Breaking News: Needles, CA: Needles City Council and Needles Public Utility Authority have approved increases in water and wastewater rates for water and wastewater services.

Source: City of Needles (Information):

Needles, California: Members of the Needles City Council and Needles Public Utility Authority have approved on Tuesday, October 13th, 2020 to approve increases in water and wastewater rates for water and wastewater services.

The vote to approve occurred during the Needles City Council and Needles Public Utility Authority Meeting which was broadcast live at ZachNews on Facebook.

There was two public hearings held tonight to consider all evidence and testimony for or against a proposed increase in water and wastewater, and rates for water and wastewater services.

*** Background on the proposed increase in water and rates for water services (Agenda Item #6): ***

The Needles Public Utility Authority (NPUA)/Board of Public Utilities (BPU) last completed a Cost of Service Study for the water utility in 2014 and adopted proposed rates in 2016. Per the NPUA/BPU a water utility rate study shall be initiated every three (3) years.

In late 2019 the NPUA/BPU initiated a rate review beginning with a Cost of Service Study and hired a third party to complete the review. The NPUA and BPU established an ad hoc committee.

The purpose of the Cost of Service study is to determine the cost of providing the water service overall and to develop a rate structure to allocate to each customer class so that the proposed rate structure is aligned with those costs.
The State Constitution requires that the NPUA cannot charge more than the actual cost of providing water service.

The study included evaluation of several multi-year planning scenarios through interactive work sessions with City staff and the ad hoc rate committee. The analysis evaluated the required rate revenue based on various operation and capital improvement plans, bond issuance and financial policy alternatives.

This process provided a comprehensive understanding of the potential implications of numerous financial management and planning decisions.

Staff provided a comprehensive Capital Improvement Plan that includes water supply, pipe replacement, and system expansion projects. Water supply projects include a new well and reservoir to provide needed source redundancy in the City’s water supply infrastructure.

The pipeline and system replacement projects prioritize the infrastructure with the great deficiencies. With the high need for capital improvements the study explored multiple capital funding options.

City staff, in collaboration with the ad hoc committee, selected a financing plan that uses $5 million in debt financing to cover a portion of the capital expenditures in FY 2021 and FY 2022.

This plan yielded the lowest rate impact on rate payers of the alternatives that were evaluated.

The result was a financial plan that uses the most current data to develop a multi-year projection, meeting the need for important system investments and key financial performance objectives while minimizing rate adjustments to the extent possible.

The final Water Cost of Service study was adopted by the BPU and NPUA in early July and initiated the process required by the California Constitution (Proposition 218, 1998).

Public notice was issued (mailed) on August 21, 2020, identifying the amount of the existing and proposed rates, the basis upon which the proposed rates were calculated, and the reason for the proposed rate increase, and setting a time and place for a public hearing for the BPU and NPUA/City Council.

The public hearing notice was published in the Needles Star as well as online at ZachNews.

Additionally, staff conducted four (4) community meetings and meet with individuals at which ratepayers could receive comprehensive information and determine the proposed rate impact to them and their property and fully understand the water utility and their funding needs.

On October 6, 2020 the BPU conducted and concluded a duly noticed public hearing concerning the recommended rate increases and considered all written and oral comments presented.

No majority written protest to the recommended increases was presented under Proposition 218.

At the close of the public hearing the BPU unanimously adopted Resolution No. 10-6-20 BPU establishing rates for water service, subject to the approval by the NPUA and City Council.

Fiscal Impact: Additional revenues to the water utility to fund capital improvements and meet revenue requirements. A $200,000 water capital improvement transfer is effective November 1, 2020 and will reduce future borrowing.

Recommended Action: NPUA Action: Resolution No. 10-13-2020-1-NPUA approving rates for water service effective November 1, 2020 and rescinding all prior resolutions relating to the establishment of water rates.

City Council Action: Resolution No. 2020-66 approving rates for water service effective November 1, 2020 and rescinding all prior resolutions relating to the establishment of water rates.

*** Agenda Item #6 Packet: ***

CC-06-101320-WATER RATES

*** Background on the proposed increase in water and rates for water services (Agenda Item #7): ***

The Needles Public Utility Authority (NPUA)/Board of Public Utilities (BPU) last completed a Cost of Service Study for the wastewater utility in 2014 and
posed rates in 2016. Per the NPUA/BPU a wastewater utility rate study shall be initiated every three (3) years.

In late 2019 the NPUA/BPU initiated a rate review beginning with a Cost of Service Study and hired a third party to complete the review. The NPUA and BPU established an ad hoc committee.

The purpose of the Cost of Service study is to determine the cost of providing the wastewater service overall and to develop a rate structure to allocate those costs to each customer class so that the proposed rate structure is aligned with those costs.

The State Constitution requires that the NPUA only charge the actual cost of providing wastewater service.

The study included evaluation of several multi-year planning scenarios through interactive work sessions with City staff and the ad hoc rate committee.

The analysis evaluated the required rate revenue based on various operational and capital improvement plans and financial policy alternatives. This process provided a comprehensive understanding of the potential implications of numerous financial management and planning decisions.

The study also completed a review of multiple rate structure alternatives. The review of the rate structures included maintaining the existing fixed fee structure, establish an “flow based” rate structure, and lastly, two structures with both a fixed fee and a flow-based rate component.

The ad hoc committee determined that maintaining the existing fixed fee structure allowed for the greatest level of rate equity among rate payers.
The result was a financial plan that uses the most current data to develop a multi-year projection, meeting the need for important system investments and key financial performance objectives while minimizing rate adjustments to the extent possible.

The final Wastewater Cost of Service study was adopted by the BPU and NPUA in early July and initiated the process required by the California Constitution (Proposition 218, 1998).

Public notice was issued (mailed) on August 21, 2020, identifying the amount of the existing and proposed rates, the basis upon which the proposed rates were calculated, and the reason for the proposed rate increase, and setting a time and place for a public hearing for the BPU and NPUA/City Council.

The public hearing notice was published in the Needles Star as well as online at ZachNews.

Additionally, staff conducted four (4) community meetings and meet with individuals at which ratepayers could receive comprehensive information and determine the proposed rate impact to them and their property and fully understand the wastewater utility and their funding needs.

On October 6, 2020 the BPU conducted and concluded a duly noticed public hearing concerning the recommended rate increases and considered all written and oral comments presented.

No majority written protest to the recommended increases was presented under Proposition 218. At the close of the public hearing the BPU unanimously adopted Resolution No. 10-6-20-1 BPU establishing rates for wastewater service, subject to the approval by the NPUA and City Council.

Fiscal Impact: Additional revenues to the wastewater utility to fund capital improvements and meet revenue requirements.

Recommended Action: NPUA Action: Resolution No. 10-13-2020-2-NPUA approving rates for wastewater service effective November 1, 2020 and rescinding all prior resolutions relating to the establishment of wastewater rates.

City Council Action: Resolution No. 2020-67 approving rates for water service effective November 1, 2020 and rescinding all prior resolutions relating to the establishment of wastewater rates.

*** Agenda Item #7 Packet: ***

CC-07-101320-WASTEWATER RATES

*** Voting Results on Agenda Items #6 and #7): ***

After a long discussion and details on the proposals increases in water and wastewater rates for water and wastewater services, members of the Needles City Council and Needles Public Utility Authority voted.

– Approve increase in water rates for water services voting results:

Needles Public Utility Authority: 6-0
Needles City Council: 5-0

– Approve increase in wastewater rates for wastewater services voting results:

Needles Public Utility Authority: 5-1
Needles City Council: 4-1

Needles City Councilor Louise Evans voted “No” on this agenda item.

For more information regarding the Needles City Council Meetings, please contact the City Clerk’s Office at the City of Needles at: 1 (760) 326-2113 Ext. 145 or Press 2.

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