HomeMy WebLinkAbout05 - Adoption of Updated Recycled Water RatesCITY OF
NEWPORT BEACH
City Council Staff Report
September 09, 2014
Agenda Item No. 5.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: George Murdoch, Acting Municipal Operations Department Director - (949) 644-
3011, gmurdoch @newportbeachca.gov
PREPARED BY: George Murdoch
PHONE: (949) 644 -3011
TITLE: Adoption of Updated Recycled Water Rates (Ordinance and Resolution)
ABSTRACT:
The City of Newport Beach provides non - potable (recycled) water to irrigate parks, school landscaping,
center medians and golf courses. At the conclusion of a rate study and City Council direction, the proposed
new recycled water rate reduces the overall costs to our recycled water customers by approximately 50 %.
City Council on August 12, 2014, conducted a public hearing regarding recycled water rates. The public
hearing concluded a 45 -day public comment period in compliance with State law. In the absence of a
majority protest from recycled water customers, City Council introduced Ordinance Chapter 14.13.010
"Recycled Rates Established" (Attachment A) and passed the second reading of the ordinance to
September 9, 2014. Attachment B shows the current and proposed rates for recycled water.
Staff is also recommending the adoption of a resolution amending the Master Fee Schedule to include the
fees associated with recycled water use (Attachment C). The adjusted fees will take effect 30 days after the
second reading of the ordinance.
RECOMMENDATION:
a) Conduct second reading and adopt Ordinance No. 2014 -13, An Ordinance of the City Council of the
City of Newport Beach Amending the Newport Beach Municipal Code to Add Chapter 14.13 Regarding
Recycled Water Rates (Staff Report Attachment A); and
b) Adopt Resolution No. 2014 -78, A Resolution of the City Council of the City of Newport Beach Adding
Recycled Water Rates to the City's Master Schedule of Fees, to remove the existing recycled water
commodity rate and add the approved adjusted rates (Staff Report Attachment C).
FUNDING REQUIREMENTS:
There are no funding requirements to implement the recycled rate structure; however this action will change
the recycled water rate and structure currently being charged to users of recycled water and will generally
result in a significant rate reduction.
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DISCUSSION:
On June 10, 2014, the Municipal Operations Department presented to Council a technical memorandum
that discussed the proposed recycled water rate structure. The City Council reviewed the results and
directed staff to send out a notice to all customers in compliance with State law. Attachment B shows the
current and proposed rates for recycled water.
On June 23, 2014, the City Clerk mailed notices to all property owners for which the city provides recycled
water. A 45 -day notice period concluded at the end of the public hearing on August 12, 2014. The City
Clerk informed the City Council that there were no protests received. Pursuant to State law, if there is an
absence of a majority written protests then the rates may be adjusted.
In the absence of the majority protests, City Council introduced ordinance Chapter 14.13.010 "Recycled
Water Rates Established" of the Newport Beach Municipal Code, and passed the second reading to
September 9, 2014 (Attachment A).
Resolution No. 2014 -77 (Attachment C) removes the existing recycled water commodity rate in the Master
Fee Schedule and adds the approved adjusted rates.
ENVIRONMENTAL REVIEW:
This action is not subject to the California Environmental Quality Act ( "CEQX) 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), as well as via the protest provisions noted in the staff report.
ATTACHMENTS:
Description
Attachment A - Ordinance - Recycled Water Rates Established
Attachment B - Proposed Five Year Rates
Attachment C - Resolution - Master Fee Schedule
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ATTACHMENT A
ORDINANCE NO. 2014-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AMENDING THE NEWPORT
BEACH MUNICIPAL CODE TO ADD CHAPTER 14.13
REGARDING RECYCLED WATER RATES
WHEREAS, The City of Newport Beach provides non - potable (recycled) water
for the purposes of irrigating parks, schools, center medians and golf courses.
Recycled water is purchased from the Orange County Water District through the Green
Acres Project; and
WHEREAS, The City charges users of recycled water a rate set at 80% of the
potable water rate; and
WHEREAS, The City's Municipal Operations Department retained the consulting
services of HF &H Consultants, LLC ( "HF &H ") to prepare a recycled water rate study in
order to analyze the current cost to the City to provide recycled water and to provide
recommendations regarding an appropriate rate structure; and
WHEREAS, The HF &H study recommended a revised rate structure that
includes a fixed fee component, a commodity charge and a pump station charge if the
recycled water is provided by a pump station that is maintained by the City; and
WHEREAS, The City Council has reviewed the conclusions of the HF &H study
and agrees that the recommended rate structure should be implemented, which will
allow the City to charge the users of recycled water a rate that reflects the City's current
cost of providing recycled water.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
Section 1: Section 14.13.010 is hereby added to the Newport Beach Municipal
Code to read as follows:
14.13.010 Recycled Water Rates Established. Recycled water, also known as
'.reclaimed" water, is used as a conservation measure to reduce potable drinking
water demand. Recycled water is non - potable, treated wastewater used for
landscape irrigation including but not limited to: park landscape areas, school
landscape areas, roadway medians and parkways, and golf course landscaping.
The city purchases recycled water pursuant to an agreement with the Orange
County Water District (OCWD).
Upon the effective date of this chapter, a recycled water fixed rate,
commodity charge, and pump station rate shall be established, and users
of recycled water shall be charged these rates in accordance with the
provisions of this chapter.
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A. There shall be charged and collected a monthly fixed recycled water
service charge from each customer for each meter. The fixed water service
charge recaptures the City's costs to operate and maintain the recycled water
system, including required capital infrastructure improvements, but excluding
pump station maintenance, repairs and improvements.
Fixed water service charges shall be effective January 1st of each year and
charged according to the Fee Schedule adopted by resolution of the City Council.
B. There shall be charged and collected a monthly commodity charge from
each customer for each meter. The commodity charge is a per unit charge that
recaptures the City's cost to purchase recycled water from OCWD. If the City's
cost of recycled water increases by more than the projected rate to purchase
water from OCWD, the commodity charge will be adjusted annually to reflect the
City's cost to purchase recycled water from OCWD. The commodity charge shall
be effective January Vt of each year and charged according to the Fee Schedule
adopted by resolution of the City Council.
C. There shall be charged and collected a monthly pump station charge from
each customer receives water by means of a pump station. The pump station
charge recaptures the City's cost to operate, repair, maintain, and replace the
pump stations that may be necessary to provide recycled water.
Pump station charges shall be effective January 1st of each year and charged
according to the Fee Schedule adopted by resolution of the City Council.
Section 2: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 3: If any section, subsection, sentence, clause or phrase of this
ordinance 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 ordinance. The
City Council hereby declares that it would have passed this ordinance and each section,
subsection, clause or phrase hereof, irrespective of the fact that any one or more
sections, subsections, sentences, clauses and phrases be declared unconstitutional.
Section 4: The City Council finds the approval of this ordinance is not subject
to the California Environmental Quality Act ( "CEQA ") pursuant to Section 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 to have a significant effect on the environment.
Section 5: Except as expressly modified in this ordinance, all other Sections,
Subsections, terms, clauses and phrases set forth in the Newport Beach Municipal
Code shall remain unchanged and shall be in full force and effect.
6S:
Section 6: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published once in the official newspaper of the City, and it shall be effective thirty (30)
days after its adoption.
This Ordinance was introduced at a regular meeting of the City Council of the
City of Newport Beach held on the 12th day of August, 2014, and adopted on the gth
day of September, 2014, by the following vote, to -wit:
AYES. COUNCILMEMBERS
NOES, COUNCILMEMBERS
ABSENT COUNCILMEMBERS
MA
ATTEST:
RUSH N. HILL, II
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
AA_ RON C. HARP, CITY ATTORNEY 15 I�
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Attachment B:
Proposed Five -Year Recycled Water Rate Establishment
Monthly Service Charge
Current
Year 1
Year 2
Year 3
Year 4
Year 5
5/8" or 3/4"
$13.82
$18.91
$19.29
$19.68
$20.07
$20.47
1"
$23.03
$31.53
$32.16
$32.80
$33.46
$34.13
1 1/2'
$46.06
$63.05
$64.32
$65.60
$66.91
$68.25
2"
$73.70
$100.88
$102.90
$104.95
$107.05
$109.19
3"
$138.18
$189.15
$192.94
$196.80
$200.73
$204.75
4"
$230.30
$315.25
$321.56
$327.99
$334.55
$341.24
6"
$460.61
$630.50
$643.11
$655.98
$669.10
$682.48
8"
$736.98
$1,008.81
$1,028.99
$1,049.57
$1,070.56
$1,091.97
Commodity Charge
Per HCF
1 $2.46
$0.855
$0.872
$0.890
$0.907
$0.926
Pump Station Charge
Per HCF
none
$0.361
$0.368
$0.375
$0.383
$0.391
M
ATTACHMENT C
RESOLUTION NO. 2014-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH, CALIFORNIA ADDING RECYCLED WATER RATES TO THE
CITY'S MASTER SCHEDULE OF FEES
WHEREAS, the City of Newport Beach ( "City ") retained the consulting services of
HF &H Consultants, LLC ( "HF &H ") to analyze the cost of services for recycled water use
and recommend an appropriate recycled water rate structure to the City; and
WHEREAS, pursuant to its agreement, HF &H recommended a revised recycled
water rate structure which includes a fixed fee component, a commodity charge and a
pump station charge (if the recycled water is provided by a pump station that is
maintained by the City); and
WHEREAS, the City mailed notices to all customers for which the City provides
recycled water regarding the recycled water rate structure, and the City conducted a
public hearing to accept comments on the proposed recycled water rates; and
WHEREAS, there were no comments or protests on the recommended recycled
water rate structure; and
WHEREAS, the fees are no more than the cost to the City to provide such
services; and
WHEREAS, NBMC Section 3.36.030 provides that cost recovery percentage for
most user services shall be one hundred percent (100 %), and provides that the City
Council may modify the fee resolution upon a determination that there has been an
increase or decrease in one or more cost factors relevant to the calculation of the actual
cost of providing the service; and
WHEREAS on August 12, 2014, City Council approved the HF &H recycled water
rate structure recommendation and hereby adopts Newport Beach Municipal Code
( "NBMC ") Section 14.13.010, Recycled Water Rates Established, to charge and collect
a monthly fixed recycled water service charge, a monthly commodity charge for each
meter and a monthly pump station charge from each customer who receives water by
means of a pump station; and
WHEREAS, City Council desires to incorporate the recycled water rate schedule
into the City's master fee schedule.
WHEREAS, the current Commodity Charge — Recycled Water fee shall be
deleted.
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NOW, THERFORE, BE IT RESOLVED by the City Council of the City of Newport
Beach, as follows:
1. The schedule of fees for service, attached to this Resolution as Exhibit "A"
are hereby adopted and shall become effective in thirty (30) days.
2. The fees for Recycled Water Rates shall be updated January of each year
pursuant to the annual schedule attached to this Resolution as Exhibit "B ".
Adopted this th of September 2014.
Mayor
ATTEST:
City Clerk
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