AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
title
WATER MASTER PLAN AND RATE STUDY SUBCOMMITTEE FORMATION
summary
Summary:
The City of Signal Hill’s 2023-2028 Strategic Plan identifies conducting a comprehensive water rate study and updating the Water Master Plan (WMP) to ensure the sustained delivery of safe and clean water while enhancing financial sustainability as key initiatives.
The City’s Water rates, last adopted in 2019, established rates for the period from 2020 to 2024. On December 7, 2023, the City Council approved a consulting services agreement with Dudek Engineering Services (Dudek) to prepare the Water Master Plan and Water Rate Study Project.
Currently, the City is in the process of updating both the WMP and the Water Rate Study (WRS). The WMP assesses the City's water system infrastructure, identifies deficiencies, and outlines a strategic plan for capital improvements over the next five years. Building on the findings of the WMP, the WRS aims to establish a sustainable and equitable rate structure to ensure adequate funding for operations and capital projects.
Staff is recommending to appoint two council members to serve on a subcommittee to review the preliminary financial analysis, provide guidance on findings, and develop recommendations for rate adjustments. If approved, staff would schedule the subcommittee meeting for either Tuesday, December 17, 2024 or Monday, January 27, 2025; a Water Rate Study Council Workshop at the City Council meeting of Tuesday, February 25, 2025; and a Water Rate Study Community Workshop on Monday, March 10, 2025.
Strategic Plan Goal(s):
Goal No. 1 Financial Stability: Ensure the City’s long-term financial stability and resilience.
Goal No. 4 Infrastructure: Maintain and improve the City’s physical infrastructure, water system, and recreational spaces.
Goal No. 5 High-Functioning Government: Strengthen internal communication, recruitment, retention, systems, and processes to increase the effectiveness and efficiency of City services.
recommendation
Recommendations:
1. Appoint two City Council members to serve on a subcommittee to review the Water Master Plan preliminary financial analysis and develop recommendations for any necessary water rate adjustments.
2. Select one of the following dates for the subcommittee meeting: Tuesday, December 17, 2024 or Monday, January 27, 2025.
3. Schedule the Water Rate Study Council Meeting Workshop for Tuesday, February 25, 2025.
4. Schedule the Water Rate Study Community Workshop for Monday, March 10, 2025.
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Fiscal Impact:
There is no fiscal impact associated with the recommended actions.
Background:
On December 7, 2023, the City Council awarded a consulting services agreement to Dudek to prepare the Water Master Plan and Water Rate Study Project (Project). The WMP serves as a critical document that evaluates the City’s water system infrastructure, prepares for future demands, identifies deficiencies related to hydraulic performance, capacity, and evaluates storage and supply. A key goal of the WMP is to create a strategic framework and outline a proactive five-year capital improvement program to maintain and enhance water operations.
The WRS utilizes the findings and recommendations from the WMP, along with an assessment of the revenue and existing water enterprise fund, to prepare a cost-of-service analysis and develop the required financial plan. The WRS aims to establish a sustainable and equitable rate structure that ensures adequate funding for water system operations and capital improvements.
The City’s most recent WMP was completed in 2018, and the last WRS was adopted in 2019. Following the 2019 WRS, the City Council approved rate increases were effective from January 28, 2020 through 2024, as outlined in Signal Hill Municipal Code Section 13.04.130.
Analysis:
Since the WMP and WRS Project was awarded by Council on December 7, 2023, the City’s Consultant, Dudek, along with Raftelis, the subconsultant for the rate study portion of the project, has collaborated with the Finance Department and Public Works Department to perform the following key tasks:
• Conducted a general assessment of the City’s water facilities and control systems (SCADA - Supervisory Control and Data Acquisition).
• Analyzed population and land use data in relation to current and future water production demand.
• Examined recent water leaks and water system-related emergencies.
• Assessed infrastructure needs for state-imposed enhanced water quality requirements and water conservation mandates.
• Formulated an updated list of capital improvement projects that aligned with the current state of the City’s infrastructure.
• Reviewed existing water financial data and potential financial impacts on the City’s water enterprise fund, including costs associated with imported water, water usage restrictions imposed during statewide drought emergencies, and other unanticipated constraints.
• Developed financial plan and rate structure options aligned with existing and future water system needs to ensure adequate and sustainable funding for the water system operations.
Following the completion of these objectives, the City’s consultant and staff prepared a preliminary financial analysis of the current costs of providing water service. The next step in the process is the formation of a subcommittee to review the preliminary analysis and provide recommendations for water rate adjustments, as needed. Staff recommends forming a subcommittee to be composed of the following:
• Two City Council Members
• City Manager
• Deputy City Manager
• City Attorney
• Finance Director
• Deputy Finance Director
• Public Works Director
• Deputy Public Works Director
• Public Works Contracts Manager
• Water Superintendent
• City’s Consultants: Dudek and Raftelis
Staff is also proposing the subcommittee meeting date for either Tuesday, December 17, 2024, or Monday, January 27, 2025; a Water Rate Council Meeting Workshop scheduled for Tuesday, February 25, 2025; and the Water Rate Community Workshop for Monday, March 10, 2025. If approved by the City Council, staff would proceed with initiating the Proposition 218 assessment process for rate implementation on Tuesday, March 25, 2025.