Martinez City Council announces intent to change water rates

Martinez City Hall

MARTINEZ, Calif. – Martinez City Council agreed Wednesday to start the process of revising it water rates to make its fee system “defensible.”

Many residential customers would see increases as a result, although a few customers with large meters will see their rates decline, according to a report presented by City Engineer Tim Tucker and Municipal Financial Services owner Tom Pavletic.

Customers will have a say in the matter under Proposition 218, a process under which notices will be mailed and during 45 days, recipients will be able to file protests against the proposed changes.

Since 2010, the quantity, meter and private fire protection service charges have been adjusted annually based on the percentage increase of untreated water costs charged to Martinez by the Contra Costa Water District, source of the city’s water.

That increase recently has been about 6 percent each year, but the local fee increases have been capped at 5 percent, the joint report said.

However, that system doesn’t reflect actual costs to the city for its water service, Pavletic said.

Martinez hasn’t had a cost of service water rate study since 2007, and since 2009, it has adopted periodic across-the-board increases in different parts of its rate structure, according to Pavletic’s report.

He said the current water rate study is a “cost of service” study that relates water service and the amount charged for that service.

Pavletic described the rate structure as a quantity charge for base costs, elevation zone costs for four different zones, meter charges and private fire service charges for customers who apply for that service.

Using the American Waterworks Association’s manuals and procedures, his company calculated revenue required from the rates, analyzed cost categories and then developed those rates using unit costs.

Measuring water use in units of hundred cubic feet (HCF), Pavletic’s company predicted total usage gradually would drop by about 2 percent annually for the next six years, from 1.6 million units in Fiscal Year 2018 to approximately 1.4 million units in Fiscal Year 2024.

Of the 10,030 water meters in Martinez, 96 percent are smaller than 3 inches, he said, and 93 percent are residential, either single family homes or multifamily units. Public customers account for 5 percent; commercial customers,4 percent; irrigation, 2 percent; fire service, another 2 percent; and industrial, about 0.2 percent.

Capital improvements are needed to the city’s water system, he said, and Tucker noted these projects have been talked about for some time and need to be completed in the next five years.

The Webster Street hydro system needs to be replaced; the Arnold Drive Pump 3 needs modifying; the water treatment plant needs improvements; ozone equipment is needed, the St. Mary’s hydro system needs to be upgraded; building maintenance needs to be done and water mains need to be replaced.

Pavletic’s firm has recommended quantity rate increases by elevation zones, the first of up to 150 feet; the second from 150 to 300 feet; the third from 300 to 450 feet and the fourth for elevations greater than 450 feet.

The first zone would see quantity rates of $5.03 in Fiscal Year 2019-20 to $5.54 in Fiscal Year 2020-21; $6.12 in Fiscal Year 2021-22; $6.24 in Fiscal Year 2022-23; and $7.43 in Fiscal Year 2023-24.

The second zone quantity rates for those same years would rise from $5.22 to $5.75 to $6.33 to $6.97 to $7.66.

The third elevation zone rates for those five years would start at $5.37 and rise in sequence to $5.90, $6.49, $7.13 and $7.83.

The fourth elevation rates during the same period would be $5.58, $6.12, $6.72, $7.36 and $8.09.

Meter, private fire protection and backflow charges also would change, Pavletic said.

The smallest meter would see rates rise from the estimated current $32.75 to $34.75 in Fiscal Year 2019-20 to $48 in Fiscal Year 2023-24.

Most smaller meters would experience similar increases, but as Councilmember Lara DeLaney noted, the few with larger meters, from 4 inches to 10 inches or more, could see considerable savings, a 38 percent decrease, starting the first year of the proposed new rates.

That troubled her since residential customers would see increases, and she questioned whether the rates are applied judiciously.

Tucker said the concern was whether the city’s rates were defensible, especially since some municipal utilities have been sued, and that Pavletic’s assignment was to recommend defensible rates.

Those recommended rates have come from dozens of spreadsheets that look at Martinez’s system in detail, he explained.

“Your rates drifted from the costs,” Pavletic added.

In comparison, he said, his firm’s analysis and recommendations come from “well-worn” procedures. “We going by the book,” he said. “The across-the-board increases should not have been applied.”

An expected rate increase scheduled before Pavletic gave his report will become effective in March.

While the City Council agreed to proceed with the new rate schedule recommended by Pavletic, it cannot become effective until it goes through the Proposition 218 process, the consultant said.

No member of the public spoke on the matter.

With the approval of the resolution of intent, which was accomplished Wednesday, the Council triggers that process.

Starting in March, the city expects to reach out to residents, public agencies and developers about the proposed new rates.

The city will send notices to customers’ addresses, and those customers will have 45 days to react.

A public hearing on the rates will start at 7 p.m. April 17 in the Council Chamber of Martinez City Hall.

If protests are received from 50 percent plus one, the Council cannot enact those new rates.

If fewer than that send in protests, the Council then is authorized to vote on a resolution that would adjust the rates, with the schedule becoming effective Jan. 1, 2020, for Fiscal Year 2021.

“Right now, it’s one meter, one vote,” Tucker said.

The Council also agreed with its subcommittee recommendation for the next round of road repairs and resurfacing projects to be underwritten primarily by the half-cent sales tax, Measure D, approved by voters in 2016.

Measure D money would be used for repairs and resurfacing of projects 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.

Sections of Glacier Drive, Pine Street, Chilpancingo Parkway and several other streets are on the list to be paved.

Senate Bill 1, the state gas tax increase, would underwrite repairs to Court Street, Alhambra Avenue and Berrellesa Street.

Notices are given to residents before projects are started, and that includes doorknob hangers with information about those projects, Tucker said.

The information also advises residents when cars must be taken off the streets where work will take place. Occasionally someone has parked in the way, and the contractor worked around the vehicle until it was moved. “I don’t think we tow cars,” Tucker said.

DeNova Homes Developing Director Michel Evans described a proposal to establish a community facility district (CFD) through the Statewide Community Infrastructure Program (SCIP) for the Traditions at the Meadow, a subdivision currently on course for the former Pine Meadow golf course and tavern.

The Statewide Community Infrastructure Program is a pooled, tax-exempt program that can finance impact fees and public improvements for private developments. Cities, counties and special districts can participate in these programs, and Martinez already is a participant, he said.

Bonds are issued by the California Statewide Communities Development Authority (CSCDA), a joint powers authority sponsored by the League of California Cities and the California State Association of Counties to offer 30-year fixed-rate and tax-exempt bonds secured by property owner assessments.

Evans said he is working with city staff to make sure the subdivision’s streets meet public road standards as well as on storm drain basins. The SCIP could generate money for maintaining those storm drain basins, he said.

SCIP also lets the California Statewide Communities Development Authority (CSCDA) establish stand-alone Mello-Roos community facilities districts that finances public improvements and services. It also can be used to reimburse property owns for impact fees or pre-pay those fees.

No Council action was required Wednesday.

However, the Council did approve extending its memorandum of understanding with the Laborers’ International Union of North America Local 324 until June 30.

As a result, employees who were transitioned as city employees from the dissolved Pleasant Hill-Martinez Joint Facilities Agreement for whom the city was covering the 6.2 percent Social Security contribution, the employees will start receiving that 6.2 percent as salary. Those employees also will be moved eventually to the California Public Employees Retirement Services Health.

Martinez will be having some significant meetings, according to announcements made Wednesday. A meeting on the Economic Development Action Plan will take place at 6 p.m. Feb. 13 at Martinez City Hall.

A Budget and Finance Subcommittee meeting will take place at noon Feb. 15 at City Hall.

A time has not been set, but May 16 has been chosen as the date for a forum on the area’s homeless situation, Martinez Police Chief Manjit Sappal said. Representatives from Contra Costa County, Martinez and Martinez Police will participate, and the public will be given time to ask questions.

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