Item 5.1 Additional Material posted 10-15-19City of Poway
MEMORANDUM
ADDITIONAL MATERIAL
(Agenda Related Writings/Documents provided to City Council or Staff after distribution of the
Agenda Packet for the October 15, 2019 Council Meeting)
DATE: October 15, 2019
TO: Honorable Mayor and Members of the City Council
FROM: Faviola Medina, CMC, City Clerk
CONTACT: (858) 668-4535 or FMedinat�poway.org
SUBJECT:
Item 5.1 - Water and Wastewater Rate Study and Public Workshop
Attached please find correspondence received on Monday October 14, 2019, after the agenda
distribution deadline.
Reviewed/Approved By:
"rye
Reviewed By: Approved By:
Wendy serman Alan Fenstermacher
Assistant City Manager City Attorney
Chris Hazeltine
City Manager
1 of 5 October 15, 2019, Item #5.1
ADDITIONAL MATERIAL
From: Carol Leoq
To: aciendadocsresource
Cc: Aaron_Beanan
Subject: FW: Questions for the upcoming water rate workshop
Date: Monday, October 14, 2019 4:01:30 PM
Forwarding to CCO - relates to October 15 Rates Workshop Item on Agenda.
Original Message
From: Peter De Hoff <pldehoff@gmail.com>
Sent: Sunday, October 13, 2019 9:19 PM
To: Steve Vaus <SVaus@poway.org>; John Mullin <JMullin@poway.org>; David Grosch <dgrosch@cox.net>;
Barry Leonard <BLeonard@poway.org>; Caylin Frank <CFrank@poway.org>
Cc: Chris Hazeltine <CHazeltine@poway.org>
Subject: Questions for the upcoming water rate workshop
To Poway City Council and City Staff,
Thank you for completing and publishing the rate study. 1 found it detailed and informative in gaining a more
complete view of how these utilities operate. Particularly about the potential future rate structures as well as, by
inference, our current rate structure. The sewer use section seems pretty straightforward, but I do have a couple of
questions related to the water portion that I'm hoping you may have time to address during the upcoming
workshops.
Tier choices. Can you expand on the reasoning for choosing the water use tier levels? Such as why 56 units rather
than 40 units or 75units?
Tier choices and Prop. 218.
After the rate system is in place, would a change in the choice of tier boundary, say for example Tier 1 moving from
20 to 18, necessarily require a system wide Proposition 218 notification? I ask because it makes sense, and appears
to be one of the goals here, to choose a rate structure and review timeline that reduces overall system costs, one of
which can occur from a Proposition 218 mailing. In this case, I am thinking of potential future legislative
requirements that may be addressable by altering the use levels of various tiers. If moving these tiers around would
not, per se, trigger such a mailing requirement, then the choice of tiers in the near term is not as important when
compared to a situation in which there is an automatic trigger caused by such a change.
Demand elasticity:
Can you go into some detail concerning demand elasticity and the choice of water rate tier number choices?
Particularly if this type of issue has been observed in other districts in the past.
1 recognize there are a number of variables that the council and staff need to consider when choosing a rate
structure. With that in mind, I would ask that you consider choosing options with fixed charges that align as closely
as possible to the fixed costs to, in part, help reduce rate fluctuations and improve cost predictive accuracy. In
contrast, to reduce user distress, l would also ask that you try to choose a rate structure that has a small a change as
possible, either positive or negative, across all users. Best of luck. :-)
Regards,
Peter De Hoff
2 of 5 October 15, 2019, Item # 5.1
From: Faviola Medina
Sent: Tuesday, October 15, 2019 1:00 PM
To: Ana Alarcon
Subject: FW: Water and Sewer Workshop October 15, 2019 Item #5.1
Thank you,
Faviola Medina, CMC
City Clerk
City of Poway 1 City Clerk's Office
13325 Civic Center Drive 1 Poway, CA 92064
finedina@poway.org 1 858-668-4535
From: Chris Cruse <cmcruse@cox.net>
Sent: Monday, October 14, 2019 8:53 PM
To: Steve Vaus <SVaus@poway.org>; Dave Grosch <DGrosch@poway.org>; Caylin Frank <CFrank@poway.org>; Barry Leonard
<BLeonard@poway.org>; John Mullin <JMullin@poway.org>; Faviola Medina <FMedina@poway.org>
Cc: Chris Cruse <cmcruse@cox.net>
Subject: Water and Sewer Workshop October 15, 2019 Item #5.1
To: Poway City Council
From: Chris Cruse, Poway
RE: Water and Sewer Workshop
October 15, 2019 Item #5.1
Councilmembers,
In reviewing the proposed water rates, I noticed that all of the plans that exceed 17% for fixed
fees will raise rates on the low volume users.
note that some of the plans raise rates as much as 20 percent for the very low volume user.
This is onerous. Poway needs to keep a water rate that allows retired people on fixed incomes
and new, young homeowners to be able to afford to live here. I prefer the 17% fixed fee, with 3
or 4 tiers which will also encourage conservation.
For sewer rates, I prefer option 2a. And I would like it to look like the top 2a option, where Tiers
1, 2 and 3 will pay less than they are now paying.
Somehow, when option 2a was converted to a chart (bottom), something happened and only
Tier one will see their bills go down, tiers 2 and 3 will see increases.
3 of 51 October 15, 2019, Item # 5.1
I5160
5140
.120
5100
SS
5
Bi -Monthly SFR Bills (Wastewater)
520
SO
-Current
i P
Iced NStructure
1 3 5 7 9 11 13 15 17292123252729313335373941434547495153555759
6i-MonthlyWGnter Water Use (units)
The chart below shows the impacts across various usage levels for this option.
2a
5160
5140
5120
5100
580
560
5-40
520
50
SFR Impacts at Different Usage Levels, 2f %0/80 F/V (Option 2a)
11
5 until:
.Current 80'1 550 88
*Proposed Be 542 75
ami (5) -58.13
dnlpaet (%) •16.0%
12 units
573.46
$77, 74
54,28
5.3'0
19 units 26 units 37 unts
599,79 $107.33 512238
5112,74 5137 73 $137 73
512.95 530,40 51535
13.0% 1 28.3% 12.5%
11
50 units 60 units
513743 5148,73
5137.73 5137,73
50,30 •511,00
0.2% -7.4%
11
Because of the discrepancy in the graph and chart that are supposed to be showing the same
plan, I was concerned that I may have misunderstood the method introduced to determine
winter water use for new service customers. Is using the number of bedrooms as a criteria only
for new customers, or does it involve everyone? Hopefully, not everyone.
Another option would be to use the previous winter water use and get rid of the 3 yr averaging.
One of the problems in Poway is that there are such a wide variety of users in the residential
class of service.
4 of 5
2
October 15, 2019, Item # 5.1
Some of us have modest size homes and Tots and others have acres of avocado trees that need
to be watered on their estate. When we are talking about fixed fees as a proportion of the total
costs of water and sewer, being in a class with some users who are watering acres of avocado
trees that they plan to sell doesn't seem right. Perhaps we need two classes of residential
service, one for RS zoned parcels and another for Rural Residential zoned parcels. Then the
fixed fees for the RS lots would be much smaller, even if it was the same percent.
In order to be compliant with Prop 218, "Revenues derived from the fee or charge must not
exceed the cost to provide the service."
The city adds about $6 million in cost allocations to our bills to have the water and sewer
customers pay a proportion of regular city costs, such as the costs of the legislative and
administrative department. I note that the proportion of these costs that are still paid for with
general fund money, most of which comes from property taxes, the distribution of the costs is
proportional to the assessed value of each property. When the city starts transferring larger and
larger amounts of regular city costs to the water and sewer bills and divvies it up equally among
the users, the bills hit those who are less wealthy a lot harder than the others.
Supposedly, the city is charging us these cost allocations because we would need to hire our
own council, attorney, HR people, etc, if the water and sewer department were independent of
the city. But the city has not shown that these costs are in any way related to providing service
to the water and sewer customers. How can they justify these expenses as something we
would need to pay if we were independent. Does not Prop 218 require that they can only charge
us what it costs to provide their services? The water and sewer ratepayers should not have to
pay almost half the cost of some Poway city departments just because we would need to hire
our own. The city needs to show that those are the costs necessary to provide water and sewer
customers with water and sewer service.
Additionally, the city does not pay their own water and sewer bills. They do not pay for any
sewer service at all. They have begun to pay for some of the costs of water used at city
buildings, the pool and landscape areas, but they only pay at the raw water costs, not the full
costs that we pay. And the costs the city pays are actually folded into the cost of various
departments. So the water and sewer rate payers are dinged twice for these costs- once when
we pick up the tab for the full cot of water and sewer at city facilities and landscape areas , and
once more when we get billed for a proportion of the departmental costs that are billed as "cost
allocations". Since these costs are not the cost to provide service to our homes, but the cost to
provide service to city facilities, should not these costs be paid for with general fund money?
Sincerely,
Chris Cruse
5 of 53 October 15, 2019, Item # 5.1