HomeMy WebLinkAboutInfo Rprt - Increase in Water Svc & Consumption ChargesCITY OF PALM DESERT
PUBLIC WORKS DEPARTMENT
STAFF REPORT
REQUEST: RECEIVE AND FILE INFORMATION REGARDING PROPOSED
INCREASE IN WATER SERVICE AND CONSUMPTION CHARGES
BY THE COACHELLA VALLEY WATER DISTRICT
SUBMITTED BY: Mark Greenwood, P.E., Director of Public Works
DATE: June 9, 2016
CONTENTS: Water Rate Increase Impact Analysis
Recommendation
By Minute Motion, receive and file information regarding proposed increase in
water service and consumption charges by the Coachella Valley Water
District (CVWD).
Strategic Plan Obiective
The requested action does not directly impact the strategic plan.
Background
CVWD has published proposed significant increases for landscaping water service and
consumption charges. Balloting for this proposal will occur at the June 14, 2016, CVWD
Board of Directors meeting.
Staff has evaluated the potential impacts to landscaping budgets and determined that
there would be a more than 275 percent increase in water cost over the next 5 years:
from approximately $235,000 in 2015 to more than $650,000 by 2020. Staff will adjust
the FY 2016/17 budget at mid -year to account for this increase, and adjust future
budgets accordingly.
Staff Report
Direct Staff to Submit Written Protests for Proposed CVWD Increase
Page 2of2
May 26, 2016
Fiscal Analysis
If the proposed increases are approved by the CVWD Board of Directors, the future
fiscal impact will be significant.
Prep d
Mark re nwood, RE
DirectTr I
f Public Works
Approval:
t-
stin McCarthy, Interim nager
Janet 'i"oor Director of Finance
CITY OF PALM DESERT
PUBLIC WORKS DEPARTMENT
INTEROFFICE MEMORANDUM
To: Mark Greenwood, P.E., Director of Public Works
From: Randy Chavez, Landscape Supervisor
Date: May 12, 2016
Subject: Water Rate Increase Impact Analysis
On June 14, 2016, CVWD's Board of Directors will conduct a public hearing to consider
a proposed schedule of increases and changes to the rates and charges for water
service. The increases would take effect on July 1, 2016, with subsequent increases
proposed annually over the next four years.
City staff conducted the attached cost analysis of what the impact of the proposed
increases will have on the City. As illustrated, the fixed water service charges will
immediately increase by $9,080.70 per month or $108,968.40 per year; a potential
increase of 484.5%. In an effort to illustrate a true comparison, staff used the CCFs (100
cubic feet) of water used by Public Works from January through December 2015 and
calculated them at the current water tier rates. Using the same CCFs, staff compared
them against to the potential water tier rate increases. For water usage, there will be an
immediate annual increase of at least $45,047.71; a potential increase of at least
21.2%.
The Public Works Department's total water budget for FY16/17 was approved at
$322,500. Based on our calculations, the annual water service of $131,456.40
($10,954.70 x 12), the annual water usage of $257,131.48, and the Civic Center Well
Site cost of $15,269.50 (not included in the chart), brings the total annual water cost to
$403,857.38. Therefore, staff anticipates an excess of at least $81,357.50 in FY16/17.
Also, be advised that should the rate schedule be approved by the CVWD Board, staff
is calculating that Public Works water budget will increase to over $650,000 by FY
20/21.
If you have any rther questions, feel free to contact me at extension 462.
Ran t6ave
Landscape Supervisor
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