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RANCHO PALOS VERDES <br />MEMORANDUM <br />TO: <br />Ray Holland and Ron Dragoo <br />FROM: <br />Steve Wolowicz <br />CC: <br />Carolyn Lehr <br />DATE: <br />June 14, 2010 <br />SUBJECT: <br />CC meeting 6/15/10 item #13 — Abalone cove sewer fee <br />QUESTIONS AND COMMENTS: <br />Ray and Ron, <br />Please provide a few answers to help me understand this issue. <br />Thanks, <br />Steve <br />1. Briefly, what is the logic for the city subsidy rather than assessing the <br />residents using the Abalone cove sewer system? <br />Staff Reply: The maximum annual increase in the rates for each zone is capped <br />at CPI this year, with a maximum cap which is set at 2% annually. This year the <br />costs for all zones except Zone B exceed the revenues needed. <br />2. Is it planned that the increased subsidy will be recouped by the general <br />fund in the future? <br />Staff Reply: No. Rates are set by the City Council but limited by a cap of 2%. <br />3. Are there likely to be other increases in the future that will be borne by the <br />specific residents or require additional subsidies? <br />Staff Reply: Ideally, the Abalone Cove sewer system should pay for <br />itself with the fee structure. Future increases in the fee structure to cover costs <br />are something that the City Council may consider during the City-wide Sewer <br />Fee process. <br />Page 1 of 1 <br />W:1HRon\Council Inquiries\6-15.2010\PW Response cc meeting 2010 06-15#13 abalone cove sewer fee.doc 06115/10 5:20 P <br />