RPVCCA_SR_2010_07_06_10_Water_Quality_and_Flood_Protection_Program
RANCHO PALOS VERDES
PUBLIC HEARING
Date: July 6, 2010
Subject: Water Quality and Flood Protection Program – Annual User Fee
Rate – FY10-11
Subject Property: Citywide
1. Declare the Hearing Open: Mayor Wolowicz
2. Report of Notice Given: City Clerk Morreale
3. Staff Report & Recommendation: Dennis Mclean, Director of Finance and
Information Technology
4. Public Testimony:
Appellants: N/A
Applicant: N/A
5. Council Questions:
6. Rebuttal:
7. Declare Hearing Closed: Mayor Wolowicz
8. Council Deliberation:
9. Council Action:
W:\AGENDA\Public Hearing Formats\public hearing format Council-Water Quality and Flood Protection Program.doc
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CITY OF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL ~
DENNIS McLEAN,DIRECTOR OF FINANCE AND INFORMATION<g!,
TECHNOLOGY ~/~~
RAY HOLLAND,DIRECTOR OF PUBLIC WORKeao~'
JULY 6,2010
PUBLIC HEARING -WATER QUALITY AND FLOOD
PROTECTION PROGRAM -ANNUAL USER FEE RATE-FY10-
11
CAROLYN LEHR,CITY MANAGER ~
Staff Coordinators:
RECOMMENDATION
Ron Dragoo,PE,Senior Engineer
Andy Winje,PE,Associate Engineer
1)Receive,review and file the independent Water Quality and Flood Protection Program
Annual Report,dated June 25,2010,prepared by the Oversight Committee for the
storm drain program.
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 6,2010 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 FY1 0-11,and if so,the rate per
Equivalent Residential Unit ("ERU")for FY1 0-11.
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 FY1 0-11 shall be $90.72 as set forth in the Annual Report,adopt
the attached Resolution No._;A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES FINALLY ADOPTING A REPORT,AS FILED,IN
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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 FY1 0-11;AND ORDERING THAT
SUCH FEE BE COLLECTED ON THE COUNTY OF LOS ANGELES TAX ROLL FOR
FY10-11.
5)In the event of a majority protest,direct Staff to present to Council at a subsequent
Council meeting a resolution determining the amount of the Storm Drain User Fee for
FY1 0-11 and providing for an alternative method of collecting the Storm Drain User Fee
for FY1 0-11.
EXECUTIVE SUMMARY
Staff has timely published public notices for this Public Hearing in the Palos Verdes
Peninsula News on June 17,2010 and June 24,2010.During the Public Hearing,the City
Council shall make a decision whether to collect the User Fee for FY10-11.Prior to this
Public Hearing,Staff updated the Committee on January 18,2010 and again on May 10,
2010,(see attached staff report)including the status of storm drain capital projects,storm
drain lining projects,catch basin filtration devices and other expenditures for the program.
At a public hearing conducted on May 26,2010,Staff presented to the Committee the
proposed project plan and draft budget for the Storm Drain program for FY1 0-11,excerpts
from the 2010 draft Five-Year Financial Model,the 2010 Capital Improvement Program,as
well as the draft 5-Year Storm Drain Plan.The Committee held a continued public hearing
on June 8,2010.During the continued public hearing on June 8th,staff presented an
update to the draft 5-Year Storm Drain Plan and its recommendation to increase the User
Fee by 1.4%from $89.47/ERU to $90.72,the maximum increase allowed.The Committee
then proceeded to draft its Annual Report,including a recommendation to increase the Fee
to the maximum amount allowed.
If the Council elects to collect the Fee during FY1 0-11,it must decide whether to:
~Follow the recommendation of the Oversight Committee and Staff to increase the
User Fee to the maximum rate:$90.72/ERU;or
~Maintain the current Fee rate at $89.47/ERU;or
~Decrease the Fee rate;or
If the Council elects to not collect the Fee during FY1 0-11,it must decide whether to:
~Reduce the Fee to zero for FY1 0-11;or
~Repeal Chapter 3.44 (the User Fee).
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
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Staffs estimates of other revenue and current and projected expenditures (including the
storm drain program),current and projected General fund reserves and the fund balance in
the WQFP enterprise fund.
Staff's Finding and Recommendation
Staff believes that General Fund revenues will not be sufficient to fund the Storm Drain
program for the following reasons:
Slow property tax revenue growth -Property tax represents about half of General Fund
revenue and any small variance in the percentage increase of property assessments has a
large cumulative effect on the five years of the Model.Staff has acquired property transfer
information from a land management database that indicates a property tax increase of
about 0.5%for FY10-11.Staff has also received information that there is no expected
inflationary increase of property assessments for FY1 0-11.Therefore,Staff has assumed
an overall property tax increase of 0.5%in the draft FY10-11 budget.
Unfunded infrastructure projects -During its Budget Workshop conducted on May 22,
2010,the City Council made decisions and provided Staff with direction to present a
"balanced budget"at a public hearing conducted on June 15,2010:
~Estimated revenue is expected to be about $21.7 million,including about $2 million
of TOT from Terranea Resort;
~Estimated expenditures and net transfers to and from other funds,including $3.8
million of transfers to Capital Improvement Projects fund (for capital projects),is
expected to be about $21.7 million;
~Capital projects requiring the use of General fund proceeds include $2 million for
improvements of Lower Hesse and Grandview parks,$1.5 million for the annual
residential pavement program,$500,000 for an upgrade of the ball field at Upper
Hesse Park,and $300,000 as a matching contribution for grant funded pedestrian
(sidewalk)improvements along Hawthorne Boulevard between PVDW and Crest;
and
~Based upon the adopted FY1 0-11 budget,staff expects that General fund reserves
will be about $10.3 million at the end of FY1 0-11;about $1.3 million in excess of the
Council's Reserve Policy threshold.
The 2010 Tactical Goals established by the City Council identify the San Ramon Canyon
Stabilization project and the Civic Center project,both unfunded,as the highest CIP
priorities.The preliminary estimates of costs,as reported in the CIP,range between $16.5
million and $19.5 million for the San Ramon Canyon Stabilization Project and between
$23.5 million and $43 million for the Civic Center Project.Based upon the 2010 CIP,the
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total estimated costs of unfunded projects (including storm drains)ranges between $71
million and $108 million.
Unfunded storm drain projects and Fee sunset -When the WQFP program was
established in 2005,a list of 38 projects totaling about $20.1 million was identified and
included in the original program.Of those projects,projects with an estimated total cost of
$10 million remain unfunded through FY14-15.Since 2005,an additional $1.2 million of
essential small projects that were not in the original plan have been identified and funded.
The original 2005 program also included about $4.6 million of pipe lining over 30 years.
Through FY14-15,about $4.8 million of pipe lining will have been funded over a period of
10 years;a significantly accelerated rate.
In concurrence with the comments offered by the members of the Oversight Committee
during the May 10th meeting,Staff believes that it is noteworthy to report that the cost of
unfunded storm drain projects beyond 2016,the year the Fee shall sunset,will likely
exceed the $10 million included in the attached 5-Year Storm Drain Plan .Additionally,
Staff has provided a rough estimate for the cost of the proposed unfunded San Ramon
Canyon Stabilization Project in the amount of $19.5 million.
A summary of the "unfunded"storm drain projects follows:
"Unfunded"-San Ramon Canyon Stabilization Project $19,500,000
"Unfunded"-Remaining uncompleted projects included
in the Original 38 projects in 2005 9,977,789
"Unfunded"unidentified projects -emegencies ?
"Unfunded"projects -identified as a result of the
proposed master plan of drainage ?
TOTAL $29,477,789
At the time this report was finalized,no protests regarding the Fee had been received.
BACKGROUND AND DISCUSSION
Overview of Scope and Purpose for the Oversight Committee
At the February 19,2008 City Council meeting,the Council directed the City Attorney and
Staff to bring back a proposed revision to the Scope and Purpose of the Oversight
Committee.The Oversight Committee reviewed the Scope and Purpose at their February
25,2009 meeting.The revised Scope and Purpose was approved by the City Council on
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May 5,2009,to be effective with the 2009 Fee Review process.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 the City Council
regarding how storm drain user fee revenues are being spent and to make
recommendations to the city council regarding future expenditures ofthe storm drain user
fee revenues."Staff expects to use maps,pictures,video and financial information regarding
the storm drain program to assist the Oversig/t 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 ofthe 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 ofthe
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 presentation to the Oversight Committee made on May 10,2010,
May 26,2010 and June 8,2010 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 1O-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 1O-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.
2010 City Council Tactical Goals
As part of the 2010 Tactical Planning Workshop,the City Council set the following goal
with benchmarks directly related to the CIP program,including the storm drain program:
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CAPITAL IMPROVEMENT PROGRAM (CIP)GOAL
GOAL:Implement the Five-Year Capital Improvement Program to renew,improve
and maintain the City's infrastructure and facilities.
SUB-GOAL:Implement the San Ramon Canyon Stabilization Project.
MILESTONES:
1.By May 1,2010,staff will conduct a study session with the City Council to review
costs and discuss funding options specific to a potential citywide sewer fee to fund
maintenance efforts and capital improvements to the City's Sanitary Sewer System.
2.By December 31,2010,conditioned on agreement that may be needed with the
City of Los Angeles and the County of Los Angeles,initiate pre-design for the San
Ramon Canyon Stabilization Project.
3.In the event that federal funding is not available for San Ramon Stabilization
Project,staff will identify and report to the City Council on alternatives for addressing
the scope and funding of the Project.
4.By December 31,2010,staff will make a presentation to the City Council
regarding the status of developing a plan in conjunction with the City of Los Angeles
to address other downstream improvements that are needed to minimize flooding on
25 th Street.
5.By June 30,2011,complete implementation of the FY 09-10 Arterial Streets
Pavement Management Program so that 90%of the City's arterial roadway inventory
will be in good to excellent condition.
6.Provide a report to the City Council on the specific storm drain work to be
performed in FY1 0-11 at the Budget Workshop,currently scheduled for May 22,
2010.
7.Provide a report to the City Council on the specific infrastructure and
recreational improvements that will be performed within the Palos Verdes Nature
Preserve in FY1 0-11 at the Budget Workshop,currently scheduled for May 22,2010.
NEW CIVIC CENTER GOAL
GOAL:Create a New Civic Center.
SUB-GOAL:Construct the first Rancho Palos Verdes City Hall.
MILESTONES:
1.By March 31,2010,develop a realistic schedule,including incremental steps such
as needs assessment,space planning,site planning,financing options,etc.,to
create a new Civic Center.
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2.By April 30,2010,identify estimated costs and specific tasks required to create a
new Civic Center.
3.By May 31,2010,develop a public informational program regarding the need for a
new City Hall.
4.By June 30,2010,identify potential funding sources,including but not limited to
private-public partnership and potential private donations,to develop a new City Hall.
5.By June 30,2010,the Upper Point Vicente/Civic Center Master Plan Council
subcommittee will tour and meet with local representatives of at least two other
California cities that have recently completed new civic center projects to discuss
financing mechanisms,design considerations and other related issues.
6.By September 30,2010,present proposed modifications to the existing
Program of Utilization for the Upper Point Vicente property to the National Park
Service for approval.
7.By March 31,2011,provide a report to the City Council regarding the most likely
plans and estimated cost ranges for each major element of a new Civic Center,
including adding a Sheriff sub-station and/or the location of other emergency support
services such as an ambulance station on the property.
8.By June 30,2011,complete the necessary steps to record an Alta Survey Map for
the Upper Point Vicente property.
The City Council's 2010 Tactical Goals establish the San Ramon Canyon Stabilization
project and the Civic Center project,both unfunded,as the highest priorities.
Meetings and Public Hearings Conducted by the Oversight Committee
Staff presented a FY09-10 update regarding the Water Quality and Flood Protection
program (the "Storm Drain program")in a Memorandum,dated January 18,2010,sent via
email.Staff updated the Committee again on May 10,2010,(see attached staff report)
including the status of storm drain capital projects,storm drain lining projects,catch basin
filtration devices and other expenditures for the program.At a public hearing conducted on
May 26,2010,Staff presented the proposed project plan and draft budget for the Storm
Drain program for FY1 0-11,excerpts from the 2010 draft Five-Year Financial Model,the
2010 Capital Improvement Program,as well as the draft 5-Year Storm Drain Plan.The
Committee held a continued public hearing on June 8,2010.During the continued public
hearing on June 8th,staff presented an update to the draft 5-Year Storm Drain Plan and its
recommendation to increase the User Fee to $90.72,which is the maximum amount
allowed.The Committee then proceeded to draft its Annual Report,including a
recommendation to increase the Fee to the maximum amount.
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San Ramon Canyon Stabilization Project
In past years,the San Ramon Canyon Stabilization Project has been included in this list of
updates.This project is very complex and has multiple jurisdictions involved including the
City of Los Angeles and Los Angeles County.
The re-authorization of the Surface Transportation Bill has presented a tremendous
opportunity for the City to apply for federal funding to assist with this project.The drainage
issues related to San Ramon Canyon have a direct impact on the stability and functionality
of Palos Verdes Drive South and Palos Verdes Drive East.The potential for a catastrophic
roadway failure is growing and could render both critical roadways unrecoverable if the
issue is not addressed.City staff has been working with Blais &Associates,Inc.,a
consulting firm which specializes in assisting local governments in securing grant funding,
to apply for federal funds to pay for this project.
Congressman Rohrabacher is expected to include the project is his High Priority Project
portfolio for the reauthorization of SAFETEA-LU,which is a federal transportation bill
renewed every six years allowing for specific projects to be authorized and funded.
However,the Congressman has said such inclusion is on-hold at this time,subject to his
legislative negotiations.The project is estimated to cost $19.5 million,and RPV's federal
funding request is for $9.75 million.In December a three-way letter was signed between
RPV,the City of Los Angeles and Los Angeles County agreeing to collaborate to raise
funds to pay for the project.The Mayor and staff recently met with staff and elected
officials for the City of Los Angeles and the County.Among other action items,it was
agreed that finance staff of all cities would further explore other funding alternatives in the
event securing federal funds is unsuccessful.
The project has been divided into three phases and will likely take a number of years to
complete.In FY09-10 and FY1 0-11,the City Council allocated approximately $1.5 million
(including carry over money from FY08-09)to complete a Project Study Report,which will
serve as the project initiation document that is submitted to State and Federal Agencies for
project funding.The contract that is expected to lead to design concept alternatives forthe
project was awarded to Harris and Associates at the March 16,2010 City Council meeting.
This study is expected to take 6 to 8 months to complete.Phase II and Phase III have
been included on the unfunded list of the CIP at this time.Attached to this report is a copy
of the Stabilization Project Fact Sheet.
Storm Drain User Fee and FY10-11 Plan
The Storm Drain User Fee,which generates revenue totaling about $1.2 million annually,
will expire in 2016.This revenue is deposited into the Water Quality Flood Protection
(WQFP)fund for the improvement and maintenance of the City's storm drain facilities.
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The draft 5-Year Storm Drain Plan that was presented to the Committee on May 10th was
nearly identical to the plan presented a year ago.During its meeting on May 10 th
,the
Committee suggested that staff re-evaluate the inclusion of several of the "original 38
projects"in FY13-14 and FY14-15 of the Plan.Accordingly,Staff has reconsidered and
included certain projects in FY12-13,FY13-14 and FY14-15.A description of those
projects is presented below.Staff has also re-considered the timing and approach for
developing a complete master plan of drainage as described below.Once the plan is
completed,the priority of all projects included in the 5-Year Storm Drain Plan may change.
Additionally,the funding needs of the top priority San Ramon Canyon Stabilization Project
may affect this Plan.
Drainage Master Plan Program
The Drainage Master Plan Program seeks to do two things.First,a planning document
would be prepared during FY1 0-11 to guide staff in developing project programming.Staff
has re-programmed the Los Verdes project allocation and other projects savings to fund
the preparation of the planning document.Second,a data collection and retention system
would be implemented that would allow for efficient and systematic management of the
stormwater system into the future that would be integrated into the City's existing
Geographic Information System ("GIS")as its data backbone.An appropriation of $40,000
is already included in the FY09-1 0 budget of the General Fund that will be used to facilitate
integration of the new data into the GIS system.
The current planning document for the City's storm drain system is the Update to the
Master Plan of Drainage,prepared in 2004 by a consultant.It was an update to a previous
plan,prepared by the same consultant in 1998.The update in 2004 added to the storm
drain inventory to reflect projects that had been recently completed.It also included a
revised hydrologic and hydraulic analysis for the pipes to determine where hydraulic
deficiencies in the system occur.However,no assessment of the condition of the pipes
was made at that time.All the pipes in the inventory (atlas)were assumed to be fully
operable and in an adequate state of repair.Based on this analysis,the consultant
developed a list of hydraulically deficient drains,a prioritization scheme based on that list
and estimated costs.This list became the basis for the projects identified at the
implementation of the WQFP Program.
The basic inadequacy of the 2004 master plan update was that it did not address the
physical condition of the pipes but merely addressed the hydraulic issues.Since 2004,a
number of deficiencies in the physical condition of the pipes and channels have been
identified and many of them addressed through new construction and lining projects.
However,at this time,many deficiencies remain.Some are known and some unknown,
due to both hydraulics and serviceability.In addition,as a given storm drain is modified,it
may affect the characteristics of runoff on downstream systems.In order to capture these
system changes and incorporate conditional deficiencies in the planning process,staff
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believes it is important to systematically document the existing conditions,update the
analyses of the system,develop costs of correction and levels of risk associated with
deficiencies,and use that data to develop project priorities and work plans.This would be
accomplished by development of a Drainage Master Plan Program.
In order for the master plan to be comprehensive,it should include verified inventory data,
data on the condition of pipes,revised hydrologic and hydraulic calculations and models as
required,estimates of costs of both corrective measures and risks of waiting,and a
scheme by which projects can be prioritized.
Further,to make the master plan useful in the future,it should be able to be updated to
reflect work of new drainage and development projects,and discovery of new pipe
conditions.Again,the backbone of the master plan would be the City's GIS system,which
would store atlas information,archived records of construction and maintenance,and
updated inspection footage.The GIS platform is already being used by the City,including
some atlas information of the storm drains.The new master plan information would be
added to this,along with future data obtained from new projects,routine field inspections
and reported problems.An effort would be made annually to update the GIS system with
data created and collected throughout the year.
Projects added to the 5-Year Storm Drain Plan
Based upon comments offered by the Committee members during the Oversight
Committee meeting conducted on May 10 th ,Staff has revised the 5-Year Storm Drain Plan,
including the following storm drain projects:
PVDE Lower Switchbacks -$485,000 in FY12-13
This project will address the CMP's that provide drainage across the switchbacks.The
existing pipes have been in place for more than 60 years performing the task they were
originally designed for.The capacity of the pipes is undersized;therefore,larger sized
pipes are needed to adequately drain runoff from the roadway.The hydrology calculations
performed through the Drainage Master Plan Program are expected to validate such.The
inlet configurations designed and built by the County are simply depressed areas adjacent
to the roadway that do not provide any protection for pedestrian,bicycle or vehicular traffic.
Standard inlet catch basins and outlet pans will be installed through this project.
A drainage system is needed to collect runoff that exits Crest Road onto Palos Verdes
Drive East.Additionally the system will collect runoff along Palos Verdes Drive East to the
east of Casilina Drive (parallel to Narino Dr.)During heavy rains localized flooding can be
observed on Palos Verdes Drive East,which creates a safety concern for motorists.The
hydrology calculations performed through the Drainage Master Plan Program will verify this
need.Standard catch basin inlets will collect runoff from the roadway,which will be
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transmitted through a mainline to the outlet structure that will be located to the south
opposite to the Casilina Drive intersection.
PVDS (North of Barkentine)-$446,000 in FY13-14
This project will address an undersized drain that crosses Palos Verdes Drive South
located to the east of Sea Cove Drive.The hydrology calculations performed through the
Drainage Master Plan Program will verify this need.The invert of this pipe was
reestablished sometime in the 1990s through Portland Cement Concrete Lining and the
pipe is in relatively good condition.There is no inlet or outlet associated with this system,
so they will need to be designed and installed.
South HawthorneNia Frascati Curb &Gutter -$440,000 in FY14-15
Localized flooding associated with runoff from the roadway will be corrected through a
project that will address the continuous flow of runoff through placement of a curb and
gutter system along Via Frascati.
May 10,2010 Meeting of the Oversight Committee -Follow-Up Regarding
Questions,Request for Additional Information and Comments
Question -Will the proposed Marymount Project have an Impact on the San Ramon
Canyon drainage corridor?
Answer -Not as analyzed in the Environmental Impact Report,nor based upon the
revisions under consideration by the City Council.The potential impacts on San Ramon
Canyon were fully considered in the preparation of the environmental documentation
prepared for the Marymount project.The Draft EIR (October 2007)and the Final EIR (May
2009)investigated the potential effects of the proposed Marymount project on the
environment,including impacts from stormwater runoff and construction activity on land
stability.To the extent that the proposed improvements might affect San Ramon Canyon
(and other slopes and drainage courses in the area),mitigation measures were identified to
reduce the severity of any potential impact to a "less than significant"level.Site drainage
that currently drains into San Ramon Canyon will be collected and drained into a detention
facility.The intent is to release post construction drainage into the Ganado drainage
system at the rate runoff is currently entering the system so the system will not be over
burdened by any added runoff generated from the construction project.This will effectively
reduce the tributary area to the Canyon.
Question -Why is the Paintbrush Canyon drainage system not included in the 5-year
plan?
Answer -The Paintbrush Canyon drainage system exists in the Redevelopment Agency
area of the City.Our best understanding of the history is that the drainage system fell into
a state of disrepair quickly due to the significant rate of land movement and was
abandoned.The Improvement Authority of the City is responsible for maintaining RDA
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improvements.Unfortunately,it does not currently have sufficient funding to maintain a
replacement of the Paintbrush Canyon drainage system which could cost $100,000 or
more annually.Notwithstanding such,Staff is gathering information regarding the draining
issues and possible funding alternatives and will report its findings to the Committee in the
future.
If the WQFP were to take on this maintenance obligation for the Paintbrush Canyon
drainage systems,the approximate cost to maintain the system would represent roughly
8.3%of the funds collected through the User Fee.Staff does not recommend this action at
this time.
Question -Once approved by Congress,what is the term of an appropriation before it
lapses?
Answer -Staff re-directed this question to its grant consultant,Blais &Associates,and
received the following reply:(1)Water Resources Development Act (WRDA)-$9.75
million request -Once approved by Congress,funding the request processes through the
US Army Corp of Engineers and (2)Reauthorization of SAFETEA-LU -$9.75 million
request -Federal transportation bill renewed every 6 years and is currently under
consideration.
Funding is subject to the federal appropriation process of Congress.However,funding bills
are considered every two years for WRDA and annually for SAFETEA-LU.Funding,
accounting and compliance matters change from time to time and subject to federal audits
performed in conjunction with the City's independent audit.Generally,federal funds are
expected to be spent within 2-3 years of their advance.Some federal funds are paid on a
project reimbursement basis.
Question -Can a project location map be provided the Committee?
Answer -Yes,project location maps were presented during the meeting and distributed
to the Committee members.
May 26,2010 Meeting of the Oversight Committee -Follow-Up Regarding
Questions,Request for Additional Information and Comments
Question -[Assuming the Consumer Price Index ("CP!'?was a negative last year]-
Should last year's negative CPI be averaged with the 2010 CPI when determining the
maximum increase of the Fee permitted by law?
Staff Reply:
During the meeting conducted on June 8,2010,Member Wedemeyer expressed his
opinion that Staff misunderstood the question he asked during the meeting on May 26,
2010.After a significant amount of discussion,Staff requested that Member Wedemeyer
forward his question in writing to enable further clarification from the City Attorney.
10-13
PUBLIC HEARING -WATER QUALITY AND FLOOD PROTECTION
PROGRAM -ANNUAL USER FEE RA TE-FY10-11
July 6,2010
Page 13 of 15
In his email and memorandum dated June 9,2010 (attached),Member Wedemeyer
questions the proper way to calculate the effect of a negative CPI in a prior year on the
current year's CPI (FY1 0-11).
As Council may recall,the maximum annual User Fee rate per ERU was initially
established at $86.00 effective with FY06-07.Such maximum rate per ERU shall be
increased annually commencing with FY07-08 in accordance with the CPl.Municipal Code
section 3.44.020 F.provides:
"Such maximum annual rate per ERU shall be increased annually commencing with
fiscal year 2007-2008,by an amount equal to the change in the Consumer Price
Index for all Urban Consumers for the Los Angeles,Riverside and OrangeCounty
areas (the "CPI"),including all items as published by the U.S.Bureau of Labor
Statistics as of March 1 of each year,not to exceed a maximum increase of two
percent per year."
The percent change in the CPI from February 2008 to February 2009 CPI was "zero".
Therefore,the maximum rate per ERU for FY09-10 was $89.47,which was the same as
the maximum rate for FY08-09.The percent change in the CPI from February 2009 to
February 2010 is 1.4%.Therefore,Staff recommends that the maximum rate per ERU for
FY1 0-11 be increased by 1.4%from $89.47 to $90.72.
Some confusion exists because Mr.Wedemeyer compared the change in the CPI from
FY08-09 to FY09-1 0 using March 2008 to March 2009 (which was -1 %instead of 0%)and
from FY09-10 to FY10-11 using March 2009 to March 2010 (which was 1.9%instead of
1.4%).However,the City Attorney has advised that the CPI figures for February should be
used in calculating"the change in CPI each fiscal year because the Code requires that the
CPI"as of March 1 be utilized to calculate the increase of the CIP.To calculate the CPI for
the month of March,the Bureau of Labor Statistics uses prices collected throughout the
entire month of March;prices collected on March 1st are not representative of the changes
in overall prices of items included in that particular CPI for the entire month.As of March 1,
the most recent CPI data available are from prices collected throughout the month of
February (Le.showing the percentage change from February of the previous year to
February of the following year).Thus,a February to February comparison is required by
Section 3.44.020 F.Therefore,Mr.Wedemeyer'question has no impact on the maximum
rate of the Fee for FY1 0-11.Nonetheless,Mr.Wedemeyer raises a valid question in the
event there would be a negative change in the CPI in the future.
Mr.Wedemeyer suggests that a negative CPI from one year to the next (from FY08-09 to
FY09-10 in this case using a March to March comparison)should not impact the maximum
rate in FY09-10 (which stays the same as the rate in FY08-09),but should affect the
maximum rate in the following year (FY1 0-11).He suggests that the City should compare
the change in the CPI using a two-year calculation from FY08-09 to FY10-11).The
10-14
PUBLIC HEARING -WATER QUALITY AND FLOOD PROTECTION
PROGRAM -ANNUAL USER FEE RA TE-FY10-11
July 6,2010
Page 14 of 15
following excerpt from Mr.Wedemeyer'email demonstrates his position:
MONEAR
3/2008
3/2009
3/2010
Index
223.606
221.376
225.483
Percentage change
+3.3
-1.0
+1.9
Year to Year
2007-2008
2008-2009
2009-2010
one year index change:
two year index change:
225.483-221.375 =4.108
(4.108/221.375)x 100 =1.85566 (1.9%)
225.483 -223.606 =1.877
(1.877/223.606)x 100 =0.8394 (0.8%)
The maximum rate per ERU for FY09-10 would stay the same as the maximum rate for
FY08-09.The maximum rate per ERU would increase by 1.9%if the change in the CPI
from March 2009 to March 2010 was used.However,the maximum rate per ERU would
increase only by 0.8%if the change in the CPI from March 2008 to March 2010 was used.
Mr.Wedemeyer states that any system that employs a one-year change after a negative
CPI dramatically exaggerates the economic reality between 2007 and 2010.
Mr.Wedemeyer'suggestion for a two year calculation following a negative change in the
CPI is mathematically equivalent to decreasing the maximum rate per ERU on account of a
negative change in the CPI (Le.,effectively decreasing the rate by 1%for FY09-10 and
then increasing the rate by 1.9%in FY 10-11).However,it is the opinion of Harris &
Associates,the City's rate engineer (see attached letter,dated June 2,2010),as well as
the City Attorney (see attached letter,dated June 3,2010)that the provisions of Municipal
Code section 3.44.020 do not provide for decreases in the maximum rate per ERU on
account of negative changes in the CPI.Instead,the Code clearly states that the
maximum annual rate per ERU shall be "increased"annually.Thus,it was not intended for
the rate to be decreased on account of negative changes in the CPI.If that were the
intent,the Code would have provided for the maximum rate to be "adjusted"annually in
accordance with the CPI (Le.,it would go up and down)instead of providing that the rate is
to be "increased"in accordance with the CPI.
In conclusion,Staff is of the opinion that Harris &Associates correctly calculated the
maximum rate for FY1 0-11 by increasing the FY09-10 rate by 1.4%and that the Council
may levy the actual rate for FY1 0-11 at a rate that does not exceed the maximum rate for
FY10-11,which is $90.72 per ERU.The City Attorney has sent a direct reply to Member
Wedemeyer,dated July 1,2010 (see Exhibit I).
10-15
PUBLIC HEARING -WATER QUALITY AND FLOOD PROTECTION
PROGRAM -ANNUAL USER FEE RATE~FY10-11
July 6,2010
Page 15 of 15
Attachments:
1)Exhibit A -RESOLUTION NO.__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 10-11;AND ORDERING THAT SUCH FEE BE COLLECTED ON
THE COUNTY OF LOS ANGELES TAX ROLL FOR FISCAL YEAR 10-11
2)Exhibit B -Water Quality and Flood Protection Program Annual Report,dated
June 25,2010,prepared by the Oversight Committee for the storm drain
program
3)Exhibit C -Annual Report for the Storm Drain User Fee -FY1 0-11,prepared by
Harris &Associates,dated June 14,2010
4)Exhibit D -Staff Report to Oversight Committee,dated May 10,2010
5)Exhibit E -Staff Report to Oversight Committee,dated May 26,2010
6)Exhibit F -Staff Report to Oversight Committee,dated June 8,2010
7)Exhibit G -City Attorney memorandum,dated June 3,2010,regarding CPI
8)Exhibit H -Email and Memorandum from Committee Member Wedemeyer,
dated June 9,2010
9)Exhibit I -City Attorney letter to Member Wedemeyer,dated July 1,2010
10-16
EXHIBIT A
RESOLUTION NO.
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 2010-11;AND ORDERING
THAT SUCH FEE BE COLLECTED ON THE COUNTY OF LOS ANGELES TAX
ROLL FOR FISCAL YEAR 2010-11
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 2010-11"and dated June 14,2010,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 2010-11 (commencing July 1,2010 and
ending June 30,2011),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.
-1-
10-17
EXHIBIT A
D.The City Clerk caused notice of a hearing on the Report to be
published in the Palos Verdes Peninsula News on June 17,2010
and June 24,2010.
E.The City Council held a public hearing on the Report on July 6,
2010 (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 2010-11,and the rate per Equivalent Residential Unit
("ERU")for Fiscal Year 2010-11.In that regard,the City Council
took into account the current and projected revenues of the City for
Fiscal Year 2010-11,including but not limited to,property taxes,
sales taxes and transient occupancy taxes;the current and
projected expenditures of the City for Fiscal Year 2010-11,
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 2010-11.
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 2010-11.
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 2010-11 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 2010-11 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 10,2010 pursuant to Section 4 of Ordinance No.418.
-2-
10-18
EXHIBIT A
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 10,2010 pursuant to Section 5 of Ordinance No.418.
PASSED,APPROVED and ADOPTED this 6th day of July 2010.
Mayor
ATTEST:
City Clerk
-3-
10-19
Exhibit B
MEMO
TO:Honorable Mayor and City Council
FROM:WQFP Program.Oversight Committee
DATE:June 25,2010
SUBJECT:2010 Annual Report
The Oversight Committee has reviewed RPV Water Quality and Flood
Protection (WQFP)Program.activities and expenditures in FY 2009-10,and
plans for FY 2010-11 in accordance with RPV Municipal Code Section
3.44.080.This review was based on information provided by Staff.
Our Annual Report is attached.
~ifr-
Frank Lyon
Chairman
WQFP Program.Oversight Committee
Cc.:
Carla Morreale
Dennis McLean
Ron Dragoo
Committee Members
10-20
Exhibit B
2010 ANNUAL REPORT ON THE WQFP PROGRAM
INTRODUCTION
An Oversight Committee was established 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 the next fiscal year.The Committee consists ofthe
following members:
Frank Lyon (Chairman)
John Constantino
John Curtis
Henry Ott
Lowell Wedemeyer
The Committee met with the City's Finance and Public Works staffs three times over the past six
weeks to review WQFP Program activities and expenditures in FY 2009~1 0 and planned projects and
budgeted expenditures in FY 2010-11.Staff also provided the Committee with their proposed Storm
Drain Plan through FY 2014~15,excerpts from the City's 2010 draft Five~Year Financial Model and
the 2010 Capital Improvement Plan (CIP),and their recommendation for the FY 2010~11 User Fee
Rate.
This report conveys the Committee's conclusions and recommendations in accordance with their
responsibilities designated by the City Council on May 5,2009 and documented in RPV Municipal
Code Section 3.44.080.
FY 2009-10 EXPENDITURES
The approved WQFP Program expenditure plan (i.e.budget)for FY 2009-10 totaled $2,926K.As of
May 27,$466K had been spent and an additional $655K had been committed.Total fiscal year
expenditures are estimated to be about $1,120K,which includes $1,239K from User Fee collections
this year.Major projects are described in the staff report dated May 10,2010 (Attachment A),and
fiscal year expenditures are summarized in Attachment (B),which were prepared by Staff.
Staff has advised the Committee that the variance between the $2,926K budget and the estimated
expenditures of $1,120K is largely due to the necessity to investigate design alternatives prior to
beginning the design and environmental phases that were anticipated while developing the budget
estimate for FY09-1 0 for the San Ramon Stabilization project,the deferred Storm Drain Lining project
(expected to begin in early FY10-11)and rescheduling the Drainage Master Plan Program.
The uncommitted remaining fund balance in the City's WQFP Program Fund as of June 30,2010 is
estimated to be about $422K.
The Committee believes that all WQFP Program costs to date,including User Fee revenues,have been
properly spent to discover and mitigate storm drain problems in the City.
10-21
Exhibit B
PLANS FOR FY 2010-11
Staff has presented the Committee with a draft FY 2010-11 WQFP Program expenditure plan (see
Attachment B)of $1 ,584K,not including previously authorized but unspent funds.With the expected
$1,806K to be carried forward from FY 2009-10,total WQFP Program expenditures in FY 2010-11
are expected to be about $3.3 million.
Major planned projects in FY 2010-11 are described in Attachment (A),Attachment (C)and
Attachment (D),all prepared by Staff.
All planned projects appear necessary and are being funded appropriately under the present
circumstances.
USER FEE RATE FOR FY 2010-11
The Committee continues to believe that considerably more revenue from a User Fee could objectively
be justified,and recommends increasing the User Fee rate up to the maximum allowed by law.
OTHER COMMENTS
1.The Committee continues to believe that currently planned resources are inadequate to address
known storm drain repair needs in the City,and experience has shown that additional unknown needs
will probably arise that may require immediate attention.The San Ramon Canyon Stabilization Project
alone is roughly estimated to cost around $20 million and sources for these costs are currently
unknown.Including these costs,the current Five Year Plan reveals a WQFP Program funding deficit
of about $30 million at the end of FY 2014-15 to address storm drain repair needs that are known at
this time.
2.It would be unrealistic and unfair to fund the City's share of the San Ramon Stabilization Project
entirely with money from the Storm Drain User Fee.
3.The Committee recommends that TOT revenue from Terranea be set aside in a reserve fund and
allocated first to high priority CIP infrastructure repairs,including storm drain projects.
4.The Committee recommends that a provision for funding long-term maintenance of the City's storm
drain system beyond 2016 when the Storm Drain Fee sunsets should be included in future Five-Year
Financial Models.
5.The Committee supports Staffs recommendation to accelerate the Drainage Master Plan Program.
Attachment (A):Staff Report "WQPF Program:FY 09-10 Update"dated May 10,2010 (w/o attach.)
Attachment (B):Storm Drain Plan through FY 14-15
Attachment (C):Excerpt from Staff report "Water Quality And Flood Protection Program -Public
Hearing For Annual User Fee Rate -FYI 0-11"dated May 26,2010
Attachment (D):Excerpt From FY 10-11 DRAFT CIP -Hawthorne Blvd.(Projects not described in
Attachments (A)and (C))
10-22
Exhibit B
Attachment A
CITY OF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT
COMMITTEE FOR THE WATER QUALITY AND FLOOD
PROTECTION PROGRAM
DENNIS McLEAN,DIRECTOR OF FINANCE AND
INFORMATION TECHNOLOGY
MAY 10,2010
WATER QUALITY AND FLOOD PROTECTION PROGRAM-
FY09·10 UPDATE
Project Managers:Andy Winje,PE Associate Engineer
Ron Dragoo,PE,Senior Engineer
BACKGROUND AND DISCUSSION
This report includes a brief update regarding the major projects included in the Water
Quality and Flood Protection program in addition to highlights from the FY09-10 program.
PROGRAM HIGHLIGHTS
San Ramon Canyon Stabilization Project
The City allocated $1.2 million for the completion of the Project Study Report (PSR)for the
San Ramon Canyon Stabilization Project (a/k/a as the Palos Verdes Drive East
(PVDE)/Palos Verdes Drive South (PVDS)Roadway Stabilization Project).The PSR will
provide a minimum of three preliminary alternative designs and environmental requirements
for each design alternative.This phase of the project should be complete within 12
months.This contract was awarded to Harris and Associates on March 16,2010.
The project is estimated to cost $19.5 million,and has been included in the City's Capital
Improvement Plan on the Unfunded Projects List.The City has taken a collaborative
approach with the City of Los Angeles and Los Angeles County to request federal funds for
the San Ramon Canyon Stabilization Project.All three government agencies signed a
letter of cooperation pledging their collective commitment to work together to insure that
these vital transportation routes remain safe and viable.The letter was signed by RPV
10-23
Exhibit B
Attachment A
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09·10 UPDATE
May 10,2010
Page 2 of 5
Mayor Steve Wolowicz,L.A.Councilwoman Janice Hahn and L.A.County Supervisor Don
Knabe and submitted to Congressman Dana Rohrabacher in December 2009.
Congressman Dana Rohrabacher visited the project site in August 2009,and immediately
recognized the threat,and therefore,has included the project in his High Priority Project
portfolio for the reauthorization of SAFETEA-LU (a federal transportation bill in which
projects are authorized and funded)this year.The City has received statewide and
regional support for the project including letters from Tony Strickland,CA State Senate,
Roderick D.Wright,CA State Senate,Alan Lowenthal,CA State Senate,Bonnie
Lowenthal,CA State Assembly,Ted Lieu,CA State Assembly,Don Knabe,Los Angeles
County Supervisor,and Janice Hahn,Los Angeles City Councilwoman.Please see the
attached fact sheet for additional information about the project.
McCarrrell Canyon
The Notice of Completion for the McCarrell Canyon project was presented to the City
Council on November 17,2009.The project reached substantial completion in April,just 24
months after its commencement.The $7.4 million project was designed to convey water
from a 100-year storm from both the McCarrell Canyon and Barkentine Canyon to the
beach with the expectation of providing full protection to the neighborhoods.Upon
completion of this project,miscellaneous tasks have been identified to clean up the
surrounding project site.The amount of $167,000 was carried over to FY09-1 0 to complete
incidental site clean-up work,inclUding undergrounding the utilities.The City was granted
the APWA achievement award for the project.
PROJECT UPDATES
Proiect Name:San Ramon Canvon Stabilization Proiect
Proiect Area:Proiect Area 3
Budaeted Cost:$1,152,000
Contract Award:$506,300
Total/Estimated Costs:TBD
Percentaae Completion:0%
Project Description:
A Request For Proposals was issued and qualified firms Interviewed in November 2009 for the
completion of a Project StUdy Report (PSR).A Professional Services Contract was awarded to Harris
and Associates on March 16,2010 for the preparation of the Project Study Report.The PSR will
identify at least three preliminary design options and provide environmental requirements for each
design alternative.This phase of the project should be complete within 12 months.City Staff and
Elected Officials are actively pursuing Federal funding opportunities.A fact sheet about the project
has been developed and is available to all interested parties (see attached).
10-24
Exhibit B
Attachment A
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09-10 UPDATE
May 10,2010
Page 3 of 5
Project Name:Catch Basin Filtration Devices
Project Area:Project Area 12
Budgeted Cost:$205,000
Contract Award:TBD
Final/Estimated Costs:TBD
Percentage Completion:0%
Proiect Description:
Staff has deferred advertising the catch basin filtration project In the north east portion of the city,
This area of the City was identified to address the trash problems at Lake Machado in Los Angeles.
Due to problems with performing work on catch basins that are maintained by Los Angeles County,
work on this project had to be delayed to the 2009·2010 Fisoal Year.Procedures for the installation
of best management practice devices for storm drain structures within Los Angeles County Flood
Control District Facilities have recently been pUblished.The Project Plans and Specifications are
being revised to Include these new requirements.The Project will be advertised in May and a
contract is expected to be awarded in June 2010.The estimated cost of this proiect is $200,000.
Proiect Name:Los Verdes Golf Course
Project Area:Proiect Area 10
Budgeted Cost:$95,000
Contract Award:TBD
Final/Estimated Costs:TBD
Percentage Completion:0%
Project Descriotion:
This is a Los Angeles County project.The originally proposed share of project cost was 22%by the
City of Rancho Palos Verdes.Storm drain improvements behind homes on Calle De Sue nos were
installed by the County of Los Angeles during this past year.Albeit only half of the system originally
proposed by Los Angeles County was Installed,the Improvements should improve how runoff from
their facility is managed.The remaining half of the improvements were not installed by the County
due to the lack of adequate right of way to install a standard county storm drain through private
property.To date,Los Angeles County has not invoiced the City requesting reimbursement for the
City's share of cost for the construction that has been completed.Therefore,staff believes that it is
prudent to carry forward the $95,000 included in the FY07·08 budget as the City's share of
construction costs for this project.
10-25
Exhibit B
Attachment A
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09·10 UPDATE
May 10,2010
Page 4 of 5
Proiect Name:PVDE Drainage Inlets
Project Area:Project Area 6
Budgeted Cost:$60,000
Contract Award:TBD
Total/Estimated Costs:TBD
Percentage Completion:0%
Project Description:
This project was presented as the first phase of a five year project to address roadway drainage
issues along Palos Verdes Drive East.Subsequent to establishing this project,Public Works
recommended and the City Council approved a study ofthe Palos Verdes Drive East to evaluate the
adequacy of the roadway to accommodate its many varied uses (I.e.vehicle traffic,equestrian and
cycling)and provide recommendations to increase safety.If curb improvements were installed at this
time,it is likely that the improvements would not accommodate future safety recommendations.No
action has been taken and this project is being Included with improvements that are anticipated on
Palos Verdes Drive East to better facilitate surface drainage while accommodating the multiple uses
of this particular roadway.Staff recommends that the budgeted funds identified for curb
improvements be carried forward to next year's budget when the larger roadway project will likely be
conducted.A roadway project which helps address drainage issues along PVDE is currently being
designed.Improvements are anticipated to be included in the project that will better channel water
away from private property.Construction is tentatively anticipated during the summer of 201 O.
Project Name:Miscellaneous Repairs &Storm Drain Filtration Maintenance
ProiectArea:Project Area 12
Budgeted Cost:$326,495
Contract Award:$152,400
TotallEstimated Costs:$326,000
Percentaae Completion:10%
Proiect Description:
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
three years.
~All of the filters in the 111 catch basins with filtration and trash screens installed in the City
are scheduled to be replaced;
~All Catch Basins in the City have been cleaned;
~Large Diameter Storm Drain Maintenance projects have been Identified on PVDE,
Hawthorne Blvd.,and Indian Peak Rd.and will be repaired through the lining project this year
~44 storm drain outlets are identified and scheduled to be cleaned and repaired throughout
the City this year
~Cleaned and video inspected 26 sections of CMP.
Other miscellaneous repairs have also been including repairs at Seacove and Packet Road and an
18 inch drain on Palos Verdes Drive South.
10-26
Exhibit B
Attachment A
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09·10 UPDATE
May 10,2010
Page 5 of 5
Proiect Name:Via Collnita Vickery Canyon
Proiect Area:Proiect Area 7
Budaeted Cost:$251,500
Contract Award:$85,475
Total/Estimated Costs:$251,500
PercentaQe Completion:25%
Proiect Description:
One of the pipelines draining into the Vickery Canyon basin runs along Palos Verdes Drive East.A
project has been completed connecting additional catch basins to this pipeline.Construction on this
project began in January and was completed in March.The Project cost was $85,475.
Additional pipelines in the Vickery Canyon basin will be rehabtlitated this year and are in various
stages of design.Although cost estimates are not fully developed,construction on this project is
expected to begin this year;
Proiect Name:Storm Drain Lining
Proiect Area:Project Area 12
Budaeted Cost:$524,822
Contract Award:TBD
Total/Estimated Costs:TBD
Percentaae Completion:0%
Proiect Description:
As a result of the inspections performed on the large diameter storm drain pipes,seven storm drain
lines were determined to need some form of work.One of the seven (the one-hundred twenty Inch
diameter pipe running under PVDS that WaS repaired last year)pipes identified became an
emergency repair when holes in the pipe were discovered during a follow up inspection.Three large
diameter storm drains are scheduled to be repaired through this year's lining program,and the
remaining three large diameter pipes needing repairs will be inspected again next year and possibly
scheduled for repairs.
Following this year's rains,additional work is required on many pipe inverts and this work is currently
underway.Plans and specifications for the FY09-10 lining project are in process.Twenty-six lines
have been identified for lining this year.Three large diameter lines are included,and the remaining
twenty-three are thirty inches and smaller.Advertising for this year's project has been delayed to
May to accommodate repair work.A Project award is likely to be recommended at the June 22,2010
Cltv Council meetina.
ATTACHMENTS:
City of Rancho Palos Verdes Storm Drain Costs (FY09-10 through FY14-15)
10-27
Exhibit B
City of Rancho Palos Verdes
Storm Drain Plan through FY14·15 Attachment B
2839637
1750 000
3006992
417351
1 512980 2,240000
1403 500
60 506 535 627 617333 350 000
417361
10960 1152 000
1403500
on SIems
10-28
Exhibit B
WATER QUAL
USER FEE RATE-
May 26,2010
Page 9 of 13
Attachment C
ND FLOOD PROTECTION PROGRAM-ANNUAL
0-11
The .ct has been divided into three p s and will likely take a number of years to
complete.Y09~1 0 and FY1 0~11,the City ,cil allocated approximately $1.5 million
(including ca over money from FY08-09)to co e a Project Study Report which will
serve as the pro initiation document that is submit State and Federal Agencies for
project funding.T ontract that Is expected to lead to d concept alternatives for the
project was awarded arris and Associates at the March 1,10 City Council meeting.
This study is expected ake 6 to 8 months to complete.Pha I and Phase III have
been included on the unfu d list of the CIP at this time.Attached is report is a copy
of the Palos Verdes Drive Ea Palos Verdes Drive South Roadway S "ization Project
Fact Sheet.
in User Fee,which generates r nue totaling about $1.2 million annually,
will expire in '.This revenue is deposited I the Water Quality Flood Protection
(WQFP)fund for "provement and maintenanc he City's storm drain facilities.
The draft 5-Year Storm mmittee on May 10th was
nearly identical to the plan p ,nted a year ago.During its ting on May 10th,the
Committee suggested that staff valuate the inclusion of sev of the "original 38
projects"in FY13~14 and FY14~15 0 Plan.Accordingly,Staff ha onsidered and
luded certain projects In FY12~13,~14 and FY14-15.A dese . n of those
p .cts are presented below.Staff has als ~considered the timing and a oach for
dev 'ing a complete master plan of drainag ,described below.Once th an is
comple the priority of all projects Included in the ar Storm Drain Plan may eli e.
Additional e funding needs of the top priority San mon Stabilization Project m
affect this Pia .
Drainage Master Plan Program
The Drainage Master Plan Program seeks to do two things.First,a planning document
would be prepared during FY1 0-11 to guide staff in developing project programming.Staff
has re-programmed the Los Verdes project allocation and other projects savings to fund
the preparation of the planning document.Second,a data collection and retention system
would be implemented that would allow for efficient and systematic management of the
stormwater system into the future that would be Integrated into the City'S existing
Geographic Information System ("GIS")as its data backbone.$40,000 is already included
in the FY09-1 0 bUdget of the General Fund that will be used to facilitate integration of the
new data into the GIS system.
The current planning document for the City's storm drain system is the Update to the
Master Plan of Drainage,prepared in 2004 by a consultant.It was an update to a previous
plan,prepared by the same consultant in 1998.The update in 2004 added to the storm
10-29
Exhibit B
Attachment C
WATER QUALITY AND FLOOD PROTECTION PROGRAM-ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 10 of 13
drain inventory to reflect projects that had been recently completed.It also included a
revised hydrologic and hydraulic analysis for the pipes to determine where hydraulic
deficiencies in the system occur.However,no assessment of the condition of the pipes
was made at that time.All the pipes in the inventory (atlas)were assumed to be fully
operable and in an adequate state of repair.Based on this analysis,the consultant
developed a list of hydraulically deficient drains,a prioritization scheme based on that and
estimated costs.This list became the basis for the projects identified at the implementation
of the WQFP Program.
The basic inadequacy of the 2004 master plan update was that it did not address the
physical condition of the pipes but merely addressed the hydraulic issues.Since 2004,a
number of deficiencies in the physical condition of the pipes and channels have been
identified and many of them addressed through new construction and lining projects.
However,at this time,many deficiencies remain.Some are known and some unknown,
due to both hydraulics and serviceability.In addition,as a given storm drain is modified,it
may affect the characteristics of runoff on downstream systems.In order to capture these
system changes and incorporate conditional deficiencies in the planning process,staff
believes it is important to systematically document the existing conditions,update the
analyses of the system,develop costs of correction and levels of risk associated with
deficiencies,and use that data to develop project priorities and work plans.This would be
accomplished by development of a Drainage Master Plan Program.
In order for the master plan to be comprehensive,it should include verified inventory data,
data on the condition of pipes,revised hydrologic and hydraulic calculations and models as
required,estimates of costs of both corrective measures and risks of waiting,and a
scheme by which projects can be prioritized.
Further,to make the master plan useful in the future,it should be able to be updated to
reflect work of new drainage and development projects,and discovery of new pipe
conditions.Again,the backbone of the master plan would be the City's GIS system,which
would store atlas information,archived records of construction and maintenance,and
updated inspection footage.The GIS platform is already being used by the City,including
some atlas information of the storm drains.The new master plan information would be
added to this,along with future data obtained from new projects,routine field inspections
and reported problems.An effort would be made annually to update the GIS system with
data created and collected throughout the year.
Based
Committee
including the fo
.d by the Comml members du the
ing conducted ay 10th ,Staff has re the 5-YearSto
'ng storm drain .ts:
10-30
Exhibit 8
Attachment D
Excerpt from City of Rancho Palos Verdes FY10-11 DRAFT Capital Improvement
Plan
PROJECT:
TYPE:
LOCATION:
DEPARTMENT:
DESCRIPTION:
HAWTHORNE BLVD.
Storm Drain System
Project Area 10
Public Works
This project will improve drainage across Hawthorne Boulevard by
replacing two existing 18"pipes with one 24"and one 30"Rep
pipes.There will be two separate lines crossing Hawthorne
Boulevard from north to south.Phase I of the project is planned for
FY 10-11 and Phase II will be completed in FY 11-12.
PROJECT COST ESTIMATES (IF KNOWN)
CATEGORY YEAR 1 YEAR 2
ACQUISITION
ENGINEERING/DESIGN
CONSTRUCTION
PROJECT MANAGEMENT/OVERSIGHT
LEGAL
TOTAL $370,000 $200,000
IMPACT ON OPERATING BUDGET
N/A
JUSTIFICATION FOR INCLUSION ON 6 YEAR CIP
YEAR 3 YEAR 4 YEARS
SAFETY X
SUPPORTS ESSENTIAL CITY SERVICES
SUPPORTS TACTICAL PLAN GOALS X
OTHER PROJECT INFORMATION:
MAP
ECONOMY AND EFFICIENCY
OUTSIDE FUNDING COMMITIED/ELIGIBLE
COMMUNITY QUALITY/SUSTAINABILITY X
Page 34 of 87
10-31
Annual Report
for the
Storm Drain User Fee
FY 2010·11
For the
City of Rancho Palos Verdes
Los Angeles County,California
June 14,2010
Exhibit C
10-32
City of Rancho Palos Verdes
Storm Drain User Fee
Annual Report -FY 2010-11
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
Q:\RPV\SD Fee Admin\FY 1O-II\reports\SD Fee Rpt 10-11 14junlO.doc
June 14,2010
Exhibit C
10-33
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report -FY 2010-11
FY 2010·11 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~~~
';;·'7
BY:Joan E.Cox
R.C.E.No.41965
June 14,2010
I HEREBY CERTIFY that the enclosed Annual Report,together with Assessment Roll thereto attached,
was filed with me on the day of _,2010.
Carla Morreale,City Clerk,
City of Rancho Palos Verdes
Los Angeles County,California
By _
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 __dayof ,2010.
Carla Morreale,City Clerk,
City of Rancho Palos Verdes
Los Angeles County,California
By _
Q:IRPVISD Fcc AdminlFY 1O-11lrcportsISD Fcc Rpt 10-11 14junlO.doc Exhibit C
10-34
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report -FY 2010-11
INTRODUCTION
June 14,2010
Page 2
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 2010-11 (July 1,2010 through
June 30,2011),and,if so,the rate per Equivalent Residential Unit for Fiscal Year 2010-11.In
making its determinations,the City Council will take into account the current and projected revenues
of the City for Fiscal Year 2010-11,including but not limited to,property taxes,sales taxes and
transient occupancy taxes;the current and projected expenditures of the City for Fiscal Year 2010-
Il,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 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.
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.
Q:\RPV\SD Fee Admin\FY 1O-11\reports\SD Fee Rpt 10-11 14junlO.doc Exhibit C
10-35
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report-FY 2010·11
COST ESTIMATE
June 14,2010
Page 3
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 (7/1/10)
ESTIMATED REVENUES
Annual Fee Levy
Interest Earnings
City Contribution
ESTIMATED EXPENDITURES
Storm Drain Master Plan
Backbone Projects
Pipe Lining
Secondary Projects
Miscellaneous Repairs &Maintenance
Filtration Device Installation
Reserve for Anticipated Additional Costs
Adm inistration (contract/staff engineer)
ENDING FUND BALANCE (6/30/11)
The ending fund balance constitutes a Reserve for Future Projects.
Q:IRPV\SD Fee AdminlFY 1O-lllreportslSD Fee Rpt 10-11 14junlO.doc
$422,254
$1,339,556
$2,100
$0
$1,341,656
$125,000
$350,000
$314,617
$370,000
$237,687
$41,000
$0
$221,314
$1,659,618
$104,292
Exhibit C
10-36
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report-FY 2010-11
ANNUAL FEE RATE CALCULATIONS
June 14,2010
Page 4
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 stiII 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.
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 Percentage SFR Size Ranges
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
Q:IRPv\SD Fee AdminlFY 10-1 llreportslSD Fee Rpt 10-11 14junIO.doc Exhibit C
10-37
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report -FY 2010-11
June 14,2010
Page 5
does not include any City-maintained infrastructure,then they are not included in the fee.These
areas,which consist of approximately 3,042 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.
Table 3-Drainage Unit Summary Table
Land Imperv.Drainage
Use Parcels Acreaae Percent Units ERU Land Use Descriotion
SFR1 1,113 162.57 74.0%120.056 1,017.4318 SFR:0.01 -0.16 acres (-0 sf --7,012 sf)
SFR2 1,901 350.02 58.0%202.867 1,719.2609 SFR:0.161 -0.20 acres -7,013 sf --8,755 sf)
SFR3 3,094 736.16 48.5%357.093 3,026.2527 SFR:0.201 -0.28 acres -8,756 sf --12,239 sf)
SFR4 2,794 1,101.23 41.0%448.470 3,800.5982 SFR:0.281 -0.54 acres -12,240 sf--23,565 sf)
SFR5 944 741.69 34.5%*212.777 1,803.1950 SFR:Q541-2~9acres -23,566 sf --130,680 sf)
SFR6 10 52.38 actual*3.551 30.0930 SFR:3.0 acres and greater
CNDO 1,846 139.48 actual*95.727 811.2726 Condominiums
MFR 38 50.77 actual*40.501 343.2288 Multi-Familv Residential
COM 45 152.73 actual*76.364 647.1524 Commercial
INST 20 114.80 actual*64.692 548.2371 Churches,Private Schools,Institutions
GOV 47 488.25 actual*120.255 1,019.1098 Government-owned oarcels
11,852 4,090.09 1,742.353 14,765.8323
*the actual impervious percentages have been used for these parcels
*SFR5 parcels>.75 AC are actual impervious
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 2010-11 and shows the
actual proposed Fee Rate.
Table 4 -Annual Fee Rate
CPI CPI 2%Max.Actual
Increase Rate Rate Rate Rate
Base Year -FY 2006-07 $86.00 $86.00
FY2007-08 3.8%$89.27 $87.72 $87.72 $87.72
FY2008-09 3.3%$90.61 $89.47 $89.47 $89.47
FY 2009-10 0.0%$89.47 $91.26 $89.47 $89.47
FY 2010-11 1.4%$90.72 $91.26
$90.72 $90.72
Q:\RPV\SD Fee Admin\FY la-II \reports\SD Fee Rpt 10-11 14jun 10.doc Exhibit C
10-38
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report -FY 2010-11
June 14,2010
Page 6
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 I of each year,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.
Table 5-Sample Calculations
Est FY 10-11 Annual
Land Use Parcel Parcel Imperv.Drainage Fee Rate/ERU
Designation Area (sf)Area (ac)x Percent =Units /0.118 =ERU's $90.72
SFR1 3,500 0.08 x 0.740 =0.059/0.118 =0.5000 $45.36
~.~--------,--
SFR2 7,400 0.17 x 0.580 =0.099/0.118 =0.8390 $76.11
SFR2 8,300 0.19 x 0.580 =0.110/0.118 =0.9322 $84.57
SFR3 9,200 0.21 x 0.485 =0.102/0.118 =0.8644 $78.42
SFR3 10,000 0.23 x 0.485 =0.112 /0.118 =0.9492 $86.11
SFR3 11,300 0.26 x 0.485 =0.126/0.118 =1.0678 $96.87
SFR4 13,500 0.31 x 0.410 =0.127/0.118 =1.0763 $97.64
SFR4 17,000 0.39 x 0.410 =0.160/0.118 =1.3559 $123.01
---_._-----------
SFR4 21,400 0.49 x 0.410 =0.201 /0.118 =1.7034 $154.53
~---.,_.,-_._-~,_.__.-
SFR5 52,300 1.20 x 0.345 =0.414 /0.118 =3.5085 $318.29
r---~
CNDO*1,307 0.03 x 0.800 =0.024 /0.118 =0.2034 $18.45
CNDO*3,049 0.07 x 0.850 =0.060 /0.118 =0.5085 $46.13
Non-SFR 13,068 0.30 x 0.820 =0.246/0.118 =2.0847 $189.12
I--~
Non-SFR 13,068 0.30 x 0.700 =0.210/0.118 =1.7797 $161.45
--_.,_.
Non-SFR 29,185 0.67 x 0.350 =0.235/0.118 =1.9915 $180.67
----~_..•__.,-----,--
Non-SFR 29,185 0.67 x 0.700 =0.469/0.118 =3.9746 $360.58
Non-SFR 71,874 1.65 x 0.650 =1.073/0.118 =9.0932 $824.94_.._,._--
Non-SFR 71,874 1.65 x 0.850 =1.403/0.118 =11.8898 $1,078.64---_.._-~-----_._,-_..__......_--
Non-SFR 135,907 3.12 x 0.400 =1.248 /0.118 =10.5763 $959.48
----
Non-SFR 135,907 3.12 x 0.600 =1.872 /0.118 =15.8644 $1,439.22
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 untts in the complex.
The Preliminary Fee Roll,which is a listing of each parcel to be charged a fee and maximum and
actual fee for FY 2010-11,is on file in the office of the City Clerk.
Q:\RPV\SD Fee Admin\FY 1O-11\reports\SD Fee Rpt 10-11 14junlO.doc Exhibit C
10-39
City of Rancho Palos Verdes
Water Quality and Flood Protection Fee
Annual Report -FY 2010-11
Appeals Process
June 14,2010
Page 7
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.
b.The Assessor's Parcel Number (APN)of the property in question.
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 (Le.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 of receipt 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 Staff s initial
review decision.The Director will notify the property owner in writing within four (4)
weeks from the date of receipt 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.
Q:IRPv\SD Fee AdminlFY 1O-lllreportslSD Fee Rpt 10-11 14junlO.doc Exhibit C
10-40
CITY OF
MEMORANDUM
Exhibit D
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT
COMMITTEE FOR THE WATER QUALITY AND FLOOD
PROTECTION PROGRAM
DENNIS McLEAN,DIRECTOR OF FINANCE AND
INFORMATION TECHNOLOGY
MAY 10,2010
WATER QUALITY AND FLOOD PROTECTION PROGRAM -
FY09-10 UPDATE
Project Managers:Andy Winje,PE Associate Engineer
Ron Dragoo,PE,Senior Engineer
BACKGROUND AND DISCUSSION
This report includes a brief update regarding the major projects included in the Water
Quality and Flood Protection program in addition to highlights from the FY09-10 program.
PROGRAM HIGHLIGHTS
San Ramon Canyon Stabilization Project
The City allocated $1.2 million for the completion of the Project Study Report (PSR)for the
San Ramon Canyon Stabilization Project (a/k1a as the Palos Verdes Drive East
(PVDE)/Palos Verdes Drive South (PVDS)Roadway Stabilization Project).The PSR will
provide a minimum of three preliminary alternative designs and environmental requirements
for each design alternative.This phase of the project should be complete within 12
months.This contract was awarded to Harris and Associates on March 16,2010.
The project is estimated to cost $19.5 million,and has been included in the City's Capital
Improvement Plan on the Unfunded Projects List.The City has taken a collaborative
approach with the City of Los Angeles and Los Angeles County to request federal funds for
the San Ramon Canyon Stabilization Project.All three government agencies signed a
letter of cooperation pledging their collective commitment to work together to insure that
these vital transportation routes remain safe and viable.The letter was signed by RPV
10-41
Exhibit D
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09-10 UPDATE
May 10,2010
Page 2 of 5
Mayor Steve Wolowicz,L.A.Councilwoman Janice Hahn and L.A.County Supervisor Don
Knabe and submitted to Congressman Dana Rohrabacher in December 2009.
Congressman Dana Rohrabacher visited the project site in August 2009,and immediately
recognized the threat,and therefore,has included the project in his High Priority Project
portfolio for the reauthorization of SAFETEA-LU (a federal transportation bill in which
projects are authorized and funded)this year.The City has received statewide and
regional support for the project including letters from Tony Strickland,CA State Senate,
Roderick D.Wright,CA State Senate,Alan Lowenthal,CA State Senate,Bonnie
Lowenthal,CA State Assembly,Ted Lieu,CA State Assembly,Don Knabe,Los Angeles
County Supervisor,and Janice Hahn,Los Angeles City Councilwoman.Please see the
attached fact sheet for additional information about the project.
McCarrrell Canyon
The Notice of Completion for the McCarrell Canyon project was presented to the City
Council on November 17,2009.The project reached substantial completion in April,just 24
months after its commencement.The $7.4 million project was designed to convey water
from a 100-year storm from both the McCarrell Canyon and Barkentine Canyon to the
beach with the expectation of providing full protection to the neighborhoods.Upon
completion of this project,miscellaneous tasks have been identified to clean up the
surrounding project site.The amount of$167,000 was carried over to FY09-10 to complete
incidental site Clean-up work,including undergrounding the utilities.The City was granted
the APWA achievement award for the project.
PROJECT UPDATES
Project Name:San Ramon Canyon Stabilization Proiect
Project Area:Proiect Area 3
Budgeted Cost:$1,152,000
Contract Award:$506,300
Total/Estimated Costs:TBD
Percentaae Completion:0%
Proiect Description:
A Request For Proposals was issued and qualified firms interviewed in November 2009 for the
completion of a Project Study Report (PSR).A Professional Services Contract was awarded to Harris
and Associates on March 16,2010 for the preparation of the Project Study Report.The PSR will
identify at least three preliminary design options and provide environmental requirements for each
design alternative.This phase of the project should be complete within 12 months.City Staff and
Elected Officials are actively pursuing Federal funding opportunities.A fact sheet about the project
has been developed and is available to all interested parties (see attached).
10-42
Exhibit 0
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09-10 UPDATE
May 10,2010
Page 3 of 5
Project Name:Catch Basin Filtration Devices
Project Area:Proiect Area 12
Budgeted Cost:$205,000
Contract Award:TBD
Final/Estimated Costs:TBD
Percentaae Completion:0%
Project Description:
Staff has deferred advertising the catch basin filtration project in the north east portion of the city.
This area of the City was identified to address the trash problems at Lake Machado in Los Angeles.
Due to problems with performing work on catch basins that are maintained by Los Angeles County,
work on this project had to be delayed to the 2009-2010 Fiscal Year.Procedures for the installation
of best management practice devices for storm drain structures within Los Angeles County Flood
Control District Facilities have recently been published.The Project Plans and Specifications are
being revised to include these new requirements.The Project will be advertised in May and a
contract is expected to be awarded in June 2010.The estimated cost of this proiect is $200,000.
Proiect Name:Los Verdes Golf Course
Project Area:Project Area 10
Budgeted Cost:$95,000
Contract Award:TBD
Final/Estimated Costs:TBD
Percentaae Completion:0%
Project Description:
This is a Los Angeles County project.The originally proposed share of project cost was 22%by the
City of Rancho Palos Verdes.Storm drain improvements behind homes on Calle De Suenos were
installed by the County of Los Angeles during this past year.Albeit only half of the system originally
proposed by Los Angeles County was installed,the improvements should improve how runoff from
their facility is managed.The remaining half of the improvements were not installed by the County
due to the lack of adequate right of way to install a standard county storm drain through private
property.To date,Los Angeles County has not invoiced the City requesting reimbursement for the
City's share of cost for the construction that has been completed.Therefore,staff believes that it is
prudent to carry forward the $95,000 included in the FY07-08 budget as the City's share of
construction costs for this project.
10-43
Exhibit 0
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09-10 UPDATE
May 10,2010
Page 4 of 5
Project Name:PVDE Drainage Inlets
Project Area:Project Area 6
Budaeted Cost:$60,000
Contract Award:TBD
Total/Estimated Costs:TBD
Percentaae Completion:0%
Project Description:
This project was presented as the first phase of a five year project to address roadway drainage
issues along Palos Verdes Drive East.Subsequent to establishing this project,Public Works
recommended and the City Council approved a study of the Palos Verdes Drive East to evaluate the
adequacy of the roadway to accommodate its many varied uses (Le.vehicle traffic,equestrian and
cycling)and provide recommendations to increase safety.If curb improvements were installed at this
time,it is likely that the improvements would not accommodate future safety recommendations.No
action has been taken and this project is being included with improvements that are anticipated on
Palos Verdes Drive East to better facilitate surface drainage while accommodating the multiple uses
of this particular roadway.Staff recommends that the budgeted funds identified for curb
improvements be carried forward to next year's budget when the larger roadway project will likely be
conducted.A roadway project which helps address drainage issues along PVDE is currently being
designed.Improvements are anticipated to be included in the project that will better channel water
away from private property.Construction is tentatively anticipated during the summer of 201 O.
Proiect Name:Miscellaneous Repairs &Storm Drain Filtration Maintenance
Project Area:Proiect Area 12
Budgeted Cost:$326,495
Contract Award:$152,400
Total/Estimated Costs:$326,000
Percentaae Completion:10%
Proiect Description:
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
three years.
>-All of the filters in the 111 catch basins with filtration and trash screens installed in the City
are scheduled to be replaced;
>-All Catch Basins in the City have been cleaned;
>-Large Diameter Storm Drain Maintenance projects have been identified on PVDE,
Hawthorne Blvd.,and Indian Peak Rd.and will be repaired through the lining project this year
>-44 storm drain outlets are identified and scheduled to be cleaned and repaired throughout
the City this year
>-Cleaned and video inspected 26 sections of CMP.
Other miscellaneous repairs have also been including repairs at Seacove and Packet Road and an
18 inch drain on Palos Verdes Drive South.
10-44
Exhibit D
WATER QUALITY AND FLOOD PROTECTION PROGRAM -FY09·10 UPDATE
May 10,2010
Page 5 of 5
Proiect Name:Via Colin ita Vickery Canyon
Proiect Area:Proiect Area 7
Budgeted Cost:$251,500
Contract Award:$85,475
Total/Estimated Costs:$251,500
Percentaae Completion:25%
Proiect Description:
One of the pipelines draining into the Vickery Canyon basin runs along Palos Verdes Drive East.A
project has been completed connecting additional catch basins to this pipeline.Construction on this
project began in January and was completed in March.The Project cost was $85,475.
Additional pipelines in the Vickery Canyon basin will be rehabilitated this year and are in various
stages of design.Although cost estimates are not fully developed,construction on this project is
expected to beQin this year;
Project Name:Storm Drain LininQ
Project Area:Project Area 12
Budgeted Cost:$524,822
Contract Award:TBD
Total/Estimated Costs:TBD
Percentage Completion:0%
Project Description:
As a result of the inspections performed on the large diameter storm drain pipes,seven storm drain
lines were determined to need some form of work.One of the seven (the one-hundred twenty inch
diameter pipe running under PVDS that was repaired last year)pipes identified became an
emergency repair when holes in the pipe were discovered during a follow up inspection.Three large
diameter storm drains are scheduled to be repaired through this year's lining program,and the
remaining three large diameter pipes needing repairs will be inspected again next year and possibly
scheduled for repairs.
Following this year's rains,additional work is required on many pipe inverts and this work is currently
underway.Plans and specifications for the FY09-10 lining project are in process.Twenty-six lines
have been identified for lining this year.Three large diameter lines are included,and the remaining
twenty-three are thirty inches and smaller.Advertising for this year's project has been delayed to
May to accommodate repair work.A Project award is likely to be recommended at the June 22,2010
City Council meetinQ.
ATTACHMENTS:
City of Rancho Palos Verdes Storm Drain Costs (FY09-10 through FY14-15)
10-45
CITY OF
MEMORANDUM
Exhibit E
RANCHO PALOS VERDES
TO:HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT
COMMITTEE FOR THE WATER QUALITY AND FLOOD
PROTECTION PROGRAM
FROM:DENNIS McLEAN,DIRECTOR OF FINANCE AND
INFORMATION TECHNOLOGY
RAY HOLLAND,DIRECTOR OF PUBLIC WORKS
DATE:MAY 26,2010
SUBJECT:WATER QUALITY AND FLOOD PROTECTION PROGRAM -
PUBLIC HEARING FOR ANNUAL USER FEE RATE -FY10·11
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
draft 2010 Five-Year Financial Model ("Model")and excerpts from the draft Capital
Improvement Program ("CIP").
2)Conduct a public hearing to consider Staffs recommendation to increase the annual
Storm Drain User Fee (the "Fee")by 1.4%,from $89.47/ERU to $90.72/ERU,based
upon the change in CPI for the 12 months ended February,2010,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 Staff's 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.
10-46
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 2 of 13
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
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 cons truction contracts);
~the proposed budget (including maj or 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 fisc al years;and
~Staff's 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 May 10,2010
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 User Fee ordinance to
include a voter enacted Oversight Committee and a 1O-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 1O-year sunset established with the passage of Measure C,the maximum
10-47
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 3 of 13
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.
2010 City Council Tactical Goals
As part of the 2010 Tactical Planning Workshop,the City Council set the following goal with
benchmarks directly related to CIP program,including the storm drain program:
CAPITAL IMPROVEMENT PROGRAM (CIP)GOAL
GOAL:Implement the Five-Year Capital Improvement Program to renew,improve
and maintain the City's infrastructure and facilities.
SUB-GOAL:Implement the San Ramon Canyon Stabilization Project.
MILESTONES:
1.By May 1,2010,staff will conduct a study session with the City Council to review
costs and discuss funding options specific to a potential citywide sewer fee to fund
maintenance efforts and capital improvements to the City's Sanitary Sewer System.
2.By December 31,2010,conditioned on agreem ent that may be needed with the
City of Los Angeles and the County of Los Angeles,initiate pre-design for the San
Ramon Canyon Stabilization Project.
3.In the event that federal funding is not available for San Ramon Stabilization
Project,staff will identify and report to the City Council on alternatives for addressing
the scope and funding of the Project.
4.By December 31,2010,staff will make a presentation to the City Council
regarding the status of developing a plan in conjunction with the City of Rancho
Palos Verdes and the City of Los Angeles to address other downstream
improvements that are needed to minimize flooding on 25 th Street.
5.By June 30,2011,complete implementation of the FY 09-10 Arterial Streets
Pavement Management Program so that 90%of the City's arterial roadway
inventory will be in good to excellent condition.
6.Provide a report to the City Council on the specific storm drain work to be
performed in FY1 0-11 at the Budget Workshop,currently scheduled for May 22,
2010.
7.Provide a report to the City Council on the specific infrastructure and
recreational improvements that will be performed within the Palos Verdes Nature
Preserve in FY10-11 at the Budget Workshop,currently scheduled for May 22,
2010.
10-48
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 4 of 13
NEW CIVIC CENTER GOAL
GOAL:Create a New Civic Center.
SUB-GOAL:Construct the first Rancho Palos Verdes City Hall.
MILESTONES:
1.By March 31,2010,develop a realistic schedule,including incremental steps such
as needs assessment,space planning,site planning,financing options,etc.,to
create a new Civic Center.
2.By April 30,2010,identify estimated costs and specific tasks required to create a
new Civic Center.
3.By May 31 ,2010,develop a public informational program regarding the need for a
new City Hall.
4.By June 30,2010,identify potential funding sources,including but not limited to
private-public partnership and potential private donations,to develop a new City
Hall.
5.By June 30,2010,the Upper Point Vicente/Civic Center Master Plan Council
subcommittee will tour and meet with local representatives of at least two other
California cities that have recently completed new civic center projects to discuss
financing mechanisms,design considerations and other related is sues.
6.By September 30,2010,present proposed modifications to the existing
Program of Utilization for the Upper Point Vicente property to the National Park
Service for approval..
7.By March 31,2011,provide a report to the City Council regarding the most likely
plans and estimated cost ranges for each major element of a new Civic Center,
including adding a Sheriff sub-station and/or the location of other emergency
support services such as an ambulance station on the property.
8.By June 30,2011,complete the necessary steps to record an Alta Survey Map for
the Upper Poi nt Vicente property.
The City Council's 2010 Tactical Goals establish the San Ramon Canyon Stabilization
project and the Civic Center project,both unfunded,as the highest priorities.
FY10-11 Budget and 2010 Model
The current version of Staff's proposed,draft FY10-11 budget for the General Fund is
balanced and has been included in the 2010 Five Year Financial Model (the 2010 Model)
that was distributed to the City Council in anticipation of the Budget Workshop conducted
10-49
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 5 of 13
on May 22,2010.Staff will advise the Oversight Committee regarding any further direction
regarding the draft FY10-11 Budget and the 2010 Model at this Oversight Committee
meeting.
The City Council adopted a formal General Fund Reserve Policy on December 2,2008,
requiring the City to maintain a minimum fund balance of at least 50%of annual operating
expenditures in the General Fund.The current draft of the 2010 Model indicates that
General fund reserves are expected to exceed the reserve policy level of 50%of annual
General Fund expenditures during FY10-11 By about $1.7 million.
The draft 2010 Model includes the "funded"CIP projects last approved by the City Council
on March 16,2010.The estimated cost of unfunded CIP projects ranges between $71
million and $108 million.The following excerpt from the staff report,dated May 22,2010,
offers a summary of the draft 2010 Model:
"The current draft of the 2010 Model indicates that General Fund Reserves will
continue to grow over the next five years.This is largely due to expected continued
receipt of transient occupancy tax (TOT)revenue from the Terranea Resort,which
has been included in the Model now that the Resort has opened.Staff continues to
recommend that the City Council set-aside Terranea TOT for capital projects
(including the San Ramon Canyon Stabilization and Civic Center projects),as
opposed to the expansion of programs and services in the operating budget.In its
Draft FY10-11 Budget staff report,dated May 22,2010,Staff has provided an
overview of a proposed revision of the City Council Policy No.41:Reserve Policies
to memorialize this continuing recommendation.
Staff has included the following uses of TOT in the 2010 Model:
~FY10-11 improvements to Lower Hesse and Grandview Parks ($2 million);
~FY11-12 Civic Center planning and infrastructure improvements ($1 million);
and
~FY11-12 matching contribution for various grant-funded park improvements
($145,000).
The uses of TOT revenue summarized above have been included as "funded"
projects in the updated 2009 CI P as last approved by the City Council on March 16,
2010."
Proposed Reserve Policy Revisions
Staff has developed two proposed revisions to Policy No.41.The goal of the revisions is
to:1)to establish an annual process to consider what portion of estimated TOT revenue
that is included in the budget for the next fiscal year,if not the entire amount,that shall be
transferred to the CIP Fund to be set-aside and accumulated for known,high-priority,
unfunded capital projects,future unknown capital projects and significant emergency
projects (e.g.San Ramon Canyon Stabilization,and Civic Center);and 2)establish a clear
10-50
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 6 of 13
policy statement for the Water Quality Flood Protection program that user fee monies not
earmarked for known high-priority projects,repairs and maintenance should be
accumulated for future projects (e.g.San Ramon Canyon Stabilization).Staff has
underlined and used italic font to highlight the proposed revisions of Policy No.41 below:
A.General Fund
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.
In conjunction with the preparation of the annual update of the City's Capital
Improvement Program,the Five-Year Financial Model and the proposed
budget,Staff shall make a recommendation to the City Council of the amount
of General Fund reserves that shall be transferred to the Capital
Improvement Fund reserve.
D.Water Quality Flood Protection Fund
Project spending in the Water Quality Flood Protection (WQFP)fund
fluctuates year to year.The Storm Drain User Fee is a source of funding for
these projects.To avoid a fluctuating Fee,the City will maintain retained
earnings over the life of the WQFP fee to establish rate stabilization and
provide funding for scheduled projects and maintenance,in part or in full.
Subject to the City Council's direction at its Budget Workshop on May 22 nd ,Staff expects to
present the proposed revision to the Reserve Policy to the Oversight Committee later this
year.However,Staff will forward any first impressions or recommendations that the
Committee may offer if the Committee wishes.
Staff's Finding and Recommendation
General Fund revenues will not be sufficient to fund the Storm Drain program;therefore,
continuing and increasing the Fee is necessary for the following reasons:
1)Property tax represents about half of General Fund revenue and any small variance
in the percentage increase of property assessments has a large cumulative effect on
the five years of the Model.Staff has acquired property transfer information from a
10-51
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 7 of 13
land management database that indicates a property tax increase of about 0.5%for
FY10-11.Staff has also received information that there is no expected inflationary
increase of property assessments for FY1 0-11.Therefore,Staff has assumed an
overall property tax increase of 0.5%in the draft FY1 0-11 budget.
2)When the WQFP program was established in 2005,a list of 38 projects totaling
about $20.1 million was identified and included in the original program.Of those
projects,projects with an estimated total cost of $9.9 million remain unfunded
through FY14-15.Since 2005,an additional $1.2 million of essential small projects
that were not in the original plan have been identified and funded.The original 2005
program also included about $4.6 million of pipe lining over 30 years.Through
FY14-15,about $3.2 million of pipe lining will have been funded over a period of 10
years;a significantly accelerated rate.An allocation of $585,000 over 2 years has
been included in the 5-year plan to build a dynamic Drainage Master Plan Program.
It is anticipated that the Drainage Master Plan Program will identify additional
projects not included in the 5-Year Storm Drain Plan and provide for future
management of the storm drain system by incorporating the inventory,condition
assessments and analysis into the City's GIS program.
In concurrence with the comments offered by the members of the Oversight
Committee during the May 10th meeting,Staff believes that it is important to disclose
that the actual cost of unfunded storm drain projects beyond 2016,the year the Fee
shall sunset,likely exceeds the $9.9 million included in the attached 5-Year Storm
Drain Plan.Additionally,Staff has provided a rough estimate for the cost of the
proposed "unfunded"San Ramon Canyon Stabilization Project in the amount of
$19.5 million.
A summary of the "unfunded"storm drain projects follows:
"Unfunded"-San Ramon Canyon Stabilization Project $19,500,000
"Unfunded"-Remaining uncompleted projects included
in the Original 38 projects in 2005 9,977,789
"Unfunded"unidentified projects -emegencies ?
"Unfunded"projects -identified as a result of the
proposed master plan of drainage ?
TOTAL $29,477,789
3)As stated previously,the 2010 Tactical Goals establish the San Ramon Canyon
Stabilization project and the Civic Center project,both unfunded,as the highest
priorities.The preliminary estimates of costs,as reported in the CIP,range between
10-52
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 8 of 13
$16.5 million and $19.5 million for the San Ramon Canyon Stabilization Project and
between $23.5 million and $43 million for the Civic Center Project.
4)In light of the significance of the multi-million amount of unfunded CIP projects,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 to $90.72 for the FY10-11.
Reports and Meetings Prior to the Public Hearing for FY10-11
Staff presented a FY09-10 update regarding the Water Quality and Flood Protection
program (the "Storm Drain program")in a Memorandum,dated January 18,2010,sent via
email.Staff updated the Committee again on May 10,2010,(see attached staff report)
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 FY1 0-11 ,as well as
the draft 5-Year Storm Drain Plan.The Committee members asked questions,several that
staff deferred and have attempted to answer in this report.The Committee also offered
comments and suggestions,some which have been integrated into this staff report,as well
as the revised,draft 5-Year Storm Drain Plan.
San Ramon Stabilization Project
In past years,the San Ramon Canyon Stabilization Project has been included in this list of
updates.This project is very complex and has multiple jurisdictions involved including the
City of Los Angeles and Los Angeles County.
The re-authorization of the Surface Transportation Bill has presented a tremendous
opportunity for the City to apply for federal funding to assist with this project.The drainage
issues related to San Ramon Canyon have a direct impact on the stability and functionality
of Palos Verdes Drive South and Palos Verdes Drive East.The potential for a catastrophic
roadway failure is growing and could render both critical roadways unrecoverable if the
issue is not addressed.City staff has been working with Blais &Associates,Inc.a
consulting firm which specializes in assisting local governments in securing grant funding,
to apply for federal funds to pay for this project.
Congressman Rohrabacher is expected to include the project is his High Priority Project
portfolio for the reauthorization of SAFETEA-LU,which is a federal transportation bill
renewed every six years allowing for specific projects to be authorized and funded.
However,the Congressman has said such inclusion is on-hold at this time,subject to his
legislative negotiations.The project is estimated to cost $19.5 million,and RPV's federal
funding request is for $9.75 million.In December a three-way letter was signed between
RPV,the City of Los Angeles and Los Angeles County agreeing to collaborate to raise
funds to pay for the project.
10-53
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 9 of 13
The project has been divided into three phases and will likely take a number of years to
complete.In FY09-10 and FY1 0-11,the City Council allocated approximately $1.5 million
(including carry over money from FY08-09)to complete a Project Study Report which will
serve as the project initiation document that is submitted to State and Federal Agencies for
project funding.The contract that is expected to lead to design concept alternatives for the
project was awarded to Harris and Associates at the March 16,2010 City Council meeting.
This study is expected to take 6 to 8 months to complete.Phase II and Phase III have
been included on the unfunded list of the CI P at this time.Attached to this report is a copy
of the Palos Verdes Drive East &Palos Verdes Drive South Roadway Stabilization Project
Fact Sheet.
Storm Drain User Fee and FY10-11 Plan
The Storm Drain User Fee,which generates revenue totaling about $1.2 million annually,
will expire in 2016.This revenue is deposited into the Water Quality Flood Protection
(WQFP)fund for the improvement and maintenance of the City's storm drain facilities.
The draft 5-Year Storm Drain Plan that was presented to the Committee on May 10 th was
nearly identical to the plan presented a year ago.During its meeting on May 10th ,the
Committee suggested that staff re-evaluate the inclusion of several of the "original 38
projects"in FY13-14 and FY14-15 of the Plan.Accordingly,Staff has reconsidered and
included certain projects in FY12-13,FY13-14 and FY14-15.A description of those
projects are presented below.Staff has also re-considered the timing and approach for
developing a complete master plan of drainage as described below.Once the plan is
completed,the priority of all projects included in the 5-Year Storm Drain Plan may change.
Additionally,the funding needs of the top priority San Ramon Stabilization Project may
affect this Plan.
Drainage Master Plan Program
The Drainage Master Plan Program seeks to do two things.First,a planning document
would be prepared during FY1 0-11 to guide staff in developing project programming.Staff
has re-programmed the Los Verdes project allocation and other projects savings to fund
the preparation of the planning document.Second,a data collection and retention system
would be implemented that would allow for efficient and systematic management of the
stormwater system into the future that would be integrated into the City's existing
Geographic Information System ("GIS")as its data backbone.$40,000 is already included
in the FY09-10 budget of the General Fund that will be used to facilitate integration of the
new data into the GIS system.
The current planning document for the City's storm drain system is the Update to the
Master Plan of Drainage,prepared in 2004 by a consultant.It was an update to a previous
plan,prepared by the same consultant in 1998.The update in 2004 added to the storm
10-54
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 10 of 13
drain inventory to reflect projects that had been recently completed.It also included a
revised hydrologic and hydraulic analysis for the pipes to determine where hydraulic
deficiencies in the system occur.However,no assessment of the condition of the pipes
was made at that time.All the pipes in the inventory (atlas)were assumed to be fully
operable and in an adequate state of repair.Based on this analysis,the consultant
developed a list of hydraulically deficient drains,a prioritization scheme based on that and
estimated costs.This list became the basis for the projects identified at the implementation
of the WQFP Program.
The basic inadequacy of the 2004 master plan update was that it did not address the
physical condition of the pipes but merely addressed the hydraulic issues.Since 2004,a
number of deficiencies in the physical condition of the pipes and channels have been
identified and many of them addressed through new construction and lining projects.
However,at this time,many deficiencies remain.Some are known and some unknown,
due to both hydraulics and serviceability.In addition,as a given storm drain is modified,it
may affect the characteristics of runoff on downstream systems.In order to capture these
system changes and incorporate conditional deficiencies in the planning process,staff
believes it is important to systematically document the existing conditions,update the
analyses of the system,develop costs of correction and levels of risk associated with
deficiencies,and use that data to develop project priorities and work plans.This would be
accomplished by development of a Drainage Master Plan Program.
In order for the master plan to be comprehensive,it should include verified inventory data,
data on the condition of pipes,revised hydrologic and hydraulic calculations and models as
required,estimates of costs of both corrective measures and risks of waiting ,and a scheme
by which projects can be prioritized.
Further,to make the master plan useful in the future,it should be able to be updated to
reflect work of new drainage and development projects,and discovery of new pipe
conditions.Again,the backbone of the master plan would be the City's GIS system,which
would store atlas information,archived records of construction and maintenance,and
updated inspection footage.The GIS platform is already being used by the City,including
some atlas information of the storm drains.The new master plan information would be
added to this,along with future data obtained from new projects,routine field inspections
and reported problems.An effort would be made annually to update the GIS system with
data created and collected throughout the year.
Projects added to the 5-Year Storm Drain Plan
Based upon comments offered by the Committee members during the Oversight
Committee meeting conducted on May 10 th ,Staff has revised the 5-Year Storm Drain Plan,
inclUding the following storm drain projects:
10-55
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 11 of 13
PVDE Lower Switchbacks -$485,000 in FY12-13
This project will address the CMP's that provide drainage across the switchbacks.The
existing pipes have been in place for more than 60 years performing the task they were
originally designed for.The capacity of the pipes is undersized;therefore,larger sized
pipes are needed to adequately drain runoff from the roadway.The hydrology calculations
performed through the Drainage Master Plan Program are expected to validate such.The
inlet configurations designed and built by the County are simply depressed areas adjacent
to the roadway that do not provide any protection for pedestrian,bicycle or vehicular traffic.
Standard inlet catch basins and outlet pans will be installed through this project.
A drainage system is needed to collect runoff that exits Crest Road onto Palos Verdes
Drive East.Additionally the system will collect runoff along Palos Verdes Drive East to the
east of Casilina Drive (parallel to Narino Dr.)During heavy rains localized flooding can be
observed on Palos Verdes Drive East which creates a safety concern for motorists.The
hydrology calculations performed through the Drainage Master Plan Program will verify this
need.Standard catch basin inlets will collect runoff from the roadway which will be
transmitted through a mainline to the outlet structure which will be located to the south
opposite to the Casilina Drive intersection.
PVDS (North of Barkentine)-$446,000 in FY13-14
This project will address an undersized drain that crosses Palos Verdes Drive South
located to the east of Sea Cove Drive.The hydrology calculations performed through the
Drainage Master Plan Program will verify this need.The invert of this pipe was
reestablished sometime in the 1990s through Portland Cement Concrete Lining and the
pipe is in relatively good condition.There is no inlet or outlet associated with this system,
so they will need to be designed and installed.
South HawthorneNia Frascati Curb &Gutter -$440,000 in FY14-15
Localized flooding associated with runoff from the roadway will be corrected through a
project that will address the continuous flow of runoff through placement of a curb and
gutter system along Via Frascati.
May 10,2010 Meeting of the Oversight Committee -Follow-Up Regarding
Questions,Request for Additional Information and Comments
Question -Will the proposed Marymount Project have an Impact on the San Ramon
Canyon drainage corridor?
Answer -Not as presented in the Environmental Impact Report,nor based upon the
revisions under consideration by the City Council.The potential impacts on San Ramon
Canyon were fUlly considered in the preparation of the environmental documentation
prepared for the Marymount project.The Draft EIR (October 2007)and the Final EIR (May
10-56
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 12 of 13
2009)investigated the potential effects of the proposed Marymount project on the
environment,including impacts from stormwater runoff and construction activity on land
stability.To the extent that the proposed improvements might affect San Ramon Canyon
(and other slopes and drainage courses in the area),mitigation measures were identified to
reduce the severity of any potential impact to "less than significant",which is the lowest
possible rating.Site drainage that currently drains into San Ramon Canyon will be
collected and drained into a detention facility.The intent is to release post construction
drainage into the Ganado drainage system at the rate runoff is currently entering the
system so the system will not be over burdened by any added runoff generated from the
construction project.This will effectively reduce the tributary area to the Canyon.
Question -Why is the Paintbrush Canyon drainage system not included in the 5-yearplan?
Answer -The Paintbrush Canyon drainage system exists in the Redevelopment Agency
area of the City.Our best understanding of history is that the drainage system fell into a
state of disrepair quickly due to the significant rate of land movement and was abandoned.
The Improvement Authority of the City is responsible for maintaining RDA improvements.
Unfortunately,it does not currently have sufficient funding to maintain a replacement of the
Paintbrush Canyon drainage system which could cost $100,000 or more annually.
Notwithstanding such,Staff is gathering information regarding the draining issues and
possible funding alternatives and will report its findings to the Committee in the future.
If the WQFP were to take on this maintenance obligation for the Paintbrush Canyon
drainage systems,the approximate cost to maintain the system would represent roughly
8.3%of the funds collected through the User Fee.Staff does not recommend this action at
this time.
Question -Once approved by Congress,what is the term of an appropriation before it
lapses?
Answer -Staff re-directed this question to its grant consultant,Blais &Associates,and
received the following reply:(1)Water Resources Development Act (WRDA)-$9.75 million
request -Once approved by Congress,funding the request processes through the US
Army Corp of engineers;and (2)Reauthorization of SAFETEA-LU -$9.75 million request-
Federal transportation bill renewed every 6 years and are currently under consideration.
Funding is subject to the federal appropriation process of Congress.However,funding bills
are considered every two years for WRDA and annually for SAFETEA-LU.Funding,
accounting and compliance matters change from time to time and subject to federal audits
performed in conjunction with the City's independent audit.Generally,federal funds are
expected to be spent within 2-3 years of their advance.Some federal funds are paid on a
project reimbursement basis.
Question -Can a project location map be provided the Committee?
Yes -Projection location maps will be presented during the meeting and distributed to
10-57
Exhibit E
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
May 26,2010
Page 13 of 13
the Committee members.
Attachments:
Staff Report,Dated May 10,2010
5-Year Storm Drain Plan Through FY14-15
Excerpts from 2010 CI P -Attachment C (5 Year Capital Improvement Plan)and
Attachment D (Capital Improvement Plan -Unfunded Projects)
Excerpts from 2010 Draft Five-Year Financial Model-General Fund (Pages 2 -6)
10-58
CITY OF
MEMORANDUM
Exhibit F
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CHAIR AND MEMBERS OF THE OVERSIGHT
COMMITTEE FOR THE WATER QUALITY AND FLOOD
PROTECTION PROGRAM
DENNIS McLEAN,DIRECTOR OF FINANCE AND
INFORMATION TECHNOLOGY
RAY HOLLAND,DIRECTOR OF PUBLIC WORKS
JUNE 8,2010
WATER QUALITY AND FLOOD PROTECTION PROGRAM -
PUBLIC HEARING FOR ANNUAL USER FEE RATE -FY10-11
Staff Coordinators:
RECOMMENDATION
Ron Dragoo,PE,Senior Engineer
Andy Winje,PE,Associate Engineer
1)Receive,review and file the revised 5-Year Storm Drain Plan (the "5-Year Plan").
2)Conduct a "continued"public hearing to consider Staff's recommendation to
increase the annual Storm Drain User Fee (the "Fee")by 1.4%,from $89.47/ERU to
$90.72/ERU,the maximum annual rate per ERU,based upon the change in CPI for
the 12 months ended February 2010,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 Staff's 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.
10-59
Exhibit F
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
June 8,2010
Page 2 of 7
EXECUTIVE SUMMARY
Staff requests the Oversight Committee to consider its recommendation to increase the
Fee by 1.4%,from $89.47/ERU to $90.72/ERU,the maximum increase allowed.Based
upon an inquiry made by the Committee,Staff has obtained validation of the proposed
1.4%increase from Harris &Associates,the City's rate engineer,as well as the City
Attorney.
Prior to making its recommendation,Staff presented a FY09-1 0 update regarding the Water
Quality and Flood Protection program (the "Storm Drain program")in a Memorandum,
dated January 18,2010,sent via email.Staff updated the Committee again on May 10,
2010 (see attached staff report).The Committee conducted a public hearing on May 26,
2010 (see attached staff report);whereby,Staff presented an update of the draft budget for
the Storm Drain program for FY10-11,as well as the draft 5-Year Plan.At the public
hearing,the Committee offered comments and suggestions,some that have been
integrated into the revised 5-Year Plan for presentation during the "continued"public
hearing at this meeting on June 8,2010.
At this meeting,the Oversight Committee may elect to develop its Annual Report regarding
the Storm Drain Program,including its recommendation,if any,regarding the Fee rate for
FY10-11.If the Committee elects to do so,it must decide whether to recommend to the
City Council whether to:1)increase the Fee rate (but not to exceed $90.72/ERU);2)
decrease the Fee rate;or 3)leave the Fee rate @ $89.47/ERU.
In accordance with the City's Municipal Code,the Committee "shall consider the current
and projected revenues of the city for the upcoming fiscal year,including but not limited to,
property taxes,sales taxes and transient occupancy taxes;the current and projected
expenditures of the city for the fiscal year,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."
Staff believes that its presentation to the Oversight Committee made on May 10,2010 and
May 26,2010,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.
Staff's Finding and Recommendation
Staff believes that General Fund revenues will not be sufficient to fund the Storm Drain
program for the following reasons:
Slow property tax revenue growth -Property tax represents about half of General Fund
10-60
Exhibit F
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
June 8,2010
Page 3 of 7
revenue and any small variance in the percentage increase of property assessments has a
large cumulative effect on the five years of the Model.Staff has acquired property transfer
information from a land management database that indicates a property tax increase of
about 0.5%for FY10-11.Staff has also received information that there is no expected
inflationary increase of property assessments for FY1 0-11.Therefore,Staff has assumed
an overall property tax increase of 0.5%in the draft FY10-11 budget.
Unfunded infrastructure projects -During its Budget Workshop conducted on May 22,2010,
the City Council made decisions and provided Staff with direction to present a "balanced
budget"at a public hearing to be conducted on June 15,2010:
~Estimated revenue is expected to be about $21.7 million,including about $2 million
of TOT from Terranea Resort;
~Estimated expenditures and net transfers to and from other funds,including $3.8
million of transfers to Capital Improvement Projects fund (for capital projects)is
expected to be about $21.7 million;
~Capital projects requiring the use of General fund proceeds include $2 million for
improvements of Lower Hesse and Grandview parks,$1.5 million for the annual
residential pavement program &$500,000 for an upgrade of the ball field at Upper
Hesse Park and pedestrian (sidewalk)improvements along Hawthorne Boulevard
between PVDW and Crest;and
~Based upon the proposed FY 10-11 budget,staff expects that General fund reserves
will be about $10.3 million at the end of FY1 0-11;about $1.3 million in excess of the
Council's Reserve Policy threshold.
The 2010 Tactical Goals established by the City Council identifies the San Ramon Canyon
Stabilization project and the Civic Center project,both unfunded,as the highest priorities.
The preliminary estimates of costs,as reported in the CIP,range between $16.5 million and
$19.5 million for the San Ramon Canyon Stabilization Project and between $23.5 million
and $43 million for the Civic Center Project.Based upon the 2010 CIP,total unfunded
projects (including storm drains)exceed $108 million.
Unfunded storm drain projects and Fee sunset -When the WQFP program was established
in 2005,a list of 38 projects totaling about $20.1 million was identified and included in the
original program.Of those projects,projects with an estimated total cost of $10 million
remain unfunded through FY14-15.Since 2005,an additional $1.2 million of essential
small projects that were not in the original plan have been identified and funded.The
original 2005 program also included about $4.6 million of pipe lining over 30 years.Through
FY14-15,about $3.2 million of pipe lining will have been funded over a period of 10 years;a
significantly accelerated rate.
10-61
Exhibit F
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
June 8,2010
Page 4 of 7
In concurrence with the comments offered by the members of the Oversight Committee
during the May 10th meeting,Staff believes that it is noteworthy to report that the cost of
unfunded storm drain projects beyond 2016,the year the Fee shall sunset,will likely
exceed the $9.9 million included in the attached 5-Year Storm Drain Plan.Additionally,
Staff has provided a rough estimate for the cost of the proposed unfunded San Ramon
Canyon Stabilization Project in the amount of $19.5 million.
A summary of the "unfunded"storm drain projects follows:
"Unfunded"-San Ramon Canyon Stabilization Project $19,500,000
"Unfunded"-Remaining uncompleted projects included
in the Original 38 projects in 2005 9,977,789
"Unfunded"unidentified projects -emegencies ?
"Unfunded"projects -identified as a result of the
proposed master plan of drainage ?
TOTAL $29,477,789
July 6,2010 City Council Meeting -FY10·11 User Fee Rate Public Hearing
It's expected that the City Council will make its decision whether to collect the User Fee for
FY10-11 at the annual public (Fee)hearing expected to be conducted on July 6,2010.If
the Council elects to collect the Fee during FY1 0-11,it must decide whether to increase the
Fee rate (but not to exceed $90.72/ERU),decrease the Fee rate or leave the Fee rate @
$89.47/ERU.The City Council's decision will be based upon Staff's recommendation,any
recommendation by the Oversight Committee,its own review of the Fee rate,as well as
Staffs estimates of other revenue and expenditures (including the storm drain program)
and General fund reserves.
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
10-62
Exhibit F
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
June 8,2010
Page 5 of 7
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 st atus (i.e.design and cons truction contracts);
>-the proposed budget (including maj or 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 fisc al years;and
>-Staff's 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 May 10,2010 and
May 26,2010,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 1a-year sunset of the storm drain Fee.When
the Fee rate was established by the property owners in 2005,the total 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 1a-year sunset
established with the passage of Measure C,the maximum total Fees that could be
collected is estimated to be about $13 million.It appears as though it will be necessary to
secure other funding sources to continue the Storm Drain program when the Fee expires
on June 30,2016.
Revisions to the 5-Year Plan
The (attached)5-Year Plan has been revised to include the comments conveyed by the
Committee during the public hearing conducted on May 26,2010 and continued to June 8,
2010 (tonight).A reconciliation of the revisions made to the 5-Year Plan presented to the
Committee on May 10,2010,May 26,2010 and June 8,2010 (tonight)follows:
10-63
Exhibit F
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
June 8,2010
Page 6 of 7
1----~~~~~i .J~~jq'~~·.i~FY14·4S:==-OElsqr(ptiol,Qf chaljge$:SYR,Modl1l
ITotal I"rogram I..iOStS -lVIay lU,
2010 Staff Report $2,926,007 $1,418,618 $1,204,934 $1,354,308 $837,941 $767,068
Permanent savings -completed
A McCarrell Canyon project $(70,000)
Timing deferral -catch basin filtration
devices (deferred until FYi 0-11 &
spread over 5 years @ $41,000
B annually)$(205,000)$41,000 $41,000 $41,000 $41,000 $41,000
Permanent savings -Los Verdes Golf
C Course $(95,000)
D PVDE Lower Switchbacks $485,000
E South HawthorneNia Frascati $440,000
F PVDS $446,000
Drainage Master Plan Program -
G originally proposed $(625,000)
Drainage Master Plan Program -
Hi revised $360,000 $225,000 $30,000 $30,000 $30,000
Re-allocation -Storm drain/filtration
maintenance to Drainage Master Plan
H2 Program $(30,000)$(30,000)$(30,000)
ITotal program Costs -May 26,
2010 Staff Report $2,556,007 $1,819,618 $1,470,934 $1,255,308 $1,324,941 $1,248,068
_o,~
Drainage Master Plan Program -
H3 revised $(360,000)$(225,000)
H4 Drainage Master Plan Program -final $370,000 $125,000 $90,000
110tal program costs -June 8,2010
Staff Report $2,926,007 $1,584,618 $1,335,934 $1,255,308 $1,324,941 $1,248,068
To facilitate the funding for the proposed Drainage Master Plan Program,Staff continues to
propose the following re-allocations of the FY09-10 budget for the Storm Drain program to
fund the proposed Drainage Master Plan Program as follows:
A Permanent savings -completed McCarrell Canyon project $70,000
B Timing deferral -catch basin filtration devices $205,000
(deferred until FY10-11 &spread over 5 years @ $41,000 annually)
C Permanent savings -Los Verdes Golf Course $95,000
H1 Re-allocation of storm drain/filtration maintenance $90,000
($30,000 annually beginning FY12-13)
In addition of the project savings and re-allocations described above,Staff proposes to use
about $200,000 of accumulated fund reserves.
10-64
Exhibit F
WATER QUALITY AND FLOOD PROTECTION PROGRAM -ANNUAL
USER FEE RATE -FY10-11
June 8,2010
Page?of?
As stated previously to the Committee during its presentation on May 26,2010,Staff
provided an oral overview of the proposed revisions to the 5-Year Plan to the City Council
during the Budget workshop on May 22,2010.Although the City Council took no action at
that time,it generally expressed its support of the proposed FY09-10 budget changes and
funding revisions that could enable the proposed Drainage Master Plan Program process to
begin soon.Otherwise,the revised 5-Year Plan is the same as presented to the
Committee during its meeting on May 26,2010.
May 26,2010 Meeting of the Oversight Committee -Follow-Up Regarding
Questions,Request for Additional Information and Comments
Question -[Assuming the Consumer Price Index ("CPI")was a negative last yearj-Should
last year's negative CPI be averaged with the February 2010 CPI when determining the
maximum increase of the Fee permitted by law?
Staff Reply:
The February 2009 CPI was "zero".Therefore,the question is moot.However,based
upon the opinion of Harris &Associates,the City's rate engineer (see attached letter,dated
June 2,2010),as well as the City Attorney (see attached letter,dated June 3,2010),the
provisions of Municipal Code section 3.44.020 provides for an increase of the maximum
rate,but not a decrease.Municipal Code section 3.44.020 F.states:
"Such maximum annual rate per ERU shall be increased annually commencing with
fiscal year 2007-2008,by an amount equal to the change in the Consumer Price
Index for all Urban Consumers for the Los Angeles;Riverside and Orange County
areas (the "CPI"),including all items as published by the U.S.Bureau of Labor
Statistics as of March 1 of each year,not to exceed a maximum increase of two
percent per year."
Attachments:
5-Year Storm Drain Plan Through FY14-15 (Revised -Proposed June 8,2010)
Fee Rate Letter from Harris &Associate,dated June 2,2010
Fee Rate Letter from Richards,Watson &Gershon (City Attorney),dated June 3,2010
Staff Report,Dated May 10,2010
Staff Report,Dated May 26,2010
10-65
RICHARD RICHARDS
6916-19 88)
GLENN R.WATSON
(RETIRED)
HARRY L.GERSHON
(1922-2007)
STEVEN L DORSEY
WILLIAM L.STRAUSZ
MITCHELL E.ABBOTT
GREGORY W.STEPANIC1CH
ROCHELLE BROWNE
QUINN M.BARROW
CAROL W.LYNCH
GREGORY M.KUNERT
THOMAS M.liMBO
ROBERT C.CECCON
STEVEN H.KAUFMANN
KEVIN G.ENNIS
ROBIN O.HARRIS
MICHAEL ESTRADA
lAURENCE S.WIENER
STEVEN R.ORR
B.TILDEN KIM
SASI(IA T.ASAMURA
KAYSER o.SUME
PETER M.THORSON
JAMES L.MARKMAN
CRAI G A.STEELE
T.PETER PIERCE
TERENCE R.BOGA
LISA BOND
JAN ET E.COLESON
ROXANNE M.DIAZ
JIM G.•..G.RAvSoN
ROY A.CLARKE
WILLIAM P.CURl.EY III
MICHAEL F.YOSHIBA
REGINA N.DANNER
PAULA GUTIERREZ BAEZA
BRUCE W.GALLOWAY
DIANA K.CHUANG
PATRICK K.BOBKO
NORMAN A.DUPONT
DAVID M.SNOW
LOLLY A.ENRIQUEZ
KIRSTEN R.BOWMAN
BILLY D.DUNSMORE
AMY GREYSON
DEBORAH R.HAKMAN
D.CRAIG FOX
SUSAN E.RUSNAK
G.INDER KHALSA
GINETTA L.GIQVINCO
TRISHA ORTIZ
CANDICE K.LEE
DAVID G.ALDERSON
MARICELA E.MARROQufN
GENA M.sTINNm
JENNIFER PETRUSIS
STEVEN L FLOWER
CHRISTOPHER J.OIAZ
DEBBIE Y.CHO
ERIN L.POWERS
TOUSSAINT S.BAILEY
WHITNEY G.McDONALD
SERITA R.YOUNG
VERONICA S.GUNDERSON
SHIRl KLIMA
DIANA H.VARAT
KATRINA C.GONZALES
CHRiSTOPHER L.HENDRICKS
OF COUNSEL
MARK L.LAMKEN
SAYRE WEAVER
JIM R.KARPIAK
TERESA HO'URANO
SAN FRANCISCO OFFICE
TElEPHONE 415.421.8484
ORANGE COUNTY OFFiCE
TELEPHONE 714.990.0901
Exhibit G
1~1~~RICHARDS I WATSON I GERSHON
~~[f ATTORN EYS AT LAW - A PROFESSIONAL CORPORATION
355 South Grand Avenue.40th Floor.Los Angeles.California 90071-3101
Telephone 213.626.8484 Facsimile 213.626.0078
June 3,2010
Dennis McLean
Director of Finance and Infonnation Technology
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes,California 90275
Re:Stonn Drain User Fee
Dear Mr.McLean:
We have reviewed the letter dated June 2,2010 from Joan E.Cox,Manager of
Financial Engineering at Harris and Associates,and concur with her analysis
regarding the annual escalator for the maximum rate of the City's stonn drain user
fee.
In sum,Section 3.44.020 of the Rancho Palos Verdes Municipal Code provides the
maximum rate "shall be increased annually ...by an amount equal to the change in
the Consumer Price Index for all Urban Consumers for the Los Angeles,Riverside
and Orange County areas (the "CPI"),including all items as published by the U.S.
Bureau of Labor Statistics as of March 1 of each year,not to exceed a maximum
increase of two percent per year."Thus,ifthere is a positive change in the CPI in any
given year,Section 3.44.020 provides that the maximum rate for that year shall be
increased in an amowlt equal to such change or two percent,whichever is less.If
there is no annual change in the CPI or the change is negative,the maximum rate for
that year stays the same as in the previous year.
Please do not hesitate to contact me if you have any questions or require additional
infonnation regarding this matter.
Very truly yours,
~f).~
Robin D.Harris
R6876-0001\1233865vl.doc
10-66
RICHARD RICHARDS
[1916-19 88)
GLEN N R.WATSON
(RETIRED)
HARRY L GERSHON
(1922-2007)
STEVEN L.DORSEV
WILLIAM L.STRAUSZ
MITCHELL E.ABBOTT
GREGORY W.STEPANICICH
ROCHELLE BROWNE
QUINN M.BARROW
CAROL W.LVNCH
GREGORV M.KUNERT
THOMAS M.)lMBO
ROBERT C.CECCON
STEVEN H.KAUFMANN
KEVIN G.ENNIS
ROBIN D.HARRIS
MICHAEL ESTRADA
LAURENCE S.WIENER
STEVEN R.ORR
B.TILDEN KIM
SASKIA T.ASAMURA
KAVSER O.SUME
PETER M.THORSON
JAMES L.MARKMAN
CRAIG A.STEELE
T.PETER PIERCE
TERENCE R.BOGA
liSA BONO
JAN ET E.COLESON
ROXANNE M.DIAZ
JIM G•.G.R,WSQN
ROY A.CLARKE
WILLIAM P.CURL.EY III
MICHAEL F.YQSHIBA
REGINA N.DANNER
PAULA GUTIERREZ BAEZA
BRUCE W.GALLOWAY
DIANA K.CHUANG
PATRICK K.BOBKO
NORMAN A.DUPONT
DAVID M.SNOW
LOLLV A.ENRIQUEZ
KIRSTEN R.BOWMAN
BILLY O.DUNSMORE
AMV GREYSON
DEBORAH R.HAKMAN
O.CRAIG FOX
SUSAN E.RUSNAK
G.INDER KHALSA
GINETTA L.GIOVINCO
TRISHA ORTIZ
CANDICE K.LEE
DAVID G.ALDERSON
MARICELA E.MARROQuiN
GENA M.STINNETI
JENNIFER PETRUSIS
STEVEN L.FLOWER
CHRISTOPHER J.DIAZ
DEBBIE Y.CHO
ERIN L.POWERS
TOUSSAINT S.BAILEY
WHITNEY G.MCDONALD
SERITA R.YOUNG
VERONICA S.GUNDERSON
SHIRl KliMA
DIANA H.VARAT
KATRINA C.GONZALES
CHRISTOPHER L.HENDRICKS
OF COUNSEL
MARK L.LAMKEN
SAVRE WEAVER
JIM R.KARPIAK
TERESA HQ'URAHD
SAN FRANCISCO OffiCE
TELEPHONE 415.421.8484
ORANGE COUNTY OFFiCE
TELEPHONE 714.990.0901
Exhibit G
I~~~~RICHARDS IWATSON IGERSHON
~~[f ATTORNEYS AT LAW - A PROFESSIONAL CORPORATION
355 South Grand Avenue,40th Floor.Los Angeles,California 9°°71-3101
Telephone 213.626.8484 Facsimile 213.626.0078
June 3,2010
Dennis McLean
Director of Finance and Information Technology
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes,California 90275
Re:Storm Drain User Fee
Dear Mr.McLean:
We have reviewed the letter dated June 2,2010 from Joan E.Cox,Manager of
Financial Engineering at Harris and Associates,and concur with her analysis
regarding the annual escalator for the maximum rate of the City's storm drain user
fee.
In sum,Section 3.44.020 of the Rancho Palos Verdes Municipal Code provides the
maximum rate "shall be increased annually ...by an amount equal to the change in
the Consumer Price Index for all Urban Consumers for the Los Angeles,Riverside
and Orange County areas (the "CPI"),including all items as published by the U.S.
Bureau of Labor Statistics as of March 1 of each year,not to exceed a maximum
increase of two percent per year."Thus,ifthere is a positive change in the CPI in any
given year,Section 3.44.020 provides that the maximum rate for that year shall be
increased in an amount equal to such change or two percent,whichever is less.If
there is no annual change in the cpr or the change is negative,the maximum rate for
that year stays the same as in the previous year.
Please do not hesitate to contact me if you have any questions or require additional
information regarding this matter.
Very truly yours,
~f).~
Robin D.Harris
R6876-0001\1233865vl.doc
10-67
From:
To:
Subject:
Date:
Attachments:
Lowell R.Wedemey~
finance@rpv.com;
FW:Storm Drain Fee;CPI Calculation Question
Wednesday,June 09,2010 4:40:39 PM
CPI-Tablel0-2008-2009-2010.pdf
CPI Calculation Question-StormDrains-2010-06-09-RMV1.doc
Exhibit H
Dennis:
My first send attempt,to g.~JJQ.I.~@[R.:~L,..qQm,failed.So,I am trying again at
finance@rpv.c9m
Lowell
-----Original Message-----
From:Lowell R.Wedemeyer [mailto:lowell@transtalk.com]
Sent:Wednesday,June 09,2010 4:29 PM
To:Dennis Mclean (dennis@rpv.com)
Subject:Storm Drain Fee;CPI Calculation Question
Dennis;
I am appending a detailed text stating the CPI calculation question,as I
perceive it,and a .pdf file with copies of CPI Table 10 for 2008,2009 and 2010
showing where I obtained the data used in calculations in the text.
In order that Brown Act issues be controlled,I request that you forward a
copy of this only to Committee Chair Lyon (but no others on the Committee),as well
as to the City Attorney and any consultants you may select.It appears to me that
this issue may ultimately have to be decided by the City Council.
Lowell R.Wedemeyer
10-68
Exhibit H
Memo from Member Wedemeyer,attached to email sent June 9,2010
Rancho Palos Verdes Municipal Code 3.44.020 states in material part:
"Such maximum annual rate per ERU shall be increased annually commencing
with fiscal year 2007-2008,by an amount equal to the change in Consumer Price
Index for all Urban Consumers for the Los Angeles,Riverside and Orange
County areas (the "CPI"),including all items as published by the U.S.Bureau of
Labor Statistics as of March 1 of each year,not to exceed a maximum increase
of two percent per year."
The phrase "an amount equal to the change in Consumer Price Index ...as of
March 1 of each year"is mathematically uncertain,as can be seen from the
question,"Change from what?"
Change =Current CPI minus What Prior CPI?
As long as the CPI progressively increases each year over a period the answer is
straight forward.
However,if the CPI declined in the immediately prior year,the answer no longer
is so straightforward.
Here are changes reported in Bureau of Labor Statistics,Table 10,Consumer
Price Index for All Urban Consumers (CPI-U);Selected areas,all items index for
Los Angeles-Riverside-Orange County,for March 2008,2009 and 2010:
MO/YEAR
3/2008
3/2009
3/2010
INDEX
223.606
221.376
225.483
Percentage Change
+3.3
-1.0
+1.9
Year-to-Year
2007 -2008
2008 -2009
2009 -2010
The two-year index change from March 2008 to March 2010 can be calculated as
follows:
scalar change:225.483 -223.606 =1.877
,Percentage change:(1.877 /223.606)x 100 =0.8394%,rounds off to 0.8%
The one year index change from March 2009 to March 2010 can be calculated
as follows:
scalar change:225.483 -221.375 =4.108
Percentage change:(4.108/221.376)x 100 =1.85566%,rounds off to 1.9%
Thus,the two-year change from March 2008 to March 2010 is less than half the
one-year change from March 2009 to March 2010.Why?Because of the
negative change between March 2008 and March 2009.
Storm Drain Oversight;CPI Calculation Issue June 9,2010 1 of 3
10-69
Exhibit H
Joan E.Cox,PE of Harris &Associates opines,"There is no provision in the
verbiage for a 'cumulated'change in CPI from when the fee was established to
the present year,so in my opinion this type of calculation is not an option."
There is no verbiage either for or against a "cumulated"calculation (however Ms.
Cox may define "cumulated"),nor is there any verbiage for or against any other
specific calculation.Respectfully,the opinion of Ms.Cox is unfounded and
provides no logical way to resolve the ambiguity in the municipal ordinance.
Ms.Cox does not provide any mathematical formula,numerical calculation,or
calculation result in her letter.Thus,it is not possible to comment further on
whatever method she might recommend.
The letter from Robin Harris,Esq.,of Richards,Watson &Gershon addresses a
distinctly different issue that was settled last year:What happens if the CPI
change is negative (as it was from March 2008 to March 2009)?The answer,
essentially,is "Nothing happens".Richards Watson &Gershon have not yet
opined upon the proper way to calculate the effect of last year's negative CPI on
this year's CPI.
The Staff Report at page 2 of 7,for June 8,2010 recommends a 1.4%increase
for 2010.There is no calculation showing how the Staff reached 1.4%.
Perhaps the Staff can make its calculation explicit and reconcile it to the two
numbers calculated above:
Two-year change 2008 -2010:
One-year change 2009 -1010:
Statistics Table 10).
0.8%
1.9%(corroborated by Bureau of Labor
Note the multiplier effect when one sums changes from 2007 -2010 using a one-
year calculation following a prior negative CPI:
STAFF ONE-YEAR CPI TWO-YEAR CPI
2008 Increase 3.3% 3.3%3.3%
2009 Increase 0.0%0.0%0.0%(Because negative)
2010 Increase 1.4%1.9%0.8%
TOTALS 4.7%5.2%4.1%
Thus,any system that employs only a one-year change after a negative CPI
dramatically exaggerates the economic reality between 2007 and 2010.
Should this ambiguity be resolved by reference to what the voters likely intended
when they approved the ordinance?Who resolves this?The City Council?
Lowell R.Wedemeyer
Storm Drain Oversight;CPI Calculation Issue June 9,2010 2 of 3
10-70
Storm Drain Oversight;CPI Calculation Issue June 9,2010 3 of 3
Exhibit H
10-71
Exhibit H
Table 10.Consumer Price Index for All Urban Consumers (CPloU):Selected area.,all Items Index
(1982-84=100.unl8S$otherw,"noted)
All Items
Indexes Pen;ent change to Percent change to
Area Pnclng Mar.2010 from-Feb.2010 from-
schedUle
1 Dec.Jan.Feb.Mar.Mar.Jan.Feb.Feb.Dec.Jan.
2009 2010 2010 2010 2009 2010 2010 2009 2009 2010
U.S.clty average ............................................M 215.949 216.687 216.741 217.631 2.3 0.4 0.4 2.1 0.4 0.0
Region and a...a ,lze2
Northeast urban ..............................................M 231.462 232.294 232.382 233.188 2.6 .4 .3 2.5 .4 .0
Size A•More than 1,500,000 .....................M 233.475 234.109 234.183 235.060 2.3 .4 .4 2.1 .3 .0
Size BIC •50,000 to 1,500,000 3 ................M 137.597 138.416 138.491 138.871 3.3 .3 .3 3.4 .6 .1
Midwest urban ................................................M 205.613 206.564 206.583 207.359 2.6 .4 .4 2,5 .5 .0
Size A·More than 1.500.000 .....................M 206.399 207.325 207.329 207.975 2.3 .3 .3 2.3 .5 .0
Size B/C •50,000 to 1,500,000 3 ................M 131,742 132.417 132.451 133.096 2.9 .5 .5 2.6 .5 .0
Size D·Nonmelropolltan (less than
50.000)...............................................M 202.738 203.490 203.274 204.204 3.5 .4 .5 3.5 .3 -.1
SoulI1 urban .......................,............................M 209.476 210.056 210.020 211.216 2.5 .6 .6 2.3 .3 .0
Size A -More than 1.500,000 .....................M 210.971 211.762 211.503 212.692 2.0 .4 .6 1.7 .3 -.1
Size BlC·50.000 to 1,500,000 3 ................M 133.252 133.517 133.575 134.363 2.7 .6 .6 2.5 .2 .0
Size D·Nonmetropolltan (less than
50.000)...............................................M 213.159 213.873 214.007 215.026 3.9 .5 .5
3.5 .4 .1
West urban .......,.............................................M 219.307 219.989 220.179 220.809 1.6 .4 .3 1.4 A .1
Size A•More than 1.500.000 .....................M 223.058 223.852 223.9S9 224.636 1.6 .4 .3 1.4 A .1
Size BlC -50,000 to 1,500,000 3 ................M 133.132 133.366 133.513 133.8Ei3 1.6 .4 .3 1.4 .3 .1
Sizeelu..,
A4 ..............................................................M 197.246 197.948 197.949 198.695 2.0 .4 .4 1.8 .4 .0
BIC 3 ...........................................................M 133.535 133.954 134.028 134.639 2.6 .5 .5 2.4 .4 .1
0 .................................................................M 209.192 209.984 210.098 211.011 3.1 .5 A 3.0 A .1
selected locel ....8B5
Chicago-Gary-Kenosha,IL-IN-Wl ...................M 211.185 212.104 212.456 212.952 2.6 .4 .2 2.5 ,6 .2
Los Angeles-Rlveralde-Qrange County.CA ...M 223.643 224.610 224.620 225.483 ~..4 .4 1.4 A .0
New York-Norll1ern N.J.·Long Island.-NY-NJ-eT-PA .........................................M 236.427 238.970 238.662 240.101 2.1 .5 .5 1.8 .2 .0
Boston·Brookton-Nashua,MA~NH-ME-eT .....1 -237.266 -237.986 2.5 .3 -..
Cleveland-Akron.OH ......................................1 .203.037 -203.577 2.1 .3 ..
Dallas-Fort Worll1.TX .....................................1 .202.106 -201.982 1.0 -.1 .
Washington.Baltimore.DC-MD-VA-WV 6 ......1 -141.124 -141.741 2.3 .4 --
AUanta,GA .....................................................2 200.456 -202,646 ---1.7 1.1 -
DelToll-Ann Arbor-Flint,MI ..............................2 203.880 ·203.380 ·--.7 -.2
Houston-Galveston-Brazona,TX ....................2 190.932 ·192.412 ·--2.4 .8
Mlaml.For!laUderdale,FL .............................2 222.943 -222.505 · ·
--.9 ·.2
Phlladelphla-Wllmlnglon-Atlantlc City,
PA-NJ-OE·MO ........................................2 224.800 ·226.529 ·.2.8 .8 -
San Francisco-Oakland-San Jose,CA ...........2 224.239 -226.145 ·-1.8 .8 -
Seattle-Tacoma-Bremerton.WA ....................2 225.596 -226.085 --.6 .2 -
/
1 Foods,fuels.and several oll1er Items priced every monll1ln all areas;
most other goods and services priced as Indicated:
M -Every month.
1 •January,March,May.July,September.and November.
2 •February,April,June,August,October,and December.
2 Regions defined as ll1e four Census regions.See map In technlcel
notes.
3 Indexes on a December 1996=100 base.
4 Indexes on a December 198Ei=100 base.
S In addition,ll1e following metropolitan areas are published semiannually
and appear In Tables 34 and 39 of the January and July Issues of the CPI
Detailed Report:Anchorage,AK:Clncinnatl-Hamllton.OH-KY-IN;
Denver-Boulder-Greeley.CO;HonolulU,HI;Kansas City,MO-KS;
Milwaukee-Racine,WI;MinneapollOJ-St.Paul.MN-WI;Phoenix-Mesa.AZ;
Pittsburgh.PA;PortIandoSalem,OR·WA;51.Louis,MO-IL:San Diego,Ck,
Tampa-51.Patersburg-Clearwater.FL.
6 Indexes on a November 1998=100 base.
-Data not available.
NOTE:Local area Indexes are byprodUcts of ll1e national CPI program.Each
local index has a smaller semple size than the national index and is.therefore.
subject to substantially mo",sampling and other measurement error.As a
result,local area Indexes show greater Volatility than the national Index.
elll10ugh their long-term trends are similar.Therefore.the Bureau of Labor
Statistics strongly urges uS8rato conslder adopting the national averege CPI
for use In ll1elr escalator clauses.
NOTE:Index applies to a month as a WIlole,not to any spedflc data.
10-72
Exhibit H
Table 10.Consumer Price Index for All Urban Consumers (cpr-U):Selected areas,all Items index
(1962-84=100,unlllSs othelWlse noted)
All Items
IndelClls Percent change to Percent change to
Area PrIcing Mar.2009 from-Feb.2009 from-
schedule
1 Dec.Jan.Feb.Mar.Mar.Jan.Feb. Feb.Dee.Jan.
2008 2009 2009 2009 2008 2009 2009 2006 2008 2009
U.S.city average ............................................M 210.228 211.143 212.193 212.709 -0.4 0.7 0.2 0.2 0.9 0.5
Region and .rea stze'!
Norlheasl urban ..............................................M 225.091 225.436 226.754 227.309 .2 .8 ,2 .7 .7 .6
SIZe A •More than 1,500.000 .....................M 227.681 227.852 229.262 229.749 .3 .8
.2 .8 .7 .6
SIZe BIC •50.000 to 1,500,000 3 ................M 132.830 133.308 133.967 134.411 -.1 .8 .3 .3 .9 .5
Midwest urban ..................................."...........M 199.582 200,815 201.453 202.021 -.8 .6 .3 -.2 .9 .3
SIZe A •More than 1.500.000 .....................M 200.465 202.001 202.639 203.240 -.9 .6 .3 -.3 1.1 .3
SIZe BIC -50.000 to 1.500,000 3 ................M 128.018 128.636 129.057 129.334 -.6 .5 .2 .1 .8 .3
Size D-Nonmelropolltan (leSS than
50,000).,......".....................,...............M 195,383 195.843 196.421 197.267 -1.1 .7 .4 -.6 .5 .3
South urban .".................................................M 203.501 204.288 205,343 206.001 -.3 .6 .3 ,1 .9 .5
Size A -More than 1.500.000 .....................M 206.414 207.035 207.929 208.529 -.3 .7 .3 ,2 .7 ,4
Size B/C·50,000 to 1.500,000 3 ".."..........M 129.099 129.615 130.380 130.873 -,4 1.0 .4 .0 1,0 .6
Size 0 -Nonmalropolitan (less lhan
50.000)......,..............,.,...........,...........M 204.428 205.766 206.671 206.927 .0 .6 .1 ,7 1.1 .4
West urban .............,.............................,.........M 214.685 215.923 217.095 217.357 -.5 .7 .1 .3 1.1 .5
Size A-More than 1,500.000 .....................M 218.696 219.806 220.965 221.124 -.4 .6 .1 .5 1.0 .5
Size BIC -50.000 to 1.500,000 3 ................M 129.725 130.682 131,636 131.775 -.8 .8 .1 .1 1.5 .7
Slz8cla..es
A4 •.,........................,...........,......................M 192.646 193.412 194.354 194.750 -.3 .7 .2 .3 .9 .5
BlC 3 .....".....,.,...........,................................M 129.519 130.135 130.855 131.230 -.5 .6 .3 .1 1.0 .6
D .....,........,...,.............,...,.....,......................M 202.359 203.409 203.999 204.672 -.5 .6 .3 .1 .8 .3
Selected local ....aa 5
Chlcago-Gary-Kenosha.IL-IN-WI ...................M 205.959 207.616 207.367 207.462 -1.9 -.1 .0 -1.0 .7 -.1
Los Angeles-RlversldeoOrange County,CA ...M 219.620 220.719 221.439 221.376 -1.0 .3 .0 .0 .8 .3
New YOfk-Norlhem N.J,-Long Island.--NY-NJ-CT-PA ....,....................................M 233.D12 233.402 234.663 235.067 .8 .7 .2 1.6 .7 .5
Baslan-Brockton-Nashua,MA·NH-ME-CT .....1 230.806 .232.155 -.4 .6 - -·
CleveJand-Akran.OH ......................................1 .196.232 -199,457 -1.5 .6 ..-
Dallas-Fort Worlh,TX .....................................1 -198.823 -200.039 .7 .7 .---
Washlngton-6alttmOl'6,OC-MD-VA-WV 6 ......1 -137.598 -138.620 .4 .7
-- -·
Atlanta.GA ......,......,............,.....,....................2 198.961 199.190 .-.-2.4 1.1 -
Detroit-Ann Arbor-Flint.MI ................"............2 197.991 201.913 -- ---.2 2.0 -
HouSlan-GalvllSton-Brazorla.TX ....................2 185.930 187.972 --.-.2 1.1 ·
Miami-Fort LaUderdale,FL .............................2 218.324 220.589 --- -.7 1.0 ·
Phlladelphla-Wilmington-Atlantlc City.
PA-NJ-DE-MO .,............,.....,......,..........,.2 216.186 -220.262 ---.-.3 1.0
San Francisco-Qakland-8an Jose,CA ...........2 218.528 -222.166 ----1.2 1.7 -
Sealtle-Tacoma-6remerton,WA ....................2 222.580 -224.737 - -
--1.4 1.0 ·
1 Foods,fuels.and several other Items priced every month In all areas:
most olher goodS and services pl'lced as Indicated;
M -Every month.
1-January,March.May.July.September,and November.
2-Februsry,April,June,August,OCtober,and December.
2 Regions defined as the four Census regions.S&e map In technical
notes.
3 Indexes on a December 1996=100 base.
4 Indexes on a December 1986=100 base.
5 In addillon,the following melropoman areas are pUbllshad semiannually
and appear In Tables 34 and 39 of the January and July Issues of the CPI
Detailed Report:Anchorage,AK;Cincinnati-Hamilton.OH-KY-IN;
Denver-Boulder-Greeley,CO;Honolulu,HI;Kansas City.MO-KS;
Milwaukee-Racine.WI:Minneapolis-St.Paul,MN-WI:Phoenlx-Mesa.l\Z.:
45
Pittsburgh,PA;Portland-5alem,OR-WA;St.louis,MO-IL;San Diego,CA;
Tampa-St.Petersburg-Clearwater,FL.
6 Indexes on a Novsmber 1996=100 base.
•Date not available.
NOTE:Local area Indexes are byproducls of the nallonal CPI progrsm.Each
local Index has a smaller sample size than the national index and is,tharefore,
subject to sUbstentially more lIampling and olher measurement Brror.As a
fllSUlt.local area Indexes show greater volatility than the national Index,
although lhelr long-term trends are similar.Tharefore,the Bureau of Labor
Statistics strongly urges users to consider adapting the national average CPI
for use In their escalator clauses.
NOTE:Indax applies to a month as a whale.not to any speaftc date.
CPt Detailed Report 2009
10-73
Exhibit H
Table 10.Consumer Price Index for All Urban Consumers (CPI·U):Selected area.,all Items index
(1982-84=100.unless otherwise noted)
Allil&ms
Indexes Pereent change to Percent change to
Area Pricing Mar.2008 from-Feb.2008 from-
schedule
1 Dec.Jan.Feb.Mar.Mar.Jan.Feb. Feb.Dec.Jan.
2007 2008 2008 2008 2007 2008 2008 2007 2007 2008
U.S.city average ............................................M 210.036 211.080 211.693 213.528 4.0 1.2 0.9 4.0 0.8 0.3
RegIon and area .,m2
Northeast urban ..............................................M 223.425 224.325 225.213 226.926 3.9 1.2 .8 4.0 .8 .4
Size A -Mora than 1.500.000 .....................M 225.688 226.310 227.411 229.087 3.7 1.2 .7 3.7 .8 .5
Size BIC -50,000 to 1.500.000 3 ................M 132.323 133.301 133.511 134.611 4.6 1.0 .8 4.7 .9 .2
Mklwest urban ................................................M 200.227 201.427 201.896 203.723 3.7 1.1 ,9 3.8 .8 .2
Size A -Mora than 1.500.000 .....................M 201.519 202.830 203.347 205.141 3.4 1.1 .9 3.5 .9 .3
Size BIC •SO.OOO to 1.500.000 3 ................M 128.040 128.753 128.922 130.121 4.0 1.1 .9 4.1 .7 ,1
Size 0 -Nonmelropolitan (less than
50.oeO)...............................................M 195.819 196.708 197.596 199.472 4.8 1.4 .9 5.0 .9 .5
South urban ....................................................M 203.457 204.510 205.060 206.676 4.4 1.1 .8 4.6 .8 .3
Size A -Mora than 1.500.000 .....................M 206.076 207.221 207.605 209.065 4.3 .9 .7 4.6 .7 .2
Size B/C·50.000 to 1.500,000 3 ..,.............M 129.366 129.937 130.351 131.442 4.5 1.2 .8 4.7 .8 .3
Size D-Nonmetropolitan (less than
50.000)...,;..........................................M 202.878 204.524 205.189 206.933 4.4 1.2 .8 4.7 1.1 .3
West urban .....................................................M 214.733 215.739 216.339 218.533 3.7 1.3 1.0 3.5 .7 .3
Size A·Mora than 1.500.000 .....................M 218.020 219.036 219.799 221.997 3.5 1.4 1.0 3.4 .8 .3
Size BIC -50.000 to 1.500.000 3 ................M 130.481 131.328 131.538 132.896 3.9 1.2 1.0 3.7 .8 .2
SIze cia....
A4 ..............................................................M 192.140 193.045 193.665 195.314 3.7 1.2 .6 3.8 .8 .3
BlC 3 ...........................................................M 129.716 130.431 130.728 131.892 4.3 1.1 .9 4.4 .8 .2
D ...............................,.................................M 202.333 203.200 203.803 205.730 4.4 1.2 .9 4.5 .7 .3
Selected local ......5
Chlcago-Gary·Keoosha,IL-IN·WI ...................M 207.155 208.757 209.526 211.542 4.5 1.3 1.0 4.4 1.1 .4
Los Angeles-Rlverslde-Orange County.CA ...M 219.373 220.918 221.431 223.606 3.3 1.2 1.0 3.1 .9 ·.2
New YOfk-Norlham N.J.-Long Island.--NY·NJ·CT-PA .........................................M 229.395 229.869 231.020 233.122 3.8 1.4 .9 3.6 .7 .5
Bostol'l--Brockton-Naahua,'MA.NH.ME·CT .....1 -231.980 ·233.084 2.9 .5 ·.· ·
Cleveland-Akron,OH ......................................1 -199.686 ·202.500 4.3 1.4 ----
Dalles-Fort Worth.TX .....................................1 197.079 ·198.596 4.4 .8 ·.·-
Washlngtol'l--Saltimore,DC.MD-VA-WV 6 ......1 136.293 ·13e.o90 4.7 1.3 --·-
Atlanta.GA ........................"...........................2 202.751 .204.166 ···-4.8 .7 ·
Detroit·Ann Arbor-Flint.MI ..............................2 200.201 -202.378 -···2.2 1.1 ·
Houston-Galveston-Brazoria.TX ....................2 186.246 -187.685 ····3.5 .7 ·
Miami·Fort Lauderdale.FL .............................2 217.319 -219.082 ·- -·5.3 .8 ·
Phlladelphla-Wilmlngton·Atlantlc City,
PA·NJ·DE-MO ........................................2 219.025 .220.935 -···3.7 .9 ·
San Franclsco-Qakland-8an Jose.CA ...........2 218.485 -219.612 ··--2.6 .5 -
8eallle-Tacoma-8remerton,WA ......"............2 218.966 -221.728 --··4.7 1.3 -
1 Foods.fuels.and several other Items priced every month In all Meas;
most other goodS and services priced as indicated:
M•Every month.
1·January,March,May.July.Seplember,and November.
2•February,April,June.August,OCtober.and December.
2 Regions definad ea the four Census tllglons.See map In technical
noleS.
3 Indaxes on a December 1996=100 base.
4 Indexes on a December 1986=100 base.
5 In add~ion.tha following metropoman araBS are published semiannually
and appear in Tables 34 and 39 of the January and July Issues of the CPJ
Detailed Report:Anchorage,AK;Cincinnati-Hamilton.OH·KY-IN;
Denver-Boulder·Graeley,CO;Honolulu.HI;Kansas City,MO-KS;
Milwaukee-Racine,WI;Mlnneapolls-St.Paul,MN-WI:Phoenlx·Mesa,AZ;
45
Pittsburgh,PA;F'ortlend·Salem.OR-WA;St.louis,Me-IL;San Diego.CA;
Tampa-8t.Pel&rsburg-Clearwater,FL.
6 Indexes 00 a November 1996=100 base.
•Data not available.
NOTE:Index applies to a month as a whole.not to any specific date.
NOTE:Local area Indexes are byproducts of the national CPI program.Each
local Index has a smaller semple aize then the natlonsllndex and Is.therefore,
subject to substanUally more sampling and other measurement error.As a
result.local area Indexes show greater volatility than the national Index.
although their long-term trends are similar.Therefore,the BureaU or Labor
Statistics strongly urges users to consider adopting the netionslaverage CPt
for use In their escalator clauseS.
cpr Detailed Report-March 2008
10-74
Exhibit I
It~~l{RICHARDS I WATSON I GERSHON
~~r.ATTORNEYS AT LAW -A PROFESSIONAL CORPORATION
355 South Grand Avenue,40th Floor,Los Angeles,Califomia 90071-3101
Telephone 213.626.8484 Facsimile 213.626.0078
GLENN R.WATSON
(RETIRED)
HARRY L.GERSHON
(1922-Z007)
STEVEN L.DORSEY
WILLIAM L.STRAUSZ
MITCHELL E.ABBOTT
GREGORYW.STEPANICICH
ROCHELLE BROWNE
Q.UINN M.BARROW
CAROL W.LYNCH
GREGORY M.KUNERT
THOMAS M.liMBO
ROBERT C.CECCON
STEVEN H.KAUFMANN
KEVIN G.ENNIS
ROBIN D.HARRIS
MICHAEL ESTRADA
LAURENCE S.WIENER
STEVEN R.ORR
B.TILDEN KIM
SASKIA T.ASAMURA
KAYSER o.SUME
PETER M.THORSON
JAMES L.MARKMAN
CRAIG A.STEELE
T.PETER PIERCE
TERENCE R.BOGA
LISA BOND
JANET E.COLESON
ROXANNE M.DIAZ
11M G.GRAYSON
ROY A.CLARKE
WILLIAM P.CURLEY III
MICHAEL F.YOSHIBA
REGINA N.DANNER
PAULA GUTIERREZ BAEZA
BRUCE W.GALLOWAY
DIANA K.CHUANG
PATRICK K.BOBKO
NORMAN A.DUPONT
DAVID M.SNOW
LOLLY A.ENRIQ.UEZ
KIRSTEN R.BOWMAN
BILLY O.OUNSMORE
AMY GREYSON
DEBORAH R.HAKMAN
O.CRAIG FOX
SUSAN E.RUSNAK
G.INOER KHALSA
GINmA L.GIOVINCO
TRISHA ORTIZ
CANOICE K.LEE
DAVID G.ALDERSON
MARICELA E.MARROQufN
GENA M.STlNNm
JENNIFER PETRUS IS
STEVEN L.FLOWER
CHRISTOPHER J.DIAZ
DEBBIE Y.CHO
ERIN L.POWERS
TOUSSAINT S.BAILEY
WHITNEY G.MCDONALD
S£RITA R.YOUNG
VERONICA S.GUNDERSON
SHIRl KLIMA
DIANA H.VARAT
KATRINA C.GONZALES
CHRISTOPHER L HENDRICKS
OF COUNSEL
MARK L LAM KEN
SAYRE WEAVER
JIM R.KARPIAK
TERESA HO~URANO
SAN ,RANCISCO OffiCE
TELEPHONE 415.42'.8484
ORANGE COUNTY OFFICE
TELEPHONE 7'4.990.09°'
VIA E-MAIL
Lowell R.Wedemeyer
13 Clipper Road
Rancho Palos Verdes,CA 90275
Re:Storm Drain User Fee
Dear Mr.Wedemeyer:
This letter is a follow up to my letter to Dennis McLean,Director of Finance and
Information Technology,City of Rancho Palos Verdes,dated June 3,2010,regarding
the annual escalator for the maximum rate of the City's storm drain user fee.
In my earlier letter,I pointed out that Section 3.44.020 of the Rancho Palos Verdes
Municipal Code provides the maximum rate:
"shall be increased annually . . .by an amount equal to the change in the
Consumer Price Index for all Urban Consumers for the Los Angeles,
Riverside and Orange County areas (the "CPI"),including all items as
published by the U.S.Bureau of Labor Statistics as of March 1 of each year,
not to exceed a maximum increase of two percent per year."
I concluded that if there is a positive change in the CPI in any given year,Section
3.44.020 provides that the maximum rate for that year shall be increased in an amount
equal to such change or two percent,whichever is less.I also concluded that if there
is no annual change in the CPI or the change is negative,the maximum rate for that
year stays the same as in the previous year.
In your email to Mr.McLean,dated June 9,2010,you noted that there was a -1%
change in the CPI from Fiscal Year 2008-09 to 2009-10 and pointed out that my letter
did not address the proper way to calculate the effect of last year's negative CPI on
this year's CPI.However,you used the CPI figures for March and we have advised
the City to use the CPI figures for February in calculating the change in CPI each
fiscal year because the Code requires that the CPI "as of March 1"be utilized to
calculate the increase of the CPI.To calculate the CPI for the month of March,the
Bureau of Labor Statistics uses prices collected throughout the entire month of
March;prices collected on March 1st are not representative of the changes in overall
prices of items included in that particular CPI for the entire month.As of March 1,
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Lowell R.Wedemeyer
July 1,2010
Page 2
RICHARDS IWATSON IGERSHON
ATTORNEYS AT LAW - A PROFESSIONAL CORPORATION
Exhibit I
the most recent CPI data available are from prices collected throughout the month of
February (i.e.showing the percentage change from February of the previous year to
February of the following year).Thus,a February to February comparison is required
by Section 3.44.020 F.
Using the February CPI figures,there was no change in the CPI from Fiscal Year
2008-09 to Fiscal Year 2009-10 (and the change from Fiscal Year 2009-10 to
2010-11 is 1.4%).Thus,your question regarding the proper way to calculate the
effect of a prior year's negative CPI on the current year's CPI is not applicable this
year.Nonetheless,I am taking this opportunity to address your question in the event
that there is a negative change in the CPI in the future.For this purpose,I have used
March CPI figures,thereby assuming that there was a negative CPI change from
Fiscal Year 2008-09 to 2009-10 for illustrative purposes.
You have suggested that on account of the negative change in the CPI,the City
should compare the change in the CPI using a two-year calculation from Fiscal Year
2008-09 to Fiscal Year 2010-11).As shown in your email and set forth again below,
this would result in an increase in the maximum rate for Fiscal Year 2010-11 of 0.8%
instead of 1.9%.
MO/YEAR
3/2008
3/2009
3/2010
Index
223.606
221.376
225.483
Percentage change
+3.3
-1.0
+1.9
Year to Year
2007-2008
2008-2009
2009-2010
one year index change:
two year index change:
225.483-221.375 =4.108
(4.108/221.375)x 100 =1.85566 (1.9%)
225.483 -223.606 =1.877
(1.877/223.606)x 100 =0.8394 (0.8%)
In the above example,the maximum rate per ERU for Fiscal Year 2009-10 would
stay the same as the maximum rate for Fiscal Year 2008-09 ($89.47)and the
maximum rate per ERU would increase by 0.8%to $90.19 for Fiscal Year 2010-11.
As shown below,your suggestion for a two-year calculation following a negative
change in the CPI is mathematically substantially equivalent to decreasing the
maximum rate per ERU on account of a negative change in the CPI (i.e.,decreasing
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Lowell R.Wedemeyer
July 1,2010
Page 3
RICHARDS IWATSON IGERSHON
AHORNEYS AT LAW -A PROFESSIONAL CORPORATION
Exhibit I
the rate by 1%for Fiscal Year 2009-10 and then increasing the rate by 1.9%in Fiscal
Year 2010-11).
Fiscal Year
08-09
09-10
10-11
Change in CPI
-1.0%($0.72)
1.9%($1.68)
Maximum Rate
$89.47
$88.58 1
$90.26 2
In our opinion,the provisions of Municipal Code section 3.44.020 do not provide for
decreases in the maximum rate per ERU on account of negative changes in the CPl.
Instead,the Code clearly states that the maximum annual rate per ERU shall be
"increased"annually.Thus,it was not intended for the maximum rate to be
decreased on account of negative changes in the CPI.If that were the intent,the Code
would have provided for the maximum rate to be "adjusted"annually in accordance
with the CPI (i.e.,it would go up on account of positive CPI changes and down on
account of negative CPI changes)instead of providing that the rate is to be
"increased"in accordance with changes in the CPI.
In summary,since there was not a negative CPI change from February last year to
February this year,there is no question regarding the proper calculation of the
maximum rate for Fiscal Year 2010-11-the maximum rate is $90.72,a 1.4%
increase over the maximum rate of 89.47 for Fiscal Year 2009-10.In our view,ifin
the future there is a negative change in the CPI,the maximum rate for the current year
would stay the same as the prior year's rate,and the negative change would have no
effect on the maximum rate for subsequent years.
Of course,this letter has only been discussing maximum rates,and,as you know,
each year the City Council will study the rates and make its determination on the
1 The rate for Fiscal Year 2009-10 would stay at $89.47,but $88.58 would be used to calculate the rate
for Fiscal Year 2010-11.
2 Rounding likely accounts for the $0.07 difference between $90.26 and $90.19,which is the amount
you calculated.
10-77
Lowell R.Wedemeyer
July 1,2010
Page 4
RICHARDS IWATSON IGERSHON
ATTORNEYS AT LAW -A PROFESSIONAL CORPORATION
Exhibit I
rates,which could include levying the Storm Drain User Fee at the maximum rate or
a lower rate.
Very truly yours,
/t~'W~
Robin D.Harris
cc:Dennis McLean
Director of Finance and Information Technology
City of Rancho Palos Verdes
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