1997 APR 28 CC PACKETAGENDA
EL SEGUNDO CITY COUNCIL
COUNCIL CHAMBERS - 350 Main Street
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SPECIAL MEETING OF THE
EL SEGUNDO CITY COUNCIL
MONDAY, APRIL 28, 1997 - 7:00 A.M.
CALL TO ORDER
PLEDGE OF ALLEGIANCE - Councilman Weston
ROLL CALL
PUBLIC COMMUNICATIONS - (Related to City Business Only - 5 minute limit per person, 30 minute limit
tOtal) Individuals who have received value of $50 or more to communicate to the City Council on behalf of another, and employees
speaking on behalf'of their employer, must so identify themselves prior to addressing the City Council. Failure to do so shall be a
misdemeanor and punishable by a fine of $250.
SPECIAL ORDERS OF BUSINESS -
1. Consideration of Water Rates and City Council's action on Water Rates at their April 15,
1997 meeting in light of new information received from the West Basin Metropolitan
Water District regarding a potential refund
Recommendation: Discussion and possible action.
PUBLIC COMMUNICATIONS - (Related to City Business Only - 5 minute limit) individuals who have
received value of $50 or more to communicate to the City Council on behalf of another, and employees speaking on behalf of their
employer, must so identify themselves prior to addressing the City Council. Failure to do so shall be a misdemeanor and punishable by a
fine of $250.
ADJOURNMENT
POSTED:
DATE:
TIME:
NAME:
2
EL SEGUNDO CITY COUNCIL MEETING DATE: April 28, 1997
AGENDA ITEM STATEMENT AGENDA HEADING: Special Orders of Business
AGE DA DESCRIPTION.
Consideration of Water Rates and City Council's action on Water Rates at their April 15, 1997 meeting in
light of new information received from the West Basin Municipal Water District regarding a potential refund
(fiscal impact - $764,606).
RECOMMENDED COUNCIL ACTION:
1. Hear staff presentation.
2. Discussion.
3. Take appropriate action.
INTRODUCTION AND BACKGROUND:
On April 15, 1997 the City Council initiated the process for the possible increase of City water rates by
4.5 %. Since then, the City has been notified that the West Basin Municipal Water District is considering
an action which could result in the City receiving an unexpected $764,606 of over collected MWD charges
for FY 95/96.
DISCUSSION:
In the short time staff has had to consider the impact of receipt of this revenue, three (3) possible actions
have been identified:
Rescind the previously proposed 4.5% and utilize the new funds to meet projected revenue
shortfalls.
(continued on next page.....)
ATTACHED SUPPORTING DOCUMENTS:
Water Fund forecast sheets.
FISCAL IMPACT.
Operating Budget: N/A
Capital Improvement Budget:
Amount Requested:
Project/Account Budget:
Project/Account Balance: Date:
Account Number.
Project Phase:
Appropriation Required:
i1NATED: Date: 7
rd Sc o Director of Pub is Works
EWE Date:
VU ana er
ON T EN:
Page 1 of 2
PW- APR28.SOB
DISCUSSION: (continued)
Discussion: The $764,606 will cover the anticipated revenue shortfalls for approximately 18
months. Based on that information, staff anticipates that the question of water rate increases would
be back before the Council during budget discussions next year. At the present time, we foresee
the requested rate increase to be approximately 2.5% in 1998 and an additional 2.5% in 1999.
2. Continue with the proposed 4.5% water rate increase and apply the $764,606 to the Water
Fund Reserves.
Discussion: At the present time, the projected Water Fund Reserves at the end of FY 1996/97
is $1,575,766. With the addition of the returned funds, the new Water Rate Reserve balance at
the end of the fiscal year would be expected to be $2,340,372. Placing the funds in reserve
increases the City's ability to deal with future issues as they arise.
Continue with the proposed 4.5% water rate increase and designate the $764,606 to fund
additional Capital Replacement projects.
Discussion: This last year the City experienced a water main break on Nash Street south of
Imperial Highway. The break was completely unexpected because of the age of the main (installed
in 1950) and the fact that we had no history of problems in this part of the City. The investigation
into the cause of the break identified graphitic corrosion as the problem. The graphitic corrosion
is produced when case iron pipe is set in a clay environment. Staff has determined that there is
approximately 1.4 miles of pipe in the area of the break which is subject to the same corrosion.
The only way to prevent future failures is to replace the water mains. The estimated cost of
replacing all the lines is $865,650. If the Council selects this action, it is anticipated that the
replacement be added to the previously proposed replacement program over the next two (2) years.
Water Fund forecast sheets have been prepared for each of the actions identified and are attached. Staff
is available to answer any questions.
Page 2 of 2
PW- APR28.SOB
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