March 26, 2009

CLOSED SESSION/SPECIAL MEETING
LIVINGSON CITY COUNCIL
MARCH 26, 2009

A Closed Session/Regular Meeting of the Livingston City Council was held on March 26, 2009, in the City Council Chambers with Mayor Varela presiding.

CLOSED SESSION
CALL TO ORDER
Mayor Varela called the meeting to order.
ROLL CALL

Mayor Daniel Varela, Sr. (Excused)

Mayor Pro-Tem Rodrigo Espinoza

Council Member Frank Vierra

Council Member Margarita Aguilar

Council Member Martha Nateras
Also present were City Manager Warne, Assistant City Manager Lewis and City Attorney Subramanian. The Council went into Closed Session to discuss the following matters:
1. Conference with Legal Counsel—Existing Litigation.
Government Code Section 54956.9(a).
City of Livingston v. The Dow Chemical Company, et. al.
Case No. CGC 05-442837.
2. Conference with Legal Counsel—Anticipated Litigation.
Government Code Section 54956.9(b).
Significant Exposure to Litigation (1 Case).
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The City Council voted 4-0 (Mayor Varela absent) to add a closed session item under Conference with Legal Counsel—Anticipated Litigation Government Code Section 54956.9(b) after finding that it came to the attention of the City after the agenda was posted and required immediate action by the City Council.
OPEN SESSION
The Council came out of Closed Session and into Open Session.
SPECIAL MEETING
CALL TO ORDER

Mayor Varela called the meeting to order at 7:10 p.m.

PLEDGE OF ALLEGIANCE

The pledge of allegiance to the flag was recited.

ROLL CALL

Mayor Daniel Varela, Sr.

Mayor Pro-Tem Rodrigo Espinoza

Council Member Frank Vierra
Council Member Margarita Aguilar
Council Member Martha Nateras
Also present were members of the Livingston Planning Commission.
CLOSED SESSION ANNOUNCEMENTS

There were no reportable actions taken.

CHANGES TO THE AGENDA
None.
CITIZEN COMMENTS

Warren Urnberg, 1331 Eighth Street, commented that the City had an election last year. In January the League of California Cities held a meeting for all new mayors and council members in Sacramento. He asked why the City Manager attended when the meeting pertained only to new City Council members. He also asked what the cost was, pointing out the current state of the economy.

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Mr. Urnberg stated that on May 27-30, 2009, an executive forum for mayors and city managerswill be held in San Diego and he understands participants want to fly. He stated that if this is a(Page 3 of 15) rumor, the City Council needs to put a stop to it. He noted that in the past everyone took their own cars or a City vehicle. Mr. Urnberg commented with the amount of money the City is spending on lawsuits, it was his opinion that participants need to either take Amtrak or a Greyhound bus.
Mr. Urnberg further noted that the Planning Commission had to turn in their City Code books in mid-summer, and the City Council turned in their books after the election. He asked why this happened. He also asked how can the City Council and Planning Commission do their jobs without a Code book?
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Katherine Schell Rodriquez, P.O. Box 163, Livingston, stated with the economy the way it is, everyone is looking for a way to save a buck or two. One way would be to check out movies through the local library. She said the library does not have a lot of movies in house, but movies can be requested from locations across the state. She personally likes Sci-Fi, with a little philosophical edge. She is currently making her way through Series Babylon 5. She stated, “In addition to some amazing special effects, it delves into some fairly deep existential territory. The plot line takes place in the future, and revolves around characters from four main species or races if you will: Vorlon, Shadows, Human and Minbari. Each culture is defined by an existential question about the meaning of life. The Vorlon question is: who are you? The Shadow question is: what do you want? The human question is: why am I here? The Minbari question is: where are we going?
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“Destinies turn and events are set in motion by the way characters respond in answer to these four questions: Who are you? What do you want? Why am I here? Where are we going? These are the kinds of questions that make for some good science fiction. They also are the kinds of questions that make for some good introspection in the reality of the now. As a community, we are facing something of an uncertain future with many hard choices. As a Council you will be having the final say on some of these choices. Decisions that will set in motion a series of events that will affect the destiny of Livingston and its residents for many years to come. What will be in the future will be shaped in large part by what you decide in the now? So I will ask you, who are you? What do you want? Why are you here? Where we are going as a community will be the legacy of your answers to those questions.”
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DISCUSSION AND POTENTIAL ACTION ITEM
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1. Water, Garbage and Sewer Rates Public Information Meeting. City Attorney Subramanian presented the agenda item. She stated that Proposition 218 as embodied in California Constitution Article XIII D, section 6(a)(1) requires that the City proposing to impose a new or increase an existing property-related fee or charge provide written notice by mail to the record owner of each parcel upon which the fee or charge will be imposed. The notice must contain the following information: (1) the amount of the rates of the water, sewer, and solid waste service fees proposed to be imposed; (2) the basis upon which the rates for the water, sewer, and solid waste service fees were calculated; (3) a statement regarding the reason for the imposition of the rate increases to the water, sewer, and solid waste service fees; and (4) the date, time, and location of the public hearing when the City Council will consider the proposed rate increases to the (Page 4 of 15) water, sewer, and solid waste service fees. She noted that Article XIII D, section 6(a) (2) further requires that the public hearing to consider adoption of the rate increases be held not less than forty-five days after the mailing of the notice.

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City Attorney Subramanian stated that the City has prepared three notices, each of which meets all of the procedural requirements of Article XIII D, Section 6(a). The notices identify three scenarios for proposed rate increases for each of the water, sewer, and solid waste service fees that may be adopted by the City Council. The notices clearly state what the proposed rates may be for the water, sewer, and solid waste service fees under each scenario, the basis upon which they were calculated, the reasons for the rate increases, and the date, time, and location of the public hearing where the City Council will consider the adoption of one of the three rate scenarios for each of the water, sewer, and solid waste service fees.
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City Attorney Subramanian stated that the substantive provisions of Article XIII D appear in sections 6(b) (1)-(5). In accordance with these provisions, a property-related fee must meet all of the following requirements: (1) revenues derived from the fee must not exceed the funds required to provide the property-related service; (2) revenues from the fee must not be used for any purpose other than that for which the fee is imposed; (3) the amount of a fee imposed upon any parcel or person as an incident of property ownership must not exceed the proportional cost of the service attributable to the parcel; (4) the fee may not be imposed for a service, unless the service is actually used by, or immediately available to, the owner of the property subject to the fee. Fees based on potential or future use of a service are not permitted, and stand-by charges must be classified as assessments subject to the ballot protest and proportionality requirements for assessments; (5) No fee or charge may be imposed for general governmental services, such as police, fire, ambulance, or libraries, where the service is available to the public in substantially the same manner as it is to property owners.

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City Attorney Subramanian commented that a rate study has been prepared which analyzes and proposes three rate scenarios for each of the water, sewer, and solid waste service fees. Each rate scenario complies with these substantive provisions. She said Mr. Sudhir Pardiwala will explain the proposed rate scenarios and how they comply with Proposition 218.
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Sudhir Pardiwala, from Raftelis Financial Consultants, Inc., presented and explained each proposed rate scenario for water, domestic wastewater and solid waste services and how they comply with Article XIII D, Section 6(b) of the California Constitution. Please see  attachedWater Rate Study and Wastewater and Solid Waste Rate Study power point presentation. (not attached to this post at the present time)
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The City Council took a short break at 8:16 p.m. The meeting resumed at 8:22 p.m.
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Katherine Schell Rodriguez asked the following questions: What are capital projects? Why do we need them? What do they do for us? What future projects are being planned? If the enterprise funds are in a deficit where is the money coming from to pay the bills? What is the impact of this to the community? What will happen to the (Page 5 of 15) community? What will be the effect to the citizens as a community if the rates are not raised? Has the City received grant money in the past? What was that grant money used for? Does the rate structure have anything to do with qualifying for more grant money in the future?, and what does the City need to do to qualify for future State and Federal monies?
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City Manager Warne stated that the full rate study reports for water, wastewater and solid waste rates are on-line on the City website at http://www.livingstoncity.com. He explained the City is currently in fiscal year 2009. He said there are no capital projects scheduled for fiscal year 2010. There is $280,000 in fiscal year 2010 for repair, replacement and refurbishment that would cover such things as repair of wells perhaps or other kinds of things that the City needs to do to maintain the system so residents can have water. He said that in fiscal year 2011, $1,102,500 will be available for pipeline improvements and replacements. He said the lines in many places in the City were installed in the 1920’s, 1930’s, 1940’s, and 1950’s. They were galvanized lines so as the water moves back and forth through the system, the water lines are scoured, producing discolored water.
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City Manager Warne stated this led him to question #4 asked by Katherine Schell Rodriquez. He said last year the City spent approximately $3.2 million to replace 19,936 linear feet of old water line to address this issue. The money came from a $1.9 million Proposition 13 water grant from the State of California, and then the City augmented these funds from development impact fees. This was probably the first major waterline replacement project done in the City in 40 years. This project replaced about one-third of the lines that need to be replaced in the City. He added that the City would have received more Proposition 13 grant money, but the City’s water rates were so low that the people in charge of distributing the grants said the City wasn’t making enough effort on its own or doing its part to upgrade its water system. He said the City would have received more in grant funds if its water rates were more in line with other communities.
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City Manager Warne noted that in fiscal year 2011, $1,102,500 will be budgeted for wellhead filtering. He said the City anticipates new regulations coming down from the State that will require the City to filter some of its water. There is also another $280,000 for repair, replacement and refurbishment of the water system. He said that in fiscal year 2012, $1,157,625 will be budgeted for additional water line replacement. $1,521,119 will be budgeted to drill another well and $280,000 is allocated for repair, replacement and refurbishment of the water system. He noted that in fiscal year 2013 the City plans to install back-up generators on four wells at a cost of $241,525 per generator, and complete more well-head filtering at a cost of $1,207,625. There will be an additional $280,000 for repair, replacement and refurbishment of the water system during that fiscal year. City Manager Warne stated the City has been very careful with its finances. The City has not raised water rates since 1995, and it must make up for the current accumulated operating deficit. He said the City needs to ensure the Water Enterprise Fund is operating in a sound financial basis. He commented that it is very painful to do this, but the City has reached a point where it must act. Rate increases must be done, and the only question is which scenario is going to be chosen. City Manager Warne noted that the only place the money can come from to cover the Water Enterprise Fund operating deficits is the General Fund, and this fund finances police and fire operations. He said (Page 6 of 15) that all other funds are restricted by law and cannot be used. If action is not taken to raise the rates, it is going to affect police and fire services. These enterprise funds are expending more money than they are taking in; so the City will eventually run out of money if action is not taken to raise the rates.
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He said that, as far as qualifying for grant money in the future, the City applies for every possible grant. City Manager Warne said that when the City applies for money from the State, the State always asks for the City’s water rate structure. If the City does not have a rate structure that shows that the City is doing what it can to match State funds, the City is going to be put at a disadvantage in the future.
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Sudhir Pardiwala commented that the state regulators look for a rate structure that encourages conservation.
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City Manager Warne stated that if the City is successful in getting grant money along the way, less rate money would then need to be allocated for these needed capital improvements. Then in the near future, there is a potential that rates could be adjusted or kept flat for a longer period of time.
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Bruno Ricardo Pena, 1458 Brandy Court, (spoke in Spanish through an interpreter) said the current rates for water, wastewater and solid waste is something like $60. The proposed rate will go up to around $90. He asked that taking into account that the population should grow, can the rate increase be spread out over 10 years. Mr. Pena also asked if the population does increase will the rates decrease.
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Sudhir Pardiwala replied that the City assumes that the increase in new connections will be very minimal over the next two years. He said that growth would allow rate increases to be spread over a larger customer base. He said that State laws and regulations prohibit the City from setting rates for a period longer than five years. If the City did obtain grants, the City Council could decide not to implement a rate increase in any given year.
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Mike Torres, 1616 Eighth Street, said there is a meter chart in the consultant’s presentation that has different meter rate charges based on meter size. He asked why the rates are different due to the size of the meter. He also stated that the large water users such as the Merced County Housing Authority, schools and Foster Farms are now getting their water metered. He asked what is the charge for high peak and low peak usage for them since they are closed on the weekends. Mr. Torres also asked why the City cannot wait for six months and get information on the number of gallons used. He also asked how the City gets these numbers, how did the City select this company to get these numbers, and how much is the City paying this firm?
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Sudhir Pardiwala stated that the meter charge consists of two components: (1) customer service component, and (2) the meter capacity and the cost of maintaining the meters. Larger meters have greater demand on the water system and draw more capacity from the system. He said that this is a common approach in setting rates.
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City Manager Warne stated that the City has been aggressively installing meters. Meters have been installed at the property line at Foster Farms and at all of the schools. Meters (Page 7 of 15)  are currently being installed at the housing authority complex on F Streetand Hammatt Avenue. The City has installed over 1565 meters on residential homes. The City has only approximately 195 homes left that are currently not metered out of approximately 3,034 accounts. He noted that by fiscal year 2010, the City will have every premise on a water meter. He noted the City has been waiting since 1995 to raise rates, and it cannot wait any longer. The City needs to move forward. Each year the City should be evaluating to see where it financially stands with all its utilities, and making sure that there are adequate revenues to cover expenditures.
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City Manager Warne responded as to how the City obtained this rate consulting firm. He said that we live in a litigious society and litigation has been threatened. The City Attorney was directed to find someone she felt comfortable with their approach and methodology in order to comply with all federal, state laws and regulations relating to setting rates. They have selected this particular firm who has extensive experience in rate setting in California and nationwide. The firm [Raftelis Financial Consultants, Inc.] has been working closely with the City Attorney to make sure that the City is moving forward with its rate studies in full compliance with the law. There are no guarantees that someone will not choose to take on the City regarding its water, wastewater and solid waste rates, but the City has done everything it can to meet the criterion of the law and meet all of the standards outlined by the City Attorney in her initial comments.
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Theresa Byrd, 435 East Avenue, asked why the residential garbage rate is more than what the City pays Gilton Solid Waste Management. She further asked if wages could be frozen for City employees in these departments. Ms. Byrd stated that the City wants to raise citizens’ rates higher than what is charged in Atwater, Merced and other larger cities.
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City Manager Warne responded that the difference between the residential solid waste charges and what Gilton Solid Waste Management charges includes additional charges for such things as street sweeping, overhead, including the cost of utility billing. The City has people that work in the office and those costs are spread across the various utilities. The City made an earnest effort to go out to bid on its garbage rates. He said that he had been approached by garbage contractors that said that they could provide the service for less money. He said the problem is that in 1997, the City Council approved a contract with Gilton Solid Waste Management that required the City to give eight years notice to Gilton before it could go out to bid for a new garbage contractor. City Manager Warne commented that the City has given Gilton Solid Waste Management notice, but there are still about 3-1/2 years left on the contract. City Manager Warne said the contract is poorly written and has been evaluated by the City Attorney. He said that there is not much that can be done about it. He said the City and residents are stuck with these rates. However, this is not as a result of the actions of the current City Council. The garbage contract has not been out to bid since 1986. He asked if this is a good business practice. He said that it is not. But the contract was rolled over by several City Councils.
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City Manager Warne commented that the City has five labor unions. The City must by  law meet and confer with the unions regarding employee wages, salaries and benefits. He said the City has chosen not to enter into multi-year labor contracts, which has caused (Page 8 of 15) problems in many other cities, especially where these cities agreed to salaries and benefits that they could not afford. This is why they are laying people off.
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Assistant City Manager/Finance Director Lewis elaborated on the annual Consumer Price Index (CPI) that is built into Gilton’s contract. She said that whatever the Consumer Price Index (CPI) is between San Francisco and Los Angeles, Gilton’s contract allows them to increase their rates by the same ratio.
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Ms. Lewis explained that in her opinion, there should be no comparison between larger cities and smaller cities. She said it doesn’t matter what cities are used for comparison. There are no two cities that are alike. She noted that the infrastructure in the ground would have to be the exact same age. The City of Merced keeps their infrastructure up. The City of Livingston has not. In her mind that type of information just clouds the issue. It really doesn’t matter what those other cities are paying. She said she cared about the cost to provide service to our community.
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Ms. Byrd commented that rumor is that the City is raising the rates to have a higher reserve to fall back on in the future.

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Ms. Lewis replied that the City needs capital reserves to plan for the future projects, just like at home. She said if you need a new roof in five years, you plan for it.
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Ms. Byrd asked why the City did not raise the rates before. Ms. Lewis explained that to generate money for capital projects you have to plan over a period of time. She said the City did not raise rates then to take care of the situations that the City is dealing with today.
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Ms. Byrd commented that she lives on social security and the City does not know what this does to her. She said that she is ill.
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Ms. Lewis replied, “Please do not confuse the two issues.” What the City is presenting tonight is what it is facing financially if it doesn’t do something about the rates. She said she sympathized with everyone present. Money is a problem for probably 90 percent of the people in this room or you would not be here, she noted. Ms. Lewis added that the City is very sympathetic to what it is dealing with and the City Council and staff are here looking for solutions to hopefully do the very best it can for the community and planning for the future.
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City Manager Warne commented that all of those people who are on fixed incomes, social security are currently subsidizing the large volume residential users because there is a flat rate to 35,000gallons a month. He said that all of those people using over 35,000 gallons a month are paying the same water rate as those people only using 5,000 gallons per month. He asked, “How fair is this?” He noted the proposed rate structure fixes that. if a person uses less water, they are going to pay less.
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Ms. Byrd asked how much would she be paying. City Manager Richard Warne stated it depended on how much water was being used. Ms. Lewis commented that she encouraged anyone present to come in and talk to staff. She said they did not need an (Page 9 of 15) appointment. She said it is much easier to sit down with someone and talk to them about the rates.
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Rick Soria, 1526 Main Street asked if the grants do not go through does the City have a back-up plan to apply for more grants.
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City Manager Warne explained that the City is constantly applying for grants and has been successful in securing grants. He noted that the City received a $871,000 federal grant to put in another 11,000 lineal feet of sidewalks. He said this is just an example of the City’s successful efforts. City Manager Warne said that the City is aggressive when applying for grants.
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Myra Bettencourt, 1584 Duke Court, asked how does a resident know what size meter they have. Ms. Kathryn Reyes, the Water Superintendent, replied the meters are one-inch meters. Ms. Bettencourt asked if it is possible to share a garbage container with one of her neighbors. City Manager Warne responded staff would have to look into this.
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Mayor Varela stated that this whole process has been going on since 1995. He said that past City Councils did not want to deal with this because it is going to hurt the pocket book. He commented that through the whole election campaign everyone running for office knew that the water rates needed to go up. Mayor Varela continued by saying this nis something that the City does not take lightly. The City knows it has to happen. Mayor Varela commented this is why past City Councils did not do anything about it because they knew it was hard, and they did not want to deal with what the current City Council is dealing with tonight.
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Bill Ingram, 656 F Street, asked if the City has signed a new contract with Environmental Management Services (EMS) for operation of the domestic wastewater treatment plant? He asked what happened to the money from the land dedicated to the domestic wastewater treatment plant that was purchased from Gallo? When was the dirt sold? What was dewatering? Referring to lift stations, he said the City just completed the Highway 99 lift station. He asked if the City is using the same size meters for all residential properties. He also asked if Gilton Solid Waste Management raised its rates recently.
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Ms. Kathryn Reyes, the Water Superintendent, responded that the City automatically installs a one-inch meter and a one-inch service line when it replaces a water main. If the City taps into an existing water main, it only installs a ¾-inch meter on a ¾-inch service line. She explained that wastewater dewatering would be the sludge that is created during the wastewater treatment process. She said when wastewater is treated, wet sludge is created. She said the sun dries the sludge and then it needs to be disposed of at another location.
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In regards to Environmental Management Services (EMS) contract for the operation of the domestic wastewater treatment plant, City Manager Warne commented that there was a new contract approved two years ago. He said the contract does allow for a cost-ofliving increase each year. He noted the City did allow the cost-of-living increase the first (Page 10 of 15) year. He said in the second year he notified EMS that a cost-of-living increase would not be possible.
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City Manager Warne stated that the dirt issue has been brought up before on a number of occasions in open City Council meetings, and Bill Ingram was on the City Council when this transaction took place. The City sold approximately $619,000 in dirt from the domestic wastewater treatment plant for the Highway 99/Sultana Interchange. One hundred percent of the money went towards recreation. He said before the City did this, the City checked with the City Attorney and independent auditors, and was told that the City could sell the dirt and put 100 percent of the money towards youth programs. He noted that Memorial Park improvements and the Little Guys and Gals Park were partially funded with this money.
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Regarding Bill Ingram’s questions regarding rates, the City Manager Warne added that Gilton Solid Waste Management has tried to raise their rates and the City has told them “no”
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Dennis Strand, representing Foster Farms, stated that his interest is on Foster Farms’ water rates. He asked if there is any backup for the recent projects on the capital plan. He said that he has heard that the well head treatment projected costs were $500,000,. yet, the capital plan was over $1 million. He also said that he added up the revenues under the three scenarios and he thought that they are different. He said that the operating reserve recommendation is 45 days, but on the charts in 2013 the reserve looks larger than recommended. Also the rate stabilization reserve looks larger than recommended. He stated that it looked like all prior deficits are being paid back to the General Fund. He asked for a clarification if this was the case.

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City Manager Warne responded that the engineer’s estimates on thewell-head treatment capital costs have been previously brought up by Foster Farms. In response to Foster Farms’ concerns, the City had these well-head treatment capital costs reevaluated by its consulting engineers. He said the City’s consulting engineers believe that the well-head treatment capital costs are accurate. He commented that as far as the revenue collections for the different scenarios are concerned, he would turn that issue over to the City’s water rate consultant and have him address the issue.
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Sudhir Pardiwala, from Raftelis Financial Consultants, Inc., gave an explanation of the revenues and the reserves. He stated that each scenario will have a different reserve because the rate increases happen at different times and different amounts in each scenario. He also said that there is some rounding of the numbers that accounts for some of the differences. He also said that there are system capital costs in fiscal year 2014 that will use up most of the reserves.
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Sudhir Pardiwala stated that the City will recover all prior-year Water Enterprise Fund deficits over time through the rates.
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The Mayor asked if there were any other questions.
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Warren Urnberg 1331 Eighth Street, recalled that a water survey was taken in 2007 by Dan Bergman. He asked how did the City end up with this company to take this survey. He said he checked the Internet and said that this person had been previously involved (Page 11 of 15) with oil and gas and had worked for Enron. He said he asked Ms. Lewis about the cost of the survey, but she was unsure of the exact cost because other things were involved. Mr. Urnberg commented that in 2007, when the City wanted to raise the rates, he asked that the rates be raised by $5 or so because Foster Farms and the schools were not on-line being metered. He said at that time Foster Farms was not on-line and neither were the schools, but they are on-line now and being metered for their water use. He asked how much is the Merced County Housing Authority going to contribute as far as money in additional revenue now that meters are being installed. Mr. Urnberg feels that some of this is not going to work until the City finds out “real good” numbers. He said there are eight residents on his street that are on social security, and raising the rates is going to financially hurt them.
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City Manager Warne responded that meters have been installed. He said he did not know what the future is going to be or how much additional revenue was going to be generated as a result of these meter installations. He further stated that the meters have not been in operation long enough to determine the extent of the additional revenues. City Manager Warne noted that Foster Farms’ meters went in last May, Livingston High School in July, and meters have been installed at Campus Park Elementary School, and meters are currently being installed at the Merced County Housing Authority complex. He estimated that the City had installed approximately 500 water meters last year. He said  the meters should help on the revenue side, but it is still too early to tell to what extent.
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Warren Urnberg commented that the Housing Authority should bring in quite a bit more money. He commented that, if the Housing Authority is bringing in more money with their new meters, then “it should bring us down some because right now the City doesn’t know what the difference is going to be.”
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City Manager Warne commented that the City had been trying to get meters installed at the Housing Authority Complex for approximately two years. The City finally had to use some of its persuasive power with the City Attorney to get the meters installed at the Housing Authority Complex. He said the City has also had difficulty getting meters installed on some of the other large users. City Manager Warne said that the City has been aggressive and tenacious in getting meters installed in the City, and this should help generate more revenues. He stated that more meters were installed on large users under this administration than in any other previous administration.
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Rick Soria stated that most of the cities around Livingston are recycling. He asked if the City had checked with the other cities about what their rates are and if their rates have dropped because of the recycling.
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City Manager Warne responded that most cities in California that are recycling use a three-can system. One can is for green waste, one can is for recycling and one can is for garbage. He stated that if the City had been allowed to send the garbage contract out to bid, this is the system it would have proposed. He said if the City adds more cans at this time, Gilton will charge the City for the cans. He added that the City is going to have to wait until it can bid out its garbage contract before it can implement a three-can solid waste and recycling system.(Page 12 of 15)
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Mayor Pro-Tem Vierra stated Merced County will charge the City for x number of tons even if everything goes to recycling.
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Gurpal Samra, 1034 J Street, stated everyone knows the rates have to be adjusted, but the City Council should just do what it can and make it bearable for all. He asked if the City was adding any new personnel or doing anything else that would make the cost so substantial. In reference to water usage, Mr. Samra asked what the true cost to the City is to provide 1,000 gallons to his residence. He further asked if residents can share garbage containers. Mr. Samra asked the City Council to think about any conflicts of interest they may have, and not to vote if they have conflicts of interest.
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Sudhir Pardiwala, from Raftelis Financial Consultants, Inc., responded by giving an explanation of the cost of 1,000 gallons of water. He referred to one of the slides in his presentation and said that it costs $1.69 for residential customers. He also said the consultants have proposed a tiered rate system that provides an incentive for conservation. Those that use less water will pay less.
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City Manager Warne responded that there is no increase in personnel in the Sanitation Enterprise Fund. He said that the City is operating with six full-time and three part-time employees, fewer than it had two years ago. He stated that except for police and fire personnel, the City has not replaced people that have retired or otherwise left the City.
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City Manager Warne commented that as far as sharing garbage cans is concerned, the City would have to look into that possibility.
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City Attorney Subramanian responded to the question about conflicts of interest. She stated that this issue has been analyzed by her office and stated that none of the Council Members have any conflicts of interest regarding their voting on these rates.
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Mark Mendoza, 1114 Brandy Court, asked the following questions: Is the City going to put together a program for low-income people or those on fixed-incomes or social security? Why is the City raising rates now that the economy is so bad? Does the City Attorney make all City decisions? Is the City raising rates now that it cannot get any monies from developers now that the subdivisions have stopped?
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City Manager Warne responded that he does not think that Proposition 218 allows for special programs because, under the law, everyone must pay their proportionate share.
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City Attorney Subramanian agreed and she explained that the City cannot subsidize any users. Every person is paying their rate appropriately.
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Mr. Mendoza asked if the City is going to evict people from their homes. He further asked what the City is going to do. He asked if the City was going to shut off people’s water when they have children at home or is the City just waiting for a lawsuit. How can you shut the water off for a family that has three or four kids? Have you seen how much the rates are going to be raised, especially when the economy is so bad?
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Mayor Varela stated as far as the rates not being raised when the economy was good, that is a question you should take up with someone else. He said this City Council is being (Page 13 of 15) forced to handle this situation—and just as Ms. Lewis referenced earlier, if your roof is leaking you have to replace it. He stated that this is our City and we must deal with the water, sewer and garbage rates. That is just the way it is. He said that everyone understands that this process has to take place.
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Mr. Mendoza said everyone does not understand why the rates have to be adjusted. He asked how come it was so much. Why did the City not raise them a little at a time over the last 10 or 15 years?
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Mayor Varela stated that they absolutely should have done that. He explained that the water rates had not been adjusted since 1995. He said he understood Mr. Mendoza’s frustrations. Mayor Varela commented that he is dealing with this frustration and the folks that voted for him are going to have to deal with this. He said that this City Council is going to have to deal with this when past City Councils did not want to deal with the situation.
*
Mr. Mendoza asked why the residents should have to pay for additional wells for new development. City Manager Warne stated that the current residents are not being asked to pay for new wells for new development. He said that there is one well in the capital improvement plan, but this is primarily for fire flow.
*
Mayor Varela stated that this is hard and he understands Mr. Mendoza’s frustration. He said it is painful and it is going to cost. He continued by saying that, by City Councils’ not dealing with it in the past 10 or 12 years, this is where we are today. We have to deal with this now. He said everyone that ran for City Council knew about this issue. The right decisions were not made in the past, but we are not living in the past. Mayor Varela said that his mother is on a fixed income and he has to be concerned about it. He said that Merced, Atwater and other communities are raising their rates. He said that this is something that has to happen.
*
Mayor Varela asked if anyone else had a question.
*
One resident asked if this firm took into account the unemployment rate, and is it factored into the water rate? He said that the combined rate for all utilities is over $90 per month.
*
Enrique Vasquez, 1255 Ninth Street, with Council Member Espinoza interpreting, said currently the older homes have brown water and asked what will happen if the new homes have the same brown water.
*
City Manager Warne responded that the water line replacement projects have been in the center of town. He said the problem with brown water is primarily in the center of town because that is where the old pipes are located.
*
Ramon Avila, 1021 Patzer Court, said he was told that the home of this resident was built in 1985.
*
City Manager Warne further explained that the majority of the old pipes are in the center of the town. However, the water moves through water pipes throughout the City. He (Page 14 of 15) noted the brown water can end up in any area because the water moves throughout the system. He said it just depends on the usage and the demand in different parts of the City, including whether Foster Farms is operating or shutting down. He said someone could be living in a new home and still have brown water. The discolored water will be a problem until all of the old pipes are replaced.
*
Council Member Aguilar said she is aware of the brown water and she has also experienced this problem.
*

City Manager Warne stated that in some cases the pipes in the City right-of-way have been replaced. But if a resident has an old service line from the water main to their own home, they still may have brown water from their own plumbing.

*
Enrique Vasquez, with the assistance of Council Member Espinoza, asked if the residents will still have the same problem with the water when the rates are raised.
*
Mark Mendoza asked if the City conducted a survey on what people earn in the City of Livingston. He said the City Council should take a survey of people in town.
*
Mayor Varela responded that this is what the Town Hall meeting is for–to hear citizens’ concerns. He said the City Council wanted to hear comments and try to find a solution. Maybe there is a program to help low-income people with their water rates.
*
Bruno Ricardo Pena asked how long ago did the water rate consulting firm start conducting their study. How far back did this firm go? Are these the only scenarios the City will use?
*
City Manager recalled that the study began in 2008. He said the City has been dealing with this for one year and it needs to make a decision. He added that the problem is the City cannot provide water at the same rate it did in 1995.
*
Mayor Varela stated that the City Council has listened to comments made and will take them into consideration.
*
Rick Soria asked if the City is only going to raise the water rate one month, the sewer rate the next month, and the solid waste rate another month.
*
City Manager Warne stated the proposal is to increase all the rates at about the same time.
*
City Attorney Subramanian commented that, if the City Council does not select one of the three scenarios for the three different rates, the City will have to reanalyze the rates and re-notice the public hearing.
*
Mayor Varela thanked the Planning Commissioners for their attendance and welcomed aboard the new members.
*
Mike Torres asked when the public hearing would be. City Manager Warne stated it would be April 21.

Page 15 of 15

ADJOURNMENT

The meeting was adjourned by consensus at 10:01 p.m.

_________________________________

City Clerk of the City of Livingston

APPROVED: April 21, 2009

______________________________

Mayor or Mayor ProTempore

The written meeting minutes reflect a summary of specific actions taken by the City Council. They do not necessarily reflect all of the comments or dialogue leading up to the action. All meetings are digitally recorded and are an official record of the meeting’s proceedings. Digitally recorded verbatim minutes are available, upon request, and may be obtained at Livingston City Hall.

2 thoughts on “March 26, 2009

  1. Pingback: A Soldier in Need, a Notice of Intent, and a Presidential Turkey « Thegardeningsnail's Weblog (because not every critter is hiding under a rock…)

  2. Pingback: A Brief History of Time About Utility Rates Part 8: A Change of Consultants: An Illegal 42’ Sewer Pipe; and a Special Planning Commission Meeting | Thegardeningsnail's Weblog (because not every critter is hiding under a rock…)

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