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Wednesday, May 8, 2013

The basis for how the city calculates the sewage charge.

 
 
Here is the utility rate notice sent to the public in 2010 for reference.
 

 
 
Notice that there is no basis for how the fees are calculated. This is required by Article 13 D section 6 1
The basis is how the fee is calculated as shown below for all residential homes.
The average number persons per household (PPH) is different for single, multifamily and Mobile homes.

The number of people per household is from the 2010 census.

The formula is as follows
 (( (PPH) *(gallons per day)* (365 days a year)* (number of parcels ) ) /total gallons of all parcels )  * cost of service ) / number of parcels

Single family units: 3.45 PPH * 65 gallons per day * 365 days a year * 12265 parcels  =  1,00,323,730 gallons.
Multifamily units:   2.75 PPH * 60 gallons per day * 365 days a year *  6397 parcels  =     385,259,325 gallons.
Mobile home units|  1.90 PPH * 65 gallons per day * 365 days a year *   570  parcels  =       25,694,175 gallons.
The total of all the gallons for all the household units per year is                                         1,414,77230 gallons.

Multiply the ratio of family type over the total of all housing types by the yearly fee of $7,369.096.00 .

The cost for the single family:
1,003,823,730 gallons / 1,414,77230 gallons * $7,369.096.00 = $5,2228,578.24.
Divide  $5,228,578.24 by 12265 single family units = $426.34 annual fee or bimonthly fee of $71.06.

The cost for the multifamily unit is
 385,259,325 gallons 1,414,77230 gallons * $7,369.096.00 = $2,006,685.50 per year.
Divide $2,006,685.50 by  / 6397 multifamily  parcels  = $313.69 annual fee or bimonthly fee of $52.28

The cost for mobile homes is 
 25,694,175 gallons /1,414,77230 gallons * $7,369.096.00 = $133,832.27
Divide $133,832.27/570 mobile home parcels = $234.79 annual fee or $39.13 bimonthly fee.

resident type 2010  fee calculated fee % change
single $425.64 $426.34 0.16%
multifamily $304.08 $313.69 3.16%
mobile home $187.08 $234.79 25.50%

In 2010 the single family units were already paying more than $120 for the same service that the multifamily units are paying but the city of Milpitas did not like the results of the calculations because the new increased fee was less then a $1.00 per year more for single family units from the 2010 fee. The city had to change the result. The city then changed the average number of persons per household from 3.45 to 3.37 for single family units and from 2.75 to  2.05  persons per household for multifamily. Reducing the multifamily unit by 0.7 PPH has a big effect in reducing the amount that multifamily family parcels has to pay for service. Single and multifamily numbers of people went down but the single family went down only .08 PPH (3.45 -3.37), but the multifamily units went down (2.75 -2.05) is 0.70 PPH over 9 times greater then the single family units. Mobile home numbers of PPH remain the same. The result is that the single family fee went up 7% more then in 2010. This is because if you reduce the number of people per household then the gallons of sewage goes down for that housing type, remember that there are 6397 parcels. If the total gallons goes down for one housing type and the cost remains the same ($7,369,096.00)  than the fee will go up for the other housing units  (single family units) and of course the fee for the housing unit that had the reduction in average people per household (PPH) will go down. If you use the same formula with the new numbers the fee for single will go from $71.06 to  $75.98.

The city got the 3.35, 2.05  and 1.90 people per household from the 2010 sewage revenue report. This report  reference to the PPH data from the  1975 Santa Clara development report. So the PPH numbers are over 38 years old statistics.
                                            
resident type 2010  fee calculated fee % change
single $425.64 $455.52 7.02%
multifamily $304.08 $255.78 -15.88%
mobile home $187.08 $256.82 37.28%
 
In the table notice that the single family calculated fee is now $455.52 which is 7% higher then the 2010 fee.
The multifamily fee should go down by 15.88% but the city did not want that to happen so they predicted the future fee in 2014/2015 time frame would be higher by 3% so the city just ignores the calculated value above and just average the 2010 fee with the future fee to charge the multifamily units $306.36.  The city ignores the mobile family units as well to charge them a fee of 200.16. What this means is that the city just manipulates the numbers to get everyone to pay what the city wants the residents to pay.
 Comparing the fees collected with the fee needed to pay the bill is shown below will show that the city violated article XIII D section 6 (b) 1 which states:
" Revues derived from the fee or charge shall not exceed the funds required to provide the property related service "

resident type fee charged umber of parcels fee collected
single $455.52 12264 $5,586,497.28
multifamily $306.36 6397 $1,959,784.92
mobile home $200.16 570 $114,091.20
fee collected $7,660,373.40
fee collected to pay bill $7,369,096.00
overcharge $291,277.40

Now you know the reason why you should know the basis for how the fees are calculated to understand the manipulation that the city does to overcharge you for your service.

     
 
 







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