RPVCCA_CC_SR_2013_07_16_01_Water_Quality_&_Flood_Protection_Program_Annual_User_Fee_RateCITY OF
PUBLIC HEARING
Date: July 16, 2013
Subject: Water Quality and Flood Protection Program-Annual User Fee
Rate -FY13-14
Subject Property: Citywide
1. Declare the Hearing Open: Mayor Brooks
2. Report of Notice Given: City Clerk Morreale
3. Staff Report & Recommendation: Ron Dragoo, Senior Engineer
Andy Winje, Associate Engineer
4. Public Testimony:
Appellants: N/A
Applicant: NIA
5. Council Questions:
6. Rebuttal:
7. Declare Hearing Closed: Mayor Brooks
8. Council Deliberation:
9. Council Action:
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CITY OF
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
~ES JONES, INTERIM DIRECTOR OF PUBLIC WOR~
() DENNIS McLEAN, DIRECTOR OF FINANCE AND INFORMATIONa
TECHNOLOGY · ~
JULY 16, 2013
PUBLIC HEARING -WATER QUALITY AND FLOOD
PROTECTION PROGRAM -ANNUAL USER FEE RATE -FY13-
14 (Supports 2013 City Council Goal for Public Infrastructure)
CAROLYN LEHR, CITY MANAGER c9-
Staff Coordinators: Ron Dragoo, PE, Senior Engineer
Andy Winje, PE, Associate Engineer
RECOMMENDATION
1) Receive, review and file the independent 2013 Annual Report on the Water Quality and
Flood Protection Program prepared by the Oversight Committee for the storm drain
program, dated May 29, 2013;
2) Conduct a public hearing pursuant to Health and Safety Code Section 5473.2 and
Section 3.44.40 of the Rancho Palos Verdes Municipal Code on July 16, 2013 on the
Annual Report prepared by Harris & Associates, the Annual Report prepared by the
Oversight Committee and information provided by Staff, and determine whether to
collect the Storm Drain User Fee (the "Fee") for FY13-14, and if so, the rate per
Equivalent Residential Unit ("ERU") for FY13-14;
3) At the conclusion of the Public Hearing determine the existence or absence of a
majority protest; ·
4) In the absence of a majority protest, Staff recommends that the Council determine that
the rate per ERU for FY13-14 shall be $96.27 as set forth in the Annual Report, adopt
the attached Resolution No. 2013 -_;A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF RANCHO PALOS VERDES FINALLY ADOPTING A REPORT, AS
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FILED, IN CONNECTION WITH THE STORM DRAIN USER FEE ESTABLISHED
PURSUANT TO CHAPTER 3.44 OF THE RANCHO PALOS VERDES MUNICIPAL
CODE; DETERMINING THE AMOUNT OF SUCH FEE FOR FY13-14; AND
ORDERING THAT SUCH FEE BE COLLECTED ON THE COUNTY OF LOS
ANGELES TAX ROLL FOR FY13-14; and
5) In the event of a majority protest, direct Staff to present to City Council at a subsequent
meeting a resolution determining the amount of the Storm Drain User Fee for FY13-14
and providing for an alternative method of collecting the Storm Drain User Fee for
FY13-14.
EXECUTIVE SUMMARY
Staff has timely published public notices for this Public Hearing in the Palos Verdes
Peninsula News on June 27, 2013 and July 4, 2013. During the Public Hearing, the City
Council shall make a decision whether to collect the User Fee for FY13-14. Prior to this
Public Hearing, Staff updated the Oversight Committee for the Water Quality and Flood
Protection (storm drain) Program on April 24, 2013 and May 29, 2013 (see staff report
included as Attachment B to the Oversight Committee's Annual Report), including the
status of storm drain capital projects, storm drain lining projects, catch basin filtration
devices and other expenses for the program. At a public hearing conducted by the
Oversight Committee on May 29, 2013, Staff presented to the Committee the proposed
project plan and budget for the Storm Drain program for FY13-14, excerpts from the 2013
Five-Year Financial Model, the 2013 Five-Year Capital Improvement Plan, as well as the 5-
Year Storm Drain Plan. During the public hearing, staff presented its recommendation to
increase the User Fee by 4% from $92.53/ERU to $96.27, the maximum increase allowed.
Upon concluding the public hearing, the Committee members who were present
unanimously (4-0 vote) recommended to increase the Fee to $96.27, the maximum
allowable by the City's Municipal Code, based upon the law enacted by vote of the property
owners. (Committee Member Lyon was unable to attend the meeting due to a family
emergency.)
At a public hearing conducted last year on July 17, 2012, the City Council unanimously
decided to set the Fee at $92.53/ERU for FY12-13, the same Fee as FY11-12,
notwithstanding the fact that the maximum fee for FY12-13 was $94.38. Again, the
maximum fee for FY13-14 increased 2% to $96.27.
If the Council elects to collect the Fee during FY13-14, it must decide whether to:
>-Follow the recommendation of the Oversight Committee and Staff to increase the
User Fee to the maximum rate: $96.27/ERU; or
>-Maintain the current Fee rate at $92.53/ERU; or
>-Set the Fee rate at some other amount not to exceed $96.27; or
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If the Council elects to not collect the Fee during FY13-14, it must decide whether to:
>--Reduce the Fee to zero for FY13-14; or
>--Repeal Chapter 3.44 (the User Fee Ordinance).
Prior to completion of this report, two residents (one attached email and one oral comment
during the Public Hearing conducted by the Oversight Committee), raised a concern that
the Fee could only be increased by 2% more than the Fee set for the previous year. The
methodology for setting the Fee, as enacted by a vote of the property owners, includes a
provision to increase the maximum Fee in accordance with the annual CPI increase, but
not to exceed 2%. As an example to demonstrate the maximum Fee rate methodolgy: the
City Council could have set the Fee rate at $1 /ERU for FY12-13, and then set the Fee at a
rate of $96.27 for FY13-14 (the maximum Fee rate allowed for FY13-14).
The City Council's decision should be based upon Staff's recommendation, the
recommendation from the Oversight Committee, its own review of the Fee rate, as well as
Staff's estimates of other revenue and current and projected expenditures (including the
Storm Drain program), the current and projected General Fund Reserve and the fund
balance in the WQFP enterprise fund.
Staff's Finding and Recommendation
After the User Fee sunsets in 2016, there will be no dedicated funding source for
maintenance and repair of storm drains. The Storm Drain program will compete with other
projects and services for General Fund money, which currently has a structurally balanced
budget. In addition, other infrastructure projects remain unfunded. The attached staff
report that was presented to the Oversight Committee at its public hearing, dated May 29,
2013, includes additional information regarding the City's fiscal position, San Ramon
funding, other infrastructure future planning issues and the sunset of the Fee in 2016.
Subsequent to the Public Hearing conducted by the Oversight Committee, the staff report
presented to the City Council regarding the 2013 Five-Year Financial Model (approved on
June 18, 2013), included the following information about future CIP funding, including
storm drains:
"The City's Capital Improvement Projects (CIP) Reserve established by the City
Council to provide for infrastructure replacement and rehabilitation is primarily
funded with annual transfers from the General Fund equivalent to transient
occupancy tax (TOT) revenue (about $3. 7 million annually). Staff currently
recommends funding $21. 7 million of infrastructure projects over the next five years
from the CIP Reserve. Although it is a good start, the CIP Reserve is not sufficient
to finance all of the City's infrastructure needs as demonstrated by the following.
• On the City's books, infrastructure is carried at its historical cost of $157.5 million,
less $73.2 million of depreciation. About one-quarter of the infrastructure cost was
estimated at its 1973 value, when the City was incorporated and assets were
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PROGRAM -ANNUAL USER FEE RATE-FY13-14
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transferred from the County. Most of the infrastructure has an estimated useful life
ranging from 30 to 50 years. We can roughly estimate the hypothetical
replacement cost of this infrastructure with a simple calculation. If the increase of
the Consumer Price Index (CPI) is applied to the historical cost of the assets
(average of 3.35% annually since 1973), then today's estimated replacement cost
is about $331 million. If this estimated replacement cost in nominal dollars is
evenly distributed over a 50 year period, the rate of infrastructure replacement
spending would be about $6.6 million per year (or about 180% of the City's annual
transit occupancy tax revenue). The actual replacement cost of the City's
infrastructure assets may be greater or less than this hypothetical estimate. This
hypothetical estimate does not provide for any enhancements of infrastructure,
only the replacement of existing infrastructure.
• The draft 2013 Five-Year Capital Improvement Plan includes a list of projects that
have been identified and quantified by the City's engineering staff, yet funding has
not been identified. Some of these projects address both safety issues and City
Council goals, which have a total estimated cost starting at $31.9 million. The list
does not include new construction or refurbishment of City Hall.
• The storm drain fee that provides about $1.3 million annually towards on-going
repairs, maintenance and improvements of storm drains sunsets in 2016. Another
funding source will be needed to backfill ongoing repairs and maintenance
beginning in FY17-18. Unfunded CIP Projects include more than $14 million of
known, unfunded storm drain projects. None of the unfunded storm drain
projects are expected to be performed prior to the sunset of the Fee in 2016.
Public Works and Finance Staff are working together to develop an Infrastructure
Management Plan (IMP) to address the long-term capital needs of the City. As
noted in previous reports to both the Finance Advisory Committee (FAC) and the City
Council, the City's infrastructure is aged; and due to budgetary constraints, the City
has been cautious when budgeting for capital spending over the years. Staff
expects that the IMP will provide a roadmap for future systematic replacement,
refurbishment, and financing of City infrastructure."
In light of the significance of the multi-million dollar amount of unfunded CIP projects and
the City's Reserve Policy to set-aside funds to help pay for a portion of the future projects,
Staff recommends an increase of the Fee from $92.53/ERU to $96.27forthe FY13-14, an
increase of 2% (for each of the two years since the last increase was approved), as
authorized under Chapter 3.44 of the Municipal Code.
BACKGROUND AND DISCUSSION
Overview of Scope and Purpose for the Oversight Committee
A revised Scope and Purpose was approved by the City Council on May 5, 2009, to be
effective with the 2009 Fee Review process. The process was outlined in the Resolution as
follows:
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As described in Section 3.44.080 A., "The committee shall hold at least one public
hearing and issue a report, on at least an annual basis, to inform city residents and
the City Council regarding how storm drain user fee revenues are being spent and to
make recommendations to the city council regarding future expenditures of the storm
drain user fee revenues." Staff expects to use maps, pictures, video and financial
information regarding the storm drain program to assist the Oversight Committee's
understanding.
The Committee's review will include the following information provided by Staff:
~ a comparison of budget v. actual accounting for the current fiscal year;
~ a construction project status report, including information about expenditures to date
and major contract status (i.e. design and construction contracts);
~ the 'proposed budget (including major projects) for the forthcoming year;
~ an excerpt of the Five-Year Financial Model for the storm drain program, including
the estimated ending balance, if any, in the Water Quality and Flood Protection fund;
~ an excerpt of the Five-Year Financial Model regarding the projected revenues of the
General Fund of the City for the current and forthcoming fiscal years, including but
not limited to, property taxes, sales taxes and transient occupancy taxes; the
projected expenditures of the General Fund of the City for the current and
forthcoming fiscal years; and the estimated ending General Fund reserves for the
current and forthcoming fiscal years; and
~ Staff's recommendation regarding the User Fee rate for the forthcoming year.
Staff believes that its presentations to the Oversight Committee made on April 24, 2013
and May 29, 2013 satisfied the provisions of Municipal Code section 3.44.080 that outlines
the information to be annually reviewed by the Oversight Committee.
Passage of Measure C -November 6, 2007
On November 6, 2007, the voters approved an amendment to the User Fee ordinance to
include a voter-enacted Oversight Committee and a 10-year sunset of the storm drain user
fee. When the User Fee rate was established by the property owners in 2005, the total
User Fees to be collected over 30 years was estimated to be about $50 million to pay for
known construction projects, storm drain lining, maintenance, staffing and engineering.
Based upon the 10-year sunset established with the passage of Measure C, the maximum
total User Fees that could be collected is estimated to be about $13 million. It appears as
though it will be necessary to secure other funding sources to continue the Storm Drain
program when the User Fee expires on June 30, 2016.
Methodology for Determining Maximum User Fee Rate and User Fee Rate History
The property owners who use the City's storm drain system voted to establish the Fee in
2005 at a rate of $86 per ERU. The ballot measure was incorporated into the City's
Municipal Code and includes a provision to increase the Fee annually based upon the
Consumer Price Index ("CPI") for all Urban Consumers for the Los Angeles, Riverside and
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Orange County areas, including all items as published by the U.S. Bureau of Labor
Statistics, as of March 1 of each year, but not to exceed a maximum increase of two
percent per year.
The ballot measure, as incorporated into the Municipal Code, provides that without a vote
of the property owners, in any year, the City Council may do any and all of the following: (i)
repeal this Chapter 3.44; (ii) reduce the rate per ERU for the Fee below the maximum rate;
or (iii) increase the rate per ERU for the Fee up to or below the maximum rate if it has been
previously set below such rate. In no event shall the City Council increase the storm drain
user rate per ERU in excess of the maximum rate without approval by a majority vote of the
property owners subject to the Fee. The Oversight Committee could recommend any of
the three alternatives described in (i) through (iii) described in the preceding paragraph.to
the City Council.
The methodology for setting the Fee, as enacted by a vote of the property owners, includes
a provision to increase the rate per ERU for the Fee, up to the maximum rate that is
allowed in accordance with the annual CPI increase, but not to exceed 2% per year.
Thus, pursuant to subpart iii, if the Fee was not increased up to the maximum amount
during a given year, the City Council may increase the Fee in a subsequent year and
include the amount of the Fee increase that did not occur previously, up to the Maximum
rate per ERU.
ATTACHMENTS
RESOLUTION NO. 2013-__ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO PALOS VERDES FINALLY ADOPTING A REPORT, AS FILED, IN CONNECTION
WITH THE STORM DRAIN USER FEE ESTABLISHED PURSUANT TO CHAPTER 3.44 OF
THE RANCHO PALOS VERDES MUNICIPAL CODE; DETERMINING THE AMOUNT OF
SUCH FEE FOR FISCAL YEAR 13-14; AND ORDERING THAT SUCH FEE BE COLLECTED
ON THE COUNTY OF LOS ANGELES TAX ROLL FOR FISCAL YEAR 13-14
2013 Annual Report of the Water Quality and Flood Protection Program, dated May 29,
2013, prepared by the Oversight Committee for the storm drain program (with staff
report, dated May 29, 2013, an attachment to it)
Annual Report for the Storm Drain User Fee -FY13-14, prepared by Harris &
Associates
Correspondences from the public
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RESOLUTION NO. 2013-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO
PALOS VERDES FINALLY ADOPTING A REPORT, AS FILED, IN
CONNECTION WITH THE STORM DRAIN USER FEE ESTABLISHED
PURSUANT TO CHAPTER 3.44 OF THE RANCHO PALOS VERDES
MUNICIPAL CODE; DETERMINING THE AMOUNT OF SUCH FEE FOR
FISCAL YEAR 2013-14; AND ORDERING THAT SUCH FEE BE
COLLECTED ON THE COUNTY OF LOS ANGELES TAX ROLL FOR
FISCAL YEAR 2013-14
THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES HEREBY
FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:
Section 1. The City Council finds:
A. Pursuant to Ordinance No. 418 of the City Council of the City of
Rancho Palos Verdes (the "City Council"), adopted on August 16, 2005, and Chapter
3.44 of the Rancho Palos Verdes Municipal Code (the "Municipal Code"), the City
Council is authorized to levy an annual Storm Drain User Fee on each parcel of real
property in the City of Rancho Palos Verdes (the "City") that drains into City-maintained
storm drain infrastructure. The Storm Drain User Fee is levied to fund the City's Water
Quality and Flood Protection Program.
B. Pursuant to Section 5473 of the California Health and Safety Code,
the City elected in Ordinance No. 418 to have the Storm Drain User Fee collected for
each fiscal year on the County of Los Angeles tax roll in the same manner, by the same
person, and at the same time as, together with, and not separately from the general
taxes of the City.
C. A written report (the "Report") entitled, "Annual Report for the Storm
Drain User Fee, FY 2013-14" has been prepared by Harris & Associates and has been
filed with the City Clerk. The Report contains a description of each parcel of real
property in the City that drains into the City's storm drain system and the proposed
amount of the Storm Drain User Fee for each such parcel for Fiscal Year 2013-14
(commencing July 1, 2013 and ending June 30, 2014), computed in conformity with
Chapter 3.44 of the Municipal Code. Such Report is on file in the office of the City Clerk
and incorporated herein by reference.
D. The City Clerk caused notice of a hearing on the Report to be
published in the Palos Verdes Peninsula News on June 27, 2013 and July 4, 2013.
E. The City Council held a public hearing on the Report on July 16,
2013 (the "Public Hearing"). In addition, pursuant to Section 3.44.40 of the Municipal
Code, at the Public Hearing the City Council considered whether to collect the Storm
Drain User Fee for Fiscal Year 2013-14, and the rate per Equivalent Residential Unit
("ERU") for Fiscal Year 2013-14. In that regard, the City Council took into account the
current and projected revenues of the City for Fiscal Year 2013-14, including but not
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limited to, property taxes, sales taxes and transient occupancy taxes; the current and
projected expenditures of the City for Fiscal Year 2013-14, including, but not limited to,
proposed expenditures in connection with the City's storm drain system; the balance, if
any, in the Water Quality and Flood Protection Program Enterprise Fund; and the
current and projected General Fund reserves. In addition, the City Council took into
account any report and recommendation submitted by the Oversight Committee
established by the City Council in connection with the City's Water Quality and Flood
Protection Program.
F. All interested persons were given an opportunity to attend the
Public Hearing and express opinions about the Report and the proposed levy of the
Storm Drain User Fee for Fiscal Year 2013-14. The City Council heard and considered
all protests and objections against the Report and all testimony regarding the proposed
levy of the Storm Drain User Fee for Fiscal Year 2013-14.
G. No majority protest against the Report, determined in accordance
with Health and Safety Code Section 5473.2, exists.
Section 2. The City Council hereby overrules all protests and objections;
hereby approves and finally adopts the Report as filed; hereby determines that the
Storm Drain User Fee for Fiscal Year 2013-14 against each parcel described in the
Report shall be as described in the Report; and orders that the Storm Drain User Fee
shall be collected for Fiscal Year 2013-14 on the County of Los Angeles tax roll in the
same manner, by the same person, and at the same time as, together with, and not
separately from the general taxes of the City.
Section 3. The City Clerk is directed to file a copy of the Report, with a
statement endorsed on the Report over the City Clerk's signature that the Report has
been approved and finally adopted by the City Council, with the City Treasurer on or
before August 10, 2012 pursuant to Section 4 of Ordinance No. 418.
Section 4. The City Clerk is directed to file a copy of the Report, with a
statement endorsed on the Report over the City Clerk's signature that the Report has
been approved and finally adopted by the City Council, with the Auditor of the County of
Los Angeles on or before August 10, 2013 pursuant to Section 5 of Ordinance No. 418.
PASSED, APPROVED and ADOPTED this 15th day of July, 2013.
Mayor
ATTEST:
City Clerk
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State of California )
County of Los Angeles ) ss
City of Rancho Palos Verdes )
I, CARLA MORREALE, City Clerk of the City of Rancho Palos Verdes, hereby certify
that the above Resolution No. 2013-was duly and regularly passed and adopted
by the said City Council at a regular meeting thereof held on July 16, 2013.
City Clerk
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2013 ANNUAL REPORT ON THE WATER QUALITY
AND FLOOD PROTECTION PROGRAM
May 29, 2013
INTRODUCTION
About ten years ago elected officials, City Staff and the public became increasingly aware that there
was serious deterioration of underground storm drain infrastructure. A series of very serious events
heightened this concern, including major flooding in the Mccarrell Canyon watershed, storm drain
collapse under Western A venue, and a number of sinkholes in neighborhoods and under streets. This
led to adoption of a voter proposition establishing the User Fee. The voter proposition established this
Oversight Committee, whose duties were elaborated by the Rancho Palos Verdes City Council in
2007, to annually review project expenditures and plans for the Water Quality and Flood Protection
(WQFP) Program and to recommend a User Fee Rate for each fiscal year. The Committee currently
consists of the following members:
Lowell Wedemeyer (Chair)
Elizabeth Sala (Vice Chair)
Krista Johnson
Yi Hwa Kim
Frank Lyon
The Committee met twice with the City's Finance and Information Technology and Public Works
staffs in April and May to review WQFP Program activities in FY 12-13, planned projects and
proposed budgeted expenditures in FY 13-14. Staff also provided the Committee with the proposed
Storm Drain Plan through FY 17-18, excerpts from the City's 2013 Five-Year Financial Model, the
2013 Capital Improvement Plan (CIP), and Staffs recommendation for the FY 13-14 User Fee Rate.
This report conveys the Committee's conclusions and recommendations in accordance with its
responsibilities designated by the City Council on May 5, 2009 and documented in RPV Municipal
Code Section 3.44.080.
FY 12-13 EXPENDITURES
The WQFP Program expenditure plan (i.e. budget) approved by the City Council for FY 12-13 totaled
$22.1 million. Based upon the staff report dated April 24, 2013, $18.1 million had been spent or
committed through June 30, 2013. Fiscal year expenditures are summarized by the Staff in the Storm
Drain Plan through FY 17-18 (Attachment A).
Major projects for FY 12-13 are described in the PROGRAM HIGHLIGHTS -PROJECTS
INCLUDED IN FY12-13 BUGET section, pages 1 -7, of the April 24, 2013 Staff report entitled
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY 13-14 BUDGET AND 5-YEAR PLAN.
Oversight Committee 2013 Annual Report, April 29, 2013 Page 1 of5
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Staff estimates that there will be carryover from the Fiscal Year 12-13 budget to the Fiscal Year 13-14
budget in the approximate amount of $4 million. Based upon Staff reports to the Committee this
variance between the $22.1million12-13 budget and the estimated 12-13 expenditures of about $18.l
million, is primarily attributable to the following projects (in order of the size of the variance):
1) The carryover is estimated to be $1.48 million on the San Ramon Canyon Stabilization
Project from fiscal year 12-13 to FY 13-14. After many years of effort by the current and past
Councils, a financing plan has been adopted by the City Council, including 50/50 cost sharing under a
grant administered by the California Department of Water Resources. Principal contracts were
awarded early in 2013. Groundbreaking occurred on April 16, 2013. The duration of construction on
the San Ramon Canyon project is planned for at least two fiscal years, FY 12-13 and FY 13-14, with a
planned completion date of April 2014. The $1.48 million carryover from FY 12-13 to FY 13-14 thus
is within the San Ramon project's planned scheduling.
2) T.he estimated carryover from FY12-13 to FY 13-14 on the update of the Drainage Master
Plan, which is a portion of budgetary project area 12, will be $727,789. Of that amount, $697,789 is
being carried over for a second year from FY 11-12. This is because the Drainage Master Plan
Program is intended to be integrated into the City's Geographic Information System ("GIS"), subject
to future development. The City's Geographic Information System is beyond the purview of the
WQFP Committee. The Committee concurs that it is prudent to upgrade the Geographic Information
System before further integration of the Drainage Master Plan into that system. Staff intends to bring a
contract award recommendation forward to City Council on June 18, 2013. Staff has advised the
Committee that the contract value to perform the storm drain master plan work is about $538,000. The
consultant will be required to provide data that is compatible with the City's GIS system.
3) The estimated carryover from current FY 12-13 to FY 13-14 will be $485,000 for the PVDE
Lower Switchbacks, listed for FY 12-13 budgetary purposes as project area 9. These lower
switchbacks are on the southern part of Palos Verdes Drive East, adjacent to the approximately
$19,000,000 San Ramon Canyon project, which now is under construction. Some of this work on the
switchbacks will be done as part of the San Ramon Canyon project, and the remainder of the PVDE
Lower Switchbacks project is being deferred pending the San Ramon Canyon work.
4) The carryover on the Storm Drain/Filtration Maintenance, a portion of project area 12, is
estimated to be $442,353. Of this amount $274,556 was also carried over from last year, FY 11-12.
These carryovers are due to lower than expected storm costs during the last two relatively dry years.
Staff reported that the carryover is expected to be used for near-term, urgent expenditures in FY 13-14.
5) The estimated carryover from current FY 12-13 to next FY 13-14 will be $310, 126, for the
PVDE San Pedro Canyon project (referred to for budgeting purposes as a portion of planning area 6).
As previously reported to the Council in June 2012, the Staff decided in May 2011 to re-scope the
PVDE San Pedro Canyon project during fiscal year 11-12 to achieve savings. Accordingly, during
fiscal year 11-12 this budget item was divided into two separate design projects: Miraleste Plaza
Storm Drain Improvement Project (then referred to as a part of project area 6) and Via Colinita
Improvements Project (then referred to as a part of project area 7).
The Miraleste Plaza sub-project was completed in this fiscal year 12-13. The Via Colinita
System sub-project remains on hold and there will be an estimated carryover to fiscal year 13-14 of
$242,500. Staff reported the reasons for this hold as follows:
Oversight Committee 2013 Annual Report, April 29, 2013 Page 2 of5
1-12
Investigation done on the Via Colinita sub-project during FY 12-13 identified additional
deficiencies in the capacity of receiving storm drains downstream from Via Colinita and other
portions of the PVDE San Pedro Canyon drainage. Staff reports that the Council's highest
priority project, San Ramon, has required most of the Staffs attention, leaving insufficient
Staff resources to address Via Colinita in FY 12-13. The Committee notes that determination
of City staffing is beyond the Committee's purview. Staff advised that it has commenced
investigation of structural deficiencies in the pipes in this drainage area. A review of the
capacity deficiencies will be included in the next master plan review because drainage
characteristics have likely been affected by improvements made to pipes (lining) and to the
Miraleste Plaza system.
6) The estimated carryover to FY 13-14 will be $242,500 on the Roan project, now referred to
for FY 12-13 budgetary purposes as a portion of project area 7. The Via Colinita and Roan projects
were referred to in earlier years as a combination of projects 6 and 7. The Committee is referring to
these projec;:ts by their location names, Via Colinita and Roan, to minimize confusion over shifting
project numbering. This expected $242,500 carryover from FY 12-13 to FY 13-14 is the entire amount
that was budgeted for the Roan project for the current fiscal year, FY 12-13. The Roan project (now
referred to as a portion of project 7 for FY 12-13) also has been deferred due to prioritization of Staff
resources.
7) The carryover of the line item Storm Drain Lining, Other, for the fiscal year 12-13 budget
is estimated to be $188,437, as compared to a carryover last year of $259,795. In FY 12-13
$1,135,228 was expended on the continuing, city-wide, multi-year, storm drain lining project. The
carryover into FY 13-14 is about 14% of the annual expenditure, which the Committee has concluded
is reasonable in this on-going process.
The necessity to salvage old, failing storm drains city-wide was a major purpose for adoption of
the Storm Drain User Fee. Historic total expenditure on storm drain lining from fiscal years FY 05-06
through FY 12-13 has been $2,438,355. The Storm Drain Lining project is a continuing success.
Staff is proposing that $330,000 to $350,000 be budgeted in each of the next five fiscal years
for continuing the process of lining older storm drains. The Committee notes that the need to continue
this storm drain lining program to salvage existing capital infrastructure will continue past the June 30,
2016 sunset date on the Storm Drain User Fee.
FEE COLLECTIONS FOR FY 12-13.
User Fee collections are estimated to be about $1.2 million during fiscal year 12-13.
COMMITTEE FINDING CONCERNING USER FEE EXPENDITURES IN FY12-13.
The Committee believes that all WQFP Program costs for FY 12-13 that included User Fee
revenues have been properly spent to discover and mitigate storm drain problems in the City.
User Fees have paid for a critical minority of City investment in storm drain rehabilitation and
new construction from 2007 to date, supplementing the General Fund from which the majority
of such expenditures have been paid.
Oversight Committee 2013 Annual Report, April 29, 2013 Page 3 of5
1-13
PLANS FOR FY 13-14
Staff presented the Committee with a proposed FY 13-14 Storm Drain expenditure plan in the amount
of $1,542,689 (see Attachment A). These are newly budgeted funds, not including previously
authorized but unspent funds (which are referred to above as "carryover" funds). When combined with
the expected $3.99 million in uncommitted funds to be carried forward from FY 12-13, the total
WQFP Program expenditures in FY 13-14 are projected to be about $5.53 million plus committed, but
unspent, funds in the FY12-13 budget (i.e. San Ramon).
All planned projects appear necessary and are being funded appropriately under the present
circumstances. Chair Wedemeyer recused himself from the discussions specific to the PVDS East of
Barkentine Project.
USER FEE RATE FOR FY 13-14.
The WQFP Committee recommends that the annual Storm Drain User Fee for the FY 13-14 be
set at $96.27
Member Johnson proposed the user fee increase to $94.39. Member Johnson believes that
prioritization should be revisited to account for recent experience not available when the prioritization
was originally determined.
All four voting members agreed there are more known projects that are critical to the protection of life
and property than there is funding available, even including the maximum user fee. The Committee
believes that the cost of failure to address these critical problems is likely to be far greater than the cost
of funding and doing them now. The availability of General Fund revenues and reserves for these
problems is highly uncertain, given the enormous demands upon them. The Committee believes that
the User Fee is a reliable, dedicated source which prudence requires be used for these critical storm
drain problems. Failure to collect the User Fee will jeopardize continuation of essential storm drain
works.
OTHER COMMENTS
Revenues from the General Fund alone have not been sufficient to fund all known, critical storm drain
needs. The City has struggled to allocate the General Fund resources necessary to fund major projects
such as the completed McCarrell storm drain (approximately $9 million) and the current San Ramon
Canyon project (approximately $19 million, of which the City will ultimately pay about $9.5 million).
General Fund revenues and expenditures are within the purview of the Financial Advisory Committee,
not this Oversight Committee. However, this Oversight Committee has been informed that the
General Fund is subject to substantial uncertainties in both revenue and expenditures, even when TOT
revenue from Terranea is included in planning. The City has a huge list of unfunded capital
improvement projects (which are beyond the purview of this Committee). See Attachment B.
Taking note of the historic importance of the User Fee collections in funding critical WQFP projects,
the Committee again recommends that planning begin now for reliable funding of the City's storm
drain system beyond June 30, 2016, when the Storm Drain User Fee sunsets. The Committee
recommends that such funding be strategically developed now while there is still time to plan rather
than waiting for another crisis.
Oversight Committee 2013 Annual Report, April 29, 2013 Page 4 of5
1-14
The County of Los Angeles is planning regional water quality projects, under mandates of State and
federal law. The County is considering assessment of a parcel fee for funding such projects. Some of
those same State and federal mandates apply to the City of Rancho Palos Verdes. It is possible that
such regional projects of the County may overlap with a small fraction of the storm drain and water
quality projects that are eligible for City funding under the Rancho Palos Verdes User Fee ordinance.
The Committee suggests that the City of Rancho Palos Verdes may wish to actively participate in the
County's planning process.
The four voting members of the Committee have unanimously adopted this report with the sole
exception of the user fee rate as expressed above by member Johnson. Member Lyon participated in
early deliberations but was unable to attend the April 29, 2013 meeting at which this report was crafted
by the Committee.
Attachment.A: Storm Drain Plan through FY 17-18
Attachment B: RPV Capital Improvement Plan-Unfunded Projects
Attachment C: Program Highlights -Projects Included in FY 12-13 Budget
Attachment D: Storm Drain User Fee Rate History
Oversight Committee 2013 Annual Report, April 29, 2013 Page 5 ofS
1-15
CrrYOF
MEMORANDUM
TO:
FROM:.
DATE:
SUBJECT:
HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT
COMMITTEE FOR THE WATER QUALITY AND FLOOD
PROTECTION PROGRAM
LES JONES, INTERIM DIRECTOR OF PUBLIC WORKS
DENNIS McLEAN, DIRECTOR OF FINANCE AND
INFORMATION TECHNOLOGY
MAY 29, 2013
WATER QUALITY AND FLOOD PROTECTION PROGRAM -
PUBLIC HEARING FOR ANNUAL USER FEE RATE-FY13-14
Staff Coordinators: Ron Dragoo, PE, Senior Engineer
Andy Winje, PE, Associate Engineer
RECOMMENDATION
1) Receive, review and file the revised 5-Year Storm Drain Plan excerpts from the
working draft of both the 2013 Five-Year Financial Model ("Model") and 2013 Capital
Improvement Plan ("CIP").
2) Conduct a public hearing to consider Staffs recommendation to increase the annual
Storm Drain User Fee (the "Fee") to the maximum annual user fee rate per
Equivalent Residential Unit, a proposed increase of 4%, from $92.53/ERU to
$96.27/ERU, based upon the change in CPI for the 24 months ended February,
2013, to fund the City's Water Quality and Flood Protection Program.
3) Draft the Annual Report of the Oversight Committee to be addressed to the City
Council regarding Staffs recommendation to increase the Fee, as well as any other
findings, comments and recommendation it wishes to make to the City Council
regarding the City's Water Quality and Flood Protection Program.
1-16
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE-FY13-14
MAY 29, 2013
Page 2 of 8
BACKGROUND AND DISCUSSION
Overview of Scope and Purpose for the Oversight Committee
The Scope and Purpose for the Oversight Committee, approved by the City Council on May
5, 2009, serves to establish the process by which the Oversight Committee exercises its
duty. The process was outlined in the Resolution as follows:
As described in Section 3.44.080 A., "The committee shall hold at least one public
hearing and issue a report, on at least an annual basis, to inform city residents and
tbe City Council regarding how storm drain user fee revenues are being spent and
to make recommendations to the city council regarding future expenditures of the
storm drain user fee revenues." Staff expects to use maps, pictures, video and
financial information regarding the storm drain program to assist the Oversight
Committee's understanding.
The Committee's review will include the following information provided by Staff:
>-a comparison of budget v. actual accounting for the current fiscal year;
>-a construction project status report, including information about expenditures to date
and major contract status (i.e. design and construction contracts);
>-the proposed budget (including major projects) for the forthcoming year;
>-an excerpt of the Five-Year Financial Model for the storm drain program, including
the estimated ending balance, if any, in the Water Quality and Flood Protection fund;
>-an excerpt of the Five-Year Financial Model regarding the projected revenues of the
General Fund of the City for the current and forthcoming fiscal years, including but
not limited to, property taxes, sales taxes and transient occupancy taxes; the
projected expenditures of the General Fund of the City for the current and
forthcoming fiscal years; and the estimated ending General Fund reserves for the
current and forthcoming fiscal years; and
>-Staffs recommendation regarding the User Fee rate for the forthcoming year prior to
making its own recommendation regarding the User Fee rate for the next fiscal year.
Staff believes that its presentation to the Oversight Committee made on April 10, 2013,
along with the information included with this report, satisfies the provisions of Municipal
Code section 3.44.080 that outlines the information to be annually reviewed by the
Oversight Committee.
Passage of Measure C -November 6, 2007
On November 6, 2007, the voters approved an amendment to the Fee ordinance to include
a voter enacted Oversight Committee and a 10-year sunset of the Fee. When the Fee rate
was established by the property owners in 2005, the total User Fees to be collected over 30
years was estimated to be about $50 million to pay for known construction projects, storm
drain lining, maintenance, staffing and engineering. Based upon the 10-year sunset
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WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE-FY13-14
MAY 29, 2013
Page 3 of 8
established with the passage of Measure C, the maximum total User Fees that could be
collected is estimated to be about $13 million. Although the Fee has been an essential,
dedicated source offunding that has enabled significant progress towards rehabilitating the
City's existing storm drain system, it appears as though it will be necessary to secure other
funding sources to continue the Storm Drain program when the Fee expires on June 30,
2016.
Methodology for Determining Maximum User Fee Rate and User Fee Rate History
The property owners who use the City's storm drain system voted to establish the Fee in
2005 at a rate of $86 per ERU. The ballot measure was incorporated into the City's
Municipal Code and includes a provision to increase the Fee rate based upon the
Consumer Price Index ("CPI") for all Urban Consumers for the Los Angeles, Riverside and
Orange County areas, including all items as published by the U.S. Bureau of Labor
Statistics, as of March 1 of each year, but not to exceed a maximum increase of two
percent per year.
The ballot measure, as incorporated into the Municipal Code, provides that without a vote
of the property owners, in any year, the City Council may do any and all of the following: (i)
repeal this Chapter 3.44; (ii) reduce the rate per ERU for the Fee below the maximum rate;
or (iii) increase the rate per ERU for the Fee up to or below the maximum rate if it has been
previously set below such rate. In no event shall the City Council increase the storm drain
user rate per ERU in excess of the maximum rate without approval by a majority vote of the
property owners subject to the Fee. The Oversight Committee could recommend any of
the three alternatives described in (i) through (iii) described in the preceding paragraph.to
the City Council
At its meeting on June 27, 2012 and incorporated into their 2012 Annual Report to the City
Council, the Oversight Committee recommended to increase the Fee for FY12-13 from
$92.53 to $94.39, the maximum rate allowed. At its meeting on July 17, 2012, the City
Council voted to maintain the Fee rate at $92.53 for FY12-13. Based upon its findings
described herein, Staff recommends the increase the annual the Fee to the maximum
annual Fee rate per Equivalent Residential Unit, a proposed increase of 4%, from
$92.53/ERU to $96.27/ERU, based upon the change in CPI for the 24 months ended
February, 2013, to fund the City's Water Quality and Flood Protection Program. Again, the
Oversight Committee could recommend any of the three alternatives described in (i)
through (iii) described in the preceding paragraph to the City Council, including support for
Staff's recommendation to increase the annual the Fee to the maximum annual Fee rate
per Equivalent Residential Unit, a proposed increase of 4%, from $92.53/ERU to
$96.27/ERU.
Staff has provided Attachment D -User Fee Rate History, including annual and total
estimated Fee revenue, incremental increases of Fee revenue and other useful information.
1-18
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY13-14
MAY29, 2013
Page 4 of 8
Attachment D offers a one page view of the economic trends of Fee revenue since its
inception.
City Council Policy 41 -Reserve Policies
The City Council approved revisions of the Reserve Policies on December 21, 201 O and
April 19, 2011. Paragraph B. of the Policy establishes a procedure for the prudent
management of Transient Occupancy Tax ("TOT") revenue for funding capital improvement
projects. On April 30, 2013, the City Council further revised the Reserve Policies as follows
(see underlined text):
"The City will maintain a minimum of $3 million in the Capital Improvement Projects
(CIP) fund as a reserve for major improvement projects related to roadways, storm
drains, parks, buildings, rights-of-way, and the sewer system. Subject to the annual
budgeting process, the CIP reserve will be funded, to the extent possible, by
allocating the following to the CIP fund:
1. Amounts equal to the annual transient occupancy tax (TOT); and
2. Amounts equal to the prior year General Fund favorable expenditure
variance. when applicable.
All interest earnings in this fund will be used for capital improvement projects."
The revised Policy 41 serves to provide a mechanism to facilitate the link of TOT revenue
and future favorable budget variances (if they occur), with Cl P needs, especially in light of
the priorities and amount of unfunded CIP projects (including unfunded storm drain
projects).
City Council Reserve Policy also includes the set-aside of General Fund reserves as
follows:
"The City will maintain a minimum fund balance of at least 50 percent of annual
operating expenditures in the General Fund. This is considered the minimum level
necessary to maintain the City's credit worthiness and to adequately provide for:
1. Economic uncertainties, local disasters, and other financial hardships or
downturns in the local or national economy.
2. Contingencies for unseen operating or capital needs.
3. Cash flow requirements."
STAFF'S FINDING AND RECOMMENDATION
Total City-wide revenue, including all funds of the City and the Improvement Authority, is
1-19
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY13-14
MAY 29, 2013
Page 5 of 8
expected to be $33.4 million for FY13-14 (excluding inter-fund transactions). The proposed
City-wide spending plan is $33.5 million. The following summary paragraphs about the
City's General Fund budget, capital spending plan, unfunded, known capital projects and
minimal reserve levels, prepared in conjunction with the FY13-14 budget process, as well
as the computation of the extrapolated replacement cost of infrastructure, lead Staff to its
recommendation to increase the annual Fee to the maximum annual Fee rate per
Equivalent Residential Unit, a proposed increase of 4%, from $92.53/ERU to $96.27/ERU,
based upon the change in CPI for the 24 months ended February, 2013.
Summary of Draft FY13-14 Budget-General Fund Reserves
The General Fund is the operating fund of the City, and accounts for roughly two-thirds of
the City-wide budget. A summary of the working draft of the FY13-14 General Fund budget
follows:
~JWwW4}6dffo/4f&~l:r~_u;J.Afi . :::='~--~&r.W.dr~.f:fiW..M"ff:fff§~~.
Re-.enues 24, 734,690
Excess General Fund Reser-.e, June 30, 2013 701,987
Expenditures · (19,693,245)
Transfer TOTto CIP (3,679,700)
Transfer for Residential Street Rehab (1,873,414)
Other Net lnterfund Transfers (141, 700)
Change in General Fund Reser-.e Policy Lei.el (34,886)
t--~~1BJJBBME&!$J1.ft.-#l
The working draft of the FY13-14 Budget includes one-time uses of the Excess General
Fund Reserve at June 30, 2013 totaling $700,000; including a traffic sign compliance
survey, storm water permit requirements, fencing at City facilities, and installation of
security cameras. If the City Council adopts the draft budget for the General Fund for
FY13-14, Excess General Fund Reserves are expected to be exhausted.
Summary of Draft FY13-14 Budget-CIP Reserves
The FY12-13 CIP Budget includes than $13 million of CIP projects based upon the
attached draft 2013 Five-Year Financial Model (2013 Model). The working draft of the
FY13-14 CIP Budget includes a recommendation to appropriate more than $8 million of CIP
projects in FY13-14. The working draft of the FY13-14 CIP Budget also includes a
recommendation to fund $21. 7 million of infrastructure projects over the next five years
from the Cl P Reserve. Exhibit C-2 of the draft 2013 Model provides a detailed view of the
sources and uses (including FY12-13 appropriations) of the CIP Reserve from its inception
through FY12-13, as well as the draft FY13-14 CIP Budget and recommended CIP funding
plan through FY17-18. If the City Council follows Staff's recommendation, the Excess CIP
1-20
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE-FY13-14
MAY 29, 2013
Page 6 of 8
Reserve would be about $3.9 million ($6.9 million less $3 million minimum CIP Reserve
level) policy after FY13-14 and maintain a consistent CIP Reserve level thereafter.
San Ramon Canyon (Storm Drain) Project Funding
As explained in a staff report to the Oversight Committee, dated April 24, 2013, a
construction contract were formally awarded by City Council to L.H. Woods and Sons, Inc.
on March 5, 2013 for the San Ramon Canyon Stormwater Flood Reduction Project (aka
PVDE/PVDS Roadway Stabilization Project) for the Stormwater Flood Management
Program. The ground breaking occurred on April 16, 2013 and construction is currently
underway.
As you will recall, the City was awarded a grant from the Disaster Preparedness and Flood
Protection Bond Act of 2006 to assist in funding the San Ramon Canyon Project. The
Grant is administered by the State Department of Water Resources. The maximum dollar
amount of reimbursement offered through the State grant was set at $9,464, 727; the total
cost of the work estimate for the 50/50 cost sharing is $18,929,455. Until a financing plan
for all infrastructure needs of the City, including San Ramon is established, the City Council
decided to use CIP Reserves to fund the City's matching contribution. If the City issues
debt or secures another form of financing, the CIP Reserve may be reimbursed in
accordance with the Reimbursement Resolution adopted by the City Council in 2012. The
FY 12-13 CIP Budget includes the use of about $8.3 million CIP Reserves to fund the San
Ramon Canyon Project.
User Fee Sunsets in 2016
Attachment B -Excerpts from Draft 2013 CIP -Capital Improvement Plan -Unfunded
Projects includes more than $14 million of known, unfunded storm drain projects. None of
the unfunded storm drain projects are expected to be performed prior to the loss of the Fee
in 2016.
After the Fee sunsets in 2016, there will be no dedicated funding source for maintenance
and repair of storm drains. The storm drain program will compete with other projects and
services for General Fund money, which currently has a structurally balanced budget and
minimal CIP Reserves.
Known, Unfunded CIP Projects
In addition, other infrastructure projects remain unfunded. The dedicated funding for
arterial streets is insufficient and there is no dedicated funding for sewers. The working
draft of the 2013 Five-Year Capital Improvement Plan reflects that identified, yet
unfunded infrastructure projects range between $31.9-44 million (including storm drain
projects). Additionally, no provision for rehabilitation or replacement of the Civic Center
1-21
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY13-14
MAY 29, 2013
Page 7 of 8
was included in the 2013 CIP. The 2012 CIP included an estimate of $23.5-$43 million for
the replacement of Civic Center facilities as an unfunded project, based upon a wide range
of options from basic minimal reconstruction to a full Civic Center with public recreational
amenities.
Infrastructure Management Plan
Public Works and Finance Staff are working together to develop an Infrastructure
Management Plan (IMP) to address the long-term capital needs of the City. As noted in
previous reports to both the Finance Advisory Committee (FAC) and the City Council, the
City's infrastructure is aged; and due to budgetary constraints, the City has been cautious
when budgeting for capital spending over the years. Staff expects that the IMP will provide
a roadmap for future systematic replacement, refurbishment, and financing of City
infrastructure.
The City's Capital Improvement Projects (CIP) Reserve established by the City Council to
provide for infrastructure rehabilitation is funded with annual transfers from the General
Fund equivalent to transient occupancy tax (TOT) revenue (currently about $3.6 million
annually). Again, Staff has prepared a recommendation to fund $21.7 million of
infrastructure projects over the next five years from the Cl P Reserve. Although it is a good
start, the CIP Reserve is not sufficient to finance all of the City's infrastructure needs as
demonstrated by the following extrapolation.
~ On the City's books, infrastructure is carried at its historical cost of $157.5 million,
less $73.2 million of depreciation. About one-quarter of the infrastructure cost was
estimated at 1973 value, when the City was incorporated and assets were
transferred from the county. Most of the infrastructure has estimated useful life
ranging from 30 to 50 years. We can roughly estimate the hypothetical replacement
cost of this infrastructure with a simple calculation. If the increase of the Consumer
Price Index (CPI) is applied to the historical cost of the assets (average of 3.35%
annually since 1973), then today's estimated replacement cost is about $331 million.
If this estimated replacement cost in nominal dollars is evenly distributed over a 50
year period, the rate of infrastructure rehabilitation spending would be about $6.6
million per year (or about 180% of the City's annual transit occupancy tax revenue).
The actual replacement cost of the City's infrastructure assets may be greater or
less than this hypothetical estimate. This hypothetical estimate does not provide for
any enhancements of infrastructure, only the rehabilitation of existing infrastructure.
~ The working draft of the 2013 Five-Year Capital Improvement Plan includes a list of
projects that have been identified and quantified by the City's engineering staff, yet
funding has not been identified. Some of these projects address both safety issues
and City Council goals, which have a total estimated cost starting at $31.9 million.
The list does not include new construction or refurbishment of City Hall.
~ The Fee that provides about $1.3 million annually towards on-going repairs,
maintenance and improvements of storm drains sunsets in 2016. Another funding
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WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE-FY13-14
MAY 29, 2013
Page 8 of 8
source will be needed to backfill ongoing repairs and maintenance beginning in
FY17-18.
Although the General Fund is contributing about $3.6 million annually into the Capital
Improvement Projects Reserve (using transient occupancy tax received from the Terranea
Resort), it is not enough to pay for the City's infrastructure needs.
CONCLUSION ANDS RECOMMENDATION
Therefore, Staff believes that it is necessary to increase the Fee up to the maximum annual
Fee rate per Equivalent Residential Unit, a proposed increase of 4%, from $92.53/ERU to
$96.27/ERU, based upon the change in CPI for the 24 months ended February, 2013.
ADDITIONAL INFORMATION
Reports and Meetings Prior to the Public Hearing for FY12-13
At its meeting on April 24, 2013, Staff presented a FY12-13 update regarding the storm
drain program to the Oversight Committee, including the status of storm drain capital
projects, storm drain lining projects, catch basin filtration devices and other expenditures for
the program. Staff also presented the proposed project plan and draft budget for the Storm
Drain program for FY13-14, as well as the draft 5-Year Storm Drain Plan.
Attachments:
Staff Report, Dated April 24, 2013
Attachment A-Draft 5-Year Storm Drain Plan Through FY17-18
Attachment B -Excerpts from Draft 2013 GIP -Capital Improvement Plan -Unfunded
Projects
Exhibit C-1 -GIP Project Fund Expenditures (From Draft 2013 Model)
Exhibit C-2 -GIP Reserve Reconciliation (From Draft 2013 Model)
Attachment D -User Fee Rate History
Attachment E -Financial Analysis & Economic Outlook (From Draft FY13-14 Budget)
1-23
Attachment -April 24, 2013 Staff Report
CITYOF
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT
COMMITTEE FOR THE WATER QUALITY AND FLOOD
PROTECTION PROGRAM
LES JONES, INTERIM DIRECTOR OF PUBLIC WORKS
DENNIS McLEAN, DIRECTOR OF FINANCE AND
INFORMATION TECHNOLOGY
APRIL 24, 2013
WATER QUALITY AND FLOOD PROTECTION PROGRAM -
MIDYEAR REPORT & WORKING DRAFT OF FY13-14 BUDGET
& 5-YEAR PLAN
Project Managers: Ron Dragoo, Senior Engineer
Andy Winje, Associate Engineer
BACKGROUND AND DISCUSSION
This report includes a brief update regarding the major projects included in the Water
Quality and Flood Protection program for FY12-13; and, the working draft of the FY13-
14 budget. No recommendation accompanies this report and no action is requested of
the Oversight Committee.
PROGRAM HIGHLIGHTS-PROJECTS INCLUDED IN FY12-13 BUDGET
San Ramon Canyon (PVDE/PVDS Roadway) Stabilization Project
Since the Oversight Committee's last public meeting on June 27, 2012, much has been
accomplished to complete design, obtain all necessary regulatory agency permits,
finalize the grant agreement with the state, prequalify firms for bidding, advertise for and
receive bids, develop a state approved labor compliance program, award contracts for
the construction phase and identify the remaining source of funds needed for the
project. A construction contract and supporting professional services contracts were
formally awarded by City Council on March 5, 2013. The low bid came in at about
$15.1 million, very near to our engineer's estimate. The construction contract was
awarded to L.H. Woods and Sons, Inc.
1-24
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 2 of 8
The City was awarded a grant from the Disaster Preparedness and Flood Protection
Bond Act of 2006 to assist in financing the San Ramon Canyon Stormwater Flood
Reduction Project (aka PVDE/PVDS Roadway Stabilization Project) for the Stormwater
Flood Management Program. The Grant is administered by the State Department of
Water Resources. The maximum dollar amount of reimbursement offered through the
State grant was set at $9,464,727; the total cost of the work estimate for the 50/50 cost
sharing is $18,929,455. Until a financing plan for all infrastructure needs of the City,
including San Ramon is established, the City Council decided to use CIP Reserves to
fund the City's matching contribution. If the City issues debt or secures another form of
financing, the CIP Reserve may be reimbursed in accordance with the Reimbursement
Resolut!on adopted by the City Council in 2012.
The City issued a Notice to Proceed to the contractor on April 9th and a groundbreaking
ceremony was held on April 15th. Staff expects construction activities to continue
through April 2014.
Please see the City's website to view updates regarding the project at
http://www.palosverdes.com/rpv/publicworks/San-Ramon/index.cfm.
Stormwater Master Plan Program
In our last update, Staff reported that the City's GIS system required an update before a
GIS-based stormwater master plan could be developed. As part of the IT services
provided the City by Palos Verdes on the Net, the City has obtained access to the
County's digital LAR-IAC aerial photography, elevation contour maps, parcel shape files
and parcel data. Staff is still pursuing additional software to allow desktop interface with
the LAR-IAC and infrastructure data.
Staff has developed a request for proposal (RFP) and is expecting bring a contract for
professional services to perform the master plan study to City Council in early June. As
discussed above, an initiative to consider the City's overall infrastructure asset
management scheme is underway. The envisioned storm drain master plan is a portion
of this scheme; therefore, is being pursued in conjunction with development of these
other ideas.
Storm Drain Lining
Work began on this $1.3 million project in May of 2012. About 70 pipes on the east side
of the City, ranging in length from 20 feet to over 500 feet have been inspected and
cleaned. Liners have been placed in about 30 of these, with another half dozen or so
awaiting lining. Many of the remaining pipes were determined to not need a liner
because of previously performed maintenance, or were discovered to be concrete pipes
in acceptable condition. A few of the pipes required point repairs to fix crushed sections
or install manholes to provide access for lining. Several of the pipes were removed
from the lining program and will become their own projects. This was done when the
cost of a needed repair was prohibitive relative to placing a new pipe. Several of these
1-25
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 3 of 8
pipe replacement projects are in design already and will be brought into the construction
phase very soon. In addition, recent heavy rains on March 9th exposed a deficiency in a
CMP on the west side of the City. After investigation, staff has decided to add a repair
to this pipe to the current lining project. This late addition will require some additional
budget, which is available in savings from other project line items.
Three pipes of larger diameter were deemed to be in need of a liner. In the bid
documents, Staff anticipated an invert pave treatment would do for these large diameter
pipes, which are very expensive to line with the full circumference cured in place pipe
process used for smaller diameters. However, these pipes were determined to need a
full structural rehabilitation. The contractor proposed a proprietary technology that has
not been used much on the West Coast, whereby fiberglass reinforced concrete is
applied 'to the inside of the pipe with a rotary sprayer. The treatment provides an
impermeable barrier as well as a structural section within the failing metal pipe,
essentially building a replacement pipe inside the old one. City Council approved a
sole source contract in October of 2012 with the Contractor and work on these should
be completed by the end of March. All work anticipated through this lining project is
expected to be completed by June 2013.
San Pedro Canyon Storm Drains
This multi-year project to address the many drains the outlet into this canyon saw its
initial construction this year. These drains represent the some of the oldest
underground infrastructure still in use by the City. This year's effort was centered on
replacing the nearly 80 year old pipes that drain the Miraleste Plaza. Approximately 840
feet of 18-inch reinforced concrete pipe was installed from existing catch basins to the
location of the existing outlet in the canyon. This construction project was completed for
about $210,000. To complete the work on the San Pedro Canyon drains, additional
work may be required for similar era drains down the hill from the plaza. Condition
assessments of these pipes should be completed in the next fiscal year.
PROJECT UPDATES -PROJECTS INCLUDED IN FY12-13 BUDGET
Proiect Name: San Ramon Canyon Flood Reduction Proiect
Project Area: Project Area 3
Budaeted Cost: $19,271,818
Contracts Awarded: $16.3M
TotaUEstimated Costs: $19.3M (construction costs, partially funded by State)
Percentaae Completion: Plannina & Design complete
Proiect Oescriotion:
City Council awarded construction and professional service contracts (for construction support)
on March 5, 2013 including budget resolution of $17,949,603. The Contractor has submitted
insurances and bonds and received NTP on April 9, 2013. Groundbreaking held April 16, 2013.
Construction under way in two primary locations: just east of switchbacks and just south of PVDS
at city border with Los Angeles. Work expected to be completed in April 2014.
1-26
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 4 of 8
Project Name: San Pedro Canvon Storm Drains
Project Area: Project Area 6
Budaeted Cost: $555,440
Contract Award: to date $245,314
Final/Estimated Costs: TBD
Percentaae Completion: 50%
Proiect Description:
This project in San Pedro Canyon lies east of PVDE and is crossed several times by residential
streets. This project has become a priority due to observed flooding in the area, sediment and
debris accumulation in potentially undersized debris basins and degraded pipes and inlet/outlet
structures. Staff identified the Miraleste Plaza subsystem as a priority and has completed
construction of improvements to the Plaza drainage. Staff has engaged a consultant to provide
design recommendations to rehabilitate existing facilities, including construction drawings, for
remaining portions of the system.
Additional projects on Via Colinita draining into San Pedro Canyon have been discovered. Full
investigation of these drains will proceed in Summer of 2013, with design and construction in late
2013 or 2014.
ProiectName: $torm Drain Unino
Proiect Area: Project Area 12
Budgeted Cost: $1,323,665 (current project)
Contract Award: $1,109,841
Total/Estimated Costs: $1,456,305 est.
Percentage Completion: 90%
Prc>Jeet·Descrit>tfon:
About 70 pipes encompassing approximately 6,000 linear feet of storm drain in are included in
the current project. All unlined City owned corrugated metal pipes on the east side of the City
are included in this year's program, ranging in diameter from 12 inches to 54 inches. The
contract was awarded in May 2012 has been proceeding steadily ever since, with expected
completion in June 2013. Discovery of existing conditions during construction has spun off
several additional projects to install structural lining or replace pipes altogether. Late season
rains in March 2013 revealed imminent failure in a pipe on the City's west side. Staff is adding
this line to the current project. Funds programmed for coming year will be used to begin design
stage of the next (west side) project.
Proiect Name: Via Colinita & Roan Svstem
Proiect Area: Project Area 7
Budgeted Cost: $242,500
Contract Award: $0
Total/Estimated Costs: TBD
Percentage Completion: 0%
Project Description:
The Via Colinita portion of this project is being addressed under the San Pedro Canyon Storm
Drain project and $50,000 was transferred to that project in FY11-12. The remaining portion is for
addressing the physical deficiencies in the Roan road area system. Initial phases of this
investigation will begin in FY 2013-14.
1-27
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 5 of 8
Project Name: PVDE Lower Switchbacks
Project Area: Project Area 3
Budgeted Cost: $485,000
Contract Award: $0
Total/Estimated Costs: TBD
Percentage Completion: 0%
Project Description:
A portion of this project will be addressed in the San Ramon project. Remaining drains will be re-
evaluated when San Ramon is completed. Funds should be rolled forward.
ProiectName: Catch Basin Filtration Devices
Project Area: Project Area 12
Budgeted Cost: $73,000
Contract Award: $5,000
Final/Estimated Costs: $42,000
Percentage Completion: 60%
Proiect bescriDtion:
Retrofitting of catch basins with filtration screens is required by the Regional Board for this
watershed. Sixty eight (68) catch basins have been retrofitted at a cost of about $27,000. The
City's compliance response is about 60% and ahead of schedule. The remaining basins in this
drainage are county owned and will require an MOU for maintenance with Los Angeles County.
The City, working with other South Bay cities, has been awarded a grant to partially cover the
costs of installation of the remaining inserts. Installation of these will be performed after an MOU
is authorized by partnering cities, anticipated during Summer 2013. Although the remaining 40%
of the basins will come at a higher cost due to involvement of LA County and cost for pulling their
flood permits, cost will be less than originally budgeted. The final 40 or so catch basins will be
retrofitted at a total outlay from the City of about $15,000. The new MS4 Permit may require the
City to retrofit all of the basins in the City, so it is recommended to roll any saving forward year by
year to achieve permit compliance.
Mis;.~Jlaneous Repairs & Storm Drain Filtration
Proie<t Name: Maintenance
Project Area: Project Area 12
Budaeted Cost CFY11-12 onlv): $545,448
Contract Award: Various Contracts
Total/Estimated Costs: $46,967
Percentaae Completion: TBD
Proiect DescriDtion:
As a result of this program and the following maintenance activities, the City of Rancho Palos
Verdes has not received a single "after-hours" callout to address a rain related emergency
during the past four years. The lack of rain this year has resulted in not needing to perform any
emergency miscellaneous repairs this year.
~ Mossbank extension V-ditch was built to eliminate street runoff from impacting a resident's
property
~ Construction was completed for a point repair on a 12-inch concrete pipe on Via De Anzar.
~ Design completed and construction is pending on facility repair at PVDS and Terranea Way
~ Cleaned about 200 filtration devices and several open channels
1-28
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 6 of 8
Project Name: Drainage Master Plan Program
Project Area: Project Area 12
Budgeted Cost: $727,789
Contract Award: $31,723 (to date)
Total/Estimated Costs: TBD
Percentage Completion: 5%
Project Description:
The City is upgrading its GIS platform and PW Staff will continue improving GIS data and best
practices to maximize use for stormwater management planning. Many available as-built
drawings have been scanned and linked to existing GIS database. Establishing links to
inspection video and remaining drawings is underway.
Staff engaged RBF Consulting Engineers to develop a planning document to guide our efforts to
build a ~ustainable and useful management tool. Staff has solicited proposals for full master plan
program development in anticipation of pending necessary IT improvements. Initial phase
should be awarded in June 2012.
PROJECTS INCLUDED IN DRAFT FY13-14 BUDGET
Project Name: Palos Verdes Drive South <East Of Barkentine)
Project Area: Proiect Area 11
Budaeted Cost: $446,000
Contract Award: $0
Total/Estimated Costs: $446,000
Percentaae Comoletion: 0%
Pr<>iect Oescriotion:
This project area includes several storm drain systems that cross Palos Verdes Drive South at
various locations. Drainage capacity will be increased with improvement to inlets and outlet
structures.
Protect Name: Storm .Drain Lining
Project Area: Project Area 12
Budgeted Cost: $329,881
Contract Award: $0
Total/Estimated Costs: $329,881
Percentage Completion: 0%
Project Description:
All CMP storm drain lines within the City have reached their design life expectancy and need to
be lined to extend their life another 30+ years. CMP dating back to the 1940s have been
discovered and require maintenance along with those most recently installed in the 1970s. A
large number of drainage problems citywide can be overcome by relining deteriorated pipes and
improving inlets and outlet structures. Funds programmed for coming year is expected to be
used to begin design stage of the next (west side) project.
1-29
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 7 of 8
Project Name: Marguerite Ooen Channel
Project Area: Proiect Area 1 O
Budaeted Cost: $350,000
Contract Award: $0
Total/Estimated Costs: $350,000
Percentage Completion: 0%
Proiect Descriotion:
Staff is working with the County to determine the jurisdictional issues of this channel. Design has
been delayed to FY 13-14; construction will follow as needed. Improvement site on private
property will require an easement or land acquisition.
The Unfunded Schedule of the working draft of the 2013 Capital Improvement Program
(CIP) includes storm drain projects (including Altamira Canyon) with an estimated cost
ranging 'up to $16.5 Million.
LA COUNTY WATER QUALITY FUNDING INITIATIVE
In the mid-year report last year, staff reported on a pending funding issue that was
being initiated by the County known as the Clean Water, Clean Beaches Measure and
the Water Quality Funding Initiative (WQFI). As written, the WQFI is essentially a parcel
fee to be collected from every parcel in the District (about 2.2 million parcels.) to
address stormwater quality issues.
The issue is still not resolved. The governing body of the LA County Flood Control
District, the County Board of Supervisors has sent the item back to County staff for now.
Their first meeting on January 15, 2013 included testimony of nearly 200 residents of
the District either supporting or protesting the fee. They continued the Protest Hearing
to a meeting on March 12, 2013 where it was decided to send it back for more work and
the possible inclusion on as a ballot measure during scheduled elections in 2014. The
RPV City Council, on December 21, 2012, unanimously voted to file a protest on behalf
of the hundred or so City owned parcels that would have been subject to the proposed
fee.
The working draft of the 2013 CIP includes about $400,000 for the City's share of the
cost of developing a plan to address requirement of the new MS4 permit. The MS4
Permit requires the City to prepare a plan to monitor the quality of the water that drains
out of Rancho Palos Verdes, install monitoring equipment and to participate in a
regional improvement project. Because the City's water quality program is funded with
either General fund or CIP fund reserves (rather than the storm drain user fee), it is not
under the purview of this Committee; City staff brings it to the Oversight Committee's
attention for information only.
INFRASTRUCTURE MANAGEMENT PLAN
Public Works and Finance Staff are working together with the City's Financial Advisor to
develop an Infrastructure Management Plan (IMP) to address the long-term capital
1-30
Attachment -April 24, 2013 Staff Report
WATER QUALITY AND FLOOD PROTECTION PROGRAM -MIDYEAR REPORT &
WORKING DRAFT OF FY13-14 BUDGET & 5-YEAR PLAN
April 24, 2013
Page 8 of 8
needs of the City. As noted in previous reports to both the Finance Advisory Committee
(FAC) and the City Council, the City's infrastructure is aged, and due to budgetary
constraints, the City has been cautious when budgeting for capital spending over the
years. Staff expects that the IMP will provide a roadmap for future systematic
replacement, refurbishment, and financing of City infrastructure.
The City's Capital Improvement Projects (CIP) Reserve established by the City Council
to provide for infrastructure rehabilitation is funded with annual transfers from the
General Fund equivalent to transient occupancy tax (TOT) revenue (currently about
$3.6 million annually). With the working draft, Staff has prepared a recommendation to
fund $21. 9 million of infrastructure projects over the next five years from the Cl P
Reserve. Although it is a good start, the CIP Reserve is not sufficient to finance all of
the City's infrastructure needs as demonstrated by the following.
•!• About one-quarter of the City's depreciable infrastructure assets (about $38
million) are on the City's books at estimated 1973 historical cost. Much of the
City's infrastructure has a useful life of 30 to 50 years. Applying the increase of
consumer price index over the past 40 years to these assets results an estimated
replacement cost of about $137 million.
•!• The working draft of the 2013 Five-Year Capital Improvement Plan (CIP) includes
a list of projects that have been identified and quantified by the City's engineering
staff, yet funding has not been identified. Some of these projects address both
safety issues and City Council goals, which have a total estimated cost starting at
about $48 million.
•!• The storm drain fee that provides about $1.3 million annually towards on-going
repairs, maintenance and improvements of storm drains sunsets in 2016. As
previously stated, the working draft of the 2013 CIP indicates that approximately
$16.5 million of known storm drain projects will not be completed before the
storm drain fee sunsets.
Attachments:
Storm Drain Plan Through FY17-18
1-31
Attachment -April 24, 2013 Staff Report
P'riOt
~,,·
P'1d
FYQS..06 Thru
Area. FYfM2
Backbone Projects
2 McCarreil Canyon 7 ,487.716
Mccarrell Canyon, Tarragon Property
2 Acquisition 1,403.500
1 Sunnyside Ridge 417 ,361
3 Lower San Ramon Canyon Stabilization 1,322 ,215
5 PVDE Miraleste C anvon System -
6 PVDE San Pedro Can vo n System 14,560
Pip e lini ng
12 Phase I 532,000
10 Phase ii (Monero Storm Drain) 174,723
2 PVDS (l'rom Cfipper to Seacove) 210,000
10 Cres t lo Crestridge 59,700
10 Hawthorne to Silver Arrow 130.000
9 T arapaca Drive 80.000
5 Pontevedra Drive 317.792
12 Storm Drain Lining, Other 1,303,127
Capacity & Secondary System Projects
7 Vi a Collnita & Roan Projects 204,228
Hawthorne Blvd. (CfosedFY10-11, re-
allocated to the San Pedro Canyon Storm
2 Drain Project)
9 PVDE Lower Switchbacks -
6 South HawthorneMa Frascati -
11 Middlecresl Road Project -
3 PVDS (East of Barkentine) -
Flllratlon Svslems
~ Catch Basin Filtration Devices 418,255
'3o5Q2 PVDW Catch Basin 8,600
Other Projects
Mccarrell Canyon lntenm,
2 Barkentine/Seacove 135,000
Mccarren Canyon Interim, Gabion & Timber
2Walls 119,213
Palos Verdes Bay Club Interim
2 Improvements 185,000
10 PVDS Salvation Army Outlet 26 .000
6 Bronco Drive 66.000
5 Noble Vi ew Co11Yo n 27.000
12 Citywide Interim , Other 7.400
1 O Alld a Pl ace Storm Drain Relocation 98.480
~ T ara pa ca Landsllde St udy 6 ,377
6 PVDE Engineering Reserve 20,360
6 PVDE rnlets -
1 o Mossbank Storm Draln Rehabllilation 245,885
4 PVDS @ A!tamira Canyon -
5 Via Canada 89 ,334
11 Marguerite Open Ch an nel -
City of Rancho Palos Verdes
Storm Drain Plan Through FY17-18
(Memo only)
FY1M_3
(A ress BJ
EJ<pe~d
FY12-13 .Spent-o.r C arryover ~ta·14
Budgot COmmftted FY13-f4 ·SYR 'Model
17,949,603 870,772 17 ,078,831
555 ,440 '245,31'1 310,126
1,323,665 1/t09,841 213,824 329,881
242,500 242,500
485,000 485;<io0
446.000
73,000 ~.Olia 68.000
50,000 50,000 350,000
Total
Budgeted
fY,fjl. __ ff n'15'16 F.'1'1e.:f7. FY't7-fa ProJected
Sll'R'MOdol < SYR Model SYRModOI• 5YR~6del BvProiect
7,487,716
1,403,500
417,361
19,271,818 -
570,000 -
532,000
174,723
210,000
59,700
130,000
80,000
317,792
335.278 340.836 347,653 350 ,000 4,330,440
446,728
-
485,000
440,000 440,000
-
446,000
491,255
8,600
135,000
119,213
185,000
26,000
66,000
27,000
7,400
98,480
6,377
20,360 -
245,885 -
89,334
400,000
1
-
3
2
Attachment -April 24, 2013 Staff Report
li'rlor
y~·
Paljl
FY~61bru
~· F¥~M Z<
Miscellaneous Repairs & Maintenance
12 Miscellaneous Repairs 145,470
Storm Drain/Filtration Maintenance (includes
Hawthorne, Montemalaga & Video
12 lnspection/Cleanina) 605,614
Subfof81 Pro-~·•& Mal n l enene&.G.<)St si , 5,860'.Q :I 0
12 Purchase of Push Camera I 11,813
12 Adml nlstraUon (conltacVstaff engineer) 910,953
12 Drainage Master Plan Program 22.211
12 Storm Water Enterprise Asset Registry -
12 Asset Maintenance Management System -
12 Hydrologic, Hydraulic & Pollutant Modelling -
12 Analysis & Prioritazion of Deficiencies -
12 Capital Improvement Programming -
Totil Prootam eostS1 16,80.5'887
City of Rancho Palos Verdes
Storm Drain Plan Through FY17-18
(Memo only)
(A l&SJS B)
FV1Z..f3 E~d
FY12-13 SpMtor: CarryovM FY~Gl-'f4!
Budget Committed FY13-14 5XR.Modol
545.448 46,ll87 498.48-1 229 ,727
21 ,224,656 2,2n,BM 18,946,762 1!355;609
148,618 141 ,1'7.3 7,445 157,080
727,789 727,789 30,000
22,101,063 2,419,067 19;681,996 1~·689'
m'1Y5' l>'llt~
.&YRModel &YRModcil
237 ,518 245,544
1.0 ~2.ias•---..a s,310 ·
161 ,792 166,646
30,000 30.000
1 j204j5138;. 783'026
Note: Til ls s chedule re flec ts acl ua/ c o sts an d does n ot include dep reciati on or capltallution at stt>mJ drain Improvemen ts, which are
Included In th e Cilv ~ financial sta tem ents.
Total
Budgeted
FY16'4 '11 fY<1r-1 1!l Projected
&YRModel &YRModel By Project
145,470
250,455 250.000 2 ,364.306
698,108 600,000 41 ,238,459
11,813
171,645 175,000 1,891,734
30,000 30 ,000 900,000 --
--
799:7.53 805:000 44 042,006
1
-
3
3
~niG:iv
I I ~.
~'Ell
li~Tfu.it
Area F\'f(i~~
Backbone Projects
2 Mccarrell Canyon 7,487,716
Mccarrell Canyon, Tarragon Property
2 Acquisition 1,403,500
1 Sunnyside Ridge 417,361
3 Lower San Ramon Canyon Stabilization 1 ,322 ,215
5 PVDE Miraleste Canyon Svstem -
6 PVDE San Pedro Canyon System 14 ,560
Pipe Lining
12 Phase I 532 000
10 Phase II (Monero Storm Drain) 174,723
2 PVDS (from Clipper to Seacove) 210,000
10 Crest to Crestridge 59,700
10 Hawthorne to Silver Arrow 130,000
9 Tarapaca Drive 80,000
5 Pontevedra Drive 317,792
12 Storm Drain Lining, Other 1,303,127
Capacity & Secondary System Projects
7 Via Colinita & Roan Projects 204 ,228
Hawthorne Blvd. (closed FY10-11, re-
allocated to the San Pedro Canyon Storm
2 Drain Project) -
9 PVDE Lower Switchbacks -
6 South HawthorneNia Frascati -
11 Middlecrest Road Project -
3 PVDS (East of Barkentine) -
Filtration Svstems
12 Catch Basin Filtration Devices 418,255
2 30502 PVDW Catch Basin 8,600
Other Projects
Mccarrell Canyon Interim,
2 Barkentine/Seacove 135,000
Mccarrell Canyon Interim, Gabion & Timber
2 Walls 119,213
Palos Verdes Bay Club Interim
2 Improvements 185,000
10 PVDS Salvation Army Outlet 26 ,000
6 Bronco Drive 66,000
5 Noble View Canyon 27,000
12 Citywide Interim, Other 7,400
City of Rancho Palos Verdes
Storm Drain Plan Through FY17-18
f (Memo only:)
(A less B)
FY'f2..Jl3 Expected
FY12-13 Spent or Carryover FY13~14
Budqet Committed FY13-14 5YRModel
17,949,603 16.466,493 1,483 ,110
555,440 2.45 ,:114 3 10, 126
1,323,665 1,135,228 188,437 329 ,881
242,500 242,500
485,000 485,000
446 ,000
73,000 5 ,000 68,000
Attachment A
I
Total
Budgeted
FY:14-16 Ff1S-16 FY.1~17 '17-18 Projected
'SYRM.odel S)(R Mddel 5YR,MO,del SJffl li{Q.d_el By Project
7,487,716
1,403,500
417,361
19,271,818
-
570,000
-
-
532,000
174,723
210,000
59,700
130,000
80,000
317,792
335,278 340,836 347,653 350,000 4,330,440
446,728
-
485,000
440,000 440,000
-
446,000
491,255
8,600
135,000
119,213
185,000
26,000
66,000
27,000
7 ,400
1
-
3
4
Prior
I Years'
Pai'd
ft'Y05..06'Thfll
Area FY1M2
10 Alida Place Storm Drain Relocation 98,480
3 Tarapaca Landslide Study 6,377
6 PVDE Engineering Reserve 20,360
6 PVDE Inlets -
10 Mossbank Storm Drain Rehabilitation 245,885
4 PVDS @ Altamira Canyon -
5 Via Canada 89,334
11 Marguerite Open Channel -
Miscellaneous Repairs & Maintenance
12 Miscellaneous Repairs 145,470
Storm Drain/Filtration Maintenance (includes
Hawthorne, Montemalaga & Video
12 Inspection/Cleaning) 605,614
Subtotal Proje~t & Maintena n~ Costs 1~8 6Q_,9 1 0
12 Purchase of Push Camera 11 ,813
12 Admi nistration (contract/staff engi neer) 910,953
12 Drainage Master Plan Program 22 ,211
12 Storm Water Enterprise Asset Registry -
12 Asset Maintenance Management System -
12 Hydrologic, Hydraulic & Pollutant Modelling -
12 Analysis & Prioritazion of Deficiencies -
12 Capital Improvement Programming -
Tofal ,Pron ra m Costs 16,8 05_,88_7
City of Rancho Palos Verdes
Storm Drain Plan Through FY17-18
l (Memo only)
(A less B)
FY12-13 Ex~cted
FY12-13 ~tor Carcyo ver FY1~'ti4
BudQet Committe.d FY13-14 5ffRMl>llel .
50,000 50,000 350,000
545,448 103,095 442,353 229,727
21 ,224,656 17,955,130 3,269,526 1,355J60Q.
148,618 1 54-,382 (5,764) 157,080
727,789 727,789 30,000
22, 101,063 18,109,512 3,991,551 f.54i,689 <
I I
I I
F'i'1~1~ FY15-16
S.¥RlMOdel 5YR:.M.Odel
237,518 245,544
11 1,0'!f2~J:9li 586 38J)'
161,792 166,646
30,000 30 ,000
1,204~588i 78'3 10 26,,
Note: This schedule reflects actual costs and does not include depreciation or capitalization of storm drain improvements, which are
included in the City's financial statements. I I
Attachment A
I
Total
Budgeted
FY16-1'i' FY17·1 8 Projected
SYR_ M_®el 5¥R<MOde l By Project
98,480
6,377
20,360
-
245,885
-
89,334
400,000
145,470
250,455 250,000 2 ,364,306
5 98.r108 600 0 00, 41 ,238,459
11,813
171,645 175,000 1,891,734
30,000 30,000 900,000
-
---
-
7 99,753 8DS10 0D 44,042,006
1
-
3
5
RPV Capital Improvement Plan -Unfunded Projects
Potential Safety City Council Cost Range Attachment B
Identified Funding Sources Project Page Funding Goal Priority Minimum Maximum
~,,iti~l!f 1.llllli•i11i:::i:::::1::::::1::i:1:1::::::_:.]:1·1i::1u1:::1ii:11ii:1f ir1r1111n1~1ii:i1:ii1:1:i1ir1~:ui1=i:~i:;::i::=:~l::1'l!i=::1l:l1:==i:i:i:·::u1:::1:1:r;1i:i=::i:i::i1i11~1:1:1::::::~:i:1:::11::1i::i=:ii;::i:::1i:::::::i:1:1.::
Citywide ADA Transition Plan
lmolementation
Point Vicente Park Communitv Center
Storaqe Yard Relocation
Solar Park Systems for Hesse Park
Buildinq
ICHawthorne Blvd. to Drvbank Dr.)
Hawthorne Blvd. Median Improvements
i(Via Rivera to Citv Hall)
Lower Point Vicente Park Access
Modification Project (PVDW at PVIC)
Operational Improvements at Crenshaw &
Crest
Crenshaw Blvd Extension Parking
Improvements
Hawthorne Blvd. Right of Way
Beautification
Hawthorne Blvd. Bike Lane Gap Closure
Traffic Safety Improvements -PVDE at
x x
x
x
x x
x x
x
x x
x x
$4,900,000
$3,000 000
$300,000
$350,000
x $500,000
$250,000
x $250,000
x $470,000
$125,000
x $2,200,000
$1,200 000
$4 900,000 Limited CDBG funds
$160,000 Ginsburg Donation for
$8,000 000 "Performina Arts" buildina.
$1,000,000
$350,000 Potential arant fundina
$500,000
$250 000
$300,000 Potential arant fundina
$520 000 Potential arant fundina
$150,000
$2,600,000
$1,500,000
$200 000 $300 000 Potential arant fundina Miraleste Drive x x x :~~~{ .. . M· --~---i· .:~;.·_·jj:·: ·i . .-·jj: m. ·ij· ·ru·:@m~~~rn~=:=t-llit~~mf:~~f:mt~rn~~?rnt~ru@;ru=trn~~tm~~: t-&:~~~-.1. ~tili}:.t:ft=~~2t~rntf:&f:~tllitt-fil=~rrnt:~~~rn~~~f:~~~ :::-g.;f:t-ill:tf:@f:~~~tt~~r~filr:t:~rn~=rl= f;gt~=ill=f:~~ill~~~~ill~{~lli~rrn·~ffrn~)m~t:~m~~tm~~rn~t~rn~~*-ra=~~rn.~trn{~=rnt{:m~~~rn/~ .. m=~ ~ru~~r-ru;:tru=~~mf:~f~==tm~~~m~~=~rn:f:f:r-fil~:~~~ ~rn-~till:~~~=llit:~~~ili~t~ili~~filt~&~~~ilim@~lli~~~filr~~WJ:t~!:fil~=~~lli~t@:t:tg=~~~~~m~f:f:~rn~till~~f:~~rnt~~rnt~~rn~~~~m~t:~~~rntj~oo~~~r
$1 000,000 $1 100 000 Potential Rule 20A fundina Utilitv Underaroundina at 25th Street
Utility Undergrounding at Entrance to
PVIC
Utility Undergrounding at PVDS and
Terranea Wav
---~ ·:'.) .. ·. J .. ~Mii=:=tf:nn=:=Mii==t:=::+:::t::: {JJttt:@w:=Hm::WHf
Altamira Canvon
Interim Altamira Canvon
Paintbrush Canvon Drainaae
PVDE -Miraleste Canvon
or,:···· ..
Installation of New Dewaterina Wells
Rehabilitation of Dewaterina Wells
Instrument Wells
Restroom at Del Cerro Park
Gatewav Park Develooment Proiect
Grandview Park lmorovements (Phase 1)
Lower Hesse Park Improvements (Phase
1)
Preserve Trail Plan -New Trail
lmclementation
Lower Point Vicente Park Improvement
Project
Sunnvside Trail Segment Proiect
Coast Vision Plan -
Trailhead/Overlook/Vista Point
Development
Tma-JS::1MfflMi.®.::M~oiU?:::=L:::: u::::::: t:: :t:
x
x
x
$150 000 $200,000 Potential Rule 20A fundina
$150 000 $200 000 Potential Rule 20A fundina
x $1,250 000 $5,000,000
x x $356 000 $356,000
x x $2,568 000 $2,568 000
x x $2,500 000 $3 200,000
x x $2 700,000 $3 300 000
x x $255 000 $255,000
x x $1634000 $1704000
$121 000 $121 000
$250,000 $300,000
$450,000 $475 000 Potential arant opportunitv
$635,000 $635 000
$660,000 $720,000
x $150 000 $150,000 Potential arant oooortunitv
x $2 400,000 $2 400 000 Potential arant opcortunitv
$400 000 $450,000
$100 000 $130,000 Potential arant oooortunitv
)1a-,=;su~=to.o.: :=::::=:~:iu.1~um.Qf=tfr:@rrn=:@=:t t=:t::==::=:~:=:tt=:=:t==::=:t::::t:::=:
1-36
CITY OF RANCHO PALOS VERDES· 2013 FIVE-YEAR FINANCIAL MODEL EXHIBIT C-1
CAPITAL IMPROVEMENT PROJECTS FUND EXPENDITURES
CIP FUND PROJECTS l.11f#Ilmtr 'I ~~~;.~: l~~-~l~iW ••• Iii~ ·11~~m~i!FUNDINGSOURCE l
Street Infrastructure
FY09-10 Arterial Street Rehab (PVDS/PVDW) 2,202,336 Measure R/Prop C&A/STPUCIP Reserve
No. City limit) 2,380,000 Measure R/Prop C&A/STPUCIP Reserve
Future Arterial Street Rehab Projects 70,000 2,630,000 70,000 2,730,000 1,500,000 !Measure R/Prop C&A/STPUCIP Reserve
FY09-10 Residential Street Rehab (PVDS Area) 1,445,693 General Fund/TDA Article 3
(Crenshaw/Crest Area) 193,611 7,309 1,512,691 General F und/TDA Article 3
FY11-12 Residential Street Rehab
,(Hawthorne/Silver Spur Area) _____________ _j_____________ I 1,677 ,697 I ----------------------------------J~e_neral Fund/TD A Article 3_
FY 12-13 Residential Street Rehab (Hawthorne
Area, Crest to Grayslake) I I 1,611,015 I I General Fund/TDA Article 3
(Eastview/Peninsula Verde Area) I I I 1,900,000 !General Fund/TDA Article 3
Future Residential Street Rehab Projects I I I 2,100,000 1,800,000 1,800,000 2,100,000 !General Fund/TDAArlicl~ 3
Pavement Management Plan Update I I 120,000 I 120,000 ICIP Reserve
~~~~~~~~~!n~~~%~~f=====~---1T,9Tu-· 1!::~~~ ~---'!?1·~~()-~---------------------------------... ----------------~;~~~1f~'tfr:==--------
Traflic Signal Synchronization -Hawthorne Blvd t-6,007 f 779,525 Grant/GIP Reserve
PVDE -Early Action Safety Improvements I 6,886 I 273, 114 I IGranl/CIP Reserve
PVDE -Headland Safety Improvements I I I 41,700 500,300 IGranl/CIP Reserve
Hawthorne Blvd -Pedestrian Improvements I 4,419 139,818 I 1,282,763 I IGranl/CIP Reserve
PVDS -Bikeway Safety Project I 6,755 360 I 793,885 I IGranl/CIP Reserve
PVDS -Realign East End of Landslide I I I 500,000 ICIP Reserve
IPVDS _Landslide RoadWifyRealignment and I I 245,000 3,510,000
Drainage I CIP Reserve
PVDE -Multi Modal Improvements 3,200,000 Grant/GIP Reserve
Western Ave -Traffic Improvements 3,200,000 !Outside Agency Contrib/CIP Reserve
--220:2=--------· --------------·----
,759 103,216 I 36,000 I !General Fund/GIP Reserve
pgrade I 270,463 5, 145 I I !General Fund/EET
-yan Park Southern Entrance Road -Design I 10,353 I 229,0'l r 1 !GIP Keserve
Ryan Park Parking Lot Repair (CalWater Damage) I I 29.
--· -· · 1provements I I 267,:nL I !GIP Keserve
!Abalone Cove Shoreline Paik ~·sraTfBulliling,
Restrooms & Driveway
Eastview Park Playground Improvements
California Coastal Trail
Salvation Army Trail
Bronco, Martingale & Grayslake Trails -Design
Gateway Park Development
Dog/Skate Park Analysis
59,355
41,077
5,217
Pt. Vicente Blufflop Drainage Control I 3,970 I 76,030 'o-ce.;11rron1E:5ta!ess1Umop-orairi8Q6cantr-01 ____ --------------------,-----22:0001 ________ __
Quimby
Knabe Measure A Grant/GIP Reserve
Grant/Cl P Reserve
Quimby
Quimby
Grant/GIP Reserve
General Fund
I Cl P Reserve
CIP Reserve
Trump Beach Life Guard Station Telephone Servicej 6,410 1,215t-J__ jCIP Reserve
"Misc Pro]eCI DesiQii------------------------------------1 15,ooo I 10,006____ 10,000 ____ 10,000--To,ooo-----;io;Doo-c1P interest Ea~ings ----------------
1
-
3
7
CITY OF RANCHO PALOS VERDES -2013 FIVE-YEAR FINANCIAL MODEL EXHIBIT C-1
CIP FUND PROJECTS
Buildings/Facilities
ADA Transition Plan Projects
Hesse Park Drop Ceiling Retrofit/Replacement
[City Hall Community ROoml'.)ropCemng-----
Retrofit!Replacement
City Hall Cabling Conduit
Hesse Park/Ryan Park Fiber Optic Cabling
Upgrade
Pk/Ladera Linda
Ladera Linda Community Center Replacement
RPVlV Studio Restroom
Sewer Infrastructure
Palos Verdes Drive East Sewer Relocation
Basswood Avenue
West General Street
Abalone Cove
Ironwood Street
PVDS at Schooner Drive
PVDS at Sea Cove Drive
Ginger Root Lane
Malaga Canyon
CAPITAL IMPROVEMENT PROJECTS FUND EXPENDITURES
t ~;r:I•• llfl ·1 ~~~;.~; 1r11flH~}~y1~ rill a; -~~)'~l'°IFUNDING SOURCE
30,517
8,031
4,008
96,550 113,982
50,000 I 325,ooo 250,000 50,000
60,000 260,000 -------!--------------------------------------· -
175,000
38,000
114,000
122,000
567,000
247,275
603,000
EET/CIP Reserve
Building Replacement Fund
General Fund
GIP Reserve
GIP Reserve ---+----
GIP Reserve
1,600,000 GIP Reserve
4,000,000 GIP Reserve
GIP Reserve
GIP Reserve
GIP Reserve
GIP Reserve
GIP Reserve
GIP Reserve
GIP Reserve 199:000·------------------. -------------------------
GIP Reserve
203,000 GIP Reserve
407,000 GIP Reserve
GIP Reserve ~scellaneous Projects L __ _J_ __ 4_6_5~,0_0_0 ______ -+-----·
01ti-erl>roject5and-A!lmiliistration _________ _
Infrastructure Report Card
FEMA Reimbursement 1--------------------------
Crenshaw Utility Undergrounding
Drainage Area Monitoring System
Storm Water Quality Regional Project
New Landslide Dewatering Wells (2)
~ngineering and Grant Administration
Total CIP Fund Expenditures
NOTE: The Total Expenditures above
agree to Total CIP fund expenditures
on Page 8 of the Model.
49,500 I !General Fund
__ _?_g,~~-----------L ___ l_.!)~1-l1.200.ooo ________ ·---------------· -----------f~~~~:_~~~--
200,000 300,000 ICIP Reserve
200,000 300,000 ICIP Reserve
170,000 170,000 85,000 ~Reserve
-------------!---50,000 50,000 50,000 50,000 50,000 lc1P Interest Earnings 7 ,325 21,548 20,000
2,385,306 I 2,939,431 13,476,429 8,029,975 I 9,880,000 I 6,495,300 I 5,055,ooo I 12,460,ooo
---
1
-
3
8
CITY OF RANCHO PALOS VERDES -2013 FIVE-YEAR FINANCIAL MODEL EXHIBIT C-2
CAPITAL IMPROVEMENT PROJECTS (CIP) RESERVE RECONCILIATION
lfl]·g~ ~W 11W I ~~~~~: IR~l·llfi] rv• l'I~· I'~;>
Beginning Balance 0 7,207,180 7,081,596 11,649,780 115,406,940 16,822,269 6,955,394 4,563,494 6,916,494 9,282,694
Transfer from General Fund (Establish CIP Reserve) 13,000,000
Transfer from General Fund (Equal to TOT) I 85,245 1,954,507 2,640,368 3,349,015 I 3,611,074 13,679,700 3,757,000 3,835,900 3,920,300 4,010,500
Transfer from General Fund (Other Projects) Timing Diff/Savin~4,077,574 (1,735,682) 2,017,636 554,061 I (3,479,381)
Interest Earnings I 44,361 30,220 32,485 36,780 I 42,300 I 20,400 33, 100 44,800 200,900 366,700
~!;,~~;,""!"~~--------. _J?~~~~L __ c21,548) ~~~:~~~ j~~~~---t~~~~~~ ~~~:~~~~ .. ~~~1~~~ -~~~~JI~~~~
FEMA Reimbursement (59,221) (3,541) ·--·-·--·---··--·--·· (37 4,a29r-· ·-----·--·-·-·-·---· · · ··--·--·--··-Upper Filiorum Purchase
Lower Hesse/Grandview I (55, 759) (60, 716)1 (36,000)
Eastview Playground I (59,355)1 (35,565)
California Coastal Trail I (41,077)1 (18,923)
Gateway Park Development I I (40,000)
Ryan Park Restrooms I I (267,512)
~~~n:a:::~:~~~~;~~b~::~i:~-·--·--·-··--··--··-··-··---·-··-t------··-·-·-· · ·--··-··-··--··--··-··----+("'"'8,...,2~(~"'":"''.-=-~-=-~cc:~'+-------·--··--·--·-·-----------··-·--··-·----··--··-··-··-··--·--··---1
~~'": ==-t-=~-====== +--~rOO) (~~~:~~~ \1±_=,=0)~
PVDS -Landslide Roadway Realignment and Drainage I I I (245,000) (3,510,000)
:~~~~~~~~=Mr~1~~7~~~~~~~~~st~--. -------+--· ----· ---· +-·----- ---· ... ·-· -------_(6
-4(),()0_g)___ ( 1,600, 000)
ADA Transition Plan Projects (25,000)
Basswood Avenue Sewer (114,000)
West General Street Sewer (122,000)
(567,000)
Ironwood Street----·--·--··--··--··-·-----··---------·--t-------·-·-·· -----1·--··----·-·-4-(247,275) -·-·
Abalone Cove
gf~:Cs~~= ~=~-~~---1~2.~:~~-=~
Hesse Park Multi-Purpose Room AudioMsual Upgrade I I I (175,000)
RPVTV Studio Restroom I I I (38,000)
Fiber Optic -Ab Cove Sewer Lift Sins/Shoreline Pk/Ladera Linda (1,600,000)
Ladera Linda Community Center Replacement -··--·--·--··--··-··--··--··--·--+---·--··-··--·-·-· ··---··--··--·----·-Drainage Area Monitoring System -·--·-··--·-·----·--c2oo~ooor-·C300, ooo) (4,00~!()Q.0.2
Storm Water Quality Regional Project (200,000) (300,000)
~l;~~~~i;;oi;::t!r~~:~&'~u;-(2) __________ +---------------------------------------+-------h-rto,ooo) (170,000)-(85:050)----------------------~~°-"~q()J
Ending Balance 1,201,180 I 1,081,596111,649,180 l15,4o6,94o I 6,822,26916,955,3941 4,563,49416,916,4941 9,282,694 I 4,989,894
1
-
3
9
User Fee Rate History Attachment D
Note: CPI Index based upon LA -Oranae -Riverside CPl-U (Urban Citv) Annual Chanae
User Fee Estimated
Index User Fee Incremental
(Increase Rate Estimated Cumulative
% limited to Maximum Adopted Annual User Fee Increase Annual
CPI Change 2% User Fee by City Revenue -Not Revenue from
Index CPI annually) FY Rate/ ERU Council Actual CPI
Feb
2006 rate enacted by the voters) $ 86.00 $ 86.00 $ 1, 118,439
2007 214.76 3.5% 2.0% FY07-08 $ 87.72 $ 87.72 $ 1, 140,808 $ 22,369
2008 221.431 3.1% 2.0% FY08-09 $ 89.47 $ 89.47 $ 1,163,624 $ 45,185
2009 221.439 0.0% 0.0% FY09-10 $ 89.47 $ 89.47 $ 1,163,624 $ 45,185
2010 224.62 1.4% 1.4% FY10-11 $ 90.72 $ 90.72 $ 1, 180,340 $ 61,901
2011 229.729 2.3% 2.0% FY11-12 $ 92.53 $ 92.53 $ 1,203,946 $ 85,507
2012 234.537 2.1% 2.0% FY12-13 $ 94.39 $ 92.53 $ 1,203,946 $ 85,507
2013 239.753 2.2% 2.0% FY13-14 $ 96.27 ? $ 1,203,946 $ 85,507
14.6% 11.4% $ 431, 161
Conservative estimate of user fee collected over 7 vears $ 9,378,673
Estimated spent or committed in the WQFP fund through 6/30/2013 $ 19,224,954
Percentaae spent or committed in the WQFP fund from user fee collected 49%
1-40
Attachment E
FINANCIAL ANALYSIS & ECONOMIC OUTLOOK
Recognition of Revenues & Expenditures
Governmental Funds
The City recognizes revenue in governmental funds when the revenue is both
measurable and available. Measurable means the amount can be determined.
Available generally means received within 60 days of the fiscal year end of June
30th. Expenditures in governmental funds are recorded when the liability is
incurred.
Enterprise Fund and Internal Service Funds
The· City maintains 1 enterprise fund (Water Quality Flood Protection) and 3
internal service funds (Equipment Replacement, Employee Benefits, and Building
Replacement). Revenues are recognized when they are earned (even if not
available), and expenses are recorded when the liability is incurred.
Financial Policies
The City's financial policies are summarized below, and are available in full text
on the City's website.
Reserve Policy
The requirements and status of City Council Policy No. 41 are summarized in the
following chart:
~~-m·'y/,
50% of budgeted annual
General Fund expein~itur~l:J· 9,846,623
One year of road maintenance in the
Street Mciint~nance lcin~_~l_i_de area of the City. ~2~,000
Emergency projects of $50,000 and
·future maintenance endowment of
$84,969; which grows each year by
$10,000 plus accrued interest, as
. required by the City's Natural
Habitat Restoration Communitie~Conse_r1fcition Plan. 145,253
. Nonspendable developer
Subregion 1 endowment. 750,000
Emergency or future projects.
Funded with General Fund money
equivalent to annual transient
occupancy tax and prior year
falA'.lrable General Fund expenditure
CIP vari_(ince (if a_ppliccible). 3,000,000
Estimated replacement cost of
Equipment Replacement capitalized equipment held. 1,970,266
. 9,8~9,354 13,732
1,094,180 572,1~9
173,092 27,839
764,659 14,659
6,955,394 3,955,394
1,812,990 (157,276)
1-41
Attachment E
Based on assumptions used in the City's 2013 Five-Year Financial Model, the
Equipment Replacement Fund balance is expected to grow by about $50,000
annually, which should restore the fund to reserve policy level by FY15-16.
Annual Investment Policy
California Government Code Section 53607 allows for the governing body of a
local agency to delegate the authority to invest its funds for a one-year period to
the treasurer of the local agency. The City Council and the Improvement
Authority Board annually adopt investment policies that delegate investment
authority to the treasurer of the City and Improvement Authority, and outline the
types of investments the treasurer is authorized to make. The investment policy
is in compliance with the local agency investment requirements set forth in
California Government Code Section 53601.
Five-Year Financial Model
City Council Policy No. 18 requires analysis, update and review of a Five-Year
Financial Model as part of the annual budget process. The Finance Advisory
Committee (citizens committee appointed by the City Council) annually reviews
the Model. The Model includes the funded projects from the Five-Year Capital
Improvement Plan, and Year 1 of the Model is the proposed budget for the
coming fiscal year.
Five-Year Capital Improvement Plan
Although not required by law or City Council policy, it is considered a best
practice to produce a five-year capital improvement plan document as a guide for
the efficient and effective provision of resources for improvement and maintaining
public infrastructure and facilities. The Five-Year Capital Improvement Plan is
updated annually during the budget process, and incorporated into the Five-Year
Financial Model. The Plan document is included as an appendix in this budget
document.
Purchasing Ordinance
The City's purchasing policy is documented in Municipal Code Chapter 2.44,
referred to as the Purchasing Ordinance. A summary of the policy follows.
• Purchases of supplies and services of more than $500 require a City
issued purchase order.
• Purchase orders are not required for payments for utility service (e.g.
electricity), leases, and credit card purchases and payments.
• Purchases of supplies and services of more than $5,000 require informal
bids.
1-42
Attachment E
• Purchases of supplies and services of more than $25,000 require formal
bids and a contract approved by the City Council.
• Licensed professionals such as attorneys, architects, engineers, and
financial advisors are exempt from bid requirement$.
• All work performed by vendors on private property, or work with increased
liability requires a City contract for all amounts.
• The City Manager can approve contracts for amounts up to $25,000.
• Purchases for Public Projects, as defined by California Code Section
22002, are subject to bid and contract requirements set forth in the
California Uniform Public Construction Cost Accounting Act.
Travel and Meetings
To assure the needs of the City are being met while limiting unnecessary
expenditures, the City Council adopted Policy No. 16 outlining the procedures for
travel and meeting expenses incurred by the City Council and its
Committees/Commissions.
Midyear Budget Review
Per Municipal Code Section 3.32.130, the City Council is to be provided with a
midyear status report on the budget and any Staff recommendations. The report
is typically presented to City Council in February of each year.
1-43
Attachment E
Overview of Sources & Uses
The Cityw ide budget includes all funds of the City and its component unit, the
Improvement Authority.
City of Rancho Palos Verdes
FY13-14 All Funds"'
in millions
Other Grants & Recreation & Parks
$ Contributions $1 .7
1.3, $1 .7 /
$35.0 ;--~~~~~.--~~~~~~~Ir--~~~~~~~~~~~~
( .
$30.0 +--I
$25.0
$20.0
$15.0
$10.0
$5.0
so.o I---
The General Fund is the primary operating budget of the City and accounts for
about three-quarters of the City-wide budget, with the remaining portion primarily
accounting for restricted funding from outside sources . As such, the financial
analysis presented herein will focus on the General Fund.
1-44
Attachment E
General Fund Revenue vs . Expenditures -A Ten-Year History
Revenue vs. Expenditures
-Reveoue
-EllPendhures
City Council and Staff have worked together to manage costs, balancing
expenditures against revenue . Both General Fund revenue and expenditures
have increased an average of 6% annually, enabling the City to fund
infrastructure improvements with excess revenue.
In FY06-07, the City's investment earnings rate increased from 3.85% to 5.12%,
Pt. Vicente Interpretive Center opened generating new rental and gift shop
revenue, and the City completed a one-time exchange of Proposition A monies
for $0.8 million of General Fund money. Interest earnings steadily decreased
after FY06-07. However, in FY09-10 the Terranea Resort opened bringing in a
significant amount of new tax revenue .
For the discussion of individual revenues and expenditures below, 10-year
historical data has been adjusted for inflation to provide a more accurate picture
of growth or decline.
Primary General Fund Revenues
The revenue sources discussed herein are summarized below and account for
82% of total General Fund Revenue .
'f ., .. · :'. .: ,: '.'.,~'.:; ' ,:; y ~:;;,;.FY13-14 ~-:
Property Tax 43% $10, 751 , 000
Transient Occupancy Tax 15% 3,679,700
Utility Users Tax 10% 2,420,000
Franchise Tax 7% 1,779,000
Sales Tax 7% 1,640,000
Other Revenue 18% 4,464, 990
iTotal General Fund Uses , :-.;®~".·$24 i 690
1-45
Attachment E
Property Tax Receipts*
!$12 .--~~~~~~~~~---------,
~
1$10 ~-----:::::;;;;-----~~----...-,=:::===;
$$ ·------------------·
S2
Property tax is the City's largest source of revenue. The City receives an
approximate 6% share of the 1 % property assessment. Property tax revenue
has grown an average of 5% annually over the last 10 years. In 2004, the
California legislature established accounting maneuvers to help solve state
budgetary problems. The state action impacted the City by replacing a portion of
sales tax and vehicle license fee revenue with additional shares of property tax
beginning in FY04-05. On average, property assessments are much lower than
property values in the City; and the City benefits greatly each time a property is
sold and re-assessed. Property tax is expected to grow by another 3.67% for
FY13-14.
Transient Occupancy Tax*
Cll 4 .-------------~
i • 3 >-----------------,-
Terranea Resort, the primary source of Transient Occupancy Tax (TOT)
revenue, opened in 2009. Instead of increasing the operating budget, the City
Council directed that this General Fund revenue be used as a source of funding
for repairs and improvements to the City's infrastructure. Now that the Resort
1-46
Attachment E
has been open almost 4 years, Staff has conservatively forecasted that the
growth rate of TOT will slow. For example, growth from FY11-12 to FY12-13 is
tracking to be about 8%; yet prior year growth was about 27%. The FY13-14
budget includes a conservative assumption that TOT will increase by only 2%.
Users Utility Tax* ! 3.0 r
i 2.5 ~
tit
2.0
1.5
1.0
0.5
,~
The 3% utility users' tax is levied on customers of water, electricity and gas
utilities, as well as telephone services. Weather conditions cause minor revenue
fluctuations; but this source of General Fund money has remained fairly
consistent over the last ten years. Staff has included a 1.5% increase in the
FY13-14 budget based on a recent water rate increase .
Franchise Tax*
~ 2.5 ~----------------.
~
! 2.0 r -=================::::==1 1.5 ""~
1.0 ·--------------------!
0.5 •------
Franchise tax is levied on the prov iders of utility and cable services in exchange
for use of the City's right-of-way. The City 's revenue has steadily increased over
1-47
Attachment E
the last ten years due to increasing utility rates and the expansion of cable
services. The FY13-14 budget does not include an assumption for any increase
in this revenue source .
! 2.0
i
w 1.5
1.0
0.5
Sales Tax Receipts*
The City 's primary sources of sales tax include restaurants , service stations and
food markets. As part of the state action in 2004 mentioned previously , in FY04-
05 the City began receiving an additional share of property tax in lieu of 25% of
its sales tax revenue. Unlike other cities that heavily rely on sales tax from big-
box stores and auto malls, the City 's sales tax was only minimally impacted
during the recession that began in 2008. With the opening of the Terranea
Resort in 2009 , the City's sales tax grew significantly. In FY11-12, there were
substantial decreases in sales of wholesale building materials , business to
business heavy supplies, and used auto sales. Although these sectors
comprised a small portion of the City's sales tax revenue, the impact was
substantial enough to cause an overall 5% decrease in total sales tax revenue.
Based on information from the state, the FY13 -14 budget includes an assumption
that sales tax will grow by 5.6%.
1-48
Attachment E
Primary General Fund Uses (Expenditures & Transfers)
The expenditures discussed herein are summarized below and account for 81 %
of total General Fund Uses.
~ 7
0 E 6
:&
5
3
2
1
Wages & Benefits
Infrastructure Improvements
Sheriff Contract
Park & Building Maintenance
Legal Ser"1ces
Other Expenditures & Transfers
i:otal General Fund Uses
FY13-1r4
31% $ 7,843,665
22% 5,553 , 114
17% 4,254,200
8% 1,947,730
4% 1,045,000
19% 4 ,954 ,350
100% $2$ 598,059
Employee Wages & Benefits *
•Wages
•Benefits
During FY0?-08 and FY08-09, the City Council authorized the addition of 9 full-
time employees. Many of the additions were based on recommendations from
an outside organizational assessment that concluded certain City functions were
underserved. Other additions included providing building inspections in-house
versus outside contracting. No full-time employees have been added since
FY08-09 . In FY08-09 and FY09-10 , the City expended a total of about $2.4
million to pay off the pension side-fund liability (the City's unfunded pension
liability upon entering an employer risk pool in 2003).
1-49
Attachment E
Infrastructure Improvement Funding*
8 ~--------------~ s 7 --------------~-= i 6 +----------
4. 1----1
3
2 ,__ ____ ---------'-S---_.
The General Fund has historically provided partial funding for infrastructure
improvements; including storm drain projects, park projects, and residential street
rehabilitation. Other infrastructure funding has come from grants, transportation
taxes, and other restricted monies. Funding varies year to year based on the
availability of General Fund money and project requirements. During the four
years beginning with FY04-05, the General Fund transferred a total of $10.3
million to the Water Quality Flood Protection Fund to begin a program of storm
drain rehabilitation, and to fund the $7.5 million Mccarrell Canyon storm drain
project. Since FY10-11, the General Fund has transferred all transient
occupancy tax revenue (total of $8 million) to the Capital Improvement Projects
Reserve, which has since been appropriated to provide cash flow for the San
Ramon Canyon stabilization project until a financing decision is made by the City
Council.
Sheriff Contract*
! 5
i 4 1--------------,..~~~~========-=-~
2.
0 ,._,, __ ........ ~---~~~~--...._~--~"--~~--
/
The City provides police services through its contract with the Los Angeles
County Sheriff Department. The City has made minor changes to service levels
1-50
Attachment E
over the years. The FY13-14 budget does not include any service level
increases , and assumes a 2.4% contract rate increase.
Parks & Building Maintenance*
en 2.0 c:
~
i -1.5
1.0
0.5
The City contracts with outside vendors to provide parks and building
maintenance, which includes the maintenance of open space. Expenditure
increases in recent years are primarily attributable to the acquisition of additional
open space , aging facilities, and increased efforts to reduce fire hazards.
Expenditures are expected to increase by 2.3% in FY13-14 .
Legal Services*
"' 1.50 .------------------~
1 125 ~:::::::::=======:::::\ :I
0.75 , _______ _
0 .50 t------------------1
025 1------------------1
A large portion of the cost of legal services is driven by litigation, which is
unpredictable. The City has a history of vigorously defending itself. General
legal services (e.g. contract review, general advice, meeting attendance) have
remained fairly steady for a number of years, typically around $500,000 annually.
1-51
Attachment E
Financial Ratios
Net Operating Results per Capita
Net operating revenue and expense are calculated from the City's full-accrual
government-wide financial statements, and exclude amounts for capital related
transactions.
FY10-11 FY11-12
Population 41, 766 41 , 897
Net Operating Rewnue $29 ,085,896 $29 ,231 ,403
Net Operating R&venu-e l'!er CaP-ita ·$ 696 $ 698
Net Operating Ex pense $21 ,602 ,284 $21 ,961 ,529
Net Ope.rating Ex ense er Ca i13 $ 517 $ 524
Current Ratio
The current ratio is calculated by dividing current assets by current liabilities, and
measures the City's ability to pay short term obligations.
14
u
10
Current Ratio (Current Assets/Current Liabilities)
8 1----
6 ----
2
In FYOB-09, the City used more than $6 million of cash to construct the Mccarrell
Canyon storm drain improvement. Most recently the City has been building its
cash reserves in anticipation of providing cash flow for the San Ramon Canyon
stabilization project.
Quick Ratio
The quick ratio, or acid-test ratio, is calculated by dividing cash and investments
by current liabilities, and is the most conservative measure of the City's liquidity.
1-52
14.0
12..0
10.0
Quick Ratio (Cash/Current Liabilities)
ao 1----~~======::::=-~------+--J
6.0 -------------..0---------L
4.0 1--------------=------t
2 0 j----------------------1
Attachment E
The trend line for the quick ratio is very comparable to the trend line for the
current ratio, as cash and investments typically accounts for about 95% of the
City's current assets.
Cash Inflow/Outflow
The following graphic illustrates the General Fund cash inflow and outflow during
the fiscal year. This example is based on FY11-12, and is representative of
normal activity.
General Fund Cash Flow
Ill 5
8 = 4 I ..
2 t--f--......._\--~'---->,__-u---1--~---Inflows
1-..!'.'.:_ _ __3;:::;:::;~::=_---'t:::-L.~::+-_L, -Outnows
(1) t---------------->~•
(~...___ ____________ ____.
The City's largest revenue source, property tax, is primarily received in
December and April each year. Peak outflows are unpredictable, usually based
upon infrastructure projects currently being constructed. The City's General
Fund cash reserves are maintained at a minimum level equivalent to 50% of
annual expenditures, due in part to the large biannual receipts of property tax.
1-53
Attachment E
Improvement Authority Summary
The Rancho Palos Verdes Improvement Authority maintains landslide mitigation
facilities constructed by the former Rancho Palos Verdes Redevelopment
Agency. Maintenance activities are segregated into 2 different geographical
locations; and therefore, accounted for in 2 separate funds.
Maintenance within the Abalone Cove landslide area is funded in accordance
with the 1987 Landslide Settlement Agreement between the City, the former
Redevelopment Agency, and Los Angeles County. The agreement required that
$1,000,000 of the original $10,000,000 bond proceeds from the County be set
aside as a non-spendable deposit from which investment earnings are to be used
for the aforementioned maintenance. Investment earnings in recent years have
not been sufficient to fund ongoing maintenance; and beginning in FY13-14,
these activities are expected to require a General Fund subsidy of $20,000
annually.
Unlike Abalone Cove, maintenance within the Portuguese Bend landslide area
has no independent source of funding. Therefore, the General Fund provides for
this maintenance. The expected General Fund contribution for FY13-14 is
$70,000.
Redevelopment Dissolution
Pursuant to state law, on January 31, 2012 all California redevelopment agencies
were dissolved. The Rancho Palos Verdes Redevelopment Agency (RPVRDA)
was originally formed in 1984 with the purpose to mitigate hazardous landslides.
Property tax increment was primarily used to repay debt to Los Angeles County
issued for the construction of landslide mitigation facilities. As required by
redevelopment law, 20% of the tax increment revenue was set aside to provide
housing for low and moderate income persons.
The former property tax revenue source is now distributed by the county twice
annually from the Redevelopment Property Tax Trust Fund (RPTTF) to pay
obligations of the RPVRDA, which include a $5.5 million debt to the county and a
$19.3 million debt to the City at June 30, 2012. Recognized obligations must be
approved by both an Oversight Board appointed to oversee dissolution activities,
and the California Department of Finance.
The City serves as the Successor Agency to the RPVRDA, and its Staff
administers dissolution activities. The Successor Agency recently received a
"Finding of Completion" from the state indicating that the Successor Agency has
complied with redevelopment dissolution law. This Finding will allow the debt to
the City to become a recognized obligation with future repayment from the
RPTTF. However, the debt to the City must be restructured to terms required by
the dissolution law. Staff expects that the restructuring will reduce the debt from
1-54
Attachment E
$19.3 million to about $11.8 million as of June 30, 2012. Small repayments of
this debt to the City's General Fund could begin as early as January 2014.
However, the timing and amounts are unknown; and no repayment amounts
have been included in the FY13-14 budget.
The City Council also elected to transfer the former redevelopment housing
assets and function to the City. The transfer of about $6. 7 million of long-term
housing notes receivable has been completed. The City will be required to use
the repayments from these receivables for affordable housing pursuant to
community redevelopment law.
The RPVRDA owned various parcels of land within the landslide area of the City,
including the Abalone Cove Shoreline Park and adjacent open space. During
2013, Staff expects to develop a long-range property management plan, as
required by the dissolution law. This plan may include a recommendation to
transfer the parcels to the City, which may result in settlement payments to other
taxing entities entitled to a share of property tax in the landslide area. The timing
and potential settlement amounts are unknown; and no such payments have
been included in the FY13-14 budget.
Successor Agency activities are accounted for in a private-purpose trust fund,
which is not required to have an adopted budget. Twice annually, the Successor
Agency prepares a Recognized Obligation Payment Schedule (ROPS) for
approval by the Oversight Board and California Department of Finance.
Distributions from the RPTTF are made pursuant to approved ROPS.
Additional detailed information about dissolution of the RPVRDA may be found in
the Notes to the Financial Statements within the City's June 30, 2012
Comprehensive Annual Financial Report (CAFR). The City's CAFR may be
viewed on the City's website at the following address.
http://www.palosverdes.com/rpv/finance/CAFR 2012/CAFR 2012.pdf
1-55
Annual Report
for the
Water Quality and Flood Protection Program
Storm Drain User Fee
For the
City of Rancho Palos Verdes
Los Angeles County, California
June 24, 2013
1-56
City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
TABLE OF CONTENTS
Certificates ............................................................... Pg. 1
Introduction .............................................................. Pg. 2
Cost Estimates ........................................................ Pg. 3
Annual Fee Rate Calculations ............................. Pg. 4
Sample Calculations ............................. Pg. 6
Assessment Roll ...................... Under Separate Cover
June 24, 2013
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
FY 2013-14 Annual Report
City of Rancho Palos Verdes
Storm Drain User Fee
The undersigned respectfully submits the enclosed report as directed by the City Council.
DATED: June 24, 2013
BYKn~
R.C.E. No. 50255
June 24, 2013
Page 1
I HEREBY CERTIFY that the enclosed Annual Report, together with Assessment Roll thereto attached,
was filed with me on the __ day of , 2013.
Carla Morreale, City Clerk,
City of Rancho Palos Verdes
Los Angeles County, California
I HEREBY CERTIFY that the enclosed Annual Report, together with Assessment Roll thereto attached
was finally adopted and confirmed by the City Council of the City of Rancho Palos Verdes, California, on
the __ day of 2013.
Q:\RPV\SD Fee Admin\FY 13-14\reports\SD Fee Rpt 13-14 24Jun13.doc
Carla Morreale, City Clerk,
City of Rancho Palos Verdes
Los Angeles County, California
H I Harris & Associates
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
INTRODUCTION
June 24, 2013
Page2
To insure a flow of funds for the Water Quality and Flood Protection Program, the City of Rancho
Palos Verdes established a user fee in September 2005. This Fee ensures a fair and equitable levying
of the costs of the Water Quality and Flood Protection Program.
Pursuant to Section 3.44.40 of the City's Municipal Code, at a public hearing, the City Council will
consider whether to collect the Storm Drain User Fee for Fiscal Year 2013-14 (July 1, 2013 through
June 30, 2014), and, if so, establish the rate per Equivalent Residential Unit for Fiscal Year 2013-14.
In making its determinations, the City Council will take into account the current and projected
revenues of the City for Fiscal Year 2013-14, including but not limited to, property taxes, sales taxes
and transient occupancy taxes; the current and projected expenditures of the City for Fiscal Year
2013-14, including, but not limited to, proposed expenditures in connection with the City's storm
drain system; the balance, if any, in the Water Quality and Flood Protection Program Enterprise
Fund; arid the current and projected General Fund reserves. In addition, the City Council will
consider any report and recommendation submitted by the Oversight Committee established by the
City Council in connection with the City's Water Quality and Flood Protection Program.
This report, as signed and presented to the Council for approval, has been prepared according to the
methodology and rates approved by the City Council in 2005.
The Storm Drain User Fee is levied under the authority of the California Health and Safety Code
Section 5471 et seq. (the "Code"). Payment of the fees for each parcel will be made in the same
manner and at the same time as payments are made for property taxes for each property.
This report contains the necessary data required to establish the annual fee rates and is submitted for
filing in the office of the City Clerk, where it shall remain open for public inspection.
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
COST ESTIMATE
June 24, 2013
Page3
The estimated annual costs to fund the Water Quality and Flood Protection Program are provided
below in Table 1.
Table 1 -Estimated Annual Costs
BEGINNING FUND BALANCE (7/1/13)
ESTIMATED REVENUES
Annual Fee Levy
Interest Earnings
City Contribution
ESTIMATED EXPENDITURES
Storm Drain Master Plan
Backbone Projects
Pipe Lining
Secondary Projects
Other Projects
Miscellaneous Repairs & Maintenance
Filtration Device Installation
Reserve for Anticipated Additional Costs
Administration (contract/staff engineer)
ENDING FUND BALANCE (6/30/14)
The ending fund balance constitutes a Reserve for Future Projects.
Q:\RPV\SD Fee Admin\FY 13-14\reports\SD Fee Rpt 13-14 24Jun13.doc
$493,788
$1,423,850
$1,500
$0
$1,425,350
$30,000
$0
$329,881
$506,000
$350,000
$229,727
$0
$0
$151,300
$1,596,908
$322,230
R I Harris & Associates
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
ANNUAL FEE RA TE CALCULATIONS
June 24, 2013
Page4
By definition, all properties that drain into the City's storm drain system use the storm drain system.
The amount of use attributed to each parcel is measurable by the amount of storm runoff contributed
by the property, which is directly proportional to the amount of impervious area on a parcel (such as
buildings and concrete). The more impervious area on a property, the more storm runoff the property
generates. Vacant, unimproved parcels are still in their natural states and do not contribute any
additional runoff to burden the system, therefore these parcels are not charged a storm drain fee.
Table 2 shows the estimated Impervious Percentages for single-family residential (SFR) properties of
various size ranges. These Impervious Percentages are the estimated percent impervious cover on a
property based on a ten percent data sampling of SFR parcels within the City of Rancho Palos Verdes
when the fee was initially adopted.
Because of the variations in condominiums and non-SFR properties, which include multi-family
residential, institutional (such as churches and private schools) and government-owned properties,
these properties were reviewed individually using the City GIS and Aerial photography to determine
the actual Impervious cover for each parcel.
Table 2 -SFR Impervious Percentages
Land Impervious
Use Percentaae SFR Size Ranaes
SFR1 74.0% 0.01 -0.16 acres (-1 sf--7,012 sf)
SFR2 58.0% 0.161 -0.20 acres (-7,013 sf--8,755 sf)
SFR3 48.5% 0.201 -0.28 acres (-8,756 sf--12,239 sf)
SFR4 41.0% 0.281 -0.54 acres (-12,240 sf--23,565 sf)
SFR5 34.5% 0.541 -2.99** acres (-23,566 sf--130,680 sf)
SFR6 n/a* 3.0 acres and qreater
* the actual impervious percentage is used for each parcel.
** the actual impervious percentage is used for SFR5 over 3/4 AC
if less than originally noticed.
The amount each parcel uses the storm drain system is computed by the following formula:
(Parcel Area) x (Impervious Percentage) = Drainage Units
The more Drainage Units a parcel has, the more storm run-off it generates, and the more it uses the
storm drain system.
It is often convenient to relate other land uses to a developed single family home, instead of working
exclusively with Drainage Units. Since 85% of the parcels within the City are designated as Single
Family Residential (SFR) parcels, and the median number of Drainage Units is 0.118 for all SFR
parcels, it makes sense to relate all parcels to this median residential property. Therefore, 0.118
Drainage Units is set equal to one Equivalent Residential Unit (ERU).
Parcels within the City that have runoff flowing out of the City without going through any City-
maintained drainage infrastructure are not included in this fee. There are also a number of County-
maintained pipes within the City. If properties drain exclusively to these pipes and the pipe system
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
June 24, 2013
Pages
does not include any City-maintained infrastructure, then they are not included in the fee. These
areas, which consist of approximately 3,04 7 parcels, are excluded from the Storm Drain User Fee.
For the purposes of this report, City-maintained infrastructure includes pipes, inlets, outlets, and
natural drainage courses, and is also referred to as the "City's storm drain system."
Inventory of Parcels
Table 3, below, provides a summary of parcels by land use and shows the total estimated Drainage
Units and ERUs for the City.
Land
Use Parcels
SFR1 1, 113
SFR2 1,900
SFR3 3,096
SFR4 2,804
SFR5 947
SFR6 10
CNDO 1,846
MFR 39
COM 46
INST 20
GOV 47
11,868
Table 3-Drainage Unit Summary Table
lmperv. Drainage
Acreaae Percent Units ERU Land Use Description
162.57 74.0% 120.056 1,017.4318 SFR: 0.01 -0.16 acres (-0 sf--7,012 sf)
349.85 58.0% 202.768 1,718.4219 SFR: 0.161 -0.20 acres (-7,013 sf --8,755 sf)
736.60 48.5% 357.307 3,028.0663 SFR: 0.201 -0.28 acres (-8,756 sf--12,239 sf)
1,105.56 41.0% 450.244 3,815.6321 SFR: 0.281 -0.54 acres (-12,240 sf --23,565 sf)
742.73 34.5%* 213.391 1,808.3983 SFR: 0.541 -2.99 acres (-23,566 sf--130,680 sf)
49.76 actual* 3.666 31.0677 SFR: 3.0 acres and greater
139.48 actual* 95.727 811.2726 Condominiums
53.69 actual* 41.736 353.6949 Multi-Family Residential
144.29 actual* 75.184 637.1524 Commercial
114.80 actual* 64.692 548.2371 Churches, Private Schools, Institutions
490.24 actual* 120.454 1,020.7963 Government-owned parcels
4,089.56 1,745.225 14,790.1714
*the actual impervious percentages have been used for parcels with these landuses
which includes SFR5 parcels> .75 AC
The parcel areas for condominiums are calculated by dividing the total area of the condominium
complex (which includes the common area) by the number of condominium units, and the total
imperviousness of the entire complex is attributed to each individual condo parcel in the complex.
(This divides the runoff of the entire complex to each of the individual units.) Because the
condominium common areas are taken into consideration in this manner, they are exempt from the
charge.
Annual Fee Rate
Table 4 provides the calculation of the Maximum Annual Fee Rate for FY 2013-14 and shows the
actual proposed Fee Rate.
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
Table 4 -Annual Fee Rate
CPI CPI 2%
Increase Rate Rate
Base Year-FY 2006-07
FY 2007-08 3.8% $89.27 $87.72
FY 2008-09 3.3% $90.61 $89.47
FY 2009-10 0.0% $89.47 $91.26
FY 2010-11 1.4% $90.72 $91.26
FY 2011-12 2.3% $92.81 $92.53
FY 2012-13 2.1% $94.47 $94.38
FY 2013-14 2.2% $96.46 $96.27
Max.
Rate
$86.00
$87.72
$89.47
$89.47
$90.72
$92.53
$94.38
$96.27
June 24, 2013
Page6
Actual
Rate
$86.00
$87.72
$89.47
$89.47
$90.72
$92.53
$92.53
$96.27
The maximum rate will increase automatically on an annual basis by an amount equal to the annual
change in Consumer Price Index for all Urban Consumers (CPI) for the Los Angeles, Riverside,
Orange County Areas including all items as published by the U.S. Bureau of Labor Statistics as of
March 1 of each year (12 months ended February), not to exceed a maximum increase of two percent
(2%) per year.
The actual rate to be levied each year will be as approved by the City Council at a public hearing,
after they consider an Annual Fee Report outlining the estimated annual costs of the program.
Table 5 provides sample fee calculations for various land uses and parcel sizes based on the proposed
Actual Fee Rate.
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
Table 5 -Sample Calculations
Est.
Land Use Parcel Parcel lmperv. Drainage
Designation Area (sf) Area (ac) x Percent = Units I 0.118 =
SFR1 3,500 0.08 x 0.740 = 0.059/0.118=
SFR2 7,400 0.17 x 0.580 = 0.099/0.118=
SFR2 8,300 0.19 x 0.580 = 0.110 I 0.118 =
SFR3 9,200 0.21 x 0.485 = 0.102 I 0.118 =
SFR3 10,000 0.23 x 0.485 = 0.112 I 0.118 =
SFR3 11,300 0.26 x 0.485 = 0.126 I 0.118 =
SFR4 13,500 0.31 x 0.410 = 0.127 I 0.118 =
SFR4 17,000 0.39 x 0.410 = 0.160 I 0.118 =
SFR4 21,400 0.49 x 0.410 = 0.201 I 0.118 =
SFR5 52,300 1.20 x 0.345 = 0.414 I 0.118 =
CNDO* 1,307 0.03 x 0.800 = 0.024 I 0.118 =
CNDO* 3,049 0.07 x 0.850 = 0.060 I 0.118 =
Non-SFR 13,068 0.30 x 0.820 = 0.246 I 0.1.18 =
Non-SFR 13,068 0.30 x 0.700 = 0.210 I 0.118 =
Non-SFR 29,185 0.67 x 0.350 = 0.235 I 0.118 =
Non-SFR 29,185 0.67 x 0.700 = 0.469 I 0.118 =
Non-SFR 71,874 1.65 x 0.650 = 1.073 I 0.118 =
Non-SFR 71,874 1.65 x 0.850 = 1.403 I 0. 118 =
Non-SFR 135,907 3.12 x 0.400 = 1.248 I 0.118 =
Non-SFR 135,907 3.12 x 0.600 = 1.872 I 0.118 =
ERU's
0.5000
0.8390
0.9322
0.8644
0.9492
1.0678
1.0763
1.3559
1.7034
3.5085
0.2034
0.5085
2.0847
1.7797
1.9915
3.9746
9.0932
11.8898
10.5763
15.8644
June 24, 2013
Page?
FY 13-14 Annual
Fee Rate/ERU
$96.27
$48.14.
$80.77
$89.74
$83.22
$91.38
$102.80
$103.62
$130.53
$163.99
$337.76
$19.58
$48.95
$200.69
$171.33
$191.72
$382.63
$875.40
$1,144.63
$1,018.18
$1,527.27
0.118 = Drainage Units per median SFR ERU = Equivalent Residential Unit
* Condominium parcel areas =the area of the entire complex divided by the total number of units in the complex.
The Preliminary Fee Roll, which is a listing of each parcel to be charged a fee and the maximum and
actual fee for FY 2013-14, is on file in the office of the City Clerk.
Appeals Process
If a property owner disagrees with the calculation of his or her fee, based on the parcel area and
estimated impervious percentage assigned to the property, then the property owner may appeal the
calculation as follows:
1. Property owner must provide written documentation explaining the reason why the charge
should be changed. This documentation must include:
a. The name, phone number, mailing address, and email address, if available, of the property
owner.
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City of Rancho Palos Verdes
Water Quality and Flood Protection Program
Storm Drain User Fee Annual Report-FY 2013-14
b. The Assessor's Parcel Number (APN) of the property in question.
June 24, 2013
Page 8
c. To-scale drawings of the property in question and the impervious areas located on it with
accompanying calculations. The to-scale drawings shall include the square footage and
labels for each impervious area (i.e. house, garage, driveway, patio, tool shed, carport, etc.).
2. If additional documentation is required or insufficient documentation was submitted, a
representative of the Public Works Department or his or her designee (Staff) will notify the
property owner in writing within two (2) weeks ofreceipt of the appeal.
3. Once Staff has determined that sufficient documentation has been submitted, Staff will perform
the initial review. Staff will notify the property owner in writing within four (4) weeks from the
time sufficient documentation was submitted as to whether or not the fee amount will be
changed.
a. If the determination is to change the fee amount, then the new fee amount will be
documented within the City's fee database.
b. If the determination is that the fee should not be changed, the property owner can appeal
Staffs decision to the Director of Public Works (Director). The appeal must be made in
writing and returned no later than four ( 4) weeks from the date of mailing of Staffs initial
review decision. The Director will notify the property owner in writing within four (4)
weeks from the date ofreceipt of the appeal as to whether or not the fee amount will be
changed.
If the Director's determination is that the fee should not be changed, the property owner can
appeal this decision to the City Council. The appeal must be made in writing and returned
no later than four ( 4) weeks from the date of mailing of the Director's appeal decision. The
City Clerk shall fix a time and place for hearing the appeal and shall give notice in writing to
the appellant in the manner prescribed in Section 3.16.090 for service of notice of hearing.
The City Council's determination on the appeal shall be final.
Appeals will be accepted annually up until June 30 for inclusion on the following fiscal year's
property tax roll submittal. However, if an appeal is granted by Staff, the Director or the City
Council that does not permit inclusion for the following fiscal year's property tax roll submittal, a
reimbursement will be provided to the property owner by the City.
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Dennis Mclean
From:
Sent:
To:
Cc:
Dennis Mclean
Monday, July 01, 2013 8:05 AM
Don
Subject:
CC; OverSight; Carolyn Lehr; Kathryn Downs; Les Jones; Ron Dragoo; Andy Winje
Re: Storm Drain User Fee
Don
Just a short email to correct a couple errors in your reply email below. The ballot measure approved by the
property owners was incorporated into the muni code verbatim; not changed. The City Council has not acted on
the Fee for FY13-14. A Public Hearing will be conducted on July 16th to consider the Fee for FY13-14.
Sent from my iPhone
Regards,
Dennis McLean
On Jul 1, 2013, at 7:47 AM, "Don" <dreeves895@aol.com> wrote:
I'm sure you are correct but will take a look. However, I believe the voters approved 418 as written but
was apparently incorporated into the Municipal Code with additional provisions as you stated -if true, it
seems a bit unethical. The ability to repeal Section 3.44 is another example of government mistrust.
Apparently I also missed the fact that the CC has approved a 4% increase although you say the CC
"could decide" to (i), (ii) or (iii). Is it a done deal and when did they vote to repeal 3.44 or is it still to be
voted on and $96.27 only a recommendation? I probably know the answer since the 2013-14 budget
should be approved by now. Most people won't realize that their fee has increased at least $10. Sunset is
approaching and I wonder what surprises the CC and city hall will spring to continue this tax as was done
with the utility tax. In any event, election season is upon us and perhaps the voters can address this along
with the numerous other issues that have arisen.
Thank you for responding,
Don
dreeves895@aol.com
-----Original Message-----
From: Dennis Mclean <DennisM@rpv.com>
To: Don <dreeves895@aol.com>
Cc: CC <CC@rpv.com>; OverSight <OverSight@rpv.com>; Carolyn Lehr <clehr@rpv.com>; Kathryn
Downs <KathrynD@rpv.com>; Les Jones <LesJ@rpv.com>; Ron Dragoo <RonD@rpv.com>; Andy Winje
<AndyW@rpv.com>
Sent: Sun, Jun 30, 2013 10:53 pm
Subject: RE: Storm Drain User Fee
Don
As you may recall, the ballot measure approved by the property owners was incorporated into the City's
Municipal Code and includes a provision to increase the Fee rate based upon the Consumer Price Index
("CPI") for all Urban Consumers for the Los Angeles, Riverside and Orange County areas, including all
items as published by the U.S. Bureau of Labor Statistics, as of March 1 of each year, but not to exceed a
maximum increase of two percent per year.
1 1-66
The ballot measure, as incorporated into the Municipal Code, provides that without a vote of the property
owners, in any year, the City Council may do any and all of the following: (i) repeal this Chapter 3.44; (ii)
reduce the rate per ERU for the Fee below the maximum rate; or (iii) increase the rate per ERU for the
Fee up to or below the maximum rate if it has been previously set below such rate. In no event shall the
City Council increase the storm drain user rate per ERU in excess of the maximum rate without approval
by a majority vote of the property owners subject to the Fee. The City Council could decide to vote any of
the three alternatives described in (i) through (iii).
The City Council decided to set the FY12-13 Fee to be the same rate as the previous FY ($92.52/ERU),
2% below that maximum rate of $94.39/ERU for FY12-13. The maximum rate for FY13-14 is
$96.27/ERU.
I've pasted a link to the Ordinance as posted on the City's website:
http://www.palosverdes.com/rpv/newstordinances/Rancho%20Palos%20Verdes%200rdinances/Ordinan
ces 400 Series/Ordinance No 418.cfm
Feel free to call me if you have any further questions.
Sincerely,
Dennis McLean
Director of Finance and Information Technology
City of Rancho Palos Verdes
Finance and Information Technology
30940 Hawthorne Blvd.
Rancho Palos Verdes, CA 90275
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From: Don [mailto:dreeves895@aol.com]
Sent: Sunday, June 30, 2013 2:41 PM
To: CC
Subject: Storm Drain User Fee
Good Afternoon
I have been delinquent in following the actual expenditures on storm drains but the Oversight Committee
apparently decided to suggest a 4% increase this year because the increase was skipped last year -to
the best of my knowledge that is still true. I am attempted to suggest that they continue to be treated like
puppy dogs by staff but that would be unfair to dogs so skip this comment.
Instead, I am wondering if they or staff or, excuse me, you have actually read Ordinance 418. It has been
a long time since I did so I had to dig it out and reread it. I am attaching selected pages having to do with
increasing this tax (oops, fee). It.is to be based on CPI with a maximum of 2%. I believe you understand
the need for a public review and a taxpayer vote for any increase in the max allowable.
However, I would like to draw your attention to Para. 344.030 which says that if an increase is approved
but not collected it can be collected the following year -as opposed to just going back and "catching up."
My understanding is that last year the CC -thanks to a couple of members pushing it -zeroed out the
increase as opposed to approving and not collecting it. As you know, I find this whole user fee on 80% of
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the property owners unnecessary -even with Mccarrell Canyon -and symptomatic of a tax and spend
mentality to cover the "Wants" of some at the expense of others. They would also like to have a Sewer
Fee which is so ludicrous in light of what we pay the County to do and which they acknowledge that it
remains a subject for another day.
However, in order to be fair and balanced I would suggest that the Resolution from last year be made
public so I can confirm that I am correct or you can convince me otherwise.
Thank you,
Don
dreeves895@aol.com
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