HomeMy WebLinkAbout1/5/2000 - STAFF REPORTS (18) DATE: January 5, 2000
TO: City Council
FROM: Assistant City Manager-Operations
SEWER SERVICE CHARGE BILLING METHODOLOGY
RECOMMENDATION:
It is recommended that City Council provide direction to staff as to the preferred method for sewer
service charge billing to take place beginning July 1, 2000.
BACKGROUND:
Currently,the sewer service charges are billed through the County Tax Assessor. The cost of having
the billing handled on the tax bill is$3500 to the County plus various Finance Department costs to
maintain the data base and handle customer inquiries at approximately$30,000. That equates to an
annual billing cost of$33,500 (excluding YX compliant data base development which will be
$35,000 regardless of bow billing occurs)with 100%guarantee of collection as the City participates
in the County's TEETER Plan which guarantees payment on all items billed on the tax bill.
During the wastewater privatization effort,the proposers were asked to provide a cost for handling
billing. US Filter proposed quarterly billing at a cost of $76,800/year with a onetime
hardware/software cost of$24,600 and$.50 per each delinquent account notice. Delinquency should
be expected in the 5%to 7%range with no guarantee of collection. OMI proposed quarterly billing
at a cost of$316,000/year.
There is still an open question as to whether placing an item on the tax bill makes it a properly-
related service which would invoke Prop 218 requirements for any future rate adjustments. There
are court cases pending on both sides of the issue.
Proposition 218 states that the cost of any service shall be no greater than providing the service. In
this billing instance, any one of the quotations selected by City Council would equate to the "actual
cost"which would be rolled into the overall sewer service charge rate base. The least impact to the
rate payers, both in lower billing costs and zero delinquent collection costs is via the tax rolls. At
this time, staff believes for at least the next year the City should continue to bill the least expensive
way, on [lie tax bill, and closely monitor the court cases for future decisions.
The timing for this decision is based upon the US Filter Operating Services Agreement requirement
to provide notice at the beginning of January if the City seeks their assistance in billing. Attached
are two items for City Council consideration; first, is a Minute Order "Notice to Proceed" to
authorize US Filter to carry out billing and/or second is a Resolution authorizing the continued use
of the tax rolls as a billing mechanism and authorizes up to $35,000 for data base development and
data input.
i
ALLEN F. SMO T, AAE THOMAS M. KANARR
Assistant City ager-Operations Director of Finance& Treasurer
APPROVED zlR
ity Manager
ATTACHMENTS:
1. Minute Order
2. Resolution
RESOLUTION NO. 19718
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, AUTHORIZING STAFF TO
CONTRACT WITH RIVERSIDE COUNTY TAX
ASSESSOR FOR BILLING OF THE CITY SEWER
SERVICE CHARGES ON THE TAX ROLLS AND
AUTFORIZING UP TO$3 5,OOO IN EXPENDITURE TO
DEVELOP AND INPUT A NEW SEWER SERVICE
DATA BASE.
WHEREAS the City of Palm Springs has just completed over two years of evaluating the best way to provide
sewer treatment services for its citizenry and to comply with Proposition 218; and
WHEREAS the citizens of Patin Springs,through a referendum process, have amended the City's Charter
to ensure that only the actual costs related to the operation,maintenance,administration and expansion of the
sewer plant will be reflected in their billing; and
WHEREAS the City has contracted with Integrated Utilities Group to develop a sewer service rate model
based on differing usage classifications, waste strength and cost of service principals; and
WHEREAS the City has evaluated various methods of carrying out the actual billing and has found the least
expensive and most reliable way to bill for sewer services is on the tax rolls; and
WHEREAS the City's sewer service data base is non-Y2K compliant and must be replaced;
NOW THEREFORE BE IT RESOLVED as follows:
Section 1. That staff is hereby instructed to utilize the services of the County Tax Assessors Office to
place the sewer service charges on the tax rolls.
Section 2. That City Manager is hereby authorized to expend up to$35,000 of sewer fiords to develop
a new sewer service data base and input data.
ADOPTED this 5th day of January , 2000.
AYES: Members Hodges, Jones, Oden, Reller-Spurgin, Mayor Kleindienst
NOES: None
ABSENT: None
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Cleric City Manager
REVIEWED &APPROVED AS TO FORMirr
q&
MINUTE ORDER NO.
PROVIDING US FILTER OPERATING SERVICES
WITHANOTICE TO PROCEED TO PROVIDE SEWER
SERVICE BILLING AS OF DULY 1, 2000.
I HEREBY CERTIFY that this Minute Order, providing US Filter
Operating Services with a Notice to Proceed to provide sewer service
billing as of July 1, 2000,was adopted by the City Council of the City of
Palm Springs,California,in a meeting thereof held on the 5"clay of January
2000.
PATRICIA A. SANDERS
City Clerk
liM1/