TO: HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: DIRECTOR OF PUBLIC WORKS
DATE: JULY 6, 2004
SUBJECT: ABALONE COVE SEWER MAINTENANCE FEE
Staff Coordinator: Ron Dragoo, Sr. Engineer
RECOMMENDATIONS:
- Conduct a public hearing on the proposed levy and allocation of the annual sewer service charge for the Abalone Cove Sewer System for Fiscal Year 2004-2005.
- Authorize a City subsidy of $10,535 for the annual Abalone Cove sewer service charge.
- Adopt Resolution No. 2004-_____, a Resolution of the Council of the City of Rancho Palos Verdes approving the report in connection with the sewer service charge established pursuant to Chapter 13.06 of the Rancho Palos Verdes Municipal Code, determining the amount of such charge for Fiscal Year 2004-2005, and ordering such charge to be collected through the tax roll.
- Adopt a Resolution 2004- _____, a resolution of the City Council of the City of Rancho Palos Verdes, amending resolution 2004-45, the budget appropriation for FY 04 - 05, for a budget adjustment to the City’s General Fund.
EXECUTIVE SUMMARY
- The Abalone Cove Sewer District has been in existence since July 2001.
- Revenues collected through the District help pay for maintenance of the system which is broken into four zones (subsystems) including 50 grinder pumps, four lift stations and thousands of feet of pressure and gravity flow pipes.
- Residents within the district are assessed a fee in accordance with the specific subsystems used by each parcel.
- Since inception of the District, the total District budget has remained relatively stable, varying from $52,200 to $56,600 per year.
- The City has subsidized maintenance of the system in an effort to reduce fees to the property owners. The subsidy during the first two years was $35,000. In FY 2003/04 the subsidy was reduced to $17,500.
- In FY 2004/05 the proposed subsidy is $10,540. This amount was approved by the City Council on May 18, 2004. Accordingly, as the subsidy decreases, fees to residents have increased.
BACKGROUND
To insure funding for the on-going operation and maintenance of the sewer facilities in the Abalone Cove area, the City Council established the Abalone Cove Sewer Service charge on July 17, 2001. This Sewer Maintenance Fee ensures a fair and equitable levying of the necessary costs of operating and maintaining the facilities.
The City Council annually reviews the Fiscal Year’s current and projected costs for operating and maintaining the sewer facilities and sets rates for the ensuing fiscal year, which begins July 1, 2004 and ends June 30, 2005. In setting the annual rates, the City Council will consider any new or updated maintenance costs, and any fund balances or shortages, and adjust the rates accordingly.
The Abalone Cove Sewer service charge is levied under the authority of the California Health and Safety Code, Sections 5471 et seq. (the "Code"). Payment of the charge for each parcel will be made in the same manner and at the same time as payments are made for property taxes for each property.
To levy the sewer charge for fiscal year 2004-2005, the City must hold a public hearing. The attached Engineer’s report was prepared to analyze costs and determine the amounts. This report estimates the annual operating costs of the Abalone Cove Sewer System and the corresponding fee required of each property.
ANALYSIS
The estimated annual cost to maintain the Abalone Cove Sewer System for FY 2004-2005 is $52,221. This amount is equal to FY 2003-2004, and slightly less than the budgeted amount of $56,595 for FY’s 2001-2002 and 2002-2003:
| FY 2001-2002 |
FY 2002-2003 |
FY 2003-2004 |
FY 2004-2005 |
|
| Actual |
Actual |
Actual |
Proposed |
|
| District Costs |
$56,595 |
$56,595 |
$52,221 |
$52,221 |
| - |
|
|
|
|
| City Subsidy |
$35,000 |
$35,000 |
$17,500 |
$10,535 |
| = Total Fee |
$21,595 |
$21,595 |
$34,721 |
$41,686 |
When the Abalone Cove Sewer service charge was established, the City Council agreed to have the City subsidize sewer maintenance in an effort to reduce fees to property owners and to bring uniformity to the annual service charges. The City annual subsidy for FY 2001-2002 and FY 2002-2003 was $35,000 and for FY 2004-2005 it was $17,500. The City subsidy is reviewed each year and may be reduced, altered, or otherwise discontinued, as the City Council deems appropriate. Through the most recent budget process, the City Council requested staff reduce the City subsidy by 40%, to no more than $10,540. This reduction in subsidy will result in increased fees to property owners.
The FY 2004-05 Engineer’s Report groups parcels in the Abalone Cove sewer service area into various rate zones based on the specific combination of sewer subsystems utilized by each parcel. The proposed FY 2004-05 fees for a single-family parcel ranges from $129.46 to $567.50. For all parcels in the Abalone Cove sewer service area, the FY 2004-2005 fee is greater than the FY 2003-2004 fee. The Fee for Zones A, C, and D are at the maximum allowable rates, Zone B is not higher than the maximum charges authorized pursuant to Section 13.06.070 of the City’s Municipal Code. A description of the various zones and their historic and proposed fees are as follows:
| Property Owner Fees: |
|||||
| FY 2001-2002 FY 2002-2003 |
FY 2003-2004 |
FY 2004-2005 |
% Increase |
FY 2004-2005 |
|
| Actual |
Actual |
Proposed |
|
||
| Subsidy |
($35,000) |
($17,500) |
($10,540) |
|
($0) |
| Zone A |
$ 119.07 |
$ 127.13 |
$ 129.46 |
1.8 % |
$ 208.49 |
| Zone B |
$ 209.15 |
$ 327.84 |
$ 454.20 |
27.8 % |
$ 454.20 |
| Zone C |
$ 129.71 |
$ 172.57 |
$ 175.73 |
1.5 % |
$ 367.39 |
| Zone D |
$ 219.79 |
$ 418.28 |
$ 567.50 |
26.3 % |
$ 613.10 |
The proposed fee varies by zone. The zones with the highest fees, Zones B and D, are the zones with the highest per parcel cost for maintenance. For the Abalone Cove Sewer System, the in-street pump stations have the highest per parcel costs to maintain, and thus those properties, which utilize these in-street pump stations, have the highest fees. A system of zones was developed to identify the specific combination of subsystems used by each contributing parcel.
The percent increase also varies by zone. The zones with the highest increase, Zones B and D, have historically received the highest per parcel subsidy. Therefore, when the subsidy is reduced, Zones B and D will be impacted the most.
The Ordinance which established the Abalone Cove Sewer Service District also established the maximum service charge that can be levied, which is increased each year based on the Consumer Price Index (CPI) If the service charge proposed is greater than the maximum service charge as established through City Ordinance, a new or revised Ordinance would be required in order to re-establish the new maximum service charge that can be levied. The maximum service charges for the FY 2004-05 are as follows:0
| FY 2003-04 |
|
| Max. Rates |
|
| Zone A |
$129.46/ERU |
| Zone B |
$ 521.25/ERU |
| Zone C |
$175.73/ERU |
| Zone D |
$567.50/ERU |
CONCLUSION
The City Council is required to conduct a public hearing and adopt a resolution (confirming the annual sewer service charge) prior to collecting fees through the tax roll. By adopting staff’s recommendation, Council will be levying single-family parcels between $129.46 to $567.50.
ALTERNATIVE ACTIONS
Revise the City subsidy, which will revise the proposed fees.
FISCAL IMPACT
By adopting the staff recommendation, Council will be approving a total sewer service charge of $41,686, and a City subsidy of $10,535 in General Funds to maintain the FY 2004-2005 Abalone Cove Sewer System. No additional funding is required since the General Fund subsidy is allocated in the FY 2004-2005 budget.
The recommended action included the adoption of a budget resolution to provide the General Funds for the City’s subsidy. In FY 2003/04 the following adjustment to the General Fund have been approved.
| FY04-05 General Fund Reserves |
|||
| Beginning General Fund Reserves (estimate) |
|
11,244,191 |
|
|
|
|
||
| FY04-05 Revenues (adopted budget) |
|
12,081,300 |
|
| FY04-05 Expenditures (adopted budget) |
(11,554,456) |
||
| FY04-05 Net Transfers (adopted budget) |
|
(2,129,513) |
|
|
|
|
||
| Ending General Fund Reserves (estimate) |
|
9,641,522 |
|
|
|
|
||
| Less: additional budget adjustments adopted by the City Council: |
|
||
| 6/15/2004 |
NATOA Membership for RPV TV Channel 33 |
|
(500) |
|
|
|
||
| Revised Ending General Fund Reserves (estimate) |
|
9,641,022 |
|
|
|
|
||
| General Fund Reserve Policy Level (50% of budgeted revenues) |
|
6,040,650 |
|
|
|
|
||
| General Fund Reserves In Excess Of Policy (estimate) |
160% |
3,600,372 |
|
| Note: Subject to the possibility of the State legislating the return of FY03-04 VLF back-fill revenue, the City has received approximately $1.1 million more than the amount included in the FY03-04 budget. Therefore, FY04-05 Beginning General Fund Reserves (estimate) may be approximately $1.1 million greater than the amount presented above. |
|||
Respectfully Submitted,
Dean E. Allison
Director of Public Works
Reviewed,
Les Evans
City Manager
Attachments: FY 2004-2005Engineer’s Report
Resolution No. 2004-______
RESOLUTION NO. 2004-_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES APPROVING A REPORT IN CONNECTION WITH THE SEWER SERVICE CHARGE ESTABLISHED PURSUANT TO CHAPTER 13.06 OF THE RANCHO PALOS VERDES MUNICIPAL CODE, DETERMINING THE AMOUNT OF SUCH CHARGE FOR FISCAL YEAR 2004-05, AND ORDERING THAT SUCH CHARGE BE COLLECTED ON THE TAX ROLL
THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The City Council finds:
- Pursuant to Chapter 13.06 of the Rancho Palos Verdes Municipal Code and Ordinance No. 367U (the "Ordinance"), the City levies an annual sewer service charge (the "Charge") on each parcel of real property in the Abalone Cove Landslide Abatement District that is connected to the sanitary Sewer System. The Charge is levied to finance the costs of on-going operation and maintenance of sewer facilities and services ("Sewer Services").
- As authorized by Section 5473 of the California Health and Safety Code, the Charge is collected for each fiscal year on the County of Los Angeles tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City.
- A written report (the "Report") has been filed with the City Clerk, containing a description of each parcel of real property receiving Sewer Services and the amount of the Charge for each such parcel for Fiscal Year 2004-05 (commencing July 1, 2004 and ending June 30, 2005), computed in conformity with the Ordinance. Such Report is attached to this Resolution as Exhibit "A" and incorporated herein by reference.
- The Report provides that the Charge for Fiscal Year 2004-05 be increased from the Charge for the prior Fiscal Year; but the charge does not exceed the maximum amount authorized pursuant to chapter 13.06 of the Municipal Code Ordinance No. 367 U.
- The City Clerk caused notice of a hearing on the Report to be published in the Palos Verdes Peninsula News on June 17, 2004 and June 24, 2004.
- The City Council held a hearing on the Report on July 6, 2004. At such hearing, the City Council heard and considered all objections and protests, if any, to the Report.
Section 2. The City council overrules any and all objections to the Report; determines that no majority protest against the Report exists; adopts the Report as filed; determines that the Charge for Fiscal Year 2004-05 against each parcel described in the Report shall be as described in the Report; and orders that the Charge shall be collected for Fiscal Year 2004-05 on the County of Los Angeles tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City.
Section 3. The City Clerk is directed to file a copy of the Report with the City Treasurer on or before [VERIFY DATE] August 10, 2004 pursuant to Section 5 of the Ordinance.
Section 4. The City Clerk is directed to file a copy of the Report with the County Auditor of the County of Los Angeles on or before [VERIFY DATE] August 10, 2004 pursuant to Section 6 of the Ordinance.
Section 5. The City Clerk is authorized to take such other action as is required to implement this Resolution.
PASSED, APPROVED and ADOPTED this 6th day of July 2004.
_____________________________
Mayor
ATTEST:
_________________________
City Clerk
State of California )
County of Los Angeles ) ss
City of Rancho Palos Verdes )
I, JO PURCELL, City Clerk of the City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2004-_____ was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on July 6, 2004.
_____________________________
City Clerk
Resolution No. 2004-_____
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES, AMENDING RESOLUTION 2004-45, THE BUDGET APPROPRIATION
FOR FISCAL YEAR 2004-05, FOR A BUDGET ADJUSTMENT TO THE CITY’S ABALONE COVE SEWER MAINTENANCE FUND AND GENERAL FUND
WHEREAS, Section 3.32 of the Rancho Palos Verdes Municipal Code provides that all expenditures in excess of budgeted allocations must be by supplemental appropriation of the City Council; and
WHEREAS, on June 1, 2004, the City Council of the City of Rancho Palos Verdes adopted Resolution 2004-45, approving a spending plan and authorizing a budget appropriation for the 2004-05 fiscal year; and
WHEREAS, it is necessary for the City to allocate additional funds to subsidize the Abalone Cove Sewer Maintenance Fee; and
WHEREAS, a budget increase in the Abalone Cove Sewer Maintenance Fund is necessary to authorize the expenditure of additional funds for maintenance services.
BE IT, THEREFORE, RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES:
The following adjustments be made to the following funds:
Abalone Cove Sewer Maintenance 125-325-30 Maintenance $ 2,221
Abalone Cove Sewer Maintenance 125-311-10 Revenue ($10,540)
Abalone Cove Sewer Maintenance 125-391.10 Transfer In $2,221
General Fund 001-391.20 Transfer Out $2,221
PASSED, APPROVED, AND ADOPTED THE 6th DAY OF July, 2004.
___________________________
MAYOR
ATTEST:
______________________
CITY CLERK
Resolution No. 2004-
State of California )
County of Los Angeles )ss
City of Rancho Palos Verdes )
I, JO PURCELL, City Clerk of The City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2004- was duly and regularly passed and adopted by the said City Council at regular meeting thereof held on July 6, 2004.
____________________________
CITY CLERK
CITY OF RANCHO PALOS VERDES
Resolution No. 2004-