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CITY OF SAN LEANDRO <br />STAFF REPORT <br />Date: July 29, 1998 <br />To: <br />From: <br />Subject: <br />John J. Jermanis, City Manager <br />Robert J. Rockett, Public Works <br />APPROVED AND <br />FORWARDED <br />TO CITY COUNCIL <br />John J. Jermanis M 0 <br />City Manager <br />(Its/ <br />c�8-cam-4 <br />Water Pollution Control Enterprise Fund Rate Increase <br />SUMMARY AND RECOMMENDATION <br />In March 1985, the City Council adopted a pay-as-you-go replacement and reserve program <br />which annually increases wastewater rates by 5% plus CPI (San Francisco Bay Area Consumer <br />Price Index). Staff recommends the City Council adopt the attached resolution, which increases <br />the Wastewater Enterprise Fund rate 9%. <br />DISCUSSION <br />A Wastewater Replacement Financing Study was first completed in March 1985 and updated <br />every two years. The most recent document was completed in April 1997. The report states, <br />"Past unfunded depreciation is estimated to be $50 million dollars and current annual <br />depreciation is estimated to be $2 million dollars, each requiring funding which is the purpose of <br />the study presented herein." The Council's established policy is to gradually implement pay-as- <br />you-go replacement financing via accruing reserves annually, increased each fiscal year for <br />inflation plus 5%. The most recent analysis finds the increase in fiscal year 2021-22. In keeping <br />with this thirteen year policy, the Wastewater Enterprise Fund rates should be increased 5% plus <br />CPI since the time of last increase. This rate increase results in $437,000 of additional revenue, <br />which will fund reserves for a failing infrastructure. <br />The process for Proposition 218 requires the City provide written notice to the property owner of <br />the amount of the fee, the basis for the fee, and the date, time and place of the required public <br />hearing. On Monday, June 15, 1998, the City Council authorized a public hearing notice be <br />mailed to all affected individuals informing them that a public hearing would be held at City Hall <br />on August 3, 1998, to consider a rate increase of 9% to the Wastewater Enterprise Fund. A copy <br />of the notices are attached for Council information. <br />33 <br />