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Resolution 2015-47RESOLUTION NO. 2015-47 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY ESTABLISHING THE CITY'S WATER UTILITY SERVICE RATE SCHEDULE EFFECTIVE SEPTEMBER 1, 2015, WITH INCREASES FOR FISCAL YEARS JULY 1, 2016 THROUGH JULY 1, 2019 WHEREAS, notice of the time and place of the meeting, including a general explanation of the matters to be considered, was published in the Gilroy Dispatch, a newspaper of general circulation, on July 17, 2015 and August 7, 2015, in accordance with Government Code Sections 66018 and 6062a; and WHEREAS, on August 17, 2015, the City Council held a public hearing in compliance with Government Code Sections 66018 and 6062a where all interested parties were able to provide testimony; and WHEREAS, on August 3, 2015, the City Council adopted Resolution No. 2015- 39 that established "Guidelines for the Submission and Tabulation of Protests in Connection with Rate Hearings Conducted pursuant to Article XIIID, Section 6 of the California Constitution "; and WHEREAS, pursuant to Section 6 of California Constitution Article XIIID, which is commonly known as Proposition 218, the City gave at least forty -five days' notice of the time and place of the public hearing set before the City Council by causing to be mailed on or about July 2, 2015, said notice, postage prepaid, to all owners of property subject to the City's water utility service rate schedule, and to all the City's water utility service customers on or about July 2, 2015 ( "Mailed Notice "); and WHEREAS, said Mailed Notice stated that a public hearing on this matter would be held on August 17, 2015, at 6:00 p.m., in the City Council chambers at 7351 Rosanna Street, Gilroy, 1 RESOLUTION NO. 2015-47 4850 - 3102 -31420 JH104706083 at which hearing the City Council would hear any and all protests received prior to or at the public hearing in relation to revised water utility service rate schedules and act as required by Resolution No. 2015 -39 and Proposition 218 in regard to said protests; and WHEREAS, all owners of property and customers subject to the City's water utility service rate schedule were thus properly notified pursuant to Proposition 218 and given the opportunity to file with the City Clerk written protests at any time prior to the close of the public hearing; and WHEREAS, pursuant to Proposition 218, if a majority of the owners of property subject to the proposed water utility service rate schedule file valid protests to the proposed schedule, then the City Council may not adopt the new water utility service rate schedule; and WHEREAS, on August 17, 2015, the City Council held a duly noticed public hearing, at which hearing the City Council considered all testimony and evidence, including any written protests previously submitted, and all persons desiring to submit written or oral testimony regarding the City's water utility service rate schedule or otherwise desiring to be heard on the matter were given that opportunity prior to the close of the public hearing; and WHEREAS, this Resolution is exempt from environmental review pursuant to the California Environmental Quality Act ( "CEQA "), pursuant to CEQA Guidelines section 15273, because CEQA does not apply to the establishment, modification or approval of fees, rates or charges by public agencies that the public agency finds are for the purpose of meeting its water utility service operating expenses, financial reserve needs and requirements, and are necessary to maintain water utility service levels within the local agency's existing service areas; and NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Gilroy hereby finds and determines as follows: RESOLUTION NO. 2015 -47 4850 - 3102 -3142A JH104706083 1. On or about July 2, 2015, the City caused to be sent 11,886 Mailed Notices (representing 13,509 properties) to all of the owners of property subject to the City's water utility service rate schedules. By the close of the public hearing on August 17, 2015, the City received a total of 1118 written protests. Therefore, a majority of the owners of properties subject to the City's water utility service rate schedule did not, at or prior to the time fixed for said hearing or during said hearing, file valid protests against the water utility service rates. 2. The City's water utility service rates set forth in the water utility service rate schedule, attached hereto as "Exhibit A" and incorporated herein by this reference, is hereby adopted to become effective on September 1, 2015, and increased on July 1, 2016, thereafter through July 1, 2019. PASSED AND ADOPTED this 17th day of August, 2015, by the following roll call vote: AYES: COUNCILMEMBERS: AULMAN, LEROE- MUNOZ, VELASCO, WOODWARD and GAGE NOES: COUNCILMEMBERS: BRACCO ABSENT: COUNCILMEMBERS: TUCKER APPROVED: � e Donald F. Gage, Mayor ATTEST: Sh Freels, City rk 3 RESOLUTION NO. 2015 -47 4850- 3102 -31420 JH104706083 Exhibit A CITY OF GILROY PUBLIC NOTICE OF PROPOSED RATE INCREASE IN WATER AND WASTEWATER SERVICE RATES THIS NOTICE PROVIDES IMPORTANT INFORMATION ABOUT A PROPOSED INCREASE IN WATER AND WASTEWATER SERVICE RATES AND THE MAJORITY PROTEST PROCESS The City Council of the City of Gilroy will hold a Public Hearing on August 17, 2015, at 6:00 p.m. or as soon thereafter as the item can be heard, in the City of Gilroy City Council Chambers, 7351 Rosanna Street, Gilroy CA, to consider adopting increases to the rates for its water and wastewater services. WATER AND WASTEWATER RATE INCREASES The city is proposing to establish maximum annual increases for the City's water and wastewater service rates over the next five years to ensure the fiscal sustainability of the water and wastewater funds. If adopted, the proposed rate increases will go into effect September 1, 2015 and further increases up to the maximum rates set forth in this notice would go into effect each July 1 thereafter through July 1, 2019. Multi-year rate increases are proposed to provide revenue reliability, which is critical to securing favorable financing rates for water and wastewater improvement projects. The ability to reduce borrowing costs may reduce the impact on rates. The City is proposing to establish the maximum rates for water and wastewater, which may be imposed to: 1. Fund current and projected increases in the costs of operations and maintenance of the water and wastewater systems 2. Fund utility repair, replacement and upgrade costs 3. Comply with state and federal regulatory requirements Each year, the City will review its budget to determine if the maximum authorized rates are necessary. If the projected costs are less than those anticipated in the proposed rates, the City will charge a lower rate. The City will keep the community apprised of the status of the City's water and wastewater revenue needs over the next five years and the City will provide written notice of any water and wastewater rate adjustments not less than 30 days before the effective date of the adjustment. WASTEWATER RATES Wastewater revenues pay for the operations and maintenance of the collection system (pipes and pump stations that transport the wastewater from homes and businesses to the wastewater treatment plant) and the administrative and regulatory costs to run the system. The plant is operated by the South County Regional Wastewater Authority (SCRWA), a partnership of the City of Gilroy and the City of Morgan Hill. A portion of the wastewater revenues collected by the City is used for payment to SCRWA. In addition, wastewater rates support infrastructure investments, such as necessary system improvements to meet new regulations. WASTEWATER RATE METHODOLOGY The residential wastewater service rates consist of fixed monthly charges. Residential Faced Monthly Charge Current* 9/1/2015 7/1/2016 % Increase 7/1/2018 7/1/2019 5% Single Family $44.42 $44.42 $46.64 Mufti -Family 31.55 31.55 33.13 The non - residential wastewater service rates are comprised of two components: 1. A variable monthly charge with four wastewater strength categories. Non - Residential Variable Monthly Charge ($/1000 Gallons) Current' 911/2015 7/1/2016 % Increase 7/1/2018 7/1/2019 5% Low Strength $6.79 -7.45 $7.06 $7.41 Domestic Strength 8.33 -8.81 8.77 9.21 Medium Strength 10.24 -13.52 11.50 12.08 High Strength 11.39 -16.91 17.74 18.63 'Rates effective 7/1/15 'Rates effective 7/1/15 2. A fixed monthly charge for non - residential wastewater monitoring and pretreatment program charges. Non - Residential nitoring and retreatment program charges Current' 9/1/2015 7/1/2016 7/1/2017 7/1/2018 7/1/2019 % increase 5% 3% 3% 3% SignificantlCategorical $98.71 $210.00 $220.50 $227.12 $233.93 $240.95 Non-Significant/Categorical 98.71 83.00 87.15 89.76 92.45 95.22 Other Non - Residential 12.06 10.00 10.50 10.82 11.14 11.47 Rates etromwe 7 /1nb WATER RATES The City of Gilroy last raised water rates in 2009. Water revenues pay for the operations and maintenance of infrastructure required to deliver water to the inhabitants of the City of Gilroy. A portion of these rates fund a passthrough charge to the Santa Clara Valley Water District (SCVWD) for ground water management. As the drought continues the new rates will fund impacts of the ongoing drought, such as increased costs for supplemental supplies, conservation related programs and reduced revenues from decreased water sales. WATER RATES METHODOLOGY The proposed water rates consist of a foxed monthly charge dependent on meter size, and a tiered volumetric rate based on water consumption and elevation zone. CONSERVATION -BASED WATER CONSUMPTION RATES Under the govemors executive order, the City needs to reduce water consumption from 2013 levels by 24 %. Conservation goals established by SCVWD mandate 30% reduction. The City is using a three - pronged approach in achieving these goals: 1) conservation education; 2) use of conservation -based water rates; and 3) water rebate programs. Exhibit A SCVWD PASSTHROUGH RATE INCREASE FOR GROUNDWATER One hundred percent of the City's water is pumped from the ground. The SCVWD charges a ground water management fee to the City of Gilroy based on the volume of groundwater pumped. In the event that the SCVWD imposes additional charges associated with the pumping of groundwater, the City will implement a passthrough adjustment to customers' bills nn PartiPr than thiriv (301 days after the adjustment has been enacted by the SCVWD and noticed to all City customers. Water Base Charges' Monthly Charges Current 911/2015 7/1/2018 7/1/2017 7/1/2018 7/1/2019 % Increase $4.39 Zone 2 20% 10% 10% 10% Meter Size 4.93 Zone 3 2.38 -6.16 3.47 3.91 4.37 %inch $6.02 $7.22 $8.66 $9.53 $10.48 $11.53 1 inch 6.79 12.04 14.45 15.90 17.49 19.24 1 % inch 16.98 24.08 28.90 31.79 34.97 38.47 2 inch 27.15 38.53 46.24 50.86 55.95 61.55 3 inch 74.88 72.24 86.69 95.36 104.90 115.39 4inch 226.91 120.40 144.48 158.93 174.82 192.30 6 inch 460.10 240.80 288.96 317.86 349.65 384.62 8 inch 613.48 385.28 462.34 508.57 559.43 615.37 10 inch 766.85 553.84 1 664.61 731.07 804.18 1 884.60 'Beginning 9/1/15, base charges aligned with American water woncs Association capaary raaos. Amounts are wrm new capacity rauoz Incas cv- Water Volumetric Charge(Rate/1,000 Gallons) Monthly Charges Current" 1 9/1/2015 1 7/1/2016 1 711/2017 7/1/2018 7/1/2019 Tier 1 0- 30,000 Gallons Zone 1 $.88-4.65 $2.39 $2.78 $3.24 $3.77 $4.39 Zone 2 1.62 -5.40 2.91 3.33 3.79 4.32 4.93 Zone 3 2.38 -6.16 3.47 3.91 4.37 4.90 5.52 Tier 2 30,000+ Gallons Zone 1 $2.33 -6.78 $2.88 $3.29 $3.76 $4.31 $4.93 Zone 2 3.07 -7.51 3.40 3.84 4.31 4.86 5.47 Zone 3 3.83 -828 3.96 4.42 4.89 5.44 6.06 'Rates effective 7/1/2015 Consistent with current rates, senior citizens that qualify for PGBE's Care Program may apply for a senior low income discount that gives them an exemption for the monthly Base charge and first 5,000 gallons per month. PUBLIC NOTICE AND MAJORITY PROTEST PROCESS In 1996, California voters adopted Proposition 218. Among other things, Proposition 218 requires a specific process for cities to impose or increase certain types of fees. In particular, the provisions of Proposition 218 set forth in Article XIIID of the California Constitution provide that certain types of "Property Related Fees" are subject to a "majority protest" process. This Notice is a part of that process. The City has determined that its water and wastewater service charges are "Property Related Fees" under Proposition 218. You are being provided with this notice as the identified owner of real property in the City of Gilroy subject to this "property related fee ". As a property owner you have a right to submit a written protest to the proposed rate change. PUBLIC HEARING AND PROTEST PROCEDURES The City Council will hold a Public Hearing on the proposed increases to the water and wastewater fees on: Monday, August 17, 2015 6:00 p.m., or as soon thereafter as the item can be heard, in Council Chambers at City Hall 7351 Rosanna Street Gilroy, California 95020 Under Proposition 218, only oroperty owners may protest the proposed rates. All protests must be in writing and include an original signature, and must be submitted by mail or in person to the City Clerk at 7351 Rosanna Street, Gilroy, California, 95020 -6197 or at the Public Hearing (date and time noted above), provided they are received prior to the conclusion of the public comment portion of the Public Hearing- Please identify on the front of the envelope for any protest, whether mailed or submitted in person to the City Clerk, Attn: Public Hearing on Rate Increases. Any protest submitted via e-mail or other electronic means will not be accepted. Any written protest must: (1) state that the identified property owner is in opposition to the proposed rate increase(s); (2) identify the specific rate increase(s) for which the protest is being submitted; (3) provide the location of the identified parcel (by assessor's parcel number, street address, or customer account); (4) provide written evidence (example: current copy of City Services Bill) that the person is the property owner, if the person was not shown on Santa Clara County's last equalized assessment roll as a property owner; and (5) include the name and signature of the property owner submitting the protest At the Public Hearing, the City Council will hear and consider all written and oral protests to the proposed rate increases. Oral comments at the Public Hearing, however, will not qualify as formal protests unless accompanied by a written protest. At the conclusion of the Public Hearing, the City Council will consider adoption of the resolution authorizing the rate increases to the water and wastewater service fees as described herein. If a majority of property owners of the identified parcels upon which the rates are proposed to be imposed submit valid written protests against the proposed rate increases, the City Council shall not adopt the rate increase(s) which are subject to the majority protest. If you do not want to protest the proposed rates, you do not need to take any action. WHEN WOULD NEW RATES BE EFFECTIVE? If a majority of the affected property owners submit protests, the proposed rate changes will not be imposed; otherwise following adoption by the City Council they will become effective on September 1, 2015. If you have any questions regarding this notice or how it may impact your properly, visit www.citvofalroy.org or call Patricia Pretell at (408) 846 -0420 Monday through Friday from 8 a.m. to 5 p.m. This notice is sent pursuant to Article X111 A Section 6, Subdivision (a) of the Califomia Constitution and Gilroy City Code Section 17A.6. I, SHAWNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2015 -47 is an original resolution, or true and correct copy of a city Resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council held on the 17`x' day of August, 2015 at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this 18`h day of August, 2015. Shawna Freels, MMC City Clerk of the City of Gilroy (Seal)