HomeMy WebLinkAboutCity Council - 2019-32 RESOLUTION NO. 2019-32
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF HUNTINGTON BEACH READOPTING AND REVISING
THE CITY'S WATER COMMODITY RATES
WHEREAS, Section 14.12.040 of the Huntington Beach Municipal Code requires
that the City shall charge a Water Commodity Rate to recover the cost to the City for
delivering water to customers, per 100 cubic feet of water of water. The Water
Commodity Rate shall be set by a Resolution adopted by a two-thirds vote of the
members of the City Council; and
The City of Huntington Beach has an established methodology for annually
adjusting its water commodity rates, based primarily on the cost to the City charged by
the Orange County Water District("OCWD") and the Municipal Water District of
Orange County ("MWDOC") for water, most recently pursuant to Resolution No. 99-50;
and,
As of July 1, 2018, the City Water Commodity Charge was $2.1063 per billing
unit of water for domestic, commercial and industrial services. A billing unit of water is
100 cubic feet; and,
Pursuant to Huntington Beach Municipal Code Section 14.12.045, the City
Council shall adjust water commodity rates in order to maintain a balanced budget,
provided that no rate shall exceed the reasonable cost of providing the services, facilities
or regulatory activity for which the rates is charged; and,
Pursuant to Proposition 218 and Government Code Sections 53755 and 53756, an
agency providing water service may adopt a schedule of adjustments for up to five(5)
years to pass through increases in commodity cost of water; and,
The City Council desires to establish the Water Commodity Rates for the next
five years,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Huntington Beach that the City's water commodity charges shall be annually adjusted,
beginning July 1, 2019, and for the following five years through June 30, 2024, as follows:
1. Pass-Through Formula for Water Commodity Rate. Beginning July 1, 2019, the
per cubic foot Water Commodity Charge shall be adjusted based on the following factors:
(A) an adjustment in OCWD replenishment assessment("RA"); (B) an adjustment in the
cost of Metropolitan Water District of Southern California("MWD") water purchased
through the MWDOC; and/or (C) when OCWD changes the Basin Pumping Percentage
("BPP"):
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RESOLUTION NO. 2019-32
(A) Formula for Adjusting City Billing Unit Charge When OCWD Adjusts the
RA:
Annual adjustments to the City's water commodity rate =
additional cost per acre foot x BPP /conversion factor=
adjustment per billing unit
By way of example: Assume OCWD raises the RA by $10.00/acre foot ("af');
and the current BPP = 75% (or 0.75); and using a constant conversion factor of
435.6 billing units/af, then:
Adjustment in Water Usage Rate = $10.00 per of x 0.75 /435.6 billing units per of
_ $0.0172/billing unit
(B) Formula for Adjusting City Billing Unit Charge When MWDOC Adjusts
the Charge to City For MWD Water:
Annual adjustments to the City's water commodity rate =
additional cost per acre foot x MWD percentage / conversion factor=
adjustment per billing unit
By way of example: Assume:
• MWD increases the cost of an acre foot of water("af') by $50.00; and,
• the current BPP = 75% (or 0.75); and,
• the MWD percentage = 1.00 - BPP = 1.00—0.75 = 0.25; and,
• using a constant conversion factor of 435.6 billing units/af, then:
Then, the Adjustment in Water Usage Rate = $50.00 per of x 0.25 /435.6 billing
units per of= $0.0287 per billing unit
(C) Formula For Adjusting;City Billing Unit Charges When OCWD Changes
the BPP
The City's Water Usage Rate refers to the blended cost to the City of obtaining an
acre foot of groundwater from OCWD and an acre foot of imported water from
MWDOC, as adjusted by the percentage of water demand that may be met
through groundwater according to the BPP that OCWD establishes annually.
Consequently, the annual adjustment in the City's Water Usage Rate = (new cost
per acre foot - existing cost per acre foot) /conversion factor= adjustment per
billing unit, where the following apply:
Existing cost/af= (existing BPP x RA) + (MWD percentage x MWD rate).
New cost/af= same formula as example (B) above with new BPP and MWD
percentage.
By way of example: Assume:
• OCWD adjusts the BPP from the current 75%to 70%; and,
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RESOLUTION NO. 2019-32
• the current RA= $462.00/af; and,
• the current MWD rate = $1,050.00/af; and,
• the MWD percentage = 1.00 -BPP; and,
• conversion factor=435.6 billing units/af
Then, the Adjustment in City's Water Usage Rate = (new cost/af- existing
cost/af) /conversion factor.
Existing cost/af = (0.75 x $462.00 per af) + (0.25 x $1.,050.00 per af)
_ $346.50 per of+ $262.50 per of
_ $609.00 per of
New cost/af = (0.70 x $487.00 per af) + (0.30 x $1,078.00 per af)
_ $340.90 per of+ $323.40 per of
_ $664.30 per of
New cost/af- existing cost/af= $664.30 per of- $609.00 per of= $55.30 per of
Increase in City's Water Usage Rate = $55.30 per of/435.6 billing units per of
_ $0.1270 per billing unit
2. Implementation of Commodity Rate Adjustments. Adjustments based on these
criteria will be determined beginning July 1, 2020, and continuing each July 1, including
July 1, 2024. Notice of any adjustment to the Water Commodity Rate shall be provided
by way of an insert in the monthly water and sewer bill at least thirty (30) days before the
effective date of the rate adjustment.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach
at a regular meeting thereof held on the 20th day of May , 2019.
ATTEST: o -
Z�4i�
City Clerk Mayor
REVIEWED AND APPROVED: APPROVED AS TO FORM:
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City Manager VaCity Attorney
INITIATED AND APPROVED:
irector of Publ�idk/—o r k-
3
19-7578/203729
Res. No. 2019-32
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, ROBIN ESTANISLAU, the duly elected, qualified City Clerk of the
City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do
hereby certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a Regular meeting thereof held on May 20, 2019 by the following vote:
AYES: Brenden, Carr, Semeta, Posey, Delgleize, Hardy
NOES: Peterson
ABSENT: None
RECUSE: None
City Clerk and ex-officio Clerk of the
City Council of the City of
Huntington Beach, California