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HomeMy WebLinkAbout5/17/2000 - STAFF REPORTS (19) DATE: May 17, 2000 TO: City Council FROM: Assistant City Manager-Special Projects SEWER SERVICE CHARGE RATE BASE POLICY It is recommended that City Council establish policy statements,effective July 1,2000, on the costs to be included in the Sewer Service Charge rate base. BACKGROUND: Proposition 218 established the principle thatfees charged fora service should reflect the total cost of that service. Proposition "U", passed in November by the Palm Springs voters, reemphasized the principles of Proposition 218. The sewer charge rate base in the past has included an In-Lieu Property Fee and a calculated Administrative Services charge, but not the full debt service on the existing bond issue. Only about 10% of the bond debt service was allocated to the Sewer Service Charge, the remainder of the debt payments came from the Sewer Facility Fees, interest earnings from the Wastewater Treatment Plant Fund reserves and the reserve itself. The attached Resolution, if adopted by City Council, would establish a policy that the Sewer Service Charge rate base shall include: a) Full Operations & Maintenance Costs b) City Direct Charges for Services c) Motor Vehicle Replacement Fees d) Property Leases e) Debt Service f) Insurance g) Other Allowable Charges under Prop 218 The attached Resolution is offered for City Council consideration. ow;��V_ ALLEN F. SMOOT, AAE Assistant City Mana r-Special Projects APPROVED 6City Manager ATTACHM NT: Resolution RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, SETTING POLICY CONCERNING SEWER SERVICE FEE RATE BASE COMPONENTS. WHEREAS Proposition 218, as passed by State of California voters in November 1996, provides that fees (1) should not exceed the funds requiredto provide the service, (2) shall not be used for purposes other than that for which they were imposed, (3) shall not exceed the proportional cost of the service attributable to the parcel, (4) shall not be charged unless the service is available, (5) may not be charged for general governmental services; and WHEREAS the Palm Springs voters reemphasized principles of Proposition 218 when they passed Proposition "U" in November of 2000, which prohibited the sale or lease of the Wastewater Plant to a private entity and enacted restrictions on fees similar to Proposition 218; and WHEREAS the City, with the assistance of Integrated Utilities Group, Inc., is in the midst of developing a new sewer rate program which will be consistent with Proposition 218 and must establish a policy on all the costs which should be placed in the rate base and shall utilize the components worded herein, and NOW THEREFORE BE IT RESOLVED that the City Council hereby establishes the following policy: Section 1. The Sewer Service Charge rate base shall be made up of the following cost components which arise from the operation, maintenance and construction of facilities for the processing and treatment of sewage including: A. Full Operation & Maintenance Costs including personnel charges B. Direct Contract Charges for Services C. Fees for Motor Vehicles used in connection therewith D. Leases for property in connection therewith E. Debt Service for wastewater treatment facilities F. Insurance Costs G. Other related charges or Allowable Charges Under Proposition 218 Section 2. The Sewer Charge rate Base shall not include administrative fees or charges by the City collected for General Fund purposes except reimbursement of direct charges by contract. I to 42W Resolution for Sewer Service Fee Rate Base May 17, 2000 Page Two ADOPTED this day of 12000. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By: City Clerk City Manager REVIEWED &APPROVED AS TO FORM It" #13