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HomeMy WebLinkAbout02. Sanitary Sewer Master Plan and Rate StudyTO: RECOMMENDATION That the City Council: BACKGROUND AGENDA MEMO Mayor and Members of the City Council FROM: Office of the City Manager By: Brian Ragland, Director of Public Works SUBJECT: SANITARY SEWER MASTER PLAN AND RATE STUDY DATE: January 12, 2010 1) Adopt a resolution of the City Council of the City of Downey approving and adopting the City's Sanitary Sewer Master Plan and subparts thereof including the City's Sewer System Management Plan and; 2) Adopt a resolution of the City Council of the City of Downey setting the time and place for a public hearing (March 23, 2010) on establishing rates for sanitary sewer service and authorizing staff to notify property owners and rate payers. On May 2, 2006 the State Water Resources Control Board (SWRCB) adopted Order No. 2006 -0003 (Sanitary Sewer Order), a General Waste Discharge Requirement (WDR) for Sanitary Sewer Systems. The goal of the Sanitary Sewer Order is to provide a consistent statewide approach for reducing Sanitary Sewer Overflows (SSOs). To help achieve this goal, the Sanitary Sewer Order requires public agencies that own or operate more than one mile of sewer pipe to develop, implement, and approve via public hearing, Sewer System Management Plans (SSMPs). The Sanitary Sewer Order specifies mandatory elements that must be included in the SSMPs. As the City of Downey's (City or Downey) sewer collection system is comprised of approximately 200 miles of sewer mains and associated facilities, the City submitted an application or Notice of Intent (NOI) for coverage under the Sanitary Sewer Order to the SWRCB. The City utilized the SSMP framework to prepare a Sanitary Sewer Master Plan (Master Plan) that included the preparation of an SSMP satisfying the requirements of the SWRCB Sanitary Sewer Order, while also providing a full assessment of the City's current programs for the planning, management, and operation and maintenance of its sanitary sewer system. The assessment resulted in recommendations for improvements to the City's current sewer - related programs, staffing levels, and capital improvement program. A Sanitary Sewer Financial Plan (Financial Plan) and proposed sewer rate structure were subsequently developed to provide the funding to support the necessary operations, management, and improvements as required by the Master Plan and SSMP. This proposed rate structure was presented to Council (along with findings from the SSMP and Master Plan) via a workshop held on October 6, 2009. In response to comments received from members of City Council, as well as input from City CITY OF DOWNEY, CALIFORNIA Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 2 management and further research of neighboring cities and agencies, the proposed sewer rate structure was modified to pay for the needs of the sewer system as identified and required by the Master Plan and SSMP. To assist staff in development of the Master Plan, the City retained RMC Water Environment, Inc. (RMC), with Larson Consulting and Bartle Wells Associates (Bartle Wells) as subconsultants. The Master Plan consists of the following six documents with the SSMP being the lead document and all others providing support for completion of the SSMP. • SSMP • Sanitary Sewer Rehabilitation and Replacement Plan • System Evaluation and Capacity Assurance Plan • Lift Station Condition and Replacement Evaluations • Wastewater Facilities Design Guidelines, Policies, and Procedures • Sanitary Sewer Financial Plan Due to the size of the documents, the SSMP was configured as a stand -alone document fulfilling the requirements of the Sanitary Sewer Order with references made to the other documents within the Master Plan where necessary. DISCUSSION MASTER PLAN /SSMP Key tasks completed under this project included: • Analyzing and making recommendations regarding the City's legal authority (i.e. codes, standards, other requirements) for enforcing the requirements of the Statewide WDR • Developing an Operation and Maintenance (O &M) Program including a visual and video inspection program and written training program • Developing design and performance provisions and standards including technical specifications, standard drawings, and standards of practice • Reviewing /updating the City's existing Sewage System Maintenance, Overflow and Spill Prevention Program • Preparing a fat, oils, and grease (FOG) source control program • Developing a sanitary sewer System Evaluation and Capacity Assessment Plan (SECAP) that includes the hydraulic modeling of the City's sanitary sewer system Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 3 • Developing written protocols for maintaining, monitoring, and updating the SSMP • Developing a Capital Improvement Program (CIP) and schedule for addressing hydraulic /structural deficiencies that must be addressed in future budgets • Developing methodologies for evaluating the effectiveness of the SSMP and City compliance with the WDR over time • Preparing a public communication program that describes the steps to be taken by the City during development, implementation, and performance of the SSMP • Developing a financial plan and rate structure recommendations to address personnel needs and costs, operating costs, CIP project costs, equipment requirements, on -going video inspection activities, and other related WDR/SSO requirements. These tasks included video assessment of 50,000 feet of sewer pipe representing approximately 5 percent of the City's entire sewer system which totals 293 miles. The sewers selected for inspection included pipes of all ages, sizes, and locations throughout the City's system. The video inspections were performed by a subcontractor and identified areas where pipelines have sustained structural damage, root intrusion, have obstructions, and /or require more frequent cleaning. An industry- standard system for categorizing and rating structural defects such as cracks, fractures, broken pipes, offset joints, etc. was utilized to characterize and set priorities for developing a cleaning, repair, and replacement schedule for the problem areas inspected. Because the 50,000 feet of inspected sewers included a distribution of pipes built in various decades, the findings of this initial condition assessment provided a solid basis for assessing the overall condition of the sewer system. Older pipes were found to have greater defects than newer pipes, and the findings of the initial inspections (percentages requiring either repair or rehabilitation /replacement) were generalized by age of pipe and extrapolated to the entire system. Inspection of the rest of the sewer system was assumed to occur over a five -year period, with the oldest sewers to be inspected first. Based on the results of the initial inspection, year -by -year estimates were made for the next 10 years of the amount of sewer to be inspected, cleaned, repaired, rehabilitated /replaced, and the resulting amount of re- inspection work needed in future years to establish a 10 -year Capital Improvement Program. Recommendations resulting from these tasks include new procedures for O &M of the City's system which are needed to satisfy Master Plan and SSMP requirements including minimizing the risk of sewer overflows, mitigating impacts of any overflows, improving maintenance efficiency, and shifting from a reactive to a more proactive mode of operation. Based on results of the Master Plan /SSMP, the City must increase its sewer inspection, maintenance, and repair /replacement activities. The activities include: Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 4 • A system -wide sewer cleaning program with a frequency of three years (58 miles per year) • An expanded "hot spot" cleaning program for more frequent cleaning of problem sewers (19 miles per year) • An expanded chemical root control program for 4.5 miles of sewer main per year • Video inspect approximately 37 miles of sewer pipe per year for first five years • Video re- inspect suspect areas requiring follow -up; approximately 12 miles of sewer pipe per year for the second five years thereafter • Replace sewer lift stations • Rehabilitate /replace approximately 0.6 miles of sewer pipe per year • Perform approximately 23 spot repairs per year • Purchase and implement a computer software system for sewer maintenance and management, which will improve efficiency and allow the maintenance program to be refined in the future based on the findings of video inspections and maintenance activities • Purchase of trailer- mounted video inspection and jetting unit • Purchase of sanitary sewer overflow /spill response equipment including a portable pump and piping • Replacement of existing truck - mounted combination cleaning unit in 5 years • Additional management, technical, and safety training Anticipated staffing necessary to implement the expanded O &M program would be approximately 3.2 full -time field staff and 0.4 office staff. This results in approximately 2 additional sewer staff as the City currently dedicates an estimated 1.5 field staff to sewer - related activities. Proposed staffing assumes video inspections and chemical root control work will be contracted out (non -City staff). To support these activities over the next ten years, approximately $16 million of total revenue must be generated. FINANANCIAL PLAN AND RATE STUDY The City currently has a fixed monthly sewer charge based on water meter size that has only been increased twice (1997 and 1985) in the last 25 years. As a result, the City's Sewer and Storm Drain Fund (which also includes street sweeping, enforcement, and storm water engineering in addition to sewer system expenses) is not self- sufficient and requires annual transfers from the City's General and Water Funds. The City's goal is to create a new self- supporting Sewer Fund that includes only sewer - related revenue and expenses. Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 5 Bartle Wells, under subcontract to RMC, prepared a Financial Plan for the City that recommended a proposed sewer rate structure and increased sewer rates sufficient to cover the $1.6 million per year required to fund the recommended sewer program developed in the Master Plan /SSMP and to maintain a minimum reserve of 6 months of operating expenses. On October 6, 2009, a workshop presenting the recommended Master Plan and sewer rate structure was held. As a result of comments provided by Council and further review by staff and Bartle Wells, the proposed sewer rate structure was modified to align cost shares paid by each customer class more closely with their sewer flow contributions. The newly proposed rate structure results in a fair and equitable basis by which customers are charged for sanitary sewer service. The following sections of the Master Plan have been updated to reflect the latest modifications to the Financial Plan and proposed sewer rate structure and have been attached for replacement of corresponding sections in the Master Plan previously provided: Sanitary Sewer Master Plan Binder and Spine Covers, Executive Summary, and Financial Plan. Some of the key aspects of the Financial Plan prepared by Bartle Wells are: • Establishment of a self- sustaining Sewer Fund used to pay for future sanitary sewer O &M and Capital costs identified in the Master Plan. • New sewer charge has two components: 1) fixed bi- monthly charge component based on the number of dwelling units, meter size, or fixed according to customer class and 2) a variable bi- monthly charge component based on metered bi- monthly water use. • Proposed sewer rates are set so that the fixed sewer charge generates 60% of the revenue and the variable charge generates 40 %. These percentages balance the need for stable revenue with the desire to have the charges reflect actual sewer usage as well as provide an incentive for water conservation. • New sewer rates are assumed to begin no later than July 1, 2010. Approximately 88 percent of all sewer accounts are Single Family Residential (SFR). The fixed bi- monthly sewer charge for an SFR account under the proposed sewer rate structure would be $5.48. The variable charge would be $0.10 per water consumption unit (CU or hundred cubic feet (hcf) of bi- monthly water use). Based on average bi- monthly water usage of 35 CU, the typical SFR customer with a 5/8 -inch meter (71 percent of all SFR accounts) would pay a total (fixed plus variable charges) of $8.98 bi- monthly. SFR accounts with 5/8 -inch meters currently pay $1.90 bi- monthly under the present rate structure. Even with the increase, the typical Downey sewer bill would remain one of the lowest in the Southern California area for sewer systems of comparable size as provided in the table below. Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 6 FY 10/11 - COMPARISON OF BI- MONTHLY SEWER BILLS FOR SFR CUSTOMERS SEWER AGENCY BI- MONTHLY SEWER BILL' 2 City of Cerritos $0.58 City of Downey (existing) $1.90 City of Huntington Park $5.25 City of Downey (proposed) $8.98 City of Whittier $11.62 City of South Gate $11.90 City of Lynwood $15.58 City of Long Beach $23.69 City of Compton $28.71 NOTES: 1. Bills assume 5/8 -inch SFR meter and bimonthly water use of 35 hcf 2. Bills only account for sewer collection service; wastewater treatment service is not included, as this service is handled through the County Sanitation Districts of Los Angeles and is exclusive of service provided by City agencies 3. Cities of Huntington Park and Whittier are currently planning rate increases for FY 10/11; Such rate increases are not accounted for in the sample sewer bills provided as these increases have not yet been finalized The following tables include a comparison of bi- monthly sewer bills for Multi- family Residential (MFR) and Commercial customers under the proposed sewer rate structure. FY 10/11 - COMPARISON OF BI- MONTHLY SEWER BILLS FOR MFR CUSTOMERS SEWER AGENCY BI- MONTHLY SEWER BILL' 2 City of Downey (existing) $1.90 City of Cerritos $2.15 City of Lynwood $15.58 City of Huntington Park $19.50 City of Downey (proposed) $26.12 City of Whittier $43.16 City of South Gate $44.20 City of Long Beach $52.47 City of Compton $82.19 NOTES: 1. Bills assume 3/4 -inch MFR meter, 4 units, and bimonthly water use of 130 hcf 2. Bills only account for sewer collection service; wastewater treatment service is not included, as this service is handled through the County Sanitation Districts of Los Angeles and is exclusive of service provided by City agencies 3. Cities of Huntington Park and Whittier are currently planning rate increases for FY 10/11; Such rate increases are not accounted for in the sample sewer bills provided as these increases have not yet been finalized Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 7 FY 10/11 - COMPARISON OF BI- MONTHLY SEWER BILLS FOR COMMERCIAL CUSTOMERS SEWER AGENCY BI- MONTHLY SEWER BILL' 2 City of Cerritos $2.48 City of Downey (existing) $3.65 City of Huntington Park $22.50 City of Downey (proposed) $27.94 City of South Gate $51.00 City of Whittier $65.85 City of Lynwood $77.88 City of Long Beach $83.25 City of Compton $93.45 NOTES: 1. Bills assume 1 -1/2 -inch Commercial meter and bimonthly water use of 150 hcf 2. Bills only account for sewer collection service; wastewater treatment service is not included, as this service is handled through the County Sanitation Districts of Los Angeles and is exclusive of service provided by City agencies 3. Cities of Huntington Park and Whittier are currently planning rate increases for FY 10/11; Such rate increases are not accounted for in the sample sewer bills provided as these increases have not yet been finalized PROPOSITION 218 California Proposition 218 requires a majority protest in order to impose or increase "property related fees ", including fees for water, sewer and trash services provided by local governments. Sewer rate increases do not require an affirmative majority vote, but rather a majority of ratepayers must submit written protests against the sewer rate increase to prevent its passage. The steps the City must take under Proposition 218 to successfully increase its sewer rates are as follows: 1) Adopt resolution establishing the date of the public hearing and authorizing staff to notify rate payers. 2) Mail out a Prop 218 notice to property owners /rate payers informing them of the proposed rate increase and the date /time /location of the public hearing (no less than 45 days after the Prop 218 notice is mailed out). The Prop 218 notice needs to instruct rate payers how they can lodge a written protest against the proposed rate increases. 3) Monitor and tabulate whatever protests are filed during the approximately 1.5 months between the Prop 218 notice being sent out and the public hearing. 4) Hold a public hearing on the rate increases and, assuming the number of protests received is less than 50% of the property owners /rate payers, Council can vote to pass the new rates. Mayor and Members of the City Council Sanitary Sewer Master Plan and Rate Study January 12, 2010 Page 8 FINANCIAL IMPACT The sewer fees currently in place do not provide adequate funding to pay for the cost of the services provided to maintain and replace the system as well as implement the requirements under the RWQCB's Sanitary Sewer Order. These costs are currently paid for almost entirely out of the General and Water Funds with an insignificant amount funded via the existing sewer fees. Establishment of a self- supporting Sewer Fund will free up a total of approximately $0.5 million - $1 million annually that would otherwise be paid for via the General and Water Funds. Failure to implement the SSMP according to the SWRCB Sanitary Sewer Order, could lead to fines by the SWRCB and third party lawsuits for failure to comply. Mailing of Proposition 218 notices will cost approximately $25,000 which will be paid for out of the existing FY 09/10 Sewer operating budget. Att.: Resolution - Sanitary Sewer Master Plan and SSMP Resolution - Public Hearing and Proposition 218 Notice Sanitary Sewer Master Plan Binder and Spine Covers (Revised January, 2010) Executive Surnmary (Revised January, 2010) Financial Plan (Revised January, 2010) RESOLUTION NO. 10- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY APPROVING AND ADOPTING THE CITY'S SANITARY SEWER MASTER PLAN AND SUBPARTS THEREOF INCLUDING THE CITY'S SEWER SYSTEM MANAGEMENT PLAN WHEREAS, on May 2, 2006 the State Water Resources Control Board (SWRCB) adopted Order No. 2006 -0003 (Sanitary Sewer Order), a General Waste Discharge Requirement (WDR) for Sanitary Sewer Systems; and WHEREAS, the purpose of the Sanitary Sewer Order is to develop a regulatory mechanism to provide a consistent statewide approach for reducing Sanitary Sewer Overflows (SSOs); and WHEREAS, the Sanitary Sewer Order requires public agencies that own or operate sanitary sewer collection systems comprised of more than one mile of sewer pipe to develop, implement, and approve by their governing board, via public meeting, Sewer System Management Plans (SSMPs); and WHEREAS, the City of Downey (City) owns and maintains a sanitary sewer collection system comprised of approximately 200 miles of sanitary sewer mains and associated facilities; and WHEREAS, the City submitted an application or Notice of Intent (NOD for coverage under the Sanitary Sewer Order to the SWRCB; and WHEREAS, the Sanitary Sewer Order specifies mandatory elements that must be included in SSMPs; and WHEREAS, the City used the SSMP framework to assess its current programs for the planning, management, and operation and maintenance of its sanitary sewer system to develop a Sanitary Sewer Master Plan (Master Plan); and WHEREAS, the Master Plan consists of the following six documents with the SSMP being the lead document and all others providing support for completion of the SSMP; 1) Sewer System Management Plan (SSMP), 2) Sewer Rehabilitation and Replacement Plan, 3) System Evaluation and Capacity Assurance Plan, 4) Lift Station Condition and Replacement Evaluations, 5) Wastewater Facilities Design Guidelines, Policies, and Procedures, 6) Sewer Financial Plan; and WHEREAS, the SSMP is a "living" document that will require modification to reflect changing conditions including: maintenance program staffing, financial resources, and planning; and WHEREAS, the Sanitary Sewer Order requires that the City provide opportunity for public input into the development of the SSMP; and WHEREAS, the City has, in compliance with the Sanitary Sewer Order, prepared and made available for review, draft copies of the SSMP and entire Master Plan; and WHEREAS, a properly noticed public meeting, regarding said Master Plan including SSMP, was held by the City Council on January 12, 2010. RESOLUTION NO. 10- PAGE 2 ATTEST: NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The Master Plan and subparts thereof including the SSNIP are hereby approved, adopted, and ordered filed with the City Clerk; SECTION 2. The Public Works Director or his designee is hereby authorized and directed to implement the Master Plan and all elements of the SSMP; SECTION 3. The Public Works Director or his designee is hereby authorized to modify elements of the SSMP from time to time as may be necessary to reflect changing conditions; SECTION 4. The Public Works Director or his designee is hereby authorized and directed to certify completion of the SSMP with the State Water Resources Control Board; SECTION 5. The City Clerk shall certify to the adoption of this Resolution. APPROVED AND ADOPTED this day of , 2010. KATHLEEN L. MIDSTOKKE, City Clerk I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a regular meeting held on the day of , 2010, by the following vote, to wit: AYES: Council Members: NOES: Council Members: ABSENT: Council Members: ABSTAIN: Council Members: ANNE M. BAYER, Mayor KATHLEEN L. MIDSTOKKE, City Clerk RESOLUTION NO. 10- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY SETTING THE TIME AND PLACE FOR A PUBLIC HEARING ON ESTABLISHING RATES FOR SANITARY SEWER SERVICE AND AUTHORIZING STAFF TO NOTIFY PROPERTY OWNERS AND RATE PAYERS WHEREAS, Proposition 218, the "Right To Vote On Taxes Act ", was passed by California voters in 1996 adding Articles XIII C and D to the California Constitution; and WHEREAS, Proposition 218 protects taxpayers by limiting the methods by which local governments exact revenue from taxpayers without their consent; and WHEREAS, increases in property - related fees and charges, including sanitary sewer, are subject to the requirements of Article XIII D, Section 6 of the California Constitution; and WHEREAS, a sewer rate increase is necessary to meet mandatory Sewer System Management Plan (SSMP) requirements, to replace critical /aging infrastructure, and to ensure the future Sewer Fund is self supporting; and WHEREAS, City Council will be voting at a future Public Hearing to adopt, by Resolution, new rates for sanitary sewer service; and WHEREAS, rates for water and trash (AB939) service will remain unchanged but will be carried over and included in the proposed Resolution for new sanitary sewer service rates for future ease of reference; and WHEREAS, Resolution 05 -6861 containing current rates for water, sanitary sewer, and trash (AB 939) service will be repealed should the proposed Resolution for new sanitary sewer service rates be adopted; and WHEREAS, the City is following Proposition 218 notice and hearing procedures necessary for increasing sanitary sewer rates as provided in Article XIII D, Section 6 of the California Constitution. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Pursuant to Article XIII D, Section 6 of the Califomia Constitution, a special notice proceeding is hereby called on the proposition of increasing rates for sanitary sewer service. SECTION 2. The special notice proceeding on the proposition of increasing rates for sanitary sewer service pursuant to Article XIII D, Section 6 of the California Constitution consists of a notice mailed to the property owners and rate payers of record within the City as of the latest City database. The notice will include the following proposed sewer rate structure: RESOLUTION NO. 10- PAGE TWO FIXED BI- MONTHLY SANITARY SEWER CHARGE Customer Class Meter Size Single Family Residential Multi - Family Residential Non - Residential 5/8" Non - Residential 3/4" Non - Residential 1" Non - Residential 1 -1/2" Non - Residential 2" Non - Residential 3" Non - Residential 4" Non - Residential 6" Non - Residential 8" Non - Residential 10" Compound meters billed according to the the meter Charge $ 5.48 $ 3.28 (per unit) $ 5.48 6.88 8.38 12.94 20.02 30.04 42.16 60.10 80.10 100.12 larger side of VARIABLE BI- MONTHLY SANITARY SEWER CHARGE Basis Charge Per 100 cu -ft (CU) water use $ 0.10 GENERAL Category Policy Customer Class Customers deemed by the City to qualify under more than one type of customer class will be charged the higher of the associated rates Each property owner and rate payer has the right to submit written protest against the proposed rate by mail or in person to the City Clerk no later than the conclusion of the Public Hearing to be held on March 23, 2010. The City shall consider protests against the proposed rates at the Public Hearing, pursuant to Article XIII D, Section 6 of the California Constitution. RESOLUTION NO. 10- PAGE THERE SECTION 3. The City shall give notice of the time and place of the Public Hearing to all property owners and rate payers within the City via the notice described in Section 2, publishing an additional notice in the local newspaper for two consecutive weeks, the second week being not less than ten (10) days before the date of the. Public Hearing, and by posting a copy of the notice described in Section 2 on the bulletin board used by City Council. SECTION 4. City Council will conduct a Public Hearing on the proposed sewer rate at 7 :30 pm on Tuesday March 23, 2010 in the Council Chambers at Downey City Hall, 11111 Brookshire Avenue, Downey CA 90241. SECTION 5. The City Clerk is hereby authorized and directed to give notice of such Public Hearing as provided by law. ATTEST: SECTION 6. The City Clerk shall certify to the adoption of this Resolution. APPROVED AND ADOPTED this day of , 2010. KATHLEEN L. MIDSTOKKE, City Clerk AYES: Council Members: NOES: Council Members: ABSENT: Council Members: ABSTAIN: Council Members: ANNE M. BAYER, Mayor HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a regular meeting held on the day of , 2010, by the following vote, to wit: KATHLEEN L. MIDSTOKKE, City Clerk City of Downey Sanitary Sewer Master Plan January, 2010 RMC Water and Environment In association with Larson Consulting and Bartle Wells Associates City of Downey Sanitary Sewer Master Plan January, 2010 RMC Water and Environment In association with Larson Consulting and Bartle Wells Associates City of Downey Sanitary Sewer Master Plan Executive Summary Background On May 2, 2006 the State Water Resources Control Board (SWRCB) adopted Order No. 2006- 0003 (Sanitary Sewer Order), a General Waste Discharge Requirement (WDR) for all publicly owned sanitary sewer collection systems in California with more than one mile of sanitary sewer pipe. As the City of Downey's (City or Downey) sewer collection system is comprised of approximately 193 miles of sewer mains, the City submitted an application or Notice of Intent (NOl) for coverage under the Sanitary Sewer Order to the SWRCB. The goal of the Sanitary Sewer Order is to provide a consistent statewide approach for reducing Sanitary Sewer Overflows (SSOs). To help achieve this goal, the Sanitary Sewer Order requires public agencies that own or operate sanitary sewer systems greater than one mile in length to report all SSOs to the SWRCB's online SSO database and to develop, implement, and approve via public hearing, a Sewer System Management Plan (SSMP). The Sanitary Sewer Order specifies mandatory elements that must be included in the SSMP. The mandatory elements include the following: • Goal • Organization • Legal Authority • Operation and Maintenance Program • Design and Performance Provisions • Overflow Emergency Response Plan • Fats, Oils and Grease (FOG) Control Program • System Evaluation and Capacity Assurance Plan • Monitoring, Measurement, and Program Modifications • SSMP Program Audits • Communication Program The City utilized the SSMP framework to prepare a Sanitary Sewer Master Plan (Master Plan) that included the preparation of an SSMP, while also providing a full assessment of the City's current programs for the planning, management, and operation and maintenance of its sanitary sewer system. The assessment resulted in recommendations for improvements to the City's current programs, staffing levels, and sewer capital improvement program, and a financial plan to provide the necessary funding to implement the recommended improvements. To assist staff in the development of the Master Plan, the City retained RMC Water Environment, Inc. (RMC), with Larson Consulting and Bartle Wells Associates as subconsultants. January, 2010 1 This executive summary provides a brief description of the assessment and recommendations that emerged from the Master Plan study. The Master Plan consists of the following six documents with the SSMP being the lead document and all others supporting the SSMP. • SSMP • Sewer Rehabilitation and Replacement Plan • System Evaluation and Capacity Assurance Plan • Lift Station Condition and Replacement Evaluations • Wastewater Facilities Design Guidelines, Policies, and Procedures • Financial Plan Due to the size of the documents, the SSMP was configured as a stand -alone document fulfilling the requirements of the Sanitary Sewer Order with references made to the other documents within the SSMP where necessary. System Overview and Performance The City owns, operates, and maintains a sanitary sewer system that serves the City of Downey. The City's sewers discharge to trunk sewers owned, operated, and maintained by the County Sanitation Districts of Los Angeles County (CSDLAC), which also provides for the treatment and disposal of the City's wastewater. The City's portion of the sewer system consists of approximately 193 miles of sanitary sewer mains, 4,250 manholes, and two small lift stations. There are approximately 22,400 sewer accounts. The City's sewer mains range in size from 6 to 21 inches in diameter and are constructed of clay pipe. The majority of the system was built between 1945 and 1955, with the oldest sewers dating back to 1927. The performance of the City's system in terms of SSOs is comparable to other agencies of similar size in the region, as shown in Figure 1. The City's rate of 4.1 SSOs per 100 miles of sewer per year equates to about 8 SSOs per year. These SSOs have been due mostly to pipes blocked by accumulated grease and debris, including foreign objects improperly flushed into the system. The majority of these SSOs are small (less than 100 gallons), and almost all of the sewage has been contained and returned to the system before entering storm drains. Because the City's sewer system is performing relatively well, it is unlikely to attract negative attention and become a target of enforcement actions by the SWRCB unless a major SSO occurs. Since the majority of the sewers and the two lift stations are now over 50 years old, the risk of a major SSO and deteriorating performance is rising. Should such a major SSO occur, the City would have a much better chance of avoiding significant fines and costly administrative orders if it could demonstrate that it has adopted and implemented a strong SSMP. Adopting the recommendations in the Master Plan would put the City in a good position to maintain or improve the performance of its sewer system and avoid regulatory actions in the future. January, 2010 2 Figure 1: SSO Rate of California Region 4 Agencies With 150 -250 miles of Sewer Mains (January 2, 2007 — April 30, 2009) 20 15 10 5 • • L Downey • • • • ♦• • • 0 150 160 170 180 190 200 210 220 230 240 250 Sewer System Size, miles Sewer System Management Plan (SSMP) The SSMP includes several required sections that are relatively straightforward and do not require major investments by the City to comply with. Among those sections are: Goal: States the City's goals for the management, operation, and maintenance of its wastewater collection system. Organization: Identifies City staff responsible for implementing the SSMP, responding to SSO events, and meeting the SSO reporting requirements. This section also includes the designation of the Authorized Representative to meet SWRCB requirements for completing and certifying spill reports. Legal Authority: Documents the City's legal authority to comply with the SSMP requirements, as provided in its Municipal Code and agreements with other agencies. Design and Performance Provisions: Documents that the City has design and construction standards and specifications for the installation, inspection, and testing of new sewer systems and for the rehabilitation and repair of existing sewer systems. As part of the Master Plan, the City consolidated and updated its standards and specifications into a new document: City of Downey Wastewater Facilities Design Guidelines, Policies, and Procedures (Design Guidelines). Overflow Emergency Response Plan: Documents the City's plan for an orderly and effective response to Sanitary Sewer Overflows (SSOs). The plan provides guidelines for City personnel to follow in responding to, cleaning up, and reporting SSOs that may occur within the City's January, 2010 3 service area. Preparation of this plan resulted in the recommendation for the purchase of approximately $210,000 in new equipment, including trailer- mounted equipment and supplies for video inspection, sewer cleaning, portable pumping and portable piping. FOG Control Program: This section of the SSMP presents the extent and nature of SSOs related to Fats, Oils, and Grease (FOG) and the need for a FOG Control Program. The extent and location of the FOG - related SSOs in the City's system indicates that focused sewer cleaning at appropriate frequencies is the most cost - effective way of controlling FOG, and a more extensive source control program (e.g., additional requirements for the installation and inspection of grease removal devices for existing establishments) is not recommended at this time. Monitoring, Measurement, and Program Modifications: States the City's procedures for monitoring the performance of its system, assessing its success, and updating elements as appropriate. SSMP Program Audits: Requires the City to periodically perform formal audits of the effectiveness of the SSMP. Communication Program: Documents the City's program to communicate on a regular basis with the public on the development, implementation, and performance of its SSMP, and to communicate with owners of tributary systems. The more substantive sections of the SSMP are the Operation and Maintenance Program (which includes a Sewer Rehabilitation and Replacement Plan), and System Evaluation and Capacity Assurance Plan. These important sections are summarized below: Operation and Maintenance Program The City's SSMP includes new procedures recommended for the operation and maintenance (O &M) of the City's system. These procedures are needed to satisfy SSMP requirements, minimize the risk of sewer overflows, mitigate impacts of any overflows, improve maintenance efficiency, and shift from a reactive to a more proactive mode of operation. Some of the recommendations resulting from development of the Master Plan/SSMP include: A system -wide sewer cleaning program with a frequency of three years (58 miles per year) • An expanded "hot spot" cleaning program for more frequent cleaning of problem sewers (19 miles per year) • An expanded chemical root control program for 4.5 miles of sewer main per year • Video inspect approximately 37 miles of sewer pipe per year for first five years • Video re- inspect approximately 12 miles of sewer pipe per year for the second five years thereafter • Replace sewer lift stations • Rehabilitate /replace approximately 0.6 miles of sewer pipe per year • Perform approximately 23 spot repairs per year • January,2010 4 • Purchase and implementation of a computer software system for sewer maintenance and management, which will improve efficiency and allow the maintenance program to be refined in the future based on the findings of video inspections and maintenance activities • Purchase of trailer- mounted video inspection and jetting units • Purchase of sanitary sewer overflow /spill response equipment including a portable pump and piping • Replacement of existing truck- mounted cleaning unit in 5 years • Additional management, technical, and safety training Anticipated staffing necessary to implement the expanded O &M program would be a total of approximately 3.2 field staff and 0.4 office staff. This results in approximately 2 additional sewer staff as the City currently dedicates an estimated 1.5 field staff to sewer - related activities. Proposed staffing assumes video inspections and chemical root control work will be contracted out (non -City staff). Sewer Rehabilitation and Replacement Plan Development of a Rehabilitation and Replacement Plan (RRP) is an element of the SSMP's Operation and Maintenance Program, which requires that the City have a program in place to inspect its sewers, identify and prioritize system structural deficiencies, and implement short- term and long -term rehabilitation actions. The RRP was developed as a separate document with an overview and recommendations resulting from its development provided in the SSMP to satisfy SWRCB requirements. The following is a summary of the steps taken in the development of the RRP and the conclusions resulting from this process. Over 85 percent ( %) of the City's sewers were built over 50 years ago, and the oldest sewers are now over 80 years old. Clay pipe installed in those time periods is often considered to have an average service life of 80 years, although pipes often fail considerably earlier or later than this average. Although the age of the system suggests that many sewers may be close to failure, a systematic program to repair, rehabilitate, and replace sewers must be based on actual structural conditions observed through internal video inspections. As part of the Master Plan, City staff and RMC selected gravity sewers for inspection, with the target of inspecting 50,000 feet of pipe, approximately 5% of the City's sewer system. The sewers selected for inspection included sewers of all ages and located throughout the City, as shown in Figure 2. The results of these inspections were extrapolated to characterize the overall condition of the system to allow for a reasonable initial projection of future repair, rehabilitation, and replacement needs. The sewer inspections were performed by a subcontractor and followed an industry - standard system for categorizing and rating structural defects such as cracks, fractures, broken pipes, offset joints, etc. The system includes five grades of defects, as defined in Table 1. A failure would cause a partial or total blockage of the sewer that could lead to an overflow if not found and corrected quickly. These estimates of when failure may occur are approximate and do not establish an exact timeline for when rehabilitation or replacement must occur. Rather, they serve as a basis for prioritizing initial projects and scheduling follow -up inspections. Any pipe with Grade 4 or 5 defects was further assessed to determine if corrections should be scheduled to be January, 2010 5 performed in the near term (ideally within 2 years), or could be deferred for 5 years at which time the pipe would be re- inspected to determine if the defect is deteriorating. Figure 2: Sewers Selected for Initial Video Inspection (highlighted in red) January, 2010 6 Table 1: Sewer Structural Condition Grading System Individual Defect Condition Grade Condition Grade Definitions 2 3 4 5 No or minor defects observed. Pipe failure unlikely in the foreseeable future. Defects observed that have not begun to deteriorate. Pipe unlikely to fail for at least 20 years. Moderate defects that will continue to deteriorate. Pipe may fail in 10 to 20 years. Severe defects are present that will become Grade 5 defects within the foreseeable future. Pipe will probably fail in 5 to 10 years. Pipe has failed or is likely to fail within the next 5 years. Defects require immediate attention. Based on the initial inspections, 13 manhole -to- manhole pipe sections (7% of the inspected pipes) had Grade 4 or 5 defects that were deemed to require correction, including one pipe that had failed and required immediate repair, which was completed on an emergency basis. Table 2 summarizes the observed conditions and recommended corrective actions. Most of these pipes could be "spot repaired" by replacing the few feet of pipe having the severe defect. However, 3 of the pipes had a sufficient number of defects throughout the pipe to warrant replacement or rehabilitation (lining or pipe bursting/replacement) of the entire pipe from manhole to manhole. An additional 37 pipes (21%) had Grade 4 defects or marginal Grade 5 defects that . do_ not require repair or rehabilitation at this time but should be re- inspected in 5 years. The remaining 72% of the pipes had no Grade 4 or 5 defects and were recommended for re- inspection in 7 to 30 years based on the severity of the worst observed defects. Priority Recommended Timeframe /Corrective Action Number of Gravity Sewers, Inspection Percentage of Complete Sewer Inspected Urgent High Medium Low Total January, 2010 Table 2: Summary of Structural Condition Findings Repair within 1 year Repair within 2 years Re- inspect in 5 years Re- inspect in 7 -30 years 3 10 37 129 179 1.7% 5.6% 21% 72% 100% Because the 50,000 feet of inspected sewers included a distribution of pipes built in various decades, the fmdings of this initial condition assessment provided a solid basis for assessing the overall condition of the sewer system. Older pipes were found to have more Grade 4 and 5 defects than newer pipes, and the findings of the initial inspections (percentages requiring either repair or rehabilitation/replacement) were generalized by age of pipe and extrapolated to the entire system. Inspection of the rest of the sewer system was assumed to occur over a five -year period, with the oldest sewers to be inspected first. Based on the results of the initial inspection, year -by -year estimates were made for the next 10 years of the amount of sewer to be inspected, the resulting amount of repair and rehabilitation/replacement, and the resulting amount of re- inspection work needed in future years. Over the 10 years, there would be an average of about 7 0.6 miles of manhole -to- manhole rehabilitation/replacement projects and approximately 23 spot repairs per year. This analysis estimated an average annual cost of $0.8 million over the next 10 years for inspections and re- inspections, assessments, repairs, and rehabilitation/ replacement projects (see Table 3). As expected, the first 5 years of the program would have higher annual costs than the subsequent 5 years, since the oldest pipes will be inspected first and more defects are expected to be found. Since the City plans to fund these improvements from annual revenues, it was assumed that some of the early projects could be deferred to allow a more uniform rate of annual capital expenditures. Table 3: Annual Inspection and Rehabilitation /Replacement/Repair Costs (Current $) Fiscal Year Rehabilitation Spot Repair Inspections Re- Inspections Total Capital Cost FY 10 -11 FY 11 -12 $118,000 ' $93,000 $215,000 $0 $307,000 $72,000 $215,000 j $0 FY 12 -13 $1,229,000 $432,000 $226,000 FY 13 -14 $898,000 $313,000 $215,000 FY 14 -15 $643,000 ! $229,000 $208,000 $426,000 $594,000 $11,0001 $1,898,000 $0 i $1,426,000_ $0 j $1,080,000 $44,0004 $596,000 $49,000 $498,000 $445,000 $0 ; $75,000 , $429,000 $0 $75,000 $429,000 $1,079,000 $353,000 $7,921,000 FY 15 -16 I $389,000 i $163,000 $0 FY 16 -17 ! $144,000 $305,000 $0 FY 17 -18 $257,000 $89,000 $0 $99,000 FY 18 -19 $268,000 ' $86,000 FY 19 -20 $268,000 $86,000 TOTAL j $4,520,000 1 $1,869,000 Lift Station and Evaluation and Replacement The City operates two small (175 gallons per minute capacity) lift stations on True Avenue and Blandwood Road in the northeast part of Downey. The stations are over 50 years old and have generally surpassed the service life for standard sanitary sewer lift stations. The SSMP process included an inspection of the lift stations, the details of which are included in a separate document titled "Lift Station Condition Evaluation ". Inspection of the stations resulted in a recommendation to either replace both stations or consolidate the stations into one new station near the Blandwood Road site (see Figure 3). A study of the two alternatives found that consolidation would have a somewhat higher capital cost ($1.0 vs. $0.8 million), but would save the City $16,400 per year in operation and maintenance costs. In addition, a single lift station would have advantages in terms of operational reliability and maintenance efficiency and safety. Council authorized preparation of plans and specifications for the construction of this project at the end of FY 08/09. Design is anticipated to be completed mid 2010. The construction was recommended to be complete 2 to 4 years thereafter. January, 2010 8 Figure 3: Recommended Lift Station Consolidation at Blandwood Road I Rechannel Existing Manhole Li January, 2010 True Avenue Lift Station. j to be abandoned Existing VCP sewer (abandon in place) New 4 -inch Ductile Iron Force Main New 8 -inch VCP gravity sewer main. Reconnect house laterals Blandwood Road Lift Station 9 System Evaluation and Capacity Assurance Plan Although there have been no documented capacity- related sewer overflows in the City, a comprehensive capacity evaluation using a dynamic hydraulic model was performed to quantify flows and hydraulic capacities in all major sewers and lift stations under current and future flow conditions. The level of analysis and amount of information involved in this capacity evaluation necessitated the need for a separate document, System Evaluation and Capacity Assurance Plan (SECAP), exclusive of the SSMP. The SSMP includes a general overview and recommendations resulting from the evaluation in order to satisfy SWRCB requirements, while complete details can be found in the SECAP report. Sewers included in the hydraulic model consisted of all City sewers larger than 8 inches in diameter, trunk sewers owned by CSDLAC that receive significant flows from City sewers, and 8 -inch sewers serving larger areas, a total of 55 miles of sewer. Characteristics of the modeled sewers were extracted from the City's GIS sanitary sewer layer and augmented with as -built drawing research and field measurements as required. The City's service area was divided into 179 tributary areas (median size of 42 acres) for the purposes of estimating existing and build -out wastewater flows. Flows in all tributary areas were estimated using a variety of information sources including census data, general plan land uses, regional growth projections, and water meter billing records. A temporary flow monitoring program consisting of 21 meters was conducted to calibrate the unit flow parameters and verify the modeled flows under dry weather conditions. Due to a lack of rainfall during the monitoring period, wet weather flows were not measured, and a generalized wet weather flow analysis was performed instead. The calibrated hydraulic model was used to generate peak flows in each modeled pipe and to evaluate pipe capacities. Based on the modeling results, all of the City -owned sewers meet the capacity criteria established in this study (i.e., depth of flow less than or equal to 75% of pipe diameter) under both existing and build -out dry weather flow conditions. Figure 4 shows the results of the model for the build -out scenario, showing that the depth of flow in City sewers is projected to remain under 75% of pipe diameter, but that the CSDLAC Lakewood Blvd. Trunk Sewer may exceed that limit. No capital improvement projects by the City are required to provide additional capacity. In addition to the dry weather flow analysis, a generalized wet weather flow analysis was performed to identify areas that could be most at risk of overflows from elevated flows during major wet weather events, and where future flow monitoring efforts should be focused. The highest risk was identified to be in the downstream reaches of the CSDLAC trunk sewer along Lakewood Blvd., and in the City sewers that would be affected by backwater from that trunk sewer. Initially, the City will periodically monitor wet weather water levels in key manholes in this and other parts of the system. Should significant surcharging be observed, additional measures will be undertaken to evaluate the cause of the problem and implement appropriate capacity enhancement measures (or convey the information to CSDLAC for their action). City staff will also maintain and refine the hydraulic model over time and utilize it to assess impacts of future developments if they deviate significantly from the current projections. January, 2010 10 Figure 4: Results of Hydraulic Model Analysis of Sewer System Capacity at Build -Out 7 \. 1 ■ ROSECRAN 1 I Miles Maximum Pipe d/D less than 0.5 • Modeled Manhole 0.5 - 0.75 © Overflowing Manhole 0.75 - 1.0 _ Unmodeled Sewers Surcharged i__ _� City Limits i City of Downey System Evaluation and Capacity Assessment Plan ��AO Figure 5 -2: Buildout Dry Weather Flow Maximum Depth -to- Diameter Ratio January, 2010 11 Financial Plan The City currently has a fixed bimonthly sewer charge based on water meter size ($1.90 bi- monthly for a 5/8" or 3/4" meter) that has not been increased since January of 1997. The City's existing sewer rates only generated a projected $297,000 in FY 08/09 with $135,000 of this total going into the City's Sewer & Storm Drain Fund and $162,000 going into the General Fund. As a result, the City's Sewer and Storm Drain Fund (which covers street sweeping, enforcement, and storm water engineering in addition to sewer system expenses) is not self - sufficient and requires annual transfers of funds from the City's General Fund and Water Fund to keep it whole. The City's goal is to create a new self - supporting Sewer Fund that includes only sewer - related revenue and expenses. Bartle Wells Associates, under subcontract to RMC, prepared a Sewer Financial Plan for the City that recommends a new sewer rate structure and increased sewer rates sufficient to cover the $1.6 million per year required to fund the recommended sewer program developed in the Master Plan and maintain a minimum reserve of 6 months of operating expenses. Some of the key aspects of the Financial Plan are: • Establishment of a self - sustaining Sewer Fund used to pay for future sanitary sewer O &M and capital costs identified in the Master Plan. • The proposed sewer charge has two components: 1) fixed- charge component based on number of dwelling units, meter size, or fixed according to customer class and 2) a variable- charge component based on metered bi- monthly water use. • The proposed rates are set so that the fixed sewer charge generates 60% of the revenue and the variable charge .generates 40 %, based on current (FY 08/09) water use (no future change in water use is assumed). These percentages balance the need for stable revenue with the desire to have the charge reflect actual sewer usage and provide an incentive for water conservation. • The new fixed monthly sewer charge for a single - family residential (SFR) account would be $2.74 (new rates assumed to begin July 1, 2010 for purposes of financial analyses with a target date of April 1, 2010 for implementation). The variable charge would be $0.10 per consumption unit [hundred cubic feet (hcf) of water use]. Based on bi- monthly water use of 35 CU, the typical SFR customer with a 5/8" meter would pay a total (fixed plus variable charges) of $4.49 per month or $8.98 bi- monthly. The proposed new sewer rate structure and charges do represent a significant increase as compared to the City's existing rates, but this increase is critical if the Sewer Fund is going to cease to rely on General and Water Fund transfers to sustain itself and if the necessary repairs, refurbishments, replacements, maintenance, and staffing/equipment improvements that the Master Plan/SSMP calls for are to occur. Furthermore, the operating and capital budget for sewer costs in FY 08/09 was approximately $541,000 while the new Master Plan/SSMP calls for an annual average of approximately $1.6 million in expenditures over the next ten years. The need for a sewer rate increase is clear. January, 2010 12 Table 4 shows that even after the proposed increase to the City's sewer rates, the City's typical SFR hi sewer bill would still be low when compared to the sewer rates charged by neighboring communities for sewer collection service. Table 5 summarizes the recommended new sewer rate structure showing the proposed fixed monthly charges for SFR accounts, multi - family units, and the fixed charges for non - residential accounts which are based on meter size. Table 5 also shows the recommended variable sewer charge per consumption unit (CU or hcf). Table 5: Summary of proposed new Sewer Rate Structure and Charges Fixed Monthly Sewer Charge Single Family Residential Account Multi - Family Residential Units (60% of SFR) Non - Residential Accounts (billed by Meter Size) 5/8" 3/4" 1" 1.5" 2" 3" 4" 6" 8 " 10" Variable Sewer Charge per Consumption Unit (CU) $2.74 Sewer Charge per hcf of water $0.10 $1.64 $2.74 $3.44 $4.19 $6.47 $10.01 $15.02 $21.08 $30.05 $40.05 $50.06 Table 4 Comparison of Sewer Collection Bills Cities Neighboring City of Downey Residential Bi- Monthly Bills Bi- Monthly Bill for Collection Sewer Agency Cerritos Downey (existing) Huntington Park Downey (proposed) Whittier South Gate Lynwood Long beach Compton Assume: 5/8" Meter, 35 hcf bimonthly water use Bills only for sewer collection service; no wastewater treatment Sample Monthly Bills Assuming Monthly Water Usage Single Family Residential (5/8" meter) $4.04 Single Family Residential (1" meter) $4.64 Multi - Family (per unit) $2.34 Commercial (1" meter) $6.69 Commercial (2" meter) $20.91 Church (2" meter) $13.91 Public (4" meter) $43.78 $0.58 $1.90 $5.25 $8.98 $11.62 $11.90 $15.58 $23.69 $28.71 hcf 13 19 7 25 109 39 227 Table 6 summarizes the projected ten -year sewer program expenditures based on . the recommendations in the Master Plan and SSMP. Figure 5 shows the year -by -year expenditures and how an annual expenditure of about $1.6 million could be achieved by deferring some of the initial capital projects. California Proposition 218 requires a majority protest proceeding to impose or increase "property related fees ", including fees for water, sewer and trash services provided by local governments. Sewer rate increases do not require an affirmative majority vote, but rather a majority of ratepayers must submit written protests against the sewer rate increase to prevent its passage. The steps the City must take under Proposition 218 to successfully increase its sewer rates are as follows: January, 2010 13 1) Adopt resolution establishing the intent to raise rates, date of the public hearing and authorizing staff to notify property owners /ratepayers 2) Mail out a Prop 218 notice to property owners /ratepayers informing them of the proposed rate increase and the date /time /location of the public hearing (no less than 45 days after the Prop 218 notice is mailed out). The Prop 218 notice also needs to instruct property owners /ratepayers how they can lodge a written protest against the proposed rate increases. 3) Monitor and tabulate whatever protests are filed during the time between the Prop 218 notice being sent out and the public hearing. 4) Hold a public hearing on the rate increases (written protests can be filed at the hearing as well) and, assuming the number of written protests is less than 50% of all the property owners /ratepayers, Council can vote to pass the new rates. January, 2010 14 C 0 V CO d CO 0 V O O O O O O O O O O O O O O O O O O O O O O 0 0 O A O O O O O O O O O O O O O O O O O O O O O O O 00 O NR CO )O0 W CO W 0(h CO W C D R Wu)N. N. N 0 W o F- fp NOr NR W V W W MNnm co- Or at; f r N m CO C CO CO N v- N N W CO )O N v ,- ,- N CO CVO N O N N 69 0 0 O ' 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ' 0 N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O CO CO W N (h W O R N � M 0 N. N CO CO 0 W O N a) co C) N R N O N- (O D LL O �- CD CO I. 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LL (+)N m C W CCr)((o O� U (4N O M 0 M N Go an O a ' 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O O ` O W (+) 1 0 0) r C) 01 N � � ('7 W Ol N n N (+) N 0 r- 0 W ('7 N M C O •o:' W � .=. Y V V 1.0 c- NW V' v-'O (9 ' NN LL N CO O N N 69 q q 0) 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Q a 0 0 0 O 0 0 0 0 0 0 0 0 O 0 0 0 0 CO N CD CO K Cf. )` v N c')W O V O vv.- e} W Ol ` CO •- •- W m fOV • f9 p p W o � !: 0 0 0 0 0 0 0 0 0 0 0 0 0 0 888 O I •- V Vnn nNW 0 6: N.. N0 NSW OcD co- 6 �n OOM.- N O C') (+) (V 13 ' LL (0 N V' I R 0) )O, W )O C) d, 0 0 'Cr W N 0 CO w V 0 0 w 2 W W C T � 1 1 SpUCSf101a 4 0 0 0 0 0 0 O 0 N 0 N O CO (9 N N Or 69 69 69 69 69 City of Downey Sewer Financial Plan Prepared by: Bartle Wells Associates Under Subcontract to: RMC Water ancEnvironme,t January, 2010 The City of Downey (City or Downey) currently has a fixed bi- monthly sewer charge that is based on water meter size. The typical single family residential (SFR) customer with a 5/8" water meter pays $1.90 bi- monthly ($0.95 per month). Table 1 contains the bi- monthly sewer charges for all of the City's meter sizes and also shows that sewer charges have remained unchanged since January of 1997. Table 1 City of Downey Sewer Financial Plan Historical and Current Bi- Monthly Sewer Charges Res. # 6018, Res. # 6379, Res. # 05 -6861, Meter Size. January 28. 1997 June 27, 2000 June 28. 2005 5/8" and 3/4" $1.90 $1.90 $1.90 1" 2.20 2.20 2.20 1 1 /2" 3.65 3.65 3.65 2" 5.15 5.15 5.15 3" 9.05 9.05 9.05 4" 13.80 13.80 13:80 6" 26.10 26.10 26.10 8" 41.10 41.10 41.10 10" 58.75 58.75 58.75 Compound meters 58.75 58.75 58.75 With no rate adjustment over twelve years, the City's sewer charges do not presently .:generate . -enough revenue to.enable the City's Sewer & Storm Drain Fund to be self - sufficient. The Sewer Storm,Drain Fund has only managed to meet its expenses by fund transfers from the City's General and Water Funds. The amounts are follows: • . 07/08 General Fund transfer to Sewer & Storm Drain Fund = $1,307,433 • 08/09 General Fund transfer to Sewer & Storm Drain Fund = $1,476 ;995 • The budgeted transfer from the Water Fund for these same periods was; $125,000 per year As the City Manager's Transmittal Letter notes on pg. 8 of the Fiscal Year (FY) 08/09 Adopted Budget, "At some point, the City will have to address this situation so that this fund becomes self - supporting." Bartle Wells Associates (Bantle Wells) has prepared this Sewer Financial Plan for the City that recommends: 1) Creation of a self - sufficient Sewer Fund (separate from the Storm Drain Fund); 2) A new sewer rate structure with both a fixed rate component and a variable charge component; 3) Increased sewer rates to fully fund the City's Sanitary Sewer Master Plan (Master Plan) and Sewer System Management Plan (SSMP) and eliminate the need for fund transfers. Table 2 lists recommendations and associated costs resulting from development of the Master Plan and SSMP in 2008 dollars while Table 3 provides future costs assuming an escalation rate of 3% annually. In an effort to stabilize the fluctuation in the yearly Master Plan/SSMP budget, Figure 1 illustrates that some rehabilitation, replacement, and repair projects are scheduled to be deferred so that the annual cost of the Master Plan/SSMP improvements is relatively steady. The total cost to implement the Master Plan/SSMP improvements (in future dollars) from FY 10 /11 through FY 19/20 is $15,782,000 resulting in a yearly average of just under $1.6 million. The City's existing sewer rates only generated a projected $297,000 in FY 08/09. If the Sewer Fund is to adequately fund the new Master Plan/SSMP while becoming self-. sufficient and eliminating the need for future transfers, the City must adopt increased sewer rates. Table 2 City of Downey Sewer Financial Plan Downey Sewer System Management Plan (20085) Item FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13114 FY 14/15 FY 15116 FY 16117 FY 17118 FY 18119 FY 19/20 Totals Consolidate Blandwood and True PS Capital $ 330,000 $ 340,000 $ 330,000 $ - $ - $ - 5 5 - 5 S - $ 1600600 CCTV Inspection-Mains (contractor) Capital 215,000 215,000 226,000 215,000 208,000 43.000 49,000 99,000 75,000. .75,000 1,420,000 Analyze CCTV Data/Produce ClP O&M 39,000 39,000 41,000 39,000 37,000 8,000 9,000 18.000 14,000 14,000 258600 Spot Repairs -Mains Capital 93,000 72,000 432,000 313,000 229.000 163,000 306.000 89,000 86,000 86.000 1,869,000 Rehabl5tationlReplacement -Mains Capital 118600 307,000 1,229,000 898,000 643.000 390,000 '144.000 255,000 268.000 208,000 4,520.000 Chemical Root Control Program O&M 6.000 12000 18,000 24.000 24,000 24,000 24,000 24600 24600 24,000 204,000 Hot Spot Sewer Cleaning O&M 35,000 45,000 55,000 55,000 55600 55,000 55,000 55.000 55,000 55,000 520,000 System wide Sewer Cleaning O&M 65,000 85,000 105.000 125,000 125.000 125,000 125.000 125.000 125.000 125,000 1.130,000 PS O&M O&M 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 100,000 Other O&M Activities O&M 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50000 500,000 Management, Supervision, and Administration O&M 105.000 105,000 105,000 105,000 105,000 105,000 105,000 105,000 105600 105,000 1.050,000 PurchaseJlmplement CMMS Capital 15,000 2,500 1,000 1.000 1.000 1,000 1,000 1,000 1,000 1,000 25,500 Replace truck-mounted combination cleaner Capital 350,000 350,000 Purchase trailer- mounted CCTV unit Capital 85,000 85,000 Purchase trailer - mounted japer Capital 50,000 50,000 Purchase emergency response equipment Capital 50,000 10,000 60,000 Management Training O&M 3,500 3,500 7,000 Technical Training O&M 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3600 3,000 30,000 Safety Training O&M 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2000 20,000 SSMP Audit 084 30,000 30,000 30,000 30,000 30,000 150,000 SSMP Update O&M 50,000 50,000 100,000 Sewer O&M Budget O&M 278,000 278,000 Totals 5 278;000 5 1,139,500 5 1,452,500 $ 2,607,000 $ 1,870,000 5' 1,542,000 $ 1,372,500 5 883,000 5 866,000 $ 818,000 5 898,000 $ 13,726,500 • Deferred Rehabilitation/Replacement /Repairs (1,100,000) (400,000) 100,000 600,000 500,000 300,000 - Revised Totals $ 278.000 51.139.800 5 1.452.500 5 1,507,000 $ 1,470,000 $ 1.542,000 $ 1.472.500 $ 1,483.000 51.366.000 5 1.118.000 5 898,000 5 13.726.500 Table 3 . City of Downey Sewer Financial Plan • Downy Sewer System Management Plan (Future$) tterru FY 09110 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14415 FY 13/16 FY 16/17 FY 17118 Fa'- !8/19J - . - FY 19/20 Totals Consolidate Blandwood and True PS Capital $ 339,900 $ 360,700 5 360,600 $ - 5 $ - $ -. $ - 5 - 5 . - $ 1661200 CCTV Inspec{on -Males (contractor) Capital 221500 228;100 "247,000 242,000 241.,100 51,300 60,300 125,400 ' 97500 100600 1515400 Analyze CCTV Data/Produce ClP O&M 40,200 41,400 44,800 43,900 42,900 9,600 11,100 22,800 18,300 18,800. 793,800 Spot Repairs - Mains Capital 95,800 76,400 472,100 352,300 265.500 194,600 376,300 112,700 11 2,200 .115,600 .• 2,173;500 Rehab8ta6aJReplacement -Mains Capital 121,500 325.700 1,343,000 1.010,700 745,400 465,700 177,100 323,000 349,700 360,200 5222,000 Chemical Root Control Program O&M 6,200 12,700 19.700 27,000 27,800 28,700 29,500 30,400 31,300 32,300 245,600 Hot Spot Sewer Cleaning O&M 36,100 47,700 60,100 61,900 63,800 65,700 67,600 69,700 71,800 . 73,900 618,300 Systemwide Sewer Cleaning O&M 67,000 90200 114,700 140,700 144,900 149,300 153,700 158,300. 163.100 168,000 1,349,900 PS O&M 0881 10,300 10,600 10,900 11,300 11,600 11,900 12,300 12,700 13,000 13,400 118,000 Other O&M Activities OEM - 51,500 53,000 54,600 56,300 58,000 59,700 61,500 63,300 ; 65,200 67,200 590,300 Management, Supervision, and Administration O&M 108,200 111,400. 114.700 118,200 121,700 125,400 129,100 133.000 137,000 141.100 1239,800 PurdreseJmplementCMMS Capital 15,500 2,700 1,100 1,100 1200 1200 1,200 1,300 1,300 1,300 27.900 Replace truck - mounted combination cleaner Capital 417,900 417,900 Purchase trailer- mounted CCTV unit Capital 90,200 90,200 Purchase trailer- mounted jeter Capital 53,000 53,000 Purchase emergency response equipment Capital 51,500 11,900 63,400 Management Training OM 3,600 4,200 7,800 Technical Training OEM 3,100 - 3,200 3,300 3,400 3,500 3,600 3,700 3,800 3,900 4.900 35,500 Safety Training OEM 2,100 2,100 2,200 2,300 2,300 2,400 2,500 2,500 2,600 2,700 23.700 SSMP Audit 0881 31,800 33,800 35,800 38,000 40,300 179,700 SSMP Update OEM 58,000 67200 125,200 Sewer O&M Budget O&M 278,000 278,000 Totals $ 278,000 $ 1,174,000 $ 1,540,900 5 2,848,800 $ 2,104,900 $ 1,787,700 $ 1,638,900 $ 1,085,900 $ 1,096,900 $ 1,007,300 $ 1,206,800 $ 15,830,100 Deferred Rehab5rlationlReplacemenBRepairs Revised Totals $ 278,000 $ 1,174,000 Annual E olatIon Factor 3.00% (1,202,000) (450,200) - 119,400 737,900 633,400.. 391,400 - 229,900 $ 1,540,900 $ 1,646,800 S 1,654,700 $ 1,787,700 $ 1,758,300 $ 1,823,800 $ 1,730,300 $ 1,458,700 $ 1206,800 $ 16,060,000 $3,000 5 r $2,500 $2,000 $1.500 $1,000 $500 $0 FY09 /10 FY10/11 FY11/12 Bartle Wells prepared two different rate structures /scenarios for the City's consideration. Both scenarios generate approximately $1.6 million in revenue needed annually to fully fund the Master Plan/SSMP improvements and assume that the new rates begin on July 1, 2010, although new rates would likely take effect shortly after adoption of a new rate structure which could be earlier (spring of 2010). Scenario 1 closely resembles the City's existing sewer rate structure but increases the.bi- monthly fixed charge so that adequate revenues are raised. The rate structure is modified slightly in that customer accounts with 5/8" and 3/4" water meters are no longer charged the same sewer rate (as is presently the case - see Table 1). Also, the proposed meter ratios used to calculate fixed -bi- monthly sewer rates for different water meter sizes have been changed. The new meter ratios are the same ratios used for the City's existing water rates. The meter ratios are expressed for each meter size relative to a 5/8" meter. Table 4 lists the meter ratios, the total number.. of Equivalent Dwelling Units (EDUs), and the newly proposed monthly rate of $4:55 per EDU for Scenario 1. Table 4 City of Downey Sewer Financial Plan Scenario #1 - Fixed Monthly Service Charge Figure 1: Downey SSMP (Future $) FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 FY18/19 FY1920 Fixed Meter Church Commercial Industrial Multi- Family Public SFR Total Monthly Size Accounts Accounts' Accounts . Accounts Accounts Accounts' Accounts Meter Ratio2 . EDUs . Charge 5/8" 17 298 4 562 8 14,172 15,061 1.00 15,061 $4.55 3/4" 1 27 0 32 1 1,102 1,163 1.26 1,460 $5.71 1" 12 253 9 325 5 4,036 4,640 1.53 7,097 $6.96 1.5" 11 191 5 189 3 442 841 2.36 1,985 $10.74 2" 23 289 12 21.7 18 215 , 774 3.65 2,828 $16.63 3" 1 33 1 19 12 2 68 5.48 373 $24.94 4" 3 19 0 3 17 0 42 7.69 323 $35.00 6" 0 7 0 2 2 1 12 10.97 132 $49.90 8" 0 3 0 0 0 0 3 14.62 44 $66.51 10" 0 2 0 0 0 0 2 1827 37 $83.14 Total 68 1,122 31 1,349 66 19,970 22,606 29,338 SewerRevenue•Target $1,600,000 Fixed Monthly Sewer Charge $4.55 per EDU ' Includes Golden State Water and Santa Fe Springs water customers. 2 This nelrsewer •frieter ratio is. based on the City's existing waternieter ratios. Bartle Wells is not recommending Scenario 1, however. A sewer rate structure that incorporates a quantity charge based on water consumption, in addition to a fixed charge, is deemed a more equitable approach that will also promote water conservation. The second and recommended sewer rate structure (Scenario 2) has two components: a fixed - charge component and a variable- charge component based on units of water consumption. The sewer rates under this scenario are set so that the fixed sewer charge generates 60 percent ( %) of the $1.6 million annual revenue ($960,000) necessary to implement the Master Plan/SSMP improvements and the variable charge generates the remaining 40% ($640,000). These percentages balance the need for stable revenue (fixed charges) with the desire to have the charge reflect actual sewer usage and provide an incentive for water conservation (quantity charges). Table 5 shows the calculation of the fixed charge under Scenario 2. The charge. is calculated per billing determinant (BD). For non - residential accounts the number. of BDs is determined by using the same meter ratios as were used in Table 4 for Scenario 1. Multi - family customer BDs were calculated based on. the total number of units., as opposed to:accounts, but the multi- family units were then discounted. 40%0 to reflect the reduced impact each •unit has on the sewer system relative to an SFR account. The.SFR..accounts were each counted as one BD: Under Scenario 2, the fixed monthly .sewer charge is $2:74 per BD.. ■ •Iable 5 City of Downey Sewer:Financial Plan Scenario ff2 - Fixed Component Charge per Billing Determinant (BD) Meter Meter Commeraal Commercial Industrial Industrial Public Church BDs Accounts Public BDs Accounts Multifamily Multi- Family ' Size Ratio' Accounts' BDs Accounts counts Church BDs 'Uhits BDs (60 %) SFR1 BDs 5/8" 1.00 298 298 4 4 8 8 17 17 1,035 621 14,172 3/4" 1.26 27 34 0 0 1 1 1 1 '57 34''` 1,102 1" 1.53 253 387 9 14 5 8 12 18 866 520 4,036 1.5" 2.36 191 451 5 12 3 7 11 26 1,583 950 442 2" 3.65 289 1,056 12 44 18 66 23 84 5,058 3,035 215 3" 5.48 33 181 1 5 12 66 1 5 666 400 2 4" 7:69 19 146 0 0 17 131 3 23 537 322 0 6" 10.97 7 77 0 0 2 22 0 0 274 164 1 8" 14.62 3 44 0 0 0 0 0 0 0 0 0 10" 18.27 2 37 0 0 0 0 0 0 0 0 0 Total 2,710 79 308 175 6,046 19,970 29,288.Total Billing Determinants (BDs) 5960,000 Sewer Fixed Revenue Target (60% of 51.6 million annual total) S2.74 Fixed Monthly Sewer Charge per BD This new sewer meter ratio is based on the City's adding water metes ratios. 2 Includes Golden State Water and Santa Fe Springs grater customers. The variable charge under Scenario 2 is responsible for generating 40% of the $1.6 million in annual revenue necessary to implement the Master Plan/SSMP improvements. Table 6 shows how the variable charge per water consumption unit [CU = hundred cubic feet (HCF)] was calculated. Metered water consumption is used to best reflect the relative amount of sewer flow from each account. The City's FY 06/07 water consumption data (number of accounts, type of accounts, etc.) was utilized as the basis for conducting the financial analyses under Scenarios 1 and 2. However, as illustrated in Figure 2, FY 06/07 was an atypically high water consumption year. This high water year was accounted for by reducing the total metered water consumption used in the financial analyses by 7% to match the reduction in water pumped between FY 06/07 and FY 08/09, as FY 08/09 is considered a more typical water consumption year. The values provided in Table 6 reflect these adjustments. Figure 2: City of Downey - Amount of Water. Pumped 2000/01 200.1/02. 2002/03 2003/04 2004/05 2005/06 .2006/07 2007/08 2008/09 Table 6 City of Downey Sewer Financial Plan Scenario #2 - Variable Component Charge Bi- Monthly Water Use by Consumption Units (hcf) Meter Size Church Commercial Industrial Multi - Family Public SFR Total 5/8" 2,056 47,083 36 168,747 1,945 2,956,720 3,176,567 3/4" 519 5,254 -0 _9,599 293 215,878 231,543 1" 4,018. 83,126 3,399 124;.088 1,382 1,198,464 1,411,477 1.5" 4;428 1 50,789 1,230. 159;955 1,255 263;;9:05. 581,562 2" 14,6.81 40;858 21,853 435;544 37,96.6 239;273 1,169,175 3" 134 48,448 3,91.0 86,158 29;458.. 11;0056 179,164 4" 4;925 71,402 0 20,180 102,605 •_9 1.99,121 6 0 28,692 0 24;120 2,975 0 55,787 8" 0 5 0 0 0 0 5 10 ", . 0 =2 ;771 0 0 0 0 2.771 Totat1> 30;761 857 ;408 30;428 1,028 391 177,879 4,882 ;304 7;007,171 FY2008/09 Total ' 28;648. `798;520" 28,338 957,760 165 ;662 4 6,525,909 Sewer Variable Revenue Target (40% of $1.6 million annual total) $640,000 Sewer Charge per hcf of water $0.10 1 City of Downey water consumption data from FY2006/07. Water usage data included from Golden State Water and Santa Fe Springs is nine months of FY 2008/09 consumption projected over a full 12 months. 2 FY2008/09 water consumption assumed to be approximately 7% less than FY2006/07 based on the 7% decrease in pumped water over that same time period (see Figure 1). Both of the newly proposed sewer rate structures, Scenario 1 and the recommended Scenario 2, represent a significant increase when compared to the City's existing rates. However this increase is critical if the Sewer Fund is going to cease to rely on General and Water Fund transfers to sustain itself and if the necessary repairs, refurbishments, replacements, maintenance, and staffing/equipment improvements that the Master Plan/SSMP calls for are to occur. Table 7 summarizes the proposed rates under both Scenarios 1 and 2. It is important to note that the new fixed rates are shown as monthly charges, as opposed to the City's existing bi- monthly fixed charges. Table 7 also shows the recommended variable sewer charge per consumption unit (CU or HCF). Lastly, Table 7 shows what typical monthly bills would like under Scenario 2 during winter months of the year. Table 7 City of Downey Sewer Financial Plan Summary of Sewer Rate Scenarios 1 & 2 Scenario #1 - Fixed Sewer Charge - 100% of Sewer Revenue Monthly Fixed Charge per EDU $4.55 EDU equals 5/8" meter Monthly Meter Size Meter Ratio Charge 5/8" 1.00 $4.55 3/4" 1.26 $5.71 1" 1.53 $6.96 1.5" 2.36 $10.74 2" 3.65 $16.63 3" 5.48 $24.94 4" 7.69 $35.00 6" 10.97 $49.90 8" 14.62 $66.51 10" 18.27 $83.14 Scenario #2 - Sewer Charge with Fixed and Variable Components-(60/40 Revenue Split between Fixed/Variable) Fixed Monthly Sewer Charge Variable Sewer. Charge per Consumption Unit (CU) Single Family Residential Account $2.74 Sewer Charge per hcf of water $0.10 Multi-Family Residential Units (60% of SFR) $1.64 Non - Residential Accounts (billed by Meter Size) Scenario #2 - Sample Monthly 13111s Typical hcf of water per Month 5/8" $2.74 Single Family Residential (5/8" meter) $4.04 13 3/4" $3.44 Single Family Residential (1" meter) $4.64 19 1" $4.19 Multi- Family (per unit) $2:34 ..7 1.5" $6-47 Commercial (1 "meter) $6;69 25 2" $10.01 Commercial (2" meter) $2091 109 3" $15.02 Church (Z' meter) $13.91 39 4" $21.08 Public (4" meter) $43.78 227 6" $30.05 8" $40.05 10" $50.06 Tables 8 and 9 forecast the cash flows for the fives years after the presumed: adoption and implementation of the new rates on July 1, 2010 (actual target for implementation is April 1, 2010). Table 8 shows the cash flow for ; Scenario 1 and Table 9 does the sane for Scenario 2. Both tables use the same Master: P1an%SSMP improvement -costs from Table 3 and assume interest earnings on any reserve funds to be 2 %. Furthermore, the cash flows also assume no growth in EDUs or BDs over the five year period and no increase in sewer flows. Table 8 City of Downey Sewer Financial Plan Sewer Fund Cash Flow: Scenario #1 - 100% Fixed Component Charge Beginning Balance [1] Revenues Fixed Bimonthly Meter Charge Private Contributions Interest [2] Transfers In - General Fund Transfers In - Water Fund Total Revenues FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 164,600 281,900 269,500 702,800 777,900 748,600 710,800 135,000 135,000 1,601,900 1,601,900 1,601,900 1,601,900 1,601,900 395,000 - - 3,300 5,600 5,400 14,100 15,600 15,000 14,200 125,000 125,000 - - 658,300 265,600 1,607,300 1,616,000 1,617,500 1,616,900 1,616,100 Expenditures SSMP O&M [3] 266,000 278,000 328,300 404,100 425,000 498;800 534,500 Capital 275,000 - 845,700 1,136,800 1,221,800 1,155,900 1.,253,200 Total Expenditures 541,000 278,000 1,174,000 1,540,900 1,646,800 1',654,700 1,787,700 Net Revenues 117,300 (12,400) 433,300 75,100 (29,300) (37,800) (171,600) Ending Balance 281,900 269,500 702,800 777,900 748,600 710,800 539,200 1 - FY2009 beginning balance equals 75% of Sewer & Storm Drain Fund balance. 2 - Interest eamings assumed to be 2 %. 3 - FY 2009 & 2010 estimated to be . 75% of Fund 72-3150 total costs. Starting in FY2011, it equals SSMP O&M Future $$$ amount. Table 9 City of Downey Sewer Financial Plan Sewer Fund Cash Flow: Scenario #2 - Fixed and Variable Component Charge Beginning. Balance [1] . = 08/09 FY 09/10 FY 10/11- FY 11/12 FY 12/13 •'FY 13/14 FY 14/15 164,600 281,900 269,500 716,500 805,500 790,400 767,100 Revenues Fixed Bimonthly Meter.Charge 135,000 135,000 963,000 963,000 963,000. 963,000 963,000 Sewer Flow Charge - 652,600 652,600 652,600 652,600 652,600 Private Contributions 395,000 - - Interest [2] 3,300 5,600 5,400 14,300 16,100 15,800 15,300 Transfers In - General Fund - - - - - - Transfers In - Water Fund 125,000 125,000 - - Total Revenues 658,300 265,600 1,621,000 1,629,900 1,631,700 1,631,400 1,630,900 Expenditures SSMP O&M [3] 266,000 278,000 328,300 404,100 425,000 498,800 534,500 Capital 275,000 845,700 1,136,800 1,221,800 1,155,900 1,253,200 Total Expenditures 541,000 278,000 1,174,000 1,540,900 1,646,800 1,654,700 1,787,700 Net Revenues 117,300 (12,400) 447,000 89,000 (15,100) (23,300) (156,800) Ending Balance 281,900 269,500 716,500 805,500 790,400 767,100 610,300 1 - FY2009 beginning balance equals 75% of Sewer & Storm Drain Fund balance 2 - Interest eamings assumed to be 2 %. 3 - FY 2009 & 2010 estimated to be 75% of Fund 72-3150 total costs. Starting in FY2011, it equals SSMP O &M Future $$$ amount. Table 10 shows that even after the proposed increase to the City's sewer rates, the City's typical residential bi monthly sewer bill (under the recommended Scenario 2) would still be low when compared to the sewer rates charged by neighboring communities for sewer collection service. Table 10 Comparison of Sewer Collection Bills Cities Neighboring City of Downey Single Family Residential Bi- Monthly Bill Sewer Aaencv Bi-Monthlv Bill for Collection Cerritos $0.58 Downey (existing) $1.90 Huntington Park $5.25 Downey (proposed) $8.98 Whittier $11.62 South Gate $11.90 Lynwood $15.58 Long beach $23.69 Compton $28.71 Assume: 5/8" Meter, 35 hcf bimonthly water use Bills only for sewer collection service; no wastewater treatment California Proposition 218 requires a majority protest proceeding to impose or increase "property related fees ", including fees for water, sewer and trash services provided by local governments. For property related fees other than water, sewer and trash — such as storm water fees — 2 /3 voter approval is required. Sewer rate increases, however, do not require an affirmative majority vote, but rather a majority of ratepayers must submit written protests against the sewer rate increase to prevent its passage. The steps the City must take under Proposition 218 to successfully increase its sewer rates are as follows: 1. Adopt resolution establishing the date of the public hearing and authorizing staff to notify property owners /ratepayers. 2. Mail out a Prop 218 notice to property owners /ratepayers informing them of the proposed rate increase and the date /time/location of the public hearing (no less than 45 days after the Prop 218 notice is mailed out). The Prop 218 notice also needs to instruct property owners /ratepayers how they can lodge a written protest against the proposed rate increases. 3. Monitor and tabulate whatever protests are filed during the time between the Prop 218 notice being sent out and the public hearing. 4. Hold a public hearing on the rate increases (written protests may be filed at the hearing as well) and, assuming the number of written protests is less than 50% of all the property owners /ratepayers, Council can vote to pass the new rates.