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HomeMy WebLinkAbout2011-04-14 Packet - SpecialCITY OF UKIAH JOINT CITY COUNCIL UKIAH VALLEY SANITATION DISTRICT AGENDA Special Meeting CIVIC CENTER COUNCIL CHAMBERS 300 Seminary Avenue Ukiah, CA 95482 April 14, 2011 6:00 p.m. 1. ROLL CALL 2. STATUS REPORT OF AD/HOC GOVERNANCE COMMITTEE WORK 3. INVITATION TO UVSD BOARD AND STAFF MEMBERS TO TOUR SEWER SYSTEM FACILITIES AND A SHOWING OF INFILTRATION AND INFLOW VIDEO DEMONSTRATION 4. DISCUSSION OF THE USE OF THE LOW STRENGTH COMMERCIAL RATE FOR MULTI-RESIDENTIAL COMPLEXES WITH OVER 4 RESIDENTIAL UNITS AND A SINGLE MASTER WATER METER AND POSSIBLE DIRECTION TO STAFF 5. DISCUSSION OF IMPLEMENTATION PROCESS FOR 3 MONTH AVERAGE BASIS ADOPTED BY UVSD - VERBAL REPORT BY CITY MANAGER 6. DISCUSSION OF UVSD PLAN FOR FY 2011/2012 RATE STRUCTURE 7. DISCUSSION OF CITY MANAGER LETTER OF JANUARY 20, 2011, REGARDING COMMENTS ON UVSD RATE STUDY AND CONNECTION FEES 8. REPORT ON UKIAH VALLEY SANITATION DISTRICT GENERAL LIABILITY & PROPERTY INSURANCE POLICIES 9. PUBLIC COMMENT 10. ADJOURNMENT Please be advised that the City needs to be notified 72 hours in advance of a meeting if any specific accommodations or interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to reasonably accommodate individuals with disabilities upon request. Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business hours, Monday through Friday, 7:30 am to 5:00 pm I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than 24 hours prior to the meeting set forth on this agenda. Dated this 8th day of April, 2011. JoAnne Currie, City Clerk City oJ- 4Z7kia.F. ITEM NO.: 7 MEETING DATE: AGENDA SUMMARY REPORT 4/14/2011 SUBJECT: DISCUSSION OF CITY MANAGER LETTER OF JANUARY 20, 2011, REGARDING COMMENTS ON UVSD RATE STUDY AND CONNECTION FEES Background: The UVSD Board has been considering new connection fees. The City Manager sent a letter to the District Board of Directors on January 20, 2011, outlining City concerns with the rate study presented to the UVSD Board on December 16, 2010, and further discussed at the January 20, 2011 Board meeting. Discussion: Attached is a copy of the letter sent to the District. The City continues to have concern that the District would be adopting connection fees based on a dramatic reduction of the percentage of the cost to upgrade and expand the Wastewater Treatment Plant attributable to the expansion portion of the project cost which is to be paid by connection fees. The reduction of that percentage is by more than one-third from 32% to 20%, and is being proposed unilaterally without the agreement of the City Council. The letter outlines the reasons that this is of concern to the City. As of this writing, the District has not responded to the question about its unilateral ability to make this reduction. Also, the City continues to have concerns regarding the formula used to recalculate the percentage. The City Manager's letter also stated that City staff had not completed its analysis of the rate study and may have more comments. The City remains concerned regarding both the calculation and cost of the proposed connection fees under consideration by the UVSD Board. City staff have received complaints and concerns regarding the proposed connection fees from potential developers within the City limits. These developers are reacting to fee increases of 70-85% over what would be charged by current city fees. City staff met with the District Manager to discuss the rates methodology. City staff is in the process of analyzing these rates for the 4/20/11 City Council Meeting.. Continued on Page 2 Recommended Action(s): Allow for discussion of the questions raised in the City Manager's letter of January 20, 2011, and for discussion of City concerns regarding proposed connection fees under consideration by the District. Alternative Council Option(s): Citizens advised: Requested by: Prepared by: Jane Chambers, City Manager Coordinated with: Attachments: Letter to UVSD Board 12/16/10 Approved: L~~ e Chambers, City Manager Fiscal Impact: If the proposed fees had been in place, the following newer developments would have paid increased connection fees in the amount of: Name Actual Proposed Branches $75,557.67 $279,882 Starbucks $18,464.60 $62,682.48 Izzi's $4,616.15 $32,833.68 ❑ Budgeted FY 10/11 ❑ New Appropriation Not Applicable F-1 Budget Amendment Required Amount Budgeted Source of Funds title and # Account Number Addit. Appropriation Requested $ $ January 20, 2011 lot Board of Directors Ukiah. Valley Sanitation District 381 N. State Street, Ste. 101 Ukiah, CA 95482 Re: Comments on Rate Study for proposed increase in connection fees Dear Board Members: City staff has concerns about the rate study.presented to. the Board on. December 16, 2010, which provides. the. basis for ihe.proposed increase mi connections fees. on the Board's agenda for its meet3ng.on January 20, 2011.. The City :staff wants to bring these concerns to the Board's attention before it relies on the,Study to increase'the connection. fee. This letter describes the. most significant concerns. With additional time to analyze the study, the, staff may have more comments which it will provide to the Board before it acts to adopt an ordinance changing the connection fee. The most significant concern involves the Study's dramatic reduction in the percentage of the cost to upgrade and expand `Wastewater Treatment Plant attributable. to the expansion portion of the project cost which is to be paid. by .connection fees. The Study reduces that percentage by more than one-third from. 32% to 20%. It appears to City staff that the effect of this reduction is to reduce the District's. contribution toward payment of the debt: service on the, bonds from connection fees. That reduction will have to be made up by contributions from the 612 account which'could shift some of the repayment obligation from District ratepayers to City.ratepayers. Staff does not believe that the Board can make this change unilaterally without the agreement of the City Council.. Over a period of more than seven years, the City and the. District have set fees and entered agreements based on.an agreement that 32%0 of the project cost was attributable to the expansion portion of the project. The.City and the District set connection fees in 2003-2004 relying on that agreement. In 2005, the City and the District set both connections. fees and monthly sewer fees, covering a 5 year period, based on that agreement. In 2006, the City and the District entered the Second Amendment to the Participation Agreement, relying on. that agreement. That agreement,. in fact; recites as a fact that 33°/o of the project cost is attributable to the increase in the WWTP capacity. The engineer's cost estimates for the projects are approximately $2:1,000,000 for the Capacity Project and $42,000,000 for the Upgrade/ Rehabilitation Project [$21M/$63M = 33%].11) In 2006, the City entered the Installment Sale Agreement with ABAG for the issuance of the bonds, relying on that agreement. The City and the District entered the Financing Agreement with the City relying on that agreement. In 2010,. the City conducted a rate study and set its monthly sewer fees for the next five years relying on the 32% figure. 300 SEMINARY AVENUE UKIAH, CA 95482-5400 Phone# 707/463-6200 Fax# 707/463-6204 Web Address: www.cityofukiah.com Ukiah. Valley Sanitation District Januazy l 1' 2011 Page 2 Even if there is'a rational basis for the Study's recalculation of the percentage, both the District and the City have changed their positions, made financial and other commitments, entered agreements and made decisions relying on attributing 32% of the project cost to the increased capacity, of the plant to be repaid by connection fees. Under these circumstances, the District cannot unilaterally change that percentage without the City's agreement, especially when that change could shift costs from District to City ratepayers. The-staff also-disagrees with-the-method-used-by-the-Stady-to-precalculate-the-percentage In.2003, .the City and the District increased the connection fee. It i determining that 32% of the project cost should be paid by connection fees, the City Manager's Report calculated that the capacity of the plant would be increased by 27%, 2.37 million gallons per day (mgd) pre project capacity increased by .64 mgd (.64/2.37 x 100 = 27916). It, then, adjusted the percentage to 32% primarily.based on the determination that the wastewater sforage`pond portion of the *6j.ectwould not have beep needed, if the plant capacity was'not increased. For that reason; it treeted. tile. entire cost of that portion of the project as part of the increase:in capacity. The Rafe Study bases the reduced percentage primarily on the assumption that the percentage attributable to increased 'capacity should not be the . percentage increase in capacity, but rather the.perceatago of capacity in the completed project which represent an increase over the pine-project capacity of the plant (.44/2.37 + .64 x 100 = 21.26%0). The City Finance Directortonsulted` with the City's auditors and other fixiauce directors throughout the state and the consensus of those he consulted is that the Capacity.portion of project cost's should be based' on the. percentage increase in the plant's capacity; not the percentage of capacity in the completed plant available for new connections: The,Rate.Study does not -6.X.- Oin why including the entire cost of the wastewater storage pond in. the `Capacity portion of the project was inappropriate. However, even if reasonable minds could disagree a(s to the proper methodof computing the percentage of project cost attributable toincreased plant capacity, here the District cannot elect an alternate method, where so many decisions and financial commitments were based on 32% figure. The staff also-questions the separate buy-ins (for the Advanced Wastewater Treatment facility, the District collection system and certain equipmehf), when the°prevlous connection fee already included a buy-in based on the existing valuation of the `entire sewer system, which the Bartle Wells study valued at $15,207,000. Because of other pressing demands, the City -staff hasn't completed its analysis of the rate study and may have more comments, which we will submit before the District acts to adopt an ordinance increasing the connection fee. Sincerely, e A. Chambers City Manager CitJ To- NO.: 8 ITEM MEETING DATE: April 14, 2011 AGENDA SUMMARY REPORT SUBJECT: REPORT ON UKIAH VALLEY SANITATION DISTRICT GENERAL LIABILITY & PROPERTY INSURANCE POLICIES Background: The Participation Agreement between the Ukiah Valley Sanitation District and the City of Ukiah requires the City to obtain and maintain liability and property loss insurance coverage in the sum of $5,000,000 to protect the District and City against claims or losses. The City has continuously procured and maintained the required coverage through Alliant Insurance Company's Special Liability Insurance Program (SLIP). On March 8, 2011 the City's Risk Manager was notified by the District Manager that a new liability policy had been independently purchased by the District, without the benefit of coordination with City staff for the review of policy provisions/exclusions, premium costs, or compliance with the Participation Agreement. Discussion: The liability and property policy purchased by the District does not comply with the insurance requirements in Paragraph 2. of the Participation Agreement. The City obtained a copy of the District's new liability and property policy after it was purchased and reviewed it with the SLIP insurance carrier to determine if the City should maintain the existing coverage to remain in compliance with the Participation Agreement. The existing SLIP policy and the new District policy each have "Other Coverage" clauses that place the policies in conflict with each other. In the event of a claim both the District's policy and the existing SLIP policy would be considered "in excess" to each other and would not provide primary coverage. If the City cancels the existing SLIP policy, they will be out of compliance with the Participation Agreement. If the SLIP policy is maintained by the City, it will not provide the coverage it was intended to as long as the District's liability and property policy is available. In addition, if the current SLIP policy is cancelled, the premiums paid for coverage through 9/29/11 will be "short-rated", not "pro-rated", due to the January 2011 effective date placed on the District's new policy, resulting in a loss of premiums paid from the 612 account. Fiscal Impact: F-1 Budgeted FY 10/11 F-1 New Appropriation ❑X Not Applicable Budget Amendment Required Continued on Page 2 Recommended Action(s): Ukiah Valley Sanitation District Board and City Council receive report regarding UVSD liability and property insurance coverage. Alternative Council Option(s): Citizens advised: Requested by: Jane Chambers, City Manager Prepared by: Melody Harris, Risk Manager, City of Ukiah Coordinated with: Jane Chambers, City Manager & David Rapport, City Attorney Attachments: 1."Other Coverage" clauses from GSRMA & SLIP Liability Policies 2.Participation Agreement - Insurance Clause Approved: 41;1~~ J e Chambers, City Manager Subject: Ukiah Valley Sanitation District General Liability & Property Insurance Meeting Date: April 14, 2011 Page 2 of 2 The City wants to clarify the facts regarding the status of the District's liability and property insurance for the UVSD Board and City Council 1. The District's new liability and property policy was purchased independently without the benefit of City staff coordination, resulting in a conflict between the existing SLIP liability policy as described in each policy's "Other Coverage" provisions (see attached). In the event a claim is filed, as long as both policies are in effect, neither policy provides "primary" coverage, each policy is "in excess" to the other. The City is concerned about future liability, unnecessary legal expense, and confusion in the event a claim is filed. 2. The City Attorney has questioned the appropriateness of this action by the District in relation to Paragraph 2 of the Participation Agreement, which states "the City shall obtain and maintain liability and property loss insurance... 3. The City views the District's independent purchase of the new policy as a duplicative expense to the Ukiah Valley Sanitation District, and one that does not comply with the insurance requirements in the Participation Agreement. City staff recommends the Board and Council receive this report and review Paragraph 2 of the Participation Agreement in light of the information provided. SL l~ PoG< hereunder. rocttred - (GY-Other Insnrance. ATTACHMENT .AW 00 551 09 10 "n the- "Company" of any of-its-obligations--- - - - ' If valid and collectible insurance with any other Company is available to the "Insured" covering a loss also covered hereunder, whether on a primary, excess or contingent basis, the insurance hereunder shall be in excess of, and shall not contribute with such other insurance; provided that this clause does not apply with respect to excess insurance purchased specifically to be in excess of this policy; or to other insurance which is intended to provide the remainder of the Limit of Liability stated in the Declarations of this policy when the insurance afforded under this policy provides less than one hundred (100) percent of the limit set forth on the Declarations. (E0 Subrogation. To the extent of any payment hereunder, the "Company" shall be subrogated to all of the "Insured's" rights of recovery, therefore; and the "Insured" shall do nothing after loss to prejudice such rights and shall do everything necessary to secure such rights. Any amount so recovered shall be apportioned as follows: Any interest, including the "Insureds", having paid an amount in excess of any "Participating Named Insureds" Self- Insured Retention plus the Limit of Liability hereunder shall be reimbursed first to the extent of actual payment. The "Company" shall be reimbursed next to the extent of its actual payment hereunder. If any balance then remains unpaid, it shall be applied to reimburse the "Participating Named Insured". The expenses of all such recovery proceedings shall be apportioned in the ratio of the respective recoveries. If there is no recovery in proceedings conducted solely by the "Insured", it shall bear the expenses thereof. However, the "Company" will waive its right of subrogation against any person or organization for whom the "insured" is performing operations, but only if. 1) That person or organization requires in the written agreement with the "Participating Named Insured that the "Participating Named Insured" waive its right of recovery against that person or organization; and 2) The written agreement is made prior to the date of the "Occurrence" (1) Changes. Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or change in any part of this policy or stop the "Company" from asserting any right under the terms of this policy, nor shall the terms of this policy be waived or changed, except by endorsement issued by the "Company" to form a part of this policy. Assignment. Assignment of interest under this policy shall not bind the "Company" until its consent is endorsed hereon; however, if a "Participating Named Insured" shall die, such insurance as is afforded by this policy shall apply (1) to the "Participating Named Insureds" legal representative, as the "Participating Named Insured", but only while acting within the scope of his/her duties as such; and (2) with respect to the property of the "Participating Named Insured" to the person having temporary custody thereof as "Participating Named Insured", but only until the appointment and qualification of the legal representative. (I) Cancellation. Coverage provided to the "Participating Named Insured" under the participation endorsement may be canceled by the "Participating Named Insured" by surrendering the policy to the "Company" or any of its authorized agents or by mailing j to the "Company" written notice stating-w-heu thereaftezthe cancellation-shalLbe_effective The "Company" may cancel the coverage provided to the "Participating Named Insured", by mailing to the first "Participating Named Insured" at the address shown in the participation endorsement written notice stating when, not less than sixty (60) days thereafter, such cancellation shall be effective. Provided that the "Participating Named Ensured" AW 00 551 09 10 Includes copyrighted material of ISO Properties, Inc., 2007 with its permission. Page 16 of 17 9 cam.. .1. _.Duties.in_.the.Event-of-.Occurrence, Offense,- Wrongful-Act,-Claim or Suit a. The covered party must notify Golden State Risk Management Authority as soon as practicable of any occurrence, offense or wrongful Act that may result in a claim or suit. b. If a claim is made or a suit is brought, against any covered party, the- covered party must notify Golden State Risk Management Authority immediately and send Golden State Risk Management Authority any demands, notices, summonses or legal papers received in connection with the claim or suit. C. The covered party must assist Golden State Risk Management Authority, upon its request, in the enforcement of any right against any person or organization that may be liable to the covered party because of injury or damage to which this coverage may also apply. d. No covered party, except at its own cost, may make any payment, assume any obligation, or incur any expense, other than for first aid, without the consent of Golden State Risk Management Authority. ~2.:O;thenansurarice>;or.Coverage>' If other valid and collectible insurance or other coverage is available to the covered party for a loss covered under this Certificate, Golden State Risk Management Authority's obligations are limited as follows: a. Primary Coverage This coverage is primary except when b. below applies. If this coverage is primary, the obligations of Golden State Risk Management Authority are. not affected unless any of the other insurance or coverage is also primary. Then Golden State Risk Management Authority will share with all the other primary insurance or primary, coverage by the method described in c. below. b. Excess Coverage _ This coverage is_excess ove"ay_other primary_insuxaace_or other primary coverage available to the covered party, including but not limited to (1) primary insurance or primary coverage for liability for damages arising out of the premises or operations for which the covered party has been added Page 5 of 7 - - as. -additional insured -by endorsement; and (2) -primary insurance or primary coverage for liability for damages arising out_.._of the maintenance, use or_ operation of any motor.vehicle not owned by the. cove red pa rty. When this coverage is excess, the Authority will have no duty under Coverages A, 6, C or D of this Certificate to defend the covered party against any suit if any other carrier has a duty to defend the covered, party against that suit. If no other carrier , defends, Golden State Risk Management Authority will undertake to do so, but . Golden State Risk Management' Authority will be entitled to the. covered party's rights against all those other insurers or other covering entities. When this coverage is excess over other insurance or coverage, Golden State Risk Management Authority will pay only its share of the amount of the loss, if any, that exceeds the sum of: i. The total coverage would: coverage; and amount that all such other insurance or pay for the loss in the absence of this H. The total of all deductible and self-insured amounts under all that other coverage. Golden State Risk Management Authority will share the remaining loss, if any, with any other:insurance or coverage that is not described in this Excess Coverage provision and was not bought specifically to apply in excess of the Limits of Coverage shown in this Certificate and in the accompanying Memorandum. C. Method of Sharing If all of the other insurance or other coverage permits contribution by equal shares, Golden State Risk Management Authority, will also share equally up to the Limits of Coverage hereunder or the amount of the loss, whichever is less. If any of the other insurance or other coverage does not permit contribution by equal shares, Golden State Risk Management-Author-ity_will_contr-ibute_b-y_limits,_a.cco.r_ding-to- the ratio of the Limit of Coverage hereunder bears to the total of all available limits of insurance and coverage from all applicable policies and memoranda. Page 6 of 7 ' ATTACHMENT Z PARTICIPATION AGREEMENT BETWEEN THE CITY OF UKIM AND THE..UK.LAH VALLEY SANITATION AGREEMENT THIS AGREEMENT is made. this JR1,K day of I U!rreferred to as formed by the Board of Supervisors of Mendocino County.on July 6, 195.4, for the purpose of providing sewage. facilities' for- the unincorporated areas suburban to the City of Ukiah. r: 1995, hereinaf. "CITY, " and the UKIAH VALL,EY California, SANITATION DISTRICT, hereinafter referred to as "DISTRICT." PREMISES between The the Ukiah CITY Valle'y' OF UKIAHSanitation District was duly created and The City of Ukiah has need for continu4ng operation of the sewage disposal facilities to satisfy the present and future sewage disposal requirements of its inhabitants, and Both CITY and•DISTRICT have determined that present and future needs will best be served through the. operation of Joint facilities and that. these facilities will. best serve 'he interests of the City: of Ukiah and the Ukiah Valley Sanitation District and the inhabitants thereof. AGREEMENT CITY and COUNTY agree as follows: 1. The annual costs for treatment, including maintenance, operation,.expansion, upgrading, administration, insurance. and financial'services of the entire sewer system.(treatment plant, trunk sewer, and. collection System,). shall be apportioned between the CITY and DISTRICT sack year based upon the ratio of CITY to DISTRICT sewer service units for each year of operation. For the purpose of this Agreement., one sewer unit is defined as. being a single unit of sewer discharge having ch,araOter st4cs of. flow, D. and suspended sol' equ~.valent.to that 9enerated and , discharged by a typical single family-residential unit. CITY shall be. the .paying and receiving agent for all DISTRICT. operation and maintenance funds. Cost apportionment between CITY and'DISTRICT as described above.shall, b...e adjusted annually at, the beginning of each_tiscal year of"operat~.on based upon the ratio of CITY to DISTRICT equivalent. sewer service units on record as of March 31 each year. PRI;CT acad. CITY against 1vl.aims or •losses, naming, both; -1- ncl CzTY as insured parties:: •Nothing In this paragraph or this Agreement is intended .to. have the af.tdct of making either party, or its officials., agents or employees liable for the torts, contracts or Tither obligations or debts of the other; 'provided,? however:, that DISTRICT';s insurance: shall cover CITY employees, for; claims: ar zing out`.h CITY emp ps:performance: of services. • under this Agreement, _ • 3. The title, management and control of the sewer treatment plant and any additions or changes to it shall remain in CITY. CITY shall maintain said plant and furnish personnel for the maintenance, operation and control of:saidplant. CITY shall also service and maintain the trunk lines and collection lines 4. CITY will not contract with any person, firm, or corporation outside DISTRICT's boundaries- for. treatment of sewage firma, or corporations without the consent of for said per DISTRICT.. a. DISTRICT will, not contract with any person., firm, or corporation outside DISTRICT's boundaries for 'treatment of sewage for said persons, firms, or corporations without the consent of CITY. 6. To carry out the purpose of this: Agreement,. the Board of Directors of DISTRICT and the City Council of CITY shall meet together at such times and places as they shall agree, but in any event at least once a year beginning with the effective date of this Agreement. 7. The term of this Agreement shall be thirty (30) years. CITY or. DISTRICT may cancel this Agreement by giving the other party five (,5) years advance written notice. 8. CITY or DISTRICT may connect the.:sewage collector mains and house laterals which have or.may hereafter be constructed by the other;. at points mutually agreeable to -the City Engineer or other representative of. CITY and to the District Engineer or other representative of DISTRICT. 9. CITY shall Operate, maintain and repair DISTRICT's sewage collection system, including all sewer .mains and laterals, constructed'within the DISTRICT as part of its sewer, collection system. CITY shall maintain the system in good repair, and shall make all required repairs within a reasonable period of time. As part of its obligation under this Agreement, CITY shall construct all required sewer laterals for new connections from the nearest main to the property line.. If -a subdivider is required to install sewer lines as a condition of the subdivision's approval,' CITY shall be required to inspect the construction of those lines to insure compliance with DISTRICT standards, but CITY shall not be-requ-i-red-to-const-ruc"he 3.ines-or-contract-for the - - - construction. -2- JAMES RONCO THERESA MCNERLIN CHAIR VICE-CHAIR KENT PORTER KENNETH MARSHALL MICHAEL PALLESEN DIRECTOR DIRECTOR DIRECTOR UKIAH VALLEY SANITATION DISTRICT SPECIAL MEETING AGENDA APRIL 14,2011- 6:00 P.M. JOINT MEETING BETWEEN THE UKIAH VALLEY SANITATION BOARD AND THE UKIAH CITY COUNCIL CIVIC CENTER COUNCIL CHAMBERS - 300 SEMINARY AVENUE - UKIAH, CA 95482 1. CALL TO ORDER AND ROLL CALL 2. STATUS REPORT OF THE AD HOC GOVERNANCE COMMITTEE WORK 3. INVITATION TO THE UVSD BOARD AND STAFF MEMBERS TO TOUR THE SEWER SYSTEM FACILITIES AND A SHOWING OF AN INFILTRATION AND INFLOW VIDEO (CITY OF UKIAH) 4. DISCUSSION OF THE USE OF THE LOW STRENGTH COMMERCIAL RATE FOR MULTI- RESIDENTIAL COMPLEXES WITH OVER 4 RESIDENTIAL UNITS AND WITH A SINGLE MASTER WATER METER AND POSSIBLE DIRECTION TO STAFF (DISTRICT) 5. DISCUSSION OF AN IMPLEMENTATION PROCESS FOR A 3 MONTH AVERAGE BASIS ADOPTED BY THE UVSD - VERBAL REPORT BY CITY MANAGER (CITY OF UKIAH) 6. DISCUSSION OF UVSD PLAN FOR FY 2011/2012 RATE STRUCTURE (CITY OF UKIAH) 7. DISCUSSION OF CITY MANAGER'S LETTER OF JANUARY 20, 2011, REGARDING COMMENTS ON THE UVSD RATE STUDY AND CONNECTION FEE (CITY OF UKIAH) 8. REPORT ON THE UKIAH VALLEY SANITATION DISTRICT GENERAL LIABILITY & PROPERTY INSURANCE POLICIES (CITY OF UKIAH) 9. PUBLIC COMMENT 10. ADJOURNMENT PUBLICEX~RESSION• .(t?UBIICCOfNIVIENTORITEM$,NOTONTNEAGENDA~ The Board welcomes participation in the Board meetings. Comments shall be limited so that everyone may be heard. This item is limited to matters under the jurisdiction of the Board which are not on the posted agenda and items which have not already been considered by the Board. The Board limits testimony on matters not on the agenda to 3 minutes per person and not more than 10 minutes for a particular subject at the discretion of the Chair of the Board. No action will be taken. draft CITY OF UKIAH JOINT CITY COUNCIL UKIAH VALLEY SANITATION DISTRICT AGENDA Special Meeting CIVIC CENTER COUNCIL CHAMBERS 300 Seminary Avenue Ukiah, CA 95482 April 14, 2011 6:00 p.m. 1. ROLL CALL 2. STATUS REPORT OF AD/HOC GOVERNANCE COMMITTEE WORK 3. INVITATION TO UVSD BOARD AND STAFF MEMBERS TO TOUR SEWER SYSTEM FACILITIES/AND I&I VIDEO DEMONSTRATION 4. DISCUSSION OF THE USE OF THE LOW STRENGTH COMMERCIAL RATE FOR MULTI-RESIDENTIAL COMPLEXES WITH OVER 4 RESIDENTIAL UNITS AND A SINGLE MASTER WATER METER AND POSSIBLE DIRECTION TO STAFF 5. DISCUSSION OF IMPLEMENTATION PROCESS FOR 3 MONTH AVERAGE BASIS ADOPTED BY UVSD - VERBAL REPORT BY CITY MANAGER 6. DISCUSSION OF UVSD PLAN FOR FY 201112012 RATE STRUCTURE 7. DISCUSSION OF CITY MANAGER LETTER OF JANUARY 20, 2011, REGARDING COMMENTS ON UVSD RATE STUDY AND CONNECTION FEES 8. REPORT ON UKIAH VALLEY SANITATION DISTRICT GENERAL LIABILITY & PROPERTY INSURANCE POLICIES 9. PUBLIC COMMENT 10. ADJOURNMENT Please be advised that the City needs to be notified 72 hours in advance of a meeting if any specific accommodations or interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to reasonably accommodate individuals with disabilities upon request. Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business hours, Monday through Friday, 7:30 am to 5:00 pm I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than 24 hours prior to the meeting set forth on this agenda. Dated this 8th day of April,2011. JoAnne Currie, City Clerk f UKIAH VALLEY SANITATION DISTRICT Item No. 4 AGENDA SUMMARY REPORT JOINT MEETING BETWEEN THE DISTRICT BOARD AND THE UKIAH CITY COUNCIL APRIL 14, 2011 DISCUSSION OF THE USE OF THE LOW STRENGTH COMMERCIAL RATE FOR MULTI-RESIDENTIAL COMPLEXES WITH OVER 4 RESIDENTIAL UNITS AND A SINGLE MASTER WATER METER AND POSSIBLE DIRECTION TO STAFF SUMMARY AND DISCUSSION As indicated in the attached agenda summary submitted to the Board of Directors on February 23, the Board received a citizen complaint alleging that the use of the low strength commercial sewer rate to calculate the sewer service charges for residents residing in multi-residential complexes with over four (4) units and metered for water use via a master meter creates unequal treatment of the residential sewer group. The low strength commercial rate produces a sewer service charge that is greater than the charge calculated from the residential rate when the consumption exceeds 8.5 units and a lower charge if the consumption is less than 8.5 units. There is no authority within the current rate setting ordinance (District Ordinance No. 25) for use of the low strength commercial rate for multi-residential complexes mentioned above. The Board referred this for discussion with the City Council and staff at the next joint meeting. Subsequent to the Board's meeting of February 23, 2011, the District Manager received a copy of a letter dated December 7, 2005 which was issued by the City Utility Billing Department and sent to both City and District sewer customers. The letter advises the rate payers of multi-residential complexes with over 4 units that the landlord will billed as a low strength commercial account. There is no mention of this system of billing multi- residential units in the sewer rate study nor is it authorized under current ordinance provisions. However, there is mention of the use of the commercial rate structure in the minutes of the Joint meeting of November 2, 2005; page 478, second to the last paragraph. It is recommended that this issue be discussed and possible direction be provided to staff.. FISCAL IMPACT Should the residential rate be used for multi-residential complexes with over 4 units, the sewer bill for some complexes will be higher or lower than the current sewer bill calculated from the low strength commercial rate. RECOMMENDED ACTION Discuss the issue and provide direction to staff ATTACHMENTS 1. Agenda Summary Report of Item No 6a for the Board's meeting of February 23, 2011 2. E-mail from Mr. Jim Rickel dated February 11, 2011 3. Letter issued by the City Utility Billing Department and dated December 7, 2005 4. District minutes of the Joint Meeting of November 2, 2005 between the City Council and the District Board. Rick Kennedy, PE UVSD District Manager/Engine r/Clerk :b UKIAH VALLEY SANITATION DISTRICT AGENDA SUMMARY REPORT BOARD MEETING OF FEBRUARY 23, 2011 Item No. 6a. RECEIPT OF COMPLAINT FROM MR. JIM RICKEL REGARDING THE USE OF COMMERCIAL SEWER RATES TO DETERMINE SEWER SERVICE CHARGES FOR MOBILEHOME PARKS AND POSSIBLE DIRECTION TO STAFF SUMMARY The District has received a written complaint from Mr, Jim Rickel concerning the use of the low strength commercial rate to calculate sewer service charges for mobile home parks. The low strength commercial rate produces a sewer service charge that is greater than the charge calculated with the residential rate when the consumption exceeds 8.5 units and a lower charge if the consumption is less than 8.5 units. The District Manager has opined that residential rates are to be used for mobile home parks and apartments and the City Finance Director has opined that District Ordinance No. 25 does not clarify that the two referenced class of rate payers are to be charged as a residential rate payer. The District Manager requests that the Board interpret its ordinances or directs it legal counsel to opine on the matter and provide appropriate direction to the City of Ukiah. DISCUSSION The District Manager has in the past questioned the use of commercial rates for mobile home parks and apartments because he has opined that District ordinances state that mobile parks and apartments are residential users of the sewer system but the City continues to use the low strength commercial rate to calculate the monthly sewer service charges for the referenced class of rate payers. As stated previously, the City Finance Director has opined that District Ordinance No. 25 does not clarify that the two referenced class of rate payers are to be charged as residential rate payers..This is true; however, section 8.2 of District Ordinance No 12 defines residential users as each living unit of single family dwelling, apartment houses and mobile homes. Section 8.12 was added to Ordinance 12 with the adoption of Ordinance 25 and Section 8.12A states "this ordinance supersedes and replaces any prior provisions of any ordinance of the Ukiah Valley Sanitation District on the subject of sewer rates, including all amendments thereto, beginning with Ordinance 12 adopted in 1985". Section 8.12B states "Notwithstanding any provision of any ordinance of the District, Section 8.12 supersedes any inconsistent provisions of Sections 8.2, 8.5, 8.6, 8.7, and 8.8 of Ordinance 12 and any amendments to any of those sections". The only inconsistent provision in Section 8.2 is the monthly rate of $5.82 that was to be applied to residential users. Section 8.12D(5) states "Sewer customers are classified as Residential, Commercial, or Industrial based on the strength of their discharge as established by industry standards and Regional Water Resources Control Board guidelines. Section 8.12D(5)a. authorizes the Public Utilities Director to determine the classification of sewer customers following industry standards and Regional Water Control Board guidelines. The District Manager continues to search for the stated reference materials; however, it is noted that Section 3707.2 of the Ukiah Municipal Code defines residential users as each living unit of single family dwelling, apartment houses and mobile homes. Why Does the Residential Rate Matter? Under the current residential rate, a residential customer who uses 10.5 units (3 persons using 85 gallons per day) of water during the winter month pays a minimum sewer charge of $47.18 plus $1.85 for each unit of water for a total of $66.61. Under the current low strength commercial rate, a customer who uses 10.5 units of water pays $7.40 for each unit of water for a total of $77.70. For a residential customer who uses 3.5 units (single person who uses 85 gallons per day) of water the sewer bill is $47.18 + $1.850.5 for a total of $53.66. For a low strength commercial customer using 3.5 units, the sewer bill would be the minimum sewer bill of $47.18 because 3.5 X $7.40 ($25.90) is less than the minimum charge. Residential customers are being treated differently and it is imperative that all residential users be treated equally as to the application of rates. FISCAL IMPACT An analysis of how this would affect revenue from sewer service charges has not been done but it is imperative that all residential customers be treated equally as to the application of rates. RECOMMENDED ACTIONS Interpret District Ordinances as they pertain to the residential user and direct legal counsel or the District Manager to inform the City of Ukiah of the Board's interpretation, OR Direct legal counsel to review the matter and issue an opinion and inform the Board and City of Ukiah accordingly. ALTERNATIVE ACTIONS Provide other direction to staff ATTACHMENTS , Copy of e-mail from Mr. Jim Rickel communicating the complaint. Rick Kennedy, PE UVSD District Manager/Engineer/C erk 2 Ukiah Valley Sanitation District From: jim rickel gim.rickel@yahoo.com] Sent: Friday, February 11, 2011 10:04 AM To: ukiahvalleysd@att.net Subject: Complaint Mr. Rick Kennedy District Manager This E mail is an official follow-up complaint about how I and others are being charged for sewer rates. In review: I am advocating for my self and other residents of the IE Mobile Country Club at 3900 N. State St. Ukiah. The management (The Tannous Family) has not been charging each resident the proper rates. For example the basic sewer charge of $47.18 and a consumption fee of $1.85 for each unit of water used. The City of Ukiah seems to be charging the park a commercial rate and not a residential rate. This appears to be the main issue with management of park. This billing is causing the Tannous family to over charge me and other while under charging families with larger consumptions. Have provided documents in support of issue. Request the District address this issue. Thank you, Jim Rickel, Spokesman Mobile Country Club Advocacy Group CW of Ukiah and Uklah ''V' y Swdt:attau Dl*jW seww cusWmers Frm: City of Ul UtWty RJULug l( atrtm"t Date: Doemb e r 7, 2905 The City Council and 84atadoti Muhl Bow of Ow tors a dwd us to, bigWight so= lets about the new sower ma and how try a . odo di fpt rent 11viag in a%~ h' lEs= duplexes. ix pl"" & f+atxxVl"Os. We bVC` than snow y will. M 90"t wine of your qwmdons and lead to a bem understanding of the rue chatrWa eft on year individW siawtion: W most caws, bOgianittag December 120, tilts of aunts, trn r parks or culler multi-rtsidea. complexes will no langar be billlnd $165Lby tlxe City fox sewear sue. (NOW If YOU curterntly pay the City for individually watered water use, you w1U continue to pay for your sower savim). New City sewer s Bides for sa viom received afw December 1, M will charge Sewer and waver Costs to the pem a who saw the water Will, na lly tbo landlord in multi-res 4ent complexes. Under the new sewer rates the latrdloud will be billed for rower verviciz based on the water used by the entire cx►xtxpl$x in the invuth of J_pnuwy, w rda3: by the f minter readin$ after J ~ of =h year. January water use is tl basis for ft rmwet charge be cause winter waitrar use is ii&uully indoor use, resulting in sower use at appwxii iteiy the suw rate. `lam City hu w tole in how D;an olds may choose to ha<dt3le tltc sower erxpem With their t+ ts. ` Ile City Utility Customer Service Departnv at can belp you with yvw individual sb=tion. Please can our rate change iinfoxmadon luxe at 467-5787 and please be sure to leave us your r„uewmm number and the best time to reach you. The following infmnation is meted to asst all pules in un&"tandi.ng the sewer rates and what faem may taftuence imdividual bill ate: rates Include dwm poWbk sibudions: l; Multi-resident oon flexes vA& cavvt +t r rtial- ullift wd a sln mama wader W *W fb r ail units: l nndkod is biBod ex ~a ~ Wit, based on the water meager at $3.29 per hcf C `htandred cubic four), is 74 gagous of wWa r. 2. Multi-resident complexes with 4 sideatisl, or f werr mitts and a single master war motor for all units: The Land Ord is billed as a msielerrtid arc ttnt3=1udlag a fixed amount of $20.97 per reddential unit plus water usage at $0.82 per hof, 3. Multx"rexsidaut OQWOC 4M of any sim with i uh ndw d water ' for eaach r dcwW melts: Bills airs calculatexl for ~ irAvidual Vidal ~t and sent fitly to the raWant al atonant. T`ire bid iWudes a hared anvAmt of $M.97 for rho reddentiai unit plus water usage at $0.82 per hef . UKIAH VALLEY SANITATION DISTRICT SUMMARY/ACTION MINUTES NOVEMBER 2, 2045 BEFORE THE UKIAH VALLEY SANITATION DISTRICT COUNTY OF MENDOCINO . STATE OF CALIFORNIA The Board of Directors of the Ukiah Valley Sanitation District (UVSD) convened a joint Public Hearing with the Ukiah City Council on Wednesday, November 2, 2005, at 6:15 p.m., with the following members present: Directors Michael Delbar, Jim Wattenburger, and Doug Crane. Chairman Delbar presiding. Also present: Mr. Frank Zotter, Jr., Chief Deputy County Counsel; Mr. Tony Shaw, County Executive Office; and Nis. Kristi Furman, Clerk of the Board/District Secretary. Also Present: Ukiah City Council Members: Mr. Doug Crane (also sitting as District member), Ms. Mari Rodin, Mr. John McCowen, and Mr. Phil Baldwin; Mr. Mark Ashiku, Mayor; Ms. Candace Horsley, Ukiah City Manager; Mr. Bernie Ziemianek, City of Ukiah, Public Utilities Director; Mr. David Rapport, City Attorney; Mr. Mike McCann, City Finance Director; and Ms, Marie Ulvila, City Clerk. Others Present: Mr. Doug Dove and Ms. Tatiana Oiea, Bartle Wells Associates. 1A) "-6:'1}5 •P,M ' lAL OF RATE PACKAGE AND,FEE INCREASES 5 200 200Fi'.0 ommo-LACING C?Ecf=MBER: 1, bPosll ib,N ,N0. 218 UpTI IcATtoN - UKIAH J.ECT' McCann, City Finance Director, introduced benefit of those present, describing the FOR S1 W t 'S~R~I "E .FOR 'rHE,"FISCAL YEAR 2005) TNROI~GH Z00 &-29 .1 Q PURSUANT TO- I, VALLEY W45TEWAT~R TREATMENT PLANT ARC Presenter/s: At Mayor Ashiku's invitation, Mr. Mike the item providing background information for the process leading to tonight's public hearing. Mr. McCann reported that a joint meeting was held on September 14, 2005, with the City Council and Ukiah Valley Sanitation District Board of Directors to present a plan to update the City and District Sewer Rate Schedule. The plan will generate the revenue necessary to support bond financing for the wastewater treatment plant Rehabilitation and Capacity Addition Project and other capital expenses. The plan established pricing based on volume and content of wastewater discharges. Annual rate increases included in the new Rate Schedule provide funding for operation and maintenance of the wastewater system as well as repayments of the construction bonds. Mandated notices were mailed to affected parties on September 16, 2005, announcing tonight's public hearing on these proposed rate changes, in accordance with Proposition No. 218. Mr. McCann described that this action is a starting point, rather than an ending point, reporting that staff will monitor changes in the proposed billing process, and the revenue stream, in an effort to identify equity issues for potential future adjustment(s). Mr. Doug Dove, representing Bartle Wells Associates, a public finance advisory firm specializing in wastewater system financing and rate setting issues, addressed the Council/District performing a PowerPoint presenting summarizing the proposed rate chart as contained in the notices transmitted to property owners; the anticipated bond issuance is approximately $75,000,000. Mr. Dove reported that Bartle Wells is proposing a change from the current billing system from multi-family billings, recommending a transition to the industry standard (one meter/one bill), stating that industry standard changes are recommended so as to reduce the homeowner PAGE 477 8 UKIAH VALLEY SANITATION DISTRICT - SUMMARY/ACTION MINUTES - NOVEMBER 2, 2005 PAGE 478 delinquency/default billing situation. Currently, multiple family and single-family dwellings are similarly billed. Under the proposed billing structure, the philosophy is one meter, one bill per meter (with unpaid billing transmitted to the owner rather than the renter). The customers receiving "sewer service only" are the customers most impacted by the billing change. In response to Council/District inquiry, Mr. Dove referenced sewer rates in neighboring jurisdictions, which range to a high of approximately $68 per month per residence. Mr. Dove also noted that the current 10% default rate on billings is high, which could impact the bond rating from an A to an A-, resulting in a negative financial implications on a bond issuance of this amount. Director Wattenburger inquired as to the possibility of implementing a procedure to work with the water supplier, through an agreement, to leverage billing compliance, as an alternative to implementing a completely new billing process. Ms. Candace Horsley, City Manager, reported that staff plans to return to the council within a six month period to address potential modifications to the billing process/system. Proper Notice was established and the PUBLIC HEARING WAS OPENED. Public Comment: Mr. Ukiah Morrison; Mr. Ken Farnsworth; Ms. Els Cooperider; Ms. Judy Hatch; Ms. Cynthia Hernandez; Mr. Bob McAdoo; Mr. David Lee Carter; Ms. Dorothy Grivette; Ms. Lynn Hoomalu; Mr. Warren Sawyers; Mr. Leland Kramer; Mr. Estok Menton; Ms. Judy Pruden; Mr. Lloyd Gerbreth; Mr. Bob Wright; and Mr. Charlie Ruelle. THE PUBLIC HEARING WAS CLOSED. Councilmember McCowen referenced the consumption use rate, noting that the rate is established in January, followed by Mayor Ashiku's explanation of the triggering of the consumption rate, which may encourage conservation. In response to Council member, inquiry, Mr. Dove and Ms. Olea provided clarification pertaining to the bond issuance, noting that the bond is a thirty-year bond, with increases to rates as impacts occur, based on the mandated justification, and based upon the cost of providing the service. The consultants also responded to inquiries pertaining to impacts to rates resulting from other sources of revenue to offset the rate structure. Councilmember McCowen sought information pertaining to the possibility of two rate structures in consideration of senior citizen and/or fixed income residents, to which Mr. McCann responded that it is not permissible to charge one customer more to offset the discount for others (referencing the Proposition No. 218 notices); however, some agencies supplement the utility fund from other discretionary funding sources to enable the entity to offer a reduced-cost rate to qualifying customers. Councilmember McCowen summarized concerns with rate structures and proposed modifications to the billing system, suggesting an alternate proposal would be to assess every residential customer a fixed monthly minimum rate of $20.97: if the usage per unit does not exceed the 8.5 average units of water consumption; if usage does exceed 8.5 units of water consumption (5-plex and larger; rather than using the commercial rate structure; usage criteria would dictate the monthly fee); users of larger volumes of water will pay more. Further discussion ensued relative to the impacts to landlords with regard to the proposed billing system, concerns with the rate structure and the increases projected over the term of the bond cycle, charges for residential customers, recommendations for modifications to the proposed ■ UKIAH VALLEY SANITATION DISTRICT - SUMMARY/ACTION MINUTES - NOVEMBER 2, 2005 PAGE 479 rate increases at the projected timeframes, fixed fee minimum/consumption charge and potential challenges in the collection of the necessary information from each property (landlord and/or tenants). Following City Council action on the item, Counsel Zotter advised the District of the need to take urgency action to adopt the proposed ordinance, effective immediately, because the City will act to adopt new rates on November 2, 2005, by resolution, in order to obtain bond financing for the construction of the improvements to the City sewer plant. Counsel Zotter advised the District it may wish to consider removal of proposed language contained within the ordinance pertaining to the "master meter" requirement at this time due to the concerns as expressed. Mr. Zotter referenced the District's proposed ordinances "clean" and "marked up" which, to the degree possible, match the ordinance and resolution that Mr. Rapport prepared for the City. The amendment to § 8.1 of the District's Ordinance 12 (the "master" ordinance for the District's services) is the equivalent of the City's amendment to § 3707.1 of the City Code; the addition of a new 8.13 to Ordinance 12 tracks the resolution that was done for the City's rate sections, District Action Upon Motion by Director Wattenburger, Seconded by Director Crane, and carried unanimously; IT IS ORDERED that the Ukiah Valley Sanitation District Board of Directors hereby makes the urgency findings, as stated and amended, introducing and adopting an Ordinance Amending Section 8.1 of Ordinance 12 and Adding Section 8.12 to Ordinance 12 Pertaining to Sewer Service Charges, authorizing the Chairman to sign same; further, directs staff, at the earliest opportunity, to investigate the Care Program, senior citizen discount, and related matters. ORDINANCE NO. 25 URGENCY ORDINANCE OF THE UKIAH VALLEY SANITATION DISTRICT AMENDING SECTION 8.1 OF ORDINANCE 12 AND ADDING SECTION 8.12 TO ORDINANCE 12 PERTAINING TO SEWER SERVICE CHARGES 2A) PUBLIC EXPRESSION None presented. 2B) ANNOUNCEMENTS/OTHER BUSINESS None presented. 2c) SET THE NEXT MEETING OF THE UVSD 2D) ADJOURNMENT THERE BEING NOTHING FURTHER TO COME BEFORE THE UKIAH VALLEY SANITATION DISTRICT, THE MEETING ADJOURNED AT 9:10 P.M. MICHAEL DELBA airman ATTEST: KRISTI FUR N, Clerk of the Board Secretary, Ukiah Valley Sanitation District Item No. 5. UKIAH VALLEY SANITATION DISTRICT AGENDA SUMMARY REPORT JOINT MEETING BETWEEN THE DISTRICT BOARD AND THE UKIAH CITY COUNCIL APRIL 14, 2011 DISCUSSION OF THE IMPLEMENTATION PROCESS FOR A 3 MONTH AVERAGE BASIS ADOPTED BY THE UVSD - VERBAL REPORT BY CITY MANAGER SUMMARY AND DISCUSSION This item has been agendized by City staff. Attached to this cover sheet is a copy of a letter dated February 10, 2011 that was mailed to the City Manager regarding the issue. FISCAL IMPACT NA RECOMMENDED ACTION NA ATTACHMENTS 1. Copy of letter mailed to the City Manager and dated February 10, 2011. Ricl Kennedy, PE UVSD District Manager/Engin er/Clerk UKIAH VALLEY SANITATION DISTRICT RICK KENNEDY 387 North State Street, Suite 101 District Ukiah, California 95482 Manager/Engineer/Clerk TELEPHONE AND FAX: (707) 462-4429 EMAIL ADDRESS:UKIAHVALLEYSD@ATT.NET February 10, 2011 Jane Chambers City Manager City of Ukiah Ukiah, CA 95482 WEB SITE ukiahvalleysd.com Re: Use of Winter Water Meter Readings for Calculating the Consumption Component of the Monthly Sewer Bill Dear Ms. Chambers, As you are most likely aware, the Ukiah Valley Sanitation District Board of Directors recently modified the manner in which the consumption component of the sewer bill is calculated with the adoption of District Ordinance No. 34 (copy enclosed). The single month of winter water usage has been replaced with an average winter water use for the meter reading periods for the months of January, February and March. Since the Board's decision to adopt the recommended average winter water use was made before the City's acquisition of new financial software that will assist with the averaging of three monthly meter readings, District staff is suggesting that they be responsible for calculating the averages and forwarding the information to the City. I respectively request that you forward to the District the readings for your January, February, and March billing periods for those sewer rate payers who reside in the "Overlap" area. Recently, the Finance Department provided the District with a listing of District rate payers by address and it was generated from an Excel spreadsheet that was populated with data retrieved from your finance software. The file name is S:\ Finance\ xfered from FINANCESHARE on FS4 (fs4)\UVSD\DATA Sept 2010\SDOutsideList.xlsx. I am requesting an electronic copy of this file to use as the water use data base as well as an electronic copy of the data base for the District ratepayers in the "Overlap" area. It appears that this may be the most expeditious means relaying the average of the water meter readings to your Finance Department but, if not, we are certainly open to discussing the best means of presenting the data. BOARD OF DIRECTORS KENT PORTER JAMES RONCO DIRECTOR CHAIR THERESA MCNERLIN VICE-CHAIR VACANT MICHAEL PALLESEN DIRECTOR DIRECTOR Jane Chambers February 10, 2010 I have requested the General Managers of Willow County Water District and Millview County Water District to submit to the District the readings for the referenced months. Thank you for your continued cooperation and assistance in this matter. Sincerely, Rick Kennedy / District Manager/ Engineer/ Clerk Ukiah Valley Sanitation District From: Ukiah Valley Sanitation District [ukiahvalleysd@att.net] Sent: Wednesday, March 16, 2011 9:10 AM To: Jane Chambers Cc: Jim Ronco Subject: FW: Agenda Development for the Scheduled Joint Meeting of 4-14-11 Between the Ukiah City Council & UVSD Board Jane, I ask that the following be included in the item "Discussion of Implementation Process for 3 month Average basis adopted by UVSD" : status of letter of request dated 2/10/11 to City from District. Thanks. Rick K From: Jane Chambers fmailto:jhambers@CityofUkiah.com1 Sent: Tuesday, March 15, 20114:07 PM To: Ukiah Valley Sanitation District Subject: RE: Agenda Development for the Scheduled Joint Meeting of 4-14-11 Between the Ukiah City Council & UVSD Board The City would like the following items on the agenda: Status report of Ad/Hoc Governance Committee Work Invitation to UVSD Board and staff members to tour sewer system facilities Discussion of issues related to Insurance Coverage changes made by UVSD Discussion of Implementation Process for 3 month average basis adopted by UVSD Discussion of UVSD plan for FY 2011/2012 rate structure Discussion of City Attorney's letter January 20, 2011, regarding comments on UVSD rate study and connection fees From: Ukiah Valley Sanitation District fmailto:ukiahvalleysd(aatt.net1 Sent: Tuesday, March 15, 20112:22 PM To: Jane Chambers Cc: Jim Ronco Subject: Agenda Development for the Scheduled Joint Meeting of 4-14-11 Between the Ukiah City Council & UVSD Board Jane, The District proposes that the following item be placed on the agenda for the next joint meeting of 4/14/11: "Discussion of the Use of the Low Strength Commercial Rate for Multi-residential Complexes with Over 4 Residential Units and a Single Master Water Meter and Possible Direction to Staff". The District has received a complaint from a resident that the use of the low strength commercial rate for multi- residential complexes creates an unequal treatment amongst the residential user as this user group is defined in Section 8.2 of District Ordinance 12 and 3707.2 of the Ukiah Municipal Code. Attached is an ASR that was submitted to the Board on 2/23/11. The Board referred the item to the joint meeting. I have since received a copy of a letter to City and District sewer customers from the City Utility Billing Department dated 12/7/05 advising them of the use of the low strength commercial rate. However, the residential user group as defined in the District Ordinances and City Code defines residential user as residents of single family homes, apartments and mobilehomes. At consumptions below or above 8.5 units, the resident pay less than or more than residents of single family homes. Rick K off. UKIAH VALLEY SANITATION DISTRICT Item No. 6 AGENDA SUMMARY REPORT JOINT MEETING BETWEEN THE DISTRICT BOARD AND THE UKIAH CITY COUNCIL APRIL 14, 2011 DISCUSSION OF UVSD PLAN FOR FY 2011/2012 RATE STRUCTURE SUMMARY AND DISCUSSION This item has been agendized at the request of City staff. Attached to this cover sheet is a copy of a letter dated March 22, 2011 that was mailed to the City Manager regarding the issue. FISCAL IMPACT NA RECOMMENDED ACTION NA ATTACHMENTS 1. Copy of letter mailed to the City Manager and dated March 22, 2011. C~~- Ric Kennedy, PE UVSD District Manager/Engine r/Clerk RICK KENNEDY District Manager/Engineer/Clerk March 22, 2011 Jane Chambers City Manager City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 Re: Response to Letter of Request Concerning Timeline for District Rate Hearing Dear Ms. Chambers: This letter responds to your letter of inquiry of March 14th regarding the District's timeline for the pending rate hearing that will be held to consider sewer rate increases for the period covering the fiscal years from 11/12. to 14/15. The Board's Standing Committee on Finance is currently reviewing the District's revenue requirements that are needed to cover the District's expenses for the stated period; this includes the review of discretionary expenses, assumptions, and the required net coverage for the District's share of the WWTP bond debt. The Finance Committee will submit their recommended rate structure to the Board on April 21, 2011 and it will seek authorization to issue the required Notice of Hearing. The tentative date for the rate hearing is June 16, 2011. UKIAH VALLEY SANITATION DISTRICT 387 North State Street, Suite 101 Ukiah, California 95482 TELEPHONE AND FAX: (707) 462-4429 EMAIL ADDRESS:IJKIAHVAiLEYSD@ATT.NI T WEB SITE uki.ahvalleysd.com Sincerely, Rick Kennedy District Manager/ Engineer/ Clerk KENT PORTER DIRECTOR BOARD OF DIRECTORS JAMES RONCO CHAIR THERESA MCNERLIN VICE-CHAIR KENNETH MARSHALL MICHAEL PALLESEN DIRECTOR DIRECTOR. 1. JV1.1 January 20, 2011 ITEM NO. 7 Board of Directors Ukiah. Valley. Sanitation District 387'K State Street, Ste. 101 Ukiah, CA 95482 Re: Comments on Rate Study for proposed increase in connection fees Dear Board Members: City staff has concerns about the rate study presented to. the Board on. December 16, 2010, which provides. the. basis for the proposed increase in connections fees. on the Board's agenda for its meeting.on January 20, 2011.. The City staff wants, to bring these concerns to the Board's attention before it relies on the Study to increase'the connection. fee. This letter describes the. most significant concerns. With additional time to analyze the study, the, staff may have more comments which it will provide,to the-Board before it acts to adopt an ordinance changing the connection fee. The most significant concern involves the Study's dramatic reduction in the percentage of the cost to upgrade and expand wastewater Treatment Plant attributable. to the expansion portion of the project cost which is to be paid, by .connection fees. The Study reduces that percentage. by more than one-third from. 32% to 20%. It appears to City staff that the effect of this reduction is to reduce the District's contribution toward payment of the debt. service on the bonds from connection fees. That reduction will have to be made up by contributions from the 612 account which could shift some of the repayment obligation from District, ratepayers to City., ratepayers. Staff does not believe that the Board can make this change unilaterally without the agreement of the City Council.. Over a period of more than seven years, the City and the. District have set.fees and entered agreements based on an agreement that 32% of the project cost was attributable to the expansion portion of the project. The City and the District set connection fees in 2003-2004 relying on that agreement. In 2005, the City and the District set both connections. fees and monthly sewer fees, covering a 5 year period, based on that agreement. in 2006, the City and the District entered the Second Amendment to the Participation Agreement, relying on. that agreement. That agreement,, in fact, recites as a, fact that 33% of the project cost is attributable to the increase in the WWTP capacity. ("The engineer's cost estimates for the projects are approximately $21,000,000 for the Capacity Project and $42,000,000 for the Upgrade/ Rehabilitation Project [$21M363M = 33%0].") In 2006, the City entered the Installment Sale Agreement with ABAG for the issuance of the bonds, relying on that agreement. The City and the District entered the Financing Agreement with the City relying on that agreement. In 2010,. the City conducted a rate study and set its monthly sewer fees for the next five years relying on the 32% figure. 300 SEMINARY AVENUE UKIAH, CA 95482-5400 Phone# 707/463-6200 Fax# 707/463-6204 Web Address: www.cityofuklah.com Ulrich, Valley Sanitation District January 1 T' 2011 ' page 2 Even if there is 'a rational basis for the Study's recalculation of the percentage, both the District and the City have changed their positions, made financial and other commitments, entered agreements and made decisions relying on attributing 32% of the project cost to the increased capacity of the plant to be repaid by connection fees. Under these circumstances, the District cannot unilaterally change that percentage without the City's agreement, especially when that change could shift costs from District to City ratepayers. - • The-staff-also-disagrees with-the-method used by-the-Study-to recalculate-the-percentage, In 2003, .the City and the District increased the connection fee. Iii determining that 32% of the project cost should be paid by connection fees, the City Manager's Report calculated that the capacity of the plant would be increased by 27%, 2.37 million gallons per day (mgd) pre-project capacity increased by.64 mgd (.64/2.37 x 100 = 27%). It, then, adjusted the percentage to 32% primarily.based on the determination that the wastewater storage`pond portion of the project would not have been needed, if the plant capacity was"not increased. For that reason; it.treded tlie.eii&. 6 cost of that portion of the project as part of the increase in capacity. The Rate Study bases the redhead percentage primarily on the assumption that the percentageattributable to increased 'capacity should not be' the percentage increase in capacity; but rather the,percentage'ofcapacity in the completed project which represent an increase over the pre=project capacity of the plant (.64/2.37 4-.64 x 100 = 21.26%). The City Finance Director'eonsulted" with the City's auditors and other &a&b directors throughout the state and the, 'consensus of those he consulted is that the Capacity.portion of project costs should be based' on the percentage increase in the plant's capacity; not the percentage of capacity in the completed plant available for new connections: Tl a Rate.Study does not explain why including the entire cost of the wastewater storage pond in• the'Capaeity portion of the project was inappropriate. However, even if reasonable minds could disagree as to the proper method of computing the percentage of project cost attributable to 'increased plant capacity, here the District cannot 'elect an alternate method, where so many decisions and financial commitments were based on 32% figure. The staff als6questions the separate buy-ins (for the Advanced Wastewater Treatment facility, the District collection system and certain equipment), when the `previous connection fee already included a buy-in based on the existing valuation of the entire sewer system, which the Bartle Wells study valued at $15,207,000. Because of other pressing demands, the City- stiff hasn't completed its analysis of the rate study and may have more comments, which we will submit before the District acts to adopt an ordinance increasing the connection fee. Sincerely, ane A. Chambers City Manager Item No. 8 UKIAH VALLEY SANITATION DISTRICT AGENDA SUMMARY REPORT JOINT MEETING BETWEEN THE DISTRICT BOARD AND THE UKIAH CITY COUNCIL APRIL 14, 2011 DISCUSSION OF UVSD GENERAL LIABILITY & PROPERTY INSURANCE POLICIES SUMMARY AND DISCUSSION This item has been agendized at the request of City staff. Attached to this cover sheet is a copy of a letter dated March 25, 2011 that was mailed to the City Manager and copies of e-mails dated July 16, 2010 and April 6, 2011 regarding the issue. Please refer to the Agenda Summary Report prepared by the City. FISCAL IMPACT NA RECOMMENDED ACTION NA ATTACHMENTS 1. Copy of letter mailed to the City Manager and dated March 22, 2011. 2. Copy of e-mail dated July 16, 2010 from Melody Harris to UVSD 3. Copy of e-mail dated April 6, 2011 from Dan Berry (GSRMA) to Teri Scholle (Alliant) Rick Kennedy, PE UVSD District Manager/Engine r/ Clerk RICK KENNEDY District Man ages/Engineer/Clerk March 25, 2011 Jane Chambers City Manager Citv of Ukiah 300 Seminary Avenue Ukiah, CA 95482 UKIAH VALLEY SANITATION DISTRICT 387 North State Street, Suite 101 Uldah, California 95482 TELEPHONE AN[) FAX: (707) 462-4429 EMAIL. AIDDRE•SS:I?KIAHVAI.I.EYSD(0)A7T.NE•T Re: Liability Insurance Coverage Dear Ms. Chambers: WEB SITE. ukial valleysd.com. You have requested that the liability insurance coverage obtained by the District through Golden State Risk Management Authority (GSRMA) be agendized for discussion at the April 14d, joint meeting between the City Council and the Board of Directors. You have characterized the recent acquisition of the insurance coverage as "changes" made by the District. I am not exactly sure what you mean by "changes" but I will assume it has to do with the phone call I received from your Risk Manager. The District's acquisition of liability insurance coverage does not change the provisions of Section 2 of the 1995 Participation Agreement; the District did not cancel liability insurance coverage provided under the SLIP Program that is offered by Allied World National Insurance Company and obtained by the City. The District has the right to obtain adequate insurance coverage if it believes that the insurance coverage provided by the City pursuant to said Section 2 is not adequate for the District and, in fact, the City's Risk Manager advised the District on July 16, 2011, that it must provide liability insurance coverage for city engineering staff when these employees are performing work on behalf of the District. Through my efforts, it was discovered that the SLIP insurance coverage did not insure city employed engineers while working on behalf of the District. To immediately address the issue, the District Board designated its District Manager as the District Engineer; however, should the Board elect to designate the City Engineer as the District Engineer, the City Engineer will be covered by the insurance provided by GSRMA as long as the designation,is made by a resolution of the Board. GSRMA was provided a copy of the Participation Agreement with the amendments and I told Don Berry with GSRMA that the City may want to retain the coverage with Allied World. BOARD OF DIRECTORS KENT PORTER JAMES RONCO THERESA MCNL:RIIN DIRECTOR CHAIR VICE-CHAIR KENNFFH MARSHALL MICHAEL. PALLESEN DIRECTOR DIRECTOR Jane Chwnbers Page 2 of 2 March 25, 2011 GSRMA has informed us that the SLIP Program was created to insure small agencies at reasonable premiums; however., the coverage is very limited and has gaps as discussed above. As a result of the District becoming an Independent District (elected Board), the District has access to a pooled insurance group that has excellent coverage. The insurance program requires that all of the agency's insurance needs are obtained through the pooled group. In concluding, I don't see hove the District's coverage with GSRMA precludes the City from keeping the insurance coverage with Allied if it so desires; it would remain as "primary insurance". Sincerely, ick Kenne /y- District Manager/ Engineer/ Cle Cc: James Ronco, UVSD Chair Ross Walker, UVSD Cour sel Enclosure Ukiah Valley Sanitation District r ~~~111111~IIle ~ II MIrI~r~Fi~r~~lq ~I~1~~1~1~~ ■~Iil~lll ■ilrlrl~.lla..Yr From: Melody Harris [mharris@cityofukiah.com) Sent: Friday, July 16, 2010 1:44 PM To: Ukiah Valley Sanitation District Cc: Cliff Paulin; Ross Walker; Jane Chambers; Tim Eriksen Subject: RE: Professional Liability Coverag for City Engineer Rick, I have consulted with Sheryl Fitzgerald, SLIP Account Manager at Alliant, and with Jeff Davis at REMIF in regards to liability coverage of the City Engineer (or any Engineer) while performing professional duties on behalf of UVSD. Engineers are excluded from coverage in the Alliant SLIP. policy, and REMIF only covers the City Engineer while performing his duties in the normal course of business on behalf of the City. Therefore, it is important that the District obtain coverage for work performed for the District by the City Engineer, in accordance with Paragraph 2 in the Participation Agreement between the UVSD and the City. It is my understanding that you have already requested a quote for adding this coverage, and Sheryl Fitzgerald has confirmed she is in process of putting that together for you. She indicated this will require a separate policy, it cannot be added to the SLIP policy. Thank you for bringing this matter to our attention, and please let me know if I can be of any further assistance. %efodyYfan s Director, Human Resources & Risk Management City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 PH: 707-463-6244 FX: 707-463-6204 m harris(@cityofukiah. com From: Ukiah Valley Sanitation District fmaiito:ukiahvalleysd.(att.hetl Sent: Thursday, July 01, 2010 11:03 AM To: Melody Harris Cc: Cliff Paulin; Ross Walker; Jane Chambers; Tim Eriksen Subject: Professional Liability Coverag for City Engineer Melody, Good morning. For some time now the UVSD Board's Standing Planning and Technical Committee has been looking at the pros and cons of designating someone other than the City Engineer as the District Engineer. One of their concerns pertain to professional liability and whether or not the District would be insured under the current SLIP policy. As directed by the committee, I contacted Alliant insurance (broker) to inquire about the coverage and if the coverage would still apply if the District Engineer was someone other than the City Engineer. I was told that District had its own separate policy and that the current coverage does not include professional liability for Engineering decisions made by the District Engineer (whether it be the City Engineer or someone else) on behalf of the District. However, there is "consultation" coverage which is general advise where suggestions are made (versus engineering decision making such as plan checking engineering plans, design work etc). So this means, that the District is not covered if the City Engineer as the District Engineer makes engineering decisions on behalf of the District. Aliiant advised me to verify with the City if the City carried a separate liability policy that covered the District when the City Engineer made engineering decisions on behalf of the District. Does the City have such coverage?? As back up, I have asked Ailiant to provide me a quote for professional liability coverage for the District Engineer. Thank you in advance for your attention to this issue. Rick K PS. I have copied the Committee Chair and Ross Walker who was initially involved in the review of the policy and of course Jane and Tim. Ukiah Valley Sanitation District From: Dan Berry [dberry@gsrma.org] Sent: Wednesday, April 06, 2011 10:24 AM To: Teri Scholle Cc: Ukiah Valley Sanitation District Subject: FW: Quarterly Joint Meeting of 7/14 Attachments: 1 JointCouncil-UVSD Agenda draft.pdf; ASR 4-14-11 UVSD A Mtg SLIP Policy.pdf Hi Teri, Per our conversation yesterday, see the second attachment regarding the conclusions drawn by the City of Ukiah staff. Can you please review and we can discuss this? Thank.you, Dan Berry, Member Services Director Golden State Risk Management Authority From: Ukiah Valley Sanitation District jmaiIto: ukiahvalleysdCaatt.netl Sent: Monday, April 04, 2011 10:04 AM To: Dan Berry Cc: Jim Ronco; Ross Walker Subject: FW: Quarterly Joint Meeting of 7/14 Good morning Dan, The City of Ukiah is making an issue of the liability insurance policy we recently procured from GSRMA. Please refer to the attached staff report for a joint session of the Board of Directors and the City Council. Of concern to staff, are the provisions of the "Other Coverage" clauses. If the claimed problem of both policies being considered excess is true, wouldn't the elimination of the City as "additional insured" on our policy resolve the "excess coverage" problem? We initially pursued liability coverage for engineering decisions made on the District's behalf. In the meantime a District employee has been designated as the District Engineer. The removal of the City as additional insured would not affect the liability coverage for Engineering decisions so long as the City is precluded from making such decisions. You mentioned the other day that you were willing to meet with the Board to talk about the coverage provided under our GSRMA policy and the short comings of the coverage provided under SLIP. Is this still open; may I tell the Board you are willing to discuss this with them? Thanks Dan. Rick K From: Linda Brown jmaiIto: Ibrown Ocityofukiah.coml Sent: Monday, April 04, 20118:23 AM To: ukiahvalleysd@att.net Cc: Jane Chambers Subject: Quarterly Joint Meeting of 7/14 Hi Rick, Jane asked me to send you copy of the attached draft agenda and Agenda Summary Report for item 4. Jane is preparing a short ASR for #5 and #8 that she has in the works and that she plans to send to you later today. There will not be a written report for item #6. Thanks, Linda ITEM NO.: MEETING DATE: City of uki4a i- AGENDA SUMMARY REPORT April 14, 2011 SUBJECT: REPORT ON UKIAH VALLEY SANITATION DISTRICT GENERAL LIABILITY & PROPERTY INSURANCE POLICIES Background: The Participation Agreement between the Ukiah Valley Sanitation District and the City of Ukiah requires the City to obtain and maintain liability and property loss insurance coverage in the sum of $5,000,000 to protect the District and City against claims or losses. The City has continuously procured and maintained the required coverage through Alliant Insurance Company's Special Liability Insurance Program (SLIP). On March 8, 2011 the City's Risk Manager was notified by the District Manager that a new liability policy had been independently purchased by the District, without the benefit of coordination with City staff for the review of policy provisions/exclusions, premium costs, or compliance with the Participation Agreement. Discussion: The liability and property policy purchased by the District does not comply with the insurance requirements in Paragraph 2. of the Participation Agreement. The City obtained a copy of the District's new liability and property policy after it was purchased and reviewed it with the SLIP insurance carrier to determine if the City should maintain the existing coverage to remain in compliance with the Participation Agreement. The existing SLIP policy and the new District. policy each have "Other Coverage" clauses that place the policies in conflict with each other. In the event of a claim both the District's policy and the existing SLIP policy would be considered "in excess" to each other and would not provide primary coverage. If the City cancels the existing SLIP policy, they will be out of compliance with the Participation Agreement. If the SLIP policy is maintained by the City, it will not provide the coverage it was intended to as long as the District's liability and property policy is available. In addition, if the current SLIP policy is cancelled, the premiums paid for coverage through 9/29/11 will be "short-rated", not "pro-rated", due to the January 2011 effective date placed on the District's new policy, resulting in a loss of premiums paid from the 612 account. Fiscal Impact: Budgeted FY 10/11 F] New Appropriation Not Applicable Budget Amendment Required FI 1_X I Continued on Page 2 Recommended Action(s): Ukiah Valley. Sanitation District Board and City Council receive report regarding UVSD liability and property insurance coverage. Alternative Council Option(s): Citizens advised: Requested by: Jane Chambers, City Manager Prepared by: Melody Harris, Risk Manager, City of Ukiah Coordinated with: Jane Chambers, City Manager & David Rapport, City Attorney Attachments: 1."Other Coverage" clauses from GSRMA & SLIP Liability Policies 2.Participation Agreement - Insurance Clause Approved: Jane Chambers, City Manager Subject: Ukiah Valley Sanitation District General Liability & Property Insurance Meeting Date: April 14, 2011 Page 2of2 The City wants to clarify the facts regarding the status of the District's liability and property insurance for the UVSD Board and City Council: 1. The District's new liability and property policy was purchased independently without the benefit of City staff coordination, resulting in a conflict between the existing SLIP liability policy as described in each policy's "Other Coverage" provisions (see attached). In the event a claim is filed, as long as both policies are in effect, neither policy provides "primary" coverage, each policy is "in excess" to the other. The City is concerned about future liability, unnecessary legal expense, and confusion in the event a claim is filed. 2. The City Attorney has questioned the appropriateness of this action by the District in relation to Paragraph 2 of the Participation Agreement, which states "the City shall obtain and maintain liability and property loss insurance..." 3. The City views the District's independent purchase of the new policy as a duplicative expense to the Ukiah Valley Sanitation District, and one that does not comply with the insurance requirements in the Participation Agreement. City staff recommends the Board and Council receive this report and review Paragraph 2 of the Participation Agreement in light of the information provided.