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RES-1989-361 RESOLUTION NO. 89R-361 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM AMENDING RATES, RULES AND REGULATIONS FOR THE SALE AND DISTRIBUTION OF WATER AS ADOPTED BY RESOLUTION NO. 72R-600 AND AMENDED BY RESOLUTION NOS. 73R-255, 73R-387, 73R-532, 74R-433, 75R-315, 75R-469, 75R-479, 76R-378, 78R-418, 78R-419, 78R-459, 79R-643, 80R-304, 81R-124, 81R-402, 82R-355, 83R-331, 84R-246, 86R-118, 87R-188, 87R-324, AND 88R-368. WHEREAS, the City of Anaheim maintains a water distribution system for the furnishing of water to residents and inhabitants of the City of Anaheim and has adopted Water Rates, Rules and Regulations for the sale and distribution of water; and WHEREAS, the Public Utilities Board held a public hearing on August 17, 1989 and evidence was presented in connection with the proposed revisions of Water Rates, Rules and Regulations; and WHEREAS, the Public Utilities Board considered the California Environmental Quality Act and made the following findings: 1. The largest single expenditure category during the test period of July 1, 1989 through June 30, 1990 is water supply at an estimated $8,484,000. 2. Other operating expenses, estimated to cost $7,070,000 are due to labor and material costs. 3. Debt service requirements and an increase in reserve amounts estimated to cost $2,871,000 are required to meet financial reserves and requirements. 4. The transfer to the General Fund in an amount estimated to be $849,000 is authorized by the City Charter and constitutes an Intra-City transfer. 5. Capital expenditures funded from rates, estimated to cost $4,187,000, are required to meet the Utility's capital project expenses. 6. The decrease in working capital of $737,000 is required to meet the Utility's operating expenses and capital expenses. 7. The fee increases/decreases for services are due to changes in labor cost and material cost. 8. The matters covered in 1 through 7 above come within Section 21080 (b) (8) of the Public Resources Code of the State of California. Thus the establishment of these rates is exempt from the California Environmental Quality Act. 2951a081889 WHEREAS, a Notice of Hearing was published as follows: 1. On July 31, 1989, notice of the public hearing on water rates was published in the Orange County Register and proof thereof is on file with the Secretary of the Public Utilities Board. 2. On July 31, 1989, notice of the public hearing on water rates was published in the Orange County Edition of the Los Angeles Times and proof thereof is on file with the Secretary of the Public Utilities Board. WHEREAS, the Public Utilities Board has considered the proposal of the Public Utilities Department and has considered the evidence presented at the public hearing; and WHEREAS, the Public Utilities Board has made the following findings with respect to the need for changes to the Water Rates, Rules and Regulations: 1. The Water System revenue requirement of the Anaheim Public Utilities Department has been established, as set forth below, on the basis of projections for a test period consisting of the twelve months July 1, 1989 through June 30, 1990. 2. A reasonable estimate of the revenue requirement for water supply costs for the test period is $8,484,000 as shown in Exhibit DML-1. 3. A reasonable estimate of the revenue requirement for other operating expenses for the test period is $7,070,000 as shown in Exhibit DML-1. 4. A reasonable estimate of the revenue requirement for capital expenditures funded from rates for the test period is $4,187,000 as shown on Exhibit DML-1. 5. A reasonable estimate of the revenue requirement for current debt service, lease payment, RANS interest and principal and reserve increases for the test period is $2,871,000 as shown in Exhibit DML-1. 6. A reasonable estimate of the revenue requirement for transfer to the General Fund for the test period is $849,000 as shown in Exhibit DML-l. 7. A reasonable estimate of the revenue requirement for a decrease in working capital for the test period is $737,000 as shown in Exhibit DML-1. 8. A reasonable estimate pf the revenue requirement offsets due to other water revenues and interest income for the test period is $434,000 as shown in Exhibit DML-1. 2951a081889 9. An estimated revenue requirement of $22,290,000 as set forth below, is appropriate for the test period: ITEM REVENUE REQUIREMENT CASH-FLOW BASIS Water Supply Costs Other Operating Expenses Capital Expenditures Funded From Rates Debt Service and Reserve Increases Transfer to General Fund Change in Working Capital Less: Other Water Revenue and Interest Income $ 8,484,000 7,070,000 4,187,000 2,871,000 849,000 (737,000) (434.000) Total Revenue Requirement $22,290,000 10. It is appropriate to perform a cost-of-service study in order to determine the allocated revenue requirement for the test period for the following customer classes: Single-Family Residential, Multifamily Residential, Residential Outside City, Commercial/Industrial, Municipal, Irrigation, and Private Fireline. 11. The customer class revenue requirements, on a utility basis, as determined by a cost-of-service analysis are shown in Exhibit RHH-1 and are appropriate. The estimated total allocated annualized revenue requirement of $22,688,809 as set forth below is appropriate. Customer Class ALLOCATED ANNUALIZED REVENUE REQUIREMENT Cost-of-Service Basis Single-Family Residential Multifamily Residential Residential Outside City Commercial/Industrial Municipal Irrigation Private Fireline $10,066,217 4,381,077 458,548 6,485,016 625,529 105,910 566,512 Total $22,688,809 12. Section 1221 of the City Charter provides that utility rates charged to a class of consumers shall be uniform within the class and shall be based on cost of service for the class. 295la081889 13. On the basis of the preceding finding, the annual class revenues under the proposed rates as shown on page 3 of Exhibit RHH-2 are reasonable and appropriate. Customer Class Revenues At Proposed Rates (Thousands) Revenues At Proposed Rates As A '\ Of Revenues Based On Cost of Service Single-Family Residential Multifamily Residential Residential Outside City Commercial/Industrial Municipal Irrigation Private Firelines $10,066,217 4,381,077 458,548 6,485,016 625,529 105,910 566.512 100 100 100 100 100 100 100 Total $22,688,809 100 14. It is appropriate to continue to fund the Water Capital Replacement Fund by revenues from the sale of water. 15. It is appropriate to decrease the Water Utility debt service budget for 1989/90 from $2,377,000 to $2,355,000. 16. It is appropriate to decrease the Water Utility water supply budget for 1989/90 from $8,664,867 to $8,484,000. 17. It is appropriate to decrease the Water Utility revenue from sales budget for 1989/90 from $22,507,000 to $22,290,000. 18. Reasonable estimates for service fees and charges are contained in the proposed Water Rates, Rules and Regulations. WHEREAS, based on the findings hereinabove made, the Public Utilities Board of the City of Anaheim recommends to the City Council that the Council adopt the findings of the Public Utilities Board with respect to the matters contained herein and adopt the changes to the Water Rates, Rules and Regulations as shown in Exhibit RHH-6. WHEREAS, the City Council has considered the evidence and concurs with the findings of the Public Utilities Board as set forth hereinabove. NOW, THEREFORE BE IT RESOLVED that the findings of the Public Utilities Board be, and they are hereby, adopted by the City Council of the City of Anaheim. 2951a081889 THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Anaheim this 22nd day of August, 1989. ATTEST: ~7(s~ CITY CLERK OF THE CITY OF ANAHEIM 295la08l889 CLERK STATE OF CALIFOID~IA ) COUNTY OF ORANGE ) ss. CITY OF ANAHEIM ) I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 89R-361 was introduced and adopted at a regular meeting provided by law, of the City Council of the City of Anaheim held on the 22nd day of August, 1989, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Daly, Ehrle, Pickler, Kaywood and Hunter NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None AND I FURTHER certify that the Mayor of the City of Anaheim signed said Resolution No. 89R-361 on the 23rd day of August, 1989. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim this 23rd day of August, 1989. ~47L~ CITY CLERK OF THE CITY OF ANAHEIM (SEAL) I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 89R-36l duly passed and adopted by the Anaheim City Council on August 22, 1989. ~~J1_~ CITY CLERK OF THE CITY OF ft-NAHFIM