Item 7 - Rebate of FY 1995-96 Sewer Charges
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AGENDA REPORT SUMMARY
TO: Honorable Mayor and Members of the City Council
FROM: James l. Bowersox, City Man~ '
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INITIATED BY: John D. Fitch, Assistant City Manager~1 ~
James R. Williams, Director of Public rvices r-
Peggy A. Stewart, Director of Administrative S ice~.",
DATE: December 19, 1995
SUBJECf: Rebate of FY 1995-96 Sewer Charges
ABSTRACf
The San Diego Metropolitan Wastewater Department (Metro) has rebated the following
amounts to the City of Poway: $694,000 for overbillings in FY 1994-95, $197,000 for
inaccurate calculations from multiple meters of San Diego wastewater entering Poway's
collector system, and $109,527 for overcharges in FY 1993 for front-funded expenses for
capital projects. It is recommended that these rebates be passed along to Poway
customers as a one-time credit against their sewer bills.
ENVIRONMENTAL REVIEW
Environmental review is not required for this agenda item according to CEQA guidelines.
FlSCAL IMPACf
The City will continue to generate sufficient revenues in FY 1995-96 through the
collection of sewer fees to cover expenses. The rebates from Metro Sewer will result
in a two-month service credit equivalent to $45.54 for each EDU (equivalent dwelling
unit) of service.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None
RECOMMENDATION
It is recommended that the City Council authorize staff to adjust water and sewer bills
for the January-February cycles with a credit for two months of free service and to
place additional revenue received into the rate stabilization fund for use in
minimizing future years rate increases.
ACfION
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AGENDA REPORT
CITY OF POW A Y
TO: Honorable Mayor and Members of the City Council
FROM: James L. Bowersox, City Man~ ~
-:\
INITIATED BY: John D. Fitch, Assistant City Manager~
James R. Williams, Director of Public rvices
Peggy A. Stewart, Director of Administrative Services
DATE: December 19, 1995
SUBJECT: Rebate of FY 1995-96 Sewer Charges
BACKGROUND
Poway collects sewer (wastewater) from its customers and conveys the sewage to City
of San Diego trunk lines and pump station. San Diego measures flow from Poway (as
we do for comparison and verification of flows), then transports the wastewater to
their Point Loma facility for treatment and ultimate disposal. The primary -
component for the expenses charged by the City of San Diego is for the treatment of
the wastewater and disposal of the effluent. These expenses are billed to us by San
Diego's Metropolitan Wastewater Department (Metro).
FINDINGS
Public Services and Administrative Services staff of the City of Poway have been
working diligently with the City of San Diego and their Metropolitan Wastewater and
Utilities Department to monitor budget projections and actual expenditures as well
as to monitor anticipated flow vs. actual flow through the Metro system.
We have presented historical evidence to them of the actual annual flow of
wastewater from Poway, and they have adjusted their projections downward by almost
15% to amounts more consistent with reality. Additionally, legislation passed at
the national level and waivers 9ranted by the EPA for the San Diego wastewater
system means that the Metropolitan Wastewater Department can more realistically
execute their financing and capital improvement plans.
San Diego has recently determined that they overbilled the City of Poway by $694,000
in FY 1994-95. With some of these savings, Poway has fully paid all past Metro-
funded costs for capital improvements. Full payment of this debt allowed us to
avoid over $36,000 of interest charges. Our current fiscal year budget included
$333,000.43 to pay this obligation. The balance of last year's savin9s has been
ACTION:
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Agenda Report
Oecember 19, 1995
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applied as a credit against our first quarter billing from Metro. We have also
reconciled with San Diego past charges already paid that we felt included
overbilling due to their inaccurate calculations from the multiple meters of
San Diego wastewater entering Poway's collector system. Metro has agreed with our
findings and committed to giving us an additional credit of S197,OOO against our
second year FY 1995-96 bill. Finally, an audit completed in August 1995 by the City
of San Diego has also determined that they overcharged for some of the "through FY
1993 front-funded" expenses. We will receive S109,527 as a credit against our FY
1996 second-quarter bill.
Altogether we now estimate that at current Poway sewer rates of $45.54 per EDU for
each two-month billing cycle, we will have approximately $959,000 more in revenues
than will be needed to pay FY 1995-96 bills. At latest count, we are collecting
wastewater fees for 16,297 EDU's. Therefore, we recommend that the rebates from San
Diego Metro be passed along to the City's sewer customers in the form of a one-time
credit equivalent to two months of sewer service, or $45.54 per EDU. Staff wi 11 be
able to make these credit adjustments to the January-February billing cycles. Th.;s
will return to Poway sewer customers $742,000 of the amount previously budgeted for
this fiscal year. It is further recommended that the balance be placed into the
sewer rate stabilization fund. This fund is used as a cash reserve to partially
offset future rate increases from San Diego's Metropolitan and Utilities
Departments.
This rebate will not negatively impact the City's ability to minimize future sewer
rate increases from San Diego Metro. It is anticipated that at the end of FY
1995-96, the City will have approximately $2.8 million in its rate stabilization
fund. Based on information from San Diego Metro about their future operation,
maintenance and capital improvement plans over the next eight years, this amount
should be adequate to keep Poway rate increases at minimum levels over the same time
period.
ENVIRONMENTAL REVIEW
Environmental review is not required for this agenda item according to CEQA
guidelines.
FISCAL IMPACT
The City will continue to generate sufficient revenues in FY 1995-96 through the
collection of sewer fees to cover expenses. The rebates from Metro Sewer will
result in a two-month service credit equivalent to $45.54 for each EDU (equivalent
dwelling unit) of service.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
None
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Agenda Report
December 19, 1995
Page 3
RECOMMENDATION
It is recommended that the City Council authorize staff to adjust water and sewer
bills for the January-February cycles with a credit for two months of free service
and to place additional revenue received into the rate stabilization fund for use in
minimizing future years rate increases.
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