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Item 1 - Additional Material posted 1-9-19ADDITIONAL MATERIAL Donna Goldsmith From: Michael Fry <mnfry@cox.net> Sent: Monday, January 7, 2019 10:30 PM To: Steve Vaus; Dave Grosch; Caylin Frank; Barry Leonard; John Mullin; Tina White; Donna Goldsmith Subject: Water and Sewer Rate workshop Attachments: sewer deduct meter cities.txt Dear Mayor and members of the City Council, Once again, I am protesting the way Poway charges for sewer service. Poway's winter water use method fails when we have a warm dry winter. Many cities throughout America have adopted a better method. I've attached a list of cities with a total population of 5.5 million that allow sewer deduct water meters. A sewer deduct water meter is a sub meter that measures water used for irrigation or other uses that do not go into the sewer. This water is subtracted from the master water meter and the difference is used to calculate the sewer rate charge. The customer still pays the full water rate charge from the master water meter. Only the sewer rate charge is reduced by the sewer deduct meter. An alternative sub meter is also allowed. It is called a sewer charge meter. It measures water that is 100% headed for the sewer. In my case, my irrigation system connects to my water line before it enters my house. A sewer charge meter on my house would be used to charge me for the sewer rate. My master water meter would be used to charge me for the water commodity rate. You can only have one kind of sewer sub meter. Poway already uses remote reading water meters in a few locations. Sub meters would also be a good use for that remote technology. In 2007, Poway's winter was very warm, and very dry. I measured only 4.66" of rain for that entire season. My wife watered to keep our trees and landscaping alive, and we used extra water. We were switched from Tier 2 to Tier 4, and the 3 year averaging method kept us in Tier 4 for 3 years[ When that happens again, it will cost us an extra $609.66 during the following 3 years. A sewer charge meter will completely solve that problem. Another benefit of using sub meters is simplified billing. There is no need for tiered sewer rates or multi-year averaging. All residential users will pay the same rate ($4.02/unit) as multi -family, schools, churches, mobile home parks, and general commercial users. We will only pay for the water and sewer service we use. It is time for change in Poway's sewer service. Millions of Americans have a choice. We deserve the same. Mike Fry Poway 1 of 6 January 8, 2019, Item # 1 Cities with sewer deduct water meters, State, Population Nashville, TN, 684,410 Columbus, OH, 860,090 Mokena, IL, 18,740 Lower Makefield Township, PA, 32,742 McCandless Township, PA, 28,457 Findlay Township, PA, 5,761 Lebanon, OH, 20,033 Madison, WI, 252,551 Salem, MA, 43,132 Willoughby, OH, 22,268 Manchester, NH, 110,506 Warwick, RI, 80,871 Oklahoma City, OK, 638,367 Enfield, CT, 44,654 Redmond, WA, 62,458 Pickerington, OH, 20,402 Butler County, OH, 368,130 Newton, MA, 85,146 Cleveland, OH, 385,809 Middletown, OH, 48,694 Mascoutah, IL, 8,600 Holden, MA, 18,943 Wichita, KS, 382,368 Akron, OH, 199,110 James City County, VA, 67,009 New Lenox, IL, 26,217 Norwalk, IA, 10,896 Altoona, IA, 18,699 Gahanna, OH, 35,297 Lake County, OH, 230,041 Kent, WA, 92,411 Iowa City, IA, 67,862 Des Moines, IA, 203,433 St Augustine, FL, 14,280 Rochester, MI, 114,011 Mansfield, OH, 47,821 Amherst, OH, 12,021 Bloomington, IN, 78,005 2 of 6 January 8, 2019, Item # 1 Received City CW" Office JAN 0 8 2019 From: Chris and Larry Cruse, 13734 Utopia Rd city OfPoway Poway, CA To: Poway City Council Re: Water and Sewer Rate Workshop, 1/08/2019 Mayor and Council members, We are opposed to any increases to the water and sewer rates. There are several issues that must be addressed first to make sure the rates are proportionate to the costs to provide service to each parcel, and that the rates do not include other costs that are not related to providing water and sewer service. Our particular objections and the reason for those objections are listed below. 1.) Cost allocations. The city has added the costs of almost half of the legislative and administrative department on to the water and sewer fund without providing a study that shows that the administrative and legislative costs are related to providing water and sewer service. In addition, the City is charging the water and sewer funds for millions of dollars in cost allocations to fund regular general service positions without providing a study to show that the costs are related to providing water and sewer service. 2.) The City is not paying the full cost of providing water and sewer service to City properties and facilities. Thus, the water and sewer ratepayers are paying the costs not paid by the City as a tax on their bills. According to a staff document, it wasn't until 2017 that the City began paying some of their own water use costs, but they are only paying for water at the rate of raw water that is supplied to the City. The City is not paying for the costs of treating the water they use in the parks, at the pool, or at any city facility, or for the delivery of the water or for any of the additional costs of water service. The City is not paying for any sewer costs. Prop 218 allows the City to bill us for the costs of water and sewer to our own parcel, but it does not allow that we each pay a proportion of the costs to fill the city pool, or water the parks, or flush the toilets in city buildings. Those costs should come from the general fund of the City, not the water and sewer fund. 3.) In the past, the City has billed the sewer fund for the cost of litigation caused by a faulty sewer map. The lawyer fees and the settlement expenses were added to our sewer bills. The water and sewer ratepayers didn't do anything to deserve paying those costs. It was human error on a map and more human errors or not solving the problem swiftly and fairly that caused the Poway residents to sue because their trees were removed from their private property. The sewer ratepayer should not have been billed for this administrative error. Likewise, if there are administrative issues that lead to a NPDES related suit, none of the legal fees related to that suit should be charged to the water and sewer ratepayers. This is a general fund expense. Just because Lake Poway water may have been polluted in the process 3 of 5 January 8, 2019, Item # 1 doesn't mean the water ratepayers should get dinged for paying the lawyer or any settlement fees. The new proposed rates are structured the same as the rates from this year and are disproportionate to sewer use from each parcel. Single family homeowners should be charged a uniform rate. The city will collect the same amount of money as it does under the current structure, but it will be apportioned fairly, based on the use of each property. 4.) Sewer Consumption Rate. The new proposed rates are structured the same as the rates from this year and are disproportionate to sewer use from each parcel. Single family homeowners should be charged a uniform rate. With a uniform rate, the City will collect the same amount of money as it does under the current structure, but it will be apportioned fairly, based on the use of each property. The sewer rate for single family homes is not a rate. Every other category of sewer user pays a real rate for sewer commodity use. Apartment owners, condo owners, church, schools, businesses, industrial users all pay a real rate for sewer use. All sewer users have a winter water use number which is configured by the city based on previous use, and which the City says is a good approximation of their consumption. All categories of sewer users are charged for their sewer use by multiplying their winter water use number times their sewer rate. All, that is, except for single family homes. They are each assigned a winter water use number but they are not charged a rate. Instead, they are charged a tiered fixed fee for their sewer consumption. When converted to a rate, single family homeowners are currently paying from $28.61 per unit to $2.41 per unit. Unlike most tiered rates, in Poway's sewer charge tiers, those who use the least water end up paying the highest rates, and those who use the most water pay the lowest rates. The rate between tiers is wildly disproportionate to use, as is the rate within the tiers. In Tier 2, all users whose winter water use is between 6-12 units pay the same charge, $50.48. This means that the customer that uses 12 units pays the same consumption charge as a customer whose winter water use is half as much, only 6 units. Surely, it cost the city more to process 12 units of sewage than it does to process 6 units, so the cost is not proportional to the use of each parcel. Apartments and condo owners pay a true rate. They are sending their sewage through the same pipes and to the same facilities as the sewage from single family homes. If one apartment uses 12 units, they will pay twice as much for their sewage as an apartment that uses 6 units. Why are single family rates different? The new proposed rates are structured the same as the rates from this year and are disproportionate to sewer use from each parcel. Single family homeowners should be charged a uniform rate. The city will collect the same amount of money as it does under the current structure, but it will be apportioned fairly, based on the use of each property. 4 of 6 January 8, 2019, Item # 1 As a suggestion, the winter water use number should be a cap. If a resident uses less water than their winter time water use number, they should only be charged for the water they actually use in that period. They can't put more than that in the sewer system in that period. It would be a fairer way to charge for sewer consumption. 5.) Between 20 and 30 years ago, the City borrowed over $8 million from the water and sewer funds that have not been paid back. These were inter -fund loans and should have received annual interest equal to the average of what the city's investment portfolio was making that year. The City used the loaned the money to their redevelopment agency. The State is not allowing the City to tap tax increment funds to pay back the loan at the full interest rate and in a timely manner, so, in turn, the City isn't paying back the water and sewer funds at full interest They plan to pay it back in 15-18 more years and with as little as 0.22 percent interest The money was taken from the water and sewer funds without any public notice or consent. In fact, there is no documentation or a date for b of the 7loans. If the City does not pay back the loans in full, regardless of what the state will allow them to do, then the council members have failed their fiduciary duty to the water and sewer ratepayers. This is both a legal issue and a moral issue. If someone loans money to you and you loan it to someone else, and that person does not repay the loan, don't you still owe the person you borrowed it from? Lending money is always a risk, but remember, the ratepayers did not lend the money, the City took it to balance their budget. They did not make regular payments on the loans for 30 yrs. Waiting another 15-18 yrs and paying interest of less than �/a of 1 percent on some loans is not acceptable. The City needs to make an accounting of the loans with the full interest and pay it back immediately. To prevent something like this from happening again, the city needs to incorporate some policies that keep water and sewer funds separate from other city funds. It doesn't matter so much if the city borrows money from one general fund to another, but borrowing from the water and sewer fund impacts the rates water and sewer users pay. Some of the people who paid higher rates 20 and 30 years ago to finance the loans are never going to get their money back. Some have passed away or moved. Our sewer and water rates should not include costs for balancing the general fund. Water and sewer funds should not be co -mingled with other general funds. After these issues are addressed, and the loaned money is returned to the water and sewer funds, we can consider if there are insufficient money in the water and sewer funds and increased rates are necessary to provide water and sewer service. Sincerely, Chris and Larry r silse� 5of 5 January 8, 2019, Item # 1