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Water Rate Study Ad Hoc Committee Meeting
Feb 8th at 4:30pm- Details pdf
Why More Water Rate Study?For much of 2010 and 2011, a consultant, at the direction of the City Council, conducted a study of the City of Fullerton’s water system, its capital improvement needs and its rate structure. In July 2011, the conclusions of that study were brought to the City Council for consideration. The Council took no action on the study and, instead, directed that further study be done – specifically on the public notification process and the legality of the “in-lieu franchise/property tax” transfer of funds from the Water Fund to the General Fund. - The results of this expanded study are nearly complete and will be available for public review beginning with a meeting of the Council-appointed Water Rate Study Ad Hoc Committee in February.
- Prior to that, there will be a study session on all things water and water-related in the City of Fullerton in January.
- Finally, the study and committee recommendations are tentatively scheduled to come to the City Council in March.
- Please check this page often for exact dates of these meetings and further information.
Rate Study Developments The City of Fullerton Water Utility has been, since November 2010, in the process of conducting a water rate study. During several public meetings in 2010, concerns were expressed regarding the annual transfer from the Water Fund to the General Fund, and whether this transfer complies with Proposition 218.Historically, this transfer has been set at 10 % of the utilities gross revenues and is in lieu of franchise fees and property taxes.However, Proposition 218 states that fees and charges shall not exceed the cost of providing the service for which the fee or charges are imposed.To examine whether the City’s current methodology complies with Proposition 218, the City has done a comprehensive study to determine the direct and indirect cost of service provided by the City’s General fund to the Water Fund.
Rate Study Background The goal of the study is to ensure that the revenues cover the cost of services, meet the debt coverage requirements, and provide revenue for capital improvements. The City of Fullerton has approximately 31,000 water service connections and maintains 420 miles of potable water mains with 11 wells and 15 reservoirs on 12 pressure zones.
Why do a Rate Study? The main reason is insufficient funds to meet the rising costs for needed improvements to city water infrastructure (pipelines, reservoirs, pump station equipment and wells).For example, the City’s 105-year old water system needs $60 million to replace aging water mains that have reached their useful life (70 years). Postponing this replacement could cause service disruptions that may cost more money, along with inconvenience to the community.The graph below shows the aging water pipeline by decade in the City.
Funding for Capital Improvement Projects 
Need for Reliable Infrastructure 
Monthly Rate Comparisons
The chart below shows the City of Fullerton’s current single family residential water rate compared to nearby Cities. While the cost structure and facilities vary between utilities, rate comparisons provide the City a barometer of its rates in relation to surrounding communities.The figure below compares the estimated monthly bill for 14,000 gallons of water consumption. 
Community Workshops and public meeting In the upcoming months, the City will hold public meetings, mail notifications and hold a public hearing. The meeting goals are to provide information on the proposed general fund transfer study, rate changes and receive feedback from community and business groups. Tentative Schedule for Rate Increase Adoption – 2011-2012 | | January 10, 2012 | City Council Meeting @ 6:30 p.m. - Water Study Session at Library Conference room | TBA | Water Rate Study Ad Hoc Committee Meeting (City hall Council Chambers) @ 4:00p.m. - Presentation and comments | March 20, 2012 | City Council Meeting @ 6:30 p.m. – Presentation and Comments | March 27, 2012 | Prop 218 Notification-Mailed Out To All Owners and Residents | May 16, 2012 | City Council Meeting @ 6:30 p.m. - Public Hearing, Resolution & Adoption |
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