A considerable portion of the Coronado City Council meeting of Tuesday, March 18, 2014, was spent discussing the city’s Wastewater Enterprise Fund. The agenda item and subsequent discussion were generated by a projected net operating loss for the fund in Fiscal Year 2013-14. The fund’s operational costs and capital expenses will be higher than the income derived from fees, charges and investments. Despite operating at a net loss this year, the fund is still projected to end FY 2013-14 with a positive balance of $8.3 million.
In addition, the city of San Diego owes the city of Coronado approximately $1 million in a ‘true-up’ settlement between the cities relating to wastwater. As Coronado’s Director of Administrative Services Leslie Suelter noted, “That’s a size-able amount of money returning to the city of Coronado. That will give us some flexibility going forward.”
However, looming on the horizon is an estimated minimum of $6 million in capital expenditures over a five-year period to upgrade three pump stations in the city. According to the city staff report, two of the main wastewater lines, the Cays and the Glorietta are nearing the end of their expected service. Replacing both lines could cost the city’s Wastewater Enterprise Fund an additional $10 million to $20 million in the not-too-distant future.
Due to the flat topographic layout of the city, Coronado’s wastewater system is extensive. Included in the system are 45 miles of main wastewater lines, 16 pump stations and the Transbay pipeline. Since the city is so flat, everything needs to be pumped, which in turn costs money.
Making a presentation to the council was Atkins Global Senior Project Manager Caryn Keese, who presented key elements of a “Wastewater User Rate Study” prepared for the city. Keese indicated the rate study included three steps: revenue requirements, the cost of service and the creation of rates and rate design. She also recommended a six-month cash reserve in the fund, which would equate to approximately $3 million.
Keese added that the current wastewater rates, which haven’t been increased since 1995 are insufficient to fund the system. The study says that monthly fees would increase for a typical Coronado residence from $31.64 to $45.81, with more modest additional one or two percent annual increases over the next four years. Homeowners pay wastewater fees through their annual property tax payments to San Diego County, reflected under the ‘Sewer Service Charge’ line item.
Making matters more complicated in forecasting wastewater rates going forward are the Navy and the city of San Diego. The Navy, which contracts with Coronado for the transportation of wastewater from its NAS North Island and Naval Amphibious Base installations to the San Diego Metro System, also hasn’t paid a rate increase since 1995. Negotiating an equitable wastewater rate increase with the Navy is important to the city going forward.
Another unknown is the full extent of cost increases from the San Diego Metro System that could come in the future. In 2015 San Diego’s permit for offloading treated wastewater off Point Loma is up for review and renewal. Any additional costs for treatment upgrades will be passed along to the city of Coronado on a proportional basis.
The Coronado City Council seemed to be united in the feeling that the city’s wastewater rates needed to be raised, with the plan for implementation of the new rates up for debate. The city staff proposed a ‘Now’ or ‘Later’ pair of alternatives for the council. The ‘Now’ version had the suggested selling point of starting in Fiscal Year 2014-15 and would allow for a more gradual rate increases over five years. The ‘Later’ alternative would allow the city more time to negotiate with the Navy regarding rate increases, while also allowing more time for collection of financial data related to the city’s wastewater infrastructure and the possible impact from rate increases from the San Diego Metro System.
The council decided to bifurcate action on the issue, with the first motion being to receive the Atkins report, while also directing the staff to update the rates charged the Navy for wastewater transmission. Councilmember Mike Woiwode made the motion to go forward with the ‘Now’ option, or Option ‘A’ from the staff, with the additional provision that the final rates would not be set until a formal response had been received from the Navy. Woiwode, Mayor Casey Tanaka and Councilmember Al Ovrom voted in favor of the amended Option ‘A.’ Councilmembers Barbara Denny and Richard Bailey voted against the motion.
At the conclusion of the meeting councilmembers, at the request of City Manager Blair King, worked to establish the council’s priorities for FY 2014-15. Each councilmember was given five colored dots to place next to topics displayed on large sheets of paper placed on the walls throughout the council chamber. Seven topics received two votes each, which King took to be direction from the council. The topics included: implementation of the summer shuttle bus service; a plan for the city’s toll plaza, traffic calming and enhancements; finalization of the Wastewater Master Plan; plans for addressing the Air Installations Compatible Use Zones (AICUZ) report and the Joint Land Use Study (JLUS) issues with the Navy; improvement of the entrance to the Coronado Cays; reformation of the city’s Residential Standards Improvement Project (RSIP) Committee; and two votes were cast for the Pomona Roundabout project.
In other council actions:
• The council approved the conversion of nine existing apartments at 1106 Fourth Street into seven condo units. The city’s Planning Commission had previously approved the project and granted exceptions for a reduction to five unassigned parking spaces where 14 spaces would normally be required. Denny, feeling that it was a density issue voted against the project. Tanaka, who said that allowing the condo conversion would save another historic structure for the city, was joined by the other councilmembers in the 4-1 vote to approve the project.
• As part of the consent agenda and in keeping with the wastewater theme, the council approved $255,234 for a construction contract with Tharsos, Inc. for the Cays wastewater force main assessment and air vacuum valve assembly replacement project. An additional $34,545 was approved for Harris and Associates to provide construction support services.
• Another consent item included awarding a construction contract to Select Electric, Inc. for accessible pedestrian signals and the 10th Street reconfiguration project in the amount of $199,900.
The Coronado City Council meets on the first and third Tuesdays of each month at 4 p.m. The meetings are held at Coronado City Hall located at 1825 Strand Way in Coronado.