JULY 5, 2004 ABALONE COVE SEWER MAINTENANCE FEE JULY 5, 2004 ABALONE COVE SEWER MAINTENANCE FEE

TO: HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL

FROM: DIRECTOR OF PUBLIC WORKS

DATE: JULY 5, 2004

SUBJECT: ABALONE COVE SEWER MAINTENANCE FEE

Staff Coordinator: Ron Dragoo, Sr. Engineer

RECOMMENDATIONS:

  1. 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 2005-2006.
  2. Adopt Resolution No. 2005-_____, a Resolution of the 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 2005-2006, and ordering that such charge be collected on the tax roll.

EXECUTIVE SUMMARY

  1. The Abalone Cove Sewer District has been in existence since July 2001.
  2. 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.
  3. Residents within the district are assessed a fee in accordance with the specific subsystems used by each parcel. 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.
  4. Since inception of the District, the total District budget has remained relatively stable, varying from $52,200 to $56,600 per year.
  5. In FY 2003/04 the subsidy was reduced to $17,500 and further reduced to $10,540 in FY 2004/05.
  6. In FY 2005/06 the proposed subsidy is $9,522. This amount was approved by the City Council on March 12, 2005.
  7. In FY2005/06 the proposed rates paid by users of the system will increase by 3.85%. The code allows increases to residents fees annually, but limits the increase to the Consumer Price Index (CPI). This years’ CPI is 3.85%.

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 and ends June 30. 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 2005-2006, 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 2005-2006 is $52,221. This amount is equal to FY 2004-2005 and 2003- 2004, and slightly less than the budgeted amount of $56,595 for FY’s 2001-2002 and 2002-2003:

 

FY 2001-02

FY 2002-03

FY 2003-04

FY 2004-05

FY 2005-06

  Actual Actual Actual Actual Proposed

District Costs

$56,595 $56,595 $52,221 $52,221 $52,221

-

 

 

 

   

City Subsidy

$35,000 $35,000 $17,500 $10,535 $10,000

Total Fee

$21,595 $21,595 $34,721 $41,686 $42,699

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, for FY 2003-2004 it was $17,500,for 2004-2005 it was $10,540. 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 authorized a subsidy of no more than $10,700.

The FY 2005-06 Engineer’s Report groups parcels in the Abalone Cove sewer service area into various rate zones based on the specific combination of sewer subsystems used by each parcel. The proposed FY 2005-06 fees for a single-family parcel ranges from $134.64 to $590.20. The Fee for Zones A, C, and D are at the maximum allowable rates, Zone B is less 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 2005-2006
Actual Actual Actual  

Subsidy

 ($35,000)  ($17,500) ($10,540)   ($9,522)

Zone A

$ 119.07 $ 127.13 $ 129.46

3.85 %

$ 134.64

Zone B

$ 209.15 $ 327.84 $ 454.20

3.85 %

$ 454.21

Zone C

$ 129.71 $ 172.57 $ 175.73

3.85 %

$ 182.76

Zone D

$ 219.79 $ 418.28 $ 567.50

3.85 %

$ 590.20

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 use 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 2005-06 are as follows:

FY 2005-06

Max. Rates

Zone A

$134.64/ERU

Zone B

$ 542.15/ERU

Zone C

$182.76/ERU

Zone D

$590.20/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 $134.64 to $590.20.

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 $42,699, and a City subsidy of $9,522 in general funds to maintain the FY 2005-2006 Abalone Cove sewer system. No additional funding is required since the general fund subsidy is allocated in the FY 2005-2006 budget.

Respectfully Submitted,

Dean E. Allison

Director of Public Works

Reviewed,

Les Evans

City Manager

Attachments: FY 2005-2006Engineer’s Report

Resolution No. 2005-

RESOLUTION NO. 2005-_____

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 2005-06, 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:

    1. 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").
    2. 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.
    3. 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 2005-06 (commencing July 1, 2005 and ending June 30, 2006), computed in conformity with the Ordinance. Such Report is attached to this Resolution as Exhibit "A" and incorporated herein by reference.
    4. The Report provides that the Charge for Fiscal Year 2005-06 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.
    5. The City Clerk caused notice of a hearing on the Report to be published in the Palos Verdes Peninsula News on June 18, 2005 and June 25, 2005.
    6. The City Council held a hearing on the Report on July 5, 2005. 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 2005-06 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 2005-06 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 9, 2005 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 9, 2005 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 5th day of July, 2005.

_____________________________

Mayor

ATTEST:

_________________________

City Clerk

State of California )

County of Los Angeles ) ss

City of Rancho Palos Verdes )

I, CAROLYNN PETRU, City Clerk of the City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2005-_____ was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on July 5, 2005.

______________________________

City Clerk

Resolution No. 2005-_____