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HomeMy WebLinkAboutItem 10l - City Water and Sewer Rates for Calendar Year 2025City Water and Sewer Rates for 2025 November 19, 2024 Page 1 of 10 DATE: November 19, 2024 TO: Honorable Mayor and City Council FROM: Paul Cranmer, Public Works Services Director By: Daniel Vargas, Management Analyst SUBJECT: CITY WATER AND SEWER RATES FOR CALENDAR YEAR 2025 CEQA: Not a Project Recommendation: Receive and File SUMMARY On February 2, 2021, the City Council adopted a five-year water and sewer rate adjustment schedule for the calendar years 2021 through 2025. The Public Works Services Department (“PWSD”) has reviewed water and sewer operating budgets, revenues, expenditures, and Reserve Fund balances, and determined that it is necessary to adjust water and sewer rates for calendar year 2025 to recover increasing water and sewer system operations and maintenance costs, and to continue to replace aging infrastructure. Based on the previously adopted rate schedule, the sewer rate will increase 2% and the water rate will increase 6%. This will be the fifth and final year of the approved five-year water rate adjustment. The water and sewer rate adjustments will ensure revenue stability and encourage water use efficiency. The PWSD annually reviews water and sewer operating budgets, revenues, expenditures, and reserve fund balances, to determine whether the approved maximum rate adjustment is necessary. The City of Arcadia’s water and sewer rates are among the lowest in the area and will remain so through calendar year 2025, even with the adopted increases. It is recommended that the City Council receive and file this report and proceed with the adopted rate adjustments. BACKGROUND The City provides and maintains water and sewer services for more than 56,000 residents. To provide quality service to Arcadia residents and businesses, utility rate adjustments are necessary to keep up with ongoing operations and maintenance costs, capital improvements, and to maintain adequate Reserve Fund balances for the water and sanitary sewer systems. In February 2014, the City Council awarded a Professional Services Agreement to Carollo Engineers (“Carollo”) for the preparation of the Water and Sewer Cost of Service Study. In the Study, Carollo developed financial models that would City Water and Sewer Rates for 2025 November 19, 2024 Page 2 of 10 determine how best to recover projected ongoing operational costs, capital improvements to water and sewer infrastructure, and water supply costs over a five-year period. Carollo and PWSD collaborated to analyze performance of the City’s water and sanitary sewer operations and established a seasonal tiered water rate structure that meets the City’s primary objectives of providing revenue stability, while encouraging water use efficiency. The goal of the 2015 Cost of Service Study was to utilize Reserve Funds to minimize larger rate adjustments. Due to increases in operations and maintenance budgets – mainly due to the imposition of the Resource Development Assessment and higher Replacement Water costs (described below) – rising capital improvement costs, and the change in water usage patterns, an update to the 2015 Cost of Service Study was necessary. In July 2019, City Council approved a Professional Services Agreement with Carollo to update the 2015 Water and Sewer Cost Study and to recommend a new five- year water and sewer rate adjustment schedule. Based on the Cost Study Update, on February 2, 2021, the City Council adopted a five-year water and sewer rate adjustment schedule for calendar years 2021 through 2025. In the Main Basin, from which the City draws most of its water, basin levels have not returned to optimal operating levels since the previous drought. In response to these conditions, the Main Basin Watermaster adopted a Drought Management Plan. The Drought Management Plan includes a Resource Development Assessment (“RDA”), which is a pass-through fee based on each individual producer’s annual amount of water pumped from the Main Basin. The purpose of the RDA is to restore ground water levels by purchasing imported water from the State Water Project, separate from and in addition to, the purchase of Replacement Water. The RDA will cost the City over $2 million dollars in Fiscal Year 2024-25 alone. DISCUSSION The Cost Study Update relied on Arcadia’s financial models and rate models, which were exclusively developed for the City by Carollo during the 2015 Cost Study and were subsequently updated and refined in 2017. In 2020, these models were updated again to include actual revenues and operational expenditures, capital improvement costs, and customer usage data, along with additional items that were necessary to develop financial projections for Fiscal Years 2020-21 through Fiscal Year 2024-25. Water Rates Water rates are determined by analyzing revenues, expenditures, and forecasting water sales for calendar year 2025. The following goals were identified in the Cost Study Update: o Generate enough revenue to fund continued operations and maintenance of the City’s water and sewer supply and distribution system, including increases in water supply costs driven by the Main Basin’s Drought Management Plan. City Water and Sewer Rates for 2025 November 19, 2024 Page 3 of 10 o Provide for equipment replacement as well as improvements to the water and sewer systems infrastructure through capital improvements. o Review reserve policies and set rates to adequately maintain a reserve fund to make necessary repairs in the event of an emergency. Operations and maintenance expenditures comprise most of the expenses within the Water budget, with the single largest line item being water supply costs. The updated Cost Study financial model was used to forecast a variety of influencing factors: water sales and expenditures (requires assessing current and future water costs); the rising cost of replacement water; system operation costs; and the Watermaster’s imposed RDA fee. Data from an analysis of the forecasted water use, expenditures, and capital improvement projects was used to determine that the City must increase revenues by 6%, as recommended by the Cost Study Update, and that the previously-adopted maximum rate adjustment for water should be applied for calendar year 2025. The reason for applying the maximum rate adjustment next year is primarily due to the RDA fee to purchase additional water from the State Water Project, and the proposed limitations on the purchase of cyclic water, which would result in an increased cost to purchase Replacement Water. “Cyclic water” is a program in which a City can pre-purchase water at a discounted rate and effectively store it in the Basin for future usage; Arcadia has repeatedly utilized this program and saved millions of dollars during the past five years. Although, there is currently no proposed decrease in the Operating Safe Yield, or the amount of water that can be removed from the Main San Gabriel Basin, in 2025, for all producers with pumping rights, the allowable extractions from the Basin remain low. As a result, the City will need to purchase more costly Replacement Water to meet consumer demand. Based on those factors, the Cost Study Update recommended that the City increase water revenues by 5% for calendar years 2021 and 2022, and 6% for each of the following calendar years through 2025. These planned increases fund expected operations, maintenance, CIP expenditures, and maintain a sufficient Reserve Fund balance. This will be the fifth and final year of an approved five-year water rate adjustment. Currently, the maximum water rate adjustment does not yield sufficient revenues to meet total expenditures for operations and maintenance costs, and capital improvement projects. This imbalance will be addressed in the next Water Rate Study, which is currently underway and expected to be completed during the next calendar year, for implementation in January 2026. The adopted water rates for calendar year 2025 are shown in the tables below and do not meet the amounts necessary to fund City Water System operations for 2025. This table shows the adopted increase to the current fixed bimonthly meter charge, effective January 1, 2025, for all customer classes, to adequately reflect the true cost of service. City Water and Sewer Rates for 2025 November 19, 2024 Page 4 of 10 BIMONTHLY RATES FOR METER CHARGE ($/SIZE OF METER) – ALL CUSTOMER CLASSES Meter Size Current Rates Effective 1/1/2025 5/8” $37.54 $39.79 3/4” $40.10 $42.51 1” $45.24 $47.95 1 1/2” $58.07 $61.55 2” $73.47 $77.87 3” $109.40 $115.96 4” $160.72 $170.37 6” $314.71 $333.59 8” $494.36 $524.02 10” $751.01 $796.07 The following tables are the commodity charges [$/Hundred Cubic Feet (“HCF”)] for single-family residential customers based on the approved four-tier inclining block rate structure, and variable consumption allotments based on the customers’ water meter size. No changes are included in these allotments. BIMONTHLY TIER BREAK POINTS (IN HCF) FOR WINTER WATER USAGE (NOVEMBER THROUGH APRIL) Meter Size Tier 5/8” 3/4” 1” 1 1/2” 2” Tier 1 0 - 22 0 - 22 0 - 22 0 – 22 0 - 22 Tier 2 23 - 32 23 - 34 23 - 42 23 – 48 23 - 60 Tier 3 33 - 42 35 - 44 43 - 58 49 – 70 61 - 90 Tier 4 43+ 45+ 59+ 71+ 91+ BIMONTHLY TIER BREAK POINTS (IN HCF) FOR SUMMER WATER USAGE (MAY THROUGH OCTOBER) Meter Size Tier 5/8” 3/4” 1” 1 1/2” 2” Tier 1 0 - 22 0 - 22 0 - 22 0 - 22 0 - 22 Tier 2 23 - 34 23 - 42 23 - 60 23 – 70 23 - 94 Tier 3 35 - 44 43 - 58 61 - 92 71 – 112 95 - 148 Tier 4 45+ 59+ 93+ 113+ 149+ A seasonal single-family tiered water rate structure assists in managing customer demand for water by pricing discretionary water uses, such as landscape irrigation, at a higher rate than water used for drinking and sanitation purposes. This is to provide a price City Water and Sewer Rates for 2025 November 19, 2024 Page 5 of 10 signal to customers to use water efficiently, as well as an incentive to reduce excess water use. As water usage increases, so does the cost per unit of additional water; this methodology has proven effective in curtailing wasteful water practices. The table below shows the proposed single-family rates: SINGLE FAMILY RESIDENTIAL WATER RATES ($/HCF) Tier Current Rates Effective 1/1/2025 Tier 1 $2.25 $2.39 Tier 2 $2.81 $2.98 Tier 3 $2.90 $3.07 Tier 4 $3.61 $3.83 The table below shows the two-tier water allocations based on the number of dwelling units in each multi-family complex, followed by a table showing the proposed multi-family rates. Again, there are no proposed changes to these allotments. BIMONTHLY TIER ALLOTMENTS (PER DWELLING UNIT) Tier Tier (HCF) x Per Dwelling Unit Tier 1 12 Tier 2 13 + The table below shows the adopted multi-family residential rates based on the tier structures: MULTI-FAMILY RESIDENTIAL WATER RATES ($/HCF) Tier Current Rates Effective 1/1/2025 Tier 1 $2.06 $2.18 Tier 2 $2.30 $2.43 Finally, the following table shows specific uniform rates for Commercial, Government, and Institutional classes: COMMERICAL, GOVERNMENT, & INSTITUTIONAL WATER RATES ($/HCF) Tier Current Rates Effective 1/1/2025 Commercial $2.19 $2.32 Government & Institutional $2.67 $2.83 The net change to a customer’s water bill will be affected by the customer’s ability to use water efficiently. The percentage increase will vary among customers based on usage. Arcadia’s water rates are among the lowest in the area and will remain so, even with the City Water and Sewer Rates for 2025 November 19, 2024 Page 6 of 10 adopted increases. The table below provides a comparison of Arcadia’s rates along with other neighboring jurisdictions for 2025. *Golden State Water Areas include over 25 different territories providing residential metered water service to single- family residential customers. For the full list, visit https://www.gswater.com/ The previous annual rate adjustments were designed to use Reserve Funds to smooth and decrease the amount of annual water rate adjustments. Accordingly, the City Council agreed to lower the Water Reserve Fund balance from $20 million to $11 million over the five-year period. The updated Cost Study has estimated the value of the City’s water system replacement at $236 million. Based on industry standards for such a valuation, the Cost Study determined that $7.1 million in capital reserve (or 3% of the replacement value) is needed, combined with about $3.8 million to fund operation and maintenance costs for at least 90 days. To meet these industry standards and financial best practices, the City needs to increase rates to reach the recommended $11 million for the Water Reserve Fund. The graph below includes a 6% increase in revenue for the fifth year of the five-year approved water rate adjustment. Even with the adopted annual 6% increase in revenue, over time, the Reserve Fund balance will continue to fall below the level of $11 million $481.07 $455.14 $434.29 $431.37 $397.72 $265.11 $255.76 $247.18 $198.87 $187.47 Monterey Park Sierra Madre Pasadena Golden State Water Areas* South Pasadena Alhambra Monrovia Azusa Arcadia Expected 2025 Arcadia Current Single-Family Bimonthly Water Cost for Neighboring Cities Total Bimonthly Charge for 1 inch Meter with Summer Usage of 55 HCF City Water and Sewer Rates for 2025 November 19, 2024 Page 7 of 10 and may even approach $0. Therefore, a new Water and Sewer Cost of Service Study will be necessary. On July 16, 2024, the City Council authorized and directed the City Manager to execute a Professional Services Agreement for a new Water and Sewer Cost of Service Study. The primary objective of the Cost Study will be to develop and establish a rate structure for water and sewer service that will ensure financial stability to meet ongoing operational costs, capital improvement costs, and costs of purchasing imported water. The Cost Study will ensure that the City’s water and sewer rates are fair and equitable among customers, while also compliant with regulatory requirements. The Cost Study will recommend a new five-year water and sewer rate adjustment for 2026 through 2030. City staff will present the Cost Study findings and the proposed water and sewer rates to the City Council during a study session in the coming months. Sewer Rates The City’s sewer system includes 138 miles of pipe and is, on average, 50 years old. The Sewer Master Plan is a comprehensive report outlining a long-range program of capital improvements and preventative maintenance measures to upgrade and maintain the $(4) $- $4 $8 $12 $16 $20 $24 $28 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 Mi l l i o n s Water Fund Balance O&M Costs CIP Proposed Revenue Total Reserves City Water and Sewer Rates for 2025 November 19, 2024 Page 8 of 10 City’s sewer system. Annual sewer rate adjustments are necessary to fund the operations and maintenance activities of Arcadia’s sewer system to ensure it follows state regulations that mandate the elimination of sewer overflows. On November 15, 2022, City Council accepted the 2022 Sewer Master Plan Update. The Plan contains a list of recommended improvements to the City’s sewer system to be implemented over the next 20 years, with the most critical projects indicated as Priority 1 and the remaining projects indicated as Priority 2. There are eight Priority 1 projects with a total estimated cost of approximately $3.2 million, and 34 Priority 2 projects with a total estimated cost of approximately $5.4 million. Project costs are expected to have a continued impact on the Sewer Fund. The adopted rate adjustments and revenue increases allow the City to fund ongoing operations and provide adequate maintenance and upgrades to the City’s sewer system. The results of the Cost Study Update determined that the current sewer rate structure equitably recovers costs from each customer class, but that the City must increase sewer revenues annually to adequately fund Capital Improvement Projects and meet projected expenditure increases. The PWSD has determined that the approved 2% sewer rate adjustment for calendar year 2025 is necessary to meet operations and maintenance expenditures, and complete capital improvement projects. The adopted sewer rates for calendar year 2025 are shown in the tables below. The proposed rates will not exceed the estimated amount necessary to fund the City Sewer System for calendar year 2025. The table below shows Single-Family Residential and Multi-Family Residential Dwellings Bimonthly Rates: Current Rate Effective 1/1/2025 $18.41 $18.78 Commercial Dwellings Bimonthly Rates (Fixed Rate + Variable Per HCF Billed Water Usage) are shown in the following table: Current Rate Effective 1/1/2025 $55.23 + $0.30 Variable Per HCF $56.33 + $0.31 Variable Per HCF The adopted sewer rates are increased proportionally each year to generate the necessary level of revenues projected in the Cost Study Update. Should the City find that revenue requirements are less than those projected in the study, the City Council could opt to forgo rate increases or enact lower rates than the proposed, in any given year. City Water and Sewer Rates for 2025 November 19, 2024 Page 9 of 10 Even with the proposed increases, Arcadia’s sewer rates are also among the lowest in the area and will remain so through year 2025, as shown in the table below. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”) per Section 15061(b)(3) of the CEQA Guidelines, as it can be seen with certainty that it will have no impact on the environment. FISCAL IMPACT Water and sewer rate increases are necessary to fund ongoing operation and maintenance budgets, the Capital Improvement Program, and an adequate Reserve Fund balance. Without a rate adjustment, the City is unable to recover increasing water supply costs, and operations and maintenance costs for the City’s water and sewer systems. Even with the proposed rate increase, the Water Reserve Fund will be dangerously low. It will be incumbent upon staff to prioritize expenditures to ensure that emergency reserves remain intact until the Fund can be replenished through future rate adjustments. $44.55 $43.00 $30.45 $28.50 $28.38 $26.00 $18.78 $18.41 Azusa Sierra Madre South Pasadena Monrovia Pasadena San Gabriel Arcadia Expected 2025 Arcadia Current Residential Bimonthly Sewer Cost for Neighboring Cities City Water and Sewer Rates for 2025 November 19, 2024 Page 10 of 10 The Water and Sewer Costs of Service Study Update recommended that the City increase water revenues by 6% for calendar year 2025 to fund expected operations, maintenance, and CIP expenditures. While the rates will be a nominal increase for most ratepayers, collectively, the City will receive approximately $1 million in additional water revenue. Based on study projections, the City must increase water revenue to meet expected expenses. Additionally, the Cost Study Update recommends a 2% sewer rate adjustment, or approximately $57,000 collectively, for calendar year 2025, is necessary to fund expected operations, maintenance, and CIP expenditures for the City’s sewer system. Based on study projections, the City must increase sewer revenue annually to meet expected revenue needs. RECOMMENDATION It is recommended that the City Council determine this does not constitute a project under the California Environmental Quality Act (“CEQA”). No action is necessary for this item. The water and sewer rates have previously been adopted by the City Council and staff is prepared to implement them in January 2025. It is recommended that the City Council receive and file this report. Attachments: Adopted Resolution No. 7348 (City Water Rates) Adopted Resolution No. 7349 (City Sewer Rates) RESOLUTION NO. 7348 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, SETTING CITY WATER RATES AND FINDING THE RATES WILL NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO FUND THE OPERATION OF THE CITY WATER SYSTEM FOR CALENDAR YEARS 2021 THROUGH 2025 WHEREAS, pursuant to the Arcadia Municipal Code Section 7531.1, water rates may be set and modified by resolution of the City Council; and WHEREAS, it is the desire of the City Council to maintain flexibility so as to best meet the needs of the City and water consumers; and WHEREAS, proposed water rate changes were presented to the City Council at its December 15, 2020 regularly scheduled City Council meeting; and WHEREAS, a public notice concerning said rate changes was duly mailed to residents in accordance with Proposition 218 noticing requirements on December 16, 2020, and a duly noticed public hearing concerning said rate adjustments was conducted by the City Council on February 2, 2021 for Calendar Years 2021, 2022, 2023, 2024, and 2025. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. SERVICE FEES. The bimonthly water service fees are comprised of two components — (1) a fixed service charge (the "Meter Charge"); and, (2) a variable water commodity charge (the "Commodity Charge"). The Commodity Charge includes four customer classes - (1) Single Family Residential; (2) Multi-Family Residential; (3) Commercial; and (4) Governmental, Institutional, and Irrigation (collectively Institutional"). The Meter Charge is a fixed charge established on the basis of the size 1 of the water meter(in inches) serving a property and is calculated to recover a percentage of the water utility's annual fixed costs of providing water service, such as utilities, equipment, materials, billing, collections, customer service, meter reading, and meter maintenance. SECTION 2. RATES. The following new bimonthly rates are established and shall supersede rates heretofore adopted for the provision, delivery, and consumption of water for beneficial use during each bimonthly period. a) Meter Charge ($/Meter Size) Meter Size 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 in inches) 5/8"31.82 33.41 35.41 37.54 39.79 3/4"33.99 35.69 37.83 40.10 42.51 1" 38.34 40.26 42.67 45.24 47.95 11/2" 49.22 51.68 54.78 58.07 61.55 2" 62.27 65.38 69.31 73.47 77.87 3" 92.73 97.36 103.20 109.40 115.96 4"136.23 143.05 151.63 160.72 170.37 6"266.75 280.09 296.90 314.71 333.59 8"419.03 439.98 466.38 494.36 524.02 10" 636.57 668.39 708.50 751.01 796.07 b) Single- Family Residential and Multi-Family Residential Single-Family Residential and Multi-Family Residential rates consist of tiers which impose higher rates per unit of water as the level of consumption increases, with one unit equal to one hundred cubic feet of water. The amount of water allotted to each tier for Single-Family Residential customers is seasonal - winter (November through April) or summer (May through October) - and 2 based on the size of the water meter serving a property. Single-Family Residential Bimonthly Tier Break Points (in HCF) for Winter Months' Water Usage (November through April) Meter Size (in inches) 5/8" 3/4" 1" 1 1/2" 2" Tier 1 0-22 HCF 0-22 HCF 0-22 HCF 0-22 HCF 0-22 HCF Tier 2 23-32 HCF 23-34 HCF 23-42 HCF 23-48 HCF 23-60 HCF Tier 3 33-42 HCF 35-44 HCF 43-58 HCF 49-70 HCF 61-90 HCF Tier 4 43+ HCF 45+ HCF 59+ HCF 71+ HCF 91+ HCF Single-Family Residential Bimonthly Tier Break Points (in HCF) for Summer Months' Water Usage (May through October) Meter Size (in inches) 5/8" 3/4" 1" 1 1/2" 2" Tier 1 0-22 HCF 0-22 HCF 0-22 HCF 0-22 HCF 0-22 HCF Tier 2 23-34 HCF 23-42 HCF 23-60 HCF 23-70 HCF 23-94 HCF Tier 3 35-44 HCF 43-58 HCF 61-92 HCF 71-112 HCF 95-148 HCF Tier 4 45+ HCF 59+ HCF 93+ HCF 113+ HCF 149+ HCF Single-Family Residential Bimonthly Rates for Commodity Charges ($/HCF) 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 Tier 1 1.91 2.01 2.13 2.25 2.39 Tier 2 2.38 2.50 2.65 2.81 2.98 Tier 3 2.46 2.58 2.73 2.90 3.07 Tier 4 3.06 3.21 3.41 3.61 3.83 The amount of water allotted to each tier for Multi-Family Residential customers is based on allotments per dwelling unit. 3 Multi-Family Residential Bimonthly Tier Allotments (Per Dwelling Unit) Tier (HCF) x Per Dwelling Unit Tier 1 12 Tier 2 13 + Multi-Family Residential Bimonthly Rates for Commodity Charges ($/HCF) 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 Tier 1 1.75 1.83 1.94 2.06 2.18 Tier 2 1.95 2.04 2.17 2.30 2.43 c) Commercial and Institutional Commercial and Institutional rates for the Commodity Charge are uniform, but the amount of the charge imposed varies based on the number of units of water delivered to a property (institutional rates shall include Government and Irrigation customers), with one unit equal to one hundred cubic feet of water. Commercial Bimonthly Rates for Commodity Charges ($/HCF) 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 1.86 1.95 2.07 2.19 2.32 Institutional Bimonthly Rates for Commodity Charges ($/HCF) 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 2.27 2.38 2.52 2.67 2.83 SECTION 3. FIRE HYDRANT SERVICE FOR CONSTRUCTION, OUTSIDE CITY, AND PRIVATE USE. Fire hydrant meters, eddy valves, and water sold 4 for construction, to outside City agencies, and for private use, shall be subject to the following charges: Meter Installation 50.00 Meter Relocation 25.00 Meter Rental 40.00/month Eddy Valve Rental 25.00/month Hydrant Rental 15.00/month Hydrant Permit 25.00 Water Usage 2.74/100 cubic feet All water consumption is to be charged at the rate of two dollars and seventy-four cents ($2.74) per full one hundred (100) cubic feet registered on the consumer's meter. Unmetered water use will be charged at a flat rate determined by the Water Section of the Public Works Services Department based upon type of use. SECTION 4. FIRE LINE SERVICE (NO CHARGE FOR WATER USE). The following rates are established for bimonthly charges for fire protection services: SIZE OF MINIMUM BIMONTHLY METER SERVICE CHARGE 2" 11 .55 4" 23.10 6" 34.64 8" 46.18 10" 57.75 SECTION 5. All rates set forth in this Resolution shall be effective and operative for water use and bills sent after February 2, 2021 . 5 SECTION 6. Annually adjusted rates shall take effect for all water use and service appearing on water bills issued on or after January 1, 2022 and each January 1 thereafter, including January 1, 2025. Prior to implementing the rates, however, the City Council will review its projected costs for each year to determine the maximum amount of any rate increases that are necessary. SECTION 7. The City Council hereby finds that the rates specified in this Resolution will not produce an amount in excess of that necessary to fund the operation of the City of Arcadia Water System. SECTION 8. The City Council finds that this Resolution is exempt from the requirements of the California Environmental Quality Act as specified in Title 14 Section 15273 of the California Administrative Code. SECTION 9. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this 2nd day of February, 2021. CU.-- Mayo of the City of Arcadia ATTEST: y Clerk APPROVED AS TO FORM: P 441=e Stephen P. Deitsch City Attorney 6 STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) SS: CITY OF ARCADIA I, GENE GLASCO, City Clerk of the City of Arcadia, hereby certifies that the foregoing Resolution No. 7348 was passed and adopted by the City Council of the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said Council held on the 2nd day of February, 2021 and that said Resolution was adopted by the following vote, to wit: AYES: Beck, Cheng, Verlato, Tay, and Chandler NOES: None ABSENT: None y Clerk of the City of Arcadia 7 RESOLUTION NO. 7349 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, SETTING CITY SEWER RATES AND FINDING THE RATES WILL NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO FUND THE OPERATION OF THE CITY SEWER SYSTEM FOR CALENDAR YEARS 2021 THROUGH 2025 WHEREAS, pursuant to the Arcadia Municipal Code Section 2696, sewer rates may be set and modified by resolution of the City Council; and WHEREAS, it is the desire of the City Council to set sewer rates in a reasonable amount and so as to meet the capital improvement and service needs of the City and its sewer service consumers; and WHEREAS, proposed sewer rate changes were presented to the City Council at its October 20, 2020 regularly scheduled City Council meeting; and WHEREAS, a public notice concerning said rate changes was duly mailed to residents in accordance with Proposition 218 noticing requirements on December 16, 2020, and a duly noticed public hearing concerning said rate adjustments was conducted by the City Council on February 2, 2021 for Calendar Years 2021 , 2022, 2023, 2024, and 2025. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1 . RATES. The following new bimonthly sewer rates are established and shall supersede rates heretofore adopted for the following categories of sewer service: 1 a) Single-Family Residential and Multi-Family Residential Dwellings 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 17.35 17.70 18.05 18.41 18.78 b) Commercial Properties 2/2/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025 52.04 + $0.28 $53.09 + $0.29 $54.15 + $0.29 $55.23 + $0.30 $56.33 + $0.31 Variable Per Variable Per Variable Per Variable Per Variable Per HCF Billed HCF Billed HCF Billed HCF Billed HCF Billed Water Usage Water Usage Water Usage Water Usage Water Usage c) Premises where sewer connections are not available or are not connected shall be exempt from said monthly charges. SECTION 2. All rates set forth in this Resolution shall be effective and operative for water use and bills sent after February 2, 2021. SECTION 3. Annually adjusted sewer rates shall take effect for all water use and service appearing on bills issued on or after January 1, 2022 and each January 1 thereafter, including January 1, 2025. Prior to implementing the rates, however, the City Council will review its projected costs for each year to determine the maximum amount of any rate increases that are necessary. SECTION 4. The City Council hereby finds that the rates specified in this Resolution will not produce an amount in excess of that necessary to fund the operation of the City of Arcadia Sewer System. SECTION 5. The City Council hereby finds that the adoption of this Resolution and the establishment of the sewer rates set forth herein are categorically exempt from the requirements of the California Environmental Quality Act, as specified in Title 14, 2 Section 15273 of the California Administrative Code. SECTION 6. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this 2nd day of February, 2021. Mayorfd the City of Arcadia ATTEST: gP i y Clerk APPROVED AS TO FORM: P Stephen P. Deitsch City Attorney 3 STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) SS: CITY OF ARCADIA I, GENE GLASCO, City Clerk of the City of Arcadia, hereby certifies that the foregoing Resolution No. 7349 was passed and adopted by the City Council of the City of Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said Council held on the 2nd day of February, 2021 and that said Resolution was adopted by the following vote, to wit: AYES: Beck, Cheng, Verlato, Tay, and Chandler NOES: None ABSENT: None y Clerk of the City of Arcadia 4