MARTINEZ, Calif. – Martinez City Council could adopt a resolution today that would increase water rates annually through 2024.
City Engineer Tim Tucker will be giving the Council a water utility financial plan and rates study compiled by Municipal Financial Services. He will ask the Council to adopt a resolution announcing the intent to increase water service rates, setting a public hearing and authorizing city staff to mail notices to Martinez water customers.
The proposed rate increases residential bills from about $69 effective March 1 to $75 in 2020. Similar percentage increases would be made through 2024, according to the recommendations.
Tucker wrote in his report that the previous rate study was done in 2007, and that resulted in the water rates adopted from then to 2009.
Then in 2010, quantity charges, meter charges and private fire protection service charges became adjusted annually by the same percentage of increase of untreated water costs charged to the city by Contra Costa Water District (CCWD), which has increased the cost of untreated water by 6 percent to 6.5 percent in the past few years, Tucker wrote.
The Council’s Budget/Finance Subcommittee saw the findings of the most recent rates study Jan. 9, and that panel recommended the Council proceed with putting the recommended rate increases in place.
Besides developing rate increase recommendations, the study showed that the risk of future droughts will have negative impacts on water quality and reliability, that the city’s aging water infrastructure needs to be maintained; and that both state and federal standards and requirements are being raised, requiring Martinez to comply with more stringent water program mandates.
The rate changes won’t just affect the many Martinez residents whose metered water is provided through the city.
Martinez water service area extends beyond city limits along the northeast and southwest into Contra Costa County and to the southeast into Pleasant Hill.
Likewise, East Bay Municipal Utility District reaches into the city boundary to the Southeast.
For the 2,540 customers of the Martinez’s water system, the city gets untreated water from CCWD through the Contra Costa Canal, which is part of the Central Valley Project developed by the United States Bureau of Reclamation, Tucker wrote.
The water is stored in the Martinez Reservoir at the Contra Costa Canal and the CCWD Shortcut Pipeline. About 1.600,000 hundred cubic feet of water is distributed annually to 10,100 connections, Tucker wrote.
Martinez treats the water before its distributed to its customers, and the distribution system consists of storage reservoirs, pump stations, pipelines and other equipment in four elevation zones.
Tucker said the recommended new rates are designed to reach seven objectives – revenue sufficiency to underwrite operating and capital costs, bonded debt and reserves; revenue stability through recovering fixed and variable costs; administering a cost-efficient implementation and ongoing monitoring and updating of rates; keeping the rates as affordable as possible while maintaining the utility’s financial position and credit rating; assuring fairness to customers; making the changes acceptable to customers and meeting the utility’s fiscal management goals of both a strong credit rating as well as reducing any risk of default.
Tucker wrote that water rates need to bring in about $74.1 million from Fiscal Year 2020 to Fiscal Year 2024. Another $1.6 million is expected from other sources, he said.
During the same period, expenditures would reach about $85 million. A loan disbursement of $10 million is planned for 2020, and the operating fund balance is expected to decline from about $5.8 million to $5.4 million during the five-year period, Tucker wrote. The target minimum reserve balance in Fiscal Year 2024 is $5.7 million.
If the Council agrees to proceed, the public hearing on the proposed water service rates would be 7 p.m. April 17 in the Council Chamber of Martinez City Hall.
In other matters on tonight’s agenda, Tucker will present the streets proposed for the Fiscal Year 2019-20 annual Measure D road repairs.
Measure D, approved by residents in 2016, is a 15-year half-cent sales tax that produces revenue that can only be spent on road maintenance and repairs inside the city, according to Tucker’s report..
Some projects will involve reconstruction, removing asphalt and base course to be ground and mixed with a stabilizer into a new base with a new wearing surface of asphalt or cape seal applied. Other jobs are overlays, which involve repairing major cracks and other damage, then coating the street with asphalt at least 1.5 inch thick, an approach usually used on streets with higher vehicle volume.
Rubberized cape seal is a common surface treatment on suburban residential roads that still have a firm sub-base. After damage is repaired, the surface is treated with a layer of chip seal with small gravel that takes seven days to set. Then the rubber chip layer is slurry sealed.
Slurry seals also are used on roads with minimal cracking and can extend road life by another five years. Chip seal treatments usually can last three to five years, and crack seal, which inovles routing, cleaning and sealing pavement cracks more than a quarter inch, is done in preparation for future work, Tucker wrote.
Cape seal projects in Fiscal Year 2019-20 are proposed for neighborhoods in the Willow and Grandview area, Castro area, Hillside and Talbart’s northwest neighborhood, the Yale Street neighborhood, neighborhoods along North Morello Avenue and Morello Avenue near Village Oaks; and in Starflower, Sweetwater, Glacier, Vine Hill and Macalvey areas.
Paving is proposed for sections of Glacier Drive, Pine Street, Chilpancingo Parkway and several other streets.
The sales tax revenues also would pay for a proposed three-year paving contract for resurfacing and to fix base failures.
Senate Bill 1, the state gas tax increase, would underwrite repairs to Court Street, Alhambra Avenue and Berrellesa Street.
Tucker will raise two other issues during his presentation. One is whether Measure D funds should be used to repay bonds, the sale of which might let the city complete more paving projects at one time, possibly at lower costs although with additional interest expenses.
That approach was under consideration before revenues started accumulating. Between gas taxes and Measure D, the city’s paving budget has increased from just $450,000 annually to more than $5 million.
“The current level of funding was never anticipated when bonding was suggested,” Tucker wrote.
In fact, using bonds to “front load” a greater level of work would exceed the capacity of the city’s current staffing levels “and would likely be very disruptive to the community,” he wrote, adding that he no longer sees that approach as beneficial to Martinez at this time.
Another topic that needs addressing is the Muir Oaks neighborhood, which prior to its 1975 annexation into Martinez had roadways maintained by Contra Costa County. Those streets weren’t considered built to current city standards, but a maintenance district was never established.
The Council subcommittee has said more information is needed about such streets, and Tucker has suggested the city might meet with neighborhood residents on the matter.
The Finance Department typically has rolled over unspent paving funds allocated by the Council to the next round of paving and base failure work, and $375,000 is available for additional construction work, Tucker wrote.
Upon Council approval, city staff will start making preliminary designs for the paving projects, contacting utilities to make sure they and the city coordinate their repair and construction efforts and developing cost estimates.
“If there are additions or other changes outside the areas listed, staff will bring them to the subcommittee for final approval prior to advertisements for bids,” Tucker wrote.
Tucker also will recommend the Council approve authorizing the developer of Traditions at the Meadow, a subdivision, to establish a community facility district (CFD) and to give direction whether to include street and non-stormwater quality and detention storm drain maintenance within the CFD.
Also listed as Subdivision 9358, this is the former Pine Meadow Golf Course, the subject of controversy and lawsuits involving those who would prefer the privately-owned land to be maintained as open space.
The City Council approved the subdivision’s tentative map June 6, 2018, and since then, the developer’s engineers have finished their initial submittal of improvement plans, final map and other supporting information, Tucker wrote in his report.
If a CFD is created, it would be used to finance impact fees, infrastructure construction and public maintenance costs, including stormwater control and treatment approaches.
Cities have had trouble keeping such devices maintained, even when left up to a homeowners’ association, Tucker wrote.
The Statewide Community Infrastructure Program (SCIP), sponsored by the California Statewide Communities Development Authority, a joint powers authority of the League of California Cities and the California State Association of Counties, requires a public hearing so people can speak about the infrastructure program and bonds to be issued by the authority.
Certain findings must be made and authorizations must be given to participate in SCIP, Tucker wrote.
SCIP lets property owners finance impact fees and capital improvements that are payable by property owners upon receiving development entitlements or building permits. The CSCDA would impose an assessment on owners’ property to repay the portion of the bonds issued to finance the fees.
A property owner either can pay the impact fees once permits are issued and then get reimbursed from the SCIP bond proceeds when bonds are issued, or the fees are funded directly from the proceeds of the SCIP bonds.
Either way, the city never is at risk for receipt of impact fees, Tucker wrote.
Acting City Manager and Police Chief Manjit Sappal will ask the Council to adopt two resolutions tonight.
One would extend the memorandum of understanding between the city and the Laborers’ International Union of North America (LIUNA) Local 324, which has been negotiating with the city for several months and reached a tentative agreement to extend its agreement to June 30.
Sappal wrote that the city is in talks with its labor groups whose contracts were to expire Jan. 31.
The city has been covering the employees’ 6.2 percent contribution to Social Security in the form of a taxable reimbursement on their paychecks during the transition of the employees from the dissolved Pleasant Hill-Martinez Joint Facilities Agreement to the city of Martinez.
As part of that transition, employees started paying 6.2 percent of their salary toward Social Security, but with the tentative agreement reached Jan. 14, that 6.2 percent reimbursement would be converted to salary, Sappal wrote. In addition, the city has agreed to continue working with the union to move the employees to California Public Employees Retirement Services Health. The modifications are expected to cost $121,000.
The other resolution would authorize amending the Management Compensation Plan (MCP.) Employees who are not part of a recognized bargaining group are part of the MCP. These nonsworn MCP employees would receive a 6.2 percent increase to their base salary, at a cost of $108,000.
The Council will consider ratifying the appointments of Vice Mayor Noralea Gipner to the steering committee of the Community Based Transportation Plan and to succeed Councilmember Lara DeLaney on the Housing/Economic Development Subcommittee as well as the appointment of Jeremie Ginelli to the Parks, Recreation, Marina and Cultural Commission for a four-year term.
On the Consent Calendar, which can be decided by single vote, the Council will consider extending the lease of Sal’s Family Kitchen, 825 Escobar St., by Margarita Perez De Garcia through May 31 so the owner can move to its new site on Main Street.
Martinez bought the building July 25, 2018, and intends to demolish it to provide additional parking.
The Council also will consider accepting renovation of Parking Lot 4 by Breneman, Inc.; construction of the Reliez Valley Road Trail Spur by Pacific Infrastructure Construction; and the improvements and easements built at The Village at Arnold, a condominium at the intersection of Arnold Drive and Pacheco Boulevard.
The Martinez City Council will meet at 6 p.m. today in a closed session to discuss labor and legal matters. The regular meeting will start at 7 p.m. today in the Council Chamber of Martinez City Hall, 525 Henrietta St.