ITEM:		CONSENT CALENDAR
2.	CONSIDER ADOPTION OF RESOLUTION 2016-05 – REESTABLISH USER FEE AND SUSPEND COLLECTION OF USER FEE FOR REMAINDER OF FISCAL YEAR 2015-16
Meeting Date:			March 21, 2016	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			David J. Stoldt	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: The Administrative Committee reviewed this item on March 14, 2016 and recommended approval.

SUMMARY: On February 17, 2016, the Board of Directors adopted Resolution No. 2016-03 – Reestablish User Fee and Suspend Collection of User Fee for Remainder of Fiscal Year 2015-16. Upon review of Resolution No. 2016-03, it was determined that it should be amended to clearly state that collection of the User Fee would be suspended only on California American Water bills. Draft Resolution No. 2016-05 (Exhibit 2-A), states in sections 1, 2 and 3 that the user fee will be suspended on Cal-Am water bills, and in section 5 confirms that Resolution No. 2016-05 supersedes Resolution No. 2016-03.

RECOMMENDATION: The General Manager recommends approval of Resolution 2016-05.

DISCUSSION: On January 25, 2016, the California Supreme Court filed its opinion in the User Fee matter, determining “PUC Decision No. 11-03-035 (rejecting Cal-Am’s application for authorization to collect the District’s user fee, and also rejecting the settlement agreement entered into by Cal-Am, the District, and the Division of Ratepayer Advocates) and PUC Decision No. 13-01-040 (denying the District’s application for rehearing) are set aside. The matter is remanded to the PUC for further proceedings consistent with the views expressed herein.”

What this means is that the District’s suspended User Fee can be reestablished on California American Water Company (Cal-Am) bills. However, the level at which the User Fee shall be set by the Board and the mechanism for reinstatement by the California Public Utilities Commission both remain unresolved. Hence, at this time the Board should consider removing the suspension, but waiving collection for the remainder of the fiscal year.

With adoption of Resolution 2016-03 and the subsequent adoption of Resolution 2016-05, the District reestablishes its already existing, but suspended, User Fee in an amount of 8.325 percent of the Cal-Am bill, said amount comprised of 7.125 percent for the general activities of the District including environmental mitigation, conservation and rationing, water supply, and any other District purposes and1.2 percent specific to the ASR program, including direct costs, reimbursement of reserves expended for ASR project costs, and repayment of any commercial loans expended on behalf of ASR.

However, by reestablishing the User Fee, but waiving collection for now, the Board recognizes that it never, of its own volition, removed the User Fee and that it is still in effect, but that the Board must consider the future financial implications before collecting the revenues in a year for which an approved budget exists.

EXHIBIT

2-A Draft Resolution 2016-05 – Reestablish User Fee and Suspend Collection of User Fee for Remainder of Fiscal Year 2015-16

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