HomeMy WebLinkAboutProtest of Water Rates from Robert GoldbergProtest Against Adoption of Proposed Water and Wastewater Rates
I protest the adoption of the proposed water and wastewater rates. City staff acknowledged at the
City Council meeting on 9/14/20 that there is an established practice for the General Fund ("GF")
to not pay amounts due to the Water and Sewer Funds for service provided to City facilities and
parks. Despite my pleadings at this meeting and the one that followed on 12/14/20, no directive
was given to staff by Council to change this practice, nor did staff publically indicate that this
practice would end. The de facto effect of this practice is that the City, as a user classification, has
been subsidized by all other user classifications, and will continue to be subsidized going forward. I
believe this de facto subsidy violates either the intent or requirements of Proposition 218 that
each user only be charged the cost of providing service to that user. Without a change in the City's
practice, each user will continue to be effectively charged more than the cost of service, i.e., the
cost of their service plus the cost of service incurred by the City's General Fund.
The historical de facto subsidy of the GF is significant in size ($1.83 million) and accounts for, at a
minimum in my estimation, 40% of the proposed combined (water and wastewater) cumulative
revenue increase ($4.55 million) through FYR 2025. The following paragraphs provide more details
on the development of these two dollar amounts.
The magnitude of the proposed combined (water and wastewater) cumulative revenue increase
through FYR 2025 can be derived by subtracting the proposed decreased wastewater revenue
from the proposed increased water revenue. The data in the chart below is from the Raftelis rate
model (PRA 21-7) and shows the net cumulative increased cost to utility users to be a projected
$4.55 million.
Proposed Cumulative Revenue Changes Through FYE 2025''
Water Fund
Sewer Fund
Combined
$7,539,377
-$2,990,381
$4,548,996
In estimating the cumulative amount owned by the GF to the Water and Sewer Funds, it is
unknown when the City began its practice of non-payment. However, the available evidence
indicates that it was as early as July 2014. This date is based on the City's response to PRA 15-520,
which I received in late 2015, indicating that the GF had made no payments or transfers to the
Water and/or Sewer Funds for water or sewer service in FY 2014-15. Evidence for subsequent
non-payment during the period of July 2015 through December 2019 can be found in the City's
annual AWWA Free Water Audits (PRA 20-262). These show the volume of "unbilled metered"
water consumption. The vast majority of this is presumably due to the non-payment of the GF's
bills. Evidence of non-payment subsequent to December 2019 is the public acknowledgment at
the 9/14/20 City Council meeting that General Fund "balances" were "zeroed out" as a matter of
practice through all of the recent years that were audited by the City's Finance Director.
Using July 2014 as the start date, I estimate the cumulative subsidy to the City's GF from the April -
2021 to be at least $1.83 million as calculated in Appendix 1 and shown in the chart below.
Cumulative Subsidv to the Citv's GF From Julv 2014 Through April 2021
This figure of $1.83 million is likely to be underestimated since it is was calculated using the
current estimate of City water consumption from the Raftelis Rate Study of 53,922 HCF pet year.
The annual Water Audits cited above suggest actual City historical water consumption ranged
from 54,383 to 78,546 HCF per year through the end of 2019.
Going forward in time, the Raftelis Rate Study and model can be used to project the GF money to
be due under the proposed rate structure. These are calculated by year in Appendix 2 and
summarized in the table below:
Cumulative Due from the Citv's GF From Mav 2021 Throujzh June 2025
Water Fund
Sewer Fund
Combined
$1,208,403
$620,102
$1,828,505
This figure of $1.83 million is likely to be underestimated since it is was calculated using the
current estimate of City water consumption from the Raftelis Rate Study of 53,922 HCF pet year.
The annual Water Audits cited above suggest actual City historical water consumption ranged
from 54,383 to 78,546 HCF per year through the end of 2019.
Going forward in time, the Raftelis Rate Study and model can be used to project the GF money to
be due under the proposed rate structure. These are calculated by year in Appendix 2 and
summarized in the table below:
Cumulative Due from the Citv's GF From Mav 2021 Throujzh June 2025
The projected cumulative amount due from the GF of $1.30 million represents 29% of the
proposed $4.55 million in combined increased revenue to the Water and Sewer Funds. Thus, if the
City's practice of GF non-payment continues unabated, the combined utility Funds will have $1.3
million less than expected when the next round of rate increases are considered in 2025. Once
again, the rate payers in all of the other user classifications will be asked to make up this shortfall.
I find this prospect unacceptable, and again, is why I must protest the adoption of the new rate
structure. However, I would withdraw this protest if I hear a clear public commitment by staff or a
directive from Council on February 22nd for the GF to begin paying prospectively what it owes
under the new rates as of a date certain, either May 1st with the implementation of the new rates
or July 1st with the FY 21-22 budget.
Thank you for your consideration and service,
2� 6 i5l( 7
Robert Goldberg
345 Clipper Way
City Utility Account Number 012960-000
Parcel No. 043-293-30
Attachments:
Appendix 1: Estimated Unpaid Annual Water & Sewer Bills by the General Fund from July 2014
through April 2021
Appendix 2: Projected General Fund Annual Water & Sewer Costs under New Rate Structure
Water Fund
Sewer Fund
Combined
$1,130,433
$174,109
$1,304,542
The projected cumulative amount due from the GF of $1.30 million represents 29% of the
proposed $4.55 million in combined increased revenue to the Water and Sewer Funds. Thus, if the
City's practice of GF non-payment continues unabated, the combined utility Funds will have $1.3
million less than expected when the next round of rate increases are considered in 2025. Once
again, the rate payers in all of the other user classifications will be asked to make up this shortfall.
I find this prospect unacceptable, and again, is why I must protest the adoption of the new rate
structure. However, I would withdraw this protest if I hear a clear public commitment by staff or a
directive from Council on February 22nd for the GF to begin paying prospectively what it owes
under the new rates as of a date certain, either May 1st with the implementation of the new rates
or July 1st with the FY 21-22 budget.
Thank you for your consideration and service,
2� 6 i5l( 7
Robert Goldberg
345 Clipper Way
City Utility Account Number 012960-000
Parcel No. 043-293-30
Attachments:
Appendix 1: Estimated Unpaid Annual Water & Sewer Bills by the General Fund from July 2014
through April 2021
Appendix 2: Projected General Fund Annual Water & Sewer Costs under New Rate Structure
Appendix 1: Estimated Unpaid Annual Water & Sewer Bills by the General Fund from July 2014
through April 2021
Sewer Service
Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
January -April 2021
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
City Water Consumption (HCF)***
17,974
$2.42
$43,497
6,925
$3,687
Meters: 5/8"
4
$37.86
$303
2
$33
$47.26
$189
Meters: 1"
13
$47.89
$1,245
4
$84
$102.38
$819
Meters: 1112"
11
$72.97
$1,605
4
$128
$133.88
$1,071
Meters: 2"
57
$103.06
$11,749
22
$998
$535.54
$23,564
Meters: 4"
1
$273.60
$547
Service:
$4,931
Capital:
$25,643
Water Total:
$58,946
Sewer Total: $30,574
Sewer Service Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
Calendar Year 2020
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
City Water Consumption (HCF)***
53,922
$2.42
$130,491
20,776
$11,061
Meters: 5/8"
4
$37.86
$909
2
$100
$47.26
$567
Meters: 1"
13
$47.89
$3,735
4
$253
$102.38
$2,457
Meters: 1112"
11
$72.97
$4,816
4
$385
$133.88
$3,213
Meters: 2"
57
$103.06
$35,247
22
$2,993
$535.54
$70,691
Meters: 4"
1
$273.60
$1,642
Service:
$14,792
Capital:
$76,929
Water Total:
$176,839,
Sewer Total: $91,721
Sewer Service Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
Calerxiar Year 2019
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
City Water Consumption (HCF)***
53,922
$2.42
$130,491
20,776
$11,061
Meters: 5/8"
4
$37.86
$909
2
$100
$47.26
$567
Meters: 1"
13
$47.89
$3,735
4
$253
$102.38
$2,457
Meters: 11/2"
11
$72.97
$4,816
4
$385
$133.88
$3,213
Meters: 2"
57
$103.06
$35,247
22
$2,993
$535.54
$70,691
Meters: 4" -
1
$273.60
$1,642
Service:
$14,792
Capital:
$76,929
Water Total:
$176,839
Sewer Total: $91,721
Sewer Service Sewer Capital
Calendar Year 2018
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
City Water Consumption (HCF)***
53,922
$2.42
$130,491
20,776
$11,061
Meters: 5/8"
4
$37.86
$909
2
$100
$47.26
$567
Meters: 1"
13
$47.89
$3,735
4
$253
$102.38
$2,457
Meters: 11/2"
11
$72.97
$4,816
4
$385
$133.88
$3,213
Meters: 2"
57
$103.06
$35,247
22
$2,993
$535.54
$70,691
Service:
$14,792
Capital:
$76,929
Meters: 4"
1 $273.60 $1,642
Water Total:
$176,839
Sewer Total: $91,721
Calendar Year 2017
City Water Consumption (HCF)***
Meters: 5/8"
Meters: 1"
Meters: 11/2"
Meters: 2"
Meters: 4"
Calendar Year 2016
City Water Consumption (HCF)***
Meters: 5/8"
Meters: 1"
Meters: 11/2"
Meters: 2"
Meters: 4"
Calendar Year 2015
City Water Consumption (HCF)***
Meters: 5/8"
Meters: 1"
Meters: 11/2"
Meters: 2"
Meters: 4"
July - December 2014
City Water Consumption (HCF)***
Meters: 5/8"
Meters: 1"
Meters: 1 1/2"
Meters: 2"
Meters: 4"
Sewer Service
Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
53,922
$2.42
$130,491
20,776
$11,061
4
$37.86
$909
2
$100
$47.26
$567
13
$47.89
$3,735
4
$253
$102.38
$2,457
11
$72.97
$4,816
4
$385
$133.88
$3,213
57
$103.06
$35,247
22
$2,993
$535.54'
$70,691
Service:
$14,792 Capital:
Sewer Total: $91,721
$76,929
1 $273.60 $1,642
Water Total: $176,839
Sewer Service
Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
53,922
$2.42
$130,491
20,776
$11,061
4
$37.86
$909
2
$100
$46.57
$559
13
$47.89
$3,735
4
$253
$100.89
$2,421
11
$72.97
$4,816
4
$385
$131.93
$3,166
57
$103.06
$35,247
22
$2,993
$527.74
$69,662
1
$273.60
$1,642
Service:
$14,792
Capital:
$75,808
Water Total:
$176,839
Sewer Total: $90,600
Sewer Service
Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
53,922
$2.42
$130,491
20,776
$11,061
4
$37.86
$909
2
$100
$45.21
$543
13
$47.89
$3,735
4
$253
$97.95
$2,351
11
$72.97
$4,816
4
$385
$128.09
$3,074
57
$103.06
$35,247
22
$2,993
$512.37
$67,633
1
$273.60
$1,642
Service:
$14,792
Capital:
$73,600
Water Total:
$176,839
Sewer Total: $88,392
Sewer Service
Sewer Capital
Charge per HCF
Non -Irrigation
(22% of Non-
Charges per
Sewer Capital
All Water
or Meter (2
Charges per
Water
Irrigation Water
Meter (2
Charges per
Accounts*
months)
Year
Accounts**
Charges)
months)
Year
26,961
$2.42
$65,246
10,388
$5,531
4
$37.86
$454
2
$50
$44.54
$267
13
$47.89
$1,868
4
$126
$96.50
$1,158
11
$72.97
$2,408
4
$193
$126.20
$1,514
57
$103.06
$17,623
22
$1,496
$504.80
$33,317
Service:
$7,396 Capital:
Sewer Total: $43,652
$36,256
1 $273.60 $821
Water Total: $88,420
JU...... a, Y , W... —0-1 1 1 I Vlal
Estimated Amount Owed by the General Fund
$1,208,403 $620,102 $1,828,505
from 7/14 -4/21
Total Net Combined W&S Proposed Increased
$4,548,996
Revenue Through FYE2025 (see below):
Percent of Total Net Combined W&S Proposed
Increased Revenue Attributable to Non- — 40%
Payment by the General Fund
Water Revenue ProjectionA
Sewer Revenue ProjectionAA
Revenue with
Proposed
Rate
Increase in
Under Existing Rates
FYE
Revenue
Increases •
Revenue
$4,782,228
2021
$
4,893,813
$111,585
$4,782,228
2022
$
5,778,844
$996,616
$4,782,228
2023
$
6,380,716
$1,598,488
$4,782,228
2024
$
6,921,703
$2,139,475
$4,782,228
2025
$
7,475,439
$2,693,212
$23,911,138
Totals
$
31,450,515
$7,539,377
Sewer Revenue ProjectionAA
Notes:
*The City currently has one 8" non -irrigation meter per Model ,tab W>Rev, line 452. However, the Model assigns no fixed charge to this meter in the
projected revenues if rates are not increased. Therefore, this meter will not be counted in this retrospective analysis.
**Model, Tab WW> Calculated, Lines 286-289, shows annual water consumption by the City's non -irrigation accounts by meter size. Adding the four
numbers on these lines yields 20,776 HCF for FYE 2019. Also, this figure is consistent with Table 8-5 in the Rate Study. This figure was used for ill years
in this analysis.
***Consumption for FY 18-19 per Model ,tab W>Rev, line 528. This figure was used for all years in this analysis.
"Per Model, Tab W>Cashflow, Lines 8-26
A"Per Model, Tab WW>Cashflow, Line 26
Revised 2/18/21
Revenue with
Proposed 25%
Decrease in
Under Existing Rates
FYE
Rate Decrease
Revenue
$ 2,870,765
2021
$ 2,751,150
-$119,615
$ 2,870,765
2022
$ 2,153,074
-$717,691
$ d 2,870,765
2023
$ 2,153,074
-$717,691
$ 2,870,765
2024
$ 2,153,074
-$717,691
$ 2,870,765
' 2025
$ 2,153,074
-$717,691
$14,353,826
Totals
$ 11,363,446
-$2,990,381
Total Net Combined W&S Proposed
Increased
Revenue Through
$4,548,996
FYE 2025:
Notes:
*The City currently has one 8" non -irrigation meter per Model ,tab W>Rev, line 452. However, the Model assigns no fixed charge to this meter in the
projected revenues if rates are not increased. Therefore, this meter will not be counted in this retrospective analysis.
**Model, Tab WW> Calculated, Lines 286-289, shows annual water consumption by the City's non -irrigation accounts by meter size. Adding the four
numbers on these lines yields 20,776 HCF for FYE 2019. Also, this figure is consistent with Table 8-5 in the Rate Study. This figure was used for ill years
in this analysis.
***Consumption for FY 18-19 per Model ,tab W>Rev, line 528. This figure was used for all years in this analysis.
"Per Model, Tab W>Cashflow, Lines 8-26
A"Per Model, Tab WW>Cashflow, Line 26
Revised 2/18/21
Appendix 2: Projected General Fund Annual Water & Sewer Costs
Under New Rate Structure
Water:
Rate Effective
Date
5/1/2021
1/1/2022
1/1/2023
1/1/2024
1/1/2025
Fiscal Year
2020-21 2021-22 2022-23 2023-24 2024-25
$37,398
$112,193
$125,656
$125,656
$136,965
$136,965
$147,922
$147,922
$159,756
$37,398 $237,849 $262,621 $284,887 $307,678 $1,130,433
5 -Yr Total
Sewer:
Rate Effective
Date 2020-21 2021-22 2022-23 2023-24 2024-25
5/1/2021 $6,964 $41,786 1 $41,786 1 $41,786 1 $41,786 $174,109
5 -Yr Total
General Fund
Total $44,362 $279,635 $304,407 $326,674 $349,465 $1,304,543
5 -Yr Total
Appendix 2 (cont): General Fund Annual Water Costs (May 2021)
Customer Class: City Irrigation (City Parks, Medians)
Volumetric Charges Water Used Charge Per Annual Water Used Charge Per Annual
(HCF) HCF Charize (HCF) HCF Charize
Annual Consumption*
18,281 $2.68 $48,993
Bi -Monthly
Meter Charges Number of Meters** Charge Per Annual
Meter Charee
Meters: 5/8"
Meters: 1"
Meters: 11/2"
Meters: 2"
Meters: 4"
Meters: 8"
2
$36.79
$441
9
$54.72
$2,955
5
$106.00
$3,180
29
$160.35
$27,901
0
$474.70
$0
1
$1,495.09
$8,971
35,641 Fi2.7T71
$96,587
Bi -Monthly
Number of Charge Per Annual
Meters**
Meter Charee
2
$36.79
$441
4
$54.72
$1,313
6
$106.00
$3,816
28
$160.35
$26,939
1
$474.70
$2,848
0
$1,495.09
$0
Totals by Customer Class $92,441
Total Annual Water Cost to General Fund: $224,386
*Per Water Rate Study Model Spreadsheet, Water Revenue Tab, lines 528-530 (PRA 21-7)
**Per Water Rate Study Model Spreadsheet, Cost of Service Tab, lines 147-156 (PRA 21-7)
Created: 1/22/21
$131,945
Appendix 2 (cont): General Fund Annual Sewer Costs (May
2Q21
Volume (HCF)*
Sewer Accounts**
HCF or Annual
Billing Basis Account Bill Charges
10,388 $4.00 $41,552
32 $1.22 $234
Total Annual Sewer Cost to General Fund: $41,786
*50% (Return -to -Sewer Factor) of Water Use by Non -Irrigation Accounts
(10,388 per Table 8-5)
**Total City Sewer Accounts per Model, Tab WW>Input, Lines 207-210
Created 2/1/21