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Cal -Am Water Rate Update January 24, 2017 Page 3 City staff is concerned about the proposed rates under the consolidation option. The proposed increases, coupled with the additional imported water increases, would put Cal -Am rates significantly higher than both City and Cal Water rates, as shown in Table 2. Table 2 Residential Monthly Water Cost Comparison Purveyor 2016 Cost 18 hcflmonth Proposed 2018 wl consolidation)-* Cal -Am $103 $131 $112 --City_$103 Cal Water $108 $118 *Includes imported water increase Historically, all three purveyors' rates have been similar. This is reasonable considering all pay the same for imported water and all have similar distribution systems of like age; therefore, all should have approximately equal operating, maintenance, and capital costs. On Tuesday, January 17, 2017, at 6 p.m., the GPUC: need a public hearing at the Palm Garden Hotel in Thousand Oaks. Approximately 150 residents attended the hearing. All residents who spoke (about 35) were in opposition to consolidation, and some were opposed to the 15 percent stand-alone option increase as well. The proposed rates under the GRC filed last year have the potential for significant impact to City residents who are Cal -Am customers. Accordingly, City staff filed for and was granted "Party" status by the CPUC. Party status provides the City the opportunity to have greater influence in the GRC proceedings through providing direct testimony in opposition to the consolidation option, rebutting testimony submitted by Cal -Am, and cross examining witnesses during the hearing phase of the GRC. Because the GRC process is complicated and legally technical, staff recommends retaining outside counsel with CPUC expertise to assist the City through the process. Attorney and expert costs are estimated not to exceed $100,000. The City Attorney's Office entered in to an agreement with Downey Brand, LLP for legal services related to this matter. Staff recommendation is for City Council to authorize expenditure of up to $100,000 for said services. COUNCIL GOAL COMPLIANCE: Meets City Council Goals A and B: A. Provide municipal government leadership which is open and responsive to residents, and is characterized by ethical behavior, stability, promoting public trust, transparency, confidence in the future, and cooperative interaction among civic leaders, residents, business representatives, and staff, while recognizing and respecting legitimate differences of opinion on critical issues facing the City.