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CITY OF SAN LEAI .—O ' APPROVED AND FORWARDED TO CITY COUNCIL STAFF REPORT DATE: TO: FROM: SUBJECT: July 30, 1998 John Jermanis, City Manager Jim O'Leary, Assistant Finance Director JJo ermanis C. anager M o ?8-14(f5g-oz g (1051) I I (R3� //Z1/.,nIa User Fee Service Rate Increases for Refuse, Sewer, Recycling, and Storm Water SUMMARY AND RECOMMENDATION Resolutions approving adjustments to a number of Enterprise Fund user service charges have been prepared for the City Council's August 3, 1998 agenda. The existing user fee charges for refuse, sewer service, recycling, and storm water were reviewed during the preparation of the 1998-99 City Council Approved Budget. As a result, rates for these services require upward adjustments to support the current service levels. Although the analysis indicates the need for even higher rates, the proposed increases are reasonably limited (ranging for residential services between $.30 and $1.40 per month for each service) for 1998-99. City Council approvals of the resolutions covering the necessary rate increases are recommended. Rates must be forwarded to the Alameda County Auditor -Controller for the 1998-99 secured property tax bills by August 10. Public hearings on August 3 will allow for public testimony regarding the rate increases. Proposition 218, although known as the Right to Vote on Taxes Act, makes special provisions for the imposition of property related user fees. Unlike the requirement for taxes, there is no election requirement for these fees. In the past, rate increases would have been implemented by ordinance after a public hearing. However, under Proposition 218 the notice and public hearing requirements have changed. The Finance Department provided written notice to all property owners and tenants potentially affected by the increases. Under the protest provisions of Proposition 218, over ten thousand protests are required to preclude City Council approval of the changes. BACKGROUND Over the past five years, operating cost increases in three of the City's Enterprise Fund activities, Water Pollution Control, Refuse and Storm Water, have been offset by technology improvement and productivity increases. During this period, stable rates have benefited industrial, commercial, and residential users. The existing user fee charges were reviewed during the preparation of the 1998-99 City Council Approved Budget. As a result of this analysis, rates for these three funds require upward 1.5