HomeMy WebLinkAbout03 - Amending Chapter 14.12 Water Rates and ChargesTO:
FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
November 5, 2019
Agenda Item No. 3
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Mark Vukojevic, Utilities Director - 949-644-3011,
mvukojevic@newportbeachca.gov
PREPARED BY: Joshua Rosenbaum, Senior Management Analyst,
jrosenbaum@newportbeachca.gov
PHONE: 949-644-3057
TITLE: Ordinance No. 2019-16: Amending Chapter 14.12 Water Rates and
Charges
ABSTRACT:
In preparation for the upcoming Water Rate Public Hearing on November 19, 2019, staff
recommends this Ordinance modification to amend Chapter 14.12 Water Rates and
Charges. This will allow the City Council to adopt the proposed water rate adjustments
by Resolution and place water use and service charges on the City's Schedule of Rents,
Fines and Fees document (Master Fee Schedule) or successor document. This
Ordinance would statutorily remove the water rates and charges from the Newport Beach
Municipal Code (NBMC) and any future water rate changes would be adopted by
Resolution.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and,
b) Introduce Ordinance No. 2019-16, An Ordinance of the City Council of the City of
Newport Beach, California, Amending Chapter 14.12 (Water Rates and Charges) of
the Newport Beach Municipal Code Setting Water Rates by Resolution and Other
Related Changes, and pass to second reading on November 19, 2019.
FUNDING REQUIREMENTS:
This action does not change current or future water rates. Rather, this action will likely
generate staff efficiencies using a resolution process versus an ordinance process for
water rates. If the water rates are adjusted on November 19, 2019 and subsequent water
rate adjustments occur, the rates will be set by resolution and placed in the City's Master
Fee Schedule.
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Ordinance No. 2019-16: Amending Chapter 14.12 Water Rates and Charges
November 5, 2019
Page 2
DISCUSSION:
In 2017, when the City adjusted the sewer rate structure and charges, staff recommended
and City Council approved the removal of the sewer rates from the NBMC and included
them in the City's Master Fee Schedule. Staff recommends a similar action now be taken
for water rates. This proposed Ordinance amending the NBMC Chapter 14.12 moves
water utility rates and future rate changes from the Municipal Code (Ordinance process)
to the City's Master Fee Schedule (Resolution process).
A Resolution process for utility rates is very common with other agencies, especially with
the advent of new state laws and Proposition 218. State law commonly known as
Proposition 218 supersedes and dictates the multi -step requirements, notifications and
public hearing process for all actions associated with utility (water) rates. For example,
Proposition 218 requires that every property owner receive a comprehensive written
notice regarding rate changes. (Over 27,300 public notices were mailed for the planned
Water Rate Public Hearing on November 19). Continuing to have water rates in the
Municipal Code (Ordinance process) is antiquated and redundant in terms of process and
notifications.
The proposed Ordinance also makes changes and cleans up administrative items within
the Code. A redlined version of the NBMC amendment showing the existing
Chapter 14.12 (Attachment A) and a final, clean version of Chapter 14.12 (Attachment B)
are attached for Council's review.
If this Ordinance is approved, a second reading of the Ordinance will be held in a parallel
action with the planned Water Rate Public Hearing on November 19, 2019. At that
meeting, staff will be recommending approval of new water rates and this second
Ordinance reading to remove the existing rates from NBMC Chapter 14.12 and include
them in the City's Master Fee Schedule.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A —Ordinance (Redline)
Attachment B —Ordinance No. 2019-16
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ATTACHMENT A
Chapter 14.12
WATER RATES AND CHARGES*
Sections:
14.12.010
Service Fees.
14.12.020
Water Rates Established.
14.12.050
Meter Installation.
14.12.060
Building Construction Purposes.
14.12.070
Nonspecified Uses.
14.12.080
Private Fire Lines.
14.12.085
Establishing Service.
14.12.090
Delinquent Water Service Discontinuance and Fees.
14.12.095
Customer Requests.
14.12.100
Due Date.
14.12.105
Change of Address.
14.12.110
Delinquent Notice.
14.12.120
Discontinuance Notice.
14.12.125
Delinquent Water Service Restoration.
14.12.130
Deposit Requirements.
14.12.135
Service Interference.
14.12.140
Customer Request for Service Discontinuance.
14.12.150
Third -Party Notification.
14.12.160
Multi -Unit Residential Structures and Mobile Home Parks.
14.12.170
Unsafe Equipment.
14.12.010 Service Fees.
A. The fees for the installation of water services, water meters or water services
including meters, or changing the size of those services already in place, shall be paid
in advance.
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B. The installation fee for a water service shall be the City's costs including all labor
and materials. The installation fee shall be as established by the Utilities pal
Qperatien-s Department, and the cost shall be paid to the Finance Department by the
person applying for such installation before the work of connecting the main with the
property is begun.
C. The installation fee for a new meter or change in meter size to an existing water
service is identified by City Council resolution.
14.12.020 Water Rates Established.
A. There shall be charged and collected a monthly fixed water service charge,
established by resolution of the City Council, from each customer for each meter. The
fixed water service charge recaptures the City's costs to operate and maintain the water
system, innlurdinn required nonital infrastrU Gt ire imnrevementc. Foxed water corvine
following cr•hed ale•
Water Meter S07e CV2n10 FY2011 CV2n12 FY2013 FY2014
5!8 or 3/4" $8-27 $13.09 $1511 $16.63 $17.27
V $13.78$25.19$28.79
$82.65 $130.91 $151.14 $166.30 $172.73
4
6" $275.50 $436.37 $503.91 $554.32 $575.76
$921.22
4W! $ 7� $4 ')�� p � Q N 4-� $4 Fez $1 Fro
4Z $� ,-2?T:T? $Z,44$Z,,33� $w2564:27 $2;663:43
For each I'ving .,'f .,eXGess of one per voter meter, per month $_1_88
M
B. There shall be charged and collected a T#e-commodity charge., established by
resolution of the City Council, for water supplied to consumers through a meter., other
than pursuant to a Written r--.n-ni.raGt approved by the City GounGil, shall be effeGtive
janu. rystoTcaGh year.he Gem h�ovGO
y Gharne nrimariI��eGers-the
purGhased water by the City for its Gusterners. and shall be Gharged aGGording to the
follo\A mRg cashed ale.
- rv� rv� rv� rv� €Y2014
Commodity Charge $N �
14.12.050 Meter Installation.
The City, as a condition of water service, shall have the right to install water meters on
any and all water services, and the charges for water used through the meter shall be in
accordance with the applicable meter rates established by resolution of the City
Councll.SeGtien 14.12.020.
14.12.060 Building Construction Purposes.
Service may be made to a lot or parcel of land on which a building is being constructed
for construction purposes only from the time the building permit is issued until the
building is completed or until the time a water meter is installed to serve such lot or
parcel, whichever first occurs at the rate established by resolution of the City Council.;
for a flat rate of twenty five dollars ($25.00) ner month for eanh gale thou sand (2,000)
square feet of floor sparse or frantion thereof of G inh building.
14.12.070 Nonspecified Uses.
Water used for all other purposes not hereinbefore enumerated shall be furnished and
charged at either existing meter rates or at a special rate to be fixed by the City Council
under separate agreement with the consumer.
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14.12.080 Private Fire Lines.
Fees for private fire line service shall be charged at a rate established by resolution of
the City Council. of fide dollars ($5.00) per inch diameter per month per coriir+o
If such line is found tapped for domestic use, a meter shall be installed on such service
at the expense of such consumer and the regular meter rates shall be charged
thereafter. The right shall be reserved to disconnect such fire service from the City's
main by the direction of the City Council on recommendation of the City Manager.
14.12.085 Establishing Service.
A. When establishing an account the customer shall pay a fee as set forth by
resolution of the City Council to establish water service in the customer's name at the
property. The fee shall be payable upon application for water service.
B. An application for water service, as provided by the Revenue Division of the
Finance Department, shall be used for the purpose of establishing water service into a
new customer's name. Property owners may enter into a continuous service agreement
which will authorize the transfer of water service into the name of the property owner
upon a tenant's notice to discontinue service. Property owners shall be responsible for
all water service charges at their premises. Water service will not be established in the
name of a customer other than the property owner without the written authorization of
the owner, or the owner's authorized representative.
C. Upon application and payment of an establishment fee, the water will be turned on.
D. A customer's newly established service may be discontinued for nonpayment of a
bill for services previously rendered to the customer at any location served by the City
provided such bill is not paid within fifteen (15) days after mailing of a notice of
discontinuance of water service stating that present service will be discontinued for
nonpayment of such bill for prior service.
14.12.090 Delinquent Water Service Discontinuance and Fees.
A. Water service to any premises may be discontinued because of nonpayment of a
bill or violation of any of the provisions of this chapter, or ordered turned off by the
owner or tenant, or for failure to establish a water service agreement with the City.
B. The City is not responsible or liable for damage done to the customer's premises
that may result from the discontinuance or restoration of water service pursuant to this
chapter.
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C. Service may not be discontinued for nonpayment on any Saturday, Sunday, legal
holiday or at any time during which the business offices of the City are not open to the
public or in any of the following situations:
1. During the pendency of an investigation by the City of a customer dispute or
complaint.
2. When a customer has been granted an extension of the period for payment of
a bill.
3. When such discontinuance would be especially dangerous to the health of the
customer or a full-time resident of the customer's household. Certification from a
licensed physician, public health nurse or social worker may be required by the
City.
4. When the customer or full-time resident of the customer's household is
temporarily unable to pay for such service and is willing to arrange installment
payments satisfactory to the City, including arrangements for prompt payment of
subsequent bills.
D. The fee for discontinuance shall be the City's costs including all labor and materials
and is identified by Council resolution.
14.12.095 Customer Requests.
Any residential customer who has initiated a complaint or requested an investigation
within ten (10) days of receiving the disputed bill, or who has, before discontinuance of
service, made a request for extension of the payment period of a bill asserted to be
beyond the means of the customer to pay in full within the normal period for payment,
shall be given an opportunity for review of the complaint, investigation, or request by the
City. The review shall include consideration of whether the customer shall be permitted
to amortize any unpaid balance of the delinquent account over a reasonable period of
time, not to exceed twelve (12) months.
Any customer whose complaint or request for an investigation has resulted in an
adverse determination by the City's Revenue Division may appeal the determination to
the Finance Director or his or her designee.
No discontinuance of service shall be affected for any customer complying with an
amortization agreement, provided the customer also keeps the account current as
charges accrue in each subsequent billing period. If a residential customer fails to
comply with an amortization agreement, the City shall not discontinue service without
giving notice to the customer at least forty-eight (48) hours prior to discontinuance of the
conditions the customer is required to meet to avoid discontinuance, but this notice
does not entitle the customer to further investigation by the City.
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14.12.100 Due Date.
All customers whose premises are connected to the municipal water system shall be
billed on a regularly scheduled basis and all charges shall be received within nineteen
(19) days after the date of the mailing of the municipal services statement.
14.12.105 Change of Address.
Failure to receive mail will not be recognized as a valid excuse for failure to pay charges
when due. It is the customer's responsibility to notify the Revenue Division of any
changes in mailing address or customer information.
Change in the ownership of a property supplied with City water and changes in
customer status must be filed in writing at the Revenue Division on forms provided for
that purpose.
14.12.110 Delinquent Notice.
When a municipal services statement has become past due, a delinquent notice will be
mailed with a fifteen (15) day discontinuance of water service advisement. In addition to
the past due charges, a penalty fee equal to ten percent of the delinquent amount past
due will be added.
14.12.120 Discontinuance Notice.
At least forty-eight (48) hours prior to the discontinuance of water service, the City shall
serve an additional notice of intent to discontinue water service on the premises where
service is supplied, either by mail or in person. Every notice of intent to discontinue
water service shall include the following information:
1. The name and address of the customer whose account is delinquent.
2. The amount of the delinquency.
3. The date by which payment or arrangements for payment is required in order
to avoid service discontinuance.
4. The procedure by which the customer may initiate a complaint or request an
investigation concerning services or charges.
5. The procedure by which the customer may request amortization of the unpaid
charges.
6. The procedure for the customer to obtain information on the availability of
financial assistance, including private, local, State, or Federal sources, if
applicable.
7. The telephone number of the representative of the City's Revenue Division
who can provide additional information or institute arrangements for payment.
14.12.125 Delinquent Water Service Restoration.
A. Service that has been discontinued may not be restored until payment of all
delinquent water service charges, including the restoration charge and one hundred
dollar ($100.00) fine, have been received by the Finance Department.
1. Upon payment, service shall be restored during regular or non -regular working
hours.
2. The restoration charge for meter turn on during regular and non -regular work
hours is identified by Council resolution.
3. Regular work hours are Monday through Thursday, 7:00 a.m. to 4:30 p.m.,
and Friday, 7:00 a.m. to 3:30 p.m.
B. Any service wrongfully discontinued shall be restored without charge for the
restoration of service, and a notation thereof shall be mailed to the customer at the
customer's billing address. A credit shall be applied to the customer's next municipal
services bill. The credit shall be set by Council ordinance.
14.12.130 Deposit Requirements.
A. In the event that the applicant for water service is not the owner of the property to
be supplied with water or does not own the improvements thereon, and the property is
located in a nonresidential zone, a deposit shall be required equivalent to one and one-
half (1 1/2) times the average billing for the facility or for the user classification
applicable to the property, as determined by the Revenue Division Manager.
B. In the event that the water service customer has had his/her water service
discontinued twice for nonpayment, a deposit shall be required equivalent to two times
the average regularly scheduled billing for the customer before water will be restored.
Water service will not be discontinued for nonpayment until the amount of any deposit
made to establish credit for that service has been fully absorbed.
14.12.135 Service Interference.
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It is unlawful for any person to receive water after service discontinuance by the City,
without full compliance with the provisions of this chapter.
14.12.140 Customer Request for Service Discontinuance.
A. Whenever a customer desires to discontinue service, the customer shall give not
less than two working days' (forty-eight (48) hours) written notice thereof to the
Revenue Division of the Finance Department.
B. In accordance with such notice, the City shall read the water meter, prepare a
closing statement of all unpaid bills for water furnished by the City to the customer up to
that time and, unless a current continuous service agreement with the property owner is
in place, shut off the water to the premises. If the customer has a deposit with the City,
the Finance Department will return the balance, after deducting any unpaid charges.
14.12.150 Third -Party Notification.
The City shall make available to its residential customers who are dependent adults as
defined in paragraph (1) of subdivision (b) of Section 15610 of the Welfare and
Institutions Code, a third -party notification service, whereby the City will attempt to notify
a person designated by the customer to receive notification when the customer's
account is past due and subject to discontinuation. The notification shall include
information on what is required to prevent discontinuance of service. The residential
customer shall make a request for third -party notification on a form provided by the City,
and shall include the written consent of the designated third party. The third -party
notification does not obligate the third party to pay the overdue charges, nor shall it
prevent or delay discontinuance of service.
14.12.160 Multi -Unit Residential Structures and Mobile Home Parks.
Whenever the City furnishes either individual metered or master metered water service
to residential occupants in a multi -unit residential structure or mobile home park, where
the owner, manager or operator is listed as the customer of record, the City shall make
a good faith effort to inform the residential occupants, by means of a written notice,
when the account is in arrears, that service will be terminated at least fifteen (15) days
prior to such discontinuance. Such notice shall further inform the residential occupants
that they have the right to become customers to whom service will then be billed,
without being required to pay any amount which may be due on the delinquent account.
The City shall not be required to make water service available to the residential
occupants unless each residential occupant agrees to the terms and conditions of
service. However, if one or more of the residential occupants are willing and able to
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assume responsibility for the entire account to the satisfaction of the City, or if there is a
physical means legally available to the City of selectively discontinuing service to those
residential occupants who have not met the requirements of the City, the City shall
make water service available to those residential occupants who have met those
requirements.
14.12.170 Unsafe Equipment.
The City may refuse to establish or may discontinue service to any customer if any part
of the plumbing or other equipment, or use thereof, is determined by the City to be
unsafe or in violation of applicable laws, ordinances, rules or regulations of public
authorities, or of any condition existing upon the customer's premises shall be
determined to endanger the City's service facilities, until it shall have been put in a safe
condition or the violation remedied. The City does not assume any responsibility of
inspecting or repairing the customer's plumbing or other equipment or any part thereof
and assumes no liability therefor.
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ATTACHMENT B
ORDINANCE NO. 2019-16
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, AMENDING CHAPTER
14.12 (WATER RATES AND CHARGES) OF THE
NEWPORT BEACH MUNICIPAL CODE SETTING WATER
RATES BY RESOLUTION AND OTHER RELATED
CHANGES
WHEREAS, the City of Newport Beach ("City") charges users of the City's water
system both a fixed meter charge and a variable commodity -use charge to pay for the
operation and maintenance of the City's water system, including required capital
infrastructure improvements;
WHEREAS, the City's current water rates are codified in Chapter 14.12 (Water
Rates and Charges) of the Newport Beach Municipal Code;
WHEREAS, on March 12, 2018, the City's Utilities Department retained Raftelis
Financial Consultants, Inc. to prepare a water rate study in order to analyze the current
cost to the City of providing water services and recommend an adjustment to the current
water rates;
WHEREAS, on November 19, 2019, the City Council will hold a public hearing on
the proposed water rates in accordance with California Constitution Article XIIID, Section
6, more commonly referred to as Proposition 218; and
WHEREAS, by this ordinance, the City Council intends to amend applicable
provisions of Chapter 14.12 setting water rates via resolution adopted by the City Council
instead of by ordinance and making other related changes.
NOW THEREFORE, the City Council of the City of Newport Beach ordains as
follows:
Section 1: Section 14.12.010(6) (Service Fees) of the Newport Beach
Municipal Code is hereby amended to read as follows:
B. The installation fee for a water service shall be the City's costs including all labor and
materials. The installation fee shall be as established by the Utilities Department, and the
cost shall be paid to the Finance Department by the person applying for such installation
before the work of connecting the main with the property is begun.
Section 2: Section 14.12.020 (Water Rates Established) of the Newport Beach
Municipal Code is hereby amended to read as follows:
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Ordinance No. 2019 -
Page 2 of 3
A. There shall be charged and collected a monthly fixed water service charge,
established by resolution of the City Council, from each customer for each meter. The
fixed water service charge recaptures the City's costs to operate and maintain the water
system.
B. There shall be charged and collected a commodity charge, established by resolution
of the City Council, for water supplied to consumers through a meter.
Section 3: Section 14.12.050 (Meter Installation) of the Newport Beach
Municipal Code is hereby amended to read as follows:
The City, as a condition of water service, shall have the right to install water meters on
any and all water services, and the charges for water used through the meter shall be in
accordance with the applicable meter rates established by resolution of the City Council.
Section 4: Section 14.12.060 (Building Construction Purposes) of the Newport
Beach Municipal Code is hereby amended to read as follows:
Service may be made to a lot or parcel of land on which a building is being constructed
for construction purposes only from the time the building permit is issued until the building
is completed or until the time a water meter is installed to serve such lot or parcel,
whichever first occurs at the rate established by resolution of the City Council.
Section 5: Section 14.12.080 (Private Fire Lines) of the Newport Beach
Municipal Code is hereby amended to read as follows:
Fees for private fire line service shall be charged at a rate established by resolution of the
City Council.
If such line is found tapped for domestic use, a meter shall be installed on such service
at the expense of such consumer and the regular meter rates shall be charged thereafter.
The right shall be reserved to disconnect such fire service from the City's main by the
direction of the City Council on recommendation of the City Manager.
Section 6: The recitals provided in this ordinance are true and correct and are
incorporated into the substantive portion of this ordinance.
Section 7: If any section, subsection, sentence, clause or phrase of this
ordinance is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this ordinance. The City
Council hereby declares that it would have passed this ordinance and each section,
subsection, clause or phrase hereof, irrespective of the fact that any one or more sections,
subsections, sentences, clauses and phrases be declared invalid or unconstitutional.
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Ordinance No. 2019 -
Page 3 of 3
Section 8: The City Council finds the approval of this ordinance is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Section 15060(c)(1),
15060(c)(2) and 15060(c)(3) of the California Code of Regulations, Title 14, Division 6,
Chapter 3 ("CEQA Guidelines"), in that the ordinance setting water rates via resolution
does not involve the exercise of discretionary powers by the City and will not result in a
direct or reasonably foreseeable indirect physical change in the environment. Additionally,
the ordinance is not a "project" as defined by Section 15378 of the CEQA Guidelines for
the reasons set forth above.
Section 9: Except as expressly modified in this ordinance, all other sections,
subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code
shall remain unchanged and shall remain in full force and effect.
Section 10: The Mayor shall sign and the City Clerk shall attest to the passage
of this ordinance. The City Clerk shall cause the ordinance, or a summary thereof, to be
published once in the official newspaper of the City. Although authorized to go into effect
thirty (30) days after its adoption, this ordinance shall go into effect on January 1, 2020.
This Ordinance was introduced at a regular meeting of the City Council of the City
of Newport Beach held on the 5th day of November, 2019, and adopted on the 19th day
of November, 2019, by the following vote, to -wit:
AYES:
10E-AT&I
ABSENT:
DIANE B. DIXON, MAYOR
ATTEST:
LEILANI I. BROWN, CITY CLERK
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
'AARON C. RP, CITY ATTORNEY
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