BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Mid-Year Groundwater Production Charge Adjustment for Fiscal Year 2016-17 - Water Utility Enterprise.
End
RECOMMENDATION:
Recommendation
Take no action to adjust groundwater production charges for Fiscal Year (FY) 2016-17.
Body
SUMMARY:
On May 10, 2016, the District Board adopted groundwater production charges for Fiscal Year 2016-17. The District Act allows an opportunity for mid-year adjustment of water charges if it is warranted. Water Utility operating outlays are expected to be on target with the adopted budget total of $207.9 million, and revenues are expected to be on target with the adopted budget total of $232.5 million. Consequently, staff believes that an adjustment in groundwater charges is not warranted at this time.
NEXT STEPS:
Should the Board wish to consider a mid-year groundwater production charge adjustment for Fiscal Year 2016-17, one of the following two actions would need to be taken, depending on the amount of the proposed increase of the groundwater production charges:
1. If the proposed groundwater production charges are decreased or increased in an amount less than or equal to the maximum increase proposed, during the prior rate setting process for the FY 2016-17 groundwater production charges for which there was no majority protest (Established Maximum Increase), staff would need to notify all well owners by mail, and file a supplemental Protection and Augmentation of Water Supplies Report with the Clerk of the Board at least 45 days before the date the adjusted groundwater production charges are proposed to take effect, or no later than November 17, 2016. The Board must hold a public hearing at least 21 days before the date the adjusted groundwater production charges are proposed to take effect, or no later than December 6, 2016. There would be no need to undergo another Proposition 218 protest process since the adjusted groundwater production charges would be within the Established Maximum Increase (i.e. less than or equal to $1,105 per acre-foot for the North County municipal and industrial groundwater production charge, and $398 per acre-foot for South County). The current FY 2016-17 municipal and industrial groundwater production charges are $1,072 per acre-foot for North County and $393 per acre-foot for South County. The maximum amount of revenue that could be generated in FY 2016-17 without undergoing another Proposition 218 protest process is estimated to be $5.2M.
2. If the proposed increase in groundwater production charges is beyond the Established Maximum Increase, a public hearing must be held at least 45 days after the mailing of a notice to well owners (but no later than December 6, 2016) regarding that portion of the proposed increase that exceeds the Established Maximum Increase. This notice to well owners would be provided under the assumption, without waiving the District’s rights to the contrary, that such a rate increase (beyond the Established Maximum Increase) must meet the requirements under Proposition 218. Accordingly, the notice to well owners would include instructions on how to protest that portion of the proposed increase exceeding the Established Maximum Increase. Further, staff would file a supplemental Protection and Augmentation of Water Supplies Report with the Clerk of the Board at least 45 days before the hearing, but no later than October 21, 2016. Protests would be counted upon the closing of the public hearing in accordance with Resolutions 12-10 and 12-11. No further action is required to maintain rates at the level previously established.
FINANCIAL IMPACT:
Acceptance of staff recommendation will result in no financial impact. If the Board were to hold a public hearing to consider changes in groundwater production charges, the Water Utility would incur unbudgeted costs for preparing a supplemental Protection and Augmentation of Water Supplies Report, and costs for printing, postage, and publishing public notices in local newspapers.
CEQA:
Establishment of water rates is not a project under CEQA. CEQA Guidelines Section 15273: CEQA does not apply to establishment or modification of water rates.
ATTACHMENTS:
None.
UNCLASSIFIED MANAGER:
Manager
Jim Fiedler, 408-630-2736