City Council Meeting: January 13, 2009

Agenda Item: 1-F

To:                   Mayor and City Council

From:              Lee E. Swain, Director of Public Works

Subject:          Revision to Fire Line Meter Water Rates

 

Recommended Action

Staff recommends that City Council adopt a resolution revising the water fire line meter service charge.

 

Executive Summary

On July 8, 2008, City Council adopted a water rate resolution establishing revised water rates and a new rate structure effective August 1, 2008.   The resolution includes rates and charges for fire line meters.  It was recently discovered that the service charges in the fire line meter rates included in the report were incorrect.  There is no financial impact.  The error does not affect revenue estimates or the calculation of other water rates.

 

Background

Fire line meters are installed in water service lines supplying water dedicated to fire protection systems (fire sprinklers, private hydrants, etc.) in commercial, and in limited residential, applications.  Unless there has been a fire on the premises, month to month usage is zero.  Commodity charges apply only to water used during a fire.  Nevertheless, these meters are read and maintained on the same basis and frequency as all other domestic and commercial meters, and a service charge is billed independent of usage.

 

For this reason, the rate structure for fire service meters was not changed to a commodity-only structure as were all other domestic water meters in the rate adoption of July 2008.  The rate structure for fire service meters continues to comprise a fixed service charge plus a commodity charge.

 

On May 13, 2008, Council approved a five year schedule of water and wastewater water rate increases.  On July 8, 2008, City Council held a public hearing and adopted Resolution No. 10321 CCS revising water rates and water service charges, effective August 1, 2008.  Section 5 in the resolution established a fixed bi-monthly service charge for fire line meters.  The fire line service charges approved pursuant to Resolution 10321, along with the previous charges, are stated in Table 1 below.

             

TABLE 1

 Meter size               Previous charges                         Per Resolution 10321    

            2”                        $34.10                                             $62.67                       

            3”                        $58.66                                             $111.63                     

            4”                        $93.76                                             $181.60                     

            6”                        $181.47                                           $356.48                     

            8”                        $286.73                                           $566.37                     

            10”                     $409.54                                           $811.23         

 

 

Discussion

The first bills including the new charges for fire services were received by customers in November 2008.  After numerous calls were received inquiring about the magnitude of the service charge increase, the rate consultant was contacted to ascertain the justification for such a large increase, as it was not contained in the body of the final report.  It was discovered that an error had been made in the final report in the table indicating the service charges for fire lines.  A letter was mailed to customers on December 12, 2008 explaining the error and offering payment options.  The previous charges and the correct charges, incorporating the 11% increase approved by Council, are indicated in Table 2 below.

TABLE 2

Previous Charges                         Correct Charges as of August 1, 2008

2”                     $34.10                                                            $37.85

3”                     $58.66                                                            $65.12

4”                     $93.76                                                            $104.07

6”                     $181.47                                                          $201.44

8”                     $286.73                                                          $318.28

10”                  $409.54                                                          $454.60

 

The attached resolution establishes the correct schedule for charges for fire service lines.  Following Council approval, customer invoices will be adjusted to reflect the correct rates.

 

Financial Impacts & Budget Actions

There are no budget actions or financial impacts resulting from the revision of the fire line meter service charge.  The revenue budget and the rate analysis were prepared with the Council approved 11% increase.

 

Prepared by:

Gil Borboa, Water Resources Manager

 

Attachment:                Resolution

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Lee E. Swain

Director, Department of Public Works

 

P. Lamont Ewell

City Manager