$153.42
$275.42
$293.93
$317.16
$340.62
Table 3: Recycled Water (RW)
Rates
Effective
Effective '
Effective
Effective
Effective
Meter Size (Inch)
JAN 1,
2024
JAN 1,
1 2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
1
$19.78
$21.85
$23.06
$24.16
$25.25
1 '/2
$34.75
$39.84
$42.10
$44.15
$46.16
2
$52.73
$61.43
$64.95
$68.13
$71.25
3
$135.12
$160.38
_ $169.69
$178.05
$186.25
- 4
$229.50
$273.72
$289.66
$303.96
$317.97
6
$484.16
$579.56
$613.40
$643.72
$673.42
8
$843.69
$1,011.34
$1,070.43
$1,123.38
$1,175.23
RW Usage Charge
Pump Station Charge
$2.29
$0.72
$2.66
$0.50
$2.74
$0.52
$2.82
$0.55
$2.91
$0.57
23-14
ATTACHMENT B
RESOLUTION NO. 2023- 75
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH, CALIFORNIA, ESTABLISHING
SEWER RATES AND CHARGES EFFECTIVE JANUARY
1, 2024, AND FOUR YEARS OF PHASED IN INCREASES
THERETO
WHEREAS, on December 1, 2022, the City of Newport Beach ("City") retained
Black & Veatch Management Consulting, LLC ("Black & Veatch") to conduct a Sewer
Rate Study ("Study") to analyze the current cost of providing sewer services to property
owners and sewer customers, develop a 10-year financial plan, and recommend an
appropriate rate structure and sewer charges;
WHEREAS, on May 11, 2023, and July 25, 2023, the City's Utilities Department
("Utilities") and Black & Veatch presented the findings and recommendations of the Study
to the City's Finance Committee, and after thorough discussion and review, the Finance
Committee unanimously voted to forward the Study to the City Council of the City of
Newport Beach ("City Council") for final review and approval;
WHEREAS, on August 22, 2023, Utilities and Black & Veatch presented a draft
of the Study's findings and recommendations during a City Council study session;
WHEREAS, on September 26, 2023, Utilities presented the final draft Study for
City Council approval and requested City Council set a public hearing, authorize the
mailing of over 27,000 notices to property owners and sewer customers informing them
of the proposed increase in sewer rates and charges, and commence the 45-day notice
period in accordance with Proposition 218; and
WHEREAS, following a properly noticed public hearing held on November 14,
2023, in conformity with Proposition 218, the City Council determined that no majority
protest against the proposed sewer rates and charges existed;
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
23-15
Resolution No. 2023-
Page 2 of 3
Section 1: The City Council does hereby adopt the sewer rates and charges set
forth in Exhibit 'A" which is attached hereto and incorporated herein by reference
effective January 1, 2024 with phased in increases thereto through January 1, 2028 as
identified in Exhibit "A." The City Council directs staff to include the newly established
sewer rates and charges and phased in increases thereto, as adopted by this resolution,
in the City's Schedule of Rents, Fines, and Fees, or other successor document thereto
as amended from time to time.
Section 2: The recitals provided in this resolution are true and correct and are
incorporated into the operative part of this resolution.
Section 3: If any section, subsection, sentence, clause or phrase of this
resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution, and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 4: The City Council finds the adoption of this resolution is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3,
because it has no potential for resulting in physical change to the environment, directly or
indirectly.
23-16
Resolution No. 2023-
Page 3 of 3
Section 5: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting the resolution.
ADOPTED this 141h day of November, 2023.
NOAH BLOM
Mayor
ATTEST:
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY TORNEY'S OFFICE
Aaron C. Harp
City Attorney
Attachment: Exhibit A - Sewer Rates and Charges
23-17
EXHIBIT A
Sewer Rates and Charges
Table 1: Sewer Services
Effective
Effective
Effective
Effective
Effective
Meter Size (Inch)
JAN 1,
2024
JAN 1,
2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
5/8th , 3/4th & 1
$10.55
$12.85
$15.65
$18.95
$22.25
1 1/2
$15.83
$19.28
$23.47
$28.43
$33.38
2
$21.11
$25.71
$31.30
$37.90
$44.51
3
$26.38
$32.14
$39.12
$47.38
$55.63
4
$31.66
$38.56
$46.95
$56.85
$66.76
6
$36.94
$44.99
$54.77
$66.33
$77.89
8
$42.22
$51.42
$62.60
$75.81
$89.01
Effective Dates
JAN 1,
2024
JAN 1,
2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
Cost per Sewer
Use HCF
$0.53
$0.55
$0.57
$0.59
$0.61
Table 2: Sewer Onl Customers
Effective
Effective
Effective
Effective
Effective
Meter Size (Inch)
JAN 1,
2024
JAN 1,
2025
JAN 1,
2026
JAN 1,
2027
JAN 1,
2028
5/8th , 3/4th
$15.86
$18.36
$21.35
$24.85
$28.36
1
$18.51
$21.11
$24.20
$27.80
$31.41
1 %
$53.99
$58.88
$64.52
$70.91
$77.30
2
$59.27
$65.31
$72.34
$80.39
$88.43
3
$137.68
$147.63
$158.83
$171.29
$183.74
4
$238.35
$253.06
$269.27_
$286.97
$304.67
6
$413.21
$435.48
$459.51
$485.26
$511.00
8
$418.49
$441.91
$467.33
$494.74
$522.12
10
$423.77
$448.33
$475.15
$504.21
$533.25
23-18