HomeMy WebLinkAbout12/06/2001 BAKERSFIELD
Mike Maggard, Chair
Harold Hanson
Mark Salvaggio
Staff: Darnell Haynes
BUDGET AND FINANCE COMMITTEE
of the City Council - City of Bakersfield
Thursday, December 6, 2001
4:00 p.m.
City Manager's Conference Room, Suite 201
Second Floor - City Hall, 1501 Truxtun Avenue, Bakersfield, CA
AGENDA
1. ROLL CALL
2. ADOPT ,OCTOBER 4, 2001 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS
A. Review and Committee recommendation regarding application of the business license
ordinance to commercial and residential rental property businesses - Thiltgen
B. Staff report and Committee recommendation regarding Sewer Service User Charges for
hospitals - Rojas
5. NEW BUSINESS
A. Review and Committee recommendation regarding 2002 Budget and Finance Committee
meeting schedule.
6. COMMITTEE COMMENTS
7. ADJOURNMENT
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DRAFT
B AKER.SFIELD
Alan Tandy, City I~ager Harold Hanson
Darnell Haynes, Assistant to the City Manager Mark Salvaggio
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Thursday, October 4, 2001, 4:00 p.m.
City Manager's Conference Room
1. ROLL CALL
Call to Order at 4:09 p.m.
Present: Councilmembers ~Mike Maggard, Chair; and Harold Hanson
Absent: Councilmember Mark Salvaggio
2. ADOPT AUGUST 30, 2001 AGENDA SUMMARY REPORT
Adopted as submitted. (Councilmember Salvaggio absent)
3. PUBLIC STATEMENTS
4. DEFERRED BUSINESS
A. Review and Committee recommendation regarding. Bakersfield Senior Center
request for financial assistance
The Budget and Finance Committee reviewed the audit report provided by the Bakersfield
Senior Center.
Alexander Lark, Ph.D., Executive Director of the Bakersfield Senior Center responded to
questions regarding financial statements and accounts payable.
Lynn Edwards, Senior Center Board Member, discussed current liabilities and explained the
Center has contracted with an agency that helps get past IRS debt waived or reduced.
City Attorney Bart Thiltgen cautioned that the City should not pay any IRS penalties owed by the
Senior Center, because that may involve the City in any future liabilities owed to the IRS by the
Senior Center.
staff explained they would need a schedule of what is included in accounts payable that
confirms the current liabilities account balance.
DRAFT
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Thursday, October 4, 2001
Page -2-
Economic Development Director Donna Kunz explained HUD funding regulations for non-profit
operations and the need. to show enhanced or expanded services each year, or .if that is not
possible, a waiver can be requested from HUD. This HUD requirement would not apply until the
application is submitted for the second year of funding. Also, past expenses cannot be included
when applying for HUD funding.
Staff explained the City Council apProved in concept a contribution of $50,000 per year for the
Bakersfield Senior Center. The first year would be funded by Council Contingency and starting
with FY 2002-03 an application would be made yearly to HUD with Council approval for CDBG
funding of $50,000.
Dr. Lark spoke about his plans for fund-raisers and income generators. The Health Services
Program is critical and they will be applying for grants to pay for health screening. They will be
having educational classes. Some will be tuition paying and include GED classes and computer
classes, which Dr. Lark has taught previously at Fresno College. There is a parenting class.
There will be fine arts and entertainment for seniors as well. They will be having fund-raisers
including expanded Bingo with new boards starting immediately. He is confident that they will
be able to be successful with the plans they have for income generators and assistance from
the City of $50,000 per year and the $10,000 per year from United Way.
Committee member Hanson made a motion.that in concurrence with Council's policy for funding
non-profits, the-Committee recommendation to Council is to fund $50,000 for the Bakersfield
Senior Center out of Council Contingency to be disbursed in partnership with the Center's board
for amounts to be determined after review of the accounts payable schedUle and approval of the
Finance Director with the understanding that this will be funding through June 30, 2002, and in
the interim, CDBG funds will 'be applied for from HUD for FY July 1, 2002-03. Also, included in
the motion at staff's request were the four recommendations of the.Finance Director: 1 ) an audit
of records at June 30, 2001, which has been completed; 2) annual audits if the support is to be
ongoing; 3) compliance with Federal and State laws, especially as they apply to payment of
payroll, . payroll records and taxes; and 4) accounting records to be in compliance with Generally
Accepted Account Principles. The motion was unanimously approved (Committee member
Salvaggio absent). Staff will prepare an agreement for execution by the Bakersfield Senior
Center.
NEW BUSINESS
A. 'Review and Committee recommendation regarding Bakersfield Senior Center -
Senior Housing Project
Economic Development Director Donna Kunz stated in February this year the Bakersfield Senior
Center came to the Budget and Finance Committee with a request for assistance to buy
additional land for approximately $560,000 to expand their Senior Housing Project. At the time
staff had only identified about $280,000 that was available from prior year CHDO/HOME funds.
The Budget and Finance Committee directed staff to look at financing plans or structure some
type of loan with the organization and bring it back to the Committee. Several months have
AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Thursday, October 4, 2001
Page -3-
passed and it has been difficult to find funding that' would work for this particular project.
Currently there is about $420,000 on hand of CHDO funds, which is a 15% reserve set-aside
of HOME funds, which is part of the City's entitlement block grant program. These funds are
unprogrammed and accumulated over the past two fiscal years. This is insufficient to fund the
Senior Center's request for $585,982.
Staff :has had many meetings with the Bakersfield Senior Center and Retirement Housing, Inc.,
co-sponsor of the project. They are proposing to build an 80-unit senior housing project. They
have receive a 202 capital advance allocation from HUD for $7 million, which is essentially a
grant, there is no debt service. Along with the 202 Grant, comes a guarantee of Section 8
Certificates, so they will have rental income to pay its operations, replacement fund for paint,
etc. The way a 202 is designed the minimum contribution that you have to put up is $25,000
into a loan reserve fund and-is held on deposit with HUD. The 202 money can be used to pay
acquisition, design, and construction. The project is restricted to Iow-income seniors, age 62
and older. It is a 40 year forgivable loan, there is no debt service. Anything that is saved under
the original 202, not used for construction, can be put into an operating account.
Donna Kunz presented two financial options for the Committee to review. There is full funding
available for Option1, approximately $335,000. Option 2 will require all of the HOME/CHDO
funds available this year and-part of next year's allocation.
Option .1 would use the original site (1.8 acres) that was submitted in the 202 .application. The
proposed assistance of $335,000 is based on per square foot value of comparable land in the
area. There has not been a negotiated price. The Bakersfield Senior Center and Retirement
Housing, Inc., as co-sponsors, must form a new entity and the Senior Center must sell their land
to that entity. Staff used a comparable square foot average for analysis. One of the advantages
of building on the original site would be whatever you saved from the 202 moniesl could be used
for future operations of the housing project. Option 1 does not require any acquisition or
relocation.
Option 2 would provide assistance of $495,000 to acquire land for an expanded site
(approximately 2.6 acres). Land for the expanded site is what is being requested-by the Senior
Center. Under Option 2, the proposed assistance is based on several budgets and estimates
and the use of City departments and outside consultants to develop the relocation, demolition
and acquisition costs, with City staff handling the relocation services. This would provide about
2.6 acres and allow for a very nice project. This budget is predicated upon having willing sellers
that are also willing to sell close to our appraisals. If that is not the case, the City's
Redevelopment Agency would have to step up and use its eminent domain powers, which would
add additional costs to the $495,000.
The costs savings the City shows, $495,000 verses the amount being requested by the Senior
Center of $585,982, is possible as the City would be using City staff to do the acquisition and
relocation activities and our analysis has lower estimates on the demolition and relocation.
Informal appraisals were used by the City and the Senior Center to estimate the costs. The
biggest concern with the expanded project is there is no fund to be put into the operating reserve
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AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Thursday, October 4, 2001
Page -4-
account to assure on-going maintenance. You have very-low income, very-low revenue stream
and expenses grow. It is always good to have an operating reserve and also to be able to give
some extra amenities. One key missing is a formal agreement between Bakersfield Senior
Center and Retirement Housing, Inc,, which outlines who is doing what and also how the board
is going to be established, because the City's proposal will be an escrow type situation. The City
would acquire the properties and transfer the land through the Senior Center and right on to the
new entity which must be formed by the Bakersfield Senior Center and Retirement Housing, Inc.
The entire parcel would be put into the project.
Staff did not recommending one alternative over the other, but wanted to give the Committee
two options, as Option 2 will not leave funds available for any other project in the City.
Vernon Strong, Bakersfield Senior Center Project, stated he would like to see schedules of the
totals showing how the City can do this cheaper than their cost and recommendations given to
the City of $585,982. He explained their request to the City was to purchase land for the
expanded site, as the original site is too small to build a quality project.
Mr. Strong explained when they came to the Committee in February, the Committee approved
their request for CHDO funds, which were available for the first $280,000, and the Committee
requested staff to work with the Senior Center to "make the project happen." He continued,
based on this, they went out to the property owners and developed options to purchase the
properties they needed. If HUD-is to consider expanding the project, they need to be able to go
onto the property. Option agreements were entered into with the property owners on what we
anticipated the property would be appraised for. He expressed it is easier to work from an
estimate and an option than it would be to get yourself in a box with an appraisal when that
becomes the value of the property.
Ms. Kunz stated she .would completely agreed if this were a private transaction. However, this
is a public acquisition and as such, there are certain HUD regulations requiring appraisals that
the City must follow for acquisition and relocation that were not followed in obtaining the option
agreements. The City cannot use the options provided by the Senior Center in the application
to HUD. Under Option 2, staff is proposing the City would be acquiring the land and as we do
with any other public acquisition, notice the tenants and property owners and do appraisals.
Dr. Lark spoke about the options and agreements they already have obtained being a better
procedure because it avoids eminent domain and the opportunity of losing the whole project
because of the time factor.
The Committee discussed funding. The City has approximately $420,000 in unprogrammed
HOME/CHDO funds. If the Committee decides to recommend Option 2 to the Council, staff
would recommend $495,000 and taking the balance of funds needed out of next year's
entitlement.
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BUDGET AND FINANCE COMMITTEE
Thursday, October 4, 200~
Page -~-
Mr. Edwards explained there is no comparison between the original site and the expanded site.
There are traffic problems with the entrance to the original site, because of the school traffic
from 7:30 a.m. until 9:00 a.m. with busses and parents dropping children off. The crime on
5"' Street is another problem with the original site. The expanded project will take out the
apartments and empty houses and close the street, which will help cleanup the crime.
Dr. Lark spoke about the quality of life tenants would have with the expanded project. A quality
project will have a direct affect on the value of the lifestyle of the people who are going to live
there.
Committee member Hanson stated'he would support Option 2 as proposed by staff with the City
getting appraisals and purchasingthe proPerties providing we have willing sellers. If the sellers
are not willing, then this needs to be brought back for further negotiations.
Committee .member Hanson made a motion to recommend Option 2 to the City Council
providing that it does not exceed $495,000, which takes into consideration that the property
owners are willing sellers. The Committee unanimously approved the motion (Committee
member Salvaggio absent).
B. Review and Committee recommendation regarding First Night~) Bakersfield request
for financial assistance
Assistant City Manager John Stinson stated last year the City provided support services of
approximately $40,000 in-kind contributions to provide Police, Fire, Public Works, Recreation
and Parks, Economic and Community Development staff and office space. Staff recommended
that the City continue to provide in-kind services this year for First Night~). Staff is not
recommending the request for additional funding of $10,000, costs of facilities or covering the
amount they currently owe Centennial Garden, as these expenses do not fall under the Council's
policy for contributions to non-profits. The City did not 'cover the costs of facilities last year and
those charges were only for actual costs for labor, utilities, and security at the Garden and the
Convention Center for approximately $14,000, which has .not been paid.
At the Committee's request, staff explained the Economic and Community Development budget
was prepared shortly after the First Night~ 2001 event and there was some uncertainty of their
financial condition and Council direction for non-profit funding, so $10,000 was included in the
Economic Development Marketing Promotion Account, which could be used for any promotional
activities.
Financial information including a balance sheet and profit and loss statement for First Night~
were provided. Elaine McNeamey, board member First Night~) Bakersfield, thanked staff for
recommending the $40,000 in-kind support services, as that is how they were able to continue
last year. She explained, the first year, 1999, they operated under the umbrella of the City and
they took over in the second year and formed a nonprofit corporation, but inherited a $20,000
debt. She explained that they did not know 6,000 people would crash the event last year and
so button sales would not cover expenses and they would be unable to pay their bills. They
would like to go forward with the presumption that they will have an event this year. Their board
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AGENDA SUMMARY REPORT
BUDGET AND FINANCE COMMITTEE
Thursday, October 4, 2001
Page -6-
is now completely volunteer with no paid staff. Their current assets total about $16,000 from
fund-raising. They are planning to pay their debts by separate fund-raisers for debt-reduction.
However, new sponsors' money or any contribution from the City is earmarked for this year's
event.
Ms. McNearney explained they have scaled back their budget and will be relying on corporate
sponsors, not just button sales. The schools will be partnering and allowing student button
sales. They are planning a smaller event, shorter time frame, less performers, and to have
security and a more controlled environment, while still having a quality event. If the facilities are
not donated, they do not have the ability to-rent the Centennial Garden and will have to locate
the event elsewhere. She said their request is for $40,000 in-kind services, donation of the use
of facilities at the Arena, Plaza and the Convention Center, and 'for the City to absorb the past
debt of approximately $13,000 still owed to the arena, and also release of the $10,000 in the
current budget. Or secondly, if that is not possible, use the $10,000 as part of paying the past'
debt at' the arena.
Philip Belhumeur, First Night~), spoke about button sales and sponsors and expressed that they
would like to keep the event at the same location, as it is the perfect venue and showcases the
event.
Committee member Hanson thought there should be an effort made to have the performing
artists work at a reduced rate as a contribution toward the event. The event itself is very
worthwhile for the community, but based on the debt still owing for last year, he would be more
comfortable recommending support if there were a plan to show how this year's event will be
financially successful.
Committee Chair Maggard explained the Committee does not have the latitude to go beyond
the Council policy, which was just reaffirmed, on the specific criteria for contributions. He
explained this does not allow recommending the contribution of the $10,000. Also, itwould be
difficult for the City to forgive payment owed to the arena when only actual hard costs were
charged, as the operators who manage the arena are under a performance agreement. He
would support staff's recommendation for in-kind support services of staff and office space.
Committee member Hanson made a.motion to recommend to the Council that the City continue
to support First Night(E) in a suitable venue with in-kind services of staff and office space up to
$40,040 as detailed on the list by staff. The Committee unanimously approved the motion
(Committee-member Salvaggio absent).
C. Review and Committee recommendation regarding application of the business
license ordinance to commercial and residential rental property businesses '
The Committee deferred this item to the next meeting.
DRAFT
BUDGET AND FINANCE GOMMITTEE
Thursday, October 4, 2001
Page
D. Review and Committee recommendation regarding Bakersfield Centennial Garden
and Convention Center Financial Statements (This item heard after 5.A.)
Finance Director Gregory Klimko gave a brief overview of the financial statements.
Jim Foss, Executive Director, Bakersfield 'Centennial Garden and Convention Center, stated that
energy costs have had a significant impact on the cost of operations. They are conserving
energy whenever possible and although their usage is down, rate increases have significantly
increased -their costs. The Public Utilities Commission is considering yet another increase to
businesses and he wanted the Council to be aware of possible additional increases in energy
costs, as it is the second largest line item in their budget.
The Committee accepted and approved forwarding the Bakersfield Centennial Garden and
Convention Center Financial Statements to Council for approval (Committee member Salvaggio
absent). Staff was directed to include the energy cost information in .the administrative report.
6. COMMrI'rEE COMMENTS
7. ADJOURNMENT
The meeting adjourned at 6:45 p~m.
Staff present: City Attorney Bart Thiltgen; Assistant City Manager John W. Stinson; Finance Director
Gregory Klimko; Assistant to the City Manager Darnell'Haynes; Deputy City Attorney Janice Scanlan;
Deputy City Attorney Michael AIIford; Economic Development Director Donna Kunz;
Economic/Community Development Business Manager Rhonda Barnhard; Community Development
Coordinator George Gonzales; Economic/Community Development Principal Planner Vince
Zaragoza; Assistant ' Recreation and Parks Director Allen Abe; City Treasurer Bill Descary; and
Executive Director of the Centennial Garden and Convention Center Jim Foss.
Others present: Alexander H. Lark, Ph.D., Executive Director, Bakersfield Senior Center; Lynn
Edwards, Bakersfield Senior Center; Vernon and David 'Strong, Bakersfield Senior Center/Senior
Housing Project; Elaine McNearney, First Night~; Philip Belhumeur, Longs Drugs/First Night~;
James Burger, reporter, The Bakersfield Californian; and Peter J Rudy, KUZZ Radio
cc: Honorable Mayor and City Council
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7
BAKE R S F I E L D
PUBLIC WORKS DEPARTMENT
MEMORANDUM
TO: BUDGET & FINANCE COMMITTEE
DATE: NOVEMBER 1, 2001
SUBJECT: SEWER USER FEES FOR HOSPITALS
At the May 3, 2001 Budget and Finance Committee meeting, direction was given to staffon the
Sewer Service User Charges for the 2001/02 Fiscal Year. Part of this direction included
modifying the rate structures for nursing homes and hospitals from the average "flat rate" charge
to a usage rate based upon historical water flow data. Thc Committee also directed staff to
identify alternatives for hospitals, nursing homes, and schools which offered the least impact to
these users while still complying with state regulations.
Subsequent to this Budget and Finance Committee meeting, it became apparent that the rates for
hospitals would increase dramatically if a flow basis were to be used as proposed for the nursing
homes. Therefore, at the May 16, 2001 Council Meeting, Council approved keeping hospitals on
the flat rate schedule with a 7 year phase-in period which was the maximum allowable by the
State. The attached administrative report prepared for this Hearing item indicated that staff
w. ould meet with each hospital individually and discuss the impact of going to a flow charge
basis and options available to them, such as installing a separate meter for landscaping.
Because of the fiscal impact of going from a flat rate fee to a fee based upon actual flow, staff
thought that the Budget and Finance Committee may want to revisit this item before staff began
the process of meeting individually with the hospitals.
It is important to note that we have plenty of time to meet with the hospitals because of the long
phase-in period. But it would be beneficial to allow the hospitals as much time as possible to
make adjustments if needed.
We can either proceed as planned and meet with the hospitals on changing from a flat rate fee to
a fee based upon actual flow; or, we could leave hospitals on the flat rate schedule which would
still comply with state guidelines.
G:~G ROU P DA'I~Memo~2001 ',sw~sr feesbosp, wpd
Page 2
November 1, 2001
Sewer User Fees For Hospitals
Following is an explanation of the attached tables:
· Table 1- This table shows the impact for each of the 7 hospitals of phasing in the
current per-bed flat rate (not adjusted for future inflationary increases)
over the council approved 7 year phase-in period.
· Table 2- This table compares the current per-bed flat rate at full implementation
(end of the 7 year phase-in period) to what the sewer charges would be for
each hospital based upon current water consumption data. Please note that
this comparison is not adjusted for future inflationary increases.
· Table 3- This table compares the per-bed flat rate for hospitals for several cities.
As you can see, Bakersfield's fees are the lowest of the surveyed cities.
Eleven of the surveyed cities charge hospitals based upon actual flow.
Each of the 7 hospitals would realize an increase in their annual sewer charges if their fee was
based upon actual water flow. Basing the fee upon actual water flow data would be more
accurate than using the average "flat rate" per bed. Currently wastewater flow is estimated using
90% of the 3 winter months (December, January & February) actual flow data. The estimating
method is to allow for landscape irrigation. If hospitals were to install separate water meters for
landscaping, this would provide the most accurate data for estimating wastewater flow.
Because of the time that has elapsed since this item was last discussed in May, 2001, staff
thought it would be beneficial to meet once again on this issue for discussion purposes.
O:~G ROU PDA'I~Me~m~2001 ~,w msdee sba sp. wpd
ADMINISTRATIVE REPORT
TO: Honorable Mayor and City Council APPROVED
FROM: Jacques R. LaRochelle, Interim Public Works Director DEPARTMENT HEAD~
CITY ATrORNEY~
DATE: May 9, 2001 CITY MANAGER.~
SUBJECT: SeWer User' Charges: '~'
1. Continued hearing to consider a resolution establishing sewer service user charges for
Fiscal Year 2001-02 (proposed revisions in sewer user charges):
2. Acceptance and approval of the City of Bakersfield's Revenue Program forWastewatar
and Stormwater Facilities.
...F[E..C. OMMENDATION: Staff recommends adoption of the Resolution and approval of the Revenue
Program.
BACKGROUND: At the April 25, 2001, Council meeting, a hearing was held to establish Sewer and Storm
Sewer Service User Charges for the 2001/02 Fiscal Year. In .addition, the proposed Revenue Program for
the City of Bakersfield Wastewater and Storm Facilities was submitted for Council approval. As reported in
a previous Council meeting, the proposed Revenue Program was necessary to implement for the following
reasons:
· The current rate structure did not adequately reflect a 'fair share" approach to the actual costs of
treating effluent for some user groups (some user groups pay too much, while some too little).
· The City received three Federal Clean Water Grants and one State Revolving Fund loan for treatment
plant expansions, all of which required an approved Revenue Program.
· The State threatened sanctions and penalties if the Revenue Program was not updated in accordance
with current State guidelines.
During the hearing, a constituent spoke in opposition to the proposed increase for nursing homes. Questions
arose regarding the fa,mess of the proposed fee increase for the nursing homes category. After Council
discussion, this item was referred to the May 3, 2001, Budget and Finance Committee for further review. Staff
was also directed by Council to contact the State and determine if the State would approve a Revenue
Program in which proposed rate increases were phased in over a longer period of time than the staff
recommended 3 year phase in period for various user groups.
At the May 3, 2001, Budget and Finance Committee meeting, 2 constituents (the one who protested at the
Council meeting, plus one additional) spoke in opposition to the increased rates for nursing homes. They both
stated the fee proposal was too high since their particular nursing home establishments contribute relatively
~'~ ;* '* A~DMINISTRATIVE REPORT Page 2
small volume of sewage. Staff pointed out that the proposed rate was based on average usage for the
category and could be modified to an actual usage basis like other existing 'commercial accounts.
Staff distributed a packet regarding the sewer user rates at the Budget and Finance Committee meeting. This
entire packet has been included for reference. The information provided included various options for extending
the term of implementation, with the rate impact of each option, summarized for hospitals, nursing homes, and
schools. In addition, the report shows the subsidy, which will be borne by other users, for each of the phase
in options. It is important to note that the subsidies on Attachment C of the Budget and Finance Committee
packet have changed. The reason forthis is because each of the user groups (hospitals, nursing homes, and
schools) realized the least Impact of the proposed rate Increases under different options.
After some discussion, the Budget and Finance Committee directed staff to:
· identify alternatives for hospitals, nursing homes, and schools which offered the least impact to these
users while still complying with the State guidelines; and
· modify the rate structures for nursing homes and hospitals from the average 'fiat rate' charge to a
usage rate; and
· implement the increase over the longest period of time the SLate would allow.
Subsequent to the Budget and Finance Committee meeting, it became apparent that the rates for hospitals
would increase dramatically if a flow basis were to be used as proposed for the nursing homes. As a result,
staff recommends that hospitals remain on the flat rate schedule as identified at the Aprf125, 2001, Council
meeting with the exception that the phase in period for the proposed rate increase be over 7 years, which is
the maximum allowable by the State, rather than staff's initial recommendation of 3 years. This would give
staff the time needed to meet with each hospital individually and discuss the impact of going to a flow charge
basis and options available to them, such as installing a separate meter for landscaping.
For hospitals, the method most advantageous would be to phase in the proposed fiat rate increases over a
period of years so that the increase is limited to approximately 15% per year, exclusive of future cost of living
adjustments (This option is described in the attached packet which was supplied to the Budget and Finance
Committee.). As noted earlier, staff will meet with the hospitals regarding the flow charge basis. This equates
to a 7 year phase in pedod for hospitals, as noted above. For schools, phasing in the fiat rate increase equally
over a 5 year period would offer the least impact. The rate schedule for nursing homes is recommended to
change from a per bed fiat rate to a per facility fiat rate plus flow charges. The majority of the nursing homes
will realize a decrease with this conversion, although there are a few facilities that would realize an increase.
Based on the direction from the Budget and Finance Committee and subsequent information identified by
staff, sewer user rates for the upcoming fiscal year for the 3 categories in question are proposed to be as
follows:
FY01-02....Oriclinal Pr0D0sal FY01~02 Modified Proposal
· Nursing homes (3 year phase in) $42.94/bed $175.50/facility+flow charges
· Hospitals (7 year phase in) ,$46.80/bed $39.68/bed
· Schools (5 year phase in) $3.98/student $3.79/student
The majority of the following information was given to the City Council at the April 25~h meeting. This text is
repeated for informational purposes and it represents an overview of the revenue program, as modified by the
Budget and Finance Committee:
Single family dwellings are proposed to inCrease 1.74%, from $115 to $117. No rate change is proposed for
multiple dwellings or mobile homes. These residential user groups comprise 94% of all customers.
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ADMINISTRATIVE REPORT
Commercial and industrial user groups comprise 6% of all customers, Of this 6%, annual flat rate fees for 58%
of {hese customers will increase 9%, However, 38% of these customers will actually realize a flat rata fee
decrease. 2.6% of these customers will realize an increase greater than 9%. The remainder will realize a
,o:t.74% increase.
Schools, nursing homes, and hospitals have been modified as described above.
The proposed flat rate fees will be:
User Grouo Cur[ent Fee prpoosed Fee-01/02, Fy
Single Family Dwelling $115.00 $117.00
Mull Owelling/Moblle Home $92.00/Unit $92.00/Unit
Small Stores & Nurseries $161.00 $117.00
Combination Store & Office $276.00 $117.00
Hospitals $34.501Bed $39.68/Bed
Church $126.50 $117.00
Schools $3.571Student $3.79/Student
Hotels - Motels ~34.501Room $35.10/Room
All other Commercial & $161.00 $175.50
Industrial Users*
'Nursing homes will now be included in this category.
The following, are examples of the .impact of the proposed fiat rate fees:
FY00-01 FY01-02
Users-Examples Current Fee Prop~.~ed Fee (as modified)
High School $2,592 $2,755
Hospital $6,222 $7,142
Hotel $4,140 $4,212
In ~td_dition to the,. fiat rat~ (;:harges, sqrcharae fees are charged to commercial (which now includes nursing
homes) and industrial users (6% of all customers) whose demand of the Treatment Facilities exceed baseline
amounts for fiat rate volumes. Approximately half of the commercial and industrial users may be subject to the
~'b,"~harge rates. Previous surcharge fees included Schedule 'A', Schedule "B". and 'Monitored Users'. In
accordance with current State guidelines, the updated revenue program assigns the same surcharge fee to
all users, with the fee dependent upon each users flow and strength of that flow. Of the three components
(flow, BOD, and TSS) of the proposed surcharge fee, staff recommends that the surcharge rate for the flow
component be phased in over a 3 year period because of its impact on some commercial and industrial users.
Informational letters, describing the impact of the proposed surcharge fees, were mailed to all 'Monitored
Users'.
The proposed surcharge fees will be:
FY00-01 FY01-02
Comoonents Current Fee Prop0.~d Fee
Flow, MG $469.30-$703.40/MG/yr. $597.00/MG/yr.
BOD, mg/L $67.20-$77.40/1000 lb. $62.00/1000 lb.
TSS, mg/L $71.30-75.30/1000 lb. $71.00/1000 lb.
~ Page 4
ADMINISTRATIVE REPORT
The following are examples of the impact of the proposed sUrcharge fees:
FYO0-O 1 FYO 1-02
Users (~.urrent Fees Prooosed Fees
Water Softener $6,838 $8,403
Oil Refinery $17,257 .$21,235
Laundry $8,920 $9,572
Industrial Laundry $25,243 $27,459
Food Processer $236,968 $233,700
Restaurant $3,394 $3,829
Car Wash $3,864 $4,135
The shortfall in revenues resulting from the phasing in of the rate increases as proposed above can be
absorbed by existing fund balance.
See Exhibit A of attached resolution for sewer user fee details.
There will be no change for the following Sections of the MISCELLANEOUS SCHEDULE of Exhibit A:
**° i1. Septic Discharoes
~ .... II1. Surcharae for Outside Se~tiq Oischarc[~..S
IV. St~.rcharoes for Outside
V. In~tu~tripl Waste Disch.~me Monitorirtq
VII. Connec;Iion Fee For Major Industrial Dischpr.qer *
Fees for Section VI. Wastewater Services - Other AQencies will be determined in accordance with agreements
entered into between the City and other agencies.
Included with this administrative report is an Executive Summary (identified as Exhibit B) of the updated
Revenue Program for Wastewater Treatment Facilities as prepared by Boyle Engineering Corporation.
A copy of the REVENUE PROGRAM FOR CITY OF BAKERSFIELD WASTEWATER
AND STORMWATER FACIMT1E$ will be available for review at the City Clerk's
Office.
Sewer user charges are collected with property taxes by the Kern County Tax Collector pursuant to the
Bakersfield Municipal Code.
Table 1
Hospitals Sewer Fee - Seven Year Phase-in
Per-Bed Rate on FY00-01 $34.50 $39.68 $44.85 $50.02 $55.20 $60.37 $65.55 $70.20
15% increase $5.18
# of FY 2001/2002 FY2002/2003 FY 2003/2004 FY2004/2005 FY 2005/2006 FY 2006/2007 FY 2007/2008
$39.68 $44.85 $50.02 $55.20 $60.37 $65.55 $70.20
per bed per bed per bed per bed per bed per bed per bed
beds Total char~le Total charge Total charge Total charge Total charge Total charge Total charge
San Joaquin Hospital 178 $7,062 $7,983 $8,904 $9,826 $10,747 $11,668 $12,496
Mercy Hospital 194 $7,697 $8,701 $9,705 $10,709 $11,713 $12,717 $13,619
Bakersfield Memorial Hospital 338 $13,410 $15,159 $16,908 $18,658 $20,407 $22,156 $23,728
Bkfld Regional Rehab Hosp. 60 $2,381 $2,691 $3,001 $3,312 $3,622 $3,933 $4,212
Bakersfield Heart Hospital 47 $1,865 $2,108 $2,351 $2,594 $2,838 $3,081 $3,299
Memorial Behavioral Center 60 $2,381 $2,691 $3,001 $3,312 $3,622 $3,933 $4,212
Mercy Southwest 67 $2,658 $3,005 $3,352 $3,698 $4,045 $4,392 $4,703
P:\Divis4ons\ww~Hospital01 calc.wb3 11101101 11:05:37 AM
Table 2
Hospitals Sewer Fee Evaluation
Rate Comparisons
# of fiat rate Difference
beds by bed ** Total charge by flow * Total charge flow - bed
San Joaquin Hospital 178 $70.20 $12,496 $117.89 $20,984 $8,489
Mercy Hospital 194 $70.20 $13,619 $199.08 $38,622 $25,003
Bakersfield Memorial Hospital 338 $70.20 $23,728 $139.62 $47,192 $23,464
Bkfld Regional Rehab Hospital 60 $70.20 $4,212 $148.94 $8,936 $4,724
Bakersfield Heart Hospital 47 $70.20 $3,299 $209.01 $9,823 $6,524
Memorial Behavioral Center 60 $70.20 $4,212 $130.82 $7,849 $3,637
Mercy Southwest 67 $70.20 $4,703 *** ***
*using 90% of 3 winter months (Dec 2000-Feb 2001 ) water data to estimate WW flow
**reflects per-bed flat rate at the end of the 7 year phase-in period
***water meter serves several buildings which includes the hospital and office buildings
P:~Divis~)ns\ww~Hospita101 calc.wt)3 11/01/01 11:09:51 AM
Table 3: Rates per Bed, 2001-02
Compared with other California Cities
Pleasanton+* ~ ~ ~ ~ ~ ~ ~ ~~~i
Fresno*
Vacaville*
Rialto*
Oxnard*
Modesto+* ~~ ~~~!
Redlands* ~~~~~!
Riverside* ~~
San Bernardino* ~~~~1
Visalia*
Stockton* ~~
BAKERSFIELD ~~! $70.20/Bed
$0 $100 $200 $300 $400 $500
+ Indicates additional administrative/surcharges
* These cities charge users by actual flow. Staff has converted this to a per-bed
rate for comparison.
P:\Divisions\ww\Hospital - new flow data.wb3 11/01/01
BUDGET AND F~NANCE COMMITTEE
PROPOSED :2002 MEETING SCHEDULE
OBudget and Finance Committee I I City Council Meeting Holiday
4:00
Budget Hearing or
Department Presentations
at City Counci~ Meeting
JANUARY FEBRUARY MARCH
S M T W TH F S S M T W TH F S S M T W TH F S
2 3 4 5 t 2 1 2
6 7 8 1t 12 3 4 516] 7 8 9 3 4 5 l.__.~J 7 8 9
20i i~i 22~ 24 25 2ei 19~ 21 22 23 t7 18 19 22 23
27 28 29 30 31 24 25 26 27 28 24 25 26 27 28 29 30
31
APRIL MAY JUNE
S M T W TH F S S M T W TH F S S M T W TH F S
1 2 3 4 5 6 ~ 2 3 4 1
7 8 9 [....!Q_I~1_1~ 12 13 5 6 7[....~ 10 1i 2 4 5 6 7 8
,4 15 t6_....¢¢__.17 19 20 12_13 t4 15 t7 18 9 10 11~ 1.~
1 14 15
21 22 23~ 25 26 27 19I~1 2t 23 24 25 t6 17 18 19 ~ 21 22
28 29 30 26~ ............. 28 29 30 31 23 24 25 27 28 29
3o
JULY AUGUST SEPTEMBER
S M T W TH F S ~'~'""---'~ S M T W TH F S
~ 2 3 5 6 1 2 3 l ii~ ~ii~ 3 ~ 6 7
7 8 9 12 13 4 5 8 7 8 9 10 8 9 10 tl 13 14
14 t5 16 17 t9 20 11 12 13 t4~ t8 17i, 15 t6 17~ 19 20 21
21 22 23 24 25 26 27 18 19 20~ 22 23 24i 22 23 24 25 26 27 28
28 29 30~ 25 28 27 28 29 30 31 29 30
OCTOBER DECEMBER
S M T W TH F S S M T W TH F S S M T W TH F S
112134 5 1 2 t 2 3 4 5 6 7
6 7 8' -'9'~! 11 12 3 4 9 8 9 10~ 12 13 14
13 14 t5 17 18 I9 10,I,i~[~,~.. 16 15 18 17 18 t9 20 21
20 21 22 23 24 25 26 17 18 231 22 23 26 27 28
27 28 29 30 31 24 25 30 29 30
*December 6, 2001