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Home My WebLink About03 - Adoption of Sewer Rate Adjustment (2nd Reading)3-1 NEWPORT BEACH City Council Staff Report COUNCIL STAFF REPORT CITY OF February 9, 2016 Agenda Item No. 3 ABSTRACT: The Municipal Operations Department retained the consulting services of H F & H Consultants, LLC (“HF&H”) to prepare a sewer rate study. The study analyzed the cost of service and made recommendations regarding the rate and structure in compliance with State law. The study concluded that a rate increase is recommended to ensure adequate funds are available to continue to maintain a safe and healthy sewer infrastructure. RECOMMENDATION: Conduct second reading and adopt Ordinance No. 2016-1, An Ordinance of the City Council of the City of Newport Beach, California, Amending Section 14.24.065 of Title 14 of the Newport Beach Municipal Code Pertaining to Sewer Use Charge. FUNDING REQUIREMENTS: There are no funding requirements to implement the sewer rate structure; however, this action will change the sewer water rate and structure currently being charged to users of sewer water. DISCUSSION: On October 13, 2015, the City Council reviewed the proposed sewer rates and directed staff to send out notices in compliance with State law. The City mailed 27,193 notices to property owners and non-property owning customers on December 9, 2015. TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:George Murdoch, Municipal Operations Director – Utilities 949-644-3011, gmurdoch@newportbeachca.gov PREPARED BY:Rachell Wilfert, Management Specialist PHONE:949-644-3011 TITLE:Adoption of Sewer Rate Adjustment (2 nd Reading) Adoption of Sewer Rate Adjustment (2nd Reading) January 26, 2016 Page 2 3-2 In accordance with Proposition 218, agencies are required to provide a 45 day notice period whereby property owners may submit in writing a protest objecting to the proposed 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, City Council may adjust the rate and/or structure. At the regular scheduled City Council meeting on January 26, 2016, the City concluded the 45-day notice period and conducted a public hearing. The City Clerk tabulated the results of the protests and announced that twenty six (26) protests were received from property owning customers, and one (1) protest from non-property owning customers. In the absence of the majority protests, the City Council discussed the item and approved the introduction of Ordinance No 2016-1 An Ordinance of the City Council of the City of Newport Beach Amending Section 14.24.065 of Title 14 of the Newport Beach Municipal Code Pertaining to Sewer Use Charge, and passed the second reading to February 9, 2016. Should Council approve the second reading of the Ordinance, the effective date of the first sewer rate change will be 30 days after approval (approximately March 10). All subsequent rate adjustments will take effect the first day of each calendar year with the last adjustment on January 1, 2020. The City encourages all interested parties to visit the City’s web site for more information about the proposed rates and sewer rate study at www.newportbeachca.gov/sewerrates or contact the Municipal Operations Department at (949) 644-3011. 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). Adoption of Sewer Rate Adjustment (2nd Reading) January 26, 2016 Page 3 3-3 ATTACHMENTS: Attachment A – Ordinance 2016-1 Amendment to Sewer Use Charge Redline Attachment B – Ordinance 2016-1 Amendment to Sewer Use Charge Final Attachment C – January 26 City Council Staff Report ORDINANCE NO. 2016-__ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AMENDING SECTION 14.24.065 OF TITLE 14 OF THE NEWPORT BEACH MUNICIPAL CODE PERTAINTING TO SEWER USE CHARGE WHEREAS, The City of Newport Beach charges users of the City’s sewer service to cover the annual operation and maintenance of the sewer system, as wells as the repair and replacement of pipes, pump station, facilities and equipment to improve the sewer system safety, efficiency and reliability; and WHEREAS, on February 26, 2013, the City’s Municipal Operations Department retained the consulting services of HF&H Consultants, LLC (HF&H) to prepare a sewer rate study in order to analyze the current cost to the City to provide sewer services 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 for sewer customers, a fixed fee component for non- water customers, and a commodity charge; 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 the sewer services a rate that reflects the City’s current cost of maintaining the sewer system. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: Section 14.24.065 is hereby amended to the Newport Beach Municipal Code to read as follows: A. A monthly basic fixed sewer use service charge of four dollars and fifty cents ($4.50) per month, shall be assessed against each individually metered dwelling unit or business structure connected to the public sewer system and for each sewer connection to the public sewer system for customers who purchase water from the City of Newport Beach except as provided in subsection (C) of this section. The sewer service charge is based on the water customer’s water meter size. Fixed sewer 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. A monthly basic fixed sewer use service charge for customers who do not purchase water from the City of Newport Beachof six dollars and twenty-five cents ($6.25) per month, shall be assessed for each use service connection to the public sewer system for customers who do not purchase water from the City of Newport Beach. Fixed sewer service charges shall be effective January 1st of each year and charged according to the Fee Schedule adopted by resolution of the City Council. ATTACHMENT A 3-4 C. A monthly supplemental sewer use charge of two dollars ($2.00) per month, shall be assessed for each additional living unit served by the same sewer connection. For the purposes of this subsection, the term “living unit” shall mean each additional dwelling unit and structures designed for permanent residential use and each room with sanitary and sleeping facilities in any hospital, care facility, hotel or motel. DC. In addition to the sewer service charges specified above, a sewer consumption use charge of thirty cents ($0.30) shall be assessed for each hundred (100) cubic feet of water delivered to each water customer connected to the public sewer system. Effective September 1, 2006, the sewer consumption charge shall become thirty-five cents ($0.35). The sewer use charges shall be effective January 1st of each year and charged according to the Fee Schedule adopted by resolution of the City Council. E. A monthly wastewater surcharge of ten dollars ($10.00) per month shall be assessed to each water customer on all nonirrigation water meters which have a diameter that equals or exceeds two inches. Water meter connections for the exclusive purpose of providing water for fire sprinkler of fire protection systems shall be exempted from this surcharge. 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 invalid or 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. 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 3-5 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 26th day of January, 2015, and adopted on the 9th day of February, 2015, by the following vote, to-wit: AYES, COUNCILMEMBERS ______________________________ _____________________________________________________ NOES, COUNCILMEMBERS______________________________ _____________________________________________________ ABSENT COUNCILMEMBERS ____________________________ _____________________________________________________ MAYOR_______________________________________________ DIANE B. DIXON ATTEST: _____________________________________ LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY’S OFFICE _____________________________________ AARON C. HARP, CITY ATTORNEY 3-6 ORDINANCE NO. 2016-_ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AMENDING SECTION 14.24.065 OF TITLE 14 OF THE NEWPORT BEACH MUNICIPAL CODE PERTAINTING TO SEWER USE CHARGE WHEREAS, The City of Newport Beach charges users of the City's sewer service to cover the annual operation and maintenance of the sewer system, as wells as the repair and replacement of pipes, pump station, facilities and equipment to improve the sewer system safety, efficiency and reliability: and WHEREAS, on February 26, 2013, the City's Municipal Operations Department retained the consulting services of HF&H Consultants, LLC (HF&H) to prepare a sewer rate study in order to analyze the current cost to the City to provide sewer services 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 for sewer customers, a fixed fee component for non- water customers, and a commodity charge; 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 the sewer services a rate that reflects the City's current cost of maintaining the sewer system. NOW THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: Section 14.24.065 is hereby amended to the Newport Beach Municipal Code to read as follows: A. A monthly fixed sewer service charge, shall be assessed against each individually metered dwelling unit or business structure connected to the public sewer system and for each sewer connection to the public sewer system for customers who purchase water from the City of Newport Beach. The sewer service charge is based on the water customer's water meter size. Fixed sewer service charges shall be effective January 1®' of each year and charged according to the Fee Schedule adopted by resolution of the City Council. B. A monthly fixed sewer service charge for customers who do not purchase water from the City of Newport Beach shall be assessed for each service connection to the public sewer system. Fixed sewer service charges shall be effective January 1®* of each year and charged according to the Fee Schedule adopted by resolution of the City Council. ATTACHMENT B 3-7 C. In addition to the sewer service charge specified above, a sewer use charge shall be assessed for each hundred (100) cubic feet of water delivered to each water customer connected to the public sewer system. The sewer use charges shall be effective January 1®' 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 invalid or 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. 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 26th day of January, 2015, and adopted on the 9"^ day of February, 2015, by the following vote, to-wit: AYES, CQUNCILMEMBERS NOES, CQUNCILMEMBERS. ABSENT CQUNCILMEMBERS Page | 2 3-8 MAYOR DIANE B. DIXON ATTEST: LEILANI I. BROWN, CITY CLERK APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE AARON C. HARP, CITY ATTORNEY Page | 3 3-9