Adjourned Reg Meeting 09/13/11APPROVED BY THE CITY COUNCIL ON SEPTEMBER 27, 2011
CITY COUNCIL MINUTES
OF AN ADJOURNED REGULAR MEETING
ORANGE, CALIFORNIA
September 13, 2011
The City Council of the City of Orange, California convened on September 13 at 8:15 p.m. in
an Adjourned Regular Meeting in the Council Chambers, 300 E. Chapman Avenue, Orange,
California.
1. OPENING
1.2 ROLL CALL
PRESENT - Whitaker, Smith, Cavecche, Dumitru, Bilodeau
ABSENT - None
1.3 PRESENTATIONS/ ANNOUNCEMENTS/ INTRODUCTIONS -None
2. PUBLIC COMMENTS - None
3. CONSENT CALENDAR - None
4. REPORTS FROM MAYOR CAVECCHE - None
5. REPORTS FROM COUNCILMEMBERS - None
6. REPORTS FROM BOARDS, COMMITTEES, AND COMMISSIONS - None
7. ADMINISTRATIVE REPORTS
7.1 Review of Water Rates.
NOTE: Councilmember Bilodeau recused himself from discussion due to his position on the
Orange County Water Board, and left the dais.
Michael Wolfe, Acting Water Manager, provided a power point presentation.
He reviewed changes from the last rate model, noting the new model reflects actual
expenditures of approximately $2.5 million less. This amount includes $1.7 million less in
water costs, due to factors including weather, conservation and the economy.
He reviewed water production history since 1999, noting that last year's water production was
low compared to the average over the last 13 years.
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CITY COUNCIL MINUTES
September 13, 2011
Mr. Wolfe also reviewed possible expenditure reductions of approximately $700,000, most of
which are productions costs, and the associated impacts and consequences to these reductions.
Councilmember Whitaker clarified that his intent to try to cut $1 million was to cut overhead
costs not related to actual water production, to hopefully lower the overhead ratio from
approximately 20% to a 10% range.
Mayor pro tem Smith pointed out that Orange's rates were already the lowest in the County,
that the operation was already running lean, and that it may not be feasible to cut another $1
million out of the operating budget.
Mayor Cavecche agreed that production costs, such as preventive maintenance, can not be cut
on a continuing basis; but there also may not be much room for cutting operating costs. She
suggested staff meet with Councilmember Whitaker in order to bring back a report to the entire
Council on any ways to cut the budget.
Mr. Wolfe reviewed actions already taken to reduce water fund expenditures, fixed and
variable costs, and pass through compliance with Prop 218.
NOTE: Mayor pro tem Smith left the dais and did not return to the meeting.
Mr. Wolfe then reviewed a revised water model to include scenarios for potential rate
increases. Options included a full cost of recovery, a gradual recovery and an extended
recovery. In addition, options were shown which account for a possible pass through of costs
from outside agencies.
Council discussed a water model in which rate increases associated with escalating costs from
outside agencies can be accounted for separately from increases associated with increase from
costs directly controlled by the City; that this could set up a model going out several years.
Council then discussed the need for a follow up study session, possibly in November, for
further review of this type of model, a reserve policy and a policy to address concerns with
multi- family residential units.
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CITY COUNCIL MINUTES
8. REPORTS FROM CITY MANAGER - None
9. LEGAL AFFAIRS - None
September 13, 2011
10. ADJOURNMENT - The City Council adjourned at 9:30 p.m. to its Regular Meeting
of Tuesday, September 27, 2011, at 4:30 p.m. in the Council Chambers.
Declaration of City Clerk, Mary E. Murphy, declaring posting of the City Council Agenda of
a Study Session on September 13, 2011 at Orange Civic Center kiosk, Police Facility at 1107
North Batavia, and Orange Public Library at 407 N. Chapman; all of said locations being in
the City of Orange and freely accessible to members of the public at least 72 hours before
commencement of said Study Session.
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% CI CLERK
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