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RESOLUTION 59-22 RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS INCREASING SEWER SERVICE CHARGES IN BOTH THE PALO ALTO AND LOS ALTOS SEWER BASINS WHEREAS, pursuant to the Los Altos Hills Municipal Code and state law, the Town imposes sewer service charges on users of the Town's public wastewater collection, transmission and disposal system. The purpose of these charges is to generate sufficient revenues to: pay the annual cost of administering, operating and maintaining the Town's wastewater collection system, pay the charges levied by the City of Los Altos and the City of Palo Alto for sewage transmission, treatment, and disposal services, develop sufficient reserves to fund needed improvements to the Town's system and to provide for unforeseen emergencies, and pay for other lawful obligations and expenses of the Town; WHEREAS, the Town retained the services of HF&H Constultants, LLC (HF&H) to prepare an analysis of the adequacy of the Town's existing sewer service charges. HF&H completed a study recommending increases in the Town's existing sewer service charges in order to cover the Town's obligations, costs, and expenses relating to the wastewater collection system. The Town Council preliminarily approved and adopted the study at its meeting on March 17, 2022; and WHEREAS, the basis upon which the amount of the fee or charge was calculated is the following: The Sewer Fund is an Enterprise Fund that is self-supporting activity and which provides service on a user charge basis to residences and businesses. Sewer Service Charges are set to recover revenues sufficient to adequately fund sewer utility operations, maintenance, and capital replacement expenditures, while keeping rates as competitive as possible and maintaining a prudent level of reserves. The charge is for a "Unit of Service" and is the basic charge for treating wastewater for the typical single-family residence; and WHEREAS, the Town has compiled with all legal requirements in adopting the sewer service charge, including, but not limited to, California Constitution Article XIIID, Section 6. The Town provided 45 days mailed notice to the parcel owners that would be subject to the increased rates, of a public hearing to consider the proposed sewer service charge rates and to receive protests against the proposal. The public hearing was held on May 25, 2022. The Town Council heard and considered any objections or protests at the hearing. A majority of owners of parcels did not submit written protests against the proposed sewer service charge rates at the public hearing; and WHEREAS, the Town's sewer service charge rates were last adjusted approximately 7 years ago. Since that time, the costs of maintaining the Town's collection system has substantially increased, necessitating a rate increase. Additionally, the Town anticipates increased spending on capital improvement projects over the next several years. Without the proposed rate increases, the Town's sewer fund would not have sufficient revenues in future years to meet operating expenses and capital obligations; and Resolution 59-22 Page 1