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
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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
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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
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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)