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HomeMy WebLinkAboutRES NO 127-17(1)RESOLUTION NO. 127-170) A RESOLUTION OF THE BAKERSFIELD CITY COUNCIL AMENDING RESOLUTION NO. 127- 17 BY RESCINDING THE PREVIOUSLY APPROVED INCREASES TO WATER RATES FOR FISCAL YEARS 2018/2019 AND 2019/2020 FOR CITY DOMESTIC WATER SERVICE AREA. WHEREAS, Chapter 14.04 of the Bakersfield Municipal Code authorizes the City Council to establish rates and fees sufficient for the City to recover the costs of providing domestic water services; and WHEREAS, on March 7, 2008, the City filed a lawsuit entitled: California Water Service Company and City of Bakersfield v. The Dow Chemical Company, et. al. San Mateo County Superior Court Case No. CIV 470999 to recover damages as a result of the contamination of its water from a fumigant manufactured by Dow/Shell Oil which contained 1,2,3, trichloropropane or TCP; and WHEREAS, the State of California recently adopted a maximum contamination level of 5 parts per trillion (ppt) for TCP; and WHEREAS, in order to remove the TCP from City wells, the City has to install treatment vessels containing granular activated carbon and provide funding for operating and maintenance expenses for several years; and WHEREAS, the City had to bond for the capital costs of the mandatory remediation project in an amount of $23 million, resulting in higher water fees to City customers; and WHEREAS, in order to pay for the capital costs and financing of the mandatory remediation project, on September 6, 2017, the City Council approved Resolution No. 127-17 by which the City Council adopted increases to water fees with the following schedule: a. 16.0% increase effective October 1, 2017; and b. 13.0% increase effective July 1, 2018; and C. 7.6% increase effective July 1, 2019; and WHEREAS, in January 2018, the City reached a settlement in the TCP lawsuit, recovering a gross settlement amount of $82 million less legal fees and costs, for a net of approximately $54 million, which will allow for the recovery of the capital costs to install the treatment vessels for thirty-five (35) City wells; and oe0gKFa -- Page 1 of 3 Pages - b RPIPIM4F WHEREAS, as a result of the settlement, the City called the previously issued bonds in the amount of $23 million, making the previously adopted 13% water fee increase, effective July 1, 2018 and the 7.6% water fee increase, effective July 1, 2019, no longer necessary to finance the mandatory remediation; and WHEREAS, the City Council believes that it is in the best interests of the City to rescind the scheduled increases to the water rates that were set to go into effect on July 1, 2018 and July 1, 2019. NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Bakersfield as follows: The above recitals and findings are true and correct and are incorporated herein by reference. 2. The Council hereby rescinds the adoption of: a. The 13.0% increase in water fees that was to go into effect on July 1, 2018; and b. The 7.6% increase in water fees that was to go into effect on July 1, 2019, 3. Except as amended herein, all other provisions of Resolution No. 127-17 remains in full force and effect. 4. This resolution shall take effect immediately upon its passage. --------0000000-------- S. a T -- Page 2 of 3 Pages -- PRIA NAk HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof held on FEB 1 12918 by the following vote: ✓✓ ✓ j2 9 f '/./ ✓ AV ES: COUNCIL MEMBER g%W GONZALES, W41Q. SMITH, FREEMAN, SULLIVAN, EARLIER AB N COUNCILMEMBERN is BSENE COUNCIL MEMBER £I CHRISTOPHER ERRY ACTING CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED FEB 2 1 2818 APPROVED AS TO FORM: VIRGINIA GENNARO City Attorney CB JOSHUA H. RUDNICK /Deputy City Attorney JHR do oAgAKF9� T t. m U O -- Page 3 of 3 Pages -- PRIOINgN